1 . An annual insurance policy was purchased on October 1 , 2 0 2 3...
Question:
An annual insurance policy was purchased on October effective the same day, for
$ cash.
A count of supplies was done on December where $ worth of supplies was
found on hand.
TBCS uses a perpetual inventory system to account for inventory. Below is a breakdown of
inventory on hand at December :
Cost Net Realizable Value
Inventory Raw ingredients $ $
Inventory Finished goods $ $
The company ran out of cake and pastry flour, which is a key ingredient. They placed an
order for bags of the flour at a cost of $ each on December Terms of this
order were n FOB shipping point. The company received an email notifying them
of shipment on December and it generally takes businesses days to deliver.
Tiffany looked forward to replenishing stocks and adding them to inventory upon receipt.
TBCS has the following longlived assets:
Date of purchase Depreciation method
Land January
Buildings January Straightline
Estimated useful life years
Furniture January Doubledeclining balance
Estimated useful life years
Residual value $
Machinery July Unitsofproduction
Estimated to be able to produce units in total
Produced units in
Computer September Straightline
Estimated useful life years
Residual value $
Customers must pay a $ nonrefundable booking deposit for a catering package
provided by TBCS An analysis of bookings during indicated that deposits were received and credited to Deferred Revenue.
By December TBCS had provided the
catering service and completed of the bookings but had not recorded anything yet.
Cash received from all the sales is counted daily and is deposited in the companys bank
account at the end of each month. Bank reconciliations are prepared on an annual basis.
A local business made an advance payment of $ to TBCS on December for an
event to be held in March This amount was credited to Service Revenue at the time of
receipt.
TBCS delivered meals worth $ to a customer in October but has not received the
payment and all methods of contacting the customer have been exhausted and the amount
has been deemed uncollectible.
Tiffany has reviewed the accounts receivable balance and notes that of accounts
receivable balance relates to corporate events, and the rest relates to noncorporate
events. Normally TBCS collects all of its outstanding receivables. Due to the unusual
economic conditions during the year, Tiffany fears this year might be different. She
estimates that of corporate receivables might not be collected and of non
corporate receivables might not be collected.
TBCS has a monthly payroll of $ and pays its employees on the th of every month
for work done in the previous month. The payroll needs to be considered in preparing year
end financial statements.
The December utility bill of $ has not yet been recorded nor paid.
TBCS is subject to income tax and the tax rate is
Tiffany hired a payroll clerk, who is a very hard worker and did not take vacation in
Employees do not typically report payroll errors, so Tiffany does not monitor the payroll
clerk closely.