Answer:
Insurance $4,800 (debit)
prepaid insurance $4,800 (credit)
Explanation:
In order to find out adjusting entries. firstly, we need to calculate the difference between prepaid insurance account and Insurance account.
That could be done by subtracting $3,550 from $8,350.
Difference = 8350-3550= 4800
The following account balances at the beginning of January were selected from the general ledger of Fresh Bagel Manufacturing Company: Work in process inventory $0 Raw materials inventory $ 28 comma 000 Finished goods inventory $ 40 comma 100 Additional data: 1. Actual manufacturing overhead for January amounted to $ 62 comma 900. 2. Total direct labor cost for January was $ 63 comma 500. 3. The predetermined manufacturing overhead rate is based on direct labor cost. The budget for the year called for $ 251 comma 000 of direct labor cost and $ 350 comma 300 of manufacturing overhead costs. 4. The only job unfinished on January 31 was Job No. 151, for which total direct labor charges were $ 6 comma 100 (1 comma 000 direct labor hours) and total direct material charges were $ 14 comma 100. 5. Cost of direct materials placed in production during January totaled $ 123 comma 200. There were no indirect material requisitions during January. 6. January 31 balance in raw materials inventory was $ 35 comma 400. 7. Finished goods inventory balance on January 31 was $ 34 comma 500. What is the predetermined manufacturing overhead rate?
Answer:eral ledger of Fresh Bagel Manufacturing Company: Work in process inventory $0 Raw materials inventory $ 28 comma 000 Finished goods inventory $ 40 comma 100 Additional data: 1. Actual manufacturing overhead for January amounted to $ 62 comma 900. 2. Total direct labor cost for January was $ 63 comma 500. 3. The
Explanation:
ocess inventory $0 Raw materials inventory $ 28 comma 000 Finished goods inventory $ 40 comma 100 Additional data: 1. Actual manufacturing overhead for January amounted to $ 62 comma 900. 2. Total direct labor cost for January was $ 63 comma 500. 3. The predetermined manufacturing overhead rate is based on directestion
The following account balances at the beginning of January were selected from the general ledger of Fresh Bagel Manufacturing Company: Work in process inventory $0 Raw materials inventory $ 28 comma 000 Finished goods inventory $ 40 comma 100 Additional data: 1. Actual manufacturing overhead for January amounted to $ 62 comma 900. 2. Total direct labor cost for January was $ 63 comma 500. 3. The predetermined manufacturing overhead rate is based on direct labor cost. The budget for the year called for $ 251 comma 000 of direct labor cost and $ 350 comma 300 of manufacturing overhead costs. 4. The only job unfinished on January 31 was Job No. 151, for which total direct labor charges were $ 6 comma 100 (1 comma 000 direct labor hours) and total direct material charges were $ 14 comma 100. 5. Cost of direct materials placed in production during January totaled $ 123 comma 200. The
After calculating, the predetermined manufacturing overhead rate is approximately 1.395.
To determine the predetermined manufacturing overhead rate, we need to use the information given:
The predetermined manufacturing overhead rate is based on direct labor cost. The budget for the year states that the direct labor cost is expected to be $251,000, and the manufacturing overhead costs are expected to be $350,300.
To find the predetermined manufacturing overhead rate:
Predetermined Manufacturing Overhead Rate = Manufacturing Overhead Costs / Direct Labor Cost
Predetermined Manufacturing Overhead Rate = $350,300 / $251,000
Predetermined Manufacturing Overhead Rate ≈ 1.395
Therefore, the predetermined manufacturing overhead rate is approximately 1.395.
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CMS Corporation's balance sheet as of today is as follows: Long-term debt (bonds, at par) $10,000,000 Preferred stock 2,000,000 Common stock ($10 par) 10,000,000 Retained earnings 4,000,000 Total debt and equity $26,000,000 The bonds have a 4.0% coupon rate, payable semiannually, and a par value of $1,000. They mature exactly 10 years from today. The yield to maturity is 12%, so the bonds now sell below par. What is the current market value of the firm's debt
Answer:
$5,412,000
Explanation:
Given:
Long-term debt (bonds, at par):$10,000,000
Preferred stock :2,000,000
Common stock ($10 par): 10,000,000
Retained earnings: 4,000,000
Total debt and equity :$26,000,000
Coupon rate = 4%(semi annually)
Par value = $1000
YTM = 12%
Required:
Find the current market value of the firm's debt.
