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THE COMPANY: Aylmer Industries Inc. (Aylmer) has been in business since 2018. Aylmer has two main business segments. This first segment is the construction of

THE COMPANY:

Aylmer Industries Inc. (Aylmer) has been in business since 2018. Aylmer has two main business segments. This first segment is the construction of large-scale projects. In 2021, Aylmer had two large construction projects in process. The other segment is the sale of construction equipment. Details of the construction projects and the sale of construction equipment can be found later in this document and in the accompanying Excel file.

Aylmer has 65,000 common shares outstanding and the shares are publicly traded. Since Aylmer is a publicly traded company, it follows IFRS.

There are no preferred shares outstanding.

Aylmer posted accounting transactions throughout the year. The Excel unadjusted trial balance was prepared from the recorded transactions. Aylmers fiscal year-end is December 31st. As a year-end review, management of Aylmer discovered that the following items have NOT been recorded and are NOT reflected in the unadjusted trial balance provided at December 31, 2021. For any journal entries, use December 31 as the date for the entries.

The accompanying Excel spreadsheet has important information and requirements. Please review the entire file carefully.

The unadjusted trial balance at December 31, 2021 and final trial balance at December 31, 2020 are provided in the Excel file for comparison purposes. Please see the Excel tab labelled Trial Balance. Use this Excel file and this tab to post journal entries as required, and to ensure that the worksheet remains in balance. You should use the worksheet to provide the ending balances needed to prepare the financial statements at December 31, 2021.

Ignore income taxes for this project.

  1. Bank Loan

Interest on the bank loan is 8.3% annually. Interest has to be paid on January 7, 2022; for 2021. The entire amount of the loan ($5,000,000) was outstanding during the entire year. No payments were made during the year. Of the bank loan, $2,650,000 is due June 30, 2022 with the remainder due June 30, 2026.

  1. Notes Payable

This is a short-term note. The company borrowed money from JRT Investments on October 1, 2021 for 6 months. The principal, along with interest is to be repaid on March 31, 2022. The interest rate is 9.10%.

  1. Long-term contracts

The company uses the percentage of completion method for recording long-term contracts. The company has two long-term contracts with details below:

Project 1- Downtown Hotel & Shopping Centre

  • Contract price and details are in the excel file.
  • Expected completion date is in 2023

Project 2 Factory & Warehouse

  • Contract price and details are in the excel file.
  • Expected completion date is in 2024

In the Excel spreadsheet, see the tab Revenue Recognition to perform any necessary calculations. You only need to record the transactions for revenue and expense recognition not billing and not cash collections.

image text in transcribed Project \#1 - Downtown Hotel \& Shopping Centre Contract Price Costs incurred in 2021 Estimated total costs to complete Other project information Progress Billings: Collections Project \#2 - Factory \& Warehouse Contract Price Costs incurred in 2021 Estimated costs in 2022 Estimated costs in 2023 Estimated costs in 2024 Other project information Progress Billings: Collections 01-Dec 25-Dec $9,000,000 $18,000,000 $$1,625,0004,000,000 $6,000,000 1,700,000 1,000,500

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