1A) On January 1, 2014, Garr Company acquired machinery at a cost of $320,000 The machinery was being depreciated using the double declining balance method. It had an estimated useful life of 8 years and no residual value. At the beginning of 2016, Garr changed to the straight-line method of depreciation. Prepare any journal entry required to account for this change.

1B) Gundrum Inc. purchased equipment on January1, 2012 for $850,000. The equipment was expected to have a useful life of 10 years and a salvage value of $30,000. Gundrum uses the straight line method of depreciation. At the beginning of 2017, Gundrum determined that the total estimated life of the equipment was 13 years and that the residual value would be $10,000. Prepare the journal entry necessary to account for this change.

On January ​1, Staley Utilities Company acquired a power plant at a total cost of $23,580,000​, and paid cash. The estimated cost​ (in today's​ market) to dismantle the plant and restore the property at the end of the​ plant's 15​-year life is $4,859,000 Staley's cost of capital is 2. Staley will depreciate the asset over its useful life using the​ straight-line method. The asset has no residual value.

Requirements:

Problem 1

On January 2, 20x8, the Todd Company acquired a truck with a list price of $400,000. The Todd Company's incremental borrowing rate is 8% (imputed rate). Assume that the

truck manufacturer is offering Todd the following terms (each situation is independent). For each of the terms, prepare the journal entries for the life of the note. Assume a December 31 year end.

Todd company is a publicly accountable company.

a) Todd Company has to make equal annual payments of principal and interest over five years. Payments are due on December 31 of every year. The interest rate charged is 10%.

b) Todd Company pays the $400,000 in three years. No interest is charged on the note.

c) Todd Company pays the $400,000 in three years. Interest of 3% is charged on the note payable on December 31 of every year.

d) Todd Company pays $80,000 on the principal at the end of every year, over 5 years. No interest is charged.

e) Todd Company has to make equal annual payments of principal and interest over five years. The interest rate charged is 4%.

Plug Products owns 80 percent of the stock of Spark Filter Company, which it acquired at underlying book value on August 30, 20X6. At that date, the fair value of the noncontrolling interest was equal to 20 percent of the book value of Spark Filter. Summarized trial balance data for the two companies as of December 31, 20X8, are as follows:

On January 1, 20X8, Plug's inventory contained filters purchased for $76,000 from Spark Filter, which had produced the filters for $56,000. In 20X8, Spark Filter spent $116,000 to produce additional filters, which it sold to Plug for $157,429. By December 31, 20X8, Plug had sold all filters that had been on hand January 1, 20X8, but continued to hold in inventory $47,229 of the 20X8 purchase from

Plug Products owns 80 percent of the stock of Spark Filter Company, which it acquired at underlying book value on August 30, 20X6. At that date, the fair value of the noncontrolling interest was equal to 20 percent of the book value of Spark Filter. Summarized trial balance data for the two companies as of December 31, 20X8, are as follows:

On January 1, 20X8, Plug's inventory contained filters purchased for $76,000 from Spark Filter, which had produced the filters for $56,000. In 20X8, Spark Filter spent $116,000 to produce additional filters, which it sold to Plug for $157,429. By December 31, 20X8, Plug had sold all filters that had been on hand January 1, 20X8, but continued to hold in inventory $47,229 of the 20X8 purchase from Spark Filter.

Required:
a. Prepare all consolidation entries needed to complete a consolidation worksheet for 20X8. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
  

b. Compute consolidated net income and income assigned to the controlling interest in the 20X8 consolidated income statement.

c. Compute the balance assigned to the noncontrolling interest in the consolidated balance sheet as of December 31, 20X8.

Eaton Ross Puppet Company acquired a new plastic molding machine at the beginning of the current year at a cost of $ 450 comma 000. The asset has a 6​-year useful life for financial reporting purposes and is depreciated on a​ straight-line basis with no residual value expected at the end of its useful life. The company uses the​ double-declining balance method on its income tax returns. The company is subject to a 35​% tax rate. Compute the deferred tax portion of the income tax expense for the first 2 years. Complete the table below to compute the​ straight-line book depreciation and​ double-declining tax depreciation method through year 2 to determine the​ book-tax difference.​ (Round your calculations to the nearest​ dollar.)

