Hillside issues $1,900,000 of 5%, 15-year bonds dated January 1, 2017, that pay interest semiannually on June
Question:
Hillside issues $1,900,000 of 5%, 15-year bonds dated January 1, 2017, that pay interest semiannually on June 30 and December 31. The bonds are issued at a price of $1,641,812.
Required:
1. Prepare the January 1, 2017, journal entry to record the bonds' issuance.
2(a) For each semiannual period, complete the table belowto calculate the cash payment.
2(b) For each semiannual period, complete the table below to calculate the straight-line discount amortization.
2(c) For each semiannual period, complete the table below to calculate the bond interest expense.
3. Complete the below table to calculate the total bond interest expense to be recognized over the bonds' life.
4. Prepare the first two years of an amortization table using the straight-line method.
5. Prepare the journal entries to record the first two interest payments.
Part 1
Record the issue of bonds with a par value of $1,900,000 cash
PART 2
Hillside issues $1,900,000 of 5%, 15-year bonds dated January 1, 2017, that pay interest semiannually on June 30 and December 31. The bonds are issued at a price of $1,641,812.
Required:
1. Prepare the January 1, 2017, journal entry to record the bonds' issuance.
2(a) For each semiannual period, complete the table belowto calculate the cash payment.
2(b) For each semiannual period, complete the table below to calculate the straight-line discount amortization.
2(c) For each semiannual period, complete the table below to calculate the bond interest expense.
3. Complete the below table to calculate the total bond interest expense to be recognized over the bonds' life.
4. Prepare the first two years of an amortization table using the straight-line method.
5. Prepare the journal entries to record the first two interest payments.
For each semiannual period, complete the table below to calculate the cash payment, straight-line discount amortization and bond interest expense.
Par (maturity) valueAnnual RateYearSemiannual cash interest payment=Par (maturity) valueBonds priceDiscount on Bonds PayableSemiannual periodsStraight-line discount amortization==Semiannual cash paymentDiscount amortizationBond interest expense=
+
PART 3
Complete the below table to calculate the total bond interest expense to be recognized over the bonds' life.
Total bond interest expense over life of bonds:Amount repaid:payments of Par value at maturity Total repaidLess amount borrowedTotal bond interest expense
PART 4
Hillside issues $1,900,000 of 5%, 15-year bonds dated January 1, 2017, that pay interest semiannually on June 30 and December 31. The bonds are issued at a price of $1,641,812.
Required:
1. Prepare the January 1, 2017, journal entry to record the bonds' issuance.
2(a) For each semiannual period, complete the table belowto calculate the cash payment.
2(b) For each semiannual period, complete the table below to calculate the straight-line discount amortization.
2(c) For each semiannual period, complete the table below to calculate the bond interest expense.
3. Complete the below table to calculate the total bond interest expense to be recognized over the bonds' life.
4. Prepare the first two years of an amortization table using the straight-line method.
5. Prepare the journal entries to record the first two interest payments.
Prepare the first two years of an amortization table using the straight-line method.
Prepare the first two years of an amortization table using the straight-line method.
Semiannual Period-EndUnamortized DiscountCarrying Value01/01/201706/30/201712/31/201706/30/201812/31/2018
PART 5-
Hillside issues $1,900,000 of 5%, 15-year bonds dated January 1, 2017, that pay interest semiannually on June 30 and December 31. The bonds are issued at a price of $1,641,812.
Required:
1. Prepare the January 1, 2017, journal entry to record the bonds' issuance.
2(a) For each semiannual period, complete the table belowto calculate the cash payment.
2(b) For each semiannual period, complete the table below to calculate the straight-line discount amortization.
2(c) For each semiannual period, complete the table below to calculate the bond interest expense.
3. Complete the below table to calculate the total bond interest expense to be recognized over the bonds' life.
4. Prepare the first two years of an amortization table using the straight-line method.
5. Prepare the journal entries to record the first two interest payments.
Record the first interest payment on June 30, 2017
PART 6
On November 1, 2017, Norwood borrows $460,000 cash from a bank by signing a five-year installment note bearing 9% interest. The note requires equal payments of $118,261 each year on October 31. (Table B.1, Table B.2, Table B.3, and Table B.4) (Use appropriate factor(s) from the tables provided.)
Required:
1. Complete an amortization table for this installment note.
2. Prepare the journal entries in which Norwood records the following:
(a) Accrued interest as of December 31, 2017 (the end of its annual reporting period).
(b) The first annual payment on the note.
Complete an amortization table for this installment note. (Round your intermediate calculations to the nearest dollar amount.)
PART 8
On November 1, 2017, Norwood borrows $460,000 cash from a bank by signing a five-year installment note bearing 9% interest. The note requires equal payments of $118,261 each year on October 31. (Table B.1, Table B.2, Table B.3, and Table B.4) (Use appropriate factor(s) from the tables provided.)
Required:
1. Complete an amortization table for this installment note.
2. Prepare the journal entries in which Norwood records the following:
(a) Accrued interest as of December 31, 2017 (the end of its annual reporting period).
