I am having a problem with the following questions. Could you please help? I just want to make sure I have done these right. Please show all calculations where necessary. 1. The December 31, 2007, balance sheet of Far Imports includes the following items: 9% bonds payable due 12/31/2016 $800,000 Discount on Bonds Payable 21,600 The bonds were issued on Dec 31, 2006, at 97, with interest payable on June 30 and Dec 31 of each year. The straight-line method is used for discount amortization. On March 1, 2008, Far Imports retired $400,000 of these bonds at 98 plus accrued interest. Prepare the journal entries to record retirement of the bonds, including accrual of interest since the last payment and amortization of the discount. 2. In 2007, Johnson Builders began construction work under a three-year contract at a price of $7,525,000. The firm uses the percentage of completion method for financial accounting purposes. The income to be recognized each year is based on the proportion of cost incurred to the total estimated costs for completing the contract. The financial statement presentations relating to this contract on Dec. 31,2007 are: balance Sheet account receivable $150,500 Construction in progress $602,000 Less progress billings $562,000 $40,000 Income statement Gross profit on construction contracts $301,000 Determine the (a) Cash Collected in 2007 (b) estimated income on the construction contract 3. Tom Incorporated purchased 10,000 shares in Melissa Industries on January 1, 2007 for $10 a share. In April of 2007, Melissa Industries declared and paid dividends in the amount of $35,000. In October of 2007, Melissa Industries declared and paid dividends in the amount of $50,000. On November 12, 2007, Tom Inc. sold 5,000 shares of Melissa Industries at $15 per share. In December of 2007, Melissa Industries had 100,000 shares of stock outstanding the entire year of 2007, how will the income statement of Tom Incorporated be affected by 2007's activity?
Level/Year: 3rd semester
Subject: Intermediate Accounting
I have looked through the textbook. I have looked for examples online. I have searched the online library also.
Welcojme to JA and have a nice dayClick here for solution
On #3, the affect to Tom Inc would be to show other income?
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Doing Chartered Accountancy