Amalgamated General Corporation is a consulting firm that also offers financial services through its credit division. From time to time the company buys and sells securities. The following selected transactions relate to Amalgamated’s investment activities during the last quarter of 2018 and the first month of 2019. The only securities held by Amalgamated at October 1 were $45 million of 10% bonds of Kansas Abstractors, Inc., purchased on May 1 at face value and held in Amalgamated’s trading portfolio. The company’s fiscal year ends on December 31.
| 2018 | ||||
| Oct. | 18 | Purchased 2 million preferred shares of Millwork Ventures Company for $72 million. | ||
| 31 | Received semiannual interest of $2.7 million from the Kansas Abstractors bonds. | |||
| Nov. | 1 | Purchased 10% bonds of Holistic Entertainment Enterprises at their $66 million face value, to be held until they mature in 2025. Semiannual interest is payable April 30 and October 31. | ||
| 1 | Sold the Kansas Abstractors bonds for $41 million because rising interest rates are expected to cause their fair value to continue to fall. No unrealized gains and losses had been recorded on these bonds previously. | |||
| Dec. | 1 | Purchased 12% bonds of Household Plastics Corporation at their $70 million face value, to be held until they mature in 2028. Semiannual interest is payable May 31 and November 30. | ||
| 20 | Purchased U. S. Treasury bonds for $6.6 million as trading securities, hoping to earn profits on short-term differences in prices. | |||
| 21 | Purchased 4 million common shares of NXS Corporation for $64 million, planning to earn profits from dividends or gains if prevailing market conditions encourage sale. | |||
| 23 | Sold the Treasury bonds for $6.9 million. | |||
| 29 | Received cash dividends of $3 million from the Millwork Ventures Company preferred shares. | |||
| 31 | Recorded any necessary adjusting entry(s) and closing entries relating to the investments. The market price of the Millwork Ventures Company preferred stock was $34.50 per share and $17.50 per share for the NXS Corporation common. The fair values of the bond investments were $63.7 million for Household Plastics Corporation and $17.7 million for Holistic Entertainment Enterprises. |
| 2019 | ||||
| Jan. | 7 | Sold the NXS Corporation common shares for $60 million. |
Required:
Prepare the appropriate journal entry for each transaction or
event. (If no entry is required for a
transaction/event, select "No journal entry required" in the first
account field. Do not round intermediate calculations. Enter your
answers in millions rounded to 1 decimal place, (i.e., 5,500,000
should be entered as 5.5).)
In: Accounting
Securities held-to-maturity, securities available for sale, and
trading securities
Amalgamated General Corporation is a consulting firm that also offers financial services through its credit division. From time to time the company buys and sells securities intending to earn profits on short-term differences in price. The following selected transactions relate to Amalgamated’s investment activities during the last quarter of 2016 and the first month of 2017. The only securities held by Amalgamated at October 1 were $30 million of 10% bonds of Kansas Abstractors, Inc., purchased on May 1 at face value. The company’s fiscal year ends on December 31.
| 2016 | |
| Oct. 18 | Purchased 2 million preferred shares of Millwork Ventures Company for $58 million as a speculative investment to be sold under suitable circumstances. |
| 31 | Received semiannual interest of $1.5 million from the Kansas Abstractors bonds. |
| Nov. 1 | Purchased 10% bonds of Holistic Entertainment Enterprises at their $18 million face value, to be held until they mature in 2018. Semiannual interest is payable April 30 and October 31. |
| 1 | Sold the Kansas Abstractors bonds for $28 million because rising interest rates are expected to cause their fair value to continue to fall. |
| Dec. 1 | Purchased 12% bonds of Household Plastics Corporation at their $60 million face value, to be held until they mature in 2028. Semiannual interest is payable May 31 and November 30. |
| 20 | Purchased U. S. Treasury bonds for $5.6 million as trading securities, hoping to earn profits on short-term differences in prices. |
| 21 | Purchased 4 million common shares of NXS Corporation for $44 million as trading securities, hoping to earn profits on short-term differences in prices. |
| 23 | Sold the Treasury bonds for $5.7 million. |
| 29 | Received cash dividends of $3 million from the Millwork Ventures Company preferred shares. |
| 31 | Recorded any necessary adjusting entry(s) and closing entries relating to the investments. The market price of the Millwork Ventures Company preferred stock was $27.50 per share and $11.50 per share for the NXS Corporation common. The fair values of the bond investments were $58.7 million for Household Plastics Corporation and $16.7 million for Holistic Entertainment Enterprises. |
| 2017 | |
| Jan. 7 | Sold the NXS Corporation common shares for $43 million. |
Required:
Prepare the appropriate journal entry for each transaction or event.
In: Accounting
Securities held-to-maturity, securities available for sale, and
trading securities
Amalgamated General Corporation is a consulting firm that also offers financial services through its credit division. From time to time the company buys and sells securities intending to earn profits on short-term differences in price. The following selected transactions relate to Amalgamated’s investment activities during the last quarter of 2016 and the first month of 2017. The only securities held by Amalgamated at October 1 were $30 million of 10% bonds of Kansas Abstractors, Inc., purchased on May 1 at face value. The company’s fiscal year ends on December 31.
| 2016 | |
| Oct. 18 | Purchased 2 million preferred shares of Millwork Ventures Company for $58 million as a speculative investment to be sold under suitable circumstances. |
| 31 | Received semiannual interest of $1.5 million from the Kansas Abstractors bonds. |
| Nov. 1 | Purchased 10% bonds of Holistic Entertainment Enterprises at their $18 million face value, to be held until they mature in 2018. Semiannual interest is payable April 30 and October 31. |
| 1 | Sold the Kansas Abstractors bonds for $28 million because rising interest rates are expected to cause their fair value to continue to fall. |
| Dec. 1 | Purchased 12% bonds of Household Plastics Corporation at their $60 million face value, to be held until they mature in 2028. Semiannual interest is payable May 31 and November 30. |
| 20 | Purchased U. S. Treasury bonds for $5.6 million as trading securities, hoping to earn profits on short-term differences in prices. |
| 21 | Purchased 4 million common shares of NXS Corporation for $44 million as trading securities, hoping to earn profits on short-term differences in prices. |
| 23 | Sold the Treasury bonds for $5.7 million. |
| 29 | Received cash dividends of $3 million from the Millwork Ventures Company preferred shares. |
| 31 | Recorded any necessary adjusting entry(s) and closing entries relating to the investments. The market price of the Millwork Ventures Company preferred stock was $27.50 per share and $11.50 per share for the NXS Corporation common. The fair values of the bond investments were $58.7 million for Household Plastics Corporation and $16.7 million for Holistic Entertainment Enterprises. |
| 2017 | |
| Jan. 7 | Sold the NXS Corporation common shares for $43 million. |
Required:
Prepare the appropriate journal entry for each transaction or event.
In: Accounting
Amalgamated General Corporation is a consulting firm that also offers financial services through its credit division. From time to time the company buys and sells securities. The following selected transactions relate to Amalgamated’s investment activities during the last quarter of 2018 and the first month of 2019. The only securities held by Amalgamated at October 1 were $45 million of 10% bonds of Kansas Abstractors, Inc., purchased on May 1 at face value and held in Amalgamated’s trading portfolio. The company’s fiscal year ends on December 31.
| 2018 | ||||
| Oct. | 18 | Purchased 2 million preferred shares of Millwork Ventures Company for $72 million. | ||
| 31 | Received semiannual interest of $2.7 million from the Kansas Abstractors bonds. | |||
| Nov. | 1 | Purchased 10% bonds of Holistic Entertainment Enterprises at their $66 million face value, to be held until they mature in 2025. Semiannual interest is payable April 30 and October 31. | ||
| 1 | Sold the Kansas Abstractors bonds for $41 million because rising interest rates are expected to cause their fair value to continue to fall. No unrealized gains and losses had been recorded on these bonds previously. | |||
| Dec. | 1 | Purchased 12% bonds of Household Plastics Corporation at their $70 million face value, to be held until they mature in 2028. Semiannual interest is payable May 31 and November 30. | ||
| 20 | Purchased U. S. Treasury bonds for $6.6 million as trading securities, hoping to earn profits on short-term differences in prices. | |||
| 21 | Purchased 4 million common shares of NXS Corporation for $64 million, planning to earn profits from dividends or gains if prevailing market conditions encourage sale. | |||
| 23 | Sold the Treasury bonds for $6.9 million. | |||
| 29 | Received cash dividends of $3 million from the Millwork Ventures Company preferred shares. | |||
| 31 | Recorded any necessary adjusting entry(s) and closing entries relating to the investments. The market price of the Millwork Ventures Company preferred stock was $34.50 per share and $17.50 per share for the NXS Corporation common. The fair values of the bond investments were $63.7 million for Household Plastics Corporation and $17.7 million for Holistic Entertainment Enterprises. |
| 2019 | ||||
| Jan. | 7 | Sold the NXS Corporation common shares for $60 million. |
Required:
Prepare the appropriate journal entry for each transaction or
event. (If no entry is required for a transaction/event,
select "No journal entry required" in the first account field. Do
not round intermediate calculations. Enter your answers in millions
rounded to 1 decimal place, (i.e., 5,500,000 should be entered as
5.5).)
