The cost of equipment purchased by Bramble, Inc., on June 1, 2020, is $92,400. It is estimated that the machine will have a $8,400 salvage value at the end of its service life. Its service life is estimated at 7 years, its total working hours are estimated at 42,000, and its total production is estimated at 600,000 units. During 2020, the machine was operated 6,900 hours and produced 63,200 units. During 2021, the machine was operated 6,320 hours and produced 55,200 units.

Compute depreciation expense on the machine for the year ending December 31, 2020, and the year ending December 31, 2021, using the following methods. (Round depreciation per unit to 2 decimal places, e.g. 15.25 and final answers to 0 decimal places, e.g. 45,892.)

On January 1, 2020, Patriot Inc. acquires 100% of SoreLoser Corp.'s outstanding common stock by exchanging 80,000 shares of Patriot's $10 par value common voting stock. On January 1, 2020, Patriot's voting common stock had a market value of $60.00 per share. SoreLoser's balances on the acquisition date, just prior to acquisition are listed below. SORELOSER IS BEING DISSOLVED.

                                                                            BOOK             FAIR MARKET

                                                                            VALUE                  VALUE

CASH $ 125,000                 $ 125,000

ACCOUNTS RECEIVABLE 275,000                    275,000

INVENTORY 330,000                    360,000

LAND 400,000                    460,000

BUILDING (NET) 1,250,000                1,500,000  

EQUIPMENT (NET) 1,620,000                1,475,000

ACCOUNTS PAYABLE (250,000)                (250,000)

COMMON STOCK, $1 PAR (1,000,000)             

ADDITIONAL PAID IN CAPITAL(1,500,000)

RETAINED EARNINGS, 1/1/2020(1,250,000)                 

Required:
Compute the value of the Goodwill account on the date of acquisition, 1/1/2020.

RECORD THE JOURNAL ENTRY FOR THE ACQUISITION OF INVESTMENT ON PATRIOT'S BOOKS

On December 31, 2019, Sarasota Inc. borrowed $3,960,000 at 13% payable annually to finance the construction of a new building. In 2020, the company made the following expenditures related to this building: March 1, $475,200; June 1, $792,000; July 1, $1,980,000; December 1, $1,980,000. The building was completed in February 2021. Additional information is provided as follows.

(a)

New attempt is in progress. Some of the new entries may impact the last attempt grading.Your answer is incorrect.

Determine the amount of interest to be capitalized in 2020 in relation to the construction of the building.

The cost of equipment purchased by Blossom, Inc., on June 1, 2020, is $105,000. It is estimated that the machine will have a $4,200 salvage value at the end of its service life. Its service life is estimated at 7 years, its total working hours are estimated at 50,400, and its total production is estimated at 504,000 units. During 2020, the machine was operated 7,440 hours and produced 68,200 units. During 2021, the machine was operated 6,820 hours and produced 59,520 units.

Compute depreciation expense on the machine for the year ending December 31, 2020, and the year ending December 31, 2021, using the following methods. (Round depreciation per unit to 2 decimal places, e.g. 15.25 and final answers to 0 decimal places, e.g. 45,892.)

2020
2021
(a)       Straight-line      
$
$
(b)       Units-of-output      
$
$
(c)       Working hours      
$
$
(d)       Sum-of-the-years'-digits      
$
$
(e)       Double-declining-balance (twice the straight-line rate)      
$
$

Two accountants for the firm of Elwes and Wright are arguing about the merits of presenting an income statement in a multiple-step versus a single-step format. The discussion involves the following 2020 information related to P. Bride Company ($000 omitted). Administrative expense Officers' salaries $4,900 Depreciation of office furniture and equipment 3,960 Cost of goods sold 60,570 Rent revenue 17,230 Selling expense Delivery expense 2,690 Sales commissions 7,980 Depreciation of sales equipment 6,480 Sales revenue 96,500 Income tax 9,070 Interest expense 1,860 Common shares outstanding for 2020 total 40,550 (000 omitted). Prepare an income statement for the year 2020 using the multiple-step form. (Round earnings per share to 2 decimal places, e.g. 1.48.) Prepare an income statement for the year 2020 using the single-step form. (Round earnings per share to 2 decimal places, e.g. 1.48.)

Clemson Company had the following stockholders’ equity as of January 1, 2020.

During 2020, the following transactions occurred.

Prepare the stockholders’ equity section as of April 30, 2020. Net income for the first 4 months of 2020 was $130,000. (Enter account name only and do not provide descriptive information.)

1. Consider the purchase of a new farm truck (automobile). The specific information is:

Total Purchase cost = $150,000.00              Purchase date = Jan 1, 2020

Useful life = 6 years                                      Salvage value = $50,000.00

Note: each highlighted box is worth 1 point

Complete each depreciation table.

ECONOMIC DEPRECIATION:

1. Fill in the table using the straight-line depreciation method for economic depreciation. (5 points)

1. Fill in the table using the straight-line method for economic depreciation as if the purchase date was October 1, 2020 (partial year method) (7 points)

On June 1, 2020, Krypton Industries [KI] purchased a call option for $ 2,400, giving it the right to buy 2,000 shares of Kriminel Corporation for $ 20 per share. On June 30, 2020, similar options were being traded at $3,100. On August 18, 2020, when the option value was $ 12,000, Omega settles the option for cash. On August 18, 2020, KI settles the option for cash when the option value in the market is $12,000.

Prepare the journal entry in the books of KI, if required, to record this transaction.

a. No Journal Entry Required.

b. Derivatives - Financial Assets/Liabilities ........ DR $8,900; Cash ........ CR $8,900

c. Cash ........ DR $12,000; Derivatives - Financial Assets/Liabilities ........ CR $3,100; Gain/Loss On Derivatives ........ CR $8,900

d. Derivatives - Financial Assets/Liabilities ........ DR $700; Cash ........ CR $700 e. Cash ........ DR $12,000; Gain/Loss On Derivatives ........ CR $12,000

Cullumber Corporation had 102,000 common shares outstanding on December 31, 2019. During 2020, the company issued 12,000 shares on March 1, retired 6,800 shares on July 1, issued a 20% stock dividend on October 1, and issued 18,300 shares on December 1. For 2020, the company reported net income of $408,000 after a loss from discontinued operations of $64,000 (net of tax). The company issued a 2-for-1 stock split on February 1, 2021, and the company’s financial statements for the year ended December 31, 2020, were issued on February 28, 2021.

Calculate earnings per share for 2020 as it should be reported to shareholders. (Round answer to 2 decimal places, e.g. 15.75.)

While reviewing the March 31, 2020, balance sheet of Business Solutions, Santana Rey notes that the business has built a large cash balance of $68,146. Its most recent bank money market statement shows that the funds are earning an annualized return of 0.64%. S. Rey decides to make several investments with the desire to earn a higher return on the idle cash balance. Accordingly, in April 2020, Business Solutions makes the following investments in trading securities

On June 30, 2020, the fair value of the Johnson & Johnson bonds is $14,700 and the Starbucks notes is $3,700.

Required:
1. Prepare journal entries to record the April purchases of trading securities by Business Solutions.
2. On June 30, 2020, prepare the adjusting entry to record any necessary fair value adjustment to its portfolio of trading securities.