You are the accounting manager of ABC Inc, which sells laptops. Your company has the following transactions for the month of December, 2019:

1. December 1^st: Ordered 10,000 laptops from Park Inc and paid cash of $200.
2. December 1^st: Bought a delivery truck from Arthur Motors Inc for $36,000. You estimate that this delivery truck can be used for anywhere between 12 to 36 months.
3. December 5^th: Spent $20 in cash on each laptop to package it.
4. Dec 10^th: Delivered 10,000 laptops for a price of $500 to Bata Inc. and received cash for the entire order.
5. December 20^th: Ordered 5,000 laptops from Park Inc. and paid cash of $250.
6. December 29^th: Received a call from Home Inc. saying that they want 5,000 ($500 each)laptops. Home Inc. said that they can receive delivery any time between December 30^th, 2019 and January 5^th, 2020. You also know that Home Inc. will only be able to pay in February, 2020 as it is going through financial trouble. A credit check allowed you to find out that Home Inc. will only be able to pay between 80 – 90% of the full amount.

Your CEO, Mrs. Hop, asks you to present her some accounting numbers by the end of day on December 31^st, 2019.

a) What is the highest value of net income you can report to her? (1.5 points)

b) What is the lowest value of net income you can report to her? (1.5 points)

c) What is the highest value of cash provided by operations you can report to her? (1.5 points)

d)What is the lowest value of cash provided by operations you can report to her? (1.5 points)

Please show the formula.

Recording and Reporting Equity Investment: FV-NI

Adjust FVA at Year-End

On November 1, 2020, Drucker Co. acquired the following investments in equity securities measured at FV‑NI.

Kelly Corporation—600 shares of common stock (no-par) at $60 per share. Keefe Corporation—360 shares preferred stock ($10 par) at $20 per share. On December 31, 2020, the company’s year-end, the quoted market prices were as follows: Kelly Corporation common stock, $52, and Keefe Corporation preferred stock, $24. Following are the data for 2021.

Mar. 2, 2021 Dividends per share, declared and paid: Kelly Corp., $1, and Keefe Corp., $0.50.
Oct. 1, 2021 Sold 120 shares of Keefe Corporation preferred stock at $25 per share.
Dec. 31, 2021 Fair values: Kelly common, $46 per share, Keefe preferred, $26 per share.

• Journal Entries and Financial Statement Presentation for 2020
• Journal Entries and Financial Statement Presentation for 2021

a. Prepare the entry for Drucker Company to record the purchase of the securities.

b. Prepare any adjusting entry needed at December 31, 2020.

c. Indicate the items and amounts that should be reported on the 2020 income statement of Drucker and its year-end balance sheet. Assume that the investments are classified as current.
Note: Use a negative sign to indicate a loss.

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You have correctly selected 13.

Partially correct

How much should the company report as current assets on the December 31, 2020 classified balance sheet?

On January 2, 2019, Whistler Company purchased land for $450,000, from which it is estimated that 350,000 tons of ore could be extracted. It estimates that the present value of the cost necessary to restore the land is $59,000, after which it could be sold for $21,000.

During 2019, Whistler mined 73,000 tons and sold 51,000 tons. During 2020, Whistler mined 95,000 tons and sold 103,000 tons. At the beginning of 2021, Whistler spent an additional $90,000, which increased the reserves by 57,000 tons. In 2021, Whistler mined 131,000 tons and sold 124,000 tons. Whistler uses a FIFO cost flow assumption.

Required:

If required, round the depletion rate to the nearest cent and round the final answers to the nearest dollar.

1. Calculate the depletion included in the income statement and ending inventory for 2019, 2020, and 2021.

2. Complete the natural resources section of the balance sheet on December 31, 2019, 2020, and 2021, assuming that an accumulated depletion account is used.

3. Assume Whistler's discount rate was 9%. What is the balance in the asset retirement obligation at 2019, 2020, and 2021?

A. J & B Company uses the percentage of sales approach to estimate its uncollectible accounts. The company’s annual sales for its first financial year of operations ending July 31, 2020 was $500,000, cash sales contributed to 2% of the overall sales and the accounts receivable balance at year end was $75,000. Based on industry expectations, it estimated that 3% of its credit sales would be uncollectible.

