Juan acquires a new 5-year class asset on March 14, 2020, for $200,000. This is the only asset Juan acquired during the year. He does not elect immediate expensing under § 179. He does not claim any available additional first-year depreciation. On July 15, 2021, Juan sells the asset.

Click here to access depreciation table to use for this problem.

a. Determine Juan's cost recovery for 2020.
$

b. Determine Juan's cost recovery for 2021.
$

On August 2, 2020, Wendy purchased a new office building for $3,800,000. On October 1, 2020, she began to rent out office space in the building. On July 15, 2024, Wendy sold the office building.

If required, round your answers to the nearest dollar.

Click here to access the depreciation table to use for this problem.

a. What MACRS convention applies to the new office building?
Half-year

b. What is the life of the asset for MACRS?
15 years

c. Determine Wendy's cost recovery deduction for 2020 and 2024.
2020: $
2024: $

On January 1, 2020, Carla Company issued 10-year, $1,980,000 face value, 6% bonds, at par. Each $1,000 bond is convertible into 15 shares of Carla common stock. Carla’s net income in 2020 was $479,400, and its tax rate was 20%. The company had 102,000 shares of common stock outstanding throughout 2020. None of the bonds were converted in 2020.

(a) Compute diluted earnings per share for 2020. (Round answer to 2 decimal places, e.g. $2.55.)

(b) Compute diluted earnings per share for 2020, assuming the same facts as above, except that $1,020,000 of 6% convertible preferred stock was issued instead of the bonds. Each $100 preferred share is convertible into 5 shares of Carla common stock. (Round answer to 2 decimal places, e.g. $2.55.)

On June 30, 2017, Sharper Corporation’s common stock is priced at $26.00 per share before any stock dividend or split, and the stockholders’ equity section of its balance sheet appears as follows.

1. Assume that the company declares and immediately distributes a 100% stock dividend. This event is recorded by capitalizing retained earnings equal to the stock’s par value. Answer these questions about stockholders’ equity as it exists after issuing the new shares.

Assume that the company declares and immediately distributes a 100% stock dividend. This event is recorded by capitalizing retained earnings equal to the stock’s par value. Answer these questions about stockholders’ equity as it exists after issuing the new shares. Complete the below table to calculate the retained earnings balance, total stockholders’ equity and number of outstanding shares.

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Assume that the company implements a 2-for-1 stock split instead of the stock dividend in required 1. Answer these questions about stockholders’ equity as it exists after issuing the new shares. Complete the below table to calculate the retained earnings balance, total stockholders’ equity and number of outstanding shares.

On January 20, 2020, Tony North, the accountant for Public Enterprises, is feeling pressure to complete the annual financial statements. The company president has said he needs up-to-date financial statements to share with the bank on January 21 at a dinner meeting that has been called to discuss the company obtaining loan financing for a special building project. Tony knows that he will not be able to gather all the needed information in the next 24 hours to prepare the entire set of adjusting entries. Those entries must be posted before the financial statements accurately portray the company's performance and financial position for the fiscal period ended December 31, 2019. Tony ultimately decides to estimate several expense accruals at the last minute. When deciding on estimates for the expenses, he uses low estimates because he does not want to make the financial statements look worse than they are. Tony finishes the financial statements before the deadline and gives them to the president without mentioning that several account balances are estimates that he provided.

Required:

If you were in Tony's situation, (1) what would you have done and (2) why would you had made that choice? Please justify your post with an explanation.

Income Tax Law - Residency Issue - Australia

Zane has advised you that his employer has discussed an opportunity with him where he could work in its Singapore office for two years, commencing on 1 July 2019. Although Zane is interested in this opportunity to live and work overseas, he is concerned about the Australian Taxation Office (ATO) forming the view that he would retain his Australian residency during this time. In addition, Zane is a cricket enthusiast and his employer has agreed to him taking annual leave from 1 October and 30 November 2020 to return to Australia and attend the ‘World T20’ cricket tournament (held from 18 October to 15 November). Zane anticipates that he will spend the time before and after this event visiting relatives and travelling within Australia. Zane is confident that you will be able to provide him with some clear advice on this issue. He has indicated that he would only be interested in working in Singapore if the ATO considered him to be a non-resident during the two years he would be absent from Australia. You are required to write a letter to Zane outlining the law on this residency issue and how the law would apply to him under the scenario in contemplation (the potential move from Australia to Singapore for work for the period 1/7/2019 to 30/6/2021). Your letter to Zane should refer to relevant sources of law (and any relevant ATO advice). Your letter should also refer to the implications of being a resident or a non-resident during the two years. Zane has some doubts about the implications of the visit to Australia in October and November 2020 in terms of residency. He has asked you for advice on this specific issue and stated that he may consider staying in Singapore if the trip to Australia is likely to increase the chances of him being an Australian resident. As well as providing advice, your letter should set out any additional questions for Zane that are relevant to the residency issue. Finally, your letter should refer to the steps you will take to ensure certainty for Zane as to the ATO view on the residency issue.

Tree Top Company is considering raising additional capital for further expansion. The company wants to finance a new business venture into guided trips down the Amazon River in South America.​ Additionally, the company wants to add another building on their land to offer more services for local customers.

Tree TopCompany plans to raise the capital by issuing $1,400,000 of 7​%,seven​-year bonds on January​ 2, 2020. The bonds pay interest semiannually on June 30 and December 31. The company receives $1,398,320 when the bonds are issued. The company also issues a mortgage payable for $400,000 on January​ 2, 2020. The proceeds from the mortgage will be used to construct the new building. The mortgage requires annual payments of $20,000 plus interest for twentyyears, payable on December 31. The mortgage interest rate is 8​%.

Requirement 1. Will the bonds issue at face​ value, a​ premium, or a​ discount?

Tree Top​'sbonds will be issued at a discount because

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Requirement 2. Record the following transactions. Include dates and round to the nearest dollar. Omit explanations. ​(Round your answers to the nearest whole dollar. Record debits​ first, then credits. Exclude explanations from any journal​ entries.)

a. Cash received from the bond issue.

b. Cash received from the mortgage payable.

c. Semiannual bond interest payments for 2020.Amortize the premium or discount using the​ straight-line amortization method. Start by recording the semiannual bond interest payment on June​ 30,2020.

Now record the semiannual bond interest payment on December​ 31, 2020.

d. Payment on the mortgage payable for2020.

Requirement 3. Calculate the total interest expense incurred in 2020.

                          
       TFAC4001 Assessment 2020                  
Question 1                          
                          
Classic Dining Ltd. is considering opening a new restaurant in a rented facility.                          
It wishes to evaluate this investment over the five-year leasing period, on the assumption                           
that the equipment would be sold and the working capital recovered at the end of the 5th .                          
year                          
The following estimates in respect of the new restaurant have been prepared.                          
                          
                   €'000      
Premium on lease (capital expenditure)                    600      
Equipment and furnishing investment                   850      
Estimated disposal value of equipment at end of year 5                   100      
                          
Weighted average cost of capital                   11%      
                          
Estimates / Year           Year 1   Year 2   Year 3   Year 4   Year 5
                          
Numbers of customers           32,000   36,000   40,000   42,000   45,000
                          
Average revenue per customer           € 75   € 75   € 78   € 80   € 82
                          
Food & bev. costs per customer           € 23   € 24   € 25   € 26   € 27
Variable wages cost per cust.           € 19   € 20   € 21   € 22   € 23
                          
Fixed Costs           €'000   €'000   €'000   €'000   €'000
Annual rent (lease) of premises           425   425   425   425   425
Marketing and admin. expenses           225   200   180   180   180
Depreciation of equipment           150   150   150   150   150
Salaries           150   160   170   180   200
Apport. head office overheads           75   75   80   85   100
           1,025   1,010   1,005   1,020   1,055
                          
Profits lost in other restaur. €000           60   70   80   90   100
Working capital as % of turnover           4%   4%   4%   4%   4%
                          
Required:                          
                          
(a)   Evaluate the above project using the following methods:                      
                          
       Net present value                  
       Internal rate of return                  
       Nominal payback period                  
                          
(b)   Comment on the proposed investment                       (5.33 marks)
                           (33.33 marks)

persuade to wear a mask in 2020

                          
       TFAC4001 Assessment 2020                  
Question 1                          
                          
Classic Dining Ltd. is considering opening a new restaurant in a rented facility.                          
It wishes to evaluate this investment over the five-year leasing period, on the assumption                           
that the equipment would be sold and the working capital recovered at the end of the 5th .                          
year                          
The following estimates in respect of the new restaurant have been prepared.                          
                          
                   €'000      
Premium on lease (capital expenditure)                    600      
Equipment and furnishing investment                   850      
Estimated disposal value of equipment at end of year 5                   100      
                          
Weighted average cost of capital                   11%      
                          
Estimates / Year           Year 1   Year 2   Year 3   Year 4   Year 5
                          
Numbers of customers           32,000   36,000   40,000   42,000   45,000
                          
Average revenue per customer           € 75   € 75   € 78   € 80   € 82
                          
Food & bev. costs per customer           € 23   € 24   € 25   € 26   € 27
Variable wages cost per cust.           € 19   € 20   € 21   € 22   € 23
                          
Fixed Costs           €'000   €'000   €'000   €'000   €'000
Annual rent (lease) of premises           425   425   425   425   425
Marketing and admin. expenses           225   200   180   180   180
Depreciation of equipment           150   150   150   150   150
Salaries           150   160   170   180   200
Apport. head office overheads           75   75   80   85   100
           1,025   1,010   1,005   1,020   1,055
                          
Profits lost in other restaur. €000           60   70   80   90   100
Working capital as % of turnover           4%   4%   4%   4%   4%
                          
Required:                          
                          
(a)   Evaluate the above project using the following methods:                      
                          
       Net present value                  
       Internal rate of return                  
       Nominal payback period                  
                          
(b)   Comment on the proposed investment                       (5.33 marks)
                           (33.33 marks)