On July 1, 2020, Sandhill Company purchased $3,860,000 of Duggen Company’s 8% bonds, due on July 1, 2027. The bonds, which pay interest semiannually on January 1 and July 1, were purchased for $3,340,000 to yield 10%. These bonds are classified as available-for sale and they have a fair value at December 31, 2020, of $3,444,400, prepare the journal entry (if any) at December 31, 2020, to record this transaction.

A company began work in 2020 on a contract for $7,800. Other data are as follows:

                                                   2020                         2021

Costs incurred to date                 $3,000 $5,600

Estimated costs to complete         2,000       —

Billings to date    4,400                   7,800

Collections to date                       2,000                      4,800

If the company uses the percentage-of-completion method, for the journal entry that records construction revenue, construction expense, and gross profit for 2020, how much will be recorded for Construction in Process?

On January 4, 2020, Cutter Inc., bought 15% of Vekshyna Corporation’s common stock for $60,000. The following data concerning Vekshyna are available for the years ended December 31, 2020 and 2021:

                                    2020                2021

Net income                 $30,000           $90,000

Dividends paid            None             80,000

In its income statement for the year ended December 31, 2021, how much should Cutter report as income from this investment?

Hansen Computer Corp. acquires $2,150,000 in new 7-year class assets (all tangible personal property) in February 2020. The company elects to take all available Sec. 179 expense and bonus first-year depreciation. Assume Hansen uses a calendar year and that Sec. 179 expense will not be limited by taxable income in 2020. What cost recovery deduction can Hansen take in 2020?

solve below calculation question

Samna Resorts issued $1,000,000 of 8%, 20-year bonds on January 1, 2020, at 97.82 to yield 9%. Interest is payable semiannually on July 1 and January 1.

Prepare the journal entries to record the following.

a. The issuance of the bonds.

b. The payment of interest and the related amortization on July 1, 2020.

c. The accrual of interest and the related amortization on December 31, 2020.

Consider the bond below.
A semi-annual coupon paid March 31 & September 30:
Par Value $1000 ; Coupon rate7%; Purchase date 6/30/2020; Yield to maturity 9%; Final maturity date 3/31/2025

1. What is the clean price if the bond was purchased on June 30, 2020?

2.What is the full invoice price if the bond was purchased on June 30, 2020?

Agenda Item #4 Portfolio Returns

With the impacts of COVID-19 still weighing on the portfolio manager’s mind. You have been tasked with evaluating its effects on two contrasting portfolios. In addition to understanding the relationship between risk and return, you should be able to calculate the standard deviation of a two-asset portfolio with different weighting combinations.  You are aware that the current risk-free rate is 1.08%, and the expected return on the market is 6.49%.

رThe treasurer of Miller Co. has readnon the Internet that the stock price of
Wade Inc. is about to take off . In order to profit from this potential
development, Miller Co. purchased a call option on Wade common shares
on July 7, 2020, for $400. The call option is for 250shares (notional value),
and the strike price is $50. (The market price of a share of Wade stock on
that date is $50.) The option expires on January 31, 2021. The following
data are available with respect to the call option.
Date Market Price of Wade Shares Time Value of
Call
September 30, 2020 $55 per share
$100
December 31, 2020 45 per share
40
January 4, 2021 47 per share
33
Instructions
Prepare the journal entries for Miller Co. for the following dates.
a. July 7, 2020—Investment in call option on Wade shares.
b. September 30, 2020—Miller prepares financial statements.
c. December 31, 2020—Miller prepares financial statements.
d. January 4, 2021—Miller settles the call option on the Wade shares.

Jackson Auto Parts Manufacturer, a U.S. based manufacturer of piston rings and other auto parts sold parts to a South Korean Auto Manufacturer on December 1, 2020 with payment in 10 million South Korean Won to be received on March 31, 2021. The following exchange rates are relevant:

Date:    Spot Rate                Forward Rate

Dec 1, 2020 $0.0035 $0.0034

Dec 31, 2020 $0.0033 $0.0032

March 31 2021 $0.0038 $0.0032

Assuming Jackson did not hedge its foreign exchange risk, how much foreign exchange gain or loss should it report on its fiscal year end December 31, 2020 financial statements/

Assuming that Jackson did in fact decide to hedge its foreign exchange risk and entered into a forward exchange contract to sell 10 million South Korean Won on December 1, 2020 as a fair value hedge of a foreign currency receivable, what is the net impact on Jackson’s 2020 net income resulting from a fluctuation in the value of the Won? Ignore time value of money.

Defend your answer.

E18.17  (Sales with Returns) On March 10, 2020, Steele Company sold to Barr Hardware 200 tool sets at a price of $50 each (cost $30 per set) with terms of n/60, f.o.b. shipping point. Steele allows Barr to return any unused tool sets within 60 days of purchase. Steele estimates that (1) 10 sets will be returned, (2) the cost of recovering the products will be immaterial, and (3) the returned tools sets can be resold at a profit. On March 25, 2020, Barr returned six tool sets and received a credit to its account. . Assume that instead of selling the tool sets on credit, that Steele sold them for cash.

Instructions
a.    Prepare journal entries for Steele to record (1) the sale on March 10, 2020, (2) the return on March 25, 2020, and (c) any adjusting entries required on March 31, 2020 (when Steele prepares financial statements). Steele believes the original estimate of returns is correct.

b.    Indicate the income statement and balance sheet reporting by Steele at March 31, 2020, of the information related to the Barr sale.