Bill Darby started Darby Company on January 1, Year 1. The company experienced the following events during its first year of operation: Earned $16,200 of cash revenue. Borrowed $12,000 cash from the bank. Adjusted the accounting records to recognize accrued interest expense on the bank note. The note, issued on September 1, Year 1, had a one-year term and an 8 percent annual interest rate. Required a. What is the amount of interest payable at December 31, Year 1? b. What is the amount of interest expense in Year 1? c. What is the amount of interest paid in Year 1? d. Use a horizontal statements model to show how each event affects the balance sheet, income statement, and statement of cash flows. Indicate whether the event increases (I) or decreases (D) each element of the financial statements. In the Statement of Cash Flows column, classify the cash flows as operating activities (OA), investing activities (IA) or financing activities (FA). Columns for events that have no effect on any of the elements should be left blank. The first transaction has been recorded as an example.

Answer:

Please see below and attached

Explanation:

a. What is the amount of interest payable at December 31, year 1

= $12,000 × 8% × 4/12

= $320

b. What is the amount of interest expense in year 1.

= $12,000 × 8% × 4/12

= $320

c. What is the amount of interest paid in year 1.

The amount of cash paid for interest is $0. This is because it will be made at the time of maturity in year 2.

D. Use a horizontal statements model to show how each event affects the balance sheet, income statement and statement of cash flows.

• Please find attached solution to this question.

Accounting for Operating Activities in a New Business (the Accounting Cycle)

Penny’s Pool Service & Supply, Inc. (PPSS) had the following transactions related to operating the business in its first year’s busiest quarter ended September 30, 2013:

a. Placed and paid for $2,600 in advertisements with several area newspapers (including the online versions), all of which ran in the newspapers during the quarter.

b. Cleaned pools for customers for $19,200, receiving $16,000 in cash with the rest owed by customers who will pay when billed in October.

c. Paid Pool Corporation, Inc., a pool supply wholesaler, $10,600 for inventory received by PPSS in May.

d. As an incentive to maintain customer loyalty, PPSS offered customers a discount for prepaying next year’s pool cleaning service. PPSS received $10,000 from customers who took advantage of the discount.

e. Paid the office receptionist $4,500, with $1,500 owed from work in the prior quarter and the rest from work in the current quarter. Last quarter’s amount was recorded as an expense and a liability Wages Payable.

f. Had the company van repaired, paying $310 to the mechanic.

g. Paid $220 for phone, water, and electric utilities used during the quarter.

h. Received $75 cash in interest earned during the current quarter on short-term investments.

i. Received a property tax bill for $600 for use of the land and building in the quarter; the bill will be paid next quarter.

j. Paid $2,400 for the next quarter’s insurance coverage.

Required:

1. For each of the events, prepare journal entries, checking that debits equal credits.

2. Based only on these quarterly transactions, prepare a classified income statement (with income from operations determined separately from other items) for the quarter ended September 30, 2013.

3. Calculate the net profit margin ratio at September 30, 2013 (using income before taxes in place of net income). What does this ratio indicate about the ability of PPSS to control operations?

Panamint Systems Corporation is estimating activity costs associated with producing disk drives, tapes drives, and wire drives. The indirect labor can be traced to four separate activity pools. The budgeted activity cost and activity base data by product are provided below. Activity Cost Activity Base Procurement $363,300 Number of purchase orders Scheduling 231,800 Number of production orders Materials handling 407,300 Number of moves Product development 774,600 Number of engineering changes Production 1,427,500 Machine hours Number of Number of Number of Number of Machine Number Purchase Production Moves Engineering Hours of Orders Orders Changes Units Disk drives 4200 380 1450 13 2400 2200Tape drives 1700 125 610 4 9900 3700Wire drives 12800 720 3800 21 12000 2600 The activity rate for the procurement activity cost pool is:___________. a. $20.42
b. $73.48
c. $60.98
d. $183.67

