On January 1, 2021, The Barrett Company purchased merchandise from a supplier. Payment was a noninterest-bearing note requiring five annual payments of $25,000 on each December 31 beginning on December 31, 2021, and a lump-sum payment of $150,000 on December 31, 2025. A 10% interest rate properly reflects the time value of money in this situation.

Required:
Calculate the amount at which Barrett should record the note payable and corresponding merchandise purchased on January 1, 2021.

Answer:

$187,908

Explanation:

Hint : Use time of Value techniques to calculate the price (today) : January 1, 2021.

Pmt = ($25,000)

n = 5

Fv = ($150,000)

i = 10 %

P/yr = 1

Pv = ?

Using a Financial Calculator, the price (today) that is the PV will be $187,907.87 or $187,908.

Thus the amount at which Barrett should record the note payable and corresponding merchandise purchased on January 1, 2021 will be $187,908.

Skidmore Music Company had the following transactions in March:
a. Sold instruments to customers for $16, 700, received $10, 700 in cash and the rest on account. The cost of the instruments was $7, 100.
b. Purchased $4, 900 of new instruments inventory; paid $1, 700 in cash and owed the rest on account.
c. Paid $720 in wages for the month.
d. Received $3, 100 from customers as deposits on orders of new instruments to be sold to the customers in April.
e. Received a $280 bill for March utilities that will be paid in April.
Required:
Complete the following statements:
1. Cash basis Income Statement
2. Accrual basis Income Statement

Marc and Michelle are married and earned salaries this year of $64,000 and $12,000, respectively. In addition to their salaries, they received interest of $350 from municipal bonds and $500 from corporate bonds. Marc contributed $2,500 to an individual retirement account, and Marc paid alimony to a prior spouse in the amount of $1,500 (under a divorce decree effective June 1, 2005). Marc and Michelle have a 10-year-old son, Matthew, who lived with them throughout the entire year. Thus, Marc and Michelle are allowed to claim a $2,000 child tax credit for Matthew. They are also able to claim $2,900 in recovery rebate credit ($2,400 for Marc and Michelle and $500 for Matthew). Assume they did not receive the recovery rebate in advance. Marc and Michelle paid $6,000 of expenditures that qualify as itemized deductions and they had a total of $3,500 in federal income taxes withheld from their paychecks during the year. (Use the tax rate schedules).
A. What is Marc and Michelle’s gross income?
B. What is Marc and Michelle’s adjusted gross income?
C. What is the total amount of Marc and Michelle’s deductions from AGI?
D. What is Marc and Michelle’s taxable income?
E. What is Marc and Michelle’s taxes payable or refund due for the year?

Suppose government spending is cut. Other things being equal, the aggregate demand for national production will
rise.


remain constant.


fall.


All of the above

Money is to an economy what language is to communication. What does this statement mean?

Cash flows from operations may not be sufficient for a firm to keep up with growth-related financing needs, or the firm may not be able to always generate enough cash flow to maintain a surplus of cash. Firms prefer to borrow now to fulfill their capital requirements through means of short-term financing or long-term financing. Both methods have their advantages and disadvantages.

The following statement identifies a possible characteristic of short-term financing.

Consider this case:
Short-term loans usually have a lower cost than long-term loans. Identify whether the preceding statement is true or false.

a. This statement is false and a disadvantage of short-term financing.
b. This statement is true and an advantage of short-term financing.

Firms use a variety of short-term financing sources to support working capital. Use the descriptions in the following table to identify the short-term financing source.

Description Short-Term Financing Source
A formal, committed line of credit extended by a bank or other lending institution.
An obligation backed by collateral, often inventories or accounts receivable.

Which of the following is a key role that a human resource manager can play in a company?

A. Public Relations officer
B. Marking Analyst
C. Training specialist
D. Sales supervisor

Question # 5

Multiple Select

Aside from distributing investments and savings, the primary tasks of the financial service system

are (Select all that apply.)

U providing avenues to borrow money

growing the country's economy

aiding in the creation of capital formation

U managing and mitigating the risks

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Journalize the following business transactions in general journal form. Identify each transaction by number. You may omit explanations of the transaction. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
1. Stockholders invest $40,000 in cash in starting a real estate office operating as a corporation.
2. Purchased $500 of supplies on credit.
3. Purchased equipment for $25,000, paying $3,500 in cash and signed a 30-day, $21,500, note payable.
4. Real estate commissions billed to clients amount to $4,000.
5. Paid $700 in cash for the current month's rent.
6. Paid $250 cash on account for office supplies purchased in transaction 2.
7. Received a bill for $800 for advertising for the current month.
8. Paid $2,500 cash for office salaries.
9. Paid $1,200 cash dividends to stockholders.
10.Received a check for $2,000 from a client in payment on account for commissions billed in transaction 4.

