Fill in blanks and true or false

1.To start a corporation in the U.S., it is necessary to file an application in one of the states. The legal document that the state approves is the
____.

2.One of the advantages of the corporation form of business as opposed to a partnership form is the ease of transferring
____.

3.At a corporation, Assets minus Liabilities is____.

4.Shares of stock that have been issued and have not been reacquired by the issuing corporation are called
____ shares.

5.If a corporation has issued only one type of stock, it is
____ stock.

6.The type of stock that gets its dividend before the common stock gets its dividend is called
____stock.

7.The holders of____ stock elect the corporation's board of directors.

8.The par value of____ stock usually has no economic significance.

9.The dividend on preferred stock is often expressed as a percentage. To calculate the annual dividend on preferred stock, you multiply the percentage times the
____ of the preferred stock.

10.If a corporation issues 10% Preferred Stock $100 Par on a day when the financial markets demand 9%, this corporation's 10% Preferred Stock will sell for
____ than its par value.

11.If a common stock does not have a par value or a stated value, the entire proceeds from issuing the stock is credited to one account entitled
____.

12.Stockholder's equity is subdivided into two major sections:
____ and____.
.
13.The net income of a corporation is closed to the
____account.

14.Dividends declared by a corporation reduce the
____ section of stockholders' equity.

15.Dividends appear as an expense on the corporation's income statement.

True
or
False

16.If the board of directors does not declare the regular quarterly divided on its common stock, the corporation's liabilities will include the omitted dividend.

True
or
False

17.The ____ date is the date on which the corporation records a liability for its quarterly dividend.

18.The____date determines which stockholders will receive a declared dividend.

19.If a corporation declares a small stock dividend, the account that will be reduced by a debit entry is
____.

20.A stockholder will have the same number of shares after a 3-for-2 stock split or after a
____% stock dividend.

21.A corporation's own shares of stock that have been reacquired from its stockholders but have not been retired are called
____.

22.The account, Treasury Stock, will have either a zero balance or a
____(debit, credit) balance.

23.If a share of treasury stock is sold for more than its cost, the difference is credited to
____.

24.Treasury stock sales can result in a loss on the corporation's income statement.

True
or
False

25.If preferred stockholders have the opportunity to receive more than the stated dividend percentage, the stock is described as
____ preferred stock.

Safe Inc. is a service firm that sells home security systems, which it installs and maintains. After the sales force makes initial contact with a new customer and completes the sale, setting up the new service requires two processes: (1) a home visit where the equipment is physically installed and (2) the remote connection from off-site at corporate headquarters. Given the different levels of skill and work required, Safe Inc. tracks costs separately for the Installation and Connection processes. Nevertheless, given the relative simplicity of these processes, Safe Inc. tracks them both on a single product cost report with one direct materials category for the equipment and two conversion cost categories for installation and connection services. Assume that all home installations are completed the same day they are started. After installation, there is sometimes a delay of up to two days before the remote connection is completed. However, in the ideal situation, both the home installation and connection are completed on the same day. What is Safe Inc.’s ending Cost of Contracts Completed and Incomplete Contracts for July, assuming it uses the FIFO costing method? Page 2 * The sales team closed 2,050 new security contracts during July. * Safe Inc. pays its suppliers $400, on average, to purchase one security system. However, the price experiences some variation due to fluctuations in suppliers cost of raw materials. * On average, the installation of each system requires approximately 3 labor hours and establishing and testing the connection requires 2 labor hours. However, Safe Inc. does encounter some variation across employees. * Labor and overhead costs for installation is approximately $20/hour. * Labor and overhead costs for connection costs approximately $35/hour. * Assume that the contracts outstanding at the beginning of July include $1,206 for equipment and $179 of installation costs. * Also assume that Safe Inc. actually incurs $816,270 for new equipment installed during July plus $119,652 of installation costs and $147,825 of connection-related costs. * At the beginning of July, Safe Inc. had 95 incomplete sales contracts. Of these incomplete contracts, 92 were awaiting both installation and connection and 3 had been installed but were still awaiting connection. * At the end of July, Safe Inc. had 120 incomplete sales contracts. Of these incomplete contracts, 114 jobs were awaiting both installation and connection and 6 jobs had been installed but were still awaiting connection.

