Kingbird Corp., which uses IFRS, signs non-renewable,
non-cancellable lease agreement to lease robotic equipment from Xiu
Inc. The following information concerns the lease
agreement.
| Inception date | January 1, 2020 | |
| Lease term | 5 years | |
| Fair value of equipment Jan. 1, 2020 | $120,000 | |
| Economic life of leased equipment | 7 years | |
| Annual rental payments starting Jan. 1, 2020 | $21,511 | |
| Option to purchase at the end of the term | none | |
| Depreciation method | Straight-line | |
| Residual value | none | |
| Kingbird’s incremental borrowing rate | 9% |
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In: Accounting
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Prepare adjusting journal entry: The prepaid insurance on January 1, 2018 was $3400 which covers the period |
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| January 1 through August 31, 2018. The insurance premium of $6800 recorded | ||||||
| in August covers the period of September 1, 2018 through August 31, 2019. | ||||||
| Rockford estimates that 50% of the premiums are attributable to general | ||||||
| activities (Use Insurance Expense) and 50% to selling activities. (Use | ||||||
| Miscellaneous Expense). | ||||||
In: Accounting
Question No. 5: (LO6)
Requirement:
Record the Journal Transaction with discount amount with Gross Method and Net Method.
In: Finance
ABC Company purchased a mine in 2017 for $3,400,000. It was estimated that the mine contained 200,000 tons of ore and that the mine would be worthless after all of the ore was extracted. The company extracted 25,500 tons of ore in 2017 and 30,000 tons of ore in 2018. In 2017, ABC Company sold 22,000 tons of ore. In 2018, the company sold 15,000 tons of ore. What is book value of the mine at December 31, 2018
In: Accounting
On 1/1/2018, Diebergs market invested $200m in the equity of Maul's BBQ sauce, which represented a 25% ownership stake. In 2018, Maul's had net income of $10 and declared dividends totaling $10.
1) Record all transaction that Diebergs Co would record in 2018 related to its invested in Maul's under the
a Equity method
b. Cost method
c Fair value method
In: Accounting
On January 1st, 2018, MTU Inc. purchased 25,000 of the 100,000 common shares of Blizzard Co. for $14 per share. Blizzard declared a dividend of $30,000 on June 30th, 2018. On Dec. 31, 2018, Blizzard reported net income of $400,000 and the fair market value of its stock at that point in time was $18 per share.
Prepare all necessary journal entries relating to this investment for MTU Inc.
In: Accounting
In: Accounting
Boxer Corporation has consistently used the percentage-of-completion method of recognizing income. In 2018, Boxer started work on a $45,000,000 construction contract that was completed in 2019. The following information was taken from Boxer's accounting records in 2018.
Progress billings $15,400,000
Costs incurred 14,700,000
Collections 9,600,000
Estimated costs to complete 21,400,000
What amount of gross profit should Boxer have recognized in 2018 on this project?
In: Accounting
On January 1, 2018, Ellison Co. issued 9 year bonds with a face value of $250,000,000 and a stated interest rate of 7.5%, payable semiannually on July 1 and January 1. The bonds were sold to yield 8%.
a. The issue price of the bonds is
b. Record the issuance on January 1, 2018.
c. Prepare the journal entries for the interest expense and payments for 2018, 2019, 2020, 2021 and 2022.
In: Accounting
On January 2, 2018, Smith Co. leased equipment, with a fair value of $750,000, under a capital lease calling for seven annual lease payments of $130,000 beginning January 2, 2018. Smith's incremental borrowing rate on the date of the lease was 10%. However, the lessor's implicit rate, which was known by Smith, was 8%. Provide the amortization table for the lease and the journal entries required for year ended 2018 and 2020.
In: Accounting