Prepare an Income Statement of Company Alfex as at 31 Dec. 2020. a) Write off (in minus) of short-term financial assets 9 000 b) Other costs by nature 4 000 c) Change in inventories of traded goods + 2 000 d) Revenue from sale of building 50 000 e) Income tax 10% f) Revenue from sale of traded goods 12 000 g) Retained profits from previous years 10 000 h) Accumulated depreciation of building 49 000 i) Historical cost of building 102 000
Q: Notting Hill Hospital needs to expand its facilities and desires to obtain a new building on a piece…
A: GIVEN Notting Hill Hospital needs to expand its facilities and desires to obtain a new building…
Q: Lathrop Inc. purchased equipment on January 1, 2020, for $150,000 cash plus a note payable. The fair…
A: Date Accounts, explanation and title Debit Credit 1 January 2020 Equipment (542,666 -…
Q: 6. Cartman makes Supersized Cheezy-Poofs. Cartman determined the standards for each unit (bag) of…
A: Disclaimer: “Since you have posted a question with multiple sub-parts, we will solve first three…
Q: he Wendt Corporation reported $45 million of taxable income. Its federal tax rate was 21% (ignore…
A: The amount of income needed to determine the taxes owing by an individual or a business is referred…
Q: A company resident in Jamaica purchased the following assets in 2021: Asset Cost $ Honda Motor car…
A: The capital deduction rate for Trinidad and Tobago for buildings and improvements, motor vehicles,…
Q: Maribeth Company made the following expenditures relating to Product Zee: Legal costs to file a…
A: An expense in accounting is the money spent and the charges incurred by a firm in order to earn…
Q: MC12 On January 1, 2019, Villanueva Company classified noncurrent assets as held for sale that had a…
A: Assets Held for Sale The measurement of assets held for sale either by the carrying amount or the…
Q: Calculate the total Social Security and Medicare tax burden on a sole proprietorship earning 2021…
A: Social security is the taxes collected by the government from the employer and employers to provide…
Q: Equipment acquired on January 8 at a cost of $100,870, has an estimated useful life of 12 years, has…
A: Depreciation represents the reduction in the value of an asset over a useful life of the asset. The…
Q: Which of the given options, is a limitation of financial reporting? (choose one answer only) a.…
A: Financial reporting is also written as financial results of the company. In simple, it is…
Q: C Co established a petty cash fund of P40,000. Fund disbursements during the period was P27,363. The…
A: In the given question, total cash disbursements from the petty cash fund during the period was P…
Q: Firing Department RM 405,000 Polishing Department Total RM RM Overhead 110,000 515,000 Direct labour…
A: The predetermined overhead rate is calculated as estimated overhead cost divided by estimated base…
Q: Activity-base usage data for each line of insurance were retrieved from the corporate records and…
A: Disclaimer: “Since you have posted a question with multiple sub-parts, we will solve the first three…
Q: On January 1, 2023, Jones Corporation issued $2.982.000, 9%, 5-year bonds with interest payable on…
A: Calculation of workings: Interest expense on bonds on July 1, 2023 = Sales value of the bonds x…
Q: Audio-2-Go, Inc., manufactures MP3 players. Models A-1, A-2, and A-3 are small and light. They are…
A: Sales forecast refers to the procedure of estimating the future revenue through predicting the…
Q: The single largest cost item for universities is salaries/wages. The UUS university has asked you to…
A: Here discuss about the control over the reduction in the cost which are associated with the…
Q: Ping Inc. granted a franchise to Tito Inc. to operate its registered business of barbershop. The…
A: GIVEN Ping Inc granted a franchise to Tito Inc to operate its registered business of barbershop.…
Q: A company had the following amounts at the end of the year: Cash $ 11,200 Income Tax Expense 1,500…
A: Income statement: The income statement shows the company's revenues and expenses earned during the…
Q: ent pa
A: Brief Leas Accounting
Q: 000 are due December 31 for 10 years. The equipment’s useful life is 10 years, and the interest…
A: Given: Annual lease payments of P400,000 Interest 10% First lease payment P 2,700,000
Q: Discuss the two (2) other taxes that should be considered when setting up operations in either…
A: Governments levy taxes on its population to produce revenue for initiatives. It benefit the…
Q: PTI Inc., located in a country which has a capital gains tax, conducted the following transactions:…
A: In Jamaica there exist no capita gain tax, and therefore in Jamaica another tax known as transfer…
Q: Yale Corporation issued to Zap Corporation $36,000, 8% (cash interest payable semiannually on July 1…
A: Working: Semiannual interest = Face value of the bonds x rate of interest x no. of months / 12 =…
Q: The following information has been extracted from the books of accounts of Pabz, Inc. for the…
A: Answer In the given question, the unadjusted balance of allowance for doubtful accounts is 42,500.…
Q: IASB requires the use of _____ as a measurement basis. a. historical cost b. not given c. current…
A: Introduction:- The International Accounting Standards Board (IASB) issued Framework for the…
Q: 3. Which of the following is NOT an issue that prevents reliance on the statement of cash flows in…
A: free cash flow are refers to the the cash that is really available with the company in order to meet…
Q: 15-Assume that your senior manager provided you the following data to find out the breakeven point…
A: Introduction: Break even point in sales units: The level where there is no profit nor loss to the…
Q: On September 30, 20x1, the warehouse of A Company for inventory in progress and all inventories…
A: In such type of problems it is best to go step by step and by preparing memorandum accounts to find…
Q: for the coming year, 2020. The first step is to plan for the first quarter of that coming year. The…
A: The answer has been prepared below.
