1.
If the Company C have recorded the loan agreement in its general ledger and the impact of this new loan agreement in the balance sheet of Company C during the year 2016 with explanation.
2.
To prepare: The entry to record the borrowing of Company F on July 1, 2018. And to find out the impact on its assets, liabilities and equity on that date.
3.
The interest expense accrued by Company F during the end of fiscal year 2018 and the impact of adjusting entry in the assets, liabilities and equity of Company F.
4.
The total interest expense related to the hypothetical borrowing for 2018.
5.
If the hypothetical borrowing in 2018 causes the Net Adjusted Leverage Ratio to increase. Decrease or stay the same with explanation.
6.
If the hypothetical borrowing in 2018 causes the EBITDAR Ratio to increase. Decrease or stay the same.
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Financial Accounting (12th Edition) (What's New in Accounting)
- Please help, this is an example out of our textbook that needs to be done in preperation for our test later this week. Due to online learning I have fallen behind and don't know what steps to follow or what formulas to use. You are an investment analyst at FI Investments tasked to value FBC firm a Southern Agricultural Conglomerate. The following financial information was recently released for FBC. The company’s 2018 and 2017 annual financial reports are contained in tables 1 and 2 below, along with important additional information: Table 1: FBC statement of financial position (R millions) 2018 2017 Cash and equivalents R149 R83 Accounts receivable 295 265 Inventory 275 285 Total current assets R719 R633 Total fixed assets 3 909 3 856 Accounts payable 228 220 Notes payable 0 0 Total current liabilities 228 220 Long term debt 1 800 1 650 Total…arrow_forwardCan I get the solution for number 2? The Tusquittee company is a retail company that began operating on October 1, 2018, when it incorporated in the state of North Carolina. The Tusquitte Company is authorized to issue 100,000 shares of $1 par value common stock and 50,000 shares of 5 %, $50 par value preferred stock. The Company sells a product that includes a one year warranty and records estimated warranty payable each month. Customers are charged a 6 % state sale tax. The company uses a perpetual inventory system. There are three employees that are paid a monthly salary on the last day of the month. Following is the chart of accounts for The Tusquittee Company. As a new business, all beginning balances are $0arrow_forward(Learning Objective 6: Apply GAAP for notes receivable) Record the followingnote receivable transactions in the journal of Windham Golf. How much interest revenue didWindham earn this year? Use a 365-day year for interest computations, and round interestamounts to the nearest dollar. Windham Golf has a December 31 fiscal year-end.1 Loaned $17,000 cash to Jill Wateman on a one-year, 8% note.6 Performed service for Fairway Pro, receiving a 90-day, 10% note for$14,000.16Company.31 Accrued interest revenue for the year.Received a $5,000, six-month, 5% note on account from Paulsonarrow_forward
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- RISING_STAR company was incorporated in the first of June 2020. Money was raised at that time with total $1000 which include 30% from bank loan, 30% from corporate bond and the rest from its own money. The company business is selling laptop. Total equipment costs $600. The company has 150 laptops with total value of $300 and $100 in cash. The maturity of bank loan and corporate bond are 3 years and 5 years respectively. Lending rate is 9% and coupon rate is 12%. Assume the laptops bought at 01/06/2020 are identical and have the same cost. Corporate tax rate is 23%. Duration of the equipment is 5-year. Show the income statement, cash flow statement and balance sheet of the company at 31/12/2020 if: The company start its operations on June 1st, 2020. Over the period, it sells 60 laptop for $400. The company invited Diva My Linh to perform on its Grand Opening Day and paid her $10. The salary paid to the CEO is $2 per month and the other administrative costs are $4 in total. In the 1st…arrow_forwardPLEASE SOLVE THIS ANSWER IN WORD DOCUMENT. I FOUND ALOT OF SAME ANSWERS ON CHEG ,BUT ALL ANSWERS ARE DIFFERENT, PLEASE SOLVE IT CORRECTLY. THANKS..... . Oaktree Industries Inc. has the following selected accounts at December 31, 2020: Notes payable, long-term 100,000 Interest payable (due Mar 1/21) 10,000 Accounts payable 56,000 Salary Payable 16,000 Bonds payable 300,000 Equipment 120,000 Current portion of bonds payable 20,000 Discount on bonds payable (LT) 10,000 Accounts receivable 34,000 Required: Prepare the liabilities section of Oaktree’s balance sheet at December 31, 2020, to show how Oaktree would report these items. Report total current liabilities and total liabilities. You may use Exhibit 1-10 as reference.