Use the following information to answer questions 53-55.

During 2018, Amazing Corp. reported after-tax net income of $900,000 and paid $175,000 in common dividends. The weighted average number of common shares issued in 2018 was 200,000. There are no preferred shares issued. At year end, Amazing's common shares are selling for $81 per share on the Toronto Stock Exchange.

Amazing's basic earnings per share for 2018 is

Question 53 options:

Amazing's price-earnings ratio is

Question 54 options:

Amazing's payout ratio for 2018 is

Question 55 options:

1. On August 16, 2016, Cory Corp. acquires a new piece of equipment for $80,000. Bryant depreciates equipment over ten years, assumes the residual value to be 5% of the purchase price, and uses a half-year convention in the year of acquisition. Record the journal entries for depreciation for 2017 and 2018.

2. Related to the above Question 17, if Bryant Corp. sells the equipment late in December 2018, for $70,000, what is the gain or loss on the sale?

Dalia Wahebi sells one type of machine, a mini-blender. She provides the following information for May 2018.

Dalia held 2 mini-blenders in inventory at 1 May 2018. They cost $1,200 each

Dalia wants to know the value of closing inventory and also her Gross Profit for the month of May 2018.

REQUIRED

(a)    Calculate the value of the closing inventory using FIFO and AVCO.

(b)   Calculate the Gross Profit for the month of May 2018.

On June 30, 2018, Singleton Computers issued 5% stated rate bonds with a face amount of $320 million. The bonds mature on June 30, 2033 (15 years). The market rate of interest for similar bond issues was 4% (2.0% semiannual rate). Interest is paid semiannually (2.5%) on June 30 and December 31, beginning on December 31, 2018. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1. Determine the price of the bonds on June 30, 2018. 2. Calculate the interest expense Singleton reports in 2018 for these bonds using the effective interest method.

On January 1, 2013, Ameen Company purchased a building for $42 million. Ameen uses straight-line depreciation for financial statement reporting and MACRS for income tax reporting. At December 31, 2017, the book value of the building was $36 million and its tax basis was $26 million. At December 31, 2018, the book value of the building was $34 million and its tax basis was $19 million. There were no other temporary differences and no permanent differences. Pretax accounting income for 2018 was $50 million.

Required:
1. Prepare the appropriate journal entry to record Ameen’s 2018 income taxes. Assume an income tax rate of 40%.
2. What is Ameen’s 2018 net income?

The city of Brock’s Water Enterprise Fund leases water treatment equipment. The life of the noncancel-lable lease is 10 years, and the expected life of the equipment is 12 years. Using an 8 percent interest rate, the present value of the lease payments is $905,861. The first payment of $125,000 is due when the lease begins, January 5, 2018. An additional payment is due on January 5th for each of the next 9 years. Prepare journal entries to record:

1. The lease of the equipment on January 5, 2018.

2. The first lease payment on January 5, 2018.

3. Amortization expense for fiscal year ending December 31, 2018

4. The second lease payment on January 5, 2019

Choco Company had the following capital structure at January 1, 2018:

Outstanding

Ordinary shares, 600,000 shares $7,200,000

10% stated interest rate convertible bonds issued at par;

each $1,000 bond is convertible into 80 ordinary shares $5,000,000

During 2018, Choco had the following share transactions:

May 1 Issued 50,000 ordinary shares for $30 per share.

Sep. 1 Redeemed 100,000 ordinary shares at $35 per share.

Nov. 1 Converted $2,000,000 of bonds. Net income for 2018 was $1,900,000.

The income tax rate was 32%.

Required: Compute the basic and diluted earnings per share for Choco for 2018 (Round to 2 decimal places).

On December 31, 2017, Berclair Inc. had 400 million shares of common stock and 6 million shares of 9%, $100 par value cumulative preferred stock issued and outstanding. On March 1, 2018, Berclair purchased 30 million shares of its common stock as treasury stock. Berclair issued a 5% common stock dividend on July 1, 2018. Five million treasury shares were sold on October 1. Net income for the year ended December 31, 2018, was $650 million.

Required:

Compute Berclair's earnings per share for the year ended December 31, 2018. (Enter your answers in millions (i.e., 10,000,000 should be entered as 10).)

On June 30, 2018, the Esquire Company sold some merchandise to a customer for $56,000. In payment, Esquire agreed to accept a 8% note requiring the payment of interest and principal on March 31, 2019. The 8% rate is appropriate in this situation.
  
Required:
1. Prepare journal entries to record the sale of merchandise (omit any entry that might be required for the cost of the goods sold), the December 31, 2018 interest accrual, and the March 31, 2019 collection.

Prepare journal entries to record the sale of merchandise (omit any entry that might be required for the cost of the goods sold), the December 31, 2018 interest accrual, and the March 31, 2019 collection. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Record the sale of merchandise.

Record the interest accrual.

Record the cash collection.
2. If the December 31 adjusting entry for the interest accrual is not prepared, by how much will income before income taxes be over-or understated in 2018 and 2019?

If the December 31 adjusting entry for the interest accrual is not prepared, by how much will income before income taxes be over-or understated in 2018 and 2019?

Axel Heckman is the engagement partner for the financial report audit of Sturfolks Equipment Ltd for the year ended 30 June 2018. The following material events or transactions have come to Axel’s attention beforeheisscheduledto issuehisreporton31August 2018:
(a) On 14 July 2018, Sturfolks Equipment settled and paid a personal injury claim of a former employee as a result of an accident that occurred in March 2017. The company has not previously recorded a liabilityfortheclaim. (b)On 17 July 2018, Sturfolks Equipment agreed to purchase for cash the outstanding shares of Recreational Equipment Ltd. This acquisition is likely to double the sales volume of Sturfolks Equipment. (c)On 20 July 2018, the directors became aware of broken glass found in their pre-packaged sandpits. This product had only been on sale for two weeks and had been purchased directly from the manufacturer, NSWPIT Ltd, an unrelated company in Thailand, one week prior to being introduced to the public.
Tutorial Question 3
(d) On 3 August 2018, a plant owned by Sturfolks Equipment was damaged in a flood, resulting in an uninsuredlossofinventory.
Required: For each of the above events or transactions, identify audit procedures that should have brought the item to the auditor’s attention, and determinethe treatmentrequiredinthe financial report fortheyearended30June2018.