At the beginning of 2020, Brown Corporation had the following stockholders’ equity balances in its general ledger:

The paid-in capital from stock options relates to options granted on 1/1/18 to the CEO as incentive compensation. As of 1/1/20, the remaining expected benefit period is four years; expense has been and will be recorded evenly over the benefit period.

The following events were among the many occurring in 2020:

1. January 2: Purchased 5,000 shares of its common stock for $15 per share. Brown uses the cost method of accounting for treasury stock transactions.

2. February 1: Declared and paid a cash dividend of $2 per share on the outstanding common stock.

3. April 1: Issued 20,000 shares of $50 par, noncumulative, convertible 6% preferred stock for $60 per share, where one share of preferred stock is convertible into three shares of common stock.

4. July 1: 2,000 shares of treasury stock that had been purchased in a prior year for $18 per share were re-issued for $10 per share.

5. August 1: Holders of 6,000 shares of the preferred stock converted their shares into common stock when the market value of the common stock was $22 per share. Brown uses the book value method of accounting for conversions.

6. October 1: Declared and distributed a 1% stock dividend on common stock outstanding when the market price of the stock was $24 per share.

7. November 1: Corrected an error that was made several years ago, when land that had been purchased for $60,000 was inadvertently expensed.

8. December 1: Declared and distributed a property dividend of land to preferred shareholders. The land had a fair value of $60,000 and a carrying value of $75,000.

1. December 31: Recorded 2020 compensation expense related to the stock options.

The 2020 Final Net Income, including the effects of any net income items listed above (and the 2020 tax effects on net income items), was $700,000. There were 500,000 shares authorized for both preferred and common stock.

(OVER)

Required:                                                                                                                                            

1. All journal entries for the items (a. through i.) above. No explanations.  Ignore tax effects.
2. The 12/31/20 Stockholders’ Equity section. Use the format from the Frost Company example in Chapter 15 of the text. Include parenthetical disclosures for preferred stock and common stock.

Wildhorse Corporation had 118,000 common shares outstanding on December 31, 2019. During 2020, the company issued 14,000 shares on March 1, retired 6,500 shares on July 1, issued a 20% stock dividend on October 1, and issued 21,300 shares on December 1. For 2020, the company reported net income of $472,000 after a loss from discontinued operations of $67,600 (net of tax). The company issued a 2-for-1 stock split on February 1, 2021, and the company’s financial statements for the year ended December 31, 2020, were issued on February 28, 2021.

QUESTION:

Calculate earnings per share for 2020 as it should be reported to shareholders. (Round answer to 2 decimal places)

Discuss ethics and trust as critical aspects for sustainable business and suggest how you would instill these if you were a CEO of an international company

XYZ Company recorded the following information related to their inventory
accounts for 2020:

                          January 1, 2020        December 31, 2020
Direct materials               31,000                   50,000
Work in process                38,000                   41,000
Finished goods                 22,000                   34,000

The following information was taken from XYZ Company's accounting records
for 2020:

Sales revenue ...........................................   $630,000
Direct materials purchased ..............................       ?
Depreciation, factory equipment .........................     34,000
Prime costs .............................................    250,000
Utilities (60% for factory; 40% for office building) ....     20,000
Sales commissions .......................................     71,000
Indirect materials ......................................       ?
Depreciation, office equipment ..........................     30,000
Rent, factory building ..................................     56,000
Net income ..............................................     10,000
Direct labor ............................................       ?
Advertising .............................................     68,000
Production supervisor's salary ..........................     74,000

Additional information:

1.  Direct labor comprised 35% of the conversion costs for 2020.

2.  The actual overhead cost for 2020 was equal to the overhead applied
    to production. Thus there was no overhead variance for 2020.

Calculate XYZ Company's indirect materials cost for 2020.

XYZ Company recorded the following information related to their inventory
accounts for 2020:

                          January 1, 2020        December 31, 2020
Direct materials               31,000                   50,000
Work in process                38,000                   41,000
Finished goods                 22,000                   34,000

The following information was taken from XYZ Company's accounting records
for 2020:

Sales revenue ...........................................   $630,000
Direct materials purchased ..............................       ?
Depreciation, factory equipment .........................     34,000
Prime costs .............................................    250,000
Utilities (60% for factory; 40% for office building) ....     20,000
Sales commissions .......................................     71,000
Indirect materials ......................................       ?
Depreciation, office equipment ..........................     30,000
Rent, factory building ..................................     56,000
Net income ..............................................     10,000
Direct labor ............................................       ?
Advertising .............................................     68,000
Production supervisor's salary ..........................     74,000

Additional information:

1.  Direct labor comprised 35% of the conversion costs for 2020.

2.  The actual overhead cost for 2020 was equal to the overhead applied
    to production. Thus there was no overhead variance for 2020.

Calculate XYZ Company's indirect materials cost for 2020.

A company wants to evaluate its main strategy which is cost-leadership. The CEO needs 4 criteria for evaluation purposes. What are the 4 criteria required to make sure it is the best strategy for the company and it has no flaw?   

Which of the following items is nottaxable income of a New Zealand tax resident? why is correct and why are not correct? a)         Sale of a home that has been inhabited by the owner for 15 years and was not acquired with the intention of sale.

(b)       Wages from a part time job working in a bar.

(c)       Dividend income from an Australian listed company.

(d)       Sales proceeds from selling flowers in a florist shop.

For the year ended Dec 31, 2021, Arndt Inc. reported pretax accounting income of $700 million. Select information is listed below: 1) The company begins selling one-year subscriptions to a weekly journal. Subscription sales collected and taxable in 2021 were $530 million. Subscriptions included in 2021 for financial reporting revenues were $470 million. 2) In 2020, the company purchased a piece of equipment with a cost of $500 million. For financial reporting purposes, the company used the straight-line method over a 5-year service life with no residual value expected. For tax purposes, the equipment was scheduled to be depreciated by $180 million, $150 million, $100 million, $50 million and $20 million in years 2020 through 2024, respectively. 3) During 2021, the company prepaid an insurance for year 2022 in the amount of $60 million. The insurance payment is tax deductible in 2021. 4) In 2021, the company paid $100 million fines to settle trading misconduct allegations brought by the US government. The fines are non tax deductible. Arndt Inc.’s income tax rate is 30%. At January 1, 2021, the company had a deferred tax liability of $24 million and no deferred tax asset.

Required: a) What is taxable income for 2021?

b) What is the ending balance of DTL on 12/31/2021?

c) What is the ending balance of DTA on 12/31/2021?

d) Prepare journal entries to record income taxes in 2021.

e) What are current income tax expense and total income tax expense for year 2021?

ABC Energy Corp. (the “Company”), an SEC registrant, operates three manufacturing facilities in the United States. The Company manufactures various household cleaning products at each facility, which are sold to retail customers. The U.S. government granted the Company emission allowances (EAs) of varying useable years (i.e., the years in which the allowance may be used) to be used between 2015 and 2030. Upon receipt of the EAs, the Company recorded the EAs as intangible assets with a cost basis of zero, in accordance with the Federal Energy Regulatory Commission (FERC) accounting guidance for EAs. The Company has a fiscal year end of December 31.

As background, in an effort to control or reduce the emission of pollutants and greenhouse gases, governing bodies typically issue rights or EAs to entities to emit a specified level of pollutants. Each individual EA has a useable year designation. EAs with the same useable year designation are fungible and can be used by any party to satisfy pollution control obligations. Entities can choose to buy EAs from, and sell EAs to, other entities. Such transactions are typically initiated through a broker. At the end of a compliance period, participating entities are required to either (1) deliver to the governing bodies EAs sufficient to offset the entity's actual emissions or (2) pay a fine. The Company currently emits a significant amount of greenhouse gases because of its antiquated manufacturing facilities. The Company plans to upgrade its facilities in 2024, which will decrease greenhouse gas emissions to a very low level. On the basis of the timing of the upgrade, the Company currently anticipates a need for additional EAs in fiscal years 2020–2024.

However, upon completion of the upgrade, the Company believes it will have excess EAs in fiscal years subsequent to 2024 because of reduced emissions as a result of the upgrade. The Company currently has forecasted the updates to its facilities will cost approximately $15 million. As the Company operates in a capital intensive industry, analysts and investors focus on a number of important ratios and measures, including working capital, capital expenditures, cash flows from operations, and free cash flow. As a result, the board of directors and management provide forward-looking guidance on these ratios and measures and expend great effort managing these results in light of the Company’s operational needs. The Company entered into the following two separate transactions in fiscal year 2020, which will impact the Company’s results as presented in the statement of cash flows, which the Company prepares under the indirect method.

          1. To meet its need for additional EAs in fiscal years 2020–2024, on April 2,         2020, the Company spent $6.5 million to purchase EAs with a useable year of       2023 from XYZ Manufacturing Corp.

2. In an effort to offset the costs of the April 2, 2019, purchase of 2023 EAs, the Company sold EAs with a useable year of 2026 to DEF Chemical Corp. for $5 million.

Required:

1. What is the appropriate classification in the statement of cash flows in the Company’s December 31, 2020, financial statements for its purchase of 2023 EAs from XYZ Manufacturing Corp.?

2. What is the appropriate classification in the statement of cash flows in the Company’s December 31, 2020, financial statements for its sale of 2026 EAs to DEF Chemical Corp.?

3. Should these cash flows be reported at gross amounts or net amounts in the 2020 statement of cash flows?

Be sure to cite appropriate authoritative support for your answer from the Accounting Standards Codification.