Accounting for Bonds Payable On January 1, 2015, Crabb & Co. issued 10-year bonds with a total face value of $500,000. The bond requires annual interest payments on December 31 at a stated rate of 6%. Bonds with similar features are discounted in the market at 8%

.1. DATE ACCOUNT NAME DEBIT CREDIT BALANCE SHEET INCOME STMT A = L + E R - E 01/01/15

2.Prepare the entry at 12/31/15 to record interest expense, cash paid, and discount amortization. DATE ACCOUNT NAME DEBIT CREDIT BALANCE SHEET INCOME STMT A = L + E R - E 12/31/15

Laker Company reported the following January purchases and sales data for its only product. Date Activities Units Acquired at Cost Units sold at Retail Jan. 1 Beginning inventory 230 units @ $ 15.50 = $ 3,565 Jan. 10 Sales 180 units @ $ 24.50 Jan. 20 Purchase 190 units @ $ 14.50 = 2,755 Jan. 25 Sales 220 units @ $ 24.50 Jan. 30 Purchase 360 units @ $ 14.00 = 5,040 Totals 780 units $ 11,360 400 units The Company uses a perpetual inventory system. For specific identification, ending inventory consists of 380 units, where 360 are from the January 30 purchase, 5 are from the January 20 purchase, and 15 are from beginning inventory. Exercise 5-4 Perpetual: Income effects of inventory methods LO A1 Required: 1. Complete comparative income statements for the month of January for Laker Company for the four inventory methods. Assume expenses are $2,150, and that the applicable income tax rate is 40%. (Round your Intermediate calculations to 2 decimal places.) 2. Which method yields the highest net income?

The following balances have been extracted from the records of Pam Goal’s business as at 30^th July 2020. Pam’s business is called “Honeypot” and she sells cakes and confectionery from a small high street shop.

The following transactions occurred during August 2020:

Required:

1. Prepare the journal entries.
2. Record the transactions in the ledger accounts.
3. Prepare the trial balances as at 31 August 2020.

a company has the following at January 1, 2018

2,000,000 shares of common stock issued and $1 par outstanding 4,000,000 shares authorized

Additional paid in capital $5,750,000

retained earnings $12,345,000

During 2018 the following happened

Net income: $6,789,000

cash dividend declared May 15: $.70 per share

cash dividends paid on Jun 30th

stock dividends declared on November 30th : 17%

stock dividend distributed on 12/31

the market price of the stock has been $36 all year

Prepare journal entries to record cash and stock dividends

prepare a owners equity section of the balance sheet of 12/31/2018

Rock Solid Bank and Trust (RSB&T) offers only checking accounts. Customers can write checks and use a network of automated teller machines. RSB&T earns revenue by investing the money deposited; currently, it averages 6.90 percent annually on its investments of those deposits. To compete with larger banks, RSB&T pays depositors 0.50 percent on all deposits. A recent study classified the bank’s annual operating costs into four activities.

Data on two representative customers follow.

Required:

a. Compute RSB&T's operating profits.

b. Compute the profit from Customer A and Customer B, assuming that customer costs are based only on deposits. Interest costs = 0.50 percent of deposits; operating costs are 4 percent (= $40,500,000/$1,012,500,000) of deposits.

c. Compute the profit from Customer A and Customer B, assuming that customer costs are computed using the information in the activity-based costing analysis.

TSK Corp. operates a document storage company. Scott, the president owns 40% of the stock. In 2018, TSK Corp. had Book Net Income of $800,000.The following items were included in Book Net Income: Dividend income 20,000 Interest income 10,000 Long term capital gain 8,000 Federal tax expense 213,000 Further discussion with Scott revealed the following additional information: The corporation is a calendar year end and uses the accrual method of accounting. The dividends were from a domestic corporation and TSK owns 20 % of this stock. Interest income is from US Treasury Bonds. Book expenses included a $5000 penalty for late payment of Federal taxes, and $12,000 premiums on officer life insurance Book expenses included an estimated bad debt expense of $40,000. Actual bad debt write offs during the year were $19000. Tax depreciation exceeds book depreciation by $14,000. The corporation has a long term capital loss carryover of $10,000 from 2016, On July 1, 2018 TSK Corporation paid a distribution of $120,000 to its shareholders. At December 31, 2017, the corporation had an accumulated deficit in earnings and profits of $ 42,000. Assume a 21% tax rate. Based on the above information compute TSK’s 2018 earnings and profits as of December 31, 2019.

January 1, 2018, a company is authorized to issue 200,000 shares $1.00 par common stock and 5,000 shares $200 par 5% cumulative and non-participating preferred stock. The transactions took place in 2018

Jan 14: issue 5,000 shares of common stock at $17 per share

Feb 2: issue 4,000 shares of preferred stock in exchange for building with a fair market value of $800,000

July 6: Re-purchased 2,000 shares of common stock at $18 per share (cost method)

Aug 15: sold 2,000 of the treasury shares at $19 per share

Dec 31: declared preferred dividends and a common stock dividends of $2.00 per share

Dec 31: close the income summary account ($150,000 of net income)

Prepare Journal entries for each transaction and prepare the statement of changes in OE for the 2018 year end.

