Questions
On Jan 1, 2018, Rising Star purchased a crane for $ 1,200,000 and paid $200,000 as...

On Jan 1, 2018, Rising Star purchased a crane for $ 1,200,000 and paid $200,000 as a downpyament while the balance will be paid over the next five years in installments of $100,000 every six months , starting July 1, 2018. The market rate on Jan 1, 2018 was 9%.

Requirements:
a.   For the how much the company should recognize the crane on Jan 1, 2018? Show your calculation along with your accounting entry to recognize the purchase of the crane.
b.   On Jan 1, 2020, the company will pay installment payment of $100,000. How much of this payment represents a payment of the principal and how much of it represents a payment of the interest? Show your calculation (fill in the following table Jan 1 2018 – Jan 2020).

Date

Cash Paid

Interest Exp.

P Payment

Carrying Value

1-Jan-18

$            -  

$              -  

$               -  

$         ………….

1-Jul-18

1-Jan-19

1-Jul-19

1-Jan-20

c.   What is the total interest expense for the year ended on Dec 31, 2018?
d.   What will be the carrying value of the notes on Dec 31, 2019?

In: Accounting

Problem 2-2A Julia Dumars is a licensed CPA. During the first month of operations of her...

Problem 2-2A Julia Dumars is a licensed CPA. During the first month of operations of her business, Julia Dumars, Inc., the following events and transactions occurred. May 1 Stockholders invested $22,700 cash in exchange for common stock. 2 Hired a secretary-receptionist at a salary of $1,200 per month. 3 Purchased $2,560 of supplies on account from Vincent Supply Company. 7 Paid office rent of $760 cash for the month. 11 Completed a tax assignment and billed client $2,400 for services performed. 12 Received $3,120 advance on a management consulting engagement. 17 Received cash of $1,310 for services performed for Orville Co. 31 Paid secretary-receptionist $1,200 salary for the month. 31 Paid 48% of balance due Vincent Supply Company. Julia uses the following chart of accounts: No. 101 Cash, No. 112 Accounts Receivable, No. 126 Supplies, No. 201 Accounts Payable, No. 209 Unearned Service Revenue, No. 311 Common Stock, No. 400 Service Revenue, No. 726 Salaries and Wages Expense, and No. 729 Rent Expense.

1. Journalize the transactions. 2. Post to the ledger accounts. 3. Prepare a trial balance on May 31, 2015. JULIA DUMARS, INC. Trial Balance May 31, 2015

In: Accounting

Gallatin Carpet Cleaning is a small, family-owned business operating out of Bozeman, Montana. For its services,...

Gallatin Carpet Cleaning is a small, family-owned business operating out of Bozeman, Montana. For its services, the company has always charged a flat fee per hundred square feet of carpet cleaned. The current fee is $23.70 per hundred square feet. However, there is some question about whether the company is actually making any money on jobs for some customers—particularly those located on remote ranches that require considerable travel time. The owner’s daughter, home for the summer from college, has suggested investigating this question using activity-based costing. After some discussion, she designed a simple system consisting of four activity cost pools. The activity cost pools and their activity measures appear below:

Activity Cost Pool Activity Measure Activity for the Year
Cleaning carpets Square feet cleaned (00s) 14,500 hundred square feet
Travel to jobs Miles driven 138,000 miles
Job support Number of jobs 1,800 jobs
Other (organization-sustaining costs and idle capacity costs) None Not applicable

The total cost of operating the company for the year is $353,000 which includes the following costs:

Wages $ 139,000
Cleaning supplies 26,000
Cleaning equipment depreciation 14,000
Vehicle expenses 29,000
Office expenses 68,000
President’s compensation 77,000
Total cost $ 353,000

Resource consumption is distributed across the activities as follows:

Distribution of Resource Consumption Across Activities
Cleaning Carpets Travel to Jobs Job Support Other Total
Wages 77 % 12 % 0 % 11 % 100 %
Cleaning supplies 100 % 0 % 0 % 0 % 100 %
Cleaning equipment depreciation 66 % 0 % 0 % 34 % 100 %
Vehicle expenses 0 % 76 % 0 % 24 % 100 %
Office expenses 0 % 0 % 56 % 44 % 100 %
President’s compensation 0 % 0 % 30 % 70 % 100 %

Job support consists of receiving calls from potential customers at the home office, scheduling jobs, billing, resolving issues, and so on.