In February 2020, Cullumber Construction signed a contract and commenced construction on a parking garage. The total contract price was $89.4 million and was expected to be completed in July 2024 at a total estimated cost of $82.1 million. Payment by the customer was to be made in several stages, based on significant events and dates throughout the construction timeline. The customer was to have control over the parking garage and was able to make major changes to the project during the construction process. Cullumber’s year-end was September 30.
By the end of September, 2020, Cullumber had incurred $20,525,000 in costs and had invoiced $10,000,000 in progress billings. $7,700,000 of the progress billings had been collected.

By September 30, 2021, Cullumber had incurred $35,190,000 in total costs and had invoiced $45,900,000 in progress billings, including the progress billings in 2020. Of the total billings, $30,700,000 in total had been collected. Also, Cullumber reviewed its cost estimates on the project, and now believed the parking garage would cost $78.2 million in total to complete.

Prepare all journal entries required for the year ended September 30, 2020. Use Materials, Cash, Payables for costs incurred to date. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Prepare all journal entries required for the year ended September 30, 2021. Use Materials, Cash, Payables for costs incurred to date. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Bramble Manufacturing Ltd. has signed a lease agreement with LPN Leasing Inc. to lease some specialized manufacturing equipment. The terms of the lease are as follows:

Click here to view the factor table PRESENT VALUE OF 1.
Click here to view the factor table PRESENT VALUE OF AN ANNUITY DUE.

From Bramble Manufacturing’s perspective, is this a capital or operating lease?

Prepare a lease amortization schedule for this lease. (Round answers to 0 decimal places, e.g. 5,275.)

Prepare the journal entries on Bramble Manufacturing’s books on January 1, 2020.

(To record lease payment.)(To record inception of lease.)

Prepare the journal entries on LPN Leasing’s books on January 1, 2020.

(To record inception of lease
and cost of goods sold.)

(Collection of lease payment.)

Prepare the journal entries for Bramble Manufacturing on December 31, 2020.

(To record interest.)

(To record depreciation expense.)

Prepare the journal entry on LPN Leasing’s books on December 31, 2020.

(To record interest.)

Record the following transactions on the books of Hope Hospital, which follows FASB (not-for-profit) and AICPA standards. The year is 2020. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

1. Hope received $69,000 in cash from pledges made in the previous year that were unrestricted as to purpose but intended to be received and expended in 2020.
2. Hope received $113,000 in pledges that indicated the money would be received in 2021. The donors imposed no restrictions other than it could be used for any purpose desired by the board.
3. Hope expended $64,000 for nursing training, using $58,000 of donor restricted resources received in 2019 for that purpose.
4. On June 15, 2020, Hope was awarded a $75,000 grant for cancer research by the U.S. Department of Agriculture. During 2020, Hope had qualified expenses under the grant totaling $55,000. This is cost reimbursement, grant.
5. Hope received $306,000 in cash. The board decided to invest the funds for future plant expansion.

Complete the Journal entrys.

1aHope received $69,000 in cash from pledges made in the previous year that were unrestricted as to purpose but intended to be received and expended in 2020. Record the cash from the pledges made in the previous year.

1bHope received $69,000 in cash from pledges made in the previous year that were unrestricted as to purpose but intended to be received and expended in 2020. Record the reclassification of the pledges received in the previous year.

02Hope received $113,000 in pledges that indicated the money would be received in 2021. The donors imposed no restrictions other than it could be used for any purpose desired by the board.

3aRecord the expense on nursing training.

3bRecord the transfer from donor restricted resources that had been given in 2019 for the purpose of nurse training.

4aOn June 15, 2020, Hope was awarded a $75,000 grant for cancer research by the U.S. Department of Agriculture.

