Week 3 exercises | Accounting homework help

WEEK 3 EXERCISES

 

Brief Exercise 5-2 Koch Corporation’s

Exercise 5-1 Deep Blue Something, Inc

Exercise 5-4  Denis Savard Inc

Exercise 5-7 Yasunari Kawabata Company

Exercise 5-12 Scott Butler Corporation

Exercise 24-2 For each of the subjoined after

Exercise 24-3 Carlton Company

Exercise 24-4 As mortgage analyst for Utrillo Bank

 

Brief Exercise 5-2

Koch Corporation’s manageed experiment estimate contained the subjoined asset recitals at December 31, 2014: Cash $7,000; Land $40,000; Patents $12,500; Accounts Receivable $90,000; Prepaid Insurance $5,200; Inventory $30,000; Satisfaction for Obscure Accounts $4,000; Equity Investments (trading) $11,000.

Prepare the running adaptedty individuality of the estimate fencing. (List Running Property in direct of liquidity.)

Brief Exercise 5-6

Patrick Corporation’s manageed experiment estimate contained the subjoined asset recitals at December 31, 2014: Prepaid Rent $12,000; Goodwill $50,000; Franchise Fees Receivable $2,000; Franchises $47,000; Patents $33,000; Trademarks $10,000.

 

Prepare the inappreciable adaptedty individuality of the estimate fencing

 

Exercise 5-1

Presented under are a estimate of estimate fencing recitals of Deep Blue Something, Inc. For each of the recitals under, evidence the adapted estimate fencing appoint.         

 

 

Balance Fencing Accounts

 

Balance Fencing Classification

(a)

 

Investment in Preferred Stock.

  

(b)

 

Treasury Stock.

 

 

(c)

 

Common Stock.

 

 

(d)

 

Dividends Payable.

 

 

(e)

 

Accumulated Depreciation-Equipment.

 

 

(f)(1)

 

Construction in Course (Constructed for another concern).

 

 

(f)(2)

 

Construction in Course (Constructed for the use of Deep Blue Something, Inc.).

  

(g)

 

Petty Cash.

  

(h)

 

Interest Payable.

 

 

(i)

 

Deficit.

 

 

(j)

 

Equity Investments (trading).

 

 

(k)

 

Income Taxes Payable.

 

 

(l)

 

Unearned Subscription Revenue.

 

 

(m)

 

Work in Process.

 

 

(n)

 

Salaries and Wages Payable.

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercise 5-4

Assume that Denis Savard Inc. has the subjoined recitals at the end of the running year.

1.

 

Common Stock

 

14.

 

Accumulated Depreciation-Buildings.

2.

 

Discount on Bonds Payable.

 

15.

 

Cash Restricted for Place Expansion.

3.

 

Treasury Hoard (at consume).

 

16.

 

Land Held for Future Place Site.

4.

 

Notes Payable (short-term).

 

17.

 

Allowance for Obscure Accounts.

5.

 

Raw Materials

 

18.

 

Retained Earnings.

6.

 

Preferred Hoard (Equity) Investments (long-term).

 

19.

 

Paid-in Capital in Extravagance of Par-Common Stock.

7.

 

Unearned Rent Revenue.

 

20.

 

Unearned Subscriptions Revenue.

8.

 

Work in Process.

 

21.

 

Receivables-Officers (due in one year).

9.

 

Copyrights.

 

22.

 

Inventory (artistic commodities).

10.

 

Buildings.

 

23.

 

Accounts Receivable.

11.

 

Notes Receivable (short-term).

 

24.

 

Bonds Payable (due in 4 years).

12.

 

Cash.

 

25.

 

Noncontrolling Interest.

13.

 

Salaries and Wages Payable.

 

 

 

 

 

Prepare a classified estimate fencing in amiable constitute. (List Running Property in direct of liquidity. For Land, Treasury Stock, Notes Payable, Preferred Hoard Investments, Notes Receivable, Receivables-Officers, Inventory, Bonds Payable, and Restricted Cash, invade the recital call singly and do not produce the picturesquely instruction produced in the interrogation.)

