Prepare the journal entries, that Whispering should record on December 31, 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amount Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answers to O decimal places, e.g. 58,971.) Date Account Titles and Explanation Debit Credit December 31, 2020 (To nnd olated liabilit
Q: Condensed financial data of Crane Inc. follow. CRANE INC. Comparative Balance Sheets December 31 As...
A: Cash Flow Statement: A cash flow statement is a financial statement that summaries all of the cash i...
Q: A computer was purchased on January 1 at a cost of $12,500. It has an estimated useful life of five ...
A: Double declining rate = 1/useful*2 Depreciation expense = Beginning book value*Double declining rate...
Q: a. By what percentage amount did the exchange rate between the yuan and dollar change from January 1...
A: In the international market, exchange rates between currencies hold an important value. The exchange...
Q: $320 m $280 m $300 m
A: Given : The Initial cost of the machine is $300,000. The New machine depreciates in 5 years MACRS ra...
Q: (a) Using this information, calculate the annual depreciation of the machine. Do not round to the ne...
A: Depreciation expense is a non-cash expense to which companies deduct from their net income. Represen...
Q: ________ are the costs associated with not choosing the other alternative.A. Sunk costsB. Opportunit...
A: The term "cost" alludes to the overall expense incurred in the production of goods and services as w...
Q: ABD Company's manufacturing overhead is 60% of its total conversion costs. If direct labor is PhP1,7...
A: The costs incurred during the creation of a product are known as manufacturing costs. Manufacturing ...
Q: Married individuals filing separate Forms 1040 are not eligible to claim an exclusion for interest i...
A: 16.True. To claim an exclusion for interest income earned on United states saving bonds used to fina...
Q: When we get a line of credit from the bank Check All That Apply a)Assets increase b)Expenses Increa...
A: The assets are the accounts owned by the business. The liabilities are the amount due to be paid to...
Q: A company plans to purchase a piece of equipment that costs $192,000 and qualifies for five-year MAC...
A:
Q: A review of the accounting records of Baird Manufacturing indicated that the compan the month of Mar...
A: In this question, we have to find out the amount of payroll cost in SG&A , and cost of goods sol...
Q: Depletion On January 2, 2019, Whistler Company purchased land for $430,000, from which it is estimat...
A: Depletion expenditure is the cost associated with natural resources (such as oil, fossil fuels, and ...
Q: 1. The following information is obtained from a review of the record keeping process. Analyze the gi...
A: The question is related to modified trial Balance as on December 31st, 2021. The unbalanced trial B...
Q: Malone Delivery Company purchased a new delivery truck for $63,000 on April 1, 2019. The truck is ex...
A: Depreciation is a non-cash expense which is used to show a decline in an assets' value due to its us...
Q: AUBRRIS Trading was organized and began operations on May 1, 2021. 0n that date, Aubrey invested P1,...
A: In the context of the given question, we can compute the total share of Aubrey in the profit for the...
Q: Depreciation Methods Gruman Company purchased a machine for $198,000 on January 2, 2019. It made the...
A: Depreciation is an accounting technique for distributing a tangible or fixed asset's cost over its u...
Q: Mr. John started a T-shirts business to be known as "John T-shirts". He has provided you with the fo...
A: Current Liability is a liability that is payable within 12 months from the date of Balance Sheet. ...
Q: Brilliant Travel Agency specializes ir on Ontario Air. Brilliant’s fixed cost 51,300 per round-trip ...
A: Contribution margin refers to the sum value of money or revenue that remained at a company after ded...
Q: at a company have strong internal cont
A: The internal controls help us to ensure that the financial statements are correct.
Q: What is Green Rider’s break-even point in units and sales dollars? Units Dollars Mod Answer Ans...
A: Green Rider makes three types of electric scooters. The company’s total fixed cost is $2,376,000,000...
Q: Project L requires an initial outlay at t = 0 of $53,000, its expected cash inflows are $10,000 per ...
