Dinkins Company purchased a truck that cost $81,000. The company expected to drive the truck 100,000 miles over its 5-year useful life, and the truck had an estimated salvage value of $12,500. If the truck is driven 33,500 miles in the current accounting period, what would be the amount of depreciation expense for the year? (Do not round intermediate calculations. Round your final answer to the nearest whole dollar amount.)
$22,948
$27,135
$13,700
$32,400
The balance sheet of Flo's Restaurant showed total assets of $400,000, liabilities of $120,000 and stockholders’ equity of $330,000. An appraiser estimated the fair value of the restaurant assets at $465,000. If Alice Company pays $585,000 cash for the restaurant, what is the amount of goodwill?
$120,000
$185,000
$255,000
$240,000
On January 1, Year 1, Friedman Company purchased a truck that cost $56,000. The truck had an expected useful life of 100,000 miles over 8 years and an $9,000 salvage value. During Year 2, Friedman drove the truck 30,000 miles. Friedman uses the units-of-production method. What is depreciation expense in Year 2? (Do not round intermediate calculations.):
$14,100
$16,800
$5,875
$7,000
Chico Company paid $610,000 for a basket purchase that included office furniture, a building and land. An appraiser provided the following estimates of the market values of the assets if they had been purchased separately: Office furniture, $165,000; Building, $510,000, and Land, $135,000. Based on this information, what is the cost that should be allocated to the office furniture? (Round your intermediate percentages to four decimal places: ie .054231 = 5.42%.)
$165,000
$124,257
$158,333
$52,500
On January 1, Year 1, Friedman Company purchased a truck that cost $35,000. The truck had an expected useful life of 8 years and an $7,000 salvage value. Friedman uses the double-declining-balance method. What is the book value of the truck at the end of Year 1? (Do not round intermediate calculations.)
$19,250
$26,250
$28,000
$21,000
On January 1, Year 1, the City Taxi Company purchased a new taxi cab for $72,000. The cab has an expected salvage value of $26,000. The company estimates that the cab will be driven 200,000 miles over its life. It uses the units-of-production method to determine depreciation expense. The cab was driven 54,000 miles the first year and 84,000 the second year. What is the amount of depreciation expense reported on the Year 2 income statement and the book value of the taxi at the end of Year 2, respectively? (Do not round intermediate calculations.)
$30,240 and $22,320
$30,240 and $-3,680
$19,320 and $40,260
$19,320 and $14,260
The following events apply to Gulf Seafood for the Year 1 fiscal
year:
b. Prepare a balance sheet and a statement of
cash flows for the Year 1 accounting period. (Amounts to be
deducted should be indicated by a minus sign.)
c. What is the net income for Year 1?
d. What amount of depreciation expense would
Gulf Seafood report on the Year 2 income statement?
e. What amount of accumulated depreciation would
Gulf Seafood report on the December 31, Year 2, balance
sheet?
f. Would the cash flow from operating activities
be affected by depreciation in Year 2?
Harding Corporation acquired real estate that contained land, building and equipment. The property cost Harding $1,425,000. Harding paid $350,000 and issued a note payable for the remainder of the cost. An appraisal of the property reported the following values: Land, $370,000; Building, $1,100,000 and Equipment, $730,000. (Round percentages to two decimal places: ie .054 = 5%).
What value will be recorded for the building?
$175,000
$325,000
$712,500
$1,100,000
What journal entry would be used to record the purchase of the above assets?
Land | 370,000 | |
Building | 1,100,000 | |
Equipment | 730,000 | |
Cash | 2,200,000 |
Land | 370,000 | |
Building | 1,100,000 | |
Equipment | 730,000 | |
Cash | 350,000 | |
Notes payable | 1,850,000 |
Land | 370,000 | |
Building | 1,100,000 | |
Equipment | 730,000 | |
Cash | 1,075,000 | |
Notes payable | 350,000 | |
Gain on purchase of long-term assets | 775,000 |
Land | 242,250 | |
Building | 712,500 | |
Equipment | 470,250 | |
Cash | 350,000 | |
Notes payable | 1,075,000 |
On April 1, Year 1, Fossil Energy Company purchased an oil producing well at a cash cost of $12,000,000. It is estimated that the oil well contains 600,000 barrels of oil, of which only 500,000 can be profitably extracted. By December 31, Year 1, 25,000 barrels of oil were produced and sold. What is depletion expense for Year 1 on this well?
$800,000
$600,000
$480,000
$500,000
Which of the following terms is used to describe the process of expense recognition for property, plant and equipment?
Amortization
Depreciation
Depletion
Revision
In: Accounting
Use the following information for the Problems below.
