Financial accounting Master - Research Paper Example

Also, assume that the only thing that the Dow Jones sold was one piece of printing equipment for $190,000 in cash. a) How much did the Dow Jones originally pay for the piece of equipment that was sold COMPUTATION:Balance (at start) = 1,181,171Add: Purchase during the year = 155,000Less: Balance (at end) = (1,177,300) Cost of Equipment = 158,871JOURNAL ENTRIESDebit CreditCash 190,000Allowance for depreciation 122,000 Equipment 158,871Gain on Sale 153,129So the payment is made $ 190,000.

b At the time of sale, what was the accumulated depreciation on the piece of equipment that was sold COMPUTATION:Cost of Equipment = 158,871Less: Depreciation = (122,000)Book Value = 36,871Less: Sale proceeds = (190,000)Gain on Sale = 153,129Therefore, the depreciation on the sale of equipment amounted $122,000.c Did Dow Jones record a gain or a loss on the sale of the printing equipment As per calculation in the part (b) it is clear fact that Dow Jones recorded a gain of $153,129 on the sale of equipment.

PART III: Trump Hotels and Casino Resorts Inc. - Bonds1. Were the "Trump AC Funding 11% First Mortgage notes, due 2006" issued at par, at a premium or at a discount Justify your answer. After reviewing the long term debt section, according to my assessment "Trump AC Funding 11% First Mortgage notes, due 2006" it was clearly indicated that the management of the company funds the mortgage at par and the management of the company issues mortgage notes at par on the secondary market. 2. Record the entry made at the original.

Although, their is no clear indication about the face value but I assume that the face value of the mortgage is $100.And the "Trump AC Funding II 11 % First Mortgage notes" bonds are issued on discount. Bond prices are fluctuated when the company opt the aggressive or conservative accounting policies. The adaptation of those accounting practices enforces management to issue the bond at discount or at face value. Macro factors like fiscal policy, interest rate fluctuations, recession in the economy and difference of timing in the issuance of bond makes a significant impression on the overall valuation of the company. 5. Record the entry that was made for the "Trump AC Funding II 11 % First Mortgage notes" when these notes were issued on January 1, 1997 (Hint: These notes were issued at 95.

70% of their face value). 8 Assume that on December 31st, 2001, Trump re-purchased all of the outstanding Castle PIK Notes for $119,500,000. What would the gain or loss be on the repurchase of bonds (net of tax rate of 40%) 10 Assume that on January 1st, 2001, the market rate of interest was 12% on bonds of similar risk to these Castle PIK Notes.