Damon, Inc., acquired 25% of Jolie Enterprises for $8,000,000 on October 1, 2018. The total fair value of Jolie's identifiable net assets was $27,000,000 on that date, and the total book value of those net assets was $23,000,000.

The difference between fair value and book value is attributed to equipment that has a remaining useful life of 4 years. During 2018 Jolie recognized net income of $2,000,000 and paid dividends of $1,200,000 ($300,000 per quarter). Jolie had a fair value of $36,000,000 as of December 31, 2018.

Required: Assume Damon accounts for the Jolie investment under the equity method. Indicate the total effect of the Jolie investment on Damon's:

1) Net income for 2018.

2) The balance in Damon's investment account on December 31, 2018.

Golden Manufacturing Company started operations by acquiring $142,000 cash from the issue of common stock. On January 1, 2018, the company purchased equipment that cost $132,000 cash, had an expected useful life of five years, and had an estimated salvage value of $13,200. Golden Manufacturing earned $94,700 and $68,080 of cash revenue during 2018 and 2019, respectively. Golden Manufacturing uses double-declining-balance depreciation.

Required

1. Record the purchase in a horizontal statements model.

1. b-1. Prepare an income statements for 2018 and 2019. Use a vertical statements format.

1. b-2. Prepare a balance sheets for 2018 and 2019. Use a vertical statements format.

1. b-3. Prepare a statements of cash flows for 2018 and 2019. Use a vertical statements format.

At the end of 2017, Payne Industries had a deferred tax asset account with a balance of $30 million attributable to a temporary book–tax difference of $75 million in a liability for estimated expenses. At the end of 2018, the temporary difference is $70 million. Payne has no other temporary differences and no valuation allowance for the deferred tax asset. Taxable income for 2018 is $180 million and the tax rate is 40%.

Required:
1. Prepare the journal entry(s) to record Payne’s income taxes for 2018, assuming it is more likely than not that the deferred tax asset will be realized.
2. Prepare the journal entry(s) to record Payne’s income taxes for 2018, assuming it is more likely than not that one-fourth of the deferred tax asset will ultimately be realized.

• Record valuation allowance for the end of 2018.

During its first year of operations, Cupola Fan Corporation issued 37,000 of $1 par Class B shares for $420,000 on June 30, 2018. Share issue costs were $2,200. One year from the issue date (July 1, 2019), the corporation retired 10% of the shares for $43,000.

Required:
1. to 4. Prepare the journal entry to record the issuance of the shares, the declaration of a $2.70 per share dividend on December 1, 2018, the payment of the dividend on December 31, 2018 and the retirement of the shares. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

(Journal Entries):

Record the issuance of the shares.

Record the declaration of a $2.70 per share dividend on December 1, 2018.

Record the payment of the dividend on December 31, 2018.

Record the retirement of the shares.

The information that follows pertains to Richards Refrigeration, Inc.:

1. At December 31, 2018, temporary differences existed between the financial statement carrying amounts and the tax bases of the following:

2. No temporary differences existed at the beginning of 2018.
3. Pretax accounting income was $211 million and taxable income was $145 million for the year ended December 31, 2018. The tax rate is 40%.

Required:
1. Complete the following table given below and prepare the appropriate journal entry to record income taxes for 2018
2. What is the 2018 net income?

The Accounts Receivable balance for Gold​, Inc. at December​ 31, 2017​, was $27,000. During 2018​, Gold earned revenue of 461,000 on account and collected $326,000 on account. Gold wrote off $6,400 receivables as uncollectible. Industry experience suggests that uncollectible accounts will amount to 2​% of accounts receivable.

1. Assume Gold had an unadjusted $1,800 credit balance in Allowance for Bad Debts at December ​31, 2018. Journalize Gold​'s December ​31, 2018​, adjustment to record bad debts expense using the​ percent-of-receivables method.

2.  Assume Gold had an unadjusted $1,500 debit balance in Allowance for Bad Debts at December ​31, 2018. Journalize Gold​'s December ​31, 2018​, adjustment to record bad debts expense using the​ percent-of-receivables method.

The Bradford Company issued 10% bonds, dated January 1, with a face amount of $50 million on January 1, 2018 to Saxton-Bose Corporation. The bonds mature on December 31, 2027 (10 years). For bonds of similar risk and maturity, the market yield is 12%. Interest is paid semiannually on June 30 and December 31. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.): Required: 1. to 3. Prepare the journal entry to record the purchase of the bonds by Saxton-Bose on January 1, 2018, interest revenue on June 30, 2018 and interest revenue on December 31, 2018 (at the effective rate). (Enter your answers in whole dollars. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Record the purchase of the bonds by Saxton-Bose.

Record the interest revenue on June 30, 2018.

Record the interest revenue on December 31, 2018.