Crude oil, products and merchandise inventories are carried at the lower of current market value or cost (generally determined under the last-in, first-out method – LIFO). Inventory costs include expenditures and other charges (including depreciation) directly and indirectly incurred in bringing the inventory to its existing condition and location.

In 2016, 2015 and 2014, net income included losses of $295 million and $186 million, and a gain of $187 million, respectively, attributable to the combined effects of LIFO inventory accumulations and drawdowns. The aggregate replacement cost of inventories was estimated to exceed their LIFO carrying values by $8.1 billion and $4.5 billion at December 31, 2016, and 2015, respectively.

Crude oil, products and merchandise as of year-end 2016 and 2015 consist of the following:

5.3 If ExxonMobil had used FIFO in 2016, what would be the value of the inventory?

On February 1, 2019, Ellison Co. issued nine-year callable bonds with a face value of $250,000,000 and a stated interest rate of 8.5%, payable semiannually on July 1 and January 1. The bonds were sold to yield 8%. Table values are:

a. Calculate the issue price of the bonds.

b. Record the issuance on February 1, 2019.

c. Prepare the journal entries for the interest expense and payments for 2019, 2020, 2021, 2022 and 2023. (you will need to prepare amortization schedule)

d. Assume all of the bonds are called on January 1, 2024 at 102.  Prepare the journal entry to record the call.

Revise your calculations based the new information provided below and then answer the questions that follow.

A company lends $372,000 to an owner and accepts a three year, 7% note in return. The note was issued on June 1st of the current year, and will be due on June 1st of the final year of the note.

Required:
(a) Prepare the journal entry to be made when the company makes the loan and accepts the note in return. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

• Record the 7% note receivable accepted for a loan amount of $372,000.

(b) Calculate the interest revenue to be recorded at the end of each year the note is outstanding.

(c) Prepare the journal entries to accrue the interest receivable for each year the note is outstanding. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
Dec 31

• Record the interest receivable during the period ending December 31 for year 1.
• Record the interest receivable during the period ending December 31 for Year 2.
• Record the interest receivable during the period ending December 31 for Year 3.

(d) Prepare the journal entry to record receiving the cash at the note's maturity. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
June 01

• Record the receipt of cash on account of 7% note receivable.

Share two most valuable concepts learned in Federal Taxation - Individuals course and explain why.

1)What are the steps in completing the accounting cycle?

2)How do the different steps affect the financial statements?

3)What is the effect on the financial statements of missing a step when completing the accounting cycle?

4)How do these steps play a roll in accrual basis accounting?

Exercise 9-13 Revenue and Spending Variances [LO9-3]

Lavage Rapide is a Canadian company that owns and operates a large automatic car wash facility near Montreal. The following table provides data concerning the company’s costs:

For example, electricity costs are $1,000 per month plus $0.09 per car washed. The company expects to wash 8,500 cars in August and to collect an average of $6.10 per car washed.

The actual operating results for August are as follows:

Required:

Calculate the company's revenue and spending variances for August. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

pronghorn Inc. reported income from continuing operations before taxes during 2017 of $790,900. Additional transactions occurring in 2017 but not considered in the $790,900 are as follows. 1. The corporation experienced an uninsured flood loss in the amount of $98,500 during the year. 2. At the beginning of 2015, the corporation purchased a machine for $73,800 (salvage value of $12,300) that had a useful life of 6 years. The bookkeeper used straight-line depreciation for 2015, 2016, and 2017, but failed to deduct the salvage value in computing the depreciation base. 3. Sale of securities held as a part of its portfolio resulted in a loss of $62,300 (pretax). 4. When its president died, the corporation realized $159,800 from an insurance policy. The cash surrender value of this policy had been carried on the books as an investment in the amount of $43,910 (the gain is nontaxable). 5. The corporation disposed of its recreational division at a loss of $106,680 before taxes. Assume that this transaction meets the criteria for discontinued operations. 6. The corporation decided to change its method of inventory pricing from average-cost to the FIFO method. The effect of this change on prior years is to increase 2015 income by $57,320 and decrease 2016 income by $21,450 before taxes. The FIFO method has been used for 2017. The tax rate on these items is 40%. Prepare an income statement for the year 2017 starting with income from continuing operations before taxes.

