Question: Reese Corporation Partial Balance Sheet December

> On February 1, 2020, Swiss Travel Corp. issued $750,000 of 11%, eight-year bonds. Interest is to be paid quarterly. Calculate the issue price of the bonds if the market interest rate was: a. 6% b. 11% c. 13%

> On August 1, 2020, Billboard Inc. issued $520,000 of 10%, seven-year bonds. Interest is to be paid semiannually. Calculate the issue price of the bonds if the market interest rate was: a. 12% b. 10% c. 14%

> Purity Vegetable Corp. issued $200,000 of 6% bonds on November 1, 2020, at par value. The bonds were dated October 1, 2020, and pay interest each April 1 and October 1. Record the issue of the bonds on November 1, 2020.

> On March 1, 2020, JenStar Hydroponics Inc. issued at par an $80,000, 6%, three-year bond. Interest is to be paid quarterly beginning May 31, 2020. JenStar’s year-end is July 31. A partial payment schedule is shown below: a. Record the i

> Match the following terms and phrases by entering the letter of the phrase that best describes each term in the blank next to the term. Serial bonds Debentures Bond indenture Secured bonds Registered bonds Bearer bonds Convertible bonds a. Issuer rec

> a. Calculate the debt to equity ratio for 2019 and 2020, for the following three separate companies. b. Comment on whether the ratio for each has improved or weakened from a risk perspective.

> Curtis Ltd. issued $100,000 of 8% bonds at face value on October 1, 2020. Interest is paid each March 31 and September 30. If Curtis’s tax rate is 40%, what is the annual after-tax borrowing cost (a) in percentage terms and (b) in dollars?

> Explain the difference between an operating lease and a finance type lease for a lessor.

> Thunderbird Corporation has excess cash resulting from extremely successful operations. It has decided to invest this cash in debt and equity securities as follows to be held as non-strategic investments: On December 31, 2020, the fair values of the inve

> Calvin Corp. borrowed $80,000 from a bank and signed an installment note that calls for five annual payments of equal size, with the first payment due one year after the note was signed. Use Table 14A.2 or a calculator to calculate the size of the annual

> On January 1, 2020, the Pareto Company borrowed $80,000 in exchange for an interest-bearing note. The note plus interest compounded at an annual rate of 8% is due on December 31, 2022. Calculate the amount that Pareto will pay on the due date.

> On January 1, 2020, the $1,000,000 par value bonds of Sinclair Corporation with a carrying value of $950,000 are converted to 500,000 common shares. Journalize the conversion of the bonds.

> On July 1, 2020, Lester Shoes Ltd. exercises a $4,000 call option on its outstanding bonds, which have a carrying value of $206,000 and par value of $200,000. Lester exercises the call option immediately after the semiannual interest is paid on June 30,

> Henderson Armour Inc. issued a $652,000, 14% 10-year bond on October 1, 2020, for cash of $697,701. Interest is to be paid quarterly. The annual market rate of interest is 12.75%. Assume a year-end of February 28. A partial amortization schedule, using t

> Bonanza Graphics Inc. issued a $200,000, 8%, three-year bond on November 1, 2020, for cash of $194,792. Interest is to be paid quarterly. The annual market rate of interest is 9%. Assume a year-end of December 31. The amortization schedule, using the eff

> Dawson Limited issued 12%, 10-year bonds with a par value of $60,000 and semiannual interest payments. On the issue date, the annual market rate of interest for the bonds was 10%, and they sold for $67,478. The effective interest method is used to alloca

> Maier Investment Corporation issued $700,000 of 6%, six-year bonds for $735,902 on July 1, 2020, the day the bonds were dated. The market interest rate was 5%. Interest is paid semiannually beginning December 31, 2020. Maier uses the effective interest m

> Alberta Industries Ltd. issued 10%, 10-year bonds with a par value of $200,000 and semiannual interest payments. On the issue date, the annual market rate of interest for the bonds was 12%, and the selling price was $177,059. The effective interest meth

> A $15,000 bond with a contract interest rate of 6% was issued on March 1, 2020. Calculate the cash paid on the first interest payment date if interest is paid: a. annually b. semiannually c. quarterly d. monthly

> Huang Hardware Inc. had the following transactions involving non-strategic investments during 2020: Required 1. Prepare an amortization schedule for the Barker bond showing only 2020 and 2021. 2. Prepare journal entries to record the preceding transactio

> On January 1, Star Corp. had 50,000 common shares issued and outstanding. On April 1, it issued 4,000 additional shares, and on June 5 declared and distributed a two-for-one share split. Calculate Star’s weighted average outstanding shares for the year.

