The accounting records of Wall’s China Shop reflected the following balances as of January 1, Year 3:

The following five transactions occurred in Year 3:

1. First purchase (cash): 125 units @ $96
2. Second purchase (cash): 195 units @ $104
3. Sales (all cash): 375 units @ $200
4. Paid $16,100 cash for salaries expense
5. Paid cash for income tax at the rate of 25 percent of income before taxes
   

Required
a. Compute the cost of goods sold and ending inventory, assuming (1) FIFO cost flow, (2) LIFO cost flow, and (3) weighted-average cost flow. Compute the income tax expense for each method.
b. Use a vertical model to show the Year 3 income statement, balance sheet, and statement of cash flows under FIFO, LIFO, and weighted average. (Hint: Record the events under an accounting equation before preparing the statements.)

Use a vertical model to prepare the Year 3 statement of cash flows under FIFO, LIFO, and weighted average. (Do not round intermediate calculations. Round your answers to nearest whole dollar amount. Amounts to be deducted should be indicated with a minus sign.)

a) In terms of the company's Act, set out the definition of distribution as well as three types of distribution.

b) A company’s directors may not authorize any proposed distribution unless it has complied with
which two tests?

c) Briefly discuss the meaning of ‘’financial assistance’’ in terms of company law.

d) With reference to case law, discuss the term securities in terms of company law.

he printout of the Revenues and Appropriations subsidiary ledger accounts for the General Fund of the City of Augusta for the first quarter of the fiscal year appeared as follows: Revenues Ledger Est. Revenues Revenues Balance Account Ref. Account Title Dr(Cr) Cr(Dr) Dr(Cr) 3/4020 Taxes—Real Property 101 Budget Authorization 764,000 764,000 102 Received in Cash 212,600 551,400 3/4050 Licenses and Permits 101 Budget Authorization 114,000 114,000 102 Received in Cash 11,400 102,600 3/4070 Intergovernmental Revenue 101 Budget Authorization 64,000 64,000 102 Received in Cash 16,400 47,600 103 13,900 61,500 Appropriations, Expenditures, and Encumbrances Ledger Encumbrances Increase Encumbrances Decrease Encumbrances Balance Expenditures Expenditures Balance Appropriation Balance Account Ref Account / Description Dr (Cr) Dr(Cr) Dr(Cr) Dr(Cr) Cr(Dr) Cr(Dr) 5/6/7020 General Government 101 Budget Authorization 649,000 649,000 102 Purchase Order Issued 7,100 7,100 641,900 102 Payroll 162,600 162,600 479,300 102 Goods Received 5,400 1,700 5,350 167,950 479,350 5/6/7030 Public Safety 101 Budget Authorization 139,000 139,000 102 Payroll 31,400 31,400 107,600 103 52,800 160,400 5/6/7050 Culture and Recreation 101 Budget Authorization 99,000 99,000 102 Purchase Order Issued 1,900 1,900 97,100 102 Goods Received 1,900 0 1,700 1,700 97,300 102 Payroll 15,700 17,400 81,600 5/6/7070 Miscellaneous 101 Budget Authorization 16,400 16,400

Required

Assuming that there are no other General Fund revenue or expenditure transactions, answer the following questions. What were the original approved budget amounts for Estimated Revenues and for Appropriations? (1) Was the budget adjusted during the year? (2) If so, which accounts if any were adjusted and by how much? (3) In total, has Budgetary Fund Balance increased, decreased, or remained the same during the first fiscal quarter?\ (1) What are the current balances of the Estimated Revenues and Appropriations control accounts? (2) What are the current balances of the Revenues, Encumbrances, and Expenditures control accounts?

Describe the purpose of U.S. generally accepted accounting principles (U.S. GAAP) and the benefits that these rules provide.

Tax 2018. Amos is a self-employed tax attorney. He and Monica, his employee, attend a conference in Dallas sponsored by the American Institute of CPAs. The following expenses are incurred during the trip:

1. Amos pays for all of these expenses. Calculate the effect of these expenses on Amos’s AGI.
2. Would your answer to part (a) change if the American Bar Association had sponsored the conference? Explain.

On January 1, 2020, Pearl Company makes the two following acquisitions.

The company has to pay 12% interest for funds from its bank.

(Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 58,971. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Jan 21 A customer who owed $10,000 on an account receivable, agreed to sign a 60-day note receivable with an interest rate of 6.0%. The interest earned on the note will be paid at the maturity date of the note receivable.

Feb 10 Sanford Company sold the note receivable from Jan 21st to the bank, which discounted the note at 8.0%.

Required:

What is the correct journal entry for February 10th and why?

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.