Marin Inc., a registered broker, enters into a finder’s fee agreement with HOM Homes Ltd. on June 15, 2020. Marin will f...
Marin Inc., a registered broker, enters into a finder’s fee
agreement with HOM Homes Ltd. on June 15, 2020. Marin will find
leads in the form of buyers potentially interested in purchasing
HOM’s real estate holdings. Along with finding potential buyers,
Marin helps negotiate the selling price and provides advice on
contract details. If and when HOM closes a sale, Marin will be paid
within 30 days of the closing date, based on the following formula:
5% of any transaction value up to and including $1 million, plus 4%
of any transaction value greater than $1 million and less than and
including $2 million, plus 3% of any transaction value greater than
$2 million and less than and including $3 million, plus 2% of any
transaction value greater than $3 million and less than and
including $4 million, plus 1% of any transaction value in excess of
$4 million. If Marin is represented by another broker and this
information is not shared with HOM, the fee is reduced by 50%. On
September 1, 2020, HOM paid Marin $62,000 to provide some needed
cash flow for seeking out buyers. On October 15, 2020, an offer was
made and accepted for a parcel of real estate at a price of $3.55
million. The transaction closed on November 1, 2020, and Marin was
paid the finder’s fee net of $62,000 on November 30, 2020.
Determine the accounting treatment of the above events for Marin
Inc. and prepare any journal entries needed on: (Credit
account titles are automatically indented when the amount is
entered. Do not indent manually. If no entry is required, select
"No Entry" for the account titles and enter 0 for the
amounts.)
| a. | June 15, 2020 | |
| b. | September 1, 2020 | |
| c. | October 15, 2020 | |
| d. | November 1, 2020 | |
| e. | November 30, 202 |
Homework Answers
June 15, 2020 - No journal entry for entering into agreement.
On September 1, 2020 -
Bank account Debit 62000
Advance from HOM Homes Ltd. Credit 62000
On October 15, 2020 - No journal entry for offer and acceptance. Journal entry on actual transaction.
On November 1, 2020 - No journal entry in the books of Marin Inc. as the money goes to and the real estate belongs to HOM Homes Ltd.
On November 30, 2020 - Calculation of brokerage = $ 1000000 * 5% + ($ 2000000 - $ 1000000) * 4% + ($ 3000000 - $ 2000000) * 3% + ($ 3550000 - $ 3000000) * 2% = $ 131000
Journal entry:
Advance from HOM Homes Ltd. Debit 62000
Bank account Debit 69000
Brokerage account Credit 131000
Add Answer to:
Marin Inc., a registered broker, enters into a finder’s fee agreement with HOM Homes Ltd. on June 15, 2020. Marin will f...
Marin Inc., a registered broker, enters into a finder’s fee agreement with HOM Homes Ltd. on June 15, 2020. Marin will f...
Marin Inc., a registered broker, enters into a finder’s fee agreement with HOM Homes Ltd. on June 15, 2020. Marin will find leads in the form of buyers potentially interested in purchasing HOM’s real estate holdings. Along with finding potential buyers, Marin helps negotiate the selling price and provides advice on contract details. If and when HOM closes a sale, Marin will be paid within 30 days of the closing date, based on the following formula: 5% of any transaction...
Skysong Inc., a registered broker, enters into a finder’s fee agreement with HOM Homes Ltd. on...
Skysong Inc., a registered broker, enters into a finder’s fee agreement with HOM Homes Ltd. on June 15, 2020. Skysong will find leads in the form of buyers potentially interested in purchasing HOM’s real estate holdings. Along with finding potential buyers, Skysong helps negotiate the selling price and provides advice on contract details. If and when HOM closes a sale, Skysong will be paid within 30 days of the closing date, based on the following formula: 5% of any transaction...
Splish Brothers Inc., a registered broker, enters into a finder's fee agreement with HOM Homes Ltd....
