Entity A is a listed company that operates the cruise ship business. One of the cruise ships was purchased on 1 Oct 2011. This cruise ship is made up of three main components: (1) cruise’s fabric, (2) cabins and entertainment area and (3) fittings propulsion system.

Details of the cost of its components and their estimated useful lives are as below:

Components Original cost Depreciation basis

(1) Cruise’s fabric (hull, decks, etc.) HK$37,500,000 50 years straight-line

(2) Cabins and entertainment area fittings HK$18,750,000 15 years straight-line

(3) Propulsion system HK$12,500,000 useful life of 80,000 hours

On 30 Sep 2019, no further capital expenditure had been incurred on the cruise ship.

In the year ended 30 Sep 2019, the cruise had experienced a high level of engine trouble, which had cost Entity A considerable revenue loss and compensation costs.  The measured expired life of the propulsion system on 30 Sep 2019 was 50,000 hours. Due to the unreliability of the engines, a decision was made by Entity A on 1 Oct 2019 to replace the whole of the propulsion system at a cost of HK$17,500,000. The old propulsion system was also sold to a second-hand machinery shop with a loss on disposal of $4,250,000. The cash from the disposal was received on 20 Oct 2019.  The expected life of the new propulsion system was 160,000 hours and in the year ended 30 Sep 2020, the cruise had used its engines for 10,000 hours.

At the same time as the propulsion system replacement, Entity A took this opportunity to upgrade the cabin and entertainment facilities at a cost of HK$7,500,000 and repaint the cruise’s fabric at a cost of HK$2,500,000 respectively. After the upgrade of the cabin and entertainment area fittings, it was estimated that their remaining useful life was 10 years.

For calculating depreciation, all the works on the cruise can be assumed to have been completed on 1 Oct 2019. All residual values can be taken as NIL.

REQUIRED:

(1) Measure the depreciation expense of the Cruise’s Fabric for the year ended 30 Sep 2020.

Answer = $

(2) Measure the depreciation expense of the Cabins and entertainment area fittings for the year ended 30 Sep 2020.

Answer = $

(3) Measure the depreciation expense of the Propulsion system for the year ended 30 Sep 2020.

Answer = $

(4) Measure the carrying amount of the Cruise’s Fabric on 30 Sep 2020.

Answer = $

(5) Measure the carrying amount of the Cabins and entertainment area fittings on 30 Sep 2020.

Answer = $

(6) Measure the carrying amount of the Propulsion system on 30 Sep 2020.

Answer = $

(7) Measure the carrying amount of Entity A’s cruise ship on 30 Sep 2020.

Answer = $

(8) Measure the cash received from the sale of the old propulsion system.

Answer = $

Gonzalez Company acquired $158,400 of Walker Co., 6% bonds on May 1 at their face amount. Interest is paid semiannually on May 1 and November 1. On November 1, Gonzalez Company sold $47,400 of the bonds for 95.

Journalize entries to record the following in Year 1 (refer to the Chart of Accounts for exact wording of account titles):

To clarify, GSIS is a social insurance institution that provides a defined benefit scheme under the law. It insures its members against the occurrence of certain contingencies in exchange for their monthly premium contributions.

What would you have done if you were the CEO of Target in 2013, the Director of the Federal Government’s Office of Personnel Management (OPM) in 2015, or the CEO of Equifax in 2017 at the time that their respective data security breaches were discovered (note what all these breaches have in common)? Is it OK for a victimized organization or government agency to “hack back”? What are the dangers?

Answer discussion style.

Pepper Company acquired 80 percent of Salt Company's stock at underlying book value on January 1, 2018. Pepper Company acquired 80 percent of Salt Company's stock at underlying book value on January 1, 2018. At that date, Salt reported common stock outstanding of $1,050,000 and retained earnings of $840,000; the fair value of the noncontrolling interest was equal to 20 percent of the book value of Salt Company. Salt Co. sold equipment to Pepper Co. for a $720,000 on December 31, 2018. Salt Co. had originally purchased the equipment for $800,000 on January 1, 2015, with a useful life of 10 years and no salvage value. At the time of the purchase, Pepper Co. estimated that the equipment still had the same remaining useful life. Both companies use straight-line depreciation.
Pepper sold land costing $132,000 to Salt Company on June 28, 2019, for $178,000.

Textbook: Custom edition of Advanced Financial Accounting,12th Edition, Christensen, Cottrell and Budd; Mc-Graw Hill.

Required:

1. Prepare Pepper’s journal entries related to intercompany sale for 2019 to account for the investment in Salt.
2. Prepare the consolidation entries that related to intercompany sale of land for 2019.
3. Prepare the consolidation entries that related to intercompany sale of equipment for 2019.
4. Assume S reported net income of $35,000 and dividends of $7,000 for each year of 2018 and 2019. Calculate Pepper’s investment account on December 31, 2019.

Part 2 - Scenario:

You are the manager of a hospital’s ER unit. Your CEO has heard that people have been criticizing the hospital’s wait time for ER services. Your CEO has asked you to present information on wait times at the ER to the hospital board of trustees and administrators. You requested data from your IT team on the wait times for recent ER visits (that is the data included in the excel sheet). Following the question prompts below, answer each of these questions to prepare a report that communicates your finding to your CEO, interprets the findings, and discussed the implications of the findings.

• Purpose: Identify the purpose of the analysis in this section. What questions do you hope to answer?
• Importance: State and explain the importance of this analysis to the department/organization. How will the findings be used?
• Methodology: State the statistical method used in this section.
• Findings: Copy and Paste all relevant output from Excel into this section (decide which output you think is relevant to include such as tables and charts). State your major findings from the included tables/charts.
• Interpretations/Implications: Discuss what the department/organization needs to do based on the findings.

8) On April 1, the Prakash Corporation issued 20,000 shares of $2 par value common stock at $23 per share. Please write the journal entry:




9) On April 10, a company acquired land in exchange for 1,000 shares of $20 par common stock with a current fair-market price of $66 per share. Please write the journal entry:

21 Equipment acquired on October 1, 2017, at a cost of $600,000 has an estimated useful life of 8 years. The residual value is estimated to be $80,000 at the end of the equipment's useful life. The company has a December 31 year end.

Instructions

Calculate the depreciation expense for December 31, 2017 and 2018 using:

         (a)           the straight-line method.

         (b)          the double diminishing-balance method.

A lift accelerates upwards from rest to a speed of 5.5 m s−1 in a certain time, ∆t. At that time, the ratio of its kinetic energy to the gravitational potential energy it has acquired is 0.33. What is the value of the time interval, ∆t?