Holden Company issued the following bonds: Issue date – January 1, 2015. Maturity date – January 1, 2020. Par value – $100,000.
Market interest rate at time of issue – 10% annually. Stated interest rate – 9%. Issue price – $96,149. Interest paid – 4.5% semiannually, first on July 1, 2015.
Assume Dec. 31 is the fiscal year-end.
a. Prepare the journal entry to record the issuance of the bonds on Jan. 1, 2015.
b. Prepare the journal entries to record the interest expenses on July 1, 2015, and Dec. 31, 2015.
c. Prepare the journal entry to record the interest payment on Jan. 1, 2016.
In: Accounting
DigitalWave startups had a maximum pie of the private equity and venture capital (PE/VC) funding last year. Discuss how arranging venture capital from the venture capitalist differs from Equity financing.
Plz answer in more than 500 words if possible.
In: Accounting
Munoz Manufacturing Corporation was started with the issuance of common stock for $70,000. It purchased $7,900 of raw materials and worked on three job orders during 2019 for which data follow. (Assume that all transactions are for cash unless otherwise indicated.)
| Direct Raw Materials Used | Direct Labor | |||||||
| Job 1 | $ | 1,200 | $ | 2,100 | ||||
| Job 2 | 2,200 | 3,900 | ||||||
| Job 3 | 3,400 | 2,100 | ||||||
| Total | $ | 6,800 | $ | 8,100 | ||||
Factory overhead is applied using a predetermined overhead rate of $0.60 per direct labor dollar. Jobs 2 and 3 were completed during the period and Job 3 was sold for $11,160 cash. Munoz paid $400 for selling and administrative expenses. Actual factory overhead was $5,160.
Required
Record the preceding events in a horizontal statements model. The first event for 2019 has been recorded as an example.
Reconcile all subsidiary accounts with their respective control accounts.
Record the closing entry for over- or underapplied manufacturing overhead in the horizontal statements model, assuming that the amount is insignificant.
Prepare a schedule of cost of goods manufactured and sold, an income statement, and a balance sheet for 2019.
In: Accounting
34) During the current year, LaVone recognizes a $30,000 Sec. 1231 gain on sale of land and a $18,000 Sec. 1231 loss on the sale of land. Prior to this, LaVone's only Sec. 1231 item was a $14,000 loss six years ago. LaVone must report a
A) $12,000 net LTCG.
B) $12,000 ordinary income.
C) $14,000 ordinary income.
D) $10,000 ordinary income and $2,000 net LTCG.
35) Sec. 1231 property will generally have all the following characteristics except
A) real or depreciable property.
B) used in trade or business.
C) held for sale to customers.
D) held for more than one year.
36) During the current year, Hugo sells equipment for $150,000. The equipment cost $175,000 when placed in service two years ago, and $55,000 of depreciation deductions were allowed. The results of the sale are
A) LTCG of $30,000.
B) Sec. 1231 gain of $30,000.
C) Sec. 1245 ordinary income $30,000.
D) Sec. 1250 ordinary income of $30,000.
In: Accounting
The Polaris Company uses a job-order costing system. The following transactions occurred in October:
a.Raw materials purchased on account, $209,000.
b.Raw materials used in production, $192,000 ($153,000 direct materials and $38,400 indirect materials).
c.Accrued direct labor cost of $49,000 and indirect labor cost of $20,000
d.Depreciation recorded on factory equipment, $105,000.
e.Other manufacturing overhead costs accrued during October, $130,000.
f.The company applies manufacturing overhead cost to production using a predetermined rate of $9 per machine-hour. A total of 76,400 machine-hours were used in October.
g.Jobs costing $513,000 according to their job cost sheets were completed during October and transferred to Finished Goods.
h.Jobs that had cost $449,000 to complete according to their job cost sheets were shipped to customers during the month. These jobs were sold on account at 32% above cost.
Required SHOW ALL WORK:
1.Prepare journal entries to record the transactions given above.
2.Prepare T-accounts for Manufacturing Overhead and Work in Process. Post the relevant transactions from above to each account. Compute the ending balance in each account, assuming that Work in Process has a beginning balance of $36,000.
In: Accounting
25. In accounting for research and experimental expenditures incurred in 2018, all of the following alternatives are available with the exception of
A) expense R&E costs in the year in which a product or process becomes marketable.
B) expense R&E costs in the year paid or incurred.
C) defer and amortize R&E costs as a ratable deduction over a period of 60 months or more.
