1- Assume that the following data relative to Rice Company for 2020 is available

Net Income $3,984,000:

Transactions in Common Shares Change Cumulative

Jan. 1,2020 Beginning number 650,000

Apr. 1,2020 Purchase of treasury shares (50,000) 600,000

June 1,2020 100% stock dividend 600,000 1,200,000

Dec 1,2020 Issuance of shares 200,000 1,400,000

5% Cumulative Preferred Stock:

$1,000,000 sold at par on January  1,2020 convertible into 200,000 shares of common stock

Stock options:

Exercisable at the option of $30 per share. Average market price in 2020, $35 and there were 60,000 options outstanding since 2017.

(A) compute the basic earnings per share for 2020. (round to the nearest penny)

(B) compute the diluted earnings per share for 2020. (round to the nearest penny)

On January 1, 2020, Hawkeye Air leased a new airplane for 5 years. The expected life of the airplane is 20 years. The lease stipulates that Hawkeye Air makes annual payments of $1,085,923 payable at the beginning of each year. Hawkeye Air has an incremental borrowing rate of 4.3%. Hawkeye Air has an option to renew the lease with a 2% increase in the lease payment.

1) How will the lease be classified and how do you know?

1b) Calculate the present value of the lease payments.

2) What is the balance sheet impact of the lease at the beginning of the lease (1/1/2020)?

2a) What is the income statement impact of the lease for 2020?

2b) Identify any effects the lease arrangement and the associated reporting would have on the statement of cash flows for 2020.

Your firm has a contract to purchase 1000 laptops from a Taiwanese company. The payment is due on receipt of the shipment and must be delivered in Taiwan on June 31, 2020. In March 2020, when you are arranging the contract, the laptops are each priced at 20,000 NT$ (New Taiwan Dollar). The spot rate in March 2020 is $1 in exchange for 30 NT$.

a) [5 points] What is the U.S. dollar price of one unit of laptop in March 2020?

b) [5 points] What will be the total USD price of the laptops when payment is due in June if the exchange rate does not change between March and June?

c) [10 points] What will be the total USD price of the laptops when payment is due in June if the USD depreciates against NT$ by 10% between March and June?

1. Suppose the data for a hypothetical economy is given above. This economy produces only 3 things, pizzas, haircuts and tanks. The base year is 2019.

1. Calculate GDP deflator in 2020. Based on GDP deflator, what is the inflation rate from 2019 to 2020?
2. Suppose a representative consumer basket consists of 10 pizzas and 20 haircuts. Using this consumer basket, calculate CPI in 2020 (again, assuming 2019 is the base year). Based on CPI, what is inflation rate?
3. Why do you think there is such a dramatic difference in the inflation rates from parts a and b?

1. Suppose the data for a hypothetical economy is given above. This economy produces only 3 things, pizzas, haircuts and tanks. The base year is 2019.

a. Calculate GDP deflator in 2020. Based on GDP deflator, what is the inflation rate from 2019 to 2020?

b. Suppose a representative consumer basket consists of 10 pizzas and 20 haircuts. Using this consumer basket, calculate CPI in 2020 (again, assuming 2019 is the base year). Based on CPI, what is inflation rate

c. Why do you think there is such a dramatic difference in the inflation rates from parts a and b?

2-6. Effect of accruals on the financial statements

Cordell Inc. experienced the following events in 2018, its first year of operation:

1. Received $40,000 cash from the issue of common stock.

2. Performed services on account for $82,000.

3. Paid a $6,000 cash dividend to the stockholders.

4. Collected $76,000 of the accounts receivable.

5. Paid $53,000 cash for other operating expenses.

6. Performed services for $19,000 cash.

7. Recognized $3,500 of accrued utilities expense at the end of the year.

Required

a. Identify the events that result in revenue or expense recognition.

b. Based on your response to Requirement a, determine the amount of net income reported on the 2018 income statement.

c. Identify the events that affect the statement of cash flows.

d. Based on your response to Requirement c, determine the amount of cash flow from operating activities reported on the 2018 statement of cash flows.

e. What is the before- and after-closing balance in the Service Revenue account? What other accounts would be closed at the end of the accounting cycle?

f. What is the balance of the Retained Earnings account that appears on the 2018 balance sheet?

2-7. Net income versus changes in cash

In 2018, Lee Inc. billed its customers $62,000 for services performed. The company collected $51,000 of the amount billed. Lee incurred $39,000 of other operating expenses on account. Lee paid $31,000 of the accounts payable. Lee acquired $40,000 cash from the issue of common stock. The company invested $21,000 cash in the purchase of land.

