Short Answer - MORAKE
Must Include Supporting Documentation in File Upload portion of
exam. Please label page as "Morake."
The following stockholders' equity section was taken from the books of Morake & Berg, Inc on January 1, 2020.
| Common Stock, $9 par value, 500,000 shares authorized, 300,000 shares issued and outstanding | 2,700,000 |
| Additional paid in capital in excess of par - Common | 1,200,000 |
| Additional paid in capital from Treasury Stock transactions | 0 |
| Additional paid in capital - retired stock | 0 |
| Retained earnings | 1,800,000 |
| Total Stockholders' Equity | 5,700,000 |
| The following transactions occurred in 2020: |
| a) On January 3, 2020, Morake & Berg issued 10,000 new shares of its $9 par value common stock for $20 per share. The company paid the underwriter $7,000 in issue costs. |
| b) On February 5, 2020, Morake & Berg repurchased 50,000 of its shares at a purchase price of $17 per share. |
| c) On April 1, 2020, Morake & Berg reissued 15,000 of its treasury shares at a price of $15 per share. |
| d) On August 1, 2020, Morake & Berg opted to retire 8,000 of the treasury shares. |
| e) On December 31, 2020, Morake & Berg declared a net profit for the year of $1,500,000. |
| f) On December 31, 2020, Morake & Berg declared dividends
of $400,000 to be paid on January 25, 2021. (Note, you are not required to calculate total number shares outstanding since total dollar amount of dividend is given.) |
REQUIRED:
Based on the information above, please answer the following
questions as of December 31, 2020. Your supporting documentation
should clearly show how you arrived at the answers you provide
below given (a) through (f) above. You may opt to show your work
using journal entries, T-accounts, or a clear calculation of what
is increasing/decreasing each account.
1. What is the 12/31/2020 balance of Additional Paid-in-Capital for
Common Stock?
2. What is the 12/31/2020 balance of Treasury Stock?
3. What is the 12/31/2020 balance of Retained Earnings?
In: Accounting
Martinez Inc. has sponsored a noncontributory, defined benefit pension plan for its employees since 1997. Prior to 2020, cumulative net pension expense recognized equaled cumulative contributions to the plan. Other relevant information about the pension plan on January 1, 2020, is as follows.
| 1. | The company has 200 employees. All these employees are expected to receive benefits under the plan. The average remaining service life per employee is 12 years. | |
| 2. | The projected benefit obligation amounted to $4,948,000 and the fair value of pension plan assets was $2,965,000. The market-related asset value was also $2,965,000. Unrecognized prior service cost was $1,983,000. |
On December 31, 2020, the projected benefit obligation and the
accumulated benefit obligation were $4,772,000 and $4,033,000,
respectively. The fair value of the pension plan assets amounted to
$4,129,000 at the end of the year. A 10% settlement rate and a 10%
expected asset return rate were used in the actuarial present value
computations in the pension plan. The present value of benefits
attributed by the pension benefit formula to employee service in
2020 amounted to $199,000. The employer’s contribution to the plan
assets amounted to $759,000 in 2020. This problem assumes no
payment of pension benefits.
Part 1
Prepare a schedule, based on the average remaining life per employee, showing the prior service cost that would be amortized as a component of pension expense for 2020, 2021, and 2022. (Round answers to 0 decimal places, e.g. 2,525.)
| Prior Service Cost Amortization | ||
| 2020 |
$ |
|
| 2021 |
$ |
|
| 2022 |
$ |
|
Compute pension expense for the year 2020. (Round
answers to 0 decimal places, e.g. 2,525.)
| Pension expense |
$ |
Compute the amount of the 2020 increase/decrease in net gains or
losses and the amount to be amortized in 2020 and 2021.
(Round answers to 0 decimal places, e.g.
2,525.)
| Net gain 12/31/20 |
$ |
|
| Amortization in 2020 |
$ |
|
| Amortization in 2021 |
$ |
Prepare the journal entries required to report the accounting for the company’s pension plan for 2020. (Round answers to 0 decimal places, e.g. 2,525. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
|
Account Titles and Explanation |
Debit |
Credit |
In: Accounting
BellTower Company collected $13,000 in June of 2019 for 7 months of service which would take place from October of 2019 through April of 2020. What's the impact of Belltower's June collection of this money on the Balance Sheet?
In: Accounting
P18.8 (LO 2, 3) (Time Value, Gift Cards, Discounts) Presented below are two independent revenue arrangements for Colbert Company.
