Petty Cash Fund Entries Journalize the entries to record the following: Check No. 12-375 is issued to establish a petty cash fund of $800. The amount of cash in the petty cash fund is now $288. Check No. 12-476 is issued to replenish the fund, based on the following summary of petty cash receipts: office supplies, $297; miscellaneous selling expense, $123; miscellaneous administrative expense, $77. (Because the amount of the check to replenish the fund plus the balance in the fund do not equal $500, record the discrepancy in the cash short and over account.)

a. Journalize the entry to establish the petty cash fund. If an amount box does not require an entry, leave it blank.

______

______

• Cash
• Cash Short and Over
• Office Supplies
• Petty cash

b. Journalize the entry to replenish the petty cash fund. For a compound transaction, if an amount box does not require an entry, leave it blank.

_____

_____

_____

_____

_____

• Accounts Receivable
• Cash
• Office Supplies
• Petty Cash

1. Chen and sons' management entered into a an agreement on September 1, 2018 to supply its internally developed home monitoring system, SafetyFirst, and maintenance support to a regional 24 hour fitness chain. The details of the agreement calls for Chen and Sons to be paid $5,000,000 up front for the equipment and 3 years of maintenance support (beginning on agreement date). The fitness chain could have bought just the equipment for $6,000,000 with no support and they could have independently contracted for the maintenance support for $2,000,000 for the three year period. The cost of the equipment sold was $3,000,000 and Chen and Sons has recorded the $5,000,000 as a point-of-sale transaction.

How is this reconciled on the Trial Balance and adjusted in the appropriate Entry?

On January 1, 2023, Day Co. paid $103,288 for $100,000 face amount 10% bonds, a price that yields 8%. Interest is payable every July 1 and January 1. Interest revenue for the year ended December 31, 2023, using the effective interest method should be approximately:

Select one:

a. $10,329

b. $8,263

c. $8,228

d. $8,000

e. $10,000

The source rules determine if an income or deduction is a US source or foreign source. Your client, Robin, is in her first year of business and is trying to get clarification on the source rules. Identify one source of income and one source of deduction and explain to Robin how its source is determined. Be sure to explain how the allocation and apportionment process works for the deduction.

You are considering purchasing the preferred stock of a firm but are concerned about its capacity to pay the dividend. To help allay that fear, you compute the times-preferred-dividend-earned ratio for the past three years from the following data taken from the firm’s financial statements:

Year -----------------------------------------20X1-------------------------- 20X2------------------- 20X3

Operating income -----------------------$16,000,000 ----------------$13,000,000 ----------$14,000,000

Interest ------------------------------------6,700,000 --------------------3,700,000 --------------5,900,000

Taxes --------------------------------------4,600,000 ---------------------5,100,000 -------------5,100,000

Preferred dividends --------------------600,000 -----------------------800,000 -----------------1,200,000

Common dividends --------------------3,000,000 ----------------------3,300,000 --------------______

Round your answers to two decimal places.

20X1:_______

20X2:_______

20X3:_______

What does your analysis indicate about the firm’s capacity to pay preferred stock dividends?

Times preferred dividend earned has ________ each year, which indicates the firm's capacity to pay the dividend has _______ .

Assume that on 1/1/X0, a parent company acquires a 70% interest in its subsidiary for a price at $480,000 over book value. The excess is assigned as follows:

70% of the goodwill is allocated to the parent.

Included in the attached Excel spreadsheet are the pre-consolidation financial statements for both the parent and the subsidiary.

Submission Requirements:

Using the ACT470_Mod08-Portfolio_Option01.xlsx Excel spreadsheet in the Module 8 folder:

Prepare the consolidated financial statements at 12/31/X6 by placing the appropriate entries in their respective debit/credit column cells.

Indicate, in the blank column cell to the left of the debit and credit column cells if the entry is a [C], [E], [A], [D] or [I]entry.

Use Excel formulas to derive the Consolidated column amounts and totals.

Using the “Home” key in Excel, go to the “Styles” area and highlight the [C], [E], [A], [D] or [I]entry cells in different shades.

The accounting records of Calbert Architects include the following​ selected, unadjusted balances a March 31: Accounts​Receivable,1,300 Office​ Supplies, 1,100​; Prepaid​ Rent, 1,700​; ​Equipment, $10,000​; Accumulated Depreciationlong dash—​Equipment, $0, Salaries​ Payable, $0; Unearned​ Revenue, $ 600 Service​ Revenue, 4,500​; Salaries​ Expense, $1,500​; Supplies​ Expense, $0; Rent​ Expense, $0; Depreciation Expenselong dash—​Equipment, ​$0.

c. Office Supplies on​ hand, $600. ​(Assume that Calbert debits an asset account when supplies are​ purchased.)

