From the perspective of a bureaucrat, which government accounting method (Cash Basis, Modified Accrual or Full Accrual) is more feasible for each revenue source? Explain your response.

1. State Income Taxes   D. Motor Fuel Taxes          G. Gaming Fees (casinos)
2. Public Utility Fees    E. Licenses and Fees          H. Block Grants
3. Donations                 F. Sales Taxes                     I. Property Taxes

Part Five

APPLY THE CONCEPTS: Net present value and Present value index

Calculate the net present value and the present value index for each project using the present value tables provided below.

Present Value of $1 (a single sum) at Compound Interest.

Present Value of an Annuity of $1 at Compound Interest.

Based upon net present value, which project has the more favorable profit prospects?   Project A

• Both are favorable
• Project A
• Project B
• Can't determine

Based upon the present value index, which project is ranked higher?   Project A

• Both are favorable
• Project A
• Project B
• Can't determine

On June 8, Steering Ltd was incorporated and issued 56,000 common shares for $280,000. On August 19, an additional 14,000 shares were issued for $84,000. On November 2, the company paid $29,760 to reacquire 6,200 common shares and on December 7 it paid $51,350 to reacquire 7,900 common shares.

Calculate the average cost of the common shares on June 8, August 19, November 2, and December 7.

A city council has estimated that it has a surplus of $100 Million (M). The council is exploring the following three projects, each of which costs $100 M. a. A bridge which takes five years to build, then yields $50M benefit per year for the next 10 years. The benefits are received at the end of each year. Assume that the costs are spread out evenly over the five years (i.e. year 1 to year 5) and are paid at the end of each year. b. Temporary classrooms for schools yielding $50M benefit per year for five years. The benefits are received at the end of each year. Assume that all costs are paid at the end of year 1. c. Tax breaks per year to a foreign auto manufacturer for a new auto plant yielding $20M benefit per year from the third year for next 5 years. The benefits are received at the end of each year. Assume that all costs (i.e. tax breaks) are paid equally at the end of year 1 and year 2. Assuming the discount rate of 5 percent, calculate the following for each of the projects: Discounted Benefits, Discounted Costs, Net Present Value (NPV) and Benefit Cost Ratio (BCR). Which one of the above projects would you suggest that the City Council can undertake based on the BCR? Explain your answer. You should be able to use Excel for this exercise.

Please post excel screenshot as well as how to calculate each cell.

Beck Inc. uses a periodic inventory system. At the end of the annual accounting period, December 31 of the current year, the accounting records provided the following information for product 2:

1. Prepare a separate income statement through pretax income that details cost of goods sold for (a) Case A: FIFO and (b) Case B: LIFO. (Loss amounts should be indicated with a minus sign.)

2. Compute the difference between the pretax income and the ending inventory amounts for the two cases.

_{Preparing the [I] consolidation entries for sale of depreciable assets—Equity method}

_{Assume that on January 1, 2016, a parent sells to its wholly owned subsidiary, for a sale price of $162,000, equipment that originally cost $184,000. The parent originally purchased the equipment on January 1, 2012, and depreciated the equipment assuming a 10-year useful life (straight-line with no salvage value). The subsidiary has adopted the parent’s depreciation policy and depreciates the equipment over the remaining useful life of 6 years. The parent uses the equity method to account for its Equity Investment.}

_{a. Compute the annual pre-consolidation depreciation expense for the subsidiary (post-intercompany sale) and the parent (pre-intercompany sale).
b. Compute the pre-consolidation Gain on Sale recognized by the parent during 2016.}

_{c. Prepare the required [I] consolidation entry in 2016 (assume a full year of depreciation).}

_{d. Prepare the required [l] consolidation entry in 2019 (assuming the subsidiary is still holding the equipment).}

_{e. How long must we continue to make [I] consolidated entries?}

Shadee Corp. expects to sell 510 sun visors in May and 430 in June. Each visor sells for $17. Shadee’s beginning and ending finished goods inventories for May are 80 and 40 units, respectively. Ending finished goods inventory for June will be 70 units.

Each visor requires a total of $4.50 in direct materials that includes an adjustable closure that the company purchases from a supplier at a cost of $2.00 each. Shadee wants to have 27 closures on hand on May 1, 21 closures on May 31, and 21 closures on June 30. Additionally, Shadee’s fixed manufacturing overhead is $800 per month, and variable manufacturing overhead is $2.25 per unit produced.

Required:

1. Determine Shadee's budgeted cost of closures purchased for May and June.

2. Determine Shadee's budget manufacturing overhead for May and June.

Concord, Inc. began work on a $6,466,000 contract in 2017 to construct an office building. During 2017, Concord, Inc. incurred costs of $1,547,340, billed its customers for $1,085,000, and collected $1,013,000. At December 31, 2017, the estimated additional costs to complete the project total $3,003,660. Prepare Concord’s 2017 journal entries using the percentage-of-completion method.

We Be Warehouse Fitness Equipment incurred $80,000 of common fixed costs and $120,000 of common variable costs. Data are provided below for the capacity allowed and the capacity used.

For both departments, common fixed costs are to be allocated on the basis of capacity provided and common variable costs are to be allocated on the basis of capacity used.

The fixed and variable costs allocated to the Sauna Department are:

Jacob Weaver is a contractor operating as a sole proprietorship (EIN 12-3456789).

2018 Gross income: $243,322.25.

Business expenses: Fuel for equipment $64,080.00

                                 Repairs and maintenance $17,342.00

                                 Lubricants for Equipment $9,670.00

                                 Insurance $6,500.00

                                 Wages $6,300.00

                                 Vehicles $1,768.00

                                 Legal and Professional Expenses $1,750.00

                                 Taxes and Licenses $1,412.00

                                  Advertising $300.00

Clients owe him a total of $53,000, for work completed in 2018.

2018 estimated tax payments were $25,000.

He is using a bedroom in his house as a home office. (Square footage of home 5,600 Office 240 sq. ft.)

He has one half-time employee, Martin, who had been unemployed since returning

from Afghanistan, and is disabled.

Martin worked for Jacob for 20 hours a week, for 41 weeks of 2018.

He earned $10,500.

Jacob had to spend $7,350 for disabled access equipment for Martin.

--------------------------------

Scenario

Jacob and Taylor Weaver, ages 45 and 42 respectively, are married and are filing jointly in
2018.

They have three children, Ashley, age 9; Patrick, age 6; and John, age 18.

Social Security numbers are: Jacob, 222-33-4444; Taylor, 555-66-7777; Ashley, 888-99-1234; Patrick, 789-56-4321; John, 123-45-6789.

Taylor works part-time as a paralegal.

She earned $26,000 in 2018.

Taxes withheld: $4,200 withheld.

Estimated tax payments: $25,000.

$350 paid with their 2017 state tax return.

Jacob and Taylor bought their first house in 2018.

Home mortgage interest: $7,246.

Property tax: $2,230.

Federal income withholding: $2,350.

Charities: $4,500.

$435 to rent a moving truck.

$8,000 to put new siding on the house.

$11,600 for child care expenses ($5,800 for each child).

It was paid to Lil Tigers Daycare, 1115 S. Garrison St., Muncie, IN 47305 (EIN 98-7654321).

Taylor is a part-time student at Ball State University in Muncie.

She received a 1098-T indicating tuition and fees for 2018 in the amount of $6,011.

Health insurance for the family, through Taylor's job, cost $6000 for all 12 months of 2018.

They paid deductibles and co-payments of $550.

QUESTIONS

Please can you show all the exclusions to Taxable income and AGI only on a Form 1040 using above information. I have already completed the other parts of the form, I can do the rest additions and subtractions. Thank you

Consider and discuss the interactions between rising or falling costs, the quantity and profitability of products in a business environment. How does variable cost changes affect the contribution margin and profit as opposed to the changes in fixed costs? Provide life examples of how you see these costs in your personal life or business.

Last year, a sailboard company produced two types of boards: a regular board for multi-purpose sailing; and, a special trick board used by experts for competitions. The regular board sells for $750 and the competition board sells for $1,350. The variable production costs are $250 and $400 respectively, and the company has $400,000 in fixed costs overall. Marketing staff have determined that the company should specialize in the competition boards only, and sell the regular boards, if at all, under a different brand name. Last year the company made a profit, selling twice as many regular boards as competition boards, resulting in a fixed cost allocation of $5.00 per board. It takes 6 hours of direct labour to make a regular board and 12 hours to make a competition board. The company worked at full capacity of 19,500 direct labour hours last year.

Based on the above information only, which product or mix of products, should the company choose? Assume that any and all production can be sold.

1/Lake Power Sports sells jet skis and other powered recreational equipment. Customers pay one-third of the sales price of a jet ski when they initially purchase the ski, and then pay another one-third each year for the next two years. Because Lake has little information about the ability to collect these receivables, it uses the cost recovery method to recognize revenue on these installment sales. In 2017, Lake began operations and sold jet skis with a total price of $780,000 that cost Lake $390,000. Lake collected $260,000 in 2017, $260,000 in 2018, and $260,000 in 2019 associated with those sales. In 2018, Lake sold jet skis with a total price of $1,380,000 that cost Lake $828,000. Lake collected $460,000 in 2018, $368,000 in 2019, and $368,000 in 2020 associated with those sales. In 2020, Lake also repossessed $184,000 of jet skis that were sold in 2018. Those jet skis had a fair value of $69,000 at the time they were repossessed.

In 2019, Lake would recognize realized gross profit of:

Multiple Choice

• $260,000.

• $0.

• $420,000.

• $628,000.

2/ Johnson sells $112,000 of product to Robbins, and also purchases $12,400 of advertising services from Robbins. The advertising services have a fair value of $9,200. Johnson should record revenue on its sale of product to Robbins of:

Multiple Choice

• $99,600

• $102,800

• $108,800

• $112,000

3/ Video Planet (“VP”) sells a big screen TV package consisting of a 60-inch plasma TV, a universal remote, and on-site installation by VP staff. The installation includes programming the remote to have the TV interface with other parts of the customer’s home entertainment system. VP concludes that the TV, remote, and installation service are separate performance obligations. VP sells the 60-inch TV separately for $1,280, sells the remote separately for $80, and offers the installation service separately for $240. The entire package sells for $1,500.

Required:
How much revenue would be allocated to the TV, the remote, and the installation service?

4/ Present and future value tables of $1 at 9% are presented below.

   
Ajax Company purchased a one-year certificate of deposit for its building fund in the amount of $190,000. How much should the certificate of deposit be worth at the end of one years if interest is compounded at an annual rate of 9%?

Multiple Choice

• $205,841.

• $173,053.

• $207,100.

• $174,312.