The following data relates to Rogers Company for the year ending December 31, 2020:

Net Income for 2020= $920,000

Preferred Stock= 10,000 shares of $100 par 8% cumulative preferred stock were outstanding throughout the year. The preferred stock is non-convertible

Common Stock= 300,000 shares of common stock were issued and outstanding throughout the year. No shares were issued or repurchased, and there were no stock splits or dividends.

Convertible Bonds= 12% convertible bonds at $4,000,000 face amount. (These bonds were issued in 2015 and they are convertible to a total of 120,000 common shares.

Stock Options=500,000 (These options were issued on July 1, 2020. Each option allows the option holder to purchase one common share for $20. The average market price of the common stock in 2020 was $32 a share.

Other information:

Rogers income tax rate for 2020 is 40%

Rogers did not declare or pay any dividends in 2020

Question:

a. What is Rogers "Income available to common shareholders" for 2020?

b. What is Rogers "Weighted average common shares outstanding" for 2020?

c. Compute Rogers Basic Earnings Per Share for 2020?

d. What will be the "Numerator Effect of the convertible bonds?

e. What will be the "Denominator Effect" of the convertible bonds?

f. What will be the "Numerator Effect" of the stock options?

g. What will be the "Denominator Effect" of the stock options?

h. Compute Rogers Diluted Earnings Per Share for 2020?

At January 1, 2020, the credit balance of Whispering Winds Corp.’s Allowance for Doubtful Accounts was $401,000. During 2020, the bad debt expense entry was based on a percentage of net credit sales. Net sales for 2020 were $80 million, of which 90% were on account. Based on the information available at the time, the 2020 bad debt expense was estimated to be 0.75% of net credit sales. During 2020, uncollectible receivables amounting to $508,500 were written off against the allowance for doubtful accounts. The company has estimated that at December 31, 2020, based on a review of the aged accounts receivable, the allowance for doubtful accounts would be properly measured at $530,500.

Prepare a schedule calculating the balance in Whispering Winds Corp.’s Allowance for Doubtful Accounts at December 31, 2020.

Prepare any necessary journal entry at year end to adjust the allowance for doubtful accounts to the required balance. (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.)

The controller for Clint Swifty Co. is attempting to determine the amount of cash to be reported on its December 31, 2020, balance sheet. The following information is provided.

1. Commercial savings account of $690,500 and a commercial checking account balance of $812,900 are held at First National Bank of Yojimbo.

2. Money market fund account held at Volonte Co. (a mutual fund organization) permits Swifty to write checks on this balance, $5,228,200. 3. Travel advances of $194,800 for executive travel for the first quarter of next year (employee to reimburse through salary reduction).

4. A separate cash fund in the amount of $1,493,000 is restricted for the retirement of long-term debt.

5. Petty cash fund of $1,750.

6. An I.O.U. from Marianne Koch, a company customer, in the amount of $166,700.

7. A bank overdraft of $116,700 has occurred at one of the banks the company uses to deposit its cash receipts. At the present time, the company has no deposits at this bank.

8. The company has two certificates of deposit, each totaling $537,300. These CDs have a maturity of 120 days.

9. Swifty has received a check that is dated January 12, 2021, in the amount of $131,320.

10. Swifty has agreed to maintain a cash balance of $514,800 at all times at First National Bank of Yojimbo to ensure future credit availability.

11. Swifty has purchased $2,005,100 of commercial paper of Sergio Leone Co. which is due in 60 days.

12. Currency and coin on hand amounted to $7,949. (a) Compute the amount of cash and cash equivalents to be reported on Swifty Co.’s balance sheet at December 31, 2020.

The amount of Cash and Cash Equivalents reported on December 31, 2020 $

1. It is April 2019. A US company needs to borrow $100,000,000 for three months starting five months from now. The current 3-month LIBOR is 2.5%. The company is afraid that rates may rise during those five months before it obtains the loan. Should the company buy or sell Eurodollar futures? And how many (ignoring the present value of the basis point change)?

Which month should the futures settle/expire?

Assume that the appropriate Eurodollar future is trading at 97.4. What interest does the company pay if the 3-month LIBOR rate finishes at 95 (factoring in the gain/loss of the Eurodollar futures contracts)? Or finishes at 98? Assume each month has 30 days.

Flint Inc. reports accounting income of $106,200 for 2020, its first year of operations. The following items cause taxable income to be different than income reported on the financial statements.

Assume that the company follows the taxes payable method of accounting for income taxes under ASPE. During the year, Flint Inc. made tax instalment payments of $46,910.

