1. Stacie and Ryan are married and file jointly for the 2020 tax year. They have two sons. Their sons are age 10 and 14. Stacie and Ryan’s wages in total for the year was $133,000. Their employers withheld $18,000 in tax from their wages. In addition to the above, the following occurred the tax year:

• They moved several states away because of career relocation for Ryan. Their unreimbursed moving costs were $10,000.
• Stacie and Ryan pay $3,500 of the interest on a loan Ryan’s postsecondary education.
• They paid $2,000 in medical insurance premiums for the year. In addition, they paid $1,000 for hospital stay after an emergency room trip for Stacie.
• The couple paid $250 for an accountant to prepare their taxes.
• Their accountant calculates that their total state income tax liability is $4,000. The couple pay all their state taxes for the year.

1. Determine Stacie and Ryan’s AGI. (6 points)

$133,000 - $2500 = $130,500

2. Ignore your answer in a). Assume that Stacie and Ryan’s AGI for the year is $120,600. Determine the amount of itemized deduction Stacie and Ryan have available this year. (7 points)

3. Ignore your answer in b). Assume that the amount of itemized deduction available is $7,500. Using the 2020 standard deduction amounts (assuming no additional amounts for age or blindness) from Appendix D in your book, first determine whether Stacie and Ryan itemize or take the standard deduction. If you determine they itemize, write in the itemized deduction dollar amount given ($7,500). Alternatively, if you determine they will take the standard deduction, write in the standard deduction amount for which they qualify (tied to the appropriate filing status). (6 points)

4. Ignore your answer in a) - c). Assume that Stacie and Ryan’s taxable income is $163,250 and their employer withheld $18,000 in tax from their wages. Using the tax rate schedule from Appendix D in your book, determine the amount of taxes due or the amount of refund due. Remember to clearly mark the answer as either the amount of tax due or a refund due (e.g. refunds are negative amounts as represented with parentheses or a negative sign). Assume AMT does not apply, and there are no tax credits available. (6 points)

2. Shela is single and works for a law firm. In the 2020 tax year, she made $110,000 this year in salary and $10,000 of gross interest income from a corporate bond. Her law firm withheld $16,000 of tax from her salary this year. In addition to the above, the following occurred this year:

• She paid $7,000 in interest on her mortgage for her primary residence.
• She had a rental loss (had greater expenses as a landlord than revenue) by $2,000.
• She sold stock she had held for 9 months at $4,000 less than her tax basis at the time of the sale.
• Shela owned a 20% interest in a partnership during the year. The partnership had a $20,000 loss from operations during the year and made no distributions.
• Shela volunteers for the Red Cross using her legal skills to do administrative work for the charity. She estimates her time volunteering is worth $5,000.

1. Determine Shela’s AGI. (6 points)

2. Ignore your answer in a). Assume that Shela’s AGI in 2020 is $148,380. Determine the amount of itemized deduction Shela has available this year. (7 points)

3. Ignore your answer in b). Assume that the amount of itemized deduction available is $13,665. Using the 2020 standard deduction amounts (assuming no additional amounts for age or blindness) from Appendix D in your book, first determine whether Shela will itemize or take the standard deduction. If you determine she itemizes, write in the itemized deduction dollar amount given ($13,665). Alternatively, if you determine she will take the standard deduction, write in the standard deduction amount for which she qualifies (tied to the appropriate filing status). (6 points)

4. Ignore your answer in a) - c). Assume that Shela’s taxable income is $136,970 and her employer withheld $16,000 in tax from their wages. Using the tax rate schedule from Appendix D in your book, determine the amount of taxes due or the amount of refund due. Remember to clearly mark the answer as either the amount of tax due or a refund due (e.g. refunds are negative amounts as represented with parentheses or a negative sign). Assume AMT does not apply, and there are no tax credits available. (6 points)

Wang Company provides the following information for their first year of operation:

   Sales                         5,000 units @ $10                   Variable production costs per unit:     

   SG&A costs:                                                                        Direct materials          $2

     Fixed                    $1,000                                                 Direct labor                 $2

      Variable                $1 per unit                                           Var MOH                    $1

Fixed MOH             $7,500                                     Production                              7,500 units

   (T or F) If Wang uses variable costing, operating income will be $11,500.

True

False

Bond ABC is currently (year 2020) selling at 105% of par value, it matures by the end of 2030 but callable by the end of 2025.

When it is called in 2025, there is 6% call premium. The annual coupon rate is 8%. It is an annual coupon bond, and 2020's coupon has not been distributed to investors yet.

What is Bond ABC’s Yield to Call if you purchase it right now? (Please round up your answers to two decimals and write in percentage points without the sign. e.g. If your answer is 12.859%, type 12.86 without the percentage sign)

Inventory by Three Methods

The units of an item available for sale during the year were as follows:

There are 16 units of the item in the physical inventory at December 31. The periodic inventory system is used.

Determine the inventory cost under each of the following methods.

a. Determine the inventory cost by the first-in, first-out method.
$

b. Determine the inventory cost by the last-in, first-out method.
$

c. Determine the inventory cost by the average cost method. When computing your answer, round the average cost per unit to the nearest whole dollar.
$

At the beginning of the year, Custom Mfg. established its predetermined overhead rate by using the following cost predictions: overhead costs, $1,200,000, and direct materials costs, $400,000. At year-end, the company’s records show that actual overhead costs for the year are $1,532,400. Actual direct materials cost had been assigned to jobs as follows.

1. Determine the predetermined overhead rate.
2&3. Enter the overhead costs incurred and the amounts applied to jobs during the year using the predetermined overhead rate and determine whether overhead is overapplied or underapplied.
4. Prepare the adjusting entry to allocate any over- or underapplied overhead to Cost of Goods Sold.

Enter the overhead costs incurred and the amounts applied during the year using the predetermined overhead rate and determine whether overhead is overapplied or underapplied.

The following information is for Crane Limited for 2020:

There were no changes during 2020 in the number of common shares, preferred shares, or convertible bonds outstanding. For simplicity, ignore the requirement to book the convertible bonds’ equity portion separately.Calculate the income effect of the dividends on preferred shares.

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Assistance Used

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Calculate basic earnings per share for 2020. (Round answer to 2 decimal places, e.g. 15.25.)

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Determine an incremental per share effect for 6% preferred shares. (Round earnings per share to 2 decimal places, e.g. 15.25.)

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Calculate the proceeds from assumed exercise of 65,000 options.

Calculate the incremental shares oustanding upon the exercise of options.

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Calculate the after-tax interest paid on the 8% bonds.

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Determine an incremental per share effect for 8% bonds. (Round earnings per share to 2 decimal places, e.g. 15.25.)

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Rank the potentially dilutive securities from most dilutive to least dilutive.

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Calculate diluted earnings per share for 2020. (Round earnings per share to 2 decimal places, e.g. 15.25.)

Derek will deposit $2,239.00 per year for 25.00 years into an account that earns 9.00%, The first deposit is made next year. How much will be in the account 36.00 years from today?

Answer format: Currency: Round to: 2 decimal places.

at the year end, Chief company has a balance of $16,000 in accounts receivable of which $1,600 is more than 30 days overdue. Chief has a credit balance of $160 in the allowance for doubtful accounts before any year-end adjustments. using the aging of accounts receivable method, Chief estimates that 1.5% of current accounts and 11% of accounts over 30 days are uncollectible. what is the amount of bad debt expense? a 232. b 392. c 552. d160.