Marin Inc. manufactures cycling equipment. Recently, the vice president of operations of the company has requested construction of a new plant to meet the increasing demand for the company's bikes. After a careful evaluation of the request, the board of directors has decided to raise funds for the new plant by issuing $2,000,000 of 12% term corporate bonds on March 1, 2019, due on March 1, 2029, with interest payable each March 1 and September 1, with the first interest payment on September 1st, 2019. At the time of issuance, the market interest rate for similar financial instruments is 10%. The following present value factors are available: 385 Present value of 1 for 10 periods at 10%. Present value of 1 for 10 periods at 12% ....... 322 377 Present value of 1 for 20 periods at 5%..... Present value of 1 for 20 periods at 6%... 312 6.145 5.650 Present value of annuity for 10 periods at 10% - Present value of annuity for 10 periods at 12%. Present value of annuity for 20 periods at 5% .. Present value of annuity for 20 periods at 6%... 12.462 11.470 Required: Compute the amounts requested and enter your answer in the space provided below: 1. The present value of the face value of the bonds 2. The present value of interest payments 3. The selling price of the bond On July 1, 2019, Buddy Inc. made two sales. 1. It sold land having a fair value of $635,520 in exchange for a 4-y value of $635,520 in exchange for a 4-year zero-interest-bearing promissory note in the face amount of $1,000,000. The land is carried on of $500,000. 2. It rendered services in exchange for a 3%, 8-year promissory note having a face value of $800,000 (interest payable annually). The customers in these two transactions have credit ratings that require them to borrow money at 12% interest. Present value factors are: Present value of 1 for 4 periods @ 12% 0.63552 Present value of 1 for 8 periods @ 12% 0.40388 Present value of an ordinary annuity for 8 periods @ 12% 4.96764 Record the two journal entries that should be recorded by Buddy Inc. for the sales transactions above that took place on July 1, 2019. Enter your journal entries below On October 1, 2019, Zoe, Inc. assigns $1,000,000 of its accounts receivable to Buddy National Bank as collateral for a $700,000 note. The bank assesses a finance charge of 4% of the receivables assigned and interest on the note of 9%. Prepare the October 1 journal entries for both Zoe and Buddy. Zoe, Inc. Buddy National Bank Sandy Company reports the following financial information before adjustments. Dr. Cr. $200,000 Accounts Receivable Allowance for Doubtful Accounts Sales Revenue (all on credit) Sales Returns and Allowances $4,000 900,000 50,000 Prepare the journal entry to record bad debt expense assuming Sandy Company estimates bad debts at (a) 5% of accounts receivable and (b) 5% of accounts receivable but Allowance for Doubtful Accounts had a $2,000 debit balance. Problem 5 (12%) Crystal Industries purchased $10,000 of merchandise on March 1, 2019, subject to a trade discount of 10% and with credit terms of 3/15, n/60. It returned $2,000 (gross price before trade or cash discount) on March 4. The invoice was paid on March 12. Assuming that Crystal uses the perpetual method for recording merchandise transactions, record the purchase, return, and payment using the gross method. March 1 March 4 March 12 Assuming that Crystal uses the periodic method for recording merchandise transactions, record the purchase, return, and payment using the gross method March 1 March 4 March 12 Presented below are a series of unrelated situations. Answer the questions relating to each of the five independent situations as requested. 