Wooden Box, Corp. bought land on the outskirts of Portland, Oregon for its factory in 1912 for $10,000. The company built the factory for $100,000 and the building was fully depreciated, torn down and replaced for $350,000 about fifteen years ago, and is now right in the heart of a rehabilitation zone in the city (the city grew around it). Recently an investor approached Wooden Box, Corp. and offered to buy the factory and land for $4,000,000 because it could be turned into loft apartments. The investor presented a bone fide written offer with earnest money, but the board of the Wooden Box, Corp. refused the offer.
Assuming the building was being depreciated straight-line over 30 years with a $50,000 salvage value, accumulated depreciation would now be about $150,000.
What is the definition of fair market value, and how does it apply to this situation?
How should the building and land be shown on the balance sheet? What principle are you following in your recommendation?
Do you think the presentation that you have chosen accurately reflects the financial position of the company? If not, why did you make that choice?
Mary Coleman opened Mary’s Maids Cleaning Service on July 1, 2014. During July, the company completed the following transactions. July 1 Stockholders invested $15,000 cash in the business in exchange for common stock.1 Purchased a used truck for $10,000, paying $3,000 cash and the balance on account.3 Purchased cleaning supplies for $1,700 on account.5 Paid $1,800 on a one-year insurance policy, effective July 1.12 Billed customers $4,200 for cleaning services.18 Paid $1,000 of amount owed on truck, and $400 of amount owed on cleaning supplies.20 Paid $1,900 for employee salaries.21 Collected $2,400 from customers billed on July 12.25 Billed customers $2,100 for cleaning services.31 Paid gasoline for the month on the truck, $400.31 Declared and paid a $500 cash dividend.
Company Name: Abcde Pty Tithe company began operations as a retailer on 1 July 2017. It buys and sells one inventory stammering’s, from a leased warehouse in the outer suburbs of Melbourne. The company is registered for GST which it pays quarterly. Assume GST was last paid on 30 June. It uses the Weighted Average cost allocation method and the perpetual inventory recording method. The company uses the straight-line depreciation method for office furniture and computers and the reducing balance method for motor vehicles. The company employs two people who are rostered over a seven-day working week. The employees are paid fortnightly up to and including the day of payment. There are no penalty wages. The company has one debtor (Debtor1) and one creditor (Creditor1). Terms for all credit sales and purchases are 30 days Relevant information1.
The company has the following opening balances at the 1 July in the current financial year: Cash at Bank: $23,520.00Accounts receivable: $4,735.00Allowance for doubtful debt: $471.00Inventory: $10,060.00Motor vehicle: $20,980.00Accumulated depreciation motor vehicle: $2,127.00Accounts payable: $5,281.00Bank loan owing (due in 20 months): $12,936.00Office furniture: $10,505.00Accumulated depreciation office furniture: $1,361.00Office supplies: $648.00Share capital: $41,241.00Retained earnings: balance amount $7,031.002. Transactions for the month (all dollar amounts include GST where applicable).02 July Sales on credit 67 units05 July Sales on credit 60 units11 July Sales on credit 61 units18 July Sales on credit 62 units22 July Sales on credit 52 units29 July Sales on credit 51 units08 July Paid Wages (ignore PAYG tax) $2,455.0022 July Paid Wages (ignore PAYG tax) $2,024.0013 July Paid rent for the current month $2,318.0025 July Paid insurance $1,629.0002 July Received advertising invoice (due in 30 days) $544.0029 July Purchased computer on credit $2,216.0007 July Purchased inventory on credit 24 units at the cost per unit of $28.0014 July Purchased inventory on credit 28 units at the cost per unit of $25.0020 July Purchased inventory on credit 30 units at the cost per unit of $27.0024 July Purchased inventory on credit 28 units at the cost per unit of $25.0030 July Purchased inventory on credit 28 units at the cost per unit of $25.0026 July Received payment from accounts receivable $1,016.0028 July Received payment from accounts receivable $864.0018 July Received payment from accounts receivable $922.0003 July Purchased office supplies on credit $699.0015 July Paid motor vehicle expenses $107.0010 July Paid accounts payable $1,447.0024 July Paid accounts payable $1,050.0008 July Paid accounts payable $809.003. Additional information: Selling Price per unit (GST inclusive) $55.00Insurance paid from the first of the current month and for: 10 months in total. Insurance commences from the first of the month in which it is paid. All asset purchases and expenses except wages include Scots of opening inventory items per unit $20.00Depreciation rate motor vehicle 20%Residual value motor vehicle: $2,285.00Depreciation rate office furniture 20%Residual value office furniture: $595.00Regardless of purchase date, company policy is to depreciate new assets for 15 days in the month of purchase. Depreciation rate computer 35%No residual value is expected for computers. The company counted inventory at the end of the month. They discovered that 8 units were missing and these must be removed from inventory. Office supplies on hand at end of the month were $202.00At the end of the month the company records potential bad debts expense using the percentage of sales method. The business uses 1% of sales to determine estimated bad debts. Interest owing on the bank loan at the end of the month is $60.00SORT THE TRANSACTIONS IN DATE ORDER. This is critically important for any inventory transactions (sales and purchases) as the value of inventory is calculated using the moving weighted average method. • Using the PROFORMA available on Cloud Deakin, manually prepare general journal entries to enter all relevant July transactions (including the opening entry and all adjusting entries).
Narrations are required. The PROFORMA document is located in the ‘Assessment Task 3’ folder. Note: closing entries are not required. • Using the format in the PROFORMA document, prepare a stockcar for the month (this is required to help you track inventory movements and calculate COS) using the moving weighted average cost method. • Post all journals to the ledger. • Prepare an adjusted trial balance. Submission Instructions1. This assignment is to be submitted ONLINE ONLY (You are NOT required to submit a hardcopy).2. You must type your answer onto the PROFORMA document provided for the manual set.3. The completed PROFORMA for the manual set must be submitted to the Assignment Droboxes Cloud Deakin under the Assessment folder.4. You are not required to upload an Assignment Cover Sheet. You will complete a Plagiarism declaration when you access the Dropbox.5.
You are allowed to make resubmissions within the submission period. Please note that your last submission overwrites previous submissions, however, this must be submitted before the DUE DATE. You must keep a backup copy of every assignment you submit until the marked assignment has-been returned to you. In the unlikely event that one of your assignments is misplaced, you will need to submit your backup copy. Any work you submit may be checked by electronic or other means for the purposes of detecting collusion and/or plagiarism. When you are required to submit an assignment through your Cloud Deakin unit site, you will receive an email to your Deakin email address confirming that it has been submitted. You should check that you can see your assignment in the Submissions view of the Assignment drop box folder after upload, and check for, and keep, the email receipt for the submission. Submitting Assessment Task 3YOU WILL BE SUBMITTING 4 FILES FOR ASSESSMENT TASK 3 -1. Proforma general journal entries2. Stockcard3. General Ledger4. Adjusted Trial Balance The assessment task must be submitted before 08:00 PM AEST Friday 18 September2020. Only the online submissions via Cloud Deakin within the submission period will be
Required: Complete the excel sheet as attached with links and Finalize the TRIAL BALANCE AS ON 30th June Penny White is a sole trader who operates Penny’s Patchworks, a wholesale business selling old fashioned patchwork quilts to retail bedding and linen shops in Tasmania, and on the internet. Penny operates her business from a small, rented warehouse in Hobart. Penny’s Patchworks is not registered for GST (you can therefore Ignore GST when recording transactions). She employs a casual worker for four days a week. Penny’s bookkeeper has just retired and she asks you if you can help her to record the transactions for June. As you are studying accounting, she also asks you to finish off the books for the year and prepare some financial statements for her. She is thinking of expanding and needs the statements to apply for a bank loan. The bookkeeper has been keeping the records manually but Penny is keen for you to use Excel to complete the various records each month. Other Information: • Penny sells two products, the Country Garden Quilt and the Crazy Patchwork Quilt. • She uses a perpetual inventory system and the First-in, First-out method to assign costs to Cost of Goods Sold. • Prepayments (prepaid expenses or unearned revenue) are treated as an Asset or Liability when paid. • Assume transactions are on credit unless it is stated otherwise. • All transactions are recorded on the day they occur. • For convenience, round all figures to the nearest dollar (you can get Excel to do this for you by showing no cents). Below you will find the schedules of balances from the subsidiary ledgers, the Bank Reconciliation Statement and the Trial Balance from the end of May 2019. These are followed by the transactions for the month of June, which you are to record, and the June Bank Statement received by Penny from her bank.