A farm purchased a new tractor for $30,000. They estimated the tractor would have a useful life of 5 years and would have a salvage value of $5,000. The farm uses the straight-line method and the half-year convention. The farm sold the tractor during year 3 for $19,000.
1. Compute the amount of depreciation expense to be taken in years 1, 2 and 3
Year 1
Year 2
Year 3
2. Prepare a journal entry to record the sale of the tractor in year 3.
In: Accounting
The following accounts appear in the ledger of Sheldon Company on January 31, the end of this fiscal year.
| Cash | $16,400 |
| Accounts Receivable | 15,100 |
| Merchandise Inventory | 55,500 |
| Store Supplies | 1,603 |
| Prepaid Insurance | 3,080 |
| Store Equipment | 24,900 |
| Accumulated Depreciation, Store Equipment | 3,860 |
| Accounts Payable | 14,400 |
| M. E. Sheldon, Capital | 126,484 |
| M. E. Sheldon, Drawing | 36,000 |
| Sales | 227,000 |
| Sales Returns and Allowances | 2,000 |
| Purchases | 172,000 |
| Purchases Returns and Allowances | 2,375 |
| Purchases Discounts | 3,567 |
| Freight In | 7,491 |
| Wages Expense | 24,800 |
| Advertising Expense | 5,912 |
| Rent Expense | 12,900 |
The data needed for adjustments on January 31 are as follows:
a-b. Merchandise inventory, January 31, $55,750.
c. Insurance expired for the year, $1,285.
d. Depreciation for the year, $5,482.
e. Accrued wages on January 31, $1,556.
f. Supplies used during the year $1,503.
Required:
Prepare a work sheet for the fiscal year ended January 31. If an amount box does not require an entry, leave it blank. Enter all numbers as positive values.
| Sheldon Company | ||||||||||
| Work Sheet | ||||||||||
| For Year Ended January 31, 20-- | ||||||||||
| TRIAL BALANCE | ADJUSTMENTS | INCOME STATEMENT | BALANCE SHEET | |||||||
| ACCOUNT NAME | DEBIT | CREDIT | DEBIT | CREDIT | DEBIT | CREDIT | DEBIT | CREDIT | ||
| 1 | Cash | 1 | ||||||||
| 2 | Accounts Receivable | 2 | ||||||||
| 3 | Merchandise Inventory | 3 | ||||||||
| 4 | Store Supplies | 4 | ||||||||
| 5 | Prepaid Insurance | 5 | ||||||||
| 6 | Store Equipment | 6 | ||||||||
| 7 | Accumulated Depreciation, Store Equipment | 7 | ||||||||
| 8 | Accounts Payable | 8 | ||||||||
| 9 | M. E. Sheldon, Capital | 9 | ||||||||
| 10 | M. E. Sheldon, Drawing | 10 | ||||||||
| 11 | Sales | 11 | ||||||||
| 12 | Sales Returns and Allowances | 12 | ||||||||
| 13 | Purchases | 13 | ||||||||
| 14 | Purchases Returns and Allowances | 14 | ||||||||
| 15 | Purchases Discounts | 15 | ||||||||
| 16 | Freight In | 16 | ||||||||
| 17 | Wages Expense | 17 | ||||||||
| 18 | Advertising Expense | 18 | ||||||||
| 19 | Rent Expense | 19 | ||||||||
| 20 | 20 | |||||||||
| 21 | Income Summary | 21 | ||||||||
| 22 | Insurance Expense | 22 | ||||||||
| 23 | Depreciation Expense, Store Equipment | 23 | ||||||||
| 24 | Wages Payable | 24 | ||||||||
| 25 | Store Supplies Expense | 25 | ||||||||
| 26 | 26 | |||||||||
| 27 | Net Income (Loss) | 27 | ||||||||
| 28 | 28 | |||||||||
| 29 | 29 | |||||||||
Prepare an income statement.
| Sheldon Company | ||||
| Income Statement | ||||
| For Year Ended January 31, 20-- | ||||
| Revenue from Sales: | ||||
| $ | ||||
| Net Sales | $ | |||
| Cost of Goods Sold: | ||||
| $ | ||||
| $ | ||||
| Net Purchases | $ | |||
| $ | ||||
| $ | ||||
| Operating Expenses: | ||||
| $ | ||||
| Total Operating Expenses | ||||
| Net Loss | ||||
Prepare a statement of owner's equity. No additional investments were made during the year.
| Sheldon Company | ||
| Statement of Owner's Equity | ||
| For Year Ended January 31, 20-- | ||
| $ | ||
| $ | ||
| $ | ||
Prepare a balance sheet.
| Sheldon Company | ||
| Balance Sheet | ||
| January 31, 20-- | ||
| Assets | ||
| Current Assets: | ||
| $ | ||
| Total Current Assets | $ | |
| Property and Equipment: | ||
| $ | ||
| Total Assets | $ | |
| Liabilities | ||
| Current Liabilities: | ||
| $ | ||
| Total Liabilities | $ | |
| Owner's Equity | ||
| Total Liabilities and Owner's Equity | $ | |
In: Accounting
E14-17B (L03) (Imputation of Interest) Presented below are two independent situations:
(a) On January 1, 2017, Excess Inc. purchased undeveloped land that had an assessed value of $261,000 at the time of purchase. A $500,000, zero-interest-bearing note due January 1, 2022, was given in exchange. There was no established exchange price for the land, nor a ready market value for the note. The interest rate charged on a note of this type is 15%. Determine at what amount the land should be recorded at January 1, 2017, and the interest expense to be reported in 2017 related to this transaction.
(b) On January 1, 2017, DonnAll Diamond borrowed $1,000,000 (face value) from Allstar Co., a major customer, through a zero-interest-bearing note due in 3 years. Because the note was zero-interest-bearing, DonnAll agreed to sell diamonds to this customer at lower than market price. A 12% rate of interest is normally charged on this type of loan. Prepare the journal entry to record this transaction and determine the amount of interest expense to report for 2017.
In: Accounting
The T account balances for the accounts of Rya’s Planning Services as of January 31, 2019 are listed below.
| Cash | $ | 22,000 |
| Accounts Receivable | 18,000 | |
| Office Supplies | 800 | |
| Equipment | 20,000 | |
| Accounts Payable | 9,880 | |
| Rya Page, Capital | 29,000 | |
| Rya Page, Drawing | 6,100 | |
| Planning Fees Income | 34,150 | |
| Office Supplies Expense | 310 | |
| Rent Expense | 910 | |
| Salaries Expense | 4,100 | |
| Utilities Expense | 810 | |
In: Accounting
Sales Forecast and Flexible Budget
Olympus, Inc., manufactures three models of mattresses: the Sleepeze, the Plushette, and the Ultima. Forecast sales for next year are 14,960 for the Sleepeze, 12,080 for the Plushette, and 5,460 for the Ultima. Gene Dixon, vice president of sales, has provided the following information:
Required:
1. Suppose that Gene is considering three sales scenarios as follows:
| Pessimistic | Expected | Optimistic | ||||||
| Price | Quantity | Price | Quantity | Price | Quantity | |||
| Sleepeze | $185 | 12,190 | $204 | 14,960 | $204 | 17,580 | ||
| Plushette | 297 | 9,990 | 354 | 12,080 | 365 | 14,600 | ||
| Ultima | 880 | 2,180 | 950 | 5,460 | 1,140 | 5,460 | ||
Prepare a revenue budget for the Sales Division for the coming year for each scenario.
| Olympus, Inc. | |||
| Revenue Budget | |||
| For the Coming Year | |||
| Pessimistic | Expected | Optimistic | |
| Sleepeze | $ | $ | $ |
| Plushette | |||
| Ultima | |||
| Total sales | $ | $ | $ |
2. Prepare a flexible expense budget for the Sales Division for the three scenarios above. If required, round answers to the nearest dollar.
| Olympus, Inc. | |||
| Flexible Expense Budget | |||
| For the Coming Year | |||
| Pessimistic | Expected | Optimistic | |
| Salaries | $ | $ | $ |
| Depreciation | |||
| Office supplies and other | |||
| Advertising: | |||
| Sleepeze and Plushette | |||
| Ultima | |||
| Commissions | |||
| Shipping: | |||
| Sleepeze | |||
| Plushette | |||
| Ultima | |||
| Total | $ | $ | $ |
In: Accounting
Exercise 18-19 On June 3, 2017, Martinez Company sold to Ann Mount merchandise having a sales price of $8,700 (cost $6,090) with terms of n/60, f.o.b. shipping point. Martinez estimates that merchandise with a sales value of $870 will be returned. An invoice totaling $110 was received by Mount on June 8 from Olympic Transport Service for the freight cost. Upon receipt of the goods, on June 8, Mount returned to Martinez $300 of merchandise containing flaws. Martinez estimates the returned items are expected to be resold at a profit. The freight on the returned merchandise was $23, paid by Martinez on June 8. On July 16, the company received a check for the balance due from Mount. Prepare journal entries for Martinez Company to record all the events in June and July. (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.) Date Account Titles and Explanation Debit Credit (To record sales) (To record cost of goods sold) (To record sales returns) (To record cost of goods returned) (To record the freight cost) Click if you would like to Show Work for this question: Open Show Work
In: Accounting
1- List and describe the different sources of American law and how they originate.
