The financial statements for Waverley Ltd are provided below:

Waverley Ltd

Comparative Balance Sheet

As at 30 June 2019 and 2020

Waverley Ltd

Income Statement

For the Year Ended at 30 June 2020

Required:

Prepare an extract of the Cash Flow Statement for the year ended 30 June 2020 showing Cash Flows from Operating Activities AND Cash Flows from Financing Activities. Show all workings.

The following tables 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.

^a Assets at the end of 2018 were $3,600,000.

^b Debt at the end of 2018 was $620,000.

a. What is the implied level of assets at the end of 2020? (Do not round your intermediate calculations. Enter your answer in thousands.)

b. If the company pays out 50% of net income as dividends, how much cash will Drake's need to raise in the capital markets in 2020? (Do not round your intermediate calculations. Enter your answer in thousands.)

c. If Drake's is unwilling to make an equity issue, what will be the debt ratio at the end of 2020? (Do not round your intermediate calculations. Round your answer to 2 decimal places.)

The following tables summarizes the 2019 income statement and end-year balance sheet of Drake’s Bowling Alleys. Drake’s financial manager forecasts a 15% 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 3% of debt at the start of the year.

^a Assets at the end of 2018 were $2,600,000.

^b Debt at the end of 2018 was $520,000.

a. What is the implied level of assets at the end of 2020? (Do not round your intermediate calculations. Enter your answer in thousands.)

b. If the company pays out 50% of net income as dividends, how much cash will Drake's need to raise in the capital markets in 2020? (Do not round your intermediate calculations. Enter your answer in thousands.)

c. If Drake's is unwilling to make an equity issue, what will be the debt ratio at the end of 2020? (Do not round your intermediate calculations. Round your answer to 2 decimal places.)

Pineapples Corporation is in need of cash. It issues bonds with a $2 million face value. The bonds have a 8.48% coupon rate. The market rate is 6%. The bonds have a life of 10 years, and are compounded semiannually. Pineapples Corp. issues the bonds on 1/1/20. Please provide all journal entries that Pineapples Corp. must record during 2020 in relation to these bonds. (HINT: There are a total of three journal entries which must be made.) You may round your answers to the nearest dollar.

Show your work here !!!!

Record your FIRST of three journal entry here for 2020:

Record your SECOND of three journal entry here for 2020:

Record your THIRD journal entry here for 2020:

Additional Question (A) Related to Pineapples Corp: What is the journal entry Pineapples Corp. will record when it retires the bonds in 10 years (after/not including the final coupon payment):

Additional Question (B) Related to Pineapples Corp: Over the life of the bond, how much interest expense will Pineapples Corp. recognize? (Show your calculation in the space below for full credit)

Additional Question (C) Related to Pineapples Corp: If the coupon rate was 6% (instead of 8.48%) and all other facts remained the same, what would be the price of the bond at issuance? (Show your work or provide your explanation in the space below for full credit.)

Buffalo Windows manufactures and sells custom storm windows for three-season porches. Buffalo also provides installation service for the windows. The installation process does not involve changes in the windows, so this service can be performed by other vendors. Buffalo enters into the following non-cancellable contract on July 1, 2020, with a local homeowner. The customer purchases windows for a price of $3,300 and chooses Buffalo to do the installation. Buffalo charges the same price for the windows regardless of whether it does the installation or not. The price of the installation service is estimated to have a fair value of $720. The customer pays Buffalo$2,880 (which equals the fair value of the windows, which have a cost of $2,000) upon delivery and the remaining balance upon installation of the windows. The windows are delivered on September 1, 2020, Buffalo completes installation on October 15, 2020, and the customer pays the balance due.

Prepare the journal entries for Buffalo on July 1, September 1, and October 15, 2020. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round percentage allocations to 2 decimal places, e.g. 15.25 and final answers to 0 decimal places, e.g. 5,275. Record journal entries in the order presented in the problem.)

Tara’s Treasures is authorized to sell 250,000 shares of 5%, $100 PAR Value Preferred Stock and 1,500,000 shares of COMMON stock, $4 par.

