Corporate Accounting

Corporate Accounting

Contents
MAIN BODY.............................................................................................................................................3
Question 3...............................................................................................................................................3
Question 4...............................................................................................................................................3
Question 5...............................................................................................................................................5
Question 6...............................................................................................................................................6

MAIN BODY
Question 3
(a) Cash collected from customers: Sales-accounts receivables
= $1920000-$208000
= $1712000
(b) Cash paid to suppliers: Cost of sales-accounts payables
= $1,344,000- 152000
= $1192000
(c) Cash paid to employees for wages and salary: Employees were paid by $260,000 in year
2020.
(d) Cash spent on plant and equipment: On plan and equipment $80000 (800000-720000) is paid.
(e) Proceeds from sale of equipment: $8000
(f) Cash paid for insurance: The case paid for insurance is of $32,000 in year 2020.
Question 4
(a) Calculate the current and deferred tax of Bright Star Ltd for each year, 2018 and 2019
Calculation of Current Tax
2019 2018
Profit before tax $4,500,000.00 $3,600,000.00
Add:
Provision for Warranty $ - $150,000.00
Depreciation expense - Machinery $60,000.00 $60,000.00
$4,560,000.00 $3,810,000.00