On January 1, 2020, the Maxell Company purchased P400,00 of 6% term bonds. The bonds are dated January 1, 2020, and the interest is payable semiannually on June 30 and December 31. At the time the bonds were purchased the market interest rate was 8%. The bonds mature on December 31, 2030. Maxell Company uses the effective interest method of amortization.
Instruction: Determine the following:
In: Accounting
Computing and Recording Interest Capitalization
The following information is from Bowin Inc. for a long-term construction project that is expected to be completed in January 2021. The construction project is for a building intended for the company’s own use. The capital expenditure on January 1, 2020, is for the purchase of land for the building site. No new construction loans were opened for the project in 2020. All debt was outstanding for the full year.
Capital Expenditures for 2020
| Date | Amount |
|---|---|
| Jan. 1, 2020 | $ 24,000 |
| Mar. 31, 2020 | 720,000 |
| June 30, 2020 | 1,440,000 |
| Nov. 30, 2020 | 720,000 |
Outstanding Debt in 2020
| Debt | Debt Amount | Interest Rate |
|---|---|---|
| Note payable | $800,000 | 8% |
| Note payable | 640,000 | 8% |
| Bond payable | 1,600,000 | 10% |
| Note payable | 400,000 | 9% |
Answer the following questions:
a. Compute interest to be capitalized and the interest to
be expensed in 2020.
b. Prepare the entry to record the construction
expenditures and interest for 2020.
c. Prepare the entry for depreciation in 2021 assuming
that the project is completed on January 1, 2021. Assume that the
building has a useful life of 30 years, and that the company uses
the straight-line depreciation method.
Note: Do not round until your final answers, then round to nearest whole number.
a.
| Amount of interest to be capitalized | Answer |
| Amount of interest to expense |
b.
Land
Construction in process
cash and payables
c.
In: Accounting
Carla Company sponsors a defined benefit pension plan for its
employees. The following data relate to the operation of the plan
for the year 2020 in which no benefits were paid.
| 1. | The actuarial present value of future benefits earned by employees for services rendered in 2020 amounted to $55,500. | |
| 2. | The company’s funding policy requires a contribution to the pension trustee amounting to $144,729 for 2020. | |
| 3. | As of January 1, 2020, the company had a projected benefit obligation of $908,100, an accumulated benefit obligation of $802,100, and a debit balance of $400,100 in accumulated OCI (PSC). The fair value of pension plan assets amounted to $601,200 at the beginning of the year. The actual and expected return on plan assets was $54,100. The settlement rate was 9%. No gains or losses occurred in 2020 and no benefits were paid. | |
| 4. | Amortization of prior service cost was $50,500 in 2020. Amortization of net gain or loss was not required in 2020. |
Determine the amounts of the components of pension expense that should be recognized by the company in 2020.
(Should be a a table that shows the components of pension expense)
Prepare the journal entry or entries to record pension expense and the employer’s contribution to the pension trustee in 2020.
Indicate the pension-related amounts that would be reported on
the income statement and the balance sheet for Carla Company for
the year 2020.
[Need Income Statement (partial), Comprehensive Income Statement,
and Balance Sheet (partial)]
In: Accounting
Assume the following sales took place during 2020 for a variety of individual capital assets for Ron (all normal capital assets with gains subject to 0%, 15%, or 20% tax rates).
|
Property purchase date |
Property sale date | Adjusted basis | Sale proceeds | Gain/Loss | Character of gain/loss |
| 12/6/2020 | 12/9/2020 | 1,000 | 1,060 | 60 | short term gain |
| 1/7/2000 | 6/15/2020 | 5,000 | 6,200 | 1,200 | long term gain |
| 11/6/2013 | 8/20/2020 | 5,000 | 4,200 | -800 | long term loss |
| 5/1/2020 | 10/31/2020 | 2,500 | 2,200 | -300 | short term loss |
| 6/8/2011 | 3/22/2020 | 8,600 | 10,000 | 1,400 | long term gain |
| 7/10/1999 | 1/19/2020 | 2,000 | 4,100 | 2,100 | long term gain |
| 3/16/2016 | 3/16/2020 | 5,300 | 6,000 | 700 | long term gain |
(I also want to make sure the characters of gain/loss and numbers are correct)
Second enter the information to the Form 8949
Column a: description of property, column b: date acquired, column c: date sold, column d: sales proceeds, column e: cost, column f: codes from instruction, column g:amount of adjustment, column h: gain or loss
In: Accounting
The following data relates to Rogers Company for the year ending December 31, 2020:
Net Income for 2020= $920,000
Preferred Stock= 10,000 shares of $100 par 8% cumulative preferred stock were outstanding throughout the year. The preferred stock is non-convertible
Common Stock= 300,000 shares of common stock were issued and outstanding throughout the year. No shares were issued or repurchased, and there were no stock splits or dividends.
