Income statement and balance sheet data for Great Adventures, Inc., are provided below.
|
GREAT ADVENTURES, INC. Income Statement For the Year Ended December 31, 2020 |
||
| Revenues: | ||
| Service revenue (clinic, racing, TEAM) | $561,000 | |
| Sales revenue (MU watches) | 136,000 | |
| Total revenues | $697,000 | |
| Expenses: | ||
| Cost of goods sold (MU watches) | 79,000 | |
| Operating expenses | 305,176 | |
| Depreciation expense | 59,000 | |
| Interest expense | 30,624 | |
| Income tax expense | 62,400 | |
| Total expenses | 536,200 | |
| Net income | $160,800 | |
|
GREAT ADVENTURES, INC. Balance Sheets December 31, 2020 and 2019 |
|||||||
| 2020 | 2019 | Increase (I) or Decrease (D) | |||||
| Assets | |||||||
| Current assets: | |||||||
| Cash | $ | 319,498 | $ | 147,000 | 172,498 | (I) | |
| Accounts receivable | 58,500 | 44,000 | 14,500 | (I) | |||
| Inventory | 18,350 | 14,900 | 3,450 | (I) | |||
| Other current assets | 14,350 | 11,900 | 2,450 | (I) | |||
| Long-term assets: | |||||||
| Land | 600,000 | 0 | 600,000 | (I) | |||
| Buildings | 1,000,000 | 0 | 1,000,000 | (I) | |||
| Equipment | 74,000 | 74,000 | |||||
| Less: Accumulated depreciation | (86,500) | (27,500) | 59,000 | (I) | |||
| Total assets | $ | 1,998,198 | $ | 264,300 | |||
| Liabilities and Stockholders' Equity | |||||||
| Current liabilities: | |||||||
| Accounts payable | $13,350 | $9,900 | 3,450 | (I) | |||
| Interest payable | 840 | 840 | |||||
| Income tax payable | 62,400 | 42,500 | 19,900 | (I) | |||
| Long-term liabilities: | |||||||
| Notes payable | 586,748 | 34,500 | 552,248 | (I) | |||
| Stockholders' equity: | |||||||
| Common stock | 120,000 | 20,000 | 100,000 | (I) | |||
| Paid-in capital | 1,105,500 | 0 | 1,105,500 | (I) | |||
| Retained earnings | 202,860 | 156,560 | 46,300 | (I) | |||
| Treasury stock | (93,500) | 0 | (93,500) | (I) | |||
| Total liabilities and stockholders' equity | $ | 1,998,198 | $ | 264,300 | |||
|
As you can tell from the financial statements, 2020 was an especially busy year. Tony and Suzie were able to use the $1.2 million received from the issuance of 100,000 shares of stock to hire a construction company for $1 million to build the cabins, dining facilities, ropes course, and the outdoor swimming pool. They even put in a baby pool to celebrate the birth of their firstborn son, little Venture Matheson. Assume all sales and services are on credit. |
|||||||
Calculate the following risk ratios for 2020. (Use 365 days in a year. Round your intermediate calculations and final answers to 2 decimal places.)
|
2. Calculate the following profitability ratios for 2020. (Round your answers to 2 decimal places.)
|
In: Accounting
Which of the following is an example of moral hazard?
1. a buyer who makes a large raise in a bid at an auction to discourage other bidders. 2. a doctor who performs a large number of in-office tests and is paid per test. 3. an elderly couple who elect a generous medical insurance policy 4. a board of direcgtors that is trying to refine the compensation system for its CEO
In: Economics
1. At the beginning of the COVID-19 pandemic, interest rates declined at the central banks but one bank did not pass on the decrease to borrowers citing funding difficulty and shareholder returns as the main reasons. It turns out the CEO of that bank owns 5% of the shares of the bank. Do you think there is an ethical issue surrounding this decision? What might change the CEO’s mind? (200 words)
In: Finance
research Microsoft's progress in this area, write one or two sentences for each of the bullet points below
In: Computer Science
In 2022, Draper Company discovered errors made in 2019-2021, its first three years of operation.