Forten Company, a merchandiser, recently completed its
calendar-year 2017 operations. For the year, (1) all sales are
credit sales, (2) all credits to Accounts Receivable reflect cash
receipts from customers, (3) all purchases of inventory are on
credit, (4) all debits to Accounts Payable reflect cash payments
for inventory, and (5) Other Expenses are paid in advance and are
initially debited to Prepaid Expenses. The company’s income
statement and balance sheets follow.
FORTEN COMPANY Comparative Balance Sheets December 31, 2017 and 2016 |
|||||||
2017 | 2016 | ||||||
Assets | |||||||
Cash | $ | 64,900 | $ | 83,500 | |||
Accounts receivable | 80,870 | 60,625 | |||||
Inventory | 290,656 | 261,800 | |||||
Prepaid expenses | 1,310 | 2,095 | |||||
Total current assets | 437,736 | 408,020 | |||||
Equipment | 147,500 | 118,000 | |||||
Accum. depreciation—Equipment | (41,625 | ) | (51,000 | ) | |||
Total assets | $ | 543,611 | $ | 475,020 | |||
Liabilities and Equity | |||||||
Accounts payable | $ | 63,141 | $ | 129,675 | |||
Short-term notes payable | 13,000 | 8,000 | |||||
Total current liabilities | 76,141 | 137,675 | |||||
Long-term notes payable | 60,000 | 58,750 | |||||
Total liabilities | 136,141 | 196,425 | |||||
Equity | |||||||
Common stock, $5 par value | 182,750 | 160,250 | |||||
Paid-in capital in excess of par, common stock | 47,500 | 0 | |||||
Retained earnings | 177,220 | 118,345 | |||||
Total liabilities and equity | $ | 543,611 | $ | 475,020 | |||
FORTEN COMPANY Income Statement For Year Ended December 31, 2017 |
||||||
Sales | $ | 632,500 | ||||
Cost of goods sold | 295,000 | |||||
Gross profit | 337,500 | |||||
Operating expenses | ||||||
Depreciation expense | $ | 30,750 | ||||
Other expenses | 142,400 | 173,150 | ||||
Other gains (losses) | ||||||
Loss on sale of equipment | (15,125 | ) | ||||
Income before taxes | 149,225 | |||||
Income taxes expense | 38,250 | |||||
Net income | $ | 110,975 | ||||
Additional Information on Year 2017 Transactions
Problem 16-3A Indirect: Statement of cash flows LO A1, P1, P2, P3
Required:
1. Prepare a complete statement of cash flows;
report its operating activities using the indirect method.
(Amounts to be deducted should be indicated with a minus
sign.)
|
In: Accounting
In: Accounting
Question 11
Pronghorn Corporation was organized on January 1, 2020. It is
authorized to issue 11,000 shares of 8%, $100 par value preferred
stock, and 498,000 shares of no-par common stock with a stated
value of $2 per share. The following stock transactions were
completed during the first year.
Jan. | 10 | Issued 75,500 shares of common stock for cash at $4 per share. | |
Mar. | 1 | Issued 5,550 shares of preferred stock for cash at $105 per share. | |
Apr. | 1 | Issued 24,500 shares of common stock for land. The asking price of the land was $85,500. The fair value of the land was $85,500. | |
May | 1 | Issued 75,500 shares of common stock for cash at $4.75 per share. | |
Aug. | 1 | Issued 11,500 shares of common stock to attorneys in payment of their bill of $40,000 for services performed in helping the company organize. | |
Sept. | 1 | Issued 11,000 shares of common stock for cash at $7 per share. | |
Nov. | 1 | Issued 2,500 shares of preferred stock for cash at $108 per share. |
*Journalize the transactions. (Record journal entries in the order presented in the problem. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
*Post to the stockholders’ equity accounts. (Post entries in the order of journal entries presented in the previous part.)
*Prepare the paid-in capital section of stockholders’ equity at December 31, 2020. (Enter the account name only and do not provide the descriptive information provided in the question.)
In: Accounting
GrandSlam, Inc., incurred the following costs during March: Selling expenses $ 158,400 Direct labor 284,000 Interest expense 41,200 Manufacturing overhead, actual 130,940 Raw materials used 482,000 Administrative expenses 119,400 During the month, 19,800 units of product were manufactured and 10,900 units of product were sold. On March 1, GrandSlam, Inc., carried no inventories. On March 31, there were no inventories for raw materials or work in process. Required:
a. Calculate the cost of goods manufactured during March and the average cost per unit of product manufactured. (Round "Average cost per unit" to 2 decimal places.)
b. Calculate the cost of goods sold during March. (Round "Average cost per unit" to 2 decimal places.)
c-1. Calculate the difference between cost of goods manufactured and cost of goods sold. (Round "Average cost per unit" to 2 decimal places.)
c-2. How will this amount be reported in the financial statements? Finished goods inventory Raw materials inventory Work in progress inventory
d. Prepare a traditional (absorption) income statement for GrandSlam, Inc., for the month of June. Assume that sales for the month were $1,031,000 and the company's effective income tax rate was 30%. (Round "Average cost per unit" to 2 decimal places.)
