Prepare all the necessary journal entries for the transactions listed above for Parker Corporation.

5. On December 1, 2018, Folks Wagon Company adopted a stock-option plan that granted options

to key executives to purchase 50,000 shares of the company’s $10 par value common stock. The

options were granted on January 1, 2019, and were exercisable 3 years after the date of grant if the

grantee was still an employee of the company. The options expired 5 years from the date of grant.

The option price was set at $35, and the fair value option-pricing model determines the total

compensation expense to be $450,000.

All of the options were exercised during the year 2022: 20,000 on February 23 when the market

price was $46, and 30,000 on August 8 when the market price was $85 a share.

a. Prepare the journal entries relating to the stock option plan for the years 2019, 2020, and 2021.

Assume that the employee performs services equally in 2019, 2020, and 2021.

b. Prepare the journal entries that record the two events of exercising the options in 2022

Consider the case of Mike. He is just about to turn 62 years of age and he has come to you to

help him determine if/when he can retire. Mike has provided you with the following

information:

His current earnings are $100,000 annually

He used a “Top Down” retirement assessment and determined that his retirement cash needs

would be equal to his annual earnings less his FICA tax, his mortgage of $1320/month, and

$5,000 per year of business/work related expense.

He does estimate that each year he waits to retire, his cash flow needs will increase by 2%.

Once he is retired, he should experience stable cash flows.

He currently has $425,000 in his retirement account.

He believes he should be able to earn a 6% rate of return on his retirement account.

His Social Security statement indicates he should receive a payment of $2,685 per month at his

full retirement age (FRA) of 67. He is aware that his social security payments are reduced if he

starts taking payments early, and they will increase if he defers taking social security payments

after age 67.

Mike expects to live until age 95.

He is interested in using an annuity method of capital needs analysis.

Considering this fact pattern, Mike wants to know the following:

1.

Can he afford to retire now, at age 62, based on his current retirement account value,

reduced social security and cash flow needs?

2.

Can he afford to retire at his FRA of 67? If he is short of capital, how much would he

have to save each year to meet his goal?

3.

Can he afford to retire if he waits until age 70? If so, how much cash flow could he have

if he used a Capital Preservation strategy and assumed his 6% rate of return is

sustainable

14. Emily, who lives in Indiana, volunteered to travel to Louisiana in March to work on a home-building project for
Habitat for Humanity (a qualified charitable organization). She was in Louisiana for three weeks. She normally
makes $500 per week as a carpenter’s assistant and plans to deduct $1,500 as a charitable contribution. In addition,
she incurred the following costs in connection with the trip: $600 for transportation, $1,200 for lodging, and $400 for
meals. What is Emily’s deduction associated with this charitable activity?

In 2018, Joanne invested $90,000 for a 20% interest in a limited liability company (LLC) in which she is a material
participant. The LLC reported losses of $340,000 in 2018 and $180,000 in 2019. Joanne’s share of the LLC’s losses
was $68,000 in 2018 and $36,000 in 2019. How much of these losses can Joanne deduct?

Rex and Dena are married and have two children, Michelle (age 7) and Nancy (age 5). During 2018, Rex earned a
salary of $24,500, received interest income of $300, and filed a joint income tax return with Dena. Dena had $0 gross
income. Their earned income credit for the year is:

Backus, Inc., makes and sells many consumer products. The firm’s average contribution margin ratio is 25%. Management is considering adding a new product that will require an additional $11,000 per month of fixed expenses and will have variable expenses of $5.5 per unit.

Required:

a. Calculate the selling price that will be required for the new product if it is to have a contribution margin ratio equal to 25%. (Round your answer to 2 decimal places.)

b. Calculate the number of units of the new product that would have to be sold if the new product is to increase the firm's monthly operating income by $10,000. (Do not round intermediate calculations.)

Andretti Company has a single product called a Dak. The company normally produces and sells 86,000 Daks each year at a selling price of $46 per unit. The company’s unit costs at this level of activity are given below:

A number of questions relating to the production and sale of Daks follow. Each question is independent.

Required:

1-a. Assume that Andretti Company has sufficient capacity to produce 116,100 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its sales by 35% above the present 86,000 units each year if it were willing to increase the fixed selling expenses by $150,000. Calculate the incremental net operating income. (Round your answers to the nearest whole number.)

1-b. Would the increased fixed selling expenses be justified?

2. Assume again that Andretti Company has sufficient capacity to produce 116,100 Daks each year. A customer in a foreign market wants to purchase 30,100 Daks. Import duties on the Daks would be $2.70 per unit, and costs for permits and licenses would be $21,070. The only selling costs that would be associated with the order would be $1.50 per unit shipping cost. Compute the per unit break-even price on this order. (Round your answers to 2 decimal places.)

3. The company has 500 Daks on hand that have some irregularities and are therefore considered to be "seconds." Due to the irregularities, it will be impossible to sell these units at the normal price through regular distribution channels. What unit cost figure is relevant for setting a minimum selling price? (Round your answer to 2 decimal places.)

