ACC 349 E2-4 (Assumptions, Principles, and Constraints) Presented below are the assumptions, principles,

ACC 349 E2-4 (Assumptions, Principles, and Constraints) Presented below are the assumptions, principles, and constraints used in this chapter.

ACC 349 E2-4 (Assumptions, Principles, and Constraints)

Intermediate Accounting: Weygandt, Kieso, Kimmel

Axia College of University of Phoenix (UoP)
 

Intermediate Accounting 1

E2-4 (Assumptions, Principles, and Constraints) Presented below are the assumptions, principles, and constraints used in this chapter.

1. Economic entity assumption                        5. Historical cost principle       9. Materiality

2. Going concern assumption              6. Matching principle               10. Industry practices

3. Monetary unit assumption               7. Full disclosure principle       11. Conservatism

4. Periodicity assumption                     8. Cost-benefit relationship

Instructions

Identify by number the accounting assumption, principle, or constraint that describes each situation below.

Do not use a letter more than once.

(a) Allocates expenses to revenues in the proper period.

(b) Indicates that market value changes subsequent to purchase are not recorded in the accounts. (Do not use revenue recognition principle.)

(c) Ensures that all relevant financial information is reported.

(d) Rationale why plant assets are not reported at liquidation value. (Do not use historical cost principle.)

(e) Anticipates all losses, but reports no gains.

(f) Indicates that personal and business record keeping should be separately maintained.

(g) Separates financial information into time periods for reporting purposes.

(h) Permits the use of market value valuation in certain specific situations.

(i) Requires that information significant enough to affect the decision of reasonably informed users should be disclosed. (Do not use full disclosure principle.)

(j) Assumes that the dollar is the “measuring stick” used to report on financial performance.   

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Porto Bay Corporation manufactures and distributes leisure clothing. Selected transactions completed by Porto Bay during the current fiscal year are as follows

Porto Bay Corporation manufactures and distributes leisure clothing. Selected transactions completed by Porto Bay during the current fiscal year are as follows:

Jan. 10. Split the common stock 4 for 1 and reduced the par from $100 to $25 per share. After the split, there were 500,000 common shares outstanding.

Mar. 1. Declared semiannual dividends of $1.20 on 80,000 shares of preferred stock and $0.24 on the 500,000 shares of $25 par common stock to stockholders of record on March 31, payable on April 30. Apr. 30. Paid the cash dividends. July 9. Purchased 75,000 shares of the corporation’s own common stock at $26, recording the stock at cost. Aug. 29. Sold 40,000 shares of treasury stock at $32, receiving cash. Sept. 1. Declared semiannual dividends of $1.20 on the preferred stock and $0.15 on the common stock (before the stock dividend). In addition, a 1% common stock dividend was declared on the common stock outstanding, to be capitalized at the fair market value of the common stock, which is estimated at $30. Oct. 31. Paid the cash dividends and issued the certificates for the common stock dividend. Instructions Journalize the transactions.

File name: Porto-Bay-Corporation.xls File type: application/vnd.ms-excel Price: $5

MUSIC DEPOT - The unadjusted trail balance of Music Depot as of july 31, 2010, along with the adjustment data for the two months ended July 31, 2010, are shown in Chapter 3

The unadjusted trail balance of Music Depot as of july 31, 2010, along with the adjustment data for the two months ended July 31, 2010, are shown in Chapter 3

Chapter 4 - Continuing Problem - MUSIC DEPOT

The unadjusted trail balance of Music Depot as of july 31, 2010, along with the adjustment data for the two months ended July 31, 2010, are shown in Chapter 3,

Based upon the adjustment data, the adjusted trial balance shown below was prepared

Music depot adjusted Trial Balance Jul 31, 2010  

Debit Balances Credit balances

Cash 12,789 Accounts Receivable4,750 Supplies 175 Prepaid Insurance 2,475 Office Equipment 5,000 Accumulated Depreciation -  Office Equipment 60 Accounts Payable 5,680 wages Payable 120 Unearned Revenue 3,600 lee chang, capital 10,500 Lee chang Drawing 1,700 fees earned 20,500 Wages Expense 2,520 Office Rent Expense 1,100 Utilities Expense 860 Music Expense 2,810 Advertising Expense 1,600 Supplies Expense 855 insurance Expense 225 Depreciation Expense 60 Miscellaneous Expense 800 40,460 40,460

Instructions

1. Optional. Using the data from Chapter 3, prepare an end-of-period spreadsheet(work sheet).

2. Prepare an income statement, a statement of owner’s equity, and a balance sheet. (Note: Lee Chang made investments in music depot on June 1 and July 1, 2010.)

