a. Barbart Retail Sales Co. sells merchandise inventory at a gross profit of 30% of the sales price. On June 4, 20x0, a flood destroyed the entire inventory. From the accounting records, it was determined that beginning inventory was $187,000 and purchases during the year before the flood totaled $613,000. Sales for the year before the flood were $895,000. What would be the estimated cost of the inventory destroyed? (3 marks) b. Purchases of inventory for the month of June for the Morris Company were as follows: June 1 Opening 400 @ 3.20 balance 1,280 June 3 Purchase 1 1,100 @ 3,410 3.10 June 7 Purchase 2 600 @ 3.30 1,980 June Purchase 3 900 @ 3.40 3,060 15 Purchase 4 250 @ 3.50 875 June 22 $10,605 The ending Inventory Balance = 600 units What is the cost of the ending inventory under the following assumptions: Periodic FIFO ii. Periodic Weighted Average (4 marks) i. c. The Couperin Corporation purchased a two year insurance policy on March 31, 20x3 for $3,960. The policy also took effect on March 31. The bookkeeper debited insurance expense for the whole amount. Prepare the adjusting journal entry at December 31, 20x3, December 31, 20x4 and December 31, 20x5 with regards to the above policy. (5 marks) d. On March 15, 20x3, Mayer Company entered into a 4 year project for the total price of $9,000,000. You have the following information for the first two years of the service contract: 20x4 Costs incurred during year Estimated costs to complete 20x3 $1,200,000 6,300,000 $2,700,000 4,100,000 What is the revenue that will be realized on this contract in 20x3 and 20x4? (5 marks) e. During 20x4, an entity purchased the shares of another company for $100,000. At the end of the year, the shares has a fair value of $120,000. Prepare the journal entries for this transaction for the year 20x4 on the assumption that ... 1. The investment is classified as Fair Value through Profit and Loss (FVTPL). 2. The investment is classified as Fair Value through Other Comprehensive Income (FVTOCI). (4 marks) f. On January 1, 20x6, a company had office supplies on hand of $4,200. During 20x6, it purchased additional office supplies for $68,200. At December 31, 20x6 there is $6,400 of office supplies remaining on hand. What is the company's office supplies expense for 20x6? (2 marks) g. On January 1, 20x2, Flax Co. purchased a machine for $528,000 and depreciated it by the straight-line method using an estimated useful life of eight years with no residual value. On January 1, 20x5, Flax determined that the machine had a useful life of six years from the date of acquisition and will have a residual value of $48,000. What would the accumulated depreciation for this machine be at December 31, 20x5? (5 marks) h. The following information pertains to a chequing account of a company at July 31: $40,000 42,900 100 Cash balance per bank statement Cash balance per books (before adjustment) Interest earned for July recorded on bank statement Outstanding cheques Customers' cheques returned for insufficient funds Deposit in transit 3,000 1,000 5,000 h. The following information pertains to a chequing account of a company at July 31: $40,000 42,900 100 Cash balance per bank statement Cash balance per books (before adjustment) Interest earned for July recorded on bank statement Outstanding cheques Customers' cheques returned for insufficient funds Deposit in transit 3,000 1,000 5,000 1. Prepare any adjusting entries required at July 31. Calculate the adjusted cash balance per books. Prepare a bank reconciliation at July 31. (5 marks) 2