In 2018, Tom and Amanda Jackson (married filing jointly) have $200,000 of taxable income before considering the following events: (Use the dividends and capital gains tax rates and tax rate schedules.)

1. On May 12, 2018, they sold a painting (art) for $110,000 that was inherited from Grandma on July 23, 2016. The fair market value on the date of Grandma’s death was $90,000 and Grandma’s adjusted basis of the painting was $25,000.
2. They applied a long-term capital loss carryover from 2017 of $10,000.
3. They recognized a $12,000 loss on the 11/1/2018 sale of bonds (acquired on 5/12/2008).
4. They recognized a $4,000 gain on the 12/12/2018 sale of IBM stock (acquired on 2/5/2018).
5. They recognized a $17,000 gain on the 10/17/2018 sale of rental property (the only §1231 transaction) of which $8,000 is reportable as gain subject to the 25 percent maximum rate and the remaining $9,000 is subject to the 0/15/20 percent maximum rates (the property was acquired on 8/2/2012).
6. They recognized a $12,000 loss on the 12/20/2018 sale of bonds (acquired on 1/18/2018).
7. They recognized a $7,000 gain on the 6/27/2018 sale of BH stock (acquired on 7/30/2009).
8. They recognized an $11,000 loss on the 6/13/2018 sale of QuikCo stock (acquired on 3/20/2011).
9. They received $500 of qualified dividends on 7/15/2018.
   
   After completing the required capital gains netting procedures, what will be the Jacksons’ 2018 tax liability?

In 2018, Tom and Amanda Jackson (married filing jointly) have $300,000 of taxable income before considering the following events: (Use the dividends and capital gains tax rates and tax rate schedules.)

1. On May 12, 2018, they sold a painting (art) for $122,500 that was inherited from Grandma on July 23, 2016. The fair market value on the date of Grandma’s death was $96,250 and Grandma’s adjusted basis of the painting was $27,500.
2. They applied a long-term capital loss carryover from 2017 of $11,250.
3. They recognized a $12,625 loss on the 11/1/2018 sale of bonds (acquired on 5/12/2008).
4. They recognized a $4,750 gain on the 12/12/2018 sale of IBM stock (acquired on 2/5/2018).
5. They recognized a $20,000 gain on the 10/17/2018 sale of rental property (the only §1231 transaction) of which $10,000 is reportable as gain subject to the 25 percent maximum rate and the remaining $10,000 is subject to the 0/15/20 percent maximum rates (the property was acquired on 8/2/2012).
6. They recognized a $13,250 loss on the 12/20/2018 sale of bonds (acquired on 1/18/2018).
7. They recognized a $7,625 gain on the 6/27/2018 sale of BH stock (acquired on 7/30/2009).
8. They recognized an $12,250 loss on the 6/13/2018 sale of QuikCo stock (acquired on 3/20/2011).
9. They received $1,000 of qualified dividends on 7/15/2018.
   
   After completing the required capital gains netting procedures, what will be the Jacksons’ 2018 tax liability? (Do not round intermediate calculations.)

1. Calculate the average return over the last 3 years.

2. Calculate the standard deviation of your company’s returns over the last 3 years.

[I will make sure to give thumbs up to those who answer]

After being in business for 3 years, Franco Ltd. realised that its warehouse facility was inadequate. The company decided to construct a new building to expand its warehouse capabilities.

To finance this venture, Franco Ltd. acquired a loan of $2,000,000 on January 1, 2018, with an interest rate of 10% payable annually. Construction on the new building started on January 1, 2018 with a projected completion date of December 31, 2018.

During the year, the company’s expenditure schedule for the new building was as follows:

February 1, 2018: $960,000

May 31, 2018: $1,200,000

July 1, 2018: $750,000

September 30, 2018: $800,000

November 1, 2018: $720,000

The company had 2 other debts outstanding on January 1, 2018:

$3,000,000 8%, 7 year note, interest payable annually.

$1,500,000 12%, 10 year bond, interest payable per annum.

Franco Ltd. Financial year ends December 31.

Required:
a) Compute the following. Round interest rate percentages calculated to 1 decimal place.

i. Weighted Average Accumulated Expenditure (WAAE).

ii. Actual Interest.

iii. Avoidable interest.

b) What amount of interest should be capitalised in 2018 in relation to the construction of the building?

c) Prepare the journal entry to record capitalisation of interest and the recognition of interest expense, if any, at December 31, 2018.

