The Following Transactions Occurred in Fiscal 2012

question 54

Essay

The following transactions occurred in fiscal 2012:
•Synthesize Inc. exchanged machinery with Energize Corp.
•Synthesize Inc. purchased equipment by signing a 5 year non-interest bearing note payable for $200,000. The implicit rate of interest was 5%.
•Synthesize received a government grant of $10,000 to help purchase the equipment.
Required:
a)Assuming the machinery exchange has commercial substance, prepare the required journal entries for the exchange for both Synthesize and Energize.
b)Assuming the machinery exchange does not have commercial substance, prepare the required journal entries for the exchange for both Synthesize and Energize.
c)Prepare the required journal entry to record the purchase of the equipment purchased by the non-interest bearing note.
d)Prepare the required journal entries to record the government grant using both the gross method and the net method.

Recognize the economic challenges faced by the United States in the mid to late 20th century.

Identify key figures and their roles in the political scene of the 1970s and 1980s.

Examine the impact of international events on U.S. foreign policy and domestic politics.

Evaluate the strategies used by Ronald Reagan to address economic and social issues.

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Definitions:

Direct Labor Costs

Expenses directly associated with the labor used in the production of goods or services, such as wages for workers on the assembly line.

Overapplied Overhead

Refers to a situation where the applied (or allocated) manufacturing overhead costs are greater than the actual manufacturing overhead costs incurred.

Underapplied Overhead

Underapplied overhead occurs when the allocated manufacturing overhead costs are less than the actual overhead costs incurred.

Raw Materials

Basic substances in their natural, modified, or semi-processed state, used as an input to a production process for manufacturing finished goods.