Answer:
Oct. 1 Stockholders invest $31,930 in exchange for common stock of the corporation.
Dr Cash 31,930
Cr Common stock 31,930
Oct. 2 Hires an administrative assistant at an annual salary of $30,600.No journal entry
Oct. 3 Buys office furniture for $3,850, on account.
Dr Furniture 3,850
Cr Accounts payable 3,850
Oct. 6 Sells a house and lot for E. C. Roads; commissions due from Roads, $10,770 (not paid by Roads at this time).
Dr Accounts receivable 10,770
Cr Service revenue 10,770
Oct. 10 Receives cash of $155 as commission for acting as rental agent renting an apartment.
Dr Cash 155
Cr Service revenue 155
Oct. 27 Pays $690 on account for the office furniture purchased on October 3.
Dr Accounts payable 690
Cr Cash 690
Oct. 30 Pays the administrative assistant $2,550 in salary for October.
Dr Wages expense 2,550
Cr Cash 2,550
A local college is deciding whether to conduct a campus beautification initiative that would involve various projects, such as planting trees and remodeling buildings, to make the campus more aesthetically pleasing. For the students of the college, the visual appearance of the campus is _____and ________Thus, the visual appearance would be classified as a public good. Suppose the college administrators estimate that the beautification initiative will cost $1,540. To decide whether the initiative should be undertaken,
administrators conduct a survey of the college's 380 students, asking each of them their willingness to pay for the beautification project. The average willingness to pay, as revealed by the survey, is $14.
The benefit of the beautification initiative, as suggested by the survey, is $ ________.Because the estimated benefit is________ than the cost, the college administrators _________ undertake the beautification initiative.
The calculation of the benefit of the beautification initiative relied on the ability of the administrators to capture the true willingness to pay of each student accurately.
Which of the following scenarios would cause the survey used by the college administrators to yield misleading data on willingness to pay?
a. Students believe that if the initiative does not happen, the funds for the initiative will not be spent elsewhere.
b. Students believe they will eventually be charged their willingness to pay.
Answer:
non-rival
non-excludable
$5320
greater
should
b
Explanation:
A public good is a good that is non rivalled and non excludable in consumption. An example is road networks.
If the beautification project is carried out, a student cannot be excluded from benefitting from the project. The benefit a student derives from the project isn't affected by the benefit other students derive from it
Benefit of the project = number of students x willingness to pay
$14 x 380 = $5320
Because the benefit is greater than the cost of the project, the project should be undertaken
Willingness to pay is the highest amount a consumer is willing to pay for a product
Willingness to pay might be misstated if students think they would be charged their willingness to pay. They would understate their willingness to pay.
Which of the following statements is not true? Many Fortune 500 U.S. firms derive more than half their revenues from foreign operations. Technology companies are particularly dependent on offshore revenue. Eighty percent of the toys sold in the United States are manufactured in China. Most PCs manufactured in China use microprocessor chips manufactured in Korea. In 2017, 60 percent of Apple's revenue was generated outside of the United States.
Answer:
B
Explanation:
Brainliest?
HW13. Suppose that you begin saving up to buy a car by depositing a certain amount at the end of each month in a savings account which pays 3.6% annual interest compounded monthly. If your goal is to have $15,000 in the account four and a half years from now, how much do you need to put into the savings account each month
Answer:
$256.31
Explanation:
Interest rate per annum = 3.6%
Number of years = 4.5
No of payment per annum = 12
Interest rate per period 3.6%/12 = 0.3%
Number of period = 4.5*12 = 54
FV of annuity = 15,000
Deposit in each month (P) = FVA / ([1+r)^n - 1]/r)
Deposit in each month (P) = 15,000 / ([1+0.3%]^54 - 1) / 0.3%)
Deposit in each month (P) = 15,000 / ([1.003^54 - 1]/0.003)
Deposit in each month (P) = 15,000 / (1.175575 - 1/0.003)
Deposit in each month (P) = 15,000 / (0.175575/0.003)
Deposit in each month (P) = 15,000 / 58.525
Deposit in each month (P) = 256.3007262
Deposit in each month (P) = $256.31
One major advantage of limited liability is that it:________.
a. is not subject to a free-rider problem.
b. has unlimited profit sharing among the firm's owners.
c. shields the personal assets of owners from liability claims.
d. is not subject to a principal-agent problem.
Answer: c. shields the personal assets of owners from liability claims.
Explanation:
An advantage of limited liability is that it shields the personal assets of owners from liability claims.
For a limited liability company, it should be noted that the liabilities of the members in the company for the debts that are incurred are limited only to the investment of the members. Personal assets are not affected if the company first into debt.
The first step in the marketing process is ________. A. understanding the marketplace and customer needs and wants B. constructing an integrated marketing program that delivers superior value C. building profitable relationships and creating customer delight D. capturing value from customers to create profits and customer equity E. designing a customer-driven marketing strategy
Explanation:
Do you just need to fill in the blanks or what
Which of the following is not a key component of the merger model we walked through in the course?
Answer:
Gathering publicly available comparable company information
Creating detailed forecasts for both companies
An accretion/dilution and sensitivity analysis
Determining and calculating items related to the acquisition structure
100 POINTS + BRAINLIEST PLEASE HELP ME
Answer:
Hi there! Hope this helps you!
Explanation:
Three goals: Exercise,eat healthy, and do my work on time
I would write these on a paper and then I will check them with a pen, and every month I will try to do it and make a habit.
I dont know if this helped....
Have a great day!
Answer:
One of my career goals is a ufc fighter anther is a rapper third is a you tuber. I guess I would have to keep moving forward and never give up, if I feel doubt then I have to turn myself around.
Explanation:
Overcoming a challenge can very difficult for many people. I can't really remember a time I overcame a challenge, I guess I always stayed positive and It wasn't really a big deal to me, I just dealt with it and life goes on. But I can tell you some challenges I will or am trying to overcome in my present and future life. First, High School can be difficult for others for so many reasons, but my main problem getting through high school is passing and graduating. I guess I was dealing with a lot and couldn't really focus on my school work, so I failed and haven't passed a lot of classes so I'm very behind on my credits to graduate. Now I'm in twelfth grade and it's like taking every single class of high school I didn't pass all in one, so it's very overwhelming and a lot of work. Second, another challenge I will be overcoming in the future is to accomplish my goals and passion. I want to become a UFC fighter, rapper, and You Tuber. These goals are big dreams and achieving them can be almost not possible, but anything can be possible, you just have to have the mind set and tell yourself you can do anything. But it can be difficult if you don't know what to do or how to work towards your drams, so that's my main problem. Finally, my main challenge I'm trying to overcome is getting through life, some and many people don't really worry about life because there taking care of and been told they don't have to worry about anything. I have a rough life filled with tough love and scars and tears. But growing up didn't change my soul, I still believe I can accomplish anything and overcome anything. From what I learned from my challenges is that life can be overwhelming and can become hell but sometimes you have to go through hell to get to heaven. And going through experiences can make you wiser by learning from your mistakes and sometimes even learning from other peoples mistake. But I'm trying, it's seems like it's almost impossible to accomplish things I want to accomplish because bad things just happen to me and pulls me down and makes me want to give up on everything.
On June 30, 2021, Georgia-Atlantic, Inc. leased a warehouse equipment from IC Leasing Corporation. The lease agreement calls for Georgia-Atlantic to make semiannual lease payments of $677,829 over a four-year lease term, payable each June 30 and December 31, with the first payment at June 30, 2021. Georgia-Atlantic's incremental borrowing rate is 10%, the same rate IC uses to calculate lease payment amounts. Amortization is recorded on a straight-line basis at the end of each fiscal year. The fair value of the equipment is $4.6 million. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. Determine the present value of the lease payments at June 30, 2021 that Georgia-Atlantic uses to record the right-of-use asset and lease liability. 2. What pretax amounts related to the lease would Georgia-Atlantic report in its balance sheet at December 31, 2021
Answer:
Answer is explained in the explanation section below.
Explanation:
Solution to Part 1:
Present Value of Lease payments:
Total Semiannual Periods (4*2) = 8
Incremental Borrowing Rate (10%/2) = 5%
Semi-annual lease payment = $677829
Cumulative PV factor for annuity due at 5% for 6 periods = 6.786373
So,
Present Value of Lease payments = $677829 x 6.786373
Present Value of Lease payments = $4600000
Solution to Part 2:
Pretax Amount of Liability At December 31:
Present Value of Lease payments = $4600000
Add: Interest expense [(4600000-677829)*5%] = 196109
less: Payments (semiannual payment x 2) = 1355658
Pretax Amount of Liability = 3440451
Pretax Amount of Asset At December 31:
Value of Asset = 4600000
Less: Depreciation (Value of Asset/ Semiannual periods) = 575000
So,
Pretax Amount of Asset = 4600000 - 575000
Pretax Amount of Asset = 4025000
Jeremy earned $100,000 is salary and $6,000 in interest income during the year. Jeremy's employer withheld $11,000 of federal income taxes from Jeremy's paychecks during the year. Jeremy has one qualifying dependent child who lives with him. Jeremy qualifies to file as head of the household and has $23,000 in itemized deductions. Assume that in addition to the original facts, Jeremy has a long-term capital gain of $4,000. What is Jeremy’s tax refund or tax due including the tax on the capital gain?
Answer:
Follows are the solution to this question:
Explanation:
Points Description Amount Computation
(1) Major Revenue $110,000 [tex]\$ 100,000 \ salary + \$ 6,000 \\ \\Interest \ income + \$4,000 \\\\ \text{ capital gain in long term}[/tex]
(2) AGI allowance 0
(3) Gross sales adjusted $110,000 (1) - (2)
(4) Deduction norm 18,350 Chief of Household
(5) susceptible to deductions 23,000
(6) Enhanced standard (23,000) (5) > (4)
deduction or individualized
deductions
(7) Taxable Revenue $87,000
(8) Response for $13,298 [tex][(83,000 - 52,850) \times[/tex]
incoming taxes [tex]22\%+ \$6,065] + \$4000\times 15\%[/tex]
(See the household head tax
plan)
(9) Allowance for children's taxes (2,000)
(10) Withdrawal of tax (11,000)
Taxes due $ 298 (8) + (9) + (10)
The most recent financial statements for Schenkel Co. are shown here:
Income Statement Balance Sheet
Sales $14,100 Current assets $10,800 Debt $15,300
Costs 8,300 Fixed assets 26,000 Equity 21,500
Taxable income $5,800 Total $36,800 Total $36,800
Taxes (40%) 2,320
Net income $3,480
Assets and costs are proportional to sales. Debt and equity are not. The company maintains a constant 30 percent dividend payout ratio. No external financing is possible.
Required:
What is the sustainable growth rate?
Answer:
12.78%
Explanation:
Calculation for What is the sustainable growth rate
First step is to calculate ROE
Using this formula
ROE = NI / TE
Let plug in the formula
ROE = $3,480 / 21,500
ROE = .1619*100
ROE= 16.19%
Second step is to calculateThe plowback ratio b
Plowback ratio b = 1 - .30
Plowback ratio b = .70
Now let calculate the sustainable growth rate using this formula
Sustainable growth rate = (ROE × b) / [1 - (ROE × b)]
Let plug in the formula
Sustainable growth rate = [. 1619(.70)] / [1 - . .1619(.70)]
Sustainable growth rate=0.11333/(1-0.11333)
Sustainable growth rate=0.1133/0.88667
Sustainable growth rate = .1278*100
Sustainable growth rate=12.78%
Therefore the sustainable growth rate will be 12.78%
Sandhill Co. began operations on January 2, 2020. It employs 13 people who work 8-hour days. Each employee earns 11 paid vacation days annually. Vacation days may be taken after January 10 of the year following the year in which they are earned. The average hourly wage rate was $19 in 2020 and $20.25 in 2021. The average vacation days used by each employee in 2021 was 10. Sandhill Co. accrues the cost of compensated absences at rates of pay in effect when earned.
Prepare journal entries to record the transactions related to paid vacation days during 2020 and 2021.
Answer:
2020
Dr Wages expense $21,836
Cr To vacation wages payable $18,720
On 2021
Dr Wages expense $1,300
Dr Vacation wages payable $19,760
Cr Cash $21,060
2021
Dr Wages expense $23,166
Cr To vacation wages payable $23,166
Explanation:
Preparation of the journal entries to record the transactions related to paid vacation days during 2020 and 2021.
2020
Dr Wages expense $21,836
(13 × 8 hrs × 11 days × $19)
Cr To vacation wages payable $18,720
(Being to record wages expense )
2021
Dr Wages expense $1,300
($21,060-$19,760)
Dr Vacation wages payable $19,760
(13 × 8 hrs × 10 days × $19)
Cr Cash $21,060
(13 × 8 hrs × 10 days × $20.25)
(Being to record cash paid )
2021
Dr Wages expense $23,166
(13 × 8 hrs × 11 days × $20.25)
Cr To vacation wages payable $23,166
(Being to record wages expense )
In each of the following cases, determine how supply or demand shifts and how the equilibrium changes.
a. Smartphones: Microchips used in smartphones become less costly to produce. As a result, the
supply of
supply of and demand for
demand for
smartphones increase(s), causing the equilibrium price to rise, fall, or remain unchanged
fall
rise, fall, or remain unchanged
rise
and the equilibrium quantity to rise
rise
fall
rise, fall, or remain unchanged
b. ALS medical research funds: The ALS ice bucket challenge goes viral, leading to greater awareness of the benefits of and need for ALS research. As a result, the
supply of
supply of and demand for
demand for
ALS research increase(s), causing the equilibrium price (or opportunity cost) of such research to
rise
fall
rise, fall, or remain unchanged
and the equilibrium quantity to
fall
rise, fall, or remain unchanged
rise
Explanation:
A. When microchip used in smartphones become less costly to produce, the supply of smartphones are going to increase, causing a fall in equilibrium price and a rise in equilibrium quantity.
since one of the resources used to make smartphones has become cheaper, more smartphones would be produced, raising its supply, increased supply causes fall in price and rise in equilibrium quantity.
B. since the ALS bucket challenge went viral, supply and demand for research would increase, causing equilibrium price or opportunity cost to either rise or remain unchanged. the equilibrium quantity will then rise, fall or remain unchanged
Coronado Corporation had income from continuing operations of $10,661,000 in 2020. During 2020, it disposed of its restaurant division at an after-tax loss of $190,500. Prior to disposal, the division operated at a loss of $321,600 (net of tax) in 2020 (assume that the disposal of the restaurant division meets the criteria for recognition as a discontinued operation). Coronado had 10,000,000 shares of common stock outstanding during 2020. Prepare a partial income statement for Coronado beginning with income from continuing operations
Answer and Explanation:
The preparation of the partial income statement for Coronado beginning with income from continuing operations is presented below:
Income from continuing operations $10,661,000
Discontinued Operations :
Loss from operations of discontinued restaurant division ($321,600)
After tax Loss from disposal of restaurant division ($190,500)
Net Income $10,148,900
Earning Per Share :
Income from continuing operations [$10,661,500 ÷ 10,000,000] $1.07
Discontinued Operations [$521,100 ÷ 10,000,000] ($0.05121)
Net Income [$10,148,900 ÷ 10,000,000] $1.01489
Cogswell Printers purchased a four year insurance policy on May 1, Year 2 for $12,000,effective immediately. The company expensed the full cost of the policy in Year 2. Theadjusting journal entry required at December 31, Year 2 will include a:________
a. Credit to prepaid insurance of $9,000
b. Debit to insurance expense of $3,000
c. Credit to insurance expense of $2,000
d. Debit to prepaid insurance of $10,000
e. None of the above
Answer:
d. Debit to prepaid insurance of $10,000
Explanation:
The company has paid for insurance that covers a period of 4-year, hence, based on the matching concept it is expected that the insurance cost would be expensed over 4 years as well.
However, the company has debited the whole $12,000 to insurance expense in year 1, hence, we need to adjust for the remaining cost of insurance for the future period.
Insurance expense for the 8-month period(May-Dec)=$12,000*8/48=$2000
Note there are 48 months in 4 years
balance of insurance paid=$12,000-$2,000=$10,000
The $10,000 would be credited to insurance in order to reduce the insurance recognized earlier as $12,000 to only $2,000 while prepaid insurance is debited with $10,000
General Product Inc. distributed 100 million coupons in 2021. The coupons are redeemable for 30 cents each. General anticipates that 70% of the coupons will be redeemed. The coupons expire on December 31, 2022. There were 45 million coupons redeemed in 2021 and 30 million redeemed in 2022. General recognizes coupon promotion expense in the period coupons are issued. What was General's coupon promotion expense in 2021
Answer:
$21million
Explanation:
Calculation for What was General's coupon promotion expense in 2021
Using this formula
2021 General's coupon promotion expense= Distributed coupons × Redeemable × % redeemed
Let plug in the formula
2021 General's coupon promotion expense= 100million × $0.30 × 70%
2021 General's coupon promotion expense= $21million
Therefore 2021 General's coupon promotion expense will be $21million
Consider a chemical factory that is situated next to a farm. Airborne emissions from the chemical factory damage crops on the farm. The marginal benefits of emissions to the factory and the marginal costs of damage to the farmer are as follows: Quantity of emissions (Q) 100 200 300 400 500 600 700 800 900 MB to factory 320 280 240 200 160 120 80 40 0 MC to farmer 110 130 150 170 190 210 230 250 270 Calculate the total net benefit to the farmer and factory at the economically and socially efficient quantity of emissions. A. $63000 B. $62000 C. $60750 D. $61000
Answer:
Marginal Benefits of Emissions
Total net benefit to the farmer and factory at the economically and socially efficient quantity of emissions is $30,000 when the quantity of emission is 200 tons.
Explanation:
a) Data and Calculations:
Quantity of Marginal Marginal Total Net Benefit
emissions (Q) Benefits Cost or Cost
100 320 110 21,000
200 280 130 30,000
300 240 150 27,000
400 200 170 12,000
500 160 190 -15,000
600 120 210 -54,000
700 80 230 -105,000
800 40 250 -168,000
900 0 270 -243,000
Amazon Inc. is one of the world's leading e-commerce companies, with almost $120 billion in revenues for the fiscal year ended December 31, 2017. For the year ended December 31, 2017, Amazon's cost of goods sold was $111,934 million. Assume that all purchases were made on account. The following T-accounts reflect information contained in the company's 2017 and 2016 balance sheets (in millions).
Inventories Account payable
12/31/2016 Bal. $11,461 $25,309 12/31/2016 Bal.
12/31/2017 Bal. $16,047 $34,616 12/31/2017 Bal.
Required:
a. Prepare the entry, using the financial statement effects template and in journal entry form, to record cost of goods sold for the year ended December 3 1 , 2017.
b. Prepare the entry, using the financial statement effects template and in journal entry form, to record Amazon's inventory purchases for the year ended December 31, 2017. (Assume all purchases are made on account.)
c. What amount did Amazon pay in cash to its suppliers for the year ended December 3 1 , 2017?
Answer:
a. Date Accounts Title & Explanation Debit $'m Credit $'m
Dec 31, 2017 Cost of Goods Sold $111,934
Inventories $111,934
(COGS recorded for 2017 sale)
b. Date Accounts Title & Explanation Debit $'m Credit $'m
Dec 31, 2017 Inventories $116,520
Accounts Payable $116,520
(Inventories purchased in 2017)
Inventory Purchases = COGS + Closing Inventory - Opening Inventory = $111,934 + $16,047 - $11,461 = $116,520
c. Date Accounts Title & Explanation Debit $'m Credit $'m
Dec 31 2017 Accounts Payable $107,213
Cash $107,213
(Payment to suppliers for 2017 purchases)
Payment to suppliers = Purchases + Opening AP balance - Closing AP Balance = $116,520 + $25,309 - $34,616 = $107,213.
Acker Inc. bought 40% of Howell Co. on January 1, 2020 for $576,000. The equity method of accounting was used. The book value and fair value of the net assets of Howell on that date were $1,440,000. Acker began supplying inventory to Howell as follows:
Year Cost to Acker Transfer Price Amount Held by Howell at Year-End
2020 $55,000 $75,000 $15,000
2021 $70,000 $110,000 $55,000
Howell reported net income of $100,000 in 2010 and $120,000 in 2011 while paying $40,000 in dividends each year. What is the amount of unrealized intra-entity inventory profit to be deferred on December 31, 2010?
Answer:
the amount of unrealized intra-entity inventory profit is $1,600
Explanation:
The computation of the amount of unrealized intra-entity inventory profit is given below:
= Profit percentage × amount at year end × purchase percentage
= (($75,000 - $55,000) ÷ $75,000) × 15,000 × 40%
= $1,600
hence, the amount of unrealized intra-entity inventory profit is $1,600
The Manda Panda Company uses the allowance method to account for bad debts. At the beginning of 2009, the allowance account had a credit balance of $75,000. Credit sales for 2009 totaled $2,400,000 and the year-end accounts receivable balance was $490,000. During this year, $73,000 in receivables were determined to be uncollectible. Manda Panda anticipates that 3% of all credit sales will ultimately become uncollectible. The fiscal year ends on December 31.
Required:
1. Does this situation describe a loss contingency? Explain.
2. What is the bad debt expense that Manda Panda should report in its 2009 income statement?
3. Prepare the appropriate journal entry to record the contingency.
4. What is the net realizable value (book value) Manda Panda should report in its 2009 balance sheet?
Answer:
The Manda Panda Company
1. This is not a loss contingency. A loss contingency refers to a probable payment that might result from an uncertain event.
2. The bad debt expense that Manda Panda should report in its 2009 income statement is $70,000 ($73,000 -$75,000 + $72,000).
3. Debit Allowance for Uncollectible accounts $3,000
Credit Bad Debts Expense $3,000
To reduce the allowance account from $75,000 to $72,000.
Debit Bad Debts Expense $73,000
Credit Accounts Receivable account $73,000
To write-off the bad debts.
4. The net realizable value of accounts receivable is $418,000 ($490,000 - 72,000)
Explanation:
a) Data and Calculations:
Allowance for Uncollectible account (credit balance) = $75,000
Credit sales for 2009 = $2.4 million
Year-end Accounts Receivable = $490,000
Bad Debts = $73,000
Estimated allowance for Uncollectible = 3% of all credit sales (3% of $2.4 million) = $72,000
b) A contingency loss requires that a liability be created to account for the loss. This is not the case with making allowances for uncollectible accounts or writing off bad debts. There is no need to create a liability account since no payment will eventually be made to settle any liability in the future.
Prepare Two Column Cash Book from the following transactions and balance the book on 31st Jan., 2021:-
2021
Jan. 1
Cash in hand 50,000; Bank overdraft 1,90,000.
Jan. 2
Purchased goods from Rajesh Kumar of the list price of 50,000 at 5% trade discount and payment made by cheque.
Jan. 6
Goods sold for 80,000 and payment received by cheque. Cheque deposited into Bank on same day.
Jan. 10
Goods purchased for cash 19,800.
Jan. 15
Furniture sold for 1,77,000 and payment received by cheque & cheque deposited into Bank on same day.
Jan. 18
Salaries paid 4,500.
Jan. 21
Settled the amount due to Ram 2,000 by paying cash 1,910.
Jan. 22
Cash received from Jai 14,780 in full settlement of his account of 15,000.
Jan. 23
Paid Life Insurance premium 1,500.
Jan. 31
Deposited with bank the entire balance after retaining 7,000 cash in hand.
Answer:
On January 21, Balance c/d are:
Cash = $7,000
Bank = $49,570
Explanation:
Note: See the attached excel file for the Two Column Cash Book.
Also note the following in the attached Two Column Cash Book:
(1) Jan. 1 Bank overdraft 1,90,000 is recorded in the Two Column Cash Book as 190,000 to correct the error in the figure.
(2) Jan. 15 Furniture sold for 1,77,000 is recorded in the Two Column Cash Book as 177,000 to correct the error in the figure.
(3) Jan. 18 Salaries paid 4,500 is assumed to be paid by cheque since no specific form of payment in indicated.
(4) Jan. 23 Paid Life Insurance premium 1,500 is assumed to be paid by cheque since no specific form of payment in indicated.
(5) VN represents Voucher Number.
(5) PR represents Posting Reference.
(6) C represents Contra entry.
(7) The Jan. 31 Bank and Cash (C) of $36,070 which is the entire balance deposited with bank after retaining 7,000 cash in hand is obtained as follows:
Entire balance deposited with bank = Total cash received - Total cash paid - $7,000 retained = $64,780 - ($19,800 + $1,910) - $7,000 = $36,070
(8) Balance c/d represents Balance carried down.
(8) Balance b/d represents Balance brought down.
On December 31, 2021, Fighting Okra Cooking Services reports the following revenues and expenses.
Service revenue $75,500 Rent expense 18,800
Postage expense 1,550 Salaries expense 23,000
Legal fees expense 2,500 Supplies expense 18,000
In addition, the balance of common stock at the beginning of the year was $170,000, and the balance of retained earnings was $34,000. During the year, the company issued additional shares of common stock for $28,000 and paid dividends of $18,000.
Required:
a. Prepare an income statement.
b. Prepare a statement of stockholders' equity.