Splish Brothers Inc., a registered broker, enters into a finder's fee agreement with HOM Homes Ltd. on June 15, 2020. Splish Brothers will find leads in the form of buyers potentially interested in purchasing HOM's real estate holdings. Along with finding potential buyers, Splish Brothers helps negotiate the selling price and provides advice on contract details. If and when HOM closes a sale, Splish Brothers will be paid within 30 days of the closing date, based on the following formula:...
The following information relates to the 2020 debt and equity investment transactions of Flint Ltd., a...
The following information relates to the 2020 debt and equity
investment transactions of Flint Ltd., a publicly accountable
Canadian corporation. All of the investments were acquired for
trading purposes and accounted for using the FV-NI model, with all
transaction costs being expensed. No investments were held at
December 31, 2019, and the company prepares financial statements
only annually, each December 31, following IFRS.
1.
On February 1, the company purchased Williams Corp. 12% bonds,
at par value for $460,000, plus...
In the following two independent cases, the company closes its books on December 31: 1. Marin...
In the following two independent cases, the company closes its books on December 31: 1. Marin Inc. sells $2.17 million of 8% bonds on March 1, 2020. The bonds pay interest on September 1 and March 1. The bonds’ due date is September 1, 2023. The bonds yield 10%. 2. Sweet Acacia Ltd. sells $5.30 million of 9% bonds on June 1, 2020. The bonds pay interest on December 1 and June 1. The bonds’ due date is June 1,...
Bridgeport Corporation made the following purchases of investments during 2020, the first year in which Bridgeport...
Bridgeport Corporation made the following purchases of
investments during 2020, the first year in which Bridgeport
invested in equity securities:
1.
On January 15, purchased 9,540 shares of Nirmala Corp.’s common
shares at $35.50 per share plus commission of $2,100.
2.
On April 1, purchased 5,300 shares of Oxana Corp.’s common
shares at $55 per share plus commission of $3,572.
3.
On September 10, purchased 7,420 shares of WTA Corp.’s
preferred shares at $28.40 per share plus commission of
$3,085....
The unadjusted trial balance of Kingbird, Inc., a private company following ASPE, at December 31, 2020,...
The unadjusted trial balance of Kingbird, Inc., a private company following ASPE, at December 31, 2020, is as follows: Credit Cash Debit $17,690 109,600 $3,380 61,300 Accounts receivable Allowance for doubtful accounts Inventory Prepaid insurance Bond investment at amortized cost Land 4,692 48,000 30,000 150,100 11,890 32,400 5,400 16,600 Buildings Accumulated depreciation-buildings Equipment Accumulated depreciation-equipment Goodwill Accounts payable Bonds payable (20-year, 7%) Common shares Retained earnings Sales revenue Rent revenue Rent expense Supplies expense Purchases 101,900 180,000 120,600 48,847 180,000...
The unadjusted trial balance of Kingbird, Inc., a private company following ASPE, at December 31, 2020,...
The unadjusted trial balance of Kingbird, Inc., a private company following ASPE, at December 31, 2020, is as follows: Credit Cash Debit $17,690 109,600 $3,380 61,300 Accounts receivable Allowance for doubtful accounts Inventory Prepaid insurance Bond investment at amortized cost Land 4,692 48,000 30,000 150,100 11,890 32,400 5,400 16,600 Buildings Accumulated depreciation-buildings Equipment Accumulated depreciation-equipment Goodwill Accounts payable Bonds payable (20-year, 7%) Common shares Retained earnings Sales revenue Rent revenue Rent expense Supplies expense Purchases 101,900 180,000 120,600 48,847 180,000...
Ayayai Corporation made the following purchases of investments during 2020, the first year in which Ayayai...
Ayayai Corporation made the following purchases of investments
during 2020, the first year in which Ayayai invested in equity
securities:
1.
On January 15, purchased 8,100 shares of Nirmala Corp.’s common
shares at $30.10 per share plus commission of $1,782.
2.
On April 1, purchased 4,500 shares of Oxana Corp.’s common
shares at $47 per share plus commission of $3,033.
3.
On September 10, purchased 6,300 shares of WTA Corp.’s
preferred shares at $23.90 per share plus commission of
$2,619....
