It is September 2020 and you are considering a significant event that affects one of your audit clients, Falafel-tech Enterprises. The auditor’s report for Falafel-tech Enterprises for the year ended 30 June 2020 was signed on 30 August 2020. The financial report has not yet been issued to shareholders.

You have just discovered that one of Falafel-tech Enterprises’ major debtors at 30 June 2020 went into liquidation on 15 August 2020. The bankruptcy was the result of ongoing financial difficulties.

Required:

Explain what you should do in this situation. In your answer, identify how this should be treated in the financial report, and who this situation should be discussed with.

As at December 31, 2020, Riverbed Inc. has the following balances: Cash in bank, $102,000; Investment in preferred shares (retractable, purchased by Riverbed within 90 days of maturity date), $114,000; Investment in common shares (to be sold within 30 days), $90,000; and Cash (legally restricted for an upcoming long-term debt retirement), $233,000.

1.Determine the December 31, 2020 cash and cash equivalents amount for the 2020 statement of cash flows under IFRS.

Cash and Cash Equivalents $_______

2.Determine the December 31, 2020 cash and cash equivalents amount for the 2020 statement of cash flows under ASPE.

Cash and Cash Equivalents $_______

THE CULLUMBER COMPANY LTD. Income Statement Year Ended December 31
		2021		2020
Net sales		$1,779,530		$1,819,610
Cost of goods sold		1,091,290		1,028,920
Gross profit		688,240		790,690
Operating expenses		521,960		422,530
Profit from operations		166,280		368,160
Interest expense		25,650		18,630
Profit before income tax		140,630		349,530
Income tax expense		42,189		104,859
Profit		$98,441		$244,671

THE CULLUMBER COMPANY LTD. Balance Sheet December 31
Assets		2021		2020
Current assets
Cash		$112,631		$67,485
Accounts receivable		102,723		112,506
Inventory		141,460		123,690
Total current assets		356,814		303,681
Property, plant, and equipment		451,990		530,838
Total assets		$808,804		$834,519
Liabilities and Shareholders’ Equity
Current liabilities
Accounts payable		$147,370		$127,596
Income tax payable		43,310		37,860
Current portion of mortgage payable		10,610		19,920
Total current liabilities		201,290		185,376
Mortgage payable		95,460		193,100
Total liabilities		296,750		378,476
Shareholders’ equity
Common shares (50,190 issued in 2021; 54,330 in 2020)		150,570		162,990
Retained earnings		361,484		293,053
Total shareholders’ equity		512,054		456,043
Total liabilities and shareholders’ equity		$808,804		$834,519

Additional information:

1.		All sales were on account.
2.		The allowance for doubtful accounts was $5,412 in 2021 and $5,087 in 2020.
3.		On July 1, 2021, 4,140 shares were reacquired for $9 per share and cancelled.
4.		In 2021, $5,170 of dividends were paid to the common shareholders.
5.		Cash provided by operating activities was $332,125.
6.		Cash used by investing activities was $153,228

Calculate all possible liquidity, solvency, and profitability ratios for 2021. (Round answers for Collection period, Days sales in inventory, Operating cycle and Free cash flow to 0 decimal places, e.g. 125. Round answer for Earnings per share to 2 decimal places, e.g. 12.56. Round all other answers to 1 decimal place, e.g. 12.5 or 12.5%. )

The Angela’s home cleaning ltd provides home cleaning services. The following is the 1 March 2020 Trial Balance (TB). The company has not made all the March entries but the required info is given below. You will be asked to update the accounts as at 31 March 2020.

angela’s Cleaning COMPANY

Angela’s

Unadjusted Trial Balance

1 March 2020

            Cash...................................................................................... $ 5,700

            Accounts receivable...........................................................      1,800

            Cleaning supplies...............................................................         800

            Accounts payable...............................................................                              300

            Dividend payable................................................................                              500

            Dividends ............................................................................         500                                 Capital Stock ...............................................................................................      6,000

            Retained earnings...............................................................                           1,400

            Client revenue.....................................................................                           5,800

            Salaries expense................................................................      3,100

            Travel expense....................................................................      1,500

            Printing expense ................................................................         600

           

                                                                                                             $14,000       $14,000

the following transaction happened in march

1. Mar 10 Purchased a car for the business. Paid cash amounting to USD4,000
2. Mar 10 -Decided to give to its senior director gym membership for 12 months starting 1 Mar for USD600 for the year. This was paid on 10 March.
3. Mar. 15. Collected USD600 from client recorded on accounts receivable
4. Mar. 16 Issued shares for USD2,000
5. Mar. 16 Purchased cooking supplies for USD600 and paid for it via notes payable. The notes payable is due in 6 months time at interest rate of 4%.

