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intermediate accounting volume 2
Intermediate Accounting Volume 2 13th Canadian Edition Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Irene M. Wiecek, Bruce J. McConomy - Solutions
Kitchener Corporation has followed IFRS and used the accrual basis of accounting for several years. A review of the records, however, indicates that some expenses and revenues have been handled on a cash basis because of errors made by an inexperienced bookkeeper. Income statements prepared by the
Ali Reiners, the new controller of Luftsa Corp., is preparing the financial statements for the year ended December 31, 2023. Luftsa is a publicly traded entity and therefore follows IFRS. Ali has found the following information:1. Luftsa has been offering a loyalty rewards program to its customers
Tracy Ltd. purchased a piece of equipment on January 1, 2019, for $1.2 million. At that time, it was estimated that the machine would have a 15-year life and no residual value. On December 31, 2023, Tracy’s controller found that the entry for depreciation expense was omitted in error in 2020. In
You have been asked by a client to review the records of Inteq Corporation, a small manufacturer of precision tools and machines that follows ASPE. Your client is interested in buying the business, and arrangements were made for you to review the accounting records. Your examination reveals the
Day and Night Cinemas was significantly affected by the COVID-19 pandemic. Several of its balances became highly uncertain and could not be predicted. Management continued to monitor and assess the impact of the pandemic on its judgements, estimates, accounting policies, and amounts recognized in
When the records of Hilda Corporation were reviewed at the close of 2023, the following errors were discovered.InstructionsFor each item, indicate by a check mark in the appropriate column whether the error resulted in an overstatement or understatement, or had no effect on net income for the years
The condensed statement of changes in financial position and detailed income statement information (in ’000s) for Tran Consulting Ltd. follow. Tran contracts professionals in the electronic data management field and provides services to clients around the globe.Instructionsa. Using Excel, perform
On January 1, 2023, Manfred Manufacturers had 300,000 common shares outstanding. On April 1, the corporation issued 30,000 new common shares to raise additional capital. On July 1, the corporation declared and distributed a 10% stock dividend on its common shares. On November 1, the corporation
On January 1, 2023, Logan Limited had shares outstanding as follows:6% cumulative preferred shares, $100 par value, 10,000 shares issued and outstanding $1,000,000Common shares, 200,000 shares issued and outstanding 2,000,000To acquire the net assets of three smaller companies, the company
Hedley Corporation had 2023 net income of $1.4 million. During 2023, Hedley paid a dividend of $5 per share on 100,000 preferred shares. Hedley also had 220,000 common shares outstanding during the year. Calculate Hedley’s 2023 earnings per share. Round to the nearest cent.
Audrey Inc. has 1 million common shares outstanding as at January 1, 2023. On June 30, 2023, 4% convertible bonds were converted into 100,000 additional shares. Up to that point, the bonds had paid interest of $250,000 after tax. Net income for the year was $1,298,678. During the year, the company
The 2023 income statement of Tanel Corporation showed net income of $860,000, which included a loss from discontinued operations of $140,000. Tanel had 25,000 common shares outstanding all year.(a) Calculate earnings per share for 2023 as it should be reported to shareholders. Round to the nearest
Koala Inc., a publicly traded company, had 210,000 common shares outstanding on December 31, 2022. During 2023, the company issued 8,000 shares on May 1 and retired 14,000 shares on October 31. For 2023, the company reported net income of $229,690 after a loss from discontinued operations of
Condensed data from the comparative SFP of Legros Inc. follow:a. Using vertical (common-size) analysis, calculate the various SFP categories as a percentage of total assets for Legros for each of 2021, 2022, and 2023. Round answers to one decimal place.b. Using horizontal analysis, calculate the
The income statements of Dwayne Corporation show the following amounts:Using vertical (common-size) analysis, analyze Dwayne’s declining profit before tax. Round answers to zero decimal places. Net sales Cost of goods sold Gross profit Selling, general, and administrative expenses Profit before
Robbins Ltd. is a wholesale distributor of professional equipment and supplies. The company’s sales have averaged about $900,000 annually for the three-year period from 2021 to 2023. The firm’s total assets at the end of 2020 amounted to $850,000. The president of Robbins has asked the
Tonoma Inc., a company that follows IFRS, is preparing its December 31, 2023 financial statements. The following two events occurred after December 31, 2023: (1) A flood loss of $80,000 occurred on March 1, 2024. (2) A liability, estimated and accrued at $140,000 at December 31, 2023, was
