Gama-Smith, a pharmaceutical company, develops new drugs for COVID-19 with other pharmaceutical companies that have the appropriate production facilities.

When Gama-Smith acquires a stake in a development project, it makes an initial payment to the other pharmaceutical company. It then makes a series of further stage payments until the drug development is complete and it has been approved by the relevant authorities. In the financial statements for the year ended 30 June 2019, Gama-Smith has treated the different stakes in the development projects as separate intangible assets because of the anticipated future economic benefits related to Gama-Smith’s ownership of the drug rights. However, in the year to 30 June 2020, the directors of Gama-Smith decided that all such intangible assets were to be expensed as research and development costs as they were unsure as to whether the payments should have been initially recognised as intangible assets. This write off was to be treated as a change in an accounting estimate

a) Explain the difference between ‘research’ and ‘development’ in the context of AASB 138 Intangible Assets without examples

b) Discuss the implications for Gama-Smith’s financial statements for both the years ended 30 June 2019 and 2020 if the recognition criteria in AASB 138 for an intangible asset were met as regards the stakes in the development projects above. Your answer should also briefly consider the implications if the recognition criteria were not met.

The Welding Department of Concord Company has the following production and manufacturing cost data for February 2020. All materials are added at the beginning of the process.

Prepare a production cost report for the Welding Department for the month of February. (Round unit costs to 2 decimal places, e.g. 2.25 and all other answers to 0 decimal places, e.g. 1,225.)

The Welding Department of Vaughn Company has the following production and manufacturing cost data for February 2020. All materials are added at the beginning of the process.

Prepare a production cost report for the Welding Department for the month of February. (Round unit costs to 2 decimal places, e.g. 2.25 and all other answers to 0 decimal places, e.g. 1,225.)

The Welding Department of Swifty Company has the following production and manufacturing cost data for February 2020. All materials are added at the beginning of the process.

Prepare a production cost report for the Welding Department for the month of February. (Round unit costs to 2 decimal places, e.g. 2.25 and all other answers to 0 decimal places, e.g. 1,225.)

Company A started at the beginning of 2019.
They entered into a lease with Jan 1st as both inception and commencement date
The Lease term is as below
- 5 yr non-cancellable
- 5% interest rate
- equal payment of $22916.51 at the end of each year
- $1,000 bargaining purchase option at the end of lease term
The useful life of this asset is 6 years with 0 residual value

Tax rate 25%, 30% and 35% each of the year

Earnings before interest, amortization and taxes for each year
2019         $123,456
2020         $234,567
2021         $345,678

Required:
a) Prepare an amortization table for the lease
b) Record all related Journal entries
c) Complete the balance sheet
d) If instead of lease, company A pays $6,000/year rental to use the same equipment
what impact would this make?

The Welding Department of Healthy Company has the following production and manufacturing cost data for February 2020. All materials are added at the beginning of the process.

Prepare a production cost report for the Welding Department for the month of February. (Round unit costs to 2 decimal places, e.g. 2.25 and all other answers to 0 decimal places, e.g. 1,225.)

Create Journal Entries as needed for the following:

ABC Company is completing the accounting process for its first year ended December 31, 2017. The transactions during 2017 have been journalized and posted. The following data are available to determine adjusting journal entries.

a. The unadjusted balance in Supplies was $855 consisting of the beginning balance of $600 and purchases of $255. The total usage tracking sheet shows $681 in usage and the final on-hand inventory total is $172.

b. There were 15 employees earning $120 per day that had 3 days of unpaid wages as of 12/31/2017.

c. ABC Company started renting a portion of its warehouse for $550 per month on 4/15/2017. 10 months were paid up front and the $5500 payment was credited to Deferred Revenue.

d. ABC purchased a new refrigerator unil on 6/15/2017 for $10,000. The annual depreciation for this until is calculated to be $1200 although no entry has been recorded yet.

e. ABC provided catering services to the local college for graduation services in December. The college had not paid the for the catering work completed amounting to $1200. Collection is expected in January 2020.

f. ABC renewed their General Liablity insurace on 5/1/2020 for a 24 month period costing $3600. The unadjusted balance in the was $3000. A journal entry was posted on Sept 30, 2017 expensing the used portion as of that date.

The Welding Department of Healthy Company has the following production and manufacturing cost data for February 2020. All materials are added at the beginning of the process.

Prepare a production cost report for the Welding Department for the month of February. (Round unit costs to 2 decimal places, e.g. 2.25 and all other answers to 0 decimal places, e.g. 1,225.)

The Welding Department of Healthy Company has the following production and manufacturing cost data for February 2020. All materials are added at the beginning of the process.

Prepare a production cost report for the Welding Department for the month of February. (Round unit costs to 2 decimal places, e.g. 2.25 and all other answers to 0 decimal places, e.g. 1,225.)