The following unadjusted trial balance was taken from the books of Sela Corporation at the end of its fiscal year on June 30, 2020. Sela Corporation offers accounting professional services to clients.
Account Debit Credit
Cash $30,000
Accounts Receivable 50,000
Notes Payable $24,000
Allowance for Doubtful Accounts 1,000
Supplies 34,000
Prepaid Insurance 20,000
Equipment, cost 200,000
Accumulated Depreciation--Equip. 25,000
Income Tax Payable 10,800
Common Stock 44,200
Retained Earnings 7/1/2019 50,000
Service Revenue 276,000
Unearned Service Revenue 5,000
Utilities expense 30,000
Salaries and Wages Expense 54,000
Rent Expense 18,000
Totals $436,000 $436,000
At year end, the following items have either not yet been recorded or not recorded properly.
a. Insurance expired during the year, $2,000
b. Estimated bad debts for the year $900
c. Depreciation on equipment, 5% per year on original cost.
d. The note payable is a 90-day, 3% APR. The note was given to the bank on May 31, 2020 (assume 360 days in a year).
e. Rent paid in advance at June 30, 2020, $5,000 (originally charged to rent expense).
f. Accrued salaries and wages at June 30, 2020, $8,200
g. Of the unearned service revenue, $2,400 was earned on June 30, 2020.
h. Tax returns service for $3,500 was provided to a client but the client was not billed by June 30, 2020.
i. An inventory count on June 30, 2020 showed $4,000 of supplies on hand.
What is the correct journal entry for adjustment e above?
Select one:
a. Debit prepaid rent $5,000; and credit rent expense $5,000
b. Debit cash $5,000; and credit prepaid rent $5,000
c. Debit rent expense $5,000; and credit prepaid rent $5,000
d.
Debit rent expense $5,000; and credit cash $5,000
In: Accounting
Steven Black and Christopher Green are seeking funds to support the programmed growth of their deluxe Hot Dog menu-restricted restaurant. First year (2019) Sales were $705,000. Sales are projected to increase to $1,320,000 in 2020. The business operating financial model indicates that each hot dog “meal” will sell for $3; and the variable cost of producing the “meal” (CGS) will be $1.50. The company needed $400,000 in assets to support its 2019 operations and expects to need $100,000 MORE (a total of $ 500,000) to support projected 2020 Sales.
2019 2020 (projected)
Sales $ 705,000 _________
COGS (Meals x CGS) 352,500 __________
Gross Profit 352,500 ________
Fixed Operating Costs (ignore taxes) 200,000 __________
Net Profit $152,500 $ ______
Prepare (fill in) the 2020 projected Income Statement above.
Calculate the company’s Return on Assets (ROA), its asset intensity (asset turnover ratio), and its Gross Profit and Net Profit Ratios for each year
2019 2020
Return on Assets __________ ____________
Asset Turnover ____________ ________________
Gross Profit Margin _______________ _________________________
Net Profit Margin ______________ _____________________
Given the 2019 calculations above, and the 2020 projections, use the VOS screening model standards below for profitability and pricing to evaluate the attractiveness of an investment in Steven and Christopher’s business.
High Average Low
Gross Margin >50% 10%--50% <20%
AT margin >20% 10%--20% <10%
Asset Intensity 3.0+ Turnover 1.0—3.0 Turnover <1.0 Turnover
Return on Assets >25% 10%--25% <10%
COMMENTS/EVALUATION (You should include comments about what the company could do to make the investment more attractive to investors)
Margins:
Use of Assets:
How would your EVALUATION change if the 2019 Asset level will support Annual Sales growth of 50% per year in 2020? (That means the company had excess capacity in 2019 and more assets would not be required to support shortterm projected growth.)
PLEASE HELP ME. THANK YOU.
In: Finance
Lala Corporation produces Greek yogurts that pass through three departments – Fermentation Department (Department I), Mixing Department (Department II), and Packaging Department (Department III). The production process in the Mixing Department requires the input of two main types of ingredients. One is the basic ingredients and the other one is the special ingredients. 100% of the basic ingredients are added at the beginning of the process. For the special ingredients, they are added gradually. 30% of these special ingredients are added at the beginning of the process, 50% are added midway through the process and the remainder of the special ingredients are added at the three-quarter way through the process. The following information was available concerning the operation of the Mixing Department for the month of October 2020. Beginning work-in process (WIP) (1 October 2020): 2,500 units were 40% completed with respect to conversion costs (CC). Costs pertaining to the beginning WIP as at 1 October 2020 were: Department I $10,000, Basic Ingredients $30,000, Special Ingredients $15,000 and CC $10,000. Units started in the month were 15,000 units. Costs added to production during the month of October 2020 were: Department I $60,000, Basic Ingredients $188,750, Special Ingredients $203,400, and CC $154,500. Ending WIP as at 31 October 2020 were 3,500 units and 70% completed with respect to CC. Required:
a) Use of the weighted average (WA) process costing method, calculate 1) the units completed in October 2020. 2) the equivalent units for the Special Ingredients. 3) the total costs per equivalent unit. 4) the total costs of completed products transferred to the Packaging Department.
b) Use the first-in-first-out (FIFO) process costing method, calculate 5) the units completed in October 2020. 6) the equivalent units for the Special Ingredients. 7) the total costs per equivalent unit. viii) the total costs of completed products transferred to the Packaging Department.
