Answer:
c
Explanation:
A monopolistic competition is when there are many firms selling differentiated products in an industry. A monopolistic competition has characteristics of both a monopoly and a perfect competition. the demand curve is downward sloping. it sets the price for its goods and services.
An example of monopolistic competition are restaurants
When firms are earning positive economic profit, in the long run, firms enter into the industry. This drives economic profit to zero
If firms are earning negative economic profit, in the long run, firms leave the industry. This drives economic profit to zero
in the long run, only normal profit is earned
A monopoly is when there is only one firm operating in an industry. there are usually high barriers to entry of firms. the demand curve is downward sloping. it sets the price for its goods and services.
An example of a monopoly is a utility company
A price maker is a seller that sets the price for its goods and services. A monopoly and a monopolistic competition are price makers
Steve Pratt, who is single, purchased a home in Spokane, Washington, for $347,500. He moved into the home on February 1 of year 1. He lived in the home as his primary residence until June 30 of year 5, when he sold the home for $705,000. (Leave no answer blank. Enter zero if applicable.) a. What amount of gain will Steve be required to recognize on the sale of the home
Answer: $107,500
Explanation:
There is an "Exclusion of gain on sale of home" provision by the IRS that allows for a single tax payer to exclude up to $250,000 from the sale of their primary home. A home qualifies as primary if the owner has lived in it for 2 years or more so Steve's home here is a primary home.
The gain he received was:
= 705,000 - 347,500
= $357,500
From this gain, $250,000 can be excluded so total gain recognized:
= 357,500 - 250,000
= $107,500
Practice Do It! Review 02 The following information is available for Sunland Company. April 1 April 30 Raw materials inventory $10,000 $13,500 Work in process inventory 5,400 3,710 Materials purchased in April $98,000 Direct labor in April 80,300 Manufacturing overhead in April 156,000 Prepare the cost of goods manufactured schedule for the month of April.
Answer:
Cost of goods manufactured=$332,490
Explanation:
Giving the following information:
April 1 April 30
Raw materials inventory $10,000 $13,500
Work in process inventory 5,400 3,710
Materials purchased in April $98,000
Direct labor in April 80,300
Manufacturing overhead in April 156,000
To calculate the cost of goods manufactured, we need to use the following formula:
cost of goods manufactured= beginning WIP + direct materials + direct labor + allocated manufacturing overhead - Ending WIP
cost of goods manufactured= 5,400 + (10,000 + 98,000 - 13,500) + 80,300 + 156,000 - 3,710
cost of goods manufactured=$332,490
In January 2021 Vega Corporation purchased a patent at a cost of $203,000. Legal and filing fees of $50,000 were paid to acquire the patent. The company estimated a 10-year useful life for the patent and uses the straight-line amortization method for all intangible assets. In January 2024, Vega spent $24,000 in legal fees for an unsuccessful defense of the patent and the patent is no longer usable. The amount charged to income (expense and loss) in 2024 related to the patent should be:
Answer:
$201,100
Explanation:
Calculation to determine The amount charged to income (expense and loss) in 2024 related to the patent should be:
Total patent cost= $203,000 + $50,000
= $253,000
Amortized cost till year 2024 is
= ($253,000 ÷ 10 years) × 3 years
= $75,900
The three years is counted from 2021 to 2024
Now
Book value on Jan 2024 is
= $253,000 - $75,900
= $177,100
So,
Amount charged to income is
= $177,100 + $24,000
= $201,100
Therefore The amount charged to income (expense and loss) in 2024 related to the patent should be:$201,100
ou were hired as a consultant to Quigley Company, whose target capital structure is 35% debt, 10% preferred, and 55% common equity. The interest rate on new debt is 6.50%, the yield on the preferred is 6.00%, the cost of common from retained earnings is 11.25%, and the tax rate is 40%. The firm will not be issuing any new common stock. What is Quigley's WACC
Answer:
the weighted average cost of capital is 9.25%
Explanation:
The computation of the weighted average cost of capital is shown below;
= Cost of debt × weight of debt × (1 - tax rate) + cost of equity × weight of equity + cost of preferred stock × weight of preferred stock
= 35% × 6.50% × (1 - 0.40) + 11.25% × 55% + 6% × 10%
= 1.365% + 7.288% + 0.6%
= 9.25%
Hence, the weighted average cost of capital is 9.25%
The same would be considered and relevant
Joint ventures offer low potential for leveraging a firm's existing competencies because they typically entail a short-term relationship between two or more firms.
