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Accounting

Bond Issuance - Effective Interest Rate Method

The following amortization and interest schedule reflects the issuance of 11-year bonds by Capulet Corporation on January 1, 2006, and the subsequent interest payments and charges. The company's year-end is December 31, and financial statements are prepared once yearly. Amortization Schedule Year Cash Interest Amount Unamo

Looking at Inventory Costing Methods

Using FIFO, LIFO, and the weighted average method, determine the gross profit, cost of goods sold, and cost of ending inventory. Use the form provided for your answers. Data below represents the purchases in August of Item ABC for Golson Company. Assume the company sold 1 unit during the month at a selling price of $50. D

Western Bank & Trust: Depreciation

Western Bank & Trust purchased land and a building for the lump sum of $3 million dollars. To get the maximum tax deduction, Western allocated 90% of the purchase price to the building and only 10% to the land. A more realistic allocation would have been 70% to the building and 30% to the land. Explain the tax advantage of al

Dos Passos Company: Current Liability

Dos Passos Company sells televisions at an average price of $909 and also offers to each customer a separate 3 year warranty contract for $204 that requires the company to perform periodic services and to replace defective parts. During 2012, the company sold 303 televisions and 285 warranty contracts for cash. It estimates the

Quest Tech: Multiple arrangement revenue recognition

Quest Tech, Inc. manufactures and sells specialized data storage equipment and services to entertainment and media companies. The equipment is used to efficiently store large data files. Quest Tech is currently marketing its latest equipment, which includes the Company's new patented technology that significantly increases it

Current Liability Journal Entry

Employees are paid every Saturday for the preceding work week. If a balance sheet is prepared on Wednesday, December 31st, what does the amount of wages earned during the first three days of the week (12/29, 12/30, 12/31) represent? Explain. What journal entry would be made for the days worked and what entry would be made when t

School District: Encumbrance Accounting System

School District #25 formally integrates the budget into the accounting system and uses the encumbrance system. All appropriations lapse at year-end. At year-end, before closing entries, the district had the following balances in its accounts. All accounts had normal balances. (a) Prepare the necessary closing entries. (b)

Bankruptcy and Default- Creditors' Concessions

In a troubled debt situation, why might the creditor grant concessions to the debtor? b. What type of concessions might a creditor grant the debtor in a troubled debt situation? c. What is meant by "impairment" of a loan? Under what circumstances should a creditor or debtor recognize an impaired loan?

Interest revenue of Bismarck

On July 31, 2012, Bismarck Company engaged Duval Tooling Company to construct a special-purpose piece of factory machinery. Construction began immediately and was completed on November 1, 2012. To help finance construction, on July 31 Bismarck issued a $628,800, 3-year, 12% note payable at Wellington National Bank, on which inte

Activity-Based Costing and Pricing

1. What is activity-based Costing? How can banks use it in their business? Explain. 2. How can banks link activity-based costing to performance management? Explain. 3. How can activity-based costing provide useful information on costs? Explain. 4. How is activity-based costing useful in measuring customer profitability?

Activity-based costing information

Jog Road Company's cost system assigns MSDA expenses to customers using a rate of 33% of sales revenue. The new CFO has discovered that Jog Roads's customers differ greatly in their ordering patterns and interaction with the company's sales force. Because the CFO believes Jog Road's cost system does not accurately assign MSDA ex

Beeline Manufacturing Activity Based Costing

Beeline Manufacturing produces two types of industrial ventilation machines: heavy-duty and standard. The assignment basis for overhead costs has always been direct labor hours. For 2013, Beeline compiled the following data for the two products: Heavy-duty Standard Sales in units 4,000 45,000 Sales price per unit

Tests for ceiling and floor value of inventory using the LCM rule

Year-end inventory cannot merely be based on a company's cost and whichever cost flow method the company is currently using. It needs to be further tested under the Lower of Cost or Market Rule for the potential need to mark it down. What are the "tests" used to determine the ceiling and the floor values to which the market va

