On January 1, 2020, Galactus Corp. (lessor) entered into a noncancellable lease agreement with Blade Corp. (lessee) for machinery which was carried in Galactus’s accounting records at $2,265,000 and had a fair value of $2,400,000. Minimum lease payments under the lease agreement, which expires on December 31, 2029, total $3,550,000. Payments of $355,000 are due each January 1. The first payment was made on January 1, 2020 when the lease agreement was finalized. The interest rate of 10% which was stipulated in the lease agreement is the implicit rate set by the lessor. The effective interest method is being used. Blade expects the machine to have a ten-year life with no residual value, and be depreciated on a straight-line basis. Collectibility of the rentals is reasonably assured, and there are no important uncertainties surrounding the costs yet to be incurred by Galactus. Both entities are small private corporations that follow ASPE.

Instructions

a. From the lessee's viewpoint, what kind of lease is the above agreement? From the lessor's viewpoint, what kind of lease is the above agreement?

b. Ignoring income taxes, what should be the income reported by Galactus from the lease for calendar 2020?

c. Ignoring income taxes, what should be the expenses incurred by Blade from this lease for the calendar 2020?

d. What journal entries should be recorded by Blade Corp. on January 1, 2020?

e. What journal entries should be recorded by Galactus Corp. on January 1, 2020?

Using the partial Unadjusted Trial Balance at yearend June 30, 2020 below prepare the annual adjusting journal entries in proper general journal form for the below transactions and answer additional questions. Please record all your answers in the journal entry table provided.

Account Title   Dr. $   Cr. $
Prepaid Insurance   24,000.00     
Notes Receivable    5,500.00     
Shop Supplies   2,700.00     
Delivery Vehicle   40,000.00     
Accumulated Depreciation - Delivery Vehicle      0.00
Unearned Service Revenue      10,000.00
Notes Payable        5,000.00

a) January 1, 2020 a new delivery vehicle was purchased for $40,000. The delivery vehicle has an estimated salvage value of $4,000 and has a estimated useful life of 5 years. Record the depreciation.

b) Accrued revenues at year end totalled $4,200.

c) Employees are paid bi-weekly on Fridays. The total biweekly wage expense for all employees is $10,000. The last pay day was Friday, June 26, 2020 for work to the end of June 26, 2020. Employees do not work weekends.
d)The Notes Payable represents a loan received on April 1, 2020. Interest is accrued at 3% per year. Both the interest and principal are payable on March 31, 2020.

e) At year end it was determined that $1,000 of the Shop Supplies had been used. What is the adjusted ending balance in the Shop Supplies account at year end. Please state whether it will be a debit or credit balance.

The unadjusted inventory balance of Ultim Corp. is $100,000 on December 31, 2020, based on a physical inventory count. The following items must be considered before the inventory valuation is finalized.

a. On December 31, the physical inventory excluded $250 of merchandise inventory set aside for shipment to a customer, which has not yet shipped.

b. On December 31, the physical inventory excluded $1,000 of merchandise inventory out on consignment in the customers’ showrooms.

c. On December 31, the physical inventory excluded $800 of merchandise held on consignment.

d. $750 of in-transit merchandise was shipped f.o.b. destination to a customer and was excluded from the physical inventory count. The merchandise was turned over to a common carrier on December 28, 2020, and is expected to arrive at the customer on January 2, 2021.

e. Ultim Corp. ordered merchandise on December 26, 2020. The merchandise ($800) was shipped to Ultim Corp. f.o.b. shipping point, and was expected to arrive January 2, 2021. The merchandise was not included in the physical inventory count.

f. A return to a vendor of merchandise for $1,000 was in-transit on December 31, 2020, and was excluded from the physical inventory count. The merchandise was shipped f.o.b. shipping point on December 30, 2020.

Required

Considering items a through f, determine the adjusted inventory balance for Ultim Corp.

Raleigh Department Store uses the conventional retail method for the year ended December 31, 2019. Available information follows: The inventory at January 1, 2019, had a retail value of $46,000 and a cost of $29,160 based on the conventional retail method. Transactions during 2019 were as follows: Cost Retail Gross purchases $ 291,540 $ 500,000 Purchase returns 6,000 11,000 Purchase discounts 5,100 Gross sales 500,000 Sales returns 8,500 Employee discounts 3,500 Freight-in 27,000 Net markups 26,000 Net markdowns 11,000 Sales to employees are recorded net of discounts. The retail value of the December 31, 2020, inventory was $61,800, the cost-to-retail percentage for 2020 under the LIFO retail method was 64%, and the appropriate price index was 103% of the January 1, 2020, price level. The retail value of the December 31, 2021, inventory was $49,290, the cost-to-retail percentage for 2021 under the LIFO retail method was 63%, and the appropriate price index was 106% of the January 1, 2020, price level.

1. Estimate ending inventory for 2019 using the conventional retail method.

2. Estimate ending inventory for 2019 assuming Raleigh Department Store used the LIFO retail method

3. Assume Raleigh Department Store adopts the dollar-value LIFO retail method on January 1, 2020. Estimating ending inventory for 2020 and 2021.

