FA Quiz 5 - Various Topics

Which of the following is true?

• VAT charged by suppliers is a cost

• VAT charged by clients is a revenue

• VAT is included in income statements

• VAT charged to a business can be reclaimed back

Biocotton Co purchases from a supplier, on credit, a box of 1000 masks with a total net purchase price of $5,000. The company sells each mask at a sales price including VAT of $12.00. The whole box is sold to a department store on credit. VAT for both purchase and sale is 20%. What will be the trade payable amount on the balance sheet?

• $5,000

• $1,000

• $6,000

• $12,000

Biocotton Co purchases from a supplier, on credit, a box of 1000 masks with a total net purchase price of $5,000. The company sells each mask at a sales price including VAT of $12.00. The whole box is sold to a department store on credit. VAT for both purchase and sale is 20%. What will be the VAT payable amount on the balance sheet?

• $1,000

• $1,200

• $2,000

• $2,400

Company Star sells coffee mugs. At the beginning of December 2019 It had an opening inventory of 50 mugs with a purchase price of $4 per unit. During the month of December the transactions shown in the table below took place. Which inventory costing system will result in the highest profit in December? TIP: calculations are not needed!

• FIFO

• PIPO

• LIFO

• AVCO

Company Star sells coffee mugs. At the beginning of December 2019 It had an opening inventory of 50 mugs with a purchase price of $4 per unit. During the month of December the transactions shown in the table below took place. Calculate the value of the ending inventory for month of December using FIFO.

• $300

• $310

• $320

• $330

Company Star sells coffee mugs. At the beginning of December 2019 It had an opening inventory of 50 mugs with a purchase price of $4 per unit. During the month of December the transactions shown in the table below took place. Calculate the profit for month of December, using LIFO periodic.

• $160

• $460

• $620

• $780

Company X acquires 80% of Company Y and offers a 10% premium over the book value. Company Y is a supplier for Company X and have 150,000 in trade receivables due. The following are the financial statements of the two companies before acquisition. What will be the Trade receivables amount on the consolidated balance sheet if proportional consolidation is used?

• $424,000

• $454,000

• $480,000

• $574,000

Company X acquires 80% of Company Y and offers a 10% premium over the book value. Company Y is a supplier for Company X and have 150,000 in trade receivables due. The following are the financial statements of the two companies before acquisition. What will be the Trade payables amount on the consolidated balance sheet if full consolidation is used?

• $470,000

• $500,000

• $580,000

• $620,000

Company X acquires 80% of Company Y and offers a 10% premium over the book value. Company Y is a supplier for Company X and have 150,000 in trade receivables due. The following are the financial statements of the two companies before acquisition. What is the total take-over amount?

• $132,000

• $232,000

• $245,380

• $255,200

Company X and Company Y had the following Income Statements before the acquisition was made. Company X acquires 80% of Company Y. The acquisition was fully paid by cash. What is the consolidated group income after the acquisition?

• $225,000

• $245,600

• $305,900

• $326,000