Ivanhoe Corporation, a publicly traded company, is preparing the interim financial data which it will issue to its stockholders and the Securities and Exchange Commission (SEC) at the end of the first quarter of the 2017–2018 fiscal year. Ivanhoe’s financial accounting department has compiled the following summarized revenue and expense data for the first quarter of the year. Sales revenue $56,000,000 Cost of goods sold 35,200,000 Variable selling expenses 870,000 Fixed selling expenses 2,720,000 Included in the fixed selling expenses was the single lump-sum payment of $1,810,000 for television advertisements for the entire year. Ivanhoe Corporation must issue its quarterly financial statements in accordance with generally accepted accounting principles regarding interim financial reporting. Should Ivanhoe report its operating results for the quarter as if the quarter were a separate reporting period in and of itself, or as if the quarter were an integral part of the annual reporting period. . The company report its quarterly results as if each interim period is an integral part of the annual period. State how the sales revenue, cost of goods sold, and fixed selling expenses would be reflected in Ivanhoe Corporation’s quarterly report prepared for the first quarter of the 2017–2018 fiscal year. IVANHOE CORPORATION INCOME STATEMENT 2017–2018 $

Which of the following is true regarding the production and pricing decisions of monopolistically competitive firms? Monopolistically competitive firms choose the quantity at which marginal cost equals ________ and then use the _________ curve to determine the price that is consistent with this particular quantity.
A. average total cost; demand
B. average variable cost; demand
C. average total cost; supply
D. marginal revenue; demand
E. marginal revenue; supply

14. When a firm operates in a state of excess capacity,
A. it must be operating in a monopolistically competitive market.
B. additional production would increase average total cost.
C. additional production would decrease the average total cost.
D. A and B, only
E. A and C, only
15. A monopolistically competitive firm is currently producing 15,000 units of output. At this level of output the firm is charging a price equal to $10, has marginal revenue equal to $6, has marginal cost equal to $6, and has average total cost equal to $12. From this information we can infer that
A. the firm is currently maximizing its profit or minimizing its loss.
B. the profits of the firm are equal to negative $30,000.
C. firms are likely to enter this market in the long run.
D. All of the above are correct.
E. A and B, only

Presented below is a partial trial balance for the Messenger Corporation at December 31, 2021.

Additional information:

1. The notes receivable, along with any accrued interest, are due on November 1, 2022.
2. The notes payable are due in 2026. Interest is payable annually.
3. The investments consist of equity securities of other corporations. Management does not intend to sell any of the securities in the next year.
4. Deferred revenue will be recognized equally over the next 18 months.

Required:
Determine the company’s working capital at December 31, 2021. (Do not round your intermediate calculations.)

1. Which of the following in not classified as a current liability?

2. Revenues and gains are increased by:

3. Entity F paid its landlord rent of $7,000 per month for 8 months in advance on December 1, 2028. If Entity F’s accounting period ends on December 31, 2028, it will report

4. Which of the following accounts would be closed to income summary?

5. Which inventory costing method assumes that the most recent costs for inventory are matched against current sales?

6. Unearned revenue would be found on

Trillium Construction Company is a publicly traded company that began a long-term government contract on July 1, 2019 to build a housing complex for the price of $8,000,000. The construction was expected to take 24 months to complete.

a.       For the year ended December 31, 2019, Trillium incurred construction costs of $1,300,000 and it was estimated that an additional $3,900,000 in costs would needed to complete the contract. Trillium billed the government $2,000,000 during the first year and collected $1,000,000 by December 31, 2019. Trillium uses the percentage-of-completion method of revenue recognition. Calculate the gross profit to be recognized for the year ended December 31, 2019.

b.       Then, for the year ended December 31, 2020, Trillium incurred construction costs of $3,180,000 and at that point, it was estimated that an additional $1,120,000 in costs would be needed to complete the contract. Trillium billed the government $4,000,000 during the second year and collected $4,500,000 by December 31, 2020. Continuing to use the percentage-of-completion method of revenue recognition, calculate the revenue recognized for the year ended December 31, 2020.

c.       The CEO of Trillium has heard that the completed-contract method is easier to use than the percentage-of-completed method.   Briefly explain to the CEO (approximately 1 or 2 sentences) why Trillium should or should not adopt the completed contract method.

