Question 10

Sheridan Company provides the following information about its defined benefit pension plan for the year 2020.

1. Prepare a pension worksheet inserting January 1, 2020, balances, showing December 31, 2020. (Enter all amounts as positive.)

2. Prepare the journal entry recording pension expense. (Credit account titles are automatically indented when 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.)

Metals Corporation reports pretax financial income of $260,000 for 2020. The following items cause taxable income to be different than pretax financial income: 1. Rental income on the income statement is less than rent collected on the tax return by $65,000. 2. Depreciation on the tax return is greater than depreciation on the income statement by $40,000. 3. Interest on an investment in a municipal bond of $6,500 on the income statement. Metal’s tax rate is 30% for all years, and the company expects to report taxable income in all future years. There are no deferred taxes at the beginning of 2020.

Compute taxable income and income taxes payable for 2020. (b) Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2020. (c) Prepare the income tax expense section of the income statement for 2020, beginning with the line “Income before income taxes.” (d) Compute the effective income tax rate for 2020.

On January 1, 2020, Sweet Company issued 10-year, $2,020,000 face value, 6% bonds, at par. Each $1,000 bond is convertible into 16 shares of Sweet common stock. Sweet’s net income in 2020 was $475,300, and its tax rate was 20%. The company had 97,000 shares of common stock outstanding throughout 2020. None of the bonds were converted in 2020.

(a) Compute diluted earnings per share for 2020. (Round answer to 2 decimal places, e.g. $2.55.)

(b) Compute diluted earnings per share for 2020, assuming the same facts as above, except that $970,000 of 6% convertible preferred stock was issued instead of the bonds. Each $100 preferred share is convertible into 5 shares of Sweet common stock. (Round answer to 2 decimal places, e.g. $2.55.)

The following facts relate to Oriole Corporation.

(b)

Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2020. (Credit account titles are automatically indented when 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.)

Prior to 2019, the accounting income and taxable income for Bridgeport Corporation were the same. On January 1, 2019, the company purchased equipment at a cost of $576,000. For accounting purposes, the equipment was to be depreciated over 9 years using the straight-line method. For income tax purposes, the equipment was subject to a CCA rate of 20% (half-year rule applies for 2019). Bridgeport’s income before tax for accounting purposes for 2020 was $1,892,000. The company was subject to a 25% income tax rate for all applicable years and anticipated profitable years for the foreseeable future. Bridgeport Corporation follows IFRS.

a) Calculate taxable income and taxes payable for 2020.

b) Prepare the journal entries to record 2020 income taxes (current and deferred). (If no entry is required, select "No Entry" )

Splish Company reports pretax financial income of $66,300 for 2020. The following items cause taxable income to be different than pretax financial income.

Splish’s tax rate is 30% for all years, and the company expects to report taxable income in all future years. There are no deferred taxes at the beginning of 2020.

1. Compute taxable income and income taxes payable for 2020.

2. Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2020.

3. Prepare the income tax expense section of the income statement for 2020, beginning with the line “Income before income taxes.”

4. Compute the effective income tax rate for 2020.

1. ABC Company is planning for 2021 financial performance. 2020 total sales were $6,000,000. Monthly fixed costs for the firm for 2020 averaged $260,000 and are expected to increase by 8% for 2021. The variable cost ratio for 2020 averaged 40% and is expected to increase to 42% for 2021. The firm's average tax rate for 2020 was 30% and is expected to remain the same for 2021. The firm incurs no interest expense.

Required: (show your work below and write your final answer for each question on the line provided)

1. Calculate annual breakeven sales (revenue) for 2020 and 2021

2. Calculate the actual net operating income (NOI) and the after tax income for 2020 and 2021 assuming there is no change in sales for 2021.

3. It is management's goal to have operations produce a NOI / Sales ratio of 12% for 2021. Given the data above what level of 2021 sales are needed to reach the 12% NOI / Sales ratio?

What are the appropriate descriptive statistics to summarize the Company-Z daily sales in Pre- and Post- COVID-19 Y1 & Y2?   Can you visualize both random variables separately using the graphing technique? Explain why you used these descriptive statistics and this graphing technique?               
Given;

Flint Company in its first year of operations provides the following information related to one of its available-for-sale debt securities at December 31, 2020.

Amortized cost $51,500

Fair value 43,000

Expected credit losses 12,800

1) What is the amount of the credit loss that Flint should report on this available-for-sale security at December 31, 2020?

Amount of the credit loss $ _____________

2) Prepare the journal entry to record the credit loss, if any (and any other adjustment needed), at December 31, 2020.

3) Assume that the fair value of the available-for-sale security is $56,000 at December 31, 2020, instead of $43,000. What is the amount of the credit loss that Flint should report at December 31, 2020?

Amount of the credit loss $ ___________

4) Assume the same information as for part (c). Prepare the journal entry to record the credit loss, if necessary (and any other adjustment needed), at December 31, 2020.

On January 1, 2020, Spalding Company sold 12% bonds having a maturity value of $1,000,000 for $1,075,815, which provides the bondholders with a 10% yield. The bonds are dated January 1, 2020 and they mature on January 1, 2025, with semiannual interest payable on July 1 and January 1 each year. The company uses the effective-interest method. Instructions:

a) Prepare a complete amortization schedule for these bonds in good form.

b) Prepare the journal entry needed to record the issuance of bonds on January 1, 2020.

c) Prepare the journal entry needed to record the payment accrual of interest on July 1, 2020. Show all calculations.

d) Determine how much interest expense will be on the income statement for the year ended December 31, 2020.

e) Show what will be on the balance sheet related to these transactions as of December 31, 2020. Indicate clearly if any assets or liabilities are current or noncurrent.