Financial Reporting (Answer is require on immegiate basis)

Q.No.5: The financial statements of AGS Batteries Ltd. are showing 250,000 outstanding ordinary shares of Rs. 10 each as at June 30, 2016. The company issued following convertible preference shares on July 1, 2015:                                                                          (Marks 10)

• 12%, 25,000 preference shares of Rs. 100 each convertible in three years' time, with following conversion rights:
  • 3 ordinary shares for each convertible preference share by June 30, 2016
  • 2 ordinary shares for each convertible preference share by June 30, 2017
  • 1 ordinary share for each convertible preference share by June 30, 2018

• 8%, 200,000 preference shares of Rs. 50 each convertible in one year's time at the rate of 2 ordinary shares for each convertible preference share.

During the year, the company also issued options to offer 50,000 shares for Rs. 15 each. The average fair value of the share is Rs. 20 per share. Profit attributable to ordinary shareholders is Rs. 625,000 for the year ended June 30, 2016. The rate of income tax is 33%.

Required:

1. Calculate basic and diluted earnings per share (EPS) for the year ended June 30, 2016.
2. Which of the above preference shares are dilutive?

Results of Discontinued Operations

During December 2016, Smythe Company decides to sell Division F (a component of the company). On December 31, 2016, the company classifies Division F as held for sale. On that date, the book values of Division F's assets and liabilities are $950,000 and $600,000, respectively. Smythe expects to sell Division F in 2017 and estimates that the fair value of Division F is $250,000. During 2016, Division F earned revenues of $1,000,000 and incurred expenses of $1,300,000. Smythe is subject to a 30% income tax rate.

Required:

1. Compute the following for Division F of Smythe Company:

2. Prepare the results from discontinued operations section of Smythe income statement for 2016.

After the 2016 presidential election, Gallup collected a random sample of 1,021 Americans and estimated that 47% of Americans wanted to keep the electoral college. One month before the election, in October 2016, another random poll of 1,100 Americans estimated that 52% wanted to keep the Electoral College. Statistically speaking, we can look at whether or not we can be sure that there was a change in opinions about keeping the Electoral College between October of 2016 and November of 2016.

(a) What is the point estimate for the November poll?

(b) What is the point estimate for the October poll?

(c) Are these point estimates statistics or parameters? Explain why or why not.

(d) Report and interpret the difference between the two point estimates.

(e) Compute the estimated standard error for the difference between two estimates. Show your work.

(f) Construct and interpret the difference between these groups at the 95% level. Show your work. 1 Now we can also perform a significance test.

(g) State the null hypothesis.

(h) State an alternative hypothesis.

(i) The test statistic z=-2.3012 and its associated p-value is approximately 0.021 for a two-tailed test at the 5% significance level. Interpret this result in regards to the hypotheses you stated above.

22) Use the information about Billy's Burgers to answer the following question(s):

                                   Billy's Burgers

a) Using the percent of sales method, and assuming 20% growth in sales, estimate Billy's Burgers' depreciation for 2016.

b) Using the percent of sales method, and assuming 20% growth in sales and no change in interest expense, estimate Billy's Burgers' pretax income for 2016.

c) Using the percent of sales method, and assuming 20% growth in sales and no change in interest expense, estimate Billy's Burgers' net income for 2016.

d) Using the percent of sales method, and assuming 20% growth in sales, estimate Billy's Burgers' accounts receivable for 2016.

Computing and Assessing Plant Asset Impairment

Zeibart Company purchases equipment for $225,000 on July 1, 2012, with an estimated useful life of 10 years and expected salvage value of $25,000. Straight-line depreciation is used. On July 1, 2016, economic factors cause the market value of the equipment to decline to $90,000. On this date, Zeibart examines the equipment for impairment and estimates $125,000 in future cash inflows related to use of this equipment.

a. Is the equipment impaired at July 1, 2016?
AnswerYesNo

b. If the equipment is impaired on July 1, 2016, compute the impairment loss and prepare a journal entry to record the loss.

c. What amount of depreciation expense would Zeibart record for the 12 months from July 1, 2016 through June 30, 2017? Prepare a journal entry to record this depreciation expense. Round to the nearest dollar. (Hint: Assume no change in salvage value.)

d. Using the financial statement effects template, show how the entries in parts b and c affect Zeibart Company’s balance sheet and income statement.

Dowell Company produces a single product. Its income statements under absorption costing for its first two years of operation follow. 2016 2017 Sales ($46 per unit) $ 1,150,000 $ 2,070,000 Cost of goods sold ($31 per unit) 775,000 1,395,000 Gross margin 375,000 675,000 Selling and administrative expenses 288,750 323,750 Net income $ 86,250 $ 351,250 Additional Information Sales and production data for these first two years follow. 2016 2017 Units produced 35,000 35,000 Units sold 25,000 45,000 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. Direct materials $ 5 Direct labor 8 Variable overhead 8 Fixed overhead ($350,000/35,000 units) 10 Total product cost per unit $ 31 Selling and administrative expenses consist of the following. 2016 2017 Variable selling and administrative expenses ($1.75 per unit) $ 43,750 $ 78,750 Fixed selling and administrative expenses 245,000 245,000 Total selling and administrative expenses $ 288,750 $ 323,750 2. What are the differences between the absorption costing income and the variable costing income for these two years? (Loss amounts should be entered with a minus sign.)

Oriole Ltd. purchased a new machine on April 4, 2014, at a cost of $ 184,000. The company estimated that the machine would have a residual value of $ 16,000. The machine is expected to be used for 10,500 working hours during its four-year life. Actual machine usage was1,500 hours in 2014; 2,400 hours in 2015; 2,500 hours in 2016; 2,100 hours in 2017; and 2,000 hours in 2018. Oriole has a December 31 year end.

Calculate depreciation for the machine under each of the following methods:

Straight-line for 2014 through to 2018.

Diminishing-balance using double the straight-line rate for 2014 through to 2018.

(3) Units-of-production for 2014 through to 2018.

Liam Wallace is general manager of United Salons. During 2016, Wallace worked for the company all year at a $12,900 monthly salary. He also earned a year end bonus equal to 5% of his annual salary. Wallace's federal income tax withheld during 2016 was $1,032 per month, plus $774 on his bonus check. State income tax withheld came to $170 per month plus $110 on the bonus. FICA tax was withheld on the annual earnings. Wallace authorized the following payroll deductions: Charity fund contribution of 3% of total earnings and life insurance of $45 a month.

Requirement 1: Compute Wallace​'s gross​ pay, payroll​ deductions, and net pay for the full year 2016.Round all amounts to the nearest dollar.

Requirement 2: Compute United's total 2016 payroll expense for Wallace

Requirement 3: make the journal entry to record united's expense for wallaces total earnings for the year. his payroll deductions, net pay, Debit salaries and bonus expenses as appropriate. Credit liability accounts for the payroll deductions and cash for net pay.

Requirement 4: Make the journal entry to record the accrual of United's payroll tax expense for wallaces total earnings

Problem 7-9 (Comprehensive Receivables Problem) Braddock Inc. had the following long-term receivable account balances atDecember 31, 2016.Note receivable from sale of division $1,500,000Note receivable from officer 400,000Transactions during 2017 and other information relating to Braddock’s long-term receivables were as follows.1.The $1,500,000 note receivable is dated May 1, 2016, bears interest at 9%, and represents the balance of the considerationreceived from the sale of Braddock’s electronics division to New York Company. Principal payments of $500,000 plus appropriateinterest are due on May 1, 2017, 2018, and 2019. The first principal and interest payment was made on May 1,2017. Collection of the note installments is reasonably assured.2.The $400,000 note receivable is dated December 31, 2016, bears interest at 8%, and is due on December 31, 2019. The noteis due from Sean May, president of Braddock Inc. and is collateralized by 10,000 shares of Braddock’s common stock. Interestis payable annually on December 31, and all interest payments were paid on their due dates through December 31,2017. The quoted market price of Braddock’s common stock was $45 per share on December 31, 2017.Instructionsa)Show the balance sheet items that are related to the above two notereceivables for 2016 and 2017.