The AC Partnership has two partners - Amanda and Cheryl. Each partner has a 50% interest in the partnership. Amanda also owns 80% (80 shares) of the ZZZ Corporation. The other 20% of ZZZ are owned by Wendy who is not related to Amanda or Cheryl. Based on these facts, the AC partnership will be deemed to own ______ shares of ZZZ and Cheryl will be deemed to own _____ shares of ZZZ.

b. 20 shares, 20 shares.

c. 80 shares, 20 shares.

d. 80 shares, zero shares.

e. none of the above.

The following condensed income statements of the Jackson Holding Company are presented for the two years ended December 31, 2018 and 2017:

On October 15, 2018, Jackson entered into a tentative agreement to sell the assets of one of its divisions. The division qualifies as a component of an entity as defined by GAAP. The division was sold on December 31, 2018, for $5,600,000. Book value of the division’s assets was $4,800,000. The division’s contribution to Jackson’s operating income before-tax for each year was as follows:

Assume an income tax rate of 30%.

Required: (In each case, net any gain or loss on sale of division with annual income or loss from the division and show the tax effect on a separate line)
1. Prepare revised income statements according to generally accepted accounting principles, beginning with income from continuing operations before income taxes. Ignore EPS disclosures.
2. Assume that by December 31, 2018, the division had not yet been sold but was considered held for sale. The fair value of the division’s assets on December 31 was $5,600,000. Prepare revised income statements according to generally accepted accounting principles, beginning with income from continuing operations before income taxes. Ignore EPS disclosures.
3. Assume that by December 31, 2018, the division had not yet been sold but was considered held for sale. The fair value of the division’s assets on December 31 was $4,100,000. Prepare revised income statements according to generally accepted accounting principles, beginning with income from continuing operations before income taxes. Ignore EPS disclosures.

explain the tax implications related to multijurisdictional operations of a business, including interstate and international considerations.

February 8    As provided for in the constitution, the ordinary shares on which the call was unpaid were forfeited. The constitution in relation to this class of shares further provided for any surplus on resale, after satisfaction of unpaid calls and associated costs, to be returned to the former shareholders.

$0.80 on application

$0.50 on allotment

$0.50 on 1st call

$0.20 on future calls

“B” ordinary shares - payable as follows:

$0.50 on application

$0.50 on allotment

$0.50 on future calls

February 20 The forfeited shares were re-issued to Melbourne Investments Ltd, as paid to $1.80 per share for $1.40 cash per share. Share issue cost amounted to $800.

February 21 The balance from forfeiture was returned to the former shareholders.

Required: Prepare general journal entries with working out and narrations

Sweets R Us Pty Ltd. is a large confectionary company that manufactures a range of standard sweet products and some specialty products for the Australian market. Most of the company’s production is in standard chocolate goods and they offer personalised packaging for promotional or fundraising purposes. They also provide uniquely moulded and decorated chocolate items for special events such as grand finals. You have been allocated the role of assessing the controls in the Purchases, Accounts Payable and Payments system, and have obtained the following details:

Raw material ordering process

1. To maintain and control product quality a limited number of trusted suppliers are used.
2. The production manager oversees raw material inventory. Orders are placed based on current production orders and quantities of raw material currently on hand with next day delivery where possible.
3. No formal purchase order system is used.

Raw material warehousing procedures

1. The warehouse personnel are trusted, long-term employees.
2. One of the warehousing staff ensures that all goods received, primarily raw materials, are in good order and signs the couriers’ delivery dockets in acknowledgment of materials received.
3. Movement of in and out of the warehouse is not recorded, but the production manager monitors stock levels and movements daily.

Note: Finished goods are warehoused in a separate secured area that only the production manager and his assistant have access to.

1. Identifies and explains t (5) control weaknesses associated with the purchases and accounts payable outlined above.
2. Identifies and explains the account balance assertions for raw material inventory and accounts payable that are most impacted by control weaknesses.
3. Recommends and justifies a control improvement for each of the weaknesses identified in requirement one.

What action should be taken if an amount is found on a credit card statement that has no supporting documentation in the reconciliation file? Discuss in 80–100 words.

Rembrandt Paint Company had the following income statement items for the year ended December 31, 2018 ($ in 000s):

In addition, during the year the company completed the disposal of its plastics business and incurred a loss from operations of $2.8 million and a gain on disposal of the component’s assets of $4.4 million. 600,000 shares of common stock were outstanding throughout 2018. Income tax expense has not yet been recorded. The income tax rate is 40% on all items of income (loss).

Required:
Prepare a multiple-step income statement for 2018, including EPS disclosures. (Any amounts to be deducted, including expenses, should be indicated with a minus sign. Enter your answers in thousands except earnings per share. Round EPS answers to 2 decimal places.)

Assume cash transaction in year X1 unless otherwise noted.

1/1       An Investor acquired 100% of Crazy’s stock with an investment of $800,000 cash. Par value of stock was 20.00/share and a thousand shares were sold

1/1       Crazy borrowed $250,000 cash by issuing a 3-year note with a stated interest rate of 8% per year. To be compounded annually. The interest will be paid on January 1 of each year (starting next year); and the principal will be paid on maturity

1/1       Prepaid three years of rent for $48,000 (cash).

1/15     Purchased office equipment for $50,000 and supplies for $31,000

2/7       Received $180,000 cash for consulting, services to be performed in the future for client “X”

3/1       Started up a second line of consulting services. Sold and received $300,000 in total for the year in consulting services and paid related misc. expenses of $350,000. This summarizes all revenues and expense of business #2. All in cash.   Purchased a machine for business 2 for $40,000 cash.

