Coronado Industries changed from the double-declining-balance to the straight-line method in 2018 on all its equipment. There was no change in the assets’ salvage values or useful lives. Plant assets, acquired on January 2, 2015, had an original cost of $1,670,400, with a $83,200 salvage value and an 8-year estimated useful life. Income before depreciation expense was $284,800 in 2017 and $342,400 in 2018.

A.)Prepare the journal entry to record depreciation expense in 2018.

B.) Starting with income before depreciation expense, prepare the remaining portion of the income statement for 2017 and 2018.

Courtney is a 50% partner in CD Partnership. Courtney and CD have calendar tax years. Courtney’s basis in her partnership interest is $25,000 on January 1, 2018. CD Partnership sustains an operating loss of $80,000 for 2018. CD Partnership earns business taxable income of $70,000 for 2019.

1. How much can Courtney take as a business loss on her 2018 tax return? _____________________
2. What is Courtney’s partnership interest basis on December 31, 2018? _______________________
3. What is Courtney’s taxable income in 2019? ___________________
4. What is Courtney’s partnership interest basis on December 31, 2019? ____________________

On January 1, 2018, the Marjlee Company began construction of an office building to be used as its corporate headquarters. The building was completed early in 2019. Construction expenditures for 2018, which were incurred evenly throughout the year, totaled $7,200,000. Marjlee had the following debt obligations which were outstanding during all of 2018:

Required:
Calculate the amount of interest capitalized in 2018 for the building using the specific interest method.
  

North Ltd. purchased a building in 2015 for $1,390,000. Straight-line depreciation was used, with a useful life of 40 years and a residual value of $400,000. A full year of depreciation was charged in 2015. In 2018, the company decided to switch depreciation methods to declining balance, using a rate of 10%. The tax rate is 25%.

Required:

1. Assume this is a change in estimate, and calculate 2018 depreciation expense.

2 Assume this is a change in policy, and calculate 2018 depreciation expense and the cumulative effect of the change on 2018 opening retained earnings.

Depreciation expense

Cumulative effect

RE: Netflix Ratios for 2016 - 2017 - 2018

Describe how and why each of the ratios has changed over the three-year period. For example, did the current ratio increase or decrease? Why? Describe how three of the ratios you calculated for your company compare to the general industry

Current Ratio: 2018 (1.49) 2017 (1.4) 2016 (1.25)

Debt Equity Ratio 2018 (1.98) 2017 (1.81) 2016 (1.26) - Industry Avg (36.8)

Price Earnings Ratio: 2018 (118.55) 2017 (220.95) 2016 (328.44) - Industry Avg (27,4)

Using Inventory Analysis Tools
AutoZone and O'Reilly are two competitors in the retail automotive parts industry.

Use the information above to compute the companies' gross profit margin and days inventory outstanding for both years.
Round answers to one decimal place (ex: 0.2345 = 23.5%).

Round to answers to nearest whole number (day).

Prat Corp. started the 2018 accounting period with $29,000 of assets (all cash), $11,500 of liabilities, and $14,000 of common stock. During the year, the Retained Earnings account increased by $15,550. The bookkeeper reported that Prat paid cash expenses of $30,500 and paid a $2,900 cash dividend to the stockholders, but she could not find a record of the amount of cash that Prat received for performing services. Prat also paid $4,000 cash to reduce the liability owed to the bank, and the business acquired $6,300 of additional cash from the issue of common stock.

1. a-1. Prepare an income statement for the 2018 accounting period.
2. a-2. Prepare a statement of changes in stockholders’ equity for the 2018 accounting period.
3. a-3. Prepare a period-end balance sheet for the 2018 accounting period.
4. a-4. Prepare a statement of cash flows for the 2018 accounting period.

Section 179. (Obj. 2) Sand Corporation buys one asset in 2018---machinery costing $32,300,000. The machine was placed in service on June 2, 2018. Sand wants to elect the maximum Section 179 possible, even if some must be carried over to 2019. Sand's 2018 business income limitation (taxable income before Section 179 expense, but after all other expenses, including depreciation) is $167,000. A) Compute the maximum Section 179 Sand can elect to expense in 2018, the actual allowed 2018 expense deduction, and the Section 179 carryover to 2019. B) What is the regular depreciation deduction on the machine (7-year property; half-year convention) after taking into account the maximum section 179 deduction and assuming no bonus depreciation is clamied?