Carson Realty Company (B) The Carson Realty Company (CRC) owned several apartment buildings in Greater Carson,...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Carson Realty Company (B) The Carson Realty Company (CRC) owned several apartment buildings in Greater Carson, a small Midwestern community. It rented studio apartments, as well as one- and two-bedroom apartment units to individuals-mainly university students-in the town. CRC began operations in July 2012. During the month of July, the following events occurred (differences from the Carson Realty Company (A) case are shown in bold faced type): The company borrowed $24,000,000 on a 20 year note to finance its activities. The interest rate was 12 percent. Interest and principal payments were due and payable on the first day of each month, beginning on August 1. July 1 The company purchased an apartment building that was 90% occupied. After all closing costs, legal fees, and other purchase-related transactions had been com- pleted, the building cost $15,000,000. The building's economic life was 20 years and a salvage value was $3,000,000. $500,000 in materials for renovations and repairs were purchased on credit. Payment was due August 11. July 5 July 11 Tenants in 90 rental units paid their rent, which averaged $600 per unit. Ten tenants promised to pay their $600 July rent on August 1. July 14 July 15 Building staff was paid for the first half of July. Total payroll was $4,000. July 28 Tenants in 200 rental units paid their rent, which averaged $500 per unit. July 30 Utilities for the month were paid, totaling $15,000. Building staff was owed for the last two weeks of July. Total payroll was $5,000. Payment would be made on August 1 July 31 July 31 $20,000 of the supply inventory had been used for minor repairs and main- tenance. Assignment 1. Prepare a balance sheei for CRC as of July 31, 2012. Try to do so by setting up T accounts and posting entries to them. Then ealculate ending balances for all the T accounts. Then set the balance sheet up in its proper format. 2. Prepare an inceme statement for July 2012, again in proper format. 3. Prepare a statement of cash flows for July 2012, using either the direct or indirect method. 4. What is your assessment of the financial condition of CRC? In answering this question, you should speculate on what the August financial statements will look like? Carson Realty Company (B) The Carson Realty Company (CRC) owned several apartment buildings in Greater Carson, a small Midwestern community. It rented studio apartments, as well as one- and two-bedroom apartment units to individuals-mainly university students-in the town. CRC began operations in July 2012. During the month of July, the following events occurred (differences from the Carson Realty Company (A) case are shown in bold faced type): The company borrowed $24,000,000 on a 20 year note to finance its activities. The interest rate was 12 percent. Interest and principal payments were due and payable on the first day of each month, beginning on August 1. July 1 The company purchased an apartment building that was 90% occupied. After all closing costs, legal fees, and other purchase-related transactions had been com- pleted, the building cost $15,000,000. The building's economic life was 20 years and a salvage value was $3,000,000. $500,000 in materials for renovations and repairs were purchased on credit. Payment was due August 11. July 5 July 11 Tenants in 90 rental units paid their rent, which averaged $600 per unit. Ten tenants promised to pay their $600 July rent on August 1. July 14 July 15 Building staff was paid for the first half of July. Total payroll was $4,000. July 28 Tenants in 200 rental units paid their rent, which averaged $500 per unit. July 30 Utilities for the month were paid, totaling $15,000. Building staff was owed for the last two weeks of July. Total payroll was $5,000. Payment would be made on August 1 July 31 July 31 $20,000 of the supply inventory had been used for minor repairs and main- tenance. Assignment 1. Prepare a balance sheei for CRC as of July 31, 2012. Try to do so by setting up T accounts and posting entries to them. Then ealculate ending balances for all the T accounts. Then set the balance sheet up in its proper format. 2. Prepare an inceme statement for July 2012, again in proper format. 3. Prepare a statement of cash flows for July 2012, using either the direct or indirect method. 4. What is your assessment of the financial condition of CRC? In answering this question, you should speculate on what the August financial statements will look like?