The following are quarter-end balances of Current Assets and Current Liabilities for Abel Inc.(a) In Excel, use a pivot table and insert a calculated field to calculate the current ratio.(b) Visualize the current ratio trend using a line graph by quarter and by year. Year
Two independent situations follow:1. On January 1, 2023, Divac Limited issued $300,000 of 10-year, 9% bonds at par. Interest is payable quarterly on April 1, July 1, October 1, and January 1.2. On June 1, 2023, Verbitsky Inc. issued at par, plus accrued interest, $200,000 of 10-year, 12% bonds
Access the financial statements for Loblaw Companies Limited for the year ended January 2, 2021, and for Empire Company Limited for the year ended May 2, 2020, through SEDAR (www.sedar.com) and then answer the following questions.Instructionsa. Calculate the debt to total assets ratio and the times
Access the financial statements of Air Canada for the year ended December 31, 2020, through SEDAR (www.sedar.com) or the company’s website. Review the financial statements, including the notes, and then answer the following questions.Instructionsa. Calculate the 2020 and 2019 debt to equity
Lamanna Laundry Ltd. is a full-service laundry provider, focusing on high-end clientele. Lamanna Laundry has recently invested in new technology to improve efficiency. To finance the new technology, the company issued a 10-year bond on January 1, 2023. On issuance, the bonds were assigned a BBB
At December 31, 2022, Shutdown Manufacturing Limited had outstanding a $300,000, 12% note payable to Thornton National Bank. Dated January 1, 2020, the note was issued at par and due on December 31, 2023, with interest payable each December 31. During 2023, Shutdown notified Thornton that it might
Brestovacki Corporation issued a $50,000, five-year, 5% note to Jernigan Corp. on January 1, 2023, and received a piece of equipment that normally sells for $38,912. The note requires annual interest payments each December 31. The market interest rate for a note of similar risk is 11%. (a)
On December 31, 2023, Green Bank enters into a debt restructuring agreement with Troubled Inc., which is now experiencing financial trouble. The bank agrees to restructure a $2-million, 12% note receivable issued at par by the following modifications:1. Reducing the principal obligation from $2
Gaming Inc. issued a debenture bond to Karamoutz Bank to finance new technology it developed. The debenture was for $500,000, issued at face value, with a 10-year term and interest payable at 10%. Gaming’s new technology proved not to be technically feasible and caused it to go into financial
On April 1, 2023, Taylor Corp. sold 12,000 of its $1,000 face value, 15-year, 11% bonds at 97. Interest payment dates are April 1 and October 1. The company follows ASPE and uses the straight-line method of bond discount amortization. On March 1, 2024, Taylor extinguished 3,000 of the bonds by
Desrocher Ltd. issued an instalment note on January 1, 2023 (with a required yield of 9%) in exchange for land that it purchased from Safayeni Ltd. Safayeni’s real estate agent had listed the land on the market for $120,000. The note calls for three equal blended payments of $43,456 that are to
On June 30, 2023, Mosca Limited issued $4 million of 20-year, 13% bonds for $4,300,920, which provides a yield of 12%. The company uses the effective interest method to amortize any bond premium or discount. The bonds pay semi-annual interest on June 30 and December 31.Instructionsa. Prepare the
On January 1, 2023, Osborn Inc. sold 12% bonds having a maturity value of $800,000 for $860,652, which provides the bondholders with a 10% yield. The bonds are dated January 1, 2023, and mature on January 1, 2028, with interest payable on January 1 of each year. The company follows IFRS and uses
Four independent situations follow.1. Wen Corporation incurred the following costs when it issued bonds: printing and engraving costs, $25,000; legal fees, $69,000; and commissions paid to underwriter, $70,000.2. Griffith Inc. sold $3 million of 10-year, 10% bonds at 104 on January 1, 2023. The
On January 1, 2023, Quinton Corporation issued $600,000 of 7% bonds that are due in 10 years. The bonds were issued for $559,229 and pay interest each July 1 and January 1. The company uses the effective interest method. Assume an effective rate of 8%.(a) Prepare the company’s journal entry for
Collins Corporation bought a computer on December 31, 2023, paying $30,000 down with a further $75,000 payment due on December 31, 2026. An interest rate of 10% is implicit in the purchase price. Collins uses the effective interest method and has a December 31 year end. Collins prepares financial
Mazza Corp. owes Tsang Corp. a $110,000, 10-year, 10% note issued at par plus $11,000 of accrued interest. The note is due today, December 31, 2023. Because Mazza is in financial trouble, Tsang agrees to forgive the accrued interest and $10,000 of the principal and to extend the maturity date to
Grenier Limited issued $300,000 of 10% bonds on January 1, 2023. The bonds are due on January 1, 2028, with interest payable each July 1 and January 1. The bonds are issued at face value. Grenier uses the effective interest method. Prepare the company’s journal entries for(a) The January
Watson Corporation issued $500,000 of 8%, 10-year bonds on January 1, 2023, at face value. The bonds require annual interest payments each December 31. Costs associated with the bond issuance were $25,000. Watson follows ASPE and uses the straight-line method to amortize bond issue costs. Prepare
The City of Fram issued 100 bonds at their face value of $6,000 each plus accrued interest on June 1, 2023. The term of the bonds was January 1, 2023, to January 1, 2029, with interest payable semi-annually each January 1 and July 1 at 6%. Fram uses the effective interest method. Prepare journal
Minor Inc. sells 10% bonds having a maturity value of $3 million for $2,783,713. The bonds are dated January 1, 2023, and mature on January 1, 2028. Interest is payable annually on January 1.Instructionsa. Set up a schedule of interest expense and discount amortization under the effective interest
Cinderella Shoes Inc., a private company following ASPE, is having difficulty meeting its working capital requirements. As a result, on January 1, 2023, the company sold bonds with a face value of $1 million, receiving $800,000 in cash. The bonds have an interest rate of 8% and mature on January 1,
On December 31, 2022, Mohr Inc. borrowed $81,241 from Par Bank, signing a $125,000, five-year, non–interest-bearing note. The note was issued to yield 9% interest. Unfortunately, during 2023 Mohr began to experience financial difficulty. This was determined to be a significant increase in risk,
Travel In Style Limited issued $1,000,000 of 9% bonds on September 1, 2023, for $1,058,671. The term of the bonds is September 1, 2023, to September 1, 2031, with interest payable quarterly each December 1, March 1, June 1, and September 1. The company uses the effective interest method with an
On January 2, 2018, Kowalchuk Corporation, a small company that follows ASPE, issued $1.5 million of 10% bonds at 97 due on December 31, 2027. Legal and other costs of $110,000 were incurred in connection with the issue. Kowalchuk has a policy of capitalizing and amortizing the legal and other
Hanson Incorporated issued $1 million of 7%, 10-year bonds on July 1, 2022, at face value. Interest is payable each December 31. The company has chosen to apply the fair value option in accounting for the bonds. A risk assessment at December 31, 2023, shows that Hanson’s credit risk has
On June 30, 2016, Auburn Limited issued 12% bonds with a par value of $800,000 due in 20 years. They were issued at 98 and were callable at 104 at any date after June 30, 2023. Because of lower interest rates and a significant change in the company’s credit rating, it was decided to call the
You are a senior analyst at Canada Wheels Corp. You have been given the information below and have been asked to do the following by your manager:(a) Calculate the debt to total assets ratio from 2023 to 2027. (b) Prepare a visualization in Excel using a combination of line graphs and bar graphs,
Friedman Corporation had bonds outstanding with a maturity value of $500,000. On April 30, 2023, when these bonds had an unamortized discount of $10,000, they were called in at 104. To pay for these bonds, Friedman had issued other bonds a month earlier bearing a lower interest rate. The newly
On January 1, 2023, Jamil Incorporated redeemed bonds prior to their maturity date of January 1, 2024. The face value of the bonds was $800,000, and the redemption was performed at 97. As at the redemption date, the unamortized premium was $6,500. Prepare the corporation’s journal entry to record
Vargo Limited owes $270,000 to First Trust Inc. on a 10-year, 12% note due on December 31, 2023. The note was issued at par. Because Vargo is in financial trouble, First Trust agrees to extend the maturity date to December 31, 2025, reduce the principal to $220,000, and reduce the interest rate to
Ambrosia Limited has the following balances as at December 31, 2023: accounts payable and accrued liabilities $20,000, wages payable $15,000, bonus payable (due September 30, 2025) $15,000, and bonds payable of $140,000 due September 30, 2026 (current portion of $30,000). Prepare the liabilities
Lawrence Incorporated owes $100,000 to Ontario Bank Inc. on a two-year, 10% note due on December 31, 2023. The note was issued at par. Because Lawrence is in financial trouble, Ontario Bank agrees to extend the maturity date of the note to December 31, 2025, reduce the principal to $75,000, and
At December 31, 2023, Jelena Incorporated has a bond payable due September 1, 2024, with a carrying value of $1,200,000 (based on amortized cost) and a current value of $1,250,000. The interest payable as at December 31, 2023, is $25,000. Show how the above amounts should be presented on the
Sports International had total debt of $500,000 and $750,000 as at December 31, 2023, and December 31, 2022, respectively, of which $100,000 and $150,000 was current. In addition, the company had total assets of $900,000 and $700,000 as at December 31, 2023, and December 31, 2022, respectively, of
