The Following transactions in this Question pertain to Nishat Electronic Repair Services, our imaginary small sole proprietorship business.
1. January 1, 2019, Mr. Ali Nishat started Nishat Electronic Repair Services by investing $10,000.
2. January 5, Nishat Electronic Repair Services paid registration and licensing fees for the business, $370.
3. January 6, the company acquired tables, chairs, shelves, and other fixtures for a total of $3,000. The entire amount was paid in cash.
4. January 7, the company acquired service equipment for $16,000. The company paid a 50% down payment and the balance will be paid after 60 days.
5. Also January 7, Nishat Electronic Repair Services purchased service supplies on account amounting to $1,500.
6. January 9, the company received $1,900 for services rendered. We will then record an increase in cash (debit the cash account) and increase in income (credit the income account).
7. January 12, the company rendered services on account, $4,250.00. As per agreement with the customer, the amount is to be collected after 10 days. Under the accrual basis of accounting, income is recorded when earned.
8. January 14, Mr. Nishat invested an additional $3,200.00 into the business. The entry would be similar to what we did in transaction #1.
9. January Rendered services to a big corporation on December 15. As per agreement, the $3,400 amount due will be collected after 30 days.
10. January On December 22, the company collected from the customer in transaction #7.
Required:
1. Prepare Journal entries in the books of Mr. Ali.
2. Prepare ledger

Plant acquisitions for selected companies are as follows.

1. Pina Industries Inc. acquired land, buildings, and equipment from a bankrupt company, Torres Co., for a lump-sum price of $966,000. At the time of purchase, Torres’s assets had the following book and appraisal values.

To be conservative, the company decided to take the lower of the two values for each asset acquired. The following entry was made.

2. Grouper Enterprises purchased store equipment by making a $2,760 cash down payment and signing a 1-year, $31,740, 10% note payable. The purchase was recorded as follows.

3. Monty Company purchased office equipment for $18,700, terms 2/10, n/30. Because the company intended to take the discount, it made no entry until it paid for the acquisition. The entry was:

4. Flounder Inc. recently received at zero cost land from the Village of Cardassia as an inducement to locate its business in the Village. The appraised value of the land is $37,260. The company made no entry to record the land because it had no cost basis.

5. Culver Company built a warehouse for $828,000. It could have purchased the building for $1,021,200. The controller made the following entry.

Prepare the entry that should have been made at the date of each acquisition.

Multiple Choice

1. Investor is not a parent entity if

1. The investor has power over the investee
2. Investors have the ability to influence investment returns
3. The investor has the right to the investee's variable returns
4. The investor has significant influence over the investee

2. The accounting method applied for business combinations in accordance with PSAK 22 / IFRS 3 is:

1. Acquisition method
2. The pooling of ownership method
3. Proportional consolidation method
4. Equity method

3. A is a newly formed entity to acquire B and C an existing entity prior to the business combination. The acquirer is

1. C
2. B or C
3. B
4. A

4. The requirements for disclosing financial statements in PSAK 67 / IFRS 12 are exempted in the event that the entity has an interest in

1. Unconsolidated structured entities
2. Child entity
3. Joint measurement
4. The association entity held for sale

5. The following are not business combination transactions of entities under common control

1. The parent company exchanges its ownership in a portion of the net assets of its subsidiary for additional shares issued by another subsidiary.
2. The parent company transfers a portion of the net assets of its subsidiary to the assets of the parent
3. The parent company purchases the net assets or part of the ownership rights of non-controlling shareholders
4. The parent company transfers part of its ownership rights in one subsidiary to another subsidiary

6. The following factors are not relevant in determining the entity's functional currency

1. The currency in which funding is generated
2. The currency in which funding is generated
3. The currency in which the proceeds from operating activities are held
4. Currency that affects the entity's costs
5. The most accepted international currency for trading

7. In a joint arrangement, A has 50% of the voting rights, B has 30% and C has 20%. The arrangement provides that at least 75% of the voting rights are paid to make decisions about relevant activities. The following entities have control over the joint arrangement

1. B
2. A
3. C
4. A and B

8. An entity imports 4 million Euros worth of merchandise from a European country. The entity's functional currency is US Dollars. Goods ordered on 31 March 2020, shipped on 7 April 2020, and received on 8 April 2020. Entity receives invoice on 28 May 2020. Terms of sale are FOB destination. The exchange rate used to record the transaction is the rate on the date