QUESTIONS:

A) Calculate the taxable income and income tax expense for the year ended December 31, 2020.

B) Prepare the journal entry to record income taxes at December 31, 2020.

C) Prepare the income statement for 2020, beginning with the line “Income before income tax.”

D) Provide the balance sheet presentation for any resulting income tax accounts at December 31, 2020.

Use this case study to answer the questions below.

CASE CHAPTER 1: INTRODUCTION TO RESEARCH THE LAROCHE CANDY COMPANY

In 1864 Henricus Laroche started making high-quality chocolate in his kitchen in Ooigem, Belgium. Henricus learned his trade at a famous chocolate shop in Paris, and he and his wife began to make chocolate in bars, wafers and other shapes soon after Henricus had returned to Belgium to start his own business. The Belgian people loved Laroche’s chocolate and the immediate success soon caused him to increase his production facilities. Henricus decided to build a chocolate factory in Kortrijk, a nearby city in the Flemish province West Flanders. With mass-production, the company was able to lower the per-unit costs and to make chocolate, once a luxury item, affordable to everybody. The Laroche Candy Company flourished, expanded its product lines and acquired related companies during the following decades. Within a century the company had become Belgium’s leading candy-manufacturer employing over 2,500 people. Today, The Laroche Candy Company is one of the biggest manufacturers of chocolate and non-chocolate confectionery products in Europe. Under the present leadership of Luc Laroche the company has become truly innovative. What’s more, the company has adopted a very proactive approach to marketing planning and is therefore a fierce competitor in an increasingly global marketplace. The number of products the company produces and markets has increased dramatically; at this moment there are more than 250 Laroche Candy items distributed internationally in bulk, bags, and boxes. Luc Laroche, born in 1946, is the fifth generation of his family to lead The Laroche Candy Company. He is the great-great-grandson of company founder Henricus Laroche and the current Chairman and CEO of the company. But Luc is nearing retirement. He has planned to stop working in two to three years. Whereas stepping back from power is a very difficult thing to do for a lot of people, it is an easy thing to do for Luc: He is looking forward to spending time with his grand-children and to driving his Harley Davidson across Europe. What’s more, he has never found the time to play golf, and he is planning to spend “three whole summers learning it” if necessary. And yet, even though ‘letting go’ is not a problem for Luc, he still has his worries about his imminent retirement. As in most family businesses, Luc’s two children spent their share of summers working for the company. Luc’s oldest son Davy has repeatedly worked for the accounting department whereas Davy’s younger brother Robert has infrequently worked in the field. However, they have never shown a serious interest in the business. Davy, who is 35, currently works as an associate professor of management accounting at a reputable university in Belgium. Robert, aged 32, lives in Paris and has been working as a photographer for the last ten years. About twelve years ago, Robert told his dad, "I know you'd like me to come in the business, but I've got my own path to travel." Luc recalls responding that he respects that and that he does not want Robert to feel constrained; “I just want you to be happy” is what he has told Robert on that particular occasion. Ever since this conversation with Robert, Luc has put his hopes on Davy. A few days ago, Luc has invited Davy to have dinner at the famous restaurant “In de Wulf” in Dranouter, Belgium to discuss the future of the Laroche Candy Company. He wants to talk about his retirement and a succession plan for the company with Davy, who has serious doubts about taking over the company. Davy knows that for his dad the company is his life and like his dad, he wants the company to be successful in the future; but he just does not know whether it is a good idea to take over from his father. In an effort to maintain a balanced perspective on the issue, Davy has done some research on it. Hence, he has become very familiar with statistics about the failure rate of family transitions. These statistics have triggered numerous concerns and fears about taking over the company from his father. Luc and Davy discuss the future of the company during a memorable dinner in Dranouter. Luc tells Davy that he wants his son to take over the company, but Davy explains that he has qualms. He brings up his doubts and fears and alternatives such as going public, selling to a strategic acquirer or investor, or selling to employees through an employee stock ownership plan. Luc hardly listens to Davy’s concerns and strikes a blow for family business. “History is full of examples of spectacular ascents of family business,” he said after the waiter has refilled his glass for the fourth time in just over an hour, “the Rothschilds, the Murdochs, the Waltons, and the Vanderbilts, to name only a few. The Rothschilds, for instance, not only accumulated the largest amount of private wealth the Western world has ever seen, they also changed the course of history by financing kings and monarchs. Did you know that they supported Wellington’s armies, which ultimately led to the defeat of Napoleon at Waterloo? I bet you didn’t.” Davy raised an eyebrow. “I didn’t. But what I do know”, he replied, “is that only fifty years after the death of Cornelius Vanderbilt, who created a fortune in railroads and shipping, several of his direct descendants were flat broke. Apparently the Vanderbilts had both a talent for acquiring and spending money in unmatched numbers.” Davy leaned in closer toward his father. “Seriously dad, I do believe that strong family values are very important but I also feel that they may place restraints on the development of the company. It is commonly known that familism in Southern Italy is one of the main reasons for the slower economic development of the south relative to the north.” Luc sighed and looked at his son. “So, what does this all mean?” “Well, I think that the key question is whether family firms evolve as an efficient response to the institutional and market environment, or whether they are an outcome of cultural norms that might be harmful for corporate decisions and economic outcomes”, Davy replied with a gentle smile. “Don’t you think so?” “I … um … I guess I do.” Luc smiled back at his son. “I am not sure that I understand what you mean, but it sounds great. Let’s throw some money at it and hire a consultant who knows something about this. I’ll call McKinsey first thing tomorrow morning. Cheers.” “Cheers dad”, Davy echoed lifting his glass. Two weeks later, Paul Thomas Anderson, a senior McKinsey consultant, put forward the following problem statement in a meeting with Luc Laroche: What are the implications of family control for the governance, financing, and overall performance of the Laroche Candy Company?

