The 2017 balance sheet of Kerber’s Tennis Shop, Inc., showed $2.45 million in long-term debt, $790,000 in the common stock account, and $6.35 million in the additional paid-in surplus account. The 2018 balance sheet showed $3.6 million, $955,000, and $8.7 million in the same three accounts, respectively. The 2018 income statement showed an interest expense of $300,000. The company paid out $540,000 in cash dividends during 2018. If the firm's net capital spending for 2018 was $840,000, and the firm reduced its net working capital investment by $205,000, what was the firm's 2018 operating cash flow, or OCF?

The following selected transactions apply to Topeca Supply for November and December 2018. November was the first month of operations. Sales tax is collected at the time of sale but is not paid to the state sales tax agency until the following month.

1. Cash sales for November 2018 were $65,000 plus sales tax of 7 percent.

2. Topeca Supply paid the November sales tax to the state agency on December 10, 2018.

3. Cash sales for December 2018 were $83,000 plus sales tax of 7 percent.

4. What is the amount of the sales tax liability as of December 31, 2018?

5. On which financial statement will the sales tax liability appear?

The 2017 balance sheet of Kerber’s Tennis Shop, Inc., showed $2.95 million in long-term debt, $780,000 in the common stock account, and $6.35 million in the additional paid-in surplus account. The 2018 balance sheet showed $3.75 million, $905,000, and $8.15 million in the same three accounts, respectively. The 2018 income statement showed an interest expense of $280,000. The company paid out $500,000 in cash dividends during 2018. If the firm's net capital spending for 2018 was $750,000, and the firm reduced its net working capital investment by $125,000, what was the firm's 2018 operating cash flow, or OCF?

Hawkins Corporation began construction of a motel on March 31, 2018. The project was completed on April 31, 2019. No new loans were required to fund construction. Hawkins does have the following two interest-bearing liabilities that were outstanding throughout the construction period:

$4,000,000, 6% note
$16,000,000, 10% bonds

Construction expenditures incurred were as follows:

The company's fiscal year-end is December 31.

Required:

Calculate the amount of interest capitalized for 2018 and 2019

Financially, do you think this company is stronger in 2018 or 2019?

Habiby, Inc., began operations in 2018 and has the following income and expenses for 2018 through 2021.

a. What is the amount of tax that Habiby should pay each year? If an amount is zero, enter "0".

b. How much would Habiby have paid in tax if the old NOL rules were in place but the corporate tax rate was 21 percent?. If an amount is zero, enter "0".

The 2017 balance sheet of Kerber’s Tennis Shop, Inc., showed $2.85 million in long-term debt, $750,000 in the common stock account, and $6.05 million in the additional paid-in surplus account. The 2018 balance sheet showed $3.6 million, $945,000, and $8.5 million in the same three accounts, respectively. The 2018 income statement showed an interest expense of $230,000. The company paid out $590,000 in cash dividends during 2018. If the firm's net capital spending for 2018 was $750,000, and the firm reduced its net working capital investment by $175,000, what was the firm's 2018 operating cash flow, or OCF?

Part B
During 2018, the Nicklaus Corporation participated in three treasury stock transactions:

On June 30, 2018, the corporation reacquires 160,000 shares for the treasury at a price of $12 per share.

On July 31, 2018, 30,000 treasury shares are reissued at $15 per share.

On September 30, 2018, 30,000 treasury shares are reissued at $10 per share.

Required:
1. Prepare journal entries to record these transactions.
2. Prepare the Nicklaus Corporation shareholders' equity section as it would appear in a balance sheet prepared at September 30, 2018. (Assume net income for the second and third quarter was $2,800,000.)

Thornton Industries began construction of a warehouse on July 1, 2018. The project was completed on March 31, 2019. No new loans were required to fund construction. Thornton does have the following two interest-bearing liabilities that were outstanding throughout the construction period:

Construction expenditures incurred were as follows:

The company’s fiscal year-end is December 31.

Required:
Calculate the amount of interest capitalized for 2018 and 2019.