Marmidan Mold Shop Inc. designs and builds molds for the automotive and aircraft industries. The account balances in the company’s general ledger on January 1, 2020 (first day of the new annual fiscal year) were as follows (all account balances are in their normal position):
Cash $ 3,700
Accounts receivable 5,900
Supplies inventory 29,300
Land 168,500
Buildings 116,500
Accumulated depreciation, buildings 37,500
Equipment 58,500
Accumulated depreciation, equipment 18,000
Accounts payable 25,200
Income tax payable 16,600
Interest payable 4,200
Wages payable (due in 2020) 15,700
9% Notes payable ($10,000 due June 30, 2021,
balance due June 30, 2022) 61,500
Common shares 151,500
Retained earnings, Dec. 31, 2019 52,200
Transactions during 2020:
1.The company provided sales services to customers, on credit, for $ 210,300. In addition, the company produced cash sales to customers of $ 62,300.
2.Accounts receivable from customers of $ 15,600 remains to be collected at December 31, 2020.
3.Inventory of $ 62,900 was purchased on credit and debited to the supplies inventory account.
4.Minor parts were purchased with cash for $ 7,400 and debited to the supplies inventory account.
5.Wages payable at the beginning of 2020 were paid early in 2020. In addition, wages were earned by employees and paid during 2020 in the amount of $ 112,000.
6.Income tax payable at the beginning of 2020 was paid early in 2020.
7.Payments of $ 73,000 were made to creditors for supplies previously purchased on credit.
8.One year’s interest at 9% was paid on the notes payable at July 1, 2020.
9. During 2020, Don Tallint, the principal shareholder, purchased a new car for his wife
Debbie. The new car cost $ 45,000 and was paid for with cash from personal sources.
10.Property taxes were paid on the land and buildings in the amount of $ 17,000 with cash.
11.Dividends were declared and paid in cash in the amount of $ 7,200.
The information available for year-end adjusting entries:
12.•Supplies inventory was counted on December 31, 2020, and it was determined the supplies inventory still on hand at yearend was $ 31,900.
13. •Annual depreciation on the buildings is $ 6,000.
14•Annual deprecation on the equipment is $ 5,500
15•Additional wages of $4,000 were earned but are unpaid and unrecorded at December 31, 2020.
16•Interest for six months at 9% per year on the notes payable is unpaid and unrecorded at December 31, 2020.
17•Income taxes of $ 16,500 were unpaid and unrecorded at December 31, 2020.
Question: Prepare a single step income statement for Marmidan Mold Shop Inc. for the year ended December 31, 2020.
In: Accounting
Marmidan Mold Shop Inc. designs and builds molds for the automotive and aircraft industries. The account balances in the company’s general ledger on January 1, 2020 (first day of the new annual fiscal year) were as follows (all account balances are in their normal position):
Cash $ 3,700
Accounts receivable 5,900
Supplies inventory 29,300
Land 168,500
Buildings 116,500
Accumulated depreciation, buildings 37,500
Equipment 58,500
Accumulated depreciation, equipment 18,000
Accounts payable 25,200
Income tax payable 16,600
Interest payable 4,200
Wages payable (due in 2020) 15,700
9% Notes payable ($10,000 due June 30, 2021,
balance due June 30, 2022) 61,500
Common shares 151,500
Retained earnings, Dec. 31, 2019 52,200
Transactions during 2020:
1.The company provided sales services to customers, on credit, for $ 210,300. In addition, the company produced cash sales to customers of $ 62,300.
2.Accounts receivable from customers of $ 15,600 remain to be collected at December 31, 2020.
3.Inventory of $ 62,900 was purchased on credit and debited to the supplies inventory account.
4.Minor parts were purchased with cash for $ 7,400 and debited to the supplies inventory account.
5.Wages payable at the beginning of 2020 were paid early in 2020. In addition, wages were earned by employees and paid during 2020 in the amount of $ 112,000.
6.Income tax payable at the beginning of 2020 was paid early in 2020.