On January 1, 2023, Steinem Corporation established a special purpose entity to buy $1 million of accounts receivable from Steinem. Investors have invested in the special purpose entity to benefit from the return on assets and certain tax advantages. The special purpose entity hasused the cash
Yang Inc. was organized on January 1, 2023. It is authorized to issue an unlimited number of common shares and 100,000 preferred shares with a $4 dividend. The following share transactions were completed during the first year:Jan. 10 Issued 200,000 common shares for cash at $23 per share.Mar. 1
As climate change continues to affect our environment, we have seen increasing incidence of wildfires, flooding, and hurricanes. Financial instruments such as catastrophe bonds have also emerged. Explain what a catastrophe bond is and how it helps companies manage risk.
Foreman Inc. issued $800,000 of 10%, 20-year bonds on January 1, 2023, at 102. Interest is payable semi-annually on July 1 and January 1. Foreman uses the effective interest method of amortization for any bond premium or discount. Assume an effective yield of 9.75%. (With a market rate of 9.75%,
The following are various accounts:1. Bank loans payable of a winery, due March 10, 2027 (the product requires aging for five years before it can be sold)2. $10 million of serial bonds payable, of which $2 million is due each July 313. Amounts withheld from employees’ wages for income tax4. Notes
Samwall Ltd. needed funding to bridge the gap between paying its suppliers and collecting its receivables. As such, Samwall issued a $300,000, four-year, 8% note at face value to Easy Loan Bank on January 1, 2023, and received $300,000 cash. The note requires annual interest payments each December
Foreman Inc. issued $800,000 of 20-year, 10% bonds on January 1, 2023, at 102. Interest is payable semi-annually on July 1 and January 1. The company follows ASPE and uses the straight-line method of amortization for any bond premium or discount.Instructionsa. Prepare the journal entries to record
On January 1, 2023, Landlord Corporation acquired the following properties:1. Investment property consisting of land and an apartment building in Toronto for $1.5 million. To finance this transaction, Landlord issued a five-year interest-free promissory note to repay $2,307,941 on January 1,
Sophia Incorporated issued a $105,000, five-year, zero interest-bearing note to Angelica Corp. on January 1, 2023, and received $52,000 cash. Sophia uses the effective interest method. (a) Using (1) a financial calculator or (2) Excel function Rate, calculate the implicit interest rate. Round
Two independent situations follow.1. On January 1, 2023, Spartan Inc. bought land that had an assessed value of $390,000 at the time of purchase. A $600,000, non–interest-bearing note due on January 1, 2026, was given in exchange. There was no established exchange price for the land and no ready
Bian Inc. financed the purchase of equipment costing $85,000 on January 1, 2023, using a note payable. The note requires Bian to make annual $23,971 payments of blended interest and principal on January 1 of the following four years, beginning January 1, 2024. The note bears interest at the rate of
Mustafa Limited began operations on January 2, 2022. Mustafa employs nine individuals who work eight-hour days and are paid hourly. Each employee earns 10 paid vacation days and 6 paid sick days annually. Vacation days may be taken after January 15 of the year following the year in which they are
Diagnostics Corp. follows IFRS and sells its products in expensive, reusable containers that can be tracked. The customer is charged a deposit for each container that is delivered and receives a refund for each container that is returned within two years after the year of delivery. When a container
ABC Airlines carried more than 11.9 million passengers to over 160 destinations in 17 countries in 2022. ABC is the descendant of several predecessor companies, including AB Air and BC Airlines. The amalgamated company was created in 2005. In the years that followed, the world air travel industry
Smythe Corporation sells televisions at an average price of $850. The televisions come with a standard one-year warranty. Ignore any cost of goods sold. Smythe also offers each customer a separate three-year extended warranty contract for $90 that requires the company to perform periodic services
Brooks Inc. sells portable computer equipment with a two-year warranty contract that requires the corporation to replace defective parts and provide the necessary repair labour. During 2023, the corporation sells for cash 400 computers at a unit price of $2,500. Ignore any cost of goods sold. Based
The following are selected 2023 transactions of Darby Corporation.Sept. 1 Purchased inventory from Orion Ltd. on account for $50,000. Darby uses a periodic inventory system.Oct. 1 Issued a $50,000, 12-month, 8% note to Orion in payment of Darby’s account.1 Borrowed $75,000 from the bank by
Takemoto Inc. borrowed $60,000 on November 1, 2023, by signing a $61,350, three-month, zero-interest-bearing note(a) Using a financial calculator or Excel, calculate the effective interest charged on the note.(b) Prepare Takemoto’s November 1, 2023 entry; the December 31, 2023 annual adjusting
You are a recent MBA graduate with a specialty in data analytics. This has led to an excellent new career, as it complements your undergraduate business degree and CPA designation. Your new position uses predictive analytics to estimate Compton Canada Corporation’s (CCC’s) warranty costs for
The payroll of Sumerlus Corp. for September 2023 is as follows. Total payroll was $485,000. Pensionable (CPP) and insurable (EI) earnings were $365,000. Income taxes in the amount of $85,000 were withheld, as were $8,000 in union dues. The EI rate was 1.58% for employees and 2.212% for employers,
Shaddick Corp., a public company following IFRS, began its 2023 fiscal year with a debit balance of $11,250 in its Income Tax Receivable account. During the year, Shaddick made quarterly income tax instalment payments of $8,100 each. In early June, a cheque was received from the Receiver General
Upland Limited borrowed $40,000 on November 1, 2023, by signing a $40,000, three-month, 9% note. Prepare Upland’s November 1, 2023 entry; the December 31, 2023 annual adjusting entry; and the February 1, 2024 entry. Round amounts to the nearest dollar.
To increase the sales of its Sugar Kids breakfast cereal, KW Foods Limited (KW) places one coupon in each cereal box. Five coupons are redeemable for a premium consisting of a child’s hand puppet. In 2023, KW purchases 40,000 puppets at $1.50 each and sells 480,000 boxes of Sugar Kids at $3.75 a
Refer to the information for Upland Limited in BE13.4. Assume that Upland uses reversing entries. Prepare the 2024 journal entry(ies) for Upland.BE13.4Upland Limited borrowed $40,000 on November 1, 2023, by signing a $40,000, three-month, 9% note. Prepare Upland’s November 1, 2023 entry; the
The Hwang Candy Corporation (HCC) offers a mini piggy bank as a premium for every five chocolate bar wrappers that customers send in along with $2.00. The chocolate bars are sold by HCC to distributors for $0.30 each. Ignore any cost of goods sold. The purchase price of each piggy bank to HCC is
On December 31, 2023, Hornsby Corporation had $1.2 million of short-term debt in the form of notes payable due on February 2, 2024. On January 21, 2024, to ensure that it had sufficient funds to pay for the short-term debt when it matured, Hornsby issued 25,000 common shares for $38 per share,
On December 31, 2023, Zimmer Corporation has $7.9 million of short-term debt in the form of notes payable that are due in 2024 to Provincial Bank. On January 28, 2024, Zimmer enters into a refinancing agreement with the bank that permits it to refinance its debt by up to 60% of the gross amount of
Goldwing Corporation offers enriched parental benefits to its staff. While the government provides compensation based on Employment Insurance legislation for a period of 12 months, Goldwing increases the amounts received and extends the period of compensation. The benefit program tops up the amount
Mullen Music Limited (MML) carries a wide variety of musical instruments, sound reproduction equipment, recorded music, and sheet music. MML uses two sales promotion techniques—warranties and premiums—to attract customers.Musical instruments and sound equipment are sold with a one-year warranty
Refer to the information about Clausius Ltd. in BE13.11. Assume instead that the tax return indicated 2023 income tax of $10,200.(a) Prepare the adjusting year-end entry to recognize the 2023 income tax.(b) Identify any year-end SFP amount that is related to income tax and indicate how it should be
On January 1, 2023, Schmitt Inc.’s general ledger had these liability accounts:In addition, Schmitt had a balance in HST Receivable of $4,260 at January 1, 2023. Schmitt uses a periodic inventory system, operates in the province of Ontario where HST is 13%, and follows ASPE. Schmitt’s required
Clausius Ltd. made four quarterly payments of $3,200 each to the Receiver General for Canada during 2023 as instalment payments on its estimated 2023 corporate tax liability. At year end, Clausius’s controller completed the company’s 2023 tax return, which showed income tax owing of $20,000 on
Hamilton Airlines is faced with two situations that need to be resolved before the financial statements for the company’s year ended December 31, 2023, can be issued. 1. The airline is being sued for $4 million for an injury caused to a child as a result of alleged negligence while the child
On May 1, 2023, Green Machine Inc. entered into a contract to deliver one of its specialty mowers to Schroeter Landscaping Co. The contract requires Schroeter to pay the contract price of $3,200 in advance on May 15, 2023. Schroeter pays Green Machine on May 15, 2023, and Green Machine delivers the
Selzer Equipment Limited sold 500 Rollomatics on account during 2023 for $6,000 each. Ignore any cost of goods sold. During 2023, Selzer spent $30,000 servicing the two-year warranties that are included in each sale of the Rollomatic.All servicing transactions were paid in cash.Instructionsa.
