The Highland Cove Resort has a May 31 fiscal year end and prepares adjusting entries on a monthly basis. The following trial balance was prepared before recording the May 31 month-end adjustments:

Prepare and post adjusting entries, and prepare adjusted trial balance and financial statements.

Additional information:

1. The company pays $6,360 for its annual insurance policy on July 31 of each year.
2. A count shows $560 of supplies on hand on May 31, 2021.
3. The building has an estimated useful life of 50 years.
4. The furniture has an estimated useful life of 10 years.
5. Services related to two thirds of the unearned revenue have been performed.
6. The mortgage interest rate is 6.5% per year. Interest has been paid to May 1, 2021.
7. Salaries accrued to the end of May were $1,450.
8. The May utility bill of $3,420 is unrecorded and unpaid.

Instructions

a. Prepare T accounts and enter the unadjusted trial balance amounts.

b. Prepare and post the monthly adjusting journal entries on May 31.

c. Prepare an adjusted trial balance at May 31.

d. Prepare an income statement and a statement of owner's equity for the year ended May 31, and a balance sheet as at May 31, 2021.

Cash Flow Budgeting - Company A is experiencing rapid growth due to the popularity of its recent hardware release. Current sales of $100,000, which increased from $80,000 the previous month, are expected to grow at a 30% rate. Cost of sales are stable 70% of sales revene, yielding a 30% gross profit. Company A sales are 15% for cash with the remaining 85% collected the following month. Inventory-on-hand is maintained at a level to support the following month's sales. Inventory is paid for at the time of receipt. Company A began the period with a cash balance of $65,000.

(a) For the current month and following three months, determine Company A's: (INCLUDE FORMULAS USED TO SOLVE PROBLEM)

- Revenue

- Cost of sales

- Gross profit

- Accounts receivable

- Inventory

- Cash collections

- Cash disbursements

(b) Is Company A gross profit increasing or declining?

(c) Is Company A cash flow increasing or declining?

(d) What is Company A cash balance at the end of the four-month period?

Cash Flow Budgeting - Company B is experiencing rapid growth due to the popularity of its recent clothing line release. Current sales of $250,000, which increased from $190,000 the previous month, are expected to grow at a 20% rate. Cost of sales are a stable 35% of sales revenue, yielding a 65% gross profit. Company B sales are 30% for cash with the remaining 70% collected the following month. Inventory-on-hand is maintained at a level to support the following two months' sales. Inventory is paid for at the time of receipt. Company B began the period with a cash balance fo $70,000.

(e) For the current month and following three months, determine Company B: (INCLUDE FORMULAS USED TO SOLVE PROBLEMS)

- Revenue

- Cost of sales

- Gross profit

- Accounts receivable

- Inventory

- Cash collections

- Cash disbursements

(f) Is Company B gross profit increasing or declining?

(g) Is Company B cash flow increasing or declining?

(h) What is Company B cash balance at the end of the four-month period?

Required: Prepare the proper ADJUSTING journal entries for the following events. Also, prepare a balance sheet after adjusting entries have been made.

The unadjusted trial balance for Tahini & Jam Inc. appears below:

                                        Tahini & Jam Inc.

                                   Unadjusted Trial Balance

                                       December 31, 2020

                                                                      Debit                     Credit

Cash                                                          $75,500

Accounts receivable                                       5,000

Prepaid rent                                                 1,000

Prepaid insurance                                         15,000

Supplies                                                        3,000

Equipment                                                   40,000

Accumulated depreciation-equipment                                          $4,000

Accounts payable                                                                       11,000

Bank loan payable                                                                     10,000

Unearned service revenue                                                           10,500

Common shares                                                                          48,250

Retained earnings                                                                       32,000

Dividends                                                      5,000

Service revenue                                                                          44,600

Salary expense                                               7,200

Utilities expense                                            1,200

Rent expense                                                 5,250

Advertising expense                                        2,200              ________

                                                                $160,350                $160,350

Additional data is as follows. Record the adjusting entry below the information.

1. Unearned service revenue NOT YET earned at year end, $2,000.

Dr.

Cr.

2. Depreciation for the current year amounts to $4,500.

Dr

Cr.

3. Prepaid insurance consists of a policy purchased on January 1, 2020 for a 15 months coverage.

Dr.

Cr.

4. Supplies on hand/counted at year end amount to $1,200.

Dr.

Cr.

5. Accrued salaries on December 31, 2020, amount to $2,500.

Dr.