7.Payments of $ 73,000 were made to creditors for supplies previously purchased on credit.
8.One year’s interest at 9% was paid on the notes payable at July 1, 2020.
9. During 2020, Don Tallint, the principal shareholder, purchased a new car for his wife
Debbie. The new car cost $ 45,000 and was paid for with cash from personal sources.
10.Property taxes were paid on the land and buildings in the amount of $ 17,000 with cash.
11.Dividends were declared and paid in cash in the amount of $ 7,200.
Information available for year end adjusting entries:
12.•Supplies inventory was counted on December 31, 2020 and it was determined the supplies inventory still on hand at yearend was $ 31,900.
13. •Annual depreciation on the buildings is $ 6,000.
14•Annual deprecation on the equipment is $ 5,500
15•Additional wages of $4,000 were earned but are unpaid and unrecorded at December 31, 2020.
16•Interest for six months at 9% per year on the notes payable is unpaid and unrecorded at December 31, 2020.
17•Income taxes of $ 16,500 were unpaid and unrecorded at December 31, 2020.
Required:
Prepare a classified statement of financial position for Marmidan Mold Shop Inc. as at December 31, 2020. (Please record on the electronic worksheet)
In: Accounting
1.a.)When using FIFO for inventories, market value generally refers to ________ under U.S. GAAP and ________ under IFRS.
A) current replacement cost; historical cost
B) historical cost; net realizable value
C) historical cost; current replacement cost
D) net realizable value; net realizable value
b. Margaret Company reported the following information for the current year:
|
Net sales |
$3,000,000 |
|
Purchases |
$1,957,000 |
|
Beginning Inventory |
$245,000 |
|
Ending Inventory |
$115,000 |
|
Cost of Goods Sold |
65% of sales |
Industry Averages available are:
|
Inventory Turnover |
5.29 |
|
Gross Profit Percentage |
28% |
How do the inventory turnover and gross profit percentage for Margaret Company compare to the industry averages for the same ratios? (Round inventory turnover to two decimal places. Round gross profit percentage to the nearest percent.)
A) Margaret Company has superior gross profit percentage and inventory turnover.
B) Margaret Company has superior gross profit percentage and inferior inventory turnover.
C) Margaret Company has inferior gross profit percentage and superior inventory turnover.
D) Margaret Company has inferior gross profit percentage and inventory turnover.
c.)Ending inventory for the year ended December 31, 2019, is understated by $8,000. How will this affect net income for 2019 and 2020?
A) Net income will be understated by $8,000 in 2019 and 2020.
B) Net income will be overstated by $8,000 in 2019 and 2020.
C) Net income will be understated by $8,000 in 2019 and overstated by $8,000 in 2020.
D) Net income will be overstated by $8,000 in 2019 and understated by $8,000 in 2020.
d.) Ending inventory for the year ended December 31, 2019, is understated by $23,000. How will this error affect net income for 2020?
A) Net income will be understated by $46,000.
B) Net income will be overstated by $46,000.
C) Net income will be understated by $23,000.
D) Net income will be overstated by $23,000.
e.) Beginning inventory for the year ended December 31, 2019, is understated. How will this error affect net income for 2019 and 2020?
A) 2019 overstated; 2020 understated
B) 2019 understated; 2020 overstated
C) 2019 overstated; 2020 no effect
D) 2019 understated; 2020 no effect
f.)Beginning inventory for the year ended December 31, 2019, is understated. How will this error affect net income for 2019 and 2020?
A) 2019 overstated; 2020 understated
B) 2019 understated; 2020 overstated
C) 2019 overstated; 2020 no effect
D) 2019 understated; 2020 no effect
In: Accounting
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a. Determine the amounts of the components of pension expense that should be recognized by the company in 2020.
b. Prepare the journal entry to record pension expense and the employer's contribution to the pension plan in 2020.
c. Indicate the pension-related amounts that would be reported on the income statement and the balance sheet for Ferreri Company for the year 2020.
