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Exercise 7-18 Factoring of accounts receivable without recourse [LO7-8] Mountain High Ice Cream Company transferred $60,000 of accounts receivable to the Prudential Bank. The transfer was made witho
Exercise 7-18 Factoring of accounts receivable without recourse [LO7-8] Mountain High Ice Cream Company transferred $60,000 of accounts receivable to the Prudential Bank. The transfer was made without recourse. Prudential remits 90% of the factored amount to Mountain High and retains 10%. When the bank collects the receivables, it will remit to Mountain High the retained amount (which Mountain estimates has a fair value of $5,000) less a 2% fee (2% of the total factored amount). Required: Prepare the journal entry to record the transfer on the books of Mountain High assuming that the sale criteria are met.
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factored amount). Required: Prepare the journal entry to record the transfer on the books of Mountain High assuming t...(543 more words & 0 attachments).
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Exercise 7-5 Trade and cash discounts; the gross method and the net method compared [LO7-3] Tracy Company, a manufacturer of air conditioners, sold 100 units to Thomas Company on November 17, 2013.
Exercise 7-5 Trade and cash discounts; the gross method and the net method compared [LO7-3] Tracy Company, a manufacturer of air conditioners, sold 100 units to Thomas Company on November 17, 2013. The units have a list price of $600 each, but Thomas was given a 30% trade discount. The terms of the sale were 2/10, n/30. Required: 1.      Prepare the journal entries to record the sale on November 17 (ignore cost of goods) and collection on November 26, 2013, assuming that the gross method of accounting for cash discounts is used. 2.      Prepare the journal entries to record the sale on November 17 (ignore cost of goods) and collection on December 15, 2013, assuming that the gross method of accounting for cash discounts is used. 3-1.     Prepare the journal entries to record the sale on November 17 (ignore cost of goods) and collection on November 26, 2013, assuming that the net method of accounting for cash discounts is used. 3-2.     Prepare the journal entries to record the sale on November 17 (ignore cost of goods) and collection on December 15, 2013, assuming that the net method of accounting for cash discounts is used.                                        
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ash discounts is used. 2. Prepare the journal entries to record the sale on November 17 (ignore cost of goods) and collection on December 15, 2013, assuming that the gross method of accounting for cash discounts is used. ...(2699 more words & 0 attachments).
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Exercise 7-1 Cash and cash equivalents; restricted cash [LO7-2] The controller of the Red Wing Corporation is in the process of preparing the company’s 2013 financial statements. She is trying to de
Exercise 7-1 Cash and cash equivalents; restricted cash [LO7-2] The controller of the Red Wing Corporation is in the process of preparing the company’s 2013 financial statements. She is trying to determine the correct balance of cash and cash equivalents to be reported as a current asset in the balance sheet. The following items are being considered: a. Balances in the company’s accounts at the First National Bank; checking $13,500, savings $22,100. b. Undeposited customer checks of $5,200. c. Currency and coins on hand of $580. d. Savings account at the East Bay Bank with a balance of $400,000. This account is being used to accumulate cash for future plant expansion (in 2015). e. $20,000 in a checking account at the East Bay Bank. The balance in the account represents a 20% compensating balance for a $100,000 loan with the bank. Red Wing may not withdraw the funds until the loan is due in 2016. f. U.S. Treasury bills; 2-month maturity bills totaling $15,000, and 7-month bills totaling $20,000. Required: 1. Determine the correct balance of cash and cash equivalents to be reported in the current asset section of the 2013 balance sheet.
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e East Bay Bank. The balance in the account represents a 20% compensating balance for a $100,000 loan with the bank. Red Wing may not withdraw the funds until the loan is due in 2016. f. U.S. Treasury bills; 2-month maturity bills tota...(854 more words & 0 attachments).
