Metlock Corporation wishes to exchange a machine used in its operations. Metlock has received the following offers from other companies in the industry.

In addition, Metlock contacted Skysong Corporation, a dealer in machines. To obtain a new machine, Metlock must pay $102,300 in addition to trading in its old machine.

For each of the four independent situations, prepare the journal entries to record the exchange on the books of each company. (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.)

2. Preferential Rates Income: Determine the taxpayer’s income tax liability for 2020 for each of the scenarios.

a. Henrich is married to Sally and their taxable income is $81,000. Included in their taxable income is $1,500 of long-term capital gains.

b. Henrich is married to Sally and their taxable income is $81,000. Included in their taxable income is $10,000 of long-term capital gains.

c. Henrich is single but provides all of the support for his 10 year-old son. His taxable income is $512,000, which includes $16,000 of qualified dividends

Explain/Show your Work

1. Zig Corporation incurs advertising and training costs of $52,500 before its business actually begins. Zig Corporation began business on May 1, 2018. Compute the maximum amount of Zig Corporation’s deduction for start-up costs for 2018.

2. John Porter, the sole shareholder of Canit Inc., incurred the following expenses for the year that were reimbursed by the company:     

Parking tickets incurred while of business                                                $550

Traffic ticket for running a stop sign when going to a business meeting $150

Political contributions on behalf of the company $750                            

What is the amount of expenses that Canit Inc. can deduct?

With the market price of gold at ​C$1,562.50 per ounce​ (C$ stands for Canadian​ dollars), Maritime Resources​ Corp., a Canadian mining​ firm, would like to assess the financial feasibility of reopening an old gold mine that had ceased operations in the past due to low gold prices. Reopening the mine would require an​ up-front capital expenditure of ​C$67.9 million and annual operating expenses of ​C$19.43 million. Maritime expects that over a​ 5-year operating life it can recover 174, 000 ounces of gold from the mine and that the project will have no terminal value. Maritime uses​ straight-line depreciation, has a 21.04​% corporate tax​ rate, and has​ a(n) 11.1​% cost of capital.

a. Calculate the operating cash flows for the gold mine project.

Operating Cash Flows for Gold Mine Project:

Revenue                 $ ________

Operating Expenses _______

EBITS                               _______

Depreciation                     _______

NPBT                               ________

Taxes                                _______

NPAT                                _______

OCF                                  _______

b. Depict on a timeline the net cash flows for the gold mine project.

c. Calculate the internal rate of return​ (IRR) for the gold mine project.

d. Calculate the net present value​ (NPV) for the gold mine project.

e. Make a recommendation to accept or reject the gold mine​ project, and justify your answer.

SHOW ALL WORK/FORMULAS

In order to maintain a modicum of ties to Canada Justin Bieber developed a product called “Blend it like Bieber” a maple and honey blend designed to compete with table syrups, honey, and other honey-like natural sweeteners.

The honey is sourced from a private Bee Farm on the outskirts of Medicine Hat, Alberta from 4th generation bee farmers. The maple syrup comes from a maple syrup production plant in Val-d’Or in the province of Quebec.

Last year was the first year for Blend it like Bieber and had sales of $5,799,000. BILB only sells wholesale and only has two sizes. A price of $3.25 for their 150mL bottle and $6.75 for their 475mL bottle. Sales were nearly even with the 475 mL bottle selling 812,700 units only 3,000 more units than the small bottle. A price change is planned and it is estimated that unit sales will rise.

A. Create a sales budget with the projected units and sales prices for next year.

Use your projected unit sales to create a production budget to answer the question below.

Beginning Inventory Ending Inventory

150mL bottle 120,400 units ???,??? units

475mL bottle 89,200 units ???,??? units

Blend it like Bieber Inc. wants ending inventory to be 25% of sales for the smaller bottles and 15% for the larger bottles

B. Create a production budget for both size bottles based on all the above information.

The “blend” can be broken down into three parts:

Maple: 40%, Honey 10%, Other Additives 50%.

