1)    Fill in the blanks to complete Whole Food’s Income Statement ($ millions).

2) )   Fill in the blanks to complete Whole Food’s Balance Sheet ($ millions).

3) Whole Foods reports the following balances in its stockholders’ equity accounts. Fill in the blanks.

The following transactions affected Alpenrose Corporation’s merchandise inventory during the month of March 2016: March 1 — Inventory on hand — 3,000 units; cost $8.00 each. March 8 — Purchased 5,000 units for $8.20 each on account. March 14 — Sold 4,000 units for $14.00 each on account. March 18 — Purchased 6,000 units for $8.40 each on account. March 25 — Sold 2,000 units for $14.00 each on account. March 31 — Inventory on hand — 8,000 units.

Alpenrose uses periodic inventory system. Determine the inventory balance Alpenrose would report on its March 31, 2016, balance sheet and the cost of goods sold it would report on its March 2016, income statement using each of the following cost flow methods:

         1.       First-in, first-out (FIFO)

         2.       Last-in, first-out (LIFO)

         3.       Average cost (round the average cost per unit to the nearest dollar)

Select the 10 financial ratios for a 3-year period then compare six (6) common ratios between two other groups.  

1) Based on these ratios, which is the stronger company and why?

The following data relates to a patent owned by Sophia Cosmetology Group: Cost $2,400,000 Carrying amount 1,700,000 Expected future net cash flow 1,500,000 Fair value 1,400,000)

(a) Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2016.

(b) Using the same assumption as part (a) above, prepare the journal entry to record amortization expense for 2017 assuming the asset has a remaining useful life of 3 years at the beginning of 2017.

(c) Using the same assumption as part (a) above, prepare the journal entry (if any) at December 31, 2017, assuming the fair value of the asset has increased to $1,900,000.

(d) Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2016, assuming Sophia ceased using the patent at the end of 2016 and intends to dispose of the patent in the coming year. Sophia expects to incur a $10,000 cost of disposal.

C 18-6

Interperiod Tax Allocation

LO 18.2 AICPA Adapted Chris Green, CPA, is auditing Rayne Co.'s 2016 financial statements. For the year ended December 31, 2016, Rayne is applying GAAP for income taxes. Rayne's controller, Dunn, has prepared a schedule of all differences between financial statement and income tax return income. Dunn believes that as a result of pending legislation, the enacted tax rate at December 31, 2016, will be increased for 2017. Dunn is uncertain which differences to include and which rates to apply in computing deferred taxes. Dunn has requested an overview of GAAP from Green.

Required:

1. Prepare a brief memo to Dunn from Green that identifies the objectives of accounting for income taxes, defines temporary differences, explains how to measure deferred tax assets and liabilities, and explains how to measure deferred income tax expense or benefit.

Minta Corporation is a leading manufacturer of sports apparel, shoes, and equipment. The company’s 2017 financial statements contain the following information ($ in millions):

A note disclosed that the allowance for uncollectible accounts had a balance of $37 million and $61 million at the end of 2017 and 2016, respectively. Bad debt expense for 2017 was $58 million. Assume that all sales are made on a credit basis.

Required:
1. What is the amount of gross (total) accounts receivable due from customers at the end of 2017 and 2016?
2. What is the amount of bad debt write-offs during 2017?
3. Analyze changes in the gross accounts receivable account to calculate the amount of cash received from customers during 2017.
4. Analyze changes in net accounts receivable to calculate the amount of cash received from customers during 2017.
  

Please full the table in (b) The following information pertaining Juniper Corporation is available for the year ended 2015,its first year of operations: :

Pretax financial income, $200,000.

Excess of tax deprecation over book depreciation equals $36,000 in 2015 (future taxable). This temporary difference (i.e., $36,000 depreciation expense) will be reversed as follows: $23,000 in 2016 and $13,000 in 2017.

The tax rates of 2015, 2016 and 2017 are 30%, 25%, and 25%, respectively.  

Instructions:

Compute Juniper’s 2015 taxable income.

Pretax accounting income                               $ 200,000

Less: additional accelerated

depr. deducted for I/T                                     ($36,000)

Taxable Income – 2015                                  $ 164,000

Prepare a schedule to show the derivation of the deferred tax liability at the end of 2015.

Minta Corporation is a leading manufacturer of sports apparel, shoes, and equipment. The company’s 2017 financial statements contain the following information ($ in millions):

A note disclosed that the allowance for uncollectible accounts had a balance of $30 million and $54 million at the end of 2017 and 2016, respectively. Bad debt expense for 2017 was $51 million. Assume that all sales are made on a credit basis.

Required:
1. What is the amount of gross (total) accounts receivable due from customers at the end of 2017 and 2016?
2. What is the amount of bad debt write-offs during 2017?
3. Analyze changes in the gross accounts receivable account to calculate the amount of cash received from customers during 2017.
4. Analyze changes in net accounts receivable to calculate the amount of cash received from customers during 2017.
  

Depreciation and Rate of Return

Burrell Company purchased a machine for $19000 on January 2, 2016. The machine has an estimated service life of 5 years and a zero estimated residual value. The asset earns income before depreciation and income taxes of $9500 each year. The tax rate is 35%.

Required:

Compute the rate of return earned (on the average net asset value) by the company each year of the asset's life under the straight-line and the double-declining-balance depreciation methods. Assume that the machine is the company's only asset.

Straight-line method. Do not round intermediate calculations. Round final answer to two decimal places.

2016: ____%

2017: ____%

2018: ____%

2019: ____%

2020: ____%

Double-declining-balance depreciation method. Do not round intermediate calculations. Round final answer to two decimal places.

2016: ____%

2017: ____%

2018: ____%

2019: ____%

2020: ____%

***Please show all work and calculations****