Required:

1. Prepare the first-stage allocation of costs to the activity cost pools.

2. Compute the activity rates for the activity cost pools.

3. The company recently completed a 200 square foot carpet-cleaning job at the Flying N Ranch—a 59-mile round-trip journey from the company’s offices in Bozeman. Compute the cost of this job using the activity-based costing system.

4. The revenue from the Flying N Ranch was $47.40 (200 square feet @ $23.70 per hundred square feet). Calculate the customer margin earned on this job.

In: Accounting

Question 1 The following are independent situations. Required For each of the two independent situations, identify...

Question 1

The following are independent situations. Required For each of the two independent situations, identify two control weaknesses, and explain the implications of these weaknesses for the company’s accounting records. (4 marks for each situation). Prepare your answer in the following format:

Internal Control Weakness

Implication for Company’s Accounting Records

(Example only — no marks)

The store does not use serially pre-numbered sales invoices.

Sales invoices could be lost or omitted and sales would be understated.

(Example only — no marks) Employees are not bonded.

No implication for company’s records (implication for risk of loss)

Situation 1

A finance company derives a large part of its business from financing retail purchases of furniture and electronic items, with terms generally over 2 or 3 years. Each day, there is a large volume of mail to process, which contains cheques, money orders, and customer correspondence. An account associate opens the mail, sorts the contents into payments or correspondence, and then prepares a payment listing. The account associate takes the cheques to the bank for deposit, but the payment listing is given to a separate person to enter into the computer. The manager spot-checks the total deposited in the bank to the payment listing to ensure that all funds are deposited. All cheques for purchases over $15,000 must be approved by 2 supervisory personnel. Given the small size of the office, this includes only the manager, the assistant manager, and the accountant. This restricts the number of signees who may be on vacation at any one time and creates a problem when one or, especially, two of these people are away from the office on business trips. The staff eventually came up with a win-win solution, based on the petty cash concept. The office manager keeps a cash box locked in her desk, containing three blank cheques, each one signed by one (but only one) of the three designated signees. When a cheque is needed and there aren’t two people with signing authority there to sign it, the office manager or her assistant has the available signee approve the amount and payee, and then sign the cheque to complete the control procedure.

Situation 2

Occasionally, the plant manager for a paper products manufacturer makes a deal with a supplier, presumably to get a good discount, and instructs the accounting staff to prepare a cheque in a hurry without the normal purchase order documentation that is supposed to be attached to the cheque stub. This allows the plant to have a just-in-time system for purchasing when a bargain is available from a supplier. Unfortunately, this also means that the regular purchase order may not be prepared and sent to the shipper/receiver in time for the goods, so the accounting department has to manually prepare a receiver’s memo with the information that is normally on a regular purchase order (e.g., description of goods, supplier’s name, quantity purchased) to let the shipper/receiver know that goods will be arriving for which the regular documentation may not be ready in time.

In: Accounting

Part 1 Prior to closing, Syracuse Company's accounting records showed the following balances: Retained earnings$16,800 Service...

Part 1

Prior to closing, Syracuse Company's accounting records showed the following balances:

Retained earnings$16,800 Service revenue 21,750 Interest revenue 1,800 Salaries expense 12,300 Operating expense 3,450 Interest expense 900 Dividends 2,700

After closing, Syracuse's retained earnings balance would be?

Part 2

Revenue on account amounted to $9,000. Cash collections of accounts receivable amounted to $8,100. Cash paid for expenses was $7,500. The amount of employee salaries accrued at the end of the year was $900. Cash flow from operating activities was

A)900

B)600

C)1500

D)8700

Part 3

The purpose of the accrual basis of accounting is to:

Match assets and liabilities in the proper period.

Report expenses when cash disbursements are made.

Report revenue when received.

Match revenues and expenses in the proper period.

