On August 1, 2019, United Corporation issued $9.20 million of 8% bonds at 105. The bonds mature in 20 years. Each $1,000 bond was issued with 20 detachable stock warrants, each of which entitled the bondholder to purchase, for $42, one share of United $5 par common stock. World Company purchased 10% of the bond issue. On August 1, 2019, the market value per share for United stock was $48 and the market value of each warrant was $6. In March 2025, when United common stock had a market price of $62 per share and the unamortized premium balance was $220,000, World exercised the warrants it held.

Required:
1. Prepare the journal entries on August 1, 2019, to record (A) the issuance of the bonds by United and (B) the investment by World.
2. Prepare the journal entries for both companies in March 2025 to record the exercise of the warrants.

On August 1, 2019, United Corporation issued $9.50 million of 6% bonds at 104. The bonds mature in 20 years. Each $1,000 bond was issued with 20 detachable stock warrants, each of which entitled the bondholder to purchase, for $45, one share of United $5 par common stock. World Company purchased 20% of the bond issue. On August 1, 2019, the market value per share for United stock was $51 and the market value of each warrant was $7. In March 2025, when United common stock had a market price of $65 per share and the unamortized premium balance was $250,000, World exercised the warrants it held.

Required:

1. Prepare the journal entries on August 1, 2019, to record (A) the issuance of the bonds by United and (B) the investment by World.

2. Prepare the journal entries for both companies in March 2025 to record the exercise of the warrants.

The following selected transactions relate to investment activities of Ornamental Insulation Corporation during 2021. The company buys debt securities, not intending to profit from short-term differences in price and not necessarily to hold debt securities to maturity, but to have them available for sale in years when circumstances warrant. Ornamental’s fiscal year ends on December 31. No investments were held by Ornamental on December 31, 2020.

• Record the acquisition of 7% Distribution Transformers Corporation bonds costing $520,000 at face value.
• Record the acquisition of $1,080,000 of American Instruments’ 9% bonds at face value.
• Record the entry for the semiannual interest received on the Distribution Transformers bonds.
• Record the entry to adjust to fair value on the date of sale of the Distribution Transformers bonds.
• Record the entry for the reclassification adjustment on the date of sale.
• Record the entry for sale of Distribution Transformers bonds for $557,000.
• Record the acquisition of $1,560,000 of M&D Corporation 5% bonds at face value.
• Record the interest accrual for American Instruments bonds.
• Record the interest accrual for M&D bonds.
• Record the entry to adjust fair value of the investments at year-end.

Concord Cosmetic Inc. (ACI), a cosmetic product manufacturer, is a publicly listed company. ACI is preparing earnings per share data for 2020. The following is a summary of the activity for ACI during 2020:

Required: weighted average number of shares outstanding for the year ended December 31, 2020.

PartA： Jan 1^st, 2020: Tony Inc. buys a machine from Avengers Inc. and will make 3 equal payments of 200,000 over the next 18 months (payments on June 30, 2020; Dec 31, 2020; and June 30, 2021). The interest rate on this annuity is 14%. Record all the journal entries from Jan 1^st 2020 until the expiration of the annuity. (4 points) Assume the machine does not depreciate.

Part B: Create the balance sheet as of December 31^st, 2020 along with the income statement and cash flow statement for the time period of Jan 1^st, 2020 to Dec 31^st,2020 (6 points) (There might have a $1 rounding issue

Assume that the following data relative to Kane Company for 2020 is available:

Net Income                                                                                                                                                                                                                $2,100,000

8% Cumulative Convertible Preferred Stock

Sold at par, convertible into 200,000 shares of common

(adjusted for split).    $1,000,000

Stock Options

Exercisable at the option price of $25 per share. The average

market price in 2020, $30 (market price and option price

adjusted for split). 60,000 shares

Instructions

(a)   Compute the basic earnings per share for 2020 (Round to the nearest penny).

(b)   Compute the diluted earnings per share for 2020 (Round to the nearest penny).

Exercise 20-13 Indigo Company sponsors a defined benefit pension plan. The corporation’s actuary provides the following information about the plan. January 1, 2020 December 31, 2020 Vested benefit obligation $1,650 $1,750 Accumulated benefit obligation 1,750 2,750 Projected benefit obligation 2,250 2,770 Plan assets (fair value) 1,730 2,640 Settlement rate and expected rate of return 10 % Pension asset/liability 520 ? Service cost for the year 2020 440 Contributions (funding in 2020) 750 Benefits paid in 202- 210

(a) Compute the actual return on the plan assets in 2020.

(b) Compute the amount of the other comprehensive income (G/L) as of December 31, 2020. (Assume the January 1, 2020, balance was zero.) (Enter loss using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).

(c) Compute the amount of net gain or loss amortization for 2020 (corridor approach).

(d) Compute pension expense for 2020.

In the green cells calculate total Gross Profit (i.e., Sales - COGS) using the condition(s) as specified and without creating a helper column, using Filters, or Pivot Tables.