Adger Corporation is a service company that measures its output based on the number of customers served. The company provided the following fixed and variable cost estimates that it uses for budgeting purposes and the actual results for May as shown below:

When preparing its planning budget the company estimated that it would serve 30 customers per month; however, during May the company actually served 35 customers.

Foundational 9-1

Required:

A. What amount of revenue would be included in Adger’s flexible budget for May?

B. What amount of employee salaries and wages would be included in Adger’s flexible budget for May?

C. What amount of travel expenses would be included in Adger’s flexible budget for May?

D. What amount of other expenses would be included in Adger’s flexible budget for May?

E. What net operating income would appear in Adger’s flexible budget for May?

F. What is Adger’s revenue variance for May? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

Chamberlain Enterprises Inc. reported the following receivables in its December 31, 2018, year-end balance sheet: Current assets: Accounts receivable, net of $42,000 in allowance for uncollectible accounts $ 308,000 Interest receivable 15,200 Notes receivable 440,000 Additional Information: The notes receivable account consists of two notes, a $90,000 note and a $350,000 note. The $90,000 note is dated October 31, 2018, with principal and interest payable on October 31, 2019. The $350,000 note is dated June 30, 2018, with principal and 8% interest payable on June 30, 2019. During 2019, sales revenue totaled $1,520,000, $1,370,000 cash was collected from customers, and $40,000 in accounts receivable were written off. All sales are made on a credit basis. Bad debt expense is recorded at year-end by adjusting the allowance account to an amount equal to 10% of year-end accounts receivable. On March 31, 2019, the $350,000 note receivable was discounted at the Bank of Commerce. The bank's discount rate is 8%. Chamberlain accounts for the discounting as a sale. Required: 1. Not including sales revenue, what revenue and expense amounts related to receivables will appear in Chamberlain’s 2019 income statement? 2. & 3. What amounts will appear in the 2019 year-end balance sheet for accounts receivable and Calculate the receivables turnover ratio for 2019.

3. (LESSOR ENTRIES FOR FINANCING LEASE WITH A GUARANTEED RESIDUAL)

The following facts pertain to a non-cancelable lease agreement between Ace Leasing Company and King Company, a lessee.

Commencement of Lease Date January 1, 2020

Annual lease payment due at the beginning of the year beginning with January 1, 2020 $137,171

Residual value of equipment at end of lease term, guaranteed by lessee $54,000

Book Value of Lease Equipment on LESSOR books $500,000

Lease term 6 years

Economic life of leased equipment 7 years

Fair Value of asset at January 1, 2020 $659,000

Lessor’s Implicit Rate 12% Lessee’s incremental borrowing rate 12%

The asset will revert to the lessor at the end of the lease term. You examined this lease from the Lessee prospective in problem #1. Based on the tests you found it was a financing lease. In this problem you will complete the LESSOR entries. You do not need to redo the tests – it is still a financing lease with a guaranteed residual

A. Prepare the entry on the Lessor’s book to record this Lease on 1/1/2020. You will need to compute the Lease Receivable debit, the CGS debit, the Equipment credit and the Sale Revenue credit to complete the entry.

B. Complete the entry to receive the first rental payment on 1/1/2020.

C. Prepare the interest revenue amortization schedule for the first two years and prepare the interest revenue entry for 12/31/2020.

Use the information presented in this worksheet to prepare an income statement, retained earnings statement, and balance sheet. Show cell references if possible.

Chamberlain Enterprises Inc. reported the following receivables in its December 31, 2016, year-end balance sheet:

Additional Information:

1.  The notes receivable account consists of two notes, a $60,000 note and a $200,000 note. The $60,000 note is dated October 31, 2016, with principal and interest payable on October 31, 2017. The $200,000 note is dated June 30, 2016, with principal and 6% interest payable on June 30, 2017.

2.  During 2017, sales revenue totaled $1,340,000, $1,280,000 cash was collected from customers, and $22,000 in accounts receivable were written off. All sales are made on a credit basis. Bad debt expense is recorded at year-end by adjusting the allowance account to an amount equal to 10% of year-end accounts receivable.

3.  On March 31, 2017, the $200,000 note receivable was discounted at the Bank of Commerce. The bank’s discount rate is 8%. Chamberlain accounts for the discounting as a sale.

Required:

1.  In addition to sales revenue, what revenue and expense amounts related to receivables will appear in Chamberlain’s 2017 income statement?

