On December 31, 2016, Wesley Inc. granted 4,000 share appreciation rights (SARS) toits employees. When exercised, each SAR paid out the current market price of thecommon shares less $34 (the market price of the common shares on the date of theSAR grant). The vesting period ended on December 30, 2018, and the exercise periodended on December 31, 2019.Infomation on Wesley Inc.'s plan is as follows:Average cashpaid out onexerciseEstimatedFair value perSARNumber ofSARS exercisednumber ofYear endSARS vestingDec 31, 2016Dec 31, 2017Dec 31, 2018Dec 31, 2019$ 890%|1593%2292% (actual)$182,100141,580Required:Prepare all journal entries for the years ended December 31, 2017, throughDecember 31, 2019, inclusive

SAR gives the employee the right to receive the compensation on the fair value of the shares, if the…

Answered: On December 31, 2016, Wesley Inc.…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Transactions during 2020 follow: Borrowed $20,000 cash on July 1, 2020, signing a one-year, 10 percent note payable. Purchased equipment for $18,000 cash on July 1, 2020. Sold 10,000 additional shares of capital stock for cash at $0.50 market value per share at the beginning of the year. Earned $70,000 in revenues for 2020, including $14,000 on credit and the rest in cash. Incurred $27,000 in wages expense and $8,000 in miscellaneous expenses for 2020, with $7,000 on credit and the rest paid with cash. Note: Wages are paid in cash. Purchased additional small tools, $3,000 cash. Collected accounts receivable, $8,000. Paid accounts payable, $11,000. Purchased $10,000 of supplies on account. Received a $3,000 deposit on work to start January 15, 2021. Declared a cash dividend on December 1, $10,000; paid on December 31. Data for adjusting entries: Supplies of $4,000 and small tools of $8,000 were counted on December 31, 2020 (debit Miscellaneous Expenses). Depreciation for 2020,…
On January 1, 2021, the Montgomery Company agreed to purchase a building by making six payments. The first three are to be $26,000 each, and will be paid on December 31, 2021, 2022, and 2023. The last three are to be $41,000 each and will be paid on December 31, 2024, 2025, and 2026. Montgomery borrowed other money at a 12% annual rate. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required:1. At what amount should Montgomery record the note payable and corresponding cost of the building on January 1, 2021?2. How much interest expense on this note will Montgomery recognize in 2021?
On January 1, 2021, the Highlands Company began construction on a new manufacturing facility for its own use. The building was completed in 2022. The company borrowed $1,500,000 at 8% on January 1 to help finance the construction. In addition to the construction loan, Highlands had the following debt outstanding throughout 2021: B 4 12% bonds Long-term note, 8% Required: Construction expenditures incurred during 2021 were as follows: January 1 March 31 June 30 September 30 December 1 $600,000 $1,200,000 $800,000 $600.000 $300,000 Calculate the amount of interest capitalized for 2021 using the specific interest method. (Do not round the intermediate calculations. Round your percentage answers to 1 decimal place.) Expenditure Average Date January 1 March 31 June 30 September 30 December 1 Avg. accumulated expenditures 5,000,000 3,000,000 Average accumulated expenditures X X X X X Amount Weight X X IIII|| Interest Rate P Capitalized Interest
During 2019, Honeymooners Companies issued 4,000 preferred shares with par value of $ 1 to $ 11 each. Each preferred share can be exchanged (convert), at the option of the holder (investor), for three Honeymooners common shares with par value of $ 2. In April 2020, all preferred shares were exchanged. At the time of the exchange, how much must Honeymooners credit to the contributed capital account in excess of par value of commons? Select one: to. $ 44,000 b. $ 0 c. $ 40,000 d. $ 20,000
General Corporation has the following restricted cash items reported on its balance sheet dated December 31, 2020: Bonds to be paid in full on January 1, 2022; $700,000 Warranty claims to be paid during 2021; 22,500 Workers compensation claims to be paid equally for the next 10 years: 2,000,000 Cleanup costs related to mine excavation to be completed by October 31, 2021. 1,500,000 What amount of restricted cash should General Corporation report as current assets? $2,422,500 $1,722,500 Ⓒ$4,222,500 $3,522,500