1. Rajib Company's unadjusted trial balance at December 31, 2019, included the following accounts. Credit Accounts receivable Allowance for doubtful accounts Net sales Debit $53,300 $4,950 $1,232,500 Rajib Company estimates uncollectible accounts to be 6% of gross accounts receivable. Determine its bad debt expense for 2019. bad debt expense for 2019 2. An analysis and aging of Amanda Corp. accounts receivable at December 31, 2019, disclosed the following Amounts estimated to be uncollectible $ 182,300 Accounts receivable 1,786,000 Allowance for doubtful accounts (per books) 126,040 What is the net realizable value of Amanda's receivables at December 31, 20197 The net realizable value 3. Daguon Co. provides for doubtful accounts based on 2% of gross accounts receivable. The following data are available for 2019. Credit sales during 2019 Bad debt expense Allowance for doubtful accounts 1/1/19 Collection of accounts written off in prior years (customer credit was reestablished) Customer accounts written off as uncollectible during 2019 $3,912,600 57,110 16,250 8,520 28,190 What is the balance in Allowance for Doubtful Accounts at December 31, 2019? The balance in Allowance for Doubtful Accounts 4. At the end of its first year of operations, December 31, 2019, John Dibello Inc. reported the following information. Accounts receivable, net of allowance for doubtful accounts Customer accounts written off as uncollectible during 2019 Bad debt expense for 2019 $867,500 24,140 90,280 What should be the balance in accounts receivable at December 31, 2019, before subtracting the allowance for doubtful accounts? Accounts receivable, before deducting allowance for doubtful accounts 5 The following accounts were taken from Damico Inc.'s trial balance at December 31, 2019. Debit Credit $730,700 Net credit sales Allowance for doubtful accounts Accounts receivable $15,060 317,800 ounts are 3% of accounts receivable, determine the bac determine the bad debt expense to be reported If doubtful accounts are e for 2019 debt expense, as adjusted The bad debt expen The following is a record of Bonita Company's transactions for Boston Teapots for the month of May 2019. May 1 Balance 480 units @ $19 May 10 Sale 360 units $38 12 Purchase 720 units @ $25 20 Sale 648 units @ $38 28 Purchase 480 units @ $31 Assuming that perpetual inventories are not maintained and that a physical count at the end of the month shows 672 units on hand, what is the cost of the ending Inventory and the cost of goods sold using (1) FIFO and (2) LIFO? (1) FIFO (2) LIFO Ending Inventory Cost of goods sold Assuming that perpetual records are maintained and they tle into the general ledger, calculate the ending inventory and the cost of goods sold using LIFO. (1) LIFO Ending Inventory PURCHASED BALANCE SOLD DATE Marin Inc. manufactures cycling equipment. Recently, the vice president of operations of the company has requested construction of a new plant to meet the increasing demand for the company's bikes. After a careful evaluation of the request, the board of directors has decided to raise funds for the new plant by issuing $2,000,000 of 12% term corporate bonds on March 1, 2019, due on March 1, 2029, with interest payable each March 1 and September 1, with the first interest payment on September 1st, 2019. At the time of issuance, the market interest rate for similar financial instruments is 10%. The following present value factors are available: 385 Present value of 1 for 10 periods at 10%. Present value of 1 for 10 periods at 12% ....... 322 377 Present value of 1 for 20 periods at 5%..... Present value of 1 for 20 periods at 6%... 312 6.145 5.650 Present value of annuity for 10 periods at 10% - Present value of annuity for 10 periods at 12%. Present value of annuity for 20 periods at 5% .. Present value of annuity for 20 periods at 6%... 12.462 11.470 Required: Compute the amounts requested and enter your answer in the space provided below: 1. The present value of the face value of the bonds 2. The present value of interest payments 3. The selling price of the bond On July 1, 2019, Buddy Inc. made two sales. 1. It sold land having a fair value of $635,520 in exchange for a 4-y value of $635,520 in exchange for a 4-year zero-interest-bearing promissory note in the face amount of $1,000,000. The land is carried on of $500,000. 