This alphabetized adjusted trial balance is for GalaVu Entertainment as of its December 31, 2020, year-end:
| Debit | Credit | ||||||
| Accounts payable | $ | 44,200 | |||||
| Accounts receivable | $ | 18,900 | |||||
| Accumulated depreciation, automobiles | 69,200 | ||||||
| Accumulated depreciation, equipment | 20,700 | ||||||
| Advertising expense | 9,200 | ||||||
| Automobiles | 142,000 | ||||||
| Cash | 11,200 | ||||||
| Depreciation expense, automobiles | 13,400 | ||||||
| Depreciation expense, equipment | 4,300 | ||||||
| Equipment | 66,000 | ||||||
| Revenue | 243,975 | ||||||
| Interest income | 250 | ||||||
| Interest expense | 3,700 | ||||||
| Interest payable | 100 | ||||||
| Interest receivable | 200 | ||||||
| John Conroe, capital | 23,200 | ||||||
| John Conroe, withdrawals | 19,200 | ||||||
| Land | 36,000 | ||||||
| Long-term notes payable | 117,000 | ||||||
| Notes receivable (due in 90 days) | 81,000 | ||||||
| Office supplies | 4,200 | ||||||
| Office supplies expense | 13,200 | ||||||
| Repairs expense, automobiles | 8,600 | ||||||
| Salaries expense | 76,425 | ||||||
| Salaries payable | 5,700 | ||||||
| Unearned revenue | 11,200 | ||||||
| Wages expense | 28,000 | ||||||
| Totals | $ | 535,525 | $ | 535,525 | |||
Required:
Use the information in the trial balance to prepare:
a. The income statement for the year ended December 31, 2020.
b. The statement of changes in equity for the year ended December 31, 2020, assuming that the owner made additional investments of $16,000 during the year.
c. The balance sheet as of December 31, 2020. (Be sure to list the assets and liabilities in order of their liquidity.)
In: Accounting
On January 1, 2020, Pharoah Co. enters into a contract to sell a customer a wiring base and shelving unit that sits on the base in exchange for $3,100. The contract requires delivery of the base first but states that payment for the base will not be made until the shelving unit is delivered. Pharoah identifies two performance obligations and allocates $1,085 of the transaction price to the wiring base and the remainder to the shelving unit. The cost of the wiring base is $650; the shelves have a cost of $330.
Prepare the journal entry on January 1, 2020, for Pharoah. (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.)
Prepare the journal entry on February 5, 2020, for Pharoah when the wiring base is delivered to the customer. (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.)
Prepare the journal entry on February 25, 2020, for Pharoah when the shelving unit is delivered to the customer and Pharoah receives full payment. (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.)
In: Accounting
A performs bookkeeping and tax- reporting services to startup companies. On January 1, 2018, A entered into a 3-year service contract with B. B promises to pay $9,000 at the beginning of each year, which at contract inception is the stand-alone selling price for these services. At the end of the second year, the contract is modified and the fee for the third year of services is reduced to $8,000. In addition, B agrees to pay an additional $22,000 at the beginning of the third year to cover the contract for 3 additional years (i.e., 4 years remain after the modification). The extended contract services are similar to those provided in the first 2 years of the contract.
1. Prepare the journal entries for the A in 2018 related to this service contract. (1) on January 1, 2018 and (2) on December 31, 2018
2. Prepare the journal entries for B in 2020 related to the modified service contract, assuming the addition of the service is not a separate contract. (1) on January 1, 2020 and (2) on December 31, 2020.
3. Assuming A and B agree on a revised set of services (fewer bookkeeping services but more tax services) in the extended contract period and the modification results in a separate performance obligation, (1) prepare the journal entry on December 31, 2020. (2) What are required to treat the modification as a separate contract.
In: Accounting
In June 1, 2020, Jill Bow and Aisha Adams formed a partnership to open a gluten-free commercial bakery, contributing $297,000 cash and $394,000 of equipment, respectively. The partnership also assumed responsibility for a $57,000 note payable associated with the equipment. The partners agreed to share profits as follows: Bow is to receive an annual salary allowance of $167,000, both are to receive an annual interest allowance of 10% of their original capital investments, and any remaining profit or loss is to be shared 40/60 (to Bow and Adams, respectively). On November 20, 2020, Adams withdrew cash of $117,000. At year-end, May 31, 2021, the Income Summary account had a credit balance of $550,000. On June 1, 2021, Peter Williams invested $137,000 and was admitted to the partnership for a 20% interest in equity. Required: 1. Prepare journal entries for the following dates.
Required: 1. Prepare journal entries for the following dates.
a. June 1, 2020 Record the formation of partnership
b. November 20, 2020 Record the withdrawal by partner
c. May 31, 2021 Record the closing of profit to capital.
d. June 1, 2021 Record the admission of Williams for a 20% interest.
2. Calculate the balance in each partner’s capital account immediately after the June 1, 2021, entry.
In: Accounting
In February 2020, Sandhill Construction signed a contract and
commenced construction on a parking garage. The total contract
price was $90.8 million and was expected to be completed in July
2024 at a total estimated cost of $83.0 million. Payment by the
customer was to be made in several stages, based on significant
events and dates throughout the construction timeline. The customer
was to have control over the parking garage and was able to make
major changes to the project during the construction process.
Sandhill’s year-end was September 30.
By the end of September, 2020, Sandhill had incurred $20,750,000 in
costs and had invoiced $10,400,000 in progress billings. $7,600,000
of the progress billings had been collected.
