The controller of Ivanhoe Yard Company is applying the lower-of-cost-or-net realizable value basis of valuing its...
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The controller of Ivanhoe Yard Company is applying the lower-of-cost-or-net realizable value basis of valuing its ending inventory. Th following information is available: Net Realizable Cost Value Lawnmowers: Self-propelled $18,200 $18,360 Push type 21,060 19,440 Total 39,260 37,800 Snowblowers: Manual 32,240 32,400 Self-start 21,220 22,680 Total 53,460 55,080 Total inventory $92,720 $92,880 Compute the value of the ending inventory by applying the lower-of-cost-or-net realizable value basis. Determine the missing amounts. Sales revenue Sales returns and allowances Net sales Crane Cosmetics $95,500 $ (a) 85,700 Cost of goods sold 55,700 Gross profit Operating expenses 16,000 Income from operations Other expenses and losses 3,600 Net income Blue Grocery 5,410 98,700 (b) 38,800 (c) 7,200 (e) (f) Larkspur Wholesaler $130,400 13,100 26,000 (B) 18,900 (h) (d) 12,500 5,100 Compute Bramble Company's adjusted cash balance per books based on the following information: Beginning cash balance per books $4,230 Deposit in transit 930 Check printing charge 35 Note collected by bank for Bramble 1,630 Adjusted cash balance per books LA $ Whispering Winds Harvest Company sells a product that includes a one-year warranty on parts and labor. During the year, 11,200 units are sold. Whispering Winds Harvest expects that 3% of the units will be defective and that the average warranty cost will be $50 per unit. Actual warranty costs incurred during the year were $15,680. Prepare the journal entries to record (a) the estimated warranty costs and (b) the actual costs incurred. (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 O for the amounts. List all debit entries before credit entries.) (a) Account Titles and Explanation Debit Credit (b) On January 1, 2022, Ivanhoe Inc. entered into an agreement to lease 20 computers from Drummond Electronics. The terms of the lease agreement require three annual rental payments of $35,000 (including 10% interest) beginning December 31, 2022. The present value of the three rental payments is $87,038. Ivanhoe considers this a finance lease. Prepare the journal entry to record the lease agreement on the books of Ivanhoe Inc. on January 1, 2022. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Jan. 1 Blossom Health is considering two alternatives for the financing of some high technology medical equipment. These two alternatives are: 1. Issue 65,000 shares of $10 par value common stock at $50 per share. 2. Issue $3,250,000, 7%, 10-year bonds at par. It is estimated that the company will earn $950,000 before interest and taxes as a result of acquiring the medical equipment. The company has an estimated tax rate of 40% and has 85,000 shares of common stock outstanding prior to the new financing. Determine the effect on net income and earnings per share for these two methods of financing. (Round earnings per share to 2 decimal places, e.g. 2.25.) Net income Earnings per share $ Issue Stock $ $ Issue Bonds Wildhorse Company buys merchandise on account from Novak Company. The selling price of the goods is $1,330, and the cost of the goods is $980. Both companies use perpetual inventory systems. Journalize the transaction on the books of both companies. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Wildhorse Company (To record credit purchase of inventory) Novak Company (To record credit sale) (To record cost of merchandise sold) Debit Credit The controller of Ivanhoe Yard Company is applying the lower-of-cost-or-net realizable value basis of valuing its ending inventory. Th following information is available: Net Realizable Cost Value Lawnmowers: Self-propelled $18,200 $18,360 Push type 21,060 19,440 Total 39,260 37,800 Snowblowers: Manual 32,240 32,400 Self-start 21,220 22,680 Total 53,460 55,080 Total inventory $92,720 $92,880 Compute the value of the ending inventory by applying the lower-of-cost-or-net realizable value basis. Determine the missing amounts. Sales revenue Sales returns and allowances Net sales Crane Cosmetics $95,500 $ (a) 85,700 Cost of goods sold 55,700 Gross profit Operating expenses 16,000 Income from operations Other expenses and losses 3,600 Net income Blue Grocery 5,410 98,700 (b) 38,800 (c) 7,200 (e) (f) Larkspur Wholesaler $130,400 13,100 26,000 (B) 18,900 (h) (d) 12,500 5,100 Compute Bramble Company's adjusted cash balance per books based on the following information: Beginning cash balance per books $4,230 Deposit in transit 930 Check printing charge 35 Note collected by bank for Bramble 1,630 Adjusted cash balance per books LA $ Whispering Winds Harvest Company sells a product that includes a one-year warranty on parts and labor. During the year, 11,200 units are sold. Whispering Winds Harvest expects that 3% of the units will be defective and that the average warranty cost will be $50 per unit. Actual warranty costs incurred during the year were $15,680. Prepare the journal entries to record (a) the estimated warranty costs and (b) the actual costs incurred. (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 O for the amounts. List all debit entries before credit entries.) (a) Account Titles and Explanation Debit Credit (b) On January 1, 2022, Ivanhoe Inc. entered into an agreement to lease 20 computers from Drummond Electronics. The terms of the lease agreement require three annual rental payments of $35,000 (including 10% interest) beginning December 31, 2022. The present value of the three rental payments is $87,038. Ivanhoe considers this a finance lease. Prepare the journal entry to record the lease agreement on the books of Ivanhoe Inc. on January 1, 2022. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Jan. 1 Blossom Health is considering two alternatives for the financing of some high technology medical equipment. These two alternatives are: 1. Issue 65,000 shares of $10 par value common stock at $50 per share. 2. Issue $3,250,000, 7%, 10-year bonds at par. It is estimated that the company will earn $950,000 before interest and taxes as a result of acquiring the medical equipment. The company has an estimated tax rate of 40% and has 85,000 shares of common stock outstanding prior to the new financing. Determine the effect on net income and earnings per share for these two methods of financing. (Round earnings per share to 2 decimal places, e.g. 2.25.) Net income Earnings per share $ Issue Stock $ $ Issue Bonds Wildhorse Company buys merchandise on account from Novak Company. The selling price of the goods is $1,330, and the cost of the goods is $980. Both companies use perpetual inventory systems. Journalize the transaction on the books of both companies. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Wildhorse Company (To record credit purchase of inventory) Novak Company (To record credit sale) (To record cost of merchandise sold) Debit Credit
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Related Book For
Fundamentals of Financial Accounting
ISBN: 978-1259103292
4th Canadian edition
Authors: Fred Phillips, Robert Libby, Patricia Libby, Brandy Mackintosh
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