EcoPak Ltd is a small private company, specialising in the manufacture of takeaway packaging, which offers an environmentally friendly alternative to disposable food containers. The business’s accountant Kate has prepared a draft version of EcoPak’s Balance Sheet and Income Statement for the financial year ended 30 June 2020. Kate knows she has made several mistakes in classifying the elements of the Balance Sheet and Income Statement because the income statement shows EcoPak has made a loss and the Balance Sheet doesn’t balance! Kate’s statements are shown below.
|
EcoPak Ltd - Draft Income Statement for the year ended 30 June 2020 |
|
|
Cash at Bank |
255,000 |
|
Accrued Wages |
22,000 |
|
Gross profit |
277,000 |
|
Expenses |
|
|
Bank Loan |
320,000 |
|
Interest expense |
27,000 |
|
Prepaid Rent |
3,600 |
|
Depreciation Expense |
43,000 |
|
Donations Expense |
12,000 |
|
Accounts Receivable |
14,000 |
|
Other expenses |
32,000 |
|
Earnings before interest and tax |
-174,600 |
|
Accounts Payable |
22,000 |
|
Profit before tax |
-196,600 |
|
Income tax expense |
125,000 |
|
Profit for the period from continuing operations |
-321,600 |
|
EcoPak Ltd – Draft Balance Sheet AS AT 30 June 2020 |
|||
|
Assets |
Liabilities |
||
|
Current Assets |
Current Liabilities |
||
|
Wages Expense |
78,000 |
Drawings |
-25,000 |
|
Cost of Sales |
376,000 |
Inventory |
108,000 |
|
Rent Expense |
31,200 |
Electricity expense |
18,000 |
|
Sales revenue |
1,244,000 |
Non-current liabilities |
|
|
Prepaid Utilities |
2,100 |
Trucks |
90,000 |
|
Property Plant and Equipment |
578,000 |
Advertising Expense |
45,000 |
|
Non-current Assets |
Total Liabilities |
236,000 |
|
|
Retained Profits |
468,700 |
Owner’s Equity |
|
|
Mortgage |
63,000 |
Insurance Expense |
72,000 |
|
Contributions |
198,000 |
||
|
Intangibles |
18,000 |
||
|
Total Owner’s Equity |
288,000 |
||
|
Total Assets |
2,841,000 |
Total Liabilities and Owner’s Equity |
524,000 |
|
EcoPak Ltd – CORRECTED Draft Income Statement for the year ended 30 June 2020 |
|
|
Gross profit |
|
|
Expenses |
|
|
Earnings before interest and tax |
|
|
Profit before tax |
|
|
Profit for the period from continuing operations |
|
|
EcoPak Ltd – Draft Balance Sheet AS AT 30 June 2020 |
|||
|
Assets |
Liabilities |
||
|
Current Assets |
Current Liabilities |
||
|
Non-current liabilities |
|||
|
Non-current Assets |
Total Liabilities |
||
|
Owner’s Equity |
|||
|
Total Owner’s Equity |
|||
|
Total Assets |
Total Liabilities and Owner’s Equity |
||
In: Accounting
Smoking remains more common in much of Europe than in the United States. In the United States, there is a strong relationship between education and smoking: well-educated people are less likely to smoke. Does a similar relationship hold in France? Here is a two-way table of the level of education and smoking status (nonsmoker, former smoker, moderate smoker, heavy smoker) of a sample of 467 French men aged 20 to 60 years. The subjects are a random sample of men who visited a health center for a routine checkup. We are willing to consider them an SRS of men from their region of France.
| Education | Smoking Status | ||||
| Nonsmoker | Former | Moderate | Heavy | ||
| Primary school | 58 | 53 | 41 | 38 | |
| Secondary school | 39 | 42 | 28 | 32 | |
| University | 53 | 27 | 38 | 18 | |
The null hypothesis states that there is no relationship between these variables. That is, the distribution of smoking is the same for all three levels of education.
(a) Find the expected counts for each smoking status among men
with a university education. This is one row of the two-way table
of expected counts. Find the row total and verify that it agrees
with the row total for the observed counts.
Use two decimals for the expected counts and a whole number for the
total.
| Education | Smoking Status | TOTAL | ||||
| Nonsmoker | Former | Moderate | Heavy | |||
| University | ||||||
| Expected | ||||||
In: Statistics and Probability
Ali is a student at the University. He recently
purchased a car for OMR5,000 to use it for going to the University.
