Required a journalize the transactions including the

Info icon This preview shows pages 4–8. Sign up to view the full content.

View Full Document Right Arrow Icon
Required a) Journalize the transactions including the date. ( no explanations required) 4
Image of page 4

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Part B (continued) b) Prepare the shareholders’ equity section of the balance sheet at December 31, 2004 in good form. 5
Image of page 5
Part C (5 marks) The financial statements for Dancer Ltd., for the years 2003 and 2004 contained errors as follows: 2003 2004 Ending inventory $6,000 overstated $2,000 understated Depreciation expense $4,000 overstated $1,600 understated Net income reported (includes errors) $31,343 $35,910 Required: Given the information, calculate the correct net income for both years. 6
Image of page 6

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Part D (6 marks) Determine the amount that is added to or subtracted from income for each of the following items. State the effect and amount for each situation in the chart below. Situation Effect on income I = Increase D = Decrease NE = no effect $ = Quantify 1. A truck costing $45,000 and having accumulated amortization of $18,000 is sold for $16,000 cash. 2. An investment of $100,000 in another company turns out to have been a bad idea. It looks as if the investment can be sold for only $15,000. 3. An old building that cost $78,000 and has accumulated amortization of $78,000 is given to the fire department to burn down for practice. 4. Land that cost $50,000 is sold for 10 payments of $10,000 each, to be received over the next 10 years. The interest included in those payments will equal $27,000. 5. Company A makes an investment in XYZ company costing $50,000. After two years the market value of XYZ is $80,000. 6. A division is sold as a business because the company is going to get out of that line of business. The division is sold for $340,000 in cash (proceeds), and has assets costing $670,000, accumulated amortization of $240,000, and liabilities of $120,000, which the selling company is still responsible for. Determine the effect on the net income of the selling company.
Image of page 7
Image of page 8
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern