On July 1, 2020, Riverbed Corporation purchased Young Company by paying $256,900 cash and issuing a $132,000 note payable to Steve Young. At July 1, 2020, the balance sheet of Young Company was as follows.
|
Cash |
$51,400 |
Accounts payable |
$204,000 |
|||
|---|---|---|---|---|---|---|
|
Accounts receivable |
91,500 |
Stockholders’ equity |
241,100 |
|||
|
Inventory |
105,000 |
$445,100 |
||||
|
Land |
40,400 |
|||||
|
Buildings (net) |
75,300 |
|||||
|
Equipment (net) |
69,500 |
|||||
|
Trademarks |
12,000 |
|||||
|
$445,100 |
The recorded amounts all approximate current values except for land
(fair value of $62,200), inventory (fair value of $126,400), and
trademarks (fair value of $15,600).
(a)
(a)
Correct answer iconYour answer is correct.
Prepare the July 1 entry for Riverbed Corporation to record the purchase. (Credit account titles are automatically indented when 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.)
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Account Titles and Explanation |
Debit |
Credit |
|---|---|---|
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enter an account titleenter an account title |
enter a debit amountenter a debit amount |
enter a credit amountenter a credit amount |
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enter an account titleenter an account title |
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enter an account titleenter an account title |
enter a debit amountenter a debit amount |
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enter an account titleenter an account title |
enter a debit amountenter a debit amount |
enter a credit amountenter a credit amount |
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enter an account titleenter an account title |
enter a debit amountenter a debit amount |
enter a credit amountenter a credit amount |
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enter an account titleenter an account title |
enter a debit amountenter a debit amount |
enter a credit amountenter a credit amount |
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enter an account titleenter an account title |
enter a debit amountenter a debit amount |
enter a credit amountenter a credit amount |
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enter an account titleenter an account title |
enter a debit amountenter a debit amount |
enter a credit amountenter a credit amount |
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enter an account titleenter an account title |
enter a debit amountenter a debit amount |
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enter an account titleenter an account title |
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enter an account titleenter an account title |
enter a debit amountenter a debit amount |
enter a credit amountenter a credit amount |
eTextbook and Media
List of Accounts
Attempts: 1 of 3 used
(b)
(b)
Prepare the December 31 entry for Riverbed Corporation to record amortization of intangibles. The trademark has an estimated useful life of 4 years with a residual value of $3,320. (Credit account titles are automatically indented when 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.)
|
Account Titles and Explanation |
Debit |
Credit |
|---|---|---|
|
enter an account titleenter an account title |
enter a debit amountenter a debit amount |
enter a credit amountenter a credit amount |
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enter an account titleenter an account title |
enter a debit amountenter a debit amount |
enter a credit amountenter a credit amount |
In: Accounting
Presented below is information related to equipment owned by Swifty Company at December 31, 2020.
| Cost | $9,270,000 | |
| Accumulated depreciation to date | 1,030,000 | |
| Expected future net cash flows | 7,210,000 | |
| Fair value | 4,944,000 |
Swifty intends to dispose of the equipment in the coming year. It
is expected that the cost of disposal will be $20,600. As of
December 31, 2020, the equipment has a remaining useful life of 4
years.
Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2020. (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
| Date |
Account Titles and Explanation |
Debit |
Credit |
|---|---|---|---|
|
Dec. 31 |
enter an account title to record the transaction on December 31, 2017 |
enter a debit amount |
enter a credit amount |
|
enter an account title to record the transaction on December 31, 2017 |
enter a debit amount |
enter a credit amount |
eTextbook and Media
List of Accounts
Prepare the journal entry (if any) to record depreciation expense for 2021. (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
|
Account Titles and Explanation |
Debit |
Credit |
|---|---|---|
|
enter an account title |
enter a debit amount |
enter a credit amount |
|
enter an account title |
enter a debit amount |
enter a credit amount |
eTextbook and Media
List of Accounts
The asset was not sold by December 31, 2021. The fair value of the equipment on that date is $5,459,000. Prepare the journal entry (if any) necessary to record this increase in fair value. It is expected that the cost of disposal is still $20,600. (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
| Date |
Account Titles and Explanation |
Debit |
Credit |
|---|---|---|---|
|
Dec. 31 |
enter an account title to record the transaction on December 31, 2018 |
enter a debit amount |
enter a credit amount |
|
enter an account title to record the transaction on December 31, 2018 |
enter a debit amount |
enter a credit amount |
In: Accounting
Blossom Inc., a greeting card company, had the following
statements prepared as of December 31, 2020.
