At January 1, 2020, the credit balance of Cheyenne Corp.’s Allowance for Doubtful Accounts was $406,500. During 2020, the bad debt expense entry was based on a percentage of net credit sales. Net sales for 2020 were $80 million, of which 89% were on account. Based on the information available at the time, the 2020 bad debt expense was estimated to be 0.80% of net credit sales. During 2020, uncollectible receivables amounting to $500,000 were written off against the allowance for doubtful accounts. The company has estimated that at December 31, 2020, based on a review of the aged accounts receivable, the allowance for doubtful accounts would be properly measured at $525,500.
Prepare a schedule calculating the balance in Cheyenne Corp.’s
Allowance for Doubtful Accounts at December 31, 2020.
|
Balance, January 1, 2020 |
$enter a dollar amount | |
|---|---|---|
|
Bad debt expense accrual |
enter a dollar amount | |
| enter a subtotal of the two previous amounts | ||
|
Uncollectible receivables written off |
enter a dollar amount | |
|
Balance, December 31, 2020 before adjustment |
enter a total amount for the first part | |
|
Allowance adjustment |
enter a dollar amount | |
|
Balance, December 31, 2020 |
$enter a total amount |
Prepare any necessary journal entry at year end to adjust the
allowance for doubtful accounts to the required balance.
(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.)
|
Account Titles and Explanation |
Debit |
Credit |
|---|---|---|
|
enter an account title |
enter a debit amount |
enter a credit amount |
|
enter an account title |
enter a debit amount |
enter a credit amount |
In: Accounting
Farmer Inc. began business on January 1, 2019. Its pretax financial income for the first 2 years was as follows:
2019 $340,000
2020 760,000
The following items caused the only differences between pretax financial income and taxable income.
1. In 2019, the company collected $420,000 of rent; of this amount, $140,000 was earned in 2019; the other $280,000 will be earned equally over the 2020–2021 periods. The full $420,000 was included in taxable income in 2019.
2. The company pays $20,000 a year for life insurance on officers.
3. In 2020, the company terminated a top executive and agreed to $90,000 of severance pay. The amount will be paid $30,000 per year for 2020–2022. The 2020 payment was made. The $90,000 was expensed in 2020 for financial reporting purposes. For tax purposes, the severance pay is deductible as it is paid.
4. The company purchased a large asset in 2019 for $60,000. The depreciation will be computed using a five-year life. For tax purposes, the company will be able to deduct half of the cost in 2019 and in 2020.
The enacted tax rates existing on December 31, 2019, are:
2019 30% 2021 40%
2020 35% 2022 40%
Instructions:
(a) Determine taxable income for2019 and 2020.
(b) Determine the deferred income taxes at the end of 2019, and prepare the journal entry to record income taxes for 2019.
(c) Prepare a schedule of future taxable and (deductible) amounts at the end of2020.
(d) Prepare a schedule of the deferred tax (asset) and liability at the end of2020.
(e) Compute the net deferred tax expense (benefit) for2020.
(f) Prepare the journal entry to record income taxes for 2020.
In: Accounting
Company X has the following information:
Inventory at end-of-year prices of $1,300,000 (2018 – base year), $1,450,000 (2019), and $1,350,000 (2020)
The price index is 105 in 2019 and 107 in 2020
Use the dollar-value LIFO method to calculate ending inventory for 2019 and 2020.
In: Accounting
In: Accounting
On January 1, 2020, the merchandise inventory of Ivanhoe, Inc. was $1700000. During 2020 Ivanhoe purchased $3398000 of merchandise and recorded sales of $4200000. The gross profit rate on these sales was 20%. What is the merchandise inventory of Ivanhoe at December 31,
2020? $1738000. $3360000. $840000. $802000.
In: Accounting
the construction activity for the year-end 31 December 2020, are as follows:
| project | contract price | costs incurred to 31/12/2020 | estimated costs to complete | billing to 31/12/2020 | cash collections to 31/12/2020 |
| AA | $1,500,000 | $400,000 | $1,200,000 | $300,000 | $280,000 |
Required:
1) Prepare a schedule by project, showing clearly the amount of gross profit (loss) of the project before deducting selling, general, and administrative expenses for the year ended 31 December 2020 using the percentage-of-completion method.(based on estimated costs.)
2)Based on the schedule, show the amount of gross profit ( or loss) before selling, general,and administrative expenses for the year ended 31 December 2020, which would be reported if the following method are used:
(I) the cost-recovery method.