> On January 1, Harrell Corp. had 75,000 common shares issued and outstanding. On April 1, it issued 24,000 additional shares, and on June 1 declared and distributed a 20% share dividend. Calculate Harrell’s weighted average outstanding shares for the year

> On January 1, Harmon Corp. had 100,000 common shares outstanding. On February 1, Harmon Corp. issued 40,000 additional common shares. On June 1, another 80,000 common shares were issued. Calculate Harmon Corp.’s weighted-average shares outstanding. Round

> Bellevue Ltd. reported profit of $860,000 for its year ended December 31, 2020. Calculate earnings per share given the following additional information at December 31, 2020:

> Nelson Corp. earned profit of $450,000. The number of common shares outstanding all year long was 200,000 and preferred shareholders received a dividend totalling $10,000. Calculate the earnings per share for Nelson Corp.

> Outdoor Equipment Inc. had 180,000 common shares issued and outstanding as at December 31, 2020. The shares had been issued for $9.80 each. On September 12, 2021, Outdoor repurchased and retired 40,000 of these shares at $9.10 each, the first retirement

> On September 2, Garrett Corporation purchased and retired 2,000 of its own shares for $18,000. The shares had been issued at an average price of $5. Prepare the September 2 entry for the purchase and retirement of the shares (assuming this is the first r

> Vector Gaming Ltd. showed the following equity account balances on December 31, 2020: Common shares, 100,000 shares authorized; 28,000 shares issued and outstanding $476,000 Retained earnings 85,000 On January 2, 2021, Vector declared and distributed a 3

> Barton Inc. changed the method of calculating depreciation on its equipment from straight-line to double declining-balance during 2020. The cumulative effect of the change is an additional expense of $46,000 related to prior years. The tax benefit is $13

> Answer the questions about each of the following items related to a company’s activities for the year: a. After using an expected useful life of seven years and no residual value to depreciate its office equipment over the preceding three years, the comp

> On February 1, 2020, Fireside Corp. issued a $900,000, 5%, two-year bond. Interest is payable quarterly each May 1, August 1, November 1, and February 1. Required Part 1 a. Calculate the bond issue price assuming a market interest rate of 6% on the date

> Using the numbers to represent each section of a comprehensive income statement, identify where each of items (a) through (k) should be reported: 1. Continuing operations 2. Discontinued operations 3. Earnings per share a. Gain on sale of Division E b.

> On January 1, 2020, Winston Mining Corp. had 580,000 common shares issued and outstanding. On April 30, it issued an additional 220,000 shares, and on October 1 it repurchased and cancelled 100,000 shares. Calculate Winston’s weighted-average shares outs

> Information taken from Jamestown Corp.’s balance sheet as of April 1, 2020, follows: Common shares, 375,000 shares authorized, 150,000 shares issued and outstanding $1,102,500 Retained earnings 633,000 On April 1, Jamestown declares and distributes a 10%

> Each of these entries was recently recorded by a different corporation. Provide an explanation for the transaction described by each entry.

> On February 1, Excel Corporation issued 37,500 common shares for $252,440 cash. On February 12, an additional 47,000 common shares were issued for cash of $7.25 per share. Present the entries to record these transactions and calculate the average issue p

> Fisher Inc. began operations on January 1, 2020. During its first year, $750,000 of common shares were issued and a loss of $28,000 was realized. In 2021, Fisher’s second year of operations, an additional $125,000 of common shares were issued, profit of

> The Retained Earnings account for Callaho Inc. is shown below: 1. Calculate X. 2. What does X represent? 3. What caused the debit of $50,000?

> Benson Inc. had a credit balance in Retained Earnings on December 31, 2020, of $48,000. During 2021, Benson recorded profit of $146,000 and declared and paid dividends of $47,000. During 2022, the company recorded a loss of $15,000. No dividends were dec

> Vision HR Consulting began operations on January 1, 2020. Complete the following schedule with journal entries detailing the transactions during 2020 for Vision HR Consulting under two forms of organization: as a single proprietorship (owned by Ian Smith

> From the following list of selected accounts for Giant Inc., identify the equity accounts. Use “CC” for contributed capital, “RE” for retained earnings, and “X&acir

> Westgate Motor Homes Inc. issued bonds with a par value of $680,000 and a five-year life on January 1, 2020. The bonds pay interest on June 30 and December 31. The contract interest rate is 8%. The market interest rate was 9% on the original issue date.