(b) The first annual payment on the note.
Record the interest accrued on the note as of December 31, 2017.
PART 9
On November 1, 2017, Norwood borrows $460,000 cash from a bank by signing a five-year installment note bearing 9% interest. The note requires equal payments of $118,261 each year on October 31. (Table B.1, Table B.2, Table B.3, and Table B.4) (Use appropriate factor(s) from the tables provided.)
Required:
1. Complete an amortization table for this installment note.
2. Prepare the journal entries in which Norwood records the following:
(a) Accrued interest as of December 31, 2017 (the end of its annual reporting period).
(b) The first annual payment on the note.
Record the first installment payment on October 31, 2018. Assume no reversing entries were prepared
PART 10
The following information applies to the questions displayed below.]
Rose Company had no short-term investments prior to year 2017. It had the following transactions involving short-term investments in available-for-sale securities during 2017.
Apr.16Purchased 4,000 shares of Gem Co. stock at $29.75 per share plus a $380 brokerage fee.May1Paid $170,000 to buy 3-month U.S. Treasury bills (debt securities): $170,000 principle amount, 5% interest, securities mature on July 31.July7Purchased 2,000 shares of PepsiCo stock at $54.00 per share plus a $350 brokerage fee.20Purchased 1,000 shares of Xerox stock at $15.00 per share plus a $430 brokerage fee.Aug.1Received a check for principal and accrued interest on the U.S. Treasury bills that matured on July 31.15Received a(n) $1.00 per share cash dividend on the Gem Co. stock.28Sold 2,000 shares of Gem Co. stock at $36.50 per share less a $470 brokerage fee.Oct.1Received a $1.90 per share cash dividend on the PepsiCo shares.Dec.15Received a $1.15 per share cash dividend on the remaining Gem Co. shares.31Received a $1.30 per share cash dividend on the PepsiCo shares.
Purchased 4,000 shares of Gem Co. stock at $29.75 per share plus a $380 brokerage fee.
Part 11
Rose Company had no short-term investments prior to year 2017. It had the following transactions involving short-term investments in available-for-sale securities during 2017.
Apr.16Purchased 4,000 shares of Gem Co. stock at $29.75 per share plus a $380 brokerage fee.May1Paid $170,000 to buy 3-month U.S. Treasury bills (debt securities): $170,000 principle amount, 5% interest, securities mature on July 31.July7Purchased 2,000 shares of PepsiCo stock at $54.00 per share plus a $350 brokerage fee.20Purchased 1,000 shares of Xerox stock at $15.00 per share plus a $430 brokerage fee.Aug.1Received a check for principal and accrued interest on the U.S. Treasury bills that matured on July 31.15Received a(n) $1.00 per share cash dividend on the Gem Co. stock.28Sold 2,000 shares of Gem Co. stock at $36.50 per share less a $470 brokerage fee.Oct.1Received a $1.90 per share cash dividend on the PepsiCo shares.Dec.15Received a $1.15 per share cash dividend on the remaining Gem Co. shares.31Received a $1.30 per share cash dividend on the PepsiCo shares.
Paid $170,000 to buy 3-month U.S. Treasury bills (debt securities): $170,000 principle amount, 5% interest, securities mature on July 31.
PART 12
Rose Company had no short-term investments prior to year 2017. It had the following transactions involving short-term investments in available-for-sale securities during 2017.
Apr.16Purchased 4,000 shares of Gem Co. stock at $29.75 per share plus a $380 brokerage fee.May1Paid $170,000 to buy 3-month U.S. Treasury bills (debt securities): $170,000 principle amount, 5% interest, securities mature on July 31.July7Purchased 2,000 shares of PepsiCo stock at $54.00 per share plus a $350 brokerage fee.20Purchased 1,000 shares of Xerox stock at $15.00 per share plus a $430 brokerage fee.Aug.1Received a check for principal and accrued interest on the U.S. Treasury bills that matured on July 31.15Received a(n) $1.00 per share cash dividend on the Gem Co. stock.28Sold 2,000 shares of Gem Co. stock at $36.50 per share less a $470 brokerage fee.Oct.1Received a $1.90 per share cash dividend on the PepsiCo shares.Dec.15Received a $1.15 per share cash dividend on the remaining Gem Co. shares.31Received a $1.30 per share cash dividend on the PepsiCo shares.
Purchased 2,000 shares of PepsiCo stock at $54.00 per share plus a $350 brokerage fee.
PART 13
Rose Company had no short-term investments prior to year 2017. It had the following transactions involving short-term investments in available-for-sale securities during 2017.
