On January 1, 2022, Elite Rides Corporation started a business renting out luxury vehicles for special events. Current regulations require the business to purchase a permit that will expire after three years. The cost of the permit is $18,000. Calculate the amount of permit expense to be included in the income statement for the 6 months ended June 30, 2022.
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- The Bigelow Health Club sells annual memberships to a prestigious club. The terms of the contracts are that customers are required to pay an up-front non-refundable fee of $200, and then a monthly fee of $50, with the first month due immediately, for the year for a total cost of $800 to join the club. On February 1 2024 Bigelow sold 10 memberships. Prepare the journal entry for the sale on Feb 1 and the adjusting entry on Feb 29, 2024 to report revenue. Explain what revenue Bigelow will report in the month, and over the course of the year. Assume that 100% of the members of the Bigelow club renew their memberships for 3 years. How does that change the revenue reported in February?On January 1, 2024, Poplar Fabricators Corporation agreed to grant its employees two weeks of vacation each year, with the stipulation that vacations earned each year can be taken the following year. For the year ended December 31, 2024, Poplar Fabricators' employees each earned an average of $800 per week Nine hundred vacation weeks earned in 2024 were not taken during 2024 Required: 1. Prepare the appropriate adjusting entry for vacations earned but not taken in 2024. 2. Suppose that, by the time vacations actually are taken in 2025, salary rates for employees have risen by an average of 5 percent from their 2024 level. Also, assume salaries earned in 2025 (including vacations earned and taken in 2025) were $31 million. Prepare a journal entry that summarizes 2025 salaries and the payment for 2024 vacations taken in 2025.Oriole Company sublet a portion of its warehouse for five years at an annual rental of $71400, beginning on May 1, 2025. The tenant, Elizabeth Brown, paid one year's rent in advance, which Oriole recorded as a credit to Unearned Rent Revenue. Oriole reports on a calendar-year basis. The adjustment on December 31, 2025 for Oriole should be
- On January 1, 2021, Byner Company purchased a used tractor. Byner paid $5,000 down and signed a noninterestbearing note requiring $25,000 to be paid on December 31, 2023. The fair value of the tractor is not determinable. An interest rate of 10% properly reflects the time value of money for this type of loan agreement. The company’s fiscal year-end is December 31. Required:1. Prepare the journal entry to record the acquisition of the tractor. Round computations to the nearest dollar.2. How much interest expense will the company include in its 2021 and 2022 income statements for this note?3. What is the amount of the liability the company will report in its 2021 and 2022 balance sheets for this note?Sheridan Marina has 200 available slips that rent for $800 per season. Payments must be made in full by the start of the boating season, April 1, 2024. The boating season ends October 31, and the marina has a December 31 year end. Slips for future seasons may be reserved if paid for by December 31, 2024. Under a new policy, if payment for 2025 season slips is made by December 31, 2024, a 4% discount is granted. If payment for 2026 season slips is made by December 31, 2024, renters get a 17% discount. (Sheridan hopes this promotion will provide cash flow for major dock repairs.) On December 31, 2023, all 200 slips for the 2024 season were rented at full price. On December 31, 2024, 150 slips were reserved and paid for the 2025 boating season, and 70 slips were reserved and paid for the 2026 boating season. (a) Prepare the appropriate journal entries for December 31, 2023, and December 31, 2024. (Credit account titles are automatically indented when the amount is entered. Do not indent…Please answer the following question: Beaver Construction purchases new equipment for $45,360 cash on April 1, 2024. At the time of purchase, the equipment is expected to be used in operations for seven years (84 months) and have no resale or scrap value at the end. Beaver depreciates equipment evenly over the 84 months ($540/month). Required: 1.&2. Record the necessary entries in the Journal Entry Worksheet below. 3. Calculate the year-end adjusted balances of Accumulated Depreciation and Depreciation Expense (assuming the balance of Accumulated Depreciation at the beginning of 2024 is $0).
- On August 1, 2019, Pereira Corporation has sold 1,600 Wiglows to Mendez Company at $450 each. Mendez also purchased a 1-year service-type warranty on all the Wiglows for $12 per unit. In 2019, Pereira incurred warranty costs of $9,200. Costs for 2020 were $7,000. Required: 1. Prepare the journal entries for the preceding transactions. 2. Show how Pereira would report the items on the December 31, 2019, balance sheet.Capricorn Company must determine the December 31, 2019 year-end accruals for advertising and rent expenses. A P2,000 advertising bill was received January 6, 2020. It related to costs of P1,500 for advertisements in December 2019 issues and P500 for advertisements in January 2, 2020 issues of the newspaper. A store lease, effective December 15, 2018, calls for fixed rent of P4,800 per month payable 1 month from the effective date and monthly thereafter. In addition, rent equal to 5% of net sales over P1,200,000 per calendar year is payable on January 31 of the following year. Net sales for 2019 were P2,200,000. In its December 31, 2019 statement of financial position, Capricorn should report accrued liabilities of: P51,500 P53,900 P56,800 P56,300A company purchases equipment for $40,000 on Aug 1, 2019. It estimates that the equipment will have a salvage value of 4,000 and its useful life will be 9 years. It is the company’s policy to charge a full years depreciation on the year of purchase and no depreciation charge on the year of disposal. Assuming that the company's accounting year ends on December 31 of each year, what will be the Depreciation Expense for the years 2020 assuming straight-line depreciation?
- Martinez Factory provides a 2-year warranty with one of its products which was first sold in 2025. Martinez sold $909,800 of products subject to the warranty. Martinez expects $124,480 of warranty costs over the next 2 years. In that year, Martinez spent $73,090 servicing warranty claims. Prepare Martinez's journal entry to record the sales (ignore cost of goods sold) and the December 31 adjusting entry, assuming the expenditures are inventory costs. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically Indented when amount is entered. Do not Indent manually. List all debit entries before credit entries.) Date During 2025 12/31/25 Account Titles and Explanation (To record payment for warranty costs incurred) (To record sales) Debit Credit 20On October 1, 2019, Grahams WeedFeed Inc. signs a contract to maintain the grounds for BigData Corp. The contract ends on March 31, 2020, and has a monthly payment of 3,200. The contract does not include any stipulations for additional periods. On June 1, Grahams WeedFeed and BigData sign a new 12-month contract that is retroactive to April 1, 2020. The monthly fee for the new contract is 4,000 per month and is also retroactive to April 1, 2020. During April and May of 2020, while the new contract was being negotiated, Grahams Weed Feed continued to maintain the grounds, and BigData continued to pay 3,200 per month. BigData was satisfied with Grahams WeedFeeds performance, and the only issue during negotiations was the monthly fee. Required: Determine if a valid contract exists between Grahams WeedFeed and BigData during April and May 2020.Cee Co.s fiscal year begins April 1. At the beginning of its fiscal year, Cee Co. estimates that it will owe 17,400 in property taxes for the year. On June 1, its property taxes are assessed at 17,000, which it pays immediately. Prepare the related journal entries for April 1, May 1, and June 1. Then compute the monthly property tax expense that Cee Co. would record during June through March.