|
BLOSSOM INC. |
||||||
|---|---|---|---|---|---|---|
|
12/31/20 |
12/31/19 |
|||||
|
Cash |
$6,000 |
$6,900 |
||||
|
Accounts receivable |
61,800 |
50,900 |
||||
|
Short-term debt investments (available-for-sale) |
35,200 |
17,900 |
||||
|
Inventory |
40,300 |
60,600 |
||||
|
Prepaid rent |
5,100 |
3,900 |
||||
|
Equipment |
155,100 |
131,300 |
||||
|
Accumulated depreciation—equipment |
(35,200 |
) |
(24,800 |
) |
||
|
Copyrights |
45,800 |
50,400 |
||||
|
Total assets |
$314,100 |
$297,100 |
||||
|
Accounts payable |
$45,600 |
$40,000 |
||||
|
Income taxes payable |
4,000 |
6,000 |
||||
|
Salaries and wages payable |
8,100 |
4,000 |
||||
|
Short-term loans payable |
7,900 |
10,000 |
||||
|
Long-term loans payable |
60,500 |
68,900 |
||||
|
Common stock, $10 par |
100,000 |
100,000 |
||||
|
Contributed capital, common stock |
30,000 |
30,000 |
||||
|
Retained earnings |
58,000 |
38,200 |
||||
|
Total liabilities & stockholders’ equity |
$314,100 |
$297,100 |
||||
|
BLOSSOM INC. |
||||
|---|---|---|---|---|
|
Sales revenue |
$336,275 |
|||
|
Cost of goods sold |
173,300 |
|||
|
Gross profit |
162,975 |
|||
|
Operating expenses |
121,200 |
|||
|
Operating income |
41,775 |
|||
|
Interest expense |
$11,400 |
|||
|
Gain on sale of equipment |
2,000 |
9,400 |
||
|
Income before tax |
32,375 |
|||
|
Income tax expense |
6,475 |
|||
|
Net income |
$25,900 |
|||
Additional information:
| 1. | Dividends in the amount of $6,100 were declared and paid during 2020. | |
| 2. | Depreciation expense and amortization expense are included in operating expenses. | |
| 3. | No unrealized gains or losses have occurred on the investments during the year. | |
| 4. | Equipment that had a cost of $19,900 and was 70% depreciated was sold during 2020. |
Prepare a statement of cash flows using the indirect method.
(Show amounts that decrease cash flow with either a -
sign e.g. -15,000 or in parenthesis e.g.
(15,000).)
In: Accounting
On January 1, 2020, Buffalo Company purchased 10% bonds having a maturity value of $420,000, for $453,537.42. The bonds provide the bondholders with a 8% yield. They are dated January 1, 2020, and mature January 1, 2025, with interest received on January 1 of each year. Buffalo Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified in the held-to-maturity category.
Prepare the journal entry at the date of the bond purchase. (Enter answers to 2 decimal places, e.g. 2,525.25. Credit account titles are automatically indented when 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.)
|
Date |
Account Titles and Explanation |
Debit |
Credit |
|---|---|---|---|
|
Jan. 1, 2020 |
enter an account title to record the transaction on January 1, 2020 |
enter a debit amount |
enter a credit amount |
|
enter an account title to record the transaction on January 1, 2020 |
enter a debit amount |
enter a credit amount |
Prepare a bond amortization schedule. (Round answers to
2 decimal places, e.g. 2,525.25.)
|
Schedule of Interest Revenue and Bond Premium
Amortization |
|||||||||
|---|---|---|---|---|---|---|---|---|---|
|
|
Cash |
Interest |
Premium |
Carrying Amount |
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|
1/1/20 |
$enter a dollar amount rounded to 2 decimal places |
$enter a dollar amount rounded to 2 decimal places |
$enter a dollar amount rounded to 2 decimal places |
$enter a dollar amount rounded to 2 decimal places |
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|
1/1/21 |
enter a dollar amount rounded to 2 decimal places |
enter a dollar amount rounded to 2 decimal places |
enter a dollar amount rounded to 2 decimal places |
enter a dollar amount rounded to 2 decimal places |
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1/1/22 |
enter a dollar amount rounded to 2 decimal places |
enter a dollar amount rounded to 2 decimal places |
enter a dollar amount rounded to 2 decimal places |
enter a dollar amount rounded to 2 decimal places |
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1/1/23 |
enter a dollar amount rounded to 2 decimal places |
enter a dollar amount rounded to 2 decimal places |
enter a dollar amount rounded to 2 decimal places |
enter a dollar amount rounded to 2 decimal places |
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1/1/24 |
enter a dollar amount rounded to 2 decimal places |
enter a dollar amount rounded to 2 decimal places |
enter a dollar amount rounded to 2 decimal places |
enter a dollar amount rounded to 2 decimal places |
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|
1/1/25 |
enter a dollar amount rounded to 2 decimal places |
enter a dollar amount rounded to 2 decimal places |
enter a dollar amount rounded to 2 decimal places |
enter a dollar amount rounded to 2 decimal places |
|||||
Prepare the journal entry to record the interest revenue and the
amortization at December 31, 2020. (Round answers to 2
decimal places, e.g. 2,525.25. Credit account titles are
automatically indented when 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.)
