During 2018, Karan acquired the following assets for use in her sole proprietorship: Asset Cost Date Place in ServiceComputers & Info. System $400,00003/31/2018Assembly Equipment1,200,00008/15/2018Warehouse 700,00011/13/2018

a. What is the maximum amount of cost recovery Karen can claim with respect to these assets in 2018?

b. What is each asset’s adjusted basis as of December 31, 2018?

c. Assume Karan sells the warehouse on May 5, 2020. What will Karan’s adjusted basis in the warehouse be for purposes of determining her gain or loss on the sale?

Mercer Corporation acquired $400,000 of Park Company’s bonds on June 30, 2018, for $409,991.12. The bonds carry a 12% stated interest rate and pay interest semiannually on June 30 and December 31. The appropriate market interest rate is 11%, and the bonds are due June 30, 2021.

Required: 1. Prepare an investment interest income and premium amortization schedule, using the:

a. straight-line method

b. effective interest method

2. Prepare journal entries to record the December 31, 2018, and December 31, 2020, interest receipts using both methods.

Suppose U.S. consumers 21 years and older consumed 26.2 gallons of beer and cider per person during 2017. A distributor in Milwaukee believes that beer and cider consumption are higher in that city. A sample of consumers 21 years and older in Milwaukee will be taken, and the sample mean 2017 beer and cider consumption will be used to test the following null and alternative hypotheses:

H₀: μ ≤ 26.2

H_a: μ > 26.2

(a)

Assume the sample data led to rejection of the null hypothesis. What would be your conclusion about consumption of beer and cider in Milwaukee?

Conclude that the population mean annual consumption of beer and cider in Milwaukee is greater than 26.2 gallons and hence lower than throughout the United States.

Conclude that the population mean annual consumption of beer and cider in Milwaukee is greater than 26.2 gallons and hence higher than throughout the United States.    

Conclude that the population mean annual consumption of beer and cider in Milwaukee is less than or equal to 26.2 gallons and hence lower than throughout the United States.

Conclude that the population mean annual consumption of beer and cider in Milwaukee is less than or equal to 26.2 gallons and hence higher than throughout the United States.

(b)

What is the Type I error in this situation? What are the consequences of making this error?

The type I error is rejecting H₀ when it is true. This error would claim the consumption in Milwaukee is greater than 26.2 when it is actually less than or equal to 26.2.

The type I error is not rejecting H₀ when it is true. This error would claim the consumption in Milwaukee is less than or equal to 26.2 when it is actually less than or equal to 26.2.    

The type I error is rejecting  H₀  when it is false. This error would claim the consumption in Milwaukee is greater than 26.2 when it is actually greater than 26.2.

The type I error is not rejecting H₀ when it is false. This error would claim the consumption in Milwaukee is less than or equal to 26.2 when it is actually greater than 26.2.

(c)

What is the Type II error in this situation? What are the consequences of making this error?

The type II error is accepting H₀ when it is false. This error would claim that the population mean annual consumption of beer and cider in Milwaukee is less than or equal to 26.2 gallons when it is not.

The type II error is not accepting H₀ when it is true. This error would claim that the population mean annual consumption of beer and cider in Milwaukee is greater than 26.2 gallons when it is not.    

The type II error is not accepting H₀ when it is false. This error would claim that the population mean annual consumption of beer and cider in Milwaukee is greater than 26.2 gallons when it is greater than 26.2.

The type II error is accepting H₀ when it is true. This error would claim that the population mean annual consumption of beer and cider in Milwaukee is less than or equal to 26.2 gallons when it is less than or equal to 26.2.

The following information relates to the 2020 debt and equity investment transactions of Sarasota Ltd., a publicly accountable Canadian corporation. All of the investments were acquired for trading purposes and accounted for using the FV-NI model, with all transaction costs being expensed. No investments were held at December 31, 2019, and the company prepares financial statements only annually, each December 31, following IFRS.

1. On February 1, the company purchased Williams Corp. 12% bonds, at par value for $560,000, plus accrued interest. Interest is payable April 1 and October 1.

2. On April 1, semi-annual interest was received on the Williams bonds.

3. On July 1, 9% bonds of Saint Inc. were purchased. These bonds, with a par value of $198,000, were purchased at par plus accrued interest. Interest dates are June 1 and December 1. 4. On August 12, 3,400 shares of Scotia Corp. were acquired at a cost of $59.00 per share. A 1% commission was paid.

5. On September 1, Williams Corp. bonds with a par value of $112,000 were sold at 104.6 plus accrued interest.

6. On September 28, a dividend of $0.56 per share was received on the Scotia Corp. shares.

7. On October 1, semi-annual interest was received on the remaining Williams Corp. bonds.

8. On December 1, semi-annual interest was received on the Saint Inc. bonds.

9. On December 28, a dividend of $0.58 per share was received on the Scotia Corp. shares.

10. On December 31, the following fair values were determined: Williams Corp. bonds 102.00; Saint Inc. bonds 97; and Scotia Corp. shares $61.80.

required:

1.Prepare all 2020 journal entries necessary to properly account for the investment in the Williams Corp. bonds.

2.Prepare all 2020 journal entries necessary to properly account for the investment in the Saint Inc. bonds.

3.Prepare all 2020 journal entries necessary to properly account for the investment in the Scotia Corp. shares.

Problem 1:

The following are ending balances for George’s Gorcery Store (GGS) as of December 31, 2019: Cash, $8,000, Accounts Receivable, $40,000, Allowance for Doubtful Accounts, $2,000, Inventory $80,000, Accounts Payable, $20,000, Common Stock, $40,000, and Retained Earnings, $66,000. The company uses the allowance method to record bad debts.

The following is a list of transactions that happened in 2020 for George’s Grocery Store:

1. GGS acquired an additional 10,000 cash from the issuance of common stock.
2. GGS purchased $90,000 of inventory on account.
3. GGS sold inventory that cost $91,000 for $150,000. Sales were made on account.
4. The company wrote-off $800 of uncollectible accounts.
5. On September 1, GGS loaned $15,000 to Eden Co. The note had an 8 percent interest rate and a one-year term.
6. GGS paid $22,000 cash for operating expenses.
7. The company collected $152,000 cash from accounts receivable.  
8. A cash payment of $96,000 was paid on accounts payable.
9. The company paid a $10,000 cash dividend to the shareholders.
10. GGS sold an additional amount of inventory for $6,000 on account. The cost of the inventory was $4,000.
11. It is estimated that 1 percent of credit sales will be uncollectible.

Required: Answer the following questions.

1. Provide the journal entry needed for transaction 4, assuming GGS uses the allowance method for accounting for bad debts.

2. What is the adjusting entry GGS would need to record at December 31, 2020 for transaction 5?

3. What is the amount of bad debt expense GGS will report in 2020?
4. What is the NRV that GGS would report on its 2020 balance sheet?
5. What is GGS’ gross margin for 2020?
6. What is operating income for GGS for 2020?
7. What is the amount of total assets that GGS will report on its 2020 balance sheet?
8. What is the amount of net income GGS will report for 2020?
9. What is the ending balance in Retained Earnings GGS will report for 2020?
10. What is the net cash from operating activites that would be reported on the Statement of Cash Flows for GGS for 2020?
11. Which transaction would be classified as an investing activity on the Statement of Cash Flows?

Problem 1:

The following are ending balances for George’s Gorcery Store (GGS) as of December 31, 2019: Cash, $8,000, Accounts Receivable, $40,000, Allowance for Doubtful Accounts, $2,000, Inventory $80,000, Accounts Payable, $20,000, Common Stock, $40,000, and Retained Earnings, $66,000. The company uses the allowance method to record bad debts.  

