P3-2 (Algo) Recording Journal Entries LO3-4
Ryan Terlecki organized a new Internet company, CapUniverse, Inc. The company specializes in baseball-type caps with logos printed on them. Ryan, who is never without a cap, believes that his target market is college and high school students. You have been hired to record the transactions occurring in the first month of operations.
Issued 3,000 shares of $0.01 par value common stock to investors for cash at $30 per share.
Borrowed $66,000 from the bank to provide additional funding to begin operations; the note is due in two years.
Paid $2,400 cash for rent of a warehouse: $1,200 for the current month’s rent and another $1,200 for next month’s rent.
Paid $2,280 for a one-year fire insurance policy on the warehouse (recorded as a prepaid expense).
Purchased furniture and fixtures for the warehouse for $11,000, paying $2,700 cash and the rest on account. The amount is due within 30 days.
Purchased for $3,300 cash The University of Pennsylvania, Notre Dame, The University of Texas at Austin, The Ohio State University, and Michigan State University baseball caps as inventory to sell online.
Placed advertisements on Google for a total of $310 cash; the ads were run immediately.
Sold caps totaling $2,000, half of which was charged on account. The cost of the caps sold was $1,200. (Hint: Make two entries.)
Made full payment for the furniture and fixtures purchased on account in (e).
Received $240 from a customer on account.
Required:
Prepare journal entries for each transaction. Note that transaction
(h) will require two entries, one for revenue and one for
the related expense. (If no entry is required for a
transaction/event, select "No journal entry required" in the first
account field.)
In: Accounting
Question 6
Zoy plc is listed on the Hong Kong Stock Exchange and currently has 1m issued ordinary shares.
Over the last 5 years the following dividends have been paid at the end of each year:
|
Year |
Net Dividend Per Share (cents) |
|
2016 |
15.7 |
|
2017 |
17.4 |
|
2018 |
18.8 |
|
2019 |
20.1 |
|
2020 |
21.4 |
The dividends are expected to increase from 2020 at the same rate as they have historically and then by 4% per annum for periods after 2023.
The cost of equity of Zoy is unknown but the company has a beta of 0.9 and the rate of return on government securities is 0.6% per annum. The equity risk premium is estimated to be 6% per annum.
Required:
(12 marks)
(8 marks)
In: Finance
Question 4
Sometimes corporations make Fundamental Changes. Describe the change below.
In: Accounting
Leila owns 14% of the ordinary share of Datafarm Ltd. Assume dividends from Datafarm is the only income Leila has and she has no savings. In early March, 2020, Datafarm Ltd reported net profits after tax of $1,000,000 for the year, 2019 (1 January to 1 December, 2019), and announced due to the effect of COVID 19 Global pandemic it expects net profits after tax for the current year, 2020, to be 30% lower than last year’s figure. The company currently has a dividend payout ratio of 30%, which it will apply for the annual dividend for 2019, payable in July 2020, but it will reduce the dividend payout ratio to 20% for the dividend for 2020, payable in July, 2021. In July, 2021, Leila wishes to spend $45,000. How much can she consume in July, 2020 if the capital market offers an interest rate of 9% per year
In: Accounting
The CAL Company maintains a perpetual inventory system. The following information is available related to its December 31, 2020 year end: 1. Inventory costing $5,500 was received on December 20, 2020, on consignment from PPC. No journal entry has been made. 2. An invoice for $2,500, terms f.o.b. shipping point, was received and entered on December 30, 2020. The receiving report shows that the inventory was received on January 4, 2021, and the bill of lading shows that the inventory was shipped on January 2, 2021. 3. An invoice for $1,800, terms f.o.b. destination, was received and entered on January 2, 2021. The receiving report shows that the inventory was received on December 28, 2020.
Required: Prepare any correcting journal entries that are required at December 31, 2020, assuming that the books have not been closed. If no correction is needed, explain why
In: Accounting
The DeVille Company reported pretax accounting income on its
income statement as follows:
| 2018 | $ | 445,000 | |
| 2019 | 365,000 | ||
| 2020 | 435,000 | ||
| 2021 | 475,000 | ||
Included in the income of 2018 was an installment sale of property
in the amount of $68,000. However, for tax purposes, DeVille
reported the income in the year cash was collected. Cash collected
on the installment sale was $27,200 in 2019, $34,000 in 2020, and
$6,800 in 2021.
