ACC 309 Final Project Student Workbook
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Southern New Hampshire University *
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Course
309
Subject
Accounting
Date
Jun 7, 2024
Type
xlsx
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37
Uploaded by AmbassadorAardvark805
Southern New Hampshire University
ACC309 - Intermediate Accounting III
1.
1.
1.
Prepare adjusting entries for:
Unrealized loss
tax issues
2
Calculate pension payouts
2
3
3
Prepare adjusting entries for:
Capital leases
Pension payouts
4
MILESTONE 1 (Due in Module 3)
MILESTONE 2 (Due in Module 5)
F
Calculate capital lease obligations
See rubric for written portion of Milestone 1.
See rubric for written portion of Milestone 2.
Adjusting entries
Adjusting entries
Capital Leases
Capital Leases
Instructions Milestone 1
Instructions Milestone 1
Instructions Milestone 2
Instructions Milestone 2
Pensions
Pensions
Adjusting entries
Adjusting entries
Prepare adjusting entries for:
Patent Major repair capitalization
Complete adjusted trial balance
FINAL PROJECT (Due in Module 7)
Prepare revised financial statements
Prepare a statement of comprehensive income - include on the revised income statement
Determine the impact of expansion options on earnings per share
See rubric for written portion of the final project.
Adjusting Entries
Adjusting Entries
Instructions Final Project
Instructions Final Project
Adjusted Trial Balance
Adjusted Trial Balance
Statements
Revised Financial Statements
Earnings per Share
Earnings per Share
Southern New Hampshire University
ACC309 - Intermediate Accounting III
IMPORTANT NOTE:
Use the data from this Milestone and begin working on your final presentation due in Week 7
ITEMS TO COMPLETE FOR THIS MILESTONE:
GENERAL
In preparation of the annual audit, prepare appropriate adjusting entries and post to the trial balan
ADJUSTING ENTRIES
Prepare adjusting entries for unrealized loss
Prepare adjusting entries for tax issues
FINANCIAL INFORMATION FOR THIS MILESTONE
Comprehensive income items
INSTRUCTIONS FOR MILESTONE 1 (Due Week 3)
Make sure to completely review
the Rubric for Milestone 1
MANAGEMENT BRIEF - Prepare i
n a Word document - see the rubric for milestone 1
A.
Identify sources of other comprehensive income
not included in net income. B.
Explain
rationale for
the inclusion as comprehensive income
(as opposed to net income) of nondisclo
C.
Evaluate impacts of company goals and finances for their implications on stockholder equity
, using fin
D.
Evaluate impacts of company goals and finances for their implications on retained earnings per share
E.
Explain the impact of issuing preferred stock or debt for determining changes to equity structures. F.
Assess the impact of changes to current tax structure
for articulating changes relevant to the compan
·
Marketable securities on the balance sheet at a cost of $5,500,000 are available-for-sale
·
Market value at the balance sheet date is $5,235,00
·
Prepare the adjusting entry to record the unrealized loss and include in comprehensive incom
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Tax information and implications Potentially Dilutive Securities
The company is adding two storefront locations and launching a new marketing campaign
·
$1,500 in meal and entertainment expenses show as a permanent difference for tax. This ite
·
The company uses straight line depreciation for book and MACRS depreciation for the tax retu
·
MACRS depreciation was $209,301 higher than book. The tax associated with book dep
·
There have been recent tax structure changes the could impact the company.
Peyton Approved has bee
pretax income (20% Federal, 5%
Peyton has the following potential dilutive securities:
$4,000,000 in bonds payable 10%, 20 year. Every $1,000 bond can convert to 5 sh
Preferred Stock. Every share issued can convert to 1 share of common stock.
