Accounting Answers

Give concrete example of the following moral principles

Principle 6, Acts done in fear are voluntary ( Glenn:41)

Principle 7, An act done out of fear, however great, is simply voluntary, although it is also regularly conditionally involuntary ( Glenn:41)

Principle 8, External act which are commanded, performed by a person under pending violence which could be reasonably resisted are involuntary and, therefore not imputable (Agapay:25)

Principle 9, An agent is responsible for the evil effect of his indirect voluntariness

Select one company and analyze it auditor's report

When do you record payables and when not to record payables? (This question i am asking is based on Accrued Liabilities and Payables).

John Doe owns John’s Auto repair. He owns it for 20 years. He owns the property that he is operating out of and he owns the business. What is the difference between the property and the business that he owns. Like what do you mean when he owns both?

3. Tricia works as an executive assistant of Coca-Cola Bottlers, Inc. She receives the minimum rate of P350.00 per day for the eight-hour work, The following are the timekeeping summary for the cut-off period from April 1-30, 2020.

8:00 A.M. – 5:00 P.M. 214 hours

5:00 P.M. – 10:00 P.M. 46 hours

10:00 P.M. – 11:00 P.M. 17 hours

The summary includes Tricia’s 8 hours work on April 9, 2020.

Requirements:

1. Compute Tricia’s payroll for April.

2. Determine the SSS, Phil. Health, HDMF and withholding tax due for both employee and employer. Monthly workings for purposes of establishing salary bracket is 26 days.

2. SSS Enterprises hired Joseph Ramos as an Accounting Clerk. He accepted a monthly basic pay of P18,000. For the first six months, it was a company policy that he will be under probationary employment status and as such will be paid on a daily basis. No work, no pay applies to him.

Assuming that the company observes a 262 working days per year and Joseph works for 22 days for the month of January 2020 with 18 hours of overtime pay. Compute his salary for the month, net of mandatory deductions.

PROBLEMS:

1. The following persons are under the employment of A & B Enterprises:

Employees Monthly Salary Overtime Work

June Matic P 8,000.00 Reg. Holidays – 8 hrs.

Henry Flores 10,000.00 Rest Day – 10 hrs.

Maria Sarmiento 15,000.00 Reg. Day – 10 hrs.

A & B Enterprises is paying its employees on a semi-monthly basis. The membership fees are deducted on the first half of the month payroll, and the withholding tax is deducted on the second half of the month payroll. The employees did not incur any tardiness and absences during the month. They are entitled to overtime pay. The enterprise is using the 314 working days in a year as basis with 8 regular working hours in a day.

Requirements:

1. Compute the withholding faxes of each employee.

2. Compute the overtime pay of each employee.

3. Prepare the payroll sheet for the period March 1 – 15, 2020.

J. Wright, a sole trader, extracted the following trial balance from his books at the close

of business on 31 March 2016:-

Purchases and sales 61,420 127,245

Inventory 1 April 2015 7,940

Capital 1 April 2015 25,200

Bank overdraft 2,490

Cash 140

Discounts 2,480 62

Returns inwards 3,486

Returns outwards 1,356

Carriage outwards 3,210

Rent and insurance 8,870

Allowance for doubtful debts 630

Fixtures and fittings 1,900

Van 5,600

Accounts receivable and accounts payable 12,418 11,400

Drawings 21,400

Wages and salaries 39,200

General office expenses 319

168,383 168,383

Notes:

(a) Inventory 31 March 2016 £6,805.

(b) Wages and salaries accrued at 31 March 2016 £3,500; Office expenses owing £16.

(c) Rent prepaid 31 March 2016 £600.

{d) Increase the allowance for doubtful debts by £110 to £740.

(e) Provide for depreciation as follows: Fixtures and fittings £190; Van £1,400.

Prepare the statement of profit or loss for the year ending 31 March 2016 together with a statement

of financial position as at that date.

Explain the effects of the following transactions on cash and how they would be shown in the statement of cash flow

1)the purchase of equipment for $2million with cash proceeds from the issue of a 12 month note payable at $4million

2)Bonds are retired using $million from proceeds of an issue of $10million ordinary shares of $1 per value issued at the premium of $0.5

3) $5million of merchandise inventory is acquired on account

4)$ 2.5 dividend per share is proposed by the directors on 750 000 outstanding shares

5) the disposal for a piece of machinery for $1.5millon each. The original price was $5million and the accumulated depreciation as at the date of disposal was $2.5million

On March 1, 2002, Tahir Muktar, a famous businessman in Addis, opened a business named “Universal Garage” which is organized as a sole proprietorship. The business is established to render car repair, maintenance and related services for fees. Below are chart of accounts for and selected transactions completed by Universal Garage in March 2002.

Mar 1 Received the following assets from its owner, Tahir: 

Cash....................................... Br, 8,300

Supplies .................................   2,000

Office Equipment...................  10,000

2 Borrowed Br 5,000 from Dashen Bank 

 3 Paid Br 1,800 for rent on a building leased for business purposes

3 Purchased welding and other repair machinery for Br 3,600 cash 

4 Paid Br 200 for a radio advertisement 

8 Sold for Br 200 cash an old office equipment with a recorded cost of Br 200 

  13 Paid weekly salary Br 1,200 

16 Received Br 4,400 from services rendered on cash  

20 Paid weekly salary Br 1,200 include transactions for other income 

20 Delivered service on credit, Br 6,000

21 Purchased additional repair machinery on account for Br 2,000 from Sámi-Engineers 

23 Received Br 5,000 additional cash investment from its owner 

24 Repaid Br 1,000 bank loan and paid Br 100 interest on bank loan 

26 Purchased supplies for Br 800 cash 

27 Paid Br 100 for customer entertainment and other items

27 Paid weekly salary Br 1,200 

31 Paid Br 500 for electricity and other utilities consumed during the month

31 Received Br 4,200 cash from credit customers   

31 Paid Tahir Br 1,800 for personal uses 

Required:

Journalize the above transactions in a two-column journal 

Post the journal entries to “T” accounts  

Prepare and complete a worksheet based on the following additional information 

Cost of supplies remained unconsumed on Mar 31 is Br 900 

The amount paid on Mar 3 is for a three-month rent

The amounts of depreciation for machinery and office equipment are estimated to be Br 560 and Br 1,900 respectively

Universal Garage usually pays Br 1,200 for employee's salary every saturday for a six-day work week ended on that day 

Interest on bank loan accrued but not paid on March 31 total Br 100

Prepare financial statements for the month

Journalize and post adjusting entries 

Journalize and post closing entries 

Prepare post-closing trial balance 

The Barb Company has provided information on intangible assets as follows:

1. A patent was purchased from the Lou Company for $1,500,000 on January 1, 2006. Barb estimated the remaining useful life of the patent to be 10 years. The patent was carried in Lou’s accounting records at a net book value of $1,250,000 when Lou sold it to Barb.

2. During 2007, a franchise was purchased from the Rink Company for $500,000. In addition, 5% of revenue from the franchise must be paid to Rink. Revenue from the franchise for 2007 was $2,000,000. Barb estimates the useful life of the franchise to be 10 years and takes a full year’s amortization in the year of purchase.

3. Barb incurred research and development costs in 2007 as follows:

Materials and equipment ..... $120,000

Personnel .......... 140,000

Indirect costs ......... 60,000

$ 320,000

Barb estimates that these costs will be recouped by December 31, 2008.

4. On January 1, 2007 Barb, based on new events that have occurred in the field, estimates that the remaining life of the patent purchased on January 1, 2006 is only five years from January 1, 2007.