Yoste, Inc. is in the process of liquidating and going out of business. The firm has $35,000 in cash, inventory totaling $100,000, accounts receivable of $75,000, plant and equipment with a $195,000 book value, and total liabilities of $300,000.
It is estimated that the inventory can be disposed of in a liquidation sale for 70% of its cost, all but 10% of the accounts receivable can be collected, and plant and equipment can be sold for $215,000.
Calculate the amount of cash that would be available to the stockholders if the accounts receivable are collected, the other assets are sold as described, and the liabilities are paid in full. (Use the formula Assets = Liabilities + Owners Equity)
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2. Please see the attached file.
a.) Complete the December 31, 2014 and 2013 balance sheets.
(b.) Prepare a Statement of Changes in Retained Earnings for the year ended December 31, 2014. Mid-Term Question 2 attachement.docx
3. A firm has an ROI of 20%, turnover of 3, and sales of $6 million. The firm's margin is:
4. A firm's net income is $330,000 on sales of $31.5 million. Average assets for the period were $7 million. For the year, what was the firm's:
margin,turnover,and ROI?
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5. At the beginning of the current fiscal year, ABC Corp.'s balance sheet showed assets of $650,000 and liabilities of $550,000.
During the year, liabilities decreased by $45,000. Net Income for the year was $150,000, and net assets at the end of the year were $195,000. There were no changes in paid-in capital during the year.
a. Calculate the dividends, if any, declared during the year.
b. Calculate the total assets at the end of the year.
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6. Flower, Inc. has 30 employees who work Monday through Friday each week; each employee earns $200 per day and is paid every Friday. The end of the accounting period is on a Wednesday. How much wages expense should the firm accrue at the end of the period?
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7. In January 1, 2015, the balance in Big River Co.'s Allowance for Bad Debts account was $5,500. During the year, a total of $3,600 of delinquent accounts receivable were written off as bad debts. The balance in the Allowance for Bad Debts account at December 31, 2014, was $7,500.
What was the total amount of bad debts expense recognized during the year?
8. QUESTION 8
1. Prepare a bank reconciliation for Pizza, Inc., as of June 30 from the following information:
(a.) The June 30 balance shown on the bank statement is $2,888.
(b.) Outstanding checks at June 30 totaled $175.
(c.) A deposit of $212 made on June 30 was not included in the balance shown on the bank statement.
(d.) The bank statement contained an adjustment of $204 for a note receivable collected by the bank on behalf of Pizza, Inc. ($191 principal and $13 interest).
(e.) A bank charge of $17 was made to the account during June. Although the company was expecting a charge, the amount was not known until the bank statement arrived.
(f.) The bank erroneously charged a $170 check of Cheese, Inc., against the Pizza, Inc., bank account.
(g.) The June 30 balance in the general ledger Cash account, before reconciliation, is $3,013.
(h.) The bank statement included a notice that a customer's check for $86 that had been deposited on June 14 had been returned NSF.
Required:
(1.) Prepare the bank reconciliation for Show Me, Inc., as of June 30.
(2.) Prepare the appropriate adjusting entry(ies) or show the reconciling items in a horizontal model, for Show Me, Inc., related to the bank reconciliation.
9. Joe's Sales & Service acquired a new machine that cost $45,000 in early 2013. The machine is expected to have a five-year useful life and is estimated to have a salvage value of $5,000 at the end of its life. (Round your final answers to the nearest dollar.)
(a.) Using the straight-line depreciation method, calculate the depreciation expense to be recognized in the second year of the machine's life and calculate the accumulated depreciation after the third year of the machine's life.
(b.) Using the double-declining-balance depreciation method, calculate the depreciation expense for the third year of the machine's life and the net book value of the machine at this point in time.
10. Goodwill results from the purchase of one firm by another for a price that is greater than the fair value of the net assets acquired. On January 1, 2014, XYZ Co. purchased Red MNO Co. for $1,500,000 when the net assets were valued at $1,200,000. Goodwill will be tested annually for impairment. Assume that after the first year there was an impairment of $25,000.
Required:
(a.) Compute the value of goodwill to be recorded on the books of Blue Grass Company upon the purchase of the business.
(b.) What is impairment and how is the first year's impairment recorded in the books?