On January 1, 2018, Pine Company owns 40 percent (56,000 shares) of Seacrest, Inc., which it purchased several years ago for $312,200. Since the date of acquisition, the equity method has been properly applied, and the carrying amount of the investment account as of January 1, 2018, is $404,600. Excess patent cost amortization of $16,800 is still being recognized each year. During 2018, Seacrest reports net income of $438,000 and a $168,000 other comprehensive loss, both incurred uniformly throughout the year. No dividends were declared during the year. Pine sold 11,200 shares of Seacrest on August 1, 2018, for $133,707 in cash. However, Pine retains the ability to significantly influence the investee. During the last quarter of 2017, Pine sold $54,000 in inventory (which it had originally purchased for only $32,400) to Seacrest. At the end of that fiscal year, Seacrest's inventory retained $16,600 (at sales price) of this merchandise, which was subsequently sold in the first quarter of 2018. On Pine's financial statements for the year ended December 31, 2018, what income effects would be reported from its ownership in Seacrest? (Do not round intermediate calculations. Round your answers to the nearest whole dollar.)

Equity income_____

Other Comprehensive Loss__________

Gain on sale of investment_______

Rosie Dry Cleaning was started on January 1, 2018. It experienced the following events during its first two years of operation:

Events Affecting 2018

1. Provided $32,050 of cleaning services on account.
2. Collected $25,640 cash from accounts receivable.
3. Adjusted the accounting records to reflect the estimate that uncollectible accounts expense would be 1 percent of the cleaning revenue on account.

Events Affecting 2019

1. Wrote off a $240 account receivable that was determined to be uncollectible.
2. Provided $37,402 of cleaning services on account.
3. Collected $33,101 cash from accounts receivable.
4. Adjusted the accounting records to reflect the estimate that uncollectible accounts expense would be 1 percent of the cleaning revenue on account.

Required

1. Organize the transaction data in accounts under an accounting equation for each year.
2. Determine the following amounts:

1. (1) Net income for 2018.
2. (2) Net cash flow from operating activities for 2018.
3. (3) Balance of accounts receivable at the end of 2018.
4. (4) Net realizable value of accounts receivable at the end of 2018.

3. Determine the following amounts:

1. (1) Net income for 2019.
2. (2) Net cash flow from operating activities for 2019.
3. (3) Balance of accounts receivable at the end of 2019.
4. (4) Net realizable value of accounts receivable at the end of 2019.

1. Fill in the blanks in the income statement and balance sheet and show that Cash Flow Identity holds.

2. If the company sold $300 worth of fixed assets, how much fixed assets were sold?

3. Assuming that the company had either seasoned equity offering or repurchase, which one did the company have?

4. If the company borrowed $55 in 2018, how much of the Long-term debt was paid in 2018?

Royal Corp’s financial information (in millions, except for Dividends) for Problems 2 and 3:

                                                         2019                2018
Accounts Payable                                           $  7,000           $  6,780

Accounts Receivable                                          5,000               4,685

Additional Paid-in Capital                                  4,000               4,000

Cash                                                                    8,577               5,654

Common Stock                                                   3,107               3,107           

Cost of Goods Sold                                           48,464             47,594

Depreciation                                                       1,315               1,244           

Dividends per share                                              1.53                 1.28

Goodwill                                                           18,051             19,121

Interest Expense                                                 1,200               1,100

Inventory                                                            8,871               8,101

Long-Term Debt                                                     ?                      ?  

Net Property, Plant & Equipment                    26,500             25,311

Notes Payable                                                     4,200               3,770

Research & Development Expense                    1,847               1,747

Retained Earnings                                                   ?                23,045           

Revenue                                                            61,200             59,000

Selling General & Admin Expense                    3,200               3,024

Shares Outstanding                                             1,170               1,280

Treasury Stock                                                   (6,500)           (4,200)

Tax Rate = 30%

Note that a reduction in Goodwill would be similar to Depreciation Expense in a firm’s Operating Cash Flow.

