Accounting Intermediate II WileyPlus Chapter 13 Exercise

Exercise 13-2 (Part Level Submission) The following are selected 2014 transactions of Sean Astin Corporation. Sept. 1 Purchased inventory from Encino Company on account for $56,850. Astin records purchases gross and uses a periodic inventory system. Oct. 1 Issued a $56,850, 12-month, 8% note to Encino in payment of account. Oct. 1 Borrowed $75,390 from the Shore Bank by signing a 12-month, zero-interest-bearing $82,030 note. (a) Prepare journal entries for the selected transactions above. (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.) Date Account Titles and Explanation Debit Credit September 1 October 1 October 1 (b) Prepare adjusting entries at December 31. (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.) Date Account Titles and Explanation December 31 (To recod interest on the note) December 31 (To record discount on the note) (c) Debit Credit Compute the total net liability to be reported on the December 31 balance sheet for: (1) The interest-bearing note (2) The zero-interest-bearing note $ $ Brief Exercise 13-1 Roley Corporation uses a periodic inventory system and the gross method of accounting for purchase discounts. (a) On July 1, (1) Roley purchased $78,900 of inventory, terms 1/10, n/30, FOB shipping point. (2) Roley paid freight costs of $1,250. (b) On July 3, Roley returned damaged goods and received credit of $7,890. (c) On July 10, Roley paid for the goods. Prepare all necessary journal entries for Roley. (Round answers to 0 decimal places, e.g. 5,275. 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.) No. Date (a) (1) Account Titles and Explanation Debit Credit July 1 (a) (2) (b) July 3 (c) July 10 Exercise 13-3 On December 31, 2014, Hattie McDaniel Company had $1,292,600 of short-term debt in the form of notes payable due February 2, 2015. On January 21, 2015, the company issued 22,450 shares of its common stock for $45 per share, receiving $1,010,250 proceeds after brokerage fees and other costs of issuance. On February 2, 2015, the proceeds from the stock sale, supplemented by an additional $282,350 cash, are used to liquidate the $1,292,600 debt. The December 31, 2014, balance sheet is issued on February 23, 2015. Show how the $1,292,600 of short-term debt should be presented on the December 31, 2014, balance sheet. (Enter account name only and do not provide descriptive information.) Hatttie McDaniel Company Partial Balance Sheet December 31, 2014 : $ : Brief Exercise 13-4 At December 31, 2014, Burr Corporation owes $679,000 on a note payable due February 15, 2015. If Burr refinances the obligation by issuing a long-term note on February 14 and using the proceeds to pay off the note due February 15, how much of the $679,000 should be reported as a current liability at December 31, 2014? (Do not leave any answer field blank. Enter 0 for amounts.) The amount to be reported as a current liability at December 31, 2014 $ If Burr pays off the note on February 15, 2015, and then borrows $1,358,000 on a long-term basis on March 1, how much of the $679,000 should be reported as a current liability at December 31, 2014, the end of the fiscal year? (Do not leave any answer field blank. Enter 0 for amounts.) The amount to be reported as a current liability at December 31, 2014 $ Exercise 13-5 (Part Level Submission) Matt Broderick Company began operations on January 2, 2013. It employs 9 individuals who work 8-hour days and are paid hourly. Each employee earns 9 paid vacation days and 8 paid sick days annually. Vacation days may be taken after January 15 of the year following the year in which they are earned. Sick days may be taken as soon as they are earned; unused sick days accumulate. Additional information is as follows. Actual Hourly Wage Rate Vacation Days Used by Each Employee Sick Days Used by Each Employee 2013 2014 2013 2014 2013 2014 $16 $17 0 8 6 7 Matt Broderick Company has chosen to accrue the cost of compensated absences at rates of pay in effect during the period when earned and to accrue sick pay when earned. (a) Prepare journal entries to record transactions related to compensated absences during 2013 and 2014. (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.) Account Titles and Explanation Debit 2013 (To accrue the expense and liability for vacations) (To accrue the expense and liability for sick pay) (To record sick leave paid) 2014 (To accrue the expense and liability for vacations) (To accrue the expense and liability for sick pay) (To record vacation time paid) Credit (To record payment for compensated time when used by employees) (b) Compute the amounts of any liability for compensated absences that should be reported on the balance sheet at December 31, 2013 and 2014. 2013 Vacation Wages Payable Sick Pay Wages Payable 2014 $ $ $ $ Exercise 13-7 During the month of June, Rowling Boutique had cash sales of $270,724 and credit sales of $176,596, both of which include the 6% sales tax that must be remitted to the state by July 15. Prepare the adjusting entry that should be recorded to fairly present the June 30 financial statements. (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.) Date Account Titles and Explanation Debit Credit June 30 Brief Exercise 13-5 Sport Pro Magazine sold 34,200 annual subscriptions on August 1, 2014, for $20 each. Prepare Sport Pro's August 1, 2014, journal entry and the December 31, 2014, annual adjusting entry, assuming the magazines are published and delivered monthly. (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.) Date Account Titles and Explanation 8/1/14 12/31/14 Exercise 13-8 Debit Credit The payroll of YellowCard Company for September 2013 is as follows. Total payroll was $462,500, of which $152,500 is exempt from Social Security tax because it represented amounts paid in excess of $106,800 to certain employees. The amount paid to employees in excess of $7,000 was $405,600. Income taxes in the amount of $83,650 were withheld, as was $8,900 in union dues. The state unemployment tax is 3.5%, but YellowCard Company is allowed a credit of 2.3% by the state for its unemployment experience. Also, assume that the current FICA tax is 7.65% on an employee's wages to $106,800 and 1.45% in excess of $106,800. No employee for YellowCard makes more than $125,000. The federal unemployment tax rate is 0.8% after state credit. Prepare the necessary journal entries if (a) the wages and salaries paid and (b) the employer payroll taxes are recorded separately. (Round answers to 0 decimal places, e.g. 5,275. 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.) No. Account Titles and Explanation Debit Credit (a) (b) Exercise 13-11 (Part Level Submission) Sheryl Crow Equipment Company sold 641 Rollomatics during 2014 at $6,310 each. During 2014, Crow spent $36,250 servicing the 2-year warranties that accompany the Rollomatic. All applicable transactions are on a cash basis. (a) Prepare 2014 entries for Crow using the expense warranty approach. Assume that Crow estimates the total cost of servicing the warranties will be $145,000 for 2 years. (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.) Account Titles and Explanation Debit Credit (To record the sale) (To record the warranty expense) (To record the warranty liabilitiy) (b) Prepare 2014 entries for Crow assuming that the warranties are not an integral part of the sale. Assume that of the sales total, $179,100 relates to sales of warranty contracts. Crow estimates the total cost of servicing the warranties will be $145,000 for 2 years. Estimate revenues earned on the basis of costs incurred and estimated costs. (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.) Account Titles and Explanation Debit Credit (To record the sale) (To record the warranty expense) (To record the estimated revenues) Exercise 13-12 No Doubt Company includes 1 coupon in each box of soap powder that it packs, and 10 coupons are redeemable for a premium (a kitchen utensil). In 2014, No Doubt Company purchased 8,910 premiums at 90 cents each and sold 130,200 boxes of soap powder at $3.50 per box; 48,400 coupons were presented for redemption in 2014. It is estimated that 60% of the coupons will eventually be presented for redemption. Prepare all the entries that would be made relative to sales of soap powder and to the premium plan in 2014. (Round answers to 0 decimal places, e.g. 5,275. 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.) Account Titles and Explanation (To record the pemium inventory) (To record the sales) (To record the expense associated with the sale) (To record the premium liability) Debit Credit