Apr.16Purchased 4,000 shares of Gem Co. stock at $29.75 per share plus a $380 brokerage fee.May1Paid $170,000 to buy 3-month U.S. Treasury bills (debt securities): $170,000 principle amount, 5% interest, securities mature on July 31.July7Purchased 2,000 shares of PepsiCo stock at $54.00 per share plus a $350 brokerage fee.20Purchased 1,000 shares of Xerox stock at $15.00 per share plus a $430 brokerage fee.Aug.1Received a check for principal and accrued interest on the U.S. Treasury bills that matured on July 31.15Received a(n) $1.00 per share cash dividend on the Gem Co. stock.28Sold 2,000 shares of Gem Co. stock at $36.50 per share less a $470 brokerage fee.Oct.1Received a $1.90 per share cash dividend on the PepsiCo shares.Dec.15Received a $1.15 per share cash dividend on the remaining Gem Co. shares.31Received a $1.30 per share cash dividend on the PepsiCo shares.
Purchased 1,000 shares of Xerox stock at $15.00 per share plus a $430 brokerage fee.
PART 14
Rose Company had no short-term investments prior to year 2017. It had the following transactions involving short-term investments in available-for-sale securities during 2017.
Apr.16Purchased 4,000 shares of Gem Co. stock at $29.75 per share plus a $380 brokerage fee.May1Paid $170,000 to buy 3-month U.S. Treasury bills (debt securities): $170,000 principle amount, 5% interest, securities mature on July 31.July7Purchased 2,000 shares of PepsiCo stock at $54.00 per share plus a $350 brokerage fee.20Purchased 1,000 shares of Xerox stock at $15.00 per share plus a $430 brokerage fee.Aug.1Received a check for principal and accrued interest on the U.S. Treasury bills that matured on July 31.15Received a(n) $1.00 per share cash dividend on the Gem Co. stock.28Sold 2,000 shares of Gem Co. stock at $36.50 per share less a $470 brokerage fee.Oct.1Received a $1.90 per share cash dividend on the PepsiCo shares.Dec.15Received a $1.15 per share cash dividend on the remaining Gem Co. shares.31Received a $1.30 per share cash dividend on the PepsiCo shares.
Received a check for principal and accrued interest on the U.S. Treasury bills that matured on July 29.
PART 14
Rose Company had no short-term investments prior to year 2017. It had the following transactions involving short-term investments in available-for-sale securities during 2017.
Apr.16Purchased 4,000 shares of Gem Co. stock at $29.75 per share plus a $380 brokerage fee.May1Paid $170,000 to buy 3-month U.S. Treasury bills (debt securities): $170,000 principle amount, 5% interest, securities mature on July 31.July7Purchased 2,000 shares of PepsiCo stock at $54.00 per share plus a $350 brokerage fee.20Purchased 1,000 shares of Xerox stock at $15.00 per share plus a $430 brokerage fee.Aug.1Received a check for principal and accrued interest on the U.S. Treasury bills that matured on July 31.15Received a(n) $1.00 per share cash dividend on the Gem Co. stock.28Sold 2,000 shares of Gem Co. stock at $36.50 per share less a $470 brokerage fee.Oct.1Received a $1.90 per share cash dividend on the PepsiCo shares.Dec.15Received a $1.15 per share cash dividend on the remaining Gem Co. shares.31Received a $1.30 per share cash dividend on the PepsiCo shares.
Received an $1.00 per share cash dividend on the Gem Co. stock.
PART 15
Rose Company had no short-term investments prior to year 2017. It had the following transactions involving short-term investments in available-for-sale securities during 2017.
Apr.16Purchased 4,000 shares of Gem Co. stock at $29.75 per share plus a $380 brokerage fee.May1Paid $170,000 to buy 3-month U.S. Treasury bills (debt securities): $170,000 principle amount, 5% interest, securities mature on July 31.July7Purchased 2,000 shares of PepsiCo stock at $54.00 per share plus a $350 brokerage fee.20Purchased 1,000 shares of Xerox stock at $15.00 per share plus a $430 brokerage fee.Aug.1Received a check for principal and accrued interest on the U.S. Treasury bills that matured on July 31.15Received a(n) $1.00 per share cash dividend on the Gem Co. stock.28Sold 2,000 shares of Gem Co. stock at $36.50 per share less a $470 brokerage fee.Oct.1Received a $1.90 per share cash dividend on the PepsiCo shares.Dec.15Received a $1.15 per share cash dividend on the remaining Gem Co. shares.31Received a $1.30 per share cash dividend on the PepsiCo shares.
Sold 2,000 shares of Gem Co. stock at $36.50 per share less a $470 brokerage fee.
PART 16
Rose Company had no short-term investments prior to year 2017. It had the following transactions involving short-term investments in available-for-sale securities during 2017.
Apr.16Purchased 4,000 shares of Gem Co. stock at $29.75 per share plus a $380 brokerage fee.May1Paid $170,000 to buy 3-month U.S. Treasury bills (debt securities): $170,000 principle amount, 5% interest, securities mature on July 31.July7Purchased 2,000 shares of PepsiCo stock at $54.00 per share plus a $350 brokerage fee.20Purchased 1,000 shares of Xerox stock at $15.00 per share plus a $430 brokerage fee.Aug.1Received a check for principal and accrued interest on the U.S. Treasury bills that matured on July 31.15Received a(n) $1.00 per share cash dividend on the Gem Co. stock.28Sold 2,000 shares of Gem Co. stock at $36.50 per share less a $470 brokerage fee.Oct.1Received a $1.90 per share cash dividend on the PepsiCo shares.Dec.15Received a $1.15 per share cash dividend on the remaining Gem Co. shares.31Received a $1.30 per share cash dividend on the PepsiCo shares.
