1.Balance Sheet & Income Statement

Ibis Hotel initiated operations on July 1, 2019. To manage the company officers and managers have requested monthly financial statements starting July 31, 2019. The adjusted trial balance amounts at July 31 are shown below.

DebitsCredits

Cash$7,680 Accumulated Depreciation-Equipment $ 840

Account Receivable810 Notes Payable 6,000

Prepaid Rent1,965 Account Payable 2,140

Supplies1,160 Salaries and Wages Payable 360

Equipment11,400 Interest Payable 40

Owner's Drawings800 Unearned Service Revenue 580

Salaries and Wages Expense 7,145 Owner's Capital 10,640

Rent Expense2,740 Service Revenue 14,390

Depreciation Expense665 Total Credits $34,990

Supplies Expense580

Interest Expense 45

Total Debits$34,990

(a) Prepare the Income Statement of Ibis Hotel in July 2019!

(b) Prepare the Balance Sheet Statement of Ibis Hotel at July 31, 2019!

Note: please prepare with the correct format

2.Depreciation

Sendit is a distributor company. The company acquired a vehicle on 1 January 2016 at cost of $105,000. It has a useful life of 5 years and its expected residual value is $5,000. The company uses the straight line depreciation method.

Instructions:

(a) Calculate the vehicle annual depreciation!

(b) Calculate the book value (carrying value) of the vehicle on 1 January 2018!

3.Inventory

As of 1 September 2016, TradeO, Inc. had a beginning inventory of 200 units at cost of $9 per unit. During September 2016, the following inventory transactions happened:

6 September: bought 300 units of merchandise, at $10 per unit

27 September: bought 350 units of merchandise, at $11 per unit

29 September: sold 650 units of merchandise at customer price of $25 per unit

Instruction:

(a) Calculate: Cost of Goods Sold, Ending Inventory and Gross Profit using FIFO method!

(b) Calculate: Cost of Goods Sold, Ending Inventory and Gross Profit using average method!

(c) If you are the CFO of the company, which method you will choose? Explain your reasons!

4.Cash flow Statement

Pipo and Lala formed a partnership to sell skin care products made from organic ingredients. They have been operating for one year. The bank balance at the end of the year is $41 000.

A summary of business transactions is as follows:

Sales to customers 256,000

Receipts from customers 199,000

Payments for inventory 103,000

Payments for electricity, telephone, rent and insurance 5,000

Purchase of a motor vehicle 30,000

Drawings 50,000

Payment of interest 8,000

Loan proceeds 20,000

Interest received 1,000

Income taxes paid 3,000

Equity Injection 20,000

(a) make statement of cash flows

(b) Pipo and Lala Company's most recent financial statements showed dismal performance. There was a net loss of $10,000 and the statement of cash flows showed a net cash decrease in all categories. The company president called all the managers together and asked them to do they could to make sure the next quarter's performance was better. As a marketing manager, what would be your advice to Finance manager?

(c) As a marketing manager, which of company financial statements (Balance Sheet, Income, Cash flow) is the most useful? Explain your reasons!