The Revocable Trust qualifies for Grantor Trust status under IRC Code Section

671

673

674

All of the above

Recent economic data suggest that australian banks have raised their mortgage interest rates, because of an increase in the cost of borrowing in international capital markets such as the USA and Europe. Assume that the required returns on the Woolworths have increased from 12% to 15%. What impact will this have on the bond value? Explain (no calculations)

Sam has a sole proprietorship and wants to transfer his asset of (fair market value $1.8 million, adjusted basis $ 300,000) with the associated debt ($500,000) to a new corporation. What is the tax consequences of these transactions? Must include your sources (Example, IRC)

2018

2019

Required:
1. Prepare journal entries to record these transactions and events and any year-end fair value adjustments to the portfolio of long-term available-for-sale securities. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round your intermediate calculations.)

********Word Choices for Journal Entry************

• No journal entry required
• Accounts receivable
• Cash
• Dividend revenue
• Earnings from investment
• Earnings from long-term investment
• Fair value adjustment—AFS (LT)
• Fair value adjustment—Available-for-sale (ST)
• Fair value adjustment—Trading
• Foreign exchange gain
• Foreign exchange loss
• Gain on sale of investments
• Interest receivable
• Interest revenue
• Long-term investments—AFS (Black & Decker)
• Long-term investments—AFS (Eastman Kodak)
• Long-term investments—AFS (J&J)
• Long-term investments—AFS (Mattel)
• Long-term investments—AFS (Microsoft)
• Long-term investments—AFS (Sara Lee)
• Long-term investments—AFS (Sony)
• Loss on sale of investments
• Sales
• Short-term investments—AFS (Black & Decker)
• Short-term investments—AFS (Eastman Kodak)
• Short-term investments—AFS (J&J)
• Short-term investments—AFS (Mattel)
• Short-term investments—AFS (Microsoft)
• Short-term investments—AFS (Sara Lee)
• Short-term investments—AFS (Sony)
• Unrealized gain—Equity
• Unrealized gain—Income
• Unrealized loss—Equity
• Unrealized loss—Income

LLC Net Income and Statement of Members' Equity

Marvel Media, LLC, has three members: WLKT Partners, Madison Sanders, and Observer Newspaper, LLC. On January 1, 20Y2, the three members had equity of $315,000, $80,000, and $190,000, respectively. WLKT Partners contributed an additional $80,000 to Marvel, Media, LLC, on June 1, 20Y2. Madison Sanders received an annual salary allowance of $182,700 during 20Y2. The members’ equity accounts are also credited with 12% interest on each member's January 1 capital balance. Any remaining income is to be shared in the ratio of 4:3:3 among the three members. The revenues, expenses, and net income for Marvel Media, LLC, for 20Y2 were $531,685, $61,685 and $470,000 respectively. Amounts equal to the salary and interest allowances were withdrawn by the members.

a. Determine the division of income among the three members. If an amount box does not require an entry, leave it blank.

b. Prepare the journal entries to close the (1) net income and (2) withdrawals to the individual member equity accounts. For a compound entry, if an amount box does not require an entry, leave it blank.

c. Prepare a statement of members' equity for 20Y2. If an amount box does not require an entry, leave it blank.

d What are the advantages of an income-sharing agreement for the members of this LLC?

Without an income-sharing agreement, each member   be credited with an equal proportion of the total earnings, or one-third each. Separate contributions   be acknowledged in the income-sharing formula.

Distribution of Cash Upon Liquidation

Hewitt and Patel are partners, sharing gains and losses equally. They decide to terminate their partnership. Prior to realization, their capital balances are $24,000 and $16,000, respectively. After all noncash assets are sold and all liabilities are paid, there is a cash balance of $30,000.

a. What is the amount of a gain or loss on realization?

b. How should the gain or loss be divided between Hewitt and Patel?

c. How should the cash be divided between Hewitt and Patel? If an amount is zero, enter "0".

Explain the relationship between the number of units sold in a day in a fast food restaurant and each of the following: total fixed costs per unit of activity, total variable costs, variable cost per unit of activity, total costs, and average total cost per unit of activity.

Jack, age 66, and Jill, age 59, are married and file a joint return. During the year they received: o $262,000 in wages o $2,000 in interest on their savings account o $1,500 in interest from City of Boston Bonds They paid: o $3,000 in student loan interest o $8,000 in mortgage interest o $5,000 in charitable donations o $3,000 in real estate taxes o 4,000 in state income taxes They support Jack’s mother since she has no income. She lives in an assisted living center in town because she is legally blind. They also support their daughter Lauren who lives with them while she goes to school full-time. She is 26 years old and has a part-time job waitressing once a week where she earns $3,000. What is Jack and Jill’s taxable income and tax due/(refund)?

Two independent companies, Denver and Bristol, each own a warehouse, and Denver agrees to pay Bristol $2,000 to complete the exchange. The following information for the two warehouses is available:

Required: