Part 1 -- Bonds:

1. National Company issued a 7.5% bond, dated January 1, 2020 with a face amount of $600,000 on January 1, 2020. The bonds mature on December 31, 2026. The market yield for bonds of similar risk and maturity was 5.5%. Interest is made semiannually on June 30 and December 31.

REQUIRED:

1. Determine the price of the bonds at January 1, 2020 (be certain to include all of the “Given” information as discussed in class).
2. Prepare a bond amortization table using the effective interest method (as reviewed in class), and make certain to obtain totals for the columns of Cash Interest Paid, Interest Expense, and Premium Amortization.
3. Prepare the journal entry to record their issuance by National Company on January 1, 2020.
4. Prepare the journal entry recording the first interest payment on June 30, 2020.
5. Prepare the journal entry recording the interest payment on December 31, 2020.
6. Prepare journal entries at maturity on December 31, 2026.
7. Prepare the journal entry to record the retirement of the bond at a call price of $640,000 on January 1, 2023.
8. Instead of retirement of the bond as described in “g” above, assume the bond was retired @108 call price on January 1, 2023. Prepare the journal entry to record this retirement of the bond.

Part 2 -- Installment note:

2. On January 1, 2020 National Company signed a $500,000, 7% installment note to be repaid with 8 equal annual installments to be first made on December 31, 2020, and then every December 31 thereafter.

REQUIRED:

1. Determine the amount of each annual payment.
2. Prepare an amortization table for this installment note (as reviewed in class).
3. Prepare the journal entry for the issuance of the installment note.
4. Prepare the journal entry for the first payment on the note.

1.) On June 1, 2020, Hanes Company purchased 10 computers with an invoice price of $50,000. Other costs incurred were sales tax $2,100, Freight $300, installation of $2,300, testing of $300, prepaid insurance to cover the computers; $3,600. The computers are estimated to have a 5-year life and $5,000 salvage value.

Instructions:

1. Find the cost of new computers. ___________________________

2. What is depreciation for 2020 and 2021 if the company uses the double-declining balance method.

2020 ______________________________                                                           

2021 ______________________________                                                                

2.) A company purchased factory equipment for $700,000 on August 1, 2020. It is estimated that the equipment will have a $70,000 salvage value at the end of its estimated 5-year useful life. If the company uses the double-declining-balance method of depreciation, the amount of annual depreciation recorded for the second year after purchase would be. (Round to whole dollars if necessary)

3.) A factory machine was purchased for $375,000 on November 1, 2021. It was estimated that it would have a $75,000 salvage value at the end of its 5-year useful life. It was also estimated that the machine would be run 40,000 hours in the 5 years. The company ran the machine for 4,000 actual hours in 2021. If the company uses the units-of-activity method of depreciation, the amount of depreciation expense for 2021 would be.

Problem 10-1 Acquisition costs [LO10-1, 10-2, 10-3, 10-4]

Tristar Production Company began operations on September 1, 2018. Listed below are a number of transactions that occurred during its first four months of operations. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)

1. On September 1, the company acquired five acres of land with a building that will be used as a warehouse. Tristar paid $230,000 in cash for the property. According to appraisals, the land had a fair value of $160,000 and the building had a fair value of $90,000.
2. On September 1, Tristar signed a $53,000 noninterest-bearing note to purchase equipment. The $53,000 payment is due on September 1, 2019. Assume that 8% is a reasonable interest rate.
3. On September 15, a truck was donated to the corporation. Similar trucks were selling for $3,800.
4. On September 18, the company paid its lawyer $4,000 for organizing the corporation.
5. On October 10, Tristar purchased maintenance equipment for cash. The purchase price was $28,000 and $1,150 in freight charges also were paid.
6. On December 2, Tristar acquired various items of office equipment. The company was short of cash and could not pay the $6,800 normal cash price. The supplier agreed to accept 200 shares of the company's nopar common stock in exchange for the equipment. The fair value of the stock is not readily determinable.
7. On December 10, the company acquired a tract of land at a cost of $33,000. It paid $4,000 down and signed a 10% note with both principal and interest due in one year. Ten percent is an appropriate rate of interest for this note.

Required:
Prepare journal entries to record each of the above transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round final answers to the nearest whole dollars.)
  

Felix, a U.S. technology company has recently developed a revolutionary wireless phone. The product offers exciting new features along with all of the features of current products, but at a fraction of the manufacturing costs. As the international business manager of Felix, you have been asked to choose the best mode of entry into the European market. Your have the following options: o Export your product from the United States. o Enter into an alliance with a large European company. o Manufacture the product in the United States and set up a wholly owned subsidiary in Europe. o License a European firm to manufacture and market the phone in Europe. In preparation for your choice, list the pros and cons of each method of entry. Which choice do you present to your CEO? Support your decision.

Facts taken from problem 5.64 in your textbook. Your long-time client, Central Office Supply, has been rapidly expanding, and the board of directors is considering taking the company public. CEO Terry Puckett has heard that costs of operating a public company have increased significantly as a result of the Sarbanes–Oxley Act. Puckett is particularly concerned with reports that audit fees have doubled because of internal control provisions of the act and PCAOB Auditing Standard No. 2201. Puckett has asked you to explain the possible effects on the audit of complying with the requirements of Sarbanes–Oxley.

Required: Outline for yourself your thoughts on the changes in the company's responsibilities for internal control and changes in the audit due to Sarbanes–Oxley and PCAOB Auditing Standard No. 2201.

What is McCormick & Company current SWOT Analysis in 2020

Towing Company manufactures and sells a single product for $40 per unit.
Variable costs are $30 per unit and fixed costs total $168,000. During
2019, the company sold 26,500 units of this product to customers. In
order to improve profitability, the president of Towing Company believes
the following changes should be made in 2020:

1. decrease the selling price of the product by 10%

2. automate a portion of the production process which will reduce
   variable costs by 5% per unit but will add an additional fixed
   cost of $16,310 per year

3. increase advertising by $49,420

Assume these changes are made. 
A) Calculate the number of units that Towing Company must sell in 2020 in order to earn a net income that is 20% greater than the net income earned in 2019.

B) Calculate the number of units that Towing Company must sell in 2020 in order to earn a target profit equal to 12% of sales.

Use the data in the following table for the next seven questions. Note that "%∆" is shorthand for "percentage change." If the answer is a percentage, please just enter the number. Thus, say an answer of yours is 3.5%, then below you would enter "3.5" (without the quotes) in the box below. Be careful not to include the percent symbol. Also, please use just one decimal place.

Q1: Is the rate of inflation for consumers from 2019 to 2020 correct? Yes or NO

What was the rate of economic growth from 2019 to 2020? (As in the directions above, just enter the percent number, such as 3.5 for 3.5%).

What was the inflation rate for the entire economy from 2019 to 2020?

Q2: What was the real interest rate for a consumer purchasing a house in 2020? They'll be taking out a home loan, often called a mortgage.

Please convert the nominal price for an apple from 1990 to the prices of 2020. Assume that a consumer purchases it.

What was the percentage change in the real price of apples from 2019 to 2020 for consumers?

Deflate the nominal price of apples from 2020 for consumers (that is, convert the 2020 nominal price to the base year of the CPI). Please use two decimal place for this answer.

Problem 7-5

1. William Company’s balance sheet at the end of 2019 (beginning of 2020) reported Accounts Receivable of $314,200 and Allowance for Doubtful Accounts of $4,710 (credit balance).
2. The company’s total sales during 2020 were $3,340,000. Of these, $501,000 were cash sales the rest were credit sales.
3. The company also wrote off an account for $4,152.
4. By the end of the year, the company had collected $2,516,680 of the credit sales.

Requirements

1. Create T-accounts for Accounts Receivables and the Allowance for Doubtful Accounts. Post the information from Item 1.
2. Prepare journal entries for Items 2, 3, & 4.
3. Post the journal entries. Calculate William Company’s balances for Accounts Receivable and the Allowance for Doubtful Accounts at the end of 2020, before the adjusting entry is made.
   1. What is the net realizable value at this point?
4. For each of the following separate scenarios, prepare the adjusting entry for bad debt.
   1. Williams Company estimates that 0.3% of credit sales will be uncollectible.
   2. Based on an aging of receivable, Williams Company estimates that $9,500 of the accounts will be uncollectible.
   3. Instead of the write-off being for $4,152, as stated in Item 3, the write-off was $5,152. Recalculate the balances in the Allowance for Doubtful Accounts and Accounts Receivable. Based on an aging of receivable, Williams Company estimates that $9,500 of the accounts will be uncollectible.
5. Based on the journal entry for each of the 3 scenarios in d., calculate the net realizable value that will be reported on the Balance Sheet. Also provide the amount of Bad Debt Expense that will appear on the Income Statement in the Operating Expenses section.