1- Suppose an individual receives $1000 per month in Social Security and the CPI rises by 2%. With indexation, what happens to the nominal payment and the real payment the following year?

2- The Radio Shack commercial from 1989 showed a cell phone that was sale priced at $799. What type(s) of problems with measuring consumer prices is illustrated by the cell phone example? Explain.

3- The Indicator from Planet Money reported that GDP fell by 32.9% in the second quarter of 2020. What value from the GDP calculations are they using to measure the growth rate? Did the economy really shrink by 32.9% in 3 months? Explain.

4- Suppose a winery purchases $25,000 of new barrels in 2020 to age the wine produced this year. They produce $80,000 worth of wine, sell $45,000 to households, export $15,000, and keep the rest in barrels to sell in 5 years after longer aging. How do each of these transactions affect total GDP and how is each counted in the components of GDP?

PART B

Quality Construction Company (QCC) successfully secured the contract to build a new community centre for the City of Burnaby. The total fixed contract price is $25.0 million.

The following schedule indicates (for the three-year period during which construction took place) the costs incurred to date, the estimated costs to complete the community centre complex, and the amount of cash received scheduled to be received from the City of Burnaby. According to normal practice in the industry, the final 10% of the contract price is not paid until a few months after the construction is completed.

Required:

Calculate the amount of revenue, costs and any other amounts that QCC should recognize in 2020 and 2021 using the percentage of completion method. Carry calculations of percentage completed to FOUR decimal places.

can you please solve this question as soon as possible. Thank you

Banjo Education Corp. issued a 4%, $150,000 bond that pays interest semiannually each June 30 and December 31. The date of issuance was January 1, 2020. The bonds mature after four years. The market interest rate was 6%. Banjo Education Corp.’s year-end is December 31.

Required

Preparation Component:

1. Calculate the issue price of the bond.

2. Prepare a general journal entry to record the issuance of the bonds.

3. Determine the total bond interest expense that will be recognized over the life of these bonds.

4. Prepare the first two years of an amortization table based on the effective interest method.

5. Present the journal entries Banjo would make to record the first two interest payments.

Analysis Component: Now assume that the market interest rate on January 1, 2020, was 3% instead of 6%. Without presenting any specific numbers, describe how this change would affect the amounts presented on Banjo’s financial statements.

JK Ltd enters into a non-cancellable five-year lease agreement with Burt Ltd on 1 July
2019.

The lease is for an item of machinery that, at the inception of the lease, has a fair value of
$647,192. The machinery is expected to have an economic life of six years, after which time
it will have an expected residual value of $105,000. There is a bargain purchase option that
JK Ltd will be able to exercise at the end of the fifth year for $140,000. There are to be five
annual payments of $175,000, the first being made on 30 June 2020. Included with $175,000
lease payments is an amount of $17,500 representing payment to the lessor for the insurance
maintenance of the equipment. The equipment is to be depreciated on a straight-line basis.

a. Determine the rate of interest implicit in the lease and calculate the present value of
the lease payments.
b. Prepare the journal entries in the books of JK Ltd for the years ending 30 June 2020
and 30 June 2021.
c. Prepare the portion of the statement of financial position for the year ending 30
June 2021 relating to the lease asset and lease liability.

Based on the following transactions, calculate the revenues, expenses, and net income that would be reported on (a) the cash basis and (b) the accrual basis:

• i. Inventory costing $70,000 was purchased on account.
• ii. Inventory costing $60,000 was sold for $100,000. Eighty percent of the sales were for cash.
• iii. Cash collected from credit customers (those who bought on account) totalled $20,000.
• iv. A lease was signed at the beginning of the year, requiring monthly payments of $1,000. The rent for the first month was paid when the lease was signed. After that, the $1,000 rent was paid on the last day of each month, to cover the following month.
• v. Supplies costing $5,500 were purchased for cash. At the end of the year, $500 of the supplies were still unused.
• vi. Wages of $37,500 were paid during the year. Also, wages of $500 remained unpaid at year end.

2. The company declared dividends of $7,000 on December 15, 2020, to be paid on January 15, 2021. Does this transaction affect Cash in 2020? How should it be recorded?

Alsup Consulting sometimes performs services for which it receives payment at the conclusion of the engagement, up to six months after services commence. Alsup recognizes service revenue for financial reporting purposes when the services are performed. For tax purposes, revenue is reported when fees are collected. Service revenue, collections, and pretax accounting income for 2020–2023 are as follows:

There are no differences between accounting income and taxable income other than the temporary difference described above. The enacted tax rate for each year is 25%.

Prepare the appropriate journal entries to record Alsup's 2021 income taxes, 2022 income taxes and 2023 income taxes. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in thousands.)

Exercise 18-23

At the end of 2016, Concord Corporation reported a deferred tax liability of $43,000. At the end of 2017, the company had $245,000 of temporary differences related to property, plant, and equipment. Depreciation expense on this property, plant, and equipment has been lower than the CCA claimed on Concord’s income tax returns. The resulting future taxable amounts are as follows:

The tax rates enacted as of the beginning of 2016 are as follows: 32% for 2016 and 2017; 31% for 2018 and 2019; and 26% for 2020 and later. Taxable income is expected in all future years.

Calculate the deferred tax account balance at December 31, 2017.

Prepare the journal entry for Concord to record deferred taxes for 2017.

Early in 2018, after the 2017 financial statements were released, new tax rates were enacted as follows: 30% for 2018 and 28% for 2019 and later.
Prepare the journal entry for Concord to recognize the change in tax rates.

5. On December 1, 2018, Folks Wagon Company adopted a stock-option plan that granted options

to key executives to purchase 50,000 shares of the company’s $10 par value common stock. The

options were granted on January 1, 2019, and were exercisable 3 years after the date of grant if the

grantee was still an employee of the company. The options expired 5 years from the date of grant.

The option price was set at $35, and the fair value option-pricing model determines the total

compensation expense to be $450,000.

All of the options were exercised during the year 2022: 20,000 on February 23 when the market

price was $46, and 30,000 on August 8 when the market price was $85 a share.

a. Prepare the journal entries relating to the stock option plan for the years 2019, 2020, and 2021.

Assume that the employee performs services equally in 2019, 2020, and 2021.

b. Prepare the journal entries that record the two events of exercising the options in 2022.

On December 1, 2018, Folks Wagon Company adopted a stock-option plan that granted options to key executives to purchase 50,000 shares of the company’s $10 par value common stock. The options were granted on January 1, 2019, and were exercisable 3 years after the date of grant if the grantee was still an employee of the company. The options expired 5 years from the date of grant. The option price was set at $35, and the fair value option-pricing model determines the total compensation expense to be $450,000.

All of the options were exercised during the year 2022: 20,000 on February 23 when the market price was $46, and 30,000 on August 8 when the market price was $85 a share.

a. Prepare the journal entries relating to the stock option plan for the years 2019, 2020, and 2021. Assume that the employee performs services equally in 2019, 2020, and 2021.

b. Prepare the journal entries that record the two events of exercising the options in 2022.