Lasko Trial Balance as of 12/31/17 each account has a normal balance.

Use this financial information to answer the questions below.

1) What is the gross profit for Lasko for the year ended 12/31/17?

• $67,600

• $72,400

• $92,600

• $140,000

• 2) Using the Lasko Trial Balance as given above, then the most likely total for owner equity at 12/31/2017?

• $151,500

• $126,500

• $121,500

• $80,000

• 3) Using the Lasko Trial Balance as given above and that Lasko had a gross profit ratio (gross margin ratio) for 2016 of 50%, you can determine that for Lasko which of the following is true?

• Their ability to generate profit from sales is worse than for the year 2016.

• Their ability to generate profit from sales is better than for the year 2016.

• Their ability to generate profit from sales is unchanged compared to the year 2016.

• Can’t determine the gross profit ratio (gross margin ratio)in 2017 – not enough information.

• 4) Using the Lasko Trial Balance as given above and that Lasko had a current ratio for 2016 of 1.5:1; you can determine that for Lasko which of the following is true?

• Their ability to pay short term obligations is worse than at the end of 2016.

• Their ability to pay short term obligations is better than at the end of 2016.

• Their ability to pay short term obligations is unchanged compared to the end of 2016.

• 5) Assuming that the only depreciable asset is the office equipment, the information shown in the trial balance indicates that the office equipment has been used by Lasko for how many years?

• 5 Years

• 4 Years

• 3 Years

• 2 Years

• 6) Looking at the Lasko Trial Balance for accuracy and based on what accounts are already listed, which of the following accounts should be included but are not?

• Supplies expense

• Interest expense

• Allowance for Doubtful Accounts

• All of the above accounts would be expected.

Isabella traveled to a neighboring state to investigate the purchase of an interior design firm. Her expenses included travel, legal, accounting, and miscellaneous expenses. The total was $51,000. She incurred the expenses in January and February of 2018. In each of the following scenarios, what can Isabella deduct in 2018?

In your computations, round the per-month amount to the nearest dollar. If an amount is zero, enter "0".

a. Isabella was in the interior design business and did not acquire the interior design firm.
$

b. Isabella was in the interior design business. She acquired the interior design firm and began operating it on August 1, 2018.
$

c. Isabella did not acquire the interior design firm and was not in the interior design business.
$

d. Isabella acquired the interior design firm but was not in the interior design business when she acquired it. Operations began on May 1, 2018.
$

11. What do you need to ensure when preparing and distributing reports that document accounts receivable, debt recovery type and cause, and debt recovery plans?

12. What types of accounting documentation will need to be filed, according to the organisational policies and procedures? List 4 examples

13. What documentation would you require to identify, investigate and rectify creditor invoice discrepancies?

1. One way of accessing financial information about a company is to look it up at the company's website. Access the most recent annual report of a company of your choice from the company's website and address the following points. a. Review the company's footnotes (notes accompanying the financial statements) to discover how it applies the revenue recognition principle and when it recognizes revenue. Report what you discover. b. Based on your observation of the financial statements, what amount should be credited to Income Summary to summarize its revenues earned? c. Based on your observation of the financial statements, what amount should be debited to Income Summary to summarize its expenses incurred? d. What is the balance of its Income Summary account before it's closed?

Executives of the Carrot Watch, Inc. (which produces Apple Watch knock-offs) produced the latest watch which is now ready for distribution. Carrot Watch sells to a wholesaler who then sells to retailers and ultimately end consumers. The following cost information is needed to answer the questions below for Carrot Watch, Inc.:

Calculate the following:

1. Unit Gross Profit Margin in both dollars and percent

2. Assume there were 12,000 watches sold. What is the TOTAL Gross Profit margin in dollars.

3. Manufacturer Margin (as a % of Selling Price)

Question 4 Budgeting – To be done on Excel. Email your answer to tutor.

Hudson Holdings Ltd is a merchandising company that is preparing a master budget for the third quarter of the calendar year. The company’s balance sheet at June 30^th is shown below:

Hudson Holdings Ltd managers have made the following additional assumptions and estimates:

• Estimated sales for July, August, September, and October will be $252,000, $276,000, $264,000, and $288,000, respectively.

• All sales are on credit and all credit sales debts are collected. Each month’s credit sales are collected 35% in the month of sale and 65% in the month following the sale. All of the accounts receivable at June 30 will be collected in July.

• Each month’s ending inventory must equal 30% of the cost of the next month’s sales. The cost of goods sold is 60% of sales. The company pays for 40% of its merchandise purchases in the month of the purchase and the remaining 60% in the month following the purchase. All of the accounts payable at June 30 will be paid in July.

• Monthly selling and administrative expenses are always $72,000. Each month $6,000 of this total amount is depreciation expense and the remaining $66,000 relates to expenses that are paid in the month they are incurred.

• The company does not plan to borrow money or pay or declare dividends during the quarter ended September 30. The company does not plan to issue any shares or repurchase its own shares during the quarter ended September 30.