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Exercise 5-15 Income (loss) recognition; percentage-of-completion and completed contract methods compared [LO5-5] Brady Construction Company contracted to build an apartment complex for a price of $
Exercise 5-15 Income (loss) recognition; percentage-of-completion and completed contract methods compared [LO5-5] Brady Construction Company contracted to build an apartment complex for a price of $5,000,000. Construction began in 2013 and was completed in 2015. The following are a series of independent situations, numbered 1 through 6, involving differing costs for the project. All costs are stated in thousands of dollars.                   Estimated Costs to Complete   Costs Incurred During Year (As of the End of the Year) Situation 2013  2014  2015  2013  2014  2015  1 1,500   2,100   900   3,000   900   —     2 1,500   900   2,400   3,000   2,400   —     3 1,500   2,100   1,600   3,000   1,500   —     4 500   3,000   1,000   3,500   875   —     5  500   3,000   1,300   3,500   1,500   —     6 500   3,000   1,800   4,600   1,700   —     Required: Complete the following table.
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e of $5,000,000. Construction began in 2013 and was completed in 2015. The following are a series of independent situations, numbered 1 through 6, involving differing costs for the project. All costs are stat...(53679 more words & 0 attachments).
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Exercise 5-5 Installment sales; alternative recognition methods [LO5-3] On July 1, 2013, the Foster Company sold inventory to the Slate Corporation for $300,000. Terms of the sale called for a down
Exercise 5-5 Installment sales; alternative recognition methods [LO5-3] On July 1, 2013, the Foster Company sold inventory to the Slate Corporation for $300,000. Terms of the sale called for a down payment of $75,000 and three annual installments of $75,000 due on each July 1, beginning July 1, 2014. Each installment also will include interest on the unpaid balance applying an appropriate interest rate. The inventory cost Foster $120,000. The company uses the perpetual inventory system.     Required: 1. Compute the amount of gross profit to be recognized from the installment sale in 2013, 2014, 2015, and 2016 using point of delivery revenue recognition. Ignore interest charges.          2. Compute the amount of gross profit to be recognized from the installment sale in 2013, 2014, 2015, and 2016, applying the installment sales method. Ignore interest charges.          3. Compute the amount of gross profit to be recognized from the installment sale in 2013, 2014, 2015, and 2016, applying the cost recovery method. Ignore interest charges.      
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ercise 5-5 Installment sales; alternative recognition methods [LO5-3] On July 1, 2013, the Foster Company sold inventory to the Slate Corporation for $300,000. Terms of the sale called for a down payment of $75,00...(2199 more words & 0 attachments).
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Exercise 5-2 Principal or agent [LO5-2] AuctionCo.com sells used products collected from different suppliers. Assume a customer ordered a used bicycle through AuctionCo.com for $30. The cost of this
Exercise 5-2 Principal or agent [LO5-2] AuctionCo.com sells used products collected from different suppliers. Assume a customer ordered a used bicycle through AuctionCo.com for $30. The cost of this bicycle is $20 to AuctionCo.com. The bicycle will be shipped to the customer by the original bicycle owner. Required: 1. Assume AuctionCo.com takes control of this used bicycle before sale. Under this assumption, how much revenue would the company recognize?           2. Assume AuctionCo.com never takes control of this used bicycle before sale. Under this assumption, how much revenue would the company recognize?          3. Which assumption do you think is more appropriate for the AuctionCo.com case?
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3. Which assumption do you think is more appropriate for the AuctionCo.com case?Exercise 5-2 Principal or agent [LO5-2] AuctionCo.c...(2530 more words & 0 attachments).
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The chief accountant for Grandview Corporation provides you with the company’s 2013 statement of cash flows and income statement. The accountant has asked for your help with some missing figures in t
The chief accountant for Grandview Corporation provides you with the company’s 2013 statement of cash flows and income statement. The accountant has asked for your help with some missing figures in the company’s comparative balance sheets. These financial statements are shown next ($ in millions). GRANDVIEW CORPORATION Statement of Cash Flows For the Year Ended December 31, 2013  Cash Flows from Operating Activities:                 Collections from customers $ 71             Payment to suppliers   (30 )           Payment of general & administrative expenses   (18 )           Payment of income taxes   (9 )           Net cash flows from operating activities       $ 14     Cash Flows from Investing Activities:                 Sale of investments         65     Cash Flows from Financing Activities:                 Issuance of common stock   10             Payment of dividends   (3 )               Net cash flows from financing activities
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w...(3579 more words & 0 attachments).