Answer and Explanation:
The preparation is presented below:
a. Income statement
Service revenue $75,500
Less expenses
Rent expense $18,800
Postage expense $1,550
Salaries expense $23,000
Legal fees expense $2,500
Supplies expense $18,000
Net income $11,650
b. statement of stockholders' equity
Common stock ($170,000 + $28,000) $198,000
Add: retained earnings ($34,000 + $11,650 - $18,000) $27,650
Stockholder equity $225,650
Mather Company purchased equipment on January 1, 2012 at a total invoice cost of $224,000; additional costs of $4,000 for freight and $20,000 for installation were incurred. The equipment has an estimated salvage value of $8,000 and an estimated useful life of five years. The amount of accumulated depreciation at December 31, 2013 if the straight-line method of depreciation is used is:
Answer:
$96,000
Explanation:
Note that December 2013 is the end of the second year since the equipment was purchased, hence, the accumulated depreciation is 2-year accumulated depreciation which is shown thus:
Annual depreciation=(cost of equipment-salvage value)/useful life
The cost of equipment includes total invoice cost, freight, and installation costs
The cost of equipment=$224,000+$4,000+$20,000
The cost of equipment=$248,000
salvage value=$8,000
useful life= 5 years
Annual depreciation=($248,000-$8000)/5
Annual depreciation=$240,000/5
Annual depreciation=$48,000
Accumulated depreciation for 2 years=$48,000*2
Accumulated depreciation for 2 years=$96,000
The current asset section of the Excalibur Tire Company’s balance sheet consists of cash, marketable securities, accounts receivable, and inventory. The December 31, 2021, balance sheet revealed the following:
Inventory $890,000
Total assets $3,500,000
Current ratio 2.40
Acid-test ratio 1.40
Debt to equity ratio 1.5
Required:Determine the following 2016 balance sheet items:1. Current assets2. Shareholders' equity3. Non-current assets4. Long-term liabilities
Answer:
1. Current assets $2,136,000
2. Shareholders' equity $2,000,000
3. Non-current assets $1,364,000
4. Long term liabilities = $610,000
Explanation:
Calculation to determine the following 2016 balance sheet items: Current assets, Shareholders' equity, Non-current assets and Long-term liabilities
1. Current assets
First step is to calculate the Acid test ratio using this formula
Acid test ratio = (Current assets-Inventory)/Current liabilities
Let plug in the formula
1.40 = (2.40X-$890,000)/X
1.40X = 2.40X-$890,000
-1.00X = $890,000
X=$890,000/1.00
X = $890,000
Now let calculate the Current assets
Current assets =$ 890,000*2.4
Current assets = $2,136,000
Therefore Current assets will be $2,136,000
2. Shareholders' equity
Using this formula
Total assets = Debt+Equity
Let plug in the formula
$3,500,000 = 1.5X+X
X = $2,000,000
Therefore Shareholders' equity will be $2,000,000
3 .Non-current assets
Long term assets = $3,500,000- $2,136,000
Long term assets = $1,364,000
Therefore Non-current assets will be $1,364,000
4. Long-term liabilities
Long term liabilities =[($3,500,000-$2,000,000)-$890,000]
Long term liabilities =$1,500,000-$890,000
Long term liabilities = $610,000
Therefore Long term liabilities will be $610,000
A company purchased $2,000 of merchandise on July 5 with terms 1/10, n/30. On July 7, it returned $220 worth of merchandise. On July 8, it paid the full amount due. The amount of the cash paid on July 8 equals:
Answer:
$1,762.2
Explanation:
Calculation for what The amount of the cash paid on July 8 equals:
Cash Paid = ($2,000 - $220) * (199%-1%)
Cash Paid = ($2,000 - $220) * 0.99
Cash Paid = ($1,780*0.99)
Cash Paid = $1,762.2
Therefore The amount of the cash paid on July 8 equals:$1,762.2
At year end, the following items have not yet been recorded.
a. Insurance expired during the year, $2,000.
b. Estimated bad debts, 1% of gross sales.
c. Depreciation on furniture and equipment, 10% per year.
d. Interest at 6% is receivable on the note for one full year.
e. Rent paid in advance at December 31, $5,400 (originally charged to expense).
f. Accrued salaries at December 31, $5,800.
Required:
(a) Prepare the necessary adjusting entries.
(b) Prepare the necessary closing entries.
Question Completion:
The following trial balance was taken from the books of Sheridan Corporation on December 31, 2020.
Account Debit Credit
Cash $8,500
Accounts Receivable 40,700
Notes Receivable 11,200
Allowance for Doubtful Accounts $1,870
Inventory 35,300
Prepaid Insurance 4,720
Equipment 122,600
Accumulated Depreciation--Equip. 14,100
Accounts Payable 10,100
Common Stock 49,100
Retained Earnings 64,550
Sales Revenue 268,000
Cost of Goods Sold 123,900
Salaries and Wages Expense 48,600
Rent Expense 12,200
Totals $407,720 $407,720
At year end, the following items have not yet been recorded.
a. Insurance expired during the year, $2,000.
b. Estimated bad debts, 1% of gross sales.
c. Depreciation on furniture and equipment, 10% per year.
d. Interest at 6% is receivable on the note for one full year.
e. Rent paid in advance at December 31, $5,400 (originally charged to expense).
f. Accrued salaries at December 31, $5,800.
Required:
a. Prepare the necessary adjusting entries.
b. Prepare the necessary closing entries.
