A company is the real estate business and rents offices to clients. On the first day of their accounting year, they sign an agreement with a new client fo the duration of one year for a total of $120,000. They require two months of rent in advance from the client, plus $5,000 as a bond to be deposit with trustee. On balance date (i.e., the last day of their accounting year) the firms has earned . Oa. $145,000 b. $140,000 Oc. $135,000 d. $125,000 e. $120,000

A company is the real estate business and rents offices to clients. On the first day of their accounting year, they sign an agreement with a new client fo the duration of one year for a total of $120,000. They require two months of rent in advance from the client, plus $5,000 as a bond to be deposit with trustee. On balance date (i.e., the last day of their accounting year) the firms has earned . Oa. $145,000 b. $140,000 Oc. $135,000 d. $125,000 e. $120,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Your brother's business obtained a 30-year amortized mortgage loan for $300,000 at a nominal annual rate of 7.0%, with 360 end-of-month payments. The firm can deduct the interest paid for tax purposes. What will the interest tax deduction be for Year 1? Oa. $20,903.46 O b. $19,169.71 O c. $3,047.43 O d. $21,000.00 O e. $23,950.89
An employee obtained a loan of P11,000 at the rate of 7% compounded annually in order to build a house. The amortization is to be monthly within a period of 1 year? What will be outstanding principal at the beginning of the 8th period? schedule. Hint: Construct an amortization Php 4,543.456 Php 4,673.724 Php 5,345.234 Php 6,786.353
On January 1, Lessor Company signed a 1-year rental with quarterly payments of P100,000 due at the end of each quarter. In addition, the lessee must pay contingent rent of 5% of all sales in excess of P10,000,000. The contingent rent is paid in one payment on December 31. The same lessee has used the building for the past 5 years, and in each of those years the lessee reached the contingent rent threshold of P10,000,000 in sales. Sales of the lessee for the first two quarters are as follows: Quarter ended Amount March 31 P3,200,000 June 30 3,000,000 What amount of rent income should be reflected in Lessor's quarterly income statement for the three months ended June 30?
Clare Jarrett has just closed a business loan of $400 000 to assist with the purchase of equipmentand fixtures for her small business. The loan will be repaid in five (5) equal annual end-of-yearinstallments and the institution has agreed to lend at a rate of 8% compounded annually. As partof her business’ detailed financial planning, she wishes to determine the annual interest paymentsattributable to the loan.Required:A. Determine the business yearly payment on a $400 000 loan. B. Prepare an amortization schedule for this loan. C. What is the loan balance at the end of year 3?D. How much interest expense will Ms. Jarrett pay over the life of the loan? E. What is the effective rate of interest on the loan if interest is compounded quarterly?
On January 1 of the current year, a company began construction of an office building to be used as its corporate headquarters. The building was completed early in the following year Construction expenditures for the current year, which were incurred evenly throughout the year, totaled $6,900,000. The company had the following debt obligations which were outstanding during all of the current year Construction loan, 10% Long-term note, 9% Long-term note, 6% 4 $1,725,000 2,300,000 4,600,000 Required: Calculate the amount of interest capitalized in the current year for the building using the specific interest method. terest capitalized
Precision Castparts, a manufacturer of processed engine parts in the automotive and airline industries, borrows $40.7 million cash on October 1, 2021, to provide working capital for anticipated expansion. Precision signs a one-year, 9% promissory note to Midwest Bank under a prearranged short-term line of credit. Interest on the note is payable at maturity. Each firm has a December 31 year-end. 2. Record the adjustments on December 31, 2021, for (a) Precision Castparts and (b) Midwest Bank. (Do not round intermediate calculations. If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in dollars, not in millions. For example, $5.5 million should be entered as 5,500,000.) Journal entry worksheet Record the adjusting entry for interest for Precision Castparts. Record the adjusting entry for interest for Midwest Bank. Note: Enter debits before credits. Date General…
Year 1, 2, 3, and 4 total expenses are $200,000, $210,000, $225,000, and $240,000, respectively. A tenant signs a lease at the start of the second year, occupies 35% of the rentable area and has base year stop for recoveries. What will the expense recovery for this tenant be in year 3?
Larkspur Inc. was incorporated in 2019 to operate as a financial service firm, with an accounting fiscal year ending April 30. Larkspur's primary product is a sophisticated online investment management system; its customers pay a fixed fee plus a usage charge for using the system. Larkspur has leased a large, GenX computer system from the manufacturer. The lease calls for a monthly rental of $24,500 for the 144 months (12 years) of the lease term. The estimated useful life of the computer is 14 years. All rentals are payable on the first day of the month beginning with April 1, 2020, the date the computer was installed and the lease agreement was signed. The lease is non-cancelable for its 12-year term, and it is secured only by the manufacturer's chattel lien on the GenX system. This lease is to be accounted for as a finance lease by Larkspur, and the asset will be amortized by the straight-line method. Borrowed funds for this type of transaction would cost Larkspur 6% per year (0.5%…
Your brother's business obtained a 30-year amortized mortgage loan for $175,000 at a nominal annual rate of 7.4%, with 360 end-of-month payments. The firm can deduct the interest paid for tax purposes. What will the interest tax deduction be for Year 1? a. $1,645.03 b. $14,539.98 c. $12,950.00 d. $11,825.05 e. $12,894.95
Wall Co. leased office premises to Fox, Inc. for a five-year term beginning January 2, 20x9. Under the terms of the operating lease, rent for the first year is P8,000 and rent for years 2 through 5 is P12,500 per annum. However, as an inducement to enter the lease, Wall granted Fox the first six months of the lease rent-free. In its December 31, 201x0 (one year after 20x9), journal, at what amount should Wall increase or (decrease) the rent receivable? (Use open and close parentheses, if it's a decrease)
What is the correct answer and show the solution.
Precision Castparts, a manufacturer of processed engine parts in the automotive and airline industries, borrows $40.4 million cash on October 1, 2024, to provide working capital for anticipated expansion. Precision signs a one-year, 9% promissory note to Midwest Bank under a prearranged short-term line of credit. Interest on the note is payable at maturity. Each company has a December 31 year-end. Required: 1. Prepare the journal entries on October 1, 2024, to record (a) the notes payable for Precision Castparts and (b) the notes receivable for Midwest Bank. 2. Record the adjusting entry on December 31, 2024, for (a) Precision Castparts and (b) Midwest Bank. 3. Prepare the journal entries on September 30, 2025, to record payment of (a) the notes payable for Precision Castparts and (b) the notes receivable for Midwest Bank. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare the journal entries on October 1, 2024, to record (a) the…