On July 1, 2019, the City of Belvedere accepted a gift of cash in the amount of $3,500,000 from a number of individuals and foundations and signed an agreement to establish a private-purpose trust. The $3,500,000 and any additional gifts are to be invested and retained as principal. Income from the trust is to be distributed to community nonprofit groups as directed by a Board consisting of city officials and other community leaders. The agreement provides that any increases in the market value of the principal investments are to be held in trust; if the investments fall below the gift amounts, then earnings are to be withheld until the principal amount is re-established. The following events and transactions occurred during the fiscal year ended June 30, 2020. Record them in the Belvedere Community Trust Fund: On July 1, the original gift of cash was received. On August 1, $2,500,000 in XYZ Company bonds were purchased at par plus accrued interest ($41,667). The bonds pay an annual rate of 5 percent interest semiannually on April 1 and October 1. On August 2, $900,000 in ABC Company common stock was purchased. ABC normally declares and pays dividends semiannually, on January 31 and July 31. On October 1, the first semiannual interest payment ($62,500) was received from XYZ Company. Note that part of this is for accrued interest due at the time of purchase; the remaining part is an addition that may be used for distribution. On January 31, a cash dividend was received from ABC Company in the amount of $25,000. On March 1, the ABC stock was sold for $921,000. On the same day, DEF Company stock was purchased for $945,000. On April 1, the second semiannual interest payment was received from XYZ Company. During the month of June, distributions were approved by the Board and paid in cash in the amount of $82,500. Administrative expenses were recorded and paid in the amount of $5,500. An accrual for interest on the XYZ bonds was made as of June 30, 2020. As of June 30, 2020, the fair value of the XYZ bonds, exclusive of accrued interest, was determined to be $2,503,000. The fair value of the DEF stock was determined to be $941,000. Closing entries were prepared. Required: a. The above events and transactions occurred during the fiscal year ended June 30, 2020. Record them in the Belvedere Community Trust Fund. b. Prepare (1) a Statement of Changes in Fiduciary Net Position for the Belvedere Community Trust Fund and (2) a Statement of Fiduciary Net Position.

Adidas Inc is a start up company and is gradually growing big and doing well.It needs additional capital.Imagine yourself as the CEO of Adidas and answer the following questions:

1. How do you plan to raise 10 Billion dollar for this company.

2. Draw up the liability section of this imaginary Balance Sheet .(please format in vertical format)

Adidias Inc is a start up company and is gradually groeing big and doing well.It needs additional capital.Imagine yourself as the CEO of Adidas and answer the following questions:

1. How do you plan to raise 10 BN dollar for this company.

2. Draw up the liability section of this imaginary Balance Sheet .(please format in vertical format)

BUSINESS FINANCE

Question 1

As companies grow in size, it is inevitable for the shareholders to hire management to run the operations of the business. The entire team of

management, starting from the CEO and other top-level management, all the way to the middle and bottom level management are expected to

perform towards the growth of the business. Since the shareholders of large companies are scattered across geographies, they appoint certain

members as representatives who are elected to represent them on the company board. The board of directors of a company, along with the

Chairman, are expected to keep the actions of the management in check.

Explain the above in context of agency theory and corporate governance. What can companies do to ensure adequate corporate governance?

BUSINESS FINANCE

Question 1

As companies grow in size, it is inevitable for the shareholders to hire management to run the operations of the business. The entire team of

management, starting from the CEO and other top-level management, all the way to the middle and bottom level management are expected to

perform towards the growth of the business. Since the shareholders of large companies are scattered across geographies, they appoint certain

members as representatives who are elected to represent them on the company board. The board of directors of a company, along with the

Chairman, are expected to keep the actions of the management in check.

Explain the above in context of agency theory and corporate governance. What can companies do to ensure adequate corporate governance?

On January 1, 2014, Paterson Company purchased 70% of the common stock of Smith Company for $420,000. At that time, Smith’s stockholders’ equity consisted of $80,000 of Common stock, $60,000 of Other contributed capital, and $240,000 of Retained earnings. Any difference between implied and book value relates to Smith’s land. Paterson uses the cost method to record its investment in Smith. Its fiscal year ends on December 31. Additional information for both companies for 2020 follows:

Required:

A)Prepare all the necessary eliminating entries on a consolidated statements workpaper on 12/31/2020.

B) Calculate the consolidated net income for 2020.

C) Calculate the non controlling interest in net income for 2020.

The following data were taken from the records of Colbern Company for the fiscal year ending on July 31, 2020.

Raw Material Inventory 8/1/2019 $19,200

Raw Material Inventory 7/31/2020 $15,840

Finished Goods Inventory 8/1/2019 $38,400

Finished Goods Inventory 7/31/2020 $30,360

Work In Process Inventory 8/1/2019 $7,920 \

Work In Process Inventory 7/31/2020 $7,440

Direct Labor $55,700

Indirect Labor $9,784

Accounts Receivable $10,800

Factory Insurance $1,840

Factory Machinery Depreciation $6,400

Factory Utilities $11,040

Office & Admin Utilities Expense $3,460

Office & Admin Equipment Depreciation $2,120

Sales Revenue $213,600

Plant Manager's Salary $23,200

Factory Property Taxes $3,840

Indirect Materials $3,720

Raw Materials Purchases $38,560

Cash $12,800

Income Taxes for the Colbern Company are 35%

Prepare Colbern’s schedule of cost of goods manufactured for the year.

Prepare Colbern’s schedule of cost of goods sold for the year.

Prepare Colbern’s Income Statement for the year.

Exercise 20-23 (Algo) Error correction; three errors [LO20-6]

Below are three independent and unrelated errors.

1. On December 31, 2020, Wolfe-Bache Corporation failed to accrue salaries expense of $2,300. In January 2021, when it paid employees for the December 27–January 2 workweek, Wolfe-Bache made the following entry:
   

2. On the last day of 2020, Midwest Importers received a $100,000 prepayment from a tenant for 2021 rent of a building. Midwest recorded the receipt as rent revenue. The error was discovered midway through 2021.
3. At the end of 2020, Dinkins-Lowery Corporation failed to accrue interest of $9,000 on a note receivable. At the beginning of 2021, when the company received the cash, it was recorded as interest revenue.

Required:
For each error:

1. What would be the effect of each error on the income statement and the balance sheet in the 2020 financial statements?

error A

error B

error C

2. Prepare any journal entries each company should record in 2021 to correct the errors.

1. Taxpayer (“T”) a 59 year-old calendar year individual taxpayer purchased an annuity from an insurance company for $100,000 in 2019. The terms of the annuity were that the company would pay T $5,000 a year to T for the rest of T’s life. How much income will T include in T’s personal income tax return as a result of receiving the $5,000 payment

in 2020?   _____________

In 2050? ______________