Using the partial Unadjusted Trial Balance at yearend June 30, 2020 below prepare the annual adjusting journal entries in proper general journal form for the below transactions and answer additional questions. Please record all your answers in the journal entry table provided.

Account Title   Dr. $   Cr. $
Prepaid Insurance   24,000.00     
Notes Receivable    5,500.00     
Shop Supplies   2,700.00     
Delivery Vehicle   40,000.00     
Accumulated Depreciation - Delivery Vehicle      0.00
Unearned Service Revenue      10,000.00
Notes Payable        5,000.00

a) January 1, 2020 a new delivery vehicle was purchased for $40,000. The delivery vehicle has an estimated salvage value of $4,000 and has a estimated useful life of 5 years. Record the depreciation.

b) Accrued revenues at year end totalled $4,200.

c) Employees are paid bi-weekly on Fridays. The total biweekly wage expense for all employees is $10,000. The last pay day was Friday, June 26, 2020 for work to the end of June 26, 2020. Employees do not work weekends.
d)The Notes Payable represents a loan received on April 1, 2020. Interest is accrued at 3% per year. Both the interest and principal are payable on March 31, 2020.

e) At year end it was determined that $1,000 of the Shop Supplies had been used. What is the adjusted ending balance in the Shop Supplies account at year end. Please state whether it will be a debit or credit balance.

Raleigh Department Store uses the conventional retail method for the year ended December 31, 2019. Available information follows: The inventory at January 1, 2019, had a retail value of $46,000 and a cost of $29,160 based on the conventional retail method. Transactions during 2019 were as follows: Cost Retail Gross purchases $ 291,540 $ 500,000 Purchase returns 6,000 11,000 Purchase discounts 5,100 Gross sales 500,000 Sales returns 8,500 Employee discounts 3,500 Freight-in 27,000 Net markups 26,000 Net markdowns 11,000 Sales to employees are recorded net of discounts. The retail value of the December 31, 2020, inventory was $61,800, the cost-to-retail percentage for 2020 under the LIFO retail method was 64%, and the appropriate price index was 103% of the January 1, 2020, price level. The retail value of the December 31, 2021, inventory was $49,290, the cost-to-retail percentage for 2021 under the LIFO retail method was 63%, and the appropriate price index was 106% of the January 1, 2020, price level.

1. Estimate ending inventory for 2019 using the conventional retail method.

2. Estimate ending inventory for 2019 assuming Raleigh Department Store used the LIFO retail method

3. Assume Raleigh Department Store adopts the dollar-value LIFO retail method on January 1, 2020. Estimating ending inventory for 2020 and 2021.

E16.5 NEWTON INC USES A CALENDAR YEAR FOR FINANCIAL REPORTING. THE COMPANY IS AUTHORIZED TO ISSUE 9,000,000 SHARES OF 10 PAR COMMON STOCK. AT NO TIME HAS NEWTON ISSUED ANY POTENTIALLY DILUTIVE SECURITIES. LISTED BELOW IS A SUMMARY OF NEWTON'S COMMON STOCK ACTIVITIES

1.NUMBER OF COMMON SHARES ISSUED AND OUTSTANDING AT DECEMBER 31 2018 2,000,000

2. SHARES ISSUED AS A RESULT OF 10% STOCK DIVIDEND ON SEPTEMBER 30 2019. 200,000

3. SHARES ISSUED FOR CASH ON MARCH 31 2020 2,000,000

NUMBER OF COMMON SHARES ISSUED AND OUTSTANDING AT DECEMBER 31 2020 4,200,000

4. A 2-FOR-1 STOCK SPLIT OF NEWTON'S COMMON STOCK TOOK PLACE ON. MARCH 31 2021

A. COMPUTE THE WEIGHTED-AVERAGE OF COMMON SHARES USED IN COMPUTING EARNINGS PER COMMON SHAREFOR 2019 ON THE 2020. COMPARATIVE INCOME STATEMENT

B. COMPUTE THE WEIGHTED AVERAGE NUMBER OF COMMON SHARES USED IN COMPUTING EARNINGS PER COMMON SHARE FOR 2020 ON THE 2020 COMPARATIVE INCOME STATEMENT

C. COMPUTE THE WEIGHTED AVERAGE NUMBER OF COMMON SHARES TO BE USED IN COMPUTING EARNINGS PER COMMON SHARE FOR 2020 ON THE 2021 COMPARATIVE INCOME STATEMENT

D. COMPUTE THE WEIGHTED AVERAGE NUMBER OF COMMON SHARES TO BE USED IN COMPUTING EARNINGS OER COMMON SHARE FOR 2021 ON THE 2021 COMPARATIVE INCOME STATEMENT

ADDITIONAL INFORMATION:

Prepare a statement of cash flows, in good form, for Nash Inc., using the direct method. Nash Inc. follows ASPE. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Ratchet Company uses budgets in controlling costs. The August 2020 budget report for the company’s Assembling Department is as follows.

The monthly budget amounts in the report were based on an expected production of 64,000 units per month or 768,000 units per year. The Assembling Department manager is pleased with the report and expects a raise, or at least praise for a job well done. The company president, however, is unhappy with the results for August because only 62,000 units were produced.

Prepare a budget report for August using flexible budget data. (List variable costs before fixed costs.)

