QUESTION 3
A manager at Stalemate, a chess business retailing chess boards and providing chess lessons, requires help with interpreting some of the accounting transactions that took place during the month of September 2020. The manager has provided you with a list of those transactions below.
Required:
Underneath each transaction in the space provided, write a brief narration describing the economic event that corresponds to that transaction.
|
Date |
Account titles (Details) |
Dr ($) |
Cr ($) |
|
2/9/2020 |
Cash |
3,000 |
|
|
Accounts Receivable |
2,500 |
||
|
GST Collected |
500 |
||
|
Service Revenue |
5,000 |
||
|
Answer here: |
|||
|
3/9/2020 |
Wages Payable |
6,500 |
|
|
Cash |
6,500 |
||
|
Answer here: |
|||
|
15/9/2020 |
Chess boards |
10,000 |
|
|
GST Paid |
1,000 |
||
|
Accounts Payable |
5,000 |
||
|
Cash |
5,100 |
||
|
Answer here: |
|||
|
30/9/2020 |
Accounts Payable |
15,000 |
|
|
Bank Loan |
15,000 |
||
|
Answer here: |
|||
|
30/9/2020 |
Rent Expense |
2,000 |
|
|
Prepaid Rent |
2,000 |
||
|
Answer here: |
|||
|
30/9/2020 |
Unearned Revenue |
10,000 |
|
|
Service Revenue |
10,000 |
||
|
Answer here: |
|||
In: Accounting
On January 1, 2020, Jens Corp. acquired 8%, $ 100,000 (face value) bonds of World Wide Ltd., to yield 9% for $95,517.20. The bonds were dated January 1, 2020, and mature on December 31, 2025, with interest payable each year on January 1. Jen intends to hold the bonds to maturity, and will use the FV–NI model and the effective-interest method of amortization of bond premium or discount. Assume that the fair market value of the bonds was equal to Jens investment’s book value in 2020, but in 2021, the fair market value of the bonds were $101,000 at the end of 2020.
Required: (Round all answers to the nearest dollar.)
(1) Prepare an amortization schedule ‘proving’ the price that Jen paid for the bonds.
(2) Prepare the following entries in Jen's books:
a) Acquisition of bonds on January 1, 2020,
b) Year-end adjusting entry at December 31, 2020, and December 31, 2021.
c) Receipt of the first interest payment on January 1, 2021.
d) Any adjusting entry required at the end of 2020 in addition to the any journal entries recorded above.
In: Accounting
Demand and supply. Show in a diagram the effect on the demand curve, the supply
curve, the equilibrium price and quantity of each of the following pairs of events.
a. The market for hand-sanitizers in New York at the beginning of April 2020.
i. The number of Covid-19 cases increases exponentially starting from 1st March 2020;
ii. On March 9, 2020 New York State Governor Andrew Cuomo allowed for state
production of hand-sanitizers.
b. The market for touristic services in Spain in Summer 2020.
i. The European Union imposes travel restrictions to free movement of people (for
leisure) due to the healthcare crisis following the Covid-19 pandemic.
ii. New cleaning protocols require higher standard of sanitization in hotels and public
places to prevent the coronavirus from spreading.
c. The market for real estate in Italy in Spring 2020.
i. Due to the severe restrictions imposed by the lockdown starting from 5th March 2020,
a growing number of families searched for homes with a garden;
ii. The lockdown period produced a GDP fall by 12.4% in second quarter 2020
In: Economics
Crane Company has a July 31 fiscal year end and uses a perpetual
inventory system. The records of Crane Company show the following
data:
| 2021 | 2020 | 2019 | |||||||
| Income statement: | |||||||||
| Sales | $350,000 | $325,000 | $360,000 | ||||||
| Cost of goods sold | 247,000 | 228,000 | 273,000 | ||||||
| Operating expenses | 70,000 | 70,000 | 70,000 | ||||||
| Balance sheet: | |||||||||
| Merchandise inventory | 52,000 | 44,000 | 35,000 | ||||||
After its July 31, 2021, year end, Crane discovered two
errors:
| 1. | At July 31, 2020, Crane had $10,000 of goods held on consignment at another company that were not included in the physical count. | |
| 2. | In July 2020, Crane recorded a $15,000 inventory purchase on account that should have been recorded in August 2020. |
Prepare corrected income statements for Crane for the years
ended July 31, 2019, 2020, and 2021.
Calculate the incorrect and correct inventory turnover ratios for
2020 and 2021. (Round answers to 2 decimal places, e.g.
52.75.)
| 2020 | 2021 | |||||
| Incorrect inventory turnover | times | times | ||||
| Correct inventory turnover | ||||||
In: Accounting
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In: Accounting
For your fictitious healthcare service, you will create a balance sheet and income statement based upon the following financial transactions occurring during your start-up year:
6. May 1, 2020 through December 31, 2020: You use $30,000 in supplies to provide healthcare services to your patients each month. You record the use of supplies on the last day of each month.
7. June 1, 2020: You pay your suppliers $80,000 for supplies purchased on credit.
8. July 1, 2020: You receive payments from health insurance companies totaling $250,000.
9. August 1, 2020:
a. You purchase $160,000 of supplies on credit for use in caring for your patients.
b. You receive payments from health insurance companies totaling $320,000
10. September 1, 2020: You receive payments from health insurance companies totaling $225,000.
11. October 1, 2020: You receive payments from health insurance companies totaling $310,000.
In: Accounting
Blanchard Inc. acquired a packaging machine from CCC Corporation. CCC Corporation completed construction of the machine on January 1, 2020. In payment for the $5 million machine, Blanchard Inc. issued a three-year installment note to be paid in three equal payments at the end of each year. The payments include interest at the rate of 8%.
1. Prepare the journal entry for Blanchard’s purchase of the machine on January 1, 2020.
|
January 1, 2020: |
||
2. Prepare the partial amortization schedule for the first two years of the 3-year installment note.
|
Amount of loan |
|
|
÷ Present value of an ordinary annuity (PVA) of $1 |
|
|
Installment payment (rounded up to the nearest integer) |
|
Date |
Cash |
Effective |
Decrease in Balance |
Outstanding |
|
1/1/2020 |
||||
|
12/31/2020 |
||||
|
12/31/2021 |
||||
|
12/31/2022 |
Not required |
Not required |
Not required |
Not required |
3. Prepare the journal entry for the installment payments on December 31, 2020 and December 31, 2021.
|
December 31, 2020: |
||
|
December 31, 2021: |
||
In: Accounting
Which one of the following types of securities has tended to produce the lowest real rate of return for the period 1969 through 2010?
A. Real Estate
B. Long-term government bonds
C. Long-term corporate bonds
D. Stocks
E. U.S. Treasury bills
In: Finance
. The amount spent in billions for online ads per year is shown below. Construct a time series plot of the data and describe the trend. please help with graphing and explaining
| year | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 |
| amount | $68.4 | $80.2 | $94.2 | $106.1 | $119.8 | $132.1 |
In: Statistics and Probability
What is the regression model for the data? Is this a good model?
Year 2006 = 8,860 Students
2007 = 9,056
2008 = 9,050
2009 = 9,429
2010 = 9,407
2011 = 9,352
2012 = 9,608
2013 = 10,107
2014 = 10,382
2015 = 10,340
2016 = 10,805
2017 = 11,034
2018 = 11,639
In: Statistics and Probability