from the following particulars available from the branch prepare branch trading and 564338

Aug 29, 2021 | Uncategorized

M/s Aditya & Co with its H.O. in Chennai invoiced goods to its branch at Delhi at 20% less than the catalogue price which is cost plus 50% with instructions that cash sales were to be made at invoice price and credit sales at catalogue price. Discount on credit sales at 15% on prompt payment will be allowed.

From the following particulars available from the branch, prepare Branch Trading and Branch Profit and Loss Account for the year ended Mar 31, 2010 in the H.O. books, so as to show the actual profit or loss of the branch for the year 2009–2010.

Opening stock (invoice price) Rs 24,000; Goods received from H.O. (invoice price) Rs 2,64,000; Opening Debtors Rs 20,000; Sales Cash Rs 92,000; Sales Credit Rs 2,00,000; Cash realised from Debtors Rs 1,71,270; Discount allowed to debtors Rs 26,730; Expenses at the branch Rs 12,000; Remittance to H.O. Rs 2,40,000; Closing Debtors Rs 22,000; Closing Cash in hand Rs 11,270; Closing Stock (invoice price) Rs 30,000.

It was reported that a part of the stock at the branch was lost by fire during the year whose value is to be ascertained and a provision should be made for discount to be allowed to debtors as on Mar 31, 2010 on the basis of the year’s trend of prompt payment.

a h o sends goods to its branch at cost plus 80 goods are sold to customers at cost 564340

Aug 29, 2021 | Uncategorized

A H.O. sends goods to its branch at cost plus 80%. Goods are sold to customers at cost plus 100%. From the following particulars ascertain the profits made at the H.O.

Note: Sales at the H.O. are made at wholesale basis.

from the following particulars calculate the profit made at h o and cochin for the y 564344

Aug 29, 2021 | Uncategorized

X Ltd. has retail branch at Cochin. Goods are sold to customers at cost plus 100%. The wholesale price is cost plus 80%. Goods are invoiced to Cochin at wholesale price. From the following particulars calculate the profit made at H.O. and Cochin for the year 2009:

Note: Sales at H.O. are made on wholesale basis; stock at branch is valued at invoice price.

from the following particulars prepare trading account of the h o and of the branch 564345

Aug 29, 2021 | Uncategorized

Good wills & Co. of Kolkata (H.O.) has a branch at Bhubaneswar. The goods are supplied to branch at 25% less than the list price which is cost plus 100% of cost. From the following particulars, prepare trading account of the H.O. and of the branch:

Note: The H.O. supplies goods to its dealers at the same price at which they are supplying

pass journal entries to rectify or adjust the following in the books of both the h o 564347

Aug 29, 2021 | Uncategorized

Pass journal entries to rectify or adjust the following in the books of both the H.O. and the branch for the year ending on Mar 31, 2010:

1. Goods costing Rs 12,000 purchased by the branch, but payment made by the H.O. The H.O. debited the amount to its own Purchases Account.
2. Depreciation Rs 9,720 in respect of branch assets whose accounts are kept in H.O. books.
3. Expenses Rs 22,500 to be charged to the branch for the work done on its behalf by the H.O.
4. Goods sent by the H.O. to the branch, Rs 72,500, not yet received by the branch.
5. A remittance of Rs 6,750 made by the branch to its H.O. not yet received by the H.O.
6. The branch paid Rs 240 dividend to a local shareholder on behalf of the H.O.
7. Depreciation @ 15% p.a. is to be provided on machinery at branch costing Rs 50,000, the account of which is maintained in the books of H.O.
8. A sum of Rs 3,330 being arrears of call money from a shareholder was received by the branch in Mar but was not communicated to the H.O. till Apr 10.
9. Goods worth Rs 60,000 have been supplied by the branch to another branch under the instructions from the H.O.
10. Branch has received Rs 12,500 from a customer of H.O.

pass journal entries to record these matters in the h o books and write up the two b 564348

Aug 29, 2021 | Uncategorized

A Mumbai Company whose accounting year ends on Mar 31 has two branches – one at Bhopal and other at Patna. The branches keep a complete set of books. On Mar 31, 2010, the Bhopal and Patna branches accounts in Mumbai office books showed debit balances of Rs 91,350 and 1,35,000, respectively, before taking the following information into account:

1. Goods valued Rs 6,000 were transferred from Bhopal to Patna under instructions from H.O.
2. The Bhopal branch collected Rs 7,500 from a Bhopal customer of the H.O.
3. The Patna branch paid Rs 15,000 for certain goods purchased by the H.O. in Patna.
4. Rs 15,000 remitted by Bhopal branch to Mumbai office on Mar 26, 2010 was received on Apr 2 only.
5. The Patna branch received on behalf of the H.O. Rs 4,500 as dividend from a Patna Company.
6. For the year 2009–2010, the Bhopal branch showed a net loss of Rs 3,750 and the Patna branch a net profit of Rs 16,200.

Pass journal entries to record these matters in the H.O. books and write up the two branch accounts there in.

from the following inter branch transactions in june 20 make the entries in the book 564349

Aug 29, 2021 | Uncategorized

A Chennai H.O. passes one entry at the end of each month to adjust the position arising out of inter branch transactions during the month. From the following inter branch transactions in June 20, make the entries in the books of Chennai H.O. (Give details of the workings)

1. Mumbai Branch:
   1. Received goods from Kolkatta branch Rs 18,000 and Hyderabad branch Rs 12,000.
   2. Sent goods to Hyderabad branch Rs 30,000 and Kolkatta branch Rs 24,000.
   3. Sent acceptances to Kolkatta branch Rs 12,000 and Hyderabad branch Rs 6,000.
2. Delhi Branch: [In addition to (a) above]
   1. Received goods from Kolkatta branch Rs 30,000 and Mumbai branch Rs 12,000
   2. Cash sent to Kolkatta branch Rs 6,000 Mumbai branch Rs 12,000
3. Kolkatta Branch: [In addition to (a) & (b)];
   1. Sent goods to Hyderabad branch Rs 18,000
   2. Received Bills receivable from Hyderabad branch Rs 180,000
   3. Received cash from Hyderabad branch Rs 10,000

from the following inter branch transactions in nov 20 make the entry in the books o 564350

Aug 29, 2021 | Uncategorized

H.O. passes adjustment entry at the end of each month to adjust the position arising out of inter branch transactions during the month. From the following inter branch transactions in Nov 20, make the entry in the books of H.O.:

1. Delhi Branch
   1. Received goods: Rs 30,000 from Mumbai branch, Rs 20,000 from Nagpur branch
   2. Sent goods: Rs 50,000 to Nagpur, Rs 40,000 to Mumbai
   3. Received Bills Receivable Rs 30,000 from Nagpur
   4. Sent acceptances Rs 20,000 to Mumbai Rs 10,000 to Nagpur
2. Chennai Branch:
   1. Received goods: Rs 50,000 from Mumbai, Rs 20,000 from Delhi
   2. Cash sent: Rs 10,000 to Mumbai; Rs 30,000 to Delhi
3. Mumbai Branch:
   1. Sent goods to Nagpur: Rs 30,000
   2. Paid Bills payable: Rs 20,000 to Nagpur; Rs 20,000 cash to Nagpur.

the h o of a business and its branch kept their own books and prepares its own profi 564351

Aug 29, 2021 | Uncategorized

The H.O. of a business and its branch kept their own books and prepares its own profit and loss account. The following are the balances appearing in the two sets of books as on Dec 31, 2009 after ascertainment of profit and after making all adjustments except these referred to below:

Set out balance sheet of the business as on Dec 31, 2009 and the Journal entries necessary (in both the sets of books) to record the adjustments dealing with the following:

1. On Dec 31, 2009, the branch had sent a cheque of Rs 5,000 to the H.O. and not received by H.O. not credited to branch account till Jan 5, 2010.
2. Goods valued Rs 4,200 had been forwarded by the H.O. to branch and invoiced on Dec 29, 2009, but were not received by the branch nor dealt with in branch’s books till Jan 9, 2010.
3. The profit shown by the branch is to be transferred to the H.O. books.
4. Branch assets and liabilities are to be recorded in the books of the H.O.

the following is the trial balance of goa branch as on dec 31 2009 564352

Aug 29, 2021 | Uncategorized

The following is the Trial Balance of Goa Branch as on Dec 31, 2009.

Stock at Branch on Dec 31, 2009 was valued at Rs 15,400. Account of Goa Branch in the H.O. books stood at Rs 920 (Debit). On Dec 26, 2009, the H.O. forwarded goods to the value of Rs 7,400 to the branch where they were received on Jan 5, 2010.

1. Prepare Trading and Profit and Loss Account of Goa Branch for the year ended Dec 31, 2009 and its Balance Sheet on that date.
2. Pass journal entries in the books of H.O. to incorporate the above shown trial balance
3. Show Goa Branch Account as it would be closed in H.O. Ledger

the difference between the balances of the current account in the two sets of books 564353

Aug 29, 2021 | Uncategorized

Ashok Ltd. has its H.O. in Chennai and a Branch in Delhi where as separate set of books are used. The following are the trial balances extracted on Mar 31, 20.

The difference between the balances of the current account in the two sets of books is accounted for as follows:

1. Cash remitted by the branch on Mar 31, but received by the H.O. on Apr 2, Rs 6,000.
2. Stock stolen in transit from H.O. and charged to the branch by the H.O. but not credited to H.O. in the branch books as the branch manager declined to admit any liability (not covered by insurance) Rs 3,400.

You are required to prepare the Branch Current Account in the H.O. books after incorporating Branch Trial Balance through Journal. Also prepare the company’s Balance Sheet as on Mar 31, 20–.

the following are the trial balances of vrs ltd chennai and its delhi branch as on d 564354

Aug 29, 2021 | Uncategorized

The following are the Trial Balances of VRS Ltd Chennai, and its Delhi Branch as on Dec 2009:

Closing Stock at H.O. was Rs 77,400; and at Delhi Rs 57,400. Depreciation is to be provided @ 10% p.a. on machinery and @ 15% p.a. on furniture. Rent still payable in respect of Dec 2009 for the branch godown is Rs 600.

You are required to prepare the Trading and Profit and Loss Account in Columnar form and the Consolidated Balance Sheet. Also show the Branch Account.

using examples illustrate the complexities which may make it difficult for the vario 564360

Aug 29, 2021 | Uncategorized

‘At their simplest, accounts comprise a summary of cash receipts and payments. Concepts such as accruals and substance over form lead to increased complexity and may make it difficult for a user to interpret the results and financial position of a company. The key focus of future accounting standards and legislation should be simplification, not increased disclosure and more complex rules.’

Using examples, illustrate the complexities which may make it difficult for the various users to understand published accounts. Comment on any recent action taken by the Accounting Standards Board or the Government which has affected the complexity of accounts and discuss, reaching a conclusion, whether simplification of company accounts should be a key objective for the Accounting Standards Board and the Department of Trade and Industry.

explain why the frrp disagreed with s plc rsquo s depreciation policies and explain 564361

Aug 29, 2021 | Uncategorized

The following is an extract from a press note published by the Financial Reporting Review Panel (FRRP):

FINDINGS OF THE FINANCIAL REPORTING REVIEW PANEL IN RESPECT OF THE ACCOUNTS OF S PLC FOR THE YEAR ENDED 31 MARCH 2001

The Financial Reporting Review Panel has had under consideration the Report and Accounts of S plc for the year ended 31 March 2001 and has discussed them with the company’s directors.

The matters raised by the Panel related to aspects of the company’s implementation of Financial Reporting Standard (FRS) 15 – Tangible Fixed Assets, regarded as standard in respect of financial statements relating to accounting periods ending on or after 23 March 2000.

The company’s stated accounting policy in respect of properties was not to provide any depreciation on any given property until approximately ten years before the end of its useful life, from which point the depreciable amount was written off over the remainder of the useful life. In respect of plant and equipment, it was the company’s policy not to commence depreciation until the accounting year following that in which the assets were acquired. In the Panel’s view, neither of these policies complied with the requirements of FRS 15.

As reported in their Report and Accounts for the year ended 31 March 2002, the directors have accepted the Panel’s findings. The directors have amended the 2001 comparative figures by way of prior year adjustment.

Required:

(a) Explain the role of the Financial Reporting Review Panel (FRRP).

(b) Explain why the FRRP disagreed with S plc’s depreciation policies and explain why it made this disagreement public.

(c) Explain whether the FRRP’s role could be left to the external auditor.

you are the chief accountant of britain plc britain plc has a number of subsidiaries 564364

Aug 29, 2021 | Uncategorized

You are the chief accountant of Britain plc. Britain plc has a number of subsidiaries located in various parts of the world. One of these subsidiaries is Faraway Ltd. Faraway Ltd prepares its financial statements in accordance with local Accounting Standards. The accountant of Faraway Ltd has prepared the financial statements for the year ended 30 September 2001 – also the accounting reference date of Britain plc. The profit and loss account for the year ended 30 September 2001 (together with comparatives) drawn up in loca1 currency (LC) was as shown below.

The local Accounting Standards that are used in preparing the financial statements of Faraway Ltd are the same as UK Accounting Standards with the exception of the following:

1. Faraway Ltd values its stocks using the LIFO basis. This valuation is acceptable for local tax purposes. Relevant stock values are as follows:

The stock levels of Faraway Ltd often vary from year to year and prices do not rise

evenly. The rate of local corporate taxation is 36%.

1. On 1 October 1993, Faraway Ltd acquired an unincorporated business for 50 million units of local currency. The fair value of the net assets of this business on 1 October 1993 was 30 million units of local currency. The resulting goodwill was written off to the profit and loss reserve as permitted by local Accounting Standards. At the date of acquisition, the directors of Faraway Ltd ascertained that the useful economic life of this goodwill was 10 years.

The accountant of Faraway Ltd has sent the financial statements to you with a suggestion that consolidation would be much easier if all group companies used International Accounting Standards to prepare their individual financial statements.

Required

(a) Restate the profit and loss account of Faraway Ltd in local currency (both the current year and the comparative) so as to comply with UK Accounting Standards.

(b) Evaluate the practicality of the suggestion that all group companies should use International Accounting Standards.

three unrelated companies tower plc a public company book ltd a private company and 564368

Aug 29, 2021 | Uncategorized

Three unrelated companies, Tower plc (a public company), Book Ltd (a private company) and Holdings plc (a quoted investment company) have summarised balance sheets, as on 30 June 1985, as set out below with relevant additional information.

1. Tower plc

1. A partial revaluation of fixed assets took place during the year with the following result:

The directors consider that the value of the remaining fixed assets not revalued is equal to their net book amounts.

(2) Depreciation is provided at 2% on buildings, 15% on plant and machinery, and 20% on fixtures and fittings. All fixed assets are depreciated for the full year on the cost or revalued amounts.

(3) Fixed assets comprise:

1. Book Ltd – Current Cost Balance Sheet

(1) No provision has yet been made for the losses of the subsidiary, Worm Ltd. It is estimated that the net assets of Worm Ltd in which Book Ltd has an interest of 60% are £50000.

1. The current cost reserve comprises:

(3) Long term work in progress includes a profit element of £6000 calculated in accordance with SSAP 9.

(c) Holdings plc

Requirements

(a) State concisely, for each of the three types of company mentioned, the principles for calculating distributable profits under the Companies Act 1980 (now part of the Companies Act 1985).

(b) Calculate for each of the three companies the maximum legally distributable profits.

(c) Discuss the reasons why it is not normally commercially or practically desirable to make the maximum distribution.

the balance sheet of omega as at 30 september 1992 contained the following balances 564369

Aug 29, 2021 | Uncategorized

The balance sheet of Omega as at 30 September 1992 contained the following balances and notes:

Note 1 The share premium arose on the issue of shares on 1 October 1989.

Note 2 The revaluation reserve arose as a result of a revaluation of certain of the fixed assets on 1 October 1991. It comprises a gain of £2 000 000 on the revaluation of plant and machinery, which is the balance remaining after the transfer to the profit and loss account of £200 000 representing the depreciation on the revaluation surplus; and a loss of £220 000 arising from the revaluation of office premises. The directors propose to revalue the remaining fixed assets which currently appear at historic cost in a subsequent financial year.

Note 3 The merger reserve represented the premium of £1 450 000 on shares issued on the acquisition on 1 October 1991 of a subsidiary, Alpha plc, in accordance with the merger provisions of the Companies Act 1985 less goodwill of £900 000 arising on a separate transaction. The goodwill has an estimated useful economic life of 15 years.

Note 4 The profit and loss account balance is the balance after:

(i) Writing off the total acquisition goodwill of £400 000 arising on the acquisition on 1 October 1991 of an unincorporated business carried on by Beta Associates. The estimated useful economic life of the goodwill is 10 years.

(ii) Creating a provision of £1 200 000 representing a permanent diminution in the value of a subsidiary, Gamma plc.

(iii) The transfer of the £200 000 mentioned in Note 2 from the revaluation reserve to the profit and loss account representing the amount by which the total depreciation charge for the year exceeded the amount that would have been provided if the plant had not been revalued.

(iv) Crediting an exchange gain of £38 000 that arose on the translation of a long term loan taken out in French francs on 1 October 1991. The loan was taken out to use in the United Kingdom because the interest rate was favourable at the date the loan was raised.

Required

(a) Calculate the amount of distributable profit for Omega on the basis that it is:

(i) A public company.

(ii) An investment company.

(b) Explain briefly:

(i) The disclosure requirements relating to distributable profits in a single company and group context.

(ii) The effect on the distributable profits of the holding company if the group has sufficient distributable profits in aggregate to make a distribution to the holding company’s shareholders but the holding company itself has insufficient distributable profits.

(iii) The effect on the distributable profits of the holding company if the holding company has sold one subsidiary company to another subsidiary for a consideration that exceeds the carrying value of the investment in the holding company’s accounts.

(iv) The effect on the distributable profits of the holding company if a subsidiary company which has a coterminous accounting period declares a dividend after the end of the holding company’s year end.

x ltd is a retail supermarket chain which regularly constructs its own superstores d 564372

Aug 29, 2021 | Uncategorized

X Ltd is a retail supermarket chain which regularly constructs its own superstores. During the year ending 31 December 1995, X Ltd began work on a new site.

On 1 January 1995, a leasehold interest in the site (of 50 years) was purchased for £20 million.

It was considered that a further £10 million would be required to build and fit the superstore. £6 million of the additional £10 million would be spent on the construction of the building and £4 million on fixtures and fittings. Past experience has led the management of X Ltd to believe that the fixtures and fittings would have an average useful economic life of ten years from first use before requiring replacement.

On 1 January 1995, X Ltd borrowed £30 million to finance the project. The £30 million carries no interest but is repayable on 31 December 1997 at a premium of £9.93 million (i.e. £39.93 million is to be repaid in total).

The superstore is to be brought into use on 1 January 1996.

Requirements

(a) Set out the arguments for and against the capitalisation of borrowing costs on constructed fixed assets.

(b) Assuming that borrowing costs ARE capitalised where appropriate, calculate:

(i) the total amount to be included in fixed assets in respect of the development at 31 December 1995, and

(ii) the total amount to be charged to the profit and loss account in respect of the development for the year ending 31 December 1996.

Present value factors are shown below.

compute the amounts which will be included in fixed assets in respect of the stores 564373

Aug 29, 2021 | Uncategorized

C & R plc is a large company which operates a number of retail stores throughout the United Kingdom. The company makes up financial statements to 30 September each year.

On 1 October 1996 the company purchased two plots of land at two different locations, and commenced the construction of two retail stores. The construction was completed on 1 October 1997.

Details of the costs incurred to construct the stores are as follows:

The construction of the stores was financed out of the proceeds of issue of a £10 million zero coupon bond on 1 October 1996. The bond is redeemable at a price of £25 937 000 on 30 September 2006. This represents the one and only payment to the holders of the bond.

Both stores were brought into use on 1 October 1997. The store at Location A was used by C & R plc but, due to a change of plan, the store at Location B was let to another retailer at a commercial rent.

It is the policy of C & R plc to depreciate freehold properties over their anticipated useful life of 50 years, and to depreciate fixtures and fittings over 10 years. The cost of such properties (including fixtures and fittings) should include finance costs, where this is permitted by the regulatory framework in the United Kingdom.

Requirements

(a) Compute the amounts which will be included in fixed assets in respect of the stores at Locations A and B on 30 September 1997.

Give full explanations for the amounts you have included.

(b) Compute the charge to the profit and loss account for depreciation on the fixed assets at the two locations for the year to 30 September 1998, stating clearly the reasons for your answers.

rose ltd operates a number of retail shops of which goods are invoiced at wholesale 564306

Aug 29, 2021 | Uncategorized

Rose Ltd operates a number of retail shops of which goods are invoiced at wholesale price which is cost plus 25% shops sell the goods at the list price which is cost plus 100% from the following particulars. Prepare the necessary ledger accounts:

show the adjustment entries in the books of the h o and the nagpur branch as at the 564313

Aug 29, 2021 | Uncategorized

A D.T.H. Company having its H.O. in Mumbai with branches at Nagpur and Pune closes its annual accounts on Mar 31. When the following transactions took place:

1. Remittances of Rs 50,000 made by Nagpur Branch to its H.O. on Mar 29 received by the H.O. on Apr 3.
2. Dish antennas valuing Rs 40,000 despatched by Pune Branch on Mar 28 (under instructions from H.O.) received by the Nagpur Branch on Mar 30.
3. Depreciation amounting to Rs 720 on Nagpur Branch fixed assets when accounts of fixed assets are maintained at the H.O.
4. Dish worth Rs 60,000 despatched by H.O. on Mar 29, received by Pune Branch on Apr 3.

Show the adjustment entries in the books of the H.O. and the Nagpur Branch as at the close of the year (Ignore Narrations).

show out the journal entry that the h o would pass on june 30 2008 showing the worki 564314

Aug 29, 2021 | Uncategorized

Healthy Pharmaceuticals Ltd., Shimla has branches at Delhi, Mumbai, Chennai and Kolkata. These branches are allowed transactions INTERSE under advice to H.O. Following are the inter branch transactions for the month of June 2008.

I Delhi Branch

1. Sent goods to Mumbai Rs 5,000; Chennai Rs 8,000 and Kolkata Rs 13,000
2. Drawn bills on Mumbai Rs 3,000; Chennai Rs 5,000 and Kolkata Rs 9,000
3. Received goods from Mumbai Rs 15,000; Chennai Rs 9,000 and Kolkata Rs 20,000
4. Bills accepted from Mumbai Rs 3,000; Chennai Rs 5,000 and Kolkata Rs 8,000

II Mumbai Branch: (in addition to transactions as aforesaid)

1. Sent goods to Chennai Rs 32,000; Kolkata Rs 30,000
2. Drawn bills on Chennai Rs 17,000; Kolkata Rs 7,000
3. Received goods from Chennai Rs 12,000; Kolkata Rs 10,000
4. Accepted bills drawn by Chennai Rs 3,500; Kolkata Rs 6,000

III Chennai Branch: (in addition to transactions as aforesaid)

1. Goods sent to Kolkata Rs 5,000
2. Bills drawn on Kolkata Rs 3,000
3. Goods received from Kolkata Rs 7,500
4. Bills accepted, drawn by Kolkata Rs 9,000

Show out the Journal entry that the H.O. would pass on June 30, 2008, showing the working out of the net figures in a tabular form.

the following is the trial balance of the goa branch as of sep 30 2008 564315

Aug 29, 2021 | Uncategorized

The following is the Trial Balance of the Goa Branch as of Sep 30, 2008.

