Alpha Company used the periodic inventory system for purchase
Alexander Company purchased a piece of equipment for $12,000 and depreciated it for three years over a five-year estimated life with an expected residual value at the end of five years of $2,000. At the end of the third year, Alex decided to upgrade to equipment with increased capacity and sold the original piece of equipment for $7,200. Calculate the gain or loss on the disposal at the end of the third year.
The trial balance before adjustment for Kelly Company shows the following balances. Debits Credits Accounts Receivable $122,000 Allowance for Doubtful Accounts 4,000Sales $780,000 Instructions Using the data above, give the journal entries required to record each of the following cases. (Each situation is independent.) 1 To obtain additional cash, Kelly factors (sold) without recourse $80,000 of accounts receivable with Easy Finance. The finance charge is 6%of the amount factored. 2 To obtain a one-year loan of $50,000 ,Kelly assigns $75,000 of specific receivable accounts to B
Accounting Assignment Writing ServiceTullahoma Company purchased equipment for $27,500. It depreciated the equipment over a fiveyear life by the double-declining-balance method until the end of the second year, at which time the asset was sold for $8,500. Calculate the gain or loss on the sale at the end of the second year.
During December, Morgan Manufacturing purchased $65,000 of raw materials. Morgan’s inventories were as follows: Balance Dec 1 Balance Dec 31Raw Material $15,000 $13,000Work in progress $23,000 $26,000Finished goods $35,000 $37,000 What is the amount of raw materials used in production during December?a. $65,000b. $2,000c. $67,000d. $64,000e. none of the above
Share Dividends3. On October 1, 2018, Contentious Corp owns 15,000 fair value through othercomprehensive income ordinary shares at a cost of P1,500,000. The shares represent 15% of the ordinary shares outstanding of Pulsate Corporation.Record the receipt of the share dividends on the Contentious’ books under each of the assumption listed below:Case No. 1: Assuming the shares are investment in unquoted securities measured at cost:Contentious received 15% ordinary shares as Share Dividends.Contentious received 1,500 preference shares as Share Dividends. The parvalue of the preference share is P200 per share while the ordinary shares has apar value of P100.Case N0. 2: Assuming the shares are financial assets at fair value through profit or lossContentious received 15% ordinary shares as Share Dividends. The fair value of the ordinary shares amounted to P100.Contentious received 1,500 preference shares as Share Dividends. The fair value of each preference share is P150.Case No. 3: Assuming the shares are investment in equity securities designated as at fair value though other comprehensive incomeContentious received 15% ordinary shares as Share Dividends. The fair value of the ordinary shares amounted to P100.Contentious received 1,500 preference shares as Share Dividends. The fair value of each preference share is P150.Cash Received in Lieu of Share Dividends4. On October 1, 2018, Qualms Corp. owns 15,000 fair value through other comprehensiveincome shares acquired at a cost of P345,000. The shares represent 15% of the shares outstanding of Sarcasm Corporation. On the same date, Sarcasm declared 15% share dividends payable to stockholders on October 31. On October 31, the stock is selling at P40 per share. However, on October 31, Sarcasm gave P36 per share cash in lieu of the supposed share dividends previously declared.Case no. 1: Assuming the shares are investment in unquoted securities measured as cost.Case no. 2: Assuming the shares are financial assets at fair value though profit or loss. Case no. 3: Assuming the shares are investment in equity securities designated as at fair value through other comprehensive income.create all the necessary entries.What is the dividend income to be recognized in 2018?What is the gain or loss on sale of investment to be recognized in 2018?Shares Received in Lieu of Cash Dividends5. On October 1, 2018, Venus Corp owns 15,000 fair value through other comprehensiveincome shares acquired at a cost of P345,000. The shares represent 15% of the outstanding shares of Mercury Corporation. On the same date, Mercury Corp. declared P8 cash dividends on its outstanding shares payable to stockholders on October 31. However, on October 31, Mercury Corp. issued 1 share for every 5 shares held by the shareholders in lieu of the supposed cash