5.        Bridgemen Inc. is preparing its 2017 yearend financial statements . Prior to any possible adjustments from the items listed below, inventory was valued at $75,060, based on a physical count of the goods on hand.

1. Goods valued at 11,000 are on consignment with Clark Company.

2. Goods costing $2,800 were received from a vendor on January 4, 2018. The related invoice was received and recorded on January 12, 2018. The goods had been shipped on December 31, 2017, FOB shipping point.

3. Goods costing $8,400 were shipped on December 31, FOB shipping point. These were delivered to the customer on January 2, 2018. The goods had been included in the physical count of inventory, and the sale had been recorded upon delivery to the customer.

4. A shipment of goods to a customer priced at $3,500, terms FOB destination, delivered on January 5, 2018, was not included in the inventory count at 12/31. They cost Bridgemen $2,600. The sale was recorded in 2017.

5. An invoice from Cole Inc. for goods costing $5,500 was received and recorded on December 27, 2017. The related goods were shipped FOB destination on December 27 and arrived at Bridgemen’s business on January 3, 2018.

6. Goods valued at $6,500 are on consignment from Fields Corp. These goods were not included in the physical count.

7. A $9,750 shipment of goods to a customer on December 30, 2017 FOB destination was recorded as a sale in 2017. The goods, costing $8,250, were delivered to the customer on January 8, 2018.

5a. Justify your treatment of each of the above items in the calculation of ending inventory at December 31, 2017

5b. Compute the proper inventory amount for the December 31, 2017 balance sheet.

5c. By how much would Bridgemen’s net income be misstated if no adjustments had been made for the items above?

5d. If Bridgemen did not find this list of possible errors until after the audit were completed, but before the end of 2018, prepare any necessary entry. Bridgemen uses the periodic inventory system and assume the amounts are material. Hint: Chapter 23 could be useful…

What is the ATCF rate of return for machine that costs 300,000, lasts for 8 years, has zero salvage value, and is classified as 5 year MACRS property? The machine will be purchased with a 20.0% down payment and a four year loan for the remaining amount at an annual interest rate of 11.50%. The machine produces net revenues after deducting direct and indirect expenses but not depreciation of 46,000 in year 1, 120,000 in years 2 to 6, 60,000 in year 7, and 40,000 in year 8. Use a tax rate of 21.00%

Agri Machinery P/L enters into a lease (to a lessee) agreement and leases harvesting equipment to Grain Holdings Ltd. The lease consists of the following;  Date of inception: 1/1/13  Duration of lease: 4 years  Life of leased asset: 5 years  Lease payments (annual): $160,000 (annual) includes $15,000 for maintenance and insurance costs per annum.  $70,000 (added to final payment)  Implicit rate of interest is 11.5% (is this the actual rate)  Fair value: $490,384 The asset was acquired on 12/11/2012 Required; a) Check that the implicit rate is correct against FV. b) Do the journal entries for the Lessor (using the Net Method) for acquisition,

Ms. Brown apparently wasn't up on pension accounting because the plan file contains only the following note: Remember to tell boss that I need help with accounting for these things! -C.B.

It takes a couple of days to assemble the information you need, but you finally get it all together and summarize it as follows:

Pension Plan

Tasks:

• Prepare a pension worksheet using Microsoft Excel for both years 2014 and 2015 and the necessary computations and amortization of the loss (2015), using the corridor approach.
• Prepare in the same worksheet the journal entries to reflect all pension plan transactions and events at December 31 of each year.
• For 2015, indicate (in the same worksheet) the pension amounts to be reported in the financial statements.
• Explain alternative measures for valuing the pension obligation. What would you advise for Panache?

Lamour Corporation is a job order costing company that uses activity-based costing to apply overhead to jobs. The following overhead activities were budgeted for the year.

The following information about the jobs was given for April.

By April 30, Jobs 102 and 103 were completed and sold. The remaining jobs were still in process.
What is the cost of goods manufactured?

a.$ 249,610

b.$ 178,340

c.$ 215,670

d.$ 144,400

Using the appropriate present value table and assuming a 12% annual interest rate, determine the present value on December 31, 2018, of a five-period annual annuity of $7,700 under each of the following situations: (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)

1.The first payment is received on December 31, 2019, and interest is compounded annually.
2.The first payment is received on December 31, 2018, and interest is compounded annually.
3.The first payment is received on December 31, 2019, and interest is compounded quarterly.
  

PROBLEM: Front Range Furniture expects to maintain the same inventories at the end of 2020 as at the beginning of the year. The total of all production costs for the year is assumed to be equal to the cost of goods sold. With this in mind, the various department heads were asked to submit estimates of the costs of their departments during the year. A summary report of these estimates is as follows:

                                                                        Estimated variable cost                   Estimated Fixed cost

Production costs:                          

Direct material                                                       50     

Direct labor                                                             30    

Factory overhead                                                                                                         350,000

Selling Expense:

Sales salaries/ commission                                     4                                                           340,000

Travel                                                                                                                                           4,000

Advertising                                                                                                                              116,000

Miscellaneous Selling expenses                             1                                                               2,300

Administrative Expenses:

Management and office staff salaries                                                                                325,000

Office supplies                                                          4                                                                 6,000

Misc. Administrative expenses                              1                                                                 8,700

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

                                                                                    $90                                                        $1,152,000

It’s expected that 12,000 units will be sold at a price of $240 per unit. Maximum sales within the relevant range are 18,000.

Required: Complete the chart in your working papers to calculate total fixed and variable costs (see the Working Papers for more detailed instructions).

Scenario

Wanda is relaxing after a long day of treat baking and turns on her tablet to check Facebook and see what all of her friends have been doing while she has been baking Chicken Cuties. While she is scrolling along, an ad pops up on the side of her page for “Woofables”—The Gourmet Dog Bakery. Wanda is stunned and immediately picks up her phone and starts texting you. Her first text is, “How dare they advertise their dog treats to me?” and the texts go downhill from there. Clearly, Wanda has not done much research regarding how her competition is marketing their products.

For Discussion

1. Go on the Internet and search for products that are similar to those sold by Salty Pawz. Google terms like gourmet dog treats, healthy dog biscuits, or gourmet pet treats.
2. Select a product that has a website associated with it to get sufficient information about the product for your posting. Put yourself in Wanda’s place as if she is researching the competition.
3. Evaluate the product you select based on the Four Ps of marketing. How is the company using each of the Four Ps to market their line of dog treats?
4. In your initial post you should include the following:
   • Name of the product, name of the company, and the URL for the website
   • How the company is using EACH of the Four Ps to market their line of gourmet dog treats
5. What, if anything, can Wanda learn from your research that she can apply to Salty Pawz?

The stockholders’ equity accounts of Bridgeport Company have the following balances on December 31, 2020.

Shares of Bridgeport Company stock are currently selling on the Midwest Stock Exchange at $35.

Prepare the appropriate journal entries for each of the following cases. (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.)

Based on your future career in accounting, develop a scenario for managers, relevant to the accounting industry, illustrating which behaviors are ethical and which are not, then briefly discuss these. (2-3 examples which behaviors are ethical and 2-3 examples of unethical behaviors)

Earned Income Credit:

For each of the following situations, compute the taxpayers’ 2019 earned income credit. A. Patty and Ron Barnett file a joint return, claiming their two sons, ages 3 and 5, as dependents. The Barnett’s AGI is $14,400, which consists entirely of Ron’s wages. B. Joseph is a 25-year-old graduate student. His gross income consists of $5,000 of wages and $80 in interest from a savings account. Joseph files as single and claims no dependents. C. Suzanne and Vernon Zimmerman file a joint return, claiming their 6-year-old daughter as a dependent. The Zimmermans’ AGI consists of Vernon’s $26,375 in wages, and $400 in dividend income. D. Sarah files as head of household, claiming her 2-year-old son as a dependent. Sarah’s AGI consists of $18,000 in wages and $3,620 in interest income.

“Differentiate Between Value-Added and Non-Value-Added activities?
What are two advantages and two criticisms of activity-based costing?
Comment, Why ABC and ABM is Necessary in Manufacturing Entity?
Explain Few Reasons.”

The following is a December 31, 2018, post-closing trial balance for Culver City Lighting, Inc. Account Title Debits Credits Cash $ 68,000 Accounts receivable 52,000 Inventories 58,000 Prepaid insurance 28,000 Equipment 120,000 Accumulated depreciation—equipment $ 47,000 Patent, net 53,000 Accounts payable 18,500 Interest payable 8,500 Note payable (due in 10, equal annual installments) 140,000 Common stock 83,000 Retained earnings 82,000 Totals $ 379,000 $ 379,000 a. Calculate the current ratio. b. Calculate the acid-test ratio. c. Calculate the debt to equity ratio.

BARDEEN ELECTRIC: FASB ASC AND IFRS RESEARCH CASE

On October 18, 2017, Armstrong Auto Corporation ("Armstrong") announced its plan to acquire 80 percent of the outstanding 500,000 shares of Bardeen Electric Corporation’s ("Bardeen") common stock in a business combination following regulatory approval. Armstrong will account for the transaction in accordance with ASC 805, “Business Combinations.” On December 1, 2017, Armstrong purchased an 80 percent controlling interest in Bardeen’s outstanding voting shares. On this date, Armstrong paid $40 million in cash and issued one million shares of Armstrong common stock to the selling shareholders of Bardeen. Armstrong’s share price was $26 on the announcement date and $24 on the acquisition date. Bardeen’s remaining 100,000 shares of common stock had been purchased for $3,000,000 by a small number of original investors. These shares have never been actively traded. Using other valuation techniques (comparable firms, discounted cash flow analysis, etc.), Armstrong estimated the fair value of Bardeen’s noncontrolling shares at $16,500,000. The parties agreed that Armstrong would issue to the selling shareholders an additional one million shares contingent upon the achievement of certain performance goals during the first 24 months following the acquisition. The acquisition-date fair value of the contingent stock issue was estimated at $8 million. Bardeen has a research and development (R&D) project underway to develop a superconductive electrical/magnetic application. Total costs incurred to date on the project equal $4,400,000. However, Armstrong estimates that the technology has a fair value of $11 million. Armstrong considers this R&D as in-process because it has not yet reached technological feasibility and additional R&D is needed to bring the project to completion. No assets have been recorded in Bardeen’s financial records for the R&D costs to date. Bardeen’s other assets and liabilities (at fair values) include the following:

Cash $ 425,000

Accounts receivable 788,000

Land 3,487,000

Building 16,300,000

Machinery 39,000,000

Patents 7,000,000

Accounts payable (1,500,000)

Neither the receivables nor payables involve Armstrong. Answer the following questions citing relevant support from the ASC and IFRS. 1. What is the total consideration transferred by Armstrong to acquire its 80 percent controlling interest in Bardeen?

2. What values should Armstrong assign to identifiable intangible assets as part of the acquisition accounting?

3. What is the acquisition-date value assigned to the 20 percent noncontrolling interest? What are the potential noncontrolling interest valuation alternatives available under IFRS?

4. Under U.S. GAAP, what amount should Armstrong recognize as goodwill from the Bardeen acquisition? What alternative goodwill valuations are allowed under IFRS?