FIN621 Quiz # 1 Solution

FIN621 Quiz # 1 Solution

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FIN621 Assignment # 1 Solution

Requirements:


A. You are required to compare the two Trial Balances given above and prepare the adjusted journal entries that cause the changes in account balances.

B. You are also required to include an explanation (narration) as part of each adjusting entry.

Solution:-

Here is Solution of 1st Part of Assignment No. 1, Please explain the entry narration yourself.
Entry No.1

Office supplies expense (Income statement items) 432

Office supplies (Balance sheets items) 432

Entry No. 2
Depreciation Machinery (Income statement items) 132

Accumulated depreciation: Machinery (Balance sheets items) 132
Entry No. 3

Salaries (Income statement items) 660

Salaries payable (Balance sheets items) 660

Entry No. 4

Unearned consulting fee (Balance sheets items) 252

Consulting fee earned (Income statement items) 252

Entry No. 5

Consulting fee receivables (Balance sheets items) 1,020

Consulting fee earned (Income statement items) 1,020

FIN621 GDB # 3 Idea Solution

IDEA SOLUTION:-


No, the decision is no link with the assets and liabilities of the business as a guarantee to pay debts.

Because Creditors look to solvency of owner, rather than financial position of business.

Refrence.

Page # 107 ,, under the heading Sole proptership line#5

Pls see this solution if u have some different ideas or any other ans than pls share with us.

FIN621 GDB # 2 Solution

FIN621 GDB # 2 Solution:
Suppose that you have been using the LIFO (Last in first out) inventory method in your business for the last 15 years. You are much worried because during the current year one of you major supplier is unable to make deliveries that can result in depletion of inventory levels up till the year end.


Explain, what would be the effect on Profits of the business and Income tax in this case.
Your Answer must not be more than two lines.”
Solution:-

In this case the profitability of the business will lower down and and also the income tax too because the income tax lie on the profit of the business.

FIN621 Paper

FIN621 Paper Fall2009 Date 24-02-2010 Stat Time 11:00 to 1:00

Total Questions: 50 Marks 82

Total MCQ,s 44 Marks 44

Total Long Questions: 6 Marks 38

1. Calculate Commen Stock and Amotoation? Marks 3

2. Caculate the Rupee and Percentage Change? Marks 5

3. This Question is write the Comment on about the Paragraph (about long)? Marks 5

4. This also a Write the Comment on the Paragraph (about long)? Marks 5

5. Calculate the Common Stock and Devident and total amount of preferred shares? Marks 10

6. Calculate the Common Share and Calculate the Preferred Shares? Marks 10

MCQs about the Ratio and debit and credit and net income.

FIN621 GDB

FIN621 3rd GDB
Explain why preferred stock is considered as debt.
ANS:
Preferred stock is hybrid instrument which contains both characteristics of (equity and debt).But some time companies show it in balance sheet as a debt.First of all we will see what is debt?debt is something that must be repaid, is not an ownership or interest in the firm, creditors do not have voting power, interest paid on debt is fully tax deductible, dividends are paid after taxes, and are considered a return on shareholders contributed capital, unpaid debt is a liability, dividends are not a liability.Now see what similiarities a preferred stock have .Preferred stock is considered a debt because it has no ownership or interest in the firm, share holders of preffered stock do not have voting power, dividen paid on debt is 70% tax deductible, dividends are paid after taxes, and are considered a return on shareholders contributed capital, unpaid debt is a liability, dividends are not a liability .Preffered stock is considered as debt due to its resemblance with bonds which are debt instruments.In addition, preferred stock may have the following features: adjustable rate,cumulative, convertible, callable,participating, and prior preferred.

Fin621 Paper

FIN621 Paper Mid Term Fall 2009:
Total Questions: 42 Marks 50
Total MCQ,s 40 Marks 40
Long Questions: 2 Marks 10
Q;1 Make the Income Statement. Marks 5
Q; 2 Fined the ending value of the inventory. Marks 5

FIN621 GDB

FIN621 2nd GDB
They would definitely be using a perpetual inventory system. They already have the computer equipment needed to keep an accurate record of inventory, i.e. the POS terminals and the ability scan the bar-coded merchandise as it moves into and out of inventory

FIN621

FIN621 Financial Statement Analysis

Statement of cash flow
For the year ended 2009

Note Rs.

Net profit before Tax 57500
Adjustment for non cash items:
Deprecation 7000
Gain on sale of land (10,000)

Operating profit before working capital 54500
Working capital change
Less: Cash increase (24,000)
Less: Accounts receivable increase (1000)
Add: Inventory decrees 2000

Cash generated from operation 31500
Add: Tax paid 11000

Net cash flow from operating activities 42500
Cash flow from investing activities
Add decrease in Land 5000

Net cash flow from investing activities 47500

Cash flow from financing activities
Less: common stock (10000)
Add: Dividend paid 1500

Net cash flow from financing activities 39000

Net cash and cash equivalent 1000

Net cash flow 40000

FIN621 GDB

Does the net income represent an amount of cash that can be withdrawn by the owner of a business? Explain.

Answer:
Net income represents amount of revenue minus expenses for the period of time in business. A business owner can withdraw from cash either on hand or in the company's bank account. Withdrawals of cash or other assets by the owner are not considered an expense of the business and therefore, are not a factor in determining the net income for the period. Since drawings by the owner do not constitute an expense, the owner drawing account is closed not into the income Summary account but directly to the owner capital account Revenue, Expense and Drawing(by owner) change owner equity.