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- Chaos Ltd. has been served a legal notice on December 15, 2019, by the local environmental protection agency (EPA) to fit smoke detectors in its factory on or before June 30, 2020. The cost of fitting smoke detectors in its factory is estimated at € 250,000. How should Chaos Ltd. treat this in its financial statements for the year ended December 31, 2019?On its 2020 Balance Sheet, Liddle Inc. reported Currents Assets of $215,000, Net Fixed Assets of $1,300,000, Long-Term Debt of $780,000, and Total Equity of $600,000. On the 2021 Balance Sheet, Net Fixed Assets are $1,150,000 and Net Working Capital is $240,000. On the 2021 Income statement, the firm reported Sales of $2,550,000, Earnings Before Interest and Taxes of $1,435,000 and Depreciation of $225,000. In 2021, the firms Cash Flow from Assets was $1,209,250. What were the firm’s Taxes in 2021? Present the answer rounded to the nearest dollarThe following selected transactions relate to liabilities of Chicago Glass Corporation for 2024. Chicago's fiscal year ends on December 31. On January 15, Chicago received $7,400 from Henry Construction toward the purchase of $70,000 of plate glass to be delivered on February 6. On February 3, Chicago received $7,100 of refundable deposits relating to containers used to transport glass components. On February 6, Chicago delivered the plate glass to Henry Construction and received the balance of the purchase price. First quarter credit sales totaled $740,000. The state sales tax rate is 4% and the local sales tax rate is 2%. Required: Prepare journal entries for the above transactions. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
- Granite, Incorporated is the largest uniform supplier in North America. Selected information from its annual report follows. For the 2019 fiscal year, the company reported sales revenue of $6.1 billion and Cost of Goods Sold of $4.3 billion. Fiscal Year Balance Sheet (amounts in millions) Cash and Cash Equivalents Accounts Receivable, Net Inventory Prepaid Rent and Other Current Assets Accounts Payable Salaries and Wages Payable Notes Payable (short-term) Other Current Liabilities 2019 Current Ratio Inventory Turnover Ratio Accounts Receivable Turnover Ratio $ 540 860 330 795 210 520 116 28 2018 $430 810 340 660 190 520 28 320 Required: Assuming that all sales are on credit, compute the following ratios for 2019. Note: Do not round intermediate calculations. Round your final answers to 2 decimal places.19. A listing of the estimated balances in the company's ledger accounts as of December 31, 2023 is given below (as well as in your Excel template): Cash Accounts receivable Inventory-raw materials Inventory-finished goods Capital assets (net) Assets $ 83,365 1,122,900 10,000 9,125 724,000 $1,949,390 Total assets Liabilities and Shareholders' Equity Accounts payable $ 231,563 Capital stock 1,000,000 Retained Earnings Total liabilities and shareholders' equity 717,828 $1,949,390 Required: 1. Prepare a monthly master budget for ToyWorks for the year ended December 31, 2024, including the following schedules (Use the Excel template provided!): Sales Budget & Schedule of Cash Receipts Production Budget & Manufacturing Overhead Budget Direct Materials Budget & Schedule of Cash Disbursements Direct Labour Budget Selling and Administrative Expense Budget Ending Finished Goods Inventory Budget Cash Budget 2. Prepare budgeted financial statements at December 31, 2024, using absorption costing.Proton Corporation manufactures MRI machines used in the medical field. In the end of 2019, they reported a net income of $4,000,000. The company currently has 1,600,000 shares of common stock that trade for $12 per share. The company continues to expand and anticipates that in the end of 2020 their net income will be $6.5 million. They also anticipate issuing an additional 300,000 shares, so that in the end of 2020 the company will have 1,900,000 shares of common stock. Assuming the company’s price to earnings ratio remains at its current level, what will be the company’s stock price one year from now? 2.The PE ratio is a very common method used by investors to get a quick calculation on the market’s perception of a company. Critically evaluate the formula used to calculate the PE ratio focusing on the limitations of this method of valuation.
- Duakwanta is a listed company which manufactures personal computers (PCs). It is preparing its financial statements for the year ended 31 May 2019 and would like to seek advice on the following accounting issue: During the year, Duakwanta issued a debt finance to the financial markets to fund its expansion plans. This was a very significant debt issue for Duakwanta. After the issue, the market price of each block of debt on the market fell by approximately 10%. The financial press has stated that the reason for the fall is due to an increase in the company's credit risk, as the market players are worried by the size of the interest payments on Duakwanta's operating cash flows. Required: Advise the directors as to the financial reporting issues arising from the above scenario and explain the appropriate treatment in Duakwanta’s financial statements.HardevA company prepares its financial statements according to International Financial Reporting Standards. During 2024 the company incurred $1,265,000 in research expenditures to develop a new product. An additional $776,000 in development expenditures were incurred after technological and commercial feasibility was established and after the future economic benefits were deemed probable. The project was successfully completed and the new product was patented before the end of the 2024 fiscal year. Sale of the product began in 2023. What amount of the above expenditures would be expensed in the 2024 income statement?
- On January 1, 2018, the Shagri Company began construction on a new manufacturing facility for its own use. Thebuilding was completed in 2019. The only interest-bearing debt the company had outstanding during 2018 waslong-term bonds with a book value of $10,000,000 and an effective interest rate of 8%. Construction expendituresincurred during 2018 were as follows:January 1 $500,000March 1 600,000July 31 480,000September 30 600,000December 31 300,000Required:Calculate the amount of interest capitalized for 2018.Applying the Fundamental Accounting Equation At the beginning of 2019, KJ Corporation had total assets of $554,000, total liabilities of $261,800, common stock of $139,300, and retained earnings of $152,900. During 2019, KJ had net income of $225,200, paid dividends of $74,400, and issued additional common stock for $93,900. KJ's total assets at the end of 2019 were $721,800. Required: Calculate the amount of liabilities that KJ must have at the end of 2019 in order for the balance sheet equation to balance.Your firm has been engaged to examine the financial statements of Buffalo Corporation for the year 2020. The bookkeeper who maintains the financial records has prepared all the unaudited financial statements for the corporation since its organization on January 2, 2015. The client provides you with the information. Buffalo CorporationBalance SheetDecember 31, 2020 Assets Liabilities Current assets $1,899,000 Current liabilities $956,000 Other assets 5,138,660 Long-term liabilities 1,471,000 Stockholders’ equity 4,610,660 $7,037,660 $7,037,660 An analysis of current assets discloses the following. Cash (restricted in the amount of $298,000 for plant expansion) $582,000 Investments in land 187,000 Accounts receivable less allowance of $30,000 487,000 Inventories (LIFO flow assumption) 643,000 $1,899,000 Other assets include: Prepaid expenses $62,000 Plant…