ABC Inc.

Statement of Income

For the period October 1, 2018 to September 30, 2019

Revenue                                                                                                                       $15,800,000

Operating Expenses:

Rent                                                                                                      1,350,000

Advertising expense                                                                       1,105,000

Bad Debts                                                                                             179,000

Salaries and wages                                                                         3,800,000           

Interest                                                                                                3,150,000

Accounting and legal                                                                         195,000

Meals and entertainment                                                            1,300,000

Amortization                                                                                         750,000

Repairs and maintenance                                                                500,000

Automotive                                                                                        2,120,000        

Net Income from Operations                                                                             1,351,000                                                   

Gain on disposal of asset                                                                                         350,000

Net income before taxes                                                                                      1,701,000  

Income Taxes                                                                                                               635,000

Net Income                                                                                                            $1,066,000

Additional Information relating to the preparation of the statement of income for the period:

1. Legal fees of $120,000 were accrued at September 30, 2019 to reflect an estimate of potential legal fees for a threatened lawsuit against the company.
2. The company paid XYZ Advertising Inc. a total of $600,000 for advertising services for the period. It was decided that $243,000 be expensed in the current period and the remaining amount be capitalized as the company will benefit from this outlay in the following year.
3. Included in salaries and wages is a bonus accrual to the shareholder in the amount of $1,250,000. This amount was paid to the shareholder with appropriate source deductions (Income tax, CPP) on March 30, 2020.
4. Included in interest expense is $23,500 of interest paid to CCRA for late tax installments.
5. Included in repairs and maintenance is an accrual of $185,000 that represents potential warranty work for defective items sold.
6. Automotive expenses consists of company owned and or leased vehicles provided to employees of the company to perform their employment duties.
7. During the period the company sold its land and building and moved into rental space. The company received $1,900,000 for the sale of the land and building. The land and building had an original cost of $350,000 and $950,000, respectively. The undepreciated capital cost (UCC) of the building at October 1, 2018 was $949,000.
8. For the period, the company is eligible to claim CCA of $340,000 on assets in various classes.

Problem 4-4 The following account balances were included in the trial balance of Pronghorn Corporation at June 30, 2017. Sales revenue $1,589,100 Depreciation expense (office furniture and equipment) $7,364 Sales discounts 32,320 Property tax expense 7,162 Cost of goods sold 903,300 Bad debt expense (selling) 5,229 Salaries and wages expense (sales) 57,960 Maintenance and repairs expense (administration) 8,940 Sales commissions 98,100 Office expense 6,140 Travel expense (salespersons) 34,000 Sales returns and allowances 62,236 Delivery expense 23,400 Dividends received 39,100 Entertainment expense 15,050 Interest expense 18,310 Telephone and Internet expense (sales) 9,090 Income tax expense 92,300 Depreciation expense (sales equipment) 5,162 Depreciation understatement due to error—2014 (net of tax) 17,506 Maintenance and repairs expense (sales) 5,990 Dividends declared on preferred stock 9,280 Miscellaneous selling expenses 5,066 Dividends declared on common stock 37,000 Office supplies used 3,460 Telephone and Internet expense (administration) 3,018 The Retained Earnings account had a balance of $331,960 at July 1, 2016. There are 82,400 shares of common stock outstanding.

Using the multiple-step form, prepare an income statement for the year ended June 30, 2017. (Round earnings per share to 2 decimal places, e.g. 1.48.)
Prepare a retained earnings statement for the year ended June 30, 2017. (List items that increase adjusted retained earnings first.)
Using the single-step form, prepare an income statement for the year ended June 30, 2017. (Round earnings per share to 2 decimal places, e.g. 1.48.)
Prepare a retained earnings statement for the year ended June 30, 2017. (List items that increase adjusted retained earnings first.)

Texas A&M decides to invite a high profile band to perform during graduation week at Kyle stadium since they anticipate a very high demand for entertainment during that time. After carefully considering Rolling Stones and Justin Bieber, the university decides that Rolling Stones are the better choice (no kidding!). The band agrees to perform at the modest price of $500,000 (paid after the concert). As a result of the agreement, the university sells $1,000,000 worth of tickets for the concert. Justin Bieber would have agreed to perform for $100,000, but would have generated only $400,000 in revenue. The university orders $20,000 worth of the band merchandise to give away in the weeks prior to the concert to advertise the event. They also spent $50,000 on an ice statue of the band positioned in front of the Evan's library that does not have any useful purpose besides looking cool. The day of the event, Rolling Stones cancels due to a rough night for the band partying in a local pub. The university is forced to reimburse people for their tickets and spends additional $200,000 to compensate out of town individuals for incidental expenses associated with attending the concert. The university sues the band for breach of contract.

You are hired to represent the university in the lawsuit. You insist that the appropriate damages for the university are expecation damages. What is the amount of the expectation damages to the university?

Given the reputation of the band, the court decides that opportunity cost damages are more appropriate in this case. What is the size of the opportunity cost damages? Assume that the $70,000 expense for the merchandise give away and the ice statue would not have been incurred if the university contracted with Bieber.

