Kapiti Ltd runs a successful chain of fashion boutiques, but has been experiencing significant cash flow problems. The directors are examining a proposal made by an accounting consultant that all the shops currently owned by the company be sold and either leased back or the businesses moved to alternative leased shops. The directors are keen on the plan but are puzzled by the consultant’s insistence that all lease agreements for the shops be ‘operating’ rather than ‘finance’ leases.

Meanwhile, Scarlett Ltd agreed to lease their 5 buildings to Kapiti Ltd.

The lease agreement details are as follows:

The Chairman of the Board directed the Company Accountant to submit a detailed report on the above project.

Required

Explain, by reference to the requirements of AASB 117, why the consultant prefers operating to finance leases.                                                   

The Collins Corporation purchased office equipment at the beginning of 2019 and capitalized a cost of $2,308,000. This cost included the following expenditures:

The company estimated an eight-year useful life for the equipment. No residual value is anticipated. The double-declining-balance method was used to determine depreciation expense for 2019 and 2020.

In 2021, after the 2020 financial statements were issued, the company decided to switch to the straight-line depreciation method for this equipment. At that time, the company’s controller discovered that the original cost of the equipment incorrectly included one year of annual maintenance charges for the equipment.

Required:
1 & 2. Ignoring income taxes, prepare the appropriate correcting entry for the equipment capitalization error discovered in 2021 and any 2021 journal entries related to the change in depreciation methods. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your final answers to the nearest whole dollar.) requirement 3 Record the 2021 adjusting entry for depreciation.

The Landing Department of Gross Furniture Company has the following production and manufacturing cost data for March 2020, the first month of operation.

Production: 7,360 units finished and transferred out; 3,000 units started that are 100% complete as to materials and 20% complete as to conversion costs.

Manufacturing costs: Materials $39,368; labor $20,700; overhead $42,980.

Prepare a production cost report.

                                        Gross Furniture Company
                                           Landing Department
                                         Production Cost Report
                               For the Month Ended March 31, 2020

                                                                        Equivalent Units

Quantities                      Physical Units               Materials                ConversionCosts

Units to be accounted for

Work in process, March 1

Started into production

Total units

Units accounted for

   Transferred out

Work in process, March 31

Total units

Costs                                                 Materials                   Conversion Costs                   Total

Unit costs

   Total Costs

Equivalent units

Unit costs

Costs to be accounted for

   Work in process, March 1

Started into production

Total costs

Cost Reconciliation Schedule

Costs accounted for

   Transferred out

Work in process, March 31

      Materials

Conversion costs

Total costs

The Collins Corporation purchased office equipment at the beginning of 2019 and capitalized a cost of $2,344,000. This cost included the following expenditures:

The company estimated an eight-year useful life for the equipment. No residual value is anticipated. The double-declining-balance method was used to determine depreciation expense for 2019 and 2020.

In 2021, after the 2020 financial statements were issued, the company decided to switch to the straight-line depreciation method for this equipment. At that time, the company’s controller discovered that the original cost of the equipment incorrectly included one year of annual maintenance charges for the equipment.

Required:
1 & 2. Ignoring income taxes, prepare the appropriate correcting entry for the equipment capitalization error discovered in 2021 and any 2021 journal entries related to the change in depreciation methods. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your final answers to the nearest whole dollar.)

Steven’s Televisions produces television sets in three categories: portable, midsize, and flat-screen. On January 1, 2020, Steven adopted dollar-value LIFO and decided to use a single inventory pool. The company’s January 1 inventory consists of:

During 2020, the company had the following purchases and sales.

Assume the company uses three inventory pools instead of one. Compute ending inventory, cost of goods sold, and gross profit. (Round price index to 2 decimal places, e.g. 1.45 and final answers to 0 decimal places, e.g. 6,548.)

Straight-Line and Units-of-Production Methods

Assume that Sample Company purchased factory equipment on January 1, 2017, for $70,000. The equipment has an estimated life of five years and an estimated residual value of $7,000. Sample's accountant is considering whether to use the straight-line or the units-of-production method to depreciate the asset. Because the company is beginning a new production process, the equipment will be used to produce 10,000 units in 2017, but production subsequent to 2017 will increase by 10,000 units each year.

Required:

1. Calculate the depreciation expense, accumulated depreciation, and book value of the equipment under both methods for each of the five years of its life. Enter all amounts as positive values.

Straight-line method:

Units-of-production method:

2. In this exercise, The units of production method results in a depreciation pattern opposite to which depreciation method?

On Jan 1, 2018, Rising Star purchased a crane for $ 1,200,000 and paid $200,000 as a downpyament while the balance will be paid over the next five years in installments of $100,000 every six months , starting July 1, 2018. The market rate on Jan 1, 2018 was 9%.

Requirements:
a.   For the how much the company should recognize the crane on Jan 1, 2018? Show your calculation along with your accounting entry to recognize the purchase of the crane.
b.   On Jan 1, 2020, the company will pay installment payment of $100,000. How much of this payment represents a payment of the principal and how much of it represents a payment of the interest? Show your calculation (fill in the following table Jan 1 2018 – Jan 2020).

c.   What is the total interest expense for the year ended on Dec 31, 2018?
d.   What will be the carrying value of the notes on Dec 31, 2019?

Describe a complete diagnostic evaluation session. Include all measures that are administered from beginning to end giving details and examples. Explain why we perform each step of the evaluation and what information it gives us towards a diagnosis. How do the findings from the evaluation translate into a diagnostic report?

Looking around do you believe Code of Ethics even matters? We see individuals violating their own Code for small things. For example I am a thief. I still from University. When I teach on ground classes I have gone home with Dry Erase markers and have used them at home and not brought them back. During work time I check my personal emails. What about these actions?