|
2021 |
2020 |
2019 |
|
|
Items not recognized: |
|||
|
Prepaid expenses |
$1,300 |
$900 |
$550 |
|
Accrued expenses |
950 |
700 |
800 |
|
Other information: |
|||
|
Reported net income |
$23,000 |
$25,000 |
$20,000 |
|
Dividends declared and paid |
4,100 |
2,600 |
5,000 |
|
Common stock and additional paid in capital at 12/31 |
22,000 |
17,000 |
15,000 |
Corrected 12/31/21 Total Equity will be:
Select one:
a. $78,450
b. $110,300
c. $77,950
d. $110,650
e. $78,650
In: Accounting
The Quick Pass CPA Review Co., charges $10,000 for its review classes, and offers a money-back guarantee, if the student does not pass on the first try. The company collected $500,000 from students in its first class, which was held from July through October of 2019. Since the grades of the students on the November test will not be known until January 2020, the owner of Quick Pass intends to not recognize any income until the number of students who actually passed is known, so that he can report income and refund in the same year. What is your advice to your client?
In: Accounting
It is August 2020. You are calculating the monthly paycheck, including employee withholding, and employer payroll related expenses for Bonnie Bigwig. Her pay through July is $110,000. Her August gross pay $20,000. Her Federal income tax withholding is at the 25% rate, her state withholding is at the 5% rate. (Ignore local income tax.) Her health insurance (all paid by the company) is $1,500 / month. She contributes $1,000 / month to the United Way.
Give the journal entry to pay Bonnie. Also, give the journal entry to record the employer payroll related expenses.
In: Finance
| The Total Liabilities for Ozium Corporation as of the | ||||||||||
| Balance Sheet date of December 31, 2020 are: | ||||||||||
| Salaries & Wages Payable | 5,500 | |||||||||
| Long-Term Debt | 300,000 | ($250,000 is due for payment in 2021) | ||||||||
| Notes Payable | 750,000 | ($250,000 is due for payment after December 31, 2021) | ||||||||
| Unearned Revenue | 16,500 | |||||||||
| Accounts Payable | 25,000 | |||||||||
| In addition, the company is involve in two lawsuits | ||||||||||
| that are expected to be closed by March 31, 2021. | ||||||||||
| The first lawsuit is for $150,000 and the lawyers | ||||||||||
| predicts this to be reasonable possible. The other | ||||||||||
| lawsuit is for $350,000 and the lawyer predicts this | ||||||||||
| to be Probable and can be reasonably estimated. | ||||||||||
| What is the total Current Liabilities? | ||||||||||
In: Accounting
In 2021, the Westgate Construction company entered into a contract to construct a road for Santa Clara County for $10,000,000. The road was completed in 2023. Information related to the contract is as follows.
| 2018 | 2019 | 2020 | |||||||
| Cost incurred during the year | $ | 2,044,000 | $ | 2,628,000 | $ | 2,890,800 | |||
| Estimated costs to complete as of year-end | 5,256,000 | 2,628,000 | 0 | ||||||
| Billings during the year | 2,170,000 | 2,502,000 | 5,328,000 | ||||||
| Cash collections during the year | 1,885,000 | 2,600,000 | 5,515,000 | ||||||
3. Complete the information required below to prepare a partial balance sheet for 2021 and 3022 showing any items related to the contract. ( Do not round intermediate calculation)
In: Accounting
On January 1, 2016, Gates Corporation issued $100,000 of 5-year bonds due December 31, 2020, for $103,604.79 minus debt issuance costs of $3,000. The bonds carry a stated rate of interest of 13% payable annually on December 31 and were issued to yield 12%. The company uses the effective interest method of amortization to amortize any discounts or premiums and the straight-line method to amortize the debt issuance costs.
Required:
| Prepare the journal entries to record the issuance of the bonds, all the interest payments, premium amortizations, debt issuance cost amortizations, and the repayment of the bonds. |
In: Accounting