Question 5

Alto Imports ending inventory was assigned a cost of $14,600 as a result of a physical stock-take on 30 June 2020.

A review of the company’s records revealed the following information:

• Alto Imports had recorded a $2,900 invoice (excluding GST) from a supplier for goods shipped ExW on 26 June 2020. The goods were not included in the physical inventory count because they had not yet arrived at the warehouse of Alto Imports by 30 June.
• Alto Imports had recorded a $1,900 invoice (excluding GST) from a supplier for goods shipped DPP on 28 June 2020. The goods were not included in the physical inventory count because they had not yet arrived at the warehouse of Alto Imports by 30 June.
• Alto Imports had goods valued at $3,600 (excluding GST) out on consignment on 30 June 2020 that were included in the physical inventory count.

Required:

1. For each of the above, determine the effects on Alto Imports 30 June inventory account balances.

2. What is correct value of inventory on hand at 30 June 2020?

Pearl Corporation is a publicly traded company that follows IFRS. On December 31, 2019, Pearl’ financial records indicated the following information related to the company’s defined benefit pension plan:

On July 1, 2020, Pearl acquired the operations of Trap Ltd. As one of the conditions of the purchase, Pearl agreed that Trap’s employees would be included in Pearl’s defined benefit pension plan, and would be granted credit for the past service of Trap’s employees. The actuary estimated the value of the prior service amount granted on July 1, 2020 to be $193,000.

Pearl’ actuary provided the following information on December 31, 2020:

Prepare a pension worksheet for Pearl Corporation for the year ending December 31, 2020.
Prepare the journal entry to record the pension expense for 2020.

The following account balances were taken from ABC Company’s unadjusted trial
balance at December 31, 2020:

Accounts Payable ............  $56,000
Accounts Receivable .........  $42,000
Cash ........................  $11,000
Common Stock ................  $63,000
Cost of Goods Sold ..........  $52,000
Income Tax Expense ..........  $12,000
Insurance Expense ...........  $21,000
Inventory ...................  $70,000
Land ........................  $68,000
Mortgage Payable ............  $49,000
Patent ......................  $31,000
Prepaid Insurance ...........  $17,000
Rental Revenue ..............  $46,000
Retained Earnings ...........  $72,000 (at January 1, 2020)
Sales Revenue ...............  $95,000
Supplies ....................  $19,000
Wage Expense ................  $38,000

ABC Company has not yet recorded adjusting entries related to the following
two items:

(1)  $11,000 of supplies were used up during 2020.

(2)  ABC Company has provided services to a customer totaling $14,000 as of
     December 31, 2020. However, the customer has not yet paid ABC Company.

Calculate the total assets reported in ABC Company's December 31, 2020 balance
sheet after the appropriate adjusting entries have been recorded and posted.

You are asked to carry out the accounting of the company

1. Prepare with the information the opening entry in the General Journal,

2. Analyze the transactions recorded in the general journal

3. Transfer all information to Major General

4. Prepare the trial balance

The company reports the following assets and obligations:

 Accounts Payable amount to B / .16,600.00

 Has documents to pay for B / .7,000.00

 The inventory of merchandise is B / .125,500.00

 In the box they have B / 88,800.00

 Also a bank loan payable B / .29,000.00

 They have office furniture for 15,000.00

 The bank account sum is B / .65,000.00

 27,000.00 is the amount of the office equipment

 And accounts receivable total B / .68,000.00

THE FOLLOWING TRANSACTIONS WERE DONE:

 On 6/24/2020 We bought a car for B / .12,500.00 on credit

 On 6/24/2020 A payment was made to accounts payable for B / .1,000.00

 On 06/22/2020 the sum of B / 500.00 was paid to a bank loan

 On 06/22/2020 Bank B / 88,000.00 was deposited

 On 6/23/2020 We received credit to accounts receivable for B / 23,000.00

On January 1, 2020, Carp Corp. purchased a printer designed to print documents for a cost of $2,800. In addition to this purchase price, Carp had to pay $300 cash for installation of the system

The system is expected to last for 10 years, or print 12,000 documents, after which time it will have a residual value of $100.

1. Give Carp’s journal entry to purchase the printer.

2. Calculate Carp’s depreciation expense for 2020, 2021, and 2022, under the straight-line, unit, and double-declining balance methods. Assume that the printer printed 800 documents in 2020, 1,600 documents in 2021, and 1,200 documents in 2022.

3. Using straight-line depreciation, what is Carp’s accumulated depreciation at December 31, 2022? What is the net value of the asset at December 31, 2022?

4. Using unit depreciation, what is Carp’s accumulated depreciation at December 31, 2021? What is the net value of the asset at December 31, 2021?

5. Using double declining balance depreciation, what is Carp’s accumulated depreciation at December 31, 2020? What is the net value of the asset at December 31, 2020?

QUESTION 2 - Taryn would like to open a new business as an interior designer, to funds her ambition she sold some of the following assets:

1. Antique Painting that was given to Taryn by her father 5 years ago. Taryn’s father bought it on 20 August 1984 for $2,500. Taryn sold it on 1’st June 2020 for $25,000

2. Taryn sold her car (Toyota Corolla) for the amount of $12,000 on 20’th May 2020, she bought on 1’st January 2015 for the amount of $20,000

3. Taryn sold her Harry Potter’s collection for the amount of $1,500 on 4’th January 2020, she bought it second hand on 10’th October 2018 for $350.

4. Taryn sold her gold necklace for $2,000 on 20’th March 2020, she bought it for $1,200 on 8’th August 2018 5. Taryn sold a sculpture for $6,000 on 1 January 2020, she bought it on December 1994 for $1,500

Advise the Capital Gain Tax Consequences for the above transactions

Select information from Patel Sales and Services financial statements are listed below:

Part A                                                                                                                                     

Calculate the following ratios in the table below for 2020.  Show your calculations to receive full marks).  Results should be rounded to 2 decimal places.

The 2019 results for those ratios are shown in the table below.  In the Conclusion column, indicate whether Patel has improved or deteriorated in 2020 as compared to 2019.

Part B                                                                                                                                      Marks

Discuss Patel’s overall financial position in 2020 compared to 2019 using your results from above.

1. Soundbird Ltd has 600,000 ordinary shares on issue at 1 July 2019, which is the beginning of its reporting period. On 1 January 2020, it issued a further 600,000 ordinary shares for cash. On 1 March 2020, Soundbird Ltd repurchased 10,000 shares at fair value in a market transaction.
Required: What is the correct weighted average number of shares to use in the earnings per share calculation for the year ended 30 June 2020?
Show all your workings.

2.Rosy Ltd determined its profit attributable to ordinary shareholders for the reporting period ended 30 June 2020 as $1,250,000. The number of ordinary shares on issue up to 1 October 2019 was 1,000,000. Rosy Ltd announced a one-for-two bonus issue (one bonus share for every two shares held) of shares effective for each ordinary share outstanding at this date.
Required: What is the basic earnings per share for the year ended 30 June 2020 (keep two decimal places)?
Show all your workings.

Recording Entries under the Fair Value Option—Equity Method

Assume that Fireside Inc. purchased 30% of the common stock of Theater Supplies Corporation on January 1, 2020, for $270,000. Fireside Inc. elected to account for its investment using the fair value option. During the year, Fireside Inc. reported net income of $216,000 and declared and paid dividends of $40,500. The fair value of Fireside’s investment in Theater Supplies common stock is $283,500. Assume that Fireside Inc. has significant influence over Theater Supplies Corporation.

a. What amount would Fireside Inc. report on its balance sheet on December 31, 2020, for its investment in Theater Supplies Corporation?

b. What amount would Fireside Inc. report in its income statement for the year ended December 31, 2020, for its investment in Theater Supplies Corporation?

Note: Use a negative sign to indicate a loss.