Answer:
The entries to record the transactions are given below.
a. Provide music lessons to students for $7,000 cash.
Debit Cash Asset $ 7000
CreditService Revenue income $ 7000
b. Purchase prepaid insurance to protect musical equipment over the next year for $3,000 cash.
Debit Prepaid Insurance equipment Asset $ 3000
Credit Cash Asset $ 3000
c. Purchase musical equipment for $10,000 cash.
Debit Equipment Asset $ 10,000
Credit Cash Asset $ 10,000
d. Obtain a loan from a bank by signing a note for $10,000
Debit Cash Asset $ 10,000
Credit Notes payable $ 10,000
Answer:
No Journal entries will be required in either instance. But a note to the financial statement would be appropriate in explaining the declining stake in Marmon Inc.
Explanation:
A. Total share valuation was $1,000,000. ($900,000 + $110,000) which is made up of Albuquerque's holdings and the non controlling interests. This is equivalent holding of 89% by Albuquerque.
*the investment would have been recognized at cost to Albuquerque at $900,000.
But when Marmon sold additional 10,000 shares the interest reduces to 63%
*This wouldn't necessitate any journal entry by Albuquerque as a result of the additional issues of shares but the % stake in Marmon would show to have reduced as a note in its financial records.
And when a further 2,000 was issued Albuquerque stake drops to 61%
* Again this wouldn't necessitate any journal entry by Albuquerque as a result of the additional issues of shares but the % stake in Marmon would show to have reduced as a note in its financial records.
Answer:
$450,000
Explanation:
Theodore Enterprises had the following pretax income (loss) over its first three years of operations:
2016 $ 500,000
2017 (900,000 )
2018 1,500,000
For each year there were no deferred income taxes and the tax rate was 30%. In its 2017 tax return, Theodore elected a net operating loss carryback. No valuation account was deemed necessary for the deferred tax asset as of December 31, 2017.
Therefore Theodore's income tax expense for 2018 is 30% x 1,500,000 = $450,000
Loss carry back is when a business elects to net off losses against a previous year's return as opposed to loss carry forward which is the future years' return.
Answer:
Additional money, the firm have 4 years from now if it can earn 5 percent rather than 4 percent on its savings will be $3,423.
Explanation:
Principal Amount = P = $75,000
Number of year = n = 4 years
If rate of return is 4%
A = P ( 1 + r )^n
A = $75,000 ( 1 + 0.04 )^4
A = $75,000 x 1.16986
A = $87,740
If rate of return is 5%
A = P ( 1 + r )^n
A = $75,000 ( 1 + 0.05 )^4
A = $75,000 x 1.21551
A = $91,163
Additional Amount Earned = $91,163 - $87,740 = $3,423
Answer:
RECROOM EQUIPMENT COMPANY
Date Description DR CR
a. Nov 1 Note Receivable 8000
Allowance on debt 1,200
Account Receivable 9,200
<em> Being the settlement of customers deb</em>t
b. Dec 31 Interest receivable 120
Interest Income 120
<em>Being the interest accrued at the year end </em>
<em />
c. 30 April Cash 720
Interest receivable 120
Interest income 600
<em>Being the receipt of interest at maturity date</em>
<em />
d. April 30 Cash 8000
Note receivable 8,000
<em>Being the settlement of principal at maturity </em>
Explanation:
