Hitzu Co. sold a copier costing $7,500 with a two-year parts warranty to a customer on August 16, 2017, for $15,000 cash. Hitzu uses the perpetual inventory system. On November 22, 2018, the copier requires on-site repairs that are completed the same day. The repairs cost $132 for materials taken from the repair parts inventory. These are the only repairs required in 2018 for this copier. Based on experience, Hitzu expects to incur warranty costs equal to 5% of dollar sales. It records warranty expense with an adjusting entry at the end of each year.

1. How much warranty expense does the company report in 2017 for this copier?

2. How much is the estimated warranty liability for this copier as of December 31, 2017?

3. How much warranty expense does the company report in 2018 for this copier?

4. How much is the estimated warranty liability for this copier as of December 31, 2018?

5. Prepare journal entries to record (a) the copier’s sale; (b) the adjustment on December 31, 2017, to recognize the warranty expense; and (c) the repairs that occur in November 2018.

• 1

  Record the sale of a copier for $15,000 cash.

• 2

  Record the cost of goods sold of $7,500.

• 3

  Record the estimated warranty expense at 5% of the sales.

• 4

  Record the cost of $132 towards repair of copier on November 22, 2018.

On July 1, 2018, The Shepard Company purchased the following securities: 500 debentures (6% interest) of Tatum Incorporated for $520,200 690 common shares of Cook Ltd. for $167,400 4,000 common shares of Green Co. for $504,900 850 preferred shares of Frisbee Corp. for $76,500 2,000 common shares of Kelly, Inc. for $212,700 Shepard acquired 5% of Kelly’s outstanding shares, 10% of Frisbee’s preferred stock, and 8% of Cook’s common stock. Shepard’s investment in Tatum’s securities will mature in nine years. Shepard’s acquisition of 24% of Green’s common shares resulted in its owning the largest single concentration of stock held by any of Green’s stockholders. On December 1, 2018, Kelly issued a 2-for-1 stock split. At December 31, 2018, Shepard had the following data for the companies in which it had invested: Investee Company Results for 2018 Market Value of Total Total Shepard’s Investment Name Net Income Dividends Paid In Each Company Kelly $5,030,000 $920,000 $258,300 Frisbee 4,010,000 870,000 62,800 Green 1,240,000 250,000 516,500 Cook 2,690,000 430,000 172,500 Tatum 3,370,000 680,000 618,600 Each investee company paid its dividend or interest in cash on December 31, 2018. Record the journal entries that Shepard made with regard to its investments at December 31, 2018.

Background:

M & D Contractors has numerous employees who are paid on a weekly basis. Payroll information for the most recent week ending August 10, 2018 is given below:

Total Employee compensation                        $136,000

FICA social security tax rate                                   6.2%

FICA medicare tax rate                                         1.45%

Federal unemployment tax rate                              0.6%

State unemployment tax rate 5.4%

Federal income tax rate   15.0%

Of the total employee compensation, $136,000 is subject to the FICA taxes and $48,500 is subject to the unemployment taxes. Other expenses include health insurance costs of $60,000 (spilt 90% employer, 10% employee), charitable contributions made to the United Way of $12,500 (100% employee), and retirement benefits paid by the employer equal to 2% of the gross salaries.

Transactions:

08/10/2018

Recorded Salaries and Wages Expense accrual for the August 10 payroll. Employees will be paid on August 13. Prepare a compound entry for this transaction.

08/10/2018

Recorded payroll taxes for the August 10 payroll. Prepare a compound entry for this transaction.

08/10/2018

Recorded employee benefits expense for the August 10 payroll. Prepare a compound entry for this transaction.

08/13/2018

Paid employees from the August 10 payroll.

08/15/2018

Paid all withholdings and employer payroll taxes related to the August 10 payroll. Prepare a compound entry for this transaction.

Following are selected account balances from Penske Company and Stanza Corporation as of December 31, 2018:

Note: Parentheses indicate a credit balance.

On January 1, 2018, Penske acquired all of Stanza’s outstanding stock for $815,000 fair value in cash and common stock. Penske also paid $10,000 in stock issuance costs. At the date of acquisition copyrights (with a six-year remaining life) have a $498,000 book value but a fair value of $630,000.

1-As of December 31, 2018, what is the consolidated copyrights balance?

2-For the year ending December 31, 2018, what is consolidated net income?

3-As of December 31, 2018, what is the consolidated retained earnings balance?

