E11.3
(LO 1, 2 ) (Depreciation Computations—SYD, DDB—Partial Periods) Judds Company purchased a new plant asset on April 1, 2020, at a cost of $711,000. It was estimated to have a service life of 20 years and a salvage value of $60,000. Judds' accounting period is the calendar year.
Instructions
a.
Compute the depreciation for this asset for 2020 and 2021 using the sum-of-the-years'-digits method.
b.
Compute the depreciation for this asset for 2020 and 2021 using the double-declining-balance method.
In: Accounting
b. Audio Waves Ltd. has five employees who have been extremely busy during the current fiscal year, which ends on December 31, 2020. Each employee is entitled to 2 weeks' vacation in return for working 50 weeks. Audio Waves has a weekly payroll of $10,000, and as of December 31, 2020, none of the employees has taken vacation leave. How should this liability be reported on the company's statement of financial position on December 31, 2020?
In: Accounting
JJJ Corporation owns a number of shopping centers used to produce rental income. In 2020, the corporation received an advanced rental payment of $20,000 from one of the tenants. The advance payment represented the payment of the rent for the year 2021.
A. If JJJ Corporation used the cash method of accounting, indicate the amount of income, if any, the corporation would need to report in 2020.
B. If JJJ Corporation used the accrual method of accounting, indicate the amount of income, if any, the corporation would need to report in 2020.
In: Accounting
In: Economics
Using the three-step method, compute the dirty price (to 3 decimal places) of a $100 face-value bond maturing on 15-Feb-29, paying a 5%pa semi-annual coupons with a yield to maturity of 3%pa for settlement on 05-May-20. Set out the intermediate calculations for each of the three steps.
(Note there are 102 days between 05-May-20 and 15-Aug-2020. There are 182 days between 15-Feb-2020 and 15-Aug-2020)
In: Finance
Caldor Health accrued $140,000 for a warranty liability related to sales made in 2020. Warranties cover defects for 2 years from the date of sale. Claims in 2020 were $60,000 and in 2021 were $70,000. Warranty expense fro 2020 and 2021 are:
A) $60,000 and $70,000
B)$60,000 and $80,000
C)$140,000 and $0
D)$140,000 expense and $10,000 income
Please give specific reason for every choice that why it is correct and why it is wrong if you can. Thank you so much!!!!!
In: Accounting
Acorn Limited is a listed company based in Vermont. On January 1, 2018, the company granted 1,000 share units to its CFO. Each share unit has a contractual service period of three years and a vesting condition based on the details below.
At the end of 2020, each share unit is convertible into 100 common shares of Acorn Limited if both of the following criteria are met:
2018-2020 Accumulated company net income is greater than $5 million.
2018-2020 Stock price increase is greater than 25%.
On the grant date, the company’s common shares had a fair value of $6 per share and the company was expected to meet both of the criteria above.
During 2018 and 2019, the company was expected to meet both of the criteria above. However, during 2020 the company’s stock price decreased and the company did not meet the stock price increase criteria at the end of the year.
The company’s accountant has asked for your help to check the compensation costs recorded for these share units during 2018-2019 and record the appropriate journal entry at the end of 2020.
End of 2018 -> 100*6*(1/3)=200
End of 2019-> (100*6(2/3))-200=200
Ignore the effects of taxes.
what are the journal entries for 2018,2019,&2020?
In: Accounting
Reporting Earnings per Share Disclosures
Siera Inc. had 350,000 shares of no par common stock outstanding throughout 2020 that declared and paid dividends of $75,000 in 2020. The company also had 45,000 shares of preferred stock that paid dividends of $7,500 in 2020 (declared in 2020). The company reported the following amounts in its income statement for the year ended December 31, 2020 (pretax).
| Income from continuing operations | $1,875,000 |
| Loss from discontinued operations | 52,500 |
Required
a. Prepare the earnings per share section of the income statement for the year ended December 31, 2020, assuming a tax rate of 25%.
| Per Share: | |
| Income from continuing operations | Answer |
| Loss from discontinued component, net of tax savings | Answer |
| Net income | Answer |
Required
b. Repeat requirement of part a except now assume that the company reported income from discontinued operations of $52,500.
| Per Share: | |
| Income from continuing operations | Answer |
| Income from discontinued component, net of tax | Answer |
| Net income | Answer |
In: Accounting
Translation and Remeasurement of Account Balances
U.S. Industries has a subsidiary in Switzerland. The subsidiary’s financial statements are maintained in Swiss francs (CHF). Exchange rates ($/CHF) for selected dates are as follows:
| January 1, 2018 | $1.02 | November 30, 2020 | $1.08 | |
| January 1, 2019 | 1.04 | December 31, 2020 | 1.09 | |
| Average for 2020 | 1.06 |
The following items appear in the subsidiary’s trial balance at December 31, 2020:
1. Cash in bank, CHF4,000,000.
2. Inventory, CHF3,000,000. The inventory was acquired on November 30, 2020.
3. Machinery and equipment, CHF11,000,000. A review of the records indicates that the company bought equipment costing CHF5,000,000 in January 2018 (20 percent of this was sold in January 2020) and additional equipment costing CHF7,000,000 in January 2019. Ignore accumulated depreciation.
4. Depreciation expense on machinery and equipment, CHF1,100,000 (depreciated over ten years, straight-line basis).
Required
Calculate the dollar amount for each of the above items, assuming the functional currency of the Swiss subsidiary is
(a) the U.S. dollar and
(b) the Swiss franc.
Enter answers using all zeros (do not abbreviate to millions or thousands).
| (a) | (b) | ||
|---|---|---|---|
| Cash | $Answer | $Answer | |
| Inventory | $Answer | $Answer | |
| Machinery and equipment | $Answer | $Answer | |
| Depreciation expense | $Answer | $Answer |
In: Accounting
Bonobo’s Balloons Inc. purchased the $60,000 par value bonds of Gnomes R Us on January 1, 2020. The coupon rate is 8% and the bonds mature in 5 years. The market rate of interest is 12%. The bonds pay interest semi-annually every June 30 and December 31. The bonds were purchased for $51,167.90 and were classified as available-for-sale. Bonobo’s Balloons uses the effective-interest rate method to amortize bond discounts and premiums. At December 31, 2020, the market value of the bonds was $65,000. Bonobo’s Balloons sold the bonds on January 1, 2021, for $65,000.
Instructions
1. Compute the carrying value of the investment at December 31, 2020.
2. Compute the amount of interest revenue earned on this investment at June 30, 2020.
3. Compute the amount of unrealized gain or loss recognized on December 31, 2020. In which financial statement should this amount be reported?
4. Compute the amount of gain or loss recognized on the sale of the investment at January 1, 2021. In which financial statement should this amount be reported?
5. If this investment was instead classified as held-to-maturity, how would this have affected the amount of unrealized gain or loss on December 31, 2020, and how would this have affected its reporting?
In: Accounting