2.  What amounts will appear in the 2017 year-end balance sheet for accounts receivable?

3.  Calculate the receivables turnover ratio for 2017.

Chamberlain Enterprises Inc. reported the following receivables in its December 31, 2016, year-end balance sheet:

Additional Information:

1.  The notes receivable account consists of two notes, a $60,000 note and a $200,000 note. The $60,000 note is dated October 31, 2016, with principal and interest payable on October 31, 2017. The $200,000 note is dated June 30, 2016, with principal and 6% interest payable on June 30, 2017.

2.  During 2017, sales revenue totaled $1,340,000, $1,280,000 cash was collected from customers, and $22,000 in accounts receivable were written off. All sales are made on a credit basis. Bad debt expense is recorded at year-end by adjusting the allowance account to an amount equal to 10% of year-end accounts receivable.

3.  On March 31, 2017, the $200,000 note receivable was discounted at the Bank of Commerce. The bank’s discount rate is 8%. Chamberlain accounts for the discounting as a sale.

Required:

1.  In addition to sales revenue, what revenue and expense amounts related to receivables will appear in Chamberlain’s 2017 income statement?

2.  What amounts will appear in the 2017 year-end balance sheet for accounts receivable?

3.  Calculate the receivables turnover ratio for 2017.

Chamberlain Enterprises Inc. reported the following receivables in its December 31, 2018, year-end balance sheet:

Additional Information:

The notes receivable account consists of two notes, a $60,000 note and a $200,000 note. The $60,000 note is dated October 31, 2018, with principal and interest payable on October 31, 2019. The $200,000 note is dated June 30, 2018, with principal and 6% interest payable on June 30, 2019.

During 2019, sales revenue totaled $1,340,000, $1,280,000 cash was collected from customers, and $22,000 in accounts receivable were written off. All sales are made on a credit basis. Bad debt expense is recorded at year-end by adjusting the allowance account to an amount equal to 10% of year-end accounts receivable.

On March 31, 2019, the $200,000 note receivable was discounted at the Bank of Commerce. The bank's discount rate is 8%. Chamberlain accounts for the discounting as a sale.

Required:
1. Not including sales revenue, what revenue and expense amounts related to receivables will appear in Chamberlain’s 2019 income statement?
2. & 3. What amounts will appear in the 2019 year-end balance sheet for accounts receivable and Calculate the receivables turnover ratio for 2019.

The unadjusted trial balance and adjustment data for Elbow Cycle Repair Shop are provided.

Prepare work sheet.

Additional information:

1. The 12-month insurance policy was purchased on June 1, 2020.
2. A physical count of supplies shows $1,310 on hand on January 31, 2021.
3. The building has an estimated useful life of 50 years. The equipment has an estimated useful life of 9 years.
4. The mortgage payable has a 5% interest rate. Interest is paid on the first day of each month for the previous month's interest.
5. By January 31, 2021, $1,300 of services related to the unearned revenue have been provided.
6. During the next fiscal year, $4,500 of the mortgage payable is to be paid. Prepare a work sheet for the year ended January 31, 2021.

Cider company purchased a 15-month, $50,000, 6% note on June 1, 2019. What is the journal entry for December 31, 2019?

A. Interest Income $1500

Interest receivables $1500

B. Interest Receivable: 1,500

interest income: 1,500

C. interest income: 1,750

interest receivable 1,750

D. interest receivable 1,750

interest income 1,750

On December 31, 2018, the payment on a $4,500, 120-day, 10% note dated November 1, 2018, will recognize: (please round to the nearest dollar and use 365 day year)

A. interest receivables $75

interest revenue: $75

B. Interest revenue: $75

interest receivable: $75

C. no entry needed

D. Interest Receivable: $148

interest revenue: $148

the LBG company is preparing its financial statements on December 31. During the year, they purchased IBM sock as a trading security for $20,000. on December 31, the market value of the stock is $8,000. The journal entry on December 31 will be:

A. Loss        $8000

       IBM stock        $8000

B. IBM stock $12,000

           loss                 $12,000

C. Loss          $12,000

           IBM stock          $12,000

D. no etry

The bank statement balance is $6450, and shows a service charge of $30, interest earned of $25, and a NSF check for $475. Deposits in transit total $1850; outstanding checks are $1125. what is the adjusted bank balance?

A. $5,920

B. $6,450

C. $6,755

D. $7,175