Balance sheet

December 31

Assets 2007 2006

Cash $25,000 $40,000

Short term investments 15,000 60,000

Accounts receivable 50,000 30,000

Inventory 50,000 70,000

Property, plant and equipment (net) 160,000 200,000

Total assets $300,000 $400,000

Liabilities and stockholders equity

Accounts payable $20,000 $30,000

Short term notes payable 40,000 90,000

Bonds payable 80,000 160,000

Common stock 60,000 45,000

Retained earnings 100,000 75,000

Total liabilities and stockholders equity $300,000 $400,000

Income statement (for the year ended December 31, 2007)

Net sales $360,000

Cost of goods sold 184,000

Gross profit 176,000

Expenses

Selling expenses 30,000

Administrative expenses 59,000

Total expenses 89,000

Income before interest expense and taxes 87,000

Interest expense 12,000

Income before income taxes 75,000

Income tax expense 30,000

Net income $45,000

Additional information

1. 120,000 shares were outstanding in 2007:90,000 shares were outstanding in 2006
2. Market value of common stock on December 31, 2007 was $12 per share.

1. Working capital
2. Current Ratio
3. Quick ratio
4. Cash ratio

Consider the unadjusted trial balance of London, Inc., at December 31, 2007, and the related month-end adjustment data. London, Inc., December 31, 2007 Unadjusted trial balance Accounts Dr. Cr. Cash 19,200 Account receivable 11,600 Supplies 2,200 Prepaid rent 2,400 Equipment 81,000 Accumulated depreciation- equipment 4,000 Accounts payable 3,700 Unearned service revenue 1,500 Tax payable 2,000 Salary payable 5,300 Share capital 60,000 Retained earning 28,500 Dividend 5,000 Service revenue 34,000 Salary expenses 2,700 Depreciation expenses 1,800 Supplies expenses 9,600 Rent expenses 3,500 Total 139,000 139,000 Adjustment data on December 31, 20X7: 1. Unearned service revenue that has been earned is 70%. 2. The company pays employees each Friday. The amount of the weekly payroll is $10,000 for a five-day work week. The current accounting period ends on Tuesday. 3. Supplies on hand, $1,300 4. Payment for rent during the year, $2,000. Prepaid rent ending $3,000. 5. Service revenue of $6,000 has been earned but not yet received. 6. The equipment was purchased on July 1, 20X7. The equipment’s useful life is five years. There is a residual value of $3,000. Record the depreciation. Required: 1- Prepare adjusting entries for these transactions at December 31, 20X7, for each situation. Consider each fact separately. Omit the explanation. 2- Prepare an income statement for the year ended Dec. 31, 20X7 (after updating the accounts)

The trial balance follows of the Larkspur, Inc. as at December 31. The books are closed annually on December 31.

Instructions: A)Enter the balances in ledger accounts.

B) From the trial balance and the information that follows, prepare annual adjusting entries.

C) Post annual adjusting entries to the ledger accounts: (Post entries in the order of journal entries presented in the previous part.)

I need this question answered assuming that Westgate Construction's contract with Santa Clara County does NOT qualify for revenue recongnition over time... In 2016, the Westgate Construction Company entered into a contract to construct a road for Santa Clara County for $10,000,000. The road was completed in 2018. Information related to the contract is as follows:

1. You are required to prepare the Sales price variance and Revenue sales quantity variance by taking any of your choice Saudi based company and suggest the suitable reasons for the variances. (3 Points)

Answer:

Playground Steel Factory is a leading manufacturer and supplier of Restaurant Seating, Tables & Other related Furniture, Indoor & Outdoor Playgrounds for Restaurants, Public & Private Parks, Public Houses, Hospitals, Schools and Furniture Seating for Shopping Centers, Sun Shades & Car Shades in the whole Kingdom of Saudi Arabia and Middle East Countries.

The Factory expected to sell 50,000 units from one of its products "Hospital seats" during 2018, the following is the planned sales and variable costs for 2018.

Sales (50,000 units)                      SR 3,000,000

Variable costs                                  1,750,000

During the year, a competitor came out with a similar hospital seats at a lower price. Management reacted by dropping its selling price for the hospital seat, but the actual sales dropped to 45,000 units at 55 SR per seat.

The cost accounting department prepare the sales price variance and revenue sales quantity variance.

Question 1) All else held constant, which of the following actions would increase the amount of cash on a company’s balance sheet?

a) The company buys new equipment on credit terms.

b) The company gives customers less time to pay their bills.

c) The company repurchases common stock.

d) The company pays a dividend.

e) None of the above.

Question 2) Which of the following items is not normally considered to be a current asset or current liability?

a) Accounts receivable.

b) Note payable due in 18 months.

c) Inventory.

d) Accounts payable.

e) None of the above.