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On December 31, 2019, Riverbed Inc. borrowed $3,660,000 at 13% payable annually to finance the construction of a new building. In 2020, the company made the following expenditures related to this building: March 1, $439,200; June 1, $732,000; July 1, $1,830,000; December 1, $1,830,000. The building was completed in February 2021. Additional information is provided as follows. 1. Other debt outstanding 10-year, 14% bond, December 31, 2013, interest payable annually $4,880,000 6-year, 11% note, dated December 31, 2017, interest payable annually $1,952,000 2. March 1, 2020, expenditure included land costs of $183,000 3. Interest revenue earned in 2020 $59,780 Prepare the journal entry to record the capitalization of interest and the recognition of interest expense, if any, at December 31, 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the…
The following transactions pertain to the general borrowings made during 2021 by Owshi Company in connection with the construction of the company’s new warehouse: • 8% bank loan- $2,400,000 • 6% short-term note- $1,600,000 • 8% long-term note- $2,000,000 The construction started on January 1, 2021 and the warehouse was completed on December 31, 2021. Expenditures on the warehouse were as follows: • January 1- $400,000 • March 31- $1,000,000 • June 30- $1,200,000 • September 30- $1,000,000 • December 31- $400,000 How much is the capitalizable borrowing cost of Owshi Company?
Isko Company had the following general borrowings during 2021 which were used to finance the construction of the entity's new building. Principal 2,800,000 Borrowing Cost 280,000 10% bank loan 10% short-term note 1,600,000 160,000 2,000,000 6,400,000 The construction began on January 1, 2021 and the building was completed on December 31, 2021. In the first phase of the construction, there were idle funds which the entity invested and earned interest 12% long-term loan 240,000 680,000 income of P62,500. Expenditures on the building were made as follows: January 1 March 31 400,000 1,000,000 June 30 1,200,000 September 30 1,000,000 December 31 400,000 What is the amount of capitalizable borrowing cost? (Use 3 decimal places for capitalization rate.)
The following selected transactions relate to liabilities of Chicago Glass Corporation for 2024. Chicago's fiscal year ends on December 31. On January 15, Chicago received $7,400 from Henry Construction toward the purchase of $70,000 of plate glass to be delivered on February 6. On February 3, Chicago received $7,100 of refundable deposits relating to containers used to transport glass components. On February 6, Chicago delivered the plate glass to Henry Construction and received the balance of the purchase price. First quarter credit sales totaled $740,000. The state sales tax rate is 4% and the local sales tax rate is 2%. Required: Prepare journal entries for the above transactions. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
Culver Inc. has a fiscal year ending April 30. On May 1, 2023, Culver borrowed $10 million at 11% to finance construction of its own building. Repayments of the loan are to begin the month after the building's completion. During the year ended April 30, 2024, expenditures for the partially completed structure totalled $7 million. These expenditures were incurred evenly throughout the year. Interest that was earned on the part of the loan that was not expended amounted to $482,000 for the year. For situation 3, how much should be shown as capitalized borrowing costs on Culver's financial statements at April 30, 2024? (If an answer is zero, please enter O. Do not leave any fields blank.) Capitalized borrowing $
On December 31, 2019, Pronghorn Inc. borrowed $4,140,000 at 13% payable annually to finance the construction of a new building. In 2020, the company made the following expenditures related to this building: March 1, $496,800; June 1, $828,000; July 1, $2,070,000; December 1, $2,070,000. The building was completed in February 2021. Additional information is provided as follows. 1. Other debt outstanding 10-year, 14% bond, December 31, 2013, interest payable annually $5,520,000 6-year, 11% note, dated December 31, 2017, interest payable annually $2,208,000 2. March 1, 2020, expenditure included land costs of $207,000 3. Interest revenue earned in 2020 $67,620 (a) Determine the amount of interest to be capitalized in 2020 in relation to the construction of the building. The amount of interest %24

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