The Stockholder’s Equity Section Dec 31^st 2019:

Preferred Stock 5%, $100 Par 250,000 shares Authorized,

100,000 Shares Issued                                    $10,000,000

Common Stock, $4 Par, 1,500,000 Shares Authorized

500,000 Shares Issues & Outstanding $2,000,000

Paid in Capital in Excess of Par, Common        $3,000,000

Retained Earnings                                             $4,500,000

During 2020 Tara’s Treasures had the following transactions:

1. Jan 1, 2020: Tara declared the Preferred Dividend and a $2.50 Common Dividend, Date of Record Jan 15 and Payment Date Jan 30^th.
2. Jan 30^th: Paid the Dividend
3. Feb 1^st: Tara issued 50,000 shares of Common Stock for $10 per share.
4. Feb 15^th: Tara declares a 2 for 1 STOCK SPLIT for Common Stock
5. Mar 15^th: Tara DECLARES a 10% Common Stock Dividend, Record Date March 25^th, Payable April 1^st. The stock is valued at $12 per share.
6. April 1^st: Paid the Stock Dividend

Required:

1. Record entries a-f in the Journal and update the Stockholder’s Equity Balances
2. Prepare the Stockholder’s Equity Section at Dec 31^st 2020. Assume Tara reported Net Income of $750,000 for 2020.

The adjusted, pre-closing trial balance appears below for B. Counter, CPA, a sole proprietorship, at December 31, 2020. Accounts are listed in alphabetical order.

ACCOUNTS DR CR

Accounting Revenue (Income) 1,500 CR

Accounts Payable 8,700 CR

Accounts Receivable 500 DR

Buildings & Equipment 5,000 DR

Capital, January 1, 2020 12,900 CR

Cash (checking account) 4,100 DR

Insurance Expense 400 DR

Land 9,000 DR

Owner Withdrawals (Drawing) 1,000 DR

Prepaid Insurance Expense 800 DR

Supplies Expense 200 DR

Supplies on Hand 700 DR

Unearned Accounting Revenue 400 CR

Utilities Expense 400 DR

Wages Expense 1,400 DR

Totals 23,500 (debits) 23,500 (credits)

From the adjusted trial balance above, answer the questions below. Note that your best approach is to first prepare the three financial statements in a methodical and careful manner.

Questions:

1. What are total (gross) revenues on the 2020 income statement?

2. What are total expenses on the 2020 income statement?

3. What are total assets on the 12/31/20 balance sheet?

4. What are total liabilities on the 12/31/20 balance sheet?

5. True or False: If the goal of the business owner is to increase the equity in the business, the trend in the capital account is positive for the year.

The Kingbird Company issued $360,000 of 11% bonds on January 1, 2020. The bonds are due January 1, 2025, with interest payable each July 1 and January 1. The bonds were issued at 102.

Prepare the journal entries for (a) January 1, (b) July 1, and (c) December 31. Assume The Kingbird Company records straight-line amortization semiannually.

E5.16  

(Preparation of Partial Statement of Cash Flows—Operating Activities)

(LO 8, 9) The statement of income of Kneale Transport Inc. for the year ended December 31, 2020, reported the following condensed information:

Kneale's statement of financial position included the following comparative data at December 31:

Additional information:

Operating expenses include $70,000 in depreciation expense. The company follows IFRS. Assume that interest is treated as an operating activity for purposes of the statement of cash flows.

Instructions

a.  

Prepare the operating activities section of the statement of cash flows for the year ended December 31, 2020, using the

• 1.indirect method and

• 2.direct method.

b.  

From the perspective of an external user of Kneale Transport's financial statements, discuss the usefulness of the statement of cash flows prepared using either the indirect or the direct method.

Use the unadjusted trial balance of Electric Bike on December 31, 2020.

Required:
1. Record adjusting entries for the following information.

a. The records show that the equipment was estimated to have a total estimated useful life of 10 years with a residual value at the end of its life of $14,090.
b. The balance in the Prepaid Insurance account was reviewed and it was determined that $325 was unused at December 31, 2020.
c. A review of the store supplies on December 31, 2020, revealed a balance on hand of $1,880; a similar examination of the office supplies showed that $710 had been used.
d. Accrued salaries payable, $1,600.
e. A count of the merchandise inventory revealed a balance on hand December 31, 2020, of $33,440.

2. Prepare a multiple-step income statement showing the expenses in detail.