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Trial balance 31st March 2012 Sales 199000 Purchases 80,00 Furniture and fittings 24000 Accumulated Depreciation as at 1 April 2011 19,000 Stock at 1 April 2011 18,800 Bank 700 Trade Receivables 5,000 Trade Payables 25,890 Freehold Property at cost 180,000 Accumulated Depreciation as at 1 April 2011 18,000 Maintenance 9,240 Office expenses 12,400 Salaries 45,500 Directors bonuses 12,940 Rates 1,760 Loan Interest 1,800 Loans 18,000 Bad debt 700 Provision for debts as at 1 April 2011 150 Retained earnings as at 1 April 2011 23,000 Share Capital at 1 April 2011 90,000 Closing Stock at the 31st March 2012 was valued at �18,000 Rates includes an invoice for the year ending 31-Dec-12 �624 Office expenses of �1,000 outstanding at the year end Directors bonuses of �2,000 outstanding at the year end Depreciation is provided on a straight line of 10 % Freehold Property at cost and 15% reducing balance on F and F The provision for bad debts is to be 7% of trade receivables Income Statement and Balance Sheet
How will a business determine the correct establishment of lodgement schedule?
a.Prepare the journal entry to record the acquisition of the equipment on January 1, 2005.
b. Prepare the journal entry to record the depreciation expense for the year 2005 using the units of production method.
c. Show, in goodform, how the equipment will be presented on the balance sheep at December 31,2005.
d. Assume Mira used the straight line method of depreciation instead of the units of preoduction method of depreciation.what will bethe effect of this change on net income?
e. Mira provides a warranty on the coffee makers. Based on its experience, Mira expects to incur a warranty cost of 2% of the selling price. The coffee makers were sold at a price of $20 per unit.
Prepare the year to end adjusting journal entry to record the estimated warranty liability.
While reviewing the books of Haly and Wier, a partnership, the firm's accountant observed the following errors. The accounting year ends on December 31, 2005. a. An amount of $10,000 representing the sales value of goods retumed by a customer to whom the goods were sold on account was wrongly debited to cost of good sold b. Apayment of $882 towards a purchase on terms of 2/10, n/30 wasnotrecorded.The payment was made 6 days after the goods were purchased. c. An amount of $1,000 paid toward the personal travel expense of a partner was debited to travel expense.
It has been mentioned that Claims received for loss of plant in fire is not cash flow. But isn't this an extraordinary Investing Activity Cash Inflow ? Also kindly explain how to treat 'Claim /amount received for loss of plant in fire' in Cash Flow Statement ?
prepare cash fllow staement from investing activities of alpha creative ltd.
plant acruired 160,000
claim recived for loss of plant in fire 45,500
unsecured loans given to subsidaries 5,95,000
invest on loan recived from subsidairy companies
also given resons for the classification of above activities as inflow/outflow
3. The profit function for a company is given by the following nonlinear equation:
P(x) = 4x2 – 200x − 25000 where P is the profit in dollars and x is the number of units sold.
3.1.1. Find the profit when 600 units are sold. (1 mark)
3.1.2. Determine the break-even level for this company. (3 marks)
The linear profit equation for a company that sells customized furniture is
A company is considering an investment proposal to install new milling controls. The project will cost Kes50,000. The facility has a life expectancy of five years and no salvage value. The company’s tax rate is 40%. The estimated cash flows from the proposed investment proposal are as follows:
Year CF
1 10,000
2 11,000
3 14,000
4 15,000
5 25,000
Compute:
a. Accounting Rate of Return and advise management if
the required rate of return is 6 %
b. Traditional Payback period and advise management
on the feasibility of the project
c. Discounted payback period at 6% discounting factor
d. Net present value at 6% discounting factor and advise
management on the project’s feasibility
e. Net present value at 15% discounting factor and advise
management on the project’s feasibility
f. Internal rate of return and explain its significance to the firm
g. Profitability Index at 10% discounting factor
What is the formula to calculate WDV of an asset ?