Exercise 10-4 a-b (Video)

Myers Company uses a flexible budget for manufacturing overhead based on direct labor hours. Variable manufacturing overhead costs per direct labor hour are as follows.

Fixed overhead costs per month are Supervision $4,100, Depreciation $2,000, and Property Taxes $500. The company believes it will normally operate in a range of 7,100–12,800 direct labor hours per month.

Assume that in July 2020, Myers Company incurs the following manufacturing overhead costs.

(a) Prepare a flexible budget performance report, assuming that the company worked 10,900 direct labor hours during the month. (List variable costs before fixed costs.)

Please explain the treatment of each of the information provided. Explain why did you account /not account same in your calculation for the current tax.

Tiger Limited has profit before tax of R250 000 for the year ended 31 December 2019. When calculating this figure, the following information was correctly accounted for:

Ø Telephone payment of R5 000 is due for 2019 but has not yet been paid (deductible for tax purposes in the current year).

Ø Unearned sales income of R18 000 received in advance in respect of 2020 (taxable in the current year).

Ø Interest income of R7 000 is receivable (taxable in the current year).

Ø The rent for the first month in 2020 of R10 000 has already been paid (deductible for tax purposes in the current year).

Ø Dividend income of R12 000 was earned during 2019 (not taxable).

Ø A donation of R6 000 was paid during 2019 (not deductible for tax purposes).

Ø Depreciation of R40 000 was expensed during the year. The tax authority has calculated wear and tear to be R25 000.

The applicable tax rate is 30% on taxable profits. There are no other permanent or temporary differences other than those apparent from the above information. No dividends were declared during the year.

Calculate the current tax and show the related journal entries.

YOU SHOULD EXPLAIN the treatment of each of the information provided. Explain why did you account /not account same in your calculation for the current tax

question1

The balance sheet of Indian River Electronics Corporation as of December 31, 2020, included 13.25% bonds having a face amount of $90.4 million. The bonds had been issued in 2013 and had a remaining discount of $3.4 million at December 31, 2020. On January 1, 2021, Indian River Electronics called the bonds before their scheduled maturity at the call price of 104.

Required:
Prepare the journal entry by Indian River Electronics to record the redemption of the bonds at January 1, 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars.)

Question 2

The Bradford Company issued 12% bonds, dated January 1, with a face amount of $97 million on January 1, 2021. The bonds mature on December 31, 2030 (10 years). For bonds of similar risk and maturity, the market yield is 14%. 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)

Required:
1. Determine the price of the bonds at January 1, 2021.
2. to 4. Prepare the journal entries to record their issuance by The Bradford Company on January 1, 2021, interest on June 30, 2021 and interest on December 31, 2021 (at the effective rate).
a. Record the bond issuance by the Bedford Company.

b. Record the interest on June 30,2021(at the effective rate)

C. Record the interest on December 31,2021( at the effective rate).

Gold Star Ltd began operations on 1 July 2019. On that date the company purchased several non-current assets, details of which follow:

Additional information:

1. Insurance of $19,000 was paid for during the year. Of this amount, $13,200 is prepaid for next year.
2. The rent expense for the current year is $17,600, of which $4,600 was paid in cash. The balance was classified for accounting purposes as rent payable.
3. Employee Entitlements (Annual, Sck and Long Service Leave) totalling $8,000 were provided for during the year. No payments were made.

4. For year ended 30 June 2020 the profit before income tax was $47,500

5. Tax rate is 30%.

Question 1 Current Tax Schedule

Calculate taxable income and current tax liability using the schedule entitled “Current Tax Worksheet”. Provide the journal entry to record current tax liability. Exclude journal narrations.

Question 2 Deferred Tax Schedule

Complete the schedule entitled “Deferred Tax Worksheet” showing the calculation of deferred tax liabilities and deferred tax assets for the year ended 30 June 2020. Note that not all cells will be required to be filled. Provide journal entries to record deferred tax assets and/or deferred tax liabilities (if any). Do not offset deferred tax assets against deferred tax liabilities. Exclude journal narrations.

Gold Star Ltd began operations on 1 July 2019. On that date the company purchased several non-current assets, details of which follow:

Additional information:

1. Insurance of $19,000 was paid for during the year. Of this amount, $13,200 is prepaid for next year.
2. The rent expense for the current year is $17,600, of which $4,600 was paid in cash. The balance was classified for accounting purposes as rent payable.
3. Employee Entitlements (Annual, Sck and Long Service Leave) totalling $8,000 were provided for during the year. No payments were made.

4. For year ended 30 June 2020 the profit before income tax was $47,500

5. Tax rate is 30%.

Question 1 Current Tax Schedule

Calculate taxable income and current tax liability using the schedule entitled “Current Tax Worksheet”. Provide the journal entry to record current tax liability. Exclude journal narrations.

Question 2 Deferred Tax Schedule

Complete the schedule entitled “Deferred Tax Worksheet” showing the calculation of deferred tax liabilities and deferred tax assets for the year ended 30 June 2020. Note that not all cells will be required to be filled. Provide journal entries to record deferred tax assets and/or deferred tax liabilities (if any). Do not offset deferred tax assets against deferred tax liabilities. Exclude journal narrations.