Question 1

On December 15, 2015, a public company receives an order from a customer for services to be performed on December 28, 2015. Due to a backlog of orders, the company does not perform the services until January 3, 2016. The customer pays for the services on January 6, 2016. When should revenue be recorded for the company? Why (support your argument with a principle from the textbook)?

On July 1, 2016, Crane Company sells machinery for $210500. The machinery originally cost $585000, had an estimated 5-year life and an expected salvage value of $60000. The Accumulated Depreciation account had a balance of $367500 on January 1, 2016, using the straight-line method. The gain or loss on disposal is

$45500 gain.

$97000 gain.

$22750 loss.

$97000 loss.

On January 1, 2016, Verlin Co. purchased new machinery for $300,000. The machinery has an estimated useful life of ten years, and depreciation is computed by the sum-of-the-years'-digits method. 20,000 Salvage. A) The accumulated depreciation on this machinery at December 31, 2017 is __________. Please prepare/show the journal entries for 12/31/2016; 12/31/2017; and 12/31/2018.

Emmar Co. purchased a machine on January 1, 2013 at a cost of 240000. The machine had been estimated eight year life with no residual value. Emmar uses straight line depreciation. At december 31, 2016. Emmar estimated that the machine would have only two more years of remaining life with no residual value. For 2016, Emmar would report delectation expense of

XYZ Sdn Bhd is preparing budget for the year ended 31st December 2016. The company manufactures and sellls one product at RM5 each but this will increase to RM6 from 1st July 2016. The budget sales volume are:

Sales for January to June 2017 is expected to be 12,000 units. Closing stocks is budgeted at 10% of the next six month period’s sales. No stocks of components are held.

Each unit of product uses two components with the usage current unit price as follows:

Component A is expected to increase in price by 10% from July 2016. Labor cost for the product is RM30 per unit. Variable production overhead will be at RM10 per unit and fixed production overhead is budgeted at RM250,000 for the year.

Required:

Prepare the following budgets for XYZ Sdn Bhd for each of the two six-month periods of 2016.

(a) Sales budget. (1 mark)

(b) Production volume budget.

(c) Production cost budget.

Blairsville Corp. prepares monthly bank reconciliations of its checking account balance. The bank statement for July 2016 indicated the following:

An analysis of canceled checks and deposits and the records of Blairsville revealed the following items:

The correct amount of check #205 is $540, but it was recorded as a cash disbursement of $450. The check was issued to pay for merchandise purchases. The check appeared on the bank statement correctly.

a. Prepare a bank reconciliation at July 31, 2016, in proper form.

b. What amount would Blairsville report on its balance sheet at July 31, 2016, for cash?$

Subscribing to the theory that life is indeed a beach, the residents of La Playa spend all of their money on three things: Every year, they collectively buy 250 bathing suits, 600 tubes of sunscreen, and 400 beach towels. Item (Amount purchased) Price 2013 ($) Price 2014 ($) Price 2015 ($) Price 2016 ($) Bathing suits (250) $10.00 $12.00 $15.00 $18.00 Sunscreen (600) 4.00 5.00 5.00 6.00 Beach towels (400) 5.00 5.50 7.00 9.00 Use the data in the table above to calculate the following. a. The total cost of this basket each year from 2013 through 2016. Instructions: Round your answers to the nearest whole number. Price 2013 ($) Price 2014 ($) Price 2015 ($) Price 2016 ($) Total cost of basket $ $ $ $ b. How much the cost of this basket has changed from year to year in percentage terms. Instructions: Round your answers to one decimal place. 2013−2014 2014−2015 2015−2016 Percentage change in total cost of basket % % %

XYZ Sdn Bhd is preparing budget for the year ended 31st December 2016. The company manufactures and sellls one product at RM5 each but this will increase to RM6 from 1st July 2016. The budget sales volume are:

Units
January to June 9,000
July to December 6,000

Sales for January to June 2017 is expected to be 12,000 units. Closing stocks is budgeted at 10% of the next six month period’s sales. No stocks of components are held.

Each unit of product uses two components with the usage current unit price as follows:

Usage Unit price
Component A 3 units RM10
Component B 2 units RM6


Component A is expected to increase in price by 10% from July 2016. Labor cost for the product is RM30 per unit. Variable production overhead will be at RM10 per unit and fixed production overhead is budgeted at RM250,000 for the year.

Required:

Prepare the following budgets for XYZ Sdn Bhd for each of the two six-month periods of 2016.

a) Sales budget.                                                                                                       (1 mark)
b) Production volume budget.                                                                               
c) Production cost budget.