At the beginning of Year 2, Oak Consulting had the following normal balances in its accounts:

The following events apply to Oak Consulting for Year 2:

1. Provided $68,100 of services on account.
2. Incurred $3,300 of operating expenses on account.
3. Collected $45,800 of accounts receivable.
4. Paid $36,100 cash for salaries expense.
5. Paid $13,140 cash as a partial payment on accounts payable.
6. Paid a $8,700 cash dividend to the stockholders.

Required
a. Record these events in a general journal. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

b & d. Post the beginning balances and the transactions from Parts a&d to the appropriate accounts.

d-1. Record the closing entries in the general journal. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

e. What is the amount of change in retained earnings for the year?

f. Prepare a post-closing trial balance.

Raymond opened the Muscles Fitness Gym in August. The Following transactions occurred during the first month of the business: a) Raymond invested P100,000 in cash and 30,000 in gym equipment in the business. b) Paid P10,000 for the first month’s rent. c) Purchased supplies costing P4,000 on credit. d) Purchased exercise equipment costing P25,000 for 15,000 cash and the rest on account. e) Recorded income for the first half of the month of P6,500 in cash and P3,500 on account. f) Paid P2,750 to a creditor on account. g) Received payment from a customer on account for P1600. h) Raymond withdrew P500 for a graduation gift. i) Paid aerobics instructor her salary, P3,000. j) Paid miscellaneous expense P1,500 k) Recorded income for the second half of the month of P5,600 in cash. Prepare a new accounting equation every time a transaction occurs.

Year 2017

George Clausen (age 48) is employed by Kline Company and is paid a salary of $42,536. He has just decided to join the company's Simple Retirement Account (IRA form) and has a few questions. Answer the following for Clausen:

http://www.opers.ok.gov/Websites/opers/images/pdfs/2017-Fed-Tax-Tables.pdf

a. What is the maximum that he can contribute into this retirement fund? $______________

b. What would be the company's contribution? $ ____________

c. What would be his weekly take-home pay if he contributes the maximum allowed retirement contribution (married, 2 allowances, wage-bracket method, and a 2.3% state income tax on total wages)? $ ___________________

d. What would be his weekly take-home pay without the retirement contribution deduction? $______________

Seemore Lens Company (SLC) sells contact lenses FOB destination. For the year ended December 31, the company reported Inventory of $71,000 and Cost of Goods Sold of $422,000. a.Included in Inventory (and Accounts Payable) are $10,200 of lenses SLC is holding on consignment. b.Included in SLC’s Inventory balance are $5,100 of office supplies held in SLC’s warehouse. c.Excluded from SLC’s Inventory balance are $8,100 of lenses in the warehouse, ready to send to customers on January 2. SLC reported these lenses as sold on December 31, at a price of $15,200. d.Included in SLC’s Inventory balance are $3,050 of lenses that were damaged in December and will be scrapped in January, with zero realizable value. Required: For each item, (a)-(d), prepare the journal entry to correct the balances presently reported

Before this class, what had you used Excel for? Do you know how to do something now that could have improved your previous creations?

Grayson is in the 24 percent tax rate bracket and has sold the following stocks in 2018: (Loss amounts should be indicated by a minus sign.) Description Date Purchased Basis Date Sold Amount Realized Stock A 1/23/1994 $ 7,650 7/22/2018 $ 4,820 Stock B 4/10/2018 14,800 9/13/2018 18,490 Stock C 8/23/2016 11,750 10/12/2018 16,660 Stock D 5/19/2008 5,550 10/12/2018 13,000 Stock E 8/20/2018 7,580 11/14/2018 3,700 a. What is Grayson’s net short-term capital gain or loss from these transactions?

Relevant Range and Fixed and Variable Costs

Third World Gamer Inc. manufactures components for computer games within a relevant range of 500,000 to 1,000,000 disks per year. Within this range, the following partially completed manufacturing cost schedule has been prepared:

Complete the cost schedule below. Round costs per unit to the nearest cent.

“Blast it!” said David Wilson, president of Teledex Company. “We’ve just lost the bid on the Koopers job by $3,000. It seems we’re either too high to get the job or too low to make any money on half the jobs we bid.”

Teledex Company manufactures products to customers’ specifications and uses a job-order costing system. The company uses a plantwide predetermined overhead rate based on direct labor cost to apply its manufacturing overhead (assumed to be all fixed) to jobs. The following estimates were made at the beginning of the year:

Jobs require varying amounts of work in the three departments. The Koopers job, for example, would have required manufacturing costs in the three departments as follows:

Required:

1. Using the company's plantwide approach:

a. Compute the plantwide predetermined rate for the current year.

b. Determine the amount of manufacturing overhead cost that would have been applied to the Koopers job.

2. Suppose that instead of using a plantwide predetermined overhead rate, the company had used departmental predetermined overhead rates based on direct labor cost. Under these conditions:

a.Compute the predetermined overhead rate for each department for the current year.

b. Determine the amount of manufacturing overhead cost that would have been applied to the Koopers job.

4. Assume that it is customary in the industry to bid jobs at 150% of total manufacturing cost (direct materials, direct labor, and applied overhead).

a.What was the company’s bid price on the Koopers job using a plantwide predetermined overhead rate?

b.What would the bid price have been if departmental predetermined overhead rates had been used to apply overhead cost?

Daniel is a new employee looking at contributing to a 401(k) offered through the company. How will his contributions affect his tax liability?

