Crane Landscaping began construction of a new plant on December 1, 2020. On this date, the company purchased a parcel of land for $145,200 in cash. In addition, it paid $2,400 in surveying costs and $3,840 for a title insurance policy. An old dwelling on the premises was demolished at a cost of $3,360, with $720 being received from the sale of materials.

Architectural plans were also formalized on December 1, 2020, when the architect was paid $31,200. The necessary building permits costing $3,360 were obtained from the city and paid for on December 1 as well. The excavation work began during the first week in December with payments made to the contractor in 2021 as follows.

The building was completed on July 1, 2021.

To finance construction of this plant, Crane borrowed $612,000 from the bank on December 1, 2020. Crane had no other borrowings. The $612,000 was a 10-year loan bearing interest at 8%.

Compute the balance in each of the following accounts at December 31, 2020, and December 31, 2021. (Round answers to 0 decimal places, e.g. 5,275.)

Grape Inc. had the following balance sheet at December 31, 2019:

Grape INC. BALANCE SHEET DECEMBER 31, 2019

Cash $ 31,000

Accounts payable $ 61,000 x

Accounts receivable 56,800 x

Notes payable (long-term) 76,000

Investments 86,000 x

Common stock 200,000

Plant assets (net) 138,500

Retained earnings 41,300

Land 66,000

Total assets and Total Liabilities and Stockholders' Equity $378,300 $378,300

During 2020, the following occurred:

1. Grape liquidated its available-for-sale investment portfolio at a gain of $15,000. x

2. A tract of land was purchased for $61,000 cash. x

3. An additional $15,200 in common stock was issued at par. x

4. Dividends totaling $41,000 were declared and paid to stockholders. x

5. Net income for 2020 was $46,000x, including $8,000x in depreciation expense.

6. Land was purchased through the issuance of $195,000x in additional notes payable.

7. At December 31, 2020, Cash was $68,000x, Accounts Receivable was $84,000x, and Accounts Payable was $72,000x

Instructions (a) Prepare the balance sheet as it would appear at December 31, 2020 (b) Prepare a statement of cash flows for the year 2020 for Grape. . Prepare all in good form.

Sofie Company buys stock in Nut Corporation in cash on January 1, 2020, and reports the investment as having no significant influence.

The percentage of investment 15% Amount paid $6,000,000

On January 1, 2022, Sofie Company makes the following additional investment in Nut Corporation and changes to the equity method of reporting for this investment.

The additional percentage of investment 25% Additional amount paid $15,000,000

Fair value of the 15% investment is as follows: 12/31/2020 $6,200,000 12/31/2021 $6,450.000

Nut Corporation reported the following amounts for the years;

Net income 2020- $150,000 2021- $200,000 2022- $250,000

Cash dividend(paid at year-end) 2020- $50,000 2021- $80,000 2022- $100,000

Additional information: Nut Corporation reported no comprehensive income and any basis difference is attributed to goodwill.

A. Prepare all the journal entries that Sofie Company would records for the investment in Nut Corporation for 2020,.2021, and 2022. Journal entries should be set up in good form.

You need to provide dates, use appropriate account titles, and include an explanation below each journal entry.

B. Develop a table showing the calculation of what the amount Sofie Corporation will report on the balance sheet for the investment in Nut Corporation on December 31, 2022.

Grouper Landscaping began construction of a new plant on December 1, 2020. On this date, the company purchased a parcel of land for $146,400 in cash. In addition, it paid $2,880 in surveying costs and $4,560 for a title insurance policy. An old dwelling on the premises was demolished at a cost of $3,360, with $960 being received from the sale of materials.

Architectural plans were also formalized on December 1, 2020, when the architect was paid $36,000. The necessary building permits costing $3,360 were obtained from the city and paid for on December 1 as well. The excavation work began during the first week in December with payments made to the contractor in 2021 as follows.

The building was completed on July 1, 2021.

To finance construction of this plant, Grouper borrowed $608,400 from the bank on December 1, 2020. Grouper had no other borrowings. The $608,400 was a 10-year loan bearing interest at 8%.

