On December 31, 2020, Sage Company acquired a computer from Plato Corporation by issuing a $650,000 zero-interest-bearing note, payable in full on December 31, 2024. Sage Company’s credit rating permits it to borrow funds from its several lines of credit at 12%. The computer is expected to have a 5-year life and a $76,000 salvage value.
1.
Prepare the journal entry for the purchase on December 31, 2020. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answers to 0 decimal places e.g. 58,971. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
|
Date |
Account Titles and Explanation |
Debit |
Credit |
|
December 31, 2020 |
|||
2.
Prepare any necessary adjusting entries relative to depreciation
(use straight-line) and amortization (use effective-interest
method) on December 31, 2021. (Round answers to 0
decimal places, e.g. 38,548. If no entry is required, select "No
Entry" for the account titles and enter 0 for the amounts. Credit
account titles are automatically indented when amount is entered.
Do not indent manually.)
|
Date |
Account Titles and Explanation |
Debit |
Credit |
|
December 31, 2021 |
|||
|
(To record the depreciation.) |
|||
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December 31, 2021 |
|||
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(To amortize the discount.) |
|
Schedule of Note Discount Amortization |
|||||
|
|
Debit, Interest Expense Credit, |
Carrying Amount |
|||
| 12/31/20 | $ | $ | |||
| 12/31/21 | |||||
| 12/31/22 | |||||
| 12/31/23 | |||||
| 12/31/24 | |||||
3. Prepare any necessary adjusting entries relative to
depreciation and amortization on December 31, 2022.
(Round answers to 0 decimal places, e.g. 38,548. If no
entry is required, select "No Entry" for the account titles and
enter 0 for the amounts. Credit account titles are automatically
indented when amount is entered. Do not indent
manually.)
|
Date |
Account Titles and Explanation |
Debit |
Credit |
|
December 31, 2022 |
|||
|
(To record the depreciation.) |
|||
|
December 31, 2022 |
|||
|
(To amortize the discount.) |
PLEASE PROVIDE STEPS AND EXPLANATION WITH ANSWERS. THANK YOU!
In: Accounting
Alfonso Inc. acquired 100 percent of the voting shares of BelAire Company on January 1, 2020. In exchange, Alfonso paid $459,500 in cash and issued 100,000 shares of its own $1 par value common stock. On this date, Alfonso’s stock had a fair value of $15 per share. The combination is a statutory merger with BelAire subsequently dissolved as a legal corporation. BelAire’s assets and liabilities are assigned to a new reporting unit.
The following shows fair values for the BelAire reporting unit for January 1, 2020 along with respective carrying amounts on December 31, 2021.
| BelAire Reporting Unit |
Fair Values 1/1/20 |
Carrying Amounts 12/31/21 |
||||
| Cash | $ | 101,000 | $ | 52,000 | ||
| Receivables | 212,250 | 247,000 | ||||
| Inventory | 230,000 | 262,000 | ||||
| Patents | 436,000 | 512,000 | ||||
| Customer relationships | 650,750 | 608,000 | ||||
| Equipment (net) | 403,500 | 302,000 | ||||
| Goodwill | ? | 568,000 | ||||
| Accounts payable | (113,500 | ) | (201,000 | ) | ||
| Long-term liabilities | (528,500 | ) | (470,000 | ) | ||
Note: Parentheses indicate a credit balance.
Prepare Alfonso’s journal entry to record the assets acquired and the liabilities assumed in the BelAire merger on January 1, 2020. Note: Enter cash paid and cash received as two separate amounts.
On December 31, 2021, Alfonso opts to forgo any goodwill impairment qualitative assessment and estimates that the total fair value of the entire BelAire reporting unit is $1,740,000. What amount of goodwill impairment, if any, should Alfonso recognize on its 2021 income statement?
In: Accounting
On January 1, 2020, Corgan Company acquired 80 percent of the outstanding voting stock of Smashing, Inc., for a total of $1,600,000 in cash and other consideration. At the acquisition date, Smashing had common stock of $910,000, retained earnings of $460,000, and a noncontrolling interest fair value of $400,000. Corgan attributed the excess of fair value over Smashing's book value to various covenants with a 20-year remaining life. Corgan uses the equity method to account for its investment in Smashing.
