On January 1, 2016, Alpha Corporation had 100,000 shares of common stock outstanding. On April 15, the board declared a $0.30 per share dividend to be paid to stockholders of record on May 4. The dividend was distributed on May 15. Use this information to prepare the General Journal entries (without explanation) for April 15 & May 15. If no entry is required then write "No Entry Required."

Crane Company follows the practice of pricing its inventory at the lower-of-cost-or-market, on an individual-item basis.

From the information above, determine the amount of Crane Company inventory.

$

Whispering, Inc. had the following equity investment portfolio at January 1, 2017.

During 2017, the following transactions took place.

During 2018, the following transactions took place.

Prepare journal entries for each of the above transactions.

Prepare a partial balance sheet showing the investment-related amounts to be reported at December 31, 2017 and 2018.

Lindon Company is the exclusive distributor for an automotive product that sells for $50.00 per unit and has a CM ratio of 30%. The company’s fixed expenses are $345,000 per year. The company plans to sell 27,200 units this year. Required: 1. What are the variable expenses per unit? (Round your "per unit" answer to 2 decimal places.) 2. What is the break-even point in unit sales and in dollar sales? 3. What amount of unit sales and dollar sales is required to attain a target profit of $195,000 per year? 4. Assume that by using a more efficient shipper, the company is able to reduce its variable expenses by $5.00 per unit. What is the company’s new break-even point in unit sales and in dollar sales? What dollar sales is required to attain a target profit of $195,000?

On January 1, 2020, French Company acquired 60 percent of K-Tech Company for $313,500 when K-Tech’s book value was $413,500. The fair value of the newly comprised 40 percent noncontrolling interest was assessed at $209,000. At the acquisition date, K-Tech's trademark (20-year remaining life) was undervalued in its financial records by $80,000. Also, patented technology (10-year remaining life) was undervalued by $29,000.

In 2020, K-Tech reports $25,500 net income and declares no dividends. At the end of 2021, the two companies report the following figures (stockholders’ equity accounts have been omitted):

What is the 2021 consolidated net income before allocation to the controlling and noncontrolling interests?

In 2021, assuming K-Tech has declared no dividends, what are the noncontrolling interest’s share of the subsidiary’s income and the ending balance of the noncontrolling interest in the subsidiary?

Titans, Inc uses a periodic inventory system. One of the store's most popular products is a nerf-type basketball. The inventory quantities, purchases, and sales of this product for the most recent year are as follows:

A. What is the cost of the December 31 inventory and the cost of goods sold for the basketballs during the year under each of the following cost flow assumptions? Show your work.

1. First in, first-out

2. Last in, first-out

3. Weighted Average cost (round to the nearest dollar, except unit cost)

B. Which of the three inventory pricing methods provides the most useful balance sheet valuation of inventory considering the current replacement cost of the basketballs? Explain.

C. Which of the three inventory pricing methods provides the most useful measure of income in light of the costs incurred by Titans to replace the basketballs when they are sold? Consider which method results in a net income measure that is most predictive of future profitability. In other words, if you were thinking about buying stock in Titans, which inventory pricing measure gives you the most useful measure of its future profitability? Explain.

Income Statements under Absorption Costing and Variable Costing

Joplin Industries Inc. manufactures and sells high-quality sporting goods equipment under its highly recognizable J-Sports logo. The company began operations on May 1 and operated at 100% of capacity (41,800 units) during the first month, creating an ending inventory of 3,800 units. During June, the company produced 38,000 garments during the month but sold 41,800 units at $95 per unit. The June manufacturing costs and selling and administrative expenses were as follows:

a. Prepare an income statement according to the absorption costing concept for June.

Feedback

a. Under absorption costing, the cost of goods manufactured includes direct materials, direct labor, and factory overhead costs. Both fixed and variable factory costs are included as part of factory overhead.

Learning Objective 1.

b. Prepare an income statement according to the variable costing concept for June.

Feedback

b. Under variable costing, the cost of goods manufactured includes only variable manufacturing costs.

b. Under variable costing, the cost of goods manufactured includes only variable manufacturing costs.

Learning Objective 1.

c. What is the reason for the difference in the amount of income from operations reported in (a) and (b)?