Required: Show all workings

a. Calculate the bad debt expense at July 31, 2020.

b. Calculate the net receivable balance that would be reported in the Statement of Financial Position as at July 31, 2020. (1 mark)

B. Tosh and Sons Inc. uses the percentage of receivables approach to estimate its uncollectible accounts. The company had sales of $100,000 at the end of its financial year on June 30, 2020. The allowance for doubtful debts account had a debit balance of $400, the accounts receivable balance was $30,000at year end and the company estimates the uncollectible percentages as follows:

Current (1 - 30 days)   $15,000           0.5%

31 - 60 days                 $10,000           2.0%

61 - 90 days                 $3,000             10.0%

Over 90 days               $2000              60.0%

Required: Show all workings

a. Calculate the bad debt expense at June 30, 2020.

b. Prepare the necessary journal entry to record the bad debt expense for the year.

B. During the financial year ending May 31, 2020 the Board of Directors of Chung Sa Corporation authorised the write off of a $3,000 two-year debt belonging to a previous customer Jap Inc. On July 2, 2020 Chung Sa Corporation received an electronic funds transfer from Jap Inc. in the amount of $3,000.

Required:

Prepare all necessary journal entries to record this transaction.

Question 6 Gunther Plc provides the following information on its acquisitions of non-current assets:

(1) A non-current asset (asset a) was acquired on 1 January 2016 for £100,000. It had no residual value and a useful economic life of 10 years. On 1 January 2019, the useful economic life was revised to 6 years. The company depreciates similar assets using the straight line method.

(2) A non-current asset (asset b) was acquired for £12,500 at the beginning of 2017. It had a useful economic life of 5 years and no residual value. On 1 January 2019 the asset was revalued to £15,000. The useful economic life remains unchanged. The company depreciates similar assets using the straight line method.

(3) A non-current asset (asset c) was acquired for £25,000 at the beginning of 2017. It had a useful economic life of 5 years and no residual value. On 1 January 2019 the asset was revalued to £30,000. The useful economic life remains unchanged. Asset c was sold on 31 December 2019 for £16,000. The company depreciates similar assets using the straight line method.

Required:

(a) How would each of the transactions (1) to (3) be accounted for in 2019?

(b) Compare and contrast accounting for tangible assets with that for intangible assets. Your answer to this part of the question should not be more than 200 words.

1) You visited Switzerland over summer and brought back 3,722.25 swiss francs to the United States. How many U.S. dollars will you get if you exchange your swiss francs for U.S. dollars? The exchange rate is 1 U.S dollar = 1.0147 swiss francs.

Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. For example, if your answer is $12.345 then enter as 12.35 in the answer box.

2) Suppose the exchange rate between U.S. dollars and Swiss francs is SF 1.224 = $1.00, and the exchange rate between the U.S. dollar and the euro is $1.00 = 1.1651 euros. What is the cross-rate of Swiss francs to euros (SF/Euro)?

Enter your answer rounded off to FOUR decimal points.

3) ABC Company sells 2,412 chairs a year at an average price per chair of $182. The carrying cost per unit is $22.78. The company orders 344 chairs at a time and has a fixed order cost of $113.3 per order. The chairs are sold out before they are restocked. What are the total shortage costs?

Enter your answer rounded off to two decimal points. Do not enter comma or $ in the answer box. For example, if your answer is 12.345 then enter as 12.35 in the answer box.

Case Analysis 2: The CEO of Dynamic Manufacturing was at a conference and talked to a supplier about a new piece of equipment for its production process that she believes will produce ongoing cost savings. As the Operations Manager, your CEO has asked for your perspective on whether or not to purchase the machinery. After talking to the supplier and meeting with your Engineers and Financial Analysts, you’ve gathered the following pieces of data:

• Cost of Machine: $140,000

• Estimated Annual After Tax Cash Flow Savings: $60,000 (which may or may not grow)

• Estimated machinery life: 3-5 years (after which there will be zero value for the equipment and no further cost savings)

• You seem to recall that Dynamic’s Finance organization recommends either a 10% or a 15% discount rate for all Cost Savings Projects.

Calculate the Nominal Payback, the Discounted Payback, the Net Present Value and the IRR for each scenario, assuming:

A. Ann recommends using the base assumptions above: 3 year project life, flat annual savings, 10% discount rate.

B. Bob recommends savings that grow each year: 3 year project life, 10% discount rate and a 10% compounded annual savings growth in years 2 & 3. In other words, instead of assuming savings stay flat, assume that they will grow by 10% in year 2, and then grow another 10% in year 3.

C. Cassidy believes we use a higher Discount Rate because of the risk of this type of project: 3 year project life, flat annual savings, 15% discount rate.

D. David is convinced the machine will last longer than 3 years. He recommends using a 5 Year Equipment Life: 5 year project and savings life, flat annual savings, 10% discount rate. In other words, assume that the machine will last 2 more years and deliver 2 more years of savings.

1) Which person’s scenario would you present to management and why? From a strictly financial (numbers) perspective, would you recommend this purchase to management?

2) In your opinion, which person’s scenario is based on the most aggressive assumptions? If you were to select this scenario as the basis for your proposal, how would you justify the more aggressive assumptions?

3) In SIMPLE English (as in talking to a non-Finance and non-MBA person), explain why there is value to management in running all 4 of these scenarios.

4) Beyond financial measures, what other factors would you want to consider, before making a recommendation to management? 5) If you were the CEO, would you approve this proposal? Why or why not?

***I'd appreciate if this could be broken down step by step for me, I'm having a hard time understanding where I'm going wrong with this question, thank you.

Depreciation for Partial Periods

Bar Delivery Company purchased a new delivery truck for $36,000 on April 1, 2019. The truck is expected to have a service life of 10 years or 180,000 miles and a residual value of $3,000. The truck was driven 12,000 miles in 2019 and 16,000 miles in 2020. Bar computes depreciation expense to the nearest whole month.

Required:

1. Compute depreciation expense for 2019 and 2020 using the following methods: (Round your answers to the nearest dollar.)
   1. Straight-line method

      2019	$ fill in the blank 1
      2020	$ fill in the blank 2

   2. Sum-of-the-years'-digits method

      2019	$ fill in the blank 3
      2020	$ fill in the blank 4

   3. Double-declining-balance method

      2019	$ fill in the blank 5
      2020	$ fill in the blank 6

   4. Activity method

      2019	$ fill in the blank 7
      2020	$ fill in the blank 8

2. For each method, what is the book value of the machine at the end of 2019? At the end of 2020? (Round your answers to the nearest dollar.)
   1. Straight-line method

      2019	$ fill in the blank 9
      2020	$ fill in the blank 10

   2. Sum-of-the-years'-digits method

      2019	$ fill in the blank 11
      2020	$ fill in the blank 12

   3. Double-declining-balance method

      2019	$ fill in the blank 13
      2020	$ fill in the blank 14

   4. Activity method

      2019	$ fill in the blank 15
      2020	$ fill in the blank 16

Marmidan Mold Shop Inc. designs and builds molds for the automotive and aircraft industries. The account balances in the company’s general ledger on January 1, 2020 (first day of the new annual fiscal year) were as follows (all account balances are in their normal position):

Cash                                                                    $     3,700

Accounts receivable                                                   5,900

Supplies inventory                                                    29,300

Land                                                                        168,500  

Buildings                                                                 116,500

Accumulated depreciation, buildings                       37,500   

Equipment                                                                 58,500

Accumulated depreciation, equipment                     18,000

Accounts payable                                                      25,200

Income tax payable                                                   16,600

Interest payable                                                           4,200

Wages payable (due in 2020)                                    15,700                                         

9% Notes payable ($10,000 due June 30, 2021,

     balance due June 30, 2022)                                  61,500

Common shares                                                       151,500

Retained earnings, Dec. 31, 2019                              52,200         

Transactions during 2020:

1.The company provided sales services to customers, on credit, for $ 210,300. In addition, the company produced cash sales to customers of $ 62,300.

2.Accounts receivable from customers of $ 15,600 remains to be collected at December 31, 2020.

3.Inventory of $ 62,900 was purchased on credit and debited to the supplies inventory account.

4.Minor parts were purchased with cash for $ 7,400 and debited to the supplies inventory account.

5.Wages payable at the beginning of 2020 were paid early in 2020. In addition, wages were earned by employees and paid during 2020 in the amount of $ 112,000.

6.Income tax payable at the beginning of 2020 was paid early in 2020.

7.Payments of $ 73,000 were made to creditors for supplies previously purchased on credit.

8.One year’s interest at 9% was paid on the notes payable at July 1, 2020.

9. During 2020, Don Tallint, the principal shareholder, purchased a new car for his wife

    Debbie. The new car cost $ 45,000 and was paid for with cash from personal sources.

10.Property taxes were paid on the land and buildings in the amount of $ 17,000 with cash.

11.Dividends were declared and paid in cash in the amount of $ 7,200.

The information available for year-end adjusting entries:

12.•Supplies inventory was counted on December 31, 2020, and it was determined the supplies inventory still on hand at yearend was $ 31,900.

13. •Annual depreciation on the buildings is $ 6,000.

14•Annual deprecation on the equipment is $ 5,500

15•Additional wages of $4,000 were earned but are unpaid and unrecorded at December 31, 2020.

16•Interest for six months at 9% per year on the notes payable is unpaid and unrecorded at December 31, 2020.

17•Income taxes of $ 16,500 were unpaid and unrecorded at December 31, 2020.

Question: Prepare a classified statement of financial position for Marmidan Mold Shop Inc. as at December 31, 2020 .