If the partners have no partnership agreement specifying how to divide profits and​ losses, then they share profits and losses equally.

B.

The profit sharing is always based on each​ partner's capital balances and any losses will be shared equally.

C.

It is legally required to share the profit and losses​ equally, irrespective of the partnership agreement.

D.

The stated ratio of profit sharing needs to be approved by the SEC.

Convertible Preferred Stock, Convertible Bonds, and EPS

Francis Company has 31,200 shares of common stock outstanding at the beginning of 2016. Francis issued 3,900 additional shares on May 1 and 2,600 additional shares on September 30. It also has two convertible securities outstanding at the end of 2016. These are:

1. Convertible preferred stock: 3,250 shares of 9.0%, $50 par, preferred stock were issued on January 2, 2013, for $60 per share. Each share of preferred stock is convertible into 3 shares of common stock. Current dividends have been declared and paid. To date, no preferred stock has been converted.
2. Convertible bonds: Bonds with a face value of $325000 and an interest rate of 5.0% were issued at par in 2015. Each $1000 bond is convertible into 25 shares of common stock. To date, no bonds have been converted.

Francis earned net income of $79000 during 2016. The income tax rate is 30%.

Required:

1. Compute the number of shares of common stock that Francis should use in calculating basic earnings per share for 2016.

Weighted average shares outstanding:  shares

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2. Calculate basic earnings per share for 2016. If required, round your answer to two decimal places.

Basic earnings per share: $

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3. Calculate diluted earnings per share for 2016 and the incremental EPS of the preferred stock and convertible bonds. If required, round your answers to two decimal places.

Diluted earnings per share: $

Case Study - Budgeting

The Financial Controller of Sunny Limited reported the following comment on the practice of participation in the setting of budgets in his company.

‘We bring in the Supervisors of budget areas, we tell them that we want their frank opinion but most of them just sit there and just nod their heads. We know they are not coming out with exactly how they feel. I guess budgets scare them.’

Required:

Suggest reasons why managers may be reluctant to participate fully in setting budgets and suggest also unwanted side effects which may arise from the imposition of budgets by senior management.

Sunspot Beverages, Ltd., of Fiji uses the weighted-average method in its process costing system. It makes blended tropical fruit drinks in two stages. Fruit juices are extracted from fresh fruits and then blended in the Blending Department. The blended juices are then bottled and packed for shipping in the Bottling Department. The following information pertains to the operations of the Blending Department for June.

5. Prepare a cost reconciliation report for the Blending Department for June.

places.)

1) Identify activities/transactions associated with companies engaged in the development stage.

2) Identify activities/transactions associated with companies engaged in the launch stage.

3) Identify activities/transactions associated with companies engaged in the growth stage.

4) Identify activities/transactions associated with companies engaged in the maturity stage.

5) Identify activities/transactions associated with companies engaged in the decline stage.

6) Explain how companies can be engaged in activities associated with more than one stage.

7) Explain the difference between a) investments/marketable securities, b) equity method investments or joint ventures and c) consolidated entities.

8) Discuss the differences between US GAAP and IFRS in accounting for intercompany investments.

Comparative Earnings per Share

Lucas Company reports net income of $5,125 for the year ended December 31, 2016, its first year of operations. On January 4, 2016, Lucas issued 9,000 shares of common stock. On August 2, 2016, it issued an additional 3,000 shares of stock, resulting in 12,000 shares outstanding at year-end.

During 2017, Lucas earned net income of $16,400. It issued 2,000 additional shares of stock on March 3, 2017, and declared and issued a 2-for-1 stock split on November 3, 2017, resulting in 28,000 shares outstanding at year-end.

During 2018, Lucas earned net income of $23,520. The only common stock transaction during 2018 was a 20% stock dividend issued on July 2, 2018.

If required, round your final answers to two decimal places.

Required:

1. Compute the basic earnings per share that would be disclosed in the 2016 annual report.
   $  per share
2. Compute the 2016 and 2017 comparative basic earnings per share that would be disclosed in the 2017 annual report.
   2017:   $  per share
   2016:   $  per share
3. Compute the 2016, 2017, and 2018 comparative basic earnings per share that would be disclosed in the 2018 annual report.
   2018:   $  per share
   2017:   $  per share
   2016:   $  per share

Lopez Company reported the following current-year data for its only product. The company uses a periodic inventory system, and its ending inventory consists of 360 units—120 from each of the last three purchases.

  
Determine the cost assigned to ending inventory and to cost of goods sold for the following. (Do not round intermediate calculations and round your answers to 2 decimal places.)
  

Which method yields the highest net income?
  

• LIFO

• Specific identification

• FIFO

• Weighted average

Below is a traditional cost-volume–profit graph for Willow, Inc for the month of July. Willow, Inc sells a single product- a specialty chair. The graph is not to scale. cvp graph The points on the graph are as follows: A: (0, 2800) B: (1000,47500) C: (1000, 36000) 1. What is the per unit selling price for each chair? 2. What is the fixed costs for the month of July? 3. What is net income when 1000 chairs are sold? 4. What is the variable cost of one chair?