Prior to 2019, the accounting income and taxable income for Sunland Corporation were the same. On January 1, 2019, the company purchased equipment at a cost of $468,000. For accounting purposes, the equipment was to be depreciated over 9 years using the straight-line method. For income tax purposes, the equipment was subject to a CCA rate of 20% (half-year rule applies for 2019). Sunland’s income before tax for accounting purposes for 2020 was $1,895,000. The company was subject to a 25% income tax rate for all applicable years and anticipated profitable years for the foreseeable future. Sunland Corporation follows IFRS.

Calculate taxable income and taxes payable for 2020.

Prepare the journal entries to record 2020 income taxes (current and deferred). (Credit account titles are automatically indented when the 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.)

On January 1, 2020, Flounder Company issued 10-year, $2,060,000 face value, 6% bonds, at par. Each $1,000 bond is convertible into 15 shares of Flounder common stock. Flounder’s net income in 2020 was $459,000, and its tax rate was 20%. The company had 108,000 shares of common stock outstanding throughout 2020. None of the bonds were converted in 2020.

(a) Compute diluted earnings per share for 2020. (Round answer to 2 decimal places, e.g. $2.55.)

(b) Compute diluted earnings per share for 2020, assuming the same facts as above, except that $1,080,000 of 6% convertible preferred stock was issued instead of the bonds. Each $100 preferred share is convertible into 5 shares of Flounder common stock. (Round answer to 2 decimal places, e.g. $2.55.)

On January 1, 2020, Pearl Company issued 10-year, $2,020,000 face value, 6% bonds, at par. Each $1,000 bond is convertible into 16 shares of Pearl common stock. Pearl’s net income in 2020 was $475,300, and its tax rate was 20%. The company had 97,000 shares of common stock outstanding throughout 2020. None of the bonds were converted in 2020. (a) Compute diluted earnings per share for 2020. (Round answer to 2 decimal places, e.g. $2.55.) Diluted earnings per share $enter diluted earnings per share rounded to 2 decimal places (b) Compute diluted earnings per share for 2020, assuming the same facts as above, except that $970,000 of 6% convertible preferred stock was issued instead of the bonds. Each $100 preferred share is convertible into 5 shares of Pearl common stock. (Round answer to 2 decimal places, e.g. $2.55.) Diluted earnings per share $enter diluted earnings per share rounded to 2 decimal places

On January 1, 2020, Sweet Company issued 10-year, $2,060,000 face value, 6% bonds, at par. Each $1,000 bond is convertible into 15 shares of Sweet common stock. Sweet’s net income in 2020 was $535,600, and its tax rate was 20%. The company had 103,000 shares of common stock outstanding throughout 2020. None of the bonds were converted in 2020.

(a) Compute diluted earnings per share for 2020. (Round answer to 2 decimal places, e.g. $2.55.)

(b) Compute diluted earnings per share for 2020, assuming the same facts as above, except that $1,030,000 of 6% convertible preferred stock was issued instead of the bonds. Each $100 preferred share is convertible into 5 shares of Sweet common stock. (Round answer to 2 decimal places, e.g. $2.55.)

On January 1, 2020, Carla Company issued 10-year, $1,980,000 face value, 6% bonds, at par. Each $1,000 bond is convertible into 15 shares of Carla common stock. Carla’s net income in 2020 was $479,400, and its tax rate was 20%. The company had 102,000 shares of common stock outstanding throughout 2020. None of the bonds were converted in 2020.

(a) Compute diluted earnings per share for 2020. (Round answer to 2 decimal places, e.g. $2.55.)

(b) Compute diluted earnings per share for 2020, assuming the same facts as above, except that $1,020,000 of 6% convertible preferred stock was issued instead of the bonds. Each $100 preferred share is convertible into 5 shares of Carla common stock. (Round answer to 2 decimal places, e.g. $2.55.)

At the beginning of 2020, Cameron Company's retained earnings was $212,000. For 2020, Cameron has calculated its pretax income from continuing operations to be $120,000. During 2020, the following events also occurred:

1. During July, Cameron sold Division M (a component of the company). The book values of Division M’s assets and liabilities are $300,000 and $100,000, respectively, at the time of

sale. The company sold Division M for cash $159,500. During 2020 before its sale, Division M recognized revenues of 100,000 and expenses of 61,000 (excluding income tax expense).