QUESTIONS

1. What is business research?

2. Why is the project that Paul Thomas Anderson is doing for The Laroche Candy Company a research project?

3. Which steps will Paul take now that he has clearly defined the problem that needs attention?

4. Luc Laroche has decided to hire an external consultant to investigate the problem. Do you think that this is a wise decision or would it have been better to ask his son Davy or an internal consultant to do the research project?

5. What can (or should) Luc do to assist Paul to yield valuable research results?

6. How can basic or fundamental research help Paul to solve the specific problem of The Laroche Candy Company?

7. Try to find relevant books, articles, research reports and this issue. Use, among others, electronic resources of your library and/or the internet.

the construction activity for the year-end 31 December 2020, are as follows:

Required:

1) Prepare a schedule by project, showing clearly the amount of gross profit (loss) of the project before deducting selling, general, and administrative expenses for the year ended 31 December 2020 using the percentage-of-completion method.(based on estimated costs.)

2)Based on the schedule, show the amount of gross profit ( or loss) before selling, general,and administrative expenses for the year ended 31 December 2020, which would be reported if the following method are used:

(I) the cost-recovery method.

(II) The percentage-of-completion method ( based on estimated costs)

3) Determine the construction in process balance that would appear in the statement of financial position of the company as at 31/12/2020 for the project AA, assuming that the precentage-of-completion method is used. show all the working.

Power Corporation acquired 100 percent ownership of Scrub Company on February 12, 20X9. At the date of acquisition, Scrub Company reported assets and liabilities with book values of $430,000 and $184,000, respectively, common stock outstanding of $86,000, and retained earnings of $160,000. The book values and fair values of Scrub’s assets and liabilities were identical except for land, which had increased in value by $16,000, and inventories, which had decreased by $7,000.

Required:
a. Prepare the following consolidation entries required to prepare a consolidated balance sheet immediately after the business combination assuming Power acquired its ownership of Scrub for $271,000. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

A.) Record the basic consolidation entry.

B.) Record the excess value (differential) reclassification entry.

b. Prepare the following consolidation entries required to prepare a consolidated balance sheet immediately after the business combination assuming Power acquired its ownership of Scrub for $242,000. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

A.) Record the basic consolidation entry.

B.)Record the excess value (differential) reclassification entry.

General, Inc. leases equipment to different types of businesses. The company generally acquires the equipment and leases the equipment to its customers under long-term sales-type leases. General’s implicit interest in the lease arrangements is 10% annual rate.

General leased its machine that it purchased for $30,900 to a lessee, Oscar Company on January 1, 2018. The lease contract specified annual payments of $8,000 beginning January 1, 2018, the beginning of the lease, and each January 1 through 2020 (three-year lease term). Oscar Company has the option to purchase the machine at the end of the lease term, December 31, 2020, for $12,000 when it is expected to have a residual value of $16,000, considered a bargain purchase amount. The Company’s year-end is 12/31.

Required:

1. Show how General calculated the $8,000 annual lease payments for this sales-type lease.

2. Prepare an amortization schedule that describes the pattern of interest revenue for General, Inc. over the lease term.

3. Prepare the appropriate entries for General, Inc. from the beginning of the lease through the end of the lease term.