1. March 31, 2020
2. 7 April 2020
3. 28 May 2020
4. 8 April 2020

9. Goodwill arising in the acquisition of associates

1. Tested for impairment separately from other assets
2. Charged in profit or loss in each reporting period
3. Not recognized separately from the carrying amount of the investment
4. Amortized in each reporting period including the interim period

10. In separate financial statements, investments in subsidiaries that are not classified as held for sale are recorded in

1. Using the equity method or PSAK 71 / IFRS 9
2. Cost or equity method
3. In accordance with PSAK 71 / IFRS 9 or PSAK 58 / IFRS 5
4. Cost or in accordance with PSAK 71 / IFRS 9

11. An investment entity is an entity that is

1. Aim to develop a product together with the investee
2. Have a plan to invest in unlimited
3. Can have a strategy for investing in more than one investee
4. Transact with investees

12. The following statements are true

1. Separate financial statements are the financial statements of a business group presented as a single economic entity
2. Separate financial statements can only be presented as additional information in the consolidated statements
3. Separate financial statements must be presented to record the investment in the subsidiary at cost
4. Separate financial reports can be presented as general purpose financial reports

13. The building was purchased on December 31, 2017 for MU 20 million. On that date, the consumer price index in the country was 60.1. As of December 31, 2019, the consumer price index ballooned to 240.4. What was the carrying value of the building as of December 31, 2019?

1. MU 4,808 million
2. MU 1,202 million
3. MU 80 million
4. MU 20 million

14. A trading entity in Indonesia. After a while, the entity expanded and exported its products to Singapore. Business is conducted through a subsidiary in Singapore. The subsidiary is an extension of the entity's business and the entity's directors are also directors of the subsidiary. The functional currency of the subsidiary is.

1. Rupiah
2. Rupiah or Singapore Dollar
3. Singapore Dollar
4. Rupiah and Singapore Dollar

15. A structured entity is an entity

1. With broad and well-defined goals
2. Who receive funding from third parties
3. Which has various activities
4. With the determination of controllers not dominated by voting rights

16. PSAK 15 / IAS 28 does not require the application of the equity method if the associate acquired will be held for sale within a specified period of time. This time period is

1. Six months
2. Twelve months
3. In the near future
4. Two years

17. The following assets or liabilities are non-monetary assets or liabilities

1. Accruals and other payables
2. Tax debt
3. Accounts receivable
4. Prepaid expense

18. Joint ventures recognize its interest in joint ventures as

1. Net assets, which include their share of any assets that are jointly owned
2. Net assets that include all assets that are jointly owned
3. Investments are accounted for using the equity method
4. Investments are accounted for using the proportional consolidation method

19. An Indonesian entity generates and receives cash from sales denominated in Singapore Dollars. The main expenses consist of raw materials which are also obtained in Singapore Dollars, however salary expenses are paid in Indonesian Rupiah. Which of the following statements is true?

1. The entity's functional currency is Indonesian Rupiah
2. The entity's functional currency may be selected Singapore Dollar or Rupiah
3. The entity's functional currency is the Singapore dollar
4. The entity's functional currency is US Dollars

20. The difference between the consideration transferred and the carrying amount of the business combination transactions of entities under common control is recognized in

1. Liabilities
2. Asset
3. Profit and loss
4. Equity

Larkspur offers an MP3 download (seven-single medley) as a premium for every 6 candy bar wrappers presented by customers together with $2.65. The candy bars are sold by the company to distributors for 30 cents each. The purchase price of each download code to the company is $2.40. In addition, it costs 50 cents to distribute each code. The results of the premium plan for the years 2020 and 2021 are as follows. (All purchases and sales are for cash.)

Part 1

New attempt is in progress. Some of the new entries may impact the last attempt grading.Your answer is partially correct.

Prepare the journal entries that should be made in 2020 and 2021 to record the transactions related to the premium plan of the Larkspur. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Round answers to 0 decimal places, e.g. 1,525.)

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Part 2

Partially correct answer iconYour answer is partially correct.

Indicate the amounts for each accounts, and classifications of the items related to the premium plan that would appear on the balance sheet and the income statement at the end of 2020 and 2021.

