Pandemic Inc. provided the following comparative balance sheets for 2020 and 2019 and the 2020 income statement. Additional pertinent information is provided below.

- Fixed assets costing $8,000 with a book value of $3,000 were sold for $6,000.

- Long term investments costing $5,000 were sold for $5,000.

-Redeemed $5,000 of the bond issuance.

- Sold stock___________.

-Paid dividends_________.

All other transactions involved cash.

Be certain you have accounted for all the changes in the account line items somewhere in your 3 areas of SCF (ex. Fixed Assets account went from $28K to $40k - we did not just buy $12K this year....)

  2020     2019

Cash $30,000 $16,000

Acct Receivable 7,000                               5,000

Ppd Insurance 2,000 3,000

Inventory 13,000 11,000

L-T Investments 22,000                         27,000

Fixed Assets 40,000 28,000

Acc Depreciation 8,000                               6,000

Acct Payable 16,000                         14,000

Interest Payable 4,000                           ----000—

Taxes Payable 6,000 4,000

Bond Payable 20,000 25,000

Common Stock 21,000                         20,000

APIC 3,000                                      0

Retained Earnings 36,000                         21,000

Sales $120,000

-COGS   -   60,000

Gross Profit 60,000

- Operating Expenses   -   20,000  

Income from Operations 40,000

+/- Other

           Interest Expense -2,000

Gain on Sale of Equip +3,000        

Taxable Income 41,000

-Tax   -8,000

Net Income $33,000

Required: Prepare the Statement of Cash Flows for Operating, Investing and Financing using both the indirect and direct methods for Operating.

At the beginning of 2020, Cameron Company's retained earnings was $212,000. For 2020, Cameron has calculated its pretax income from continuing operations to be $120,000. During 2020, the following events also occurred:

1. During July, Cameron sold Division M (a component of the company). The book values of Division M’s assets and liabilities are $300,000 and $100,000, respectively, at the time of

sale. The company sold Division M for cash $159,500. During 2020 before its sale, Division M recognized revenues of 100,000 and expenses of 61,000 (excluding income tax expense).

2. Cameron had 21,000 shares of common stock outstanding during all of 2020. It declared and paid a $1 per share cash dividend on this stock.

3. Cameron also paid $7,500 cash dividend to its preferred stockholders.

Required:

Assuming that all the “pretax” items are subject to a 21% income tax rate:

1. Complete the lower portion of Cameron's 2020 income statement, beginning with “Pretax

Income from Continuing Operations.”

2. Prepare an accompanying retained earnings statement.

In January 2019, Miller Construction Corp. contracted to construct a building for $3,600,000. Construction started in early 2019 and was completed in 2020. The following additional information is available:

                                                                                          2019               2020

       Costs incurred...................................................... $1,458,000          $1,620,000

       Estimated costs to complete.................................. 1,560,000                         —

       Billed ……………………………………………….    1,700,000           1,900,000

       Collections during the year.................................... 1,440,000            2,160,000

Miller uses the percentage-of-completion method.

Instructions

Under the contract-based approach for percentage completion,

a) How much revenue should Miller report for 2019 and 2020?

b) Prepare all journal entries for 2019 and 2020 for this contract.

c)    What amounts would be presented on Miller’s December 31, 2019 Balance Sheet?

d)    What is the gross profit on the project for each of 2019 and 2020?

Pronghorn Company’s net income for 2020 is $53,200. The only potentially dilutive securities outstanding were 1,000 options issued during 2019, each exercisable for one share at $6. None has been exercised, and 10,700 shares of common were outstanding during 2020. The average market price of Pronghorn’s stock during 2020 was $25.

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

(b) Assume the same facts as those assumed for part (a), except that the 1,000 options were issued on October 1, 2020 (rather than in 2019). The average market price during the last 3 months of 2020 was $25. (Round answer to 2 decimal places, e.g. $2.55.)

On April 1, 2020, Mendoza Company (a U.S.-based company) borrowed 504,000 euros for one year at an interest rate of 5 percent per annum. Mendoza must make its first interest payment on the loan on October 1, 2020, and will make a second interest payment on March 31, 2021, when the loan is repaid. Mendoza prepares U.S. dollar financial statements and has a December 31 year-end. Prepare all journal entries related to this foreign currency borrowing assuming the following exchange rates for 1 euro:

The DeVille Company reported pretax accounting income on its income statement as follows:

   
Included in the income of 2018 was an installment sale of property in the amount of $62,000. However, for tax purposes, DeVille reported the income in the year cash was collected. Cash collected on the installment sale was $24,800 in 2019, $31,000 in 2020, and $6,200 in 2021.

Included in the 2020 income was $26,000 interest from investments in municipal bonds.

The enacted tax rate for 2018 and 2019 was 30%, but during 2019 new tax legislation was passed reducing the tax rate to 25% for the years 2020 and beyond.

Required:
Prepare the year-end journal entries to record income taxes for the years 2018, 2019,  2020 , 2021.

Assume that ACW Corporation has 2020 taxable income of $1,540,000 for purposes of computing the §179 expense. The company acquired the following assets during 2020 (assume no bonus depreciation): (Use MACRS Table 1, Table 2, and Table 5).

1. What is the maximum amount of §179 expense ACW may deduct for 2020?
2. What is the maximum total depreciation that ACW may deduct in 2020 on the assets it placed in service in 2020? (Round your intermediate calculations and final answer to the nearest whole dollar amount.)

Greek Tavern Co was established on July 1, 2020 by a cash investment of $100,000. The following is the Trial Balance prepared on September 30, 2020.

During the three month period, the following activities occurred: 1. The physical checkup revealed that $4,000 worth of supplies is still on hand on September 30. 2. The annual depreciation of office equipment is $15,000. The equipment were purchased on August 1, 2020. 3. The unearned revenue was created on September 1, 2020 by an advance payment from a major customer for services extending over the period August 1 till December 31, 2020. 4. The loan was borrowed on July 1, 2020 for 5 years from BOND Bank. The bank charges 9% interest. 5. The firm pays its 5 employees a weekly salary of $6250. The policy is that it pays every Monday of the week for the previous 5 days' work, Monday through Friday. September 30, 2020 is a Tuesday. Last time the firm paid salary was on Monday September 29, 2020 for the week from 22 till 25. 6. Rogelio paid $50,000 cash on July 1, 2020 for 2 years' office rent.

Rogelio Legal Advisory firm follows the fiscal year extending from July 1 till September 30 and adjust Quarterly.

A. Journalize all the necessary adjusting entries on September 30, 2020 showing all the calculations.

B. Compute the Net Income.

Use Worksheet 9.2. Ben West, a 35-year-old computer programmer, earns $57,000 a year. His monthly take-home pay is $3,000. His wife, Ashley, works part-time at their children's elementary school but receives no benefits. Under state law, Ashley's employer contributes to a workers' compensation insurance fund that would provide $2,050 per month for six months if Ben were disabled and unable to work.

1. Use Worksheet 9.2 to calculate Ben's disability insurance needs assuming that he won't qualify for Medicare under his Social Security benefits. Round your answer to the nearest whole.
   $
2. Based on your answer in part a, what would you advise Ben about his need for additional disability income insurance? Discuss the type and size of disability income insurance coverage he should consider, including possible provisions he might want to include. What other factors should he take into account if he decides to purchase a policy?