VAT Deductible and VAT Received for Company C in a given tax period are as follows.

Required: a) Fill VAT tax return number on the table for each month.

b) Close the VAT Accounts and make the journal entries at the end of April, May, June 2020.

c) If it is necessary make journal entries for VAT payment to the tax offices on 26 May, 26 June, 26 July 2020.

Owen Company forgot to accrue $3,000 of salaries its employees had earned at the end of 2019. It paid and expensed the salaries in 2020. It also, in 2019, recorded $4,000 of sales as an account receivable; however, the sale really did not take place until 2020, and it should have recognized the revenue in 2020. It collected the money from the sale early in 2020.

Provide the impact of the errors on the following:

Assets as of 12/31/19: $_____________ Overstated Understated

Assets as of 12/31/20: $_____________ Overstated Understated

Liabilities as of 12/31/19: $_____________ Overstated Understated

Net income for 2020: $_____________ Overstated Understated

AMP Corporation (calendar-year-end) has 2020 taxable income of $1,900,000 for purposes of computing the §179 expense. During 2020, AMP acquired the following assets:

1.What is the maximum amount of §179 expense AMP may deduct for 2020?

2.What is the maximum total depreciation, including §179 expense, that AMP may deduct in 2020 on the assets it placed in service in 2020, assuming no bonus depreciation?

Suppose you use a call spread strategy on 4/15/2020, by buying a Facebook call option with the strike price of $180 at $7 and selling a Facebook call option with the strike price of $195 at $2. Both call options mature on 5/15/2020.

1. What is your total payoff and profit if Facebook share is traded at $170 on 5/15/2020?
2. What is your total payoff and profit if Facebook share is traded at $185 on 5/15/2020?
3. What is your total payoff and profit if Facebook share is traded at $200 on 5/15/2020?

Suppose you use a call spread strategy on 4/15/2020, by buying a Facebook call option with the strike price of $180 at $7 and selling a Facebook call option with the strike price of $195 at $2. Both call options mature on 5/15/2020.

(a) What is your total payoff and profit if Facebook share is traded at $170 on 5/15/2020?

(b) What is your total payoff and profit if Facebook share is traded at $185 on 5/15/2020?

(c) What is your total payoff and profit if Facebook share is traded at $200 on 5/15/2020?

Buzz Bee Yard Company’ Apiary began operations on January 1, 2020, with the purchase of 100 bee hives for $500 total. Buzz follows IFRS and its standard on agricultural products. It has completed the first year of operations and has the following information for its bee hives at December 31, 2020:

1. Bee Hives – purchase of hives as per above                                                                 $   500
2. Honey harvested during 2020 (at net realizable value)                                         1,900                  
3. Honey sold during 2020 (at net realizable value)                                                    1,600
4. Hive maintenance costs directly traceable to hive activity in year                      $60        
5. Company general administration costs                                                                           $40
6. Fair value on Dec. 31, 2020 of hives                                                                              $1,300    

Required:

1. Prepare all the journal entries for Buzz’s bee hives activities for 2020, as per the information in (a) to (f).

Whitman and Greene are partners in a real estate venture. At January 1, 2020, their respective capital balances were $200,000 and $245,000. Their partnership agreement provides that Whitman is to receive a guaranteed salary of $100,000, and that remaining profits after the salary are to be shared in a 2:3 ratio. Partnership operations for the year 2020 resulted in income of $75,000, before distributions to partners. Whitman’s salary is paid in cash during the year, but there are no other withdrawals or capital changes. Assume full implementation.

Required

a. Compute the balance of each partner’s capital account at December 31, 2020.

b. Compute the balance of each partner’s capital account at December 31, 2020, assuming partnership income was $150,000.

Bedco makes high quality beds. Each bed sells for $1,000. They sold 750 beds in 2020 and 900 beds in 2019. Their costs for both years are presented below:

2019:

Cost of Goods Sold: $360,000

Operating Expenses: $220,000

Factory Rent: $60,000

2020:

Cost of Goods Sold: 300,000

Operating Expenses: 190,000

Factory Rent: 60,000

A. PROVIDE BEDCO’S CONTRIBUTION MARGIN INCOME STATEMENT FOR 2020 AND 2019.

B. PROVIDE THE BEDCO’S 2020 VARIABLE COST RATIO AND VARIABLE COST/UNIT.

C. PROVIDE THE BEDCO’S 2020 CONTRIBUTION MARGIN RATIO AND CONTRIBUTION MARGIN/UNIT.

D. PART D: USING BREAK-EVEN ANALYSIS, DETERMINE THE BEDCO’S 2020 BREAK-EVEN POINTS IN TERMS OF SALES DOLLARS AND NUMBER OF UNITS SOLD.