The financial statements of Magnotta Winery Corporation report net sales of $23,223,804 for its year ended January 31, 20ll. Accounts receivable are $616,797 at January 31, 2011, and $590,322 at January 31, 2010. Calculate the company's accounts receivable turnover ratio and the average collection period for accounts receivable in days.
> At the beginning of 2014, Kao Company, a small private company, acquired a mine for $850,000. Of this amount, $100,000 was allocated to the land value and the remaining portion to the minerals in the mine. Surveys conducted by geologists found that appro
> Gamma Corp. invested in a three-year, $ 100 face value 6% bond, paying $ 105.55. At this price, the bond will yield a 4% return. Interest is payable annually. (a) Prepare a bond premiun1 amortization table for Gamma Corp. assuming Gamma uses the effectiv
> Since 1996, Nike, Inc. has had endorsement contracts with Tiger Woods and some of the world's best known athletes. For example, Nike has been able to gain the rights to use Tiger Woods's name in advertising promotions and on Nike Golf apparel, footwear,
> Topaz Inc. has accounts receivable terms of 2/10, n/30. In the past, 50% of Topaz's customers have taken advantage of the discount and paid within 10 days of the invoice date, and the remaining 50% of customers have paid in full within 30 days of the inv
> Chessman Corporation factors $600,000 of accounts receivable with Liquidity Financing, Inc. on a with recourse basis. Liquidity Financing will collect the receivables. The receivable records are transferred to Liquidity Financing on August 15, 2014. Liqu
> Landstalker Enterprises sold $750,000 of accounts receivable to Leander Factors, Inc. on a without recourse basis under IFRS, as the risks and rewards have been transferred to Leander. The transaction meets the criteria for a sale, and no asset or liabil
> The following information is for the inventory of mini kettles at Funnell Company Limited for the month of May: Instructions (a) Assuming that the periodic inventory method is used, calculate the inventory cost at May 31 under each of the following cost
> On October 1, 2014, Alpha Inc. assigns $2 million of its accounts receivable to Alberta Provincial Bank as collateral for a $1.6-million loan evidenced by a note. The bank's charges are as follows: a finance charge of 4% of the assigned receivables and a
> The Patchwork Corporation manufactures sweaters for sale to athletic-wear retailers. The following information was available on Patchwork for the years ended December 31, 2013, and 2014: During 2014, Patchwork had the following transactions: 1. On June
> The Cormier Corporation sells office equipment and supplies to many organizations in the city and surrounding area on contract terms of 2/10, n/30. In the past, over 75% of the credit customers have taken advantage of the discount by paying within 10 day
> In 2014, Ibran Corp. required additional cash for its business. Management decided to use accounts receivable to raise the additional cash and has asked you to determine the income statement effects of the following transactions: l. On July 1, 2014, Ibr
> Logo Limited follows ASPE. It manufactures sweatshirts for sale to athletic-wear retailers. The following summary information was available for Logo for the year ended December 31, 2013: Part 1 1. Total sales were $465,000. Of the total sales amount, $21
> Boyko Company received an order from Lister Inc. on May 15, 2014, valued at 52,200. Boyko shipped the goods to Lister on May 31, 2014, with terms f.o.b. shipping point, and credit terms 2/10, n/30. Assuming Boyko uses the gross method of recording sales;
> Desrosiers Ltd. had the following long-term receivable account balances at December 31, 2013: Notes receivable $1,800,000 Notes receivable-Employees 400,000 Transactions during 2014 and other information relating to Desrosiers' long-term recei
> On December 31, 2014, Zhang Ltd. rendered services to Beggy Corp. at an agreed price of $91,844.10. In payment, Zhang accepted $36,000 cash and agreed to receive the balance in four equal installments of $18,000 that are due each December 31. An interest
> On October 1, 2014, Healy Farm Equipment Corp. sold a harvesting machine to Homestead industries. Instead of a cash payment, Homestead Industries gave Healy Farm Equipment a $150,000, two-year, 10% note; 10% is a realistic rate for a note of this type. T
> The statement of financial position of Reynolds Corp. at December 31, 2013, includes the following: Transactions in 2014 include the following: 1. Accounts receivable of $138,000 were collected. This amount includes gross accounts of $40,000 on which 2%
> On June 3, Arnold Limited sold to Chester Arthur merchandise having a sale price of $3,000 with terms 3/10, n/60, f.o.b. shipping point. A $90 invoice, terms n/30, was received by Chester on June 8 from John Booth Transport Service for the freight cost.
