Answer:
Calculation of Saxton's equity in Taylor's net Income
Saxton's share of Taylor reported Income $62,500
($250,000 * 25%)
Less: Revaluation adjustment $30,000
($1,800,000/15)*25%
Equity in net income of Taylor $32,500
Saxton's equity in Taylor's net income is $32,500
Preparation of the required Journal entries
Account Titles and Explanation Debit Credit
Cash ($100,000*25%) $25,000
Investment in Taylor $25,000
(To record receipt of dividends)
Investment in Taylor $32,500
Equity in Net Income of Taylor $32,500
(To record earnings of the investee)
The chart of accounts used by Norton Printing Company is listed below.
You are to indicate the proper accounts to be debited and credited for the following transactions by writing the account number(s) in the appropriate boxes.
CHART OF ACCOUNTS
1 Cash 8 Common Stock
2 Accounts Receivable 9 Retained Earnings
3 Paper Supplies 10 Dividends
4 Copy Machines 11 Service Revenue
5 Accounts Payable 12 Advertising Expense
6 Note Payable 13 Rent Expense
7 Unearned Revenue
Number(s) Number(s)
of account(s) of account(s)
debited credited
1. Stockholders invest $90,000 cash to start the business.
2. Purchased three digital copy machines for $400,000, paying $100,000 cash and signing a 5-year, 6% note for the remainder.
3. Purchased $5,000 paper supplies on credit.
4. Cash received for photocopy services amounted to $7,000.
5. Paid $500 cash for radio advertising.
6. Paid $800 on account for paper supplies purchased in transaction 3.
7. Dividends of $1,500 were paid to stockholders.
8. Paid $1,200 cash for rent for the current month.
9. Received $2,000 cash advance from a customer for future copying.
10. Billed a customer for $450 for photocopy services completed.
Answer:
Indication of accounts to be debited and credited:
Transaction Number(s) Number(s)
of account(s) of account(s)
debited credited
1. 1 8
2. 4 1 and 6
3. 3 5
4. 1 11
5. 12 1
6. 5 1
7. 10 1
8. 13 1
9. 1 7
10. 2 11
Explanation:
a) Data:
CHART OF ACCOUNTS
1 Cash 8 Common Stock
2 Accounts Receivable 9 Retained Earnings
3 Paper Supplies 10 Dividends
4 Copy Machines 11 Service Revenue
5 Accounts Payable 12 Advertising Expense
6 Note Payable 13 Rent Expense
7 Unearned Revenue
b) The Chart of Accounts is a list of the Assets, Liabilities, Equity, Revenue, and Expense accounts that an organization uses to record its business transactions. They accumulate and summarize business transactions, making them reportable in good accounting formats.
Entries for Stock Dividends Zurich Corporation has 17,000 shares of $50 par common stock outstanding. On June 8, Zurich Corporation declared a 4% stock dividend to be issued August 12 to stockholders of record on July 13. The market price of the stock was $69 per share on June 8. Journalize the entries required on June 8, July 13, and August 12. For a compound transaction, if an amount box does not require an entry, leave it blank. If no entry is required, select "No Entry Required" and leave the amount boxes blank.Aug. 2 Stock Dividends Stock Dividends Distributable Paid-In Capital in Excess of Par-Common Stock Sept. 15 No entry required No entry required Oct. 8 Stock Dividends Distributable Common Stock
Answer:
Date Account Title and Description Debit Credit
June 8 Stock Dividends $46,920
Stock Dividends Distributable $34,000
Paid-in-Capital in Excess of Par $12,920
common stock
(Being Dividend declared recorded)
July 13 No entry required
No entry required
Aug 12. Stock Dividends Distributable $34,000
Common stock $34,000
(Being Dividend declared as par value recorded)
Working Notes:
Stock dividend = 17,000 * 4% * $69 = $46,920
Stock dividend distributable = 17,000 * 4% * $50 = $34,000
Paid in capital in excess of par - Common stock = $46,920 - $34,000 = $12,920
Greenwood Company manufactures two products—13,000 units of Product Y and 5,000 units of Product Z. The company uses a plantwide overhead rate based on direct labor-hours. It is considering implementing an activity-based costing (ABC) system that allocates all of its manufacturing overhead to four cost pools. The following additional information is available for the company as a whole and for Products Y and Z:
Activity Cost Pool Activity Measure Estimated Overhead Cost Expected Activity
Machining Machine-hours $ 228,000 12,000 MHs
Machine setups Number of setups $ 40,000 100 setups
Production design Number of products $ 74,000 2 products
General factory Direct labor-hours $ 288,000 12,000 DLHs
Activity Measure Product Y Product Z
Machining 7,000 5,000
Number of setups 40 60
Number of products 1 1
Direct labor-hours 7,000 5,000
Using the ABC system, what percentage of the General Factory cost is assigned to Product Y and Product Z? (Round your intermediate calculations and final answers to 2 decimal places.)
Answer:
Product Y 58%
Product Z 42%
Explanation:
Calculation for the percentage of the General Factory cost is assigned to Product Y and Product Z
First step is to find the General factory activity rate
General factory activity rate =$ 288,000/12,000DLHs
General factory activity rate= 24.00
Second step is to Compute Overhead allocation: for Product Y and Product Z
Overhead
Product Y(7,000*24.00) 168,000
Product Z(5,000*24) 120,000
Total 288,000
Last step is to Compute the percentage of the General Factory cost is assigned to Product Y and Product Z
Overhead Percentage of total
Product Y 168,000/288,000
Product Y=0.58*100
Product Y =58%
Product Z 120,000/288,000
Product Z=0.42*100
Product Z=42%
Therefore the percentage of the General Factory cost assigned to Product Y is 58% and Product Z is 42%
The total factory overhead for Bardot Marine Company is budgeted for the year at $1,082,125, divided into two departments: Fabrication, $841,500, and Assembly, $240,625. Bardot Marine manufactures two types of boats: speedboats and bass boats. The speedboats require three direct labor hours in Fabrication and two direct labor hours in Assembly. The bass boats require three direct labor hours in Fabrication and three direct labor hours in Assembly. Each product is budgeted for 5,500 units of production for the year.If required, round all per unit answers to the nearest cent.a. Determine the total number of budgeted direct labor hours for the year in each department.Fabrication direct labor hoursAssembly direct labor hoursb. Determine the departmental factory overhead rates for both departments.Fabrication $per dlhAssembly $per dlhc. Determine the factory overhead allocated per unit for each product using the department factory overhead allocation rates.Speedboat: $per unitBass boat: $per unit
Answer:
a. Determine the total number of budgeted direct labor hours for the year in each department.
Fabrication 33,000 direct hours Assembly 27,500 direct hoursb. Determine the departmental factory overhead rates for both departments.
Fabrication $841,500 / 33,000 direct hours = $25.50 per direct labor hour Assembly $240,625 / 27,500 direct hours = $8.75 per direct labor hourc. Determine the factory overhead allocated per unit for each product using the department factory overhead allocation rates.
Speedboats = (3 x $25.50) + (2 x $8.75) = $94Bass boats = (3 x $25.50) + (3 x $8.75) = $102.75Explanation:
total overhead expense $1,082,125
Fabrication $841,500Assembly $240,625speedboats (5,500 units)
Fabrication 3 hour x 5,500 = 16,500 hours Assembly 2 hour x 5,500 = 11,000 hoursbass boats (5,500 units)
Fabrication 3 hour x 5,500 = 16,500 hours Assembly 3 hours x 5,500 = 16,500 hoursA company is considering constructing a plant to manufacture a proposed new product. The land costs $, the building costs $, the equipment costs $, and $ additional working capital is required. It is expected that the product will result in sales of $ per year for years, at which time the land can be sold for $, the building for $, and the equipment for $. All of the working capital would be recovered at the EOY . The annual expenses for labor, materials, and all other items are estimated to total $. If the company requires a MARR of % per year on projects of comparable risk, determine if it should invest in the new product line. Use the AW method.
a) The AW is $.........
b) According to the AW decision rule the investment in the new product line .. (is not/is) economically justified.
Complete question :
A company is considering constructing a plant to manufacture a proposed new product. The land costs $350,000, the building costs $600,000, the equipment costs $250,000, and $150,000 additional working capital is required. It is expected that the product will result in sales of $900,000 per year for 10 years, at which time the land can be sold for $450,000, the building for $400,000, and the equipment for $50,000. All of the working capital would be recovered at the EOY 10. The annual expenses for labor, materials, and all other items are estimated to total $500,000. If the company requires a MARR of 15% per year on projects of comparable risk, determine if it should invest in the new product line. Use the AW method.
Answer: $182,800
Explanation:
Given the following :
land costs = $350,000
building costs = $600,000
equipment costs = $250,000
additional working capital = $150,000
Expected sales per year for 10 years = $900,000
Salvage value After (10years):
Cost of land = $450,000
Building = $400,000
Equipment = $50,000
All working capital will be recovered at end of year, Hence, working capital will be $150,000
Annual expenses = $500,000
MARR = 15% per annum
Total amount invested = $(350,000 + 600,000 + 250,000 + 150,000) = $1,350,000
Expected sales per Annum = annual revenue = $900,000
Expenditure per year = $500,000
Net income = Revenue - Expenditure
Net income = $900,000 - $500,000 = $400,000
Worth or valuation of investment after 10 years :
($450,000 + $50,000 + $400,000 + $150,000)
= $1,050,000
Hence,
Capital recovery factor : (A/P, 15%, 10) = 0.199
Sinking fund table : (A/F, 15%, 10) =0.049
NET ANNUAL WORTH :
-Initial investment(A/P, 15%, 10) + annual net income + salvage value(A/F, 15%,10)
= - 1,350,000(0.199) + 400,000 + 1,050,000(0.049)
= $182,800
The investment is economically justified as the net annual worth yields a positive value.
The following incorrect income statement was prepared by the accountant of the Axel Corporation:
AXEL CORPORATION Income Statement For the Year Ended December 31, 2021 Revenues and gains:
Sales revenue $ 592,000
Interest revenue 32,000
Gain on sale of investments 86,000
Total revenues and gains 710,000
Expenses and losses:
Cost of goods sold $ 325,000
Selling expense 67,000
Administrative expense 87,000
Interest expense 16,000
Restructuring costs 55,000
Income tax expense 40,000
Total expenses and losses 590,000
Net Income $ 120,000
Earnings per share $ 1.20
Required: Prepare a multiple-step income statement for 2021 applying generally accepted accounting principles. The income tax rate is 25%. (Amounts to be deducted should be indicated with a minus sign. Round EPS answer to 2 decimal places.)
Answer:
AXEL CORPORATION
Income Statement
For the Year Ended December 31, 2021:
Sales revenue $ 592,000
Cost of goods sold (325,000 )
Gross profit $ 267,000
Operating Expenses:
Selling expense 67,000
Administrative expense 87,000 (154,000)
Operating Profit $113,000
Interest revenue 32,000
Gain on sale of investments 86,000
Profit before Interest expense $231,000
Interest expense (16,000)
Restructuring costs (55,000)
Profit before tax $160,000
Income tax expense (40,000 )
Net Income $ 120,000
Earnings per share $ 1.20
Explanation:
a) Data and Calculations:
AXEL CORPORATION Income Statement For the Year Ended December 31, 2021 Revenues and gains:
Sales revenue $ 592,000
Interest revenue 32,000
Gain on sale of investments 86,000
Total revenues and gains 710,000
Expenses and losses:
Cost of goods sold $ 325,000
Selling expense 67,000
Administrative expense 87,000
Interest expense 16,000
Restructuring costs 55,000
Income tax expense 40,000
Total expenses and losses 590,000
Net Income $ 120,000
Earnings per share $ 1.20
b) Axel Corporation's Income Statement is a financial statement that shows the profitability of the corporation. It reveals how the corporation is able to convert the costs it incurred in the business into profitability for the stockholders. It is one of the key financial statements, whose result (called the bottom-line or net income or loss) is carried forward to the next accounting period.
Indicate whether the following statements about the conceptual framework are true or false. (a) Accounting rule-making that relies on a body of concepts will result in useful and consistent pronouncements. select an option (b) General-purpose financial reports are most useful to company insiders in making strategic business decisions. select an option (c) Accounting standards based on personal conceptual frameworks generally will result in consistent and comparable accounting reports. select an option (d) Capital providers are the only users who benefit from general-purpose financial reporting. select an option (e) Accounting reports should be developed so that users without knowledge of economics and business can become informed about the financial results of a company. select an option (f) The objective of financial reporting is the foundation from which the other aspects of the framework logically result.
Answer:
Explanation:
(a) Accounting rule-making that relies on a body of concepts will result in useful and consistent pronouncements. select an option (TRUE)
This is true be
(b) General-purpose financial reports are most useful to company insiders in making strategic business decisions. select an option (FALSE)
This is false because General-purpose financial reports are most useful to investors as well as shareholders. And it let us financial information about a particular business.
(c) Accounting standards based on personal conceptual frameworks generally will result in consistent and comparable accounting reports. select an option(FALSE)
This is false because Accounting standards based on personal conceptual frameworks will have a diverse report, that cannot be compared.
(d) Capital providers are the only users who benefit from general-purpose financial reporting. select an option (FALSE)
(e) Accounting reports should be developed so that users without knowledge of economics and business can become informed about the financial results of a company. select an option(FALSE)
(f) The objective of financial reporting is the foundation from which the other aspects of the framework logically result.(TRUE)
Randel Manufacturing has five activity cost pools and two products (a budget tape vacuum and a deluxe tape vacuum). Information is presented below:
Cost Drivers by Product Activity Cost Pool Cost Driver Estimated Overhead Budget Deluxe Ordering and Receiving Orders $130,000 600 400 Machine Setup Setups 297,000 500 400 Machining Machine hours 1,000,000 150,000 100,000 Assembly Parts 1,600,000 1,200,000 800,000 Inspection Inspections 300,000 550 450 Compute the overhead cost per unit for each product. Production is 700,000 units of Budget and 200,000 units of Deluxe. (Round overhead cost per unit to 2 decimal places, e.g. 12.25 and cost assigned to 0 decimal places, e.g. 2,500.)
Answer:
Overhead Cost
Activity Cost Pool Cost per activity Budget Delux
Ordering and receiving $130 $78,000 $52,000
Machine setup $330 $165,000 $132,000
Machining $4.0 $600,000 $400,000
Assembly $0.8 $960,000 $640,000
Inspection $300 $165,000 $135,000
$1,968,000 $1,359,000
Budget Cost
Total Overhead cost $1,968,000 $1,359,000
Units 700,000 200,000
Overhead cost per unit $2.81 $6.80
Cost of Goods Manufactured and Sold Anglin Company, a manufacturing firm, has supplied the following information from its accounting records for the last calendar year:
Direct labor cost $494,890
Purchases of direct materials 377,110
Freight-in on materials 7,300
Factory supplies used 18,130
Factory utilities 52,290
Commissions paid 79,258
Factory supervision and indirect labor 162,840
Advertising 146,240
Materials handling 16,180
Work-in-process inventory, January 1 204,630
Work-in-process inventory, December 31 117,380
Direct materials inventory, January 1 37,040
Direct materials inventory, December 31 36,100
Finished goods inventory, January 1 59,290
Finished goods inventory, December 31 63,240
A. Prepare a cost of goods manufactured statement.
B. Prepare a cost of goods sold statement.
Answer:
a. Anglin company
Schedule of cost of goods manufactured
Direct Material:
Direct Material, January 1 $37,040
Add: Purchase of direct Material $377,110
Freight in on materials $7,300
Materials available $421,450
Less: Direct Material, Dec 31 $36,100
Direct Materials used in production $385,350
Direct manufacturing Labor $494,890
Manufacturing Overhead
Factory supplies used $18,130
Factory utilities $52,290
Factory supervision and indirect labor $162,840
Materials handling $16,180
Total Manufacturing overhead $249,440
Total Manufacturing Costs added $1,129,680
Add: Work in Process, January 1 $204,630
Less: Work in Process, Dec 31 $117,380
Cost of goods manufactured $1,451,690
b. Anglin Company
Schedule of cost of goods sold
Cost of goods manufactured $1,451,690
Add: Finished goods, January 1 $59,290
Total Cost of goods available for sale $1,510,980
Less: Finished Goods, Dec 31 $63,240
Cost of goods sold $1,447,740
Sarasota Architects incorporated as licensed architects on April 1, 2022. During the first month of the operation of the business, these events and transactions occurred:
Apr. 1 Stockholders invested $24,300 cash in exchange for common stock of the corporation.
1 Hired a secretary-receptionist at a salary of $506 per week, payable monthly.
2 Paid office rent for the month $1,215.
3 Purchased architectural supplies on account from Burmingham Company $1,755.
10 Completed blueprints on a carport and billed client $2,565 for services.
11 Received $945 cash advance from M. Jason to design a new home.
20 Received $3,780 cash for services completed and delivered to S. Melvin.
30 Paid secretary-receptionist for the month $2,024.
30 Paid $405 to Burmingham Company for accounts payable due.
Required:
Journalize the transactions.