Trial Balance of Goa Branch as at 30, Sep 30, 2008

Additional Information

1. Stock on hand was valued at Rs 13,500.
2. The Branch Account in the H.O. Books on Sep 30, 2008 stood at Rs 2,300 (Dr.).
3. On Sep 27, 2008, the H.O. forwarded goods to the values of Rs 12,500 to the branch, where they were received on Oct 5, 2008.
4. A cash remittance of Rs 6,000 on Sep 28 was received by H.O. on Oct 3, 2008.

Required

1. Journal entries required to incorporate the above figures.
2. The results of trading at the branch separately in the books of H.O.
3. Goa Branch Account in the books of H.O.

you are required to prepare the trichy branch trading and profit and loss account an 564316

Aug 29, 2021 | Uncategorized

Vasudev, a Chennai trader opens a new branch in Trichy which trades independently of the H.O. The transactions of the branch for the year ended Mar 31, 2009 are as follows:

Additional Information

1. The accounts of the branch fixed assets are maintained at H.O. Books
2. Write off depreciation on furniture @ 5% p.a.
3. The branch remitted on Mar 29, 2009 Rs 4,000 was received by the H.O. on Apr 2, 2009
4. The branch closing stock is valued at Rs 24,000.

You are required to prepare the Trichy Branch Trading and Profit and Loss Account and the Trichy Branch Account in the H.O. Books and H.O. Account in the books of the Branch after incorporation of the branch Trial Balance.

a trader of chennai had a branch in kolkata the branch gets goods partly from chenna 564317

Aug 29, 2021 | Uncategorized

A trader of Chennai had a branch in Kolkata. The branch gets goods partly from Chennai H.O. and partly from outsiders. The branch keeps a separate set of books. The following balances were extracted.

The difference between the balances of H.O. Current Account and Branch Account is due to goods and cheques in transit as at the date of preparation of Trial Balance. Tent of B.O. remains unpaid Rs 75. Plant, furniture and loose tools are to be depreciated at 10% p.a., 15% p.a. and 20% p.a., respectively. Stocks in trade valued on Dec 31, 2008 were as follows:

H.O.: Rs 32,500

B.O.: Rs 17,500

Prepare a Combined Trading and Profit and Loss Account for the year ending on Dec 31, 2008 and a Balance Sheet on that date.

the following are the respective trial balance of the h o and the branch as on mar 3 564318

Aug 29, 2021 | Uncategorized

Raj Ltd having H.O. in Chennai has a Branch at Kolkata where a complete set of books is maintained. All purchases are made at Chennai and stock required by the branch is invoiced to it by H.O. at selling price less 15%. The branch manager is entitled to a commission equal to one third of net profit earned by the branch on the basis of invoice price. The following are the respective trial balance of the H.O. and the branch as on Mar 31, 2009.

The cost of price invoiced to Kolkata was Rs 40,950. The stock in hand at the end of the year at Chennai was valued at Rs 22,635 at cost and at Kolkata Rs 7,080 at cost and Rs 8,830 at invoice price. The difference between the adjustment accounts is due to remittance in transit from the branch to H.O. You are required to prepare the Trading and Profit and Lost Account for the year enduring on Mar 31, 2009 in Columnar Form and the Consolidated Balance Sheet at that date.

set out the balance sheet of the business as on mar 31 2009 and the journal entries 564319

Aug 29, 2021 | Uncategorized

The H.O. of a business and its branch keep their own books and each prepares its own Profit and Loss Account. The following are the balances appearing in the two sets of books as on Mar 31, 2009 after ascertainment of profit and after making all adjustments except those referred to below:

Set out the Balance Sheet of the business as on Mar 31, 2009 and the Journal entries necessary (in both sets of books) to record the adjustments dealing with the following:

1. On Mar 30, 2009, the branch had sent a cheque for Rs 2,000 to the H.O., neither received by H.O. nor credited to branch A/c till Apr 5, 2009.
2. Goods valued at Rs 1,680 had been forwarded by the H.O. to the branch and invoiced on Mar 28, 2009, but were neither received by the branch nor dealt with in branch’s books till Apr 9, 2009.
3. The profit shown by the branch to be transferred to the H.O. books.
4. Branch assets and liabilities are to be recorded in the H.O. books.

state whether the following statements are true or false 564320

Aug 29, 2021 | Uncategorized

State whether the following statements are True or False

1. Branch accounting is concerned with recording of transactions of different branches in respect of their association with the H.O., with other branches as well with outsiders.
2. Dependent branches are mere selling agencies and are controlled by the H.O.
3. Goods supplied to branches for sale are always invoiced at market price only.
4. Dependent branches perform accounting functions for themselves.
5. A branch account is a combination of real accounts and nominal accounts.
6. Petty expenses paid by the branch manager out of cash in hand in the branch are not shown in the branch account.
7. Usually, dependent branches do not sell goods on credit.
8. Entities have to be made in the branch account in respect of sales returns and discount allowed.
9. When goods are transferred between H.O. and branches at a price above cost, it is termed as “loaded price.”
10. Credit purchases would appear in the branch account.
11. Credit sales would not affect the branch account directly.
12. Under Debtors System, control over the stock can be exercised effectively.
13. Under Stock Debtors System, all items are entered in the branch stock account at loaded price only.
14. When the stock appears at the loaded price, it is essential to open Stock Reserve Account.
15. Normal loss affects both gross profit and net profit.
16. Abnormal loss affects only gross profit.
17. Independent branches also operate within the framework of broad policies laid down by the H.O.
18. Goods in transit appear as an asset in the balance sheet.
19. Cash in transit is a liability.
20. Goods returned by customers direct to branch are recorded in branch account.

fill in the blanks with suitable words 564321

Aug 29, 2021 | Uncategorized

Fill in the blanks with suitable words

1. _______ branches are situated in the same country, where H.O. is situated.
2. _______ branches cannot procure goods from local sources.
3. To meet incidental expenses, branch managers are supplied with petty cash on _________ system.
4. Dependent branches keep only _______ records.
5. _______ branches do not perform accounting functions for themselves.
6. Generally, a branch account is a combination of real and ________ accounts.
7. Sales returns, bad debts, discounts allowed do not appear in the _________ under Debtors system.
8. To ascertain missing figure in respect of debtors, _________ A/c is prepared.
9. A profit margin of 20% on sale price is equal to ________% profit on cost.
10. Under Debtors system, H.O. can calculate only ________ profit.
11. ________ and ________ purchases would not appear in the branch account.
12. The important limitation of Debtors system is the absence of control over ________.
13. Normal and abnormal losses are not adjusted with stock in the _______ Account under Debtors system.
14. Branch Stock Account is a ______ account in nature, under Stock Debtors System.
15. Branch Stock Account is always prepared at __________ price under Stock Debtors System.
16. Invoice Price = Cost + ________.
17. Branch profit/loss is transferred to __________ Account.
18. Normal loss is a ________ charge, affects only the gross profit.
19. The stock reserve will be equal to the difference between the wholesale price and _________.
20. Goods in transit and cash in transit are to be treated as _________ and hence they are shown in the balance sheet.

from the following information prepare branch account in the books of h o 564325

Aug 29, 2021 | Uncategorized

Raj & Co had a branch at Delhi. Goods are invoiced to the branch at cost plus 25%. Branch is instructed to deposit cash everyday in the H.O. account with the bank. All expenses are paid by cheques by the H.O. except petty cash expenses which are paid by the branch manager. From the following information prepare branch account in the books of H.O.:

it was required to write off furniture 10 p a no depreciation is provided on additio 564326

Aug 29, 2021 | Uncategorized

Gain & Co. had a branch at Tiruchirapalli. You are required to prepare branch account in the books of Gani & Co. to ascertain profit made at Tiruchirapalli branch. Transactions during the year ending Mar 31, 2009 were as follows:

It was required to write off furniture @ 10% p.a. No depreciation is provided on additions during the year.

a trader has a branch at surat to which goods are invoiced at cost plus 20 prepare a 564328

Aug 29, 2021 | Uncategorized

A trader has a branch at Surat to which goods are invoiced at cost plus 20%. Prepare a branch account in H.O. books from the following particulars:

show the branch gross profit for the three months ended on dec 31 2009 564329

Aug 29, 2021 | Uncategorized

Mr. V.R. with H.O. at Delhi who carried on a retail trade opened a branch at Nagpur on Oct 1, 2009 where all sales were on credit basis. All cash collected was immediately remitted to H.O. All goods required by the branch were supplied from H.O. and were invoiced to the branch at 10% above cost. The following were the transactions:

The stock of the goods held by the branch on Dec 31, 2009 amounted to Rs 26,700 at invoice price to branch. Record these transactions in the H.O. books. Show the branch gross profit for the three months ended on Dec 31, 2009.

prepare i branch account ii branch stock account iii branch debtors account iv branc 564331

Aug 29, 2021 | Uncategorized

Shimla H.O. supplies goods to its branch at Chennai at invoice price which is cost plus 50%. All cash received by the branch is remitted to Shimla and all branch expenses are paid by H.O. From the following particulars related to Chennai branch for the year 2009, prepare (i) Branch Account, (ii) Branch Stock Account, (iii) Branch Debtors Account, (iv) Branch Adjustment Account and (v) Branch Expenses Account to ascertain Gross Profit and Net Profit made by the Branch:

Note: Allowance to customers may be treated as sales promotional expense.

you are required to prepare the necessary ledger accounts for hyderabad branch under 564332

Aug 29, 2021 | Uncategorized

Mr. Rai has a branch at Hyderabad and Vijayawada and the goods are invoiced at a profit of 20% on sales. Following information is available of the transactions at Hyderabad branch for the year ending Dec 31, 2009:

Transactions during the year 2009:

Note: Goods transferred to Vijayawada Branch were in transit (as given above) on Dec 31, 2009.

You are required to prepare the necessary ledger accounts for Hyderabad Branch under Stock and Debtors System in the books of H.O.

you are required to record the above instructions in the books of the h o on the bas 564333

Aug 29, 2021 | Uncategorized

Mr. X of Surat has a branch at Jaipur. Goods are sent at invoice price which is fixed at a profit of 20% on sale under the strict instructions of selling goods only at invoice price. Goods are fully insured against fire and theft. Following are the transactions in respect of Jaipur Branch:

Cash sales: 62.5% of Total Sales

You are required to record the above instructions in the books of the H.O. on the basis of Stock and Debtors System and calculate the net profit of the branch.

from the following particulars prepare the branch stock account and the branch profi 564334

Aug 29, 2021 | Uncategorized

VRS Ltd of Chennai invoices goods to its branch at Bangalore at cost plus 33 1/3%. From the following particulars, prepare the Branch Stock Account and the Branch Profit and Loss Account as they would appear in the books of H.O.:

you are required to prepare the following accounts in the books of hemant amp co for 564335

Aug 29, 2021 | Uncategorized

Hemant & Co operates a number of retail outlets to which goods are invoiced at wholesale price which is cost plus 25%. These outlets sell the goods at the retail price which is wholesale price plus 20%. Following is the information regarding one of the outlets for the year ending Mar 31, 2010:

You are required to prepare the following accounts in the books of Hemant & Co for the year ended Mar 31, 2010: (i) Outlet Stock Account, (ii) Outlet Profit and Loss Account, (iii) Stock Reserve Account

good luck ltd chennai had its branches at delhi and kanpur it charged goods to branc 564336

Aug 29, 2021 | Uncategorized

Good Luck Ltd. Chennai had its branches at Delhi and Kanpur. It charged goods to branches at cost plus 25%. Following information is available of the transactions of the Delhi branch for the year ended on Dec 31.

