Presented below is an aging schedule for the Ivan Company at December 31, 2020:

At December 31 2020, the unadjusted balance in Allowance for Doubtful Account is a credit of $10,000.

Instructions: Cut and paste the general journal below in your window and use it to journalize your entries to answer questions A, C, And D.

[A] Using information above, record the adjusting entry to adjust the allowance for doubtful accounts at December 31, 2020.

General Journal:

[B] What is the net (cash) realizable value of accounts receivable after the adjustment is made to record bad debt expense?

(please label answer clearly in your solution/window)

[C] Journalize the following events that occurred in 2021. If no journal entry is required please indicate that no entry is necessary. Use the general journal that you cut and paste in your solution to answer the question.

(1) March 1, a customer with an accounts receivable balance of $400 is deemed uncollectible.

      (2) May 1, a check for $400 is received from the customer above.

[D] Journalize the entry to adjust the allowance for doubtful accounts at December 31, 2021 assuming that the unadjusted balance in Allowance for Doubtful Accounts is a debit of $1,400 and the aging schedule indicates that total estimated collectible accounts will be $36,700.

The following information relates to Susan’s Florist Shop at June 30, 2021, the end of its first year of operations. (All purchases were made for cash unless stated otherwise)

1. On July 2, 2020, Susan purchased equipment for $12,000. The equipment is expected to have a useful life of 8 years. The expected residual value is zero, and Susan will use straight-line depreciation.
2. On August 1, 2020, a one-year insurance policy was purchased for $1,740.
3. In January 2021, a corporate customer paid $2,080 as full payment for a one-year contract for fresh flowers to be delivered to its offices every Monday morning. At June 30^th, 26 of the required 52 deliveries had been completed.
4. On July 2, 2020, Susan purchased enough supplies to last the entire first year of operations for $4,400. At June 30, 2021, Susan counted the supplies on hand and calculated the cost, which amounted to $1,035.
5. Susan pays her store assistant on alternate Fridays. The last pay day in June was June 20^th and the first pay day after year end is July 4^th. The assistant worked 30 hours during this period of which 10 were in June and the rest in July. The assistant earns $11.80 per hour.
6. June 28 is a busy day and Susan has to make deliveries to numerous customers. On July 5, she reviews her June billings, and realizes that she made one large sale for $325 on June 30 for flowers that were delivered, but for which no invoice was issued. The sale was to a regular customer who will pay promptly when the invoice is sent.

Required:

1. For each transaction, prepare any adjusting entries required at June 30, 2021

2. Susan uses reversing entries. Prepare any reversing entries required for July 1, 2021

You are the audit supervisor of Seagull & Co and are currently planning the audit of your existing client, Eagle Heating Co., for the year ending December 31, 2020. Eagle manufactures and sells heating and plumbing equipment to a number of home improvement stores across the country.

Eagle has experienced increased competition and is facing significant pressure to meet sales targets. As a result, it has decreased the selling price of its products significantly since September 2020. The finance director has informed your audit manager that he expects increased inventory levels at the year end. He also notified your manager that one of Eagle's key customers has been experiencing financial difficulties. Therefore, Eagle has agreed that the customer can take a six-month payment break, after which payments will continue as normal. The finance director does not believe that any allowance is required against this receivable.

In October 2020, the financial controller of Eagle was dismissed. He had been employed by the company for over 20 years, and he has threatened to sue the company for unfair dismissal. The role of financial controller has not yet been filled and so his tasks have been shared between the existing finance department team. In addition, the accounts payable supervisor left in August and a replacement has been appointed in the last week. However, for this period no supplier statement reconciliations or accounts payable reconciliations were performed.

You have undertaken a preliminary analytical review of the draft year-to-date statement of profit or loss, and you are surprised to see a significant fall in administration expenses.

Required

Discuss the factors that will impact the risk of material misstatement at the financial statement and account levels in planning the audit of Eagle.