> EveryWhere Development Co. showed the following selected PPE balances on January 31, 2020: Required: Prepare the entries to record the following disposals: 1. The van was sold on March 2, 2020, for cash of $17,920. It had been driven 4,500 kilometres fro

> Mogul Ltd., a ski boot manufacturer, showed the following amounts for its year just ended October 31, 2020. Prepare a multi-step income statement assuming a tax rate of 25%.

> Invisible Marketing Ventures had 186,000 shares outstanding on January 1, 2020, and issued an additional 24,000 shares during the year. The common shareholders’ equity was $5,841,000 at the end of the year. Calculate the average number of shares outstand

> Turnbull Company had the following information for 2019 and 2020 What is Turnbull’s rate of return on common shareholders’ equity for 2020?

> Velor Ltd., a patio gas heater company, showed the following adjusted information on August 31, 2020, its second year-end: a. Prepare the appropriate closing entries. b. Prepare a statement of changes in equity for the year ended August 31, 2020. No shar

> Morris Inc. showed the following adjusted information on November 30, 2020, its second year end: a. Prepare the appropriate closing entries. b. Prepare a statement of changes in equity for the year ended November 30, 2020. No shares were issued during th

> Statement of changes in equity, closing entries for a corporation—profit Peter Puck Inc. showed the following adjusted information on May 31, 2020, its second year-end: a. Prepare the appropriate closing entries. b. Prepare a statement

> The equity section of the Holden Ltd. balance sheet includes 75,000 shares of $0.40 cumulative preferred shares that had been issued for $375,000 and 200,000 common shares issued for a total of $720,000. Holden did not declare any dividends during the pr

> Prepare journal entries to record the following transactions for Desmond Corporation: Apr. 15: Declared a $48,000 cash dividend payable to common shareholders. June 30: Paid the dividend declared on April 15. Dec. 31: Closed the Cash Dividends account.

> On October 3, 2020, Synthetic Inc, a cell phone protector company, issued 4,000 of its preferred shares for cash of $15 each. On November 19 the company issued 3,400 preferred shares in exchange for land with a fair market value of $52,480. a. Prepare th

> Refer to the amortization schedule prepared in Problem 14-6B. Assume Lake Arrowhead Investors Inc. has a January 31 year-end. Required Part 1 Record the following entries: a. Issuance of the bonds on June 1, 2020 b. Payment of interest on December 1, 202

> Of the following statements, which are true for the corporation form of business? a. Capital often is more easily accumulated than with other forms of organization. b. It has a limited life. c. Owners have unlimited liability for corporate debts. d. It i

> On June 17, 2020, Bishop agrees to invest $30,000 into an online custom T-shirt print shop business for a 40% interest in total partnership equity. At the time Bishop is admitted, the existing partners, Pollard and Mission, each have a $30,000 capital ba

> Suppose on March 12, 2020, Kate agrees to pay Ramos and Bailey $12,000 each for a one-third interest in the existing Ramos–Bailey partnership. At the time Kate is admitted, each partner has a $30,000 capital balance. Prepare the journal entry to record K

> Ramos and Bailey have a frozen yogurt shop in Victoria, BC. They are equal partners, with $30,000 in each of their partnership capital accounts. Bailey’s sister Kate is admitted to the partnership on October 1, 2020, after paying $30,000 to the partnersh

> Jenn Smith and Mike Yang have a small business consulting partnership. They share profits and losses as detailed in their partnership agreement that gave Jenn a salary allowance of $115,000 and Mike $90,000 with any unallocated profit (loss) shared 3:2.

> Lisa Montgomery and Joel Chalmers established a coffee bean distribution business. Their partnership shared profits and losses based on an agreement that gave Lisa a salary allowance of $45,000 and Joel $10,000 with any unallocated profit (loss) shared e

> Bill Ace and Dennis Bud are partners in an urban restaurant called Salt. Profit for the year ended March 31, 2020, is $120,000. a. How much profit should be allocated to each partner assuming there is no partnership agreement? b. Prepare the entry to all

> Len Peters and Beau Silver form a partnership to operate a catering business, called A Catered Affair. Peters invests $20,000 cash and Silver invests $30,000 cash on March 1, 2020. Prepare the journal entry to record the establishment of the partnership.

