X Company must decide whether to continue using its current equipment or replace it with new, more efficient equipment. The following information is available for the current and new equipment:

Maintenance work will be necessary on the new equipment in Year 3, costing $2,500. The current equipment will last for six more years; the life of the new equipment is also six years. Assuming a discount rate of 4%, what is the net present value of replacing the current equipment?

On January 1, 2017, Alison, Inc., paid $70,500 for a 40 percent interest in Holister Corporation’s common stock. This investee had assets with a book value of $224,500 and liabilities of $96,500. A patent held by Holister having a $13,300 book value was actually worth $41,800. This patent had a six-year remaining life. Any further excess cost associated with this acquisition was attributed to goodwill. During 2017, Holister earned income of $51,500 and declared and paid dividends of $17,000. In 2018, it had income of $70,500 and dividends of $22,000. During 2018, the fair value of Allison’s investment in Holister had risen from $85,700 to $93,300.

a. Assuming Alison uses the equity method, what balance should appear in the Investment in Holister account as of December 31, 2018?

b. Assuming Alison uses fair-value accounting, what income from the investment in Holister should be reported for 2018

X Company currently makes a part and is considering buying it next year from a company that has offered to supply it for $16.00 per unit. This year, total costs to produce 53,000 units were:

If X Company buys the part, it can avoid $23,532 of the fixed overhead. The resources that will become idle if they choose to buy the part can be used to increase production of another product, resulting in additional total contribution margin of $60,000.

The marketing manager is uncertain what demand will be next year. What level of demand will make the company indifferent between making the part and buying it?

Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on direct labor-hours and its standard cost card per unit is as follows:

The planning budget for March was based on producing and selling 29,000 units. However, during March the company actually produced and sold 34,000 units and incurred the following costs:

1. Purchased 160,000 pounds of raw materials at a cost of $8.50 per pound. All of this material was used in production.

2. Direct laborers worked 59,000 hours at a rate of $14 per hour.

3. Total variable manufacturing overhead for the month was $564,040.

______________________________

5. If Preble had purchased 174,000 pounds of materials at $8.50 per pound and used 160,000 pounds in production, what would be the materials price variance for March? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.). Input all amounts as positive values.)

6. If Preble had purchased 174,000 pounds of materials at $8.50 per pound and used 160,000 pounds in production, what would be the materials quantity variance for March? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.). Input all amounts as positive values.)

7. What direct labor cost would be included in the company’s planning budget for March?

8. What direct labor cost would be included in the company’s flexible budget for March?

Vulcan Company’s contribution format income statement for June is as follows:

On February 1, Karin purchases real estate for $375,000. The annual property taxes of $5,040 are payable on
December 31. Realizing that she will pay the property taxes for the entire year, Karin remits $374,580 to the seller at
closing. Karin’s adjusted basis for the real estate is:

Nat is a salesman for a real estate developer. His employer permits him to purchase a lot for $75,000. The
employer’s adjusted basis for the lot is $45,000, and its normal selling price is $90,000.

What is Nat’s recognized gain and his basis for the lot?

In 2014, Harold purchased a classic car that he planned to restore for $12,000. However, Harold is too busy to work
on the car and he gives it to his daughter Julia in 2018. At this time, the fair market value of the car has declined to
$10,000. Harold paid no gift tax on the transaction. Julia completes some of the restoration herself with out-of-pocket
costs of $5,000. She later sells the car for $30,000. What is Julia’s recognized gain or loss on the sale of the car?

Kelly inherits land which had a basis to the decedent of $95,000 and a fair market value of $50,000 on August 4,
2018, the date of the decedent’s death. The executor distributes the land to Kelly on November 12, 2018, at which
time the fair market value is $49,000. The fair market value on February 4, 2019, is $45,000. In filing the estate tax
return, the executor elects the alternate valuation date. Kelly sells the land on June 10, 2019, for $48,000. What is her
recognized gain or loss?

Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on direct labor-hours and its standard cost card per unit is as follows:

The planning budget for March was based on producing and selling 29,000 units. However, during March the company actually produced and sold 34,000 units and incurred the following costs:

1. Purchased 160,000 pounds of raw materials at a cost of $8.50 per pound. All of this material was used in production.

2. Direct laborers worked 59,000 hours at a rate of $14 per hour.

3. Total variable manufacturing overhead for the month was $564,040.

_________________

9. What is the labor rate variance for March? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.). Input all amounts as positive values.)

10. What is the labor efficiency variance for March? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.). Input all amounts as positive values.)

11. What is the labor spending variance for March? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.). Input all amounts as positive values.)

12. What variable manufacturing overhead cost would be included in the company’s planning budget for March?

White Diamond Flour Company manufactures flour by a series of three processes, beginning with wheat grain being introduced in the Milling Department. From the Milling Department, the materials pass through the Sifting and Packaging departments, emerging as packaged refined flour.

The balance in the account Work in Process-Sifting Department was as follows on July 1:

The following costs were charged to Work in Process-Sifting Department during July:

During July, 16,600 units of flour were completed. Work in Process-Sifting Department on July 31 was 1,100 units, 4/5 completed.