Answer:
Date Account Titles and Explanation Debit Credit
Apr. 1 Cash $24,300
Common Stock $24,300
(To record the amount of cash invested into the business)
Apr. 1 No entry for hiring an employee because there is no monetary transaction.
Apr. 2 Office Rent $1,215
Cash $1,215
(To record the payment of office rent by cash)
Apr. 3 Supplies $1,755
Accounts Payable $1,755
(To record the purchase of supplies on account)
Apr. 10 Accounts Receivable $2,565
Service Revenue $2,565
(To record the services provided on account)
Apr. 11 Cash $945
Unearned Service Revenue $945
(To record the receipt of cash for the services to be
provided in future)
Apr. 20 Cash $3,780
Accounts Receivable $3,780
(To record the collection of cash from the
credit services provided)
Apr. 30 Salaries Expense $2,024
Cash $2,024
(To record the payment of salaries by cash)
Apr. 30 Accounts Payable $405
Cash $405
(To record the payment of accounts payable due)
According to the sectoral shifts hypothesis:_______.
a. frictional unemployment will cause workers to extend their temporary lay-offs.
b. most unemployed workers will return to their previous job because the firm knows the skills of the worker.
c. there will always be a pool of unemployed workers who experience spells of unemployment because they do not aggressively search for work cyclical unemployment will always exceed frictional unemployment.
d. there will be always be some level of unemployment because the skills of the workers do not match the skill requirements of employers.
Answer:
a. frictional unemployment will cause workers to extend their temporary lay-offs.
Explanation:
Remember, frictional unemployment is a type of unemployment that is self-inflicted by workers who want to change jobs (sectorial shifting) within the same economy; thus, they quit their present job in search of a new one.
However, due to uncontrolled circumstances, they may extend their temporary layoffs or period of unemployment, making them become frictionally unemployed.
The information shown below is taken from the accounts of Wildhorse Corporation for the year ended December 31, 2020.
Net income $370,000
Amortization of patent 12,000
Proceeds from issuance of common stock 150,000
Decrease in inventory 27,000
Sale of building at a $14,000 gain 84,000
Decrease in accounts payable 12,000
Purchase of equipment 150,000
Payment of cash dividends 28,000
Depreciation expense 54,000
Decrease in accounts receivable 20,000
Payment of mortgage 71,000
Increase in short-term notes payable 8,000
Sale of land at a $7,000 loss 44,000
Purchase of delivery van 30,000
Cash at beginning of year 300,000
Prepare a statement of cash flows for Wildhorse Corporation for the year ended December 31, 2020.
Answer and Explanation:
Statement of Cash flow attached
Harper, Inc. acquires 40 percent of the outstanding voting stock of Kinman Company on January 1, 2017, for $322,000 in cash. The book value of Kinman net assets on that date was $665,000, although one of the company's buildings, with a $70,800 carrying amount, was actually worth $114,300. This building had a 10-year remaining life. Kinman owned a royalty agreement with a 20-year remaining life that was undervalued by $96,500. Kinman sold inventory with an original cost of $44,100 to Harper during 2017 at a price of $63,000. Harper still held $27,600 (transfer price) of this amount in inventory as of December 31, 2017. These goods are to be sold to outside parties during 2018. Kinman reported a $55,800 net loss and a $26,400 other comprehensive loss for 2017. The company still manages to declare and pay a $12,000 cash dividend during the year. During 2018, Kinman reported a $48,200 net income and declared and paid a cash dividend of $14,000. It made additional inventory sales of $104,000 to Harper during the period. The original cost of the merchandise was $65,000. All but 30 percent of this inventory had been resold to outside parties by the end of the 2018 fiscal year. Prepare all journal entries for Harper for 2017 and 2018 in connection with this investment. Assume that the equity method is applied.
Answer:
Please find attached.
Explanation:
Please find attached the journal entries per the attached question
Munchies, Inc., dominates the snack-food industry with its Salty Chip brand. Assume that Munchies purchased Sweet Snacks Company for $5.4 million cash. The market value of Sweet Snacks’ assets is $10 million, and Sweet Snacks has liabilities with a market value of $7.1 million.
Required:
a. Compute the cost of the goodwill purchased by Munchies.
b. Explain how Munchies will account for goodwill in future years.
Answer:
$2500000
Explanation:
A
1. Goodwill = purchase consideration - market value of net assets of the company
Market value of net assets of the company =$10000000-$7100000
=$2900000
Therefore goodwill=$5400000-$2900000=
$2500000
2. Under GAAP and IFRS, goodwill is an intangible asset that has an indefinite useful life and not amortized like other depreciable assets
The following balance sheet for the Hubbard Corporation was prepared by the company:
HUBBARD CORPORATION
Balance Sheet
At December 31, 2016
Assets
Buildings $ 760,000
Land 280,000
Cash 70,000
Accounts receivable (net) 140,000
Inventories 260,000
Machinery 290,000
Patent (net) 110,000
Investment in marketable equity securities 80,000
Total assets $ 1,990,000
Liabilities and Shareholders' Equity
Accounts payable $ 225,000
Accumulated depreciation 265,000
Notes payable 520,000
Appreciation of inventories 90,000
Common stock, authorized and issued
110,000 shares of no par stock 440,000
Retained earnings 450,000
Total liabilities and shareholders' equity $ 1,990,000
Additional information:
1. The buildings, land, and machinery are all stated at cost except for a parcel of land that the company is holding for future sale. The land originally cost $51,000 but, due to a significant increase in market value, is listed at $122,000. The increase in the land account was credited to retained earnings.
2. The investment in equity securities account consists of stocks of other corporations and are recorded at cost, $21,000 of which will be sold in the coming year.
