Bonita Corp. has 150,240 shares of common stock outstanding. In 2017, the company reports income from continuing operations before income tax of $1,210,400. Additional transactions not considered in the $1,210,400 are as follows.

Analyze the above information and prepare an income statement for the year 2017, starting with income from continuing operations before income tax. Compute earnings per share as it should be shown on the face of the income statement. (Assume a total effective tax rate of 38% on all items, unless otherwise indicated.) (Round earnings per share to 2 decimal places, e.g. 1.47.)

Depreciation by Three Methods; Partial Years Razar Sharp Company purchased equipment on July 1, 2014, for $70,200. The equipment was expected to have a useful life of three years, or 6,480 operating hours, and a residual value of $2,160. The equipment was used for 1,200 hours during 2014, 2,300 hours in 2015, 1,900 hours in 2016, and 1,080 hours in 2017.

Required: Determine the amount of depreciation expense for the years ended December 31, 2014, 2015, 2016, and 2017, by (a) the straight-line method, (b) units-of-output method, and (c) the double-declining-balance method.

Note: FOR DECLINING BALANCE ONLY, round the multiplier to four decimal places. Then round the answer for each year to the nearest whole dollar.

a. Straight-line method Year Amount 2014 $ 2015 $ 2016 $ 2017 $

b. Units-of-output method Year Amount 2014 $ 2015 $ 2016 $ 2017 $

c. Double-declining-balance method Year Amount 2014 $ 2015 $ 2016 $ 2017 $

Roy Reds Ltd is a Manufacturing Company.The Following Ledger account balances were extracted from the books of the company for the year ended December 31,2004

stocks as at January1,2004:

Raw materials$40000,Partly manufactured good (WIP) $50000,Finished Goods $37000

Stocks as at December 31,2004:

Raw Materials $30000,Partly Manufactured goods (WIP) $60000 Finished Goods $45000

Other balances:

Purchases of raw materials$136000,freight and carriage on raw materials $5000,production workers salary $170000,Rent and Rates$8000,Gas and Fuel $15000,office workers pay $20000,Depreciation of productive machinery and plant $10000,sales $550000

Notes:

Rent and rates,gas and fuel must be apportioned 60% to factory and 40% to office.

Required:

Prepare the Manufacturing,Trading and Profit and loss Accounts for the period ending 31December 2004(clearly indicate the following in your answer)

1 Prime Cost

2 Factory Overheads

3 Cost of Production

4 Gross Profit

5 Net Profit

Record the transactions in a journal, transfer the journal entries to T-accounts, compute closing amounts for the T-accounts, and construct a balance sheet to answer the question.

Jan 25. Borrow $52,000 from a bank
Jan 26. Purchase equipment for $48,000 in cash
Jan 27. Issue $85,000 in stock

What is the final amount in Total Assets?

Winkin, Blinkin, and Nod are equal shareholders in SleepEZ, an S corporation. In the conditions listed below, how much income should each report from SleepEZ for 2018 under both the daily allocation and the specific identification allocation method? Refer to the following table for the timing of SleepEZ’s income.

(Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.)

a. There are no sales of SleepEZ stock during the year.

b. On April 4, 2018, Blinkin sells his shares to Nod.

c. On April 4, 2018, Winkin and Nod each sell their shares to Blinkin.

The partnership of Hendrick, Mitchum, and Redding has the following account balances:

This partnership is being liquidated. Hendrick and Mitchum are each entitled to 40 percent of all profits and losses with the remaining 20 percent going to Redding.

1. What is the maximum amount that Redding might have to contribute to this partnership because of the deficit capital balance?

2. How should the $31,000 cash that is presently available in excess of liabilities be distributed?

3. If the noncash assets are sold for a total of $75,000, what is the minimum amount of cash that Hendrick could receive?

In year 0, Javens Inc. sold machinery with a fair market value of $630,000 to Chris. The machinery’s original basis was $493,920 and Javens’s accumulated depreciation on the machinery was $73,000, so its adjusted basis to Javens was $420,920. Chris paid Javens $63,000 immediately (in year 0) and provided a note to Javens indicating that Chris would pay Javens $94,500 a year for six years beginning in year 1.

1. What is the amount and character of the gain that Javens will recognize in year 0?
2. What amount and character of the gain will Javens recognize in years 1 through 6?

explain the relationship between sampling evidence, materiality and desired level? Accounting auditing.

An example is the Higher risk of material misstatement the more evidence we need The lower the materiality amount the higher the sample size

Dana intends to invest $66,000 in either a treasury bond or a corporate bond. The Treasury Bond yields 5 percent before tax and the corporate bond yields 6 percent before tax.

A) Assuming dana's federal marginal rate is 24 percent and her marginal state rate is 5 percent, which of the two options should she choose? Assume the Dana itemizes deductions

Corporate bonds

Treasury Bonds

A2) How much interest after-tax would Dana earn by investing in the corporate bond?

B) if she were to move to another state were her marginal state rate would be 10 percent, which of the two options should she choose? Assume that Dana itemizes deductions

Corporate Bonds

Treasury Bond

B2) how much interest after-tax would Dana earn by investing in the corporate bond as per requirement B)?

