Garden Works Co. had a number of transactions involving receivables during the year 2017. Each of them follows.
Required
Prepare journal entries to record these independent transactions on the books of Garden Works Co. The Company's year-end is December 31.
a. On November 15, 2017, Garden Works Co. agreed to accept $500 in cash and a $2,000,90 day, 8% note from Agro Company to settle its $2,500 past-due account. Determine the maturity date and record the entry on November 15, on December 31, and on the date of maturity
b. Garden Works Co. held a $1,800, 6% 45 day note of Altamira Industries. At Maturity, December 15, Altamira dishonoured the note.
Record the dishonouring of the Note Receivable.
In: Accounting
Dog Co. acquired and placed in service the following assets during the year:
| Date | Cost | ||
| Asset | Placed in Service | Basis | |
| Computer equipment | 2/22 | $ | 10,500 |
| Furniture | 3/5 | 21,000 | |
| Commercial building | 7/6 | 315,000 | |
Assuming Dog Co. does not elect §179 expensing and elects not to use bonus depreciation, answer the following questions: (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.) (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.)
b. What is Dog Co.'s year 3 cost recovery for each asset if Dog Co. sells all of these assets on 4/10 of year 3?
In: Accounting
Motor Co. said it will repurchase $2.4 billion of its shares to
reduce dilution from recent stock grants to executives.
The par amount per share for Motor ’s common stock is $0.01.
Paid-in capital—excess of par is $5.99 per share on average. The
market price was $19.0.
Directions:
1. Suppose Motor Co. reacquires 118.00 million
shares through repurchase on the open market at $19.00 per share.
Prepare the appropriate journal entry to record the purchase. Motor
Co. considers the shares it buys back to be treasury stock.
2. Suppose Motor Co. considers the shares it buys
back to be retired rather than treated as treasury stock. Prepare
the appropriate journal entry to record the purchase.
In: Accounting
Journalize the transactions.
| Oct. 1 | Diane Lexington begins business as a real estate agent with a cash investment of $20,000 in exchange for common stock. |
| 2 | Hires an administrative assistant. |
| 3 | Purchases office furniture for $2,300, on account. |
| 6 | Sells a house and lot for N. Fennig; bills N. Fennig $3,600 for realty services performed. |
| 27 | Pays $850 on the balance related to the transaction of October 3. |
| 30 |
Pays the administrative assistant $2,500 in salary for October. |
In: Accounting
Ecco Company sold $147,000 of kitchen appliances with six-month warranties during September. The cost to repair defects under the warranty is estimated at 6% of the sales price. On October 15, a customer required a $120 part replacement, plus $84 labor under the warranty.
a. Provide the journal entry for the estimated expense on September 30.
b. Provide the journal entry for the October 15 warranty work. If an amount box does not require an entry, leave it blank.
In: Accounting
Marano Corporation produces and sells a single product. In October, the company sold 1,000 units. Its total sales were $156,000, its total variable expenses were $79,000, and its total fixed expenses were $55,900.
a. Construct the company's contribution format income statement for October. (Do not round intermediate calculations.)
b. Redo the company's contribution format income statement assuming that the company sells 900 units. (Do not round intermediate calculations.)
In: Accounting
Nuthatch Corporation began its operations on September 1 of the current year. Budgeted sales for the first three months of business September, October, and November are $243,000, $307,000, and $429,000, respectively. The company expects to sell 30% of its merchandise for cash. Of sales on account, 80% are expected to be collected in the month of the sale and 20% in the month following the sale.
The cash collections expected in October from accounts receivable are estimated to be
a.$247,128
b.$205,940
c.$171,920
d.$137,900
In: Accounting
San Lorenzo General Store uses a periodic inventory system and
the retail inventory method to estimate ending inventory and cost
of goods sold. The following data are available for the month of
October 2018:
| Cost | Retail | |||||
| Beginning inventory | $ | 47,000 | $ | 62,000 | ||
| Net purchases | 10,480 | 32,800 | ||||
| Net markups | 2,400 | |||||
| Net markdowns | 1,400 | |||||
| Net sales | 44,000 | |||||
Required:
Complete the table below to estimate the average cost of ending
inventory and cost of goods sold for October.
In: Accounting
The following items were selected from among the transactions completed by Emerald Bay Stores Co. during the current year:
| Feb. 15. | Purchased merchandise on account from Hood Co., $144,000, terms n/30. |
| Mar. 17. | Issued a 60-day, 6% note for $144,000 to Hood Co., on account. |
| May 16. | Paid Hood Co. the amount owed on the note of March 17. |
| June 15. | Borrowed $140,400 from Acme Bank, issuing a 60-day, 7% note. |
| July 21. | Purchased tools by issuing a $117,000, 90-day note to Columbia Supply Co., which discounted the note at the rate of 9%. |
| Aug. 14. | Paid Acme Bank the interest due on the note of June 15 and renewed the loan by issuing a new 60-day, 10% note for $140,400. (Journalize both the debit and credit to the notes payable account.) |
| Oct. 13. | Paid Acme Bank the amount due on the note of August 14. |
| Oct. 19. | Paid Columbia Supply Co. the amount due on the note of July 21. |
| Dec. 1. | Purchased office equipment from Mountain Equipment Co. for $132,000, paying $22,000 and issuing a series of ten 6% notes for $11,000 each, coming due at 30-day intervals. |
| Dec. 12. | Settled a product liability lawsuit with a customer for $83,000, payable in January. Emerald Bay accrued the loss in a litigation claims payable account. |
| Dec. 31. | Paid the amount due Mountain Equipment Co. on the first note in the series issued on December 1. |
Required:
1. Journalize the transactions. If an amount box does not require an entry, leave it blank. Assume a 360-day year. If required, round to one decimal place. Don't round the intermediate calculations.
For a compound transaction, accounts should be listed largest to smallest.
In: Accounting
Big Co. purchases shares of Little Co starting on 1/1/21. Little Co. has 100,000 shares of stock outstanding. Relevant data shown below:
1/1/21: Purchased 5,000 shares at $18/share, plus $10 commission.
11/1/21: Little Co. paid common dividends totaling $10,000
12/31/21: Little Co. stock trading at $20/share
4/1/22: Purchased 6,000 shares at $21/share, plus $10 commission
11/1/22: Little Co. paid dividends totaling $10,000
12/31/22: Little Co stock trading at $19/share
3/1/23: Sold 1,000 shares of Little Co stock at $19.50/share, less $10 commission.
Assume Big uses FIFO to account for their investment in these shares. Required: Prepare entries to record the preceding transactions, and answer the following questions.
Questions: 1. What is the total cost recorded as the "investment" on 1/1/21?
2. How much of an unrealized gain or loss is reported on the 2021 statement of comprehensive income ("xx,xxx gain" or "xx,xx loss")?
3. How much is received as dividends on 11/1/22?
4. What is the balance in the "investment in Little" account at 12/31/22?
5. What is our TOTAL unrealized gain or loss at 12/31/22? ("xx,xxx gain" or "xx,xxx loss")
6. How much of an unrealized gain or loss is reported on the 2022 statement of comprehensive income ("xx,xxx gain" or "xx,xxx loss")?
7. What was the gain or loss on sale of the shares on 3/1/23 ("xx,xxx gain" or "xx,xxx loss")?
In: Accounting