Rev. Proc. 2016-40 provides safe harbor rules for transactions involving acquisition of control in certain corporate transactions. Please identify one transaction under Rev. Proc. 2016-40 and discuss why you think IRS provided safe harbor for the transaction. Rev. Proc. 2016-40 and the related provisions are discussed in the article linked below.
IRS Provides Safe Harbors for Acquisition of Control in Certain Corporate Transactions. By Alistair M. Nevius, J.D. July 15, 2016
http://www.thetaxadviser.com/news/2016/jul/acquisition-of-control-safe-harbors-corporate-transactions-201614836.html#sthash.oFagt0RR.N8VATMVE.dpuf
This is for Advanced Federal Taxation Accounting Class
In: Accounting
Nicholas Ram Corporation have a $2,400,000 "bond issue" dated
March 1, 2016 due in 15 years with an annual interest rate of 9%.
Interest is payable March 1 and September 1. On August 1, 2016, the
bond was sold for $2,496,250 plus accrued interest.
Using the straight-line method, prepare the general journal entries
for each of the following:
| a) | The issuance of the bond on August 1, 2016. | |
| b) | Payment of the semi-annual interest and the amortization of the premium on September 1, 2016. | |
| c) | Accrual of the interest and the amortization of the premium on December 31, 2016. | |
| d) | Payment of the semi-annual interest and the amortization of the premium on March 1, 2017. |
In: Accounting
Ogonquit Enterprises prepares annual financial statements and adjusts its accounts only at the end of the year. The following information is available for the year ended December 31, 2016:
| a. | Ogonquit purchased office furniture last year for $25,000. The furniture has an estimated useful life of seven years and an estimated salvage value of $4,000. |
| b. | The Supplies account had a balance of $1,200 on January 1, 2016. During 2016, Ogonquit added $12,900 to the account for purchases of supplies during the year. A count of the supplies on hand at the end of December 2016 indicates a balance of $900. |
| c. | On July 1, 2016, Ogonquit credited a liability account, Customer Deposits, for $8,800. This sum represents an amount that a customer paid in advance and that will be recognized evenly by Ogonquit over an eight-month period. |
| d. | Ogonquit rented some warehouse space on September 1, 2016, at a rate of $4,000 per month. On that date, Ogonquit debited Prepaid Rent for six months’ rent paid in advance. |
| e. | Ogonquit took out a 90-day, 6%, $30,000 note on November 1, 2016, with interest and principal to be paid at maturity. |
| f. | Ogonquit operates five days per week with an average weekly payroll of $4,150. Ogonquit pays its employees every Thursday. December 31, 2016, is a Saturday. |
Required:
| 1. | For each of the preceding situations, prepare in general journal form the appropriate adjusting entry to be recorded on December 31, 2016. |
| 2. | Assume that Ogonquit’s accountant forgets to record the adjusting entries on December 31, 2016. Will net income for the year be understated or overstated? by what amount? (Ignore the effect of income taxes.) |
In: Finance
At the end of 2016, the records of SouthCo showed the
following:
| Bonds payable 8%, non-convertible | $370,000 | |
| Preferred shares: | ||
| Class A, no-par, 70 cents, non-convertible, non-cumulative, outstanding 60,000 shares (no dividend declared) | 390,000 | |
| Class B, no-par, 50 cents, non-convertible, cumulative, outstanding 30,000 shares | 690,000 | |
| Common shares, no-par, authorized unlimited shares: | ||
| Outstanding, January 1, 2016, 168,000 shares | $1,730,000 | |
| Retired shares, August 1, 2016, 39,000 shares | (339,745) | |
| Issued, 150% stock dividend on September 1, 2016, on outstanding shares (193,500 additional shares) | 1,390,255 | |
| Retained earnings (no dividends declared) | 1,790,000 | |
| Income before discontinued operations | 147,781 | |
| Discontinued operations, net of tax | 30,350 | |
| Net income | $178,131 |
Average income tax rate, 30%.
a) Calculate the preferred dividend claims. (Use 0 when the
condition does not apply.) Please make sure your final answer(s)
are accurate to the nearest whole number.
class a
class b
b) Calculate the weighted average number of common shares (WACS). Please make sure your final answer(s) are accurate to the nearest whole number.
jan 1 2016-july 31 2016
aug 1 2016- aug 31 2016
sep 1 2016- dec 31 2016
c) Calculate the earnings per share on common shares (EPS). Please
make sure your final answer(s) are accurate to 2 decimal
places.
