Since 1970, Super Rise, Inc., has provided maintenance services for elevators. On January 1, 2018, Super Rise obtains a contract to maintain an elevator in a 90-story building in New York City for 10 months and receives a fixed payment of $96,000. The contract specifies that Super Rise will receive an additional $48,000 at the end of the 10 months if there is no unexpected delay, stoppage, or accident during the year. At the beginning of the contract, Super Rise estimates there is a 25% chance of earning the bonus. On June 30, 2018, Super Rise changes the estimate to reflect a 65% chance of earning the bonus. Super Rise prepares financial statements monthly.

If super Rise estimates variable consideration using the expected value approach, what amount of revenue related to the contract will be reported on 6/30/2018, and 7/31/2018?

Zekany Corporation would have had identical income before taxes on both its income tax returns and income statements for the years 2018 through 2021 except for differences in depreciation on an operational asset. The asset is purchased in 2018 at a cost of $120,000 and is depreciated fully for income tax purposes in 2018. The operational asset has a four-year life and no residual value. The straight-line method is used for financial reporting purposes. Pretax accounting income amounts for each of the four years were as follows: 2018 2019 2020 2021 Pretax accounting income $90,000 80,000 70,000 70,000 Assume the average and marginal income tax rate for 2018 and 2019 was 30%; however, during 2019, tax legislation was passed to raise the tax rate to 40% beginning in 2020.

1. Prepare the year-end journal entries to record income taxes for 2018.

2. Prepare the year-end journal entries to record income taxes for 2019.

Exercise 22-11

Cullumber Co. purchased a equipment on January 1, 2015, for $555,500. At that time, it was estimated that the equipment would have a 10-year life and no salvage value. On December 31, 2018, the firm’s accountant found that the entry for depreciation expense had been omitted in 2016. In addition, management has informed the accountant that the company plans to switch to straight-line depreciation, starting with the year 2018. At present, the company uses the sum-of-the-years’-digits method for depreciating equipment.

Prepare the general journal entries that should be made at December 31, 2018, to record these events. (Ignore tax effects.) (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Suppose that on Jan 6, 2018, Excel Motors paid $240,000,000 for its 45% investment in Dynamic Motors. Excel has significant influence over Dynamic after the purchase. Assume Dynamic earned net income of $10,000,000 and paid cash dividens of $15,000,000 to all outstanding stockholders during 2018.

What method should Excel Motors use to account for the investment in Dynamic Motors? Give your reasoning.

Excel Motors should use the (available for sale, consolidation, equity, held-to-maturity) method to account for its investment in Dynamic Motors.

Journalize the following:

Excel motors paid $240,000,000 for its 45% investment in Dynamic Motors

Dynamic paid cash dividens of $15,000,000 to all outstanding shareholders during 2018

Dynamic earned net income of $10,000,000 during 2018

Post all 2018 transactions to the investment T-account. What is its balance after all the transactions are posted? ow would this balance be classified on the balance sheet dated Dec 21, 2018?

The cash flow to creditors for 2018 is ______ while the cash flow to stockholders for 2018 is _____.
A. -$640; $705
B. -$175; $255
C. $175; $255
D. $175; $450
E. $640; $450

Explain the whole process, please!

During the course of your examination of the financial statements of the Hales Corporation for the year ended December 31, 2018, you discover the following: a. An insurance policy covering three years was purchased on January 1, 2018, for $6,600. The entire amount was debited to insurance expense and no adjusting entry was recorded for this item. b. During 2018, the company received a $850 cash advance from a customer for merchandise to be manufactured and shipped in 2019. The $850 was credited to sales revenue. No entry was recorded for the cost of merchandise. c. There were no supplies listed in the balance sheet under assets. However, you discover that supplies costing $900 were on hand at December 31. d. Hales borrowed $25,000 from a local bank on October 1, 2018. Principal and interest at 12% will be paid on September 30, 2019. No accrual was recorded for interest. e. Net income reported in the 2018 income statement is $40,000 before reflecting any of the above items.    Required: Determine the proper amount of net income for 2018.

Colah Company purchased $1.8 million of Jackson, Inc., 8% bonds at par on July 1, 2018, with interest paid semi-annually. Colah determined that it should account for the bonds as an available-for-sale investment. At December 31, 2018, the Jackson bonds had a fair value of $2.08 million. Colah sold the Jackson bonds on July 1, 2019 for $1,620,000.

The purchase of the Jackson bonds on July 1.

Interest revenue for the last half of 2018.

Any year-end 2018 adjusting entries.

Interest revenue for the first half of 2019.

Any entries necessary upon sale of the Jackson bonds on July 1, 2019, including updating the fair-value adjustment, recording any reclassification adjustment, and recording the sale.

Required:
1. Prepare Colah’s journal entries for above transaction.
2. Fill out the following table to show the effect of the Jackson bonds on Colah’s net income, other comprehensive income, and comprehensive income for 2018, 2019, and cumulatively over 2018 and 2019.

Eye Deal Optometry leased vision-testing equipment from Insight Machines on January 1, 2018. Insight Machines manufactured the equipment at a cost of $350,000 and lists a cash selling price of $437,810. Appropriate adjusting entries are made quarterly. (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.) Related Information: Lease term 5 years (20 quarterly periods) Quarterly lease payments $26,250 at Jan. 1, 2018, and at Mar. 31, June 30, Sept. 30, and Dec. 31 thereafter. Economic life of asset 5 years Interest rate charged by the lessor 8% Required: 1. Prepare appropriate entries for Eye Deal to record the arrangement at its beginning, January 1, 2018, and on March 31, 2018. 2. Prepare appropriate entries for Insight Machines to record the arrangement at its beginning, January 1, 2018, and on March 31, 2018.

Colah Company purchased $1.9 million of Jackson, Inc., 7% bonds at par on July 1, 2018, with interest paid semi-annually. Colah determined that it should account for the bonds as an available-for-sale investment. At December 31, 2018, the Jackson bonds had a fair value of $2.19 million. Colah sold the Jackson bonds on July 1, 2019 for $1,710,000. The purchase of the Jackson bonds on July 1. Interest revenue for the last half of 2018. Any year-end 2018 adjusting entries. Interest revenue for the first half of 2019. Any entries necessary upon sale of the Jackson bonds on July 1, 2019, including updating the fair-value adjustment, recording any reclassification adjustment, and recording the sale.

Required: 1. Prepare Colah’s journal entries for above transaction.

2. Fill out the following table to show the effect of the Jackson bonds on Colah’s net income, other comprehensive income, and comprehensive income for 2018, 2019, and cumulatively over 2018 and 2019.