The following transactions involving intangible assets of Francis Corporation occurred on or near December 31, 2020. Prepare the journal entry(ies) needed at that date to record the transaction, and at December 31, 2021 to record any resultant amortization. If no entry is required at a particular date, write "None needed."

1) Francis paid Jericho Company $ 200,000 for the exclusive right to market a particular product, using the Jericho name and logo in promotional material. The franchise runs for as long as Francis is in business. Francis decided to amortize the franchise over 25 years.

2) Francis spent $ 300,000 developing a new manufacturing process and has applied for a patent. It believes that its application will be successful and that the process will be successfully implemented and used for 10 years.

3) Francis spent $ 300,000 developing a new manufacturing process and has applied for a patent. It believes that its application will be successful and that the process will be successfully implemented and used for 10 years.

4) Francis incurred $ 90,000 in successfully defending another of its patents in an infringement suit. The patent expires during December 2024.

5) Francis incurred $ 200,000 in an unsuccessful patent defence. As a result of the adverse verdict, the patent, with a remaining unamortized cost of $ 99,000, is deemed worthless.

6) Francis paid Mexico Laboratories $ 52,000 for research work performed by Mexico under contract for Francis.

Three former college classmates decided to open a store near campus to sell wireless equipment to students. They created a public company, The Wire, and issued stock to interested investors. They plan on creating monthly financial statements.

Several transactions occurred in March. Each is described separately in this folder. For each transaction, indicate the accounts for The Wire that are affected, whether they increase or decrease, and the amount of the increase or decrease.

When you record the dollar amounts, be sure to use a minus sign to indicate a decrease in the account.

ACCOUNT OPTIONS:

Transaction 1: On March 1, the three classmates opened a checking account for The Wire at a local bank. They each deposited $25,000 in exchange for shares of stock. A few of their friends also purchased stock totaling $12,000 that was deposited in The Wire account.

Transaction 2: The company quickly acquired $38,000 in inventory, 60% of which was acquired on open accounts that were payable after 30 days. The rest was paid for in cash.

Transaction 3: A one-year store rental lease was signed on March 1 for $12,000 for the year, and rent for the first 3 months was paid in advance. [Note: Record the complete entry for the March 1 transaction first and the complete adjusting entry on March 31 second.]

Transaction 4: The owners paid $3,000 for website advertising. They were able to get a good deal because one of the company's owners also owns stock in the website company. The owners also paid $5,000 for some advertising in local newspapers. [Note: Combine both transactions into one entry].

Transaction 5: Sales were $60,000. Cost of merchandise sold was 50% of its sales price. 35% of the sales were for cash. [Note: Record the complete entry for the sales first and the complete entry for the expenses second]

Transaction 6: Wages and salaries in March were $11,200, of which $8,800 was actually paid to employees.

Transaction 7: Miscellaneous expenses were $2,000, all paid for with cash

Transaction 8: On March 1, fixtures and equipment were purchased for $5,000 with a downpayment of $1,000 and a $4,000 note, payable in one year. Interest of 6.5% per year was due when the note was repaid. The estimated life of the fixtures and equipment is 11 years with no expected salvage value. [Note:Record the complete entry for the March 1 equipment purchase first, the March 31 depreciation adjusting entry second, and the March 31 interest adjusting entry third. Also, round all answers to the nearest cent.]

[The following information applies to the questions displayed below.]

Natalie owns a condominium near Cocoa Beach in Florida. This year, she incurs the following expenses in connection with her condo:

During the year, Natalie rented out the condo for 90 days, receiving $18,500 of gross income. She personally used the condo for 50 days during her vacation. Assume there are 365 days in the year.

Assume Natalie uses the Tax Court method of allocating expenses to rental use of the property. (Do not round intermediate calculations. Round your final answer to the nearest whole dollar amount.)

a. What is the total amount of for AGI (rental) deductions Natalie may deduct in the current year related to the condo?

b. What is the total amount of itemized deductions Natalie may deduct in the current year related to the condo?

c. If Natalie’s basis in the condo at the beginning of the year was $210,000, what is her basis in the condo at the end of the year?

d. Assume that gross rental revenue was $3,700 (rather than $18,500). What amount of for AGI deductions may Natalie deduct in the current year related to the condo?

Larime Corp. is forecasting 20X2 near the end of 20X1. The estimated year-end financial statements and a worksheet for the forecast are given below.

Management expects the following next year.

• An 9% increase in revenue.
• Price cutting will cause the cost ratio (COGS/sales) to deteriorate (increase) by 2% (of sales) from its current level.
• Expenses will increase at a rate that is three quarters of that of sales.
• The current accounts will increase proportionately with sales.
• Net fixed assets will increase by $5 million.
• All interest will be paid at 12%.
• Federal and state income taxes will be paid at a combined rate of 43%.

Make a forecast of Larime's complete income statement and balance sheet. Enter your dollar answers in thousands. For example, an answer of $12 thousands should be entered as 12, not 12,000. Round percentage values to 1 decimal place. Enter all amounts as a positive numbers.

85. A 25-year-old man is a resident of a small town near London. He likes to eat beefsteak. He develops

      a severe progressive neurologic disease characterized by psychiatric symptoms, cerebellar signs, and

      dementia.

86. A 40-year old woman with many lifetime sexual partners is diagnosed with cervical cancer.

      This cancer is common worldwide and has a sexually transmitted viral etiology. The causative

       agent of human cervical cancer is

87. A 50-year-old male went to the ER because of meningitis symptoms. He complained of

       headaches and stiff neck. His hobby is racing and raising pigeons. He is HIV positive and

       routinely takes his anti-retrovial drugs. A lumbar puncture is formed and budding encapsulated yeast

       are identified after an India ink preparation was done.

88. A 30-year-old florist presents at her physician’s office complaining of a ulcerated lesion on her left hand after being pricked by a rose thorn. The doctor notices abcesses running along the lymphatic channels. This dimorphic fungi is

89. A 25-year-old spelunker who lives in Mississippi has a pulmonary infection that is getting worse.

      His Xray shows an infiltrate or darkened left lobe. Sputum showed pear shaped macroconidia and     

      Staining of colonies showed spores resembling sunflowers in bloom’

90. A 30-year-old immigrant from Central America presents with a mild respiratory infection. He

      only has mild changes in his lungs and gave a positive skin test. Sputum was stained and thick

      walled spherical yeast resembling a mariner’s wheel or a boatman’s wheel were seen.

Three former college classmates decided to open a store near campus to sell wireless equipment to students. They created a public company, The Wire, and issued stock to interested investors. They plan on creating monthly financial statements.

Several transactions occurred in March. Each is described separately in this folder. For each transaction, indicate the accounts for The Wire that are affected, whether they increase or decrease, and the amount of the increase or decrease.

When you record the dollar amounts, be sure to use a minus sign to indicate a decrease in the account.

ACCOUNT OPTIONS:

Transaction 1: On March 1, the three classmates opened a checking account for The Wire at a local bank. They each deposited $25,000 in exchange for shares of stock. A few of their friends also purchased stock totaling $12,000 that was deposited in The Wire account.

Transaction 2: The company quickly acquired $38,000 in inventory, 60% of which was acquired on open accounts that were payable after 30 days. The rest was paid for in cash.

Transaction 3: A one-year store rental lease was signed on March 1 for $12,000 for the year, and rent for the first 3 months was paid in advance. [Note: Record the complete entry for the March 1 transaction first and the complete adjusting entry on March 31 second.]

Transaction 4: The owners paid $3,000 for website advertising. They were able to get a good deal because one of the company's owners also owns stock in the website company. The owners also paid $5,000 for some advertising in local newspapers. [Note: Combine both transactions into one entry].

Transaction 5: Sales were $60,000. Cost of merchandise sold was 50% of its sales price. 35% of the sales were for cash. [Note: Record the complete entry for the sales first and the complete entry for the expenses second]

Transaction 6: Wages and salaries in March were $11,200, of which $8,800 was actually paid to employees.

Transaction 7: Miscellaneous expenses were $2,000, all paid for with cash

Transaction 8: On March 1, fixtures and equipment were purchased for $5,000 with a downpayment of $1,000 and a $4,000 note, payable in one year. Interest of 6.5% per year was due when the note was repaid. The estimated life of the fixtures and equipment is 11 years with no expected salvage value. [Note:Record the complete entry for the March 1 equipment purchase first, the March 31 depreciation adjusting entry second, and the March 31 interest adjusting entry third. Also, round all answers to the nearest cent.]

The following inventory transactions took place near December 31, 2021, the end of the Dixon Company’s fiscal year-end:

Company on consignment. The shipment arrived at Myers’s location on December 29, but none of the merchandise was sold by the end of the year. The merchandise was included in the 2021 ending inventory.

and recorded as a purchase on that date and not included in the 2021 ending inventory. The invoice revealed that the shipment was made f.o.b. destination on December 28, 2021.

customer f.o.b. destination. The goods, which arrived at the customer’s location on January 4, 2022, were included in Dixon’s 2021 ending inventory. The sale was recorded in 2022.

consignment from the Haskins Company. A purchase was recorded and the merchandise was included in 2021 ending inventory.

8, 2022. The invoice revealed that the merchandise was shipped from the supplier on December 28, 2021, f.o.b. shipping point. The merchandise was not included in 2021 ending inventory.
Which of the five situations above was accounted for  correctly by Dixon Company?

The following inventory transactions took place near December 31, 2018, the end of the Rasul Company's fiscal year-end:

1. On December 27, 2018, merchandise costing $2,000 was shipped to the Myers Company on consignment. The shipment arrived at Myers's location on December 29, but none of the merchandise was sold by the end of the year. The merchandise was not included in the 2018 ending inventory.
   
2. On January 5, 2019, merchandise costing $8,000 was received from a supplier and recorded as a purchase on that date and not included in the 2018 ending inventory. The invoice revealed that the shipment was made f.o.b. shipping point on December 28, 2018.
   
3. On December 29, 2018, the company shipped merchandise costing $12,000 to a customer f.o.b. destination. The goods, which arrived at the customer's location on January 4, 2019, were not included in Rasul's 2018 ending inventory. The sale was recorded in 2018.
   
4. Merchandise costing $4,000 was received on December 28, 2018, on consignment from the Aborn Company. Purchase was not recorded and the merchandise was not included in the 2018 ending inventory.
   
5. Merchandise costing $6,000 was received and recorded as a purchase on January 8, 2019. The invoice revealed that the merchandise was shipped from the supplier on December 28, 2018, f.o.b. destination. The merchandise was not included in the 2018 ending inventory.

Assignment:

1. State whether Rasul correctly accounted for each of the above transactions. Give the reason for your answer.
   
2. P 8–2 Items to be included in the inventory.

You believe ABC stock will likely go up in the near term. The current stock price is $25. You decide to buy 10 ABC option contracts with $24 strike price that expires in 6 months. You are paying $2 per share call premium for the option. a) What’s the intrinsic value of this call option? b) What’s the breakeven stock price? c) Draw an option pay-off diagram of this long call position; d) If 6 months later, the stock price increases to $28, what’s the profit from the option? e) If the risk free rate is 3%, what’s the option put price?