3. Journalize and post the closing entries. The income summary account is #33 in the ledger of Music Depot. Indicate closed accounts by inserting a line in both Balance columns opposite the closing entry.

4. Prepare a post-closing trial balance.

2 net income$6,920  

Please download Excel attachment for Solution

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FIN BUS401 P13-2 (Flotation cost and issue size) Your firm needs to raise $10million. Assuming that flotation costs are

FIN BUS401 P13-2 (Flotation cost and issue size) Your firm needs to raise $10million. Assuming that flotation costs are

FLOTATION COSTS AND ISSUE SIZE

PROBLEM 13-2 FLOTATION COSTS AND ISSUE SIZE

PROBLEM 13-2

Complete problem 13-2 on page 433

PROBLEM 13-2 (Flotation cost and issue size) Your firm needs to raise $10million. Assuming that flotation costs are expected to be $15 per share, and that the market price of the stock is $120, how many shares would have to be issued? what is the dollar size of the issue?

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PORTER COMPANY - P4-2A The adjusted trial balance columns of the worksheet for Porter Company are as follows

PORTER COMPANY - P4-2A The adjusted trial balance columns of the worksheet for Porter Company are as follows

P4-2A The adjusted trial balance columns of the worksheet for Porter Company are as follows.
PORTER COMPANY

Worksheet For the Year Ended December 31, 2008

Adjusted Account Trial Balance

No.      Account Titles             Dr.                   Cr.

101      Cash18,800 112      Accounts Receivable   16,200 126      Supplies 2,300

Adjusted Account Trial Balance

No. Account Titles       Dr.                   Cr.

130      Prepaid Insurance        4,400 151      Office Equipment        44,000 152      Accumulated Depreciation—Office Equipment 20,000 200      Notes Payable 20,000 201      Accounts Payable 8,000 212      Salaries Payable 2,600 230      Interest Payable 1,000 311      Common Stock 30,000 320      Retained Earnings 6,000 332      Dividends 12,000 400      Service Revenue 77,800 610      Advertising Expense 12,000 631      Supplies Expense 3,700 711      Depreciation Expense 8,000 722      Insurance Expense 4,000 726      Salaries Expense 39,000 905      Interest Expense 1,000 Totals   165,400           165,400

Instructions

(a) Complete the worksheet by extending the balances to the financial statement columns.

(b) Prepare an income statement, a retained earnings statement, and a classified balance sheet.

$10,000 of the notes payable become due in 2009. No additional issuance of common stock occurred during 2008.

(c) Prepare the closing entries. Use J14 for the journal page.

(d) Post the closing entries. Use the three-column form of account. Income Summary is account No. 350.

(e) Prepare a post-closing trial balance.

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FIN2030 Quantitative Assignment, Week 2 - 1. Future Value. What is the future value of

FIN2030 Quantitative Assignment, Week 2

1. Future Value.  What is the future value of

a. $773 invested for 14 years at 11 percent compounded annually?

b. $210 invested for 7 years at 6 percent compounded annually?

c. $650 invested for 10 years at 9 percent compounded annually?

d. $615 invested for 7 years at 14 percent compounded annually?

 

2. Present Value. What is the present value of

a. $803 to be received 10 years from now at a 15 percent discount rate?

b. $406 to be received 6 years from now at a 5 percent discount rate?

c. $300 to be received 10 years from now at a 9 percent discount rate?

d. $632 to be received 14 years from now at a 14 percent discount rate?