This is the trial balance of Sandhill Co. on September 30. SANDHILL CO. Trial Balance September 30, 2022 Debit Credit Cash $23,640 Accounts Receivable 7,040 Supplies 4,670 Equipment 10,570 Accounts Payable $9,240 Unearned Service Revenue 3,670 Common Stock 19,440 Retained Earnings 13,570 $45,920 $45,920 The October transactions were as follows. Oct. 5 Received $1,380 in cash from customers for accounts receivable due. 10 Billed customers for services performed $5,300. 15 Paid employee salaries $1,130. 17 Performed $570 of services in exchange for cash. 20 Paid $1,990 to creditors for accounts payable due. 29 Paid a $310 cash dividend. 31 Paid utilities $460. Prepare a general ledger using T-accounts. Enter the opening balances in the ledger accounts as of October 1. CashAccounts Receivable SuppliesEquipmentAccounts PayableUnearned Service RevenueCommon StockRetained EarningsJournalize the transactions.Date Account Titles and Explanation Debit CreditPost to the ledger accounts. Cash
10/1 Bal. 23,400Accounts Receivable
10/1 Bal. 6,800
Supplies
10/1 Bal. 4,300
Equipment
10/1 Bal. 10,200
Accounts Payable
10/1 Bal. 9,000
Unearned Service Revenue
10/1 Bal. 3,300
Common Stock 10/1 Bal. 19,200
Retained Earnings
10/1 13,200
Dividends
Service Revenue
Salaries and Wages Expense
Utilities Expense
Prepare a trial balance on October 31, 2014.
SOLIS COMPANY
Trial BalanceOctober 31, 2014
Debit Credit

Flint Enterprises had the following cost and production information for April: Units Produced 20,000 Unit Sales Price $ 170 Manufacturing Cost Per Unit Direct Material $ 30 Direct Labor $ 15 Variable Manufacturing Overhead $ 13 Fixed Manufacturing Overhead ($500,000/20,000) = $ 25 Full Manufacturing Cost Per Unit $ 83 Nonmanufacturing Costs Variable Selling Expenses $ 77,000 Fixed General and Administrative Costs $ 100,000 Inventory increased by 3,000 units during April. What is Flint Enterprise's income under variable costing?

Usage rate is Multiple Choice the percentage of total possible users divided by the total number of consumers who actually use a product or service. the number of times a customer uses or recommends a product or service annually. quantity consumed or patronage (store visits) during a specific period. the maximum number of times a customer has used a product or service historically. the profits a firm earns from customers who consume a particular product or service.

ohnstone Company is facing several decisions regarding investing and financing activities. Address each decision independently. (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.) 1. On June 30, 2021, the Johnstone Company purchased equipment from Genovese Corp. Johnstone agreed to pay Genovese $10,000 on the purchase date and the balance in five annual installments of $8,000 on each June 30 beginning June 30, 2022. Assuming that an interest rate of 10% properly reflects the time value of money in this situation, at what amount should Johnstone value the equipment

On the last day of December 2016, Camreyâs Trucks entered into a transaction that resulted in a receipt of $216,000 cash in advance related to services that will be provided during January 2017. During December of 2016, the company also performed $128,000 of services which were neither billed nor paid. Prior to December adjustments and before these two transactions were recorded, the companyâs trial balance showed service revenue of $1,165,470 at December 31, 2016. There are no other prepaid services yet to be delivered, and during the month all outstanding accounts receivable from prior months were collected.If Camrey's trucks makes the appropirate adjusting entry, how much will service revenue will be reflected on the december 31, 2016 income statement?If Camrey's Trucks makes the appropriate adjusting entry, how much will be reported on the December 31, 2016 Balance sheet as unearned revenue?If Camrey's turcks make the appropriate adjusting entry, how much will be reported on the December 31, 2017 Balance sheet as accounts receivable?