A: Payback period refers to the amount of time that will be taken by the entity to recover the total in...
Q: Fiona cleans offices. She is allowed 5 seconds per square foot. She cleans building A, which is 3,03...
A: Answer: Yes Since the time taken t= 7.58 hours required to complete both buildings is less than the ...
Q: Project L requires an initial outlay at t = 0 of $65,000, its expected cash inflows are $11,000 per ...
A: MIRR is the rate in an investment plan that equalize the most recent cash inflow with the most recen...
Q: ABC reported the following data for its first year of operations: Net sales $2,800 Cost of goods ...
A: The gross profit ratio indicates the level of profit earned by the company on the net sales. It can ...
Q: Abioye Co. produces and distributes semiconductors for use by computer manufacturers. Abioye Co. iss...
A: Bond is issued by the company for raising finance for the business working. It is considered a cheap...
Q: On December 31, 2019, Mason Company made following proper year-end adjusting entries: 1. Prepare jou...
A: Journal entry shows the recording of transactions and every transaction have a dual impact that is.,...
Q: Compute the 2022 return on assets and the return on common stockholders' equity ratios for both comp...
A: Solution:- a)Calculation of Return on Assets as follows under:- Return on assets =Net income / Avera...
Q: into 30 ordinary shares. The interest expense on the liability component of convertible bonds for th...
A: The share dividend is declared and dividends are paid in the form of shares of the company. A 2 for ...
Q: On January 1, 2020, Nun Company had ordinary and preference shares outstanding. The incorporators or...
A: Retained earning is the amount of profit accumulated over a period of time. The ending retained earn...
Q: The following is a list (in random order) of KIP International Products Company’s December 31, 2019,...
A: A balance sheet is a financial statement that shows the assets, liabilities, and shareholder equity ...
Q: WIPER INC. Condensed Balance Sheets December 31, 2020, 2019, 2018 (in millions) 2020 2019 2018 Cur...
A: Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question...
Q: Petty Cash Fund Entries Journalize the entries to record the following: a. Check No. 12-375 is issue...
A: Journal entry - It refers to the process where the business transactions are recorded in the books o...
Q: A store sells a product that has a constant daily demand of 26 units. The store purchases the produc...
A: Inventory control may be defined as the systematic control over the procurement, storage, and usage ...
Q: A donated fixed asset (from a governmental unit) for which the fair value has been determined should...
A: The resources that a firm employs in its commercial activities are referred to as assets. A donated ...
Q: Flounder Service has over 200 auto-maintenance service outlets nationwide. It provides primarily two...
A: Breakeven sales revenue is that level of sales revenue at which business is only recovering it's tot...
Q: o settle the outstanding amounts. a. Faithful Representation; completeness; Enhancing b. Faithful R...
A: The information is useful when it is of high quality and it provide information that is needed to ma...
Q: At the beginning of 2019, Norris Company l1ad a deferred tax liability of $6,400, because of the use...
A: Comment-Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the questi...
Q: Mr. John started a T-shirts business to be known as "John T-shirts". He has provided you with the fo...
A: Liabilities can be define as an obligation for an individual, group or a company which are recorded ...
Q: Hamlet House makes portable garden sheds that sell for $1,800 each. The tax rate for the company is ...
A: The break even sales are the sales where business earns no profit no loss during the period. The con...
Q: Ali Baba Company uses the perpetual inventory system and the FIFO method. The following information ...
A: Under Perpetual Inventory system cost of goods sold is recorded as when the goods are sold , thus th...
Q: On January 1, 2020, Nun Company had ordinary and preference shares outstanding, The incorporators or...
A:
Q: Bats Corporation issued $800,000 of 12% face value bonds for $851,705.70. The bonds were dated and i...
A: The bonds premium or discount can be amortized using various methods as straight line, or effective ...
Q: Hamilton Company uses a periodic inventory system. At the end of the annual accounting period, Decem...
A: Inventory valuation method includes: FIFO method LIFO method Weighted average cost method FIFO Met...
