Share Comments AS ABSU. BC0123 Accounting less 100% - Compatibility Mode - Saved to my Mac Home Insert Draw Design Layout References Mailings Review View Oh Calibri (B. - 14 - A A Aa A E. 2. ! || me 4 BI.XX A.2 A FOR Wow property Pr o pecon Understand the differences between Income statement and statement of cash flow Business case (100 points) John Delivery services Ltd. is a company dedicated to the delivery of merchandises purchased online The company started the year 2019 with a total fleet of 5 cars purchased on 1" of January 2018 for a total amount of 100,000 and 3 trucks purchased on 1" of January 2017 for a total amount of 180,0006. All cars have an estimated useful life of 5 years whereas trucks have an estimated useful life of 6 years. All vehicles have a salvage value of 10% of its cost. The depreciation method is the straight line method. At 1" of January 2019 the accountant of the company realized that the useful life of the trucks should be lowered to 5 years in total taking into account the intensive use made of the vehicles. In order to be able to respond to the dramatic increase of job orders from the main clients, the company decides on 1" of March to acquire 10 new trucks for a total amount of 500.000. The trucks will have a useful life of 5 years, and an estimated salvage value of 10%. The accountant of the company decided that regarding these last trucks purchased, the depreciation method should be the 200% declining balance method. To finance this acquisition, the company will issue 50.000 preferred stocks with 10 par value and 11% dividend rate. Calibel (Bo." 14 A A BTW x x A Aar As Eve A EEEE 21 1 At 1" of January 2019, the owner's equity section of the balance sheet of the company was composed as follows: Common stock 100,000 shares of 1 par value common stock - Additional paid in Capital Common stock: 150.000 Retained earnings: CS0.000 The 1" of April 2019, a tornado destroyed part of the company's facilities, causing a total loss of 57.000 On 1" of June 2019, John, a shareholder of the company decided to sale his 10% stake into the company. The company proceeded to the purchase of shares at a price per share of 10, a price 4 Cabove the market price To finance this purchase the company took a 6% loan of 100,000. Interests are payable once a year every 1" of June During year 2019, the remaining expenses of the company were the following Labor costs: 26 drivers with an average salary of 2.100/month. 12 of said drivers where hired on 1" of March 2012 plus 30% social security cames payable the 15 first days following each month 1 Manager with a grossfied salary of 60.000/year plus 30% social security taxes payable the 15 first days following each month, and a bonus of 5% of the net income of the previous year. 3 mechanics with an average salary of 1.850 /month Gasoline expense: C350,000, all paid cash Insurance expense: 20,000 per month payable the first day of every quarter Depreciation expense (facilities): C 42.000 Miscellaneous: 146,000 paid cash During the year 2019 the sales of the company amounted to 1,653,000. Consider that 9% of the company's sales remain unpaid at 31" of December 2019 Income tax is payable each month of February at 25% rate on the net income of the previous year. The company began the year 2019 with a cash balance of 125,000 Net Income of year 2018 was 160,000 Prior to the stockholders meeting, John who owns 40% of the capital of the company comes to ask you about how the different issues commented above may affect the profitability of his investment into the company 1121 words English (United States) Focus ESE MacBook Pro 2 BC0123 Accounting Il Resit 100% - Compatibity Mode Saved to my Mac View Design Layout References 14w A A A A Mailings Review EVERED 21 Aalbot code AMC ABCD AaBb.la 1. Calculate the depreciation expense of the cars and trucks of the company for the year 2019. Explain your answers as well as the differences between the two methods used by the company, and how the new method of depreciation decided by the accountant will affect the net income of the company for the year 2019, and over the total useful life of the assets. (20points) 2. Prepare the journal entries for the acquisition of the treasury stocks. Explain your answer. (10 points) 3. Prepare a detailed income statement of the company showing the earning per share figure for each element of the Income statement. Explain your calculation. (40 points) 4. Prepare a statement of cash flow for each one of the three sections (operating, Investing and financing activities) for the year 2019 using the direct method and calculate the cash balance at 31" of December (30 points) Share