MERHAN, VHILFREY S.

2ND YEAR BSAIS

ASSIGNMENT

Direction: Solve for the following:

1. Trey Company

a. Current assets c. 17,000,000

Cash 5,000,000
A/R net (8,000,000-2,000,000) 6,000,000
Inventory 6,000,000
Total current assets 17,000,000

b. Total retained earnings b. 8,500,000

Income before tax 5,000,000

Income tax (30% x 5,000,000) (1,500,000)
Net Income 3,500,000
Retained Earnings 5,000,000
Total 8,500,000

2. Mint Company

a. Total retained earnings b. 2,110,000

Earnings from long-term contracts 6,680,000

Cost and expenses (5,180,000)
Income before income tax 1,500,000
Income tax expense ( 30% * 1,500,000 ) (450,000)
Net income 1,050,000
Retained earnings unappropriated 900,000
Retained earnings restricted 160,000
Total retained earnings 2,110,000

b. Total non-current liabilities a. 1,620,000

Note payable-noncurrent 1,620,000

The billings in excess of cost on long term contracts account is a current liability.

C. Total current assets c. 5,700,000

Cash 600,000
Accounts receivable 3,500,000
Cost in excess of billings on long term contracts 1,600,000
Total current assets 5,700,000
d. Total Shareholder's equity c. 4,890,000

Share capital 750,000

Share premium 2,030,000
Retained earnings 2,110,000
Total shareholders’ equity 4,890,000

3. Shaw Company

a. Total current assets d. 4,900,000

Cash 600,000
Accounts receivable 2,800,000
Inventory 2,000,000
A/R – installments (125,000x40 (500,000)
Total current assets 4,900,000

b. Total current liabilities a. 2,700,000

Accounts payable and accrued liabilities 1,800,000

Income tax payable ( 1,500,000 – 600,000) 900,000
Total current liabilities 2,700,000

c. Retained earnings c. 7,000,000

Net sales and other revenue 15,000,000

Cost and expenses (10,000,000)
Income before income tax 5,000,000
Income tax expense ( 30% * 5,000,000 ) (1,500,000)
Net income 3,500,000
Retained earnings – January 1 3,500,000
Retained earnings- December 31 7,000,000

4. Charice Company

a. Current liabilities

Accounts payable 500,000

Accrued expenses 300,000
Dividends payable (100,000 shares*7) 700,000
Accrued interest payable (5,000,000 x 8% x 6/12) 200,000
Income tax payable 800,000
Total current liabilities 2,500,000

Current tax expense (6,000,000 x 30%) 1,800,000

Estimated tax payment (1,000,000)
Income tax payable 800,000
5. Kaye Company

a. Current liabilities a. 15,650,000

Accounts payable 6,500,000

Bank note payable – 10% 3,000,000
Accrued interest payable 150,000
Mortgage note payable 2,000,000
Bonds payable – due June 30, 2020 4,000,000
Total current liabilities 15,600,000