The balance sheets for Kinder Company showed the following information. Additional information concerning transactions and events during 2020 are presented below.

Kinder Company

Balance Sheet

            December 31    

     2020                  2019

         Cash $ 30,900 $ 10,200

         Accounts receivable (net) 43,300 20,300

         Inventory 35,000 42,000

         Long-term investments 0 15,000

         Property, plant & equipment 236,500 150,000

         Accumulated depreciation     (37,700)              (25,000)

$308,000 $212,500

         Accounts payable $ 17,000           $ 26,500

         Accrued liabilities 21,000 17,000

         Long-term notes payable 70,000 50,000

         Common stock 130,000 90,000

         Retained earnings      70,000               29,000

$308,000 $212,500

Additional data:

1.   Net income for the year 2020, $61,000.

2. Gain on sale of investment, $18,000, included in net income.

3.   Paid a $40,000 long-term note payable by issuing common stock.

Prepare a Statement of Cash Flows for Kinder using the indirect method using Be sure to include required supplemental disclosures.

The balance sheets for Kinder Company showed the following information. Additional information concerning transactions and events during 2020 are presented below.

Kinder Company

Balance Sheet

            December 31    

     2020                  2019

         Cash $ 30,900 $ 10,200

         Accounts receivable (net) 43,300 20,300

         Inventory 35,000 42,000

         Long-term investments 0 15,000

         Property, plant & equipment 236,500 150,000

         Accumulated depreciation     (37,700)              (25,000)

$308,000 $212,500

         Accounts payable $ 17,000           $ 26,500

         Accrued liabilities 21,000 17,000

         Long-term notes payable 70,000 50,000

         Common stock 130,000 90,000

         Retained earnings      70,000               29,000

$308,000 $212,500

Additional data:

1.   Net income for the year 2020, $61,000.

2. Gain on sale of investment, $18,000, included in net income.

3.   Paid a $40,000 long-term note payable by issuing common stock.

Prepare a Statement of Cash Flows for Kinder using the indirect method using Be sure to include required supplemental disclosures.

Anthony is a new investor and has been closely watching a company by the name of CLS Ltd., a pharmaceutical company aiming to develop a coronavirus vaccine.

Anthony believes the following returns are possible in 2020 and has attached a probability to each potential outcome:

a) Calculate the Expected Return for CLS Ltd. in 2020.

Show formula, calculation and a concluding statement in your response.

b) Calculate the Risk (Standard Deviation) for CLS Ltd. in 2020.

Show formula, calculation and a concluding statement in your response.

c) Anthony is considering investing all his savings in buying shares in CLS Ltd. Explain to Anthony why he should not do this by referring to the risk/return trade-off. What action can Anthony take to reduce some of the risk?

d) Explain what the standard deviation actually measures in Finance. Include in your answer an explanation of what a high and low value for the standard deviation means.

1) Carol works for ABC Company and earned $64,500 for the entire year 2018. How much in FUTA tax is her employer required to withhold in her name? Assume that the employer receives the maximum credit for state unemployment taxes.

Choices:

A) $0

B) $435.00

C) $46.40

D) $42.00

2) Alice is single and self-employed in 2020. Her net business profit on her Schedule C for the year is $158,000.

What is her self-employment tax liability and additional Medicare tax liability for 2020? (Round your final answer to the nearest whole dollar amount. Leave no answer blank. Enter zero if applicable.)

Self-Employment Tax Liability =

Additional Medicare Tax Liability =

3) Rasheed works for Company A, earning $360,000 in salary during 2020.

Assuming he is single and has no other sources of income, what amount of FICA tax will Rasheed pay for the year? (Round your intermediate and final answer to the nearest whole dollar amount.)

Amount of FICA Tax =