GST
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Q: #14
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Q: 4. On August 31, 2019, CAMELLIA Company purchased a new machinery for ₱540,000. The machinery has an...
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Q: 3. On August 31, 2019, CAMELLIA Company purchased a new machinery for ₱540,000. The machinery has an...
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Q: 3. On August 31, 2019, CAMELLIA Company purchased a new machinery for ₱540,000. The machinery has an...
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Q: Question 12
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Q: 3. On August 31, 2019, CAMELLIA Company purchased a new machinery for ₱540,000. The machinery has an...
A: On August 31, 2019, CAMELLIA Company purchased a new machinery for ₱540,000. The machinery has an es...
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Your client is Shannon Johnstone. After two years of testing the heating and cooling mats he developed for dogs, Shannon registered the business name ‘Warm or Frosty Pet Mats’ on 1 July 2020. Shannon projects his sales for the year ended 30 June 2021, excluding GST, to be the following:
- Sales to pet stores and vet clinics in Australia, $70,000;
- Export sales to pet stores and vet clinics in New Zealand, $12,000.
REQUIRED:
- Based on the projected sales, advise Shannon Johnstone whether he was required to register for GST on 1 July 2020.
- Explain why a business would voluntarily elect to register for GST where the projected turnover is less than the registration threshold.
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- On 1 Jul 2020, Eileen, a small-scale trading company, has made a deal with a local dental clinic to supply dental floss products. Eileen was very excited since this clinic has various branches in the state whereby, she could anticipate a bigger volume of orders from this clinic. Since Eileen is a new supplier to this dental clinic, they have come to an agreement whereby Eileen will supply 120 units of dental floss per month for an agreed selling price of RM16 commencing July 2020. This agreement is only for 1 year. Eileen will incur additional costs in the form of distribution expenses of RM 20 for each delivery to the clinic. To satisfy the agreement, Eileen had bought the dental floss as follows: per unit Date Quantity (unit) Unit Cost (RM) Jul 2020 400 12 Sep 2020 450 14 Nov 2020 400 17 Feb 2021 270 15 May 2021 180 14 It has been the industry practice to value their inventories using the weighted average method. Hence, as a newcomer in this business venture, Eileen follows the…Thirsty plc makes a revolutionary type of can called Soak. The can has a resealable top which allows the can to be sealed after opening to prevent gas escaping. In January 2019 the idea for this new product was launched, and a loan of £5 million was obtained from Sunshine Bank in order to finance this project. The associated costs and activities for the year ended 31 May 2020 are as shown below: 01 June 2019 – 31 July 2019: £30,000 per month on market surveys to establish whether or not consumers would want such can. The market surveys suggest that there is a market for the can amongst environmentally aware consumers. 01 August 2019 – 30 September 2019: £100,000 for evaluation of a number of alternative prototypes and designs. End of September 2019: a design is chosen and engineers produce a plan which indicates that is technically possible to produce the Soak can. 01 October 2019 -31 January 2020: £1,300,000 was spent for the design and construction of a pilot manufacturing…Thirsty plc makes a revolutionary type of can called Soak. The can has a resealable top which allows the can to be sealed after opening to prevent gas escaping. In January 2019 the idea for this new product was launched, and a loan of £5 million was obtained from Sunshine Bank in order to finance this project. The associated costs and activities for the year ended 31 May 2020 are as shown below: 01 June 2019 - 31 July 2019: £30,000 per month on market surveys to establish whether or not consumers would want such can. The market surveys suggest that there is a market for the can amongst environmentally aware consumers. • 01 August 2019 – 30 September 2019: £100,000 for evaluation of a number of alternative prototypes and designs. • End of September 2019: a design is chosen and engineers produce a plan which indicates that is technically possible to produce the Soak can. • 01 October 2019 -31 January 2020: £1,300,000 was spent for the design and construction of a pilot manufacturing…
- Thirsty plc makes a revolutionary type of can called Soak. The can has a resealable top which allows the can to be sealed after opening to prevent gas escaping. In January 2019 the idea for this new product was launched, and a loan of £5 million was obtained from Sunshine Bank in order to finance this project. The associated costs and activities for the year ended 31 May 2020 are as shown below: 01 June 2019 – 31 July 2019: £30,000 per month on market surveys to establish whether or not consumers would want such can. The market surveys suggest that there is a market for the can amongst environmentally aware consumers. 01 August 2019 – 30 September 2019: £100,000 for evaluation of a number of alternative prototypes and designs. End of September 2019: a design is chosen and engineers produce a plan which indicates that is technically possible to produce the Soak can. 01 October 2019 -31 January 2020: £1,300,000 was spent for the design and construction of a pilot manufacturing plant.…Use the information for the next three (3) questions. Seva Company operates a customer loyalty program. The entity grants program members loyalty points when they spend a specified amount on purchases. Program members can redeem the points for further purchases. The points have no expiry date.During 2020, the customer earned 60,000 points. Management expects that 100% of these points will be redeemed. The stand-alone selling price of each loyalty point is estimated at P20. The sales during 2020 amounted to P6,800,000 based on stand-alone selling price.On December 31, 2020, 28,800 points have been redeemed in exchange for purchases.In 2021, the management revised expectations and now expects 90% of the points to be redeemed. 