Reference no: EM131712381

Assignment 1

Ling Corporation

1 COGS includes amortization of $65,000

2 Other operating expenses includes amortization of deferred development costs of $5,000

3 During 20x7, the corporation issued preferred shares with a market value of $22,000 for 1,000 common shares of THB Corporation. The THB shares are being held as a long-term investment. Market value and cost are identical for long-term investments.

4 Old equipment was sold for $9,000; the original cost was $25,000

5 Bonds with a face value of $20,000 was repurchased at par and retired.

6 Other operating expenses includes a loss of $2,000 from liquidating the short-term investments for net proceeds of $22,000

Requirement:

a) Prepare the Statement of Cash Flow for Ling Corp. using indirect method, please include related notes disclosure according to IFRS.

b) Show cash paid income tax in the operating activities.

c) Show cash paid of dividend in the financing activities.

d) Prepare the operating activities using the direct method.

Assignment 2

As of Demember 31, 2017 Moon Company provided the following selective accounts:

Opening balances as of January 1, 2017:
Accounts receivable
Allowance for doubtful accounts
For the period ended December 31, 2017:
Sales revenue from credit sales
Sales return and allowance

Other information:
Uncollectible account to be written off during 2017 on customer Mr. Penniless
Cash collected from accounts receivable during 2017

Required:

Rounding all numbers to the nearest dollar,
a) Provide the journal entries to write of uncollectible account
b) Provide all journal entries for accounts receivable and allowance account for the following independent cases:

Case I - bad debt expense is estimated to be 2.5% of net credit sales
Case II - bad debt expense is estimated to be 4.5% of accounts receivable balance
Case III - bad debt expense is estimated based on the following aging schedule which excludes Mr. Penniless  account