Nash Company began operations on January 1, 2018, and uses the average-cost method of pricing inventory. Management is contemplating a change in inventory methods for 2021. The following information is available for the years 2018–2020. Net Income Computed Using Average-Cost Method FIFO Method LIFO Method

2018 $15,980 $19,140 $12,070

2019 18,090 21,090 14,040

2020 20,130 24,990 16,940

(a) Prepare the journal entry necessary to record a change from the average cost method to the FIFO method in 2021. Account Titles and Explanation Debit Credit Enter an account title Enter a debit amount Enter a credit amount Enter an account title Enter a debit amount Enter a credit amount

(b) Determine net income to be reported for 2018, 2019, and 2020, after giving effect to the change in accounting principle. Net Income 2018 $Enter a dollar amount 2019 $Enter a dollar amount 2020 $Enter a dollar amount

(c) Assume Nash Company used the LIFO method instead of the average cost method during the years 2018–2020. In 2021, Nash changed to the FIFO method. Prepare the journal entry necessary to record the change in principle.

Suppose Michigan State University's Collegiate Employment Institute found that starting salaries for recipients of bachelor's degrees in business was $50,032 in 2017. The results for a sample of 100 business majors receiving a bachelor's degree in 2018 showed a mean starting salary of $51,285 with a sample standard deviation of $5,200. Conduct a hypothesis test to determine whether the mean starting salary for business majors in 2018 is greater than the mean starting salary in 2017. Use

α = 0.01

as the level of significance.

State the null and alternative hypotheses. (Enter != for ≠ as needed.)

H₀:

H_a:

Find the value of the test statistic. (Round your answer to three decimal places.)

Find the p-value. (Round your answer to four decimal places.)

p-value =

State your conclusion.

Reject H₀. There is sufficient evidence to conclude that the mean starting salary for business majors has increased in 2018.Do not reject H₀. There is insufficient evidence to conclude that the mean starting salary for business majors has increased in 2018.     Do not reject H₀. There is sufficient evidence to conclude that the mean starting salary for business majors has increased in 2018.Reject H₀. There is insufficient evidence to conclude that the mean starting salary for business majors has increased in 2018.

The following facts relate to gift cards sold by Sunbru Coffee Company during 2018. Sunbru’s fiscal year ends on December 31.

(a.) In October 2018, sold $3,500 of gift cards, and redeemed $550 of those gift cards.

(b.) In November 2018, sold $4,500 of gift cards, and redeemed $1,450 of October gift cards and $750 of November gift cards.

(c.) In December 2018, sold $3,500 of gift cards, and redeemed $250 of October gift cards, $2,500 of November gift cards, and $450 of December gift cards.

(d.) Sunbru views a gift card to be “broken” (with a remote probability of redemption) two months after the end of the month in which it is sold. Thus, an unredeemed gift card sold at any time during July would be viewed as broken as of September 30.

Required:
1. Prepare all journal entries appropriate to be recorded only during the month of December 2018 relevant to gift card sales, gift card redemptions, and gift card breakage.
2. Determine the balance of the deferred revenue liability to be reported in the December 31, 2018, balance sheet. Prepare the relevant T-account information to support your answer.

The following information was disclosed during the audit of Elbert Inc.

Question: Prepare the journal entry to record income taxes for 2018.

Lacy Construction has a noncontributory, defined benefit pension plan. At December 31, 2018, Lacy received the following information:

5. The comparative balance sheet for 2018 and 2017 for Samuel Corporation as well as additional     

           information concerning transactions and events during 2018 are presented below:      

Samuel Corporation

Balance Sheet

December 31, 2018 and 2017

                                                                                                                   2018                   2017  

         Cash                                                                                              $ 35,900            $ 10,200

         Accounts receivable (net)                                                                 48,300                20,300

         Inventory                                                                                          35,000                42,000

         Long-term investments                                                                              0                15,000

         Property, plant & equipment                                                           236,500              150,000

         Accumulated depreciation                                                               (37,700)              (25,000)

                                                                                                               $318,000            $212,500

         Accounts payable                                                                          $ 19,000            $ 26,500

         Accrued liabilities                                                                             19,000                17,000

         Long-term notes payable                                                                  70,000                50,000

         Common stock                                                                                130,000                90,000

         Retained earnings                                                                             80,000                29,000

                                                                                                               $318,000            $212,500

        Additional data:

        (a) Net income for the year 2018, $90,000.

        (b) Depreciation on plant assets for the year, $12,700.

        (c) Sold the long-term investments for $33,000.

      (d) Paid dividends of $39,000.

        (e) Purchased machinery costing $26,500, paid cash.

        (f) Purchased machinery and gave a $60,000 long-term note payable.

      (g) Paid a $40,000 long-term note payable by issuing common stock.

        Required:

        Using the indirect method, prepare a statement of cash flows for 2018 for Samuel Corporation.

Problem 19-18 EPS; stock options; nonconvertible preferred; convertible bonds; shares sold [LO19-4, 19-5, 19-6, 19-7, 19-8, 19-9]

At January 1, 2018, Canaday Corporation had outstanding the following securities:

720 million common shares
45 million 8% cumulative preferred shares, $50 par
4% convertible bonds, $4,500 million face amount, convertible into 90 million common shares

The following additional information is available:

On September 1, 2018, Canaday sold 81 million additional shares of common stock.

Incentive stock options to purchase 40 million shares of common stock after July 1, 2017, at $14 per share were outstanding at the beginning and end of 2018. The average market price of Canaday’s common stock was $20 per share during 2018.

Canaday's net income for the year ended December 31, 2018, was $1,524 million. The effective income tax rate was 40%.

Required:
1. & 2. Calculate basic and the diluted earnings per common share for the year ended December 31, 2018. (Enter your answers in millions (i.e., 10,000,000 should be entered as 10).)

Determine taxable income in each of the following independent cases. In all cases, the company was very profitable in all years prior to 2017 and it had retained earnings of $1,000,000 at the end of 2017.

1. In 2018, Company A has taxable income of $60,000 prior to consideration of any net operating loss. In 2017, the Company incurred a net operating loss of $10,000. They did not elect to waive the carryback period. Determine 2018 taxable income.

2. In 2018, Company B has taxable income of $50,000 prior to consideration of any net operating loss. In 2017, the Company incurred a net operating loss of $20,000. They elected to waive the carryback period. Determine 2018 taxable income.

3. In 2019, Company C has taxable income of $35,000 prior to consideration of any net operating loss. In 2018, the Company incurred a net operating loss of $30,000. Determine 2019 taxable income.

4. In 2019, Company D has taxable income of $35,000 prior to consideration of any net operating loss. In 2017, the Company incurred a net operating loss of $5,000. They elected to waive the carryback period. In 2018, the Company incurred a net operating loss of $40,000. Determine 2019 taxable income.

Monsters Inc began operations on January 1, 2017. The company employs 15 monsters whose jobs are to scare little children. They are paid eight-hour days and are paid hourly. Each employee earns 15 paid vacation days and 10 paid sick days annually. Vacation days may be taken immediately. Sick days may be taken as soon as they are earned; unused sick days accumulate. Additional information is as follows:

Actual Hourly                      Vacation Days Used                      Sick Days Used

Wage Rate                            by Each Employee                         by Each Employee

2017   2018                           2017               2018                           2017               2018

$10     $11                             10                 15                             6                       8

Monsters Inc has chosen to accrue the cost of compensated absences at rates of pay in effect during the period when they are earned and to accrue sick pay when it is earned.

1. Prepare journal entry(ies) to record the transactions related to vacation entitlement during 2017 and 2018.
2. Prepare journal entry(ies) to record the transactions related to sick days during 2017 and 2018.
3. Calculate the amounts of any liability for vacation pay and sick days that should be reported on the balance sheet at December 31, 2017 and 2018.