Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN: 9781337788281
Author: James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher: Cengage Learning
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Question
Chapter 9, Problem 1P
1.
To determine
Prepare necessary
2.
To determine
Show the effect of given transaction in the balance sheet of Company B as on December 31, 2019.
3.
To determine
Calculate the current ratio for the year ended 2019 by assuming that Company B current assets were $1,200,000 and its
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Accounts Payable and Cash Discounts Byrd Company had the following transactions during 2019 and 2020:
On December 24,2019, a computer was purchased on account from Computers International for $60,000. Terms of the sale were 2/10, n/30.
Byrd calculated that to forgo the discount for the computer would be the equivalent of paying 36% interest annually for the extra 20 days. Therefore, Byrd went to First Local Bank and signed a $ 60,000, 30-day note at 12% in order to take advantage of the discount terms. This transaction took place on December 29, 2019.(The account payable was paid on January 2,2020, and the note was paid at maturity. Assume a 360- day year.)
On December 30,2019, Byrd declared a $2.00 cash dividend to the common shareholders. Ten thousand shares were outstanding on this date.The dividend is to be paid on January 5, 2020.
Required:
Prepare the journal entries for Byrd for both 2019 and 2020. Assume that the net price method is used to account for the credit terms.
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Max Corp. sold goods for $36,000 on July 17, 2020, and accepted a 12%, 90-day note. On
August 1, the note was sold to a bank at a 15% discount rate.
Required:
a. Compute the proceeds. Assume a 360-day year.
$
b. If the maker dishonored the note at maturity, prepare the entry for Max Corp. assuming $75
of bank protest fees. If an amount box does not require an entry, leave it blank.
The financial statements of Bavarian Sausage Works (BSW) dated December 31, 2020, show $50,000 for "Note receivable." You learn
that the company provided $50,000 cash to a customer (a new chain of hot dog stands) in exchange for a promissory note. The note was
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$56,000 due on January 1, 2020. The hot dog chain has had numerous delays obtaining the required licences to operate on street
corners. Consequently, on January 1, 2020, the chain and BSW renegotiated the promissory note so that the $56,000 in principal and
interest would come due on January 1, 2022. Aside from the initial recording of the note receivable on January 1, 2019, BSW has not
recorded any other journal entries relating to this note.
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Provide the necessary journal entries to correct BSW's accounts in 2019 and 2020.
Chapter 9 Solutions
Intermediate Accounting: Reporting And Analysis
Ch. 9 - Prob. 1GICh. 9 - Prob. 2GICh. 9 - List the three characteristics of a liability....Ch. 9 - Prob. 4GICh. 9 - Prob. 5GICh. 9 - Prob. 6GICh. 9 - Prob. 7GICh. 9 - Prob. 8GICh. 9 - How does materiality affect the accounting for...Ch. 9 - Distinguish between an interest-bearing note and a...
Ch. 9 - Prob. 11GICh. 9 - How should long-term debt that is callable by a...Ch. 9 - Prob. 13GICh. 9 - Prob. 14GICh. 9 - Prob. 15GICh. 9 - Prob. 16GICh. 9 - Prob. 17GICh. 9 - Prob. 18GICh. 9 - Prob. 19GICh. 9 - Prob. 20GICh. 9 - Prob. 21GICh. 9 - Prob. 22GICh. 9 - Prob. 23GICh. 9 - Prob. 24GICh. 9 - Prob. 25GICh. 9 - Prob. 26GICh. 9 - Prob. 27GICh. 9 - Prob. 28GICh. 9 - The balance in Ashwood Companys accounts payable...Ch. 9 - On September 1, 2019, a company borrowed cash and...Ch. 9 - When a company receives a deposit from a customer...Ch. 9 - Bronson Apparel Inc. operates a retail store and...Ch. 9 - Prob. 5MCCh. 9 - Prob. 6MCCh. 9 - Prob. 7MCCh. 9 - Prob. 8MCCh. 9 - Prob. 9MCCh. 9 - Prob. 10MCCh. 9 - Rescue Sequences LLC purchased inventory by...Ch. 9 - Use the same information in RE9-1 except that the...Ch. 9 - Cee Co.s fiscal year begins April 1. At the...Ch. 9 - Prob. 4RECh. 9 - Prob. 5RECh. 9 - Smith Company is required to charge customers an...Ch. 9 - Wallace Corporation summarizes the following...Ch. 9 - Borat Company gives annual bonuses after the end...Ch. 9 - Prob. 9RECh. 9 - Prob. 10RECh. 9 - After years of experience, Dilcort Company...Ch. 9 - Prob. 1ECh. 9 - Notes Payable On December 1, 2019, Insto Photo...Ch. 9 - Non-Interest-Bearing Notes Payable On November 16,...Ch. 9 - Discounting of Notes Payable On October 30, 2019,...Ch. 9 - Disclosure of Debt On May 1, 2019, Ramden Company...Ch. 9 - Short-Term Debt Expected to Be Refinanced On...Ch. 9 - Short-Term Debt Expected to Be Refinanced On...Ch. 9 - Refundable Deposits Party Warehouse Inc. rents a...Ch. 9 - Prob. 9ECh. 9 - Property Taxes Family Practice Associates has an...Ch. 9 - Prob. 11ECh. 9 - Prob. 12ECh. 9 - Prob. 13ECh. 9 - Prob. 14ECh. 9 - Prob. 15ECh. 9 - Prob. 16ECh. 9 - Prob. 17ECh. 9 - Prob. 18ECh. 9 - Prob. 19ECh. 9 - Prob. 20ECh. 9 - Cash Rebates On January 1, 2020, Fro-Yo Inc. began...Ch. 9 - Prob. 22ECh. 9 - Prob. 1PCh. 9 - Notes Payable and Effective Interest On November...Ch. 9 - Trade Note Transactions Adjusto Corporation (which...Ch. 9 - Prob. 4PCh. 9 - Short-Term Debt Expected to Be Refinanced On...Ch. 9 - Non-Interest-Bearing Note Payable: Present Value...Ch. 9 - Prob. 7PCh. 9 - Prob. 8PCh. 9 - Payroll and Payroll Taxes Bailey Dry Cleaners has...Ch. 9 - Bonus Obligation and Income Tax Expense James...Ch. 9 - Prob. 11PCh. 9 - Contingencies Fallon Company, a toy manufacturer...Ch. 9 - Prob. 13PCh. 9 - Assurance-Type Warranty Clean-All Inc. sells...Ch. 9 - Prob. 15PCh. 9 - Premium Obligation Yummy Cereal Company is...Ch. 9 - Comprehensive Selected transactions of Lizard Lick...Ch. 9 - Comprehensive Selected transactions of Shadrach...Ch. 9 - Prob. 1CCh. 9 - Prob. 2CCh. 9 - Prob. 3CCh. 9 - Pending Damage Suit Disclosure On December 15,...Ch. 9 - Various Contingency Issues Skinner Company has the...Ch. 9 - Prob. 6CCh. 9 - Prob. 7CCh. 9 - Prob. 8CCh. 9 - Prob. 10C
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