The following is a list of transactions that happened in 2020 for George’s Grocery Store:

1. GGS acquired an additional 10,000 cash from the issuance of common stock.

2. GGS purchased $90,000 of inventory on account.

3. GGS sold inventory that cost $91,000 for $150,000. Sales were made on account.

4. The company wrote-off $800 of uncollectible accounts.

5. On September 1, GGS loaned $15,000 to Eden Co. The note had an 8 percent interest rate and a one-year term.

6. GGS paid $22,000 cash for operating expenses.

7. The company collected $152,000 cash from accounts receivable.   

8. A cash payment of $96,000 was paid on accounts payable.

9. The company paid a $10,000 cash dividend to the shareholders.

10. GGS sold an additional amount of inventory for $6,000 on account. The cost of the inventory was $4,000.  

11. It is estimated that 1 percent of credit sales will be uncollectible.

Required: Answer the following questions.

1. Provide the journal entry needed for transaction 4, assuming GGS uses the allowance method for accounting for bad debts.  

2. What is the adjusting entry GGS would need to record at December 31, 2020 for transaction 5?

3. What is the amount of bad debt expense GGS will report in 2020?  

4. What is the NRV that GGS would report on its 2020 balance sheet?

5. What is GGS’ gross margin for 2020?

6. What is operating income for GGS for 2020?

7. What is the amount of total assets that GGS will report on its 2020 balance sheet?

8. What is the amount of net income GGS will report for 2020?

9. What is the ending balance in Retained Earnings GGS will report for 2020?

10. What is the net cash from operating activites that would be reported on the Statement of Cash Flows for GGS for 2020?

11. Which transaction would be classified as an investing activity on the Statement of Cash Flows?

Green Acres Lawn Equipment (GALE), headquartered in St. Louis, Missouri, is a privately owned designer and producer of traditional lawn mowers used by homeowners. GALE provides most of the products to dealerships, which, in turn, sell directly to end users. In the United States, the focus of sales is on the eastern seaboard, California, the Southeast, and the south central states, which have the greatest concentration of customers. Outside the United States, GALE’s sales include a European market, a growing South American market, and developing markets in the Pacific Rim and China. The market is cyclical, but the different products and regions balance some of this, with just less than 30% of total sales in the spring and summer (in the United States), about 25% in the fall, and about 10% in the winter. Annual sales are approximately $180 million.

GALE has developed a prototype for a new snow blower for the consumer market. This can exploit the company’s expertise in small-gasoline-engine technology and also balance seasonal demand cycles in the North American and European markets to provide additional revenues during the winter months. Initially, GALE faces two possible decisions: introduce the product globally at a cost of $900,000 or evaluate it in a North American test market at a cost of $300,000.

If it introduces the product globally, GALE might find either a high or low response to the product. Probabilities of these events are estimated to be 0.6 and 0.4, respectively. With a high response, gross revenues of $1,800,000 are expected; with a low response, the figure is $500,000. If it starts with a North American test market, it might find a high response or a low response with probabilities 0.5 and 0.5, respectively. This may or may not reflect the global market potential.

In any case, after conducting the marketing research, GALE next needs to decide whether to keep sales only in North America, market globally, or drop the product. If the North American response is high and GALE stays only in North America, the expected revenue is $1,000,000. If it markets globally (at an additional cost of $200,000), the probability of a high global response is 0.8 with revenues of $1,800,000 ($500,000 if the global response is low).

If the North American response is low and it remains in North America, the expected revenue is $200,000. If it markets globally (at an additional cost of $600,000), the probability of a high global response is 0.1, with revenues of $1,800,000 ($500,000 if the global response is low).

Do a decision tree for this.

Convey an advisory board for a startup that has recently opened a branch in your city. Explain how you would go about doing this, and discuss five different roles that would be required on the advisory board. Discuss also the skills that would you be looking for in the board members.

(Please answer with new unique words using keyboard, and sure I will like your answer)

Question 1:

Discuss how venture capitalists reduce their risk when investing in startup businesses. Justify your answer citing appropriate examples from Saudi Firms.

Prepare a budget (one month) for An Internet Startup Advertising company. This Internet company has 3 people: Software developer, sales, website maintenance/accounting. These 3 people founded this company by themselves, they are in different locations and work from their homes. All figures should be reasonable.