ABC Corp purchased and placed in service the following assets in 2018:

a. $ 2,000,000 of 7 year property on 4/15/18, and

b. $2,000,000 of 5 year property on 8/15/18

Calculate ABC's 2018 maximum depreciation deduction under MACRS, sec 170 and bonus depreciation if ABC elects out of bonus depreciation for the 5 year property.

The stock market provided the following return over the last 3 years.

1. What is the arithmetic average return?
2. What is the geometric average return?
3. Suppose you invested $1000 at the beginning of each of 2016,2017,2018 and withdrew all funds at the end of 2018, what is your average return (IRR)

What is the journal entry for the following?

The bank statement as of December 31, 2018

5) The liability insurance policies were paid for two years coverage on July 1, 2018.

On January 1, 2018 you bought a zero coupon bond with 5 years to maturity at $ 675. On January 1, 2019 this bond traded at $ 731. What would be your taxable income from holding this bond in 2018, if straight-line method for interest deduction were used?

a. $ 67.25

b. $ 56

c. $ 32.5

d. $ 65

e. $ 0

Taxpayer places in service new equipment for $800,000 (7 year property) on August 15, and elects immediate expensing of the maximum amount:

2016 2018

Cost of equipment

179 deduction

additional first year depreciation

amount subject to MACRS (MACRS rate .1429)

Total cost recovery allowed in 2016

What is same facts but under 2018 law?

Arnez Company’s annual accounting period ends on December 31, 2018. The following information concerns the adjusting entries to be recorded as of that date.

1. The Office Supplies account started the year with a $4,350 balance. During 2018, the company purchased supplies for $17,966, which was added to the Office Supplies account. The inventory of supplies available at December 31, 2018, totaled $3,828.
2. An analysis of the company's insurance policies provided the following facts.

The total premium for each policy was paid in full (for all months) at the purchase date, and the Prepaid Insurance account was debited for the full cost. (Year-end adjusting entries for Prepaid Insurance were properly recorded in all prior years.)

3. The company has 15 employees, who earn a total of $1,600 in salaries each working day. They are paid each Monday for their work in the five-day workweek ending on the previous Friday. Assume that December 31, 2018, is a Tuesday, and all 15 employees worked the first two days of that week. Because New Year’s Day is a paid holiday, they will be paid salaries for five full days on Monday, January 6, 2019.
4. The company purchased a building on January 1, 2018. It cost $615,000 and is expected to have a $45,000 salvage value at the end of its predicted 30-year life. Annual depreciation is $19,000.
5. Since the company is not large enough to occupy the entire building it owns, it rented space to a tenant at $3,500 per month, starting on November 1, 2018. The rent was paid on time on November 1, and the amount received was credited to the Rent Earned account. However, the tenant has not paid the December rent. The company has worked out an agreement with the tenant, who has promised to pay both December and January rent in full on January 15. The tenant has agreed not to fall behind again.
6. On November 1, the company rented space to another tenant for $3,171 per month. The tenant paid five months' rent in advance on that date. The payment was recorded with a credit to the Unearned Rent account.

Required:
1. Use the information to prepare adjusting entries as of December 31, 2018.
2. Prepare journal entries to record the first subsequent cash transaction in 2019 for parts c and e.

Q1)The following information summarizes all cash-related transactions for BBB.Ltd in 2018:
1. BBB. Ltd had $25,000 cash in its Bank account at the start of 2018.
2. On 1 January 2018 the company took out a $75,000 loan from Arab Bank. The loan
has an annual interest rate of 15%. The interest on the loan was paid on time in 2018.
BBB .Ltd sells its products to customers on credit (the agreed credit term is 30 days).
During 2018, it received $850,000 from customers in respect of sales of inventory
made to them.
3. BBB. Ltd purchased components for its products on credit (the agreed credit term is
also 30 days). During 2018, it paid $550,000 to suppliers for purchases of components.
4. A new production line was acquired in the year at a cost of $120,000.
5. Salaries paid for the year amounted to $40,000. Various other operating expenses paid
for by the business amounted to $75,000 for the year.
6. $25,000 was paid to shareholders as dividends.
7. Last year’s tax liability to BBB.Ltd of $22,000 was settled in 2018.
Required:
Prepare BBB.Ltd’s statement of cash flows for the year to 31 December 2018 using the
direct method.

Q2)The following information had been prepared for XYZ Limited for the year to 31 December
2019.

Complete the following table below assumes that the XYZ Company adapts the flexible
budget method based on 120 % of its operating activities costs. Indicate whether the variance
is a favorable or adverse under each budgeting system (fixed and flexible budget)

(1) (2) (3) (4) (5) (6) (7)

Activity Level Fixed Budget
Flexible
Budget
(120%)

Actual Costs Fixed-
Actual

Favorable/
Adverse

Flexible-
Actual

Favorable
/Adverse

US$ US$ US$ US$ US$

Direct Materials 100,000 115,000
Direct Labor 150,000 185,000
Variables Overhead 50,000 55,000
Total Variables Costs 300,000 355,000
Fixed Costs 60,000 65,000
Total Costs 360,000 420,000

Problem 10-5A Understand stockholders' equity and the statement of stockholders' equity (LO10-7)

[The following information applies to the questions displayed below.]

Donnie Hilfiger has two classes of stock authorized: $1 par preferred and $0.01 par value common. As of the beginning of 2018, 300 shares of preferred stock and 2,400 shares of common stock have been issued. The following transactions affect stockholders’ equity during 2018:

March 1 Issue 1,100 shares of common stock for $26 per share.

May 15 Purchase 400 shares of treasury stock for $19 per share.

July 10 Reissue 200 shares of treasury stock purchased on May 15 for $24 per share.

October 15 Issue 200 shares of preferred stock for $29 per share.

December 1 Declare a cash dividend on both common and preferred stock of $0.70 per share to all stockholders of record on December 15. (Hint: Dividends are not paid on treasury stock.)

December 31 Pay the cash dividends declared on December 1.

Donnie Hilfiger has the following beginning balances in its stockholders’ equity accounts on January 1, 2018: Preferred Stock, $300; Common Stock, $24; Additional Paid-in Capital, $60,000; and Retained Earnings, $22,500. Net income for the year ended December 31, 2018, is $9,200.

Taking into consideration the beginning balances on January 1, 2018 and all the transactions during 2018, respond to the following for Donnie Hilfiger:

References

Section BreakProblem 10-5A Understand stockholders' equity and the statement of stockholders' equity (LO10-7)

16.

value:
2.00 points

Required information

Problem 10-5A Part 1

Required:

1. Prepare the stockholders’ equity section of the balance sheet as of December 31, 2018. (Amounts to be deducted should be indicated by a minus sign.)

References

eBook & Resources

WorksheetDifficulty: 3 Hard

Problem 10-5A Part 1Learning Objective: 10-07 Prepare and analyze the stockholders' equity section of a balance sheet and the statement of stockholders' equity.

Check my work

17.

value:
2.50 points

Required information

Problem 10-5A Part 2

2. Prepare the statement of stockholders’ equity for the year ended December 31, 2018. (Amounts to be deducted should be indicated by a minus sign.)

rev: 04_19_2017_QC_CS-86235

Required information

[The following information applies to the questions displayed below.]

Drs. Glenn Feltham and David Ambrose began operations of their physical therapy clinic, called Northland Physical Therapy, on January 1, 2017. The annual reporting period ends December 31. The trial balance on January 1, 2018, was as follows (the amounts are rounded to thousands of dollars to simplify):

Transactions during 2018 (summarized in thousands of dollars) follow:

1. Borrowed $24 cash on July 1, 2018, signing a six-month note payable.
2. Purchased equipment for $27 cash on July 2, 2018.
3. Issued additional shares of common stock for $4 on July 3.
4. Purchased software on July 4, $4 cash.
5. Purchased supplies on July 5 on account for future use, $6.
6. Recorded revenues on December 6 of $59, including $10 on credit and $49 received in cash.
7. Recognized salaries and wages expense on December 7 of $32; paid in cash.
8. Collected accounts receivable on December 8, $7.
9. Paid accounts payable on December 9, $8.
10. Received a $4 cash deposit on December 10 from a hospital for a contract to start January 5, 2019.

Data for adjusting journal entries on December 31:

11. Amortization for 2018, $1.
12. Supplies of $4 were counted on December 31, 2018.
13. Depreciation for 2018, $2.
14. Accrued interest of $1 on notes payable.
15. Salaries and wages incurred but not yet paid or recorded, $2.
16. Income tax expense for 2018 was $5 and will be paid in 2019.

Required:

2. Record journal entries for transactions (a) through (j). (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in thousands of dollars.)