The Wholesale Ltd acquired 80 per cent of the shares of House Construction Ltd on 30 June 2020 for a consideration of $800,000. The share capital and reserves of House Construction Ltd at the date of acquisition were: Share capital $550,000 Retained earnings $100,000 Revaluation surplus $150,000 All assets of House Construction Ltd were fairly valued at the date of acquisition, except for a major plant that had a fair value $26,000 greater than its carrying amount. The cost of the plant was $100,000 and it had accumulated depreciation of $85,000. There were no transactions between Wholesale Ltd and House Construction Ltd at the date of acquisition. In addition, the Wholesale Ltd acquired 100 per cent…Details
You are required to create an MYOB company file, make changes as necessary to the chart of accounts, enter opening balances, record transactions over a one-month period and generate reports. PART A.1 – Creating the business Your business is a toy wholesaler, located in Australia. You buy toys from manufacturers and importers and sell them to toyshops, gift shops and department stores throughout the country. Most sales are made on credit but occasionally a new customer will buy goods for cash. The business does not sell direct to the public. When creating your business, use the following information: Company name: Your name Toys ABN: Your student number + 0’s (11 digits in all) Address: Line 1 Your full…Details
ACT305 CORPORATE ACCOUNTING A compulsory winding up in insolvency order was issued by the court in respect of Rock Bottom Ltd. The company had a capital of 65 000 fully paid ordinary shares of $1 each. The liquidator took possession of the company’s assets which raised $873 145 on sale. Included in the sale proceeds was $221 000 from the disposal of the land and buildings. The creditors submitted their claims and the following debts were admitted as proven: Liquidation expenses $3 900 Liquidator’s remuneration 10 400 Mortgage loan secured on land and buildings 130 000 Additional mortgage loan on land and buildings 104 000 Employees’ wages 5 employees for 2 weeks at $520 per week 5 200 Secretary’s salary —…Details
Question 1 Umbilo Ice Cream purchased a freezer at a cost of R 285000.The estimated life of the freezer is 5 years. At which time they will have no salvage value? The company would like to compare allowable depreciation methods and decide to prepare depreciation method schedules for the fixtures using the strait-line-double declining-balance and sum-of the year digit method of depreciation schedules. Find the answers to these questions for Umbilo Ice Cream. 4.1 What is the book value at the end of the third year using the straight line depreciation method? 4.2 Using the double-declining-balance method of depreciation, what is the book value at the end of the third year? 4.3 With the…Details
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…Details
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.
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 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 $2,000 for personal use.|
Prepare general journal entries to record the transactions. Ignore GST.
The trial balance of Sam Landscaping at 30 June 2019 is as follows: Sam Landscaping Trial Balance As at 30 June 2019 Account Debit ($) 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. Financial data for Safety Hire as of 30 June 2019 are shown as below:.
|Equipment hire income||200,000|
|Cash at bank||48,000|
|Michael Don, capital||?|
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?
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…
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, 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%…