Pearl Corporation is a publicly traded company that follows
IFRS. On December 31, 2019, Pearl’ financial records indicated the
following information related to the company’s defined benefit
pension plan:
| Defined Benefit Obligation | $3,714,000 | |
| Pension Plan Assets | 3,714,000 |
On July 1, 2020, Pearl acquired the operations of Trap Ltd. As one
of the conditions of the purchase, Pearl agreed that Trap’s
employees would be included in Pearl’s defined benefit pension
plan, and would be granted credit for the past service of Trap’s
employees. The actuary estimated the value of the prior service
amount granted on July 1, 2020 to be $193,000.
Pearl’ actuary provided the following information on December 31,
2020:
| Current year service cost | $921,000 | |
| Employer contributions for the year | 899,000 | |
| Benefits paid to retirees | 318,000 | |
| Actuarial increase in pension obligations | 48,000 | |
| Discount rate | 6% | |
| Actual return on assets | 4% |
Prepare a pension worksheet for Pearl Corporation for the year
ending December 31, 2020.
Prepare the journal entry to record the pension expense for
2020.
In: Accounting
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On June 1, 2020, Roman Construction Company Inc. contracted to build an office building for Sicily Corp. for a total contract price of $2,600,000. On July 1, Roman estimated that it would take between 2 and 3 years to complete the building. On December 31, 2022, the building was deemed substantially completed. Following are accumulated contract costs incurred, estimated costs to complete the contract, and accumulated billings to Sicily 2020, 2021, and 2022: |
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At |
At |
At |
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12/31/2020 |
12/31/2021 |
12/31/2022 |
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Contract costs incurred during the year |
$ 600,000 |
$ 1,500,000 |
$ 2,750,000 |
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Estimated costs to complete the contract |
1,800,000 |
1,200,000 |
- |
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Billings to Sicily |
400,000 |
1,200,000 |
2,400,000 |
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Instructions: |
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(a) Using the percentage-of-completion method, prepare schedules to compute the profit or loss to be recognized as a |
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result of this contract for the years ended December 31, 2020, 2021, and 2022. (Ignore income taxes.) |
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(b) Using the completed-contract method, prepare schedules to compute the profit or loss to be recognized as a result of |
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this contract for the years ended December 31, 2020, 2021, and 2022. (Ignore income taxes.) |
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In: Accounting
You are asked to carry out the accounting of the company
1. Prepare with the information the opening entry in the General Journal,
2. Analyze the transactions recorded in the general journal
3. Transfer all information to Major General
4. Prepare the trial balance
The company reports the following assets and obligations:
Accounts Payable amount to B / .16,600.00
Has documents to pay for B / .7,000.00
The inventory of merchandise is B / .125,500.00
In the box they have B / 88,800.00
Also a bank loan payable B / .29,000.00
They have office furniture for 15,000.00
The bank account sum is B / .65,000.00
27,000.00 is the amount of the office equipment
And accounts receivable total B / .68,000.00
THE FOLLOWING TRANSACTIONS WERE DONE:
On 6/24/2020 We bought a car for B / .12,500.00 on credit
On 6/24/2020 A payment was made to accounts payable for B / .1,000.00
On 06/22/2020 the sum of B / 500.00 was paid to a bank loan
On 06/22/2020 Bank B / 88,000.00 was deposited
On 6/23/2020 We received credit to accounts receivable for B / 23,000.00
In: Accounting
QUESTION 2 - Taryn would like to open a new business as an interior designer, to funds her ambition she sold some of the following assets:
1. Antique Painting that was given to Taryn by her father 5 years ago. Taryn’s father bought it on 20 August 1984 for $2,500. Taryn sold it on 1’st June 2020 for $25,000
2. Taryn sold her car (Toyota Corolla) for the amount of $12,000 on 20’th May 2020, she bought on 1’st January 2015 for the amount of $20,000
3. Taryn sold her Harry Potter’s collection for the amount of $1,500 on 4’th January 2020, she bought it second hand on 10’th October 2018 for $350.
4. Taryn sold her gold necklace for $2,000 on 20’th March 2020, she bought it for $1,200 on 8’th August 2018 5. Taryn sold a sculpture for $6,000 on 1 January 2020, she bought it on December 1994 for $1,500
Advise the Capital Gain Tax Consequences for the above transactions
In: Finance
Select information from Patel Sales and Services financial statements are listed below:
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2020 |
2019 |
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Cash |
60,100 |
64,200 |
|
Held-for-trading investment |
74,000 |
50,000 |
|
Accounts receivable |
117,800 |
102,800 |
|
Merchandise Inventory |
126,000 |
115,500 |
|
Property, plant and equipment (net) |
649,000 |
520,300 |
|
Accounts payable |
160,000 |
145,400 |
|
Income taxes payable |
43,500 |
42,000 |
|
Bonds payable (20,000 due each year) |
220,000 |
200,000 |
|
Net sales |
1,890,540 |
1,750,500 |
|
Cost of goods sold |
1,058,540 |
1,006,000 |
Part A
Calculate the following ratios in the table below for 2020. Show your calculations to receive full marks). Results should be rounded to 2 decimal places.
The 2019 results for those ratios are shown in the table below. In the Conclusion column, indicate whether Patel has improved or deteriorated in 2020 as compared to 2019.
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2020 |
2019 |
Conclusion |
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Current Ratio |
1.5:1 |
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Inventory Turnover |
12 times |
Part B Marks
Discuss Patel’s overall financial position in 2020 compared to 2019 using your results from above.
In: Accounting
1. Soundbird Ltd has 600,000 ordinary shares on issue at 1 July
2019, which is the beginning of its reporting period. On 1 January
2020, it issued a further 600,000 ordinary shares for cash. On 1
March 2020, Soundbird Ltd repurchased 10,000 shares at fair value
in a market transaction.
Required: What is the correct weighted average number of shares to
use in the earnings per share calculation for the year ended 30
June 2020?
Show all your workings.
2.Rosy Ltd determined its profit attributable to ordinary
shareholders for the reporting period ended 30 June 2020 as
$1,250,000. The number of ordinary shares on issue up to 1 October
2019 was 1,000,000. Rosy Ltd announced a one-for-two bonus issue
(one bonus share for every two shares held) of shares effective for
each ordinary share outstanding at this date.
Required: What is the basic earnings per share for the year ended
30 June 2020 (keep two decimal places)?
Show all your workings.
In: Finance
Recording Entries under the Fair Value Option—Equity Method
Assume that Fireside Inc. purchased 30% of the common stock of Theater Supplies Corporation on January 1, 2020, for $270,000. Fireside Inc. elected to account for its investment using the fair value option. During the year, Fireside Inc. reported net income of $216,000 and declared and paid dividends of $40,500. The fair value of Fireside’s investment in Theater Supplies common stock is $283,500. Assume that Fireside Inc. has significant influence over Theater Supplies Corporation.
a. What amount would Fireside Inc. report on its balance sheet on December 31, 2020, for its investment in Theater Supplies Corporation?
| Balance Sheet | December 31, 2020 |
|---|---|
| Assets | |
|
Investment in stock |
Answer |
b. What amount would Fireside Inc. report in its income
statement for the year ended December 31, 2020, for its investment
in Theater Supplies Corporation?
Note: Use a negative sign to indicate a
loss.
| Income Statement | 2020 |
|---|---|
| Other Revenues and Gains | |
|
Net gain (loss) on investment |
Answer |
In: Accounting
Taryn would like to open a new business as an interior designer, to funds her ambition she sold some of the following assets: 1. Antique Painting that was given to Taryn by her father 5 years ago. Taryn’s father bought it on 20 August 1984 for $2,500. Taryn sold it on 1’st June 2020 for $25,000 2. Taryn sold her car (Toyota Corolla) for the amount of $12,000 on 20’th May 2020, she bought on 1’st January 2015 for the amount of $20,000 3. Taryn sold her Harry Potter’s collection for the amount of $1,500 on 4’th January 2020, she bought it second hand on 10’th October 2018 for $350. 4. Taryn sold her gold necklace for $2,000 on 20’th March 2020, she bought it for $1,200 on 8’th August 2018 5. Taryn sold a sculpture for $6,000 on 1 January 2020, she bought it on December 1994 for $1,500 Advise the Capital Gain Tax Consequences for the above transactions,
In: Accounting
Oak Creek Company is preparing its master budget for 2020.
Relevant data pertaining to its sales, production, and direct
materials budgets are as follows.
Sales: Sales for the year are expected to total 1,000,000
units. Quarterly sales are 20%, 25%, 25%, and 30%, respectively.
The sales price is expected to be $40 per unit for the first three
quarters and $46 per unit beginning in the fourth quarter. Sales in
the first quarter of 2021 are expected to be 10% higher than the
budgeted sales for the first quarter of 2020.
Production: Management desires to maintain the ending
finished goods inventories at 20% of the next quarter's budgeted
sales volume.
Direct materials: Each unit requires 2 kg of raw materials
at a cost of $10 per kilogram. Management desires to maintain raw
materials inventories at 10% of the next quarter's production
requirements. Assume the production requirements for the first
quarter of 2021 are 630,000 kg.
1. Prepare the sales budget by quarters for 2020.
2. Prepare the production budget by quarters for 2020.
3. Prepare the direct materials budget by quarters for 2020.
In: Accounting
FC.71 Five-star sells school related products. Their top seller,
the five subject spiral notebook, has done very well. The
notebook's sales during the back-to-school season (July through
October) over the last three years are shown below:
| Month | 2017 | 2018 | 2019 |
|---|---|---|---|
| July | 135,000 | 144,000 | 111,000 |
| August | 146,000 | 154,000 | 160,000 |
| September | 60,000 | 62,000 | 67,000 |
| October | 65,000 | 66,000 | 59,000 |
For the five-subject notebook, Five-star's projected sales for
the 2020 back-to-school season of are 375,000. Based on the past
sales and this year's projected sales, answer the following
questions.
Given the above information and using the most appropriate
forecasting method, what should be the forecast for July 2020
sales? (Display your answer to the nearest whole
number.)
What is the forecast for August 2020 sales? (Display your answer to
the nearest whole number.)
What is the forecast for September 2020 sales? (Display your answer
to the nearest whole number.)
What is the forecast for October 2020 sales? (Display your answer
to the nearest whole number.)
In: Operations Management