The DeVille Company reported pretax accounting income on its income statement as follows:
   

   
Included in the income of 2018 was an installment sale of property in the amount of $66,000. However, for tax purposes, DeVille reported the income in the year cash was collected. Cash collected on the installment sale was $26,400 in 2019, $33,000 in 2020, and $6,600 in 2021.

Included in the 2020 income was $28,000 interest from investments in municipal bonds.

The enacted tax rate for 2018 and 2019 was 30%, but during 2019 new tax legislation was passed reducing the tax rate to 25% for the years 2020 and beyond.

Required:
Prepare the year-end journal entries to record income taxes for the years 2018–2021.

The DeVille Company reported pretax accounting income on its income statement as follows:
   

   
Included in the income of 2018 was an installment sale of property in the amount of $32,000. However, for tax purposes, DeVille reported the income in the year cash was collected. Cash collected on the installment sale was $12,800 in 2019, $16,000 in 2020, and $3,200 in 2021.

Included in the 2020 income was $11,000 interest from investments in municipal bonds.

The enacted tax rate for 2018 and 2019 was 30%, but during 2019 new tax legislation was passed reducing the tax rate to 25% for the years 2020 and beyond.

Required:
Prepare the year-end journal entries to record income taxes for the years 2018–2021.

The DeVille Company reported pretax accounting income on its income statement as follows:
   

   
Included in the income of 2018 was an installment sale of property in the amount of $44,000. However, for tax purposes, DeVille reported the income in the year cash was collected. Cash collected on the installment sale was $17,600 in 2019, $22,000 in 2020, and $4,400 in 2021.

Included in the 2020 income was $18,000 interest from investments in municipal bonds.

The enacted tax rate for 2018 and 2019 was 30%, but during 2019 new tax legislation was passed reducing the tax rate to 25% for the years 2020 and beyond.

Required:
Prepare the year-end journal entries to record income taxes for the years 2018–2021.

Pina Company provides the following information about its defined benefit pension plan for the year 2020.

Prepare the journal entry recording pension expense. (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.)

Copper Explorations recently acquired the rights to mine a new site. Equipment and a truck were purchased to begin mining operations at the site. Details of the mining assets follow:

Copper's year-end is December 31 and it uses the straight-line method for all mining assets including intangibles.

Required:
1. Record amortization and depreciation at December 31, 2020, on the mining assets, including the mineral rights.

2. Assume the mine was closed on October 31, 2023, and the assets were scrapped. Record the disposal of the assets.

Wilkins Food Products Inc. acquired a packaging machine from Lawrence Specialists Corporation. Lawrence completed construction of the machine on January 1, 2019. In payment for the machine Wilkins issued a three-year installment note to be paid in three equal payments at the end of each year. The payments include interest at the rate of 15%. Lawrence made a conceptual error in preparing the amortization schedule, which Wilkins failed to discover until 2021. As a result of the error, Wilkins understated interest expense by $50,000 in 2019 and $45,000 in 2020. Required: 1. Indicate in the table below which accounts are incorrect as a result of these errors at January 1, 2021 and whether those accounts are understated or overstated. (Ignore income taxes.) 2. Prepare a journal entry to correct the error. 3. Will Wilkins account for the error (a) retrospectively or (b) prospectively?

    2. Case Background Introduction:

    The project company is ValueVehicle (VV), which is a hypothetical electrical vehicle manufacturer. VV is a public listed company and is required to comply with all regulations from SEC and GAAP. Your group is the accounting department, and you are responsible for disclosing financial information to the SEC and the public.

    (1) Company necessary financial information

VV (formerly ValueVehicle, Inc.) is an American electric vehicle and clean energy company based in Fayetteville, North Carolina. VV's current products include electric cars (the Model 100, Model 101, and Model 102). VV was founded in July 2008. After 12 years in the market, VV earned its fame as the electric passenger car manufacturer, with a market share of 14% of the plug-in segment and 21% of the battery-electric part.

VV started its IPO in 2012 and became a public company, and it has 2 million outstanding shares. The stock market price is $100 per share on December 1, 2020. The primary financial statues (on December 1, 2020) are illustrated as follows:  

Total assets: $2 billion. Current assets: $50 million (including finished products inventory $30 million). Long-term liability: $50 million.  Current liability: $10 million. Common stock: $10 million (VV has no dilutive shares, bonds, or preferred shares).

The profit goal in 2020 is to earn $10 million net income, which also means that the targeted EPS is $5 per share. By November 30, 2020, VV has achieved $8 million net income (after tax and interest). To achieve the targeted goal, VV needs to have $2 million net income (after tax and interest, the income tax rate is 21%) in December 2020. The transactions of this month are illustrated as follows. Your team is required to record these transactions based on your professional judgment.

   (2) Please recognize the following detailed transactions and complete the journal entries. You need to make the necessary argument if the journal entries have several options.

   A. From December 1 through December 20, VV has had 1.2 million dollars transactions with a gross margin of 40%.

   B. Dealer X planned to sign a $1 million sales contract with VV in February 2021 (the gross margin is projected as 40% based on the current product information). Recently, dealer X discussed an alternative that they can sign the contract before December 31, 2020. The condition is that VV can offer a 20% discount on the sales price. VV can choose to provide the discount in December 2020, reject this contract, and wait for the deal in February 2021.

   C. Dealer Y proposed to sign a $1 million sales contract with VV before December 31, 2020, with two conditions: (1) Dealer Y can return the cars unconditionally if they cannot sell the cars before June 2021. (2) VV needs to offer a 10% discount on the sales price. The gross margin is projected as 40% based on the current product price (without the 10% discount). There is no publicly available information about how many cars Dealer Y can sell by June 2021. The representative of dealer Y predicts 10% of the cars cannot be sold by June 2021. VV can choose to offer the contract or reject this deal.

   D. On December 1, 2020, the accounting department receives the latest report from the Pilot Automation System department. The report claims that a new wireless operating system had achieved technological feasibility. VV has spent $800,000 on this system in 2020. The technological feasibility judgment is based on the company's own engineer expert group. There is no official technical criterion currently available for technological feasibility. The original goal for this Pilot Automation System is a patent, but the management now considering this system as internally developed software. VV spends $300,000 this month after passing the technological feasibility. Based on this condition, you are required to judge whether this system is a patent or software and decide to capitalize the $300,000 (the capitalization can be amortized within ten years) or record as an R&D expense.

   E. On December 10, you checked and found that VV had four debt investments in the market. The category and the fair value are listed as follows:

Company  Amount  MarketingValue (12/10/20)  Category     MaturityDate

AA       $1 million   $1.2 million        Held-to-maturity    June 2022

BB       $1 million   $1.3 million        Held-to-maturity    June 2022

CC       $1 million   $0.8 million        Trading security     July 2022

DD     $1 million   $0.9 million   Available-for-sale security  May 2022

  The CEO suggests re-categorize these investments and recognize some of the gains and losses. Please claim your decisions and explain the reasons for your argument.    

   F. VV bought $20 million in equity securities from JJ Company. The investment is 19% of the voting common stock of JJ Company, but the CFO is selected from VV. VV has some impacts on JJ Company’s decision-making. VV uses an equity approach to record this investment. The balance of the JJ investment in December 2020 is $20 million. Some managers argue that the impact is not significant and want to change the accounting approach to use fair value and recognize the investment gains. JJ Company has zero net income in 2020, but JJ’s stock price has increased to $21.4 million. Do you agree with the change and recognize the $1.4 million gains? Please clarify your reasons for your judgment.  

   G. On December 22, the accounting team is required to make a financing decision for the 2021 annual budget. VV has a $5 million budget shortage that needs financing. You have three options available for the demanding $5 million. First, VV can borrow the money from a local bank with a 12% annual interest. Second, sell $5 million treasury stocks. Third, initiate $5 million non-participatory preferred stocks with a 12% dividend ratio. Please select one option and clarify your reasons.

   H. VV decides to initiate a one million dollars stock-based compensatory plan for the C-level managers. Your team is required to make a selection from two alternatives: the first is to use compensatory stock options; the second is to use a restricted stock plan. What is your preference, and explain why you choose your selection?

    I. The administrative and selling expense in December 2020 is $300,000. Please include the eight businesses above and compute your net income and EPS. Remember to pay income tax for December income (tax rate is 21%).  

J. If your net income from the computation above is less than $2 million, you cannot meet the market expectation. You are required to explore possible solutions to help achieve this goal. Please propose one potential accounting-related business activity to meet your goal. The proposed solution needs to comply with the official regulations from GAAP, SEC, etc. Please explain your proposed transaction and present the journal entry for your transaction.

