On the 1st March 2019, Concept Limited purchased printing equipment costing $186,000 by issuing a 5 year, 4% unsecured note payable. The note requires $42,000 annual principal repayments plus interest each 1st March. Journalise the transactions to account for the acquisition of equipment. (Remember to allocate the current and non-current portions of the liability) Accrue interest on the note payable at the 31st December, 2019. Record the payment of the first instalment (including interest) of the note payable on 1st March, 2020 and then accrue interest as at 31st December, 2020. Prepare an excerpt from the Balance Sheet as at 31st December, 2020 showing liabilities.

Habiby, Inc., began operations in 2018 and has the following income and expenses for 2018 through 2021.

a. What is the amount of tax that Habiby should pay each year? If an amount is zero, enter "0".

b. How much would Habiby have paid in tax if the old NOL rules were in place but the corporate tax rate was 21 percent?. If an amount is zero, enter "0".

During 2020, Sweet Company started a construction job with a contract price of $1,620,000. The job was completed in 2022. The following information is available.

(a)

Compute the amount of gross profit to be recognized each year, assuming the percentage-of-completion method is used.

For 2020, prepare a pension worksheet for Brownie Company that shows the journal entry for pension expense and the year-end balances in the related pension accounts.

Accounts receivable transactions are provided below for J Crane Co.

Dec. 31, 2020

The company estimated that 3% of its accounts receivable would become uncollectible. The balances in the Accounts Receivable account and Allowance for Doubtful Accounts were $684,000 and $3,000 (debit), respectively.

Mar. 5, 2021

The company determined that R. Mirza’s $3,100 account and D. Wight’s $6,900 account were uncollectible. The company’s accounts receivable were $719,000 before the accounts were written off.

June 6, 2021

Wight paid the amount that had been written off on March 5. The company’s accounts receivable were $674,000prior to recording the cash receipt for Wight.

(a)

Correct answer iconYour answer is correct.

Prepare the journal entries on December 31, 2020, March 5, 2021, and June 6, 2021. (Credit account titles are automatically indented when the 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. Record journal entries in the order presented in the problem.)

Date

Account Titles and Explanation

Debit

Credit

[Dec. 31, 2020 \/]

[Bad Debts Expense \/]

[          ]

[          ]

[Bad Debts Expense \/]

[          ]

[          ]

(To record estimate of uncollectible accounts.)

[Dec. 31, 2020 \/]

[Bad Debts Expense \/]

[          ]

[          ]

[Allowance for Doubtful Accounts \/]

[          ]

[          ]

(To record write off of accounts receivable.)

[Dec. 31, 2020 \/]

[Cash \/]

[          ]

[          ]

[No Entry \/]

[          ]

[          ]

(To record write off of accounts receivable.)

[Dec. 31, 2020 \/]

[Allowance for Doubtful Accounts \/]

[          ]

[          ]

[No Entry \/]

[          ]

[          ]

(To reverse write off.)

[Dec. 31, 2020 \/]

[Accounts Receivable - Mirza \/]

[          ]

[          ]

[Accounts Receivable - Wight \/]

[          ]

[          ]

(Collection of account that was previously written off.)

eTextbook and Media

List of Accounts

Attempts: 3 of 5 used

(b)

Your Answer

Correct Answer

Correct answer iconYour answer is correct.

Post the journal entries to Allowance for Doubtful Accounts and calculate the new balance after each entry.

Allowance for Doubtful Accounts

Date

Explanation

Ref.

Debit

Credit

Balance

Dec. 31, 2020

Balance unadjusted Debit

[          ]

Dec. 31, 2020

AJE

[          ]

[          ]

[          ]

Mar. 5, 2021

Write off Mirza

[          ]

[          ]

[          ]

Mar. 5, 2021

Write off Wight

[          ]

[          ]

[          ]

June 6, 2021

Reverse write off

[          ]

[          ]

[          ]

eTextbook and Media

List of Accounts

Attempts: 5 of 5 used

(c)

Incorrect answer iconYour answer is incorrect.

Calculate the carrying amount of the accounts receivable both before and after recording the cash receipt from Wight on June 6, 2021.

Carrying amount before recovery

$ [          ]

Carrying amount after recovery

$ [          ]

On December 31, 2020, Jen & Mink Clothing (J&M) performed the inventory count and determined the year-end ending inventory value to be $75,500. It is now January 8, 2021, and you have been asked to double-check the year-end inventory listing. J&M uses a perpetual inventory system. Note: Only relevant items are shown on the inventory listing.

