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Income Statement, SCI adn SCE - Exercises
Accountancy and Business Management (ABM001)
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Problem 1 The incomplete records of Las Vegas Company showed the following information: Dec. 31, 2020 Dec. 31, 2019 Cash 216,000 120, Accounts receivable 362,000 240, Prepaid rent 40,000 70, Furniture and fixtures 600,000 540, Accounts payable 224,000 188, Salaries payable 52,000 14,
During 2020, the owner withdrew cash of 250,000 and made additional investments of 100,000.
Required: Determine the net income for the year 2020
Problem 2 The following changes in account balances of Bellagio Trading Company during 2020 are presented below: Assets 600,000 increase Liabilities 250,000 decrease Share capital 400,000 increase Share premium 125,000 increase
During the year, there were no other changes to retained earnings except the dividend payment of 120,000.
Required: Determine the net income for the year 2020
Problem 3 The following information was taken from Venetian Company’s accounting records for the year ended December 31, 2020: Increase in raw materials inventory 15, Decrease in finished goods inventory 35, Raw material purchases 430, Direct labor payroll 200, Factory overhead 300, Freight out 45, Increase in work in process inventory 20,
Required: What is Venetian’s cost of goods sold for 2020?
Problem 4 The following information is available for the MGM Company for the year 2020: Gross profit 962, Cost of goods manufactured 2,720, Goods in process inventory beginning 264, Finished goods inventory beginning 380, Goods in process inventory ending 324, Finished goods inventory ending 418,
Required: How much was MGM Company’s sales for the year 2020?
Problem 5 The following information for Mandalay Company pertains to the year 2020: Profit for the year was 280,000. Selling expenses were equal to 18% of sales and also equal to 30% of cost of sales. All other expenses were 12% of sales.
Required: Determine the cost of sales of Mandalay Company for the year 2020.
Problem 6 Excalibur Products had sales during 2020 of 895,000. Excalibur’s gross profit percentage is 55%. Purchases of inventory during 2020 totaled 466,250 and a count of inventory on hand at the end of the year totaled 189,500. Selling expenses are 18% of sales and general and administrative expenses are equal to 80% of selling expenses. Excalibur’s income tax rate is 30% and the company has 60,000 ordinary shares outstanding.
Required: Determine the net income (net of tax) for the year 2020
Problem 7 The following is a partial list of accounts, after adjustments, of the Luxor Company on December 31, 2020: Depreciation - building and office equipment 145, Sales commissions and salaries 182, Inventory, January 1, 2020 341, Store supplies expense 56, Retained earnings, January 1, 2020 1,785, Purchase returns and allowances 62, Bad debt expense 27, Freight in 135, Sales discounts 49, Purchases 1,730, Delivery expense 77, Office supplies expense 19, Ordinary share, 10 par 800, Share premium 650, Loss on sale of equipment 50, Insurance and taxes 85, Sales 3,529, Rent revenue 105, Office salaries 320, Advertising expense 170, Sales returns and allowances 121, Purchase discounts 41, Depreciation - store equipment 96, Discontinued operations (debit) 350, Interest expense 37, Unrealized gains and losses on financial assets at FV-OCI 50, Unrealized gains during the year on financial assets at FV-OCI 80, Actuarial gains taken to OCI 40,
The following information is also available: a. During the year, the company declared and paid 0 per share cash dividend on its 80,000 ordinary shares. b. A physical count determined that the December 31, 2020 ending inventory is 446,000. c. A typhoon destroyed a warehouse resulting in a pretax loss of 120,000. d. The debit balance in the Discontinued Operation relates to the pre-tax summarized operations and disposal of an unprofitable line of business, which the enterprise decided to discontinue on May 1, 2020. This line was considered as a cash generating unit (CGU). During the year 2020, before the unit’s actual disposal, the CGU had revenues of 900, and expenses of 1,050,000. On September 1, 2020, the net assets of the CGU were sold at a loss of 200,000. e. The company found and corrected a pretax 180,000 understatement of the 2019 depreciation expense due to a mathematical error. f. During the year, 10,000 new ordinary shares were issued at an average price of 14 per share. These amounts are already reflected in the given balances. g. The company adopts the policy of recognizing actuarial gains and losses in other comprehensive income. No actuarial gains and losses were recognized in the prior periods. h. There were no investments disposed of during the year. i. The company’s income tax rate is 30%. The company has not recorded yet the company’s income tax relating to profit or loss and to other comprehensive income.
Income Statement, SCI adn SCE - Exercises
Course: Accountancy and Business Management (ABM001)
