Templar Inc. is currently preparing its financial statements for 2020 and is currently working on its cash flow statement. Templar's balance sheets for 2020 is as follows:

In addition, during 2020, Templar:

• had net income of $31,000.
• sold land with a book value of $7,000 for a gain of $3,000.
• paid dividends of $8,000.
• issued common stock with a fair value of $50,000 in exchange for a building.
• purchased some equipment, but had no other activity related to property, plant and equipment besides the land sale and building purchase noted above (and depreciation).

Below, prepare Templar's 2020 full statement of cash flows, including all section headers and subtotals. (Don't worry about precise formatting; for each line, just put the text for that line followed by any amount necessary.) Use the indirect method for the operating cash flows section.

Computing Partial Period Depreciation under Multiple Depreciation Methods

To demonstrate the computations involved in several methods of depreciating a fixed asset, the following information is provided.

Required

Compute the annual depreciation using each of the following methods assuming that the asset was purchased on August 1, 2020.

a. Straight-line depreciation: Compute the annual depreciation rate and amount for each year.

b. Units-of-production method using service hours as a measure of input: Compute the depreciation rate and amount for the first partial year assuming 4,500 service hours of actual operation.

c. Units-of-production method using units produced as a measure of output: Compute the depreciation rate and amount for the first partial year assuming 9,000 units of output.

d. Sum-of-the-years’-digits method: Compute the depreciation amount for each year.

e. Double-declining-balance method: Compute the depreciation amount for each year.

Cheyenne Company reports pretax financial income of $70,000 for 2020. The following items cause taxable income to be different than pretax financial income.

Cheyenne’s tax rate is 30% for all years, and the company expects to report taxable income in all future years. There are no deferred taxes at the beginning of 2020.

Compute taxable income and income taxes payable for 2020.

Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2020. (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.)

Prepare the income tax expense section of the income statement for 2020, beginning with the line “Income before income taxes.” (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Compute the effective income tax rate for 2020. (Round answer to 1 decimal places, e.g. 25.5%.)

On 1 July 2020 Tran’s Hardware Pty Ltd had an accounts receivable ledger balance of $75,000 debit and a credit balance in the allowance for doubtful debts ledger account of $15,000.

On 3 July Tran’s was contacted by Nails and Hammers Pty Ltd to notify that the business had been declared bankrupt and that they would not be able to pay the $5,500 owing to Tran’s Hardware from a previous credit sale made to them in June 2020.

The business received notification from Panda House Pty Ltd on 25 July 2020 that, $1,100 (GST inclusive) that had previously been written off as uncollectible in May 2020 would be paid in full in August 2020.

On 31 July 2020 Management reassessed the allowance for doubtful debts at year end and decided on a closing balance of $12,200 (GST exclusive) under the ageing of receivables approach.

Required:

1. Prepare journal entries for each of the above events. Narrations are not required.

b. The owners have approached you, the businesses accountant and asked if, for the financial year ending 30 June 2021, you would change to the direct write-off method for recording bad debts. How does changing the measurement of bad debts from the allowance method to the direct write-off method influence the usefulness of financial information? Ensure you reference the fundamental qualitative characteristics of information prescribed by the Conceptual Framework for Financial Reporting in your response.

On January 1, 2020, Coronado Company purchased at face value, a $1300, 9% bond that pays interest on January 1. Coronado Company has a calendar year end.
The entry for the receipt of interest on January 1, 2021 is

Outstanding stock of the Sheridan Corporation included 20800 shares of $5 par common stock and 5100 shares of 6%, $10 par noncumulative preferred stock. In 2019, Sheridan declared and paid dividends of $1900. In 2020, Sheridan declared and paid dividends of $6400. How much of the 2020 dividend was distributed to preferred shareholders?

Marigold, Inc. has 3100 shares of 4%, $50 par value, cumulative preferred stock and 62000 shares of $1 par value common stock outstanding at December 31, 2019. The board of directors declared and paid a $2700 dividend in 2019. In 2020, $18100 of dividends are declared and paid. What are the dividends received by the preferred and common shareholders in 2020?

Chenard, Jennings, and Blair share profits and losses is 2:3:5, respectively. The balance sheet is:

CHENARD, JENNINGS, AND BLAIR PARTNERSHIP
Balance Sheet
December 31, 2020
Assets      Liabilities and Owners' Equity
Cash   $ 37700      Liabilities   $141000
Noncash assets   283000      Chenard, Capital   59500
          Jennings, Capital   89400
           Blair, Capital   30800
Total  
$320700
    Total  
$320700

If the partnership is liquidated by selling the noncash assets for $384000, and creditors are paid in full, what is the total amount of cash that Chenard will receive in the distribution of cash to partners?

