Please use excel and see attachment file (I understand excel better.)
Lake sports sells jet skis. Customers pay 1/3 of the sales price of the jet ski when they initially purchase the ski, and then pay another 1/3 each year for the next two years. Because Lake has little information about collectibility of these receivables, they use the installment method for revenue recognition. In 2008 Lake began operations and sold jet skis with a total price of $900,000 that cost Lake $450,000. Lake collected $300,000 in 2009, and $300,000 in 2010 associated with those sales. In 2009 Lake sold jet skis with a total price of $1,500,000 that cost Lake $900,000. Lake collected $500,000 in 2009, $400,000 in 2010 and $400,000 in 2011 associated with those sales. In 2011 Lake also repossessed $200,000 of jet skis that were sold in 2009. Those jet skis had a fair value of $75,000 at the time they were repossessed.
1. Total cash collections on installment sales during 2009 would be:
For 2009, Rahal's Auto estimates bad debt expense at 1% of credit sales. The company reported accounts receivable and an allowance
for uncollectible accounts of $86,500 and $2,100 respectively at December 31, 2008. During 2009, Rahals credit sales and collections were
$404,000 and $408,000 respectively and $2340 in accounts receivable were written off.
2. Rahals accounts receivables at December 31, 2009 are:
Green Acres Co. has elected to use the dollar-value LIFO retail method to value its inventory. The following data has been accumulated
from the accounting records:
Pertinent retail price indexes:
Merchandise inventory, Jan. 1, 2009 $240,000 $375,000
Net purchases 505,000 765,000
Net markups 10,500
Net markdowns 3,000
Net sales 570,000
3. Estimate the cost of ending inventory for December 31, 2009
During the current year, Compton Ctare Corporations purchased all of the outstanding common stock of Little Lacy Ltd (LLL) paying $60
million in cash. Compton recorded the assets acquired as follows:
Accounts receivable $5,500,000
Property, Plant and equipment $45,500,000
The book value of LLL assets and owners equity before the acquisition were $50 million and $30 million respectively.
4. Compute the fair value of LLLs liabilities that Compton assumed in the acquisition.
The solution computes cost of ending inventory , accounts receivables, cash collections on installment sales.