On January 1, 2020, the first day of its accounting
year, Lessor Inc., leased certain equipment at an annual payment of
$10,254.19, receivable at the beginning of each year for 10 years.
The first payment was received immediately. The equipment has an
estimated useful life of 12 years and no residual value. Lessor’s
implicit rate is 6%. Lessor had no other costs associated with this
lease and properly classified the lease as a sales-type lease. The
leased equipment was carried on Lessor Inc.’s books at
$65,000.
Required
a. Calculate the value of the lease receivable at the
commencement of the lease.
b. What amounts would be presented in the balance
sheet as of December 31, 2020, related to this lease?
c. What amounts would be presented in the income
statement for the year ended December 31, 2020, related to this
lease?
please provide correct answer!!
In: Accounting
Vaughn Magazine sold 9,480 annual subscriptions on August 1, 2020, for $13 each. Prepare Vaughn’s August 1, 2020, journal entry and the December 31, 2020, annual adjusting entry, assuming the magazines are published and delivered monthly. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit choose a transaction date enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount choose a transaction date enter an account title enter a debit amount enter a credit amount enter an account title enter a debit amount enter a credit amount
In: Accounting
Question 2
(a) Identify and discuss the three elements of control in determining whether to prepare consolidated financial statements.
(b) Dingo Ltd owns all of the shares of Bilby Ltd. On 1 May 2020, Bilby Ltd sold inventory costing $300 to Dingo Ltd for $360 on credit. On 30 June 2020, only half of these goods had been sold by Dingo Ltd, but Dingo Ltd had paid $280 back to Bilby Ltd. The tax rate is 30%. The adjusting consolidation entries at 30 June 2020 were:
Sales revenue Dr 360
Cost of sales Cr 330
Inventory Cr 30
Deferred tax asset Dr 9
Income tax expense Cr 9
Accounts payable Dr 80
Accounts receivable Cr 80
Required:
Explain the rationale behind the adjustments to each of the accounts.
In: Accounting
Concord Inc. charges an initial franchise fee of $69,000. Upon the signing of the agreement (which covers 3 years), a payment of $27,600 is due. Thereafter, 3 annual payments of $13,800 are required. The credit rating of the franchisee is such that it would have to pay interest at 10% to borrow money. The franchise agreement is signed on May 1, 2020, and the franchise commences operation on July 1, 2020. Click here to view factor table. Prepare the journal entries in 2020 for the franchisor under the following assumptions.
(a) No future services are required by the franchisor once the franchise starts operations.
(b) The franchisor has substantial services to perform, once the franchise begins operations, to maintain the value of the franchise.
(c) The total franchise fee includes training services (with a value of $1,700) for the period leading up to the franchise opening and for 2 months following opening.
In: Accounting
On March 31st, 2020, Adtech Inc. issued $200,000, 9%, 10-year bonds. The bonds pay interest semi-annually, on September 30 and March 31. The first interest payment is on September 30, 2020. The bonds are issued at a price of 114 1/4 (i.e., $228,500). The issuance price implies an effective interest rate of 7%. Bond issue costs are $10,000, which are amortized using the straight-line method. Adtech's fiscal year-end is on December 31.
1. Prepare all necessary journal entries in relation to these bonds between March 30, 2020 and April 1st, 2021. Make sure you indent your credit and clearly mark the date for each journal entry.
2. What is the amount of the liability that Adtech has to the bondholders on September 30, 2021, after the interest payment on that date?
In: Accounting
| Blackwell Company's income statement for 2020 consisted of: | ||||||||
| Revenues | 1,220,000 | |||||||
| Cost of goods sold | 627,000 | |||||||
| Operating expenses | 295,000 | |||||||
| Depreciation expense | 60,000 | |||||||
| Interest expense | 26,000 | |||||||
| Gain on the sale of machinery | (12,000) | |||||||
| Loss on the sale of investments | 8,000 | 1,004,000 | ||||||
| Income before income tax | 216,000 | |||||||
| Income tax expense | 40,000 | |||||||
| Net income | 176,000 | |||||||
| Blackwell's comparative balance sheet information for 2020 included: | ||||||||
| 12/31/20 | 12/31/19 | |||||||
| Accounts receivable | 268,000 | 257,000 | ||||||
| Accounts payable | 47,000 | 42,000 | ||||||
| Income taxes payable | 17,000 | 13,500 | ||||||
| Interest payable | 9,000 | 7,500 | ||||||
| Bonds payable | 500,000 | 500,000 | ||||||
| Discount on bonds payable | 26,000 | 28,000 | ||||||
| Prepare the Cash flows from operating activities section of Blackwell's 2020 Statement of Cash Flows using the indirect method | ||||||||
| and the required disclosures for interest and income tax expense. | ||||||||
In: Accounting
Pension data for Freddie Johns Company include the following for 2020:
Settlement rate 8%
Expected return on plan assets: 12%
Actual return on plan assets: $170,000
Service cost: $300,000
Est. remaining service life of employees 10 years
As of January 1, 2020:
PBO $1,500,000
Plan assets $1,700,000
AOCI – PSC $200,000
AOCI – Actuarial (G)/L $60,000
During 2020:
Amortization of prior service cost $25,000
Cash contributions to pension fund $240,000
Benefit payments to retirees $260,000
Prepare all journal entries necessary related to this pension for the year. You may use individual journal entries or a combined journal entry, but be sure to clearly support your answer with all necessary calculations and/or T-accounts. Also, you may choose to use the pension worksheet to support your answer, but the pension worksheet is not required.
In: Accounting
|
Cullumber Company bottles and distributes B-Lite, a diet soft
drink. The beverage is sold for 50 cents per 16-ounce bottle to
retailers, who charge customers 75 cents per bottle. For the year
2020, management estimates the following revenues and
costs.
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In: Accounting
On January 1, 2020, Sage Company has the following defined
benefit pension plan balances.
Projected benefit obligation$4,571,000
Fair value of plan assets4,210,000
The interest (settlement) rate applicable to the plan is 10%. On
January 1, 2021, the company amends its pension agreement so that
prior service costs of $492,000 are created. Other data related to
the pension plan are as follows.
2020
2021
Service cost
$152,000 $179,000
Prior service cost amortization
0 89,000
Contributions (funding) to the plan
236,000 285,000
Benefits paid
198,000 275,000
Actual return on plan assets
252,600 261,000
Expected rate of return on assets
6% 8%
Q. Prepare a pension worksheet for the pension plan for 2020 and 2021
Q. For 2021, prepare the journal entry to record pension-related amounts.
In: Accounting
On 1 July, 2018 Bundoora Ltd acquires 25 per cent of the issued capital of Preston Ltd for a cash consideration of $150,000.
At the date of acquisition, the share capital and retained earnings of Preston Ltd are as follows: Share capital $120,000 and Retained earnings $480,000 (Total Shareholders’ equity $600,000).
Additional information:
Required:
In: Accounting