On January 1, 2017, Sheridan Company purchased  9% bonds having a maturity value of $ 290,000, for $ 313,782.32. The bonds provide the bondholders with a  7% yield. They are dated January 1, 2017, and mature January 1, 2022, with interest receivable January 1 of each year. Sheridan Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified in the held-to-maturity category.

a. 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.)

b. Prepare a bond amortization schedule. (Round answers to 2 decimal places, e.g. 2,525.25.)

c. Prepare the journal entry to record the interest revenue and the amortization at December 31, 2017. (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.)

d. Prepare the journal entry to record the interest revenue and the amortization at December 31, 2018. (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.)

On January 1, 2018, Nath-Langstrom Services, Inc., a computer software training firm, leased several computers under a two-year operating lease agreement from ComputerWorld Leasing, which routinely finances equipment for other firms at an annual interest rate of 6%. The contract calls for four rent payments of $12,000 each, payable semiannually on June 30 and December 31 each year. The computers were acquired by ComputerWorld at a cost of $94,000 and were expected to have a useful life of Five years with no residual value. Both firms record amortization and depreciation semi-annually.

Prepare the appropriate enteries for both the lessee and the lessor from the beginning of the lease through the end of 2018

1. Jan 1 2018 Record the beginning of the lease for Nath-Langstorm Services

2. June 30 2018 Record the lease payment and interest expense for Nath-Langstrom Services

3. June 30 2018 Record the amortization expense for Nath-Langstrom Services

4. December 31 2018 Record the lease payment and interest expense for Nath-Langstrom Services

5. December 31 2018 Record the amortization expense for Nath-Langstrom Services

6. June 30 2018 Record the lease revenue received by ComputerWorld Leasing

7. June 30 2018 Record the Depreciation expense for ComputerWorld Leasing

8. December 31 2018 Record the lease revenue received by ComputerWorld Leasing

9. December 31 2018 Record the Depreciatino for ComputerWorld Leasing

Revise your calculations based the new information provided below and then answer the questions that follow.

A company lends $372,000 to an owner and accepts a three year, 7% note in return. The note was issued on June 1st of the current year, and will be due on June 1st of the final year of the note.

Required:
(a) Prepare the journal entry to be made when the company makes the loan and accepts the note in return. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

• Record the 7% note receivable accepted for a loan amount of $372,000.

(b) Calculate the interest revenue to be recorded at the end of each year the note is outstanding.

(c) Prepare the journal entries to accrue the interest receivable for each year the note is outstanding. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
Dec 31

• Record the interest receivable during the period ending December 31 for year 1.
• Record the interest receivable during the period ending December 31 for Year 2.
• Record the interest receivable during the period ending December 31 for Year 3.

(d) Prepare the journal entry to record receiving the cash at the note's maturity. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
June 01

• Record the receipt of cash on account of 7% note receivable.

1.Owner's equity for our company is $500,000, and total liabilities are $250,000. The company paid $50,000 in dividends during the year. What do our total assets equal?

$250,000

$300,000

$700,000

$750,000

2.The net income for our company this year is $20,000. The beginning and ending retained earnings balances were $46,000 and $52,000, respectively. The company issued no common stock. Calculate the amount of dividends paid by the company this year.

$14,000

$54,000

$60,000

$106,000

3.Which of the following accounts is increased with a credit?

cash

prepaid insurance

salaries expense

unearned revenue

4.On August 21, we paid four months' rent in advance, which totaled $3,200. What account would we credit when we journalize this entry?

rent expense

cash

prepaid rent

account payable

5.On September 5, we received an $11,400 payment on account. What account would we debit when we journalize this entry?

accounts payable

cash

accounts receivable

fees earned

6.On September 11, we performed $5,750 of service and billed our customer. What account would we credit when we journalize this entry?

service revenue

cash

accounts receivable

retained earnings

7.On September 22, we purchased supplies on account for $1,150. What account would we debit when we journalize this entry?

supplies

cash

accounts payable

supplies expense

Required information

[The following information applies to the questions displayed below.]

Which of the following is a true statement? (Note: A statement may be true even if it does not identify all accounts that appear on that particular financial statement.)

Multiple Choice

• Account numbers 2, 4, and 5 will appear on the income statement.

• Account numbers 1, 3, and 8 will appear on the balance sheet.

• Account numbers 2, 5, and 8 will appear on the statement of cash flows.

• Account numbers 4, 5, and 6 will appear on the statement of changes in stockholders’ equity.

Required information

[The following information applies to the questions displayed below.]

