Managerial Accounting: Creating Value in a Dynamic Business Environment
12th Edition
ISBN: 9781260417074
Author: HILTON, Ronald
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 4, Problem 15E
In each case below, fill in the missing amount.
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ACCOUNTING QUESTION
On January 1, 2025, XYZ Enterprises had the
following transactions:
1. The owner invested $50.000 in cash to
start the business.
2. Purchased office equipment for $12.000
on credit.
3. Paid $2,000 for January rent.
4. Provided services to a client and recived
$5,000 in cash.
5. Paid $3,000 to settle part of the office
equipment liability.
6. Received a utility bill for $600, to be paid
in February.
a) Record the journal entries for each of the
above transactions.
Carla Vista Leasing Company leases a new machine to Sandhill Corporation. The machine has a cost of $65,000 and fair value of
$94,500. Under the 3-year, non-cancelable contract, Sandhill will receive title to the machine at the end of the lease. The machine has
a 3-year useful life and no residual value. The lease was signed on January 1, 2025. Carla Vista expects to earn an 8% return on its
investment, and this implicit rate is known by Sandhill. The annual rentals are payable on each December 31, beginning December 31,
2025.
Click here to view factor tables.
(b).
Prepare an amortization schedule that would be suitable for both the lessor and the lessee and that covers all the years involved.
(For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answers to O decimal places e.g.
5,275.)
Interest (8%) Revenue/
Rent Receipt/Payment
Reduction of Principal
Expense
Receivable/Liability
(c)
Prepare the journal entry at commencement of the…
Assume that IBM leased equipment that was carried at a cost of $97,000 to Crane Company. The term of the lease is 5 years beginning
December 31, 2024, with equal rental payments of $30,200 beginning December 31, 2024. The fair value of the equipment at
commencement of the lease is $128,040. The equipment has a useful life of 5 years with no salvage value. The lease has an implicit
interest rate of 9%, no bargain purchase option, and no transfer of title. Collectibility of lease payments for IBM is probable.
Prepare IBM's December 31, 2024, journal entries at commencement of the lease. (List all debit entries before credit entries. Credit
account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the
account titles and enter O for the amounts. For calculation purposes, use 5 decimal places as displayed in the factor table provided and round
final answers to O decimal places e.g. 5,275.)
Click here to view…
Chapter 4 Solutions
Managerial Accounting: Creating Value in a Dynamic Business Environment
Ch. 4 - Explain the primary differences between job-order...Ch. 4 - List five types of manufacturing in which process...Ch. 4 - Prob. 3RQCh. 4 - What are the purposes of a product-costing system?Ch. 4 - Define the term equivalent unit and explain how...Ch. 4 - List and briefly describe the purpose of each of...Ch. 4 - Show how to prepare a journal entry to enter...Ch. 4 - Prob. 8RQCh. 4 - Prob. 9RQCh. 4 - Prob. 10RQ
Ch. 4 - How would the process-costing computations differ...Ch. 4 - Explain the concept of operation costing. How does...Ch. 4 - Prob. 13RQCh. 4 - In each case below, fill in the missing amount.Ch. 4 - Rainbow Glass Company manufactures decorative...Ch. 4 - Terra Energy Company refines a variety of...Ch. 4 - The Evanston plant of Fit-for-Life Foods...Ch. 4 - Idaho Lumber Company grows, harvests, and...Ch. 4 - Otsego Glass Company manufactures window glass for...Ch. 4 - Savannah Textiles Company manufactures a variety...Ch. 4 - The following data pertain to Tulsa Paperboard...Ch. 4 - The November production of MVPs Minnesota Division...Ch. 4 - Timing Technology, Inc. manufactures timing...Ch. 4 - Piscataway Plastics Company manufactures a highly...Ch. 4 - The following data pertain to the Vesuvius Tile...Ch. 4 - Triangle Fastener Corporation accumulates costs...Ch. 4 - Moravia Company processes and packages cream...Ch. 4 - Albany Company accumulates costs for its product...Ch. 4 - Goodson Corporation assembles various components...Ch. 4 - A-1 Products manufactures wooden furniture using...Ch. 4 - The following data pertain to the Hercules Tire...Ch. 4 - Scrooge and Zilch, a public accounting firm in...Ch. 4 - GroFast Company manufactures a high-quality...Ch. 4 - Plasto Corporation manufactures a variety of...Ch. 4 - (Contributed by Roland Minch.) Glass Glow Company...Ch. 4 - Orbital Industries of Canada, Inc. manufactures a...Ch. 4 - Laredo Leather Company manufactures high-quality...
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- Mary Leasing Company signs an agreement on January 1, 2025, to lease equipment to Crane Company. The following information relates to this agreement. 1. The term of the non-cancelable lease is 3 years with no renewal option. The equipment has an estimated economic life of 5 years. 2. The fair value of the asset at January 1, 2025, is $60,000. 3. The asset will revert to the lessor at the end of the lease term, at which time the asset is expected to have a residual value of $7,000, none of which is guaranteed. 4. The agreement requires equal annual rental payments of $18,633.17 to the lessor, beginning on January 1, 2025. 5. The lessee's incremental borrowing rate is 5%. The lessor's implicit rate is 4% and is unknown to the lessee. 6. Crane uses the straight-line depreciation method for all equipment. Click here to view factor tables. Prepare all of the journal entries for the lessee for 2025 to record the lease agreement, the lease payments, and all expenses related to this lease.…arrow_forwardOn December 31, 2025, Sunland Corporation leased a plane from Bridgeport Company for a seven-year period expiring December 31, 2032. Equal annual payments of $456000 are due on December 31 of each year, beginning with December 31, 2025. The lease is properly classified as a finance lease on Sunland's books. The present value at December 31, 2025 of the eight lease payments over the lease term discounted at 9% is $2751026. Assuming the first payment is made on time, the amount that should be reported by Sunland Corporation as the lease liability on its December 31, 2025 balance sheet is $2295026. $2751026. $2501579. ○ $2542619.arrow_forwardBlossom Company leases a machine from Blue Corp. under an agreement that meets the criteria to be a finance lease for Blossom. The six-year lease requires payment of $180000 at the beginning of each year, which includes $26000 per year for maintenance, insurance, and taxes. The incremental borrowing rate for the lessee is 11%; the lessor's implicit rate is 9% and is known by the lessee. The present value of an annuity due of 1 for six years at 11% is 4.69590. The present value of an annuity due of 1 for six years at 9% is 4.88965. Blossom should record the leased asset at ○ $880137. $845262. $753006. ○ $723169.arrow_forward
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