Part 4

Earning revenue on account would be classified as a/an?

claims exchange transaction.

asset use transaction.

asset source transaction.

asset exchange transaction.

Part 5

Which of the following describes the effects of a claims exchange transaction on a company's financial statements?

Assets = Liab. + Equity Rev. - Exp. = Net Inc. Cash Flow
A. NA = NA + NA NA - NA = NA +OA
B. + = + + NA NA - NA = NA +OA
C. NA = + + - NA - + = - NA
D. All of these could represent the effects of a claims exchange transaction.

A) option A

B)option B

C) option C

D)option D

In: Accounting

CHAPTER 8: FINANCIAL PLANNING & BUDGETING Homework 3.4, Chapter8 Chelsea Clinic projected the following budget information...

CHAPTER 8: FINANCIAL PLANNING & BUDGETING

Homework 3.4, Chapter8

Chelsea Clinic projected the following budget information for 2021:

Total FFS Visits Volume

70,000

visits

Payer Mix:

   Blue Cross

60%

   Highmark

40%

Reimbursement Rates:

   Blue Cross

$45

per visit

   Highmark

$50

per visit

Variable Costs

    Resource Inputs:

        Labor

0.7

total hours

        Supplies

1.3

total units

    Resource Input Prices:

        Labor

$22.00

per hour

        Supplies

$1.25

per unit

Fixed Costs

$800,000

Using Exhibit 8.3 as a guide (excluding the capitated numbers since payers in this homework problem are all FFS) construct Chelsea Clinic's operating budget for 2021, including projections for volume, revenues, costs, and a P&L statement

In: Accounting

As of December 31, 2016, the accounts of the Middletown Youth Center contained the following balances:...

As of December 31, 2016, the accounts of the Middletown Youth Center contained the following balances:

Accounts payable $13,520
Cash 126,500
Furniture and equipment, net of accumulated depreciation of $160,000 50,000
Inventory 2,800
Investments 178,000
Permanently restricted net assets 100,000
Temporarily restricted net assets 76,600
Unrestricted net assets 167,180

During 2017, the following activities took place:

  1. Unrestricted contributions of $395,000 and temporarily restricted contributions of $50,000 were received in cash.
  2. Investment income in the form of interest was received in the amount of $7,200.
  3. Temporarily restricted net assets of $10,000 were released from their restrictions due to meeting the donor’s requirements.
  4. The following expenses were incurred. All but $4,000 were paid in cash:
    1. Counseling services       139,976
    2. Professional training        55,116
    3. Community service          38,144
    4. General administration    91,060
    5. Fundraising                      38,144

    Total                 362,440

  5. Additional equipment of $22,000 was purchased by paying $7,000 down and issuing a note payable for the rest.
  6. Depreciation expense of $5,000 was recorded and allocated as follows: 50% to general administration, 20% to professional training, and 10% each to counseling services, community service, and fundraising.
  7. All outstanding accounts payable at the beginning of the year were paid.
  8. Inventory and investments remained unchanged during the year.

Instructions

Use the Excel template for Question 41 that you downloaded from this module to prepare a statement of activities for the year ended December 31, 2017. In addition, discuss how the new accounting standards (ASC 958) could impact this statement.

Formatting Example
City of Mayberry
Statement of Activities
For the Year Ended December 31, 2017
Unrestricted Temporarily Restricted Permanently Restricted Total
Revenues
Contributions $       485,000.00 $         51,611.00 $       536,611.00
Investment Income $           9,522.00 $           9,522.00
Total Revenues $       494,522.00 $         51,611.00 $       546,133.00

In: Accounting

Power Drive Corporation designs and produces a line of golf equipment and golf apparel. Power Drive...

Power Drive Corporation designs and produces a line of golf equipment and golf apparel. Power Drive has 100,000 shares of common stock outstanding as of the beginning of 2018. Power Drive has the following transactions affecting stockholders’ equity in 2018.


March 1 Issues 46,000 additional shares of $1 par value common stock for $43 per share.

May 10 Purchases 4,100 shares of treasury stock for $46 per share.

