Questions
Mike Brady purchased an apartment building on February 12, 2020, for a total of $3 million...
- Mike Brady purchased an apartment building on February 12, 2020, for a total of $3 million of which $800,000 was the value of the land on which the apartment building was located.
In addition, Mike purchased 7-year class new business equipment for $19,400 on October 11, 2020. He elects not to immediately expense the equipment under §179 and elects not to take the additional first-year depreciation.
Mike purchased no other business assets during 2020.
- Determine Mike’s depreciation on the apartment building for 2020.
b. Determine Mike’s depreciation on the equipment for 2020.
c. If Mike sells the apartment building on October 1, 2027, how much depreciation deduction will Mike take for the apartment building for 2027?
d. If Mike sells the equipment on December 28, 2021, how much depreciation deduction will Mike take for the equipment for 2021?
In: Accounting
a. A house is worth $400,000 in 2020, but was worth $150,000 in 1990. Using prices...
a. A house is worth $400,000 in 2020, but was worth $150,000 in 1990. Using prices in 1990 as the base year, know that prices in the economy have grown on average by 1.50 times between 1990 and 2020.
(i) If the price of the house had risen at the same rate as average prices, what would the house be worth in 2020? Briefly explain your answer.
(ii) Without doing any calculations, but simply based on information in the question and your response in (i), would you be better off having bought this house in 1990 or 2020? Briefly justify your answer.
(iii) Calculate the rate of inflation between 1990 and 2020.
b. Assume wage negotiations are done and agreed based on the CPI. Briefly explain what happens to employers and employees when the CPI is upwardly biased (i.e. the CPI is estimated to be higher than what it should be).
In: Economics
Jefferson County’s General Fund began the year 2020 with the following account balances
Jefferson County’s General Fund began the year 2020 with the following account balances:
During 2020, Jefferson experienced the following transactions:
1. The budget was passed by the County Commission, providing estimated revenues of $286,000 and appropriations of $233,000 and estimated other financing uses of $40,000.
2. Encumbrances totaling $4,800 outstanding at December 31, 2019, were re-established.
3. The Deferred Inflows—Property Taxes at December 31, 2019, is recognized as revenue in the current period.
4. Property taxes in the amount of $288,000 were levied by the County. It is estimated 0.5 percent (1/2 of 1 percent) will be uncollectible.
5. Property tax collections totaled $263,400. Accounts totaling $1,850 were written off as uncollectible.
6. Encumbrances were issued for supplies in the amount of $37,100.
7. Supplies in the amount of $40,500 were received. Jefferson County records supplies as an asset when acquired. The related encumbrances for these items totaled $41,000 and included the $4,800 encumbered last year. The County paid $38,100 on accounts payable during the year.
8. The County contracted to have alarm systems (capital assets) installed in the administration building at a cost of $42,900. The systems were installed and the amount was paid.
9. Paid wages totaling $135,900, including the amount payable at the end of 2019. (These were for general government operations.)
10. Paid other general government operating items of $7,600.
11. The General Fund transferred $39,800 to the debt service fund in anticipation of bond interest and principal payments. Additional Information
12. Wages earned but unpaid at the end of the year amounted to $890.
13. Supplies of $350 were on hand at the end of the year. (Supplies are used for general government operations.)
14. A review of property taxes receivable indicates that $23,000 of the outstanding balances would likely be collected more than 60 days after year-end and should be deferred.
Required:
Use the Excel template provided on the textbook website to complete the following requirements. A separate tab is provided in Excel for the following
items:
a. Prepare journal entries to record the information described in items 1 to 14. Classify expenditures in the General Fund as either General Government or Capital Outlay. Make entries directly to these and the individual revenue accounts; do not use subsidiary ledgers.
b. Post these entries to T-accounts.
c. Prepare closing journal entries; post to the T-account provided. Classify fund balances assuming there are no restricted or committed net resources and the only assigned net resources are the outstanding encumbrances.
d. Prepare a Statement of Revenues, Expenditures, and Changes in Fund Balance for the General Fund for the year ending 2020. Use Excel formulas to calculate the cells shaded in blue.
e. Prepare a Balance Sheet for the General Fund as of December 31, 2020.
Journal Entries
| Jefferson County | |||
| General Fund Journal Entries | |||
| December 31, 2020 | |||
| Item # | Account Title | Debits | Credits |
| ALLOWANCE FOR | |||||||||||||||
| CASH | TAXES RECEIVABLE | UNCOLLECTIBLE TAXES | SUPPLIES | ||||||||||||
| bb | 146,348 | bb | 32,220 | 1,900 | bb | bb | 1,660 | ||||||||
| 32,220 | 1,900 | 1,660 | |||||||||||||
| 146,348 | |||||||||||||||
| DEFERRED INFLOWS - | |||||||||||||||
| ACCOUNTS PAYABLE | PROPERTY TAXES | WAGES PAYABLE | FUND BALANCE | ||||||||||||
| - | bb | 21,000 | bb | 570 | bb | 156,758 | bb | ||||||||
| - | 21,000 | 570 | 156,758 | ||||||||||||
| GENERAL GOVERNMENT | CAPITAL | OTHER FINANCING USES | |||||||||||||
| EXPENDITURES | EXPENDITURES | PROPERTY TAX REVENUE | TRANSFERS OUT | ||||||||||||
In: Accounting
1.- Warnerwoods Company uses a perpetual inventory system. It entered into the following purchases and sales...
