Ivanhoe Inc. operates a retail computer store. To improve its delivery services to customers, the company purchased four new trucks on April 1, 2020. The terms of acquisition for each truck were as follows:
| 1. | Truck #1 had a list price of $27,200 and was acquired for a cash payment of $25,500. | |
| 2. | Truck #2 had a list price of $28,800 and was acquired for a down payment of $2,100 cash and a non–interest-bearing note with a face amount of $26,700. The note is due April 1, 2021. Ivanhoe would normally have to pay interest at a rate of 10% for such a borrowing, and the dealership has an incremental borrowing rate of 8%. | |
| 3. | Truck #3 had a list price of $22,900. It was acquired in exchange for a computer system that Ivanhoe carries in inventory. The computer system cost $17,000 and is normally sold by Ivanhoe for $19,100. Ivanhoe uses a perpetual inventory system. | |
| 4. | Truck #4 had a list price of $23,400. It was acquired in exchange for 1,000 common shares of Ivanhoe Inc. The common shares trade in an active market valued at $22 per share in the most recent trade. |
Click here to view the factor table PRESENT VALUE OF 1.
Click here to view the factor table PRESENT VALUE OF AN ANNUITY OF
1.
(a)
Prepare the appropriate journal entries for Ivanhoe Inc. for the
above transactions, assuming that Ivanhoe prepares financial
statements in accordance with IFRS. For Truck #2, calculate the
purchase price using any of the three methods (tables, financial
calculator, or Excel). (Credit account titles are
automatically indented when the 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. Round factor values to
5 decimal places, e.g. 1.25124 and final answers to 0 decimal
places, e.g. 5,275.)
|
No. |
Account Titles and Explanation |
Debit |
Credit |
|---|---|---|---|
|
1. |
enter an account title to record purchase of Truck #1 | enter a debit amount | enter a credit amount |
| enter an account title to record purchase of Truck #1 | enter a debit amount | enter a credit amount | |
|
(To record purchase of Truck #1.) |
|||
|
2. |
enter an account title to record purchase of Truck #2 | enter a debit amount | enter a credit amount |
| enter an account title to record purchase of Truck #2 | enter a debit amount | enter a credit amount | |
| enter an account title to record purchase of Truck #2 | enter a debit amount | enter a credit amount | |
|
(To record purchase of Truck #2.) |
|||
|
3. |
enter an account title to record purchase of Truck #3 | enter a debit amount | enter a credit amount |
| enter an account title to record purchase of Truck #3 | enter a debit amount | enter a credit amount | |
|
(To record purchase of Truck #3.) |
|||
| enter an account title to record the cost of sold goods | enter a debit amount | enter a credit amount | |
| enter an account title to record the cost of sold goods | enter a debit amount | enter a credit amount | |
|
(To record the cost of sold goods.) |
|||
|
4. |
enter an account title to record purchase of Truck #4 | enter a debit amount | enter a credit amount |
| enter an account title to record purchase of Truck #4 | enter a debit amount | enter a credit amount | |
|
(To record purchase of Truck #4.) |
In: Accounting
Laura Leasing Company signs an agreement on January 1, 2020, to
lease equipment to Vaughn Company. The following information
relates to this agreement.
| 1. | The term of the non-cancelable lease is 3 years with no renewal option. The equipment has an estimated economic life of 5 years. | |
| 2. | The fair value of the asset at January 1, 2020, is $76,000. | |
| 3. | The asset will revert to the lessor at the end of the lease term, at which time the asset is expected to have a residual value of $7,000, none of which is guaranteed. | |
| 4. | The agreement requires equal annual rental payments of $24,177.00 to the lessor, beginning on January 1, 2020. | |
| 5. | The lessee’s incremental borrowing rate is 5%. The lessor’s implicit rate is 4% and is unknown to the lessee. | |
| 6. | Vaughn uses the straight-line depreciation method for all equipment. |
Prepare all of the journal entries for the lessee for 2020 to
record the lease agreement, the lease payments, and all expenses
related to this lease. Assume the lessee’s annual accounting period
ends on December 31. (For calculation purposes, use 5
decimal places as displayed in the factor table provided and round
answers to 2 decimal places, e.g. 5,265.25. Credit account titles
are automatically indented when the amount is entered. Do not
indent manually. Record journal entries in the order presented in
the problem.)
|
Date |
Account Titles and Explanation |
Debit |
Credit |
|---|---|---|---|
|
1/1/2012/31/20 |
enter an account title To record the lease on January 1 2020 |
enter a debit amount |
enter a credit amount |
|
enter an account title To record the lease on January 1 2020 |
enter a debit amount |
enter a credit amount |
|
|
(To record the lease) |
|||
|
1/1/2012/31/20 |
enter an account title To record lease liability on January 1 2020 |
enter a debit amount |
enter a credit amount |
|
enter an account title To record lease liability on January 1 2020 |
enter a debit amount |
enter a credit amount |
|
|
(To record lease liability) |
|||
|
1/1/2012/31/20 |
enter an account title for the journal entry on December 31 2020 |
enter a debit amount |
enter a credit amount |
|
enter an account title for the journal entry on December 31 2020 |
enter a debit amount |
enter a credit amount |
|
|
enter an account title for the journal entry on December 31 2020 |
enter a debit amount |
enter a credit amount |
In: Accounting
Ayayai Corp., a public company incorporated on June 28, 2019, set up a single account for all of its intangible assets. The following summary discloses the debit entries that were recorded during 2019 and 2020 in that account:
INTANGIBLE ASSETS-AYAYAI
July
1, 2019 8-year
franchise; expiration date of June 30, 2027
$42,000
Oct.
