Question 1
The following items appeared in the accounting records of Triguero's, a retail music store that also sponsors concerts. Classify each of the items as an asset, liability; revenue; or expense from the company's viewpoint. Also indicate the normal account balance of each item. a. Amounts paid to a mall for rent. b. Amounts to be paid in 10 days to suppliers. c. A new fax machine purchased for office use. d. Land held as an investment. e. Amounts due from customers. f. Daily sales of merchandise sold. g. Promotional costs to publicize a concert. h. A long-term loan owed to Citizens Bank. i. The albums, tapes, and CDs held for sale to customers. 2. Basic journal entries The following transactions pertain to the Jennifer Royall Company: May 1 Jenni?fer Royall invested cash of $25,000 and land valued at $15,000 into the business. 5 Provided $1,000 of services to Jason Ratchford, a client, on account. 9 Paid $1,250 of salaries to an employee. 14 Acquired a new computer for $4,200, on account. 20 Collected $800 from Jason Ratchford for services provided on May 5. 24 Borrowed $2,500 from BestBanc by securing a six-month loan. Prepare journal entries (and explanations) to record the preceding transactions and events. 3. Balance sheet preparation. The following data relate to Preston Company as of December 31, 20XX: Building $40,000 Accounts receivable $24,000 Cash 21,000 Loan payable 30,000 J. Preston, Capital 65,000 Land 21,000 Accounts payable ? Prepare a balance sheet as of December 31, 20XX. (See Exhibit 1.1 and 1.4) 4. Basic transaction processing. On November 1 of the current year, Richard Simmons established a sole proprietorship. The following transactions occurred during the month: 1: Simmons invested $32,000 into the business for $32,000 in common stock. 2: Paid $5,000 to acquire a used minivan. 3: Purchased $1,800 of office furniture on account. 4: Performed $2,100 of consulting services on account. 5: Paid $300 of repair expenses. 6: Received $800 from clients who were previously billed in item 4. 7: Paid $500 on account to the supplier of office furniture in item 3. 8: Received a $150 electric bill, to be paid next month. 9: Simmons withdrew $800 from the business. 10: Received $250 in cash from clients for consulting services rendered. Instructions a. Arrange the following asset, liability, and owner?s equity elements of the account?ing equation: Cash, Accounts Receivable, Office Furniture, Van, Accounts Payable, Common Stock/Dividends, and Revenues/Expenses. (See Exhibit 1.5) b. Record each transaction on a separate line. After all transactions have been recorded, compute the balance in each of the preceding items. c. Answer the following questions for Simmons. (1) How much does the company owe to its creditors at month-end? On which financial statement(s) would this information be found? (2) Did the company have a ?good? month from an accounting viewpoint? Briefly explain. 5. Transaction analysis and statement preparation. The transactions that follow relate to Burton Enterprises for March 20X1, the company?s first month of activity. 3/1 Joanne Burton, the owner, invested $20,000 cash into the business. 3/4 Performed $2,400 of services on account. 3/7 Acquired a small parcel of land by paying $6,000 cash 3/12 Received $500 from a client who was billed previously on March 4. 3/15 Paid $200 to the Journal Herald for advertising expense. 3/18 Acquired 9,000 of equipment from Park Central Outfitters by Paying $7,000 down and agreeing to remit the balance owed within two weeks (A/P). 3/22 Received $300 cash from clients for services. 3/24 Paid $1,500 on account to Park Central Outfitters in partial settlement of the balance due from the transaction on March 18. 3/28 Rented a car from United Car Rental for use on March 28. Total charges amounted to $125, with United billing Burton for the amount due. 3/31 Paid $600 for March wages 3/31 Processed a $600 cash withdrawal (dividend) from the business for Joanne Burton Instructions a. Determine the impact of each of the preceding transactions on Burton?s assets, liabilities, and owner?s equity. See exhibit 1.5. Use the following format: Assets = Liabilities + Owner?s Equity Cash, Accounts Receivable, Land, Equipment Accounts Payable (+)Common Stock (+) Revenues (-) Dividends (-) Expenses a. Record each transaction on a separate line. Calculate balances only after the last transaction has been recorded. b. Prepare an income statement, a statement of retained earnings, and a balance sheet, (See Exhibit 1.2, 1.3 and 1.4) 6. Entry and trial balance preparation. Lee Adkins is a portrait artist. The following schedule represents Lee?s combined chart of accounts and trial balance as of May 31. Account number Account name Debit Credit 110 Cash $ 2,700 120 Accounts Receivable 12,100 130 Equipment and Supplies 2,800 140 Studio 45,000 210 Accounts Payable $2,600 310 Lee Adkins, Capital 57,400 320 Lee Adkins, Drawing 30,000 410 Professional Fee Revenue 39,000 510 Advertising Expense 2,300 520 Salaries Expense 2,100 540 Utilities Expense 2,000 $99,000 $99,000 The general ledger also revealed account no. 530, Legal and Accounting Expense. The following transactions occurred during June: 6/2 Collected $3,000 on account from customers 6/7 Sold 25% of the equipment and supplies to a young artist for $700 cash 6/10 Received a $300 invoice from the accountant for preparing last quarter's financial Statements. 6/15 Paid $1,900 to creditors on account. 6/27 Adkins withdrew $2,000 cash for personal use. 6/30 Billed a customer $3,000 for a portrait painted this month. a. Record the necessary journal entries for June on page 2 of the company?s general journal. (See Exhibit 2.6) b. Open running balance ledger ?T? accounts by entering account titles, account num?bers, and May 31 balances. (See exhibit 2.3 and 2.4) c. Post the journal entries to the ?T? accounts. d. Prepare a trial balance as of June 30. (See exhibit 2.9) 7. Journal entry preparation. On January 1 of the current year, Peter Houston invested $80,000 cash into his company MuniServ. The cash was obtained from an owner investment by Peter Houston of $50,000 and a $30,000 bank loan. Shortly thereafter, the company ac?quired selected assets of a bankrupt competitor. The acquisition included land ($10,000), a building ($40,000), and vehicles ($10,000). MuniServ paid $45,000 at the time of the transaction and agreed to remit the remaining balance due of $15,000 (an account payable) by February 15. During January, the company had additional cash outlays for the follow?ing items: Purchases of store equipment $4,600 Note payment 500 Salaries expense 2,300 Advertising expense 700 The January utility bill of $200 was received on January 31 and will be paid next month. MuniServ rendered services to clients on account amounting to $9,400. All customers have been billed; by month end, $3,700 had been received in settlement of account balances. Instructions a. Present journal entries that reflect MuniServ's January transactions, including the $80,000 raised from the owner investment and loan. (See exhibit 2.6) b. Compute the total debits, total credits, and ending balance that would be found in the company's Cash account. (Post to ?T? Accounts, see exhibit 2.3 and 2.4) c. Determine the amount that would be shown on the January 31 trial balance for Accounts Payable. Is the balance a debit or a credit?
