Jones Equipment is a private company that sells and installs HVAC systems. Jones offers payment terms of 2/10, n/30, where customers making payment within 10 days of installation will receive a discount of 2% off the purchase price or must pay the full balance due within 30 days. Jones has just received payment from a new customer who paid within the 10-day window and is thus entitled to the 2% discount. The gross sales price of the equipment and installation, before discount, was $10,000. This discount will not result in a loss to Jones on the sale of the product and service. Jones needs your help to determine when the 2% early-payment discount should be recognized and how it should be recorded—for example, as a reduction in revenue or as a cost of sales?

Explain how you located the relevant guidance, including the search method used and which section you searched within the appropriate topic

You are called by Tim Duncan of Waterway Co. on July 16 and asked to prepare a claim for insurance as a result of a theft that took place the night before. You suggest that an inventory be taken immediately. The following data are available. Inventory, July 1 $ 38,200 Purchases—goods placed in stock July 1–15 80,300 Sales revenue—goods delivered to customers (gross) 124,800 Sales returns—goods returned to stock 4,400 Your client reports that the goods on hand on July 16 cost $29,400, but you determine that this figure includes goods of $5,500 received on a consignment basis. Your past records show that sales are made at approximately 30% over cost. Duncan’s insurance covers only goods owned. Compute the claim against the insurance company. (Round ratios for computational purposes to 2 decimal places, e.g. 78.73% and final answer to 0 decimal places, e.g. 28,987.)

On January 1, 2017, Loud Company enters into a 2-year contract with a customer for an unlimited talk and 5 GB data wireless plan for $65 per month. The contract includes a smartphone for which the customer pays $299. Loud also sells the smartphone and monthly service plan separately, charging $649 for the smartphone and $65 for the monthly service for the unlimited talk and 5 GB data wireless plan. On July 1, 2017, the customer realizes that she needs less data in her wireless plan and downgrades to the unlimited talk and 2 GB data plan for the remaining term of the contract (18 months). The unlimited talk and 2 GB data plan is priced at $55 per month. The $55 per month is Loud’s current stand-alone price for this plan that is available to all customers.

Required:

1. How should Loud account for this contract modification?

2. Provide Loud’s new monthly revenue recognition journal entry.

the sunland recreation center is considering adding a miniature golf course to its facility. the course would cost $150000, would be depreciated on a straight line basis over its 6 years life, and would have a zero salvage value. the estimated income from the golfing fees would be 95000 a year. variable costs would be 32000 per year and fixed cost would be 25000 per year. since the miniature golf course would attract more customers to the center, the firm anticipates an additional 24000 in revenue from its existing facilities every year if the course is added.the project will require an initial investment in net working capital of $18000,which would be recovered at the end of the project’s life. what is the net present value of this project if discount rate is 16% and the tac rate is 21%? what is the internal rate of return? what is the payback period? should the company proceed with the project? why or why not?

Classify each of the following tasks as belonging in the revenue, expenditure, human resources/payroll, production, or financing cycle

a. Selling bonds to raise capital-

b. Purchasing electronic components to manufacture DVD players-

c. Moving electronic components from the stockroom to the production floor to begin making DVD players–

d. Send employees for an annual training-  

e. Receiving cash payments from customers-  

f. Decide how many goods to manufacture –

g. Acquiring new equipment for our manufacturing facility-

h. Picking DVD players from the warehouse to prepare them for shipping to fill orders –

i. Estimate the allowance for bad debt –

j. Receiving timecards from employees –

k. Sell 20% interest in the company to a venture capital firm –

l. Verifying a customer’s credit limit –

m. Pay federal payroll taxes –

n. Receive purchased goods in the receiving department –

1. Entity A is a local construction company, which provides construction services to different types of customers. On 16 December 2017, Entity A ordered a concrete plant from Entity B. The listed price of the plant is $650,000 for general customers. However, Entity B offers a 10% trade discount to Entity A because it is one of its loyal customers. The plant was delivered to Entity A on 1 January 2018. According to the contract, Entity B provides a 2-month credit period to Entity A. Finally, Entity A fully settled the outstanding amount on 1 February 2018.

   Installation and testing services are required to make the plant ready for use. On 1 January 2018, Entity C, the installation and testing service provider completed the concrete plant installation and testing services and certified the plant was really for use by Entity A. The cost of installation and testing services are $5,000 and it was settled with Entity C by cheque on 1 January 2018. At the inception stage, Entity A expected the useful life of the concrete plant is 5 years.

   According to the local environmental protection regulation, Entity A is required to remove the concrete plant at the end of the reporting period in the Year 2022. The removal cost of $5,100 and the plant residual value of $4,013 was estimated at the inception of the contract respectively.

   Finally, on 31 December 2022, the removal cost incurred was the same as the estimated amount and it will be paid in the first week of the Year 2023. However, the residual of the concrete plant can be sold by $1,900 only. A cheque was received on the same date.

   Entity A always applies to discount with a rate of 8.05%.

   REQUIRED:

   According to relevant accounting standards, prepare journal entries to record the transactions of Entity A on 16 December 2017, 31 December 2017, 1 January 2018, 1 February 2018, 31 December 2018, 1 January 2020 and 31 December 2020, 1 January 2022 and 31 December 2022.