Instructions
Respond to the requirements related to each revenue
arrangement.
a. Colbert sells 3D printer systems. Recently, Colbert provided a special promotion of zero-interest financing for 2 years on any new 3D printer system. Assume that Colbert sells Lyle Cartright a 3D system, receiving a $5,000 zero-interest-bearing note on January 1, 2020. The cost of the 3D printer system is $4,000. Colbert imputes a 6% interest rate on this zero-interest note transaction. Prepare the journal entry to record the sale on January 1, 2020, and compute the total amount of revenue to be recognized in 2020.
b. Colbert sells 20 nonrefundable $100 gift cards for 3D printer paper on March 1, 2020. The paper has a standalone selling price of $100 (cost $80). The gift cards expiration date is June 30, 2020. Colbert estimates that customers will not redeem 10% of these gift cards. The pattern of redemption is as follows.
Redemption Total
March 31
50%
April 30
80%
June 30
85%
Prepare the 2020 journal entries related to the gift cards at March
1, March 31, April 30, and June 30.
In: Accounting
Flint Inc. uses a calendar year for financial reporting. The company is authorized to issue 9,000,000 shares of $12 par common stock. At no time has Flint issued any potentially dilutive securities. Listed below is a summary of Flint’s common stock activities. 1. Number of common shares issued and outstanding at December 31, 2018 2,160,000 2. Shares issued as a result of a 12% stock dividend on September 30, 2019 259,200 3. Shares issued for cash on March 31, 2020 2,190,000 Number of common shares issued and outstanding at December 31, 2020 4,609,200 4. A 2-for-1 stock split of Flint’s common stock took place on March 31, 2021.
Compute the weighted-average number of common shares used in
computing earnings per common share for 2019 on the 2020
comparative income statement.
|
shares |
Compute the weighted-average number of common shares used in
computing earnings per common share for 2020 on the 2020
comparative income statement.
| shares |
Compute the weighted-average number of common shares to be used
in computing earnings per common share for 2020 on the 2021
comparative income statement.
|
shares |
Compute the weighted-average number of common shares to be used
in computing earnings per common share for 2021 on the 2021
comparative income statement.
| shares |
In: Accounting
Lester Company processes a raw material called Wizon until the splitoff point were it becomes products X, Y, and Z. Product X is sold at the splitoff point with no further processing. Products Y and Z require further processing to finish them before they can be sold. The following is a summary of costs and other related data for the year ending December 31, 2020.
Joint costs before the splitoff point $240,000
Separable Joint costs after splitoff to complete “Y” $132,000
Separable costs after splitoff to complete “Z” $228,000
product X Y Z
Litres processed 60,000 60,000 120,000
Selling price per litre $1.50 $3.20 $3.15
There were no inventories on hand January 1, 2020, and there was no Wizon on hand on December 31, 2020. All units of X, Y, and Z on hand at year end were complete as to processing.
REQUIRED:
1. Allocate the total joint costs to products X, Y, and Z using the net realizable value method.
2. Calculate the full cost of producing one unit of each of X, Y, and Z
.3. For each product (X, Y, and Z) calculate the dollar value of the cost of goods sold for 2020 and the ending inventory dollar value at December 31, 2020. Assume that 40,000 units of X, 60,000 units of Y, and 90,000 units of Z were sold during 2020.
In: Accounting
Exercise 16-15
Nash Inc. uses a calendar year for financial reporting. The
company is authorized to issue 8,880,000 shares of $12 par common
stock. At no time has Nash issued any potentially dilutive
securities. Listed below is a summary of Nash’s common stock
activities.
| 1. | Number of common shares issued and outstanding at December 31, 2018 |
2,090,000 |
||
| 2. | Shares issued as a result of a 12% stock dividend on September 30, 2019 |
250,800 |
||
| 3. | Shares issued for cash on March 31, 2020 |
2,170,000 |
||
| Number of common shares issued and outstanding at December 31, 2020 |
4,510,800 |
|||
| 4. | A 2-for-1 stock split of Nash’s common stock took place on March 31, 2021 |
a.) Compute the weighted-average number of common shares used in computing earnings per common share for 2019 on the 2020 comparative income statement.
b.) Compute the weighted-average number of common shares used in computing earnings per common share for 2020 on the 2020 comparative income statement.
c.) Compute the weighted-average number of common shares to be used in computing earnings per common share for 2020 on the 2021 comparative income statement.
d.) Compute the weighted-average number of common shares to be used in computing earnings per common share for 2021 on the 2021 comparative income statement.