Question 2
Can you complete this? It is a simple 1 page APA format summary of an article of your choice? I will attach the course syllabus so you can better understand this. The purpose of this assignment is to test your ability to critically apply the concepts you are studying in the first three weeks of this course. 1 ?Article Summary-??Due at the end of Week Write a one page summary of a meaningful article which ? distills the author?s most important idea in your own words, and ? explains in your own words why the idea is relevant and important to you.,Thanks Rachel,Any updates on this assignment?,Is that APA format, and can you include all the citations and resources used for this paper? I need those for the grade,Also, I would like you to start on the second part of both these papers tomorrow, is there any way, I can get specifically you to do those? I will place the order, but want you as the writer, since you already understand the first part.,ok, I will do that soon, but please send me the article that you used for this paper, I must add it in for this weeks grade,Thank You,The QID sould be 7430098 let me know if it's not it
Question 3
"Situation Parent, Inc. is contemplating a tender offer to acquire 80 percent of Subsidiary Corporation's common stock. Subsidiary's shares are currently quoted on the New York Stock Exchange at $85 per share. In order to have a reasonable chance of the tender offer attracting 80 percent of Subsidiary's stock, Parent believes it will have to offer at least $105 per share. If the tender offer is made and is successful, the purchase will be consummated on January 1, 2009. A typical part of the planning of a proposed business combination is the preparation of projected or pro forma consolidated financial statements. As a member of Parent's accounting group, you have been asked to prepare the pro forma 2009 consolidated financial statements for Parent and Subsidiary assuming that 80 percent of Subsidiary's stock is acquired at a price of $105 per share. To support your computations, Martha Franklin, the chairperson of Parent's acquisitions committee, has provided you with the projected 2009 financial statements for Subsidiary. (The projected financial statements for Subsidiary and several other companies were prepared earlier for the acquisition committee's use in targeting a company for acquisition.) The projected financial statements for Subsidiary for 2009 and Parent's actual 2008 financial statements are presented in table 1. Assumptions Ms. Franklin has asked you to use the following assumptions to project Parent's 2009 financial statements: ? Sales will increase by 10 percent in 2009. ? All sales will be on account. ? Accounts receivable will be 5 percent lower on December 31, 2009, than on December 31, 2008. ? Cost of goods sold will increase by 9 percent in 2009. ? All purchases of merchandise will be on account. ? Accounts payable are expected to be $50,500 on December 31, 2009. ? Inventory will be 3 percent higher on December 31, 2009, than on December 31, 2008. ? Straight-line depreciation is used for all fixed assets. ? No fixed assets will be disposed of during 2009. The annual depreciation on existing assets is $40,000 per year. ? Equipment will be purchased on January 1, 2009, for $48,000 cash. The equipment will have an estimated life of 10 years with no salvage value. ? Operating expenses, other than depreciation, will increase by 14 percent in 2009. ? All operating expenses, other than depreciation, will be paid in cash. ? Parent's income tax rate is 40 percent, and taxes are paid in cash in four equal payments. Payments will be made on the 15th of April, June, September, and December. For simplicity, assume taxable income equals financial reporting income before taxes. ? Parent will continue the $2.50 per share annual cash dividend on its common stock. ? If the tender offer is successful, Parent will finance the acquisition by issuing $170,000 of 6 percent non-convertible bonds at par on January 1, 2009. The bonds would first pay interest on July 1, 2009, and would pay interest semi-annually thereafter each January 1 and July 1 until maturity on January 1, 2019. ? The acquisition will be accounted for as a purchase and Parent will account for the investment using the equity method. Although most of the legal work related to the acquisition will be handled by Parent's staff attorney, direct costs to prepare and process the tender offer will total $2,000 and will be paid in cash by Parent in 2009. As of January 1, 2009, all of Subsidiary's assets and liabilities are fairly valued except for machinery with a book value of $8,000, an estimated fair value of $9,500, and a 5-year remaining useful life. Assume that straight-line depreciation is used to amortize any revaluation increment. No transactions between these companies occurred prior to 2009. Regardless of whether they combine, Parent plans to buy $50,000 of merchandise from Subsidiary in 2009 and will have $3,600 of these purchases remaining in inventory on December 31, 2009. In addition, Subsidiary is expected to buy $2,400 of merchandise from Parent in 2009 and to have $495 of these purchases in inventory on December 31, 2009. Parent and Subsidiary price their products to yield a 65 percent and 80 percent markup on cost, respectively. Parent intends to use three financial yardsticks to determine the financial attractiveness of the combination. First, Parent wishes to acquire Subsidiary Corporation only if 2009 consolidated earnings per share will be at least as high as the earnings per share Parent would report if no combination takes place. Second, Parent will consider the proposed combination unattractive if it will cause the consolidated current ratio to fall below 2 to 1. Third, return on average stockholders' equity must remain above 20 percent for the combined entity. If the financial yardsticks described above and the non-financial aspects of the combination are appealing, then the tender offer will be made. On the other hand, if these objectives are not met, the acquisition will either be restructured or abandoned. Milestones 1. Forecast the separate financial statements of Parent, Inc. Using Ms. Franklin's assumptions and Parent's 2008 financial statements, prepare pro forma 2009 financial statements for Parent, Inc., assuming that the acquisition is not attempted. Support your statements with appropriate work papers and journal entries. Pro forma financial statements include Statement of Operation; Statement of Retained Earnings, Balance Sheet and Cash Flow Statement. 2. Adjust the separate financial statements of Parent, Inc. to reflect the proposed acquisition. Adjust Parent's pro forma 2009 financial statements prepared in #1 to reflect the proposed acquisition (i.e., adjust Parent's forecasted financial statements for bond issuance, stock purchase, income from subsidiary, etc.). Support your statements with appropriate work papers and journal entries. Pro forma financial statements include Statement of Operation; Statement of Retained Earnings, Balance Sheet and Cash Flow Statement. 3. Prepare pro forma consolidated worksheet. Prepare a pro forma consolidation worksheet for Parent, Inc. and its proposed subsidiary as of December 31, 2009. To ensure you are starting with the right numbers, use the solution provided to Milestone 1 for the adjusted pro forma 2009 financial statements of Parent, Inc., and the projected 2009 financial statements of Subsidiary Corporation in table 1. Show all consolidation adjusting entries including minority interest entries. 4. Perform ratio analysis. Compute earnings per share for (1) the separate financial statements of Parent, Inc. prepared in #1 and (2) the consolidated financial statements contained in the solution for the pro forma consolidation worksheet prepared in #3. Also, calculate current ratio and return on average stockholders' equity for the separate company and consolidated financial statements. 5 Write a memorandum (as a Word document) to Ms. Franklin summarizing the results of your analysis, including a summary of the financial ratios you computed and your recommendation. Attach copies of both sets of pro forma financial statements of Parent, Inc. and the pro forma consolidation worksheet. Table 1 Parent , Inc Actual Financial Statements for 2008 and Subsidiary Corporation Projected Financial Statements for 2009 Parent 2008 Actual Subsidiary 2009 Projected Sales $ 800,000 $ 100,000 Cost of Goods Sold (485,000) (55,000) Operating Expenses (219,000) (10,000) Income before Taxes 96,000 35,000 Income Tax Expense (38,400) (14,000) Net Income $ 57,600 $ 21,000 Retained Earnings January 1 $ 23,000 $ 14,500 Add Net Income 57,600 21,000 Deduct Dividends (38,000) (7,000) Retained Earnings December 31 $ 42,600 $ 28,500 Cash $ 36,200 $ 19,500 Accounts Receivable 39,000 13,000 Inventory 26,000 12,000 Property, Plant and Equipment 673,000 213,000 Accumulated Depreciation (490,000) (28,000) Total Assets 284,200 229,500 Accounts Payable 44,600 21,000 Common Stock* 190,000 150,000 Paid-in Capital in Excess of Par 7,000 30,000 Retained Earnings 42,600 28,500 Total Liabilities & Equities $ 284,200 $ 229,500 *Parent: $12.50 par value. Subsidiary: $75 par value Course Project Check Figures ? Req #1 Net Income ?...$61,494 Cash...........?...$63,564 Total Assets....$313,594 Ret. Earnings....$66,094 Req #2 Net Income ???????....$63,225 Cash.........???????......$62,910 Investment in Subsidiary??.$177,485 Total Assets???????..$490,425 Ret. Earnings???????..$67,825 ",Requirement #2 does not match with my check figures. Please rework the problem. If you can't get it right, I need a refund back. This answer is exactly the same as the first one that I had you guys work on and both are wrong! Thanks, T
