Entries for Installment Note Transactions

On January 1, Year 1, Bryson Company obtained a $33,000, four-year, 8% installment note from Campbell Bank. The note requires annual payments of $9,963, beginning on December 31, Year 1.

a. Prepare an amortization table for this installment note, similar to the one presented in Exhibit 4.

Note: Round the computation of the interest expense to the nearest whole dollar. Enter all amounts as positive numbers. In Year 4, round the amount in the Decrease in Notes Payable column either up or down to ensure that the Carrying Amount zeroes out.

b. Journalize the entries for the issuance of the note and the four annual note payments.

Note: For a compound transaction, if an amount box does not require an entry, leave it blank. For the Year 4 entry (due to rounding), adjust Notes Payableup or down to ensure that debits equal credits.

c. How will the annual note payment be reported in the Year 1 income statement?
of $ would be reported on the income statement.

Bosworth Corporation accepted a 5-year note receivable from Steelman Company on January 1, Year 1. The maturity value of the note is $ 760,000. The note has a stated interest rate of 10%. However, the prevailing market interest rate is 12%. The note requires interest payments on June 30 and December 31. What is the present value of this note at inception ANSWER:$704, 063 ( I would like to know how to calculate)

2. Eagle Exporters purchased​ 80,000 of the​ 200,000 outstanding shares of Giant Distributors for​ $3,000,000. Eagle has significant influence over Giant and will account for this investment using the equity method. During the​ year, Giant declared dividends of​ $100,000 and reported Net Income of​ $780,000. What is the balance in the Investment in Giant account at year​ end? correct answer: $3, 272,000 ( I want to know how to calculate)

3. Cider Jewelers purchased​ 3,000,000 of the outstanding​ 10,000,000 shares of Angel​ & Associates. At the time of the​ acquisition, the book value of​ Angel's net assets equals their fair market value. Angel declared and paid dividends of $ 290 000 during the year. Which of the following is the correct journal entry for this​ transaction?

Forten Company, a merchandiser, recently completed its calendar-year 2017 operations. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses. The company’s income statement and balance sheets follow.

Additional Information on Year 2017 Transactions

The loss on the cash sale of equipment was $24,125 (details in b).

Sold equipment costing $103,875, with accumulated depreciation of $49,125, for $30,625 cash.

Purchased equipment costing $115,375 by paying $68,000 cash and signing a long-term note payable for the balance.

Borrowed $5,900 cash by signing a short-term note payable.

Paid $59,625 cash to reduce the long-term notes payable.

Issued 4,400 shares of common stock for $20 cash per share.

Declared and paid cash dividends of $53,900.

Required:
Prepare a complete statement of cash flows; report its operating activities according to the direct method. (Amounts to be deducted should be indicated with a minus sign.)

Forten Company, a merchandiser, recently completed its calendar-year 2017 operations. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses. The company’s income statement and balance sheets follow.

Additional Information on Year 2017 Transactions

The loss on the cash sale of equipment was $5,125 (details in b).

Sold equipment costing $46,875, with accumulated depreciation of $30,125, for $11,625 cash.

Purchased equipment costing $96,375 by paying $30,000 cash and signing a long-term note payable for the balance.

Borrowed $4,000 cash by signing a short-term note payable.

Paid $50,125 cash to reduce the long-term notes payable.

Issued 2,500 shares of common stock for $20 cash per share.

Declared and paid cash dividends of $50,100.

Required

Prepare a complete statement of cash flows; report its operating activities using the indirect method. Disclose any noncash investing and financing activities in a note.

Check Cash from operating activities, $40,900

Analysis Component

Analyze and discuss the statement of cash flows prepared in part 1, giving special attention to the wisdom of the cash dividend payment.

Forten Company, a merchandiser, recently completed its calendar-year 2017 operations. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses. The company’s income statement and balance sheets follow.

Additional Information on Year 2017 Transactions

The loss on the cash sale of equipment was $18,125 (details in b).

Sold equipment costing $85,875, with accumulated depreciation of $43,125, for $24,625 cash.

Purchased equipment costing $109,375 by paying $56,000 cash and signing a long-term note payable for the balance.

Borrowed $5,300 cash by signing a short-term note payable.

Paid $56,625 cash to reduce the long-term notes payable.

Issued 3,800 shares of common stock for $20 cash per share.

Declared and paid cash dividends of $52,700.

Required:
1. Prepare a complete statement of cash flows; report its operating activities using the indirect method. (Amounts to be deducted should be indicated with a minus sign.)

Suppose today two-year US treasury bill is 2.15% and the two-year UK treasury bill is 1.0%. Further suppose today spot exchange rate is USD 1.25 per Euro and you know you will receive one million euro exactly two years from now and you will have to exchange those Euros in USD at that time. Can you engineer a guaranteed exchange rate at which you will be able to exchange the Euros for USD two years from now? Explain the arrangements.

Fey Fashions expects the following dividend pattern over the next seven​ years:

The company will then have a constant dividend of ​$2.00 forever. What is the​ stock's price today if an investor wants to earn

a. 17​%? $_______ (Round to the nearest​ cent.)

b. 22​%? $_______ (Round to the nearest​ cent.)

Forten Company, a merchandiser, recently completed its calendar-year 2017 operations. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses. The company’s income statement and balance sheets follow.

Problem 12-5AB Direct: Statement of cash flows LO P1, P3, P5

Additional Information on Year 2017 Transactions

The loss on the cash sale of equipment was $19,125 (details in b).

Sold equipment costing $88,875, with accumulated depreciation of $44,125, for $25,625 cash.

Purchased equipment costing $110,375 by paying $58,000 cash and signing a long-term note payable for the balance.

Borrowed $5,400 cash by signing a short-term note payable.

Paid $57,125 cash to reduce the long-term notes payable.

Issued 3,900 shares of common stock for $20 cash per share.

Declared and paid cash dividends of $52,900.

Required:
Prepare a complete statement of cash flows; report its operating activities according to the direct method. (Amounts to be deducted should be indicated with a minus sign.)
  

On August 1, Year 1 Hernandez Company loaned $48,000 cash to Acosta Company. The one-year note carried a 5% rate of interest. Which of the following shows how the accrual of interest revenue in Year 2 will effect Hernandez’s financial statements?