Question 3 - Week 10 On 1 March 2020 Holmes Ltd enters into a binding agreement with a New Zealand company, which requires the New Zealand Company to construct an item of machinery for Holmes Ltd. The cost of the machinery is NZ$750,000. The machinery is completed on 1 June 2021 and shipped FOB Auckland on that date. The debt is unpaid at 30 June 2020, which is also Holmes Ltd’s reporting date. The exchange rates at the relevant dates are: 1 March 2020 A$1.00 = NZ$1.20 30 June 2020 A$1.00 = NZ$1.30 1 June 2021 A$1.00 = NZ$1.25

Required: a) Determine the amount in AUD, as at: • 1 March 2020; and • 30 June 2020. b) Prepare the journal entries for the above dates, up to 1 June 2021,showing the amount of exchange gain or loss .

Topic: Equity method investments

LO 2

Delta Corporation acquired 25% of the voting stock of Davidson Company in 2019. There were no basis differences. It is now 2020. Davidson reported 2020 net income of $5,000,000, other comprehensive income of $100,000, and declared and paid cash dividends of $1,500,000. Delta’s ending inventory contains $1,020,000 purchased from Davidson, and its beginning inventory contains $750,000 purchased from Davidson. Davidson sells inventory to Delta at a markup of 20% on cost. Delta uses the equity method to account for its investment in Davidson.

Required

a. Calculate equity in net income of Davidson, reported on Delta’s 2020 income statement.

b. Prepare Delta’s 2020 journal entry or entries related to its investment in Davidson.

c. What is the net effect of the investment in Davidson on Delta’s 2020 net income and on Delta’s 2020 comprehensive income

Additional information:

Calculate all possible liquidity, solvency, and profitability ratios for 2021. (Round answers for Collection period, Days sales in inventory, Operating cycle and Free cash flow to 0 decimal places, e.g. 125. Round answer for Earnings per share to 2 decimal places, e.g. 12.56. Round all other answers to 1 decimal place, e.g. 12.5 or 12.5%. )

On January 2, 2020, Seller sends Buyer a letter offering to sell an Andy Warhol painting (described in the letter) for $ 500,000. According to the letter, the seller must receive buyer’s acceptance no later than January 10, 2020. On January 6th, buyer (who wants the Warhol painting for his personal collection) decides to accept the offer and prepares a letter which states, "I accept your January 2, 2020 offer to sell the rare postage stamp (as described in the offer) for $500,000". Buyer leaves the office at noon for lunch. On the way, he stops at the post office to mail the letter.

Meanwhile, on the morning of January 6th, someone else offers Seller $ 600,000 for the painting. Before Seller accepts this offer, he needs to revoke the original offer that he had made to Buyer. Therefore, Seller calls Buyer’s office at 12:15 p.m. to revoke his offer. Seller speaks to Buyer’s secretary - the following exchange takes place:

Secretary: Buyer is out to lunch - he should be back at 1:00 p.m.

Seller: “Have him call me. I’m revoking my offer to sell the Andy Warhol painting”.

Secretary leaves Buyer a phone message slip that reads “Seller called. He wants you to return the call”. Secretary then goes out to lunch. When Buyer returns from lunch, he sees the message and calls Seller - the following exchange takes place:

Buyer: Funny you should call. I just got back from the post office. I just mailed you a letter. I am accepting your offer for the Andy Warhol painting.

Seller: Actually, the offer is revoked. In fact, I told secretary “I’m revoking my offer to sell the Andy Warhol painting”.

The January 6th letter was delivered to Seller on January 8, 2020. Seller now refuses to transfer the painting. Buyer sues. RESULT?

Answer in this format :

1. Identification of the precise legal issue(s) presented by the facts :

2. Statement of the relevant legal principles/rules related to the issues

   identified :

Problem 23-04

Sarasota Company had the following information available at the end of 2020.

Prepare a statement of cash flows for Sarasota Company using the direct method accompanied by a reconciliation schedule. Assume the short-term investments are debt securities, classified as available-for-sale. (Show amounts in the investing and financing sections that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Ivanhoe Company had the following information available at the end of 2020.

Prepare a statement of cash flows for Ivanhoe Company using the direct method accompanied by a reconciliation schedule. Assume the short-term investments are debt securities, classified as available-for-sale. (Show amounts in the investing and financing sections that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

1. Read the following article excerpt: Sweetened-beverage sales in Seattle dropped 30% after soda tax, new study says The Columbian https://www.columbian.com/news/2020/feb/23/sweetened-beverage-sales-in-seattle-dropped-30- after-soda-tax-new-study-says/

By Daniel Beekman, The Seattle Times Published: February 23, 2020, 1:45pm

Sales of sugar-sweetened beverages at stores in Seattle dropped about 30.5% in the months after the city adopted a tax on such beverages, says a new study that also looked at sales at stores in Portland, which has no such tax. Sales in Portland declined only 10.5%, suggesting sales in Seattle dropped much more than they would have without a tax, according to the peer-reviewed study by University of Illinois at Chicago researchers.

