Problem 3 (25 Points) - LO1 A comparative statement of financial position as at 31 December 2020 and 2021 for Fruit Corporation is shown below: ASSETS Dec 31, 2021 Jan 1, 2021 Increase/Decrease Cash $ 67,500 24,500 Account Receivable 136,500 132,000 Equipment 58,500 33,000 Less: Accumulated Depreciation (25,500) (16,500) Total 237,000 173,000 LIABILITIES AND STOCKHOLDER EQUITY Account Payable $ 30,000 22,500 Common Stock 150,000 120,000 Retained Earnings 57,000 30,500 Total 237,000 173,000 Note: Net income $ 66,000 was reported, and dividend of $39,500 were paid in 2021. New equipment was purchased, and none was sold. Required: Prepare cash flow using the indirect method and explain the result! Problem 2 (25 points) - LO1 As a trainee accountant, you have been asked to determine the monetary value that should be assigned to the inventory of sporting equipment on hand as at the end of the financial year for Outdoors Adventures Ltd. You are currently looking at the inventory level of a training shoe that is very popular. The number of pairs of shoes on hand at the start of the accounting period was 400 and these had a monetary value $ 40,000 assigned in them. During the year, a further 2,500 pairs of the training shoe were purchased and, at the end of the year, stock take revealed that there were 150 pairs unsold. The purchases were made throughout the year. Five hundred pairs of shoes were purchased at a unit price of $ 112, a further 900 pairs of shoes at a unit price of $ 130, a further 300 pairs at a price $ 122. and a further 800 pairs at a price $ 128. 1000 units sold on first sales to be sold at $ 150 per unit, second sales on 1,000 units at $ 160 per unit and third sales on 750 units at $ 170 per unit. Note: The inventory system was used periodical method. Required: a. Determine the cost assigned to the inventory of training shoes using [1] FIFO and [2] Average Method and give your explanation! (10 points) b. Calculate gross profit of the sales of training shoes and give your explanation! (10 points) c. Based on answer above, analyze which method you should choose between FIFO or Average Method, why? give your answer! (5 points) Problem 1 (25 Points) - LO1 Michael Jackson, owners of Benefit Tennis Coaching [BTC], commenced business in February 2022 and the following transactions occurred in March 2022. March Explanation Received Payment from Tennis New South Wales for BTC invoice dated February 3 for $ 6,000 4 Received coaching fees in advance for two months $ 3,000 from the group tennis The business banked $ 11,200 cash from coaching fees Michael withdraw $ 2,000 for personal use 7 10 14 Paid invoice for $ 2,800 received from Office 4 us for office filling cabinet purchased last month 15 Paid a staff $ 5,000 for performing coaching services at indoor tennis club 19 Paid a bill of office electricity used for during the month $ 500 in cash 22 Received $ 7,600 from Smith for services invoiced last month Purchased coaching equipment for $ 97,600 Paid this month's rent $ 2,000 25 31 Required: a. Analyze the increase and decrease that impacts to the accounting equation [Assets, Liability, Equity, Revenues, Expenses, and Drawings] for all transactions above and give your explanation! (10 points) b. Prepare the journal entries for all transactions above and give your explanation! (15 points) Problem 3 (25 Points) - LO1 A comparative statement of financial position as at 31 December 2020 and 2021 for Fruit Corporation is shown below: ASSETS Dec 31, 2021 Jan 1, 2021 Increase/Decrease Cash $ 67,500 24,500 Account Receivable 136,500 132,000 Equipment 58,500 33,000 Less: Accumulated Depreciation (25,500) (16,500) Total 237,000 173,000 LIABILITIES AND STOCKHOLDER EQUITY Account Payable $ 30,000 22,500 Common Stock 150,000 120,000 Retained Earnings 57,000 30,500 Total 237,000 173,000 Note: Net income $ 66,000 was reported, and dividend of $39,500 were paid in 2021. New equipment was purchased, and none was sold. Required: Prepare cash flow using the indirect method and explain the result! Problem 2 (25 points) - LO1 As a trainee accountant, you have been asked to determine the monetary value that should be assigned to the inventory of sporting equipment on hand as at the end of the financial year for Outdoors Adventures Ltd. You are currently looking at the inventory level of a training shoe that is very popular. The number of pairs of shoes on hand at the start of the accounting period was 400 and these had a monetary value $ 40,000 assigned in them. During the year, a further 2,500 pairs of the training shoe were purchased and, at the end of the year, stock take revealed that there were 150 pairs unsold. The purchases were made throughout the year. Five hundred pairs of shoes were purchased at a unit price of $ 112, a further 900 pairs of shoes at a unit price of $ 130, a further 300 pairs at a price $ 122. and a further 800 pairs at a price $ 128. 