4bDuring 2020, Hope had qualified expenses under the grant totaling $55,000.

4cRecord the expenses reimbursed under the grant totaling $55,000.

5aRecord the receipt in cash.

5bRecord the investment of the funds for future plant expansion.

5cRecord the demarcation of net assets-unrestricted for plant expansion.

The 2020 inventory data for Garden Corporation’s patio furniture Bermuda set is presented below. Assume that Garden uses periodic inventory tracking.

When Garden examines the actual units in ending inventory, they see that 15 of the units are from 2020 beginning inventory, 20 units are from the 1/20/20 purchase, and 60 units are from the 6/15/20 purchase.  

1. What is Inventory on the 12/31/20 Balance Sheet if Garden uses Specific Identification?
   1. $223,500
   2. $221,600
   3. $29,400
   4. $27,500

2. What is Gross Profit on the 2020 Income Statement if Garden uses Weighted Average Cost?
   1. $251,000.00
   2. $221,193.75  
   3. $201,806.25   
   4. $29,806.25

3. In a period of falling prices, which of the following statements is true?
   1. FIFO produces a lower amount of net income than LIFO
   2. LIFO produces a lower cost for ending inventory than FIFO
   3. Average cost produces a higher net income than FIFO or LIFO
   4. LIFO produces a higher cost of goods sold than FIFO

4. Heavenly Rest, Inc. uses a periodic inventory system. When a warehouse supervisor counts the inventory on December 31, 2019, he accidentally counts one pile of blankets twice, resulting in 2019 ending inventory being overstated by $100,000. The warehouse supervisor counts the December 31, 2020 inventory correctly. Which of the following statements is true related to Heavenly Rest's 2019 and 2020 financial statements?
   1. 2019 Cost of Goods Sold will be understated by $100,000.
   2. 2020 Beginning Inventory will be understated by $100,000.
   3. 2020 Cost of Goods Sold will be overstated by $100,000.
   4. All of the above are true.
   5. Both a and c are true.

1)On January 1, 2020, Bramble Company purchased at face value, a $1210, 10% bond that pays interest on January 1. Bramble Company has a calendar year end.
The adjusting entry on December 31, 2020, is

not required

2)Marigold Inc. has 5200 shares of 5%, $100 par value, cumulative preferred stock and 49200 shares of $1 par value common stock outstanding at December 31, 2020. What is the annual dividend on the preferred stock?

3)

Waterway, Inc., has 9500 shares of 5%, $100 par value, noncumulative preferred stock and 95000 shares of $1 par value common stock outstanding at December 31, 2020. If the board of directors declares a $201500 dividend, the

A)preferred stockholders will receive the entire $201500.

b)preferred stockholders will receive $47500 and the common stockholders will receive $154000.

c)$47500 will be held as restricted retained earnings and paid out at some future date.

d)preferred stockholders will receive 1/10^th of what the common stockholders will receive.

4)

Outstanding stock of the Bramble Corporation included 19800 shares of $5 par common stock and 9900 shares of 6%, $10 par noncumulative preferred stock. In 2019, Bramble declared and paid dividends of $4200. In 2020, Bramble declared and paid dividends of $11000. How much of the 2020 dividend was distributed to preferred shareholders?

A)$6800

b)$4200

c)$5940

D)None of these answer choices are correct

5)

Outstanding stock of the Crane Corporation included 19000 shares of $5 par common stock and 4500 shares of 5%, $10 par noncumulative preferred stock. In 2019, Crane declared and paid dividends of $1500. In 2020, Crane declared and paid dividends of $5500. How much of the 2020 dividend was distributed to preferred shareholders?

1)$1500

2)$4000

3)$2250

4)None of these answer choices are correct

(you dont need to show the work just answer them)

Samson plc is registered for VAT.

The following information relates to the company’s VAT return for the quarter ended 31 March 2020:

1. Sales invoices totalling £330,000 were issued to VAT registered customers, of which £240,000 were for standard-rated sales and £90,000 were for zero-rated sales.

