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
Problem 11-9 (Algo) Straight-line depreciation; disposal; partial period; change in estimate [LO11-2, 11-5] The property, plant, and equipment section of the Jasper Company’s December 31, 2020, balance sheet contained the following: Property, plant, and equipment: Land $ 118,000 Building $ 798,000 Less: Accumulated depreciation (190,000 ) 608,000 Equipment 174,450 Less: Accumulated depreciation ? ? Total property, plant, and equipment ? The land and building were purchased at the beginning of 2016. Straight-line depreciation is used and a residual value of $38,000 for the building is anticipated. The equipment is comprised of the following three machines: Machine Cost Date Acquired Residual Value Life (in Years) 101 $ 67,800 1/1/2018 $ 6,800 10 102 78,200 6/30/2019 7,800 8 103 28,450 9/1/2020 2,800 9 The straight-line method is used to determine depreciation on the equipment. On March 31, 2021, Machine 102 was sold for $51,500. Early in 2021, the useful life of machine 101 was revised to seven years in total, and the residual value was revised to zero. Required: 1. Calculate the accumulated depreciation on the equipment at December 31, 2020. 2. Prepare the journal entry to record 2021 depreciation on machine 102 up to the date of sale. 3. Calculate the gain or loss on the sale of machine 102. 4. Prepare the journal entry for the sale of machine 102. 5. Prepare the 2021 year-end journal entries to record depreciation on the building and remaining equipment.
In: Accounting
The balances in the accounts of Maybe Ltd at 30 June 2019 and 30 June 2020 are:
|
30th JUNE 2020 ‘000 |
30th JUNE 2019 ‘000 |
|
|
Sales (all on credit) |
300 |
420 |
|
Cost of Goods Sold |
156 |
132 |
|
Doubtful Debts expense |
30 |
36 |
|
Interest Expense |
24 |
36 |
|
Salaries |
36 |
30 |
|
Depreciation |
12 |
18 |
|
Cash |
172.80 |
166.80 |
|
Inventory |
216 |
192 |
|
Accounts Receivable |
324 |
300 |
|
Allowance for Doubtful Debts |
36 |
42 |
|
Land |
180 |
180 |
|
Plant |
120 |
108 |
|
Accumulated Depreciation |
24 |
36 |
|
Bank Overdraft |
24 |
22.80 |
|
Accounts Payable |
240 |
228 |
|
Accrued Salaries |
26.40 |
21.60 |
|
Long term loan |
108 |
84 |
|
Share Capital |
144 |
120 |
|
Opening Retained Earnings |
368.40 |
224.40 |
Other information:
Share capital is increased by the bonus issue of 24 000 shares for $1.00 each out of retained earnings. Plant is acquired during the period at a cost of $36 000, while plant with a carrying amount of $nil (cost of $24 000, accumulated depreciation of $24 000) is scrapped.
Required:
a) Reconstruct the allowance for doubtful debts and accounts receivable.
b) Reconstruct inventory and accounts payable
c) Reconstruct accrued salaries
d) Reconstruct property, plant and equipment and accumulated depreciation
e) Present a statement of cash flow for Maybe Ltd for the year ended 30 june 2020
PLEASE DO NOT COPY OTHERS ANSWERS
In: Accounting
| AAA Tax Service opens their business on April 1 and have the following transactions | ||||||||||
| in the month.: | ||||||||||
| 4/1 The company founder invests $50,000 and becomes the company's only shareholder. | ||||||||||
| 4/2 The company buys 4 computers for total cost $8,100, paying 2,100 cash and 6,000 on account. | ||||||||||
| 4/6 The Company pays cash for a 12 month insurance policy 6,000. Effective 4/1 - 3/31/next year | ||||||||||
| 4/7 The company buys supplies that will be used for several months. This costs $6,000 on account | ||||||||||
| 4/8 The company's first customer pays cash of $4000 for tax service | ||||||||||
| 4/15 The company pays payroll expense of $2,000 | ||||||||||
| 4/17 More tax service is performed for customers on account for $7,500 | ||||||||||
| 4/25 The company collects 3,000 from customers for service just completed in g above on 4/17 | ||||||||||
| 4/30 The company pays the amount owed for the 4 computers bought on 4/2 above ($6,000) | ||||||||||
| 4/30 The company pays $2,000 for the first months rent expense | ||||||||||
| 4/30 The company receives $7,000 cash for tax work for a customer. Work will be completed next Mo. | ||||||||||
| 4/30 The company pays a dividend of $1,000 for the month | ||||||||||
| Adjustments | ||||||||||
| 4/30 Create the depreciation entry for the month for the computers. $225 per month | ||||||||||