ADJUSTING ENTRIES

6. Mar 31 Made an accrual for staff bonuses of USD1,000 payable in April.
7. Mar 31 Billed home owners on sales of USD2,000 and the amount if due in May 2020
8. Mar 31 Recorded and paid Mar salaries of USD700
9. Mar 31 Made an accrual for tax of USD400 and March telephone bill for USD120 .
10. Mar 31 wrote off bad debts of USD50 in accounts receivable.
11. Mar 31- Record interest for notes payable – item 5

Instructions

1. For each of the above data prepare journal entries and show the T accounts. 15%
2. Prepare a new trial balance after including these additional adjusting entries. 10%
3. Prepare an income statement 10%
4. Prepare a balance sheet 10%

Please show any working where required.

Electronics Inc. buys and sells photocopy equipment that are used in businesses across Ontario. The company follow IFRS. Unit selling prices range from $10,000 to $100,000.

		Electronic Inc. sells a photocopy system to Centennial College on September 10th, 2020. The selling price for the photocopy equipment is usually $85,500.
-		Electronic Inc. will also install the photocopy system. The estimated fair value of installing the photocopy system is $2,700. Electronic Inc. will also provide one year of maintenance service for the photocopy system. The fair value for the maintenance for the year is $1,800. Electronic Inc. sold the photocopy system with installation and maintenance to Centennial College for $85,000. The photocopy system cost Electronic Inc. $45,000. Centennial Inc. is obligated to pay Electronic Inc. $20,000 upon delivery of the photocopy system and the balance on November 15th.

• Electronic Inc. delivers the photocopy equipment on October 15th, 2020, and completes the installation of the photocopy equipment on November 1^st, 2020.
• On December 31^st Centennial College pays for 2 months of maintenance services. The following December 31^st Centennial College pays for 10 months of maintenance services.

On November 15^th Centennial College informs Electronic Inc. that they will be not be able to pay their account that is due. The two parties enter into an agreement that the account will be converted into a non-interest bearing promissory note to be repaid in one year from now. The maturity value of the note is $67,098. Centennial College borrows fund at a rate of 6%. Electronic Inc. has various loans at 5% interest. The company’s year end is December 31^st.

1. List the performance obligations?
2. Explain when the revenue should be recognized for each performance obligation under IFRS. Support your answer by explaining why it should be recognized at the time you selected.
3. Prepare the journal entries for 2020 and 2021. If there is no entry be sure to state no entry. Hint remember to allocate the revenue among the different performance obligations and then use this information when you prepare the journal entries.
4. If the company followed ASPE when should the revenue be recognized for the sale of the photocopy system and why? Be sure to list the criteria and apply it to the question. Hint use RCMP for criteria.
5. Peer evaluation

Eva received $57,000 in compensation payments from JAZZ Corp. during 2020. Eva incurred $8,000 in business expenses relating to her work for JAZZ Corp. JAZZ did not reimburse Eva for any of these expenses. Eva is single and she deducts a standard deduction of $12,400. Based on these facts, answer the following questions: Use Tax Rate Schedule for reference. (Leave no answer blank. Enter zero if applicable.)

Problem 8-68 Part a (Algo)

a. Assume that Eva is considered to be an employee. What amount of FICA taxes is she required to pay for the year? (Round your final answer to the

Amount of FICA taxes?_________

c. Assume that Eva is considered to be a self-employed contractor. What is her self-employment tax liability and additional Medicare tax liability for the year? (Round your intermediate computations & final answers to the nearest whole dollar amount. Leave no answer blank. Enter zero if applicable.)

Self Employment tax liability?______

Additional Medicare Tax Liability?_____

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Rasheed works for Company A, earning $382,000 in salary during 2020.

Assuming he is single and has no other sources of income, what amount of FICA tax will Rasheed pay for the year? (Round your intermediate and final answer to the nearest whole dollar amount.)

Amount of FICA TAX?_________

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Carol works for ABC Company and earned $66,000 for the entire year 2018. How much in FUTA tax is her employer required to withhold in her name? Assume that the employer receives the maximum credit for state unemployment taxes.

Multiple Choice

A.$49.40.

B.$0.

C.$450.00.

D.$42.00.

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Alice is single and self-employed in 2020. Her net business profit on her Schedule C for the year is $184,000.

What is her self-employment tax liability and additional Medicare tax liability for 2020? (Round your final answer to the nearest whole dollar amount. Leave no answer blank. Enter zero if applicable.)

Self Employment tax liability?______

Additional Medicare Tax Liability?_____

Gemini Car Parts (GCP) Inc., a multinational corporation, is a major supplier of a broad range of components to the worldwide automobile and light truck market. GCP is in the process of developing a bid to supply an ignition system module to Samoa Igni Company (SIC), a South Korean automobile manufacturer, for a new line of automobiles for the next four-year production cycle. The Request for Proposal issued by SIC specifies a quantity of 200,000 modules in the first year and 250,000 units in years 2 through 4 of the contract. GCP marketing specialists believe that, in order to be competitive, a bid of 100,000 South Korean Won (KRW) per unit is appropriate. Other relevant data are shown below.

• Manufacturing specialists estimate that a $12 million (U.S. Dollars) investment in equipment (including installation) is required.

• The equipment is expected to last the 4-year life of the contract, at which time it would cost $1.4 million to remove the equipment which would be sold for a scrap value of $900,000.

• Direct labor and material expenses are estimated at $40 per unit.

• The change in indirect cash expenses associated with this contract is expected to be $3 million per year.

• The new product will require additional investment in inventory and accounts receivable balances at the outset, amounting to $1.2 million during the four-year time period. This investment will be recovered at the end of the four-year contract. • GCP is subject to U.S. income tax at an effective rate of 40%.

• For tax purposes, assume that the initial $12 million cost of the equipment is depreciated evenly over the four-year period.

• The company economist estimates that the exchange rate will average 1,250 KRW per U.S. Dollar for the four-year time period.

REQUIRED:

A. Calculate the after-tax incremental cash flows in U.S. Dollars for the following periods:

1. Period 0.

2. Period 1.

3. Period 4 operating cash flow

4. Period 4 terminal cash flow.

B. The assumptions used to develop the cash flows are subject to various degrees of estimation error. For each of three different cash flow variables, identify and discuss one potential risk that could affect the estimates made by GCP.

This is all information I have that provided by the professor.

On January 1, 2020, the merchandise inventory of Ivanhoe, Inc. was $1700000. During 2020 Ivanhoe purchased $3398000 of merchandise and recorded sales of $4200000. The gross profit rate on these sales was 20%. What is the merchandise inventory of Ivanhoe at December 31,

2020? $1738000. $3360000. $840000. $802000.

The ColorfulFurniture Company manufactures modern wood frame lounge sofas.

Currently the company makes only one size of three-seat sofas, which is 35 inches deep

by 90 inches wide. The final product consists of a routed, sanded, assembled, and stained

wood sofa. Direct materials include oak wood frames and pre-made cushions. Other

materials, such as wood legs, screws, hinges, sand paper, stain, and packaging, are treated

as indirect materials. ColorfulFurniture is preparing budgets for the second

quarter

ending June 30, 2020

. For each requirement below prepare budgets by month for April,

May, and June, and a total budget for the quarter.

1. The previous year’s sales (2019) for the corresponding period were:

April 540 sofas

May 680 sofas

June 920 sofas

July 1220 sofas

August 750 sofas

The company expects the above volume of lounge sofa sales to increase by 10% for

the period April 2020 – August 2020. The budgeted selling price for 2020 is $850.00

per sofa. The company expects 15% of its sales to be cash (COD) sales. The

remaining 85% of sales will be made on credit.

Prepare a Sales Budget for

ColorfulFurniture.

2. The company desires to have finished goods inventory on hand at the end of each

month equal to 10 percent of the following month's budgeted unit sales. On March

31, 2020, the company expects to have 65 sofas on hand. (Note: an estimate of sales

in July is required in order to complete the production budget for June).

Use the

@ROUNDUP function to round up to the whole number the number of sofas

desired in ending inventory. Prepare a Production budget

.

3. The sofas require two direct materials: oak wood frames and pre-made cushions:

Sixteen (16) feet of 4x1 oak wood are required for each sofa produced. Management

desires to have materials on hand at the end of each month equal to 18 percent of the

following month's sofa production needs. The beginning inventory of wood, April

2020, is expected to be 2,340 feet of wood. Oak wood is expected to cost $8.00 per

foot. (Note: budgeted production in July is required in order to complete the direct

materials budget for June.

Use the @ROUNDUP function to round up to the whole

number the number of feet of oak wood to purchase).

Pre-made cushions (30*30 inches) are purchased by a set of 10 cushions. Six (6)

cushions are required for each sofa. Management desires to have cushions on hand at

the end of each month equal to 13 percent of the following month's production needs.

Use the @ROUNDUP function to round up to the whole number the number of

cushions desired in ending inventory.

The beginning inventory, April 2020, is

expected to be 630 cushions. The set of 10 cushions is expected to cost $200. (Note:

budgeted production in July is required in order to complete the direct materials

budget for June.

Use the @ROUNDUP function to round up to nearest 10 the

number of cushions to purchase).

Prepare a Direct Materials budget

. Also, because two direct materials are required

for production - oak wood and cushions - you will need a separate schedule for each

direct material.