7/1       Prepaid $48,000 cash for a 12-month insurance policy (starting on 7/1)

8/1       Borrowed a $300,000 in cash from bank. Stated rate of interest is 6%. Principal and interest due July, 31, year 2 ( or we can say next year)

9/12     Purchased $15,000 more of supplies on credit

9/16     Provided consulting services of $60,000 on credit to client “Y” from the main (first line) consulting service division.

10/1     Purchased $18,000 (with cash) of an investment in another company’s (Pear Inc.) stock. Purchased $25,000 in bonds of Pear (not considered trading)

10/20   Collected $5,000 from client “Y”.  

10/21   Delivered $150,000 for services delivered to Client “ZA” on account.

10/31   80% of the services for client X are performed.   

12/1     Decided to sell second line of consulting business. Found a buyer for second line of consulting services. Sold the business in exchange for $20,000 cash, the business and the machine (3/1) was sold. This resulted in a loss of $20,000.    

12/15 Paid down the payable (supplies) with a $5,000 cash payment. We received $100,000 cash from Client “ZA”.

12/31   Counted supplies and determined that $6,000 of supplies were still on hand

12/31   Total salaries paid in year equaled $45,000. Remaining salaries are to be paid on January 1, second year. The total amount of current year expense is $65,000.

12/31   Determined appropriate total depreciation is $10,000

12/31   Determined that the stock purchased on 10/1 was now worth $16,000. However, the stock was not sold. Determined the bonds were worth 12,000.

12/31   We declared and paid a dividend of $15,000 to our investor

12/31   We received cash of $3,000 in dividends from Pear Inc. We received $1,000 in interest from bonds.

Tax Rate is 21% (none of the tax is paid, but it is accrued as a liability)

1. ). Prepare Income Statement (including OCI). Prepare closing entrie

I have a prepared income statement but it doesn't let me post here, I know I made a mistake and I'm trying to find out what it is

The Sendai Co., Ltd., of Japan has budgeted costs in its various departments as follows for the coming year:

The company allocates service department costs to other departments in the order listed below.

Machining and Assembly are operating departments; the other departments are service departments. Factory Administration is allocated based on labor-hours; Custodial Services based on square feet occupied; Personnel based on number of employees; and Maintenance based on machine-hours.

Required:

1. Allocate service department costs to consuming departments by the step-down method. Then compute predetermined overhead rates in the operating departments using machine-hours as the allocation base in Machining and direct labor-hours as the allocation base in Assembly.

2. Repeat (1) above, this time using the direct method. Again compute predetermined overhead rates in Machining and Assembly.

3. Assume that the company doesn’t bother with allocating service department costs but simply computes a single plantwide overhead rate that divides the total overhead costs (both service department and operating department costs) by the total direct labor-hours. Compute the plantwide overhead rate.

4. Suppose a job requires machine and labor time as follows:

Using the overhead rates computed in (1), (2), and (3) above, compute the amount of overhead cost that would be assigned to the job if the overhead rates were developed using the step-down method, the direct method, and the plantwide method.

Springer Anderson Gymnastics prepared its annual financial statements dated December 31. The company reported its inventory using the LIFO inventory costing method but did not compare the cost of its ending inventory to its market value (replacement cost). The preliminary income statement follows:

Assume that you have been asked to restate the financial statements to incorporate the LCM/NRV rule. You have developed the following data relating to the ending inventory:

Restate the income statement to reflect LCM/NRV valuation of the ending inventory. Apply LCM/NRV on an item-by-item basis.

Compare the LCM/NRV effect on each amount that was changed in the preliminary income statement in requirement 1. (Decreases should be indicated by a minus sign.)

Evaluate the Enron Fraud and assess the impact of subsequent changes to corporate governance, accounting and regulations on financial reporting standards

Regression Analysis Using Excel (Appendix). Walleye Company produces fishing reels. Management wants to estimate the cost of production equipment used to produce the reels. The company reported the following monthly cost data related to production equipment:

Required:

1. Use Excel to perform regression analysis. Provide a printout of the results.
2. Use the regression output to develop the cost equation Y = f + vX by filling in the dollar amounts for f and v.
3. What would Walleye Company’s estimated costs be if it used 90,000 machine hours this month?

Sales, Production, Direct Materials Purchases, and Direct Labor Cost Budgets

The budget director of Gourmet Grill Company requests estimates of sales, production, and other operating data from the various administrative units every month. Selected information concerning sales and production for July is summarized as follows:

a. Estimated sales for July by sales territory:

b. Estimated inventories at July 1:

c. Desired inventories at July 31:

d. Direct materials used in production:

e. Anticipated purchase price for direct materials:

f. Direct labor requirements:

Required:

1. Prepare a sales budget for July.

2. Prepare a production budget for July. For those boxes in which you must enter subtracted or negative numbers use a minus sign.

3. Prepare a direct materials purchases budget for July. For those boxes in which you must enter subtracted or negative numbers use a minus sign.

4. Prepare a direct labor cost budget for July.

Stuart Publications established the following standard price and costs for a hardcover picture book that the company produces.

Stuart planned to make and sell 33,000 copies of the book.

Required:

a. - d. Prepare the pro forma income statement that would appear in the master budget and also flexible budget income statements, assuming production volumes of 32,000 and 34,000 units. Determine the sales and variable cost volume variances, assuming volume is actually 34,000 units. Indicate whether the variances are favorable (F) or unfavorable (U). (Select "None" if there is no effect (i.e., zero variance).)