Bramble Corporation purchased a new machine for its assembly process on August 1, 2020. The cost of this machine was $150,900. The company estimated that the machine would have a salvage value of $15,900 at the end of its service life. Its life is estimated at 5 years, and its working hours are estimated at 22,500 hours. Year-end is December 31.

Compute the depreciation expense under the following methods. Each of the following should be considered unrelated. (Round depreciation rate per hour to 2 decimal places, e.g. 5.35 for computational purposes. Round your answers to 0 decimal places, e.g. 45,892.)

The spot price for gas today (March 19, 2020) is $1.661 MMBtu.  The futures price today for gas to be delivered in June 2021 is $2.245.  Your company is a gas purchaser/user and is interested in the hedging process.

1. You are a speculator and believe the price of gas will increase.  You have a chance to buy a June 2021 futures contract at $2.245.  Would you go short or go long on a June 2021 futures contract for 10,000 MMBtus?  

2. It is now December 31, 2020 On this day, the spot price for natural gas is $2.450 per MMBtu and the June 2021 futures price is $2.310 per MMBtu.  What is the amount of gain or loss related to your contract as of December 31, 2020?

3. As a speculator the last thing you want to do is either take delivery of or actually sell natural gas.  Explain how you would get out of the contract you purchased in part e. prior to the June 2021 delivery date.

Required     

(a) Calculate the depreciation expense using the straight-line method for 2019 and 2020.
(b) Calculate the depreciation expense using the diminishing-balance method and a depreciation rate of 25% for 2019 and 2020.
(c) Calculate the depreciation expense using the units-of-production method for 2019, assuming the machine usage was 1,820 hours
(d) On 31 December 2020 the company discarded a delivery truck that was purchased on 1 January 2016 for $23,980 cash (including
GST of 10%) and was depreciated on a straight line basis with a useful life of 6 years and a residual value of $2180 (excluding GST).
What was the profit or loss on the scrapping of the truck?

Use the following information to answer MCQ21 to MCQ23

On January 1st, 2018, Crane Construction Corporation signed a contract to construct a building with a contract price of $18,000,000. The company expects to get this contract completed by 2020. Crane uses the percentage of completion method Information relating to the costs, billings, and collections for this contract is as follows:

                                                                             2018                   2019                  2020   

Total costs incurred to date                            $4,500,000            $7,920,000          $13,800,000

Estimated costs to complete                            7,500,000              5,280,000                     -0-

Customer billings to date                                  6,600,000            12,000,000            16,800,000

Collections to date                                            6,000,000            10,500,000            16,500,000

What is the percentage of completion for the year 2019?

Select one:

a. 0.26

b. 0.375

c. 0.66

d. 0.60

What is the gross profit that Crane Cor to recognize in 2020?

Select one:

a. $4,200,000

b. $2,250,000

c. $6,000,000

d. $1,320,000

How much the cost incurred in the year 2019 only:

Select one:

a. $7,920,000

b. $13,200,000

c. $3,420,000

d. $5,280,000

On July 1, 2018 a full year’s insurance premium of $2,400, covering the period July 1, 2018,to June 30, 2019 was paid and debited to insurance expense. Assume the following:



The company has a calendar fiscal year.



January 1, 2018, retained earnings balance is $20,000.



2018 reported net income (assuming the error is not discovered)is $22,800.



2019 net income (assuming the error is not discovered) is $30,000.



2020 net income is $40,000. Ignore taxes

REQUIRED:

a.

List the effects of the error on affected accounts and on net income in 2018 and 2019,assuming no adjusting entry is made on December 31, 2018.

b.

Prepare the entry to record the error if discovered in 2018.

c.

Prepare the entry to record the error if discovered in 2019, and the 2018 and 2019 retained earnings sections of the statement of stockholders’ equity.

d.

Prepare the entry (if needed) to record the error if discovered in 2020, and the 2019 and 2020 retained earnings sections of the statement of stockholders’ equity.

On February 1, 2020 Britney contacts Fancy Weddings, Inc. about being the event management company to coordinate her wedding in June 2020. They discuss what Britney is interested in for the wedding and agree to perform all the wedding services at a cost of $10,000. Fancy sends a written contract to Britney outlining everything both parties had agreed to and Britney calls Fancy back and advises she received the letter and is an accurate description of their agreement, but Britney never signs the contract. On March 1, 2020 Britney calls back Fancy and tells them the deal is off because she thinks she can do a better job by herself. Fancy sues Britney and Britney argues a lack of consideration as a defense.

A. Will this defense be successful? Please explain.

B. Under the same facts as above Britney argues that the contract is not binding because of the Statute of Frauds. Will this defense be successful? Please explain.

Calculate the total depreciation for these various assets - All assets are business use. Joe purchased a 5 year asset for $1,190,000 on 6/13/2020. Joe wants to take the maximum amount of Sec 179 depreciation as possible. Taxable income for 2020 was $1,125,000. Calculate the depreciation expense for 2020. Joe sold the asset in 2021. Additional first year depreciation was not taken in 2020. Calculate the depreciation for 2021. 2020: 2021:

Case Study Pork from Canada Case Name and tribunal Fresh, chilled, or Frozen pork from Canada (ECC, 1991) Facts In 1990, the US International trade Commission found that the US domestic pork industry was threatened with material injury from imports of fresh, chilled, or frozen pork from Canada. In reviewing the decision of the U.S. International Trade Commission, the binational panel remanded the decision to the ITC with instructions to re-determine the matter. The panel had determined that the ITC erred in reviewing evidence outside the scope of what it ought to have reviewed.

Issue

Did the binational panel seriously depart from a fundamental rule of procedure or manifestly exceed its powers, authority or jurisdiction in instructing the ITC to re-determine the matter with a reduction in the evidence it should consider ?

Assume that your company or agency is concerned about near-term economic conditions and wishes to obtain a qualitative forecast of sales or service in the upcoming quarter. Assume also that you are the market analyst for your company or agency planning to use one or more of the leading economic indicators (LEI) published by the US Department of Commerce to formulate your qualitative forecast. You can Google TheLeading Economic Indicator

You’ve just won the lottery which promises to pay you $5,000 per month for the next 30 years, starting in one month. The lottery company is require to buy US Treasury securities to guarantee that it can meet its obligation to you. If Treasury securities earned 5% APR compounded monthly, how much would the lottery company have to invest today to cover its obligation?