The following is a partial trial balance for General Lighting Corporation as of December 31, 2018:

300,000 shares of common stock were outstanding throughout 2018. Income tax expense has not yet been recorded. The income tax rate is 40%.

Required:
1. Prepare a single-step income statement for 2018, including EPS disclosures.
2. Prepare a multiple-step income statement for 2018, including EPS disclosures.

Prepare a single-step income statement for 2018, including EPS disclosures. (Round EPS answer to 2 decimal places.)

Prepare a multiple-step income statement for 2018, including EPS disclosures. (Round EPS answer to 2 decimal places. Amounts to be deducted should be indicated with a minus sign.)

The Rosa model of Mohave Corp. is currently manufactured as a very plain umbrella with no decoration. The company is considering changing this product to a much more decorative model by adding a silk-screened design and embellishments. A summary of the expected costs and revenues for Mohave’s two options follows:      

Required:
1. Determine the increase or decrease in profit if Mohave sells the Rosa Umbrella with the additional decorations.

  

2. Should Mohave add decorations to the Rosa umbrella?

3-a. Suppose that the higher price of the decorated umbrella is expected to reduce estimated demand for this product to 18,000 units. Determine the increase or decrease in profit if Mohave sells the Rosa Umbrella with the additional decorations.

3-b. Should Mohave add decorations to the Rosa umbrella?

Zdon Inc. reports an accounting income of $105,000 for 2020, its first year of operations. The following items cause taxable income to be different than income reported on the financial statements.1- Capital cost allowance (on the tax return) is greater than depreciation on the income statement by $16,000. 2- Rent revenue reported on the tax return in $24,000 higher than rent revenue reported on the income statement. 3- non-deductible fines appear as an expense of $15,000 on the income statement. 4- Zdon's tax rate is 30% for all years and the company expects to report taxable income in all future years. Zdon report under IFRS

Instructions:

a. Calculate taxable income and income tax payable for 2020.

b. Calculate any deferred tax balances at December 31, 2020.

c. Prepare the journal entries to record income taxes for 2020.

d. Prepare the income tax expense section of the income statement for 2020, beginning with the line "Income before income tax"

e. reconcile the statutory and effective rates of income tax for 2020. Round rates to one decimal place.

f. Provide the SFP presentation for any resulting deferred tax accounts at December 31, 2020. Be specific about the classification.

g. Repeat part (f) assuming Zdon follow ASPE

On January 1, 2021, Ithaca Corp. purchases Cortland Inc. bonds that have a face value of $250,000. The Cortland bonds have a stated interest rate of 8%. Interest is paid semiannually on June 30 and December 31, and the bonds mature in 10 years. For bonds of similar risk and maturity, the market yield on particular dates is as follows: (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.):

Required:
1. Calculate the price Ithaca would have paid for the Cortland bonds on January 1, 2021 (ignoring brokerage fees), and prepare a journal entry to record the purchase.
2. Prepare all appropriate journal entries related to the bond investment during 2021, assuming Ithaca accounts for the bonds as a held-to-maturity investment. Ithaca calculates interest revenue at the effective interest rate as of the date it purchased the bonds.
3. Prepare all appropriate journal entries related to the bond investment during 2021, assuming that Ithaca chose the fair value option when the bonds were purchased, and that Ithaca determines fair value of the bonds semiannually. Ithaca calculates interest revenue at the effective interest rate as of the date it purchased the bonds.

Milano Pizza is a small neighborhood pizzeria that has a small area for in-store dining as well as offering take-out and free home delivery services. The pizzeria’s owner has determined that the shop has two major cost drivers—the number of pizzas sold and the number of deliveries made.

The pizzeria’s cost formulas appear below:

Fixed Cost
per Month Cost per
Pizza Cost per
Delivery
Pizza ingredients $ 4.70
Kitchen staff $ 5,970
Utilities $ 640 $ 0.60
Delivery person $ 3.40
Delivery vehicle $ 660 $ 1.80
Equipment depreciation $ 424
Rent $ 1,930
Miscellaneous $ 760 $ 0.06

In November, the pizzeria budgeted for 1,650 pizzas at an average selling price of $18 per pizza and for 250 deliveries.

