Group 7 class 1326 s2234 final test principle of accounting

Depreciation is a process of asset valuation, not cost allocation Depreciation provides for the proper matching of expenses with revenues.. Four factors affect the computation of depreci

IE

WORLD CLASS EDUCATION

MON: NGUYEN LY KE TOAN

IE

iy ĐẠI HỌC BỘ GIÁO DỤC VÀ ĐÀO TẠO

WORLD CLASS EDUCATION

MON: NGUYÊN LÝ KẺ TOÁN

MUC LUC

i/00ein si .::LL LỜI CAM KẾTT - - tSS 11 TS EEET HH HT HT HH HH HT HT HT HH HH HH HH ngu 2

LOL CAM KET

“Chúng tôi đã đọc và hiều các hành vi vi phạm liêm chính học thuật Chúng tôi cam kết băng

chính danh sự của mình răng đây là bài báo cáo nhóm chúng tôi tự thực hiện và không vi phạm liêm chính học thuật Chúng tôi xin hoàn toàn chịu trách nhiệm trước nhà trường về sự cam két

này.”

LỜI CÁM ƠN

Lời đầu tiên, chúng em xin gửi lời cảm ơn đến khoa Kinh tế quản trị tường Đại học Hoa Sen đã

đưa môn học Nguyên lý kế toán vào giảng dạy Đây là một môn học rất hay và cho chúng em

nhiều kiến thức bê ích Bên cạnh đó chúng em xin gửi lời cảm ơn sâu sắc nhất đến cô Lê Thị

Bích Thảo - người đã trực tiếp hướng đẫn chúng em hoàn thành bài tiêu luận này

Trong quá trình làm bài, do hiểu biết của chúng em còn nhiều hạn chế nên bài làm khó tránh

khỏi những thiếu sót Mong cô xem và góp ý thêm cho chúng em dé bai lam ngày càng hoàn

thiện

Chúng em xin chân thành cảm ơn!

BANG DANH GIA MUC DO HOAN THANH CONG VIEC

I CASES

Kathy and James Mohr, opened the Chip-Shot Driving Range Company on March 1, 20X3 They invested $25,000 cash and received common stock in exchange for their investment A caddy shack was constructed for cash at a cost of $8,000, and $800 was spent on golf balls The company leased five acres of land at a cost of $1,000 per month and paid the first month’s rent

During the first month, advertising costs totaled $750, of which $150 was unpaid at March 31, and $1,340 was paid to members of the golf team for retrieving golf balls All revenues from customers were deposited in the company’s bank account On March 15, Kathy and James

received a dividend of $1,000 A $100 utility bill was received on March 31 but was not paid On March 31, the balance in the company’s bank account was $18,900

Required How much Revenue and net income (or profit) that the company has in the business operated? Calculate and specific explanations

=> Answer:

Investment and Capital Stock: Kathy and James invested $25,000 cash and received common stock in exchange => This does not affect revenue or expenses since it's an investment by the owners (Owner’s capital)

Expenses:

- Caddy shack: $8,000

- Golf balls: $800

- Lease: $1,000 (for the first month)

- Advertising: $750 (total), of which $150 is unpaid

Golf team payment: $1,340

=> Total expenses: $8,000 + $800 + $1,000 + $750 - $150 + $1,340 = $11,740

Revenue: The revenue generated from customers isn't explicitly provided in the scenario It's

important to note that revenue is typically earned from services provided to customers Since the exact revenue amount isn't given, we'll assume a revenue value

Dividend: A dividend of $1,000 was paid to Kathy and James on March 15 Dividends are not considered expenses; they are distributions of profits to the owners

Utility Bill: A utility bill of $100 was received but not paid This unpaid bill will be recorded

as a liability but won't impact revenue or expenses directly

Ending Bank Balance: The ending bank balance on March 31 was $18,900 This is not directly relevant to revenue or expenses

Net Income = Revenue - Expenses

Since the exact revenue is not given, we assume a hypothetical revenue of $30,000 for the first month

= Net Income = $15,000 - $11,740 = $3,260

(Please note that this calculation is based on the assumptions made regarding the revenue amount Additionally, this calculation does not take into account other potential expenses such as the unpaid advertising cost and the unpaid utility bill, as they are not specified to impact the revenue directly)

Depreciation is a process of asset valuation, not cost allocation

Depreciation provides for the proper matching of expenses with revenues

The book value (carrying amount) of a plant asset should approximate its fair value Depreciation applies to three classes of plant assets: land, buildings, and equipment Depreciation does not apply to a building because its usefulness and revenue-producing ability generally remain intact over time

The revenue-producing ability of a depreciable asset will decline due to wear and tear and to obsolescence

Recognizing depreciation on an asset results in an accumulation of cash for replacement

10 Four factors affect the computation of depreciation: cost, useful life, salvage value,

and residual value

Required: Identify each statement as true or false If false, indicate how to correct the statement

1 : Depreciation is a process of cost allocation, where the cost of an asset is allocated over its useful life

{fWE: Depreciation helps in matching the expenses of an asset with the revenues it

generates

False: The book value (carrying amount) of a plant asset may not necessarily

approximate its fair value Fair value is determined based on market conditions and may differ from the book value

[0f@E: Depreciation applies to three classes of plant assets: land, buildings, and

equipment

False: Buildings can also be subject to depreciation as their useful life and revenue- producing ability may decrease over time

(WE: The revenue-producing ability of a depreciable asset will decline due to wear and

tear and obsolescence over its useful life

False: Recognizing depreciation on an asset does not result in an accumulation of cash for replacement Depreciation is a non-cash expense

False: The balance in accumulated depreciation represents the accumulated amount of depreciation charged to the asset over its useful life, not the total cost of the asset that has been charged to expense

False: Depreciation expense is reported on the income statement, but accumulated depreciation is reported on the balance sheet as a contra-asset account

10 iS: The four factors that affect the computation of depreciation are cost, useful life, salvage value (sometimes referred to as residual value), and estimated residual value.

Il INVENTORY COSTING Balboa Bank and Trust are considering giving Rodrigo Company a loan Before doing so, they decide that further discussions with Rodrigo’s accountant may be desirable One area of

particular concern is the inventory account, which has a year-end balance (December 31) of

$297,000 Discussions with the accountant reveal the following

1 Rodrigo sold goods costing $38,000 to Santoro Company, FOB shipping point, on December 28 The goods are not expected to arrive at Santoro until January 12 The goods were not included in the physical inventory because they were not in the

warehouse

= Goods sold to Santoro on December 28 but not yet arrived at their destination should

not be included (no adjustment) in the inventory, as they were not in the warehouse The physical count of the inventory did not include goods costing $95,000 that were shipped to Rodrigo, FOB destination on December 27 and were still in transit at year-end

= Goods shipped to Rodrigo on December 27 and still in transit at year-end should not

(no adjustment) in the inventory, as they were shipped FOB destination Rodrigo received goods costing $22,000 on January 2 The goods were shipped FOB shipping point on December 26 by Penelope Co The goods were not included in the physical count

=> Goods received on January 2 that were shipped on December 26 should be

(4$22,000) included in the inventory, as they were shipped FOB shipping point Rodrigo sold goods costing $35,000 to Naomi Co., FOB destination, on December 30 The goods were received at Naomi on January 8 They were not included in Rodrigo’s physical inventory

Goods sold to Naomi on December 30 and received on January 8 should be

(4$35,000) included in the inventory, as they were shipped FOB destination

Rodrigo received goods costing $44,000 on January 2 that were shipped FOB destination

on December 29 The shipment was a rush order that was supposed to arrive December

31 This purchase was included in the ending inventory of $297,000

= Goods received on January 2 that were shipped on December 29 and included in the ending inventory of $297,000'should not belincluded (-$44,000) in the inventory Because Rodrigo received goods after December 31

The exact ending inventory balance on December 31:

v FOB destination: The responsibility remains with the seller until the goods are delivered

to the buyer’s specified destination The seller bears the transportation costs and is

responsible for any damage or loss during transit

10

Il ACCOUNTING CYCLES Hoang Minh Trading & Service Co Ltd., established in 2015, specializes in trading product X in nutritional food The company uses a perpetual inventory system, first-in-first-out (FIFO), and straight-line depreciation

Beginning balance of accounts in Jan 1, 2023 are listed as follow

Aocounts / Tài khoán AN tin

Retained Earnings / Loi nhuán giữ lại 340,160,215

Notes payable / Vay ngan hang X = 7,594,833, 705 Accounts receivable / Phai thu khach hang 697,975,441 Accounts payable / Phai tra ngwoi ban 675,300,000

a Using the accounting equation, calculate the Notes Payable (Y) on January 1, 2023

= Retained Earnings + Owner’s Capital

eS 2CCOunts

The following are transactions incurred in January 2023

1 On January 2, purchase equipment and sign a note payable to borrow VND50,000,000 from the bank

2 On January 5, purchased supplies for cash, VND 25.100.000

3 On January 9, purchased 6.000 units of product X on account, purchase price

8 On January 28, the company was considering signing a sale contract to sell merchandise to

client C according to the delivery method to the warehouse’s C company

9 On January 31, accrued the salary expenses payable to the employees at the end of the month of VND 115.483.000

10 On January 31, accrued depreciation expense of VND 120.000.000

11 On January 31, paid VND 10.000.000 for online advertising on the VN Express website

12 Determine the profit after tax Assume that a corporate income tax rate is 20%

13

10,000,000

¢ Prepare Income Statement for the month ended January 31, 2023

HOANG MINH TRADING & SERVICE CO

INCOME STATEMENT MONTH-ENDED JANUARY 31, 2023

Tong doanh thu (Total Revenue): 3,300,000,000 Doanh thu ban hang &cung cap dich vu (Revenues) 3,300,000,000

Chi phi tign ich (Utilities expense) 27,315,000

Chị phí lương (Salaries Expense) 115,483,000

Chi phi khau hao (Depreciation expense) 120,000,000

Chi phi quang cao (Advertising expense) 10,000,000

Tổng lợi nhuận trước thuế thu nhập doanh nghiệp (Profit before Tax) | 1,258,202,000

Chi phi thuê thu nhập doanh nghiệp (Coporate Income Tax charge) | 251,640,400

Tổng lợi nhuận sau thuế thu nhập doanh nghiép (Profit after Tax) 1,006,561,600

18

d Prepare the Balance Sheet (Statement of Financial Position) as of January 31, 202

HOANG MINH TRADING & SERVICE CO

BALANCE SHEET JANUARY 31,2023

DAU THANG BEGINNING BALANCE TAI SAN (ASSETS)

T TAI SAN (TOTAL ASSETS)

NG (LIABILITIES AND OWNER

AND OWNER EQUITY) 18,722,711,154 | 21,358,396,1

19

IV.LEARNING OUTCOME After finishing the Accounting Principles class, we have gained a lot of beneficial knowledge:

1 Understanding the basics of accounting which helps us to interpret financial information easily

The ability of accurate calculations

We are able to distinguish FOB terms, for instance, FOB shipping point and FOB destination

We can read and analyze financial statements Additionally, we also know how to prepare financial statements ourselves

We get used to recording, and preparing journal entries

We are able to identify when revenue should be recognized and how to account for it properly Moreover, we become familiar with valuing assets, such as inventory, property, and equipment In addition, we know how to calculate and record depreciation expenses accurately

We understand different costing methods such as FIFO, weighted average, etc Learning accounting is helpful for us in planning to own our business in the future or investing in other business

In conclusion, thanks to the Accounting Principles class, we have had precious knowledge to improve ourselves as well as to support our future studies

20