Alton Inc. is working at full production capacity producing 26,000 units of a unique product. Manufacturing costs per unit for the product are as follows: Direct materials $ 10 Direct labor 9 Manufacturing overhead 11 Total manufacturing cost per unit $ 30 The per-unit manufacturing overhead cost is based on a $5 variable cost per unit and $156,000 fixed costs. The nonmanufacturing costs, all variable, are $8 per unit, and the sales price is $45 per unit. Sports Headquarters Company (SHC) has asked Alton to produce 6,500 units of a modification of the new product. This modification would require the same manufacturing processes. However, because of the nature of the proposed sale, the estimated nonmanufacturing costs per unit are only $4 (not $8). Alton would sell the modified product to SHC for $35 per unit.

Required: Suppose that Alton Inc. had been working at less than full capacity to produce 21,400 units of the product when SHC made the offer. What is the minimum price per unit that Alton should accept for the modified product under these conditions?

Stuart Cameras, Inc. manufactures two models of cameras. Model ZM has a zoom lens; Model DS has a fixed lens. Stuart uses an activity-based costing system. The following are the relevant cost data for the previous month:

Stuart’s facility has the capacity to operate 3,600 machine hours per month.

   
Required

1. Compute the cost per unit for each product.

2. The current market price for products comparable to Model ZM is $121 and for DS is $89. If Stuart sold all of its products at the market prices, what was its profit or loss for the previous month?

3. A market expert believes that Stuart can sell as many cameras as it can produce by pricing Model ZM at $116 and Model DS at $40. Stuart would like to use those estimates as its target prices and have a profit margin of 30 percent of target prices. What is the target cost for each product?

E13.10 Donated Long-Lived Assets

Angel Flights provides transportation to medical facilities for special needs children. At the beginning of the year, a donor gave Angel Flights a new airport facility, with a fair value of $5 million, to house its aircraft. The donor specified that the facility must be used by Angel Flights for at least five years. The facility has a useful life of 25 years.

Required

Prepare journal entries to record the events described for the current year. If an account affects net assets, indicate which category of net assets is affected.

Troy Engines, Ltd., manufactures a variety of engines for use in heavy equipment. The company has always produced all of the necessary parts for its engines, including all of the carburetors. An outside supplier has offered to sell one type of carburetor to Troy Engines, Ltd., for a cost of $35 per unit. To evaluate this offer, Troy Engines, Ltd., has gathered the following information relating to its own cost of producing the carburetor internally: Per Unit 20,000 Units Per Year Direct materials $ 17 $ 340,000 Direct labor 11 220,000 Variable manufacturing overhead 3 60,000 Fixed manufacturing overhead, traceable 3 * 60,000 Fixed manufacturing overhead, allocated 6 120,000 Total cost $ 40 $ 800,000 *One-third supervisory salaries; two-thirds depreciation of special equipment (no resale value). Required: 1. Assuming the company has no alternative use for the facilities that are now being used to produce the carburetors, what would be the financial advantage (disadvantage) of buying 20,000 carburetors from the outside supplier? 2. Should the outside supplier’s offer be accepted? 3. Suppose that if the carburetors were purchased, Troy Engines, Ltd., could use the freed capacity to launch a new product. The segment margin of the new product would be $200,000 per year. Given this new assumption, what would be the financial advantage (disadvantage) of buying 20,000 carburetors from the outside supplier? 4. Given the new assumption in requirement 3, should the outside supplier’s offer be accepted?

1.what is the challenge in budgeting if the business is a SKI resort and cash flows vary with the season. 2. as a new owner of an existing business what resources do you have to prepare a porforma cash budget. 3.Is there any volume limit that is impractical to achieve given the current fixed capital

P4-37A Push-Down Accounting LO 4-7

On December 31, 20X6, Print Corporation and Size Company entered into a business combination in which Print acquired all of Size’s common stock for $958,000. At the date of combination, Size had common stock outstanding with a par value of $118,000, additional paid in capital of $419,000, and retained earnings of $176,000. The fair values and book values of all Size’s assets and liabilities were equal at the date of combination, except for the following:

The buildings had a remaining life of 15 years, and the equipment was expected to last another 5 years. In accounting for the business combination, Print decided to use push-down accounting on Size’s books.

During 20X7, Size earned net income of $104,000 and paid a dividend of $58,000. All of the inventory on hand at the end of 20X6 was sold during 20X7. During 20X8, Size earned net income of $106,000 and paid a dividend of $58,000.

Required:
a. Record the acquisition of Size's stock on Print's books on December 31, 20X6. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

b. Record any entries that would be made on December 31, 20X6, on Size’s books related to the business combination if push-down accounting is employed. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

c. Present all consolidating entries that would appear in the worksheet to prepare a consolidated balance sheet immediately after the combination. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

d. Present all entries that Print would record during 20X7 related to its investment in Size if Print uses the equity-method of accounting for its investment. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

e. Present all consolidating entries that would appear in the worksheet to prepare a full set of consolidated financial statements for the year 20X7. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

f. Present all consolidating entries that would appear in the worksheet to prepare a full set of consolidated financial statements for the year 20X8. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)