This Tutorial contains Excel File which can be used to solve for any values
Complete the following assignments in WileyPLUS:
• Exercise 13-2 (Part Level Submission)
• Exercise 13-7 (Part Level Submission)
• Exercise 13-16
• Exercise 14-4
• Exercise 14-6
• Exercise 14-9 (Part Level Submission)
• Problem 14-2 (Part Level submission)
Exercise 13-2 (Part Level Submission)
The following are selected 2017 transactions of Riverbed Corporation.
Sept. 1 Purchased inventory from Encino Company on account for $43,600. Riverbed records purchases gross and uses a periodic inventory system.
Oct. 1 Issued a $43,600, 12-month, 8% note to Encino in payment of account.
Oct. 1 Borrowed $43,600 from the Shore Bank by signing a 12-month, zero-interest-bearing $48,600 note.
Prepare journal entries for the selected transactions above.
Prepare adjusting entries at December 31.
Compute the total net liability to be reported on the December 31 balance sheet for:
Exercise 13-7 (Part Level Submission)
Pharoah Hardware Company’s payroll for November 2017 is summarized below.
At this point in the year, some employees have already received wages in excess of those to which payroll taxes apply. Assume that the state unemployment tax is 2.5%. The FICA rate is 7.65% on an employee’s wages to $118,500 and 1.45% in excess of $118,500. Of the $194,300 wages subject to FICA tax, $21,300 of the sales wages is in excess of $118,500. Federal unemployment tax rate is 0.8% after credits. Income tax withheld amounts to $16,800 for factory, $7,700 for sales, and $6,800 for administrative.
Presented below is a list of possible transactions.
Analyze the effect of the 18 transactions on the financial statement categories indicated.
1. Purchased inventory for $80,000 on account (assume perpetual system is used).
2. Issued an $80,000 note payable in payment on account (see item 1 above).
3. Recorded accrued interest on the note from item 2 above.
4. Borrowed $100,000 from the bank by signing a 6-month, $112,000, zero-interest-bearing note.
5. Recognized 4 months’ interest expense on the note from item 4 above.
6. Recorded cash sales of $75,260, which includes 6% sales tax.
7. Recorded wage expense of $35,000. The cash paid was $25,000; the difference was due to various amounts withheld.
8. Recorded employer’s payroll taxes.
9. Accrued accumulated vacation pay.
10. Recorded an asset retirement obligation.
11. Recorded bonuses due to employees.
12. Recorded a contingent loss on a lawsuit that the company will probably lose.
13. Accrued warranty expense (assume expense warranty approach).
14. Paid warranty costs that were accrued in item 13 above.
15. Recorded sales of product and related service-type warranties.
16. Paid warranty costs under contracts from item 15 above.
17. Recognized warranty revenue (see item 15 above).
18. Recorded estimated liability for premium claims outstanding.
Ivanhoe Company issued $444,000 of 10%, 20-year bonds on January 1, 2017, at 104. Interest is payable semiannually on July 1 and January 1. Ivanhoe Company uses the straight-line method of amortization for bond premium or discount.
Prepare the journal entries to record the following. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
(a) The issuance of the bonds.
(b) The payment of interest and the related amortization on July 1, 2017.
(c) The accrual of interest and the related amortization on December 31, 2017.
Culver Company sells 9% bonds having a maturity value of $2,050,000 for $1,828,314. The bonds are dated January 1, 2017, and mature January 1, 2022. Interest is payable annually on January 1.
Prepare the journal entries to record the following transactions. (Round answer to 0 decimal
Exercise 14-9 (Part Level Submission)
On June 30, 2017, Monty Company issued $3,200,000 face value of 13%, 20-year bonds at $3,440,734, a yield of 12%. Monty uses the effective-interest method to amortize bond premium or discount. The bonds pay semiannual interest on June 30 and December 31.
(Round answer to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
(1) The issuance of the bonds on June 30, 2017.
(2) The payment of interest and the amortization of the premium on December 31, 2017.
(3) The payment of interest and the amortization of the premium on June 30, 2018.
(4) The payment of interest and the amortization of the premium on December 31, 2018.
Set up a schedule of interest expense and discount amortization under the straight-line method.
Show the proper balance sheet presentation for the liability for bonds payable on the December 31, 2018, balance sheet.
(1) What amount of interest expense is reported for 2018? (Round answer to 0 decimal places, e.g. 38,548.)
Interest expense reported for 2018
(2) Will the bond interest expense reported in 2018 be the same as, greater than, or less than the amount that would be reported if the straight-line method of amortization were used?
The bond interest expense reported in 2018 will be
(3) Determine the total cost of borrowing over the life of the bond. (Round answer to 0 decimal places, e.g. 38,548.)
Total cost of borrowing over the life of the bond
(4) Will the total bond interest expense for the life of the bond be greater than, the same as, or less than the total interest expense if the straight-line method of amortization were used?
The total bond interest expense for the life of the bond will be
Problem 14-2 (Part Level Submission)
Swifty Co. is building a new hockey arena at a cost of $2,310,000. It received a downpayment of $490,000 from local businesses to support the project, and now needs to borrow $1,820,000 to complete the project. It therefore decides to issue $1,820,000 of 12%, 10-year bonds. These bonds were issued on January 1, 2016, and pay interest annually on each January 1. The bonds yield 11%.
Prepare the journal entry to record the issuance of the bonds on January 1, 2016.