As a long-term investment, Painters' Equipment Company purchased 20% of AMC Supplies Inc.'s 420,000 shares for $500,000 at the beginning of the fiscal year of both companies. On the purchase date, the fair value and book value of AMC’s net assets were equal. During the year, AMC earned net income of $270,000 and distributed cash dividends of 25 cents per share. At year-end, the fair value of the shares is $527,000.

Required:
1. Assume no significant influence was acquired. Prepare the appropriate journal entries from the purchase through the end of the year.
2. Assume significant influence was acquired. Prepare the appropriate journal entries from the purchase through the end of the year.

Statement of Cash Flows The following items involve the cash flow activities of Rocky Horror Picture Co.: Net income, $42,800 Payment of dividends, $16,000 Ten-year, $33,000 bonds payable were issued at face value Depreciation expense, $24,500 Building acquired at a cost of $33,400 Accounts receivable decreased by $3,600 Accounts payable decreased by $4,700 Equipment acquired at a cost of $8,000 Inventories increased by $5,800 Beginning cash balance, $17,700 Required: Prepare Rocky Horror Picture’s statement of cash flows using the indirect method. ROCKY HORROR PICTURE CO. Statement of Cash Flows For Year Ended December 31, Current Year Operating Activities:

(a)Describe intangible assets? Give THREE (3) examples of intangible assets.

(b)How is the cost of the intangible assets be determined if it is acquired by issuance of shares.

(c)Identify THREE (3) typical costs included in the cash purchase of an intangible asset.

(d)Assuming that MCO Bhd acquires the customer list of a social media for RM8,000,000. The company expects to benefit from the information evenly over a four-year period. REQUIRED: Explain the accounting treatment for the customer list acquired by MCO Bhd in accordance with MFRS 138 Intangible Assets.

(e)Based on MFRS 138 Intangible Assets, state TWO (2) criteria that an entity must meet in order for the development costs (e.g. construction of prototypes) to be capitalised?

Gwen Stefani makes the following charitable donations in the current year:

1. Inventory held for resale in Gwen Stefani’s business (a sole proprietorship)

Basis $ 8,000, Market Value $ 7,200

2. Stock in Driskoll, Inc., held as an investment (acquired two years ago)

Basis 16,000, Market Value 40,000

3. Coin collection held as an investment (acquired five years ago)

Basis 4,000, Market Value 20,000

The Driskoll stock and the inventory were given to Gwen Stefani’s church, and the coin collection was given to the Salvation Army. Both donees promptly sold the property for the stated fair market value. Disregarding percentage limitations, Gwen Stefani’s current charitable contribution deduction is:

Zoum Corporation had the following transactions during the year: Issued $250,000 of par value common stock for cash. Recorded and paid wages expense of $120,000. Acquired land by issuing common stock of par value $100,000. Declared and paid a cash dividend of $20,000. Sold a long-term investment (cost $8,000) for cash of $6,000. Recorded cash sales of $800,000. Bought inventory for cash of $320,000. Acquired an investment in Zynga stock for cash of $42,000. Converted bonds payable to common stock in the amount of $1,000,000. Repaid a 6-year note payable in the amount of $440,000. What is the net cash provided by financing activities? Group of answer choices ($1,210,000). $230,000. ($210,000). $790,000.

Staub Company began operations when it acquired $135,000 cash from the issue of common stock on January 1, 2013.

The cash acquired was immediately used to purchase equipment for $135,000

that had a $27,000 salvage value and an expected useful life of four years. The equipment was
used to produce the following revenue stream (assume all revenue transactions are for cash). At the

beginning of the fifth year, the equipment was sold for $13,500 cash.
Staub Company uses straight-line depreciation. Asssume depreciation is the only expense to record.

2013 2014 2015 2016 2017 Revenue $ 25,200 $ 27,600 $ 28,800 $ 23,400 0

REQUIRED

Prepare income statements, balance sheets, and statements of cash flows for each of the five years.

As a long-term investment, Painters' Equipment Company purchased 25% of AMC Supplies Inc.'s 520,000 shares for $600,000 at the beginning of the fiscal year of both companies. On the purchase date, the fair value and book value of AMC’s net assets were equal. During the year, AMC earned net income of $370,000 and distributed cash dividends of 25 cents per share. At year-end, the fair value of the shares is $637,000.

Required:
1. Assume no significant influence was acquired. Prepare the appropriate journal entries from the purchase through the end of the year.
2. Assume significant influence was acquired. Prepare the appropriate journal entries from the purchase through the end of the year.

As a long-term investment, Painters' Equipment Company purchased 20% of AMC Supplies Inc.'s 400,000 shares for $480,000 at the beginning of the fiscal year of both companies. On the purchase date, the fair value and book value of AMC’s net assets were equal. During the year, AMC earned net income of $250,000 and distributed cash dividends of 25 cents per share. At year-end, the fair value of the shares is $505,000.

Required:
1. Assume no significant influence was acquired. Prepare the appropriate journal entries from the purchase through the end of the year.
2. Assume significant influence was acquired. Prepare the appropriate journal entries from the purchase through the end of the year.

Question 1

At 30 June 2019, Beta Ltd had the following deferred tax balances: Deferred tax liability $18,000 Deferred tax asset 15,000 Beta Ltd recorded a profit before tax of $80,000 for the year to 30 June 2020, which included the following items: Depreciation expense – plant $7,000 Doubtful debts expense 3,000 Long-service leave expense 4,000 For taxation purposes the following amounts are allowable deductions for the year to 30 June 2020: Tax depreciation – plant $8,000 Bad debts written off 2,000 Depreciation ratesfor taxation purposes are higher than for accounting purposes. A corporate tax rate of 30% applies.

Required:

a) Determine the taxable income and income tax payable for the year to 30 June 2020. (2.5 Marks)

b) Determine by what amount the balances of the deferred liability and deferred tax asset will increase or decrease for the year to 30 June 2020 because of depreciation, doubtful debts and long-service leave.

c) Prepare the necessary journal entries to account for income tax assuming recognition criteria are satisfied. (2.5 marks)

d) What are the balances of the deferred tax liability and deferred tax asset at 30 June 2020?

Glaus Leasing Company agrees to lease equipment to Jensen Corporation on January 1, 2020. The following information relates to the lease agreement.

b. Calculation for annual rental payment

d. Prepare the journal entries Jensen would make in 2020 and 2021 related to the lease arrangement

e. Prepare the journal entries Glaus would make in 2020 and 2021