At December 31, 2023, Parew Corporation has a long-term debt of $700,000 owing to its bank. The existing debt agreement imposes several covenants related to Parew’s liquidity and solvency. At December 31, 2023, Parew was not in compliance with the covenants related to its current ratio and debt
Dungannon Enterprises Ltd. sells a specialty part that is used in widescreen televisions and provides the ultimate in screen clarity. To promote sales of its product, Dungannon launched a program with some of its smaller customers. In exchange for making Dungannon their exclusive supplier,
At December 31, 2023, Burr Corporation owes $500,000 on a note payable due February 15, 2024. Assume that Burr follows IFRS and that the financial statements are completed and released on February 20, 2024.(a) If Burr refinances the obligation by issuing a long-term note on February 14 and by using
Cléroux Corporation sold 150 colour laser copiers in 2023 for $4,000 each, including a one-year warranty. Maintenance on each machine during the warranty period averages $300.Instructionsa. Prepare entries to record the machine sales and the related warranty costs under the expense approach.
At December 31, 2023, 30 employees of Kasten Inc. have each earned one week of vacation time. The employees’ average salary is $1,000 per week. Prepare Kasten’s December 31, 2023 adjusting entry.
Laurin Corporation offers parental benefits to its staff as a top-up to EI benefits so that employees end up receiving 100% of their salary for a maximum of 12 months of parental leave. Ruzbeh Awad, who earns $74,000 per year, announced that he will be taking parental leave for a period of 17 weeks
To increase sales, Bélanger Inc., a public company following IFRS, implemented a customer loyalty program that rewards a customer with one loyalty point for every $10 of purchases on a select group of products. Each point is redeemable for a $1 discount on any purchases of Bélanger merchandise in
Primeau Inc. pays its officers bonuses based on income. For 2023, the bonuses total $350,000 and are paid on February 15, 2024. Prepare Primeau’s December 31, 2023 adjusting entry and the February 15, 2024 entry. For the payment entry, ignore withholding taxes, CPP, and EI.
Novack Machinery Co. manufactures equipment to a very high standard of quality; however, it must still provide a warranty for each unit sold, and there are instances where the machines do require repair after they have been put into use. Novack started in business in 2023, and as the controller,
Moleski Limited, a private company following ASPE, includes one coupon in each box of soap powder that it produces, and 10 coupons are redeemable for a premium (a kitchen utensil). In 2023, Moleski purchased 8,800 premiums at $0.90 each and sold 120,000 boxes of soap powder at $3.30 per box. In
Sport Pro Magazine sold 12,000 annual subscriptions on August 1, 2023, for $18 each. Prepare Sport Pro’s August 1, 2023 journal entry and the December 31, 2023 annual adjusting entry, assuming the magazines are published and delivered monthly.
Situation 1: Marquart Stamp Corporation records stamp service revenue and provides for the cost of redemptions in the year stamps are sold to licensees. The stamps can be collected and then redeemed for discounts on future purchases from Marquart as an incentive for repeat business. Marquart’s
Kawani Corporation has been operating for several years. On December 31, 2023, it presented the following SFP.Cost of goods sold in 2023 was $420,000, operating expenses were $51,000, and net income was $27,000. Accounts payable suppliers provided operating goods and services. Assume that total
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