Find the bond price:
Bond price [tex] = (C * (\frac{1 - (\frac{1}{(1+i)^n})}{i}) + (\frac{m}{(1+i)^n}) [/tex]
[tex] = (C * (\frac{1 - (\frac{1}{(1+0.06)^2^0})}{0.06}) + (\frac{1000}{(1+0.06)^2^0}) [/tex]
[tex] = 541.20 [/tex]
Bond price = $541.20
Find number of bonds:
Number of bonds [tex] = \frac{10,000,000}{1,000} = 10,000[/tex]
Now, to find the current market value of the firm's debt, use:
Current market value of debt = number of bonds × bond price
= 10,000 × 541.20
= $5,412,000
Current market value of the firm's debt = $5,412,000
what is descriptive statistics?
Answer:
Descriptive statistics are brief descriptive coefficients that summarize a given data set, which can be either a representation of the entire or a sample of a population.
Bolton Tire Manufacturing and the union came to an impasse during negotiation of the collective bargaining agreement. Specifically, they could not agree on the wage increase for the employees. The union representative reported this information to the employees, and they staged a strike without the union's authorization.
A. The employees have engaged in an unfair labor practice strike.
B. The employees have engaged in an economic strike.
C. The employees have engaged in a sitdown strike.
D. None of the choices are correct.
Answer:
The correct answer is the option A: the employees have engaged in an unfair labor practice strike.
Explanation:
To begin with, due to the fact that the union was already establishing the area for the negotiation and they might have planeed obviously to keep trying to increase the situation in their favour then the action taken by the employees was a bit hurry and was obvious that was not thought very well with calm minds and therefore that they engaged in an unfair labor practice strike because they had to be patience and wait for the union to improve the situation for them, because their are the representatives and if the company sees that the workers do not obey to the representatives then the union will lose negotiation power and the situation will get worse for them.
When it comes to brochures and especially slides, Orange Photography would agree with the chapter that subtle details, such as ________ and ________, are just as important when connecting with one's audience.
a) the foreground; the background
b) consistent fonts; white space
c) consistent fonts; bullet lists
d) strategic color selections; consistent fonts
e) consistent color selections; multiple fonts
e) consistent color selections; multiple fonts
In May direct labor was 40% of conversion cost. If the manufacturing overhead for the month was $120,600 and the direct materials cost was $29,200, the direct labor cost was:
Answer:
direct labor= $80,400
Explanation:
Giving the following information:
In May direct labor was 40% of conversion cost. The manufacturing overhead for the month was $120,600.
The conversion costs are the sum of direct labor and manufacturing overhead.
Conversion costs= 120,600/0.6= 201,000
direct labor= 210,000*0.4= 80,400
The marketing manager believes that increasing advertising costs by $74,000 in 2020 will increase the company’s sales volume to 12,700 units. Prepare a forecasted contribution margin income statement for 2020 assuming the company incurs the additional advertising costs.
Answer:
Instructions are below.
Explanation:
Giving the following information:
The marketing manager believes that increasing advertising costs by $74,000 in 2020 will increase the company’s sales volume to 12,700 units.
We weren't provided with enough information to solve the requirement. But, I will provide the general structure:
Sales= (number of units*selling price per unit)=
Total variable cost= (total variable cost per unit*number of units)=
Contribution margin=
Fixed costs= (fixed costs + incremental fixed costs)=
Net operating income
If we want to determine the effect on income without an income statement:
Effect of income= incremental units*contribution margin - incremental fixed costs
Contribution margin= selling price - unitary variable cost
On September 1, Knack Company signed a $50,000, 90-day, 5% note payable with Central Savings Bank. What is the journal entry that should be recorded by Knack upon maturity of the note
Answer:
A journal entry was prepared for KNACK COMPANY that recorded Knack Maturity of Notes.
Explanation:
Solution
Given That:
KNACK COMPANY
JOURNAL ENTRY
Date Accounts and Explanation Debit Credit
Sep 01 5% Notes Payable A/C 50000
Interest Expenses A/C (50000*5%*90/360)625
Cash Account 50625
(record maturity of notes payable)
Therefore from the Journal entry, Debit notes payable 50000; Debit Interest Epenses 625; Credit Cash 50625.
A company has two departments, Y and Z that incur delivery expenses. An analysis of the total delivery expense of $15,000 indicates that Dept. Y had a direct expense of $1,600 for deliveries and Dept. Z had no direct expense. The indirect expenses are $13,400. The analysis also indicates that 55% of regular delivery requests originate in Dept. Y and 45% originate in Dept. Z. Departmental delivery expenses for Dept. Y and Dept. Z, respectively, are:
Answer:
department y = $8,970
department z = $6,030
Explanation:
departments direct expenses indirect expenses
y $1,600 $13,400 x 55% = $7,370
z $0 $13,400 x 45% = $6,030
total delivery expenses:
department y = $1,600 + $7,370 = $8,970
department z = $0 + $6,030 = $6,030
indirect delivery expenses are allocated based on the percentage of use by each department.
United Apparel has the following balances in its stockholders' equity accounts on December 31, 2021: Treasury Stock, $850,000; Common Stock, $600,000; Preferred Stock, $3,600,000; Retained Earnings, $2,200,000; and Additional Paid-in Capital, $8,800,000.
Required:
Prepare the stockholders' equity section of the balance sheet for United Apparel as of December 31, 2021. (Amounts to be deducted should be indicated by a minus sign.)
Answer:
The answer is $14,350,000
Explanation:
UNITED CAPITAL
BALANCE SHEET
(STOCKHOLDERS' EQUITY SECTION)
DECEMBER 31, 2021
Preferred Stock $3,600,000
Common Stock. $600,000
Additional Paid-in Capital $8,800,000
Total Paid-in Capital. $13,000,000
Retained Earnings $2,200,000
Treasury Stock,. -$850,000
Total Stockholders'equity $14,350,000
Deborah Lewis, general manager of the Northwest Division of Berkshire Co., has significant authority over pricing decisions as well as programs that involve cost reduction/control. The data that follow relate to upcoming divisional operations:
Average invested capital: $15,000,000
Annual total fixed costs: $3,900,000
Variable cost per unit: $80
Number of units expected to be sold: 120,000
Assume the unit selling price is $132 and that Berkshire has a 16% imputed interest charge.
Top management will promote Deborah to corporate headquarters if her division can generate $200,000 of residual income (RI). If Deborah desires to move to corporate, what adjustment must the division do to the amount of annual total fixed costs?
Answer:
The revised fixed costs = $3,640,000
Explanation:
Calculation of Residual Income:
Residual Income = Net income - (Invested capital * Minimum required rate of return)
Net Income = Sales - Variable costs - Fixed costs
Net Income = (120,000*132) - (120,000*80) - 3,900,000
Net Income = $2,340,000
Invested capital = $15,000,000
Minimum required rate of return = 16%
Therefore, residual income = $2,340,000 - ($15,000,000 * 16%)
= -$60,000
Hence, adjustment to be made to the amount of fixed costs so that residual income becomes $200,000 = $200,000+$60,000 = $260,000
Therefore, revised fixed costs = $3,900,000 - $260,000 = $3,640,000
Last week, Railway Tours paid its annual dividend of $1.20 per share. The company has been reducing the dividends by 10 percent each year. What is the value of this stock at a discount rate of 13 percent
Answer: $4.70
Explanation:
The Gordon Growth Model allows for the calculation of stock value using the predicted growth rate of dividends and the discount rate.
