(a)
Cash basis of accounting
Cash basis of accounting refers to the recognition of financial transactions only when the cash is received or paid.
Accrual basis of accounting:
Accrual basis of accounting refers to recognizing the financial transactions during the period in which the event occurs, even if the cash is not exchanged.
Income statement:
This is the financial statement of a company which shows all the revenues earned and expenses incurred by the company over a period of time.
To prepare: The accrual-basis income statement of Company F.
(b)
Classified
This is the financial statement of a company which shows the grouping of similar assets and liabilities under subheadings.
To prepare: The classified balance sheet statement of company F as at April 30, 2017
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FIN. ACCT.-TOOLS FOR BUS.DEC.MAKING-CODE
- Scrimiger Paints wants to upgrade its machinery and on September 20 takes out a loan from the bank in the amount of $500,000. The terms of the loan are 2.9% annual interest rate and payable in 8 months. Interest is due in equal payments each month. Compute the interest expense due each month. Show the journal entry to recognize the interest payment on October 20, and the entry for payment of the short-term note and final interest payment on May 20. Round to the nearest cent if required.arrow_forwardRahman Company, a manufacturer of steel products, began operations on January 1, 2020. Rahman has a December 31 fiscal year-end and adjusts its accounts annually. Selected transactions related to its Brampton plant are as follows: Jan. 1, 2020 Paid cash for six (6) stamping machines for a total price of $15,300 plus delivery costs of $200 per unit Dec. 31, 2020 Recorded depreciation at year end. Assume that the stamping machines have a 5 year useful life and a residual (salvage) value of 10% of the original cost. Dec. 31, 2021 Recorded depreciation at year end. Jan. 1, 2022 One (1) stamping machine was sold for $1,250. . Dec. 31, 2022 Exchanged one (1) stamping machine for a welding machine. The list price of the welding machine was $8,000 and Rahman received a trade-in allowance for the stamping machine of $2,000 (remainder paid in cash). A new welding machine could be bought (without a trade-in) for $7,500. The fair market value of the stamping machine was $1,000.…arrow_forwardAn analysis of WTI's insurance policies shows that $3,468 of coverage has expired. An inventory count shows that teaching supplies costing $3,006 are available at year-end. Annual depreciation on the equipment is $13,871. Annual depreciation on the professional library is $6,936 On September 1, WTI agreed to do five training courses for a client for $2,600 each. Two courses will start immediately and finish before the end of the year. Three courses will not begin until next year. The client paid $13,000 cash in advance for all five training courses on September 1, and WTI credited Unearned Revenue On October 15, WTI agreed to teach a four-month class (beginning immediately) for an executive with payment due at the end of the class. At December 31, $10,548 of the tuition revenue has been earned by WTI WTI's two employees are paid weekly. As of the end of the year, two days salaries have accrued at the rate of $100 per day for each employee. The balance in the Prepaid Rent account…arrow_forward
- The accounting cycle for Project Paris Limited is from July 1 to June 30. On January 1 2021 Project Paris Limited rented out its old warehouse to Lost and Lost Limited by signing a 12-month agreement worth $2,000,000. The rentee paid the rentor for 12-months agreement in cash. At the start of October 2020, the company signed an agreement to purchase a new factory for $30,000,000. The company paid 80% in cash and the remainder by taking out a 10-year loan. Annual interest expense on the loan is $500,000. Interest will be paid in cash on July 31 each year of the loan period. Annual depreciation on the new factory is $600,000. At the end of the accounting cycle the CFO of Project Paris Limited estimated that the new factory would have increased electricity and water usage from last year by 30%. Utility expenses (that comprised electricity and water) totaled $1,500,000 for the last full year. Required: At the end of the accounting cycle (June 30, 2021) Project Paris Limited would have made…arrow_forwardHawks Storage Inc. rents storage space to students in the Waterloo area. The rentals are for a four or eight month period to correspond with students needs for storage during terms that they are home or on work terms. Hawks Storage Inc. has chosen a October 31 fiscal year end and began operations in 2020. During the year ended October 31, 2020 Hawks storage Inc. received customer rental payments as follows: Rentals for the period May 2020-August 2020 $6080 Rentals for the period May 2020-December 2020 $ 10960 Rentals for the period September 2020-April 2021 $16800 Rentals for the period September 2020-December 2020 $ 9760 Hawks Storage Inc. provided the rental space as scheduled. Calculate the amount of rental revenue for the first fiscal year ended October 31, 2020. Round your answer to the nearest dollar. Your Answer:arrow_forwardThe following transactions occurred during 2021 for the Beehive Honey Corporation: Feb. 1 Borrowed $12,000 from a bank and signed a note. Principal and interest at 10% will be paid on January 31, 2022. Apr. 1 Paid $3,600 to an insurance company for a two-year fire insurance policy. July 17 Purchased supplies costing $2,800 on account. The company records supplies purchased in an asset account. At the year-end on December 31, 2021, supplies costing $1,250 remained on hand. Nov. 1 A customer borrowed $6,000 and signed a note requiring the customer to pay principal and 8% interest on April 30, 2022. Required:1. Record each transaction in general journal form.2. Prepare any necessary adjusting entries at the year-end on December 31, 2021. No adjusting entries were recorded during the year for any item.arrow_forward
- An office supply company that sells and services commercial office copiers was founded in 2020. Record the following transactions from the month of September 2024. Regular entries: Sept. 1 Purchased a new delivery truck for $88,800, paying $36,400 cash and financing the balance using a note payable at 9% per annum. The note payable is due in 12 months, and interest on the note must be paid on the first day of every month, beginning on October 1, 2024. The truck has a useful life of six years and a residual value of $8,880. Sept 1 Paid $2,664 for an insurance policy on the new truck for the period September 1, 2024, to August 31, 2025. Sept 5 Purchased inventory on credit at a cost of $14,430. Sept 12 A local University, one of the company’s largest customers, signed a photocopy service contract. The contract runs from October 1, 2024, to September 30, 2025, and will mean that the company services all of the university’s photocopiers. InIn accordance with the contract terms, the…arrow_forwardSince 1970, Super Rise, Inc., has provided maintenance services for elevators. On January 1, 2018, Super Riseobtains a contract to maintain an elevator in a 90-story building in New York City for 10 months and receives afixed payment of $80,000. The contract specifies that Super Rise will receive an additional $40,000 at the end ofthe 10 months if there is no unexpected delay, stoppage, or accident during the year. Super Rise estimates variable consideration to be the most likely amount it will receive.Required:1. Assume that, because the building sees a constant flux of people throughout the day, Super Rise is allowed toaccess the elevators and related mechanical equipment only between 3am and 5am on any given day, which is insufficient to perform some of the more time-consuming repair work. As a result, Super Rise believes thatunexpected delays are likely and that it will not earn the bonus. Prepare the journal entry Super Rise wouldrecord on January 1arrow_forwardHere is an information regarding the relevant PDC company policies • The building rent is fixed at a monthly rate of $ 4,600. In the period January - June 2019 PDC The company decided not to buy trucks (fixed assets) anymore. Loan interest 1.5% per month applies. Payment of loan installments and interest is made at the end month. Depreciation expense is $ 1,150 per month. The minimum cash balance $23.000. Insurance expense per month is $ 460. PDC Company prepaid insurance, the balance is deducted automatically per month for $ 460. After the insurance balance is prepaid the value is 0, the new PDC company will make insurance repayments for 1 year. For the sake of simplicity of calculation, hence tax calculations are not included in this case study. Based on the information above and some additional information below, do it following instructions: a. Prepare the cash budget from January - June 2019.arrow_forward
- Prepare journal entries to record the following transactions. You are required to show all calculations: the financial year-end of the client is 30 November 2021. 3.1 The company adopted the straight-line depreciation method. Record the 15% depreciation on the plant and equipment purchased On 1 December 2020 for R125 000. 3.2 The allowance for credit losses account has an opening balance of R4 500. The policy requires the allowance to equate 8% of the total accounts receivable. The debtors sub-ledger totaled R52 000 prior receiving 40c in the rand on an account of R3 000. The financial manager instructed the write off on the balance WITH GENERAL LEDGER ENTERIES: Please dont provide answer in image format thnkuarrow_forwardMurphy Company purchased a new machine for $120,000 on December 31, 2020. They obtained a loan at the bank to finance the purchase. The terms of the loan were: 5 years, 5% interest, annual payments of principal and interest on December 31 of each year. a. Using the table provided, calculate the annual payment on the loan. b. Record the purchase of the new machine on December 31, 2020. c. Record the loan payment on December 31, 2021. d. Record the loan payment on December 31, 2022. d. Calculate the loan balance for December 31, 2022 after the payment. a. Using the table below, calculate the annual payment on the loan.…arrow_forwardOn January 1 of this year, a company pays $165,000 cash to modernize its store with new flooring, internet wiring, and wall fixtures. These improvements are estimated to yield benefits for 10 years. The company leases (does not own) its store and has 8 years remaining on the lease. 1. & 2. Prepare the entry to record its cash payment for the leasehold improvements and the December 31 year-end entry to amortize the leasehold improvements. View transaction list Journal entry worksheet 1 2 Record the cost of modernization of the store for $165,000 cash. Note: Enter debits before credits. Date January 01 General Journal Debit Credit >arrow_forward
- Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College