Business College

On January 1, 2016, Parker Company issued bonds with a face value of $62,000, a stated rate of interest of 11 percent, and a five-year term to maturity. Interest is payable in cash on December 31 of each year. The effective rate of interest was 13 percent at the time the bonds were issued. The bonds sold for $57,639. Parker used the effective interest rate method to amortize the bond discount. (Round your intermediate calculations and final answers to the nearest whole dollar amount.)
Required
a. Prepare an amortization table Discount Cash Payment Expense Amortization Carrying Value Interest Date January 1, 2016 December 31, 2016 December 31, 2017 December 31, 2018 December 31, 2019 December 31, 2020 Totals 57,639 6,820 7,493 673 58,312
b. What is the carrying value that would appear on the 2019 balance sheet? Carrying value
c. What is the interest expense that would appear on the 2019 income statement? Interest expense
d. What is the amount of cash outflow for interest that would appear in the operating activities section of the 2019 statement of cash flows?

Answers

Answer 1

Answer:

Parker Company

a. Amortization Table

Date Interest Discount

Cash Payment Expense Amortization Carrying Value

January 1, 2016 $57,639

December 31, 2016 $6,820 $7,493 $673 58,312

December 31, 2017 6,820 7,581 761 59,073

December 31, 2018 6,820 7,679 859 59,932

December 31, 2019 6,820 7,791 971 60,903

December 31, 2020 6,820 7,917 1,097 62,000

b. The carrying value that would appear on the 2019 balance sheet is:

= $60,903.

c. The interest expense that would appear on the 2019 income statement is:

= $7,791.

d. The amount of cash outflow for interest that would appear in the operating activities section of the 2019 statement of cash flows is:

= $6,820.

Explanation:

a) Data and Calculations:

Face value of bonds = $62,000

Proceeds from the issue = 57,639

Bonds discount = $4,361

Stated rate of interest = 11% paid annually on December 31

Effective rate of interest = 13%

December 31, 2016:

Interest expense = $7,493 ($57,639 * 13%)

Interest payable = $6,820 ($62,000 * 11%)

Discount amortization $673 ($7,493 - $6,820)

Bond value = $58,312 ($57,639 + $672)

December 31, 2017:

Interest expense = $7,581 ($58,312 * 13%)

Interest payable $6,820 ($62,000 * 11%)

Discount amortization $761 ($7,581 - $6,820)

Bond value = $59,073 ($58,312 + $761)

December 31, 2018:

Interest expense = $7,679 ($59,073 * 13%)

Interest payable $6,820 ($62,000 * 11%)

Discount amortization $859 ($7,679 - $6,820)

Bond value = $59,932 ($59,073 + $859)

December 31, 2019:

Interest expense = $7,791 ($59,932 * 13%)

Interest payable $6,820 ($62,000 * 11%)

Discount amortization $971 ($7,791 - $6,820)

Bond value = $60,903 ($59,932 + $971)

December 31, 2020:

Interest expense = $7,917 ($60,903 * 13%)

Interest payable $6,820 ($62,000 * 11%)

Discount amortization $1,097 ($7,917 - $6,820)

Bond value = $62,000 ($60,903 + $1,097)

Related Questions

Should a room attendant share information with others about a guest if he/she thinks what the guest is doing is morally wrong?

Answers

Answer:

No, a room attendant should not share information with others about a guest if he/she thinks what the guest is doing is morally wrong.

Explanation:

Morality is a subjective issue. Even at that, what may be morally wrong can still be legal. Hence, there is no reason for a room attendant to share information with others about a guest if he/she thinks what the guest is doing is morally wrong.

For example, smoking shisha or drinking alcohol may be morally wrong to a room attendant, but it is legal for the guest to do in a guest house or hotel, hence the guest is within his rights to do so. Therefore, there is no need for a room attendant to inform others in as much it is legal.

Production Budget and Direct Materials Purchases Budget
Jani Subramanian, owner of Jani's Flowers and Gifts, produces gift baskets for various special occasions. Each gift basket includes fruit or assorted small gifts (e.g., a coffee mug, deck of cards, novelty cocoa mixes, scented soap) in a basket that is wrapped in colorful cellophane. Jani has estimated the following unit sales of the standard gift basket for the rest of the year and for January of next year.
September 250
October 200
November 230
December 380
January 100
Jani likes to have 10% of the next month's sales needs on hand at the end of each month. This requirement was met on August 31.
Two materials are needed for each fruit basket:
Fruit 1 pound
Small gifts 6 items
The materials inventory policy is to have 10% of the next month's fruit needs on hand and 30% of the next month's production needs of small gifts. (The relatively low inventory amount for fruit is designed to prevent spoilage.) Materials inventory on August 31 met this company policy.
Required:
1. Prepare a production budget for September, October, November, and December for gift baskets. (Note: Round all answers to the nearest whole unit.)
Jani's Flowers and Gifts
Production Budget for Gift Baskets
For September, October, November, and December
September October November December
Sales
Desired ending inventory
Needed
Less: Beginning inventory production
Total
2. Prepare a direct materials purchases budget for the two types of materials used in the production of gift baskets for the months of September, October, and November. (Note: Round answers to the nearest whole unit.)
Jani's Flowers and Gifts
Direct Materials Purchases Budget
For September, October, and November
Fruit: September October November
Production
Pounds of fruit
Required for production
Desired ending inventory
Total needs
Less: Beginning inventory
Pounds purchased
Small gifts:
Production
Items required
Needed for production
Desired inventory
Total needs
Less: Beginning inventory
Items purchased

Answers

Answer:

Jani's Flowers and Gifts

1. Jani's Flowers and Gifts

Production Budget for September, October, November, and December for Gift Baskets:

Sept Oct. Nov. Dec.

