Popeye Company is a metal and wood cutting manufacture, selling products to the home construction market. Consider the following data for the month of October, 2006. 1-1-2006 31-10-2006 Direct materials 100,000 125,000 Finished goods 250,000 375,000 Work-in-process 25,000 35,000   Transactions during the month: Rs Sand paper 5,000 Material-handling costs 175,000 Lubricants and Coolants 12,500 Miscellaneous indirect manufacturing labour 100,000 Direct manufacturing labour 750,000 Plant-leasing costs 135,000 Depreciation-plant and equipment 90,000 Property taxes on plant and equipment 10,000 Fire insurance on plant and equipment 7,500 Direct materials purchased 1,150,000 Sales revenues 3,400,000 Marketing promotions 150,000 Marketing salaries 250,000 Distribution costs 175,000 Customer-service costs 250,000   Required (i) Prepare an income statement with a separate supporting schedule of cost of goods manufactured.…

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Parent Ltd acquired 100% interest in Subsidiary Ltd on 1 January 2019. At that date, Subsidiary Ltd’s net assets were represented by its shareholders’ equity consisting of share capital of $100,000 and retained earnings of $70,000. On the date of the acquisition, Parent Ltd and Subsidiary Ltd agreed the following; Subsidiary’s Land had a fair value of $180,000 (carrying amount $100,000). Subsidiary had a patent with a fair value of $100,000 (was not previously recognised in Subsidiary’s book). The patent is to amortise over 10 years on straight line basis. Subsidiary had inventories that were $30,000 lower than fair value. These inventories were sold by 30 June 2019. The following intra-company transactions occurred during the year ending 30 June 2020. On…

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Magnificent Constructions Ltd purchased a truck costing $105,000. It is expected to have a residual value of $5,000 at the end of its useful life of 10 years or 260,000 kilometres.  Ignore GST.   Required: Assume the truck was purchased on 1 July 2018 and that the accounting period ends on 30 June. Calculate the depreciation expense for the third year using each of the following depreciation methods straight-line diminishing balance (depreciation rate has been calculated as 20%) units of production (assume the truck was driven 30,000 km, 50,000 km, 60,000 km respectively in year 1, 2 and 3). Prepare partial financial statement that shows how the truck appear in the financial statement prepared at the end of year 3 using…

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The following information relates to the inventory of a retailing business named Sports Ltd. during the month of October. Ignore GST. Units Units cost ($) Total cost ($) 1/10 Beginning inventory 315 110 34,650 5/10 Sales @ $250 180 ? 10/10 Purchase 225 116 26,100 12/10 Sales @ $250 165 ? 15/10 Purchase 135 122 16,470 20/10 Sales @ $250 170 ? 23/10 Purchase 205 130 26,650   Sports Ltd uses the Perpetual Inventory System.   Required: Determine the Ending inventory and Cost of Sales for the month of October, using the average method. Contrast the Perpetual and Periodic Inventory systems.

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During June 2020, the following transactions occurred in Michael Ltd. Revenue earned on credit, $869,250. Sales returns, $18,050 Cash collected from Accounts receivable, $875,000.   Accounts Receivable has a debit balance of $637,167 and Allowance for Doubtful Debts has a credit balance of $9,075 at 1 June 2020. Ignore GST.   Based on percentage of net credit sales method and past experience, the firm’s bad debts expense for June has been estimated at 1% of its net credit sales. Ignore GST.   Required: Prepare general journal entries to record the transactions in June. Determine the bad debt expense for June and prepare necessary adjusting entries to adjust the bad debts expense. Prepare the relevant parts of the balance sheet that show…

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The cash at bank ledger at SunBoost Ltd. has a debit balance of $37,932 at the end of 31 March, while the bank statement prepared at 31 March has a credit balance of $50,580. The following information is produced by comparing the records of the SunBoost Ltd with the bank statement for March. Deposits of $6,270 is not reflected on bank statement Cheques of $18,703.5 is not presented to the bank A bank fee of $75 is charged by the bank Interest earned on bank account is $37.5 A dishonoured cheque was received from a client Eric S., $1,950 A note receivable of $1,932 was collected from a customer. It was paid via electronic transfer. Cheque issued for advertising expense should…

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David Smith owns a car hiring business operating under the name Go Drive. The unadjusted trial balance of Go Drive at 31 May 2020 is shown below (ignore GST). Go Drive Trial Balance As at 31 May 2020 Account Debit Credit Cash at bank 48,825 Accounts receivable 54,600 Fuel supplies 8,460 Prepaid advertising 5,970 Prepaid insurance 5,400 Office Furniture 24,000 Motor vehicles 862,500 Accumulated Depreciation - Vehicle 165,000 Accounts payable 31,200 Accrued interest 4,500 Unearned revenue 33,390 Loan payable 283,000 David S., Capital 423,010 David S., Drawings 60,900 Car hire revenue   299,200 Wages expense 122,430   Fuel and oil expense 23,520 Electricity expense 15,000 Mis. Expenses 7,695 1,239,300 1,239,300   The entity prepares financial statements every month. The information below…

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X Ltd produces a large number of products including the A and the B. The A is a complex product of which 2,000 are made and sold in each period. The B is a simple product of which 50,000 are made and sold in each period. The A requires one direct labour hour to produce and the B requires 0.6 direct labour hours to produce. X Ltd employs 24 salaried support staff and a direct labour force that works 800,000 direct labour hours per period. Overhead costs are £1,000,000 per period. The support staff are engaged in three activities - 12 staff engaged in receiving 50,000 consignments of components per period, Six staff engaged in receiving 20,000 consignments of raw materials…

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May Limited manufactures expresso machines. Each machine has a wholesale price of £350. Variable costs of manufacture are £112 per machine. Because of increased competition, the sales director has reduced the level of sales that the company can realistically expect to make. The actual sales level in 2018 was 2650 machines, but the budget for 2019 is only 2150 machines. Fixed costs for the year are budgeted at £660 000.   Required:  Calculate the total contribution that can be expected at a sales level of 2150 machines. Calculate the break-even point in units (to nearest whole unit). Calculate the break-even point in units if the selling price were to be increased by 15% (to nearest whole unit)

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