Raleigh Department Store uses the conventional retail method for the year ended December 31, 2016. Available information follows:

The inventory at January 1, 2016, had a retail value of $51,000 and a cost of $38,060 based on the conventional retail method.

Transactions during 2016 were as follows:

Sales to employees are recorded net of discounts.

The retail value of the December 31, 2017, inventory was $60,180, the cost-to-retail percentage for 2017 under the LIFO retail method was 75%, and the appropriate price index was 102% of the January 1, 2017, price level.

The retail value of the December 31, 2018, inventory was $51,450, the cost-to-retail percentage for 2018 under the LIFO retail method was 74%, and the appropriate price index was 105% of the January 1, 2017, price level.

Required:
1. Estimate ending inventory for 2016 using the conventional retail method.
2. Estimate ending inventory for 2016 assuming Raleigh Department Store used the LIFO retail method.
3. Assume Raleigh Department Store adopts the dollar-value LIFO retail method on January 1, 2017. Estimating ending inventory for 2017 and 2018.

Raleigh Department Store uses the conventional retail method for the year ended December 31, 2016. Available information follows: The inventory at January 1, 2016, had a retail value of $42,000 and a cost of $32,690 based on the conventional retail method. Transactions during 2016 were as follows: Cost Retail Gross purchases $ 236,780 $ 460,000 Purchase returns 6,200 23,000 Purchase discounts 4,700 Gross sales 430,000 Sales returns 6,000 Employee discounts 5,000 Freight-in 27,000 Net markups 22,000 Net markdowns 23,000 Sales to employees are recorded net of discounts. The retail value of the December 31, 2017, inventory was $53,045, the cost-to-retail percentage for 2017 under the LIFO retail method was 76%, and the appropriate price index was 103% of the January 1, 2017, price level. The retail value of the December 31, 2018, inventory was $47,170, the cost-to-retail percentage for 2018 under the LIFO retail method was 75%, and the appropriate price index was 106% of the January 1, 2017, price level. Required: 1. Estimate ending inventory for 2016 using the conventional retail method. 2. Estimate ending inventory for 2016 assuming Raleigh Department Store used the LIFO retail method. 3. Assume Raleigh Department Store adopts the dollar-value LIFO retail method on January 1, 2017. Estimating ending inventory for 2017 and 2018.

Green Landscaping Inc. is preparing its budget for the first quarter of 2017. 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 2016 and expected service revenues for 2017 are November 2016, $91,690; December 2016, $82,770; January 2017, $101,930; February 2017, $121,930; March 2017, $134,390. Purchases of landscaping supplies (direct materials) are paid 60% in the month of purchase and 40% the following month. Actual purchases for 2016 and expected purchases for 2017 are December 2016, $18,090; January 2017, $17,410; February 2017, $20,720; March 2017, $21,570. (a) Prepare the following schedules for each month in the first quarter of 2017 and for the quarter in total: (1) Expected collections from clients. GREEN LANDSCAPING INC. Schedule of Expected Collections From Clients January February March Quarter November $ $ $ $ December January February March Total collections $ $ $ $ (2) Expected payments for landscaping supplies. GREEN LANDSCAPING INC. Schedule of Expected Payments for Landscaping Supplies January February March Quarter December $ $ $ $ January February March Total payments $ $ $ $ (b) Determine the following balances at March 31, 2017: (1) Accounts receivable $ (2) Accounts payable $

During 2016 and 2017, Agatha Corp. completed the following transactions relating to its bond issue. The corporation’s fiscal year is the calendar year. 2016 Jan. 1 Issued $250,000 of 10-year, 6 percent bonds for $241,000. The annual cash payment for interest is due on December 31. Dec. 31 Recognized interest expense, including the straight-line amortization of the discount, and made the cash payment for interest. Dec. 31 Closed the interest expense account. 2017 Dec. 31 Recognized interest expense, including the straight-line amortization of the discount, and made the cash payment for interest. Dec. 31 Closed the interest expense account. Required a-1. When the bonds were issued, was the market rate of interest more or less than the stated rate of interest? More Less a-2. If Agatha had sold the bonds at their face amount, what amount of cash would Agatha have received? b. Prepare the general journal entries for the above transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) c. Prepare the liabilities section of the balance sheet at December 31, 2016 and 2017. (Amounts to be deducted should be indicated with minus sign.) d. Determine the amount of interest expense that will be reported on the income statements for 2016 and 2017. ` e. Determine the amount of interest that will be paid in cash to the bondholders in 2016 and 2017.

Raleigh Department Store uses the conventional retail method for the year ended December 31, 2016. Available information follows: The inventory at January 1, 2016, had a retail value of $51,000 and a cost of $38,060 based on the conventional retail method. Transactions during 2016 were as follows: Cost Retail Gross purchases $ 344,940 $ 550,000 Purchase returns 6,500 16,000 Purchase discounts 5,600 Gross sales 544,000 Sales returns 5,000 Employee discounts 6,000 Freight-in 29,500 Net markups 31,000 Net markdowns 16,000 Sales to employees are recorded net of discounts. The retail value of the December 31, 2017, inventory was $60,180, the cost-to-retail percentage for 2017 under the LIFO retail method was 75%, and the appropriate price index was 102% of the January 1, 2017, price level. The retail value of the December 31, 2018, inventory was $51,450, the cost-to-retail percentage for 2018 under the LIFO retail method was 74%, and the appropriate price index was 105% of the January 1, 2017, price level.

Required:

1. Estimate ending inventory for 2016 using the conventional retail method.

2. Estimate ending inventory for 2016 assuming Raleigh Department Store used the LIFO retail method.

3. Assume Raleigh Department Store adopts the dollar-value LIFO retail method on January 1, 2017. Estimating ending inventory for 2017 and 2018.

In recent years, Sandhill Co. has purchased three machines. Because of frequent employee turnover in the accounting department, a different accountant was in charge of selecting the depreciation method for each machine, and various methods have been used. Information concerning the machines is summarized in the table below.

For the declining-balance method, Sandhill Co. uses the double-declining rate. For the units-of-activity method, total machine hours are expected to be 30,000. Actual hours of use in the first 3 years were: 2016, 720; 2017, 5,500; and 2018, 7,200.

Compute the amount of accumulated depreciation on each machine at December 31, 2018.

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If machine 2 was purchased on April 1 instead of July 1, what would be the depreciation expense for this machine in 2016? In 2017?

For the following situations, make adjusting entries necessary to prepare government-wide financial statements. Where appropriate, take account of the amounts reported in the fund-level financial statements.  

A) To prepare its government-wide financial statements for the year ended December 31, 2015, the city reported a $900,000 long-term liability for estimated judgments and claims. At December 31, 2016, the city estimated that the long-term liability would be $935,000. (Hint: Carry forward the starting liability and adjust for the increase.)

B) A city instituted a new sales tax starting January 1, 2015. It collected $600,000 of sales taxes during 2015. When the city prepared its fund-level statements, it accrued an additional $200,000 for sales taxes remitted by larger businesses in January, 2016, for taxes collected in the fourth quarter of 2015. However, smaller businesses are not required to remit fourth quarter collections until April, 2017. No accrual was made for those taxes, which were estimated to be $28,000.

C) See facts in situation b. For the calendar year 2016, the city reported sales taxes of $800,000 in its fund-level financial statements. This amount includes all taxes collected in 2016 (applicable to 2016 and 2015), as well as the accrual for larger merchant remittances in January, 2017. The accrual does not include estimated remittances of $35,000 from smaller merchants in April, 2017.

Guardian Framing Inc. prepared the following sales budget for 2016: Guardian Framing Inc. Sales Budget For the Year Ending December 31, 2016 Product and Area Unit Sales Volume Unit Selling Price Total Sales 8" × 10" Frame: East 18,800 $23 $432,400 Central 4,900 23 112,700 West 4,500 23 103,500 Total 28,200 $648,600 12" × 16" Frame: East 12,500 $24 $300,000 Central 2,900 24 69,600 West 1,900 24 45,600 Total 17,300 $415,200 Total revenue from sales $1,063,800 At the end of December 2016, the following unit sales data were reported for the year: Unit Sales 8" × 10" 12" × 16" East 19,364 13,000 Central 4,949 2,842 West 4,320 1,938 For the year ending December 31, 2017, unit sales are expected to follow the patterns established during the year ending December 31, 2016. The unit selling price for the 8" × 10" frame is expected to increase to $24 and the unit selling price for the 12" × 16" frame is expected to increase to $26, effective January 1, 2017. Required: 1. Compute the increase or decrease of actual unit sales for the year ended December 31, 2016, over budget. Use the minus sign to indicate a decrease in amount and percent. Round percents to the nearest whole percent.

Raleigh Department Store uses the conventional retail method for the year ended December 31, 2016. Available information follows: The inventory at January 1, 2016, had a retail value of $47,000 and a cost of $30,860 based on the conventional retail method.

Transactions during 2016 were as follows:

Cost Retail

Gross purchases $ 301,860 $ 510,000

Purchase returns 6,100 12,000

Purchase discounts 5,200

Gross sales 476,000

Sales returns 8,000

Employee discounts 6,000

Freight-in 27,500

Net markups 27,000

Net markdowns 12,000

Sales to employees are recorded net of discounts. The retail value of the December 31, 2017, inventory was $92,560, the cost-to-retail percentage for 2017 under the LIFO retail method was 65%, and the appropriate price index was 104% of the January 1, 2017, price level. The retail value of the December 31, 2018, inventory was $50,290, the cost-to-retail percentage for 2018 under the LIFO retail method was 64%, and the appropriate price index was 107% of the January 1, 2017, price level.

Required: a. Estimate ending inventory for 2016 using the conventional retail method.

b. Estimate ending inventory for 2016 assuming Raleigh Department Store used the LIFO retail method.

c. Assume Raleigh Department Store adopts the dollar-value LIFO retail method on January 1, 2017. Estimating ending inventory for 2017 and 2018.