The unadjusted trial balance of Skysong, Inc., a private company following ASPE, at December 31, 2020,...
The unadjusted trial balance of Skysong, Inc., a private company following ASPE, at December 31, 2020, is as follows: Debit Credit Cash $17,330 Accounts receivable 102,600 Allowance for doubtful accounts $3,430 Inventory 59,600 Prepaid insurance 4,708 Bond investment at amortized cost 56,400 Land 31,900 Buildings 151,205 Accumulated depreciation—buildings 15,934 Equipment 34,200 Accumulated depreciation—equipment 5,700 Goodwill 16,550 Accounts payable 100,900 Bonds payable (20-year, 8%) 180,000 Common shares 115,300 Retained earnings 45,329 Sales revenue 192,500 Rent revenue 11,250 Rent expense 19,800 Supplies...
Splish Brothers Inc., a registered broker, enters into a finder's fee agreement with HOM Homes Ltd. on June 15, 2020. Splish Brothers will find leads in the form of buyers potentially interested in purchasing HOM's real estate holdings. Along with finding potential buyers, Splish Brothers helps negotiate the selling price and provides advice on contract details. If and when HOM closes a sale, Splish Brothers will be paid within 30 days of the closing date, based on the following formula:...
The following information relates to the 2020 debt and equity
investment transactions of Flint Ltd., a publicly accountable
Canadian corporation. All of the investments were acquired for
trading purposes and accounted for using the FV-NI model, with all
transaction costs being expensed. No investments were held at
December 31, 2019, and the company prepares financial statements
only annually, each December 31, following IFRS.
1.
On February 1, the company purchased Williams Corp. 12% bonds,
at par value for $460,000, plus...
Bridgeport Corporation made the following purchases of
investments during 2020, the first year in which Bridgeport
invested in equity securities:
1.
On January 15, purchased 9,540 shares of Nirmala Corp.’s common
shares at $35.50 per share plus commission of $2,100.
2.
On April 1, purchased 5,300 shares of Oxana Corp.’s common
shares at $55 per share plus commission of $3,572.
3.
On September 10, purchased 7,420 shares of WTA Corp.’s
preferred shares at $28.40 per share plus commission of
$3,085....
The unadjusted trial balance of Kingbird, Inc., a private company following ASPE, at December 31, 2020, is as follows: Credit Cash Debit $17,690 109,600 $3,380 61,300 Accounts receivable Allowance for doubtful accounts Inventory Prepaid insurance Bond investment at amortized cost Land 4,692 48,000 30,000 150,100 11,890 32,400 5,400 16,600 Buildings Accumulated depreciation-buildings Equipment Accumulated depreciation-equipment Goodwill Accounts payable Bonds payable (20-year, 7%) Common shares Retained earnings Sales revenue Rent revenue Rent expense Supplies expense Purchases 101,900 180,000 120,600 48,847 180,000...
The unadjusted trial balance of Kingbird, Inc., a private company following ASPE, at December 31, 2020, is as follows: Credit Cash Debit $17,690 109,600 $3,380 61,300 Accounts receivable Allowance for doubtful accounts Inventory Prepaid insurance Bond investment at amortized cost Land 4,692 48,000 30,000 150,100 11,890 32,400 5,400 16,600 Buildings Accumulated depreciation-buildings Equipment Accumulated depreciation-equipment Goodwill Accounts payable Bonds payable (20-year, 7%) Common shares Retained earnings Sales revenue Rent revenue Rent expense Supplies expense Purchases 101,900 180,000 120,600 48,847 180,000...
Ayayai Corporation made the following purchases of investments
during 2020, the first year in which Ayayai invested in equity
securities:
1.
On January 15, purchased 8,100 shares of Nirmala Corp.’s common
shares at $30.10 per share plus commission of $1,782.
2.
On April 1, purchased 4,500 shares of Oxana Corp.’s common
shares at $47 per share plus commission of $3,033.
3.
On September 10, purchased 6,300 shares of WTA Corp.’s
preferred shares at $23.90 per share plus commission of
$2,619....
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