dividends previously declared.Case no. 1: Assuming the shares are investment in unquoted securities measured as cost.Case no. 2: Assuming the shares are financial assets at fair value though profit or loss. On October 1, 2018, the stocks were selling at that time at P44 per share.create all the necessary entries.What is the dividend income to be recognized in 2018?Liquidating Dividends6. On January 2, 2018, Earth Company has 20,000 shares of P100 par value ordinaryshares. The shares were acquired a year ago at a cost of P440,000. On February 14, of the current year, Earth Company received 15% cash, liquidating dividends from the Investee Corporation.Assuming that the Investee Corporation is a wasting asset corporation and partialliquidation, how much is the amount of loss on liquidation to be recognized in 2018?Assuming that the Investee Corporation is a wasting asset corporation and partialliquidation, provide the relevant entries.Assuming that the Investee Corporation is other than a wasting asset corporation,how much is the amount of loss on liquidation to be recognized in 2018?Assuming that the Investee Corporation is other than a wasting asset corporationand partial liquidation, provide the relevant entries.Stock Split and Special Assessment7. On January 1 of the current year, Phobos Company acquired 10,000 shares ofInvestment in equity designate as at Fair Value through Other Comprehensive Income of Deimos Company at P400,000 plus brokerage expense of P20,000. On March 1 of the current year, Deimos Company ordinary shares was split on a 5-for-2 basis. On October 1, Deimos Company made a special assessment of P3.20 per share on all ordinary shareholders. Phobos Company accordingly paid the assessment. The fair value on December 31 amounted to P30 per share.The total number of shares at the end of the year.The unrealized gain to be presented in the other comprehensive income for thecurrent year.Journal entry on January 1.Journal entry on December 31.Stock Right8. On June 15, 2018, Mars Company owns 10,000 shares with a cost of P700,000 of MoonCompany’s stocks. During the same period, Moon Company issued stock rights to existing shareholders. Mars received 10,000 stock rights entitling him to purchase 5,000 new shares at P80. The ordinary share was trading ex-rights at P80 a share and the rights had a market value of P20 per right.Assuming that the above information are FVTPL, the stock rights should be initially recognized at____.Assuming the above securities are FVTOCI, the stocks rights should be initially recognized at___.Assuming that the above securities are FVTPL, the cost of investment acquired through exercised of stocks should be_____.Assuming that the above securities are FVTOCI, the cost of the investment acquired through the exercise of stock rights should be___.Theoretical Value of Stock Rights9. On January 2, 2018, Jupiter Company purchased 10,000 shares of P200 par valueordinary shares at P240 per share of Saturn Company. On March 2, 2018, Saturn Company issued stock rights to its shareholders. The holder needs five rights to purchase one share of ordinary stock at par. The market value of the stock on that date was P320 per share. There was no quoted price for the rights.a. Compute for the theoretical value of the rights assuming the stock is selling right-on.b. Compute fir the theoretical value of the rights assuming the stock is selling ex-right.Exchange of One Financial Asset into Another Financial Asset10. Uranus Company owns 8,000 convertible preference shares of which was acquired in2017 at a cost of P400,000. The investment was classified as trading securities. On December 31, 2017, the fair value of the preference shares was P425,000. On March 31, 2018, Uranus Company converted the 4,000 preference shares into 6,000 shares of ordinary shares, when the market price was P50 per share for the preference shares and P40 per share for the ordinary shares.Compute for the gain on exchange to be recognized in 2018.Give the journal entry on March 31, 2018.Exchange of a PPE for a Financial Asset11. On January 1, 2018, Neptune Company has a piece land acquired a year ago at a costof P600,000. The land has a fair value of P700,000. On March 31, 2018, Neptune Company exchanged the land for a financial asset to be initially recognized at fair value through other comprehensive income. At the time of exchange, the shares, which was publicly listed, has a fair value of P820,000.Compute for the gain on exchange to be recognized in 2018.Provide the journal entry on March 31.