Answer:
Sheridan Corporation
a. Adjusting Journal Entries on December 31, 2020:
a. Debit Insurance Expense $2,000
Credit Prepaid Insurance $2,000
To record the insurance expense for the year.
b. Debit Bad Debts Expense $2,680
Credit Accounts Receivable $2,680
To record bad debts written off.
c. Debit Depreciation Expense - Equipment $12,260
Credit Accumulated Depreciation - Equipment $12,260
To record the depreciation expense for the year.
d. Debit Interest Receivable $672
Credit Interest Revenue $672
To record interest revenue receivable on the note.
e. Debit Rent Prepaid $5,400
Credit Rent Expense $5,400
To record rent prepaid, previously recorded as an expense.
f. Debit Salaries and Wages Expense $5,800
Credit Salaries Payable $5,800
To record accrued salaries.
b. Closing Journal Entries on December 31, 2020:
Debit Sales Revenue $268,000
Interest Revenue $672
Credit Income Summary $268,672
To close the revenue accounts to the income summary.
Debit Income Summary $202,040
Credit:
Cost of Goods Sold 123,900
Salaries and Wages Expense 54,400
Rent Expense 6,800
Bad debts Expense 2,680
Insurance Expense 2,000
Depreciation Expense 12,260
To close the expense accounts to the income summary.
Explanation:
a) Data and Calculations:
Sheridan Corporation
Unadjusted Trial Balance as of December 31, 2020:
Account Titles Debit Credit
Cash $8,500
Accounts Receivable 40,700
Notes Receivable 11,200
Allowance for Doubtful Accounts $1,870
Inventory 35,300
Prepaid Insurance 4,720
Equipment 122,600
Accumulated Depreciation--Equip. 14,100
Accounts Payable 10,100
Common Stock 49,100
Retained Earnings 64,550
Sales Revenue 268,000
Cost of Goods Sold 123,900
Salaries and Wages Expense 48,600
Rent Expense 12,200
Totals $407,720 $407,720
Adjustments:
a. Insurance Expense $2,000 Prepaid Insurance $2,000
b. Bad Debts Expense $2,680 Accounts Receivable $2,680 (1% of $268,000)
c. Depreciation Expense - Equipment $12,260 Accumulated Depreciation - Equipment $12,260 (10% of $122,600)
d. Interest Receivable $672 Interest Revenue $672 (6% of $11,200)
e. Rent Prepaid $5,400 Rent Expense $5,400
f. Salaries and Wages Expense $5,800 Salaries Payable $5,800
Sheridan Corporation
Adjusted Trial Balance as of December 31, 2020:
Account Titles Debit Credit
Cash $8,500
Accounts Receivable 38,020
Notes Receivable 11,200
Interest Receivable 672
Allowance for Doubtful Accounts $1,870
Inventory 35,300
Prepaid Insurance 2,720
Prepaid Rent 5,400
Equipment 122,600
Accumulated Depreciation--Equip. 26,360
Accounts Payable 10,100
Salaries Payable 5,800
Common Stock 49,100
Retained Earnings 64,550
Sales Revenue 268,000
Interest Revenue 672
Cost of Goods Sold 123,900
Salaries and Wages Expense 54,400
Rent Expense 6,800
Bad debts Expense 2,680
Insurance Expense 2,000
Depreciation Expense 12,260
Totals $426,452 $426,452
b) The adjusting entries made in the accounting records of Sheridan Corporation comply with the accrual concept and the matching principle of generally accepted accounting principles. These accounting principles require that expenses and revenues for a period are recognized in the period they occur and not when cash is exchanged. The closing entries show the revenue and the expense accounts closed to the income summary.
On January 1, 2021, Teal Corp. had 502,000 shares of common stock outstanding. During 2021, it had the following transactions that affected the Common Stock account.
February 1 Issued 125,000 shares
March 1 Issued a 10% stock dividend
May 1 Acquired 98,000 shares of treasury stock
June 1 Issued a 3-for-1 stock split
October 1 Reissued 58,000 shares of treasury stock
The weighted-average number of shares outstanding. Assume that Indigo Corp. earned net income of $3,605,000 during 2021. In addition, it had 104,000 shares of 9%, $100 par nonconvertible, noncumulative preferred stock outstanding for the entire year. Because of liquidity considerations, however, the company did not declare and pay a preferred dividend in 2021. Compute earnings per share for 2018, using the weighted-average number of shares.
Assume that Indigo Corp. earned net income of $3,605,000 during 2021. In addition, it had 104,000 shares of 9%, $100 par nonconvertible, noncumulative preferred stock outstanding for the entire year. Because of liquidity considerations, however, the company did not declare and pay a preferred dividend in 2021. Compute earnings per share for 2018, using the weighted-average number of shares determined in part (a).
Answer:
a. The weighted-average number of shares for 2021 is 1,853,225 shares.
b. Earnings per share for 2021 = $1.95 per share
Explanation:
Note: The correct year in the requirement is 2021 not 2018 as erroneously stated parts a and b.
The explanation of the answers is now given as follows:
a. Compute earnings per share for 2021, using the weighted-average number of shares.
Note: See the attached excel file for the computation of the weighted-average number of shares.
From the attached excel file (see the bold red color), the total weighted-average number of shares for 2021 is 1,853,225 shares.
b. Assume that Indigo Corp. earned net income of $3,605,000 during 2021. In addition, it had 104,000 shares of 9%, $100 par nonconvertible, noncumulative preferred stock outstanding for the entire year. Because of liquidity considerations, however, the company did not declare and pay a preferred dividend in 2021. Compute earnings per share for 2021, using the weighted-average number of shares determined in part (a).