June 1 Declares a cash dividend of $1.05 per share to all stockholders of record on June 15. (Hint: Dividends are not paid on treasury stock.)

July 1 Pays the cash dividend declared on June 1.

October 21 Reissues 2,050 shares of treasury stock purchased on May 10 for $51 per share.


Power Drive Corporation has the following beginning balances in its stockholders’ equity accounts on January 1, 2018: Common Stock, $100,000; Additional Paid-in Capital, $3,600,000; and Retained Earnings, $1,100,000. Net income for the year ended December 31, 2018, is $510,000.

Prepare the stockholders’ equity section of the balance sheet for Power Drive Corporation as of December 31, 2018 and answer the following questions.

a) Determine the amount of common stock to be reported on the December 31 balance sheet.

b) Determine the amount of additional paid-in capital to be reported on the December 31 balance sheet.

c) Determine the amount of total paid-in capital to be reported on the December 31 balance sheet.

d) Determine the amount of total stockholders’ equity to be reported on the December 31 balance sheet.

In: Accounting

CASE QUESTIONS 1.Why does a country like Venezuela impose capital controls? 2.In the case of Venezuela,...

CASE QUESTIONS
1.Why does a country like Venezuela impose capital controls?
2.In the case of Venezuela, what is the difference between the gray market and the black market?
3.Create a financial analysis of Santiago’s choices. Use it to recommend a solution to his problem.

In: Accounting

We also had income from some investments. We received interest and dividends from a few places....

We also had income from some investments. We received interest and dividends from a few places. Can you tell me if those are reported on a 1099 form? If so, I may have to request this from my bank. We own our home and paid the typical homeowner’s expenses. What expenses will you need from us relating to our home? Are there any other questions you have for us, such as other deductions we can take?

Just curious: this tax "stuff" is so much information to remember. How do you ever stay on top of all of these tax rules? Please let us know what other information you will need from us and what documents you will need us to send over to you. Thank you in advance

Identify what additional documents the clients need to provide in order for you to do their taxes.

Identify applicable deductions and credits available for the clients.

Differentiate types of income and expenditures.

Explain how you utilized the IRS website for staying current in the identification and application of appropriate tax codes and laws.

In: Accounting

Prepare a statement of functional expenses for the following entity using the following information. Charlie Counseling...

Prepare a statement of functional expenses for the following entity using the following information.

Charlie Counseling Center was incorporated as a not for profit entity 10 years ago. It’s adjusted trial balance as of June 30, 2018 is:

Charlie Counseling Center

Adjusted (Pre-Closing) Trial Balance

as of June 30, 2018

Debit

Credit

Cash and cash equivalents

126,500

Pledges receivable

41,000

Estimated uncollectible pledges

4,100

Inventory - supplies

2,800

Long-term investments, at fair value

178,000

Capital assets, net of accumulated depreciation

90,000

  

Accounts payable

20,520

Unrestricted net assets

196,500

Donor restricted net assets

190,500

Contributions - unrestricted

348,820

Contributions - restricted

38,100

Investment Income - Unrestricted

9,200

Net assets released from restrictions - Donor Restricted

22,000

Net assets released from restrictions - Unrestricted

22,000

Salaries and Fringe Benefits Expense

288,410

Occupancy and Utility Expense

38,400

Supplies Expense

6,940

Printing and Publishing Expense

4,190

Telephone and Postage Expense

3,500

  

Unrealized Gain on Investments

2,000

Depreciation Expense

30,000

Totals

831,740

831,740

Salaries and fringe benefits were allocated to program services and supporting services in the following percentages:

Counseling services 40

Professional training 20

Community Service 10

Management and General 20

Fund Raising 10.

Occupancy and utility, supplies, printing and publishing, and telephone and postage expenses were allocated to the programs in the same manner as salaries and fringe benefits. Depreciation expense was equally split among all five functional expense categories.

Prepare a statement of functional expenses from the information provided. Tell me if the program expense ratio is good relative to Charity Navigator's recommended 80% threshold.

In: Accounting

- Flamingo Company borrows $30,000 using a five-year, long-term installment note payable. The rate on the...