Balance on Jan 1: Stock Rs 60,000; Debtors Rs 20,000; Petty Cash Rs 100.

Balance on Dec 31: Petty cash Rs 460; Debtors Rs 28,000

Goods worth Rs 30,000 (as above) sent by Delhi branch to Kanpur branch was in transit on Dec 31. Show the following accounts in the books of Good Luck Ltd:

(i) Delhi Branch Account, (ii) Delhi Branch Debtors Account, (iii) Delhi Branch Adjustment Account, (iv) Stock Reserve Account, (vi) Goods sent to Delhi Branch

from the following particular prepare noida branch account showing profit or loss 564286

Aug 29, 2021 | Uncategorized

From the following particular, prepare Noida Branch Account showing profit or loss:

Closing Stock could not be ascertained but it is known that the branch usually sells goods at cost plus 20%. The branch manager entitled to a commission of 5% of profit of branch after charging commission.

prepare the branch account in the books of h o for six months ending on sep 30 2008 564287

Aug 29, 2021 | Uncategorized

Swastika Ltd. of Shimla has a branch at Cochin. Goods are invoiced to the branch at cost plus 25%. The branch does not maintain account books and all collection at the branch are remitted to H.O. The expenses of the branch are remitted to H.O. The expenses of the branch are reimbursed by the office. From the following particulars, prepare the branch account in the books of H.O. for six months ending on Sep 30, 2008.

Branch manager is entitled to a commission of 5% of profit of the branch after charging such commission.

goods costing rs 1 250 were damaged in transit and a sum of rs 1 000 was recovered f 564288

Aug 29, 2021 | Uncategorized

From the following details relating to Delhi Branch for the year ending Mar 31, 2009, prepare the branch account in the books of Surat H.O.

Goods costing Rs 1,250 were damaged in transit and a sum of Rs 1,000 was recovered from the insurance company in full settlement of the claim. Depreciation on furniture @ 10% p.a.

the following information relates to delhi branch for the year ending on mar 31 2009 564289

Aug 29, 2021 | Uncategorized

Mrs. Shree opened a hosiery company, dealing in inner garments in Tiruppur, Tamil Nadu and has opened several branch shops at Chennai, Mumbai, Kolkatta and Delhi. All the purchasing and administration is done at Tiruppur Tamil Nadu H.O. only. Branches sell goods both for cash and on credit terms. The branches are expected to make a profit of 25% on cost price to H.O. The following information relates to Delhi Branch for the year ending on Mar 31, 2009.

Additional Information

1. Goods amounting to Rs 20,000 at cost of H.O. reached Delhi Branch on Apr 3, 2009.
2. Delhi Branch had on Apr 1, 2008 laptop and other accessories at a book value of Rs 1,50,000. Depreciation at 10% p.a. is to be provided on this.

You are required to prepare

1. Branch Stock Account
2. Branch Debtors Account

from the following particulars show branch account as maintained by the h o showing 564290

Aug 29, 2021 | Uncategorized

Kolkata H.O. of a company invoices goods to its Nagpur Branch at cost plus 20%. The branch purchases goods from local sources also for which payments are made by the H.O. All cash collected by the branch is banked on the same day to the credit of the H.O. except for a petty cash account maintained by the branch for which periodic transfers are made from the H.O.

From the following particulars, show branch account as maintained by the H.O. showing the profit for the year ended Mar 31, 2009.

from the following balances as shown by the books prepare branch account 564291

Aug 29, 2021 | Uncategorized

Guber Ltd. has a H.O. at Chennai and retail branches across the country which are supplied goods from the H.O. at 20% profit on sale price. Accounts are kept at H.O. from where all expenses (except petty) are paid. Petty expenses are paid by the branches that are allowed to maintain petty cash balance of Rs 600 on Imp rest system. From the following balances, as shown by the books, prepare branch account.

show necessary ledger accounts in the books of h o and calculate the profit and loss 564292

Aug 29, 2021 | Uncategorized

VRV Ltd., Delhi has a branch in Chennai to which goods are sent @ 20% above cost. The branch sells goods at cash and credit basis. Branch expenses are met partly from H.O. and partly by the branch. Following further details are given for the year ending on Dec 31, 2008.

Show necessary ledger accounts in the books of H.O. and calculate the profit and loss of the branch for the year ended Dec 31, 2008 under:

1. Debtors Method
2. Stock and Debtors Method

you are required to prepare the branch stock account and branch adjustment account a 564293

Aug 29, 2021 | Uncategorized

Renu of Chennai has a branch in Delhi. Goods sent to the branch are invoiced at selling price, i.e. cost plus 33?%. From the following particulars, you are required to prepare the Branch Stock Account and Branch Adjustment Account as they would appear in the books of the H.O.

from the following particulars of the branch prepare branch stock account branch deb 564294

Aug 29, 2021 | Uncategorized

Mr. Khan has a retail branch at Vijayawada. Goods are sent by the H.O. to the branch market at selling price which is cost plus 25%. All expenses of the branch are paid by the H.O. All cash collected by the branch (from customers and from cash sales) is deposited to the credit of H.O. From the following particulars of the branch, prepare Branch Stock Account, Branch Debtors Account, Branch Expenses Account and Branch Adjustment Account in the books of H.O.

good wear garments sent goods to kolkata branch at cost plus 25 564295

Aug 29, 2021 | Uncategorized

Good Wear Garments sent goods to Kolkata Branch at cost plus 25%.

Further Information

Show

1. Branch Stock Account
2. Branch Adjustment Account
3. Branch Profit and Loss Account

from the following particulars prepare the branch account branch stock adjustment ac 564296

Aug 29, 2021 | Uncategorized

VRV Ltd. invoices goods to its branch at cost plus 33?%. From the following particulars prepare the Branch Account, Branch Stock Adjustment Account and Branch Profit and Loss Account as they would appear in the books of the H.O.

prepare branch stock account branch debtors account and delhi branch account 564297

Aug 29, 2021 | Uncategorized

. Raj having a H.O. at Chennai, opened several branches at Mumbai, Delhi, Kolkata and Cochin. All the purchasing and administration is done at the H.O. Branches were also allowed to purchase locally. Branches sell both for cash and on credit terms, but all invoices for credit sales are invoices from Chennai and payments from credit customers received there. The branches are expected to achieve a profit of 50% on cost price. The following details relate to the Delhi Branch for the first six months of 2009.

Further Information

1. Goods amounting to Rs 6,000 at cost to H.O. were in transit.
2. On Jan 1, 2009, the branch had furniture and fixtures at a book value of Rs 20,000. Depreciation at 10% is to be provided per annum.
3. Goods purchased locally were sold at a profit of 25% on sale price.

Prepare Branch Stock Account, Branch Debtors Account and Delhi Branch Account.

from the following information show the agra branch a c for the year ending mar 31 2 564298

Aug 29, 2021 | Uncategorized

Rainbow & Co. a retail shop at Agra under the supervision of a manager. The ratio of gross profit sales is constant at 25% throughout the year to March 31, 2009.

Branch manager is entitled to a commission of 10% of profit earned by his branch, calculated before charging his commission but subject to a deduction from such commission equal to 25% of any ascertained deficiency of branch stock. All goods were supplied to the branch by the H.O.

From the following information, show the Agra Branch A/c for the year ending Mar 31, 2008–2009.

prepare branch stock account branch adjustment account and branch profit and loss ac 564299

Aug 29, 2021 | Uncategorized

Fortune Ltd. with its H.O. in Goa invoiced goods to its branch Bhubaneswar at 20% less than the catalogue price which is cost plus 50% with instructions that cash sales were to be made at invoice price and credit sales at catalogue price less discount at 15% on prompt payment. From the following particulars, prepare Branch Stock Account, Branch Adjustment Account and Branch Profit and Loss Account for the year ended Mar 31, 2009 in the H.O. Books.

It was further provided that a part of the stock was lost by fire (not covered by insurance) during the year whose value is to be ascertained and a provision should be made for discount to be allowed to debtors as on Mar 31, 2009, on the basis of year’s trend of prompt payment.

prepare the branch trading and profit and loss account for the year ending on mar 31 564300

Aug 29, 2021 | Uncategorized

A Surat merchant has a branch at Tiruchirapalli (TN) to which charges the goods at cost plus 25%. The Tiruchirapalli Branch keeps its own sales ledger and transmits all cash received to the H.O. every day. All expenses are paid from the H.O. The transactions were as follows:

Prepare the Branch Trading and Profit and Loss Account for the year ending on Mar 31, 2009 and the branch accounts in the books of the H.O.

prepare a branch trading and profit and loss account and delhi branch account in the 564301

Aug 29, 2021 | Uncategorized

Jagannath Steels Ltd with its H.O. at Cuttack has a branch at Delhi. Information relating to Delhi branch is furnished for the year ended Mar 31, 2009.

Prepare a Branch Trading and Profit and Loss Account and Delhi Branch Account in the books of Cuttack H.O.

prepare the branch trading and profit and loss account after and branch account afte 564302

Aug 29, 2021 | Uncategorized

A Delhi merchant opens a branch in Chennai which trades independently of the H.O. The transactions of the branch for the year ended Mar 31, 2009 are as follows.

Prepare the Branch Trading and Profit and Loss Account after and Branch Account after taking into account the following:

1. The accounts of fixed assets are maintained in H.O. Books
2. Write off Depreciation on Furniture @ 20% p.a.
3. A remittance of Rs 6,000 from the branch to H.O. is in transit
4. The branch closing stock is valued at Rs 36,000

if the h o sends goods at cost plus 20 branch sells goods at list price which is who 564303

Aug 29, 2021 | Uncategorized

Compute the value of closing stock at the branch in each of the following alternatives:

if the h o invoices goods to its branch at cost plus 25 goods are sold to customers 564304

Aug 29, 2021 | Uncategorized

Compute the value of closing stock at H.O. in each of the following alternative cases:

a h o invoices goods to its branches at 20 less than the list price customers of h o 564305

Aug 29, 2021 | Uncategorized

A H.O. invoices goods to its branches at 20% less than the list price. Customers of H.O. and the branch are charged for goods sold to them at cost plus 100% from the following particulars. Ascertain the profit made at the H.O. and the branch.

presented here are the components in pedersen company rsquo s income statement deter 564236

Aug 29, 2021 | Uncategorized

Presented here are the components in Pedersen Company’s income statement. Determine the missing amounts.

show the laptop account and pandey rsquo s account in the books of singh for three y 564251

Aug 29, 2021 | Uncategorized

On Jan 1, 2009 Pandey purchased a laptop from Jaspal Singh on Hire Purchase System over a period of three years. Rs 10,000 was payable on delivery on Jan 1, 2008 and the balance by following installments on 3 Dec 1, in each year:

Jaspal Singh charged interest at 10% on the yearly balances. The cash value of the laptop was Rs 60,000. Depreciation @ 20% p.a. on diminishing balances were written off in each year. Pandey paid all the installments on the due date. Show the Laptop Account and Pandey’s Account in the books of Singh for three years Dec 31, 2010.

prepare the following accounts in the books of rado cabs upto dec 31 2010 1 narain a 564253

Aug 29, 2021 | Uncategorized

Rado Cabs purchased an omni van on Jan 1, 2008 from Narain & Co, Delhi on hire purchase basis. It was agreed upon to make payment as under:

Nothing more payable after third installment. All the installments are duly paid by Rado Cabs. Interest was reckoned @ 10% p.a. depreciation was charged @ 20% p.a. on diminishing balance. Rado Cabs closes its books on 31 Dec every year. Prepare the following accounts in the books of Rado Cabs upto Dec 31, 2010. (1) Narain & Co. Account (2) Omni Van Account and (3) Interest Account

show i machine account ii b ltd account in the books of a ltd and iii machine reposs 564260

Aug 29, 2021 | Uncategorized

A Ltd purchased from B Ltd 3 machines costing Rs 50,000 each on the Hire Purchase System on Jan 1, 2008. Payment was to be as Rs 30,00 down and remaining in 3 equal installments payable on Dec 31, 2008; Dec 31, 2009 and Dec 31, 2010 together with interest @ 9%. A Ltd writes off depreciation @ 20% on the reducing balance. X Ltd paid the installment due at the end of first year, i.e. on Dec 31, 2008 but could not pay the next, i.e. on Dec 31, 2009. B Ltd agreed to leave one machine with A Ltd on Jan 1,2010 adjusting the value of the other two machines against the amount due on Jan 1, 2010. The machines were valued on the basis of 30% depreciation annually on W.D.V. basis. B Ltd spent s 5,000 on the repairs of two repossessed machines and sold one machine for Rs 40,000 on July 1, 2010. Show: (i) Machine Account; (ii) B Ltd Account in the books of A Ltd and (iii) Machine Repossessed Account in the books of B Ltd.

on oct 1 2007 five cars were purchased by sathya on hire purchase system 564262

Aug 29, 2021 | Uncategorized

On Oct 1, 2007 five cars were purchased by Sathya on Hire Purchase System. The cash price of each car was Rs 2,75,000. The payment was to be made as follows:

1. 10% of Cash Price at the time of delivery
2. 25% of Cash Price at the end of each one of the subsequent four half years.