On February 5, King Corporation paid $1,600,000 for all the issued and outstanding common stock of Princess, Inc., in a transaction properly accounted for as an acquisition. The book values and fair values of Princess's assets and liabilities on February 5 were as follows: Book Value Fair Value Cash $ 160,000 $160,000 Receivables (net) 180,000 180,000 Inventory 315,000 300,000 Plant and equipment (net) 820,000 920,000 Liabilities (350,000) (350,000) Net assets $1,125,000 $1,210,000 What is the amount of goodwill resulting from the business combination? A. $400,000 B. $475,000. C. $85,000. D. $390,000.

p Marine International manufactures an aquarium pump and is trying to decide whether to produce the filter system in-house or sign an outsourcing contract with Bayfront Manufacturing to make the filter system. Marine’s expertise is producing the pumps themselves but they are considering producing the filter systems also. To establish a filter system production area at Marine International, the fixed cost is $300,000 per year and the company estimates their variable cost of production in-house at $12.25 per filter system. If Marine outsources the production of the filter system to Bayfront, Bayfront will charge Marine $30 per filter system. Should Marine International outsource the production of the filter system to Bayfront if Marine sells 25,000 pumps a year?

Hughes purchased a new Lincoln Continental automobile from Al Greene Inc., an authorized new car dealership. On the day of the sale, Hughes made a cash down payment and signed a purchase contract and an application for the title certificate. The understanding was that Hughes would take immediate possession of the car and return in a few days for new-car preparation and the installation of a CB radio. On the way home from the dealer, Hughes wrecked the car. The certificate of title had not yet been issued by the state. The buyer, Hughes, claimed that title had not yet passed because the title certificate had not yet been issued. Who must bear the loss? [Hughes v. Al Greene, Inc., 418 N.E.2d 1355 (Ohio) ]

g If Billingham knows that it can sell the​ XC-750 to another firm for $2.17 million in two​ years, what kind of real option would that​ provide? ​(Select the best​ choice.) A. The decreased production will also require decreased inventory. B. This provides Billingham the option to abandon the investment. C. The firm can recover the feasibility study cost. D. Billingham will no longer depreciate the machine.

Dudley Transport Company divides its operations into four divisions. A recent income statement for its West Division follows. DUDLEY TRANSPORT COMPANY West Division Income Statement for Year 3 Revenue $ 300,000 Salaries for drivers (210,000 ) Fuel expenses (30,000 ) Insurance (42,000 ) Division-level facility-sustaining costs (24,000 ) Companywide facility-sustaining costs (78,000 ) Net loss $ (84,000 ) Required By how much would companywide income increase or decrease if West Division is eliminated

How are consumer demand and business-to-business demand of goods and services related?

Terrence smiles at his customers, helps his coworkers, and stays late when needed. What personal skill does Terrence demonstrate?

A. Attire
B. Collaboration
C. Human resources
D. Positive attitude

South Sea Baubles has the following (incomplete) balance sheet and income statement. BALANCE SHEET AT END OF YEAR (Figures in $ millions) Assets 2015 2016 Liabilities and Shareholders' Equity 2015 2016 Current assets $ 105 $ 215 Current liabilities $ 80 $ 105 Net fixed assets 950 1,050 Long-term debt 675 900 INCOME STATEMENT, 2016 (Figures in $ millions) Revenue $ 2,025 Cost of goods sold 1,105 Depreciation 425 Interest expense 255 a&b. What is shareholders’ equity in 2015 and 2016? (Enter your answers in millions.) c&d. What is net working capital in 2015 and 2016? (Enter your answers in millions.) e. What are taxes paid in 2016? Assume the firm pays taxes equal to 35% of taxable income. (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.) f. What is cash provided by operations during 2016? (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.) g. Net fixed assets increased from $950 million to $1,050 million during 2016. What must have been South Sea’s gross investment in fixed assets during 2016? (Enter your answer in millions.)

