Note: This problem is for the 2018 tax year.

Ryan Ross (111-11-1112), Oscar Omega (222-22-2222), Clark Carey (333-33-3333), and Kim Kardigan (444-44-4444) are equal active members in ROCK the Ages LLC. ROCK serves as agent and manager for prominent musicians in the Los Angeles area. The LLC's Federal ID number is 55-5555555. It uses the cash basis and the calendar year and began operations on January 1, 2005. Its current address is 6102 Wilshire Boulevard, Suite 2100, Los Angeles, CA 90036. ROCK was the force behind such music icons as Rhiannon, Burgundy Six, Elena Gomez, Tyler Quick, Queen Bey, and Bruno Mercury and has had a very profitable year. The following information was taken from the LLC's income statement for the current year.

During the past couple of years, ROCK has taken advantage of bonus depreciation and § 179 deductions and fully remodeled the premises and upgraded its leasehold improvements. This year, ROCK wrapped up its remodel with the purchase of $20,000 of office furniture for which it will claim a § 179 deduction. (For simplicity, assume that ROCK uses the same cost recovery methods for both tax and financial purposes.) There is no depreciation adjustment for alternative minimum tax purposes. While the property is fully depreciated, it is not beyond the end of its depreciable life for purposes of the qualified business income deduction.

ROCK invests much of its excess cash in non-dividend-paying growth stocks and tax-exempt securities. During the year, the LLC sold two securities. On June 15, ROCK purchased 1,000 shares of Tech, Inc. stock for $100,000; it sold those shares on December 15, for $80,000. On March 15 of last year, ROCK purchased 2,000 shares of BioLabs, Inc. stock for $136,000; it sold those shares for $160,000 on December 15 of the current year. These transactions were reported to the IRS on Forms 1099–B; ROCK’s basis in these shares wasreported.

Net income per books is $840,000. On January 1, the members’ capital accounts equaled $200,000 each. No additional capital contributions were made this year. In addition to their guaranteed payments, each member withdrew $250,000 cash during the year. The LLC’s balance sheet as of December 31 of this year is as follows.

All debt is shared equally by the members. Each member has personally guaranteed the debt of the LLC. All members are active in LLC operations. the business code for the entity is 711410.

Required:

Provide the requested information that would be reported on the 2018 Form 1065 and supporting schedules for ROCK the Ages LLC, as well as the Schedule K–1 for Ryan Ross.

• If an answer is zero, enter "0".
• Enter all amounts as positive numbers.
• If required, round amounts to the nearest dollar.
• Make realistic assumptions about any missing data.

Allied Merchandisers was organized on May 1. Macy Co. is a major customer (buyer) of Allied (seller) products. May 3 Allied made its first and only purchase of inventory for the period on May 3 for 2,000 units at a price of $11 cash per unit (for a total cost of $22,000). 5 Allied sold 1,000 of the units in inventory for $15 per unit (invoice total: $15,000) to Macy Co. under credit terms 2/10, n/60. The goods cost Allied $11,000. 7 Macy returns 100 units because they did not fit the customer’s needs (invoice amount: $1,500). Allied restores the units, which cost $1,100, to its inventory. 8 Macy discovers that 100 units are scuffed but are still of use and, therefore, keeps the units. Allied sends Macy a credit memorandum for $700 toward the original invoice amount to compensate for the damage. 15 Allied receives payment from Macy for the amount owed on the May 5 purchase; payment is net of returns, allowances, and any cash discount. Prepare journal entries to record the following transactions for Allied assuming it uses a perpetual inventory system and the gross method.

(Allied estimates returns using an adjusting entry at each year-end.)

Prepare the appropriate journal entries for Macy Co. to record each of the May transactions. Macy is a retailer that uses the gross method and a perpetual inventory system, and purchases these units for resale. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

1. Record the accounts balances from the year-end financial statements:

Can somebody show me how to figure out the ratios for company 1

2. Compute ratios. Round numbers to one decimal place.

You are considering investing in Annie’s Eatery. You have been able to locate the following information on the firm: Total assets are $40 million, accounts receivable are $6.0 million, ACP is 30 days, net income is $4.75 million, debt-to-equity is 1.5 times, and dividend payout ratio is 45 percent. All sales are on credit. Annie’s is considering loosening its credit policy such that ACP will increase to 35 days. The change is expected to increase credit sales by 5 percent. Any change in accounts receivable will be offset with a change in debt. No other balance sheet changes are expected. Annie’s profit margin and dividend payout ratio will remain unchanged. Use the DuPont equation to determine how this change in accounts receivable policy will affect Annie’s sustainable growth rate.

