Raleigh Department Store uses the conventional retail method for the year ended December 31, 2019. Available information follows:
| Cost | Retail | |||||
| Gross purchases | $ | 282,000 | $ | 490,000 | ||
| Purchase returns | 6,500 | 10,000 | ||||
| Purchase discounts | 5,000 | |||||
| Sales | 492,000 | |||||
| Sales returns | 5,000 | |||||
| Employee discounts | 3,000 | |||||
| Freight-in | 26,500 | |||||
| Net markups | 25,000 | |||||
| Net markdowns | 10,000 | |||||
Sales to employees are recorded net of discounts.
Required:
3. Assume Raleigh Department Store adopts the dollar-value
LIFO retail method on January 1, 2020. Estimate ending inventory
for 2020 and 2021.
In: Accounting
On January 1, 2020, Peppard Inc. acquired all of the stock of Smith Telecom for $85,000 in cash. At the date of acquisition, Smith's shareholders' equity accounts were as follows:
Common Stock, $1 par: $1,000
APIC: $14,000
Retained Earnings: ($3,000)
Treasury Stock: ($200)
Total: $11,800
Both companies have a December 31 year end. At the date of acquisition, Smith reported net assets had book values approximating fair value. However, it had previously unreported indefinite life identifiable intangibles valued at $15,000, meeting ASC Topic 805 requirements for capitalization. Impairment losses in 2020 for identifiable intangibles were $600. Goodwill from this acquisition was not impaired in 2020. Smith reported net income of $900 in 2020, and paid no dividends. Peppard uses the complete equity method to report its investment in Smith on its own books.
Additional information:
The amount of Goodwill that resulted from this acquisition is $58,200.
The equity in net income reported on Peppard's books in 2020 is $300.
Required:
Prepare eliminating entries (C), (E), (R), and (O), required to consolidate Peppard's trial balance accounts with those of Smith on December 21, 2020.
In: Accounting
At 1 July 2019, the balance in the Retained Earnings account of
Melbourne Ltd was $3 500 000. The company’s share capital at the 1
July 2019 comprises 400 000 6% preference shares issued for $2.00
per share and 1 400 000 ordinary shares fully paid at $1 per
share.
During the year ended 30 June 2020, the following events
occurred:
1. On 1 February 2020, the directors declared and paid an interim
ordinary dividend of $124 000 from retained earnings.
2. On 14 March 2020, the directors issued 20 000 ordinary bonus
shares fully paid at $1.40 per share from retained earnings.
3. Profit for the year was $3 300 000.
4. On 30 June 2020, the directors declared a final ordinary
dividend of $480 000. A dividend was also declared on the
preference shares.
5. On 30 June 2020, the directors resolved to transfer $1 200 000
to a general reserve from retained earnings, and to transfer $2 000
000 from a previously created plant maintenance reserve back to
retained earnings.
Required:
Prepare the journal entries for Twister Ltd for the years ending 30 June 2019 and 2020.
In: Accounting
On December 31, 2019, Novak Inc. borrowed $4,440,000 at 13% payable annually to finance the construction of a new building. In 2020, the company made the following expenditures related to this building: March 1, $532,800; June 1, $888,000; July 1, $2,220,000; December 1, $2,220,000. The building was completed in February 2021. Additional information is provided as follows.
| 1. | Other debt outstanding | |||
| 10-year, 14% bond, December 31, 2013, interest payable annually | $5,920,000 | |||
| 6-year, 11% note, dated December 31, 2017, interest payable annually | $2,368,000 | |||
| 2. | March 1, 2020, expenditure included land costs of $222,000 | |||
| 3. | Interest revenue earned in 2020 | $72,520 |
Determine the amount of interest to be capitalized in 2020 in relation to the construction of the building.
| The amount of interest |
$ |
List of Accounts
Prepare the journal entry to record the capitalization of interest and the recognition of interest expense, if any, at December 31, 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
|
Date |
Account Titles and Explanation |
Debit |
Credit |
| December 31, 2020 | |||
In: Accounting
Raleigh Department Store uses the conventional retail method for the year ended December 31, 2019. Available information follows:
| Cost | Retail | |||||
| Gross purchases | $ | 154,950 | $ | 390,000 | ||
| Purchase returns | 5,500 | 30,000 | ||||
| Purchase discounts | 4,000 | |||||
| Gross sales | 341,000 | |||||
| Sales returns | 5,000 | |||||
| Employee discounts | 4,000 | |||||
| Freight-in | 30,500 | |||||
| Net markups | 15,000 | |||||
| Net markdowns | 30,000 | |||||
Sales to employees are recorded net of discounts.
Question: Assume Raleigh Department Store adopts the dollar-value LIFO retail method on January 1, 2020. Estimating ending inventory for 2020 and 2021.
In: Accounting
On January 1, 2020, Shamrock Company makes the two following acquisitions.
| 1. | Purchases land having a fair value of $330,000 by issuing a 4-year, zero-interest-bearing promissory note in the face amount of $483,153. | |
| 2. | Purchases equipment by issuing a 6%, 9-year promissory note having a maturity value of $380,000 (interest payable annually). |
The company has to pay 10% interest for funds from its bank.
| (a) | Record the two journal entries that should be recorded by Shamrock Company for the two purchases on January 1, 2020. | |
| (b) | Record the interest at the end of the first year on both notes using the effective-interest method. |
(Round present value factor calculations to 5 decimal
places, e.g. 1.25124 and the final answer to 0 decimal places e.g.