Q: On January 1, 2020, Edgar Company entered into a six-year lease with a lessor. Annual lease payments…
A: a)Annual lease payments=P1,200,000 Annual executory payments=P200,000 PV of an ordinary annuity of 1…
Q: Novo, Inc., wants to develop an activity flexible budget for the activity of moving materials.Novo…
A: Disclaimer: “Since you have posted a question with multiple sub-parts, we will solve first three…
Q: Variable cost per unit cost per unit (based on capacit afety Products Division of Wige ucts,…
A: Transfer pricing The price that one division of a firm charges another division for products and…
Q: 5.6A Applications were invited by the directors of Grobigg Ltd for 150,000 of its £1 ordinary shares…
A: Company means a form of business where shares are allotted to the owner of the company and…
Q: Alice, Melvyn and Lorely are partners with capital balances of P100,800; P162,000 and P57,000…
A: Partnership
Q: Required information [The following information applies to the questions displayed below.] On…
A: Introduction:- The act of recording or keeping track of any financial or non-financial action is…
Q: On January 1, 2023, Jones Corporation issued $2.982.000, 9%, 5-year bonds with interest payable on…
A: Interest expense on bonds is calculated at the market rate of interest on the issue value of the…
Q: 9. Lt. Dan Corporation invested S80,000 in a manufacturing equipment. The salvage value of the asset…
A: The rate of return on investment shows the percentage of return earned by the company on the money…
Q: The following financial information is from Shovels Construction Company: Accounts Payable $15,000…
A: Introduction: Current Assets: The Assets which can be easily converted in to cash with in a 1 year…
Q: rtners as of June 1, 2021
A: If nothing is given in the agreement then the distribution of profit and loss in accordance with the…
Q: for 5 years. Sale price at fair value 20,000,000 Carrying amount of building 24,000,000 Annual…
A: Cost of the right use of assets refers to the right of a lessee to utilize the asset till the life…
Q: Consider the following information for three stocks, Stock A, Stock B, and Stock C. The returns on…
A: GIVEN Consider the following information for three stocks, Stock A, Stock B, and Stock C. The…
Q: In depreciation analysis, the method that will yield the highest book value at the end of n years is…
A: We’ll answer the first question since the exact one wasn’t specified. Please submit a new question…
Q: a. If Canace Company, with a break-even point at $244,200 of sales, has actual sales of $370,000,…
A: Introduction: Margin of safety: Deduction of Break even sales from the current sales value Derives…
Q: Replacement analysis should be done at the end of the useful life of the property.
A: Replacement analysis is the analysis in which the company analyse the different aspects of the…
Q: Lucille Corporation has 70,000, 6% ,20 par cumulative, participating preference shares outstanding…
A: Cumulative Preference Share: Cumulative preferred stock is a form of preferred stock that has a…
Q: Palmgren Company produces consumer products. The sales budget for four months of the year is…
A: Opening inventory for July = July sales × 25% =31000×25% = 7750
Q: Give and discuss at least 3 principles of international law.
