Epic machinery only applies to epics from the Western traditions that consciously imitate Homer.

Power Drive Corporation designs and produces a line of golf equipment and golf apparel. Power Drive has 100,000 shares of common

notka56 [123]

Answer:

Power Drive Corporation

Journal Entries:

March 1:

Debit Cash Account with $2,548,000

Credit Common Stock with $52,000

Credit APIC - Common Stock with $2,496,000

To record issue of 52,000 additional shares of $1 par value common stock for $49 per share.

May 10:

Debit Treasury Stock with $4,700

Debit APIC - Common Stock with $239,700

Credit Cash Account with 244,400

To record repurchase of 4,700 shares of treasury stock for $52 per share.

June 1:

Debit Dividends- Common Stock with $198,855

Credit Dividends Payable with $198,855

To record cash dividend of $1.35 per share declared (147,300 shares).

June 15:

No records required

July 1:

Debit Dividends Payable with $198,855

Credit Cash Account with $198,855

To record payment of cash dividend.

October 21:

Debit Cash Account with $133,950

Credit Treasury Stock with $2,350

Credit APIC - Common Stock with $131,600

To record reissue of treasury stock for $57 per share.

Explanation:

1. Issue of 52,000 additional shares results to a credit to the Common Stock account with 52,000 x $1 par value. This is equal to $52,000. The additional $48 x 52,000 goes to the Additional Paid-in Capital.

2. Treasury stock is the repurchase of outstanding stock by the company. When repurchase at more than the par value, the difference is a debit to the Additional Paid-in Capital account, when the par value method is adopted. The other method, which records the whole costs in the Treasury Stock account is the cost method. Remember that the Treasury Stock account is a contra account to the Common Stock account.

3. Dividends are payable on outstanding stock. The outstanding stock on June 1 to June 15 is calculated as follows:

Opening balance = 100,000 shares

New issue = 52,000 shares

less Treasury = (4,700)

Total = 147,300 shares

Dividends are then payable on 147,300 shares at $1.35 per share. This gives a total of $198,855.

4. The resale of Treasury stock reduces the balance of the treasury stock account at par value and increases the Additional Paid-in Capital account with the premium.

3 0

3 years ago

Zhang Industries sells a product for $750. Unit sales for May were 400 and each month's sales are expected to grow by 3%. Zhang

Colt1911 [192]

Answer:

Total= $292,520

Explanation:

Giving the following information:

Zhang Industries sells a product for $750. Unit sales for May were 400 and each month's sales are expected to grow by 3%. Zhang pays a sales manager a monthly salary of $4,000 and a commission of 2% of sales in dollars. Assume 30% of Zhang's sales are for cash. The remaining 70% are credit sales; these customers pay in the month following the sale.

Cash budget for June:

Sales= [(400*1.03)*750]*0.3= 92,700

Sales from May= (400*750)*0.7= 210,000

Salary= (4,000)

Commision= [(400*1.03)*750]*0.02= (6,180)

Total= $292,520

6 0

3 years ago

Chester's product manager is considering lowering the price of the Cone product by $2.50 and wants to know what the impact will

lozanna [386]

Answer:

The contribution margin will decrease by 2.50

Explanation:

$Sales \: Revenue - Variable \: Cost = Contribution \: Margin$

IF sales decreases, then the contribution margin decreases.

That's because, there is less money to pay for the variable cost.

The company will also have to sale more units to break even, as now each units contribution is fewer.

Cone's should evaluate how much their sales are expected to increase for the lower price and be cautious

7 0

3 years ago

How does inflation hurt your savings?

siniylev [52]

Answer:

have to spend more money

Explanation:

4 0

2 years ago

a new hockey arena at a cost of $2,500,000. It received a downpayment of $500,000 from local businesses to support the project a

mylen [45]

Answer:

a. Prepare the journal entry to record the issuance of the bonds on January 1, 2018

we must first determine the market price of the bonds:

PV of face value = $2,000,000 / (1 + 5%)²⁰ = $753,778.97 ≈ $753,779

PV of coupon payments = $110,000 x 12.462 (PV annuity factor, 5%, 20 periods) = $1,370,820

market value of the bonds = $753,779 + $1,370,820 = $2,124,599

January 1, 2018, bonds are issued at a premium

Dr Cash 2,124,599

Cr Bonds payable 2,000,000

Cr Premium on bonds payable 124,599

b. Prepare a bond amortization schedule up to and including January 1, 2022

since we are not told which amortization method to use, I will use the straight line method.

Date Interest Cash Premium Carrying

expense paid amortization value

7/2018 $103,770 $110,000 $6,230 $2,118,369

1/2019 $103,770 $110,000 $6,230 $2,112,139

7/2019 $103,770 $110,000 $6,230 $2,105,909

1/2020 $103,770 $110,000 $6,230 $2,099,679

7/2020 $103,770 $110,000 $6,230 $2,093,449

1/2021 $103,770 $110,000 $6,230 $2,087,219

7/2021 $103,770 $110,000 $6,230 $2,080,989

1/2022 $103,770 $110,000 $6,230 $2,074,759

c. Prepare the journal entries to record the interest payments on January 1, 2020 and January 1, 2021.

bond premium amortization per coupon = 124,599 / 20 = $6,229.95 ≈ $6,230

January 1, 2020, coupon payment

Dr Interest expense 103,770

Dr Premium on bonds payable 6,230

Cr Cash 110,000

January 1, 2021, coupon payment

Dr Interest expense 103,770

Dr Premium on bonds payable 6,230

Cr Cash 110,000

d. Prepare the journal entry to record the bond called on January 2021 at 106

Dr Bonds payable 2,000,000

Dr Premium on bonds payable 87,219

Dr Loss on retirement of debt 32,781

Cr Cash 2,120,000

5 0

3 years ago