Victory Co. manufactures cloth, applies perpetual inventory system and deductible VAT method. The following information is...

  

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Victory Co. manufactures cloth, applies perpetual inventory system and deductible VAT method. The following information is available in the year N: ARTICLE A. ASSETS I. SHORT-TERM ASSETS 1. Cash 2. Short-term receivables 3. Prepayment to supplier 4. Inventory II. LONG-TERM ASSETS 5. Tangible fixed assets + Historical cost + Accumulated depreciation B. LIABILITIES AND OWNER'S EQUITY I. LIABILITIES 6. Current liabilities + Payable to suppliers, + Advances from customers II. OWNER'S EQUITY BALANCE SHEET At 31/12/N-1 7. Capital 8. Retained earnings BEGINNING BALANCE (CU: 1.000 VND) ENDING BALANCE 43.570.000 20.320.000 3.000.000 14.500.000 2.000.000 820.000 20.250.000 20.250.000 X1 (?) 43 570.000 7.570.000 7.570.000 7.000.000 570.000 36.000.000 33.000.000 3.000.000 1. 2nd January, Liquidated an equipment used in the Administrative department. Historical cost: X2, accumulated depreciation: X3. Revenue from liquidation was not paid: 200.000 2. 3rd January, purchased on credit material A at total price X4 (excluded 10% VAT) transportation expense was paid in cash on hand: 30.000. The amount of material A purchased: 1.100 kg. 3. 10th January, issued 3000 kg material A for manufacturing cloth 4. 28th February, purchased on credit a manufacturing equipment at total price X5 (excluded 10% VAT), transportation expense and related testing expense was paid in cash: 100.000. The equipment was used on 1st March. Estimated useful life: 5 years. The payment of the equipment must be made after 1 year 5. Total salary payables paid by cash: 2.000.000, in which: payables to direct labor: 500,000, to factory management personnel: 100,000, sales staff: 600,000, general administrative staffs: 800,000 6. Total depreciation cost incurred in the year: 720.000 (excluded the depreciation cost of the fixed asset purchased in February). In which: Depreciation cost for production department: 480,000, for sale department: 140,000, for administration department: 100,000 7. Cash paid for outside service expenses: 750,000. In which, the expenses incurred in production department: 150,000, in sale department: 350,000, in administrative department: 250,000 8. In this year, 1.000 finished goods were sent to warehouse. There is no work-in-progress at the beginning and end of the year 9. On the 20th December, sold on credit 900 finished goods to Star Co. Price before VAT: X6/unit 10. On the 25th December, received 10 returned products. Required: 1. Complete missing information and make any necessary assumption (beginning account balance, ending account balance, accounting policies...) to make journal entries for the above transactions (including depreciation entries, clossing entries, if any). Calculate profit after CIT and make double entries for this process. Knowing that CIT rate: 20% 2. Prepare Balance Sheet and Income Statement for the year N.. Make comment on Victory's financial position 4. In case the transaction 25th December on was omitted, identify the impact of omitted entries on Balance Sheet and Income Statement. Victory Co. manufactures cloth, applies perpetual inventory system and deductible VAT method. The following information is available in the year N: ARTICLE A. ASSETS I. SHORT-TERM ASSETS 1. Cash 2. Short-term receivables 3. Prepayment to supplier 4. Inventory II. LONG-TERM ASSETS 5. Tangible fixed assets + Historical cost + Accumulated depreciation B. LIABILITIES AND OWNER'S EQUITY I. LIABILITIES 6. Current liabilities + Payable to suppliers, + Advances from customers II. OWNER'S EQUITY BALANCE SHEET At 31/12/N-1 7. Capital 8. Retained earnings BEGINNING BALANCE (CU: 1.000 VND) ENDING BALANCE 43.570.000 20.320.000 3.000.000 14.500.000 2.000.000 820.000 20.250.000 20.250.000 X1 (?) 43 570.000 7.570.000 7.570.000 7.000.000 570.000 36.000.000 33.000.000 3.000.000 1. 2nd January, Liquidated an equipment used in the Administrative department. Historical cost: X2, accumulated depreciation: X3. Revenue from liquidation was not paid: 200.000 2. 3rd January, purchased on credit material A at total price X4 (excluded 10% VAT) transportation expense was paid in cash on hand: 30.000. The amount of material A purchased: 1.100 kg. 3. 10th January, issued 3000 kg material A for manufacturing cloth 4. 28th February, purchased on credit a manufacturing equipment at total price X5 (excluded 10% VAT), transportation expense and related testing expense was paid in cash: 100.000. The equipment was used on 1st March. Estimated useful life: 5 years. The payment of the equipment must be made after 1 year 5. Total salary payables paid by cash: 2.000.000, in which: payables to direct labor: 500,000, to factory management personnel: 100,000, sales staff: 600,000, general administrative staffs: 800,000 6. Total depreciation cost incurred in the year: 720.000 (excluded the depreciation cost of the fixed asset purchased in February). In which: Depreciation cost for production department: 480,000, for sale department: 140,000, for administration department: 100,000 7. Cash paid for outside service expenses: 750,000. In which, the expenses incurred in production department: 150,000, in sale department: 350,000, in administrative department: 250,000 8. In this year, 1.000 finished goods were sent to warehouse. There is no work-in-progress at the beginning and end of the year 9. On the 20th December, sold on credit 900 finished goods to Star Co. Price before VAT: X6/unit 10. On the 25th December, received 10 returned products. Required: 1. Complete missing information and make any necessary assumption (beginning account balance, ending account balance, accounting policies...) to make journal entries for the above transactions (including depreciation entries, clossing entries, if any). Calculate profit after CIT and make double entries for this process. Knowing that CIT rate: 20% 2. Prepare Balance Sheet and Income Statement for the year N.. Make comment on Victory's financial position 4. In case the transaction 25th December on was omitted, identify the impact of omitted entries on Balance Sheet and Income Statement.

Answer rating: 100% (QA)

1 Journal entries 21 Equipment 200000 Sales 200000 31 Inventory 1100000 Accounts payable 1100000 101 ... View the full answer