The pretax financial income of Sweet Company differs from its taxable income throughout each of 4 years as follows.

Pretax financial income for each year includes a nondeductible expense of $32,900 (never deductible for tax purposes). The remainder of the difference between pretax financial income and taxable income in each period is due to one depreciation temporary difference. No deferred income taxes existed at the beginning of 2020.

Part 1

Prepare journal entries to record income taxes in all 4 years. Assume that the change in the tax rate to 20% was not enacted until the beginning of 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Noelle Inc. issued a $1.3 million bond at 9% for 3 years to finance a project. The bonds were issued on January 1, 2018. The bond pays interest semi annually on July 1 and January 1. The market rate is 8%. The company used effective interest method. Year end is September 30. Required: a) Calculate the proceeds (price) that Noelle Inc. would receive for the bond on January 1, 2018. The PV tables can be used. Show calculations b) Prepare a bond amortization schedule using the effective interest method. c) Prepare the journal entries to record the initial sale of the bond on January 1, 2018, the interest payment on July 1, 2018, the accrual on September 30, 2018 and the interest payment on January 1, 2019. d) Assume that on May 1, 2020, Noelle Inc. decides to retire 30% of the bonds for a cash price of 102 plus accrued interest. 1. Prepare the journal entry to pay out the interest to the bondholders on May 1, 2020 due to the bond retirement 2. Prepare the journal entry for the bond retirement on May 1, 2020

Blossom Company uses special strapping equipment in its packaging business. The equipment was purchased in January 2019 for $6,000,000 and had an estimated useful life of 8 years with no salvage value. At December 31, 2020, new technology was introduced that would accelerate the obsolescence of Blossom's equipment. Blossom's controller estimates that expected future net cash flows on the equipment will be $3,750,000 and that the fair value of the equipment is $3,300,000. Blossom intends to continue using the equipment, but it is estimated that the remaining useful life is 4 years. Blossom uses straight-line depreciation.

(a) What is the carrying value of the equipment at December 31, 2020?

(b) Prepare the journal entry (if any) to record the impairment at December 31, 2020.

(c) Prepare any journal entries for the equipment at December 31, 2021. The fair value of the equipment at December 31, 2021, is estimated to be $3,450,000.

(d) Repeat the requirements for (a) and (b), assuming that Blossom intends to dispose of the equipment and that it has not been disposed of as of December 31, 2021.

*I keep getting these sorts of problems wrong on my practice quiz so if you could break down how you're finding the solution I would greatly appreciate it!

Brady Construction Company contracted to build an apartment complex for a price of $5,200,000. Construction began in 2018 and was completed in 2020. The following is a series of independent situations, numbered 1 through 6, involving differing costs for the project. All costs are stated in thousands of dollars.

Brady Construction Company contracted to build an apartment complex for a price of $6,000,000. Construction began in 2018 and was completed in 2020. The following is a series of independent situations, numbered 1 through 6, involving differing costs for the project. All costs are stated in thousands of dollars.

Required:
Complete the following table. (Do not round intermediate calculations. Enter answers in dollars. Round your final answers to the nearest whole dollar. Negative amounts should be indicated by a minus sign.)

Complete the following table.

                                Gross Profit (Loss) Recognized

                   Revenue Recognized Over Time             Revenue Recognized Upon Completion

Situation       2016       2017       2018                             2016       2017     2018       

1.

2.

3.

4.

5.

6.

Ace Company manufactures equipment. Ace’s products range from simple automated machinery to complex systems containing numerous components. Unit selling prices range from $130,000 to $1,100,000 and are quoted inclusive of installation. The installation process does NOT involve changes to the features of the equipment to perform specifications. Ace has the following relationship with Rose Inc.

• Rose can purchase equipment from Ace for a price of $500,000 and contracts with Ace to install the equipment. Using market data, Rose determines installation service is estimated to have a fair value of $50,000. The cost of the equipment is $200,000.
• Rose is obligated to pay Ace the $500,000 upon delivery and installation of the equipment.

Ace delivers the equipment on August 1, 2020, and completes the installation of the equipment on October 1, 2020. The equipment has a useful life of 7 years. Assume the equipment and the installations are two distinct performance obligations that should be accounted for separately.

Instructions

a)    How should the transaction price of $500,000 be allocated among the service obligations?

b)    Prepare the journal entries for Ace for this revenue arrangement for 2020, assuming Ace receives payment when installation is completed.

True or false: If false explain.

1. The Jordan company applies manufactory overhead based on direct labor hours. Current and budgeted information related to direct labor and overhead for 2020 are listed below for indirect manufacturing costs.
Budget: Direct labor hours 300,000 Manufactory overhead 360,000

Actual results: DL 380,000 Manufactory Overhead 350,000

So, the cost are underapplied for $20,000. Answer: ???

2. Audi Company's indirect manufacturing costs were over applied by 27,000 in 2020. In that year, a total manufactory overhead of 508,000 had been budgeted and manufactury overhead of 496,000 was applied. The overhead that was currently incurred in 2020 is 469,000. Answer: ???

3. The process of allocating costs to a particular production, order, or service to a customer is known as job costing. Answer: ???

4. The debit from the manufacturing overhead account will reflect Actual costs of direct labor accounts and indirect manufacturing costs. Answer:???

5. Assuming that the normal costing system is used and is based on direct labor, the application rate for indirect manufacturing costs could be calculated by dividing: Budgeted manufacturing overhead between current direct labor hours. Answer: ???

1. Ameer Co. uses the gross method to record sales made on credit. On April 1, 2020, it made sales of $150,000 with terms 3/15 n/45. On April 9, 2020, Ameer Co. received full payment for the April 1 sale.

1. Prepare the required journal entries for Ameer Co. (gross method)
2. Prepare the journal entries showing what the Net Method would look like

2. Same info as above but change the date that payment was received to April 30, 2020

1. Prepare the required journal entries forAmeerCo. (gross method)
2. Prepare the journal entries showing what the Net Method would look like

3. In your own words explain the difference between direct write-off method and allowance method for recognizing bad debt expense

4. The trial balance before adjustment of Reservoir Company reports the following balances:

                                                                                        Dr.                   Cr.    

Accounts receivable                                                $600,000

Allowance for doubtful accounts                                                $       10,000

Instructions

1. Prepare the entry for estimated bad debts assuming that doubtful accounts are estimated to be 5% of accounts receivable.
2. Show the T-accounts and how you got the correct Bad Debt Expense

Brady Construction Company contracted to build an apartment complex for a price of $5,200,000. Construction began in 2018 and was completed in 2020. The following is a series of independent situations, numbered 1 through 6, involving differing costs for the project. All costs are stated in thousands of dollars.

Nealon Energy Corporation engages in the​ acquisition, exploration,​ development, and production of natural gas and oil in the continental United States. The company has grown rapidly over the last 5 years as it has expanded into horizontal drilling techniques for the development of the massive deposits of both gas and oil in shale formations. The​ company's operations in the Haynesville shale​ (located in northwest​ Louisiana) have been so significant that it needs to construct a natural gas gathering and processing center near Bossier​ City, Louisiana, at an estimated cost of ​$70 million.

To finance the new​ facility, Nealon has ​$20 million in profits that it will use to finance a portion of the expansion and plans to sell a bond issue to raise the remaining ​$50 million. The decision to use so much debt financing for the project was largely due to the argument by company CEO Douglas Nealon Sr. that debt financing is relatively cheap relative to common stock​ (which the firm has used in the​ past). Company CFO Doug Nealon Jr.​ (son of the company​ founder) did not object to the decision to use all debt but pondered the issue of what cost of capital to use for the expansion project. There was no doubt that the​ out-of-pocket cost of financing was equal to the new interest that must be paid on the debt.​ However, the CFO also knew that by using debt for this project the firm would eventually have to use equity in the future if it wanted to maintain the balance of debt and equity it had in its capital structure and not become overly dependent on borrowed funds.

The following balance​ sheet reflects the mix of capital sources that Nealon has used in the past. Although the percentages would vary over​ time, the firm tended to manage its capital structure back toward these proportions. The firm currently has one issue of bonds outstanding. The bonds have a par value of ​$

1,000 per​ bond, carry a coupon rate of 8 ​percent, have 16 years to​ maturity, and are selling for ​$1,035. ​Nealon's common stock has a current market price of $32​, and the firm paid a ​$2.00 dividend last year that is expected to increase at an annual rate of 7 percent for the foreseeable future.

Balance Sheet:

Source of Fincancing Target Capital Strucure Weights

Bonds 40%               

Common Stock 60%

a. What is the yield to maturity for​ Nealon's bonds under current market​ conditions?

b. What is the cost of new debt financing to Nealon based on current market prices after both taxes​ (you may use a marginal tax rate of 24 percent for your​ estimate) and flotation costs of ​$35 per bond have been​ considered?

Note​: Use N=16 for the number of years until the new bond matures.

c. What is the​ investor's required rate of return for​ Nealon's common​ stock? If Nealon were to sell new shares of common​ stock, it would incur a cost of ​$2.50 per share. What is your estimate of the cost of new equity financing raised from the sale of common​ stock?

d. Compute the weighted average cost of capital for​ Nealon's investment using the weights reflected in the actual financing mix​ (that is, ​$20 million in retained earnings and ​$50 million in​ bonds).

e. Compute the weighted average cost of capital for Nealon where the firm maintains its target capital structure by reducing its debt offering to

40 percent of the ​$70 million in new​ capital, or ​$28 ​million, using ​$20 million in retained earnings and raising ​$22 million through a new equity offering.

f. If you were the CFO for the​ company, would you prefer to use the calculation of the cost of capital in part d or e to evaluate the new​ project? Why?