Master College Concepts with Expert Q&A and Solutions
[The following information applies to the questions displayed below.] The general ledger of Jackrabbit Rentals at January 1, 2021, includes the following account balances:Accounts Debits CreditsCash $ 41,500 Accounts Receivable 25,700 Land 110,800 Accounts Payable 15,300 Notes Payable (due in 2 years) 30,000 Common Stock 100,000 Retained Earnings 32,700 Totals $ 178,000 $178,000 The following is a summary of the transactions for the year:1. January 12 Provide services to customers on account, $62,400.2. February 25 Provide services to customers for cash, $75,300.3. March 19 Collect on accounts receivable, $45,700.4. April 30 Issue shares of common stock in exchange for $30,000 cash.5. June 16 Purchase supplies on account, $12,100.6. July 7 Pay on accounts payable, $11,300.7. September30 Pay salaries for employee work in the current year, $64,200.8. November 22 Pay advertising for the current year, $22,500.9. December 30 Pay $2,900 cash dividends to stockholders.The following information is available for the adjusting entries.Accrued interest on the notes payable at year-end amounted to $2,500 and will be paid January 1, 2022. Accrued salaries at year-end amounted to $1,500 and will be paid on January 5, 2022. Supplies remaining on hand at the end of the year equal $2,300.Record closing entries. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)
Reconstruct adjusting and closing entries for the month ended September 30 from the T-accounts below.Prepaid Insurance Accounts Receivable Unearned Revenues 1,350 1,250 1,050 130 275 235 1,220 1,525 815 Wages Payable 385 385 Diane Lin, Capital Diane Lin, Drawing Income Summary Fees Earned 7,000 2,400 5,510 5,000580 2,400 6,090 2752,400 0 580 235 4,020 0 5,510 0Wages Expense Rent Expense Insurance Expense Utilities Expense3,600 1,880 130 95 385 1,880 130 95 3,985 0 0 0 0
Western Sound Studios records and masters audio tapes of popular artists in live concerts. The performers use the tapes to prepare live albums, CDs, and MP3s. The following account balances were available at the beginning of 2009:Accounts Payable $ 11,900 Accounts Receivable 384,000 Cash 16,300 Common Stock 1,000 Insurance Payable 11200 Interest Payable 100,000 Notes Payable (Long-term) 4000Rent Payable (Building) 10000Retained Earnings, 12/31/201101,200During 2009, the following transactions occurred (the events described below are aggregations of many individual events):a. Taping services in the amount of $994,000 were billed.b. The accounts receivable at the beginning of the year were collected.c. In addition, cash for $983,000 of the services billed in transaction a was collected.d. The rent payable for the building was paid. In addition, $48,000 of building rental costs was paid in cash. There was no rent payable or prepaid at year-end.e. The equipment rent payable on January 1 was paid. In addition, $84,000 of equipment rental costs was paid in cash. There was no rent payable or prepaid at year-end.f. Utilities expense of $56,000 was incurred and paid in 2009.g. Salaries expense for the year was $702,000. All $702,000 was paid in 2009.h. The interest payable at January 1 was paid. During the year, an additional $11,000 of interest was paid. At year-end no interest was payable.i. Income taxes for 2009 in the amount of $19,700 were incurred and paid.
Following are selected account balances from Penske Company and Stanza Corporation as of December 31, 2018: Penske Stanza Revenues $ (795,000 ) (700,000) Cost of goods sold 283,250 175,000 Depreciation expense184,000 302,000 Investment income Not given 0 Dividends declared 80,000 60,000 Retained earnings, 1/1/18(732,000 (268,000) Current assets 510,000 668,000 Copyrights 1,072,000 558,500 Royalty agreements 722,000 1,116,000 Investment in Stanza Not given 0 Liabilities (562,000 ) (1,631,500) Common stock (600,000 )($20 par) (200,000 )($10 par)Additional paid-in capital (150,000) (80,000) Note: Parentheses indicate a credit balance.On January 1, 2018, Penske acquired all of Stanzas outstanding stock for $818,000 fair value in cash and common stock. Penske also paid $10,000 in stock issuance costs. At the date of acquisition copyrights (with a six-year remaining life) have a $632,000 book value but a fair value of $746,000.As of December 31, 2018, what is the consolidated copyrights balance?For the year ending December 31, 2018, what is consolidated net income?As of December 31, 2018, what is the consolidated retained earnings balance?As of December 31, 2018, what is the consolidated balance to be reported for goodwill?a. Consolidated copyrights b. Consolidated net income c. Consolidated retained earnings d. Consolidated goodwill
Outdoor Industries manufactures custom-designed playground equipment for schools and city parks. Outdoor expected to incur $627,000 of manufacturing overhead cost, 41,800 of direct labor hours, and $1,588,400 of direct labor cost during the year (the cost of direct labor is $38 per hour). The company allocates manufacturing overhead on the basis of direct labor hours. During January, Outdoor completed Job 302. The job used 155 direct labor hours and required $14,500 of direct materials The City of Westlake has contracted to purchase the playground equipment at a price of 26% over manufacturing cost. Requirement 1. Calculate the manufacturing cost of Job 302. First identify the formula, then calculate the predetermined overhead rate. Estimated yearly / Estimated yearly = Predetermined overhead rate overhead costs direct labor hours627,000 / 41,800 = 15 per hourCalculate the manufacturing cost of Job 302. Direct materials 14,500Direct labor Manufacturing overhead Total job cost
Assume an investor company acquires for $320,000 an 8% investment in the common stock of an investee company on February 15, 2018. The investor determined the common stock of the investee has a readily determinable fair value. On December 31, 2018, the fair value of the 8% common stock investment is $340,000, and the investor company made made all of the appropriate adjustments in preparation of the annual financial statements. On March 1, 2019, the investor company acquires an additional 17% of common stock of the investee for $765,000, thereby increasing the investor's overall ownership interest to 25%.Requireda. For this question only, assume instead that the investor determined, on February 15, 2018, that the common stock of the investee does not have a readily determinable fair value. In addition, the investor company determined that the additional 17% common stock purchase on March 1, 2019 does qualify as an observable price change in orderly transaction. Prepare the journal entries the investor company should record on March 1, 2019.Note: If a journal entry is not required, select "N/A" as your answers for the drop-down options and leave the Debit and Credit answers blank (zero).Description DebitCreditTo adjust value of investment account.To record the purchase of additional stock.b. For this question only, assume instead that the investor determined, on February 15, 2018, that the common stock of the investee does not have a readily determinable fair value. In addition, the investor company determined that the additional 17% common stock purchase on March 1, 2019 does not qualify as an observable price change in orderly transaction. Prepare the journal entries the investor company should record on March 1, 2019.Note: If a journal entry is not required, select "N/A" as your answers for the drop-down options and leave the Debit and Credit answers blank (zero).Description DebitCreditTo adjust value of investment account.To record the purchase of additional stock.