ABC Pty Ltd sells upmarket washing machines. It had $200,000 stock on hand at the beginning of the 2017/2018 financial year. It purchased $50,000 of additional trading stock during the income year. The closing stock on hand was $130,000.

At the beginning of the 2018/2019 financial year ABC Pty Ltd had $130,000 stock on hand. It did not purchase any stock during the year as it was having financial difficulties. In fact, in September 2018 ABC gave two washing machines to a creditor as payment in full of the debt it owed to that creditor (ABC owed the creditor $2,000). Each washing machine had cost ABC $1,000 and ABC would usually sell each washing machine for $1,750.

ABC did not sell any stock during the 2018/2019 financial year. Towards the end of that year, a flood swept through the warehouse and all stock was destroyed. ABC did not purchase any replacement stock.

Required: Advise ABC of the tax implications for each of the 2017/2018 and 2018/2019 financial years based on the information above. Where appropriate, support your answer with legislative authority.           

In 2018, Rogan LLC had the following information related to sales and inventory. Rogan uses a perpetual inventory system and the FIFO cost method. All sales and inventory purchases are on account.

On January 1, 2018, Rogan reported:

Inventory                                                         $30,000 (3,000 units at a cost of $10/unit)

In 2018, Rogan had the following inventory transactions (in chronological order):

Purchased, on account, 5,000 units at a cost of $12/unit.

Sold, on account, 6,000 units at a selling price of $25/unit; terms included sales discount.

Received $135,000 on account from customers who owed $140,000; $5,000 taken in discounts.

Purchased, on account, 8,000 units at a cost of $15/unit.

Sold, on account, 9,000 units at a selling price of $30/unit; terms included sales discount.

Received $250,000 on account from customers who owed $260,000; $10,000 taken in discounts

Requirement 1: Record the 2018 inventory transactions.

Requirement 2: Determine 2018 net sales.

Requirement 3: Determine 2018 gross profit.

Requirement 4: Determine the 12-31-18 balances for Accounts Receivable and Inventory.

On January 1, 2018, Pine Company owns 40 percent (80,000 shares) of Seacrest, Inc., which it purchased several years ago for $448,000. Since the date of acquisition, the equity method has been properly applied, and the carrying amount of the investment account as of January 1, 2018, is $580,000. Excess patent cost amortization of $24,000 is still being recognized each year. During 2018, Seacrest reports net income of $582,000 and a $240,000 other comprehensive loss, both incurred uniformly throughout the year. No dividends were declared during the year. Pine sold 16,000 shares of Seacrest on August 1, 2018, for $168,759 in cash. However, Pine retains the ability to significantly influence the investee. During the last quarter of 2017, Pine sold $60,000 in inventory (which it had originally purchased for only $36,000) to Seacrest. At the end of that fiscal year, Seacrest's inventory retained $13,900 (at sales price) of this merchandise, which was subsequently sold in the first quarter of 2018. On Pine's financial statements for the year ended December 31, 2018, what income effects would be reported from its ownership in Seacrest?

On December 31, 2017, Berclair Inc. had 540 million shares of common stock and 21 million shares of 9%, $100 par value cumulative preferred stock issued and outstanding. On March 1, 2018, Berclair purchased 24 million shares of its common stock as treasury stock. Berclair issued a 5% common stock dividend on July 1, 2018. Four million treasury shares were sold on October 1. Net income for the year ended December 31, 2018, was $1,050 million.

Also outstanding at December 31 were 84 million incentive stock options granted to key executives on September 13, 2013. The options were exercisable as of September 13, 2017, for 84 million common shares at an exercise price of $75 per share. During 2018, the market price of the common shares averaged $100 per share.

The options were exercised on September 1, 2018.

Required:

Compute Berclair’s basic and diluted earnings per share for the year ended December 31, 2018. (Enter your answers in millions (i.e., 10,000,000 should be entered as 10).)

When Patey Pontoons issued 8% bonds on January 1, 2018, with a face amount of $780,000, the market yield for bonds of similar risk and maturity was 11%. The bonds mature December 31, 2021 (4 years). 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. Determine the price of the bonds at January 1, 2018. 2. Prepare the journal entry to record their issuance by Patey on January 1, 2018. 3. Prepare an amortization schedule that determines interest at the effective rate each period. 4. Prepare the journal entry to record interest on June 30, 2018. 5. What is the amount related to the bonds that Patey will report in its balance sheet at December 31, 2018? 6. What is the amount related to the bonds that Patey will report in its income statement for the year ended December 31, 2018? (Ignore income taxes.) 7. Prepare the appropriate journal entries at maturity on December 31, 2021.

