The gearing of a JK plc has reduced from 45% in 2020 to 37% in 2021. Answer TRUE or FALSE to indicate which of the following is/are VALID reasons for the decrease? (iii) JK have changed their accounting policy with regard to property. They are now using the revaluation model instead of the cost model (iv) JK made a bonus issue during the year
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The gearing of a JK plc has reduced from 45% in 2020 to 37% in 2021.
Answer TRUE or FALSE to indicate which of the following is/are VALID reasons for the
decrease?
(iii) JK have changed their accounting policy with regard to property. They are now using the
revaluation model instead of the cost model
(iv) JK made a bonus issue during the year
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- What is the effect of the errors on the working capital of 2020? Put a negative sign if the answer is overstated. Example overstated by 5000 is -5000. Bee Company's net income for 2018, 2019, and 2020 were P100,000; P145,000; and P185,000,respectively. The following items were not properly handled: a. Rent of P6,500 for 2021 was received from a lessee on December 31, 2020, and was recorded as outright income in 2020. b. Salaries payable at the end of the following years were omitted: December 31, 2017 2,500 December 31, 2018 5,500 December 31, 2019 7,500 December 31, 2020 4,700 c+ The following unused office supplies were omitted in the accounting records: December 31, 2017 3,500 6,500 December 31, 2018 December 31, 2019 3,700 December 31, 2020 7,100* What is the effect of the errors on the working capital of 2020? Put a negative sign if the answer is overstated. Example overstated by 5000 is -5000. Bee Company's net income for 2018, 2019, and 2020 were P100,000; P145,000; and P185,000,respectively. The following items were not properly handled: a. Rent of P6,500 for 2021 was received from a lessee on December 31, 2020, and was recorded as outright income in 2020. b. Salaries payable at the end of the following years were omitted: December 31, 2017 2,500 5,500 December 31, 2018 December 31, 2019 7,500 December 31, 2020 4,700 c+ The following unused office supplies were omitted in the accounting records: December 31, 2017 3,500 December 31, 2018 6,500 December 31, 2019 3,700 December 31, 2020 7,100 Your answerAssume that The Bell Company operates in an industry for which NOL carryback is allowed. The Bell Company had the following operating results: Year Income (loss) Tax rate Income tax 2018 40,000 25 % 10,000 2019 40,000 25 % 10,000 2020 50,000 30 % 15,000 2021 (130,000 ) 30 % 0 What is the Deferred tax Asset in 2021?
- What is the amount of net income after tax that Vignette Company should report for the year 2021? Vignette Construction Company changed from completed contract method to the percentage of completion method of accounting for long-term construction contracts during 2021. For tax purposes, the company employs the completed contract method and will continue this approach in the future. The appropriate information related to this change is as follows: Pre-tax Income from Percentage of Completion 2020 2,028,000 1,820,000 Completed Contract 1,534,000 1,248,000 2021 Income tax rate is 35%. What is the amount of net income after tax that Vignette Company should report for the year 2021? Your answerOn 01.10.20X1, TK transfers the annual rent of EUR 7,000 for the business and office space for one year in advance. Which of the following statements regarding business transactions in 20X1 is/are correct? O The annual rent reduces the profit in 20X1 by EUR 7,000. O Another liability must be recognized. O The payout is EUR 7,000 and the expense is EUR 1,750. O An anticipatory deferred item must be formed.Cullen Construction Company, which began operations in 2020, changed from the completed-contract to the percentage-of-completion method of accounting for long-term construction contracts during 2021. For tax purposes, the company employs the completed-contract method and will continue this approach in the future. The appropriate information related to this change is as follows. Pretax Income from Percentage-of-Completion Completed-Contract Difference 2020 $880,000 $590,000 $290,000 2021 900,000 480,000 420,000 Instructions a. Assuming that the tax rate is 20%, what is the amount of net income that would be reported in 2021? b. What entry(ies) are necessary to adjust the accounting records for the change in accounting principle?
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- Question 4: Timberlake Ltd, a partially exempt company for the purposes of value added tax (VAT), requires advice on simplifying the way in which it accounts for VAT. -Timberlake Ltd is partially exempt for the purposes of VAT. -Timberlake Ltd’s turnover for the year ended 31 March 2019 was £240,000 (VAT exclusive). -Timberlake Ltd’s turnover for the year as a whole for VAT purposes comprised 86% taxable supplies and 14% exempt supplies. -The input VAT suffered by Timberlake Ltd on expenditure during the year ended 31 March 2019 was: £ Wholly attributable to taxable supplies 7,920 Wholly attributable to exempt supplies 1,062 Unattributable 4,150 Timberlake Ltd expects its turnover and expenditure figures to increase by approximately 25% next year. The director of…Question 4: Timberlake Ltd, a partially exempt company for the purposes of value added tax (VAT), requires advice on simplifying the way in which it accounts for VAT. -Timberlake Ltd is partially exempt for the purposes of VAT. -Timberlake Ltd’s turnover for the year ended 31 March 2019 was £240,000 (VAT exclusive). -Timberlake Ltd’s turnover for the year as a whole for VAT purposes comprised 86% taxable supplies and 14% exempt supplies. -The input VAT suffered by Timberlake Ltd on expenditure during the year ended 31 March 2019 was: £ Wholly attributable to taxable supplies 7,920 Wholly attributable to exempt supplies 1,062 Unattributable 4,150 Timberlake Ltd expects its turnover and expenditure figures to increase by approximately 25% next year. The director of…During the preparation of financial statement for Master Ltd for 2023 it was discovered thatan amount of $22,000, incurred in September 2021 and payable to an overseas supplier, wasoverlooked and not paid or provided for in the financial statement ending 30 June 2022. Theamount is considered to be material and will be permitted as a deduction for tax purposes(tax rate 30%).Required:i) Prepare the necessary journal entry to correct this error.