On July 1, 2020, Sweet Inc. made two sales.

1. It sold land having a fair value of $909,890 in exchange for a 4-year zero-interest-bearing promissory note in the face amount of $1,431,725. The land is carried on Sweet's books at a cost of $594,900.
2. It rendered services in exchange for a 3%, 8-year promissory note having a face value of $409,660 (interest payable annually).

Sweet Inc. recently had to pay 8% interest for money that it borrowed from British National Bank. The customers in these two transactions have credit ratings that require them to borrow money at 12% interest.

Required:
Record the two journal entries that should be recorded by Sweet Inc. for the sales transactions above that took place on July 1, 2020.

Answer:

1.

DR Note Receivable                                       $1,431,725

      CR  Land                                                                       $594,900

             Gain on Disposal of land                                      $‭314,990‬

              Discount on Notes Receivable                           $521,835

Working

Gain on disposal = 909,890 - 594,900 = $‭314,990‬

Discount on Notes receivable = 1,431,725 - 909,890 = $521,835

2.

First find present value of the 8-year promissory note;

= 409,660 / ( 1 + 12%)⁸

= $165,454.80

Annual payment of 3% = 3% * 409,660 = $‭12,289.8‬0

Paid every year for 8 years, the present value at 12% is;

= ‭12,289.8‬0 * Present value interest factor for annuity, 12%, 8 years

= ‭12,289.8‬0 * 4.9676

= $‭61,050.81

Present value of the note (revenue for services rendered) = ‭61,050.81 + 165,454.80 = $‭226,505.61‬

Discount on note receivable = 409,660 - ‭226,505.61‬ = $‭183,154.39‬

DR Notes Receivable                                        $409,660

     CR Service Revenue                                                        $‭226,505.61‬

            Discount on Notes Receivable                                 $$‭183,154.39‬

Tri-coat Paints has a current market value of $41 per share with earnings of $3.64. What is the present value of its growth opportunities (PVGO) if the required return is 9%?

Rajiv lives in Houston and runs a business that sells pianos. In an average year, he receives $851,000 from selling pianos. Of this sales revenue, he must pay the manufacturer a wholesale cost of $476,000; he also pays wages and utility bills totaling $281,000. He owns his showroom; if he chooses to rent it out, he will receive $71,000 in rent per year. Assume that the value of this showroom does not depreciate over the year. Also, if Rajiv does not operate this piano business, he can work as an accountant, receive an annual salary of $34,000 with no additional monetary costs, and rent out his showroom at the $71,000 per year rate. No other costs are incurred in running this piano business.

a. What are Rajiv's explicit costs of selling pianos?

1. The salary Rajiv could earn if he worked in an accounting firm.
2. The wages and unitilty bills that Rajiv pays.
3. The wholesale cost for pianos that Rajiv pays the manufacturer.
4. The rental income Rajiv could receive per year if he chose to rent his showroom out.

b. What is the accounting profit of Rajiv's piano business?

1. $780,000
2. $65,000
3. $40,000
4. $-40,000 ($40,000 accounting loss)
5. $110,000

c. What is the economic profit of Rajiv's piano business?

a. $65,000
b. $40,000
c. $780,000
d. $-40,000 ($40,000 economic loss)
e. $110,000

Which of the following accounts is a temporaryâ account? A. Accounts Receivable B. Supplies C. Withdrawals D. Cash

Part 1 of 4
Which of the following is an example of a firm's resources?
5
points
Multiple Choice
eBook
PepsiCo's Super Bowl commercials
Print
References
Apple's iPhone manufacturing facility
Amazon's acquisition of Whole Foods
Boeing's supply chain for the 787 Dreamliner aircraft
Deloitte's human resource management procedures

Which of the following is a type of liability?
A. A revenue stream
B. A liquid asset
C. Accounts payable
D. Accounts receivable

Radon Corporation manufactured 37,500 units during March. The following fixed overhead data pertain to March: Actual Static Budget Production 37,500 units 34,000 units Machine-hours 10,375 hours 10,200 hours Fixed overhead costs for March $213,200 $204,000 What is the fixed overhead production-volume variance?

10. The strategy that will not help reduce selection bias is: a. development of an explicit case definition b. the use of incentives to encourage high participation c. a standardized protocol for structured interviews d. enrollment of all cases in a defined time and region

The point where marginal cost curve crosses the ____________ and ___________ curve is where the profit maximizing quantity demanded (dropping down to the X-axis) and price (going up to the demand curve or average revenue curve and over to the Y-axis) are determined.

Lerchman Corp sponsors a defined-benefit pension plan for its employees. The company's actuary has provided the following information for the year ended December 31, 2022:

Projected benefit obligation $730,000
Fair value of plan assets 860,000
Service cost 240,000
Interest on projected benefit obligation 24,000
Amortization of prior service cost 60,000
Expected and actual return on plan assets 82,500

The plan paid benefits of $150,000. The market-related asset value equals the fair value of plan assets. No contributions have been made for 2022 pension cost. In its December 31, 2022 balance sheet, Lerchman should report a pension asset / liability of

a. Pension liability of $730,000
b. Pension liability of $545,000
c. Pension asset of $130,000
d. Pension asset of $860,000

Credit Losses Based on Accounts Receivable At December 31, Schuler Company had a balance of $364,900 in its Accounts Receivable account and a credit balance of $4,200 in the Allowance for Doubtful Accounts account. The accounts receivable T-account consisted of $370,000 in debit balances and $5,100 in credit balances. The company aged its accounts as follows:
Current $303,000
0-60 days past due 42,000
61-180 days past due 17,000
Over 180 days past due 8,000
$370,000
In the past, the company has experienced credit losses as follows: 1% of current balances, 5% of balances 0-60 days past due, 15% of balances 61-180 days past due, and 40% of balances over six months past due. The company bases its allowance for doubtful accounts on an aging analysis of accounts receivable.
Required:
a. Prepare the adjusting entry to record the allowance for doubtful accounts for the year.
b. Show how Accounts Receivable (including the credit balances) and the Allowance for Doubtful Accounts would appear on the December 31 balance sheet.

Blue Enterprises reported cost of goods sold for 2020 of $1,307,500 and retained earnings of $5,383,000 at December 31, 2020. Blue later discovered that its ending inventories at December 31, 2019 and 2020, were overstated by $118,630 and $36,930, respectively. Determine the corrected amounts for 2020 cost of goods sold and December 31, 2020, retained earnings.

John Smith, a U.S. based businessman, paid the equivalent of $20 to an official of the country of Murundi to expedite the overnight delivery of critical documents. When questioned, John Smith claimed this was not a bribe. The $20 is an example of_______

a. a bribe.
b. an under-the-table payment.
c. a violation of the Foreign corrupt practices act.
d. a grease payment.
e. an inappropriate payment.

If a company buys televisions from a manufacturer and then sells them to department stores, it is most probably a _____. A. retailerB. producerC. consumerD.wholesalerE. marketer

Hodgkiss Mfg., Inc., is currently operating at only 91 percent of fixed asset capacity. Current sales are $715,000. Fixed assets are $520,000 and sales are projected to grow to $790,000. How much in new fixed assets are required to support this growth in sales?

When people have insurance against a certain event, the notion that those people are less likely to guard against that event occurring is called a _____________________ .a. riskb. hazard riskc. moral hazardd. moral risk

If the sales volume decreases by 25%, the variable cost per unit increases by 15%, and all other factors remain the same, net operating income will: (Do not round intermediate calculations.)
decrease by $3,125.
increase by $20,625.
decrease by $15,000.
decrease by $31,875.
Sales 3,000 Units
Sales Price $70
Variable Cost $50
Fixed Cost $25,000

What are closing entries and why are they important in accounting?​

How Many Pints of Blackberries?

The pleasure you get from each pint of freshly picked blackberries is $2.00. It takes you 12 minutes to pick the first pint, and each additional pint takes an additional 2 minutes (14 minutes for the second pint, 16 minutes for the third pint, and so on). The opportunity cost of your time is $0.10 per minute.

a. How many pints of blackberries should you pick? Illustrate with a complete graph.