Received a $1.90 per share cash dividend on the PepsiCo shares.
PART 17
Rose Company had no short-term investments prior to year 2017. It had the following transactions involving short-term investments in available-for-sale securities during 2017.
Apr.16Purchased 4,000 shares of Gem Co. stock at $29.75 per share plus a $380 brokerage fee.May1Paid $170,000 to buy 3-month U.S. Treasury bills (debt securities): $170,000 principle amount, 5% interest, securities mature on July 31.July7Purchased 2,000 shares of PepsiCo stock at $54.00 per share plus a $350 brokerage fee.20Purchased 1,000 shares of Xerox stock at $15.00 per share plus a $430 brokerage fee.Aug.1Received a check for principal and accrued interest on the U.S. Treasury bills that matured on July 31.15Received a(n) $1.00 per share cash dividend on the Gem Co. stock.28Sold 2,000 shares of Gem Co. stock at $36.50 per share less a $470 brokerage fee.Oct.1Received a $1.90 per share cash dividend on the PepsiCo shares.Dec.15Received a $1.15 per share cash dividend on the remaining Gem Co. shares.31Received a $1.30 per share cash dividend on the PepsiCo shares.
Received a $1.15 per share cash dividend on the remaining Gem Co. shares.
PART 18
Rose Company had no short-term investments prior to year 2017. It had the following transactions involving short-term investments in available-for-sale securities during 2017.
Apr.16Purchased 4,000 shares of Gem Co. stock at $29.75 per share plus a $380 brokerage fee.May1Paid $170,000 to buy 3-month U.S. Treasury bills (debt securities): $170,000 principle amount, 5% interest, securities mature on July 31.July7Purchased 2,000 shares of PepsiCo stock at $54.00 per share plus a $350 brokerage fee.20Purchased 1,000 shares of Xerox stock at $15.00 per share plus a $430 brokerage fee.Aug.1Received a check for principal and accrued interest on the U.S. Treasury bills that matured on July 31.15Received a(n) $1.00 per share cash dividend on the Gem Co. stock.28Sold 2,000 shares of Gem Co. stock at $36.50 per share less a $470 brokerage fee.Oct.1Received a $1.90 per share cash dividend on the PepsiCo shares.Dec.15Received a $1.15 per share cash dividend on the remaining Gem Co. shares.31Received a $1.30 per share cash dividend on the PepsiCo shares.
Received a $1.30 per share cash dividend on the PepsiCo shares.
PART 19
Rose Company had no short-term investments prior to year 2017. It had the following transactions involving short-term investments in available-for-sale securities during 2017.
Apr.16Purchased 4,000 shares of Gem Co. stock at $29.75 per share plus a $380 brokerage fee.May1Paid $170,000 to buy 3-month U.S. Treasury bills (debt securities): $170,000 principle amount, 5% interest, securities mature on July 31.July7Purchased 2,000 shares of PepsiCo stock at $54.00 per share plus a $350 brokerage fee.20Purchased 1,000 shares of Xerox stock at $15.00 per share plus a $430 brokerage fee.Aug.1Received a check for principal and accrued interest on the U.S. Treasury bills that matured on July 31.15Received a(n) $1.00 per share cash dividend on the Gem Co. stock.28Sold 2,000 shares of Gem Co. stock at $36.50 per share less a $470 brokerage fee.Oct.1Received a $1.90 per share cash dividend on the PepsiCo shares.Dec.15Received a $1.15 per share cash dividend on the remaining Gem Co. shares.31Received a $1.30 per share cash dividend on the PepsiCo shares.
Prepare a table to compare the year-end cost and fair values of Rose's short-term investments in available-for-sale securities. The year-end fair values per share are: Gem Co., $32.00; PepsiCo, $51.25; and Xerox, $12.00.
PART 20
Rose Company had no short-term investments prior to year 2017. It had the following transactions involving short-term investments in available-for-sale securities during 2017.
Apr.16Purchased 4,000 shares of Gem Co. stock at $29.75 per share plus a $380 brokerage fee.May1Paid $170,000 to buy 3-month U.S. Treasury bills (debt securities): $170,000 principle amount, 5% interest, securities mature on July 31.July7Purchased 2,000 shares of PepsiCo stock at $54.00 per share plus a $350 brokerage fee.20Purchased 1,000 shares of Xerox stock at $15.00 per share plus a $430 brokerage fee.Aug.1Received a check for principal and accrued interest on the U.S. Treasury bills that matured on July 31.15Received a(n) $1.00 per share cash dividend on the Gem Co. stock.28Sold 2,000 shares of Gem Co. stock at $36.50 per share less a $470 brokerage fee.Oct.1Received a $1.90 per share cash dividend on the PepsiCo shares.Dec.15Received a $1.15 per share cash dividend on the remaining Gem Co. shares.31Received a $1.30 per share cash dividend on the PepsiCo shares.