During the next two years, Smashing reported the following:
| Net Income | Dividends Declared | Inventory Purchases from Corgan | |||||||
| 2020 | $ | 360,000 | $ | 56,000 | $ | 310,000 | |||
| 2021 | 340,000 | 66,000 | 330,000 | ||||||
Corgan sells inventory to Smashing using a 60 percent markup on cost. At the end of 2020 and 2021, 50 percent of the current year purchases remain in Smashing's inventory.
In: Accounting
Heidebrecht Design acquired 30% of the outstanding common stock of Blossom Company on January 1, 2020, by paying $844,000 for the 42,200 shares. Blossom declared and paid $0.20 per share cash dividends on March 15, June 15, September 15, and December 15, 2020. Blossom reported net income of $381,500 for the year. At December 31, 2020, the market price of Blossom common stock was $26 per share.
Prepare the journal entries for Heidebrecht Design for 2020 assuming Heidebrecht Design cannot exercise significant influence over Blossom. (Record journal entries in the order presented in the problem. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.)
|
Date |
Account Titles and Explanation |
Debit |
Credit |
|---|---|---|---|
|
choose a transaction date Jan. 1Mar. 15June 15Sept. 15Dec. 15Dec. 31 |
enter an account title |
enter a debit amount |
enter a credit amount |
|
enter an account title |
enter a debit amount |
enter a credit amount |
|
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choose a transaction date Jan. 1Mar. 15June 15Sept. 15Dec. 15Dec. 31 |
enter an account title |
enter a debit amount |
enter a credit amount |
|
enter an account title |
enter a debit amount |
enter a credit amount |
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choose a transaction date Jan. 1Mar. 15June 15Sept. 15Dec. 15Dec. 31 |
enter an account title |
enter a debit amount |
enter a credit amount |
|
enter an account title |
enter a debit amount |
enter a credit amount |
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choose a transaction date Jan. 1Mar. 15June 15Sept. 15Dec. 15Dec. 31 |
enter an account title |
enter a debit amount |
enter a credit amount |
|
enter an account title |
enter a debit amount |
enter a credit amount |
|
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choose a transaction date Jan. 1Mar. 15June 15Sept. 15Dec. 15Dec. 31 |
enter an account title |
enter a debit amount |
enter a credit amount |
|
enter an account title |
enter a debit amount |
enter a credit amount |
|
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choose a transaction date Jan. 1Mar. 15June 15Sept. 15Dec. 15Dec. 31 |
enter an account title |
enter a debit amount |
enter a credit amount |
|
enter an account title |
enter a debit amount |
enter a credit amount |
eTextbook and Media
List of Accounts
Prepare the journal entries for Heidebrecht Design for 2020, assuming Heidebrecht Design can exercise significant influence over Blossom. Use the equity method. (Record journal entries in the order presented in the problem. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.)
|
Date |
Account Titles and Explanation |
Debit |
Credit |
|---|---|---|---|
|
choose a transaction date Jan. 1Mar. 15June 15Sept. 15Dec. 15Dec. 31 |
enter an account title |
enter a debit amount |
enter a credit amount |
|
enter an account title |
enter a debit amount |
enter a credit amount |
|
|
choose a transaction date Jan. 1Mar. 15June 15Sept. 15Dec. 15Dec. 31 |
enter an account title |
enter a debit amount |
enter a credit amount |
|
enter an account title |
enter a debit amount |
enter a credit amount |
|
|
choose a transaction date Jan. 1Mar. 15June 15Sept. 15Dec. 15Dec. 31 |
enter an account title |
enter a debit amount |
enter a credit amount |
|
enter an account title |
enter a debit amount |
enter a credit amount |
|
|
choose a transaction date Jan. 1Mar. 15June 15Sept. 15Dec. 15Dec. 31 |
enter an account title |
enter a debit amount |
enter a credit amount |
|
enter an account title |
enter a debit amount |
enter a credit amount |
|
|
choose a transaction date Jan. 1Mar. 15June 15Sept. 15Dec. 15Dec. 31 |
enter an account title |
enter a debit amount |
enter a credit amount |
|
enter an account title |
enter a debit amount |
enter a credit amount |
|
|
choose a transaction date Jan. 1Mar. 15June 15Sept. 15Dec. 15Dec. 31 |
enter an account title |
enter a debit amount |
enter a credit amount |
|
enter an account title |
enter a debit amount |
enter a credit amount |
eTextbook and Media
List of Accounts
Indicate the balance sheet and income statement account balances at December 31, 2020, under each method of accounting.
