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- Required Information While James Craig and his former classmate Paul Dolittle both studied accounting at school, they ended up pursuing careers in professional cake decorating. Their company, Good to Eat (GTE), specializes in custom-sculpted cakes for weddings, birthdays, and other celebrations. James and Paul formed the business at the beginning of 2023, and each contributed $140,000 in exchange for a 50 percent ownership Interest. GTE also borrowed $560,000 from a local bank. Both James and Paul had to personally guarantee the loan. Both owners provide significant services for the business. The following information pertains to GTE's 2023 activities: • GTE uses the cash method of accounting (for both book and tax purposes) and reports Income on a calendar-year basis. • GTE received $900,000 of sales revenue and reported $420,000 of cost of goods sold (it did not have any ending Inventory). • GTE paid $75,000 compensation to James, $75,000 compensation to Paul, and $85,000 of…Rita is keen to grow her business and provided some information on two transactlons that she undertook during the year. The first was the purchase of an individual asset for the business called a Techpager. wwym ww The initial cost of the machine itself was $32,000 with several extra required fees and charges. Rita also decided to include a number of optional extras in the purchase. Installation of Techpager $1500 Transportation and Shipping Costs $600 Extended Warranty/Service Program $300 per year. This is an optional service offered by the company that covers all maintenance and repairs costs and is paid annually in advance Sorting and Stapling Unit $1200 (required to allow Rita to produce the booklets for her business) Custom Painting $400 (Rita does not need to have this done but has decided she wants the machine to match her office décor) Insurance $500 per year payable in advance Prepare a general Journal entry to record the individual of the purchase business called Techpager.Early in its fiscal year ending December 31, 2024, San Antonio Outfitters finalized plans to expand operations. The first stage was completed on March 28 with the purchase of a tract of land on the outskirts of the city. The land and existing building were purchased by paying $380,000 immediately and signing a noninterest-bearing note requiring the company to pay $780,000 on March 28, 2026. An interest rate of 8% properly reflects the time value of money for this type of loan agreement. Title search, insurance, and other closing costs totaling $38,000 were paid at closing. At the end of April, the old building was demolished at a cost of $88,000, and an additional $68,000 was paid to clear and grade the land. Construction of a new building began on May 1 and was completed on October 29. Construction expenditures were as follows: May 1 $ 3,900,000 July 30 2,400,000 September 1 1,980,000 October 1 2,880,000 San Antonio borrowed $6,300,000 at 8% on May 1 to help finance…
- In June 2021, Wanda Fonda organized a corporation to provide drone photography services. Thecompany, called Drone Queen Inc., began operations immediately. Transactions during the month ofJune were as follows:June 1 The corporation issued 60,000 shares of capital stock to Wanda Fonda in exchange for$60,000 cash.June 2 Purchased a plane from Utility Aircraft for $220,000. Made a $40,000 cash downpayment and issued a note payable for the remaining balance.June 4 Paid Piarco Airport $2,500 to rent office and hangar space for the month.June 15 Billed customers $8,320 for aerial photographs taken during the first half of June.June 15 Paid $5,880 in salaries earned by employees during the first half of June.June 18 Paid Henry's Hangar $1,890 for maintenance and repair services on the companyplane.June 25 Collected $4,910 of the amounts billed to customers on June 15.June 30 Billed customers $16,450 for aerial photographs taken during the second half of themonth.June 30 Paid $6,000 in…During 2021, Stork Associates paid $85,800 for a 20-seat skybox at Veterans Stadium for eight professional football games. Regular seats to these games range from $50 to $150 each. At one game, an employee of Stork entertained 18 clients. Stork furnished food and beverages for the event (provided by a local restaurant) at a cost of $1,800. The game was preceded by a bona fide business discussion, and all expenses are adequately substantiated. How much may Stork deduct for this event?$fill in the blank 1Munirah Bhd was incorporated in 2015. In order to expand its business operation, Munirah Bhd made the following transactions related to property, plart andequipment in the year 2021: 1. To construct a new factory, Munirah Bhd purchased a piece of land with a building for RM700,000(land RM5 50,000 and buildingRM150,000). Munirah Bhd paid a real estate broker's commission of RM28,000, legal fees for title investigation of the land of RM5,000 and property tax for the land of RMI0,000. Shortly after purchasing the land, Munirah Bhd demolished the old building and incurred a total cost of RM20,000. Munirah Bhd received RM4,800 from the selling of the scrap from the old building An additional cost of RM3,000 was paid to grade the land. After grading the land, Munirah Bhd installed fences around the property at the cost of RM17,000. Then, to construct a new factory, Munirah Bhd paid RMS,200 of the architect's fees, and the payment to the building contractor was RM200,000. The insurance policy…