58,971. If no entry is required, select "No Entry" for the account
titles and enter 0 for the amounts. Credit account titles are
automatically indented when amount is entered. Do not indent
manually.)
|
No. |
Date |
Account Titles and Explanation |
Debit |
Credit |
|---|---|---|---|---|
| (a) 1. |
January 1, 2020 |
|||
| 2. |
January 1, 2020 |
|||
| (b) 1. |
December 31, 2020 |
|||
| 2. |
December 31, 2020 |
|||
In: Accounting
Cullumber Company sponsors a defined benefit pension plan for its 600 employees. The company’s actuary provided the following information about the plan.
|
January 1, |
December 31, |
||||||
|
2020 |
2020 |
2021 |
|||||
| Projected benefit obligation | $2,780,000 | $3,622,200 | $4,163,976 | ||||
| Accumulated benefit obligation | 1,900,000 | 2,441,000 | 2,904,000 | ||||
| Plan assets (fair value and market-related asset value) | 1,700,000 | 2,896,000 | 3,753,000 | ||||
| Accumulated net (gain) or loss (for purposes of the corridor calculation) | 0 | 196,000 | (24,000 | ) | |||
| Discount rate (current settlement rate) | 9 | % | 8 | % | |||
| Actual and expected asset return rate | 10 | % | 10 | % | |||
| Contributions | 1,026,000 | 567,400 | |||||
The average remaining service life per employee is 10.5 years. The
service cost component of net periodic pension expense for employee
services rendered amounted to $396,000 in 2020 and $472,000 in
2021. The accumulated OCI (PSC) on January 1, 2020, was $1,312,500.
No benefits have been paid.
(a)
Compute the amount of accumulated OCI (PSC) to be amortized as a component of net periodic pension expense for each of the years 2020 and 2021.
| Amount of accumulated OCI (PSC) to be amortized for the year 2020 |
$ |
|
| Amount of accumulated OCI (PSC) to be amortized for the year 2021 |
$ |
In: Accounting
The following trial balance was extracted from the books of Big Bamboo Limited on December 31, 2020
| Big Bamboo Ltd | ||
|
Trial Balance as at January 1, 2020 |
||
|
Motor vehicle at cost |
10,600 |
|
|
Provision for depreciation on Motor Vehicle |
2,120 |
|
|
Building at cost |
90,000 |
|
|
Provision for depreciation on Buildings |
1,800 |
|
|
Stock at January 1, 2020 |
53,000 |
|
|
Carriage inwards |
500 |
|
|
Debtors |
50,130 |
|
|
Returns Inwards |
6,000 |
|
|
Returns Outwards |
5,560 |
|
|
Bad debt provision |
1,100 |
|
|
Cash |
3,200 |
|
|
Creditors |
30,350 |
|
|
Bank overdraft |
15,500 |
|
|
Sales |
600,000 |
|
|
Purchases |
440,000 |
|
|
Wages |
93,200 |
|
|
Insurance |
54,100 |
|
|
Discount received |
8,300 |
|
|
Drawings |
14,000 |
|
|
Capital |
150,000 |
|
|
814,730 |
814,730 |
|
Additional Information:
1. Stock at December 31, 2020 $80,000
2. Payment of $10,100 for insurance relates to the first quarter of 2021.
3. Wages owing $4,800
4. Provision for bad debt is to be increased to $1,500
5. Depreciation on fixed assets:
- Motor vehicles 10% on cost
- Buildings 15 % on the reducing balance method
Required:
Prepare for Big Bamboo Limited:
(a) An income statement for the year ended December 31, 2020
(b) A statement of financial position as at December 31, 2020
In: Accounting
|
|
In: Accounting
The following trial balance was extracted from the books of Big Bamboo Limited on December 31, 2020
| Big Bamboo Ltd | ||
|
Trial Balance as at January 1, 2020 |
||
|
Motor vehicle at cost |
10,600 |
|
|
Provision for depreciation on Motor Vehicle |
2,120 |
|
|
Building at cost |
90,000 |
|
|
Provision for depreciation on Buildings |
1,800 |
|
|
Stock at January 1, 2020 |
53,000 |
|
|
Carriage inwards |
500 |
|
|
Debtors |
50,130 |
|
|
Returns Inwards |
6,000 |
|
|
Returns Outwards |
5,560 |
|
|
Bad debt provision |
1,100 |
|
|
Cash |
3,200 |
|
|
Creditors |
30,350 |
|
|
Bank overdraft |
15,500 |
|
|
Sales |
600,000 |
|
|
Purchases |
440,000 |
|
|
Wages |
93,200 |
|
|
Insurance |
54,100 |
|
|
Discount received |
8,300 |
|
|
Drawings |
14,000 |
|
|
Capital |
150,000 |
|
|
814,730 |
814,730 |
|
Additional Information:
1. Stock at December 31, 2020 $80,000
2. Payment of $10,100 for insurance relates to the first quarter of 2021.
3. Wages owing $4,800
4. Provision for bad debt is to be increased to $1,500
5. Depreciation on fixed assets:
- Motor vehicles 10% on cost
- Buildings 15 % on the reducing balance method
Required:
Prepare for Big Bamboo Limited:
(a) An income statement for the year ended December 31, 2020
(b) A statement of financial position as at December 31, 2020
In: Accounting