A: International law (IL) refers to the conceptual guidelines, standards, rules as well as norms which…
Q: Assume the following data for Mother Earth LLC: Unit Selling Price $ 230.00 Unit Variable…
A: Disclaimer: “Since you have posted a question with multiple sub-parts, we will solve first three…
Q: Adam's Athletic Apparel has 1,600 shares of 5%, $100 par value preferred stock the company issued at…
A: Dividends are paid first to preferred stockholders and the remaining balance is paid to common…
Q: Joy Company acquired an asset costing P5,239,000. The asset is leased on January 1, 2020 to another…
A:
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
Prepare an Income Statement of Company Alfex as at 31 Dec. 2020.
a) Write off (in minus) of short-term financial assets 9 000
b) Other costs by nature 4 000
c) Change in inventories of traded goods + 2 000
d) Revenue from sale of building 50 000
e) Income tax 10%
f) Revenue from sale of traded goods 12 000
g) Retained profits from previous years 10 000
h)
i) Historical cost of building 102 000
Step by step
Solved in 2 steps
- Refer to RE22-2. Assume Heller Company had sales revenue of 510,000 in 2019 and 650,000 in 2020. Prepare Hellers partial income statements (through gross profit) for 2019 and 2020. RE22-2 Heller Company began operations in 2019 and used the LIFO method to compute its 300,000 cost of goods sold for that year. At the beginning of 2020, Heller changed to the FIFO method. Heller determined that its cost of goods sold under FIFO would have been 250,000 in 2019. For 2020, Hellers cost of goods sold under FIFO was 360,000, while it would have been 410,000 under LIFO. Heller is subject to a 21% income tax rate. Compute the cumulative effect of the retrospective adjustment on prior years income (net of taxes) that Heller would report on its retained earnings statement for 2020.Gray Companys financial statements showed income before income taxes of 4,030,000 for the year ended December 31, 2020, and 3,330,000 for the year ended December 31, 2019. Additional information is as follows: Capital expenditures were 2,800,000 in 2020 and 4,000,000 in 2019. Included in the 2020 capital expenditures is equipment purchased for 1,000,000 on January 1, 2020, with no salvage value. Gray used straight-line depreciation based on a 10-year estimated life in its financial statements. As a result of additional information now available, it is estimated that this equipment should have only an 8-year life. Gray made an error in its financial statements that should be regarded as material. A payment of 180,000 was made in January 2020 and charged to expense in 2020 for insurance premiums applicable to policies commencing and expiring in 2019. No liability had been recorded for this item at December 31, 2019. The allowance for doubtful accounts reflected in Grays financial statements was 7,000 at December 31, 2020, and 97,000 at December 31, 2019. During 2020, 90,000 of uncollectible receivables were written off against the allowance for doubtful accounts. In 2019, the provision for doubtful accounts was based on a percentage of net sales. The 2020 provision has not yet been recorded. Net sales were 58,500,000 for the year ended December 31, 2020, and 49,230,000 for the year ended December 31, 2019. Based on the latest available facts, the 2020 provision for doubtful accounts is estimated to be 0.2% of net sales. A review of the estimated warranty liability at December 31, 2020, which is included in other liabilities in Grays financial statements, has disclosed that this estimated liability should be increased 170,000. Gray has two large blast furnaces that it uses in its manufacturing process. These furnaces must be periodically relined. Furnace A was relined in January 2014 at a cost of 230,000 and in January 2019 at a cost of 280,000. Furnace B was relined for the first time in January 2020 at a cost of 300,000. In Grays financial statements, these costs were expensed as incurred. Since a relining will last for 5 years, Grays management feels it would be preferable to capitalize and depreciate the cost of the relining over the productive life of the relining. Gray has decided to nuke a change in accounting principle from expensing relining costs as incurred to capitalizing them and depreciating them over their productive life on a straight-line basis with a full years depreciation in the year of relining. This change meets the requirements for a change in accounting principle under