Data concerning the pizzeria’s actual results in November appear below:

Actual Results
Pizzas 1,750
Deliveries 230

Revenue $ 32,080
Pizza ingredients $ 7,750
Kitchen staff $ 5,910
Utilities $ 900
Delivery person $ 782
Delivery vehicle $ 992
Equipment depreciation $ 424
Rent $ 1,930
Miscellaneous $ 808

Required:

1. Complete the flexible budget performance report that shows both revenue and spending variances and activity variances for the pizzeria for November. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

ElecBooks Corporation provides an online bookstore for electronic books. The following is a simplified list of accounts and amounts reported in its accounting records. The accounts have normal debit or credit balances. Amounts in the list of accounts are rounded to the nearest thousand dollars. Assume the year ended on September 30, 2017.

Required:
1-a. Prepare an adjusted trial balance at September 30, 2017. (Enter your an

2.Prepare the closing entry required at September 30, 2017. (Enter your answers in thousands. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
3.Prepare a post-closing trial balance at September 30, 2017. (Enter your answers in thousands.)

Divisional Income Statements and Return on Investment Analysis

E.F. Lynch Company is a diversified investment company with three operating divisions organized as investment centers. Condensed data taken from the records of the three divisions for the year ended June 30, 20Y8, are as follows:

The management of E.F. Lynch Company is evaluating each division as a basis for planning a future expansion of operations.

Required:

1. Prepare condensed divisional income statements for the three divisions, assuming that there were no service department charges.

2. Using the DuPont formula for rate of return on investment, compute the profit margin, investment turnover, and rate of return on investment for each division. Round your answers to one decimal place.

3. When faced with limited funds for expansion, management should consider an expansion of the Division first.

Milano Pizza is a small neighborhood pizzeria that has a small area for in-store dining as well as offering take-out and free home delivery services. The pizzeria’s owner has determined that the shop has two major cost drivers—the number of pizzas sold and the number of deliveries made.

The pizzeria’s cost formulas appear below:

In November, the pizzeria budgeted for 1,830 pizzas at an average selling price of $16 per pizza and for 230 deliveries.

Data concerning the pizzeria’s actual results in November appear below:

Required:

1. Complete the flexible budget performance report that shows both revenue and spending variances and activity variances for the pizzeria for November. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

Exercise 9-14 (Algo) Prepare a Flexible Budget Performance Report [LO9-4] Lavage Rapide is a Canadian company that owns and operates a large automatic car wash facility near Montreal. The following table provides data concerning the company’s costs: Fixed Cost per Month Cost per Car Washed Cleaning supplies $ 0.60 Electricity $ 1,100 $ 0.10 Maintenance $ 0.15 Wages and salaries $ 4,900 $ 0.30 Depreciation $ 8,100 Rent $ 2,200 Administrative expenses $ 1,800 $ 0.03 For example, electricity costs are $1,100 per month plus $0.10 per car washed. The company expects to wash 8,200 cars in August and to collect an average of $6.00 per car washed. The actual operating results for August are as follows: Lavage Rapide Income Statement For the Month Ended August 31 Actual cars washed 8,300 Revenue $ 51,300 Expenses: Cleaning supplies 5,420 Electricity 1,890 Maintenance 1,470 Wages and salaries 7,720 Depreciation 8,100 Rent 2,400 Administrative expenses 1,946 Total expense 28,946 Net operating income $ 22,354 Required: Prepare a flexible budget performance report that shows the company’s revenue and spending variances and activity variances for August. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

Joyner Pickled Pepper Company produces pickled jalapeno pepper relish. Selected results from the most current year were as follows:

Production manager Veronica Brockman is investigating the purchase of a new brining station that will increase the plant’s production capacity. Based on her research, Veronica thinks the station would cost $162,000 and would increase sales revenue by $200,000 and operating profit by $26,000.

Calculate Joyner’s current margin, asset turnover, and return on investment. (Round answers to 2 decimal places, e.g. 52.75.)

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Calculate Joyner’s margin, asset turnover, and return on investment assuming the company purchases the new brining station. (Round answers to 2 decimal places, e.g. 52.75.)

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Assume Veronica Brockman’s annual bonus is based on the company’s return on investment. Will Veronica support the purchase of the new brining station?