Lower federal income tax

No change to tax liability

No change to FICA tax liability

Increase tax liability

1. Please make all appropriate journal entries for the following operations related to a

manufacturing firm for the month of June.

Assume Beginning WIP for Job A & B are $300 & $500, respectively. Assume Ending WIP for Job A & B are $475 & $650, respectively.

• The company purchased $1,200 of materials (on account)
• The company used direct materials
  • Job A - $350
  • Job B - $200
• The company allocated their employee efforts towards direct labor on two jobs
  • Job A - $2,300
  • Job B – $3,100
• The company estimates a total of $240,000 in O/H over the next year. The company uses

machine hours to allocate O/H and estimates 1,600 machine hours over the next year.

• In June, the company had the following machine hours
  • Job A – 20 hours
  • Job B – 10 hours
• The company used $400 indirect materials & $2,000 indirect labor
• The company incurred $1,200 depreciation on factory equipment, $500 depreciation on

office space & $300 of factory utilities

• Be sure to record the completion of Work in Process Inventory
• Be sure to record your end of period adjustment to address under or over applied overhead

Metlock Corporation has pretax financial income (or loss) equal to taxable income (or loss) from 2009 through 2017 as follows: Income (Loss) Tax Rate 2009 $41,760 30 % 2010 57,600 30 % 2011 24,480 35 % 2012 69,120 50 % 2013 (216,000 ) 40 % 2014 129,600 40 % 2015 43,200 40 % 2016 151,200 40 % 2017 (86,400 ) 45 % Pretax financial income (loss) and taxable income (loss) were the same for all years since Metlock has been in business. Assume the carryback provision is employed for net operating losses. In recording the benefits of a loss carryforward, assume that it is more likely than not that the related benefits will be realized. What entries for income taxes should be recorded for 2013? (Credit account titles are automatically indented when 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.) Account Titles and Explanation Debit Credit (To record carryback.) (To record carryforward.) Indicate what the income tax expense portion of the income statement for 2013 should look like. Assume all income (loss) relates to continuing operations. (Enter loss using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) What entry for income taxes should be recorded in 2014? (Credit account titles are automatically indented when 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.) How should the income tax expense section of the income statement for 2014 appear? (Enter loss using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) What entry for income taxes should be recorded in 2017? (Credit account titles are automatically indented when 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.) How should the income tax expense section of the income statement for 2017 appear? (Enter loss using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

At December 31, 2018, the financial statements of Hollingsworth Industries included the following:

Additional data:
The bonds payable were issued at par in 2016. The tax rate for 2018 was 40%.

Required:
Compute basic and diluted EPS for the year ended December 31, 2018. (Enter your answers in millions (i.e., 10,000,000 should be entered as 10).)
  

Maggie bought a house which was quite a dump in 1989 for $75,000. She fixed it up with paint and wallpaper but in 1996 she did a major renovation which cost $50,000. In 1993, she bought a dump of a cottage for $35,000 because it was both on a lake and near some good cross-country ski trails. She winterized it immediately for $10,000. Over time, the dumpy cottage has become quite attractive with the addition of a new roof, siding, windows and doors all of which cost $15,000 in 1995. In addition, she is fond of landscaping and has created quite a beautiful garden. I might add that Maggie has only $40,000 in RRSPs since she prefers to sink her money into her living space.

In July 2006, Maggie lost her job and received $60,000 in severance pay. She put as much as she could into her RRSP (included in the $40,000 above) and put the rest in GICs to help finance her plan. Maggie had been taking courses for several years to become a Master Gardener.

When she lost her job, she decided to live out her dream of having a gardening business where she would design gardens for others with cottages near her and maintain them if they needed it because they mostly come to their cottages on the weekend to relax. In the winter, she will keep the lanes clear (with her snow blower) and check up on the cottages now and again. She gave her corporate clothes to her friend Kate with the proviso that she could stay with her when she comes to the City (which won’t be often because she is very fed up).

When she lost her job, she immediately started renting out the house for $1,600 a month plus utilities. She still has to pay the $2,400 a year taxes and maintenance but figures the house will be her retirement fund. When she started renting out the house, it immediately ceased to be her principal residence – her cottage is now her principal residence. In July 2006, her house was worth $300,000 and the cottage is worth $140,000.

Questions:

a.     Maggie’s house increases in value at about 3% a year from 2006 and she sells it in 2017. How much is her taxable capital gain on the house ignoring real estate commissions?

b.    Maggie’s cottage also increases 3% a year in value. If she also sells it in 2017 in order to buy a bed and breakfast, how much is her taxable capital gain?

The Fried Company has assembled the accompanying balance sheets and income statement and reconciliation of retained earnings for 2018. Fried Co. Balance Sheets as of December 31 (in millions) 2018 2017

On December 30, 2018, Fried paid $98 million in cash to acquire a new plant to expand operations. This was partly financed by an issue of long-term debt for $50 million. Some plant assets were sold for their book value of $6 million during 2018. Because net income was $9 million, the highest in the company’s history, Naftali Fried, the chief executive officer, was distressed by the company’s extremely low cash balance.

Required: a. Prepare a statement of cash flows using the direct method for reporting cash flows from operating activities. Do not forget to prepare a schedule that reconciles net income to net cash provided by operating activities. b. What is revealed by the statement of cash flows? Does it help you reduce Mr. Fried’s distress? Why? Briefly explain to Mr. Fried why cash has decreased even though net income was $9 million.