Mourinho Company is indebted to Guardiola Bank under a $550,000, 12%, three-year note dated December 31, 2018. Because of Morinho's financial difficulties developing in 2020, Mourinho owed accrued interest of $65,000 on the note at December 31, 2020. Under a troubled debt restructuring, on December 31, 2020, Guardiola agreed to settle the note and accrued interest for a building having a fair value of $410,000. The building has a cost of $820,000 and accumulated depreciation of $308,000. How much gain/loss on the disposition of land and on restructuring of debt should Mourinho record, respectively?
In: Accounting
During 2020, Sandhill Company started a construction job with a contract price of $1,590,000. The job was completed in 2022. The following information is available.
|
2020 |
2021 |
2022 |
||||
|---|---|---|---|---|---|---|
|
Costs incurred to date |
$424,200 | $885,330 | $1,060,000 | |||
|
Estimated costs to complete |
585,800 | 207,670 | –0– | |||
|
Billings to date |
299,000 | 908,000 | 1,590,000 | |||
|
Collections to date |
273,000 | 819,000 | 1,435,000 |
Part 1
Compute the amount of gross profit to be recognized each year, assuming the percentage-of-completion method is used.
|
Gross profit recognized in 2020 |
$ |
|
|---|---|---|
|
Gross profit recognized in 2021 |
$ |
|
|
Gross profit recognized in 2022 |
$ |
In: Accounting
9) For the 2019 tax returns, indicate when the statute of limitations expires and why. a. Phoenix filed his tax return on February 28, 2020. b. Jill and Randy filed their tax return on August 16, 2020. c. Although required to file, Catherine chose not to file a tax return this year because she was expecting a tax refund and could not pull together all the information needed to file the return. d. Jerry filed his tax return on May 22, 2020, but has accidentally underreported his taxable income by 30 percent.
In: Accounting
Southern Corporation began operations in January 2019 and purchased a machine for $120,000 at that time. Southern uses straight-line depreciation over a four-year period for financial reporting purposes. For tax purposes, the deduction is 50% of cost in 2019, 30% in 2020, and 20% in 2021. Pretax accounting income for 2020 – which is the SECOND year of using this machine – is $150,000, which includes interest revenue of $20,000 from municipal bonds. The enacted tax rate is 30% for all years. There are no other differences between accounting and taxable income.
Prepare the JE for 2020
In: Accounting
Ajax Products, Inc., reported an excess of warranty expense over warranty deductions of $72,000 for the year ended December 31, 2020. This temporary difference will reverse in equal amounts of $24,000 in years 2021, 2022, and 2023. The enacted tax rates are as follows: 2020: 40%; 2021: 25%; 2022: 21%; 2023: 20%. The reporting for this temporary difference at December 31, 2020, would be a
Question 4 options:
|
deferred tax liability of $15,840. |
|
|
deferred tax liability of $28,800. |
|
|
deferred tax asset of $28,800. |
|
|
deferred tax asset of $15,840. |
In: Accounting
Creprie Ltd acquired all the shares in Bretonne Ltd on 30 June 2020. At the date of acquisition Bretonne Ltd had a dividend payable of $42,000. The shares are acquired cumulative div. The dividend is paid on 8 July 2020. Which of the following statements is correct?
As Creperie Ltd does not receive the dividend when it is paid, no consolidation adjusting entry is required to eliminate the dividend payable and dividend receivable account at the date of acquisition. | ||
As Creprie Ltd receives the dividend when it is paid, no consolidation entries are required to eliminate dividend payable and dividend receivable at 30 June 2020. | ||
As Creprie Ltd receives the dividend when it is paid, a consolidation adjusting entry is required to credit the dividend receivable at 30 June 2020. | ||
As Creprie Ltd receives the dividend when it is paid, a consolidation adjusting entry is required to debit the dividend payable at 30 June 2021. |
In: Accounting
Exercise 15-08
The following are two independent situations.
| 1. | Sheridan Corporation redeemed $123,100 face value, 8% bonds on June 30, 2020, at 107. The carrying value of the bonds at the redemption date was $109,100. The bonds pay annual interest, and the interest payment due on June 30, 2020, has been made and recorded. | |
| 2. | Tastove Inc. redeemed $144,000 face value, 15.00% bonds on June 30, 2020, at 96. The carrying value of the bonds at the redemption date was $146,000. The bonds pay annual interest, and the interest payment due on June 30, 2020, has been made and recorded. |
For each independent situation above, prepare the appropriate
journal entry for the redemption of the bonds. (Credit
account titles are automatically indented when amount is entered.
Do not indent manually.)
No. | Account Titles and Explanation | Debit | Credit |
1. | |||
2. | |||
In: Accounting
The following are two independent situations.
| 1. | Crane Corporation redeemed $137,100 face value, 12% bonds on June 30, 2020, at 108. The carrying value of the bonds at the redemption date was $123,600. The bonds pay annual interest, and the interest payment due on June 30, 2020, has been made and recorded. | |
| 2. | Tastove Inc. redeemed $153,000 face value, 17.50% bonds on June 30, 2020, at 98. The carrying value of the bonds at the redemption date was $155,000. The bonds pay annual interest, and the interest payment due on June 30, 2020, has been made and recorded. |
For each independent situation above, prepare the appropriate
journal entry for the redemption of the bonds. (Credit
account titles are automatically indented when amount is entered.
Do not indent manually.)
|
No. |
Account Titles and Explanation |
Debit |
Credit |
|
1. |
|||
|
2. |
|||
In: Accounting
Flint Corp. sponsors a defined benefit pension plan for its
employees. On January 1, 2020, the following balances relate to
this plan.
| Plan assets | $470,900 | ||
| Projected benefit obligation | 609,900 | ||
| Pension asset/liability | 139,000 | ||
| Accumulated OCI (PSC) | 99,800 | Dr. |
As a result of the operation of the plan during 2020, the following
additional data are provided by the actuary.
| Service cost | $93,800 | |
| Settlement rate, 10% | ||
| Actual return on plan assets | 54,500 | |
| Amortization of prior service cost | 19,800 | |
| Expected return on plan assets | 51,300 | |
| Unexpected loss from change in projected benefit
obligation, due to change in actuarial predictions |
74,300 | |
| Contributions | 99,100 | |
| Benefits paid retirees |
85,600 |
Using the data above, compute pension expense for Flint Corp. for the year 2020 by preparing a pension worksheet.
Prepare the journal entry for pension expense for 2020.
In: Accounting
KLM reported net income of 2 million and made dividend distributions of 1 million during the year ending 12/31/2020
Assuming XYZ is using the EQUITY METHOD for this investment
In: Accounting