Expansion
Plans
1)
Issuing an additional $1,000,000 of 10%, 100-par convertible preferred stock (same class as is currently
2)
Issue an additional $1,000,000 of 8% convertible bonds (same terms as the existing issue) 3)
$500,000 each of preferred stock and bonds
nce workbook (red tab)
osure within notes. nancial information to support claims. e
, using financial information to support claims. ny. me
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n, which is estimated to bring in 20,000 new customers over the next six months. The co
em was not previously included in the income tax calculation. Prepare the necessary adjusting e
urn
preciation was previously recorded to income tax expense and current income tax payabl
en a C Corp since the beginning of these changes. Peyton provides for taxes at 25% of % state).
hares of common stock.
y outstanding)
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ompany expects this expansion will require an additional $1,000,000 of capital and genera
entry.
le. Prepare the adjusting entry for the deferred tax.
ate an additional $600,000 of after-tax profit. The financing options are:
PEYTON APPROVED
TRIAL BALANCE
As of December 31, 2017
Dr Cr Cash
1,488,999.34 Marketable Securities
5,500,000.00 Accounts Receivable
7,092,495.88 Baking Supplies
1,605,098.52 Merchandise Inventory
128,152.63 Prepaid Rent
71,877.07 Prepaid Insurance
207,834.14 Misc. Supplies
17,647.42 Land
250,000.00 Building
1,250,000.00 Baking Equipment
2,254,140.00 Accumulated Depreciation
328,282.00 Patent
Accounts Payable
1,555,212.85 Wages Payable
250,203.31 Interest Payable
21,888.22 Current Portion of Bonds Payable
1,000,000.00 Income Taxes Currently Payable
1,042,118.16 Accrued Pension Liability
Accrued Employees Health Insurance
Lease Liability
Deferred Tax Liability
Bonds Payable
4,000,000.00 Preferred Stock
500,000.00 Common Stock
1,750,000.00 Beginning Retained earnings
2,213,122.59 Dividends - Preferred
50,000.00 Dividends - Common
5,250,000.00 Bakery Sales
33,881,157.15 Merchandise Sales
124,795.80 Cost of Goods Sold - Baked
10,954,907.36 Cost of Goods Sold - Mercha 88,994.79 Rent Expense
1,576,731.95 Wages Expense
2,604,526.23 Misc. Supplies Expense
263,224.56 Repairs and Maintenance
47,353.05 Business License Expense
211,757.65
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Misc. Expense
141,171.08 Depreciation Expense
634,520.00 Insurance Expense
112,937.69 Advertising Expense
160,413.49 Interest Expense
484,703.27 Telephone Expense
50,821.34 Pension Expense
Retired Employees Health Ins.
Patent Amortization
Unrealized Gain/(Loss) on Marketable Securities Held for Sale
Income Taxes
4,168,472.62 Deferred Tax Expense
46,666,780.08 46,666,780.08 (1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
Adjusting entries Dr Cr Dr Cr 1,488,999.34 265,000.00 5,235,000.00 7,092,495.88 1,605,098.52 128,152.63 71,877.07 207,834.14 17,647.42 250,000.00 1,250,000.00 106,589.40 2,387,729.40 27,000.00 328,282.00 50,000.00 2,500.00 47,500.00 1,555,212.85 250,203.31 21,888.22 1,000,000.00 375.00 1,042,493.16 107,041.70 107,041.70 43,718.91 43,718.91 106,589.40 106,589.40 - 52,325.25 52,325.25 4,000,000.00 500,000.00 1,750,000.00 2,213,122.59 50,000.00 5,250,000.00 33,881,157.15 124,795.80 10,954,907.36 88,994.79 20,000.00 1,556,731.95 2,604,526.23 263,224.56 27,000.00 20,353.05 211,757.65
50,000.00 91,171.08 20,000.00 654,520.00 112,937.69 160,413.49 484,703.27 50,821.34 107,041.70 107,041.70 43,718.91 43,718.91 2,500.00 2,500.00 - 265,000.00 265,000.00 - 375.00 4,168,847.62 52,325.25 52,325.25 674,550.26 674,550.26 46,976,830.34 46,976,830.34 To record an unrealized loss on marketable securities of $265,000 milestone 1 To adjust income taxes to correct the effective rate for $375 milestone 1 To record deferred taxes for the difference between book & MACRS milestone 1 depreciation for $52,325.25 To record pension expense & liability for $107,041.70 milestone 2 To record health insurance expense & liability for $43,718.91 milestone 2 To record a leased asset & the liability for $106,589.40 milestone 2 To capitalize the repair of the packing machine for $27,000 final To record the cost of a patent & expenses final Cost of the patent - $50,000 Patent amortization - $2,500
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Southern New Hampshire University
ACC309 - Intermediate Accounting III
IMPORTANT NOTE:
Use the data from this Milestone and begin working on your final presentation due in Week 7
ITEMS TO COMPLETE FOR THIS MILESTONE:
GENERAL
CAPITAL LEASES
Calculate capital lease obligations
Prepare appropriate adjusting entries
PENSION PAYOUTS
Calculate pension liability
Calculate health insurance liability
ADJUSTING ENTRIES
Prepare adjusting entries for capital lease obligations
Prepare adjusting entries for pension payouts
INSTRUCTIONS FOR MILESTONE 2 (Due Week 5)
Make sure to completely review
the Rubric for Milestone 2
In preparation of the annual audit, make calculations (green tab) and prepare appropriate adjusting entri
workbook (red tab)
MANAGEMENT BRIEF - Prepare i
n a Word document - see the rubric for milestone 2
A.
Explain the implications of capital lease
based on how it relates to the company’s equipment usage. B.
Explain how postretirement plans will impact the company financially in the short and long term, usin
accounting workbook to support claims.
FINANCIAL INFORMATION FOR THIS MILESTONE
Postretirement Benefits Leases
Peyton Approved has revised its postretirement plan. It will now provide health insurance to retired employ
requested that you report the short- and long-term financial implications of this. ·
The company is currently employing 60, and actuaries estimate that the company has a pensio
·
The estimated cost of retired employees’ health insurance is $43,718.91. ·
Prepare adjusting entries for the pension liability and the health insurance liability
·
Six ovens were rented on December 31, with $20,000 charged to rent expense. The lease runs interest rate of 5%. At the end of the 6 years, Peyton will own them. Make any necessary adjustin
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ies and post to the trial balance ng examples from the HOME
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yees. Management has on liability of $107,041.70. for 6 years with an implicit ng entries.
Capital Leases
Annual cost
$20,000 Total Years
6
Year
Lease Payment
Discount Rate Present Value Interest Payment 1
$ 20,000.00 $ 20,000.00 2
$ 20,000.00 0.95 $ 19,047.60 952.40 3
$ 20,000.00 0.90703 $ 18,140.60 1849.4
4
$ 20,000.00 0.86384 $ 17,276.80 2723.2
5
$ 20,000.00 0.8227 $ 16,454.00 3,546.00 6
$ 20,000.00 0.78353 $ 15,670.60 4,329.40 $ 106,589.60 13,400.40 Pension payouts
·
The company is currently employing 60, and actuaries estimate that the co
·
The estimated cost of retired employees’ health insurance is $43,718.91.
