In: Accounting
1. determine when the seller should recognize revenue.
2. Explain your answer using GAAP revenue recognition guidelines.
3. Explain how each transaction would appear on the income statement and balance sheet for 2017.
Case 3-Your company sells a product bundle of software that includes a 3 year service contract for $100,000, Your company installed the software on July 1, 2018, and the client paid $50,000 cash. Thebalance is due on December 31, 2018. Identify the performance obligations and the revenue in 2018, assuming: (a) the performance obligations are interdependent (b) the performance obligations are not interdependent ( the service contract is sold separately for $25,000 and the software for $100,000.)
In: Accounting
Cool Candy Company issued 10 year $10,000,000 face value, 6% convertible bonds at par on January 1, 2018. Each bond has a par value of $1,000 with interest payable on December 31 of each year. The conversion ratio is 5:1 (5 shares of stock for each bond). No bonds have been converted into common stock. Cool’s tax rate is 20%. Net income (after tax) for 2018 was $45,000,000 and the Company has 10,000,000 common shares issued and outstanding during the entire year.
Required:
Please compute both basic and diluted earnings per share for 2018. (SHOW ALL WORK)
In: Accounting
The following transactions and adjusting entries were completed by Legacy Furniture Co. during a three-year period. All are related to the use of delivery equipment. The double-declining-balance method of depreciation is used. 1/1/2018 Purchased a used delivery truck for $28,000, paying cash. 4/15/2018 Paid garage $675 for miscellaneous repairs to the truck. 12/31/2018 Recorded depreciation on the truck for the year. The estimated useful life of the truck is four years, with a residual value of $5,000 for the truck. 3/31/2019 Sold the used delivery truck purchased for $15,000. (Record depreciation to date for the truck.) Instructions Journalize the transactions and the adjusting entries.
In: Accounting
Fesler Inc. acquired all of the outstanding common stock of Pickett Company on January 1, 2017. Annual amortization of $22,000 resulted from this transaction. On the date of the acquisition, Fesler reported retained earnings of $520,000 while Pickett reported a $240,000 balance for retained earnings. Fesler reported net income of $100,000 in 2017 and $68,000 in 2018, and paid dividends of $25,000 in dividends each year. Pickett reported net income of $24,000 in 2017 and $36,000 in 2018, and paid dividends of $10,000 in dividends each year.
If the parent’s net income reflected use of the initial value method, what were the consolidated retained earnings on December 31, 2018?
In: Accounting
The following transactions and adjusting entries were completed by Legacy Furniture Co. during a three-year period. All are related to the use of delivery equipment. The double-declining-balance method of depreciation is used. 1/1/2018 Purchased a used delivery truck for $28,000, paying cash. 4/15/2018 Paid garage $675 for miscellaneous repairs to the truck. 12/31/2018 Recorded depreciation on the truck for the year. The estimated useful life of the truck is four years, with a residual value of $5,000 for the truck. 3/31/2019 Sold the used delivery truck purchased for $15,000. (Record depreciation to date for the truck.) Instructions Journalize the transactions and the adjusting entries.
In: Accounting
Task Ltd. has the following transactions in purchasing and selling the ordinary shares of Sugar Company:
15. Jul. 2018 Purchased 12,000 shares of Sugar Company @ $100 per share.
31. Dec. 2018 The fair value of the ordinary shares of Sugar Company is $160 per share.
15. Jan. 2019 Sold the 4,000 ordinary shares of Sugar Company @ $150 per share.
Required:
Task Ltd. classifies the investment in the ordinary shares of Sugar Company as financial assets at fair value through other comprehensive income in accordance with HKFRS 9. Prepare journal entries for Task Ltd. to record the above transactions for 2018 and 2019.
In: Accounting
SPECULATION. July 2018 Cocoa was trading for at $1582 per metric ton on April 25th. Today it is trading at $1700. The contract size for Cocoa is 10 metric tons and on May 2nd is trading Give both per ton and total values for a and b.
a. If you undertook a position as a short speculator on 4/25 and offset your position on 5/2 for a July 2018 Cocoa futures contract, what is your gain or loss? Show calculations.
b.If you undertook instead position as a short speculator on 4/25 and offset your position on 5/2 for a July 2018 Cococa futures contract, what is your gain or loss? Show calculations.
In: Finance
Ahmad company (the 80%-owned subsidiary); in 1/5/2018 sold land to Fatima Company (the subsidiary) at selling price $125,000, the cost of land $100,000. During 2020, Fatima Company sold the land at $140,000. Net income for Fatima Company as follows: 2018 2019 2020 Net Profit 80,000 100,000 60,000 Instructions: 1. Journalize the above transactions in Parent Company records and in the Subsidiary Company records. 2. Calculate the Parent company from the subsidiary’s net income? 3. Calculate the Minority interest from the subsidiary’s net income? 4. Prepare the working paper in Journal entries format for 2018; 2019 and 2020?
In: Accounting
You have been the auditor of Data Ltd for two years. Your auditor’s report for Data for the year ended 30 June 2018 was unmodified, indicating that in your opinion the financial report gave a true and fair view. In August 2018, Data obtained a large loan from Better Bank Ltd, to provide additional working capital. Subsequently Data suffered severe trading difficulties and was placed into liquidation in late December 2018, with insufficient funds to repay the loan to Better Bank.
Required: Outline a defense for your audit firm to any legal action taken by Better Bank to recover its loss. (10 marks, maximum 600 words)
In: Accounting