REQUIRED

1. Prepare a schedule of expected cash collections for July, August, and September. Also calculate total cash collections for the quarter ended September 30.

(b)

i           Prepare a merchandise purchases budget for July, August and September and also calculate total merchandise purchases for the quarter ended September 30.                                                                                    

ii          Prepare a schedule of expected cash disbursements for merchandise purchases for July, August, and September. Also calculate total cash disbursements for merchandise purchases for the quarter ended September 30.                                                                                                           

(c) Prepare an income statement for the quarter ended September 30. (Use the absorption format)                                                                                              

(d) Prepare a balance sheet as at September 30.                                              

Question 4 To be done on Excel.

………………REFER TO THE DATA IN QUESTION 4 ABOVE………………………………..

Hudson Holdings Ltd is considering making the following changes to the assumptions underlying its master budget.

1. Each month’s credit sales are collected 45% in the month of sale and 55% in the month following the sale.

2. Each month’s ending inventory must equal 20% of the cost of next month’s sales.

3. The company pays for 30% of its merchandise purchases in the month of the purchase and the remaining 70% in the month following the purchase.

All other information from question 4 above that is not mentioned remains the same.

REQUIRED:

Using the new assumptions described above, complete the following requirements:

a.

Prepare a schedule of expected cash flows for July, August, and September. Also calculate total cash collections for the quarter ended September 30.                                 

b.

1. Prepare a merchandise purchases budget for July, August, and September. Also calculate total merchandise purchases for the quarter ended September 30.             

2. Prepare a schedule of expected cash disbursements for merchandise purchases for July, August and September. Also calculate total cash disbursements for the quarter ended September 30.

c.

Prepare an income statement for the quarter ended September 30. (Use the absorption format)

d.

Prepare a balance sheet as at September 30.                                              

Arborista, Inc. plants trees and shrubs for homeowners. The trees are

purchased from and delivered by a sister company, Trees-R-Us, Inc.;

Arborista specializes in planting. Arborista obtained capital from family

members in exchange for common stock, which provides an ownership

interest to the family members. On December 1, a total of $50,000 was

raised by issuing 10,000 shares of stock.

An additional $20,000 was borrowed from their hometown bank, also on

December 1. The principal must be repaid at the end of two years, along

with 6 percent interest annually, which accrues as time passes.

Also on December 1, Arborista took delivery of, and began using in the

business, two previously owned Ford F-250 pick-ups for which it paid cash

of $7,000 each. These trucks areexpected to last for five more years, and

the best guess is that each will be worth $1,000 at the endof the five-year

period.

Arborista hired two employees to do the planting: Frank and Francois.

Frank is extremely knowledgeable, but a bit taciturn. Francois is generally

ebullient and has a lovely accent, and so his services were in high demand

by the customers of his former employer. As a result of his popularity,

Francois negotiated a deal with Arborista that he will be paid in advance for

every job (i.e., at the time the job is scheduled). Frank is happy to follow the

more generally accepted method of being paid after he does the work. The

employees furnish their own tools (i.e., shovels and picks).

Arborista decides to charge $75 for planting each tree. The worker planting

the tree (i.e., Frank or Francois) will receive $20 per tree as his wage.

On December 18, two clients came into the office to arrange to have trees

planted on their property. The first client, Ms. Imaprimadonna, was

insistent that her 20 trees/shrubs be planted the next day, as it was critical

that the work be completed before the holidays. Furthermore, she insisted

that Frank do the planting, as she had heard Francois was the chatty type

and she did not want to pay someone to chat. In addition, she insisted that

Frank must arrive at her house before the clock truck 8:00 a.m., or the

order was cancelled. Finally, Ms. Imaprimadonna insisted that she be billed

for the job and allowed to pay in three weeks.

2

The second client, Ms. Bonappetit, wanted 30 trees/shrubs planted. She

was flexible about when the work would be completed, as long as it was

scheduled after the first of the year. However, she did ask that Francois do

the work, as she had heard wonderful things about his charming manner

from her friend. Ms. Bonappetit insisted on paying in advance, and

immediately wrote a check for the total amount. Arborista scheduled

Francois to do the work in four weeks and, per their

agreement, paid him immediately.

Frank arrived at Ms. Imaprimadonna’s home at 7:59 a.m. on December 19

and completed the planting to her satisfaction. His next payday is January

5. Ms. Imaprimadonna paid promptly on January 8. Francois performed

the work for Ms. Bonappetit on January 15. Both customers promised to

recommend Arborista, Inc. to their friends.

Required

Prepare a Balance Sheet, Income Statement, and Statement of Cash Flows

as of December 31.

Greive is a sole trader business which only manufactures and sells a set of garden equipment which comprises a spade, a hose pipe and a trowel.

Given below are the sales revenue and profit for 2017.

In 2017 the business manufactured and sold 22,000 sets of garden equipment and had fixed costs of £124,000. All other costs were variable.

