Omega Company had credit sales of $80,000 and cash sales of $35,000 during the year. In 2024, Omega collected $45,000 of accounts receivable from credit sales. Omega incurred operating expenses of $24,000; of this amount, $18,000 was paid in cash, and the remaining $6,000 was a liability at year-end. In addition to these operating expenses, Omega also purchased a three-year equipment maintenance contract on January 1, 2024, at a cost of $6,000. What is Omega's 2024 cash basis net income?
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- On July 1, 2023, Shamrock Inc. made two sales:1It sold excess land in exchange for a four-year, non-interest-bearing promissory note in the face amount of $1,079,350. Theland's carrying value is $540,000.2.It rendered services in exchange for an eight-year promissory note having a face value of $360,000. Interest at a rate of 3%is payable annually.The customers in the above transactions have credit ratings that require them to borrow money at 11% interest.Shamrock recently had to pay 8% interest for money it borrowed from British Bank.On July 1, 2023, Shamrock also agreed to accept an installment note from one of its customers in partial settlement ofaccounts receivable that were overdue. The note calls for four equal payments of $21,600, including the principal andinterest due, on the anniversary of the note. The implied interest rate on this note is 10%.The tables in this problem are to be used as a reference for this problem. Prepare the journal entries to record the three notes…Sheffield Corp. factors $710,000 of accounts receivable with Sage Hill Inc., Inc. on a with recourse basis. Sage Hill Inc. will collect the receivables. The receivable records are transferred to Sage Hill Inc. on August 15, 2020. Sage Hill Inc. assesses a finance charge of 2.0% of the amount of accounts receivable and also reserves an amount equal to 5.05% of accounts receivable to cover probable adjustments. Sheffield prepares financial statements under ASPE Assume the conditions for to be recorded as a sale are met. Prepare the journal entry on August 15, 2020, for Sheffield to record the sale of receivables, assuming the recourse obligation has a fair value of $5,200. (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 Credit DebitPina Colada Corp. factors $620,000 of accounts receivable with Kingbird, Inc., Inc. on a with recourse basis. Kingbird, Inc. will collect the receivables. The receivable records are transferred to Kingbird, Inc. on August 15, 2023. Kingbird, Inc. assesses a finance charge of 2.0% of the amount of accounts receivable and also reserves an amount equal to 5.05% of accounts receivable to cover probable adjustments. Pina prepares financial statements under ASPE. Assume the conditions for to be recorded as a sale are met. Prepare the journal entry on August 15, 2023, for Pina to record the sale of receivables, assuming the recourse obligation has a fair value of $7,400. (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.) Account Titles and Explanation Debit
- The following December 31, 2021, fiscal year-end account balance information is available for the Stonebridge Corporation: Cash and cash equivalents $ 5,000Accounts receivable (net) 20,000Inventory 60,000Property, plant, and equipment (net) 120,000Accounts payable 44,000Salaries payable 15,000Paid-in capital 100,000 The only asset not listed is short-term investments. The only liabilities not listed are $30,000 notes payable due in two years and related accrued interest of $1,000 due in four months. The current ratio at year-end is 1.5:1.Required:Determine the following…[The following information applies to the questions displayed below.] On January 1, 2018, Brown Co. borrowed cash from First Bank by issuing a $100,000 face value, four-year term note that had an 8 percent annual interest rate. The note is to be repaid by making annual cash payments of $30,192 that include both interest and principal on December 31 of each year. Brown used the proceeds from the loan to purchase land that generated rental revenues of $52,000 cash per year. b. Organize the information in accounts under an accounting equation. (Round your answers to the nearest whole dollar amount. Enter any decreases to account balances with a minus sign. If there is no effect on the Accounts Titles / Retained Earnings, leave the cell blank.) BROWN CO. Effect of Events on the Accounting Equation 2018, 2019, 2020 and 2021 Stockholders Equity Retained Earnings Assets = Liabilities Accounts Titles / Event Retained Earnings Notes Payable Cash Land 2018 1/1 1/1 %3D 12/31 12/31 Bal. 2019 Beg.…On January 1, 2018, Brown Co. borrowed cash from First Bank by issuing a $42,000 face value, four-year term note that had an 6 percent annual interest rate. The note is to be repaid by making annual cash payments of $12,121 that include both interest and principal on December 31 of each year. Brown used the proceeds from the loan to purchase land that generated rental revenues of $22,260 cash per year. Prepare an income statement, a balance sheet, and a statement of cash flows for each of the four years.
- Ray Company factored 6,000,000 of accounts receivable to a finance entity on October 1, 2020. Control was surrendered by Ray Company. The factor assessed a fee of 3% and retains a holdback equal to 5% of the accounts receivable. In addition, the factor changed 15% interest computed on a weighted average time to maturity of the accounts receivable of 54 days. What is the amount of cash initially received by Ray Company from the factoring?Katec Corporation borrowed $79000.00 at 3% compounded monthly for 13 years to buy a warehouse. Equal payments are made at the end of every month. (a) Determine the size of the monthly payments. (b) Compute the interest included in payment 68. (c) Determine the principal repaid in payment period 28. (d) Construct a partial amortization schedule showing details of the first three payments, the last three payments, and totals.Katec Corporation borrowed $79000.00 at 3% compounded monthly for 13 years to buy a warehouse. Equal payments are made at the end of every month. (a) Determine the size of the monthly payments. (b) Compute the interest included in payment 68. (c) Determine the principal repaid in payment period 28. (d) Construct a partial amortization schedule showing details of the first three payments, the last three payments, and totals. Please step by step answer.
- Trump Company constructed various assets at a total cost of $8,400,000 during 2019. The weighted-average accumulated expenditures on assets qualifying for capitalization of interest during 2019 were $5,600,000. Trump had the following debts outstanding at December 31, 2019: A. 12%, ten-year bonds issued at par on December 31, 2013, with interest payable annually on December 31 $4,000,000 B. 9%, 3-year note payable, dated January 1, 2018, with interest payable annually on January 1 $2,000,000 C. 10%, 5-year note to finance the construction of various assets, dated January 1, 2019, with interest payable annually on January 1 $3,600,000 Required: Compute the amounts of each of the following. Show all workings. i. Avoidable interest. ii. Total interest to be capitalized during 2019. Explain the rationale for the decision.On January 1, 2021, Takemichi Company sold a piece of equipment to Hina Company with a cost of P3,400,000 and accumulated depreciation of P600,000 in exchange for an annual 8% interest-bearing note, P4,000,000. Hina company is required to make five annual payments of principal plus interest. Questions: What is the interest income for the year 2024? How much is the total proceeds of Takemichi for the year 2025?Trump Company constructed various assets at a total cost of $8,400,000 during 2019. The weighted average accumulated expenditures on assets qualifying for capitalization of interest during 2019 were $5,600,000. Trump had the following debts outstanding at December 31, 2019: 2%, ten-year bonds issued at par on December 31, 2013, with interest payable annually on December 31 $4,000,000. 9%, 3-year note payable, dated January 1, 2018, with interest payable annually on January 1 $2,000,000. 10%, 5-year note to finance construction of various assets, dated January 1, 2019, with interest payable annually on January 1 $3,600,000 Required: Compute the amounts of each of the following. Show all workings. Avoidable interest. Total interest to be capitalized during 2019. Explain the rational for the decision.
