#1, The following balance sheet was prepared by the bookkeeper for joseph Adeophonse company as of december 31th,2012′

                                      Joseph Adephones  cccompany                      Balance Sheet                       As of December `31,2012.                                                                   Cash      85,000   Account payable     90,000         Account Receivable (net) 52,000   Long term Liabilities   100,000         Inventory   57,000   Stockholders equity   218,500         Investment   76,000                   Equipment (net)   106,000                   Patent     32,000                         408,500         408,500                                 The following additional information is provided:                 1,,Cash include the cash surrender value of a life insurance policy $9,400 and a bank overdraft of $2,500has been deducted .   2, The net accounts receivable balance includes                  a, Account receivable -debit balances $60,000                 b, Account receivable -credit balance $4,000                 c, Allowance for doubtful accounts $3,800                   3, Inventory does not include goods  costing $3,000 shipped out on consignment received of $3,000, were recorded on these goods   4,Investment include include investment in common stock , trading $19,000 and available for sales $48,300 , and franchises $9,000   5, Equipment costing $5,000 with accumulated deperciation $4,000 is no longer uesd and is held foe sales . Accumulated  depreciation on the equipment is $40,000.                             Instruction                        Prepare a balance sheet  in good  form  i.e it must balance.                                         #2                         Selected Financial statement information. and addition data for Talib Company is presented below. Prepare a statement of cash flows for the foll   31, 2012.                                           December 31                      2011   2012                   Cash           $42,000                       Accounts receivable[net]         84,000   144,200                    Inventory           168,000   201,600                   Land           58,800   16,000                   Equipment           504,000   789,600             TOTAL           $856,800   $1,226,400                   Accumulated depreciation]       $84,000   $115,600                  Account payable         50,400   86,000                   Notes payable – Short-term       67,200   29,400                   Notes payable – Long-term         168,000   302,400                   Common stock         420,000   487,200                  Retained earning         67,200   205,800              TOTAL             $856,800   $1,226,400                                 Additional data for 2012:                     1. Net income was $240,200.                     2. Depreciation was $31,600.                     3. Land was sold at its original cost.                   4. Dividends of $101,600 were  paid.                   5. Equipment was purchased for $84,000 cash.                 6. Along-term note for $201,600 was used to pay for an equipment purchase.             7. Common stock was issued to pay a$67,200 long-term note payable.                                        #3 The trial balance before adjustment of Lucas Company reports the following balances:                                               Debit   Credit         Accounts receivable       $120,000             Allowance for doubtful accounts           730         Sales               $510,000         Sales returns and allowances       8,000                                          Give journal entries  assuming that the estimate of uncollectibless is determined by taking (1)      (1) 5% of  gross accounts        receivable and  able and (2) 1% of net sales.                                                                       #4 On December 31,2012,Durgapersad  Company finished consultation services and accepted in exchange a promissory note with a face value of $600,000, a due date of December 31, 2015, and a stated rate of 5%, with interest receivable at the end of each year. The fair value of the services is not readily determinable and the note  ory note   with a face value of $600,000, a due date of December 31, 2015, and a stated rate of 5%, with interest receivable  at the end of each year. The fair value of the services is not readily determinable and the note is not readily marketable  each year.The fair value of services is not readily determinable and the note is not  is readily marketable, Under t  . Under the circumstaces, the note is considered  to have anappropriate imputed rate of intrest of 10% rate of intrest of 10%. erst of 10% .                                         The following factor are provided .                               Intrest rate           Table factor for three periods.        