Which of the following is a true statement? (Note: A statement may be true even if it does not identify all accounts that have debit balances on that particular financial statement).

Multiple Choice

• Account numbers 1, 3, and 5 normally have debit balances.

• Account numbers 2, 4, and 5 normally have debit balances.

• Account numbers 2, 5, and 8 normally have debit balances.

• Account numbers 4, 5, and 6 normally have debit balances.

The Gourmand Cooking School runs short cooking courses at its small campus. Management has identified two cost drivers it uses in its budgeting and performance reports—the number of courses and the total number of students. For example, the school might run two courses in a month and have a total of 61 students enrolled in those two courses. Data concerning the company’s cost formulas appear below:

For example, administrative expenses should be $3,900 per month plus $42 per course plus $4 per student. The company’s sales should average $880 per student.

The company planned to run four courses with a total of 61 students; however, it actually ran four courses with a total of only 57 students. The actual operating results for September appear below:

Required:

Prepare a flexible budget performance report that shows both revenue and spending variances and activity variances for September. (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.)

1. Under monopolistic competition, which of the following is true:

A) In the short run, the firm behaves as a firm in perfect competition.

B) In the long run equilibrium, firms will make positive profits.

C) If there are economic profits, in the long run new firms enter leading to a decrease in demand for the existing firm.

D) All of the above are true.

E) None of the above are true

2. In the market equilibrium, a single-price monopolist

A) always generates lower total surplus than in perfect competition

B) restricts output to increase profits

C) charges a price higher than the marginal cost

D) a, b, and c are true

E) always produces at an efficient scale

3. Which of the following statement(s) are true?

A) A single price monopolist producing in the inelastic part of the demand curve could increase its total revenue by increasing the price.

B) A single-price monopolist that maximizes profits never produces in the inelastic part of the demand curve

C) The total revenue of single-price monopolist is minimized when demand is perfectly elastic.

D) a and b are true

E) b and c are true

4. Which of the following statement(s) are true?

A) Unregulated natural monopoly produces at a socially efficient scale.

B) Natural monopoly under average-cost pricing produces at an efficient scale

C) Natural monopoly under marginal-cost pricing generates a deadweight loss.

D) b and c are true

E) none of the above are true

TotsPoses, Inc., a profit-maximizing business, is the only photography business in town that specializes in portraits of small children. George, who owns and runs TotsPoses, expects to encounter an average of eight customers per day, each with a reservation price shown in the following table. Assume George has no fixed costs, and his cost of producing each portrait is $35.

a. Complete the following table.

Instructions: If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. Enter your responses as whole numbers.

How much should George charge if he must charge a single price to all customers? $__

At this price, how many portraits will George produce each day? __ portraits

What will be his economic profit? $__ per day

b. How much consumer surplus is generated each day at this price? $__

c. What is the socially efficient number of portraits? __ portraits

d. George is very experienced in the business and knows the reservation price of each of his customers. If he is allowed to charge any price he likes to any consumer, how many portraits will he produce each day? __ portraits.

What will his economic profit be? $__ per day

e. In this case, how much consumer surplus is generated each day? $__

Consider the market for potatoes. You can assume perfect competition.
It is known that the market equilibrium price is $3 per kg and the market equilibrium quantity is 100,000 kg. It is known that when the price is $3 price elasticity of demand is 0.4 and price elasticity of supply is 1.1. Assume that initially the market for potatoes is in equilibrium.
a)   Draw a diagram with (downward-sloping) demand and (upward-sloping) supply schedules. Indicate the market equilibrium, consumer surplus, producer surplus and the dead-weight loss. (Remember the relation between elasticity and the absolute slope of the demand and supply schedules. You do not have to be precise, just make sure it is clear which schedule is steeper).

You answer.

b)   If the price increases by 5% what would be the percentage change of quantity demanded? What would be the new quantity demanded? If the price increases from $3 to $3.03 what would be the new quantity producers would be willing to supply?

You answer.

c)   The government decides to introduce a 10% tax on the price of potatoes. How would such a decision affect the equilibrium price (paid by consumers) and the equilibrium quantity? Explain using a clearly labelled graph. (Note that you are not required to calculate anything in this question.)

You answer.

d)   What would happen to consumer surplus, producer surplus, government revenue and the dead-weight loss when the 10% tax on the price of potatoes is implemented. Explain. Show the new consumer surplus, producer surplus, government revenue and the dead-weight loss on the graph in part c). Who bears higher tax burden, consumers or producers? Explain.

You answer.