Cr.

6. The bank loan was received on March 1, 2020, and the annual interest rate was 12%.

Dr.

Cr.

7. Rent is $500/month, and January, 2021 rent is included in the trial balance amount.

Dr.

Cr.

8. Corporate income tax is 20% of net income before tax.

Dr.

Cr.

Prepare a balance sheet based on the unadjusted trial balance and the adjusting entries.

Record your answers below (in white).

                                        Tahini & Jam Inc.

                                           Balance Sheet

                                  (As at December 31, 2020)

Prepare balance sheet here.

                                        Tahini & Jam Inc.

                                        Income Statement

                                        (for the year ended

                                       December 31, 2020)

Prepare balance sheet here.

Below is an Unadjusted Trial Balance of Jasa Tading Bhd at 31 December 2019.

Additional information:

1. An unpaid salaries and wages as at 31 December 2019 is RM18,000.
2. A tenant of an office space has not yet pay a rental for December 2019 amounting RM3,000.
3. The company returned defect merchandise bought from supplier and was refunded RM3,500 in cash. The company use perpetual inventory system and this transaction has not yet been recorded.
4. The company received RM35,000 in cash from a customer on 30 December 2019 and recorded as sales revenue. However the company only managed to supply the merchandise on 3 January 2020.
5. Payment for a one-year insurance coverage was made on 1 July 2019.
6. Annual depreciation for building and equipment are based on straight line depreciation basis over a period of 50 years and 10 years respectively with no scrap value.
7. 30% of the notes payable is due next year. The note payable interest rate is 8% per annum.

REQUIRED:

1. Journalise the adjusting entries on 31 December 2019.

Santana Rey, owner of Business Solutions, decides to prepare a statement of cash flows for her business using the following financial data. BUSINESS SOLUTIONS Income Statement For Three Months Ended March 31, 2018 Computer services revenue $ 24,507 Net sales 18,193 Total revenue 42,700 Cost of goods sold $ 14,252 Depreciation expense—Office equipment 380 Depreciation expense—Computer equipment 1,180 Wages expense 2,950 Insurance expense 495 Rent expense 2,075 Computer supplies expense 1,285 Advertising expense 600 Mileage expense 250 Repairs expense—Computer 910 Total expenses 24,377 Net income $ 18,323 BUSINESS SOLUTIONS Comparative Balance Sheets December 31, 2017, and March 31, 2018 Mar. 31, 2018 Dec. 31, 2017 Assets Cash $ 75,517 $ 55,302 Accounts receivable 24,167 4,968 Inventory 674 0 Computer supplies 2,005 560 Prepaid insurance 1,080 1,625 Prepaid rent 755 755 Total current assets 104,198 63,210 Office equipment 7,200 7,200 Accumulated depreciation—Office equipment (760 ) (380 ) Computer equipment 19,500 19,500 Accumulated depreciation—Computer equipment (2,360 ) (1,180 ) Total assets $ 127,778 $ 88,350 Liabilities and Equity Accounts payable $ 0 $ 1,200 Wages payable 895 590 Unearned computer service revenue 0 2,200 Total current liabilities 895 3,990 Equity Common stock 106,000 77,000 Retained earnings 20,883 7,360 Total liabilities and equity $ 127,778 $ 88,350 Required: Prepare a statement of cash flows for Business Solutions using the indirect method for the three months ended March 31, 2018. Owner Santana Rey contributed $29,000 to the business in exchange for additional stock in the first quarter of 2018 and has received $4,800 in cash dividends.

This lab assignment will correspond to Elasticities and Secondary Axis Graphs. There are two lab exercises listed below. Please complete this assignment in one Excel workbook in separate sheets for each exercise. You may work with one other individual (no more than two people per team) or by yourself. In Blackboard, open Lab3_Workbook. This will become the Lab Set that you turn in. Exercise 1. Taco Del Mar has completed a study of weekly demand for its tacos in Washington State’s regional markets. The study produced the following demand function: Q = 800 – 1,500P + 0.6A + 80Pop + 500Pc where Q is the number of tacos sold per store per store per week; A is the level of local advertising expenditure in dollars; Pop is the local population in thousands; and Pc is the average taco price of local competitors. For the typical Taco Del Mar outlet, P = $2.50, A = $6,000, Pop = 50, and Pc = $2.25 Open the Exercise 1 worksheet and program the elasticity worksheet (using the appropriate formulas) to answer each of the following:

a) Estimate the weekly revenue in dollars for the typical Taco Del Mar (given the above information).

