William and Frank are partners whose capital balances are $400,000 and $300,000 and who share profits 3:2. Due to a shortage of cash, William and Frank agree to admit Sammy to the firm. Required: Prepare the journal entries required to record Sammy's admission under each of the following assumptions: - Sammy invests $200,0
A 35% stock dividend was declared on October 2 by the board of directors of a corporation to shareholders of record on October 20 payable on November 10. The closing market price of the stock on October 2 was $18. The corporation currently has the following items on its Stockholder's Equity section (all dollar amounts): Common
E17-1 (Investment Classifications) For the following investments, identify whether they are: - 1. Trading - 2. Available-for-Sale - 3. Held-to-Maturity Each case is independent of the other. - (a) A bond that will mature in 4 years was bought 1 month ago when the price dropped. As soon as the value increases, which is exp
Response is provided in Excel. E15-2 (Recording the Issuance of Common and Preferred Stock) Abernathy Corporation was organized on January 1, 2012. It is authorized to issue 10,000 shares of 8%, $50 par value preferred stock, and 500,000 shares of no-par common stock with a stated value of $2 per share. The following stock tr
Prepare the year-end entries for any amounts that should be recorded as a result of the contingency and indicate whether a disclosure note is indicated. Classical is the plaintiff in a $4 million lawsuit filed against a supplier. The suit is in final appeal and attorneys advise that it is virtually certain that Classical wil
The Defiance College sells season tickets for four home football games at a price of $15. For the 2009 season, 5,000 season tickets were sold. (a.) Write the journal entry or use the horizontal model to show the effect of the sale of the season tickets. (b.) Write the journal entry or use the horizontal model to show the effe
On September 30, 2009, David's Co.'s treasurer signed a note promising to pay $520,000 on December 31, 2009. Proceeds of the note were $501,800. (a.) Calculate the discount rate used by the lender. (b.) Calculate the effective interest rate on the loan. (c.) Write the journal entry to show the effect of recording interest ex
Weldon Corporation's fiscal year ends December 31. The following is a list of transactions involving receivables that occurred during 2011: Mar. 17 Accounts receivable of $1,700 were written off as uncollectible. The company uses the allowance method. 30 Loaned an officer of the company $25,000 and received a note requirin
The following account balances appear on the balance sheet of Organic Life Co., Common stock (250,000 shares authorized), $125 par, $17,5000,000: Paid_In Capital in excess of par-common stock, $560,000: and Retained earnings, $75,496,000. The board of directors declared a 3% stock dividend when the market price of the stock was
Prior Company buys merchandise on account from Wood Company. The selling price of the goods is $900 and the cost of the goods sold is $630. Both companies use perpetual inventory systems. How would you journalize the transactions on the books of both companies?
Ambrosia Corporation, Prepare the journal entries for income tax expense, income taxes payable, and deferred taxes for 2013.
The Ambrosia Corporation's lead accountant shows the following info: On Jan 1, 2012, Ambrosia purchased a bottling machine for $800000 A) Straight-line basis depreciation for 5 years for tax purposes B) Half year convention for 8 years for financial reporting (See Appendix 11A) C) Tax-exempt municipal bonds yielded interes
A. Compute bad debts expense based on the following information: (a) ABC Company estimates that 2% of net credit sales will become uncollectible. Sales are $600,000, sales returns and allowances are $30,000, and the allowance for doubtful accounts has a $6,000 credit balance. (b) ABC Company estimates that 10% of accounts
Louis Welch is general manager of United Tanning Salons. During 2012, Welch worked for the company all year at a $6,200 monthly salary. He also earned a year-end bonus equal to 10% of his salary. Welch's federal income tax withheld during 2012 was $850 per month, plus $924 on his bonus check. State income tax withheld came to
Starstruck company operates using the euro as their currency. For the most recent year ending December 31, 2011 Starstruck reported the following Loans and borrowings data: Loans and borrowings (noncurrent liabilities) Euros (in millions) Loans and borrowings, December 31, 2011 balance 7,656 Proceeds from issuance of loans
Lakeland Homebuilders recently sold $400,000 worth of 8% semiannual bonds at 95 to J. Ferguson Underwriting. What would the journal entry look like to record the sale of the bonds? Entry Account&Description DEBIT CREDIT 1. Bonds Payable 400,000 Cash 400,000 2. Cash 380,000 Discount on
See attached word document for the breakdown. Barton Industries recently received an almost new semi-truck and trailer valued at $165,200 in exchange for 4,130 shares of no-par common stock. Previously issued no-par common stock by Barton is currently trading in the open market for $30 per share. Which of the following would
Orange Pitt, Co. purchased 22,000 shares of Greenline, Inc. common stock for $187,000 plus a 3% brokers fee of $5,610 on September 14, 2011. Greenline has 50,000 shares of common stock outstanding and its policies would be significantly influenced by Orange Pitt, Co. following the purchase. On November 15, 2011 Greenline declar
What are the differences between revenue expenditures and capital expenditures? Explain the entries of each.