Estimated sales units 250 200 230 380

Estimated ending inventory 20 23 38 10

Units available for sale 270 223 268 390

Beginning inventory 25 20 23 38

Production required 245 213 245 352

2. Jani's Flowers and Gifts

Direct Materials Purchases Budget

For September, October, and November

Sept Oct. Nov.

Fruit (1 pound):

Production requirement 245 213 245

Ending inventory: 21 25 35

Total needs 266 238 280

Beginning inventory: 25 21 25

Pounds purchased 241 217 255

Small Gifts (6 items each):

Production requirement 1,470 1,278 1,470

Ending inventory: 383 441 634

Total needs 1,853 1,719 2,104

Beginning inventory: 441 383 441

Items Purchased 1,412 1,336 1,663

Explanation:

a) Data and Calculations:

Sept Oct. Nov. Dec. Jan.

Estimated sales units 250 200 230 380 100

Estimated ending inventory 20 23 38 10

Units available for sale 270 223 268 390

Beginning inventory 25 20 23 38 10

Production required 245 213 245 352

Jani's Flowers and Gifts

Direct Materials Purchases Budget

For September, October, and November

Sept Oct. Nov. Dec.

Fruit 1 pound:

Production requirement 245 213 245 352

Ending inventory: 21 25 35 106

Total needs 266 238 280 458

Beginning inventory: 25 21 25 35

Pounds purchased 241 217 255 423

Small Gifts 6 items each:

Production requirement 1,470 1,278 1,470 2,112

Ending inventory: 383 441 634 1,899

Total needs 1,853 1,719 2,104 4,011

Beginning inventory: 441 383 441 634

Items Purchased 1,412 1,336 1,663 3,377

Well-managed companies set aside money to pay for emergencies that inevitably arise in the course of doing business. A commercial solid-waste recycling and disposal company in Mexico City puts 0.5% of its after-tax income into such an account. (a) How much will the company have after 7 years if after-tax income averages $15.2 million and inflation and market interest rates are 5% per year and 9% per year, respectively

Answers

Answer:

$699,200

Explanation:

According to the scenario, computation of the given data are as follows,

After tax income = $15,200,000

Amount in account = 0.5% × $15,200,000 = $76,000

Time period = 7 years

inflation = 5%

Interest rate = 9%

So, Total amount after 7 years = $76,000 × (F/A, 9%, 7)

= $76,000 ×[ [tex]((1+.09)^{7}-1 )[/tex] ÷ .09]

= $76,000 × [.82803912082 ÷ .09]

= $76,000 × 9.2

= $699,200

Based on market values, Gubler's Gym has an equity multiplier of 1.46 times. Shareholders require a return of 10.91 percent on the company's stock and a pretax return of 4.84 percent on the company's debt. The company is evaluating a new project that has the same risk as the company itself. The project will generate annual aftertax cash flows of $277,000 per year for 7 years. The tax rate is 39 percent. What is the most the company would be willing to spend today on the project

Answers

Answer:

The answer is "5.4% and 15,23,500".

Explanation:

Calculating the capital cost:

[tex]=(1-\frac{1}{1.46})\times 10.91\% \times (1-39\%)+(\frac{1}{1.46})\times 4.84\% \\\\=(\frac{1.46-1}{1.46})\times \frac{10.91}{100} \times (\frac{100-39}{100})+(\frac{1}{1.46})\times \frac{4.84}{100} \\\\ =(\frac{0.46}{1.46})\times \frac{10.91}{100} \times (\frac{61}{100})+(\frac{1}{1.46})\times \frac{4.84}{100} \\\\=\frac{306.1346}{14600}+\frac{4.84}{146} \\\\= 0.021+0.033 \\\\ =0.054\\\\= 5.4\%[/tex]

Maximum amount to be spent

[tex]=\frac{277,000\times 100 }{5.4} \times (1-\frac{1}{(1.054)^7})\\\\=\frac{277,000\times 100 }{5.4} \times (1-\frac{1}{1.44})\\\\=\frac{277,000\times 100 }{5.4} \times (1-0.7)\\\\=277,000 \times 100\times 0.055\\\\=\$15,23,500\\[/tex]

In preparing a company's statement of cash flows for the most recent year, the following information is available:
Loss on the sale of equipment $14,500
Purchase of equipment 150,000
Proceeds from the sale of equipment 131,000
Re-payment of outstanding bonds 89,500
Purchase of treasury stock 64,500
Issuance of common stock 98,500
Purchase of land 120,000
Increase in accounts receivable
during the year 45,500
Decrease in accounts payable
during the year 77,500
Payment of cash dividends 37,500
Net cash flows from investing activities for the year were:_____.
a. $262,000 of net cash used.
b. $228.500 of net cash provided.
c. $139,000 of net cash used.
d. $124,500 of net cash used.
e. $139,000 of net cash provided.

Answers

Answer:

c. $139,000 of net cash used.

Explanation:

Investing Activities shows results from Purchase or Sales of Assets or Investments.