 

3. Future Value of an Annuity. What is the future value of

a. $557 a year for 14 years at 5 percent compounded annually?

b. $748 a year for 8 years at 10 percent compounded annually?

c. $442 a year for 8 years at 12 percent compounded annually?

d. $976 a year for 12 years at 5 percent compounded annually?

 

4. Present Value of an Annuity. What is the present value of

a. $1,163 a year for 15 years at an 8 percent discount rate?

b. $329 a year for 7 years at a 15 percent discount rate?

c. $365 a year for 10 years at a 10 percent discount rate?

d. $883 a year for 6 years at a 5 percent discount rate?

 

5. How many years will it take to grow

a. $711 to a value of 2,028.19 at a compound rate of 14 percent?

b. $321 to a value of 450.22 at a compound rate of 7 percent?

c. $931 to a value of 1,305.78 at a compound rate of 7 percent?

d. $1,191 to a value of 4,189.79 at a compound rate of 15 percent?

 

6. Interest Rate. At what interest rate will it take to grow

a. $759 to a value of 1,017.13 over 6 years?

b. $614 to a value of 1,082.08 over 5 years?

c. $701 to a value of 1,311.16 over 6 years?

d. $1,190 to a value of 4,163.16 over 12 years?

 

7. Annuity. How many years will it take for a payment of

a. $825 to grow to 17,642.03 at a compound rate of 10 percent?

b. $356 from a future value of 13,271.58 at a compound rate of 12 percent?

c. $1,098 from a future value of 6,189.53 at a compound rate of 6 percent?

d. $733 from a future value of 14,365.80 at a compound rate of 5 percent?

 

8. Annuity. At what interest rate will a payment of

a. $346 grow to 12,898.78 over a period of 15 years?

b. $1,056 grow to 10,834.35 over a period of 8 years?

c. $696 grow to 22,113.65 over a period of 15 years?

 

9. Car Loans (Hint: P/Y=12). How much is a car loan with a payment of

a. $257 per month for 3 years at 6% interest per year?

b. $437 per month for 5 years at 15% interest per year?

c. $274 per month for 6 years at 7% interest per year?

d. $253 per month for 2 years at 7% interest per year?

 

10. Car Loans (Hint: P/Y=12). How many months will you pay on a car loan of

a. $18,708 with a payment of 406.76 per month at 11% interest per year?

b. $10,112 with a payment of 276.33 per month at 14% interest per year?

c. $32,705 with a payment of 1,101.96 per month at 13% interest per year?

d. $34,136 with a payment of 1,638.97 per month at 14% interest per year?

 

11. Car Loans (Hint: P/Y=12). What is the interest rate on a loan of

a. $8,000 with a payment of 218.61 per month for 4 years?

b. $16,000 with a payment of 368.47 per month for 4 years?

c. $24,000 with a payment of 521.82 per month for 5 years?

d. $32,000 with a payment of 664.27 per month for 5 years?

 

12. Mortgages (Hint: P/Y=12, House cost = Loan Value/0.9).

What is the house cost on a 10 percent down mortgage with payments of

a. $4,369.66 per month for 30 years at 10 percent interest?

b. $1,626.83 per month for 15 years at 11 percent interest?

c. $3,724.21 per month for 30 years at 8 percent interest?

d. $4,469.19 per month for 15 years at 14 percent interest?

13. Mortgages (Hint: P/Y=12). What is the interest rate on a mortgage of

a. $863,001 with a payment of 5,174.13 for 30 years?

b. $125,709 with a payment of 1,275.02 for 15 years?

c. $546,227 with a payment of 6,906.73 for 30 years?

d. $478,167 with a payment of 3,781.31 for 15 years?

 

14. Mortgages (Hint: P/Y=12). What is the payoff on a 30 year, 6% mortgage of

a. $255,413 with a payment of 1,531.33 with 7 years remaining?

b. $530,493 with a payment of 3,180.57 with 9 years remaining?

c. $297,266 with a payment of 1,782.26 with 13 years remaining?

d. $108,947 with a payment of 653.19 with 13 years remaining?

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