The cost for the parts is as follows

Maple Syrup = $10 / liter

Honey = $17 / liter

Additives = $4 / liter

Liter = 1000 mL

C. Create a Direct Materials Purchases Budget for both size bottles based on all the above information.

D. What is the projected Gross Margin (Sales – COGS) for next year?

) Maddow and Wells, Inc. purchased equity securities in 2018. The management of the company has decided that the securities will not be sold immediately, but will be held for at least three years. This will allow MW to maximize the potential gains from holding the securities. The new accountant at the company wants to classify the securities as held-to-maturity because they will be held for three years; the company has never held securities for this long before. How would you advise the management of the company to classify the securities? At the end of each reporting year, how will the securities be recognized on the company’s books? Support your response with an appropriate ASC reference (ASC xxx-xx-xx-x) or ASU (accounting standard update).

b) Cryptocurrency and Initial Coin Offering are unique investing tools. How does the SEC view these two instruments? Use the SEC’s website to find relevant information about the SEC’s stance on these instruments. Support your discussion with relevant citations from the SEC.

All things equal, which would be superior: variable or absorption costing?

If you were take away the pros and cons of both the variable costing and absorption costing and look at them for their face value, which system would be the better of the two? Realistically I know that that is not possible and I do understand that absorption costing and variable costing each have their own purposes and uses; however, from the standpoint of a company I am trying to understand the practicality of absorption versus variable costing (if both are considered to be equal).

What I mean by that exactly is, I see (and favor) variable costing as a way of being able to more quickly assist management in making their decisions in regard to a specific product's profitability. The expenses are broken out into line items and (to me) it's much more clear on the various expenses going into a certain product. For example, if there were to be a material change, which also decreased the amount of direct labor and as result the per unit price were to decrease, those changes are able to be easily identified rather than just being all lumped together in one line item.

With absorption costing, I see it more as summary and I think that the long-term decisions could be hindered or made incorrectly.

Assume a leesee leases equipment and insists on terms that qualify it as an operating lease, barely escaping the qualification as a capital lease. Discuss the impact that such an operating lease has on financial statements and related financial information as compared to the effect that a capital lease would have.
need help.Thanks

This year, Sigma Inc. generated $633,000 income from its routine business operations. In addition, the corporation sold the following assets, all of which were held for more than 12 months.

*Through date of sale.

1. Compute Sigma’s taxable income assuming that it used the straight-line method to calculate depreciation on the building and has no nonrecaptured Section 1231 losses.
2. Recompute taxable income assuming that Sigma sold the securities for $186,400 rather than $85,250.

ructions

Red Line Railroad Inc. has three regional divisions organized as profit centers. The chief executive officer (CEO) evaluates divisional performance, using income from operations as a percent of revenues. The following quarterly income and expense accounts were provided from the trial balance as of December 31:

The company operates three service departments: Shareholder Relations, Customer Support, and Legal. The Shareholder Relations Department conducts a variety of services for shareholders of the company. The Customer Support Department is the company’s point of contact for new service, complaints, and requests for repair. The department believes that the number of customer contacts is an activity base for this work. The Legal Department provides legal services for division management. The department believes that the number of hours billed is an activity base for this work. The following additional information has been gathered:

You are a public accountant with many small business clients. During a recent visit to a client’s business, the bookkeeper approached you with a problem. The columns of the trial balance were not equal. You helped the bookkeeper find and correct the error, but believe you should go one step further.

Requirement: Write a memo to all of your clients that explains (a) the purpose of the double-entry framework, (b) the importance of maintaining the equality of the accounting equation, (c) the errors that might cause an inequality, and (d) suggestions for finding the errors.

The document should be in a memo format, 12-font Times New Roman, and be between 500-750 words.

On January 1, 2018, Labtech Circuits borrowed $190,000 from First Bank by issuing a three-year, 8% note, payable on December 31, 2020. Labtech wanted to hedge the risk that general interest rates will decline, causing the fair value of its debt to increase. Therefore, Labtech entered into a three-year interest rate swap agreement on January 1, 2018, and designated the swap as a fair value hedge. The agreement called for the company to receive payment based on an 8% fixed interest rate on a notional amount of $190,000 and to pay interest based on a floating interest rate tied to LIBOR. The contract called for cash settlement of the net interest amount on December 31 of each year. Floating (LIBOR) settlement rates were 8% at inception and 9%, 7%, and 7% at the end of 2018, 2019, and 2020, respectively. The fair values of the swap are quotes obtained from a derivatives dealer. These quotes and the fair values of the note are as follows: January 1 December 31 2018 2018 2019 2020 Fair value of interest rate swap 0 $ (2,659 ) $ 1,835 $ 0 Fair value of note payable $ 190,000 $ 187,341 $ 191,835 $ 190,000 Required: 1. Calculate the net cash settlement at the end of 2018, 2019, and 2020. 2. Prepare the journal entries during 2018 to record the issuance of the note, interest, and necessary adjustments for changes in fair value. 3. Prepare the journal entries during 2019 to record interest, net cash interest settlement for the interest rate swap, and necessary adjustments for changes in fair value. 4. Prepare the journal entries during 2020 to record interest, net cash interest settlement for the interest rate swap, necessary adjustments for changes in fair value, and repayment of the debt. 5. Calculate the book values of both the swap account and the note in each of the three years. 6. Calculate the net effect on earnings of the hedging arrangement in each of the three years. (Ignore income taxes.) 7. Suppose the fair value of the note at December 31, 2018, had been $187,000 rather than $187,341 with the additional decline in fair value due to investors’ perceptions that the credit worthiness of Labtech was worsening. How would that affect your entries to record changes in the fair values?

Golden Manufacturing Company started operations by acquiring $142,000 cash from the issue of common stock. On January 1, 2018, the company purchased equipment that cost $132,000 cash, had an expected useful life of five years, and had an estimated salvage value of $13,200. Golden Manufacturing earned $94,700 and $68,080 of cash revenue during 2018 and 2019, respectively. Golden Manufacturing uses double-declining-balance depreciation.

Required

1. Record the purchase in a horizontal statements model.

1. b-1. Prepare an income statements for 2018 and 2019. Use a vertical statements format.

1. b-2. Prepare a balance sheets for 2018 and 2019. Use a vertical statements format.

1. b-3. Prepare a statements of cash flows for 2018 and 2019. Use a vertical statements format.

Beverly and Ken Hair have been married for 3 years. Both taxpayers are under age 65. Beverly works as an accountant at Cypress Corporation. Ken is a full-time student at Southwest Missouri State University (SMSU) and also works part-time during the summer at Cypress Corp. Ken's birthdate is January 12, 1992 and Beverly's birthdate is November 4, 1994. Beverly and Ken each received a W-2 form from Cypress Corporation. The Hairs have interest income of $1,000 on City of St. Louis bonds. Beverly and Ken also received a Form 1099-INT from Boatman's Bank and a 1099-DIV form from green Corporation. Ken is an excellent student at SMSU. He was given a $1,750 scholarship by the university to help pay educational expenses. The scholarship funds were used by Ken for tuition and books. Last year, Beverly was laid off from her former job and was unemployed during January 2018. She was paid $1,825 of unemployment compensation until she started work with her current employer, Cypress Corporation. Ken has a 4-year-old son, Robert R. Hair, from a prior marriage that ended in divorce in 2013. During 2018, he paid his ex-wife $300 per month in child support. Robert is claimed as a dependent by Ken's ex-wife. During 2018, Ken's aunt died. The aunt, in her will, left Ken $15,000 in cash. Ken deposited this money in the Boatman's Bank savings account. Required: Complete the Hair's Form 1040, Schedule 1, and the Qualified Dividends and Capital Gain Tax Worksheet. The Hair's had health cover for the entire year. They do not want to make any contribution to the presidential election campaign. Make any other realistic assumptions about any missing data. If an amount box does not require an entry or if an amount is zero, enter "0". Enter amounts as positive numbers. If required, round amounts to the nearest dollar.

anufacturing costs for Davenport Company during 2018 were as follows:

Note: The pre-determined overhead rate is 0.85 (85%) of direct labor cost.

Required:

1. Prepare a Cost of Goods Manufactured report.

2. Prepare a Partial Income Statement if sales revenue was $1,350,000 and operating expenses were $260,000 for 2018.