Cash flow from Investing Activities

Purchase of equipment (150,000)

Proceeds from the sale of equipment 131,000

Purchase of land (120,000)

Net Cash used by Investing Activities (139,000)

Net cash flows from investing activities for the year were: ($139,000)

The Pines Company, which manufactures office equipment, is ready to introduce a new line of portable copiers. The following copier data are available:
Variable manufacturing cost $ 180
Variable selling and administrative cost 90
Applied fixed manufacturing cost 60
Allocated fixed selling and administrative cost 75
What price will the company charge if the firm uses cost-plus pricing based on total manufacturing cost and a markup percentage of 160%?

Answers

Answer:

$ 624

Explanation:

Given :

Variable manufacturing cost = $ 180

Applied fixed manufacturing cost = $ 60

Therefore, total manufacturing cost = 180 + 60

= $ 240

Mark up percentage = 160%

Price to be charged = 240 + 160% of 240

= 240 + 384

= $ 624

how market forces would act to return the market to state of equilibrium at the new equilibrium position.

Answers

Answer:

market forces would shift upwards or downwards

Explanation:

during a situation of high demand, supply would shift to the right in order to achieve more sales or in a situation of high supply the demand can be shifted to the right by decreasing prices. At low supply demand can be shifted leftwards by increasing prices and when demand is lower, supply falls due to lower sales

Market factors would change to the upside or downside would act to return the market to state of equilibrium at the new equilibrium position.

What do you mean by equilibrium?

When economic forces are in balance, there is said to be an economic equilibrium. In the absence of outside influences, economic variables essentially hold true to their equilibrium levels. Market equilibrium and economic equilibrium are two different concepts.

The set of economic factors that the economy is normally driven toward by supply and demand and other conventional economic processes is known as economic equilibrium.

The concept of economic equilibrium can also be used to describe a wide range of elements, including interest rates or overall consumer spending.

The point of equilibrium denotes a theoretical state of rest where all economic activities that "should" occur have actually happened, given the initial conditions of all significant economic variables.

Economists who think of economic processes as akin to physical phenomena like velocity, friction, heat, or fluid pressure draw the notion of equilibrium from the physical sciences. Nothing else changes once a system's physical forces are in equilibrium.

Learn more about equilibrium, here

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Crane, Inc. a manufacturer of gourmet potato chips, employs activity-based costing. The budgeted data for each of the activity cost pools is provided below for the year 2020.

Activity Cost Pools Estimated Overhead Estimated Use of Cost Drivers per Activity
Ordering and receiving $117,600 16,000 orders
Food processing 530,625 62,500 machine hours
Packaging 1,701,120 443,000 labor hours

For 2020, the company had 11,600 orders and used 50,900 machine hours, and labor hours totaled 490,000.

Required:
Calculate the overhead rates for each activity.

Answers

Answer:

Ordering and receiving = $7.35 per order

Food processing = $8.49 per machine hour

Packaging = $3.84 per labor hour

Explanation:

According to the scenario, computation of the given data are as follows,

We can calculate overhead rate by using following formula,

Overhead Rate = Estimated Overhead ÷ Estimated Use of Cost Drivers per Activity

So, by putting the value in the formula, we get

Overhead rate of Ordering and receiving = $117,600 ÷ 16,000 = $7.35 per order

Overhead rate of Food processing = 530,625 ÷ 62,500 = $8.49 per machine hour

Overhead rate of Packaging = 1,701,120 ÷ 443,000 = $3.84 per labor hour

The following items were selected from among the transactions completed by Aston Martin Inc. during the current year:
Apr. 15 Borrowed $225,000 from Audi Company, issuing a 30-day 6% not for that amount.
May 1. Purchased equipment by issuing a $320,000, 180-day not to Spyder Manufacturing Co., which disconted the not at the rate of 6%.
15. Paid Audi Company the interest due on the note of April 15 and renewed the loan by issuing a new 60-day, 8% not for $225,000. (Record both the debit and credit to the notes payable account.)
July 14. Paid Audi Company the amount due on the note of May 15.
Aug. 16. Purchased merchandise on the account for Exige Do., $90,000, terms, n/30.
Sept. 15. Issued a 45-day, 6% not for $90,000 to Exige Co., on account.
Oct. 28. Paid Spyder Manufacturing Co. the amount due on the note of May 1.
30. Paid Exige Co. the amount owed on the not of September 15.
Nov. 16. Purchased store equipment for Gallardo Co. for $20,000 each, coming due at 30-day intervals. Dec. 16. Paid the amount due Gallardo Co. on the first note in the series issued on November 16.
28. Settled a personal injoury lawsuit with a customer for $87,500, to be paid in January. Aston Martin Inc. accrued the loss in a litigation claims payable account.
Instructions
1. Journalize the transactions.
2. Journalize the adjusting entry for each of the following accrued expenses at the end of the current year:
a. Product warranty cost, %$26,800.
b. Interest on the 19 remaining notes owed to Gallardo Co.

Answers

Question Completion:

November 16 - Purchased store equipment from Gallardo Co. for $450,000, paying $50,000 and issuing a series of twenty 9% notes for $20,000 each, coming due at 30-day intervals.

Answer:

Aston Martin, Inc.

Apr. 15 Debit Cash $225,000

Credit 6% Notes payable (Audi Company) $225,000

To record the amount borrowed by issuing a 30-day 6% note.

May 1. Debit Equipment $320,000

Credit 6% Notes Payable (Spyder Manufacturing Co.) $320,000

To record the purchase of equipment by issuing a $320,000, 180-day note at the rate of 6%.

