Chamberlain Enterprises Inc. reported the following receivables in its December 31, 2021, year-end balance sheet:

Additional Information:

1. The notes receivable account consists of two notes, a $55,000 note and a $225,000 note. The $55,000 note is dated October 31, 2021, with principal and interest payable on October 31, 2022. The $225,000 note is dated June 30, 2021, with principal and 6% interest payable on June 30, 2022.
2. During 2022, sales revenue totaled $1,360,000, $1,290,000 cash was collected from customers, and $24,000 in accounts receivable were written off. All sales are made on a credit basis. Bad debt expense is recorded at year-end by adjusting the allowance account to an amount equal to 10% of year-end accounts receivable.
3. On March 31, 2022, the $225,000 note receivable was discounted at the Bank of Commerce. The bank's discount rate is 8%. Chamberlain accounts for the discounting as a sale.

Required:
1. In addition to sales revenue, what revenue and expense amounts related to receivables will appear in Chamberlain’s 2022 income statement?
2. & 3. What amounts will appear in the 2022 year-end balance sheet for accounts receivable and Calculate the receivables turnover ratio for 2022.

Arnold Vimka is a venture capitalist facing two alternative investment opportunities. He intends to invest $1 million in a start-up firm. He is nervous, however, about future economic volatility. He asks you to analyze the following financial data for the past year’s operations of the two firms he is considering and give him some business advice.

Required

1. Use the contribution margin approach to compute the operating leverage for each firm.

2. If the economy expands in coming years, Larson and Benson will both enjoy a 12 percent per year increase in sales, assuming that the selling price remains unchanged. Compute the change in net income for each firm in dollar amount and in percentage. (Note: Since the number of units increases, both revenue and variable cost will increase.)

3. If the economy contracts in coming years, Larson and Benson will both suffer a 12 percent decrease in sales volume, assuming that the selling price remains unchanged. Compute the change in net income for each firm in dollar amount and in percentage. (Note: Since the ­number of units decreases, both total revenue and total variable cost will decrease.)

The unadjusted trial balance for Riverbed Corp. is shown below.

Assume the following adjustment data.

Prepare the adjusting entries for the items above. (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 the amount is entered. Do not indent manually.)

Curtiss Construction Company, Inc., entered into a fixed-price contract with Axelrod Associates on July 1, 2018, to construct a four-story office building. At that time, Curtiss estimated that it would take between two and three years to complete the project. The total contract price for construction of the building is $4,240,000. Curtiss concludes that the contract does not qualify for revenue recognition over time. The building was completed on December 31, 2020. Estimated percentage of completion, accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings to Axelrod under the contract were as follows:

Required:
1. Compute gross profit or loss to be recognized as a result of this contract for each of the three years.
2. Assuming Curtiss recognizes revenue over time according to percentage of completion, compute gross profit or loss to be recognized in each of the three years.
3. Assuming Curtiss recognizes revenue over time according to percentage of completion, compute the amount to be shown in the balance sheet at the end of 2018 and 2019 as either cost in excess of billings or billings in excess of costs.

Revision Qs

Question 1

The following shows the unadjusted Trial Balance of Shahanom Logistics Sdn Bhd during May 2018:

Additional information:

1. Depreciation was recorded on the motor van using the straight-line method. Assume a useful life of five years and a salvage value of RM100,000.
2. Prepaid Electricity for the month has expired. Electricity was prepaid at RM20,000 cash for a four months period starting April 1.
3. Accrued Salaries Expenses, RM20,000.
4. Accrued Service Revenue, RM24,000.
5. Office Supplies on hand, RM2,400.

Required:

1. Prepare an Adjusted Trial Balance as of May 31, 2018         

2. Prepare Shahanom Logistics Sdn Bhd’s Statement of Comprehensive Income (Income Statement) and Statement of Owner’s Equity for the month ended May 31, 2018

3. Prepare Shahanom Logistics Sdn Bhd’s Statement of Financial Position (Balance Sheet) on May 31, 2018.

Alliance, Inc is a manufacturer & marketer of gas lamps for utilization in mining & natural resources operations. Total industry sales in this relevant market were $100 million, with Alliance,s market share representing 5%. Alliances's contribution margin is 25%. Alliance's sales force calls on the widespread distributor network to generate their revenue. These distributors in turn sell the products to the industrial customers. Distributors generate on average revenue of $10,000 per outlet for Alliance. Each sales rep earns $50,000 per annum. Alliance has a corporate advertising & promotions campaign worth $640,000 which has managed to effectively maintain their brand awareness & image in the resources industry.

(a.) Alliance wants to raise their advertising budget by $200,000 to highlight their green initiatives and bolster brand presence further among expanding players in the industry.

- What increase in dollar sales revenue would be needed to recoup this incremental advertising expenditure?

- What increase in Alliance's overall market share does this call for?

(b.) Alliance is seeking to hire 2 more sales reps to expand further territories in their network by gaining access to additional distributors.

- How many new distributors would be required to cover the cost of hiring these 2 new sales reps?

(c.) Alliance is considering a 10% reduction in the price of its offerings.

- What absolute increase in its topline would be justifiable to maintain the present level of total contribution in dollars?

Curtiss Construction Company, Inc., entered into a fixed-price contract with Axelrod Associates on July 1, 2021, to construct a four-story office building. At that time, Curtiss estimated that it would take between two and three years to complete the project. The total contract price for construction of the building is $5,020,000. The building was completed on December 31, 2023. Estimated percentage of completion, accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings to Axelrod under the contract were as follows: At 12-31-2021 At 12-31-2022 At 12-31-2023 Percentage of completion 10 % 60 % 100 % Costs incurred to date $ 376,000 $ 3,234,000 $ 5,457,000 Estimated costs to complete 3,384,000 2,156,000 0 Billings to Axelrod, to date 737,000 2,510,000 5,020,000 Required: 1. Compute gross profit or loss to be recognized as a result of this contract for each of the three years. Curtiss concludes that the contract does not qualify for revenue recognition over time. 2. Assuming Curtiss recognizes revenue over time according to percentage of completion, compute gross profit or loss to be recognized in each of the three years. 3. Assuming Curtiss recognizes revenue over time according to percentage of completion, compute the amount to be shown in the balance sheet at the end of 2021 and 2022 as either cost in excess of billings or billings in excess of costs. Please help me solve this problem!

The following are account balances of GadgetsCom Pty, Ltd., a company selling gadgets, at the end of financial year 20X1

Required: for GadgetsCom Pty, Ltd.:

a.       Prepare a classified Income Statement

b.      Incorporating the additional information below, calculate the Gross Profit Margin (GPM) and the Profit Margin (PM) ratios and provide your comment on the company’s profitability and efficiency.    

c.       Prepare the Non-current Assets section of the Balance Sheet.                         

Additional Information

The manager was pleased with the increased sales revenue in the current year. Last year’s ratios are GPM 55% and PM 23%. The following are ratio formula used by the company:

Eva’s Environmental Company is starting a new environmental analysis company on July 1, 2018. a. Eva invests $150,000 cash in her business from her personal savings account. b. Eva purchases Office Supplies for $7,500 on account payable c. Eva borrows $350,000 cash to start her new business from the bank for 10 years on a Note Payable. d. Eva prepays her Rent for office space for one year in advance for $3,600. e. Eva purchases an environmental assessment machine for $115,000 paying 30% in cash and the balance on a long-term note payable. f. Eva collects $21,500 in advance from a customer for a project she will work on in the future. g. Eva earns service revenue on account from her customers, $15,000 h. Eva pays for 40% of the Office Supplies she purchased. i. j. Eva withdraws $850 from the company for her personal use. k. Customers pay Eva $8,500 on account receivable for sales that were previously recorded Accounts: Cash, Accounts Receivable, Prepaid Insurance, Supplies, Equipment, Accounts Payable, Notes Payable, Bank Loan Payable, Unearned Revenue, Eva’s Capital, Eva’s Drawing, Service Revenue, Salary Expense, REQUIRED: a. Analyze the Business Transactions b. Record them in the Journal c. Post to the Ledgers d. Prepare a Trial Balance for July 31, 2018

Chamberlain Enterprises Inc. reported the following receivables in its December 31, 2018, year-end balance sheet: Current assets: Accounts receivable, net of $26,000 in allowance for uncollectible accounts $ 228,000 Interest receivable 7,850 Notes receivable 280,000 Additional Information: The notes receivable account consists of two notes, a $55,000 note and a $225,000 note. The $55,000 note is dated October 31, 2018, with principal and interest payable on October 31, 2019. The $225,000 note is dated June 30, 2018, with principal and 6% interest payable on June 30, 2019. During 2019, sales revenue totaled $1,360,000, $1,290,000 cash was collected from customers, and $24,000 in accounts receivable were written off. All sales are made on a credit basis. Bad debt expense is recorded at year-end by adjusting the allowance account to an amount equal to 10% of year-end accounts receivable. On March 31, 2019, the $225,000 note receivable was discounted at the Bank of Commerce. The bank's discount rate is 8%. Chamberlain accounts for the discounting as a sale.

Required: 1. Not including sales revenue, what revenue and expense amounts related to receivables will appear in Chamberlain’s 2019 income statement? 2. & 3. What amounts will appear in the 2019 year-end balance sheet for accounts receivable and Calculate the receivables turnover ratio for 2019.