Raziq uses accrual basis accounting to record his business expenses and revenues. He closes his accounts on 31 December every year. Which of the following explains the accrual basis accounting? *

a.All business expenses are recorded when cash has been spent.

b.The pay period for hourly employees ends on 27 December, but the employees continue to earn wages through December 31, which are paid to them on 5th January 2020. The business should not record the wages within the year when the employee earned it.

c.A salesman earns a 10% commission on sales shipped and recorded in December 2019. The commission of RM5,000 is paid in January 2020. The business should record the commission expense in December 2019.

d.Invoice issued to a client for RM10,000 in December 2019 and received in January 2020, should be recorded as part of 2020 income

Exercise 21-17 (Part Level Submission)

On January 1, 2020, Marin Co. leased a building to Cullumber Inc. The relevant information related to the lease is as follows.

a.  

Prepare the journal entries that Nelson should make in 2020.

b.  

Prepare the journal entries that Wise should make in 2020.

1. A U.S. company sells to customers in Canada and buys from suppliers in Singapore. At December 31, 2019, the company’s year-end, the following items are reported on its balance sheet:

Accounts receivable (C$2,500,000)..…………………… $2,125,000

Accounts payable(S$1,400,000)………………………….. 1,061,200

On January 22, 2020, when the spot rate is $0.845/C$, the company collects C$1,000,000 from customers. It collects the remaining C$1,500,000 on February 16, 2020, when the spot rate is $0.856. On February 23, 2020, when the spot rate is $0.762, the company pays suppliers S$800,000. On March 6, 2020, when the spot rate is $0.768, the company pays suppliers the remaining S$600,000. Using the attached T-account template, record the 12/31/19 balances (labeled “BAL”) and then prepare the necessary entries to recognize the above transactions.

On January 1, 2020, Barber Corp. paid $1,160,000 to acquire Thompson Co. Thompson maintained separate incorporation. Barber used the equity method to account for the investment. The following information is available for Thompson’s assets, liabilities, and stockholders' equity accounts on January 1, 2020:

Thompson earned net income for 2020 of $134,000 and paid dividends of $51,000 during the year.

At the end of 2020, the consolidation entry to eliminate Barber’s accrual of Thompson’s earnings would include a credit to Investment in Thompson Co. for

solve based calculation question

On 1 January 2019, Candid PLC Corporation applied for a patent, incurring legal costs of $32,000. In January 2020, Candid PLC incurred $14,000 of legal fees in a successful defense of its patent right. Consider the following independent situations.

a. Compute 2019 amortization, year-end book value, 2020 amortization, and year-end book value if the company amortizes the patent over 8 years.

b. Compute the 2020 amortization and the year-end book value, assuming that at the beginning of 2020, Candid PLC determines that the patent will provide no future benefits beyond December 31, 2022.

c. Compute the 2021 amortization and the year-end book value, assuming that at the beginning of 2021, based on new market research, Candid PLC determines that the recoverable amount of the patent is $24,000.

On January 1, 2019, Hart Corporation purchased 1,000 of ABC 8%, P1,000 callable bonds for P877,068, which represented a 10% effective interest rate. The bonds are dated January 1, 2019, and mature on January 1, 2029. Interest is payable annually on January 1. On January 1, 2020, Hart sold half of the bonds at 101. Assume that Hart uses the effective interest method of amortization and that its fiscal year ends December 31 Instruction: Determine the following:

1. Interest income for the year ended December 31, 2019

2. Carrying value of the bonds as of December 31, 2019

3. Interest income for the year ended December 31, 2020

4. Carrying value of the bonds as of December 31, 2020

5. Gain or loss on sale of the bonds.

6. Give the entry to adjust the allowance for doubtful accounts at December 31, 2020.

The DeVille Company reported pretax accounting income on its income statement as follows: 2018 $ 355,000 2019 275,000 2020 345,000 2021 385,000 Included in the income of 2018 was an installment sale of property in the amount of $30,000. However, for tax purposes, DeVille reported the income in the year cash was collected. Cash collected on the installment sale was $12,000 in 2019, $15,000 in 2020, and $3,000 in 2021. Included in the 2020 income was $10,000 interest from investments in municipal bonds. The enacted tax rate for 2018 and 2019 was 30%, but during 2019 new tax legislation was passed reducing the tax rate to 25% for the years 2020 and beyond. Required: Prepare the year-end journal entries to record income taxes for the years 2018–2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

he inventory of Sandhill Company on December 31, 2020, consists of the following items.

^a Part No. A999 is obsolete and has a realizable value of $1 each as scrap.

(a) Determine the inventory as of December 31, 2020, by the LCNRV method, applying this method to each item.

(b) Determine the inventory by the LCNRV method, applying the method to the total of the inventory.

The DeVille Company reported pretax accounting income on its income statement as follows:
   

   
Included in the income of 2018 was an installment sale of property in the amount of $34,000. However, for tax purposes, DeVille reported the income in the year cash was collected. Cash collected on the installment sale was $13,600 in 2019, $17,000 in 2020, and $3,400 in 2021.

Included in the 2020 income was $12,000 interest from investments in municipal bonds.

The enacted tax rate for 2018 and 2019 was 30%, but during 2019 new tax legislation was passed reducing the tax rate to 25% for the years 2020 and beyond.

Required:
Prepare the year-end journal entries to record income taxes for the years 2018–2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

The DeVille Company reported pretax accounting income on its income statement as follows:
   

   
Included in the income of 2018 was an installment sale of property in the amount of $54,000. However, for tax purposes, DeVille reported the income in the year cash was collected. Cash collected on the installment sale was $21,600 in 2019, $27,000 in 2020, and $5,400 in 2021.

Included in the 2020 income was $22,000 interest from investments in municipal bonds.

The enacted tax rate for 2018 and 2019 was 30%, but during 2019 new tax legislation was passed reducing the tax rate to 25% for the years 2020 and beyond.

Required:
Prepare the year-end journal entries to record income taxes for the years 2018–2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.