journalize each transaction.

Background:

Top Quality Appliance - Long Beach has just purchased a franchise from Top Quality Appliance (TQA). TQA is a manufacturer of kitchen appliances. TQA markets its products via retail stores that are operated as franchises. As a TQA franchise, Top Quality Appliance - Long Beach will receive many benefits, including having the exclusive rights to sell TQA brand appliances in Long Beach. In exchange for these benefits, Top Quality Appliance - Long Beach will pay an annual franchise fee to TQA based on a percentage of sales. The annual franchise fee is a separate cost and in addition to the purchase of the franchise. Top Quality Appliances - Long Beach entered into all transactions listed in the Transactions section below during 2018, its first year of operations.

01/01/2018

Received $500,000 cash and issued common stock. Opened a new checking account at Long Beach National Bank and deposited the cash received from the stockholders.

01/01/2018

Paid $50,000 cash for the TQA franchise.

01/01/2018

Paid $75,000 for store fixtures.

01/01/2018

Paid $45,000 for office equipment.

01/01/2018

Paid $600 for office supplies.

01/01/2018

Paid $3,600 for a two-year insurance policy.

01/01/2018

Paid $200,000 cash and issued a $400,000, 10-year, 5% notes payable for land with an existing building. An independent appraiser valued the land and building at $100,000 and $500,000, respectively.

01/10/2018

Purchased appliances from TQA (merchandise inventory) on account for $425,000.

01/15/2018

Established a petty cash fund for $150.

01/20/2018

Sold appliances on account to B&B Contractors for $215,000, terms n/30 (cost, $86,000). Record two separate entries.

02/01/2018

Sold appliances to Davis Contracting for $150,000 (cost, $65,000), receiving a 6-month, 8% note. Record two separate entries.

02/05/2018

Recorded credit card sales of $80,000 (cost, $35,000), net of processor fee of 2%. Record two separate entries.

02/24/2018

Received payment in full from B&B Contractors.

03/01/2018

Purchased appliances from TQA on account, $650,000.

04/01/2018

Made payment on account to TQA, $300,000.

06/01/2018

Sold appliances for cash to LB Home Builders for $350,000 (cost, $175,000). Record two separate entries.

08/01/2018

Received payment in full on the maturity date from Davis Contracting for the note from February 1.

11/01/2018

Sold appliances to Leard Contracting for $265,000 (cost, $130,000), receiving a 9-month, 8% note. Record two separate entries.

11/03/2018

Made payment on account to TQA, $500,000.

11/10/2018

Sold appliances on account to various businesses for $985,000, terms n/30 (cost, $395,000). Record two separate entries.

11/15/2018

Collected $715,000 cash on account.

12/01/2018

Paid cash for expenses: Salaries, $180,000; Utilities, $12,650 (prepare one compound entry).

12/01/2018

Replenished the petty cash fund when the fund had $62 in cash and petty cash tickets for $85 for office supplies.

12/15/2018

Paid dividends, $5,000.

12/31/2018

Paid the franchise fee to TQA of 5% of total sales of $2,045,000.

12/31/2018

The bank reconciliation revealed $1,565 of interest earned on the checking account.

12/31/2018

The bank reconciliation revealed bank fees totaling $2,465 for the year.

12/31/2018

(Adjustment 9) Calculate the interest owed on the note payable.

12/31/2018

(Adjustment 2) Management estimated that 5% of Accounts Receivable will be uncollectible.

12/31/2018

(Adjustment 3) An inventory of office supplies indicates $475 of supplies have been used.

12/31/2018

(Adjustment 4) Accrued interest revenue on the Leard Contracting note (round your answer to the nearest whole dollar).

12/31/2018

(Adjustment 5) Record depreciation expense on the building. The company uses the straight-line depreciation method, and believes the building will last for 30 years and have a $50,000 residual value.

12/31/2018

(Adjustment 6) Record depreciation expense on the fixtures. The company uses straight-line depreciation method, and believes the fixtures will last for 15 years with zero residual value.

12/31/2018

(Adjustment 7) Record depreciation expense on the office equipment. The company uses the double declining-balance depreciation method, and believes the equipment will last for 5 years and have a $5,000 residual value.

12/31/2018

(Adjustment 8) Record amortization expense for the year on the franchise, which has a 10-year life.

12/31/2018

(Adjustment 1) One year of the prepaid insurance has expired.

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On January 1, 2018, the Mason Manufacturing Company began construction of a building to be used as its office headquarters. The building was completed on September 30, 2019.