May 15. Debit Interest expense $1,125

Credit Cash $1,125

To record the payment of interest on note.

May 15 Debit 6% Notes payable (Audi Company) $225,000

Credit 8% Notes payable (Audi Company) $225,000

To record the exchange of notes, by issuing a new 60-day, 8% note for $225,000

July 14 Debit 8% Notes payable (Audi Company) $225,000

Credit Interest expense $3,000

Credit Cash $228,000

To record the full settlement of note with interest.

Aug. 16. Debit Inventory $90,000

Credit Accounts payable (Exige Co.) $90,000

To record the purchase of merchandise on account, terms, n/30.

Sept. 15. Debit Accounts payable (Exige Co.) $90,000

Credit 6% Note Payable (Exige Co.) $90,000

To record the settlement of account by issuing a 45-day, 6% note to Exige Co.

Oct. 28. Debit 6% Notes Payable (Spyder Manufacturing Co.) $320,000

Debit Interest expense $9,600

Credit Cash $329,600

To record the settlement of notes with interest.

30. Debit 6% Note Payable (Exige Co.) $90,000

Debit Interest Expense $675

Credit Cash $90,675

To record the settlement of notes with interest.

November 16 Debit Store equipment $450,000

Credit 9% Note payable (Gallardo Co.) $400,000

Credit Cash $50,000

To record the issuing of a series of twenty 9% notes for $20,000 each, coming due at 30-day intervals.

Dec. 16. Debit 9% Note payable (Gallardo Co.) $20,000

Debit Interest expense $3,000

Credit Cash $23,000

To record the settlement of the first note with interest on all the notes.

Dec. 28. Debit Litigation Claims Loss $87,500

Credit Litigation Claims Payable $87,500

To record the litigation loss.

Explanation:

a) Data and Calculations:

Apr. 15 Cash $225,000 6% Notes payable (Audi Company) $225,000

, issuing a 30-day 6% note for that amount.

May 1. Equipment $320,000 6% Notes Payable (Spyder Manufacturing Co.) $320,000 by issuing a $320,000, 180-day note at the rate of 6%.

15. Interest expense $1,125 Cash $1,125

6% Notes payable (Audi Company) $225,000 8% Notes payable (Audi Company) $225,000

issuing a new 60-day, 8% not for $225,000

July 14. 8% Notes payable (Audi Company) $225,000 Interest expense $3,000 Cash $228,000

Aug. 16. Inventory $90,000 Accounts payable (Exige Co.) $90,000

, terms, n/30.

Sept. 15. Accounts payable (Exige Co.) $90,000 6% Note Payable (Exige Co.) $90,000 Issued a 45-day, 6% not for $90,000 to Exige Co., on account.

Oct. 28. 6% Notes Payable (Spyder Manufacturing Co.) $320,000 Interest expense $9,600 Cash $329,600

30. 6% Note Payable (Exige Co.) $90,000 Interest Expense $675 Cash $90,675

November 16 - Store equipment $450,000 9% Note payable (Gallardo Co.) $400,000 Cash $50,000

issuing a series of twenty 9% notes for $20,000 each, coming due at 30-day intervals.

Dec. 16. 9% Note payable (Gallardo Co.) $20,000 Interest expense $3,000 Cash $23,000

28. Litigation Claims Loss $87,500 Litigation Claims Payable$87,500

what is human resource managment

Answers

Explanation:

Human resource management, or HRM, is defined as the process of managing employees in a company and it can involve hiring, firing, training and motivating employees.

An example of human resource management is the way in which a company hires new employees and trains those new workers.

noun

Answer:Human aid management is the strategic approach to the powerful management of people in a agency or corporation such that they assist their business gain a competitive benefit. it's far designed to maximise employee overall performance in provider of an corporation's strategic targets.

Explanation:

Friar's Corporation expects to sell 22,000 pool cues for $12 each. Direct materials costs are $3, direct manufacturing labor is $4, and manufacturing overhead is $0.84 per pool cue. The following inventory levels apply to 2019: Beginning inventory Ending inventory Direct materials 33,000 units 33,000 units Work-in-process inventory 0 units 0 units Finished goods inventory 1,400 units 2,500 units 21) On the 2019 budgeted income statement, what amount will be reported for cost of goods sold

Answers

Answer:

see explanation

Explanation:

Cost of goods sold = Opening Finished Goods + Cost of Goods Manufactured - Ending Finished Goods

Therefore apply the 22,000 to determine the Cost of Goods Manufactured and then the Cost of goods sold.

contribution marginJayleen Company makes two products: Carpet Kleen and Floor Deodorizer. Operating information from the previous year follows. Carpet Kleen Floor Deodorizer Units produced and sold 5,000 4,000 Machine hours used 5,000 2,000 Sales price per unit $ 7 $ 10 Variable cost per unit $ 4 $ 8 Fixed costs of $20,000 per year are presently allocated equally between both products. If the product mix were to change, total fixed costs would remain the same. The contribution margin per machine hour for Floor Deodorizer is:

Answers

Answer:

Contribution per machine hour = $4 per machine hour

Explanation:

The contribution per machine is the total contribution made divided by the total machine hours consumed.

