Aubrae and Tylor Williamson began operations of their furniture repair shop (Furniture Refinishers, Inc.) on January 1, 2019. The annual reporting period ends December 31. The trial balance on January 1, 2020, was as follows:

Transactions during 2020 follow:

1. Borrowed $40,000 cash on July 1, 2020, signing a one-year, 10 percent note payable.
2. Purchased equipment for $19,000 cash on July 1, 2020.
3. Sold 10,000 additional shares of capital stock for cash at $.50 market value per share at the beginning of the year.
4. Earned $148,000 in revenues for 2020, including $62,000 on credit and the rest in cash.
5. Incurred $40,000 in wages expense and $12,000 in miscellaneous expenses for 2020, with $10,000 on credit and the rest paid with cash. Note: Wages are paid in cash.
6. Purchased additional small tools, $5,000 cash.
7. Collected accounts receivable, $12,000.
8. Paid accounts payable, $15,000.
9. Purchased $24,000 of supplies on account.
10. Received a $3,000 deposit on work to start January 15, 2021.
11. Declared a cash dividend on December 1, $15,000; paid on December 31.

Data for adjusting entries:

12. Supplies of $8,000 and small tools of $7,000 were counted on December 31, 2020 (debit Miscellaneous Expenses).
13. Depreciation for 2020, $3,000.
14. Interest accrued on notes payable (to be computed).
15. Wages earned since the December 24 payroll but not yet paid, $6,000.
16. Income tax expense was $6,000, payable in 2021. Post the journal entries for transactions 1 through 11 and adjusting entries for transactions 12 through 16 to the respective T-Accounts.

Create a Schedule of Cash Collections in Excel using formulas only

Headquartered in Toronto, Indigo Books & Music Inc. (TSX: IDG) is Canada’s largest book retailer and the third largest in North America. The following information was taken from the management discussion and analysis section of the company’s March 31, 2020, annual report (in thousands):

Additional information from the company’s annual report:

1. Inventories are valued at the lower of cost, determined using a moving average cost formula, and market, being net realizable value. Under this method, inventory is recorded at the level of the individual article (stock-keeping unit or SKU).

2. Costs include all direct and reasonable expenditures that are incurred in bringing inventories to their present location and condition. Vendor rebates are recorded as a reduction in the price of the products and corresponding inventory is recorded net of vendor rebates.

3. The average cost of an article is continually updated based on the cost of each purchase recorded in inventory. When the company permanently reduces the retail price of an item, there is a corresponding reduction in inventory recognized in the period if the markdown incurred brings the retail price below the cost of the item.

4. The amount of inventory write-downs as a result of net realizable value lower than cost was $10.3 million in 2020 ($7.3 million in fiscal 2019), and there were no reversals of inventory write-downs that were recognized in 2020 or in prior

periods. The amount of inventory at March 31, 2020 with net realizable value equal to cost was $1.7 million ($2.3 million at March 31, 2019).

(a) Calculate the company’s inventory turnover and days sales in inventory ratios for 2020 and 2019. Comment on whether Indigo’s management of its inventory improved or weakened in fiscal 2020.  

(b) Does Indigo follow the lower of cost or net realizable value rule? Did the application of this rule have any effect on 2020 results? Explain

(c) Indigo uses the average cost formula to account for its inventories. A major competitor, Amazon Inc., uses the FIFO cost formula to account for its inventories. What difficulties would this create in comparing Indigo’s financial results with those of Amazon? Explain.  

Sheridan Inc. earns $470000 and pays cash dividends of $100000 during 2020. Carla Vista Corporation owns 62700 of the 209000 outstanding shares of Sheridan Inc. How much revenue from investment should Carla Vista report in 2020?

Sunland Inc. earns $550000 and pays cash dividends of $145000 during 2020. Wildhorse Corporation owns 73850 of the 211000 outstanding shares of Sunland. What amount should Wildhorse show in the investment account at December 31, 2020 if the beginning of the year balance in the account was $40000?

