Johnson Corp. owns a professional ice Rugbyteam, the Red Raptors. The company sells season ticketsfor its upcoming season and receives $960,000 cash on January 1. The season starts January 1, 2018,with five home games occurring monthly overthe nextsix monthsHow much revenue would they recognize in January?A) $160,000B) $960,000c) $32,000D) $0E) None of the above

Calculate revenue would recognize in January:

Answered: Johnson Corp. owns a professional ice…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter12: Current Liabilities

Section: Chapter Questions

Problem 9PA: Mohammed LLC is a growing consulting firm. The following transactions take place during the current...

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Homeland Plus specializes in home goods and accessories. In order for the company to expand its business, the company takes out a long-term loan in the amount of $650,000. Assume that any loans are created on January 1. The terms of the loan include a periodic payment plan, where interest payments are accumulated each year but are only computed against the outstanding principal balance during that current period. The annual interest rate is 8.5%. Each year on December 31, the company pays down the principal balance by $80,000. This payment is considered part of the outstanding principal balance when computing the interest accumulation that also occurs on December 31 of that year. A. Determine the outstanding principal balance on December 31 of the first year that is computed for interest. B. Compute the interest accrued on December 31 of the first year. C. Make a journal entry to record interest accumulated during the first year, but not paid as of December 31 of that first year.
Consider the following situations and determine (1) which type of liability should be recognized (specific account), and (2) how much should be recognized in the current period (year). A. A business sets up a line of credit with a supplier. The company purchases $10,000 worth of equipment on credit. Terms of purchase are 5/10, n/30. B. A customer purchases a watering hose for $25. The sales tax rate is 5%. C. Customers pay in advance for season tickets to a soccer game. There are fourteen customers, each paying $250 per season ticket. Each customer purchased two season tickets. D. A company issues 2,000 shares of its common stock with a price per share of $15.
McMasters Inc. specializes in BBQ accessories. In order for the company to expand its business, they take out a long-term loan in the amount of $800,000. Assume that any loans are created on January 1. The terms of the loan include a periodic payment plan, where interest payments are accumulated each year but are only computed against the outstanding principal balance during that current period. The annual interest rate is 9%. Each year on December 31, the company pays down the principal balance by $50,000. This payment is considered part of the outstanding principal balance when computing the interest accumulation that also occurs on December 31 of that year. A. Determine the outstanding principal balance on December 31 of the first year that is computed for interest. B. Compute the interest accrued on December 31 of the first year. C. Make a journal entry to record interest accumulated during the first year, but not paid as of December 31 of that first year.
McKinnon Enterprises owns a professional ice hockey team, the Rockford Penguins. The company sells season tickets for its upcoming season and receives $960,000 cash. The season starts January 1, with five home games occurring monthly over the next six months. What is the balance in the company’s deferred revenue account at the end of April? (Assume the deferred revenue account had a zero balance on January 1.) Select one: a. $320,000 b. None of these are correct. c. $480,000 d. $640,000 e. $960,000
Sandusky Co sells computers and provides hardware maintenance services. On May 1st, Sandusky sold a package deal containing a computer and a one-year unlimited maintenance/repair service for the computer at a bundle price of $1,000. If sold separately, the computer costs $840 and the one-year unlimited maintenance/repair service costs $360. How much revenue does Sandusky recognize for the month ended May 3ist, assuming that revenue is accrued monthly?
Transactions for the month of December 2020 are as follows: 1-Dec Rey Millora opened an account with Union Bank under Rey's Laundromat business name in the amount of P1,500,000. He also invested in a computer worth P100,000 with a fair market value of P90,000. 2 Paid municipal taxes of P5,500 including his license to operate. 5 Bought a P900,000 condominium for his office paying a P500,000 down payment and signing a mortgage with Metro Bank payable in 10 years for the balance. 7 Bought furniture on credit from Furniture World, P45,000. 8 Returned P7,000 worth of furniture bought due to wrong specifications. 9 Bought cash register P24,000 paid in cash. 10 Paid furniture and fixtures purchased account. 11 Bought P5,600 office supplies paid in cash. 12 Bought a P600,000 van from Jade Motors for use in the business. Terms: 25% cash, 40% thru a 30-day, 10% note, and the balance on the account. 13 Made an additional investment of P500,000 and equipment worth P60,000 with…
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Knockoff Corporation sells a videogame unit known as the Gii. During the month of December, the following events occur. Prepare any necessary journal entries and adjusting entries that Knockoff should record. a. Knockoff purchased $300,000 of inventory on account. b. The company incurs salary expense of $45,000, although employees will not be paid until the beginning of January. The company also owes an additional $7,000 to the government for payroll taxes. c. Knockoff determines that it owes the IRS $120,000 in income taxes for this year. d. A retail customer places an advance order for Giis and pays Knockoff $23,000. The Giis will be shipped in January. e. Knockoff owes a local bank $4,000 in interest on a loan. f. Knockoff rents a warehouse of $3,000 per week. No payments were made for the last three weeks of the year. Do not give answer in image formate
Wildhorse Co. Ltd. publishes a monthly sports magazine, Fishing Preview. Subscriptions to the magazine cost $28 per year. During November 2022, Wildhorse sells 8,400 subscriptions for cash, beginning with the December issue. Wildhorse prepares financial statements quarterly and recognizes subscription revenue at the end of the quarter. The company uses the accounts Unearned Subscription Revenue and Subscription Revenue. The company has a December 31 year-end. Prepare the entry in November for the receipt of the subscriptions. Date Account Titles and Explanation Debit Credit Nov. enter an account title for the entry in November for the receipt of the subscriptionsenter an account title for the entry in November for the receipt of the subscriptions
Wildhorse Co. Ltd. publishes a monthly sports magazine, Fishing Preview. Subscriptions to the magazine cost $28 per year. During November 2022, Wildhorse sells 8,400 subscriptions for cash, beginning with the December issue. Wildhorse prepares financial statements quarterly and recognizes subscription revenue at the end of the quarter. The company uses the accounts Unearned Subscription Revenue and Subscription Revenue. The company has a December 31 year-end.Prepare the adjusting entry at March 31, 2023, to record subscription revenue in the first quarter of 2023.
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Peter Parker Company, whose accounting year ends on December 31, provides delivery services for packages to be taken between the city and the airport.On January 1, 2015, the company acquired a delivery van from MJ Trucks. The company paid cash of P1,020,000 to MJ, which included registration fees of P20,000. Insurance costs for the first year amounted to P24,000. The truck is expected to have a useful life of five years. At the end of its useful life, the asset is expected to be sold for P480,000, with cots relating to the sale amounting to P8,000.On January 1, 2016, Peter Parker’s management decided to add another vehicle, a flat-top, to the fleet. The vehicle was acquired from a liquidation auction at a cash price of P600,000. The vehicle needed some repairs for the elimination of rust (cost: P46,000) and the replacement of all tires (cost: P12,400). The company believed it would use the flat-top for another two years and then sell it. Expected selling price was P300,000, with…

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