Misc. MCQ

A system of internal control is described as: including aspects of administrative controls and accounting controls. all procedures adopted by an entity to control its activities and protect its assets. all measures used by a business to promote the reliability of accounting data. all of these options.     Closing entries refer to: establishing zero balances in the balance sheet accounts. transferring income and expense account balances to the profit or loss summary account, which is then closed to the equity account. establishing a zero balance in the cash at bank account. establishing zero balances in all ledger accounts.   Which of the following is a permanent account? Sales revenue Unearned revenue Rent expense Depreciation     The main reason for…

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During May, Byron Bui business performed services for a specific

During May, Byron Bui’s business performed services for a specific customer for which the fee was $3,000. The payment was received in the following month of June.
Required:
a) Was the revenue earned in May or June? Which financial statement assumption does this relate to?
b) What are the differences between the cash basis of accounting and the accrual basis of accounting?
c) What journal entries should be recorded under accrual accounting in May and June?
d) What journal entries should be recorded under cash accounting in May and June?

The following information is available about the entity’s business transactions

The following information is available about the entity’s business transactions in May 2019.

May	1	Borrowed $300,000 from a bank.
	2	Purchased inventory on credit from a supplier A/K, n/20, $5,000.
	4	Paid insurance for the next 12 months $6,000.
	8	Paid the supplier A/K the full amount for inventory purchased on 2 May.
	9	Owner withdrew $2,000 for personal use.

Required:

Prepare general journal entries to record the transactions. Ignore GST.

The trial balance of Sam Landscaping at 30 June 2019

The trial balance of Sam Landscaping at 30 June 2019 is as follows:   Sam Landscaping Trial Balance As at 30 June 2019 Account Debit ($) Credit ($) Cash 46,000 Accounts Receivable 48,000 Prepaid insurance 4,800 Landscaping Supplies 12,000 Equipment 25,000 Accumulated Depreciation – Equipment 4,800 Accounts Payable 35,000 Unearned Service Revenue 6,000 Sam L., Capital 50,500 Drawings 3,000 Service Revenue 58,000 Salaries Expense 13,000 Miscellaneous Expense 2,500 Total $ 154,300 $ 154,300   Additional information for the period: a. The insurance was purchased on 1 May 2019, and it covers a period of 24 months. b. A physical count reveals $4,000 of landscaping supplies are on hand at the end of 30 June c. Equipment is depreciated at a rate…

Michael Don owns an equipment hire business under the name Safety Hire

Michael Don owns an equipment hire business under the name Safety Hire. Financial data for Safety Hire as of 30 June 2019 are shown as below:.

Account	Balance ($)
Accounts receivable	73,000
Wages expense	78,000
Equipment hire income	200,000
Advertising expense	32,000
Prepaid insurance	9,000
Accounts payable	88,000
Insurance expense	7,000
Cash at bank	48,000
Equipment	190,000
Michael Don, capital	?

Required:

a) Prepare an income statement for the business for the year ending 30 June 2019.
b) Prepare a balance sheet in narrative format for Safety Hire as at 30 June 2019.
c) Prepare a statement of changes in Equity for the year and determine Michael Don’s capital at 30 June 2018?

Question requires you to complete necessary journal entries

Prepare consolidation journal entries for the current financial year showing calculations, and narration for each journal entry 1  Consolidation journal entries for the fair value adjustment of the Plant-Touch U in Subsidiary  Ltd and the resulted tax effect 2 Consolidation journal entries relating to pre-tax depreciation entry resulting because of fair value adjustment of the Plant-Touch-U asset 3 Consolidation journal entries relating to tax effect result from the depreciation entry resulting because of fair value adjustment of the Plant-Touch-U to prepare group accounts for the current year 4  Consolidation journal entries for the elimination of Parent Ltd’s investment in Subsidiary Ltd 5 Consolidation journal entries relating to the management fees for the current year 6 Consolidation journal entries relating intra-group inventory-Type…

