On January 1, 2020, the company signed on a lease contract which qualifies as finance lease. It calls for annual payments of $52,538 at 1/1/2020 for the first payments, and 12/31 of each year thereafter over a six-year lease term. The present value of total lease payment is $280,000 under 5% annual interest rate. Make journal entries for each of following dates, including any interest or amortization expenses.

January 1, 2020, signs the lease contract and makes the first payment of $52,538:

December 31, 2020, fiscal year-end, the second payment of $52,538:

December 31, 2021, fiscal year-end, the third payment of $52,538:

The following is selected financial information for Qualmart, Inc. for its year ending January 31, 2021:

Prepare a statement of stockholders' equity for 2021 for Qualmart.

On March 1, 2020, Crane Company sold goods to Goosen Inc. for $702,000 in exchange for a 5-year, zero-interest-bearing note in the face amount of $1,182,911 (an inputed rate of 11%). The goods have an inventory cost on Crane’s books of $395,000.

(a) Prepare the journal entries for Crane on March 1, 2020. (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.)

(b) Prepare the journal entries for Crane on December 31, 2020.

On January 1, 2020, Blue Animation sold a truck to Peete Finance for $40,000 and immediately leased it back. The truck was carried on Blue’s books at $35,000. The term of the lease is 5 years, there is no bargain purchase option, and title does not transfer to Blue at lease-end. The lease requires 5 equal rental payments of $9,239 at the end of each year (first payment on January 1, 2018). The appropriate rate of interest is 5%, the truck has a useful life of 5 years, with no expected residual value at the end of the lease term.

Prepare Blue’s 2020 journal entries.

1) Cullumber Corporation had 2020 net income of $1,407,000. During 2020, Cullumber has not declared or paid any dividend on 93,000 non-cumulative preferred shares. Cullumber also had 210,000 common shares outstanding during the year.

Calculate Cullumber’s 2020 earnings per share.

2) Sandhill Corporation reported net income of $347,760 in 2020 and had 245,000 common shares outstanding throughout the year. Also outstanding all year were 21,000 (written) options to purchase common shares at $10 per share. The average market price for the common shares during the year was $15 per share.

Calculate the diluted earnings per share

Assume that in the first quarter of 2020, real GDP and potential GDP were both $20 trillion and the unemployment rate was 3.5%. Assume that potential GDP is still $20 trillion in the second of 2020 but that actual real GDP is $19 trillion.

a. What is the annualized growth rate of real GDP between the first and second quarters?

b. What is the output gap in the second quarter of 2020?

c.   According to Okun’s law, what will be the unemployment rate in the second quarter of 2020?

d. Assume that in the second quarter consumption is equal $13 trillion, net exports are equal to -$0.5 trillion, and government purchases and planned investment are both equal to $3 trillion. What is the amount of inventory investment?

Lessee Company enters into a 6-year finance lease of non-specialized equipment with Lessor Company on January 1, 2020. Lessee has agreed to pay $44,800 annually beginning immediately on January 1, 2020. The lease includes an option for the lessee to purchase the equipment at $4,800, which is $3,200 below the estimated fair value at lease end. Lessee Company is reasonably certain that it will exercise the purchase option. The economic life of the asset is 7 years. The lessee’s incremental borrowing rate is 7% and the lessor’s implicit rate is not readily determinable by the lessee. Record Lessee Company’s journal entries on (a) January 1, 2020, and (b) December 31, 2020, assuming that the lease is properly classified as a finance lease.

Blossom Company sells goods that cost $325,000 to Pina Colada Company for $415,000 on January 2, 2020. The sales price includes an installation fee, which is valued at $44,200. The fair value of the goods is $380,800. The goods were delivered on March 1, 2020. Installation is considered a separate performance obligation and was completed on June 18, 2020. Under the terms of the contract, Pina Colada Company pays Blossom $275,000 upon delivery of the goods and the balance at the completion of the installation.

Using the five-step process for revenue recognition, determine when and how much revenue would be recognized by Blossom. Assume IFRS is followed.

Prepare the journal entries for Blossom on January 2, March 1, and June 18, 2020.