4/19/24, 11:40 AMQuestion 1 of 11 – ACC220 Term Test #3 W24
ACC220 Term Test #3 W24
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Question 1 of 11
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Current Attempt in Progress
The financial statements of Blossom Ltd., a private company reporting under ASPE, follow:
BLOSSOM LTD.
Balance Sheet
December 31
Assets
2024
2023
Cash
$11,340
$12,600
Short-term notes receivable
17,620
28,960
Accounts receivable
35,280
17,640
Inventory
36,540
31,500
Property, plant, and equipment
92,000
98,300
Accumulated depreciation
(37,800)
(30,240)
$154,980
$158,760
Accounts payable
$31,500
$54,180
Income tax payable
3,780
25,200
Notes payable
18,900
12,600
Common shares
31,500
31,500
Retained earnings
69,300
35,280
$154,980
$158,760
Total assets
Liabilities and Shareholders’ Equity
Total liabilities and shareholders’ equity
BLOSSOM LTD.
Income Statement
Year Ended December 31, 2024
Sales
$360,360
Cost of goods sold
244,440
Gross profit
115,920
Operating expenses
47,880
Profit from operations
68,040
Other revenues and expenses
Interest revenue
$(1,260)
Loss on sale of equipment
2,520
Interest expense
2,520
Profit before income tax
3,780
64,260
Income tax expense
18,900
Profit for the year
$45,360
Additional information:
1.
Short-term notes receivable are loans to other companies. During the year, the company collected the balance
outstanding at December 31, 2023, and made new loans in the amount of $17,620.
2.
Equipment was sold during the year. This equipment cost $18,900 originally and had a carrying amount of $12,600 at the
time of sale.
3.
Equipment costing $12,600 was purchased in exchange for a $12,600 note payable.
4.
Depreciation expense is included in operating expenses.
5.
Accounts receivable are from the sale of merchandise on credit.
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4/19/24, 11:40 AM
Question 1 of 11 – ACC220 Term Test #3 W24
6.
ACC220 Term Test #3 W24
Accounts payable relate to the purchase of merchandise on credit.
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Question
of 11
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25 a – sign e.g.
Prepare a1cash
flow statement for the year using the indirect method. (Show amounts that decrease cash flow with
-15,000 or in parenthesis e.g. (15,000).)
BLOSSOM LTD.
Cash Flow Statement
$
Adjustments
to reconcile
profit to
$
$
$
$
Note: Equipment costing $
was purchased by issuing a note payable.
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4/19/24, 11:40 AM
Question 2 of 11 – ACC220 Term Test #3 W24
ACC220 Term Test #3 W24
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Question 2 of 11
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On January 1, 2024, Cullumber Satellites Ltd. issued $1.09-million, 10-year bonds. The bonds pay semi-annual interest on July 1
and January 1, and Cullumber has a December 31 year end. A partial bond amortization schedule is presented below:
Semi-Annual
Interest Period
Interest
Payment
Interest
Expense
Carrying
Amount of Bonds
Amortization
Jan. 1, 2024
$1,019,107
July 1, 2024
$ [1]
$ [2]
$2,260
1,021,367
Jan. 1, 2025
43,600
45,962
2,362
1,023,729
July 1, 2025
43,600
46,068
[3]
1,026,197
Jan. 1, 2026
43,600
46,179
[4]
[5]
July 1, 2026
43,600
46,295
2,695
1,031,471
Jan. 1, 2027
43,600
46,416
2,816
1,034,287
Were the bonds issued at a premium or a discount?
Question Part Score
–/1
What is the face value of the bonds?
Face value of the bonds
$
Question Part Score
–/1
What is the contractual rate of interest?
%
Contractual rate of interest
Question Part Score
–/2
Fill in the missing amounts for items [1] through [5].
SemiAnnual
Interest
Period
Interest Payment
Interest Expense
Amortization
Jan. 1, 2024
July 1,
2024
$ [1]
$ [2]
$2,260
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4/19/24, 11:40 AM
Question 2 of 11 – ACC220 Term Test #3 W24
ACC220 Term Test #3 W24 Jan. 1, 2025
43,600
45,962
2,362
July 1,
2025
43,600
46,068
[3]
Jan. 1, 2026
43,600
46,179
[4]
July 1,
2026
43,600
46,295
2,695
Jan. 1, 2027
43,600
46,416
2,816
Question 2 of 11
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[5
Question Part Score
–/5
What was the market interest rate when the bonds were issued? (Round answer to 0 decimal places, e.g. 52%.)
Market interest rate
%
Question Part Score
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Record the issue of the bonds on January 1, 2024. (List debit entry before credit entry. Credit account titles are automatically
indented when the amount is entered. Do not indent manually. If no entry is required, select “No Entry” for the account titles and enter
0 for the amounts.)