|
Date |
Account Titles and Explanation |
Debit |
Credit |
|---|---|---|---|
|
Dec. 31, 2020 |
enter an account title to record the transaction on December 31, 2020 |
enter a debit amount |
enter a credit amount |
|
enter an account title to record the transaction on December 31, 2020 |
enter a debit amount |
enter a credit amount |
|
|
enter an account title to record the transaction on December 31, 2020 |
enter a debit amount |
enter a credit amount |
Prepare the journal entry to record the interest revenue and the
amortization at December 31, 2021. (Round answers to 2
decimal places, e.g. 2,525.25. Credit account titles are
automatically indented when 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.)
|
Date |
Account Titles and Explanation |
Debit |
Credit |
|---|---|---|---|
|
Dec. 31, 2021 |
enter an account title to record the transaction on December 31, 2021 |
enter a debit amount |
enter a credit amount |
|
enter an account title to record the transaction on December 31, 2021 |
enter a debit amount |
enter a credit amount |
|
|
enter an account title to record the transaction on December 31, 2021 |
In: Accounting
Grouper Leasing Company agrees to lease equipment to Monty Corporation on January 1, 2020. The following information relates to the lease agreement.
1. The term of the lease is 7 years with no renewal option, and the machinery has an estimated economic life of 9 years.
2. The cost of the machinery is $500,000, and the fair value of the asset on January 1, 2020, is $659,000.
3. At the end of the lease term, the asset reverts to the lessor and has a guaranteed residual value of $60,000. Monty estimates that the expected residual value at the end of the lease term will be 60,000. Monty amortizes all of its leased equipment on a straight-line basis.
4. The lease agreement requires equal annual rental payments, beginning on January 1, 2020.
5. The collectibility of the lease payments is probable.
6. Grouper desires a 9% rate of return on its investments. Monty’s incremental borrowing rate is 10%, and the lessor’s implicit rate is unknown.
(Assume the accounting period ends on December 31.)
(d)
| Your answer is partially correct. Try again. | |
Prepare the journal entries Monty would make in 2020 and 2021 related to the lease arrangement. (Credit account titles are automatically indented when 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. Round answers to 0 decimal places e.g. 58,972. Record journal entries in the order presented in the problem.)
|
Date |
Account Titles and Explanation |
Debit |
Credit |
|
1/1/2012/31/201/1/2112/31/21 |
|||
|
(To record the lease.) |
|||
|
(To record lease payment.) |
|||
|
1/1/2012/31/201/1/2112/31/21 |
|||
|
(To record amortization.) |
|||
|
(To record interest.) |
|||
|
1/1/2012/31/201/1/2112/31/21 |
|||
|
1/1/2012/31/201/1/2112/31/21 |
|||
|
(To record amortization.) |
|||
|
(To record interest.) |
In: Accounting
Thomas Company had the following information related to September 2020:
1) Depreciation on the store equipment was $60,000 for the month.
2) Sales of merchandise inventory for the month of September were $1,800,000, of which $1,200,000 was paid in cash and the remaining amount sold on credit. The cost of the merchandise sold was $1,080,000.
3) The next payroll will be $144,000 and will be paid on October 12. This payroll will cover wages earned during the last week of September and the first week of October.
4) The utility bill of $72,000 for the month of September was both received and paid in early October.
5) Thomas sold a company car for a gain of $12,000 on September 22.
6) On September 3, Thomas paid $6,000 for August’s telephone bill.
7) On October 1, Thomas received the September telephone bill, which totaled $12,000. The bill will be paid in mid-October.
8) Wages paid in cash to employees during the month totaled $288,000. This amount included $60,000 paid for work done in the month of August. This amount is separate from item (3) above.
9) The company had a $120,000 note payable related to cash that was borrowed on March 1, 2010; both the interest and principal related to the note are to be paid on February 29, 2021. The interest rate on the note is 6%.
10) On September 1, Thomas paid a total of $72,000 cash for three months’ rent covering the period of September through November.
11) The company recorded its income tax liability for the month of September. Assume Thomas Company’s tax rate is 30%
Based on the information above, answer the following questions. Round all answers to the nearest dollar.
What was revenue for the month?
What was wages expense for the month?
How much was interest expense for the month?
What was operating income for the month?
What was net income for the month?
In: Accounting
BLUEBOX LIMITED has reported net income of R54 million for the 2020 financial year.
The company is considering the following divisible projects for the 2021 financial year:
|
PROJECT |
A |
B |
C |
D |
E |
|
COST RM |
40.0 |
35.0 |
50.0 |
30.0 |
10.0 |
|
NPV RM |
7 |
4.5 |
7.2 |
4.8 |
2.5 |
|
PI |
BLUEBOX Limited’s cost of capital is 12.5%.
The company has a capital budget of R75m. Its target capital structure is a debt-to-equity ratio of 66.67%.
WHAT IS THE COMBINED NPV AND IN WHICH PROJECTS MUST BE INVESTED IN.
In: Finance
On December 31, 2020, Teal Company signed a $1,022,000 note to Flint Bank. The market interest rate at that time was 11%. The stated interest rate on the note was 9%, payable annually. The note matures in 5 years. Unfortunately, because of lower sales, Teal’s financial situation worsened. On December 31, 2022, Flint Bank determined that it was probable that the company would pay back only $613,200 of the principal at maturity. However, it was considered likely that interest would continue to be paid, based on the $1,022,000 loan.
(a)
Correct answer iconYour answer is correct.
Determine the amount of cash Teal received from the loan on December 31, 2020. (Round present value factors to 5 decimal places, e.g. 0.52513 and final answer to 0 decimal places, e.g. 5,275.)
946455
Attempts: 1 of 3 used
(b)
Partially correct answer iconYour answer is partially correct.
Prepare a note amortization schedule for Flint Bank up to December 31, 2022. (Round answers to 0 decimal places, e.g. 5,275.)
|
Note Amortization Schedule |
||||||||
|---|---|---|---|---|---|---|---|---|
|
|
|
|
Increase in |
Carrying |
||||
| 12/31/20 | $enter a dollar amount | |||||||
| 12/31/21 | $enter a dollar amount | $enter a dollar amount | $enter a dollar amount | enter a dollar amount | ||||
| 12/31/22 | enter a dollar amount | enter a dollar amount | enter a dollar amount | enter a dollar amount | ||||
eTextbook and Media
Attempts: 3 of 3 used
(c)
Incorrect answer iconYour answer is incorrect.
Determine the loss on impairment that Flint Bank should recognize on December 31, 2022. (Round present value factors to 5 decimal places, e.g. 0.52500 and final answer to 0 decimal places, e.g. 5,275.)
| Loss due to impairment | $enter the Loss due to impairment in dollars |
I just need C answered
In: Accounting
On January 1, 2020, Norma Smith and Grant Wood formed a computer
sales and service company in Soapsville, Arkansas, by investing
$90,000 cash. The new company, Arkansas Sales and Service, has the
following transactions during January.
| 1. | Pays $6,000 in advance for 3 months’ rent of office, showroom, and repair space. | |
| 2. | Purchases 40 personal computers at a cost of $1,500 each, 6 graphics computers at a cost of $2,500 each, and 25 printers at a cost of $300 each, paying cash upon delivery. | |
| 3. | Sales, repair, and office employees earn $12,600 in salaries and wages during January, of which $3,000 was still payable at the end of January. | |
| 4. | Sells 30 personal computers at $2,550 each, 4 graphics computers for $3,600 each, and 15 printers for $500 each; $75,000 is received in cash in January, and $23,400 is sold on a deferred payment basis. | |
| 5. | Other operating expenses of $8,400 are incurred and paid for during January; $2,000 of incurred expenses are payable at January 31. |
Identify the items in the cash-basis financial statements that make
cash-basis accounting inconsistent with the theory underlying the
elements of financial statements.
In: Accounting
Carla Vista Company leases a building to Walsh, Inc. on January
1, 2020. The following facts pertain to the lease
agreement.
| 1. | The lease term is 4 years, with equal annual rental payments of $4,429 at the beginning of each year. | |
| 2. | Ownership does not transfer at the end of the lease term, there is no bargain purchase option, and the asset is not of a specialized nature. | |
| 3. | The building has a fair value of $17,500, a book value to Carla Vista of $10,500, and a useful life of 5 years. | |
| 4. | At the end of the lease term, Carla Vista and Walsh expect there to be an unguaranteed residual value of $2,625. | |
| 5. | Carla Vista wants to earn a return of 9% on the lease, and collectibility of the payments is probable. This rate is known by Walsh. |
(b)
Using the original facts of the lease, show the journal entries to
be made by both Carla Vista and Walsh in 2020. (For
calculation purposes, use 5 decimal places as displayed in the
factor table provided and round final answers to 0 decimal places,
e.g. 5,275. Credit account titles are automatically indented when
the amount is entered. Do not indent manually.)
In: Accounting