4-As of December 31, 2018, what is the consolidated balance to be reported for goodwill?

Please show your calculations, thanks. I need all parts to be answered, thanks,

Fox Ltd has purchased a truck on 1 July 2018. The list price of the truck was $200,000 but Fox Ltd was invoiced and paid only $180,000. Fox Ltd did have to pay for an inspection costing $30,000 on 1 July 2018 before the truck could be used for the first time. In addition, the company purchased an annual insurance policy for the truck costing $24,000 (recorded using the asset approach). The truck will be depreciated using the reducing balance method at a rate of 10% per annum.

On 1 September 2018, the truck broke down and Fox Ltd spent $40,000 to get it back to working condition.

On 1 July 2019, Fox Ltd decided to replace the engine in the truck with a newer model costing $61,000 that uses considerably less petrol and makes the truck more powerful so that it could also haul a trailer. The 10% reducing balance rate of depreciation is still applied.

Required:

Prepare the general journal entries for the years ended 30 June 2019 and 30 June 2020 related to the truck, taking into account the information provided above. Narrations are not required. Justify your entries.

Tamarisk Gas Inc., an oil and gas company had the following information on its financial statements for the fiscal years ended December 31. All figures are in millions of dollars.

A)

Calculate Tamarisk’s (Round answers to 1 decimal place, e.g. 52.7 or 52.7%.)

B)

Determine from the results obtained in part (a) if Tamarisk’s

The information necessary for preparing the 2018 year-end adjusting entries for Vito’s Pizza Parlor appears below. Vito’s fiscal year-end is December 31.

1. On July 1, 2018, purchased $13,500 of IBM Corporation bonds at face value. The bonds pay interest twice a year on January 1 and July 1. The annual interest rate is 12%.
2. Vito’s depreciable equipment has a cost of $40,200, a six-year life, and no salvage value. The equipment was purchased in 2016. The straight-line depreciation method is used.
3. On November 1, 2018, the bar area was leased to Jack Donaldson for one year. Vito’s received $8,100 representing the first six months’ rent and credited deferred rent revenue.
4. On April 1, 2018, the company paid $3,240 for a two-year fire and liability insurance policy and debited insurance expense.
5. On October 1, 2018, the company borrowed $27,000 from a local bank and signed a note. Principal and interest at 12% will be paid on September 30, 2019.
6. At year-end, there is a $2,150 debit balance in the supplies (asset) account. Only $770 of supplies remain on hand.

Required:

1. Prepare the necessary adjusting journal entries at December 31, 2018.
2. Determine the amount by which net income would be misstated if Vito's failed to record these adjusting entries. (Ignore income tax expense.)

Irwin, Inc., constructed a machine at a total cost of $57 million. Construction was completed at the end of 2014 and the machine was placed in service at the beginning of 2015. The machine was being depreciated over a 10-year life using the sum-of-the-years’-digits method. The residual value is expected to be $2 million. At the beginning of 2018, Irwin decided to change to the straight-line method.

Ignoring income taxes, prepare the journal entry relating to the machine for 2018. Irwin, Inc., constructed a machine at a total cost of $57 million. Construction was completed at the end of 2014 and the machine was placed in service at the beginning of 2015. The machine was being depreciated over a 10-year life using the sum-of-the-years’-digits method. The residual value is expected to be $2 million. At the beginning of 2018, Irwin decided to change to the straight-line method.

Ignoring income taxes, prepare the journal entry relating to the machine for 2018.

Irwin, Inc., constructed a machine at a total cost of $41 million. Construction was completed at the end of 2014 and the machine was placed in service at the beginning of 2015. The machine was being depreciated over a 10-year life using the straight-line method. The residual value is expected to be $3 million. At the beginning of 2018, Irwin decided to change to the sum-of-the-years’-digits method.

Ignoring income taxes, prepare the journal entry relating to the machine for 2018.

During 2018 and 2019, Kale Co. completed the following transactions relating to its bond issue. The company’s fiscal year ends on December 31.

2018

2019

Required

1. When the bonds were issued, was the market rate of interest more or less than the stated rate of interest? If the bonds had sold at face value, what amount of cash would Kale Co. have received?
2. Prepare the liabilities section of the balance sheet at December 31, 2018 and 2019.
3. Determine the amount of interest expense Kale would report on the income statements for 2018 and 2019.
4. Determine the amount of interest Kale would pay to the bondholders in 2018 and 2019.