Module Financial Management and Accounting (MBA51) complete 2023-24
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Course
MBA 51
Institution
Hellenic Open University
Module: Financial Management and Accounting (MBA51)
Academic Year: 2023-24
Subject 1 (25%)
A. (20%)
The unadjusted trial balance of the publishing company ABC as of December 31, 2022, is shown below:
ABC
Unadjusted trial balance December 31, 2022
Debit (€) Credit (€)
Equipment 78...
MASTER’S DEGREE PROGRAMME IN BUSINESS
ADMINISTRATION
Module: Financial Management and Accounting (MBA51)
Academic Year: 2023-24
1st Written Assignment (WA1)
Subject 1 (25%)
A. (20%)
The unadjusted trial balance of the publishing company ABC as of December 31, 2022, is
shown below:
ABC
Unadjusted trial balance
December 31, 2022
Debit (€) Credit (€)
Equipment 780,000 -
Accumulated Depreciation-equipment - 100,000
Inventory 180,000 -
Accounts receivable 120,000 -
Allowance for doubtful accounts - 12,000
Land 100,000 -
Cash 80,000 -
Share capital, € 10 par - 600,000
Contributed capital in excess of par - 200,000
Retained earnings - 220,000
Accounts payable - 44,000
Subscription revenue - 48,000
Notes payable, 4 % due March 1, 2027 - 400,000
Purchases of inventory 500,000 -
Administrative expense 160,000 -
Sales revenue (all on account) - 800,000
Salaries and wages expense 220,000 -
Insurance expense 60,000 -
Interest expense 24,000 -
Advertising expense 80,000 -
Rent expense 120,000 -
2,424,000 2,424,000
Additional information:
1. The ending inventory is €140,000.
2. The remaining useful life of the equipment is 12 years. On 31st December 2022 it is
estimated that the residual value of the equipment at the end of its useful life will be
€80,000. ABC applies the straight-line depreciation method.
3. The allowance for uncollectible accounts at the end of 2022 is estimated to be 15%
of the balance of the year-end balance in accounts receivable.
, MASTER’S DEGREE PROGRAMME IN BUSINESS
ADMINISTRATION
4. The interest on notes payable is paid semiannually, every 1 st of September and 1st of
March. The interest rate specified is an annual rate of interest.
5. Wages of €10,000 accrued during December were not recorded.
6. The amount of rent expense refers to payments made on January 1, 2022, for four
years’ rent (2022, 2023, 2024, 2025).
7. The amount of insurance expense refers to a payment for a one-year insurance
policy, paid July 31, 2022. The coverage from the insurance company begins on July
31, 2022.
8. The revenue from subscriptions represents cash received for a two-year subscription
to a scientific journal published by ABC. The subscription period begins on June 1,
2022.
Required:
1. Record the required adjusting journal entries.
2. Prepare the adjusted trial balance.
3. Prepare the closing entries.
4. Prepare the statement of financial position and the income statement for 2022.
Assume that ABC adopts the periodic inventory system while the income tax rate for
2022 is 20%. Assume that year’s accounting result will be carried forward.
B. (5%)
A manufacturing firm produces highly specialized industrial equipment. The length of the
time between purchasing raw materials to make the equipment and the date the firm
completes the production and delivers the equipment is usually 14 months. The firm
receives payment 15 months after the delivery of the equipment.
Required
Determine how should the company present its inventory and trade receivables in its
statement of financial position (explain your answer). (word limit: 500 words)
Subject 2 (25%)
A. (20%)
The manufacturing corporation ABC begun operations on October 1, 2020. Assume the
following information concerning plant and equipment, for fiscal years 2020 and 2021. For
each numbered item on the table below, provide the correct number. Assume that
depreciation is computed from the first day of the month of acquisition to the first day of
the month of disposition.
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