1. On January 1, 2020, Scottsdale Company issued its 12% bonds in the face amount of $3,000,000, which mature on January 1, 2032. The bonds were issued for $$3,408,818 to yield 10%. Scottsdale uses the effective-interest method of amortizing bond premium. Interest is payable annually on December 31. The 12/31/23 Premium on Bond Payable balance is:

Arroyo Company issued $600,000, 10-year, 6% bonds at 103.

Instructions

(a)  

Prepare the journal entry to record the sale of these bonds on January 1, 2017.

(b)  

Suppose the remaining Premium on Bonds Payable was $10,800 on December 31, 2020. Show the balance sheet presentation on this date.

(c)  

Explain why the bonds sold at a price above the face amount.

E11.24 (LO5) (Revaluation Accounting) Croatia Company purchased land in

2019 for $300,000. The land

'

s fair value at the end of 2019 is $320,000; at

the end of 2020, $280,000; and at the end of 2021, $305,000. Assume that

Croatia chooses to use revaluation accounting to account for its land.

Instructions

Prepare the journal entries to record the land using revaluation accounting for

2019

–

2021.

Exercise 2: Inventory-Related Calculations in a Periodic System

The Travalent Company uses the periodic inventory system.  The following information is taken from their records. Certain data have been intentionally omitted.

Required: Compute the missing numbers.

#1. ALLOWANCE METHOD

The balance sheet of Starsky Company at December 31, 2019, includes the following:

Accounts receivable $ 182,100

Less: Allowance for doubtful accounts 17,300

= $164,800

Transactions in 2020 include the following:

1. Accounts receivable of $78,000 were collected

2. Accounts receivable of $60,000 were collected, in which 2% sales discounts were granted.

3. A $5,300 customer account that was written off the books as worthless in 2019 was reinstated.

4. The $5,300 was received from the customer.

5. Customer accounts of $17,500 were written off during the year.

6. At year-end, Allowance for Doubtful Accounts was estimated to need a balance of $20,000. This estimate is based on an analysis of aged accounts receivable.

Instructions: Journalize the above transactions.

Problem 6-15B Retail inventory method LO6
CHECK FIGURE: 2. Loss at cost = $2,040.27
The records of The Wilke Co. provided the following information for the year ended December 31, 2020:

At Cost At Retail
January 1 beginning inventory ......................... $ 40,835 $ 57,305
Purchases ............................................................... 251,945 383,530
Purchase returns .................................................. 5,370 7,665
Sales ........................................................................ 393,060
Sales returns ......................................................... 2,240

Required
1. Prepare an estimate of the company’s year-end inventory by the retail method. Round all calculations to
two decimal places.
2. Under the assumption the company took a year-end physical inventory at marked selling prices that totalled
$39,275, prepare a schedule showing the store’s loss from theft or other causes at cost and at retail.

Balance Sheet

Assets: 12/31/19

Current Assets:

Cash $3,000.00

Accounts Receivable 1,250.00

Prepaid Expenses $100.00

Total Current Assets $4,350.00

Non-Current Assets:

Property, Plant, and Equipment

Land $10,000.00

Buildings 25,000.00

Equipment 15,000.00

Accumulated Depreciation $(12,000.00)

Total Property, Plant, and Equipment $38,000.00

Total Assets $42,350.00

Liabilities:

Current Liabilities

Accounts Payable $100.00

Accrued Expense 150.00

Salary and Wages Payable -

Notes Payable -

Unearned Revenue $1,500.00

Total Liabilities $1,750.00

Shareholder's Equity

Common Stock - $1 par (See Note Below) $15,000.00

Retained Earnings $25,600.00

Total Equity $40,600.00

Total Liabilities and Equity $42,350.00

Transactions during January 2020:

1. On January 2, 2020, ACC executed a 3 month- 6% promissory note for $10,000.00 in favor of its

bank, Cheatem Trust Company, Inc. for working capital purposes.

7. Depreciation expense for the month of January was $1,000.00

8. January service revenue for the Company is $21,000.00. All revenues are recorded as "on account."

9. ACC reviewed its work product for January and determined that it had performed $500.00 of the

services required that were being accounted for as unearned revenue in addition to revenues

described in transaction 8.

10. ACC recorded interest expense associated with the Note Payable described in transaction 1.

NOTE: Other events possibly having an effect on the company:

At the end of January, the Board of Directors voted to shut down and liquidate a component of the

company's operations. This represents a strategic shift in their operations. The component experienced

a 2,100 loss during January. This was partially offset by a $1,200 gain on the disposition of the assets.

Both of these transactions are net of tax and have already been appropriately reflected in the

Retained Earnings balance shown on the December 31, 2019 Balance Sheet.

Note 14 of ACC's financial statements for the year ended 12/31/19 indicates the company's

effective tax rate to be 25%.

The company's common stock account includes 100,000 shares authorized, 1,000 shares issued

and outstanding.

Required:

On separate sheets of paper, please:

Prepare the appropriate journal entries associated with the above transactions. It is not necessary to

prepare journal entries associated with the discontinued component.

Prepare a "T" account depiction of the Company's General Ledger activity for the

month of January 2020.

Prepare ACC's Income Statement for the month ending January 31, 2020

Prepare ACC's Balance Sheet at January 31, 2020.

1. Under GAAP, the consideration transferred in a business combination would include all of the following, except:
   1. Shares issued and given to the former owners of the acquired company
   2. Contingent consideration to be given to the former owners depending on the future earnings of that company
   3. Liabilities assumed by the purchaser
   4. Legal and accounting fees paid by the acquirer
2. When Large bought Tiny, Large issued some new shares of Large stock and gave them to the former owners of Tiny. In connection with issuing the stock, Large had to pay $25,000 of stock issuance fees. Large had to credit cash $25,000. What should it debit?
   1. Additional paid-in capital
   2. Stock issuance fees expense
   3. Investment in Tiny
   4. Goodwill
3. True/False: Under GAAP, consolidated financial statements should have the same balance sheet and income statement data as a company would have shown if it dissolved its subsidiaries into the parent company, instead of keeping them in separate legal existence.

Now that you know all about both Fiscal and Monetary policies, who do you think could do a better job in rescuing us from a recession? Justify your decision!

Below are the jersey numbers of 11 players randomly selected from a football team. Find the? range, variance, and standard deviation for the given sample data. What do the results tell? us?

68,26,22,18,27,94,39,35,86,69,43