3. The remainder will be held indefinitely.Notes payable are all long term. However, a $110,000 note requires an installment payment of $27,500 due in the coming year.
4. Inventory is recorded at current resale value. The original cost of the inventory is $161,000.
Required:
Prepare a corrected classified balance sheet for the Hubbard Corporation at December 31, 2016. (Amounts to be deducted should be indicated by a minus sign.)
Answer:
Corrected Classified:
HUBBARD CORPORATION
Balance Sheet
At December 31, 2016
Assets
Current Assets:
Cash 70,000
Accounts receivable (net) 140,000
Inventories 170,000
Investment in marketable
equity securities 21,000
Total current assets $401,000
Land 280,000
Buildings 760,000
Accumulated depreciation -265,000 495,000
Machinery 290,000
Patent (net) 110,000
Investment in marketable
equity securities 59,000
Total long-term assets $1,234,000
Total assets $ 1,635,000
Liabilities and Shareholders' Equity :
Current liabilities:
Accounts payable $ 225,000
Short-term Notes payable 27,500
Total current liabilities $252,500
Long-term liabilities:
Notes payable $492,500
Total liabilities $745,000
Equity:
Common stock, authorized and issued
110,000 shares of no par stock 440,000
Retained earnings 379,000
Other comprehensive income 71,000 $890,000
Total liabilities and shareholders' equity $ 1,635,000
Explanation:
HUBBARD CORPORATION
Balance Sheet
At December 31, 2016
Assets
Buildings $ 760,000
Land 280,000
Cash 70,000
Accounts receivable (net) 140,000
Inventories 260,000
Machinery 290,000
Patent (net) 110,000
Investment in marketable
equity securities 80,000
Total assets $ 1,990,000
Liabilities and Shareholders' Equity
Accounts payable $ 225,000
Accumulated depreciation 265,000
Notes payable 520,000
Appreciation of inventories 90,000
Common stock, authorized and issued
110,000 shares of no par stock 440,000
Retained earnings 450,000
Total liabilities and shareholders' equity $ 1,990,000
1. Retained Earnings 450,000
Fair Value Gain: Land (71,000)
Balance 379,000
Other comprehensive income:
Fair Value Gain of Land 71,000
3. Short-term Investment 21,000
Long-term Investment 59,000
4. Notes payable 520,000
Short-term Notes payable (27,500)
Long-term Notes payable 492,500
5. Inventory 260,000
Appreciation of inventories (90,000 )
Inventory value 170,000
The City of Troy collects its annual property taxes late in its fiscal year. Consequently, each year it must finance part of its operating budget using tax anticipation notes. The notes are repaid upon collection of property taxes. On April 1, the city estimated that it will require $2,500,000 to finance governmental activities for the remainder of the fiscal year. On that date, it had $770,000 of cash on hand and $830,000 of current liabilities. Collections for the remainder of the year from revenues other than current property taxes and from delinquent property taxes, including interest and penalties, were estimated at $1,100,000.
Required:
Calculate the estimated amount of tax anticipation financing that will be required for the remainder of the current fiscal year. Assume that on April 2, the City of Troy borrowed the amount calculated in part a by signing tax anticipation notes bearing 6 percent per annum to a local bank. Record the issuance of the tax anticipation notes in the general journals of the General Fund and governmental activities at the government-wide level. By October 1, the city had collected a sufficient amount of current property taxes to rep
Answer:
A. $1,460,000
B. General Fund:
Dr Cash $1,460,000
Cr Tax Anticipation Notes Payable $1,460,000
Governmental Activities:
Dr Cash $1,460,000
Cr Tax Anticipation Note Payable $1,460,000
C. General Fund:
Dr Tax Anticipation Note Payable $1,460,000
Dr Expenditures $43,800
Cr Cash $1,503,800
Governmental Activities:
Dr. Tax Anticipation Note Payable $1,460,000
Dr Expenses-General Government $43,800
Cr Cash $1,503,800
Explanation:
A. Calculatation for the estimated amount of tax anticipation financing
Estimated Expenditures Requirements:
Budgeted Expenditure, remainder $2,500,000
Add Current Liabilities Payable $830,000
Total $3,330,000
Estimated Resources Available:
Cash on hand $770,000
Add Collection of budgeted revenues and delinquent property taxes $1,100,000
Total $1,870,000
Estimated Anticipation Note Financing $1,460,000
($3,330,000-$1,870,000)
Therefore the Estimated Anticipation Note Financing is $1,460,000
B. Preparation of the journal entry to record the issuance of the tax anticipation notes in the general journals
General Fund:
Dr Cash $1,460,000
Cr Tax Anticipation Notes Payable $1,460,000
( To record the insuance of tax anticipation note payable)
Governmental Activities:
Dr Cash $1,460,000
Cr Tax Anticipation Note Payable $1,460,000
C. Preparation of the general journals of the General Fund and governmental activities
General Fund:
Dr Tax Anticipation Note Payable $1,460,000
Dr Expenditures $43,800
(1,460,000*6%*6/12)
Cr Cash $1,503,800
(1,460,000+43,800)
Governmental Activities:
Dr. Tax Anticipation Note Payable $1,460,000
Dr Expenses-General Government $43,800
(1,460,000*6%*6/12)
Cr Cash $1,503,800
(1,460,000+43,800)
(Being the payment for tax and interest)
Prepare the adjusting journal entries for the following transactions. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
1. Supplies for office use were purchased during the year for $500, of which $100 remained on hand (unused) at year-end.
2. Interest of $250 on a note receivable was earned at year-end, although collection of the interest is not due until the following year.
3. At year-end, salaries and wages payable of $3,600 had not been recorded or paid.
4. At year-end, one-half of a $2,000 advertising project had been completed for a client, but nothing had been billed or collected.
