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A company incurred the following transactions

24 / 01 / 2019 Assignments

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A company incurred the following transactions

A company incurred the following transactions:a. Income tax expense of $698 for the current period is accrued. Of the accrual, $233 represents deferred tax liabilities.b. Bonds payable with a face amount of $7,900 are issued at a price of 98.c. Of the proceeds from the bonds in part b, $6,800 is used to purchase land for future expansion.d. Because of warranty claims, finished goods inventory costing $129 is sent to customers to replace defective products.e. A three-month, 11% note payable with a face amount of $18,500 was signed. The bank made the loan on a discount basis.f. The next installment of a long-term serial bond requiring an annual principal repayment of $26,000 will become due within the current year.A-1. Show the effect, if any, of each transaction/adjustment on the appropriate balance sheet category or on net income by selecting for each category affected the account name and amount, and indicating whether it is an addition (+) or a subtraction (–). Items that affect net income should not also be shown as affecting owners’ equity.Transaction/Adjustment Current assets Noncurrentassets Currentliabilities Noncurrentliabilities StockholderEquity NetIncomea-2. Record the journal entries to show each transaction/adjustment.• A. Income tax expense of $698 for the current period is accrued. Of the accrual, $233 represents deferred tax liabilities.• B. Bonds payable with a face amount of $7,900 are issued at a price of 98.• C. Of the proceeds from the bonds in part b , $6,800 is used to purchase land for future expansion.• d. Because of warranty claims, finished goods inventory costing $129 is sent to customers to replace defective products.• E. A three-month, 11% note payable with a face amount of $18,500 was signed. The bank made the loan on a discount basis.• F. The next installment of a long-term serial bond requiring an annual principal repayment of $26,000 will become due within the current year.Transaction General Journal Debit CreditOn March 1, 2008, Matt purchased $60,000 of Lawson Co.’s 8%, 17-year bonds at face value. Lawson Co. has paid the annual interest due on the bonds regularly. On March 1, 2013, market interest rates had risen to 12%, and Matt is considering selling the bonds. Use present value tables (Table 6-4 and Table 6-5)(Use appropriate factor(s) from the tables provided.)Required:Calculate the market value of Matt’s bonds on March 1, 2013. (Enter your answer rounded to 2 decimals. (e.g., 32.16))Market Value At March 31, 2013, the end of the first year of operations at Jaryd, Inc., the firm’s accountant neglected to accrue payroll taxes of $4,355 that were applicable to payrolls for the year then ended.Required:a-1. Use the horizontal model to show the effect of the accrual that should have been made as of March 31, 2013. (Enter decreases to account balances with a minus sign.)Balance Sheet Income StatementAssets = Liabilities + StockholderEquity ? NetIncome = Revenues – Expense+ ? = – a-2. Record the journal entry to show the effect of the accrual that should have been made as of March 31, 2013.Journal Entry Work SheetRecord the accrual of payroll taxes for the year.Date General Journal Debit Credit03/31/2013 b. Determine the income statement and balance sheet effects of not accruing payroll taxes at March 31, 2013.Effect on Expense Effect on Net Income Effect on Current Liabilities Effect on Retained Earnings c. Assume that when the payroll taxes were paid in April 2013, the payroll tax expense account was charged. Assume that at March 31, 2014, the accountant again neglected to accrue the payroll tax liability, which was $4,486 at that date. Determine the income statement and balance sheet effects of not accruing payroll taxes at March 31, 2014.Effect on net income for year ended 3/31/13:Net effect is that expense this year is: too And profits this year are: too Effect on the 3/31/13 balance sheet:Current liabilities are: And the retained earnings account is:


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