Assume that Brown Company owns 100% of Schroeder Corporation. Schroeder reports Stockholders’ Equity of $500,000. The Equity investment was acquired at book value (i.e., no AAP). Schroeder sells a 10% interest to outsiders for $115,000. The entry made by Brown as a result of the sale of stock by Schroeder includes:
In: Accounting
Closter, Inc., has a bond issue with a face value of $1,000 that is coming due in one year. The value of the company’s assets is currently $1,180. Ashok Vora, the CEO, believes that the assets in the company will be worth either $970 or $1,470 in a year. The going rate on one-year T-bills is 6 percent.
| a-1. |
What is the value of the company’s equity? |
|||
| a-2. |
What is the value of the debt?
|
In: Finance
The following balances have been extracted from the books of XYZ
Company for the year to
31/12/2019
Dr Cr
US$ US$
Cash at bank and in hand 10,000
Plant and equipment:
At cost 70,000
Accumulated depreciation (at 31.12.19) 25,000
Retained earnings (at 1.2.2020) 15,000
Profit for the financial year (to 31.12.19) 20,000
Share capital (issued and fully paid) 50,000
Inventory (at 31.12.19) 27,000
Trade payables 17,000
Trade receivables 20,000
127,000 127,000
Additional information:
1 Corporation tax owing at 31 December 2019 is estimated to be
$3000.
3 A dividend of 10p per share is proposed but not paid as of
31.12.2019
Prepare XYZ (1) statement of profit or loss and (2) statement of
retained earnings, and (3)
a statement of financial position for the year to 31 December
2019.
In: Accounting
Delta Corporation's capital structure consists of 20,000 common shares at December 31. At December 31, 2020 an analysis of the accounts and discussions with company officials revealed the following information:
Sales................................................................................................. $1,300,000
Inventory, January 1, 2020.............................................................. 150,000
Purchases......................................................................................... 728,000
Purchase discounts........................................................................... 18,000
Inventory, December 31, 2020........................................................ 130,000
Tornado loss (net after $18,000 tax) .............................................. 42,000
Selling expenses.............................................................................. 148,000
Cash................................................................................................. 60,000
Accounts receivable........................................................................ 90,000
Common shares............................................................................... 200,000
Accumulated depreciation............................................................... 180,000
Dividend revenue............................................................................. 22,000
Unearned service revenue................................................................ 4,400
Accrued interest payable................................................................. 1,000
Land................................................................................................. 370,000
Patents.............................................................................................. 100,000
Retained earnings, January 1, 2020................................................. 350,000
Interest expense............................................................................... 15,000
Prior years cumulative effect of change from straight-line to accelerated
depreciation (net after $15,000 tax)..................................................... 45,000
General and administrative expenses.............................................. 172,000
Dividends declared.......................................................................... 52,750
Allowance for doubtful accounts..................................................... 5,000
Notes payable (maturity July 1, 2021)............................................. 200,000
Machinery and equipment............................................................... 450,000
Materials and supplies inventory....................................................... 40,000
Accounts payable............................................................................ 60,000
Unless indicated otherwise, you may assume a 25% income tax rate.
Required:
a) Prepare, in good form, a multiple-step income statement
b) Prepare, in good form, a retained earnings statement.
In: Accounting
A Internet food delivery company advertises that it has 3 different diets that will result in weight loss if strictly followed. One diet is advertised as a moderate weight loss, a second offers a slightly more aggressive weight reduction program, and a third that is the most aggressive weight loss. The company gathers some data by taking a random sample from people using the different diets at the end of a two months trial. The data on weight loss are recorded below.
|
Diet 1 |
Diet 2 |
Diet 3 |
|
5 |
7 |
12 |
|
7 |
11 |
15 |
|
9 |
13 |
17 |
|
11 |
17 |
20 |
In: Statistics and Probability
SUBJECT: LEADERSHIP
WORDS REQUIRED: 1500
Exercise:
What should you Do?
You have been at your company for close to five years and have had excellent reviews. You are at a midlevel management position and you like your job. It’s challenging and satisfying; you like your boss and your coworkers; your employees are great; and you have had satisfied customers and steady growth.
Nothing spectacular, but things are going very well. A new CEO has just joined the company and she has announced major changes: restructuring, moving people around, new departments and teams, a push for new products and services, new technology, several young top managers from the outside, office redesign to make things open, and much more.
Your comfortable, safe, and successful routine is being shaken up and everyone,
including you, is stressed out.
QUESTION: WHAT SHOULD YOU DO?
