On January 1, 2021, Madison Products issued $40 million of 6%, 10-year convertible bonds at a net price of $40.8 million. Madison recently issued similar, but nonconvertible, bonds at 99 (that is, 99% of face amount). The bonds pay interest on June 30 and December 31. Each $1,000 bond is convertible into 30 shares of Madison’s no par common stock. Madison records interest by the straight-line method. On June 1, 2023, Madison notified bondholders of its intent to call the bonds at face value plus a 1% call premium on July 1, 2023. By June 30, all bondholders had chosen to convert their bonds into shares as of the interest payment date. On June 30, Madison paid the semiannual interest and issued the requisite number of shares for the bonds being converted.
Required:
1. & 2. Prepare the journal entries for the issuance of the bonds by Madison and interest payment for June 30, 2021.
3. Prepare the journal entries for the June 30, 2023, interest payment by Madison and the conversion of the bonds (book value method).

Answer:

1.  Date       General Journal                               Debit           Credit

Jan 1            Cash                                               $40,800,000

                          Convertible bond payable                         $40,000,000  

                           Premium on bond payable                        $800,000

Jun 30 2021  Interest expenses                        $1,160,000

                      Premium on bond payable          $40,000

                      (800,000/10 * 1/2)

                             Cash                                                            $1,200,000

                             (40,000,000 * 6% * 1/2)

2.  Date       General Journal                             Debit          Credit

June 30      Interest Expenses                        $1,160,000

2023           Premium on bond payable         $40,000

                          Cash                                                             $1,200,000

                           ($40,000,000 *6%*1/2)

June 30       Convertible bonds payable         $40,000,000

2023            Premium on bond payable           $600,000

                     ($800,000 - ($40,000*5)

                           Common stock                                            $40,600,000

Ajax Beverages holds 40% of the stock of Bubbly Bottler, acquired at a cost equal to 40% of Bubbly's book value at the time of purchase. This is a significant influence investment. At the start of 2021, Ajax reports the investment at a balance of $100,000. In 2021, Bubbly reports net income of $1,000 and $50 in other comprehensive income. Bubbly pays no dividends in 2021. The market value of Ajax's investment in Bubbly stock increases by $500 during 2021.


At what amount does Ajax report the investment at the end of 2021?

a. $100,500
b. $100,420
c. $100,400
d. $100,450

Morgan (age 45) is single and provides more than 50% of the support of Tammy (a family friend), Jen (a niece, age 18), and Jerold (a nephew, age 18). Both Tammy and Jen live with Morgan, but Jerold (a French citizen) lives in Canada. Morgan earns a salary of $95,000, contributes $5,000 to a traditional IRA, and receives sales proceeds of $15,000 for an RV that cost $60,000 and was used for vacations. She has $8,200 in itemized deductions.
A. Morgan's taxable income is $____.
B. Using the Tax Rate Schedules (click here), tax liability for Morgan is $____for 2019.
C. Compute Morgan's dependent tax credit.

Suppose the government imposes a tax of 10 percent on the first $20,000 of income, 20 percent on the next 40,000 of income and 30 percent on income above $60,000. For a person whose income is $90,000, the tax liability is _________ and the marginal tax rate is __________.

Plastic Company purchased 100 percent of Spoon Company's voting common stock for $666,000 on January 1, 20X4. At that date, Spoon reported assets of $697,000 and liabilities of $241,000. The book values and fair values of Spoon's assets were equal except for land, which had a fair value $116,000 more than book value, and equipment, which had a fair value $94,000 more than book value. The remaining economic life of all depreciable assets at January 1, 20X4, was ten years. Spoon reported net income of $78,000 and paid dividends of $53,000 in 20X4.
Required:
Compute the amount of investment income to be reported by Plastic using the equity method for 20X4.

For each separate case below, follow the 3-step process for adjusting the accured expense account: Step 1: Determine what the current account balance equal. Step 2: Determine what the current account balance should equal. Step 3: Record adjusting journal entries for each of the following for year ended December 31. Assume no other adjusting entries are made during the year.
A. Salaries Payable. At year-end, salaries expense of $15,500 has been incurred by the company, but is not yet paid to employees.
B. Interest Payable. At its December 31 year-end, the company owes $250 of interest on a line-of-credit loan. That interest will not be paid until sometime in January of the next year.
C. Interest Payable. At its December 31 year-end, the company holds a mortgage payable that has incurred $875 in annual interest that is neither recorded nor paid. The company intends to pay the interest on January 7 of the next year.

Renata and Danuta would like to form a business providing take-out meals to homebound destitute residents of Las Vegas. The meals would be ordered from a menu provided by their company and prepared and delivered by Renata and Danuta. They hope to eventually have their business become international in scope. They will need to raise $100,000 to get their business running and will eventually have much greater capital needs. From the following choices, select the best form of business Renata and Danuta could adopt?
A. Nonprofit corporationB. Limited-liability companyC. SyndicateD. Joint venture

Assume the market for wine is functioning at its equilibrium. For each of the following situations, say whether the new market outcome will be efficient or inefficient.
a. A new report shows that wine is good for heart health. Efficient
b. The government sets a minimum price for wine, which increases the current price. Inefficient
c. An unexpected late frost ruins large crops of grapes. Inefficient
d. Grape pickers demand higher wages, increasing the price of wine.

Financial Statements of a Manufacturing Firm The following events took place for Rushmore Biking Inc. during February, the first month of operations as a producer of road bikes:
• Purchased $605,700 of materials.
• Used $520,900 of direct materials in production.
• Incurred $448,000 of direct labor wages.
• Applied factory overhead at a rate of 80% of direct labor cost.
• Transferred $1,274,200 of work in process to finished goods.
• Sold goods with a cost of $1,211,400.
• Revenues earned by selling bikes, $2,168,400.
• Incurred $520,900 of selling expenses.
• Incurred $193,800 of administrative expenses.
a. Prepare the income statement for Rushmore Biking Inc. for the month ending February 28. Assume that Rushmore Biking Inc. uses the perpetual inventory method.
Rushmore Biking Inc.
Income Statement
For the Month Ended February 28
Selling and administrative expenses:
Total selling and administrative expenses
b. Determine the inventory balances on February 28, the end of the first month of operations,
Materials inventory, February 28
Work in process inventory, February 28
Finished goods inventory, February 28
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Which term refers to the money you get to keep from your business activities once your expenses are paid?

Revenue

Funds

Profit

Dividends

Cortina Company accumulates the following adjustment data at December 31. Indicate (1) the type of adjustment (prepaid expense, accrued revenue, and so on) and (2) the status of the accounts before adjustment (overstated or understated). (Enter your answers in alphabetical order.) Item (1) Type of Adjustment (2) Accounts Before Adjustment a. Supplies of $400 are on hand. Supplies account shows $1,600 balance. select the type of adjustment select the status of the accounts before adjustment select the status of the accounts before adjustment b. Services performed but unbilled total $700. select the type of adjustment select the status of the accounts before adjustment select the status of the accounts before adjustment c. Interest of $300 has accumulated on a note payable. select the type of adjustment select the status of the accounts before adjustment select the status of the accounts before adjustment d. Rent collected in advance totaling $1,100 has been earned.

The following questions practice these skills:
 Draw a linear production possibilities frontier.
 Draw a bowed production possibilities frontier.
 Compute opportunity costs from a production possibilities frontier.
 Identify feasible and infeasible and efficient and inefficient points from a production possibilities frontier.
 Identify comparative and absolute advantage from a production possibilities frontier.
 Describe trade based on comparative advantage.
 Identify positive and normative statements.
Two important industries on the island of Bermuda are fishing and tourism. According to data from the World Resources Institute and the Bermuda Department of Statistics, in the year 2000 the 307 registered fishermen in Bermuda caught 286 metric tons of marine fish. And the 3,409 people employed by hotels produced 538,000 hotel stays (measured by the number of visitor arrivals). Suppose that this production point is efficient in production. Assume also that the opportunity cost of one additional metric ton of fish is 2,000 hotel stays and that this opportunity cost is constant (the opportunity cost does not change).
a. If all 307 registered fishermen were to be employed by hotels (in addition to the 3,409 people already working in hotels), how many hotel stays could Bermuda produce?
b. If all 3,409 hotel employees were to become fishermen (in addition to the 307 fishermen already working in the fishing industry), how many metric tons of fish could Bermuda produce?
c. Draw a production possibility frontier for Bermuda, with fish on the horizontal axis and hotel stays on the vcrtical axis, and label Bermuda’s actual production point for the year 2000.

Broomhilda manufactures broomsticks for her fellow witch (and wizard) friends. Broomhilda uses a job order cost system and applies overhead to production on the basis of direct labor cost. On September 1, Job 50 (a super deluxe broom complete with a separate sleep space and shower area as well as an espresso machine) was the only job in process. The costs incurred prior to September on this job were as follows: direct materials $20,000, direct labor $12,000, and manufacturing overhead $16,000. As of September 1, Job 49 (a broom shaped like a cat with some extra cargo space for all the cats) had been completed at a cost of $90,000 and was part of finished goods inventory. There was a $15,000 balance in the Raw Materials Inventory account. During the month of September, Broomhilda began production on Jobs 51 and 52, and completed Jobs 50 and 51. Jobs 49 and 50 were also sold on account during the month for $122,000 and $158,000, respectively. The following additional events occurred during the month.

1. Purchased additional raw materials of $90,000 on account.
2. Incurred manufacturing overhead costs as follows: indirect materials $17,000 (including broom polish and specially crafted scissors to trim stray twigs), indirect labor $20,000 (Hansel and Gretel clean the shop and run errands for the elves), depreciation expense on equipment $12,000 (Broomhilda has multiple molding stations for each broom she creates), and various other manufacturing overhead costs on account $16,000.
3. Assigned direct materials and direct labor to jobs as follows:

Job no. Direct Materials Direct Labor
50 10,000 5,000
51 39,000 25,000
52 30,000 20,000


Required:
a. Calculate the predetermined overhead rate for September, assuming Broomhilda estimates total manufacturing overhead costs of $840,000 and direct labor costs of $700,000 for September.
b. Open job cost sheets for Jobs 50, 51, and 52. Enter the September 1 balances on the job cost sheet for Job 50.
c. Prepare the journal entries to record the purchase of raw materials, and the manufacturing overhead costs incurred during the month of March.
d. Prepare the summary journal entries to record the assignment of direct materials, direct labor, and manufacturing overhead costs to production. In assigning overhead costs, use the overhead rate calculated in (1). Post all costs to the job cost sheets as necessary.
e. Total the job cost sheets for any job(s) completed during the month. Prepare the journal entry (or entries) to record the completion of any job(s) during the month.
f. Prepare the journal entry (or entries) to record the sale of any job(s) during the month.
g. What is the balance in the Finished Goods Inventory account at the end of the month? What job(s) does this balance consist of? 8. What is the amount of over- or underapplied overhead? Prepare the journal entry to close this to Cost of Goods Sold

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.

Bank's Balance Sheet
Assets Liabilities and Owners' Equity
Reserves $175 Deposits $1,400
Loans $700 Debt $225
Securities $875 Capital (owners' equity) $125
Suppose the owners of the bank contribute an additional $200 from their own funds and use it to buy securities in the name of the bank. This would increase the securities account andincrease thedebt account. This would also bring the leverage ratio from its initial value of14.00 to a new value of . Which of the following do bankers take into account when determining how to allocate their assets?
A. The return on each asset
B. The total value of liabilities
C. The size of the monetary base

Cook Co. reports the following information for the current year:
Saper Sandpaper $ 17,000
Direct labor 680,000
Small tools 100,000
Materials inventory, Jan 1 120,000
Materials inventory, Dec 31 86,000
Materials purchased 980,000
Machine helpers’ salaries 86,000
Finished Goods, Jan 1 210,000
Finished Goods, Dec 31 400,000
Sales 4,000,000
Leasing costs, plant 120,000
Work-in-process, Jan 1 30,000
Work-in-process, Dec 31 20,000
Depreciation, plant 70,000
Sales Commissions 200,000
Property taxes, plant 10,000
Insurance, factory equipment 5,000
Sales salaries 180,000
Advertising costs 150,000
Office administration costs 250,000
Units completed 82,000
Compute the Net Income (loss) assuming that Cook Co. is in the 30% tax bracket?
a) $1,454,600
b) $1,431,000
c) $1,298,000
d) $908,600

An economy that has government collecting taxes and making regulations is called a

One approach to understanding corruption perceptions is to compare information across a variety of countries. Your company has had operations in South America for some time. However, there has not been an internal evaluation of perceived regional corruption to date. Therefore, you have been asked to provide insight on this topic for each country in South America. Based on an annual corruption perceptions index, develop a brief report and recommendations for the entire company.

Prepare the Unadjusted Trial Balance Prepare the Unadjusted Trial Balance for Smart Touch Learning for December 31st. Check your spelling carefully and do not abbreviate. Enter the account names exactly as provided in the Chart of Accounts. Enter the accounts in the order of Assets, Liabilities, Equity, Revenues, and Expenses. ACCOUNT Accounts Receivable 800 Cash 41,140 Common Stock 36,400 Dividends 4,700 Furniture 13,900 Office Supplies 580 Prepaid Insurance 1,800 Rent Expense 2,300 Salaries Expense 2,900 Service Revenue 27,800 Unearned Revenue 4,200 Utilities Expense 280

For journal entries, indicate the letter of the explanation that most closely describes it in the space beside each entry. You can use letters more than once.

To record receipt of unearned revenue.
To record this period's earning of prior unearned revenue.
To record payment of an accrued expense.
To record receipt of an accrued revenue.
To record an accrued expense.
To record an accrued revenue.
To record this period's use of a prepaid expense.
To record payment of a prepaid expense.
To record this period's depreciation expense.

Explanation Journal entries Debit Credit
Insurance expense 1900
Prepaid Insurance 1900

Salaries payable 3900
Cash 3900

Prepaid Rent 3200
Cash 3200

Salaries expense 4900
Salaries payable 4900

Interest Receivable 1900
Interest Revenue 1900

Cash 3900
Accounts Receivable 3900

Cash 5900
Unearned Professional Fees 5900

A retail store manager instructed two new sales associates to greet customers quickly when they enter the store.On the first day the sales associates are working on the selling floor,one sales associate greets customers immediately after they enter the store,while the other associate greets customers after they have looked around for a minute or two.Which of the following risks incurred by describing services in words alone has led to the sales associates greeting customers at different time intervals?
A) Overcautious
B) Ostentation
C) Objectivity
D) Biased interpretation
E) Transformation

3 sentences on why you would want to be a plumber

Rockeagle Corporation began fiscal Year 2 with the following balances in its inventory accounts.
Raw Materials $30,000
Work in Process 45,000
Finished Goods 14,000
During the accounting period, Rockeagle purchased $125,000 of raw materials and issued $124,000 of materials to the production department. Direct labor costs for the period amounted to $162,000, and manufacturing overhead of $24,000 was applied to Work in Process Inventory. Assume that there was no over- or underapplied overhead. Goods costing $306,000 to produce were completed and transferred to Finished Goods Inventory. Goods costing $301,000 were sold for $400,000 during the period. Selling and administrative expenses amounted to $36,000. Required:
1. Determine the ending balance of each of the three inventory accounts that would appear on the year-end balance sheet.
2. Prepare a schedule of cost of goods manufactured and sold and an income statement.
ROCKEAGLE CORPORATION
Schedule of cost of goods manufactured and sold
For the year ended 2018
Beginning raw materials inventory
Purchases
Raw materials available 0
Ending raw materials inventory
Raw materials used 0
Labor
Manufacturing overhead
Total manufacturing costs 0
Beginning work in process inventory
Total work in process inventory 0
Ending work in process inventory
Cost of goods manufactured 0
Beginning finished goods inventory
Goods available for sale 0
Ending finished goods inventory
Cost of goods sold $0

An assisted-living facility provides services in the form of residential space, meals, and other occupant assistance (OOA) to its occupants. The facility currently uses a traditional cost accounting system that charges each occupant a daily rate equal to the facility’s annual cost of providing residential space, meals, and OOA divided by total occupant days. However, an activity-based costing (ABC) analysis has revealed that occupants’ use of OOA varies substantially. This analysis determined that occupants could be grouped into three categories (low, moderate, and high usage of OOA) and that the activity driver of OOA should be nursing hours. The driver of the residential space and meals is occupant days. The following quantitative information was also provided: Annual Annual Occupant Category Occupant Days Nursing Hours Low usage 36,000 90,000 Medium usage 18,000 90,000 High usage 6,000 120,000 60,000 300,000 The total annual cost of OOA was $7.5 million, and the total annual cost of providing residential space and meals was $7.2 million. Accordingly, the ABC analysis indicates that the daily costing rate for providing residential space, meals, and OOA should be:__________

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.

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?

Recording sales, returns, and discounts taken LO P2
Prepare journal entries to record each of the following sales transactions of a merchandising company. The company uses a perpetual inventory system and the gross method.
Apr. 1 Sold merchandise for $3,800, with credit terms n/30; invoice dated April 1. The cost of the merchandise is $2,280.
Apr. 4 The customer in the April 1 sale returned $460 of merchandise for full credit. The merchandise, which had cost $276, is returned to inventory.
Apr. 8 Sold merchandise for $1,400, with credit terms of 1/10, n/30; invoice dated April 8. Cost of the merchandise is $980.
Apr. 11 Received payment for the amount due from the April 1 sale less the return on April 4.

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

Suppose someone offered to sell you a note calling for the payment of $1,000 15 months from today. They offer to sell it to you for $850. You have $850 in a bank time deposit which pays a 7% effective annual interest rate (compounding), and you plan to leave the money in the bank unless you buy the note. The note is not risky--you are sure it will be paid on schedule. Should you buy the note?

Check the decision in three ways:

a. By comparing your future value if you buy the note versus leaving your money in the bank.
b. By comparing the PV of the note with your current bank account.
c. By comparing the EFF% on the note with that of the bank account.

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.

become aware of the various institutions depa and center present within the school environment or the immediate community ​