5%   10%         Future Value of 1         1.15763   1.331         present Value of 1         0.86384   0.75132         futre value of ordinary Annuity of 1     3.1525   3.31         present Value of 1 value of ordinary annuity of 1     2.72325   2.48685                                   determine the present value of the note.                                             #5 French Leasing Company purchased specialized equipment from Bryant Company on December 31, 2013 for $400,000. On the same date,it leased this equipment to Holmes Company for 5 years, the useful life of the equipment. The lease payments begin january 1,2014 and are made every 6 months until july 1, 2018. French Leasing wants to earn 10% annually on its investment.                                       Various  Factors at 10%           Periods   Future    Present   Future Value of an   Present Value of an      or Rents   Value of $ 1   Value of $ 1 Ordinary Annuity   Ordinary Annuity     9   2.35795   0.4241   13.57948     5.75902       10   2.59374   0.38554   15.93743     6.14457       11   2.85312   0.35049   18.53117     6.49506                                          Various Factors at 5%                                          Periods      Future     Present   Future Value of an    Present Value of an      or Rents    Value of $ 1  Value of $ 1 Ordinary Annuity   Ordinary Annuity     9   1.55133   0.64461   11.02656     7.10782       10   1.62889   0.61391   12.57789     7.72173       11   1.71034   0.58468   14.20679     8.30641                               (a) Calculate the amount of each rent.                   (b) How much interest revenue will Frence earn in 2014?                                         #6 Abdulla Company owns a plot of land on which buried toxic wastes have been discovered.Since it will require several years and a   considerable sum of money before the property is fully detoxified and capable of generating revenues, Abdulla wishes to sell the land    now.He has located two potential buyers:Holmes, who is willing to pay $320,000 for the land now,and Watson,who is willing to make    20 annual payments of $50,000 each,With the first payment to be made 5 years from today. Assuming that the appropriate rate of     interest is 9%, to whom should Abdulla sell the land? Show ALL calculations.                                                                 #7 Raji Company sells TVs. The perpetual inventory was stated as $28,500 on the books at December 31,2012. At the close of the year,   a new approach for compiling inventory was used and apparently a satisfactory cut-off for preparation of financial statements was not    made.Some events that occurred are as follows.                                           1. TVs shipped to a customer january 2, 2013, coting $5,000 were included in inventory at December 31, 2012. The sale was recorded in 2013.  2. TVs costing $12,000 received December 30, 2012, were recorded as received on january 2, 2013.         3. TVs received during 2012 costing $4,600 were recorded twice in the inventory account.           4. TVs shipped to a customer December 28, 2012, f.o.b. shipping point, which cost $10,000, were not received by the customer until january,    2013. The TVs were included in the ending inventory.                 5. TVs on hand that cost $6,100 were never recorded on the books.                                         Compute the correct inventory at December 31, 2012.                                                                              #8 Jakes Company shows the following data related to an item of inventory.               Inventory, January 1   100 units @ $5.00               Purchashe, January 9   300 units @ $5.40               Purchashe, January 19     70 units @ $6.00               Inventory, January 31   100 units                                          (a) What value should be assigned to the ending inventory using FIFO?             (b) What value should be assigned to cost of goods sold using LIFO?                                                                 #9 Marino Company was formed on December 1, 2012. The following information is available from             Marino’s inventory record for product X.                                     Units   Unit cost       January 1, 2013 (beginning inventory)       1,600   $18.00       Purchases:                              January 5,2013           2,600   $20.00           January 25,2013           2,400   $21.00           February 16,2013            1,000   $22.00           March 15,2013           1,800   $23.00                                 A physical inventory on March 31, 2013, shows 2,500 units on hand.             Prepare schedules to compute the ending inventory at March 31, 2013, under each of the following         inventory methods  methods :                        (a)  FIFO.                         (b)  LIFO.                         (c) Weighted-average.                      

