The trial balance for a company that sells alarms, as of January 1, 2016 had the following balances:

Cash 74,000

Accounts receivable 13,000

Supplies 200

Prepaid rent 3,200

Merchandise inventory (24 @ $200; 1 @ $200) 5,000

Land 4000

Accounts payable 1,900

Unearned revenue 900

Salaries payable 1,000

Common stock 50,000

Retained earnings 47,000

The following transactions took place during 2016:

1. Paid the salaries payable from 2015.

2. Paid $4,800 on May 1, 2016, for one year's lease on the company van in advance.

3. Paid $7,200 on May 2, 2016 for one year's office rent in advance.

4. Purchased $400 of supplies on account.

5. Purchased 100 alarm systems for $28,000 cash during the year.

6. Sold 102 alarm systems for $57,000. All sales were on account.

(Compute cost of goods sold using the FIFO cost flow method)

7. Paid $2,100 on accounts payable during the year.

8. Billed $52,000 of monitoring services for the year.

9. Paid installers and other employees a total of $25,000 cash for salaries.

10. Collected $89,000 of accounts receivable during the year.

11. Paid $3,600 of advertising expense during the year.

12. Paid $2,500 of utilities expense for the year.

13. Paid a dividend of $10,000 to the shareholders.

Required:

1. Prepare the trial balance as at Dec 31, 2016 for the company

2. Prepare the income statement and balance sheet for the company.

Dowell Company produces a single product. Its income statements under absorption costing for its first two years of operation follow.

Additional Information

Sales and production data for these first two years follow.

Variable cost per unit and total fixed costs are unchanged during 2016 and 2017. The company's $31 per unit product cost consists of the following.

Selling and administrative expenses consist of the following.

Delta Oil Company uses the successful-efforts method to account for oil exploration costs. Delta started business in 2014 and prepared the following income statements: DELTA OIL COMPANY Income Statements For the Years Ended December 31, 2014 - 2015 1 2014 2015 2 Revenue $1,000,000.00 $3,000,000.00 3 Other expenses 400,000.00 1,300,000.00 4 Exploration expenses 120,000.00 238,000.00 5 Income before income taxes $480,000.00 $1,462,000.00 6 Income tax expense (30%) 144,000.00 438,600.00 7 Net income $336,000.00 $1,023,400.00 8 Earnings per share $3.36 $10.23 The company chose to change to the full-cost method at the beginning of 2016. Under the full-cost method, Delta capitalizes all exploration costs of the Oil and Gas Properties asset account on its balance sheet. It determines the exploration and amortization expense amounts under the full-cost method to be as follows: 2014 2015 2016 Exploration expense $0 $0 $0 Amortization expense 8,000 18,200 42,000 In addition, Delta reported revenue of $9,000,000 and other expenses of $4,200,000 in 2016. With the 2016 financial statements, the company issues comparative statements for the previous 2 years. Required: 1. Prepare the journal entry to reflect the change. 2. Prepare the comparative income statements and the comparative statements of retained earnings for 2016, 2015, and 2014. Notes to the financial statements are not necessary. 3. Next Level Discuss the advantages and disadvantages of accounting for a change in this manner.

Instructions

Delta Oil Company uses the successful-efforts method to account for oil exploration costs. Delta started business in 2014 and prepared the following income statements:

Question not attempted.

The company chose to change to the full-cost method at the beginning of 2016. Under the full-cost method, Delta capitalizes all exploration costs of the Oil and Gas Properties asset account on its balance sheet. It determines the exploration and amortization expense amounts under the full-cost method to be as follows:

In addition, Delta reported revenue of $9,000,000 and other expenses of $4,200,000 in 2016. With the 2016 financial statements, the company issues comparative statements for the previous 2 years.

Required:

[The following information applies to the questions displayed below.]

Dowell Company produces a single product. Its income statements under absorption costing for its first two years of operation follow.

Additional Information

Sales and production data for these first two years follow.

Variable cost per unit and total fixed costs are unchanged during 2016 and 2017. The company's $31 per unit product cost consists of the following.

Selling and administrative expenses consist of the following.

Complete income statements for the company for each of its first two years under variable costing. (Loss amounts should be entered with a minus sign.)