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ompany has a pension liability of $107,041.70. HOME
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Southern New Hampshire University
ACC309 - Intermediate Accounting III
IMPORTANT NOTE:
This page contains new information the must be included in the final project but has not been in milesto
ITEMS TO COMPLETE FOR THIS MILESTONE:
GENERAL
ADJUSTING ENTRIES
Prepare appropriate adjusting entries for patent
Prepare appropriate adjusting entries for capitalization of machine repair
ADJUSTED TRIAL BALANCE
Prepare the adjusted trial balance
REVISED FINANCIAL STATEMENTS
Prepare a revised income statement - include comprehensive income
Prepare a revised retained earnings statement
Prepare a revised balance sheet
EARNINGS PER SHARE
Determine the impact on earnings per share caused by each expansion plan option
INSTRUCTIONS FOR FINAL (Due Week 7)
Make sure to completely review
the Rubric for Final Project
In preparation of the annual audit, prepare appropriate adjusting entries and post to the trial balance wo
adjusted trial balance and the preliminary 2017 statements (yellow tabs) to prepare revised financial statemen
Calculate the impact on earnings per share that the expansion options will cause. (Orange tabs)
NOTES TO THE FINANCIAL STATEMENTS - Prepare in a Word document - see the rubric for final project
FINANCIAL INFORMATION FOR THIS MILESTONE
Stockholder Equity / Earnings per share
Other Items
A. Compose appropriate footnotes within a statement of comprehensive income in accordance wit
standards, such as GAAP, International Financial Reporting Standards, and SEC, as applicable. MANAGEMENT BRIEF - Prepare in a Word document - see the rubric for final project
I.
Evaluate the company’s current performance based on the outcomes of relevant ratio analysis. J.
Discuss types of accounting changes encountered and when retrospective and prospective approache
K.
Predict the
impact of new credit policies
or a change in product or markets based on relevant ratio an
L.
Discuss relevant accounting standards
for informing the company’s financial reporting strategies. M.
Explain how the
four-step process
was used for effectively correcting and reporting errors in the revis
Peyton Approved prides itself on transparency with shareholders and investors. The company has added tw
launched a new marketing campaign, which is estimated to bring in 20,000 new customers over the next 6 mo
The company expects this expansion will require an additional $1,000,000 of capital and generate an additio
profit. The options are: 1)
Issuing an additional $1,000,000 of 10%, 100-par convertible preferred stock (same class as is current
2)
Issue an additional $1,000,000 of 8% convertible bonds (same terms as the existing issue) 3)
$500,000 each of preferred stock and bonds ·
On December 31, 20XX, the company repaired a packaging machine at cost of $27,000.00. It is
extend the life of the machine by four years. No depreciation is necessary this year. ·
The company spent $50,000 to obtain and defend a patent for its formula for dog treats. The p
and provides 20 years of protection. The $50,000 amount was incorrectly charged to Misc. Expense
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one 1 or milestone 2
orkbook (red tab). Use the nts that are audit ready. HOME
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ith applicable accounting es
should be used. nalysis. sion process. wo storefront locations and onths. onal $600,000 of after-tax tly outstanding) s expected that the repair will patent took effect on 1/1/20XX e
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Assets
Liabilities and Owners' Equity
Current Assets:
Current Liabilities:
Cash
1,488,999.34
Accounts Payable
1,555,212.85
Marketable Securities
