Chapter 16-prob. 8

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

2018                       $370,000

2019                       290,000

2020                       360,000

2021                       400,000

Included in the income of 2018 was an installment sale of property in the amount of $36,000. However, for tax purposes, DeVille reported the income in the year cash was collected. Cash collected on the installment sale was $14,400 in 2019, $18,000 in 2020, and $3,600 in 2021.

Included in the 2020 income was $13,000 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 taxes for the years 2018-2021. (If no entry is required for a transaction/event, write “No journal entry required” in the first account field.)

Problem 6-18A Alternative cost flows—periodic LO8

Synergy Company began 2020 with 20,000 units of Product X in its inventory that cost $7.70 per unit, and it made successive purchases of the product as follows:

The company uses a periodic inventory system. On December 31, 2020, a physical count disclosed that 16,000 units of Product X remained in inventory.

Required:
1. Calculate the number and total cost of the units available for sale during 2020.

2. Prepare calculations showing the amounts that should be assigned to the 2020 ending inventory and to cost of goods sold, assuming:

a. FIFO

b. Weighted average cost basis. (Round the "Average cost per unit" answer to 2 decimal places.)

Splish Corp. has the following beginning-of-the-year present values for its projected benefit obligation and market-related values for its pension plan assets.

The average remaining service life per employee in 2019 and 2020 is 10 years and in 2021 and 2022 is 12 years. The net gain or loss that occurred during each year is as follows: 2019, $294,000 loss; 2020, $94,500 loss; 2021, $11,550 loss; and 2022, $26,250 gain. (In working the solution, the gains and losses must be aggregated to arrive at year-end balances.)

Using the corridor approach, compute the amount of net gain or loss amortized and charged to pension expense in each of the four years, setting up an appropriate schedule.

The information below relates to a leasing arrangement between Summer Leasing Company and Talon Company, a lessee.
Inception date January 1, 2020
Lease term 6 years
Annual lease payment due at the beginning of
each year, beginning with January 1, 2020 $150,000
Fair value of asset at January 1, 2020 $760,000
Economic life of leased equipment 7 years
Residual value of equipment at end of lease term,
guaranteed by the lessee $65,500
Lessor’s implicit rate 10%
Lessee’s incremental borrowing rate 12%
January 1, 2020
The asset will revert to the lessor at the end of the lease term. The lessee has guaranteed the lessor a residual value of $65,500. The lessee uses the straight-line depreciation method for all equipment.
Instructions
(i) What is the lease liability for Talon Company?
(ii) Record the lease on Talon Company’s books at the date of inception.
(iii)Record the first year’s depreciation on Talon Company’s books.

Blue Company began operations on January 1, 2019, adopting the conventional retail inventory system. None of the company’s merchandise was marked down in 2019 and, because there was no beginning inventory, its ending inventory for 2019 of $38,200 would have been the same under either the conventional retail system or the LIFO retail system.

On December 31, 2020, the store management considers adopting the LIFO retail system and desires to know how the December 31, 2020, inventory would appear under both systems. All pertinent data regarding purchases, sales, markups, and markdowns are shown below. There has been no change in the price level.

Determine the cost of the 2020 ending inventory under both (a) the conventional retail method and (b) the LIFO retail method.

4b. On June 30, 2020, Lansing Company was notified by its only customer that the

Customer will no longer order its product. All existing orders are expected to be completed by May 2021. From July through December 2020, Lansing Company continued efforts to raise additional financing from venture capital groups and secure new customers. By December 15, 2020, it was evident that these efforts would not be successful.

On March 1, 2021, Lansing Company obtains the required shareholder approval for a plan of liquidation that will be completed by May 2021. Upon ceasing its operations, all employees will be terminated, and Lansing Company’s assets will be liquidated to repay its creditors. The criteria for liquidation being imminent are met under FASB ASC 205 on October 29, 2021.

Required:

a. How should Lansing Company report these facts on its December 31, 2020 financial

statements?

b. How should Lansing Company report these facts during 2021?

This assessment task aims to develop your ability to apply the first three phases of the clinical reasoning process, at an introductory level, to the patient scenario below. You are a student nurse working with a school nurse (registered nurse) in a secondary school. You and your mentor are supervising a bubble soccer match this afternoon (26th March) which commenced at 1400 hrs. The match goes for 40 minutes with a 5-minute break in between the two halves. It is a hot and sunny day, the air temperature is 32 oC and the humidity is 45%. After the match, your mentor asks you to perform a range of health assessments to make sure the students are fit to go home. Jessie Lin is 16 years old and in Year 11. It is now 1450 hours. You assess Jessie's vital signs and record the following results: Temperature (tympanic) 38.5 oC Pulse rate 140 beats/min Respiratory rate (RR) 29 breaths/min Blood pressure (BP) 130/70 mmHg Jessie has flushed skin (see picture above) and her t-shirt is soaked. Her past medical history has not yet been documented in the school record as she is a new student and only enrolled in the school last week after moving from another state. She informs you that her mother is waiting for her in the car park, but she feels very hot and that her heart feels like it is beating very fast. She asks you for a bottle of cold water and a chair. Jessie's previous observation records (on a clinical chart) are: Date BP Pulse RR Temp 23rd March 2020 110/60 70 14 36.8 24th March 2020 112/60 74 12 36.6

Question:

Propose what further cues you want to collect and explain why these are relevant and important to the situation (approx. 450 words) To do this successfully, you will need to form a logical opinion about what the further cues should be, when you would undertake the assessments to collect these cues (e.g. after some immediate actions for Jessie) and why these cues should be assessed. Relate your justification to Jessie's situation AND to the principles of anatomy and normal physiology (focusing on homeostasis).

Broussard Skateboard's sales are expected to increase by 25% from $8.0 million in 2019 to $10.00 million in 2020. Its assets totaled $5 million at the end of 2019.

Broussard is already at full capacity, so its assets must grow at the same rate as projected sales. At the end of 2019, current liabilities were $1.4 million, consisting of $450,000 of accounts payable, $500,000 of notes payable, and $450,000 of accruals. The after-tax profit margin is forecasted to be 3%, and the forecasted payout ratio is 75%. Use the AFN equation to forecast Broussard's additional funds needed for the coming year. Enter your answer in dollars. For example, an answer of $1.2 million should be entered as $1,200,000. Do not round intermediate calculations. Round your answer to the nearest dollar.

Broussard Skateboard's sales are expected to increase by 20% from $8.0 million in 2019 to $9.60 million in 2020. Its assets totaled $4 million at the end of 2019.

Broussard is already at full capacity, so its assets must grow at the same rate as projected sales. At the end of 2019, current liabilities were $1.4 million, consisting of $450,000 of accounts payable, $500,000 of notes payable, and $450,000 of accruals. The after-tax profit margin is forecasted to be 4%, and the forecasted payout ratio is 75%. Use the AFN equation to forecast Broussard's additional funds needed for the coming year. Enter your answer in dollars. For example, an answer of $1.2 million should be entered as $1,200,000. Do not round intermediate calculations. Round your answer to the nearest dollar.