Prepare journal entries to record each of the following sales transactions of a merchandising company. The company uses a perpetual inventory, system and the gross method.
Apr. 1 Sold merchandise for $3„ with credit tens n130; invoice dated April 1. The cost of the merchandise is $1, Apr. 4 The customer in the April 1 sale returned $300 of merchandise for full credit. The merchandise, which had cost $100, is returned to inventory. Apr. 8 Sold merchandise for 51,000, with credit terms of 1/10, n/30; invoice dated April 8. Cost of the merchandise is $700. Apr. 11 Received payment for the amount due from the April 1 sale less the return on April 4.
Answers need to present in the point form, include 100 to 200 words for each question.
- You recently started a job as e-commerce manager for a bank. Produce a checklist of all the different legal and ethical issues that you need to check for compliance on the existing website of the bank.
- How should the e-commerce manager monitor and respond to technological innovation?
- Read the Harvey Norman Annual Report 2019 paying particular attention to the Summary of Key Business Risks outlined on pages 25-6. Additionally, you must perform a search using FACTIVA to find current news articles concerning the impact of COVID-19 on Harvey Norman Holdings’s retail operations. You are to identify and critically comment on what you perceive to be the two most critical risks facing Harvey Norman Holdings Students are encouraged to draw on the lecture, the Harvey Norman Annual Report 2019 and current news articles
- “What’s the real question we are facing here?”
- “What are the facts and circumstances that frame this problem?”
- “What are the two most critical issues relating to the use of accounting theory?
- Use question as heading and write 1 paragraph per question. Students should write paragraphs with fully formed arguments of 3-5 sentences each to answer the questions, 1 opening sentence, 1 conclusion sentence
- Student should cite at six (6) sources being: (must cite on every sentences on paragraphs)
- a. The Harvey Norman Annual Report 2019
- b. Two (2) news articles found via FACTIVA (Replace with 2 other articles)
- c. The lecture for week 4
- d. At least two other references that you found yourself.
- To show that you have used FACTIVA you need to provide a screenshot of the two articles you found as an appendix at the end of the critical reflection when submitting.
- Example:
- What is the real problem we are facing here?
- The problem is whether accounting theory can change managerial behaviour. For example, agency theory posits that managers behaviours can be controlled through bonus contracts and this impacts on accounting choices. However, according to Dumay, La Torre, and Farneti many corporate scandals are still occurring and “information asymmetry continues to exist, and society continues to mainly distrust the very institutions that should be the pillars of our modern society”. Thus, we need to critically analyse the reasons why accounting theory is not able to help build trust in modern society
The corporate governance of Harvey Normal Holdings (HVN) has often been criticised by investors. Using information from the lecture, the ASX Corporate Governance Principle and Recommendations, the HVN Corporate Governance Statement, the HVN Appendix 4G, and your research outline two current material concerns that investors might have about corporate governance in HVN.
Identify the problem: “What’s the real question we are facing here?”
Determine relevant information: “What are the facts and circumstances that frame this problem?”
Enumerate options: “What are two current material concerns that investors might have about corporate governance in HVN?
You should cite at least seven (7) sources being:
a. The lecture for Week 05
b. Two (2) news articles found via FACTIVA (replace with 2 other articles)
c. The ASX Corporate Governance Principles and Recommendations,
d. The HVN Corporate Governance Statement,
e. The HVN Appendix 4G,
f. The Dumay & Hossain 2019 paper.
Use three question as heading, answer each question with 1 paragraph ( 1 opening sentence, 4-5 supporting or evidence sentences, 1 sentence about conclusion). Answer need to be concise, clearly and logically and in-text citation on every sentences
Prepare Journal entries to record the following transactions for a retail store. The company uses a perpetual inventory system and the gross method.
Apr. 2 Purchased $4,600 of merchandise from Lyon Company with credit terms of 2/25, n/80, invoice dated April 2, and F06 shipping point. 3 Paid $300 cash for shipping charges on the April 2 purchase. • Returned to Lyon Company unacceptable merchandise that had an invoice price of $600. 17 Sent a check to Lyon Company for the April 2 purchase, net of the discount and the returns merchandise. 18 Purchased S8,500 of merchandise from Ffitt Corp. with credit terms of 1/10, n/30, invoice dated April 18, and F06 destination. 21 After negotiations, received from frist a $500 allowance toward the $8,500 owed on the April 18 purchase. 28 Stilt check to hitt paying for the April 18 purchase, net of the allowance and the discount.