By September 30, 2021, Sandhill had incurred $40,200,000 in total
costs and had invoiced $45,500,000 in progress billings, including
the progress billings in 2020. Of the total billings, $30,500,000
in total had been collected. Also, Sandhill reviewed its cost
estimates on the project, and now believed the parking garage would
cost $80.4 million in total to complete.
Prepare all journal entries required for the year ended September 30, 2020. Use Materials, Cash, Payables for costs incurred to date.
Prepare all journal entries required for the year ended September 30, 2021. Use Materials, Cash, Payables for costs incurred to date.
In: Accounting
The balance sheet and income statement for Cruise Corporation
are as
follows:
Balance Sheet as of December 31,
2020
ASSETS
LIABILITIES &
EQUITY
Cash & marketable securities $2,000
Accounts
payable
$30,000
Accounts
Receivable
35,000
Taxes
payable
9,000
Inventory
15,000
Short-term
borrowings
12,000
Total current
assets
$52,000
Total current
liabilities
$51,000
Net P,P &
E
$448,000 Long-term
debt
$200,000
TOTAL
ASSETS
$500,000 Total
liabilities
$251,000
Common stock at
par
$80,000
Additional paid-in capital
$30,000
Retained
earnings
$139,000
TOTAL LIABILITIES &
EQUITY
$500,000
Income Statement for the year ending December 31,
2020
Sales
$800,000
Cost of goods sold 560,000
Gross
profit
$240,000
S, G &
A
100,000
Operating
profit
$140,000
Interest expense
11,660
Earnings b4
tax
$128,340
Income
tax
39,785
Net
Income
$88,555
Cruiseʹs stock was selling for $7 a share at the end of 2020, and
there were 95 thousand shares outstanding. Cruise paid dividends of
$0.05 a share in
2020 .
Approximately how many days are Cruiseʹs customers taking to pay
their bills? Assume a 365-day year.
23 days
16 days
25
days
20 days
In: Finance
Beatrice Corp. desired to raise cash to fund its expansion by issuing long-term bonds. The corporation hired an investment banker to manage the issue (best efforts underwriting) and also hired the services of a lawyer, an audit firm, etc. On June 1, 2020, Twilight sold $ 500,000 in long-term bonds. The bonds will mature in 10 years and have a stated interest rate of 8%. Other bonds that Twilight has issued with identical terms are traded based on a market rate of 10%. The bonds pay interest semi-annually on May 31 and November 30. The bonds are to be accounted for using the effective-interest method. On June 1, 2022 Twilight decided to retire 20% of the bonds. At that time the bonds were selling at 98.
Instructions (Round all values to the nearest dollar)
a) Provide the journal entry for the issuance of the bonds on June 1, 2020.
b) What was the interest expense related to these bonds that would be reported on Twilight’s calendar 2020 income statement?
c) Provide all entries from after the issue of the bond until December 31, 2020.
d) Calculate the gain or loss on the partial retirement of the bonds on June 1, 2022.
e) Provide the journal entries to record the partial retirement on June 1, 2022.
In: Accounting
Norr and Caylor established a partnership on January 1, 2019. Norr invested cash of $100,000 and Caylor invested $30,000 in cash and equipment with a book value of $40,000 and fair value of $50,000. For both partners, the beginning capital balance was to equal the initial investment. Norr and Caylor agreed to the following procedure for sharing profits and losses:
The Articles of Partnership specified that each partner should withdraw no more than $1,000 per month, which is accounted as direct reduction of that partner’s capital balance.
For 2019, the partnership's income was $70,000. Norr had 1,000 billable hours, and Caylor worked 1,400 billable hours. In 2020, the partnership's income was $24,000, and Norr and Caylor worked 800 and 1,200 billable hours respectively. Each partner withdrew $1,000 per month throughout 2019 and 2020.
In: Accounting
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In: Accounting
Savage Corporation at June 30, 2020.
| Sales revenue | $1,595,870 | Depreciation expense (office furniture and equipment) | $7,119 | |||
| Sales discounts | 33,040 | Property tax expense | 7,850 | |||
| Cost of goods sold | 897,600 | Bad debt expense (selling) | 4,614 | |||
| Salaries and wages expense (sales) | 56,520 | Maintenance and repairs expense (administration) | 8,347 | |||
| Sales commissions | 98,900 | Office expense | 6,480 | |||
| Travel expense (salespersons) | 35,200 | Sales returns and allowances | 58,075 | |||
| Delivery expense | 23,290 | Dividends received | 34,910 | |||
| Entertainment expense | 14,990 | Interest expense | 18,950 | |||
| Telephone and Internet expense (sales) | 9,160 | Income tax expense | 107,240 | |||
| Depreciation expense (sales equipment) | 4,914 | Depreciation understatement due to error—2020 (net of tax) | 17,738 | |||
| Maintenance and repairs expense (sales) | 6,715 | Dividends declared on preferred stock | 9,020 | |||
| Miscellaneous selling expenses | 4,689 | Dividends declared on common stock | 39,470 | |||
| Office supplies used | 3,656 | |||||
| Telephone and Internet expense (administration) | 2,966 |
The Retained Earnings account had a balance of $370,560 at July 1,
2019. There are 75,830 shares of common stock outstanding.
Using the single-step form, prepare an income statement for the year ended June 30, 2020.
Prepare a retained earnings statement for the year ended June 30, 2020.
In: Accounting