The stockholders’ equity accounts of Flint Company have the following balances on December 31, 2020. Common stock, $10 par, 292,000 shares issued and outstanding $2,920,000 Paid-in capital in excess of par—common stock 1,320,000 Retained earnings 5,080,000 Shares of Flint Company stock are currently selling on the Midwest Stock Exchange at $33. Prepare the appropriate journal entries for each of the following cases. (Credit account titles are automatically indented when amount is entered.
| (a) | A stock dividend of 6% is (1) declared and (2) issued. | |
|---|---|---|
| (b) | A stock dividend of 100% is (1) declared and (2) issued. | |
| (c) | A 2-for-1 stock split is (1) declared and (2) issued. |
In: Accounting
Sheffield Leasing Company agrees to lease equipment to Tamarisk 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 $483,000, and the fair value of the asset on January 1, 2020, is $757,000. | |
| 3. | At the end of the lease term, the asset reverts to the lessor and has a guaranteed residual value of $55,000. Tamarisk estimates that the expected residual value at the end of the lease term will be 55,000. Tamarisk 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. | Sheffield desires a 10% rate of return on its investments. Tamarisk’s incremental borrowing rate is 11%, and the lessor’s implicit rate is unknown. |
(Assume the accounting period ends on December 31.)
Click here to view factor tables.
Discuss the nature of this lease for both the lessee and the
lessor.
This is a _________for Tamarisk.
This is a _________ for Sheffield.
eTextbook and Media
List of Accounts
Calculate the amount of the annual rental payment required. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 58,972.)
| Annual rental payment |
$ |
eTextbook and Media
List of Accounts
Compute the value of the lease liability to the lessee. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 58,972.)
| Present value of minimum lease payments |
$ |
eTextbook and Media
List of Accounts
Prepare the journal entries Tamarisk 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
The stockholders’ equity accounts of Bridgeport Company have the
following balances on December 31, 2020.
| Common stock, $10 par, 298,000 shares issued and outstanding | $2,980,000 | |
| Paid-in capital in excess of par—common stock | 1,280,000 | |
| Retained earnings | 5,840,000 |
Shares of Bridgeport Company stock are currently selling on the
Midwest Stock Exchange at $35.
Prepare the appropriate journal entries for each of the following
cases. (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.)
| (a) | A stock dividend of 8% is (1) declared and (2) issued. | |
|---|---|---|
| (b) | A stock dividend of 100% is (1) declared and (2) issued. | |
| (c) | A 2-for-1 stock split is (1) declared and (2) issued. |
|
No. |
Account Titles and Explanation |
Debit |
Credit |
|---|---|---|---|
|
(a) (1) |
enter an account title for case A to record the declaration of stock dividends |
enter a debit amount |
enter a credit amount |
|
enter an account title for case A to record the declaration of stock dividends |
enter a debit amount |
enter a credit amount |
|
|
enter an account title for case A to record the declaration of stock dividends |
enter a debit amount |
enter a credit amount |
|
|
(a) (2) |
enter an account title for case A to record the issuance of stock dividends |
enter a debit amount |
enter a credit amount |
|
enter an account title for case A to record the issuance of stock dividends |
enter a debit amount |
enter a credit amount |
|
|
(b) (1) |
enter an account title for case B to record the declaration of stock dividends |
enter a debit amount |
enter a credit amount |
|
enter an account title for case B to record the declaration of stock dividends |
enter a debit amount |
enter a credit amount |
|
|
(b) (2) |
enter an account title for case B to record the issuance of stock dividends |
enter a debit amount |
enter a credit amount |
|
enter an account title for case B to record the issuance of stock dividends |
enter a debit amount |
enter a credit amount |
|
|
(c) (1) |
enter an account title for case C to record the declaration of the stock split |
enter a debit amount |
enter a credit amount |
|
enter an account title for case C to record the declaration of the stock split |
enter a debit amount |
enter a credit amount |
|
|
(c) (2) |
enter an account title for case C to record the issuance of the stock split |
enter a debit amount |
enter a credit amount |
|
enter an account title for case C to record the issuance of the stock split |
enter a debit amount |
enter a credit amount |
In: Accounting
On January 1, 2020, Sarasota Company purchased 8% bonds having a maturity value of $280,000, for $303,589.66. The bonds provide the bondholders with a 6% yield. They are dated January 1, 2020, and mature January 1, 2025, with interest received on January 1 of each year. Sarasota 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 |
|||||
|
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 |
|||||
|
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 |
|||||
|
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 |
|||||
|
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 |
|||||
|
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 |
|||||
|
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 |
enter a debit amount |
enter a credit amount |
In: Accounting
On January 1, 2020, Sheffield Company purchased 11% bonds,
having a maturity value of $289,000 for $311,481.74. The bonds
provide the bondholders with a 9% yield. They are dated January 1,
2020, and mature January 1, 2025, with interest received on January
1 of each year. Sheffield Company uses the effective-interest
method to allocate unamortized discount or premium. The bonds are
classified as available-for-sale category. The fair value of the
bonds at December 31 of each year-end is as follows.
