calculating the profit for the period.
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The owner of Time Traders requested you to calculate the net profit for the year ended
30 June 2020. Mr Minute, the owner, has not been very diligent in keeping records. He has presented
you with the following information:
His assets and liabilities at the beginning of the financial year were as follows:
Equipment at carrying value R75 000
Vehicles at carrying value R 125 000
Trading inventory R180 000
Cash in bank R32 000
Debtors R31 500
Creditors R8 500
Loan: Second Bank (14%) R50 000
The bank statements show a credit balance of R48 790 as at 30 June 2020.
All the cash received has been deposited.
A stock‐take performed on 30 June 2020, showed inventory on hand with a cost price of
R230 000.
The debtors balance at year‐end is R38 000 and the creditors balance is R16 225.
Equipment was purchased during the year at a cost price of R5 000.
The owner took R23 000 in cash for personal use during the year ended 30 June 2020.
R5 000 was repaid on the loan during the year.
Please may I get assistance calculating the profit for the period.
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- It is the end of 2019 and you are an accountant for Stone Company. During 2019, sales of the companys products slumped and the companys earnings are expected to be much less than those of 2018. The president comes to you with an idea. He says, Our companys property, plant, and equipment cost 300,000, and that is the amount we usually report on our balance sheet. However, I just had these assets appraised by an independent appraiser, and she says they are worth 400,000. I think that the company should report the property, plant, and equipment at this amount on its December 31, 2019, balance sheet and should report the 100,000 increase in value as a gain on the 2019 income statement. If we use this approach, it will show how much our company is really worth and increase our earnings. This will make our shareholders happy. What do you think? Required: Prepare a written response to the president.It is February 16, 2020, and you are auditing Davenport Corporation's financial statements for 2019 (which will be issued in March 2020). You read in the newspaper that Travis Corporation, a major customer of Davenport, is in financial difficulty. Included in Davenports accounts receivable is 50,000 (a material amount) owed to it by Travis. You approach Jim Davenport, president, with this information and suggest that a reduction of accounts receivable and recognition of a loss for 2019 might be appropriate. Jim replies, Why should we make an adjustment? Ted Travis, the president of Travis Corporation, is a friend of mine; he will find a way to pay us, one way or another. Furthermore, this occurred in 2020, so lets wait and see what happens; we can always make an adjustment later this year. Our 2019 income and year-end working capital are not that high; our creditors and shareholders wouldnt stand for lower amounts than they already are. Required: From financial reporting and ethical perspectives, prepare a response to Jim Davenport regarding this issue.The owner of Time Traders requested you to calculate the net profit for the year ended30 June 2020. Mr Minute, the owner, has not been very diligent in keeping records. He has presentedyou with the following information: His assets and liabilities at the beginning of the financial year were as follows:Equipment at carrying value R75 000Vehicles at carrying value R 125 000Trading inventory R180 000Cash in bank R32 000Debtors R31 500Creditors R8 500Loan: Second Bank (14%) R50 000 The bank statements show a credit balance of R48 790 as at 30 June 2020. All the cash received has been deposited. A stock‐take performed on 30 June 2020, showed inventory on hand with a cost price ofR230 000. The debtors balance at year‐end is R38 000 and the creditors balance is R16 225. Equipment was purchased during the year at a cost price of R5 000. Depreciation on vehicles for the year amounted to R20 000 and for the equipment R15 000. The owner took R23 000 in cash for personal use during the…
- - Financial Statements and Closing Entries You can download the following information. Williams Inc. has the following information for calendar year 2020: 2020 Prepaid Insurance 400 Bank Service Charge Expense 30 Allowance for Doubtful Accounts 80 Cost of Goods Sold 5,900 Inventory 550 Rent Expense 20 Common Stock 14,000 Depreciation Expense 800 Sales Revenue 14,925 Income Tax Expense 2,400 Cash 3,700 Bad Debt Expense 75 Accounts Receivable 1,300 Interest Revenue 5 Accumulated Depreciation 3,750 Retained Earnings 15,550 Salaries Expense 1,200 Dividends 50 Building 32,375 Accounts Payable 490 Prepare, in good form, the multiple-step Income Statement for Williams Inc. for 2020.He also supplied the following additional financial statement analysis data: The current ratio was 1.60. The debt ratio was 60%. The average collection period was 40 days The gross profit margin was 25%. Inventory turnover was 6.0. There are 365 days in the year. Sales totalled R1 800 000 The total asset turnover was 1.20. YOU ARE REQUIRED TO: Assist your varsity friend by completing his business statement of financial position at 31 December 2020 by using the information supplied to you. Show all your calculation clearly for each figure missing (I-IX). NB: You can start with any figureConsider the following potential events that might have occurred to Global on December 30, 2019. For each one, indicate which line items in Global's balance sheet would be affected and by how much. Also indicate the change to Global's book value of equity. a. Global used $19.2 million of its available cash to repay $19.2 million of its long-term debt. b. A warehouse fire destroyed $4.7 million worth of uninsured inventory. c. Global used $4.9 million in cash and $5.4 million in new long-term debt to purchase a $10.3 million building. d. A large customer owing $3.1 million for products it already received declared bankruptcy, leaving no possibility that Global would ever receive payment. e. Global's engineers discover a new manufacturing process that will cut the cost of its flagship product by more than 51%. f. A key competitor announces a radical new pricing policy that will drastically undercut Global's prices. c. Global used $4.9 million in cash and $5.4 million in new long-term…
- Consider the following potential events that might have occurred to Global on December 30, 2019. For each one, indicate which line items in Global's balance sheet would be affected and by how much. Also indicate the change to Global's book value of equity. a. Global used $19.2 million of its available cash to repay $19.2 million of its long-term debt. b. A warehouse fire destroyed $4.7 million worth of uninsured inventory. c. Global used $4.9 million in cash and $5.4 million in new long-term debt to purchase a $10.3 million building. d. A large customer owing $3.1 million for products it already received declared bankruptcy, leaving no possibility that Global would ever receive payment. e. Global's engineers discover a new manufacturing process that will cut the cost of its flagship product by more than 51%. f. A key competitor announces a radical new pricing policy that will drastically undercut Global's prices. Global used $19.2 million of its available cash to repay $19.2 million…Consider the following potential events that might have occurred to Global on December 30, 2019. For each one, indicate which line items in Global's balance sheet would be affected and by how much. Also indicate the change to Global's book value of equity. a. Global used $19.6 million of its available cash to repay $19.6 million of its long-term debt. b. A warehouse fire destroyed $5.2 million worth of uninsured inventory. c. Global used $4.7 million in cash and $4.6 million in new long-term debt to purchase a $9.3 million building. d. A large customer owing $2.8 million for products it already received declared bankruptcy, leaving no possibility that Global would ever receive payment. e. Global's engineers discover a new manufacturing process that will cut the cost of its flagship product by more than 46%. f. A key competitor announces a radical new pricing policy that will drastically undercut Global's prices. a. Global used $19.6 million of its available cash to repay $19.6…Consider the following potential events that might have occurred to Global on December 30, 2019. For each one, indicate which line items in Global's balance sheet would be affected and by how much. Also indicate the change to Global's book value of equity. a. Global used $19.6 million of its available cash to repay $19.6 million of its long-term debt. b. A warehouse fire destroyed $5.2 million worth of uninsured inventory. c. Global used $4.7 million in cash and $4.6 million in new long-term debt to purchase a $9.3 million building. d. A large customer owing $2.8 million for products it already received declared bankruptcy, leaving no possibility that Global would ever receive payment. e. Global's engineers discover a new manufacturing process that will cut the cost of its flagship product by more than 46%. f. A key competitor announces a radical new pricing policy that will drastically undercut Global's prices. d. A large customer owing $2.8 million for products it already received…
- GGG Traders recruited you as their accountant for 30 June 2020 financial year. The business has the following information. Credit Sales N$ 305 000 Mark-up 30% Opening Stock N$ 18 600 Closing Stock N$ 24 800 Total Expenses N$ 34 250 Debtors Turnover 15 Times Creditors Turnover 8 Times Current Assets N$ 68 400 Current Liabilities N$ 35 500 Calculate the following a) Gross profit b) Cost of Sale c) Purchases d) Inventory turnover (days) e) Net profit margin f) Debtors Balance g) Creditors Balance h) Current Ratio i) Cash balance j) Bank OverdraftFinancial Statements and Closing Entries You can download the following information. Williams Inc. has the following information for calendar year 2020: 2020 Prepaid Insurance 400 Bank Service Charge Expense 30 Allowance for Doubtful Accounts 80 Cost of Goods Sold 5,900 Inventory 550 Rent Expense 20 Common Stock 14,000 Depreciation Expense 800 Sales Revenue 14,925 Income Tax Expense 2,400 Cash 3,700 Bad Debt Expense 75 Accounts Receivable 1,300 Interest Revenue 5 Accumulated Depreciation 3,750 Retained Earnings 15,550 Salaries Expense 1,200 Dividends 50 Building 32,375 Accounts Payable 490 Prepare, in good form, the classified Balance Sheet ONLY through the Current Asset section for Williams Inc. for 2020.Uptodate Projects Ltd has approached you to analyse and interpret their financial statements.The following amounts were extracted from the records of the company: 2019 2020 2021 R R RTurnover 200 000 220 000 250 000Cost of sales 140 000 150 000 165 000Profit before interest and tax 12 000 11 000 10 500Accounts receivable 16 500 25 000 29 600Accounts payable 13 000 14 700 17000 Inventory 18 750 26 000 30 400Bank/ (Overdraft)…