January 1, 2016 SOS company invested 2,000,000 $ for 80% of RAT company, in that date the fair value of RAT is equal to its book value except inventories was undervalued 40,000, equipment ( 5 years ) undervalued 60,000 ,6% 10 years bonds overvalued 30,000 and unrecorded patent 80,000 estimated 20 years’ useful life. The owner’s equity was $1,200,000 shares, 600,000 premiums and 400,000 as retained earnings, the following are selective information about the parent and its subsidiary:

1- The subsidiary reported net income for 2016was$100,000 and declared and paid $20000 dividend.

2- during 2017 the parent sold a land cost 200,000 for $220,000. The reported income for the subsidiary was 90,000 and 10,000 dividend

3- in 1/1/ 2018 the subsidiary sold an equipment for parent for 120,000 and net book value 110,000, five years remaining use life and during the year the parent sold goods for 250,000 including 25% markup, the subsidiary ending inventory include 60000$ inventory from parent, the subsidiary net income of 2018 was 120,000 and$30,000 6-

4- During 2019 the subsidiary sold goods with mark up 20% at cost 300,000, 25% of this inventory still in hand in 31/12/2019, the subsidiary sold the land that purchased from parent for 250,000. The subsidiary reported net income was 180,000 and 30,000 dividends was paid.

5- during 2020 the subsidiary sold goods with mark up 20% at cost 400,000, $96,000 at selling price of this goods still in hand in 31/12/2020. The subsidiary reported net income was 360,000 and 80,000 dividends was paid.

6- The parent retained earnings in 31/12/2015 1,800,000 $. Dividends and income without income from subsidiary during the years was: 2016 (income 500,000$ dividend 150,000), 2017 (income 300,000$, dividend 80,000), 2018 ( income200,000$), 2019 (350,000$ , dividend 50,000), 2020 ( income100,000$)

Required:

1- Prepare all the elimination entries during the years from 2016 to 2020.

2- Journalize the income and dividend under equity methods in parent’s book for the year 2020.

3- Complete the following table:

Coro Ltd makes two products, Quara and Lock. The following data are relevant for the year ending 31^st December 2020:

Material prices

Material M      GHS2 per unit

Material N       GHS3 per unit

Direct labour is paid GHS10 per hour.

Production overhead cost is estimated to be GHS 200,000. Production overhead cost is absorbed into product costs using a direct labour hour absorption rate. Selling and administration overhead is budgeted to be GHS 75,000.

Each unit of finished product requires:

The sales director has forecast that sales of Quara and Lock will be 5,000 and 1,000 units respectively during the year 2020. The selling prices will be as follows:

Quara                         GHS182 per unit Lock                    GHS161 per unit

She estimates that there will be opening inventory of 100 units of Quara and 200 units of Lock. At the end of the year 2020, the company does not intend holding any inventory of Quara and Lock.

The Production Director estimates that the opening inventories of raw materials will be 3,000 units of M and 4,000 units of material N. At the end of the year 2020, the inventories of these raw materials are to be:

13. 4,000 units
14. 2,000 units

Statement of financial position extracts for year ended 31^st December 2019 are as follows:

Inventory of finished goods                                       GHS 15,000

Inventory of Raw materials                                        GHS 20,000

Retained earnings                                                       GHS 81,000

The Finance Director advises that the rate of tax to be paid on profits during the year 2020 is likely to be 30%.

Required:

1. 1. Prepare all functional budgets and budgeted statement of profit or loss for the year ending 31^st December 2020.
   2. The Managing Director of Coro Ltd is of the view that the budget preparation and presentation process is a waste of resources considering the time and money invested into it. He thinks the cost far outweighs the benefits and the company could still operate effectively without any budget. Do you agree with him? Explain why?
2. 2. The Management Accountant suggested that cash budget need to be prepared in addition to the functional budgets and the budgeted statement of Profit or Loss to make the budgeting process complete. Meanwhile, he claims he does not have enough information to prepare the cash budget. Advise him on the process and sources of information for preparation of a cash budget.