Convertible Bonds= 12% convertible bonds at $4,000,000 face amount. (These bonds were issued in 2015 and they are convertible to a total of 120,000 common shares.
Stock Options=500,000 (These options were issued on July 1, 2020. Each option allows the option holder to purchase one common share for $20. The average market price of the common stock in 2020 was $32 a share.
Other information:
Rogers income tax rate for 2020 is 40%
Rogers did not declare or pay any dividends in 2020
Question:
a. What is Rogers "Income available to common shareholders" for 2020?
b. What is Rogers "Weighted average common shares outstanding" for 2020?
c. Compute Rogers Basic Earnings Per Share for 2020?
d. What will be the "Numerator Effect of the convertible bonds?
e. What will be the "Denominator Effect" of the convertible bonds?
f. What will be the "Numerator Effect" of the stock options?
g. What will be the "Denominator Effect" of the stock options?
h. Compute Rogers Diluted Earnings Per Share for 2020?
In: Accounting
Chapter 9
In Class Exercises: Depreciation Methods
Scenario: Cost = Useful Life (Years) = Useful Life (Hours) = Salvage Value =
a) Calculate the SL annual rate:
30,000 5 140,000 2,000
1) Depreciable Cost = Cost - Salvage ValueDepreciable Cost = -
2) Calculate the Double DB rate:
SL Rate
x2 -
= Double DB rate
b) Calculate depreciation expense, accumulated depreciation and book value for the life of the
asset.
Depreciable Depreciation Annual Depr Accum.
Year Cost
Rate Exp Depr. Book Value
2010
2011
2012
2013
2014
= Depr. Cost
= Salvage Value
2) Method 2: Units of Activity
a) Calculate the Units of Activity rate:
b) Calculate depreciation expense, accumulated depreciation and book value for the life of the
asset.
Year Activity Rate
Annual Depr Exp
Accum.
Depr. Book Value
SL Rate =
x2 DDB Rate =
Units of Depreciation
2010
2011
2012
2013
2014
30,000
20,000
25,000
40,000
25,000
= Depr. Cost
= Salvage Value
140,000
3) Method 3: Double-Declining Balance
a) Calculate depreciation expense, accumulated depreciation and book value for the life of the asset.
Book Value Depreciation Annual Depr Accum.
Year Beg. Of Year Rate Exp Depr. Book Value
2010
2011
2012
2013
2014
30,000
= Salvage Value
PLUG
= Depr. Cost
In: Accounting
Workers are compensated by firms with “benefits” in addition to wages and salaries. The most prominent benefit offered by many firms is health insurance. Suppose that in 2000, workers at one steel plant were paid $30 per hour and in addition received health benefits at the rate of $6 per hour. Also suppose that by 2010 workers at that plant were paid $31.5 per hour but received $13.5 in health insurance benefits.
a. By what percentage did total compensation (wages plus benefits) change at this plant from 2000 to 2010? Instructions: Round your answer to 2 decimal places. Total compensation by: What was the approximate average annual percentage change in total compensation? Instructions: Round your answer to 2 decimal places.
b. By what percentage did wages change at this plant from 2000 to 2010? Instructions: Enter your answer as a whole number. Wages by: What was the approximate average annual percentage change in wages? Instructions: Round your answer to 1 decimal place.
c. If workers value a dollar of health benefits as much as they value a dollar of wages, by what total percentage will they feel that their incomes have risen over this time period? Instructions: Round your answer to 2 decimal places. What if they only consider wages when calculating their incomes? Incomes by:
d. Is it possible for workers to feel as though their wages are stagnating even if total compensation is rising?