On January 1, 2018, Twister Enterprises, a manufacturer of a variety of transportable spin rides, issues $430,000 of 6% bonds, due in 20 years, with interest payable semiannually on June 30 and December 31 each year.

Required:

1. If the market interest rate is 6%, the bonds will issue at $430,000. Record the bond issue on January 1, 2018, and the first two semiannual interest payments on June 30, 2018, and December 31, 2018. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

2. If the market interest rate is 7%, the bonds will issue at $384,087. Record the bond issue on January 1, 2018, and the first two semiannual interest payments on June 30, 2018, and December 31, 2018. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

3. If the market interest rate is 5%, the bonds will issue at $483,971. Record the bond issue on January 1, 2018, and the first two semiannual interest payments on June 30, 2018, and December 31, 2018. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Donnie Hilfiger has two classes of stock authorized: $1 par preferred and $0.01 par value common. As of the beginning of 2018, 460 shares of preferred stock and 5,600 shares of common stock have been issued. The following transactions affect stockholders’ equity during 2018:

March 1 Issues 2,700 shares of common stock for $58 per share.

May 15 Purchase 560 shares of treasury stock for $51 per share.

July 10 Reissues 360 shares of treasury stock purchased on May 15 for $56 per share.

October 15 Issues 360 shares of preferred stock for $61 per share.

December 1 Declare a cash dividend on both common and preferred stock of $2.10 per share to all stockholders of record on December 15. (Hint: Dividends are not paid on treasury stock.)

December 31 Pay the cash dividends declared on December 1.

Donnie Hilfiger has the following beginning balances in its stockholders’ equity accounts on January 1, 2018: Preferred Stock, $460; Common Stock, $56; Additional Paid-in Capital, $84,000; and Retained Earnings, $33,700. Net income for the year ended December 31, 2018, is $14,000.

Record each of these transactions:

march 1 2018

may 15 2018

july 10 2018

oct 15 2018

dec 01 2018

dec 15 2018

dec 31 2018

Crane Company's balance sheet accounts as of December 31, 2018 and 2017 and information relating to 2018 activities are presented below.

Information relating to 2018 activities:

• Net income for 2018 was $1480000.
• Cash dividends of $598000 were declared and paid in 2018.
• Equipment costing $980000 and having a carrying amount of $318000 was sold in 2018 for $358000.
• A long-term investment was sold in 2018 for $318000. There were no other transactions affecting long-term investments in 2018.
• 20000 shares of common stock were issued in 2018 for $25 a share.
• Short-term investments consist of treasury bills maturing on 6/30/19.

Net cash provided by Crane’s 2018 operating activities was

On January 1, 2018, Canseco Plumbing Fixtures purchased equipment for $58,000. Residual value at the end of an estimated four-year service life is expected to be $10,000. The company expects the machine to operate for 15,000 hours. The machine operated for 3,600 and 4,400 hours in 2018 and 2019, respectively.

a. Calculate depreciation expense for 2018 and 2019 using straight line method. (don't need)
b. Calculate depreciation expense for 2018 and 2019 using sum-of-the-years'-digits method.

C. Calculate depreciation expense for 2018 and 2019 using double-declining balance method.

d. Calculate depreciation expense for 2018 and 2019 using units-of-production method (using machine hours).
  

(Round "Depreciation per machine hour" answers to 2 decimal places.)

Based on the Trial Balance below and the Statement of Retained Earnings create a Balance Sheet Statement:

Company A started at the beginning of 2019.
They entered into a lease with Jan 1st as both inception and commencement date
The Lease term is as below
- 5 yr non-cancellable
- 5% interest rate
- equal payment of $22916.51 at the end of each year
- $1,000 bargaining purchase option at the end of lease term
The useful life of this asset is 6 years with 0 residual value

Tax rate 25%, 30% and 35% each of the year

Earnings before interest, amortization and taxes for each year
2019         $123,456
2020         $234,567
2021         $345,678

Required:
a) Prepare an amortization table for the lease
b) Record all related Journal entries
c) Complete the balance sheet
d) If instead of lease, company A pays $6,000/year rental to use the same equipment
what impact would this make?