A. True
B. False
Answer:
B. False
Explanation:
The main purpose of the joint venture is to help two or more companies so that they are in the position to gain the competitive advantage. So the potential for firm leverage that is existed would be high instead of low due to this reason also
So as per the given situation, the option b is correct
Hence, the option a is not correct
There are different types of business. Joint ventures offer low potential for leveraging a firm's existing competencies is a False statement.
A joint venture is known as when two or more businesses gather their resources and expertise together to achieve a set goal.It is also called a partnership between 2 or more firms where there is significant equity stake by the partners and often resulting in the creation of a new business entity.
Joint ventures uses a good amount of equity investment from each partner and can lead to the establishment of a new separate entity.
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The size, sign, and timing of individual cash flows are illustrated by the ____________________, as the basis for engineering economic analysis. Write the word(s) that fill(s) in the blank below.
Answer:
Cash Flow Diagram
Explanation:
The correct statement is that the size, sign and timing of an individual cash flow are illustrated by the cash flow diagrams, as the basis of engineering economic analysis.
Cash flow diagrams are prepared by taking the data from the cash flow statements that are prepared at the end of each accounting period.
Cash FlowCash Flow of a business refers to as a cash that is either a part of income and revenue or expense for the business during a given accounting period.The cash flow diagrams are prepared by taking into account the data obtained from the cash flow statements and can be illustrated into the size of the cash flows and their timings during the financial period.
Hence, the correct statement is that cash flow diagrams are used to illustrate the size, signs and timings of the individual cash flow statements.
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Larance Detailing's cost formula for its materials and supplies is $1,910 per month plus $10 per vehicle. For the month of November, the company planned for activity of 86 vehicles, but the actual level of activity was 51 vehicles. The actual materials and supplies for the month was $2,430. The materials and supplies in the flexible budget for November would be closest to:
Answer:
$2,420
Explanation:
Calculation to determine what The materials and supplies in the flexible budget for November would be closest to:
Using this formula
Cost = Fixed cost + (Variable cost per unit × q)
Let plug in the formula
Cost= $1,910 + $10 × 51
Cost= $2,420
Therefore The materials and supplies in the flexible budget for November would be closest to:$2,420
In response to dwindling sales of organic meats, Hain Celestial executives decided to promote the sale of organically grown nuts as an alternative source of protein, which is an excellent example of a firm's:
Answer:
Product substitute
Explanation:
Product substitute is defined as one that meets similar needs of the consumer. As demand for one of such goods rises the demand of the other tends to fall as the meet similar needs.
In the given scenario organic meats are seen as being substituted by organically grown nuts as a source of protein.
So when Hain Celestial has dwindling sales of organic meats they were considering organically grown nuts as a different product to give to customers
Terps Corp.'s comparative balance sheet at December 31, 2021 and 2020 reported accumulated depreciation balances of $1,245,000 and $900,000, respectively. Property with a cost of $75,000 and a carrying amount of $57,000 was the only property sold in 2021. Depreciation charged to operations in 2021 was
Answer:
See below
Explanation:
Depreciation charged to operations in 2021 is computed as;
=
Oriole Company uses the percentage of receivables method for recording bad debts expense. The accounts receivable balance is $280000 and credit sales are $2810000. Management estimates that 5% of accounts receivable will be uncollectible. What adjusting entry will Oriole Company make if the Allowance for Doubtful Accounts has a credit balance of $2800 before adjustment
Answer:
Dr. Bad debt expense. $11,200
---------To Allowance for doubtful accounts $11,200
Explanation:
Given that:
Accounts receivable balance = $280,000
Total credit sales = $2,810,000
5% of accounts receivables will be bad debt = $280,00 × 5% = $14,000
Credit balance allowance for doubtful account = $2,800 and it must increase to $14,000 I.e $14,000 - $2,800 = $11,200
Adjusting journal entry
Dr Bad debt expense $11,200
-------- Cr Allowance for doubtful accounts $11,200
On January 1, 2020, Blue Inc. issued stock options for 290,000 shares to a division manager. The options have an estimated fair value of $6 each. To provide additional incentive for managerial achievement, the options are not exercisable unless divisional revenue increases by 6% in four years. Blue initially estimates that it is not probable the goal will be achieved, but in 2022, after three years, Blue estimates that it is probable that divisional revenue will increase by 6% by the end of 2023. Ignoring taxes, what is the increase in expense in 2022
Answer: $1,305,000
Explanation:
Blue initially estimated that the goal would not be achieved so had not catered for the expense in the case that it would.
In 2022, when Blue estimates that the target will be reached, they will have to account for the expenses for the three years for the option because the options value is to be amortized over the period in question which is 4 years.
Options value = 290,000 * 6
= $1,740,000
Over 4 years:
= 1,740,000 / 4
= $435,000
Over the three years:
= 435,000 * 3
= $1,305,000
Expenses will increase by 1,305,000 for the year.
Bronks Co. had pension plan assets and PBO of $160,000 on 1/1/19. Service cost for the year was $40,000. It contributed $30,000 during the year and paid benefits of $20,000. The interest rate was 10%. The actual return was $15,000. Compute pension expense, PBO and PA at the end of the year.
Answer:
Pension expense:
= Service cost + Interest on PBO - actual return
= 40,000 + (10% * 160,000) - 15,000
= $41,000
PBO at end of year:
= Beginning PBO+ Service cost + Interest on PBO - Benefits paid
= 160,000 + 40,000 + (10% * 160,000) - 20,000
= $196,000
Pension Assets at end of year:
= Beginning PBO + Return + Contribution - Benefits
= 160,000 + 15,000 + 30,000 - 20,000
= $185,000
The price of a non-dividend-paying stock is $20, and the price of a 3-month European call option on the stock with a strike price of $22 is $1.50. Assume the risk-free rate is 5% per annum. What is the price of a 3-month European put option with a strike price of $22 on the same stock
Answer:
-$0.23
Explanation:
Using put-call parity equation:
Price of European call option = Current stock price + Price of European put option - Strike price*e^-(risk free rate * time to expiration)
Price of European call option = $20 + $1.50 - $22*e^-(0.05*3/12)
Price of European call option = $20 + $1.50 - $22*0.9875778
Price of European call option = $20 + $1.50 - $21.73
Price of European call option = -$0.23
Retro Rides, Incorporated, operates two divisions: (1) a Management Division that owns and manages classic automobile rentals in Miami, Florida and (2) a Repair Division that restores classic automobiles in Clearwater, Florida. The Repair Division works on classic motorcycles, as well as other classic automobiles. The Repair Division has an estimated variable cost of $60.50 per labor-hour and has a backlog of work for automobile restoration. They charge $80.00 per hour for labor, which is standard for this type of work. The Management Division complained that it could hire its own repair workers for $62.00 per hour, including leasing an adequate work area. What is the minimum transfer price per hour that the Repair Division should obtain for its services, assuming it is operating at capacity?
A) $28.50.
B) $30.00.
C) $39.00.
D) $48.00.
Answer:
D) $48
Explanation:
The minimum transfer price for the Repair division will be the variable cost which is standard for the same type of work. In the given scenario the price is $80 which is the maximum transfer price while $48 will be the minimum transfer price for Repair division.
Miscavage Corporation has two divisions: the Beta Division and the Alpha Division. The Beta Division has sales of $305,000, variable expenses of $153,600, and traceable fixed expenses of $70,800. The Alpha Division has sales of $615,000, variable expenses of $337,800, and traceable fixed expenses of $132,700. The total amount of common fixed expenses not traceable to the individual divisions is $134,200. What is the company's net operating income
Answer:
$2,000
Explanation:
net operating income = total contribution - common fixed expenses
Blue Lite manufactures decorative weather vanes that have a standard materials cost of two pounds of raw materials at $2 per pound. During November 500 pounds of raw materials costing $4 per pound were used in making 450 weather vanes. The materials price and quantity variance are: Group of answer choices
Answer: See explanation
Explanation:
The material price variance will be calculated as:
= (Standard price - Actual price) × Actual quantity of material used
= ($2 - $4) × 500
= -$2 × 500
= $-1000
= $1000 Unfavourable
The material quantity variance will be:
= Standard quantity - Actual quantity) × Standard price
=[(450 × 2) -500] × $2.00
= (900 - 500) × $2.00
= 400 × $2.00
= $800 Favorable
Quantum Inc. has warrants outstanding that allow the holder to purchase 1.5 shares of stock per warrant at $30 per share (exercise price). Thus, each individual share can be purchased at $30 with the warrant. The common stock is currently selling for $36. The warrant is selling for $12.
Required:
a. What is the intrinsic (minimum) value of this warrant?
b. What is the speculative premium on this warrant?
c. What should happen to the speculative premium as the expiration date approaches?
Answer:
A. $9.00
B. $3.00
C. Decrease
Explanation:
a. Calculation to determine the intrinsic (minimum) value of this warrant
Using this formula
I = (M – E) × N
Where,
I represent Intrinsic value of a warrant
M represent Market value of common stock
E represent Exercise price of a warrant
N represent Number of shares each warrant entitles theholder to purchase
Let plug in the formula
I=($36 – $30) *1.5
I=$6*1.5
I = $9.00
Therefore the intrinsic (minimum) value of this warrant is $9.00
b. Calculation to determine the speculative premium on this warrant
Using this formula
S = W – I
Where,
S representSpeculative premium
W represent Warrant price
I represent Intrinsic value.
Let plug in the formula
S=$12-[($36 – $30) *1.5]
S=$12 – $9
S = $3.00
Therefore the speculative premium on this warrant is $3.00
c.What should happen to the SPECULATIVE PREMIUM as the expiration date approaches is for it to DECREASE and thereby approach $0.
The price of the stock at the beginning of 2018 was $56.81 and you sold the stock at $68.14 at the end of the year. What is the dividend yield (use your answer from 3a above), capital gain(loss), and total percentage return
Question Completion:
The total dividends paid is $1,743,400 and the outstanding shares are 1,300,000.
Answer:
a. The dividend per share = $1.34
b. The dividend yield = 1.97%
c. The capital gain = $11.33
d. The total percentage return = 22.3%.
Explanation:
a) Data and Calculations:
Dividends paid = $1,743,400
Outstanding shares = 1,300,000
Dividends per share = $1.34 ($1,743,400/1,300,000)
Dividend yield = Dividend per share/Stock price
= $1.34/$68.14 = 1.97%
Capital gain = $11.33 ($68.14 - $56.81)
Total return = $12.67 ($11.33 + $1.34)
Total percentage return = Total return/Beginning Stock Price * 100
= $12.67/$56.81 * 100
= 22.3%
What are the implications of CIC’s approach to staffing project teams? Is the company using project teams as training grounds for talented fast-trackers, or as dumping grounds for poor performers?
Answer:
CIC's methodology to projects team employment is based on functional structure. It gathers team individuals from several departments. They grant team players very little influence. They are not permitted to review the effectiveness of task team participants however, operational heads are permitted to do so.
Training under this approach is a very positive thing and should be welcomed by the individuals. It gives the the candidates to enhance their skill and become appropriate for the job environment.
Ingrid Inc. has strict credit policies and only extends credit to customers with outstanding credit history. The company examined its accounts and determined that at January 1, 2019, it had balances in Accounts Receivable and Allowance for Doubtful Accounts of $478,000 and $7,900 (credit), respectively. During 2019, Ingrid extended credit for $3,075,000 of sales, collected $2,715,000 of accounts receivable, and had customer defaults of $4,280. Ingrid performed an aging analysis on its receivables at year end and determined that $6,800 of its receivables will be uncollectible.
Required:
a. Calculate Ingrid's balance in accounts receivable on December 31, 2018, prior to the adjustment.
b. Calculate Ingrid's balance in allowance for doubtful accounts on December 31, 2018, prior to the adjustment.
c. Prepare the necessary adjusting entry for 2018.
Answer:
Ingrid Inc.
a. Ingrid's balance in accounts receivable on December 31, 2018, prior to the adjustment is:
= $833,720.
b. Ingrid's balance in allowance for doubtful accounts on December 31, 2018, prior to the adjustment is:
= $6,800.
c. Adjusting Entry:
Debit Bad Debts Expense $3,180
Credit Allowance for Doubtful Accounts $3,180
To record the bad debts expense for the year and bring the balance of the Allowance for Doubtful Accounts to a credit balance of $6,800
Explanation:
a) Data and Calculations:
January 1, 2019 balances:
Accounts Receivable $478,000
Allowance for Doubtful Accounts $7,900 (credit)
Accounts Receivable $3,075,000 Sales Revenue $3,075,000
Cash $2,715,000 Accounts Receivable $2,715,000
Allowance for Doubtful Accounts $4,280 Accounts Receivable $4,280
Ending balance:
Allowance for Doubtful Accounts $6,800 (Credit)
T-Accounts
Account Titles Debit Credit
Beginning balance $478,000
Sales Revenue $3,075,000
Cash $2,715,000
Allowance for Doubtful Accounts $4,280
Ending balance $833,720
Allowance for Doubtful Accounts
Account Titles Debit Credit
Beginning balance $7,900
Accounts Receivable $4,280
Bad Debts Expense 3,180
Ending balance $6,800
If Jerry deposits $462 of cash in a checking account in the Tenth National Bank, what's the maximum change in the money supply in the economy
Answer:
$4620
Explanation:
It is assumed that the required reserve is 10%
Reserve requirement is the portion of deposit received by banks that the central bank requires to be kept as deposit.
Increase in the total value of checkable deposit is determined by the money multiplier
Money multiplier = amount deposited / reserve requirement
462 /0,1 = $4620
Top Line Electronics has a piece of machinery that costs $600,000 and is expected to have a useful life of 4 years. Residual value is expected to be $100,000. Using the double-declining-balance method, what is depreciation expense for the first year
Answer:
Annual depreciation= $250,000
Explanation:
Giving the following information:
Purchase price= $600,000
Salvage value= $100,000
Useful life= 4 years
To calculate the annual depreciation, we need to use the following formula:
Annual depreciation= 2*[(book value)/estimated life (years)]
Annual depreciation= 2*[(600,000 - 100,000) / 4]
Annual depreciation= $250,000
*A product cost is Group of answer choices expensed in the period in which the product is manufactured shown with current liabilities on the balance sheet shown with operating expenses on the income statement expensed in the period the product is sold
Answer:
expensed in the period in which the product is manufactured.
Explanation:
A product can be defined as any physical object or material that typically satisfy and meets the demands, needs or wants of customers. Some examples of a product are mobile phones, television, microphone, microwave oven, bread, pencil, freezer, beverages, soft drinks etc.
Manufacturing costs can be defined as the overall costs associated with the acquisition of resources such as materials and the cost of converting these raw materials into finished goods. Manufacturing costs include direct labor costs, direct materials cost and manufacturing overhead costs.
Generally, a product cost or the cost associated with the manufacturing of a particular product is expensed within the period in which it was manufactured by the firm.
What is external factor
Answer:
External factors are those influences, circumstances or situations that a business cannot control that affect the business decisions that the business owner and stakeholders make. The are a large number of external factors can have a direct impact on the ability of your business to achieve its strategic objectives.
Gain contingencies usually are recognized in a company's income statement when: Multiple Choice The gain is reasonably possible and the amount is reasonably estimable. The gain is certain The amount is reasonably estimable. The gain is probable and the amount is reasonably estimable.]
Answer: The gain is certain
Explanation:
A Gain contingency means that the company stands to make a gain in future if a certain event happens such as the company winning a lawsuit that would result in a good settlement figure for them.
According to U.S. GAAP, gain contingencies are not to be recognized unless it is certain that the gain is coming. If the gain is not certain and is recorded, the income is considered overstated.
The article discusses actions taken by Mary Conger, a master plumber who teaches mandated continuing education classes so that plumbers can maintain their licenses. If we take an opportunistic view of her action, it is a good example of what? Choose one: A. copyright infringement B. consolidation C. rent-seeking behavior D. quality assurance
Answer:
Option D
Explanation:
In simple words, Quality assurance, described by ISO 9000 as element of quality control focusing on ensuring trust that performance standards will be met," is a method of preventing errors and failures in manufacturing goods and avoiding issues when supplying products or services to consumers.
Thus, from the above we can conclude that the correct answer is D.
As a result if this we can see that opportunistic view of her action, it is a good example of quality assurance.