Show supporting computations in good form.

 

 

 

 

 

 

 

 

                                                                      #10 Halle Berry is presently leasing a small business computer from Jackson Office Equipment         Company. The lease requires 10 annual payments of $4,000 at the end of each year and provides          the lessor (Jaskson) with an 8% return on its investment. You may use the following 8%  interest         factors:                                   9 Periods 10 Periods  11 Periods           Future value of 1       1.999 2.15892 2.33164           Present value of 1       0.50025 0.46319 0.42888           Future value of Ordinary Annuity of 1   12.48756  14.48656   16.64549           Present value of Ordinary Annuity of 1   6.24689 6.71008 7.13896           Present value of Annuity Due of 1   6.74664    7.24689     7.71008                                    

 

 

 

 

 

 

(a) Assuming the computer has a ten-year life and will have no salvage value at the expiration

       

 of the lease, what was the original cost of the computer to Jackson?

 

 

 

 

 

 

                                      (b)What amount would each payment be if  the ten annual payments are to be made at the                   

   the beginning of each period?

 

                                                                                                                                                                                        #11  Holmes Manufacturing co. was incorporated on 1/2/13 but was unable to begin manufacturing activites  activities        until 8/1/13 because new factory facilities were not complete until that date .The Land and Buildings account        at 12/31/13 per the books was as follows:                       Date                             Item         Amount         1/31/2013                      Land and dilapidated building       $200,000         2/28/2013   Cost of removing building       4,000         4/1/2013    Legal fees                 6 ,000         5/1/2013    Fire insurance premium payment     5,400         5/1/2013   Special tax assessment for streets     4,500         5/1/2013   Partial payment of new building construction   170,000         8/1/2013   Final payment on building construction     170,000         8/1/2013   General expenses         30,000         12/31/2013   Asset Write-up         75,000                         $664,900         Additional information:                     1. To acquire the land and building on 1/13/13, the company paid $100,000 cash and 1,000 shares               of its common stock (par value=$100/share) which is very actively traded and had a fair value per               share of $140.                       2.  When the old building was removed,Holmes paid Berry Demolition Co. $4,000, but also received               $1,500 from the sale of salvaged material.                   3.   Legal fees covered the following:                               Cost of organization                                                                                                    $2,500                       Examination of title covering purchase of land                                                      2,000                       Legal work in connection with the building  construction                                   1,500                         $6,000           .4  The fire insurance premium covered premiums for a three-year term beginning May 1,2013.          5.  General expenses covered the following for the periods  d 1/2/13.                                 President’s salary                                                                             $20,000   $20,000                             Plant superintendent covering supervision of new building                       10,000 10,000                         $30,000           6.  Because of the rising land costs, the president was sure that the land was worth at least $75,000                 more than what it cost the company.                                              Determine the proper balances as at 12/31/13 for a separate land account and a separate building  buildings         account. Use separate T-accounts (one for land and one for buildings) labeling all the relevant amount ant          amounts and disclosing all computations.                                             #12 On May  31,2013, Holmes Company paid $3,300,000 to acquire all of the common stock of Berry                 Corporation, which became a division of Holmes.Berry reported the following balance sheets at                the time of the acquisition:                                   Current assets                $ 900,000                                          Current liabilities                         $  600,000                    Noncurrent assets          2,700,000     Long-term liabilities                        500,000                   Stockholders’ equity                   2,500,000                       Total liabilities and                        Total assets                     $3,600,000           stockholders’ equity          $3,600,000                                 It was determined at the date of the  purchase that the fair value of the indentifiable not assets of Berry was       $ 2,800,000.At December 31,2013, Berry reports the following balance sheet information:                       Current assets                                                                                                           $ 800,000                       Noncurrent assets(including goodwill recognized in purchase)                 2,400,000                       Current liabilities                                                                                                         (700,000)                        Long -term liabilities                                                                                                  (500,000)             Net assets                                                                                                     $2,000,000                                     It is determined that the fair value of the Hall division is $2,100,000. The recorded amount         for Berry’s net assets (excluding goodwill) is the same as fair value, except for property, plant,         and equipment, which has a fair value of $200,000 above the carrying value.                                       (a) Compute the amount of goodwill recognized, if any,on Monday 31,2013.             (b) Determine the impairment loss, if any, to  be recorded on December 31,             2013                         (c ) Assume that the fair value of the Berry’s division is $1,950,000 instead of                     $2,100,000. Prepare the journal entry to record the impairment loss, if any t loss,             if any, on Dcember 31,2013.                                                #13 On July 1, 2012, Holmes Company purchased for $2,880,000 snow-making              equipment having an estimated useful life of 5 years with an estimated salvage            value of $120,000. Depreciation is taking for the portion of the year the assets            is used.                                                      (a) Complete the form below by determining the depreciation expenses and the                     year end book values for 2012 and 2013 using the :                          1.      