ABC Furniture Company started construction of a office building for it’s own use at an estimated cost of $5,000,000 on January 1, 2016. ABC expected to complete the building by December 31, 2016. ABC has the following debt obligations outstanding during the construction period.

Construction Loan­ 12% interest, payable semiannually, issued December 31, 2015 $2,000,000

Short Term Loan ­ 10% interest, payable monthly, and principal payable at maturity on May 30, 2017 $1,400,000

Long­term loan – 11% interest, payable on January 1 of each year. Principal payable on January 1, 2019 $1,000,000

Assume that they completed the office building on December 31, 2016 as planned and the weighted average of accumulated expenditures was $3,600,000. What is the avoidable interest and the total cost capitalized for this building including interest?

Separate income statements of quail corp and its 80% owned subsidiary, Savannah corp, for 2016 are as follows:

Quail Savannah

sales rev 800,000 300,000

gain on equipment 35,000

cost of sales (400000) (160000)

other expenses (265000) (60000)

separate incomes 135000 115000

addiitonal information:

1. quail acquired its 80% interest in savannah corporation when the book values were equal to the fair values.

2. the gain on equipment relates to eqiupment with a book value of 85000 and a 7yr remaining useful life that svannah sold to quail for 120,000 on jan 1 2016. straight line depreciaiton method is used

required:

prepare a consolidated income statement for quail corp and subsidiary for the year 2016 by preparing a consolidated wokrsheet

please show all work

Madison Corporation is authorized to issue $500,000 of 5-year bonds dated June 30, 2016, with a stated rate of interest of 11%. Interest on the bonds is payable semiannually, and the bonds are sold on June 30, 2016.

Required:

Determine the proceeds that the company will receive if it sells the following: (Click here to access the tables to use with this exercise and round your answers to two decimal places, if necessary.)

Bryan Company issued $500,000 of 10% face value bonds on January 1, 2016, for $486,000. The bonds are due December 31, 2018, and pay interest semiannually on June 30 and December 31. Bryan uses the straight-line amortization method.

Required:

1. What is the future value on December 31, 2022, of 6 annual cash flows of $50,000 with the first cash flow being made on December 31, 2016, and interest at 9% compounded annually? Round your answer to two decimal places.

3.What is the present value on January 1, 2016, of 7 equal future annual receipts of $30,000 if the first receipt is received on January 1, 2017, and the interest rate is 10% compounded annually? Round your answer to two decimal places.

4.What is the future value on December 31, 2021, of 6 annual cash flows of $50,000 with the first cash flow being made on December 31, 2016, and interest at 9% compounded annually? Round your answer to two decimal places.

OSE provides a one year warranty on all its electronic products. The warranty is an assurance against manufacturing defects. In December 2016, OSE sold $500,000 worth of electronic products. The cost of the goods sold was $250,000 and OSE estimates the cost of repairs under the warranty to be $5,000.
During the financial year ended December 2017, OSE incurred cost of $3,000 to repair the products under warranty that were sold in December 2016. It also incurred costs of $1,000 on repairs that did not fall under the warranty agreement and charged its customers $1,200 for these repairs.
OSE complies with FRS 18 Revenue and FRS 37 Provision, Contingent Liabilities and Contingent Assets.

Prepare journal entries to record the sale of the electronic products and the warranty for the financial years ended 31 December 2016 and 31 December 2017.

Grouper Inc. acquired 10% of the outstanding common shares of Gregson Inc. on December 31, 2016. The purchase price was $904,000 for 45,200 shares, and is equal to 10% of Gregson’s carrying amount. Gregson declared and paid a $0.80 per share cash dividend on June 15 and again on December 15, 2017. Gregson reported net income of $516,000 for 2017. The fair value of Gregson’s shares was $24 per share at December 31, 2017. Grouper is a public company and applies IFRS.

Required: a) Prepare the journal entries for Grouper for 2016 and 2017, assuming that Grouper cannot exercise significant influence over Gregson. The investment is accounted for using the FV-OCI model.

b) Prepare the journal entries for Grouper for 2016 and 2017, assuming that Grouper can exercise significant influence over Gregson.

2. Abbey, Inc. acquired 15% of Tulsa Corporation on January 1, 2016, for $210,000 when the book value of Tulsa’s net assets was $950,000. During 2016, Tulsa reported net income of $330,000 and paid dividends of $70,000. On January 1, 2017, purchased an additional 25% of Tulsa for $350,000. Any excess of cost over book value was attributable to goodwill (No amortization). On that same date, Abbey changed to the equity method. During 2017, Tulsa reported net income of $420,000 and paid dividends of $110,000. Required: a. What income did Abbey record from Tulsa in 2016? b. What income did Abbey record from Tulsa in 2017? c. What journal entry was made to convert to the equity method? d. What was the balance in Equity Investment at December 31, 2017?

The following table shows the luxury tax threshold for MLB and Boston Red Sox payroll over 2012 - 2017. Year Luxury Tax Threshold Boston Red Sox Payroll 2012 178,000,000 179,859,051 2013 178,000,000 174,994,264 2014 189,000,000 174,313,058 2015 189,000,000 219,647,612 2016 189,000,000 215,875,101 2017 195,000,000 192,745,428 The luxury tax for an MLB team was 17.5%, 30%, 40%, and 50% depending on whether the team exceeded the threshold for the first, second, third or fourth time. Any team that drops below the threshold will reset their luxury tax rate, dropping them down to the first time rate (17.5%) . You can see that the Red Sox exceeded the threshold for the first time in 2015, and for the second time in 2016. How much was their luxury tax bill in 2015 an 2016?