Q. Baoshan Energy Ltd. in Shanghai, China, has a tank lorry that costed the company ¥300,000 when it was purchased on January 1, 2016. The vehicle has an estimated useful life of 10 years and no residual value. Baoshan uses straight-line method of depreciation on equipment. Baoshan decides to dispose the tank lorry and sells it to Pudong Oil & Gas Co. on August 31, 2020. (Currency in Chinese yuan, ¥)

Instructions:

A. What journal and T-account entries would Baoshan Energy make to record the sale of the tank lorry for ¥170,000 cash on August 31, 2020?

B. What journal and T-account entries would Baoshan Energy make to record the sale of the tank lorry for ¥100,000 cash on August 31, 2020?

On January 1, 2020 the Walker Manufacturing Company purchased 10% bonds having a maturity value of $100,000 due in 5 years. The bonds pay interest every January 1st. Walker paid a premium for the bonds in the amount of $7,985.10. As a result of paying the $7,985.10 premium, the bond investment provides Walker with an 8% yield. Required:

Prepare journal entries for the following dates:

1. January 1, 2020 when the bonds were purchased.

2. December 31, 2020 to record interest revenue and amortization.

3. January 1, 2021 to record the interest payment being received.

5. December 31, 2021 to record interest revenue and amortization.

5. January 1, 2022 to record the interest payment being received.

During 2020, Sheridan Company started a construction job with a contract price of $1,376,000. The job was completed in 2022. The following information is available. The contract is non-cancellable.

Calculate the amount of gross profit to be recognized each year, assuming the percentage-of-completion method is used. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Ahmed, an Australian resident, was made redundant on 30th June 2020 at the age of 58. He had been employed at the company for 14 years and 9 months. His taxation records for the year ended 30th June 2020 revealed the following:

Gross wages up to redundancy $65000 (PAYG withheld $18400)

Interest on savings account held jointly with spouse $4200

Genuine redundancy payment $93000

Lump sum received from his superannuation fund:

Taxable component (element taxed in the fund) $372000 (PAYG withheld $26000)

Ahmed has adequate private health insurance cover for the year.

Required:

For the year ended 30 June 2020, calculate Ahmed's:

a) Taxable Income

b) Net Tax Payable or Refundable

During 2020, Skysong Company started a construction job with a contract price of $1,590,000. The job was completed in 2022. The following information is available.

Compute the amount of gross profit to be recognized each year, assuming the percentage-of-completion method is used.

eTextbook and Media

List of Accounts

Prepare all necessary journal entries for 2021

Martin MFG company uses balance sheet approach to calculate allowance for doubtful accounts and bad debt expense. Current policy is to reserve 20% gross accounts receivable as an allowance for uncollectible accounts.

Martin MFG company issued 10% stated rate bonds in 2020. Effective market rate of interest for these bonds is 8%.

Select all statements that are true regarding the information above. Ignore taxes and any cost of goods sold.

Reducing the percentage of gross accounts receivable reserved in the allowance for uncollectible accounts will increase net income

Increasing the percentage of gross accounts receivable reserved in the allowance for uncollectible accounts will increase net income

Reducing the amount of accounts receivable written off by $1,000 will increase net income

Increasing the amount of accounts receivable written off by $1,000 will increase net income

If given option to deliver inventory in either 2020 or 2021 waiting to deliver inventory to customers until 2021 will increase revenue in 2020

If given option to deliver inventory in either 2020 or 2021 delivering inventory to customers in 2020 will increase revenue in 2020

Using income statement approach to calculate bad debt expense will always result in lower bad debt expense versus the balance sheet approach

Using direct write off method to calculate bad debt expense will always result in lower bad debt expense versus the balance sheet approach

Increasing the stated rate of the bonds would have increased the price of the bonds at issuance

Increasing the market rate used to price the bonds would have increased the price of bonds at issuance

Present value of bonds issued is higher than face value

Present value of bonds issued is lower than face value

On January 1, 2020, Grouper Company sold 12% bonds having a maturity value of $550,000 for $591,698, which provides the bondholders with a 10% yield. The bonds are dated January 1, 2020, and mature January 1, 2025, with interest payable December 31 of each year. Grouper Company allocates interest and unamortized discount or premium on the effective-interest basis.

Correct answer iconYour answer is correct.

Prepare the journal entry at the date of the bond issuance. (Round answer to 0 decimal places, e.g. 38,548. 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.)

eTextbook and Media

List of Accounts

Partially correct answer iconYour answer is partially correct.

Prepare a schedule of interest expense and bond amortization for 2020–2022. (Round answer to 0 decimal places, e.g. 38,548.)

eTextbook and Media

List of Accounts

Partially correct answer iconYour answer is partially correct.

Prepare the journal entry to record the interest payment and the amortization for 2020. (Round answer to 0 decimal places, e.g. 38,548. 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.)

New attempt is in progress. Some of the new entries may impact the last attempt grading.Your answer is incorrect.

Nash Home Improvement Company installs replacement siding, windows, and louvered glass doors for single-family homes and condominium complexes. The company is in the process of preparing its annual financial statements for the fiscal year ended May 31, 2020. Jim Alcide, controller for Nash, has gathered the following data concerning inventory.

At May 31, 2020, the balance in Nash’s Raw Materials Inventory account was $436,560, and Allowance to Reduce Inventory to Market had a credit balance of $29,710. Alcide summarized the relevant inventory cost and market data at May 31, 2020, in the schedule below.

Alcide assigned Patricia Devereaux, an intern from a local college, the task of calculating the amount that should appear on Nash’s May 31, 2020, financial statements for inventory at lower-of-cost-or-market as applied to each item in inventory. Devereaux expressed concern over departing from the historical cost principle. Assume Garcia uses LIFO inventory costing.

(a1) Determine the proper balance in Allowance to Reduce Inventory to Market at May 31, 2020.

(a2) For the fiscal year ended May 31, 2020, determine the amount of the gain or loss that would be recorded due to the change in Allowance to Reduce Inventory to Market.

1. What are some key intellectual property protections of Côte d'Ivoire and when do they expire? How do they compare to the intellectual property rights in the United States and what concerns would you have for a U.S. company doing business in this country?

About 40% of U.S. adults try to pad their insurance claims. Your office just received 128 insurance claims. What is the probability that (a) fewer than 45 cheat your insurance company and (b) from 40 to 64 cheat?