Sherrod, Inc., reported pretax accounting income of $86 million for 2021. The following information relates to differences between pretax accounting income and taxable income:

1. Income from installment sales of properties included in pretax accounting income in 2021 exceeded that reported for tax purposes by $5 million. The installment receivable account at year-end 2021 had a balance of $6 million (representing portions of 2020 and 2021 installment sales), expected to be collected equally in 2022 and 2023.
2. Sherrod was assessed a penalty of $2 million by the Environmental Protection Agency for violation of a federal law in 2021. The fine is to be paid in equal amounts in 2021 and 2022.
3. Sherrod rents its operating facilities but owns one asset acquired in 2020 at a cost of $92 million. Depreciation is reported by the straight-line method, assuming a four-year useful life. On the tax return, deductions for depreciation will be more than straight-line depreciation the first two years but less than straight-line depreciation the next two years ($ in millions):

4. For tax purposes, warranty expense is deducted when costs are incurred. The balance of the warranty liability was $1 million at the end of 2020. Warranty expense of $5 million is recognized in the income statement in 2021. $3 million of cost is incurred in 2021, and another $3 million of cost anticipated in 2022. At December 31, 2021, the warranty liability is $3 million (after adjusting entries).
5. In 2021, Sherrod accrued an expense and related liability for estimated paid future absences of $12 million relating to the company’s new paid vacation program. Future compensation will be deductible on the tax return when actually paid during the next two years ($10 million in 2022; $2 million in 2023).
6. During 2020, accounting income included an estimated loss of $6 million from having accrued a loss contingency. The loss is paid in 2021, at which time it is tax deductible.

Balances in the deferred tax asset and deferred tax liability accounts at January 1, 2021, were $1.8 million and $2.0 million, respectively. The enacted tax rate is 25% each year.

Required:
1. Determine the amounts necessary to record income taxes for 2021, and prepare the appropriate journal entry.
2. What is the 2021 net income?
3. Show how any deferred tax amounts should be classified and reported in the 2021 balance sheet.

Sherrod, Inc., reported pretax accounting income of $86 million for 2021. The following information relates to differences between pretax accounting income and taxable income:

1. Income from installment sales of properties included in pretax accounting income in 2021 exceeded that reported for tax purposes by $5 million. The installment receivable account at year-end 2021 had a balance of $6 million (representing portions of 2020 and 2021 installment sales), expected to be collected equally in 2022 and 2023.
2. Sherrod was assessed a penalty of $2 million by the Environmental Protection Agency for violation of a federal law in 2021. The fine is to be paid in equal amounts in 2021 and 2022.
3. Sherrod rents its operating facilities but owns one asset acquired in 2020 at a cost of $92 million. Depreciation is reported by the straight-line method, assuming a four-year useful life. On the tax return, deductions for depreciation will be more than straight-line depreciation the first two years but less than straight-line depreciation the next two years ($ in millions):

4. For tax purposes, warranty expense is deducted when costs are incurred. The balance of the warranty liability was $1 million at the end of 2020. Warranty expense of $5 million is recognized in the income statement in 2021. $3 million of cost is incurred in 2021, and another $3 million of cost anticipated in 2022. At December 31, 2021, the warranty liability is $3 million (after adjusting entries).
5. In 2021, Sherrod accrued an expense and related liability for estimated paid future absences of $12 million relating to the company’s new paid vacation program. Future compensation will be deductible on the tax return when actually paid during the next two years ($10 million in 2022; $2 million in 2023).
6. During 2020, accounting income included an estimated loss of $6 million from having accrued a loss contingency. The loss is paid in 2021, at which time it is tax deductible.

Balances in the deferred tax asset and deferred tax liability accounts at January 1, 2021, were $1.8 million and $2.0 million, respectively. The enacted tax rate is 25% each year.

Required:
1. Determine the amounts necessary to record income taxes for 2021, and prepare the appropriate journal entry.
2. What is the 2021 net income?
3. Show how any deferred tax amounts should be classified and reported in the 2021 balance sheet.

Sherrod, Inc., reported pretax accounting income of $78 million for 2021. The following information relates to differences between pretax accounting income and taxable income:

1. Income from installment sales of properties included in pretax accounting income in 2021 exceeded that reported for tax purposes by $3 million. The installment receivable account at year-end 2021 had a balance of $4 million (representing portions of 2020 and 2021 installment sales), expected to be collected equally in 2022 and 2023.
2. Sherrod was assessed a penalty of $4 million by the Environmental Protection Agency for violation of a federal law in 2021. The fine is to be paid in equal amounts in 2021 and 2022.
3. Sherrod rents its operating facilities but owns one asset acquired in 2020 at a cost of $72 million. Depreciation is reported by the straight-line method, assuming a four-year useful life. On the tax return, deductions for depreciation will be more than straight-line depreciation the first two years but less than straight-line depreciation the next two years ($ in millions):

4. For tax purposes, warranty expense is deducted when costs are incurred. The balance of the warranty liability was $2 million at the end of 2020. Warranty expense of $4 million is recognized in the income statement in 2021. $3 million of cost is incurred in 2021, and another $3 million of cost anticipated in 2022. At December 31, 2021, the warranty liability is $3 million (after adjusting entries).
5. In 2021, Sherrod accrued an expense and related liability for estimated paid future absences of $8 million relating to the company’s new paid vacation program. Future compensation will be deductible on the tax return when actually paid during the next two years ($5 million in 2022; $3 million in 2023).
6. During 2020, accounting income included an estimated loss of $4 million from having accrued a loss contingency. The loss is paid in 2021, at which time it is tax deductible.

Balances in the deferred tax asset and deferred tax liability accounts at January 1, 2021, were $1.5 million and $1.5 million, respectively. The enacted tax rate is 25% each year.

Required:
1. Determine the amounts necessary to record income taxes for 2021, and prepare the appropriate journal entry.
2. What is the 2021 net income?
3. Show how any deferred tax amounts should be classified and reported in the 2021 balance sheet.

1. Common shares are issued in exchange for a noncash asset. Under IFRS, the noncash asset should be recorded at:

1. The average cost of the common shares in the common shares account
2. The fair market value of the shares
3. The fair market value of the asset acquired
4. The fair market value of the asset acquired or the fair market value of the common shares if the fair market value of the asset cannot be reliably determined

2. What is the cumulative effect of the declaration and payment of a cash dividend on a company’s financial statements?

1. To decrease total liabilities and shareholders’ equity
2. To increase total expenses and total liabilities
3. To increase total assets and shareholders’ equity
4. To decrease total assets and shareholder’s equity

3. What is the journal entry to record the issuance of 1,000,000 common shares for $8 each and 250,000, $2.50 preferred shares for $50 each?

1. Cash                                                                8,875,000

                 Common Shares                                                                   8,000,000

                 Preferred Shares                                                                      875,000

2. Cash                                                                  8,625,000

                 Common Shares                                                                   8,000,000

                 Preferred Shares                                                                      625,000

3. Cash                                                                  8,000,000

                 Common Shares                                                                   8,000,000

4. Common Shares                                             8,000,000

Preferred Shares                                                875,000

                 Cash                                                                                       8,875,000

4. The liability for a cash dividend is recorded on which of the following dates?

1. Date of record
2. Date of payment
3. Year-end date
4. Date of declaration

5. On January 1^st, 2019, Hanson Corporation has 15,000, $2.60 cumulative preferred shares and 20,000 common shares. Hanson did not pay any dividends during the previous year ended December 31^st, 2018. The company pays $45,000 of dividends during 2019. Which of the following amounts represents the amount of dividends that the preferred shareholders would receive in 2019?

1. $45,000
2. $39,000
3. $15,000
4. $6,000

6. Which of the following best describes the authorized shares of a corporation?

1. They must be recorded in a formal accounting entry
2. They have an effect on both assets and shareholders’ equity
3. Authorized share capital is required to be shown on a corporation’s financial statements under both ASPE and IFRS
4. They are indicated in a corporation’s articles of incorporation

7. What is total shareholders’ equity based on the following account balances?

Common Shares                           $450,000

$2.25 Preferred Shares                    90,000

Retained Earnings                           190,000

Dividends Payable                             10,000                         

1. $740,000
2. $730,000
3. $720,000
4. $640,000

8. Which of the following would result in a credit to retained earnings?

1. Loss for the period
2. Dividend declaration
3. Dividend payment
4. Profit for the period

9. Based on the following information, calculate return on equity ( round to two decimal places ).

Number of Issued Common Shares                     #30,000

Number of Issued Preferred Shares                    #100,000

Profit for the year                                                   $76,000

Average Shareholders’ Equity for the year        $262,300

1. 2.02
2. 0.29
3. 0.50
4. 3.45

10. Turpin Ltd. reported retained earnings of $725,000 on its March 31, 2019 balance sheet.

It reported a profit of $260,000 for the year ended March 31, 2020. Its retained earnings at March 31, 2020 was $865,000. Which of the following amounts represents the dividends declared by Turpin during the year ended March 31, 2020? ( assume no other effects on retained earnings during the year )

1. $120,000
2. $400,000
3. $465,000
4. $985,000

On 1 July 2019, Batman Ltd acquired all the issued shares (cum div.) of Robin Ltd for $150 000. At this date the equity of Robin Ltd consisted of:

Share capital $75 000
Retained earnings $22 500

At this date, Robin Ltd had recorded a dividend payable of $22 500 which was paid in August 2019. All the identifiable assets and liabilities of Robin Ltd were recorded at amounts equal to fair values except for inventory for which the fair value was $3 000 greater than carrying amount. Only 10% of the inventory on hand at 1 July 2019 remained unsold by 30 June 2020. The tax rate is 30%.

During the 2019–20 period, the following transactions occurred.

(a) Batman Ltd sold inventory to Robin Ltd for $90 000 at a profit before tax of $18 000. At 30 June 2020, inventory which was sold to Robin Ltd for $37 500 at a profit before tax of $7 500 was still on hand in the records of Robin Ltd.