> Stanley organized a limited partnership and is the only general partner. Hillier invested $20,000 in the partnership and was admitted as a limited partner with the understanding that he would receive 10% of the profits. After two unprofitable years, the

> Assume the same information as in QS 11-15 except that the Equipment was sold for $85,000 on April 1, 2020. Prepare the journal entry to record the final distribution of cash. Data from QS 11-15: Sam, Andrew, and Mary were partners in Gem Skateboard Com

> On June 1, 2020, Lake Arrowhead Investors Inc. issued a $570,000, 9%, three-year bond. Interest is to be paid semiannually beginning December 1, 2020. Required a. Calculate the issue price of the bond assuming a market interest rate of 10%. b. Using the

> Sam, Andrew, and Mary were partners in Gem Skateboard Company. The partners shared profits and losses 3:2:3, respectively. On April 1, 2020, the partnership showed the following account balances just prior to liquidation: Equipment was sold for $175,000.

> The partners in the Kingdom partnership have agreed that partner Jefferson may sell his $145,000 equity in the partnership to Riches, for which Riches will pay Jefferson $125,000. Present the partnership’s journal entry to record the sale on September 30

> Linda, Sue, and Darlene are partners in Designs Unlimited. Their capital balances are $150,000, $140,000, and $250,000, respectively, on March 15, 2020. They share profit and losses in the ratio of 2:2:2. Darlene retires on March 15, 2020, and has agreed

> Oliver, Peter, and Wendell are partners in NewTech Company, an R&D firm specializing in cloud storage. Their capital balances are $30,000, $22,000, and $15,000, respectively, on November 23, 2020. They share profit and losses in the ratio of 3:2:1. Peter

> Hector, Wilson, and Stuart are partners in What’s Your Beef?, a local vegan burger chain, with capital balances of $25,000, $40,000, and $35,000, respectively. Based on their partnership agreement, they share profit and losses equally. Stuart is retiring

> On April 21, 2020, Wilson agrees to invest $30,000 into Quest, a land development partnership in Niagara-on the-Lake, for a 20% interest in total partnership equity. At the time Wilson is admitted, the existing partners, Beacon and Metcalf, each have a $

> Bowen and Campbell are partners in operating a store. Without consulting Bowen, Campbell enters into a contract for the purchase of merchandise for the store. Bowen contends that he did not authorize the order and refuses to take delivery. The vendor sue

> On December 11, 2020, the Sydney Company borrowed $42,000 and signed a 60-day, 5.5% note payable. Calculate the accrued interest payable on December 31, 2020.

> Jackson Textiles had an outstanding account in the amount of $14,800 owing to Huang Manufacturing. On October 1, 2020, Huang agreed to convert Jackson’s account to an 8%, 45-day note having a face value of $14,800. Record Jackson’s entries on October 1,

> Laser Tag Palace has two employees and the payroll register showed the following information for the biweekly pay period ended March 23, 2020: Prepare the entry to record the payroll liability on March 23, 2020. Ignore employer’s contri

> On April 1, 2020, Shelter Bay Inc. has available for issue $900,000 bonds due in four years. Interest at the rate of 10% is to be paid quarterly. Calculate the issue price if the market interest rate is: a. 11% b. 10% c. 9% Part 2 On October 1, Shelter B

> On September 3, 2020, Reynolds Retailers, operating out of Nunavut, sold $14,700 of goods for cash with a cost of $12,380. Record Reynolds’s entries, including all appropriate sales taxes.

> Hinton Designers, located in Quebec, provided $7,300 of services on credit to a client on May 7, 2020. Record Hinton’s entry, including the appropriate GST and PST. (Hint: Refer to Exhibit 10.6 for PST rates.)

> Suppose Mink Makeup sells $5,600 of makeup (merchandise with a cost of $4,800) for cash on September 30. The sales tax law requires Mink to collect 13% harmonized sales tax on every dollar of merchandise sold. Record Mink’s entries for the $5,600 sale an

> MetroConcerts receives $2,000,000 in advance cash ticket sales for a four-date tour for Diana Krall. Record the advance ticket sales as a lump sum as of October 31, 2020. The concerts sold out and no additional ticket sales have been recorded. Record the

> On January 1, 2020, La Petite Macaron, a local French bakery, borrowed $84,000 from the bank. Interest is calculated at the rate of 4% and the term of the note is four years. Four equal annual payments will be made in the amount of $23,141 each December

> The following legal claims exist for the Doucet Advertising Agency. Classify the required accounting treatment for each legal situation as (a) a liability should be recorded, or (b) the legal claim need only be described in the notes to the financial sta

> During 2020, Victory Bubble Tea House recorded $36,000 in estimated income taxes on the last day of each month and made the payment on the 15th of the following month. On December 31, 2020, Victory’s year-end, it was determined that total income tax expe

> Wang Corp. estimates income tax expense to be $285,600 for the year 2020. Record estimated income tax for January on January 31, 2020, and the payment on February 1, 2020.

