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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- An entity sells car's spare parts to ZZZ Car Repair during 2020. The entity offers rebates of 3% on purchases up to $30,000 and 4% on purchases above $30,000 if the customer's purchases for the year exceed $120,000. In the past, ZZZ normally purchases more than $100,000 in parts during a calendar year. On March 15, 2020, ZZz Car Repair purchased $38,000 of parts. The journal entry to record the sale includes a a. debit to Accounts Receivable for $36,860. b. credit to Sales Revenue for $36,480. O c. credit to Sales Revenue for $36,860. d. debit to Accounts Receivable for $38,000.On October 1, 2021, Sputnik V Company leased from Gamaleya Company a set of furniture, which Sputnik will use for a period of 12 months. On this date, Sputnik paid the annual rental of P36,000 plus P3,000 incentive to Gamaleya as an inducement to grant the rental for a considerably short period of time. Sputnik reports on a calendar-year basis. How much is the rent expense reported in Sputnik V Company’s profit or loss for the year ended December 31, 2021?Cullumber Resellers Ltd. (CRL) sells gently used and refurbished appliances. The company provides a three-month warranty that is included in the cost of the appliance. Claims under the warranties vary from replacing defective parts to providing customers with new appliances if repairs cannot be made. During 2024, the estimated cost related to the three-month warranties was $41,040, of which $27,000 had been incurred before year end ($20,520 on replacement appliances and $6,480 for parts). For an additional charge of $162, CRL also offers extended warranty coverage for three years on its refurbished appliances. This amount is expected to cover the costs associated with the extended warranties. During 2024, CRL sold 540 three-year warranty plans. The costs incurred during the year for repairs and replacements under these plans amounted to $16,200. Based on experience, the company estimates that its total warranty costs over the three-year coverage period will be $48,600, which it expects…
- Carla Vista Resellers Ltd. (CVRL) sells gently used and refurbished appliances. The company provides a three-month warranty that is included in the cost of the appliance. Claims under the warranties vary from replacing defective parts to providing customers with new appliances if repairs cannot be made. During 2024, the estimated cost related to the three-month warranties was $36,480, of which $24,000 had been incurred before year end ($18,240 on replacement appliances and $5,760 for parts). For an additional charge of $144, CVRL also offers extended warranty coverage for three years on its refurbished appliances. This amount is expected to cover the costs associated with the extended warranties. During 2024, CVRL sold 480 three-year warranty plans. The costs incurred during the year for repairs and replacements under these plans amounted to $14,400. Based on experience, the company estimates that its total warranty costs over the three-year coverage period will be $43,200, which it…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?During 2020, 1,000 units were sold at P9,000 each. that requires the entity to replace defective parts and Sony Company sells stereos under a 2-year warranty contract provide free labor on all repairs. hat requires the entity to replace defective parts and During 2020, 1,000 units were sold at P9,000 each. In 2021, the entity sold an additional 900 units at P9,250 each. Sales occurred on the last day of the year for both 2020 and 2021. Based on past experience, the estimated 2-year warranty costs are P200 for parts and P250 for labor per unit. It is also estimated that 40% of the warranty expenditures will occur in the first year and 60% in the second year. Actual warranty expenditures were: 2021 2022 Stereos sold in 2020 Stereos sold in 2021 180,000 280,000 190,000 Required: 1. Prepare journal entries for 2020, 2021 and 2022. 2. Analyze the estimated warranty liability to prove the reasonable accuracy of the balance on December 31, 2022. 3. Prepare the adjustment of the estimated…
- (Determine Transaction Price) Taylor Marina has 300 available slips that rent for $800 per season. Payments must be made in full by the start of the boating season, April 1, 2018. 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, 2018. Under a new policy, if payment for 2019 season slips is made by December 31, 2018, a 5% discount is allowed. If payment for 2020 season slips is made by December 31, 2018, renters get a 20% discount (this promotion hopefully will provide cash flow for major dock repairs).On December 31, 2017, all 300 slips for the 2018 season were rented at full price. On December 31, 2018, 200 slips were reserved and paid for the 2019 boating season, and 60 slips were reserved and paid for the 2020 boating season.Instructions(a) Prepare the appropriate journal entries for December 31, 2017, and December 31, 2018.(b) Assume the marina operator is unsophisticated in business.…Coa Corporation recently needed to find temporary inventory storage space when transitioning from an old factory to a newly built factory within the same city. Coa signed a 10-month lease on a warehouse requiring monthly payments in advance of $14,500. (a) What is the nature of the lease assuming Coa follows IFRS? (b) Prepare the entry for the first payment on May 1, 2023. (c) Would your entry differ if Coa followed ASPE?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.
- Kraft Company made the following journal entry in late 2025 for rent received on property it leases to Danford Corporation. Cash 150,000 Unearned Rent Revenue 150,000 The payment represents rent for the years 2026 and 2027, the period covered by the lease. Kraft is a cash basis taxpayer. Kraft has income tax payable of $230,000 at the end of 2025, and its tax rate is 25%. What amount of income tax expense should Kraft Company report at the end of 2025? 3) _______ A) $267,500 B) $211,250 C) $192,500 D) $117,500Sheridan 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…On July 31, 2020, Stewart Security was awarded a contract for $102,000 to provide 3,000 hours of overnight security services to the city of Kaysville for the next 2 years. The full contract price was paid to Stewart on July 31. As of December 31, 2020, Stewart had spent 950 hours providing security services. What amount will Stewart report as a liability related to this contract on December 31, 2020?