In: Accounting
The following selected accounts appear in the ledger of Parks Construction Inc. at the beginning of the current year:
Preferred 2% Stock, $100 par (50,000 shares authorized, 25,000 shares issued) | $2,500,000 |
Paid-In Capital in Excess of Par—Preferred Stock | 400,000 |
Common Stock, $15 par (800,000 shares authorized, 290,000 shares issued) | 4,350,000 |
Paid-In Capital in Excess of Par—Common Stock | 570,000 |
Retained Earnings | 16,578,000 |
During the year, the corporation completed a number of transactions affecting the stockholders' equity. They are summarized as follows:
Journalize the entries to record the transactions.
For a compound transaction, if an amount box does not require an entry, leave it blank.
Required:
a. Issued 80,000 shares of common stock at $21, receiving cash.
Cash | |||
Common Stock | |||
Paid-In Capital in Excess of Par-Common Stock |
b. Issued 13,000 shares of preferred 2% stock at $116.
Cash | |||
Preferred Stock | |||
Paid-In Capital in Excess of Par-Preferred Stock |
c. Purchased 48,000 shares of treasury common for $20 per share.
Treasury Stock | |||
Cash |
d. Sold 24,000 shares of treasury common for $23 per share.
Cash | |||
Treasury Stock | |||
Paid-In Capital from Sale of Treasury Stock |
e. Sold 16,000 shares of treasury common for $18 per share.
Cash | |||
Paid-In Capital from Sale of Treasury Stock | |||
Treasury Stock |
f. Declared cash dividends of $2.00 per share on preferred stock and $0.10 per share on common stock.
Cash Dividends | |||
Cash Dividends Payable |
g. Paid the cash dividends.
Cash Dividends Payable | |||
Cash |
In: Accounting
How would you weigh the time value of money? Is there something in your life, financial or otherwise, that you would have paid in advance for a better return later? How much? How long would you be willing to wait for that return? What would be an acceptable return?
In: Accounting
In: Accounting
Costing systems provide information that is used for a large variety of business decisions including planning production of goods and services, pricing products, and controlling associated costs of production. Thus, the choice of an appropriate costing system is a key underlying foundation for good decision making. In a written response address the following questions: 1.In what type of situation would a company use multiple cost accounting systems? 2.What factors should a company take into consideration in deciding whether to use job order costing or process costing? 3.Describe two products or services that might use both process and job order costing methods to determine the cost of a finished unit.
In: Accounting
Describe the differences between managerial and financial accounting. Include discussion on the differences as they relate to the primary users of the information and whether they are both required to follow the Generally Accepted Accounting Principles (GAAP).
Also include a discussion on the principal differences between activity-based costing (ABC) and traditional product costing?
In: Accounting
Assume Bella Donna’s General Store bought, on credit, a truckload of merchandise from American Wholesaling costing $1,610. The company paid $104 in transportation cost to National Trucking to deliver the merchandise to Bella Donna. Bella Donna immediately returned goods to American Wholesaling costing $540, and then took advantage of American Wholesaling’s 1/10, n/30 purchase discount. When Bella Donna pays American Wholesale within the discount period, the debit to accounts payable will be $______.
In: Accounting
Equivalent Units and Product Cost Report—FIFO Method
In its first month's operations (January 2016), Allred Company's Department 1 incurred charges of $165,000 for direct materials (10,000 units), $70,000 for direct labor, and $84,700 for manufacturing overhead. At month-end, 8,800 units had been finished and transferred out. The remaining units were finished with respect to material but only 25% complete with respect to conversion costs.
Assuming Allred uses the FIFO method and that materials are added at the beginning of the process and conversion costs occur evenly, compute the following:
b. The cost per equivalent unit for material and conversion.
c. The total cost assigned to the units transferred out.
d. The total cost assigned to the ending inventory.
e. Prove that your solutions to requirements (c) and (d) sum to the total costs to be accounted for.
Product Cost Report | ||||||
---|---|---|---|---|---|---|
Direct Materials |
Conversion Costs |
|||||
Beginning Inventory | $ | $ | $ | |||
Current | ||||||
Total Costs to Account For | $ | $ | $ | |||
÷ Total Equivalent Units | ||||||
Average cost / Equivalent unit | $ | b. | $ | b. | ||
Beginning inventory | ||||||
Costs incurred in Month 0 | $ | |||||
Costs incurred in Month 1 | ||||||
Started and finished | ||||||
Cost of Goods Manufactured | $ | c. | ||||
Ending Inventory: | ||||||
Direct Materials | $ | |||||
Conversion costs | ||||||
Cost of Ending Inventory | $ | d. | ||||
Total Costs Allocated | $ | e. |
In: Accounting
M7-8 Calculating Cost of Goods Available for Sale, Cost of Goods Sold, and Ending Inventory under Periodic FIFO, LIFO, and Weighted Average Cost [LO 7-3]
In its first month of operations, Literacy for the Illiterate opened a new bookstore and bought merchandise in the following order: (1) 200 units at $7 on January 1, (2) 500 units at $8 on January 8, and (3) 800 units at $9 on January 29. Assume 975 units are on hand at the end of the month. |
Calculate the cost of goods available for sale, ending inventory, and cost of goods sold under the (a) FIFO, (b) LIFO, and (c) weighted average cost flow assumptions. Assume a periodic inventory system is used |
In: Accounting
Mullet Technologies is considering whether or not to refund a $75 million, 15% coupon, 30-year bond issue that was sold 5 years ago. It is amortizing $9 million of flotation costs on the 15% bonds over the issue's 30-year life. Mullet's investment banks have indicated that the company could sell a new 25-year issue at an interest rate of 9% in today's market. Neither they nor Mullet's management anticipate that interest rates will fall below 9% any time soon, but there is a chance that rates will increase.
A call premium of 7% would be required to retire the old bonds, and flotation costs on the new issue would amount to $7 million. Mullet's marginal federal-plus-state tax rate is 40%. The new bonds would be issued 1 month before the old bonds are called, with the proceeds being invested in short-term government securities returning 4% annually during the interim period.
Conduct a complete bond refunding analysis. What is the bond refunding's NPV? Do not round intermediate calculations. Round your answer to the nearest cent
$ _____
What factors would influence Mullet's decision to refund now rather than later? (100 words or 4 bullet points)
_____________________________________________________________
______________________________________________________________
______________________________________________________________
In: Accounting
Streeterville Foods, Inc., has recently purchased a small mill that it intends to operate as one of its subsidiaries. The newly acquired mill has three products that it offers for sale—wheat cereal, pancake mix, and flour. Each product sells for $10 per package. Materials, labor, and other variable production costs are $4.90 per bag of wheat cereal, $6.10 per bag of pancake mix, and $3.10 per bag of flour. Sales commissions are 10% of sales for any product. All other costs are fixed |
The mill’s income statement for the most recent month is given below: |
Total Company |
Wheat Cearal |
Pancake Mix |
Flour |
|
Sales |
1,170,000.00 |
390,000.00 |
490,000.00 |
290,000.00 |
Expenses |
||||
Materials, labor, other |
579,900.00 |
191,100.00 |
298,900.00 |
89,900.00 |
Sales Commissions |
117,000.00 |
39,000.00 |
49,000.00 |
29,000.00 |
Advertising |
156,050.00 |
73,000.00 |
50,000.00 |
33,050.00 |
Salaries |
98,500.00 |
43,300.00 |
10,200.00 |
45,000.00 |
Equipment Depreciation |
58,500.00 |
19,500.00 |
24,500.00 |
14,500.00 |
Warehouse rent |
23,400.00 |
7,800.00 |
9,800.00 |
5,800.00 |
General Administration |
84,000.00 |
28,000.00 |
28,000.00 |
28,000.00 |
Total Expenses |
1,117,350.00 |
401,700.00 |
470,400.00 |
245,250.00 |
Net Operating income (loss) |
52,650.00 |
(11,700.00) |
19,600.00 |
44,750.00 |
The following additional information is available about the company: |
a. |
The same equipment is used to mill and package all three products. In the above income statement, equipment depreciation has been allocated on the basis of sales dollars. An analysis of equipment usage indicates that it is used 40% of the time to make wheat cereal, 50% of the time to make pancake mix, and 10% of the time to make flour.. |
b. |
All three products are stored in the same warehouse. In the above income statement, the warehouse rent has been allocated on the basis of sales dollars. The warehouse contains 46,800 square feet of space, of which 8,000 square feet are used for wheat cereal, 14,000 square feet are used for pancake mix, and 24,800 square feet are used for flour. The warehouse space costs the company $0.50 per square foot per month to rent. |
c. |
The general administration costs relate to the administration of the company as a whole. In the above income statement, these costs have been divided equally among the three product lines. |
d. |
All other costs are traceable to the product lines. |
Streeterville Foods’ management is anxious to improve the mill’s 4.5% margin on sales. |
Required: |
1. |
Prepare a new contribution format segmented income statement for the month. Adjust the allocation of equipment depreciation and warehouse rent as indicated by the additional information provided. |
||
In: Accounting