Required:

a.Calculate the average selling price, variable cost and contribution for a set of garden equipment for 2017.

b.Calculate the average sales revenue level, both in numbers of sets of garden equipment and in money terms, at which the business broke even in 2017. (Your calculation should be rounded up to the nearest whole number.)

c.Why does it make more sense for a break-even calculation to round up to the nearest whole number and not just to the nearest number?

d.Calculate the number of sets of garden equipment needed to be sold to earn a profit of £200,000.

e.Calculate the margin of safety for Greive for 2017.

Jabieb corporation issued 3,000 convertible bonds on January 1, 2018. The bonds have a 3-year life and are issued at par with a face value of $1,000 per bond, giving total proceedings of $3,000,000. Interest is payable annually at 6%. Each bond is convertible into 200 ordinary shares (par value $1). The market rate of interest on similar non-convertible debt is 8%

a) Compute the liability and equity component of the convertible bond on January 1, 2018.

b) Assume the bond is converted on January 1, 2019, compute the carrying value of the bond payable on

January 1 2019.

c) Prepare the journal entry to record the conversion on January 1, 2019. .

d) Assume that the bonds were repurchased on January 1, 2019 for $2,900,000 cash instead of being

converted. The net present value of the bonds on January 1, 2019 is $2,850,000. Prepare the journal entry

to show the repurchase on January 1, 2019.

Josh Company had 200,000 ordinary shares outstanding on December 31, 2017. The company issued 20,000 shares on April 1, 2018 and retired 10,000 shares on September 1, 2018. Josh company recorded net income for the year ended December 31, 2018 of $300,000 after a loss on discontinued operations of $35,000 (net of tax).

Brief Exercise 9-45 (Algorithmic)
Issuance of Long-Term Debt

Natalie Corp. provides medical supplies to hospitals located in Western Washington and Oregon. This year, Natalie Corp. issued 6,200 bonds with a $1,000 face value. The nominal rate for each bond is 7%.

Required:

Prepare the necessary journal entries to record the issuance of these bonds assuming the bonds were issued (a) at par, (b) at 103, and (c) at 96.

• What are the benefits of adopting international accounting standards for (a) investors, and (b) business enterprises?
• What are the potential risks associated with a move toward the adoption of international accounting standards in a nation

Kubin Company’s relevant range of production is 23,000 to 27,500 units. When it produces and sells 25,250 units, its average costs per unit are as follows:

Required:

1. Assume the cost object is units of production:

a. What is the total direct manufacturing cost incurred to make 25,250 units?

b. What is the total indirect manufacturing cost incurred to make 25,250 units?

2. Assume the cost object is the Manufacturing Department and that its total output is 25,250 units.

a. How much total manufacturing cost is directly traceable to the Manufacturing Department?

b. How much total manufacturing cost is an indirect cost that cannot be easily traced to the Manufacturing Department?

3. Assume the cost object is the company’s various sales representatives. Furthermore, assume that the company spent $95,950 of its total fixed selling expense on advertising and the remainder of the total fixed selling expense comprised the fixed portion of the company's sales representatives’ compensation.

a. When the company sells 25,250 units, what is the total direct selling expense that can be readily traced to individual sales representatives?

b. When the company sells 25,250 units, what is the total indirect selling expense that cannot be readily traced to individual sales representatives?

Complete this question by entering your answers in the tabs below.

• Required 1
• Required 2
• Required 3

1. Assume the cost object is units of production:

a. What is the total direct manufacturing cost incurred to make 25,250 units? (Round per unit values to 2 decimal places.)

b. What is the total indirect manufacturing cost incurred to make 25,250 units? (Round per unit values to 2 decimal places.)

• Required 1
• Required 2
• Required 3

2. Assume the cost object is the Manufacturing Department and that its total output is 25,250 units.

a. How much total manufacturing cost is directly traceable to the Manufacturing Department? (Round per unit values to 2 decimal places.)

b. How much total manufacturing cost is an indirect cost that cannot be easily traced to the Manufacturing Department?

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3. Assume the cost object is the company’s various sales representatives. Furthermore, assume that the company spent $95,950 of its total fixed selling expense on advertising and the remainder of the total fixed selling expense comprised the fixed portion of the company's sales representatives’ compensation.

a. When the company sells 25,250 units, what is the total direct selling expense that can be readily traced to individual sales representatives? (Round per unit value to 2 decimal places.)

b. When the company sells 25,250 units, what is the total indirect selling expense that cannot be readily traced to individual sales representatives?

Show less

Brand new auditors can be a problem and something that can slow the process down. Is there any disadvantage to having the same auditors every year?

Cardinal Company is considering a five-year project that would require a $2,860,000 investment in equipment with a useful life of five years and no salvage value. The company’s discount rate is 14%. The project would provide net operating income in each of five years as follows:

2-a. What are the project’s annual net cash inflows?

2-b. What is the present value of the project’s annual net cash inflows? (Round discount factor to 3 decimal places.)

3. What is the project’s net present value? (Round discount factor(s) to 3 decimal places and final answer to the nearest whole dollar amount.)

What is the project profitability index for this project? (Round discount factor(s) to 3 decimal places and final answer to 2 decimal places.)

Thank you