D) capitalize and write off R&E costs only when the research project is abandoned or is worthless.
26. Green Corporation purchases specialty software from a software development firm for use in its business as of January 1 of the current year at a cost of $90,000. No hardware was acquired. How much of the cost can Green deduct this year?
A) $30,000
B) $45,000
C) $60,000
D) $90,000
27. In calculating depletion of natural resources each period,
A) cost depletion must be used.
B) percentage depletion must be used.
C) the smaller of cost depletion or percentage depletion must be used.
D) the greater of cost depletion or percentage depletion must be used.
In: Accounting
Petro Motors Inc. (PMI) produces small gasoline-powered motors
for use in lawn mowers. The company has been growing steadily over
the past five years and is operating at full capacity. PMI recently
completed the addition of new plant and equipment at a cost of
$7,800,000, thereby increasing its manufacturing capacity to
100,000 motors annually. The addition to plant and equipment will
be depreciated on a straight-line basis over 10 years.
Sales of motors were 60,000 units prior to the completion of the
additional capacity. Cost records indicated that manufacturing
costs had totaled $60 per motor, of which $48 per motor was
considered to be variable manufacturing costs. PMI has used the
volume of activity at full capacity as the basis for applying fixed
manufacturing overhead. The normal selling price is $80 per motor,
and PMI pays a 5% commission on the sale of its motors.
LawnPro.com offered to purchase 35,000 motors at a price of $60 per
unit to test the viability of distributing lawn mower replacement
motors through its website. PMI would be expected to produce the
motors, store them in its warehouse, and ship individual motors to
LawnPro.com customers. As orders are placed directly through the
LawnPro.com website, they would be forwarded instantly to PMI. No
commissions will be paid on this special sales order, and freight
charges will be paid by the customer purchasing a motor.
A. Calculate the cost per motor, for cost accounting purposes, after completion of the additional plant capacity.
B. Should the offer from LawnPro.com be accepted?
C. If relevant cost analysis was not considered, is it likely that a correct special order analysis would have been made?
In: Accounting
The Company uses a single department production process.
Materials are added at the start of the production process and
labor and overhead are added as indicated. For January 2018, the
Company records have the following information:
UNITS:
Beginning
WIP:
10,000 units
100% complete for materials, 50% complete for labor; 3% complete for overhead
Units started in process 50,000 units
Units completed 49,000 units
Ending WIP: 11,000 units
100% complete for materials, 60% complete for labor; 20% complete for overhead
PRODUCTION COSTS:
Work in Process, Beginning of the Month:
Materials
$ 22,000
Labor
18,000
Overhead
11,000
51,000
Current Month Costs:
Materials
$ 320,000
Labor
180,160
Overhead
152,840
653,000
Total Costs:
$ 704,000
Prepare a Cost of Production Summary using the FiFO method (calculations for equivalent units of production, cost per equivalent unit of production, total cost for units completed and WIP, ending). Prepare your calculations for Materials, Labor, and Overhead separately. Prepare the appropriate journal entries at month end.
In: Accounting
1) On January 1, Year 1, Shaq Co. acquired 100% of the outstanding common stock of O’Neal Co. As part of the total consideration transferred, Shaq promised to the shareholders of O’Neal to issue on May 1, Year 2, additional 1,000 shares of common stock if the total consolidated net income for Year 1 is greater than $1Billion. The consolidated net income in Year 1 was $1.2 Billion.
The controller of Shaq Co. took the ACCY 410 class at the UIUC and remembers that this contingent consideration must be classified as equity (i.e., APIC) in the consolidated financial statements. However, the controller did not always come prepared to the class and does not remember whether this contingent consideration should be remeasured on 12/31/Year 1 or not.
Research and cite a specific paragraph in the Accounting Standard Codification that can help the controller to determine whether this contingent consideration should be remeasured at the year-end, or not. Unless specifically requested, your response should not cite implementation guidance and illustrations.