5. Redeemed a gift card for $600 of services.
Answer:
S/N Account Titles and Explanation Debit Credit
a. Supplies Expenses $400
Supplies $400
(To record the adjusting entry for supplies on hand)
b. Interest receivable $250
Interest income $250
(To record the adjusting entry for interest income)
c. Wages expenses $3,600
Wages payable $3,600
(To record the adjusting entry for wage payable)
d. Accounting revenue $1,000
($2,000 * 1/2)
Advertising revenue $1,000
(To record the service of service revenue)
e. Unearned revenue $600
Service revenue $600
(To record the entry of service revenue)
Mrs. JK recently made a gift to her 19-year old daughter, Alison. Mrs. JK’s marginal income tax rate is 35 percent and Alison’s marginal income tax rate is 15 percent. In each of the following cases, compute the annual income tax savings resulting from the gift. (Keep in mind the assignment of income doctrine in deciding if there will be income tax savings.)
a. The gift consisted of a corporate bond paying $7,500 annual interest to its owner.
b. The gift consisted of the $7,500 interest payment on a corporate bond owned by Mrs. JK.
c. The gift consisted of rental property generating $8,300 of annual rental income to its owner.
d. The gift consisted of an $8,300 rent check written by the tenants who lease rental property owned by Mrs. JK.
Answer:
a. The gift consisted of a corporate bond paying $7,500 annual interest to its owner.
annual tax savings = interest income x (Mrs. JK's tax bracket - Allison's tax bracket) = $7,500 x (35% - 15%) = $1,500b. The gift consisted of the $7,500 interest payment on a corporate bond owned by Mrs. JK.
no tax savings since the bond is still owned by Mrs. JK, and income will be taxed at her marginal tax rate.c. The gift consisted of rental property generating $8,300 of annual rental income to its owner.
annual tax savings = $8,300 x (35% - 15%) = $1,660d. The gift consisted of an $8,300 rent check written by the tenants who lease rental property owned by Mrs. JK.
no tax savings since the rental property is still owned by Mrs. JK, and income will be taxed at her marginal tax rate.It is was that 5% product of a lot are defective, if 8 products are selected randomly, what is the probability of getting lessThan 3 defective products?
Answer:
QUIERES SER MI AMIGO?
ESQUE ANDO BURRIDO
Pearl Corporation bought Noodle Bowl Limited at the end of the fiscal year. While negotiating the purchase price, Pearl’s management team referred to the following three recent appraisals from independent valuation consultants.
Appraised Value Appraisal Method
Noodle Bowl brand name $50 million Cash flow model based on observed royalty rates
Noodle Bowl workforce $40 million Estimate of the replacement cost to recruit and train an equivalent workforce
Favorable lease agreements $20 million Cash flow model of the anticipated savings from Noodle Bowl's favorable (below market) $20 million contractually guaranteed rental rates for retail space
Required:
Which of the above intangibles is likely to be recorded as a distinct identiflable asset in Pearl Corporation's consolidated financia statement? Which is likely to be recorded as part of goodwill? Explain your reasoning.
Answer:
Identifiable Asset is the one which can be separated from the business and can be identified separately. The asset should have the capability to be disposed of individually. Favorable lease agreements are one such asset which qualifies these conditions. Thus, Favorable lease agreements should be recorded as a distinct asset in Pearl Corporation's consolidated financial statement.
Every such asset which cannot be identified separately should be recorded as goodwill. We cannot recognize Noodle Bowl workforce and Noodle Bowl brand name as a distinctive asset. Thus, they both should be recorded as a part of goodwill.
Your Task Revise the following sentences to emphasize the perspective of the audience and the "you" view.
We are taking the proactive step of issuing all our customers new chip-enabled credit cards to replace expired or lost cards and prevent increasingly costly payouts we have suffered from fraud. We take great pride in announcing our new schedule of low-cost, any-day flights to Hawaii. Our strict safety policy forbids us from renting power equipment to anyone who cannot demonstrate proficiency in its use. We're requesting that all employees complete the attached online survey by April 1 so that we may develop a master schedule for summer vacations more efficiently. Our social media engineers are excited to announce a new free app called Fan Boosters that we believe will get fans to share, like, and subscribe to your content. To save the expense of having team trainers set up your training classes in our limited office space, we suggest offering a customized class for your employees right in your own building. Because we take pride in our national policy of selling name brands at discount prices, we can allow store credit but we cannot give cash refunds on returned merchandise.
Answer:
Using the ''You'' view means that the audience is made the subject of the correspondence. This makes the message more effective as the audience will see it from their perspective.
You will issued a new chip-enabled credit cards to replace expired or lost cards and prevent increasingly costly pay-outs resulting from fraud.
With a new schedule of low-cost, any-day flights, you can now fly to Hawaii whenever you want.
Should you wish to rent power equipment, you must demonstrate your proficiency in its use.
Employees are requested to complete the attached online survey by April 1 to enable the development of master schedule to efficiently manage your summer vacations.
Your content can now be shared, liked and subscribed to via the new free app, Fan Boosters.
You can now save costs on the location of your training class by having a customized class for your employees right in your own building.
You can now only receive store credit for returned merchandise.
Each of the following statements is justified by a fundamental quality or an enhancing of quality accounting. Match the letter next to each statement corresponding to the quality involved.
