Accounting Answers

(a) Define the term corporation and briefly discuss the major characteristics of a corporation 

(b) Write few notes on the following headings

(i) Authorisedshares 

(ii) Called-up capital.

(iii) Issued capital

(iv) Paid-up capital.

(v) Par Value

(c) Explain the meaning of treasury stock 

(d) Outline the characteristics of preference shares 

Rick Hall owns a card shop, Hall's Cards. The following cash information is available for the

month of August 2016.

As of August 31, the bank statement shows a balance of $16,140. The August 31 unadjusted

balance in the Cash account of Hall's Cards is $14,100. A review of the bank statement revealed

the following information:

A deposit of $4,150 on August 31, 2016, does not appear on the August bank statement.

2. It was discovered that a check to pay for baseball cards was correctly written and paid by the

bank for $4.500 but was recorded on the books as $5.400.

3.

When checks written during the month were compared with those paid by the bank, three

checks amounting to $5,370 were found to be outstanding.

4.

A debit memo for $80 was included in the bank statement for the purchase of a new supply

of checks.

Required

a. Prepare a bank reconciliation at the end of August showing the true cash balance.

You are the Accounting Manager for a company.You are analyzing your AR and you realize that the average collection period is lengthening every month, and this trend started 8 months ago.What specific action or steps would you take to (1) identify items that are potentially causing the collection time to increase and (2) reverse the trend and reduce the average collection time.

(1) What is DSO and how is it calculated?

(2) What is AR Turnover and how is it calculated?

(3) Identify ONE action/step you would take to identify the potential items causing the increase in your average collection period and 4 actions/steps you would take to reduce the collection time.

What is a prior period adjustment?

What is a correction of an error?

What does retrospective mean?

What does prospective mean?

What does restating prior periods mean?

Thank you.

You own a farm and grow seasonal products such as pumpkins, squash, and pears. Most of your business revenues are earned during the months of October to December. The rest of your year supports the growing process, where revenues are minimal, and expenses are high. In order to cover the expenses from January to September, you consider borrowing a short-term note from a bank for $300,000. Based on this scenario, please complete the following:

• Research the lending practices of a local bank.
• Determine the interest rate charged for a $300,000 loan.
• Determine the collateral the bank requires to secure the loan?
• Determine your overall payback amount if you were to repay the loan in less than one year.
• Choose either a payback with periodic payments or all at the end of the loan term, and compare the
• outcomes.
• After conducting your research, would you consider borrowing the money?
• What positive and negative outcomes accompany borrowing the money?

Liam is struggling to determine which deprecation method he should use for his new silk-screening machine. He expects sales to increase over the next five years. He also expects (hopes) that in two years he will need to buy a second silk-screening machine to keep up with the demand for products of his growing company. Discuss which depreciation method makes more sense for Liam:

• Higher expenses in the first few years, or keeping expenses consistent over time?
• Or would it be better for him to not think in terms of time, but rather in the usage of the machine?
• Please explain your choice.

Bobby quits his job as a veterinarian to open a model train store. Bobby made$80,000 a year as a veterinarian. The first year his train store is open, Bobby pays a helper $26,000. He also pays $24,000 in rent, $10,000 in utilities, and buys$200,000 of model trains. Bobby had a good year because he sold all of his model trains for $300,000.Bobby’s normal profit is $30,000.

a. What would an accountant calculate as Bobby’s profit?

b. What is Bobby’s total opportunity cost? What is his economic profit?

a. The payment of the 19, 000 insurance premium for two years in advance was originally recorded as Prepaid Insurance. One year of the policy is now expired. b. All employees earn a total of P10,000 per day for a five-day week beginning on Monday and ending Friday. They were paid for the workweek ending December 26. They worked on Monday, December 29, Tuesday, December 30, and Wednesday, December 31. c. The supplies account had a balance of P4,480 on January 1. During the year, P11,000 of supplies were bought. A year-end inventory showed that P6,400 worth of supplies are still on hand. d. Equipment costing, P588,000 has a useful life of five years with an P80,000 salvage value at the end of five years. Record the depreciation for the year.

Which economic decision makers determine the supply of labor? What is their goal and what decision criteria do they use in trying to reach that goal?

Which economic decision-makers determine the demand for labor? What is their goal and what decision criteria do they use in trying to reach that goal?