Questions on Accounts Receivable and Bad Debts Expense

Consider journal entry that recognized $35 million of revenue in 2001 from the EDS contract based on WorlCom’s expectation that the five-year required cumulative minimum payment would not be met. Based on your own analysis of GAAP, explain the propriety to impropriety of this journal entry.

There are two general partners, each of whom contributes $5,000 in capital to a limited partnership. There are two

13. Use the following data to determine the total dollar amount of assets to be classified as property, plant, and equipment. Eddy Auto Supplies Balance Sheet December 31, 2014 Cash $84,000 Accounts payable $110,000 Accounts receivable $80,000 Salaries and wages payable $20,000 Inventory $140,000 Mortgage payable $180,000 Prepaid insurance $60,000 Total liabilities $310,000 Stock investments $170,000 Land $190,000 Buildings $226,000 Common stock $240,000 Less: Accumulated Retained earnings $500,000 depreciation ($40,000) $186,000 Total

II.|Connie has an investment portfolio in excess of $450,000. She pays Chris $350 to do an analysis of her investments and make recommendations on restructuring the portfolio.|

2. Architect paid $250K and has completed an unknown, but small amount of renovation work so far. He has not invested anywhere near $150K into renovations

Shakespeare’s management uses $10 m from the modified line of credit to acquire Hamlet, a competitor publishing company. Management’s best estimate of the allocation of the $10 million purchase is as follows: $2 million of current assets and $8 million noncurrent assets (comprising $5 million of identifiable noncurrent assets, $2 million of intangible assets, and $1 million of goodwill). Hamlet’s prior-year

f. The company offers a warranty for the services it sells. The expected cost of providing warranty service is 2.5% of the extermination services revenue of $57,760 for 2011. No warranty expense has been recorded for 2011. All costs of servicing warranties in 2011 were properly debited to the Estimated Warranty Liability account.

9. You want to purchase a business with the following cash flows. How much would you pay for this business today assuming you needed a 14% return to make this deal?

(3) What amount of loss is allocable to the limited partner, Dr. Ashin, in this taxable year?

c) What will be the required return on equity (rE) after the change in capital structure from part b?

In return, Helen receives 100 shares in Red Corporation. With respect to the transfers, (Points : 2)

14. Weiland Co. shows the following information on its 2014 income statement: sales = $167,000; costs = $88,600; other expenses = $4,900; depreciation expense =

Cost of inventory is $250,000. Since market is lower than cost, inventory is written down to replacement cost of $180,000 and reported on the company’s balance sheet at December 31, 2011. This also led to a loss of $70,000 reported on the company’s income statement for December 31, 2011.

Division Income Statement For the Quarter Ending June 30, 2013 Production: 25,000 units Sales (25,000 units) $2,500,000 Cost of goods sold 1,800,000 ----------- Gross profit 700,000 Selling & general expenses 350,000 Net income $350,000

9.     She got the 51% of the equity where as she only had to invest 25% of the total amount being invested