(b) On 1 January 2020, Batman Ltd sold machinery to Robin Ltd at a gain of $15 000. The machinery was considered to have a further 5-year life.

(c) During the period Robin Ltd rented a warehouse from Batman Ltd, paying $3 750 in rent to Batman Ltd.

(d) During the period Batman Ltd recorded gains from revaluation of land, which is measured using the fair value method. These gains increased the asset revaluation surplus by $6 000 to give a balance of $42 000 at 30 June 2020.

(e) In June 2020, an impairment test was conducted on Robin Ltd and resulted in the recognition of impairment losses on goodwill of $24 000 (recognised in other expenses)

The following financial information was provided by the companies at 30 June 2020:

Required:

A.   Prepare the acquisition analysis and journals at 1 July 2019.

Placid Lake Corporation acquired 70 percent of the outstanding voting stock of Scenic, Inc., on January 1, 2020, when Scenic had a net book value of $410,000. Any excess fair value was assigned to intangible assets and amortized at a rate of $4,000 per year.

Placid Lake's 2021 net income before consideration of its relationship with Scenic (and before adjustments for intra-entity sales) was $310,000. Scenic reported net income of $120,000. Placid Lake declared $110,000 in dividends during this period; Scenic paid $41,000. At the end of 2021, selected figures from the two companies' balance sheets were as follows:

During 2020, intra-entity sales of $80,000 (original cost of $44,000) were made. Only 10 percent of this inventory was still held within the consolidated entity at the end of 2020. In 2021, $100,000 in intra-entity sales were made with an original cost of $60,000. Of this merchandise, 20 percent had not been resold to outside parties by the end of the year.

Each of the following questions should be considered as an independent situation for the year 2021.

1. What is consolidated net income for Placid Lake and its subsidiary?

2. If the intra-entity sales were upstream, how would consolidated net income be allocated to the controlling and noncontrolling interest?

3. If the intra-entity sales were downstream, how would consolidated net income be allocated to the controlling and noncontrolling interest?

4. What is the consolidated balance in the ending Inventory account?

5. Assume that no intra-entity inventory sales occurred between Placid Lake and Scenic. Instead, in 2020, Scenic sold land costing $31,000 to Placid Lake for $52,000. On the 2021 consolidated balance sheet, what value should be reported for land?

1. f-1. Assume that no intra-entity inventory or land sales occurred between Placid Lake and Scenic. Instead, on January 1, 2020, Scenic sold equipment (that originally cost $110,000 but had a $61,000 book value on that date) to Placid Lake for $82,000. At the time of sale, the equipment had a remaining useful life of five years. What worksheet entries are made for a December 31, 2021, consolidation of these two companies to eliminate the impact of the intra-entity transfer?

2. f-2. Assume that no intra-entity inventory or land sales occurred between Placid Lake and Scenic. Instead, on January 1, 2020, Scenic sold equipment (that originally cost $110,000 but had a $61,000 book value on that date) to Placid Lake for $82,000. At the time of sale, the equipment had a remaining useful life of five years. For 2021, what is the noncontrolling interest’s share of Scenic’s net income?

Billy's Builders just obtained a contract for $500,000 to build a home for Mr. & Mrs. Mary. Jones estimates his total cost on the job to be $400,000. During the first month of the job, the following transactions occur: • Cash of $10,000 is paid for permits, fees and other startup costs. • An invoice is received from the excavation subcontractor for $10,000. • The first progress billing is prepared for $60,000.

If the above transactions were the only ones Billy's Builders had for the month, what will the revenue, expense, and profit look like under each accounting method

Amazon can generate extra revenue from other businesses by offering its excess capacity to those who need it. Like most companies, Amazon uses only a small portion of its total computing capacity at any time. Its infrastructure is considered by many to be among the most robust in the world.

Write a 1-2 page analysis using the referencing the following criteria:

Think of an idea for a startup business. Explain how this business could utilize Amazon’s Web Services (AWS).

How do the concepts of capacity planning and scalability apply to this case? Apply these concepts both to Amazon and to customers of your business.

Based on the situations below, explain the type of offence, the provision of the
offence under Income Tax Act 1967, and penalty (fine/imprisonment) faced by the
taxpayers:(Malaysia tax)

Fatt, a graduate of Lim Kok Wing University, founded a startup business in
Selangor after he graduated. He has been earning a steady income from his
business venture in 2019. However, he did not declare any of his income to the
Inland Revenue Board of Malaysia by filing Income Tax Return Form, as he was
afraid of not getting any government assistance thereafter as his income exceeds
the limit stipulated.

The table below shows the one-year return distribution of Startup Inc.

a. Calculate the expected return.

b. Calculate the standard deviation of the return.

c. Replace the expected return of 1000% in the last column in the table above with the expected return value that minimizes the standard deviation of the returns.

a. The expected return is %. (round to one decimal)

b. The standard deviation of the return is %. (round to one decimal)

c. The value of expected return in last column which minimizes the standard deviation of the returns is %. (round to one decimal. If negative, enter a minus sign "-".)