Exercise 5-6 and Comparative Analysis

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Exercise 5-6

On May 11, York Co. accepts delivery of $38,000 of merchandise it purchases for resale from Troy Corporation.  With the merchandise is an invoice dated May 11, with terms of 3/10, n/90, FOB shipping point.  The goods cost Troy $25, 460.  When the goods are delivered, York pays $520 to Express Shipping for delivery charges on the merchandise.  On May 12, York returns $2,000 of goods to Troy, who receives them one day later and restores them to inventory.  The returned goods had cost Troy $1,393.  On May 20, York mails a check to Troy Corporation for the amount owed.  Troy receives it the following day.  (Both York and Troy use a perpetual inventory system.)

1. Prepare Journal entries that York Co. records for these transactions.

2. Prepare Journal entries that Troy Corporation records for these transactions. 

Issuance of Common Stocks - Journal Entry

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A corporate issued 300 shares of its $5.00 par value common stock in payment of a $1,800 charge from its accountant for assistance in filing its charter with the state. The entry to record this transaction will include:

A) A $1,800 credit to Common stock

B.) A $1,500 debit to Organizational expenses

C.) A $300 credit to contributed capital in Excess of Par Value, Common stock.

D. A $1,800 debit to Legal Expenses

E. A $1,800 credit to cash

4.3 – Consolidation at End of First Year

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4.3 – Consolidation at End of First Year

Peak Entertainment acquired its 100-percent-owned subsidiary Saddlestone Inc. on January 1, 2011. In preparing to consolidate Peak and Saddlestone at December 31, 2011, you assemble the following information:

                Value of stock given up to acquire Saddlestone: $10,000,000.

                Direct merger costs: $250,000.

Saddlestone’s stockholder’s equity at acquisition: $7,200,000.

Fair value of earnings contingency agreement to be paid in cash: $300,000.

Fair value of previously unrecorded identifiable intangibles (5 year life): $2,000,000

Goodwill and identifiable intangibles are not impaired in 2011.

Saddlestone’s net income in 2011: $3,000,000.

Saddlestone’s dividends paid in 2011: $1,000,000.

Required

a.)      Prepare the 2011 journal entries made by Peak to record the acquisition and calculate and record the equity method income accrual, using the complete equity method.

b.)     Prepare the consolidation eliminating entries made at December 31, 2011.

Accounting: Exercise 15-1A -Protom Company

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Protom Company, which began operations in 2009, invests its idle cash in trading securities.  The following transactions are from its short-term investments in its trading securities.

2009

Jan. 20 Purchased 800 shares of Ford Motor Co. at $26 per share plus a $120 commission.

Feb.  9 Purchased 2,600 shares of Lucent at $39 per share plus a $578 commission.

Oct. 12 Purchased 800 shares of Z-Seven at $7.50 per share plus a $200 commission.

2010

Apr. 15 Sold 800 shares of Ford Motor Co. at $30 per share less a $300 commission.

July  5 Sold 800 shares of Z-Seven at $11 per share less a $103 commission

July. 22 Purchased 2,000 shares of Hunt Corp. at $39 per share plus a $444 commission.

Aug. 19 Purchased 1,600 shares of Donna Karan at $19.50 per share plus a $290 commission.

Journal Entries

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26. Data relating to the balances of various accounts affected by
     adjusting or closing entries appear below. (The entries which caused
     the changes in the balances are not given.)  You are asked to supply
     the missing journal entries which would logically account for the
     changes in the account balances.
     1. Interest receivable at 1/1/99 was $900. During 1999 cash received
        from debtors for interest on outstanding notes receivable
        amounted to $5,200.  The 1999 income statement showed interest
        revenue in the amount of $4,900.  You are to provide the missing
        adjusting entry that must have been made, assuming reversing
        entries are not made.

Barkley Corp - Journal Entries

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Barkley Corp. obtained a trade name in January 2009, incurring legal costs of $15,000. The company amortizes the trade name over eight years. Barkley successfully defended its trade name in January 2010, incurring $4,900 in legal fees. At the beginning of 2011, based on new marketing research, Barkley determines that the fair value of the trade name is $12,000. Estimated total future cash flows from the trade name are $13,000 on January 4, 2011. Instructions: Prepare the necessary journal entries for the years ending December 31, 2009, 2010, and 2011. Show all computations.

Comprehensive Problem Chapters 1-5: Bearing, Inc. from Albretch Accounting Concepts and Applications 11th Edition

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Bearing, Inc.
Balance Sheet
December 31, 2011
Assets
Cash	22,100
Accounts receivable	27,000
Inventory	13,500
Supplies	600
Total assets		63,200
Liabilities and Stockholders' Equity
Accounts payable	17,000
Salaries payable	3,500
Income taxes payable	3,200
Total liabilities		23,700
Stockholders' equity
Capital stock (10,000 shares outstanding)	20,000
Retained earnings	19,500
Total stockholders' equity		39,500
Total liabilities and stockholders' equity		63,200

5-7 Village of Harris

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5-7 
The Village of Harris issued $5,000,000 in 6 percent general obligation, tax-supported bonds on July 1, 2008, at 101. A fiscal agent is not used. Resources for principal and interest payments are to come from the General Fund. Interest payment dates are December 31 and June 30. The first of 20 annual principal payments is to be made June 30, 2009. Harris has a calendar fiscal year. 
1. A capital projects fund transferred the premium ($50,000) to the debt service fund. 
2. On December 31, 2008, funds in the amount of $150,000 were received from the General Fund and the first interest payment was made. 
3. The books were closed for 2008. 
4. On June 30, 2009, funds in the amount of $350,000 were received from the General Fund, and the second interest payment was made along with the first principal payment ($250,000). 
5. On December 31, 2009, funds in the amount of $142,500 were received from the General Fund and the first interest payment was made. 
6. The books were closed for 2009. 
a. Prepare journal entries to record the events above in the debt service fund. 
b. Prepare a Statement of Revenues, Expenditures, and Changes in Fund Balance for the debt service fund for the year ended December 31, 2008.