Business
On February 1, 2018, Wolf Inc. issued 10% bonds dated February 1, 2018, with a face amount of $270,000. The bonds sold for $323,440 and mature in 20 years. The effective interest rate for these bonds was 8%. Interest is paid semiannually on July 31 and January 31. Wolf's fiscal year is the calendar year. Wolf uses the effective interest method of amortization. Required: 1. Prepare the journal entry to record the bond issuance on February 1, 2018. 2. Prepare the entry to record interest on July 31, 2018. 3. Prepare the necessary journal entry on December 31, 2018. 4. Prepare the necessary journal entry on January 31, 2019.
At the beginning of the current season on April 1, the ledger of Granite Hills Pro Shop showed Cash $ 3,360: inventory $ 3,500: and Common Stock $ 6,860. The following transactions were completed during April 2017.Apr. 5Purchased golf bags, clubs, and balls on account from Arnie Co. $ 1,500, terms 3/10, n/60.7Paid freight on Arnie purchase $ 80.9Received credit from Arnie Co. for merchandise returned $700.10Sold merchandise on account to members $1,420, terms n/30. The merchandise sold had a cost of $ 770.12Purchased golf shoes, sweaters, and other accessories on account from Woods Sportswear $ 1,060, terms 2/10, n30.14Paid Arnie Co. in full.17Received a credit from Woods Sportswear for merchandise returned $60.20Made sales on account to members $ 820, terms n/30. The cost of the merchandise sold was $550.21Paid Woods Sportswear in full.27Granted an allowance to members for clothing that did not fit properly $70.30Received payments on account from members $1,370.1. Journalize the April transactions using a perpetual inventory system.2. Prepare an income statement through gross profit for the month of April 2017.
Hilary sells bottled water from a small stand by the beach. On the last day of summer vacation, many people are on the beach, and Hilary realizes that she can make a lot more money this day if she hires someone to walk up and down the beach selling water. She finds a college student named Edison and makes him the following offer: They'll each sell water all day and split their earnings (revenue minus the cost of water) equally at the end of the day. Hilary knows that if they both work hard, Edison will earn $90 on the beach and Hilary will earn $240 at her stand, so they will each take home half of their total revenue: If Edison shirks, he'll generate only $60 in earnings. Hilary does not know that Edison estimates his personal cost (or disutility) of working hard as opposed to shirking at $30. Once out of Hilary's sight, Edison faces a dilemma: work hard (put in full effort) or shirk (put in low effort).In terms of Edison's total utility, it is worse for him to ____(work hard or shirk). Taking into account the loss in utility that working hard brings to Edison, Hilary and Edison together ___ (are or are not) better off if Edison shirks instead of working hard.Hilary knows Edison will shirk if unsupervised. She considers hiring her good friend Carrie to keep an eye on Edison. The most Hilary should be willing to pay Carrie to supervise Edison, assuming supervision is sufficient to encourage Edison to work hard, is ____ .a. 55.b. 30.c. 25.d. 20.It turns out that Hilary's friend Carrue is unavilable that day, so Hilary cannot find a reliable person to watch Edison. Which of the following arrangements will ensure that Edison works hard without making Hilary any worse off than she is when Edison shirks?A. Pay Edison $20, regardless of how many bottles of water he sells.B. Allow Edison to keep 75% of the revenue from the bottles of water he sells instead of 50%.C. Allow Edison to keep 57% of the revenue from the bottles of water he sells instead of 50%.D. Make Edison promise to work hard.
Fort Corporation had the following transactions during its first month of operations 1. Purchased raw materials on account, $85,000. 2. Raw Materials of $30,000 were requisitioned to the factory. 3. An analysis of the materials requisition slips indicated that $6,000 was classified as indirect materials labor costs incurred were $175,000 of which $145,000 pertained to factory wages payable and $30,000 pertained to employer payrol 4. Time tickets indicated that $145,000 was direct labor and $30,000 was indirect labor. 5. Overhead costs incurred on account were $198,000 6. Manufacturing overhead was applied at the rate of 150% of direct labor cost. 7. Goods costing $115,000 are still incomplete at the end of the month; the other goods were completed and transferred to finished goods 8. Finished goods costing $100,000 to manufacture were sold on account for $130,000. Journalize the above transactions for Fort Corporation. (Record journal entries in the order presented in the problem.
The purchase of office equipment at a cost of $7,600 with an immediate payment of $4,200 and agreement to pay the balance within 60 days is recorded by the purchaser with:_____. A. A debit of $7,600 to Office Equipment, a credit of $4,200 to Cash, and a credit of $3,400 to Accounts Payable. B. A debit of $7,600 to Office Equipment, a debit of $4,200 to Accounts Receivable, and a credit of $3,400 to Accounts Payable. C. A debit of $3,400 to Accounts Receivable, a debit of $4,200 to Cash, and a credit of $7,600 to Office Equipment. D. A debit of $7,600 to Office Equipment, a credit of $4,200 to Cash, and a credit of $3,400 to Accounts Receivable.
Verne Cova Company has the following balances in selected accounts on December 31, 2014.Accounts Receivable $ -0-Accumulated DepreciationEquipment -0-Equipment 7,000Interest Payable -0-Notes Payable 10,000Prepaid Insurance 2,100Salaries and Wages Payable -0-Supplies 2,450Unearned Service Revenue 30,000All the accounts have normal balances. The information below has been gathered at December 31, 2014.1. Verne Cova Company borrowed $10,000 by signing a 12%, one-year note on September 1, 2014.2. A count of supplies on December 31, 2014, indicates that supplies of $900 are on hand.3. Depreciation on the equipment for 2014 is $1,000.4. Verne Cova Company paid $2,100 for 12 months of insurance coverage on June 1, 2014.5. On December 1, 2014, Verne Cova collected $30,000 for consulting services to be performed from December 1, 2014, through March 31, 2015.6. Verne Cova performed consulting services for a client in December 2014. The client will be billed $4,200.7. Verne Cova Company pays its employees total salaries of $9,000 every Monday for the preceding 5-day week (Monday through Friday). On Monday, December 29, employees were paid for the week ending December 26. All employees worked the last 3 days of 2014.Instructions:Prepare adjusting entries for the seven items described above.
Use the following information to prepare a multistep income statement and a classified balance sheet for Eller Equipment Co. for Year 1. Salaries expense $122,000 Beginning retained earnings $61,100 Common stock 110,000 Warranties payable (short term) 6,500 Notes receivable (short term) 32,500 Gain on sale of equipment 19,000 Allowance for doubtful accounts 19,000 Operating expenses 65,000 Accumulated depreciation 66,000 Cash flow from investing activities 116,000 Notes payable (long term) 160,000 Prepaid rent 38,000 Salvage value of building 21,000 Land 95,000 Interest payable (short term) 6,000 Cash 41,000 Uncollectible accounts expense 45,000 Inventory 101,000 Supplies 6,500 Accounts payable 55,000 Equipment 243,000 Interest expense 36,000 Interest revenue 6,200 Salaries payable 68,000 Sales revenue 940,000 Unearned revenue 47,000 Dividends 20,000 Cost of goods sold 595,000 Warranty expense 9,200 Accounts receivable 108,000 Interest receivable (short term) 3,600 Depreciation expense 3,000
Following is information about consulting jobs for a company that is increasing in sales, but has not yet become profitable. The owner keeps financial records on yellow sticky notes stuck to the wall behind his desk. He has asked you to help him set up a costing system so that he can better understand his costs. The owner said that job 140 was completed, job 141 was started and completed, and job 142 was started this month. Professional labour hours for contracts in process consist of job 140 with 129 hours, job 141 with 258 hours, and job 142 with 137 hours. Professional labour was paid $23,580 for the month, and the professional employees are all paid the same rate per hour. Overhead is allocated using an estimated rate based on professional labour hours. The total cost for job 141 is $32,766. Actual overhead cost for the month was $53,448. What is labour paid per hour? Labour per hour. What is the estimated rate per labour hour used to allocate overhead? per hour. Overhead rate What are the total costs (before adjusting for overapplied or underapplied overhead) for Jobs 141, 142, and 143? Total cost Job 140 Job 141 Job 142 What are the amounts in cost of goods sold and work-in-process at the end of the month? Cost of goods sold Work-in-process What amount of overhead was overapplied or underapplied this month? Overhead If this month is typical, what is a reasonable overhead rate? Reasonable overhead rate per hour