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Problem 2 On January 1, 2016, the Wiseguy Corporation granted 50,000 stock
appreciation rights (SARs) to the company's president, Henry Hill.
Henry will be entitled to receive cash or common stock or some
combination of cash and common stock for the difference between the
quoted market price at the date of exercise and a $20 option price
per SAR. It is assumed that Henry will elect to receive cash when
he exercises his SARs. The service period is three years, and he
may exercise his SARs during the period January 1, 2019, through
December 31, 2020. The market prices per share of Wiseguy
Corporation's common stock are as follows:
On December 31, 2020, Henry Hill exercises his 5,000 SARs and
elects to receive cash.
|
|
Date |
Account Titles |
Debit |
Credit |
In: Accounting
Problem 18-09 Concord Construction Company has entered into a contract beginning January 1, 2020, to build a parking complex. It has been estimated that the complex will cost $606,000 and will take 3 years to construct. The complex will be billed to the purchasing company at $891,000. The following data pertain to the construction period. 2020 2021 2022 Costs to date $260,580 $466,620 $618,000 Estimated costs to complete 345,420 139,380 –0– Progress billings to date 272,000 551,000 891,000 Cash collected to date 242,000 501,000 891,000 (a) Using the percentage-of-completion method, compute the estimated gross profit that would be recognized during each year of the construction period. (If the answer is 0, please enter 0. Do not leave any fields blank.) Gross profit recognized in 2020 $ Gross profit recognized in 2021 $ Gross profit recognized in 2022 $ (b) Using the completed-contract method, compute the estimated gross profit that would be recognized during each year of the construction period. (If the answer is 0, please enter 0. Do not leave any fields blank.) Gross profit recognized in 2020 $ Gross profit recognized in 2021 $ Gross profit recognized in 2022 $ Please show working. Thank you.
In: Accounting
Waterway Windows manufactures and sells custom storm windows for three-season porches. Waterway also provides installation service for the windows. The installation process does not involve changes in the windows, so this service can be performed by other vendors. Waterway enters into the following contract on July 1, 2020, with a local homeowner. The customer purchases windows for a price of $2,470 and chooses Waterway to do the installation. Waterway charges the same price for the windows irrespective of whether it does the installation or not. The customer pays Waterway $1,940 (which equals the standalone selling price of the windows, which have a cost of $1,050) upon delivery and the remaining balance upon installation of the windows. The windows are delivered on September 1, 2020, Waterway completes installation on October 15, 2020, and the customer pays the balance due.
Waterway estimates the standalone selling price of the
installation based on an estimated cost of $450 plus a margin of
30% on cost.
Prepare the journal entries for Waterway in 2020.
(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. Round answer to 0 decimal places, e.g.
5,125.)
In: Accounting
Chapman Company obtains 100 percent of Abernethy Company’s stock on January 1, 2020. As of that date, Abernethy has the following trial balance:
| Debit | Credit | ||||
| Accounts payable | $ | 51,900 | |||
| Accounts receivable | $ | 43,100 | |||
| Additional paid-in capital | 50,000 | ||||
| Buildings (net) (4-year remaining life) | 175,000 | ||||
| Cash and short-term investments | 75,500 | ||||
| Common stock | 250,000 | ||||
| Equipment (net) (5-year remaining life) | 439,500 | ||||
| Inventory | 127,000 | ||||
| Land | 116,500 | ||||
| Long-term liabilities (mature 12/31/23) | 170,500 | ||||
| Retained earnings, 1/1/20 | 464,900 | ||||
| Supplies | 10,700 | ||||
| Totals | $ | 987,300 | $ | 987,300 | |
During 2020, Abernethy reported net income of $87,000 while declaring and paying dividends of $11,000. During 2021, Abernethy reported net income of $122,500 while declaring and paying dividends of $55,000.
Assume that Chapman Company acquired Abernethy’s common stock for $873,250 in cash. As of January 1, 2020, Abernethy’s land had a fair value of $129,800, its buildings were valued at $243,800, and its equipment was appraised at $403,750. Chapman uses the equity method for this investment.
Prepare consolidation worksheet entries for December 31, 2020, and December 31, 2021.
In: Accounting
A) Whispering, Inc. uses the dollar-value LIFO method of
computing its inventory. Data for the past 3 years
follow.
|
Year Ended |
Inventory at |
Price |
|||
|---|---|---|---|---|---|
|
2019 |
$21,500 | 100 | |||
|
2020 |
23,532 | 106 | |||
|
2021 |
27,664 | 112 | |||
Compute the value of the 2020 and 2021 inventories using the
dollar-value LIFO method.
|
2020 |
2021 |
|||
|---|---|---|---|---|
|
Inventory under LIFO |
$enter a dollar amount |
$enter a dollar amount |
B)
The following is a record of Sheffield Company’s transactions for Boston Teapots for the month of May 2020.
| May 1 | Balance | 468 units | @ | $18.00 | May 10 | Sale | 351 units | @ | $35.00 | ||||
| 12 | Purchase | 702 units | @ | $27.00 | 20 | Sale | 632 units | @ | $35.00 | ||||
| 28 | Purchase | 468 units | @ | $31.00 |
Assuming that perpetual inventories are not maintained and that a physical count at the end of the month shows 655 units on hand, what is the cost of the ending inventory using (1) FIFO and (2) LIFO?
