Questions
Blue Company began operations on January 2, 2016. It employs 10 individuals who work 8-hour days...

Blue Company began operations on January 2, 2016. It employs 10 individuals who work 8-hour days and are paid hourly. Each employee earns 12 paid vacation days and 7 paid sick days annually. Vacation days may be taken after January 15 of the year following the year in which they are earned. Sick days may be taken as soon as they are earned; unused sick days accumulate. Additional information is as follows.

Actual Hourly
Wage Rate

Vacation Days Used
by Each Employee

Sick Days Used
by Each Employee

2016

2017

2016

2017

2016

2017

$12 $13 0 10 5 6


Blue Company has chosen not to accrue paid sick leave until used, and has chosen to accrue vacation time at expected future rates of pay without discounting. The company used the following projected rates to accrue vacation time.

Year in Which Vacation
Time Was Earned

Projected Future Pay Rates
Used to Accrue Vacation Pay

2016 $12.36
2017   13.34

Prepare journal entries to record transactions related to compensated absences during 2016 and 2017

Compute the amounts of any liability for compensated absences that should be reported on the balance sheet at December 31, 2016 and 2017.

In: Accounting

Homestead Oil Corp. was incorporated on January 1, 2016, and issued the following stock for cash:...

Homestead Oil Corp. was incorporated on January 1, 2016, and issued the following stock for cash:

  

700,000 shares of no-par common stock were authorized; 150,000 shares were issued on January 1, 2016, at $18.00 per share.

250,000 shares of $110 par value, 8.00% cumulative, preferred stock were authorized, and 71,000 shares were issued on January 1, 2016, at $140 per share.

Net income for the years ended December 31, 2016 and 2017, was $1,450,000 and $2,490,000, respectively.

No dividends were declared or paid during 2016. However, on December 28, 2017, the board of directors of Homestead declared dividends of $1,600,000, payable on February 12, 2018, to holders of record as of January 19, 2018.

Prepare the journal entries to record each of the below transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

The issuance of common stock and preferred stock on January 1, 2016.

The declaration of dividends on December 28, 2017.

The payment of dividends on February 12, 2018.

Note: Enter debits before credits.

Date General Journal Debit Credit
January 01, 2016

b. Of the total amount of dividends declared during 2017, how much will be received by preferred shareholders?

Dividends received by Preferred shareholders

In: Accounting

Benjamin, Inc., operates an export/import business. The company has considerable dealings with companies in the country...

Benjamin, Inc., operates an export/import business. The company has considerable dealings with companies in the country of Camerrand. The denomination of all transactions with these companies is alaries (AL), the Camerrand currency. During 2015, Benjamin acquires 20,000 widgets at a price of 8 alaries per widget. It will pay for them when it sells them. Currency exchange rates for 1 AL are as follows:


  September 1, 2015 $ 0.46
  December 1, 2015 0.44
  December 31, 2015 0.48
  March 1, 2016 0.45


a.

Assume that Benjamin acquired the widgets on December 1, 2015, and made payment on March 1, 2016. What is the effect of the exchange rate fluctuations on reported income in 2015 and in 2016?

Effect of Exchange Rate Fluctuations
2015
2016


b.

Assume that Benjamin acquired the widgets on September 1, 2015, and made payment on December 1, 2015. What is the effect of the exchange rate fluctuations on reported income in 2015? (Input the amount as a positive value.)

Effect of Exchange Rate Fluctuations
2015

      

c.

Assume that Benjamin acquired the widgets on September 1, 2015, and made payment on March 1, 2016. What is the effect of the exchange rate fluctuations on reported income in 2015 and in 2016?

Effect of Exchange Rate Fluctuations
2015
2016

In: Accounting

The following are the financial statements of Rigolo Inc. Balance sheet 20116 2015 Assets       Current...

The following are the financial statements of Rigolo Inc.

Balance sheet

20116

2015

Assets

      Current assets

           Cash & cash equivalents

           Account receivables

           Inventory

           Other current assets

               Total current assets

     L.T. Assets

          PPE

               Total Assets

Liabilities & Shareholders’ Equity

      Current liabilities

            Accounts payable

            Current maturities of notes payable

            Accrued expenses

            Other current liabilities

                   Total current liabilities

      L.T. Liabilities

             Bank loans

                    Total liabilities

Shareholders’ equity

       Common stock

       Retained earnings

                   Total shareholders equity

                   Total shareholders equity & liab.

The balance is well-balanced

       4,100

2,733,148

1,389,390

     13,901

4,140,539

   322,586

4,463,125

   276,556

1,834,858

   151,817

   128,632

2,391,863

1,824,764

4,216,627

   46,499

199,999

246,498

4,463,125

      3,100

1,941,002

1,468,257

              0

3,412,359

    60,640

3,472,999

256,419

337,881

169,067

161,905

925,272

2,400,000

3,325,272

   46,499

101,228

147,727

3,472,999

Statement of income

2016

2015

Revenue

Cost of Good Sold

     Gross profit on sales

Operating expenses

Repairs and maintenance

Depreciation & Amortization

Interest expense

     Total expenses

Net income before taxes

Provision for income taxes

Net income

$17,285,211

14,947,152

    2,338,059

   1,871,538

        84,483

        25,688

      215,246

   2,196,955

      141,104

        42,333

        98,771

$13,999,979

11,920,400

    2,079,579

    1,529,231

       107,123

         24,410

       255,003

    1,915,767

       163,812

         65,525

         98,287

Rigolo Inc, has paid $10,000 to its preferred shareholders in 2016

Tasks: (i) Compute the ROA

          (ii) Compute the ROCE

          (iii) Compute the Account Receivable Turnover

          (iv) Compute the Inventory Turnover

          (v) Compute the Basic EPS

          (vi) Compute the diluted EPS

Note: Provide for each ratio: the financial meaning and the formula used for its computation. Do not just put numbers.

In: Accounting

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