Christy Albright and Dan Ralls formed the Charter Company on 11/30/2012, and chose a tax year ending on 11/30. Charter was formed to operate a restaurant (In the Charter Building at 7848 Pesca Dr., San Francisco, CA 94123) and rent out some space in the restaurant building. Charter elected to be taxed as a partnership, and the income statement for the year ending 11/30/2017 is as follows:
| Sales | $400,000 | ||||
| COGS | -150,000 | ||||
| Tax-exempt interest | 6,000 | ||||
| Interest income | 4,000 | ||||
| Dividend income from domestic corporations | 5,000 | ||||
| Nonqualified dividend income from foreign corporations | 3,000 | ||||
| Gain on sale of equipment | 10,000 | ||||
| Depreciation | -30,000 | ||||
| Repairs and maintenance | -7,000 | ||||
| Rent expense | -12,000 | ||||
| Salaries to nonpartners | -60,000 | ||||
| Salaries to partners | -30,000 | ||||
| Income from real estate rentals | 100,000 | ||||
| Expenses from real estate rentals (includes $10,000 of book depreciation) | -80,000 | ||||
| Gain on sale of stock (held | 20,000 | ||||
| Health Department fines | -2,000 | ||||
| Investment interest expense | -1,000 | ||||
| ————————————————————————————————- | |||||
| Subtotal | $176,000 |
Charter chooses the accrual method of accounting. The equipment sold was an imported oven that had been fully depreciated. It originally cost $4,000 on 5/3/2010 and was sold for $10,000 on 6/9/2017.
The tax depreciation amount for the year was $20,000, not including $14,000 of Section 179 expense that Charter chose to take on some equipment they purchased, and not including the $10,000 per year depreciation of the rental real estate, which is included in the $80,000 of costs above. (Note: according to the Form 4562 instructions, the depreciation from the rental activity would not need to be disclosed on Form 4562)
All of the $30,000 of guaranteed payments goes to Christy. Assume that 40% of the investment interest expense is nondeductible because it relates to the tax-exempt interest. The stock sold was 1000 shares of Alter Corporation, purchased on 1/20/2017 for $25,000 and sold on 4/10/2017 for $45,000.
Christy owns 60% of the partnership, and is an active partner. Christy is the Tax Matters Partner. Dan owns 40%, but is a passive, limited partner. During the year Christy was distributed $60,000 and Dan was distributed $40,000. The balance sheet of the partnership is as follows:
| Beginning | Ending | ||||
| Cash | $10,000 | $77,000 | |||
| Accounts Receivable | 10,000 | 20,000 | |||
| Inventory | 15,000 | 10,000 | |||
| Tax-exempt securities | 100,000 | 100,000 | |||
| Equipment | 90,000 | 140,000 | |||
| Accumulated depreciation | -50,000 | -66,000 | |||
| Real estate | 700,000 | 700,000 | |||
| Accumulated depreciation | -40,000 | -60,000 | |||
| Total assets | 835,000 | 921,000 | |||
| Accounts payable | 10,000 | 20,000 | |||
| Mortgages | 500,000 | 500,000 | |||
| Capital – Christy | 195,000 | 240,600 | |||
| Capital – Dan | 130,000 | 160,400 | |||
| —————————————————————————————————- | |||||
| Total liabilities and capital | $835,000 | $921,000 |
All of the $54,000 of equipment purchased this year was restaurant equipment, and was 7-year property eligible for the Section 179 deduction. Aside from the equipment expensed under Section 179, all of the new equipment was depreciated under MACRS. There is no AMT adjustment for depreciation except for the adjustment due to the current year purchases (the net adjustment for prior year purchases was zero). All of the mortgage debt is qualified nonrecourse debt, and none of it is payable in the next year.
Fill out a Form 1065 and all other appropriate forms for Charter and the related Schedules K-1 for Christy and Dan. The necessary addresses and TINs are as follows:
Christy Albright
5050 Winding Way
San Francisco, CA 94123
SS# 056-36-4498
Dan Ralls
3656 Pleasant Ridge
Lincoln, NE 68501
SS# 547-86-1154
Charter Company
7848 Pesca Dr.
San Francisco, CA 94123
EIN 85-4409231
Discuss why large companies such as Microsoft, Caterpillar, and Pepsico are organized as corporations. Disuss who would ne users of these corporations financial data.
If you buy a call option on a Birr 200,000 bond futures contract with an exercise price of 220 and the price of the Treasury bond is 222 at expiration, is the contract in the money, out of the money, or at the money? What is your profit or loss on the contract if the premium was Birr 3000?
Bolton Company’s October 31, 2017, bank statement showed a cash balance of $15,400, while the company’s general ledger Cash account for the same date showed a balance of $13,150. A bank deposit of October 31 for $1,200 does not appear on the bank statement. Cheques #150 for $980 and #169 for $2,515, both written in October, had not cleared the bank during October. Bank service charges for the month were $45. Prepare a bank reconciliation at October 31, 2017 and prepare the necessary entries.