Contribution per machine hour = Total contribution/Total machine hours

The total contribution made = Unit contribution × unit sold

unit contribution = selling price - variable cost

= 10-8= $2 per unit

Total contribution = $2× 4,000= $8,000

Total machine hour = 2,000

Contribution per machine hour= 8,000/2,000 = $4 per machine hour

Contribution per machine hour = $4 per machine hour

Your best friend Sue has always wanted to be an FBI agent for the U.S. government. However, because of the recent restructured changes in the FBI (due to the in creased terrorism threat), Sue is uncertain whether she wants to pursue an FBI career. She feels that the FBI does not provide as much career security as she once thought that it did. Sue is excellent with numbers, taxes, law, and communication.

Required:
a. Explain the purpose and mission of the CI Division.
b. Explain what other governmental agencies the CI Division works with.
c. Explain the requirements for an entry-level CI spe cial agent.

Answers

Answer:

Explanation:

The purpose of Criminal Investigation Division, or popularly called the CI Division is to be able investigate tax related frauds, to bring to justice citizens who one way or the other do not file tax returns m(whether or not this is intentional) or those who refuse to pay their taxes or do not play complete taxes. Remember, paying of taxes is the civic responsibility of citizens. CI also looks into other cases that are related to money laundering crimes.

One of the major requirements is a bachelor's degree and a minimum of at least three years of experience in high-level investigative work or even in criminology. This is what is required.

What is the relationship between organizational design and human resources?

Answers

Answer:

There is a clear relationship between organizational design and human resources. Thus, the main purpose of organizational design is to organize the human resources of a certain project or business, with the aim of maximizing the performance of each of the human components that are part of the organization.

Therefore, between organizational design and human resources there is a structural dependency relationship, by means of which human resources are organized and therefore function according to the organizational design proposed by the managers of the organization.

XYZ Inc. is seeking an investment of $64,000 from your venture capital firm. After extensive economic analysis, you estimate that the exit value of the company will be $307,000 4 years from now. Because of the risk, you will only invest if you can generate of return of 14% per year on your investment. The founders want to have 100,000 shares of the company. What is the post-money valuation of the company

Answers

Answer:

$181,768.65

Explanation:

Post-money valuation = Exit value / (1 + Required return)^years

Post-money valuation = $307,000 / (1+14%)^4

Post-money valuation = $307,000 / (1.14)^4

Post-money valuation = $307,000 / 1.68896016

Post-money valuation = $181768.6451526482

Post-money valuation = $181,768.65

So, the post-money valuation of the company is $181,768.65.

On January 1, 2019, the stockholders' equity section of Green Mountains Corporation's balance sheet reported the following: Common stock, par $1, authorized 100,000 shares, issued 10,000 shares $10,000 Additional paid-in capital 150,000 Retained earnings 160,000 During 2019, the following selected transactions occurred (assume they occurred in the order given):
April 1 Issued a 10% stock dividend when the market price was $20. The stock dividend is considered small.
May 1 200 shares of treasury stock were purchased at $18 per share.
September 1 Announced 2 for 1 stock split
December 1 Declared and paid a cash dividend of $0.5 per share.
Required: Journalize all the transactions listed above for equity during 2019.

Answers

Answer:

Date Account Titles and Explanation Debit Credit

Apr 1 Retained earnings $20,000

[10000*10%]*$20

To common stock $1,000

{1000*$1]

To additional Paid-in-capital $19,000

-Common stock [1000*(20-1)

(To record stock dividends)

May 1 Cash $3,600

(200*$18)

To treasury stock $3,600

(To record purchase of treasury stock)

Sept 1 No entry

Dec 1 Retained earnings $10,800

[(10000+1000-200)*2]*$0.5

To cash $10,800

(To record declaration and payment of cash dividends)

Extreme Adventurer, an outdoor nature magazine, marketed to potential customers who recently purchased camping equipment and four-wheel drive trucks. At the end of its marketing message pitch, the magazine exclaimed, “Tired of sitting in front of your computer? Explore the exciting outdoor world of nature. Subscribe today!” What does this call to action have the potential to do?

Answers

Answer:

potential customers who recently purchased camping equipment and four-wheel drive trucks.

Explanation:

The call to action has a huge potential hidden in reaching out to the customers and making them call for outdoor nature and adventure. The magazine tries to catch the reader's attention by making claims such as tired of sitting in front of your computer. Those people who usually stay at home and are unable to move out due to some reason can use their purchased camping equipment and four-wheel-drive trucks.

On January 1, 2019, the ledger of Whispering Winds Corp. contains the following liability accounts.

Accounts Payable $56,000
Sales Taxes Payable 8,800
Unearned Service Revenue 16,100

During January, the following selected transactions occurred.

Jan. 5 Sold merchandise for cash totaling $20,520, which includes 8% sales taxes.
12 Performed services for customers who had made advance payments of $11,500. (Credit Service Revenue.)
14 Paid state revenue department for sales taxes collected in December 2018 ($8,800).
20 Sold 900 units of a new product on credit at $50 per unit, plus 8% sales tax.
21 Borrowed $22,500 from Girard Bank on a 3-month, 8%, $22,500 note.
25 Sold merchandise for cash totaling $12,420, which includes 8% sales taxes.

Required:
Journalize the January transactions.

Answers

Answer:

Whispering Winds Corp.

Journal Entries:

Jan. 5 Debit Cash $20,520

Credit Sales Revenue $19,000

Credit Sales Taxes Payable $1,520

To record the sale of goods for cash, including 8% sales tax.