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The following income statement items appeared on the adjusted trial balance of Schembri Manufacturing Corporation for the year ended December 31, 2013 ($ in 000s): sales revenue, $15,300; cost of goo
The following income statement items appeared on the adjusted trial balance of Schembri Manufacturing Corporation for the year ended December 31, 2013 ($ in 000s): sales revenue, $15,300; cost of goods sold, $6,200; selling expenses, $1,300; general and administrative expenses, $800; interest revenue, $85; interest expense, $180. Income taxes have not yet been accrued. The company’s income tax rate is 40% on all items of income or loss. These revenue and expense items appear in the company’s income statement every year. The company’s controller, however, has asked for your help in determining the appropriate treatment of the following nonrecurring transactions that also occurred during 2013 ($ in 000s). All transactions are material in amount. 1. Investments were sold during the year at a loss of $220. Schembri also had unrealized gains of $320 for the year on investments. 2. One of the company’s factories was closed during the year. Restructuring costs incurred were $1,200. 3. An earthquake destroyed a warehouse causing $2,000 in damages. The event is considered to be unusual and infrequent. 4. During the year, Schembri completed the sale of one of its operating divisions that qualifies as a component of the entity according to GAAP. The division had incurred a loss from operations of $560 in 2013 prior to the sale, and its assets were sold at a gain of $1,400.    5. In 2013, the company’s accountant discovered that depreciation expense in 2012 for the office building was understated by $200. 6. Foreign currency translation losses for the year totaled $240. Required: Prepare Schembri’s combined statement of income and comprehensive income for 2013, including basic earnings per share disclosures. One million shares of common stock were outstanding at the beginning of the year and an additional 400,000 shares were issued on July 1, 2013. (Amounts to be deducted should be indicated with a minus sign. Enter your answers in thousands. Round EPS answers to 2 decimal places.)  
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e deducted should be indicated with a minus sign. Enter your answers in thousands. Round EPS answers to 2 decimal places.)The following income statement items appeared on the adjusted trial balance of Schembri Manufacturing Corporation for the year ended December 31, 2013 ($ in 000s): sales revenue, $15,300; cost of goods sold, $6,200; selling expenses, $1,300; general and administrative expenses, $800; ...(3101 more words & 0 attachments).
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Exercise 4-18 Statement of cash flows; indirect method [LO4-9] Presented below is the 2013 income statement and comparative balance sheet information for Tiger Enterprises. TIGER ENTERPRISES Income
Exercise 4-18 Statement of cash flows; indirect method [LO4-9] Presented below is the 2013 income statement and comparative balance sheet information for Tiger Enterprises. TIGER ENTERPRISES Income Statement For the Year Ended December 31, 2013   ($ in thousands)   Sales revenue       $ 7,000     Operating expenses:                   Cost of goods sold $ 3,360               Depreciation   240               Insurance   100               Administrative and other   1,800                        Total operating expenses         5,500           Income before income taxes         1,500     Income tax expense         600    
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housands) Sales revenue $ 7,000 Operating expenses: Cost of goods sold $ 3,360 Depreciation 240 Insurance 100 Administrative and other 1,800 Total operating expenses 5,500 Income before income taxes 1,500 Income...(3604 more words & 0 attachments).
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Exercise 4-9 Earnings per share [LO4-6] The Esposito Import Company had 1 million shares of common stock outstanding during 2013. Its income statement reported the following items: income from conti
Exercise 4-9 Earnings per share [LO4-6] The Esposito Import Company had 1 million shares of common stock outstanding during 2013. Its income statement reported the following items: income from continuing operations, $5 million; loss from discontinued operations, $1.6 million; extraordinary gain, $2.2 million. All of these amounts are net of tax. Required: Prepare the 2013 EPS presentation for the Esposito Import Company. (Enter your answers in millions. Round EPS answers to 2 decimal places.)  
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eported the following items: income from continuing operations, $5 million; loss from discontinued op...(428 more words & 0 attachments).
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