On January 1, 2017, Stream Company acquired 27 percent of the outstanding voting shares of Q-Video, Inc., for $716,000. Q-Video manufactures specialty cables for computer monitors. On that date, Q-Video reported assets and liabilities with book values of $1.6 million and $800,000, respectively. A customer list compiled by Q-Video had an appraised value of $306,000, although it was not recorded on its books. The expected remaining life of the customer list was five years with a straight-line amortization deemed appropriate. Any remaining excess cost was not identifiable with any particular asset and thus was considered goodwill.

Q-Video generated net income of $304,000 in 2017 and a net loss of $112,000 in 2018. In each of these two years, Q-Video declared and paid a cash dividend of $18,000 to its stockholders.

During 2017, Q-Video sold inventory that had an original cost of $104,000 to Stream for $160,000. Of this balance, $80,000 was resold to outsiders during 2017, and the remainder was sold during 2018. In 2018, Q-Video sold inventory to Stream for $170,000. This inventory had cost only $136,000. Stream resold $100,000 of the inventory during 2018 and the rest during 2019.

For 2017 and then for 2018, compute the amount that Stream should report as income from its investment in Q-Video in its external financial statements under the equity method. (Enter your answers in whole dollars and not in millions. Do not round intermediate calculations.)

In 2018, the Chicago Transit Authority (CTA) faced a large budget shortfall, due to state-wide budget cuts. In an effort to balance their budget, CTA raised the fare for one train ride from $2.25 to $2.50 on January 1, 2018. In 2017, prior to the fare hike, annual ridership was about 225 (measured in millions). CTA also conducted a study that year and found that the price elasticity of demand was ???? = −0.5. a) Estimate a linear market demand function for train rides in Chicago. Graph the (inverse) market demand curve and show the price/quantity point where the price of a ride is $2.25. What is the price elasticity of demand at that point? Did the increase in fare increase or decrease revenue in the short run, based on the information provided? Can you justify your answer without actually finding the new revenue? b) What is the predicted number of riders (in millions) in 2018? Show this price/quantity point on your graph. Suppose we also know that in 2018, gas prices were low and Uber and Lyft availability increased in Chicago. Would this information change your predicted ridership for 2018? If so, demonstrate this change on your graph, and explain why your graph is consistent with the information given. (Note: Do not try to find a new value for ridership; just describe whether it would be higher or lower than your original projection).

In the Introductory Survey we asked if you had paid employment while studying at university. We also asked this question in the equivalent survey for Semester 2 2018. A summary of the results for this question from both surveys is shown in the table below. ‘Working’ denotes students who said that they had some kind of paid employment while studying, ‘Total’ denotes the total number of students who responded to these questions in the surveys. 2019 Semester 1 Working 355 Total 627 2018 Semester 2 250 510 STAT101 includes a very wide range of students. For this question we will assume that these samples can be regarded as random samples from the total populations of first year UC students in Semester 1 2019 and Semester 2 2018, respectively. a) Use the data to construct a 90% confidence interval for the population proportion of first year UC students who were working while studying at the start of Semester 1 2019. b) Use the data to construct a 90% confidence interval for the population proportion of first year UC students who were working while studying at the start Semester 2 2018. c) Use your confidence intervals to comment on the suggestion that the proportion of first year UC students who were working while studying was higher at the start of Semester 1 2019 than at the start of Semester 2 2018. Give your response in one or two brief sentences.

At year-end 2018, Wallace Landscaping’s total assets were $2.15 million, and its accounts payable were $340,000. Sales, which in 2018 were $2.4 million, are expected to increase by 25% in 2019. Total assets and accounts payable are proportional to sales, and that relationship will be maintained. Wallace typically uses no current liabilities other than accounts payable. Common stock amounted to $490,000 in 2018, and retained earnings were $300,000. Wallace has arranged to sell $120,000 of new common stock in 2019 to meet some of its financing needs. The remainder of its financing needs will be met by issuing new long-term debt at the end of 2019. (Because the debt is added at the end of the year, there will be no additional interest expense due to the new debt.) Its net profit margin on sales is 8%, and 45% of earnings will be paid out as dividends.

1. What was Wallace's total long-term debt in 2018? Do not round intermediate calculations. Round your answer to the nearest dollar.
   $  

   What were Wallace's total liabilities in 2018? Do not round intermediate calculations. Round your answer to the nearest dollar.
   $  

2. How much new long-term debt financing will be needed in 2019? (Hint: AFN - New stock = New long-term debt.) Do not round intermediate calculations. Round your answer to the nearest dollar.
   $  

The following selected account balances relate to the shareholders’ equity accounts of Sandhill Corp. at year end:

Additional information:

Determine the amounts of any cash receipts or payments related to the shareholders’ equity accounts in 2018.

