in 2021, the Westgate Construction Company entered into a contract to construct a road for Santa Clara County for $10,000,000. The road was completed in 2020. Information related to the contract is as follows: 2018 2019 2020 Cost incurred during the year $ 2,044,000 $ 2,628,000 $ 2,890,800 Estimated costs to complete as of year-end 5,256,000 2,628,000 0 Billings during the year 2,170,000 2,502,000 5,328,000 Cash collections during the year 1,885,000 2,600,000 5,515,000 Westgate recognizes revenue over time according to percentage of completion.

2a. In the Journal below, complete the necessary journal entries for the year 2021( Credit "various accounts for construction costs

2b In the Journal below, complete the necessary journal entries for the year 2022 ( Credit "various accounts for construction costs

2c In the Journal below, complete the necessary journal entries for the year 2023 ( Credit "various accounts for construction costs

On January 1, 2020, Digital, Inc. leased heavy machinery from Young Leasing
Company. The terms of the lease require annual payments of $25,000 for 20
years beginning on December 31, 2020. The interest rate on the lease is 10%.
Assume the lease qualifies as a capital lease and Digital, Inc. employs the
double-declining balance method to depreciate its assets. 

Use the time value of money factors posted in carmen to answer this question. No credit will be
awarded for this question using a means other than these table factors to answer this question.

1) Calculate the book value of the leased asset at December 31, 2022.

2) Calculate the balance in the lease liability account on December 31, 2021 after the second lease payment is made.

3) Calculate the amount of the lease liability at December 31, 2021 that would be classified as a current liability.

Rich Networks Inc. is being sued by a competitor for infringing on one of its competitor's patents. The company’s fiscal year end date is December 31. The suit for $95,000 was filed in court on January 30, 2020 before the company expects to submit its 2019 annual report to its regulatory body on February 25, 2020. The company’s legal counsel estimates that the likelihood of damages being awarded to the competitor is 80%. How much contingent liabilities, if any, should be reported on the balance sheet in the company’s 2019 annual report? If you think that the amount is zero, put 0. Otherwise, if you think that the amount is above zero, put that number in your answer.

I would think that the amount of contingent liabilities that could be report would be $95,000 since the likelihood of damages being awarded to the competitor is 80% and that the amount of  $95,000 was given to us, am I right?

Update the balance sheet above to reflect the transactions below, which occur on January 6, 2020

1. Sell product for $40,000 with historical cost of $32,000

What is the final amount in Retained Earnings?

Note: Transaction amounts are provided in dollars but the balance sheet units are thousands of dollars.

Please specify your answer in the same units as the balance sheet (i.e., enter the number from your updated balance sheet).

Update the balance sheet above to reflect the transactions below, which occur on January 6, 2020

1. Borrow $52,000 from a bank
2. Purchase equipment for $48,000 in cash

What is the final amount in Cash?

Note: Transaction amounts are provided in dollars but the balance sheet units are thousands of dollars.

Please specify your answer in the same units as the balance sheet (i.e., enter the number from your updated balance sheet).

Exercise 10-6 Straight-Line: Recording bond issuance and discount amortization LO P2

Dobbs Company issues 5%, two-year bonds, on December 31, 2019, with a par value of $105,000 and semiannual interest payments.

Use the above straight-line bond amortization table and prepare journal entries for the following.

Required:
(a) The issuance of bonds on December 31, 2019.
(b) The first through fourth interest payments on each June 30 and December 31.
(c) Record the maturity of the bonds on December 31, 2021.

EXERCISE 5-2 End of the Year of Acquisition Workpaper Entries LO 1 LO 9

On January 1, 2020, Payne Corporation purchased a 75% interest in Salmon Company for $585,000. A summary of Salmon Company’s balance sheet on that date revealed the following: Book Value Fair Value Equipment $525,000 $705,000 Other assets  150,000    150,000 $675,000   $855,000 Liabilities $ 75,000 $ 75,000 Common stock 225,000 Retained earnings  375,000   $675,000   The equipment had an original life of 15 years and has a remaining useful life of 10 years. Required: For the December 31, 2020, consolidated financial statements workpaper, prepare the workpaper entry to allocate and depreciate the difference between book value and the value implied by the purchase price assuming: Equipment is presented net of accumulated depreciation. Accumulated depreciation is presented on a separate row in the workpaper and in the consolidated statement of financial position.

On January 1, 2016, Asquith Company adopts a performance-based stock option plan with a four-year vesting and service period, a $35 exercise price, and a $6 per option fair value. The plan grants a maximum of 2,000 shares of $5 par common stock to each of the company's 30 executives. The number of shares that vest depends on the increase in sales during the service period, based on the following scale:

Asquith estimates that sales will increase by 12% during the service period. The estimate is achieved and all options are exercised on January 1, 2020.

Required:

Assuming Asquith uses the fair value method to account for its stock option plan, prepare all of the journal entries over the life of Asquith's stock option plan (2016 through 2020).

5. You have married into a family business and you are in charge of the finances. Your father-in-law is considering an IPO and has asked you to come up with estimates for the equity value. Here are the figures you have been able to come up with so far:
   1. 2021 free cash flow: $9.0MM
   2. 2022 free cash flow: $9.8MM
   3. 2023 free cash flow: $10.5MM
   4. Annual FCF growth after 2022: grows at 2%
   5. 2020 EBITDA: $9.5MM
   6. 2020 Net Income: $6.0MM
   7. Company WACC (discount rate): 12%
   8. Total debt: $6MM
   9. Overall PE ratio for similar companies: 20x
   10. EV / EBITDA multiple that similar companies have sold for: 10x

Develop a free cash flow discounted valuation PLUS any other two valuation methods to estimate the total value of Equity.