Here is a hinted example. One financial consultant advises you to sell one building to your business partners. Then you can lease back to use the following three years. The building's original value is $3 million, and the current value is $2 million (the depreciation is $1 million). The fair value of the fixed assets is $2.9 million. The lease can be operating lease for three years, and each year from 2021 is $0.3 million. The sale can add $0.9 million gains for 2020 annual net income. The journal entry is:      

            Dr: Sales                    2.9 m

              Accumulated depreciation      1 m

                  Cr: Fixed asset-building        3 m

                   Gains of fixed asset sales      0.9m  

Marmidan Mold Shop Inc. designs and builds molds for the automotive and aircraft industries. The account balances in the company’s general ledger on January 1, 2020 (first day of the new annual fiscal year) were as follows (all account balances are in their normal position):

Cash                                                                    $     3,700

Accounts receivable                                                   5,900

Supplies inventory                                                    29,300

Land                                                                        168,500  

Buildings                                                                 116,500

Accumulated depreciation, buildings                       37,500   

Equipment                                                                 58,500

Accumulated depreciation, equipment                     18,000

Accounts payable                                                      25,200

Income tax payable                                                   16,600

Interest payable                                                           4,200

Wages payable (due in 2020)                                    15,700                                         

9% Notes payable ($10,000 due June 30, 2021,

     balance due June 30, 2022)                                  61,500

Common shares                                                       151,500

Retained earnings, Dec. 31, 2019                              52,200         

Transactions during 2020:

1.The company provided sales services to customers, on credit, for $ 210,300. In addition, the company produced cash sales to customers of $ 62,300.

2.Accounts receivable from customers of $ 15,600 remains to be collected at December 31, 2020.

3.Inventory of $ 62,900 was purchased on credit and debited to the supplies inventory account.

4.Minor parts were purchased with cash for $ 7,400 and debited to the supplies inventory account.

5.Wages payable at the beginning of 2020 were paid early in 2020. In addition, wages were earned by employees and paid during 2020 in the amount of $ 112,000.

6.Income tax payable at the beginning of 2020 was paid early in 2020.

7.Payments of $ 73,000 were made to creditors for supplies previously purchased on credit.

8.One year’s interest at 9% was paid on the notes payable at July 1, 2020.

9. During 2020, Don Tallint, the principal shareholder, purchased a new car for his wife

    Debbie. The new car cost $ 45,000 and was paid for with cash from personal sources.

10.Property taxes were paid on the land and buildings in the amount of $ 17,000 with cash.

11.Dividends were declared and paid in cash in the amount of $ 7,200.

Information available for year end adjusting entries:

12.•Supplies inventory was counted on December 31, 2020 and it was determined the supplies inventory still on hand at yearend was $ 31,900.

13. •Annual depreciation on the buildings is $ 6,000.

14•Annual deprecation on the equipment is $ 5,500

15•Additional wages of $4,000 were earned but are unpaid and unrecorded at December 31, 2020.

16•Interest for six months at 9% per year on the notes payable is unpaid and unrecorded at December 31, 2020..

17•Income taxes of $ 16,500 were unpaid and unrecorded at December 31, 2020.

Q: please Record beginning 2020 beginning balances in T accounts. Prepare journal entries for transactions 1 to 11 above as required and record the journal entries in T accounts while adding any new T accounts that you need as you complete this task.

Marmidan Mold Shop Inc. designs and builds molds for the automotive and aircraft industries. The account balances in the company’s general ledger on January 1, 2020 (first day of the new annual fiscal year) were as follows (all account balances are in their normal position):

Cash                                                                    $     3,700

Accounts receivable                                                   5,900

Supplies inventory                                                    29,300

Land                                                                        168,500  

Buildings                                                                 116,500

Accumulated depreciation, buildings                       37,500   

Equipment                                                                 58,500

Accumulated depreciation, equipment                     18,000

Accounts payable                                                      25,200

Income tax payable                                                   16,600

Interest payable                                                           4,200

Wages payable (due in 2020)                                    15,700                                         

9% Notes payable ($10,000 due June 30, 2021,

     balance due June 30, 2022)                                  61,500

Common shares                                                       151,500

Retained earnings, Dec. 31, 2019                              52,200         

Transactions during 2020:

1.The company provided sales services to customers, on credit, for $ 210,300. In addition, the company produced cash sales to customers of $ 62,300.

