Help Neded in Accounting Assignment

I need help with the assignemnt attached. Please show all work. Thanks

 

1.Sunshine Cosmetics Corporation needs to acquire new facilities and is currently considering two opportunities: one involving a lease and the other, a purchase.

The first proposed facility can be leased by Sunshine for twelve years for $240,000 per year, payable at the beginning of each year. The facilities will be upgraded to Sunshine’s specifications before it moves in, and Sunshine will have no additional costs during the 12 years. Sunshine will have to make a deposit of $100,000 at the inception of the lease, which will be returned at the end of the 12th year if there is no unusual damage to the building structure or fixtures.

The second proposal requires that Sunshine purchase the land, construct the building, and purchase all of the fixtures itself. Sunshine would have to make a down payment of $400,000, and would pay off the balance over 5 years, at $300,000 per year (including interest). Sunshine would have to incur expenses of property tax ($40,000 per year) and maintenance ($16,000 per year)—both of which are paid at the end of each year. Insurance of $27,000 per year must be paid at the beginning of each year. The property is expected to have a useful life of 12 years, with a salvage value of $500,000 at the end of that time.

Sunshine’s cost of funds is 10%

Required:

Which opportunity should Sunshine pursue to acquire its new facilities? Explain carefully, and show your computations.

2. Xavier Company has a customer that is just starting up, and the customer wants to acquire merchandise but defer payment for several years. The customer wants a 4-year note, with 10% interest payable at the end of each year. The current market interest rate is 12%. On 1/1/12, Xavier agrees to accept a 10%, $8,000 Note Receivable (N/R), payable in 4 years, including interest.

Required:

(1) Based on the information above, how much merchandise will Xavier give to the customer for this note?

(2) How will Xavier record the issuance of the note receivable?

(3) Prepare the amortization table over the life of the note.

(4) How will Xavier record the receipt of the first interest payment on 1/1/13?

3. On 6/1/12, accounts receivable in the amount of $300,000 were assigned to the Perch Finance Company by Bass, Inc., as security for a loan of $250,000. The finance company charged a 5% commission on the face amount of the loan, and the note bears interest at 9%. Bass is to remit amounts collected on the accounts, along with interest, at the end of each month until the note is repaid.

During the month of June, Bass received returns of $10,000 and collected $160,000 on the assigned accounts, after discounts of $3,000. In July, another $80,000 was collected, and another $40,000 was collected in August. At 8/31/12, Bass determined that no further collections would be made.

Required:

(a) Make all the entries required on Bass’s books associated with the assignment of the accounts on 6/1/12.

(b) Make any entries required by Bass on 6/30, 7/31, and 8/31.

3. As the new junior accountant at Colwell Company, you have been asked to prove the cash account balance at 12/31/12. You have obtained the following information:

a. The 12/31/12 bank statement shows a beginning balance of $38,783, receipts of $229,832, disbursements of $226,625, and an ending balance of $41,990.

b. There were deposits of $11,450 on 11/30/12 that did not reach the bank until December. On 12/31/12, deposits of $10,900 were mailed to the bank.

c. The list of outstanding checks totaled $29,831 at 11/30/12 and $33,450 at 12/31/12.

d. On 11/15/12, the bank made an error charging Colwell for a $1,000 withdrawal that should have been deducted from the account of Cromwell Company. Colwell is waiting for the bank to recognize the error.

e. On 12/20/12, Colwell wrote a check for $415.30, but recorded it as $451.30. The check cleared the bank in December.

f. Colwell’s 12/22/12 deposit for $11,930 was recorded as $19,330.

g. The bank statement showed that deposited checks totaling $6,520 were dishonored during December.

h. Interest on a bank loan for the month of December charged by the bank but not recorded on the books amounted to $355.

i. The bank charged Colwell a $75 service charge for December.

Required:

(a) Prepare a bank reconciliation for Colwell, determining the correct cash balance.

(b) Prepare the journal entries required by Colwell at 12/31/12.

(c) What cash amount will appear on Colwell’s balance sheet at 12/31/12?