Information for questions 8. and 9. Paige Company deducts insurance expense of $105,000 for tax
purposes in 2018, but the expense is not yet recognized for accounting purposes. In 2019,
2020, and 2021, no insurance expense will be deducted for tax purposes, but $35,000 of
insurance expense will be reported for accounting purposes in each of these years. Paige
Company has a tax rate of 40% and income taxes payable of $90,000 at the end of 2018.
There were no deferred taxes at the beginning of 2018.

8. What is the amount of the deferred tax liability at the end of 2018?
a. $42,000
b. $36,000
c. $15,000
d. $0

9. What is the amount of income tax expense for 2018?
a. $132,000
b. $126,000
c. $105,000
d. $90,000

On August 1, 2018 Adrian purchased 1,000 shares of Actovision Corporation common stock for $50,000. On November 1, 2018, Adrian sold her 1,000 shares of Actovision Corporation common stock for $40,000. On November 15, 2018, Adrian repurchased 800 shares of Actovision Corporation common stock for $28,000. What is Adrian’s realized and recognized gain or loss on the November 1, 2018 sale of her Actovision Corporation common stock. Please show your work and explain your calculations.  









What is her basis in her 800 shares of Actovision Corporation common stock repurchased on November 15, 2018? Please show your work and explain your calculations.  

Economics Chapter 5

6.) During the manufacture of a computer, the manufacturer of components sell the components to an Assembler for $150; the Assembler sells an assembled computer to the wholesaler for $375; the wholesaler sells the computer to the retailer for $500, and the retailer sells the computer to the customer for $750. What is the value of the computer in GDP? Explain

7.) Calculate the following and show the Calculations : (a) Nominal GDP in 2017 and 2018 (b) Real GDP in 2017 and 2018, using 2017 as the base year (c) GDP deflator in 2017 and 2018 (d) Inflation rate in 2018

Allmond Corporation, organized on January 3, 2018, had pretax accounting income of $34 million and taxable income of $44 million for the year ended December 31, 2018. The 2018 tax rate is 35%. The only difference between accounting income and taxable income is estimated product warranty costs. Expected payments and scheduled tax rates (based on recent tax legislation) are as follows: 2019 $ 4 million 30 % 2020 2 million 30 % 2021 2 million 30 % 2022 2 million 25 %

Required: 1. Determine the amounts necessary to record Allmond’s income taxes for 2018 and prepare the appropriate journal entry. 2. What is Allmond’s 2018 net income?

Problem 3. On December 31, 2017, the City of Danville received a gift of $10,000,000 to endow a new public library. Terms of the gift provide that the principal be held intact and invested in appropriate securities. The donor specifies that income is to be used for library acquisitions.                      

On January 2, 2018, the gift was invested in securities having an annual yield of 3 percent, payable quarterly. Library acquisitions costing $250,000 were made during 2018; $30,000 remains unpaid at year-end, December 31, 2018.               

Instructions:                                                                                                   

a. Identify the fund in which the above events would be recorded.          

b. Prepare appropriate journal entries (including closing entries) for 2017 and 2018.        

c. Present the fund financial statements for 2018.

Excerpts from Hulkster Company's December 31, 2018 and 2017, financial statements are presented below:

2018 2017

Accounts receivable $ 40,000 $ 36,000

Merchandise inventory    28,000 35,000

Net sales 190,000 186,000

Cost of goods sold 114,000 108,000

Total assets 425,000 405,000

Total shareholders' equity 240,000 225,000

Net income 32,500 28,000

1. Hulkster's 2018 average collection period is____________________

2. Hulkster's 2018 average days in inventory is (rounded)______________________

3. Hulkster's 2018 return on assets is (rounded):___________________________

4. What does the average collection period tell you?

5. What does the average days in inventory tell you?

The 2017 balance sheet of Kerber’s Tennis Shop, Inc., showed $2.15 million in long-term debt, $720,000 in the common stock account, and $6.1 million in the additional paid-in surplus account. The 2018 balance sheet showed $3.65 million, $935,000, and $8.55 million in the same three accounts, respectively. The 2018 income statement showed an interest expense of $290,000. The company paid out $520,000 in cash dividends during 2018. If the firm's net capital spending for 2018 was $730,000, and the firm reduced its net working capital investment by $185,000, what was the firm's 2018 operating cash flow, or OCF?

Multiple Choice

A. $3,725,000

B. $-2,810,000

C. $-3,355,000

D. $-3,850,000

E. $-4,940,000

Stanley-Morgan Industries adopted a defined benefit pension plan on April 12, 2018. The provisions of the plan were not made retroactive to prior years. A local bank, engaged as trustee for the plan assets, expects plan assets to earn a 10% rate of return. A consulting firm, engaged as actuary, recommends 5% as the appropriate discount rate. The service cost is $220,000 for 2018 and $310,000 for 2019. Year-end funding is $230,000 for 2018 and $240,000 for 2019. No assumptions or estimates were revised during 2018.

Required:

Calculate each of the following amounts as of both December 31, 2018, and December 31, 2019: (Enter your answers in thousands (i.e., 200,000 should be entered as 200).)

This information is available for Bramble Corp. for 2018, 2019, and 2020.

a) Calculate inventory turnover for Bramble Corp. for 2018, 2019, and 2020. (Round answers to 2 decimal places, e.g. 1.52.)

b) Calculate days in inventory for Bramble Corp. for 2018, 2019, and 2020. (Round answers to 1 decimal place, e.g. 1.5. Use 365 days for calculation)

c) Calculate gross profit rate for Bramble Corp. for 2018, 2019, and 2020. (Round answers to 0 decimal places, e.g. 125%)