Mr Ahmed Kumar runs a snack distribution business located in the Light Industrial area in Lusaka. The following list of balances was extracted from his ledger as at 31 March, 2020; the end of his most recent financial year.
K
Capital 83,887
Sales 259,870
Trade accounts payable 19,840
Returns outwards 13,407
Allowance for doubtful debts 512
Discounts allowed 2,306
Discounts received 1,750
Purchases 135,680
Returns inwards 5,624
Carriage outwards 4,562
Drawings 18,440
Carriage inwards 11,830
Rent, rates and insurance 25,973
Heating and lighting 11,010
Postage, stationery and telephone 2,410
Advertising 5,980
Salaries and wages 38,521
Bad debts 2,008
Cash in hand 534
Cash at bank 4,440
Inventory as at 1st April 2019 15,654
Trade accounts receivable 24,500
Fixtures and fittings - at cost 120,740
Prov. for depreciation on fixtures and fittings – 31/03/2020 63,020
Depreciation 12,074
The following additional information as at 31st March, 2020 is available:
(a) Inventory at the close of business was valued at K17,750
(b) Insurances have been prepaid by K1,120
(c) Heating and lighting is accrued by K1,360
(d) Rates have been prepaid by K5,435
(e) The allowance for doubtful debts is to be adjusted so that it is 3% of trade accounts receivable.
Required:
For the year 2020, prepare Mr Kumar’s:
[10 Marks]
[10 Marks]
[10 Marks]
[10 Marks]
[Total: 40 Marks]
In: Accounting
Question 4 [27]
The following bank reconciliation statement was prepared by the bookkeeper of Veggie Stores for January 2020. The financial year of the business ends in January each year.
|
Bank overdraft as per bank statement |
R35 000 |
|
Outstanding deposit on 10 January 2020 |
R12 900 |
|
28 January 2020 |
R10 000 |
|
Outstanding deposit: Cheque received from B Brother dated 24 February 2020 |
R1 800 |
|
Outstanding cheques: |
|
|
R7 000 |
|
R9 800 |
|
R4 800 |
|
Bank charges |
R570 |
|
Balance as per bank account in the General Ledger |
? |
Required:
Complete question 4.3 and 4.4 specifically in format below
4.3
|
Amount |
Error |
Corrective action |
(9)
4.4
|
Debit |
Credit |
|
(7)
In: Accounting
Question 4 [27]
The following bank reconciliation statement was prepared by the bookkeeper of Veggie Stores for January 2020. The financial year of the business ends in January each year.
|
Bank overdraft as per bank statement |
R35 000 |
|
Outstanding deposit on 10 January 2020 |
R12 900 |
|
28 January 2020 |
R10 000 |
|
Outstanding deposit: Cheque received from B Brother dated 24 February 2020 |
R1 800 |
|
Outstanding cheques: |
|
|
R7 000 |
|
R9 800 |
|
R4 800 |
|
Bank charges |
R570 |
|
Balance as per bank account in the General Ledger |
? |
Required:
Complete question 4.3 and 4.4 specifically in format below
4.3
|
Amount |
Error |
Corrective action |
(9)
4.4
|
Debit |
Credit |
|
(7)
In: Accounting
Question 3
A. J & B Company uses the percentage of sales approach to estimate its uncollectible accounts. The company’s annual sales for its first financial year of operations ending July 31, 2020 was $500,000, cash sales contributed to 2% of the overall sales and the accounts receivable balance at year end was $75,000. Based on industry expectations, it estimated that 3% of its credit sales would be uncollectible.
Required:
a. Calculate the bad debt expense at July 31, 2020.
b. Calculate the net receivable balance that would be reported in the Statement of Financial Position as at July 31, 2020.
B. Tosh and Sons Inc. uses the percentage of receivables approach to estimate its uncollectible accounts. The company had sales of $100,000 at the end of its financial year on June 30, 2020. The allowance for doubtful debts account had a debit balance of $400, the accounts receivable balance was $30,000 at year end and the company estimates the uncollectible percentages as follows:
Current (1 - 30 days) $15,000 0.5%
31 - 60 days $10,000 2.0%
61 - 90 days $3,000 10.0%
Over 90 days $2000 60.0%
Required:
a. Calculate the bad debt expense at June 30, 2020.
b. Prepare the necessary journal entry to record the bad debt expense for the year.
C. During the financial year ending May 31, 2020 the Board of Directors of Chung Sa Corporation authorised the write off of a $3,000 two-year debt belonging to a previous customer Jap Inc. On July 2, 2020 Chung Sa Corporation received an electronic funds transfer from Jap Inc. in the amount of $3,000.