The study’s results are the first to measure the impact of Seattle’s tax on beverage sales in the city, and they may bolster claims by supporters that the controversial policy is working as intended.

“From a public health perspective, this is good,” said Jay Krieger, a University of Washington professor who heads the nonprofit Healthy Food America. “People are purchasing less sugary drinks, and we know that sugary drinks are associated with heart disease, diabetes, high blood pressure and strokes.” Seattle’s tax of 1.75 cents per fluid ounce, which took effect on Jan. 1, 2018, is charged to distributors of sugar-sweetened beverages.

Distributors can pass the tax on to stores, and stores to consumers. Proponents said the tax would reduce soda sales and raise money for health and education programs.

Your task 1: Explain, with the aid of a diagram, how a soda tax such as the one described above would impact consumers, producers and society more generally.

Your task 2: Comment on whether or not you support such a tax and why.

We are to make a program about a car dealership using arrays. I got the code to display all cars in a list, so I'm good with that. What I'm stuck at is how to make it so when a user inputs x for search, it allows them to search the vehicle. We need two classes, one that shows the car information and another that shows the insert, search, delete, display methods. Here is what I have so far

package a1chrisd;

import java.util.Scanner;

public class Car {

    /**
     * @param args the command line arguments
     */
    String color;
    String model;
    String year;
    String company;
    String plate;

    public Car(String color, String model, String year, String company, String plate) {
        this.color = color;
        this.model = model;
        this.year = year;
        this.company = company;
        this.plate = plate;
    }

   public void introduceSelf() {
       System.out.println("This is a" + " " + this.color + " " + this.year + " " + this.company + " " + this.model + " with plate " + this.plate);
    }

    public static void main(String[] args){
         String arrModel[] = {"Corolla", "Mustang", "Cavalier", "LaSabre", "Civic",
                             "Accord", "Avalon", "Escalade", "XTS", "A220", "Crown Victoria"}; // Car models
       String arrPlate[] = {"11111", "22222", "33333", "44444", "55555",
                              "66666", "77777", "88888", "99999", "00000"}; // car plates
         String arrCompany[] = {"Toyota", "Ford", "Cheverolet", "Buick", "Honda",
                                "Honda", "Toyota", "Cadillac", "Cadillac", "Mercedes Benz", "Ford"}; // car company
         String arrColor[] = {"Red", "White", "White", "Green", "Black",
                               "Green", "Blue", "Black", "Orange", "Brown", "Blue"}; // car color
        String arrYear[] = {"2015", "2019", "1987", "2020", "2020",
                                "2001", "2004", "2016", "2010", "1991"}; // car year
                      
      
        Scanner in = new Scanner(System.in);
   int carsInserted = 0;
           Car arrCar[] = new Car[50];
           for (int i = 0; i < 10; i++){
               Car c = new Car(arrColor[i], arrYear[i], arrCompany[i], arrModel[i], arrPlate[i]);
               arrCar[i] = c;
           }
           
            for(int i = 0; i < 10; i++){
                arrCar[i].introduceSelf();
            }
    }
   

Consolidation worksheet, consolidated financial statements

On 1 July 2018, Ghostbusters Ltd acquired all the shares of Bat Ltd for $305 000 on an ex-div. basis. On this date, the equity and liabilities of Bat Ltd included the following balances:

At acquisition date, all the identifiable assets and liabilities of Bat Ltd were recorded at

amounts equal to fair value except for:

Goodwill was not impaired in any period. The plant and equipment had a further 5-year life at acquisition date and was expected to be used evenly over that time. The trademark was considered to have an indefinite life. The machinery, which was estimated to have a further 4-year life at acquisition date, was sold on 1 January 2020. Any adjustments for differences between carrying amounts at acquisition date and fair values are made on consolidation.

During the year ended 30 June 2019, all inventories on hand at acquisition date were sold, and the land was sold on 1 June 2020. Any valuation reserves created are transferred on consolidation to retained earnings when assets are sold or fully consumed.

Additional information

Of the interim dividend paid by Bat Ltd in the current year, $5000 was from profits before acquisition date. All other dividends were from current year profits. Shareholder approval is not required in relation to dividends.

On 1 July 2019, Bat Ltd has on hand inventory worth $12 000, being transferred from Ghostbusters Ltd in June 2019. The inventory had previously cost Ghostbusters Ltd $8000. On 31 March 2020, Bat Ltd transferred an item of plant with a carrying amount of $10 000 to Ghost Ltd for $15 000. Ghostbusters Ltd treated this item as inventory. The item was still on hand at the end of the year. Bat Ltd applied a 20% depreciation rate to this plant.

On 1 January 2020, Bat Ltd acquired $8000 inventory from Ghostbusters Ltd. This inventory originally cost Ghostbusters Ltd $5000. The profit in inventory on hand at 30 June 2020 was $1000.

During the year ending 30 June 2020, Bat Ltd sold inventory costing $12 000 to Ghostbusters Ltd for $18 000. Two-thirds of this was sold to external parties for $9000.

On 1 January 2019, Ghostbusters Ltd sold furniture to Bat Ltd for $8000. This had originally cost Ghostbusters Ltd $12 000 and had a carrying amount at the time of sale of $7000. Both entities charge depreciation at a rate of 10% p.a.

Ghostbusters Ltd sold some land to Bat Ltd in December 2019. The land had originally cost Ghostbusters Ltd $25 000, but was sold to Bat Ltd for only $20 000. To help Bat Ltd pay for the land, Ghostbusters Ltd gave Bat Ltd an interest-free loan of $12 000. Bat Ltd has as yet made no repayments on the loan.

The tax rate is 30%.

On 30 June 2020 the trial balances of Ghostbusters Ltd (Ghost) and Bat Ltd were as follows:

Required

Prepare the consolidation journal / worksheet entries for Ghostbusters Ltd for 30/6/2020.

Update and complete the consolidation worksheet for 30/6/2020. Use the worksheet provided below

Marmidan Mold Shop Inc. designs and builds molds for the automotive and aircraft industries. The account balances in the company’s general ledger on January 1, 2020 (first day of the new annual fiscal year) were as follows (all account balances are in their normal position):

Cash                                                                    $     3,700

Accounts receivable                                                   5,900

Supplies inventory                                                    29,300

Land                                                                        168,500  

Buildings                                                                 116,500

Accumulated depreciation, buildings                       37,500   

Equipment                                                                 58,500

Accumulated depreciation, equipment                     18,000

Accounts payable                                                      25,200

Income tax payable                                                   16,600

Interest payable                                                           4,200

Wages payable (due in 2020)                                    15,700                                         

9% Notes payable ($10,000 due June 30, 2021,

     balance due June 30, 2022)                                  61,500

Common shares                                                       151,500

Retained earnings, Dec. 31, 2019                              52,200  

Transactions during 2020:

1.The company provided sales services to customers, on credit, for $ 210,300. In addition, the company produced cash sales to customers of $ 62,300.

2.Accounts receivable from customers of $ 15,600 remain to be collected at December 31, 2020.

3.Inventory of $ 62,900 was purchased on credit and debited to the supplies inventory account.

4.Minor parts were purchased with cash for $ 7,400 and debited to the supplies inventory account.

5.Wages payable at the beginning of 2020 were paid early in 2020. In addition, wages were earned by employees and paid during 2020 in the amount of $ 112,000.

6.Income tax payable at the beginning of 2020 was paid early in 2020.

7.Payments of $ 73,000 were made to creditors for supplies previously purchased on credit.

8.One year’s interest at 9% was paid on the notes payable at July 1, 2020.

9. During 2020, Don Tallint, the principal shareholder, purchased a new car for his wife

    Debbie. The new car cost $ 45,000 and was paid for with cash from personal sources.

10.Property taxes were paid on the land and buildings in the amount of $ 17,000 with cash.

11.Dividends were declared and paid in caah in the amount of $ 7,200.

Information available for year end adjusting entries:

12.•Supplies inventory was counted on December 31, 2020 and it was determined the supplies inventory still on hand at yearend was $ 31,900.

13. •Annual depreciation on the buildings is $ 6,000.

14•Annual deprecation on the equipment is $ 5,500

15•Additional wages of $4,000 were earned but are unpaid and unrecorded at December 31, 2020.

16•Interest for six months at 9% per year on the notes payable is unpaid and unrecorded at December 31, 2020..

17•Income taxes of $ 16,500 were unpaid and unrecorded at December 31, 2020.

Required:

1.Record beginning 2020 beginning balances in T accounts. Prepare journal entries for transactions 1 to 11 above as required and record the journal entries in T accounts while

adding any new T accounts that you need as you complete this task.

2.Prepare any necessary adjusting journal entries fpr items 11 to 17 above and record the adjusting journal entries in the T accounts while adding any new T accounts that you need as you complete this task.

3. Prepare a single step income statement for Marmidan Mold Shop Inc. for the year ended December 31, 2020.

4.Prepare a statement of retained earnings for Marmidan Mold Shop Inc. for the year ended December 31, 2020.

5.Prepare a classified statement of financial position for Marmidan Mold Shop Inc. as at December 31, 2020