Daniel is a new employee looking at contributing to a 401(k) offered through the company. How will his contributions affect his tax liability?

Lower federal income tax

No change to tax liability

No change to FICA tax liability

Increase tax liability

1. Please make all appropriate journal entries for the following operations related to a

manufacturing firm for the month of June.

Assume Beginning WIP for Job A & B are $300 & $500, respectively. Assume Ending WIP for Job A & B are $475 & $650, respectively.

• The company purchased $1,200 of materials (on account)
• The company used direct materials
  • Job A - $350
  • Job B - $200
• The company allocated their employee efforts towards direct labor on two jobs
  • Job A - $2,300
  • Job B – $3,100
• The company estimates a total of $240,000 in O/H over the next year. The company uses

machine hours to allocate O/H and estimates 1,600 machine hours over the next year.

• In June, the company had the following machine hours
  • Job A – 20 hours
  • Job B – 10 hours
• The company used $400 indirect materials & $2,000 indirect labor
• The company incurred $1,200 depreciation on factory equipment, $500 depreciation on

office space & $300 of factory utilities

• Be sure to record the completion of Work in Process Inventory
• Be sure to record your end of period adjustment to address under or over applied overhead

Metlock Corporation has pretax financial income (or loss) equal to taxable income (or loss) from 2009 through 2017 as follows: Income (Loss) Tax Rate 2009 $41,760 30 % 2010 57,600 30 % 2011 24,480 35 % 2012 69,120 50 % 2013 (216,000 ) 40 % 2014 129,600 40 % 2015 43,200 40 % 2016 151,200 40 % 2017 (86,400 ) 45 % Pretax financial income (loss) and taxable income (loss) were the same for all years since Metlock has been in business. Assume the carryback provision is employed for net operating losses. In recording the benefits of a loss carryforward, assume that it is more likely than not that the related benefits will be realized. What entries for income taxes should be recorded for 2013? (Credit account titles are automatically indented when 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.) Account Titles and Explanation Debit Credit (To record carryback.) (To record carryforward.) Indicate what the income tax expense portion of the income statement for 2013 should look like. Assume all income (loss) relates to continuing operations. (Enter loss using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) What entry for income taxes should be recorded in 2014? (Credit account titles are automatically indented when 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.) How should the income tax expense section of the income statement for 2014 appear? (Enter loss using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) What entry for income taxes should be recorded in 2017? (Credit account titles are automatically indented when 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.) How should the income tax expense section of the income statement for 2017 appear? (Enter loss using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

At December 31, 2018, the financial statements of Hollingsworth Industries included the following:

Additional data:
The bonds payable were issued at par in 2016. The tax rate for 2018 was 40%.

Required:
Compute basic and diluted EPS for the year ended December 31, 2018. (Enter your answers in millions (i.e., 10,000,000 should be entered as 10).)
  

Maggie bought a house which was quite a dump in 1989 for $75,000. She fixed it up with paint and wallpaper but in 1996 she did a major renovation which cost $50,000. In 1993, she bought a dump of a cottage for $35,000 because it was both on a lake and near some good cross-country ski trails. She winterized it immediately for $10,000. Over time, the dumpy cottage has become quite attractive with the addition of a new roof, siding, windows and doors all of which cost $15,000 in 1995. In addition, she is fond of landscaping and has created quite a beautiful garden. I might add that Maggie has only $40,000 in RRSPs since she prefers to sink her money into her living space.

In July 2006, Maggie lost her job and received $60,000 in severance pay. She put as much as she could into her RRSP (included in the $40,000 above) and put the rest in GICs to help finance her plan. Maggie had been taking courses for several years to become a Master Gardener.

When she lost her job, she decided to live out her dream of having a gardening business where she would design gardens for others with cottages near her and maintain them if they needed it because they mostly come to their cottages on the weekend to relax. In the winter, she will keep the lanes clear (with her snow blower) and check up on the cottages now and again. She gave her corporate clothes to her friend Kate with the proviso that she could stay with her when she comes to the City (which won’t be often because she is very fed up).

When she lost her job, she immediately started renting out the house for $1,600 a month plus utilities. She still has to pay the $2,400 a year taxes and maintenance but figures the house will be her retirement fund. When she started renting out the house, it immediately ceased to be her principal residence – her cottage is now her principal residence. In July 2006, her house was worth $300,000 and the cottage is worth $140,000.

Questions:

a.     Maggie’s house increases in value at about 3% a year from 2006 and she sells it in 2017. How much is her taxable capital gain on the house ignoring real estate commissions?

b.    Maggie’s cottage also increases 3% a year in value. If she also sells it in 2017 in order to buy a bed and breakfast, how much is her taxable capital gain?

The Fried Company has assembled the accompanying balance sheets and income statement and reconciliation of retained earnings for 2018. Fried Co. Balance Sheets as of December 31 (in millions) 2018 2017

On December 30, 2018, Fried paid $98 million in cash to acquire a new plant to expand operations. This was partly financed by an issue of long-term debt for $50 million. Some plant assets were sold for their book value of $6 million during 2018. Because net income was $9 million, the highest in the company’s history, Naftali Fried, the chief executive officer, was distressed by the company’s extremely low cash balance.

Required: a. Prepare a statement of cash flows using the direct method for reporting cash flows from operating activities. Do not forget to prepare a schedule that reconciles net income to net cash provided by operating activities. b. What is revealed by the statement of cash flows? Does it help you reduce Mr. Fried’s distress? Why? Briefly explain to Mr. Fried why cash has decreased even though net income was $9 million.

