P17-1A You are provided with the following transactions that took p...

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P17-1A You are provided with the following transactions that took place during a recent fiscal year: as cash and profit. (LO 1) AP statement (a) what using eir Transaction Classification (b) than the Cash meth 1. Paid telephone bill for the month. o statement of The Hanalei 2. Sold equipment for cash, at a loss. Inc. contai 3. Sold an investment, at a gain. 4. Acquired a building by paying 10% in cash and signing a mortgage payable for the balance. Year Ended 5. Made principal repayments on the mortgage. Service revenue 6. Paid interest on the mortgage. Operating expenses 7. Sold inventory on account, at a price greater than cost. Depreciation expense 8. Paid wages owing (previously accrued) to employees. Loss on sale of equipment 9. Declared and paid a cash dividend to common shareholders. Profit from operations 10. Paid rent in advance. Other revenues and expenses 11. Sold inventory for cash, at a price greater than cost. Interest expense 12. Wrote down the value of inventory to net Profit before income taxes realizable value, which was lower than cost. Income tax expense 13. Received semi-annual bond interest. Profit 14. Received dividends on an investment in associate. 15. Issued common shares. 16. Paid a cash dividend to common shareholders. Hanalei's balance sheet contained the follow 17. Collected cash from customers on account. 18. Collected service revenue in advance. Accounts receivable Instructions Prepaid insurance Assuming the company is reporting under IFRS, complete the above table for each of the following requirements Accounts payable The first one has been done for you as an example. Interest payable Income tax payable (a) Classify each transaction as an operating activity (O), an investing activity (I), a financing activity (F), or a Unearned revenue noncash transaction (NC) on the cash flow statement. If there is a choice of how a transaction is classified. indicate the alternative classifications. Additional information: Accounts (b) Specify whether (-), the transaction will increase (+), decrease or have no effect (NE) on cash reported on the balance sheet. TAKING IT FURTHER The price-earnings ratio for DAVIDsTEA is 54.8 times, compared consistent with with Starbucks the two companies' profitability in part (c)? Calculate missing information. P18-11A Presented here are an incomplete income statement and balance sheet for Schwenke Corporation Revenue (LO 4, 5,6) AN Operating Profit from ope exper SCHWENKE CORPORATION Income Statement Year Ended December 31, 2017 Other expense $ (a) Profit before i Net sales (b) Cost of goods sold Income tax e (c) Gross profit 333,750 Profit Operating expenses (d) Profit from operations 10,500 Interest expense (e) Profit before income taxes (f) Income tax expense $124,600 Profit SCHWENKE CORPORATION Balance Sheet December 31, 2017 Assets Current assets Cash Accounts receivable $ 7,500 Inventory (g) Total current assets (h) Property, plant, and equipment (i) Total assets (j) Liabilities $ (k) Current liabilities Non-current liabilities $ (1) 120,000 Total liabilities (m) Shareholders' Equity Common shares 250,000 Retained earnings 400,000 Total shareholders' equity 650,000 Total liabilities and shareholders' equity $ (n) Additional information: 1. The gross profit margin is 40%. 4. The current ratio is 3:1. 2. The income tax rate is 20%. 5. The asset turnover is 1.5 times. 3. The inventory turnover is 8 times. Instructions Calculate the missing information using the ratios. Use ending balances instead of average balances, where aver- ages are required for ratio calculations. Show your calculations. TAKING IT FURTHER Is it necessary to show both the proceeds from issuing a new note payable and the partial repayment of notes payable? Or is it sufficient to simply show the net increase or decrease in notes payable, as is done with accounts payable? Explain. P17- 12A Refer to the information presented for Diatessaron Inc. in P17-11A. Prepare cash flow statement- direct method. (LO3) AP Additional information: (b) 1. All purchases of inventory are on credit. 2. Accounts Payable is used only to record purchases of inventory. TAKING IT FURTHER Calculate the total cash inflow from the bonds if Finance Company holds the Power Ltd. bonds until maturity. P16-4A During the year ended December 31, 2017, Rakai Corporation, a public company, had the following transactions related to investments held for trading purposes: Record equity and debt investments categorized as Feb. 1 Purchased 575 IBF common shares for $25,300. fair value through profit or Mar. 1 Purchased 1,500 Raimundo common shares for $48,000. loss; show statement Apr. 1 Purchased $200,000 of CRT 3% bonds at par. Interest is payable semi-annually on April 1 and presentation. (LO3,5 AP October 1. July 1 Received a cash dividend of $1.50 per share on the IBF common shares. Aug. 1 Sold 250 IBF common shares at $48 per share. Oct. 1 Received the semi-annual interest on the CRT bonds. 1 Sold the CRT bonds for $205,000. Dec. 31 The fair values of the IBF and Raimundo common shares were $50 and $28 per share, respectively. Instructions (a) Record the transactions and any required year-end adjusting entries. (b) Show the financial statement presentation of the investments and any related accounts in the financial state- ments for the year ended December 31, 2017 TAKING IT FURTHER WestJet's financial information presented was prepared using IFRS. Prior to 2009, WestJet prepared its financial statements using the version of Canadian GAAP in place before IFRS was required. How would these differing standards affect your interpretation of WestJet's historical performance? P18-2A Comparative income statement data for Chen Inc. and Chuan Ltd., two competitors, are shown below Prepare vertical analysis, for the year ended December 31, 2017. calculate profitability ratios, and compare. (LO 1, 3,6) AN Net sales (a) Using vertical analysis, calculate the percentage of the base amount of the income statement for each Cost of goods sold company. cogneib (b) Calculate the gross profit margin, profit margin, asset turnover, return on assets, and return on equity ratios Gross profit for 2017 for each company. Selling and administrativ (c) Using the information calculated in parts (a) and (b), compare the profitability of each company. Income from operations (d) Is your comparison in part (c) an intracompany comparison or an intercompany comparison? Explain. Other expenses and los Interest expense TAKING IT FURTHER How is your assessment of profitability affected by the differing sizes of the two companies, if at all? Explain. Income before incon Interpret horizontal and Income tax expense P18-3A Horizontal and vertical analysis of the income statement for a retail company selling ladies clothing is vertical analysis. shown below. Profit (LO 2,3,7) AN TARA CORPORATION Horizontal Income Statement

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