Intermediate Accounting — 1

Midterm Exam Review

Question Sheet

the followmg informahon was provided from an adjusted trial balance of Retro Corporation atthe year-end July 3V 2013.

_____

Amount ($)

_____

1,830,000

_______

___________

______________

100,000

___________________

_________________

48,000

_________________________________________________________

700,000

Required: Prepare Statement of Comprehensive Income using the Multiple Step format.

2. The financial records for Onetime Company has been provided for the year ended December315t 2013

-

Cost of Goods SoldDepreciation Expense

Insurance ExpenseInterest Expense

Salailes and Wages ExpenseRemaining Expense

Loss on sale of equipmentIncome tax expense

Net earnings from comprehensive income

Adjusted_AccountsSales

Revenue from discontinued designing segmentInterest Revenue

Cost of Goods Sold- Interest Expense 35,000

Operating expenses reported for the designing segment 69,000Gain on Sale of P.P.E 140,000

Selling and Administration expense 200,000LossonSaleoflnvestments

— 22,000Loss on Sale of P.P.E of the discontinued segment 50,000

Impairment of capital assets in the designing segment 10,000Loss on Disposal of geographic segment 30,000

Gain on investment in foreign subsidiary (due to change in currency) 10,000Income Tax 35%

—

Statement of Comprehensive IncomeFor the year ended December 31st 2013

—-

—- $ 180J00(136,000)(10,000)(1,000)

(2 000)(12,000)

(13,000)

(2,000)

(3,000)

1,000

I

— j

rL.

Prvpared by: Charanit Sinh

Intermediate Accounting — 1

Midterm Exam Review

Question Sheet -

Statement of Financial Position

As at December 31 2013 & 2012

Accounts 2013 2012

_____

Cash $61,000 L $35,000

____

Accounts Receivable

____

31,500 f 28,500

Inventory

_____

15,000 10,000

Prepaid insurance 1,400 2,400

Building and Equipment 81,000 80,000

Accumulated depreciation — (21,000) (20,000)

Land 81,100 40,100

Total 250,000 176,000

Accounts Payable 21,000 18,000

Wages payable 1,000 4,000

Rent payable 6,000 -

Notes payable, long term 56,000 30,000

Common shares 143,000 100,000

Retained earnings 23,000 24,000

Total - 250,000 176,000

Additional Information as provided Onetime:

- During the year the company decided to sell its equipment for cash; cost $15,000,

accumulated depreciation $9,000. Equipment costing $16,000 was acquired, issued a

$16,000 three year interest bearing note payable.

- Land was purchased for $20,000 cash. Towards the end of the year, the company acquired

land for $21,000 and issued common shares payment in full

red

Prepare Statement of Cash Flows using the Indirect Method for 2013.

3 On January 1’ 2015, the hareholders equity of Jans Ltd included the foilnwiug items

Common Shares -$12000

Preferred Shares 150,000

RetainedEarnings — 45,000

Accumulated translation gain or loss from 55,000

fureign subsidiary —-

- jContributed c3nital 25,000

Preparc’d by Charar’pt Sinh

Intermediate Accounting — 1

Midterm Exam Review

Question SheetDuring the year ending December 3I the following events occurred:

a Net income after tax as reported to he $50,000b. Additional 4,000 commons shares were issued for $25 eachc. The company retired 1,000 of its preferred shares for $110 each. The shares had a stated

value of $100 each.d. The company recorded an overall loss of $5,000 arising from a decline in the net recoverable

value of the asset sue to change In foreign currency

Req ui red:

a. Calculate the amount of Net Comprehensive Incomeb. Prepare a statement of changes in equity for the year ended December 31 2015

4. Bens Construction Company was contracted to build an apartment building for $5,600,000 byJohns Ltd. The contract requires John Ltd. to make progress payments to Bens Construction.Work began under the contract on October 1st 2004 and was completed in May 30th 2006.Information regarding construction activities is provided below

2004: Construction costs incurred during the year; $850,000, estimated costs to complete,$4,200,000 progress billings during the year were $700,000, and collections of 90% werereceived

2005: Construction costs incurred during the year was $2,900,000 estimated costs to completewas $900,000 progress in billings during the year were $2,900,000 and collections of 90% werereceived

2006: Construction costs incurred during the year; $550,000, because the contract wascompleted, the remaining balance was billed later and collecting in full per the contract

Required:

a Calculate the gross profit for each year.b. Prepare all appropriate journal entries that will be recorded by Bens Construction for 2006.

Assume percentage of completion method has been used.

Prepared by: Charin;it Sinh

Intermediate Accounting — I

Midterm Exam Review

Question Sheet

Zen Corporations statenint of financial pasition for the year end December 2014 included the

Following items

Assets Amounts A’noun

Cash $55,000 Accounts payable $20,000

Accounts receivab- F 28,000 Wage payable l,000

Prepaid rent 10,000 Bonds payable Iiso,ooo

Building

________

100,000 Commons shares f 90,000

Land 50,000 Retained Earnings 23,000

Equipment 80,000

Trademark

_____________

5,000

_____

_________

Patent

___________

30,000

________

Total j0pJTotal —— 358,000

The following additional information was given

a. Net income for the year after tax was $50,000

b. Allowance for doubtful accounts has a credit balance of $8,000

c. Patent was amortized for $5,000

d. Additional equipment was purchased for $20,000 cash

e. Accumulated depreciation for building equalled $35,000 and $20,000 for equipment

f. The company declared and paid $40,000 in cash dividends

g. Building costing $20,000 with accumulated depreciation of 5,000 was sold for $10,000 cash

h. Retired $100,000 worth of bonds

i. An investment in foreign subsidiary resulted in a gain of $17,000

Required: Prepare a statement of financial position for the year 2014

Prep rod by (Hr nt 5ngh

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