In: Accounting
XYZ Medical Ltd a Melbourne based company enters into a non-cancellable purchase commitment of US$50,000 with an American supplier on 1 April 2020 to buy the face masks in a bulk for medical staff. These face masks are to be shipped on the 1st of May 2020. The amount owing on the purchase is payable on 31 July 2020. XYZ Ltd observed that exchange rate is very volatile due to the current trade war between America and China. XYZ decided to enter into a forward rate contract. On 1 April 2020 a forward-exchange contract for US$50,000 as taken out with Westpac Bank Ltd at a cost of $76 923 (which is US$50,000 ÷ 0.65 with AU$1.00 = US$0.65 being the agreed forward rate). XYZ Ltd uses cash flow hedge accounting and its reporting date is 30 June. Date Spot rate Forward rate 1 st April 2020 0.67 0.65 1 st May 2020 0.61 0.59 30th June 2020 0.55 0.57 31st July 2020 0.64 0.64 Required: i. Calculate the gain or loss on the forward contract for each significant date. ii. Prepare the journal entries to account for the transactions including 31/7/2020.
In: Accounting
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In: Accounting
OCloud Corportation's suite of software products and services provides secure and scalable solutions for global companies. The following is an extract from the company's 2020 and 2019 comparative income statements and statement of financial position. The market price of OCloud's common shares was $41.12 and $38.20 on June 30, 2020, and June 30, 2019, respectively. OCloud declared dividends per common share of $0.476 and $0.412 for 2020 and 2019, respectively.
OCLOUD CORPORTATION
Years Ended June 30, 2020 and 2019
(in thousands)
| Comparative Income Statement | 2020 | 2019 |
| Total revenues | $2,276,557 | $1,828,767 |
| Total cost of revenues | 766,850 | 569,174 |
| Total operating expenses | 1,169,419 | 874,972 |
| Net Income | $1,009,546 | $300,221 |
| Statement of Financial Position | 2020 | 2019 |
| Total assets | $7,490,691 | $5,175,412 |
| Total liabilities | 3,960,177 | 3,762,299 |
| Common share capital | 1,436,263 | 821,380 |
| Total shareholders' equity | $3,530,514 | $1,413,113 |
| Weighted average number of common shares outstanding | 253,195 | 242,375 |
Calculate the return on shareholders' equity for OCloud in 2020. Note that OCloud's articles of incorporation authorize only common shares. The average return for the shares listed on the Toronto Stock Exchange in a comparable period was 19.8%. (Round answer to 1 decimal place)
Return on shareholders' equity:___%
Calculate earnings per share for the years 2020 and 2019 (Round answers to 2 decimal places)
2020 2019
Earnings per share $ per share $ per share
Calculate the dividend payout ratio and the dividend yield for 2020 and 2019. (Round answers to 1 decimal place)
2020 2019
Dividend payout ratio % %
Dividend yield % %
In: Accounting
| RAMBLE CORPORATION Statement of Financial Position |
||||||
| December 31 | ||||||
| Assets | 2020 | 2019 | ||||
| Cash | $78,000 | $34,800 | ||||
| Accounts receivable | 104,400 | 70,800 | ||||
| Inventory | 159,600 | 97,200 | ||||
| FV-OCI investments in shares | 75,600 | 100,800 | ||||
| Land | 78,000 | 123,600 | ||||
| Equipment | 468,000 | 516,000 | ||||
| Accumulated depreciation—equipment | (140,400 | ) | (103,200 | ) | ||
| Goodwill | 148,800 | 207,600 | ||||
| Total | $972,000 | $1,047,600 | ||||
| Liabilities and Shareholders’ Equity | ||||||
| Accounts payable | $14,400 | $61,200 | ||||
| Dividends payable | 18,000 | 38,400 | ||||
| Notes payable | 264,000 | 402,000 | ||||
| Common shares | 318,000 | 150,000 | ||||
| Retained earnings | 345,600 | 340,800 | ||||
| Accumulated other comprehensive income | 12,000 | 55,200 | ||||
| Total | $972,000 | $1,047,600 | ||||
Additional information:
| 1. | Net income for the fiscal year ending December 31, 2020, was $22,800. | |
| 2. | In March 2020, a plot of land was purchased for future construction of a plant site. In November 2020, a different plot of land with original cost of $103,200 was sold for proceeds of $114,000. | |
| 3. | In April 2020, notes payable amounting to $168,000 were retired through the issuance of common shares. In December 2020, notes payable amounting to $30,000 were issued for cash. | |
| 4. | FV-OCI investments were purchased in July 2020 for a cost of $18,000. By December 31, 2020, the fair value of Bramble’s portfolio of FV—OCI investments decreased to $75,600. No FV—OCI investments were sold in the year. | |
| 5. | On December 31, 2020, equipment with an original cost of $48,000 and accumulated depreciation to date of $14,400 was sold for proceeds of $25,200. No equipment was purchased in the year. | |
| 6. | Dividends on common shares of $38,400 and $18,000 were declared in December 2019 and December 2020, respectively. The 2019 dividend was paid in January 2020 and the 2020 dividend was paid in January 2021. Dividends paid are treated as financing activities. | |
| 7. | A loss on impairment was recorded in the year to reflect a decrease in the recoverable amount of goodwill. No goodwill was purchased or sold in the year. |
(a)
Prepare a statement of cash flows using the indirect method for
cash flows from operating activities.
| RAMBLE CORPORATION Statement of Financial Position |
||||||
| December 31 | ||||||
| Assets | 2020 | 2019 | ||||
| Cash | $78,000 | $34,800 | ||||
| Accounts receivable | 104,400 | 70,800 | ||||
| Inventory | 159,600 | 97,200 | ||||
| FV-OCI investments in shares | 75,600 | 100,800 | ||||
| Land | 78,000 | 123,600 | ||||
| Equipment | 468,000 | 516,000 | ||||
| Accumulated depreciation—equipment | (140,400 | ) | (103,200 | ) | ||
| Goodwill | 148,800 | 207,600 | ||||
| Total | $972,000 | $1,047,600 | ||||
| Liabilities and Shareholders’ Equity | ||||||
| Accounts payable | $14,400 | $61,200 | ||||
| Dividends payable | 18,000 | 38,400 | ||||
| Notes payable | 264,000 | 402,000 | ||||
| Common shares | 318,000 | 150,000 | ||||
| Retained earnings | 345,600 | 340,800 | ||||
| Accumulated other comprehensive income | 12,000 | 55,200 | ||||
| Total | $972,000 | $1,047,600 | ||||
Additional information:
| 1. | Net income for the fiscal year ending December 31, 2020, was $22,800. | |
| 2. | In March 2020, a plot of land was purchased for future construction of a plant site. In November 2020, a different plot of land with original cost of $103,200 was sold for proceeds of $114,000. | |
| 3. | In April 2020, notes payable amounting to $168,000 were retired through the issuance of common shares. In December 2020, notes payable amounting to $30,000 were issued for cash. | |
| 4. | FV-OCI investments were purchased in July 2020 for a cost of $18,000. By December 31, 2020, the fair value of Bramble’s portfolio of FV—OCI investments decreased to $75,600. No FV—OCI investments were sold in the year. | |
| 5. | On December 31, 2020, equipment with an original cost of $48,000 and accumulated depreciation to date of $14,400 was sold for proceeds of $25,200. No equipment was purchased in the year. | |
| 6. | Dividends on common shares of $38,400 and $18,000 were declared in December 2019 and December 2020, respectively. The 2019 dividend was paid in January 2020 and the 2020 dividend was paid in January 2021. Dividends paid are treated as financing activities. | |
| 7. | A loss on impairment was recorded in the year to reflect a decrease in the recoverable amount of goodwill. No goodwill was purchased or sold in the year. |
(a)
Prepare a statement of cash flows using the indirect method for
cash flows from operating activities.
In: Accounting
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