Al is a medical doctor who conducts his practice as a sole proprietor. During 2020, he received cash of $398,800 for medical services. Of the amount collected, $37,200 was for services provided in 2019. At the end of 2020, Al had accounts receivable of $88,000, all for services rendered in 2020. In addition, at the end of the year, Al received $11,000 as an advance payment from a health maintenance organization (HMO) for services to be rendered in 2021.

a. Compute Al's gross income for 2020 using the cash basis of accounting.
$-------

b. Compute Al's gross income for 2020 using the accrual basis of accounting.
$-------

c. Advise Al on which method of accounting he should use.

Al should use the (cash method/accrual method) of accounting so that he will not have to pay income taxes on the (uncollected accounts receivable/advance payment)  .

Pronghorn Mining Company purchased land on February 1, 2020, at a cost of $996,100. It estimated that a total of 51,900 tons of mineral was available for mining. After it has removed all the natural resources, the company will be required to restore the property to its previous state because of strict environmental protection laws. It estimates the fair value of this restoration obligation at $93,600. It believes it will be able to sell the property afterwards for $104,000. It incurred developmental costs of $208,000 before it was able to do any mining. In 2020, resources removed totaled 25,950 tons. The company sold 19,030 tons.

Compute the following information for 2020.

6. Mike Brady purchased an apartment building on February 12, 2020, for a total of $3 million of which $800,000 was the value of the land on which the apartment building was located.

In addition, Mike purchased 7-year class new business equipment for $19,400 on October 11, 2020. He elects not to immediately expense the equipment under §179 and elects not to take the additional first-year depreciation.

Mike purchased no other business assets during 2020.

1. Determine Mike’s depreciation on the apartment building for 2020.

b. Determine Mike’s depreciation on the equipment for 2020.

c. If Mike sells the apartment building on October 1, 2027, how much depreciation deduction will Mike take for the apartment building for 2027?

d. If Mike sells the equipment on December 28, 2021, how much depreciation deduction will Mike take for the equipment for 2021?

During 2020, GR Engineering Company constructed a building for its own use at a total cost of $14,700,000.

The weighted average accumulated expenditures on assets qualifying for capitalization of interest during 2020 were $10,200,000. The company had the following debt outstanding at December 31, 2020: 1. 10%, 5-year note to finance construction of this building, dated January 1, 2020, with interest payable annually on January 1 $6,300,000 2. 12%, ten-year bonds issued at par on December 31, 2014, with interest payable annually on December 31 7,000,000 3. 9%, 4-year note payable, dated January 1, 2019, with interest payable annually on January 1 3,500,000 Compute the amounts of each of the following (show computations). 1. Avoidable interest 2. Actual interest 3. Total interest to be capitalized during 2020  

a. A house is worth $400,000 in 2020, but was worth $150,000 in 1990. Using prices in 1990 as the base year, know that prices in the economy have grown on average by 1.50 times between 1990 and 2020.

(i) If the price of the house had risen at the same rate as average prices, what would the house be worth in 2020? Briefly explain your answer.

(ii) Without doing any calculations, but simply based on information in the question and your response in (i), would you be better off having bought this house in 1990 or 2020? Briefly justify your answer.

(iii) Calculate the rate of inflation between 1990 and 2020.

b. Assume wage negotiations are done and agreed based on the CPI. Briefly explain what happens to employers and employees when the CPI is upwardly biased (i.e. the CPI is estimated to be higher than what it should be).

can you explain step by step: Chapter 16 accounting intermediate II -Basic and diluted EPS

1-Assume that the following data relative to Rice company for 2020 is available:

transactions in common shares change    Cumulative

Jan. 1,2020 Beginning number    650,000

Apr 1,2020 Purchase of treasury shares (50,000) 600,000

June 1,2020 100% Stock dividend 600,000 1,200,000

Dec 1,2020 Issuance of shares 200,000 1,400,000

5% cumulative convertible preferred stock

$1,000,000 sold at par on January 1, 2020 convertible into 200,000 shares of common stock

Stock options:

Exercisable at the option price of $30 per share. Average market price in 2020, $35 and there were 60,000 options outstanding since 2017

(A) compute the basic earnings per share for 2020.

(B) compute the diluted earnings per share for 2020

QUESTION 1  The number of customers per shop per day for a franchised business with nearly 10,000 stores nationwide is 900 people To increase the number of customers, the franchise owner is considering cutting down on the price of coffee drinks To test this new initiative, the store has reduce coffee prices in a sample of 25 stores. It is found that the mean of the number of customers per store in one day is 974 and the standard deviation is 96. At the 0.01 level, indicate whether there is significant evidence that reducing coffee prices is a good strategy to increase the mean of customers

  A study by the Pew Internet and American Life Project found that Americans have a complex and divisive attitude toward technology. This study reports that 8% of respondents are 'Omnivores,' who like gadgets, send text, make videos and upload material to YouTube. Andy believes that the percentage of students at his university 'Omnivores is greater than 8%. Andy took a sample of 200 students at his university and found that 30 students could be classified as' Omnivores. At the 0.05 level, indicate whether there is significant evidence that the percentage of Omnivores in the university is greater than 8%.

1. Which of the following is considered a negative supply shock?

Select one:

a. Government-mandated shut-down of the retail sector to prevent a spread of a virus

b. A decline in wages

c. An unexpected large increase in the government bond yields

d. An improvement in video-conferencing technology

2. An Australian firm produces software in the UK, its market value will be included in

Select one:

a. Australia’s GDP.

b. neither Australia’s nor UK’s GDP as it is counted towards National Product

c. the UK’s GDP.

d. Both Australia’s and UK’s GDP

3. Economic response to the Coronavirus crisis in Australia included

Select one:

a. increase in the cash rate and a large fiscal stimulus

b. decrease in the exchange rate and a large fiscal stimulus

c. none of the answers is correct

d. decrease in the cash rate and a large fiscal stimulus

4. If the government purchases multiplier equals 2, and real GDP is $14 trillion with potential GDP $15 trillion, then government purchases would need to increase by ________ to restore the economy to potential GDP.

Select one:

a. $500 billion

b. $1 trillion

c. $7.25 trillion

d. $250 billion

A location analysis for Cook Controls, a small manufacturer of parts for high-technology cable systems, has been narrowed down to four locations. Cook will need to train assemblers, testers, and robotics maintainers in local training centers. Lori Cook, the president, has asked each potential site to offer training programs, tax breaks, and other industrial incentives. The critical factors, their weights, and the ratings for each location are shown in the following table. High scores represent favorable values.

                     Wight       A     B        C        D

Labor availability     .15                90         80            90             80

Technical school

quality                     .10                95         75            65             85

Operating cost         .30                80         85            95             85

Land and

construction cost     .15                      60         80            90             70

Industrial

incentives                .20                      90         75            85             60

Labor cost               .10                75         80            85             75

a) Compute the composite (weighted average) rating for each location.

b) Which site would you choose?

c) Would you reach the same conclusion if the weights for operating cost and labor cost were reversed? Recomputed   as necessary and explain.