The formula is;
Value of stock = Next Dividend / ( Discount rate - growth rate)
Next Dividend = Current dividend * growth rate
= 1.2 * ( 1 - 0.1)
= $1.08
Value of Stock = 1.08 / ( 13% - (-10%))
= 1.08 / ( 13% + 10%)
= 1.08 / 23%
= $4.70
T. Boone Pickens football stadium at Oklahoma State University has a seating capacity of about 40,000. Assume the stadium sells out all six home games before the season begins and the athletic department collects $31 million in ticket sales.
Required:
a. What was the average price per season ticket and average price per individual game ticket sold?
b. Record the advance collection of $29 million in ticket sales.
c. Record the revenue earned after the first home game was completed.
Answer:
Total collection of ticket sales is $31 million
Seating capacity is 40,000 tickets
Average price per season ticket = Total collection / Seating capacity
=$31,000,000 / 40,000
=$775
Therefore, the average price per season ticket is $775
Average price per individual game ticket sold = Average price per ticket / Number of games
= 775 / 6
= $129
Therefore, the average price per individual game sold is $129 and the number of games is 6
2. Journal entry to record advance collection of $31 million in ticket sales
Account Title and Explanation Debit$ Credit$
Cash $31,000,000
Unearned Ticket Revenue $31,000,000
(To record entry for advance received)
3. Journal entry to record revenue earned after the first home game was completed
Account Title and Explanation Debit$ Credit$
Unearned Ticket Revenue 5,160,000
($129 per individual game * 40,000 tickets)
Service Revenue 5,160,000
(To record unearned ticket revenue)
Blossom Corporation purchased a patent for $385500 on September 1, 2019. It had a useful life of 10 years. On January 1, 2021, Blossom spent $95100 to successfully defend the patent in a lawsuit. Blossom feels that as of that date, the remaining useful life is 5 years. What amount should be reported for patent amortization expense for 2021
Answer:
$85,840
Explanation:
Calculation for Blossom Corporation amount to be reported for patent amortization expense for 2021
First step is to calculate the amortization from 1 sept 2019 to January 1 2021 which is:
[($385,500 ÷ 10) × 1 +1/3]
=$38,550×1.3333333
= $51,400
Second step is to calculate for the remaining value before defence which is:
=$385,500-$51,400
=$334,100
The third step is to calculate for the cost of successful defence which is :
($334,100+ $95,100) ÷ 5
=$429,200÷5
= $85,840
Therefore the amount that should be reported for patent amortization expense for 2021 will be $85,840
Re-visit the roadmap that you began at the start of your program of study. Complete information regarding this course. In the discussion, reflect on how this course meets your career goals. What have you gleaned from the course that will help you in your career path?
Explanation:
The business administration course is a course that covers all organizational systems and provides the knowledge of several important tools to be applied in a company to achieve several strategic and economic advantages.
It is important for the career to have knowledge about management, strategy, communication, finance, and other variables that will be essential to become an ethical leader and that can influence personnel to create an organizational culture geared towards open communication, values and ethic.
A classic statement regarding project termination and closeout is, "The termination of a project is:
a. A project.
b. The start of the next project.
c. Never ending.
d. An opportunity.
Answer: a project
Explanation:
A classic statement regarding project termination and closeout is that the termination of a project is a project. This is because during the project termination stage, many other things are still being done. Project termination stage in a project occurs after the completion of the implementation phase whereby the project deliverables have been given to the client.
The main purpose this stage is to know how well the project team has performed, and also to learn lessons for future purpose. During the project termination and closeout, a final project status report will be prepared and every significant variances has to be explained here after which a project review will be done with the stakeholders and the client. So, the project termination and closeout phase is actually another work on its own.
Scorpion Company has net credit sales of $5,400,000 for the year and it estimates that doubtful accounts will be 2% of sales. If its Allowance for Doubtful Accounts has a credit balance of $18,000 prior to adjustment, its balance after adjustment will be a credit of:
Answer:
Balance after adjustment will be a credit of $90,000
Explanation:
Particulars Amount
Non-collectible accounts $108,000
Credit balance $18,000
Balance Adjustment $90,000
Balance after adjustment will be a credit of $90,000
Note: Non-collectible accounts = 2% * $5,400,000 =$108000
Clothing Emporium was organized on January 1, 2021. The firm was authorized to issue 160,000 shares of $10 par value common stock. During 2021, Clothing Emporium had the following transactions relating to stockholders' equity: Issued 48,000 shares of common stock at $12 per share. Issued 32,000 shares of common stock at $13 per share. Reported a net income of $160,000. Paid dividends of $80,000. What is total paid-in capital at the end of 2021
Answer:
Total paid-in capital=$992,000
Explanation:
Calculation for total paid-in capital at the end of 2021
First step
Issued 48,000 shares of common stock at $12 per share.
(48,000 shares × $12 per share)
=$576,000
Issued 32,000 shares of common stock at $13 per share
(32,000 shares×$13 per share)
$416,000
Second Step
$576,000+$416,000
Total paid-in capital=$992,000
Therefore for total paid-in capital at the end of 2021 would be $992,000
A company's beginning Work in Process inventory consisted of 20,000 units that were 80% complete with respect to direct labor. A total of 90,000 were finished during the period and 25,000 remaining in Work in Process inventory were 40% complete with respect to direct labor at the end of the period. Using the weighted-average method, the equivalent units of production with regard to direct labor were:
Answer:
Total number of equivalent units= 100,000
Explanation:
Giving the following information:
A total of 90,000 were finished during the period and 25,000 remaining in Work in Process inventory were 40% complete with respect to direct labor at the end of the period.
Weighted-average method:
Units completed= 90,000
Ending inventory= 25,000*0.4= 10,000
Total number of equivalent units= 100,000
Suppose that in the rice market demand shifts greatly due to a new rice diet that is being marketed heavily in the U.S. as a cure for cancer. Simultaneously the supply curve shifts slightly due to a healthy rainy season that positively affects the rice crop in California. What is the most likely outcome in this situation?
Answer:
the equilibrium price increases, albeit by a negligible amount
Explanation:
Here are the options to this question :
the supply curve will shift again after demand meets supply
the equilibrium price increases
the equilibrium price increases, albeit by a negligible amount
the demand curve will shift back to its original level
The new rice diet that is being marketed heavily in the U.S. as a cure for cancer would increase the demand for rice. This would shift the demand curve rightward. This shift of the demand curve would increase demand and price
The hw healthy rainy season that positively affects the rice crop in California woild increase the supply of rice and as a result the supply curve would shift to the right. The rightward shift of the supply curve would cause quantity to rise and price to fall.
This combined effect would lead to a rise in quantity and a rise in price by only a negligible amount.
I hope my answer helps you
A supermarket displays featured items at the ends of aisles. These displays
are called
Answer:
These are the options for the question:
A. exteriors
B. endcaps
C. merchandisers
D. props.
And this is the correct answer:
B. endcaps
Explanation:
The small billboards that display items at the end of aisles are called endcaps.
They are usually used to display items that are on discount. Other times, they are simply used to sign the category of products that can be found in the respective aisle.
Answer:
endcaps
Explanation:
Suppose People's bank offers to lend you $10,000 for 1 year on a loan contract that calls for you to make interest payments of $250.00 at the end of each quarter and then pay off the principal amount at the end of the year. What is the effective annual rate on the loan
The marginal product of labor Multiple Choice measures how output changes as the wage rate changes. is less than the average product of labor when the average product of labor is decreasing. is negative when adding another unit of labor decreases output. both "measures how output changes as the wage rate changes" and "is less than the average product of labor when the average product of labor is decreasing". both "is less than the average product of labor when the average product of labor is decreasing" and "is negative when adding another unit of labor decreases output".
Answer:
is less than the average product of labor when the average product of labor is decreasing.
is negative when adding another unit of labor decreases output.
Explanation:
The marginal product of labor refers to the change in the output with respect to adding additional or extra units of labor keeping other factors constant.
