Dobbs Company issues 5%, two-year bonds, on December 31, 2016, with
a par value of $95,000 and semiannual interest payments.
|
Semiannual Period-End |
Unamortized Discount | Carrying Value | ||||||
| (0) | 12/31/2016 | $ | 5,900 | $ | 89,100 | |||
| (1) | 6/30/2017 | 4,425 | 90,575 | |||||
| (2) | 12/31/2017 | 2,950 | 92,050 | |||||
| (3) | 6/30/2018 | 1,475 | 93,525 | |||||
| (4) | 12/31/2018 | 0 | 95,000 | |||||
|
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Use the above straight-line bond amortization table and prepare
journal entries for the following.
Required:
(a) The issuance of bonds on December 31, 2016.
(b) The first through fourth interest payments on each June 30 and December 31.
(c) The maturity of the bond on December 31, 2018.
In: Accounting
| The following information is available for Bergstrom Inc. and Sineann Inc. at December 31, 2016: |
| Accounts | Bergstrom | Sineann | |||||||||||||||||||||||
| Accounts receivable | $ | 57,400 | $ | 79,000 | |||||||||||||||||||||
| Allowance for doubtful accounts | 2,648 | 2,356 | |||||||||||||||||||||||
| Sales revenue | 666,960 | 907,100 | |||||||||||||||||||||||
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In: Accounting
S&L Financial buys and sells securities expecting to earn profits on short-term differences in price. On December 27, 2016, S&L purchased Coca-Cola common shares for $805,000 and sold the shares on January 3, 2017, for $809,000. At December 31, the shares had a fair value of $800,500. These securities were classified as Trading Securities.
On December 27, 2016, S&L purchased Coca-Cola common shares for $730,000 and sold the shares on January 3, 2017, for $733,000.
At December 31, the shares had a fair value of $728,000. These securities were classified as Available-for-Sale securities. What amount should S&L include in its 2016 and 2017 earnings as a result of this investment?
In: Accounting
Question 2 a. What is GDP? Explain the three methods that the Australian Bureau of Statistics uses to calculate GDP.
b. If in 2016 the CPI is 100 and nominal wages are $500 and in 2017 the CPI is 120 and nominal wages are $550. What is the level of price inflation from 2016 to 2017? Explain whether real wages have increased from 2016 to 2017?
c. Define structural, frictional and cyclical unemployment. Which of these types of unemployment do the 'long-term unemployed' belong?
d. Explain why the growth in real per capita GDP is a more appropriate measure of economic growth that nominal GDP for the whole country. e. In an 'economic boom' what is likely to happen to inflation, unemployment and the participation rate? Explain why.
In: Economics
West Wing Distribution Corporation has a fiscal year end of December 31. On March 15, 2017, the company’s 2016 financial statements were issued. Between December 31, 2016 and March 15, 2017, the following occurred:
1. On January 22, 2017, the company negotiated a major merger with Blakedon Industries to be completed by the middle of 2017.
2. On February 3, 2017, West Wing negotiated a $10 million long-term note (material amount) with the Credit Bank of Pennsylvania.
3. A flood destroyed one of the company’s manufacturing plants causing $600,000 of uninsured damage on February 25, 2017.
Determine the appropriate treatment of each of these events in the 2016 financial statements of West Wing Distribution Corporation.
In: Accounting
P9-6A Altona Limited purchased delivery equipment on March 1, 2016, for $130,000 cash. At that time, the equipment was estimated to have a useful life of five years and a residual value of $10,000. The equipment was disposed of on November 30, 2018. Altona uses the diminishing-balance method at one time the straight-line depreciation rate, has an August 31 year end, and makes adjusting entries annually. Please show steps.
Instructions
(a) Record the acquisition of equipment on March 1, 2016.
(b) Record depreciation at August 31, 2016, 2017, and 2018.
(c) Record the disposal of the equipment on November 30, 2018, under each of the following independent assumptions:
In: Accounting
n 2017, Frost Company, which began operations in 2015, decided to change from LIFO to FIFO because management believed that FIFO better represented the flow of their inventory. Management prepared the following analysis showing the effect of this change:
|
Ending Inventory |
LIFO |
FIFO |
Cumulative Difference |
| 12/31/2015 | $240,000 | $273,000 | $33,000 |
| 12/31/2016 | 245,000 | 301,000 | 56,000 |
| 12/31/2017 | 256,000 | 328,000 | 72,000 |
Frost reported net income of $2,500,000, $2,400,000, and $2,100,000 in 2015, 2016, and 2017, respectively. The tax rate is 30%.
