Why is it considered risker to own stock in a software company than to hold U.S. Treasury savings bonds? Which asset will generate higher return? Why do people say "A dollar today is worth more than a dollar tomorrow?"

At the beginning of 2020, Braun Corporation had the following stockholders’ equity balances in its general ledger:
Common Stock, $10 Par Value $400,000

Paid-In Capital in Excess of Par: Common $600,000

Paid-In Capital, Treasury Stock $5,000

Paid-In Capital, Stock Options    $200,000

Retained Earnings    $1,200,000

Treasury Stock (5,000 shares) $(100,000)

_____________________________________

Total Stockholders’ Equity $2,305,000

The paid-in capital from stock options relates to options granted on 1/1/12 to the CEO as incentive compensation. As of 1/1/20, the remaining expected benefit period is four years; expense has been and will be recorded evenly over the benefit period.
The following events were among the many occurring in 2020:
a. January 2: Purchased 5,000 shares of its common stock for $16 per share. Braun uses the cost method of accounting for treasury stock transactions.
b. February 1: Declared and distributed a 10% stock dividend on common stock outstanding when the market price of the stock was $13 per share.
c. April 1: Issued 20,000 shares of $50 par, noncumulative, convertible 6% preferred stock for $60 per share, where one share of preferred stock is convertible into two shares of common stock.
d. July 1: 2,000 shares of treasury stock that had been purchased in a prior year for $21 per share were re-issued for $12 per share.
e. August 1: Holders of 8,000 shares of the preferred stock converted their shares into common stock when the market value of the common stock was $22 per share. Braun uses the book value method of accounting for conversions.
f. October 1: Declared and paid a cash dividend of $3 per share on the outstanding common stock.
g. November 1: Corrected an error that was made several years ago, when land that had been purchased for $60,000 was inadvertently expensed.
h. December 1: Declared and distributed a property dividend of land to preferred shareholders. The land had a fair value of $75,000 and a carrying value of $80,000.
i. December 31: Recorded 2020 compensation expense related to the stock options.

The 2020 Final Net Income, including the effects of any net income items listed above (and the 2020 tax effects on net income items), was $1,000,000. There were 500,000 shares authorized for both preferred and common stock.

Required: 1. All journal entries for the items (a. through i.) above.
2. The 12/31/20 Stockholders’ Equity section.

At December 31, 2020, Cord Company's plant asset and accumulated depreciation and amortization accounts had balances as follows

Depreciation methods and useful lives:
Buildings—150% declining balance; 25 years.
Equipment—Straight line; 10 years.
Automobiles and trucks—200% declining balance; 5 years, all acquired after 2017.
Leasehold improvements—Straight line.
Land improvements—Straight line.

Depreciation is computed to the nearest month and residual values are immaterial. Transactions during 2021 and other information:

1. On January 6, 2021, a plant facility consisting of land and building was acquired from King Corp. in exchange for 35,000 shares of Cord's common stock. On this date, Cord's stock had a fair value of $60 a share. Current assessed values of land and building for property tax purposes are $255,000 and $595,000, respectively.
2. On March 25, 2021, new parking lots, streets, and sidewalks at the acquired plant facility were completed at a total cost of $252,000. These expenditures had an estimated useful life of 12 years.
3. The leasehold improvements were completed on December 31, 2017, and had an estimated useful life of eight years. The related lease, which would terminate on December 31, 2023, was renewable for an additional four-year term. On April 30, 2021, Cord exercised the renewal option.
4. On July 1, 2021, equipment was purchased at a total invoice cost of $335,000. Additional costs of $11,000 for delivery and $60,000 for installation were incurred.
5. On September 30, 2021, Cord purchased a new automobile for $13,500.
6. On September 30, 2021, a truck with a cost of $25,000 and a book value of $11,000 on date of sale was sold for $12,500. Depreciation for the nine months ended September 30, 2021, was $2,475.
7. On December 20, 2021, equipment with a cost of $22,000 and a book value of $3,225 at date of disposition was scrapped without cash recovery

For each asset category, prepare a schedule showing depreciation or amortization expense for the year ended December 31, 2021. (Do not round intermediate calculations. Round your final answers to nearest whole dollar.)

TARTAN LTD. is a company operating in Nova Scotia. Currently, the company uses the following two CCA classes. Class 8 (CCA rate 35%) Class 5 (CCA rate 20%) During 2019, the company purchased $85,000 worth of Class 8 assets and $200,000 worth of Class 5 assets. Calculate TARTAN LTD’s total CCA in 2019 and 2020 due to these two purchases.

The Grilton Tire Company manufactures racing tires for bicycles. Grilton sells tires for $50 each. Grilton is planning for next year (2020) by developing a master budget by quarters. Grilton’s balance sheet for December 31, 2019 follows:

GRILTON TIRE COMPANY

Balance Sheet

December 31, 2019

Assets

Current Assets:

  Cash                                                                                           $  39,000

  Accounts Receivable                                                                   40,000

  Raw Materials Inventory                                                               2,400

  Finished Goods Inventory                                                            8,700

  Total Current Assets                                                                                              $ 90,100

Property, Plant and Equipment:

  Equipment                                                                                 177,000

  Less: Accumulated Depreciation                                            (42,000)                135,000

Total Assets                                                                                                               $225,100

Liabilities

Current Liabilities:

  Accounts Payable                                                                                                  $  8,000

