On January 1, 2020, Crane Corp., which uses IFRS, signs a 10-year, non-cancellable lease agreement to lease a specialty lathe from Liu Inc. The following information concerns the lease agreement.

calculate the amount of the right-of-use asset and lease liability and prepare the initial entry to reflect the signing of the lease agreement

Prepare the journal entries on Crane Corp.’s books to record the payments and expenses related to this lease for the years 2020 and 2021 as well as any adjusting journal entries at its fiscal year ends of December 31, 2020 and 2021. Crane does not use reversing entries. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round answers to 2 decimal places, e.g. 5,275.25.)

Ayayai Inc. began operations in January 2018 and reported the following results for each of its 3 years of operations. 2018 $246,000 net loss 2019 $38,000 net loss 2020 $835,000 net income At December 31, 2020, Ayayai Inc. capital accounts were as follows. 8% cumulative preferred stock, par value $100; authorized, issued, and outstanding 5,400 shares $540,000 Common stock, par value $1.00; authorized 1,000,000 shares; issued and outstanding 693,000 shares $693,000 Ayayai Inc. has never paid a cash or stock dividend. There has been no change in the capital accounts since Ayayai began operations. The state law permits dividends only from retained earnings.
(a) Compute the book value of the common stock at December 31, 2020. (Round answers to 2 decimal places, e.g. $38.50.) Book value per share $enter a dollar amount of the book value of the common stock at December 31, 2020 rounded to 2 decimal places.
(b) Compute the book value of the common stock at December 31, 2020, assuming that the preferred stock has a liquidating value of $105 per share. (Round answers to 2 decimal places, e.g. $38.50.) Book value per share $enter the book value per share in dollars rounded to 2 decimal places

Barton Enterprises purchased equipment on January 1, 2020, at a cost of €350,000. Barton uses the straight‐line depreciation method, a 5‐year estimated useful life, and no residual value. At the end of 2020, independent appraisers determined that the assets have a fair value of €320,000.

Instructions

a. Prepare the journal entry to record 2020 depreciation using the straight‐line method.

b. Prepare the journal entry to record the revaluation of the equipment.

c. Prepare the journal entry to record 2021 depreciation, assuming no additional revaluation.

additional instructions:

4. Prepare the closing journal entries for a. and b.
5. Suppose that at the end of 2021, after the depreciation is recorded per c., the equipment is re-valued to €180,000. Prepare the journal entry to record the revaluation. Then prepare the closing entries required at the end of 2021.
6. Prepare the depreciation entries for 2020 and 2021, assuming the Cost Model was followed in both years.
7. Assume that the equipment is sold on 1 July 2022 for €170,000.
   1. Calculate depreciation for 2022 under both the cost and fair value models. (Hint: Depreciate only up to the date of disposal.)
   2. Prepare the journal entry for the disposal under the cost model.
   3. Prepare the journal entry for the disposal under the fair value model. Do not revalue the equipment on 1 July 2022 (prior to the disposal).
8. In total (for 2020, 2021, and 2022 taken together), which model resulted in the greatest decrease to total comprehensive income?

Condensed financial data of Sandhill Company for 2020 and 2019 are presented below.

Additional information:

During the year, $70 of common stock was issued in exchange for plant assets. No plant assets were sold in 2020.

Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Fedora’s Vases experienced all of the following events during the month of September 2020. For each transaction, give the correct amount of revenue and expense to be recognized. If nothing should be recognized, enter 0 for your answer.

a) Sold vases for $288,000 on credit. The cost of the vases was $160,000.

Revenue recognized ______

Expense recognized ______

b) Paid employees $96,000 for work performed during the months of August and September. Half of the work relates to September 2020.

Revenue recognized   ______

Expense recognized ______

c) Purchased $6,400 of shipping bubble wrap on account.

Revenue recognized   ______

Expense recognized ______

d) Used half the bubble wrap purchased above.

Revenue recognized    ______

Expense recognized ______

e) Received a $3,000 utility bill that relates to the month of September 2020. The bill will not be paid until October 15, 2020.

Revenue recognized ______

Expense recognized ______

f) Paid $6,400 to the supplier of the bubble wrap.

Revenue recognized    ______

g) Expense recognized ______

Collected $176,000 worth of receivables that relate to August 2020 credit sales.