The following budgeted income statement has been prepared for XY company for the months of January to April 2020

Jan Feb Mar April

Le000 Le000 Le000 Le000

Sales 60.0 50.0 70.0 60.0

Costs of production 50.0 55.0 32.5 50.0

(increase)/decrease in inventory (5.0) (17.5) 20.0 (5.0)

Cost of sales 45.0 37.5 52.5 45.0

Gross Profit 15.0 12.5 17.5 15.0

Administration and selling overhead (8.0) (7.5) (8.5) (8.0)

7.0 5.0 9.0 7.0

Additional information:

40% of the production cost relates to direct materials. Materials are bought in the month prior to the month in which they are used. Purchases are paid for one month after purchase.
30% of the production cost relates to direct labour which is paid for when it is used.
The remainder of the production cost is produced overhead.
Le 5,000 per month is a fixed cost which includes Le 30,000 depreciations. Fixed production overhead costs are paid for when incurred.
The remaining overhead is variable. The variable production overhead is paid 40% in the month of usage and the balance, one month later. Unpaid variable production overhead at the beginning of January is Le 90,000.
The administration and selling costs are paid quarterly in advance on 1st January, 1st April,1st July, and 1st October. The amount payable is Le 15,000 per quarter.
All sales are on credit. 20% of receivables are expected to be paid in the month of sale and 80% in the month following. Unpaid trade receivables at the beginning of January were Le 44,000.
The Company intends to purchase equipment costing Le 30,000 in February which will be payable in March.
The bank balance on 1st January 2020 is expected to be Le 5,000 overdrawn.
You are required to prepare the cash budget for the first quarter of 2020.   

sales are expected to increase by 20% from $7.2 million in 2019 to $8.64 million in 2020. Its assets totaled $2 million at the end of 2019. Broussard is already at full capacity, so its assets must grow at the same rate as projected sales. At the end of 2019, current liabilities were $1.4 million, consisting of $450,000 of accounts payable, $500,000 of notes payable, and $450,000 of accruals. The after-tax profit margin is forecasted to be 4%, and the forecasted payout ratio is 40%. Use the AFN equation to forecast Broussard's additional funds needed for the coming year. Enter your answer in dollars. For example, an answer of $1.2 million should be entered as $1,200,000. Do not round intermediate calculations. Round your answer to the nearest dollar.

The municipality of a major city in Quebec is planning to build a new bridge to decrease the traffic load on the existing bridges connecting both sides of the city across the river. Construction is to start in 2020 and is expected to take four years at a cost of $25 million per year. After construction is completed, the cost of operation and maintenance is expected to be $2.5 million for the first year and to increase by 2.8% per year thereafter. The scrap/salvage value of the bridge at the end of year 2053 is estimated to be $5 million. Consider the present to be the end of 2018/beginning of 2019 and the interest rate to be 8%.

a)   Draw a cash flow diagram for this project (from present till end of year 2053).
b)   Find the Present Worth of this project.
c)   Find the Future Worth of this project.

Metlock Inc. manufactures cycling equipment. Recently, the company’s vice-president of operations has requested construction of a new plant to meet the increasing demand for the company’s bikes. After a careful evaluation of the request, the board of directors has decided to raise funds for the new plant by issuing $2,380,000 of 13% term corporate bonds on March 1, 2020, due on March 1, 2034, with interest payable each March 1 and September 1. At the time of issuance, the market interest rate for similar financial instruments is 12%.

As Metlock's controller, determine the selling price of the bonds. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 5,275.)

1) The net income per books of Bramble Industries Limited was determined without any knowledge of the following errors. The 2019 year was Bramble’s first year in business. No dividends have been declared or paid.

a) Prepare a work sheet to show the adjusted net income figure for each of the six years after taking the inventory corrections into account.

b) Prepare a schedule that shows both the original retained earnings balance reported at the end of each year and the corrected amount.

For the most recent financial year 2018, WOW reported operating lease expenses of $950 million, operating income (EBIT) of $2,000 million, and interest-bearing debt of $4,000 million. The future operating lease commitments of the company are as follows: $1,200 million (in 2019); $900 million (in 2020); $800 million (in 2021); $700 million (in 2022); $600 million (in 2023), and a lump sum of commitments beyond that point in time of $4,000 million. The pre-tax cost of debt is 7.4%, the cost of capital is 13%, the firm’s beta is 1.38, and the effective tax rate is 30%.

1. What is the total present value in 2018 of all operating lease commitments?
2. What is the total debt of the company after reclassifying operating leases as debt?