2. Cameron had 21,000 shares of common stock outstanding during all of 2020. It declared and paid a $1 per share cash dividend on this stock.

3. Cameron also paid $7,500 cash dividend to its preferred stockholders.

Required:

Assuming that all the “pretax” items are subject to a 21% income tax rate:

1. Complete the lower portion of Cameron's 2020 income statement, beginning with “Pretax

Income from Continuing Operations.”

2. Prepare an accompanying retained earnings statement.

Assume that the following data relative to Kane Company for 2020 is available:

Net Income                                                                                                                                                                                                                $2,100,000

8% Cumulative Convertible Preferred Stock

Sold at par, convertible into 200,000 shares of common

(adjusted for split).    $1,000,000

Stock Options

Exercisable at the option price of $25 per share. The average

market price in 2020, $30 (market price and option price

adjusted for split). 60,000 shares

Instructions

(a)   Compute the basic earnings per share for 2020 (Round to the nearest penny).

(b)   Compute the diluted earnings per share for 2020 (Round to the nearest penny).

On January 1, 2019, Halstead, Inc., purchased 71,000 shares of Sedgwick Company common stock for $1,485,000, giving Halstead 25 percent ownership and the ability to apply significant influence over Sedgwick. Any excess of cost over book value acquired was attributed solely to goodwill.

Sedgwick reports net income and dividends as follows. These amounts are assumed to have occurred evenly throughout these years. Dividends are declared and paid in the same period.

On July 1, 2021, Halstead sells 11,360 shares of this investment for $27 per share, thus reducing its interest from 25 to 21 percent, but maintaining its significant influence.

Determine the amounts that would appear on Halstead’s 2021 income statement relating to its ownership and partial sale of its investment in Sedgwick’s common stock. (Round your intermediate calculations to the nearest whole number.)

As total income accrual (no unearned gains):

As gains on sales of shares:

Lessor leasing company agrees to lease equipment to Lessee corp. on Jan 1, 2019, both Lessor and Lessee follows IFRS. The following information relates to the lease agreement:

1. the lease term is 7 years, no renewal,
2. Lessor acquired the equipment this day Jan 1, 2019 for $560,000 cash, the useful life 10 years
3. at the end of the term the equipment to be returned to the lessor with guaranteed residual value of $40,000
4. the lease agreement require annual rental payments beginning of Jan 1 each yaer
5. Lessor charges 10% on all it is transactions and it is the same rate that Lessee can borrow from there Bank.

Instructions:

Considering this as Financing type (Capital) Lease, answer the following questions:

1. Calculate the amount of the annual rental (lease) payment
2. If Dec 31 is the fiscal year end for Lessee co., prepare the journal entries that Lessee would make in 2019 and 2020, Lessee did not use reversing entries
3. From the information you have calculated and recorded, identify all balances related to the lease that would be reported on Lessee Balance sheet on Dec 31,2020

Bayler leasing company agrees to lease equipment to Lion corp. on Jan 1, 2019, both Bayler and Lion follow IFRS. The following information relates to the lease agreement:

1. the lease term is 7 years, no renewal,
2. Bayler acquired the equipment this day Jan 1, 2019 for $560,000 cash, the useful life 10 years
3. at the end of the term the equipment to be returned to the Bayler with guaranteed residual value of $40,000
4. the lease agreement require annual rental payments beginning of Jan 1 each yaer
5. Bayler charges 10% on all it is transactions and it is the same rate that Lion can borrow from their Bank.

Questions:

Considering this as Financing type (Capital) Lease, answer the following questions:

1. Calculate the amount of the annual rental (lease) payment
2. If Dec 31 is the fiscal year end for Lion co., prepare the journal entries that Lion would make in 2019 and 2020, Lion did not use reversing entries
3. From the information you have calculated and recorded, identify all balances related to the lease that would be reported on Lion Balance sheet on Dec 31,2020