Adjusted Trial balance

                                                    Debits           Credits

Cash                                                 400          

Short-term Investments               210          

Accounts Receivable                     330        

Supplies                                          150

Notes Receivable (Long Term)   120    

Land                                                100

Buildings                                        340

Equipment                                    200

Accumulated Depreciation                                 360

Accounts Payable                                                 350        

Unearned Revenues                                            110        

Notes Payable (Long Term)                                140        

Common Stock                                                       80          

Additional Paid-In Capital                                   130        

Retained Earnings                                                180

Service Revenue                                                   870

Interest Revenue                                                   30

Interest Expense                            40

Wages Expense                            300

Supplies Expense                           60

                                                      _____             _____

                                                        2,250              2,250

Based on the adjusted trial balance shown above:

Prepare the income statement.

Prepare the statement of retained earnings, assuming that the retained earnings was reduced during the year by $70 of dividends that the company paid during the year.

Prepare the balance sheet.

Prepare the closing entry to close the revenues and expenses to the retained earnings account.

Jean Wang is a junior external auditor of China Chance Limited this year. She asked China Chance for their cash and cash equivalents information in DD Bank. The list of the information includes bank balances, loans, guarantees, acceptance bills, and letters of credit, etc. Several days later, Jean received the list of the information made by the staff at China Chance, which was without any chops or management’s signature.

Requirement:

a) Suggest at least two audit tests/procedures to help Jean to get reliable evidence of the list of information.

Question

Except for cash and cash equivalents, Jean also was assigned to identify substantive audit procedures for the“Revenue” and “Electricity” account balances that will provide sufficient appropriate audit evidence regarding the accuracy of these account balances.

Requirement:

b) Design at least one (1) substantive audit procedure for each account (i.e., “Revenue” and “Electricity”). (You may need to consider the characteristics of accounts in your answers.)

The PROCOM Corporation is planning its financing for the next six months. PROCOM makes one item, which it sells through the retail shop in the front of the factory. The planning process was started with profit-and loss computations. Profit is revenue less expenses and revenue is quantity times the unit price. Expenses are made up fixed costs and variable costs. Fixed costs include: rent, salaries, and utilities. Variable costs depend directly on the quantity. These costs are materials and labor. The following represents planning figures for the next six months. Using D-cide, find the profit for the next six months and export the results into an excel spreadsheet.

Planning period: Six Months

Unit Price: $500

Quantity: 20,000 Up 5% Monthly

Fixed Costs:

Rent: $40,000

Salaries: $200,000

Utilities: $50,000 Down 2% Monthly

Variable Costs:

Unit Material: $200

Unit Labor: $100 Up $5 monthly

Vanguard Services had the following adjusted trial balance at December 31, 2018.

VANGUARD SERVICES

Adjusted Trial Balance

For the year ended December 31, 2018

Required: On the basis of above trial balance prepare following statements.

1. .    Comprehensive Income statement.
2.     Statement of Owner’s equity.
3.      Classified Balance sheet as per IFRS.

           d.    Post-closing Trial balance                                                                    

Two accountants for the firm of Elwes and Wright are arguing about the merits of presenting an income statement in a multiple-step versus a single-step format. The discussion involves the following 2020 information related to P. Bride Company ($000 omitted). Administrative expense Officers' salaries $4,900 Depreciation of office furniture and equipment 3,960 Cost of goods sold 60,570 Rent revenue 17,230 Selling expense Delivery expense 2,690 Sales commissions 7,980 Depreciation of sales equipment 6,480 Sales revenue 96,500 Income tax 9,070 Interest expense 1,860 Common shares outstanding for 2020 total 40,550 (000 omitted). Prepare an income statement for the year 2020 using the multiple-step form. (Round earnings per share to 2 decimal places, e.g. 1.48.) Prepare an income statement for the year 2020 using the single-step form. (Round earnings per share to 2 decimal places, e.g. 1.48.)

The alphabetical listing below includes all of the adjusted account balances of Battle Creek, Inc. as of December 31, 2018. All account balances are normal.

Required:

Prepare the closing entries. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Prepare the post-closing trial balance as of December 31, 2018. (Enter all account balances, including any that may carry a zero-balance.)

Prepare the classified balance sheet at December 31, 2018. (Amounts to be deducted should be indicated by a minus sign.)

Fuzzy Monkey Technologies, Inc., purchased as a long-term investment $80 million of 6% bonds, dated January 1, on January 1, 2018. Management has the positive intent and ability to hold the bonds until maturity. For bonds of similar risk and maturity the market yield was 8%. The price paid for the bonds was $64 million. Interest is received semiannually on June 30 and December 31. Due to changing market conditions, the fair value of the bonds at December 31, 2018, was $70 million.

Required:

1. Record Fuzzy Monkey’s investment on bonds on January 1, 2018.

2. Record the interest revenue on June 30, 2018.

3. Record the interest revenue on December 31, 2018.

4. At what amount will Fuzzy Monkey report its investment in the December 31, 2018, balance sheet?

5. How would Fuzzy Monkey's 2018 statement of cash flows be affected by this investment?

Adger Corporation is a service company that measures its output based on the number of customers served. The company provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results for May as shown below:

When preparing its planning budget the company estimated that it would serve 30 customers per month; however, during May the company actually served 35 customers.

Required (all computations pertain to the month of May):
What activity variance would Adger report with respect to its revenue? & What activity variances would Adger report with respect to each of its expenses?

PLEASE SHOW ALL WORK

Universal Foods issued 12% bonds, dated January 1, with a face amount of $175 million on January 1, 2021 to Wang Communications. The bonds mature on December 31, 2035 (15 years). The market rate of interest for similar issues was 14%. Interest is paid semiannually on June 30 and December 31. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)

Required:
1. to 3. Prepare the journal entries to record the purchase of the bonds by Wang Communications on January 1, 2021, interest revenue on June 30, 2021 and interest revenue on December 31, 2028. (Round final answers to the nearest whole dollars. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

1. Record the investment in bonds on January 1, 2021.

2. Record the interest on June 30, 2021.

Use actual sales (revenue) data from previous 4 years to estimate sales using the linear trend function. Please show work in excel!!