Required

(Hint: Identify the six events described in the paragraph and record them in general ledger accounts under an accounting equation before attempting to answer the questions.) Use the preceding information to answer the following questions:

a. What amount of revenue will Lee report on the 2018 income statement?

b. What amount of cash flow from revenue will be reported on the statement of cash flows?

c. What is the net income for the period?

d. What is the net cash flow from operating activities for the period?

e. Why is the amount of net income different from the net cash flow from operating activities for the period?

f. What is the amount of net cash flow from investing activities?

g. What is the amount of net cash flow from financing activities?

h. What amounts of total assets, liabilities, and equity will be reported on the year-end balance sheet?

2-8. Supplies and the financial statements model

Pizza Express Inc. began the 2018 accounting period with $2,500 cash, $1,400 of common stock, and $1,100 of retained earnings. Pizza Express was affected by the following accounting events during 2018:

1. Purchased $3,600 of supplies on account.

2. Earned and collected $12,300 of cash revenue.

3. Paid $2,700 cash on accounts payable.

4. Adjusted the records to reflect the use of supplies. A physical count indicated that $250 of supplies was still on hand on December 31, 2018.

Required

a. Show the effects of the events on the financial statements using a horizontal statements model like the following one. In the Cash Flows column, use OA to designate operating activity, IA

for investing activity, FA for financing activity, and NC for net

change in cash. Use NA to indicate accounts not affected by the event. The beginning balances are entered in the following example:

b. Explain the difference between the amount of net income and amount of net cash flow from operating activities.

2-9. Supplies on financial statements

Yard Professionals Inc. experienced the following events in 2018, its first year of operation:

1. Performed services for $35,000 cash.

2. Purchased $6,000 of supplies on account.

3. A physical count on December 31, 2018, found that there was

$1,800 of supplies on hand.

Required

Based on this information alone:

a. Record the events under an accounting equation.

b. Prepare an income statement, balance sheet, and statement of cash flows for the 2018 accounting period.

c. What is the balance in the Supplies account as of January 1, 2019?

d. What is the balance in the Supplies Expense account as of January 1, 2019?

2-22. Closing the accounts

The following information was drawn from the accounting records of Wyckoff Company as of December 31, 2018, before the temporary accounts had been closed. The Cash balance was

$3,600, and Notes Payable amounted to $4,000. The company had revenues of $7,500 and expenses of $3,400. The company’s Land account had a $8,000 balance. Dividends amounted to

$1,000. The balance of the Common Stock account was $2,000.

Required

a. Identify which accounts would be classified as permanent and which accounts would be classified as temporary.

b. Assuming that Wyckoff’s beginning balance (as of January 1, 2018) in the Retained Earnings account was $2,500, determine its balance after the temporary accounts were closed at the end

of 2018.

c. What amount of net income would Wyckoff Company report on its 2018 income statement?

d. Explain why the amount of net income differs from the amount of the ending Retained Earnings balance.

e. What are the balances in the revenue, expense, and dividend

accounts on January 1, 2019

2-25. Classifying events on the statement of cash flows

The following transactions pertain to the operations of Ewing Company for 2018:

1. Acquired $30,000 cash from the issue of common stock.

2. Provided $65,000 of services on account.

3. Paid $22,000 cash on accounts payable.

4. Performed services for $8,000 cash.

5. Collected $51,000 cash from accounts receivable.

6. Incurred $37,000 of operating expenses on account.

7. Paid $6,500 cash for one year’s rent in advance.

8. Paid a $4,000 cash dividend to the stockholders.

9. Paid $1,200 cash for supplies to be used in the future.

10. Recognized $3,100 of accrued salaries expense.

Required

a. Classify the cash flows from these transactions as operating activities (OA), investing activities (IA), or financing activities (FA). Use NA for transactions that do not affect the statement of

cash flows.

b.         Prepare a statement of cash flows. (There is no beginning cash balance.)

Use an example to explain the matching concept.