In: Accounting
Marin Inc. uses a calendar year for financial reporting. The company is authorized to issue 8,610,000 shares of $10 par common stock. At no time has Marin issued any potentially dilutive securities. Listed below is a summary of Marin’s common stock activities.
| 1. | Number of common shares issued and outstanding at December 31, 2018 |
1,920,000 |
||
| 2. | Shares issued as a result of a 10% stock dividend on September 30, 2019 |
192,000 |
||
| 3. | Shares issued for cash on March 31, 2020 |
2,060,000 |
||
| Number of common shares issued and outstanding at December 31, 2020 |
4,172,000 |
|||
| 4. | A 2-for-1 stock split of Marin’s common stock took place on March 31, 2021 |
Compute the weighted-average number of common shares used in computing earnings per common share for 2019 on the 2020 comparative income statement.
| shares |
eTextbook and Media
Compute the weighted-average number of common shares used in computing earnings per common share for 2020 on the 2020 comparative income statement.
| shares |
eTextbook and Media
Compute the weighted-average number of common shares to be used in computing earnings per common share for 2020 on the 2021 comparative income statement.
| shares |
eTextbook and Media
Compute the weighted-average number of common shares to be used in computing earnings per common share for 2021 on the 2021 comparative income statement.
| shares |
In: Accounting
Sunland Corporation hired a total of 18 new full-time employees on January 1, 2020. The employees are paid $770 per week, and no changes in this pay are expected for the following year. Each employee earns three weeks of vacation time during 2020, but no new employees take any vacation time during 2020, due to Sunland's company policy that vacations must be earned before they are taken. In 2021, 4 new employees took three weeks of vacation time, and 8 new employees took two weeks' vacation time.
Prepare the journal entry at the end of December, 2020, to record the vacation time earned by the new employees. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.)
Account Titles and Explanation Debit Credit
Prepare the journal entry in 2021 to record the payment of the vacation time. (Assume that only new employees have outstanding vacation at the end of 2020, all other employees used their vacation allotment by the end of 2020). (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.)
Account Titles and Explanation Debit Credit
In: Finance
E16.5 NEWTON INC USES A CALENDAR YEAR FOR FINANCIAL REPORTING. THE COMPANY IS AUTHORIZED TO ISSUE 9,000,000 SHARES OF 10 PAR COMMON STOCK. AT NO TIME HAS NEWTON ISSUED ANY POTENTIALLY DILUTIVE SECURITIES. LISTED BELOW IS A SUMMARY OF NEWTON'S COMMON STOCK ACTIVITIES
1.NUMBER OF COMMON SHARES ISSUED AND OUTSTANDING AT DECEMBER 31 2018 2,000,000
2. SHARES ISSUED AS A RESULT OF 10% STOCK DIVIDEND ON SEPTEMBER 30 2019. 200,000
3. SHARES ISSUED FOR CASH ON MARCH 31 2020 2,000,000
NUMBER OF COMMON SHARES ISSUED AND OUTSTANDING AT DECEMBER 31 2020 4,200,000
4. A 2-FOR-1 STOCK SPLIT OF NEWTON'S COMMON STOCK TOOK PLACE ON. MARCH 31 2021
A. COMPUTE THE WEIGHTED-AVERAGE OF COMMON SHARES USED IN COMPUTING EARNINGS PER COMMON SHAREFOR 2019 ON THE 2020. COMPARATIVE INCOME STATEMENT
B. COMPUTE THE WEIGHTED AVERAGE NUMBER OF COMMON SHARES USED IN COMPUTING EARNINGS PER COMMON SHARE FOR 2020 ON THE 2020 COMPARATIVE INCOME STATEMENT
C. COMPUTE THE WEIGHTED AVERAGE NUMBER OF COMMON SHARES TO BE USED IN COMPUTING EARNINGS PER COMMON SHARE FOR 2020 ON THE 2021 COMPARATIVE INCOME STATEMENT
D. COMPUTE THE WEIGHTED AVERAGE NUMBER OF COMMON SHARES TO BE USED IN COMPUTING EARNINGS OER COMMON SHARE FOR 2021 ON THE 2021 COMPARATIVE INCOME STATEMENT
In: Accounting