Question 15

At December 31, 2017, the available-for-sale debt portfolio for Bramble, Inc. is as follows:

Security Cost Fair Value Unrealized Gain (Loss)

A $62,125 $53,250 $(8,875 )

B 44,375 49,700 5,325

C 81,650 90,525 8,875

Total $188,150 $193,475 5,325

Previous fair value adjustment balance—Dr. 1,420

Fair value adjustment—Dr. $3,905

On January 20, 2018, Bramble, Inc. sold security A for $53,605. The sale proceeds are net of brokerage fees.

Bramble Inc. reports net income in 2017 of $426,000 and in 2018 of $497,000. Unrealized holding gains and gains equal $142,000 in 2018.

Prepare a statement of comprehensive income for 2017, starting with net income. BRAMBLE, INC Statement of Comprehensive Income For the Year Ended December 31, 2017  

Prepare a statement of comprehensive income for 2018, starting with net income. BRAMBLE, INC Statement of Comprehensive Income For the Year Ended December 31, 2018

1. Wing Sdn.Bhd is responsibility to pay royalties of RM70,000 to Way Pte Ltd for the financial year ended 31 December 2018. Wing Sdn.Bhd paid RM63,000, net of tax to Way Pte Ltd on 30 December 2018.

The company claimed the entire RM70,000 as a tax deduction to arrive at the chargeable income of RM800,000 for Y/A 2018.

Wing Sdn.Bhd submits its tax return Form C for Y/A 2018 on 31 July 2019, showing a tax charge of RM192,000 (24% of RM800,000). As at 31 August 2019, Wing Sdn Bhd did not yet submit the Withholding tax to IRB.

Required:

1. Compute the amount of penalty that the Director General can impose on Wing Sdn.Bhd for Y/A 2018.

2. Compute the amount due to IRB as at 31 August 2019.

2. Would your answer be the same in (b) if Wing Sdn Bhd is a pioneer company enjoying full income tax exemption under the Promotion of Investment Act 1986?

Taylor Corporation has used a periodic inventory system and the LIFO cost method since its inception in 2011. The company began 2018 with the following inventory layers (listed in chronological order of acquisition):

During 2018, 40,000 units were purchased for $20 per unit. Due to unexpected demand for the company's product, 2018 sales totaled 49,000 units at various prices, leaving 26,000 units in ending inventory.

Required:
1. Calculate cost of goods sold for 2018.
2. Determine the amount of LIFO liquidation profit that the company must report in a disclosure note to its 2018 financial statements. Assume an income tax rate of 40%.
3. If the company decided to purchase an additional 9,000 units at $20 per unit at the end of the year, how much income tax currently payable would be saved?
  

the accounts reciavable balance by highland company at 31, 2017 was 25 ,000 during 2018 highland earned revenue of 452,000 on account and collected 329,000 on account , hihgland wrote off 5,400 reciavable as uncollective Industry experience suggests that uncollectible accounts will amount to 6% of accounts receivable. Assume highland had an unadjusted 2,000 credit balance in allowance for bad debts at December 21 , 2018 , journalize highland December 31 , 2018 , adjustment to record a bad debt expense using the percent -of- receivables method ( record debits first , then credits , selec the explanation on the las line of the journal entry table.) Assume highland had an unadjusted 1,800 debit balance in allowance for bad debts at December 31 . 2018 . journalize highlands December 31 , 2018 adjustment to record bad debts exprense using the percent of reciables method( record debits first , then credits , selec the explanation on the las line of the journal entry table)

On December 31, 2017, Jackson Company had 100,000 shares of common stock outstanding and 30,000 shares of 7%, $50 par, cumulative preferred stock outstanding. On February 28, 2018, Jackson purchased 24,000 shares of common stock on the open market as treasury stock paying $45 per share. Jackson sold 6,000 of the treasury shares on September 30, 2018, for $47 per share. Net income for 2018 was $180,905. Also outstanding at December 31, 2017, were fully vested incentive stock options giving key personnel the option to buy 50,000 common shares at $40. These stock options were exercised on November 1, 2018. The market price of the common shares averaged $50 during 2018.

1. Compute basic EPS rounded to the nearest cent

2. Compute diluted EPS rounded to the nearest cent

Provide explanation for each number in both the denominator and numerator

On January 1, 2018, a machine was purchased for $117,500. The machine has an estimated salvage value of $10,400 and an estimated useful life of 5 years. The machine can operate for 119,000 hours before it needs to be replaced. The company closed its books on December 31 and operates the machine as follows: 2018, 23,800 hrs; 2019, 29,750 hrs; 2020, 17,850 hrs; 2021, 35,700 hrs; and 2022, 11,900 hrs.

(a)

Compute the annual depreciation charges over the machine’s life assuming a December 31 year-end for each of the following depreciation methods. (Round answers to 0 decimal places, e.g. 45,892.)

During 2018, Barden Building Company constructed various assets at a total cost of $10,500,000. The weighted average accumulated expenditures (WAAE) on assets qualifying for capitalization of interest during 2018 were $7,000,000. The company had the following debt outstanding at December 31, 2018: • 10%, 5-year note to finance construction of various assets, dated January 1, 2017, with interest payable annually on January 1 $4,500,000 • 12%, twelve-year bonds issued at par on December 31, 2009, with interest payable annually on December 31 6,000,000 • 9%, 4-year note payable, dated January 1, 2016, with interest payable annually on January 1 3,500,000 Instructions Compute the amounts of each of the following (show computations). 1. Actual interest 2. Average Interest Rate 3. Avoidable interest 4. Interest to be capitalized during 2018 5. Interest expense reported 2018

1.

Consider the following data for the following economy,

where there only two goods: wine and cheese. In the

following table are data for three different years. Use the

first year, 2016, as the base year in calculating real

GDP, the GDP deflator, and the CPI.

2016

2017

2018

P

Q

P

Q

P

Q

Wine

$2.50

25

$3.50

30

$ 4.00

35

Cheese

$7.00

20

$9.00

20

$ 10.00

25

a.

Calculate the inflation rate b

etween 2016

and 2017 and then between 2017 and 2018

using

a Laspeyres

index (call it the CPI

).

b. Calculate

the inflation rate between 201

6 and 2017 and then

between 2017 and 2018

using

a Paasche index

(call it the

GDP deflator

).

c.

Calculate the growth rate of

nominal GDP between 2016 and 2017

and then between 2017 and 2018.

d. Calculate the grow

th rate of real GDP between 2016 and 2017

and then between 201

7 and 2018.