Monty Company acquired a plant asset at the beginning of Year 1. The asset has an estimated service life of 5 years. An employee has prepared depreciation schedules for this asset using three different methods to compare the results of using one method with the results of using other methods. You are to assume that the following schedules have been correctly prepared for this asset using (1) the straight-line method, (2) the sum-of-the-years'-digits method, and (3) the double-declining-balance method.

What is the cost of the asset being depreciated?

What amount, if any, was used in the depreciation calculations for the salvage value for this asset?

Which method will produce the highest charge to income in Year 1?

Which method will produce the highest charge to income in Year 4?

Which method will produce the highest book value for the asset at the end of Year 3?

If the asset is sold at the end of Year 3, which method would yield the highest gain (or lowest loss) on disposal of the asset?

Early in 2018 Johnson Company was acquired by a new owner who discovered errors in the accounting records. The new owner would like you to analyze the error described and then determine the impact the accounting items listed. Each error should be analyzed separately. Be Sure to indicate the dollar amount or not the error caused the items to be overstated (OS) or Understated (US) or No Effect.

Vacation pay earned in 2017 of 31100 was not accrued in 2017. The vacation pay occurred in 2018 and expensed when paid.

Analysis:

Net Income for the period ending 12/31/2017__________________

Retained Earnings as of 12/31/2017__________________

Working Capital as of 12/31/2017_______________

Net Income for the period ending 12/31/2018________________

Retained Earnings as of 12/31/2018________________________

December 31, 2017 ending inventory was overstated by 50,000

Analysis:

Net Income for the period ending 12/31/2017 _______________

Retained Earnings as of 12/31/2017__________________

Working Capital as of 12/31/2017_________________

Net Income for the period ending 12/31/2018__________________

Retained Earnings as of 12/31/2018_________________

3.At the beginning of 2017 a machine was purchased for total cost of $50,000. The Machine had no salvage value and had a life of 15 years. The bookkeeper accidentally expensed the entire cost of the machine in 2017. Johnson company normally uses straight line depreciation.

                Analysis:

Net Income for the period ending 12/31/2017____________________________

Retained Earnings as of 12/31/2017_____________________

Working Capital as of 12/31/2017_____________________

Net Income for the period ending 12/31/2018_____________________

Retained Earnings as of 12/31/2018_______________________

4.At the end of 2017. $30,000 of cash collected in advance for future services was included is Service revenue for the period ending 12/31/2017. The services will be performed equally in 2018 and 2019.

Net Income for the period ending 12/31/2017____________________________

Retained Earnings as of 12/31/2017_____________________

Working Capital as of 12/31/2017_____________________

Net Income for the period ending 12/31/2018_____________________

Retained Earnings as of 12/31/2018_______________________

Upper Division of Lower Company acquired an asset with a cost of $560,000 and a four-year life. The cash flows from the asset, considering the effects of inflation, were scheduled as follows.

The cost of the asset is expected to increase at a rate of 10 percent per year, compounded each year. Performance measures are based on beginning-of-year gross book values for the investment base. Ignore taxes.

Required:

a. What is the ROI for each year of the asset's life, using a historical cost approach?

b. What is the ROI for each year of the asset's life if both the investment base and depreciation are determined by the current cost of the asset at the start of each year?

Assume that on January 1, 2012, a parent company acquired a 80% interest in a subsidiary’s voting common stock. On the date of acquisition, the fair value of the subsidiary’s net assets equaled their reported book values. On January 1, 2014, the subsidiary purchased a building for $336,000. The building has a useful life of 8 years and is depreciated on a straight-line basis with no salvage value. On January 1, 2016, the subsidiary sold the building to the parent for $294,000. The parent estimated that the building had a six year remaining useful life and no salvage value. The parent also uses the straight-line method of amortization. For the year ending December 31, 2016, the parent’s “stand-alone” income (i.e., net income before recording any adjustments related to pre-consolidation investment accounting) is $350,000. The subsidiary’s recorded net income is $70,000.

1)Based on this information, determine the balance for income from investment in subsidiary (on parent’s pre-consolidations books preceding consolidation):

A $21,000

B $28,000

C $56,000

D $63,000

2)Based on this information, determine the balance for consolidated building (net of accumulated depreciation):

A $210,000

B $245,000

C $294,000

D $336,000

3)Based on this information, determine the balance for consolidated depreciation expense:

A $25,200

B $29,400

C $42,000

D $49,000

4)Based on this information, determine the balance for consolidated net income attributable to the controlling interest:

A $371,000

B $378,000

C $406,000

D $413,000

5)Based on this information, determine the balance for consolidated income attributable to noncontrolling interest:

A $15,400

B $14,000

C $7,000

D $5,600

A manufacturing company wants to verify the output of their newly acquired MRP software by comparing the computer output with their hand-calculated first ROP for each item in their BOM. They are examining output from their daily April 30 MRP.  

Windsor Company acquired a plant asset at the beginning of Year 1. The asset has an estimated service life of 5 years. An employee has prepared depreciation schedules for this asset using three different methods to compare the results of using one method with the results of using other methods. You are to assume that the following schedules have been correctly prepared for this asset using (1) the straight-line method, (2) the sum-of-the-years'-digits method, and (3) the double-declining-balance method.

What is the cost of the asset being depreciated?

What amount, if any, was used in the depreciation calculations for the salvage value for this asset?

Which method will produce the highest charge to income in Year 1?

Which method will produce the highest charge to income in Year 4?

Which method will produce the highest book value for the asset at the end of Year 3?

