Western Vancouver Company has just completed their trial balance for the year of operations ending March 31, 2020 as shown below:

$

Office supplies 140

Interest earned 3,370

Office supplies expense 10,220

Patent 600

Commission expense 1,320

Prepaid advertising expense 480

Rent income 10,840

Furniture 9,200

Interest expense 4,500

Accrued interest expense 374

Cash 3,400

Copyright 6,000

Notes receivable, 2025 28,600

Unearned rent income 800

Investment, due 3 months 2,400

Accrued salary expense 526

Translation services revenue 36,000

Land 22,000

Depreciation expense, building 5,000

Accrued commission income 10,200

Accumulated depreciation, furniture 700

Advertising expense 5,520

John Wright, capital 149,200

Depreciation expense, furniture 390

Long-term notes payable, (2030) 75,000

Utilities expense 7,344

John Wright, withdrawals 1,100

Accounts payable 1,684

Building 125,000

Salaries expense 312,520

Accumulated depreciation, building 5,000

Rent paid 24,600

Additional information: 1. Additional investment made by the owner during the year, $22,000.

2. $8,000 of the Long Term Notes Payable will be paid in 5 months after March 31, 2020.

3. $3,600 of the Notes Receivable will be received by March 31, 2021.

Required: Prepare, in good form, a Balance Sheet for the year 2020.

Riverbed Furniture Company started construction of a combination office and warehouse building for its own use at an estimated cost of $3,000,000 on January 1, 2020. Riverbed expected to complete the building by December 31, 2020. Riverbed has the following debt obligations outstanding during the construction period.

Construction loan-12% interest, payable semiannually, issued December 31, 2019 $1,200,000

Short-term loan-10% interest, payable monthly, and principal payable at maturity on May 30, 2021 840,000

Long-term loan-11% interest, payable on January 1 of each year. Principal payable on January 1, 2024 600,000

1. Assume that Riverbed completed the office and warehouse building on December 31, 2020, as planned at a total cost of $3,120,000, and the weighted-average amount of accumulated expenditures was $2,160,000. Compute the avoidable interest on this project. (Use interest rates rounded to 2 decimal places, e.g. 7.58% for computational purposes and round final answers to 0 decimal places, e.g. 5,275.)

Avoidable Interest $

2. Compute the depreciation expense for the year ended December 31, 2021. Riverbed elected to depreciate the building on a straight-line basis and determined that the asset has a useful life of 30 years and a salvage value of $180,000. (Round answer to 0 decimal places, e.g. 5,275.)

Depreciation Expense $

Serial Problem Business Solutions LO P3

Santana Rey receives the March bank statement for Business Solutions on April 11, 2020. The March 31 bank statement shows an ending cash balance of $68,266. The general ledger Cash account, No. 101, shows an ending cash balance per books of $68,825 as of March 31 (prior to any reconciliation). A comparison of the bank statement with the general ledger Cash account, No. 101, reveals the following.

1. The bank erroneously cleared a $580 check against the company account in March that S.Rey did not issue. The check was actually issued by Business Systems.
2. On March 25, the bank statement lists a $43 charge for the safety deposit box. Santana has not yet recorded this expense.
3. On March 26, the bank statement lists a $105 charge for printed checks that Business Solutions ordered from the bank. Santana has not yet recorded this expense.
4. On March 31, the bank statement lists $35 interest earned on Business Solutions’s checking account for the month of March. Santana has not yet recorded this revenue.
5. S. Rey notices that the check she issued for $134 on March 31, 2020, has not yet cleared the bank.
6. S. Rey verifies that all deposits made in March do appear on the March bank statement.

Required:

1. Prepare a bank reconciliation for Business Solutions for the month ended March 31, 2020.

At the end of 2019, the balances in the accounts related to the defined benefit pension plan of the Mansfield Company were as follows:

            Projected benefit obligation                                                                           $1,470,000

            Unrecognized prior service cost (remainder to be amortized over 12 years)             108,000

            Unrecognized net loss                                                                                         192,000

            Plan assets (at fair value)                                                                                  1,087,500

            Pension liability                                                                                                 382,500

On 1/1/20, Mansfield amended the plan to provide an increased amount of pension benefits; the prior service cost resulting from this amendment was $60,000. At 1/1/20, the average remaining service life of employees expected to receive benefits was 12 years.

The following information relates to the year 2020:

                   Service Cost                                                          $184,500

                   Settlement rate                                                                8%

                   Expected rate of return on plan assets                              7%

                   Plan contribution (at year-end)                                 135,000

                   Benefit payments to retirees (at year-end)                 120,000

In 2020, Mansfield’s actual return on plan assets was $80,000. Mansfield follows a policy of recognizing gains/losses on a delayed basis using the "corridor approach". In 2020, there was one change in the estimates and assumptions relating to computation of the projected benefit obligation, resulting in an increase in the PBO of $48,000.