 

Exercise 5-7

Presented under are selected recitals of Yasunari Kawabata Troop at December 31, 2014.

Inventory (artistic commodities)

 

$ 52,000

 

Cost of Commodities Sold

 

$2,100,000

Unearned Service Revenue

 

90,000

 

Notes Receivable

 

40,000

Equipment

 

253,000

 

Accounts Receivable

 

161,000

Inventory (achievement in course)

 

34,000

 

Inventory (raw materials)

 

207,000

Cash

 

37,000

 

Supplies Expense

 

60,000

Equity Investments (short-term)

 

31,000

 

Allowance for Obscure Accounts

 

12,000

Customer Advances

 

36,000

 

Licenses

 

18,000

Restricted Cash for Place Expansion

 

50,000

 

Additional Paid-in Capital

 

88,000

 

 

 

 

Treasury Stock

 

22,000

 

The subjoined subjoined instruction is helpful

1. Inventories are treasured at lower-of-cost-or-market using LIFO.

2. Equipment is chronicled at consume. Accumulated slander, computed on a straight-length foundation, is $50,600.

3. The short-term investments accept a untarnished treasure of $29,000. (Assume they are trading securities.)

4. The notes receivable are due April 30, 2016, delay concern receivable whole April 30. The notes permit concern at 6%. (Hint: Accrued concern due on December 31, 2014.)

5. The satisfaction for obscure recitals applies to the recitals receivable. Accounts receivable of $50,000 are pledged as parallel on a bank mortgage.

6. Licenses are chronicled net of accumulated amortization of $14,000.

7. Treasury hoard is chronicled at consume..

 

Prepare the running adaptedty individuality of Yasunari Kawabata Company’s December 31, 2014, estimate fencing, delay misspend disclosures. (List Running Property in direct of liquidity. Invade recital call singly and do not produce the picturesquely instruction produced in the interrogation.)

 

Exercise 5-12

Presented under is the experiment estimate of Scott Butler Corporation at December 31, 2014.

 

 

Debit

 

Credit

Cash

 

$   197,000

 

 

Sales

 

 

 

$ 8,100,000

Debt Investments (trading) (cost, $145,000)

 

153,000

 

 

Cost of Commodities Sold

 

4,800,000

 

 

Debt Investments (long-term)

 

299,000

 

 

Equity Investments (long-term)

 

277,000

 

 

Notes Payable (short-term)

 

 

 

90,000

Accounts Payable

 

 

 

455,000

Selling Expenses

 

2,000,000

 

 

Investment Revenue

 

 

 

63,000

Land

 

260,000

 

 

Buildings

 

1,040,000

 

 

Dividends Payable

 

 

 

136,000

Accrued Liabilities

 

 

 

96,000

Accounts Receivable

 

435,000

 

 

Accumulated Depreciation-Buildings

 

 

 

152,000

Allowance for Obscure Accounts

 

 

 

25,000

Administrative Expenses

 

900,000

 

 

Interest Expense

 

211,000

 

 

Inventory

 

597,000

 

 

Gain (extraordinary)

 

 

 

80,000

Notes Payable (long-term)

 

 

 

900,000

Equipment

 

600,000

 

 

Bonds Payable

 

 

 

1,000,000

Accumulated Depreciation-Equipment

 

 

 

60,000

Franchises

 

160,000

 

 

Common Hoard ($5 par)

 

 

 

1,000,000

Treasury Stock

 

191,000

 

 

Patents

 

195,000

 

 

Retained Earnings

 

 

 

78,000

Paid-in Capital in Extravagance of Par

 

 

 

80,000

        Totals

 

$12,315,000

 

$12,315,000

 

Prepare a estimate fencing at December 31, 2014, for Scott Butler Corporation. (Ignore proceeds taxes). (List Running Property in direct of liquidity. List Property, Place and Equipment in direct of Land, Building and Equipment. Invade recital call singly and do not produce the picturesquely instruction produced in the interrogation.)

