Question #1. The comparative balance sheets of Sloan Company reveal that the accounts receivable (before deducting allowances) increased by $25,040 in 2013. During the same time period, the allowances for uncollectible accounts increased by $3,200. If Sloan wrote off $420 in 2013 and bad debts expense was 1.6% of sales, how much cash was collected from customers during the year? Show all your work.

Question #2. Peugeot spent 3,775,000 or research and development for a new transmission on its newest models. 1,200,000 was research expenses, and the rest was development costs, with 60% of that being incurred after technological feasibility was reached in August 1. Peugeots fiscal year begins on February 1. Assume that the new transmission has an economic life of 8 years, at which time it will be replaced by a newer transmission. Give me the journal entries for the 1st and 2nd year for this transmission R&D under IFRS. Show your work.

Question #3. Monkey Business, an import business, builds special-order yachts. They decide to build one for a customer for at a cost $2,500,000. It will take 2 years (they start building in June 1, 2007) to build with total costs of $1,900,000: costs of $320,000 in 2007; $1,200,000 in 2008; and the remainder in 2009 (assume they stick to budget). The customer puts a deposit down of $500,000 and pays the remainder in 4 installments, each due every 6 months. For each year (2007, 2008, and 2009) compute the revenue expense, and gross profits reported for this construction project. Assume they do not have a written contract but based on this customer having purchased several yachts in the past, they believe he will pay for the boat in a timely manner. Show all your work.

Question #4. SAS Computers owns a patent on a computer processor. The processor was developed and capitalized at a cost of 2,100,000 in the beginning of 2015. It was expected to be economically useful for 7 years and have no residual value. At the beginning of 2018, a new processor was developed, making the old processor worth 900,000 (independent appraiser) with 200,000 total cost to sell. The present value of the processors future cash flows, given the development of the newer processor, is estimated to be 870,000. At this point, it is expected to have a useful life of 4 years with no residual value. Is the processor impaired in 2018? If it is impaired, prepare the to record the loss. Also prepare the journal entry for amortization in 2018. Show your work.

Question #5. Paris Cosmetics wishes to secure a reliable source of a key component in its eyeshadows and its management is considering two alternative investments. Melonine produces 3 times the supply Paris Cosmetics needs but the only way to guarantee the supply it needs is to purchase the entire ordinary shares of Melonine. They can sell the rest to other manufacturers. JeanPaul produces twice as much of the component that Paris Cosmetics needs and Paris Cosmetics would only have to buy 40% of JeanPaul ordinary shares to insure it could buy 50% of JeanPauls output. The table that follows gives the balance sheet information for all 3 companies, prior to the investment by Paris Cosmetics. For the questions below, assume Paris Cosmetics would be able to buy Melonines shares at 830,000 and JeanPaul at $240,000. Melonines plant assets were appraised at 200,000, with all of its remaining assets and liabilities being appraised at values approximating their book values. Produce consolidated balance sheet for Paris Cosmetics immediately after the acquisition of Melonine and JeanPaul (use the equity method).

	Paris Cosmetics	Melonine	JeanPaul
Plant Assets	400,000	150,000	50,000
Other Non-cash Assets	1,750,000	980,000	600,000
Investment
Cash	2,000,000	200,000	100,000
Shareholders' Equity	2,950,000	730,000	600,000
Liabilities	1,200,000	600,000	150,000

Purchase of Melonine

Paris Cosmetics Before:

Paris Cosmetics After:

Malonine:

Consolidating Entries:

Paris Cosmetics Consolidated:

Purchase JeanPaul

Paris Cosmetics Before:

Paris Cosmetics After:

JeanPaul:

Question #6. On January 1, 2015, Paris Cosmetics buys a shop in London for 350,000. They only intend on owning it 5 years because they hope to move to a larger building which is currently being designed and built. They believe the shop they currently own will be worth 250,000 in 5 years. Every year, they reappraise the building. The building is determined to be worth 310,000 on Jan.1, 2016, 305,000 on Jan. 1, 2017, 300,000 on Jan. 1, 2018, 270,000 on Jan. 1, 2019, and is sold for 250,000 on Jan. 1, 2020. The estimates of the residual value and useful life have never changed over the life of the building. Show the effects of the building on both the balance sheet and income statement using the Reevaluation. Method Model.

Statement of Financial Position

	2015	2016	2017	2018	2019
PPE
Accumulated Depreciation
Net PPE
Revaluation Surplus
Retained Earnings

Net Income

	2015	2016	2017	2018	2019
Depreciation Expense
Gain (Loss) on Fair Value
Net Income
OCI
Comprehensive Income

Overall Effects

Depreciation Expense:

Gain (Loss):

Net Income:

OCI:

Comprehensive Income: