Statement of Cash Flows—Direct Method applied to PR 16-1A

The comparative balance sheet of Navaria Inc. for December 31, 20Y3 and 20Y2, is as follows:

The income statement for the year ended December 31, 20Y3, is as follows:

Additional data obtained from an examination of the accounts in the ledger for 20Y3 are as follows:

1. The investments were sold for $101,780 cash.
2. Equipment and land were acquired for cash.
3. There were no disposals of equipment during the year.
4. The common stock was issued for cash.
5. There was a $35,000 debit to Retained Earnings for cash dividends declared.

Required:

Prepare a statement of cash flows, using the direct method of presenting cash flows from operating activities. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments.

Blanchard Inc. acquired a packaging machine from CCC Corporation. CCC Corporation completed construction of the machine on January 1, 2020. In payment for the $5 million machine, Blanchard Inc. issued a three-year installment note to be paid in three equal payments at the end of each year. The payments include interest at the rate of 8%.

1. Prepare the journal entry for Blanchard’s purchase of the machine on January 1, 2020.

2. Prepare the partial amortization schedule for the first two years of the 3-year installment note.

3. Prepare the journal entry for the installment payments on December 31, 2020 and December 31, 2021.

The cash account for American Medical Co. at April 30 indicated a balance of $93,115. The bank statement indicated a balance of $125,800 on April 30. Comparing the bank statement and the accompanying canceled checks and memos with the records revealed the following reconciling items:

Given the following information, determine the cost of ending inventory at December 31:

December 2: 5 units were purchased at $7 per unit.
December 9: 10 units were purchased at $9.40 per unit.

December 11: 12 units were sold at $35 per unitDecember 15: 20 units were purchased at $10.15 per unit
December 22: 18 units were sold at $35 per unit

Use the above information for parts a, b and c.

a. Use the LIFO , Last In First Out, inventory flow and perpetual inventory method to value the ending inventory.   SHOW YOUR WORK

b. Use the FIFO, First In First Out, inventory flow and perpetual inventory method to value the ending inventory. SHOW YOUR WORK

c. Use the weighted average inventory flow and perpetual inventory method to value the ending inventory. SHOW YOUR WORK

Oscar Clemente is the manager of Forbes Division of Pitt, Inc., a manufacturer of biotech products. Forbes Division, which has $6.7 million in assets, manufactures a special testing device. At the beginning of the current year, Forbes invested $7.3 million in automated equipment for test machine assembly. The division's expected income statement at the beginning of the year was as follows:

A sales representative from LSI Machine Company approached Oscar in October. LSI has for $6.0 million a new assembly machine that offers significant improvements over the equipment Oscar bought at the beginning of the year. The new equipment would expand division output by 11.4 percent while reducing cash fixed costs by 6.4 percent. It would be depreciated for accounting purposes over a three-year life. Depreciation would be net of the $645,000 salvage value of the new machine. The new equipment meets Pitt's 21.4 percent cost of capital criterion. If Oscar purchases the new machine, it must be installed prior to the end of the year. For practical purposes, though, Oscar can ignore depreciation on the new machine because it will not go into operation until the start of the next year.

The old machine, which has no salvage value, must be disposed of to make room for the new machine.

Pitt has a performance evaluation and bonus plan based on ROI. The return includes any losses on disposal of equipment. Investment is computed based on the end-of-year balance of assets, net book value. Ignore taxes.

Oscar Clemente is still assessing the problem of whether to acquire LSI’s assembly machine. He learns that the new machine could be acquired next year, but if he waits until then, it will cost 16.4 percent more. The salvage value would still be $645,000. Other costs or revenue estimates would be apportioned on a month-by-month basis for the time each machine (either the current machine or the machine Oscar is considering) is in use. Fractions of months may be ignored. Ignore taxes.

Required:

Calculate ROI for the coming year assuming that the new equipment is bought at the beginning of the year. (Do not round intermediate calculations. Enter your answer as a percentage rounded to 1 decimal place (i.e., 32.1).)

Roi %

The following cost and inventory data are taken from the accounting records of Mason Company for the
year just completed:

Costs incurred:
Direct labor cost ................................................... $70,000
Purchases of raw materials .................................. $118,000
Manufacturing overhead ...................................... $80,000
Advertising expense ............................................. $90,000
Sales salaries ....................................................... $50,000
Depreciation, office equipment ............................ $3,000

Beginning of the year End of the year
  
Inventories:
Raw materials ............................ $7,000 $15,000
Work in process .......................... $10,000 $5,000
Finished goods ............................ $20,000 $35,000

