Grading ACCT 6011 Assignment #1 Answer Template

Part A: Movie Points

a. Record the year-end journal entry to recognize the loyalty program under both the revenue and the expense ap

Description Debit Credit

Expenses Approach
Premium Expense $ 51,480
Estimated Liability for Premiums $ 51,480

Revenue Approach
Dr Revenue $ 171,600
Cr Unearned Revenue $ 171,600

Show work here:

Total Issued MP $ 345,548
Redeemed MP (25152x7) $ 176,064

Outstanding MP $ 169,484
MP which are not redeemed (345548/7) $ 49,364

MP to be
Movies toredeemed
be awarded (Mp to be $ 120,120
redeemed/7) $ 17,160
Cost (17,160 @ $3) $ 51,480.00

b. Place only one "X" in each row in the table below in assessing whether the revenue or expense approach will ha
the metric identified for 2020.

Metric Revenue Approach Expense Approach

Earnings Per Share X
Warranty Expense
Revenue X
Debt to Equity Ratio X
Return on Assets X

Part B: Bond Derecognition

a. Complete the amortization table below up to Dec. 31, 2020.

Date Beginning Value Payment

December 31, 2018 $ 957,876 $ 50,000
December 31, 2019 $ 965,349 $ 50,000
 December 31, 2020 $ 973,269 $ 50,000

b. Record the journal entry to record the derecognition of the bond.

Description Debit Credit

Bonds payable $ 981,666
Cash $ 950,000
Gain from Extinguishment $ 31,666
(Record Bond Derecognition)

c. Place only one "X" in each row below indicating the impact of the bond reacquisition journal entry on the follow

Positive Negative
Earnings Per Share X
Revenue
Debt to Equity Ratio X
Return on Assets X

Part C: Share Reacquisition

a. Record the journal entry to record the reacquisition of the common shares.

Description Debit Credit

Common Shares $ 5,040,000
Contributed Surplus $ 545,000
Retained Earnings $ 7,015,000
Cash $ 12,600,000

b. Place only one "X" in each row below indicating the impact of the share reacquisition journal entry on the follow

Positive Negative
Earnings Per Share X
Revenue
Debt to Equity Ratio X
Return on Assets X

Part D:

Calculate the dividend per share for the common shareholders.

 Total Dividend 714,500

Less: Prefered Dividend 250,000

Commom Dividend 464,500

=Share Issued - Treasury Shares

Outstanding Shares
9,290,000

Common dividend
Dividend Per Share for Shareholders Shares Outstanding

The company pays $0.05 per share

-
revenue and the expense approach.

or expense approach will have the most negative impact on

Both Have the Not

Same Impact Determinable

Interest Expense Amortization Ending value

$ 57,473 $ 7,473 $ 965,349
$ 57,921 $ 7,921 $ 973,269
 $ 58,396 $ 8,396 $ 981,666

n journal entry on the following financial statement metrics.

Not
No Impact Determinable

on journal entry on the following financial statement metrics.

Not
No Impact Determinable

X
= 0.05