> By December 31, 2013, Clearing Corp. had performed a significant amount of environmental consulting services for Rank Ltd. Rank was short of cash, and Clearing agreed to accept a $200,000, non- interest-bearing note due December 31, 2015, as payment in f
> At December 31, 2014, Ichor Ltd. has outstanding non-cancellable purchase commitments for 45,500 litres of raw material at S3.25 per litre. The material will be used in Ichor's manufacturing process, and the company prices its raw materials inventory at
> Information from Salini Computers Ltd. follows: Instructions (a) Prepare the entries for Salini Computers Ltd., assuming the gross method is used to record sales and cash discounts. (b) Prepare the entries for Salini Computers Ltd., assuming the net met
> Your accounts receivable clerk, Mitra Adams, to whom you pay a salary of $1,500 per month, has just purchased a new Cadillac. You have decided to test the accuracy of the accounts receivable balance of $86,500 shown in the general ledger. The following i
> Theriault Inc. shows a balance of $420,289 in the Accounts Receivable account on December 31, 2014. The balance consists of the following: Instructions Show how the information above should be presented on the statement of financial position of Theriaul
> Several independent situations follow. l. Chequing account balance $625,000; certificate of deposit $1.1 million; cash advance to subsidiary $980,000; utility deposit paid to gas company $ 180. 2. Chequing account balance $500,000; overdraft in special c
> The controller for Eastwood Co. is trying to determine the amount of cash to report on the December 31, 2014 statement of financial position. The following information is provided: 1. A commercial savings account with $600,000 and a commercial chequing
> Staj Co., a clothing manufacturer, is preparing its statement of financial position at December 31, 2014. For each of the following amounts as of December 31, 2014, indicate whether the amount is (a) current or non-current and (b) a trade receivable, a n
> Ling Corp. deposits all receipts intact and makes all payments by cheque. The following information is available from the cash records: Instructions (a) Keeping in mind the time lag between deposits and cheques being recorded in the books and when they
> Kali Corp. established a petty cash fund early in 2014 to increase the efficiency of accounting for small cash transactions and to improve control over many of the small expenditures it makes. The company decided to set up the impress fund at $200 and a
> The Becker Milk Company Limited, a real estate and investment management company, reports the following information in its financial statements for the years ended April 30, 2011, 2010, and 2009: Note 8: Revenue As of April 30, 2011, the company's large
> Refer to the 2011 annual report of Canadian Tire Corporation, Limited available on SEDAR (www.sedar.com) or the company's website (www.canadiantire.ca). Note that the company provides a 10-year financial review at the end of its annual report. This summa
> Information follows for Patuanak Company: 1. The beginning of the year Accounts Receivable balance was 525,000. 2. Net sales for the year were $410,000. (Credit sales were $200,000 of the total sales.) Patuanak does not offer cash discounts. 3. Collectio
> The following information is for Takin Enterprises Ltd. Instructions (a) Using the above information, prepare monthly income statements (as far as the data permit) in columnar form for February, March, and April. Show the inventory in the statement at c
> Lute Retail Ltd. follows ASPE, it transfers $355,000 of its accounts receivable to an independent trust in a securitization transaction on July 11, 2014, receiving 96% of the receivables balance as proceeds. Lute will continue to manage the customer acco
> The trial balance before adjustment for Sinatra Company shows the following balances. The following cases are independent: 1. To obtain cash, Sinatra factors without recourse $20,000 of receivables with Stills Finance. The finance charge is 10% of the a
> On April 1, 2014, Ibrahim Corporation assigns $400,000 of its accounts receivable to First National Bank as collateral for a $200,000 loan that is due July 1, 2014. The assignment agreement calls for Ibrahim to continue to collect the receivables. First
> On July 1, 2014, Agincourt Inc. made two sales: 1. It sold excess land in exchange for a four-year, non-interest-bearing promissory note in the face amount of $1,101,460. The land's carrying value is $590,000. 2. It rendered services in exchange for an
> On September 1, 2014, Myo Inc. sold goods to Khin Corporation, a new customer. Prior to shipment of the goods, Myo's credit and collections department conducted a procedural credit check and determined that Khin is a high credit risk customer. As a resul
> Little Corp. was experiencing cash flow problems and was unable to pay its $ 105,000 account payable to Big Corp. when it fell due on September 30, 2014. Big agreed to substitute a one-year note for the open account. The following two options were presen
> Stowe Enterprises owns the following assets at December 31, 2014: If Stowe follows ASPE, what amount should be reported as cash and cash equivalents? Explain how your answer would differ if Stowe followed IFRS. Cash in bank savings account Cash on h
> Lenai Co. has the following account among its trade receivables: Instructions Age the Hopkins Co. account at December 31 and specify any items that may need particular attention at year end. 1/1 1/20 3/14 4/12 9/5 10/17 11/18 12/20 Hopkins Co. $ 850
> Bartho Products sold used equipment with a cost of $15,000 and a carrying amount of $2,500 to Vardy Corp. in exchange for a $5,000, three-year non-interest-bearing note receivable. Although no interest was specifed, the market rate for a Joan of that ris
> The chief accountant for Dickinson Corporation provides you with the following list of accounts receivable that were written off in the current year: Dickinson Corporation follows the policy of debiting Bad Debt Expense as accounts are written off. The
> At January 1, 2014, the credit balance of Andy Corp.'s Allowance for Doubtful Accounts was $400,000. During 2014, the bad debt expense entry was based on a percentage of net credit sales. Net sales for 2014 were $80 million, of which 90% were on account.
> As a result of its annual inventory count, Tarweed Corp. determined its ending inventory at cost and at lower of cost and net realizable value at December 31, 2014, and December 31, 2015. This information is as follows: Instructions (a) Prepare the jour
> At the end of 2013, Perez Corporation has accounts receivable of $1.2 million and an allowance for doubtful accounts of $80,000. On January 16, 2014, Perez determined that its $ 16,000 receivable from Morganfield Ltd. will not be collected, and managemen
> Eli Corp. has just received its August 31, 2014 bank statement, which is summarized as follows: The general ledger Cash account contained the following entries for the month of August: Deposits in transit at August 31 are $3,800, and cheques outstandin
> Use the information for Jaguar Corporation in BE7-25. Prepare any entries that are necessary to make Jaguar's accounting records correct and complete. In BE7-25. Jaguar Corporation is preparing a bank reconciliation and has identified the following poten
> Jaguar Corporation is preparing a bank reconciliation and has identified the following potential reconciling items. For each item, indicate if it is (a) Added to the balance per bank statement, (b) Deducted from the balance per bank statement, (c) Add
> The financial statements of BCE Inc. report net sales of $ 19,497 million for its year ended December 31, 2011, and $18,069 million for its year ended December 31, 2010. Accounts receivable (net) was $2,964 million at December 31, 2011, $2,525 million at
> Keyser Woodcrafters sells $600,000 of receivables with a fair value of $620,000 to Keyser Trust in a securitization transaction that meets the criteria for a sale. Keyser Woodcrafters receives full fair value for the receivables and agrees to continue to
> Stora Enso Oyj describes its business in its annual report as the "global rethinker of the biomaterials, paper, packaging and wood products industry." Instructions Access the financial statements of Stora Enso Oyj for the year ended December 31, 2011, f
> Identify a company in your local community that develops a product through some form of manufacturing process. Consider a farming operation, bakery, cement supplier, or other company that converts or assembles inputs to develop a different product. Inst
> From SEDAR (www.sedar.com), or the company websites, access the financial statements of Loblaw Companies Limited for its year ended December 31, 2011, and of Empire Company Limited for its year ended May 5, 2012. Review the financial statements and answe
> Access the annual financial statements of Andrew Peller Limited for the year ended March 31, 2012, on SEDAR (www.sedar.com), or the company's website (www.andrewpeller.com). Instructions Refer to these financial statements and the accompanying notes to
> Many companies, such as HydroMississauga and Matsushita Electric of Canada Ltd., have Invested in technology to improve their inventory management systems. Instructions Research the topic of improvements to inventory management systems, and focus in par
> Jack McDowell, the controller for McDowell Lumber Corporation, has recently hired you as assistant controller. He wishes to determine your expertise in the area of inventory accounting and therefore asks you to answer the following unrelated questions.
> Schonfeld Corporation began operations on December 1, 2014. The only inventory transaction in 2014 was the purchase of inventory on December 10, 2014, at a cost of $20 per unit. None of this inventory was sold in 2014. Relevant information for fiscal 201
> Assume the role of the ethical accountant. The company you work for manufactures pharmaceuticals and has a large stock of inventory for a new drug as the fiscal year end approaches. The company has a compensation system that relies partially on individua
> IFRS requires greater disclosure for inventory compared with ASPE. List the additional requirements and explain what benefit each one might serve for the users of the financial statements.
> Write a brief essay highlighting the differences between IFRS and ASPE noted in this chapter, discussing the conceptual justification for each.