If the asset is sold at the end of Year 3, which method would yield the highest gain (or lowest loss) on disposal of the asset?

At the beginning of 2018, Blue Dragon, a small private company, acquired a mine for $1,925,000. Of this amount, $190,000 was allocated to the land value and the remaining portion to the minerals in the mine. Surveys conducted by geologists found that approximately 18 million units of ore appear to be in the mine. Blue Dragon had $175,000 of development costs for this mine before any extraction of minerals. It also determined that the fair value of its obligation to prepare the land for an alternative use when all of the minerals have been removed was $70,000. During 2018, 3.0 million units of ore were extracted and 2.10 million of these units were sold.

Calculate the depletion cost per unit for 2018. (Round answer to 3 decimal places, e.g. 52.751.)
Depletion Cost Per Unit: $________

Prepare the required journal entry, if any, for the total amount of depletion for 2018. (Credit account titles are automatically indented when the 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.)

Account Debit Credit

________

________

Prepare the required journal entry, if any, for the total amount that is charged as an expense for 2018 for the cost of minerals sold during 2018. (Credit account titles are automatically indented when the 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. Round answers to 0 decimal places, e.g. 5,275.)

Account Debit Credit

______

______

Company ABC acquired a machine at the beginning of the year. The machine had a 6-year useful life. He expensed the entire acquisition cost in the current year. His error has what effect on current period net income (NI) and retained earnings at the end of the 4th year (RE4)?

a. NI is understated; RE4 is understated

b. NI is understated; RE4 is correct

c. NI is overstated; RE4 is correct

d. NI is overstated; RE4 is understated

e. None of the above

Please help to explain for my better understanding.

During 2020, the following items caused taxable income to be different than accounting income:

• For tax purposes, CCA was $172,800 in 2020. The year-end book value is $720,000 and the tax value is $691,200.
• In 2020 Killim Inc. paid $72,000 rent in advance for 2020 ($36,000) and 2021 ($36,000). The Canada Revenue Agency (CRA) allows the deduction of actual rent payments when they are paid. By December 31, 2020, Killim had a balance of $36,000 in Prepaid Rent.
• In 2020, dividends of $24,000 were received from a taxable Canadian corporation and included in accounting income. These dividends are not taxable.
• In 2020, a golf club membership of $7,200 was an expense in arriving at accounting income. This is not an allowable deduction for tax purposes.
• In 2020, Killim Inc. offered a warranty on goods sold. Warranty expenses for 2020 were $26,400 and warranty cash payments in 2020 were $9,600. The balance of the warranty liability on the statement of financial position is $16,800. The Canada Revenue Agency (CRA) allows the deduction of actual warranty costs when they are paid.

Required:

( a ) Calculate taxable income for 2020.

( b ) Calculate current income taxes payable for 2020.

( c ) Calculate the balance of any deferred income taxes asset and deferred income tax liability at December 31, 2020. Do this for each item and identify any balances as either a deferred tax asset or a deferred tax liability.

            (d ) Prepare the journal entry(s) to record current income taxes for 2020 and record an entry for of the deferred tax determined in part c.

During 2020, the following items caused taxable income to be different than accounting income:

• For tax purposes, CCA was $172,800 in 2020. The year-end book value is $720,000 and the tax value is $691,200.
• In 2020 Killim Inc. paid $72,000 rent in advance for 2020 ($36,000) and 2021 ($36,000). The Canada Revenue Agency (CRA) allows the deduction of actual rent payments when they are paid. By December 31, 2020, Killim had a balance of $36,000 in Prepaid Rent.
• In 2020, dividends of $24,000 were received from a taxable Canadian corporation and included in accounting income. These dividends are not taxable.
• In 2020, a golf club membership of $7,200 was an expense in arriving at accounting income. This is not an allowable deduction for tax purposes.
• In 2020, Killim Inc. offered a warranty on goods sold. Warranty expenses for 2020 were $26,400 and warranty cash payments in 2020 were $9,600. The balance of the warranty liability on the statement of financial position is $16,800. The Canada Revenue Agency (CRA) allows the deduction of actual warranty costs when they are paid.

Required:

( a ) Calculate taxable income for 2020.

( b ) Calculate current income taxes payable for 2020.

( c ) Calculate the balance of any deferred income taxes asset and deferred income tax liability at December 31, 2020. Do this for each item and identify any balances as either a deferred tax asset or a deferred tax liability.

            (d ) Prepare the journal entry(s) to record current income taxes for 2020 and record an entry for of the deferred tax determined in part c.

1. A company make profits of $22,000 on each of its five low end products $50,000 for each of the two mid end ones and $270,000 from one top product. The number of products contributing less than the mean profit is

a) 4 b) 7 c) 5 d) 6 e) 0

2. Of most of the prices in a large data set are of approximately the same magnitude except for a few observations that are quite a bit larger, how would the mean and median of the data set compare and what shape would a histogram of the data set have?

a) the mean would be equal to the median and the histogram would be symmetrical

b) the mean would be smaller than the median and the histogram would be skewed with a long right tail.

c) the mean would be larger than the median and the histogram would be skewed with a long left tail

d) the mean would be larger than the median and the histogram would be skewed with a long right tail

e) the mean would be smaller than the median and the histogram would be skewed with a long left tail

3. What are the assumptions behind the two pricing strategies and what are their strength and weakness?

4. Suppose a university decides to raise tuition fees to increase the total revenue it receives from students. This strategy will work if the demand for education at the university is..

a) unit elastic b) inversely related to price c) elastic d) inelastic e) perfectly elastic