Additional information from the accounting records:

1. Investment revenue includes Arduous Company’s $6 million share of the net income of Demur Company, an equity method investee.
2. Treasury bills were sold during 2021 at a gain of $2 million. Arduous Company classifies its investments in Treasury bills as cash equivalents.
3. Equipment originally costing $70 million that was one-half depreciated was rendered unusable by a flood. Most major components of the equipment were unharmed and were sold for $17 million.
4. Temporary differences between pretax accounting income and taxable income caused the deferred tax liability to increase by $3 million.
5. The preferred stock of Tory Corporation was purchased for $25 million as a long-term investment.
6. Land costing $46 million was acquired by issuing $23 million cash and a 15%, four-year, $23 million note payable to the seller.
7. The right to use a building was acquired with a 15-year lease agreement; present value of lease payments, $82 million. Annual lease payments of $7 million are paid at the beginning of each year starting January 1, 2021.
8. $60 million of bonds were retired at maturity.
9. In February, Arduous issued a 5% stock dividend (4 million shares). The market price of the $5 par value common stock was $7.50 per share at that time.
10. In April, 1 million shares of common stock were repurchased as treasury stock at a cost of $9 million.

Required:
Prepare the statement of cash flows for Arduous Company using the indirect method. (Amounts to be deducted should be indicated with a minus sign. Enter your answers in millions (i.e., 10,000,000 should be entered as 10).)

The following are transactions for the account period of 5/1/2020 through 5/31/2020 for the Sandy’s East Coast Kites and Novelties, a sole proprietorship owned by Windy Uberflier. Create a trial balance, Income Statement, Statement of Owners Equity, and Balance Sheet at the end of day on 5/31/20. Don’t forget to adjust accounts.

1. 5/1/20 - Deposited $53,000 into a business bank account for the company.
2. 5/1/20 - Signed a lease for retail and manufacturing space and paid cash for the first six months rent of $4,200. (Hint- When to you count rent as revenue?)
3. 5/1/20 - Bought office supplies to be used immediately from Dewey’s Office and Hunting Supply on account for $600.
4. 5/1/20 - Bought a one-year liability insurance policy from Louie’s Ducky Insurance Company and Nail Salon for $12,000 cash.
5. 5/1/20 - Bought novelty inventory with a wholesale value of $5,000, paying $2,500 in cash and promising to pay the balance on 6/1/20.
6. 5/2/20 - Bought a Chevy truck from Donald’s Truck and Egg Supply with an extended bed and saddle tanks for $23,000 cash.
7. 5/3/20 - Bought a truck shell from Huey’s Truck Accessories and Novelties for $2,500 on account.
8. 5/4/20 - Invested personal computer equipment to the company having a fair market value of $3,400.
9. 5/10/20 - Signs a contracted to perform a Kite Demo in Philadelphia on 6/1/20 and is paid $2,500 cash.
10. 5/11/20 - Paid Huey’s Truck Accessories and Novelties $1,500 cash.
11. 5/11/20 - Purchased an ad in the local newspaper The Righteous Dempublicrat for $200 on account.
12. 5/20/20 - Performed a Kite Demo to the Boy’s and Girl’s Club of Greater Hoboken with a promise to receive $2,500 cash from Scrooge McDuck by 9/1/20.
13. 5/20/20 - Paid $1,000 cash to Huey’s Truck Accessories and Novelties.
14. 5/20/20 - Purchased 45 gallons of gas for truck for $160 cash.
15. 5/22/20 - Paid $200 cash to the local newspaper for ad purchased on 5/11.
16. 5/23/20 - Hired a new employee who will start on 5/26 and will be paid $15 per hour (working 8 hours a day M-F), and instantly paid her a bonus of $1,000 cash. Paydays are the first day of the month.
17. 5/24/20 - Bought a trailer from Huey’s Truck Accessories and Novelties for $2,120 paying $620 cash down and putting the remaining balance on account.
18. 5/25/20 - Received a check from Scrooge McDuck for $850 for partial payment for Kite demo on 5/20.
19. 5/28/20 - Customer purchases an ACME Super Duper Flier and various novelty accessories for $4,220 cash. The wholesale value of the merchandise was $2,110.
20. 5/28/20 - Withdraws $2,500 in cash from the business to quarantine with style.

Simmons Corp

Balance Sheet

As of December 31, 2019 and June 30, 2020

During 2020 to date (June 30, 2020), Simmons had the following transactions:

1. Provided services to customers on account for $1,000.
2. Paid cash for salaries of employees for $400 (includes amounts owed as of December 31, 2019).
3. Paid cash for utility bills of $100
4. Collected $30 cash from customers on account.
5. Paid $40 cash to suppliers on account.