> On December 20, 2020, The Net Department Store sold a computer for $3,500 with a one-year warranty that covers parts and labour. Warranty expense was estimated at 2% of sales dollars. On March 2, 2021, the computer was taken in for repairs covered under

> Vision Wear’s product warranties state that defective glasses will be replaced free of charge for the life of the product. Vision Wear estimates that 2% of the pairs of glasses sold will require replacement. Each pair of glasses costs Vision Wear on aver

> Refer to the amortization schedule prepared in Problem 14-3B. Assume a January 31 year-end. Required Part 1 Record the following entries: a. Issuance of the bonds on September 1, 2020 b. Adjusting entry to accrue bond interest and premium amortization on

> Which of the following items should normally be classified as a current liability for Prairie Brewing Company? Prairie has a 15-month operating cycle. a. A note payable due in 18 months. b. Salaries payable. c. A payable that matures in two years. d. A n

> Flint Solar Energy showed the following information in its Property, Plant, and Equipment subledger regarding a machine. On September 1, 2020, the motor was replaced with a new one costing $60,000; it was purchased on account. The new motor had an estima

> Assume Barrick Gold Corporation purchased mineral rights for a gold mine in Peru on October 1, 2020, by paying cash of $5,000,000 and incurring a non-current note payable for the $30,000,000 balance. Barrick also paid $4,000,000 cash for water rights nee

> On January 4, 2020, Amber’s Boutique paid cash of $95,000 for a 10-year franchise. Prepare the entry to record the purchase of the franchise and the adjusting entry at December 31, 2020.

> On March 1, 2020, Wallace Company purchased a new machine with a suggested retail price of $123,000. The new machine was to replace an old machine that originally cost $90,000 and had $36,000 of accumulated depreciation at the time of the exchange. The r

> Dean Carpet Stores owned an automobile with a $15,000 cost that had $13,500 accumulated depreciation as of December 31, 2020. Its fair value on this date was $3,000. On the same day, Dean exchanged this auto for a computer with a fair value of $5,800. De

> Huang Furniture Company showed the following adjusted account balances on September 30, 2020: Prepare the entries to record the following on October 1, 2020: a. Equipment was sold for cash of $17,000. b. Machinery was sold for cash of $27,000. c. Deliver

> Phantom Company was preparing the annual financial statements and, as part of its year-end procedures, prepared the following alphabetized schedule based on adjusted values at March 31, 2020: What, if any, impairment losses need to be accounted for? Assu

> Class Act Catering Company had a deluxe, portable barbecue with a book value of $7,000 at its December 31, 2019, year-end. The barbecue had an estimated remaining useful life of five years and a $200 residual value. On January 3, 2020, a customized elect

> On January 1, 2020, Kaldex Company purchased for $35,720 equipment with an estimated useful life of eight years and an estimated residual value at the end of its life of $4,200. Early in January 2023, it was determined that the total estimated useful lif

> On September 1, 2020, Messner Corp. issued a $400,000, 15%, four-year bond. Interest is payable semiannually beginning March 1, 2021. Required a. Calculate the bond issue price assuming a market interest rate of 13.5% on the date of issue. b. Using the e

> AbeCo, a luggage manufacturing company, borrowed $75,000 from the bank to purchase a machine that was estimated to produce 120,000 suitcases; its expected residual value is $15,000. During 2020 and 2021, the machine produced 20,000 and 28,000 units, resp

> Refer to the information in QS 9-10. Assume the equipment is depreciated using the double-declining-balance method. Calculate depreciation for 2020 and 2021: a. To the nearest whole month b. Using the half-year convention Data from QS 9-10: Equipment wi

> Equipment with an estimated life of 10 years and no expected residual value was purchased on account for $60,000 on March 6, 2020. Assuming a year-end of December 31, calculate depreciation for 2020 and 2021 using the straight-line method: a. To the near