1 Advance payment
on office lease (2-year lease)
28,000
Dec. 31
Net loss for 2019 including incorporation fee, $1,000; related
legal fees of organizing, $5,100;
expenses of recruiting and training staff for start-up of new
business, $3,700 17,000
Feb.
15, 2020 Patent
purchased (10-year life)
74,400
Mar. 1
Direct costs of acquiring a 5-year licensing
agreement
75,000
Apr. 1
Goodwill purchased (indefinite life)
278,400
June 1
Legal fee for successful defence of patent (see
above)
12,815
Dec. 31
Costs of research department for year
75,000
31 Royalties paid
under licensing agreement (see above)
2,775
The new business started up on July 2, 2019. No amortization was recorded for 2019 or 2020. The goodwill purchased on April 1, 2020, includes in-process development costs that meet the six development stage criteria, valued at $173,000. The company estimates that this amount will help it generate revenues over a 10-year period.
(a)
Prepare the necessary entries to clear the Intangible Assets account and to set up separate accounts for distinct types of intangibles. Make the entries as at December 31, 2020, and record any necessary amortization so that all balances are appropriate as at that date. (Credit account titles are automatically indented when the 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. Round answers to 0 decimal places, e.g. 5,275.)
Date
Account Titles and Explanation
Debit
Credit
Dec. 31, 2020
(To clear Intangible Assets account)
Dec. 31, 2020
(To correct for amortization on franchises)
Dec. 31, 2020
(To correct for rent payments)
Dec. 31, 2020
(To record amortization
expense on patents)
Dec. 31, 2020
(To record amortization
expense on licences)
Dec. 31, 2020
(To record amortization expense
on development cost)
In: Accounting
In the City of Albany, suppose the mill rate for the property tax is $33 for the year 2020 and the appraised value for your home is $300,000, how much would your property tax be in 2020?
In: Accounting
Using the actual/365 convention, calculate the accrued interest based on $60,258 value and a 1.7% coupon.
Accrual begins on 3/12/2020 and ends (and includes) 9/3/2020
In: Finance
How do public health nurses apply and use Healthy People 2020 for a community of interest? Provide an example.
In: Nursing
Analyse the effectiveness of fiscal and monetary policies employed to fight against the economic slow-down in the March quarter of 2020 and June quarter of 2020; and how they influenced Australia’s economic growth.
In: Economics
Amazonian Corporation has the following tax information:
| Year | Taxable Income | Tax Rate |
| 2017 | $1,000,000 | 35% |
| 2018 | $900,000 | 30% |
| 2019 | $800,000 | 28% |
A. In 2020, Amazonian incurred a net operating loss (NOL) of
$350,000, which the company elected to carry back. The statutory
corporate tax rate in 2020 and for all future years is 22%. Prepare
Amazonian's journal entry to record the effect of the loss carry
back.
B. Assume instead that in 2020 Amazonian incurred an NOL of
$2,000,000 and that the company elected to carry back the loss. The
statutory corporate tax rate in 2020 and for all future years is
22%. Prepare the journal entry to record the effects of the
NOL.
In: Accounting
Flatiron Corp has the following budgeted sales in each quarter of the year 2020:
Expected Sales
Q1 $ 300,000
Q2 $ 320,000
Q3 $ 340,000
Q4 $ 360,000
Cash collection information are as follows:
1. Of all sales, 80% are on credit.
2. For the credit sales made in the year 2020; 60% of credit sales are collected in the quarter in which the sale is made; 30% are collected in the following quarter; and 10% are collected in the second quarter after sale.
3. Accounts Receivable is estimated to be $60,000 on December 31,2019. The company expects to collect all outstanding receivable in the first quarter of 2020.
What is the total cash collection for the first quarter of 2020?
In: Accounting
The Concord Company counted physically their beginning balance on January 02, 2020 and subsequent inventory purchases made by the company during the month of January 2020 are given below:
Date Description Units Rate
Jan. 02 Beginning Inventory 300 $10
Jan. 11 Purchased 600 12
Jan 23 Purchased 700 11
The company sold 1,300 units during the month of January 2020.
Instructions: The company uses periodic inventory system. Compute the cost of goods sold and ending inventory on January 31, 2020 using the following inventory costing methods:
a) First in, first out (FIFO) method.
b) Weighted Average cost method.
In: Accounting