Company X has the following information:

Inventory at end-of-year prices of $1,300,000 (2018 – base year), $1,450,000 (2019), and $1,350,000 (2020)

The price index is 105 in 2019 and 107 in 2020

Use the dollar-value LIFO method to calculate ending inventory for 2019 and 2020.

Facts:  Highcare, Inc. is a calendar year entity that began business this year. Highcare provides nursing services to cancer patients. The services it provides are both based in traditional science and holistic medicine. To support the nursing services, Highcare purchases and dispenses medical marijuana to its patients.

Also, Highcare purchases and sells a line of recreational marijuana products for its patients and their families at its facility’s store. Highcare capitalizes only the costs associated with acquiring marijuana in its inventory costs. No other costs are capitalized into inventory. For tax purposes, Highcare's inventory capitalization and COGS are properly determined.

In Highcare’s state (California), selling medical and recreational marijuana is legal. This year, Highcare’s general financial results for each of its business lines were as follows:

Highcare’s management recently learned that, although medical and recreational marijuana are legal enterprises in California, they are not under federal law because marijuana is a controlled substance within the meaning of schedule I and II of the Controlled Substances Act (21 U.S.C. ch. 13 § 801 et seq.) . It is uncertain about how to compute its federal taxable income. Specifically, Highcare is concerned that its marijuana-related deductions, which are generally allowable under Code section 162, may be prohibited by federal law.

Issue: Based on the financial data provided, what will Highcare’s taxable income be for this year?

Required: Download this template.  R1 Research List.xlsx. Do the research and upload a completed list (remember that this is not a writing assignment, simple explanations only).

Only the cost of obtaining product is included. In other words, do not review the inventory capitalization / COGS numbers. Do not address capitalization (Code sections 263(a) or 263A).

Only primary authorities (Code and applicable Regs, cases or Rulings) are to be listed. I started the list with a sample of what I want to see. My goal is to be able to review the research to see if you're headed in the right direction.

Please DO NOT provide your process or any secondary sources.

A 3-year bond carrying 3.4% annual coupon and $100-par is putable at par 1 year and 2 years from today. Calculate the value of the putable bond under the forward rate curve below.

1-year spot rate: 2.1%;

1-year spot rate 1 year from now: 2.5%;

1-year spot rate 2 years from now: 3.8%.

Assume annual compounding. Round your answer to 2 decimal places (nearest cent).

Dufner Co. issued 13-year bonds one year ago at a coupon rate of 6.5 percent. The bonds make semiannual payments. If the YTM on these bonds is 5.4 percent, what is the current dollar price assuming a par value of $1,000?

A 5-year zero-coupon bond must have a price that is _________________ a 10-year zero-coupon bond.

A. higher than

B. lower than

C. equal to

Janes pizzeria issued 10-year bonds one year ago at a coupon rate of 8.75 percent. If the YTM on these bonds is 7.25 percent, what is the current bond price?

On January 1, Year 1, Dayden Company as lessee signed a five-year noncancelable equipment lease with annual payments of $100,000 beginning December 31, Year 1. Dayden Company treated this transaction as a capital lease. The five lease payments have a present value of $379,000 at January 1, Year 1, based on interest of 10%. What amount should Dayden Company report as interest expense for the year ended December 31, Year 1?

Martin inc issued $15,000,000 of 3%, 10 year bonds at 98%, on January 1st Year 1. Interest is payable semiannually on June 30 and December 31. How much cash did Martin, inc receive on January 1 year 1?

Martin inc issued $15,000,000 of 3%, 10 year bonds at 98%, on January 1st Year 1. Interest is payable semiannually on June 30 and December 31. How much interest will Martin inc pay bondholders on June 30, year 1?

Martin inc issued $15,000,000 of 3%, 10 year bonds at 98%, on January 1st Year 1. Interest is payable semiannually on June 30 and December 31. How much interest will Martin inc pay bondholders over the 10 years?

On November 1, Year 1, Bradley Corporation incurs a 15-year $200,000 mortgage liability in conjunction with the acquisition of an office building. This mortgage is payable in monthly installments of $2,400, which include interest computed at the rate of 12% per year. The second monthly payment is made on December 31, Year 1. How much of the second payment made on December 31, Year 1, represents interest expense? A. $400. B. $1,996. C. $2,000. D. $4,000.

On March 31, 20X8, your calendar year company takes out a 3-year insurance policy with a premium of $5,000 per year. The entire $15,000 is paid in advance on March 31, 20X8 and is recorded as prepaid insurance. On December 31, 20X8, you discover that the adjusting entry debited Insurance Expense for $5,000 and credited Prepaid Insurance for $5,000. Your correcting journal entry will: debit Prepaid Insurance for $1,250; credit Insurance Expense for $1,250 debit Prepaid Insurance for $3,750; credit Insurance Expense for $3,750 debit Insurance Expense for $1,250; credit Prepaid Insurance for $1,250 debit Prepaid Insurance for $5,000; credit Insurance Expense for $5,000 debit Insurance Expense for $3,750; credit Prepaid Insurance for $3,750 not be necessary because the original adjusting entry was correct