On April 6, 2018, Home Furnishings purchased $41,000 of merchandise from Una's Imports, terms 3/10 n/45. On April 8, Home Furnishings returned $8,600 of the merchandise to Una's Imports for credit. Home Furnishings paid cash for the merchandise on April 15, 2018.
Required
What is the amount that Home Furnishings must pay Una's Imports on April 15?
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Record the events in a horizontal statements model. In the Cash Flow column, use OA to designate operating activity, IA for investment activity, FA for financing activity, or NC for net change in cash. If the element is not affected by the event, leave the cell blank
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Record the payment of the merchandise in Requirement (c) in a horizontal statements. In the Cash Flow column, use OA to designate operating activity, IA for investment activity, FA for financing activity, NC for net change in cash and NA to indicate the element is not affected by the event.
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In: Accounting
In: Accounting
Presented below is information related to the Accounts
Receivable accounts of Concord Inc. during the current year
2017.
1. An aging schedule of the accounts receivable as
of December 31, 2017, is as follows.
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% to Be Applied after |
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| Under 60 days | $170,300 | 1% | |||
| 60–90 days | 136,400 | 3% | |||
| 91–120 days | 38,500 | * | 5% | ||
| Over 120 days | 23,000 | $3,700 definitely
uncollectible; estimated remainder uncollectible is 24% |
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| $368,200 | |||||
*The $3,200 write-off of receivables is related to the 91-to-120
day category
2. The Accounts Receivable control account has a
debit balance of $368,200 on December 31, 2017.
3. Two entries were made in the Bad Debt Expense
account during the year: (1) a debit on December 31 for the amount
credited to Allowance for Doubtful Accounts, and (2) a credit for
$3,200 on November 3, 2017, and a debit to Allowance for Doubtful
Accounts because of a bankruptcy.
4. Allowance for Doubtful Accounts is as follows
for 2017.
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Allowance for Doubtful Accounts |
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| Nov. 3 | Uncollectible accounts written off | 3,200 | Jan. 1 | Beginning balance | 9,300 | ||||
| Dec. 31 | 5% of $368,200 | 18,410 | |||||||
5. A credit balance exists in the Accounts
Receivable (60–90 days) of $4,700, which represents an advance on a
sales contract.
Assuming that the books have not been closed for 2017, make the
necessary correcting entries.
In: Accounting
Question text
Accounting for
Shareholders' Equity Transactions
The shareholders' equity section of the balance sheet of The
Claremont Company appeared as follows at the end of the first year
of operations:
| Common stock, $0.08 par value | $480,000 |
| Additional paid-in-capital | 71,520,000 |
| Retained earnings | 25,600,000 |
| Treasury stock | (6,000,000) |
| Shareholders' equity | $91,600,000 |
During the second year of operations, the following transactions occurred:
Prepare the shareholders' equity section of the balance sheet of Claremont Company at the end of the second year of operations.
Use a negative sign with treasury stock answer.
| The Claremont
Company Stockholders' Equity December 31, Year 2 |
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|---|---|
| Common stock, par value | $Answer |
| Additional paid-in-capital | Answer |
| Retained earnings | Answer |
| Treasury stock | Answer |
| Total shareholders' equity | $Answer |
In: Accounting
Evergreen Company sells lawn and garden products to wholesalers.
The company's fiscal year-end is December 31. During 2021, the
following transactions related to receivables occurred:
| Feb. | 28 |
Sold merchandise to Lennox, Inc., for $12,000 and accepted a 8%, 7-month note. 8% is an appropriate rate for this type of note. |
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| Mar. | 31 |
Sold merchandise to Maddox Co. that had a fair value of $7,452, and accepted a noninterest-bearing note for which $8,100 payment is due on March 31, 2022. |
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| Apr. | 3 |
Sold merchandise to Carr Co. for $7,100 with terms 3/10, n/30. Evergreen uses the gross method to account for cash discounts. |
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| 11 | Collected the entire amount due from Carr Co. | |||
| 17 | A customer returned merchandise costing $3,300. Evergreen reduced the customer’s receivable balance by $5,100, the sales price of the merchandise. Sales returns are recorded by the company as they occur. | |||
| 30 | Transferred receivables of $51,000 to a factor without recourse. The factor charged Evergreen a 2% finance charge on the receivables transferred. The sale criteria are met. | |||
| June | 30 |
Discounted the Lennox, Inc., note at the bank. The bank’s discount rate is 10%. The note was discounted without recourse. |
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| Sep. | 30 | Lennox, Inc., paid the note amount plus interest to the bank. |
Required:
1. Prepare the necessary journal entries for
Evergreen for each of the above dates. For transactions involving
the sale of merchandise, ignore the entry for the cost of goods
sold.
