Question 6: The following company provides a single product and have provided their summary forecast data shown below relating to its product for 2020.    

a. Calculate the contribution margin per unit.                         

b. Calculate the contribution margin ratio.

c. Calculate the break-even in units and sales dollars for 2020.

d.Calculate the profit earned in 2020.

Carla Vista Company, which uses the retail LIFO method to determine inventory cost, has provided the following information for 2020:

Assuming stable prices (no change in the price index during 2020), what is the cost of Carla Vista's inventory at December 31, 2020? (Hint: Round intermediate calculation to 2 decimal places, e.g. 0.63 and final answer to 0 decimal places.)

In 2019, Special Corporation, a calendar year C corporation, has a $75,000 charitable contribution carryover from a gift made in 2014. Special Corporation is contemplating a gift of land to a qualified charity in either 2019 or 2020. Special Corporation purchased the land as an investment five years ago for $100,000 (current year value is $250,000). Before considering any charitable deduction, Special Corporation projects taxable income of $1 million for 2019 and $1.2 million for 2020. Should Special Corporation make the gift of land to charity in 2019 or 2020? Provide detailed calculations and support for your answer.

McKenzie purchased qualifying equipment for his business that cost $457,900 in 2019. The taxable income of the business for the year is $111,500 before consideration of any § 179 deductions.

If an amount is zero, enter "0".

a. Calculate McKenzie’s § 179 expense deduction for 2019 and any carryover to 2020.
§ 179 expense deduction for 2019: $ _________
§ 179 carryover to 2020: $ _________

b. How would your answer change if McKenzie decided to use additional first-year (bonus) depreciation on the equipment instead of using § 179 expensing? Hint: See Concept Summary 8.5.
§ 179 expense deduction for 2019: $ _________
§ 179 carryover to 2020: __________

Mikey and Sal, married taxpayers filing a joint return, paid state income tax of $12,000 and other itemized deductions of $15,000 in 2020. Because the total of their allowable itemized deductions exceeded the standard deduction, they elected to itemize deductions on their 2020 federal income tax return rather than to claim the standard deduction. In May 2021, Mikey and Sal receive a refund of $1,000 for overpaid state income taxes paid in 2020. Under the tax benefit rule, how much of the $1,000 refund must they include in their gross income for 2021?

Huffy Co., a lessee, records a finance lease of machinery on January 1, 2020. The five annual lease payments of $525,000 are made at the beginning of each year. The present value of the lease payments at 10% is $2,189,180. Huffy uses straight-line depreciation with no salvage value.    

1. Prepare an amortization table for the life of the lease. Round all amounts to the nearest dollar.

b. Prepare all of Huffy’s journal entries for 2020 and 2021 (10 points)

The following information is related to Tobey Corporation for 2020:
 Net Income: $2,500,000
 Common Stock Activities
1/1/20: 700,000 common shares outstanding
3/1/20: Purchased 60,000 treasury shares
7/1/20: 3-for-1 stock split
11/1/20: 120,000 new shares issued for cash
 8% Cumulative Preferred Stock
10,000 shares at $100 par
Required
a. Compute weighted average common shares outstanding (WACSO) for 2020.
b. Compute basic earnings per share for 2020. (Round to no fewer than four decimal places.)

Question 6: The following company provides a single product and have provided their summary forecast data shown below relating to its product for 2020.     

a. Calculate the contribution margin per unit.                                         

b. Calculate the contribution margin ratio.

c. Calculate the break-even in units and sales dollars for 2020.

d.Calculate the profit earned in 2020.

1. A University has recorded the following freshmen enrollment of students in each Academic Year shown below.

Year                Enrollment

2015                     662

2016                     596

2017                     570

2018                     541

2019                     496

      a.   What is the forecast for 2020 using a three period moving average?

b. What is the forecast for 2020 using a weighted moving average, in which the weights are .6, .3, .1?

c. What is the forecast for 2020 using a linear trend?

Extra credit (10 points) – This part is not required. Use the mean absolute deviation (MAD) to determine which method is most accurate.

I’m a Lumberjack and I’m OK Co. (Lumberjack) has the following temporary tax differences:

1. Lumberjack collected rents of $100,000 total for 4 years at the beginning of 2019. For tax purposes, rent revenue is recognized when collected. For financial reporting purposes, the lease is classified as an operating lease and rent revenue is recognized on a straight-line basis over the lease term.

2. Lumberjack has equipment that cost $1,120,000 with an estimated useful life of 7 years. At the end of 2019, the accounting carrying value for the equipment was $480,000 and the tax basis was $349,888. During 2020, the MACRS rate for tax purposes is 8.93%; straight-line depreciation is used for financial reporting purposes.

3. Lumberjack has a defined benefit pension plan for its employees. The accrual basis is used for financial reporting purposes, whereas for tax purposes, deductions are allowed as the plan is funded. As of the end of 2019, pension expense for financial reporting has been $500,000 greater than tax deductions allowed for funding contributions. For 2020, the pension expense recorded for financial reporting purposes was $70,000 and the amount deducted for tax purposes was $30,000.

REQUIRED: Complete the following schedules for each temporary difference to compute current year and future taxable (deductible) amounts for 2020.