2. Samson plc offers its standard-rated customers a 5% discount for prompt payment. This discount was taken by 1/3 of the customers.

3. Purchase invoices totalling £154,000 were received from VAT registered suppliers, of which £136,000 were for standard-rated purchases and £18,000 for zero-rated purchases.

4. Standard-rated expenses amounted to £28,000. This includes £3,900 for entertaining UK customers.

5. On 15 March 2020, the company wrote off irrecoverable receivables of £4,000 and £1,680 in respect of invoices that were due for payment on 10 August 2019 and 5 November 2019 respectively.

6. On 11 January 2020, Samson plc purchased machinery for £24,000 and sold office fittings for £8,000. Input VAT had been claimed when the office fittings were originally purchased.
7. On 1 March 2020, Samson plc purchased a motor car costing £28,400 for the use of its finance director. The finance director is provided with free petrol for private mileage, and the cost of this is included in the standard-rated expenses in note (iv). The relevant quarterly scale charge is £432. Both figures are inclusive of VAT.

Unless stated otherwise, all of the figures above are exclusive of VAT.

YOU ARE REQUIRED TO:

1. Calculate the VAT payable by Samson plc for the quarter ended 31 March 2020 and state the payment due date.

2. Samson plc is experiencing cash-flow difficulties. The company submitted its VAT return and paid the VAT due for the quarter ended 31 December 2019 on 15 March 2020.

State the consequences if Samson plc does not submit the return for the quarter ended 31 March 2020 until 25 May 2020.

(maximum word count 80 words)

TOTAL 20 MARKS

UK TAX

(Supplemental Disclosures) It is February 2021 and Janix Corporation is preparing to issue financial statements for the year ended December 31, 2020. To prepare financial statements and related disclosures that are faithfully representative, Janix is reviewing the following events in 2020 and 2021:

1. In August 2020, Maddux Incorporated filed a lawsuit against Janix for alleged patent infringement, claiming $1.8 million in damages. In the opinion of Janix's management and legal counsel, it is not likely that damages will be awarded to Maddux.
2. In January 2021, there was a significant decline in the fair value of Janix's FV-NI investments, resulting in an unrealized holding loss of $720,000.
3. In January 2021, a customer filed a lawsuit against Janix for alleged breach of contract related to services provided in 2020. The customer is seeking damages of $950,000. Janix's legal counsel believes that Janix will likely lose the lawsuit and have to pay between $850,000 and $950,000.
4. In August 2020, Janix signed a contract to purchase 200,000 inventory units in August 2021 for a price of $12 per unit. According to the supplier's price list at December 31, 2020, the price per inventory unit had decreased to $10 per unit.
5. At December 31, 2020, Janix had a $1.1-million demand loan outstanding. The terms of the demand loan restrict Janix's payment of dividends to $2 per common share.
6. On January 31, 2021, Janix issued 100,000 new common shares, raising $2 million in new capital.
7. On January 28, 2021, management settled a dispute with the union of its factory workers. A strike had started on November 14, 2020. A portion of the settlement involved a lump sum payment to each worker in lieu of a retroactive adjustment in pay rate dating back to the beginning of the strike.
Janix prepares financial statements in accordance with IFRS.

Instructions
For each item above, indicate whether the event relates to a provision, contingency, commitment, or subsequent event, and explain the appropriate accounting treatment. If no adjustment or disclosure is required, explain why.

Stellar Company in its first year of operations provides the following information related to one of its available-for-sale debt securities at December 31, 2020.

What is the amount of the credit loss that Stellar should report on this available-for-sale security at December 31, 2020?

Prepare the journal entry to record the credit loss, if any (and any other adjustment needed), at December 31, 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Assume that the fair value of the available-for-sale security is $53,200 at December 31, 2020, instead of $40,200. What is the amount of the credit loss that Stellar should report at December 31, 2020?

Assume the same information as for part (c). Prepare the journal entry to record the credit loss, if necessary (and any other adjustment needed), at December 31, 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)