Alpha company uses the straight-line method for amortization of all bond premium & discounts. During FY 2016 Alpha had the following bond payable transaction: -January 2, issued 10, $1,000 bonds at 102 1/2. These 5-year bonds are dated January 1, 2016. The contract interest rate is 6%. Interest is payable semi-annual on January 1 and July 1. -July 1, Alpha issued $500,000 of 10%, 10-year bonds. These bonds are dated January 1, 2016, were issued at 88 1/2, and pay interest on July and January 1. -October 1, Alpha issues 10-year bonds $10,000 face value bonds for $10,860 cash. The bonds have a stated rate of 8%. Interest is payable on October 1 and April 1. Use this information to prepare General Journal entries for the three bonds issued and any interest accruals and payments for the FY 2016. There are Three 12/31/16 transactions for the fiscal year accruals.
In: Accounting
Broussard Skateboard's sales are expected to increase by 15% from $7.2 million in 2016 to $8.28 million in 2017. Its assets totaled $5 million at the end of 2016. Broussard is already at full capacity, so its assets must grow at the same rate as projected sales. At the end of 2016, current liabilities were $1.4 million, consisting of $450,000 of accounts payable, $500,000 of notes payable, and $450,000 of accruals. The after-tax profit margin is forecasted to be 5%, and the forecasted payout ratio is 70%. What would be the additional funds needed? Do not round intermediate calculations. Round your answer to the nearest dollar.
-Assume that an otherwise identical firm had $6 million in total assets at the end of 2016. The identical firm's capital intensity ratio (A0*/S0) is (higher/lower/equal to) than Broussard's; therefore, the identical firm is (less, more, the same) capital intensive - it would require (smaller/larger/same) increase in total assets to support the increase in sales.
In: Finance
On June 15, 2016, Sanderson Construction entered into a long-term construction contract to build a baseball stadium in Washington, D.C., for $310 million. The expected completion date is April 1, 2018, just in time for the 2018 baseball season. Costs incurred and estimated costs to complete at year-end for the life of the contract are as follows ($ in millions): 2016 2017 2018 Costs incurred during the year $ 70 $ 60 $ 30 Estimated costs to complete as of December 31 130 30 — Compute the revenue and gross profit will Sanderson report in its 2016, 2017, and 2018 income statements related to this contract assuming Sanderson recognizes revenue over time according to percentage of completion. Compute the amount of revenue and gross profit or loss to be recognized in 2016, 2017, and 2018 using the completed contract method. Suppose the estimated costs to complete at the end of 2017 are $120 million instead of $30 million. Compute the amount of revenue and gross profit or loss to be recognized in 2017 using the percentage of completion method.
In: Accounting
Sarasota Company began operations late in 2016 and adopted the
conventional retail inventory method. Because there was no
beginning inventory for 2016 and no markdowns during 2016, the
ending inventory for 2016 was $11,811 under both the conventional
retail method and the LIFO retail method. At the end of 2017,
management wants to compare the results of applying the
conventional and LIFO retail methods. There was no change in the
price level during 2017. The following data are available for
computations.
|
Cost |
Retail |
|||
| Inventory, January 1, 2017 | $11,811 | $18,900 | ||
| Sales revenue | 80,000 | |||
| Net markups | 9,200 | |||
| Net markdowns | 1,500 | |||
| Purchases | 53,400 | 74,600 | ||
| Freight-in | 6,679 | |||
| Estimated theft | 1,900 |
Compute the cost of the 2017 ending inventory under both:
(A) The conventional retial method. Ending inventory using concentional retal method $_____________ (I kept getting $20,167, which is the incorrect answer. I am unable to get the second two if this one is wrong so please help)
(B) The LIFO retail method
Ending inventory at cost $_____________ and Ending inventory at retail $_____________
In: Accounting
Question 1 Part A and B
A. Nanki Corporation purchased equipment on January 1, 2016, for $630,000. In 2016 and 2017, Nanki depreciated the asset on a straight-line basis with an estimated useful life of eight years and a $6,000 residual value. In 2018, due to changes in technology, Nanki revised the useful life to a total of 6 years with no residual value. What depreciation would Nanki record for the year 2018 on this equipment? (Round your answer to the nearest dollar amount.)
Multiple Choice
$104,000.
$103,183.
$118,500.
None of these answer choices are correct.
B. Broadway Ltd. purchased equipment on January 1, 2016, for $420,000, estimating a 7-year useful life and no residual value. In 2016 and 2017, Broadway depreciated the asset using the straight-line method. In 2018, Broadway changed to sum-of-years'-digits depreciation for this equipment. What depreciation would Broadway record for the year 2018 on this equipment? (Do not round your depreciation rate.)
Multiple Choice
$50,000.
$60,000.
$120,000.
$100,000.
In: Accounting
| Below are three independent and unrelated errors. |
| a. |
On December 31, 2015, Wolfe-Bache Corporation failed to accrue office supplies expense of $1,300. In January 2016, when it received the bill from its supplier, Wolfe-Bache made the following entry: |
| Office supplies expense | 1,300 | ||
| Cash | 1,300 | ||
| b. |
On the last day of 2015, Midwest Importers received a $80,000 prepayment from a tenant for 2016 rent of a building. Midwest recorded the receipt as rent revenue. |
| c. |
At the end of 2015, Dinkins-Lowery Corporation failed to accrue interest of $7,000 on a note receivable. At the beginning of 2016, when the company received the cash, it was recorded as interest revenue. |
| Required: |
| For each error: |
| 1. |
What would be the effect of each error on the income statement and the balance sheet in the 2015 financial statements? |
| 2. |
Prepare any journal entries each company should record in 2016 to correct the errors. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) |
In: Accounting
The Ugenti Construction Company contracted to construct a warehouse building for $2,600,000. Construction began in 2016 and was completed in 2017. Data relating to the contract are summarized below:
2016 2017
Costs incurred during the year................. $ 360,000 $1,650,000
Estimated costs to complete as of 12/31. 1,560,000 -
Billings during the year .......................... 430,000 2,170,000
Cash collections during the year.............. 320,000 2,280,000
Required:
1. Compute the amount of gross profit or loss to be recognized in 2016 and 2017 using the percentage-of-completion method (over time method).
2. Compute the amount of gross profit or loss to be recognized in 2016 and 2017 using the completed contract method (at point in time).
Using Excel, complete this construction handout using the either the format in the textbook or the format in the ABC Construction Contract Worksheet Example posted in Bb. Include all necessary journal entries to record the cost of construction, progress billings, entry to recognize revenue and gross profit and entry to record final approval of the contract.
In: Accounting
Accounting Changes-Depreciation
Described below are two independent and unrelated situations
involving accounting
changes. Each change occurs during 2016 before any adjusting
entries or closing entries
were prepared.
a. On December 30, 2012, Rival Industries acquired its office
building at a cost of
$1,000,000. It was depreciated on a straight-line basis assuming a
useful life of 40
years and no salvage value. However, plans were finalized in 2016
to relocate the
company headquarters at the end of 2020. The vacated office
building will have a
salvage value at that time of $700,000.
b. At the beginning of 2013, the Hoffman Group purchased office
equipment at a cost of
$330,000. Its useful life was estimated to be 10 years with no
salvage value. The
equipment was depreciated by the sum-of-the years’-digits method.
On January 1,
2016, the company changed to the straight-line method.
Instructions:
a. Briefly describe the way company should report this accounting
change in the
financial statements.
b. Prepare any 2016 journal entry related to the change.
In: Accounting
A leading German tour operator sells package tours to Sri Lanka for British and German tourists. On January 1, 2016, tour operator sent its printed catalog to British and German travel agencies quoring price of £7,500 and 10,000EUR, respectively, valid throughout 2016 on their fortnight package tours to Sri Lanka. The cost incurred by tour operator, on a unit basis, is distributed as follows: 5,200EUR for administrative and travel costs and 13,00SRL (Sri Lankan rupees) for residential costs. The exchange rate is SRL 10 per EUR 1.
On August 15, 2016, the Euro is revalued by 15 percent vis-a-vis the British pound due to Brexit. However, because of earlier booking, the euro revaluation cannot be passed through before January 1, 2017.
Assuming that tour operator sells 500 trips every 15 days evenly divided between British and German, assess the impact of the Euro revaluation upon the profitability of tour operator in 2016.
In: Finance
|
Bracy Company acquired a new piece of construction equipment on January 1, 2015, at a cost of $141,000. The equipment was expected to have a useful life of 14 years and a residual value of $22,000 and is being depreciated on a straight-line basis. On January 1, 2016, the equipment was appraised and determined to have a fair value of $153,690, a salvage value of $22,000, and a remaining useful life of thirteen years. |
| a. |
Determine the amount of depreciation expense that Bracy should recognize in determining net income in 2015, 2016, and 2017 and the amount at which equipment should be carried on the December 31, 2015, 2016, and 2017 balance sheets using (1) U.S. GAAP and (2) IFRS. In measuring property, plant, and equipment subsequent to acquisition, Bracy uses the revaluation model in IAS 16. |
| Determine the adjustments that Bracy would make in 2015, 2016, and 2017 to reconcile net income and stockholders’ equity under U.S. GAAP to IFRS. (If there is no reconciliation adjustment select "No adjustment is required to". Input all values as positive numbers. |
In: Accounting