Use the following information for Taco Swell, Inc., (assume the tax rate is 21 percent): 2017 2018 Sales $ 16,549 $ 18,498 Depreciation 2,376 2,484 Cost of goods sold 5,690 6,731 Other expenses 1,353 1,178 Interest 1,110 1,325 Cash 8,676 9,247 Accounts receivable 11,488 13,482 Short-term notes payable 1,674 1,641 Long-term debt 29,060 35,229 Net fixed assets 72,770 77,610 Accounts payable 6,269 6,640 Inventory 20,424 21,862 Dividends 1,979 2,314 Prepare a balance sheet for this company for 2017 and 2018. (Be sure to list the accounts in order of their liquidity. Do not round intermediate calculations.) Prepare an income statement for this company for 2017 and 2018. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. Input all amounts as positive values.)

Smith Ltd. was in the process of preparing year-end adjusting entries for the year ended December 31, 2018. Smith Ltd. had the following balance in their books (ledger):

Additional Information:

• Total Credit Sales during 2018:     $66,000

The Company estimated the following for the year-end December 31, 2018 purposes:

Required:
a) Prepare the year-end entries for the above that are related to accounts receivable
b) Calculate the amount that would be displayed on SFP for net accounts receivable

Alex, Inc., buys 40 percent of Steinbart Company on January 1, 2017, for $1,028,000. The equity method of accounting is to be used. Steinbart’s net assets on that date were $2.40 million. Any excess of cost over book value is attributable to a trade name with a 20-year remaining life. Steinbart immediately begins supplying inventory to Alex as follows:

Inventory held at the end of one year by Alex is sold at the beginning of the next.

Steinbart reports net income of $94,750 in 2017 and $128,250 in 2018 and declares $30,000 in dividends each year. What is the equity income in Steinbart to be reported by Alex in 2018?

Multiple Choice

• $58,956.

• $52,056.

• $38,896.

• $43,656.

Bramble Inc. reports the following pretax income (loss) for both book and tax purposes.

Prepare the journal entries for years 2018–2021 to record income tax expense (benefit) and income taxes payable (refundable), and the tax effects of the loss carry forward, assuming that based on the weight of available evidence, it is more likely than not that one-half of the benefits of the loss carry forward will not be realized.

Prepare the income tax section of the 2020 income statement beginning with the line “Operating loss before income taxes.”

Prepare the income tax section of the 2021 income statement beginning with the line “Income before income taxes.”

The tax rates listed were all enacted by the beginning of 2018.

All-Star Automotive Company experienced the following accounting events during 2018:

Performed services for $25,000 cash.

Purchased land for $6,000 cash.

Hired an accountant to keep the books.

Received $50,000 cash from the issue of common stock.

Borrowed $5,000 cash from State Bank.

Paid $14,000 cash for salary expense.

Sold land for $9,000 cash.

Paid $10,000 cash on the loan from State Bank.

Paid $2,800 cash for utilities expense.

Paid a cash dividend of $5,000 to the stockholders.

a) Indicate how each of the events would be classified on the statement of cash flows as operating activities (OA), investing activities (IA), financing activities (FA), or not applicable (NA).

b) Prepare a statement of cash flows for 2018. Assume All-Star Automotive Company had a beginning cash balance of $9,000 on January 1, 2018.

Marigold Inc. uses the retail inventory method to estimate ending inventory for its monthly financial statements. The following data pertain to a single department for the month of October 2018.

(a) Using the conventional retail method, prepare a schedule computing estimated lower-of-cost-or-market inventory for October 31, 2018. (Round ratios for computational purposes to 0 decimal places, e.g 78% and final answer to 0 decimal places, e.g. 28,987.)

On July 15, 2018, Ortiz & Co. signed a contract to provide EverFresh Bakery with an ingredient-weighing system for a price of $79,200. The system included finely tuned scales that fit into EverFresh’s automated assembly line, Ortiz’s proprietary software modified to allow the weighing system to function in EverFresh’s automated system, and a one-year contract to calibrate the equipment and software on an as-needed basis. (Ortiz competes with other vendors who offer ongoing calibration contracts for Ortiz’s systems.) If Ortiz was to provide these goods or services separately, it would charge $51,000 for the scales, $10,000 for the software, and $39,000 for the calibration contract. Ortiz delivered and installed the equipment and software on August 1, 2018, and the calibration service commenced on that date.

Assume that the scales, software and calibration service are all separate performance obligations. How much revenue will Ortiz recognize in 2018 for this contract?

Multiple Choice

$79,200

$48,312

$61,182

$0

Suppose that people consume only three goods, as shown in this table:

Complete the following table by computing the percentage change in price for each of the three goods.

Using a method similar to that used to calculate the consumer price index, the percentage change in the overall price level is.

True or False: If you were to learn that a bottle of Gatorade increased in size from 2017 to 2018, that information would raise your estimation of the inflation rate.

True

False

True or False: If you were to learn that Gatorade introduced new flavors in 2018, that would imply that the inflation rate you estimated is overstated.

True

False

On November 1, 2017, Bernard Company (a U.S.-based company) sold merchandise to a foreign customer for 190,000 FCUs with payment to be received on April 30, 2018. At the date of sale, Bernard entered into a six-month forward contract to sell 190,000 FCUs. The company properly designates the forward contract as a cash flow hedge of a foreign currency receivable. The following exchange rates apply:

Bernard's incremental borrowing rate is 12 percent. The present value factor for four months at an annual interest rate of 12 percent (1 percent per month) is 0.9610.

1. Prepare all journal entries, including December 31 adjusting entries, to record the sale and forward contract

Matthew is 45 years old and made $80,000 in wages in 2018. He is single and pays all the cost of keeping up his home. Matthew’s daughter, Barbara, lived with Matthew all year. Barbara’s son, Henry, was born in April 2018.Henry lived in Matthew’s home since birth. Barbara is 18, single, and had $4,100 in wages in 2018. Barbara is not required to file a tax return. Matthew provides more than half of the support for both Barbara and Henry What is Matthew’s filing status: (Explain your answer) a. Single. b. Married jointly c. Head of household. d. Qualifying widow(er) with dependent child. Who can Matthew claim as his dependents? (Explain your answer) a. No one b. Barbara Only c. Henry Only d. Both Barbara and Henry