On January 2, Matthews Corporation acquired 20% of the outstanding common stock of Dennehy Company for $450,000. For the year ended December 31, Dennehy reported net income of $90,000 and paid cash dividends of $30,000 on its common stock. On December 31, the carrying value of Matthews’ investment in Dennehy under the equity method is

At December 31, 2020, the trading securities for Eddy Company are as follows:

Security       Cost       Fair Value
A       $16,000       $20,000
B       34,000       32,000
$50,000       $52,000

Prepare the adjusting entry at December 31, 2020, to report the securities at fair value. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

CoronadoCorp. has common stock of $4600000, retained earnings of $1600000, unrealized gains on trading securities of $120000 and unrealized losses on available-for-sale securities of $180000. What is the total amount of its stockholders’ equity?

On January 1, 2020, Sheffield Corp. paid $940000 for 117500 shares of Ivanhoe Company’s common stock, which represents 26% of Ivanhoe's outstanding common stock. Ivanhoe reported net income of $224000 and paid cash dividends of $63000 during 2020. Sheffield should report the investment in Ivanhoe Company on its December 31, 2020, balance sheet at:

Which of the following is the correct matching concerning the appropriate accounting for long-term stock investments?

% of Investor Ownership      Accounting Guidelines

Coronado Corporation purchased 960 shares of Wildhorse common stock ($50 par) at $82 per share as a short-term investment. The shares were subsequently sold at $78 per share. The cost of the securities purchased and gain or loss on the sale were

Cost        Gain or Loss

Analyzing Accounts and Notes Receivable; Computing Interest, Estimating Value, and Recording Bad Debts

Analyze each of the four separate scenarios and answer the requirements.

Note: Round each of your answers to the nearest whole dollar.

1. On December 31, 2020, Helena Company, a California real estate firm, received two $28,000 notes from customers in exchange for services rendered. The 8% note from El Dorado Company is due in nine months, and the 3% note from Newcastle Company is due in five years. The market interest rate for similar notes on December 31, 2020, was 8%. At what amounts should the two notes be reported in Helena’s December 31, 2020, balance sheet?

2. EPPA, an environmental management firm, issued to Dara, a $14,000, 8%, five-year installment note that required five equal annual year-end payments. This note was discounted to yield a 9% rate to Dara. What is the total amount of interest revenue to be recognized by Dara on this note?

3. On July 1, 2020, Lezix Company, a maker of denim clothing, sold goods in exchange for a $140,000, one-year, noninterest-bearing note. At the time of the sale, the market rate of interest was 12% on similar notes. At what amount should Lezix record the note receivable on July 1, 2020?

4. The records of Quest Company included the following accounts (with normal balances).

The company estimates bad debts as 2% of receivables at year-end to be uncollectible.

Prepare the adjusting entry at December 31, 2020, to adjust the allowance for doubtful accounts.

Create a Direct Labor Budget in Excel using Formulas only

1. Mario, the owner of Best Pizzeria, took the first $2,000 he earned from his business and placed it into a Fidelity savings plan. At the end of 5 years, he closed the account and withdrew $2,850. What was the annual rate of interest he earned?  

N =

I =

PV =

PMT =

FV =

P/Y =

In 2015, Yum! Brands, Inc., the world’s largest quick-service restaurant company (Pizza Hut, Kentucky Fried Chicken, and Taco Bell), opened 577 new Pizza Hut restaurants and closed 456 others.

Required

If you were in charge of these decisions, what information would you want to collect?

A cylindrical tube of mean radius 1” and wall thickness 0.1” is subjected to an internal pressure p = 300 psi and a torque T = 2000 lb-in. The ends of the tube are closed. Find the safety factor against yielding if the material yields in uniaxial tension at SY = 8 ksi and Von Mises theory is used.

A mole of air is sampled from the atmosphere when the atmospheric pressure is 765 mmHg, the temperature is 25 C, an relative humidity is 75%. The sample of air is placed inside a closed container and heated to 135 C and then compressed to 2 atm. What are the relative humidity, the humidity, and the mole fraction of water in the compressed air?