Comments AS ABSU. BC0123 Accounting less 100% - Compatibility Mode - Saved to my Mac Home Insert Draw Design Layout References Mailings Review View Oh Calibri (B. - 14 - A A Aa A E. 2. ! || me 4 BI.XX A.2 A FOR Wow property Pr o pecon Understand the differences between Income statement and statement of cash flow Business case (100 points) John Delivery services Ltd. is a company dedicated to the delivery of merchandises purchased online The company started the year 2019 with a total fleet of 5 cars purchased on 1" of January 2018 for a total amount of 100,000 and 3 trucks purchased on 1" of January 2017 for a total amount of 180,0006. All cars have an estimated useful life of 5 years whereas trucks have an estimated useful life of 6 years. All vehicles have a salvage value of 10% of its cost. The depreciation method is the straight line method. At 1" of January 2019 the accountant of the company realized that the useful life of the trucks should be lowered to 5 years in total taking into account the intensive use made of the vehicles. In order to be able to respond to the dramatic increase of job orders from the main clients, the company decides on 1" of March to acquire 10 new trucks for a total amount of 500.000. The trucks will have a useful life of 5 years, and an estimated salvage value of 10%. The accountant of the company decided that regarding these last trucks purchased, the depreciation method should be the 200% declining balance method. To finance this acquisition, the company will issue 50.000 preferred stocks with 10 par value and 11% dividend rate. Calibel (Bo." 14 A A BTW x x A Aar As Eve A EEEE 21 1 At 1" of January 2019, the owner's equity section of the balance sheet of the company was composed as follows: Common stock 100,000 shares of 1 par value common stock - Additional paid in Capital Common stock: 150.000 Retained earnings: CS0.000 The 1" of April 2019, a tornado destroyed part of the company's facilities, causing a total loss of 57.000 On 1" of June 2019, John, a shareholder of the company decided to sale his 10% stake into the company. The company proceeded to the purchase of shares at a price per share of 10, a price 4 Cabove the market price To finance this purchase the company took a 6% loan of 100,000. Interests are payable once a year every 1" of June During year 2019, the remaining expenses of the company were the following Labor costs: 26 drivers with an average salary of 2.100/month. 12 of said drivers where hired on 1" of March 2012 plus 30% social security cames payable the 15 first days following each month 1 Manager with a grossfied salary of 60.000/year plus 30% social security taxes payable the 15 first days following each month, and a bonus of 5% of the net income of the previous year. 3 mechanics with an average salary of 1.850 /month Gasoline expense: C350,000, all paid cash Insurance expense: 20,000 per month payable the first day of every quarter Depreciation expense (facilities): C 42.000 Miscellaneous: 146,000 paid cash During the year 2019 the sales of the company amounted to 1,653,000. Consider that 9% of the company's sales remain unpaid at 31" of December 2019 Income tax is payable each month of February at 25% rate on the net income of the previous year. The company began the year 2019 with a cash balance of 125,000 Net Income of year 2018 was 160,000 Prior to the stockholders meeting, John who owns 40% of the capital of the company comes to ask you about how the different issues commented above may affect the profitability of his investment into the company 1121 words English (United States) Focus ESE MacBook Pro 2 BC0123 Accounting Il Resit 100% - Compatibity Mode Saved to my Mac View Design Layout References 14w A A A A Mailings Review EVERED 21 Aalbot code AMC ABCD AaBb.la 1. Calculate the depreciation expense of the cars and trucks of the company for the year 2019. Explain your answers as well as the differences between the two methods used by the company, and how the new method of depreciation decided by the accountant will affect the net income of the company for the year 2019, and over the total useful life of the assets. (20points) 2. Prepare the journal entries for the acquisition of the treasury stocks. Explain your answer. (10 points) 3. Prepare a detailed income statement of the company showing the earning per share figure for each element of the Income statement. Explain your calculation. (40 points) 4. Prepare a statement of cash flow for each one of the three sections (operating, Investing and financing activities) for the year 2019 using the direct method and calculate the cash balance at 31" of December (30 points)