Record the year-end adjusting entry for the securities portfolio as of December 31, 2017.
PART 21
Golden Corp., a merchandiser, recently completed its 2017 operations. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory, (5) Other Expenses are all cash expenses, and (6) any change in Income Taxes Payable reflects the accrual and cash payment of taxes. The company's balance sheets and income statement follow.
GOLDEN CORPORATION
Comparative Balance Sheets
December 31, 2017 and 201620172016AssetsCash$182,000$126,800Accounts receivable110,00089,000Inventory628,000544,000Total current assets920,000759,800Equipment383,500317,000Accum. depreciationEquipment(167,000)(113,000)Total assets$1,136,500$963,800Liabilities and EquityAccounts payable$123,000$89,000Income taxes payable46,00034,100Total current liabilities169,000123,100EquityCommon stock, $2 par value628,000586,000Paid-in capital in excess of par value, common stock214,000187,000Retained earnings125,50067,700Total liabilities and equity$1,136,500$963,800
GOLDEN CORPORATION
Income Statement
For Year Ended December 31, 2017Sales$1,882,000Cost of goods sold1,104,000Gross profit778,000Operating expensesDepreciation expense$54,000Other expenses512,000566,000Income before taxes212,000Income taxes expense47,200Net income$164,800
Additional Information on Year 2017 Transactions
- Purchased equipment for $66,500 cash.
- Issued 13,800 shares of common stock for $5 cash per share.
- Declared and paid $107,000 in cash dividends.
Prepare a complete statement of cash flows; report its cash inflows and cash outflows from operating activities according to the indirect method. (Amounts to be deducted should be indicated with a minus sign.)
PART 21
Plum Corporation began the month of May with $1,300,000 of current assets, a current ratio of 1.90:1, and an acid-test ratio of 1.20:1. During the month, it completed the following transactions (the company uses a perpetual inventory system).
May2Purchased $60,000 of merchandise inventory on credit.8Sold merchandise inventory that cost $60,000 for $135,000 cash.10Collected $24,000 cash on an account receivable.15Paid $31,500 cash to settle an account payable.17Wrote off a $5,000 bad debt against the Allowance for Doubtful Accounts account.22Declared a $1 per share cash dividend on its 60,000 shares of outstanding common stock.26Paid the dividend declared on May 22.27Borrowed $120,000 cash by giving the bank a 30-day, 10% note.28Borrowed $130,000 cash by signing a long-term secured note.29Used the $250,000 cash proceeds from the notes to buy new machinery.
Required:
Complete the table below showing Plum's (1) current ratio, (2) acid-test ratio, and (3) working capital after each transaction. (Do not round intermediate calculations. Round your ratios to 2 decimal places and the working capitals to nearest dollar amount. Subtracted amount should be indicated with a minus sign.)
PART 22
Selected year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31, 2016, were inventory, $46,900; total assets, $229,400; common stock, $84,000; and retained earnings, $45,071.)
CABOT CORPORATION
Income Statement
For Year Ended December 31, 2017Sales$453,600Cost of goods sold298,050Gross profit155,550Operating expenses98,600Interest expense3,900Income before taxes53,050Income taxes21,371Net income$31,679
CABOT CORPORATION
Balance Sheet
December 31, 2017AssetsLiabilities and EquityCash$12,000Accounts payable$16,500Short-term investments8,000Accrued wages payable4,800Accounts receivable, net32,200Income taxes payable3,300Notes receivable (trade)*5,000Merchandise inventory42,150Long-term note payable, secured by mortgage on plant assets70,400Prepaid expenses3,100Common stock84,000Plant assets, net153,300Retained earnings76,750Total assets$255,750Total liabilities and equity$255,750
These are short-term notes receivable arising from customer (trade) sales.
Required:
Compute the following: (1) current ratio, (2) acid-test ratio, (3) days' sales uncollected, (4) inventory turnover, (5) days' sales in inventory, (6) debt-to-equity ratio, (7) times interest earned, (8) profit margin ratio, (9) total asset turnover, (10) return on total assets, and (11) return on common stockholders' equity. (Do not round intermediate calculations.)
PART 23
Selected year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31, 2016, were inventory, $46,900; total assets, $229,400; common stock, $84,000; and retained earnings, $45,071.)