Discuss the S&P 500 Index including what is it composed of, what uses can it have, and how might you use it to evaluate stocks in a portfolio.

Serial Problem Business Solutions LO P1, P2, P3, P4, P5

After the success of the company’s first two months, Santana Rey continues to operate Business Solutions. The November 30, 2017, unadjusted trial balance of Business Solutions (reflecting its transactions for October and November of 2017) follows.

Business Solutions had the following transactions and events in December 2017.   

The following additional facts are collected for use in making adjusting entries prior to preparing financial statements for the company’s first three months:

1. The December 31 inventory count of computer supplies shows $650 still available.
2. Three months have expired since the 12-month insurance premium was paid in advance.
3. As of December 31, Lyn Addie has not been paid for four days of work at $120 per day.
4. The computer system, acquired on October 1, is expected to have a four-year life with no salvage value.
5. The office equipment, acquired on October 1, is expected to have a five-year life with no salvage value.
6. Three of the four months' prepaid rent has expired.

Required:
5. Prepare a statement of retained earnings for the three months ended December 31, 2017.
6. Prepare a balance sheet as of December 31, 2017.
7. Record and post the necessary closing entries as of December 31, 2017.
8. Prepare a post-closing trial balance as of December 31, 2017.

The following is information for Flounder Corp. for the year ended December 31, 2020: Sales revenue $1,480,000 Loss on inventory due to decline in net realizable value $74,000 Unrealized gain on FV-OCI equity investments 44,000 Loss on disposal of equipment 35,000 Interest income 7,000 Depreciation expense related to buildings omitted by mistake in 2019 53,000 Cost of goods sold 888,000 Retained earnings at December 31, 2019 990,000 Selling expenses 74,000 Loss from expropriation of land 60,000 Administrative expenses 50,000 Dividends declared 43,000 Dividend revenue 18,000 The effective tax rate is 30% on all items. Flounder prepares financial statements in accordance with IFRS. The FV-OCI equity investments trade on the stock exchange. Gains/losses on FV-OCI investments are not recycled through net income.

a) Prepare a multiple-step statement of financial performance for 2020, showing expenses by function. Ignore calculation of EPS.

b) Prepare the retained earnings section of the statement of changes in equity for 2020. (List items that increase retained earnings first following the adjustment of prior years.)

c) Prepare the journal entry to record the depreciation expense omitted by mistake in 2019. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Required information

Problem 19-1A Variable costing income statement and conversion to absorption costing income (two consecutive years) LO P2, P3

[The following information applies to the questions displayed below.]

Dowell Company produces a single product. Its income statements under absorption costing for its first two years of operation follow.

Additional Information

1. Sales and production data for these first two years follow.

2. Variable cost per unit and total fixed costs are unchanged during 2016 and 2017. The company's $31 per unit product cost consists of the following.

3. Selling and administrative expenses consist of the following.

Problem 19-1A Part 1

1. Complete income statements for the company for each of its first two years under variable costing. (Loss amounts should be entered with a minus sign.)

Problem 19-1A Part 2

2. What are the differences between the absorption costing income and the variable costing income for these two years? (Loss amounts should be entered with a minus sign.)

The income statement, balance sheets, and additional information for Great Adventures, Inc., are provided below.

Additional Information for 2020:

1. Borrowed $510,000 in January 2020. Made 12 monthly payments during the year, reducing the balance of the loan by $37,656.

2. Issued common stock for $1,200,000.

3. Purchased 10,000 shares of treasury stock for $16 per share.

4. Reissued 5,000 shares of treasury stock at $17 per share.

5. Declared and paid a cash dividend of $120,000.

Prepare the statement of cash flows for the year ended December 31, 2020, using the indirect method.

