Questions
How much should the company report as current assets on the December 31, 2020 classified balance...
How much should the company report as current assets on the December 31, 2020 classified balance sheet?
In: Accounting
What are the most crucial engines of growth for china in 2020? Please explain each one....
What are the most crucial engines of growth for china in 2020? Please explain each one. Thank you.
In: Economics
what is the current financial situation (2020 ) of air asia? and how do they manage...
what is the current financial situation (2020 ) of air asia? and how do they manage their financial?
500 words.
In: Finance
How would you go about creating a linear regression model to predict the 2020 Presidential Election?
How would you go about creating a linear regression model to predict the 2020 Presidential Election?
In: Statistics and Probability
what is the current financial situation (2020 ) of air asia? and how do they manage...
what is the current financial situation (2020 ) of air asia? and how do they manage their financial?
500 words.
In: Economics
Sample questions for Econ 3308-W 2020 Canadians pay too much for generic drugs. Comment.
Sample questions for Econ 3308-W 2020
- Canadians pay too much for generic drugs. Comment.
In: Economics
Morning Star Ltd was registered on 1 July 2020, as a company with a constitution limiting...
Morning Star Ltd was registered on 1 July 2020, as a company with a constitution limiting the shares that could be offered to 5 000 000 Ordinary shares (including all classes) and 2 000 000 preference shares. The company issued a prospectus dated 1 July 2020 inviting the public to apply for 3 000 000 Ordinary A class shares at $3.00 per share. The terms of the shares on issue are $1.50 on application, $1.00 on allotment and $0.50 to be called within six months of allotment before 31 December 2020.
If the issue is oversubscribed the directors will make a pro-rata issue of shares and the excess application money will be applied to allotment and calls before any refunds will be given.
On 15 July, the directors also decided to issue 500 000 non-voting Ordinary B shares as fully paid to the promoters for a payment of $2.00 per share.
On 30 July, applications for the Ordinary A class shares closed. Applications for 4 500 000 shares in total had been received with applicants for 3 000 000 shares paying the full price and 1 500 000 shares paying only the application fee.
On 1 August, the Ordinary A class shares were allotted on a pro-rata basis with all allotment money owed paid by the 30 August.
The company paid share issue costs of $10,000 for the issuing of Ordinary A shares on 1 September. The share issue costs related to legal expenses associated with the share issue and fees associated with the drafting and advertising of the prospectus and share issue.
The call on the Ordinary A shares was made on 15 Septmber and due by 30 September. All call money was received except for the call on 100 000 shares. The directors met and forfeited the shares on 15 October. On 30 October, the forfeited shares were reissued at $2.40 fully paid to $3.00. Costs associated with reissuing the forfeited shares totalled $4,000. The remaining money was refunded to the defaulting shareholders on 15 November.
On 1 January 2021, Morning Star Ltd issued via a private placement semi-annual coupon debentures (which pay interest every 6 months) with a nominal value of $700,000. The debenture term is three years and the coupon rate is 8% per year. The market requires a rate of return of 10% per year. The money came in and the debentures were allotted on the same date. The first interest payment will occur on 30 June 2021.
On the same day (1 January), Monring Star issued 50,000 options for class A shares with an exercise price of $2.5 each. It costs $0.50 per option. These options expires on 30 June 2021.
The company issued via a private placement 400,000 redeemable preference shares of $2.00 each on 30 June 2021. The shares offer a fixed dividend of 7 per cent per annum. The shares are later redeemed to non-voting Ordinary Class B shares at the choice of the shareholders on 30 June 2022.
By 30 June 2021, 40,000 options were exercised. The remaining options are lapsed.
Prepare an extract of the statement of change in equity to show the composition and movement of the ordinary shares account of Morning Star Ltd as at 30 June 2021 and 30 June 2022. Please provide the opening balance, change in share capital and closing balance of each classes of shares.
In: Accounting
At the beginning of 2019, the Healthy Life Food Company purchased equipment for $42 million to be used in the manufacture of a new line of gourmet frozen foods.
At the beginning of 2019, the Healthy Life Food Company purchased equipment for $42 million to be used in the manufacture of a new line of gourmet frozen foods. The equipment was estimated to have a 10-year service life and no residual value. The straight-line depreciation method was used to measure depreciation for 2019 and 2020. Late in 2021, it became apparent that sales of the new frozen food line were significantly below expectations. The company decided to continue production for two more years (2022 and 2023) and then discontinue the line.
At that time, the equipment will be sold for minimal scrap values. The controller, Heather Meyer, was asked by Harvey Dent, the company’s chief executive officer (CEO), to determine the appropriate treatment of the change in service life of the equipment.
Heather determined that there has been an impairment of value requiring an immediate write-down of the equipment of $12,900,000. The remaining book value would then be depreciated over the equipment’s revised service life.
The CEO does not like Heather’s conclusion because of the effect it would have on 2021 income. “Looks like a simple revision in service life from 10 years to 5 years to me,” Dent concluded. “Let’s go with it that way, Heather.”
Required:
1. What is the difference in before-tax income between the CEO’s and Heather’s treatment of the situation?
2. Discuss Heather Meyer’s ethical dilemma.
In: Accounting
Each of the following situations occurred during 2021 for one of your audit clients:
Each of the following situations occurred during 2021 for one of your audit clients:
1. An inventory write-down due to obsolescence.
2. Discovery that depreciation expenses were omitted by accident from 2020’s income statement.
3. The useful lives of all machinery were changed from eight to five years.
4. The depreciation method used for all equipment was changed from the declining-balance to the straight-line method.
5. Restructuring costs were incurred.
6. The Stridewell Company, a manufacturer of shoes, sold all of its retail outlets. It will continue to manufacture and sell its shoes to other retailers. A loss was incurred in the disposition of the retail stores. The retail stores are considered a component of the entity.
7. The inventory costing method was changed from FIFO to average cost.
Require:
1. For each situation, identify the appropriate reporting treatment from the list below (consider each event to be material):
a. As an unusual gain or loss
b. As a prior period adjustment
c. As a change in accounting principle
d. As a discontinued operation
e. As a change in accounting estimate
f. As a change in accounting estimate achieved by a change in accounting principle
2. Indicate whether each situation would be included in the income statement in continuing operations (CO) or below continuing operations (BC), or if it would appear as an adjustment to retained earnings (RE). Use the format shown below to answer requirements 1 and 2.
In: Accounting
After graduating from QCCUNY, you recently joined as a staff accountant in the controller’s office at...
In: Accounting