|
Cost |
Equity |
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|---|---|---|---|---|
|
Stock Investments |
$enter a dollar amount | $enter a dollar amount | ||
|
Dividend revenue |
enter a dollar amount | enter a dollar amount | ||
|
Unrealized gain income |
enter a dollar amount | enter a dollar amount | ||
|
Revenue from stock investments |
enter a dollar amount | enter a dollar amount |
In: Accounting
On January 1, 2020, Corgan Company acquired 70 percent of the outstanding voting stock of Smashing, Inc., for a total of $1,225,000 in cash and other consideration. At the acquisition date, Smashing had common stock of $860,000, retained earnings of $410,000, and a noncontrolling interest fair value of $525,000. Corgan attributed the excess of fair value over Smashing's book value to various covenants with a 20-year remaining life. Corgan uses the equity method to account for its investment in Smashing.
During the next two years, Smashing reported the following:
| Net Income | Dividends Declared | Inventory Purchases from Corgan | |||||||
| 2020 | $ | 310,000 | $ | 51,000 | $ | 260,000 | |||
| 2021 | 290,000 | 61,000 | 280,000 | ||||||
Corgan sells inventory to Smashing using a 60 percent markup on cost. At the end of 2020 and 2021, 30 percent of the current year purchases remain in Smashing's inventory.
In: Accounting
On January 1, 2020, Ridge Road Company acquired 20 percent of the voting shares of Sauk Trail, Inc., for $2,800,000 in cash. Both companies provide commercial Internet support services but serve markets in different industries. Ridge Road made the investment to gain access to Sauk Trail’s board of directors and thus facilitate future cooperative agreements between the two firms. Ridge Road quickly obtained several seats on Sauk Trail’s board, which gave it the ability to significantly influence Sauk Trail’s operating and investing activities.
The January 1, 2020, carrying amounts and corresponding fair values for Sauk Trail’s assets and liabilities follow:
| Carrying Amount | Fair Value | |||||
| Cash and receivables | $ | 115,000 | $ | 115,000 | ||
| Computing equipment | 5,045,000 | 5,780,000 | ||||
| Patented technology | 105,000 | 4,010,000 | ||||
| Trademark | 155,000 | 2,010,000 | ||||
| Liabilities | (190,000 | ) | (190,000 | ) | ||
Also, as of January 1, 2020, Sauk Trail’s computing equipment had a seven-year remaining estimated useful life. The patented technology was estimated to have a four-year remaining useful life. The trademark's useful life was considered indefinite. Ridge Road attributed to goodwill any unidentified excess cost.
During the next two years, Sauk Trail reported the following net income and dividends:
| Net Income | Dividends Declared | |||||
| 2020 | $ | 1,810,000 | $ | 155,000 | ||
| 2021 | 1,995,000 | 165,000 | ||||
How much of Ridge Road’s $2,800,000 payment for Sauk Trail is attributable to goodwill?
What amount should Ridge Road report for its equity in Sauk Trail’s earnings on its income statements for 2020 and 2021?
What amount should Ridge Road report for its investment in Sauk Trail on its balance sheets at the end of 2020 and 2021?
In: Accounting
On January 1, 2020, Corgan Company acquired 70 percent of the outstanding voting stock of Smashing, Inc., for a total of $1,505,000 in cash and other consideration. At the acquisition date, Smashing had common stock of $940,000, retained earnings of $490,000, and a noncontrolling interest fair value of $645,000. Corgan attributed the excess of fair value over Smashing's book value to various covenants with a 20-year remaining life. Corgan uses the equity method to account for its investment in Smashing. During the next two years, Smashing reported the following: Net Income Dividends Declared Inventory Purchases from Corgan 2020 $ 390,000 $ 59,000 $ 340,000 2021 370,000 69,000 360,000 Corgan sells inventory to Smashing using a 60 percent markup on cost. At the end of 2020 and 2021, 50 percent of the current year purchases remain in Smashing's inventory. Compute the equity method balance in Corgan's Investment in Smashing, Inc., account as of December 31, 2021. Prepare the worksheet adjustments for the December 31, 2021, consolidation of Corgan and Smashing.