A company manufactures various-sized plastic bottles for its medicinal product. The manufacturing cost for small bottles is $75 per unit (100 bottles), including fixed costs of $28 per unit. A proposal is offered to purchase small bottles from an outside source for $40 per unit, plus $4 per unit for freight.
a. Prepare a differential analysis dated July 31 to determine whether the company should make _______ or buy __________ the bottles, assuming fixed costs are unaffected by the decision.
b. Determine whether the company should make ___________ or buy ________ the bottles.

Luther Industries has 25 million shares outstanding trading at $18 per share. In addition, Luther has $150 million in outstanding debt. Suppose Luther's equity cost of capital is 13%, its debt cost of capital is 7%, and the corporate tax rate is 40%. Luther's unlevered cost of capital is closest to:_______A) 11.5%B) 10.8%C) 9.8%D) 13.0%

On May 2, you receive your bank statement showing a balance of $1,641.18. Your checkbook shows a balance of $1,427.15. Outstanding checks are $167.31, $245.66, and $302.56. The account earned $62.11. Deposit in transit amount to $555.61, and there is a service charge of $8.00. Calculate the reconciled balance. CHECKBOOK BALANCE STATEMENT BALANCE Add: Interest Earned & Other Credits Add: Deposits in Transit SUBTOTAL SUBTOTAL Deduct: Services Charges & Other Debits Deduct: Outstanding Checks ADJUSTED CHECKBOOK BALANCE ADJUSTED STATEMENT BALANCE

Why is "inventory turns" an important metric?

The most recent price activity in this chart is a quadruple top breakout. The box size is $0.50 and the reversal size is three boxes. What is the price objective for the breakout using the horizontal count method?a. $19.00b. $21.50c. $12.50d. $22.00

At July 31, Oriole Company has this bank information: cash balance per bank $8,085, outstanding checks $755, deposits in transit $1,390 and a bank service charge $25. Determine the adjusted cash balance per bank at July 31.

Broussard Skateboard's sales are expected to increase by 25% from $8.6 million in 2016 to $10.75 million in 2017. Its assets totaled $4 million at the end of 2016. Broussard is already at full capacity, so its assets must grow at the same rate as projected sales. At the end of 2016, current liabilities were $1.4 million, consisting of $450,000 of accounts payable, $500,000 of notes payable, and $450,000 of accruals. The after-tax profit margin is forecasted to be 4%, and the forecasted payout ratio is 75%. Use the AFN equation to forecast Broussard's additional funds needed for the coming year.

Societies choose what share of their resources to devote to consumption and what share to devote to investment. Some of these decisions involve private spending; others involve government spending.
For each form of private spending, indicate whether it represents consumption or investment.
Private Spending Consumption Investment
Laundromats buying washing machines
People buying houses
People buying newspapers
People buying food
For each form of government spending, indicate whether it represents consumption or investment.
Government Spending Consumption Investment
Payment for public safety employees
Building hospitals
Building roads
Buying military equipment

Petter Jansen purchased 100 shares each in Sygnette and Joey Stores a year ago. He paid $62.85 and $121.15 per share respectively. He sold Sygnette today for $59.80. He received a dividend fromJoey Stores of $1.60 and alsosold the stock today for $127.35 per share. Petter's return for the portfolio is:'_______

estimated cost: a. managers use to make decisions about the future b. find a right price c. is not useful for

Sienna Company uses the FIFO cost flow assumption. Sienna has inventory with a selling price of $100, packaging costs of $5, and transportation costs of $10. Sienna's normal profit margin is $20. However, due to limited supply of the product from the manufacturer, it would cost Sienna $80 to replace the inventory. What amount should be used as the market value?a. $ 65b. $ 80c. $ 85d. $ 100

Archer, in Chicago, wrote to Ganze in New York City offering to purchase her antique car. When she received the letter, Ganze mailed an acceptance. After she mailed the letter, Ganze changed her mind and sent a telegram rejecting the offer. The acceptance letter reached Archer one day before the telegram. Did a contract result