In: Accounting
Question 2: Porter, a public limited company, is the parent of a listed group of companies which have a year end of 30 April 2020. Porter’s functional currency is the pound (£) and presents its individual and consolidated financial statements in £. The statements of financial position for two entities as at 30 April 2020 are presented below:
|
Porter |
Belobe |
|
|
£000 |
C'000 |
|
|
Non-current assets |
||
|
Property, plant and equipment |
15,025 |
7,234 |
|
Investment in Belobe at cost |
9,150 |
|
|
24,175 |
7,234 |
|
|
Current assets |
4,000 |
4,266 |
|
Total assets |
28,175 |
11,500 |
|
Equity and liabilities |
||
|
Share capital |
4,500 |
2,150 |
|
Retained reserves |
19,175 |
6,730 |
|
23,675 |
8,880 |
|
|
Current liabilities |
4,500 |
2,620 |
|
Total equity and liabilities |
28,175 |
11,500 |
Additional information
1. Porter acquired 75% of Belobe on 1 May 2019 for £9,150,000 when the retained reserves of Belobe were 3,155,000 Crowns. The functional currency of Belobe is Crowns.
2. The group policy is to value non-controlling interest at the proportionate share of the fair value of the net assets at acquisition.
3. Belobe made a profit of 3,575,000 Crowns for the year ended 30 April 2020.
4. The exchange rates between the £ and Crowns are as follows:
1 May 2019 £1: 0.69 Crowns
30 April 2020 £1: 0.62 Crowns
Average rate for the year ended 30 April 2020: £1: 0.64 Crowns
YOU ARE REQUIRED TO:
(a) Prepare the consolidated statement of financial position for the Porter group as at 30 April 2020.
(b) Prepare a reconciliation of the consolidated retained reserves figure showing the exchange gains and losses.
(c) Explain your calculation of goodwill and the treatment of exchange differences on goodwill for the year ended 30 April 2020. Your answer should refer to the relevant International Financial Reporting Standards (IAS/IFRS).(maximum word count 200 words) TOTAL 50 MARKS
In: Accounting
Accounting Cycle Review 11-01 a,b, c1-c3
Morgan Company’s balance sheet at December 31, 2019, is presented below.
|
MORGAN COMPANY |
||||||
| Cash | $30,000 | Accounts Payable | $12,250 | |||
| Inventory | 30,500 | Interest Payable | 300 | |||
| Prepaid Insurance | 6,084 | Notes Payable | 60,000 | |||
| Equipment | 38,520 | Owner’s Capital | 32,554 | |||
| $105,104 | $105,104 | |||||
During January 2020, the following transactions occurred. (Morgan
Company uses the perpetual inventory system.)
| 1. | Morgan paid $300 interest on the note payable on January 1, 2020. The note is due December 31, 2021. | |
| 2. | Morgan purchased $240,000 of inventory on account. | |
| 3. | Morgan sold for $489,000 cash, inventory which cost $263,000. Morgan also collected $31,785 in sales taxes. | |
| 4. | Morgan paid $236,000 in accounts payable. | |
| 5. | Morgan paid $16,500 in sales taxes to the state. | |
| 6. | Paid other operating expenses of $20,500. | |
| 7. | On January 31, 2020, the payroll for the month consists of salaries and wages of $58,000. All salaries and wages are subject to 7.65% FICA taxes. A total of $8,700 federal income taxes are withheld. The salaries and wages are paid on February 1. |
Adjustment data:
| 8. | Interest expense of $300 has been incurred on the notes payable. | |
| 9. | The insurance for the year 2020 was prepaid on December 31, 2019. | |
| 10. | The equipment was acquired on December 31, 2019, and will be depreciated on a straight-line basis over 5 years with a $3,060 salvage value. | |
| 11. | Employer’s payroll taxes include 7.65% FICA taxes, a 5.4% state unemployment tax, and an 0.8% federal unemployment tax. |
A)Prepare journal entries for the transactions listed above and the adjusting entries.
B)Prepare an adjusted trial balance at January 31, 2020.
C)Prepare an income statement.
D)Prepare an owner’s equity statement for the month ending January 31, 2020.
E)Prepare a classified balance sheet as of January 31, 2020
In: Accounting
On 11 August 2020, Vanya Ho entered into a contract with Diego Toh to renovate her school, The Umbrella Learning Centre and to set up the internet system for the school’s online lessons starting in October. They agreed to the total sum of $100,000 with a 10% deposit of $10,000 to be paid on the signing of the contract. $20,0000 was to be paid upon the design being approved by Vanya Ho. The balance of $70,000 was to be paid on the completion of the renovation works. The contract provided that Diego Toh was to complete the renovation works and handover the school to Vanya Ho not later than 20 September 2020.
The design was approved by Vanya Ho on 18 August 2020. Diego Toh proceeded with the renovation which was completed on 19 September 2020. Vanya inspected the renovation work on 20 September 2020. She was not pleased with the internet system when she tested the wifi connection. The wifi signals were weak and created issues for running the online lessons. Diego Toh explained that his electricians have gone back to Malaysia and would only be back early 2021. He insisted that the renovation works including the setting up of the internet system were in accordance with the design as approved by Vanya.
On 21 September, Vanya Ho called an independent electrician, Klaus Soh, to inspect and advise on internet system. Klaus Soh explained that the internet system was poorly set-up. He quoted $2,000 to rectify the defects which could be completed by 25 September 2020.
On 22 September, Diego Toh contacted Vanya Ho and demanded payment of the balance amount of $70,000. Vanya Ho refused to pay the balance and insisted that Diego Toh rectify the internet system by 26 September 2020.
Advise Diego Toh on the following:
Diego Toh would like to claim the full amount of $70,000. Discuss the LEGAL PRINCIPLES concerning the performance of the contract, APPLY the legal principles, and CONCLUDE on whether Diego Toh could discharge the contract with Vanya Ho and claim the full amount of $70,000.
In: Economics
On 11 August 2020, Vanya Ho entered into a contract with Diego Toh to renovate her school, The Umbrella Learning Centre and to set up the internet system for the school’s online lessons starting in October. They agreed to the total sum of $100,000 with a 10% deposit of $10,000 to be paid on the signing of the contract. $20,0000 was to be paid upon the design being approved by Vanya Ho. The balance of $70,000 was to be paid on the completion of the renovation works. The contract provided that Diego Toh was to complete the renovation works and handover the school to Vanya Ho not later than 20 September 2020. The design was approved by Vanya Ho on 18 August 2020. Diego Toh proceeded with the renovation which was completed on 19 September 2020. Vanya inspected the renovation work on 20 September 2020. She was not pleased with the internet system when she tested the wifi connection. The wifi signals were weak and created issues for running the online lessons. Diego Toh explained that his electricians have gone back to Malaysia and would only be back early 2021. He insisted that the renovation works including the setting up of the internet system were in accordance with the design as approved by Vanya. On 21 September, Vanya Ho called an independent electrician, Klaus Soh, to inspect and advise on internet system. Klaus Soh explained that the internet system was poorly set-up. He quoted $2,000 to rectify the defects which could be completed by 25 September 2020. On 22 September, Diego Toh contacted Vanya Ho and demanded payment of the balance amount of $70,000. Vanya Ho refused to pay the balance and insisted that Diego Toh rectify the internet system by 26 September 2020.
(b) Diego Toh would like to claim the full amount of $70,000. Discuss the LEGAL PRINCIPLES concerning the performance of the contract, APPLY the legal principles, and CONCLUDE on whether Diego Toh could discharge the contract with Vanya Ho and claim the full amount of $70,000.
In: Accounting
Purple Company has $200,000 in net income for 2018 before deducting any compensation or other payment to its sole owner, Kirsten. Kirsten is single and she claims the $12,000 standard deduction for 2018. Purple Company is Kirsten's only source of income. Ignoring any employment tax considerations, compute Kirsten's after-tax income for each of the following situations. Click here to access the 2018 individual tax rate schedule to use for this problem. Assume the corporate tax rate is 21%. When required, carryout intermediate tax computations to the nearest cent and then round your final tax liability to the nearest dollar. a.
If Purple Company is a proprietorship and Kirsten withdraws $50,000 from the business during the year; Kirsten claims a $40,000 deduction for qualified business income ($200,000 × 20%). Kirsten's taxable income and after tax income are?
Purple Company is a C corporation and the corporation pays out all of its after-tax income as a dividend to Kirsten. Note: Individual taxpayers received preferential treatment regarding the taxation of qualified dividends (0%,15%,20%). For single taxpayers, the 0 percent rate applies to the first $38,600 of taxable income. Purple Corporation's after-tax income and Kristen's after tax income are?
Purple Company is a C corporation and the corporation pays Kirsten a salary of $158,000. Kirsten's after-tax income is
In: Accounting
In: Economics
areaCircle() – should accept the radius of the circle from the main function, calculate the area, and then print the area of the circle.
In: Computer Science