The prepaid insurance account has an unadjusted balance of $46,000 at December 31, 2018, the end of Hanson Company's accounting year. Insurance expense has an unadjusted $2,000 balance at the same point in time. Some policies that were in effect have expired. Some of those were renewed and some were not. The following policies are in effect at December 31, 2018:
Policy Date Policy Total Premium
Type Acquired Term Paid when acquired
Liability 1-31-17 2 years $48,000
Auto 6-30-18 2 years 9,000
Business interruption 8-1-18 1 year 840
2.Determine the amount of total insurance expense (you need not separate the expense by policy type) to report on the income statement for the year ended December 31, 2018.
In: Accounting
In 2018, North Company rented a villa for three years and received a total of $60,000. The rent is earned equally over the period 2018-2020. For tax purposes, North should report the full $60,000 on 2018 tax return form. By year end, the company reported an income tax expense of $22,000 and income tax payable of $37,000. In 2019, the company terminated a maintenance contract and agreed to pay $10,000 per year for 2019-2021. The total termination amount is fully deducted for financial reporting purposes and deducted as paid for tax purposes. The pretax financial income for 2019 is $90,000. The tax rates are 30% for 2018 and 35% for 2019. By end of 2019, the government announced the change of tax rate for future periods. a. Prepare the journal entry to record income taxes for 2019. b. Which approach have you applied in answering part (a)? what are the main objectives of this approach?
In: Accounting
Question 1: [10 marks] Residents of Fruitopia produce and consume oranges and apples. Prices and quantities of their consumption and production are given in the following table. Use 2018 as base year. You have to use the same data table for all parts of the question.
|
Year |
Price of Oranges |
Quantity of Oranges |
Price of Apples |
Quantity of Apples |
|
2018 |
$2.40 |
40 |
$2.10 |
70 |
|
2019 |
$2.80 |
50 |
$2.20 |
80 |
In: Economics
National Orthopedics Co. issued 9% bonds, dated January 1, with a face amount of $900,000 on January 1, 2018. The bonds mature on December 31, 2021 (4 years). For bonds of similar risk and maturity the market yield was 10%. Interest is paid semiannually on June 30 and December 31. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)
Required:
1. Determine the price of the bonds at January 1, 2018.
2. Prepare the journal entry to record their issuance by National on January 1, 2018.
3. Prepare an amortization schedule that determines interest at the effective rate each period.
4. Prepare the journal entry to record interest on June 30, 2018.
5. Prepare the appropriate journal entries at maturity on December 31, 2021.
In: Accounting
Fuzzy Monkey Technologies, Inc., purchased as a long-term investment $ 130 million of 8% bonds, dated January 1, on January 1, 2018. Management intends to have the investment available for sale when circumstances warrant. For bonds of similar risk and maturity the market yield was 10%. The price paid for the bonds was $115 million. Interest is received semiannually on June 30 and December 31. Due to changing market conditions, the fair value of the bonds at December 31, 2018, was $120 million. Required: 1. to 3. Prepare the relevant journal entries on the respective dates (record the interest at the effective rate). 4-a. At what amount will Fuzzy Monkey report its investment in the December 31, 2018, balance sheet? 4-b. Prepare the entry necessary to achieve this reporting objective. 5. How would Fuzzy Monkey's 2018 statement of cash flows be affected by this investment?
In: Accounting
Starge Inc. owns 30% of the outstanding voting common stock of Ticker Co. and has the ability to significantly influence the investee's operations and decision making. On January 1,2018, the balance in the Investment in Ticker Co. account was $ 403,159. Amortization associated with this acquisition is $8,111 per year. During 2018, Ticker earned an income of $ 108,899 and paid cash dividends of $ 36,897. Previously in 2017, Ticker had sold inventory costing $ 28,988 to Starge for $ 48,956. All but 25 % of this merchandise was consumed by Starge during 2017. The remainder was used during the first few weeks of 2018. Additional sales were made to Starge in 2018; inventory costing $33,987 was transferred at a price of $61,258. Of this total, 40% was not consumed until 2019.
1. What amount of equity income would S inc have recognized in 2018 from its ownership interest in T Inc.
In: Accounting
In 2018, North Company rented a villa for three years and
received a total of $60,000. The rent is earned equally over the
period 2018-2020. For tax purposes, North should report the full
$60,000 on 2018 tax return form. By year end, the company reported
an income tax expense of $22,000 and income tax payable of
$37,000.
In 2019, the company terminated a maintenance contract and agreed
to pay $10,000 per year for 2019-2021. The total termination amount
is fully deducted for financial reporting purposes and deducted as
paid for tax purposes. The pretax financial income for 2019 is
$90,000. The tax rates are 30% for 2018 and 35% for 2019. By end of
2019, the government announced the change of tax rate for future
periods.
a. Prepare the journal entry to record income taxes for 2019.
b. Which approach have you applied in answering part (a)? what
are the main objectives of this approach?
In: Accounting
The trial balance for Lindor Corporation, a manufacturing
company, for the year ended December 31, 2018, included the
following income accounts:
| Account Title | Debits | Credits |
| Sales revenue | 2,520,000 | |
| Cost of goods sold | 1,500,000 | |
| Selling and administrative expenses | 440,000 | |
| Interest expense | 50,000 | |
| Unrealized holding gains on investment securities | 90,000 | |
The trial balance does not include the accrual for income taxes.
Lindor's income tax rate is 40%. 1.2 million shares of common stock
were outstanding throughout 2018.
Required:
Prepare a single, continuous multiple-step statement of
comprehensive income for 2018, including appropriate EPS
disclosures. (Round EPS answer to 2 decimal
places.)
|
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In: Accounting
Ben Figgie acquired a passive partnership activity in January of 2013. His at-risk basis at the beginning of 2017
was $65,000. Ben Figgie also owns a rental property that generated income of $15,000 in 2017and $12,000 in
2018. Ben Figgie’s share of income and loss from the partnership activity is:
2017 <$95,000>
2018. 55,000
Complete the following tables.
AT RISK RULES ONLY
FOR 2017
Deductible under at-risk provisions. ____________________
Adjusted basis at 12/31/17. ____________________
Suspended under at-risk provisions. ____________________
FOR 2018
Deductible under at-risk provisions. ____________________
Adjusted basis at 12/31/18. ____________________
Suspended under at-risk provisions. ____________________
PASSIVE RULES ONLY
FOR 2017
Deductible under passive loss provisions. ____________________
Suspended under passive loss provisions. ____________________
FOR 2018
Deductible under passive loss provisions. ____________________
Suspended under passive loss provisions. ____________________
In: Accounting
Blossom Ltd. purchased a new machine on April 4, 2014, at a cost of $ 160,000. The company estimated that the machine would have a residual value of $ 14,000. The machine is expected to be used for 10,000 working hours during its four-year life. Actual machine usage was 1,600 hours in 2014; 2,400 hours in 2015; 2,200 hours in 2016; 2,000 hours in 2017; and 1,800 hours in 2018. Blossom has a December 31 year end.
Calculate depreciation for the machine under each of the
following methods: (Round expense per unit to 2 decimal
places, e.g. 2.75 and final answers to 0 decimal places, e.g.
5,275.)
(1) Straight-line for 2014 through to 2018.
(2) Diminishing-balance using double the
straight-line rate for 2014 through to 2018.
(3) Units-of-production for 2014 through to
2018.
In: Accounting