ACCT-490 Accounting Homework
essay112
ACCT490-38-39-2nd-CRN-Studentsname-Assigment02.docx1. Madeena Co. acquired the right to use 1,000 acres of land in South Africa to mine for silver. The lease cost is $50,000, and the related exploration costs on the property are $100,000. Intangible development costs incurred in opening the mine are $850,000. Madeena Co. estimates that the mine will provide approximately 100,000 ounces of silver. If Madeena Co. extracts 25,000 ounces in the first year, Show the journal entry for depletion and statement of financial position to show Silver Mine.
2. Sultan Company has credit sales of $2.60 million for year 2016. On December 31, 2016, the company's Allowance for Doubtful Accounts has an unadjusted credit balance of $14,905. Sultan prepares a schedule of its December 31, 2016, accounts receivable by age. On the basis of past experience, it estimates the percent of receivables in each age category that will become uncollectible. This information is summarized here.
|
December 31, 2011 Accounts Receivable |
Age of Accounts Receivable |
Expected Percent Uncollectible |
|
$730,000 |
Not Yet Due |
1.25% |
|
354,000 |
1 to 30 days past due |
2.00% |
|
76,000 |
31 to 60 days past due |
6.50% |
|
48,000 |
61 to 90 days past due |
32.75% |
|
12,000 |
over 90 days past due |
67.00% |
Calculate:
1. Using the aging of accounts receivable method, find the estimate the required balance of the Allowance for Doubtful Accounts at December 31, 2016.
2. Prepare the adjusting entry to record bad debts.
3. Prepare the entry for Jan. 1, 2011, to record the following bond issue by SABIC. Par value = $500,000
Issue price = 92.6405 % of par value $500,000 * 92.6405%=463203
Par value Issue Value Discount Value
500000 - 463203 = 36797
Stated interest rate = 10%
Market interest rate = 12% (Bond will sell at a discount)
Interest dates = 6/30 and 12/31
Bond date = Jan. 1, 2011 Maturity date = Dec. 31, 2015 (5 years)
Pass journal entry:
1. Issued of Bond,
2. Pass entry for every six months to record the cash interest payment and the amortization of the premium.
3. Journal entry on retirement of the bond
4. The following are the financial statements of Carrefour and Walmart business groups
Income statement (Amount in Million $)
|
Account Title |
Carrefour $ |
Walmart $ |
|
Sales |
298.0 |
137.6 |
|
Cost of GS |
274.0 |
108.7 |
|
Gross profit |
24.0 |
28.9 |
|
Operating Ex |
9.6 |
22.4 |
|
Other expenses |
8.9 |
2.1 |
|
Net income |
5.5 |
4.4 |
Balance sheet (Amount in Million $)
|
Balance sheet |
Carrefour $ |
Walmart $ |
|
Current Asset |
63.5 ( Inventory 25.5) |
21.1 (Inventory 9.3) |
|
Fixed Asset |
91.5 |
28.9 |
|
Total Asset |
155.0 |
50.0 |
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Current & total Liabilities |
85.8 |
16.8 |
|
Common Stock |
69.2 |
33.2 |
|
Total Liabilities & Equity |
155.0 |
50.0 |
Analyze the financial statement using ratios and Compare & comment on the performance of both businesses under Profitability, Liquidity& Efficiency and Solvency Ratios in the format given below:
Answer…………
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Ratio |
Formulae |
Carrefour |
Wal-Mart |
Comments |
|
Profitability Ratios Gross Margin
Profit Margin
Return on Assets
Return on Equity |
Gross profit ratio =GP/Sales
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Net Income / Sales |
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Net Income/ Total Assets |
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Net Income/ Equity
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Liquidity & Efficiency Ratio Current Ratio
Sales to Assets
Inventory Turnover |
Current Assets/ Current Liabilities
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Sales / Total Assets |
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Cost of Goods Sold/ Inventory |
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Solvency ratio Debt to Equity
Equity to Assets |
Total Liabilities / Equity
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Total Equity/ Total Assets
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