Antara Ltd operates in the construction industry and do not prepare consolidated financialstatements. Laura Jones is the senior accountant of the company, leading the financialreporting team. As a result of being profitable for the last five years, on 1 July 2018, AntaraLtd acquired 25% of the issued ordinary shares of Blanca Ltd paying $198 000 in cash. Thisprovided Antara Ltd with the significant influence over Blanca Ltd.At the acquisition date, Laura and her team received the information below for Blanca Ltd:? Equity comprised $180 000 share capital and $144 000 retained earnings.? All identifiable assets and liabilities were recorded at their carrying amounts equal tothe fair values with the exceptions of three assets: Inventory, Land, and Equipment.Carrying Amount($)Fair Value($)Inventory 126 000 153 000Land 162 000 198 000Equipment 414 000 432 000Other information related to the above assets includes:? Blanca Ltd sold all the inventory by 30 June 2020.? After acquisition, Land was revalued by Blanca Ltd and revaluation was recognised inBlanca Ltd’s own accounting book. The company uses the revaluation model toaccount for its non-current assets. At 30 June 2019, Blanca Ltd had Land recorded at$252 000 fair value, and at 30 June 2020 at $288 000 fair value.? Blanca Ltd planned to use Equipment for another 5 years, using the straight linemethod of depreciation.During two financial years following the acquisition, Antara Ltd and Blanca Ltd carried out theinter-entity transactions below.? Antara Ltd sold a machine to Blanca Ltd for $85 000. The machine had a carrying amountof $79 600 at the time of sale on 1 January 2019. Blanca Ltd planned to use the machinefor a further 3-year with depreciation based on the straight line method.? On 15 May 2019, Antara Ltd sold inventory to Blanca Ltd for $20 800. The inventory hadcost Antara Ltd $10 000. Blanca Ltd sold half of the inventory externally by 30 June 2019.ACCT6005 Assessment 2 Case Study Brief Page 3 of 6? On 30 April 2020, Antara Ltd sold inventory to Blanca Ltd for $126 000. The profitbefore-tax of this transaction was $14 400. Blanca Ltd sold 90% of the inventoryexternally by 30 June 2020.Blanca Ltd’s balance of Retained earnings at 30 June 2019 was $306 000. Both companiesapply the tax rate of 30%.Laura approved the following consolidated statements of profit or loss and othercomprehensive incomes for Antara Ltd and Blanca Ltd for the year ended 30 June 2020. Shemade a note that the statement for Antara Ltd does not include the financial results of BlancaLtd prepared using the equity account method.Accounts Antara Ltd(consolidated)30 June 2020Blanca Ltd30 June 2020Revenues $900 000 $432 000Expenses 504 000 144 000Profit before tax 396 000 288 000Income tax expense (144 000) (90 000)Profit after tax 252 000 198 000Other comprehensive income (OCI) itemsGains on non-current asset revaluation 54 000 25 200Comprehensive income $306 000 $223 200For the financial year ended 30 June 2020, the Chief Financial Officer (CFO) of Antara Ltd hasbeen advised by the company’s auditor that the consolidated financial statements should beprepared, which include the financial results of Blanca Ltd based on the equity method. TheCFO came to Laura seeking her professional opinions regarding this matter.Laura has decided to ask you as a member of her reporting team to undertake a number oftasks to provide her with sufficient information before she responds to the CFO. The taskscomprise Part A and Part B below.Part A Practical Problem Solving (40 marks)a) Prepare the journal entries for Antara Ltd at 30 June 2020 to account for its investmentin Blanca Ltd, assuming Antara Ltd prepares consolidated financial statements.(25 marks)b) Prepare the consolidated statement of profit or loss and other comprehensiveincome for Antara Ltd for the year ended at 30 June 2020, assuming this statementincludes Blanca Ltd’s financial results. (15 marks)ACCT6005 Assessment 2 Case Study Brief Page 4 of 6Part B Recommendations (60 marks)Prepare a report explaining and making recommendations on the financial reporting issuesbelow.a) The impact of change to preparing consolidated financial statements on Antara Ltd’sdisclosure of financial information. (40 marks)Your response should include:? The differences between applying the equity method of accounting in AntaraLtd’s own accounting records, and applying the equity method of accountingin Antara Ltd’s consolidation worksheet.? The content of Antara Ltd’s relevant financial statement.? The extent of financial information available to Antara Ltd’s external users.? References to the financial information in Part A and relevant accountingstandards.b) Potential dividends paid by Blanca Ltd. This is because Blanca Ltd has been profitableand the company management plans to pay dividends to Antara Ltd.(20 marks)Your response should include:? How dividends paid by Blanca Ltd are accounted for using the equity methodof accounting.? How dividends are disclosed in Antara Ltd’s relevant financial statement.? References to the financial information in Part A and relevant accountingstandards.