subject : intermediate accounting (act410)

Company C $580,000 78,000 Question 1: (18 Marks, 2 each) Given the following independent situations below: Company A Sales revenue (a) Beginning inventory 55,000 Net purchases 190,200 Ending inventory 40,800 Cost of goods sold (b) Gross profit 82,500 Operating expenses (c) Income before taxes 9,000 Company B $420,500 (d) 213,400 92,000 (e) 75,000 44,000 58,000 365,000 (h) 52,000 (i) Required: Find the missing numbers. (show your computation). Question 2: (70 Marks) Dzeko Corporation's capital structure consists of 82,000 ordinary shares. At December 31, 2019 an analysis of the accounts and discussions with company officials revealed the following information: Sales Rent expense Depreciation expense* Purchases Loss on discontinued operations (net of tax) Advertising expenses Dividend revenue Inventory, January 1, 2019 Inventory, December 31, 2019 Retained earnings, January 1, 2019 Purchase discounts Interest expense General Salaries expenses Cash dividends declared Salesperson's salaries expenses Tax rate $1,350,000 60,000 80,000 738,000 30,000 25,000 83,000 28,000 17,000 820,000 4,000 15,000 77,000 73,000 82,000 30% *40% of the company's building was devoted to sales activities. Instructions (a) Prepare an income statement. (45 Marks) (b) Prepare a retained earnings statement. (25 Marks) Question 3: (12 Marks, 2 each) For each of the items listed below, indicate how it should be treated in the financial statements. 1. The company incurred a loss from impairment of plant assets. 2. Obsolete inventory was written off. This was the first loss of this type in the company's history. 3. Loss on the disposal of a component of the business. 4. Recognition of income earned last year which was inadvertently omitted from last year's income statement. 5. The company neglected to record its depreciation in the previous year. 6. Stopping all production in the United States. The manufacturing operations were relocated in Mexico