Q: Two years ago, Kimberly became a 30 percent partner in the KST Partnership with a contribution of in...
A: A partner who recognises a pre-contribution gain under S737 has an increase in the outside basis of ...
Q: XYZ Company has considerable cash collections on a regular basis. The cashier receives the cash, rec...
A:
Q: The Cash account of Silver Maple Art Gallery shows the following at April 30, 2014 Cash Date Item Jr...
A: 1) Silver Maple Art Gallery’s bank reconciliation as on April 30, 2014 :- Particulars Amount Par...
Q: Assertions: A. A Cutoff B. Accuracy C. Completene D. Existence E. Valuation
A: a. Decisional roles- The managers oversee and initiate new tasks or projects in order to enhance t...
Q: t on the account is 10% compounded semi-annually, for how long does Laura have to deposit the money?...
A: The answer has been mentioned below.
Q: Identify the applicable qualitative characteristics referred to in the Conceptual Framework for Fina...
A: Facts in the given question are mentioned below: Profits are based on Director's Bonuses. Their mai...
Q: ordan is considering purchasing an investment costing $42,000 that will save power costs of $14,000 ...
A: In this question, we have to calculate the cashflow after taxes each year.
https://education.wiley.com/content/Kieso_Intermediate_Accounting_17e/media/simulations/interest_rate_tables.pdf
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
- Owens Company leased equipment for 4 years at 50,000 a year with an option to renew the lease for 6 years at 2,000 per month or to purchase the equipment for 25,000 (a price considerably less than the expected fair value) after the initial lease term of 4 years. Why would this lease qualify as a finance lease?Comprehensive Landlord Company and Tenant Company enter into a noncancelable, direct financing lease on January 1, 2019, for nonspecialized equipment that cost the Landlord 280,000 (useful life is 6 years with no residual value). The fair value of the equipment is 300,000. The interest rate implicit in the lease is 14%. The 6-year lease requires 6 equal annual amounts payable each January 1, beginning with January 1, 2019. Tenant pays all executory costs directly to a third party on December 1 of each year. The equipment reverts to the lessor at the termination of the lease. Assume that there are no initial direct costs. Landlord expects to collect all rental payments. Required: 1. Next Level (a) Show how landlord should compute the annual rental amounts, (b) Discuss how the Tenant Company should compute the present value of the lease payments. What additional information would be required to make this computation? 2. Next Level Prepare a table summarizing the lease and interest receipts that would be suitable for Landlord. Under what conditions would this table be suitable for Tenant? 3. Assuming that the table prepared in Requirement 2 is suitable for both the lessee and the lessor, prepare the journal entries for both firms for the years 2019 and 2020. Use the straight-line depreciation method for the leased equipment. The executory costs paid by the lessee are in 2019: insurance, 700 and property taxes, 800; in 2020: insurance, 600 and property taxes, 750. 4. Next Level Show the items and amounts that would be reported on the comparative 2019 and 2020 income statements and ending balance sheets for both the lessor and the lessee, using the change in present value approach.Use the information in RE20-3. Prepare the journal entries that Garvey Company would make in the first year of the lease assuming the lease is classified as a finance lease. However, assume that Garvey is now required to make the 65,949.37 payments on January 1 each year and that the fair value at the lease inception is now 275,000 (65,949:37 4:169865).