The payment due on Sep 30, 2008 could not be made and, hence, cars were seized by the hire vendor but after negotiations, Sathya was allowed to keep three cars on the condition that the value of the other two cars would be adjusted against the amount due, the cars being valued at Cost less 25% depreciation and Sathya would pay the balance in five half yearly Installments together with interest @ 10% p.a. Both the parties close their Books of Account on 31st Mar every year. Sathya charges 15% depreciation on cars on the original cost.

In Oct 2008, the hire vendor spent Rs 30,000 on getting the seized cars thoroughly overhauled and sold them for Rs 4,75,000.

Prepare for two accounting years ended on 31 Mar, 2009. (i) Cars Account in Sathya’s ledger assuming that Sathya debited it with full cash price in the beginning of the contract and (ii) the personal account of Sathya and goods repossessed account in hire vendor’s ledger.

installments due on dec 31 2009 customer paying 564265

Aug 29, 2021 | Uncategorized

ABC Ltd sells goods on hire purchase basis, the price being cost plus 60%. From the following particulars relating to 2009 ascertain the profit or loss on hire purchase transactions.

hire purchase stock with customers as on jan 1 2009 564266

Aug 29, 2021 | Uncategorized

From the following particulars, prepare H.P. Trading Account for the year ended Dec 31, 2009 in the Books of K V Ltd which sells goods of comparatively small value on H.P. basis adding 331/3 % to the cost of goods to fix hire purchase price:

during the year goods sold on h p price rs 5 28 000 purchase rs 4 08 000 cash receiv 564267

Aug 29, 2021 | Uncategorized

M.S. Ltd has a hire purchase department. Goods are sold on hire purchase at a profit of 25% on sale price. From the following particulars prepare H.P. Trading Account for the year upto Mar 31, 2009:

During the year goods sold on H.P. Price Rs 5,28,000, Purchase Rs 4,08,000; Cash received Rs 4,80,000

mr r m is a hire purchase trader and sells goods on h p basis at cost plus 50 from t 564268

Aug 29, 2021 | Uncategorized

Mr R.M. is a hire purchase trader and sells goods on H.P. basis at Cost PLUS 50%. From the following information, prepare H.P. Trading Account to ascertain profit/loss for the year ending Mar 31, 2009.

prepare h p trading account to ascertain profit or loss for the year ending dec 31 2 564269

Aug 29, 2021 | Uncategorized

Renu Ltd has a hire purchase department and goods are sold on hire purchase at cost plus 60%. From the following particulars, prepare H.P. Trading Account to ascertain Profit or Loss for the year ending Dec 31, 2009.

prepare hire purchase trading account for the year ending on dec 31 2009 564270

Aug 29, 2021 | Uncategorized

The following are the particulars from the Books of Amar & Co who sells goods of small value on hire purchase basis at 50% profit on cost. Prepare Hire Purchase Trading Account for the year ending on Dec 31, 2009.

Goods repossessed (Installments Due Rs 16,000) valued at Rs 3,000 which had been included in the stock at the end at Rs 3,000. Cash received from customers Rs 3,60,000 Purchases Rs 3,60,000.

you are required to ascertain the profit made for the year ended dec 31 2009 using s 564272

Aug 29, 2021 | Uncategorized

Verma & Co has a hire purchase department which sells goods at Cost PLUS 50%. From the following information, you are required to ascertain the profit made for the year ended Dec 31, 2009 using stock and debtors method:

it is informed that cash received from the customers is rs 79 200 and that the rate 564274

Aug 29, 2021 | Uncategorized

Fortune (India) sells goods both on Hire Purchase System and cash retail system. He has prepared one Trading Account for both the business and has treated total goods supplied to customers on H.P. system as sales which is as under:

It is informed that cash received from the customers is Rs 79,200 and that the rate of gross profit for H.P. System is 32% on Cost and Cash Sales are made at the H.P. Price as reduced by 1/11.

He now wishes to take credit for such proportion of profit as the installments bear to the total amounts receivable under the H.P. agreements and to adopt stock method of dealing the H.P. transactions. Construct new Trading Accounts for both business separately.

prepare accounts showing the profit or loss made by the company by adopting stock an 564275

Aug 29, 2021 | Uncategorized

Shiva Ltd commenced business on Jan 1, 2009. It sells both on Hire Purchase System and Cash Retail System. Information about terms is given below:

The company purchased goods costing Rs 1,00,00,000 in all and made cash sales totaling Rs 86,00,000. Stock in hand on Dec 31, 2009 was valued at R. 12,00,000. H.P. transactions were as follows:

3 VCPs and 2 VCRs on which only 4 installments were collected were repossessed and were valued at Rs 32,000. This is not included in the figure of stock mentioned above. Prepare accounts showing the profit or loss made by the company by adopting Stock and Debtors System.

prepare installment debtors account and interest suspense account as they would appe 564277

Aug 29, 2021 | Uncategorized

Mr. Rao sells consumer durables under Installment System under which 20% of the total dues are to be paid on delivery and the balance in eight equal quarterly installments commencing from the last date of the quarter in which goods have been delivered. 15% of the total dues are attributed towards interest for which credit to revenue is taken as:

In the year of Sale : 30% Next Year : 50% The year after Next : 20%

Total dues for goods sold and delivered during the last three years had been

On Jan 1, 2009, Installment Debtors Account and Interest Suspense Account showed balance of Rs 1,67,500 (Dr.) and Rs 32,250 (Cr) respectively. The deliveries have been even throughout the year and all the installments have been collected on due date.

Prepare Installment Debtors Account and Interest Suspense Account as they would appear in 2009.

compute the cost price of the goods and the profit margin for the unsold stock 564281

Aug 29, 2021 | Uncategorized

Goods are invoiced to branches at cost plus 25%. A branch reports unsold stock of Rs 50,000. Compute the cost price of the goods and the profit margin for the unsold stock.

depreciate the furniture 20 p a 564282

Aug 29, 2021 | Uncategorized

From the following information, you are required to prepare Jaipur Branch Account in the books of Cennai H.O. for the year ending Mar 31, 2009.

Depreciate the furniture @ 20% p.a.

from the following information prepare nagpur branch account in the books of mumbai 564283

Aug 29, 2021 | Uncategorized

From the following information prepare Nagpur Branch Account in the books of Mumbai H.O. for the year ending Mar 31, 2009:

prepare delhi branch account in the books of chennai h o for the year ending on mar 564284

Aug 29, 2021 | Uncategorized

A company with its H.O. at Chennai has a branch at Delhi. The branch receives all goods from H.O. which also remits cash for all expenses. Sales are made by the branch on credit as well as for cash. Total sales by the branch for the year ended Mar 31, 2009 amounted to Rs 2,80,000 out of which 20% is cash sale. Further information taken from the branch reveals:

Expenses actually incurred by the branch during the year were

Sale of furniture on Oct 1, 2008 (book value of furniture on the date of sale Rs 475) amounted to Rs 450.

All sales are made by the branch at cost plus 25%

Depreciation on furniture is 10% p.a.

Prepare Delhi Branch Account in the books of Chennai H.O. For the year ending on Mar 31, 2009.

Goods are sold to customers at cost plus 50%. Depreciate the furniture @ 10%

from the following particulars prepare branch account i at cost price and ii at acco 564285

Aug 29, 2021 | Uncategorized

Good Luck Co. Chennai has a branch at Lucknow. It invoices goods to the branch at selling price which is cost plus 33?%. From the following particulars prepare branch account. (i) At cost price and (ii) At account and goods sent to branch account in the Books of Good Luck Co. Chennai.

prepare the adjusting entries for the month of march 564186

Aug 29, 2021 | Uncategorized

The ledger of Hammond, Inc., on March 31, 2010, includes these selected accounts before adjusting entries are prepared.

An analysis of the accounts shows the following.

1. Insurance expires at the rate of $100 per month.

2. Supplies on hand total $800.

3. The office equipment depreciates $200 a month.

4. One half of the unearned service revenue was earned in March.

Prepare the adjusting entries for the month of March.

determine the total assets and total liabilities at june 30 2010 for skolnick co 564187

Aug 29, 2021 | Uncategorized

Skolnick Co. was organized on April 1, 2010. The company prepares quarterly financial statements. The adjusted trial balance amounts at June 30 are shown below:

(a) Determine the net income for the quarter April 1 to June 30.

(b) Determine the total assets and total liabilities at June 30, 2010 for Skolnick Co.

(c) Determine the amount that appears for Retained Earnings.

prepare the adjusting entries for the month of april show computations 564188

Aug 29, 2021 | Uncategorized

Terry Thomas and a group of investors incorporate the Green Thumb Lawn Care Corporation on April 1. At April 30 the trial balance shows the following balances for selected accounts.

Analysis reveals the following additional data pertaining to these accounts.

1. Prepaid insurance is the cost of a 2 year insurance policy, effective April 1.

2. Depreciation on the equipment is $500 per month.

3. The note payable is dated April 1. It is a 6 month, 12% note.

4. Seven customers paid for the company’s 6 month lawn service package of $600 beginning in April. These customers received the first month of services in April.

5. Lawn services performed for other customers but not billed at April 30 totaled $1,500.

Instructions

Prepare the adjusting entries for the month of April. Show computations.

the trial balance shows supplies 1 350 and supplies expense 0 if 600 of supplies are 564189

Aug 29, 2021 | Uncategorized

The trial balance shows Supplies $1,350 and Supplies Expense $0. If $600 of supplies are on hand at the end of the period, the adjusting entry is:

queenan company computes depreciation on delivery equipment at 1 000 for the month o 564190

Aug 29, 2021 | Uncategorized

Queenan Company computes depreciation on delivery equipment at $1,000 for the month of June. The adjusting entry to record this depreciation is as follows:

colleen mooney earned a salary of 400 for the last week of september she will be pai 564191

Aug 29, 2021 | Uncategorized

Colleen Mooney earned a salary of $400 for the last week of September . She will be paid on October 1. The adjusting entry for Colleen’s employer at September 30 is:

identify the effect if any that each of the following transactions would have upon c 564192

Aug 29, 2021 | Uncategorized

Transactions that affect earnings do not necessarily affect cash.

Instructions

Identify the effect, if any, that each of the following transactions would have upon cash and net income. The first transaction has been completed as an example.

(a)Purchased $100 of supplies for cash.

(b) Recorded an adjusting entry to record use of $40 of the above supplies.

(c) Made sales of $1,300, all on account.

(d) Received $800 from customers in payment of their accounts.

(e) Purchased equipment for cash, $2,500.

(f) Recorded depreciation of building for period used, $600.

how do sears rsquo s profit margin ratio and gross profit rate compare to those of w 564198

Aug 29, 2021 | Uncategorized

After having once been as dominant as Wal Mart, in recent years Sears has struggled to survive. It has enacted many changes trying to turn itself around. In the 1990s, it shocked and disappointed many loyal customers by closing its catalog business. It also closed 113 stores and eliminated 50,000 jobs. None of these changes was enough to make Sears truly competitive, so in March 2005 Sears merged with Kmart to form the third largest U.S. retailer. Here is recent data for Sears Holdings, Inc.

Instructions

Using the basic facts in the table, evaluate the following components of Sears’s profitability for the years ended January 3, 2007 and December 28, 2006.

Profit margin ratio

Gross profit rate

How do Sears’s profit margin ratio and gross profit rate compare to those of Wal Mart and Target for 2007?

the ledger of buerhle inc on march 31 2010 includes the following selected accounts 564160

Aug 29, 2021 | Uncategorized

The ledger of Buerhle, Inc. on March 31, 2010, includes the following selected accounts before adjusting entries.

An analysis of the accounts shows the following:

1. Insurance expires at the rate of $300 per month.

2. Supplies on hand total $900.

3. The office equipment depreciates $500 per month.

4. 2/5 of the unearned revenue was earned in March.

Prepare the adjusting entries for the month of March.

identify when revenue should be recognized in each of the above situations 564164

Aug 29, 2021 | Uncategorized

The following independent situations require professional judgement for determining when to recognize revenue from the transactions.

(a) Southwest Airlines sells you an advance purchase airline ticket in September for your flight home at Christmas.

(b) Ultimate Electronics sells you a home theatre on a “no money down, no interest, and no payments for one year” promotional deal.

(c) The Toronto Blue Jays sell season tickets online to games in the Skydome. Fans can purchase the tickets at any time, although the season doesn’t officially begin until April. The major league baseball season runs from April through October.

(d) You borrow money in August from RBC Financial Group. The loan and the interest are repayable in full in November.

(e) In August, you order a sweater from Sears using its online catalog. The sweater arrives in September, and you charge it to your Sears credit card. You receive and pay the Sears bill in October.

Instructions

Identify when revenue should be recognized in each of the above situations.

identify by number the accounting assumption principle or constraint that describes 564165

Aug 29, 2021 | Uncategorized

These are the assumptions, principles, and constraints discussed in this and previous chapters.

1. Economic entity assumption.

2. Matching principle.

3. Monetary unit assumption.

4. Time period assumption.

5. Cost principle.

6. Materiality.

7. Full disclosure principle.

8. Going concern assumption.

9. Revenue recognition principle.

10. Conservatism.

Instructions

Identify by number the accounting assumption, principle, or constraint that describes each situation below. Do not use a number more than once.

(a) Is the rationale for why plant assets are not reported at liquidation value. (Do not use the cost principle.)

(b) Indicates that personal and business record keeping should be separately maintained.

(c) Ensures that all relevant financial information is reported.

(d) Assumes that the dollar is the “measuring stick” used to report on financial performance.

(e) Requires that accounting standards be followed for all significantitems.

(f) Separates financial information into time periods for reporting purposes.

(g) Requires recognition of expenses in the same period as related revenues.

(h) Indicates that market value changes subsequent to purchase are not recorded in the accounts.

determine the company rsquo s net earnings on an accrual basis for 2010 show all you 564167

Aug 29, 2021 | Uncategorized

Your examination of the records of a company that follows the cash basis of accounting tells you that the company’s reported cash basis earnings in 2010 are $33,640. If this firm had followed accrual basis accounting practices, it would have reported the following year end balances.

Instructions

Determine the company’s net earnings on an accrual basis for 2010. Show all your calculations in an orderly fashion.

assume that at the end of the year fun play reported a favorable net income yet the 564169

Aug 29, 2021 | Uncategorized

Fun Play, a maker of electronic games for kids, has just completed its first year of operations. The company’s sales growth was explosive. To encourage large national stores to carry its products Fun Play offered 180 day financing—meaning its largest customers do not pay for nearly 6 months. Because Fun Play is a new company, its components suppliers insist on being paid cash on delivery. Also, it had to pay up front for 2 years of insurance.

At the end of the year Fun Play owed employees for one full month of salaries, but due to a cash shortfall, it promised to pay them the first week of next year.

Instructions

(a) Explain how cash and accrual accounting would differ for each of the events listed above and describe the proper accrual accounting.

(b) Assume that at the end of the year Fun Play reported a favorable net income, yet the company’s management is concerned because the company is very short of cash. Explain how Fun Play could have positive net income and yet run out of cash.

prepare the adjusting entries at march 31 assuming that adjusting entries are made q 564171

Aug 29, 2021 | Uncategorized

The ledger of Thurston Rental Agency on March 31 of the current year includes these selected accounts before adjusting entries have been prepared.

An analysis of the accounts shows the following.

1. The equipment depreciates $280 per month.

2. Half of the unearned rent revenue was earned during the quarter.

3. Interest of $440 is accrued on the notes payable.

4. Supplies on hand total $850.

5. Insurance expires at the rate of $400 per month.

Instructions

Prepare the adjusting entries at March 31, assuming that adjusting entries are made quarterly.

Additional accounts are: Depreciation Expense, Insurance Expense, Interest Payable, and Supplies Expense.

prepare the adjusting entries on january 31 account titles are accumulated depreciat 564172

Aug 29, 2021 | Uncategorized

Mark Bennett, D.D.S., opened an incorporated dental practice on January 1, 2010.

During the first month of operations the following transactions occurred:

1. Performed services for patients who had dental plan insurance. At January 31, $680 of such services was earned but not yet billed to the insurance companies.

2. Utility expenses incurred but not paid prior to January 31 totaled $520.

3. Purchased dental equipment on January 1 for $80,000, paying $20,000 in cash and signing a $60,000, 3 year note payable (Interest is paid each December 31). The equipment depreciates $400 per month. Interest is $500 per month.

4. Purchased a 1 year malpractice insurance policy on January 1 for $24,000.

5. Purchased $1,750 of dental supplies (recorded as increase to Supplies). On January

31 determined that $550 of supplies were on hand.

Instructions

Prepare the adjusting entries on January 31. Account titles are: Accumulated Depreciation— Dental Equipment, Depreciation Expense, Service Revenue, Accounts Receivable, Insurance Expense, Interest Expense, Interest Payable, Prepaid Insurance, Supplies, Supplies Expense, Utilities Expense, and Utilities Payable.

what was the cash paid for income taxes during 2007 reported at the bottom of the co 564177

Aug 29, 2021 | Uncategorized

The financial statements of Tootsie Roll are presented in Appendix A at the end of this book.

Instructions

(a) Using the consolidated income statement and balance sheet, identify items that may result in adjusting entries for prepayments.

(b) Using the consolidated income statement, identify two items that may result in adjusting entries for accruals.

(c) What was the amount of depreciation expense for 2007 and 2006? (You will need to examine the notes to the financial statements or the statement of cash flows.) Where was accumulated depreciation reported?

(d) What was the cash paid for income taxes during 2007, reported at the bottom of the consolidated statement of cash flows? What was income tax expense (provision for income taxes) for 2007? Where is income tax payable reported?

because of its accounting problems beazer was late in providing its audited financia 564179

Aug 29, 2021 | Uncategorized

The August 16, 2007, issue of the Wall Street Journalincludes an article by Michael Corkery and David Reilly titled “Beazer’s Accounting Woes Extend Roller Coaster Ride.”

Instructions

Read the article and answer the following.

(a) Explain what is meant by cookie jar accounting? Why might a company engage in cookie jar accounting?

(b) The article says the company released “unaudited” financial statements to investors.

What does “unaudited” mean? What are the implications to investors of receiving “unaudited” financial statements?

(c) Because of its accounting problems, Beazer was late in providing its audited financial statements to the SEC. What are the possible ramifications of not submitting an annual report on a timely basis?

what journal entry did laser recording make to record the accrued interest 564180

Aug 29, 2021 | Uncategorized

Laser Recording Systems, founded in 1981, produces disks for use in the home market. The following is an excerpt from Laser Recording Systems’ financial statements (all dollars in thousands).

Instructions

(a) Can you tell from the discussion whether Laser Recording Systems has prepaid its legal expenses and is now making an adjustment to the asset account Prepaid Legal Expenses, or whether the company is handling the legal expense via an accrued expense adjustment?

(b) Identify each of the adjustments Laser Recording Systems is discussing as one of the four types of possible adjustments discussed in the chapter. How is net income ultimately affected by each of the adjustments?

(c) What journal entry did Laser Recording make to record the accrued interest?

what are the ethical considerations of the president rsquo s request and terry rsquo 564182

Aug 29, 2021 | Uncategorized

Diamond Company is a pesticide manufacturer. Its sales declined greatly this year due to the passage of legislation outlawing the sale of several of Diamond’s chemical pesticides. During the coming year, Diamond will have environmentally safe and competitive replacement chemicals to replace these discontinued products. Sales in the next year are expected to greatly exceed those of any prior year. Therefore, the decline in this year’s sales and profits appears to be a one year aberration.

Even so, the company president believes that a large dip in the current year’s profits could cause a significant drop in the market price of Diamond’s stock and make it a takeover target. To avoid this possibility, he urges Terry Holton, controller, in making this period’s year end adjusting entries to accrue every possible revenue and to defer as many expenses as possible. The president says to Terry, “We need the revenues this year, and next year we can easily absorb expenses deferred from this year. We can’t let our stock price be hammered down!” Terry didn’t get around to recording the adjusting entries until January 17, but she dated the entries December 31 as if they were recorded then. Terry also made every effort to comply with the president’s request.

Instructions

(a) Who are the stakeholders in this situation?

(b) What are the ethical considerations of the president’s request and Terry’s dating theadjusting entries December 31?

(c) Can Terry accrue revenues and defer expenses and still be ethical?

prepare a personal balance sheet using the format you have learned for a classified 564183

Aug 29, 2021 | Uncategorized

Companies prepare balance sheets in order to know their financial position at a specific point in time. This enables them to make a comparison to their position at previous points in time and gives them a basis for planning for the future. In order to evaluate yourfinancial position, you can prepare a personal balance sheet. Assume that you have compiled the following information regarding your finances. (Hint:Some of the items might not be used in your personal balance sheet.)

Instructions

Prepare a personal balance sheet using the format you have learned for a classified balance sheet for a company. For the equity account, use M. Y. Own, Capital.

using the following tabular analysis show the effect of each transaction on the acco 564068

Aug 29, 2021 | Uncategorized

During 2010, Bleeker Corp. entered into the following transactions.

1. Borrowed $60,000 by issuing bonds.

2. Paid $9,000 cash dividend to stockholders.

3. Received $17,000 cash from a previously billed customer for services provided.

4. Purchased supplies on account for $3,100.

Using the following tabular analysis, show the effect of each transaction on the accounting equation Put explanations for changes to Stockholders’ Equity in the right hand margin. For Retained Earnings, use separate columns for Revenues, Expenses, and Dividends if necessary.

selected transactions for martinez company are presented on page 139 in journal form 564073

Aug 29, 2021 | Uncategorized

Selected transactions for Martinez Company are presented on page 139 in journal form (without explanations). Post the transactions to T accounts

from the ledger balances below prepare a trial balance for trowman company at june 3 564074

Aug 29, 2021 | Uncategorized

From the ledger balances below, prepare a trial balance for Trowman Company at June 30, 2010. All account balances are normal.

post these entries to the cash account of the general ledger to determine the ending 564078

Aug 29, 2021 | Uncategorized

Josh Borke recorded the following transactions during the month of April.