Expenditures on the project were as follows:

On January 1, 2018, the Mason Manufacturing Company began construction of a building to be used as its office headquarters. The building was completed on September 30, 2019.

Expenditures on the project were as follows:

On January 1, 2018, the company obtained a $4,600,000 construction loan with a 15% interest rate. The loan was outstanding all of 2018 and 2019. The company’s other interest-bearing debt included two long-term notes of $2,000,000 and $8,000,000 with interest rates of 8% and 12%, respectively. Both notes were outstanding during all of 2018 and 2019. Interest is paid annually on all debt. The company’s fiscal year-end is December 31.

Required:
1. Calculate the amount of interest that Mason should capitalize in 2018 and 2019 using the specific interest method.
2. What is the total cost of the building?
3. Calculate the amount of interest expense that will appear in the 2018 and 2019 income statements.

Calculate the amount of interest that Mason should capitalize in 2018 and 2019 using the specific interest method and interest expense that will appear in the 2018 and 2019 income statements. (Enter your answers in dollars.)

What is the total cost of the building? (Enter your answer in dollars.)

1. We discussed two price indexes, the Consumer Price Index (CPI) being an example of an index that has fixed quantity weights from the base period and the GDP Deflator being an example of an index that has current quantity weights. Suppose we have an economy in which there are only three goods produced and consumed: rice, electricity, and cellphones. The prices and quantities for the years 2018 and 2019 are given in the following table:

1. 1.1) Determine the equivalent of current dollar GDP for this economy in 2018 and in 2019. What was the percentage change in nominal GDP from 2018 to 2019?

1. 1.2) Determine the equivalent of the CPI (use 2018 as the base) for 2018 and for 2019 in this economy.

1. 1.3) Compute the equivalent of the GDP deflator (again use 2018 as the base) for 2018 and 2019 in this economy.

1. 1.4) Compute the rate of price increase from 2018 to 2019 using the two different price indexes.

1. 1.5) If 2018 is the base period determine the equivalent of 2019 GDP in constant 2018 dollars for this economy. What was the percentage change in real GDP from 2018 to 2019?

1. 1.6) Based on your answer to Question 1.5, what do you think is likely to have happened to unemployment rates between 2018 and 2019? How does this relate to your result in Question 1.1?

The question has all the given information.

On January 1, 2018, the Mason Manufacturing Company began construction of a building to be used as its office headquarters. The building was completed on September 30, 2019.

Expenditures on the project were as follows:

On January 1, 2018, the company obtained a $3,800,000 construction loan with a 15% interest rate. The loan was outstanding all of 2018 and 2019. The company’s other interest-bearing debt included two long-term notes of $4,000,000 and $6,000,000 with interest rates of 8% and 10%, respectively. Both notes were outstanding during all of 2018 and 2019. Interest is paid annually on all debt. The company’s fiscal year-end is December 31.

Required:
1. Calculate the amount of interest that Mason should capitalize in 2018 and 2019 using the specific interest method.
2. What is the total cost of the building?
3. Calculate the amount of interest expense that will appear in the 2018 and 2019 income statements.

1 & 3. Calculate the amount of interest that Mason should capitalize in 2018 and 2019 using the specific interest method and interest expense that will appear in the 2018 and 2019 income statements. (Enter your answers in dollars.)

2. What is the total cost of the building? (Enter your answer in dollars.)

Exercise 12-25 (Algorithmic)
Fair Value and Equity Methods

Nadal Corporation purchased 8,800 common shares of Beck Inc., on January 1, 2018, for $107,000. During 2018, Beck declared and paid cash dividends to Nadal in the amount of $7,000. Nadal's share of Beck's net income for 2018 was $5,700. At December 31, 2018, the fair value of the 10,000 shares was $122,000. This is Nadal's only investment.

Required:

1. Assume that Beck has 66,000 common shares outstanding. What journal entries will Nadal make during 2018 relative to this investment?

2. Assume that Beck has 35,200 common shares outstanding. What journal entries will Nadal make during 2018 relative to this investment?

Could you write detailed calculation getting 2018 Dec 31 Investments-Equity Method and Investment Income-Equity Method

11.

Cendant Corporation's results for the year ended December 31, 2018, include the following material items:

Cendant Corporation's income from continuing operations before income taxes for 2018 is:

Multiple Choice

a. $956,600.

b. $898,000.

c. $960,000.

d. $407,000.

12.