Imperial Jewelers is considering a special order for 19 handcrafted gold bracelets to be given as gifts to members of a wedding party. The normal selling price of a gold bracelet is $407.00 and its unit product cost is $269.00 as shown below:

Most of the manufacturing overhead is fixed and unaffected by variations in how much jewelry is produced in any given period. However, $8 of the overhead is variable with respect to the number of bracelets produced. The customer who is interested in the special bracelet order would like special filigree applied to the bracelets. This filigree would require additional materials costing $7 per bracelet and would also require acquisition of a special tool costing $453 that would have no other use once the special order is completed. This order would have no effect on the company’s regular sales and the order could be fulfilled using the company’s existing capacity without affecting any other order.

Required:

What effect would accepting this order have on the company’s net operating income if a special price of $362.00 per bracelet is offered for this order? (Enter all amounts as positive values.)

Per Unit Total 19 Bracelets

Incremental revenue

Incremental costs:

Variable costs:

Direct materials

Direct labor

Variable manufacturing overhead

Special filigree

Total variable cost

Fixed costs:

Purchase of special tool

Total incremental cost

Incremental net operating income (loss)

Note: Per Unit and Total 24 Bracelets

define with details the income statement and the balance sheet, highlighting the purpose, benefits, and differences between the two.

Shelly's Boutiques and Crafts had revenue of $5,700,000 this year on sales of 575,000 units. Variable costs were 35% and fixed costs totaled $3,150,000. Although the first five years were relatively profitable, increases in competition have led to a negative trend in profitability that has led them to the point where they have to make some changes to stay afloat. The company is evaluating two options to stay afloat.

Option 1:Purchase machinery to automate their operations. This machinery costs $625,000, but will decrease variable costs by 9%.

Option 2:Outsource the production of one of their main components that requires a substantial amount of machinery and skilled labor. This will reduce fixed costs by $425,000, but increases variable costs from their current 35% of sales to 40% of sales.

d.) Calculate the break even point in units after applying Option 1: What is the new fixed cost in total? What is the new contribution margin per unit? What is the new break even point in units?

Hillyard Company, an office supplies specialty store, prepares its master budget on a quarterly basis. The following data have been assembled to assist in preparing the master budget for the first quarter:

1. As of December 31 (the end of the prior quarter), the company’s general ledger showed the following account balances:

2. Actual sales for December and budgeted sales for the next four months are as follows:

3. Sales are 20% for cash and 80% on credit. All payments on credit sales are collected in the month following sale. The accounts receivable at December 31 are a result of December credit sales.

4. The company’s gross margin is 40% of sales. (In other words, cost of goods sold is 60% of sales.)

5. Monthly expenses are budgeted as follows: salaries and wages, $18,000 per month: advertising, $58,000 per month; shipping, 5% of sales; other expenses, 3% of sales. Depreciation, including depreciation on new assets acquired during the quarter, will be $42,580 for the quarter.

6. Each month’s ending inventory should equal 25% of the following month’s cost of goods sold.

7. One-half of a month’s inventory purchases is paid for in the month of purchase; the other half is paid in the following month.

8. During February, the company will purchase a new copy machine for $1,300 cash. During March, other equipment will be purchased for cash at a cost of $71,500.

9. During January, the company will declare and pay $45,000 in cash dividends.

10. Management wants to maintain a minimum cash balance of $30,000. The company has an agreement with a local bank that allows the company to borrow in increments of $1,000 at the beginning of each month. The interest rate on these loans is 1% per month and for simplicity we will assume that interest is not compounded. The company would, as far as it is able, repay the loan plus accumulated interest at the end of the quarter.

Required:

Using the data above, complete the following statements and schedules for the first quarter:

1. Schedule of expected cash collections:

2-a. Merchandise purchases budget:

2-b. Schedule of expected cash disbursements for merchandise purchases:

3. Cash budget:

4. Prepare an absorption costing income statement for the quarter ending March 31.

5. Prepare a balance sheet as of March 31.

Dorchester Company, on March 1, 2019 has a beginning Work in Process inventory of zero. All materials are added into production at the beginning of its production. There is only one production WIP inventory. On March 1, Dorchester started into production 14,500 units. At the end of the month there were 10,000 units completed and transferred into the Finished Goods Inventory. The ending WIP was 50% complete with respect to conversion. For the month of March the following costs were incurred and recorded in the WIP:

            Direct Material                      $11,000

            Direct Labor 22,000

            Factory Overhead 25,000

Dorchester uses the weighted-average process costing method. Use this information to determine the cost per equivalent unit of conversion for the month of March: (Round & enter final answers to the nearest cent.)