A Company is closing its books on December 31, 2019. On January 3, 2020, a monthly freight bill of $15,000 was received. The bill specifically related to merchandise purchased in December 2019, one-third of which was still in inventory at December 31, 2019. The freight charge was not included in either the inventory or accounts payable at December 31, 2019. For both items below, indicate whether the adjustment needed is an increase or decrease by putting an “X” over increase or decrease; also enter the amount of the adjustment in the space provided.
Inventory increase decrease $_________
accounts payable increase decrease $__________
In: Accounting
The following accounts appeared on the trial balance of Ewana Company at December 31, 2020.
| Notes Payable (short-term) | $192,000 | Accounts Receivable | $518,400 | |
| Accumulated Depreciation - Bldg. | 783,000 | Prepaid Insurance | 56,250 | |
| Supplies | 37,800 | |||
| Salaries and Wages Payable | 34,200 | Common Stock | 1,125,000 | |
| Debt Investments (long-term) | 281,400 | Unappropriated Retained Earnings | 318,000 | |
| Cash | 170,250 | Inventory | 1,580,250 | |
| Bonds Payable Due 1/1/2025 | 1,200,000 | Land | 465,000 | |
| Allowance for Doubtful Accts. | 7,800 | Trading Securities | 73,200 | |
| Copyrights | 192,900 | Interest Payable | 5,700 | |
| Notes Receivable (due in 6 months) | 138,000 | Buildings | 1,926,000 | |
| Income Taxes Payable | 156,000 | Accounts Payable | 409,950 | |
| Preferred Stock | 750,000 | Additional Paid-in Capital | 163,800 | |
| Appropriated Retained Earnings | 294,000 |
Instructions: Compute each of the following. You must show your work.
1. Total current assets
2. Total property, plant, and equipment
3. Total assets
4. Total current liabilities
5. Total stockholders’ equity
In: Accounting
The following transactions occurred for X Company in May 2020:
| Performed services for clients on account | $9,671 |
| Performed services for clients for cash | 3,378 |
| Incurred operating expenses on account | 4,909 |
| Paid salaries to employees | 1,607 |
| Collected cash from accounts receivable | 7,221 |
| Paid cash on accounts payable | 3,357 |
What was the net effect of these transactions on May profit?
| A: $3,546 | B: $4,007 | C: $4,528 | D: $5,116 | E: $5,781 | F: $6,533 |
In: Accounting
During 2020, Shamrock Company started a construction job with a contract price of $1,600,000. The job was completed in 2022. The following information is available.
|
2020 |
2021 |
2022 |
||||
|---|---|---|---|---|---|---|
|
Costs incurred to date |
$405,900 | $830,680 | $1,074,000 | |||
|
Estimated costs to complete |
584,100 | 262,320 | –0– | |||
|
Billings to date |
302,000 | 898,000 | 1,600,000 | |||
|
Collections to date |
272,000 | 818,000 | 1,420,000 |
Compute the amount of gross profit to be recognized each year, assuming the percentage-of-completion method is used.
|
Gross profit recognized in 2020 |
$enter a dollar amount |
|
|---|---|---|
|
Gross profit recognized in 2021 |
$enter a dollar amount |
|
|
Gross profit recognized in 2022 |
$enter a dollar amount |
Prepare all necessary journal entries for 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. For costs incurred use account Materials, Cash, Payables.)
|
Account Titles and Explanation |
Debit |
Credit |
|---|---|---|
|
enter an account title to record cost of construction |
enter a debit amount |
enter a credit amount |
|
enter an account title to record cost of construction |
enter a debit amount |
enter a credit amount |
|
(To record cost of construction.) |
||
|
enter an account title to record progress billings |
enter a debit amount |
enter a credit amount |
|
enter an account title to record progress billings |
enter a debit amount |
enter a credit amount |
|
(To record progress billings.) |
||
|
enter an account title to record collections |
enter a debit amount |
enter a credit amount |
|
enter an account title to record collections |
enter a debit amount |
enter a credit amount |
|
(To record collections.) |
||
|
enter an account title to recognize revenue |
enter a debit amount |
enter a credit amount |
|
enter an account title to recognize revenue |
enter a debit amount |
enter a credit amount |
|
enter an account title to recognize revenue |
enter a debit amount |
enter a credit amount |
|
(To recognize revenue.) |
Compute the amount of gross profit to be recognized each year, assuming the completed-contract method is used.
