Question 5 - Homework 1
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Question 5 - Homework 1 - Connect
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Explanation
Note: Intermediate answers are shown below as rounded, but the full answer wa
complete the calculation.
The time line is:
0
1 2
3
4
5
6 PV
$78,000
$78,000
$78,000
$78,000
$78,000
$78,000
$
To find the PVA, we use the equation:
PVA = C
({1 −
[1/(1 + r
)
t
]}/
r
)
PVA = $78,000{[1 −
(1/1.0850
7
)]/.0850}
PVA = $399,244.05
Calculator Solution:
Enter
7
8.50%
±$78,000
N
I/Y
PV
PMT
Solve for
$399,244.05
Homework 1
90/100 Total points awarded
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Submitted
Your company will generate $78,000 in annual revenue each year for t
years from a new information database. If the appropriate discount rate is
what is the present value? (Do not round intermediate calculations an
answer to 2 decimal places, e.g., 32.16.)
Present value
$
399,244.05
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Scored
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Accumulated
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Given the following:
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April 1
June 1
November 1
Cost of ending inventory
Number
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Refreshers
Question 3- Inventory and Overi X
37
57
47
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FIN
Cost
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8
9
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612,000
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Watson Company purchased assets of Holmes Limited at auction for $1,400,000. An independent'appraisal of the fair value of the
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Required:
Prepare the journal entry to record the purchase of the assets.
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1
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Building
Calamar
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Cash flows during the first year of operations for the Harman-Kardon Consulting
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Calculate accrual net income for the year.
Jul 17, 2023, 10:38 PM
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The following is the adjusted trial balance of Sierra Company.
3
Account Title
Cash
Prepaid insurance
Notes receivable (due in 5 years)
Buildings
Accumulated depreciation-Buildings
Accounts payable
Notes payable (due in 3 years).
Common stock
Retained earnings
Dividends
Consulting revenue
Wages expense
Depreciation expense-Buildings
Insurance expense
Totals
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Sierra Company
Adjusted Trial Balance
December 31
8,798
D
$
4
(1) Prepare an income statement for the year ended December 31.
(2) Prepare a statement of retained earnings for the year ended December 31. The Retained earnings account balance was $13,500 on
December 31 of the prior year.
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Given the following:
January 1 inventory
April 1
June 1
November 1
Cost of ending inventory
Number
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cra
Question 4 - Inventory and Over X
52
72
62
67
253
E
Cost
per unit
$4
7
8
9
Total
$
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504
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603
$ 1,811
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Exercise 7-16 (Algo) Record amortization expense (LO7-5)
On January 1, 2024, Weaver Corporation purchased a patent for $255,000. The remaining legal life is 20 years, but the company
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successfully defending a patent infringement suit. The successful defense did not change the company's estimate of useful life.
Weaver Corporation's year-end is December 31.
Required:
1. Record the purchase in 2024; amortization in 2024; amortization in 2025; legal fees in 2026; and amortization in 2026.
2. What is the balance in the Patent account at the end of 2026?
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Return to the original data. Monk Builders has just signed a contract with the state government to replace the windows in low-
income housing units throughout the state. Monk needs 80,000 windows to complete the job and has offered to buy them from
Wilson at a price of $120.00 per window. Monk will pick up the windows at Wilson's plant, so Wilson will not incur the $2 per
window shipping charge. In addition, Wilson will not need to pay a distributor's commission, since the windows will not be sold
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For each of the following separate situations, determine how much revenue is recognized in December (using accrual basis
accounting).
a. On December 7, Oklahoma City Thunder sold a $124 ticket to a basketball game to be played in March.
b. Tesla sold and delivered a $92,000 car on December 25. The customer will not pay until February.
c. Deloitte signs a contract on December 1 to provide 40 days of advisory services with receipt of $44,000 due at the end of the
contract. On December 31, 75% of the services have been completed.
Situations
Revenue recognized
a. Sale of a ticket to a basketball game
b. Sale of a car on credit
c. Contract to provide advisory services
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Entries for notes payable
Bennett Enterprises issues a $660,000, 45-day, 9%, note to Spectrum Industries for merchandise inventory.
Assume a 360-day year. If required, round your answers to the nearest dollar.If an amount box does not require an entry, leave it blank.
a. Journalize Bennett Enterprises' entries to record:
1. the issuance of the note.
2. the payment of the note at maturity.
2
b. Journalize Spectrum Industries' entries to record:
1. the receipt of the note.
2. the receipt of the payment of the note at maturity.
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Exercise 12-10 Net Present Value Analysis (LO12-2]
Kathy Myers frequently purchases stocks and bonds, but she is uncertain how to determine the rate of return that she is earning. For
example, three years ago she paid $13,000 for 200 shares of Malti Company's common stock. She received a $420 cash dividend on
the stock at the end of each year for three years. At the end of three years, she sold the stock for $16,000. Kathy would like to earn a
return of at least 14% on all of her investments. She is not sure whether the Malti Company stock provide a 14% return and would like
some help with the necessary computations.
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Labor Variances.
Verde Company produces wheels for bicycles. During the year, 656,000 wheels were produced. The actual labor used was 364,000 hours at $9.20 per hour. Verde
has the following labor standards: 1) $10.40 per hour; 2) 0.48 hour per wheel.
Required:
1. Compute the labor rate variance.
2. Compute the labor efficiency variance.
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Present Value of an Annuity
On January 1 you win $2,480,000 in the state lottery. The $2,480,000 prize will be paid in equal installments of $310,000 over 8 years. The payments will be
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made on December 31 of each year, beginning on December 31. If the current interest rate is 7%, determine the present value of your winnings. Use the
present value tables in Exhibit 7. Round to the nearest whole dollar.
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Ayayai Mowers Ltd. agreed to sell the City of Halifax four riding mowers and 20 push lawn mowers. The contract price was $72,00O.
Ayayai normally sells its riding mowers for $14,400 and its push lawn mowers for $960. The contract required the City of Halifax to
pay Ayayai once all of the merchandise has been delivered to the city's public works yard. Ayayai's management does not expect any
returns or any issues with payment.
Ayayai delivered all four of the riding mowers and 14 of the push mowers on April 26. The remaining six push mowers were delivered
on May 5. Ayayai received payment from the city on May 18. Ayayai's cost for each riding mower is $9,960, while the push mowers
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