The document provides a step-by-step explanation of calculating goodwill using the average profit method for the partnership of Geet and Meet. They admit Jeet into the partnership for an equal share. Profits over the last 5 years are adjusted for abnormal gains/losses and capital expenditures incorrectly charged to determine the average adjusted profit of Rs. 1,00,000. Goodwill is then calculated as 3 years' purchase of the average profit, which equals Rs. 3,00,000.
Question needs grading. Grade of 1 pt Submit GradeMist Co.docxmakdul
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Grade: of 1 pt Submit Grade
Mist Company has the following post-closing trial balance on December 31, 2016:
(See below to view the post-closing trial balance.)
The company's accounting department has gathered the following budgeting information for the first quarter of 2017:
(See below to view the budget information.)
Additional information: Rent and income tax expenses are paid as incurred. Insurance expense is an expiration of the prepaid amount.
.
Requirement 1.
Prepare a budgeted income statement for the quarter ended March 31, 2017.
Save Accounting Table...
+
Copy to Clipboard...
+
Mist Company
Budgeted Income Statement
For the Quarter Ended March 31, 2017
Gross Profit
Selling and Administrative Expenses:
Total Selling and Administrative Expenses
Operating Income (Loss)
Net Income (Loss)
Requirement 2.
Prepare a budgeted balance sheet as of March 31, 2017.
Save Accounting Table...
+
Copy to Clipboard...
+
Mist Company
Budgeted Balance Sheet
March 31, 2017
Assets
Current Assets:
Total Current Assets
Property, Plant, and Equipment
Total Assets
Save Accounting Table...
+
Copy to Clipboard...
+
Liabilities
Current Liabilities:
Total Liabilities
Stockholders' Equity
Total Stockholders' Equity
Total Liabilities and Stockholders' Equity
Requirement 3.
Prepare a budgeted statement of cash flows for the quarter ended March 31, 2017.
Complete the three sections of the budgeted statement of cash flows, then compute the net increase in cash and the balance at March 31, 2017.
(Enter a use of cash with a minus sign or parentheses. If a box is not used in the statement of cash flows leave the box empty; do not select a label or enter a zero.)
Save Accounting Table...
+
Copy to Clipboard...
+
Mist Company
Budgeted Statement of Cash Flows
For the Quarter Ended March 31, 2017
Operating Activities:
Net cash provided by (used for) operating activities
Investing Activities:
Net cash provided by (used for) investing activities
Financing Activities:
Net cash provided by (used for) financing activities
Save Accounting Table...
+
Copy to Clipboard...
+
Net increase in cash
Cash balance, January 1, 2017
Cash balance, March 31, 2017
0
Paperclip Office Supply's March 31, 2016, balance sheet follows:
(See below to view the balance sheet.)
The budget committee of Paperclip Office Supply has assembled the following data:
(See below to view the data.)
.
Requirement 1.
Prepare Paperclip's sales budget for April and May 2016.
Round all amounts to the nearest dollar.
Save Accounting Table...
+
Copy to Clipboard...
+
Paperclip Office Supply
Sales Budget
April and May, 2016
April
May
Total budgeted sales
Requirement 2.
Prepare Paperclip's inventory, purchases, and cost of goods sold budget for April ...
Question needs grading. Grade of 1 pt Submit GradeMist Co.docxmakdul
Question needs grading.
Grade: of 1 pt Submit Grade
Mist Company has the following post-closing trial balance on December 31, 2016:
(See below to view the post-closing trial balance.)
The company's accounting department has gathered the following budgeting information for the first quarter of 2017:
(See below to view the budget information.)
Additional information: Rent and income tax expenses are paid as incurred. Insurance expense is an expiration of the prepaid amount.
.
Requirement 1.
Prepare a budgeted income statement for the quarter ended March 31, 2017.
Save Accounting Table...
+
Copy to Clipboard...
+
Mist Company
Budgeted Income Statement
For the Quarter Ended March 31, 2017
Gross Profit
Selling and Administrative Expenses:
Total Selling and Administrative Expenses
Operating Income (Loss)
Net Income (Loss)
Requirement 2.
Prepare a budgeted balance sheet as of March 31, 2017.
Save Accounting Table...
+
Copy to Clipboard...
+
Mist Company
Budgeted Balance Sheet
March 31, 2017
Assets
Current Assets:
Total Current Assets
Property, Plant, and Equipment
Total Assets
Save Accounting Table...
+
Copy to Clipboard...
+
Liabilities
Current Liabilities:
Total Liabilities
Stockholders' Equity
Total Stockholders' Equity
Total Liabilities and Stockholders' Equity
Requirement 3.
Prepare a budgeted statement of cash flows for the quarter ended March 31, 2017.
Complete the three sections of the budgeted statement of cash flows, then compute the net increase in cash and the balance at March 31, 2017.
(Enter a use of cash with a minus sign or parentheses. If a box is not used in the statement of cash flows leave the box empty; do not select a label or enter a zero.)
Save Accounting Table...
+
Copy to Clipboard...
+
Mist Company
Budgeted Statement of Cash Flows
For the Quarter Ended March 31, 2017
Operating Activities:
Net cash provided by (used for) operating activities
Investing Activities:
Net cash provided by (used for) investing activities
Financing Activities:
Net cash provided by (used for) financing activities
Save Accounting Table...
+
Copy to Clipboard...
+
Net increase in cash
Cash balance, January 1, 2017
Cash balance, March 31, 2017
0
Paperclip Office Supply's March 31, 2016, balance sheet follows:
(See below to view the balance sheet.)
The budget committee of Paperclip Office Supply has assembled the following data:
(See below to view the data.)
.
Requirement 1.
Prepare Paperclip's sales budget for April and May 2016.
Round all amounts to the nearest dollar.
Save Accounting Table...
+
Copy to Clipboard...
+
Paperclip Office Supply
Sales Budget
April and May, 2016
April
May
Total budgeted sales
Requirement 2.
Prepare Paperclip's inventory, purchases, and cost of goods sold budget for April ...
This document brings together a set of latest data points and publicly available information relevant for Digital Customer Experience Industry. We are very excited to share this content and believe that readers will benefit from this periodic publication immensely.
Brief Exercise 22-1At the beginning of 2017, Bonita Constructi.docxjackiewalcutt
Brief Exercise 22-1
At the beginning of 2017, Bonita Construction Company changed from the completed-contract method to recognizing revenue over time (percentage-of-completion) for financial reporting purposes. The company will continue to use the completed-contract method for tax purposes. For years prior to 2017, pretax income under the two methods was as follows: percentage-of-completion $110,900, and completed-contract $80,300. The tax rate is 35%.
Prepare Bonita’s 2017 journal entry to record the change in accounting principle. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Account Titles and Explanation
Debit
Credit
Brief Exercise 22-4
Flint Company changed depreciation methods in 2017 from double-declining-balance to straight-line. Depreciation prior to 2017 under double-declining-balance was $87,900, whereas straight-line depreciation prior to 2017 would have been $54,900. Flint’s depreciable assets had a cost of $241,300 with a $43,800 salvage value, and an 8-year remaining useful life at the beginning of 2017.
Prepare the 2017 journal entry related to Flint’s depreciable assets (Equipment). (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Account Titles and Explanation
Debit
Credit
Brief Exercise 22-7
At January 1, 2017, Pearl Company reported retained earnings of $2,081,000. In 2017, Pearl discovered that 2016 depreciation expense was understated by $426,000. In 2017, net income was $812,000 and dividends declared were $271,000. The tax rate is 40%.
Prepare a 2017 retained earnings statement for Pearl Company.
PEARL COMPANY
Retained Earnings Statement
$
:
:
:
$
Brief Exercise 22-8
Indicate the effect—Understate, Overstate, No Effect—that each of the following errors has on 2017 net income and 2018 net income.
2017
2018
(a)
Equipment purchased in 2015 was expensed.
(b)
Wages payable were not recorded at 12/31/17.
(c)
Equipment purchased in 2017 was expensed.
(d)
2017 ending inventory was overstated.
(e)
Patent amortization was not recorded in 2018.
Exercise 22-2
Marigold Company began operations on January 1, 2015, and uses the average-cost method of pricing inventory. Management is contemplating a change in inventory methods for 2018. The following information is available for the years 2015–2017.
Net Income Computed Using
Average-Cost Method
FIFO Method
LIFO Method
2015
$16,150
$18,870
$12,080
2016
17,860
20,890
14,140
2017
19,850
25,100
17,020
(a) Prepare the journal entry necessary to record a change from the average cost method to the FIFO method in 2018. (Credit account titles are automatically indented when amount is entered. Do not indent manually. I.
Corporate Tax Planning Practicing ProblemsSundar B N
In this file you will find problems with solution for Corporate Tax Planning
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1) Reen Lawns, Inc., performs adjusting entries every month, but c.docxdorishigh
1) Reen Lawns, Inc., performs adjusting entries every month, but closes its accounts only at year-end. The company’s year-end adjusted trial balance dated December 31, 2015, was:
GREEN LAWNS, INC.
Adjusted Trial Balance
December 31, 2015
Cash
$
182,200
Accounts receivable
9,000
Supplies
600
Equipment
24,000
Accumulated depreciation: equipment
$
10,000
Accounts payable
3,000
Income taxes payable
7,000
Capital stock
50,000
Retained earnings
90,000
Dividends
4,000
Lawn care revenue earned
192,000
Salary expense
104,000
Supply expense
2,400
Advertising expense
600
Depreciation expense: equipment
2,000
Income taxes expense
23,600
$
352,000
$
352,000
a-1.
Prepare an income statement for the year ended December 31, 2015.
a-2.
Prepare a statement of retained earnings for the year ended December 31, 2015.
a-3.
Prepare the company's balance sheet dated December 31, 2015. (Amounts to be deducted should be indicated by a minus sign.)
b.
Does the company appear to be liquid?
No
Yes
c.
Has the company been profitable in the past?
No
Yes
2) Reen Lawns, Inc., performs adjusting entries every month, but closes its accounts only at year-end. The company’s year-end adjusted trial balance dated December 31, 2015, was:
GREEN LAWNS, INC.
Adjusted Trial Balance
December 31, 2015
Cash
$
182,200
Accounts receivable
9,000
Supplies
600
Equipment
24,000
Accumulated depreciation: equipment
$
10,000
Accounts payable
3,000
Income taxes payable
7,000
Capital stock
50,000
Retained earnings
90,000
Dividends
4,000
Lawn care revenue earned
192,000
Salary expense
104,000
Supply expense
2,400
Advertising expense
600
Depreciation expense: equipment
2,000
Income taxes expense
23,200
$
352,000
$
352,000
a.
Prepare all necessary closing entries at December 31, 2015.
1. Record the entry to close Lawn Care Revenue earned to income summary
2. REcord the entry to close all expense accounts to income summary
3. Record the entry to transfer net income earned in 2015 to retained earnings account
4. Record the entry to close dividends declared in 2015 to retained earnings account.
Prepare an after-closing trial balance dated December 31, 2015.
· Record the entry to close all expense accounts to income summary.
· Record the entry to close all expense accounts to income summary.
3) Cat Fancy, Inc., has provided the following information from its most current financial statements:
Total revenue
$
125,000
Total expenses
80,000
Total current assets
32,000
Total current liabilities
8,000
Total stockholders' equity, January 1, 2015
74,000
Total stockholders' equity, December 31, 2015
76,000
Compute the company’s net income per ...
This document brings together a set of latest data points and publicly available information relevant for Automotive. We are very excited to share this content and believe that readers will benefit immensely from this periodic publication immensely.
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This will be used as part of your Personal Professional Portfolio once graded.
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Prepare a presentation or a paper using research, basic comparative analysis, data organization and application of economic information. You will make an informed assessment of an economic climate outside of the United States to accomplish an entertainment industry objective.
June 3, 2024 Anti-Semitism Letter Sent to MIT President Kornbluth and MIT Cor...Levi Shapiro
Letter from the Congress of the United States regarding Anti-Semitism sent June 3rd to MIT President Sally Kornbluth, MIT Corp Chair, Mark Gorenberg
Dear Dr. Kornbluth and Mr. Gorenberg,
The US House of Representatives is deeply concerned by ongoing and pervasive acts of antisemitic
harassment and intimidation at the Massachusetts Institute of Technology (MIT). Failing to act decisively to ensure a safe learning environment for all students would be a grave dereliction of your responsibilities as President of MIT and Chair of the MIT Corporation.
This Congress will not stand idly by and allow an environment hostile to Jewish students to persist. The House believes that your institution is in violation of Title VI of the Civil Rights Act, and the inability or
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The House of Representatives will not countenance the use of federal funds to indoctrinate students into hateful, antisemitic, anti-American supporters of terrorism. Investigations into campus antisemitism by the Committee on Education and the Workforce and the Committee on Ways and Means have been expanded into a Congress-wide probe across all relevant jurisdictions to address this national crisis. The undersigned Committees will conduct oversight into the use of federal funds at MIT and its learning environment under authorities granted to each Committee.
• The Committee on Education and the Workforce has been investigating your institution since December 7, 2023. The Committee has broad jurisdiction over postsecondary education, including its compliance with Title VI of the Civil Rights Act, campus safety concerns over disruptions to the learning environment, and the awarding of federal student aid under the Higher Education Act.
• The Committee on Oversight and Accountability is investigating the sources of funding and other support flowing to groups espousing pro-Hamas propaganda and engaged in antisemitic harassment and intimidation of students. The Committee on Oversight and Accountability is the principal oversight committee of the US House of Representatives and has broad authority to investigate “any matter” at “any time” under House Rule X.
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The Roman Empire A Historical Colossus.pdfkaushalkr1407
The Roman Empire, a vast and enduring power, stands as one of history's most remarkable civilizations, leaving an indelible imprint on the world. It emerged from the Roman Republic, transitioning into an imperial powerhouse under the leadership of Augustus Caesar in 27 BCE. This transformation marked the beginning of an era defined by unprecedented territorial expansion, architectural marvels, and profound cultural influence.
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2. Geeta Handa
PGT Accountancy
• 20 years experience of teaching
accountancy.
• 14 years experience of checking
accountancy papers of CBSE
• Worked as examiner for conducting
practical exam of accountancy.
geet7handa@gmail.com Geeta Handa
3. Q12 Geet and Meet are partners in a firm. They admit Jeet into partnership for equal share. It
was agreed that goodwill will be valued at three years’ purchase of average profit of last five
years. Profits for the last five years were :
Year Ended 31st March,2016 31st March,2017 31st March ,2018 31st March 2019 31st March 2020
Profit ( Rs.) 90,000 (Loss) 1,60,000 1,50,000 65,000 1,77,000
Books of Account of the firm revealed that :
(i) The firm had gain (profit) of Rs.50,000 from sale of machinery sold in the year ended 31st March,
2016 The gain (profit) was credited in Profit and Loss Account.
(ii) There was an abnormal loss of Rs.20,000 incurred in the year ended 31st March, 2017 because of a
machine becoming obsolete in accident.
(iii) Overhauling cost of second hand machinery purchased on 1st July, 2018 amounting to Rs.1,00,000
was debited to Repairs Account. Depreciation is charged @20% p.a. on Written Down Value
Method.
Calculate the value of goodwill.
Geeta Handa
4. Goodwill : Average Profit Method
Q13 Geet and Meet are partners in a firm. They admit Jeet into partnership for equal share. It
was agreed that goodwill will be valued at three years’ purchase of average profit of last five
years. Profits for the last five years were :Year Ended 31st March,2015 31st March,2016 31st March ,2017 31st March 2018 31st March 2019
Profit ( Rs.) 90,000 (Loss) 1,60,000 1,50,000 65,000 1,77,000
Books of Account of the firm revealed that :
(i) The firm had gain (profit) of Rs.50,000 from sale of machinery sold in the year ended 31st March,
2016 The gain (profit) was credited in Profit and Loss Account.
(ii) There was an abnormal loss of Rs.20,000 incurred in the year ended 31st March, 2017 because of a
machine becoming obsolete in accident.
(iii) Overhauling cost of second hand machinery purchased on 1st July, 2017 amounting to Rs.1,00,000
was debited to Repairs Account. Depreciation is charged @20% p.a. on Written Down Value
Method.
Calculate the value of goodwill.
Geeta Handa
5. Geeta Handa
Formula for Calculation of Goodwill by Average Profit Method
• Goodwill = Average Profits X No. of Years’ Purchased
• Average Profit =
Total Adjusted Profits
No. of Years
6. Formula for Adjusted Profits
Adjusted Profits / Normal Business Profits = Profits of the Year
− Abnormal Gain(non operating )
+ Abnormal Loss
Geeta Handa
7. Formula for Adjusted Profits
Adjusted Profits = Profits of the Year
− Abnormal Gain ( Gain on sale of Machinery)
Geeta Handa
8. Formula for Adjusted Profits
Adjusted Profits = Profits of the Year
− Abnormal Gain
+ Abnormal Losses (Incurred in the year )
Geeta Handa
9. Formula for Adjusted Profits
Adjusted Profits = Profits of the Year
− Abnormal Gain
+ Abnormal Losses
+ Capital Expenditure Charged as Revenue Expenditure
(Machinery Purchased wrongly debited to Repairs Account)
Geeta Handa
10. Formula for Adjusted Profits ( Normal Business Profit)
Adjusted Profits = Profits of the Year
− Abnormal Gain
+ Abnormal Losses
+ Capital Expenditure Charged as Revenue Expenditure
− Depreciation ( on machinery purchased wrongly debited
to Repairs Account)
Geeta Handa
11. Calculation of Adjusted Profit / Normal Business Profit
Years 31
March
Profits
(Rs.)