Ali also expects that other friends might ask for transportation
from him. He expects a total monthly revenue of OMR50. He expects
fuel cost to be OMR40 per month. One of Ali's friends is a taxi
driver. He offered Ali to take him to University for a monthly fee
of OMR10. Because he does not have to drive, Ali believes that he
can perform online work that would earn him a monthly revenue of
OMR30. What is the differential revenue in this scenario? Select
one: O a. OMR40 O b. OMR50 O c. OMR20 O d. OMR10 O e. OMR30
2.The total prime cost of a product was OMR5,200. The variable
manufacturing overhead is calculated based on the number of direct
labor hours. The variable manufacturing overhead cost per hour is
four times the direct labor cost per hour. The fixed manufacturing
overhead was OMR2,000. Assuming that direct labor hours were 350
and that the direct labor cost was 30% of direct materials cost,
how much is the total manufacturing cost? Select one: O a.
OMR12,000 O b. OMR18,000 c. OMR7,200 O d. OMR26,000 O e.
OMR28,000
In: Accounting
You are a college student, and you have a friend at a rival university. The two of you compete in almost everything! One day, your friend boasted that students at her university are taller than the students at yours. You each gather a random sample of heights of people from your respective campuses. Your data are displayed below (units are inches).
Your friend's data: (checksum: 1213.5)
| 75.5 | 72 | 76.4 | 69.7 | 76 | 74.7 | 80.5 | 71.5 | 73.2 | 67.3 |
| 66.8 | 65.2 | 66.7 | 72.5 | 75.7 | 68.5 | 61.3 |
Your data: (checksum: 1301.2)
| 66.9 | 66.2 | 67.6 | 74.1 | 72.3 | 69.4 | 69.3 | 66.7 | 69 | 64.3 |
| 65.9 | 63.1 | 68 | 64.8 | 73.6 | 71.2 | 72.8 | 59 | 77 |
Construct a 95% confidence interval for the difference in mean height between the two college populations.
a) State the parameter of interest, and verify that the necessary conditions are present in order to carry out the inference procedure.
b) Find the estimate for the degree of freedom and the margin of error.
Degree of freedom:
Margin of error:
c) Find the confidence interval: (,)
d) Interpret your 95% confidence interval in context.
e) Based on the confidence interval, is there evidence that the mean height at your friend's university is higher? Explain.
In: Statistics and Probability
In: Finance
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In: Accounting
From inception of operations to December 31, 2020, Metlock
Corporation provided for uncollectible accounts receivable under
the allowance method. The provisions are recorded, based on
analyses of customers with different risk characteristics. Bad
debts written off were charged to the allowance account; recoveries
of bad debts previously written off were credited to the allowance
account, and no year-end adjustments to the allowance account were
made. Metlock’s usual credit terms are net 30 days.
The balance in Allowance for Doubtful Accounts was $114,400 (Cr.)
at January 1, 2020. During 2020, credit sales totaled $7,920,000,
the provision for doubtful accounts was determined to be $158,400,
$79,200 of bad debts were written off, and recoveries of accounts
previously written off amounted to $13,200. Metlock installed a
computer system in November 2020, and an aging of accounts
receivable was prepared for the first time as of December 31, 2020.
A summary of the aging is as follows.
|
Classification by |
Balance in |
Estimated % |
|||
| November–December 2020 | $950,400 | 2% | |||
| July–October | 572,000 | 10% | |||
| January–June | 369,600 | 25% | |||
| Prior to 1/1/20 | 132,000 | 80% | |||
| $2,024,000 | |||||
Based on the review of collectibility of the account balances in
the “prior to 1/1/20” aging category, additional receivables
totaling $52,800 were written off as of December 31, 2020. The 80%
uncollectible estimate applies to the remaining $79,200 in the
category. Effective with the year ended December 31, 2020, Metlock
adopted a different method for estimating the allowance for
doubtful accounts at the amount indicated by the year-end aging
analysis of accounts receivable.
Prepare a schedule analyzing the changes in Allowance for
Doubtful Accounts for the year ended December 31, 2020. Show
supporting computations in good form. (Hint: In computing
the 12/31/20 allowance, subtract the $52,800 write-off.)