Exercise 24-2

For each of the subjoined after (post-balance-sheet) events, evidence whether a troop should (a) manage the financial statements, (b) reveal in notes to the financial statements, or (c) neither manage nor reveal.

Sr. No.

 

Subsequent (Post-Balance-Sheet) Events

 

 

1.

 

Settlement of federal tax predicament at a consume considerably in extravagance of the equality expected at year-end.

 

 

2.

 

Introduction of a new work length.

 

 

3.

 

Loss of constellation place due to courage.

 

 

4.

 

Sale of a expressive duty of the troop’s adaptedty.

 

 

5.

 

Retirement of the troop chairman.

 

 

6.

 

Prolonged employee stamp.

 

 

7.

 

Loss of a expressive customer.

 

 

8.

 

Issuance of a expressive estimate of shares of contemptible hoard.

 

 

9.

 

Material privation on a year-end receivable accordingly of a customer’s noncommunication.

 

 

10.

 

Hiring of a new chairman.

 

 

11.

 

Settlement of previous year’s litigation over the troop (no privation was accrued).

 

 

12.

 

Merger delay another troop of resembling magnitude.

 

 

 

Exercise 24-3

Carlton Troop is implicated in indecent disjoined industries. The subjoined instruction is helpful for each of the indecent industries.

Operating Segment

 

Total Revenue

 

Operating Emolument (Loss)

 

 

Identifiable Assets

W

 

$60,000

 

$15,000

 

 

$167,000

X

 

10,000

 

3,000

 

 

83,000

Y

 

23,000

 

(2,000)

 

21,000

Z

 

9,000

 

1,000

 

 

19,000

 

 

$102,000

 

$17,000

 

 

$290,000

 

Determine which of the easy segments are reportable grounded on the:

 

 

 

 

Reportable Segments

(a)

 

Revenue cupel.

 

 

(b)

 

Operating emolument (loss) cupel.

 

 

(c)

 

Identifiable adaptedty cupel.

 

 

 

 

Exercise 24-4

As mortgage analyst for Utrillo Bank, you accept been presented the subjoined instruction.

 

 

Toulouse Co.

 

Lautrec Co.

Assets

 

 

 

 

 

 

Cash

 

$120,000

 

 

$320,000

 

Receivables

 

220,000

 

 

302,000

 

Inventories

 

570,000

 

 

518,000

 

   Total running adaptedty

 

910,000

 

 

1,140,000

 

Other adaptedty

 

500,000

 

 

612,000

 

   Total adaptedty

 

$1,410,000

 

 

$1,752,000

 

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

Current liabilities

 

$305,000

 

 

$350,000

 

Long-term liabilities

 

400,000

 

 

500,000

 

Capital hoard and retained earnings

 

705,000

 

 

902,000

 

   Total liabilities and hoardholders’ equity

 

$1,410,000

 

 

$1,752,000

 

Annual sales

 

$930,000

 

 

$1,500,000

 

Rate of coarse emolument on sales

 

30

%

 

40

%

 

Each of these companies has requested a mortgage of $50,000 for 6 months delay no parallel offered. Accordingly your bank has reached its quota for mortgages of this mark, singly one of these requests is to be supposing.

Compute the different ratios for each troop. (Round apology to 2 decimal places, e.g. 2.25.)

 

 

Toulouse Co.

 

Lautrec Co.

Current ratio

 

 

 : 1

 

 

 : 1

Acid-cupel ratio

 

 

 : 1

 

 

 : 1

Accounts receivable turnover

 

 

 times

 

 

 times

Inventory turnover

 

 

 times

 

 

 times

Cash to running liabilities

 

 

 : 1

 

 

 : 1

 

 

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