1000 units sold on first sales to be sold at $ 150 per unit, second sales on 1,000 units at $ 160 per unit and third sales on 750 units at $ 170 per unit. Note: The inventory system was used periodical method. Required: a. Determine the cost assigned to the inventory of training shoes using [1] FIFO and [2] Average Method and give your explanation! (10 points) b. Calculate gross profit of the sales of training shoes and give your explanation! (10 points) c. Based on answer above, analyze which method you should choose between FIFO or Average Method, why? give your answer! (5 points) Problem 1 (25 Points) - LO1 Michael Jackson, owners of Benefit Tennis Coaching [BTC], commenced business in February 2022 and the following transactions occurred in March 2022. March Explanation Received Payment from Tennis New South Wales for BTC invoice dated February 3 for $ 6,000 4 Received coaching fees in advance for two months $ 3,000 from the group tennis The business banked $ 11,200 cash from coaching fees Michael withdraw $ 2,000 for personal use 7 10 14 Paid invoice for $ 2,800 received from Office 4 us for office filling cabinet purchased last month 15 Paid a staff $ 5,000 for performing coaching services at indoor tennis club 19 Paid a bill of office electricity used for during the month $ 500 in cash 22 Received $ 7,600 from Smith for services invoiced last month Purchased coaching equipment for $ 97,600 Paid this month's rent $ 2,000 25 31 Required: a. Analyze the increase and decrease that impacts to the accounting equation [Assets, Liability, Equity, Revenues, Expenses, and Drawings] for all transactions above and give your explanation! (10 points) b. Prepare the journal entries for all transactions above and give your explanation! (15 points) Problem 3 (25 Points) - LO1 A comparative statement of financial position as at 31 December 2020 and 2021 for Fruit Corporation is shown below: ASSETS Dec 31, 2021 Jan 1, 2021 Increase/Decrease Cash $ 67,500 24,500 Account Receivable 136,500 132,000 Equipment 58,500 33,000 Less: Accumulated Depreciation (25,500) (16,500) Total 237,000 173,000 LIABILITIES AND STOCKHOLDER EQUITY Account Payable $ 30,000 22,500 Common Stock 150,000 120,000 Retained Earnings 57,000 30,500 Total 237,000 173,000 Note: Net income $ 66,000 was reported, and dividend of $39,500 were paid in 2021. New equipment was purchased, and none was sold. Required: Prepare cash flow using the indirect method and explain the result! Problem 2 (25 points) - LO1 As a trainee accountant, you have been asked to determine the monetary value that should be assigned to the inventory of sporting equipment on hand as at the end of the financial year for Outdoors Adventures Ltd. You are currently looking at the inventory level of a training shoe that is very popular. The number of pairs of shoes on hand at the start of the accounting period was 400 and these had a monetary value $ 40,000 assigned in them. During the year, a further 2,500 pairs of the training shoe were purchased and, at the end of the year, stock take revealed that there were 150 pairs unsold. The purchases were made throughout the year. Five hundred pairs of shoes were purchased at a unit price of $ 112, a further 900 pairs of shoes at a unit price of $ 130, a further 300 pairs at a price $ 122. and a further 800 pairs at a price $ 128. 