- Garrett Corporation began operations in 2021. To maintain its accounting records, Garrett entered into a two-year agreement with Accurite Company. The agreement specifies that Garrett will pay $85,000 to Accurite immediately, and in return, Accurite will make its accounting software accessible via the Internet to Garrett and maintain all infrastructure necessary to run the software and store records. At any time, Garrett Corporation can freely remove its records and run the software on its own hardware or that of another accounting services company. In addition to the cost of the agreement, Garrett incurred $15,000 early in the year devising a plan for its accounting software needs, $25,000 for customizing its own computers for integration with Accurite’s software, and $20,000 after the software was implemented to train its employees. Determine the initial amount that Garrett should capitalize related to the software development costs.Mr. Pans owns and operates several retail auto parts and accessories outlets. Management is now considering the possibility of terminating the operation of the Accessories Store and leasing the facilities to another retailer. The monthly results of the Accessories Store operations are as follows: Sales P940,000 · Operating expenses directly identifiable with the outlet: Cost of goods sold, etc P890,000 Depreciation 80,000 If operation of Accessories Store is terminated, Mr. Pans can rent-out the facilities for P60,000 a month to a non-competing business. Determine whether the company should continue operations or terminate the Accessories Store and rent-out the facilities. How much is the advantage of better option? 1. Coniinue the Accessories Store – advantage of P 50,000 2. Terminate operation of Accessories Store - advantage of P50,000 3. Continue the Accessories Store - advantage of P10,000 | 4. Terminate operation of Accessories Store - advantage of P10,000Duakwanta is a listed company which manufactures personal computers (PCs). It is preparing its financial statements for the year ended 31 May 2019 and would like to seek advice on the following accounting issue: During the year, Duakwanta issued a debt finance to the financial markets to fund its expansion plans. This was a very significant debt issue for Duakwanta. After the issue, the market price of each block of debt on the market fell by approximately 10%. The financial press has stated that the reason for the fall is due to an increase in the company's credit risk, as the market players are worried by the size of the interest payments on Duakwanta's operating cash flows. Required: Advise the directors as to the financial reporting issues arising from the above scenario and explain the appropriate treatment in Duakwanta’s financial statements.
- The following information relates to Question 2 and 3: On July 1, 2018, Gene Parmesan's Genes Company paid $16,500,000 cash and signed a $7,500,000 note payable (due in 3 months) to acquire in-process R&D from another company. They are planning to use the assets acquired for research and development in their GMB (Genetically Modified Broccoli) division. The assets can be used for other research and development projects as well. They plan to use the assets purchased for 10 years and believe they can sell them for $1,500,000 at the end of those 10 years. From July 1 through Dec. 31, 2018, Genes Co. spends $6,000,000 (palid in cash) on scientist salaries and broccoll plants to use in the purchased R&D project. Genes Co. also amortizes any capitalized assets on a straight-line basis. REQUIRED: Write the journal entry related to the acquisition that Genes Co. should record on July 1.2018.Chuckwagon Company went into business on July 1, 2020. During 2020, Chuckwagon had the following transactions: July 1 - Issued 150 shares of stock to stockholders for a total of $15,000 in cash. July 1 - Borrowed $15,000 from the bank. Chuckwagon will pay nothing until July 1, 2025, and then the company will pay $21,000. July 15 - Bought land for $10,000 in cash. Aug. 1 - Bought equipment for $12,000 in cash. The equipment has an expected useful life of four years and no salvage value. Sep. 1- Paid $1,200 for six months of insurance. Sep. 30 - Bought inventory for $8,000, one-half in cash and one-half on account. Oct. 8 - Sold half of the inventory for $7,000 in cash. Nov. 25 - Sold one-half of land for $4,500 in cash. Dec. 1 - Received $1,000 for work that will be performed in January, 2021. Dec. 16 - Sold $1,000 of inventory for $2,000 on account. Dec. 30 - Received a utility bill for $300, which will be paid in January 2021. • Dec. 31 - Paid a dividend of $200 in cash. How much did…Joy's House of Cheese (stocks Cougar Cheese) purchases a tract of land and an existing building for $940,000. The company plans to remove the old building and construct a new building on the site in a few months. In addition to the purchase price, Joy's pays closing costs, including title insurance of $2,400. The company also pays $12,800 in property taxes, which includes $8,400 of back taxes (unpaid taxes from previous years) paid by Joy's on behalf of the seller and $4,400 due for the current fiscal year after the purchase date. Shortly after closing, the company pays a contractor $47,000 to tear down the old building and remove it from the site. Joy is able to sell salvaged materials from the old building for $3,800 and pays an additional $10,400 to level the land to make it ready for use. Required: Determine the amount Joy's should record as the cost of the land. (Amounts to be deducted should be indicated by a minus sign.) Total cost of the land $
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