Waterway Inc. reported the following pretax income (loss) and related tax rates during the years 2019–2022.

Pretax financial income (loss) and taxable income (loss) were the same for all years since Waterway began business. The tax rates from 2019–2022 were enacted in 2019.

a.  Prepare the journal entries for the years 2020-2022 to record income taxes payable (refundable), income tax expense (benefit), and the tax effects of the loss carryforward. Assume that Jennings expects to realize the benefits of any loss carryforward in the year that immediately follows the loss year.

c.  Prepare the portion of the income statement, starting with “Operating loss before income taxes,” for 2020.

d.  Prepare the portion of the income statement, starting with “Income before income taxes,” for 2021.

Tamarisk Inc. reported the following pretax income (loss) and related tax rates during the years 2019–2022.

Pretax financial income (loss) and taxable income (loss) were the same for all years since Tamarisk began business. The tax rates from 2019–2022 were enacted in 2019.

Prepare the journal entries for the years 2020–2022 to record income taxes payable (refundable), income tax expense (benefit), and the tax effects of the loss carryforward. Assume that Tamarisk expects to realize the benefits of any loss carryforward in the year that immediately follows the loss year.

Prepare the portion of the income statement, starting with “Operating loss before income taxes,” for 2020.

Prepare the portion of the income statement, starting with “Income before income taxes,” for 2021.

Concord Inc. reported the following pretax income (loss) and related tax rates during the years 2019–2022.

Pretax financial income (loss) and taxable income (loss) were the same for all years since Concord began business. The tax rates from 2019–2022 were enacted in 2019.

1. Prepare the journal entries for the years 2020–2022 to record income taxes payable (refundable), income tax expense (benefit), and the tax effects of the loss carryforward. Assume that Concord expects to realize the benefits of any loss carryforward in the year that immediately follows the loss year

2. Prepare the portion of the income statement, starting with “Operating loss before income taxes,” for 2020.

3. Prepare the portion of the income statement, starting with “Income before income taxes,” for 2021.

Bramble Inc. reported the following pretax income (loss) and related tax rates during the years 2019–2022. Pretax Income (loss) Tax Rate 2019 $84,800 40 % 2020 (190,800) 40 % 2021 212,000 20 % 2022 106,000 20 % Pretax financial income (loss) and taxable income (loss) were the same for all years since Bramble began business. The tax rates from 2019–2022 were enacted in 2019.

Prepare the journal entries for the years 2020–2022 to record income taxes payable (refundable), income tax expense (benefit), and the tax effects of the loss carryforward. Assume that Bramble expects to realize the benefits of any loss carryforward in the year that immediately follows the loss year.

Prepare the portion of the income statement, starting with “Operating loss before income taxes,” for 2020.

Prepare the portion of the income statement, starting with “Income before income taxes,” for 2021.

The following account balances were included in the trial balance of Sarasota Corporation at June 30, 2020:

During 2020, Sarasota incurred production salary and wage costs of $698,300, consumed raw materials and other production supplies of $477,670, and had an increase in work-in-process and finished goods inventories of $114,200. The Retained Earnings account had a balance of $278,000 at June 30, 2020, before closing. There are 180,000 common shares outstanding. Assume Sarasota has elected to adopt IFRS. (Hint: Production payroll and materials costs reduced by the increase in ending work-in-process and finished goods inventories = the cost of goods sold.)

a.Prepare an income statement for the year ended June 30, 2020, using the multiple-step format and showing expenses by function. (List Selling Expenses before Administrative Expenses. Round per share answer to 2 decimal places, e.g. 52.74.)

b.Prepare the retained earnings portion of the statement of changes in equity for the year ended June 30, 2020. (List items that increase retained earnings first after adjusted balance.)

c.Prepare an income statement for the year ended June 30, 2020, using the single-step format and showing expenses by nature. (Round per share answer to 2 decimal places, e.g. 52.74.)

d.Assume the average market price of the common shares outstanding was $31.70. What was Sarasota’s price-earnings ratio? (Round answer to 1 decimal place, e.g. 52.5.)

Closing entries are dated in the journal as of:

a.    the date they are actually journalized, although they are generally prepared after the end of the accounting period        

b.    the last day of the accounting period, although they are actually journalized after the end of the accounting period        

c.    the first day of the accounting period, although they are actually journalized after the end of the accounting period        

d.    the first day of the subsequent accounting period      

Which of the following accounts should be closed to Income Summary at the end of the fiscal year?

a.    Supplies Expense        

b.    Accumulated Depreciation        

c.    Prepaid Insurance        

d.    Unearned Rent      

Which of the following accounts will not be closed to Income Summary at the end of the fiscal year?

a.    Salaries Expense        

b.    Fees Earned        

c.    Unearned Rent        

d.    Depreciation Expense      

A fiscal year:

a.    ordinarily begins on the first day of a month and ends on the last day of the following twelfth month        

b.    for a business is determined by the federal government        

c.    always begins on January 1 and ends on December 31 of the same year        

d.    should end at the height of the business's annual operating cycle      

Closing entries are dated in the journal as of:

a.    the date they are actually journalized, although they are generally prepared after the end of the accounting period        

b.    the last day of the accounting period, although they are actually journalized after the end of the accounting period        

c.    the first day of the accounting period, although they are actually journalized after the end of the accounting period        

d.    the first day of the subsequent accounting period      

Which of the following accounts should be closed to Income Summary at the end of the fiscal year?

a.    Supplies Expense        

b.    Accumulated Depreciation        

c.    Prepaid Insurance        

d.    Unearned Rent      

Which of the following accounts will not be closed to Income Summary at the end of the fiscal year?

a.    Salaries Expense        

b.    Fees Earned        

c.    Unearned Rent        

d.    Depreciation Expense      

A fiscal year:

a.    ordinarily begins on the first day of a month and ends on the last day of the following twelfth month        

b.    for a business is determined by the federal government        

c.    always begins on January 1 and ends on December 31 of the same year        

d.    should end at the height of the business's annual operating cycle      

The beginning inventory in Year 2 is under by 3000 and in Year 3 under by 2000. The purchases in Year 2 are over by 4000, and the purchases in Year 3 are also over by 4000. You find these errors in Year 3 after the books of the previous years have closed. What's the correcting entry

WACC

Assume it is January 1, 2020.  Zelus Sport Shoe Company has three debt issues outstanding.

6.5% Notes December 31, 2028 ($200 million face value) Market price $980.05.

7.0% Bonds, maturing December 31, 2030 ($100 million face value) Market price $984.98.

7.5% Bonds, maturing December 31, 2036 ($200 million face value) Market price $1,029.15.

All bonds have a $1,000 face value and pay interest semi-annually.

Use a 5.0% risk-free rate and a 7.0% market risk premium to compute Zelus’s cost of equity.  The table shows the weekly closing prices for Zelus and the S&P 500 Index.  Last week Zelus’s stock closed at $99.75 per share.  There are 16 million shares of common stock outstanding.

The company also has 8 million shares of preferred stock outstanding.  The preferred stock pays an annual $5.00 dividend and current sells for $50 per share.  The tax rate is 30%.

Assume you are doing the WACC calculation on January 1, 2020, and that the semi-annual interest payments of the notes and bonds were paid on December 31, 2019.  Show your beta and the costs and weights of all of the WACC components in the table provided.  Show costs to 3 decimal places.

Beta (3 decimal places) = __________