Jan. 12 Debit Unearned Service Revenue $11,500

Credit Service Revenue $11,500

To record service revenue earned.

Jan. 14 Debit Sales Tax Payable $8,800

Credit Cash $8,800

To record the payment of December Sales Taxes.

Ja. 20 Debit Accounts Receivable $48,600

Credit Sales Revenue $45,000

Credit Sales Taxes Payable $3,600

To record the sale of goods on credit, including sales tax of 8%.

Jan. 21 Debit Cash $22,500

Credit 8% Notes Payable (Girard Bank) $22,500

To record the borrowing of cash for a 3-month, 8%, note.

Jan. 25 Debit Cash $12,420

Credit Sales Revenue $11,500

Credit Sales Taxes Payable $920

To record the sale of goods for cash, including 8% sales tax.

Explanation:

a) Data and Calculations:

Liability account balances:

Accounts Payable $56,000

Sales Taxes Payable 8,800

Unearned Service Revenue 16,100

Analysis of January transactions:

Jan. 5 Cash $20,520 Sales Revenue $19,000 Sales Taxes Payable $1,520

Jan. 12 Unearned Service Revenue $11,500 Service Revenue $11,500

Jan. 14 Sales Tax Payable $8,800 Cash $8,800

Ja. 20 Accounts Receivable $48,600 Sales Revenue $45,000 Sales Taxes Payable $3,600

Jan. 21 Cash $22,500 8% Notes Payable (Girard Bank) $22,500 a 3-month, 8%, note.

Jan. 25 Cash $12,420 Sales Revenue $11,500 Sales Taxes Payable $920

How much interest (to the nearest dollar) would be saved on the following loan if the condominium were financed for 15 rather than 30 years? A $256,000 condominium bought with a 30% down payment and the balance financed for 30 years at 3.05%

Answers

Answer:

The interest saved is $49569.228 or $49569.

Explanation:

Total price of Condominium=$256,000

Downpayment=30% of total price=30%x$256,000= 76800

Amount Financed=Total Payment-Downpayment

Amount Financed=256000-76800=179200

Annual Interest rate=3.05%

Monthly interest rate =[tex]\frac{3.05\%}{12}[/tex]=0.25146%

The montly installment is calculated as follows:

[tex]M=\dfrac{P}{\dfrac{1-\left(\dfrac{1}{1+\dfrac{r}{100}}\right)^{nt}}{\dfrac{r}{100}}}[/tex]

Here

M is the montly installmentP is the amount financedr is the montly rate in percentagen is the number of yearst is the number of months in a year

Case 1 when the number of years is 30.

So the equation becomes

[tex]M=\dfrac{P}{\dfrac{1-\left(\dfrac{1}{1+\dfrac{r}{100}}\right)^{nt}}{\dfrac{r}{100}}}\\\\M=\dfrac{179200}{\dfrac{1-\left(\dfrac{1}{1+\dfrac{0.25146}{100}}\right)^{30*12}}{\dfrac{0.25146}{100}}}\\\\M=\dfrac{179200}{\dfrac{1-\left(\dfrac{1}{1+0.0025146}\right)^{30*12}}{0.0025146}}\\\\M=\dfrac{179200}{\dfrac{1-\left(\dfrac{1}{1.0025146}\right)^{30*12}}{0.0025146}}\\\\M=\dfrac{179200\times {0.0025146}}{1-\left(\dfrac{1}{1.0025146}\right)^{30*12}}\\M=\dfrac{450.61632}{0.59510 }\\M=\$757.2087[/tex]

So the total amount paid in installments is

[tex]T=M\times n\times t[/tex]

So the equation becomes

[tex]T=M\times n\times t\\T=757.2087\times 30\times 12\\T=\$272595.132[/tex]

So the interest is given as

[tex]I=T-P\\I=272595.132-179200\\I=\$93395.132[/tex]

So a total interest of $93395.132 is paid when the amount is financed for 30 years.

Case 2 when the number of years is 15.

So the equation becomes

[tex]M=\dfrac{P}{\dfrac{1-\left(\dfrac{1}{1+\dfrac{r}{100}}\right)^{nt}}{\dfrac{r}{100}}}\\\\M=\dfrac{179200}{\dfrac{1-\left(\dfrac{1}{1+\dfrac{0.25146}{100}}\right)^{15*12}}{\dfrac{0.25146}{100}}}\\\\M=\dfrac{179200}{\dfrac{1-\left(\dfrac{1}{1+0.0025146}\right)^{15*12}}{0.0025146}}\\\\M=\dfrac{179200}{\dfrac{1-\left(\dfrac{1}{1.0025146}\right)^{15*12}}{0.0025146}}\\\\M=\dfrac{179200\times {0.0025146}}{1-\left(\dfrac{1}{1.0025146}\right)^{15*12}}\\M=\dfrac{450.61632}{0.36368 }\\M=\$1239.0328[/tex]

So the total amount paid in installments is

[tex]T=M\times n\times t[/tex]

So the equation becomes

[tex]T=M\times n\times t\\T=1239.0328\times 15\times 12\\T=\$223025.904[/tex]

So the interest is given as

[tex]I=T-P\\I=223025.904-179200\\I=\$43825.904[/tex]

So a total interest of $43825.904 is paid when the amount is financed for 15 years.

The savings on interest if the condominium is financed for 15 years is given as

[tex]S=I_{30}-I_{15}\\S=93395.132-43825.904\\S=49569.228[/tex]

The interest saved is $49569.228 or $49569.