Required:
| 1. | Prepare the journal entry necessary to record the change. |
| 2. | What amount of net income would Frost report in 2015, 2016, and 2017? |
In: Accounting
AFN EQUATION
Carlsbad Corporation's sales are expected to increase from $5 million in 2016 to $6 million in 2017, or by 20%. Its assets totaled $4 million at the end of 2016. Carlsbad is at full capacity, so its assets must grow in proportion to projected sales. At the end of 2016, current liabilities are $1 million, consisting of $250,000 of accounts payable, $500,000 of notes payable, and $250,000 of accrued liabilities. Its profit margin is forecasted to be 5%, and the forecasted retention ratio is 35%. Use the AFN equation to forecast the additional funds Carlsbad will need for the coming year. Write out your answer completely. For example, 5 million should be entered as 5,000,000. Round your answer to the nearest cent.
In: Finance
The following events apply to Gulf Seafood for the 2016 fiscal
year:
1. The company started when it acquired $34,000 cash by issuing common stock.
2. Purchased a new cooktop that cost $13,600 cash
3. Earned $20,600 in cash revenue.
4. Paid $12,100 cash for salaries expense.
5. Adjusted the records to reflect the use of the cooktop. Purchased on January 1, 2016, the cooktop has an expected useful life of five years and an estimated salvage value of $3,200. Use straight-line depreciation. The adjusting entry was made as of December 31, 2016.
a) Record the events in general journal format AND post to T-accounts.
cash, equipment, accumulated depreciation, common stock, sales revenue, salaries expense, depreciation expense
In: Accounting
CASE 3 (25 points)
Income statements and balance sheets for Melia Corporation follow.
Income Statements for Years 2015 and 2016
2015 2016
| Net sales | $438,000 | $575,000 |
| - Cost of goods sold | -285,000 | -380,000 |
| Gross profit | 153,000 | 195,000 |
| -Administrative expenses | -45,000 | -65,000 |
| -Marketing expenses | -32,000 | -39,000 |
| -Research and development | -20,000 | -27,000 |
| -Depreciation | -14,000 | -17,000 |
| EBIT | 42,000 | 47,000 |
| -Interest expense | -12,000 | -20,000 |
| income before taxes | 30,000 | 27,000 |
| -Income before taxes | -9,000 | -8,000 |
| Net income | $21,000 | $19,000 |
Balance Sheets for Years Ended 2014, 2015, and 2016
Assets 2014 2015 2016
| Cash and marketable securities | $10,000 | $10,000 | $5,000 |
| Receivable | 60,000 | 75,000 | 105,000 |
| Inventories | 70,000 | 95,000 | 140,000 |
| Total current assets | 140,000 | 180,000 | 250,000 |
| Gross plant and equipment | 205,000 | 205,000 | 255,000 |
| Less: accumulated depreciation | -28,000 | -42,000 | -59,000 |
| Net plant and equipment | 177,000 | 163,000 | 196,000 |
| Total assets | $317,000 | $343,000 | $446,000 |
| Liabilities and Equity | |||
| Payable | 47,000 | 57,000 | 84,000 |
| Short -term bank loan | 40,000 | 44,000 | 110,000 |
| Accrued liabilities | 95,000 | 110,000 | 204,000 |
| Long-term debt | 100,000 | 90,000 | 80,000 |
| Owners equity | 122,000 | 143,000 | 162,000 |
| Total liabilities and equity | $317,000 | $343,000 | $446,000 |
Instructions:
1. Using the above information, calculate for 2015 and 2016 the
following: a. Receivables turnover, Inventory turnover, and
Payables turnover.
b. Receivables period, Inventory period, and Payables period.
c. Operating Cycle and Cash Conversion Cycle.
(5 points) (5 points) (5 points)
2. Discuss the changes that took place from 2015 to 2016 and suggest the ways how the company could improve its performance. (10 points)
In: Finance