FASB ASC - - -
In: Accounting
Highridge Homes has the following payroll information for the week ended February 21:
| Name | Earnings at End of Previous Week | Daily Time | Pay Rate | Federal Income Tax | ||||||
| S | M | T | W | T | F | S | ||||
| Arthur, P. | 7,800.00 | 8 | 8 | 8 | 8 | 8 | 45.00 | 226.78 | ||
| Bills, D. | 2,060.00 | 8 | 8 | 8 | 8 | 8 | 12.50 | 26.00 | ||
| Carney, W. | 2,085.00 | 8 | 8 | 8 | 8 | 8 | 12.95 | 27.00 | ||
| Dorn, J. | 748.00 | 8 | 8 | 22.00 | 11.00 | |||||
| Edgar, L. | 2,687.00 | 8 | 8 | 8 | 8 | 8 | 15.00 | 37.00 | ||
| Fitzwilson, G. | 4,150.00 | 8 | 8 | 8 | 8 | 8 | 8 | 23.00 | 125.00 | |
Taxable earnings for Social Security are based on the first $118,500. Taxable earnings for Medicare are based on all earnings. Taxable earnings for federal and state unemployment are based on the first $7,000. Employees are paid time-and-a-half for work in excess of 40 hours per week.
Required:
1. Complete the payroll register. The Social Security tax rate is 6.2 percent, and the Medicare tax rate is 1.45 percent. Begin payroll checks with No. 2080. If required, round your intermediate calculations and the final answers to the nearest cent and use the rounded answers in subsequent computations. If an amount is zero, enter "0".
| HIGHRIDGE HOMES | |||||||||||||||
| PAYROLL REGISTER FOR WEEK ENDED February 21, 20-- | |||||||||||||||
NAME |
TOTAL HOURS |
BEGINNING CUMULATIVE EARNINGS |
EARNINGS | ENDING CUMULATIVE EARNINGS |
TAXABLE EARNINGS | DEDUCTIONS | PAYMENTS | ||||||||
REGULAR |
OVERTIME |
TOTAL |
UNEMPLOYMENT |
SOCIAL SECURITY |
MEDICARE |
FEDERAL INCOME TAX |
SOCIAL SECURITY TAX |
MEDICARE TAX |
TOTAL |
NET AMOUNT |
CK. NO. |
||||
| Arthur, P. | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||
| Bills, D. | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||
| Carney, W. | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||
| Dorn, J. | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||
| Edgar, L. | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||
| Fitzwilson, G. | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||
| $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | |||
Feedback
The payroll register consists of beginning and ending cumulative earnings, Current earnings, Taxable earnings, and deductions bringing you to the Net Pay amount. Be sure and watch for the maximum amounts on Social Security Taxable income and also Unemployment Taxable income. An example of a payroll register is in your textbook.
2. Prepare a general journal entry to record the payroll. The firm's general ledger contains a Wages Expense account and a Wages Payable account. Then assuming that the firm has transferred funds from its regular bank account to its special payroll bank account and that this entry has been made, prepare a general journal entry to record the payment of wages. When necessary, round your intermediate calculations and the final answers to the nearest cent. If an amount box does not require an entry, leave it blank.
| GENERAL JOURNAL | PAGE | ||||
|---|---|---|---|---|---|
| DATE | DESCRIPTION | POST. REF. | DEBIT | CREDIT | |
| 20-- | |||||
| Feb. 21 | Wages Expense | ||||
| Employees' Federal Income Tax Payable | |||||
| FICA Social Security Tax Payable | |||||
| FICA Medicare Tax Payable | |||||
| Wages Payable | |||||
| Payroll register for week ended February 21. | |||||
| Feb. 21 | Wages Payable | ||||
| Cash—Payroll Bank Account | |||||
| Paid wages for week ended February 21. | |||||
In: Accounting
Decision on Accepting Additional Business
Brightstone Tire and Rubber Company has capacity to produce 136,000 tires. Brightstone presently produces and sells 104,000 tires for the North American market at a price of $99 per tire. Brightstone is evaluating a special order from a European automobile company, Euro Motors. Euro is offering to buy 16,000 tires for $79.15 per tire. Brightstone's accounting system indicates that the total cost per tire is as follows:
| Direct materials | $38 |
| Direct labor | 14 |
| Factory overhead (60% variable) | 23 |
| Selling and administrative expenses (30% variable) | 20 |
| Total | $95 |
Brightstone pays a selling commission equal to 5% of the selling price on North American orders, which is included in the variable portion of the selling and administrative expenses. However, this special order would not have a sales commission. If the order was accepted, the tires would be shipped overseas for an additional shipping cost of $5 per tire. In addition, Euro has made the order conditional on receiving European safety certification. Brightstone estimates that this certification would cost $83,200.
a. Prepare a differential analysis dated January 21 on whether to reject (Alternative 1) or accept (Alternative 2) the special order from Euro Motors. If an amount is zero, enter zero "0". If required, round interim calculations to two decimal places.
| Differential Analysis | |||
| Reject Order (Alt. 1) or Accept Order (Alt. 2) | |||
| January 21 | |||
| Reject Order (Alternative 1) |
Accept Order (Alternative 2) |
Differential Effect on Income (Alternative 2) |
|
| Revenues | $ | $ | $ |
| Costs: | |||
| Direct materials | |||
| Direct labor | |||
| Variable factory overhead | |||
| Variable selling and admin. expenses | |||
| Shipping costs | |||
| Certification costs | |||
| Income (Loss) | $ | $ | $ |
Determine whether to reject (Alternative 1) or accept
(Alternative 2) the special order from Euro Motors.
b. What is the minimum price per unit that
would be financially acceptable to Brightstone? Round your answer
to two decimal places.
$per unit
In: Accounting
Question:
Complete the items below that would appear on a book/tax
reconciliation for Schedule M-1 on the IRS Form 1120, U.S.
Corporation Income Tax Return, for InterTax’s first year of
operations. Based on the data provided in the exhibit, enter the
appropriate values in the associated cells below. Please enter
additions as positive whole numbers and subtractions as negative
whole numbers. If an amount is zero, enter a zero (0).
Note: The deduction for organizational expenses in the
year was $5,707.
| A | B | |
| 1.) | Net income per books | |
| 2.) | Federal income tax per books | |
| 3.) | Depreciation recorded on books not deducted on the return | |
| 4.) | Charitable contributions recorded on books not deducted on the return | |
| 5.) | Other expenses recorded on books not deducted on return | |
| 6.) | Tax-exempt interest | |
| 7.) | Depreciation deducted on return not expensed on the books | |
| 8.) | Taxable income per tax return | $ |
InterTac Inc.
INCOME STATEMENT:
| Tax | Book | |
| Income | ||
| Consulting Fees | 1,880,000 | 1,880,000 |
| Tax-Exempt Interest | 0 | 2,400 |
| Interest Income on Bank Accounts | 16,400 | 16,400 |
| Total Income | 1,896,400 | 1,898,800 |
| Expenses | ||
| Organization Expenses | 5,707 | 15,600 |
| Office Salaries | 800,000 | 800,000 |
| Salaries and Wages | 240,000 | 240,000 |
| Rent | 76,800 | 76,800 |
| Utilities | 12,000 | 12,000 |
| Advertising | 30,000 | 30,000 |
| Repairs | 2,000 | 2,000 |
| Taxes | 10,000 | 10,000 |
| Employee Benefits | 2,000 | 2,000 |
| Interest | 10,000 | 10,000 |
| Office Supplies | 7,000 | 7,000 |
| Depreciation | 75,200 | 30,400 |
| Total Expense | 1,207,707 | 1,235,800 |
| Net Income Before Contributions | 625,693 | 663,000 |
| Charitable Contributions | 62,569 | 80,000 |
| Pre-Tax Income | 563,124 | 583,000 |
| Federal Tax Expense | 191,462 | 186,560 |
| Net Income | 371,662 | 396,440 |
Note: There were no shareholder distributions during the year.
In: Accounting
On July 1, 2019, the Renaissance Hotel collected a deposit of $1,335 from a customer for a banquet room and catering services for a wedding which will occur on June 30, 2021, the market rate of interest is 6%.
Required:
In: Accounting
Wyatt Company has budgeted the following units sales for 2011:
January 10,000 units
February 8,000 units
March 9,000 units
April 11,000 units
May 15,000 units
Data regarding Finished Goods and Raw Materials Inventory is as follows:
FINISHED GOODS:
The finished goods units on hand on December 31, 2010 was 2,000 units. Each unit required 2 pounds of raw materials that are estimated to cost an average of $4 per pound. It is the company's policy to maintain a finished goods inventory at the end of each month equal to 20% of next month's anticipated sales.
RAW MATERIALS INVENTORY:
They also have a policy of maintaining a raw materials inventory at the end of each month equal to 30% of the pounds needed for the following month's production. There were 5,760 pounds of raw materials on hand at December 31, 2010.
How many units should be produced for the first quarter of 2011?
What is the total cost of direct materials purchases for the first quarter of 2011?
In: Accounting
Overhead volume variances do not signal that overhead costs are in or out of control. Do you agree?
Please no hand-written answers.
In: Accounting