Post these entries to the Cash account of the general ledger to determine the ending balance in cash. The beginning balance in cash on April 1 was $1,600.

describe the effect of each transaction on assets liabilities and stockholders rsquo 564079

Aug 29, 2021 | Uncategorized

Selected transactions for Ruiz Advertising Company, Inc., are listed here.

1. Issued common stock to investors in exchange for cash received from investors.

2. Paid monthly rent.

3. Received cash from customers when service was provided.

4. Billed customers for services performed.

5. Paid dividend to stockholders.

6. Incurred advertising expense on account.

7. Received cash from customers billed in (4).

8. Purchased additional equipment for cash.

9. Purchased equipment on account.

Instructions

Describe the effect of each transaction on assets, liabilities, and stockholders’ equity. For example, the first answer is: (1) Increase in assets and increase in stockholders’ equity.

using the following tabular analysis show the effect of each transaction on the acco 564080

Aug 29, 2021 | Uncategorized

McBride Company entered into these transactions during May 2010.

1. Purchased computers for office use for $30,000 from Dell on account.

2. Paid $4,000 cash for May rent on storage space.

3. Received $12,000 cash from customers for contracts billed in April.

4. Provided computer services to Brieske Construction Company for $5,000 cash.

5. Paid Southern States Power Co. $11,000 cash for energy usage in May.

6. Stockholders invested an additional $40,000 in the business in exchange for common stock of the company.

7. Paid Dell for the computers purchased in (1).

8. Incurred advertising expense for May of $1,000 on account.

Instructions

Using the following tabular analysis, show the effect of each transaction on the accounting equation. Put explanations for changes to Stockholders’ Equity in the right hand margin.

prepare the debit ndash credit analysis for each transaction 564083

Aug 29, 2021 | Uncategorized

This information relates to Pickert Real Estate Agency.

Instructions

Prepare the debit–credit analysis for each transaction.

prepare a tabular analysis of the september transactions the column headings should 564084

Aug 29, 2021 | Uncategorized

Selected transactions for A. B. Coors Corporation during its first month in business are presented below.

A. B. Coors’s chart of accounts shows: Cash, Equipment, Accounts Payable, Common Stock, and Dividends.

Instructions

(a) Prepare a tabular analysis of the September transactions. The column headings should be: Cash + Equipment =Accounts Payable +Stockholders’ Equity. For transactions affecting stockholders’ equity, provide explanations in the right margin.

(b) Journalize the transactions. Do not provide explanations.

(c) Post the transactions to T accounts.

selected transactions from the journal of gipson inc during its first month of opera 564085

Aug 29, 2021 | Uncategorized

Selected transactions from the journal of Gipson Inc. during its first month of operations are presented here.

Instructions

(a) Post the transactions to T accounts.

(b) Prepare a trial balance at August 31, 2010.

prepare an income statement a retained earnings statement and a classified balance s 564087

Aug 29, 2021 | Uncategorized

The accounts in the ledger of Thornton Delivery Service contain the following balances on July 31, 2010.

Instructions

(a) Prepare a trial balance with the accounts arranged as illustrated in the chapter, and fill in the missing amount for Cash.

(b) Prepare an income statement, a retained earnings statement, and a classified balance sheet for the month of July 2010.

from an analysis of the retained earnings columns compute the net income or net loss 564092

Aug 29, 2021 | Uncategorized

On April 1 Flint Hills Travel Agency Inc. was established. These transactions were completed during the month.

1. Stockholders invested $25,000 cash in the company in exchange for common stock.

2. Paid $900 cash for April office rent.

3. Purchased office equipment for $2,800 cash.

4. Purchased $200 of advertising in the Chicago Tribune, on account.

5. Paid $500 cash for office supplies.

6. Earned $10,000 for services provided: Cash of $1,000 is received from customers, and the balance of $9,000 is billed to customers on account.

7. Paid $400 cash dividends.

8. Paid Chicago Tribuneamount due in transaction (4).

9. Paid employees’ salaries $1,200.

10. Received $9,000 in cash from customers billed previously in transaction (6).

Instructions

(a) Prepare a tabular analysis of the transactions using these column headings: Cash, Accounts Receivable, Supplies, Office Equipment, Accounts Payable, Common Stock, and Retained Earnings (with separate columns for Revenues, Expenses, and Dividends).Include margin explanations for any changes in Retained Earnings.

(b)From an analysis of the Retained Earnings columns, compute the net income or net loss for April.

diana kuhlmann started her own consulting firm kuhlmann consulting inc on may 1 2010 564093

Aug 29, 2021 | Uncategorized

Diana Kuhlmann started her own consulting firm, Kuhlmann Consulting Inc., on May 1, 2010. The following transactions occurred during the month of May.

prepare an income statement for august a retained earnings statement for august and 564094

Aug 29, 2021 | Uncategorized

Dick Reber created a corporation providing legal services, Dick Reber Inc., on July 1, 2010. On July 31 the balance sheet showed: Cash $4,000; Accounts Receivable $2,500; Supplies $500; Office Equipment $5,000; Accounts Payable $4,200; Common Stock $6,200; and Retained Earnings $1,600. During August the following transactions occurred.

1. Collected $1,500 of accounts receivable due from customers.

2. Paid $2,700 cash for accounts payable due.

3. Earned revenue of $5,400, of which $3,000 is collected in cash and the balance is due in September.

4. Purchased additional office equipment for $4,000, paying $400 in cash and the balance on account.

5. Paid salaries $1,400, rent for August $900, and advertising expenses $350.

6. Paid a cash dividend of $700.

7. Received $5,000 from Standard Federal Bank; the money was borrowed on a 4 month note payable.

8. Incurred utility expenses for the month on account $450.

Instructions

(a) Prepare a tabular analysis of the August transactions beginning with July 31 balances.

The column heading should be: Cash + Accounts Receivable + Supplies +

Office Equipment = Notes Payable + Accounts Payable + Common Stock + Retained Earnings.

(Use separate Revenue, Expense, and Dividend columns). Include margin explanations for any changes in Retained Earnings.

(b) Prepare an income statement for August, a retained earnings statement for August, and a classified balance sheet at August 31.

the bookkeeper for sandy mcclain rsquo s dance studio made the following errors in j 564095

Aug 29, 2021 | Uncategorized

P3 8A The Star Lite Theater Inc. was recently formed. It began operations in March 2010. The Star Lite is unique in that it will show only triple features of sequential theme movies. On March 1, the ledger of The Star Lite showed: Cash $16,000; Land $38,000; Buildings (concession stand, projection room, ticket booth, and screen) $22,000; Equipment $16,000; Accounts Payable $12,000; and Common Stock $80,000. During the month of March the following events and transactions occurred. Mar. 2 Rented the three Star Wars movies (Star Wars®, The Empire Strikes Back, and The Return of the Jedi) to be shown for the first three weeks of March. The film rental was $10,000; $2,000 was paid in cash and $8,000 will be paid on March 10. 3 Ordered the first three Star Trek movies to be shown the last 10 days of March. It will cost $400 per night. 9 Received $9,200 cash from admissions. 10 Paid balance due on Star Wars movies rental and $2,600 on March 1 accounts payable. 11 Hired J. Carne to operate the concession stand. Carne agrees to pay The Star Lite Theater 15% of gross receipts, payable monthly. 12 Paid advertising expenses $900. 20 Received $7,100 cash from customers for admissions. 20 Received the Star Trek movies and paid rental fee of $4,000. 31 Paid salaries of $3,800. 31 Received statement from J. Carne showing gross receipts from concessions of $10,000 and the balance due to The Star Lite of $1,500 for March. Carne paid half the balance due and will remit the remainder on April 5. 31 Received $20,000 cash from customers for admissions. In addition to the accounts identified above, the chart of accounts includes: Accounts Receivable, Admission Revenue, Concession Revenue, Advertising Expense, Film Rental Expense, and Salaries Expense. Hint: Journalize transactions, post, and prepare a trial balance. (SO 3, 5, 6, 7, 8) Instructions.

(a) Using T accounts, enter the beginning balances to the ledger.

(b) Journalize the March transactions, including explanations.

(c) Post the March journal entries to the ledger.

(d) Prepare a trial balance on March 31, 2010. Cash $ 31,750 Tot. trial balance $127,200 P3 9A The bookkeeper for Sandy McClain’s dance studio made the following errors in journalizing and posting.

1. A credit to Supplies of $600 was omitted.

2. A debit posting of $300 to Accounts Payable was inadvertently debited to Accounts Receivable.

3. A purchase of supplies on account of $450 was debited to Supplies for $540 and credited to Accounts Payable for $540.

4. A credit posting of $350 to Wages Payable was posted twice.

5. A debit posting to Wages Payable for $250 and a credit posting to Cash for $250 were made twice.

6. A debit posting for $1,200 of Dividends was inadvertently posted to Travel Expense instead.

7. A credit to Service Revenue for $450 was inadvertently posted as a debit to Service Revenue.

8. A credit to Accounts Receivable of $250 was credited to Accounts Payable. Hint: Analyze errors and their effects on the trial balance. (SO 8) Instructions For each error, indicate (a) whether the trial balance will balance; (b) the amount of the difference if the trial balance will not balance; and (c) the trial balance column that will have the larger total. Consider each error separately. Use the following form, in which error 1 is given as an example. (a) (b) (c) Error In Balance Difference Larger Column 1. No $600 Debit

from an analysis of the retained earnings columns compute the net income or net loss 564096

Aug 29, 2021 | Uncategorized

Hermesch Window Washing Inc. was started on May 1. Here is a summary of the May transactions.

1. Stockholders invested $20,000 cash in the company in exchange for common stock.

2. Purchased equipment for $7,000 cash.

3. Paid $700 cash for May office rent.

4. Paid $400 cash for supplies.

5. Purchased $750 of advertising in the Beacon Newson account.

6. Received $5,800 in cash from customers for service.

7. Paid a $500 cash dividend.

8. Paid part time employee salaries $1,700.

9. Paid utility bills $140.

10. Provided service on account to customers $1,000.

11. Collected cash of $240 for services billed in transaction (10).

Instructions

(a) Prepare a tabular analysis of the transactions using these column headings: Cash, Accounts Receivable, Supplies, Equipment, Accounts Payable, Common Stock, and Retained Earnings (with separate columns for Revenues, Expenses, and Dividends).

Revenue is called Service Revenue. Include margin explanations for any changes in Retained Earnings.

(b) From an analysis of the Retained Earnings columns, compute the net income or net loss for May.

what is the increase and decrease side for each account what is the normal balance f 564098

Aug 29, 2021 | Uncategorized

The financial statements of Tootsie Roll in Appendix A at the back of this book contain the following selected accounts, all in thousands of dollars.

Instructions

(a) What is the increase and decrease side for each account? What is the normal balance for each account?

(b) Identify the probable other account in the transaction and the effect on that account when:

(1) Accounts Receivable is decreased.

(2) Accounts Payable is decreased.

(3) Prepaid Expenses is increased.

(c) Identify the other account(s) that ordinarily would be involved when:

(1) Interest Expense is increased.

(2) Property, Plant, and Equipment is increased.

what are some of the advantages to chieftain from having this large a cash balance w 564100

Aug 29, 2021 | Uncategorized

Chieftain International, Inc., is an oil and natural gas exploration and production company. A recent balance sheet reported $208 million in assets with only $4.6 million in liabilities, all of which were short term accounts payable. During the year, Chieftain expanded its holdings of oil and gas rights, drilled 37 new wells, and invested in expensive 3 D seismic technology. The company generated $19 million cash from operating activities and paid no dividends. It had a cash balance of $102 million at the end of the year.

Instructions

(a) Name at least two advantages to Chieftain from having no long term debt. Can you think of disadvantages?

(b) What are some of the advantages to Chieftain from having this large a cash balance? What is a disadvantage?

