Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Type or paste question here Problem 1 (4 marks - 8 minutes) The following list is a partial list of account balances for Company A
Type or paste question here
Problem 1 (4 marks - 8 minutes) The following list is a partial list of account balances for Company A as at December 31, 20x0: 5,000 35,000 14,000 Accounts payable Accounts receivable Accumulated depreciation Advertising expense Cash Common stock Cost of goods sold Depreciation expense Dividends paid Furniture and fixtures Income tax expense Interest expense Lease expense - office equipment Maintenance expense Office supplies Office supplies expense Prepaid advertising expense Prepaid insurance expense Rent expense Salaries expense Salaries payable Sales revenue 3,000 18,350 80,000 187,250 7,000 18,000 70,000 36,920 2,600 14,400 2,600 1,560 3,600 800 12,400 48,000 68,000 2,450 489,250 Required - Prepare a Statement of Income in good form. Problem 2 (16 marks - 32 minutes) Van de Lay Industries is just finishing up another year of operations. The company's unadjusted Problem 2 (16 marks - 32 minutes) Van de Lay Industries is just finishing up another year of operations. The company's unadjusted trial balance is shown below: Van de Lay Industries Unadjusted Trial Balance January 31, 2021 Debit Credit $ 1,200 21,800 $ 26,400 137,415 254,415 40,000 6,000 30,000 Accounts payable Accumulated depreciation Advertising expense Cash Consulting revenues earned Depreciation expense Furniture and fixtures Income tax expense Insurance expense Interest expense Prepaid insurance Prepaid rent Rent Expense Retained earnings Salaries expense Share capital Short-term note payable Supplies inventory Supplies expense Utilities expense 48,000 44,000 103,400 31,600 45,000 20,000 18,800 62,400 1,200 445,815 $ $ 445,815 No adjusting entries have been made for the year ending January 31, 2021. The following information relates to Van de Lay's accounts: a) Van de Lay uses the straight line method of depreciation for all assets. For the furniture and fixture account, at purchase the useful life of the assets was 8 years with no residual value. b) The Insurance expense account includes a two-year policy taken out and paid in full with cash on March 1, 2020 for $30,000. 2020 for $30,000. c) The Prepaid Rent account balance of 548,000 represents the amount paid by Van de Lay on December 31, 2021 and covers rent for the period of December 31, 2021 through December 31, 2022. d) The short-term note payable was taken out on November 1, 2020 and bears an interest rate of 7% per annum. The note is due to be repaid, principle and all interest, on October 31, 2021. e) The year-end inventory count showed supplies totaling $12,000 on hand at January 31, 2021. f) Van de Lay pays its employees every two weeks. The last payment was made January 22, 2021. The average weekly salary expense is $600. Required: a) Prepare the adjusting entries for each of the above (round to the nearest whole dollar) (12 marks) b) What is Van de Lay's net income for the year ended January 31, 2021? (2 marks) c) Prepare a statement of Changes in Shareholders' Equity for the period ending January 31, 2021 (2 marks) Problem 3 (6 marks) (12 minutes) Below is a listing of financial data from FB Ltd.'s balance sheet for the current year, 2020, as well as the previous year, 2019 December 31, December 31, 2020 2019 Cash $ 87,000 92,210 Accounts Receivable 265,000 219.950 Prepaid expenses 48,000 39,840 Inventory 126,000 104,580 Property Plant & Equipment (net) 474,000 393,420 Accounts Payable 320,000 255,600 Current portion of long-term debt 20,000 16,600 Long term debt 200,000 166,000 Share capital 60,000 49,800 Retained Earnings 400,000 362,000 Below is a listing of financial data from FB Ltd.'s income statement for the current year, 2020, as well as the previous year, 2019. Problem 3 (6 marks) (12 minutes) Below is a listing of financial data from FB Ltd.'s balance sheet for the current year, 2020, as well as the previous year, 2019. December 31, December 31, 2020 2019 Cash $ 87,000 92,210 Accounts Receivable 265,000 219.950 Prepaid expenses 48,000 39,840 Inventory 126,000 104,580 Property Plant & Equipment (net) 474,000 393,420 Accounts Payable 320,000 255,600 Current portion of long-term debt 20,000 16,600 Long term debt 200,000 166,000 Share capital 60,000 49,800 Retained Earnings 400,000 362,000 Below is a listing of financial data from FB Ltd.'s income statement for the current year, 2020, as well as the previous year, 2019. Year ending Year ending December 31, December 31, 2020 2019 Revenue 1,200,000 1,000,000 Operating Expenses 720,000 650,000 Interest Expense 12,000 10.800 Net Income before tax 468,000 339.200 Income tax expense 187,200 135,680 Net Income 280,800 203,520 Required: Calculate the following ratios based on the data above (round to 4 decimal places and show your work!) a) Calculate FB Ltd.'s quick ratio for 2019 and 2020. ( 2marks) b) Based on your answers from (a) what can you say about FB Ltd.'s liquidity? (2 marks) c) What is FB Ltd.'s Days sales in Accounts Receivable for 2020? (use 365 days) (1 mark) d) What is FB Ltd.'s Return on Equity for 2020? (1 mark) 1001W21MTExamSpreadsheet.xlsx 25 February 2021, 12:55:44 PM Problem 1 (4 marks - 8 minutes) The following list is a partial list of account balances for Company A as at December 31, 20x0: 5,000 35,000 14,000 Accounts payable Accounts receivable Accumulated depreciation Advertising expense Cash Common stock Cost of goods sold Depreciation expense Dividends paid Furniture and fixtures Income tax expense Interest expense Lease expense - office equipment Maintenance expense Office supplies Office supplies expense Prepaid advertising expense Prepaid insurance expense Rent expense Salaries expense Salaries payable Sales revenue 3,000 18,350 80,000 187,250 7,000 18,000 70,000 36,920 2,600 14,400 2,600 1,560 3,600 800 12,400 48,000 68,000 2,450 489,250 Required - Prepare a Statement of Income in good form. Problem 2 (16 marks - 32 minutes) Van de Lay Industries is just finishing up another year of operations. The company's unadjusted Problem 2 (16 marks - 32 minutes) Van de Lay Industries is just finishing up another year of operations. The company's unadjusted trial balance is shown below: Van de Lay Industries Unadjusted Trial Balance January 31, 2021 Debit Credit $ 1,200 21,800 $ 26,400 137,415 254,415 40,000 6,000 30,000 Accounts payable Accumulated depreciation Advertising expense Cash Consulting revenues earned Depreciation expense Furniture and fixtures Income tax expense Insurance expense Interest expense Prepaid insurance Prepaid rent Rent Expense Retained earnings Salaries expense Share capital Short-term note payable Supplies inventory Supplies expense Utilities expense 48,000 44,000 103,400 31,600 45,000 20,000 18,800 62,400 1,200 445,815 $ $ 445,815 No adjusting entries have been made for the year ending January 31, 2021. The following information relates to Van de Lay's accounts: a) Van de Lay uses the straight line method of depreciation for all assets. For the furniture and fixture account, at purchase the useful life of the assets was 8 years with no residual value. b) The Insurance expense account includes a two-year policy taken out and paid in full with cash on March 1, 2020 for $30,000. 2020 for $30,000. c) The Prepaid Rent account balance of 548,000 represents the amount paid by Van de Lay on December 31, 2021 and covers rent for the period of December 31, 2021 through December 31, 2022. d) The short-term note payable was taken out on November 1, 2020 and bears an interest rate of 7% per annum. The note is due to be repaid, principle and all interest, on October 31, 2021. e) The year-end inventory count showed supplies totaling $12,000 on hand at January 31, 2021. f) Van de Lay pays its employees every two weeks. The last payment was made January 22, 2021. The average weekly salary expense is $600. Required: a) Prepare the adjusting entries for each of the above (round to the nearest whole dollar) (12 marks) b) What is Van de Lay's net income for the year ended January 31, 2021? (2 marks) c) Prepare a statement of Changes in Shareholders' Equity for the period ending January 31, 2021 (2 marks) Problem 3 (6 marks) (12 minutes) Below is a listing of financial data from FB Ltd.'s balance sheet for the current year, 2020, as well as the previous year, 2019 December 31, December 31, 2020 2019 Cash $ 87,000 92,210 Accounts Receivable 265,000 219.950 Prepaid expenses 48,000 39,840 Inventory 126,000 104,580 Property Plant & Equipment (net) 474,000 393,420 Accounts Payable 320,000 255,600 Current portion of long-term debt 20,000 16,600 Long term debt 200,000 166,000 Share capital 60,000 49,800 Retained Earnings 400,000 362,000 Below is a listing of financial data from FB Ltd.'s income statement for the current year, 2020, as well as the previous year, 2019. Problem 3 (6 marks) (12 minutes) Below is a listing of financial data from FB Ltd.'s balance sheet for the current year, 2020, as well as the previous year, 2019. December 31, December 31, 2020 2019 Cash $ 87,000 92,210 Accounts Receivable 265,000 219.950 Prepaid expenses 48,000 39,840 Inventory 126,000 104,580 Property Plant & Equipment (net) 474,000 393,420 Accounts Payable 320,000 255,600 Current portion of long-term debt 20,000 16,600 Long term debt 200,000 166,000 Share capital 60,000 49,800 Retained Earnings 400,000 362,000 Below is a listing of financial data from FB Ltd.'s income statement for the current year, 2020, as well as the previous year, 2019. Year ending Year ending December 31, December 31, 2020 2019 Revenue 1,200,000 1,000,000 Operating Expenses 720,000 650,000 Interest Expense 12,000 10.800 Net Income before tax 468,000 339.200 Income tax expense 187,200 135,680 Net Income 280,800 203,520 Required: Calculate the following ratios based on the data above (round to 4 decimal places and show your work!) a) Calculate FB Ltd.'s quick ratio for 2019 and 2020. ( 2marks) b) Based on your answers from (a) what can you say about FB Ltd.'s liquidity? (2 marks) c) What is FB Ltd.'s Days sales in Accounts Receivable for 2020? (use 365 days) (1 mark) d) What is FB Ltd.'s Return on Equity for 2020? (1 mark) 1001W21MTExamSpreadsheet.xlsx 25 February 2021, 12:55:44 PMStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started