On 1 July 2019, Quick Buck Ltd took control of the assets and liabilities of Eldorado Ltd. Quick Buck Ltd issued 80,000 shares having a fair value of $2.40 per share in exchange for the net assets of Eldorado Ltd. The costs of issuing the shares by Quick Buck Ltd cost $1,600. At this date the statement of financial position of Eldorado Ltd was as follows: Carrying amount Fair value Machinery $40,000 $67,000 Fixtures & fittings 60,000 68,000 Vehicles 35,000 35,000 Current assets 10,000 12,000 Current liabilities (16,000) (18,000) Total net assets $129,000 Share capital (80,000 shares at $1.00 per share) $80,000 General reserve 20,000 Retained earnings 29,000 Total equity $129,000 Required: Prepare the journal entries in the records of Quick Buck Ltd at 1 July 2019 for the acquisition. (10 marks)

Answers

Answer 1
Answer:

Answer and Explanation:

The journal entries are shown below:

1. On July 1 2019

Machinery Dr $67,000  

Fixture & Fittings Dr $68,000  

Vehicles Dr $35,000  

Current assets Dr $12,000  

Goodwill Dr $28,000  

          To Current liabilities      $18,000

          To Share Capital (80,000 × $1 ) $80,000

         To Paid in capital in excess of par 112,000  {80,000 × ($2.40 - $1)}  

(Being the acquisition is recorded)

For recording this we debited all assets as it increased the values of assets and credited the liabilities and stockholder equity as it also increased

2. On July 1 2019

Paid in capital in excess of par    $1,600  

           To Cash         $1,600

(Being the share issuance cost is recorded)

For recording this we debited the paid in capital as it reduced the stockholder equity and credited the cash as it reduced the assets  

Working notes:

For goodwill amount

= Purchase consideration - net identifiable assets

= $192,000 - $164,000

= $28,000

The net identifiable asset come from

= $67,000 + $68,000 + $35,000 + $12,000 - $18,000

= $164,000


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Sheridan Company signed a three-month, zero-interest-bearing note on November 1, 2020 for the purchase of $497000 of inventory. The face value of the note was $509000. Sheridan used a "Discount of Note Payable" account to initially record the note. Assuming that the discount will be amortized equally over the 3-month period and that there was no adjusting entry made for November, the adjusting entry made at December 31, 2020 will include aa. debit to Discount on Note Payable.b. debit to Interest Expense .c. credit to Discount on Note Payable.d. credit to Interest Expense.

Answers

Answer:

Explanation:

The journal entry to record the note payable at discount

Cash A/c Dr $497,000

Discount on Note payable A/c  Dr $12,000

               To Note Payable A/c $509,000

(Being the note payable is recorded at discount)

Now we know that the discount is for 3 months but we have to calculated for 2 months only i.e from November 1 to December 31

So, the discount would be

= $12,000 × 2 months ÷ 3 months

= $8,000

And the journal entry is

Interest Expense A/c Dr $8,000

           To Discount on Note payable A/c $8,000

(Being the interest expense is recorded)

An investor can make an investment in a real estate development and receive an expected cash return of $45,000 at the end of six years. Based on a careful study of other investment alternatives, she believes that a 9 percent annual return compounded quarterly is a reasonable return to earn on this investment. How much should she pay for it today?

Answers

Answer:

FV= 45,000

I= 9/4=2.25

N=6*4=24

PMT=0

PV=?

Put these in financial calculator

$26,381 is what she should pay for the investment today.

Explanation:

Consider the information about the economy of Pakistan. Note that the currency of Pakistan is the rupee. The government purchases: 2.80 trillions of rupees. Individuals consume: 10.50 trillions of rupees. Individuals save: 5.10 trillions of rupees. Businesses invest: 1.30 trillions of rupees. Foreigners spend: 0.64 trillions of rupees to purchase Pakistani firms. Pakistan imports: 2.09 trillions of rupees. Pakistan exports: 1.30 trillions of rupees.

Answers

Answer:

Pakistan's GDP is 13.81 trillions of rupees.

Explanation:

GDP = C + I + G + NX

Here:

C = 10.50

I = 1.30

G= 2.80

NX =  (1.30 - 2.09) = -0.79

GDP = 10.50 + 1.30 + 2.80 - 0.79

GDP = 13.81

True Fit Shoe Company makes loafers. During the most recent year. True Fit incurred total manufacturing costs of $24.500.000. Of this amount. $3,000,000 was direct materials used and $16, 800,000 was direct labor. Beginning balances for the year were Raw Materials Inventory. $900,000. Work-in-Process Inventory. $600,000; and Finished Goods Inventory. $1, 300,000. At the end of the year, balances were Raw Materials inventory. $800,000; Work-in-Process Inventory. $1, 700,000; and Finished Goods inventory. $390,000.Requirements

Analyze the inventory accounts to determine:

1. Cost of raw materials purchased during the year.
2. Cost of goods manufactured for the year.
3. Cost of goods sold for the year.
4. Cost of raw materials purchased during the year.

