For 2020, prepare a pension worksheet for Brownie Company that shows the journal entry for pension expense and the year-end balances in the related pension accounts.

The following is an excerpt from a telephone conversation between Ben Simpson, president of Main Street Co., and Tami Lundgren, owner of Reliable Employment Co.:

Ben: Tami, you're going to have to do a better job of finding me a new computer programmer. That last guy was great at programming, but he didn't have any common sense.

Tami: What do you mean? The guy had a master's degree with straight A's.

Ben: Yes, well, last month he developed a new financial reporting system. He said we could do away with manually preparing an end-of-period spreadsheet and financial statements. The computer would automatically generate our financial statements with “a push of a button.”

Tami: So what's the big deal? Sounds to me like it would save you time and effort.

Ben: Right! The balance sheet showed a minus for supplies!

Tami: Minus supplies? How can that be?

Ben: That's what I asked.

Tami: So, what did he say?

Ben: Well, after he checked the program, he said that it must be right. The minuses were greater than the pluses.…

Tami: Didn't he know that Supplies can't have a credit balance—it must have a debit balance?

Ben: He asked me what a debit and credit were.

Tami: I see your point.

1. Comment on (a) the desirability of computerizing Main Street Co.'s financial reporting system, (b) the elimination of the end-of-period spreadsheet in a computerized accounting system, and (c) the computer programmer's lack of accounting knowledge.

2. Explain to the programmer why Supplies could not have a credit balance.

On January 1, 2020, Mehan, Incorporated purchased 15,000 shares of Cook Company for $150,000 giving Mehan a 15% ownership of Cook. The fair value of the 15% investment was the same as the carrying value of the investment when, on January 1, 2021, Mehan purchased an additional 25,000 shares (25%) of Cook for $300,000. This last purchase gave Mehan the ability to apply significant influence over Cook. The book value of Cook on January 1, 2020 was $1,000,000. The book value of Cook on January 1, 2021, was $1,100,000. Any excess of cost over book value for this second transaction is assigned to a database and amortized over four years.

Cook reports net income and dividends as follows. These amounts are assumed to have occurred evenly throughout the years:

On April 1, 2022, just after its first dividend receipt, Mehan sells 10,000 shares of its investment.

What was the balance in the investment account at April 1, 2022 just before the sale of shares?

The answer is $535,875.

$517,500 + ($25,000 − $625) − $6,000 = $535,875

2022 Beginning Investment Account Balance + (40% of 1st Quarter Income – 1st Quarter Amortization) – 1st Quarter Dividend

My question is how do you get 2022 Beginning Investment Account Balance?

Terry has traditionally purchased all of its manufacturing equipment. However, in 2020 they were unable to find a vendor willing to sell them a new $5,078,000 machine. After some careful negotiations, however, they were able to lease the needed equipment for 5 years. At the end of the lease Terry will have the option to purchase the equipment for $406,000, the estimated fair value at the end of the lease. They currently plan to exercise the option and keep the equipment at the end of the lease, but that could change if they find a better option.

The machine has an estimated economic life of 7 years with no salvage value. The payments on the lease will be $985,702. Terry does not know the implicit interest rate used by the vendor, but their incremental interest rate is 5.5%. The lease period began on May 1, 2020 and the first payment was made that day. Subsequent payments will be made each year and should be paid one day before the start date to ensure that no late penalties are accrued. In addition to the first payment, Terry paid $16,000 in legal and other lease origination fees on May 1, 2020.

Terry has decided to keep all of its accumulated depreciation in one account rather than create a separate account for leased assets

QUESTION: Make the appropriate journal entries, if any, to account for the lease (including any necessary changes to income tax expense) tax rate is 25%

The following events occurred in independent cases, but in each instance, the event happened after the close of the fiscal year under the audit but before the financial statements were authorised for the issue, which is also the audit report date. For each case, state what impact, if any, you would expect on the financial statements (and notes). The balance sheet in each instance is December 31, 2019.

Case1. On December 31, the commodities handled by the company had been traded on the open market for $1.40 per kilogram. this price had prevailed for two weeks, following an official market report that predicted vastly enlarged supplies; however, no purchases were made $1.40. The price throughout the preceding year, and several prior years, had been about $2. On January 18, 2020, the price returned to $2, following disclosure of an error in the official calculations of the prior December- correction of which destroyed the expectation of excessive supplies. Inventory at December 31, 2019, had been valued on a LCNRN (lower of cost and net realizable value) basis, using the prevailing price known at that time, $1.40.

Case 2. On February 1, 2020, the board of directors adopted a resolution accepting an investment banker’s offer to guarantee the marketing of $100 million of preferred shares.

Case3. On January 22, 2020, one of the auditee’s three major plants burned down, a $50 million loss that was covered to $40 million by insurance.

Sheffield Company reports pretax financial income of $76,500 for 2020. The following items cause taxable income to be different than pretax financial income.

1. Depreciation on the tax return is greater than depreciation on the income statement by $15,700.

2. Rent collected on the tax return is greater than rent recognized on the income statement by $23,400.

3. Fines for pollution appear as an expense of $10,500 on the income statement. Sheffield’s tax rate is 30% for all years, and the company expects to report taxable income in all future years. There are no deferred taxes at the beginning of 2020.

Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2020.

Prepare the income tax expense section of the income statement for 2020, beginning with the line “Income before income taxes.

QUESTION 3 REQUIRED Use the information provided below to prepare the following for Electroman Limited for August and September 2020 (using separate monetary columns for each month):

3.1 Debtors Collection Schedule

3.2 Cash Budget. Note: Where applicable, round off amounts to the nearest Rand. INFORMATION Electroman Limited sells appliances.

The following forecasts were made:

1. The bank balance on 31 July 2020 is expected to be R50 000 (favourable).

2. Sixty percent (60%) of all sales are for cash; the balance is on credit. Credit sales for June and July 2020 are expected to be R320 000 and R360 000 respectively. Sales are expected to increase by 10% each month. Twenty percent (20%) of the credit sales are expected to be settled during the month of the sale for a discount of 5%. The remaining customers usually pay in the month after the sale.

3. All appliances are purchased on credit and the creditors are paid in the month after the purchase. Purchases are expected to be as follows: July R420 000 August R460 000 September R510 000

4. Salaries and wages are expected to cost R85 800 for September 2020, after a 10% increase takes effect on 01 September 2020.

5. Advertising expenses are expected to be 6% of the total monthly sales, and are paid one month later. 6. Equipment that cost R300 000 is expected to be purchased during August 2020.

6. A deposit of 10% will be paid in August and the balance plus finance charges of R20 000 is payable in 5 equal instalments commencing September 2020.

7. A long-term loan of R250 000 at 12% per annum interest is to be raised on 01 August 2020. Interest on loan and a loan repayment of R5 000 is payable monthly on the last day of each month, commencing 31 August 2020.

8. Other cash expenses are expected to amount to R80 000 for July 2020. These expenses are expected to increase by 5% each month.

9. An interim dividend of 8 cents per share is expected to be paid to shareholders on 31 August 2020. The issued share capital of Electroman Li

mited consists of 500 000 ordinary shares

In the circuit of Figure P32.48, the battery emf is 80 V, the resistance R is 240 , and the capacitance C is 0.500 µF. The switch S is closed for a long time, and no voltage is measured across the capacitor. After the switch is opened, the potential difference across the capacitor reaches a maximum value of 150 V. What is the value of the inductance L?

A 2.47×10^-1 g sample of HCl and a 8.82 g sample of O₂ react in a closed 2.25 L container at 487 K, according to the following balanced chemical equation:

4HCl(g) + O₂(g) → 2H₂O(l) + 2Cl₂(g)

Calculate the P_Cl2 (in atm) in the container after the reaction has gone to completion.