Sum-of-the -year’-digits method.                            2.       double-declining balance method.                                                  Sum-of-the-Years’-Digits Method     2012   2013              Equipment                                                                                    $2,880,000     $2,880,000              Less: Accumulated Depreciation                        Year-End Book Value                           Depreciation Expenses for the Year                                                  Double-Declining Balance Method                        Equipment                                                                                    $2,880,000                 $2,880,000                Less: Accumulated Depreciation                        Year-End Book Value                          Depreciation Expenses for the Year                                              (b) Assume the Company had used straight-line depreciation during 2012 and 2013.                  During 2014 ,the Company determined that the equipment would be useful to                   the  Company for only one more year beyond 2014. Salvage value is estimated at  $160,000. compute the amount of depreciation expense for the 2014 income statement.                           #14 Homes inc . Plans to aquire an additional machine on january 1, 2014   2014 to meet th grwoing demand for its product.      Berry company offers to provide the machines to Holmes using either of the option listed below (each option gives Holmes exactly the same machines and gives Berry company approximately the same net present value cash equivalent at 10%) option 1- Cash purchase $1,600,000                   Opttion 2- installation purchase requiring 15 annual payments of $210,358 due December 31 each year .                                 the expected economic life of this machines to Holmes is 15 years. Salvage value at that time is extimated to be $100,000. straight line depreciation is used . Intrest expense under option 2 is computed using the effective intrest method.                           INSTRUCTION                       Based upon current generally accepted accounting principles ,state how ,if at all the book value of the machine and the liabilty should appear on the December 31,2014 balaqnce sheet of Holmes inc, for each option. Present your answer on an answer sheet in the following format. if an item should not appear in the following balance sheet , write “not shown” opposite the option.                                     Assets       Liabilties         Option1       Account name Amount   account name Amount                               option 2                                                                             #15 Holmes co.acquired a truck on july 1,2010. at a cost of $162,000. the truck had a six -year useful life and an estimated salvage value of $18,000. The straight-line method of depreciation was used. On January 1,2013. the truck was overhalted at a cost of $15,000, which extended the useful life of the truck fo an additional two year beyound that originally estimated (salvage value is still estimated at $18,000) . in computing depreciation for annual adjustment purposes, expense is calculated for each month the asset is owned.                           Instructions                         prepare the appropriate entries for January1,2013 and december 31,2013.                                                                 #16 Holmes manufacturing company decided to expand further by purchasing Berry company. The balance sheet of Berry company as of December 31,2013 was as follows.       BERRY COMPANY                       balance sheet                       December31,2013.                 Assets           liabilities and Equities         cash     210,000     Account payable 375,000         Receivable     550,000     common stock 800,000         Inventory     275,000     Retained earnings 885,000         plant Assets (net)   1,025,000                   Total assets     $2,060,000     Total Liabilies and equities2,060,000                                 An appraisal, agreed to by the parties ,indicated that the fair value of the invetory was $350,000 and the fair value of the plant assets was $1,325,000 the fair value of the receivable is equal to the amount reported on the balance sheet, the agreed purchase price was $2,275,000 and this amount was paid in cash to the previous owners of berry company. Instruction.                         Determine the amount of goodwill (if any)implied in the purchase prise of $2,275,000                                     #17 Holmes company exchange machinery with any appraised value of $2,925,000 a recorded cost of $4,500,000 and accumulated depreciation of $2,250,000 will Berry corporation for machinery Berry owns. The company has an appraised valu of $$2,825,000. a recorded cost of $5,400,00,and accumulated depreciation of $2,970,000. Berry also give Holmes $100,000 in the exchange. Assume depreciation has already been updated.                           Instruction                         prepared the entries on both companies books assuming that the exchange HAS commercial subtstance .(round all computation to the nearest dollar.) B perpared the entries on both companies’books assuming that the exchange LACKS commercial substance (round all computation to the nearest doller.                                                     $18 In early January 2011, Holmes corporation appalied for a patent ,incuring legal cost of $40,000, in January 2012. Holmes incured $9,000 of  legal fees in a successful defense of its patent.                                           Instructions                         a compute 2011 amortation 12/31/11 carring value 2012 amortization.             and 12/31/12 carrying value if the company amortizes the patent over 10 year.                                     b Compute the 2013 amortization and the 12/31/13 carrying the value , assuming  that at the beginning of 2013 . Based on new market   research , Holmes determines that the value of the patent $34,000. Estimated future cash flows from the patent are $35,000 on January 3,2013.                           #19 On april 1, Holmes co, began construction of a small bulding .payment of $180,000 were made monthly for four months beginning on april 1.The building wa was completed and ready for occupancy on August 1. for the purpose of determinning the amount of intrest cost to be capitaliszed ,calculate the weighted average accumulated expenditure on the building by completing the schedule below.                             Date Expenditure Capitalization Period weighted Avg Expenditures                                                           #20 During  2012 and 2013, Berry corporation experience several transactions involving plant assets. A number of error where made in recording some of these transactions. For each items listed below , indicate the effect of the error (if any) in the blanks provided by using the following codes;                           o=overstate; U=Understate; NE=No Effect                                             If no error was made , write NE in each of the four columns.                                                                                 2012     2013                   Net Book                         value of                         plant 2012                       Assets net                       12/31/2012 income