Question 1 Retail operations and retail inventory ‘Little Red Riding’ began business on 1 June 2019.  The business is a partnership, between Mr Wheeler and Mrs Wheeler.  The business will sell children’s bicycles at the local markets.  The business is not registered for GST.  The following transactions occurred during June 2019: Date: Details: 1-Jun Mr and Mrs Wheeler deposited $30,000 into the business bank account. 2-Jun Purchase of bicycles (100 small bicycles, and 100 large bicycles) from Red Bikes Rock Ltd on account for $10,000 ($50 per bicycle) on terms of 2/10, n/30. 4-Jun Little Red Riding received an invoice from Fast Freight Ltd relating to delivery costs for the bicycles purchased on 2 June.  The amount due is $300, and…

On 1 July 2019 Alma Ltd acquired 94% the issued shares of Davis Ltd for $3716000 . The equity of Davis Ltd at this date consisted of: Share capital 1301000 Asset revaluation surpluss 557000 Retained earnings 446000 All the identifiable assets and liabilities of Davis Ltd were recorded at amounts equal to their fair values at acquisition date except for the following; Account Cost Carrying Amount Fair value Further life- in Year Inventories $557,000 $1,003,000 Land $1,115,000 $2,007,000 Machinery $1,562,000 $1,301,000 $2,342,000 8 Fittings $20,000 $20,000 8 Liabilities $50,000 $50,000 All inventories on hand at 1 July 2019 are sold by 30 June 2020. Further life of the assets are listed on the above table. Alma Ltd uses the partial goodwill…

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Sunny Days manufactures swimwear and beach accessories for men and women.  They operate out of rented premises in Currumbin Creek Road where the factory is split into a manufacturing and storage area and a retail space. The business produces 4 products: One-piece swimsuits for women Board shorts for men Beach Towels Beach Umbrellas You, as the management accountant for the firm, have been asked to prepare a range of budgets for the 2020 year.  The following information has been gathered: Sales One-piece swimsuits Board short Towel Beach Umbrellas January 2020 1,800 1,600 400 200 February 2020 1,400 1,100 300 180 March 2020 1,300 1,160 260 160 April 2020 1,000 1,000 140 120 May 2020 400 600 80 60 June 2020 400…

Newcastle Machining produces parts for the steel industry. It has 3 categories of overhead costs: machine operating costs, engineering and inspecting costs. The costs expected for these categories for the coming year are as follows: Machining $440,000 Engineering 220,000 Inspecting 180,000 Total 840,000 The plant currently uses machine hours to apply overhead. Expected capacity is 100,000 machine hours. Tom, the plant manager, has been asked to submit a bid on a potential job. He provides you with the following data for this job:   Direct materials $8,000 Direct labour $12,000 Overhead $? Number of inspections 1 Number of machine hours 2,000 Engineering hours 10   Tom has been told that other firms will be competing for this job as well. Most…

Voltus Communications, a manufacturer of communications equipment, uses a job costing system. Manufacturing overhead is applied based on machine hours and it uses a predetermined overhead rate with budgeted overhead of $3,600,000 for the year and 80,000 machine hours. Voltus uses a financial year of 1 July 2018 to 30 June 2019 and all the activities for the year have been carried out. Summarised details for period 1 July 2018 to 31 May 2019 and for June 2019 follow. Jobs B12- 008,K12-009 and K12-011 were completed during June 2019 .All completed jobs except K12-009 have been sold by 30 June 2019. Jobs in process at 31 May 2019 Job numbers Balance at 31 May 2019 B12-008 $263,000 K12-009 163,000 K12-011 0…

Comfort Furniture Pty Ltd manufactures and distributes stylish and practical furniture for hospitality industry in Australia. The company’s balance sheet at December 31, 2016 is shown below:   Comfort Furniture Balance Sheet December 31, 2016   Assets     Current Assets     Cash   $7,500 Accounts receivable   $73,500 Finished goods inventory (1500 units)   $24,000 Total current assets   $105,000 Property, plant and equipment     Equipment $40,000   Less: Accumulated depreciation $10,000 $30,000 Total Assets:   $135,000       Liabilities     Notes payable   $25,000 Accounts payable   $45,000 Total Liabilities   $70,000       Stockholders’ Equity     Common stock $40,000   Retained earnings $25,000   Total stockholders’ equity   $65,000 Total liabilities and…

Business Analysis and Interpretation  Garden Enterprises has the following business transaction estimates relating to the final quarter of 2019.       $ ​​     $ ​​      $  ​​​​              OCTOBER           NOVEMBER       DECEMBER   Credit Sales     255600​               296200​               240000​​ Cash Sales​​​​   45000​     ​   47500​​   49000​​ Receipts from Accounts Receivable `1.​calculate​calculate​ calculate Wages​​​​                  50000                 50000                   70000​ Office Furniture​​​​   16050                 18950                           0 Prepayments             0        …

Myer Ltd acquired all the issued shares of Thompson Ltd on 1 July 2018 for $200 000. At this date Thompson Ltd recorded a dividend payable of $25 000 and equity of: Share capital                                    $ 54 000 Retained earnings                              36 000 Asset revaluation surplus                    18 000   All the identifiable assets and liabilities of Thompson Ltd were recorded at amounts equal to their fair values at acquisition date except for: Carrying amount                     Fair value Inventory                                             $ 10 000                                  $ 12 000 Machinery (cost $100 000)                      80 000                                    85 000   The machinery was considered to have a further 5-year life. Of…

Question 1   Events after the reporting period   Grace Ltd is finalising its financial statements for the reporting period ending 30 June 2019.  On 29 August 2019, before the financial statements have been finalised and authorised for issue, the company’s directors became aware of the following situations: Grace Ltd’s cloud service provider breached its contract, when the service was down for 14 days in July 2019, causing major disruptions to Grace Ltd’s business operations.  Grace Ltd commenced legal action against the cloud service provider on 2 August 2019, seeking $300,000 in damages for lost profits. On 5 August 2019, the government announced a new airport for Western Sydney.  The flight path for plane’s landing and taking off is directly above…