CABOT CORPORATION
Income Statement
For Year Ended December 31, 2017Sales$453,600Cost of goods sold298,050Gross profit155,550Operating expenses98,600Interest expense3,900Income before taxes53,050Income taxes21,371Net income$31,679
CABOT CORPORATION
Balance Sheet
December 31, 2017AssetsLiabilities and EquityCash$12,000Accounts payable$16,500Short-term investments8,000Accrued wages payable4,800Accounts receivable, net32,200Income taxes payable3,300Notes receivable (trade)*5,000Merchandise inventory42,150Long-term note payable, secured by mortgage on plant assets70,400Prepaid expenses3,100Common stock84,000Plant assets, net153,300Retained earnings76,750Total assets$255,750Total liabilities and equity$255,750
* These are short-term notes receivable arising from customer (trade) sales.
PART 24Selected year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31, 2016, were inventory, $46,900; total assets, $229,400; common stock, $84,000; and retained earnings, $45,071.)
CABOT CORPORATION
Income Statement
For Year Ended December 31, 2017Sales$453,600Cost of goods sold298,050Gross profit155,550Operating expenses98,600Interest expense3,900Income before taxes53,050Income taxes21,371Net income$31,679
CABOT CORPORATION
Balance Sheet
December 31, 2017AssetsLiabilities and EquityCash$12,000Accounts payable$16,500Short-term investments8,000Accrued wages payable4,800Accounts receivable, net32,200Income taxes payable3,300Notes receivable (trade)*5,000Merchandise inventory42,150Long-term note payable, secured by mortgage on plant assets70,400Prepaid expenses3,100Common stock84,000Plant assets, net153,300Retained earnings76,750Total assets$255,750Total liabilities and equity$255,750
* These are short-term notes receivable arising from customer (trade) sales.
Compute the inventory turnover.
PART 25
Selected year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31, 2016, were inventory, $46,900; total assets, $229,400; common stock, $84,000; and retained earnings, $45,071.)
PART 26
CABOT CORPORATION
Income Statement
For Year Ended December 31, 2017Sales$453,600Cost of goods sold298,050Gross profit155,550Operating expenses98,600Interest expense3,900Income before taxes53,050Income taxes21,371Net income$31,679
CABOT CORPORATION
Balance Sheet
December 31, 2017AssetsLiabilities and EquityCash$12,000Accounts payable$16,500Short-term investments8,000Accrued wages payable4,800Accounts receivable, net32,200Income taxes payable3,300Notes receivable (trade)*5,000Merchandise inventory42,150Long-term note payable, secured by mortgage on plant assets70,400Prepaid expenses3,100Common stock84,000Plant assets, net153,300Retained earnings76,750Total assets$255,750Total liabilities and equity$255,750
Required:
Compute the following: (1) current ratio, (2) acid-test ratio, (3) days' sales uncollected, (4) inventory turnover, (5) days' sales in inventory, (6) debt-to-equity ratio, (7) times interest earned, (8) profit margin ratio, (9) total asset turnover, (10) return on total assets, and (11) return on common stockholders' equity. (Do not round intermediate calculations.)
Compute the days' sales in inventory.
PART 27
Selected year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31, 2016, were inventory, $46,900; total assets, $229,400; common stock, $84,000; and retained earnings, $45,071.)
CABOT CORPORATION
Income Statement
For Year Ended December 31, 2017Sales$453,600Cost of goods sold298,050Gross profit155,550Operating expenses98,600Interest expense3,900Income before taxes53,050Income taxes21,371Net income$31,679
CABOT CORPORATION
Balance Sheet
December 31, 2017AssetsLiabilities and EquityCash$12,000Accounts payable$16,500Short-term investments8,000Accrued wages payable4,800Accounts receivable, net32,200Income taxes payable3,300Notes receivable (trade)*5,000Merchandise inventory42,150Long-term note payable, secured by mortgage on plant assets70,400Prepaid expenses3,100Common stock84,000Plant assets, net153,300Retained earnings76,750Total assets$255,750Total liabilities and equity$255,750
Compute the debt-to-equity ratio.
PART 28
Selected year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31, 2016, were inventory, $46,900; total assets, $229,400; common stock, $84,000; and retained earnings, $45,071.)
CABOT CORPORATION
Income Statement
For Year Ended December 31, 2017Sales$453,600Cost of goods sold298,050Gross profit155,550Operating expenses98,600Interest expense3,900Income before taxes53,050Income taxes21,371Net income$31,679
CABOT CORPORATION
Balance Sheet
December 31, 2017AssetsLiabilities and EquityCash$12,000Accounts payable$16,500Short-term investments8,000Accrued wages payable4,800Accounts receivable, net32,200Income taxes payable3,300Notes receivable (trade)*5,000Merchandise inventory42,150Long-term note payable, secured by mortgage on plant assets70,400Prepaid expenses3,100Common stock84,000Plant assets, net153,300Retained earnings76,750Total assets$255,750Total liabilities and equity$255,750
* These are short-term notes receivable arising from customer (trade) sales.
Required:
Compute the following: (1) current ratio, (2) acid-test ratio, (3) days' sales uncollected, (4) inventory turnover, (5) days' sales in inventory, (6) debt-to-equity ratio, (7) times interest earned, (8) profit margin ratio, (9) total asset turnover, (10) return on total assets, and (11) return on common stockholders' equity. (Do not round intermediate calculations.)
