1)
On April 10, a company acquired land in exchange for 1,000 shares of $20 par common stock with a current market price of $73. Journalize this transaction.


2)
A corporation purchased for cash 5,000 shares of its own $10 par common stock at $34 a share. In the following year, it sold 2,000 of the treasury shares at $38 a share for cash.
a) Journalize the entries to record the purchase (treasury stock is recorded at cost)
b) Journalize the entries to record the sale of the stock.


3)
Using the following accounts and balances, prepare the Stockholders' Equity section of the balance sheet. 50,000 shares of common stock are authorized and 5,000 shares have been reacquired.

Common stock, $50 par $1,500,000
Paid In Capital in excess of par $ 250,000
Paid in capital from sale of Treasury stock $42,000
Retained Earnings 4,350,000
Treasury Stock 155,000

Prince Corporation acquired 100 percent of Sword Company on January 1, 20X7, for $183,000. The trial balances for the two companies on December 31, 20X7, included the following amounts:

	Prince Corporation									Sword Company
Item	Debit				Credit					Debit				Credit
Cash		$	88,000								$	27,000
Accounts Receivable			53,000									58,000
Inventory			182,000									120,000
Land			86,000									22,000
Buildings and Equipment			491,000									155,000
Investment in Sword Company			233,000
Cost of Goods Sold			491,000									258,000
Depreciation Expense			21,000									11,000
Other Expenses			62,000									62,000
Dividends Declared			55,000									23,000
Accumulated Depreciation						$	139,000								$	55,000
Accounts Payable							54,000									30,000
Mortgages Payable							187,000									117,000
Common Stock							286,000									43,000
Retained Earnings							331,000									84,000
Sales							692,000									407,000
Income from Sword Company							73,000
		$	1,762,000			$	1,762,000				$	736,000			$	736,000
Additional Information On January 1, 20X7, Sword reported net assets with a book value of $127,000. A total of $23,000 of the acquisition price is applied to goodwill, which was not impaired in 20X7. Sword’s depreciable assets had an estimated economic life of 11 years on the date of combination. The difference between fair value and book value of tangible assets is related entirely to buildings and equipment. Prince used the equity-method in accounting for its investment in Sword. Detailed analysis of receivables and payables showed that Sword owed Prince $25,000 on December 31, 20X7. Additional Information On January 1, 20X7, Sword reported net assets with a book value of $127,000. A total of $23,000 of the acquisition price is applied to goodwill, which was not impaired in 20X7. Sword’s depreciable assets had an estimated economic life of 11 years on the date of combination. The difference between fair value and book value of tangible assets is related entirely to buildings and equipment. Prince used the equity-method in accounting for its investment in Sword. Detailed analysis of receivables and payables showed that Sword owed Prince $25,000 on December 31, 20X7. Required: a. Prepare all journal entries recorded by Prince with regard to its investment in Sword during 20X7. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) b. Prepare all consolidating entries needed to prepare a full set of consolidated financial statements for 20X7. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Company B acquired the following piece of equipment. Your staff accountant computed the book and tax depreciation. It is up to you to determine the deferred tax amounts.

Equipment cost	$50,000
Salvage	5,000
Useful life	5
Tax rate	21%

Depreciation for book and tax purposes is as follows:

	Book	Tax
20X1	9,000	20,000
20X2	9,000	12,000
20X3	9,000	7,200
20X4	9,000	4,320
20X5	9,000	1,480

What is the deferred taxes payable balance as of December 31, 20X3?

On January 1, 2017, Corgan Company acquired 70 percent of the outstanding voting stock of Smashing, Inc., for a total of $1,155,000 in cash and other consideration. At the acquisition date, Smashing had common stock of $840,000, retained earnings of $390,000, and a noncontrolling interest fair value of $495,000. Corgan attributed the excess of fair value over Smashing's book value to various covenants with a 20-year remaining life. Corgan uses the equity method to account for its investment in Smashing.Net IncomeDividends DeclaredInventory Purchases from Corgan2017$290,000$49,000$240,0002018270,00059,000260,000Corgan sells inventory to Smashing using a 60 percent markup on cost. At the end of 2017 and 2018, 40 percent of the current year purchases remain in Smashing's inventory.A.

Compute the equity method balance in Corgan's Investment in Smashing, Inc., account as of December 31, 2018.B. Prepare the worksheet adjustments for the December 31, 2018, consolidation of Corgan and Smashing.Compute the equity method balance in Corgan's Investment in Smashing, Inc., account as of December 31, 2018.Investment balance 12/31/18Prepare the worksheet adjustments for the December 31, 2018, consolidation of Corgan and Smashing. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Cascade Company was started on January 1, Year 1, when it acquired $160,000 cash from the owners. During Year 1, the company earned cash revenues of $90,400 and incurred cash expenses of $62,500. The company also paid cash distributions of $7,000. Required Prepare a Year 1 income statement, capital statement (statement of changes in equity), balance sheet, and statement of cash flows under each of the following assumptions. (Consider each assumption separately.)

a. Cascade is a sole proprietorship owned by Carl Cascade.

Complete this question by entering your answers in the tabs below.

• Inc Stmt
• Stmt of Changes
• Bal Sheet
• Cash Flows

Cascade Company was started on January 1, Year 1, when it acquired $153,000 cash from the owners. During Year 2, the company earned cash revenues of $93,300 and incurred cash expenses of $69,700. The company also paid cash distributions of $14,000. Required Prepare a Year 1 income statement, capital statement (statement of changes in equity), balance sheet, and statement of cash flows under each of the following assumptions. (Consider each assumption separately.)

c. Cascade is a corporation. It issued 10,000 shares of $11 par common stock for $153,000 cash to start the business.

Income Stmt

Capital Stmt

Stmt of changes in equity

Balance Sheet

Stmt of cash flows

On January 1, 2019, Vaughn Company, a small machine-tool manufacturer, acquired for $2,100,000 a piece of new industrial equipment. The new equipment had a useful life of 5 years, and the salvage value was estimated to be $83,700. Vaughn estimates that the new equipment can produce 16,000 machine tools in its first year. It estimates that production will decline by 2,830 units per year over the remaining useful life of the equipment.

The following depreciation methods may be used: (1) straight-line, (2) double-declining-balance, (3) sum-of-the-years’-digits, and (4) units-of-output. For tax purposes, the class life is 7 years. Use the MACRS tables for computing depreciation.

(a1)

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

Compute accumulated depreciation under the following methods: (1) straight-line, (2) double-declining-balance, (3) sum-of-the-years’-digits, and (4) units-of-output for the 3-year period ending December 31, 2021. Ignore present value, income tax, and deferred income tax considerations. (Round cost per unit to 2 decimal places, e.g. 25.12. Round other intermediate calculations to 6 decimal places, e.g. 1.524687 amd final answers to 0 decimal places, e.g. 5,125.)

				Accumulated Depreciation
		Methods		2019		2020		2021
(1)		Straight-line		$		$		$
(2)		Double-declining-balance		$		$		$
(3)		Sum-of-the-years'-digits		$		$		$
(4)		Units-of-output		$		$		$

On 1 January 2019, Umi Bhd, a company incorporated in Malaysia, acquired 80% interest in Adeq Ltd, a company incorporated in Singapore whose functional and presentation currencies are Singapore Dollar (S$). At this date, Adeq Ltd’s net assets were represented by share capital of S$3,000,000; revaluation reserve of S$1,000,000, and retained profit of S$1,000,000. The functional and presentation currencies of Umi Bhd are Ringgit Malaysia (RM).

Required:

a) Advise the directors of UMI Bhd of how they should consolidate and translate the foreign subsidiary’s statement of comprehensive income for the year ended 31 December 2019 and the statement of financial position as at 31 December 2019 into the presentation currency of parent company.

b) Explain whether or not UMI Bhd (reporting entity) should be allowed to present its financial statements in a currency which is different from its functional currency.

c) Assume that on 1 April 2019, UMI Bhd has spent $10million on acquiring a US trading subsidiary, Zoro Ltd and at the year-end the net assets of the US trading subsidiary are also $10m. On consolidation by UMI Bhd, the $10million net assets of the US subsidiary are translated into RM and any foreign exchange differences are taken to reserves. This means that the group’s consolidated shareholders’ funds will fluctuate up and down as exchange rates move. Advise the directors of UMI Bhd on how to reduce the risk of translation differences. Give an example if necessary.

Joel Harvey Florists acquired a truck on January 1, 2007.  The company paid $11,000 for the truck, $500 for destination charges, and $250 to paint the company name on the side of the truck. The company’s accounting manager estimates the truck to have a five-year useful life and a residual value of $1,750. The truck is expected to be driven 100,000 miles in five years.  It is actually driven 15,000 miles in 2007, 25,000 miles in 2008, 30,000 miles in 2009, 25,000 miles in 2010, and 5,000 miles in 2011.

Part 1

On January 1, 2007, how much should Joel Harvey Florist capitalize for the cost of the truck? Write the journal entry.

Part 2

How much depreciation expenses that would be recorded for the years 2007 through 2011 using each of the following methods?

a.         Straight-line

b.         Unit-of-production

c.         Declining-balance

Part 3

On December 31, 2011, Joel Harvey sold the truck for $3,000 cash.  Compute the gain or loss on sale. Write the journal entry.

Albuquerque, Inc., acquired 24,000 shares of Marmon Company several years ago for $810,000. At the acquisition date, Marmon reported a book value of $880,000, and Albuquerque assessed the fair value of the noncontrolling interest at $270,000. Any excess of acquisition-date fair value over book value was assigned to broadcast licenses with indefinite lives. Since the acquisition date and until this point, Marmon has issued no additional shares. No impairment has been recognized for the broadcast licenses.

At the present time, Marmon reports $980,000 as total stockholders’ equity, which is broken down as follows:

Common stock ($10 par value)	$	320,000
Additional paid-in capital		440,000
Retained earnings		220,000
Total	$	980,000

View the following as independent situations:

Marmon sells 16,000 and 4,000 shares of previously unissued common stock to the public for $44 and $23 per share. Albuquerque purchased none of this stock. What journal entry should Albuquerque make to recognize the impact of this stock transaction? (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round your intermediate calculations.)