On January 5, 2019, Prince Company acquired in cash 3,000 shares of ABC Inc., to keep as short-term marketable securities, at a price of $8.7 per share. To acquire these shares, Prince Company paid additional $900 for commission fees. On April 9, 2019, Prince Company sold 2,000 of these shares for $9.2 per share. Prince Company also paid $250 commission fees for this sale. The sale of marketable securities will result in

a.Gain on sale of investment for $650

b.Gain on sale of investment for $400

c.Loss on sale of investment for $150

d.Gain on sale of investment for $150

.At the end of the first year of operations, the total cost of the marketable securities that ABC Company holds is $146,000. During the second year, half of these securities are sold for $86,500 cash. Which of the following is true regarding the sale of the marketable securities in the second year?

a.The unrealized holding gain on investment is $13,500.

b.The loss on sale of investment is $13,500

c.The gain on sale of investment is $86,500

d.The gain on sale of investment is $13,500

Note: Parentheses indicate a credit balance.

In a pre-2009 business combination, Acme Company acquired all of Brem Company’s assets and liabilities for cash. After the combination, Acme formally dissolved Brem. At the acquisition date, the following book and fair values were available for the Brem Company accounts:

In addition, Acme paid an investment bank $30,900 cash for assistance in arranging the combination.

1. Using the legacy purchase method for pre-2009 business combinations, prepare Acme’s entry to record its acquisition of Brem in its accounting records assuming the following cash amounts of $651,900 and $446,300 were paid to the former owners of Brem.
2. How would these journal entries change if the acquisition occurred post-2009 and therefore Acme applied the acquisition method?

Gibson Manufacturing Company was started on January 1, Year 1, when it acquired $87,000 cash by issuing common stock. Gibson immediately purchased office furniture and manufacturing equipment costing $8,400 and $25,800, respectively. The office furniture had an eight-year useful life and a zero salvage value. The manufacturing equipment had a $3,600 salvage value and an expected useful life of three years. The company paid $11,100 for salaries of administrative personnel and $15,800 for wages to production personnel. Finally, the company paid $9,800 for raw materials that were used to make inventory. All inventory was started and completed during the year. Gibson completed production on 4,400 units of product and sold 3,480 units at a price of $15 each in Year 1. (Assume that all transactions are cash transactions and that product costs are computed in accordance with GAAP.) Required Determine the total product cost and the average cost per unit of the inventory produced in Year 1. (Round "Average cost per unit" to 2 decimal places.) Determine the amount of cost of goods sold that would appear on the Year 1 income statement. (Do not round intermediate calculations.) Determine the amount of the ending inventory balance that would appear on the December 31, Year 1, balance sheet. (Do not round intermediate calculations.) Determine the amount of net income that would appear on the Year 1 income statement. (Round your answer to the nearest dollar amount.) Determine the amount of retained earnings that would appear on the December 31, Year 1, balance sheet. (Round your answer to the nearest dollar amount.) Determine the amount of total assets that would appear on the December 31, Year 1, balance sheet. (Round your answer to the nearest dollar amount.)

Vernon Manufacturing Company was started on January 1, year 1, when it acquired $77,000 cash by issuing common stock. Vernon immediately purchased office furniture and manufacturing equipment costing $8,400 and $32,800, respectively. The office furniture had an eight-year useful life and a zero salvage value. The manufacturing equipment had a $3,200 salvage value and an expected useful life of four years. The company paid $11,700 for salaries of administrative personnel and $15,500 for wages to production personnel. Finally, the company paid $14,360 for raw materials that were used to make inventory. All inventory was started and completed during the year. Vernon completed production on 4,600 units of product and sold 3,610 units at a price of $15 each in year 1. (Assume that all transactions are cash transactions and that product costs are computed in accordance with GAAP.)

Required

1. Determine the total product cost and the average cost per unit of the inventory produced in year 1. (Round "Average cost per unit" to 2 decimal places.)

2. Determine the amount of cost of goods sold that would appear on the year 1 income statement. (Do not round intermediate calculations.)

3. Determine the amount of the ending inventory balance that would appear on the December 31, year 1, balance sheet. (Do not round intermediate calculations.)

4. Determine the amount of net income that would appear on the year 1 income statement. (Round your final answer value to the nearest whole dollar.)

5. Determine the amount of retained earnings that would appear on the December 31, year 1, balance sheet. (Round your final answer value to the nearest whole dollar.)

6. Determine the amount of total assets that would appear on the December 31, year 1, balance sheet. (Round your final answer value to the nearest whole dollar.)

Thank you

Walton Manufacturing Company (WMC) was started when it acquired $95,000 by issuing common stock. During the first year of operations, the company incurred specifically identifiable product costs (materials, labor, and overhead) amounting to $55,200. WMC also incurred $78,200 of engineering design and planning costs. There was a debate regarding how the design and planning costs should be classified. Advocates of Option 1 believe that the costs should be classified as general, selling, and administrative costs. Advocates of Option 2 believe it is more appropriate to classify the design and planning costs as product costs. During the year, WMC made 4,600 units of product and sold 4,000 units at a price of $35.00 each. All transactions were cash transactions.

Required

1. a-1. Prepare a GAAP-based income statement and balance sheet under option 1.

2. a-2. Prepare a GAAP-based income statement and balance sheet under option 2.

3. b. Identify the option that results in financial statements that are more likely to leave a favorable impression on investors and creditors.

4. c. Assume that WMC provides an incentive bonus to the company president equal to 14 percent of net income. Compute the amount of the bonus under each of the two options. Identify the option that provides the president with the higher bonus.

5. d. Assume a 35 percent income tax rate. Determine the amount of income tax expense under each of the two options. Identify the option that minimizes the amount of the company’s income tax expense.

Depreciation Methods

Clearcopy, a printing company, acquired a new press on January 1, 2019. The press cost $171,600 and had an expected life of 8 years or 4,500,000 pages and an expected residual value of $15,000. Clearcopy printed 691,900 pages in 2019. Do not round intermediate calculations. If required, round your answers to the nearest whole dollar.

Required:

1. Compute 2019 depreciation expense using the:

2. What is the book value of the machine at the end of 2019 under each method?

Rooney Manufacturing Company (CMC) was started when it acquired $97,000 by issuing common stock. During the first year of operations, the company incurred specifically identifiable product costs (materials, labor, and overhead) amounting to $58,500. CMC also incurred $67,500 of engineering design and planning costs. There was a debate regarding how the design and planning costs should be classified. Advocates of Option 1 believe that the costs should be classified as general, selling, and administrative costs. Advocates of Option 2 believe it is more appropriate to classify the design and planning costs as product costs. During the year, CMC made 4,500 units of product and sold 3,900 units at a price of $38.00 each. All transactions were cash transactions.

Required

a-1. Prepare a GAAP-based income statement and balance sheet under option 1.

a-2. Prepare a GAAP-based income statement and balance sheet under option 2.

b. Identify the option that results in financial statements that are more likely to leave a favorable impression on investors and creditors.

c. Assume that CMC provides an incentive bonus to the company president equal to 11 percent of net income. Compute the amount of the bonus under each of the two options. Identify the option that provides the president with the higher bonus.

d. Assume a 40 percent income tax rate. Determine the amount of income tax expense under each of the two options. Identify the option that minimizes the amount of the company’s income tax expense.

Each of the following problems is an independent situation:

Michigan-based Leo Corporation acquired 100 percent of the common stock of a British company on January 1, 20X8, for $1,100,000. The British subsidiary's net assets amounted to 500,000 pounds on the date of acquisition. On January 1, 20X8, the book values of its identifiable assets and liabilities approximated their fair values. As a result of an analysis of functional currency indicators, Leo determined that the British pound was the functional currency. On December 31, 20X8, the British subsidiary's adjusted trial balance, translated into U.S. dollars, contained $17,000 more debits than credits. The British subsidiary reported income of 33,000 pounds for 20X8 and paid a cash dividend of 8,000 pounds on October 25, 20X8. Included on the British subsidiary's income statement was depreciation expense of 3,500 pounds. Leo uses the fully adjusted equity method of accounting for its investment in the British subsidiary and determined that goodwill in the first year had an impairment loss of 25 percent of its initial amount. Exchange rates at various dates during 20X8 follow:

January 1                    1£ = $2.10

October 25                  1£ =   2.25

December 31               1£ =   2.20

Average for 20X8       1£ =   2.21

1. Based on the preceding information, what amount should Leo record as “income from subsidiary” based on the British subsidiary's reported net income?
A. $72,930
B. $52,500
C. $72,600
D. $69,300

2. Based on the preceding information, the receipt of the dividend will result in a credit to the investment account for:

A. $16,800
B. $17,680
C. $18,000
D. $17,600

3. Based on the preceding information, on Leo's consolidated balance sheet at December 31, 20X8, what amount should be reported for the goodwill acquired on January 1, 20X8?

A. $36,845
B. $39,286
C. $36,905
D. $36,607

4. Based on the preceding information, in the stockholders' equity section of Leo's consolidated balance sheet at December 31, 20X8, Leo should report the translation adjustment as a component of other comprehensive income of:

A. $19,440
B. $17,000
C. $18,786
D. $19,380

Please provide calculations!!! Thank you!