Revenue recognized    ______

Expense recognized ______

h) Received $112,000 in advance payments for vases not yet shipped.

Revenue recognized    ______

Expense recognized ______

i) Sold vases for $80,000 on credit. The vases cost $48,000.

Revenue recognized    ______

Expense recognized ______

What was the net income for Fedora's Vases for the month of September considering only the transactions above?

Fedora's net income for September ______

On January 1, 2020, Stream Company acquired 30 percent of the outstanding voting shares of Q-Video, Inc., for $758,000. Q-Video manufactures specialty cables for computer monitors. On that date, Q-Video reported assets and liabilities with book values of $1.8 million and $750,000, respectively. A customer list compiled by Q-Video had an appraised value of $268,000, although it was not recorded on its books. The expected remaining life of the customer list was eight years with straight-line amortization deemed appropriate. Any remaining excess cost was not identifiable with any particular asset and thus was considered goodwill.

Q-Video generated net income of $288,000 in 2020 and a net loss of $136,000 in 2021. In each of these two years, Q-Video declared and paid a cash dividend of $10,000 to its stockholders.

During 2020, Q-Video sold inventory that had an original cost of $94,080 to Stream for $168,000. Of this balance, $84,000 was resold to outsiders during 2020, and the remainder was sold during 2021. In 2021, Q-Video sold inventory to Stream for $184,000. This inventory had cost only $138,000. Stream resold $92,000 of the inventory during 2021 and the rest during 2022.

For 2020 and then for 2021, compute the amount that Stream should report as income from its investment in Q-Video in its external financial statements under the equity method. (Enter your answers in whole dollars and not in millions. Do not round intermediate calculations.)

Carla Vista Company manufactures equipment. Carla Vista’s products range from simple automated machinery to complex systems containing numerous components. Unit selling prices range from $235,000 to $1,620,000, and are quoted inclusive of installation. The installation process does not involve changes to the features of the equipment to perform to specifications. Carla Vista has the following arrangement with Winkerbean Inc.

Carla Vista delivers the equipment on June 1, 2020, and completes the installation of the equipment on September 30, 2020. Assume that the equipment and the installation are two distinct performance obligations that should be accounted for separately.

a) Prepare any journal entries for Carla Vista on May 2, June 1, and September 30, 2020.

Heavy Duty Gym Equipment Pty Ltd sells gym equipment and personal trainer lessons. On 1 June 2020, Heavy Duty Gym Equipment Pty Ltd signs an agreement with Burwood Fitness Club to provide 2 personal training sessions for 10 weeks and 5 items of gym equipment. The contract price amounted to $44,000 (GST inclusive), on credit terms n/30 for the equipment and the personal training lessons. This amount also includes one free service for the equipment to be performed twelve months after the delivery of equipment to Burwood Fitness Club.

The stand-alone price for the 20 personal training sessions is $2,200 (GST inclusive). The personal training sessions lessons will start on 8 June 2020.

The stand-alone price of the equipment is $55,000 (GST inclusive). The twelve-month service fee for the equipment is usually $880 (GST inclusive).

Burwood Fitness Club paid the full amount on 20 June 2020 for the equipment and personal training lessons. The equipment was delivered on 28 June 2020. By 30 June 2020, 7 personal training lessons had been held.

How should Heavy Duty Gym Equipment Pty Ltd allocate the transaction price to the distinct performance obligations in this contract based on IFRS 15/AASB 15 Revenue with Contracts from Customers?            

On January 1, 2017, Portland Company acquired all of Salem Company’s voting stock for $16,000,000 in cash. Some of Salem’s assets and liabilities at the date of purchase had fair values that differed from reported values, as follows:

Salem’s total shareholders’ equity at January 1, 2017, was $4,000,000. It is now December 31, 2020 (four years later). Salem’s retained earnings reflect the accumulation of net income less dividends; there have been no other changes in its retained earnings. Salem does not report any other comprehensive income. Cumulative goodwill impairment to the beginning of 2020 is $2,000,000. Goodwill impairment for 2020 is $500,000. Portland uses the complete equity method to account for its investment. The December 31, 2020, trial balance for Salem appears below.

On the 2020 consolidation working paper, eliminating entry (R) reduces Investment in Salem by

$3,100,000

$5,200,000

$6,400,000

$8,000,000