In: Accounting
On January 1, 2020, Ridge Road Company acquired 20 percent of the voting shares of Sauk Trail, Inc., for $3,200,000 in cash. Both companies provide commercial Internet support services but serve markets in different industries. Ridge Road made the investment to gain access to Sauk Trail’s board of directors and thus facilitate future cooperative agreements between the two firms. Ridge Road quickly obtained several seats on Sauk Trail’s board, which gave it the ability to significantly influence Sauk Trail’s operating and investing activities.
The January 1, 2020, carrying amounts and corresponding fair values for Sauk Trail’s assets and liabilities follow:
| Carrying Amount | Fair Value | |||||
| Cash and receivables | $ | 135,000 | $ | 135,000 | ||
| Computing equipment | 5,225,000 | 6,100,000 | ||||
| Patented technology | 125,000 | 4,050,000 | ||||
| Trademark | 175,000 | 2,050,000 | ||||
| Liabilities | (210,000 | ) | (210,000 | ) | ||
Also, as of January 1, 2020, Sauk Trail’s computing equipment had a seven-year remaining estimated useful life. The patented technology was estimated to have a four-year remaining useful life. The trademark's useful life was considered indefinite. Ridge Road attributed to goodwill any unidentified excess cost.
During the next two years, Sauk Trail reported the following net income and dividends:
| Net Income | Dividends Declared | |||||
| 2020 | $ | 1,850,000 | $ | 175,000 | ||
| 2021 | 2,035,000 | 185,000 | ||||
How much of Ridge Road’s $3,200,000 payment for Sauk Trail is attributable to goodwill?
What amount should Ridge Road report for its equity in Sauk Trail’s earnings on its income statements for 2020 and 2021?
What amount should Ridge Road report for its investment in Sauk Trail on its balance sheets at the end of 2020 and 2021?
In: Accounting
Hi,
Working on a project in my group for class and I am having some issues
My part is current state of the business. It is a store and the annual sales are $460,000
Other info I have is:
Ownership and Compensation; Percent Ownership Personal Investment
Mitchell George, Founder & CEO 25% $125,000Katie Beauseigneur, COO 15% $75,000
Melissa Dunnells, CFO15% $75,000
Also, a medium coffee price from store is $3.75
Sarah Griffin, Marketing Officer 10% $50,000
Katharina Ferry, HR Director10% $50,000
Valerie Freeman, Board Memberand Angle Investor 10% , $125,000
Options pool 15%
Total 100%
Any info is helpful
In: Finance
Zugar Company is domiciled in a country whose currency is the dinar. Zugar begins 2017 with three assets: cash of 28,200 dinars, accounts receivable of 82,000 dinars, and land that cost 220,000 dinars when acquired on April 1, 2016. On January 1, 2017, Zugar has a 170,000 dinar note payable, and no other liabilities. On May 1, 2017, Zugar renders services to a customer for 140,000 dinars, which was immediately paid in cash. On June 1, 2017, Zugar incurred a 120,000 dinar operating expense, which was immediately paid in cash. No other transactions occurred during the year. Currency exchange rates for 1 dinar follow:
| April 1, 2016 | $0.53 | = | 1 dinar | |
| January 1, 2017 | 0.56 | = | 1 | |
| May 1, 2017 | 0.57 | = | 1 | |
| June 1, 2017 | 0.59 | = | 1 | |
| December 31, 2017 | 0.61 | = | 1 | |
Assume that Zugar is a foreign subsidiary of a U.S. multinational company that uses the U.S. dollar as its reporting currency. Assume also that the dinar is the subsidiary’s functional currency. What is the translation adjustment for this subsidiary for the year 2017?
Assume that Zugar is a foreign subsidiary of a U.S. multinational company that uses the U.S. dollar as its reporting currency. Assume also that the U.S. dollar is the subsidiary’s functional currency. What is the remeasurement gain or loss for 2017?
Assume that Zugar is a foreign subsidiary of a U.S. multinational company. On the December 31, 2017, balance sheet, what is the translated value of the Land account? On the December 31, 2017, balance sheet, what is the remeasured value of the Land account?
(Input all amounts as positive.)
In: Accounting