On January 1, 2020, ECT Co. adopted the dollar-value LIFO method for its one inventory pool. The pool's value on this date was $600 million. The 2020 and 2021 ending inventory valued at year-end costs were $702 million and $840 million, respectively. The appropriate cost indexes are 1.08 for 2020 and 1.20 for 2021.

Required:

Calculate the inventory balance that ECT Co. would report on its year-end balance sheets for 2020 and 2021, using the dollar-value LIFO method and submit using the DVL template.

On January 1, 2020, Penguin Corporation, the parent corporation of a consolidated group of corporations filing a calendar year consolidated tax return, acquires all of the stock of Steeler corporation for $3 million. In 2020, Steeler Corporation earns $500,000 of taxable income, it earns $20,000 of tax-exempt interest income, it pays Penguin corporation a dividend of $400,000. Steeler pays Penguin an amount equal to its stand-alone income tax liability for 2020, computed at the statutory tax rate of 21%. Compute Penguin’s year-end 2020 tax basis in Steeler stock.

A hurricane destroys Kirk’s boat in 2017. The boat is worth $40,000, and Kirk paid $30,000 for the boat two years ago. The boat is a personal use asset. Kirk’s AGI for 2020 is 40,000. Answer the following unrelated situations:

a. What is the casualty deduction that Kirk can take in 2017?

b. Assume that the boat was destroyed in 2020. What is the casualty deduction Kirk can take in 2020?

c. Assume that the insurance company pays Kirk $35,000 in 2017 to cover the loss of the boat. What is the casualty deduction Kirk can take in 2020?

Read the following news items and explain where a short-run decision and a long-run decision are involved?

a. January 31, 2020: Tim Horton will open 60 more stores in Asian countries  

b. March 30, 2020: All stores of Tim Horton will shut down on Tuesday stores so that baristas can receive a refresher course.

c. June 2, 2020: Tim Horton replaces baristas with vending machines.

d. June 30, 2020: Tim Horton is closing 200 stores in British Columbia by the end of July

Mitchell Corporation pays $10 million to acquire a 30 percent interest in Turner Corporation’s stock on January 1, 2020, and reports the investment using the equity method. Any basis difference is attributed to goodwill. During 2020, Turner reports net income of $1,000,000, which includes $50,000 in realized and unrealized gains on trading securities. Turner also reports $80,000 in unrealized losses on AFS securities in other comprehensive income, and pays dividends of $250,000 in 2020. Required Prepare Mitchell’s journal entries to record the above events for 2020

In 2020, Hydrogen Corp. began selling a new line of products that carry a two-year warranty against defects. Based upon past experience with other products, the estimated warranty costs related to dollar sales are as follows:

           First year of warranty 2%

           Second year of warranty 5%

Sales and actual warranty expenditures for 2020 and 2021 are presented below:

                                                                                             2020                               2021

           Sales                                                                     $ 450,000                     $ 600,000

           Actual warranty expenditures 15,000                           30,000

Hydrogen uses the expense approach to account for warranties.

Provide the journal entries for 2020 relating to the above transactions.

Dre Inc. began operations on 01/01/2020 and bought some equipment for $30,000. Dre uses a four-year straight-line depreciation for accounting purposes. For tax, the deduction is 40% of cost in 2020, 30% in 2021, and 30% in 2022. Pretax accounting income for 2020 was $160,000, including interest revenue of $25,000 from municipal bonds. The tax rate is 30% for all years.

Required:
Prepare a journal entry to record income taxes for the year 2020. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Sheffield Inc. was authorized to issue 100000 £10 par value ordinary shares. As of December 31, 2020, the company had issued 54000 shares at an average price of £22 per share. During 2020, the company felt that the shares were undervalued so it purchased 9800 treasury shares at £16 per share. When the share price rebounded later in the year, the company sold 4200 of the treasury shares for £24 per share. Retained earnings was £1666000 at December 31, 2020.

Total equity at December 31, 2020 is

£2697200.

£2994000.

£2764400.

£2798000.

Write a program that reads in a single integer.

Display a message depending on what is given:

• When the number is 42, output "42 is the Ultimate Question of Life, the Universe, and Everything."
• When the number is 2020 output "2020 is the current year."
• When the number is greater than 1000 and less than 3000 output "1500 could be a year." where 1500 is the number the user originally inputted
• When none of the above, output "no idea."

One example shown below with the user input highlighted:

Give a number: 2020
2020 is the current year.

Riverbed Company reports pretax financial income of $63,900 for 2020. The following items cause taxable income to be different than pretax financial income.

Riverbed’s tax rate is 30% for all years, and the company expects to report taxable income in all future years. There are no deferred taxes at the beginning of 2020.

Compute taxable income and income taxes payable for 2020.

Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2020.

Compute the effective income tax rate for 2020.