Debussy Company has prepared a set of financial statements: balance sheet, income statement and statement of retained
Question:
1 Show the impact on the financial statements of the end-of-period transactions or events which are described in Exhibit 2
2 Update the financial statements in Exhibit 1 taking into account these transactions and events. Exhibit 1 Preliminary financial statements (000 CU)
Exhibit 2 End-of-period entries (all amounts in 000 CU)
1 Depreciation expense on the building is 80 CU for X1.
2 Part of the building owned by the company has been rented to other companies with occupancy starting on 1 September X1 The amount invoiced to the tenants (60 CU in total) was paid in advance for three months and collected in cash. It has been recorded in the item €˜Unearned rent revenue€™ at the time the payment was received.
3 Salaries are paid on a weekly basis. The amount corresponding to the last week of September (25 CU) will be paid at the beginning of October.
4 Interest on the note receivable has accrued for one month. It will be collected when the note is due at the end of December. The rate is 6 percent per annum.
5 Income tax at the rate of 30 percent applies to X1. The tax owed will be paid in the following accounting period.
6 An exceptional shareholders meeting held in September X1 decided on a cash dividends distribution of 800 CU (out of the retained earnings). The dividend will be paid out in October X1.
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Distribution
The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most...
Step by Step Answer:
Financial Accounting and Reporting a Global Perspective
ISBN: 978-1408076866
4th edition
Authors: Michel Lebas, Herve Stolowy, Yuan Ding