Compute the times interest earned.
PART 29
Selected year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31, 2016, were inventory, $46,900; total assets, $229,400; common stock, $84,000; and retained earnings, $45,071.)
CABOT CORPORATION
Income Statement
For Year Ended December 31, 2017Sales$453,600Cost of goods sold298,050Gross profit155,550Operating expenses98,600Interest expense3,900Income before taxes53,050Income taxes21,371Net income$31,679
CABOT CORPORATION
Balance Sheet
December 31, 2017AssetsLiabilities and EquityCash$12,000Accounts payable$16,500Short-term investments8,000Accrued wages payable4,800Accounts receivable, net32,200Income taxes payable3,300Notes receivable (trade)*5,000Merchandise inventory42,150Long-term note payable, secured by mortgage on plant assets70,400Prepaid expenses3,100Common stock84,000Plant assets, net153,300Retained earnings76,750Total assets$255,750Total liabilities and equity$255,750
* These are short-term notes receivable arising from customer (trade) sales.
Required:
Compute the following: (1) current ratio, (2) acid-test ratio, (3) days' sales uncollected, (4) inventory turnover, (5) days' sales in inventory, (6) debt-to-equity ratio, (7) times interest earned, (8) profit margin ratio, (9) total asset turnover, (10) return on total assets, and (11) return on common stockholders' equity. (Do not round intermediate calculations.)
Compute the profit margin ratio
PART 30
Selected year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31, 2016, were inventory, $46,900; total assets, $229,400; common stock, $84,000; and retained earnings, $45,071.)
CABOT CORPORATION
Income Statement
For Year Ended December 31, 2017Sales$453,600Cost of goods sold298,050Gross profit155,550Operating expenses98,600Interest expense3,900Income before taxes53,050Income taxes21,371Net income$31,679
CABOT CORPORATION
Balance Sheet
December 31, 2017AssetsLiabilities and EquityCash$12,000Accounts payable$16,500Short-term investments8,000Accrued wages payable4,800Accounts receivable, net32,200Income taxes payable3,300Notes receivable (trade)*5,000Merchandise inventory42,150Long-term note payable, secured by mortgage on plant assets70,400Prepaid expenses3,100Common stock84,000Plant assets, net153,300Retained earnings76,750Total assets$255,750Total liabilities and equity$255,750
* These are short-term notes receivable arising from customer (trade) sales.
Required:
Compute the following: (1) current ratio, (2) acid-test ratio, (3) days' sales uncollected, (4) inventory turnover, (5) days' sales in inventory, (6) debt-to-equity ratio, (7) times interest earned, (8) profit margin ratio, (9) total asset turnover, (10) return on total assets, and (11) return on common stockholders' equity. (Do not round intermediate calculations.)
Compute the total asset turnover.
PART 31
Selected year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31, 2016, were inventory, $46,900; total assets, $229,400; common stock, $84,000; and retained earnings, $45,071.)
CABOT CORPORATION
Income Statement
For Year Ended December 31, 2017Sales$453,600Cost of goods sold298,050Gross profit155,550Operating expenses98,600Interest expense3,900Income before taxes53,050Income taxes21,371Net income$31,679
CABOT CORPORATION
Balance Sheet
December 31, 2017AssetsLiabilities and EquityCash$12,000Accounts payable$16,500Short-term investments8,000Accrued wages payable4,800Accounts receivable, net32,200Income taxes payable3,300Notes receivable (trade)*5,000Merchandise inventory42,150Long-term note payable, secured by mortgage on plant assets70,400Prepaid expenses3,100Common stock84,000Plant assets, net153,300Retained earnings76,750Total assets$255,750Total liabilities and equity$255,750
* These are short-term notes receivable arising from customer (trade) sales.
Required:
Compute the following: (1) current ratio, (2) acid-test ratio, (3) days' sales uncollected, (4) inventory turnover, (5) days' sales in inventory, (6) debt-to-equity ratio, (7) times interest earned, (8) profit margin ratio, (9) total asset turnover, (10) return on total assets, and (11) return on common stockholders' equity. (Do not round intermediate calculations.)
Compute the return on total assets.
PART 32
Selected year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts at December 31, 2016, were inventory, $46,900; total assets, $229,400; common stock, $84,000; and retained earnings, $45,071.)
CABOT CORPORATION
Income Statement
For Year Ended December 31, 2017Sales$453,600Cost of goods sold298,050Gross profit155,550Operating expenses98,600Interest expense3,900Income before taxes53,050Income taxes21,371Net income$31,679
CABOT CORPORATION
Balance Sheet
December 31, 2017AssetsLiabilities and EquityCash$12,000Accounts payable$16,500Short-term investments8,000Accrued wages payable4,800Accounts receivable, net32,200Income taxes payable3,300Notes receivable (trade)*5,000Merchandise inventory42,150Long-term note payable, secured by mortgage on plant assets70,400Prepaid expenses3,100Common stock84,000Plant assets, net153,300Retained earnings76,750Total assets$255,750Total liabilities and equity$255,750
* These are short-term notes receivable arising from customer (trade) sales.
