Question 1   Brandy Corporation owns 60 percent of Downer's voting shares. During 20X3, Brandy produced 50,000 computer desks at a cost of $82 each and sold 20,000 of them to Downer for $94 each. Downer sold 14,000 of the desks to unaffiliated companies for $130 each prior to December 31, 20X3, and sold the remainder in early 20X4 for $140 each. Both companies use perpetual inventory systems. Tax rate is 30 percent. Required What amounts of cost of goods sold did Brandy and Downer record in 20X3? What amount of cost of goods sold must be reported in the consolidated income statement for 20X3? Prepare the necessary journal entry to eliminate the intra-gorup sales and cost of goods sold.   Question…

The bank statement balance and cash account balance do not agree. The owner of E-Bite Limited has requested to prepare a bank reconciliation to reconcile these balances. For this purpose, the following information is given.   Deposits in transit are $9,800. Outstanding cheques totalled are $3200. The bank service charge is $24. The collection of note by the bank is $800. The bank statement balance is $9,000. The cash account balance is $14,824.

Sydney Ltd, commenced retail operations on 1 July 2019 by issuing 1,000,000 shares at @ $1.00 per share, payable in full on application. Company sales designer's leather bags to customers. There were no share issue costs. For the year ending 30 June 2021, the company recorded the following balances: Sales revenue $1,350,000 (Sales price: $1,500 each bag) Gain from trading securities $20,000 Cost of sales: need to be calculated (Cost: $1,000 each bag) Wages and salaries (administrative) $80,000 Wages and salaries (selling) $100,000 Office Rent $20,000 Advertising and distribution expense $10,000 Utility bills $4,000 Sales commission expense (sales employee) $28,000 Bad debt expense $8,000 Depreciation expense – Furniture? (need to be calculated) Depreciation expense – Building? (need to be calculated) Interest…

Green Tea’s data show the following information for the financial year, beginning July 2020:   July Aug. Sept. Oct. Nov. Estimated sales (units) 25,000 25,000 27,000 27,500 28,000 Sales price per unit $31 $31 $31 $31 $31 Direct labour per unit $1.75 $1.75 $1.50 $1.50 $1.50 Labour rate per hour $21 $21 $24 $24 $24   New machinery will be added in September. This machine will reduce the labour required per unit and increase the labour rate for those employees qualified to operate the machinery.   Finished goods inventory is required to be 20% of the next month’s requirements. Direct material requires 2.5 kg per unit at a cost of $5 per kg. The ending inventory required for direct materials is…

Smarty Inc. Ltd produces two different products with the following monthly data:   P1 P2 Total Selling price per unit $100 $12 Variable cost per unit $ 60 $ 3 Expected unit sales 21,000 14,000 35,000 Sales mix 60 percent 40 percent 100 percent Fixed costs $750,000   Assume the sales mix remains the same at all levels of sales.   Required: a) Calculate the weighted average contribution margin per unit. b) How many units in total must be sold to break even? c) How many units of each product must be sold to break even? d) How many units of each product must be sold to earn a monthly profit of $100,000? e) Prepare a contribution margin income statement for…

Takulah Co. Ltd has traditionally allocated its overhead based on machine hours but had collected this information to change to activity-based costing:               Required: i) How much overhead would be allocated to each unit under the traditional allocation method? ii) How much overhead would be allocated to each unit under activity-based costing? iii) Would you recommend a change to ABC costing for this company? Justify your answer

Job cost sheets show the following information: Required: a) Which job(s) are still in process at the end of January, and what is the cost of this job(s)? b) Which job(s) were completed at the end of February, and what is the cost of this completed job(s)? c) What are the balances in the work in process inventory, finished goods inventory, and cost of goods sold for March?

AFGAN Ltd owns all of the shares of BLINDA Ltd. In relation to the following intragroup transactions, all parts of which are independent unless specified, prepare the consolidation worksheet adjusting entries for preparation of the consolidated financial statements as at 30 June 2019. Assume an income tax rate of 30%. AFGAN Ltd sold inventory to BLINDA Ltd on 1 September 2018 for $27 000. This inventory had cost AFGAN Ltd $18 000. One-third of the inventory was sold by BLINDA Ltd to Goanna Ltd for $13 000 and one-third to Galah Ltd for $13 200. AFGAN Ltd manufactures certain items which it then markets through BLINDA Ltd. During the current period, AFGAN Ltd sold items for $18 000 to BLINDA Ltd…

The following financial statements of EMU Ltd and its subsidiary Cassowary Ltd have been extracted from their financial records at 30 June 2019.     EMU Ltd ($) Cassowary Ltd ($) Detailed reconciliation of opening and closing retained earnings     Sales revenue 1 725 000 1 450 000 Cost of goods sold (1 160 000) (595 000) Gross profit 565 000 855 000 Dividend revenue—from Cassowary Ltd 186 000   Management fee revenue 66 250   Profit on sale of plant 87 500   Expenses:     Administrative expenses (77 000) (96 750) Depreciation (61 250) (142 000) Management fee expense   (66 250) Other expenses (252 750) (192 500) Profit before tax 513 750 357 500 Tax expense 153 750…