ACT202 Management Accounting – Hardex Inc is a manufacturer of commercial

Hardex Inc is a manufacturer of commercial and heavy industrial pipe nozzles. The firm’s two product lines are called Easyflow and Heavyflow nozzles. The primary raw materials are flexible steel sheets, and 15cm x 13cm of plastic sheets. Each Easyflow nozzle requires a 2/3 of a meter and a Heavyflow nozzle requires a one metre of steel sheet. Allowing for normal breakage and scrap steel sheet, the company can cut either enough to make four Easyflow or two Heavy flow nozzles from a single steel sheet. Other raw materials are costly and treated as indirect materials. Karen Shaw, Hardex Inc.’s accountant has gathered the following information in preparation for the company’s annual budget for the next year. Sales in the fourth…

Assume that the company, where you are working as a team in Financial Department

Assume that the company, where you are working as a team in Financial Department, is considering a potential project with a new product that is expected to sell for an average price of $22 per unit and the company expects it can sell 650 000 unit per year at this price for a period of 4 years. Launching this project will require purchase of a $3 500 000 equipment that has residual value in four years of $500 000 and adding $ 850 000 in working capital which is expected to be fully retrieved at the end of the project. Other information is available below: Depreciation method: straight line Variable cost per unit: $17 Cash fixed costs per year: $450 000 Discount rate: 10% Tax Rate: 30%…

Quick Silver, Smart Learning and Blooming Ltd.

Question 1.  Quick Silver Ltd is looking for financial investment in the securities market.  Two investment options are available in different securities: Bonds and ordinary shares. Treasury bond: the bond is paying 10% coupon rate. Interest is paid semiannually. The bonds have a face value of $1,000 and will mature 25 years from now. Commonwealth Bank ordinary share: the share just paid a dividend of $6.50 per share. The Company Management agreed on steady growth of 5% in dividends and earnings over the foreseeable future. The required rate of return for shares of this type is 18%. Required: Compute the current value of the Treasury Bond if the YTM of the bond is 7% annually; Calculate the current value of Commonwealth…

KIBT Ltd is a consumer electronic company and considering to invest

KIBT Ltd is a consumer electronic company and considering to invest in either of two competing projects that will allow the company to eliminate a production bottleneck and meet the growing demand for its products. The company’s engineering department narrowed the alternatives down to two projects A and B. Working with the accounting and finance personnel, the company’s CFO developed the following estimates of the cash flows for A and B over the relevant 6-year time horizon. The firm has a 12 per cent required return and views these projects as equally risky.   Year Project A cash flows Project B cash flows 0 -$660,000 -$950,000 1 $250,000 $190,000 2 190,000 170,000 3 180,000 180,000 4 160,000 260,000 5 120,000 570,000…

Pabst & Maxfield, Accounting Practice Sets

Schedule of Accounts Receivable as at 31 May 20XX Customer Invoice No. Terms Date of Invoice Amount Due Coral Holiday Resort 3347 N30 15/05/20XX $ 2,160.00 Beach and Reef Holidays 3339 N30 3/05/20XX 1,320.00 Budget Diving Tours 3352 N30 29/05/20XX 2,280.00 $ 5,760.00   Schedule of Accounts Payable as at 31 May 20XX Supplier Invoice No. Terms Date of Invoice Amount Due Louis Reevsby 1753 N7 31/05/20XX $ 960.00 One Stop Diving Shop 13467 N30 30/04/20XX 2,400.00 Diving DownUnder 9412 N30 8/05/20XX 2,464.00 $ 5,824.00   Pro Diver Trial Balance as at 31 May 20XX Account Number Account Debit Credit 100 Bank Account $ 14,632.20 105 Petty Cash 200.00 110 Accounts Receivable 5,760.00 120 Prepaid Insurance 381.25 130 Prepaid Rates and…

Brabant Inc. recorded the following transactions for one of its successful items

Scenario #1: Inventory Brabant Inc. recorded the following transactions for one of its successful items, a product called XL5: January 01 Opening inventory: 1,500 units @ $9.50 per unit. Purchases: January 01 2,200 units @ $10.50 per unit $23,100 January 01 1,900 units @ $11 per unit $20,900 February 01 1,300 units @ $11.50 per unit $14,950 March 01 1,600 units @ $12 per unit $19,200 Total 7,000 units $78,150 Sales: 1,600 units @ $18.50 per unit January 01 1,700 units @ $19 per unit $29,600 January 01 1,100 units @ $19 per unit $32,300 February 01 1,800 units @ $19.50 per unit $20,900 February 01 6,200 units $35,100 Total $117,900   Assignment: a. Calculate the Ending Inventory for the three…