Mr. Chai sells various types of toys throughout Malaysia. Three of the accounts in the ledger of Mr. Chai indicated the following;

Balances at 1 January 2020:

(i)           Insurance paid in advance RM562

(ii)      Wages outstanding RM306

(iii)     Rent receivable, received in advance RM36

During 2020, Mr. Chai:

(i)           Paid for insurance RM1,019, by bank standing order

(ii)      Paid RM15,000 wages, in cash

(iii)     Received RM2,600 rent, by cheque, from the tenant

At 31 December 2020:

(i)           Insurance prepaid was RM345

(ii)      Wages accrued amounted to RM419

(iii)     Rent receivable in arrears was RM105

Required;

(a)      Prepare the prepaid insurance, accrued wages and rent receivable accounts for the year ended 31 December 2020.

(b)      Prepare the income statement extract showing clearly the amounts of insurance expense, wages expense and rent revenue for the year ended 31 December 2020.

(c)                 Explain the effects on the financial statements of accounting for:

               (i)           the expenses accrued at year end

               (ii)             the income received in advance at year end

(d)               Explain the purposes of accounting for:

              (i)           the expenses accrued at year end

              (ii)              the income received in advance at year end

On May 1, 2020, Spencer Industries purchased the machine for use in its production process. The cash price of this machine was $35,000, sales tax $2,200, insurance during shipping $80, shipping costs $150, installation and testing costs $70, and $100 of oil and lubricants to be used with the machinery during its first year of operations.

Instructions:

1. Prepare the journal entry to record its purchase on May 1, 2020.

2. Compute depreciation on December 31, 2020 under the methods bellow:

A. The straight-line method of depreciation, estimates the useful life of the machine is 4 years with a $5,000 residual value remaining at the end of that time period.

B. The declining-balance method, estimates the useful life of the machine is 4 years with a $5,000 residual value remaining at the end of that time period. The rate used is twice the straight-line rate.

C. The units-of-activity method, estimates that the useful life of the machine is 125,000 units. Actual usage is as follows: 2020, 28,000 units; 2021, 37,000 units; 2022, 42,000 units; and 2023, 18,000 units.

3. The adjusting entry to record annual depreciation using straight-line method on December 31, 2020.

Grape Inc. had the following balance sheet at December 31, 2019:

Grape INC. BALANCE SHEET DECEMBER 31, 2019

Cash $ 31,000

Accounts payable $ 61,000

Accounts receivable 56,800

Notes payable (long-term) 76,000

Investments 86,000

Common stock 200,000

Plant assets (net) 138,500

Retained earnings 41,300

Land 66,000

Total assets and Total Liabilities and Stockholders' Equity $378,300 $378,300

During 2020, the following occurred:

1. Grape liquidated its available-for-sale investment portfolio at a gain of $15,000.

2. A tract of land was purchased for $61,000 cash.

3. An additional $15,200 in common stock was issued at par.

4. Dividends totaling $41,000 were declared and paid to stockholders.

5. Net income for 2020 was $46,000, including $8,000 in depreciation expense.

6. Land was purchased through the issuance of $195,000 in additional notes payable.

7. At December 31, 2020, Cash was $68,000, Accounts Receivable was $84,000, and Accounts Payable was $72,000.

Instructions:

(a) Prepare the balance sheet as it would appear at December 31, 2020

(b) Prepare a statement of cash flows for the year 2020 for Grape. Prepare all in good form.

Write a function that takes the current date and corrects the number of days, if it's wrong. The function must return true if the date passed to it is a valid date and false, if not. The main function uses the returned value to either print "Date validated", if a valid date was entered or "Invalid date entered. Changed to ", followed by the modified date.

For example: if given 11/31/2020, it will produce 12/1/2020. If given 2/29/2021, it will make it 3/1/2021. But, if 11/29/2020 is entered, it will not change it.

To check the date, the function uses the fact that months 4, 6, 9, 11 have 30 days, month 2 has 28 days in non-leap years and 29 in leap years and the remaining months have 31 days.

A year is a leap year if it's divisible by 400 or if not, it's divisible by 4, but not 100.

Example interaction between the user and the program:

Enter a date: 2/31/2021

Invalid date entered. Changed to 3/3/2021

Another example:

Enter a date: 12/32/2020

Invalid date entered. Changed to  1/1/2021

Another example:

Enter a date: 10/28/2020

Date validated.

Press any key to continue.

Condensed financial data of Concord Company for 2020 and 2019 are presented below.

ONCORD COMPANY
INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 2020

Sales revenue

$6,860

Cost of goods sold

4,710

Gross margin

2,150

Selling and administrative expenses

920

Income from operations

1,230

Other revenues and gains

   Gain on sale of investments

80

Income before tax

1,310

Income tax expense

530

Net income

780

Cash dividends

260

Income retained in business

$520

Additional information:

During the year, $70 of common stock was issued in exchange for plant assets. No plant assets were sold in 2020.

Prepare a statement of cash flows using the direct method.

In its first year of business, Sweet Acacia purchased land, a building, and equipment on March 5, 2020, for $648,000 in total. The land was valued at $280,235, the building at $334,915, and the equipment at $68,350. Additional information on the depreciable assets follows:

Allocate the purchase cost of the land, building, and equipment to each of the assets.

Sweet Acacia has a December 31 fiscal year end and is trying to decide how to calculate depreciation for assets purchased during the year.

Calculate depreciation expense for the building and equipment for 2020 and 2021 assuming depreciation is calculated to the nearest month. (Round answers to 0 decimal places, e.g. 5,275.)

Sweet Acacia has a December 31 fiscal year end and is trying to decide how to calculate depreciation for assets purchased during the year.

Calculate depreciation expense for the building and equipment for 2020 and 2021 assuming a half-year's depreciation is recorded in the year of acquisition. (Round answers to 0 decimal places, e.g. 5,275.)

Flint Inc. reports accounting income of $106,200 for 2020, its first year of operations. The following items cause taxable income to be different than income reported on the financial statements.

Assume that the company follows the taxes payable method of accounting for income taxes under ASPE. During the year, Flint Inc. made tax instalment payments of $46,910.

QUESTIONS:

A) Calculate the taxable income and income tax expense for the year ended December 31, 2020.

B) Prepare the journal entry to record income taxes at December 31, 2020.

C) Prepare the income statement for 2020, beginning with the line “Income before income tax.”

D) Provide the balance sheet presentation for any resulting income tax accounts at December 31, 2020.

Brady Construction Company contracted to build an apartment complex for a price of $5,700,000. Construction began in 2018 and was completed in 2020. The following is a series of independent situations, numbered 1 through 6, involving differing costs for the project. All costs are stated in thousands of dollars.

Complete the following table. (Do not round intermediate calculations. Enter answers in dollars. Round your final answers to the nearest whole dollar. Negative amounts should be indicated by a minus sign.)

Question 1. Merino Plc 2019 and 2020 Balance Sheets included the following items:

Merino Plc Income Statement was as follows:

Required:

Prepare the STATEMENT OF CASH FLOWS for the year ended December 31, 2020. Additional information includes the following:

1. Equipment was purchased for $64,848 cash
2. Issued 3,360 common shares for cash at $28 per share
3. Declared and paid cash dividends during the year.