| 4/30 Make the adjustment entry for one month of insurance for the insurance purchased on 4/6 | ||||||||||
| 4/30 They rush and complete half the job for the customer in k above. Create the entry to recognize | ||||||||||
| half of the revenue. | ||||||||||
| 4/30 A count of the supplies shows a total of $4,000 remaining in supplies. | ||||||||||
1. Describe each of the above with a Journal entry Include the date
2.Prepare T-accounts for the accounts above and post all transactions for April
3.Create the Trial Balance
4.What is the Net Income for the Month
In: Accounting
On September 1, 2020, a consignor consigned 10,000 units of inventory which costs P12 per unit and sells for P15 per unit. Freight charges of P15,000 were paid by the consignee. The consignee was able to sell 6,000 units from September 1 to November 30, 2020, and incurred. On December 1, 2020, the products were marked to sell for P13 per unit to accommodate the Christmas rush. During December, the consignee was able to sell 3,000 more units. The discounted price lasted until February 28, 2021. The consignee is entitled to a commission of 10% of the selling price of the products. For the period ending December 31, 2020, the consignor will report a net loss from this consignment arrangement amounting to:
In: Accounting
The long-term liabilities section of CPS Transportation’s
December 31, 2020, balance sheet included the following: (FV of $1,
PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)
(Use appropriate factor(s) from the tables
provided.)
a. A lease liability with 15 remaining lease payments of $38,000
each, due annually on January 1:
| Lease liability | $ | 289,031 | |
| Less: current portion | 9,097 | ||
| $ | 279,934 | ||
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, 2020, for $560,000. 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
2021 through 2024 is as follows:
| Year | MACRS Depreciation |
Straight-line Depreciation |
Difference | ||||||
| 2021 | $ | 176,000 | $ | 112,000 | $ | 64,000 | |||
| 2022 | 88,000 | 112,000 | (24,000 | ) | |||||
| 2023 | 78,000 | 112,000 | (34,000 | ) | |||||
| 2024 | 68,000 | 112,000 | (44,000 | ) | |||||
The enacted federal income tax rates are 20% for 2020 and 25% for
2021 through 2024. CPS had a deferred tax liability of $9,500 as of
December 31, 2020. For the year ended December 31, 2021, CPS’s
income before income taxes was $960,000.
On July 1, 2021, CPS Transportation issued $660,000 of 9% bonds.
The bonds mature in 15 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, 2021.
2. Determine CPS Transportation’s interest expense
for the year ended December 31, 2021.
3. Prepare the long-term liabilities section of
CPS Transportation's December 31, 2021, balance sheet.
In: Accounting
Make the following journal entries in good form.
1. On January 1, 2020, Entity A sold common stock for $30,000 to investors.
2. On January 3, 2020, Entity A performed services for Entity B for $1,500 on account.
3. On January 5, 2020, Entity A performed services for Entity C for $750 and Entity C paid.
4. On January 7, 2020, Entity A purchased a new computer (office equipment) from Best Buy for $500, paying $100 down, the rest on account.
In: Accounting
Green Landscaping Inc. is preparing its budget for the first quarter of 2020. The next step in the budgeting process is to prepare a cash receipts schedule and a cash payments schedule. To that end the following information has been collected. Clients usually pay 60% of their fee in the month that service is performed, 30% the month after, and 10% the second month after receiving service. Actual service revenue for 2019 and expected service revenues for 2020 are November 2019, $94,110; December 2019, $84,830; January 2020, $102,390; February 2020, $123,530; and March 2020, $131,560. Purchases of landscaping supplies (direct materials) are paid 60% in the month of purchase and 40% the following month. Actual purchases for 2019 and expected purchases for 2020 are December 2019, $17,540; January 2020, $16,370; February 2020, $18,950; and March 2020, $19,050. (a) Prepare the following schedules for each month in the first quarter of 2020 and for the quarter in total: 1) Expected collections from clients. (2) Expected payments for landscaping supplies. (b) Determine the following balances at March 31, 2020: (1) Accounts receivable (2) Accounts payable
In: Accounting