Indicate where each of the cash receipts or payments identified above would be classified on the statement of cash flows or accompanying notes.

Wildhorse Co. purchased equipment on March 27, 2018, at a cost of $ 264,000. Management is contemplating the merits of using the diminishing-balance or units-of-production method of depreciation instead of the straight-line method, which it currently uses for other equipment. The new equipment has an estimated residual value of $ 8,000 and an estimated useful life of either four years or 80,000 units. Demand for the products produced by the equipment is sporadic so the equipment will be used more in some years than in others. Assume the equipment produces the following number of units each year: 14,600 units in 2018; 20,600 units in 2019;19,800 units in 2020; 20,000 units in 2021; and 5,000 units in 2022. Wildhorse has a December year end.

(a)

Prepare separate depreciation schedules for the life of the equipment using: (Round depreciation per unit to 2 decimal places, e.g. 5.28 and final answers to 0 decimal places, e.g. 5,275.)

Straight-line method:

Double-diminishing-balance method:

Units-of-production method:

Hong Kong Taxation

Candy Suen rented out an office premise in Wanchai to Winny Ltd for many years at $30,000 per month. However, due to its poor trading performance, Winny Ltd has not paid the monthly rent since 1 January 2018. Rates paid by Candy for the flat were $10,000 per annum for the years ended 31 March 2018, 2019 and 2020. As Winny Ltd failed to pay the monthly rent, legal action was taken to recover the rent and to take repossession of the premise. On 1 May 2018, Winny Ltd was put into liquidation and the office premise was left vacant thereafter. The assessor agreed that the rent outstanding has become bad during the year of assessment 2018/19. The office premise was subsequently let to a new tenant from 1 June 2019 at $20,000 per month for a lease period of three years. In addition, Candy received $20,000 out of the outstanding rent from the final distribution of Winny Ltd on 10 June 2019.

Required: (a) Calculate the property tax liability for the year of assessment 2017/18. Ignore provisional tax.

(b) Calculate the property tax liability for the year of assessment 2018/19, and make any necessary adjustments to the property tax liability for the year of assessment 2017/18. Ignore provisional tax.

(c) Calculate the property tax liability for the year of assessment 2019/20. Ignore provisional tax.

Revision Qs

Question 1

The following shows the unadjusted Trial Balance of Shahanom Logistics Sdn Bhd during May 2018:

Additional information:

1. Depreciation was recorded on the motor van using the straight-line method. Assume a useful life of five years and a salvage value of RM100,000.
2. Prepaid Electricity for the month has expired. Electricity was prepaid at RM20,000 cash for a four months period starting April 1.
3. Accrued Salaries Expenses, RM20,000.
4. Accrued Service Revenue, RM24,000.
5. Office Supplies on hand, RM2,400.

Required:

1. Prepare an Adjusted Trial Balance as of May 31, 2018         

2. Prepare Shahanom Logistics Sdn Bhd’s Statement of Comprehensive Income (Income Statement) and Statement of Owner’s Equity for the month ended May 31, 2018

3. Prepare Shahanom Logistics Sdn Bhd’s Statement of Financial Position (Balance Sheet) on May 31, 2018.

ohnstone Company is facing several decisions regarding investing and financing activities. Address each decision independently. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)

1. On June 30, 2018, the Johnstone Company purchased equipment from Genovese Corp. Johnstone agreed to pay Genovese $12,000 on the purchase date and the balance in six annual installments of $10,000 on each June 30 beginning June 30, 2019. Assuming that an interest rate of 12% properly reflects the time value of money in this situation, at what amount should Johnstone value the equipment?
2. Johnstone needs to accumulate sufficient funds to pay a $420,000 debt that comes due on December 31, 2023. The company will accumulate the funds by making five equal annual deposits to an account paying 8% interest compounded annually. Determine the required annual deposit if the first deposit is made on December 31, 2018.
3. On January 1, 2018, Johnstone leased an office building. Terms of the lease require Johnstone to make 20 annual lease payments of $122,000 beginning on January 1, 2018. A 12% interest rate is implicit in the lease agreement. At what amount should Johnstone record the lease liability on January 1, 2018, before any lease payments are made?