2. Prepare any necessary adjusting entries at
December 31, 2021. Adjusting entries are only recorded at
year-end.
3. Prepare a schedule showing the effect of the
journal entries on 2021 income before taxes.
In: Accounting
Complete a Schedule of Cost of Goods Manufactured and a Manufacturing Company Income statement. Use the Cost of Goods Manufactured that was developed in the Schedule of Cost of Goods Statement in the income statement.
Jan-Feb
Cost of Goods Manufactured Data 170000
Direct labor 20200
Depreciation 350300
Purchases of direct material 80175
Beginning work-in-process 65200
Ending direct materials 17750
Indirect materials 18575
Plant utilities, insurance and Property taxes 27100
Ending work-in-process 70025
Beginning direct materials 29500
Indirect labor
Manufacturing Income Statement Data 1001000
Net sales revenue 53500
Income taxes 250
Beginning finished goods 5300
Supplies expense 60425
Ending finished goods inventory 660375
Cost of goods manufactured 120125
Wage expense 6750
Depreciation expense 100025
Rent expense 10075
Insurance expense
In: Accounting
At the beginning of 2018, the Redd Company had the following balances in its accounts:
| Cash | $ | 8,300 | |
| Inventory | 2,300 | ||
| Common stock | 7,800 | ||
| Retained earnings | 2,800 | ||
During 2018, the company experienced the following events:
Purchased inventory that cost $5,800 on account from Redd Company under terms 2/10, n/30. The merchandise was delivered FOB shipping point. Freight costs of $530 were paid in cash.
Returned $300 of the inventory that it had purchased because the inventory was damaged in transit. The seller agreed to pay the return freight cost.
Paid the amount due on its account payable to Redd Company within the cash discount period.
Sold inventory that had cost $6,300 for $9,300 on account, under terms 2/10, n/45.
Received merchandise returned from a customer. The merchandise originally cost $530 and was sold to the customer for $830 cash. The customer was paid $830 cash for the returned merchandise.
Delivered goods FOB destination in Event 4. Freight costs of $630 were paid in cash.
Collected the amount due on the account receivable within the discount period.
Took a physical count indicating that $2,000 of inventory was on hand at the end of the accounting period.
c-1. Prepare a multistep income statement.
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c-2. Prepare a statement of changes in stockholders’ equity.
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c-3. Prepare a balance sheet.
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Prepare a statement of cash flows. (Enter cash outflows as negative amounts.)
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In: Accounting
Would the market-value debt ratio tend to be higher than the book-value debt ratio during a stock market boom or a recession? Explain.
Why would the WACC based on market values tend to be higher than
the one based on book values if the stock price exceeded its book
value?
Which would you expect to be more stable over time, a firm’s
book-value or market-value capital structure? Explain.
In: Accounting
The following events were completed by Dana’s Imports in September 2018:
| Sept. | 1 | Acquired $54,000 cash from the issue of common stock. |
| 1 | Purchased $35,000 of merchandise on account with terms 2/10, n/30. | |
| 5 | Paid $1,000 cash for freight to obtain merchandise purchased on September 1. | |
| 8 | Sold merchandise that cost $12,500 to customers for $18,000 on account, with terms 2/10, n/30. | |
| 8 | Returned $1,100 of defective merchandise from the September 1 purchase to the supplier. | |
| 10 | Paid cash for the balance due on the merchandise purchased on September 1. | |
| 20 | Received cash from customers of September 8 sale in settlement of the account balances, but not within the discount period. | |
| 30 | Paid $3,450 cash for selling expenses. |
Required
Record each event in a statements model like the following one. In the Cash Flow column, use OA to designate operating activity, IA for investment activity, FA for financing activity, or NC for net change in cash. If the element is not affected by the event, leave the cell blank. The first event is recorded as an example.
Prepare an income statement for the month ending September 30.
Prepare a statement of cash flows for the month ending September 30.
A.
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B.
Prepare an income statement for the month ending September 30.
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C.
Prepare a statement of cash flows for the month ending September 30. (Enter cash outflows as negative amounts.)
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In: Accounting
Q1
The following trial balance was extracted from the books of ABC Store on 31 December 20x5.
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DR |
CR |
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$ |
$ |
|
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Sales |
223,940 |
|
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Returns inwards |
1, 900 |
|
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Returns outwards |
970 |
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Discount allowed |
800 |
|
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Discount received |
2,970 |
|
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Purchases |
80,100 |
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Stock |
56,000 |
|
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Rent and rates |
60,500 |
|
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Electricity |
5,800 |
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Debtors |
45,700 |
|
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Creditors |
29,750 |
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Bank |
110,450 |
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Motor vehicle at cost |
100,000 |
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Accumulated depreciation for motor vehicle |
30,000 |
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Provision for doubtful debts |
5,420 |
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Other expenses |
7,500 |
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Capital |
185,200 |
|
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Drawings |
9,500 |
________ |
|
478,250 |
478,250 |
The following additional information is provided:
1. Rent of $5,000 is prepaid.
2. Electricity of $650 and other expenses of $780 are accrued.
3. The depreciation charge for motor vehicle for the year is $10,000.
4. The proprietor took $12,000 cash and $1,000 worth of goods for own use. No entry was made in the books in respect of this.
5. The closing stock is $12,000.
6. Bad debts of $9,550 are to be written off.
7. A provision for doubtful debts of 10% is to be made on the remaining debtors’ balance.
Required:
Prepare the income statement of ABC Store for the year to 31 December 20x5 and the balance sheetas at that date.In: Accounting
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4/01/17 |
Alex contributed $10,000 cash; two computers with the fair value of $2,500 and an old truck fully paid with the fair value of $9,600 (remaining useful life of 4 years and SV of $2,000). |
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4/01/17 |
The same day, he bought a lawnmower machine for $5,000 putting down, $2,000 cash and the rest on Accounts payable to be paid by May 31, 2017. |
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4/01/17 |
Rented a small office building for operation and paid 3 months’ rent in advance for $4,500 (to be recorded as Prepaid rent) |
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4/02/17 |
Contracted local advertising agency for a 3 months prepaid advertising plan of $1,200. |
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4/02/17 |
Hired a receptionist/bookkeeper (Mary K) with a salary of $600 per two weeks, (30 hours of work each week) |
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4/05/17 |
Alex has signed a 90 days note with the Local First VA bank for $10,000 and annual interest rate of %5. This loan requires Alex to submit the financial statements at the end of each month, starting April 30. |
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4/05/17 |
Alex signed a contract with a large hotel to provide landscaping services for period of April-September and collected 6,000 in advance to be recorded evenly over the period. |
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4/15/17 |
Recorded and paid salary to Mary K for two weeks. |
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4/15/17 |
In response to first 2 residential calls for service, Alex completed the lawn services and customers were billed to pay by 4/25/17 for the amount of $120. |
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4/25/17 |
Alex worked on 3 customers’ lawns, who paid the fee for the services in cash: $180.00 |
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4/29/17 |
Recorded and paid salary to Mary K for another two weeks. |
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4/30/17 |
Alex withdrew $1,000 for personal expenses. |
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4/30/17 |
Mary K. recorded all necessary adjusting entries for the month end. |
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4/30/17 |
Submitted a copy of the financial statements to the Bank in compliance with the Loan’s provisions. |
Utilizing the Working paper provided to you on the Moodle, complete the following tasks in class:
In: Accounting
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Total Units for information given |
7000 |
|
Fixed Cost per Unit |
$200 |
|
Selling Price per Unit |
$325 |
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Variable Costs per Unit |
$225 |
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Target Operating Income |
$100,000 |
In: Accounting
Paymore Products places orders for goods equal to 75% of its sales forecast in the next quarter which has been provided in the below table.
| Quarter in Coming Year | Following Year | |||||
| First | Second | Third | Fourth | First Quarter | ||
| Sales forecast | $388 | $360 | $342 | $390 | $390 | |
Paymore’s labor and administrative expenses are $71 per quarter and interest on long-term debt is $46 per quarter. Paymore’s cash balance at the start of the first quarter is $40 and its minimum acceptable cash balance is $30. Assume that Paymore can borrow up to $342 from a line of credit at an interest rate of 2% per quarter. On average, one-third of sales are collected in the quarter that they are sold, and two-thirds are collected in the following quarter. Assume that sales in the last quarter of the previous year were $342. Also, one third of the orders are paid for in the current month and then two thirds of the next quarter's orders are paid in advance. Prepare a short-term financing plan using the above table. (Leave no cells blank. Enter '0' when necessary. Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers in millions of dollars rounded to 2 decimal places.)
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In: Accounting
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On 1 December 2013, John and Patty Driver formed a corporation called Susquehanna Equipment Rentals. The new corporation was able to begin operations immediately by purchasing the assets and taking over the location of Rent-It, an equipment rental company that was going out of business. The newly formed company uses the following accounts: |
| Cash | Share Capital |
| Accounts Receivable | Retained Earnings |
| Prepaid Rent | Dividends |
| Unexpired Insurance | Income Summary |
| Office Supplies | Rental Fees Earned |
| Rental Equipment | Salaries Expense |
| Accumulated Depreciation: Rental Equipment | Maintenance Expense |
| Notes Payable | Utilities Expense |
| Accounts Payable | Rent Expense |
| Interest Payable | Office Supplies Expense |
| Salaries Payable | Depreciation Expense |
| Dividends Payable | Interest Expense |
| Unearned Rental Fees | Income Taxes Expense |
| Income Taxes Payable |
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The corporation performs adjusting entries monthly. Closing entries are performed annually on 31 December. During December, the corporation entered into the following transactions: |
| Dec. | 1 |
Issued to John and Patty Driver 30,000 new shares in exchange for a total of $300,000 cash. |
| Dec. | 1 |
Purchased for $220,800 all of the equipment formerly owned by Rent-It. Paid $139,000 cash and issued a one-year note payable for $81,800. The notes, plus all 12-months of accrued interest, are due 30 November 2013. |
| Dec. | 1 |
Paid $10,500 to Shapiro Realty as three months’ advance rent on the rental yard and office formerly occupied by Rent-It. |
| Dec. | 4 |
Purchased office supplies on account from Modern Office Co., $1,400. Payment due in 30 days. (These supplies are expected to last for several months; debit the Office Supplies asset account.) |
| Dec. | 8 |
Received $8,900 cash as advance payment on equipment rental from McNamer Construction Company. (Credit Unearned Rental Fees.) |
| Dec. | 12 | Paid salaries for the first two weeks in December, $5,000. |
| Dec. | 15 |
Excluding the McNamer advance, equipment rental fees earned during the first 15 days of December amounted to $18,000, of which $12,200 was received in cash. |
| Dec. | 17 |
Purchased on account from Earth Movers Limited, $600 in parts needed to repair a rental tractor. (Debit an expense account.) Payment is due in 10 days. |
| Dec. | 23 | Collected $2,600 of the accounts receivable recorded on15 December. |
| Dec. | 26 |
Rented a backhoe to Mission Landscaping at a price of $330 per day, to be paid when the backhoe is returned. Mission Landscaping expects to keep the backhoe for about two or three weeks. |
| Dec. | 26 | Paid biweekly salaries, $5,000. |
| Dec. | 27 | Paid the account payable to Earth Movers Limited, $600. |
| Dec. | 28 | Declared a dividend of 10 cents per share, payable on 15 January 2014. |
| Dec. | 29 |
Susquehanna Equipment Rentals was named, along with Mission Landscaping and Collier Construction, as a co-defendant in a $26,000 lawsuit filed on behalf of Kevin Davenport. Mission Landscaping had left the rented backhoe in a fenced construction site owned by Collier Construction. After working hours on 26 December, Davenport had climbed the fence to play on parked construction equipment. While playing on the backhoe, he fell and broke his arm. The extent of the company’s legal and financial responsibility for this accident, if any, cannot be determined at this time. ( Note: This event does not require a journal entry at this time, but may require disclosure in notes accompanying the statements.) |
| Dec. | 29 |
Purchased a 12-month public-liability insurance policy for $8,400. This policy protects the company against liability for injuries and property damage caused by its equipment. However, the policy goes into effect on 1 January 2014, and affords no coverage for the injuries sustained by Kevin Davenport on 26 December. |
| Dec. | 31 |
Received a bill from Universal Utilities for the month of December, $690. Payment is due in 30 days. |
| Dec. | 31 |
Equipment rental fees earned during the second half of December amounted to $20,200, of which $16,300 was received in cash. |
| Data for Adjusting Entries |
| a. | The advance payment of rent on 1 December covered a period of three months. |
| b. | The annual interest rate on the note payable to Rent-It is 6 percent. |
| c. | The rental equipment is being depreciated by the straight-line method over a period of eight years. |
| d. | Office supplies on hand at 31 December are estimated at $670. |
| e. |
During December, the company earned $4,600 of the rental fees paid in advance by McNamer Construction Co.on 8 December. |
| f. |
As of 31 December, six days’ rent on the backhoe rented to Mission Landscaping on 26 December has been earned. |
| g. |
Salaries earned by employees since the last payroll date (26 December) amounted to $1,800 at month-end. |
| h. |
It is estimated that the company is subject to an income tax rate of 30 percent of profit before income taxes (total revenue minus all expenses other than income taxes). These taxes will be payable in 2014. |
|
Prepare closing entries and post to ledger accounts. (Do not round intermediate calculations. Omit the "$" sign in your response.) |
| Date | General Journal | Debit | Credit |
| Dec. 31 | (Click to select)Rent expenseIncome summarySalaries expenseUtilities expenseRent fees earnedOffice supplies expenseMaintenance expenseAccounts payableDividendsIncome taxes expense | ||
| (Click to select)Utilities expenseAccounts payableDividendsRent fees earnedMaintenance expenseSalaries expenseOffice supplies expenseIncome taxes expenseRent expenseIncome summary | |||
| 31 | (Click to select)Depreciation expenseInterest expenseOffice supplies expenseRent expenseAccounts payableUtilities expenseMaintenance expenseIncome taxes expenseSalaries expenseIncome summary | ||
| (Click to select)Salaries expenseDepreciation expenseUtilities expenseIncome taxes expenseMaintenance expenseOffice supplies expenseRent expenseInterest expenseDividendsIncome summary | |||
| (Click to select)Salaries expenseOffice supplies expenseDepreciation expenseDividendsRent expenseIncome summaryMaintenance expenseIncome taxes expenseInterest expenseUtilities expense | |||
| (Click to select)Rent expenseUtilities expenseIncome taxes expenseDepreciation expenseSalaries expenseInterest expenseDividendsMaintenance expenseIncome summaryOffice supplies expense | |||
| (Click to select)Maintenance expenseDividendsSalaries expenseInterest expenseDepreciation expenseUtilities expenseIncome summaryOffice supplies expenseIncome taxes expenseRent expense | |||
| (Click to select)Rent expenseMaintenance expenseOffice supplies expenseInterest expenseSalaries expenseIncome summaryUtilities expenseDividendsDepreciation expenseIncome taxes expense | |||
| (Click to select)Income summaryMaintenance expenseInterest expenseIncome taxes expenseUtilities expenseSalaries expenseDepreciation expenseOffice supplies expenseRent expenseDividends | |||
| (Click to select)Utilities expenseDepreciation expenseOffice supplies expenseRent expenseInterest expenseDividendsMaintenance expenseIncome taxes expenseIncome summarySalaries expense | |||
| (Click to select)Income taxes expenseSalaries expenseDepreciation expenseInterest expenseDividendsOffice supplies expenseIncome summaryRent expenseUtilities expenseMaintenance expense | |||
| 31 | (Click to select)Salaries payableNotes payableDepreciation expenseRent expenseIncome summaryInterest expenseIncome taxes expenseRetained earningsAccounts receivableAccounts payable | ||
| (Click to select)Salaries payableRetained earningsInterest expenseRent expenseAccounts receivableIncome taxes expenseIncome summaryNotes payableDepreciation expenseAccounts payable | |||
| 31 | (Click to select)Interest expenseUtilities expenseMaintenance expenseDepreciation expenseRetained earningsSalaries expenseDividendsOffice supplies expenseRent expenseIncome taxes expense | ||
| (Click to select)Interest expenseRetained earningsSalaries expenseMaintenance expenseIncome taxes expenseDepreciation expenseUtilities expenseOffice supplies expenseDividendsRent expense | |||
In: Accounting
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A small firm intends to increase the capacity of a bottleneck operation by adding a new machine. Two alternatives, A and B, have been identified, and the associated costs and revenues have been estimated. Annual fixed costs would be $36,000 for A and $31,000 for B; variable costs per unit would be $8 for A and $11 for B; and revenue per unit would be $16. |
| a. | Determine each alternative’s break-even point in units. (Round your answer to the nearest whole amount.) |
| QBEP,A | units |
| QBEP,B | units |
| b. | At what volume of output would the two alternatives yield the same profit? (Round your answer to the nearest whole amount.) |
| Profit | units |
| c. | If expected annual demand is 11,000 units, which alternative would yield the higher profit? |
| Higher profit | (Click to select)BA |
In: Accounting