- Flamingo Company borrows $30,000 using a five-year, long-term installment note payable. The rate on the note is 5 percent and Flamingo agrees to make monthly payments of $566.14. When Flamingo records its first payment on the note payable, what will the journal entry look like (without the numbers).

  1. Debit Cash

Debit Interest Expense

          Credit Notes Payable

  1. Debit Interest Expense

Credit Notes Payable

Credit Cash

  1. Debit Notes Payable

Credit Cash

Credit Interest Payable

  1. Debit Interest Expense

Debit Notes Payable

           Credit Cash

- Relish Company incurs the following costs associated with the purchase of a new machine:

Purchase Price $20,000

Sales Tax 1,500

Manufacturer testing to ensure proper functioning 500

Shipping costs for the machine paid by Relish Company 200

What is the total cost Relish will capitalize when recording the asset?

1. $20,500

2. $22,200

3. $20,000

4. $22,000

- On January 1, 2017, Jenks Company purchased the copyright to Jackson Computer tutorials for $216,000. It is estimated that the copyright will have a useful life of 5 years and no salvage value. Assuming Jenks has a year-end of December 31, the amount of Amortization Expense recognized for year 2017 should be:

  1. $20,000

  2. $21,600

  3. $43,200

  4. $40,000

- On November 6, 2019, Julio paid $650 cash for his airplane ticket home for Christmas break. He leaves Bozeman on December 16, 2019. How would the airline record the transaction where they receive cash from Julio?

  1. Debit Cash 650

Credit Deferred Ticket Revenue 650

  1. Debit Deferred Ticket Revenue 650

Credit Cash 650

  1. Debit Ticket Revenue 650

Credit Deferred Ticket Revenue 650

  1. Debit Cash     650

Credit Ticket Revenue 650

- Which of the following expenditures should be expensed (debited to an expense account)?

  1. The replacement of an engine on an airplane.

  2. An oil change for a delivery vehicle.

  3. The addition of a garage to a home.

  4. A refrigeration system added to a tractor-trailer.

- Goodwill is:

  1. The value of a business as a whole, over and above the value of its net identifiable assets.

  2. Recorded when created internally through advertising expenses.

  3. Only recorded by the seller of a business.

  4. Amortized over the greater of its estimated life or forty years.

In: Accounting

She Shed. Corp has these business events occurred during the past two years, affecting intangible assets....

She Shed. Corp has these business events occurred during the past two years, affecting intangible assets.

1. Purchased a concession license for $20,000 on July 1, 2017. The license gives She Shed exclusive rights to sell its sheds in the tri-state region and will expire on July 1, 2025.

2. Purchased a patent on January 2, 2018, for $40,000 with an estimated five-year useful life.

3. Costs incurred to develop an exclusive Internet connection process as of June 1, 2018, were $45,000. The process has an indefinite life.

4. On April 1, 2018, She Shed purchased a small circuit board manufacturer for $350,000. Goodwill recorded in the transaction was $90,000.

5. On July 1, 2018, legal fees for successful defense of the patent purchased on January 2, 2018, were $11,400.This did not extend the original life of the patent.

6. Research and development costs for employee wages were $75,000 as of December 1, 2018.

7. Due to pending lawsuits, the patent’s useful life declines to three years.

8. At December 31, 2018, an impairment test on the license purchased in 2017 reveals (a) the estimated net cash flows from the license will be $13,000, and (b) the fair value of the license is $7,000.

9. The small circuit board manufacturer is expecting free cash flows in excess of $500,000 over the next three years

(a) Prepare the journal entries to record all these events.

(b) Show the proper presentation of intangible assets on the balance sheet at December 31, 2017 and December 31, 2018.

In: Accounting

What some Opportunities and Threats in the financial industry?

What some Opportunities and Threats in the financial industry?

In: Accounting

For a process shown below, what is the Activity Efficiency (AE) for unprimed flow? Operation A...

For a process shown below, what is the Activity Efficiency (AE) for unprimed flow?

Operation A Operation B Operation C Operation D
C/T mins 2 4 8 6
Shift time mins 480

  

78.5%

   

73.3%

   

60.9%

   

69.7%

In: Accounting