5,500,000.00
Wages Payable
250,203.31
Accounts Receivable
7,092,495.88
Interest Payable
21,888.22
Baking Supplies
1,605,098.52
Current Portion of Bonds Payable
1,000,000.00 Merchandise Inventory
128,152.63
Income taxes currently payable
1,042,118.16 Prepaid Rent
71,877.07
Prepaid Insurance
207,834.14
Misc. Supplies
17,647.42
Total Current Assets
16,112,105.00
Total Current Liabilities
3,869,422.54 Long Term Liabilities:
Long Term/Fixed Assets:
Bonds Payable 10%, 20 year
4,000,000.00 Land
250,000.00 Building
1,250,000.00 Baking Equipment
2,254,140.00
Total Long Term Liabilities:
4,000,000.00 Accumulated Depreciation
-328,282.00
Net Fixed assets
3,425,858.00 Total Liabilities:
7,869,422.54 Preferred Stock - (10,000 authorized,
500,000.00 5,000 issued, 10%, $100 par value)
Common Stock - (2,000,000 shares
1,750,000.00 authorized, 1,750,000 issued, $1 par)
Retained Earnings
9,418,540.46 Total Equity
11,668,540.46 Total Assets:
19,537,963.00 Total Liabilities & Equity
19,537,963.00
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Bakery Sales
$ 33,881,157.15 Merchandise Sales
124,795.80 Total Revenues
34,005,952.95 Cost of Goods Sold - Baked
10,954,907.36 Cost of Goods Sold - Merchandise
88,994.79 Total Cost of Goods Sold
11,043,902.15 Gross Profit
22,962,050.80 Operating Expenses:
Rent Expense
1,576,731.95 Wages Expense
2,604,526.23 Misc. Supplies Expense
263,224.56 Repairs and Maintenance
47,353.05 Business License Expense
211,757.65 Misc. Expense
141,171.08 Depreciation Expense
634,520.00 Insurance Expense
112,937.69 Advertising Expense
160,413.49 Interest Expense
484,703.27 Telephone Expense
50,821.34 Total Operating Expenses:
6,288,160.31 Earnings before Income Tax
16,673,890.49 Income Taxes 4,168,472.62 Net Income 12,505,417.87
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Peyton Approved
Statement of Retained Earnings
For Year Ended 12/31/20XX
Beginning Balance:
$ 2,213,122.59 plus Net Income 12,505,417.87 less Dividends: Preferred 50,000.00 Common
5,250,000.00 Ending Balance
$ 9,418,540.46 $ 9,418,540.46
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Peyton Approved
Income Statement
For Year Ended 12/31/20XX
Bakery Sales
$ 33,881,157.15 Merchandise Sales
$ 124,795.80 Total Revenues
$ 34,005,952.95 Cost of Goods Sold - Baked
$ 10,954,907.36 Cost of Goods Sold - Merchandise
$ 88,994.79 Total Cost of Goods Sold
$ 11,043,902.15 Gross Profit
$ 22,962,050.80 Operating Expenses:
Rent Expense
$ 1,556,731.95 Wages Expense
$ 2,604,526.23 Misc. Supplies Expense
$ 263,224.56 Repairs and Maintenance
$ 20,353.05 Business License Expense
$ 211,757.65 Misc. Expense
$ 91,171.08 Depreciation Expense
$ 654,520.00 Insurance Expense
$ 112,937.69 Advertising Expense
$ 160,413.49 Interest Expense
$ 484,703.27 Telephone Expense
$ 50,821.34 Pension Expense
$ 107,041.70 Retired Employees Health Ins.
$ 43,718.91 Patent Amortization
$ 2,500.00 Total Operating Expenses:
$ 6,364,420.92 Operating Income
$ 16,597,629.88 Income Taxes
$ 4,168,847.62 Deferred tax Expense
$ 52,325.25 Total Tax Expense
$ 4,221,172.87
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Net Income
$ 12,376,457.01 Unrealized Gain/(Loss) on Marketable Secur
$ 265,000.00 Comprehensive Income
$ 12,111,457.01
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Peyton Approved
Statement of Retained Earnings
For Year Ended 12/31/20XX
Beginning Balance:
plus Comprehensive Income less Dividends: Preferred
Common
Ending Balance
0
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$ 2,213,122.59 $ 12,111,457.01 $ 50,000.00 $ 5,250,000.00 $ 9,024,579.60 HOME
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Peyton Approved
Balance Sheet
As of December 31, 20XX
Assets
Current Assets:
Cash
1,488,999.34
Accounts
Marketable Securities
5,235,000.00
Wages P
