DST Bhd decides to adventure into poultry farming in 2015 with financial year ending in December. DST Bhd engaged Mr Kevin to be the accountant for the company to prepare the financial statements as per Malaysian financial reporting requirement. On 30 May 2015, the company purchased 10,000 chickens at the cost of RM95,000. As at 31 December 2015, the fair value of the chicken is estimated to be RM101,100 and the cost of sell are estimated to be RM1,000. Required: Discuss the accounting treatment for the transaction above. Revision

DST Bhd decides to adventure into poultry farming in 2015 with financial year ending in December. DST Bhd engaged Mr Kevin to be the accountant for the company to prepare the financial statements as per Malaysian financial reporting requirement. On 30 May 2015, the company purchased 10,000 chickens at the cost of RM95,000. As at 31 December 2015, the fair value of the chicken is estimated to be RM101,100 and the cost of sell are estimated to be RM1,000. Required: Discuss the accounting treatment for the transaction above. Revision

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Gansac Publishing Company signed a contract with an author to publish her book. The signing took place on January 1, 2016, and a payment of $35,000 was made to obtain a copyright. Gansac expects to sell 200,000 books evenly between 2016 and 2020 at a price of $10 per book. Prepare journal entries to record the events related to the copyright and sales of the book during 2016 and 2017, assuming that sales were as projected.
bBramble Corporation builds in-home theater systems. Bramble’s business is growing quickly. Therefore, the CEO, Paul Bramble, decides to purchase three new trucks on September 20, 2017. The terms of acquisition for each truck are described below. 1. The first truck’s list price is $16,380. Bramble exchanges home theater equipment from its inventory for the truck. The home theater equipment cost Molitor $10,140. Bramble normally sells the equipment for $15,405. Bramble uses a perpetual inventory system. 2. The second truck has a list price of $17,160. Bramble makes a down payment of $3,900 cash on this truck and signs a zero-interest-bearing note with a face amount of $13,260. Payment of the note is due September 20, 2018. Bramble would normally have to pay interest at a rate of 8% for such a borrowing. 3. The list price of the third truck is $14,976. This truck is acquired in exchange for 936 shares of common stock in Bramble Corporation. The stock has a par value per…
Leo Consulting enters into a contract with Highgate University to restructure Highgate’s processes for purchasing goods from suppliers. The contract states that Leo will earn a fixed fee of $66,000 and earn an additional $13,000 if Highgate achieves $130,000 of cost savings. Leo estimates a 70% chance that Highgate will achieve $130,000 of cost savings. Assuming that Leo determines the transaction price as the expected value of expected consideration, what transaction price will Leo estimate for this contract? Transaction price for the contract ?
At their last quarterly meeting, the management of Noble Agro Processing & Manufacturing Company, a Public Limited Liability Company incorporated in 2018 to produce assorted Agriculture implements, and processing of Agric aw materials into semi-finished products discussed the future prospects of the Company after the Covid 19 Economic down turn. This was particularly with regards to their plans to extend their sales beyond the frontiers of Ghana and to strive hard to capture at least 20% of the total market share of the industry within the East African sub region by the year 2025. To successfully carry out this aggressive mission, there was the need for inject of fresh capital which management agreed as follows: 1. To issue 400,000 Equity Shares of no par Value at the price of GH¢1.00 per Share 2. 10% Debenture Loan to the tune of GH¢600,000.00 On the basis of the available capital anticipated, management has come out with two possible strategies to enter the East African Market.…
Adiwele Ltd has a financial year end of 31 March. The entity manufactures Compact Discs for resale. The manufacturing cost per compact disc is R2 per unit. Finished units of the compact disc are sold at R2.5 per unit. On 31 March 2021, Adiwele Ltd had 100 500 units of compact discs in stock. To sell this products Adiwele Ltd will incur the following costs: Sales commission of 20 cents per unit, Additional designing costs of 25 cents per unit, Advertising and packaging costs of 23 cents per unit, Salaries for administrative staff of R6 000 per month. Adiwele Ltd measures inventory at lower of cost and net realisable value as per IAS 2, Inventories according to IFRS at year end. What is the value of the closing inventory on 31 March 2021 as per IAS 2? 1.251 250 2. 201 000 3. 208 035 4. 136 035 5. 244 215
Beginning the year 2020, the ABC Company began marketing its phone. Each phone sells for P50,000. To promote and expedite sales of this product, the management of ABC is offering one proof of purchase seal for a special slim transparent case to each customer for every unit of Samsung phone. ABC estimates that out of the units sold during 2020, only 60% of the proof of purchase seals will be redeemed. Sales of phone during 2021 totaled P50 million. For that year, 625 special slim transparent cases were purchased by the company at a total cost of P750,000. These 625 special slim transparent cases have a total sales value of P1,250,000. A total of 320 special slim transparent cases were distributed to customers during the year 2020. How much is the unearned revenue for unredeemed premiums reported in ABC's December 31, 2020 statement of financial position?