1.- Warnerwoods Company uses a perpetual inventory system. It entered into the following purchases and sales transactions for March.
| Date | Activities | Units Acquired at Cost | Units Sold at Retail | |||||||||
| Mar. | 1 | Beginning inventory | 160 | units | @ $52.20 per unit | |||||||
| Mar. | 5 | Purchase | 255 | units | @ $57.20 per unit | |||||||
| Mar. | 9 | Sales | 320 | units | @ $87.20 per unit | |||||||
| Mar. | 18 | Purchase | 115 | units | @ $62.20 per unit | |||||||
| Mar. | 25 | Purchase | 210 | units | @ $64.20 per unit | |||||||
| Mar. | 29 | Sales | 190 | units | @ $97.20 per unit | |||||||
| Totals | 740 | units | 510 | units | ||||||||
1. Compute the cost assigned to ending inventory using (a) FIFO, and (b) LIFO
.
.
2. -Laker Company reported the following January purchases and sales data for its only product.
| Date | Activities | Units Acquired at Cost | Units sold at Retail | |||||||||||||||
| Jan. | 1 | Beginning inventory | 230 | units | @ | $ | 15.50 | = | $ | 3,565 | ||||||||
| Jan. | 10 | Sales | 180 | units | @ | $ | 24.50 | |||||||||||
| Jan. | 20 | Purchase | 190 | units | @ | $ | 14.50 | = | 2,755 | |||||||||
| Jan. | 25 | Sales | 220 | units | @ | $ | 24.50 | |||||||||||
| Jan. | 30 | Purchase | 360 | units | @ | $ | 14.00 | = | 5,040 | |||||||||
| Totals | 780 | units | $ | 11,360 | 400 | units | ||||||||||||
The Company uses a perpetual inventory system. For specific
identification, ending inventory consists of 380 units, where 360
are from the January 30 purchase, 5 are from the January 20
purchase, and 15 are from beginning inventory.
Required:
2. Complete the table to determine the cost
assigned to ending inventory and cost of goods sold using specific
identification.
|
|||||||||||||||||||||
| Purchase Date | Activity | Units | Units Cost | Units Sold | Unit Cost | COGS | Ending inventory units | Cost per unit | Ending Inventory Cost |
| Jan 1 | Beg. Inventory | 230 | |||||||
| Jan 20 | Purchase | 190 | |||||||
| Jan 30 | Purchase | 360 | |||||||
| Total = | 780 |
In: Accounting
You have just been hired by the Transnational Electronics (TE) Corporation, an international retail electronics company,...
You have just been hired by the Transnational Electronics (TE) Corporation, an international retail electronics company, as their Human Resources Director. You report to the Chief Human Resource officer of the company. TE has over 900 hundred employees in 11 different nations, including Mexico. They have revenues in excess of 1 billion US dollars per year. Your Boss has given you instructions to hire a Training and Development Specialist for the Mexico City, Mexico regional office. Please define the purpose of the HR Training and Development specialist and why does this job exist? Where does it fit into the HR function and how does it relate to the corporate structure? What are the differences between this position in the U.S. and one in Mexico City?
In: Operations Management
Use the following Average Return and Standard Deviation numbers for each of the asset classes below...
Use the following Average Return and Standard Deviation numbers for each of the asset classes below to calculate the range of one standard deviation from the mean for each asset class. To provide an example, the range has been calculated for Large Corporate Stocks.
Average Standard
Asset Class Return Deviation Range
Large Company Stocks 11.9% 20.4% (8.5)% to 32.2%
Small Company Stocks 16.7 32.6 ___________
Long-term Corporate Bonds 6.2 8.3 ___________
Long-term Government Bonds 5.9 9.5 ___________
Intermediate-term Govt. Bonds 5.5 5.7 ___________
U.S. Treasury Bills 3.7 3.1 ___________
Inflation Rate 3.1 4.2 ___________
Using the information in the previous problem, what is the risk premium for Long-term Corporate Bonds?
In: Finance
GETFIT Ltd, a retail sports equipment company, commenced operations on 10 May 2019 by issuing 200...
GETFIT Ltd, a retail sports equipment company, commenced operations on 10 May 2019 by issuing 200 000 $1.25 shares, payable in full on application on a first-come, first-served basis. By 20 June 2019 the shares were fully subscribed and duly allotted. There were no share issue costs. The company did not commence trading until 1 July 2019.