Accounts Receivable
7,092,495.88
Interest P
Baking Supplies
1,605,098.52
Current P
Merchandise Inventory
128,152.63
Income ta
Prepaid Rent
71,877.07
Accrued P
Prepaid Insurance
207,834.14
Accrued E
Misc. Supplies
17,647.42
Lease Lia
Contingen
Deferred Total Current Assets
15,847,105.00 Long Term/Fixed Assets:
Bonds Pa
Land
250,000.00
Building
1,250,000.00
Baking Equipment
2,387,729.40
Accumulated Depreciati
328,282.00
Net Fixed assets
3,559,447.40 Patent Net of Amortization
47,500.00 Preferred
5,000 Common
authori
Retained Total Assets:
19,454,052.40
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Liabilities and Owners' Equity
Current Liabilities:
s Payable
1,555,212.85
Payable
250,203.31
Payable
21,888.22
Portion of Bonds Payable
1,000,000.00
axes currently payable
1,042,493.16
Pension Liability
107,041.70
Employees Health Insuran
43,718.91
ability
106,589.40
nt Liability - Lawsuit
0.00
Tax Liability
52,325.25
Total Current Liabilities
4,179,472.80
Long Term Liabilities:
ayable 10%, 20 year
4,000,000.00
Total Long Term Liabiliti
4,000,000.00
Total Liabilities:
8,179,472.80
d Stock - (10,000 authorized
500,000.00
issued, 10%, $100 par value)
n Stock - (2,000,000 shares
1,750,000.00
ized, 1,750,000 issued, $1 par)
Earnings
9,024,579.60 Total Equity
11,274,579.60 Total Liabilities & Equity
19,454,052.40 HOME
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Peyton Approved
Earnings per Share
For Year Ended 12/31/20XX
Net Income
12,376,457.01 Less: Preferred Dividends
50,000.00 Earnings Available to Common Shareholde 12,326,457.01 Common Shares Outstanding
2,000,000 Basic EPS
6.16
If all preferred shares are converted:
Net Income
12,376,457.01 Additional Common Shares
500,000 Common Shares Outstanding after convers
2,500,000 EPS if preferred shares converted
4.95 Preferred shares are antidilutive
If all bonds are converted:
Net Income
12,376,457.01 Less: Preferred Dividends
50,000.00 Add back interest on bonds, net of income 1,000,000.00 Earnings Available to Common Shareholde 13,326,457.01 Additional Common Shares
2,000,000 Common Shares Outstanding after convers
4,000,000 Fully diluted EPS
3.33 Peyton plans to raise $1,000,000 million of additional capital for the coming year
that it will enable them to earn an additional $600,000 after tax. What would be t
earnings per share if the raise the $1,000,000 by:
a) issuing 10,000 share of 10% $100 par value convertible preferred st
can be coverted into 10 shares of Peyton common stock?
b) issuing $1,000,000 of 8% convertible bond, each $1,000 bond can b
5 shares of Peyton common stock?
c) $500,000 of each of the above?
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Net Income
600,000.00 Less: Preferred Dividends
100,000.00 Earnings Available to Common Shareholde 500,000.00 Common Shares Outstanding
100,000.00 Basic EPS
5.00 a
If all preferred shares are converted:
Net Income
600,000.00 Additional Common Shares
100,000.00 Common Shares Outstanding after convers
200,000.00 EPS if preferred shares converted
3.00 Preferred shares are antidilutive
b
If all bonds are converted:
Net Income
600,000.00 Less: Preferred Dividends
- Add back interest on bonds, net of income 48,000.00 Earnings Available to Common Shareholde 648,000.00 Additional Common Shares
5,000.00 Common Shares Outstanding after convers
105,000.00 6.17
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r. They anticipate
the impact on
tock, where share
be converted into?
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amortization and depreciation semi-annually.
Required:
Prepare the appropriate journal entries for the lessor (Jamison Leasing) from the beginning of the lease through the end of 2021. (If no
entry is required for a transaction/event, select "No journal entry required" in the first account field.)