The formula for computing the marginal product of labor is
= Total product ÷ Change in labor
By dividing the total product from the change in labor we can get the marginal product of labor
It is always less than the average product of labor in the case when it is declined i.e average product labor
And it would be negative when extra or other units is added that result into a decrease in an output
Suppose you borrow $10,000 right now to start a business. If the terms of the loan require you to pay back $16,000 in 5 years, what is the implied annual compound interest rate
Answer:
r = 9.86%
Explanation:
The formula for calculating the future value of an invested amount yielding a compound interest is given by:
[tex]FV=PV(1+\frac{r}{n})^{nt}[/tex]
where:
FV = future value = $16,000
PV = present value = $10,000
r = interest rate = ?
n = number of compounding period per year = 1
t = time in years = 5
∴ [tex]16000=10000(1+\frac{r}{1})^{5}[/tex]
dividing both sides by 10,000
[tex]\frac{16000}{10000} =\frac{10000(1+\frac{r}{1})^{5}}{10000}[/tex]
[tex]1.6 = (1 + r)^{5}[/tex]
to remove the power of 5, we have to take the 5th root of both sides:
[tex](1.6)^{1/5} = (1 + r )^{5 * 1/5}[/tex]
Using your calculator:
1.09856 = 1 + r
∴ r = 1.09856 - 1 = 0.09856
r = 0.0986 = 9.86%
∴ r = 9.86%
A company applies overhead at a rate of 150% of direct labor cost. Actual overhead cost for the current period is $1,150,000, and direct labor cost is $565,000. Determine whether there is over- or underapplied overhead using the T-account below. Factory OverheadActual Overhead 950,000 Overapplied overhead 950,000
Answer:
Under applied overheads= $302,500
Explanation:
Overheads are charged to units produced by the means of an estimated overhead absorption rate. This rate is computed using budgeted overhead and budgeted activity level.
As a result of this, overhead charged to total units product might be over or under absorbed compared to the actual amount incurred.
Overhead absorption rate
=budgeted Overhead/Budgeted labour cost × 100
This already given in the question as 150% of the direct labour rate
= 150% of direct labour cost
Applied overhead= OAR× actual labour cost
= 150% × $565,000=$847,500
Under applied overhead = is the difference between actual overhead and applied overhead
$1,150,000 - $847,500 = $302,500
Under applied overheads= $302,500
Here it is under applied because the applied is less than the actual overhead cost
A factory worker really wants to move up in the corporation. He does his work, stays late, and is always looking for extra ways to help. He gets passed up for promotion after promotion. This will MOST LIKELY affect his ________. equity instrumentality expectancy valence
Answer:
instrumentality
Explanation:
Based on the information provided within the question it seems that this will most likely affect his instrumentality. Meaning his quality of serving as a means to an end. This is because the worker is working hard in order to progress in the company and not have to work so hard in the future. If this does not happen then he will begin to become discouraged and not work as hard anymore.
Ellie (a single taxpayer) is the owner of ABC, LLC. The LLC (a sole proprietorship) reports QB) of $ 900,000 and is not a specified services business. ABC paid total W-2 wages of $300,000, and the total unadjusted basis of property held by ABC is $ 30,000. Ellie's taxable income before the QBI deduction is $ 740,000 (this is also her modified taxable income). What is Ellie's QBI deduction for 2019?
Answer:
$148,000
Explanation:
Ellie's taxable income before the QBI deduction is greater than the $207,500 threshold, the W–2 Wages/Capital Investment Limit has to be considered.
20% of QBI = $900,000 x 20%
= $180,000
But no more than the greater of:
50% of W-2 wages
= $300,000 x 50%
= $150,000
25% of W-2 wages + 2.5% of the unadjusted basis of qualified property
= ($300,000 * 25%) + ($30,000 * 2.5%)
= $75,750
$75,750
Is not more than:
20% of modified taxable income
= $740000 x 20%
= $148,000
Ellie's QBI deduction for 2019 is $148,000.
When a company pays a dividend, it isn't as simple as getting a paycheck from one's employer. There are several critical dates in the dividend payment process. Identify each of the critical dividend dates in the table.
The date on which a firm's director issues a statement announcing a dividend.
Date - _____
The firm actually sends the dividend checks on this date.
Date - _____
If the company lists the stockholder as an owner on this date, then the stockholder receives the dividend.
Date - _____
The date on which the right to the current dividend no longer accompanies a stock.
Date - _____
Answer: 1. Declaration Date
2. Payment Date
3. Holder-of-record date
4. Ex-dividend date
Explanation:
1. On the Declaration Date, the company's Director announces that they will pay a dividend as well as the amount of the dividend. This is recorded in the books by crediting it to Dividends payable.
2. On Payment day the dividends are disbursed amongst shareholders. Cash Account is credited and Dividends Payable is debited.
3. The Holder-of-record day is the day the company notes who the owners of it's stock are so that they may receive the dividend.
4. On the Ex-dividend date which is usually 2 days before the record date, any stock bought on or after this date will.not receive any Dividend payment.
For each event listed below, identify the accounts that should be used to record the economic event and the dollar amount for that account. You should enter the letters that correspond to the accounts that should be used, along with the related dollar amounts. Your answers will be evaluated based on whether you have included every account and the related dollar amount that is needed and not included any account that is not needed. An account can be used in analyzing more than one event.A. additional paid-in capitalB. bonds payableC. cashD. common stockE. discount on bonds payableF. equipmentG. interest expenseH. interest payableI. preferred stockJ. premium on bonds payableK. treasury stock(Example:Event: The company purchased equipment, paying cash of $15,0001,) The company issued bonds in the amount of $10,000,000, receiving cash of $9,400,000 at the time of issuance.
Answer: C $9,400,000 E $600,000; B $10,000,000
Explanation:
The Company Issued bonds worth $10,000,000 but only received $9,400,000 in cash.
This means that they issued the Bonds at a discount. With the discount being the difference between how much was issued and how much was received.
This discount will be sent to the Discount on Bonds Payable account.
The Cash received of $9,400,000 will be sent to the cash account.
The company will still have to pay the entire figure of $10,000,000 in bonds so the full amount will go to the Bonds Payable account.
The Journal Entry is thus,
DR Cash $9,400,000
DR Discount on Bonds Payable $600,000
CR Bonds Payable $10,000,000
On January 1, 20X6, Plus Corporation acquired 90 percent of Side Corporation for $180,000 cash. Side reported net income of $30,000 and dividends of $10,000 for 20X6, 20X7, and 20X8. On January 1, 20X6, Side reported common stock outstanding of $100,000 and retained earnings of $60,000, and the fair value of the noncontrolling interest was $20,000. It held land with a book value of $30,000 and a market value of $35,000 and equipment with a book value of $50,000 and a market value of $60,000 at the date of combination. The remainder of the differential at acquisition was attributable to an increase in the value of patents, which had a remaining useful life of five years. All depreciable assets held by Side at the date of acquisition had a remaining economic life of five years. Plus uses the equity method in accounting for its investment in Side. Based on the preceding information, the increase in the fair value of patents held by Side is:
Answer:
$25,000
Explanation:
Plus corporation acquired 90% of Side Corporation for $180,000 cash.
Net income = $30,000
Dividend for 3 years = $10,000
Common stock outstanding = $100,000
Retained earnings = $60,000
Fair value = $20,000
Book value of land = $30,000
Market value of land = $35,000
Book value of equipment = $50,000
Market value of equipment = $60,000
Required:
Find the increase in the fair value of patents held by Side Corporation.
To find the increase in the fair value of patents, use:
Increase in fair value = Fair value of corporation - Total value without patent.
Where
Fair value = $180,000 + $20,000 = $200,000
Total value without patent = common stoc(100,000) + retained earnings(60,000) + equipment adjustment($60,000 - $50,000 = $10,000) + land adjustment($35,000 - $30,000= $5,000) =
$100,000 + $60,000 + $10,000 + $5,000 = $175,000
Therefore,
Increase = Fair value of corporation($200,000) - Total value without patent($175,000) = $25,000
The increase in the fair value of patents held by Side Corporation is $25,000