Answer:
Bank Reconciliation Statement
Balance at Bank as per updated cash book $29,950
Add Unpresented Cheques $7,100
Less Bank Lodgements not yet credited ($7,700)
Balance as per Bank Statement $29,350
Explanation:
The first step is to update the Cash Book Bank Balance as follows :
Debit :
Balance as at May 31 (un-adjusted) $30,500
Totals $30,500
Credit:
Service Charges $250
Dishonored Cheque $300
Updated Cash Book Balance (balancing figure) $29,950
Totals $30,500
The next step is to prepare a Bank Reconciliation Statement
Bank Reconciliation Statement
Balance at Bank as per updated cash book $29,950
Add Unpresented Cheques $7,100
Less Bank Lodgements not yet credited ($7,700)
Balance as per Bank Statement $29,350
The Bank Statement has an error and must be reported :
After the Error is Reported, the Bank Statement will show a Balance of $29,350.
Adjustment Being as follows,
Balance as at May $28,800
Add Back Check Mistakenly drawn against Wright’s account $550
Balance as per Bank Statement $29,350
b. $600,000
c. $610,000
d. $625,000
Answer:
d. $625,000
Explanation:
cost of goods available for sale = cost of goods manufactured during the current period + finished goods inventory at the beginning of the period
cost of goods available for sale = $600,000 + $25,000 = $625,000
cost of goods sold = cost of goods available for sale - ending inventory = $625,000 - $40,000 = $585,000
The Cost of Goods Available for Sale is calculated by adding the Beginning Inventory and the Manufacturing Costs together, resulting in a total of $625,000.
To compute the Cost of Goods Available for Sale, you would add your Beginning Inventory (the cost of the goods on hand at the start of the period) to the cost of the purchases made during the period - which, in this case, would be the manufacturing costs. Given that there were no changes in the raw materials or work in process inventory and since the manufacturing costs incurred totaled $600,000, we can outline the following:
Beginning Inventory of finished goods = $25,000
Manufacturing costs incurred = $600,000
Thus, to calculate the Cost of Goods Available for Sale:
Cost of Goods Available for Sale = Beginning Inventory + Manufacturing Costs=> $25,000 + $600,000 = $625,000
So, the Cost of Goods Available for Sale is $625,000.
#SPJ3
b. How large a gain or loss in aggregate dollar terms do market signaling studies suggest existing FARO shareholders will experience on the announcement date?
c. What percentage of the value of FARO’s existing equity prior to the announcement is this expected gain or loss?
d. At what price should FARO expect its existing shares to sell immediately after the announcement?
Answer:
a. Market signaling studies suggest that the price of existing FARO shares will fall.
b. $60,000,000
c. 8.403%
d. $38.471
Explanation:
Given
New Shares: $200,000,000
Existing Shares: $17,000,000
Price per Share: 42
a.
Because the stock of the FARO Technologies is overvalued at the current price
b.
Expected Loss: 30% * New Shares Size
New Shares Size = $200,000,000 (given)
Expected Loss = 30% * $200,000,000
Expected Loss = $60,000,000
c.
Percentage of the value of FARO’s existing equity = Ratio of New Expected Share Value to Existing Share Value
Expected Share Value = $60,000,000
Existing Share Value = Price per Shares * Existing Shares
Existing Share Value = 42 * $17,000,000
Existing Share Value = $714,000,000
Percentage of FARO's Existing Equity = $60,000,000 ÷ $714,000,000
Percentage = 8.403%
d.