For the year ending 30 June 2020, the company recorded the following aggregate transactions:
|
$ |
|
|
Sales |
1 012 000 |
|
Interest income |
3 000 |
|
Cost of Sales |
651 000 |
|
Sundry income |
13 000 |
|
Employee entitlements expenses - Selling |
5 000 |
|
Depreciation expense-to be calculated |
|
|
Selling & Distribution Expenses |
82 000 |
|
Administration expenses |
26 000 |
|
Wages & Salaries - selling |
90 000 |
|
Wages & Salaries - office |
30 000 |
|
Doubtful debts expense |
8 000 |
|
Interest expense |
7 000 |
|
Other borrowing expenses |
3 000 |
|
Income tax expense |
28 500 |
The following additional information was noted during the preparation of financial statements for the year ended 30 June 2020:
(a) A cash dividend of 5 cents per share was declared and paid during the 2020 financial year and a final dividend for 2020 of $22 000 was proposed but not recognised in the financial statements.
(b) The land was revalued upward by $20 000 (related income tax 6 000) by Real Valuations Pty Ltd during the year ended 30 June 2020.
(c) Transferred $10 000 out of retained earnings into general reserve.
(d) $40 000 of other loans is repayable in one year.
(e) The Bank loan is for 5 years and repayable in full at the end of the term. The interest rate is 7% and it is secured over the land.
(f) The provision for employee entitlements includes $4 000 payable within 1 year.
(g) GETFIT Ltd uses the single statement format for the statement of profit or loss and other comprehensive income and classifies expenses by function within the statement.
(h) GETFIT Ltd measures inventory at the lower of cost and net realizable value. The cost model is applied to buildings, plant and equipment.
The following assets were purchased on 1 July 2019:
|
Asset |
Cost $ |
Useful life (years) |
|
Fixtures & Fittings |
150 000 |
5 |
|
Buildings |
80 000 |
20 |
Summarised account balances are provided below:
|
Year-end balances, 30 June 2020 |
$ |
|
Bank Overdraft |
12 000 |
|
Cash on hand |
3 500 |
|
Cash on deposit, at call |
59 700 |
|
Accounts receivable - trade |
48 000 |
|
Allowance for doubtful debts/ impairment |
8 000 |
|
Other receivables |
6 000 |
|
Inventories, 30 June 2020 |
46 000 |
|
Land |
60 000 |
|
Franchise |
100 000 |
|
Accumulated amortisation of franchise |
22 000 |
|
Debentures 10 year 4% |
60 000 |
|
Bank loans |
100 000 |
|
Other loans |
55 000 |
|
Accounts payable- trade |
30 000 |
|
Provision for employee entitlements |
5 000 |
|
Current tax liability |
25 900 |
|
Deferred tax assets |
4 500 |
|
Deferred tax liability |
8 300 |
|
Retained earnings Transfer to General Reserve |
10 000 |
|
Share Capital |
250 000 |
|
Dividends paid |
10 000 |
|
Land revaluation surplus |
14 000 |
- Prepare appropriate notes to the accounts. (You do not need to prepare notes related to income taxes. Include the following note as note 1. You may optionally add accounting policies to this note):
“1. Summary of significant accounting policies
Basis of accounting
The financial report is a general purpose financial report which has been prepared on the historical cost basis, except where stated otherwise.
Statement of Compliance
The financial statements have been prepared in accordance with the requirements of the Corporations Act, Australian Accounting Standards which include Australian equivalents to International Financial Reporting Standards (AIFRSs) and AASB Interpretations. Compliance with AIFRSs ensures the financial statements and notes comply with International Financial Reporting Standards”
In: Accounting
LATITUDES COMPANY Adjusted Trial Balance For the Month Ended June 30, 2020 Account Titles Debits Credits...
LATITUDES COMPANY
Adjusted Trial Balance
For the Month Ended June 30, 2020
|
Account Titles |
Debits |
Credits |
|
Cash |
$ 3,200 |
|
|
Accounts Receivable |
3,900 |
|
|
Supplies |
500 |
|
|
Accounts Payable |
$ 1,800 |
|
|
Unearned Service Revenue |
200 |
|
|
Share Capital-Ordinary |
4,000 |
|
|
Retained Earnings |
800 |
|
|
Dividends |
300 |
|
|
Service Revenue |
5,100 |
|
|
Salaries and Wages Expense |
1,800 |
|
|
Miscellaneous Expense |
300 |
|
|
Supplies Expense |
2,300 |
|
|
Salaries and Wages Payable |
|
400 |
|
$12,300 |
$12,300 |
Q. Prepare a post-closing trial balance.
In: Accounting
Exercise 12-12 On July 1, 2020, Pina Corporation purchased Young Company by paying $255,400 cash and...
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In: Accounting
Angela, Inc., holds a 90 percent interest in Corby Company. During 2020, Corby sold inventory costing...
Angela, Inc., holds a 90 percent interest in Corby Company. During 2020, Corby sold inventory costing $99,900 to Angela for $111,000. Of this inventory, $56,600 worth was not sold to outsiders until 2021. During 2021, Corby sold inventory costing $96,800 to Angela for $121,000. A total of $51,500 of this inventory was not sold to outsiders until 2022. In 2021, Angela reported separate net income of $219,000 while Corby's net income was $114,500 after excess amortizations. What is the noncontrolling interest in the 2021 income of the subsidiary?
In: Accounting