To calculate earnings per share for 2021, the following formula is used:
Earnings per share for 2021 = Net income of $3,605,000 during 2021 / Weighted-average number of shares for 2021
Therefore, we have:
Earnings per share for 2021 = $3,605,000 / 1,853,225 = $1.95 per share
Morris Company applies overhead based on direct labor costs. For the current year, Morris Company estimated total overhead costs to be $432,000, and direct labor costs to be $2,160,000. Actual overhead costs for the year totaled $404,000, and actual direct labor costs totaled $1,880,000. At year-end, the balance in the Factory Overhead account is a:
Answer:
$28,000 Underapplied
Explanation:
Calculation for what the balance in the Factory Overhead account is
Estimated Overhead Cost/Estimated DL = Overhead Rate
$432,000/$2,160,000 = 20 %
Actual Overhead: $404,000
Applied Overhead: (DL 20%) = ($1,880,000 20%) = $376,000
Actual OH - Applied OH = FOH
$404,000 - $376,000 =
$28,000 Underapplied
Therefore At year-end, the balance in the Factory Overhead account is a:$28,000 Underapplied
Mike Greenberg opened Cheyenne Window Washing Inc. on July 1, 2022. During July, the following transactions were completed.
July 1 Issued 9,800 shares of common stock for $9,800 cash.
1 Purchased used truck for $6,560, paying $1,640 cash and the balance on account.
3 Purchased cleaning supplies for $740 on account.
5 Paid $1,440 cash on a 1-year insurance policy effective July 1.
12 Billed customers $3,030 for cleaning services performed.
18 Paid $820 cash on amount owed on truck and $410 on amount owed on cleaning supplies.
20 Paid $1,640 cash for employee salaries.
21 Collected $1,310 cash from customers billed on July 12.
25 Billed customers $2,050 for cleaning services performed.
31 Paid $240 for maintenance of the truck during month.
31 Declared and paid $490 cash dividend.
Journalize the July transactions.
Post to the ledger accounts.
Prepare a trial balance at July 31.
Journalize the following adjustments. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)
(1) Services performed but unbilled and uncollected at July 31 were $1,750.
(2) Depreciation on equipment for the month was $202.
(3) One-twelfth of the insurance expired.
(4) An inventory count shows $320 of cleaning supplies on hand at July 31.
(5) Accrued but unpaid employee salaries were $415.
Answer:
Cash (Dr.) $9.800
Common Stock (Cr.) $9,800
Truck (Dr.) $6,560
Cash (Cr.) $1,640
Accounts Payable -Truck (Cr.) $4,920
Cleaning Supplies (Dr.) $740
Accounts Payable (Cr.) $740
Prepaid Insurance (Dr.) $1,440
Cash (Cr.) $1,440
Accounts Receivable (Dr.) $3,030
Service Revenue (Dr.) $3,030
Accounts Payable - Truck (Dr.) $820
Accounts Payable - Supplies (Dr.) $410
Cash (Cr.) $1,230
Cash (Dr.) $1,310
Accounts Receivable (Cr.) $1,310
Maintenance Expense Truck (Dr.) $240
Cash (Cr.) $240
Dividend paid (Dr.) $490
Cash (Cr.) $490
Explanation:
1) Accounts Receivable (Dr.) $1,750
Service Revenue (Cr.) $1,750
2) Depreciation expense (Dr.) $202
Accumulated Depreciation (Cr.) $202
3) Insurance Expense (Dr.) $120
Prepaid Insurance (Cr.) $120
4) Ending Inventory (Dr.) $320
Cleaning Supplies (Cr.) $320
5) Salaries Expense (Dr.) $415
Salaries Payable (Cr.) $415
sally borrowed $1000 from her friend monique two years ago. their arrangement required sally to repay $250 each year for the subsequent four years. Today with two paymewnts remaining on the loan, Sally offers to repay the loan with a single payment of $475. Assuming no change in interest rates throughout the entire time, should monique accept the signle $475 payment today, why or why not
Answer:
a
Explanation:
Here are the options to this question :
A. yes, 475 is more than the PV of the two remaining payments
B. More information is needed to decide
C. Monique is indifferent between the options, the PVs are equivalent
D. No, the PV of the remaining two payments is more than 475
We have to determine the present value of the remaining two payments and compare the options
Present value is the sum of discounted cash flows
Present value can be calculated using a financial calculator
Cash flow in year 1 = 0
Cash flow in year 2 = 0
Cash flow in year 3 = 250
Cash flow in year 4 = 250
I = 2%
PV = $466.54
$475 is greater than $466.54. Therefore, she should accept the single $475 payment
To find the PV using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
On January 1, 2019, Cullumber Corporation acquired machinery at a cost of $1650000. Cullumber adopted the straight-line method of depreciation for this machine and had been recording depreciation over an estimated life of ten years, with no residual value. At the beginning of 2022, a decision was made to change to the double-declining balance method of depreciation for this machine. Assuming a 30% tax rate, the cumulative effect of this accounting change on beginning retained earnings, is
Answer:
$0
Explanation:
Since in the given situation there is a depreciation method change i.e. from the straight-line method to double-declining method so there would be no impact restrospectively.
Hence, there would be no cumulative impact as it creates the impact prospectively
So the impact would be zero
