IAS 16. Fixed Assets. We are a graphic arts company, and at the beginning of 2016, we acquired a new printer. The price of this printer was 25,000 euros. The additional expenses of the purchase were as follows:
All operations have a 21% VAT (not included), and the payment of the amounts is made by bank check.
During January, the assembly and installation of the new printer takes place, which is in perfect working condition from February the 1st.
The useful life expectancy of the printer is estimated at 10 years, and its amortisation will be carried out following the linear method. Additionally, at the end of its useful life, the company will have to face the costs of dismantling and rehabilitation of the place. Estimating said costs in 5,000 euros. Besides, said machinery requires specialised weekly maintenance, amounting to 250 euros per month.
Calculate:
IAS 36. Impairment of assets. We are a photo studio, and due to the increase in work and staff, we have had to acquire three new cameras and accessories. The acquisition occurred in January 2018. The prices of the cameras are as follows:
Calculate:
IAS 38. Intangible Assets. On March 1, 2016, we obtained a patent for 7,500 euros.
At the close of the fiscal year, on December 31, 2016, the fair value of the patent was 9,000 euros.
As of December 31, 2017, the fair value of the patent stands at 8,000 euros.
The criterion we use for valuation after the initial recognition of the asset is the revaluation model.
Formulate:
Make the accounting entries corresponding to the acquisition of the asset and at each accounting close.
In: Accounting
I have the solution.. I just do not know how they came up with some of the answers. e.g. sales return and allowande. Exercise 5-11
Calculating income statement components L01,5
Referring to Exhibit 5.15 calculate the missing amounts (round to two decimal places).
Company A Company B
2020 2019 2020 2019
Sales $263,000.00 $187,000.00 ? 114200.00 $48,500.00
Sales Discount $2,630.00 ? 1350.00 $1,200.00 $570.00
Sales Return and Allowance ? 51570 $16,700.00 $6,200.00 ? 2430.00
Net Sales ? 208800.00 $168,950.00 ? 106800.00 $45,500.00
Cost of Goods Sold $157,100.00 ? 106450 $57,700.00 ? 23400.00
Gross Profit from Sales $51,700.00 ? 62500.00 $49,100.00 $22,100.00
Selling Expense $18,620.00 $19,700.00 $25,700.00 ? 9700.00
Administrative Expenses $26,300.00 ? 27700.00 $30,400.00 $9,700.00
Total Operating Expenses ? 44920.00 $47,400.00 ? 56100.00 ? 0
Profit (Loss) ? 6780.00 $15,100.00 ? (7000) $2,700.00
Gross Profit Ration ? 24.76 ? 36.99 ? 45.67 ? 48.57
Solve for ?
In: Accounting
On December 31, 2020, Pina Company signed a $1,056,300 note to Grouper Bank. The market interest rate at that time was 11%. The stated interest rate on the note was 9%, payable annually. The note matures in 5 years. Unfortunately, because of lower sales, Pina’s financial situation worsened. On December 31, 2022, Grouper Bank determined that it was probable that the company would pay back only $633,780 of the principal at maturity. However, it was considered likely that interest would continue to be paid, based on the $1,056,300 loan.
1. Determine the amount of cash Pina received from the loan on December 31, 2020. (Round present value factors to 5 decimal places, e.g. 0.52513 and final answer to 0 decimal places, e.g. 5,275.)
2. Determine the loss on impairment that Grouper Bank should recognize on December 31, 2022. (Round present value factors to 5 decimal places, e.g. 0.52500 and final answer to 0 decimal places, e.g. 5,275.)
In: Accounting
5. On December 1, 2018, Folks Wagon Company adopted a stock-option plan that granted options
to key executives to purchase 50,000 shares of the company’s $10 par value common stock. The
options were granted on January 1, 2019, and were exercisable 3 years after the date of grant if the
grantee was still an employee of the company. The options expired 5 years from the date of grant.
The option price was set at $35, 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 2022: 20,000 on February 23 when the market
price was $46, and 30,000 on August 8 when the market price was $85 a share.
a. Prepare the journal entries relating to the stock option plan for the years 2019, 2020, and 2021.
Assume that the employee performs services equally in 2019, 2020, and 2021.
b. Prepare the journal entries that record the two events of exercising the options in 2022.
In: Accounting
On December 1, 2018, Folks Wagon Company adopted a stock-option plan that granted options to key executives to purchase 50,000 shares of the company’s $10 par value common stock. The options were granted on January 1, 2019, and were exercisable 3 years after the date of grant if the grantee was still an employee of the company. The options expired 5 years from the date of grant. The option price was set at $35, 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 2022: 20,000 on February 23 when the market price was $46, and 30,000 on August 8 when the market price was $85 a share.
a. Prepare the journal entries relating to the stock option plan for the years 2019, 2020, and 2021. Assume that the employee performs services equally in 2019, 2020, and 2021.
b. Prepare the journal entries that record the two events of exercising the options in 2022.
