20 Dec · Individual task · You must answer all the questions. · When solving problems, you must clearly explain all the steps you are doing, and why are you making those steps.

· Individual task

 

· You must answer all the questions.

 

· When solving problems, you must clearly explain all the steps you are doing, and why are you making those steps.

 

· Show all your workings, a numeric answer is not enough.

 

· You should send an excel file with all of the workings.

 

Formalities:

 

· Use one page per answer.

 

· Cover, Table of Contents, References and Appendix are excluded of the total wordcount.

 

· Font: Arial 12,5 pts.

 

· Text alignment: Justified.

 

Assignment:

 

Problem 1

 

On April 2, 2017, AlJalai Inc. acquired a new machine. The cost was $180,000 with a residual value of $20,000 at the end of its estimated useful lifetime of 5 years.

 

Instructions

 

a. Prepare a complete depreciation schedule, beginning with calendar year 2017, under each of the methods listed below (with fractional years rounded to the nearest whole month):

 

1. Straight-line (10 points)

 

2. 200 percent declining-balance (10 points)

 

3. 150 percent declining-balance (10 points)

 

b. Assume that AlJalai Inc. sells the machine on December 31, 2019, for $75,000 cash. Compute the resulting gain or loss from this sale under each of the depreciation methods used in part a. (5 points)

 

Problem 2 (1) On 31 December 2017, Durango Company incurs a 25-year $750,000 mortgage liability in conjunction with the purchase of an apartment. This mortgage is payable in equal monthly installments of $7.899,18 which include interest computed at an annual rate of 12%. The first monthly payment is made on 30 January 2018. This mortgage is fully amortizing over 300 months. (a) Complete the amortization table for the first four payments by entering the correct dollar amounts in the blank spaces provided. (15 points) Round to the nearest dollar.

 

 

 

 

 

 

 

 

 

 

 

 

 

Reduction in

 

 

 

Interest

 

Payment

 

Monthly

 

Interest

 

Unpaid

 

Unpaid

 

Period

 

Date

 

Payment

 

Expense

 

Balance

 

Balance

 

Issue date

 

1

 

2

 

3

 

4

 

(b) Record the first payment in the general journal. (10 points)

 

Date

 

Account Titles and Explanation

 

Debit

 

Credit

 

Problem 3(40 points)

 

Find below a trial balance for company Stillson for the years 2020 and 2021.

 

Please prepare Income Statement for the year 2021, and closing Balance Sheet for years 2020 and 2021.

 

Prepare Cash Flow statement for the year 2021.

 

What is the difference between Net income and Cash Flow?, explain in detail and show relevant numbers and calculations.

 

Trial Balance

 

2020

 

2021

 

 

 

Debit

 

Credit

 

Debit

 

Credit

 

Fixed assets

 

681.471

 

 

 

756.711

 

 

 

Accounts receivable

 

40.129

 

 

 

51.194

 

 

 

Inventories

 

31.100

 

 

 

39.675

 

 

 

Cash

 

325.077

 

 

 

637.972

 

 

 

Accounts payable

 

 

 

74.915

 

 

 

154.202

 

Capital Stock

 

 

 

764.821

 

 

 

764.821

 

Retained Earnings

 

 

 

 

 

 

 

238.041

 

sales

 

 

 

1.464.706

 

 

 

1.868.577

 

COGS

 

454.059

 

 

 

579.259

 

 

 

Direct labor expenses

 

249.000

 

 

 

317.658

 

 

 

Depreciation expenses

 

75.000

 

 

 

111.618

 

 

 

Utilities expenses

 

17.088

 

 

 

21.800

 

 

 

Sales & marketing expenses

 

73.235

 

 

 

93.429

 

 

 

Administration Expenses

 

278.936

 

 

 

306.829

 

 

 

Tax expenses

 

79.347

 

 

 

109.496

 

 

 

Total

 

2.304.442

 

2.304.442

 

3.025.641

 

3.025.641