1. Prepare a schedule of cost of goods manufactured.

2. Prepare a schedule of cost of goods sold

ACT 205 Spring 2018 - 2019 The Accounting Equation Neal decides to open a computer programming service which he names Microsoft. 1. On January 1, 2018, Neal invests $15,000 cash in the business. 2. Microsoft purchases computer equipment for $7,000 cash. 3. Microsoft purchases computer paper and other supplies for $1,600 from ABC Supply Company expected to last several months. ABC agrees to allow Microsoft to pay this bill in February. 4. Microsoft receives $1,200 cash from customers for programming services it has provided. 5. Microsoft receives a bill for $250 from the Daily News for advertising but postpones payment until a later date. 6. Microsoft provides $3,500 of programming services for customers. The company receives cash of $1,500 from customers, and bills the customers with the remaining balance. 7. Microsoft pays the following expenses in cash for January: rent $600, salaries of employees $900 and utilities $200. 8. Microsoft pays its $250 Daily News bill in cash. 9. Microsoft receives $600 in cash from customers who had been billed for services in transaction number 6. 10. Neal withdraws $1,300 in cash from the business for his personal use. Required: A. Show the effect of the above transactions on the accounting equation. Cash (asset) increased by $15,000; and Ray Neal’s Capital (owners equity) increased by $15,000 Sep. 2 Microsoft purchases computer equipment for $7,000 cash [Equipment (assets) increased by $7,000; and Cash (asset) decreased by $7,000] Sep. 3 Microsoft purchases for $1,600 from Acme Supply Company computer paper and other supplies expected to last several months. The purchase is made on account [Supplies (assets) increased by $1,600; and Accounts Payable (Liability) increased by $1,600] Sep. 10 Microsoft receives $1,200 cash from customers for programming services it has provided[Cash (assets) increased by $1,200; and Service Revenue (revenue) increased by $1,200] Sep. 15 Microsoft receives a bill for $250 from the Daily News for advertising but postpones payment until a later date[Advertising Expense (expense) increased by $250; and Accounts Payable (liability) increased by $250] Sep. 20 Microsoft provides $3,500 of programming services for customers. The company receives cash of $1,500 from customers, and it bills the balance of $2,000 on account [Cash (assets) increased by $1,500; Accounts Receivable (asset) increased by $2,000; and Service Revenue (revenue) increased by $3,500] Sep. 25 Microsoft pays the following expenses in cash for September: store rent $600, salaries of employees $900 and utilities $200[Rent Expense, Salaries Expense, Utility Expense (expenses) increased by $600, $900, and $200 respectively; and Cash (asset) decreased by $1,700] Sep. 27 Microsoft pays its $250 Daily News bill in cash [Accounts Payable (liability) decreased by $250; and Cash (asset) decreased by $250 Sep. 28 Microsoft receives $600 in cash from customers who had been billed for services [in Transaction Sep. 20] Sep. 30 Ray Neal withdraws $1,300 in cash from the business for his personal use[Cash (asset) decreased by $1,300; and Ray Neal’s Drawings (owners equity) decreased by $1,300] B. Prepare the financial statements of Microsoft on January 31, 2018. • Income Statement • Statement of Owner’s Equity • Balance Sheet Assets = Liabilities + owner's Equity Cash +Equipment +Supplies +Accounts Receivable = Accounts Payable +Capital +Revenues -Expenses -withdrawal 1 +15,000 = +15,000 15,000 = 15,000 2 -7,000 +7,000 = 8,000 +7,000 = 15,000 3 +1,600 = +1,600 8,000 +7,000 +1,600 = 1,600 +15,000 4 +1,200 = +1,200 9,200 +7,000 +1,600 = 1,600 +15,000 +1,200 5 = +250 -250 9200 +7,000 +1,600 = 1,850 +15,000 +1,200 -250 6 +1,500 +2,000 = +3,500 10,700 +7,000 +1,600 +2,000 = 1,850 +15,000 +4,700 -250 7 -1,700 = -900 -600 -200 9,000 +7,000 +1,600 +2,000 = 1,850 +15,000 +4,700 -1,950 8 -250 = -250 8,750 +7,000 +1,600 +2,000 = 1,600 +15,000 +4,700 -1,950 9 +600 -600 = 9,350 +7,000 +1,600 +1,400 = 1,600 +15,000 +4,700 -1,950 10 -1300 = -1,300 8,050 +7,000 +1,600 +1,400 = 1,600 +15,000 +4,700 -1,950 -1,300

Journalize the five transactions for Mirmax Rentals described below:

August 1 Mirmax purchases two new saws on credit at $375 each. The saws are added to Mirmax’s rental inventory. Payment is due in 30 days.

August 8 Mirmax accepts advance deposits for tool rental of $75 that will be applied to the cash rental when the tools are returned.

August 15 Mirmax receives a bill from Macon Utility Company for $150. Payment is due in 30 days.

August 20 Mirmax charges Customers $750 for tool rentals. Payment is due in 30 days.

August 31 Mirmax receives $500 in payments from the customers that were bill for rentals on August 20.

Given the following balances for Garry’s Tree Service, prepare a Trial Balance

Financial Statements

Prepare an Income Statement, Statement of Owner’s Equity and Balance Sheet

Problem 3                              
Financial Statements                              
           Income Statement                  
                               
                              
                              
It should be in excel format could not upload the excel form that I had worked on boy should be in

Problem 3                              
Financial Statements      

Income Statement      
           Income Statement                  
                               

Everyone, how is the "Fraud Pyramid" (sometimes called the "Fraud Triangle") different from/similar to the "Fraud Diamond" discussed in the text? Which of these three descriptions do you believe is the more accurate/descriptive, and why?