In: Accounting
Amalgamated General Corporation is a consulting firm that also offers financial services through its credit division. From time to time the company buys and sells securities. The following selected transactions relate to Amalgamated’s investment activities during the last quarter of 2018 and the first month of 2019. The only securities held by Amalgamated at October 1 were $40 million of 10% bonds of Kansas Abstractors, Inc., purchased on May 1 at face value and held in Amalgamated’s trading portfolio. The company’s fiscal year ends on December 31.
| 2018 | ||||
| Oct. | 18 | Purchased 2 million preferred shares of Millwork Ventures Company for $56 million. | ||
| 31 | Received semiannual interest of $1.6 million from the Kansas Abstractors bonds. | |||
| Nov. | 1 | Purchased 10% bonds of Holistic Entertainment Enterprises at their $18 million face value, to be held until they mature in 2025. Semiannual interest is payable April 30 and October 31. | ||
| 1 | Sold the Kansas Abstractors bonds for $36 million because rising interest rates are expected to cause their fair value to continue to fall. No unrealized gains and losses had been recorded on these bonds previously. | |||
| Dec. | 1 | Purchased 12% bonds of Household Plastics Corporation at their $50 million face value, to be held until they mature in 2028. Semiannual interest is payable May 31 and November 30. | ||
| 20 | Purchased U. S. Treasury bonds for $5.8 million as trading securities, hoping to earn profits on short-term differences in prices. | |||
| 21 | Purchased 4 million common shares of NXS Corporation for $48 million, planning to earn profits from dividends or gains if prevailing market conditions encourage sale. | |||
| 23 | Sold the Treasury bonds for $6.0 million. | |||
| 29 | Received cash dividends of $3 million from the Millwork Ventures Company preferred shares. | |||
| 31 | Recorded any necessary adjusting entry(s) and closing entries relating to the investments. The market price of the Millwork Ventures Company preferred stock was $24.50 per share and $14.00 per share for the NXS Corporation common. The fair values of the bond investments were $59.7 million for Household Plastics Corporation and $16.9 million for Holistic Entertainment Enterprises. |
| 2019 | ||||
| Jan. | 7 | Sold the NXS Corporation common shares for $46 million. |
Required:
Prepare the appropriate journal entry for each transaction or
event. (If no entry is required for a transaction/event,
select "No journal entry required" in the first account field. Do
not round intermediate calculations. Enter your answers in millions
rounded to 1 decimal place, (i.e., 5,500,000 should be entered as
5.5).)
In: Accounting
Starbuck's specialty coffees or teas and a breakfast sandwich per household week and indicate which unit sales and price point maximizes total revenue and contrast that with the different unit sales and price point that maximizes operating profit:
| Units sold | Uniform price | Total Revenue | Marginal Revenue | Variable Cost | IncrementalOperatingProfit |
| 0 | 20 | 0 | - | - | 0 |
| 1 | 17 | 17 | 17 | 2 | 15 |
| 2 | 15 | 30 | ? | 2 | ? |
| 3 | 12.50 | ? | ? | 2 | ? |
| 4 | 11 | ? | ? | 3 | ? |
| 5 | 10 | 50 | ? | 4 | ? |
| 6 | 9 | ? | 4 | 5 | ? |
| 7 | 8 | ? | ? | 6 | -4 |
In: Economics
Willingham Construction is in the business of building high-priced, custom, single-family homes. The company, headquartered in Anaheim, California, operates throughout the Southern California area. The construction period for the average home built by Willingham is six months, although some homes have taken as long as nine months.
You have just been hired by Willingham as the assistant controller and one of your first tasks is to evaluate the company’s revenue recognition policy. The company presently recognizes revenue upon completion for all of its projects and management is now considering whether revenue recognition over time is appropriate.
In: Accounting
Answer the following questions: a. Suppose that a firm is producing where 0 < MR < MC. What would happen to total revenue, total cost, and profit if the firm produced one less unit of output? b. Suppose that a firm is producing where MR > MC. What would happen to total revenue, total cost, and profit if the firm produced one more unit of output? c. If a firm produces the next unit of output, total revenue rises from $12,000 to $13,500 and the marginal cost of the next unit is $1,700. Should the firm produce the next unit of output? Question 34 options:
In: Economics
Determine the specific citation for accounting for each of the following items. List the citation and the FASB guidance to answer each of the following questions:
1. What are the five key steps to applying the revenue recognition principle?
2. What are indicators that control has passed from the seller to the buyer, such that it is appropriate to recognize revenue at a point in time?
3. Under what circumstances can sellers recognize revenue over time?
Prepare a Word document which includes your answers to the above questions and the supporting FASB citations.
Please be sure to include the exact FASB citation, not just the FASB information.
In: Accounting
Shown here are Caterpillar's annual global sales and revenue streams for the years 2004 through 2014. By observing the data graphically and analyzing the data statistically using techniques and concepts from this chapter (forecasting trend line, etc.), share your insights and conclusions about Caterpillar's annual global sales and revenue streams over this period of time.
| YEAR | SALES AND REVENUE STREAMS ($ BILLIONS) |
| 2004 | 30.31 |
| 2005 | 36.34 |
| 2006 | 41.52 |
| 2007 | 44.96 |
| 2008 | 51.32 |
| 2009 | 32.40 |
| 2010 | 42.59 |
| 2011 | 60.14 |
| 2012 | 65.88 |
| 2013 | 55.66 |
| 2014 | 55.18 |
In: Statistics and Probability