The following transactions pertain to Year 1, the first-year operations of Rooney Company. All inventory was started and completed during Year 1. Assume that all transactions are cash transactions.

1. Acquired $4,600 cash by issuing common stock.

2. Paid $680 for materials used to produce inventory.

3. Paid $1,800 to production workers.

4. Paid $848 rental fee for production equipment.

5. Paid $100 to administrative employees.

6. Paid $117 rental fee for administrative office equipment.

7. Produced 320 units of inventory of which 220 units were sold at a price of $13 each.

Required

Prepare an income statement and a balance sheet in accordance with GAAP.

The following transactions pertain to 2018, the first-year operations of Gibson Company. All inventory was started and completed during 2018. Assume that all transactions are cash transactions. Acquired $12,000 cash by issuing common stock. Paid $4,700 for materials used to produce inventory. Paid $2,400 to production workers. Paid $900 rental fee for production equipment. Paid $350 to administrative employees. Paid $400 rental fee for administrative office equipment. Produced 400 units of inventory of which 360 units were sold at a price of $25 each.

Required Prepare an income statement and a balance sheet in accordance with GAAP.

The following transactions pertain to 2018, the first-year operations of Solomon Company. All inventory was started and completed during 2018. Assume that all transactions are cash transactions.

Acquired $4,400 cash by issuing common stock.

Paid $710 for materials used to produce inventory.

Paid $1,910 to production workers.

Paid $882 rental fee for production equipment.

Paid $120 to administrative employees.

Paid $116 rental fee for administrative office equipment.

Produced 340 units of inventory of which 260 units were sold at a price of $13 each.

Required

Prepare an income statement and a balance sheet in accordance with GAAP.

Pesto Company possesses 80 percent of Salerno Company's outstanding voting stock. Pesto uses the initial value method to account for this investment. On January 1, 2014, Pesto sold 8 percent bonds payable with a $14.2 million face value (maturing in 20 years) on the open market at a premium of $990,000. On January 1, 2017, Salerno acquired 40 percent of these same bonds from an outside party at 96.6 percent of face value. Both companies use the straight-line method of amortization. For a 2018 consolidation, what adjustment should be made to Pesto's beginning Retained Earnings as a result of this bond acquisition?

I am wondering how to calculate the consolidation entry for accumulated depreciation in the consolidation of a less than wholly owned subsidiary acquired at more than book value with inventory transfers. Nothing I do seems to work, and I am getting really creative and confusing myself with all sorts of calculations. What is the proper formula for calculating consolidation entry for accumulated depreciation in this situation?

Pop Corporation acquired 70 percent of Soda Company's voting common shares on January 1, 20X2, for $112,700. At that date, the noncontrolling interest had a fair value of $48,300 and Soda reported $71,000 of common stock outstanding and retained earnings of $31,000. The differential is assigned to buildings and equipment, which had a fair value $28,000 higher than book value and a remaining 10-year life, and to patents, which had a fair value $31,000 higher than book value and a remaining life of five years at the date of the business combination. Trial balances for the companies as of December 31, 20X3, are as follows:

Pop Corporation Soda Company Item Debit Credit Debit Credit Cash & Accounts Receivable $16,400     $22,600      Inventory  166,000      36,000      Land  81,000      41,000      Buildings & Equipment  350,000      261,000      Investment in Soda Company  117,200             Cost of Goods Sold  187,000      80,800      Depreciation Expense  20,000      15,000      Interest Expense  17,000      6,200      Dividends Declared  31,000      16,000      Accumulated Depreciation    $141,000      $85,000  Accounts Payable     93,400       36,000  Bonds Payable     219,250       94,000  Bond Premium             1,600  Common Stock     121,000       71,000  Retained Earnings     128,900       61,000  Sales     261,000       130,000  Other Income     10,600          Income from Soda Company     10,450            $985,600 $985,600  $478,600  $478,600  

On December 31, 20X2, Soda purchased inventory for $31,500 and sold it to Pop for $45,000. Pop resold $30,000 of the inventory (i.e., $30,000 of the $45,000 acquired from Soda) during 20X3 and had the remaining balance in inventory at December 31, 20X3.

During 20X3, Soda sold inventory purchased for $56,000 to Pop for $80,000, and Pop resold all but $25,000 of its purchase. On March 10, 20X3, Pop sold inventory purchased for $15,000 to Soda for $30,000. Soda sold all but $7,800 of the inventory prior to December 31, 20X3. Assume Pop uses the fully adjusted equity method, that both companies use straight-line depreciation, and that no property, plant, and equipment has been purchased since the acquisition.

I need to be able to calculate the amount of accumulated depreciation for consolidated financial adjustment entries. I am aware that the transaction is Debited to Accumulated Depreciation and is Credited to Buildings and Equipment

Which of the following isincorrect?

I.American Depository Receipts (ADRs), are certificates issued by U.S. banks and traded in foreign markets that represent ownership in shares of a foreign company.

II.Repurchase agreements have high credit risk.

III.The face value and coupon of TIPS are adjusted in proportion to increases in the Consumer Price Index (CPI).

IV.Until 2018, corporations could exclude 40% of dividends arising from preferred stocks owned in domestic corporations.

A.III

B.I and II

C.I, II, and IV

D.II and IV

Parole Co. has 72,158 bonds outstanding that are selling at par value. The bonds yield 8.8 percent. The company also has 4.7 million shares of common stock outstanding. The stock has a beta of 1.3 and sells for $46.8 a share. The U.S. Treasury bill is yielding 3.8 percent and the market risk premium is 7.8 percent. Parole's tax rate is 30 percent. What is the firm's weighted average cost of capital? Enter answer in percents.

Use Excel and show formulas

World oil prices have been rapidly swinging over the last few years, in part because of the declining value of the U.S. dollar, changes in supply and demand, and OPEC’s attempts to manage output in order to maintain higher prices. (OPEC stands for the Organization of Petroleum Exporting Countries) As the president of an oil producing and exporting company in Alberta: Explain how you may use hedging to protect your company’s income. Share a recent publication with your fellow students and your instructor.

Just a short explanation will suffice

a. If permitted to choose between depreciating a cost over several years versus expensing it in a single year, which would you choose for your company? What factors might come into play in your recommendation?

b. Firms can reduce the taxes they pay in the U.S. by setting internal transfer prices so the "profit" is earned in countries with low tax rates or by selling themselves to an international firm. What are the ethical pros and cons of these practices?