ACC 545 Week 3 Individual Assignment Jamona Corp. Scenario / acc545dotcom
For more course tutorials visit www.acc545.com 1 On January 1, 2007, Jamona Corp. signed a five-year non-cancelable lease for a machine. The terms of the lease called for Jamona to make annual payments of $8,668 at the beginning of each year, starting January 1, 2007. The machine has an estimated useful life of six years and a $5,000 un-guaranteed residual value. The machine reverts to the lessor at the end of the lease term. Jamona uses the straight-line method of depreciation for all of its plant assets. Jamona’s incremental borrowing rate is 10%, and the lessor’s implicit rate is unknown.
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1 On January 1, 2007, Jamona Corp. signed a five-year non-cancelable lease for a machine. The terms of the lease called for Jamona to make annual payments of $8,668 at the beginning of each year, starting January 1, 2007. The machine has an estimated useful life of six years and a $5,000 un-guaranteed residual value. The machine reverts to the lessor at the end of the lease term. Jamona uses the straight-line method of depreciation for all of its plant assets. Jamona’s incremental borrowing rate is 10%, and the lessor’s implicit rate is unknown.
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<strong>ACC</strong> <strong>545</strong> <strong>Week</strong> 3 <strong>Individual</strong> <strong>Assignment</strong> <strong>Jamona</strong> <strong>Corp</strong>.<strong>Scenario</strong>Click Here to Buy the Tutorialhttp://www.acc<strong>545</strong>.com/product-5-<strong>ACC</strong>-<strong>545</strong>-<strong>Week</strong>-3-<strong>Individual</strong>-<strong>Assignment</strong>-<strong>Jamona</strong>-<strong>Corp</strong>.-<strong>Scenario</strong>For more course tutorials visitwww.acc<strong>545</strong>acc<strong>545</strong>.com• Review the following information:1 On January 1, 2006, <strong>Jamona</strong> <strong>Corp</strong>. purchased 12% bonds,having a maturity value of $300,000, for $322,744.44. The bondsprovide the bondholders with a 10% yield. They are dated January1, 2006, and mature January 1, 2011, with interest receivableDecember 31 of each year. The company uses the effective-interestmethod to allocate unamortized discount or premium. The bondsare classified as available-for-sale. The fair value of the bonds atDecember 31 of each year is as follows:• 2006 – $320,500• 2007 – $309,000• 2008 – $308,000• 2009 – $310,000• 2010 – $300,000
2 The following information is available from <strong>Jamona</strong>’s inventoryrecordsCostUnitsUnitJanuary 1, 2007 (beginning inventory) 600 $ 8.00Purchases:January 5, 2007 1,200 9.00January 25, 2007 1,300 10.00February 16, 2007 80011.00March 26, 2007 60012.00A physical inventory on March 31, 2007, shows 1,600 units on hand.Select any one of the inventory methods (LIFO, FIFO, Average Cost,or others).3 On July 6, <strong>Jamona</strong> <strong>Corp</strong>. acquired the plant assets of BerryCompany, which had discontinued operations. The appraised valueof the property is:Land $ 400,000Building 1,200,000
Machinery and equipment 800,000Total $2,400,000<strong>Jamona</strong> <strong>Corp</strong>. gave 12,500 shares of its $100 par value common stockin exchange. The stock had a market value of $168 per share on thedate of the purchase of the property.<strong>Jamona</strong> <strong>Corp</strong>. expended the following amounts in cash between July 6and December 15, the date when it first occupied the building.Repairs to building $105,000Construction of bases for machinery to be installed later 135,000Driveways and parking lots 122,000Remodeling of office space in building 161,000Special assessment by city on land 18,000On December 20, the company paid cash for machinery, $260,000,subject to a 2% cash discount, and freight on machinery of $10,500.4 On January 1, 2007, <strong>Jamona</strong> <strong>Corp</strong>. signed a five-year noncancelablelease for a machine. The terms of the lease called for<strong>Jamona</strong> to make annual payments of $8,668 at the beginning ofeach year, starting January 1, 2007. The machine has an estimateduseful life of six years and a $5,000 un-guaranteed residual value.The machine reverts to the lessor at the end of the lease term.<strong>Jamona</strong> uses the straight-line method of depreciation for all of its
plant assets. <strong>Jamona</strong>’s incremental borrowing rate is 10%, and thelessor’s implicit rate is unknown.• Preparejournalentrieswithappropriatesupportingdetailed schedules for the balance sheet items: investments,inventory, fixed assets, and capital leases.• Prepare appropriate note disclosures.
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