CHART OF ACCOUNTSWhite Diamond Flour CompanyGeneral Ledger

1. Prepare a cost of production report for the Sifting Department for July. If an amount is zero, enter "0". Round your cost per unit answers to the nearest cent and final answers to the nearest dollar amount.

2. Journalize the entries for costs transferred from Milling to Sifting and the costs transferred from Sifting to Packaging. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for spaces or journal explanations. Every line on a journal page is used for debit or credit entries. Do not add explanations or skip a line between journal entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. Use the date July 31 for all journal entries.

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JOURNAL

ACCOUNTING EQUATION

3. Determine the increase or decrease in the cost per equivalent unit from June to July for direct materials and conversion costs. Round your answers to the nearest cent.

4. Discuss the uses of the cost of production report and the results of part (3).

The cost of production report may be used as the basis for allocating product costs between     and   . The report can also be used to control costs by holding each department head responsible for the units entering production and the costs incurred in the department. Any differences in unit product costs from one month to another, such as those in part (3), can be studied carefully and any significant differences investigated.

Lana purchased for $1,410 a $2,000 bond when it was issued two years ago. Lana amortized $200 of the original
issue discount and then sold the bond for $1,800. Which of the following statements is correct?

Ryan has the following capital gains and losses for 2018: $6,000 STCL, $5,000 28% gain, $2,000 25% gain, and
$6,000 0%/15%/20% gain. Which of the following is correct:

In 2018, Satesh has $5,000 short-term capital loss, $13,000 0%/15%/20% long-term capital gain, and $7,000 qualified
dividend income. Satesh is single and has other taxable income of $15,000. Which of the following statements is
correct?

Blue Company sold machinery for $45,000 on December 23, 2018. The machinery had been acquired on April 1,
2016, for $69,000 and its adjusted basis was $34,200. The § 1231 gain, § 1245 recapture gain, and § 1231 loss from
this transaction are:

Question a)

Louis is worried about how much tax he will have to pay this year and he is looking for anything that he might have missed that will decrease his Taxable Income. All of the following could decrease his Taxable Income, with the exception of:

Question b)

With respect to charitable donations claimed by an individual:

Question c)

Net capital losses may be applied against any type of income in the year of death or the immediately preceding year.

.Journal Entries for Purchases and Cash Payments: Note: One way to meet the 250-word minimum requirement for your primary post is to define the new terms that you are using. Review the preparation of journal entries in the Demonstration problem on pp. 418-421 and the demonstration video in the Unit 5 Resources explaining the preparation of journal entries for purchase transactions. Once you understand how these journal entries are prepared, please select one transaction from Problem 11-11B, on page 433 of the text, for Debbie's Doll House, and answer the questions below for that transaction. There are 12 journal entries in this problem, but each of you must select an entry that has not been completed by a classmate! If all of the journal entries have been prepared select an entry from the Chapter 10 discussion question. First come, first served! Please be sure to identify your entry by the date of the transaction and provide your response in your own words. Remember, the primary posting is a short answer essay that fully explains your responses. What happened? (Describe the transaction) Which accounts are affected by this transaction? Are they increased or decreased? What is the normal balance of each of these accounts? Which accounts are debited and by what amount? Explain how you arrived at that amount. Which accounts are credited and by what amount? Explain how you arrived at that amount.

PURCHASES AND CASH PAYMENTS TRANSACTIONS Debbie Mueller owns a small retail business called Debbie’s Doll House. The cash account has a balance of $20,000 on July 1. The following transactions occurred during July:

The following were selected from among the transactions completed during the current year by Danix Co., an appliance wholesale company:

Required:

Journalize the entries to record the transactions. Assume 360 days in a year. For a compound entry, if an amount box does not require an entry, leave it blank. Assume this is a year in which February has 28 days.

Missy, age 30, has owned her principal residence (adjusted basis of $225,000) for five years. During the first three years of ownership, she occupied it as her principal residence. During the past two years, she was in graduate school and rented the residence. After graduate school, Missy returned to the same location where she previously worked. At this point, she purchased another residence for $400,000 and listed her old residence for sale at $340,000. Due to a slow real estate market, 11 months later Missy finally receives an offer of $330,000.

1. What is Missy’s recognized gain if she immediately accepts the $330,000 offer (i.e., 11 months after the listing date)? Selling expenses are $20,000.
2. What is Missy’s recognized gain if she rejects the $330,000 offer and accepts another offer of $340,000 three months later (i.e., 14 months after the listing date)?
3. Advise Missy on which offer she should accept (assume that she is in the 24% tax bracket).

explain the answer.

Provide real-world examples of the four types of specialized investment, use any resources you can obtain

1. Site specificity

2. Physical-asset specificity

3. Dedicated assets

4. Human capital

Nell sells a passive activity with an adjusted basis of $45,000 for $105,000. Suspended losses attributable to this
property total $45,000. The total gain and the taxable gain are: