Whispering Winds Corp. follows IFRS and sells its products in expensive, reusable containers that can be tracked. The customer is charged a deposit for each container that is delivered and receives a refund for each container that is returned within two years after the year of delivery. When a container is not returned within the time limit, Whispering Winds accounts for the container as being sold at the deposit amount and credits the account Container Sales Revenue. Information for 2017 is as follows:
Containers held by customers at December 31, 2016, from deliveries in: 2015 $170,800
2016 406,600 Total = $577,400
Containers delivered in 2017 892,900
Containers returned in 2017 from deliveries in: 2015 $119,000
2016 302,400
2017 316,600 Total = 738,000
Prepare all journal entries required for Whispering Winds Corp, for the returnable deposits during 2017
A) record deposit from customer
B) record refund of deposit to customer
C) record deposit amount for containers not returned
Whispering Winds Corp. follows IFRS and sells its products in expensive, reusable containers that can be tracked. The customer is charged a deposit for each container that is delivered and receives a refund for each container that is returned within two years after the year of delivery. When a container is not returned within the time limit, Whispering Winds accounts for the container as being sold at the deposit amount and credits the account Container Sales Revenue. Information for 2017 is as follows:
Containers held by customers at December 31, 2016, from deliveries in: 2015 $170,800
2016 406,600 Total = $577,400
Containers delivered in 2017 892,900
Containers returned in 2017 from deliveries in: 2015 $119,000
2016 302,400
2017 316,600 Total = 738,000
Prepare all journal entries required for Whispering Winds Corp, for the returnable deposits during 2017
A) record deposit from customer
B) record refund of deposit to customer
C) record deposit amount for containers not returned
Related questions
11.
Nichols Corporation purchased $200,000 of Holly Inc. 6.0% bonds at par with the intent and ability to hold the bonds until they matured in 2022, so Nichols classifies its investment as held to maturity. Unfortunately, a combination of problems at Holly and in the debt market caused the fair value of the Holly investment to decline to $166,000 during 2018. Nichols calculates that, of the $34,000 decrease in fair value, $10,000 of it relates to credit losses and $24,000 relates to noncredit losses.
Assume that Nichols concludes that the Holly bonds are other-than-temporarily impaired because Nichols is planning to sell the bonds in the near future. Before-tax net income for 2018 will be reduced by:
Multiple Choice
$10,000.
$0.
$24,000.
$34,000.
--------------
12.
Nichols Corporation purchased $300,000 of Holly Inc. 8% bonds at par with the intent and ability to hold the bonds until they matured in 2022, so Nichols classifies its investment as held to maturity. Unfortunately, a combination of problems at Holly and in the debt market caused the fair value of the Holly investment to decline to $254,000 during 2018. Nichols calculates that, of the $46,000 decrease in fair value, $12,000 of it relates to credit losses and $34,000 relates to noncredit losses.
Assume that Nichols concludes that the Holly bonds are other-than-temporarily impaired because Nichols believes it is more likely than not that it will have to sell the Holly bonds before the bonds have a chance to recover their fair value. Before-tax net income for 2018 will be reduced by:
Multiple Choice
$12,000.
$34,000.
$0.
$46,000
-----------------
14.
Jane's Donut Co. borrowed $207,000 on January 1, 2018, and signed a two-year note bearing interest at 12%. Interest is payable in full at maturity on January 1, 2020. In connection with this note, Jane's should report interest expense at December 31, 2018, in the amount of:
Multiple Choice
$0.
$49,680.
$24,840.
$52,661.
-----------
15.
On June 1, 2018, Dirty Harry Co. borrowed cash by issuing a 6-month noninterest-bearing note with a maturity value of $410,000 and a discount rate of 7%. Assuming straight-line amortization of the discount, what is the carrying value of the note as of September 30, 2018? (Round all calculations to the nearest whole dollar amount.)
Multiple Choice
$433,917.
$405,217.
$386,083.
$395,650.
---------------------
16.
Lake Co. receives nonrefundable advance payments with special orders for containers constructed to customer specifications. Related information for 2018 is as follows ($ in millions):
| Customer advances balance, Dec. 31, 2017 | $ | 113 | |
| Advances received with 2018 orders | 200 | ||
| Advances applicable to orders shipped in 2018 | 177 | ||
| Advances from orders canceled in 2018 | 49 | ||
What amount should Lake report as a current liability for advances from customers in its Dec. 31, 2018, balance sheet?
Multiple Choice
$87 million.
$313 million.
$0.
$136 million.
--------------------
17.
B Corp. has an employee benefit plan for compensated absences that gives each employee 10 paid vacation days and 10 paid sick days. Both vacation and sick days can be carried over indefinitely. Employees can elect to receive payment in lieu of vacation days; however, no payment is given for sick days not taken. At December 31, 2018, B's unadjusted balance of liability for compensated absences was $36,000. B estimated that there were 300 total vacation days and 150 sick days available at December 31, 2018. B's employees earn an average of $194 per day. In its December 31, 2018, balance sheet, what amount of liability for compensated absences is B required to report?
Multiple Choice
$128,040.
$87,300.
$58,200.
$69,840.
---------------------
18.
On January 1, 2018, G Corporation agreed to grant all its employees two weeks paid vacation each year, with the stipulation that vacations earned each year can be taken the following year. For the year ended December 31, 2018, G's employees each earned an average of $810 per week. A total of 550 vacation weeks earned in 2018 were not taken during 2018. Wage rates for employees rose by an average of 6 percent by the time vacations actually were taken in 2019. What is the amount of G's 2019 wages expense related to 2018 vacation time?
Multiple Choice
$472,230.
$26,730.
$445,500.
$0.
----------------------
19.
Clark's Chemical Company received refundable deposits on returnable containers in the amount of $108,000 during 2018. Thirteen percent of the containers were not returned. The deposits are based on the container cost marked up 30%. What is cost of goods sold relative to this forfeiture?
Multiple Choice
$10,800.
$3,240.
$0.
$46,800.
-----------------
20.
In May of 2018, Raymond Financial Services became involved in a penalty dispute with the EPA. At December 31, 2018, the environmental attorney for Raymond indicated that an unfavorable outcome to the dispute was probable. The additional penalties were estimated to be $769,000 but could be as high as $1,168,000. After the year-end, but before the 2018 financial statements were issued, Raymond accepted an EPA settlement offer of $898,000. Raymond should have reported an accrued liability on its December 31, 2018, balance sheet of:
Multiple Choice
$270,000.
$898,000.
$769,000.
$1,168,000.
