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1)The following information was taken from the fixed assets register of Hogwarts Traders

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1)The following information was taken from the fixed assets register of Hogwarts Traders. The vehicles indicated below are the only vehicles owned by the sole trader. The company has a 31 December year end. Date Current Accumulated Hogwarts Traders: Asset Register Hogwarts Traders: Vehicle 1 Date 1 May 2015 Purchased Make and Toyota Hilux reg.: 2014 (FG765GP) Purchased Benji's Car Sales from: (Credit) Cost Price: 320 000.00 depreciation 21 333.33 depreciation 21 333.33 31 Dec 2015 29 866.67 51 200.00 31 Dec 2016 31 Dec 26 880.00 78 080.00 2017 24 192.00 102 272.00 Rate of 10% according Depreciation to reducing balance 31 Dec 2018 method. Sold to V. Limited 31 Dec ? ? 2019 Type of Sale: Date sold: Selling Price: Cash 1 July 2019 250 000.00
20 Date Current Accumulated depreciation depreciation ? ? 31 Dec 2019 Hogwarts Traders: Vehicle 2 Date 1 August 2019 Purchased Make and Hyundai Atos reg.: 2019 (ZV109GP) Purchased Hyundai from: AutoCashi Cost Price: R150 000 Rate of 15% according Depreciation: to straight line method. Sold to: Type of Sale: Date sold: Selling Price: Required: Prepare the following accounts in the general ledger of Hogwarts Traders for the financial year ended 31 December 2019 ONLY. Start with the opening balances. Balance the accounts at the end of the month. Ignore VAT Vehicles (34) Accumulated depreciation: Vehicles (934) Depreciation (2) Asset Disposal (4) Profit/Loss on sale of vehicles. (1) Show all your workings.

2)Strickland Company owes $200,000 plus $18,000 of accrued interest to Moran State Bank The debt is a 10-year, 10% note. During 2017, Strickland's business deteriorated due to a faltering regional economy. On Decem ber 31, 2017, Moran State Bank agrees to accept an old machine and cancel the entire debt. The machine has a cost of $390,00 accumulated depreciation of $221,000, and a fair value of $180,000. Instructions (a) Prepare journal entries for Strickland Company and Moran State Bank to record this debt settlement (b) How should Strickland report the gain or loss on the disposition of machine and on restructuring of debt in its 2017 income statement? (c) Assume that, instead of transferring the machine, Strickland decides to grant 15,000 shares of its common stock (510 par) which has a fair value of $180,000 in full settlement of the loan obligation. If Moran State Bank treats Stricklands stock as a trading investment, prepare the entries to record the transaction for both parties.lv *E14-22

3)Walsh Company manufactures and sells one product. The following information pertains to each of the company’s first two years of operations:

During its first year of operations, Walsh produced 50,000 units and sold 40,000 units. During its second year of operations, it produced 40,000 units and sold 50,000 units. The selling price of the company’s product is $58 per unit.

Required:

1. Assume the company uses variable costing:

a. Compute the unit product cost for Year 1 and Year 2.

b. Prepare an income statement for Year 1 and Year 2.

2. Assume the company uses absorption costing:

a. Compute the unit product cost for Year 1 and Year 2.

b. Prepare an income statement for Year 1 and Year 2.

3. Reconcile the difference between variable costing and absorption costing net operating income in Year.Req 1A Req 1B Req 2A Req 2B Reg 3 Assume the company uses variable costing. Prepare an income statement for Year 1 and Year 2. Walsh Company Income Statement Year 1 Year 2 Sales $ 2,320,000 $ 2,900,000 Variable expenses: 0 0 2,320,000 2,900,000 0 0 Net operating income (loss) $ 2,320,000 $ 2,900,000
Req 1A Req 1B Reg 2A Reg 2B Req Reconcile the difference between variable costing and absorption costing net operating income in Year 1. (Enter any losse deductions as a negative value.) Year 1 Year 2 $ 300,000 $ 460,000 Variable costing net operating income (loss) Add: Fixed manufacturing overhead cost released from inventory under absorption costing X 48,000 (48,000) Absorption costing net operating income (loss) $ 348,000 $ 412,000