1000 units sold on first sales to be sold at $ 150 per unit, second sales on 1,000 units at $ 160 per unit and third sales on 750 units at $ 170 per unit. Note: The inventory system was used periodical method. Required: a. Determine the cost assigned to the inventory of training shoes using [1] FIFO and [2] Average Method and give your explanation! (10 points) b. Calculate gross profit of the sales of training shoes and give your explanation! (10 points) c. Based on answer above, analyze which method you should choose between FIFO or Average Method, why? give your answer! (5 points) Problem 1 (25 Points) - LO1 Michael Jackson, owners of Benefit Tennis Coaching [BTC], commenced business in February 2022 and the following transactions occurred in March 2022. March Explanation Received Payment from Tennis New South Wales for BTC invoice dated February 3 for $ 6,000 4 Received coaching fees in advance for two months $ 3,000 from the group tennis The business banked $ 11,200 cash from coaching fees Michael withdraw $ 2,000 for personal use 7 10 14 Paid invoice for $ 2,800 received from Office 4 us for office filling cabinet purchased last month 15 Paid a staff $ 5,000 for performing coaching services at indoor tennis club 19 Paid a bill of office electricity used for during the month $ 500 in cash 22 Received $ 7,600 from Smith for services invoiced last month Purchased coaching equipment for $ 97,600 Paid this month's rent $ 2,000 25 31 Required: a. Analyze the increase and decrease that impacts to the accounting equation [Assets, Liability, Equity, Revenues, Expenses, and Drawings] for all transactions above and give your explanation! (10 points) b. Prepare the journal entries for all transactions above and give your explanation! (15 points) Problem 3 (25 Points) - LO1 A comparative statement of financial position as at 31 December 2020 and 2021 for Fruit Corporation is shown below: ASSETS Dec 31, 2021 Jan 1, 2021 Increase/Decrease Cash $ 67,500 24,500 Account Receivable 136,500 132,000 Equipment 58,500 33,000 Less: Accumulated Depreciation (25,500) (16,500) Total 237,000 173,000 LIABILITIES AND STOCKHOLDER EQUITY Account Payable $ 30,000 22,500 Common Stock 150,000 120,000 Retained Earnings 57,000 30,500 Total 237,000 173,000 Note: Net income $ 66,000 was reported, and dividend of $39,500 were paid in 2021. New equipment was purchased, and none was sold. Required: Prepare cash flow using the indirect method and explain the result! Problem 2 (25 points) - LO1 As a trainee accountant, you have been asked to determine the monetary value that should be assigned to the inventory of sporting equipment on hand as at the end of the financial year for Outdoors Adventures Ltd. You are currently looking at the inventory level of a training shoe that is very popular. The number of pairs of shoes on hand at the start of the accounting period was 400 and these had a monetary value $ 40,000 assigned in them. During the year, a further 2,500 pairs of the training shoe were purchased and, at the end of the year, stock take revealed that there were 150 pairs unsold. The purchases were made throughout the year. Five hundred pairs of shoes were purchased at a unit price of $ 112, a further 900 pairs of shoes at a unit price of $ 130, a further 300 pairs at a price $ 122. and a further 800 pairs at a price $ 128. 1000 units sold on first sales to be sold at $ 150 per unit, second sales on 1,000 units at $ 160 per unit and third sales on 750 units at $ 170 per unit. Note: The inventory system was used periodical method. Required: a. Determine the cost assigned to the inventory of training shoes using [1] FIFO and [2] Average Method and give your explanation! (10 points) b. Calculate gross profit of the sales of training shoes and give your explanation! (10 points) c. Based on answer above, analyze which method you should choose between FIFO or Average Method, why? give your answer! (5 points) Problem 1 (25 Points) - LO1 Michael Jackson, owners of Benefit Tennis Coaching [BTC], commenced business in February 2022 and the following transactions occurred in March 2022. March Explanation Received Payment from Tennis New South Wales for BTC invoice dated February 3 for $ 6,000 4 Received coaching fees in advance for two months $ 3,000 from the group tennis The business banked $ 11,200 cash from coaching fees Michael withdraw $ 2,000 for personal use 7 10 14 Paid invoice for $ 2,800 received from Office 4 us for office filling cabinet purchased last month 15 Paid a staff $ 5,000 for performing coaching services at indoor tennis club 19 Paid a bill of office electricity used for during the month $ 500 in cash 22 Received $ 7,600 from Smith for services invoiced last month Purchased coaching equipment for $ 97,600 Paid this month's rent $ 2,000 25 31 Required: a. Analyze the increase and decrease that impacts to the accounting equation [Assets, Liability, Equity, Revenues, Expenses, and Drawings] for all transactions above and give your explanation! (10 points) b. Prepare the journal entries for all transactions above and give your explanation! (15 points)