Stockholder’s Equity

Common Stock, no par                                                           $ 130,000

Retained Earnings                                                                         87,100

  Total Stockholder’s Equity                                                                                  217,100

Total Liabilities and Stockholder’s Equity                                                          $225,100

Other data for Grilton Tire Company:

1. Budgeted Sales are 1,500 for the first quarter and expected to increase by 200 tires per quarter. Cash Sales are expected to be 30% of total sales, with the remaining 70% of sales on account.
2. Finished Goods Inventory on December 31, 2019 consists of 300 tires at $29 each.
3. Desired ending Finished Goods Inventory is 40% of the next quarter’s sales; first quarter sales for 2020 are expected to be 2,300 tires and second quarter sales for 2020 are expected to be 2,500.  FIFO inventory costing method is used.
4. Direct Materials cost is $8 per tire.
5. Desired ending Raw Materials Inventory is 30% of the next quarter’s direct materials needed for production.
6. Each tire requires 0.40 hours of direct labor; direct labor costs average $16 per hour.
7. Variable manufacturing overhead is $2 per tire produced.
8. Fixed manufacturing overhead includes $4,500 per quarter in depreciation and $26,780 per quarter for other costs, such as utilities, insurance, and property taxes.
9. Fixed selling and administrative expenses include $8,000 per quarter for salaries; $1,800 per quarter for rent; $1,200 per quarter for insurance; and $500 per quarter for depreciation.
10. Variable selling and administrative expenses include supplies at 2% of sales.
11. Capital expenditures include $45,000 for new manufacturing equipment, to be purchased and paid in the first quarter.
12. Cash receipts for sales on account are 60% in the quarter of sale and 40% in the quarter following the sale. The December 31, 2019 Accounts Receivable ($40,000) is received in the first quarter of 2020.
13. Direct materials purchases are paid 70% in the quarter purchased and 30% in the following quarter. The December 31, 2019 Accounts Payable ($8,000) is paid in the first quarter of 2020.
14. Direct labor, manufacturing overhead, and selling and administrative costs are paid in the quarter incurred.
15. Income tax expense is projected at $3,500 per quarter and is paid in the quarter incurred.
16. Grilton desires to maintain a minimum cash balance of $35,000 and borrows from the local bank as needed in increments of $1,000 at the beginning of the quarter; principal repayments are made at the beginning of the quarter when excess funds are available and in increments of $1,000; interest is 6% per year and paid at the beginning of the quarter based on the amount outstanding from the previous quarter. Interest must be paid at the beginning of each quarter.

• 1	Grilton Tire Company
  	Sales Budget
  	For the Year Ended December 31, 2020
  		Quarter 1	Quarter 2	Quarter 3	Quarter 4	Total
  	Budgeted tires to be sold	1500	1700	1900	2100	7200
  	Selling price per unit	$               50	$               50	$               50	$               50	$               50
  	Total sales $	75000	85000	95000	105000	360000
  2	Grilton Tire Company
  	Schedule of Expected Cash Collections
  	For the Year Ended December 31, 2020
  		Quarter 1	Quarter 2	Quarter 3	Quarter 4	Total
  	Sales $	75000	85000	95000	105000	360000
  	Cash sales collections (30%)	22500	25500	28500	31500	108000
  	Collections for credit sales of:
  	Previous quarter (40%)	40000	21000	23800	26600	111400
  	Current quarter (60%)	31500	35700	39900	44100	151200
  	Collection on credit sales	71500	56700	63700	70700	262600
  	Total cash collections $	94000	82200	92200	102200	370600
  3	Grilton Tire Company
  	Production Budget
  	For the Year Ended December 31, 2020
  		Quarter 1	Quarter 2	Quarter 3	Quarter 4	Total
  	Budgeted tires to be sold	1500	1700	1900	2100	7200
  	Add: Desired ending FG inventory	680	760	840	920	920
  	Total tires needed	2180	2460	2740	3020	8120
  	Less: Beginning FG inventory	300	680	760	840	300
  	Budgeted tires to be produced	1880	1780	1980	2180	7820

All else equal, an appreciation of the U.S. dollar against the euro makes

       $405,000 translation debit
       $405,000 remeasurement credit
       $405,000 translation credit
       $405,000 remeasurement debit

Review Case 7-2 Portofino Company. Address the three questions at the end of the case. Summarize your findings in a 3-5-page paper. Be sure to properly cite your resources using APA style.

Portofino Company made purchases on account from three foreign suppliers on December 15, 2012, with payment made on January 15, 2013. Information related to these purchases is as follows:

Portofino Company’s fiscal year ends December 31.

Required:

1. Use historical exchange rate information available on the Internet at www.oanda.com to find interbank exchange rates between the U.S. dollar and each foreign currency for the period December 15, 2012, to January 15, 2013.
2. Determine the foreign exchange gains and losses that Portofino would have recognized in net income in 2012 and 2013, and the overall foreign exchange gain or loss for each transaction. Determine for which transaction it would have been most important for Portofino to hedge its foreign exchange risk.
3. Portofino could have acquired a one-month call option on December 15, 2012, to hedge the foreign exchange risk associated with each of the three import purchases. In each case, the option would have had an exercise price equal to the spot rate at December 15, 2012, and would have cost $200. Determine for which hedges, if any, Portofino would have recognized a net gain on the foreign currency option.