|
(1) |
(2) |
|||
| Ending Inventory |
$ |
$ |
Assuming that perpetual records are maintained and they tie into the general ledger, calculate the ending inventory using (1) FIFO and (2) LIFO.
|
(1) |
(2) |
|||
| Ending Inventory |
$ |
$ |
In: Accounting
Presented below are data taken from the records of Blue
Company.
|
December 31, |
December 31, |
|||
| Cash |
$15,100 |
$7,900 |
||
| Current assets other than cash |
85,600 |
59,800 |
||
| Long-term investments |
9,900 |
53,500 |
||
| Plant assets |
333,500 |
213,200 |
||
|
$444,100 |
$334,400 |
|||
| Accumulated depreciation |
$19,800 |
$40,000 |
||
| Current liabilities |
39,800 |
22,000 |
||
| Bonds payable |
75,100 |
–0– |
||
| Common stock |
252,600 |
252,600 |
||
| Retained earnings |
56,800 |
19,800 |
||
|
$444,100 |
$334,400 |
Additional information:
| 1. | Held-to-maturity debt securities carried at a cost of $43,600 on December 31, 2019, were sold in 2020 for $33,700. The loss (not unusual) was incorrectly charged directly to Retained Earnings. | |
| 2. | Plant assets that cost $50,000 and were 80% depreciated were sold during 2020 for $8,000. The loss was incorrectly charged directly to Retained Earnings. | |
| 3. | Net income as reported on the income statement for the year was $57,000. | |
| 4. | Dividends paid amounted to $8,100. | |
| 5. | Depreciation charged for the year was $19,800. |
Prepare a statement of cash flows for the year 2020 using the
indirect method. (Show amounts that decrease cash flow
with either a - sign e.g. -15,000 or in parenthesis e.g.
(15,000).)
In: Accounting
In: Accounting
The COVID 19 Rapid Response fund was set up to alleviate the suffering of the people. “In March 2020, the Government of Canada announced $1 billion to support a whole-of-government COVID-19 Response Fund, which supports federal public health measures such as enhanced surveillance, increased testing and ongoing support for preparedness in First Nations and Inuit communities” Government of Canada (2020). The policy aims to reduce the suffering of people hit by COVID 19 that led to the loss of jobs and increment of unemployment in the country.
The objective of the response fund is to support researchers that will help develop measures to detect and reduce the transmission of COVID-19. The fund enabled the health care system to test patience suffering from the virus and help contain the spread of COVID 19 Government of Canada (2020). According to a research from the University of Calgary (2020), he objective is to support Alberta-based genomics projects designed to address specific, short-term needs of industry, not-for-profit, and public sector receptors through research conducted by academics in collaboration with these receptors, with near-term outcomes that address the COVID-19 crisis.
Question that needs to be answered
Why was the Response fund focused on one ethnic group and not others?
In: Economics
Zekany Corporation would have had identical income before taxes
on both its income tax returns and income statements for the years
2018 through 2021 except for differences in depreciation on an
operational asset. The asset cost $190,000 and is depreciated for
income tax purposes in the following amounts:
| 2018 | $ | 62,700 | |
| 2019 | 83,600 | ||
| 2020 | 28,500 | ||
| 2021 | 15,200 | ||
The operational asset has a four-year life and no residual value.
The straight-line method is used for financial reporting
purposes.
Income amounts before depreciation expense and income taxes for
each of the four years were as follows.
| 2018 | 2019 | 2020 | 2021 | |||||||||
| Accounting income before taxes and depreciation | $ | 105,000 | $ | 125,000 | $ | 115,000 | $ | 115,000 | ||||
Assume the average and marginal income tax rate for 2018 and 2019
was 30%; however, during 2019 tax legislation was passed to raise
the tax rate to 40% beginning in 2020. The 40% rate remained in
effect through the years 2020 and 2021. Both the accounting and
income tax periods end December 31.
Required:
Prepare the journal entries to record income taxes for the years
2018 through 2021. (If no entry is required for a
transaction/event, select "No journal entry required" in the first
account field.)
In: Accounting
Kookaburra Ltd used the cost model to measure its machine. Machine Z had cost of $80 000 and had a carrying amount of $70 000 at 30 June 2020 and is depreciated on a straight-line basis over a 10-year period.
On 31 December 2020, the directors of Kookaburra Ltd decided to change the basis of measuring the equipment from the cost model to the revaluation model. Machine Z was revalued to $70 000 with an expected useful life of 8 years.
REQUIRED
Provide the numbers for the journal entries in the blanks below for Machine Z on 31 December 2020 and on 30 June 2021. Complete the four blanks.(You don't need to provide the numbers for "??")
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31 December 2020
a)
Depreciation expense – Machine Z Dr
Accumulated depreciation – Machine Z Cr
b)
Accumulated depreciation – Machine Z Dr
Machine Z Cr
c)
Machine Z Dr
Gain on revaluation – Machine Z (OCI) Cr
Gain on revaluation – Machine Z (OCI) Dr ??
Asset revaluation surplus – Machine Z Cr ??
30 June 2021
d)
Depreciation expense – Machine Z Dr
Accumulated depreciation – Machine Z Cr
In: Accounting