Please need answer the accounting question ABC Company began operations on August 1, 2021, and enteredinto the following transactions during 2021:1. On August 1, ABC Company sold common stock to owners in theamount of $200,000 and borrowed $100,000 from the local bank ona 10-month, 12% note payable.2. On September 1, ABC Company purchased a piece of equipmentcosting $80,000 by paying $50,000 in cash and agreeing to pay theremainder within six months. The equipment was assigned a 5-yearlife and a $5,000 residual value.3. On October 1, ABC Company received $90,000 cash from acustomer for services to be performed over the next 9 months.4. On November 1, ABC Company paid $18,000 cash for a one-yearinsurance policy.5. On December 1, ABC Company paid $10,000 cash tostockholders as a dividend.Calculate the number of total liabilities that ABC Company wouldreport in its December 31, 2021 balance sheet after all the abovetransactions is recorded and all necessary adjusting entries aremade.

Step 1: Define LiabilityLiability can be defined as the amount owed by a company. All the…

Answered: ABC Company began operations on August…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable

Section: Chapter Questions

Problem 29E

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Described below are certain transactions of Pharoah Company for 2021: On May 10, the company purchased goods from Fox Company for $74,900, terms 2/10, n/30. Purchases and accounts payable are recorded at net amounts. The invoice was paid on May 18. 1. On June 1, the company purchased equipment for $96,000 from Rao Company, paying $31,200 in cash and giving a one- year, 9% note for the balance. 2. On September 30, the company discounted at 11% its $220,000, one-year zero-interest-bearing note at Virginia State Bank, receiving $198,000. 3.
On January 1, 2018, the Apex Company exchanged some shares of common stock it had been holding as aninvestment for a note receivable. The note principal plus interest is due on January 1, 2019. The 2018 incomestatement reported $2,200 in interest revenue from this note and a $6,000 gain on sale of investment in stock. Thestock’s book value was $16,000. The company’s fiscal year ends on December 31.Required:1. What is the note’s effective interest rate?2. Reconstruct the journal entries to record the sale of the stock on January 1, 2018, and the adjusting entry torecord interest revenue at the end of 2018. The company records adjusting entries only at year-end
On January 1, 2021, the Apex Company exchanged some shares of common stock it had been holding as an investment for a note receivable. The note principal plus interest is due on January 1, 2022. The 2021 income statement reported $2,200 in interest revenue from this note and a $6,000 gain on sale of investment in stock. The stock’s book value was $16,000. The company’s fiscal year ends on December 31.Required:1. What is the note’s effective interest rate?2. Reconstruct the journal entries to record the sale of the stock on January 1, 2021, and the adjusting entry to record interest revenue at the end of 2021. The company records adjusting entries only at year-end.
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Kingbird, Inc. owns the following assets at December 31, 2020: Cash in bank savings account $47,000 Chequing account balance $30,000 Cash on hand 14,000 Postdated cheque from Blossom Company 440 Refund due (overpayment of income taxes) 30,000 Cash in a foreign bank (CAD equivalent) 88,000 Preferred shares acquired shortly before their fixed maturity date 15,000 Debt instrument with a maturity date of three months from the date acquired 11,000 (a1)If Kingbird follows ASPE and follows a policy of including all possible items in cash and cash equivalent, what amount should be reported as cash and cash equivalents? (Do not leave any answer field blank. Enter 0 for amounts.) Cash and cash equivalents under ASPE $enter Cash and cash equivalents under ASPE in dollars (a2)If Kingbird follows IFRS what amount should be reported as cash and cash equivalents? Cash and cash equivalents under IFRS $enter Cash and cash equivalents…
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Gravel Corporation borrowed $250,000 from a bank on January 1, 2019, by signing a10%, six-month note. The journal entry made by Gravel on January 1, 2019, will debita. Interest Expense for $25,000 and credit Interest Payable for $25,000.b. Cash for $225,000 and credit Notes Payable for $225,000.c. Interest Expense for $25,000 and credit Cash for $25,000.d. Cash for $250,000 and credit Notes Payable for $250,000.
On February 1, 2019, Henson Company factored receivables with a carrying amount of $300,000 to Agee Company. Agee Company assesses a finance charge of 3% of the receivables and retains 5% of the receivables. Relative to this transaction, you are to determine the amount of loss on sale to be reported in the income statement of Henson Company for February. Assume that Henson factors the receivables on a with guarantee (recourse) basis. What is the amount of recourse liability to be recorded on February? Select one: O a. $291,000. O b. None of the answers is correct. O c. $300,000. O d. $9,000. e. $276,000. O f. $285,000.
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During the fiscal year ended December 31, Duckworth Corporation engaged in the following transactions involving notes payable: Sept. 16. Purchased office equipment from Earthtime Equipment. The invoice amount was $24,000, and Earthtime agreed to accept, as full payment, on 12%, three-month note for the invoice amount. Nov. 1. Borrowed $100,000 from Sandra Duckworth, a major corporate stockholder. The corporation issued Duckworth a $100,000, 15%, 120-day note payable. Dec. 1. Purchased merchandise inventory in the amount of $5,000 from Teller Corporation. Teller accepted a 90-day, 14% note as a full settlement of the purchase. Duckworth Corporation uses a perpetual inventory system. Dec. 16. The $24,000 note payable to Earthtime Equipment matured today. Duckworth paid the accrued interest on this note and issued a new 30-day, 16% note payable in the amount of $24,000 to replace the note that matured.

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