Accounting Answers

ABC Company, a manufacturing firm, has supplied the following information from its accounting

Records for the year 2020

Purchases of raw materials Br.76,000

Direct labor cost 52,500

Supplies used 5,300

Factory insurance 1,050

Commissions paid 7,500

Factory supervision 9,675

Advertising 2,400

Material handling 11,000

Work-in-process inventory, January 1, 2020 47,500

Work-in-process inventory, December 31, 2020 42,000

Materials inventory, January 1, 2020 10,400

Materials inventory, December 31, 2020 28,500

Finished goods inventory, January 1, 2020 20,055

Finished goods inventory, December 31, 2020 10,750

Sales as of December 31, 2020 250,000

Sales as of December 31, 2020

Required

1. Prepare a statement of cost of goods manufactured. (10 points)

2. Prepare a statement of cost of goods sold. (5 points)

3. Prepare income statement (5-points)

Depreciation is caused due to

Discuss how to activate your learning mindsets for accounting information systems. The nature of accounting information systems is social technology at work in the accounting area. (e.g., MS Access, MS Power BI). Unlike qualitative questions, you cannot run the result with technology if you only understand 90% of the application knowledge.Technical knowledge is only one part of the solution, and we need to learn how to work with technology in a team for practical solutions.

If you can design a general-purpose AIS, even if it is simple, you know how to use some much more complicated AIS. There are at least 20 different AIS systems in the market. You can handle any system after you learned how to design a system. In addition, social technology also requires superior solutions and emphasizes user-driven criteria and diverse voices. Help you understand design thinking and how it works:

https://hbr.org/2018/09/why-design-thinking-works (Links to an external site.).

3. X Company is evaluating its cost of capital under alternative financing arrangements. In consultation with investment bankers, X Company expects to be able to issue new debt at par with a coupon rate of 10% and to issue new preferred stock with a $4.00 per share dividend at $25 a share. The common stock of X Company is currently selling for $20.00 a share. X Company expects to pay a dividend of $2.50 per share next year. Market analysts foresee a growth in dividends in Invest stock at a rate of 5% per year. Invest does not expect its cost of debt, preferred stock or common stock, to be different under the two possible financing arrangements. X Company marginal tax rate is 40%. Hint: coupon rate of the bond is the same as the before-tax cost of debt. The two arrangements are: Financing Arrangement, Debt, Preferred Stock, Common Stock, respectively

1, 20% 30% 50%& 2, 50% 30% 20%

B. What is the weighted average cost of capital to X Company under the second financing arrangement?

b) Assume that assets and liabilities increased by Br.240,000, and Br. 120,000 respectively

during a given year. Assume the following additional particulars further

▪️ Revenues generated during the year…. Br.80,000

▪️ Additional investment made by the owner during the year ………. Br. 70,000

▪️ Amount withdrawn by the owner during the year…. $10,000

Required: Determine the amount of expense incurred during the year

What happen to market equilibrium when demand decrease supply increase

6. Complete the following financial statements of Omega Company on the basis of the ratios given below. Omega Company Profit and loss account For the year ended June 30 2001 Sales 2,000,000 Cost of Goods Sold 600,000 Gross Profit 1,400,000 Operating Expenses 1,190,000 Earnings Before Interest and Tax.....A?

Debenture Interest 10,000

Income Tax....B?

Net Profit.....C?

Omega Company Balance sheet For the year ended June 30 2001 Assets Liabilities Cash...D? Sundry creditors 60,000 Stocks....E? 10% Debentures...I?

Debtors 35,000 Total liabilities... J?Total Current Assets.. F?Reserve and Surplus....K? Fixed Assets.... G? Share Capital...L? Total Assets..... H?Total Liability and Equity...M?

Additional Information: A. Net Profit to Sale 5%     D. Inventory Turnover 15 times B. Current Ratio  1.5     E. Share Capital to Reserve 4:1 C. Return on Net Worth  20 %   F. Tax Rate  50 %  

5. Complete the following Balance Sheet based on the given data Total Debt to Owners Equity is 0.6 Current Debt to Total Debt is 0.4 Fixed Asset to Owners Equity is 0.6 Total Asset Turnover is 2 Inventory Turnover is 8 Gross profit 40% .

Cash............

Inventory........

Total current asset....

Fixed asset...........

Current liability...........

Long term debt..........

Total debt..............

Owner's equity..........1000

Total liability and owner's equity...

.

1. Key Insurance Agency was organized on October 1, 2020. Assume that the accounts are closed and financial statements prepared each month. The company occupies rented office space but owns office equipment estimated to have a useful life of 10 years from date of acquisition, October 1. The trial balance for Key Insurance Agency at December 31 is shown below.

Cash $22,565

Accounts Receivables 7.050

Office Equipment 9,600

Accumulated Depreciation: Office Equipment 160

Accounts Payable 2,260

Income Taxes Payable 4,965

Capital Stock 20,000

Retained Earnings 7,450

Dividends 2,500

Commissions Earned 31,080

Advertising Expense 2,400

Salaries Expense 18,000

Rent Expense 3,800

Totals $65,915 $65,915

a. Prepare the adjusting entry to record depreciation of the office equipment for the month of December, using the straight line method of computing depreciation expense.

Assume the following data extracted from accounting records of XYZ Company, a merchandising firm

Gross Purchase Br. 400,000

Sales returns and allowance 5,000

Sales discount 1,000

Purchase returns and allowance 2,000

Purchase discount 500

Gross sales 800,000

Ending inventory 40,000

Beginning inventory 50,000

Transportation in 1500

Operating expenses 150,000

Non-operating Expenses 10,000

Income Tax 30%

Required: Compute Net income (net loss) for the period