Schneider Inc. had salaries payable of $61,000 and $90,600 at the end of 2017 and 2018, respectively. During 2018, Schneider recorded $620,300 in salaries expense in its income statement. Cash outflows for salaries in 2018 were:

Multiple Choice

a. $590,700.

b. $529,700.

c. $649,900.

d. $620,300.

13.

Howard Inc. had prepaid rent of $77,000 and $84,000 at the end of 2017 and 2018, respectively. During 2018, Howard recorded $242,000 in rent expense in its income statement. Cash outflows for rent in 2018 were:

Multiple Choice

a. $235,000.

b. $242,000.

c. $249,000.

d. $256,000.

14.

Martel Co. had supplies of $27,000 and $39,000 at the end of 2017 and 2018, respectively. During 2018, Howard paid $134,000 for supplies. Supplies expense in the 2018 income statement was:

Multiple Choice

a. $122,000.

b. $134,000.

c. $146,000.

d. $110,000.

15.

Stinley Co. paid utilities of $144,000 during 2018. At the end of 2018, utilities payable equals $40,000 and utilities expense equals $165,000. What was the balance of utilities payable at the beginning of 2018?

Multiple Choice

a. $42,000.

b. $19,000.

c. $40,000.

d. $21,000.

Problem 17-12 Determine pension expense; journal entries; two years [LO17-3, 17-4, 17-5, 17-6, 17-7, 17-8]

The Kollar Company has a defined benefit pension plan. Pension information concerning the fiscal years 2018 and 2019 are presented below ($ in millions):

Information Provided by Pension Plan Actuary:

1. Projected benefit obligation as of December 31, 2017 = $3,950.
2. Prior service cost from plan amendment on January 2, 2018 = $850 (straight-line amortization for 10-year average remaining service period).
3. Service cost for 2018 = $690.
4. Service cost for 2019 = $740.
5. Discount rate used by actuary on projected benefit obligation for 2018 and 2019 = 10%.
6. Payments to retirees in 2018 = $550.
7. Payments to retirees in 2019 = $620.
8. No changes in actuarial assumptions or estimates.
9. Net gain—AOCI on January 1, 2018 = $465.
10. Net gains and losses are amortized for 10 years in 2018 and 2019.

Information Provided by Pension Fund Trustee:

1. Plan asset balance at fair value on January 1, 2018 = $2,800.
2. 2018 contributions = $710.
3. 2019 contributions = $760.
4. Expected long-term rate of return on plan assets = 12%.
5. 2018 actual return on plan assets = $260.
6. 2019 actual return on plan assets = $310.

Required:

1. Calculate pension expense for 2018 and 2019.
2. Prepare the journal entries for 2018 and 2019 to record pension expense.
3. Prepare the journal entries for 2018 and 2019 to record any gains and losses and new prior service cost.
4. Prepare the journal entries for 2018 and 2019 to record the cash contribution to plan assets and benefit payments to retirees.

Problem 17-12 Determine pension expense; journal entries; two years [LO17-3, 17-4, 17-5, 17-6, 17-7, 17-8]

The Kollar Company has a defined benefit pension plan. Pension information concerning the fiscal years 2018 and 2019 are presented below ($ in millions):

Information Provided by Pension Plan Actuary:

Projected benefit obligation as of December 31, 2017 = $1,850.

Prior service cost from plan amendment on January 2, 2018 = $550 (straight-line amortization for 10-year average remaining service period).

Service cost for 2018 = $550.

Service cost for 2019 = $600.

Discount rate used by actuary on projected benefit obligation for 2018 and 2019 = 10%.

Payments to retirees in 2018 = $410.

Payments to retirees in 2019 = $480.

No changes in actuarial assumptions or estimates.

Net gain—AOCI on January 1, 2018 = $245.

Net gains and losses are amortized for 10 years in 2018 and 2019.

Information Provided by Pension Fund Trustee:

Plan asset balance at fair value on January 1, 2018 = $1,400.

2018 contributions = $570.

2019 contributions = $620.

Expected long-term rate of return on plan assets = 12%.

2018 actual return on plan assets = $120.

2019 actual return on plan assets = $170.

Required:

1. Calculate pension expense for 2018 and 2019.
2. Prepare the journal entries for 2018 and 2019 to record pension expense.
3. Prepare the journal entries for 2018 and 2019 to record any gains and losses and new prior service cost.
4. Prepare the journal entries for 2018 and 2019 to record the cash contribution to plan assets and benefit payments to retirees.