> There are many forms of inventory that are not covered under the basic accounting standards for inventory: Instructions For each of the following forms of inventory, briefly explain how the inventory would be reported and where guidance would be found
> Lin Du Corp. lent $30,053 to Prefax Ltd., accepting Prefax's $40,000, three-year, zero-interest-bearing note. The implied interest is 10%. (a) Prepare Lin Du’s journal entries for the initial transaction, recognition of interest each year assuming use o
> PERO Lun1ber Limited is a private company. It operates in the forestry sector and owns timber lots. The company produces and sells specialty lumber to distributors and retailers. The company has a management bonus plan, which is based on net earnings and
> Local Drilling Inc. is a Canadian drilling-site company. All of the company's drilling material is purchased by the head office and stored at a local warehouse before being shipped to the drilling sites. The price of drilling material has been steadily d
> Grappa Grapes Inc. (GGI) grows grapes and produces fine champagne. The company is located in a very old area of town with easy access to fertile farmland that is excellent for growing grapes. It is owned by the Grappa family. The company has been in oper
> Findit Gold Inc. (FGI) was created in 2005 and is 25% owned by Findit Mining Corporation (FMC). FGI's shares trade on the local exchange and its objective is to become a substantial low-cost mineral producer in developing countries. FMC has provided subs
> Tobacco Group Inc. (TGI) is in the consumer packaged goods industry. Its shares are widely held and key shareholders include several very large pension funds. In the current year, 59% of the net revenues and 61% of operating income came from tobacco prod
> Aquind Corporation is a multi -product firm. The following information concerns one of its products, the Trinton: Instructions Calculate cost of goods sold, assuming Aquind uses: (a) A periodic inventory system and FIFO cost formula (b) A periodic inven
> Some of the transactions of Spandrel Corp. during August follow. Spandrel uses the periodic inventory method. Instructions (a) Assuming that purchases are recorded at gross amounts and that discounts are to be recorded when taken: 1. Prepare general jou
> Halm Skidoos Limited, a private company that began operations in 2010, always values its inventories at their current net realizable value. The company uses ASPE. Its annual inventory figure is arrived at by taking a physical count and then pricing each
> On February 1, 2014, Quass Ltd. began selling electric scooters that it purchased exclusively from lonone Motors Inc. Ionone Motors offers vendor rebates based on the volume of annual sales to its customers, and calculates and pays the rebates at its fis
> The following independent situations relate to inventory accounting: 1. Draper Co. purchased goods with a list price of $175,000 and a trade discount of 20% based on the quantity purchased, with terms 2/10, net 30. 2. Assayer Company's inventory of $1.1
> Aero Acrobats lent $47,573 to Afterburner Limited, accepting Afterburner's $49,000, three-month, zero interest-bearing notes. The implied interest is approximately 12%. Prepare Aero’s journal entries for the initial transaction and the collection of $49,
> The records for the Clothing Department of Ji-Woon's Department Store are summarized as follows for the month of January: 1. Inventory, January 1: at retail, $28,000; at cost, $l8, 000 2. Purchases in January: at retail, $147,000; at cost, $110,000 3. Fr
> The Eserine Wood Corporation manufactures desks. Most of the company's desks are standard models that are sold at catalogue prices. At December 31, 2014, the following finished desks appear in the company's inventory: The 2014 catalogue was in effect th
> Sube Specialty Corp., a division of FH Inc., manufactures three models of gearshift components for bicycles that are sold to bicycle manufacturers, retailers, and catalogue outlets. Since beginning operations in 1969, Sube has used normal absorption cost
> During 2014, Jinnah Furniture Limited purchased a railway carload of wicker chairs. The manufacturer of the chairs sold them to Jinnah for a lump sum of $59,850 because it was discontinuing manufacturing operations and wanted to dispose of its entire sto
> Reena Corp. lost most of its inventory in a fire in December just before the year-end physical inventory was taken. The corporation's books disclosed the following: Merchandise with a selling price of $42,000 remained undamaged after the fire. Damaged m
> Schonfeld Company determined its ending inventory at cost and at lower of cost and net realizable value at December 31, 2012, 2013, and 2014, as follows: Instructions (a) Prepare the journal entries that are required at December 31, 2013 and 2014, assum
> Astro Languet established Languet Products Co. as a sole proprietorship on January 5, 2014. At the company's year end of December 31, 2014, the accounts had the following balances (in thousands): A count of ending inventory on December 31, 2014, showed