|
2020 |
$309,400 |
2023 |
$299,100 | |||
|---|---|---|---|---|---|---|
|
2021 |
$297,900 |
2024 |
$289,000 | |||
|
2022 |
$296,900 |
| (a) | Prepare the journal entry at the date of the bond purchase. | |
|---|---|---|
| (b) | Prepare the journal entries to record the interest revenue and recognition of fair value for 2020. | |
| (c) | Prepare the journal entry to record the recognition of fair value for 2021. |
|
No. |
Date |
Account Titles and Explanation |
Debit |
Credit |
|---|---|---|---|---|
|
(a) |
choose a transaction date
Jan. 1, 2020Dec. 31, 2020Dec. 31, 2021 |
enter an account title to record transaction A | enter a debit amount | enter a credit amount |
| enter an account title to record transaction A | enter a debit amount | enter a credit amount | ||
|
(b) |
choose a transaction date
Jan. 1, 2020Dec. 31, 2020Dec. 31, 2021 |
enter an account title to record interest received | enter a debit amount | enter a credit amount |
| enter an account title to record interest received | enter a debit amount | enter a credit amount | ||
| enter an account title to record interest received | enter a debit amount | enter a credit amount | ||
|
(To record interest received) |
||||
| enter an account title to record fair value adjustment | enter a debit amount | enter a credit amount | ||
| enter an account title to record fair value adjustment | enter a debit amount | enter a credit amount | ||
|
(To record fair value adjustment) |
||||
|
(c) |
choose a transaction date
Jan. 1, 2020Dec. 31, 2020Dec. 31, 2021 |
enter an account title to record transaction C | enter a debit amount | enter a credit amount |
| enter an account title to record transaction C | enter a debit amount | enter a credit amount |
In: Accounting
|
Sunnry Day Manufacturing Company has just started operation on September 1, 2020. The following are the transactions for the month of September.
|
||||||||||||||||||||||||||||||||||||
|
2. Prepare summary of accounts. |
| 3. Prepare the cost of each job. |
In: Accounting
Jack Tar, CFO of Sheetbend & Halyard, Inc., opened the company confidential envelope. It contained a draft of a competitive bid for a contract to supply duffel canvas to the Canadian Armed Forces. The cover memo from Sheetbend’s CEO asked Mr. Tar to review the bid before it was submitted. The bid and its supporting documents had been prepared by Sheetbend’s sales staff. It called for Sheetbend to supply 100,000 yards of duffel canvas per year for 5 years. The proposed selling price was fixed at $30 per yard.
The cost of goods will increase for this this project is 70% in the first year followed by 73%, 76%, 78.74% and 82% in years 2 through 5.Company tax rate is 35% Mr. Tar was not usually involved in sales, but this bid was unusual in at least two respects. First, if accepted by the forces, it would commit Sheetbend to a fixed-price, long-term contract. Second, producing the duffel canvas would require an investment of $1.5 million to purchase machinery and to refurbish Sheetbend’s plant in Saint John, New Brunswick. Mr. Tar set to work and by the end of the week had collected the following facts and assumptions:
• The plant in Saint John was built in the early 1900s and is now idle. The plant was fully depreciated on Sheetbend’s books, except for the purchase cost of the land (in 1947) of $10,000. • Now that the land was valuable shorefront property, Mr. Tar thought the land and the idle plant could be sold, immediately or in the future, for $600,000.
• Refurbishing the plant would cost $500,000. This investment would be depreciated for tax purposes in an asset class that has a CCA rate of 5%. • The new machinery would cost $1 million. This investment could be depreciated in an asset class that has a CCA rate of 30%.
• Working capital requirement is 10% of sales • The refurbished plant and new machinery would last for many years. However, the remaining market for duffel canvas was small, and it was not clear that additional orders could be obtained once the Forces contract was finished. The machinery was custom-built and could be used only for duffel canvas. Its second-hand value at the end of 5 years was probably zero.
1) Armed with this information, construct a spreadsheet/table to calculate the NPV of the duffel canvas project, assuming that Sheetbend’s bid would be accepted by the Forces. Should Mr. Tar recommend submitting the bid to the Forces at the proposed price of $30 per yard? The discount rate for this project is 12%.