GAAP. Required: 1. For the years ended December 31, 2020 and 2019, prepare a worksheet reconciling income before income taxes as given previously with income before income taxes as adjusted for the preceding additional information. Show supporting computations in good form. Ignore income taxes and deferred tax considerations in your answer. The worksheet should have the following format: 2. As of January 1, 2020, compute the retrospective adjustment of retained earnings for the change in accounting principle from expensing to capitalizing relining costs. Ignore income taxes and deferred tax considerations in your answer.Dela Rosa Company Company The income statement for the year ended December 31, 2020, for Dela Rosa Company Comnany contains the following condensed information. Dela Rosa Company Company Income Statement For the Year Ended December 31, 2X20 Sales revenue Cost of goods sold Operating expenses (excluding depreciation) Depreciation expense Loss on disposal of plant assets Income before income taxes Income tax expense Net income P6,583,000 P2,810,000 2,086,000 880,000 24.000 5,800.000 783,000 353,000 P430,000 The P24,000 loss resulted from selling equipment for P270,000 cash. The equipment was purchased at a cost of P750,000. The following balances are reported on Dela Rosa's comparative balance sheets at December 31, Dela Rosa Company Company Comparative Balance Sheets Cash Accounts receivable Inventory Accounts payable 2X20 P672,000 775,000 834,000 521,000 2X19 P130,000 610,000 867,000 501,000 Income tax expense of P353,000 represents the amount paid in 2020. Dividends declared and paid…
- KM Manufacturing Company The income statement for the year ended December 31, 2020, for KM Manufacturing Company contains the following condensed information. KM Manufacturing Company Income Statement For the Year Ended December 31, 2X20 Sales revenue Cost of goods sold Operating expenses (excluding depreciation) Depreciation expense Loss on disposal of plant assets Income before income taxes P6,583,000 P2,810,000 2,086,000 880,000 24,000 5,800,000 783,000 353,000 P430,000 Income tax expense Net income The P24,000 loss resulted from selling equipment for P270,000 cash. The equipment was purchased at a cost of P750,000. The following balances are reported on KM's comparative balance sheets at December 31. KM Manufacturing Company Comparative Balance Sheets 2X20 2X19 Cash Accounts receivable Inventory Accounts payable P672,000 775,000 834,000 521,000 P130,000 610,000 867,000 501,000 Income tax expense of P353,000 represents the amount paid in 2020. Dividends declared and paid in 2020…Lancer Company's preliminary income statement for 2021 and its reported income statement for 2020 are given below. 2021 2020 1,350,000 (648,0001 702,000 (172,500) (162.000 367.500 Sales Revenues 1,320,000 (630.000 690,000 Cost of Goods Sold Gross Profit Depreciation Other Expenses (172,500) (153.000 364.500 Net Income Lancer's records reveal the following information: (1) Lancer neglected to record S8,000 of supplies expense at the end of 2020, so the supplies inventory was overstated at the end of 2020. Consequently, the supplies expense computed for 2021 included the additional amount of supplies used in 2020. (2) On 1/1/19, Lancer purchased a machine for $120,000. Although the machine was expected to have an eight-year life, it was erroneously expensed in recording the purchase. The appropriate depreciation method for this machine is double-declining-balance with no residual. (3) At the end of 2021, Lancer decided to change its inventory costing method from the FIFO costing method…The profit or loss section of the statement of comprehensive income of Reek Company for the year ended December 31, 2020 is reproduced below: Sales P 6,100,000 Cost of goods sold 3,700,000 Gross profit P2,400,000 Gain on sale of equipment 100,000 Salaries expense -820,000 Insurance expense -380,000 Depreciation expense 220,000 Profit before interest and income tax P1,080,000 Interest expense 120,000 Profit before income tax P960,000 Income tax expense 288,000 Profit P672,000 The following information is also available: Decrease in accounts receivable P120,000 Increase in inventory 280,000 Decrease in accounts payable 160,000 Increase in salaries payable 100,000 Increase in prepaid insurance 180,000 Decrease in interest payable 30,000 Increase in income tax payable 18,000 Required: Prepare Reek Company’s 2020 Statement of Cash Flows using the direct method and Indirect Method.