Required:
Compute the following: (1) current ratio, (2) acid-test ratio, (3) days' sales uncollected, (4) inventory turnover, (5) days' sales in inventory, (6) debt-to-equity ratio, (7) times interest earned, (8) profit margin ratio, (9) total asset turnover, (10) return on total assets, and (11) return on common stockholders' equity. (Do not round intermediate calculations.)
Compute the return on common stockholders' equity.
PART 33
The following calendar year-end information is taken from the December 31, 2017, adjusted trial balance and other records of Leone Company.
Advertising expense$31,800Direct labor$678,300Depreciation expenseOffice equipment10,300Income taxes expense243,800Depreciation expenseSelling equipment9,800Indirect labor57,400Depreciation expenseFactory equipment35,300Miscellaneous production costs10,200Factory supervision139,000Office salaries expense71,000Factory supplies used9,100Raw materials purchases948,000Factory utilities37,000Rent expenseOffice space25,000InventoriesRent expenseSelling space25,800Raw materials, December 31, 2016152,500Rent expenseFactory building79,600Raw materials, December 31, 2017179,000Maintenance expenseFactory equipment36,400Work in process, December 31, 201616,600Sales4,476,200Work in process, December 31, 201718,400Sales salaries expense391,800Finished goods, December 31, 2016169,200Finished goods, December 31, 2017139,000
Required:
1. Prepare the company's 2017 schedule of cost of goods manufactured.
PART 34
Required information[The following information applies to the questions displayed below.]
The following calendar year-end information is taken from the December 31, 2017, adjusted trial balance and other records of Leone Company.
Advertising expense$31,800Direct labor$678,300Depreciation expenseOffice equipment10,300Income taxes expense243,800Depreciation expenseSelling equipment9,800Indirect labor57,400Depreciation expenseFactory equipment35,300Miscellaneous production costs10,200Factory supervision139,000Office salaries expense71,000Factory supplies used9,100Raw materials purchases948,000Factory utilities37,000Rent expenseOffice space25,000InventoriesRent expenseSelling space25,800Raw materials, December 31, 2016152,500Rent expenseFactory building79,600Raw materials, December 31, 2017179,000Maintenance expenseFactory equipment36,400Work in process, December 31, 201616,600Sales4,476,200Work in process, December 31, 201718,400Sales salaries expense391,800Finished goods, December 31, 2016169,200Finished goods, December 31, 2017139,000
2. Prepare the company's 2017 income statement that reports separate categories for (a) selling expenses and (b) general and administrative expenses.
PART 35
Beginning inventoryMerchandise$312,000Finished goods$624,000Cost of purchases470,000Cost of goods manufactured850,000Ending inventoryMerchandise212,000Finished goods206,000
Compute cost of goods sold for each of these two companies for the year ended December 31, 2017.
PART 36
Beginning inventoryMerchandise$312,000Finished goods$624,000Cost of purchases470,000Cost of goods manufactured850,000Ending inventoryMerchandise212,000Finished goods206,000
Compute cost of goods sold for each of these two companies for the year ended December 31, 2017.
Compute cost of goods sold for the company year ended December 31, 2017 in Manufacturing Business.
PART 37
Woodwick Company issues 6%, five-year bonds, on December 31, 2016, with a par value of $98,000 and semiannual interest payments.
Semiannual Period-EndUnamortized PremiumCarrying Value(0)12/31/2016$8,071$106,071(1)6/30/20177,264105,264(2)12/31/20176,457104,457
Use the above straight-line bond amortization table and prepare journal entries for the following.
- (a) The issuance of bonds on December 31, 2016.
- (b) The first interest payment on June 30, 2017.
- (c) The second interest payment on December 31, 2017.
Record the issue of bonds with a par value of $98,000 cash on December 31, 2016.
PART 38
Woodwick Company issues 6%, five-year bonds, on December 31, 2016, with a par value of $98,000 and semiannual interest payments.
Semiannual Period-EndUnamortized PremiumCarrying Value(0)12/31/2016$8,071$106,071(1)6/30/20177,264105,264(2)12/31/20176,457104,457
Use the above straight-line bond amortization table and prepare journal entries for the following.
Record the first interest payment on June 30, 2017.
PART 39
Woodwick Company issues 6%, five-year bonds, on December 31, 2016, with a par value of $98,000 and semiannual interest payments.
Semiannual Period-EndUnamortized PremiumCarrying Value(0)12/31/2016$8,071$106,071(1)6/30/20177,264105,264(2)12/31/20176,457104,457
Use the above straight-line bond amortization table and prepare journal entries for the following.
- (a) The issuance of bonds on December 31, 2016.
- (b) The first interest payment on June 30, 2017.
- (c) The second interest payment on December 31, 2017
Record the second interest payment on December 31, 2017.
Expert Answer:
