On July 1, 2020, Sandhill Company purchased $3,860,000 of Duggen Company’s 8% bonds, due on July 1, 2027. The bonds, which pay interest semiannually on January 1 and July 1, were purchased for $3,340,000 to yield 10%. These bonds are classified as available-for sale and they have a fair value at December 31, 2020, of $3,444,400, prepare the journal entry (if any) at December 31, 2020, to record this transaction.

Hansen Computer Corp. acquires $2,150,000 in new 7-year class assets (all tangible personal property) in February 2020. The company elects to take all available Sec. 179 expense and bonus first-year depreciation. Assume Hansen uses a calendar year and that Sec. 179 expense will not be limited by taxable income in 2020. What cost recovery deduction can Hansen take in 2020?

On January 1, 2020, Larkspur Company makes the two following acquisitions. 1. Purchases land having a fair value of $320,000 by issuing a 4-year, zero-interest-bearing promissory note in the face amount of $485,782. 2. Purchases equipment by issuing a 6%, 9-year promissory note having a maturity value of $360,000 (interest payable annually). The company has to pay 11% interest for funds from its bank.

(a) Record the two journal entries that should be recorded by Larkspur Company for the two purchases on January 1, 2020.

(b) Record the interest at the end of the first year on both notes using the effective-interest method. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 58,971. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

On January 1, 2020, Culver Company makes the two following acquisitions.

The company has to pay 10% interest for funds from its bank.

(Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 58,971. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Beavis Construction Company was the low bidder on a construction project to build an earthen dam for $1,730,000. The project was begun in 2020 and completed in 2021. Cost and other data are presented below:

Assume that Beavis recognizes revenue on this contract over time according to percentage of completion.

Required:
Compute the amount of gross profit recognized during 2020 and 2021.

Beavis Construction Company was the low bidder on a construction project to build an earthen dam for $1,730,000. The project was begun in 2020 and completed in 2021. Cost and other data are presented below:

Assume that Beavis recognizes revenue on this contract over time according to percentage of completion.

Required:
Compute the amount of gross profit recognized during 2020 and 2021.

Suppose you are the brand manager for the JWU Online MBA Program. Design a promotional strategy to grow the program with high potential students. Define your target market. Describe your advertising objectives, messages, and media choices. How might you use communication to build the brand.

Exercise 20-13 Indigo Company sponsors a defined benefit pension plan. The corporation’s actuary provides the following information about the plan. January 1, 2020 December 31, 2020 Vested benefit obligation $1,650 $1,750 Accumulated benefit obligation 1,750 2,750 Projected benefit obligation 2,250 2,770 Plan assets (fair value) 1,730 2,640 Settlement rate and expected rate of return 10 % Pension asset/liability 520 ? Service cost for the year 2020 440 Contributions (funding in 2020) 750 Benefits paid in 202- 210

(a) Compute the actual return on the plan assets in 2020.

(b) Compute the amount of the other comprehensive income (G/L) as of December 31, 2020. (Assume the January 1, 2020, balance was zero.) (Enter loss using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).

(c) Compute the amount of net gain or loss amortization for 2020 (corridor approach).

(d) Compute pension expense for 2020.

Ajax had 5,000 shares of 8% PV=100 preferred stock

If the stock is cumulative and the company did not have any money

in 2019 but could pay 95000 in 2020 How much would the common

stockholders get in 2020?

1.95000

2.40000

3.15000

(a) Your daughter has expressed a wish to attend university when she finishes school in five (5) years. You anticipate the cost will be $60,000 at the time she commences university. If your financial institution is offering you 4% pa (compounded monthly), how much do you need to deposit in your account each month in order to save the required amount before your daughter commences university?

(b) You have been offered the opportunity to purchase a start up company building electric cars for the Australian market called Green Motors P/L. Your initial investment is $22,000,000.
The term of the project is 5 years. The project has an expected rate of return of 10% pa. All expected cash flows for the project are below and you have an expected rate of return of 10%
pa.

pa.
End of year    Cash flow ($mil)
1 1.8
2 3.0
3 6.5
4 8.4

5 12.3

(i) Based on your required rate of return would you purchase this investment? Present all calculations to support your answer. (2.5 marks)
(ii) Would you change your opinion from (i) if the expected rate of return rose to 15%? Present all calculations to support your answer. (2.5 marks)