Toolbox Practice Problem

The fixed cost is assumed that Larry has discovered the other fixed cost incurred. The total investment is $800,000. The worst case scenario assumes that Larry got a total line of credit from the bank in the amount of $400,000 and invested $400,000 from other source. The Notes payable – short term and the long-term debt is (11.8 + 3.7) = 15.5 % from Table F in the handout. The Loan interest and payment per year is ($400,000 * 0.155)= $62,000. The Income data from Table F indicates that there is a 0.4% of all other expenses net out of the total sales which equals to $109,908 (5,700,666 gallons * $4.82 *0.4%) .

The company has an agreement with a bank that allows the company to borrow the exact amount needed at the beginning of each month. The interest rate on these loans is 1% per month and for simplicity we will assume that interest is not compounded. At the end of the quarter, the company will pay the bank all of the accrued interest on the loan and as much of the loan as possible while still retaining at least $50,000 in cash.

d. The Johnsons own a rental home. They incurred $8,500 of expenses associated with the property.

On December 11, MD received an order for a total price of $22,100. Barbor Furniture Ltd. (Barbor) provided a deposit of $9,000 which was recorded as revenue when it was received on December 13. Barbor was not billed until January 2. The order was not shipped until after the year end on January 2. The remaining balance owing was recorded in accounts receivable and

The ledger of Wainwright Company at the end of the current year shows Accounts Receivable $78,000; Credit Sales $810,000; and Sales Returns and Allowances $40,000. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

24. Mobilee Oil Company accepted a $10,000, 120-day note, dated March 3, at 8.5% to settle a past due accounts receivable. Mobilee Oil discount the note to raise cash on May 10 at a discounted rate of 9%. What proceeds did Mobilee Oil receive?

Date: Name: ID: Answer the following Questions: 1. Tower Inc. owns 30% of Yale Co. and applies the equity method. During the current year, Tower bought inventory costing $66,000 and then sold it to Yale for $120,000. At year-end, only $24,000 of merchandise was still being held by Yale. What amount of inter-company inventory profit must be deferred by Tower? A. $6,480 B. $3,240 C. $10,800 D. $16,200 E. $6,610 2. All of the following statements regarding the investment account using the equity method are true except A. The investment is recorded at cost B. Dividends received are reported as revenue C. Net income of investee increases the investment account D. Dividends received reduce the investment account E.

Mohave Inc. purchased land, building, and equipment from Laguna Corporation for a cash payment of $431,550. The estimated fair values of the assets are land $82,200, building $301,400, and

The company's management estimates that 2.5% of net credit sales will be uncollectible. Net credit sales are $115,000. What will be the amount of uncollectible accounts expense reported on the income statement?

E5-6 On April 25, Foreman Electric installs wiring in a new home for 3500 on account. However, on April 27, Foreman’s electrical work does not pass inspection, and Foreman grants the customer an allowance of 600 because of the problem. The customer makes full payment of the balance owed, excluding the allowance, on April 30.

You may omit explanations of the transactions. Skip a line between eah set of journal entries.

The purpose and goal behind researching the income statements and balance sheets then calculating the ratios is mainly to help creditors and investors make their decisions easier and faster. The way we are presenting our research results helps the investors and creditors make the decision which of the companies is more worthy to invest in or loan money too without taking a risk, and lowering the chances that they will be disappointed by the results of their investment, or in the creditors case they can be almost certain the company they are loaning the money to would be worthy enough of paying the money back without a hassle.

The company has an agreement with a bank that allows the company to borrow in increments of $1,000 at the beginning of each month. The interest rate on these loans is 1% per month and for

Check 1024 for $1,250 and bought the rest on credit. The equipment has a five-year life

By: Charn Gek Cheng, Chiang Soo Ling, Kummar Sokali Muthu Mogan, Lee Siew Fen Samantha