Journalize the adjusting entry needed on December 31, 2020 the company’s year end, for each of the following independent cases. Adjusting entries are only made on December 31 in this company.

1. Details of the Prepaid Rent Expense account are shown:

The company pays office rent semi-annually on March 31 and September 30. At December 31, part of the last payment is still available to cover January to march of the next year. No rent expense has been recorded for the year yet.

2. The company pays its employees each Friday. The amount of the weekly payroll is $12,500 for a five day work week. December 31 is on a Wednesday, the employees will be paid on Friday, January 2.

3. The company purchased equipment on March 1, 2020 for $120,000. The equipment has a useful life of 5 years and a residual value of $0. No depreciation has been recorded yet this year.

4. On May 1 the company received $36,000 for services to be provided from May 1, 2020 to April 30, 2021. The company provided its services from May 1-December 31, 2020.

5. The company provided services valued at $15,000 for a customer in December but has not yet sent out a bill or received any cash.

6. The beginning balance of Supplies on January 1, 2020 was $6,400. During 2019 the company purchased supplies costing $18,200. On December 31, 2020, there were $8,000 worth of supplies remaining.

Chapman Company obtains 100 percent of Abernethy Company’s stock on January 1, 2020. As of that date, Abernethy has the following trial balance:

During 2020, Abernethy reported net income of $103,500 while declaring and paying dividends of $13,000. During 2021, Abernethy reported net income of $145,250 while declaring and paying dividends of $47,000. Assume that Chapman Company acquired Abernethy’s common stock for $793,300 in cash. As of January 1, 2020, Abernethy’s land had a fair value of $134,000, its buildings were valued at $267,800, and its equipment was appraised at $336,250. Chapman uses the equity method for this investment.

Prepare consolidation worksheet entries for December 31, 2020, and December 31, 2021

1-Prepare entry *C to convert parent's beginning retained earnings to full accrual basis.

2-Prepare entry S to eliminate stockholders' equity accounts of subsidiary.

3-Prepare entry A to recognize allocations attributed to fair value of specific accounts at acquisition date with residual fair value recognized as goodwill.

4-Prepare entry I to eliminate the income accrual for 2020 less the amortization recorded by the parent using the equity method.

5-Prepare entry D to eliminate intra-entity dividend transfers.

6-Prepare entry E to recognize current year amortization expense.

7-Prepare entry *C to convert parent's beginning retained earnings to full accrual basis.

8-Prepare entry S to eliminate stockholders' equity accounts of subsidiary for 2021.

9-Prepare entry A to recognize allocations attributed to specific accounts at acquisition date for 2021.

10-Prepare entry I to eliminate the income accrual for 2021 less the amortization recorded by the parent using the equity method.

11-Prepare entry D to eliminate intra-entity dividend transfers.

12- Prepare entry E to recognize current year amortization expense.

1. From the 'Rolling with the Changes-HFMA' article (Summer 2020):
   • How did COVID-19 pandemic...'accelerate telehealth?'
2. What two things appeared to be true for all U.S. healthcare organizations?
3. Provide four examples of how staff and medical practitioners were redeployed:
4. Why did Virginia Commonwealth University Health System 'project a positive financial outlook?'
5. Why would patient volume declining affect revenue?

On January 1, 2020, Sharp Company purchased $50,000 of Sox Company 6% bonds, at a time when the market rate was 5%. The bonds mature on December 31, 2024, and pay interest annually on December 31. Sharp plans to and has the ability to hold the bonds until maturity. Assume that Sharp uses the effective interest method to amortize any premium or discount on investments in bonds. At December 31, 2020, the bonds are quoted at 98. a. Prepare the entry for the purchase of the debt investment on January 1, 2020. b. Prepare the entry for the receipt of interest on December 31, 2020. c. Record the entry to adjust the investment to fair value on December 31, 2020, if applicable

Topic 1: Consolidation: Principles and accounting requirements

On 1 July 2017, Patience Ltd acquired all the issued shares of Silence Ltd for a cash consideration of $1,000,000. At that date, the financial statements of Silence Ltd showed the following information.

Share Capital                650,000

General Reserve           20,000

Retained Earning           250,000

All the assets and liabilities of Silence Ltd were recorded at amounts equal to their fair values at the acquisition date, except some equipment recorded at $50,000 below its fair value with a related accumulated depreciation of $80,000. Silence Ltd accounted for all its property, plant and equipment in its own books using the cost model. In addition, Patience Ltd identified at acquisition date a contingent liability related to a lawsuit where Silence Ltd was sued by a former supplier and attached a fair value of $40,000 to that liability.

Required:

1. Prepare the acquisition analysis at 1 July 2017.

2. Prepare the consolidation worksheet entries for Patience Ltd’s group at 1 July 2017.

Think up a company you would like to start.   Then, choose an organizational type.   Assume the company will start on January 1st, 2020.   Create 10 transactions for the year 2020.   Please make sure you use entries which affect equity, revenue, expenses, assets and liabilities.   You can draw the "T" accounts or you can describe the affect of the transactions on the financial statement. Then, show the income statement, the balance sheet and the statement of equity for the year ending 12/31/2020.  

Any company or organization is fine!

Buzz Bee Yard Company’ Apiary began operations on January 1, 2020, with the purchase of 100 bee hives for $500 total. Buzz follows IFRS and its standard on agricultural products. It has completed the first year of operations and has the following information for its bee hives at December 31, 2020:

1. Bee Hives – purchase of hives as per above                                                                 $   500
2. Honey harvested during 2020 (at net realizable value)                                         1,900                  
3. Honey sold during 2020 (at net realizable value)                                                    1,600
4. Hive maintenance costs directly traceable to hive activity in year                      $60        
5. Company general administration costs                                                                           $40
6. Fair value on Dec. 31, 2020 of hives                                                                              $1,300    

Required:

1. Prepare all the journal entries for Buzz’s bee hives activities for 2020, as per the information in (a) to (f).

On 1 March 2020 Holmes Ltd enters into a binding agreement with a New Zealand company, which requires the New Zealand Company to construct an item of machinery for Holmes Ltd. The cost of the machinery is NZ$750,000. The machinery is completed on 1 June 2021 and shipped FOB Auckland on that date. The debt is unpaid at 30 June 2020, which is also Holmes Ltd’s reporting date. The exchange rates at the relevant dates are:

1 March 2020 A$1.00 = NZ$1.20

30 June 2020 A$1.00 = NZ$1.30

1 June 2021 A$1.00 = NZ$1.25

Required:

a) Determine the amount in AUD, as at: • 1 March 2020; and • 30 June 2020.

b) Prepare the journal entries for the above dates, up to 1 June 2021,showing the amount of exchange gain or loss

Pronghorn Mining Company purchased land on February 1, 2020, at a cost of $996,100. It estimated that a total of 51,900 tons of mineral was available for mining. After it has removed all the natural resources, the company will be required to restore the property to its previous state because of strict environmental protection laws. It estimates the fair value of this restoration obligation at $93,600. It believes it will be able to sell the property afterwards for $104,000. It incurred developmental costs of $208,000 before it was able to do any mining. In 2020, resources removed totaled 25,950 tons. The company sold 19,030 tons.

Compute the following information for 2020.

Suppose that you are part of the Management team at Porsche. Suppose that it is the end of December

2019 and a novel coronavirus that causes a respiratory illness was identified in Wuhan City, Hubei

Province, China. The illness was reported to the World Health Organization and there is heightened

uncertainty around the Globe.

You (as part of the management team) are reviewing Porsche’s hedging strategy for the cash flows it

expects to obtain from vehicle sales in North America during the calendar year 2020. Assume that

Porsche’s management entertains three scenarios:

Scenario 1 (Expected): The expected volume of North American sales in 2020 is 35,000 vehicles.

Scenario 2 (Pandemic): The low-sales scenario is 50% lower than the expected sales volume.

Scenario 3 (High Growth): The high-sales scenario is 20% higher than the expected sales volume.

Assume, in each scenario, that the average sales price per vehicle is $85,000 and that all sales are

realised at the end of December 2020. All variable costs incurred by producing an additional vehicle to

be sold in North America in 2020 are billed in euros (€) and amount to €55,000 per vehicle. Shipping

an additional vehicle to be sold in North America in 2020 are billed in € and amount to €3,000 per

vehicle.

The current spot exchange rate is (bid-ask) $1.11/€ - $1.12/€ and forward bid-ask is $1.18/€ - $1.185/€.

The option premium is 2.5% of US$ strike price, and option strike price is $1.085/€. Your finance team

made the following forecasts about the exchange rates at the end of December 2020:

• bid-ask will be $1.45/€ - $1.465/€ if the investors (and speculators) consider the euro (€) a safe

haven currency during the pandemic.

• bid-ask will be $0.88/€-$0.90/€ if the investors (and speculators) consider the U.S. dollar ($) a

safe haven currency during the pandemic

1. As the CFO, you decided to hedge using option contracts. Assuming expected final sales

volume is 35,000, what are your total revenue and the percentage revenue from hedging

(compared to no hedging) (do not use any variable costs to calculate in this question)

a) if the exchange rate (bid-ask) remains at $1.11/€ - $1.12/€?

b) if the investors consider the U.S. dollar a safe haven currency during the pandemic?

2. Assume that the Scenario 2 (Pandemic) took place in 2020 and the euro became a safe haven

currency during the pandemic. What are your euro cash flows if you did not hedge, hedged

using forward contracts, and hedged using option contracts?