Question 4
6. The management of Furman Industries has been evaluating whether the company should continue manufacturing a component or buy it from an outside supplier. A $100 cost per component was determined as follows: Direct material $ 15 Direct labor 40 Variable manufacturing overhead 10 Fixed manufacturing overhead 35 100 Furman Industries uses 4,000 components per year. After Wilfert Corporation submitted a bid of $80 per component, some members of management felt they could reduce costs by buying from outside and discontinuing production of the component. If the component is obtained from Wilfert Corporation, Furman Industries' unused production facilities could be leased to another company for $50,000 per year. Required: a. Determine the maximum amount per unit Furman Industries could pay an outside supplier. b. Indicate if the company should make or buy the component and the total dollar difference in favor of that alternative. c. Assume the company could eliminate one production supervisor with a salary of $30,000 if the component is purchased from an outside supplier. Indicate if the company should make or buy the component and the total dollar difference in favor of that alternative. 7. Baxter Corporation is working at full production capacity producing 10,000 units of a unique product, JKL. Manufacturing costs per unit for JKL follow: Direct material $ 2 Direct manufacturing labor 3 Manufacturing overhead 5 10 The unit manufacturing overhead cost is based on a variable cost per unit of $2 and fixed costs of $30,000 (at full capacity of 10,000 units). The non-manufacturing costs, all variable, are $4 per unit, and the selling price is $20 per unit. A customer, Jacksonville Company, has asked Baxter to produce 2,000 units of a modification of JKL to be called RST. RST would require the same manufacturing processes as JKL. Jacksonville Company has offered to share equally the non-manufacturing costs with Baxter. RST will sell at $15 per unit. Required: a. What is the opportunity cost to Baxter of producing the 2,000 units of RST (assume that no overtime is worked)? b. The Graves Company has offered to produce 2,000 units of JKL for Brown, so Brown can accept the Jacksonville offer. Graves Company would charge Baxter $14 per unit for the JKL. Should Baxter accept the Graves Company offer? c. Suppose Baxter had been working at less than full capacity producing 8,000 units of JKL at the time the RST offer was made. What is the minimum price Baxter should accept for RST under these conditions (ignoring the $15 price mentioned previously)? 8. The Davis Company normally produces 150,000 units of Product LM per year. Due to an economic downturn, the company has some idle capacity. Product LM sells for $15 per unit. The firm's production, marketing, and administration costs at its normal capacity are: Per Unit Direct material $1.00 Direct labor 2.00 Variable overhead 1.50 Fixed overhead ($450,000/150,000 units) 3.00 Variable marketing costs 1.05 Fixed marketing and administrative costs ($210,000/150,000 units) 1.40 Total $9.95 Required: a. Compute the firm's operating income before income taxes if the firm produced and sold 110,000 units. b. For the current year, the firm expects to sell the same number of units as it sold in the prior year. However, in a trade newspaper, the firm noticed an invitation to bid on selling LM to a state government. There are no marketing costs associated with the order if Davis is awarded the contract. The company wishes to prepare a bid for 40,000 units at its full manufacturing cost plus $ 0.25 per unit. How much should it bid? If Davis is successful at getting the contract, what would be its effect on operating income? c. Assume that the company is awarded the contract on January 2, and in addition it also receives an order from a foreign vendor for 40,000 units at the regular price of $15 per unit. The foreign shipment will require the firm to incur its normal marketing costs. The government contract contains a 10-day escape clause (i.e., the firm can reject the contract within 10 days without any penalty). If the firm accepts the government contract, overtime pay at 1 1/2 times the straight time rate will be paid on the 40,000 units. In addition, fixed overhead will increase by $60,000 and variable overhead will behave in its normal pattern. The company has the capacity to produce both orders. Decide the following: 1. Should the firm accept the foreign offer? Show the effect on operating income of accepting the order. 2. Assuming the foreign order is accepted, should the firm accept the government order? Show the effect on operating income of accepting the government order. 