The following situations have been brought to your attention:

1. On January 3, 2021, J&M received a shipment of 100 blue jackets, for $2,000 (Item #7649). The inventory was purchased December 23, 2020, FOB destination from Global Threads. This inventory was included in J&M’s inventory count and inventory listing.
2. On December 29, 2020, J&M sold scarves (Item #5566) to a customer with a sale price of $700 and cost of $500, FOB shipping. The order was shipped on December 30, 2020. J&M has not included this inventory.
3. Red Blazers (Item #6193) were purchased and shipped from International Co. on December 30, 2020, for $3,300, FOB shipping. The shipment arrived January 5, 2021, and the appropriate party paid for the shipping charges of $320. Additional costs were $220 for import duties and $60 for insurance during shipment. J&M has not included this inventory.
4. At year-end, J&M is holding $5,000 of black pants (Item #10824) on consignment for designer Duke Co. This inventory was included in J&M’s inventory count and inventory listing.
5. On December 31, 2020, J&M shipped white shirts (Item #4291), FOB destination costing $1,000 to a customer. The customer was charged $1,400 and the customer received the goods on January 3, 2021. J&M has not included this inventory.

Required:
1. In situations (a) to (e) determine whether inventory should be included or excluded in inventory at December 31, 2020. If the inventory should be included, determine the correct inventory cost. (Do not leave any empty spaces; input a 0 wherever it is required.)

2. Determine the correct ending inventory value at December 31, 2020. Starting with the unadjusted inventory value of $75,500, add or subtract any errors based on your analysis in Part 1. Assume all items that are not shown in the inventory listing are recorded correctly.

Next

14.       Cleaverland purchased 100% of Omaha on January 1, 2019 for $650,000. On that date, Omaha's stockholders' equity was $650,000, and the recognized book values of Ottowa’s individual net assets approximated their fair values. Omaha had net incomes of $150,000 and $190,000 for 2019 and 2020, respectively. The subsidiary paid dividends amounting to $30,000 in both years. Cleaverland uses the equity method to account for its pre-consolidation investment in Omaha.

What was the balance in Equity Investment at December 31, 2020?

a. $650,000

b. $710,000

c. $990,000

d. $930,000

15.       Brendon, Inc. acquired 100% of Weston Enterprises on January 2, 2020. During 2020, Brendon sold Weston for $700,000 goods which had cost $500,000. Weston still owned 40% of the goods at the end of the year. In 2021, Brendon sold goods with a cost of $500,000 to Weston for $700,000, and the buyer still owned 40% of the goods at year-end. For 2021, cost of goods sold was $1,000,000 for Brendon and $990,000 for Weston.

What was consolidated cost of goods sold for 2021?

a.   $1,370,000

b.   $1,290,000

c.   $1,870,000

d.   $1,990,000

Clearwater Co. owned all of the voting common stock of Kelley, Inc. On January 2, 2020 Clearwater sold equipment to Kelley for $350,000. The equipment had cost Clearwater $425,000. At the time of the sale, the balance in accumulated depreciation was $125,000. The equipment had a remaining useful life of eight years and no salvage value.

16.       For the consolidated balance sheet at December 31, 2021, at would amount would the equipment (net) be included?

a.   $225,000

b. $262,500

c.   $306,250

d. $-0-

On April 1, 2020, Republic Company sold equipment to its wholly owned subsidiary, Barre Corporation, for $40,000. At the time of the transfer, the asset had an original cost (to Republic) of $60,000 and accumulated depreciation of $25,000. The equipment has a five year estimated remaining life.Barre reported net income of $250,000, $270,000 and $310,000 in 2020, 2021, and 2022, respectively. Republic received dividends from Barre of $90,000, $105,000 and $120,000 for 2020, 2021, and 2022, respectively.

17.        What was the amount of the gain or loss on the sale of equipment reported by Republic on its pre-consolidation income statement in 2020?

a. $-0-

b. $ 5,000 gain

c.    $20,000 loss

d. $35,000 gain

18.       What was the amount of the credit to depreciation expense on the 2021 consolidation worksheet?

a. $   750

b.   $-0-

c.   $1,000

d.   $1,600

1. Andrew Cousins is 63 years old and is employed as a personal tax planning advisor by PWMG LLP. Andrew is married to Ying Yue Cousins; Ying Yue is a pensions analyst at Falcons plc, a large investment bank.

   Andrew owns an investment portfolio of tangible and intangible assets; he is also a keen collector of antique paintings and sculptures. Andrew intends to retire in the near future; he plans to acquire a retirement home in Nice, France. To finance this acquisition, he made a number of disposals from his investment portfolio during the tax year 2019/20.

   Which of the following disposals would be exempt or wholly relieved from capital gains tax in 2019/20?

   1. Sale of corporate bonds issued by Ravens plc, an engineering company that operates in the UK oil and gas sector

   2. Sale of an oil painting to Ying Yue Cousins. The oil painting had a market value on disposal of £18,000, but Andrew sold it to Ying Yue for a total consideration of £10,000. The painting cost £3,000 when acquired on 6 December 1999

   3. Sale of Andrew’s principal private residence (i.e. his main residence), a house in London, UK. Andrew acquired the house in 1996

   4. Part disposal of 400 shares in Trubisky Inc., a company that is resident in Delaware, USA; the shares were acquired in two acquisitions of £23,000 for 259 shares on 7 October 1994 and £35,000 for 303 shares on 11 July 2001, respectively. Net disposal consideration on the part disposal were £516,000

3. Ahmed Benghazi owns and manages a bakery. Ahmed’s business, Benghazi Mediterranean Khabbaz, produces luxury bread, cakes and pastries for restaurants and delicatessens in Newcastle upon Tyne, UK.

