In: Accounting
In: Accounting
Assume that TDW Corporation (calendar-year-end) has 2020 taxable income of $654,000 for purposes of computing the §179 expense. The company acquired the following assets during 2020: (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.)
| Placed in | |||
| Asset | Service | Basis | |
| Machinery | September 12 | $ | 2,270,500 |
| Computer equipment | February 10 | 263,650 | |
| Furniture | April 2 | 880,850 | |
| Total | $ | 3,415,000 | |
a. What is the maximum amount of §179 expense TDW may deduct for 2020?
In: Accounting
Below is the income statement for Red Storm Cleaners for the year ended December 31, 2020. During 2020, dividends paid by Red Storm Cleaners were $1,100. Write down the closing entries for Red Storm Cleaners.
|
Red Storm Cleaners Income Statement For the year ended December 31, 2020 |
|
|
Service revenue |
$60,000 |
|
Expenses: |
|
|
Salaries expense |
19,600 |
|
Repairs and maintenance expense |
13,000 |
|
Interest expense |
5,000 |
|
Supplies Expense |
2,800 |
|
Total expenses |
40,400 |
|
Net income |
$19,600 |
In: Accounting
Y received stock as a gift from her father in 2019. Her father purchased the stock several years ago of $30,000. The stock was worth $20,000 at the time the gift was received. Y sold the stock for $18,000 in 2020.
How much gain or loss, if any, should Y report on her 2020 tax return?
Assume the same facts as above, except that Y sold the stock for $25,000. How much gain or loss, if any, should Y report on her 2020 tax return?
In: Accounting
Think up a company you would like to start. Then, choose an organizational type. Assume the company will start on January 1st, 2020. Create 10 transactions for the year 2020. Please make sure you use entries which affect equity, revenue, expenses, assets and liabilities. You can draw the "T" accounts or you can describe the affect of the transactions on the financial statement. Then, show the income statement, the balance sheet and the statement of equity for the year ending 12/31/2020.
Any company or organization is fine!
In: Accounting
Amazon leased equipment from United Machines on July 1, 2020, in a finance lease. The present value of the lease payments discounted at 10% was $82,000. Ten annual lease payments of $12,000 are due each year beginning July 1, 2020. United Machines had constructed the equipment recently for $66,000. What net effect did the lease have on the income statement of United Machines for the year ending December 31, 2020? Ignore taxes. a. $23,000 b. $0 c. $16,000 d. $19,500 e. $3,500
In: Accounting
Bond H, described in the table below, is sold for settlement on 20 April 2020.
|
Annual Coupon |
6% |
|
Coupon Payment Frequency |
Semiannual |
|
Interest Payment Dates |
30 December and 30 June |
|
Maturity Date |
30 December 2025 |
|
Day-Count Convention |
30/360 |
|
Annual Yield-to-Maturity |
7% |
What is the full price (per 100 of par value) that Bond H will settle at on 20 April 2020? Round your answer to three decimal places.
Bond H, described in the table below, is sold for settlement on 20 April 2020.
|
Annual Coupon |
6% |
|
Coupon Payment Frequency |
Semiannual |
|
Interest Payment Dates |
30 December and 30 June |
|
Maturity Date |
30 December 2025 |
|
Day-Count Convention |
30/360 |
|
Annual Yield-to-Maturity |
7% |
What is the amount of accrued interest for Bond H on the settlement date of 20 April 2020? Round your answer to three decimal places.
Bond H, described in the table below, is sold for settlement on 20 April 2020.
|
Annual Coupon |
6% |
|
Coupon Payment Frequency |
Semiannual |
|
Interest Payment Dates |
30 December and 30 June |
|
Maturity Date |
30 December 2025 |
|
Day-Count Convention |
30/360 |
|
Annual Yield-to-Maturity |
7% |
What is the flat price for Bond H on the settlement date of 20 April 2020? Round your answer to three decimal places.
In: Finance
The adjusted trial balance of Monona Inc. as of December 31, 2020, follows.
| Adjusted Trial Balance | |||
|---|---|---|---|
| December 31, 2020 | |||
| Acct. No. | Account | Debit | Credit |
| 100 | Cash | $18,000 | $ |
| 104 | Accounts receivable | 35,000 | |
| 105 | Allowance for doubtful accounts | 1,775 | |
| 106 | Inventory | 40,000 | |
| 108 | Prepaid insurance | 2,400 | |
| 150 | Land | 5,725 | |
| 155 | Building | 100,000 | |
| 156 | Equipment | 30,000 | |
| 162 | Accumulated depreciation | 6,250 | |
| 202 | Accounts payable | 37,500 | |
| 204 | Salaries payable | 2,250 | |
| 208 | Deferred service revenue | 1,000 | |
| 210 | Interest payable | 250 | |
| 240 | Note payable | 75,000 | |
| 302 | Common stock | 92,500 | |
| 304 | Retained earnings | 6,000 | |
| 310 | Dividends | 2,500 | |
| 400 | Sales revenue | 250,000 | |
| 402 | Service revenue | 12,500 | |
| 510 | Costs of goods sold | 120,000 | |
| 512 | Salaries expense | 115,000 | |
| 520 | Repair expense | 1,000 | |
| 526 | Insurance expense | 1,800 | |
| 528 | Depreciation expense | 6,600 | |
| 540 | Interest expense | 6,000 | |
| 542 | Bad debt expense |
1,000 |
|
| Totals |
$485,025 |
$485,025 |
|
a. Prepare the income statement for the year ended
December 31, 2020.
b. Prepare the statement of stockholders’ equity for the
year ended December 31, 2020. Assume that the common stock was
issued prior to 2020.
c. Prepare the balance sheet on December 31, 2020
In: Accounting
The accountant of Patrick Ltd needs to prepare consolidated financial statements for Patrick Ltd at the end of financial year. Following information was available on 30 June 2020:
1) Patrick Ltd acquired 100 per cent interest in Sand Ltd for $790,000 on 1 July 2015. All assets and liabilities were fairly valued on the acquisition date. At the date of acquisition, the equity of Sand Ltd included:
Share capital $320,000
Reserve $160,000
Retained earnings $170,000
The balance of the investment account was $790,000 as shown in the Statement of Financial Position of Patrick Ltd on 30 June 2020.
2) The directors of Patrick Ltd believed that goodwill acquired was impaired by 15 per cent for the year ended 30 June 2020.
3) On 3 March 2020, Patrick Ltd sold inventory to Sand Ltd at a value of $164,000.
4) The above inventory had a cost of $117,000 for Patrick Ltd to produce. All inventories remained unsold in Sand Ltd on 30 June 2020. Patrick Ltd and Sand Ltd adopt the perpetual inventory system for inventory accounting. The income tax rate is 30%.
Required: (Narrations are required in this question)
a) Determine the amount of goodwill acquired.
b) Prepare relevant consolidation journal entries on 30 June 2020.
c) Explain accounting for goodwill acquired in a business combination.
In: Accounting