Stock Investment Transactions, Equity Method and Available-for-Sale Securities

Glacier Products Inc. is a wholesaler of rock climbing gear. The company began operations on January 1, Year 1. The following transactions relate to securities acquired by Glacier Products Inc., which has a fiscal year ending on December 31:

1. Year 1
   Jan. 18.	Purchased 6,300 shares of Malmo Inc. as an available-for-sale investment at $48 per share, including the brokerage commission.
   July 22.	A cash dividend of $0.50 per share was received on the Malmo stock.
   Oct. 5.	Sold 2,800 shares of Malmo Inc. stock at $53 per share less a brokerage commission of $40.
   Dec. 18.	Received a regular cash dividend of $0.50 per share on Malmo Inc. stock.
   Dec. 31	Malmo Inc. is classified as an available-for-sale investment and is adjusted to a fair value of $45 per share. Use the valuation allowance for available-for-sale investments account in making the adjustment.
   Year 2
   Jan. 25.	Purchased an influential interest in Helsi Co. for $730,000 by purchasing 48,000 shares directly from the estate of the founder of Helsi. There are 120,000 shares of Helsi Co. stock outstanding.
   July 16.	Received a cash dividend of $0.60 per share on Malmo Inc. stock.
   Dec. 16.	Received a cash dividend of $0.60 per share plus an extra dividend of $0.15 per share on Malmo Inc. stock.
   Dec. 31	Received $22,000 of cash dividends on Helsi Co. stock. Helsi Co. reported net income of $90,000 in Year 2. Glacier Products Inc. uses the equity method of accounting for its investment in Helsi Co.
   Dec. 31	Malmo Inc. is classified as an available-for-sale investment and is adjusted to a fair value of $51 per share. Use the valuation allowance for available-for-sale investments account in making the adjustment for the increase in fair value from $45 to $51 per share.

   Required:

   1. Journalize the entries to record the preceding transactions. For a compound transaction, if an amount box does not require an entry, leave it blank. In your computations, round per share amounts to two decimal places.

   Date	Description	Debit	Credit
   Year 1
   Jan. 18.
   July 22.
   Oct. 5.
   Dec. 18.
   Dec. 31
   Year 2
   Jan. 25.
   July 16.
   Dec. 16.
   Dec. 31-Dividends
   Dec. 31-Income
   Dec. 31-Valuation

   2. Prepare the investment-related asset and stockholders’ equity balance sheet presentation for Glacier Products Inc. on December 31, Year 2, assuming that the Retained Earnings balance on December 31, Year 2, is $533,000.

   Glacier Products, Inc. Balance Sheet (selected items) December 31, Year 2
   Current Assets:
   Investments:
   Stockholders' Equity:

1. Stock Investment Transactions, Equity Method and Available-for-Sale Securities

   Glacier Products Inc. is a wholesaler of rock climbing gear. The company began operations on January 1, Year 1. The following transactions relate to securities acquired by Glacier Products Inc., which has a fiscal year ending on December 31:

   Year 1
   Jan. 18.	Purchased 7,900 shares of Malmo Inc. as an available-for-sale investment at $36 per share, including the brokerage commission.
   July 22.	A cash dividend of $0.45 per share was received on the Malmo stock.
   Oct. 5.	Sold 2,400 shares of Malmo Inc. stock at $39 per share less a brokerage commission of $50.
   Dec. 18.	Received a regular cash dividend of $0.45 per share on Malmo Inc. stock.
   Dec. 31	Malmo Inc. is classified as an available-for-sale investment and is adjusted to a fair value of $33 per share. Use the valuation allowance for available-for-sale investments account in making the adjustment.
   Year 2
   Jan. 25.	Purchased an influential interest in Helsi Co. for $770,000 by purchasing 38,500 shares directly from the estate of the founder of Helsi. There are 110,000 shares of Helsi Co. stock outstanding.
   July 16.	Received a cash dividend of $0.55 per share on Malmo Inc. stock.
   Dec. 16.	Received a cash dividend of $0.55 per share plus an extra dividend of $0.15 per share on Malmo Inc. stock.
   Dec. 31	Received $23,000 of cash dividends on Helsi Co. stock. Helsi Co. reported net income of $95,000 in Year 2. Glacier Products Inc. uses the equity method of accounting for its investment in Helsi Co.
   Dec. 31	Malmo Inc. is classified as an available-for-sale investment and is adjusted to a fair value of $40 per share. Use the valuation allowance for available-for-sale investments account in making the adjustment for the increase in fair value from $33 to $40 per share.

   Required:

   1. Journalize the entries to record the preceding transactions. For a compound transaction, if an amount box does not require an entry, leave it blank. In your computations, round per share amounts to two decimal places.

   Date	Description	Debit	Credit
   Year 1
   Jan. 18.
   July 22.
   Oct. 5.
   Dec. 18.
   Dec. 31
   Year 2
   Jan. 25.
   July 16.
   Dec. 16.
   Dec. 31-Dividends
   Dec. 31-Income
   Dec. 31-Valuation

   2. Prepare the investment-related asset and stockholders’ equity balance sheet presentation for Glacier Products Inc. on December 31, Year 2, assuming that the Retained Earnings balance on December 31, Year 2, is $562,000.

