Here are some important figures from the budget of Wise Corporation for the third quarter of 2020:
| --------- | July | August | September |
| Credit sales | $1,275,800 | $1,483,500 | $1,096,300 |
| Credit purchases | 765,480 | 890,160 | 657,780 |
| Cash disbursements | |||
| Wages , taxes and expenses | 348,600 | 395,620 | 337,150 |
| Interest | 29,900 | 29,900 | 29,900 |
| Equipment | 0 | 158,900 | 96,300 |
| Credit sales collection | |||
| Collected in month of sale | 35% | ||
| Collected month after sale | 60% | ||
| Never Collected | 5% | ||
| June Credit sales | $1,135,020 | ||
June Credit purchases | $681,012 |
Beginning Cash balance $425,000
All credit purchases are paid in the following month after the purchase.
Instructions:
a) Using the above information, complete the following cash budget. (15 points)
July | August | September | |
Beginning cash balance | |||
Cash receipts: | |||
Cash collections from credit sales | |||
Total cash available |
Cash disbursements: | |||
Payments for purchases | |||
Wages, taxes, and expenses | |||
Interest | |||
Equipment purchases | |||
Total cash disbursements | |||
Ending cash balance |
b) What are the steps in preparing cash budget? Explain. (5 points)
In: Finance
Creprie Ltd acquired all the shares in Bretonne Ltd on 30 June 2020. At the date of acquisition Bretonne Ltd had a dividend payable of $42,000. The shares are acquired cumulative div. The dividend is paid on 8 July 2020. Which of the following statements is correct?
As Creperie Ltd does not receive the dividend when it is paid, no consolidation adjusting entry is required to eliminate the dividend payable and dividend receivable account at the date of acquisition. | ||
As Creprie Ltd receives the dividend when it is paid, no consolidation entries are required to eliminate dividend payable and dividend receivable at 30 June 2020. | ||
As Creprie Ltd receives the dividend when it is paid, a consolidation adjusting entry is required to credit the dividend receivable at 30 June 2020. | ||
As Creprie Ltd receives the dividend when it is paid, a consolidation adjusting entry is required to debit the dividend payable at 30 June 2021. |
In: Accounting
Exercise 15-08
The following are two independent situations.
| 1. | Sheridan Corporation redeemed $123,100 face value, 8% bonds on June 30, 2020, at 107. The carrying value of the bonds at the redemption date was $109,100. The bonds pay annual interest, and the interest payment due on June 30, 2020, has been made and recorded. | |
| 2. | Tastove Inc. redeemed $144,000 face value, 15.00% bonds on June 30, 2020, at 96. The carrying value of the bonds at the redemption date was $146,000. The bonds pay annual interest, and the interest payment due on June 30, 2020, has been made and recorded. |
For each independent situation above, prepare the appropriate
journal entry for the redemption of the bonds. (Credit
account titles are automatically indented when amount is entered.
Do not indent manually.)
No. | Account Titles and Explanation | Debit | Credit |
1. | |||
2. | |||
In: Accounting
The following are two independent situations.
| 1. | Crane Corporation redeemed $137,100 face value, 12% bonds on June 30, 2020, at 108. The carrying value of the bonds at the redemption date was $123,600. The bonds pay annual interest, and the interest payment due on June 30, 2020, has been made and recorded. | |
| 2. | Tastove Inc. redeemed $153,000 face value, 17.50% bonds on June 30, 2020, at 98. The carrying value of the bonds at the redemption date was $155,000. The bonds pay annual interest, and the interest payment due on June 30, 2020, has been made and recorded. |
For each independent situation above, prepare the appropriate
journal entry for the redemption of the bonds. (Credit
account titles are automatically indented when amount is entered.
Do not indent manually.)
|
No. |
Account Titles and Explanation |
Debit |
Credit |
|
1. |
|||
|
2. |
|||
In: Accounting
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
KLM reported net income of 2 million and made dividend distributions of 1 million during the year ending 12/31/2020
Assuming XYZ is using the EQUITY METHOD for this investment
In: Accounting
The DeVille Company reported pretax accounting income on its income statement as follows: 2018 $ 415,000 2019 335,000 2020 405,000 2021 445,000 Included in the income of 2018 was an installment sale of property in the amount of $56,000. However, for tax purposes, DeVille reported the income in the year cash was collected. Cash collected on the installment sale was $22,400 in 2019, $28,000 in 2020, and $5,600 in 2021. Included in the 2020 income was $23,000 interest from investments in municipal bonds. The enacted tax rate for 2018 and 2019 was 30%, but during 2019 new tax legislation was passed reducing the tax rate to 25% for the years 2020 and beyond. Required: Prepare the year-end journal entries to record income taxes for the years 2018–2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
In: Accounting
During 2020, Vaughn Furniture Company purchases a carload of
wicker chairs. The manufacturer sells the chairs to Vaughn for a
lump sum of $161,595 because it is discontinuing manufacturing
operations and wishes to dispose of its entire stock. Three types
of chairs are included in the carload. The three types and the
estimated selling price for each are listed below.
| Type | Number of Chairs | Estimated selling Price |
| lounge chair | 1,080 | $90 |
| armchair | 810 | 80 |
| straight chair | 1,890 | 50 |
During 2020, Vaughn sells 540 lounge chairs, 270 armchairs, and
324 straight chairs.
What is the amount of gross profit realized during 2020? What is
the amount of inventory of unsold straight chairs on December 31,
2020? (Round cost per chair to 2 decimal places, e.g.
78.25 and final answer to 0 decimal places, e.g.
5,845.)
In: Accounting
Case One:
On December 31, 2020, book value of patent is 6 millions. Undiscounted sum of future cash flows of patent is 10 millions, fair value of patent is 3 millions.
Determine the amount of any impairment loss to be recorded, if any.
(Please explain in detailes why book value is compared with the Undiscounted sum of future cash flows.)
Case Two:
Apple company acquired Banana Corporation for 60 millions on January 1st, 2020. In addition, he fair value of Goodwill is 10 millions.
An indicator is present signaling possible impairment in the end of 2020.
On December 31, 2020,
Fair value of Banana Corporation: 45million
Fair value of Banana Corporation (excluding goodwill): 39 million
Book value of Banana Corporation (including goodwill): 47 million
Determine the amount of any impairment loss to be recorded, if any.
In: Accounting
On January 1, 2020, Coronado Inc. had cash and common stock of
$60,530. At that date, the company had no other asset, liability,
or equity balances. On January 2, 2020, it purchased for cash
$20,760 of debt securities that it classified as
available-for-sale. It received interest of $4,100 during the year
on these securities. In addition, it has an unrealized holding gain
on these securities of $5,190 net of tax. Determine the following
amounts for 2020: (a) net income, (b) comprehensive income, (c)
other comprehensive income, and (d) accumulated other comprehensive
income (end of 2020).
| (a) | Net income | $enter net income in dollars | ||
| (b) | Comprehensive income | $enter comprehensive income in dollars | ||
| (c) | Other comprehensive income | $enter other comprehensive income in dollars | ||
| (d) | Accumulated other comprehensive income | $enter accumulated other comprehensive income in dollars |
In: Accounting