(II) The percentage-of-completion method ( based on estimated costs)
3) Determine the construction in process balance that would appear in the statement of financial position of the company as at 31/12/2020 for the project AA, assuming that the precentage-of-completion method is used. show all the working.
In: Accounting
The following information is from Alberta Ltd financial statements for the year ended Dec 31, 2020: - Net income for the year $ 460,000. - 8% Convertible bonds issued at par $1,000,000 ($1000 per bond), each bond convertible into 20 common shares $1,000,000 - 6% non-cumulative preferred shares $100 par value. $1,000,000 - Common shares 120,000 authorized, 60,000 issued and outstanding $ 600,000 - Stock options (call option granted in a prior year) to purchase 30,000 common shares at $10 per common share. - Average market price per common share during 2020 was $12, and the tax rate for 2020 is 35% - Alberta declare and pay $100,000 dividends during 2020 There were no changes during 2020 in the number of common shares, preferred shares, stock options or convertible bonds. Also for simplicity, ignore the requirement to book the convertible bonds’ equity portion separately. Instruction: A) Calculate the basic EPS for 2020 B) Calculate diluted EPS for 2020 (Show your calculation for each transaction/ affect)
In: Accounting
The following information is from Alberta Ltd financial statements for the year ended Dec 31, 2020: - Net income for the year $ 460,000. - 8% Convertible bonds issued at par $1,000,000 ($1000 per bond), each bond convertible into 20 common shares $1,000,000 - 6% non-cumulative preferred shares $100 par value. $1,000,000 - Common shares 120,000 authorized, 60,000 issued and outstanding $ 600,000 - Stock options (call option granted in a prior year) to purchase 30,000 common shares at $10 per common share. - Average market price per common share during 2020 was $12, and the tax rate for 2020 is 35% - Alberta declare and pay $100,000 dividends during 2020 There were no changes during 2020 in the number of common shares, preferred shares, stock options or convertible bonds. Also for simplicity, ignore the requirement to book the convertible bonds’ equity portion separately. Instruction: A) Calculate the basic EPS for 2020 B) Calculate diluted EPS for 2020 (Show your calculation for each transaction/ affect)
In: Accounting
QUESTION 3
A manager at Stalemate, a chess business retailing chess boards and providing chess lessons, requires help with interpreting some of the accounting transactions that took place during the month of September 2020. The manager has provided you with a list of those transactions below.
Required:
Underneath each transaction in the space provided, write a brief narration describing the economic event that corresponds to that transaction.
|
Date |
Account titles (Details) |
Dr ($) |
Cr ($) |
|
2/9/2020 |
Cash |
3,000 |
|
|
Accounts Receivable |
2,500 |
||
|
GST Collected |
500 |
||
|
Service Revenue |
5,000 |
||
|
Answer here: |
|||
|
3/9/2020 |
Wages Payable |
6,500 |
|
|
Cash |
6,500 |
||
|
Answer here: |
|||
|
15/9/2020 |
Chess boards |
10,000 |
|
|
GST Paid |
1,000 |
||
|
Accounts Payable |
5,000 |
||
|
Cash |
5,100 |
||
|
Answer here: |
|||
|
30/9/2020 |
Accounts Payable |
15,000 |
|
|
Bank Loan |
15,000 |
||
|
Answer here: |
|||
|
30/9/2020 |
Rent Expense |
2,000 |
|
|
Prepaid Rent |
2,000 |
||
|
Answer here: |
|||
|
30/9/2020 |
Unearned Revenue |
10,000 |
|
|
Service Revenue |
10,000 |
||
|
Answer here: |
|||
In: Accounting
Demand and supply. Show in a diagram the effect on the demand curve, the supply
curve, the equilibrium price and quantity of each of the following pairs of events.
a. The market for hand-sanitizers in New York at the beginning of April 2020.
i. The number of Covid-19 cases increases exponentially starting from 1st March 2020;
ii. On March 9, 2020 New York State Governor Andrew Cuomo allowed for state
production of hand-sanitizers.
b. The market for touristic services in Spain in Summer 2020.
i. The European Union imposes travel restrictions to free movement of people (for
leisure) due to the healthcare crisis following the Covid-19 pandemic.
ii. New cleaning protocols require higher standard of sanitization in hotels and public
places to prevent the coronavirus from spreading.
c. The market for real estate in Italy in Spring 2020.
i. Due to the severe restrictions imposed by the lockdown starting from 5th March 2020,
a growing number of families searched for homes with a garden;
ii. The lockdown period produced a GDP fall by 12.4% in second quarter 2020
In: Economics