   ACCOUNT NAMES FOR INPUT:

   | PPE | Bank | Inventory | Revenue | Cost of sales | Payable | Receivable |

   | Restoration liability | Interest expense | Interest revenue | Depreciation | Accum. depreciation |

   | Loss on disposal | Gain on disposal | Share capital | Retained earnings | No entry |

   ANSWERS:

   Journal Entries:

   Date	Account Name	Debit ($)	Credit ($)	Hints For Items If Necessary
   16-Dec-17	Blank 1	Blank 2
   	Blank 3		Blank 4
   31-Dec-17	Blank 5	Blank 6
   	Blank 7		Blank 8
   1-Jan-18	Blank 9	Blank 10
   	Blank 11	Blank 12		Purchase price. Judge Dr/Cr side.
   	Blank 13	Blank 14		Directly attributable cost. Judge Dr/Cr side.
   	Blank 15	Blank 16		Dismantling cost. Judge Dr/Cr side.
   1-Feb-18	Blank 17	Blank 18
   	Blank 19		Blank 20
   31-Dec-18	Blank 21	Blank 22		An interest created due to the dismantling cost.
   	Blank 23		Blank 24
   31-Dec-18	Blank 25	Blank 26
   	Blank 27		Blank 28
   1-Jan-20	Blank 29	Blank 30
   	Blank 31		Blank 32
   31-Dec-20	Blank 33	Blank 34		An interest created due to the dismantling cost.
   	Blank 35		Blank 36
   31- Dec-20	Blank 37	Blank 38
   	Blank 39		Blank 40
   1-Jan-22	Blank 41	Blank 42
   	Blank 43		Blank 44
   31-Dec-22	Blank 45	Blank 46		An interest created due to the dismantling cost.
   	Blank 47		Blank 48
   31-Dec-22	Blank 49	Blank 50
   	Blank 51		Blank 52
   31-Dec-22	Blank 53	Blank 54		The settlement of dismantling cost.
   	Blank 55		Blank 56
   31-Dec-22	Blank 57	Blank 58		The disposal of the concrete plant.
   	Blank 59		Blank 60
   	Blank 61	Blank 62
   	Blank 63	Blank 64		The gain or loss on disposal.  Judge Dr/Cr side.

Reconciling Net Income and Cash Flow from Operations Using FSET

For fiscal year 2015, Beyer GMBH had the following summary information available concerning its operating activities. The company had no investing or financing activities this year.

Required

a. Enter the items above into the Financial Statement Effects Template. Under noncash assets, use two separate columns for accounts receivable and inventories. Calculate the totals for each column.

b. What was the company’s net income for the year?
€Answer

What was the cash flow from operating activities? (Use the direct method.)
€Answer

c. Indicate the direction and amounts by which each of the following accounts changed during the year. If the account decreased, enter as a negative number.

d. Using your results above, prepare the operating activities section of the statement of cash flows using the indirect format.

Required information

[The following information applies to the questions displayed below.]

Acme Materials Company manufactures and sells synthetic coatings that can withstand high temperatures. Its primary customers are aviation manufacturers and maintenance companies. The following table contains financial information pertaining to cost of quality (COQ) in 2019 and 2020 (in thousands of dollars):

Required:

1. Classify the cost items in the table into cost-of-quality (COQ) categories.

2. Calculate the ratio of each COQ category to revenues in each of the 2 years.

3. Calculate the percentage change in each COQ category and total COQ and comment on the results:

a. Percentage change in total COQ as a percentage of sales, from 2019 to 2020;

b. Total COQ in 2020 expressed as a percentage of 2019 sales dollars;

c. Percentage change in total prevention costs, 2019 to 2020;

d. Percentage change in total appraisal costs, 2019 to 2020;

e. Percentage change in total internal failure costs, 2019 to 2020;

f. Percentage change in total external failure costs, 2019 to 2020.

[The following information applies to the questions displayed below.] Acme Materials Company manufactures and sells synthetic coatings that can withstand high temperatures. Its primary customers are aviation manufacturers and maintenance companies. The following table contains financial information pertaining to cost of quality (COQ) in 2019 and 2020 (in thousands of dollars): 2019 2020 Sales $ 15,900 $ 19,900 Materials inspection 290 59 In-process (production) inspection 159 124 Finished product inspection 240 69 Preventive equipment maintenance 19 59 Scrap (net) 490 290 Warranty repairs 690 440 Product design engineering 149 260 Vendor certification 21 59 Direct costs of returned goods 265 79 Training of factory workers 39 139 Product testing—equipment maintenance 59 59 Product testing labor 200 89 Field repairs 69 39 Rework before shipment 230 199 Product-liability settlement 350 59 Emergency repair and maintenance 190 74 Required: 1. Classify the cost items in the table into cost-of-quality (COQ) categories. 2. Calculate the ratio of each COQ category to revenues in each of the 2 years. 3. Calculate the percentage change in each COQ category and total COQ and comment on the results: a. Percentage change in total COQ as a percentage of sales, from 2019 to 2020; b. Total COQ in 2020 expressed as a percentage of 2019 sales dollars; c. Percentage change in total prevention costs, 2019 to 2020; d. Percentage change in total appraisal costs, 2019 to 2020; e. Percentage change in total internal failure costs, 2019 to 2020; f. Percentage change in total external failure costs, 2019 to 2020.