On May 31, 2018, Javier Sanchez purchased and placed in service a new 7-year class asset costing $489,200 for use in his landscaping business, which he operates as a single member LLC (Sanchez Landscaping LLC).

Rather than using bonus depreciation, Javier would like to use § 179 to expense $200,000 of this asset and then use regular MACRS to cost recover the remaining cost. During 2018, his business generated a net income of $587,040 before any § 179 immediate expense election.

If required round your intermediate computations and final answers to the nearest dollar. Click here to access the depreciation table to use for this problem.

a. Determine the cost recovery deductions (including first year additional depreciation) that Javier Sanchez can claim with respect to this asset in 2018 and 2019.
Total cost recovery deduction in 2018: $
Total cost recovery deduction in 2019: $

b. Complete Javier's Form 4562 (page 1) for 2018.

Note: For 2018, the maximum § 179 is $1,000,000 and the threshold amount is $2,500,000. If an amount is zero, enter "0". Enter amounts as positive numbers

Assume Nortel Networks contracted to provide a customer with Internet infrastructure for $2,300,000. The project began in 2018 and was completed in 2019. Data relating to the contract are summarized below:

Required:
1. Compute the amount of revenue and gross profit or loss to be recognized in 2018 and 2019 assuming Nortel recognizes revenue over time according to percentage of completion.
2. Compute the amount of revenue and gross profit or loss to be recognized in 2018 and 2019 assuming this project does not qualify for revenue recognition over time.
3. Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of 2018 assuming Nortel recognizes revenue over time according to percentage of completion.
4. Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of 2018 assuming this project does not qualify for revenue recognition over time.

21)Katia, age 14, is a dependent of her parents. Her only source of income in 2018 is $7,500 of interest income on bonds given her by her grandparents. Katia's marginal rate is 10%, and her parent's marginal rate is 28%. Katia's tax for 2018 is (kiddie tax rules for 2018)

A) $357.

B) $395.

C) $964.

D) $1,044.

22)Santino, age 14, is a dependent of his parents. During 2018, Santino's earned income from wages is $3,500 and Santino received $4,000 of interest income. The parent's marginal rate is 28% and Santino's marginal rate is 10%. Santino's tax is (kiddie tax rules for 2018)

A) $285.

B) $365.

C) $483.

D) None of the above.

24)Chen, a single taxpayer, had the following income and deductions during 2018:

Salary                                                    $55,000

Interest on bank account                               750

Tax-exempt interest                                      500

Deduction for AGI                                     5,500

Itemized deductions                                15,000

Taxes withheld                                         5,500

Calculate Chen's tax liability due or refund.

1. $1,010.50 tax liability.
2. $1,010.50 refund.
3. $705.50 tax liability.

          D)    $705.50 refund.

On January 1, 2017, the City of Hastings created a solid waste landfill that it expects to reach capacity gradually over the next 20 years. If the landfill were to be closed at the current time, closure costs would be approximately $1.50 million plus an additional $810,000 for postclosure work. Of these totals, the city must pay $58,000 on December 31 of each year for preliminary closure work. At the end of 2017, the landfill reached 2 percent of capacity. At the end of 2018, the landfill reached 12 percent of capacity. Also at the end of 2018, a reassessment is made; total closure costs are determined to be $1.70 million rather than $1.50 million. Assuming that the landfill is viewed as an enterprise fund, what journal entries are made in 2017 and 2018 on the government-wide financial statements? Assuming that the landfill is reported within the general fund, what journal entries are made in 2017 and 2018 on the government-wide financial statements? Assuming that the landfill is viewed as an enterprise fund, what journal entries are made in 2017 and 2018 on fund financial statements? Assuming that the landfill is reported within the general fund, what journal entries are made in 2017 and 2018 on fund financial statements?

On January 1, 2018, Holidays Unlimited issues 6%, 5-year bonds payable with a face value of $180,000. The bonds are issued at 104 and pay interest on June 30 and December 31.

How much money will Holiday receive from the bond sale?

Is the stated interest rate of 6% higher than the prevailing market interest rate at issue?

Record the accounting entry when the bond is issued: Record the accounting entry on June 30, 2018: (Hint: record interest expense, amortize the discount on B/P, and record cash payment: Cash payment is calculated based on face value and stated rate)

Record the accounting entry on December 31, 2018: What is the carrying amount of the bond as of December 31, 2018?

If the company decides to retire the bonds at December 31, 2018 for $185,000, what is the journal entry for retiring the bond?

Holiday did not retire the bonds at the end of 2018. Holiday pays off the bonds on January 1, 2023. Show the accounting entry: (Hint: at maturity, the company pays off the maturity value)

*please answer the three bolded questions* thank you :)