Mister Macchiato purchased a coffee drink machine on January? 1, 2016 for $ 38,000. Expected useful life is 10 years or 50,000 drinks. In 2016?, 10,000 drinks were? sold, and in 2017, 20,000 drinks were sold. Residual value is $3,000.

b. Assume that Mister Macchiato sold the equipment for $23,000 cash on July? 1, 2018. Assume that management has depreciated the equipment by using the? double-declining-balance method. Record Mister Macchiato?'s depreciation for 2018 and the sale of the equipment on July? 1, 2018.

Horizon Value of Free Cash Flows Current and projected free cash flows for Radell Global Operations are shown below.

Growth is expected to be constant after 2018, and the weighted average cost of capital is 11.55%. What is the horizon (continuing) value at 2019 if growth from 2018 remains constant? Round your answer to the nearest dollar. Round intermediate calculations to two decimal places.

a) Obtain the value of nominal GDP and real GDP in 2018 and 2019 for this economy.

b) Explain why looking just at the evolution of nominal GDP would make an analyst erroneously conclude that this economy has gone through a severe crisis/recession in 2015

Do some research to find the 2018 balance sheets for Macy’s and Nordstrom online. For each company, navigate to the company’s website, then scroll down to investors or investor relations, 2018 annual report, and locate their 2018 balance sheet.

Identify and describe the company’s three most significant accounts in the following areas:

• Current assets
• Long-term asset
• Current liabilities
• Long-term liabilities
• Stockholders’ equity

How do these two retailer’s balance sheets compare? Which company do you feel is healthier?

Herbert, Inc., acquired all of Rambis Company’s outstanding stock on January 1, 2017, for $654,000 in cash. Annual excess amortization of $11,400 results from this transaction. On the date of the takeover, Herbert reported retained earnings of $401,000, and Rambis reported a $207,000 balance. Herbert reported internal net income of $56,500 in 2017 and $73,100 in 2018 and declared $10,000 in dividends each year. Rambis reported net income of $22,700 in 2017 and $39,300 in 2018 and declared $5,000 in dividends each year.

a. Assume that Herbert’s internal net income figures above do not include any income from the subsidiary.

If the parent uses the equity method, what is the amount reported as consolidated retained earnings on December 31, 2018?

What would be the amount of consolidated retained earnings on December 31, 2018, if the parent had applied either the initial value or partial equity method for internal accounting purposes?

b. Under each of the following situations, what is the Investment in Rambis account balance on Herbert’s books on January 1, 2018?

The parent uses the equity method.

The parent uses the partial equity method.

The parent uses the initial value method.

c. Under each of the following situations, what is Entry *C on a 2018 consolidation worksheet?

The parent uses the equity method.

The parent uses the partial equity method.

The parent uses the initial value method.

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 $818,000 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 $632,000 book value but a fair value of $746,000.

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

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

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

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

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 $818,000 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 $632,000 book value but a fair value of $746,000.

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

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

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

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

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.