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Suppose a startup is looking to raise capital for a growing tech company. The founders are presented with term sheets from two different venture capital firms. The following highlights contain the main details and terms contained within each potential deal structure.

Investor A
Investment amount: $4,000,000
Investors: Investor A
Type of Security: Non Participating Preferred Equity
Postmoney Valuation: $9,000,000
Option Pool: 25% of post money value
Liquidation Preference: 1X
Anti-dilution: Weighted Average
Board Structure: Board of 3 members; Investor A holds 1 seat
No Shop Clause: 30 days

Investor B
Investment amount: $6,000,000
Investor Split: $3,000,000 by Investor B and $3,000,000 by Investor C
Security Type: Participating Preferred Equity
Premoney Valuation: $6,000,000
Option Pool: 15% of postmoney value
Liquidation Preference: 1X with 2.5X participating cap
Anti-dilution: Full Ratchet
Board Structure: Board of 3 members; each investor holds 1 seat
Pay-to-play: All investors required to purchase shares during any future down round or forfeit board seat
No Shop Clause: 6 weeks

Suppose the company is sold for $6,000,000. How much money would the founder get if they had signed a deal with Investor B?

What is the minimum amount the company would have to be sold for, in order for Investor A to get more than their $4,000,000 investment back?

Suppose the company is sold for $20,000,000. How much money would Investor A and C (combined) get paid?

On 1 July 2019, Vajra Ltd was incorporated and offered 2,500,000 ordinary shares to the public at an issue price of $4.00 per share, with $1.50 payable on application, and $1.50 upon allotment (due within one month of allotment) and $1.00 payable on another call to be made at a later date.

The issue is underwritten at a commission of $42,000.

By 31 July 2019, applications had been received for 2,450,000 shares. On 12 August 2019, shares were allotted, and the underwriter forwarded the application and allotment money due on the 50,000 shares less their commission. All remaining allotment money was received by 12 September 2019. On 30 September 2019, Vajra Ltd paid the legal costs (for company formation) of $6,200 and share issue cost of $4,600.

On 20 January 2020, the call was made, with money due by 29 February 2020. By 29 February 2020, all call money was received except for holders of 35,000 shares who failed to meet the call. On 31 March 2020, the shares on which call money was not received were forfeited.

On 9 April 2020, the forfeited shares were auctioned for $3.70 as fully paid. Share re-issue costs amounting to $8,500 were paid. The constitution provides for any surplus on resale, after satisfaction of unpaid instalments and any costs, to be returned to shareholders whose shares were forfeited. The refunds were made on 5 May 2020.

Required: Prepare the journal entries to record the transactions of Vajra Ltd up to and including that which took place on 30 June 2020. Show all relevant dates, narrations and workings.

5–5A Buono Adventures, which uses the perpetual inventory system, has the following account balances (in alphabetical order) on July 31, 2020:

Note: For simplicity, all operating expenses have been summarized in the account Operating Expenses.

Additional data at July 31, 2020:

1. A physical count of items showed $3,000 of supplies on hand. (Hint: Use the account Operating Expenses in the adjusting journal entry.)

2. An inventory count showed inventory on hand at July 31, 2020, of $140,000.

3. The equipment has an estimated useful life of eight years and is expected to have no scrap or residual value at the end of its life. (Hint: Use the account Operating Expenses in the adjusting journal entry.)

4. Unearned sales revenue of $5,600 was earned by July 31, 2020.

Required

1. Record all adjustments and closing entries that would be required on July 31, 2020.

2. Prepare the multi-step income statement and statement of owner’s equity for the year ended July 31, 2020, and the classified balance sheet in report format as at July 31, 2020.

3 4

Adjusting and closing the accounts of a merchandising company, and preparing a merchandiser’s financial statements under the perpetual inventory system

2. Net loss, $67,500

10 points   

QUESTION 9

1. True or false: The top position on a search engine results website that attracts the most attention is also the most profitable position for a search advertisement.

True

False

10 points   

QUESTION 10

1. Which of the following choices is a way that big data and data science can help today’s marketer?

10 points   

QUESTION 11

1. After a few years of work in the marketing department of a small firm, you are placed in charge of the firm’s inbound marketing. What are you most likely to be in charge of?

10 points   

QUESTION 12

1. Which of the following factors correctly explain(s) the importance of social media for marketers?