> The summary financial statements of KwikMart Ltd. on December 31, 2014, are as follows: The following errors were made by the inexperienced accountant on December 31, 2013, and were not corrected. l. The inventory was overstated by $ 13,000. 2. A prepai
> Jaeco Corporation asks you to review its December 31, 2014 inventory values and prepare the necessary adjustments to the books. The following information is given to you. 1. Jaeco uses the periodic method of recording inventory. A physical count reveals
> Emil Family Importers sold goods to Acme Decorators for $20,000 on November 1, 2014, accepting Acme's $20,000, six-month, 6% note. (a) Prepare Emil’s; November 1 entry, December 31 annual adjusting entry, and May 1 entry for the collection of the note a
> The Motuto Equipment Corporation maintains a general ledger account for each class of inventory, debiting the individual accounts for increases during the period and crediting them for decreases. The transactions that follow are for the Raw Materials inv
> In an annual audit of Solaro Company Limited, you find that a physical inventory count on December 31, 2014, showed merchandise of $441,000. You also discover the following items were excluded from the $441,000. 1. Merchandise of $61,000 is held by Solar
> Transactions follow for Whitehall Limited: March 10 Purchased goods billed at $25,000, terms 3/10, n/60. 11 Purchased goods billed at $26,575, terms 1115, n/30. 19 Paid invoice of March 10. 24 Purchased goods billed at $11,500, terms 3/10, n/30. Instruc
> In fiscal 2014, lvanjoh Realty Corporation purchased unimproved land for $55,000. The land was improved and subdivided into building lots at an additional cost of $34,460. These building lots were all the same size but, because of differences in location
> Two or more items are omitted in each of the following tabulations of income statement data. Fill in the amounts that are missing. 2013 2014 2015 $290,000 6,000 $. 13,000 347,000 32,000 Sales $410,000 Sales returns Net sales Beginning inventory Endi
> Ruggers Corporation sells one product, with information for July as follows: Ruggers uses the FIFO cost formula. All purchases and sales are on account. Instructions (a) Assume Ruggers uses a periodic system. Prepare all necessary journal entries, incl
> There are a few primary sources of GAAP for inventory under both ASPE and IFRS. List the sources of guidance in the table below. Type of Inventory Primary Guidance under ASPE Primary Guidance under IFRS Equipment manufactured Financial derivatives he
> Nicholas's Christmas Tree Farm Ltd. grows pine, fir, and spruce trees. The farm cuts and sells trees during the Christmas season and exports most of the trees to the United States. The remaining trees are sold to local tree lot operators. It normally tak
> The records of Monde Menswear report the following data for the month of September: Instructions (a) Estimate the ending inventory using the conventional retail inventory method. (b) Assuming that a physical count of the inventory determined that the ac
> Iqbal Corporation uses the lower of FIFO cost and net realizable value method on an individual item basis, applying the direct method. The inventory at December 31, 2014, included product AG. Relevant per-unit data for product AG follow: There were 1,00
> The net income per books of Lyondell Industries Limited was determined without any knowledge of the following errors. The 2008 year was Lyondell's first year in business. No dividends have been declared or paid. Instructions (a) Prepare a work sheet to
> Eureka Limited has a calendar-year accounting period. The following errors were discovered in 2014. 1. The December 31, 2012 merchandise inventory had been understated by $51,000. 2. Merchandise purchased on account in 2013 was recorded on the books for
> Salan1ander Limited makes the following errors during the current year. Each error is an independent case. l. Ending inventory is overstated by $1,020, but purchases are recorded correctly. 2. Both ending inventory and a purchase on account are understat
> The following is a list of items that may or may not be reported as inventory in Keesa Corp.'s December 31 balance sheet: l. Goods out on consignment at another company's store 2. Goods sold on an installment basis 3. Goods purchased FOB shipping point t
> Moorea Corp. uses a periodic inventory system. On June 24, the company sold 600 units. The following additional information is available: (a) Calculate the June 30 inventory and the June cost of goods sold using the weighted average cost formula. (b) Cal
> Garners World buys 1,000 computer game CDs from a distributor that is discontinuing those games. The purchase price for the lot is $7,500. Garners' World will group the CDs into three price categories for resale, as follows: Determine the cost per CD for
> Angus Enterprises Ltd. reported cost of goods sold for 2014 of $2.4 million and retained earnings of $4.2 million at December 31, 2014. Angus later discovered that it’s ending inventories at December 31, 2013 and 2014 were overstated by $155,000 and $45,
