Granite Enterprises acquired a patent from Southern Research Corporation on January 1, 2021, for $4.6 million. The patent will be used for five years, even though its legal life is 20 years. Rocky Corporation has made a commitment to purchase the patent from Granite for $110,000 at the end of five years. Compute Granite's patent amortization for 2021, assuming the straight-line method is used.

Multiple Choice

• $920,000.

• $460,000.

• $449,000.

• $898,000.

During its prior tax year, your client acquired from a third party a license granted by the federal government. The client tells you that he/she believes that the license has a useful life of 8 years and produces a report, prepared by another firm, supporting that useful life. You look at the report and do not believe that it is very convincing. Discuss how you would handle this situation keeping in mind any ethical and professional considerations. What are the penalty risks to your client and your own firm if you rely on this report?

trial balance please! thanks!

American Food Services, Inc., acquired a packaging machine from Barton and Barton Corporation. Barton and Barton completed construction of the machine on January 1, 2021. In payment for the $5.9 million machine, American Food Services issued a four-year installment note to be paid in four equal payments at the end of each year. The payments include interest at the rate of 11%. (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. Prepare the journal entry for American Food Services’ purchase of the machine on January 1, 2021.
2. Prepare an amortization schedule for the four-year term of the installment note.
3. Prepare the journal entry for the first installment payment on December 31, 2021.
4. Prepare the journal entry for the third installment payment on December 31, 2023.

Acquired $16,000 cash from the issue of common stock. Purchased inventory for $5,100 cash. Sold inventory costing $3,060 for $5,202 cash. Paid $850 for advertising expense. Required a. Record the general journal entries for the preceding transactions. b. Post each of the entries to T-accounts. c. Prepare a trial balance to prove the equality of debits and credits.

State if the given statements are true or false by writing your answers (T for ``true’’ and F for ``false’’) in the last column of the following table.

Waterways Corporation is preparing its budget for the coming year, 2020. The first step is to plan for the first quarter of that coming year. The company has gathered information from its managers in preparation of the budgeting process.

Waterways likes to keep 10% of the next month’s unit sales in ending inventory. All sales are on account. 85% of the Accounts Receivable are collected in the month of sale, and 15% of the Accounts Receivable are collected in the month after sale. Accounts receivable on December 31, 2019, totaled $181,800.

Direct Materials

Direct materials cost 80 cents per pound. Two pounds of direct materials are required to produce each unit.

Waterways likes to keep 5% of the materials needed for the next month in its ending inventory. Raw Materials on December 31, 2019, totaled 11,220 pounds. Payment for materials is made within 15 days. 50% is paid in the month of purchase, and 50% is paid in the month after purchase. Accounts Payable on December 31, 2019, totaled $102,605.

Other Information

The Cash balance on December 31, 2019, totaled $100,000, but management has decided it would like to maintain a cash balance of at least $700,000 beginning on January 31, 2020. Dividends are paid each month at the rate of $2.50 per share for 4,720 shares outstanding. The company has an open line of credit with Romney’s Bank. The terms of the agreement requires borrowing to be in $1,000 increments at 9% interest. Waterways borrows on the first day of the month and repays on the last day of the month. A $540,000 equipment purchase is planned for February.

uppose that The Elasticity of Imports in the USA in the short Run is 0.5 The Elasticity of Imports in Japan in the short Run is -0.3 The Elasticity of Imports in the USA in the long Run is 1.2 According to the Elasticities approach to the Current Account Balance, if the Exchange Rate goes from Yen=$1/100 to Yen=$1/50 ...

The Current Account Balance in the US will deteriorate in the short run and in the long run

The Current Account Balance in the US will deteriorate in the short run, and improve in the long run

The Current Account Balance in the US will improve in the short run and in the long run

The Current Account Balance in the US will deteriorate in the short run, and improve in the long run as long as the elasticity of imports in Japan is strictly more than -0.2

1. Cook Ltd owns all of the share capital of James Ltd. The income tax rate is 30%. The following transactions took place during the periods ended 30 June 2019 or 30 June 2020.

1. In January 2020, Cook Ltd sells inventories to James Ltd for $10 000 in cash. These inventories had previously cost Cook Ltd $7 000, and remain unsold by James Ltd at the end of the period.                                                             

2. In February 2020, Cook Ltd sells inventories to James Ltd for $15 000 in cash. These inventories had previously cost Cook Ltd $12 000, and are on-sold externally on 2 April 2020.                                                                          

3. In February 2020, James Ltd sells inventories to Cook Ltd for $22 000 in cash (original cost to James Ltd was $16 000) and one quarter (25%) are on-sold externally by 30 June 2020.                                                                   

4. In March 2020, Cook Ltd sold inventories for $10 000 to Zara Ltd, an external entity. These inventories were transferred from James Ltd on 1 June 2019. The inventories had originally cost James Ltd $8000, and were sold to Cook Ltd for $12 000.                                                                                                      

Required

In relation to the above intragroup transactions, prepare adjusting journal entries for the consolidation worksheet at 30 June 2020. Only the adjusting entries need be shown.

Presented below are two independent situations related to future taxable and deductible amounts resulting from temporary differences existing at December 31, 2020.

1. Pearl Co. has developed the following schedule of future taxable and deductible amounts.

2. Martinez Co. has the following schedule of future taxable and deductible amounts.

Both Pearl Co. and Martinez Co. have taxable income of $3,600 in 2020 and expect to have taxable income in all future years. The tax rates enacted as of the beginning of 2020 are 30% for 2020–2023 and 35% for years thereafter. All of the underlying temporary differences relate to noncurrent assets and liabilities.

1. Compute the net amount of deferred income taxes to be reported at the end of 2020, and indicate how it should be classified on the balance sheet for situation one.

2. Compute the net amount of deferred income taxes to be reported at the end of 2020, and indicate how it should be classified on the balance sheet for situation two.