A company produces three different type of chocolates. A, B, and C. The sales volume for A is at least 50 % of the total sales of all three chocolates. However, the company cannot sell more than 75 units of A per day. The three types of chocolate use one raw material, of which the maximum daily availability is 240 lb. The usage rates of the raw material are 2 lb per unit of A, 4 lb per unit of B, and 3 lb per unit of C. The unit prices for A, B, and C, are $20 $50 and $35, respectively.

a. Develop a mathematical model that determine the optimal product mix for the company.

b. Solve it using software and show the results.

c. If available raw material is increased by 120 lb, determine the change in total revenue using the result in question b above.

d. Determine the effect of increasing or decreasing the maximum demand for product A by 10 units.

The Sheldon Corporation began a consulting business specializing in on-site computer training on January 1, 2018. The following transactions took place during its first three months of operations.

Summary of Transactions

Jan. 1 Sold 5,000 shares of capital stock for a total of $500,000 cash.

Jan. 2 Paid the premium of $12,000 on a 24-month insurance policy on all assets.

Jan. 3 Purchased land and a building for a total of $350,000 cash. The land is valued at $50,000, while the building is valued at $300,000 and is expected to have a useful life of 30 years.

Jan. 10 Purchased a computer network system for $36,000 cash. The expected useful life is 6 years.

Jan. 15 Paid $2,400 cash for a phone system that should have a 3-year useful life.

Jan. 16 Paid cash to acquire equipment and furniture for business purposes at a cost of $12,000. The expected useful life is 4 years.

Jan. 19 Purchased office supplies for $1,250 cash. (Use the asset account “Office Supplies” for such purchases.)

Jan. 24 Paid cash of $10,000 for binders, manuals, and workbooks for use in Sheldon's client programs. Sheldon's policy is to initially record these materials as an asset (Program Supplies) and to then expense the materials used for a particular training program when the program is completed.

Jan. 30 Paid wages of $1,800 and salaries of $3,600 for work performed during January.

Feb. 14 Completed the first client program for a fee of $9,500. The customer paid $2,500 of the fee that day, with the remainder billed on account. Program supplies used on the project had originally cost Sheldon $1,500.

Feb. 15 Paid wages of $2,400 in cash.

Feb. 19 Paid utilities for the month of January of $1,050 in cash.

Feb. 23 Purchased on account 30 specialized manuals as program supplies for use in computer training for a total of $1,800.

Feb. 28 Borrowed $45,000 from the bank on a 2-year note. The interest rate on the note is 6% per year (or 0.5% per month).

Mar. 1 Paid wages of $3,600 and salaries of $6,000.

Mar. 1 Completed on-site computer training for two customers: JKL Products, Inc., and Watson Company. Billed JKL $11,000 on account. The fee for Watson was $9,200, half of which Watson paid in cash with the remainder on account. Program supplies used for the two customers totaled $4,600.

Mar. 4 Purchased additional program supplies on account for a total of $3,600.

Mar. 13 Collected $16,600 on account from credit customers.

Mar. 15 Completed first all-day computer workshop for walk-in customers. Sales totaled $4,250, all in cash. Program supplies used for the workshop originally cost Sheldon $1,850.

Mar. 16 Billed Coastal Corporation $7,500 for on-site training completed on March 16. Program supplies for the training originally cost Sheldon $2,500.

Mar. 16 Paid wages of $3,700.

Mar. 17 Purchased office supplies of $750 on account.

Mar. 21 Paid $3,200 to suppliers for materials previously purchased on account.

Mar. 23 Paid utilities for the month of February of $1,800 in cash.

Mar. 26 Received a $2,000 cash advance from Watson Company for additional computer training to begin April 1, 2018.

Mar. 29 Collected $6,250 on account from credit customers.

Mar. 31 Purchased $3,600 of program supplies for cash.

Additional Data Determined at March 31, 2018:

Unpaid and unrecorded wages and salaries totaled $2,700 and $8,500, respectively.

Service revenue unrecorded and unbilled at March 31 amounted to $9,300. Program supplies associated with these services originally cost Sheldon $2,800.

Office supplies on hand at March 31 totaled $450.

Sheldon uses straight-line depreciation on all depreciable assets and assumes the assets will have no value at the end of their estimated useful lives. A full month's depreciation is taken for the month of purchase, regardless of which day of the month the purchase is made. For example, depreciation expense for the three months ended March 31, 2018, on the phone system is $200 (i.e., $2,400/3 years x 3/12 of a year). Land is not considered depreciable. You may use a single account (Depreciation Expense) to record all of the depreciation expense for the depreciable assets. Also, you may use a single account (Accumulated Depreciation) to record the effect of depreciation on total assets.

Sheldon must record accrued interest for one month on the $45,000 bank loan.

Sheldon estimates utilities used during March amounted to $1,800, although the bill has not yet been received.

Remember insurance that has expired.

Required (round all amounts to the nearest dollar):

Record the necessary adjusting journal entries based on the "additional data" at March 31 in the general journal and then post these journal entries to the T- accounts.

The Sheldon Corporation began a consulting business specializing in on-site computer training on January 1, 2018. The following transactions took place during its first three months of operations.

Summary of Transactions

Jan. 1 Sold 5,000 shares of capital stock for a total of $500,000 cash.

Jan. 2 Paid the premium of $12,000 on a 24-month insurance policy on all assets.

Jan. 3 Purchased land and a building for a total of $350,000 cash. The land is valued at $50,000, while the building is valued at $300,000 and is expected to have a useful life of 30 years.

Jan. 10 Purchased a computer network system for $36,000 cash. The expected useful life is 6 years.

Jan. 15 Paid $2,400 cash for a phone system that should have a 3-year useful life.

Jan. 16 Paid cash to acquire equipment and furniture for business purposes at a cost of $12,000. The expected useful life is 4 years.

Jan. 19 Purchased office supplies for $1,250 cash. (Use the asset account “Office Supplies” for such purchases.)

Jan. 24 Paid cash of $10,000 for binders, manuals, and workbooks for use in Sheldon's client programs. Sheldon's policy is to initially record these materials as an asset (Program Supplies) and to then expense the materials used for a particular training program when the program is completed.

Jan. 30 Paid wages of $1,800 and salaries of $3,600 for work performed during January.

Feb. 14 Completed the first client program for a fee of $9,500. The customer paid $2,500 of the fee that day, with the remainder billed on account. Program supplies used on the project had originally cost Sheldon $1,500.

Feb. 15 Paid wages of $2,400 in cash.

Feb. 19 Paid utilities for the month of January of $1,050 in cash.

Feb. 23 Purchased on account 30 specialized manuals as program supplies for use in computer training for a total of $1,800.

Feb. 28 Borrowed $45,000 from the bank on a 2-year note. The interest rate on the note is 6% per year (or 0.5% per month).

Mar. 1 Paid wages of $3,600 and salaries of $6,000.

Mar. 1 Completed on-site computer training for two customers: JKL Products, Inc., and Watson Company. Billed JKL $11,000 on account. The fee for Watson was $9,200, half of which Watson paid in cash with the remainder on account. Program supplies used for the two customers totaled $4,600.

Mar. 4 Purchased additional program supplies on account for a total of $3,600.

Mar. 13 Collected $16,600 on account from credit customers.

Mar. 15 Completed first all-day computer workshop for walk-in customers. Sales totaled $4,250, all in cash. Program supplies used for the workshop originally cost Sheldon $1,850.

Mar. 16 Billed Coastal Corporation $7,500 for on-site training completed on March 16. Program supplies for the training originally cost Sheldon $2,500.

Mar. 16 Paid wages of $3,700.

Mar. 17 Purchased office supplies of $750 on account.

Mar. 21 Paid $3,200 to suppliers for materials previously purchased on account.

Mar. 23 Paid utilities for the month of February of $1,800 in cash.

Mar. 26 Received a $2,000 cash advance from Watson Company for additional computer training to begin April 1, 2018.

Mar. 29 Collected $6,250 on account from credit customers.

Mar. 31 Purchased $3,600 of program supplies for cash.

Additional Data Determined at March 31, 2018:

Unpaid and unrecorded wages and salaries totaled $2,700 and $8,500, respectively.

Service revenue unrecorded and unbilled at March 31 amounted to $9,300. Program supplies associated with these services originally cost Sheldon $2,800.

Office supplies on hand at March 31 totaled $450.

Sheldon uses straight-line depreciation on all depreciable assets and assumes the assets will have no value at the end of their estimated useful lives. A full month's depreciation is taken for the month of purchase, regardless of which day of the month the purchase is made. For example, depreciation expense for the three months ended March 31, 2018, on the phone system is $200 (i.e., $2,400/3 years x 3/12 of a year). Land is not considered depreciable. You may use a single account (Depreciation Expense) to record all of the depreciation expense for the depreciable assets. Also, you may use a single account (Accumulated Depreciation) to record the effect of depreciation on total assets.

Sheldon must record accrued interest for one month on the $45,000 bank loan.

Sheldon estimates utilities used during March amounted to $1,800, although the bill has not yet been received.

Remember insurance that has expired.

Required (round all amounts to the nearest dollar):

Prepare an unadjusted trial balance.