Highsmith Rental Company purchased an apartment building early in 2021. There are 15 apartments in the building and each is furnished with major kitchen appliances. The company has decided to use the group depreciation method for the appliances. The following data are available:

In 2024, two new refrigerators costing $4,100 were purchased for cash. In that same year, the old refrigerators, which originally cost $4,300, were sold for $1,600.

Questions:
1. Calculate the group depreciation rate, group life, and depreciation for 2021.
2. Prepare the journal entries to record the purchase of the new refrigerators and the sale of the old refrigerators.

Use the Lewis two sector model. Assume a country is in early stages of development and the you want to help develop the country using the Lewis two sector model. What would you predict about the production function before and after development of the country?

In early 2019, Bridge Company entered into a long term contract to construct a bridge for Greensville County for $10 million. The bridge will take three years to complete. In 2019, Bridge spent $2.8 million on the project, recognized $3.5 million in revenue and $.7 million in profit. In 2020, Bridge spent $4.2 million on the project, recognized $3.8 million in revenue and a $.4 million loss. Bridge billed Greensville $3.0 million in 2019 and $4.5 million in 2020. Greensville paid Bridge $2.6 million in 2019 and $4.3 million in 2020. Bridge Company recognizes revenue on all contracts over time, as the project is being completed by using the cost to cost approach. When preparing the December 31, 2019 and the December 31, 2020 balance sheets what would Bridge report in regards to this contract?

Early in January 2020, Hopkins plc is preparing for a meeting with its bankers to discuss a loan request. Its bookkeeper provided the following accounts and balances at December 31, 2019.

   Debit   Credit
Inventory   £ 65,300  
Accounts Receivable (net)   38,500  
Cash   75,000  
Equipment (net)   84,000  
Patents   15,000  
Notes and Accounts Payable       £ 52,000
Notes Payable (due 2021)       75,000
Share Capital—Ordinary       100,000
Retained Earnings       50,800
   277,800   277,800

Except for the following items, Hopkins has recorded all adjustments in its accounts.
1. Net accounts receivable is comprised of £52,000 in accounts receivable and £13,500 in allowance for doubtful accounts.
2. Cash includes £500 petty cash and £15,000 in a bond sinking fund.
3. Equipment had a cost of £112,000 and accumulated depreciation of £28,000.
4. On January 8, 2020, one of Hopkins' customers declared bankruptcy. At December 31, 2019, this customer owed Hopkins £9,000.

Accounting
Prepare a corrected December 31, 2019, statement of financial position for Hopkins plc.

Analysis
Hopkins' bank is considering granting an additional loan in the amount of £45,000, which will be due December 31, 2020. How can the information in the statement of financial position provide useful information to the bank about Hopkins' ability to repay the loan?

Principles
In the upcoming meeting with the bank, Hopkins plans to provide additional information about the fair value of its equipment and some internally generated intangible assets related to its customer lists. This information indicates that Hopkins has significant unrealized gains on these assets, which are not reflected on the statement of financial position. What objections are the bank likely to raise about the usefulness of this information in evaluating Hopkins for the loan renewal?

26. In the early part of 2013, the partners of Page, Childers, and Smith sought assistance from a local accountant. They had begun a new business in 2012 but had never used an accountant’s services. Page and Childers began the partnership by contributing $80,000 and $30,000 in cash, respectively. Page was to work occasionally at the business, and Childers was to be employed full-time. They decided that year-end profits and losses should be assigned as follows: Each partner was to be allocated 10 percent interest computed on the beginning capital balances for the period. A compensation allowance of $5,000 was to go to Page with a $20,000 amount assigned to Childers. Any remaining income would be split on a 4:6 basis to Page and Childers, respectively. In 2012, revenues totaled $90,000, and expenses were $64,000 (not including the compensation allowance assigned to the partners). Page withdrew cash of $8,000 during the year, and Childers took out $11,000. In addition, the business paid $5,000 for repairs made to Page’s home and charged it to repair expense. On January 1, 2013, the partnership sold a 20 percent interest to Smith for $43,000 cash. This money was contributed to the business with the bonus method used for accounting purposes. Answer the following questions: a. Why was the original profit and loss allocation, as just outlined, designed by the partners? b. Why did the drawings for 2012 not agree with the compensation allowances provided for in the partnership agreement? c. What journal entries should the partnership have recorded on December 31, 2012? d. What journal entry should the partnership have recorded on January 1, 2013?

In the early part of 2018, the partners of Hugh, Jacobs, and Thomas sought assistance from a local accountant. They had begun a new business in 2017 but had never used an accountant’s services.

Hugh and Jacobs began the partnership by contributing $90,000 and $40,000 in cash, respectively. Hugh was to work occasionally at the business, and Jacobs was to be employed full-time. They decided that year-end profits and losses should be assigned as follows:

• Each partner was to be allocated 10 percent interest computed on the beginning capital balances for the period.
• A compensation allowance of $7,000 was to go to Hugh with a $17,000 amount assigned to Jacobs.
• Any remaining income would be split on a 4:6 basis to Hugh and Jacobs, respectively.

In 2017, revenues totaled $115,000, and expenses were $87,000 (not including the partners’ compensation allowance). Hugh withdrew cash of $6,000 during the year, and Jacobs took out $11,000. In addition, the business paid $7,500 for repairs made to Hugh’s home and charged it to repair expense.

On January 1, 2018, the partnership sold a 20 percent interest to Thomas for $44,000 cash. This money was contributed to the business with the bonus method used for accounting purposes.

a, What journal entries should the partnership have recorded on December 31, 2017?

b, What journal entry should the partnership have recorded on January 1, 2018?

“If the early years of the war had been like an exciting voyage out to sea, you might say that by the middle of 1943 we realized the waves were simply too big for our craft. We thought we would drown, all of us; and many of us did.” Arthur Golden.

What is the meaning of the figurative language used in this paragraph?

In the early part of 2018, the partners of Hugh, Jacobs, and Thomas sought assistance from a local accountant. They had begun a new business in 2017 but had never used an accountant’s services.

Hugh and Jacobs began the partnership by contributing $95,000 and $45,000 in cash, respectively. Hugh was to work occasionally at the business, and Jacobs was to be employed full-time. They decided that year-end profits and losses should be assigned as follows:

• Each partner was to be allocated 10 percent interest computed on the beginning capital balances for the period.
• A compensation allowance of $8,000 was to go to Hugh with a $17,000 amount assigned to Jacobs.
• Any remaining income would be split on a 4:6 basis to Hugh and Jacobs, respectively.

In 2017, revenues totaled $120,000, and expenses were $90,000 (not including the partners’ compensation allowance). Hugh withdrew cash of $6,000 during the year, and Jacobs took out $11,000. In addition, the business paid $8,000 for repairs made to Hugh’s home and charged it to repair expense.

On January 1, 2018, the partnership sold a 15 percent interest to Thomas for $37,000 cash. This money was contributed to the business with the bonus method used for accounting purposes.

1. What journal entries should the partnership have recorded on December 31, 2017?

a) Record entry to reclassify payment made to repair personal residence.

b) Record entry to close drawings accounts for 2017.

c) Record entry to close revenue and expense accounts for 2017.

d) Record the distribution of net income to partners

2. What journal entry should the partnership have recorded on January 1, 2018?

a) Record the payment made by Thomas using the bonus method.