According to the question, we are to discuss actions taken by Mary Conger, a master plumber who teaches mandated continuing education classes so that plumbers can maintain their licenses.
Therefore, option D is correct because her action, it is a good example of quality assurance.
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A very large company would be most likely to have a(n) ___ at the ahead of its accounting department.
A. Executive vice president
B. Controller
C. Chief financial officer
D. Accounting manager
A very large company would be most likely to have a Chief financial officer as the head of its accounting department.
The Chief Financial Officer (CFO) would most likely be in charge of the accounting division of a very large corporation. A company's Chief Financial Officer (CFO) is in charge of all financial operations, including accounting, budgeting, financial reporting, and forecasting. The day-to-day accounting activities of a corporation are managed by the controller, who holds a mid-level role. The basic duties of the accounting manager include leading a group of accountants and supervising the creation of financial statements and reports. Even though the executive vice president may be in charge of the entire organization, they could not have specific knowledge of accounting and finance.
A Chief Financial Officer (CFO) is a senior executive accountable for directing the financial actions of a firm. Monitoring cash flow, assessing the firm's financial advantages and disadvantages, and creating strategies for financial expansion are all tasks assigned to the CFO. Also, they are in charge of supervising the creation of predictions and current financial reports. In conclusion, the CFO is essential to the efficient management of a company's finances.
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As a marketing term, __________ generally includes not only physical goods, but also services and ideas. Multiple Choice marketing invention merchandise product concept
Answer:
product
Explanation:
The product is an item that the company offer to its customer for buying the product. It is not only the goods that to be kept physically but it also consist of the services and ideas so that it become differentiate with the competitor. The product can be differentiate in terms of cost, quality, quantity, presentable form via having the innovative ideas
So, the 2nd last option is correct
The Town of Drexel has the following financial transactions. Prepare the journal entries necessary for the preparation of fund financial statements.
1. The town council adopts an annual budget for the general fund estimating general revenues of $1.7 million, approved expenditures of $1.5 million, and approved transfers out of $120,000.
2. The town levies property taxes of $1.3 million. It expects to collect all but 3 percent of these taxes during the year. Of the levied amount, $40,000 will be collected next year but after more than 60 days.
3. The town orders two new police cars at an approximate cost of $110,000.
4. A transfer of $50,000 is made from the general fund to the debt service fund.
5. The town pays a bond payable of $40,000 along with $10,000 of interest using the money previously set aside.
6. The Town of Drexel issues a $2 million bond at face value in hopes of acquiring a building to convert into a high school.
7. The two police cars are received with an invoice price of $112,000. The voucher has been approved but not yet paid.
8. The town purchases the building for the high school for $2 million in cash and immediately begins renovating it.
9. Depreciation on the new police cars is computed as $30,000 for the period.
10. The town borrows $100,000 on a 30-day tax anticipation note.
Answer:
1. A. FUND: GENERAL FUND
Dr Estimated Revenues control $1,700,000
Cr Appr. Control $1,500,000
Cr Est. OFU control $120,000
Cr Budgetary Fund Balance 80,000
GOVERNMENT