Required:

1.    Prepare Mansfield’s pension worksheet, and prepare the journal entry that Mansfield would make to record the expense calculated.
2. Prepare the pension note required for the 12/31/20 financial statements.

The following events occurred in independent cases, but in each instance, the event happened after the close of the fiscal year under the audit but before the financial statements were authorised for the issue, which is also the audit report date. For each case, state what impact, if any, you would expect on the financial statements (and notes). The balance sheet in each instance is December 31, 2019.

Case1. On December 31, the commodities handled by the company had been traded on the open market for $1.40 per kilogram. this price had prevailed for two weeks, following an official market report that predicted vastly enlarged supplies; however, no purchases were made $1.40. The price throughout the preceding year, and several prior years, had been about $2. On January 18, 2020, the price returned to $2, following disclosure of an error in the official calculations of the prior December- correction of which destroyed the expectation of excessive supplies. Inventory at December 31, 2019, had been valued on a LCNRN (lower of cost and net realizable value) basis, using the prevailing price known at that time, $1.40.

Case 2. On February 1, 2020, the board of directors adopted a resolution accepting an investment banker’s offer to guarantee the marketing of $100 million of preferred shares.

Case3. On January 22, 2020, one of the auditee’s three major plants burned down, a $50 million loss that was covered to $40 million by insurance.

In early January 2020, Novak Inc., a private enterprise that applies ASPE, purchased 40% of the common shares of Washi Corp. for $402,000. Novak was now able to exercise considerable influence in decisions made by Washi’s management. Washi Corp.’s statement of financial position reported the following information at the date of acquisition:

Additional information:

Prepare the journal entry to record Novak’s investment in Washi Corp. Assume that any unexplained payment is goodwill.

Assuming Novak applies the equity method to account for its investment in Washi, prepare the journal entries to record Novak’s equity in the net income and the receipt of dividends from Washi Corp. in 2020.

Bramble Furniture Company started construction of a combination office and warehouse building for its own use at an estimated cost of $2,500,000 on January 1, 2020. Bramble expected to complete the building by December 31, 2020. Bramble has the following debt obligations outstanding during the construction period.

Assume that Bramble completed the office and warehouse building on December 31, 2020, as planned at a total cost of $2,600,000, and the weighted-average amount of accumulated expenditures was $1,800,000. Compute the avoidable interest on this project. (Use interest rates rounded to 2 decimal places, e.g. 7.58% for computational purposes and round final answers to 0 decimal places, e.g. 5,275.)

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Compute the depreciation expense for the year ended December 31, 2021. Bramble elected to depreciate the building on a straight-line basis and determined that the asset has a useful life of 30 years and a salvage value of $150,000. (Round answer to 0 decimal places, e.g. 5,275.)

Flounder Furniture Company started construction of a combination office and warehouse building for its own use at an estimated cost of $3,000,000 on January 1, 2020. Flounder expected to complete the building by December 31, 2020. Flounder has the following debt obligations outstanding during the construction period.

New attempt is in progress. Some of the new entries may impact the last attempt grading.Your answer is incorrect.

Assume that Flounder completed the office and warehouse building on December 31, 2020, as planned at a total cost of $3,120,000, and the weighted-average amount of accumulated expenditures was $2,160,000. Compute the avoidable interest on this project. (Use interest rates rounded to 2 decimal places, e.g. 7.58% for computational purposes and round final answers to 0 decimal places, e.g. 5,275.)

Compute the depreciation expense for the year ended December 31, 2021. Flounder elected to depreciate the building on a straight-line basis and determined that the asset has a useful life of 30 years and a salvage value of $180,000. (Round answer to 0 decimal places, e.g. 5,275.)

Some financial information is extracted from financial statements of Global Co. as follows:

The credit controller of the company considers a new credit policy introduced in 2020 has effectively reduced the receivable days, which provides customers a 1% discount if they make full payment within 30 days. Further review of the policy indicates that the policy also reduced bad debts by £800,000 a year and the cost of financing receivables was covered by a short-term loan at the interest rate of 20% pa.

Required:
a) Is there any sign(s) of overtrading for Global? Explain with appropriate

ratio(s)/figure(s).

b) Calculate the appropriate equivalent annual percentage cost of a discount of 1 per cent, which reduces the time taken by credit customers to pay from 70 days to 50

days.

c) Assuming in 2020 customers either paid in 30 days to receive the discount or still paid in 70 days as they used to, what is the percentage of customers, by value, paid

in 30 days? Calculate the net benefit/cost of the policy.