9,000 points were redeemed during the year.How much of the sales should be allocated to the award points? How much should be recognized as revenue for 2020? How much should be recognized as revenue for 2021?Pasti Berhad values, advertises and sells residential property on behalf of its customers. The companyhas been in business for only a short time and is preparing a cash budget for the first four months ofyear 2020. Expected sales of residential properties are as follows.Year 2019 2020 2020 2020 2020Month December January February March AprilUnits sold 10 10 15 25 30The average price of each property is RM180,000 and Pasti Berhad charges a fee of 3% of the valueof each property sold. Pasti Berhad receives 1% in the month of sale and the remaining 2% in themonth after sale. The company has ten employees who are paid monthly. The average salary peremployee is RM36,000 per year. If more than 20 properties are sold in each month, each employeewill be paid in that month a bonus of RM1,500 for each additional property sold.Variable expenses are incurred at the rate of 50% of the value of each property sold and theseexpenses are paid in the month of sale. Fixed overheads of RM44,300 per month…
- Your manager has asked you to advise your client Kofi Gyato, owner and director of Kofi Gyato Limited, on the implications of the proposed transaction.Your client has identified an opportunity to develop his business by manufacturing the products which he sells. To do this he would need to buy a machine which will have an expected life of ten years. He has received this quotation for the machine.GHȼPrice of machine70,000Delivery and installation3,500Commissioning costs1,500Annual maintenance costs3,500Required:Prepare a report to your client. Your report should:(a) Explain the difference between capital and revenue expenditure, and how each type of expenditure affects the accounts of a business.(b) Indicate which of the costs of the machine should be considered as capital cost and which should be considered as revenue cost.(c) Define depreciation and explain how the accounting entries for depreciation affect each element of the accounting equation.(d) Indicate:(i) What the annual…Beginning the year 2020, the ABC Company began marketing its phone. Each phone sells for P50,000. To promote and expedite sales of this product, the management of ABC is offering one proof of purchase seal for a special slim transparent case to each customer for every unit of Samsung phone. ABC estimates that out of the units sold during 2020, only 60% of the proof of purchase seals will be redeemed. Sales of phone during 2021 totaled P50 million. For that year, 625 special slim transparent cases were purchased by the company at a total cost of P750,000. These 625 special slim transparent cases have a total sales value of P1,250,000. A total of 320 special slim transparent cases were distributed to customers during the year 2020. How much is the unearned revenue for unredeemed premiums reported in ABC's December 31, 2020 statement of financial position?NASH COMPANY IS PRESENTLY TESTING A NUMBER OF NEW SEED PLANTERS THAT IT HAS RECENTLY DEVELOPED. TO STIMULATE INTEREST IT HAS DECIDED TO GRANT 5 OF ITS LARGEST CUSTOMERS THE UNCODITIONAL RIGHT OF RETURN TO THESE PRODUCTS IF NOT FULLY SATISFIED. THE RIGHT OF RETURN EXTENDS FOR 4 MONTHS. NASH ESTIMATES RETURNS OF 15%. NASH SELLS THESE PLANTERS ON ACCOUNT FOR 14000000(COST 630000) ON JAN 1 2020. CUSTOMERS ARE REQUIRED TO PAY THE FULL AMOUNT DUE BY MARCH 15 2020 ASSUME THAT ONE CUSTOMER RETURNS PLANTERS ON MARCH 1 2020 DUE TO UNSATISFACTORY PERFORMANCE. PREPARE THE JOURNAL ENTRY TO RECORD THIS TRANSACTION, ASSUMING THIS CUSTOMER PURCHASED 107,000 OF PLANTERS FROM NASH AND ALSO RECORDED THE ENTRY REQUIRED TO PAY THE FULL AMOUNT DUE BY MARCH 15,2020 TO RECORD SALES RETURNS TO RECORD COST OF GOODS RETURNED.
- b) Thirsty plc makes a revolutionary type of can called Soak. The can has a resealable top which allows the can to be sealed after opening to prevent gas escaping. In January 2019 the idea for this new product was launched, and a loan of £5 million was obtained from Sunshine Bank in order to finance this project. The associated costs and activities for the year ended 31 May 2020 are as shown below: 01 June 2019 – 31 July 2019: £30,000 per month on market surveys to establish whether or not consumers would want such can. The market Page 3 of 5 surveys suggest that there is a market for the can amongst environmentally aware consumers. 01 August 2019 – 30 September 2019: £100,000 for evaluation of a number of alternative prototypes and designs. End of September 2019: a design is chosen and engineers produce a plan which indicates that is technically possible to produce the Soak can. 01 October 2019 -31 January 2020: £1,300,000 was spent for the design and construction of a pilot…Best Trim, a manufacturer of lawn mowers, predicts that it will purchase 204,000 spark plugs next year. Best Trim estimates that 17,000 spark plugs will be required each month. A supplier quotes a price of $9 per spark plug. The supplier also offers a special discount option: If all 204,000 spark plugs are purchased at the start of the year, a discount of 2% off the $9 price will be given. Best Trim can invest its cash at 10% per year. It costs Best Trim $260 to place each purchase order. Q. What is the opportunity cost of interest forgone from purchasing all 204,000 units at the start of the year instead of in 12 monthly purchases of 17,000 units per order?PT Cinta Flora is a firm specializing in developing Bonsai. The firm has three choices regarding when they will harvest and able to sell the Bonsai in the next 5 years, 10 years or 15 years. The firm started its Bonsai's development on January 1, 2020. The firm has 1-hectare area for its Bonsai. The firm's marketing department has surveyed the Bonsai's market price and estimate the following expected selling price: Bonsai quality Price per Bonsai Diamond IDR 20.000.000 Gold IDR 5.000.000 Standard IDR 1.000.000 The Bonsai's price increases below the inflation rate. According to the local government statistical data, the inflation rate is expected to be 5 percent per year. An actuary believes that 2 percent per year is an appropriate growth rate below the inflation rate. PT Cinta Flora executives are considering when to harvest the Bonsai. They have possible scenarios below: Time to Harvest Harvest…