In: Economics
Paper Printing Company purchased a copy machine for
$ 65 comma 000$65,000
on January 1, 2010. The copy machine had an estimated useful life of five years or
1 comma 000 comma 0001,000,000
copies. Paper Printing estimated the copy machine's salvage value to be
$ 5 comma 000$5,000.
The company made
250 comma 000250,000
copies in 2010 and
190 comma 000190,000
copies in 2011.Requirements
LOADING...
1. Calculate the depreciation expense for each year using the straight line method.
|
- |
= |
/ |
= |
Depreciation expense |
|||||
|
- |
= |
/ |
= |
Now we can determine the depreciation per unit. (Round to two decimal places.)
|
/ |
= |
Cost per copy |
||||
|
/ |
= |
Now that the cost per unit has been established we can now depreciate the copy machine based on the number of copies produced.
|
Year |
x |
= |
Depreciation expense |
|||
|
2010 |
x |
= |
||||
|
2011 |
x |
= |
2. Which method portrays the actual use of this asset more accurately? Explain your answer.
When using straight-line depreciation the depreciation expense
▼
is higher at the end of life of the asset
is lower at the end of the life of the asset
remains the same every year
. Straight-line depreciation assumes that the asset will be used
▼
equally
less
more
every year. Activity depreciation is also known as
▼
straight line
units of production
double declining balance
. The activity method depends on the
▼
actual
estimated
number of units produced.
In: Accounting
|
TravelToday, disclosed the following rounded amounts (in thousands) concerning the Allowance for Doubtful Accounts on its Form 10-K annual report. |
|
SCHEDULE II |
||||||||||||||||
| Allowance for Doubtful Accounts |
Balance at Beginning of Year |
Additions Charged to Bad Debt Expense |
Write-Offs | Balance at End of Year |
||||||||||||
| 2012 | $ | 9,000 | $ | 4,000 | $ | 1,200 | $ | 11,800 | ||||||||
| 2011 | 8,000 | 4,600 | 3,600 | 9,000 | ||||||||||||
| 2010 | 12,500 | 900 | ? | 8,000 | ||||||||||||
| Required: | |
| 1-a. |
Prepare a T-account for the Allowance for Doubtful Accounts and enter into it the 2011 amounts from the above schedule. The balance at the beginning of each year in the Allowance for Doubtful Accounts is a credit balance. (Enter your answers in thousands.) |
| 1-b. |
Write the T-account in equation format to prove that the above items account for the changes in the account. (Enter your answers in thousands.) |
| 2. |
Record summary journal entries for 2012 related to (a) estimating Bad Debt Expense and (b) writing off specific balances. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in thousands.) |
| 3. |
Supply the missing information for 2010. (Enter your answers in thousands.) |
| 4. |
If TravelToday had written off an additional $30 of Accounts Receivable during 2010, by how much would Net Receivables have decreased? How much would Net Income have decreased? (Enter your answers in thousands.) |
In: Accounting
Grocery workers are one of the essential workers in the time of COVID19 pandemic. One of the grocery workers are Costco workers. Suppose that the Costco company wants to hire more workers due to COVID 19 and Costco workers want to work fewer hours due to COVID 19. What will happen to equilibrium wage per hour of Costco workers and equilibrium number of hours of Costco workers? Analyze how equilibrium wage and number of working hours will change due to COVID 19 in three graphs because there may be three cases depending on the relative size of change in labor demand and labor supply. Label clearly Y-axis, X-axis, and two equilibrium points as E0 before COVID 19 and as E1 after COVID 19 and labor demand and supply as LD0 and LS0 before COVID 19 and labor demand and supply as LD1 and LS1 after COVID19. Show the change in equilibrium wage and working hours by arrows and summarize how these two (wage and working hours) changes in each case in words after drawing graphs
In: Economics