Part III USING INFORMATION PROVIDED FROM PART 2 COMPLETE THE FOLOWING:

Carl Redmon decided to expand his business and begin selling accounting software, as well as providing consulting services. During January, Carl Redmon Consulting completed these transactions:

Jan   2   Completed a consulting engagement and received cash of $7,200.

          2   Prepaid three months’ office rent, $1,500.

          7   Purchased software inventory on account, $3,900, plus freight in, $100.

        15   Withdrew $500 for personal use.

        18   Sold software on account, $1,100 (cost $700).

        19   Consulted with a client for a fee of $900 on account.

        20   Paid the secretary’s salary for the month. ($4,000 for 30 days)

        21   Paid on account, $2,000.

        24   Paid utilities, $300.

        28   Sold software for cash, $600 (cost $400).

        31   Recorded these adjusting entries:

                a) Accrued salary expense.

                  b) Depreciation of computer and furniture.

                  c) Expiration of prepaid rent.

                  d) Expiration of prepaid insurance.   

                  e) Physical count of inventory, $2,800.

                  f)   Earned the remaining revenue from December 22.

                  g) Redmon estimates that 3% of inventory sold will be returned

Prepaid Insurance is for 2 years

Furniture originally cost $4,500. The furniture should last for five years.

Computer originally paid $2,400. It is expected to remain in service for five years, and have a $400 salvage value at the end of its useful life.

Required

1) Prepare journal entries for the above transactions and post these entries to the ledger.

2) Prepare adjusting entries on January 31 and post to the ledger.

3) Prepare an adjusted trial balance

4) Prepare closing entries at January 31, 2018 and post to the ledger.

5) Prepare a post-closing trial balance on January 31, 2018.

___________________________________________________________________________________________-

Panama Jack has invented a better infrared toaster oven, for which monthly demand is given by Q = 400 – 4P. (Q is in ovens per month and P is in dollars.)

a. (1/2 point) How much quantity is demanded at P = $50?

b. (1 point) If you got (a) correct, you should be able to figure out that the monthly revenue (P*Q) is $10,000. If the per-unit variable costs (which you might think of as “marginal cost”) are $35 per unit, how much are monthly profits at a price of $50?

c. (1 point) How many ovens must eventually be manufactured and sold at $50, over time, to break even against a fixed cost of $60,000 to design and create the prototype while supporting Jack during the invention and innovation process?

d. (2 points) It turns out that a price of $50 (and the quantity you found in (a)) maximizes revenue, but does not maximize profit. Equate marginal cost with marginal revenue to find the profit-maximizing price and quantity. If you can’t do this, simply plug in a quantity of 160 and go on.

e. (1 point) How many units must be manufactured at P* [the profit-maximizing price found in (d)], over time, to break even against the fixed cost of $60,000 to create the prototype?

f. (2 points) OK, so you’ve figured out how many ovens it takes to break even. How many months of production does it take to break even at prices of $50 and the profit-maximizing price found in (d), respectively? (You can ignore discounting and the time value of money, but don’t forget the Law of Demand!)

g. (1 points) As the inventor, Jack was planning to charge $50 for the oven. A strategic investor offers to rent Jack a manufacturing facility that will reduce Jack’s marginal cost from $35 to $25. If price stays at $50, what is Jack’s maximum willingness to pay (per month) for such a deal?

h. (2 points) After consulting with a pricing expert, Jack was planning to charge P*, the profit-maximizing price in [d]. At that price, what is Jack’s maximum willingness to pay (per month) for such a deal now?

i. (2 points) Comment on the cause(s) of the difference between your answers to (g) and (h). (Extra credit, 1 point) If Jack accepts the deal, is the price in [d] still the right price to charge? Why or why not?

Please answer question e.f.g.h.i

Pitman Company is a small editorial services company owned and operated by Jan Pitman. On October 31, 2019, the end of the current year, Pitman Company's accounting clerk prepared the following unadjusted trial balance:

The data needed to determine year-end adjustments are as follows:

Required:

Unexpired insurance at October 31, $5,450.

Supplies on hand at October 31, $670.

Depreciation of building for the year, $3,610.

Depreciation of equipment for the year, $3,130.

Unearned rent at October 31, $2,020.

Accrued salaries and wages at October 31, $3,530.

Fees earned but unbilled on October 31, $20,730.

1. Journalize the adjusting entries using the following additional accounts: Salaries and Wages Payable; Rent Revenue; Insurance Expense; Depreciation Expense—Building; Depreciation Expense—Equipment; and Supplies Expense.

2. Determine the balances of the accounts affected by the adjusting entries, and prepare an adjusted trial balance. If an amount box does not require an entry, leave it blank.

On December 31, 2018, Marsh Company held Xenon Company bonds in its portfolio of available-for-sale securities. The bonds have a par value of $14,000, carry a 10% annual interest rate, mature in 2025, and had originally been purchased at par. The market value of the bonds at December 31, 2018 was $12,000. The December 31, 2018, balance sheet showed the following:

On January 1, 2019, Marsh acquired bonds of Yellow Company with a par value of $16,000 for $16,200. The Yellow Company bonds carry an annual interest rate of 12% and mature on December 31, 2023. Additionally, Marsh acquired Zebra Company bonds with a face value of 19,000 for $18,600. The Zebra Company bonds carry an 8% annual interest rate and mature on December 31, 2028. At the end of 2019, the respective market values of the bonds were: Xenon, $13,000; Yellow, $17,000; and Zebra, $20,000. Marsh classifies all of the debt securities as available-for-sale as it does not intend to hold them to maturity nor does it intend to actively buy and sell them. Assume that Marsh uses the straight-line method to amortize any discounts or premiums.

Required:

Finders Investigative Services is an investigative services firm that is owned and operated by Stacy Tanner. On June 30, 2019, the end of the fiscal year, the accountant for Finders Investigative Services prepared an end-of-period spreadsheet, a part of which follows:

CHART OF ACCOUNTS

Finders Investigative Services

General Ledger

Final Question. If Stacy Tanner, Capital has instead decreased $30,000 after the closing entries were posted, and the withdrawals remained the same, what would have been the amount of net income or net loss? Enter a net loss as a negative amount using a minus sign.

Prepare the income statement, the statement of owner's equity, and a classified balance sheet. Use proper formatting techniques including headings and dollar signs.

You opened a new pet supplies store and named it Ozzie’s Pet Supply and Boarding on December 1, 2019. The following information about December’s transactions, accounts, and adjustment data is available.

Transactions:
Dec. 1 Family members contributed $50,000 cash to the business in exchange for capital.

Dec. 2 Purchased $10,800 of equipment for the store paying cash.

Dec. 3 Paid $4,500 for a 9-month insurance policy starting on December 1.

Dec. 4 Paid $18,000 cash to purchase land to be used in operations.

Dec. 5 Purchased office supplies on account, $3,000.

Dec. 6 Borrowed $28,000 from the bank for business use. You signed a bank payable note for an interest rate of 5% APR.

Dec. 7Paid $800 for advertising expenses.

Dec. 8 Purchased inventory (dog food) for the store at a cost of $1,500

Dec. 9 Paid for office supplies $3,000

Dec 10 Received a bill for utilities to be paid in January, $200.

Dec 31 Service Revenues earned during the month included $18,500 cash and $2,000 on account.

Dec. 31 Sold one hundred percent of the dog food purchased on Dec. 8^th for $2,100 in cash.

Dec. 31 Paid employees' salaries $2,000 and building rent $800.

Dec. 31 Dividends of $200 were paid.

Dec. 31 Customer prepaid $1,000 for boarding services in January.

Accounts

Cash; Accounts Receivable; Office Supplies; Prepaid Insurance; Equipment; Accumulated Depreciation-Equipment; Land; Accounts Payable; Utilities Payable; Interest Payable; Unearned Revenue; Bank Notes Payable; Family, Capital; Service Revenue; Dog Food Revenue; Salaries Expense; Rent Expense; Utilities Expense; Advertising Expense; Supplies Expense; Insurance Expense; Interest Expense; and Depreciation Expense-Equipment; Inventory; COGS; Dividends; Service Charge-Bank; Uncollectible Accounts Expense; Allowance for Doubtful Accounts.

