Adjusted Financial Statements 1. At 31 January 2020 the following trial balance was extracted from the books of Yusiti.ParticularsDebitCreditRMRMCapital 1 February 2019Vehicles at costEquipment at costPurchases and salesProvision for depreciation at 1 February 2019:101,43035.00080,000284,680 503,520Vehicles21,00035.000650EquipmentReturn inward and return outwardsFinance expensesStock at 1 February 2019Vehicles expensesRent, rates and insuranceOffice expensesDrawingsPetty cashWages and salariesBad debtsDebtors and creditorsCash at bank1,3401,22025,5704,9307,42021,94023,55020095,3701.24083,21018.95014.880TOTAL680.550 580.550Additional information as at 31 January 2020:No. Particularsi. Stock valued atii. Insurance prepaidiii. I Goods taken from stock for own useiv. Wages duev. Provision for doubtful debt requiredvi. Provision for depreciation is to be provided as follows:RM29,7503404202,400620straight line methodreducing balance methodVehicles30%Equipment -25%Required:a) Statement Profit or Loss and Other Comprehensive Income for the year ended 31January 2020.b) Statement of Financial Position as at 31 January 2020.

Net sale=Sale-Return=RM 503,520-RM 1,340=RM 502,180

1. At 31 January 2020 the following trial balance was extracted from the books of Yusiti. Particulars Debit Credit RM RM Capital 1 February 2019 Vehides at cost Equipment at cost Purchases and sales Provision for depreciation at 1 February 2019: 101,430 35,000 80,000 284.680 503.520 Vehicles Equipment Return inward and return outwards Finance expenses Stock at 1 February 2019 Vehides expenses Rent, rates and insurance Office expenses Drawings Petty cash Wages and salaries Bad debts Debtors and creditors Cash at bank 21,000 35.000 650 1.340 1,220 25,570 4,930 7.420 21,940 23,550 200 95,370 1,240 83,210 14,880 580.550 680.550 18.950 TOTAL Additional information as at 31 January 2020: No. Particulars i Stock valued at ii. Insurance prepaid ii. Goods taken from stock for own use iv. Wages due v. Provision for doubtful debt required vi. Provision for depreciation is to be provided as follows: RM 29,750 340 420 2,400 620 Vehicles Equipment - straight line method reducing balance method 30% 25% Required: a) Statement Profit or Loss and Other Comprehensive Income for the year ended 31 January 2020. b) Statement of Financial Position as at 31 January 2020.

1. At 31 January 2020 the following trial balance was extracted from the books of Yusiti. Particulars Debit Credit RM RM Capital 1 February 2019 Vehides at cost Equipment at cost Purchases and sales Provision for depreciation at 1 February 2019: 101,430 35,000 80,000 284.680 503.520 Vehicles Equipment Return inward and return outwards Finance expenses Stock at 1 February 2019 Vehides expenses Rent, rates and insurance Office expenses Drawings Petty cash Wages and salaries Bad debts Debtors and creditors Cash at bank 21,000 35.000 650 1.340 1,220 25,570 4,930 7.420 21,940 23,550 200 95,370 1,240 83,210 14,880 580.550 680.550 18.950 TOTAL Additional information as at 31 January 2020: No. Particulars i Stock valued at ii. Insurance prepaid ii. Goods taken from stock for own use iv. Wages due v. Provision for doubtful debt required vi. Provision for depreciation is to be provided as follows: RM 29,750 340 420 2,400 620 Vehicles Equipment - straight line method reducing balance method 30% 25% Required: a) Statement Profit or Loss and Other Comprehensive Income for the year ended 31 January 2020. b) Statement of Financial Position as at 31 January 2020.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter21: The Statement Of Cash Flows

Section: Chapter Questions

Problem 17E: Investing Activities and Depreciable Assets Verlando Company had the following account balances and...

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Refer to the information for Cox Inc. above. What amount would Cox record as depreciation expense at December 31, 2020, if the double-declining-balance method were used? a. $187,200 b. $192,000 c. $195,200 d. $312, 000
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Company is considering purchasing EKC Company. EKCs balance sheet at December 31, 2019, is as follows: At December 31, 2019, Elm discovered the following about EKC: a. No allowance for uncollectible accounts has been established. An allowance of 5,000 is considered appropriate. b. The LIFO inventory method has been used. The FIFO inventory method would be used if EKC were purchased by Elm. The FIFO inventors-valuation of the December 31, 2019, ending inventors-would be 180,000. c. The fair value of the property, plant, and equipment (net) is 730,000. d. The company has an unrecorded patent that is worth 120,000. e. The book values of the current liabilities and bonds payable are the same as their market values. Required: 1. Compute the value of the goodwill if Elm pays 1,350,000 for EKC. 2. Next Level Why would the book value of a companys identifiable net assets differ from its market value?
Gray Companys financial statements showed income before income taxes of 4,030,000 for the year ended December 31, 2020, and 3,330,000 for the year ended December 31, 2019. Additional information is as follows: Capital expenditures were 2,800,000 in 2020 and 4,000,000 in 2019. Included in the 2020 capital expenditures is equipment purchased for 1,000,000 on January 1, 2020, with no salvage value. Gray used straight-line depreciation based on a 10-year estimated life in its financial statements. As a result of additional information now available, it is estimated that this equipment should have only an 8-year life. Gray made an error in its financial statements that should be regarded as material. A payment of 180,000 was made in January 2020 and charged to expense in 2020 for insurance premiums applicable to policies commencing and expiring in 2019. No liability had been recorded for this item at December 31, 2019. The allowance for doubtful accounts reflected in Grays financial statements was 7,000 at December 31, 2020, and 97,000 at December 31, 2019. During 2020, 90,000 of uncollectible receivables were written off against the allowance for doubtful accounts. In 2019, the provision for doubtful accounts was based on a percentage of net sales. The 2020 provision has not yet been recorded. Net sales were 58,500,000 for the year ended December 31, 2020, and 49,230,000 for the year ended December 31, 2019. Based on the latest available facts, the 2020 provision for doubtful accounts is estimated to be 0.2% of net sales. A review of the estimated warranty liability at December 31, 2020, which is included in other liabilities in Grays financial statements, has disclosed that this estimated liability should be increased 170,000. Gray has two large blast furnaces that it uses in its manufacturing process. These furnaces must be periodically relined. Furnace A was relined in January 2014 at a cost of 230,000 and in January 2019 at a cost of 280,000. Furnace B was relined for the first time in January 2020 at a cost of 300,000. In Grays financial statements, these costs were expensed as incurred. Since a relining will last for 5 years, Grays management feels it would be preferable to capitalize and depreciate the cost of the relining over the productive life of the relining. Gray has decided to nuke a change in accounting principle from expensing relining costs as incurred to capitalizing them and depreciating them over their productive life on a straight-line basis with a full years depreciation in the year of relining. This change meets the requirements for a change in accounting principle under GAAP. Required: 1. For the years ended December 31, 2020 and 2019, prepare a worksheet reconciling income before income taxes as given previously with income before income taxes as adjusted for the preceding additional information. Show supporting computations in good form. Ignore income taxes and deferred tax considerations in your answer. The worksheet should have the following format: 2. As of January 1, 2020, compute the retrospective adjustment of retained earnings for the change in accounting principle from expensing to capitalizing relining costs. Ignore income taxes and deferred tax considerations in your answer.
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