What are some of the actions taken by Ken Lay as the CEO of Enron and what were the ethical issues?
In: Economics
In Nike’s sweatshop case what’s the first thing a CEO of nike should do as a business leader?
In: Operations Management
Exercise 21-11
The following facts pertain to a non-cancelable lease agreement
between Teal Mountain Leasing Company and Sandhill Company, a
lessee.
The collectibility of the lease payments by Teal Mountain is probable. Click here to view factor tables. |
Compute the amount of the lease receivable at commencement of
the lease. (For calculation purposes, use 5 decimal
places as displayed in the factor table provided and round answer
to 2 decimal places, e.g. 5,275.15.)
|
Prepare a lease amortization schedule for Teal Mountain for the
5-year lease term. (Round answers to 2 decimal places,
e.g. 5,275.15.)
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Prepare the journal entries to reflect the signing of the lease
agreement and to record the receipts and income related to this
lease for the years 2020 and 2021. The lessor’s accounting period
ends on December 31. Reversing entries are not used by Teal
Mountain. (Credit account titles are automatically
indented when amount is entered. Do not indent
manually. Round answers to 2 decimal
places, e.g. 5,275.15. Record journal entries in the order
presented in the problem.)
|
Suppose the collectibility of the lease payments was not
probable for Teal Mountain. Prepare all necessary journal entries
for the company in 2020. (Credit account titles are
automatically indented when amount is entered. Do not indent
manually. Round answers to 2 decimal
places, e.g. 5,275.15.)
|
In: Accounting
In line with South Bank’s current thrust to expand retail through its branches, Alex Roces, manager of the Marikina Branch, reviewed its list of depositors. Since Roces planned to offer South Bank’s loan services to its depositors, he inquired among the branch’s employees on potential loan clients. He was informed that Fe Javier, the owner of Darling Dolls Company (DCC), had plans to borrow money for use in her business.
Early in January 1995, Roces set up a meeting with Javier. During their meeting, Javier informed Roces that DDC was in need of P1 million for additional working capital during the year.
DDC had no formal accounting records. Javier confidentially informed Roces that its financial statements were only prepared when she had to report her income for tax puposes. In view of this, Roces wanted a new set of DDC’s financial statements prepared for his evaluation.
Company’s Background
Darling Dolls Company was a small manufacturer of stuffed dolls operating from 200-sq.m. leased building in Parang, Marikina. Fe Javier established the business in early 1992 with an initial capital of P2 million from her savings (P1 million) and from personal borrowings from relatives and friends (P1 million). Of the initial investment, about P500,000 was used for improvement of building. Sandee, one of her daughters and a Stuyvesant School of Fine Arts graduate, helped in the management of business and designed the dolls.
Javier started the business with only major customer, Martie Designs. After a year, she was able to ink contracts with four additional customers. DDC dolls were unique and appealing not only to children and teenagers but also to working ladies and young mothers.
DDC had 25 employees, two of whom handled administrative work. Its production process was simple, and its equipment were mainly high-speed sewing machines. In December 1994, Javier invested in 10 new high-speed sewing machines at a total cost of P270,000.
Dolls made by DDC soon became popular. During the fourth quarter of 1994, Javier was able to establish contact with three additional store chains based in Visayas and Mindanao. She believed that a lasting business relationship could be established with these prospective clients. She estimated that production would increase by 80 percent from the current annual level of 27,000 dolls. But as a result of the recent acquisition of 10 sewing machines, Javier did not have sufficient funds to cover the increase in working capital. Moreover, she anticipated that the prices of raw materials and factory supplies would also increase due to the expected implementation of new tax measures.
Up until this time, DDC had no bank loans of any other credit accommodation, except for suppliers’ credit.
Roces assigned a member of his staff to interview Javier, and visit her factory. Based on the results of the interview, Roces’ staff prepared a brief description of the company and summarized the financial data. (see Exhibit 1).
Exhibit 1
Darling Dolls Company
Interview Questions and Answers
|
Questions |
Answers |
||||||||||||||||||||||||
|
1. How much was the 1994 sales? |
P 4.32 million; 21, 600 dolls at P200/doll |
||||||||||||||||||||||||
|
2. Who were the major customers? How much in sales were registered per customer? |
5 major customers, namely: Customer % Sales Martie Designs 50 Sophie’s Gifts and Tags 10 Whims 15 Cuddles and Toys 15 Aspen Boutique 10 Total 100% |
||||||||||||||||||||||||
|
3. Was the company a depositor of other banks besides South Bank? |
No, maintains deposit with South Bank only. |
||||||||||||||||||||||||
|
4. What was its cash balance as of December 31, 1994? |
P 75,000 |
||||||||||||||||||||||||
|
5. How much was the amount collectible from customer? |
|
||||||||||||||||||||||||
|
6. How much in raw materials and factory supplies were on hand as of December 31, 1994 |
P 320,000 raw materials P 58,000 factory supplies |
||||||||||||||||||||||||
|
7. Were there any unfinished dolls as of December 31, 1994? How many were they and what is their average stage of completion? |
Yes, 3,600 dolls are still in process of which 2000 are 90 percent complete and 1,600 are 50 percent complete. |
||||||||||||||||||||||||
|
8. How many completed dolls remained unsold as of December 31, 1994 |
1,800 dolls |
||||||||||||||||||||||||
|
9. How much is the average production cost per doll? |
Production cost per doll: P140 |
||||||||||||||||||||||||
|
10. How much is the current balance of payable to suppliers? |
About P500,000 |
||||||||||||||||||||||||
|
11. What are Javier’s personal assets? Which of these assets are used by Darling Dolls Company? |
|
||||||||||||||||||||||||
|
12. When did Javier buy the assets used in the business? |
Early 1992, it is estimated that fixed assets would be operational for 10 years from their acquisition dates. |
||||||||||||||||||||||||
|
13. How long is the lease agreement? |
10 years |
||||||||||||||||||||||||
|
14. What major operating expenses were incurred for the year? |
|
||||||||||||||||||||||||
|
15. What other liablilities does Darling Dolls Company have besiudes the amount of payable to suppliers? |
Overtime pay of 10 workers for P26,000. All other operating expenses incurred have been paid as of December 31, 1994. |
||||||||||||||||||||||||
Guide Questions:
C. If you were Roces, would you favorably consider the P1 million loan requested by Darling Dolls Company? What assets can be used as collateral?
In: Accounting
In: Finance
On January 1, 2020, Ayayai Co. borrowed and received $465,000
from a major customer evidenced by a zero-interest-bearing note due
in 5 years. As consideration for the zero-interest-bearing feature,
Ayayai agrees to supply the customer’s inventory needs for the loan
period at lower than the market price. The appropriate rate at
which to impute interest is 10%.
| (a) | Prepare the journal entry to record the initial transaction on January 1, 2020. | |
| (b) | Prepare the journal entry to record any adjusting entries needed at December 31, 2020. Assume that the sales of Ayayai’s product to this customer occur evenly over the 5-year period. |
(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) | Jan. 1, 2020Dec. 31, 2020 | |||
| (b) | Jan. 1, 2020Dec. 31, 2020 | |||
(To record Interest Expense) | ||||
Jan. 1, 2020Dec. 31, 2020 | ||||
(To record Unearned Sales Revenue) |
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
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
What is the best way to measure the incident of hospital acquired infections? If the goal is to reduce the incidence of hospital acquired infection? What is a reliable tool that can be used to measure this quality indicator?
In: Statistics and Probability
Flint Corp. sponsors a defined benefit pension plan for its
employees. On January 1, 2020, the following balances relate to
this plan.
| Plan assets | $470,900 | ||
| Projected benefit obligation | 609,900 | ||
| Pension asset/liability | 139,000 | ||
| Accumulated OCI (PSC) | 99,800 | Dr. |
As a result of the operation of the plan during 2020, the following
additional data are provided by the actuary.
| Service cost | $93,800 | |
| Settlement rate, 10% | ||
| Actual return on plan assets | 54,500 | |
| Amortization of prior service cost | 19,800 | |
| Expected return on plan assets | 51,300 | |
| Unexpected loss from change in projected benefit
obligation, due to change in actuarial predictions |
74,300 | |
| Contributions | 99,100 | |
| Benefits paid retirees |
85,600 |
Using the data above, compute pension expense for Flint Corp. for the year 2020 by preparing a pension worksheet.
Prepare the journal entry for pension expense for 2020.
In: Accounting