Sales-Related Transactions Using Perpetual Inventory System

The following selected transactions were completed by Green Lawn Supplies Co., which sells irrigation supplies primarily to wholesalers and occasionally to retail customers:

Required:

Journalize the entries to record the transactions of Green Lawn Supplies Co. For a compound transaction, if no entry is required, leave the entry box blank.

• Use the Internet to research the financial statements of Apple.
• Analyze the cost components of the primary manufacturing process and examine the significance of cost behavior analysis to the company.
• Evaluate the value of using cost behavior analysis to management.

Balloons By Sunset (BBS) is considering the purchase of two new hot air balloons so that it can expand its desert sunset tours. Various information about the proposed investment follows:  

Assume straight line depreciation method is used.
  

Required:
Help BBS evaluate this project by calculating each of the following:  

1. Accounting rate of return. (Round your answer to 1 decimal place.)

        

2. Payback period. (Round your answer to 2 decimal places.)

         

3. Net present value (NPV). (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor(s) from the tables provided. Do not round intermediate calculations. Negative amount should be indicated by a minus sign. Round the final answer to nearest whole dollar.)

         

4. Recalculate the NPV assuming BBS's cost of capital is 14 percent. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor(s) from the tables provided. Do not round intermediate calculations. Negative amount should be indicated by a minus sign. Round the final answer to nearest whole dollar.)

    

G Force Manufacturing Company had net income of $300,000 in 2017 when the number of units produced and sold was 6000 and data for variable and fixed costs were as follows:

Cost Schedule

Variable Costs:          Direct Material                                           $35

                                    Direct Labour                                           $30

                                Variable Manufacturing Overhead                   $15

Fixed Costs:             Manufacturing Overhead                                  $232,000

                                    Advertising                                                      33,000

                                    Administrative                                                  155,000

Required:

1. Compute the selling price per unit in 2017, using the equation method.

2. Using the sales price per unit calculated in (i), prepare a contribution margin income statement for the year ended December 31, 2017, detailing the components of total fixed costs and clearly showing contribution and net income.

3. Calculate G-Force’s break-even point in units and in dollars.

4. Calculate the margin of safety in number of units and sales dollars.

5. Using the production/sales of 6,000 units, conduct a breakdown chart for G-Force Manufacturing Company, clearly showing the break-even point and the margin of safety in units and dollars and the region representing profits and losses. (Use a scale of 2 cm to represent 1,000 units on the x-axis and 2 cm to represent $200,000 on the y-axis).

6. The president of G-Force Manufacturing is under pressure from stockholders to increase operating income by 10% in 2018. Management expects per unit data and total fixed costs to remain the same in 2018. Compute the number of units that must be sold in 2018 to reach the shareholders’ desired profit level. Is this a realistic goal?

7. Assume that G-Force Manufacturing sells the same number of units in 2018 as it did in 2017. Assuming unit variable costs and total fixed costs remain unchanged, what would the new selling price have to be in order to reach the stockholders desired profit level?

Kara Ries, Tammy Bax, and Joe Thomas invested $34,000, $50,000, and $58,000, respectively, in a partnership. During its first calendar year, the firm earned $366,300. Prepare the entry to close the firm’s Income Summary account as of its December 31 year-end and to allocate the $366,300 net income to the partners under each of the following separate assumptions:

1) The partners have no agreement on the method of sharing income and loss.

2) The partners agreed to share income and loss in the ratio of their beginning capital investments. (Do not round intermediate calculations. Round final answers to the nearest whole dollar.)

3) The partners agreed to share income and loss by providing annual salary allowances of $35,000 to Ries, $30,000 to Bax, and $42,000 to Thomas; granting 10% interest on the partners’ beginning capital investments; and sharing the remainder equally.

Lipto Biomedic has credit sales of $740,000 yearly with credit terms of net 60 days, with an average collection period of 75 days. Lipto is considering offering a 3 percent discount for payment in 10 days. They would use the cash generated from the reduced receivables to reduce their bank loans which cost 8%. Assume ALL of the customers take advantage of the 3/10 terms. Use the following table to calculate the costs and benefits for Lipto and make decision at the bottom.

B) As mentioned above, Ipto Biomedic can borrow from its bank at 8% to take a cash discount offered by one of its suppliers. The terms of cash discount are 2/155 net 90. Should the Lipto borrow the funds? Why? Why not? Show all your work...

C) Lipto Biomedic sells its product for $32 each. The carrying costs of the inventory are $1.50 per unit and its costs Lipto $30 per order in purchasing agent time. If the raw materials can only be ordered by the "gross" (1 gross = 12 dozen = 144 items) What is the economic order quantity?

On 1 September 2019, Mike Co. signed a 12% six-month note receivable in settlement of accounts receivable of €320,000. The note and interest are all due at maturity.

1. Prepare the entry on 1 September 2019 made by Mike Co. to record the receipt of this note receivable. (5 points)
2. Prepare the 31 December 2018 (fiscal year-end), adjusting entry made by Mike Co. with regard to this note receivable. (5 points)
3. Prepare the entry made by Mike Co. on 1 March 2020 (maturity date of note), to record collection of note and interest. (5 points)
4. Assume that on 1 March 2020, the maker of the note defaults and Mike Co. does not collect the note and interest. Explain what Mike Co. would do in accounting records in this situation. (5 points)

Jacksonville Financial Service Co. which specializes in appliance repair service, is owned and operated by Cindy Latty.

Unadjusted Trial Balance December 31,2010

The data related to year ended adjustments are as follows:

Required:

Prepare Balance Sheet and Income and Expenditure Statement as at 31, 2010.