|
2020 |
2021 |
2022 |
||||
|---|---|---|---|---|---|---|
|
Gross profit |
$enter a dollar amount |
$enter a dollar amount |
$enter a dollar amount |
In: Accounting
On July 31, 2020, Oriole Company paid $2,750,000 to acquire all
of the common stock of Conchita Incorporated, which became a
division (a reporting unit) of Oriole. Conchita reported the
following balance sheet at the time of the acquisition.
| Current assets |
$730,000 |
Current liabilities |
$560,000 |
|||
|---|---|---|---|---|---|---|
| Noncurrent assets |
2,450,000 |
Long-term liabilities |
460,000 |
|||
| Total assets |
$3,180,000 |
Stockholders’ equity |
2,160,000 |
|||
| Total liabilities and stockholders’ equity |
$3,180,000 |
It was determined at the date of the purchase that the fair value
of the identifiable net assets of Conchita was $2,510,000. Over the
next 6 months of operations, the newly purchased division
experienced operating losses. In addition, it now appears that it
will generate substantial losses for the foreseeable future. At
December 31, 2020, Conchita reports the following balance sheet
information.
| Current assets |
$470,000 |
||
| Noncurrent assets (including goodwill recognized in purchase) |
2,050,000 |
||
| Current liabilities |
(620,000 |
) |
|
| Long-term liabilities |
(420,000 |
) |
|
| Net assets |
$1,480,000 |
Finally, it is determined that the fair value of the Conchita
Division is $1,850,000.
a. Compute the amount of goodwill recognized, if any, on July
31, 2020. (If answer is zero, do not leave answer field
blank. Enter 0 for the amount.)
|
The amount of goodwill b. Determine the impairment loss, if any, to be recorded on
December 31, 2020. (If answer is zero, do not leave
answer field blank. Enter 0 for the
amount.)
|
In: Accounting
On January 1, 2020, the general ledger of a Company includes the following account balances:
| Accounts | Debit | Credit | ||||
| Cash | $ | 84,000 | ||||
| Accounts Receivable | 53,000 | |||||
| Allowance for Uncollectible Accounts | $ | 5,000 | ||||
| Inventory | 44,000 | |||||
| Building | 84,000 | |||||
| Accumulated Depreciation | 24,000 | |||||
| Land | 214,000 | |||||
| Accounts Payable | 34,000 | |||||
| Notes Payable (8%, due in 3 years) | 48,000 | |||||
| Common Stock | 114,000 | |||||
| Retained Earnings | 254,000 | |||||
| Totals | $ | 479,000 | $ | 479,000 | ||
The $44,000 beginning balance of inventory consists of 400 units,
each costing $110.
During January 2020, the following transactions occurred:
| January | 2 | Received a $34,000 6-month, 6% note on a loan the company made to another company | ||
| January | 5 | Purchased 5,000 units of inventory on account for $500,000 ($100 each) with terms 1/10, n/30. | ||
| January | 8 | Returned 130 defective units of inventory purchased on January 5. | ||
| January | 15 | Sold 4,800 units of inventory on account for $576,000 ($120 each) with terms 2/10, n/30. Record 2 entries for this transaction. | ||
| January | 17 | Customers returned 100 units sold on January 15. These units were originally purchased by the company on January 5. The units were placed in inventory to be sold in the future. Record 2 entries for this transaction. | ||
| January | 20 | Received cash from customers on accounts receivable. This amount includes $50,000 from 2019 plus amount receivable on sale of 4,200 units sold on January 15. | ||
| January | 21 | Wrote off remaining accounts receivable from 2019. | ||
| January | 24 | Paid on accounts payable. The amount includes the amount owed at the beginning of the period plus the amount owed from purchase of 4,600 units on January 5. | ||
| January | 28 | Paid cash for salaries during January, $42,000. | ||
| January | 29 | Paid cash for utilities during January, $24,000. | ||
| January | 30 | Paid dividends, $3,000. |
The following information is available on January 31, 2020 for
adjusting entries at the end of the month.
Please record ALL journal entries (January 2 - January 31)
In: Accounting
CSI Products Ltd., a public company, purchased a patent on January 1, 2020, for $ 1,120,000. At the time of the purchase, the patent had a remaining legal life of 20 years. In January 2023, CSI spent $ 92,000 successfully defending the patent in court. One of the other results of the court case was the discovery that the patent would only have a remaining useful life of 9 years. CSI’s year end was December 31.
Instructions Prepare the entries on the books of CSI to record
a) To record the purchase of the patent
b) To record the legal defence of the patent
c) To record 2023 amortization
Part B. The owners of Amazon Corp. are planning to sell the business. The cumulative earnings for the past five years are $ 600,000 including non-recurring losses of $ 100,000. The annual earnings based on an average rate of return for this industry would be $ 80,000. If excess earnings are to be capitalized at 12%, what is the implied goodwill?
In: Accounting
Bell Company, a manufacturer of audio systems, started its
production in October 2020. For the preceding 3 years, Bell had
been a retailer of audio systems. After a thorough survey of audio
system markets, Bell decided to turn its retail store into an audio
equipment factory.
Raw material costs for an audio system will total $77 per unit.
Workers on the production lines are on average paid $15 per hour.
An audio system usually takes 7 hours to complete. In addition, the
rent on the equipment used to assemble audio systems amounts to
$6,000 per month. Indirect materials cost $5 per system. A
supervisor was hired to oversee production; her monthly salary is
$3,800.
Factory janitorial costs are $2,200 monthly. Advertising costs for
the audio system will be $9,200 per month. The factory building
depreciation expense is $6,000 per year. Property taxes on the
factory building will be $9,600 per year.
Assuming that Bell manufactures, on average, 1,000 audio systems per month, enter each cost item on your answer sheet, placing the dollar amount per month under the appropriate headings. Total the dollar amounts in each of the columns.
|
Product Costs |
||||||||
|
|
Direct |
Direct |
Manufacturing |
Period |
||||
| Raw materials |
$ |
$ |
$ |
$ |
||||
| Wages for workers | ||||||||
| Rent on equipment | ||||||||
| Indirect materials | ||||||||
| Factory supervisor’s salary | ||||||||
| Janitorial costs | ||||||||
| Advertising | ||||||||
| Depreciation on factory building | ||||||||
| Property taxes on factory building | ||||||||
|
$ |
$ |
$ |
$ |
|||||
In: Accounting
Marigold Company has the following investments as of December 31, 2020:
| Investments in common stock of Laser Company | $1,430,000 | |
| Investment in debt securities of FourSquare Company | $3,090,000 |
In both investments, the carrying value and the fair value of these
two investments are the same at December 31, 2020. Marigold’s stock
investments does not result in significant influence on the
operations of Laser Company. Marigold’s debt investment is
considered held-to-maturity. At December 31, 2021, the shares in
Laser Company are valued at $990,000; the debt investment
securities of FourSquare are valued at $2,310,000 and are
considered impaired.
New attempt is in progress. Some of the new entries may impact the last attempt grading.Your answer is partially correct.
Prepare the journal entry to record the impairment of the debt securities at December 31, 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
|
Date |
Account Titles and Explanation |
Debit |
Credit |
| Dec. 31, 2021 | |||
eTextbook and Media
Assistance Used
List of Accounts
Partially correct answer iconYour answer is partially correct.
Assuming the fair value of the Laser shares is $1,320,000 and the value of its debt investment is $2,790,000, what entries, if any, should be recorded in 2022 related to impairment? (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
|
Date |
Account Titles and Explanation |
Debit |
Credit |
| Dec. 31, 2022 | |||
eTextbook and Media
List of Accounts
New attempt is in progress. Some of the new entries may impact the last attempt grading.Your answer is partially correct.
Assume that the debt investment in FourSquare Company was available-for-sale and the expected credit loss was $880,000. Prepare the journal entry to record this impairment on December 31, 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
|
Account Titles and Explanation |
Debit |
Credit |
In: Accounting
Cullumber Company purchased a patent on January 1, 2020 for
$712000. The patent had a remaining useful life of 10 years at that
date. In January of 2021, Cullumber successfully defends the patent
at a cost of $302400, extending the patent’s life to 12/31/32. What
amount of amortization expense would Cullumber record in
2021?
| $101440 |
| $71200 |
| $78600 |
| $83600 |
In: Accounting