Weir Company (a fictional company) uses straight-line depreciation for its property, plant, and equipment, which, stated at cost, consisted of the following: December 31, 20X1 20X0 Land $ 25,000 $ 25,000 Buildings 195,000 195,000 Machinery and equipment 695,000 650,000 915,000 870,000 Less accumulated depreciation (400,000 ) (370,000 ) $ 515,000 $ 500,000 Weir’s depreciation expenses for 20X1 and 20X0 were $55,000 and $50,000, respectively. Required: What amount was debited to accumulated depreciation during 20X1 because of property, plant, and equipment retirements?

Robin’s capital statement reveals that he made an additional capital investment of 25,000.
His drawings during the year were 50,000. His share of the net loss for the year was 10,000.
His ending capital balance was 200,000.
What was Robin’s beginning capital balance?

If you have a bank account whose principal = $1000, and your bank compounds the interest twice a year at an interest rate of 5%, how much money do you have in your account at the year's end?

In the fictional country of Dirian the economics statistics department has been busy calculating the price index for a basket of goods from 2013 to 2017. January 2013 is the standardized price index, at 100, for a basket of consumer goods in the country. The price index increased in 2014 to 104.7, in 2015 to 109.3, in 2016 to 113.1, and in 2017 it increased to 119.2. You have been called to the country to help establish the rate of inflation for those years. What are the inflation rates in Dirian for 2014, 2015, 2016, and 2017

Way Cool produces two different models of air conditioners. The company produces mechanical systems in their components department. The mechanical systems are combined with the housing assembly in its finishing department. The activities, costs, and drivers associated with these two manufacturing processes and the production support process follow.Process Activity Overhead Cost Driver QuantityComponents Changeover $ 500,000 Number of batches 800 Machining 279,000 Machine hours 6,000 Setups 225,000 Number of setups 120 $1,004,000 Finishing Welding $ 180,300 Welding hours 3,000 Inspecting 210,000 Number of inspections 700 Rework 75,000 Rework orders 300 $ 465,300 Support Purchasing $ 135,000 Purchase orders 450 Providing space 32,000 Number of units 5,000 Providing utilities 65,000 Number of units 5,000 $ 232,000 Additional production information concerning its two product lines follows. Model 145 Model 212Units produced 1,500 3,500Welding hours 800 2,200Batches 400 400Number of inspections 400 300Machine hours 1,800 4,200Setups 60 60Rework orders 160 140Purchase orders 300 150a. Determine departmental overhead rates and compute the overhead cost per unit for each product line. Base your overhead assignment for the components department on machine hours. Use welding hours to assign overhead costs to the finishing department. Assign costs to the support department based on the number of purchase orders.b. Determine the total cost per unit for each product line if the direct labor and direct materials costs per unit are $250 for Model 145 and $180 for Model 212.c. Assum if the market price for Model 145 is $820 and the market price for Model 212 is $480, determine the profit or loss per unit for each model.

On January 1, 2016, Phoenix Co. acquired 100 percent of the outstanding voting shares of Sedona Inc. for $784,000 cash. At January 1, 2016, Sedona’s net assets had a total carrying amount of $548,800. Equipment (eight-year remaining life) was undervalued on Sedona’s financial records by $95,000. Any remaining excess fair over book value was attributed to a customer list developed by Sedona (four-year remaining life), but not recorded on its books. Phoenix applies the equity method to account for its investment in Sedona. Each year since the acquisition, Sedona has declared a $34,000 dividend. Sedona recorded net income of $113,000 in 2016 and $124,100 in 2017.

Selected account balances from the two companies’ individual records were as follows:

Phoenix Sedona
2018 Revenues $ 648,000 $ 335,000
2018 Expenses 412,000 234,000
2018 Income from Sedona 54,075
Retained earnings 12/31/18 347,075 236,500
What is consolidated net income for Phoenix and Sedona for 2018?

What is Phoenix’s consolidated retained earnings balance at December 31, 2018?

On its December 31, 2018, consolidated balance sheet, what amount should Phoenix report for Sedona’s customer list?