Under the absorption costing  method, the fixed manufacturing cost included in the cost of goods sold is matched with the revenues. Under variable costing , all of the fixed manufacturing cost is deducted in the period in which it is incurred, regardless of the amount of inventory change. Thus, when inventory decreases, the absorption costing  income statement will have a lower income from operations.

The following information relates to the debt securities investments of Kingbird Company.

(a) Prepare any journal entries you consider necessary, including year-end entries (December 31), assuming these are available-for-sale securities

29) The IRS has issued a summons for the tax file held by CPA Ann Whitman for her clients, the Harberts. The file consists of paper and electronic spreadsheets in which Whitman detailed some tax computations using assumptions that the IRS would find to be “too aggressive.” In addition, the file includes notes from meetings with the Harberts, income and balance sheet data as to their personal assets, and other technical correspondence, including email messages. In a memo to the tax research file, summarize the current status of the law as to whether the privilege of confidentiality protects these documents from the government.

Pirate Company purchased 60 percent ownership of Ship Corporation on January 1, 20X1, for $82,800. On that date, the noncontrolling interest had a fair value of $55,200 and Ship reported common stock outstanding of $100,000 and retained earnings of $20,000. The full amount of the differential is assigned to land to be used as a future building site. Pirate uses the fully adjusted equity method in accounting for its ownership of Ship. On December 31, 20X2, the trial balances of the two companies are as follows: Pirate Company Ship Corporation Item Debit Credit Debit Credit Cash and Accounts Receivable $ 69,400 $ 51,200 Inventory 60,000 55,000 Land 40,000 30,000 Buildings & Equipment 520,000 350,000 Investment in Ship Corporation 103,780 Cost of Goods Sold 99,800 61,000 Depreciation Expense 25,000 15,000 Interest Expense 6,000 14,000 Dividends Declared 40,000 10,000 Accumulated Depreciation $175,000 $ 75,000 Accounts Payable 68,800 41,200 Bonds Payable 80,000 200,000 Bond Premium 1,200 Common Stock 200,000 100,000 Retained Earnings 227,960 50,000 Sales 200,000 120,000 Income from Ship Corporation 11,020 $963,980 $963,980 $586,200 $586,200 Page 289Ship sold inventory costing $25,500 to Pirate for $42,500 in 20X1. Pirate resold 80 percent of the purchase in 20X1 and the remainder in 20X2. Ship sold inventory costing $21,000 to Pirate in 20X2 for $35,000, and Pirate resold 70 percent of it prior to December 31, 20X2. In addition, Pirate sold inventory costing $14,000 to Ship for $28,000 in 20X2, and Ship resold all but $13,000 of its purchase prior to December 31, 20X2. Assume both companies use straight-line depreciation and that no property, plant, and equipment has been purchased since the acquisition. Required Record the journal entry or entries for 20X2 on Pirate’s books related to its investment in Ship Corporation, using the equity method. Prepare the consolidation entries needed to complete a consolidated worksheet for 20X2. Prepare a three-part consolidation worksheet for 20X2.

1) At the beginning of the current year, Omar Company declared a 1 for 5 reverse stock split, when the market value per share was $10. Prior to the split, Omar had 100,000 shares issued and outstanding. After the split, what is the market value of the shares? Select one:

a. 10

b. 20

c. 50

d. 2

2) How would retained earnings be affected by the declaration of cash dividends – common and stock dividends? Select one:

a. Component of shareholders’ equity as part of total shareholders’ equity

b. Component of total liabilities as current liability

c. Component of total liabilities as noncurrent liability

d. Component of equity as part of share premium

3) What information is typically included in the shareholders’ equity of a public corporation’s balance sheet?

i - Number of shares authorized ii - Number of shares issued iii - Number of shares outstanding iv – Number of shares held by each shareholder Select one:

a. all of i, ii, iii, and iv

b. i and ii only

c. i and iv only

d. i, ii, and iii only

4) A liquidating dividend: Select one:

a. Forces to corporation to downsize its operations

b. Uses paid-in capital to pay dividends

c. Forces shareholders to sell their shares for cash

d. Forces the issuer to repurchase shares for cash Forces to corporation to downsize its operations

5) How would retained earnings be affected by the declaration of cash dividends – common and stock dividends? Select one:

a. Decrease and Decrease

b. No effect and No effect

c. Decrease and No effect

d. No effect and Decrease

Using the scenario provided, your textbook, and at least one outside source discuss whether you agree with the intern’s decision to use an absorption format for her segmented income statement and her decision to allocate the common fixed expenses to the Commercial and Residential segments? Why or why not? Write in complete sentences and included proper APA citations for each of your sources used in your post.

