Explore BrainMass


Accruals and Defferals of Company X

Example 1: Accrual basis of accounting is the recognized of revenues when the sale or service occurs regardless of when actual cash is received. It recognizes expenses incurred. Company X sells $10,000 of widgets on August 8, 2000 (recognized). Company Z pays Company X $10,000 for widgets on October 25, 2000 $10,000 (c

Two Short Accounting Problems

Please help with the following problems. 1) On October 1, 2006, Parton Industries borrowed $12 million cash to provide working capital. The loan was made by Second Bank under a short-term line of credit. Parton issued an 8-month, "noninterest-bearing note." 8% is the bank's stated "discount rate." Parton's fiscal period is t

Calculating Earnings Per Common Share

At December 31, 2007 and 2006, Broken Arrow Corp. had 180,000 shares of common stock ad 10,000 shares of 5%, $100 par value cumulative preferred stock outstanding. No dividends were declared on either the preferred or common stock in 2007 or 2006. Net income for 2007 was $400,000. For 2007, earnings per common share amounted to?

HMS Ghost Issuance of Treasury Shares

In 2006, HMS Ghost Corp. acquired 9,000 shares of its own $1 par value common stock at $18 per share. In 2007, HMS Ghost issued 4,000 of these shares at $25 per share. HMS Ghost uses the cost method to account for its treasury stock transactions. What accounts and what amounts should HMS Ghost credit in 2007 to record the issuan

Taxation II

1. Robert Reed, a bachelor, maintains his parents in a nursing home. They have no income of their own and are completely dependent on their son. His parents are 75 and 72 years of age. Robert has the following sources of income. Salary... $45,000 Interest on municipal bonds... 750 Interest on bank accounts... 800 Dividends

Computing the Loss on Early Debt Extinguishment

On its December 31, 2006 balance sheet, Carl Corp. reported bonds payable of $6,000,000 and related unamortized bond issue costs of $320,000. The bonds had been issued at par. On January 2, 2007, Carl retired $3,000,000 of he outstanding bonds at par plus a call premium of $70,000. What amount should Carl report in its 2007 inco

Taxable Rental Income for a Cash-Basis Taxpayer

1. John Smith, as the owner of an apartment building, receives and makes the following payments during 2008. Received in Jan 2008 rent that was due in Dec 2007.... $5,000 Received in Dec 2008 rent not due until Jan 2009.... $4,000 Security deposit which is to be refunded when tenant vacates the apartment... $500 How

Accrued Interest Payable

On September 1, 2006, Olsen Co. issued a note payable to National Bank in the amount of $1,200,000, bearing interest at 12%, and payable in three equal annual principal payments of $400,000. On this date, the bank's prime rate was 11%. The first payment for interest and principal was made on September 1, 2007. On December 31, 20

Banks and Loans

Why banks have bad loans? For the most part I feel that it was the lenders who are the most responsible. They were willing to ignore the ability to pay on the loans in order to lend as much as possible. The lowering or even turning of the back on the qualifications of the borrower turned out to kick them in the backside. However

Bad loans guidelines

Underwriter had the guidelines that could have helped maybe lessen the overall situation (bad loans)(I do not think that this alone has caused the economic crisis). Was it just greed by the banks and lenders?

Study Guide

Please help with this study guide. Study Guide Managerial Accounting 1. Whirl Company sells cordless razors for $50. Variable costs are 40% of sales and total fixed costs are $40,000. What is the firm's magnitude of operating leverage if 2,000 units are sold? A) 3.0 B) 2.0 C) 1.5 D) None of the above 2. Select

Calculating Depreciation and Book Value

Your firm uses return on assets (ROA) to evaluate investment centres and is considering changing the valuation basis of assets from historical cost to current value. When the cost of the asses is updated, a price index is used to approximate replacement value. For example, a metal fabrication press, which bends and shapes metal

Activity Table for Total Costs

Question 1: (11 points) Exercise 5-1 Fixed and Variable Cost Behavior [LO1] Koffee Express operates a number of espresso coffee stands in busy suburban malls. The fixed weekly expense of a coffee stand is $1,100 and the variable cost per cup of coffee served is $0.26. Requirement 1: Fill in the following table with your


Hobby Loss Presumptive Rule. Rachel Schutz is a high school English teacher. In her spare time, she likes to make her own body lotion, lip-gloss, and bath and shower gel. She uses the bath products herself and gives them to her friends and relatives as gifts. In 2005, Rachel started attending arts and crafts festivals to sell

PROBLEM I6-34: Calculate taxable income for Kent

For vs. from AGI. During the current year, Kent, a single taxpayer, reports the following items of income and expense: Income: Salary $170,000 Dividends from Alta Corporation 800 Interest income from a savings account 1,500 Rental income from a small apartment he owns 8,000 Expenses: Medical 6,000 Interest on a prin

PROBLEM I4-43 Re: Employee Benefits includable in income

Employee Benefits. Ursula is employed by USA Corporation. USA Corporation provides medical and health, disability, and group term life insurance coverage for its employees. Premiums attributable to Ursula were as follows: Medical and health $3,600 Disability 300 Group term life (face amount is $40,000) 200 During the year,

Describing the Matching Principle

What is the matching principle. Describe the concept in your own words. Give an example of this principle that illustrates your understanding of this concept. Also, please identify what the pros and cons are of adhering to this principle.

Economic Condition: advice to managers of businesses

Can someone help with the below question? From your understanding of the current economic crisis facing the United States and the entire global community, what advice do you think should be given to the managers of businesses as they seek to restore profitability to their businesses and stability to the economy?

Information for Annual Report

What types of information you think should be included in a company's annual report. Explain why each item you have chosen is important to include, and what stakeholders would most benefit from viewing this information. Please be detailed in your answers.

Accounting for Goodwill

I don't quite understand the difference between the concepts and I am wondering if you could help me. 1. Problem (you must show your work for this problem, as well as answer the multiple choice question) On January 1, 2004, Cobb Enterprises acquired 80% of Bob's Bricks Inc.'s outstanding common shares. In acquiring this i

Time-Series Behavior and Corrective Action

You are working in the office of the vice president of administration at International Telecon (IT) as a senior financial planner. IT is a Fortune 500 firm with sales approaching $1 billion. IT provides long-distance satellite communications around the world. Deregulation of telecommunications in Europe has intensified worldwide

Accounting question

Problem 6-4 "Ice Storm" In March, a devastating ice storm struck Monroe County, New York, causing millions of dollars of damage. Mathews & Peat (M&P), a large horticultural nursery was hit hard. As a result of the storm $653,000 of additional labor and maintenance costs were incurred to clean up the nursery remove and replace

Complex accounting question

Analyze the situation and recommend a course of action. What should installation division managers do? What should valve division managers do? What should U.S. Pump's senior managers do? See attached.

Timmons Manufacturing: Schedule of Cost of Goods

Prepare a schedule of the cost of goods manufactured for Timmons Manufacturing Company for the month ended December 31, 2008. Account Balances Finished Goods Inventory, December 31 $42,000 Factory Supervisory Salaries 12,000 Income Tax Expense 18,000 Raw Materials Inventory, December 1 12,000 Work In Process Inve