Purchase Solution

Crazy: JE revenue, stock, discontinued operations, accruals

Not what you're looking for?

Ask Custom Question

1-Jan Crazy's sold 100% of its common stock for $200K cash. Par value of stock was 80.00/share and a thousand shares were sold

1-Jan Crazy borrowed $50K cash by issuing a 3-year note with a stated interest rate of 8% per year. To be compounded semi-annually. The interest is due on January 1 of each year; and the principal will be paid on the maturity date

1-Mar Started up a second line of consulting services. Sold services for a $100K in cash; and paid related misc. expenses of $70K - all related to second line of business. All other transactions related to first consulting operations, unless noted.
1-Oct
Purchased $10K of an investment in another company's stock. Not sure if it will be sold, traded, or held to maturity
1-Dec Found a buyer for second line of consulting services. Sold the entire business for equipment worth 60K; which resulted in a gain of $60K

31-Dec
Hired an employee in mid-December. Salaries are to be paid on 1/3. The amount unpaid at year-end is $15.4K.
The amount that will be paid on 1/3 is $19.8K. Ignore payroll taxes (FICA, state and federal withholdings.)
31-Dec Determined that there is still about $5K to do for client X. Determined that we sold inventory at $40K (cost). (Credit inventory $40K and debit cost of goods sold $40K)
31-Dec Determined that the stock purchased on 10/1 was now only worth $8K. However, the stock was not sold.
31-Dec We declared and paid a dividend of 10K to our investor/owner

Tax Rate is 30% (none of the tax is paid, but it is accrued as a liability. Include tax in the journal entries)

Purchase this Solution
Solution Summary

The journal entries are in excel. Click in cells to see computations. The most complicated entry is for the gain on sale and operating income from the discontinued operation.

Solution provided by:
Carol Sargent, PhD
Education
  • BSc, University of Virginia
  • MSc, University of Virginia
  • PhD, Georgia State University
Recent Feedback
  • "hey just wanted to know if you used 0% for the risk free rate and if you didn't if you could adjust it please and thank you "
  • "Thank, this is more clear to me now."
  • "Awesome job! "
  • "ty"
  • "Great Analysis, thank you so much"
Purchase this Solution
Free BrainMass Quizzes
Basics of corporate finance

These questions will test you on your knowledge of finance.

Basic Social Media Concepts

The quiz will test your knowledge on basic social media concepts.

Social Media: Pinterest

This quiz introduces basic concepts of Pinterest social media

Employee Orientation

Test your knowledge of employee orientation with this fun and informative quiz. This quiz is meant for beginner and advanced students as well as professionals already working in the HR field.

Change and Resistance within Organizations

This quiz intended to help students understand change and resistance in organizations

View More Free Quizzes
Related BrainMass Solutions

  • Accruals and Defferals of Company X

    Example 1: Two Journal Entries should occur: JE for August 8, 2000 Debit Credit Accounts Receivable 10,000 Sales 10,000 JE for October 25, 2000 Cash 10,000 Accounts Receivable 10,000

  • Multiple-step Income, Retained Earnings

    from flood damage, net of tax 390,000 Net income $835,000 Earnings per share: Income from continuing operations $ 5.62a Discontinued operations Loss on operations (net of tax) (0.30) Loss on disposal (net of tax) (1.47)

  • Multiple-Step Income and Retained Earnings Statement

    2,660,000 Income tax 905,000 Income from continuing operations 1,755,000 Discontinued operations Loss on operations, net of tax 90,000 Loss on disposal, net of tax 440,000 530,000 Income before extraordinary item

  • Single Step Income Staements and Other Financials

    Expenses) Other Income Rent Revenue Unrealized holding gain on available-for-sale securities Income Tax Expense for Continuing Operations Total other operating income Income from Continuing Operations Discontinued Operations

  • A&F and H&M ratio analysis 2011

    A&F: Basic EPS $1.47; Diluted EPS $1.43 H&M: Basic EPS 9.56 SEK; Diluted EPS 9.56 SEK - Have the companies reported any discontinued operations for the last year? A&F: Yes. Income from discontinued operations was $796 in 2011.

  • Accounting questions

    Current year loss from discontinued operations $18,000, net of tax benefit of $ 6,858 H. Loss from discontinued operations of $ 52,000, net of tax benefit of $ 11,525 I.

  • Earnings per share, EPS, and multi-step income statement

    Current year loss from discontinued operations of $18,000, net of tax benefit of $6,858 H. Loss from sale of discontinued operations of $52,000, net of tax benefit of $11,525 I.

  • Accounting Questions - Which of the following is not an advantage of the corporate form of business organization?

    Gain on disposal of discontinued operations c. Extraordinary loss related to flood d. Unrealized loss on available-for-sale securities Incron Corporation began the year with retained earnings of $217,000.

  • Efforts to converge US GAAP and IFRS Discontinued Operations

    Project selected: Discontinued operations In 2007, FASB revised it definition of a discontinued operation to reduce the number of situations where discontinued treatment was permitted (tighten it up).

View More Related Solutions