ZigZag provided an extract of the asset register as at the end of the current and prior financial year:
ASSETS CARRYING AMOUNTS
31 December 2020
R
31 December 2019
R
Land (1) 3 800 000 3 000 000
Office buildings (2) 1 900 000 1 370 000
Industrial buildings (3) 3 333 333 3 666 667
Machinery (4) 1 800 000 2 700 000
Additional information:
1. Land is vacant land and it is classified as investment property. The land was acquired on
1 April 2019 at R2 800 000. The fair value adjustments have been accounted for at the end of
the respective financial years.
2. The office building was acquired on 1 July 2019 for R1 400 000 and was revalued for the first
time on 31 December 2020 to its fair value of R1 900 000. The office buildings are depreciated
on the straight line basis over 20 years to its residual value of R200 000. During 2019,
management expected to use the asset up to the end of its economic life.
On 1 January 2020, management estimated the remaining useful life of the building to have
changed to 10 years and the residual value to be R500 000.
In December 2020 the management changed the intention and decided they were going to sell
the office building.
Office buildings have no capital allowances available.
3. Industrial buildings are depreciated over 12 years on the straight line basis. In terms of the
Income tax act, a section 13 allowance of 5% applies to the industrial buildings. The buildings
were bought on 1 January 2019, with the intention to keep the building, for an amount of
R4 000 000 paid in cash immediately with its residual value regarded as being insignificant.
4. Machinery is depreciated on a straight line basis at 20% per year to Rnil residual value. The
SARS allows a section 12C allowance of 40%/20%/20%/20% on machinery. The machinery had
a tax base of R1 800 000 on 31 December 2019 and R900 000 on 31 December 2020. No
additional machinery was acquired during FY2020.
5. ZigZag always pays their insurance in advance. At the end of FY2020 the balance for insurance
paid in advance amounted to R35 000 (2019: R25 000).
6. On 1 December 2020, Zamdela, a loyal customer, ordered transportation equipment from
ZigZag which will be delivered to him during December 2021. ZigZag received R500 000 from
Zamdela in cash when the order was placed.
7. The accounting profit before tax, which included dividends received of R40 000, amounted to
R3 200 000 for the year ended 31 December 2020. All above mentioned movements were taken
into account in arriving at this accounting profit.
8. The deferred tax asset balance as at 31 December 2019 was R390 150 due to an assessed
loss of R2 200 000 that existed at that time. ZigZag expected to make sufficient taxable profits
during 2020 and onwards to fully utilize assessed losses and other deductible temporary
differences.
 Office buildings are carried on the revaluation model using the net replacement method in
terms of IAS 16.
 Machinery is measured on the cost model in terms of IAS 16.
 Industrial buildings are measured on the cost model in terms of IAS 16
 All other items of property, plant and equipment are accounted for on the cost model in terms
of IAS 16.

 Depreciation and amortisation are accounted for on the straight-line method.
 Assume a normal tax rate of 28% for FY2020 (2019: 27%) and that 80% of capital gains are
taxable.
 There are no temporary differences other than those that are apparent from the given
information.

Required:
Calculate deferred tax balances for the year ended 31 December 2020

Here are the financial results for Springer’s corporation in 2020: Sales were $45,000, cost of goods sold was $36,000, the company’s assets depreciated by $5,000 and the company paid $500 in interest.

Also, for 2020 net fixed assets were $29,000 while current assets were $10,000 and current liabilities were $5,500.

These are the values for 2019: net fixed assets = $25,500, current assets = $8,800 and current liabilities = $5,000. The tax rate is 35%.

1. What is net income for 2020?
2. What is the operating cash flow for 2020?
3. What is the cash flow from assets for 2020? How do you interpret this result?
4. What is the cash flow to shareholders?

Here are the financial results for Jerry’s corporation in 2020: Sales were $45,000, cost of goods sold was $36,000, the company’s assets depreciated by $5,000 and the company paid $500 in interest.

Also, for 2020 net fixed assets were $29,000 while current assets were $10,000 and current liabilities were $5,500.

These are the values for 2019: net fixed assets = $25,500, current assets = $8,800 and current liabilities = $5,000. The tax rate is 35%.

Required:

1. What is net income for 2020?
2. What is the operating cash flow for 2020?
3. What is the cash flow from assets for 2020? How do you interpret this result?
4. What is the cash flow to shareholders?