(c) Why do you suppose Chieftain has the $4.6 million balance in accounts payable, since it appears that it could have made all its purchases for cash?

identify advantages and disadvantages that companies should consider when switching 564101

Aug 29, 2021 | Uncategorized

Doman Industries Ltd., whose products are sold in 30 countries worldwide, is an integrated Canadian forest products company.

Doman sells the majority of its lumber products in the United States, and a significant amount of its pulp products in Asia. Doman also has loans from other countries. For example, the Company borrowed US$160 million at an annual interest rate of 12%.

Doman must repay this loan, and interest, in U.S. dollars. One of the challenges global companies face is to make themselves attractive to investors from other countries. This is difficult to do when different accounting rules in different countries blur the real impact of earnings. For example, in a recent year Domanreported a loss of $2.3 million, using Canadian accounting rules. Had it reported under U.S. accounting rules, its loss would have been $12.1 million. Many companies that want to be more easily compared with U.S. and other global competitors have switched to U.S. accounting principles. Canadian National Railway,

Corel, Cott, Inco, and Thomson Corporation are but a few examples of large Canadian companies whose financial statements are now presented in U.S. dollars, adhere to U.S. GAAP, or are reconciled to U.S. GAAP.

Instructions

(a) Identify advantages and disadvantages that companies should consider when switching to U.S. reporting standards.

(b) Suppose you compare Doman Industries to a U.S. based competitor. Do you believe the use of country specific accounting policies would hinder your ability to compare the companies? If so, explain how.

(c) Suppose you compare Doman Industries to a Canadian based competitor. If the companies apply generally acceptable Canadian accounting policies differently, how could this affect your ability to compare their financial results?

(d) Do you see any significant distinction between comparing statements prepared using generally accepted accounting principles of different countries and comparing statements prepared using generally accepted accounting principles of the same country

(e.g. U.S.) but that apply the principles differently?

who are the stakeholders in this situation 564103

Aug 29, 2021 | Uncategorized

Monica Geller is the assistant chief accountant at BIT Company, a manufacturer of computer chips and cellular phones. The company presently has total sales of $20 million. It is the end of the first quarter and Monica is hurriedly trying to prepare a general ledger trial balance so that quarterly financial statements can be prepared and released to management and the regulatory agencies. The total credits on the trial balance exceed the debits by $1,000.

In order to meet the 4 P.M. deadline, Monica decides to force the debits and credits into balance by adding the amount of the difference to the Equipment account. She chose Equipment because it is one of the larger account balances; percentage wise it will be the least misstated. Monica plugs the difference! She believes that the difference is quite small and will not affect anyone’s decisions. She wishes that she had another few days to find the error but realizes that the financial statements are already late.

Instructions

(a) Who are the stakeholders in this situation?

(b) What ethical issues are involved?

(c) What are Monica’s alternatives?

in their annual reports to stockholders companies must report or disclose informatio 564105

Aug 29, 2021 | Uncategorized

In their annual reports to stockholders, companies must report or disclose information about all liabilities, including potential liabilities related to environmental clean up. There are many situations in which you will be asked to provide personal financial information about your assets, liabilities, revenue, and expenses. Sometimes you will face difficult decisions regarding what to disclose and how to disclose it. Instructions Suppose that you are putting together a loan application to purchase a home. Based on your income and assets, you qualify for the mortgage loan, but just barely. How would you address each of the following situations in reporting your financial position for the loan application? Provide responses for each of the following questions. (a) You signed a guarantee for a bank loan that a friend took out for $20,000. If your friend doesn”t pay, you will have to pay. Your friend has made all of the payments so far, and it appears he will be able to pay in the future. (b) You were involved in an auto accident in which you were at fault. There is the possibility that you may have to pay as much as $50,000 as part of a settlement. The issue will not be resolved before the bank processes your mortgage request. (c) The company at which you work isn”t doing very well, and it has recently laid off employees. You are still employed, but it is quite possible that you will lose your job in the next few months.

before each of its two big semiannual sales nordstrom prints and mails advertisement 564026

Aug 29, 2021 | Uncategorized

Before each of its two big semiannual sales, Nordstrom prints and mails advertisements to its preferred customers and also prints and installs in its stores a variety of signs announcing the sales. Assume that these expenditures cost $2 million per year. Clearly, Nordstrom management believes that spending $2 million to promote the semiannual sales will increase gross margin (sales revenues less cost of sales) by at least $2 million. However, it cannot establish a causal link between any specific promotional expenditure and the sale of a specific item. As a result, Nordstrom treats the promotion costs as period expenses in the period incurred:

To record $2 million of advertising and promotion costs.

indicate the amount of revenue or expense that crandall recognizes during april 564027

Aug 29, 2021 | Uncategorized

Revenue and expense recognition. Crandall SA uses the accrual basis of accounting and recognizes revenues at the time it sells goods or renders services. For each transaction, indicate the amount of revenue or expense that Crandall recognizes during April, and show the journal entry or entries that Crandall would make in April.

a. Collects €15,000 cash from customers during April for merchandise sold and delivered in March. The cost of the merchandise to the firm was €8,000.

b. Sells merchandise to customers during April for €24,500 cash. The merchandise cost the firm €6,500.

c. Sells to customers, on account, merchandise with a selling price of €105,000. The firm expects to collect the cash during May. The merchandise cost the firm €82,000 when it purchased the items from its supplier last month. The firm has not yet paid the supplier for the merchandise.

d. Pays suppliers €45,500 during April for merchandise received by the firm from its suppliers and sold to customers during March for €109,000.

e. Pays suppliers €50,000 during April for merchandise received from its suppliers and sold to customers during April. Crandall sold the merchandise for €90,400.

f. Receives from suppliers and sells to customers during April merchandise that cost €20,000. The selling price of the merchandise to the customer was €38,000, all on account. The firm expects to pay the supplier during May.

g. Receives from suppliers during April merchandise that cost €101,000 and that the firm expects to pay for during May. The firm also expects to sell the merchandise in May for €124,000.

h. Receives €26,500 from customers for merchandise that the firm will deliver in May.

The firm does not yet have the merchandise and expects to acquire it in May for €23,000.

collects 800 cash from a customer during march for a custom made suit that the firm 564035

Aug 29, 2021 | Uncategorized

Revenue recognition. Neiman Marcus, a U.S. retailer, uses the accrual basis of accounting and follows U.S. GAAP. It recognizes revenue at the time it sells merchandise. Indicate the amount of revenue (if any) the firm recognizes during the months of February, March, and April in each of the following hypothetical transactions, in which Neiman Marcus does the following:

a. Collects $800 cash from a customer during March for a custom made suit that the firm will make and deliver to the customer in April.

b. Collects $2,160 cash from customers for meals served in the firm’s restaurant during March.

c. Collects $39,200 cash from customers during March for merchandise sold and delivered in February.

d. Sells merchandise to customers during March on account, for which the firm will collect $59,400 cash from customers during April.

e. Rents space in its store to a travel agency for $9,000 a month, effective March 1. Receives $18,000 cash on March 1 for two months’ rent.

f. Same as part e, except that it receives the check for the March and April rent on April 1.

fonterra has not yet delivered the milk or invoiced the grocery store 564036

Aug 29, 2021 | Uncategorized

Revenue recognition. Fonterra Cooperative Group Limited (Fonterra), a New Zealand dairy cooperative, uses the accrual basis of accounting and recognizes revenue at the time it sells products or renders services. Fonterra applies New Zealand accounting standards and reports its results in millions of New Zealand dollars (NZ$). In answering this problem, assume Fonterra uses IFRS. Indicate which of the following transactions or events immediately gives rise to Fonterra’s recognition of revenue.

a. Fonterra has completed the pasteurization of an order of 13,000 liters of milk it will deliver to a grocery store chain next week. Fonterra has not yet delivered the milk or invoiced the grocery store. The selling price of the milk is NZ$26,000.

b. Refer to part a, and assume that the grocery store paid Fonterra a deposit of NZ$5,000 on the order of the milk.

c. Fonterra delivered the milk and billed the grocery store. The grocery store has not yet paid the invoice.

d. One day after delivery, the grocery store called Fonterra and reported that it has to destroy 3,000 liters of milk because it had spoiled sometime prior to its delivery. The grocer refuses to pay for these 3,000 liters.

e. Fonterra spent NZ$10 million to develop a technique to transform a by product of casein (a protein found in milk and cheese) into ethanol. Fonterra expects to use this technique to generate sales of at least NZ$2 million over the next year.

f. Refer to part e, and assume that Fonterra signed contracts worth NZ$400 million for ethanol sales.

expense recognition tesco plc is a british based grocer and retailer chain 564038

Aug 29, 2021 | Uncategorized

Expense recognition. Tesco Plc. is a British based grocer and retailer chain. It uses the accrual basis of accounting and recognizes revenue at the time it sells goods or renders services. It applies IFRS and reports in pounds sterling (£). Indicate the amount of expense recognized during October (if any) from each of the following hypothetical transactions or events. The firm does the following:

a. Pays £440,000 on October 5 for commercials that appeared on British television during September.

b. Pays £1,200,000 on October 6 for refrigeration units delivered to its stores on September 30. The firm expects the refrigerators to last for five years and have no salvage value.

c. Pays £300,000 on October 10 for property taxes for the period from October 1 of this year to September 30 of next year.

d. Pays £15,500 on October 15 for cleaning supplies purchased on October 10. Cleaning supplies on hand on October 1 cost £3,500 and on October 31 cost £5,400.

e. Pays £4,000 on October 20 for repairs to a forklift truck on October 1. The truck had a remaining useful life of five years on October 1.

f. Pays £100,000 on October 25 as a deposit on land Tesco plans to purchase for a new store.

g. Pays £200,000 on October 31 as rent on a warehouse for October and November.

compute net income for the year ended january 31 2008 by analyzing the change in ret 564039

Aug 29, 2021 | Uncategorized

Relating net income to balance sheet changes. Comparative balance sheet data for Bombardier Corporation (Bombardier), a Canadian airplane manufacturer, as of January 31, 2007, and January 31, 2008, appear in the following display, based on Bombardier’s financial reports as of January 31, 2008. Bombardier applies Canadian accounting standards and reports in millions of U.S. dollars. In answering these questions, assume Bombardier uses either U.S. GAAP or IFRS; for the purposes of this problem, this choice will not matter.

Bombardier declared and paid dividends of $30 million during the year ended January 31, 2008. During the same year, the firm also reported a positive adjustment to Retained Earnings of $12 million. Net income for 2008 was $293 million.

a. Compute net income for the year ended January 31, 2008, by analyzing the change in retained earnings.

b. Demonstrate that the following relation holds: Net Income _ Increase in Assets _ Increase in Liabilities _ Increase in Contributed Capital _ Dividends and Adjustments

which increased retained earnings by huf307 million 564040

Aug 29, 2021 | Uncategorized

Relating net income to balance sheet changes. Magyar Telekom (Magyar), a Hungarian telecommunications company, reported the following balance sheet information for the years ended December 31, 2006 and 2007. Magyar applies IFRS and reports in millions of Hungarian forints (HUF).

During 2007, Magyar declared and paid dividends of HUF72,729 million and made other adjustments, which increased retained earnings by HUF307 million.

a. Compute Magyar’s balance in Retained Earnings for 2006.

b. Compute Magyar’s net income for 2007.

compute the missing amounts for 2007 and 2008 564041

Aug 29, 2021 | Uncategorized

Income statement relations. Selected income statement information for Lenovo Group Limited (Lenovo), a Hong Kong personal computer manufacturer, for two recent years appears in the following display, based on Lenovo’s financial statements for the year ended March 31, 2008. Lenovo applies Hong Kong financial reporting standards and reports its results in thousands of U.S. dollars. In answering this question, assume Lenovo uses either U.S. GAAP or IFRS; for purposes of this problem, this choice will not matter.