4. Each sofa requires 10 hours of direct labor. ColorfulFurniture uses a series of table

saws, table routers and sanders set up for specialized operations to achieve production

efficiencies. Direct labor costs the company $20 per hour.

Prepare a Direct Labor

budget

.

5. ColorfulFurniture budgets indirect materials (e.g., wood legs, screws, hinges, sand

paper, stain, and packaging) at $35.50 per sofa. ColorfulFurniture treats indirect labor

and utilities as mixed costs. The variable components are $20.60 per sofa for indirect

labor and $7.50 per sofa for utilities. The following fixed costs per month are

budgeted for indirect labor, $55,000, utilities, $3,000, and other, $20,000.

Prepare a

Manufacturing Overhead budget.

6. Variable selling and administrative expenses are $50.50 per sofa sold. Fixed selling

and administrative expenses are $85,000 per month.

These costs are not itemized, i.e.,

the budget has only two line items – variable operating expenses and fixed operating

expenses.

Prepare an Operating Expenses budget.

7. Prepare a

Budgeted Manufacturing Cost per unit budget

. Refer to exhibit 9-11 for

guidance. To calculate FMOH/unit calculate total FMOH for the year and divide this

by budgeted production for the year. The total production volume for the year is

budgeted at 10,000 sofas.

8.

Prepare a Budgeted Income Statement for the quarter for ColorfulFurniture

.

Assume interest expense of $0, and income tax expense of 21% of income before

taxes.

Directions:

Refer to Chapter 9 (

The Master Budget

) for guidance in setting up your budgets and

schedules. Adapt your schedules for the specific details outlined in the requirements

above. Prepare your budgets using Excel.

Use formulas and cell references so that any

change you make in one budget is carried through to all the budgets

. There should be

no hard keyed numbers in your formulas. For example, if you change the ‘sales volume

increase’ from 10% to 12% you should see effects of that change throughout the other

budgets. Likewise, if the budgeted selling price per lounge sofa changes from $850 to

$855 your spreadsheet model should be able to quickly and easily accommodate this

change, i.e., change the input cell for budgeted selling price and see the effect on income.

The spreadsheet will be graded on presentation, correctness, and quality of your

spreadsheet model (i.e., does it update correctly for changes in input variables). See

the grading rubric on Canvas.

You should approach this assignment as if you are the

Management Accountant at the ColorfulFurniture Company and you are going to present

these budgets in a meeting to the CEO, CFO, and other management personnel.

Some general principles to follow in constructing your Excel spreadsheet model:

1. Prepare an input area in which you enter all input variables – e.g., selling price,

budgeted volume increase, feet per sofa, ending inventory percentage, etc. You

may use the “Assumptions” tab of the sample spreadsheet or a designated area

within your budget spreadsheet, as long as the input area is clearly labeled and

neatly organized

2. Each schedule should refer to the input area for each constant data value (see

sample spreadsheet file). To the extent possible, keep all constant values together

in one area of the worksheet. An important principle of good spreadsheet design is

to keep just one copy of each constant value. That is, enter a constant value in

only one location in the worksheet. Then if you use the value in another cell, use a

cell reference that refers to the constant value's unique location.

Example (hypothetical): You enter the constant value of 6% for sales tax

in cell E5. When you write a formula in your worksheet that requires sales

tax, reference E5 in the formula instead of "hard coding" in the 6% value.

Do: =subtotal*E5

Don't: =subtotal*6%

3. Use cell references for constant data values and to calculate formulas within your

spreadsheet. There should be no hard-keyed numbers in your formulas. For

example, the formula to determine current period sales in units should reference

an input cell with last year’s sales volume and a cell with the volume percentage

increase.

4. Label and format appropriately – e.g., use $ to format dollar amounts, format cells

for decimal places, etc...

The following information is from Alberta Ltd financial statements for the year ended Dec 31, 2020: - Net income for the year $ 460,000. - 8% Convertible bonds issued at par $1,000,000 ($1000 per bond), each bond convertible into 20 common shares $1,000,000 - 6% non-cumulative preferred shares $100 par value. $1,000,000 - Common shares 120,000 authorized, 60,000 issued and outstanding $ 600,000 - Stock options (call option granted in a prior year) to purchase 30,000 common shares at $10 per common share. - Average market price per common share during 2020 was $12, and the tax rate for 2020 is 35% - Alberta declare and pay $100,000 dividends during 2020 There were no changes during 2020 in the number of common shares, preferred shares, stock options or convertible bonds. Also for simplicity, ignore the requirement to book the convertible bonds’ equity portion separately. Instruction: A) Calculate the basic EPS for 2020 B) Calculate diluted EPS for 2020 (Show your calculation for each transaction/ affect)