In: Accounting
What did you identify while conducting a value chain analysis of American Airlines?
What are your observations from a similar value chain analysis that you conducted for Walden University?
In: Operations Management
What is the purpose of copyrights, patents, and trademarks?
If a student uses University resources to develop and/or market software, is he/she required to notify the University?
What are the benefits of notifying the University?
What is the difference between a patent and a copyright?
In: Computer Science
Green Corporation, a manufacturing company, hired several executives during 2020. The executives had homes in other cities when they were hired by Green. If the executives were unable to sell those homes, they would be unable to buy replacement homes in Green’s area. Consequently, if the executives were unable to sell their homes within 30 days of listing them for sale, Green bought the homes from the executives for 10% less than the list price. Green immediately put the homes purchased up for resale. Each home Green purchased was ultimately sold at a loss. By the end of 2020, Green did not own any homes, but had suffered losses totaling $125,000 on the sale of houses. Green is uncertain how to report the sale of the homes. Green has a $32,000 short-term capital gain from stock investment transactions during 2020.
Would Green Corporation prefer the $125,000 loss from the sale of the houses to be treated as ordinary or capital? Why?
What is the proper treatment of the $125,000 loss (ordinary or capital)? Provide an explanation of your answer that is sufficiently supported by tax authorities that are properly cited.
Green Corporation has asked you how it might structure future transactions involving transferred executives and their residences to achieve better tax results. Provide an explanation of your answer that is sufficiently supported by tax authorities that are properly cited.
In: Accounting
Problem Two University tuition fees in Quebec are the lowest in Canada and has been among the lowest for the past 20-30 years. Use the human capital model to answer the questions below and assume that initial annual earnings for a CEGEP graduate is $40.000 while the corresponding earnings for a university graduate is $52,000. Further, assume CEGEP students graduate at age 20 (so the time horizon is 45 years) and at that age they decide to start working or continue their studies in university. The interest rate is 5% and university studies last 3 years. a) Calculate the present value (PV) of each option (CEGEP and University), using the assumptions above and assuming that CEGEP wages grow on average by 1.5% per year and university wages grow by 3%)
In: Accounting
The Abruzzi Olive Oil Company is a small producer of premium olive oil. Cheryl Sounders, the owner of Abruzzi, is currently developing a budget spreadsheet to explore the impact of various sales goals on production.
Month Sales
January 9,200
February. 9,000
March 9,400
April 8,600
May 8,000
June 8,500
July 8,200
August 7,500
September 8,900
October 9,300
November 9,200
December. 9,600
At a planning meeting in November 2020, Jay Peters, the marketing manager for Abruzzi, told Cheryl that he expected monthly sales to increase by 5 to 15 percent in the coming year. But in late december 2020, Jay rushed into cheryl's office with some good news. "cheryl, I just had a meeting with Consolidated Resturaunts, and they are considering an order for 1,250 gallons each month for all of 2021."
"Gosh," Cheryl replied. "that's an exciting bit of news, but I'm concerned about whether we have the capacity to accept such a large order. Ill prepare budgets assuming we don't get the Consolidated business but we increase monthly sales by 5, 10, or 15 percent. Then ill assume the consolidated order comes through, and on top of that we have monthly increases of 5, 10, and 15 percent/ This should give us a good idea of whether well bump up against capacity." Jay thought that this sounded fine, but he wondered whether Cheryl had the time to do this much work. Cheryl indicated that the analysis was relatively easy since she was preparing the budget on a spreadsheet and each analysis would require only a simple change.
A. Using a spreadsheet, prepare the six monthly budget schedule that Cheryl suggested (i.e. monthly budgets with and without the consolidated business assuming other sales increases of 5,10, and 15 percent). As a general rule, Cheryl likes to have ending inventory equal to 12 percent of next month's sales. Assume that the company ended 2020 with an inventory of 1,500 gallons of olive oil. In order to calculate ending inventory at the end of December 2021, assume that sales in January 2022 will be the same as December 2021 sales.
b. Suppose that capacity is 12,000 gallons. Is the company likely to encounter a capacity problem?
c. Abruzzi sells its oil for $25 per gallon. The variable cost per gallon is $10. What will be the annual impact on profit of obtaining the consolidated business (assuming that there is no capacity problem)?
In: Accounting