accounting

· 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