4. Due to a strike in its supplier’s plant, Andretti Company is unable to purchase more material for the production of Daks. The strike is expected to last for two months. Andretti Company has enough material on hand to operate at 25% of normal levels for the two-month period. As an alternative, Andretti could close its plant down entirely for the two months. If the plant were closed, fixed manufacturing overhead costs would continue at 40% of their normal level during the two-month period and the fixed selling expenses would be reduced by 20%. What would be the impact on profits of closing the plant for the two-month period? (Any losses should be indicated by a minus sign. Round all calculations (intermediate and final) to whole numbers. Round unit calculations to whole numbers.)

5. An outside manufacturer has offered to produce Daks and ship them directly to Andretti’s customers. If Andretti Company accepts this offer, the facilities that it uses to produce Daks would be idle; however, fixed manufacturing overhead costs would be reduced by 30%. Because the outside manufacturer would pay for all shipping costs, the variable selling expenses would be only two-thirds of their present amount. Compute the unit cost that can be avoided if purchased from the outside manufacturer. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

We have learned about Standard costs and associated variances in this chapter. Can a favorable variance be a bad thing? Describe a realistic scenario where a favorable variance could be detrimental(have unwanted consequences elsewhere in the business).

Forte Inc. produces and sells theater set designs and costumes. The company began operations on January 1, Year 1. The following transactions relate to securities acquired by Forte Inc., which has a fiscal year ending on December 31:

Record these transactions on page 11:

n January 1, 2020, Crane Corp., which uses IFRS, signs a 10-year, non-cancellable lease agreement to lease a specialty lathe from Liu Inc. The following information concerns the lease agreement.

Click here to view the factor table PRESENT VALUE OF 1.
Click here to view the factor table PRESENT VALUE OF AN ANNUITY OF 1.

Assume that Crane’s fiscal year end is May 31. Prepare the journal entries on Crane Corp.’s books to reflect the signing of the lease agreement and to record payments and expenses related to this lease for the calendar years 2020 and 2021. Crane does not prepare reversing entries. (Credit account titles are automatically indented when the 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. Round answers to 2 decimal places, e.g. 52.75.)

Budgeting Cash Flow
The following various elements relate to Whitfield, Inc.’s cash budget for April of the current year. For each item, determine the amount of cash that Whitfield should receive or pay in April.

a. At $28 each, unit sales are 5,000 and 6,000 for March and April, respectively. Total sales are typically 40% for cash and 60% on credit; 30% of credit sales are collected in the month of sale, with the balance collected in the following month. Uncollectible accounts are negligible.

March sales= Answer

April cash sales= Answer

April credit sales= Answer

Cash collected in April =Answer

b. Merchandise purchases were $45,000 and $78,000 for March and April, respectively. Typically, 20% of total purchases are paid for in the month of purchase with a 5% cash discount. The balance of purchases is paid for (without discount) in the following month.

c. Fixed administrative expenses, which total $11,000 per month, are paid in the month incurred. Variable administrative expenses amount to 20% of total monthly sales revenue, one-half of which is paid in the month incurred, with the balance paid in the following month.

d. A store asset originally costing $8,000, on which $6,000 depreciation has been taken, is sold for cash at a loss of $400.

$Answer

Budget Performance Report

Genie in a Bottle Company (GBC) manufactures plastic two-liter bottles for the beverage industry. The cost standards per 100 two-liter bottles are as follows:

At the beginning of July, GBC management planned to produce 580,000 bottles. The actual number of bottles produced for July was 626,400 bottles. The actual costs for July of the current year were as follows:

Enter all amounts as positive numbers.

a. Prepare the July manufacturing standard cost budget (direct labor, direct materials, and factory overhead) for WBC, assuming planned production.

Feedback

Compare the actual costs with the standard cost at actual volume for direct labor, direct materials, and overhead. Identify the cost variance as favorable (actual less than standard) or unfavorable (actual greater than standard).

Review the concepts of favorable and unfavorable variances.

Learning Objective 2.

b. Prepare a budget performance report for manufacturing costs, showing the total cost variances for direct materials, direct labor, and factory overhead for July. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. If required, round your answers to nearest cent.

Answer theses question fully and in detail. These questions are related to ASX Corporate Governance Council requirement for all listed companies to have a majority of "independent" board members.

1. What new agency conflicts would be created if director’s independence was compromise in regards to holding significant shareholdings in the company?

2. Statistic for Australian company's failure due to directors independecy comprosmised?

Problem 6-15B Retail inventory method LO6
CHECK FIGURE: 2. Loss at cost = $2,040.27
The records of The Wilke Co. provided the following information for the year ended December 31, 2020:

At Cost At Retail
January 1 beginning inventory ......................... $ 40,835 $ 57,305
Purchases ............................................................... 251,945 383,530
Purchase returns .................................................. 5,370 7,665
Sales ........................................................................ 393,060
Sales returns ......................................................... 2,240

Required
1. Prepare an estimate of the company’s year-end inventory by the retail method. Round all calculations to
two decimal places.
2. Under the assumption the company took a year-end physical inventory at marked selling prices that totalled
$39,275, prepare a schedule showing the store’s loss from theft or other causes at cost and at retail.

