Assume that on December 31, 2019, Kimberly-Clark Corp. signs a 10-year, non-cancelable lease agreement to lease a storage building from Sheffield Storage Company. The following information pertains to this lease agreement.
| 1. | The agreement requires equal rental payments of $66,199 beginning on December 31, 2019. | |
| 2. | The fair value of the building on December 31, 2019 is $484,368. | |
| 3. | The building has an estimated economic life of 12 years, a guaranteed residual value of $10,000, and an expected residual value of $7,900. Kimberly-Clark depreciates similar buildings on the straight-line method. | |
| 4. | The lease is nonrenewable. At the termination of the lease, the building reverts to the lessor. | |
| 5. | Kimberly-Clark’s incremental borrowing rate is 8% per year. The lessor’s implicit rate is not known by Kimberly-Clark. |
Prepare the journal entries on the lessee’s books to reflect the signing of the lease agreement and to record the payments and expenses related to this lease for the years 2019, 2020, and 2021. Kimberly-Clark’s fiscal year-end is December 31.
In: Accounting
Brenda has been asked to observe how junior management are using new accounting software at a leading city accounting firm. As part of informed consent, staff are informed that they will remain anonymous. During her observations, Brenda notices that many of the junior management staff are making a particular data entry error when using the software. These errors are causing the accounting firm to lose profit. Company policy dictates clearly that worker salaries will be docked for clear mistakes leading to the loss of company profit. How does Brenda handle this situation?
Briefly discuss the dilemma for Brenda. Show your utilisation by using Chris MacDonald's methodology to demonstrate how Brenda might analyse and resolve the dilemma. Provide a recommendation of what actions Brenda should initiate and to whom she needs to communicate throughout the process.
In: Accounting
In 2018, Nina contributes 11 percent of her $119,000 annual salary to her 401(k) account. She expects to earn a 5 percent before-tax rate of return. Assuming she leaves this (and any employer contributions) in the account until she retires in 25 years, what is Nina’s after-tax accumulation from her 2018 contributions to her 401(k) account?
a.) Assume Nina’s marginal tax rate at retirement is 30 percent.
b.) Assume Nina’s marginal tax rate at retirement is 20 percent.
c.) Assume Nina’s marginal tax rate at retirement is 40 percent.
In: Accounting
On the first day of the fiscal year, a company issues a $8,400,000, 12%, 10-year bond that pays semiannual interest of $504,000 ($8,400,000 × 12% × ½), receiving cash of $7,115,493. Journalize the first interest payment and the amortization of the related bond discount. Round to the nearest dollar. If an amount box does not require an entry, leave it blank.
In: Accounting
When CQ University’s computers began acting sluggishly, computer operators were relieved when a software trouble-shooter from DELL called. When he offered to correct the problem they were having, he was given a login ID and password. The next morning, the computers were worse. A call to DELL confirmed the university’s suspicion: someone had impersonated a DELL repairman to gain unauthorized access to the system and destroy the database. CQ University was also concerned that the intruder had devised a program that would let him get back into the system even after all the passwords were changed. a) What techniques could the imposter have implemented to breach the university’s internal security? ____________________
In: Accounting
In: Accounting
On May 1, 2017, Bramble Company issued 1,400 $1,000 bonds at
102. Each bond was issued with one detachable stock warrant.
Shortly after issuance, the bonds were selling at 97, but the fair
value of the warrants cannot be determined.
(a) Prepare the entry to record the issuance of
the bonds and warrants. (Credit account titles are
automatically indented when amount is entered. Do not indent
manually. If no entry is required, select "No Entry" for the
account titles and enter 0 for the
amounts.)
|
Account Titles and Explanation |
Debit |
Credit |
(b) Assume the same facts as part (a), except that
the warrants had a fair value of $37. Prepare the entry to record
the issuance of the bonds and warrants. (Credit account
titles are automatically indented when amount is entered. Do not
indent manually. If no entry is required, select "No Entry" for the
account titles and enter 0 for the amounts. Round intermediate
calculations to 5 decimal places, e.g. 1.24687 and final answers to
0 decimal places, e.g. 5,125.)
|
Account Titles and Explanation |
Debit |
Credit |
In: Accounting
BONDS :
Huskies Corp. issued 9-year $750,000 bond on January 1, 2006 with coupon rate of 10%. The bond pays interest semiannually every June 30 and December 31, with the principal to be paid at the end of year 9. The effective market interest rate at the issuance date is 8%.
a. Calculate the proceeds and show clearly what you use for RATE, NPER, PMT, FV ?
b. What journal entry was recorded at issuance?
c. What annual coupon rate would Huskies have to offer in order to obtain total proceeds of $750,000 on the issuance of these bonds
d. UNRELATED to above. Labradors Inc. repurchased the bond which has been issued several years ago and which has a Face Value of $800,000 and unamortized premium of $42,000. The bond was repurchased at 106. Record the journal entry that the company made when it repurchased the bond.
In: Accounting
How much cash do I have at the end of period 2, 3, and 4?
Please add calculations for each period.
| Period | Debit or Credit | Value | Type | Account |
|---|---|---|---|---|
| 0 | Credit(+) | $1,500,000 | Equity | Startup Capital |
| 0 | Debit(+) | $1,500,000 | Asset | Cash |
| 0 | Debit(+) | $300,000 | Asset | Property, Plant & Equipment |
| 1 | Debit(+) | $26,000 | Expense | Operating Costs |
| 1 | Credit(-) | $26,000 | Asset | Cash |
| 1 | Credit(+) | $126,114 | Revenue | Revenue |
| 1 | Debit(+) | $126,114 | Asset | Cash |
| 1 | Debit(+) | $240,000 | Asset | Inventory |
| 1 | Credit(+) | $240,000 | Asset | Cash |
| 1 | Debit(+) | $67,261 | Expense | Cost of Goods Sold |
| 1 | Credit(-) | $67,261 | Asset | Inventory |
| 2 | Debit(+) | $26,000 | Expense | Operating Costs |
| 2 | Credit(-) | $26,000 | Asset | Cash |
| 2 | Credit(+) | $473,886 | Revenue | Revenue |
| 2 | Debit(+) | $473,886 | Asset | Cash |
| 2 | Debit(+) | $90,000 | Asset | Inventory |
| 2 | Credit(+) | $90,000 | Asset | Cash |
| 2 | Debit(+) | $284,332 | Expense | Cost of Goods Sold |
| 2 | Credit(-) | $284,332 | Asset | Inventory |
| 2 | Debit(+) | $37,500 | Expense | Loan Payment - Interest |
| 2 | Credit(-) | $37,500 | Asset | Cash |
| 2 | Debit(+) | $250,000 | Liability | Loan Payment - Principal |
| 2 | Credit(-) | $250,000 | Asset | Cash |
| 2 | Debit(+) | $40,000 | Expense | Other Costs |
| 2 | Credit(-) | $40,000 | Asset | Cash |
| 2 | Debit(+) | $6,000 | Expense | Market Research Costs |
| 2 | Credit(-) | $6,000 | Asset | Cash |
| 2 | Debit(+) | $2,500 | Expense | Sales Promotion - OKC |
| 2 | Credit(-) | $2,500 | Asset | Cash |
| 2 | Debit(+) | $2,500 | Expense | Sales Promotion - Tulsa |
| 2 | Credit(-) | $2,500 | Asset | Cash |
| 2 | Debit(+) | $2,500 | Expense | Sales Promotion - Stillwater |
| 2 | Credit(-) | $2,500 | Asset | Cash |
| 2 | Debit(+) | $2,500 | Expense | Product Line Brand - OKC |
| 2 | Credit(-) | $2,500 | Asset | Cash |
| 2 | Debit(+) | $2,500 | Expense | Product Line Brand - Tulsa |
| 2 | Credit(-) | $2,500 | Asset | Cash |
| 2 | Debit(+) | $2,500 | Expense | Product Line Brand - Stillwater |
| 2 | Credit(-) | $2,500 | Asset | Cash |
| 3 | Debit(+) | $26,000 | Expense | Operating Costs |
| 3 | Credit(-) | $26,000 | Asset | Cash |
| 3 | Credit(+) | $799,731 | Revenue | Revenue |
| 3 | Debit(+) | $799,731 | Asset | Cash |
| 3 | Debit(+) | $682,500 | Asset | Inventory |
| 3 | Credit(+) | $682,500 | Asset | Cash |
| 3 | Debit(+) | $559,812 | Expense | Cost of Goods Sold |
| 3 | Credit(-) | $559,812 | Asset | Inventory |
| 3 | Debit(+) | $1,500 | Expense | Market Research Costs |
| 3 | Credit(-) | $1,500 | Asset | Cash |
| 3 | Debit(+) | $2,500 | Expense | Research & Development - Flavor Varieties |
| 3 | Credit(-) | $2,500 | Asset | Cash |
| 3 | Debit(+) | $5,000 | Expense | Research & Development - Ingredient Quality |
| 3 | Credit(-) | $5,000 | Asset | Cash |
| 3 | Debit(+) | $15,000 | Expense | Research & Development - Update Equipment |
| 3 | Credit(-) | $15,000 | Asset | Cash |
| 3 | Debit(+) | $3,750 | Expense | Sales Promotion - OKC |
| 3 | Credit(-) | $3,750 | Asset | Cash |
| 3 | Debit(+) | $2,500 | Expense | Sales Promotion - Tulsa |
| 3 | Credit(-) | $2,500 | Asset | Cash |
| 3 | Debit(+) | $5,000 | Expense | Sales Promotion - Stillwater |
| 3 | Credit(-) | $5,000 | Asset | Cash |
| 3 | Debit(+) | $3,750 | Expense | Product Line Brand - OKC |
| 3 | Credit(-) | $3,750 | Asset | Cash |
| 3 | Debit(+) | $2,500 | Expense | Product Line Brand - Tulsa |
| 3 | Credit(-) | $2,500 | Asset | Cash |
| 3 | Debit(+) | $5,000 | Expense | Product Line Brand - Stillwater |
| 3 | Credit(-) | $5,000 | Asset | Cash |
| 4 | Debit(+) | $26,000 | Expense | Operating Costs |
| 4 | Credit(-) | $26,000 | Asset | Cash |
| 4 | Credit(+) | $723,876 | Revenue | Revenue |
| 4 | Debit(+) | $723,876 | Asset | Cash |
| 4 | Debit(+) | $315,000 | Asset | Inventory |
| 4 | Credit(+) | $315,000 | Asset | Cash |
| 4 | Debit(+) | $381,945 | Expense | Cost of Goods Sold |
| 4 | Credit(-) | $381,945 | Asset | Inventory |
| 4 | Debit(+) | $1,500 | Expense | Market Research Costs |
| 4 | Credit(-) | $1,500 | Asset | Cash |
| 4 | Debit(+) | $2,500 | Expense | Research & Development - Flavor Varieties |
| 4 | Credit(-) | $2,500 | Asset | Cash |
| 4 | Debit(+) | $5,000 | Expense | Research & Development - Ingredient Quality |
| 4 | Credit(-) | $5,000 | Asset | Cash |
| 4 | Debit(+) | $5,000 | Expense | Sales Promotion - OKC |
| 4 | Credit(-) | $5,000 | Asset | Cash |
| 4 | Debit(+) | $5,000 | Expense | Sales Promotion - Tulsa |
| 4 | Credit(-) | $5,000 | Asset | Cash |
| 4 | Debit(+) | $5,000 | Expense | Sales Promotion - Stillwater |
| 4 | Credit(-) | $5,000 | Asset | Cash |
| 4 | Debit(+) | $5,000 | Expense | Product Line Brand - OKC |
| 4 | Credit(-) | $5,000 | Asset | Cash |
| 4 | Debit(+) | $5,000 | Expense | Product Line Brand - Tulsa |
| 4 | Credit(-) | $5,000 | Asset | Cash |
| 4 | Debit(+) | $5,000 | Expense | Product Line Brand - Stillwater |
| 4 | Credit(-) | $5,000 | Asset | Cash |
In: Accounting
Daosta Inc. uses the FIFO method in its process costing system. The following data concern the op... Daosta Inc. uses the FIFO method in its process costing system. The following data concern the operations of the company's first processing department for a recent month. Work in process, beginning: Units in process 900 Percent complete with respect to materials 40 % Percent complete with respect to conversion 20 % Costs in the beginning inventory: Materials cost $ 530 Conversion cost $ 2108 Units started into production during the month 16,000 Units completed and transferred out 16,000 Costs added to production during the month: Materials cost $ 32,180 Conversion cost $ 416,512 Work in process, ending: Units in process 900 Percent complete with respect to materials 50 % Percent complete with respect to conversion 70 %
Using the FIFO method:
Equivalent Units of production for direct materials:
Equivalent units of production for conversion costs:
Cost per equivalent unit- direct materials:$
cost per equivalent unit- conversion costs:$
Total value of ending Work in process:$
Total value of units transferred out:$
In: Accounting
In: Accounting
1. Would it be a violation of the Consumer Credit Protection Act to suspend, demote, or transfer an employee who is subject to a garnishment?
2. Freisleven Corporation has undertaken a cost study of its operations. One of the costs of major concern to the company is the total cost of labor, particularly the cost of employee benefits. Prepare a list of the different kinds of costs that a company might incur as part of its "total package" salary cost.
3. If a salaried exempt employee was paid twice (direct deposit) for one pay period and the company was unable to recover the funds, what options are avail- able to the company to correct this overpayment.
4. In Philadelphia, Pennsylvania, most workers are subject to three income taxes upon their earnings— federal, state, and city. Should an employer in Philadelphia record the liability for the withholding of all three income taxes in one liability account such as Income Taxes Payable?
In: Accounting
Five Measures of Solvency or Profitability
The balance sheet for Garcon Inc. at the end of the current fiscal year indicated the following:
| Bonds payable, 9% | $1,600,000 |
| Preferred $5 stock, $50 par | 262,000 |
| Common stock, $13 par | 183,924.00 |
Income before income tax was $446,400, and income taxes were $66,500 for the current year. Cash dividends paid on common stock during the current year totaled $47,820. The common stock was selling for $225 per share at the end of the year.
Determine each of the following. Round answers to one decimal place, except for dollar amounts which should be rounded to the nearest whole cent. Use the rounded answers for subsequent requirements, if required.
| a. Times interest earned ratio | times | |
| b. Earnings per share on common stock | $ | |
| c. Price-earnings ratio | ||
| d. Dividends per share of common stock | $ | |
| e. Dividend yield | % |
In: Accounting
Answer the following true/false
1.A permanent mortgage is one on which interest only has to be paid
2.A pro‑forma income statement is an income statement calculated on a cash basis
3.The best way to evaluate feasibility study financial projections is to convert the projected cash flow figures using net present value (NPV) or internal rate of return (IRR).
4.The concepts of financial management are basically the same for both profit and non-profit organizations
5.Funds raised through proper financial management should never be invested in assets such as food and beverage inventories
In: Accounting
LEFO Company uses the periodic inventory system to account for inventories. Information related to LEFO Company's inventory at March 31 is given below:
Date - Description - Units - Unit Cost
March 1 - Beg. Inventory - 10 units - $100
March 8 - Purchase - 10 units - $110
March 17 - Purchase - 10 units - $120
March 24 - Purchase - 10 units - $125
March 30 - Purchase - 10 units - $130
a. Calculate the value of ending inventory using the FIFO cost assumption if 15 units remain on hand at March 31. Calculate COGS.
b. Calculate the value of ending inventory using the LIFO cost assumption if 15 units remain on hand at March 31. Calculate COGS.
c. Calculate the value of ending inventory using the weighted-average cost cost assumption if 15 units remain on hand at March 31. Calculate COGS.
In: Accounting