9. Bonds Corporation is interested in purchasing a state-of-the-art widget machine for its manufacturing plant. The new machine has been designed to basically eliminate all errors and defects in the widget-making production process. The new machine will cost $150,000, and have a salvage value of $70,000 at the end of its seven-year useful life. Bonds has determined that cash inflows for years 1 through 7 will be as follows: $32,000; $57,000; $15,000; $28,000; $16,000; $10,000, and $15,000, respectively. Maintenance will be required in years 3 and 6 at $10,000 and $7,000 respectively. Bonds uses a discount rate of 11 percent and wants projects to have a payback period of no longer than five years. Present value tables or a financial calculator are required. a. Compute the net present value of the new machine. b. Compute the firm's profitability index. c. Compute the payback period. d. Evaluate this investment proposal for XYZ Co. 10. The Williams Company has been operating a small lunch counter for the convenience of employees. The counter occupies space that is not needed for any other business purpose. The lunch counter has been managed by a part-time employee whose annual salary is $3,000. Yearly operations have consistently shown a loss as follows: Receipts $20,000 Expenses for food, supplies (in cash) $19,000 Salary 3,000 22,000 Net Loss $(2,000) A company has offered to sell Williams Company automatic vending machines for a total cost of $12,000. Sales terms are cash on delivery. The old equipment has zero disposal value. The predicted useful life of the equipment is 10 years, with zero scrap value. The equipment will easily serve the same volume that the lunch counter handled. A catering company will completely service and supply the machines. Prices and variety of food and drink will be the same as those that prevailed at the lunch counter. The catering company will pay 5 percent of gross receipts to the Williams Company and will bear all costs of food, repairs, and so forth. The part-time employee will be discharged. Thus, Williams Company?s only cost will be the initial outlay for the machines. Consider only the two alternatives mentioned. Present value tables or a financial calculator are required. Required: a. What is the annual income difference between alternatives? b. Compute the payback period. c. Compute: 1. The net present value if relevant cost of capital is 20 percent. 2. Internal rate of return. d. Management is very uncertain about the prospective revenue from the vending equipment. Suppose that the gross receipts amounted to $14,000 instead of $20,000. Repeat the computation in part c.1. e. What would be the minimum amount of annual gross receipts from the vending equipment that would justify making the investment? Show computations. 11. The Cleanest Automobile Corporation is contemplating the acquisition of an automatic car wash. The following information is relevant: The cost of the car wash is $160,000 The anticipated revenue from the car wash is $100,000 per annum. The useful life of the car wash is 10 years. Annual operating costs are expected to be: Salaries $30,000 Utilities 9,600 Water usage 4,400 Supplies 6,000 Repairs/maintenance 10,000 The firm uses straight-line depreciation. The salvage value for the car wash is zero. The company's cutoff points are as follows: Payback 3 years Accounting rate of return 18% Internal rate of return 18% Ignore income taxes. Required: a. Compute the annual cash inflow.,Do you need any more clarification or information for this? Thanks,Is anyone working on this? Usually I have a response as to who is working on it.
Question 5
Montag Co. entered into the following transactions involving short-term liabilities in 2008 and 2009. 2008 Apr. 20 Purchased $48,250 of merchandise on credit from Locust, terms are 1/10, n/30. Montag uses the perpetual inventory system. May 19 Replaced the April 20 account payable to Locust with a 120-day, $39,000 note bearing 9% annual interest along with paying $9,250 in cash. July 8 Borrowed $120,000 cash from National Bank by signing a 120-day, 8.5% interest-bearing note with a face value of $120,000. __?__ Paid the amount due on the note to Locust at the maturity date. __?__ Paid the amount due on the note to National Bank at the maturity date. Nov. 28 Borrowed $60,000 cash from Fargo Bank by signing a 60-day, 8% interest-bearing note with a face value of $60,000. Dec. 31 Recorded an adjusting entry for accrued interest on the note to Fargo Bank. 2009 __?__ Paid the amount due on the note to Fargo Bank at the maturity date. Required 1. Determine the maturity date for each of the three notes described. 2. Determine the interest due at maturity for each of the three notes. 3. Determine the interest expense to be recorded in the adjusting entry at the end of 2008. 4. Determine the interest expense to be recorded in 2009. 5. Prepare journal entries for all the preceding transactions and events for years 2008 and 2009.