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Answer the following using the FASB codification
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On January 1, 2019, Bridgeport Ic., a construction company, leased an excavator from Leaselt Inc. The lease terms are as follows:
Annual lease payments of $26,900 at the beginning of each year for five years
At the end of the lease term the asset reverts back to the lessor and the residual value guarantee is $8,100
The incremental borrowing rate is 7% and the implicit rate in the lease is 6% (known by the lessee)
Bridgeport Inc. has a December 31 year end
Prepare the journal entries for 2019 for Bridgeport Inc. Assume Bridgeport follow IFRS. (Credit account titles are automatically indented
when the amount is entered. Do not indent manually. Round answers to O decimal places, e.g. 5,275. Round factor values to 5 decimal places,
e.g. 1.25124. If no entry is required, select "No entry" for the account titles and enter O for the amounts.)
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Listed below are 15 terms followed by a list of phrases that describe or characterize each of the terms. Match each
phrase with the correct term.
TERM
1. Interest expense
2. Disclosure only
3. Lessor's gross investment
4. Lessee's lease payments
5. Lessor's net investment
6. Initial direct costs
7. Operating lease
8. Bargain purchase option
9. Depreciable assets
10. Loss to lessee
PHRASE
Periodic rent payments plus excess
guaranteed residual value.
Deducted in lessor's computation of
lease payments.
Leasehold improvements.
Cash paid to satisfy residual value
guarantee.
Sales-type lease selling expense.
Depreciation longer than lease term.
Sale-leaseback as operating lease.
PV of lease payments plus PV of residual
value.
Future lease payments in each of the
next five years.
Periodic rent payments plus residual
value.
Lease payments plus guaranteed residual
value.
11. Finance lease expense
12. PV of bargain purchase
option price
13. Title transfers to lessee Nonlease payments.
14. Loan…
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Access the FASB Accounting Standards Codification at the FASB website ( asc.fasb.org ) Required: Determine the specific citation for accounting for each of the following items: 1. If it is only reasonably possible that a contingent loss will occur, the contingent loss should be disclosed. 2. Criteria allowing short-term liabilities expected to be refinanced to be classified as long-term liabilities. 3. Accounting for the revenue from separately priced extended warranty contracts. 4. The criteria to determine if an employer must accrue a liability for vacation pay.
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Oriole Company specializes in leasing large storage units to other businesses. Oriole entered a contract to lease a storage unit to
Ivanhoe, Inc. for 4 years when that particular storage unit had a remaining useful life of 5 years. The fair value of the unit was $15,000
at the commencement of the lease on January 1, 2025. The present value of the five equal rental payments of $3,808 at the start of
each year, plus the present value of a guaranteed residual value of $1,000, equals the fair value of $15,000, Oriole's implicit rate of
return on the lease of 5%. The following is a correct, complete amortization schedule created by Oriole.
Date
1/1/25
1/1/25
1/1/26
1/1/27
1/1/28
12/31/28
Lease Payment
$3,808
3,808
3,808
3,808
1,000
$16,232
Interest
(5%) on
Outstanding
Lease
Receivable
$560
397
227
48
$1,232
Reduction of
Lease
Receivable
$3,808
3,248
3,411
3,581
952
$15,000
Balance of
Lease
Receivable
$15,000
11.192
7,944
4,533
952
0
Given the above schedule, make the appropriate entries at…
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Sh12
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N1.
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LeBron James (LBJ) Corporation agrees on January 1, 2025, to lease equipment from Blossom, Inc. for 3 years. The lease calls for
annual lease payments of $22,000 at the beginning of each year. The lease does not transfer ownership, nor does it contain a bargain
purchase option, and is not a specialized asset. In addition, the useful life of the equipment is 10 years, and the present value of the
lease payments is less than 90% of the fair value of the equipment.