A. Comparability D. Consistency
B. Understandability E. Relevance
C. Verifiable F. Faithful representation
1. A company uses the same accounting principles from year to year.
2. Information that is free from error.
3. Information presented in a clear and concise fashion.
4. Information that makes a difference in a decision.
5. Information accurately depicts what really happened.
Answer:
Explanation:
1. A company uses the same accounting principles from year to year.(CONSISTENCY)
2. Information that is free from error.(VERIFIABLE)
3. Information presented in a clear and concise fashion.(UNDERSTANDABILITY)
4. Information that makes a difference in a decision.(RELEVANCE)
5. Information accurately depicts what really happened.(FAITHFUL REPRESENTATION)
To have a standard financial statement in accounting , there's are some qualities that are needed to put into consideration such as fundamental qualities as well as Enhancing quality of accounting. fundamental qualities are needed to obtain relevancy and reliability in preparing accounting statement.Enhancing quality of accounting are also to have
Comparability,Consistency, Understandability, Relevance, Verifiable
as well as Faithful representation
Which term refers to the money you get to keep from your business activities once your expenses are paid?
Revenue
Funds
Profit
Dividends
The Esposito Import Company had 1 million shares of common stock outstanding during 2021. Its income statement reported the following items: income from continuing operations, $7 million; loss from discontinued operations, $1.4 million. All of these amounts are net of tax.
Required:
Prepare the 2021 EPS presentation for the Esposito Import Company.
Answer:
$5.60 million
Explanation:
Preparation of the 2021 EPS presentation for the Esposito Import Company.
Earnings per share :
Income from continuing operations $7.00 million
Less: Loss from discontinued operations ($1.40 million)
Net income $5.60 million
Therefore the 2021 EPS presentation for the Esposito Import Company will be $5.60 million
it is the list of material or ingredients for a project
Explanation:
okay thankyou and that was very helpful (please mark me brainliest)
This information relates to Sheffield Real Estate Agency.
Oct. 1 Stockholders invest $33,860 in exchange for common stock of the corporation.
2 Hires an administrative assistant at an annual salary of $31,320.
3 Buys office furniture for $3,850, on account.
6 Sells a house and lot for E. C. Roads; commissions due from Roads, $10,620 (not paid by Roads at this time).
10 Receives cash of $220 as commission for acting as rental agent renting an apartment.
27 Pays $790 on account for the office furniture purchased on October 3.
30 Pays the administrative assistant $2,610 in salary for October.
Required:
Prepare the debit-credit analysis for each transaction.
Answer:
cash 33,860 debit (+assests)
common stock 33,860 credit (+equity)
---
no entry required
--
furniture 3,850 debit (+assets)
account payable 3,850 credit (+liabilities)
---
accounts receivables 10,620 debit (+assets)
commissions revenues 10,620 credit (+revenue / +equity)
---
cash 220 debit (+assets)
commissions revenues 220 credit (+revenue / +equity)
---
Accounts Payable 790 debit (- liaiblities)
cash 790 credit (- assets)
---
Salaries expense 2,610 debit (+ expense / - equity)
cash 2,610 credit (-assets)
Explanation:
We do the journal entries following the accounting rules
debit = credit
and we usethe accoutnign equation analysis
Assets + Expenses = Liablities + Equity + Revenues
DEBIT CREDIT DEBIT CREDIT
+ + + - - - - - - + + +
The left side increase from debit and decrease from credit
while the element of the right side increase through credit and decrease by debit
The following are selected transactions of Blanco Company. Blanco prepares financial statements quarterly.
Jan. 2 Purchased merchandise on account from Nunez Company, $30,000, terms 2/10, n/30. (Blanco uses the perpetual inventory system.)
Feb. 1 Issued a 9%, 2-month, $30,000 note to Nunez in payment of account.
Mar. 31 Accrued interest for 2 months on Nunez note.
Apr. 1 Paid face value and interest on Nunez note.
July 1 Purchased equipment from Marson Equipment paying $11,000 in cash and signing a 10%, 3-month, $60,000 note.
Sept. 30 Accrued interest for 3 months on Marson note.
Oct. 1 Paid face value and interest on Marson note.
Dec. 1 Borrowed $24,000 from the Paola Bank by issuing a 3-month, 8% note with a face value of $24,000.
Dec. 31 Recognized interest expense for 1 month on Paola Bank note.
Required:
a. Prepare journal entries for the listed transactions and events.
b. Post to the accounts Notes Payable, Interest Payable, and Interest Expense.
c. Show the balance sheet presentation of notes and interest payable at December 31.
d. What is total interest expense for the year?
Answer:
Blanco Company
a. Journal Entries
Jan. 2:
Debit Inventory $30,000
Credit Accounts Payable (Nunez Company) $30,000
To record the purchase of merchandise, terms 2/10, n/30.
Feb 1:
Debit Accounts Payable (Nunez Company) $30,000
Credit Notes Payable (Nunez Company) $30,000
To record the issue of 9%, 2-month note in payment of account.
March 31:
Debit Interest Expense $450
Credit Interest Payable $450
To accrue 2 months interest expense.
Apr. 1:
Debit Notes Payable (Nunez Company) $30,000
Debit Interest Payable $450
Credit Cash Account $30,450
To record the payment on notes payable.
July 1:
Debit Equipment $71,000
Credit Cash $11,000
Credit Notes Payable $60,000
To record the purchase of equipment and signing a 10% , 3-month note.
Sept. 30:
Debit Interest Expense $1,500
Credit Interest Payable (Marson Equipment) $1,500
To accrue interest expense for 3 months.
Oct. 1:
Debit Notes Payable (Marson Equipment) $60,000
Debit Interest Payable (Marson Equipment) $1,500
Credit Cash Account $61,500
To record payment on account.
Dec. 1:
Debit Cash Account $24,000
Credit Notes Payable (Paola Bank) $24,000
To record the issue of a 3-month, 8% note.
