^{Here are the trial balances for the Plenty Company
and the Scarce Company just before the books were
closed on December 31, 2019. Fair market values for
selected Scarce Company accounts are shown.
PlentyCo ScarceCo Scarceco
Trial Trial Fair Mkt
Balance Balance Values
Current assets 170,000 65,000 75,000
Noncurrent assets (net) 255,000 105,000 140,000
Liabilities (65,000) (45,000) (45,000)
Common Stock (Par) $20 (300,000)
Common Stock (Par) $40 (60,000)
Additional paid in capital (10,000) (20,000)
Retained earnings 1/1/19 (60,000) (25,000)
Revenues (110,000) (90,000)
Expenses 120,000 70,000
On December 31, 2019, Plenty Company purchased 100% of
Scarce Company's stock by issuing 4,500 shares of its own stock and
paying $100,000 cash. On that date, the market value of Plenty
Company's stock was $30 per share.
There were no combination costs or stock issuance costs.
Scarce Company was dissolved immediately after the takeover
and no longer existed independently.
Make all necessary journal entries in Plenty Company's records
to recognize this acquisition.}

Prepare the adjusted trial balance on December 31, 20X6. Attach your response in an excel or word file.

Questions 4 through 10 are based on the following December 31, 20X6 year-end account balances for XYZ Co. after adjusting entries had been prepared but before the books were closed for the year.                                                 

                Cash……………..…………………………….250,000

                Accounts receivable…………………….……..680,000

                Marketable securities…………………………...60,000

                Prepaid insurance……………………………….35,000

                Prepaid rent….………………………………….30,000

                Office equipment…………………………….....620,000

                Accumulated depreciation: equipment………...200,000

                Land……………………………………………750,000

                Accounts payable………………………………306,000

                Dividends payable……………………………… 50,000

                Interest payable…………………………………... 8,750

                Income tax payable……………………………...30,000

                Unearned client service revenue………………..180,000

                Notes payable (long-term).……………………..350,000

                Common stock………………………………….750,000

                Retained earnings….…………………………....315,200

                Dividends…………………………………….......75,000

                Client service revenue………………………...1,200,000

                Travel expense………………………………..…..28,000

                Office supplies expense…………………………..20,000

                Advertising expense………………………………45,000

                Salary expense…………………………………...400,000

                Utility expense………………………………….....40,000

                Depreciation expense: equipment…………………25,000

                Interest expense……………………………….…...17,500

                Insurance expense……………………………….....52,000

                Rent expense……………………………………..175,000

                Income tax expense………………………………..87,450

The working assumption in the company is that customers spend on average $300 on the company's services. Recently, you started to suspect that things maybe not going to well and that your customers are not spending as much as they did. Set the null and alternative hypotheses that would reflect your concern and then test them at the 5% level of significance using the data in the After_Class_Assignment_Data Excel file.

AIM Inc. showed the following equity account balances on the December 31, 2019, balance sheet:

During 2020, the following selected transactions occurred:

Required:
a. Journalize the transactions above (assuming the retirements were the first ever recorded by AIM Inc.). The company does not use a share dividends account. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

b. Prepare the equity section on the December 31, 2020, balance sheet.

AIM Inc. showed the following equity account balances on the December 31, 2019, balance sheet:

During 2020, the following selected transactions occurred:

Required:
a. Journalize the transactions above (assuming the retirements were the first ever recorded by AIM Inc.). The company does not use a share dividends account. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

b. Prepare the equity section on the December 31, 2020, balance sheet.

Steiner College’s statement of financial position for the year ended June 30, 2019, is presented here. Steiner is a private college.

The following transaction information (amounts in thousands) pertains to the year ended June 30, 2020.

1. During the year, charges for tuition and fees were $244,500; scholarships were $16,300; and tuition waivers for scholastic achievement were $5,100. After payment was received, tuition refunds of $11,200 were given. Tuition waivers of $17,300 for students serving as teaching assistants for instruction were accrued.
2. The college received cash contributions without donor restrictions of $2,080, pledges to be collected in 2021 of $550, and cash contributions to the endowments of $335. It also collected $820 of Pledges Receivable that were unrestricted.
3. Collections on Tuition and Fees Receivable totaled $222,600.
4. Net deposits returned to students totaled $10.
5. Expenses were incurred for:

Related to the expenses incurred: prepaid assets of $534 were used, $4,776 of the expenses were accrued, and the remaining expenses were paid. Expenses incurred resulted in the release of $7,320 in net assets with donor restrictions.

6. The ending balance in Accounts Payable and Accrued Liabilities was $1,935.
7. Investment earnings received for the period were $3,960, of which $2,070 was donor restricted for scholarships.
8. Adjusting entries for the period were made to increase Allowance for Doubtful Accounts by $20, to record depreciation expense of $26,400 (charged 70 percent to instruction and 30 percent to academic support), to adjust tuition revenue for an increase in unearned revenue of $10, and to recognize an increase in fair value of investments of $4,700 ($790 was related to investments restricted for scholarships, $1,610 was related to the permanent endowment, the remainder was related to net assets without donor restrictions).
9. Nominal accounts were closed.

Required

1. a-1. Prepare journal entries to record the foregoing transactions for the year ended June 30, 2020.
2. a-2. Prepare closing entry for the year ended June 30, 2020.
3. b. Prepare a statement of activities for the year ended June 30, 2020.
4. c. Prepare a statement of financial position for the year ended June 30, 2020.

What is the relationship between national saving and investment in a closed economy? Start by explaining what is a closed economy.

A country reported a nominal GDP of $115 billion in 2010 and $125 billion in 2009 and reported a GDP deflator of 85 in 2010 and 100 in 2009. What happened to real output and prices from 2014 to 2015? Please explain.

Exercise 19-04 Wildhorse Company reports pretax financial income of $76,100 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 $16,700.

2. Rent collected on the tax return is greater than rent recognized on the income statement by $22,700.

3. Fines for pollution appear as an expense of $11,100 on the income statement. Wildhorse’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.

1. Compute taxable income and income taxes payable for 2020.

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

3. Prepare the income tax expense section of the income statement for 2020, beginning with the line “Income before income taxes.” (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

4. Compute the effective income tax rate for 2020. (Round answer to 1 decimal places, e.g. 25.5%.)