1. Madeena Co. acquired the appropriate to make use of 1,000 acres of land in South Africa to mine for silver. The lease value is $50,000, and the associated exploration prices on the property are $100,000. Intangible improvement prices incurred in opening the mine are $850,000. Madeena Co. estimates that the mine will present roughly 100,000 ounces of silver. If Madeena Co. extracts 25,000 ounces within the first yr, Present the journal entry for depletion and assertion of monetary place to indicate Silver Mine.
2. Sultan Firm has credit score gross sales of $2.60 million for yr 2016. On December 31, 2016, the corporate’s Allowance for Uncertain Accounts has an unadjusted credit score steadiness of $14,905. Sultan prepares a schedule of its December 31, 2016, accounts receivable by age. On the idea of previous expertise, it estimates the p.c of receivables in every age class that can change into uncollectible. This data is summarized right here.
December 31, 2011 Accounts Receivable Age of Accounts Receivable Anticipated P.c Uncollectible
$730,000 Not But Due 1.25%
354,000 1 to 30 days late 2.00%
76,000 31 to 60 days late 6.50%
48,000 61 to 90 days late 32.75%
12,000 over 90 days late 67.00%
1. Utilizing the growing older of accounts receivable technique, discover the estimate the required steadiness of the Allowance for Uncertain Accounts at December 31, 2016.
2. Put together the adjusting entry to report unhealthy money owed.
three. Put together the entry for Jan. 1, 2011, to report the next bond difficulty by SABIC.
Par worth = $500,000
Difficulty worth = 92.6405 % of par worth $500,000 * 92.6405%=463203
Par worth Difficulty Worth Low cost Worth
500000 – 463203 = 36797
Acknowledged rate of interest = 10%
Market rate of interest = 12% (Bond will promote at a reduction)
Curiosity dates = 6/30 and 12/31
Bond date = Jan. 1, 2011 Maturity date = Dec. 31, 2015 (5 years)
Go journal entry:
1. Issued of Bond,
2. Go entry for each six months to report the money curiosity fee and the amortization of the premium.
three. Journal entry on retirement of the bond
four. The next are the monetary statements of Carrefour and Walmart enterprise teams
Revenue assertion (Quantity in Million $)
Account Title Carrefour $ Walmart $
Gross sales 298.zero 137.6
Price of GS 274.zero 108.7
Gross revenue 24.zero 28.9
Working Ex 9.6 22.four
Different bills eight.9 2.1
Web revenue 5.5 four.four
Steadiness sheet (Quantity in Million $)
Steadiness sheet Carrefour $ Walmart $
Present Asset 63.5 ( Stock 25.5) 21.1 (Stock 9.three)
Fastened Asset 91.5 28.9
Whole Asset 155.zero 50.zero
Present & complete Liabilities 85.eight 16.eight
Frequent Inventory 69.2 33.2
Whole Liabilities & Fairness 155.zero 50.zero
Analyze the monetary assertion utilizing ratios and Examine & touch upon the efficiency of each companies below Profitability, Liquidity& Effectivity and Solvency Ratios within the format given beneath:
Ratio Formulae Carrefour Wal-Mart Feedback
Return on Belongings
Return on Fairness Gross revenue ratio =GP/Gross sales
Web Revenue / Gross sales
Web Revenue/ Whole Belongings
Web Revenue/ Fairness
Liquidity & Effectivity Ratio
Gross sales to Belongings
Gross sales /
Price of Items Offered/ Stock
Debt to Fairness
Fairness to Belongings Whole Liabilities /
Whole Fairness/ Whole Belongings
5. Latif Furnishings Enterprise in Riyadh discover a steadiness of SR 25,000 in his Financial institution, however his money ebook steadiness reveals solely $ 15,000 within the enterprise
a) Does such distinction seem amongst companies, if sure, why you suppose there’s a distinction.
b) Carry out the causes of variations between money and financial institution steadiness.