Amalgamated General Corporation is a consulting firm that also offers financial services through its credit division. From time to time the company buys and sells securities. The following selected transactions relate to Amalgamated’s investment activities during the last quarter of 2021 and the first month of 2022. The only securities held by Amalgamated at October 1, 2021 were $35 million of 10% bonds of Kansas Abstractors, Inc., purchased on May 1, 2021 at face value and held in Amalgamated’s trading securities portfolio. The company’s fiscal year ends on December 31.

Required:
Prepare the appropriate journal entry for each transaction or event. Use one summary entry on December 31 to adjust the portfolio of equity investments to fair value. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Enter your answers in millions rounded to 1 decimal place, (i.e., 5,500,000 should be entered as 5.5).)

Part #1: The Caribbean Club The Caribbean Club is one of the Virgin’s Islands/ hottest night spots. It’s a great place for locals to meet after work and relax with friends. It’s a popular destination for tourists why stay on the island, and it’s always on the list of fun entertainment choices for the crowds from the cruise ships that dock in the harbor. The reason the Club is so popular with such a variety of customers is because the founder of the club, Ross Stewart, always has such innovative and visionary ideas that delight the patrons. For example, every night of the week the Club features different activities or shows, including beach volleyball, Caribbean shows with calypso singers, would-class musicians who play steel drums, and other island entertainment. Since Ross was a former accountant and auditor with one of the largest public accounting firms in New Zealand, he is very accustomed to brainstorming sessions to generate ideas and surface concerns. He bought this practice with him to the Caribbean and holds brainstorming sessions with his “club associates” (Which is what he called all of the employees at the club) once every month to identify new and novel ideas to increase the popularity and profitability of the club. As you might imagine, the patrons of a night club are there to relax and enjoy themselves. So, the associates thought it would be great idea to somehow be able to recognize their regular patrons so that they wouldn’t have to trouble them with a bill every time a server came to their table with another round of drinks. After all, if the club wanted these people to “feel like they were at home with friends”, the patrons shouldn’t have to bother with trying to decide who owed what to pay the bill. So, Ross and his associated came up with the idea to implant their regular customers with an implantable microchip. The idea was to make the chip “fun”- to give an elite status so that their regular patrons would want to be implanted. To dramatize the elite status of the chip, Ross decided that the Club would have a special area where only those with chips. The “VIPs”, would be admitted. And of course, this area would have various exclusive services for these members. The chip would allow the VIPs to be recognized and to be able to pay for their food and drinks without any ID-they would simply pass by a reader and the Club would know who they are and their credit balance. Ross also wanted the information system supporting the chip to be a customer relationship management tool. Answer the following questions: 1. What do you think of this idea? What are the advantages and disadvantages of this idea for the Caribbean Club? 2. What are the advantages and disadvantages for the patrons? 3. If you were a passenger on a cruise ship, or staying at a resort on the island, would you get the chip implanted? Why or why not?

Part #2: Vertical Markets and Accounting Information Needs • There are many vertical markets industries apart from industries discussed in chapter 11. Identify two additional vertical markets industries and explain what are the unique characteristics of these industries that affect their AISs?

Joe operates a business that locates and purchases specialized assets for clients, among other activities. Joe uses the accrual method of accounting but he doesn’t keep any significant inventories of the specialized assets that he sells. Joe reported the following financial information for his business activities during year 0.

Determine the effect of each of the following transactions on the taxable business income. (Select "No Effect" from the dropdown if no change in the taxable business income.)

Required:

Joe has signed a contract to sell gadgets to the city. The contract provides that sales of gadgets are dependent upon a test sample of gadgets operating successfully. In December, Joe delivers $13,350 worth of gadgets to the city that will be tested in March. Joe purchased the gadgets especially for this contract and paid $9,450.

Joe paid $275 for entertaining a visiting out-of-town client. The client didn’t discuss business with Joe during this visit, but Joe wants to maintain good relations to encourage additional business next year.

On November 1, Joe paid $590 for premiums providing for $59,000 of “key man” insurance on the life of Joe’s accountant over the next 12 months.

At the end of year 0, Joe’s business reports $11,850 of accounts receivable. Based upon past experience, Joe believes that at least $2,570 of his new receivables will be uncollectible.

In December of year 0, Joe rented equipment to complete a large job. Joe paid $5,850 in December because the rental agency required a minimum rental of three months ($1,950 per month). Joe completed the job before year-end, but he returned the equipment at the end of the lease.

Joe hired a new sales representative as an employee and sent her to Dallas for a week to contact prospective out-of-state clients. Joe ended up reimbursing his employee $490 for airfare, $540 for lodging, $440 for meals, and $340 for entertainment (Joe provided adequate documentation to substantiate the business purpose for the meals and entertainment). Joe requires the employee to account for all expenditures in order to be reimbursed.

Joe uses his BMW (a personal auto) to travel to and from his residence to his factory. However, he switches to a business vehicle if he needs to travel after he reaches the factory. Last month, the business vehicle broke down and he was forced to use the BMW both to travel to and from the factory and to visit work sites. He drove 215 miles visiting work sites and 84 miles driving to and from the factory from his home. Joe uses the standard mileage rate to determine his auto-related business expenses. (Round your answer to whole number. Use standard mileage rate.)

Joe paid a visit to his parents in Dallas over the Christmas holidays. While he was in the city, Joe spent $145 to attend a half-day business symposium. Joe paid $390 for airfare, $126 for meals during the symposium, and $77 on cab fare to the symposium.

Shamrock Burrito Inc. sells franchises to independent operators throughout the northwestern part of the United States. The contract with the franchisee includes the following provisions.

Management of Shamrock Burrito estimates that the value of the services rendered to the franchisee at the time the contract is signed amounts to at least $20,000. All franchisees to date have opened their locations at the scheduled time, and none have defaulted on any of the notes receivable. The credit ratings of all franchisees would entitle them to borrow at the current interest rate of 8%.

(b) Prepare the journal entries for the initial and continuing franchise fees, assuming: (Credit account titles are automatically indented when the 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. 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.)

Please help me solve the following that have question marks. The ones I have listed my answers to are correct.

*please note, "interest revenue" is NOT correct to recognize collection of note and interest revenue on this last part of the answer!

1/ Arizona Desert Homes (ADH) constructed a new subdivision during 2017 and 2018 under contract with Cactus Development Co. Relevant data are summarized below:

ADH recognizes revenue upon completion of the contract.

What is the journal entry in 2018 to record revenue?

Multiple Choice

• Construction in progress	460,000
  Cost of construction	660,000
  Revenue from long-term contracts		1,120,000

• Accounts receivable	1,635,000
  Revenue from long-term contracts		1,635,000

• Construction in progress	1,350,000
  Cost of construction	1,920,000
  Revenue from long-term contracts		3,270,000

• Cost of construction	2,150,000
  Gross profit	1,120,000
  Revenue from long-term contracts		3,270,000

2/ On December 15, 2018, Rigsby Sales Co. sold a tract of land that cost $3,300,000 for $5,000,000. Rigsby appropriately uses the installment sales method of accounting for this transaction. Terms called for a down payment of $440,000 with the balance in two equal annual installments payable on December 15, 2019, and December 15, 2020. Ignore interest charges. Rigsby has a December 31 year-end.

In its December 31, 2018, balance sheet, Rigsby would report:

Multiple Choice

• Installment receivables (net) of $4,560,000.

• Installment receivables (net) of $3,009,600.

• Realized gross profit of $149,600.

• Deferred gross profit of $149,600

3/ Lake Power Sports sells jet skis and other powered recreational equipment. Customers pay one-third of the sales price of a jet ski when they initially purchase the ski, and then pay another one-third each year for the next two years. Because Lake has little information about the ability to collect these receivables, it uses the cost recovery method to recognize revenue on these installment sales. In 2017, Lake began operations and sold jet skis with a total price of $750,000 that cost Lake $375,000. Lake collected $250,000 in 2017, $250,000 in 2018, and $250,000 in 2019 associated with those sales. In 2018, Lake sold jet skis with a total price of $1,200,000 that cost Lake $720,000. Lake collected $400,000 in 2018, $270,000 in 2019, and $270,000 in 2020 associated with those sales. In 2020, Lake also repossessed $260,000 of jet skis that were sold in 2018. Those jet skis had a fair value of $97,500 at the time they were repossessed.

In 2017, Lake would recognize realized gross profit of:

Multiple Choice

• $0.

• $250,000.

• $375,000.

• $125,000.

4/ Indiana Co. began a construction project in 2018 with a contract price of $161 million to be received when the project is completed in 2020. During 2018, Indiana incurred $36 million of costs and estimates an additional $89 million of costs to complete the project. Indiana recognizes revenue over time and for this project recognizes revenue over time according to the percentage of the project that has been completed.

Indiana:

Multiple Choice

• Recognized $72.00 million loss on the project in 2018.

• Recognized $36.00 million loss on the project in 2018.

• Recognized $10.37 million gross profit on the project in 2018.

• Recognized no gross profit or loss on the project in 2018.

This question is on public Finance.

3. The state of Minnesota is considering legislation to legalize recreational marijuana (cannabis).

a. Discuss all possible externalities associated with legalizing cannabis. Using a graph, diagram one of the externalities and explain your graph. Make sure it is properly labeled.

b. Minnesota will tax the sale of cannabis. What is the socially optimal use of the tax revenue? Should Minnesota use that tax revenue to fund public education? Why or why not? Explain.

Which of the following explains why in the long run the purely competitive firm produces at lowest possible cost? Select one:

a. There are no advertising costs to add to production costs.

b. The demand is equal to average revenue which equals marginal revenue curve is perfectly elastic and intersects the long run average cost curve at its lowest point,thus, the firm produces at full capacity.

c. There are no economic profits.

d. All of the above are correct.

1. What is fund balance
2.What are the various fund balance classification used in the different sets of financial statements issued
3. What is a major fund
4. What is the relevance of identifying a fund as “major”
5.. What conditions are necessary to classify a fund as major?
6. What the revenue and expenditure recognition principles for state and local governments
7.What are the major non-exchange revenue transactions in state and local governments