The price FARO should expect its existing shares to sell
= Price per Share (1 - Percentage of Existing Equity)
Price per Share = 42
Percentage Existing Equity = 8.403%
The price FARO should expect its existing shares to sell = 42(1-8.403%)
The price FARO should expect its existing shares to sell = 42(1-0.08403)
The price FARO should expect its existing shares to sell = 42 * 0.91597
The price FARO should expect its existing shares to sell = $38.47074
The price FARO should expect its existing shares to sell = $38.471 ----- Approximated
The announcement of FARO technologies to sell new shares might decrease their share price as it might signal overvaluation to investors. Existing shareholders may thus experience a loss. The new selling price would be the original price minus the decrease caused by the announcement.
a. The market signaling theory suggests that the announcement of FARO Technologies selling new shares to raise capital could lead to a decrease in the company's share price. This is because it signals to investors that the company may be overvalued, leading them to sell their shares, thereby driving down the price.
b. For existing FARO shareholders, the aggregate dollar loss could be estimated by multiplying the decrease in share price by the number of existing shares.
c. To calculate the percentage of the value of FARO's existing equity that this represents, we could divide the total dollar loss by the company's market capitalization before the announcement, and then multiply by 100 to get a percentage.
d. After the announcement, the price that FARO should expect its shares to sell at would be the original price minus the decrease due to the announcement.
#SPJ11
Answer:
1. Overhead rate = Overhead costs / Direct material costs
Overhead rate = $684,000 / $1,900,000
Overhead rate = 0.36
Overhead rate = 36%
2. How much direct labor cost and overhead cost are assigned to this job?
Total cost of job in process $71,000
Less: Overhead applied $7,920
($22,000 * 36%)
Less: Material cost of job in process $22,000
Direct labor cost $41,080
Hence, direct labor cost is $41,080 and Overhead cost is $7,920
The predetermined overhead rate is 36%. For the last job with direct materials cost of $22,000, the direct labor cost assigned remains $210,000 and the overhead cost assigned is $7,920.
To answer your questions, first we need to determine the predetermined overhead rate which is the ratio of overhead costs to direct materials costs. Given that the total overhead costs were $684,000 and the total direct material cost was $1,900,000, the predetermined overhead rate would be $684,000 / $1,900,000 which equals approximately 0.36 or 36%.
Secondly, to calculate how much direct labor cost and overhead cost would be assigned to the last job which has a direct materials cost of $22,000: the direct labor cost remains the same as provided, which is $210,000. However, the overhead cost would be calculated by multiplying the direct materials cost of the job by the overhead rate (0.36), giving $22,000 * 0.36 = $7,920.
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Answer:
Sr. No Particulars Debit Credit
1 Finished Goods $135,600
Work In Process- Assembly department $135,600
Transferred completed goods from the Assembly department to finished goods inventory. The goods cost $135,600.
2 Account Receivable $315,000
Sales $315,000
Cost Of Goods Sold $ 175,000
Merchandise Inventory $ 175,000
Sold $315,000 of goods on credit. Their cost is $175,000.
This answer explains how to record the journal entries for the transfer of completed goods, sale of goods on credit, and cost of goods sold.
To record the transfer of completed goods from the Assembly department to finished goods inventory, you would debit Finished Goods Inventory and credit Work in Process Inventory. The journal entry would be:
Finished Goods Inventory: $135,600
Work in Process Inventory: $135,600
To record the sale of goods on credit, you would debit Accounts Receivable and credit Sales Revenue. The journal entry would be:
Accounts Receivable: $315,000
Sales Revenue: $315,000
To record the cost of goods sold, you would debit Cost of Goods Sold and credit Finished Goods Inventory. The journal entry would be:
Cost of Goods Sold: $175,000
Finished Goods Inventory: $175,000
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$15,000,000
Plant & equipment
60,000,000
Current liabilities
10,000,000
Long-term debt
40,000,000
Assume the book values of Falcon’s assets and liabilities equal their fair values. How much goodwill does Peregrine report at the date of acquisition?
$35,000,000
$40,000.000
$30,000
$0
Answer:
(It seems that the amount in question is wrongly typed as 65,000 instead of 65,000,000)
The correct answer is $40,000.000.
Explanation:
The answer is calculated from guidlines provided in IFRS 10.
As per accounting standards the price paid above fair value of net asset is taken as goodwill. Goodwill is accounted as asset in balance sheet.
As fair value is not given we will assume that book values are equal to fair value. The detail calculations are given below.
Consideration paid $ 65,000,000
FV of net asset ($ 25,000,000)
Goodwill $ 40,000,000