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blondinia [14]
3 years ago
10

Salad Express exchanged land it had been holding for future plant expansion for a more suitable parcel of land along distributio

n routes. Salad Express reported the old land on the previously issued balance sheet at its original cost of $79,000. According to an independent appraisal, the old land currently is worth $150,000. Salad Express paid $23,500 in cash to complete the transaction.
Required
1. What is the fair value of the new parcel of land received by Salad Express?
2. Record the exchange.
Business
1 answer:
r-ruslan [8.4K]3 years ago
5 0

Answer:

1.  $173,500

2. $ 71,000

Explanation:

Requirement 1: Solution

We can calculate the fair value of new parcel of land just by adding the current market price with additional cash paid to complete the transaction

Fair Value = Current market price + cash paid additionally

Fair Value = $150,000+$23,500

Fair value = $173,500

Requirement 2: Solution

We need to calculate Gain/loss on exchange first in order to record them on books. This can be done by just subtracting the land's book value from the current market price of land

Gain/loss on exchange = Current market price - book value

Gain/loss on exchange = $150,000 - $79,000

Gain/loss on exchange = $71,000

Entries:               Debit                          Credit  

New land           $173,500

Old land                                                 $79000

Cash                                                       $23,500

Gain                                                        $71,000

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A.Start a moderate portfolio and shift to high risk later in life.

Explanation:

Investment portfolio may be defined as the financial investments done by one. It is the collection or ownership of various assets and stocks, bonds, real estates, cash, etc.

In the context, Regina who is 25 year old wishes to start an investment plan. For this her financial advisor may suggest her to start her investment in a moderate portfolio and then later may shift to a high risk portfolio. This is because Regina is young and is new to investment. She is not experience enough to invest in high risk portfolio. When she gains knowledge about investments in her life then she can properly plan her investment in order to achieve maximum profit.

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The following refers to units processed by a breakfast cereal maker in August. Compute the total equivalent units of production
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Answer:

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Explanation:

Giving the following information:

Units completed 620,000 100%

Ending Work in Process 180,000 70%

<u>The weighted average method blends the costs and units of the previous period with the costs and units of the current period.</u>

<u></u>

Units completed in the period + Equivalent units in ending inventory WIP (units*%completion) = Equivalent units of production

Equivalent units of production= 620,000 + (180,000*0.7)

Equivalent units of production= 746,000 units

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3 years ago
A cash register tape reflected total sales equaling $100, but the cash in the cash register drawer equaled $105. Review the stat
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Answer:

The answer is given below;

Explanation:

The $ 5 collected will be treated as miscellaneous revenue.The cash over and short account will be credited for $5.

As the cash receipts are $ 105 and sales revenue is $100.The difference amount will be treated as miscellaneous revenue.

The journal entry will be;

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Answer:

1. The company's shareholders and management are the stakeholders in this circumstance.

2-a. The president's request is unethical.

2-b. Zoe's action is unethical.

3. It is possible for Zoe to accrue revenues and defer expenses while remaining ethical.

4. Again, it is possible for Zoe to accrue revenues and defer expenses while remaining ethical.

5. The person that can discover Zoe’s accrued revenues and deferred expenses is the auditor

Explanation:

1. Who are the stakeholders in this situation?

The company's shareholders and management are the stakeholders in this circumstance. The reason is that, in this circumstance, manipulating the company's profitability will have a direct impact on stock prices, which will affect the company's shareholders. The company's management is also a stakeholder in this scenario because they are involved in decision-making and make accounting-related choices and changes to the books of accounts. Lenders, employees, vendors, and lenders are secondary or non-primary stakeholders who will be impacted by the decision of the management to accrue as much revenue as feasible and defer every possible expenses.

2. What are the ethical considerations of (a) the president’s request and (b) Zoe dating the adjusting entries December 31?

2-a. The president's proposal goes against sound accounting practices. This will be interpreted as an attempt to window dress and manipulate accounting entries by the management in order to present a profit figure that is higher than reality. This is unethical behavior.

2-b. Zoe's decision to date the adjusting entries December 31 rather than January 17 was carried out with the explicit intention of distorting accounting figures, and inflating revenues by incorrectly accruing certain revenues and deflating expenses by incorrectly deferring some expenses. This is not only unethical, but also unlawful behavior.

3. Can Zoe accrue revenues, defer expenses, and still be ethical?

It is possible for Zoe to accrue revenues and defer expenses while remaining ethical if he does it in accordance with accounting principles and the GAAP and IFRS framework. It will not be ethical otherwise. When sales have occurred but have not been recorded through standard invoicing paperwork, it is legitimate to record them as accrued sales. However, declaring such transactions as accrued revenues will be unethical if buyers have paid in advance and items will be supplied next year.

4. Can Zoe’s accrued revenues and deferred expenses be illegal?

Again, it is possible for Zoe to accrue revenues and defer expenses while remaining ethical if he does it in accordance with accounting principles and the GAAP and IFRS framework, and if the federal and IRS regulations have not been breached. However, Zoe's behavior of accruing revenues and deferring expenses will be against the law if those modifications break accounting conventions and federal regulations.

5. Who do you think can discover Zoe’s accrued revenues and deferred expenses?

The person that can discover Zoe’s accrued revenues and deferred expenses is the auditor when he is reviewing the books of accounts of the company.

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