2. Below is a table that contains two important calculations that link together to determine net income/Closs): Inventory, opening balance Plus: Purchases Total goods available for sale Less: ending inventory Cost of goods sold $10,000 30,000 ? 15,000 ? $53,000 ? 212,000 ? 132,500 ? 1,685,400 2,247,200 842,700 ? $168,540 $50,562 ? ? ? 657306 556,180 100,000 ? ? Sales Less: Cost of goods sold Gross profit Less: Operating expenses Net income/(loss) Gross profit/sales % ? ? 30,000 12,000 ? ? 240,000 1,600,000 900,000 ? ? ? ? ? 276,400 ? 275,000 ? 43,900 ? 26,400 ? ? ? ? ? 142,694 ? (2,306) ? Instructions Calculate the missing account balances using the relationships between these accounts. Round percentages to two decimal places. 3. Partial income statements of Luxury Meadows Spa Products Inc. are reproduced below: Sales Cost of Goods Sola Gross Profit 2019 $30,000 $20.000 $10,000 2020 $40,000 $23.000 $17,000 2021 $50,000 $25.000 $25,000 Instructions a. Calculate the impact of the two errors listed below on the gross profit calculated for the three years: i. The 2019 ending inventory was understated by $2,000 ii. The 2021 ending inventory was overstated by $5,000 b. What is the impact of these errors on Total Assets? 4. The following is known about BYX Company's Inventory: March 1 Opening Balance # of units Cost Price March 7 Purchase 35 $47 25 $56 March 10 Sale 53 $125 March 18 Purchase 49 $63 March 23 Purchase 44 $68 March 31 Sale 76 $125 The company uses the Weighted Average Method of tracking inventory. Required: Based on the information above: a. Compute the Sales, COGS and Gross Profit. b. Record the journal entry for the March 10 transaction. Round all decimals to TWO decimal places. 6. On July 1, 2017, the CD Bank lent $40,000 to Antonio Limited. The 18-month loan bears interest at 6%. Prepare the journal entries to record each of the following on the CD Bank's books: (a) The issue of the bank loan on July 1, 2017 (b) The accrual of interest at the CD Bank's year end, December 31, 2017 and 2018, assuming adjusting entries are recorded annually and interest is collected at maturity (c) Collection of the interest and the loan on January 1, 2019 8. As part of its December 31, 2021 year end procedures, Genuine Manufacturing Inc. is evaluating its assets for impairment. It has recorded no impairment losses for the previous years. The following is the Property, Plant, and Equipment schedule showing adjusted balances as at December 31, 2021. Date of Asset Depreciation Estimated Estimated Accumulated Recoverable Cost purchase method residual useful life depreciation amount Land Sep. 1/2020 NA $100,000 N/A NA $115.000 Building Dec. 1/2020 Straight-line $800,000 $250,000 $34.667 $870,000 Machinery Dec. 1/2020 Straight-line $150.000 $400,000 $27.083 $350,000 NA 20 years 10 years Instructions: a. Record any impairment losses at December 31, 2021. b. Record depreciation expense for the year ended December 31, 2022 assuming no changes in the estimated residual values or estimated useful lives of the assets." 10. On April 14, 2021, Darsh Co. sold $105,000 of audio equipment on account that had a cost of $82,000. All of Darsh's sales are covered by an unconditional 24-month replacement warranty. Historical data indicates that warranty costs average 2% of the cost of sales. On April 27, 2021, Darsh replaced audio equipment with a cost of $2,000 that was covered by warranty. Instructions a. Prepare the journal entry to record the estimated warranty liability for April. b. Prepare the entry to record the warranty expense incurred in April. c. Assuming the Estimated Warranty Liability account had a credit balance of $740 on April 1, 2021, calculate the balance at April 30, 2021 after the entries above were posted. 12. Tuggy Ltd. was authorized to issue 10,000 $2.00 preferred shares and unlimited common shares. December 31 is Tuggy's year end. During 2019, its first year of operations, the following selected transactions occurred: January 21: Issued 32,000 common shares to the corporation's organizers in exchange for services to get the company operational . Their efforts are estimated to be worth $15,000. February 19: 15,000 common shares were issued for cash of $6 per share. March 11: 4,500 preferred shares were issued for cash totaling $90,000. April 5: 60,000 common shares were issued in exchange for land and building with appraised values of $300,000 and $120,000 respectively. May 8: 3,500 of the preferred shares were issued for a cash price of $18.00 per shares. May 22: Declared and paid dividends to the shareholders of record on May 15. Total cash paid was $50,000. June 20:16,000 of the common shares were issued for a cash total of $112,000. July 13: 2,000 preferred shares and 20,000 common shares were issued for a cash price of $17.50 and $7.50 respectively. December 31: The company closed all its temporary accounts. The Income Summary account showed a debit balance of $25,000. Instructions a. Prepare journal entries for each item above during Tuggy's first year of operations. b. Prepare the equity section of the balance sheet in good form for the year ended December 31, 2019. 11. The equity section of Whistle Steel Industries Inc.'s balance sheet at December 31, 2021 is shown below: $300 Share Capital Preferred Shares, Cumulative Authorized - 500 shares Issued and outstanding - 300 shares Common Shares Authorized - 100 shares Issued and outstanding - 20 shares Total Contributed Capital Retained Earnings Total Equity 500 $800 192 $992 re were $30 of dividends in arrears on the preferred shares at December 31, 2021. Instructions a. Calculate the December 31, 2021 book value per share of i. The preferred shares ii. The common shares b. Assume the common shares were split 2-to-1 on January 3, 2022 and that there was no change in any other account at that time. Calculate the new book value of common shares immediately following the share split. 12. Tuggy Ltd. was authorized to issue 10,000 $2.00 preferred shares and unlimited Ion charas December 21 is Tugay's year end. During 2019. its first year of homme