## Purchase Solved ACCT 212 Week 6 Homework Assignment Collection

##### ACCT 212 Week 6 Homework Assignment (Summer 2021)

**1. Question:** McCoy’s Fish House purchases a tract of land and an existing building for $1,000,000. The company plans to remove the old building and construct a new restaurant on the site. In addition to the purchase price, McCoy pays closing costs, including title insurance of $3,000. The company also pays $14,000 in property taxes, which includes $9,000 of back taxes (unpaid taxes from previous years) paid by McCoy on behalf of the seller and $5,000 due for the current fiscal year after the purchase date. Shortly after closing, the company pays a contractor $50,000 to tear down the old building and remove it from the site. McCoy is able to sell salvaged materials from the old building for $5,000 and pays an additional $11,000 to level the land.

Required:

a. Determine the amount McCoy’s Fish House should record as the cost of the land. (Amounts to be deducted should be indicated by a minus sign.)

**2. Question:**

Required:

a. Prepare a depreciation schedule for six years using the straight-line method. (Do not round your intermediate calculations.)

Cost of the Machine $228,000

Less: salvage Value: $24,000 Depreciatble Value: $204,000 Estimated Life: 12,000

**3. Question:**

b. Double Decline Method

Annual Depreciation: 1/Life*2

Depreciation Rate: (1/6)*2 33% 0.3333333333333333

Book Value Depreciation Expenses @ 33% Accumulated Depreciation Book Value

$228,000 $75,999 $75,999 $152,001

$152,001 $50,667 $126,666 $101,334

$101,334 $33,778 $160,444 $67,556

$67,556 $22,519 $182,963 $45,037

$45,037 $15,012 $197,975 $30,025

$30,025 $6,025 $204,000 24,000

**4. Question:**

Prepare a depreciation schedule for six years using the activity-based method. (Round your “Depreciation Rate” to 2 decimal places and use this amount in all subsequent calculations.) $228,000

**5. Question:**

Required:

a. Calculate Sub Station’s return on assets, profit margin, and asset turnover ratio. (Enter your answers in thousands of dollars. (i.e.

**6. Question:**

b. Calculate Planet Sub’s return on assets, profit margin, and asset turnover ratio. (Enter your answers in thousands of dollars. (i.e. 123,000 should be entered as 123).)

**7. Question:**

a. Which company has the higher profit margin?

Sub Station

b. Which company has the higher asset turnover?

Planet Sub

c. Are the two ratios consistent with the primary business strategies of the two companies?

Yes

**8. Question:**

1 November 01, 2021 ($55,000 x 6% x 2 / 12) = $550

2 December 31, 2021 ($55,000 x 6% x 1 / 12) = $275

3 February 01, 2022 ($55,000 x 6% x 2 / 12) = $550

**9. Question:**

1 January 31 Salaries Expense (D) $1,400,000 Income Tax Payable (C) $297,500

FICA Tax Payable (C) $107,100

Accounts Payable (C) $14,000

Salaries Payable (C) $981,400 2 January 31 Salaries Expense (D) $42,000

Accounts Payable (C) $42,000 3 January 31 Payroll Tax Expense (D) $193,900

FICA Tax Payable (C) $107,100 Unemployment Tax Payable (C) $86,800

**10. Question:**

Face Value $40,900,000

Interest payment ($40,900,000 x 8% x 1/2year) = $1,636,000 Periods to maturity (15 years x 2 periods each year) = 30 Market interest rate (7%/2 periods each year) = 3.5

Issue Price = ($1,636,000 x 18.39205) + ($40,900,000 x 0.35628) = 44,661,245.80

Semiannual rate = Market rate / Semiannual periods

3.5 = 7 / 2

The bonds will issue at A Premium

**11. Question:** If the market rate is 8%, calculate the issue price.

Face Value $40,900,000

Interest payment ($40,900,000 x 8% x 1/2year) = $1,636,000 Periods to maturity (15 years x 2 periods each year) = 30 Market interest rate (8%/2 periods each year) = 4

Issue Price = ($1,636,000 x 17.29203) + ($40,900,000 x 0.30832) = $40,900,049.08

Semiannual rate = Market rate / Semiannual periods 4 = 8 / 2

The bonds will issue at the Face amount

12. Question: If the market rate is 9%, calculate the issue price.

Face Value $40,900,000

Interest payment ($40,900,000 x 8% x 1/2year) = $1,636,000 Periods to maturity (15 years x 2 periods each year) = 30 Market interest rate (9%/2 periods each year) = 4.5

##### ACCT 212 Week Six Homework Practice:

**1. Question:**

Fresh Veggies, Inc. (FVI), purchases land and a warehouse for

$490,000. In addition to the purchase price, FVI makes the following expenditures related to the acquisition: broker’s commission, $29,000; title insurance, $1,900; and miscellaneous closing costs, $6,000. The warehouse is immediately demolished at a cost of $29,000 in anticipation of building a new warehouse.

a. Determine the amount FVI should record as the cost of the land.

$555,900

**2. Question:**

a. Prepare a depreciation schedule for six years using the straight-line method. (Do not round your intermediate calculations.)

**3. Question:** b. Double Decline Method

Annual Depreciation: 1/Life*2

Depreciation Rate: (1/6)*2 33% 0.3333333333333333

Book Value Depreciation Expenses @ 33% Accumulated Depreciation Book Value

$270,000 $90,000 $90,000 $180,000

$180,000 $60,000 $150,000 $120,000

$120,000 $40,000 $190,000 $80,000

$80,000 $26,667 $216,667 $53,333

$53,333 $17,778 $234,445 $35,555

$35,555 11,555 246,000 24,000

**4. Question:** Prepare a depreciation schedule for six years using the activity-based method. (Round your “Depreciation Rate” to 2 decimal places and use this amount in all subsequent calculations.)

Year Depreciation Expense Accumulated Depreciation Book Value

1 $63,550 $63,550 $206,450

2 $22,550 $86,100 $183,900

3 $24,600 $110,700 $159,300

4 $57,400 $168,100 $101,900

5 $53,300 $221,400 $48,600

6 $24,600 $246,000 $24,000

Total $246,000

**5. Question:**

a. Calculate Sub Station’s return on assets, profit margin, and asset turnover ratio. (Enter your answers in thousands of dollars. (i.e. 123,000 should be entered as 123).)

**6. Question:**

B. Calculate Planet Sub’s return on assets, profit margin, and asset turnover ratio.

**7. Question:**

B2. Which company has the higher profit margin? Sub Station

B3. Which company has the higher asset turnover?

Planet Sub

B4. Are the two ratios consistent with the primary business strategies of the two companies?

Yes

**8. Question:**

Explanation

1.-3.

Interest Expense ($60,000 × 7% × 2 / 12) = $700 Interest Expense ($60,000 × 7% × 1 / 12) = $350 Interest Payable ($60,000 × 7% × 2 / 12) = $700

**9. Question:**

**10. Question:**

**11. Question:**

**12. Question:**

##### ACCT 212 Week 6 Homework Assignment (Summer 2020)

**1. Question: **BelvidereSelf Storage purchased land, paying $160,000cash as a down payment and signing a $155,000note payable for the balance. Belvidere also had to pay delinquent property tax of $2,500, title insurance costing $5,500, and $ 11,000 to level the land and remove an unwanted building. The company paid $52,000 to add soil for the foundation and then constructed an office building at a cost of $750,000. It also paid $53,000 for a fence around the property, $21,000 for the company sign near the property entrance, and $9,000 for the lighting of the grounds.

- What is the … cost of each of Belvidere’s land, land improvements, and building?
- What is the capitalized cost of Land improvements
- What is the capitalized cost of the building?

**2. Question: **DeluxePizza bought a used Ford delivery van on January 2, 2018, for $18,600. The van was … to remain in service for four years (57,000 miles). At the end of its useful life, Deluxemanagement estimated that the van’s residual value would be $1,500. The van traveled 20,500 miles in the first year, 16,000 miles in the second year, 15,400 miles in the third year, and 5,100 miles in the fourth year. Prepare a schedule of depreciation expense per year for the van under the three depreciation methods. (For units-of-production and double-declining-balance methods, round to the nearest two decimal places after each step of the)

- Straight-Line method.
- Units of Production Method.
- Double declining balance method
- Which method best tracks the wear and tear on the van?
- The double-declining-balance (DDB) method.

**3. Question: **EastSales Company completed the following note payable transactions:

- How much interest expense must be accrued on December 31, 2018? (Round your answer to the nearest whole dollar.)
- Determine the amount of EastSales’ final payment on April 1, 2019
- Compute the final payment
- How much interest expense will EastSales report for 2018 and for 2019? (If needed, round your answer to the nearest whole dollar.)

**4. Question: **WesternElectronics completed these selected transactions during June 2018

- Report these items on Western Electronics’ balance sheet on June 30,
- Then begin calculating the actual expenses for each account. Remember Sales of $2,200,000 are subject to an accrued warranty cost of 7%. The accrued warranty payable at the beginning of the year was $40,000, and warranty payments for the year totaled $62,000.Now calculate the warranty expense.
- Calculate the
**Accrued Warranty**balance reported on the balance sheet at June 30. - On June 1, Western Electronics signed a $65,000 note payable that requires annual payments of $13,000 plus 4%interest on the unpaid balance beginning June 1, 2019. (Enter the interest rate as a whole number. Round your answer to the nearest whole)
- Bonita, Inc., a chain of discount stores, ordered $120,000 worth of wireless speakers and related products. With its order, Bonita, sent a check for $120,000 in advance, and Western shipped $45,000 of the goods. Western will ship the remainder of the goods on July 3, 2018. Calculate the unearned revenue at the date of the balance sheet.
- The June payroll of $220,000 is subject to employee withheld income tax of $31,000 and FICA tax of 65%. On June 30, Western pays employees their take-home pay and accrues all tax amounts. Calculate the FICA tax payable now.

**5. Question:** Companies that operate in different industries may have very different financial ratio values. These differences may grow even wider when we compare companies located in different countries. Review the following financial statements.

- Compare three fictitious companies (Accord, Malcomb, and Reamer) by calculating the following ratios: current ratio, debt ratio, leverage ratio, and times-interest-earned ratio. Use year-end figures in place of averages where … for calculating the ratios in this exercise. Based on the debt ratios, which company is the least risky?
- First calculate the current ratios for Accord, Malcomb, and Reamer.
- Then calculate the debt ratios.
- Calculate the leverage ratio.
- Calculate the times-interest earned ratio.

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