Concept explainers
Concept introduction:
Receivables:
Companies generally make credit sales to improve their business and expand their customer base. When a credit sales is made the amount that the company has to receive from its customers is known as receivable. Usually company all the customers does not repay the amount they owe to the company and hence there are chances of some not repaying the amount and these are called as
To prepare journal entries for the May and June transactions of Front Row Entertainment.
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Cornerstones of Financial Accounting
- DISCUSSION OF TEXT HRM INCIDENTS HRM Incident 1: The Wrong Approach Eric Ardoin is a human resource manager at Epler Manufacturing Company in Greenfield, Wisconsin. He was considering the need to recruit qualified blacks for Epler when Shontae Blount walked into his office. "Got a minute?" asked Shontae. "I need to talk to you about the recruiting trip to Michigan State next week." "Sure," Eric replied, "but, first I need your advice about something. How can we get more blacks to apply for work here? We're running ads on WBEZ radio along with the classified ads in the Tribune. I think you and John have made recruiting trips to every community college within 200 miles. We've encouraged employee referral, too, and I still think that's our most reliable source of new workers. But we just aren't getting any black applicants." From the president on down, the management at Epler claimed commitment to equal employment opportunity. According to Eric, the commitment went much deeper than…arrow_forwardmessageQ&A notifications account_circle Business AccountingQ&A LibraryQuestion 1 Jo, a lawyer, took a voluntary redundancy from her full-time position at a law firm. She had done some photography when she was younger and decided to engage an architect to build her a dark room in her house. The dark room was completed at a cost of $55,000, equipped with all of the equipment that she needed to take her photography further. Jo advertised her services in the local newspaper and hired an assistant to help carry her expensive photography equipment around photo shoots, but few people were interested in paying Jo for her photography. For the year ending 30 June 2020 Jo sold $12,200 worth of professionally finished photographs and had expenses of $16,500. She is considering selling her photography equipment and taking up painting. Referring mainly to income tax cases, advise Jo of the tax implications of these activities. Would she be carrying on a business? What…arrow_forwardComprehensive Problem 5 Part B: Note: This section is a continuation from Part A of the comprehensive problem. Be sure you have completed Part A before attempting Part B. You may have to refer back to data presented in Part A and use answers from Part A when completing this section. Genuine Spice Inc. began operations on January 1 of the current year. The company produces eight- ounce bottles of hand and body lotion called Eternal Beauty. The lotion is sold wholesale in 12-bottle cases for $100 per case. There is a selling commission of $20 per case. The January direct materials, direct labor, and factory overhead costs are as follows: DIRECT MATERIALS Cost Behavior Units per Case Cost per Unit Direct Materials Cost per Case Cream base Variable 100 ozs. $0.02 $2.00 Natural oils Variable 30 ozs. 0.30 9.00 Bottle (8-oz.) Variable 12 bottles 0.50 6.00 $17.00 DIRECT LABOR Department Cost Behavior Time per Case Labor Rate per Hour Direct…arrow_forward
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- CONTINUING PROBLEM: FRONT ROW ENTERTAINMENT After a successful first year, Cam and Anna decide to expand Front Row Entertainments operations by becoming a venue operator as well as a tour promoter. A venue operator contracts with promoters to rent the venue (which can range from amphitheaters to indoor arenas to night-clubs) for events on specific dates. In addition to receiving revenue from renting the venue, venue operators also provide services such as concessions, parking, security, and ushering services. By vertically integrating their business, Cam and Anna can reduce the expense that they pay to rent venues. In addition, they will generate additional revenue by providing services to other tour promoters. After a little investigation, Cam and Anna locate a small venue operator that owns The Chicago Music House, a small indoor arena with a rich history in the music industry. The current owner has experienced severe health issues and has let the arena fall into a state of disrepair. However, he would like the arena to be preserved and its musical legacy to continue. After a short negotiation, on January 1, 2020, Front Row purchases the venue by paying $10,000 in cash and signing a 15-year 10% note for $380,000. In addition, Front Row purchases the right to use the Chicago Music House name for $25,000 cash. During the month of January 2020, Front Row incurred the following as they renovated the arena and prepared it for the first major event scheduled for February. Jan. 5 Paid $21,530 to repair damage to the roof of the arena. 10 Paid $45,720 to remodel the stage area. 21 Purchased concessions equipment (e.g., popcorn poppers, soda machines) for $12,350. Renovations were completed on January 28, and the first concert was held in the arena on February 1. The arena is expected to have a useful life of 30 years and a residual value of $35,000. The concessions equipment will have a useful life of 5 years and a residual value of $250. Required: Prepare the journal entries to record the acquisition of the arena, the concessions equipment, and the trademark.arrow_forwardCONTINUING PROBLEM: FRONT ROW ENTERTAINMENT After a successful first year, Cam and Anna decide to expand Front Row Entertainments operations by becoming a venue operator as well as a tour promoter. A venue operator contracts with promoters to rent the venue (which can range from amphitheaters to indoor arenas to night-clubs) for events on specific dates. In addition to receiving revenue from renting the venue, venue operators also provide services such as concessions, parking, security, and ushering services. By vertically integrating their business, Cam and Anna can reduce the expense that they pay to rent venues. In addition, they will generate additional revenue by providing services to other tour promoters. After a little investigation, Cam and Anna locate a small venue operator that owns The Chicago Music House, a small indoor arena with a rich history in the music industry. The current owner has experienced severe health issues and has let the arena fall into a state of disrepair. However, he would like the arena to be preserved and its musical legacy to continue. After a short negotiation, on January 1, 2020, Front Row purchases the venue by paying $10,000 in cash and signing a 15-year 10% note for $380,000. In addition, Front Row purchases the right to use the Chicago Music House name for $25,000 cash. During the month of January 2020, Front Row incurred the following as they renovated the arena and prepared it for the first major event scheduled for February. Jan. 5 Paid $21,530 to repair damage to the roof of the arena. 