Use the information below to answer questions 25-30.

Aggie Oil owns a 100% WI in Lease A.Lease A is burdened with a 1/6 royalty.During the month of October, Aggie Oil estimated a total of 10,000 barrels of oil were produced and sold.Assume the selling price of the oil was $80/bbl and the production tax was 5%.

Additionally, Aggie Oils books estimates until actual can be obtained at settlement.Settlement typically occurs two months after the sale.Upon settlement, Aggie Oil determined that 9,000 volumes were sold in October.Assume Aggie Oil distributes all royalty and tax payments.

25. During which month will you initially record revenue related to this sale (type out the whole month; do not abbreviate)?

QUESTION 26

During which month should cash received be recorded for this sale?

QUESTION 27

In December, determine the amount of serverance tax payable to be reversed from the October estimates.

QUESTION 28

In December, determine the amount of LOE for production (severance) tax to be reversed from the October estimates.

QUESTION 29

In December, determine the amount of oil revenue to be recorded for actuals from the October sale.

QUESTION 30

In December, determine the amount of royalty payable to be recorded for actuals from the October sale.

a. Jack Repair Shop started the year with total assets of $300,000 and total liabilities of $200,000. During the year, the repair shop recorded $500,000 in computer repair revenues, $300,000 in expenses, and paid dividends of $50,000. The repair shop stockholders' equity at the end of the year was $___________.

b. Costs of goods sold is $15,000 greater than net purchases. If beginning inventory is $110,000, what is ending inventory? Using COGS=BI+P-EI

c. Revenue of $45,000 had been collected, but only $39,000 had been earned. Expenses of $24,000 had been incurred, but only $29,000 had been paid. Based on the accrual basis of accounting, what is the amount of net income?

d. The following is selected information from Tiff. Co for the fiscal year ending October 31, 2019.

Cash received from customers $300,000

Revenue recognized  $375,000

Cash paid for expenses $180,000

Cash paid for computers on November 1, 2018 that will be used for 3 years (annual depreciation is $16,000) $48,000

Expenses incurred, including interest, but excluding any depreciation $220,000

Proceeds from a bank loan, part of which was used to pay for the computers $100,000

Based on the accrual basis of accounting, what is Tiff. Co's net income for the year ending October 31, 2019?

Flight Café prepares in-flight meals for airlines in its kitchen located next to a local airport. The company’s planning budget for July appears below:

In July, 30,000 meals were actually served. The company’s flexible budget for this level of activity appears below:

Required:

1. Calculate the company’s activity variances for July. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

Accounting for Construction Contracts IAS 11 has been subsumed under the standard IFRS   15, Revenues from Contract with customers. This has implications for the treatment of construction contracts including how they are accounted for, presented and disclosed.

Discuss making reference to the provisions of IFRS 15   Revenue from Contracts with Customers issued May 2014 and applicable for annual reporting beginning on or after January 1, 2018.

(Nb. The case information below is to be used to illustrate your understanding of the issues involved.)

Belvisja Limited has a fixed price contract for $9,000,000 to build a road, that is the initial amount agreed in the contract is $9 M. The contractor estimates that contract cost is $8,000,000. It will take three years to build the road.

By the end of year 1 the contractor’s estimate of contractors cost has increased to $8,050,000.

In year 2 the customer approves a variation resulting in an increase in contract revenue of $200,000 and estimated contract costs of $150,000.

At the end of year 2 costs incurred includes $100,000 for standard material storage on site to be used in year 3 to complete the project.

At the beginning of   year 3 the customer requested that the contract be adjusted by $500,000 for the cleaning of the drains.

The contractor determines the stage of completion of the contract by calculating the proportion that contract cost incurred for work performed to date bear to the latest estimated total contract costs.

Lavage Rapide is a Canadian company that owns and operates a large automatic car wash facility near Montreal. The following table provides data concerning the company’s costs:

For example, electricity costs are $1,000 per month plus $0.09 per car washed. The company expects to wash 8,200 cars in August and to collect an average of $6.40 per car washed.

The actual operating results for August appear below.

Required:

Prepare a flexible budget performance report that shows the company’s revenue and spending variances and activity variances for August. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

QUESTION 1

Each of the following are a step involved in activity analysis except for...?

QUESTION 2

Each of the following is a guideline for using ABC costing except for.......?

QUESTION 3

In the Two-Step Allocation process, which of the following is correct when it comes to collecting costs?

QUESTION 4

All of the following are reasons for using ABC Costing except...

QUESTION 5

Total Cycle Time is the sum of Value-added time and Non-value-added time.

True

False

This problem has several parts journalizing adjusting entries, preparing a ledger using T accounts, adjusted trial balance, income statement, retained earnings statement, classifed balance sheet and determine which accounts to close at end of the month. HELP!!!!

The Pharoah Hotel opened for business on May 1, 2022. Here is its trial balance before adjustment on May 31.

Other data:

On January 1, 2018, Red Flash Photography had the following balances: Cash, $19,000; Supplies, $8,700; Land, $67,000; Deferred Revenue, $5,700; Common Stock $57,000; and Retained Earnings, $32,000. During 2018, the company had the following transactions:  

The following information is available on December 31, 2018:
  
1. Employees are owed an additional $4,700 in salaries.
2. Three months of the rental space has expired.
3. Supplies of $5,700 remain on hand.
4. All of the services associated with the beginning deferred revenue have been performed.

1February 15Cash27,000Common stock27,0002May 20Cash42,000Accounts receivable37,000Service revenue79,0003August 31Salaries expense30,000Cash30,0004October 01Prepaid rent19,000Cash19,0005November 17Supplies29,000Accounts payable29,0006December 30Dividends2,700Cash2,7007December 31Salaries expense4,700Salaries payable4,7008December 31Rent expensePrepaid rent9December 31Supplies expense30,000Supplies30,00010December 31Deferred revenue5,700Service revenue5,70011December 31Service revenueRetained earnings12December 31Retained earningsSalaries expenseSupplies expenseRent expense13December 31Retained earnings2,700Dividends2,700

Tax Case 4

Goodwill Acquired in an Acquisition – Is it Deductible?

As the CFO of General Dynamo, you are very excited as you have just completed the negotiations related to the purchase of Apex Systems, a complimentary business to General Dynamo. The sole shareholder of Apex has agreed to either of the following purchase offers:

               A: General Dynamo will pay $10,000,000 for 100% of the outstanding stock of Apex

                                                            OR

B: General Dynamo will pay $11,000,000 for 100% of the “net assets” of Apex, which includes all tangible and intangible assets as well as all recorded liabilities.

The fair value of the acquired assets and liabilities is as follows:

Current Assets (Tangible)                             $2,500,000

Long Term Assets (Tangible)                       $4,000,000

Liabilities                                                          $3,500,000

Net Tangible Assets Acquired                      $3,000,000

Based solely on the “net after-tax” cost of the acquisition, which purchase offer should you choose: A or B? Why?

Why does the seller require a higher price to be paid for acquiring “net assets” versus “stock”? What internal revenue service code section addresses how sales of assets versus sales of stock are taxed? What are the significant differences? What period may the goodwill be deducted for tax purposes? Why do you think the Internal Revenue Service treats these two purchase offers differently?