(a) ABC Company purchased land at a cost of $400,000,000 during 2018. ABC chooses to use the revaluation method of accounting for land. The fair value of the land is as follows at December 31, 2018 2019 and 2020:
2018 - $450,000,000
2019 - $360,000,000
2020 - $385,000,000
Required
(a) Record the journal entries to account for revaluation of the
land at 31 December 2018, 2019 and 2020.
(b) Assume ABC Company chooses to apply the cost method for the land and that the above amounts are the recoverable amount of the land at 31 December each year. Record the necessary journal entries to account for the land at 31 December 2018, 2019 and 2020.
In: Accounting
On January 2, 2018, the first year of operations, Brunswick Corp. issued 15,000 shares of $10 par value common stock for $15 per share. On July 1, 2018, 2,000 of these shares were reacquired for $20 each. On September 1, 2018 Brunswick Corp. reissued 1,000 shares of its treasury stock for $22 per share. No other stock transactions occurred during the rest of fiscal year 2018. Use this information to determine the dollar amount that Brunswick will report on its fiscal year 2018 Balance Sheet for Paid in Capital Treasury Stock.
In: Accounting
On January 1, 2018, Dreamworld Co. began construction of a new warehouse. The building was finished and ready for use on September 30, 2019. Expenditures on the project were as follows:
|
January 1, 2018 |
$ |
300,000 |
|
|
September 1, 2018 |
$ |
450,000 |
|
|
December 31, 2018 |
$ |
450,000 |
|
|
March 31, 2019 |
$ |
450,000 |
Dreamworld had the following debt obligations outstanding during both years:
Construction loan, 10% $500,000
Long-term note, 12% $2,500,000
Required: What would Dreamworld's capitalized interest be in 2019 (assuming interest from 2018 does not compound in 2019)?
In: Finance
Assume that TDW Corporation (calendar-year-end) has 2018 taxable income of $650,000 for purposes of computing the §179 expense. The company acquired the following assets during 2018:
| Asset | Placed in Service | Basis |
|---|---|---|
| Machinery | September 12 | $2,270,000 |
| Computer Equipment | February 10 | $263,000 |
| Furniture | April 2 | $880,000 |
| Total | $3,413,00 |
a. What is the maximum amount of §179 expense TDW may deduct for 2018?
b. What is the maximum total depreciation, including §179 expense, that TDW may deduct in 2018 on the assets it placed in service in 2018 assuming no bonus depreciation
In: Accounting
On January 1, 2018, Dreamworld Co. began construction of a new warehouse. The building was finished and ready for use on September 30, 2019. Expenditures on the project were as follows:
|
January 1, 2018 |
$ |
300,000 |
|
|
September 1, 2018 |
$ |
450,000 |
|
|
December 31, 2018 |
$ |
450,000 |
|
|
March 31, 2019 |
$ |
450,000 |
Dreamworld had the following debt obligations outstanding during both years:
Construction loan, 10% $500,000
Long-term note, 12% $2,500,000
Required: What would Dreamworld's capitalized interest be in 2019 (assuming interest from 2018 does not compound in 2019)?
In: Accounting
Wayne was a bona fide resident of Brazil for all of 2018 and 2019. He reports his income on the cash basis. In 2018, he was paid $88,900 for work he did in Brazil during that year. He excluded all of the $88,900 from his income in 2018. In 2019, Wayne was paid $117,300 for his work in Brazil. $18,800 was for work he did in 2018 and $98,500 was for work he did in 2019. What amount of the 2018 income received in 2019 can Wayne exclude from his 2019 income tax return?
A. $0
B. $10,900
C. $15,000
D. $18,800
In: Accounting
Now that the financial operations for 2018 are nearly complete, Mark has requested a meeting with you to review Metro Group’s 2018 federal income tax liabilities and discuss Metro Group’s future federal income tax strategies in the wake of current tax reform. Mark has read many news articles about the 2018 Tax Cut and Jobs Act (2018 tax reform) and has asked you to highlight significant changes you believe Metro Group should consider in 2018. What key tax reform changes will you discuss with Mark? (10 points)
In: Accounting
Rajbir Construction Co. contracted to build a bridge for $10,000,000. Construction began in 2018 and was completed in 2019. Data relating to the construction are: 2018 2019 Costs incurred during the year $3,300,000 $2,750,000 Estimated costs to complete 2,700,000 — Raj uses the percentage-of-completion method. Instructions (a) How much revenue should be reported for 2018? Show your computation. (b) Make the entry to record progress billings of $4,100,000 during 2018. (c) Make the entry to record the revenue and gross profit for 2018. (d) How much gross profit should be reported for 2019? Show your computation.
In: Accounting
In February 2018, Gemstone Industries purchased the Opal Mine at a cost of $20,000,000. The mine is estimated to contain 500,000 carats of stone and to have a residual value of $1,000,000 after mining operations are completed. During 2018, 50,000 carats of stone were removed from the mine and sold. In this situation:
A. The book value of the mine is $19,000,000 at the end of 2018.
B. The amount of depletion deducted from revenue during 2018 is $1,900,000.
C. The amount of depletion deducted from revenue during 2018 is $1,000,000.
D. The mine is classified as an intangible asset and amortized over a period not to exceed 40 years.
In: Accounting
Hawkins Corporation began construction on a motel on March 31, 2018. The project was completed on April 30, 2019. No new loans were required to fund construction. Hawkins does have the following two interest-bearing liabilities that were outstanding throughout the construction periods:
$4,000,000 6% note
$16,000,000 10% bonds
Construction expenditures incurred were as follows:
March 31, 2018 $4,000,000
June 30, 2018 6,000,000
November 30, 2018 1,800,000
February 28, 2019 3,000,000
The company's fiscal year-end is December 31.
Calculate the amount of interest capitalized for 2018 and 2019.
In: Accounting