2) He had just finished debugging the spreadsheet when another confidential envelope arrived from Sheetbend’s CEO. It contained a firm offer from a New Brunswick real estate developer to purchase Sheetbend’s Saint John land and plant for $1.5 million in cash. Which offer would you except 5 marks
Show all calculations and rationale . Use the Cheat Sheet NPV Analysis as a template for this analysis Hint Think of the three areas that have to be examined
1. Cash flow from investments in plant and equipment – capital investment.
2. Cash flow from investment in working capital 3. Cash flow from operations
In: Finance
Forcing local and expatriate workers in Oman to go on unpaid leave during the current COVID-19 situation to avoid paying them their salaries is a violation, the General Federation of Oman Workers has said.
The federation said so after receiving 30 reports of violations of workers’ rights in just five days. These violations concerned the deduction of wages, forcing workers to leave on unpaid vacation, and companies failing to reduce the number of employees present at a place of work.
The federation said in a statement, "The number of violations observed is constantly increasing and does deal with a number of humanitarian aspects of the expatriate workforce, some of which are related to the minimum requirements for living, such as the availability of adequate housing, food and the payment of wages."
In addition to the above, the General Federation of Oman Workers observed that the days workers spent at home under quarantine were being deducted from those allocated towards their annual leave, a practice that also constituted a violation.
“Private sector institutions need to exert more effort to protect the national and expatriate workforce and commit to paying their wages, as well as ensure the availability of the necessary health standards at their workplace and residences,” said the GFOW. “There is the need to make them aware of the precautionary measures issued by the competent authorities.”
“The federation will continue to monitor violations of the rights of the national and expatriate workforce in the private sector, and those violations will be dealt with in coordination with the competent authorities," added the organization.
Source: Times of Oman, 12April 2020.
Accessed from: https://timesofoman.com/article/3013669/oman/government/forcing-workers-to-takeunpaid-leave-considered-a-violation
REQUIRED: If you were a Costing manager of a private company, what strategy would you adopt for the present Covid-19 situation regarding the costing of wage, by considering both company and General Federation of Oman Workers aspects? Explain in detail.
In: Accounting
You made the following transactions for Floral & Fauna Landscaping during the month of July:
July 1 You deposited $25,000 in a bank account in the name of the business.
1 You invested your personal gardening equipment, with a fair market value of $1,500, in the business.
6 Bought a used trailer on account from Trailers R Us , $800, Inv. #286.
7 Paid the rent for July, $1485, Ck. # 1000.
8 Bought a used backhoe from Deere Equipment, $8,500, paying $4,000 in cash and placing the balance on account, Inv. #3562, Ck. # 1001.
10 Bought liability insurance for one year, $2,400, Ck. #1002.
11 Sold landscaping services on account to Bel-Red Business Park, $2,225, Inv. #100.
15 Bought supplies on account from Garden Suppliers, Inc., $1,585, Inv. #6283.
16 Sold landscaping services on account to Phylla Dendron, $1,850, Inv. #101.
18 Received and paid the bill from Gas To Go for gas and oil for the equipment, $95, Ck. #1003.
19 Sold landscaping services for cash to A Chinzy Company, $1,978, Inv. #102.
20 Paid on account to Trailers R Us, $600, Inv. #286, Ck #1004.
21 Received on account from Bel-Red Business Park, $725, Inv. 100.
22 Sold landscaping services on account to Bonsai, Inc.,$1,626, Inv. #103.
25 Received and paid the utility bill, $184, Ck. #1005.
30 Paid salaries of the employees, $3,000, Ck. #1006.
31 You withdrew cash for your personal use, $1,500, Ck. #1007.
In: Accounting
Chapter 20 Inventory management, Just -in-time, and simplified costing methods
This is all the information I have
As a new senior accountant of Troy Rugs Inc. an exotic rug manufacturer, you have taken on the new responsibility of lean accounting within the company. During your monthly analysis, you outline many areas that the company does not possess to adopt a lean accounting system. You have observed that setup times take a week versus two days as they should. You noticed that the lot in which the raw materials are stored shares 75% of the lot in which rugs are wrapped and prepared for shipping which extends the time needed to fulfill an order an additional four days. Overall the layout of the facility is not as functional as the materials used to produce the rugs are on the same floor in inventory as rugs that have been produced and there is no one process to separate the two or overlook certain rug inventory due to materials being placed in the wrong area of the warehouse. You also have a memo from the CEO stating that one of the company’s largest suppliers of thread has gone bankrupt and there is no backup supplier. This ultimately is the reason no custom orders will be approved for at least the next three months.
Questions:
1. What suggestions do you have for implementing JIT at Troy Rugs?
2. Should custom orders and standard orders be produced on the same line? (Hint: Do they require the same type of operation?)
In: Accounting