A credit signifies a decrease in
a. revenue
b. liabilities
c. assets
d. capital

Answers

Answer:

Explanation:

Suppose Nike, Inc. reported the following plant assets and intangible assets for the year ended May 31, 2022 (in millions): other plant assets $935.0, land $220.0, patents and trademarks (at cost) $510.0, machinery and equipment $2,160.0, buildings $980.0, goodwill (at cost) $210.0, accumulated amortization $50.0, and accumulated depreciation $2,200. Prepare a partial balance sheet for Nike for these items.

Answers

Answer:

NIKE, INC.

Partial Balance Sheet as of May 31, 2022

(in millions)

Property, Plant and Equipment

Land $220.0

Buildings $980.0

Machinery and Equipment $2160.0

Other Plant Assets $935.0

Less: Accumulated Depreciation $2200.0 $1875.0

Total Property, Plant and Equipment $2095.0

Intangible Assets:

Goodwill $210.0

Patents and Trademarks $510.0

Less: Accumulated Amortization $50.0 $460.0

Total Intangible Assets $670.0

Tara incorporates her sole proprietorship, transferring it to newly formed Black Corporation. The assets transferred have an adjusted basis of $290,000 and a fair market value of $300,000. Also transferred by Tara was $50,000 in liabilities, all related to the business. In return for these transfers, Tara receives all of the stock in Black Corporation.

a. Black Corporation has a basis of $241,000 in the property.
b. Black Corporation has a basis of $240,000 in the property.
c. Tara’s basis in the Black Corporation stock is $241,000.
d. Tara’s basis in the Black Corporation stock is $249,000.
e. None of the above.

Answers

Answer:

Black Corporation

e. None of the above.

Explanation:

a) Data and Calculations:

Adjusted basis of assets = $290,000

Fair market value of assets = $300,000

Liabilities transferred = $50,000

Black Corporation's basis = $250,000 ( $300,000 - $50,000)

Tara's basis in the Black Corporation = $240,000

b) According to U.S. Code 351, no gain or loss shall be recognized for Tara if property is transferred to Black Corporation by Tara solely in exchange for stock in Black Corporation, and immediately after the exchange, Tara comes into the control of Black Corporation.

Desmond is 25 years old and he participates in his employer’s 401(k) plan. During the year, he contributed $3,000 to his 401(k) account. What is Desmond’s 2016 saver’s credit in each of the following alternative scenarios?
a) Desmond is not married and has no dependents. His AGI after deducting his 401(k) contribution is $34,000.
b) Desmond is not married and has no dependents. His AGI after deducting his 401(k) contribution is $17,500.
c) Desmond files as a head of household and has an AGI of $44,000.
d) Desmond and his wife file jointly and report an AGI of $30,000 for the year.

Answers

Answer: See explanation

Explanation:

The savers credit is mostly used to motivate taxpayers so that they'll contribute to their retirement plans.

a. Desmond is not married and has no dependents. His AGI after deducting his 401(k) contribution is $34,000.

In this case, there'll be no credit that's available for Desmond as he'll be all under files AGI and his maximum savers credit will be $0.

b) Desmond is not married and has no dependents. His AGI after deducting his 401(k) contribution is $17,500.

Since he's single and doesn't have dependents, and his AGI is $17500, therefore, the saver's credit of Desmond will be 50% of $2000 which will be:

= 50% × $2000.

= 0.5 × $2000

= $1000

c) Desmond files as a head of household and has an AGI of $44,000.

Here, his percentage of saver's credit will be 10% of $2000 because he AGI of $44,000 which falls between $30001 - $46125. Therefore savers income will be:

= 10% × $2000

= 0.1 × $2000

= $200

d) Desmond and his wife file jointly and report an AGI of $30,000 for the year.

Here, the saver's percentage used will be 50% of $2000 and this will be:

= 50% × $2000

= 0.5 × $2000

= $1000

Branch Adjustment account is in the nature of :
Real account
O Nominal account
Personal account
>
O None of these

Answers

Answer:

B. Nominal Account.

Explanation:

Branch accounting is a system of bookkeeping that uses a system of separate branch accounting. This branch is also known as the operating locations of an organization.

The account which uses branch adjustment accounting is a nominal account. The nominal account is the general ledger account that closes its account at the end of every year, using branch accounting.

Therefore, option B is correct.

Digital Solutions Inc. uses flexible budgets that are based on the following data:
Sales commissions 6% of sales
Advertising expense 14% of sales
Miscellaneous administrative expense $8,500 per month plus 5% of sales
Office salaries expense $54,000 per month
Customer support expenses $18,000 per month plus 32% of sales
Research and development expense $75,000 per month
Prepare a flexible selling and administrative expenses budget for October for sales volumes of $500,000, $750,000, and $1,000,000.

Answers

Answer:

Digital Solutions Inc.