Included in the 2020 income was $29,000 interest from investments
in municipal bonds.
The enacted tax rate for 2018 and 2019 was 30%, but during 2019 new
tax legislation was passed reducing the tax rate to 25% for the
years 2020 and beyond
Prepare the year-end journal entries to record income taxes for the years 2018–2021.
In: Accounting
The DeVille Company reported pretax accounting income on its
income statement as follows:
| 2018 | $ | 440,000 | |
| 2019 | 360,000 | ||
| 2020 | 430,000 | ||
| 2021 | 470,000 | ||
Included in the income of 2018 was an installment sale of property
in the amount of $66,000. However, for tax purposes, DeVille
reported the income in the year cash was collected. Cash collected
on the installment sale was $26,400 in 2019, $33,000 in 2020, and
$6,600 in 2021.
Included in the 2020 income was $28,000 interest from investments
in municipal bonds.
The enacted tax rate for 2018 and 2019 was 30%, but during 2019 new
tax legislation was passed reducing the tax rate to 25% for the
years 2020 and beyond.
Required:
Prepare the year-end journal entries to record income taxes for the
years 2018–2021.
In: Accounting
The DeVille Company reported pretax accounting income on its
income statement as follows:
| 2018 | $ | 360,000 | |
| 2019 | 280,000 | ||
| 2020 | 350,000 | ||
| 2021 | 390,000 | ||
Included in the income of 2018 was an installment sale of property
in the amount of $32,000. However, for tax purposes, DeVille
reported the income in the year cash was collected. Cash collected
on the installment sale was $12,800 in 2019, $16,000 in 2020, and
$3,200 in 2021.
Included in the 2020 income was $11,000 interest from investments
in municipal bonds.
The enacted tax rate for 2018 and 2019 was 30%, but during 2019 new
tax legislation was passed reducing the tax rate to 25% for the
years 2020 and beyond.
Required:
Prepare the year-end journal entries to record income taxes for the
years 2018–2021.
In: Accounting
The DeVille Company reported pretax accounting income on its
income statement as follows:
| 2018 | $ | 390,000 | |
| 2019 | 310,000 | ||
| 2020 | 380,000 | ||
| 2021 | 420,000 | ||
Included in the income of 2018 was an installment sale of property
in the amount of $44,000. However, for tax purposes, DeVille
reported the income in the year cash was collected. Cash collected
on the installment sale was $17,600 in 2019, $22,000 in 2020, and
$4,400 in 2021.
Included in the 2020 income was $18,000 interest from investments
in municipal bonds.
The enacted tax rate for 2018 and 2019 was 30%, but during 2019 new
tax legislation was passed reducing the tax rate to 25% for the
years 2020 and beyond.
Required:
Prepare the year-end journal entries to record income taxes for the
years 2018–2021.
In: Accounting
The March 31, 2019 balance sheet of Kalakaua Corporation had Accounts Receivable of $525,000 and a credit balance in Allowance for Doubtful Accounts of $33,000. During the year ended March 31, 2020, the following transactions occurred: sales on account $1,550,000; sales returns & allowances, $120,000; collections from customers, $1,350,000; accounts written off $41,000; previously written off accounts of $5,000 were collected.
REQUIRED:
1.Using the above information, what is the balance of Accounts Receivable at March 31, 2020?
2.Suppose that it is the company policy to use the percentage of sales basis to estimate bad debts expense and anticipates 3% of net sales to be uncollectible, what is the adjusting entry at March 31, 2020? (Show calculations.)
3.Ignore the entry made in b) above.
Assume that it is company policy to use the aging of receivables basis to estimate bad debt expense. It determines that uncollectible accounts are expected to be $38,400. What is the adjusting entry at March 31, 2020? Assume the March 31, 2020 balance of Accounts Receivable is $575,000 and Allowance for Doubtful Accounts has an existing balance of $3,000 (cr). (Show calculations)
In: Accounting