Reference no: EM13504016

Question 1.

The following questions are required to be answered relate to the course text

Questions

a) Statement of Cash flows direct method Chapter 18 ; 

Required

i.  Prepare a cash flow statement using the direct method for operating cash flows

ii. Prepare a reconciliation of the profit and cash provided by the operations

b) Bank reconciliation

Required prepare a bank reconciliation for the Month ended the 31 March 2001

c) Accounting for Shares

Demons Ltd issued a prospectus for the issue of 100,000 $5.00 shares on 1 January2012.The prospectus required payment of $3.00 per share on application and $2.00 to be paid when called.

The company received applications for 120,000 shares by the closing date of 28February 2012.100,000 shares were issued on 1 March 2012 with excess application money being refunded.

On 30 April 2012 the company called the balance of $2.00 on the shares. All call money was received by 15 May 2012.On 30 June 2012 Demons Ltd declared and paid a dividend of 5 cents per share.

Required:

Prepare the journal entries for the year ended 30 June 2012 to account for the above transactions.

d) Accounting for Liabilities

Easy Company Ltd issues a debenture at a premium for a period of 10 years the company pays interest on 31 December and 1 July. The debenture has a par value of $1,000,000.00 and is issued at premium of 105 at an interest rate of 9%                  

Prepare journal entries to reflect the following;                                                         

i. issue of debentures on 1-July

ii. payment of interest on 1 January

iii. accrual on 31 March

e) Accounting for Inventory

f) Analysis of Accounting Information

g) Preparation of production and cash budget 10 marks

Budget data
	unit sales
January	25,000.00
February	30,000.00
March	32,000.00
selling price		$        10.00	per unit
cash sales			20%	during month of sale
Collections on account			50%	in month of sale
Collections on account			25%	after month of sale
Amount uncollectable			5%
balance on accounts receivable at 1 January					$             420,000.00
Of which $350,000 relates to December sales and the remainder related to November sales
5% of the total balance  is uncollectable
prepare sales budget for the quarter
prepare cash collections budget for the quarter
Calculate the  balance in accounts receivable at the end of March