Question 1.A. First determine the unit cost.

Cost of Goods Sold under FIFO

B. Goss Profit under FIFO inventory system is 2,350,000

• Under FIFO, the units purchased earlier are sold earlier and hence the unit cost of earlier units comes under Cost of Goods Sold.
• Whereas under Weighted Average Inventory Method, unit cost is determined to the weighted average of units and cost per unit. So, the price of all the units whether purchased earlier or later stages comes into Cost of Goods Sold.
• As Cost of Goods Sold vary under both the methods, so also the Gross Profit varies.

As Cost of Goods Sold under FIFO is lower compared to Weighted Average Cost Method, Gross Profit under FIFO is HIGHER compared to Weighted Average Cost Method.

Question 2

A perpetual inventory system is a method of inventory management that records real-time transactions of received or sold stock through the use of technology generally considered a more efficient method than a periodic inventory system.

Benefits of perpetual inventory systems is:

• Immediate detection of theft and leakages etc., with the help of a properly planned system of perpetual inventory control, wastages, leakages and thefts of materials are at once brought to light and causes for such discrepancies can be known without delay.

Question 3.A.

In the case of FOB Destination sale, the buyer is entitled to the ownership of the goods until the goods is reached to the buyers place. That means in FOB Destination sale the buyer of goods will record the purchase when the goods are delivered to his place. In the given case, HEMI ordered 25 transmission for a total cost is $ 15,000,000 on 21^stDecember and the goods are shipped on December 27^th. At the year end the goods did not delivered to HEMI. So, HEMI has not the title of goods cause within the year end it did not receive the goods.

So, no adjustments are required for these goods.

B. The adjustment entry:

Capital Assets

Question 1.A.

B. Recommendation on building improvement cost The major improvement cost which is made at the time of purchase shall be capitalized as management was aware of need of improvement.

C. Depreciation method:

Land is not depreciable asset because it is considered to have an infinite useful life, hence no depreciation changed.

Building is depreciable asset because it is not going to last forever. There are many depreciation methods followed, for instance, straight-line method, double decline method, etc.

The life of building is expected 20 years as per this question. The most suitable method for building is straight-line method as building is generally used in same way throughout the life.

Question 2

As it is given that equipment is to crate its inventory for shipping, the appropriate method for depreciating this equipment will be the units-of-production method.

Question 3

As per the question, $ 3,000,000, of advertising and promotion costs were spent to build customer loyalty. So, advertising expense should have been debited while recording this transaction of goodwill account. Therefore, it should be rectified by crediting the goodwill account which was initially incorrectly debited. Corresponding debit shall be given to advertising expense account which is the right account to be debited for recording this transaction.

Current and Long-term Liabilities

Question 1

Question 8. A.

B. With respect to total principal reduction in the 2019 fiscal, mortgage loan payable account shall be debited, and interest expense account shall be credited by $ 4,053,121.

C. No entry is required for reclassifying long-term debt into current portion of long-term debt because it is just a re-classification on firms balance sheet only. Total mortgage loan payable balance will continue as same figure but reported by splitting the same into current portion and long-term portion on firms balance sheet as of December 31, 2019.

Question 3

Contingent liabilities are divided into 3 categories:

High probability contingency is a liability that is both likely to occur and likely to be reasonably estimated.

Medium probability contingency is one that falls short of either but not both of the parameters of a high probability liability.

Low probability contingency is where the chances of these liabilities actually becoming material are very low.

For the given case, company has been named as a defendant in lawsuit, but the lawyers were of opinion that the lawsuit was without merit. Company will not be able to predict the outcomes of the lawsuit. Therefore, the situation can be treated as a medium probability contingency.

Shareholders Equity

Question 1

Stock dividend adjusting journal entry:

I have got all the questions answer from Chegg but I need help will the trial balance...

this is the excel file I was given to do the trial balance and it is built with formulas so I I add or change number the other number will change based on that so please help... here is the excel sheet picture... HELP

the excel file picture

UL x=C8-D8+E8 Fertigo G H Adjustments Debit Charlie Debit balance $ 3,000,000 31.000.000 2,000,000 164,000,000 280,000,000 10,000,000 3.000.000 56,000,000 40.000 904 1.100.000 9,000,000 1 Heavy Equipenent and Machinery Inc. 2 Trial Balance 3 At December 31, 2019 4 Unadjusted The Balance S Debit balances Credit balances 6 Cash and short-term investments $ 3,000,000 7 Accounts receivable 31,000,000 3 Allowance for doubtful accounts 2.000.000 9 Inventory 164,000,000 10 Land 280,000,000 11 Building 12 Accumulated depreciation building 13 Equipment 10.000.000 14 Accumulated depreciation equipment 15 Goodwill 3,000,000 16 Accounts payable 56,000,000 17 Wages payable 40,000,904 18 Interest payable 19 Unearned revenue 8,200,000 20 Dividends payable 9,000,000 21 Current portion of mortgage payable 22 Lawsuit liability 40,000,000 23 Mortgage payable 150,000,000 24 Preferred shares 20,000,000 25 Common shares 150,000,000 26 Retained earnings 27 Cash Dividends declared. Preferred Shares 1,000,000 28 Cash Dividends declared - Common Shares 9,000,000 29 Stock Dividends declared-Common Shares 30 Sales revenue 743,931,000 31 Cost of goods sold 560,000,000 32 Wages expense 65,000,000 33 Advertising and promotion expense 2,000,000 34 Insurance pense 3,000,000 35 Repairs and maintenance expenses 5,000,000 36 Depreciation expense 37 Utilities expense 6,000,000 38 Bad debts expense 5,000,000 39 Bank charges experise 1,000,000 40 Damages from lawsuits expense 40,000,000 41 Interest expense 6,131,904 42 income tax expense 25,000,000 5 1.219,131,1041219.131,504 43 44 Trial Balance Statement of income 10,000,000 150.000.000 20,000,000 130.000 1,000,000 9.000.000 743.931,000 560.000.000 65,000,000 2.000.000 1,000,000 5.000.000 5.000.000 3.000.000 1,000,000 40,000,000 111,904 25.000.000 5 1.219.13.00 $ 121 131,004 Home Insert Draw Page Layout 12. Balance and Statement of income Formulas Data Review View Ted me Calibr (Body - A A Pet P. Genera A Merge Center HS $% Conditional Format Formiga Tatile Styles El Format Pa Hand Machinery Forwarded December 31, 2015 Www Corporation Ford 1.2018 Com G 1903 Cart of Gold Sign 10 $143931.000 560.000.000 101.000 127.000 390 5.11.000 4,111004 09.06 000 000 5 25.09 Carretores Finance become $ 1.597.000 1200.350.000 272.359,000 2017 SR62.000 35.000 3.000 13.375.000 7525.000 1.000 125 134 25.000 11 DOO 2,000 . 11 33 30 Harico To State of income UL x=C8-D8+E8 Fertigo G H Adjustments Debit Charlie Debit balance $ 3,000,000 31.000.000 2,000,000 164,000,000 280,000,000 10,000,000 3.000.000 56,000,000 40.000 904 1.100.000 9,000,000 1 Heavy Equipenent and Machinery Inc. 2 Trial Balance 3 At December 31, 2019 4 Unadjusted The Balance S Debit balances Credit balances 6 Cash and short-term investments $ 3,000,000 7 Accounts receivable 31,000,000 3 Allowance for doubtful accounts 2.000.000 9 Inventory 164,000,000 10 Land 280,000,000 11 Building 12 Accumulated depreciation building 13 Equipment 10.000.000 14 Accumulated depreciation equipment 15 Goodwill 3,000,000 16 Accounts payable 56,000,000 17 Wages payable 40,000,904 18 Interest payable 19 Unearned revenue 8,200,000 20 Dividends payable 9,000,000 21 Current portion of mortgage payable 22 Lawsuit liability 40,000,000 23 Mortgage payable 150,000,000 24 Preferred shares 20,000,000 25 Common shares 150,000,000 26 Retained earnings 27 Cash Dividends declared. Preferred Shares 1,000,000 28 Cash Dividends declared - Common Shares 9,000,000 29 Stock Dividends declared-Common Shares 30 Sales revenue 743,931,000 31 Cost of goods sold 560,000,000 32 Wages expense 65,000,000 33 Advertising and promotion expense 2,000,000 34 Insurance pense 3,000,000 35 Repairs and maintenance expenses 5,000,000 36 Depreciation expense 37 Utilities expense 6,000,000 38 Bad debts expense 5,000,000 39 Bank charges experise 1,000,000 40 Damages from lawsuits expense 40,000,000 41 Interest expense 6,131,904 42 income tax expense 25,000,000 5 1.219,131,1041219.131,504 43 44 Trial Balance Statement of income 10,000,000 150.000.000 20,000,000 130.000 1,000,000 9.000.000 743.931,000 560.000.000 65,000,000 2.000.000 1,000,000 5.000.000 5.000.000 3.000.000 1,000,000 40,000,000 111,904 25.000.000 5 1.219.13.00 $ 121 131,004 Home Insert Draw Page Layout 12. Balance and Statement of income Formulas Data Review View Ted me Calibr (Body - A A Pet P. Genera A Merge Center HS $% Conditional Format Formiga Tatile Styles El Format Pa Hand Machinery Forwarded December 31, 2015 Www Corporation Ford 1.2018 Com G 1903 Cart of Gold Sign 10 $143931.000 560.000.000 101.000 127.000 390 5.11.000 4,111004 09.06 000 000 5 25.09 Carretores Finance become $ 1.597.000 1200.350.000 272.359,000 2017 SR62.000 35.000 3.000 13.375.000 7525.000 1.000 125 134 25.000 11 DOO 2,000 . 11 33 30 Harico To State of income