Earnings per share on common shares:
Income before discontinued operations
Discontinued operations
Net income
In: Accounting
Intangibles: Expense and Disclosure
Munn Inc. had the following intangible account balance at December 31, 2015:
| Patent | $168,000 |
Information relating to Munn's patent and transactions involving other intangible assets during 2016 includes the following:
Required
1. Prepare a schedule of the expenses for 2016 relating to Munn's intangible asset balances at December 31, 2015, and transactions during 2016. Enter all amounts as positive numbers.
| MUNN, INC. | |
| Schedule of Expenses Relating to Intangible Assets | |
| For the Year Ended December 31, 2016 | |
| Amortization of intangibles | |
| Patent | $ |
| Non-competition agreement | |
| Total | $ |
| Consulting fee to Cody Corporation | $ |
2. Prepare the intangible assets section of Munn's balance sheet at December 31, 2016.
| MUNN, INC. | |
| Intangible Assets Section of Balance Sheet | |
| December 31, 2016 | |
| Patent | $ |
| Trademark | |
| Non-competition agreement, net of accumulated amortization | |
| Total intangible assets | $900,000 |
In: Accounting
What is The Chinese Room thought experiment?
In: Psychology
Describe the components for doing classicial experiment?
In: Psychology
Describe an experiment using an ideal calorimeter.
In: Physics
The comparative balance sheets for Sarasota Corporation show the
following information.
| December 31 | ||||
|---|---|---|---|---|
| 2017 | 2016 | |||
| Cash | $33,100 | $13,100 | ||
| Accounts receivable | 12,300 | 9,900 | ||
| Inventory | 12,000 | 9,000 | ||
| Available-for-sale debt investments | –0– | 3,000 | ||
| Buildings | –0– | 29,700 | ||
| Equipment | 50,200 | 20,200 | ||
| Patents | 4,900 | 6,300 | ||
| $112,500 | $91,200 | |||
| Allowance for doubtful accounts | $2,900 | $4,600 | ||
| Accumulated depreciation—equipment | 2,000 | 4,600 | ||
| Accumulated depreciation—building | –0– | 6,000 | ||
| Accounts payable | 5,100 | 3,100 | ||
| Dividends payable | –0– | 5,100 | ||
| Notes payable, short-term (nontrade) | 2,900 | 3,900 | ||
| Long-term notes payable | 30,700 | 25,200 | ||
| Common stock | 47,900 | 32,900 | ||
| Retained earnings | 21,000 | 5,800 | ||
| $112,500 | $91,200 | |||
Additional data related to 2017 are as follows.
| 1. | Cash dividends paid were $5,100. | |
| 2. | Equipment that had cost $11,000 and was 40% depreciated at time of disposal was sold for $2,000. | |
| 3. | On January 1, 2017, the building was completely destroyed by a flood. Insurance proceeds on the building were $31,900. | |
| 4. | A long-term note for $20,500 was issued for the acquisition of equipment. | |
| 5. | $15,000 of the long-term note payable was paid by issuing common stock. | |
| 6. | Investments (available-for-sale) were sold at $1,700 above their cost. The company has made similar sales and investments in the past. | |
| 7. | Interest of $1,900 and income taxes of $6,600 were paid in cash. | |
| 8. | Cash was paid for the acquisition of equipment. |
Prepare a statement of cash flows using the indirect method.
(Show amounts that decrease cash flow with either a -
sign e.g. -15,000 or in parenthesis e.g.
(15,000).)
|
SARASOTA CORPORATION |
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In: Accounting