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

During 2020, the following occurred.

Prepare a statement of cash flows for the year 2020 for Martinez. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

During 2020, Monty Furniture Limited purchased a railway carload of wicker chairs. The manufacturer of the chairs sold them to Monty for a lump sum of $58,600, because it was discontinuing manufacturing operations and wanted to dispose of its entire stock. Three types of chairs are included in the carload. The three types and the estimated selling price for each are as follows:

Monty estimates that the costs to sell this inventory would be $4 per chair. During 2020, Monty sells 390 lounge chairs, 270 armchairs, and 150 straight chairs, all at the same prices as estimated. At December 31, 2020, the remaining chairs were put on sale: the lounge chairs at 25% off the regular price, the armchairs at 30% off, and the straight chairs at 40% off. All were expected to be sold at these prices.

What is the total cost of the chairs remaining in inventory at the end of 2020, using the relative sales value method?

The stockholders' equity account balances of Kay Corporation for 2020 are
given below:

                                                         January 1      December 31
Common stock ($12 par, 54,000 shares outstanding) .....   648,000         720,000
Paid-in capital – common stock ........................   540,000         594,000
Treasury stock (10,000 share; $16 cost per share) .....   160,000          36,800
Paid-in capital – treasury stock ......................     5,000            ?
Retained earnings .....................................   425,000            ?

During 2020, Kay Corporation entered into the following transactions:

March 23     Re-issued 2,400 of the treasury shares for $13 per share

June 9       Re-issued 3,700 of the treasury shares for $22 per share

August 15    Issued 6,000 shares of previously un-issued common stock

November 2   Re-issued 1,600 of the treasury shares for $14 per share

December 18  Declared and paid a $3.75 dividend per share on the
             outstanding shares of common stock

Kay Corporation reported a net income of $293,670 for 2020.

Calculate the balance in the paid-in capital - treasury stock account
at December 31, 2020.

A comparative balance sheet for Blossom Corporation is presented as follows. December 31 Assets 2020 2019 Cash $ 72,800 $ 22,000 Accounts receivable 83,260 67,460 Inventory 181,260 190,460 Land 72,260 111,460 Equipment 261,260 201,460 Accumulated Depreciation-Equipment (70,260 ) (43,460 ) Total $600,580 $549,380 Liabilities and Stockholders' Equity Accounts payable $ 35,260 $ 48,460 Bonds payable 150,000 200,000 Common stock ($1 par) 214,000 164,000 Retained earnings 201,320 136,920 Total $600,580 $549,380 Additional information: 1. Net income for 2020 was $127,520. No gains or losses were recorded in 2020. 2. Cash dividends of $63,120 were declared and paid. 3. Bonds payable amounting to $50,000 were retired through issuance of common stock. (a) Prepare a statement of cash flows for 2020 for Blossom Corporation. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).) BLOSSOM CORPORATION Statement of Cash Flows $ Adjustments to reconcile net income to $ $ Issued common stock to retire $ of bonds outstanding

1. The table given below summarizes the 2019 income statement and end-year balance sheet of Drake’s Bowling Alleys. Drake’s financial manager forecasts a 10% increase in sales and costs in 2020. The ratio of sales to average assets is expected to remain at 0.40. Interest is forecasted at 5% of debt at the start of the year. At the end of 2018 debt was $2,400,000 and assets were $6,960,000. (10 points) Income Statement $ in thousands Sales $ 2,900 (40% of average assets) Costs 2,175 (75% of sales) Interest 120 (5% of debt at start of year) Pretax profit 605 Tax 242 (40% of pretax profit) Net income $ 363 Balance Sheet $ in thousands Net assets $ 7,540 Debt $ 2,400 Equity 5,140 Total $ 7,540 Total $ 7,540 a. What is the expected level of assets at the end of 2020? b. If the company pays out 50% of net income as dividends, how much cash will Drake need to raise in the capital markets in 2020? Assumes debt remains constant. c. If Drake is unwilling to make an equity issue, what will be the debt ratio at the end of 2020?

The table given below summarizes the 2019 income statement and end-year balance sheet of Drake’s Bowling Alleys. Drake’s financial manager forecasts a 10% increase in sales and costs in 2020. The ratio of sales to average assets is expected to remain at 0.40. Interest is forecasted at 5% of debt at the start of the year. At the end of 2018 debt was $2,400,000 and assets were $6,960,000.

Consider the following information:

1. On December 1, 2019, a U.S. firm plans to purchase a piece of equipment (with an asking price of 100,000 francs) in Switzerland during January of 2020. The transaction is probable, and the transaction is to be denominated in euros.
2. On December 1, 2019, the company enters into a forward contract to buy 100,000 Swiss francs for $1.01 on January 31, 2020.
3. Spot rates and the forward rates for January 31, 2020, settlement were as follows (dollars per Swiss franc):

   	Spot Rate	Forward Rate for 1/31/20
   December 1, 2019	$0.99	$1.01
   Balance sheet date (12/31/19)	$1.01	$1.02
   January 31 and February 1, 2020	$1.04

4. On February 1, the equipment was purchased for 100,000 Swiss francs.

Required:

1. Prepare all journal entries needed on December 1, December 31, January 31, and February 1 to account for the forecasted transaction, the forward contract, and the transaction to buy the equipment.
2. When should the company reclassify any amounts reported in other accumulated comprehensive income as a result of the cash flow hedge?

SS Moving Company reported $400,000 in credit sales in December 2020. The company has historically seen losses (bad debt) of approximately 1% of all credit sales. On December 31, 2020, the Accounts Receivable balance is $201,000. SS’s accountants prepared the following Aging of Accounts Receivable as of December 31, 2020:

--------------------------Number of days past due-----------------------------

Total Balance 0-30 31-60 61-90 Over 90 Accts.

Receivable $201,000 $60,000 $90,000 $50,000 $1,000

Estimated % uncollectible 1% 5% 15% 50%

Assuming that SS Moving Company uses the income statement approach (percentage of credit sales method) to record the bad debt expense each period, record the journal entry for December 2020 in each of the following scenarios (you need two journal entries and they can both be in the space provided).

A) The current balance in the Allowance for Doubtful Accounts is $3,000.

B) The current balance in the Allowance for Doubtful Accounts is $10,000. You should show your journal entries AND your calculations in this space...

THUMB Ltd, which manufactures a single product, is considering whether to use absorption costing or marginal costing to report its budgeted profit in its management accounts. The following information is available:

K /unit Direct materials 4.00

Direct labour 15.00

Total 19.00

Selling price 50.00

Fixed production overheads are budgeted to be K300,000 per month and are absorbed on an average activity level of 100,000 units per month. For the month of April 2020, sales are expected to be 100,000 units although production units will be 120,000 units. Fixed selling costs of K150,000 per month will need to be included in the budget as will the variable selling costs of K2.00 per unit. There are no opening inventories expected at 1 April 2020. Required: (a) Prepare the budgeted statement of profit or loss for the month of April 2020 for THUMB Ltd using absorption costing. Clearly show the valuation of any inventory figures. [6 Marks] (b) Prepare the budgeted statement of profit or loss for the month of April 2020 for THUMB Ltd using marginal costing. Clearly show the valuation of any inventory figures.