Business
Steve Reese is a well-known interior designer in Fort Worth, Texas. He wants to start his own business and convinces Rob ODonnell, a local merchant, to contribute the capital to form a partnership. On January 1, 2016, ODonnell invests a building worth $130,000 and equipment valued at $140,000 as well as $60,000 in cash. Although Reese makes no tangible contribution to the partnership, he will operate the business and be an equal partner in the beginning capital balances.To entice O'Donnell to join this partnership, Reese draws up the following profit and loss agreement:- O'Donnell will be credited annually with interest equal to 10 percent of the beginning capital balance for the year- O'Donnell will also have added to his capital account 15 percent of partnership income each year (without regard for the preceding interest figure) or $7,000, whichever is larger. All remaining income is credited to Reese.- Neither partner is allowed to withdraw funds from the partnership during 2013. Thereafter, each can draw $5,000 annually or 20 percent of the beginning capital balance for the year, whichever is larger.The partnership reported a net loss of $8,000 during the first year of its operation. On January 1, 2014, Terri Dunn becomes a third partner in this business by contributing $10,000 cash to the partnership. Dunn receives a 20 percent share of the business's capital. The profit and loss agreement is altered as follows:- O'Donnell is still entitled to (1) interest on his beginning capital balance as well as (2) the share of partnership income just specified.- Any remaining profit or loss will be split on a 5:5 basis between Reese and Dunn, respectively.Partnership income for 2014 is reported as $64,000. Each partner withdraws the full amount that is allowed. On January 1, 2015, Dunn becomes ill and sells her interest in the partnership (with the consent of the other two partners) to Judy Postner. Postner pays $75,000 directly to Dunn. Net income for 2015 is $64,000 with the partners again taking their full drawing allowance On January 1, 2016, Postner withdraws from the business for personal reasons. The articles of partnership state that any partner may leave the partnership at any time and is entitled to receive cash in an amount equal to the recorded capital balance at that time plus 10 percenta. Prepare journal entries to record the preceding transactions on the assumption that the bonus (or no revaluation) method is used. Drawings need not be recorded, although the balances should be included in the closing entries. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to the nearest dollar amount.)b. Prepare journal entries to record the previous transactions on the assumption that the goodwill (or revaluation) method is used. Drawings need not be recorded, although the balances should be included in the closing entries. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to the nearest dollar amount.)
The following is the ending balances of accounts at December 31, 2021, for the Weismuller Publishing Company. Account Title Debits Credits Cash $91,000 Accounts receivable 186,000 Inventory 298,000 Prepaid expenses 174,000 Equipment 346,000 Accumulated depreciation $123,000 Investments 166,000 Accounts payable 73,000 Interest payable 33,000 Deferred revenue 93,000 Income taxes payable 43,000 Notes payable 265,000 Allowance for uncollectible accounts 29,000 Common stock 413,000 Retained earnings 189,000 Totals $1,261,000 $1,261,000 Additional information: 1. Prepaid expenses include $146,000 paid on December 31, 2021, for a two-year lease on the building that houses both the administrative offices and the manufacturing facility. 2. Investments include $43,000 in Treasury bills purchased on November 30, 2021. The bills mature on January 30, 2022. The remaining $123,000 is an investment in equity securities that the company intends to sell in the next year. 3. Deferred revenue represents customer prepayments for magazine subscriptions. Subscriptions are for periods of one year or less. 4. The notes payable account consists of the following: a. a $53,000 note due in six months. b. a $134,000 note due in six years. c. a $78,000 note due in three annual installments of $26,000 each, with the next installment due August 31, 2022. The common stock account represents 413,000 shares of no par value common stock issued and outstanding. The corporation has 826,000 shares authorized.Required:Prepare a classified balanced sheet for the Weismuller Publishing Company at December 31, 2021.
A machine cost $1,238,000 on April 1, 2020. Its estimated salvage value is $139,200 and its expected life is 4 years. Calculate the depreciation expense by straight-line for 2020. (Round answer to 0 decimal places, e.g. 5,275.) Depreciation expense $ Calculate the depreciation expense by double-declining balance for 2021. (Round answer to 0 decimal places, e.g. 5,275.) Depreciation expense $ Calculate the depreciation expense by sum-of-the-years'-digits for 2021. (Round answer to 0 decimal places, e.g. 5,275.) Depreciation expense $ Which method would result in the smallest income amount for 2021
The Weigelt Corporation has three branch plants with excess production capacity. Fortunately, the corporation has a new product ready to begin production, and all three plants have this capability, so some of the excess capacity can be used in this way. This product can be made in 3 sizes (large, medium, and small) that yield a net unit profit of $420, $360, and $300, respectively. Plants 1, 2, and 3 have the excess capacity to produce 750, 900, and 450 units per day of this product, regardless of the size or combination of sizes involved. The amount of available in-process storage space also imposes a limitation on the production rates of the new product. Plants 1, 2, and 3 have 13,000, 12,000, and 5,000 square feet of inprocess storage available for a days production of this product. Each unit of the large, medium, and small sizes produced per day requires 20, 15, and 12 square feet, respectively. Sales forecasts indicate that if available, 900, 1200, and 750 units of the large, medium, and small sizes would be sold per day. At each plant, some employees will need to be laid off unless most of the plants excess production capacity can be used to produce the new product. To avoid layoffs if possible, management has decided that the plants should use the same percentage of their excess capacity to produce the new product. Management wishes to know how much of each size should be produced by each plant to maximize profit.Required:1. Formulate and solve a linear programming model for this mixed problem on a spreadsheet.2. Express the model in algebraic form.
Described below are certain transactions of Crane Company for 2021: 1. On May 10, the company purchased goods from Fox Company for $76,800, terms 2/10, n/30. Purchases and accounts payable are recorded at net amounts. The invoice was paid on May 18. 2. On June 1, the company purchased equipment for $94,800 from Rao Company, paying $33,600 in cash and giving a one-year, 9% note for the balance. 3. On September 30, the company discounted at 11% its $200,000, one-year zero-interest-bearing note at Virginia State Bank, receiving $180,000.Required:(a) Prepare the journal entries necessary to record the transactions above using appropriate dates.
Nolte Co. has 4,800,000 shares of common stock outstanding on December 31, 2012. An additional 200,000 shares are issued on April 1, 2013, and 480,000 more on September 1. On October 1, Nolte issued $6,000,000 of 9% convertible bonds. Each $1,000 bond is convertible into 40 shares of common stock. No bonds have been converted. The number of shares to be used in computing basic earnings per share and diluted earnings per share on December 31, 2013 is Group of answer choices 5,110,000 and 5,110,000. 5,110,000 and 5,170,000. 5,110,000 and 5,350,000. 5,880,000 and 5,320,000.