   During the tax year 2019/20, Benghazi Mediterranean Khabbaz’s taxable turnover (excluding capital items) was £222,070. The business’s VAT administration and payments of VAT liabilities are up-to-date. Ahmed Benghazi has never been convicted of a VAT offence or assessed to a penalty for VAT evasion involving dishonest conduct. Since the business started trading in 2012/13, Benghazi Mediterranean Khabbaz has participated in the flat-rate scheme for small businesses.

   Which, if any, of the special schemes for VAT administration are available for Benghazi Mediterranean Khabbaz in 2019/20?

   1. Cash accounting and annual accounting schemes only

   2. Flat rate scheme for small businesses only

   3. Cash accounting scheme, annual accounting scheme and flat-rate scheme for

      small businesses

   4. Annual accounting scheme and flat rate scheme for small businesses

5. Laura
Investment Services Ltd. Jackson Investment Services is a limited company, incorporated under the UK Companies Act 2006. Laura receives dividends from Jackson Investment Services Ltd.

Jackson Investment Services Ltd employs two investment analysts and an administrative assistant. Laura sub-contracts some of Jackson Investment Services Ltd’s work to Josh Dalton, a sole trader and self-employed tax specialist.

Jackson is an asset management advisor; she owns and manages Jackson

Which of the following are chargeable to Jackson Investment Services Ltd for the year ended 31 March 2020?

1. Corporation tax, Class 4 National Insurance contributions and income tax

2. Income tax and corporation tax

3. Corporation tax and Class 1 secondary National Insurance contributions

4. 4. Corporation tax, Class 1 primary National Insurance contributions and income tax

5. The badges of trade are the key factors in deciding whether an activity constitutes a trade.Josh Prescott is employed as an indirect taxation specialist by Falcons LLP, a large investment bank. Josh is also a talented mathematician and computer programmer: he provides risk analysis consultancy services to professional sports clubs in North America.

6. During the tax year 2019/20, Josh engaged in a number of transactions. Which of the following transactions would be used to determine if Josh’s risk analysis and consultancy services are a trading activity? A. Sale of risk analysis and management software to the Portland Panthers American Football Club. The software was originally designed for use in rugby; Josh adapted and improved the software for use in American football. B.Throughout the tax year 2019/20, Josh was supplied with a car by Falcons LLP. Josh used the car for both work and private use. Josh agreed to reimburse Falcons LLP for the full cost of any fuel used for private journeys: this amounted to £3,720, which Josh paid in a single instalment on 3 April 2019. C.Josh sold a licence for a risk analysis model for use in baseball to the Toronto Angels Baseball Club. Josh sold the licence for £70,000 on 1 July 2019.   D. Previously, he had sold licences to use the risk analysis model to four other baseball clubs.

Josh acquired debt finance to fund the acquisition of digital recording technology. The technology was used to collect data that Josh then used as part of his risk analysis consultancy activities.

• Identify several areas where artificial intelligence (AI) and machine learning (ML) are having practical consequences, through your own research and via reading/responding to colleagues.  
• Carry on a reasonably intelligent conversation about these different methods, showing knowledge of current events, the social milieu in which the occur and have impact, the role of AI, and some understanding of the specific elements of the AI/ML methods involved.

1. Characterize one area in depth where AI/ML methods have changed the game remarkably within the past few years.
2. For your specific applications area, identify one or more of the key turning points - these may not be a tip-the-scales type of thing; they may in fact be just the first introduction of a new technology - but in retrospect, you can identify that this was the point where everything started to change.
3. Characterize the social/economic environment that is being and will be impacted by this AI/ML introduction.
4. Drill down until you find at least one of the specific AI/ML technologies and/or methods involved. (For example, in Cambridge Analytica's recently-revealed intrusion into the 2016 United States presidential election, there were many methods used - but the AI/ML method was logistic regression.)
5. Chase down this method - finding online descriptive sources (educational blogposts, You tube vids, etc.) so that you generally understand what this method is, what it can do, and what it can be applied to. Paraphrase or summarize your key findings on this method.
6. Provide overview descriptions and links to the most valuable resources that you've found.
7. (Final Reflection - to be completed near the end of your second week, and after you've done everything else:) Expand your thinking just a bit into the future. Is this method likely to be the predominant method that will be used, at least for the next few years? Or is it likely to be superseded by even more powerful methods? If so, what kinds of methods will these be, and how will they improve on the current AI/ML approach?