Excel IAF310 N1N Term Test1

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School

Seneca College *

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IAF310

Subject

Accounting

Date

Apr 3, 2024

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xlsx

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EXAM Subject Code: IAF310N1N Subject Name: Intermediate Accounting Instructor: Exam Date: Time Allotted: 90 minutes Marks Allotted: 50 marks Weighting: 15% [Additional Information] Approved by: Date: STUDENT NAME: STUDENT I.D. NUMBER: ALLOWABLE EXAMINATION AIDS: Academic Integrity Policy Statement Seneca upholds a learning community that values academic integrity, honesty, fair courage. These values enhance Seneca’s commitment to students by delivering hi excellence, while supporting a positive learning environment. 2.3 Should there be suspected violation of this policy (e.g. contract cheating, falsifi academic integrity sanctions will be applied according to the severity of the offence academic Policy for the academic integrity sanctions. http://www.senecacollege.ca

Answer Question here Incorporation All revenue and expenses will be under the same com Shares can be divided equally or seperately dependin All parties can receive salary and dividends based off Can only expense a certain portion of expenses per pe Partnership Revenues and expenses made by that colleague only Shared expense of common staff and space Can expense a lot more as compared to as a whole co I would choose partnership because in a partnership c Partnership would also reduce arguments of who is m In a partnership each party contributes the same amo so there is less likely to be issues with who is pulling t Question 1:7 marks You are a newly designated CPA and are contemplating opening your own graduating class. The three of you have been debating what type of busin liability and want to have some flexibility for tax planning purposes. You s but one of your colleagues is equally sure that the only available option is consult with your former law professor to determine what business struct What do you discover as part of your research? What option should be ch Question 2 (10 marks) Amos Ltd., a private company based in Vancouver, decided to sell its Industrial Des

Answer Question here Amos Ltd Partial Income For the Year Ended D Net Income from continuing operations (after-tax) Income from discontinue operations (after ta Expenses incurred by discontinued operation Net income from discontinued operations Proceeds from disposition of discontinued op Legal fees (after tax) Severance payments Net Income from disposition Net Income, December 31, 2023 As the disposal of the division has been finali earned by the division can be treated as disco The sale will yield a loss of $37,000 yielding a Adjustments may need to be made when the Amos Ltd., a private company based in Vancouver, decided to sell its Industrial Des put in place. At the end of 2023, the plan was finalized and approved by the board Other information: 1. Amos's 2023 after-tax net income (excluding the results from the Industrial De 2. During the year, the division reported an after-tax loss of $120,000 (revenues: 3. Management estimates that after-tax legal fees of $32,000 as well as after-tax costs is expected to be offset by the after-tax proceeds of $61,000 from the sale of Instructions Assuming the Industrial Design Division qualifies for treatment as a discontinued o income from continuing operations and include an appropriate footnote pertaining

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Answer Question here Sharma Lt Statement of Share For the Year Ended D Common Shares Retained Earnings(1) Accumulated OCI (2) Total Shareholders' Equity (1) Retained Earnings, January 1, 2023 Add:Net Income Retained Earnings, December 31, 2023 (2) Accumulated OCI, January 1, 2023 Add: OCI for the year Question 3 (10 marks) Sharma Ltd. reported the following balances at January 1, 2023: Common shares $370,000 Retained earnings 70,000 Accumulated other comprehensive income 71,000 During the year Sharma earned net income of $310,000 and genera Instructions Prepare a statement of shareholders’ equity for the year ended Dec

Accumulated OCI, December 31, 2023 Question 4 (15 marks) Comparative statements of financial position for Nisha Bay Ltd. are NISHA BAY LTD. Statements of Financial Position __December 31__ 2023 2022 Cash $30,900 $10,200 Accounts receivable (net) 48,300 20,300 Inventory 35,000 42,000 Long-term investments 0 15,000 Property, plant & equipment 236,500 150,000 Accumulated depreciation (37,700 ) (25,000 ) Total Assets $313,000 $212,500 Accounts payable $ 19,000 $ 26,500 Accrued liabilities 19,000 17,000 Long-term notes payable 70,000 50,000 Common shares 130,000 90,000 Retained earnings 75,000 29,000 Total Liabilities & Shareholders’ Equity $313,000 $212,50 Additional information concerning transactions and events during 2 1. Net income was $80,000. 2. Sold the long-term investments for $28,000. 3. Paid cash dividends of $34,000. 4. Purchased machinery costing $26,500, paid cash. 5. Purchased machinery by signing a $60,000 long-term note pay 6. Extinguished a $40,000 long-term note payable by issuing com Instructions Prepare a statement of cash flows (indirect method) for calendar 20

