The following information is related to Skysong Company for 2020.

Skysong Company decided to discontinue its entire wholesale operations (considered a discontinued operation) and to retain its manufacturing operations. On September 15, Skysong sold the wholesale operations to Rogers Company. During 2020, there were 500,000 shares of common stock outstanding all year.

Prepare a multi step income statement:

Problem 6-1B Inventory ownership—perpetual LO1
On November 30, 2020, York + Robin Shoes (Y+R) performed the annual inventory count and determined the

year-end ending inventory value to be $49,222. It is now December 3, 2020, and you have been asked to double-
check the inventory listing. Y+R uses a perpetual inventory system. Note: Only relevant items are shown on

the inventory listing.

York + Robin Shoes
Inventory Listing
Year-Ended November 30, 2020

#
Inventory
Number Inventory Description Quantity (units) Unit Cost ($) Total Value ($)
1 A20 Men’s brown dress shoes 74 $50 $ 3,700
2 B30 Women’s black boots 50 30 1,500
. . . . . .
Total Inventory $49,222

CHAPTER 6 Inventory Costing and Valuation

456
The following situations have been brought to your attention:
a. On November 28, 2020, Y+R received a customer order for men’s sneakers (Item # D50) with a sale price
of $1,000 and cost of $600, FOB shipping. The order was shipped on November 30, 2020. Y+R did not
include this inventory.
b. On December 2, 2021, Y+R received a shipment of $1,500 women’s black boots (Item # B30). The inventory
was purchased November 22, 2020, FOB destination from Global Threads. This inventory was included in
Y+R’s inventory count and inventory listing.
c. Women’s sandals (Item # C40) were purchased and shipped from International Sole Co. on November 30,
2020 for $2,300, FOB shipping. The shipment arrived December 5, 2020 and the appropriate party paid for
the shipping charges of $230. Additional costs were $161 for import duties and $86 for insurance during
shipment.
d. On November 30, 2020, Y+R shipped women’s flip flops (Item #E60) to a customer for $2,520, FOB
destination. The inventory cost $1,800 and the customer received the goods on December 3, 2020. Y+R has
not included this inventory.
e. Y+R had been holding $3,700 of men’s brown dress shoes (Item #A20) on consignment for designer Blue
Co. as at November 30, 2020. This inventory was included in Y+R’s inventory count and inventory listing.
Required
1. In situations (a) to (e), determine whether each of the following should be included or excluded in
inventory as at November 30, 2020 and explain why. If the inventory should be included, determine
the inventory cost.

2. Determine the correct ending inventory value at November 30, 2020. Starting with the unadjusted inven-
tory value of $49,222, add or subtract any errors based on your analysis in Part 1. Assume all items that are

not shown in the inventory listing or discussed in situations (a) to (e) are recorded correctly.

Comprehensive Accounting Cycle Review

15.ACR  Quigley Corporation's trial balance at December 31, 2020, is presented below. All 2020 transactions have been recorded except for the items described below.

Unrecorded transactions and adjustments:

• 1.On January 1, 2020, Quigley issued 1,000 shares of $20 par, 6% preferred stock for $22,000.
• 2.On January 1, 2020, Quigley also issued 1,000 shares of common stock for $23,000.
• 3.Quigley reacquired 300 shares of its common stock on July 1, 2020, for $49 per share.
• 4.On December 31, 2020, Quigley declared the annual cash dividend and a $1.50 per share dividend on the outstanding common stock, all payable on January 15, 2021.
• 5.Quigley estimates that uncollectible accounts receivable at year-end is $5,100.
• 6.The building is being depreciated using the straight-line method over 30 years. The salvage value is $5,000.
• 7.The equipment is being depreciated using the straight-line method over 10 years. The salvage value is $4,000.
• 8.The unearned rent was collected on October 1, 2020. It was the receipt of 4 months' rent in advance (October 1, 2020 through January 31, 2021).
• 9.The 10% bonds payable pay interest every January 1. The interest for the 12 months ended December 31, 2020, has not been paid or recorded.

Instructions

(Ignore income taxes.)

(a)  

Prepare journal entries for the transactions and adjustment listed above.

(b)  

Prepare an updated December 31, 2020, trial balance, reflecting the journal entries in (a).

Total $871,200

(c)  

Prepare a multiple-step income statement for the year ending December 31, 2020.

(d)  

Prepare a retained earnings statement for the year ending December 31, 2020.

(e)  

Prepare a classified balance sheet as of December 31, 2020.

Total assets $273,400

List and describe major systematic factors that had major influence over the Australian stock exchange from March 2020 to May 2020. These influences can be good or bad.

Purple Company records $200,000 in net income for 2019 before deducting any compensation or other payment to its sole owner, Kirsten. Kirsten is single and she claims the $12,200 standard deduction. Purple Company is Kirsten's only source of income.

Ignoring any employment tax considerations, compute Kirsten's after-tax income for each of the following situations.

Click here to access the 2019 individual tax rate schedule to use for this problem. Assume the corporate tax rate is 21%.

Purple is a C corporation and pays out all of its after-tax income as a dividend to Kirsten.

Note: Individual taxpayers received preferential treatment regarding the taxation of qualified dividends (0%,15%,20%). For single taxpayers, the 0 percent rate applies to the first $38,600 of taxable income.

Purple Corporation's after-tax income is $ and Kristen's after tax income is $

Purple is a C corporation and pays Kirsten a salary of $158,000. Kirsten's after-tax income is

Discounted Cash Flow Valuation

You and your spouse begin immediately saving for retirement and the dreamy “ever after” that you need to fund. At this point, your “ever after” fund has a balance of $0. You begin depositing $300 each month, starting one month from now, for the next 30 years. Your spouse begins depositing $5,000 each year, starting one year from now, into the same account for the next 30 years. The joint account earns 9 percent APR, compounded monthly. How much will you two have in your joint account 30 years from now, immediately after your last deposits?

Part B Your “ever after” is expected to be funded by monthly withdrawals, starting one month after your last deposits, and it is expected to last for 35 years. How much will you two (collectively) have to happily spend each month, assuming your accounts continue to earn the same rate as before?

In October 2018, 4 people died from a mystery virus after a cruise holiday on Fun Cruises. Their families started legal action against Fun Cruises in November 2018 for a total of $2,000,000, but the company disputes liability. Up to the date of authorisation of the financial statements for the year to 30 June 2019, the lawyers advise that it is probable that the entity will not be found liable. However, when Fun Cruises prepares the financial statements for the year to 30 June 2020, its lawyers advise that, owing to developments in the case relating to a faulty dishwasher, it is probable that they will be found liable. For the year ended 30 June 2019, how should Fun Cruises account for this item in its accounts?

A futures market is a central financial exchange where people can trade standardized futures contracts. A futures exchange provides physical or electronic trading venues, which can be organized as non-profit member-owned organizations or for-profit organizations. Futures exchanges can also be integrated under other types of exchanges, such as stock markets, options markets and bond markets. Futures contracts are sometimes used by corporations and investors as a hedging strategy. Hedging refers to a range of investment strategies that are meant to decrease the risk experienced by investors and corporations.

After May 2020, what are the prospects of futures contracts as a significant risk management tool for firms? Discuss critically.

On Jan 2, 2018, Sandstone Enterprises purchased equipment for $129,200. The equipment has a useful life of four years or of 13,000 working hours and after the useful life it will have a residual value of $13,500. The machine was used for 1,900 hours in 2018, 2,800 hours in 2019; 3,700 hours in 2020.

Required:

1. Calculate the depreciation expense for 2018 and 2019 under each of the following methods:

1. Straight-line,
2. Double diminishing-balance, and
3. Units-of -production

2. Record the journal entry for depreciation expense for the year ended December 31, 2018 under the straight-line method. (2 marks)
3. Which method results in the lowest profit for the first two years? Why?

Mr. Hilal joined bank Muscat in the IT department on the 20^th of March 2002. As per the agreement with the employer, he is promised a starting basic pay of OMR 650 per month along with other allowances. His gross starting salary adding all allowances amounts to OMR 750. As per the terms and conditions in the contract, he is entitled for an increment (increment added to basic salary) after the completion of one year service. He retired from service on 15^th March 2020 when he was drawing a gross salary of OMR 1850 including all allowances OMR 350.

1)You are required to calculate the gratuity payable to Mr. Hilal.