Classical Ltd. Began work in 2020 on a contract for $ 1,250,000. Other data are:

         2020                           2021

         Costs incurred to date......................................................................      $ 540,000                 $ 875,000

         Estimated costs to complete as of December 31.................         360,000 100,000

         Billings to date.....................................................................................         420,000 950,000

         Collections to date.............................................................................         300,000 700,000

Classical uses the percentage-of-completion method. Gross profit recognized in 2020 was $210,000 (Revenue $750,000; expense $540,000). The 2020 opening balance on LT Contract Asset/Liab is $330,000 DR.

Required:

(a) Calculate gross profit to be recognized in 2021.

(b) What amounts will be reported on the Statement of Financial Position in 2021?

(c) If the estimated costs to complete were $300,000 at the end of 2021, how would your response to part (a) change?

The details of the January 1, 2020 purchase of property, plant & equipment by Concord Industries is as follows:

During 2020 Concord produced 150,000 units using its machinery. Calculate the 2020 depreciation for each of the property, plant & equipment items. (Round depreciation per unit to 2 decimal places, e.g. 7.25 and final answers to 0 decimal places, e.g. 5,125.)

Raleigh Department Store uses the conventional retail method for the year ended December 31, 2019. Available information follows:

1. The inventory at January 1, 2019, had a retail value of $50,000 and a cost of $36,200 based on the conventional retail method.
2. Transactions during 2019 were as follows:

Sales to employees are recorded net of discounts.

3. The retail value of the December 31, 2020, inventory was $104,325, the cost-to-retail percentage for 2020 under the LIFO retail method was 70%, and the appropriate price index was 107% of the January 1, 2020, price level.
4. The retail value of the December 31, 2021, inventory was $53,350, the cost-to-retail percentage for 2021 under the LIFO retail method was 69%, and the appropriate price index was 110% of the January 1, 2020, price level.

Required:
3. Assume Raleigh Department Store adopts the dollar-value LIFO retail method on January 1, 2020. Estimating ending inventory for 2020 and 2021.

Raleigh Department Store uses the conventional retail method for the year ended December 31, 2019. Available information follows:

1. The inventory at January 1, 2019, had a retail value of $45,000 and a cost of $27,500 based on the conventional retail method.
2. Transactions during 2019 were as follows:
   

Sales to employees are recorded net of discounts.

3. The retail value of the December 31, 2020, inventory was $56,100, the cost-to-retail percentage for 2020 under the LIFO retail method was 62%, and the appropriate price index was 102% of the January 1, 2020, price level.
4. The retail value of the December 31, 2021, inventory was $48,300, the cost-to-retail percentage for 2021 under the LIFO retail method was 61%, and the appropriate price index was 105% of the January 1, 2020, price level.

Required:
3. Assume Raleigh Department Store adopts the dollar-value LIFO retail method on January 1, 2020. Estimate ending inventory for 2020 and 2021.

At 1 July 2019, the balance in the Retained Earnings account of Melbourne Ltd was $3 500 000. The company’s share capital at the 1 July 2019 comprises 400 000 6% preference shares issued for $2.00 per share and 1 400 000 ordinary shares fully paid at $1 per share.
During the year ended 30 June 2020, the following events occurred:
1. On 1 February 2020, the directors declared and paid an interim ordinary dividend of $124 000 from retained earnings.
2. On 14 March 2020, the directors issued 20 000 ordinary bonus shares fully paid at $1.40 per share from retained earnings.
3. Profit for the year was $3 300 000.
4. On 30 June 2020, the directors declared a final ordinary dividend of $480 000. A dividend was also declared on the preference shares.
5. On 30 June 2020, the directors resolved to transfer $1 200 000 to a general reserve from retained earnings, and to transfer $2 000 000 from a previously created plant maintenance reserve back to retained earnings.

Required:

Prepare the journal entries for Twister Ltd for the years ending 30 June 2019 and 2020.

