Miller Corp. has reported pre-tax income of $250,000 for calendar 2020, before considering the five items below. Prepare the adjusting entries needed at December 31, 2020 in order to correctly state the 2020 pre-tax income. If no entry is needed, write NONE.
1. Interest on a $42,000, 7%, six-year note payable was last paid on September 1, 2020.
2. On May 31, 2020, Melody entered into a contract to provide services to a customer for eighteen months beginning June 1. The customer paid the $18,000 fee in full on June 1 and Maison credited it to Service Revenue.
3. On August 1, 2020, Maison paid a year’s rent in advance on a warehouse, and debited the $48,000 payment to Prepaid Rent.
4. Depreciation on office equipment for 2020 is $17,000.
5. On December 18, 2020, Maison paid the local newspaper $1,000 for an advertisement to be run in January of 2021, debiting it to Prepaid Advertising.
In: Accounting
In: Economics
Chapter 16- prob. 7
Zekany Corporation would have had identical income before taxes on both its income tax returns and income statements for the years 2018 through 2021 except for differences in depreciation on an operational asset. The asset cost $290,000 and is depreciated for income tax purposes in the following amounts:
2018 $ 95,700
2019 127,600
2020 43,500
2021 23,200
The operational asset has a four-year life and no residual value. The straight-line method is used for financial reporting purposes.
Income amounts before depreciation expense and income taxes for each of the four years were as follows:
2018 2019 2020 2021
Accounting income before taxes and depreciation $155,000 $175,000 $165,000 $165,000
Assume the average and marginal income tax rate for 2018 and 2019 was 30%; however, during 2019 tax legislation was passed to raise the tax rate to 40% beginning in 2020. The 40% rate remained in effect through the years 2020 and 2021. Both the accounting and income tax periods end December 31.
Required: Prepare the journal entries to record income taxes for the years 2018 through 2021. (If no entry is required for a transaction/event, write “No journal entry required” in the first account field.)
|
Date |
General Journal |
Date |
Credit |
In: Accounting
The following information relates to SFS Co . for the year 2020. SFS, Capital, January 1, 2020……. $ 48,000
Advertising expense.. $ 1,800
SFS, Drawings, during 2020………… 7,000
Rent expense ………12,000
Service revenue …………………………………67,000 ………
Utilities expense……. 3,100
Salaries expense…………………………………. 30,000
Instructions After analyzing the data, prepare an income
statement and an owner’s equity statement for the year ending
December 31, 2020.
In: Accounting
Dale plc is a UK company which has the Pound Sterling as its functional currency. The company has the following transactions in Euros during the year to 31 December 2010 – the financial years is from 1 January-31 December
1 October 2010- Inventory costing 50,000 Euros purchased on credit from Y
1 November 2010- Equipment costing 200,000 Euros purchased on credit from X and signed a note payable
30 November 2010-Paid Y 30,000 Euros on account for the inventory bought on 1 October
15 December 2010- Paid X 150,000 Euros for the equipment purchased on 1 November.
Exchange rates may be assumed as follows:
1 October 2010- 1 Pound= 3.0 Euro
1 November 2010- 1 Pound = 2.80 Euro
30 November 2010- 1 Pound= 2.50 Euro
15 December 2010- 1 Pound= 2.40 Euro
31 December 2010- 1 Pound = 2.20 Euro
Required:
Based on the entries above also, find
In: Accounting
the accountant's Company
Income Statement
For the Year Ended December 31, 2018
Sales $8,500,000
Manufacturing Expenses
Variable $3,250,000
Fixed overhead 640,000 3,890,000
Gross Margin $4,610,000
Selling and administrative expenses
Commissions $580,000
Fixed marketing expenses 300,000
Fixed admin expenses 450,000 1,330,000
Net Operating Income $3,280,000
Fixed Interest expenses 230,000
Income before Taxes $3,050,000
Income Taxes (21%) 640,500
Net Income $2,409,500
1.Restate the income statement in a contribution margin format.
2.Compute the break-even point in sales dollars given the current structure.
3.Compute the operating leverage at the 2018 level of sales.
4.Compute the margin of safety in both dollars and percentage for the 2018 level of sales.
Your company is considering out-sourcing the sales and marketing to an agency specializing in these types of sales. The outsourcing would remove the commissions, reduce the marketing by $270,000, and reduce the fixed administrative expenses by $35,000. The out-sourcing firm, Jangler Marketing, will charge a fee of 14% of sales. Jangler requires a 3-year contract. Jangler believes that it can increase sales by 10% for 2019 and 13% each year after (2020 and 2021). The company believes that with its current sales and marketing staff, sales will increase by 8% for 2019 and 9% in each year after (2020 and 2021).
1.Prepare contribution format projected income statements for 2019, 2020 & 202a assuming the company hires Jangler Marketing.
2.Prepare contribution format projected income statements assuming the outsourcing is rejected.
In: Accounting
CHO Company was formed on December 1, 2009. The following information is available from Jones's inventory record for Product X.
Units Unit Cost
January 1, 2010 (beginning inventory) 1,600 $18.00
Purchases:
January 5, 2010 2,600 $20.00
January 25, 2010 2,400 $21.00
February 16, 2010 1,000 $22.00
March 15, 2010 1,800 $23.00
A physical inventory on March 31, 2010, shows 2,500 units on hand.
Prepare schedules to compute the ending inventory at March 31, 2010, using Weighted-average
In: Accounting
CHO Company was formed on December 1, 2009. The following information is available from Jones's inventory record for Product X.
Units Unit Cost
January 1, 2010 (beginning inventory) 1,600 $18.00
Purchases:
January 5, 2010 2,600 $20.00
January 25, 2010 2,400 $21.00
February 16, 2010 1,000 $22.00
March 15, 2010 1,800 $23.00
A physical inventory on March 31, 2010, shows 2,500 units on hand.
Prepare schedules to compute the ending inventory at March 31, 2010, using Weighted-average.
In: Accounting
In: Economics
What evidence indicates that colonists continued to think of themselves as British subjects throughout this era? What evidence suggests that colonists were beginning to forge a separate, collective “American” identity? How would you explain this shift?
In: Psychology