Toxaway Company is a merchandiser that segments its business into two divisions—Commercial and Residential. The company’s accounting intern was asked to prepare segmented income statements that the company’s divisional managers could use to calculate their break-even points and make decisions. She took the prior month’s companywide income statement and prepared the absorption format segmented income statement shown below:

In preparing these statements, the intern determined that Toxaway’s only variable selling and administrative expense is a 10% sales commission on all sales. The company’s total fixed expenses include $72,000 of common fixed expenses that would continue to be incurred even if the Commercial or Residential segments are discontinued, $55,000 of fixed expenses that would be avoided if the Commercial segment is dropped, and $38,000 of fixed expenses that would be avoided if the Residential segment is dropped.

Inventory by Three Methods; Cost of Goods Sold

The units of an item available for sale during the year were as follows:

There are 19 units of the item in the physical inventory at December 31.

Determine the cost of ending inventory and the cost of goods sold by three methods, presenting your answers in the following form:

Round your final answers to the nearest dollar.

10. The controller of Sonoma Housewares Inc. instructs you to prepare a monthly cash budget for the next three months. You are presented with the following budget information:

    	May		June		July
    Sales	$86,000		$90,000		$95,000
    Manufacturing costs	34,000		39,000		44,000
    Selling and administrative expenses	15,000		16,000		22,000
    Capital expenditures	_		_		80,000

    The company expects to sell about 10% of its merchandise for cash. Of sales on account, 70% are expected to be collected in the month following the sale and the remainder the following month (second month following sale). Depreciation, insurance, and property tax expense represent $3,500 of the estimated monthly manufacturing costs. The annual insurance premium is paid in September, and the annual property taxes are paid in November. Of the remainder of the manufacturing costs, 80% are expected to be paid in the month in which they are incurred and the balance in the following month.

    Current assets as of May 1 include cash of $33,000, marketable securities of $40,000, and accounts receivable of $90,000 ($72,000 from April sales and $18,000 from March sales). Sales on account for March and April were $60,000 and $72,000, respectively. Current liabilities as of May 1 include $6,000 of accounts payable incurred in April for manufacturing costs. All selling and administrative expenses are paid in cash in the period they are incurred. An estimated income tax payment of $14,000 will be made in June. Sonoma’s regular quarterly dividend of $5,000 is expected to be declared in June and paid in July. Management wants to maintain a minimum cash balance of $30,000.

    Required:

    1. Prepare a monthly cash budget and supporting schedules for May, June, and July 2016. Input all amounts as positive values except overall cash decrease and deficiency which should be indicated with a minus sign.

    Sonoma Housewares Inc.
    Cash Budget
    For the Three Months Ending July 31
    	May	June	July
    Estimated cash receipts from:
    Cash sales	$	$	$
    Collection of accounts receivable
    Total cash receipts	$	$	$
    Estimated cash payments for:
    Manufacturing costs	$	$	$
    Selling and administrative expenses
    Capital expenditures
    Other purposes:
    Income tax
    Dividends
    Total cash payments	$	$	$
    Cash increase or (decrease)	$	$	$
    Cash balance at beginning of month
    Cash balance at end of month	$	$	$
    Minimum cash balance
    Excess or (deficiency)	$	$	$

    2. The budget indicates that the minimum cash balance be maintained in July. This situation can be corrected by and/or by the of the marketable securities, if they are held for such purposes. At the end of May and June, the cash balance will the minimum desired balance.

On the basis of the following data, determine the value of the inventory at the lower of cost or market. Assemble the data in the form illustrated in Exhibit 10.

a. Determine the value of the inventory at the lower of cost or market applied to each item in the inventory.

b. Determine the value of the inventory at the lower of cost or market applied to each class of inventory.

c. Determine the value of the inventory at the lower of cost or market applied to total inventory.