2.Accounts receivable from customers of $ 15,600 remain to be collected at December 31, 2020.

3.Inventory of $ 62,900 was purchased on credit and debited to the supplies inventory account.

4.Minor parts were purchased with cash for $ 7,400 and debited to the supplies inventory account.

5.Wages payable at the beginning of 2020 were paid early in 2020. In addition, wages were earned by employees and paid during 2020 in the amount of $ 112,000.

6.Income tax payable at the beginning of 2020 was paid early in 2020.

7.Payments of $ 73,000 were made to creditors for supplies previously purchased on credit.

8.One year’s interest at 9% was paid on the notes payable at July 1, 2020.

9. During 2020, Don Tallint, the principal shareholder, purchased a new car for his wife

    Debbie. The new car cost $ 45,000 and was paid for with cash from personal sources.

10.Property taxes were paid on the land and buildings in the amount of $ 17,000 with cash.

11.Dividends were declared and paid in cash in the amount of $ 7,200.

Information available for year end adjusting entries:

12.•Supplies inventory was counted on December 31, 2020 and it was determined the supplies inventory still on hand at yearend was $ 31,900.

13. •Annual depreciation on the buildings is $ 6,000.

14•Annual deprecation on the equipment is $ 5,500

15•Additional wages of $4,000 were earned but are unpaid and unrecorded at December 31, 2020.

16•Interest for six months at 9% per year on the notes payable is unpaid and unrecorded at December 31, 2020.

17•Income taxes of $ 16,500 were unpaid and unrecorded at December 31, 2020.

Required:

Prepare a statement of retained earnings for Marmidan Mold Shop Inc. for the year ended December 31, 2020. (Please record  on the electronic worksheet)

Marmidan Mold Shop Inc. designs and builds molds for the automotive and aircraft industries. The account balances in the company’s general ledger on January 1, 2020 (first day of the new annual fiscal year) were as follows (all account balances are in their normal position):

Cash                                                                    $     3,700

Accounts receivable                                                   5,900

Supplies inventory                                                    29,300

Land                                                                        168,500  

Buildings                                                                 116,500

Accumulated depreciation, buildings                       37,500   

Equipment                                                                 58,500

Accumulated depreciation, equipment                     18,000

Accounts payable                                                      25,200

Income tax payable                                                   16,600

Interest payable                                                           4,200

Wages payable (due in 2020)                                    15,700                                         

9% Notes payable ($10,000 due June 30, 2021,

     balance due June 30, 2022)                                  61,500

Common shares                                                       151,500

Retained earnings, Dec. 31, 2019                              52,200         

Transactions during 2020:

1.The company provided sales services to customers, on credit, for $ 210,300. In addition, the company produced cash sales to customers of $ 62,300.

2.Accounts receivable from customers of $ 15,600 remain to be collected at December 31, 2020.

3.Inventory of $ 62,900 was purchased on credit and debited to the supplies inventory account.

4.Minor parts were purchased with cash for $ 7,400 and debited to the supplies inventory account.

5.Wages payable at the beginning of 2020 were paid early in 2020. In addition, wages were earned by employees and paid during 2020 in the amount of $ 112,000.

6.Income tax payable at the beginning of 2020 was paid early in 2020.

7.Payments of $ 73,000 were made to creditors for supplies previously purchased on credit.

8.One year’s interest at 9% was paid on the notes payable at July 1, 2020.

9. During 2020, Don Tallint, the principal shareholder, purchased a new car for his wife

    Debbie. The new car cost $ 45,000 and was paid for with cash from personal sources.

10.Property taxes were paid on the land and buildings in the amount of $ 17,000 with cash.

11.Dividends were declared and paid in caah in the amount of $ 7,200.

Information available for year end adjusting entries:

12.•Supplies inventory was counted on December 31, 2020 and it was determined the supplies inventory still on hand at yearend was $ 31,900.

13. •Annual depreciation on the buildings is $ 6,000.

14•Annual deprecation on the equipment is $ 5,500

15•Additional wages of $4,000 were earned but are unpaid and unrecorded at December 31, 2020.

16•Interest for six months at 9% per year on the notes payable is unpaid and unrecorded at December 31, 2020.

17•Income taxes of $ 16,500 were unpaid and unrecorded at December 31, 2020.

Required:

Prepare a single step income statement for Marmidan Mold Shop Inc. for the year ended December 31, 2020. (Please record  on the electronic worksheet)