(with GST)arrow_forwardThe following transactions apply to Walnut Enterprises for 2018, its first year of operations: Received $50,000 cash from the issue of a short-term note with a 6 percent interest rate and a one-year maturity. The note was made on April 1, 2018. Received $130,000 cash plus applicable sales tax from performing services. The services are subject to a sales tax rate of 6 percent. Paid $62,000 cash for other operating expenses during the year. Paid the sales tax due on $110,000 of the service revenue for the year. Sales tax on the balance of the revenue is not due until 2019. Recognized the accrued interest at December 31, 2018. The following transactions apply to Walnut Enterprises for 2019: Paid the balance of the sales tax due for 2018. Received $201,000 cash plus applicable sales tax from performing services. The services are subject to a sales tax rate of 6 percent. Repaid the principal of the note and applicable interest on April 1, 2019. Paid $102,500 of other operating expenses…arrow_forward
- Aggressive Corporation approaches Matt Taylor, a loan officer for Oklahoma State Bank, seeking toincrease the company's borrowings with the bank from $100,000 to $150,000. Matt has an uneasyfeeling as he examines the loan application from Aggressive Corporation, which just completed itsfirst year of operations. The application included the following financial statements The income statement submitted with the application shows a net income of $30,000 in the first yearof operations. Referring to the balance sheet, this net income represents a more-than-acceptable15% rate of return on assets of $200,000.Matt's concern stems from his recollection that the $100,000 note payable reported on the balancesheet is a three-year loan from his bank, approved earlier this year. He recalls another promising newcompany that, just recently, defaulted on its loan due to its inability to generate sufficient cash flowsto meet its loan obligations.Seeing Matt's hesitation, Larry Bling, the CEO of…arrow_forwardE5-18A. (Learning Objective 5: Apply GAAP for uncollectible receivables) At December 31,2018, Waco Travel Agency has an Accounts Receivable balance of $93,000. Allowance forUncollectible Accounts has a credit balance of $870 before the year-end adjustment. Servicerevenue (all on account) for 2018 was $800,000. Waco estimates that its uncollectible-accountexpense for the year is 1% of service revenue. Make the year-end entry to record uncollectibleaccount expense. Show how Accounts Receivable and Allowance for Uncollectible Accountsare reported on the balance sheet at December 31, 2018.arrow_forwardEthics and Sales Returns At the end of 2019, the accounting firm for which you work is auditing the books of Debitus Publishing Inc. for the first time. Debitus, a calendar year company, publishes textbooks that are used in colleges and universities across the country. These textbooks are purchased by students through their campus bookstores. Debitus normally makes its biggest sales at the beginning of the fall semester. In the past, Debitus has always recorded sales returns in the spring semester when the campus bookstores return any unsold textbooks. This has been satisfactory because the returns have been immaterial in amount. In 2018, as a promotional strategy to stimulate sales, Debitus began offering bookstores a reduced price if they ordered more textbooks. There is no penalty for returns of these textbooks if the bookstores cannot sell them to customers. This strategy worked; sales increased by 10% during 2018. In early 2019, however, a substantial amount of unsold textbooks were returned by bookstores to Debitus. Continuing the promotional strategy, sales increased by 15% during 2019. While reviewing the sales returns account for 2019, you notice that the only entry was for the textbooks returned earlier in the year. You note that these returns amounted to about 5% of the sales for the fall semester of 2018. Because this pattern of returns seems to you to be a trend that will continue, you raise the issue with the company controller as to whether all of the sales for the fall semester of 2019 are actually revenue. The controller responds, Of course tiiey are revenue; we sold the textbooks. Just because there will some returns doesnt mean we havent made sales. Besides, we dont know what percentage the returns will be. They might be as much as 5%, but definitely not more. Furthermore, we have already recorded all those returns at the beginning of 2019 that really applied to 2018. So we already have recorded our fair share of returns for 2019. As long as we record returns consistently, it will all work out. We dont want a drop in earnings for 2019 because of a change in customer returns, our shareholders wouldnt like that. Lets just leave this issue alone. Required: From financial reporting and ethical perspectives, what do you think about Debituss policy in regard to sales returns?arrow_forward
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