Standards, Reporting, and Enforcement

In need some help in answering these questions: 1) What is your opinion on the questions below? FASB promulgates US GAAP (Generally Accepted Accounting Standards) and IASB creates IFRS (International Financial Reporting Standards). US GAAP is a rule-based system while IFRS are principle-based. The accounting standards only

Three Powerful Pricing Strategies

I need some help in answering these questions: 1. What is life-cycle costing? Under what circumstances can it be most useful? What are some potential problems with this approach? 2. What is target pricing? Under what circumstances can it be most useful? What are some potential problems with this approach? 3. What is cost-p

Statement of cash flow & balance

Review the information in the Los Lobos Ledger Data. Prepare a statement of cash flows using the direct and indirect methods. Prepare a classified balance sheet. 12-31 2007 2006 Cash $35,000 $32,000 Accounts receivable 33,000 30,000 Allowance for doubt

The tax effect of permanent and temporary timing differences

When it comes to taxes, one should always be mindful of the fact that without the Internal Revenue Service, there would not be tax issues to worry about. As a follow-up question to this statement, consider the tax issues brought about by permanent differences and temporary differences. Define each type of timing difference and g

Slidell Company Derivatives: Accounting for Swaps

On January 1, 2015, Slidell Company received a two-year, $500,000 loan, with interest payments occurring at the end of each year and the principal to be repaid on December 31, 2016. The interest rate for the first year is the prevailing market rate of 7%, and the rate in 2016 will be equal to the market interest rate on January

Statement of Cash Flow using indirect method

Rapture Company's 2011 income statement and selected balance sheet data at December 31, 2010 and 2011, follow ($ thousands). RAPTURE COMPANY Income Statement For Year Ended December 31, 2011 Sales revenue $ 64,000 Expenses Cost of goods sold 19,000 Depreciation expense 5,000

Production and average cost

(Please see the attached file for the complete problem description). Please assist with this project on Production Cost and explain your answer. The following informtion provides the amount of cost incurred in August for the cost items indicated. During August, 7,700 units of the firm's single product were manufactured.

Get easy 8 CREIDTS, JUST TAKE YOU 25 MINUTES, ACCOUTING PROBLEMS ABOUT LEASES

Accounting for Leases 1. Which of the following is false? A. The lessee uses the lower of its incremental borrowing rate or the lessor's desired return rate (if known) when determining the present value of minimum lease payments. B. A lease is capitalized if the present value of the minimum lease payments is greater than o

McDonald's Performance Measures: operating leverage, ROE, EVA

Explain what operating leverage, ROE, EVA are and how they measure performance. Pick another performance measure of your choice and explain it as well. Give the advantages and disadvantages of each of these measures. For each of these measures, compute them for McDonalds Corporation in 2012. Which measure is your preferred o

Guiltier Corp: Allowance for uncollectible accts bad debts

Guiltier Corporation uses allowance method to accounts uncollectible accounts receivables. Credit terms for sales is n30 (net is due at 30 days). Below is the company's uncollectible policy: Monthly provision for uncollectible accounts is 2% of credit sales. Write-off of bad debts is debited to allowance for uncollectibl

Calculating restated cash dividends per share

Group project journey #8. Please assist with Orbon Inc. For several years Orbon, Inc., has followed a policy of paying a cash dividend of $0.71 per share and having a 3% stock dividend. In the 2014 annual report, Orbon reported restated earnings per share for 2012 of $1.12. a. Calculate the originally reported earnings p

Critically evaluate: Historic cost or alternative measurement base

Historic cost should be replaced by an alternative measurement base in order to make financial statement more useful. Critically discuss this statement, concluding with whether or not you agree with it. Consider the following: Critically discuss the role and relevance of financial accounting information to the principal s

Coolfroth Brewing Co. and Journal Entries

Coolfroth Brewing Company distributes its products in an aluminum keg. Customers are charged a deposit of $30 per keg; deposits are recorded in the Keg Deposits account. a. Where on the balance sheet will the Keg Deposits account be found? Are Keg deposits a current Assets on the balance sheet, or a current liability on