AgriFoods, Incorporated prepares and delivers agricultural products to industrial-scale kitchens and food service providers. One of its key customers is Home Kitchen & Company, which provides cafeteria solutions for corporations and universities. On January 1, 2024, AgriFoods obtained a one-year contract to supply a pre-specified amount of vegetables to Home Kitchen, and received $600,000 in cash. Then, on March 15, AgriFoods hired Home to run one of its employee cafeterias for a period of six months, from April to September, and paid $70,000 in cash. For similar arrangements, Home usually charged $50,000. Required: (a) Prepare the journal entries AgriFoods would record on January 1, 2024 and January 31, 2024 with respect to the sales contract. Assume revenue is accrued on a monthly basis. (b) Prepare the journal entry to account for AgriFoods’ purchase of Home’s services.
Spindler, Inc. (a U.S.-based company), imports surfboards from a supplier in Brazil and sells them in the United States. Purchases are denominated in terms of the Brazilian real (BRL). During 2020, Spindler acquires 420 surfboards at a price of BRL 1,600 per surfboard, for a total of BRL 672,000.00. Spindler will pay for the surfboards when it sells them. Relevant exchange rates are as follows: Date U.S. Dollar perBrazilian Real (BRL) September 1, 2020 $ 0.230 December 1, 2020 0.220 December 31, 2020 0.240 March 1, 2021 0.225 Assume that Spindler acquired the surfboards on September 1, 2020, and made payment on December 1, 2020. What is the effect of the exchange rate fluctuations on reported income in 2020? Assume that Spindler acquired the surfboards on December 1, 2020, and made payment on March 1, 2021. What is the effect of the exchange rate fluctuations on reported income in 2020 and 2021? Assume that Spindler acquired the surfboards on…
Furtastic manufactures imitation fur garments. On June 1, 2018, Furtastic made a sale to Willett’s DepartmentStore under terms that require Willett to pay $150,000 to Furtastic on June 30, 2018. In a separate transaction onJune 15, 2018, Furtastic purchased brand advertising services from Willett for $12,000. The fair value of thoseadvertising services is $5,000. Furtastic expects that 3% of all sales will prove uncollectible.Required:1. Prepare the journal entry to record Furtastic’s sale on June 1, 2018.2. Prepare the journal entry to record Furtastic’s purchase of advertising services from Willett on June 15, 2018.Assume all of the advertising services are delivered on June 15, 2018.3. Prepare the journal entry to record Furtastic’s receipt of $150,000 from Willett on June 30, 2018.4. How would Furtastic’s expectation regarding uncollectible accounts affect its recognition of revenue from thesale to Willett’s Department Store on June 1, 2018? Explain briefly
Global Athletes Pty Ltd is a large sports goods retailer. It purchases ‘sweet spot’ badminton set rackets for $110 each from Sport Australia Pty Ltd, a large manufacturer of sports products. Sport Australia has an annual turnover of more than 30 Million and has an accruals basis accounting system. Global Athletes Pty Ltd plans to sell the badminton set rackets at a 200% mark-up to its customers. In January last year, it purchased 100 racquets. However, in April, it discovered that 10 of these racquets had design faults, and it returned them to the manufacturer and obtained a full refund. Explain the GST consequences of this arrangement for both parties.
Sharin Sdn Bhd is in the business of sheep farming. In January 2012, a herd of 400 sheep aged two years old was imported from Australia at a cost of RM300 per sheep. The only change in 2012 was increase in physical attributes due to ageing from two to three years. On January 1, 2013, Sharin Sdn Bhd purchased another herd of 800 sheep, aged one-month old, at a price of RM100 per sheep. Transportation costs amounted to RM16,000. In February 2013, two of the sheep aged 3 years old were found dead by a worker. During 2013, the company slaughtered 350 of the xeat-old sheep and their mutton were sold for RM1,000 per sheep. Expenses incurred for the year ended December 31, 2003 are as follow: Feed costs and farming supplies Farm labour and supervision Depreciation of farm buildings and facilities Relevant fair values per sheep are as follows: RM40,000 30,000 9,000 FV per sheep as at 31 December 2012 (RM) 250 350 450 550 FV per sheep as at 31 December 2013 (RM) 150 300 400…