1. The following differences enter into the reconciliation of financial income and taxable income of Abbott Company for the year ended December 31, 2020, its first year of operations. The enacted income tax rate is 20% for all years.

         Pretax accounting income                                                                  $800,000

         Excess tax depreciation                                                                      (480,000)

         Litigation accrual                                                                                      70,000

         Unearned rent revenue deferred on the books but appropriately

               recognized in taxable income                                                            60,000

         Interest income from New York municipal bonds                           (20,000)

         Taxable income                                                                                    $430,000

1.   Excess tax depreciation will reverse equally over a four-year period, 2021-2024.

2.   It is estimated that the litigation liability will be paid in 2024.

3.   Rent revenue will be recognized during the last year of the lease, 2024.

4.   Interest revenue from the New York bonds is expected to be $20,000 each year until their maturity at the end of 2024.

(a)   Prepare a schedule of future taxable and (deductible) amounts.

(b)   Prepare a schedule of the deferred tax (asset) and liability at the end of 2020.

(c)   Since this is the first year of operations, there is no beginning deferred tax asset or liability. Compute the net deferred tax expense (benefit).

(d)   Prepare the journal entry to record income tax expense, deferred taxes, and the income taxes payable for 2020.

A uniform pricing monopolist has the following cost function and faces the following demand curve for its product: C(y) = 20y P(y) = 100 ? y

(b) There are two possible scenarios for the monopolist:

i The government sets a price ceiling of $40/unit in which case the monopolist does not invest in any R&D because it is wary of future government regulation.

ii There is no government regulation, so then the monopolist invests in R&D which then changes the cost function so that MC = 0. Which scenario has higher welfare (ignore the cost of R&D for producer surplus)? Which scenario do the consumers prefer? Explain.

(c) For plan (i), the marginal revenue curve features a discontinuity at some Q. Explain intuitively why the marginal revenue curve has this discontinuity.

(d) Go back to your solution in part a. Suppose now the government allows one other identical firm to enter this market and firms compete on quantity. Let x equal to value of marginal revenue at the monopolist output when there is only one firm. Claim: If the two firms each produce half the monopoly quantity, then MR = x for both firms at the current level of output. Is this claim true, false, or uncertain? Explain your reasoning.

Let's say that our lawmakers pass a flat tax system that sets a flat rate so that the revenue received by the government is exactly the same as the revenue earned in our current progressive system. Which of the following is true?

GREAT ADVENTURES, Inc.

Adjusted Trial Balance

December 31, 2019

Accounts Debit Credit

Cash 64,200

Accounts Receivable 2,000

Inventory 5,000

Prepaid insurance 2,400

Prepaid rent 1,600

Supplies (Office) 300

Supplies (Racing) 200

Equipment (Bikes) 12,000

Equipment (Kayaks) 21,000

Accumulated depreciation 8,000

Accounts payable 2,800

Income tax payable 14,000

Interest payable 750

Notes payable   30,000

Common stock

($1.00 par - 1,000,000 shares authorized,10,000 shares issued and outstanding) 10,000

Paid-in Capital in Excess of Par-Common 10,000

Dividends 4,000

Merchandise Sales Revenue 27,500

Sales returns and allowances 2,500

Service revenue (Clinic) 50,400

Service revenue (Racing) 17,500

Advertising expense 1,000

Cost of Goods Sold 15,000

Depreciation expense 8,000

Income tax expense 14,000

Insurance expense 2,400

Interest expense 750

Legal fees expense 1,500

Miscellaneous expense 1,200

Rent expense 800

Salaries expense 2,000

Selling expense 5,000

Supplies expense (Office) 1,500

Supplies expense (Racing) 2,600

Totals 170,950 170,950

For EPS (earnings per share) calculations use 10,000 shares of common stock as the weighted average number of shares outstanding.