QUESTION THREE
The objective of IAS 36 Impairment of assets is to prescribe the procedures that an entity applies to ensure that its assets are not impaired. Telepath acquired an item of plant at a cost of K800,000 on 1 January 2017 that is used to produce and package pharmaceutical pills. The plant had an estimated residual value of K50,000 and an estimated life of five years, neither of which has changed. Telepath uses straight-line depreciation. On 31 December 2019, Telepath was informed by a major customer (who buys products produced by the plant) that it would no longer be placing orders with Telepath. Even before this information was known, Telepath had been having difficulty finding work for this plant. It now estimates that net cash inflows earned from the plant for the next three years will be:
K
year ended: 31 December 2020 220,000
31 December 2021 180,000
31 December 2022 170,000
On 31 December 2022, the plant is still expected to be sold for its estimated realisable value. Telepath has confirmed that there is no market in which to sell the plant at 31 December 2019. Telepath’s cost of capital is 10% and the following values should be used:
K
value of K1 at: end of year 1 0.91
end of year 2 0.83
end of year 3 0.75
Required:
(a) Explain what is meant by assets that may form a cash generating unit and how an impairment review should be done for a cash generating unit. [5 Marks]
(b) Calculate and explain the carrying amounts of the assets above at 31 December 2019 after applying any impairment losses. Calculations should be to the nearest 1,000. [10 Marks]
[TOTAL: 15 Marks]

Problem 2: The following information is available for the first four years of operations for Jones Company

   Year           Earnings Before Tax

   2018           $800,000

   2019              730,000

2. On January 2, 2018, heavy equipment costing $600,000 was purchases. The equipment had a life of 5 years and no salvage value. The straight-line method of depreciation is used for book purposes and the tax depreciation taken each year is listed below

Tax Depreciation

2018       2019           2020           2021           2022 Total

$198,000   270,000       90,000           42,000           0 600,000

3. The company sells its merchandise on an installment contract basis. In 2018, Jones Co. elected, for tax purposes, to report the gross profit from the sales in the year the receivables are collected. However, for financial statement purposes, the company recognized all the gross profit ($800,000) in 2018. these procedures created a $600,000 difference between book and taxable incomes. The future collections of the installment contracts receivables are expected to result in taxable amounts of $200,000 one acc of the next three years.

4. In 2018 Jones Co. recorded $70,000 accrual for litigation liability which will be paid in 2019.

5. The enacted tax rates are 40% for 2018, 34% for the years after

Instructions

Prepare a schedule comparing depreciation for finances reporting and tax purposes for all years

Prepare a reconciliation of Book Income to Taxable Income for 2018

Prepare a schedule of future taxable and (deductible) amounts at the end of 2018

Prepare a schedule of deferred tax (asset) and liability at the end of 2018

Prepare the journal entry to record income tax expense, deferred income taxes, and income tax payable

Culver Corporation had the following long-term receivable account balances at December 31, 2019.

Transactions during 2020 and other information relating to Culver's' long-term receivables were as follows:

Click here to view the factor table PRESENT VALUE OF 1.
Click here to view the factor table PRESENT VALUE OF AN ANNUITY OF 1.

The tables in this problem are to be used as a reference for this problem. (For calculation purposes, use 5 decimal places as displayed in the factor table provided.)

Describe the relevant cash flows in terms of amount and timing.

Determine the amount of interest income that should be reported in 2020. (Round answers to 0 decimal places, e.g. 8,971.)

Determine the portion of the note and any interest that should be reported in current assets at December 31, 2020. (Round answers to 0 decimal places, e.g. 9,871. Do not leave any answer field blank. Enter 0 for amounts.)

Determine the portion of the note that should be reported as a long-term investment at December 31, 2020. (Round answers to 0 decimal places, e.g. 8,971.)

eTextbook and Media

Prepare the long-term receivables section of Culver's statement of financial position at December 31, 2020. (Round answers to 0 decimal places, e.g. 8,971.)

Prepare a schedule showing the current portion of the long-term receivables and accrued interest receivable that would appear in Culver's's statement of financial position at December 31, 2020. (Round answers to 0 decimal places, e.g. 8,971.)

Thermodynamics

A 1 m³ rigid tank has propane at 100 kPa and 300 K. The tank is connected to another 0.5 m³ rigid tank which has propane at 250 kPa and 400 K by a ball valve. The valve is opened and both tanks come to a uniform state at 325 K.

1-      State all assumptions you need to solve the problem.

2-      Calculate the final pressure of propane in both tanks?

3-      Calculate the mass of propane before and after opening the valve in each tank.

4-      Sketch the process on a P-V diagram.

5-      Find the compressibility factor of propane in each tank before opening the valve.

6-      Calculate the change in internal energy and enthalpy of propane in each tank.