ment as it would appear in the financial statements of Fit Line Gym for the year ended 31 December 2020 in compliance with International Financial Reporting Standards suitable for this type of business entity. Show all workings. Round off all calculations to the nearest Rand. You may ignore the total column.
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Prepare the note for Property, plant and equipment as it would appear in the financial statements of Fit Line Gym for the year ended 31 December 2020 in compliance with International Financial Reporting Standards suitable for this type of business entity. Show all workings. Round off all calculations to the nearest Rand. You may ignore the total column.
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- Adjustment for depreciation The estimated amount of depredation on equipment for the current year is $133,000. a. How is the adjustment recorded? Indicate each account affected, whether the account is increased or decreased, and the amount of the increase or decrease. b. If the adjustment in (a) was omitted, which items would be erroneously stated on (1) the income statement for the year and (2) the balance sheet as of December 31?Using the following information, A. Make the December 31 adjusting journal entry for depreciation. B. Determine the net book value (NBV) of the asset on December 31. Cost of asset, $195,000 Accumulated depreciation, beginning of year, $26,000 Current year depreciation, $13,000Comprehensive: Balance Sheet, Schedules, and Notes The following is an alphabetical listing of Stone Boat Companys balances sheet accounts and account balances on December 31, 2019: Additional information: 1. The company reports on the balance sheet the net book value of property and equipment and long-term liabilities (known as control accounts). The related details are disclosed in the notes. 2. The straight-line method is used to depreciate property and equipment based upon cost, estimated residual value, and estimated life. The costs of the assets in this account are: land, 29,500; buildings, 164,600; store fixtures, 72,600; and office equipment, 30,000. 3. The accumulated depreciation breakdown is as follows: buildings, 54,600; store fixtures, 37,400; and office equipment, 17,300. 4. The long term debt includes 12%, 36,000 face value bonds that mature on December 31, 2024, and have an unamortized bond discount of 1,000; 11%, 48,000 face value bonds that mature on December 31, 2025, have a premium on bonds payable of 1,800, and whose retirement is being funded by a bond sinking fund; and a 13% note payable that has a face value of 6,200 and matures on January 1, 2022. 5. The non-interest-bearing note receivable matures on June 1, 2023. 6. Inventory is listed at lower of cost or market; cost is determined on the basis of average cost. 7. The investment in affiliate is carried at cost. The company has guaranteed the interest on 12%, 50,000, 15-year bonds issued by this affiliate, Jay Company. 8. Common stock has a 10 par value per share, 10,000 shares are authorized, and 1,000 shares were issued during 2019 at a price of 13 per share, resulting in 8,000 shares issued at year-end. 9. Preferred stock has a 50 par value per share, 2,000 shares are authorized, and 140 shares were issued during 2019 at a price of 55 per share, resulting in 640 shares issued at year-end. 10. On January 15, 2020, before the December 31, 2019, balance sheet was issued, a building with a cost of 20,000 and a book value of 7,000 was totally destroyed. Insurance proceeds will amount to only 5,000. 11. Net income and dividends declared and paid during the year were 50,500 and 21,000, respectively. Required: 1. Prepare Stone Boats December 31, 2019, balance sheet (including appropriate parenthetical notations). 2. Prepare a statement of shareholders equity for 2019. (Hint: Work back from the ending account balances.) 3. Prepare notes that itemize the balance sheet control accounts and those necessary to disclose any company accounting policies, contingent liabilities, and subsequent events. 4. Next Level Compute the debt-to-assets ratio at the cud of 2019. What is your evaluation of this ratio if it was 39% at the end of 2018? Use the following information for P415 and P416: McCormick Company, Inc. is one of the worlds leading producers of spices, herbs, seasonings, condiments, and other flavorings for foods. Its products are sold to consumers, with sonic of the leading brands of spices and seasonings, as well as to industrial producers of foods. McCormicks consolidated balance sheets for 20X2 and 20X3 follow.
- Balance Sheet and Notes Listed here in random order are Wicks Construction Limiteds balance sheet accounts and related ending balances as of December 31, 2019: Additional information: 1. The company reports on the balance sheet the total amount for inventories and the net book value of property, plant, and equipment, with the related details for each account disclosed in notes. 2. The straight line method is used to depreciate buildings, machinery, and equipment, based upon their cost and estimated residual values and lives. A breakdown of property, plant, and equipment shows the following: land at a cost of 32,000, buildings at a cost of 182,400 and a net book value of 120,200, machinery at a cost of 63,900, and related accumulated depreciation of 18,600, and equipment (40% depreciated) at a cost of 53,000. 3. Patents are amortized on a straight line basis directly to the Patent account. 4. Inventories are listed at the lower of cost or market value using an average cost. The inventories include raw-materials, 22,200; work in process, 34,700; and finished goods, 41,600. 5. Common stock has a 10 par value per share, 12,000 shares are authorized, and 6,280 shares have been issued. 6. Preferred stock has a 100 par value per share, 1,000 shares are authorized, and 400 shares have been issued. 7. The investment in bonds is carried at the original cost, which is the face value, and is being held to maturity. 8. Short-term investments in marketable securities were purchased at year-end. 9. The bonds payable mature on December 31, 2024. 10. The company attaches a 1-year warranty on all the products it sells. Required: 1. Prepare Wicks Constructions December 31, 2019, balance sheet (including appropriate parenthetical notations). 2. Prepare notes to accompany the balance sheet that itemize company accounting policies; inventories; and property, plant, and equipment. 3. Next Level Compute the current ratio and the quick ratio. How do these two ratios provide different information about the companys liquidity? Why are these ratios useful?Consider the following situations and determine (1) which type of liability should be recognized (specific account), and (2) how much should be recognized in the current period (year). A. A business depreciates a building with a book value of $12,000, using straight-line depreciation, no salvage value, and a remaining useful life of six years. B. An organization has a line of credit with a supplier. The company purchases $35,500 worth of inventory on credit. Terms of purchase are 3/20, n/60. C. An employee earns $1,000 in pay and the employer withholds $46 for federal income tax. D. A customer pays $4,000 in advance for legal services. The lawyer has previously recognized 30% of the services as revenue. The remainder is outstanding.Spreadsheet The following 2019 information is available for Payne Company: Partial additional information: The net income for 2019 totaled 1,600. During 2019, the company sold, for 390, equipment that cost 390 and had a book value of 300. The company sold land for 200, resulting in a loss of 40. The remaining change in the Land account resulted from the purchase of land through the issuance of common stock. Required: Making whatever additional assumptions that are necessary, prepare a spreadsheet to support the 2019 statement of cash flows for Payne.
- Vorst depreciates Asset A on the double-declining-balance method. How much depreciation expense should Vorst record in 2020 for Asset A? a. 32,000 b. 25,600 c. 14,400 d. 6,400Investing Activities and Depreciable Assets Verlando Company had the following account balances and information available for 2019: During 2019, Verlando recorded the following transactions affecting these accounts: a. Land with a carrying value of 35,000 was sold at a loss of 6,000. b. Land and equipment were purchased with cash during the period. c. Equipment with an original cost of 20,000 that had a book value of 4,000 was written off as obsolete. d. A building with an original cost of 60,000 and accumulated depreciation of 25,000 was sold at a 23,000 gain. e. Depreciation expense and amortization expense were recorded. f. Net income for the year was 60,000. g. A patent was acquired during the year in exchange for 1,200 shares of common stock with a par value of 1 per share and a market value of 26 per share. h. Additional marketable securities wefe purchased during the year. i. Verlando Company has no notes payable in the liabilities section of its balance sheet. Required: 1. Next Level Assuming that Verlando uses the indirect method to determine operating cash flows, what is the amount of depreciation expense and amortization expense that would be added back to net income: 2. Prepare the investing activities section of the statement of cash flows for the year ended December 31, 2019. 3. Prepare the disclosure for significant noncash transactions for the statement of cash flows for the year ended December 31, 2019.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
- Refer to the information for Cox Inc. above. What amount would Cox record as depreciation expense for 2019 if the units-of-production method were used ( Note: Round your answer to the nearest dollar)? a. $179,400 b. $184,000 c. $218,400 d. $224,000Soon after December 31, 2019, the auditor requested a depreciation schedule for trucks of Jarrett Trucking Company, showing the additions, retirements, depreciation, and other data affecting the income of the company in the 4-year period 2016 to 2019, inclusive. The following data were in the Trucks account as of January 1, 2016: The Accumulated DepreciationTrucks account, previously adjusted to January 1,2016, and duly entered in the ledger, had a balance on that date of 16,460. This amount represented the straight-line depreciation on the four trucks from the respective dates of purchase, based on a 5-year life and no residual value. No debits had been made to this account prior to January 1, 2016. Transactions between January 1,2017, and December 31, 2019, and their record in the ledger were as follows: 1. July 1, 2016: Truck no. 1 was sold for 1,000 cash. The entry was a debit to Cash and a credit to Trucks, 1,000. 2. January 1, 2017: Truck no. 3 was traded for a larger one (no. 5) with a 5-year life. The agreed purchase price was 12,000. Jarrett paid the other company 1,780 cash on the transaction. The entry was a debit to Trucks, 1,780, and a credit to Cash, 1,780. 3. July 1, 2018: Truck no. 4 was damaged in a wreck to such an extent that it was sold as junk for 50 cash. Jarrett received 950 from the insurance company. The entry made by the bookkeeper was a debit to Cash, 1,000, and credits to Miscellaneous Revenue, 50, and Trucks, 950, 4. July 1, 2018: A new truck (no. 6) was acquired for 20,000 cash and debited at that amount to the Trucks account. The truck has a 5-year life. Entries for depreciation had been made at the close of each year as follows: 2016, 8,840; 2017, 5,436; 2018, 4,896; 2019, 4,356. Required: 1. Next Level For each of the 4 years, calculate separately the increase or decrease in earnings arising from the companys errors in determining or entering depreciation or in recording transactions affecting trucks. 2. Prove your work by one compound journal entry as of December 31, 2019; the adjustment of the Trucks account is to reflect the correct balances, assuming that the books have not been closed for 2019.The following information was extracted from the financial records includingthe asset register for Fit Line Gym for the year ended 31 December 2020: Property, plant & equipment:Balances at 1 January 2020 BuildingsR Gym Equip-ment - R Furniture &Fittings - R CostAccumulated depreciation 550 000(27 500) 275 000(140 000) 88 000(23 500) Additional information: 1. Accounting policies with regard to depreciation of property, plant and equipment: 3 1.1 Buildings are depreciated at 2% per year on the fixed instalment method. 1.2 Gym equipment is depreciated at 20% per year using the reducing balancemethod.1.3 Furniture and fittings are depreciated on the fixed instalment method overan estimated useful life of 4 years. 2. The following transactions which are not included in the above balances, tookplace during the financial year ended 31 December 2020: 2.1 Due to increased membership, the owner decided to extend the building andinstall new fixtures and fittings. Extension to the…