On January 1, 2017, Abbey acquires 90 percent of Benjamin's outstanding shares. Financial information for these two companies for the years of 2017 and 2018 follows:

Assume that a tax rate of 40 percent is applicable to both companies.

1. On consolidated financial statements for 2018, what are the income tax expense and the income tax currently payable if Abbey and Benjamin file a consolidated tax return as an affiliated group?

2. On consolidated financial statements for 2018, what are the income tax expense and income tax currently payable if they choose to file separate returns?

On January 1, 2017, Abbey acquires 90 percent of Benjamin's outstanding shares. Financial information for these two companies for the years of 2017 and 2018 follows: 2017 2018 Abbey Company: Sales $ (771,000 ) $ (916,000 ) Operating expenses 542,000 596,000 Intra-entity gross profits in ending inventory (included in above figures) (152,000 ) (201,000 ) Dividend income—Benjamin Company (13,500 ) (31,500 ) Benjamin Company: Sales (281,000 ) (353,000 ) Operating expenses 137,000 181,000 Dividends paid (15,000 ) (35,000 ) Assume that a tax rate of 40 percent is applicable to both companies. On consolidated financial statements for 2018, what are the income tax expense and the income tax currently payable if Abbey and Benjamin file a consolidated tax return as an affiliated group? On consolidated financial statements for 2018, what are the income tax expense and income tax currently payable if they choose to file separate returns?

Below is the net income of Blue Instrument Co., a private corporation, computed under the three inventory methods using a periodic system.

(Ignore tax considerations.)

(a) Assume that in 2021 Blue decided to change from the FIFO method to the average-cost method of pricing inventories. Prepare the journal entry necessary for the change that took place during 2021, and show net income reported for 2018, 2019, 2020, and 2021.

(b) Assume that in 2021 Blue, which had been using the LIFO method since incorporation in 2018, changed to the FIFO method of pricing inventories. Prepare the journal entry necessary to record the change in 2021 and show net income reported for 2018, 2019, 2020, and 2021.

On January 1, 2017, Doone Corporation acquired 60 percent of the outstanding voting stock of Rockne Company for $528,000 consideration. At the acquisition date, the fair value of the 40 percent noncontrolling interest was $352,000 and Rockne's assets and liabilities had a collective net fair value of $880,000. Doone uses the equity method in its internal records to account for its investment in Rockne. Rockne reports net income of $330,000 in 2018. Since being acquired, Rockne has regularly supplied inventory to Doone at 25 percent more than cost. Sales to Doone amounted to $390,000 in 2017 and $490,000 in 2018. Approximately 35 percent of the inventory purchased during any one year is not used until the following year.

1. What is the noncontrolling interest's share of Rockne's 2018 income?
2. Prepare Doone's 2018 consolidation entries required by the intra-entity inventory transfers.

The DeVille Company reported pretax accounting income on its income statement as follows: 2018 $ 415,000 2019 335,000 2020 405,000 2021 445,000 Included in the income of 2018 was an installment sale of property in the amount of $56,000. However, for tax purposes, DeVille reported the income in the year cash was collected. Cash collected on the installment sale was $22,400 in 2019, $28,000 in 2020, and $5,600 in 2021. Included in the 2020 income was $23,000 interest from investments in municipal bonds. The enacted tax rate for 2018 and 2019 was 30%, but during 2019 new tax legislation was passed reducing the tax rate to 25% for the years 2020 and beyond. Required: Prepare the year-end journal entries to record income taxes for the years 2018–2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

On January 1, 2017, Abbey acquires 90 percent of Benjamin's outstanding shares. Financial information for these two companies for the years of 2017 and 2018 follows:

Assume that a tax rate of 40 percent is applicable to both companies.

1. On consolidated financial statements for 2018, what are the income tax expense and the income tax currently payable if Abbey and Benjamin file a consolidated tax return as an affiliated group?

2. On consolidated financial statements for 2018, what are the income tax expense and income tax currently payable if they choose to file separate returns?

On December 31, 2017, Dow Steel Corporation had 730,000 shares of common stock and 43,000 shares of 9%, noncumulative, nonconvertible preferred stock issued and outstanding. Dow issued a 5% common stock dividend on May 15 and paid cash dividends of $530,000 and $82,000 to common and preferred shareholders, respectively, on December 15, 2018.

On February 28, 2018, Dow sold 60,000 common shares. In keeping with its long-term share repurchase plan, 2,000 shares were retired on July 1. Dow's net income for the year ended December 31, 2018, was $2,750,000. The income tax rate is 40%.
  
Required:
Compute Dow's earnings per share for the year ended December 31, 2018. (Do not round intermediate calculations. Enter your answers in thousands.)

LCD Industries purchased a supply of electronic components from Entel Corporation on November 1, 2018. In payment for the $25.7 million purchase, LCD issued a 1-year installment note to be paid in equal monthly payments at the end of each month. The payments include interest at the rate of 12%. (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. & 2. Prepare the journal entry for LCD’s purchase of the components on November 1, 2018 and the first installment payment on November 30, 2018.
3. What is the amount of interest expense that LCD will report in its income statement for the year ended December 31, 2018?

2. Record the first installment payment

Notes Payable ?

Interest Expense ?

Cash 2283413

Kevin purchases 1,000 shares of Bluebird Corporation stock on October 3, 2018, for $300,000. On December 12, 2018, Kevin purchases an additional 750 shares of Bluebird stock for $210,000. According to market quotations, Bluebird stock is selling for $285 per share on 12/31/18. Kevin sells 500 shares of Bluebird stock on March 1, 2019, for $162,500.

a. The adjusted basis of Kevin's Bluebird stock on December 31, 2018, is $_________

b. What is Kevin's recognized gain or loss from the sale of Bluebird stock on March 1, 2019, assuming the shares sold are from the shares purchased on December 12, 2018?

Kevin's recognized (gain or loss) is $___________

c. What is Kevin's recognized gain or loss from the sale of Bluebird stock on March 1, 2019, assuming Kevin cannot adequately identify the shares sold?

Kevin has a recognized (gain or loss) of $__________