In: Accounting
1- True/False _______ All access. such as requests to read records, updates, deletions and additions, for data from application programs (apps) related to data residing on a centralized database goes through the DBMS in order to be performed.
2-True/False ____ When a database is designed, the Database Administrator designates the organization’s single, allowable and standard programming language, such as Java, that must be used by the apps whenever accessing the database.
3- True/False ___ When preparing to design a new database it is generally not worth the time and effort to interview the users, examine existing files, reports and forms because they most likely will be flawed or of little value and can distract the designer from her important tasks related to the new DB.
4-True/False _____ Designing Databases is optimally accomplished by closely following strict database guidelines in order to complete the task by a single focused effort.
In: Computer Science
The Pyramid Company has used the LIFO method of accounting for
inventory during its first two years of operation, 2019 and 2020.
At the beginning of 2021, Pyramid decided to change to the average
cost method for both tax and financial reporting purposes. The
following table presents information concerning the change for
2019–2021. The income tax rate for all years is 25%.
| Income before Income Tax | ||||||||||||||||||||
| Using Average Cost Method | Using LIFO Method | Difference | Income Tax Effect |
Difference after Tax |
||||||||||||||||
| 2019 | $ | 90,000 | $ | 60,000 | $ | 30,000 | $ | 7,500 | $ | 22,500 | ||||||||||
| 2020 | 45,000 | 36,000 | 9,000 | 2,250 | 6,750 | |||||||||||||||
| Total | $ | 135,000 | $ | 96,000 | $ | 39,000 | $ | 9,750 | $ | 29,250 | ||||||||||
| 2021 | $ | 51,000 | $ | 46,000 | $ | 5,000 | $ | 1,250 | $ | 3,750 | ||||||||||
Pyramid issued 50,000 $1 par, common shares for $230,000 when the
business began, and there have been no changes in paid-in capital
since then. Dividends were not paid the first year, but $10,000
cash dividends were paid in both 2020 and 2021.
Required:
1. Prepare the journal entry at January 1, 2021,
to record the change in accounting principle.
2. Prepare the 2021–2020 comparative income
statements beginning with income before income taxes.
3. Prepare the 2021–2020 comparative statements of
shareholders’ equity. [Hint: The 2019 statements reported retained
earnings of $45,000. This is $60,000 − ($60,000 × 25%).]
In: Accounting
The Unadjusted pre-closing 12/31/2020 account balances for the Mahoney Company are listed below:
|
Net Sales |
$12,540,000 |
|
Net Purchases |
9,000,000 |
|
Selling Expenses |
424,000 |
|
Cash |
487,000 |
|
Machines |
6,019,000 |
|
Accumulated Depreciation, Machines |
2,154,000 |
|
Accounts Payable |
1,445,000 |
|
Retained Earnings |
4,182,000 |
|
Allowance for Doubtful Accounts |
60,000 |
|
Building |
4,800,000 |
|
Accumulated Depreciation, Building |
468,000 |
|
Common Stock |
4,760,000 |
|
Accounts Receivable |
2,877,000 |
|
Depreciation Expense, Machines |
1,077,000 |
|
Inventory @ 1/1/2020 |
925,000 |
During your audit, you discover the following four items that have yet to be recorded:
1) No depreciation on the building has been recorded for 2020. Depreciation on the building is based on Double-Declining Balance. It was purchased on 1/1/18 and has an estimated useful life of 40 years. The estimated salvage value is $1,000,000.
2) Mahoney exhanged a machine for a similar machine on 12/31/2020. The origianl machine cost $3,429,000 and has a book value of $2,134,000. The new machine had a fair value of $1,823,000; Mahoney also received $511,000 in cash. The exchange lacked commercial substance.
3) Mahoney uses the Income Statement approach to record Bad Debts. Bad Debts in 2020 are estimate to be 4% of Sales.
4) Ending Inventory is to be estimated using the Gross Profit Method. The historic Gross Profit percentage is 20%.
Required
A) Record journal entries for items #1-3 above; show supporting computations. In addition, compute ending inventory per #4 above; show supporting computations. Assume adjusting/closing entries to adjust inventory, closing Purchases, and Record Cost of Goods Sold were properly made.
B) Draft the 2020 Condensed Income Statement and the 12/31/2020 Balance Sheet. Assume no Taxes. Do not include Earnings Per Share.
In: Accounting