Question 6 (Topic 11) - 5 marks
The following information is related to Sunglow Solar Ltd:...
Question 6 (Topic 11) - 5 marks
The following information is related to Sunglow Solar Ltd:
Sales for the year ended 30 June 2019 was $1,200,000
Provision for warranties before adjustment was $36,000
At 30 June 2019, Sunglow Solar Ltd. adjusted its Provision for
Warranties so that it would be equal to 4% of sales for the year
ended on that date.
On 16 September 2019, a successful claim for warranty on faulty
goods to the cost of $700 was...
For the financial year ending 30 June 2020, Malkin Ltd has some
liability issues for which...
For the financial year ending 30 June 2020, Malkin Ltd has some
liability issues for which it seeks your help:
The company sells widgets and provides a one-year warranty.
100,000 widgets were sold for the year ended 30 June 2020, and
150,000 are expected to be sold next year. 2% of units sold are
estimated to require warranty work, at an average cost of $3 per
unit. Actual repairs incurred for units sold in the year just ended
were $1,800....
Reed Ltd is a manufacturer of surfboards which commenced
operations on 1 July 2019. The Statement...
Reed Ltd is a manufacturer of surfboards which commenced
operations on 1 July 2019. The Statement of Comprehensive Income
and the Statement of Financial Position were compiled on 30 June
2020. The following information was available:
Statement of Comprehensive Income for the year ended 30 June
2020
$ $
Sales
430,000
Less
Cost of Goods Sold
130,000
Administrative expense
70,000
Warranty expense
60,000
Depreciation- machine
40,000
Insurance expense
20,000
320,000
Profit before income tax
110,000
Following information was extracted...
The following transactions occurred between Fauci Ltd and its
wholly owned subsidiary, Gupta Ltd. All transactions...
The following transactions occurred between Fauci Ltd and its
wholly owned subsidiary, Gupta Ltd. All transactions occurred
during the year ended 30 June 2020 unless specifically stated
otherwise. The company tax rate is 30%.
Required:
Prepare the adjustment journal entries required to
eliminate the intra-group transactions in the consolidation
worksheet of Fauci Ltd Group at 30 June 2020.
Details of the transactions are provided below in
Parts A–E. Provide the journal entries in the text box below the
description of...
Epping Ltd commences operations on 1 July 2019 and presents its
first Statement of Comprehensive Income...
Epping Ltd commences operations on 1 July 2019 and presents its
first Statement of Comprehensive Income and an extract of first
Statement of Financial Position on 30 June 2020. The statements are
prepared before considering taxation. The following information is
available.
Statement of comprehensive income for the year ended 30 June
2020
Gross profit $1,200,000
Administration expenses (350,000)
Salaries (250,000)
Long-service leave (60,000)
Warranty expenses (90,000)
Depreciation expense - equipment (240,000)
Doubtful debts expense (18,000)
Rent (28,000)
Accounting profit before...
For 2017, P Co. estimated its two-year equipment warranty costs
based on $23 per unit sold...
For 2017, P Co. estimated its two-year equipment warranty costs
based on $23 per unit sold in 2017. Experience during 2018
indicated that the estimate should have been based on $25 per unit.
The effect of this $2 difference from the estimate is reported:
In 2018 income from continuing operations.
As an accounting change, net of tax, below 2018 income from
continuing operations.
As an accounting change requiring 2017 financial statements to
be restated.
As a correction of an error...
Flexi Ltd owns all the share capital of Jason Ltd. The following
transactions relate to the...
Flexi Ltd owns all the share capital of Jason Ltd. The following
transactions relate to the period ended June
2020.
On 1 July 2019, Flexi sold a motor vehicle to Jason Ltd for
$15,000. This had a carrying amount to Flexi Ltd of $12,000. Both
entities depreciate motor vehicles at a rate of 10% p.a. on
cost.
Flexi Ltd manufactures certain items which it then markets
through Jason Ltd. During the current period, Flexi sold $12,000 of
items to Launceston...
From 1 July 2019, Prowess Ltd developed and began selling a new
product, the iFeel tablet...
From 1 July 2019, Prowess Ltd developed and began selling a new
product, the iFeel tablet which was capable of responding to human
emotions. The company had previously sold computer monitors and was
excited by the prospect of branching out into a new and very
innovative product line. The company offers customers an extended
warranty period of 3 years on the iFeel tablet. At 30 June 2020,
management has estimated that two percent of products would be
returned for repair...
The accounting records of Swan Ltd recorded the following
information.
30-Jun-19
30-Jun-20
Accounts receivable
50,000
30,000...
The accounting records of Swan Ltd recorded the following
information.
30-Jun-19
30-Jun-20
Accounts receivable
50,000
30,000
Inventories
87,000
70,000
Prepaid expenses
40,000
30,000
Dividend receivable
21,000
23,000
Land
490,000
1,000,000
Property
4,000,000
4,000,000
Accounts payable for inventories purchased
70,000
80,000
Bills payable
40,000
44,000
Employee benefit liabilities
59,000
42,000
Provision for warranty
40,000
30,000
Debenture
100,000
400,000
Sales revenue
3,800,000
5,000,000
Dividend revenue
28,000
60,000
Depreciation expense
320,000
350,000
Cost of sales
3,900,000
3,500,000
Warranty expenses
80,000
100,000
Other operating...