2- Briefly explain what is the difference between utilitarian and duty based ethics?
3- Discuss the differences and similarities between sole proprietorships and general partnerships as well as the advantages and disadvantages of one versus the other.
4- What is the difference between a de-jure and a de-facto corporation?
5- Discuss the role and powers of shareholders in a corporation. 6- What are the duties of the board of directors and how are they elected?
7- Discuss what type of conduct is prohibited and/or regulated by sections 1 and 2 of the Sherman Act.
8- Discuss the difference between patents and copyrights. 9- Discuss the meaning, applicability and the limitations of the doctrine of employment at will.
10- Discuss what does it mean to be Holder in Due Course (HDC), what are its benefits, and what are the requirements to qualify as an HDC.
11- What is a secured interest and what are the requirements for the creation of a secured interest?
12- Discuss the purpose, the similarities and differences of Chapter 7 and Chapter 13 types of bankruptcies.
In: Accounting
Sylvan Inc. entered into a non-cancelable lease arrangement with Breton Leasing Corporation for a certain machine. Breton's primary business is leasing;it is not a manufacturer or dealer. Sylvan will lease the machine for a period of 3 years, which is 50% of the machine's economic life. Breton will take possession of the machine at the end of the initial 3-year lease and lease it to another, smaller company that does not need the most current version of the machine. Sylvan does not guarantee any residual value for the machine and will not purchase the machine at the end of the lease term.
Sylvan's incremental borrowing rate is 10%, and the implicit rate in the lease is 9%. Sylvan has no way of knowing the implicit rate used by Breton. Using either rate, the present value of the minimum lease payments is between 90% and 100% of the fair value of the machine at the date of the lease agreement.
Sylvan has agreed to pay all executory costs directly, and no allowance for these costs is included in the lease payments.
Breton is reasonably certain that Sylvan will pay all lease payments. Because Sylvan has agreed to pay all executory costs, there are no important uncertainties regarding costs to be incurred by Breton. Assume that no indirect costs are involved.
Instructions
(a) With respect to Sylvan (the lessee), answer the following.
How should Sylvan compute the appropriate amount to be recorded for the lease or asset acquired?
What accounts will be created or affected by this transaction, and how will the lease or asset and other costs related to the transaction be recorded in earnings?
What disclosures must Sylvan make regarding this leased asset?
(b) With respect to Breton (the lessor), answer the following.
How should this lease be recorded by Breton, and how are the appropriate amounts determined?
How should Breton determine the appropriate amount of revenue to be recognized from each lease payment?
What disclosures must Breton make regarding this lease?
In: Accounting
|
The firm Prussian Clausewitz produces three products: Blücher, Napoleon, and Wellington. These three products are sold at a sales mix of 1:3:2, respectively.
The firm has $6,000,000 in fixed costs. How many Napoleon units must the firm sell at breakeven (round up to nearest unit if necessary)? |
|||||||||||||
|
|||||||||||||
In: Accounting
Kayak Co. budgeted the following cash receipts (excluding cash receipts from loans received) and cash payments (excluding cash payments for loan principal and interest payments) for the first three months of next year. Cash Receipts Cash payments January $ 526,000 $ 471,700 February 406,500 352,200 March 464,000 533,000 According to a credit agreement with the company’s bank, Kayak promises to have a minimum cash balance of $40,000 at each month-end. In return, the bank has agreed that the company can borrow up to $160,000 at a monthly interest rate of 1%, paid on the last day of each month. The interest is computed based on the beginning balance of the loan for the month. The company repays loan principal with any cash in excess of $40,000 on the last day of each month. The company has a cash balance of $40,000 and a loan balance of $80,000 at January 1. Prepare monthly cash budgets for January, February, and March. (Negative balances and Loan repayment amounts (if any) should be indicated with minus sign.)
In: Accounting
The stockholders’ equity section of Stellar Inc. at the
beginning of the current year appears below.
Common stock, $10 par value, authorized 1,043,000 shares, 321,000 shares issued and outstanding$3,210,000Paid-in capital in excess of par—common stock562,000Retained earnings624,000
During the current year, the following transactions occurred:
|
1) The company issued to the stockholders 109,000 rights. Ten rights are needed to buy one share of stock at $30. The rights were void after 30 days. The market price of the stock at this time was $32 per share.
|
In: Accounting
For your fourth assignment we will be covering the Partnership chapter. Partnerships are very similar to sole proprietorships in many ways but it adds the old mantra of "two heads are better than one" to the mix. After reading the chapter please complete the following questions.
1. What are some examples of industries that the business entities still commonly setup in the partnership business form?
2. Why would a group of people organize their business as a partnership?
3. What is the difference between the entity theory and aggregate theory of partnerships?
In: Accounting
1.
A corporation issues $500,000 of 20-year, 7% bonds dated January 1 at 95. The journal entry to record the issuance will include
Group of answer choices
a credit to Bonds Payable for $500,000.
a credit to Premiums on Bonds Payable for $25,000.
a debit to Interest Expense for $25,000.
a credit to Discount on Bonds Payable for $25,000.
a debit to Cash for $500,000.
2.
If the market interest rate for a bond is higher than the stated interest rate, the bond will sell at
Group of answer choices
the conversion rate
a premium.
the termination rate
a discount.
par.
In: Accounting
Forecast Sales Volume and Sales Budget
For 20Y8, Raphael Frame Company prepared the sales budget that follows.
At the end of December 20Y8, the following unit sales data were reported for the year:
| Unit Sales | ||||
| 8" × 10" Frame | 12" × 16" Frame | |||
| East | 27,501 | 10,504 | ||
| Central | 6,464 | 3,822 | ||
| West | 5,723 | 3,193 | ||
| Raphael Frame Company Sales Budget For the Year Ending December 31, 20Y8 |
|||||||
| Product and Area | Unit Sales Volume |
Unit Selling Price |
Total Sales | ||||
| 8" × 10" Frame: | |||||||
| East | 26,700 | $27 | $720,900 | ||||
| Central | 6,400 | 27 | 172,800 | ||||
| West | 5,900 | 27 | 159,300 | ||||
| Total | 39,000 | $1,053,000 | |||||
| 12" × 16" Frame: | |||||||
| East | 10,100 | $28 | $282,800 | ||||
| Central | 3,900 | 28 | 109,200 | ||||
| West | 3,100 | 28 | 86,800 | ||||
| Total | 17,100 | $478,800 | |||||
| Total revenue from sales | $1,531,800 | ||||||
For the year ending December 31, 20Y9, unit sales are expected to follow the patterns established during the year ending December 31, 20Y8. The unit selling price for the 8" × 10" frame is expected to increase to $28 and the unit selling price for the 12" × 16" frame is expected to increase to $30, effective January 1, 20Y9.
Required:
1. Compute the increase or decrease of actual unit sales for the year ended December 31, 20Y8, over budget. Use the minus sign to indicate a decrease in amount and percent. Round percents to the nearest whole percent.
| Unit Sales, Year Ended 20Y8 |
Increase (Decrease) Actual Over Budget |
||||||
| Budget | Actual Sales | Amount | Percent | ||||
| 8" × 10" Frame: | |||||||
| East | % | ||||||
| Central | % | ||||||
| West | % | ||||||
| 12" × 16" Frame: | |||||||
| East | % | ||||||
| Central | % | ||||||
| West | % | ||||||
2. Assuming that the increase or decrease in actual sales to budget indicated in part (1) is to continue in 20Y9, compute the unit sales volume to be used for preparing the sales budget for the year ending December 31, 20Y9. Use the minus sign to indicate a decrease in percent. Round budgeted units to the nearest whole unit.
| 20Y8 Actual Units |
Percentage Increase (Decrease) |
20Y9 Budgeted Units (rounded) |
|||
| 8" × 10" Frame: | |||||
| East | % | ||||
| Central | % | ||||
| West | % | ||||
| 12" × 16" Frame: | |||||
| East | % | ||||
| Central | % | ||||
| West | % | ||||
3. Prepare a sales budget for the year ending December 31, 20Y9.
| Raphael Frame Company | |||
| Sales Budget | |||
| For the Year Ending December 31, 20Y9 | |||
| Product and Area | Unit Sales Volume | Unit Selling Price | Total Sales |
| 8" × 10" Frame: | |||
| East | $ | $ | |
| Central | |||
| West | |||
| Total | $ | ||
| 12" × 16" Frame: | |||
| East | $ | $ | |
| Central | |||
| West | |||
| Total | $ | ||
| Total revenue from sales | $ | ||
In: Accounting
QUESTION 1 Required: #1. Prepare journal entries to record the December transactions in the General Journal Tab in the excel template file "Accounting Cycle Excel Template.xlsx". Use the following accounts as appropriate: Cash, Accounts Receivable, Supplies, Prepaid Insurance, Equipment, Accumulated Depreciation, Accounts Payable, Wages Payable, Common Stock, Retained Earnings, Dividends, Service Revenue, Depreciation Expense, Wages Expense, Supplies Expense, Rent Expense, and Insurance Expense. 1-Dec Began business by depositing $8500 in a bank account in the name of the company in exchange for 850 shares of $10 per share common stock. 1-Dec Paid the rent for the current month, $1250 . 1-Dec Paid the premium on a one-year insurance policy, $1320 . 1-Dec Purchased Equipment for $3600 cash. 5-Dec Purchased office supplies from XYZ Company on account, $300 . 15-Dec Provided services to customers for $8400 cash. 16-Dec Provided service to customers ABC Inc. on account, $7000 . 21-Dec Received $3000 cash from ABC Inc., customer on account. 23-Dec Paid $170 to XYZ company for supplies purchased on account on December 5 . 28-Dec Paid wages for the period December 1 through December 28, $5040 . 30-Dec Declared and paid dividend to stockholders $200 . #2. Post all of the December transactions from the “General Journal” tab to the T-accounts under the “T-Accounts” tab in the excel template file "Accounting Cycle Excel Template.xlsx". Assume there are no beginning balances in any of the accounts. #3. Compute the balance for each T-account after all of the entries have been posted. These are the unadjusted balance as of December 31. #4. Prepare the unadjusted trial balance under the “Unadjusted Trial Balance” tab in the excel template file "Accounting Cycle Excel Template.xlsx" . Provide the total of the credit column from the Unadjusted Trial Balance #5. Record the following four transactions as adjusting entries under the “General Journal” tab. 31-Dec One month’s insurance has been used by the company $110. 31-Dec The remaining inventory of unused office supplies is $90. 31-Dec The estimated depreciation on equipment is $60. 31-Dec Wages incurred from December 29 to December 31 but not yet paid or recorded total $540. #6. Post all of the adjusting entries to the T-accounts under the “T-Accounts” tab. Compute the balance for each T-account after all of the adjusting entries have been posted. These are the adjusted balance as of December 31. #7. Prepare the adjusted trial balance under the “Adjusted Trial Balance” tab as of December 31 in the excel template file "Accounting Cycle Excel Template.xlsx" . Provide the following accounts balances from the Adjusted Trial Balance: Cash Accounts Receivable Supplies Prepaid Insurance Equipment Accumulated Depreciation Accounts Payable Wages Payable Common Stock Retained Earnings #8. Prepare Income Statement, Statement of Stockholder’s Equity, and Classified Balance Sheet under the “Financial Statements” tab for the month ended December 31, 20XX in the excel template file "Accounting Cycle Excel Template.xlsx". Provide the following amount from the Income Statement: Service Revenue Depreciation Expense Wages Expense Supplies Expense Rent Expense Insurance Expense Net Income Provide the following account balance from the Statement of Stockholders' Equity: Dividends Provide the following account balances from the Balance Sheet: Current Assets Long-Term Assets Total Liabilities Total Stockholder’s Equity Cash #9. Record the closing entries under the “General Journal” tab. #10. Post all of the closing entries to the T-accounts under the “T-Accounts” tab. Compute the balance for each T-account after all of the closing entries have been posted. Provide the ending balance of Cash at December 31 from the T-account Provide the balance of the Retained Earnings T-account after closing entries have been posted. Does the ending balance of the Retained Earnings T-account agree with the balance of Retained Earnings on the Balance Sheet? Check Point: Total Assets $ 17,160.00 just need 8,9,10.
In: Accounting