Question
Part A (8 marks) When you undertook the preparation of the financial statements for Telfer Company at January 31, 2019, the following data were available:
Part A (8 marks)
When you undertook the preparation of the financial statements for Telfer Company at January 31, 2019, the following data were available:
At Cost At Retail
Inventory, February 1, 2018 70,800 98,500
Markdowns 35,000
Markups 63,000
Markdown cancellations 20,000
Markup cancellations 10,000
Purchases 219,500 294,000
Sales 354,000
Purchases returns and allowances 4,300 5,500
Sales returns and allowances 10,000
Requirement
Compute the ending inventory at cost as of January 31, 2019, using the retail method which approximates lower of cost or net realizable value. Your solution should be in good form with amounts clearly labelled. (8 marks)
Part B (8 marks)
Santana Corporation has 400,000 ordinary shares outstanding throughout 2019. In addition, the corporation has 5,000, 20-year, 7% bonds issued at par in 2017. Each 1,000 bond is convertible into 35 ordinary shares. During the year 2019, the corporation earned 600,000 after deducting all expenses. The tax rate was 30%.
Requirement
Compute the diluted earnings per share for 2019. (8 marks)
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