How do closing entries simplify recordkeeping? Give an example of an adjusting entry that could is closed. :) .

On January 1, 2020, Digital, Inc. leased heavy machinery from Young Leasing
Company. The terms of the lease require annual payments of $25,000 for 20
years beginning on December 31, 2020. The interest rate on the lease is 10%.
Assume the lease qualifies as a capital lease and Digital, Inc. employs the
double-declining balance method to depreciate its assets. 

Use the time value of money factors posted in carmen to answer this question. No credit will be
awarded for this question using a means other than these table factors to answer this question.

1) Calculate the book value of the leased asset at December 31, 2022.

2) Calculate the balance in the lease liability account on December 31, 2021 after the second lease payment is made.

3) Calculate the amount of the lease liability at December 31, 2021 that would be classified as a current liability.

On November 1, 2017, Concord Company adopted a stock-option plan that granted options to key executives to purchase 39,000 shares of the company’s $9 par value common stock. The options were granted on January 2, 2018, and were exercisable 2 years after the date of grant if the grantee was still an employee of the company. The options expired 6 years from date of grant. The option price was set at $30, and the fair value option-pricing model determines the total compensation expense to be $585,000. All of the options were exercised during the year 2020: 26,000 on January 3 when the market price was $69, and 13,000 on May 1 when the market price was $80 a share.

Prepare journal entries relating to the stock option plan for the years 2018, 2019, and 2020. Assume that the employee performs services equally in 2018 and 2019

The information below relates to ABC Company for the year ended 30 June 2020.

Sales revenue 352,000
Accrued wages 15,000
Bank balance 1 July 2019 ($22,000)
Cash paid to suppliers 192,200
Cash receipts from customers 294,000
Payments to employees and for expenses 25,000
Bank loan received 6,600
Property taxes paid 20,000
Depreciation of equipment 45,600
Interest received 20,500
Cash received from sale of share market investments 55,000
Cash paid to purchase computer hardware 40,000
Issued shares in exchange for block of land 100,000
Dividends paid 29,000
Interest paid 30,000
Net profit after tax 76,000

Required:
a) Prepare ABC Statement of Cash Flows for the year ended 30 June 2020.

b) What is the most important section in ABC's Statement of Cash Flow? Explain.

5. You have married into a family business and you are in charge of the finances. Your father-in-law is considering an IPO and has asked you to come up with estimates for the equity value. Here are the figures you have been able to come up with so far:
   1. 2021 free cash flow: $9.0MM
   2. 2022 free cash flow: $9.8MM
   3. 2023 free cash flow: $10.5MM
   4. Annual FCF growth after 2022: grows at 2%
   5. 2020 EBITDA: $9.5MM
   6. 2020 Net Income: $6.0MM
   7. Company WACC (discount rate): 12%
   8. Total debt: $6MM
   9. Overall PE ratio for similar companies: 20x
   10. EV / EBITDA multiple that similar companies have sold for: 10x

Develop a free cash flow discounted valuation PLUS any other two valuation methods to estimate the total value of Equity.                                   

Monty Inc. manufactures cycling equipment. Recently, the vice president of operations of the company has requested construction of a new plant to meet the increasing demand for the company’s bikes. After a careful evaluation of the request, the board of directors has decided to raise funds for the new plant by issuing $3,258,500 of 8% term corporate bonds on March 1, 2020, due on March 1, 2035, with interest payable each March 1 and September 1, with the first interest payment on September 1st, 2020. At the time of issuance, the market interest rate for similar financial instruments is 6%.

Click here to view factor tables

As the controller of the company, determine the selling price of the bonds. (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.)

Smirk Co. purchased machinery on July 1, 2016 for $68,000, and intends to use the machinery for 10 years. After 10 years, Smirk estimates the machinery will sell for $3,000. Smirk will use the revaluation model to account for machinery. The fair value of machinery on December 31, 2019 (the first revaluation date) is $50,000.

Required

(a)    If Smirk uses the double diminishing balance method to calculate depreciation, calculate depreciation expense for 2016

(b)   Assuming Smirk uses the straight-line method for depreciation, prepare all necessary journal entries relating to the machinery at December 31, 2019.

(c)    On July 1, 2020, Smirk gets a great deal on some new machinery and sells its old machinery for $45,000 cash. Prepare all journal entries necessary at July 1, 2020 relating to its old machinery (i.e. ignoring the recognition of its new machinery).

On November 1, 2017, Blue Company adopted a stock-option plan that granted options to key executives to purchase 30,000 shares of the company’s $10 par value common stock. The options were granted on January 2, 2018, and were exercisable 2 years after the date of grant if the grantee was still an employee of the company. The options expired 6 years from date of grant. The option price was set at $30, and the fair value option-pricing model determines the total compensation expense to be $450,000. All of the options were exercised during the year 2020: 20,000 on January 3 when the market price was $69, and 10,000 on May 1 when the market price was $78 a share. Prepare journal entries relating to the stock option plan for the years 2018, 2019, and 2020. Assume that the employee performs services equally in 2018 and 2019.

On November 1, 2017, Sandhill Company adopted a stock-option plan that granted options to key executives to purchase 28,500 shares of the company’s $10 par value common stock. The options were granted on January 2, 2018, and were exercisable 2 years after the date of grant if the grantee was still an employee of the company. The options expired 6 years from date of grant. The option price was set at $30, and the fair value option-pricing model determines the total compensation expense to be $427,500.

All of the options were exercised during the year 2020: 19,000 on January 3 when the market price was $67, and 9,500 on May 1 when the market price was $77 a share.

Prepare journal entries relating to the stock option plan for the years 2018, 2019, and 2020. Assume that the employee performs services equally in 2018 and 2019.

Let G be a graph. For each of the following, determine if the statement is true or false. If it's true, provide a proof and if it's false, provide a counterexample.

(a) G has a cycle if and only if G has a circuit

(b) G has a closed walk if and only if G has a circuit

(c) G has an odd-lengthed cycle if and only if G has an odd-lengthed circuit

(d) G has an odd-lengthed closed walk if and only if G has an odd- lengthed circuit