Raleigh Department Store uses the conventional retail method for the year ended December 31, 2019. Available information follows:

1. The inventory at January 1, 2019, had a retail value of $41,000 and a cost of $32,170 based on the conventional retail method.
2. Transactions during 2019 were as follows:

Sales to employees are recorded net of discounts.

3. The retail value of the December 31, 2020, inventory was $59,800, the cost-to-retail percentage for 2020 under the LIFO retail method was 74%, and the appropriate price index was 104% of the January 1, 2020, price level.
4. The retail value of the December 31, 2021, inventory was $47,080, the cost-to-retail percentage for 2021 under the LIFO retail method was 73%, and the appropriate price index was 107% of the January 1, 2020, price level.

1. Estimate ending inventory for 2019 using the conventional retail method. (Amounts to be deducted should be indicated with a minus sign.)

2. Estimate ending inventory for 2019 assuming Raleigh Department Store used the LIFO retail method. (Amounts to be deducted should be indicated with a minus sign.)

3. Assume Raleigh Department Store adopts the dollar-value LIFO retail method on January 1, 2020. Estimating ending inventory for 2020 and 2021.

Crane Company sells tablet PCs combined with Internet service, which permits the tablet to connect to the Internet anywhere and set up a Wi-Fi hot spot. It offers two bundles with the following terms.
(A):Prepare any journal entries to record the revenue arrangement for Crane Bundle A on January 2, 2020, and December 31, 2020.

(B) Prepare any journal entries to record the revenue arrangement for Crane Bundle B on July 1, 2020, and December 31, 2020.

(C)Repeat the requirements for part (a), assuming that Crane Company has no reliable data with which to estimate the standalone selling price for the Internet service.

5.            Black Corporation had a 1/1/20 balance in the Allowance for Doubtful Accounts of $21,000. The balance in Accounts Receivable was $420,000 at 1/1 and $504,000 at 12/31. At 12/31/20, Black estimates that 5% of accounts receivable will prove to be uncollectible. What should Black report as its Allowance for Doubtful Accounts at 12/31/20?

6.            David Company uses the gross method to record sales made on credit. On June 10, 2020, it sold goods worth $250,000 with terms 2/10, n/30 to Charles Inc. On June 19, 2020, David received payment for 1/2 of the amount due from Charles Inc. David’s fiscal year end is on June 30, 2020. What amount will be reported in the financial statements for the accounts receivable due from Charles Inc.?

7.            Becky had net sales (all on account) in 2020 of $8,000,000. At December 31, 2020, before adjusting entries, the balances in accounts receivable was a $1,000,000 debit. Becky estimates that 3% of its accounts receivable will prove to be uncollectible. What is the net amount expected to be collected of the receivables reported on the financial statements at December 31, 2020? (Net A/R)

8.            Wellington Corp. has outstanding accounts receivable totaling $1.27 million as of December 31. If the company estimates that 2% of its accounts receivable will be uncollectible, what will be the balance in the allowance for doubtful accounts after the year-end adjustment to record bad debt expense?

On January 1, 2020, Jordan Inc. purchased 30% of the outstanding common stock of Melody Corporation at a cost of $600,000. Melody Corporation had 800,000 shares of common stock outstanding. At the date of purchase, the book value of Melody’s net assets was $1,500,000. Book value and fair value of net assets were the same for all balance sheet items except for machinery and inventory. The fair value exceeded the book value by $200,000 for machinery and $50,000 for the Inventory.

The estimated useful life of machinery is 15 years and all inventory acquired was sold during 2020.   Both companies have a January through December fiscal year. Melody Corporation reported net income of $250,000 and paid cash dividend of $80,000 during 2020. Market value of Melody Corporation was $2.50 per share at December 31, 2020.

1- Prepare the entry to record the original investment in Mountain.

2-Compute the amount of goodwill (if any) on the acquisition.

3-Prepare the necessary entries (other than acquisition) for 2020.

4-Assume that on January 10, 2020 Jordan Inc. sold 50% of its investment in Melody Corporation for $290,000. Prepare the journal entry to record the sale of investment.

5-Assume that subsequent to selling 50% of the investment, Melody Corporation reported income of $300,000 and paid dividend of $100,000 for 2021. Market value of Melody Corporation’s common stock was $3 per share at December 31, 2021. Prepare the journal entries (if any) for Jordan Inc. for its investment in Melody Corporation for 2021.

In 2018, the Westgate Construction Company entered into a contract to construct a road for Santa Clara County for $10,000,000. The road was completed in 2020. Information related to the contract is as follows:

Westgate recognizes revenue over time according to percentage of completion.

rev: 09_15_2017_QC_CS-99734

4. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years assuming the following costs incurred and costs to complete information. (Do not round intermediate calculations and round your final answers to the nearest whole dollar amount. Loss amounts should be indicated with a minus sign.)