FOR THESE TWO QUESTIONS A and B, assume the accrual basis of accounting and a year-end...

Transcribed Image Text:

FOR THESE TWO QUESTIONS A and B, assume the accrual basis of accounting and a year-end of 31 December. Show your calculations. A. (10 marks) Pro Accountants Inc. (PAI) had the following transactions in 2021: A total of $1,450,000 was billed to clients for accounting services completed. During 2021, a total of $1,250,000 was collected from clients. This included $80,000 in respect of work that was carried out in 2020. In addition, at the end of December 2021, PAI was working on the accounting files of five new clients, none of which had been billed. Two contracts, valued at $50,000 each when complete, were only at the early preparation stage. However, the other three, valued at $70,000 each, were completed. Required: What was Pro Accountants' accounting services revenue for 2021? B. (14 marks) Mango Ltd reported earnings of $12 per share in 2021. The dividend payout ratio was 40%. John Peach owned 20% of the common shares, received a dividend cheque for $45,600. Required: i) How many shares does John Peach own? ii) What were Mango Ltd's net earnings in 2021? FOR THESE TWO QUESTIONS A and B, assume the accrual basis of accounting and a year-end of 31 December. Show your calculations. A. (10 marks) Pro Accountants Inc. (PAI) had the following transactions in 2021: A total of $1,450,000 was billed to clients for accounting services completed. During 2021, a total of $1,250,000 was collected from clients. This included $80,000 in respect of work that was carried out in 2020. In addition, at the end of December 2021, PAI was working on the accounting files of five new clients, none of which had been billed. Two contracts, valued at $50,000 each when complete, were only at the early preparation stage. However, the other three, valued at $70,000 each, were completed. Required: What was Pro Accountants' accounting services revenue for 2021? B. (14 marks) Mango Ltd reported earnings of $12 per share in 2021. The dividend payout ratio was 40%. John Peach owned 20% of the common shares, received a dividend cheque for $45,600. Required: i) How many shares does John Peach own? ii) What were Mango Ltd's net earnings in 2021?

Answer rating: 100% (QA)

Solution PART A Description Amount in Collection from clients Less Received for previous year 125000... View the full answer