Dec. 31
Debit Interest Expense $160
Credit Interest Payable $160
To accrue interest expense for one month.
b. General Ledger for Notes Payable, Interest Payable, and Interest Expense
Notes Payable
Date Accounts Title Debit Credit
Feb. 1 Accounts Payable (Nunez Company) $30,000
Apr. 1 Cash $30,000
July 1 Equipment $60,000
Oct. 1 Cash $60,000
Dec. 1 Cash $24,000
Interest Payable
Date Accounts Title Debit Credit
Mar. 31 Interest Expense $450
Apr. 1 Cash $450
Sept 30 Interest Expense $1,500
Oct. 1 Cash $1,500
Dec. 31 Interest Expense $160
Interest Expense
Date Accounts Title Debit Credit
Mar. 31 Interest Payable $450
Sept 30 Interest Payable $1,500
Dec. 31 Interest Payable $160
Dec. 31 Income Summary $2,110
c. Balance Sheet presentation of notes and interest payable at December 31:
Current Liabilities:
Notes Payable $24,000
Interest Payable $160
d. Total interest expense for the year:
= $2,110
Explanation:
In this case, Blanco Company uses adjusting entries to accrue expenses, especially interest expense with their corresponding payables.
Journal entries are the bookkeeping entries that are recorded to maintain the record of the transactions of the firm. It records all the debit and credit transactions of the company.
The Journal entries, ledger accounts, and the balance sheet has been attached below.
The total interest expense for the year is $2,110
To know more about the various financial statements, refer to the link below:
https://brainly.com/question/13795222
Exam Style Questions
TelCom owns a phone network and provides phone network services to many
consumers. The business does not manufacture phones and it does not own
retail stores selling them. Senior managers at TelCom are considering a takeover
of either a phone manufacturer or a chain of phone shops. TelCom employs
4000 workers and, last year, recorded total sales of $300 million. In contrast,
the largest manufacturer of mobile phones, PhonTec, has 450 workers and
recorded total sales last year of $1200 million.
a) What is meant by 'takeover'?
[2]
b) Identify two other ways a business might grow apart from takeovers. (2)
c) Identify and explain two reasons why external groups would be
interested in measuring the size of businesses such as TelCom.
[4]
d) Identify and explain two possible reasons why senior managers at
Telcom want to expand the business.
[6]
e) How should TelCom expand - taking over a phone manufacturer or a
chain of shops selling mobile phones? Justify your answer.
[6]
Answer:
a) What is meant by 'takeover'?
In this context, a takeover means vertical integration, either backwards (buying a supplier, in this case, the phone manufacturer), or forwards (buying a distributor, in this case, the retail store).
b) Identify two other ways a business might grow apart from takeovers.
Businesses can grow by internal expansion: by pouring their own resources into a new business division, a new product, a new sector, and so on.
Businesses can also grow by forming strategic alliances with other companies.
c) Identify and explain two reasons why external groups would be interested in measuring the size of businesses such as TelCom.
Investors, as an external group, are interested in measuring the size of the business in order to determine is value, and decide if investing in the business is a good decision or not.
The government, as an external group, is interested in measuring the size of the business simply to determine how many taxes to impose on it.
d) Identify and explain two possible reasons why senior managers at
Telcom want to expand the business.
They may want to expand the business because they want to increase profits, and larger companies almost always have larger profits than smaller ones.
They also may want to expand the business in order to meet some other corporate strategy goal, like reducing costs, or achieving a specific amount of sales.
e) How should TelCom expand - taking over a phone manufacturer or a
chain of shops selling mobile phones? Justify your answer.
They should do what is most profitable. Apparently, the retail business is less profitable than the mobile manufacturing business, so under this scenario, TelCom should integrate backwards, and buy the manufacturer.
Barnes Corporation expected to sell 150,000 board games during the month of November, and the company’s master budget contained the following data related to the sale and production of these games:_______.Revenue $2,400,000Cost of goods sold:Direct materials $675,000Direct labor $300,000Variable Overhead $450,000Contribution Margin $975,000Fixed overhead $250,000Fixed selling and administration $500,000Operating income $225,000Actual sales during November were 180,000 games. Using a flexible budget, the company expects the operating income for the month of November to be:_____.A) $225,000B) $270,000C) $420,000D) $510,000
Answer:
C) $420,000
Explanation:
Barnes Corporation
Master budget Flexible budget
150,000 games 180,000 games
Revenue $2,400,000 $2,880,000
Cost of goods sold:
Direct materials $675,000 $810,000
Direct labor $300,000 $360,000
Variable Overhead $450,000 $540,000
Contribution Margin $975,000 $ 1170,000
Fixed overhead $250,000 $ 250,000
Fixed selling and administration $500,000 $500,000
Operating income $225,000 $420,000
We calculate each term by dividing the cost by 150,000 units and multiplying the unit cost with the actual units 180,000. It is assumed that the fixed costs remain constant for the range of units from 150,000 - 200,000.
This gives an operating income of $ 420,000
The assembly division of , Inc. uses the weighted-average method of process costing. Consider the following data for the month of May : LOADING...(Click the icon to view the data.) Requirement Compute equivalent units for direct materials and conversion costs. Show physical units in the first column of your schedule. Enter the physical units first, then calculate the equivalent units. Physical Flow of Production Units Work in process beginning 90 Started during current period 515 To account for 605 Completed and transferred out during current period 465 Work in process, ending 140 Accounted for 605 Equivalent units of work done to date Equivalent Units Direct Conversion Materials Costs
Answer:
Equivalent units of work done to date
a. Direct Conversion = 556 unit
b. Materials Costs = 514 unit
Explanation:
Note: Attached is the full question for better understanding
Equivalent units
Physical Direct Conversion
units materials costs
Work in Process beginning 90
Started during current period 515
To account for 605
Completed and transferred 465 465 465
out during current period
Work in Process,ending 140 91 49
Accounted for 605
Equivalent units of work done to date 556 514
Workings
Work in Process,ending:
Direct materials = 140*65% = 91
Conversion costs = 140*35% = 49