You run a school in Florida. Fixed monthly cost is $5,644.00 for rent and utilities, $6,057.00 is spent in salaries and $1,616.00 in insurance. Also every student adds up to $90.00 per month in stationary, food etc. You charge $647.00 per month from every student now.You are considering moving the school to another neighborhood where the rent and utilities will increase to $10,636.00, salaries to $6,878.00 and insurance to $2,230.00 per month. Variable cost per student will increase up to $185.00 per month. However you can charge $1,167.00 per student. At what point will you be indifferent between your current mode of operation and the new option

Palmona Co. establishes a $140 petty cash fund on January 1. On January 8, the fund shows $29 in cash along with receipts for the following expenditures: postage, $46; transportation-in, $14; delivery expenses, $16; and miscellaneous expenses, $35. Palmona uses the perpetual system in accounting for merchandise inventory. Prepare journal entries to (1) establish the fund on January 1, (2) reimburse it on January 8, and (3) both reimburse the fund and increase it to $190 on January 8, assuming no entry in part 2. Hint: Make two separate entries for part 3.

Lyle Company maintains a petty cash fund for small expenditures. These transactions occurred during the month of August.
Aug. 1 Established the petty cash fund by writing a check on Westown Bank for $226. 15 Replenished the petty cash fund by writing a check for $188. On this date, the fund consisted of $38 in cash and these petty cash receipts: freight-out $61.40, entertainment expense $23.00, postage expense $20.70 and miscellaneous expense $80.11. 16 Increased the amount of the petty cash fund to $426 by writing a check for $200. 31 Replenished the petty cash fund by writing a check for $296. On this date, the fund consisted of $130 in cash and these petty cash receipts: postage expense $132.00, entertainment expense $129.40, and freight-out $33.40.
1.) Journalize the petty cash transactions.
2.) Post to the Petty Cash account

If you have a bank account whose principal = $1000, and your bank compounds the interest twice a year at an interest rate of 5%, how much money do you have in your account at the year's end?

You want to invest an amount of money today and receive back twice that amount in the future. You expect to earn 8 percent interest. Approximately how long must you wait for your investment to double in value

In Draco Corporation’s first year of business, the following transactions affected its equity accounts. Issued 6,400 shares of $2 par value common stock for $42. It authorized 20,000 shares. Issued 1,600 shares of 12%, $10 par value preferred stock for $47. It authorized 3,000 shares. Reacquired 320 shares of common stock for $54 each. Retained earnings is impacted by reported net income of $74,000 and cash dividends of $27,000. Prepare the stockholders’ equity section of Draco’s balance sheet as of December 31. (Amounts to be deducted should be indicated by a minus sign.)

Cezanne Industries is planning on purchasing a new piece of equipment that will increase the quality of its production. It hopes the increased quality will generate more sales. The​ company's contribution margin ratio is 50​%, and its current breakeven point is $600,000 in sales revenue. If the​ company's fixed expenses increase by $30,000 due to the​ equipment, what will its new breakeven point be​ (in sales​ revenue)? If Cezanne ​Industries' fixed expenses increase by $30,000 due to the​ equipment, what will its new breakeven point be​ (in sales​ revenue)? Begin by identifying the general formula to compute the breakeven sales in dollars. ( Fixed expenses + Operating income ) ÷ Contribution margin ratio = Breakeven sales in dollars Cezanne will now have to generate of sales revenue to break even.

Now, consider the situation in which Olivia wants to earn a return of 3.00%, but the bond being considered for purchase offers a coupon rate of 6.00%. Again, assume that the bond pays semiannual interest payments and has three years to maturity. If you round the bonds intrinsic value to the nearest whole dollar, then its intrinsic value of (rounded to the nearest whole dollar) is its par value, so that the bond is

Which type of retailer offers a wide choice of products and high-quality service?
A.
specialty store
B.
off-price retailer
C.
department store
D.
convenience store