2016 (90,000)
2017 1,60,000
2018 1,50,000
2019 65,000
2020 1,77,000
Geeta Handa
12. Calculation of Adjusted Profit / Normal Business Profit
Years 31
March
Profits
(Rs.)
Less Abnormal
Gain (Profit)
2016 (90,000)
2017 1,60,000 ─ 50,000
2018 1,50,000
2019 65,000
2020 1,77,000
Geeta Handa
13. Calculation of Adjusted Profit / Normal Business Profit
Years 31
March
Profits
(Rs.)
Less Abnormal
Gain (Profit)
Add Abnormal
Loss
2016 (90,000)
2017 1,60,000 ─ 50,000
2018 1,50,000 + 20,000
2019 65,000
2020 1,77,000
Geeta Handa
14. Calculation of Adjusted Profit / Normal Business Profit
Years 31
March
Profits
(Rs.)
Less Abnormal
Gain (Profit)
Add Abnormal
Loss
Add Capital
Expenditure
2016 (90,000)
2017 1,60,000 ─ 50,000
2018 1,50,000 + 20,000
2019 65,000 +1,00,000
2020 1,77,000
Geeta Handa
15. Geeta Handa
Working Note :
Depreciation on Machinery Purchased On 1st July 2018 @20% on Written Down Value Method
• From 1st July 2018 to 31st March 2019 (for 9 months) => 1,00,000 X
20
100
X
9
12
= Rs.15,000
( On Cost Rs.100,000)
• From 1st April 2019 to 31st March 2020 (for 1 Year) => 85,000 X
20
100
= Rs.17,000
( On Book Value = 1,00,000 ─ 15,000 = 85,000)
16. Calculation of Adjusted Profit / Normal Business Profit
Years 31
March
Profits
(Rs.)
Less Abnormal
Gain (Profit)
Add Abnormal
Loss
Add Capital
Expenditure
Less
Depreciation
2016 (90,000)
2017 1,60,000 ─ 50,000
2018 1,50,000 + 20,000
2019 65,000 +1,00,000 ─15,000
2020 1,77,000 ─ 17,000
Geeta Handa
17. Calculation of Adjusted Profit / Normal Business Profit
Years 31
March
Profits
(Rs.)
(a)
Less Abnormal
Gain (Profit)
(b)
Add Abnormal
Loss
(c)
Add Capital
Expenditure
(d)
Less
Depreciation
(e)
Adjusted Profit
(Rs.)
(a –b + c + d – e)
2016 (90,000) (90,000)
2017 1,60,000 ─ 50,000 1,10,000
2018 1,50,000 + 20,000 1,70,000
2019 65,000 +1,00,000 ─ 15,000 1,50,000
2020 1,77,000 ─17,000 1,60,000
Geeta Handa
18. Calculation of Adjusted Profit / Normal Business Profit
Years 31
March
Profits
(Rs.)
(a)
Less Abnormal
Gain (Profit)
(b)
Add Abnormal
Loss
(c)
Add Capital
Expenditure
(d)
Less
Depreciation
(e)
Adjusted Profit
(Rs.)
(a –b + c + d – e)
2016 (90,000) ─ 90,000
2017 1,60,000 ─ 50,000 + 1,10,000
2018 1,50,000 + 20,000 + 1,70,000
2019 65,000 +1,00,000 ─ 15,000 + 1,50,000
2020 1,77,000 ─17,000 + 1,60,000
Total Adjusted Profits 5,00,000
Geeta Handa
19. Geeta Handa
Average Profit =
Total Adjusted Profits
No. of Years
=
5,00,000
5
= Rs.1,00,000
Goodwill = Average Profits X No. of Years’ Purchased
= 1,00,000 X 3 = Rs.3,00,000
Answer : Goodwill = Rs. 3,00,00
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