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Mathematics & Economics
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Math Problem
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# Managerial Accounting Mathematics & Economics Math Problem (Math Problem Sample)

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Problem2.
Below are adjusted accounts and balances for Ace Retailing Ltd. for the year ended December 31, 2020:
Cost of goods sold 750,000
Dividends declared (common shares) 245,000
Dividends declared (preferred shares) 82,000
Gain on disposal of discontinued J division 115,000
Gain on sale of FVNI investments 45,000
Interest income 15,000
Loss on impairment of goodwill 12,000
Loss due to warehouse fire 175,000
Loss from operation of discontinued J division 285,000
Loss on disposal of unused equipment from F division 82,000
Retained earnings, January 1, 2020 458,000
Sales revenue 1,500,000
Unrealized gain on FVOCI investments (OCI) 18,600
1.Ace decided to discontinue the J division operations. A formal plan to dispose of J division has been completed. There are no plans to dispose of F division at this time.
2.During 2020, 400,000 common shares were outstanding with no shares activity for 2020.
3.Ace's tax rate is 27%.
4.Ace follows IFRS and accounts for its investments in accordance with IFRS 9 meaning that any unrealized gains/losses for FVNI are reported through net income and FVOCI are reported in OCI.
Required:
a.Prepare a multiple-step statement of income for the year ended December 31, 2020, in good form reporting expenses by function.
b.Prepare a combined statement of income and comprehensive income in good form reporting expenses by function.
c.How would the answer in part (b) differ if a statement of comprehensive income were to be prepared without combining it with the statement of income?
d.Prepare a single-step statement of income in good form reporting expenses by function.
e.Explain what types of items are to be reported in other revenue and expenses as part of continuing operations, and provide examples for a retail business.
Problem3.
Below is the trial balance in no particular order for Hughey Ltd. as at December 31, 2021:
Hughey Ltd.
Trial Balance
As at December 31, 2021
Debits   Credits
Cash   \$ 250,000
Accounts receivable   1,015,000
Allowance for doubtful accounts     \$ 55,000
Prepaid rent   40,000
Inventory   1,300,000
Investments – available for sale (FVOCI)   2,100,000
Land   530,000
Building   770,000
Patents (net)   25,000
Equipment   2,500,000
Accumulated depreciation, equipment     1,200,000
Accumulated depreciation, building     300,000
Accounts payable     900,000
Accrued liabilities     300,000
Notes payable     600,000
Bond payable     1,100,000
Common shares     2,500,000
Accumulated other comprehensive income     245,000
Retained earnings     1,330,000
\$ 8,530,000   \$ 8,530,000
Additional information as at December 31, 2021:
1.The inventory has a net realizable value of \$1,350,000. The company uses FIFO method of inventory valuation.
2.Investments in available for sale securities (FVOCI) have a fair value of \$2,250,000.
3.The company purchased patents of \$60,000 on January 1, 2015.
4.Bonds are 8%, 25-year and pay interest annually each January 1, and are due December 31, 2030.
5.The 7%, notes payable represent bank loans that are secured by investments in available for sale securities (FVOCI) with a carrying value of \$800,000. Interest is paid each December 31 and no principal is due until its maturity on April 30, 2022.
6.The capital structure for the common shares are # of authorized, 100,000 shares; issued and outstanding, 80,000 shares.
Required:
a.Prepare a classified statement of financial position as at December 31, 2021, in good form, including all required disclosures identified in Chapter 4.
b.Calculate the annual amortization for the patent.

Problem2.

Below are adjusted accounts and balances for Ace Retailing Ltd. for the year ended December 31, 2020:

 Cost of goods sold 750,000 Dividends declared (common shares) 245,000 Dividends declared (preferred shares) 82,000 Gain on disposal of discontinued J division 115,000 Gain on sale of FVNI investments 45,000 Interest income 15,000 Loss on impairment of goodwill 12,000 Loss due to warehouse fire 175,000 Loss from operation of discontinued J division 285,000 Loss on disposal of unused equipment from F division 82,000 Retained earnings, January 1, 2020 458,000 Sales revenue 1,500,000 Selling and administrative expenses 245,000 Unrealized gain on FVOCI investments (OCI) 18,600

1. Ace decided to discontinue the J division operations. A formal plan to dispose of J division has been completed. There are no plans to dispose of F division at this time.
2. During 2020, 400,000 common shares were outstanding with no shares activity for 2020.
3. Ace's tax rate is 27%.
4. Ace follows IFRS and accounts for its investments in accordance with IFRS 9 meaning that any unrealized gains/losses for FVNI are reported through net income and FVOCI are reported in OCI.

Required:

1. Prepare a multiple-step statement of income for the year ended December 31, 2020, in good form reporting expenses by function.
2. Prepare a combined statement of income and comprehensive income in good form reporting expenses by function.
3. How would the answer in part (b) differ if a statement of comprehensive income were to be prepared without combining it with the statement of income?
4. Prepare a single-step statement of income in good form reporting expenses by function.
5. Explain what types of items are to be reported in other revenue and expenses as part of continuing operations, and provide examples for a retail business.

Problem3.

Below is the trial balance in no particular order for Hughey Ltd. as at December 31, 2021:

 Hughey Ltd. Trial Balance As at December 31, 2021 Debits Credits Cash \$ 250,000 Accounts receivable 1,015,000 Allowance for doubtful accounts \$ 55,000 Prepaid rent 40,000 Inventory 1,300,000 Investments – available for sale (FVOCI) 2,100,000 Land 530,000 Building 770,000 Patents (net) 25,000 Equipment 2,500,000 Accumulated depreciation, equipment 1,200,000 Accumulated depreciation, building 300,000 Accounts payable 900,000 Accrued liabilities 300,000 Notes payable 600,000 Bond payable 1,100,000 Common shares 2,500,000 Accumulated other comprehensive income 245,000 Retained earnings 1,330,000 \$ 8,530,000 \$ 8,530,000

Additional information as at December 31, 2021:

1. The inventory has a net realizable value of \$1,350,000. The company uses FIFO method of inventory valuation.
2. Investments in available for sale securities (FVOCI) have a fair value of \$2,250,000.
3. The company purchased patents of \$60,000 on January 1, 2015.
4. Bonds are 8%, 25-year and pay interest annually each January 1, and are due December 31, 2030.
5. The 7%, notes payable represent bank loans that are secured by investments in available for sale securities (FVOCI) with a carrying value of \$800,000. Interest is paid each December 31 and no principal is due until its maturity on April 30, 2022.
6. The capital structure for the common shares are # of authorized, 100,000 shares; issued and outstanding, 80,000 shares.

Required:

1. Prepare a classified statement of financial position as at December 31, 2021, in good form, including all required disclosures identified in Chapter 4.
2. Calculate the annual amortization for the patent.

source..
Content:

Managerial Accounting
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Problem 2
Part a.

ACE RETAILING LTD

MULTIPLE-STEP STATEMENT OF INCOME

FOR THE YEAR ENDED 31, DECEMBER 2020.

Sales

1,500,000

1,500,000

Cost of goods Sold

...
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