Compute the balance in each of the following accounts at December 31, 2020, and December 31, 2021. (Round answers to 0 decimal places, e.g. 5,275.)

Sha Corporation produces milk on its farms located in Zamboanga. At December 31, 2019, the herd of cows are as follows:

4,000 cows (3 years old), all purchased in prior years

2,000 heifers (2 years old), all purchased in prior years

1,000 heifers (1 year old) purchased on December 31, 2011

The unit vales less estimated point of sale costs were as follows:

      1 year old animal at December 31, 2019 ₱35,000

      2 year old animal at December 31, 2019                    45,000

      3 year old animal at December 31, 2019 54,000

      1 year old animal at December 31, 2020                    38,000

      2 year old animal at December 31, 2020                    47,500

      3 year old animal at December 31, 2020                    57,000

      4 year old animal at December 31, 2020                    60,000

Required:

1. Compute for the change in fair value less estimated point of sale cost of the biological assets dues to;
   1. Price change
   2. Physical change
2. Prepare schedule showing the reconciliation of beginning balances to ending balances of biological assets and the changes during the period due to price purchase and change in fair value
3. Give the journal entries for 2020 to reflect the foregoing.

Crane Construction Inc., which has a calendar year end, has entered into a non-cancellable fixed price contract for $2.9 million beginning September 1, 2020, to build a road for a municipality. It has been estimated that the road construction will be complete by June 2022. The following data pertain to the construction period.

Using the percentage-of-completion method, calculate the estimated gross profit that would be recognized during each year of the construction period.

Using the percentage-of-completion method, prepare the journal entries for 2020 and 2021. (Use Materials, Cash, Payables for costs incurred to date.)

For the Year 2020:

1-

2-

(To record Cost of Construction)

1-

2-

To record progress billings

1-

2-

To record collections

1-

2-

To record revenues

1-

2-

To record construction expenses

Same procedures for 2021:

(Accounts receivable and uncollectible accounts—aging of receivables method)

On December 31, 2019, Ajacks Company reported the following information in its financial statements:

During 2020, the company had the following transactions related to receivables:

a. Sales were $10,560,000, of which $8,448,000 were on account.

b. Collections of accounts receivable were $7,284,000.

c. Writeoffs of accounts receivable were $78,000.

d. Recoveries of accounts previously written off as uncollectible were $8,100. (Note that this amount is not included in the collections referred to in item b above.)

Required

1. Prepare the journal entries to record each of the four items above.
2. Set up T accounts for the Accounts Receivable and the Allowance for Doubtful Accounts and enter their January 1, 2020, balances. Post the entries from part “a” and calculate the new balances in these accounts.
3. Prepare the journal entry to record the bad debts expense for 2020. Ajacks Company uses the aging of accounts receivable method and has prepared an aging schedule, which indicates that the estimated value of the uncollectible accounts as at the end of 2020 is $93,000.
4. Show what would be presented on the statement of financial position as at December 31, 2020, related to accounts receivable.

Marigold Inc. began operations in January 2018 and reported the following results for each of its 3 years of operations.

At December 31, 2020, Marigold Inc. capital accounts were as follows.

Marigold Inc. has never paid a cash or stock dividend. There has been no change in the capital accounts since Marigold began operations. The state law permits dividends only from retained earnings.

(a) Compute the book value of the common stock at December 31, 2020. (Round answers to 2 decimal places, e.g. $38.50.)

(b) Compute the book value of the common stock at December 31, 2020, assuming that the preferred stock has a liquidating value of $107 per share. (Round answers to 2 decimal places, e.g. $38.50.)

Novak Sports began operations on January 2, 2020. The following stock record card for footballs was taken from the records at the end of the year.

A physical inventory on December 31, 2020, reveals that 119 footballs were in stock. The bookkeeper informs you that all the discounts were taken. Assume that Novak Football Shop uses the invoice price less discount for recording purchases.

Compute the December 31, 2020, inventory using the FIFO method.

Compute the 2020 cost of goods sold using the LIFO method.

What method would you recommend to the owner to minimize income taxes in 2020 based on the inventory info?