b) What is the own price elasticity for Taco Del Mar tacos under typical conditions?

c) Should Taco Del Mar raise its taco prices? Discuss why or why not.

d) Using Excel, calculate the marginal revenue if Taco Del Mar increases its taco prices from the typical level. Hint: use a formula for marginal revenue and evaluate it at the “typical” price. e) Calculate the advertising elasticity for Taco Del Mar tacos.

f) Use the advertising elasticity to predict the change in Q (as opposed to the % change in Q) resulting from a 1% increase in advertising expense, holding all other factors constant.

g) Calculate the current cross price elasticity of local taco competitors.

h) Are the competitor tacos complements or substitutes? Explain why.

A: Prepare a balance sheet at May 31. (List Assets in order of liquidity. List Property, plant and equipment in order of land, buildings and equipment. Round answers to 0 decimal places, e.g. 5,275.)

B: Prepare an income statement for the month of May 31. (Round answers to 0 decimal places, e.g. 5,275.)

The Skyline Motel opened for business on May 1, 2017. Its trial balance before adjustment on May 31 is as follows.

In addition to those accounts listed on the trial balance, the chart of accounts for Skyline Motel also contains the following accounts and account numbers: No. 142 Accumulated Depreciation—Buildings, No. 150 Accumulated Depreciation—Equipment, No. 212 Salaries and Wages Payable, No. 230 Interest Payable, No. 619 Depreciation Expense, No. 631 Supplies Expense, No. 718 Interest Expense, and No. 722 Insurance Expense.

Other data:

1. Every tax bill which becomes law must comply with:

A. Treasury department policy
B. Presidential economic and social policy
B. The U.S. constitution
D. None of the above

2. In general, the answer to all tax questions or issues must be traced to:

A. A tax textbook
B. The Internal Revenue Code
C. A supreme Court decision
D. And IRS Letter Ruling

3. Administrative sources of the tax law, such as IRS regulations, revenue rulings and revenue procedures

A. Do not have the force of law because they are the opinions of the secretary of treasury
B. Are official interpretations of the tax law made by the department of the treasury and the IRS
C. All of the above
D. Are generally drafted by the supreme court

4. Decisions of federal court on cases and controversies involving the application or interpretation of tax law are known as

A. Administrative authority
B. Judicial authority
C. Legislative authority
D. None of the above

5. A regular tax court case is appealed to:

A. The court of appeals for the circuit in which the taxpayer resides
B. The circuit court of appeals with the most favorable precedent
C. None of the above
D. The court of appeals for the federal circuit

6. Pursuant to the Golden Rule

A. The tax court must follow decisions of the court of appeals for the circuit in which the taxpayer’s appeal may be filed
B. None of the above
C. Two of the above
D. The tax court must follow all circuit court of appeals decisions
E. The tax court may deposit its own interpretation of the tax law, if the tax payer’s circuit court has not ruled on the matter.

7. A private letter ruling

A. Is issued in response to a question that arises during an audit
B. Is a response to a specific taxpayer’s request for an official IRS interpretation of a tax law provision to that taxpayer’s given fact situation
C. None of the above
D. Is a district director’s response to a taxpayer’s query regarding the tax consequences of a specific transaction or event

The problem to be resolved:

Baltic Supplies Unadjusted Trial Balance as at December 31^st, 2018 is as follows:

The following additional information was made available at December 31, 2018

1. Unearned sales revenue, still NOT earned at December 31, 2018 amounted $65,500.
2. The prepaid insurance of $840,000 was paid on July 1, 2018 for 8-months to February 2019.
3. The Building and Equipment has an estimated life of ten (10) years and is being depreciated on the double declining balance method of depreciation, down to a residual value of $10,000.
4. Accrued travelling expense amounted to $8,800 at December 31, 2018.
5. A physical count of inventory at December 31, 2018, reveals $485,000 worth of inventory on hand.

1. Prepare the necessary adjusting entries on December 31, 2018.
2. Prepare the company adjusted trial balance as at December 31, 2018
3. Prepare the company’s Multiple-step Income Statement for the year ended December 31, 2018.
4. Prepare the company’s Statement of Owner’s Equity for the year ended December 31, 2018. Prepare the company’s classified Balance Sheet at December 31, 2018.
5. Prepare the company’s classified Balance Sheet at December 31, 2018.