Problem 5-1

Presented below is a list of accounts in alphabetical order.

Prepare a classified balance sheet in good form. (No monetary amounts are to be shown.) (List Current Assets in order of liquidity. List Property, Plant and Equipment in order of Land, Building and Equipment. Enter account name only and do not provide the descriptive information provided in the question.)

Merrill Lynch is a large securities firm which uses the accrual method of accounting in accordance with Generally Accepted Accounting Principles. Merrill Lynch executes stock trades and performs settlement functions. Settlement functions include recording the sale and confirming it with the customer. Trades made on December 28, 2017, until the end of the month are not settled until mid-January of 2018. Merrill Lynch netted $100,000,000 of sales commissions from these trades in late December 2017. Since the security is not credited to the customer’s account until settlement date, Merrill Lynch wants to report the Revenue on their 2017 Income Statement but wants to declare the income on the tax return for 2018 because it coincides with the settlement dates in 2018. Taxpayer does not receive the money until January 2018. Draft a written memo to the client addressing the following research issues: Merrill Lynch contacts you for guidance on this issue. Should the revenue be reported in 2017 or 2018 for financial statement reporting purposes? Why? Please site the specific guidance you followed in response to your research question. The primary issue you should research is whether an accrual basis securities firm has gross income under sec. 451(a) on the trading date or the next year on the settlement date when all the work is performed, payment is due, and money received?

1. What is the ROA in last 5 years and the ROE in last 5 years?
2. What is theRevenue and revenue growth in last 5 years?
3. What is the Profit (net income) and profit growth in last 5 years?
4. What is the Financial leverage and financial leverage growth in last 5 years?
5. Any other financial information?

Serial Problem Business Solutions LO P2, P3

The December 31, 2017, adjusted trial balance of Business Solutions (reflecting its transactions from October through December of 2017) follows.
  

Required:
1. Record the closing entries for Business Solutionss.
2. Prepare a post-closing trial balance as of December 31, 2017

Cicchetti Corporation uses customers served as its measure of activity. The following report compares the planning budget to the actual operating results for the month of December:

Required:

Prepare the company's flexible budget performance report for December. Select each variance as favorable (F), unfavorable (U) or "None".

chapter9 1

Milano Pizza is a small neighborhood pizzeria that has a small area for in-store dining as well as offering take-out and free home delivery services. The pizzeria’s owner has determined that the shop has two major cost drivers—the number of pizzas sold and the number of deliveries made.

The pizzeria’s cost formulas appear below:

In November, the pizzeria budgeted for 1,620 pizzas at an average selling price of $17 per pizza and for 240 deliveries.

Data concerning the pizzeria’s actual results in November appear below:

Required:

1. Compute the revenue and spending variances for the pizzeria for November. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

Hamilton General Hospital needs a new MRI machine due to increasing volume of outpatient MRI orders and the state of the existing machine. The current machine is over 10 years old and breaks down on a regular basis, causing significant inconvenience to patients while at the same time, decreasing revenues and increasing costs The new MRI costs $1,100,000 and its useful life is 5 years with a $100,000 salvage value. It is anticipated that it will generate $250,000 of revenue per year for each of the next 5 years. Given the above information: a) Calculate the depreciation expense per year using the straight line method. b) Compute the present value of the yearly cash flows (all 5 years) using a 4% interest (or discount) rate. Hint-use the present value annuity table in your text. Use only the revenue that is projected for each year (ignore depreciation). c) Subtract the original cost of the MRI machine from your answer in b. d) Determine if the project will generate enough cash for the total 5 years to pay for the machine. Hint-just a yes or no. Explain your answer to letter d in a few short sentences. What other factors should be considered before finalizing your decision? e) f) You must show your work in order to receive partial credit if your answers are not correct.

I need help with D, E, F.

Fiberia Accessories, a clothing retailer, is planning to introduce a new line of sweaters as part of the winter collection for $65 with an inventory of 1500. The main selling season is 60 days between November and December. The store then sells the remaining units in a clearance sale at 65 percent discount. Out of the 60 main retail days, Fiberia sells the sweaters at full retail price for only 45 days, while giving a discount of 25 percent for the remaining 15 days. The demand functions a, and b are given as 79.5 and 1.1 respectively.

1. What is the average daily sale during the full retail sales period?

On January 1, 2018, Ithaca Corp. purchases Cortland Inc. bonds that have a face value of $150,000. The Cortland bonds have a stated interest rate of 6%. Interest is paid semiannually on June 30 and December 31, and the bonds mature in 10 years. For bonds of similar risk and maturity, the market yield on particular dates is as follows (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.):

Required:
1. Calculate the price Ithaca would have paid for the Cortland bonds on January 1, 2018 (ignoring brokerage fees).
2. Prepare all appropriate journal entries related to the bond investment during 2018, assuming Ithaca accounts for the bonds as a held-to-maturity investment. Ithaca calculates interest revenue at the effective interest rate as of the date it purchased the bonds.
3. Prepare all appropriate journal entries related to the bond investment during 2018, assuming that Ithaca chose the fair value option when the bonds were purchased, and that Ithaca determines fair value of the bonds semiannually. Ithaca calculates interest revenue at the effective interest rate as of the date it purchased the bonds.

15 a) If a company fails to make an adjusting entry to record supplies expense, then

a. owner's equity will be understated.

b.   expense will be understated.

c. assets will be understated.

d.   net income will be understated.

b. On June 1, during its first month of operations, Brodeur Spa purchased supplies for $4,200 and debited the supplies account for that amount. At June 30, an inventory of supplies showed

$1,000 of supplies on hand. What adjusting journal entry should be made for June?

c1. Trinity College sold season tickets for the 2018 football season for $320,000. A total of 8 games will be played during September, October and November. In September, three games were played. In October, three games were played. What is the balance in Unearned Ticket

Revenue as of October 31 (after adjusting entries has been made)?

c2. Please write the journal entries for the following transactions for Rindler Company for July

2018, the company’s first month of operations. You may omit explanations for the transactions.

a. Rich Rindler invested $38,000 cash to start an appliance repair business.

b.   Hired an employee to be paid $500 per week, starting tomorrow.

c. Paid two years’ rent in advance, $10,800.

d.   Paid the worker’s weekly wage.

e. Recorded service revenue earned and received for the week, $2,900.