2. See the last page for the financial information of Royal Corporation.

2 A. Construct Income Statements for 2018 and 2019
                                                2019                          2018

2B. Construct Balance Sheets for 2018 and 2019
                                      Assets                                               Liabilities and Owners’ Equity

                             2019              2018                                                             2019                2018


2C. Construct a 2019 Statement of Cash Flows (Goodwill reduction is a noncash expense)

The following is the receipts and payments account for the year ended 31 December 2018:

(2) On 31 December 2017 the club held investments which cost $10000. During the year ended 31 December 2018, these were sold for $15000.
(3) Equipment was valued at $6000 on 31 December 2017. On 30 June 2018, the club purchased additional equipment at a cost of $ 10400. Depreciation is to be provided for at the rate of 10% per annum.

(a) Prepare the trading section of the income statement for the year ended 31 December 2018.
(b) Prepare the income and expenditure account for the year ended 31 December 2018.

On June 30, 2017, Bramble Company issued $3,300,000 face value of 13%, 20-year bonds at $3,548,257, a yield of 12%. Bramble uses the effective-interest method to amortize bond premium or discount. The bonds pay semiannual interest on June 30 and December 31.

Prepare the journal entries to record the following transactions. (Round answer to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

(1) The issuance of the bonds on June 30, 2017.

(2) The payment of interest and the amortization of the premium on December 31, 2017.

(3) The payment of interest and the amortization of the premium on June 30, 2018.

(4) The payment of interest and the amortization of the premium on December 31, 2018.

(1) June 30, 2017

(2) December 31, 2017

(3) June 30, 2018

(4) December 31, 2018

Show the proper balance sheet presentation for the liability for bonds payable on the December 31, 2018, balance sheet.

Provide the answers to the following questions.

(1) What amount of interest expense is reported for 2018? (Round answer to 0 decimal places, e.g. 38,548.) Interest expense reported for 2018 $

(2) Will the bond interest expense reported in 2018 be the same as, greater than, or less than the amount that would be reported if the straight-line method of amortization were used? The bond interest expense reported in 2018 will be the amount that would be reported if the straight-line method of amortization were used.

(3) Determine the total cost of borrowing over the life of the bond. (Round answer to 0 decimal places, e.g. 38,548.) Total cost of borrowing over the life of the bond $

(4) Will the total bond interest expense for the life of the bond be greater than, the same as, or less than the total interest expense if the straight-line method of amortization were used? The total bond interest expense for the life of the bond will be the total interest expense if the straight-line method of amortization were used.

The total bond interest expense for the life of the bond will be ?

The following income statement items appeared on the adjusted trial balance of Schembri Manufacturing Corporation for the year ended December 31, 2018 ($ in 000s): sales revenue, $18,300; cost of goods sold, $7,700; selling expenses, $1,450; general and administrative expenses, $950; interest revenue, $230; interest expense, $320. Income taxes have not yet been recorded. The company’s income tax rate is 20% on all items of income or loss. These revenue and expense items appear in the company’s income statement every year. The company’s controller, however, has asked for your help in determining the appropriate treatment of the following nonrecurring transactions that also occurred during 2018 ($ in 000s). All transactions are material in amount. Investments were sold during the year at a loss of $370. Schembri also had unrealized gains of $470 for the year on investments. One of the company’s factories was closed during the year. Restructuring costs incurred were $1,800. During the year, Schembri completed the sale of one of its operating divisions that qualifies as a component of the entity according to GAAP. The division had incurred a loss from operations of $710 in 2018 prior to the sale, and its assets were sold at a gain of $1,700. In 2018, the company’s accountant discovered that depreciation expense in 2017 for the office building was understated by $350. Negative foreign currency translation adjustment for the year totaled $420. Required: 1. Prepare Schembri’s single, continuous multiple-step statement of comprehensive income for 2018, including earnings per share disclosures. One million shares of common stock were outstanding at the beginning of the year and an additional 200,000 shares were issued on July 1, 2018. 2. Prepare a separate statement of comprehensive income for 2018. Prepare Schembri’s single, continuous multiple-step statement of comprehensive income for 2018, including earnings per share disclosures. One million shares of common stock were outstanding at the beginning of the year and an additional 200,000 shares were issued on July 1, 2018. (Amounts to be deducted should be indicated with a minus sign. Enter your answers in thousands. Round EPS answers to 2 decimal places.)

Med Student Sleep Average (Raw Data, Software Required):
Here we consider a small study on the sleep habits of med students and non-med students. The study consists of the hours of sleep per night obtained from 30 non-med students and 25 med students. The sample data is given in the table below. Test the claim that, on average, the mean hours of sleep for all med students is different from that for non-med students. Test this claim at the 0.01 significance level.