Prepare LBJ's journal entries on January 1, 2025 (commencement of the operating lease), and on December 31, 2025. Assume the
implicit rate used by the lessor is unknown, and LEY's incremental borrowing rate is 6%. (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. For calculation purposes, use 5 decimal places as displayed in the factor…
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Access the FASB Accounting Standards Codification at the FASB website (www.fasb.org).Required:Determine the specific citation for accounting for each of the following items:1. If it is only reasonably possible that a contingent loss will occur, the contingent loss should be disclosed.2. Criteria allowing short-term liabilities expected to be refinanced to be classified as long-term liabilities.3. Accounting for the revenue from separately priced extended warranty contracts.4. The criteria to determine if an employer must accrue a liability for vacation pay
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Assume that on December 31, 2019, Kimberly-Clark Corp. signs a 10-year, non-cancelable lease agreement to lease a storage
building from Sheffield Storage Company. The following information pertains to this lease agreement.
1.
The agreement requires equal rental payments of $66,299 beginning on December 31, 2019.
2.
The fair value of the building on December 31, 2019 is $486,019.
The building has an estimated economic life of 12 years, a guaranteed residual value of $12,000, and an expected residual
value of $9,800. Kimberly-Clark depreciates similar buildings on the straight-line method.
3.
4.
The lease is nonrenewable. At the termination of the lease, the building reverts to the lessor.
5.
Kimberly-Clark's incremental borrowing rate is 8% per year. The lessor's implicit rate is not known by Kimberly-Clark.
Click here to view factor tables. (For calculation purposes, use 5 decimal places as displayed in the factor table provided.)
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Question related to financial Accounting
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hrl.7
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8
A lessor received a cash rental payment from a lesses at the end of the current period. The assel was leased at the beginning of the current period and was properly recorded as a sales-type Inase
Which journal entry should the lessor use to record the payment?
O Credit Cash; Debit Lease Liability: Credit Interest Expense
O Debit Interest Revenue; Debit Lease Receivable; Credit Cash
Debit Cash; Credit Interest Revenue; Credit Lease Receivable
Debit Interest Expense; Credit Cash; Credit Lease Liability
NEXT >
BOOKMARK
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hr.3
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I need answer correct
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Ef 122.
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Financial Statement Reporting for an Operating Lease
Harmeling Paint Ball (HPB) Corporation needs a new air compressor that costs $80,000. HPB will need it for only 5 years even though the compressor's
economic life is long enough so that the lease is an operating lease. The firm can lease the compressor for 5 years with $30,000 lease payments at the
end of each year. HPB's cost of debt is 13%. Answer the following questions. (Hint: See Table 19-1.)
a. What is the initial lease liability that must be reported on the balance sheet? Do not round intermediate calculations. Round your answer to the
nearest cent. Enter your answer as a positive value.
$
b. What is the initial right-of-use asset? Do not round intermediate calculations. Round your answer to the nearest cent.
$
c. What will HPB report as the Year-1 lease expense? Round your answer to the nearest cent. Enter your answer as a positive value.
$
d. What is the Year-1 imputed interest expense? Do not round intermediate…
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When a lessee makes periodic cash payments for a finance lease, which of the following accounts is increased?
A.Lease Liability
B.Lease Rental Expense
C.Right-of-Use Asset
D.Interest Expense
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Subject: acounting
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Required 1 Required 2
Prepare appropriate journal entries recorded by Nath-Langstrom Services for the first year of the lease.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. (Round your
Intermediate calculations and final answers to the nearest whole dollar)
View transaction list
Journal entry worksheet
< 1
2 3
Note: Enter debits before credits.
Record the beginning of the lease for Nath-Langstrom Services.
Date
January 01, 2024
Record entry
→ Show Transcribed Text
<
View transaction list
Journal entry worksheet
1 2
5
Note: Enter debits before credits.
General Journal
Date
January 01, 2024
Clear entry
Record entry
Required 1 Required 2
Prepare appropriate journal entries recorded by ComputerWorld Leasing for the first year of the lease.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. (Round your
intermediate calculations and final answers to the…
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Under ASC Topic 840 and IFRS 16, FASB and IASB revised lease accounting rules to address off-balance sheet financing.
True or False
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