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Disney World Theme Park - Media Mars -Financial Accounting Assignment Help
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Internal Code : 6CHEG
In 2017, it was determined that $1,825,000 of year-end 2016 receivables had to be written off as uncollectible. This was due in part to the fact that Hughes Corporation, a long-standing customer that had always paid its bills, unexpectedly declared bankruptcy in 2017. Hughes owed McLaughlin $1,400,000. At the end of 2016, none of the Hughes receivable was considered uncollectible.
1.Describe the appropriate accounting treatment and required disclosures for McLaughlin’s underestimation of bad debts at the end of 2016
Part B
Financial institutions have developed a wide variety of methods for companies to use their receivables to obtain immediate cash. The methods differ with respect to which rights and risks are retained by the transferor (the original holder of the receivable) and those passed on to the transferee (the new holder, usually a financial institution).
1. Describe the alternative methods available for companies to use their receivables to obtain immediate cash.
2. Discuss the alternative accounting treatments for these methods. (2 points)
Part C
The table below contains selected financial information included in the 2013 financial statements of Del Monte Foods Co. and Smithfield Foods Inc.
1. Calculate the 2013 receivables turnover ratio and average collection period for both companies. Evaluate the management of each company’s investment in receivables.
Task: 4
Macys allows its customers to return merchandise for any reason up to 60 days after purchase and receive a credit to their accounts. All of Macys’ sales are for credit (no cash is collected at the time of sale). The company began year 1 with an allowance for sales returns of $275,000. During year 1, Macys sold merchandise on account for $20,000,000. This merchandise sold cost Macys 35% of selling prices. During the year, customers returned $600,000 in sales for credit. Sales returns, estimated to be 3% of sales, are recorded as an adjusting entry at the end of the year.
1. Prepare the entry to record the merchandise returns.
2. Prepare the year-end adjusting entry for estimated returns. 3. What is the amount of the year-end allowance for sales returns after the adjusting entry is recorded?
Task: 5
Marker Inc. has the following cash balances
1. Prepare the current assets and current liabilities section of Marker’s year 1 balance sheet, assuming Marker reports under U.S. GAAP.
2. Prepare the current assets and current liabilities section of Marker’s year 1 balance sheet, assuming Marker reports under IFRS.
3. Clearly explain why Marker’s current assets, and current liabilities would differ in you answers to part 1 and part II above; by how much would current liabilities differ under IFRS?
Task: 6
1. The Knotworth Gedding Consulting Company purchased a machine for $15,000 down and $500 a month payable at the end of each of the next 36 months. How would the company calculate the cash price of the machine, assuming the annual interest rate is known?
Task: 7
The Golson Company uses the periodic inventory system. Information for 2016 is as follows:
Golson's cost of goods sold for 2016 is?
Task: 8
The Omagosh Company purchased office furniture for $25,800 and agreed to pay for the purchase by making five annual installment payments beginning one year from today. The installment payments include interest at 8%. The present value of an ordinary annuity for five periods at 8% is 3.99271. The present value of an annuity due for five periods at 8% is 4.31213. What is the required annual installment payment?
Task: 9
Cash equivalents include all of the followings
Task: 10
Internal control refers to a company’s plan
Task: 11
Five Dollar Stores (FDS) sells merchandise for cash. It began 2018 with a refund liability of $0, made sales of $1,000,000 during 2018 which cost FDS $600,000 (or 60%), estimates that 1% of all sales will be returned, and experiences $8,000 of returns during 2018. When accruing its estimate of remaining returns at the end of 2018, FDS would debit Inventory—estimated returns and credit COGS for?
Task: 12
On June 30, 2016, General Motors issued 5% stated rate bonds with a face amount of $100 million. The bonds mature on June 30, 2036 (20 years). The market rate of interest for similar issues was 6%. Interest is paid semiannually (2.5%) on June 30 and December 31, beginning December 31, 2016. The interest payment is $2.5 million (2.5% X $100 million).
