Nash Inc. reported the following pretax income (loss) and related tax rates during the years 2019–2022.

Pretax financial income (loss) and taxable income (loss) were the same for all years since Nash began business. The tax rates from 2019–2022 were enacted in 2019.

Prepare the journal entries for the years 2020–2022 to record income taxes payable (refundable), income tax expense (benefit), and the tax effects of the loss carryforward. Assume that Nash expects to realize the benefits of any loss carryforward in the year that immediately follows the loss year. (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.)

eTextbook and Media

List of Accounts

Prepare the portion of the income statement, starting with “Operating loss before income taxes,” for 2020. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

eTextbook and Media

List of Accounts

Prepare the portion of the income statement, starting with “Income before income taxes,” for 2021. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Financial Accounting Standards Board (FASB 2008).  Statement of Financial Accounting Standards No. 57 Related Party Disclosures.

Financial Accounting Standards Board (FASB 2020).  Accounting Standards Codification 850 Related-Party Transaction.

Nurnberg, Hugo and Thomas F. Schaefer (2010).  Integrative Case in Advanced Accounting. Issues in Accounting Education 25, No. 2, 323–329.

1. How useful is Modern Cardiology’s income statement as presented in Exhibit 1 in resolving this income-sharing dispute?

2. What are its limitations?

3. Does it conform to U.S. generally accepted accounting principles (GAAP)?  Cite the standards including paragraph numbers to support your answer.

4. What is the appropriate entity for assessing the reasonableness of Modern Cardiology’s income distribution and profitability?

5. What is the appropriate entity for assessing the reasonableness of Technology Properties’ income distribution and profitability?

Problem 7-42 (LO 7-2) (Algo)

[The following information applies to the questions displayed below.]

Dahlia is in the 32 percent tax rate bracket and has purchased the following shares of Microsoft common stock over the years:

If Dahlia sells 1,070 shares of Microsoft for $63,130 on December 20, 2020, what is her capital gain or loss in each of the following assumptions? (Do not round intermediate calculations.)

Problem 7-42 Part-a (Algo)

a. She uses the FIFO method.

b. She uses the specific identification method and she wants to minimize her current-year capital gain.

Ancelotti, Inc. is a calendar-year corporation. Its financial statements for the years 2011 and 2010 contained errors as follows:

1) Ending Inventory for 2011 is overstated by $3,000

2) Ending Inventory for 2010 is overstated by $8,000

3) Salaries expense for 2011 is understated by $2,000

4) Salaries expense for 2010 is overstated by $6,000

No correcting entries were made at December 31, 2010. Assuming no taxes, by how much will retained earnings at December 31, 2011 be overstated or understated?

a. $1,000 understated b. $5,000 overstated c. $5,000 understated d. $9,000 understated

The answer is a. $1,000 but I need an explanation because I do not know how to solve this question, thanks.

On Jan 1, 2010, the Michael-book Company adopted the dollar-value LIFO method for its one inventory pool. The pool's value on this date was $600,000. The 2010 and 2011 ending inventory valued at year-end costs were $690,000 and 714,960 respectively. The appropriate cost indexes are 1.04 for 2010 and 1.08 for 2011.

1. Calculate the ending inventory balance that Michael-book will report on its Dec 31, 2010 balance sheet.

2. Calculate the ending inventory balance that Michael-book will report on its Dec 31, 2011 balance sheet.

3. Explain in 1 to 3 sentences, why the dollar-value LIFO often results in less frequent LIFO liquidations.

1. Consider the following data, answer the question below:

Calculate Real GDP in 2012

2) Given the data below calculate Nominal GDP, Real GDP, and the GDP Deflator using 2010 as the base year.

                                                      2010               2011               2012              

Nominal GDP Calculation                    _______        _______        _______

Real GDP Calculation              _______        _______        _______

GDP Deflator Calculation

A

2010

poll asked people in the United States whether they were satisfied with their financial situation. A total of

338

out of

833

people said they were satisfied. The same question was asked in

2012

, and

304

out of

1156

people said they were satisfied.

Part 1 of 2

Your Answer is correct

(a) Construct a

99.8%

confidence interval for the difference between the proportions of adults who said they were satisfied in

2012

and

2010

. Let

p1

denote the proportion of adults who said they were satisfied in

2010

.Use tables to find the critical value and round the answer to at least three decimal places.

A

99.8%

confidence interval for the difference between the proportions of adults who said they were satisfied in

2012

and

2010

is  

<0.077<−p1p20.209.

Part: 1 / 2

1 of 2 Parts Complete

Part 2 of 2

(b) A sociologist claims that the proportion of people who are satisfied increased from  

2010

to  

2012

by more than

0.22

. Does the confidence interval contradict this claim?

Sunland Co. began operations on January 2, 2020. It employs 17 people who work 8-hour days. Each employee earns 10 paid vacation days annually. Vacation days may be taken after January 10 of the year following the year in which they are earned. The average hourly wage rate was $20 in 2020 and $21.75 in 2021. The average vacation days used by each employee in 2021 was 9. Sunland Co. accrues the cost of compensated absences at rates of pay in effect when earned.

Prepare journal entries to record the transactions related to paid vacation days during 2020 and 2021

1. On April 1, 2020, Sydney Company issued 300 $1,000 bonds at 98. Each bond was issued with two detachable stock warrants. Shortly after issuance, the bonds were selling at 96, and the warrants were selling for $50 each.

Instructions:

Prepare the entry to record the issuance of the bonds and warrant

2.

The Cinci Company issues $100,000, 10% bonds at 103 on April 1, 2020. The bonds are dated January 1, 2020 and mature six years from that date. Straight-line amortization is used. Interest is paid annually each December 31. Compute the bond carrying value as of December 31, 2023.

Answer

$_______________