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Hey, I need this one done like in 10 hours, its a tough call but Kindly be sure that you will deliver correct solutions
Please note:
In regards to my request, please remove “Brokerage costs were $0.05 per share plus a flat feeof $29.00.” from Entry 1. It is not necessary for the assignment and should be omitted
Sheet1
| Colton’s Western Wear | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Unadjusted Trial Balance | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| As at December 31, 20X4 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Account | DR | CR | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cash | 146,358.00 | – 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accounts receivable — trade | 4 | 2,500.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Allowance for doubtful accounts | 1,468.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Prepaid insurance | 11,500.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Inventory — clothing | 30,780.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Inventory — boots | 113,930.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Inventory — related products | 35,550.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Investment in PLZ shares (at FVPL) | 8 | 4,240.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Investment in General Company bonds (at amortized cost) | 2 | 50,000.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Investment in mortgage option (at FVOCI) | 5,000.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Investment in mortgages (at FVOCI) | 512,000.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Land | 279,400.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Warehouse | 126,000.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accumulated depreciation — warehouse | 27,550.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Store | 368,400.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accumulated depreciation — store | 78,285.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tools and other equipment | 38,850.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accumulated depreciation — tools and other equipment | 24,605.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Vehicles — delivery, service, sales | 35,000.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accumulated depreciation — vehicles | 14,400.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Office equipment | 8,500.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accumulated depreciation — office equipment | 3,400.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Computer equipment | 12,300.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accumulated depreciation — computer equipment | 4,950.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Customer list | 10,000.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accumulated amortization — customer list | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accounts payable | 109,590.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Payroll taxes payable | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Short-term note payable | 3,500.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Current portion of long-term debt | 7,200.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Long-term debt | 36,000.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Preferred shares (2,000 shares outstanding) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common shares (750 shares @ $400 / share) | 300,000.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Retained earnings | 237,957.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Revenue — merchandise | 2,637,508.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Revenue — related products | 571,577.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Revenue — clothing | 526,225.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Revenue — other | 198,600.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cost of goods sold — boots | 1,424,192.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cost of goods sold — related products | 355,944.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cost of goods sold — clothing | 310,500.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Advertising | 4,500.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Audit and legal fees | 13,907.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bad debts | 1,275.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest expense — long-term debt | 3,225.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Insurance expense — property, building and casualty | 23,700.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Insurance — automobile | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Investment transaction costs | 309.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Janitorial services | 7, | 800.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Office expenses | 4,800.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property taxes | 18,600.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Training and development | 3,200.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Telephone | 6,685.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Utilities | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Wages, salaries and benefits | 432,000.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dividend income | 2,025.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gain (loss) through P&L on Investment in PLZ shares | 52,785.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mortgage interest income | 57,980.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gain / loss on sale of property, plant and equipment | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income tax expense | 225,000.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | 4,955,645 |
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are trademarks and/or certification marks of the Chartered Professional Accountants of Canada.
© 2018, Chartered Professional Accountants of Canada. All Rights Reserved.
Module 5.1
Intermediate Financial
Reporting 1
Project 2
Module 5.1 — Intermediate Financial Reporting 1
2 / 6
PROJECT 2 (30 marks)
1. In February 20X4, Colton’s Western Wear (CWW) invested excess cash in shares of PLZ
Corporation, a publicly traded company with over 1,000,000 shares outstanding. CWW
bought 2,700 shares at $11.65 per share. The shares were bought on speculation that they
would increase in value, as analyst valuations for the next 12 months were that the shares
would trade in the $31 to $36 range. Brokerage costs were $0.05 per share plus a flat fee
of $29.00. The closing price of the shares and the dividends per share are as follows for the
quarter-ends:
Closing value on the
stock exchange Dividend per share
February 17, 20X4 $11.65 —
March 31, 20X4 $16.20 $0.24
June 30, 20X4 $22.75 $0.25
September 30, 20X4 $31.20 $0.26
December 31, 20X4 $29.85 $0.26
The dividends were declared by the board of PLZ on the 15th of the months noted and
were payable on the last day of the month.
2. In 20X2, CWW bought the mortgages on two properties in Edmonton. The company
receives monthly payments that include principal and interest. One mortgage will be repaid
in full in 14 years and the other in 18 years. CWW bought the mortgages with the intention
of selling them at a profit when the financial conditions improve. However, both mortgagees
are struggling financially, and the underlying value of the properties has declined. In
December 20X4, CWW had the value of the mortgages appraised, and the appraisal
showed a total impairment of $38,500 on the mortgages. Interest and principal have been
properly recorded for this investment.
3. On July 1, 20X4, CWW bought General Company Inc.’s bonds for $250,000. The interest
rate on the bonds is 7% per annum, which is equal to the market rate. Interest is paid on
June 30 and December 31 each year. CWW intends to hold the bonds until they mature on
June 30, 20X9. At year end, CWW had not yet received the semi-annual interest payment
that was due on December 31, 20X4. The market value of the bonds was $254,500 on
December 31, 20X4.
Module 5.1 — Intermediate Financial Reporting 1 Project 2
3 / 6
For items 4 and 5, see the schedule after item 5.
4. On January 1, 20X1, CWW bought the customer list of a retail store that was closing down
for $10,000. The list was expected to have value for five years.
The half-year rule is applied in depreciating property, plant and equipment, including
intangible assets. The company takes a half-year of depreciation in the year of acquisition
and a half-year of depreciation in the year of disposal.
5. In October 20X4, the company bought a new delivery vehicle. The cost was $18,500. The
vehicle is expected to have a five-year life and a $2,000 residual value. On December 31,
20X4, the company sold the old delivery vehicle for $800; however, the journal entry to
account for the sale of the vehicle has not been booked yet. On December 31, 20X4, the
cash from the sale was deposited into CWW’s bank account.
The transaction was journalized as follows:
DR Cash 800
CR Gain on sale of equipment 800
All capital assets up to December 31, 20X3, are shown in the schedule below.
Module 5.1 — Intermediate Financial Reporting 1 Project 2
4 / 6
Life (in years) Cost, opening Residual value
Accumulated
depreciation to
December 31, 20X3
Net book value, at
December 31, 20X3
Land — warehouse n/a 85,000.00 — — 85,000.00
Land — store n/a 194,400.00 — — 194,400.00
279,400.00 — — 279,400.00
Warehouse (building) 40 126,000.00 10,000.00 27,550.00 98,450.00
Store 40 368,400.00 — 78,285.00 290,115.00
Tools and other equipment 15 38,850.00 — 24,605.00 14,245.00
Vehicles — delivery, service, sales — old 5 16,500.00 500.00 14,400.00 2,100.00
Vehicles — delivery, service, sales — new 5 — 2,000.00 — —
549,750.00 12,500.00 144,840.00 404,910.00
Office equipment 20 8,500.00 500.00 3,400.00 5,100.00
Computer equipment — old 3 10,500.00 600.00 4,950.00 5,550.00
Computer equipment — new 3 — — — —
19,000.00 1,100.00 8,350.00 10,650.00
848,150.00 13,600.00 153,190.00 694,960.00
Customer list 5 10,000.00 — 5,000.00 5,000.00
Module 5.1 — Intermediate Financial Reporting 1 Project 2
5 / 6
CWW reports its financial information using IFRS.
The opening trial balance for CWW is presented below.
Colton’s Western Wear
Unadjusted trial balance
As at December 31, 20X4
Account DR CR
Cash $ 146,358.00 —
Accounts receivable — trade 42,500.00 —
Allowance for doubtful accounts — $ 1,468.00
Prepaid insurance 11,500.00 —
Inventory — clothing 30,780.00 —
Inventory — boots 113,930.00 —
Inventory — related products 35,550.00 —
Investment in PLZ shares (at FVPL) 84,240.00 —
Investment in General Company bonds (at
amortized cost) 250,000.00 —
Investment in mortgage option (at FVOCI) 5,000.00 —
Investment in mortgages (at FVOCI) 512,000.00 —
Land 279,400.00 —
Warehouse 126,000.00 —
Accumulated depreciation — warehouse — 27,550.00
Store 368,400.00 —
Accumulated depreciation — store — 78,285.00
Tools and other equipment 38,850.00 —
Accumulated depreciation — tools and other
equipment — 24,605.00
Vehicles — delivery, service, sales 35,000.00 —
Accumulated depreciation — vehicles — 14,400.00
Office equipment 8,500.00 —
Accumulated depreciation — office equipment — 3,400.00
Computer equipment 12,300.00 —
Accumulated depreciation — computer equipment — 4,950.00
Customer list 10,000.00 —
Accumulated amortization — customer list — 5,000.00
Accounts payable — 109,590.00
Payroll taxes payable — 4,240.00
Short-term note payable — 3,500.00
Current portion of long-term debt — 7,200.00
Long-term debt — 36,000.00
Preferred shares (2,000 shares outstanding) — 50,000.00
Common shares (750 shares @ $400 / share) — 300,000.00
Retained earnings — 237,957.00
Revenue — merchandise — 2,637,508.00
Revenue — related products — 571,577.00
Module 5.1 — Intermediate Financial Reporting 1 Project 2
6 / 6
Revenue — clothing — 526,225.00
Revenue — other — 198,600.00
Cost of goods sold — boots 1,424,192.00 —
Cost of goods sold — related products 355,944.00 —
Cost of goods sold — clothing 310,500.00 —
Advertising 4,500.00 —
Audit and legal fees 13,907.00 —
Bad debts 1,275.00 —
Interest expense — long-term debt 3,225.00 —
Insurance expense — property, building and
casualty 23,700.00 —
Insurance — automobile 2,500.00 —
Investment transaction costs 309.00 —
Janitorial services 7,800.00 —
Office expenses 4,800.00 —
Property taxes 18,600.00 —
Training and development 3,200.00 —
Telephone 6,685.00 —
Utilities 7,200.00 —
Wages, salaries and benefits 432,000.00 —
Dividend income — 2,025.00
Gain / loss through P&L on investment in PLZ
shares — 52,785.00
Mortgage interest income — 57,980.00
Gain / loss on sale of property, plant and
equipment — 800.00
Income tax expense 225,000.00 —
Total $4,955,645.00 $4,955,645.00
Required:
Submit the following in your response:
1. The adjusting journal entries with supporting calculations (26 marks)
2. Adjusted trial balance (1 mark)
3. The statement of comprehensive income (1 mark)
4. The statement of changes in equity (1 mark)
5. The statement of financial position (1 mark)
While preparing the financial statements of CWW for the year ended December 31, 20X4,
assume that income tax expense will remain unchanged for this scenario.