Answers

Answer:

Instructions are listed below.

Explanation:

Giving the following information:

True Fit incurred total manufacturing costs of $24.500.000. Of this amount. $3,000,000 was direct materials used and $16, 800,000 was direct labor. Beginning balances for the year were Raw Materials Inventory. $900,000. Work-in-Process Inventory. $600,000; and Finished Goods Inventory. $1, 300,000. At the end of the year, balances were Raw Materials inventory. $800,000; Work-in-Process Inventory. $1, 700,000; and Finished Goods inventory. $390,000.

1) Raw material used= beginning inventory + purchases - ending inventory

3,000,000= 900,000 + purchases - 800,000

2,900,000= purchases

2) cost of goods manufactured= beginning WIP + direct materials + direct labor + allocated manufacturing overhead - Ending WIP

cost of goods manufactured= 600,000 + 24,500,000 - 1,700,000= $23,400,000

3) COGS= beginning finished inventory + cost of goods manufactured - ending finished inventory

COGS= 1,300,000 + 23,400,000 - 390,000= $24,310,000

You sell short 600 shares of Microsoft that are currently selling at $25 per share. You post the 40% margin required on the short sale. If you earn no interest on the funds in your margin account, what will be your rate of return after 1 year if Microsoft is selling at $24? (Ignore any dividends.) Multiple Choice 10.00% 7.50% 17.50% 5.00%

Answers

Answer:

10.00%

Explanation:

Calculation for what will be your rate of return after 1 year if Microsoft is selling at $24

Using this formula

Rate of return = (Current price - Initial price ) /Current price *margin

Let plug in the formula

Rate of return=($25 per share-$24)/$25 per share*0.40

Rate of return=$1/10

Rate of return=0.1*100

Rate of return=10.00%

Therefore what will be your rate of return after 1 year if Microsoft is selling at $24 is 10.00%

Final answer:

In this short sale, the initial selling price of the shares was $15,000. A 40% margin was posted, amounting to $6,000. After the price dropped to $24 per share, the shares were bought back for $14,400. The profit gained, which is $600, is divided by the initial investment to obtain a rate of return of 10%.

Explanation:

In a short sale, the initial transaction involves selling a borrowed stock in the hopes of buying it back later at a lower price to earn a profit. The rate of return in a short sale is calculated using the profit earned from the short sale divided by the amount of capital invested originally.

First, we need to calculate how much the total value of the shares was at the time of selling short, so that’s 600 shares × $25/share = $15,000. You posted a 40% margin for the short sale, which means you committed $6,000 (40% of $15,000).

After one year, the Microsoft stock drops to $24 per share. At that price, you can buy back all 600 shares for 600 shares × $24/share = $14,400. The difference between the amount you sold the shares for and what you bought them back at is $15,000 - $14,400 = $600.

Now to calculate the rate of return, take the profit ($600) and divide by the amount of capital originally committed to the transaction ($6,000), so the rate of return is $600 / $6,000 = 0.10 or 10%.

Learn more about Short Selling here:

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Scenario: Kleen Waterproofing Dave Docket, the installation manager at Kleen Waterproofing, receives a high number of customer complaints that several crewmembers either come late to the job or they do not show up at all, without any communication with the customers. The job completion dates keep getting delayed, and customer dissatisfaction rate keeps increasing. Dave hires several new employees who are motivated, able to perform their jobs, and have adequate resources. However, they are not sure what tasks are included in their job. Dave wonders how he can understand what is going on with his crew behavior and what he can do to improve the situation. Dave organizes a training program for his employees to teach them how to operate the machines used for working. Which of the following attributes will show a direct improvement because of this training?
a) motivation.
b) organizational citizenship behaviors (OCB).
c) ethical sensitivity.
d) ability.

Answers

Answer:

d) ability

Explanation:

Based on the information provided regarding the scenario at hand it seems that Dave is trying to improve his employees' abilities and role-perception. Dave wants this training to allow his employees to gain the knowledge of how to operate correctly and efficiently during work-hours in order to increase overall performance and at the same time customer satisfaction.

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