Adjustment Data

1. Office Supplies used during the month, $600.
2. Depreciation on the Equipment for the month should be calculated based on straight-line depreciation and a useful life of 4 years (zero residual).
3. One month insurance has expired.
4. Calculate accrued interest expense and make adjusting entry.
5. Service charge from bank totaled $25.
6. Sales Method for reserving for doubtful accounts was executed (Remember, only A/R balances are considered).

The unadjusted trial balance for Grouper Corp. is shown below.

Assume the following adjustment data.

Prepare the adjusting entries for the items above. (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 the amount is entered. Do not indent manually.)

Toronado Ltd. reported the following items in its unadjusted trial balance as of 31 December 20X4 for the 20X4 fiscal year. This trial balance is listed in alphabetical order. Note that this is a partial trial balance and does not include all accounts. Accounts have normal (debit or credit) balances.

Other information:

• The tax rate is 30%, but no tax has yet been recorded.
• Closing merchandise inventory is $76,700. Closing supplies inventory is $1,500.
• The insurance expense represents a payment made on 1 May for a 24-month fire insurance policy.
• Customers owe $53,200 for goods delivered on 31 December; this amount has not yet been recorded.
• All sales are on account, except those that are prepaid.
• Unearned revenue represents all customer deposits received during the year. Of this
   amount, 60% is still unearned at the end of the year.
• Bad debt expense is to be recognized as 1% of total sales.
• Interest on the note payable was last paid and recorded on 31 October.
• The company owes $3,400 in utilities.
• Interest on the loan receivable has not been paid or recorded all year.

Required:
1. Prepare journal entries to reflect the required adjustments. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round "Bad debt expense" and "Income tax expense" to the nearest $100.)      

a. Record the entry to close merchandise inventory.

b. Record the entry to close supplies inventory.

c. Record the prepaid insurance expense.

d. Record the sales on account.

e. Record the deposit received last year which relate to current year sales.

f. Record the bad debt expenses.

g. Record the interest payable.

h. Record the utilities expense.

i. Record the interest revenue.

j. Record the income tax expense.

2. Prepare an SCI based on the adjusted balances. (Do not round your intermediate calculations.

3. Prepare a statement of changes in equity (for retained earnings only) based on the adjusted balances.

Windsor Park Dominica is owned and operated by a private company, Windees Ltd. You work as the Facilities Manager of the Park and the CEO of the company has asked you to evaluate whether Windees should embark on the expansion of the facility given there are plans by the Government to host Cricket World Cup in 2020. The project seeks to increase the number of seats by building four new box seating areas for VIPs and an additional 4,000 seats for the general public. Each box seating area is expected to generate $300,500 in incremental annual revenue, while each of the new seats for the general public will generate $2,500 in incremental annual revenue. The incremental expenses associated with the new boxes and seating will amount to 70 percent of the revenues. These expenses include hiring additional personnel to handle concessions, ushering, and security. The new construction will cost $15 million and will be fully depreciated (to a value of zero dollars) on a straight-line basis over the 5-year life of the project. The company will have to invest $1.5 million in additional working capital immediately, but the project will not require any other working capital investments during its life. This working capital will be recovered in the last year of the project. The company’s marginal tax rate is 15 percent.

A. What are the incremental cash flows from this project? In other words determine the free cash flow of the project over its life. (You may use the table below to work out this part of the problem)

B. What is the Net Present Value if the project is assessed at a discount rate of 15% and should the project be accepted and why?

C. What is the Internal Rate of Return of the project and should the project be accepted and why?

D. In addition to the above information, you were told that Windees Ltd. has 5,000 bonds issued and outstanding with a 7.0 percent coupon rate compounded semi-annually. These bonds have 7 years left to maturity and they currently sell for 92 percent of par value. The company has 100,000 shares issued and outstanding with a market value of $3.85 per share. The company’s stock has a beta of 1.20. The expected return on the market is 8.0 percent and the yield on the risk-free asset is currently 6.0 percent. The CEO would like to know a fair rate which can be used to assess its cost of capital. You have therefore been asked to calculate the WACC for Windees Ltd