The long-term liabilities section of CPS Transportation’s December 31, 2015, balance sheet included the following:

a.  A lease liability with 15 remaining lease payments of $10,000 each, due annually on January 1:

The incremental borrowing rate at the inception of the lease was 11% and the lessor’s implicit rate, which was known by CPS Transportation, was 10%.

b.  A deferred income tax liability due to a single temporary difference. The only difference between CPS Transportation’s taxable income and pretax accounting income is depreciation on a machine acquired on January 1, 2015, for $500,000. The machine’s estimated useful life is five years, with no salvage value. Depreciation is computed using the straight-line method for financial reporting purposes and the MACRS method for tax purposes. Depreciation expense for tax and financial reporting purposes for 2016 through 2019 is as follows:

The enacted federal income tax rates are 35% for 2015 and 40% for 2016 through 2019. For the year ended December 31, 2016, CPS’s income before income taxes was $900,000.

On July 1, 2016, CPS Transportation issued $800,000 of 9% bonds. The bonds mature in 20 years and interest is payable each January 1 and July 1. The bonds were issued at a price to yield the investors 10%. CPS records interest at the effective interest rate.

Required:

1.  Determine CPS Transportation’s income tax expense and net income for the year ended December 31, 2016.

2.  Determine CPS Transportation’s interest expense for the year ended December 31, 2016.

3.  Prepare the long-term liabilities section of CPS Transportation’s December 31, 2016, balance sheet.

Requirements (Part one):Prepare an income statement for Petunia's Posies​, a​ merchandiser, for the year ended December​ 31, 2016.

Part One​: In 2015​, Petunia Conway opened Petunia's Posies​, a small retail shop selling floral arrangements

On December​ 31, 2016​, her accounting records show the​ following:

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Requirements (Part two):

Part Two​: Petunia's Posies was so successful that Petunia decided to manufacture her own brand of floral​ supplies: Floral Mart Manufacturing.

At the end of December 2017​, her accounting records show the​following:

Part​ Three: Show the ending inventories that would appear on these balance​ sheets:

Diablo Company reported the following information for 2016 and 2017:

Prepaid insurance, 31 December 2016 $15 000

Prepaid insurance, 31 December 2017 10 500

Insurance expense—2017 $31 000

How much cash was paid for insurance during 2017?

COMPREHENSIVE PROBLEM

OJB Company began business in January, 2016. The following transactions occurred in February, 2016:

Feb 1      Purchased supplies on account, $ 400.

         2      Received cash from customers on account, $ 1,750.

3      Paid $ 400 on account.

5      Paid technician $ 750 in salary, including the amount owed at the end of January.

8      Billed customers for services provided on account, $ 3,200.

11     Paid cash for advertising on a local website, $ 300.

12     Received $ 3,875 cash for fees earned for jobs completed.

16     Paid electricity bill for the month, $ 290.

17     Received $ 8,200 cash for fees earned for jobs completed.

19     Paid technician $ 750 in salary.

20     Billed customers for services provided on account, $ 6,100.

22     Received cash from customers on account, $ 9,500.

25     Paid phone bill for the month, $ 120.

26     Received cash from customers as an advance payment for                                       technical support services to be provided in the future, $ 2,500.

27     Billed customers for services provided on account, $ 3,900.

28     Received cash from customers on account, $ 5,100.

28     OJB withdrew $8,000 for personal use.

INSTRUCTIONS:

The chart of accounts and the post-closing trial balance as of January 31, 2016 are given. For each account in the post-closing trial balance, enter the balance in the appropriate Balance column of the ledger. Date the balances February 1, 2016, and place a check mark ( ü ) in the Posting Reference column. Journalize each of the February transactions in the journal provided using OJB Company’s chart of accounts. (Do not insert the account numbers in the journal at this time).

Post the journal to the ledger.

Prepare an unadjusted trial balance.

At the end of February, the following adjustment data were assembled. Use this data to complete instructions ( 5 ) and ( 6 ):

Supplies on hand were $ 600.

Rent expired during the month was $ 1,600.

Unearned fees at the end of the month were $ 2,000.

Insurance expired during the month was $ 300.

Accrued salaries payable were $ 240.

Depreciation on equipment during the month was $ 330.

Optional: Enter the unadjusted trial balance on an end-of-period spreadsheet/worksheet and complete the worksheet.

Journalize and post the adjusting entries.

Prepare an adjusted trial balance.

Prepare an Income Statement, Statement of Owner’s Equity, and Balance Sheet.

Record and post the closing entries. Indicate closed accounts in the ledger by inserting a line in both of the Balance columns opposite each closing entry.

10.Prepare a post-closing trial balance.

OJB COMPANY SERVICE CHART OF ACCOUNTS

PROVIDED FOR YOU IN BLACKBOARD THIS ACCOUNT IS

LISTED BUT IS NOT USED—PLEASE IGNORE**

OJB COMPANY

POST-CLOSING TRIAL BALANCE

JANUARY 31, 2016

                                                                           DEBIT        CREDIT

Accounts Receivable3,400

Prepaid Rent3,200

Prepaid Insurance1,500

Office Equipment14,500

Accumulated Depreciation330

Accounts Payable800

Salaries Payable120

Unearned Fees2,500

OJB, Capital                  42,300

                                                                           46,050       46,050

Tyrell Co. entered into the following transactions involving short-term liabilities in 2016 and 2017.

2016

2017

Jalbert Plumbing Products Ltd. reported the following data in 2016 (in millions): 2016 Net operating revenues................................ $ 31.8 Operating expenses.................................... 26.7 Operating income....................................... 5.1 Nonoperating items: Interest expense......................................... (0.6) Other...................................................... (0.6) Net income............................................... $ 3.9 Total assets............................................... $200.0 Total stockholders equity.............................. 74.0 Compute Jalbert s leverage ratio, debt ratio, and times-interest-earned ratio, and write a sentence to explain what those ratio values mean. Use year-end figures in place of averages where needed for the purpose of calculating ratios in this exercise. Would you be willing to lend Jalbert $1 million? State your reason.

Tyrell Co. entered into the following transactions involving short-term liabilities in 2016 and 2017.

2016

2017

Required:
1. Determine the maturity date for each of the three notes described

2. Determine the interest due at maturity for each of the three notes. (Do not round your intermediate calculations. Use 360 days a year.)

3. Determine the interest expense to be recorded in the adjusting entry at the end of 2016. (Do not round your intermediate calculations. Use 360 days a year.)

4. Determine the interest expense to be recorded in 2017. (Do not round intermediate calculations and round your final answers to nearest whole dollar. Use 360 days a year.)

5.1 Prepare journal entries for all the preceding transactions and events for 2016. (Do not round your intermediate calculations.)

Tyrell Co. entered into the following transactions involving short-term liabilities in 2016 and 2017.

2016

2017

Problem 9-1A Part 5

5.1 Prepare journal entries for all the preceding transactions and events for 2016. (Do not round your intermediate calculations.)
  

5.2 Prepare journal entries for all the preceding transactions and events for 2017. (Do not round your intermediate calculations.)

Stepfall Ltd had the following ratios at 31 December 2017 and 31 December 2016: 2017 2016 Gross profit margin 27% 31% Return on capital employed 15% 22% Current ratio 1.1:1 0.7:1 Acid test ratio 0.8:1 0.6:1 Trade receivable days 33 days 48 days Inventory holding days 42 days 57 days Which ONE of the following statements is TRUE?