Raleigh Department Store uses the conventional retail method for the year ended December 31, 2019. Available information follows:

1. The inventory at January 1, 2019, had a retail value of $35,000 and a cost of $29,050 based on the conventional retail method.
2. Transactions during 2019 were as follows:

Sales to employees are recorded net of discounts.

3. The retail value of the December 31, 2020, inventory was $46,800, the cost-to-retail percentage for 2020 under the LIFO retail method was 80%, and the appropriate price index was 104% of the January 1, 2020, price level.
4. The retail value of the December 31, 2021, inventory was $40,660, the cost-to-retail percentage for 2021 under the LIFO retail method was 79%, and the appropriate price index was 107% of the January 1, 2020, price level.

Question: Assume Raleigh Department Store adopts the dollar-value LIFO retail method on January 1, 2020. Estimating ending inventory for 2020 and 2021.

The following trial balance was extracted from the books of Big Bamboo Limited on December 31, 2020               

Additional Information:

1.      Stock at December 31, 2020 $80,000

2.      Payment of $10,100 for insurance relates to the first quarter of 2021.

3.      Wages owing $4,800

4.      Provision for bad debt is to be increased to $1,500

5.      Depreciation on fixed assets:

-          Motor vehicles 10% on cost

-          Buildings 15 % on the reducing balance method

Required:

Prepare for Big Bamboo Limited:

(a)    An income statement for the year ended December 31, 2020

(b)   A statement of financial position as at December 31, 2020

The following trial balance was extracted from the books of Big Bamboo Limited on December 31, 2020               

Additional Information:

1.      Stock at December 31, 2020 $80,000

2.      Payment of $10,100 for insurance relates to the first quarter of 2021.

3.      Wages owing $4,800

4.      Provision for bad debt is to be increased to $1,500

5.      Depreciation on fixed assets:

-          Motor vehicles 10% on cost

-          Buildings 15 % on the reducing balance method

Required:

Prepare for Big Bamboo Limited:

(a)    An income statement for the year ended December 31, 2020                      

(b)   A statement of financial position as at December 31, 2020                          

Cash is a monetary and financial asset. It is the most liquid finance asset; it is also the standard medium of exchange for most business transactions. Cash is usually classified as a current account, however there are circumstances in which cash is classified as a non-current asset. Required: With the aid of a suitable example, explain when can be classified as a non-current asset.

B. Study the following items related to transactions during the year to September 30, 2020 for Thompson’s Tours’ Inc. All transactions are reported on the financial statements in $XCD.

I. A bank overdraft of $200,000 in a chequing account at St Kitts National Bank.

II. A saving account with a balance of $400,000 at Open Campus Bank and chequing account with an overdraft of $100,000 at the same bank repayable on demand.

III. The Operation Manager was given a salary advance of $2,000 on August 24, 2020 and this amount was deducted from his October salary.

IV. CAD$3,045 on hand from tips up to March 31, 2020, its pre-COVID operations when the exchange rate was CAD$1 = $2.01 XCD. On September 30, 2020, the exchange rate was CAD$1 = $1.95 XCD

V. Special Edition Independence postage stamps on hand valued at $200.

VI. Cash holdings of US$100,000, the exchange rate on September 30, 2020 is $2.70.

VII. Petty cash on hand valued at $1,500.

VIII. A cheque in the amount of $5,000 and dated October 23, 2020 was received from a customer on September 27, 2020.

IX. Short term 60 days treasury bill valued at $35,000.

X. Thompson’s Tours’ Inc. invested $1,000,000 in a money market fund with Mona Campus Bank on July 10, 2020 which will mature on October 9, 2020.

Required:

a. List all items from above that would NOT be classified as cash or cash equivalents in the current asset section of Thompson’s Tours’ Inc. Statement of Financial Position as at September 30, 2020? State how each of these items would then be classified in the financials.

b) . Using the information in B above, calculate the cash and cash equivalent value that would appear in Thompson’s Tours’ Inc. Statement of Financial Position on September 30,2020