Information concerning Concord Corporation’s intangible assets is as follows. 1. On January 1, 2020, Concord signed an agreement to operate as a franchisee of Hsian Copy Service, Inc. for an initial franchise fee of $60,000. Of this amount, $12,000 was paid when the agreement was signed, and the balance is payable in 4 annual payments of $12,000 each, beginning January 1, 2021. The agreement provides that the down payment is not refundable and no future services are required of the franchisor. The present value at January 1, 2020, of the 4 annual payments discounted at 12% (the implicit rate for a loan of this type) is $36,450. The agreement also provides that 8% of the revenue from the franchise must be paid to the franchisor annually. Concord’s revenue from the franchise for 2020 was $850,000. Concord estimates the useful life of the franchise to be 10 years. (Hint: You may want to refer to Chapter 18 to determine the proper accounting treatment for the franchise fee and payments.)2. Concord incurred $75,000 of experimental and development costs in its laboratory to develop a patent that was granted on January 2, 2020. Legal fees and other costs associated with registration of the patent totaled $20,000. Concord estimates that the useful life of the patent will be 8 years.3. A trademark was purchased from Shanghai Company for $35,000 on July 1, 2017. Expenditures for successful litigation in defense of the trademark totaling $10,200 were paid on July 1, 2020. Concord estimates that the useful life of the trademark will be 20 years from the date of acquisition.(a) a schedule showing the intangible assets section of Concord’s balance sheet at December 31, 2020.CONCORD CORPORATIONIntangible AssetsDecember 31, 2020Franchise $43,605Patent 17,500Trademark 38,775 Total Intangible Assets 99,880 Collapse question part(b)a schedule showing all expenses resulting from the transactions that would appear on Concord’s income statement for the year ended December 31, 2020.CONCORD CORPORATIONExpenses Resulting from Selected Intangible Assets Transactionschoose the accounting period select a balance sheet item $enter a dollar amountselect a balance sheet item enter a dollar amountselect a balance sheet item enter a dollar amountselect a balance sheet item enter a dollar amountselect a balance sheet item enter a dollar amountselect a closing section name $enter a total amount for this section
Question for presentation week 8 – 10th SeptemberFinancial instruments The financial crisis of the late 2000s resulted in the collapse of many large financial institutions, the bailout of banks by national governments and downturns in world stock markets. Among the scapegoats blamed for the crisis was fair value accounting rules. The argument was that companies were forced by fair value accounting to write down their assets to what they hoped was temporarily irrational prices. These write-downs supposedly increased market downturns.The International Accounting Standards Board changed its rules in IAS 39 on balance sheet classifications so that companies could shift many of their financial assets out of categories where fair value accounting was required. This meant a company holding ‘dodgy’ bonds could delay recognition of future losses on those bonds by simply changing their category on the balance sheet. Such an action is possible because the changes to IAS 39 meant that financial assets could be classified four ways: as fair value through profit or loss, as available for sale, as held to maturity, and as loans and receivables. The first two classifications require financial assets to be marked to market, with those classified as the first category requiring changes in value to go through the income statement, while changes in value for those classified as available for sale would not impact on the income statement. The other classifications allow companies to avoid using fair values on the balance sheet.Required1. Suppose you are a company holding large quantities of financial instruments the market value of which had declined markedly since purchase. How would you classify those instruments and why?2. Suppose you are a company holding large quantities of financial instruments the market value of which had inclined markedly since purchase. How would you classify those instruments and why?3. Will companies with large holdings of dodgy financial instruments be motivated to disclose information about those instruments? Give reasons for your answer.
On July 31, 2020, Sunland Company paid $2,800,000 to acquire all of the common stock of Conchita Incorporated, which became a division (a reporting unit) of Sunland. Conchita reported the following balance sheet at the time of the acquisition.Current assets $720,000 Current liabilities $510,000Noncurrent assets 2,500,000 Long-term liabilities 410,000 Total assets $3,220,000 Stockholders’ equity 2,300,000 Total liabilities and stockholders’ equity $3,220,000It was determined at the date of the purchase that the fair value of the identifiable net assets of Conchita was $2,550,000. Over the next 6 months of operations, the newly purchased division experienced operating losses. In addition, it now appears that it will generate substantial losses for the foreseeable future. At December 31, 2020, Conchita reports the following balance sheet information.Current assets $400,000Noncurrent assets (including goodwill recognized in purchase) 2,330,000Current liabilities (700,000)Long-term liabilities (500,000) Net assets $1,530,000Finally, it is determined that the fair value of the Conchita Division is $1,850,000. Collapse question part(a) Compute the amount of goodwill recognized, if any, on July 31, 2020. (If answer is zero, do not leave answer field blank. Enter 0 for the amount.)The amount of goodwill $250,000(b)Determine the impairment loss, if any, to be recorded on December 31, 2020. (If answer is zero, do not leave answer field blank. Enter 0 for the amount.)The impairment loss $enter the impairment loss in dollars
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