1. The Accounts Receivable balance for River Corporation is $400,000 as of January 31, 2020. Before calculating and recording January 2020 Bad Debt Expense, the Allowance for Doubtful Accounts has a credit balance of $5,000. Credit sales for January 2020 are $4,000,000, and over the past several years, 1% of credit sales have proven uncollectible. An aging of River Corporation’s Accounts Receivable results in a $43,000 estimate for the Allowance for Doubtful Accounts as of January 31, 2020. Part A: PERCENT OF SALES METHOD Assume that River Corporation uses the percent of sales method to estimate future uncollectible accounts. a. What adjusting entry does River make to record January 2020 Bad Debt Expense? Accounts Receivable b. What is the “Accounts Receivable, net” on River’s January 31, 2020 Balance Sheet? c. What is “Bad Debt Expense” on River’s January 2020 Income Statement? Part B: ANALYSIS OF RECEIVABLES METHOD Assume that River Corporation instead uses the analysis of receivables method to estimate future uncollectible accounts. a. What adjusting entry does River make to record January 2020 Bad Debt Expense? b. What is the “Accounts Receivable, net” on River’s January 31, 2020 Balance Sheet? c. What is “Bad Debt Expense” on River’s January 2020 Income Statement?

At January 1, 2020, the credit balance of Whispering Winds Corp.’s Allowance for Doubtful Accounts was $401,000. During 2020, the bad debt expense entry was based on a percentage of net credit sales. Net sales for 2020 were $80 million, of which 90% were on account. Based on the information available at the time, the 2020 bad debt expense was estimated to be 0.75% of net credit sales. During 2020, uncollectible receivables amounting to $508,500 were written off against the allowance for doubtful accounts. The company has estimated that at December 31, 2020, based on a review of the aged accounts receivable, the allowance for doubtful accounts would be properly measured at $530,500.

Prepare a schedule calculating the balance in Whispering Winds Corp.’s Allowance for Doubtful Accounts at December 31, 2020.

Prepare any necessary journal entry at year end to adjust the allowance for doubtful accounts to the required balance. (Credit account titles are automatically indented when 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.)

Claims against a company whereby the creditor has a charge against specific property is known as a:

      a.    circulating security interest.

      b.    specific debt covenant.

      c.     non-circulating security interest.

      d.    floating charge.

The details below were extracted from the accounting records of Great South East Ltd (a company in the process of liquidation).

Assume that the constitution of Great South East Ltd states that in the event of liquidation, all shares are to rank equally, based on the number of shares held, in distributing any surplus or deficiency.

For preference shareholders, what is the amount of the actual refund or call?

The details below were extracted from the accounting records of Great South East Ltd (a company in the process of liquidation).

Assume that the constitution of Great South East Ltd states that in the event of liquidation, all shares are to rank equally, based on the number of shares held, in distributing any surplus or deficiency.

What will be the deficiency or surplus apportioned to preference shareholders?

On 1 January 2014, Cowboys Ltd acquired all the issued shares in Tate Ltd. At that date, the plant of Tate Ltd had a fair value of $20 000 more than its carrying amount and an estimated useful life of 5 years. Tate Ltd depreciates the plant on a straight-line basis. The plant was sold to external parties on 31 December 2014. The business combination valuation entries in relation to the plant as at 30 June 2015 will include:

1. Adjustments to the plant account to recognise the fair value adjustment at acquisition date
2. Adjustments to the current depreciation expense
3. Adjustments to retained earnings (reflecting previous year's depreciation and related tax effect)
4. Transfers from business combination valuation reserve to retained earnings

Unity Limited acquired 100% of the share capital of Bellvista Limited for $300 000. Bellvista had total shareholder’s equity of $200 000. The book values of Bellvista Limited’s assets were: buildings $100 000, machinery $120 000. The fair values of these assets were: buildings $180 000, machinery $140 000. The tax rate is 30%. The acquisition analysis will determine:

Fredericks Limited acquired all the identifiable assets and liabilities of Nicole Limited for $134 000. Nicole's assets and liabilities as on the acquisition date (assumed at fair value) are: plant $72 000; inventories $40 000; accounts receivable $18 000; patents $10 000; goodwill $5 000; accounts payable $16 000. The difference on acquisition is:

On 1 July 2014, Peter Limited acquired all the issued shares of Kerri Limited for $100 000 when the equity of Kerri Limited consisted of:

The pre-acquisition entry at 1 July 2014 is:

Description:

Shenya Jones, 34-year-old female, arrives at the office with swelling and a red pustule on her face. She states that the problem started 2 days ago as a small pimple near her nose. It became irritated, and then extremely swollen and painful overnight. This morning, she noticed yellow drainage at the lesion site and the swelling has increased. The area of drainage is approximately 1 cm in diameter. Her upper lip, side of the face, and nose are all swollen. The examination and treatment areas need to be prepared before you bring her to the back office.

Discussion Questions:

1. What needs to be done before Shenya is brought back into the exam room?

2. Shenya is diagnosed with community-acquired MRSA (a highly contagious microorganism). What measures should you take to ensure there is no transfer of infection?

3. After Shenya’s examination, you will need to use an ultrasonic cleaner for sanitization. Describe how you would proceed and what source you would use if you had questions about the cleaner you are using.

P.S: Please answer all 3 questions individually. Thank you.

The comparative balance sheets for 2021 and 2020 are given below for Surmise Company. Net income for 2021 was $60 million. SURMISE COMPANY Comparative Balance Sheets December 31, 2021 and 2020 ($ in millions) 2021 2020 Assets Cash $ 60 $ 69 Accounts receivable 79 86 Less: Allowance for uncollectible accounts (14 ) (4 ) Prepaid expenses 9 6 Inventory 132 120 Long-term investment 74 45 Land 78 78 Buildings and equipment 320 220 Less: Accumulated depreciation (106 ) (88 ) Patent 14 17 $ 646 $ 549 Liabilities Accounts payable $ 8 $ 21 Accrued liabilities 1 9 Notes payable 28 0 Lease liability 92 0 Bonds payable 54 102 Shareholders’ Equity Common stock 59 50 Paid-in capital—excess of par 249 205 Retained earnings 155 162 $ 646 $ 549 Required: Prepare the statement of cash flows of Surmise Company for the year ended December 31, 2021. Use the indirect method to present cash flows from operating activities because you do not have sufficient information to use the direct method. You will need to make reasonable assumptions concerning the reasons for changes in some account balances. A spreadsheet or T-account analysis will be helpful. (Hint: The right to use a building was acquired with a seven-year lease agreement. Annual lease payments of $8 million are paid at January 1 of each year starting in 2021.) (Enter your answers in millions (i.e., 10,000,000 should be entered as 10). Amounts to be deducted should be indicated with a minus sign.)

SURMISE COMPANYStatement of Cash FlowsFor year ended December 31, 2021($ in millions)Cash flows from operating activities:Net incomeAdjustments for noncash effects:Changes in operating assets and liabilities:Net cash flows from operating activities$0Cash flows from investing activities:Net cash flows from investing activities0Cash flows from financing activities:Net cash flows from financing activities0Net increase (decrease) in cashCash balance, January 1Cash balance, December 31$0Noncash investing and financing activities:

The comparative balance sheets for 2021 and 2020 are given below for Surmise Company. Net income for 2021 was $78 million.

Required:
Prepare the statement of cash flows of Surmise Company for the year ended December 31, 2021. Use the indirect method to present cash flows from operating activities because you do not have sufficient information to use the direct method. You will need to make reasonable assumptions concerning the reasons for changes in some account balances. A spreadsheet or T-account analysis will be helpful. (Hint: The right to use a building was acquired with a seven-year lease agreement. Annual lease payments of $7 million are paid at January 1 of each year starting in 2021.) (Enter your answers in millions (i.e., 10,000,000 should be entered as 10). Amounts to be deducted should be indicated with a minus sign.)

You are the new accounting manager at the Barry Transport Company. Your CFO has asked you to provide input on the company's income tax position based on the following:

1)Pretax accounting income was $62 million and taxable income was $10 million for the year ended December 31, 2018.

2)The difference was due to three items:

A)Tax depreciation exceeds book depreciation by $50 million in 2018 for the business complex acquired that year. This amount is scheduled to be $80 million in 2019 and to reverse as ($80 million) and ($50 million) in 2020, and 2021, respectively.

B)Insurance of $10 million was paid in 2018 for 2019 coverage.

C)A $8 million loss contingency was accrued in 2018, to be paid in 2020.

3)No temporary differences existed at the beginning of 2018.

4)The tax rate is 40%.

Required:
1. Determine the amounts necessary to record income taxes for 2018 and prepare the appropriate journal entry.
2. Assume the enacted federal income tax law specifies that the tax rate will change from 40% to 35% in 2020. When scheduling the reversal of the depreciation difference, you were uncertain as to how to deal with the fact that the difference will continue to originate in 2019 before reversing the next two years. Upon consulting PricewaterhouseCoopers' Comperio database, you found:

.441 Depreciable and amortizable assets
Only the reversals of the temporary difference at the balance sheet date would be scheduled. Future originations are not considered in determining the reversal pattern of temporary differences for depreciable assets. FAS 109 [FASB ASC 740–Income Taxes] is silent as to how the balance sheet date temporary differences are deemed to reverse, but the FIFO pattern is intended.

You interpret that to mean that, when future taxable amounts are being scheduled, and a portion of a temporary difference has yet to originate, only the reversals of the temporary difference at the balance sheet date can be scheduled and multiplied by the tax rate that will be in effect when the difference reverses. Future originations (like the depreciation difference the second year) are not considered when determining the timing of the reversal. For the existing temporary difference, it is assumed that the difference will reverse the first year the difference begins reversing.

Determine the amounts necessary to record income taxes for 2018 and prepare the appropriate journal entry.

You are the new accounting manager at the Barry Transport Company. Your CFO has asked you to provide input on the company's income tax position based on the following:

Pretax accounting income was $75 million and taxable income was $13 million for the year ended December 31, 2018.

The difference was due to three items:

Tax depreciation exceeds book depreciation by $60 million in 2018 for the business complex acquired that year. This amount is scheduled to be $70 million in 2019 and to reverse as ($70 million) and ($60 million) in 2020, and 2021, respectively.

Insurance of $10 million was paid in 2018 for 2019 coverage.

A $8 million loss contingency was accrued in 2018, to be paid in 2020.

No temporary differences existed at the beginning of 2018.

The tax rate is 40%.

Required:
1. Determine the amounts necessary to record income taxes for 2018 and prepare the appropriate journal entry.
2. Assume the enacted federal income tax law specifies that the tax rate will change from 40% to 35% in 2020. When scheduling the reversal of the depreciation difference, you were uncertain as to how to deal with the fact that the difference will continue to originate in 2019 before reversing the next two years. Upon consulting PricewaterhouseCoopers' Comperio database, you found:

.441 Depreciable and amortizable assets
Only the reversals of the temporary difference at the balance sheet date would be scheduled. Future originations are not considered in determining the reversal pattern of temporary differences for depreciable assets. FAS 109 [FASB ASC 740–Income Taxes] is silent as to how the balance sheet date temporary differences are deemed to reverse, but the FIFO pattern is intended.

You interpret that to mean that, when future taxable amounts are being scheduled, and a portion of a temporary difference has yet to originate, only the reversals of the temporary difference at the balance sheet date can be scheduled and multiplied by the tax rate that will be in effect when the difference reverses. Future originations (like the depreciation difference the second year) are not considered when determining the timing of the reversal. For the existing temporary difference, it is assumed that the difference will reverse the first year the difference begins reversing.

