Question : Short Problems 1.On May 1, 2015, $12,000 of annual magazine subscriptions : 1241798

Short Problems

1.On May 1, 2015, $12,000 of annual magazine subscriptions were sold by Glolar, Inc. The subscribed magazines are delivered on the first day of each month beginning on May 1, 2015. The total cost of the subscribed magazines is $3,600 or $300 per month.

A.Determine the amount of revenue during 2015.

B.Explain how the matching concept is applied relative to the magazines.

2.During 2015, Hamot Company sold $40,000 of computer chips to a distributor on account. The distributor planned to sell those chips to a German company. The sold chips were shipped to a warehouse owned by Hamot and were still there on December 31, 2015. Hamot’s CFO left two messages for the distributor but received no return calls. The distributor has had no prior dealings with Hamot or any other manufacturer of computer chips. None of the past due balance of $40,000 has been paid. How much sales revenue associated with this transaction would be reported on the income statement for the year ending December 31, 2015?  Explain your selection.

3.During January of 2015, Barry Corporation purchased five acres of land for cash of $120,000 from Foley Company.  On December 31, 2015, after Barry built its plant, it was estimated that the land’s fair market value was $140,000. At what amount would land be measured on Barry’s December 31, 2015balance sheet?

4.On December 31, 2015, total assets and liabilities are measured at $18,000 and $12,000, respectively. The total market value of the company’s common stock is $7,000. At what amount would shareholders’ equity be measured on the December 31, 2015balance sheet?

5.Equipment with an original cost of $23,000 has a fair market value of $19,000, current replacement cost of $26,000, and a depreciated value of $21,000 on December 31, 2015. At what amount would net equipment be measured on the December 31, 2015balance sheet?

6.Short-term investments have an original cost of $2,500 and a market price of $3,500 at December 31, 2015. At what amount would the investments be measured on the December 31, 2015balance sheet?

7.Accounts receivable have a face value of $10,000 and estimated net realizable value of $9,000 on December 31, 2015. At what amount would the accounts receivable be measured on the December 31, 2015balance sheet?

8.Equipment with an original cost of $55,000 has a fair market value of $65,000 and accumulated depreciation of $15,000 on December 31, 2015. What amount would the December 31, 2015balance sheet show as the equipment’s net book value?

9.On December 1, 2015, Karr Company purchased inventory for $54,000. On December 31, 2015, the replacement cost of that inventory is $57,000. At what amount would inventory be measured on the December 31, 2015balance sheet?

10.On October 1, 2015, $16,000 of annual magazine subscriptions were sold by Kitchen Design Magazines. The subscribed magazines are delivered on the first day of each month beginning on October 1, 2015.  The total cost of the subscribed magazines is $6,000, equal to $500 per month. Determine the amount of revenue and the cost of the magazines to be recognized during 2015.