No journal entry
2. FUND: GENERAL FUND
Dr Property Tax Receivable $1,300,000
Cr Allowance for uncollectible taxes $39,000
Cr Deferred Revenue $40,000
Cr Revenues-Property taxes $1, 221,000
GOVERNMENT: GOVERNMENTAL ACTIVITIES
Dr Property Tax Receivable $1,300,000
Cr Allowance for uncollectible taxes $39,000
Cr Revenues - Property taxes $1,261,000
3. FUND: GENERAL FUND
Dr Encumbrances control $110,000
Cr Fund-balance: reserve for Encumbrances
$110,000
GOVERNMENT
Commitments are not reported
4. FUND: GENERAL FUND
Dr OFU: transfer out $50,000
Cr Cash $50,000
FUND: DEBT SERVICES FUND
Dr Cash $50,000
Cr OFU: Transfer in $50,000
GOVERNEMNT
No journal entry
5. FUND: DEBT SERVICES FUND
Dr Expenditures - Principal $40,000
Dr Expenditures - Interest $10,000
Cr Cash $50,000
GOVERNMENT
Dr Bonds Payable $40,000
Dr Interest Expense $10,000
Cr Cash $50,000
6. FUND:CAPITAL PROJECTS FUND
Dr Cash $2,000,000
Cr Other Financing Sources-Bond Proceeds
$2,000,000
GOVERNMENT
Dr Cash $2,000,000
Cr Bonds Payable $2,000,000
7. FUND: GENERAL FUND
Dr Fund balance- reserve for Encumbrances $110,000
Cr Encumbrances control $110,000
Dr Expenditure: police vehicles $112,000
Cr Vouchers payable $112,000
GOVERNMENT
Dr Police Cars $112,000
Cr Vouchers Payable $112,000
8. FUND: CAPITAL PROJECTS FUND
Dr Expenditures - Building $2,000,000
Cr Cash $2,000,000
GOVERNMENT
Dr Building $2,000,000
Cr Cash $2,000,000
9. FUND
No journal entry
GOVERNMENT
Dr Depreciation Expense $30,000
Cr Accumulated Depreciation $30,000
10. FUND: GENERAL FUND
Dr Cash $100,000
Cr Tax Anticipation Note Payable $100,000
GOVERNMENT
Dr Cash $100,000
Cr Tax Anticipation Note Payable $100,000
Explanation:
Preparation of the journal entries necessary for the preparation of fund financial statements
1. FUND: GENERAL FUND
Dr Estimated Revenues control $1,700,000
Cr Appr. Control $1,500,000
Cr Est. OFU control $120,000
Cr Budgetary Fund Balance $80,000
($1,700,000-$1,500,000-$120,000)
GOVERNMENT
No journal entry
2. FUND: GENERAL FUND
Dr Property Tax Receivable $1,300,000
Cr Allowance for uncollectible taxes $39,000
(3%*1,300,000)
Cr Deferred Revenue $40,000
Cr Revenues-Property taxes $1, 221,000
($1,300,000-$39,000-$40,000)
GOVERNMENT: GOVERNMENTAL ACTIVITIES
Dr Property Tax Receivable $1,300,000
Cr Allowance for uncollectible taxes $39,000
(3%*1,300,000)
Cr Revenues - Property taxes $1,261,000
($1,300,000-$39,000)
3. FUND: GENERAL FUND
Dr Encumbrances control $110,000
Cr Fund-balance: reserve for Encumbrances
$110,000
GOVERNMENT
Commitments are not reported
4. FUND: GENERAL FUND
Dr OFU: transfer out $50,000
Cr Cash $50,000
FUND: DEBT SERVICES FUND
Dr Cash $50,000
Cr OFU: Transfer in $50,000
GOVERNEMNT
No journal entry
5. FUND: DEBT SERVICES FUND
Dr Expenditures - Principal $40,000
Dr Expenditures - Interest $10,000
Cr Cash $50,000
($40,000+$10,000)
GOVERNMENT
Dr Bonds Payable $40,000
Dr Interest Expense $10,000
Cr Cash $50,000
($40,000+$10,000)
6. FUND:CAPITAL PROJECTS FUND
Dr Cash $2,000,000
Cr Other Financing Sources-Bond Proceeds
$2,000,000
GOVERNMENT
Dr Cash $2,000,000
Cr Bonds Payable $2,000,000
7. FUND: GENERAL FUND
Dr Fund balance- reserve for Encumbrances $110,000
Cr Encumbrances control $110,000
Dr Expenditure: police vehicles $112,000
Cr Vouchers payable $112,000
GOVERNMENT
Dr Police Cars $112,000
Cr Vouchers Payable $112,000
8. FUND: CAPITAL PROJECTS FUND
Dr Expenditures - Building $2,000,000
Cr Cash $2,000,000
GOVERNMENT
Dr Building $2,000,000
Cr Cash $2,000,000
9. FUND
No journal entry
GOVERNMENT
Dr Depreciation Expense $30,000
Cr Accumulated Depreciation $30,000
10. FUND: GENERAL FUND
Dr Cash $100,000
Cr Tax Anticipation Note Payable $100,000
GOVERNMENT
Dr Cash $100,000
Cr Tax Anticipation Note Payable $100,000
The financial statements of an Enterprise fund are prepared using the :_______
Answer:
Accrual Method
Explanation:
I’m not sure if this is what this question is referring to or not, but the Enterprise fund uses the accrual method.