Prontor Limited is ready to prepare the master budget for the year of 2019. The company uses full absorption costing system. The Financial Position as at 31st December 2018 is as follows:

Financial Position as at 31st December 2018

                                                                                            145,850                                                  145,850

Sales and inventory data:

East Malaysia          :          2,000 units of Product Z and 2,000 units of Product Y.

       West Malaysia                 :      6,000 units of Product Z and 5,000 units of Product Y.

Selling prices          :   Product Z at $12 per unit            

                                  Product Y at $20 per unit

Planned ending inventory :         400 units of Product Z and 700 units of Product Y

Beginning inventory      : 200 units of Product Z and 350 units of Product Y

   Additional information for Prontor Limited is as follows:

Factory overhead is expected to be as follows: $75,600                                                                    

Selling and Administration expenses are budgeted as below $18,000
The cash flows of the company are projected as below :

Prontor Limited has an arrangement with its bankers that it can borrow money in multiples of $1,000, and pay interest at 12% per annum. Loans are borrowed on the first day of the quarters and repayable on the last day of the quarters in question. Interest is to be paid on repayment of loan.

Calculate

1. Cash Budget
2.   Budgeted Statement of Comprehensive Income for the year ending 31^st December 2019.
3.   Projected Financial Position as at 31^st December 2019.

The auto repair shop of Quality Motor Company uses standards to control the labor time and labor cost in the shop. The standard labor cost for a motor tune-up is given below:

a. Standard Hours b.Standard Rate c. Standard Cost Motor tune-up

a. 12.60 b. $4.00 c. $10.40

The record showing the time spent in the shop last week on motor tune-ups has been misplaced. However, the shop supervisor recalls that 180 tune-ups were completed during the week, and the controller recalls the following variance data relating to tune-ups:

Labor rate variance $ 714 U

Labor spending variance $ 882 U

Required:1. Determine the number of actual labor-hours spent on tune-ups during the week.

2. Determine the actual hourly rate of pay for tune-ups last week. (Round your answer to 2 decimal places.)

I keep coming up with 867 for #1 and can't figure out where i'm going wrong.

Crane Company had 450 units of “Dink” in its inventory at a cost of $4 each. It purchased, for $2350, 280 more units of “Dink”. Crane then sold 580 units at a selling price of $9 each, resulting in a gross profit of $1670. The cost flow assumption used by Crane

FIFO

LIFO

Cannot be determined

weighted average

Tennis Shop Ltd (the “Shop”), a GST registered company, has a 30 June year-end. Stock takes are performed at the end of each quarter, i.e., 30 June is the end of the second quarter. Included in the general ledger are accounts for Cash, Accounts Receivable, Inventory, Accounts Payable, GST Clearing, Discounts Lost, Cost of Goods Sold, Sales, Sales Discounts, Sales Returns and Allowances. All suppliers are GST registered, as well.

The Shop has been operating under the gross purchases method applied in a perpetual inventory system. Management is interested in comparing the gross purchases method to the net purchases method and has employed you as a consultant to help with this.

The following transactions occurred during July 2018. On 1 July, there was a balance of $2,100 in Accounts Payable relating to a June inventory purchase. If the net purchases method had been used, the balance would have been $2,058.

Required:

a) Journalise, in the table provided below, the following July transactions, assuming the perpetual inventory system. First, do so under the gross purchases method, then do so under the net purchases method. If necessary, round to two decimal places. You may assume that the sale of 12 July was the only sale for the month.

Date   Transaction details:
(i)   2/7   Paid the Accounts Payable within the discount period.

(ii)   7/7    Purchased tennis racquets on account from Racquets Ltd $2,040, not including GST, terms 2/10, n/30.
      
(iii)   9/7   The Shop returned some racquets to Racquets Ltd and received credit for $230, including GST.
      
(iv) 12/7   Sold racquets on account $1,242, terms 2/10, n/30, including GST, to Sterling Sports. The inventory sold had a cost of $756, net of GST, under both methods, i.e., the discount had been taken.
      
(v)  16/7   Paid Racquets Ltd the amount due and took the discount.
      
(vi)  18/7   Sterling Sports returned some racquets and received a credit of $92, including GST. The Balls, which had cost the Shop $58, net of GST under both methods, would be re-sold.
      
(vii)  22/7   Sterling Sports paid the balance due within the discount period.

b) Revisit the transaction described in (v) above. Suppose the Shop paid Racquets Ltd after the discount period had expired. Prepare the Shop’s journal entries under both the gross and net purchases methods.

c)    Why might the Shop prefer the net purchases method over the gross purchases method?

After the amount due on a sale of $85,750, terms 3/10, n/eom, is received from a customer within the discount period, the seller consents to the return of the entire shipment. The cost of the merchandise returned was $47,163.

b. Illustrate the effects on the accounts and financial statements of the return and the refund. If no account or activity is affected, select "No effect" from the dropdown and leave the corresponding number entry box blank. Enter account decreases, net cash outflows, and all negative effects on net income as negative amounts.