Required:
Prepare all necessary journal entries to record this transaction.
In: Accounting
5–5A Buono Adventures, which uses the perpetual inventory system, has the following account balances (in alphabetical order) on July 31, 2020:
| Accounts Payable....................................................................... | $ 21,600 |
| Accounts Receivable.................................................................. | 23,200 |
| Accumulated Amortization—Equipment.............................. | 64,600 |
| Cash.............................................................................................. | 8,400 |
| Cost of Goods Sold..................................................................... | 687,000 |
| E. Buono, Capital........................................................................ | 402,000 |
| E. Buono, Withdrawals.............................................................. | 92,000 |
| Equipment.............................. | 180,000 |
| Interest Earned.......................................................................... | 4,000 |
| Inventory.................................................................................... | 143,000 |
| Operating Expenses.................................................................. | 355,000 |
| Sales Discounts.......................................................................... | 10,300 |
| Sales Returns and Allowances................................................ | 32,900 |
| Sales Revenue............................................................................ | 1,045,200 |
| Supplies...................................................................................... | 14,600 |
| Unearned Sales Revenue.......................................................... | 9,000 |
Note: For simplicity, all operating expenses have been summarized in the account Operating Expenses.
Additional data at July 31, 2020:
A physical count of items showed $3,000 of supplies on hand. (Hint: Use the account Operating Expenses in the adjusting journal entry.)
An inventory count showed inventory on hand at July 31, 2020, of $140,000.
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.)
Unearned sales revenue of $5,600 was earned by July 31, 2020.
Required
Record all adjustments and closing entries that would be required on July 31, 2020.
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
In: Accounting
The following information is available about Ancora Co. (Ancora): 1. Ancora's cash balance on December 31, 2019, was $70,000. 2. Actual sales for November and December 2019, and expected sales for January and February 2020, are as follows: November 2019 December 2019 January 2020 February 2020 (actual) (actual) (estimate) (estimate) Cash sales $ 75,000 $ 90,000 $ 60,000 $ 50,000 Credit sales 560.000 650,000 480,000 430,000 Sales on account are collected over a three-month period at the following rate: 30% collected in the month of sale, 50% collected in the month following sale and 17% collected in the second month following sale. The remaining 3% is uncollectable and is written off 3. Ancora's gross profit on sales is 35%. 4. Ancora's policy is to hold inventory at the end of the month equal to 40% of next month's budgeted sales. Inventory purchases in a given month are paid for as follows: 30% are paid in the month of purchase and 70% in the month following 5. Selling and administrative expenses are budgeted at $400,000 for January 2020. This amount includes $120,000 for depreciation 6 Equipment costing $150 000 was expected to be purchased for cash during January 2020 7 On December 15, 2019. Ancora declared a $100.000 dividend to be paid on January 15, 2020 8 Ancora must maintain a minimum cash balance of $50.000 An open line of credit is available from Ancora's bank. REQUIRED: Prepare Ancora's cash budget for the month of Jan 2020 and calculate Ancora's budgeted account receivable and accts payable closing balance at Jan 31, 20.
PLEASE PROVIDE TYPE WRITTEN ANSWER AND NOT HAND-WRITTEN SINCE IT'S HARD TO UNDERSTAND HAND WRITING.
In: Accounting
Mr Ahmed Kumar runs a snack distribution business located in the Light Industrial area in Lusaka. The following list of balances was extracted from his ledger as at 31 March, 2020; the end of his most recent financial year.
K
Capital 83,887
Sales 259,870
Trade accounts payable 19,840
Returns outwards 13,407
Allowance for doubtful debts 512
Discounts allowed 2,306
Discounts received 1,750
Purchases 135,680
Returns inwards 5,624
Carriage outwards 4,562
Drawings 18,440
Carriage inwards 11,830
Rent, rates and insurance 25,973
Heating and lighting 11,010
Postage, stationery and telephone 2,410
Advertising 5,980
Salaries and wages 38,521
Bad debts 2,008
Cash in hand 534
Cash at bank 4,440
Inventory as at 1st April 2019 15,654
Trade accounts receivable 24,500
Fixtures and fittings - at cost 120,740
Prov. for depreciation on fixtures and fittings – 31/03/2020 63,020
Depreciation 12,074
The following additional information as at 31st March, 2020 is available:
(a) Inventory at the close of business was valued at K17,750
(b) Insurances have been prepaid by K1,120
(c) Heating and lighting is accrued by K1,360
(d) Rates have been prepaid by K5,435
(e) The allowance for doubtful debts is to be adjusted so that it is 3% of trade accounts receivable.
Required:
For the year 2020, prepare Mr Kumar’s:
[10 Marks]
[10 Marks]
[10 Marks]
[10 Marks]
[Total: 40 Marks]
In: Accounting
A firm wants to finance an investment that would produce an annual EBIT of $415,000 by issuing 850 ten-year zero-coupon bonds (each with $1,000 face value) that will be charged a market interest rate of 8%. Suppose the bonds will be issued on January 1, 2020 and will mature on December 31, 2029.
Assume EBIT is constant over time at $415,000 and the tax rate is 35%. Shown below are income statement templates for the years 2020 and 2029. You do not have to fill these in for credit on the exam, however, feel free to use them as guides for determining how the choice of financing will affect the firm's tax liability for these years. Specifically, determine
a) How much the firm saves in taxes in 2020 and how much the firm saves in taxes in 2029 by having this 10-year bond on its books (relative to the case without any borrowing)? (Don't worry about discounting these tax savings back to the present, just consider the nominal dollar amounts.)
b) How much the firm saves in taxes in 2020 and 2029 in present value terms by having this 10-year bond on its books (again, relative to the case without any borrowing). Assume that January 1, 2020 is the "present," the discount rate is 8%, and the taxes would be paid on December 31 of the statement year.
Income statement for 2020 (Jan 1 - Dec 31, 2020)
| With the bond | Without the bond | |
| EBIT | $415,000.00 | $415,000.00 |
| Interest | ||
| Pre-tax Income | ||
| Taxes at 35% | ||
| Net Income |
Income statement for 2029 (Jan 1 - Dec 31, 2029)
| With the bond | Without the bond | |
| EBIT | $415,000.00 | $415,000.00 |
| Interest | ||
| Pre-tax Income | ||
| Taxes at 35% | ||
| Net Income |
In: Finance
The acidity of the group 16 hydrides increase going down the group (H2O << H2S < H2Se < H2Te). Which is the best explanation for this trend?
(A) The electronegativity of the group 16 elements increases going down the group.
(B) The polarizability of the group 16 elements increases going down the group.
(C) The polarity of the X–H bond increases going down the group.
(D) The H–X–H bond angle increases going down the group.
I don't understand what polarizability means in this particular question. Please explain. From what I understand, acidity increases because atomic radius increases down the group and bonds get bigger I suppose so they are easier to break off.
Thank You!
In: Chemistry
Assignment:
Two significant events have occurred. One, the OPEC members and Russia got together and increased the production of petroleum. Their goal was to lower the worldwide price of petroleum (crude oil) and drive higher-cost producers from the market, principally the fracking producers in the United States. (This is a good example of an imperfect market where one or more of the participants can manipulate the price.) At the same time, the COVID-19 pandemic spread across the world, reducing demand for petroleum products (manufacturing, energy, and transportation).
Draw a supply and demand diagram for the worldwide petroleum market. Shift supply to the right. Then shift demand to the left. Note the huge drop in price.
The American gasoline market mirrors the worldwide petroleum market. Lowering the cost of the input – petroleum – shifts supply to the right. Reduced driving shifts demand to the left. Show this on a supply and demand diagram. Note the drop in the price of gasoline.
The macro model for the US.
The COVID-19 pandemic led to the shutdown of many aspects of production in the country as firms closed down. As a result, on a macro model, Short-run aggregate supply (SRAS) shifted left. Also, the buying public swiftly decreased purchases. As a result, AD shifted to the left. The government has passed a large stimulus bill designed to shift AD back to the right. It will take time to fully implement. The Federal Reserve has injected huge amounts of liquidity into the system with the same goal in mind.
Draw a macro model. Identify the starting equilibrium point. Then shift SRAS to the left. Follow by shifting AD to the left. At the new equilibrium point, note that real GDP decreased sharply. Depending on how you drew the shifts, inflation (price index) probably did not change much. Now begin shifting AD to the right in small steps, indicating that the stimulus plan and the Fed’s injections begin to take effect. See the possibility of emerging inflation as this occurs, with AD shifting right and AS stationary.
As the country ends lockdown and begins to reopen, AS will slowly begin to shift to the right. Do not be surprised if the Fed begins to withdraw some of the liquidity to slow down the rightward movement of AD.
In: Economics