- On October 1, 2019, Grahams WeedFeed Inc. signs a contract to maintain the grounds for BigData Corp. The contract ends on March 31, 2020, and has a monthly payment of 3,200. The contract does not include any stipulations for additional periods. On June 1, Grahams WeedFeed and BigData sign a new 12-month contract that is retroactive to April 1, 2020. The monthly fee for the new contract is 4,000 per month and is also retroactive to April 1, 2020. During April and May of 2020, while the new contract was being negotiated, Grahams Weed Feed continued to maintain the grounds, and BigData continued to pay 3,200 per month. BigData was satisfied with Grahams WeedFeeds performance, and the only issue during negotiations was the monthly fee. Required: Determine if a valid contract exists between Grahams WeedFeed and BigData during April and May 2020.On January 1, 2019, Mopps Corp. agrees to provide Conklin Company 3 years of cleaning and janitorial services. The contract sets the price at 12,000 per year, which is the normal standalone price that Mopps charges. On December 31, 2020, Mopps and Conklin agree to modify the contract. Mopps reduces the fee for the third year to 10,000, and Conklin agrees to a 4-year extension that will extend services through December 31, 2024, at a price of 15,000 per year. At the time that the contract is modified, Mopps is charging other customers 13,500 for the cleaning and janitorial service. Required: Should Mopps and Conklin treat the modification as a separate contract? If so how should Mopps account for the contract modification on December 31, 2020? Support your opinion by discussing the application to this case of the factors that need to be considered for determining the accounting for contract modifications.On August 1, 2019, Kern Company leased a machine to Day Company for a 6-year period requiring payments of 10,000 at the beginning of each year. The machine cost 40,000 and has a useful life of 8 years with no residual value. Kerns implicit interest rate is 10%, and present value factors are as follows: Present value for an annuity due of 1 at 10% for 6 periods4.791 Present value for an annuity due of 1 at 10% for 8 periods5.868 Kern appropriately recorded the lease as a sales-type lease. At the inception of the lease, the Lease Receivable account balance should be: a. 60,000 b. 58,680 c. 48,000 d. 47,910
- Determining Type of Lease and Subsequent Accounting On January 1, 2019, Ballieu Company leases specialty equipment with an economic life of 8 years to Anderson Company. The lease contains the following terms and provisions: The lease is noncancelable and has a term of 8 years. The annual rentals arc 35,000, payable at the beginning of each year. The interest rate implicit in the lease is 14%. Anderson agrees to pay all executory costs directly to a third party and is given an option to buy the equipment for 1 at the end of the lease term, December 31, 2026. The cost of the equipment to the lessee is 150,000, and the fair value is approximately 185,100. Ballieu incurs no material initial direct costs. It is probable that Ballieu will collect the lease payments. Ballieu estimates that the fair value is expected to be significantly greater than 1 at the end of the lease term. Ballieu calculates that the present value on January 1, 2019, of 8 annual payments in advance of 35,000 discounted at 14% is 185,090.68 (the 1 purchase option is ignored as immaterial). Required: 1. Next Level Identify the classification of the lease transaction from Ballices point of view. Give the reasons for your classification. 2. Prepare all the journal entries tor Ballieu for the years 2019 and 2020. 3. Discuss the disclosure requirements for the lease transaction in Ballices notes to the financial statements.Lessor Accounting Issues Ramsey Company leases heavy equipment to Terrell Inc. on March 1, 2019, on the following terms: 1. Twenty-four lease rentals of 2,950 at the beginning of each month are to be paid by Terrell, and the lease is noncancelable. 2. The cost of the heavy equipment to Ramsey was 55,000. 3. Ramsey uses an implicit interest rate of 18% per year and will account for this lease as a sales-type lease. Required: Prepare journal entries for Ramsey (the lessor) to record the lease contract on March 1, 2019, the receipt of the first two lease rentals, and any interest income for March and April 2019. (Round your answers to the nearest dollar.)Lessee Accounting Issues Timmer Company signs a lease agreement dated January 1, 2019, that provides for it to lease equipment from Landau Company beginning January 1, 2019. The lease terms, provisions, and related events are as follows: The lease is noncancelable and has a term of 5 years. The annual rentals are 83,222.92, payable at the end of each year, and provide Landau with a 12% annual rate of return on its net investment. Timmer agrees to pay all executory costs directly to a third party on December 1 of each year. In 2019, these were insurance, 3,760; property taxes, 5,440. In 2020: insurance, 3,100; property taxes, 5,330. There is no renewal or bargain purchase option. Timmer estimates that the equipment has a fair value of 300,000, an economic life of 5 years, and a zero residual value. Timmers incremental borrowing rate is 16%, it knows the rate implicit in the lease, and it uses the straightline method to record depreciation on similar equipment. Required: 1. Calculate the amount of the asset and liability of Timmer at the inception of the lease. (Round to the nearest dollar.) 2. Prepare a table summarizing the lease payments and interest expense. 3. Prepare journal entries on the books of Timmer for 2019 and 2020. 4. Next Level Prepare a partial balance sheet in regard to the lease for Timmer for December 31, 2019. Use the present value of next years payment approach to classify the finance lease obligation between current and noncurrent. 5. Next Level Prepare a partial balance sheet in regard to the lease for Timmer for December 31, 2019. Use the change in present value approach to classify the finance lease obligation between current and noncurrent.