Date
Account Titles
Debit
Credit
Jan. 1, 2024
Question Part Score
–/2
Record the interest payment on July 1, 2024. (List all debit entry before credit entries. Credit account titles are automatically
indented when the amount is entered. Do not indent manually. If no entry is required, select “No Entry” for the account titles and enter
0 for the amounts.)
Date
Account Titles
Debit
Credit
July 1, 2024
Question Part Score
–/3
Record the accrual of interest on December 31, 2024. (List all debit entry before credit entries. Credit account titles are
automatically indented when the amount is entered. Do not indent manually. If no entry is required, select “No Entry” for the account
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4/19/24, 11:40 AM
Question 2 of 11 – ACC220 Term Test #3 W24
titles and enter 0 for the amounts.)
ACC220 Term Test #3 W24
Date
Account Titles
Question 2 of 11
Dec. 31, 2024
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Debit
Credit
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4/19/24, 11:41 AM
Question 3 of 11 – ACC220 Term Test #3 W24
ACC220 Term Test #3 W24
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Question 3 of 11
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Swifty Manufacturing Inc. intends to finance the acquisition of new manufacturing equipment that costs $152,000 by issuing a
five-year, 3.50% note payable. The note would be issued on January 1, 2024. Swifty’s year end is December and the note would
require annual payments on December 31. The finance company has given Swifty the choice of making blended payments of
$33,665, or making fixed payments of $30,400 plus interest.
Assuming the blended payment option is selected, prepare the amortization table for the first two years of the note payable.
Semi-annual
Interest Period
Cash
Payment
Interest
Expense
Reduction
of Principal
Pr
Ba
$
Jan. 1, 2024
Dec. 31, 2024
Dec. 31, 2025
Record the issue of the note and the December 31, 2024, payment under this alternative. (Credit account titles are
automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries. Record journal
entries in the order presented in the problem.)
Date
Account Titles
Debit
Credit
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4/19/24, 11:41 AM
Question 4 of 11 – ACC220 Term Test #3 W24
ACC220 Term Test #3 W24
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Question 4 of 11
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A local company has just approached a venture capitalist for financing to develop a ski hill. On April 1, 2024, the venture capitalist
lent the company $1.03 million at an interest rate of 4%. The loan is repayable over four years in fixed principal payments. The
first payment is due March 31, 2025. The ski hill operator’s year end will be December 31.
Record the issue of the note payable on April 1, 2024. (List debit entry before credit entry. Credit account titles are automatically
indented when the amount is entered. Do not indent manually. If no entry is required, select “No Entry” for the account titles and enter
0 for the amounts.)
Date
Account Titles
Debit
Credit
Apr. 1
Question Part Score
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Calculate the amount of the fixed principal payment.
Fixed principal payment
$
Question Part Score
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Prepare an instalment payment schedule.
Period
Cash Payment
Interest Expense
Principal Reduction
$
Apr. 1, 2024
Mar. 31, 2025
Mar. 31, 2026
Mar. 31, 2027
Mar. 31, 2028
Total
$
$
$
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–/6
Record the accrual of interest on December 31, 2024, and the instalment payment on March 31, 2025. (List all debit entries
before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry
is required, select “No Entry” for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the
problem.)
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4/19/24, 11:41 AM
Question 4 of 11 – ACC220 Term Test #3 W24
ACC220 Term Test #3 W24 Date
Account Titles
Debit
Question 4 of 11
Credit
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Question Part Score
–/4
What amounts would be reported as current and non-current in the liabilities section of the company’s December 31, 2024,
balance sheet?
Balance Sheet (Partial)
$
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4/19/24, 11:41 AM
Question 5 of 11 – ACC220 Term Test #3 W24
ACC220 Term Test #3 W24
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Question 5 of 11
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The adjusted trial balance for Carla Vista Ltd. at October 31, 2024, contained the following:
Accounts payable
$54,720
Income tax expense
$11,328
Accounts receivable
94,080
Income tax payable
5,660
Allowance for doubtful accounts
4,700
Lease liability
38,680
Bonds payable, due 2027
499,300
Notes payable
221,000
Interest expense
51,300
Notes receivable, due December 2025
33,600
Interest payable
14,400
Unearned revenue
9,600
Of the lease liability amount, $25,370 is due within the next year. Total payments on the note payable in the next 12 months will
be $20,000, of which $10,680 is for interest. Carla Vista reported profit for the year ended October 31, 2024, of $34,842. Total
assets are $2,008,000.
Prepare the liabilities section of the balance sheet.
CARLA VISTA LTD.
Balance Sheet (Partial)
Liabilities and Shareholders’ Equity
$
$
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4/19/24, 11:41 AM
Question 5 of 11 – ACC220 Term Test #3 W24
ACC220 Term Test #3 W24
Question 5 of 11
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