Answer Question here 2023 2022 Cash $30,900 $10,200 Accounts receivable (net) 48,300 20,300 Inventory 35,000 42,000 Long-term investments 0 15,000 Property, plant & equipment 236,500 150,000 Accumulated depreciation -37,700 -25,000 Total Assets $313,000 $212,500 Accounts payable $19,000 $26,500 Accrued liabilities 19,000 17,000 Long-term notes payable 70,000 50,000 Common shares 130,000 90,000 Retained earnings 75,000 29,000 Total Liabilities & Shareholders’ Equity $313,000 $212,500 Nisha Bay L Statement of C For the Year Ended D Cash, January 1, 2023 Cash Flows from Operating Activities Net Income Accounts Receivable Inventory Accounts Payable Accrued Liabilities Depreciation Expense Total Cash Flows from Operating Activities Cash Flows from Investing Activities Equipment Purchase Paid Cash Dividend Total Cash Flows from Investing Activities

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Cash Flows from Financing Activities Total Cash Flows from Financing Activities Cash, December 31, 2023 Non-Cash Events Long-term note payable (for Machine Purchase) Extinguished a $40,000 long-term note payable by iss Long-term note payable Common Shares Sale of Long Term Asset (28,000-15,000) Answer Question here a) Working Capital = CA-CL Working Capital = $120,000-$150,000 Working Capital = ($30,000) b) Current Ratio = CA/CL Current Ratio = $120,000/$150,000 Current Ratio = 0.8 c) Through calculations it is revealed the company has a Question 5 (10 marks) A company reported current assets of $120,000 and current liabiliti Instructions Calculate the following: a) Working capital b) Current ratio c) Provide an assessment of the company’s liquidity position based

This is not a good sign for the company as there is not Having a negative working capital means the compan Current ratio below 1 means bad liquidity

Please fill in your first and last name Please fill in your Seneca I. D. ACCOUNTING & FINANCE TERM: WINTER rness, trust, respect, responsibility and igh-quality education and teaching ication, impersonation or plagiarism), the e committed. Refer to Appendix B in the a/policies/academic-integrity-policy.html.

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mpany ng on choice of net income erson ompany common staff and space expenses can be expended also from my own company making more and therefore is paying the most expenses. ount of common expenses (unless parternship weighting is different), the weight n accounting firm with two of your colleagues from your ness structure to use. All three of you are concerned about seem to the think that the three of you could incorporate, s a partnership, but she is not sure what kind. You decide to ture options are available for your new firm. hosen and why? sign Division. After two years of losses and heavy competition, a plan to dispose of the division was

d. e Statement December 31, 2023 $450,000 ax) $30,000 ns ($150,000) ($120,000) perations (after tax) $61,000 ($32,000) ($66,000) ($37,000) $293,000 ized and approved, the income ontinued operations and the sale can be recognized a reduced overall net income of $293,000 e estimates are finalized sign Division. After two years of losses and heavy competition, a plan to dispose of the division was of directors. The sale is anticipated to be completed by June 30, 2024. esign Division) was $450,000. $30,000, expenses: $150,000). x severance payments of $66,000 will be required to finalize the disposal plan. A portion of these f the division's assets. operation, prepare a partial income statement for Amos for 2023. The statement should begin with g to the disposal of the Industrial Design Division.

td. eholders' Equity December 31, 2023 $370,000 $380,000 $135,000 $885,000 $70,000 $310,000 $380,000 $71,000 $64,000 ated other comprehensive income of $64,000. cember 31, 2023.

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$135,000 shown below: Nisha adheres to ASPE. 00 2023: yable. mmon shares. 023 for Nisha Bay Ltd.

$20,700 $28,000 ($7,000) ($15,000) $86,500 ($12,700) ($7,500) $2,000 $20,000 $40,000 $46,000 Ltd. Cash Flows December 31, 2023 $10,200 $80,000 ($28,000) $7,000 $7,500 $2,000 $12,700 $81,200 ($26,500) ($34,000) ($60,500)

$0 $30,900 ($60,000) suing common shares $40,000 ($40,000) $13,000 a negative working capital and current ratio below 1. ties of $150,000. on these results.

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