Sales taxes should be recognized when the underlying event takes place. A state requires ''large'' merchants (i.e., those with sales over a specified dollar amount) to report and remit their sales taxes within fifteen days of the end of each month. It requires ''small'' merchants to report and remit their taxes within fifteen
Laughter Landscaping has the following independent cases at the end of the year on December 31, 2014. a. Each Friday, Laughter pays employees for the current week's work. The amount of the weekly payroll is $7,000 for a five-day workweek. This year December 31 falls on a Wednesday. a. Details of Prepaid insurance are shown in
1. At the end of the period it is necessary to close all temporary accounts. (1) Explain why this process is required and (2) provide an example of the closing of an expense account, Rent Expense in the form of a journal entry. 2, One must follow the cycle that includes 10 steps to complete the accounting cycle. (1) Explai
Describe the journal entry for a stock dividend on common stock (which has a par value).
Primary Company was organized on January 2, 2010. It was authorized to issue 300,000, no-par value common shares and 150,000 shares of $1.50 no-par value cumulative preferred. During 2010, 100,000 common and 50,000 preferred shares were issued, but no dividends were declared. The following account balances were extracted from
Acquired a new packaging machine for four old pacaging machines. The old machines had a total cost of $72,000 and a total remaining book value of $20,000 The new packaging machine has an indicated market value of $60,000 approximately the same value as the four machines. This transaction is deemed to have commercial subtance. H
The auditor of Mikel's Shops obtained the following information when performing cut off testing procedures during their observation of Mikel's physical inventory count at December 31, 2009. Bill of Lading number 1235 1236 1237 1238 Date 12/31/09 12/31/09 1/2/10 1/2/10 Sales Price $12,000 $4,500 $18,000 $16,000 Cost of Goo
Company sold 600 gadgets during 2012 for $4,000 each. Total cost of servicing the the warranties will be $150,000 for 2 years. Prepare all journal entries to record including sales. If Co had used the cash basis how much warranty expense would have been recorded in 2012?
Prepare journal entries for redemption of bonds. The situations presented here are independent of each other. Instructions For each situation prepare the appropriate journal entry for the redemption of the bonds. a. Thunder Corporation retired $130,000 face value, 12% bonds on June 30, 2007, at 102. The carrying value of t
Shelley Ltd its salaries fortnightly in arrears.The next pay day is Thursday 2 July .The fortnightly salary is $30000,of which $10000 is retained to pay the Australian Tax Office on behalf of the employees. Payments to the ATO are made every Second Monday, with the next payment being made on Monday 6 July. Shelley Ltd's reporti
On January 1, 2004, Skyline Limousine Co. purchased a limousine at an acquisition cost of $28,000. Skyline depreciated the vehicle by the straight-line method using a 4-year service life and a $4,000 salvage value. The company's fiscal year ends on December 31. Instructions: Explain what you found to be the most challengin
In reviewing the books of Unger Retailers inc., the auditor discovered certain errors that had occurred during 2013 and 2014. No errors were corrected during 2013. The errors are summarized below. (a) Beginning merchandise inventory (January 1, 2013) was understated by $8,640. (b) Merchandise costing $2,400 was sold for