Question 1 Coro Ltd makes two products, Quara and Lock. The following data are relevant for the year ending 31st December 2020: Material prices Material M GHS2 per unit Material N GHS3 per unit Direct labour is paid GHS10 per hour. Production overhead cost is estimated to be GHS 200,000. Production overhead cost is absorbed into product costs using a direct labour hour absorption rate. Selling and administration overhead is budgeted to be GHS 75,000. Each unit of finished product requires: Quara Lock Material M 12 units 12 units Material N 6 units 8 units Direct labour 7 hours 10 hours The sales director has forecast that sales of Quara and Lock will be 5,000 and 1,000 units respectively during the year 2020. The selling prices will be as follows: Quara GHS182 per unit Lock GHS161 per unit She estimates that there will be opening inventory of 100 units of Quara and 200 units of Lock. At the end of the year 2020, the company does not intend holding any inventory of Quara and Lock. The Production Director estimates that the opening inventories of raw materials will be 3,000 units of M and 4,000 units of material N. At the end of the year 2020, the inventories of these raw materials are to be: 4,000 units 2,000 units Statement of financial position extracts for year ended 31st December 2019 are as follows: Inventory of finished goods GHS 15,000 Inventory of Raw materials GHS 20,000 Retained earnings GHS 81,000 The Finance Director advises that the rate of tax to be paid on profits during the year 2020 is likely to be 30%. Required: Prepare all functional budgets and budgeted statement of profit or loss for the year ending 31st December 2020. The Managing Director of Coro Ltd is of the view that the budget preparation and presentation process is a waste of resources considering the time and money invested into it. He thinks the cost far outweighs the benefits and the company could still operate effectively without any budget. Do you agree with him? Explain why? The Management Accountant suggested that cash budget need to be prepared in addition to the functional budgets and the budgeted statement of Profit or Loss to make the budgeting process complete. Meanwhile, he claims he does not have enough information to prepare the cash budget. Advise him on the process and sources of information for preparation of a cash budget.

U.S. GAAP and IFRS require property, plant, and equipment to be accounted for and reported differently. Explain the major differences between the two and how this affects the financial statements. Select one or the other method, explain your reason for your selection, providing support why your selection provides a benefit to the company.

*PLEASE DO NOT GIVE THE SAME ANSWER AS THE OTHER ANSWER ON CHEGG FOR THIS QUESTION*

Provide a short response that is for or against the following statements:

Accounting is an exact science. Managers choose accounting procedures that produce the most accurate financial picture U.S. accounting standards are influenced more by politics than economics. If FASB and SEC did not require financial disclosures, most companies would provide little to outsiders. Managers manipulate good and bad news about the company

Excel Online Structured Activity: Foreign capital budgeting

Sandrine Machinery is a Swiss multinational manufacturing company. Currently, Sandrine's financial planners are considering undertaking a 1-year project in the United States. The project's expected dollar-denominated cash flows consist of an initial investment of $2000 and a cash inflow the following year of $2400. Sandrine estimates that its risk-adjusted cost of capital is 12%. Currently, 1 U.S. dollar will buy 0.82 Swiss franc. In addition, 1-year risk-free securities in the United States are yielding 6.75%, while similar securities in Switzerland are yielding 3.5%. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below. Do not round intermediate calculations.

Open spreadsheet

1. If this project was instead undertaken by a similar U.S.-based company with the same risk-adjusted cost of capital, what would be the net present value and rate of return generated by this project? Round your answers to two decimal places.

   NPV = $  

   Rate of return = %

2. What is the expected forward exchange rate 1 year from now? Round your answer to two decimal places.

   SF per U.S. $

3. If Sandrine undertakes the project, what is the net present value and rate of return of the project for Sandrine? Do not round intermediate calculations. Round your answers to two decimal places.

   NPV =  Swiss Francs

   Rate of return = %

n 2018, Tom and Amanda Jackson (married filing jointly) have $240,000 of taxable income before considering the following events: (Use the dividends and capital gains tax rates and tax rate schedules.) On May 12, 2018, they sold a painting (art) for $115,000 that was inherited from Grandma on July 23, 2016. The fair market value on the date of Grandma’s death was $92,500 and Grandma’s adjusted basis of the painting was $26,000. They applied a long-term capital loss carryover from 2017 of $10,500. They recognized a $12,250 loss on the 11/1/2018 sale of bonds (acquired on 5/12/2008). They recognized a $4,300 gain on the 12/12/2018 sale of IBM stock (acquired on 2/5/2018). They recognized a $18,200 gain on the 10/17/2018 sale of rental property (the only §1231 transaction) of which $8,800 is reportable as gain subject to the 25 percent maximum rate and the remaining $9,400 is subject to the 0/15/20 percent maximum rates (the property was acquired on 8/2/2012). They recognized a $12,500 loss on the 12/20/2018 sale of bonds (acquired on 1/18/2018). They recognized a $7,250 gain on the 6/27/2018 sale of BH stock (acquired on 7/30/2009). They recognized an $11,500 loss on the 6/13/2018 sale of QuikCo stock (acquired on 3/20/2011). They received $700 of qualified dividends on 7/15/2018. After completing the required capital gains netting procedures, what will be the Jacksons’ 2018 tax liability? (Do not round intermediate calculations.)

In 2018, Tom and Amanda Jackson (married filing jointly) have $200,000 of taxable income before considering the following events: (Use the dividends and capital gains tax rates and tax rate schedules.)

1. On May 12, 2018, they sold a painting (art) for $110,000 that was inherited from Grandma on July 23, 2016. The fair market value on the date of Grandma’s death was $90,000 and Grandma’s adjusted basis of the painting was $25,000.
2. They applied a long-term capital loss carryover from 2017 of $10,000.
3. They recognized a $12,000 loss on the 11/1/2018 sale of bonds (acquired on 5/12/2008).
4. They recognized a $4,000 gain on the 12/12/2018 sale of IBM stock (acquired on 2/5/2018).
5. They recognized a $17,000 gain on the 10/17/2018 sale of rental property (the only §1231 transaction) of which $8,000 is reportable as gain subject to the 25 percent maximum rate and the remaining $9,000 is subject to the 0/15/20 percent maximum rates (the property was acquired on 8/2/2012).
6. They recognized a $12,000 loss on the 12/20/2018 sale of bonds (acquired on 1/18/2018).
7. They recognized a $7,000 gain on the 6/27/2018 sale of BH stock (acquired on 7/30/2009).
8. They recognized an $11,000 loss on the 6/13/2018 sale of QuikCo stock (acquired on 3/20/2011).
9. They received $500 of qualified dividends on 7/15/2018.
   
   After completing the required capital gains netting procedures, what will be the Jacksons’ 2018 tax liability?

In 2018, Tom and Amanda Jackson (married filing jointly) have $300,000 of taxable income before considering the following events: (Use the dividends and capital gains tax rates and tax rate schedules.)

1. On May 12, 2018, they sold a painting (art) for $122,500 that was inherited from Grandma on July 23, 2016. The fair market value on the date of Grandma’s death was $96,250 and Grandma’s adjusted basis of the painting was $27,500.
2. They applied a long-term capital loss carryover from 2017 of $11,250.
3. They recognized a $12,625 loss on the 11/1/2018 sale of bonds (acquired on 5/12/2008).
4. They recognized a $4,750 gain on the 12/12/2018 sale of IBM stock (acquired on 2/5/2018).
5. They recognized a $20,000 gain on the 10/17/2018 sale of rental property (the only §1231 transaction) of which $10,000 is reportable as gain subject to the 25 percent maximum rate and the remaining $10,000 is subject to the 0/15/20 percent maximum rates (the property was acquired on 8/2/2012).
6. They recognized a $13,250 loss on the 12/20/2018 sale of bonds (acquired on 1/18/2018).
7. They recognized a $7,625 gain on the 6/27/2018 sale of BH stock (acquired on 7/30/2009).
8. They recognized an $12,250 loss on the 6/13/2018 sale of QuikCo stock (acquired on 3/20/2011).
9. They received $1,000 of qualified dividends on 7/15/2018.
   
   After completing the required capital gains netting procedures, what will be the Jacksons’ 2018 tax liability? (Do not round intermediate calculations.)