In: Accounting
Saputo Inc. produces, markets, and distributes a wide variety of products, including cheese, fluid milk, yogurt, dairy ingredients, and snack cakes. It is the largest dairy processor in Canada and serves customers in over 50 countries. |
The following transactions occurred during a recent year. Amounts are in millions of dollars. | |
a. | Issued $30 in shares to investors (example). |
b. |
Purchased $149 of additional property, plant, and equipment for cash. |
c. | Incurred $309 in selling expenses with two-thirds paid in cash and the rest on account. |
d. | Purchased on account $6,128 of raw materials used in processing various dairy products. |
e. | Earned $7 interest on investments; received 50 percent in cash. |
f. | Paid $21 on bank loans. |
g. | Sold $8,422 of products to customers on account; the cost of the products sold was $6,263. |
h. | Incurred $9 in interest expense (not yet paid). |
i. | Declared and paid cash dividends of $184. |
Required: |
Complete the tabulation below for each of the transactions, indicating the effect of each transaction. (Remember that A = L + SE, R − E = NE, and NE affects SE through retained earnings.) The first transaction is provided as an example. (Enter any decreases to account balances with a minus sign. Enter your answers in millions.) |
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Saputo Inc. | ||||||||||||
No. | A | = | L | + | SE | R | - | E | = | NE | Remarks | |
a. | 30.00 | 30.00 | Cash will increase by $ 30 and Share capital will increase by $ 30. | |||||||||
b. | Cash will decrease by $ 149 and Property plant, and equipment will increase by $ 149. Overall no impact in total Assets and liabilities and stockholder's equity. | |||||||||||
c. | (206.00) | 103.00 | 309.00 | (309.00) | Expense will increase by $ 309. 2/3 of $ 309= $ 206 paid in cash and 1/3 of $ 309= $ 103 on account. | |||||||
d. | 6,128.00 | 6,128.00 | As it is purchased on account so inventory asset will increase by $ 61,28 and liability will increase by $ 6,128. | |||||||||
e. | 7.00 | 7.00 | 7.00 | Revenue and asset will increase by $ 7. | ||||||||
f. | (21.00) | (21.00) | Cash and liability will decrease by $ 21. | |||||||||
g. | 2,159.00 | 8,422.00 | 6,263.00 | 2,159.00 | Accounts receivable will increase by $ 8,422 but inventory will decrease by $ 6,253 so net impact on assets is $ 2,159. Revenue will increase by $ 8,422 and Expense will increase by $ 6,263. | |||||||
h. | 9.00 | 9.00 | (9.00) | Expense and liability will decrease by $ 9. | ||||||||
i. | (184.00) | (184.00) | - | Cash and Share capital will decrease by $ 184. | ||||||||
Totals | 7,913.00 | 6,219.00 | (154.00) | 8,429.00 | 6,581.00 | 1,848.00 | ||||||