Calculating Weighted-Average Cost Inventory Values

The Mann Corporation began operations in 2015. Information relating to the company’s purchases of inventory and sales of products for 2015 and 2016 is presented below

Calculate the weighted-average cost of goods sold and ending inventory for 2015 and 2016 assuming use of (a) the periodic method and (b) the perpetual method.

a. Weighted-Average Periodic. Do not round your cost per unit. Do not round until your final answer. Round your answers to the nearest whole number.

b. Weighted-Average Perpetual. Do not round your cost per unit. Do not round until your final answer. Round your answers to the nearest whole number.

The following financial information (in millions except for per share amounts) is for two major corporations for the three fiscal years ended December 31 as follows:

Neither company has preferred shares issued.

(a1)

Calculate earnings per share and the price-earnings and dividend payout ratios for each company for 2017, 2016, and 2015. (Round earnings per share and price-earnings ratio answers to 2 decimal places, e.g. 52.76. Round payout ratio answers to 3 decimal places, e.g. 5.276.)

Calculating Weighted-Average Cost Inventory Values The Mann Corporation began operations in 2015. Information relating to the company’s purchases of inventory and sales of products for 2015 and 2016 is presented below 2015 March 1 Purchase 200 units @ $10 per unit June 1 Sold 120 units @ $25 per unit September 1 Purchase 100 units @ $14 per unit November 1 Sold 130 units @ $25 per unit 2016 March 1 Purchase 100 units @ $16 per unit June 1 Sold 80 units @ $30 per unit September 1 Purchase 100 units @ $18 per unit November 1 Sold 100 units @ $35 per unit Calculate the weighted-average cost of goods sold and ending inventory for 2015 and 2016 assuming use of (a) the periodic method and (b) the perpetual method. a. Weighted-Average Periodic. Do not round your cost per unit. Do not round until your final answer. Round your answers to the nearest whole number. 2015 Cost of goods sold $Answer Ending inventory $Answer 2016 Cost of goods sold $Answer Ending inventory $Answer b. Weighted-Average Perpetual. Do not round your cost per unit. Do not round until your final answer. Round your answers to the nearest whole number. 2015 Cost of goods sold $Answer Ending inventory $Answer 2016 Cost of goods sold $Answer Ending inventory $Answer

On 1 July 2016 Kashmir Ltd was registered as a public company. The financial year end is 30 June each year. On 5 July a prospectus was issued inviting applications for 200,000 shares payable $1.00 on application, 50 cents on allotment and 25 cents on call one and 25 cents on call two. Call one was made three months after the date of allotment, and call two was made six months after the date of allotment.

By 31 July 2016 applications were received for 250,000 shares. On 3 August 2016 the directors allotted 200,000 shares to the applicants on a pro rata basis. The surplus application money was offset against the amount payable on allotment. The balance of the allotment money was received by 15 August 2016. Share issue costs were $15,000, and these were paid on 31 August 2016.

The two calls were made on the dates stated in the prospectus, and a month after, each call monies were received, except that the holders of 15,000 shares did not pay either call. In addition a holder of another 5,000 shares did not pay the second call. All the shares with unpaid call money were forfeited on 2 July 2017 and reissued on 25 July 2017 to existing shareholders with the price of $1.50 each. The money of forfeited shares was refunded on 10 August 2017 after paying the re? issuing cost of the solicitor amounted to $1,000 on 1 August 2017.

Required:
Prepare entries in general journal form to record the above transactions.

Prepare a Statement of Shareholders’ Equity for Kashmir Ltd as at 30 June 2017

On January 2, 2015, Roth, Inc. purchased a laser cutting machine to be used in the fabrication of a part for one of its key products. The machine cost $120,000, and its estimated useful life was four years or 1,150,000 cuttings, after which it could be sold for $5,000.

Required

a. Calculate each year’s depreciation expense for the machine's useful life under each of the following depreciation methods (round all answers to the nearest dollar):

1. Straight-line.
2. Double-declining balance.
3. Units-of-production. (Assume annual production in cuttings of 280,000; 430,000; 360,000; and 80,000.)

1. Straight-Line

2. Double-declining balance

3. Units of Production

b. Assume that the machine was purchased on July 1, 2015. Calculate each year’s depreciation expense for the machine's useful life under each of the following depreciation methods:

1. Straight-line.
2. Double-declining balance.

1. Straight-Line

2. Double-declining balance (Round answers to the nearest whole number, when appropriate.)