Expert Answer:
Related Book For
Concepts in Federal Taxation
ISBN: 9780324379556
19th Edition
Authors: Kevin E. Murphy, Mark Higgins, Tonya K. Flesher
Posted Date:
Students also viewed these accounting questions
-
During the first month of operations, the following events and transactions occurred for Virmani Architects Inc.: Apr.1 Invested cash of $10,000 and equipment of $6,000 in the company in exchange for...
-
During the first month of operations, the following events and transactions occurred for Astromech Accounting Services Inc.: May 1 Issued common shares for $20,000 cash. 1 Paid office rent of $950...
-
During the month of November the following transactions occurred. Assignment 1. Record the following transactions in the general journal and post them to the general ledger. 2. Prepare a trial...
-
Molly earns a gross yearly salary of $132,676. She has no dependent children and made the following tax deductible purchases: Charitable contributions: $5,401 Student loan interest: $1,429 When she...
-
The Crown Bottling Company has just installed a new bottling process that will fill 16-ounce bottles of the popular Crown Classic Cola soft drink. Both overfilling and underfilling bottles are...
-
Linked lists is another popular scheme often used for storing sparse matrices. These allow to link together data items (e.g., elements of a given row) in a large linear array. A starting position is...
-
What is the difference between a systems flowchart and an analytic flowchart?
-
Suppose that you are a collector of antique cars and you need to purchase spare parts for a 1938 engine. These parts are not made anymore and are scarce. You discover that Beem has the spare parts...
-
The following are trial courts from which a taxpayer may choose in initiating his or her tax lawsuit: A . The Supreme Court. B . The Tax Court. C . The Court of Appeals for the 6 th Circuit. D . The...
-
Given the following production plan, use a (a) Chase production strategy (b) Level production strategy to compute the monthly production, ending inventory / (backlog) and workforce levels. A worker...
-
Assuming the force F has a magnitude of 900 lb, find the tensions in chains AB and AC by: 04 90016 a) drawing a complete free body diagram of the ring at A b) using the equations of equilibrium to...
-
Economics professors like to ask their students about the diamond-water paradox: Why is it that a good that is as essential to human existence as water costs so much less than a good like a diamond...
-
Suppose a hedge fund invests in a set of very illiquid stocks (which may not even be publicly traded). Because the stocks are illiquid, their price is only observed 15 days af- ter the end of every...
-
I would like to see an example code for this project, id like to use it for reference I'm having trouble with my work. Ive included my works aswell so if you have time to take a look andy help with...
-
The manager of UPTOWN hotel wants to yield a total of $10,000 by investing over the next 2 years. How much cash must be invested today at an annual interest rate of 10% compounded semi-annually ?...
-
A segment of a company reports the following loss for the year. All $178,500 of its variable costs are avoidable, and $111,000 of its fixed costs are avoidable. Segment Income (Loss) Sales Variable...
-
Currently Digby is charged $6,664,000 Depreciation on the Income Statment. Digby is planning for an increase in this depreciation. What will this do on Digby 's financial statements? Have no impact...
-
How many years will it take a $700 balance to grow into $900 in an account earning 5%?
-
What are the tax consequences of receiving an ownership interest in an entity in exchange for services rendered to the entity?
-
What is meant by the Golsen rule?
-
Bostian Company reports a net Section 1231 gain of $31,000 during the current year. Identify the tax issue(s) posed by the facts presented. Determine the possible tax consequences of each issue that...
-
Presentation Baker Corporation was organized on July 1, with an authorization of 50,000 shares of \(\$ 5\) no-par value preferred stock ( \(\$ 5\) is transactions affecting stockholders' equity...
-
Chauncey Corporation began business on June 30, 2016. At that time, it issued 20,000 shares of \(\$ 50\) par value, six percent, cumulative preferred stock and 90,000 shares of \(\$ 10\) par value...
-
Match the flowchart, context diagram, or data flow diagram segments in the right column to an appropriate description in the left column. 1. Statements are prepared and sent to customers from data...
Study smarter with the SolutionInn App