2009 ADDENDUM - Yugo (original basis was $15,000). The 48...

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ADDENDUM TO APPLE BLOSSOM COLOGNE COMPANY – 2009 A . Assume that Apple’s borrowing rate = 7%. B. Page 61 – ignore comment on Alpha Aroma . W/P D-3 : Assume inventories were properly observed per page 155. Do not prepare an analytical procedures w/p for these accounts. C. W/P E: Treat all stock investments as Available-for-sale securities. Sears Credit Corp. Bonds : Compute correct yield based upon a purchase price of $90,000 for the 8% bonds with a maturity date of July 1, 2013. D. W/P F: Effective January 1, 2004 , the company decided to the change the estimated useful life of the newly acquired property, plant and equipment as follows: Buildings 40 years Machinery and equipment 10 years Office furniture and fixtures 10 years Automotive 4 years All other 5 years The new EULs will apply to 2003 items that are capitalized by the auditors. The company purchased a Hummer H2 SUV for L. Lancaster. The invoice cost was $55,500. The dealer allowed a trade-in value of $4,000 down payment on the company’s fully depreciated 1972
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Unformatted text preview: Yugo (original basis was $15,000). The 48 month installment contract (1% APR) called for the first payment on June 2, 2003. E. W/P F-5 : 2009 Invoice.doc represents the detail of the $2,350. F. The equipment lease (page 174) is changed as follows: Payments will be made monthly starting on 5/1/2003 for 8 years. EUL = 8 years. FMV: $75,000 All % numbers = 7% G . W/P H-2: Do not accrue payroll taxes on any accrued compensation. H. W/P H-4: Include a new tax bracket: taxable income over $100,000 is subject to a rate of 39%. I. The following events were also approved by the Board of Directors as follows: July 11, 2003 meeting: Approved the issuance of a three-year note, dated 8/1/2003, in the amount of $275,000 to Count Dooku & Associates for a feasibility study involving the acquisition of Calvin Klein Fragrances. . The note carries a stated interest rate of 3%. Annual interest payments are due on the anniversary date of the note. apple\addendum...
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