- KM Manufacturing Company The income statement for the year ended December 31, 2020, for KM Manufacturing Company contains the following condensed information. KM Manufacturing Company Income Statement For the Year Ended December 31, 2X20 Sales revenue Cost of goods sold Operating expenses (excluding depreciation) Depreciation expense Loss on disposal of plant assets Income before income taxes P6,583,000 P2,810,000 2,086,000 880,000 5,800,000 783,000 353,000 P430,000 24,000 Income tax expense Net income The P24,000 loss resulted from selling equipment for P270,000 cash. The equipment was purchased at a cost of P750,000. The following balances are reported on KM's comparative balance sheets at December 31. KM Manufacturing Company Comparative Balance Sheets Cash Accounts receivable Inventory | Accounts payable 2X20 P672,000 775,000 834,000 521,000 2X19 P130,000 610,000 867,000 501,000 Income tax expense of P353,000 represents the amount paid in 2020. Dividends declared and paid in 2020…Income S.atement For the Year Ended June 30, 2020 Net sales P2,430,500 Cost of goods sold (including depreciation of P191,500) P1,073,000 Operating expenses (including depreciation of P100,000) 500,000 7,500 (26,000) (15,000) (44,000) 356,000 P1,851,500 P 579,000 Interest expense Gain on sale of equipment Gain on sale of trading securities Unrealized holding gain on trading securities Income tax Total Net income Texas Company Balance Sheets June 30 2020 2019 Assets P442,000 325,000 P532,000 275,000 141,500 168,500 450,000 43,000 1,095,000 352,000 P3,057,000 Cash Trading Securities(market) Accounts receivable 80,500 Inventories 86,000 Investment in Associates (cost) 43,000 321,500 Land Buildings (net) Equipment (net) Total assets 242,500 P1,540,500 Liabilities & Equity P 93,500 P107,500 50,000 41,500 156,500 Accounts payable Short-term bank loans payable Accrued operating expenses Income tax payable Bonds payable (net) Common stock, P10 par value Additional paid in capital Retained…The following information is related to Vaughn Company for 2020. Retained earnings balance, January 1, 2020 $1,156,400 Sales Revenue 29,500,000 Cost of goods sold 18,880,000 Interest revenue 82,600 Selling and administrative expenses 5,546,000 Write-off of goodwill 967,600 Income taxes for 2020 1,467,920 Gain on the sale of investments 129,800 Loss due to flood damage 460,200 Loss on the disposition of the wholesale division (net of tax) 519,200 Loss on operations of the wholesale division (net of tax) 106,200 Dividends declared on common stock 295,000 Dividends declared on preferred stock 94,400 Vaughn Company decided to discontinue its entire wholesale operations (considered a discontinued operation) and to retain its manufacturing operations. On September 15, Vaughn sold the wholesale operations to Rogers Company. During 2020, there were 500,000 shares of common stock outstanding all year. Partially correct answer…
- Selected information about income statement accounts for the Reed Company is presented below (the company's fiscal year ends on December 31): Sales revenue Cost of goods sold Administrative expense Selling expense Interest revenue Interest expense Loss on sale of assets of discontinued component 2024 2023 $5,250,000 $4,350,000 2,170,000 3,030,000 970,000 845,000 530,000 472,000 167,000 157,000 234,000 Sales revenue Cost of goods sold Administrative expense Selling expense Operating income before taxes On July 1, 2024, the company adopted a plan to discontinue a division that qualifies as a component of an entity as defined by GAAP. The assets of the component were sold on September 30, 2024, for $116,000 less than their book value. Results of operations for the component (included in the above account balances) were as follows: 234,000 116,000 1/1/2024-9/30/2024 $ 570,000 (375,000) (67,000) (37,000) $ 91,000 2023 $ 670,000 (422,000) (57,000) (37,000) $ 154,000 In addition to the…The following information is related to Dickinson Company for the year ended December 31, 2020. Retained earnings balance, January 1, 2020 $980,000 25,000,00 Sales revenue 16,000,00 Cost of goods sold Gain on life insurance proceeds 70,00-| Selling, general, and administrative expenses 4,700,000 Write-off of goodwill 820,000 Gain on the sale of investments 110,000 Loss due to write-down of inventory to NRV Loss on the disposition of the wholesale division 390,000 530,000 Income tax rate 30% Dividends declared on common stock 250,000 Dividends declared on preferred stock Common shares outstanding 80,000 500,000 Dickinson Company decided to discontinue and sell its entire wholesale operations. The disposal is considered a discontinued operation. Instructions: Prepare a retained earnings statement.Sage Company's income statement for the year ended December 31, 2020, contained the following condensed information. Service revenue $848,000 Operating expenses (excluding depreciation) Depreciation expense Loss on sale of equipment Income before income taxes $628,000 61,000 26,000 715,000 133,000 Income tax expense 40,000 $93.000 Net income Sage's balance sheet contained the following comparative data at December 31. 2020 2019 Accounts receivable $37.00 $52,000 Accounts payable 39.000 32,000 Income taxes payable 4,000 8.400 (Accounts payable pertains to operating expenses.) Prepare the operating activities section of the statement of cash flows using the direct method. SAGE COMPANY Statement of Cash Flows (Partial) 24 %24 >