Bank Reconciliation and Entries The cash account for Stone Systems at July 31, 20Y5, indicated a balance of $12,270. The bank statement indicated a balance of $15,440 on July 31, 20Y5. Comparing the bank statement and the accompanying canceled checks and memos with the records reveals the following reconciling items: Checks outstanding totaled $5,560. A deposit of $5,790, representing receipts of July 31, had been made too late to appear on the bank statement. The bank had collected $3,010 on a note left for collection. The face of the note was $2,860. A check for $800 returned with the statement had been incorrectly recorded by Stone Systems as $880. The check was for the payment of an obligation to Holland Co. for the purchase of office supplies on account. A check drawn for $400 had been incorrectly charged by the bank as $40. Bank service charges for July amounted to $50.

Required:
Prepare a bank reconciliation.

A University is offering a charitable gift program. A former student who is now 50 years old is consider the following offer: The student can invest $8,900.00 today and then will be paid a 9.00% APR return starting on his 65th birthday (i.e For a $10,000 investment, a 9% rate would mean $900 per year). The program will pay the cash flow for this investment while you are still alive. You anticipate living 21.00 more years after your 65th birthday. The former student wants a return of 6.00% on his investments, but would like to consider this opportunity.

Required:
Using the student's desired return, what is the value of this deferred annuity today on his 50th birthday?

Below are cash transactions for a company, which provides consulting services related to mining of precious metals.

a. Cash used for purchase of office supplies, $1,600.
b. Cash provided from consulting to customers, $42,600.
c. Cash used for purchase of mining equipment, $67,000.
d. Cash provided from long-term borrowing, $54,000.
e. Cash used for payment of employee salaries, $23,400.
f. Cash used for payment of office rent, $11,400.
g. Cash provided from sale of equipment purchased in c. above, $21,900.
h. Cash used to repay a portion of the long-term borrowing in d. above, $37,000.
i. Cash used to pay office utilities, $3,700.
j. Purchase of company vehicle, paying $9,400 cash.

Required:
Calculate cash flows from operating activities.

Identify which control activity is violated in each of the following situations, and explain how the situation creates an opportunity for fraud or inappropriate accounting practices.

1. Once a month, the sales department sends sales invoices to the accounting department to be recorded.

2. Leah Hutcherson orders merchandise for Rice Lake Company; she also receives merchandise and authorizes payment for merchandise.

3. Several clerks at Great Foods use the same cash register drawer

connecting u dropped its price from $20 to $16 per gigabyte of data. Joe according to the midpoint formula, Connecting U reduced its price by what percentage?

Sheridan Company pays all salaried employees on a biweekly basis. Overtime pay, however, is paid in the next biweekly period. Sheridan accrues salaries expense only at its December 31 year end. Data relating to salaries earned in December 2020 are as follows: Last payroll was paid on 12/26/20, for the 2-week period ended 12/26/20. Overtime pay earned in the 2-week period ended 12/26/20 was $24000. Remaining work days in 2020 were December 29, 30, 31, on which days there was no overtime. The recurring biweekly salaries total $444000.
Assuming a five-day workweek, Sheridan should record a liability at December 31, 2020 for accrued salaries of:_________.
a. $266400
b. $290400
c. $133200
d. $157200

Larkspur Incorporated factored $124,300 of accounts receivable with Cullumber Factors Inc. on a without-recourse basis. Cullumber assesses a 2% finance charge of the amount of accounts receivable and retains an amount equal to 5% of accounts receivable for possible adjustments.

Required:
Prepare the journal entry for Larkspur Incorporated and Cullumber Factors to record the factoring of the accounts receivable to Cullumber.

Lipscomb Corporation is estimating its WACC. Its target capital structure is 20 percent debt, 20 percent preferred stock, and 60 percent common equity. Its bonds have a 12 percent coupon, paid semiannually, a current maturity of 20 years, and sell for 1,000 USD. The firm could sell, at par, 100 USD preferred stock which pays a 12 percent annual dividend, but flotation costs of 5 percent would be incurred. Libscomb is a constant-growth firm which just paid a dividend of $2.00, sells for 27.00 USD per share, and has a growth rate of 8 percent. The firm's marginal tax rate is 40.

Required:
a. What is Rollins' cost of common stock using the bond-yield-plus-risk-premium approach?
b. What is Rollins' WACC?

Edison Leasing leased high-tech electronic equipment to Manufacturers Southern on January 1, 2018. Edison purchased the equipment from International Machines at a cost of $139,107.

