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Complete the requirements of Problem 7-6 using the business activities listed below Part I a An annual installment of $100000 due on long-term debt is paid on its due date Equipment originally

Complete the requirements of Problem 7-6 using the business activities listed below: Part I a. An annual installment of $100,000 due on long-term debt is paid on its due date. b. Equipment originally costing $12,000 with $7,000 of accumulated depreciation is sold for $4,000 cash. c. Obsolete inventory costing $75,000 is written down to zero. d. Treasury stock costing $30,000 is sold for $28,000 cash. e. A plant is acquired by issuing a $300,000 mortgage payable due in equal installments over six years. f. The company s 30%-owned unconsolidated subsidiary earns $100,000 and pays dividends of $20,000. The company recorded its 30% share of these items using the equity method. g. A product is sold for $40,000, to be paid with $10,000 down plus $10,000 each year for three years. Interest at 10% of the outstanding balance is due. Consider only the effect at the time of sale (the company s operating cycle is less than one year). h. The company uses a periodic inventory method. Certain inventory is mistakenly valued at $1,000-it should have been valued at $10,000. Show the effect of correcting the error. i. Cash of $400,000 is used to acquire 100% of ZXY Manufacturing Company. At date of acquisition, ZXY has current assets of $300,000 (including $40,000 in cash); plant and equipment of $670,000; current liabilities of $160,000; and long-term debt of $410,000. j. A provision for bad debt expense of $60,000 is made (calculated as a percentage of sales for the period).

May 14 2020 View more View Less

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