The summarized revenues and expenses information for Canadian Travel Inc. for the year 2018 states:1 cost of goods sold CAD180,000, sales revenue CAD400,000, other (non-operating) revenues and gains CAD30,000, sales general and administration expenses of CAD100,000. Net interest income is (+) CAD10,000 and the corporate income tax rate is 26,50%: Prepare the Income (i.e. Pro t & Loss) Statement of Holiday Inc., showing Gross Pro t, Operating Pro t, Other gains/(losses), Earnings before Interest and Tax (EBIT), Pro t before Tax and Net Income i.e. Net Pro t. Point out and explain which of all these revenue and expense items may imply/include non-cash transactions or accounting records. If the ending balance in Retained Earnings on Canadian Travel Inc.s 31. Dec 2017 balance sheet was $1,000,000 and a cash dividend of $10,000 was paid in 2018, using the above information show the balance sheet entries of Retained Earnings as of 31. Dec 2018. In addition to the above, assume that Canadian Travel Inc. has outstanding borrowings from the past, in the form of a Bond with face value of $100,000, at a coupon interest of 5% per annum, maturing in 2020: Prepare the Journal Entry for the annual 2018 coupon interest on the Bond that is to be paid in cash on 31. Dec 2018 Infer from the 2018 coupon interest paid on the Bond, how much interest income Canadian Travel Inc. earns from its short-term investments and/or cash deposits in 2018.
The summarized revenues and expenses information for Canadian Travel Inc. for the year 2018 states:1
cost of goods sold CAD180,000, sales revenue CAD400,000, other (non-operating) revenues and gains
CAD30,000, sales general and administration expenses of CAD100,000. Net interest income is (+)
CAD10,000 and the corporate income tax rate is 26,50%:
Prepare the Income (i.e. Pro
t & Loss) Statement of Holiday Inc., showing Gross Pro
t, Operating
Pro
t, Other gains/(losses), Earnings before Interest and Tax (EBIT), Pro
t before Tax and Net
Income i.e. Net Pro
t.
Point out and explain which of all these revenue and expense items may imply/include non-cash
transactions or accounting records.
If the ending balance in
was $1,000,000 and a cash dividend of $10,000 was paid in 2018, using the above information show
the balance sheet entries of Retained Earnings as of 31. Dec 2018.
In addition to the above, assume that Canadian Travel Inc. has outstanding borrowings from the
past, in the form of a Bond with face value of $100,000, at a coupon interest of 5% per annum, maturing
in 2020:
Prepare the
cash on 31. Dec 2018
Infer from the 2018 coupon interest paid on the Bond, how much interest income Canadian Travel
Inc. earns from its short-term investments and/or cash deposits in 2018.
1All
gures use US/UK notations i.e. "comma" for thousands and "points/periods" for decimals. For example, one
hundred thousand dollars and 50 cents is thus written "100,000.50".
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