Category: Uncategorized

Eagle Corp. purchased land, buildings and equipment for 900,000. The land has been appraised at $250,000, the buildings at $650,000 and the equipment at $100,000. The journal entry to record this transaction will include a debit to buildings for: (round to the nearest dollar): Answer:  $_______

A company purchased bonds on July 1, 2024, for $274,885 and intend to hold the bonds until maturity. This price represents a market rate of 6% on bonds that have a face amount of $250,000, have a stated rate of 8%, pay semiannual interest, and mature in 6 years. Calculate the amortized cost of the bonds as of December 31, 2024 (round to the nearest dollar).   Answer:  $_______

On January 1, 2024, the beginning balance in the Warranty Liability account was $65,000. Cash sales for the year totaled $900,000 and credit sales totaled $300,000.  The company estimates warranty costs at 6% of sales. During the year, $75,000 was paid to settle warranty claims. As a result of these transactions, what is the amount of warranty liability that is reported on the company’s 2024 year end balance sheet?   Answer:  $_______

Eagle Corp. acquired 30% interest in the voting stock of Bobcat Inc. for $650,000.  During the first year, Bobcat Inc. reported net income of $240,000 and paid cash dividends totaling $60,000.  What amount will Eagle Corp. report on its income statement related to its investment in Bobcat Inc?

Eagle Corp. exchanged an old machine with a book value of $39,000 and a fair market value of $35,000, and paid $10,000 cash for a similar new machine.  At what amount should Eagle Corp. record the new machine on their books and what amount of gain/loss should the company record for the old asset that was exchanged? New Machine Gain/Loss Old Machine A) $45,000  $4,000 loss B) $49,000 $4,000 gain C) $49,000 $4,000 loss D) $45,000  $4,000 gain E)  None of the above.  

On January 1, 2024, the beginning balance in the Warranties Liability account was $95,000. Cash sales for the year totaled $800,000 and credit sales totaled $500,000.  The company estimates warranty costs at 5% of sales. During the year, $85,000 was paid to settle warranty claims. As a result of these transactions, what is the amount of warranty liability that is reported on the company’s 2024 year-end balance sheet?   Answer:  $_______

Eagle Corp. made an ordinary repair to its lab equipment at a cost of $500 and purchased a motor for $3,000.  Eagle Corp.’s accountant debited the asset account for $3,500.  Is the accounting treatment an error?  If it is an error what is the effect on assets and net income for the year the expenditures were made?

Eagle Corp. purchased a new piece of equipment on January 1, 2024.  The equipment had a list price of $110,000, however the seller agreed to allow Eagle Corp. to pay for the equipment in 10 yearly installments of $14,000 on December 31 of each year.  Assuming the note incurs interest at 8% annually, what amount should Eagle Corp. debit the equipment account for on the date of purchase? (Round to the nearest dollar).   Answer:  $_______

Eagle Corp. has total assets as follows: $40,000 in cash, $20,000 in short-term investments, $110,000 in net current receivables, equipment of $60,000, and $8,000 in prepaid expenses. The total long-term liabilities of the firm are $160,000 and total liabilities are $240,000.  Based solely on the above information, Eagle Corp.’s current ratio is (round to two decimal places):  

On January 1, 2024, the beginning balance in the Warranties Liability account was $65,000. Cash sales for the year totaled $450,000 and credit sales totaled $850,000.  The company estimates warranty costs at 7% of sales. During the year, $70,000 was paid to settle warranty claims. As a result of these transactions, what is the amount of warranty liability that is reported on the company’s 2024 year end balance sheet?   Answer:  $_______