Wesley Power Tools manufactures a wide variety of tools and accessories. One of its more popular items is a cordless power handisaw. Each handisaw sells for $40. Wesley expects the following unit sales:

Wesley’s ending finished goods inventory policy is 25 percent of the next month’s sales.

Suppose each handisaw takes approximately 0.65 hours to manufacture, and Wesley pays an average labor wage of $13.50 per hour.

Each handisaw requires a plastic housing that Wesley purchases from a supplier at a cost of $5.00 each. The company has an ending direct materials inventory policy of 10 percent of the following month’s production requirements. Materials other than the housing unit total $3.50 per handisaw.

Manufacturing overhead for this product includes $63,000 annual fixed overhead (based on production of 24,000 units) and $0.80 per unit variable manufacturing overhead. Wesley’s selling expenses are 5 percent of sales dollars, and administrative expenses are fixed at $16,000 per month.

Required:
1. Compute the budgeted cost of goods sold for the first quarter.
2. Compute the budgeted selling and administrative expenses for the first quarter.
3. Complete the budgeted income statement for the handisaw product for the first quarter.

Reba Dixon is a fifth grade school teacher who earned a salary of 38,000 in 2018. She is 45 years old and has been divorced for four years. She receives 1,200 of alimony payments each month from her former husband. Reba also rent out a small apartment building. This year Reba receive 50,000 of rental payments from tenant and she incurred 19,500 of expenses associated with the rental.
        Reba and her daughter Heather (20 years old at the end of the year) moved to Georgia in January of this year. Reba provides more than one half of Heather support. They had been living in Colorado for the past 15 years, but ever since her divorced, Reba has been wanting to go back to Georgia to be closer to her family. Luckily last December, a teaching position opened up and Reba and Heather decided to make a move. Reba paid a moving company 2,010 to move their personal belongings, and she and Heather spent two days driving the 1,426 miles to Georgia.
          Reba rented a home in Georgia. Heather decided to continue living at home with her mom, but she started attending school full time in January at near by university. She was awarded a & 3000 partial tuition scholarship this year and Reba help out by paying the remaining 500 tuition cost. If possible, Reba thought it would be best to claim the education credit for these expenses.
           Reba wasn't sure if she would have enough items to help her benefit from itemizing on her tax return, however she kept track of several expenses this year that she thought might qualify if she was able to itemized. Reba paid 5800 in state income taxes and 12500 in charitable contribution during the year. She also paid the following medical related expenses for herself and Heather :
Insurance premiums.     5,795
Medical care expenses   1,100
Prescription medicine         350
Nonprescription medicine. 100
New contact lenses for Heather. 200

   Shortly after the move, Reba got distracted while driving and she ran into a street sign. The accident caused 900 in damage to the car and gave her whiplash. Because the repair was less than her insurance deductible, she paid the entire cost of the repair. Reba wasn't able to work for two months after the accident. Fortunately, she receives 2000 from her disability insurance. Her employer, the central Georgia school district, paid 60%of premium on the policy as a non-taxable fringe benefits and Reba paid the remaining 40% portion.
      A few years ago, Reba acquired several investments with her portion of the divorce settlement. This year she reported the following income from her investments : 2200 of interest income from corporate bonds and 1500 interest income from city of Denver municipal bonds. Overall, Reba stock portfolio appreciated by 12000 but she did not sell any of her stock.
      Heather reported 6200 of interest income from corporate bonds she received as a gift from her father over the last several years. This was Heather only sources of income for the year. Reba had 10,000 of federal income taxes withheld by employer. Heather made 1000 estimates tax payments during the year. Reba did not make any estimate payments. Reba had qualifying insurance for purposes of the affordable care Act (ACA).

Required :

(A) Determine Reba federal income taxes due or taxes payable for current year, complete pages 1 and 2 of forms 1040 for Reba.

(b) is Reba allowed to file as a head of household or single?

(c) Determine the amount of FICA taxes Reba was required to pay on her salary.

(d) Determine Heather federal income taxes due or payable

Hana Coffee Company roasts and packs coffee beans. The process begins by placing coffee beans into the Roasting Department. From the Roasting Department, coffee beans are then transferred to the Packing Department. The following is a partial work in process account of the Roasting Department at July 31:

Required:

1. Prepare a cost of production report, and identify the missing amounts for Work in Process—Roasting Department. If an amount is zero, enter "0". When computing cost per equivalent units, round to two decimal places.

2. Assuming that the July 1 work in process inventory includes $24,000 of direct materials, determine the increase or decrease in the cost per equivalent unit for direct materials and conversion between February and July. If required, round your answers to the nearest cent.