   Glacier Products, Inc. Balance Sheet (selected items) December 31, Year 2
   Current Assets:
   Investments:
   Stockholders' Equity:

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Stock Investment Transactions, Equity Method and Available-for-Sale Securities

Glacier Products Inc. is a wholesaler of rock climbing gear. The company began operations on January 1, Year 1. The following transactions relate to securities acquired by Glacier Products Inc., which has a fiscal year ending on December 31:

Required:

1. Journalize the entries to record the preceding transactions. For a compound transaction, if an amount box does not require an entry, leave it blank. In your computations, round per share amounts to two decimal places.

2. Prepare the investment-related asset and stockholders’ equity balance sheet presentation for Glacier Products Inc. on December 31, Year 2, assuming that the Retained Earnings balance on December 31, Year 2, is $431,000.

On January 1, 2018, a machine was purchased for $122,500. The machine has an estimated salvage value of $7,300 and an estimated useful life of 5 years. The machine can operate for 120,000 hours before it needs to be replaced. The company closed its books on December 31 and operates the machine as follows: 2018, 24,000 hrs; 2019, 30,000 hrs; 2020, 18,000 hrs; 2021, 36,000 hrs; and 2022, 12,000 hrs.

Compute the annual depreciation charges over the machine’s life assuming a December 31 year-end for each of the following depreciation methods. (Round answers to 0 decimal places, e.g. 45,892.)

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Assume a fiscal year-end of September 30. Compute the annual depreciation charges over the asset’s life applying each of the following methods. (Round answers to 0 decimal places, e.g. 45,892.)

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).

On January 1, 2018, a machine was purchased for $102,500. The machine has an estimated salvage value of $7,580 and an estimated useful life of 5 years. The machine can operate for 113,000 hours before it needs to be replaced. The company closed its books on December 31 and operates the machine as follows: 2018, 22,600 hrs; 2019, 28,250 hrs; 2020, 16,950 hrs; 2021, 33,900 hrs; and 2022, 11,300 hrs.

Compute the annual depreciation charges over the machine’s life assuming a December 31 year-end for each of the following depreciation methods. (Round answers to 0 decimal places, e.g. 45,892.)

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Assume a fiscal year-end of September 30. Compute the annual depreciation charges over the asset’s life applying each of the following methods. (Round answers to 0 decimal places, e.g. 45,892.)

Brady Construction Company contracted to build an apartment complex for a price of $6,400,000. Construction began in 2018 and was completed in 2020. The following is a series of independent situations, numbered 1 through 6, involving differing costs for the project. All costs are stated in thousands of dollars.

Brady Construction Company contracted to build an apartment complex for a price of $6,400,000. Construction began in 2018 and was completed in 2020. The following is a series of independent situations, numbered 1 through 6, involving differing costs for the project. All costs are stated in thousands of dollars.

Task 2 requires you to accurately complete the activities described in each question. Complete the answers in your own Excel document, putting your name at the top along with the Task and Task letter appropriate to each answer and submit below for your Assessor.

a) Make the Journal entry to record the sale of merchandise that cost $6,000, for $10,000 cash.

b) Record journal entries for the following transactions.

• Purchased office furniture for $3,200, agreed to pay the entire amount in 2 years
• Purchased computers for the office for $1,200 cash
• Paid for rent for the next 3 months, $600
• Purchased office supplies for $75 cash
• Purchased inventory on credit for $15,000
• Paid $11,000 to the supplier for the inventory purchased in previous bullet point
• Hired employees who will begin work in 2 weeks.

c) Record journal entries for the following transactions. After recording the transactions, prepare a ‘T-account’ and balance the accounts payable account.

• Purchased manufacturing equipment for $20,000 cash
• Purchased office furniture on credit, $2,700
• Paid for insurance for the next 6 months, $2,200
• Purchased inventory on credit, $15,000
• Purchased supplies for cash, $100
• Paid the supplier $14,000 for inventory purchased on credit
• Invested $3,000 in a short-term investment.

d) A company had the following transactions during the first month of operations. Record journal entries for these transactions. Determine the balance in the cash account at the end of the first month.

• Purchased inventory to be sold to customers, $45,000 on credit
• Rented warehouse space, $6,000 was paid for this month
• Sold $5,000 of inventory on credit (you have not been paid yet), sales price of $7,500
• Acquired office furniture for $3,000 cash
• Paid $12,000 to employees who worked this month
• Acquired manufacturing equipment costing $39,000, paid cash
• Paid $700 for cleaning
• Received a $100 utility bill for this month
• Collected $7,500 owed from customers.

e) A company had the following transactions during the first month of operations. Record journal entries for each transaction. Determine the balance in the cash account at the end of the first month.

• Borrowed $150,000 cash from the bank. $30,000 is to be repaid at the end of each year for the next 5 years
• Purchased inventory; $30,000 to be paid in 30 days
• Rented warehouse space; $2,000 was paid for this month
• Paid $300 for advertising to be run equally over this month and the next 2 months
• Purchased computer equipment; paid $3,000 and put $2,000 on credit
• Employees worked and earned $3,900; employees were paid $3,300
• Sold $15,000 of inventory on credit for a sales price of $25,000
• Purchased $500 of office supplies on credit, not yet used
• Acquired manufacturing equipment costing $55,000; paid ½ up front and agreed to make monthly payments for the balance for 3 years
• Paid $25,000 on accounts owed
• Collected $10,000 from customers for amounts owed
• Received $1,200 from a customer for services to be performed next month.

If you were going to open up a new US company that produces vaccines, which country would you base your international headquarters in, and why? Think through logistics and geopolitical conflicts. Please write at least 250 words