Carson Realty Company (B) The Carson Realty Company (CRC) owned several apartment buildings in Greater Carson,...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Carson Realty Company (B) The Carson Realty Company (CRC) owned several apartment buildings in Greater Carson, a small Midwestern community. It rented studio apartments, as well as one- and two-bedroom apartment units to individuals-mainly university students-in the town. CRC began operations in July 2012. During the month of July, the following events occurred (differences from the Carson Realty Company (A) case are shown in bold faced type): The company borrowed $24,000,000 on a 20 year note to finance its activities. The interest rate was 12 percent. Interest and principal payments were due and payable on the first day of each month, beginning on August 1. July 1 The company purchased an apartment building that was 90% occupied. After all closing costs, legal fees, and other purchase-related transactions had been com- pleted, the building cost $15,000,000. The building's economic life was 20 years and a salvage value was $3,000,000. $500,000 in materials for renovations and repairs were purchased on credit. Payment was due August 11. July 5 July 11 Tenants in 90 rental units paid their rent, which averaged $600 per unit. Ten tenants promised to pay their $600 July rent on August 1. July 14 July 15 Building staff was paid for the first half of July. Total payroll was $4,000. July 28 Tenants in 200 rental units paid their rent, which averaged $500 per unit. July 30 Utilities for the month were paid, totaling $15,000. Building staff was owed for the last two weeks of July. Total payroll was $5,000. Payment would be made on August 1 July 31 July 31 $20,000 of the supply inventory had been used for minor repairs and main- tenance. Assignment 1. Prepare a balance sheei for CRC as of July 31, 2012. Try to do so by setting up T accounts and posting entries to them. Then ealculate ending balances for all the T accounts. Then set the balance sheet up in its proper format. 2. Prepare an inceme statement for July 2012, again in proper format. 3. Prepare a statement of cash flows for July 2012, using either the direct or indirect method. 4. What is your assessment of the financial condition of CRC? In answering this question, you should speculate on what the August financial statements will look like? Carson Realty Company (B) The Carson Realty Company (CRC) owned several apartment buildings in Greater Carson, a small Midwestern community. It rented studio apartments, as well as one- and two-bedroom apartment units to individuals-mainly university students-in the town. CRC began operations in July 2012. During the month of July, the following events occurred (differences from the Carson Realty Company (A) case are shown in bold faced type): The company borrowed $24,000,000 on a 20 year note to finance its activities. The interest rate was 12 percent. Interest and principal payments were due and payable on the first day of each month, beginning on August 1. July 1 The company purchased an apartment building that was 90% occupied. After all closing costs, legal fees, and other purchase-related transactions had been com- pleted, the building cost $15,000,000. The building's economic life was 20 years and a salvage value was $3,000,000. $500,000 in materials for renovations and repairs were purchased on credit. Payment was due August 11. July 5 July 11 Tenants in 90 rental units paid their rent, which averaged $600 per unit. Ten tenants promised to pay their $600 July rent on August 1. July 14 July 15 Building staff was paid for the first half of July. Total payroll was $4,000. July 28 Tenants in 200 rental units paid their rent, which averaged $500 per unit. July 30 Utilities for the month were paid, totaling $15,000. Building staff was owed for the last two weeks of July. Total payroll was $5,000. Payment would be made on August 1 July 31 July 31 $20,000 of the supply inventory had been used for minor repairs and main- tenance. Assignment 1. Prepare a balance sheei for CRC as of July 31, 2012. Try to do so by setting up T accounts and posting entries to them. Then ealculate ending balances for all the T accounts. Then set the balance sheet up in its proper format. 2. Prepare an inceme statement for July 2012, again in proper format. 3. Prepare a statement of cash flows for July 2012, using either the direct or indirect method. 4. What is your assessment of the financial condition of CRC? In answering this question, you should speculate on what the August financial statements will look like?
Expert Answer:
Related Book For
Concepts in Federal Taxation
ISBN: 9780324379556
19th Edition
Authors: Kevin E. Murphy, Mark Higgins, Tonya K. Flesher
Posted Date:
Students also viewed these accounting questions
-
During the first month of operations, the following events and transactions occurred for Virmani Architects Inc.: Apr.1 Invested cash of $10,000 and equipment of $6,000 in the company in exchange for...
-
During the first month of operations, the following events and transactions occurred for Astromech Accounting Services Inc.: May 1 Issued common shares for $20,000 cash. 1 Paid office rent of $950...
-
During the month of November the following transactions occurred. Assignment 1. Record the following transactions in the general journal and post them to the general ledger. 2. Prepare a trial...
-
Molly earns a gross yearly salary of $132,676. She has no dependent children and made the following tax deductible purchases: Charitable contributions: $5,401 Student loan interest: $1,429 When she...
-
Find the sums of each series. a. Find the sum of the first 12 odd positive integers. b. Find the sum of the first 20 odd positive integers. c. Find the sum of the first n odd positive integers.
-
What role do influencers play and what are their sources of power and social capital? What types of ties do we have to others in our communities?
-
Which of the following is a B2B sales promotion tool? a. A 10-percent-off online promo code b. A \($10.00\) mail-in rebate c. A frequent buyer card d. Sales contests
-
Richards, Inc., incurred the following costs during May: Raw materials used . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 662,000 Direct labor . . . . . . . . . . . . . . . . . . . ....
-
What is MATLAB? Pros and cons.
-
XYZ is a calendar-year corporation that began business on January 1, 2017. For 2017, it reported the following information in its current year audited income statement. Notes with important tax...
-
Hermione made 28 pans of fudge bars for an event at the university of central flordia. only (7)/(10) of each pan was eaten How many total fudge bar pans were eaten at the event?
-
In the absence of an exchange market for a specific foreign currency, what additional disclosure is required by the entity, as per the information provided?
-
What emerging technologies and methodologies are advancing our understanding of mitochondrial biology, including single-cell analysis, super-resolution microscopy, and genome editing tools targeting...
-
4. Consider the market for pie. For each of the following scenarios, do the following: a. State which curve will shift and in which direction. b. Explain why the curve shifted. c. Indicate what will...
-
Select one of these articles to evaluate. A Fly in the Buttermilk: Descriptions of University Life by Successful Black Undergraduate Students at a Predominately White Southeastern University The...
-
Quentin Tarantino is a film director. In 2018, Quentin writes a script for a horror film called "The Rats". In the film, giant rats in New Zealand attack people. The rats grow bigger in size with the...
-
35. A soccer ball is kicked from the ground at an angle above the horizontal. Show that the equation h = 0.25R tan represents the maximum height of the ball, where h is the height and R is the range.
-
How many years will it take a $700 balance to grow into $900 in an account earning 5%?
-
What are the tax consequences of receiving an ownership interest in an entity in exchange for services rendered to the entity?
-
What is meant by the Golsen rule?
-
Bostian Company reports a net Section 1231 gain of $31,000 during the current year. Identify the tax issue(s) posed by the facts presented. Determine the possible tax consequences of each issue that...
-
Consider the sample space and the partition Let be the field generated by this partition, and define the mapping as follows: This seemingly innocent mapping is not a random variable with respect to...
-
Given , consider the family of subsets This is not a field, since, for instance, . = {1,2,3,4}
-
Let us consider the scenario tree of Fig. 11.10 and define consider decision Data From Fig. 11.10 Data From Example 11.17 cision variables Z and Z, representing the number of stock shares that we buy...
Study smarter with the SolutionInn App