It is September 2020 and you are considering a significant event that affects one of your audit clients, Falafel-tech Enterprises. The auditor’s report for Falafel-tech Enterprises for the year ended 30 June 2020 was signed on 30 August 2020. The financial report has not yet been issued to shareholders.

You have just discovered that one of Falafel-tech Enterprises’ major debtors at 30 June 2020 went into liquidation on 15 August 2020. The bankruptcy was the result of ongoing financial difficulties.

Required:

Explain what you should do in this situation. In your answer, identify how this should be treated in the financial report, and who this situation should be discussed with.

X Enterprises owns a professional ice hockey team, the Rockford Penguins. The company sells season tickets for its upcoming 2020-2021 season and receives $816,000 cash. The season starts November 1 and ends on April 30, with five home games occurring monthly over the six-month hockey season. Assume that McKinnon Enterprises' fiscal year ends on December 31.

Required: 1) Prepare journal entries to record all transactions and adjustments necessary through 2020-2021 hockey season.

2)Indicate how the season tickets will be reported on the income statement of 2020, the balance sheet at the end of 2020 and the statement of cash flows of 2020.

Jack's Electric sold $4,495,000, 13%, 10-year bonds on January 1, 2020. The bonds were dated January 1, 2020, and paid interest on January 1. The bonds were sold at 98.

Prepare the journal entry to record the issuance of the bonds on January 1, 2020.

At December 31, 2020, $7,500 of the Discount on Bonds Payable account has been amortized. Show the balance sheet presentation of the long-term liability at December 31, 2020.

On January 1, 2022, when the carrying value of the bonds was $4,420,100, the company redeemed the bonds at 102. Record the redemption of the bonds assuming that interest for the period has already been paid.

As at December 31, 2020, Riverbed Inc. has the following balances: Cash in bank, $102,000; Investment in preferred shares (retractable, purchased by Riverbed within 90 days of maturity date), $114,000; Investment in common shares (to be sold within 30 days), $90,000; and Cash (legally restricted for an upcoming long-term debt retirement), $233,000.

1.Determine the December 31, 2020 cash and cash equivalents amount for the 2020 statement of cash flows under IFRS.

Cash and Cash Equivalents $_______

2.Determine the December 31, 2020 cash and cash equivalents amount for the 2020 statement of cash flows under ASPE.

Cash and Cash Equivalents $_______

On January 1, 2020, Sharp Company purchased $50,000 of Sox Company 6% bonds, at a time when the market rate was 5%. The bonds mature on December 31, 2024, and pay interest annually on December 31. Sharp plans to and has the ability to hold the bonds until maturity. Assume that Sharp uses the effective interest method to amortize any premium or discount on investments in bonds. At December 31, 2020, the bonds are quoted at 98. a. Prepare the entry for the purchase of the debt investment on January 1, 2020. b. Prepare the entry for the receipt of interest on December 31, 2020. c. Record the entry to adjust the investment to fair value on December 31, 2020, if applicable

Barcelona Machine Tools. Oriol​ D'ez Miguel​ S.R.L., a manufacturer of heavy duty machine tools near​ Barcelona, ships an order to a buyer in Jordan. The purchase price is

€426,000.

Jordan imposes a

12%

import duty on all products purchased from the European Union. The Jordanian importer then​ re-exports the product to a Saudi Arabian​ importer, but only after imposing its own resale fee of

29%.

Given the following spot exchange rates on April​ 11, 2010, what is the total cost to the Saudi Arabian importer in Saudi Arabian​ riyal, and what is the U.S. dollar equivalent of that​ price?  ​(Click on the

icon to import the table into a​ spreadsheet.)

The spot​ rate, Saudi Arabian riyal per Jordanian dinar is SRI

nothing​/JD.

​(Round to five decimal​ places.)

Below is the 2009 contribution income statement of a company.

During the coming year, the company expects an increase in variable manufacturing costs of $8 per unit and in fixed manufacturing costs of $72,000.

(a) If sales for 2010 remain at 12,000 units, what price should Colgate charge to obtain the same profit as last year?
$______

(b) Management believes that sales can be increased to 16,000 units if the selling price is lowered to $109. What would be the excepted profit (or loss) as a result of this action? Use a negative sign with your answer, if appropriate.
______

(c) After considering the expected increases in costs, what sales volume is needed to earn a profit of $98,000 with a unit selling price of $109?
_____