Selling and Administrative Expenses Budget for October:

Sales volumes $500,000 $750,000 $1,000,000

Selling expenses:

Sales commissions 6% $30,000 $45,000 $60,000

Advertising expense 14% 70,000 105,000 140,000

Customer support expenses:

Fixed 18,000 18,000 18,000

Variable 32% of sales 160,000 240,000 320,000

Total selling expenses $278,000 $408,000 $538,000

Administrative expenses:

Miscellaneous administrative expense:

Fixed 8,500 8,500 8,500

Variable 5% of sales 25,000 37,500 50,000

Office salaries expense 54,000 54,000 54,000

Research and

development expense 75,000 75,000 75,000

Total administrative exp. $162,500 $175,000 $187,500

Total $440,500 $583,000 $725,500

Explanation:

a) Data and Calculations:

Sales commissions 6% of sales

Advertising expense 14% of sales

Miscellaneous administrative expense $8,500 per month plus 5% of sales

Office salaries expense $54,000 per month

Customer support expenses $18,000 per month plus 32% of sales

Research and development expense $75,000 per month

Sales volumes of $500,000, $750,000, and $1,000,000

Sales volumes $500,000 $750,000 $1,000,000

Selling and administrative expenses:

Sales commissions 6% $30,000 $45,000 $60,000

Advertising expense 14% 70,000 105,000 140,000

Miscellaneous administrative expense:

Fixed 8,500 8,500 8,500

Variable 5% of sales 25,000 37,500 50,000

Office salaries expense 54,000 54,000 54,000

Customer support expenses:

Fixed 18,000 18,000 18,000

Variable 32% of sales 160,000 240,000 320,000

Research and

development expense 75,000 75,000 75,000

Total $440,500 $583,000 $725,500

Your client took a complete physical inventory count under your observation as of December 15 and adjusted the inventory control account (perpetual tory method) to agree with the physical inventory count. After considering the count adjust ments as of December 15 and after reviewing the transactions recorded from December 16 to December 31, you are almost ready to accept the inventory balance as fairly stated. However, your review of the sales cutoff as of December 15 and December 31 disclosed the following items not previously considered Sales Date Cost Price Shipped Billed Credited to Inventory Control $28,400 $36,900 12/14 12/16 12/16 39,100 50,200 12/10 12/19 12/10 18,900 21,300 1/2 12/31 12/31
Required: what adjusting journal entries, if any, would you make for each of these items? Explain why each adjustment is necessary. (AICPA adapted)

Answers

Answer:

The adjustments made are as attached in the excel sheet. As the goods are entered prior to shipment in the first item, the inventory control variation is to be made.

Explanation:

As the goods are shipped before taking the physical inventory, the inventory control is not made. As the shipment got prior to the physical inventory, the control amount is credited. However, the auditee credited Inventory Control for the cost of these goods on December 16, one of these two credits must be removed.

For the third item, similar situation happened where the inventory control is made.

Assume that three identical units of merchandise are purchased during October, as follows: Units Cost October 5 Purchase 1 $ 5 12 Purchase 1 7 28 Purchase 1 9 Total 3 $21 Assume one unit is sold on October 31 for $15. Determine Cost of Merchandise Sold, Gross profit, and Ending Inventory under the FIFO method.

Answers

Answer:

Cost of merchandise sold = $5

Closing inventory=$16

Gross profit =$20

Explanation:

Under the FIFO system , inventories are priced using the price of the oldest batch in the stock, after which the price of the next oldest batch and this is done in turn. It is based on the principle that the first batch that arrives the store should be issued first.

Using the FIFO method of the perpetual inventory, the 1 unit sold by the company will be priced as follows:

1 units at a price of $5 = 1× $5= $5

Cost of merchandise sold = $5

Closing inventory = Total cost of golds in stock less the cost of goods sold

= 21 - 5= 16

Gross profit = Sales value - cost of goods sold

= $15-$5= $20

Cost of merchandise sold = $5

Closing inventory=$16

Gross profit =$20

Why is it important to reconcile your bank statements?

Answers

Answer:

hen you reconcile your business bank account, you compare your internal financial records against the records provided to you by your bank. A monthly reconciliation helps you identify any unusual transactions that might be caused by fraud or accounting errors, and the practice can also help you spot inefficiencies.

Explanation:

Answer:

When you reconcile your business bank account, you compare your internal financial records against the records provided to you by your bank. A monthly reconciliation helps you identify any unusual transactions that might be caused by fraud or accounting errors, and the practice can also help you spot inefficiencies.

On January 3, 2020, Hanna Corporation signed a lease on a machine for its manufacturing operation and the lease commences on the same date. The lease requires Hanna to make six annual lease payments of $12,000 with the first payment due December 31,2020. Hanna could have financed the machine by borrowing the purchase price at an interest rate of 7%. a. Prepare the journal entries that Hanna Corporation would make on January 3 and December 31, 2020, to record this lease assuming. i. the lease is reported as an operating lease. ii. the lease is reported as a finance lease. b. Post the journal entries of part a to the appropriate T-accounts. c. Show how the entries posted in part b would affect the financial statements using the financial statement effects template.

Answers

Answer:

Hanna Corporation

a. Journal entries that Hanna Corporation would make on January 3 and December 31, 2020 to record this lease assuming:

i. the lease is reported as an operating lease:

January 3, 2020: No journal entry

December 31, 2020:

Debit Lease Expense $12,000

Credit Cash $12,000

To record the payment for the operating lease.

ii. the lease is reported as a finance lease:

January 3, 2020:

Debit Right to Use Asset $57,198.48

Credit Lease Liability $57,198.48

To recognize the right to the leased asset and establish the related liability.

December 31, 2020:

Debit Lease Liability $7,996,11

Debit Interest Expense $4,003.89

Credit Cash $12,000

To record the payment for the lease liability and interest expense.

b. T-accounts;

Operating lease:

Cash Account