1. What was the price of the bond issue?
2. What amount of interest expense will General Motors record for the bonds in 2016?
Financial Accounting Assignment Help
Task: 1 Disney World operates a theme park in Orlando, Florida. An all-day family (family of four) pass to the theme park can be purchased for $200. Adult customers also can purchase a season pass that entitles the pass holder to enter the park any day during the season, which typically runs from June 1 through December 31st. Disney World expects its season pass holders to use their passes equally throughout the season. The company’s fiscal year ends on December 31. On January 1st, year 1, John purchased a family season pass for $2000. 1. When should Disney World recognize revenue from the sale of its season passes? 2. Prepare the appropriate journal entries that Disney World would record on January 1st and November 30 based on the season pass purchased 3. What will be included in the Disney World’s fiscal year 1 income statement related to the sale of the family season pass to John? 4. What will be included in the Disney World’s fiscal year 1 balance sheet related to the sale of the family season pass to John? Task: 2 Media Mars (“MM”) sells a big screen TV package consisting of a 60-inch plasma TV, a universal remote, and on-site installation by MM staff. The installation includes programming the remote to have the TV interface with other parts of the customer’s home entertainment system. MM concludes that the TV, remote, and installation service are separate performance obligations. MM sells the 60-inch TV separately for $3,400, sells the remote separately for $200, and offers the installation service separately for $400. The entire package sells for $3,800. 1. How much revenue would be allocated to the TV? 2. How much revenue would be allocated to the TV remote? 3. How much revenue would be allocated to the TV installation service? 4. Prepare the journal entry to record Media Mars’ total sales revenue for one TV if the customer paid cash for installation and used the store’s credit card to pay for all the other related charges. Task: 3 Part A McLaughlin Corporation uses the allowance method to account for bad debts. At the end of the company’s fiscal year, accounts receivables are analyzed and the allowance for uncollectible accounts is adjusted. At the end of 2016, the company reported the following amounts:
In 2017, it was determined that $1,825,000 of year-end 2016 receivables had to be written off as uncollectible. This was due in part to the fact that Hughes Corporation, a long-standing customer that had always paid its bills, unexpectedly declared bankruptcy in 2017. Hughes owed McLaughlin $1,400,000. At the end of 2016, none of the Hughes receivable was considered uncollectible.
1.Describe the appropriate accounting treatment and required disclosures for McLaughlin’s underestimation of bad debts at the end of 2016
Part B
Financial institutions have developed a wide variety of methods for companies to use their receivables to obtain immediate cash. The methods differ with respect to which rights and risks are retained by the transferor (the original holder of the receivable) and those passed on to the transferee (the new holder, usually a financial institution).
1. Describe the alternative methods available for companies to use their receivables to obtain immediate cash.
2. Discuss the alternative accounting treatments for these methods. (2 points)
Part C
The table below contains selected financial information included in the 2013 financial statements of Del Monte Foods Co. and Smithfield Foods Inc.
1. Calculate the 2013 receivables turnover ratio and average collection period for both companies. Evaluate the management of each company’s investment in receivables.
Task: 4
Macys allows its customers to return merchandise for any reason up to 60 days after purchase and receive a credit to their accounts. All of Macys’ sales are for credit (no cash is collected at the time of sale). The company began year 1 with an allowance for sales returns of $275,000. During year 1, Macys sold merchandise on account for $20,000,000. This merchandise sold cost Macys 35% of selling prices. During the year, customers returned $600,000 in sales for credit. Sales returns, estimated to be 3% of sales, are recorded as an adjusting entry at the end of the year.
1. Prepare the entry to record the merchandise returns.
2. Prepare the year-end adjusting entry for estimated returns. 3. What is the amount of the year-end allowance for sales returns after the adjusting entry is recorded?
Task: 5
Marker Inc. has the following cash balances
1. Prepare the current assets and current liabilities section of Marker’s year 1 balance sheet, assuming Marker reports under U.S. GAAP.
2. Prepare the current assets and current liabilities section of Marker’s year 1 balance sheet, assuming Marker reports under IFRS.
3. Clearly explain why Marker’s current assets, and current liabilities would differ in you answers to part 1 and part II above; by how much would current liabilities differ under IFRS?
Task: 6
1. The Knotworth Gedding Consulting Company purchased a machine for $15,000 down and $500 a month payable at the end of each of the next 36 months. How would the company calculate the cash price of the machine, assuming the annual interest rate is known?
Task: 7
The Golson Company uses the periodic inventory system. Information for 2016 is as follows:
Golson's cost of goods sold for 2016 is?
Task: 8
The Omagosh Company purchased office furniture for $25,800 and agreed to pay for the purchase by making five annual installment payments beginning one year from today. The installment payments include interest at 8%. The present value of an ordinary annuity for five periods at 8% is 3.99271. The present value of an annuity due for five periods at 8% is 4.31213. What is the required annual installment payment?
Task: 9
Cash equivalents include all of the followings
Task: 10
Internal control refers to a company’s plan
Task: 11
Five Dollar Stores (FDS) sells merchandise for cash. It began 2018 with a refund liability of $0, made sales of $1,000,000 during 2018 which cost FDS $600,000 (or 60%), estimates that 1% of all sales will be returned, and experiences $8,000 of returns during 2018. When accruing its estimate of remaining returns at the end of 2018, FDS would debit Inventory—estimated returns and credit COGS for?
Task: 12
On June 30, 2016, General Motors issued 5% stated rate bonds with a face amount of $100 million. The bonds mature on June 30, 2036 (20 years). The market rate of interest for similar issues was 6%. Interest is paid semiannually (2.5%) on June 30 and December 31, beginning December 31, 2016. The interest payment is $2.5 million (2.5% X $100 million).
1. What was the price of the bond issue?
2. What amount of interest expense will General Motors record for the bonds in 2016?
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