10 Paid $45,720 to remodel the stage area. 21 Purchased concessions equipment (e.g., popcorn poppers, soda machines) for $12,350. Renovations were completed on January 28, and the first concert was held in the arena on February 1. The arena is expected to have a useful life of 30 years and a residual value of $35,000. The concessions equipment will have a useful life of 5 years and a residual value of $250. Required: Would amortization expense be recorded for the trademark? Why or why not?arrow_forwardCONTINUING PROBLEM: FRONT ROW ENTERTAINMENT After a successful first year, Cam and Anna decide to expand Front Row Entertainments operations by becoming a venue operator as well as a tour promoter. A venue operator contracts with promoters to rent the venue (which can range from amphitheaters to indoor arenas to night-clubs) for events on specific dates. In addition to receiving revenue from renting the venue, venue operators also provide services such as concessions, parking, security, and ushering services. By vertically integrating their business, Cam and Anna can reduce the expense that they pay to rent venues. In addition, they will generate additional revenue by providing services to other tour promoters. After a little investigation, Cam and Anna locate a small venue operator that owns The Chicago Music House, a small indoor arena with a rich history in the music industry. The current owner has experienced severe health issues and has let the arena fall into a state of disrepair. However, he would like the arena to be preserved and its musical legacy to continue. After a short negotiation, on January 1, 2020, Front Row purchases the venue by paying $10,000 in cash and signing a 15-year 10% note for $380,000. In addition, Front Row purchases the right to use the Chicago Music House name for $25,000 cash. During the month of January 2020, Front Row incurred the following as they renovated the arena and prepared it for the first major event scheduled for February. Jan. 5 Paid $21,530 to repair damage to the roof of the arena. 10 Paid $45,720 to remodel the stage area. 21 Purchased concessions equipment (e.g., popcorn poppers, soda machines) for $12,350. Renovations were completed on January 28, and the first concert was held in the arena on February 1. The arena is expected to have a useful life of 30 years and a residual value of $35,000. The concessions equipment will have a useful life of 5 years and a residual value of $250. Required: Prepare the journal entries to record the expenditures made in January.arrow_forward
- CONTINUING PROBLEM: FRONT ROW ENTERTAINMENT After a successful first year, Cam and Anna decide to expand Front Row Entertainments operations by becoming a venue operator as well as a tour promoter. A venue operator contracts with promoters to rent the venue (which can range from amphitheaters to indoor arenas to night-clubs) for events on specific dates. In addition to receiving revenue from renting the venue, venue operators also provide services such as concessions, parking, security, and ushering services. By vertically integrating their business, Cam and Anna can reduce the expense that they pay to rent venues. In addition, they will generate additional revenue by providing services to other tour promoters. After a little investigation, Cam and Anna locate a small venue operator that owns The Chicago Music House, a small indoor arena with a rich history in the music industry. The current owner has experienced severe health issues and has let the arena fall into a state of disrepair. However, he would like the arena to be preserved and its musical legacy to continue. After a short negotiation, on January 1, 2020, Front Row purchases the venue by paying $10,000 in cash and signing a 15-year 10% note for $380,000. In addition, Front Row purchases the right to use the Chicago Music House name for $25,000 cash. During the month of January 2020, Front Row incurred the following as they renovated the arena and prepared it for the first major event scheduled for February. Jan. 5 Paid $21,530 to repair damage to the roof of the arena. 10 Paid $45,720 to remodel the stage area. 21 Purchased concessions equipment (e.g., popcorn poppers, soda machines) for $12,350. Renovations were completed on January 28, and the first concert was held in the arena on February 1. The arena is expected to have a useful life of 30 years and a residual value of $35,000. The concessions equipment will have a useful life of 5 years and a residual value of $250. Required: Compute and record the depreciation for 2020 (11 months) on the arena (use the straight-line method) and on the concessions equipment (use the double-declining-balance method). Round all answers to the nearest dollar.arrow_forwardContinuing ProblemChapter 1 - Instruction #1 Peyton Smith enjoys listening to all types of music and owns countless CDs. Over the years, Peyton has gained a local reputation for knowledge of music from classical to rap and the ability to put together sets of recordings that appeal to all ages. During the last several months, Peyton served as a guest disc jockey on a local radio station. In addition, Peyton has entertained at several friends’ parties as the host deejay. On June 1, 20Y5, Peyton established a corporation known as PS Music. Using an extensive collection of music MP3 files, Peyton will serve as a disc jockey on a fee basis for weddings, college parties, and other events. During June, Peyton entered into the following transactions: June 1. Deposited $4,000 in a checking account in the name of PS Music in exchange for common stock. 2. Received $3,500 from a local radio station for serving as the guest disc jockey for June. 2. Agreed to share office space with a local…arrow_forward1. Explain how the organizations culture would influence the design of a new Accounting Information system for a company. 2. An university has various schools and departments that offer various Degree and Diploma courses. The University has been offering courses through two modes of study that include the Full-Time classes and Evening Classes. The university management has been evaluating the possibility of introducing a new mode of study where the university will offer the students the option of selecting 100% online classes option. The University will deploy this 100% online classes option by using Zoom video conferencing software. Other software’s and platforms that the university will use for the 100% online classes mode like google classroom and other softwares. The university has invited you as an expert of accounting information systems to help in the design and implementation of a new revenue transaction cycle system that will be used for the new 100% online classes option mode…arrow_forward
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