- Determining Type of Lease and Subsequent Accounting On January 1, 2019, Caswell Company signs a 10-year cancelable (at the option of either party) agreement to lease a storage building from Wake Company. The following information pertains to this lease agreement: 1. The agreement requires rental payments of 100,000 at the beginning of each year. 2. The cost and fair value of the building on January 1, 2019, is 2 million. The storage building has not been specialized for Caswell. 3. The building has an estimated economic life of 50 years, with no residual value. Caswell depreciates similar buildings according to the straight-line method. 4. The lease does not contain a renewable option clause. At the termination of the lease, the building reverts to the lessor. 5. Caswells incremental borrowing rate is 14% per year. Wake set the annual rental to ensure a 16% rate of return (the loss in service value anticipated for the term of the lease). Caswell knows the implicit interest rate. 6. Executory costs of 7,000 annually, related to taxes on the property, are paid by Caswell directly to the taxing authority on Dec. 31 of each year. Required: 1. Determine what type of lease this is for the lessee. 2. Prepare appropriate journal entries on the lessees books to reflect the signing of the lease agreement and to record the payments and expenses related to this lease for the years 2019 and 2020.Lessee and Lessor Accounting Issues Diego Leasing Company agrees to provide La Jolla Company with equipment under a noncancelable lease for 5 years. The equipment has a 5-year life, cost Diego 25,000, and will have no residual value when the lease term ends. The fair value of the equipment is 30,000. La Jolla agrees to pay all executory costs (500 per year) throughout the lease period directly to a third party. On January 1, 2019, the equipment is delivered. Diego expects a 14% return on its net investment. The five equal annual rents are payable in advance starting January 1, 2019. Required: 1. Assuming this is a sales-type lease for the Diego and a finance lease for the La Jolla, prepare a table summarizing the lease and interest payments suitable for use by either party. 2. Next Level On the assumption that both companies adjust and close books each December 31, prepare journal entries relating to the lease for both companies through December 31, 2020, based on data derived in the table. Assume that La Jolla depreciates similar equipment by the straight line methodLessee Accounting Issues Sax Company signs a lease agreement dated January 1, 2019, that provides for it to lease computers from Appleton Company beginning January 1, 2019. The lease terms, provisions, and related events are as follows: 1. The lease term is 5 years. The lease is noncancelable and requires equal rental payments to be made at the end of each year. The computers are not specialized for Sax. 2. The computers have an estimated life of 5 years, a fair value of 300,000, and a zero estimated residual value. 3. Sax agrees to pay all executory costs directly to a third party. 4. The lease contains no renewal or bargain purchase options. 5. The annual payment is set by Appleton at 83,222.92 to earn a rate of return of 12% on its net investment. Sax is aware of this rate. Saxs incremental borrowing rate is 10%. 6. Sax uses the straight-line method to record depreciation on similar equipment. Required: 1. Next Level Examine and evaluate each capitalization criteria and determine what type of lease this is for Sax. 2. Calculate the amount of the asset and liability of Sax at the inception of the lease (round to the nearest dollar). 3. Prepare a table summarizing the lease payments and interest expense. 4. Prepare journal entries for Sax for the years 2019 and 2020.