In: Psychology
Donny and Mary decided to incorporate an entertainment and
production company to be named
Wayang Hebat Sdn Bhd. They submitted relevant documents to the
Companies Commission on
1st March 2020 and a notice of registration was issued immediately
on the next day. Upon
incorporation, all their belongings were sold to the company and
they gained substantial profit of
RM100,000. A disclosure of profits worth RM50,000 was made to the
board of directors and
was later ratified.
On the 15th February 2020, Donny entered into a contract with
Merdeka Studio for the making of
a TV drama. The contract amongst others required Merdeka Studio to
create a TV drama for
Wayang Hebat Sdn Bhd who shall later pay a sum of RM50,000 to the
former once the TV
drama is completed and aired by any television networks. Upon
receiving the TV drama on 1st
April 2020, Wayang Hebat Sdn Bhd sold it to a well-known television
station and was aired
twice since then. To date, Merdeka Studio has yet to receive any
payment from Wayang Hebat
Sdn Bhd. When asked for the payment, Wayang Hebat Sdn Bhd refused
to be bound by the
contract on the grounds that no approval was given to Donny to
enter into such a contract on the
company’s behalf.
Based on the above given situations, advise Wayang Hebat Sdn Bhd on
the following matters:
a) The sale by Donny and Mary of their belongings to Wayang Hebat
Sdn Bhd
b) The contract with Merdeka Studio.
In: Accounting
Lyrtricks Ltd., which has a December 31 year end, had the
following transactions in December 2020 and January 2021:
| 2020 | ||
|
Dec. 1 |
The company borrowed $170,000 from a bank on a five-year loan payable. The terms of the loan stipulate that Lyrtricks must repay 1/5 of the principal every November 30 plus the interest accrued to that date. The loan bears interest at 9% per annum. | |
|
Dec. 31 |
Recorded employee wages for December. The wages earned by employees amounted to $10,900, and the company withheld CPP of $628, EI of $530, and income taxes of $2,000. Lyrtricks’ employer contributions were $628 for CPP and $742 for EI. | |
|
Dec. 31 |
Recorded the adjusting entry to record the interest incurred on the bank loan during December. | |
|
Dec. 31 |
Recorded the entry to reclassify the current portion of the bank loan. | |
| 2021 | ||
|
Jan. 2 |
Paid the wages recorded on December 31. | |
|
Jan. 15 |
Made the remittance to the government related to the December 31 payroll. |
Prepare all necessary journal entries related to the above transactions.
2020...
Dec. 1
Dec. 31-- to record wages payable
Dec. 31 -- to record employer's liabilities
Dec 31. -- to record interest
Dec. 31 -- to record reclassification of current portion of bank loan
2021...
Jan. 2
Jan. 15
In: Accounting
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In: Accounting
Question 10
The comparative balance sheets for Rothlisberger Company as of December 31 are presented below.
|
ROTHLISBERGER COMPANY |
||||||
|
Assets |
2020 |
2019 |
||||
| Cash |
$58,100 |
$49,600 |
||||
| Accounts receivable |
43,500 |
65,100 |
||||
| Inventory |
152,000 |
144,500 |
||||
| Prepaid expenses |
14,500 |
22,500 |
||||
| Land |
101,600 |
134,000 |
||||
| Buildings |
196,700 |
196,700 |
||||
| Accumulated depreciation—buildings |
(56,800 |
) |
(32,600 |
) |
||
| Equipment |
231,700 |
157,600 |
||||
| Accumulated depreciation—equipment |
(44,300 |
) |
(35,200 |
) |
||
| Total |
$697,000 |
$702,200 |
||||
|
Liabilities and Stockholders’ Equity |
||||||
| Accounts payable |
$46,300 |
$39,300 |
||||
| Bonds payable |
260,000 |
292,600 |
||||
| Common stock, $1 par |
192,600 |
160,000 |
||||
| Retained earnings |
198,100 |
210,300 |
||||
| Total |
$697,000 |
$702,200 |
||||
Additional information:
| 1. | Operating expenses include depreciation expense of $42,000 and charges from prepaid expenses of $8,000. | |
| 2. | Land was sold for cash at book value. | |
| 3. | Cash dividends of $57,600 were paid. | |
| 4. | Net income for 2020 was $45,400. | |
| 5. | Equipment was purchased for $95,600 cash. In addition, equipment costing $21,500 with a book value of $12,800 was sold for $5,100 cash. | |
| 6. | Bonds were converted at face value by issuing 32,600 shares of $1 par value common stock. |
***Prepare a statement of cash flows for the year ended
December 31, 2020, using the indirect method. (Show amounts that
decrease cash flow with either a - sign e.g. -15,000 or in
parenthesis e.g. (15,000).)
In: Accounting