Suppose that the university is willing to settle for reliance damages. What is the amount of these damages?

The defense argues that the university's expense on the ice statue was unreasonable. They request the court to reward hypothetical expectation damages. If the court finds their argument convincing, what should be the amount of the hypothetical expectation damages awarded to the university?

Please read case and answer the question thank you.

Mark Zuckerberg, the founder of Facebook, once proclaimed in an interview that the “age of privacy” had to come to an end. According to Zuckerberg, social norms had changed and people were no longer worried about sharing their personal information with friends, friends of friends, or even the entire Web. This view is in accordance with Facebook’s broader goal, which is, according to Zuckerberg, to make the world a more open and connected place. Many Facebook features are premised on this position. Supporters of Zuckerberg’s viewpoint believe the 21st century is an age of “information exhibitionism,” a new era of openness and transparency.Facebook has a long history of invading the personal privacy of its users. In fact, the very foundation of Facebook’s business model is to sell the personal information of its users to advertisers. In essence, Facebook is like any broadcast or cable television service that uses entertainment to attract large audiences, and then once those audiences are in place, to sell air time to advertisers in 30- to 60-second blocks. Of course, television broadcasters do not have much if any personal information on their users, and in that sense are much less of a privacy threat. Facebook, currently with almost 1.8 billion users worldwide, clearly attracts a huge audience.Although Facebook started out at Harvard and other campuses with a simple privacy policy of not giving anyone except friends access to your profile, this quickly changed as its founder Mark Zuckerberg realized the revenue-generating potential of a social networking site open to the public.

1.Do people who use Facebook have a legitimate claim to privacy when they themselves are posting information about themselves?

2. How will changing your settings on Facebook help protect your privacy?

3. How can you prevent your Timeline from being indexed by Google or other search engines?

Jester Company began operations on January 1, 2018. The company had the following transactions in its first year of business: •

January 4: Owners invested $120,000 (the par value of the stock) in exchange for 20,000 shares of common stock. • February 2: Jester took out a 10-year note payable in the amount of $80,000 to pay for operating expenses. • Interest payments are due every six months, and the balance of the note will be paid off in a lump-sum in 10 years. The interest rate is 10% annually, that is, 5% every six months. • February 16: Jester signed a rental lease for its operating facility and paid a year of rent up front in the amount of $60,000. The rental lease runs from March 1, 2018, through February 29, 2019. • March 1: Jester purchased office supplies in the amount of $12,000 and paid in cash. • March 12: Jester paid $18,000 cash for advertising expenses. • April 1: Jester purchased a two-year insurance policy that runs from April 1, 2018, to March 31, 2020, in the amount of $40,000 and paid in full for the policy in cash. • May 12: Jester negotiated a contract with a customer to provide entertainment services for a one-year period running from June 1, 2018, to May 31, 2019. The customer paid the contract in full on May 12 with cash in the amount of $64,000. • June 16: Jester paid wages in the amount of $12,000 to employees in cash. • July 20: Jester negotiated a contract with a customer to provide entertainment services for a six-month period running from September 1, 2018, to February 28, 2019. The customer paid the contract in full on July 20 with cash in the amount of $42,000. • August 2: Jester paid cash in the amount of $4,000 for the first interest payment on the note payable taken out on February 2. • August 18: Jester received and paid a utilities bill in the amount of $7,000 in cash. • September 10: Jester paid wages in the amount of $28,000 in cash. • October 1: Jester negotiated a contract with a customer to provide entertainment services for a one-year period running from October 1, 2018, to September 30, 2019, in the amount of $420,000. The customer paid the contract in full on October 1. • November 14: Jester purchased office supplies in the amount of $26,000 on account with the vendor. • December 6: Jester received an advertising bill for $22,000. The services were provided in 2018 and the bill will be paid in January. • At year-end, Jester had $18,000 of office supplies remaining on hand. Required: a. Prepare the journal entries for the original transactions. Provide brief explanations if necessary. (15 points) b. Prepare any necessary year-end adjusting journal entries for these transactions. Provide brief explanations if necessary. (7 points)

Jester Company began operations on January 1, 2018. The company had the following transactions in its first year of business:

• January 4: Owners invested $120,000 (the par value of the stock) in exchange for 20,000 shares of common stock.
• February 2: Jester took out a 10-year note payable in the amount of $80,000 to pay for operating expenses.
• Interest payments are due every six months, and the balance of the note will be paid off in a lump-sum in 10 years. The interest rate is 10% annually, that is, 5% every six months.
• February 16: Jester signed a rental lease for its operating facility and paid a year of rent up front in the amount of $60,000. The rental lease runs from March 1, 2018, through February 29, 2019.
• March 1: Jester purchased office supplies in the amount of $12,000 and paid in cash.
• March 12: Jester paid $18,000 cash for advertising expenses.
• April 1: Jester purchased a two-year insurance policy that runs from April 1, 2018, to March 31, 2020, in the amount of $40,000 and paid in full for the policy in cash.
• May 12: Jester negotiated a contract with a customer to provide entertainment services for a one-year period running from June 1, 2018, to May 31, 2019. The customer paid the contract in full on May 12 with cash in the amount of $64,000.
• June 16: Jester paid wages in the amount of $12,000 to employees in cash.
• July 20: Jester negotiated a contract with a customer to provide entertainment services for a six-month period running from September 1, 2018, to February 28, 2019. The customer paid the contract in full on July 20 with cash in the amount of $42,000.
• August 2: Jester paid cash in the amount of $4,000 for the first interest payment on the note payable taken out on February 2.
• August 18: Jester received and paid a utilities bill in the amount of $7,000 in cash.
• September 10: Jester paid wages in the amount of $28,000 in cash.
• October 1: Jester negotiated a contract with a customer to provide entertainment services for a one-year period running from October 1, 2018, to September 30, 2019, in the amount of $420,000. The customer paid the contract in full on October 1.
• November 14: Jester purchased office supplies in the amount of $26,000 on account with the vendor.
• December 6: Jester received an advertising bill for $22,000. The services were provided in 2018 and the bill will be paid in January.
• At year-end, Jester had $18,000 of office supplies remaining on hand.

Required:

1. Prepare the journal entries for the original transactions. Provide brief explanations if necessary. (15 points)
2. Prepare any necessary year-end adjusting journal entries for these transactions. Provide brief explanations if necessary. (7 points)

After a successful drive aimed at members of a specific national association, Online Publishing Company received a total of $180,000 for 3-year subscriptions beginning April 1 and recorded this amount in the unearned revenue account. Assuming Online records adjustments only at the end of the calendar year, the adjusting entry required to reflect the proper balances in the accounts at December 31 is to:

1. Debit subscription revenue for $135,000 and credit unearned revenue for $135,000.
2. Debit unearned revenue for $135,000 and credit subscription revenue for $135,000.
3. Debit subscription revenue for $45,000 and credit unearned revenue for $45,000.
4. Debit unearned revenue for $45,000 and credit subscription revenue for $45,000.

Compute the cost of debt financing. Compute the cost of equity financing using the capital asset pricing model. Compute the weighted average cost of capital. The capital investment is to be depreciated as a 7 year asset using this table: Ownership year 1 (14.29%), year 2 (24.49%), year 3 (17.49%), year 4 (12.49%), year 5 (8.93%), year 6 (8.92%), year 7 (4.46%). Evaluate each independent project by computing net present value, internal rate of return, and payback. Then decide whether to accept or reject the project.

Debt 40%, interest rate 5%, tax rate 26%, equity 60%, risk free rate 6%, RM 13%, beta 1.10, working capital 10% next year's sales, no terminal cash flows

project 1 capital investment 1,000,000 year 1(revenue 780,000, expenses 585,000) year 2(revenue 799,500,expenses 599,625) year 3(revenue 819,488, expenses 614,616) year 4(revenue 839,975, expenses 629,981) year 5 (revenue 860,974, expenses 645,731) year 6 (revenue 882,498, expenses 661,874) year 7 (revenue 904,561, expenses 678,421) year 8 (revenue 927,175, expenses 695,381)

project 2 capital investment 750,000 year 1(revenue 800,000, expenses 600,000) year 2 (revenue 820,000, expenses 615,000) year 3 (revenue 840,500, expenses 630,375) year 4 (revenue 861,513, expenses 646,134) year 5 (revenue 883,050, expenses 662,288) year 6 (revenue 905,127, expenses 678,845) year 7 (revenue 927,755, expenses 695,816) year 8 (revenue 950,949, expenses 713,211)

project 3 capital investment 1,000,000 year 1 ( revenue 850,000, expenses 680,000) year 2 (revenue 871,250, expenses 697,000) year 3 (revenue 893,031, expenses 714,425) year 4 (revenue 915,357, expenses 732,286) year 5 ( revenue 938,241, expenses 750,593) year 6 (revenue 961,697, expenses 769,358) year 7 (revenue 985,739, expenses 788,592) year 8 (revenue 1,010,383, expenses 808,306)

Problem 11-7
Schedule M-1 (LO 11.4)

The Loquat Corporation has book net income of $50,000 for the current year. Included in this figure are the following items, which are reported on the corporation's Schedule M-1, Reconciliation of Income (Loss) per Books with Income per Return.

Calculate Loquat Corporation's taxable income for the current year based on the information given.

To write the following Email:

You are an HR Manager at Majid Al Futtaim. You have to organize the Annual Meet for its 15 Senior and Mid-level Managers at a Resort on October 15, 2020. Write an email to Bab Al Shams Resorts. Ask them about the availability of the resort. Also ask them of other requirements that you may have (for instance the number of rooms, the conference room, any entertainment activity etc,). Check the possibilities for booking the resort for this meeting.

Ensure the following:

1. That the letter is complete

2. The language is correct

3. Provide or ask for data or facts

4. Mention dates and deadlines if any

5. Use a format so that the email is easy to read

6. Use a direct approach.