Accounting Questions and Answers

Question 1: Bond Amortization and Adjusting Entries

Question 1. Alpha Company Purchased a $1,000, 5 Years, 5% Bond On July 1, 2015 For $950. Interest Is Paid Semi-Annually On June 30. The Straight Line Method Of Amortization Is Used For Both Premiums & Discounts. Use This Information To Prepare The Adjusting General Journal Entry (Without Explanation) For The December 31, 2017. If No Entry Is Required Then Write "No Entry Required."

Question 2. Alpha Company Purchased a Bond Investment On January 1, 2017.  The Bonds Have a Par Of $10,000, Pay Interest At a 5% Annual Rate And Have 5 Years Until Maturity. What Is The Total Interest Income That Will Be Reported Over The Life Of The Bond Investment If The Bonds Were Purchased At 103 And Alpha Uses The Straight Line Amortization Method?

Question 3. On January 1, 2017, Alpha Company Purchased a Significant Influence Shares Investment In The Bravo-Zulu Company For $250,000.  This Investment Balance Represents 30% Of The Equity Of The Bravo-Zulu Company.  During 2017, Bravo-Zulu Company Reported Net Income Of $25,000 On November 15, 2017 Bravo-Zulu Company Paid Cash Dividends Of $10,000 To Its Shareholders. Use This Information To Prepare The January 1, November 15 And December 31, 2017 General Journal Entry (Without Explanation.) If No Entry Is Required, Then Write "No Entry Required."

Question 4 On January 1, 2017, Alpha Company Purchased a Significant Influence Shares Investment In The Bravo-Zulu Company For $250,000.  This Investment Balance Represents 25% Of The Equity Of The Bravo-Zulu Company.  During 2017, Bravo-Zulu Company Reported Net Income Of $25,000 On November 15, 2017 Bravo-Zulu Company Paid Cash Dividends Of $10,000 To Its Shareholders. Using This Information, What Are The Fy 2017 Balances In Alpha Company's Account Balances For:

Investment In Bravo-Zulu

Investment Income

Question 5 On January 2, 2017, Alpha Company Purchased 10,000 Shares Of The Stock Of Zulu Company, And Did Not Obtain Significant Influence.  The Investment Is Intended As a Long-Term Investment.  The Stock Was Purchased For $10 Per Share, And Represents a 10% Ownership Stake.  Zulu Company Made $25,000 Of Net Income In 2017, And Paid Dividends Of $10,000 On December 15, 2017.  On December 31, 2017, Zulu Company's Stock Was Trading On The Open Market For $12 Per Share At The End Of The Year.  Use This Information To Determine The Dollar Amounts That Should Be Reported By Alpha Company During 2017 For The Following Items:

Walt Disney net income is $42.8 billion in year 2019. The cost of goods sold $32.9 billion. In the year 2019 the company organization has earned $9.9 billion of gross profit.

A corporate tax is one of the direct taxes that is imposed by the jurisdiction on the income or capital of the company or analogous legal entities (Dyreng, Hoopes & Wilde, 2016). In United States the corporate tax rate has fall down from 35% to 22.4% from year 2017 to 2019 in a flat tax system. Therefore it is found that statutory federal tax rate was 22.4%. In the year 2017, the corporate rate was 35% that was fallen down till the year 2019.

Comprehensive Income statement provides the net assets summary of the organization in a certain period of time. Thus, Walt Disney accumulated other comprehensive income in 2018 was 314 million which was decreased by $294 million until the year 2019. It shows that the margin of profit of the organization is decreased in the year 2019 as compared to the previous year (Lin, Martinez, Wang & Yang, 2018).

There are various other Comprehensive incomes which include these kinds of gains, revenues, and expenses and also the losses under these both International Financial Reporting Standards and Generally Accepting Accounting Principles as this is included from the net income statement. Therefore, in the other comprehensive items that had been covered in the income or in the loss are:-

 Foreign Currency translation and other

 Postretirement medical plan and Pension adjustments

 Market Value that is an adjustment that for hedges

 Market value adjustment for investments

The bottom line of the comprehensive income consolidated statement showcases the total comprehensive income attribute Walt Disney that occurs from excluding external expenses and including external income. Therefore, the comprehensive income attributes of the company was $1.4 billion in the year 2019 that was increased by $1 billion that showcase that the overall comprehensive income of the company is growing sufficiently.

References

Dyreng, S. D., Hoopes, J. L., & Wilde, J. H. (2016). Public pressure and corporate tax behavior. Journal of Accounting Research, 54(1), 147-186.

Lin, S., Martinez, D., Wang, C., & Yang, Y. W. (2018). Is other comprehensive income reported in the income statement more value relevant? The role of financial statement presentation. Journal of Accounting, Auditing & Finance, 33(4), 624-646.