Crane Landscaping began construction of a new plant on December 1, 2020. On this date, the company purchased a parcel of land for $145,200 in cash. In addition, it paid $2,400 in surveying costs and $3,840 for a title insurance policy. An old dwelling on the premises was demolished at a cost of $3,360, with $720 being received from the sale of materials.

Architectural plans were also formalized on December 1, 2020, when the architect was paid $31,200. The necessary building permits costing $3,360 were obtained from the city and paid for on December 1 as well. The excavation work began during the first week in December with payments made to the contractor in 2021 as follows.

The building was completed on July 1, 2021.

To finance construction of this plant, Crane borrowed $612,000 from the bank on December 1, 2020. Crane had no other borrowings. The $612,000 was a 10-year loan bearing interest at 8%.

Compute the balance in each of the following accounts at December 31, 2020, and December 31, 2021. (Round answers to 0 decimal places, e.g. 5,275.)

Grape Inc. had the following balance sheet at December 31, 2019:

Grape INC. BALANCE SHEET DECEMBER 31, 2019

Cash $ 31,000

Accounts payable $ 61,000 x

Accounts receivable 56,800 x

Notes payable (long-term) 76,000

Investments 86,000 x

Common stock 200,000

Plant assets (net) 138,500

Retained earnings 41,300

Land 66,000

Total assets and Total Liabilities and Stockholders' Equity $378,300 $378,300

During 2020, the following occurred:

1. Grape liquidated its available-for-sale investment portfolio at a gain of $15,000. x

2. A tract of land was purchased for $61,000 cash. x

3. An additional $15,200 in common stock was issued at par. x

4. Dividends totaling $41,000 were declared and paid to stockholders. x

5. Net income for 2020 was $46,000x, including $8,000x in depreciation expense.

6. Land was purchased through the issuance of $195,000x in additional notes payable.

7. At December 31, 2020, Cash was $68,000x, Accounts Receivable was $84,000x, and Accounts Payable was $72,000x

Instructions (a) Prepare the balance sheet as it would appear at December 31, 2020 (b) Prepare a statement of cash flows for the year 2020 for Grape. . Prepare all in good form.

In 2018, Simon Corporation began selling a new line of toasters that carry a three-year warranty against defects. Based upon past experiences with similar products, the estimated warranty costs related to dollar sales are as follows:

                  First year after sale                           2%

                  Second year after sale                       4%

                  Third year after sale                          6%

Sales and actual warranty expenditures for 2018, 2019 and 2020 are presented below:

Instructions:

1. Prepare the journal entries to record the above transactions for the third fiscal year only (the one ending December 31, 2020), including:

1. the initial journal entry to record the sales. Assume all sales are “on account.”
2. The Warranty Expenditures for the year, and
3. The year end adjustment to record the warranty expense.

Assume the company uses the “expense warranty approach” for recording estimated warranty liabilities (like the assignment you handed it). Don’t forget the narratives! And Show Calculations.

2. Calculate the amount that Simon should report as warranty expense on its 2020 income statement.

3. What will be the balance in the “Estimated Warranty Liability” account as at December 31^st 2020? Consider using a “T” account to prove your answer (not mandatory).

Sofie Company buys stock in Nut Corporation in cash on January 1, 2020, and reports the investment as having no significant influence.

The percentage of investment 15% Amount paid $6,000,000

On January 1, 2022, Sofie Company makes the following additional investment in Nut Corporation and changes to the equity method of reporting for this investment.

The additional percentage of investment 25% Additional amount paid $15,000,000

Fair value of the 15% investment is as follows: 12/31/2020 $6,200,000 12/31/2021 $6,450.000

Nut Corporation reported the following amounts for the years;

Net income 2020- $150,000 2021- $200,000 2022- $250,000

Cash dividend(paid at year-end) 2020- $50,000 2021- $80,000 2022- $100,000

Additional information: Nut Corporation reported no comprehensive income and any basis difference is attributed to goodwill.

A. Prepare all the journal entries that Sofie Company would records for the investment in Nut Corporation for 2020,.2021, and 2022. Journal entries should be set up in good form.

You need to provide dates, use appropriate account titles, and include an explanation below each journal entry.

B. Develop a table showing the calculation of what the amount Sofie Corporation will report on the balance sheet for the investment in Nut Corporation on December 31, 2022.

Exercise 23-12

Condensed financial data of Vaughn Company for 2020 and 2019 are presented below.

Additional information:

During the year, $70 of common stock was issued in exchange for plant assets. No plant assets were sold in 2020.

Prepare a statement of cash flows using the direct method.

Grouper Landscaping began construction of a new plant on December 1, 2020. On this date, the company purchased a parcel of land for $146,400 in cash. In addition, it paid $2,880 in surveying costs and $4,560 for a title insurance policy. An old dwelling on the premises was demolished at a cost of $3,360, with $960 being received from the sale of materials.

Architectural plans were also formalized on December 1, 2020, when the architect was paid $36,000. The necessary building permits costing $3,360 were obtained from the city and paid for on December 1 as well. The excavation work began during the first week in December with payments made to the contractor in 2021 as follows.

The building was completed on July 1, 2021.

To finance construction of this plant, Grouper borrowed $608,400 from the bank on December 1, 2020. Grouper had no other borrowings. The $608,400 was a 10-year loan bearing interest at 8%.

Compute the balance in each of the following accounts at December 31, 2020, and December 31, 2021. (Round answers to 0 decimal places, e.g. 5,275.)

On December 31, 2018, Isiah Company, a financing institution lent P4,000,000 to Psalms Corp. due 3 years after. The loan is supported by an 8% note receivable. Transaction costs incurred to originate the loan amounted to P248,000. P374,000 was chargeable to Psalms as origination fees. Interests on the loan are collectible at the end of each year. The yield rate on the loan is 9.25%.

Isiah was able to collect interest as it became due at the end of 2019. During 2020, however, due to Psalms Corporation’s business deterioration and due to political instability and faltering global economy, the company was not able to collect amounts due at the end 2020. After reviewing all available evidence at December 31, 2020, Isiah Company determined that it was probable that Psalms would pay back only P3,400,000 collectible as follows:

As of December 31, 2020, the prevailing rate of interest for all debt instruments is 14%.

Questions: 1-A.

1. What is the impairment loss to be recognized in the 2020 statement of comprehensive income? .

2. What is the correct carrying value of the loans receivable as of December 31, 2022?

write your solution and explanation, please. thanks.

Sha Corporation produces milk on its farms located in Zamboanga. At December 31, 2019, the herd of cows are as follows:

4,000 cows (3 years old), all purchased in prior years

2,000 heifers (2 years old), all purchased in prior years

1,000 heifers (1 year old) purchased on December 31, 2011

The unit vales less estimated point of sale costs were as follows:

      1 year old animal at December 31, 2019 ₱35,000

      2 year old animal at December 31, 2019                    45,000

      3 year old animal at December 31, 2019 54,000

      1 year old animal at December 31, 2020                    38,000

      2 year old animal at December 31, 2020                    47,500

      3 year old animal at December 31, 2020                    57,000

      4 year old animal at December 31, 2020                    60,000

Required:

1. Compute for the change in fair value less estimated point of sale cost of the biological assets dues to;
   1. Price change
   2. Physical change
2. Prepare schedule showing the reconciliation of beginning balances to ending balances of biological assets and the changes during the period due to price purchase and change in fair value
3. Give the journal entries for 2020 to reflect the foregoing.

Exercise 23-12

Condensed financial data of Sandhill Company for 2020 and 2019 are presented below.

Additional information:

During the year, $70 of common stock was issued in exchange for plant assets. No plant assets were sold in 2020.

Prepare a statement of cash flows using the direct method.

Kailee’s Cookery Pty Ltd sells ovens and access to online cooking classes. On 1 May 2020, Kailee’s Cookery Pty Ltd signs an agreement with Chef School to provide 15 weekly online cooking classes and five ovens. The contract price amounted to $66,000 (GST inclusive), on credit terms n/30 for the ovens and n/60 for the cooking classes. This amount also includes one free service of the oven to be performed six months after the delivery of the ovens to Chef School.

The stand-alone price for the 15 weekly online cooking classes is $33,000 (GST inclusive). The cooking classes will start on 18 May 2020.

The stand-alone price of the ovens is $55,000 (GST inclusive). The six-month service fee for the ovens is usually $1,100 (GST inclusive).

The ovens were delivered on 18 May 2020.

Chef School paid the full amount on 20 May 2020 for the ovens.

By 30 June 2020, 7 online cooking classes were delivered. Chef School has yet to make any payment for the online cooking classes.

Required:

With reference to AASB 15 Revenue from Contracts with Customers, apply the five-step process for revenue recognition in regards to the contract with Chef School. List each of the five steps and show any calculations