Recording Notes Receivable: Issuance, Payment, and Default Marydale Products permits its customers to defer payment by giving personal notes instead of cash. All the notes bear interest and require the customer to pay the entire note in a single payment 6 months after issuance. Consider the following transactions, which describe Marydale's experience with two such notes: On October 31, 2019 Marydale accepts a 6-month, 12% note from Customer A in lieu of a $3,600 cash payment for merchandise delivered on that day. On February 28, 2020 Marydale accepts a 6-month, $2,100, 12% note from Customer B in lieu of a $2,100 cash payment for merchandise delivered on that day. On April 30, 2020 Customer A pays the entire note plus interest in cash. On August 31, 2020 Customer B pays the entire note plus interest in cash. Required: Prepare the necessary journal and adjusting entries required to record Transactions a through d in Marydale's records. For a compound transaction, if an amount box does not require an entry, leave it blank. a. Oct. 31, 2019 Record sale Dec. 31, 2019 Record accrued interest income b. Feb. 28, 2020 Record sale c. Apr. 30, 2020 Record collection of note receivable d. Aug. 31, 2020 Record collection of note receivable

Once the Consumer Product Safety Commission (CPSC) prohibits the sale of a particular product in the United States, a manufacturer can no longer sell the product to U.S. wholesalers or retailers. However, the product can be sold in other countries that have not prohibited its sale. The same is true of other countries' sales to the United States. For example, Great Britain outlawed the sale of the prescription sleeping pill, Halcion, but sales of the drug continue in the U.S. The British medical community reached conclusions regarding the pill's safety that differed from the conclusions reached by the medical community and the Food and Drug Administration in the U.S. Some researchers who conducted studies on the drug in the U.S. simply concluded that stronger warning labels were needed.

The CPSC outlawed the sale of three-wheeled all-terrain cycles in the U.S. in 1988. While some manufacturers had already turned to four-wheel models, other manufacturers still had inventories of three-wheel cycles. Testimony on the cycles ranged from contentions that the vehicles themselves were inherently dangerous, to arguments that the vehicles

were safe but drivers were too young, too inexperienced, and more inclined to take risks. Still, the three-wheeled vehicle can be sold outside the U.S. For many companies, chaos follows a product recall because inventory of the recalled product may be high. Often, firms must decide whether to "dump" the product in other countries or take a write-off that could

damage earnings, stock prices, and employment stability. If you were a manufacturer holding substantial inventory of a product that has been outlawed in the U.S., what ethical concerns would you have about selling the product in countries that do not [yet] prohibit its sale? Please discuss those concerns and the arguments for and against taking action based on those concerns. To what extent will your decision be affected by the level of the write-down in income you must take?

What do you perceive as an immediate threat (or threats) confronting modern organizations now? What about opportunities? Please support your findings using financial references (e.g., Bloomberg, The Financial Times, The Wall Street Journal, The Economist).

There are threats that organizations face every single day. With the rise in technology, a big threat is security. There are several security threats that business can face on their networks – cyber-crime, hacktivists, small-time cons, increasingly compromised web and malware mercenaries, to name a few (Grimes, 2017).

How do you see the financial reporting requirements for companies shifting in 10 to 20 years? Are they going to become more stringent or more relaxed? Are countries across the globe going to standardize their filings into a single system?

I do not see financial reporting requirements for companies becoming more relaxed over the next 10 to 20 years; in fact, I think they will continue to become more stringent. Companies are required to follow Generally Accepted Accounting Principles (GAAP). GAAP is a combination of authoritative standards and are the commonly accepted way of recording and reporting accounting information for a company and/or organization (Kenton, 2018).

What skills and knowledge do you hope to gain in this course, and what are your career goals for your MBA?

While I currently work as a Senior Financial Analyst, I am always looking for ways to improve and I am hoping that this class will teach me things I may not know or have forgotten and allow me to have a better understanding of financial analysis and how to evaluate and look at a company and/or organization better. Knowledge is power!

For chegg: In reference to my above post, find common ground and/or remark on any differences in experience, interests, and goals. Was there anything in my posts that you perhaps had not considered?

Book value versus market value components.

The CFO of DMI is trying to determine the​ company's WACC. ​ Brad, a promising​ MBA, says that the company should use book value to assign the WACC​ components' percentages. ​ Angela, a​ long-time employee and experienced financial​ analyst, says that the company should use market value to assign the​ components' percentages. The​ after-tax cost of debt is at 7.6​%, the cost of preferred stock is at 12.46​%, and the cost of equity is at 16.64%.

Calculate the WACC using both the book value and the market value approaches with the information

Current assets   $32,000 Current liabilities   $0

Long-term assets   $66,000 Long-term liabilities  
Bonds payable   $54,000
Owners' equity  
Preferred stock   $13,000
Common stock   $31,000
  Total assets   $98,000   Total liabilities and
   owners' equity   $98,000 

   Debt   Preferred Stock   Common Stock
Outstanding   54,000   130,000   1,240,000
Market Price   $936.56   $97.89   $32.45

. Which do you think is​ better?

What is the book value adjusted WACC for​ DMI?

​ (Round to two decimal​ places.)

What is the market value adjusted WACC for​ DMI?

​ (Round to two decimal​ places.)

Which do you think is​ better?  ​(Select the best​ response.)

A. The preferred choice is book​ value, which uses the original price of the debt or equity in the capital​ markets, the price at which investors currently buy or sell stocks and bonds. Book value represents the true capital structure of the firm based on the amount of capital originally invested in the firm.

B. The preferred choice is market​ value, which uses the current price of the debt or equity in the capital​ markets, the price at which investors currently buy or sell stocks and bonds. Market values are a better representation of a​ company's current capital​ structure, which would be relevant for raising new capital.

At the end of 2013, it was reported that 92% of U.S. adults owned a cell-phone. If a sample of 10 U.S. adults is selected, what is the probability that:

8 own a cell phone?

All ten own a cell phone?

At least 8 own a cell phone?

Between 6 and 8 own a cell phone (including 6 and 8)?