2. It rendered services in exchange for a 3%, 8-year promissory note having a face value of $800,000 (interest payable annually). The customers in these two transactions have credit ratings that require them to borrow money at 12% interest. Present value factors are: Present value of 1 for 4 periods @ 12% 0.63552 Present value of 1 for 8 periods @ 12% 0.40388 Present value of an ordinary annuity for 8 periods @ 12% 4.96764 Record the two journal entries that should be recorded by Buddy Inc. for the sales transactions above that took place on July 1, 2019. Enter your journal entries below On October 1, 2019, Zoe, Inc. assigns $1,000,000 of its accounts receivable to Buddy National Bank as collateral for a $700,000 note. The bank assesses a finance charge of 4% of the receivables assigned and interest on the note of 9%. Prepare the October 1 journal entries for both Zoe and Buddy. Zoe, Inc. Buddy National Bank Sandy Company reports the following financial information before adjustments. Dr. Cr. $200,000 Accounts Receivable Allowance for Doubtful Accounts Sales Revenue (all on credit) Sales Returns and Allowances $4,000 900,000 50,000 Prepare the journal entry to record bad debt expense assuming Sandy Company estimates bad debts at (a) 5% of accounts receivable and (b) 5% of accounts receivable but Allowance for Doubtful Accounts had a $2,000 debit balance. Problem 5 (12%) Crystal Industries purchased $10,000 of merchandise on March 1, 2019, subject to a trade discount of 10% and with credit terms of 3/15, n/60. It returned $2,000 (gross price before trade or cash discount) on March 4. The invoice was paid on March 12. Assuming that Crystal uses the perpetual method for recording merchandise transactions, record the purchase, return, and payment using the gross method. March 1 March 4 March 12 Assuming that Crystal uses the periodic method for recording merchandise transactions, record the purchase, return, and payment using the gross method March 1 March 4 March 12 Presented below are a series of unrelated situations. Answer the questions relating to each of the five independent situations as requested. 1. Rajib Company's unadjusted trial balance at December 31, 2019, included the following accounts. Credit Accounts receivable Allowance for doubtful accounts Net sales Debit $53,300 $4,950 $1,232,500 Rajib Company estimates uncollectible accounts to be 6% of gross accounts receivable. Determine its bad debt expense for 2019. bad debt expense for 2019 2. An analysis and aging of Amanda Corp. accounts receivable at December 31, 2019, disclosed the following Amounts estimated to be uncollectible $ 182,300 Accounts receivable 1,786,000 Allowance for doubtful accounts (per books) 126,040 What is the net realizable value of Amanda's receivables at December 31, 20197 The net realizable value 3. Daguon Co. provides for doubtful accounts based on 2% of gross accounts receivable. The following data are available for 2019. Credit sales during 2019 Bad debt expense Allowance for doubtful accounts 1/1/19 Collection of accounts written off in prior years (customer credit was reestablished) Customer accounts written off as uncollectible during 2019 $3,912,600 57,110 16,250 8,520 28,190 What is the balance in Allowance for Doubtful Accounts at December 31, 2019? The balance in Allowance for Doubtful Accounts 4. At the end of its first year of operations, December 31, 2019, John Dibello Inc. reported the following information. Accounts receivable, net of allowance for doubtful accounts Customer accounts written off as uncollectible during 2019 Bad debt expense for 2019 $867,500 24,140 90,280 What should be the balance in accounts receivable at December 31, 2019, before subtracting the allowance for doubtful accounts? Accounts receivable, before deducting allowance for doubtful accounts 5 The following accounts were taken from Damico Inc.'s trial balance at December 31, 2019. Debit Credit $730,700 Net credit sales Allowance for doubtful accounts Accounts receivable $15,060 317,800 ounts are 3% of accounts receivable, determine the bac determine the bad debt expense to be reported If doubtful accounts are e for 2019 debt expense, as adjusted The bad debt expen The following is a record of Bonita Company's transactions for Boston Teapots for the month of May 2019. May 1 Balance 480 units @ $19 May 10 Sale 360 units $38 12 Purchase 720 units @ $25 20 Sale 648 units @ $38 28 Purchase 480 units @ $31 Assuming that perpetual inventories are not maintained and that a physical count at the end of the month shows 672 units on hand, what is the cost of the ending Inventory and the cost of goods sold using (1) FIFO and (2) LIFO? (1) FIFO (2) LIFO Ending Inventory Cost of goods sold Assuming that perpetual records are maintained and they tle into the general ledger, calculate the ending inventory and the cost of goods sold using LIFO. (1) LIFO Ending Inventory PURCHASED BALANCE SOLD DATE