Determine the amounts necessary to record income taxes for 2018 and prepare the appropriate journal entry.

You are the new accounting manager at the Barry Transport Company. Your CFO has asked you to provide input on the company's income tax position based on the following:

Pretax accounting income was $64 million and taxable income was $11 million for the year ended December 31, 2018.

The difference was due to three items:

Tax depreciation exceeds book depreciation by $50 million in 2018 for the business complex acquired that year. This amount is scheduled to be $70 million in 2019 and to reverse as ($60 million) and ($60 million) in 2020, and 2021, respectively.

Insurance of $9 million was paid in 2018 for 2019 coverage.

A $6 million loss contingency was accrued in 2018, to be paid in 2020.

No temporary differences existed at the beginning of 2018.

The tax rate is 40%.

Required:
1. Determine the amounts necessary to record income taxes for 2018 and prepare the appropriate journal entry.
2. Assume the enacted federal income tax law specifies that the tax rate will change from 40% to 35% in 2020. When scheduling the reversal of the depreciation difference, you were uncertain as to how to deal with the fact that the difference will continue to originate in 2019 before reversing the next two years. Upon consulting PricewaterhouseCoopers' Comperio database, you found:

.441 Depreciable and amortizable assets
Only the reversals of the temporary difference at the balance sheet date would be scheduled. Future originations are not considered in determining the reversal pattern of temporary differences for depreciable assets. FAS 109 [FASB ASC 740–Income Taxes] is silent as to how the balance sheet date temporary differences are deemed to reverse, but the FIFO pattern is intended.

You interpret that to mean that, when future taxable amounts are being scheduled, and a portion of a temporary difference has yet to originate, only the reversals of the temporary difference at the balance sheet date can be scheduled and multiplied by the tax rate that will be in effect when the difference reverses. Future originations (like the depreciation difference the second year) are not considered when determining the timing of the reversal. For the existing temporary difference, it is assumed that the difference will reverse the first year the difference begins reversing.

Determine the amounts necessary to record income taxes for 2018 and prepare the appropriate journal entry.

Bruno Corporation is authorized to 20,000 shares of 6%, $100 par, cumulative, convertible preferred stock and 100,000 shares, $10 par value common stock. Bruno has outstanding 6,000 shares of preferred stock and 40,000 shares of common stock on the December 31, 2019 balance sheet. The following are selected transactions that occurred in 2020:

1. Bruno Corporation owes shares of Naple Corporation. At December 31, 2019, the securities were carried in Bruno’s accounting records at the cost of $875,000 which equaled the fair value. On April 1, when the fair of the securities was $990,000, Bruno declared a property dividend whereby the Naple securities are to be distributed on April 29, 2020 to common stockholders of record on April 15, 2020.

2. Acquired land by issuing 640 shares of preferred stock and 1,000 shares of common stock. The preferred and common stock are selling at $113 and $36 per share, respectively. The land was appraised at $112,000.

3. Bruno issued 3,000 shares of common stock and 1,000 shares of preferred stock for a lump sum of $220,000. The market price of the common stock was $38 and the preferred, $118.

4. Preferred shareholders, who originally paid the corporation $110 per share their stock converted 5,000 shares into common stock. Each preferred share is convertible into 3 shares of common stock. The current market price of the preferred stock and the common stock is $120 and $41 per share, respectively.

5. The company purchased 4,000 shares of its common stock at a price of $40 per share to be held in treasury. The company uses the cost method.

6. The company sold 500 shares of its common treasury stock for $42 per share.

7. The company sold 1,000 shares of its common treasury stock for $37 per share.

8. The board of directors declared a cash dividend for the year. The preferred and common shares outstanding on this date were 2,640 and 41,500 respectively. The common stock dividend was $2 per share. When you make this entry show separate liabilities for the preferred and common stock dividends.

Instructions: Prepare the journal entries to record the above events. *****Be sure to show calculations and note any assumptions when completing the entry.