Compute earnings per share as it should be shown on the face of the income statement. Common shares outstanding for the year are 128,280 shares. (Assume a tax rate of 30% on all items, unless indicated otherwise.

Develop a hypothetical company. Discuss and describe in detail what costs the product would entail, as well as the type of costing system you would use.

Greenlands, Inc. began the year with three units of finished goods inventory that cost $6 each to manufacture. Greenlands also established a $6 per unit standard product cost for the upcoming accounting period. The company actually incurred unit costs of $4 for direct materials, $2 for direct labor, and $1 for factory overhead for the ten units it produced in the current period. Greenlands sold 11 units at $10 each during the accounting period. The firm accounted for inventory on a first-in, first-out (FIFO) basis.

Required: Compute Greenlands’ cost of goods manufactured, cost of goods sold, and gross profit.

Cost of Goods Manufactured

Cost of Goods Sold

Income Statement

Balance Sheet

a.-b. Merchandise Inventory, before adjustment, has a balance of $6,500. The newly counted inventory balance is $7,000. Unearned Seminar Fees has a balance of $5,000, representing prepayment by customers for five seminars to be conducted in June, July, and August 2019. Two seminars had been conducted by June 30, 2019. Prepaid Insurance has a balance of $6,000 for six months’ insurance paid in advance on May 1, 2019. Store equipment costing $19,840 was purchased on March 31, 2019. It has a salvage value of $400 and a useful life of six years. Employees have earned $150 that has not been paid at June 30, 2019. The employer owes the following taxes on wages not paid at June 30, 2019: SUTA, $4.50; FUTA, $0.90; Medicare, $2.18; and social security, $9.30. Management estimates uncollectible accounts expense at 1 percent of sales. This year’s sales were $1,000,000. Prepaid Rent has a balance of $5,100 for six months’ rent paid in advance on March 1, 2019. The Supplies account in the general ledger has a balance of $300. A count of supplies on hand at June 30, 2019, indicated $100 of supplies remain. The company borrowed $10,600 from First Bank on June 1, 2019, and issued a four-month note. The note bears interest at 6 percent. Required: Based on the information above, record the adjusting journal entries that must be made for Sufen Consulting on June 30, 2019. The company has a June 30 fiscal year-end. Analyze: After all adjusting entries have been journalized and posted, what is the balance of the Prepaid Rent account? Based on the above information, record the adjusting journal entries that must be made for Sufen Consulting on June 30, 2019. The company has a June 30 fiscal year-end. (Round your final answers to 2 decimal places.)

Journal entry worksheet

.....

Note: Enter debits before credits.

The following relate to an operating lease agreement:

1. The lease term is 3 years, beginning January 1, 2018.
2. The leased asset cost the lessor $850,000 and had a useful life of eight years with no residual value. The lessor uses straight-line depreciation for its depreciable assets.
3. Annual lease payments at the beginning of each year were $144,500.
4. Incremental costs of negotiating costs of negotiating and consummating the completed lease transaction incurred by the lessor were $3,150.

Required:
Prepare the appropriate entries for the lessor from the beginning of the lease through the end of the lease term. (Round your intermediate and final answers to the nearest whole dollar amount. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

1. Record the cash received. (Jan 1, 2018)

2. Record the payment of initial direct costs. (Jan 1, 2018)

3. Record the cost of the lease. (Dec 31, 2018)

4. Record the depreciation expense. (Dec 31, 2018)

5. Record the rent revenue. (Dec 31, 2018)

6. Record the cash received. (Jan 1, 2019)

7. Record the cost of the lease. (Dec 31, 2019)

8. Record the depreciation expense. (Dec 31, 2019)

9. Record the rent revenue. (Dec 31, 2019)

10. Record the cash received. (Jan 1, 2020)

11. Record the cost of the lease. (Dec 31, 2020)

12. Record the depreciation expense. (Dec 31, 2020)

13. Record the rent revenue. (Dec 31, 2020)

Identify and explain the key principles and practices of corporate governance

Identify and explain the key principles and practices of statistical analysis and measures of variance

Debate the following statement: "Correlation means Causation." Determine whether this statement is true or false, and provide reasoning for your determination, using a Possible Relationships Between Variables table if one is available.