Related Information:

Lease term 2 years (8 quarterly periods)
Quarterly rental payments $18,000 at the beginning of each period
Economic life of asset 2 years
Fair value of asset $139,107
Implicit interest rate 4% (Also lessee’s incremental borrowing rate)

Required:
Prepare a lease amortization schedule and appropriate entries for Edison Leasing from the beginning of the lease through January 1, 2019. Edison’s fiscal year ends December 31.

The Dean of Admissions at Pace University is considering a survey of high school seniors in order to design better promotional materials for Pace. Discuss the issues to be considered, the different methods of conducting this survey, and the advantages and disadvantages of each.

Comfort chair company manufacturers a standard recliner. During February, the firm's Assembly Department started production of 73,000 chairs. During the month, the firm completed 78,000 chairs, and transferred them to the Finishing Department. The firm ended the month with 10,000 chairs in ending inventory. All direct materials costs are added at the beginning of the production cycle and conversion costs are added uniformly throughout the production process. The FIFO method of process costing is used by Comfort. Beginning work in process was 30% complete as to conversion costs, while ending work in process was 80% complete as to conversion costs.
Beginning inventory:
DIrect materials $24,000
Conversion costs $35,000
Manufacturing costs added during the accounting period:
Direct materials $168,000
Conversion costs $278,000
1. What were the equivalent units for conversion costs during February? (HINT: The answer is 81,500, but I need work to support this)
2. What is the amount of direct materials cost assigned to ending work-in-process inventory at the end of February? (HINT: The answer is $23,000, but I need work to support this)

The following information is available for Mergenthaler Corporation for the year ended December 31, 2022:

Collection of principal on long-term loan to a supplier $16,000
Acquisition of equipment for cash 10,000
Proceeds from the sale of long-term investment at book value 22,000
Issuance of common stock for cash 20,000
Depreciation expense 25,000
Redemption of bonds payable at carrying (book) value 34,000
Payment of cash dividends 6,000
Net income 30,000
Purchase of land by issuing bonds payable 40,000

In addition, the following information is available from the comparative balance sheet for Mergenthaler at the end of 2022 and 2021:

2021 2022
Cash $148,000 $91,000
Accounts receivable (net) 25,000 15,000
Prepaid insurance 19,000 13,000
Total current assets $192,000 $119,000
Accounts payable $30,000 $19,000
Salaries and wages payable 6,000 7,000
Total current liabilities $36,000 $26,000

Required:
Prepare Mergenthaler's statement of cash flows for the year ended December 31, 2014, using the indirect method.

Transactions for Buyer and SellerShore Co. sold merchandise to Blue Star Co. on account, $112,000, terms FOB shipping point, 2/10, n/30. The cost of the merchandise sold is $67,200. Shore Co. paid freight of $1,800.Journalize Shore Co.'s entry for the sale, purchase, and payment of amount due.Accounts Receivable-Blue Star Co. Sales Cost of Merchandise Sold Merchandise Inventory Common Stock Cash Cash Accounts Receivable-Blue Star Co. Journalize Blue Star Co.'s entry for the sale, purchase, and payment of amount due.Merchandise Inventory Accounts Payable-Shore Co. Accounts Payable-Shore Co. Cash

Chance company had two operating divisions, one manufacturing farm equipment and other office supplies. Both divisions are considered separate components as defined by generally accepted accounting principles. The farm equipment component had been unprofitable, and on Sept. 1, 2016, the company adopted a plan to sell the assets of the division.
The actual sale was completed on Dec. 15, 2016, at the price of $600,000. The book value of the division's assets was $1,000,000, resulting in a before-tax loss of $400,000 on the sale. The division incurred a before-tax operating loss from operations of $130,000 from the beginning of the year through Dec. 15. The income tax rate is 40%. Chances after-tax income from its continuing operations is $350,000.
Required:
Prepare an income statement for 2016 beginning with income from continuing operations. Include appropriate EPS disclosures assuming that 100,000 shares of common stock were outstanding throughout the year.

Example 1: Alex began putting money in his 401(k) in his early 20s; consequently, he will have financial security when he retires.
Example 2: Louise is the most qualified candidate for the position; therefore, we should hire her.

Identify the correctly written compound sentences. Check all that apply.

a. All e-mail, even once deleted, is retrievable and, therefore, you should avoid sending sensitive information in an e-mail.
b. E-mail facilitates collaboration between people in remote locations; however, when collaboration requires the exchange of large data files, it is often easier to use web-based collaboration software.
c. Many people prefer e-mail over phone conversations, they leave a written record.
d. E-mail can be an efficient way to communicate, and it makes communicating across time zones much easier.

Every 6 months, Leo Perez takes an inventory of the consumer debts he has outstanding. His latest tally shows that he still owes $4,250 on a home improvement loan (monthly payments of $100); he is making $50 monthly payments on a personal loan with a remaining balance of $825; he has a $1,500, secured single- payment loan that's due late next year; he has a $70,000 home mortgage on which he's making $850 monthly payments; he still owes $12,500 on a new car loan (monthly payments of $550); and he has a $1,200 balance on his Mastercard (minimum payment of $50), a $50 balance on his Shell credit card (balance due in 30 days), and a $500 balance on a personal line of credit ($90 monthly payments).
a. Use Worksheet to prepare an inventory of Leo's consumer debt.
Type of Consumer Debt Creditor Currently Monthly Latest Balance Due
Payment
Auto loans
Personal installment loans
Home improvement loan
Single-payment loans
Credit cards Mastercard
(retail charge cards, bank
cards, T&E Shell cards, etc.)
Personal line of credit $ $
Totals $
b. Find his debt safety ratio, given that his take-home pay is $2,000 per month. Round the answer to 1 decimal place. %
c. Would you consider this ratio to be good or bad?

Hussein got a call yesterday from First Bank, the company that issued his credit card inquiring about an $105.00 charge made in Buenos Aires, Argentina. Upon learning that Hussein was in Detroit and had not made this purchase, the bank quickly took steps to cancel the card and issue a new one. Given the circumstances that Hussein's credit card number had an illegal transaction, he may also want to:____________.
A) check his computer's firewall to make sure it's working.
B) cancel his account and eliminate credit cards from his life.
C) change his passwords and store them in a password manager.
D) diversify his spending habits by using one of several credit cards when making purchases.

ogan Products computes its predetermined overhead rate annually on the basis of direct labor-hours. At the beginning of the year, it estimated that 40,000 direct labor-hours would be required for the period's estimated level of production. The company also estimated $466,000 of fixed manufacturing overhead expenses for the coming period and variable manufacturing overhead of $3.00 per direct labor-hour. Logan's actual manufacturing overhead for the year was $713,400 and its actual total direct labor was 41,000 hours.
Required:
Compute the company's pre-determined overhead rate for the year.

An internal control system consists of the policies and procedures managers use to protect assets, ensure reliable accounting, promote efficient operations, and uphold company policies. It can prevent avoidable losses and help managers both plan operations and monitor company and human performance. Principles of good internal control include establishing responsibilities, maintaining adequate records, insuring assets and bonding employees, separating recordkeeping from custody of assets, dividing responsibilities for related transactions, applying technological controls, and performing regular independent reviews.
Sarbanes-Oxley Act requires each of the following: (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark willl be automatically graded as incorrect.)
An effective internal control
Light penalties for violators
Auditors must evaluate internal controls
Auditor's work overseen by Public Accounting Board

Sara’s Salsa Company produces its condiments in two types: Extra Fine for restaurant customers and Family Style for home use. Salsa is prepared in department 1 and packaged in department 2. The activities, overhead costs, and drivers associated with these two manufacturing processes and the company’s production support activities follow.

Process Activity Overhead cost Driver Quantity
Department 1 Mixing $4,500 Machine hours 1,500
Cooking 11,250 Machine hours 1,500
Product testing 112,500 Batches 600
$128,250

Department 2 Machine calibration $250,000 Production runs 400
Labeling 12,000 Cases of output 120,000
Defects 6,000 Cases of output 120,000
$268,000

Support Recipe formulation $90,000 Focus groups 45
Heat, lights, and water 27,000 Machine hours 1,500
Materials handling 65,000 Container types 8
$182,000

Additional production information about its two product lines follows.

Extra Fine Family Style
Units produced 20,000 cases 100,000 cases
Batches 200 batches 400 batches
Machine hours 500 MH 1,000 MH
Focus groups 30 groups 15 groups
Container types 5 containers 3 containers
Production runs 200 runs 200 runs

Required:
Using ABC, compute the total cost per case for each product type if the direct labor and direct materials cost is $6 per case of Extra Fine and $5 per case of Family Style.

At the beginning of the year, Monroe Company estimates annual overhead costs to be $500,000 and that 250,000 machine hours will be operated. Using machine hours as a base, the amount of overhead applied during the year if actual machine hours for the year was 150,000 hours is A.$500,000. B.$300,000. C.$600,000. D.$150,000.

DS Unlimited has the following transactions during August.
August 6 Purchases 52 handheld game devices on account from GameGirl, Inc.,
for $110 each, terms 2/10, n/60.
August 7 Pays $310 to Sure Shipping for freight charges associated with the
August 6 purchase.
August 10 Returns to GameGirl seven game devices that were defective.
August 14 Pays the full amount due to GameGirl.
August 23 Sells 32 game devices purchased on August 6 for $130 each to
customers on account. The total cost of the 32 game devices sold is
$3,670.00.
Required:
Record the transactions of DS Unlimited, assuming the company uses a perpetual inventory system.