Additional information:

1. The Note Payable bears interest at 6% per year, but no interest is due until the due date of the note, which is 2024.
2. The equipment, purchased in 2019, is being depreciated using the straight-line method with an estimated service life of 5 years and no estimated residual value.

1. Provide any adjusting entries needed to account for interest on the note payable and depreciation on the equipment through June 30, 2020.
2. Prepare an income statement for Simmons Corp for the period January 1 – June 30, 2020.
3. Enter the balances of balance sheet accounts as of June 30, 2020 in the balance sheet above. Don’t forget the closing entry needed to make the balance sheet balance!
4. In Simmons Corp.’s cash flow statement for the period January 1 – June 30, 2020, what would be the reported amounts of each of the following? (You do NOT have to prepare a cash flow statement)
5. Cash flows from operating activities:
6. Cash flows from investing activities
7. Cash flows from financing activities:
8. Based on the financial statements (income statement and balance sheet) that you prepared, and based on the cash flow information you determined in part (4), comment on the performance of the company, both from a profit and a cash flow perspective. Also comment on the company’s financial position (its ability to pay bills, e.g.).

Tamarisk Construction Company began work on a $406,500 construction contract in 2020. During 2020, Tamarisk incurred costs of $292,500, billed its customer for $213,500, and collected $177,000. At December 31, 2020, the estimated additional costs to complete the project total $161,340.

Prepare Tamarisk’s journal entry to record profit or loss, if any, using (a) the percentage-of-completion method and (b) the completed-contract method. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places, e.g. 5,275.)

Cullumber Construction Company began work on a $400,000 construction contract in 2020. During 2020, Cullumber incurred costs of $250,000, billed its customer for $200,000, and collected $170,000. At December 31, 2020, the estimated additional costs to complete the project total $178,890.

Prepare Cullumber’s journal entry to record profit or loss, if any, using (a) the percentage-of-completion method and (b) the completed-contract method. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places, e.g. 5,275.)

Windsor Construction Company began work on a $404,000 construction contract in 2020. During 2020, Windsor incurred costs of $273,000, billed its customer for $232,000, and collected $182,000. At December 31, 2020, the estimated additional costs to complete the project total $163,660.

Prepare Windsor’s journal entry to record profit or loss, if any, using (a) the percentage-of-completion method and (b) the completed-contract method. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places, e.g. 5,275.)

Pronghorn Company reported 2020 net income of $152,900. During 2020, accounts receivable increased by $13,760 and accounts payable increased by $9,604. Depreciation expense was $44,000.

Prepare the cash flows from operating activities section of the statement of cash flows. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

The following information is related to Whispering Company for 2020.

Retained earnings balance, January 1, 2020$1,078,000

Sales Revenue27,500,000

Cost of goods sold17,600,000

Interest revenue77,000

Selling and administrative expenses5,170,000

Write-off of goodwill902,000

Income taxes for 2020 1,368,400

Gain on the sale of investments121,000

Loss due to flood damage429,000

Loss on the disposition of the wholesale division (net of tax)484,000

Loss on operations of the wholesale division (net of tax)99,000

Dividends declared on common stock275,000

Dividends declared on preferred stock88,000

Whispering Company decided to discontinue its entire wholesale operations (considered a discontinued operation) and to retain its manufacturing operations. On September 15, Whispering sold the wholesale operations to Rogers Company. During 2020, there were 500,000 shares of common stock outstanding all year.

On January 1, 2020, Caliber Corporation issued 9% bonds dated January 1, 2020, with a face amount of $10 million. The bonds mature in 2029 (10 years). For bonds of similar risk and maturity, the market yield is 10%. Interest is paid annually on December 31.

1. What is the amount of the annual interest payment?

2. What is the price of the bond on the issue date? (state method used)

3. Was the bond sold at a discount or a premium? Explain why.

4. What is the "actual" cost of this debt?

5. What is the price of the bond if the market yield is 8%? (state method used)

6. Is this bond sold at a discount or premium? Explain why.

7. What is the "actual" cost of this debt?

Marin Construction Company began work on a $424,000 construction contract in 2020. During 2020, Marin incurred costs of $279,500, billed its customer for $204,500, and collected $170,500. At December 31, 2020, the estimated additional costs to complete the project total $150,500. Prepare Marin’s journal entry to record profit or loss, if any, using (a) the percentage-of-completion method and (b) the completed-contract method. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Round answers to 0 decimal places, e.g. 5,275.)