Pam and Joe each own 50% of Tucson LLC a limited liability company located in Tucson, AZ which was created in April of 2019. Tucson LLC provides veterinary services and uses the cash method of accounting. Pam and Joe have come to you on December 30, 2019 to ask your advice on some transactions they are considering.

Tucson's financial information is provided below:

Profit and Loss Statement January 1, 2019-December 30, 2019:

Balance Sheet – 12/30/2019

Please provide Tucson LLC advice on the following transaction:

1. They would like to purchase additional equipment for their business, they have not purchased any other fixed assets in 2019.

2. Tucson LLC is considering whether or not they should expand their business to sell flea & tick medications, dog and cat food, pet toys and collars beginning on 1/1/2020. Discuss the tax issues that we have covered so far this semester that may result from Tucson LLC maintaining inventory in addition to providing veterinary services.
3. In order to accommodate the inventory required from #2 above, they believe they would need to relocate to a new space. The fair market value of Tucson LLC’s building is $425,000, the cost, A/D and mortgage on the building are on the balance sheet above. They recently met with two potential buyers for the building:

• Fred Rouleau, who owns a building which would suit their needs. Fred would like to enter into a like kind exchange with Tucson LLC. Fred has agreed to assume Tucson's mortgage on the building as part of the like kind exchange. The relevant information on Fred’s building is as follows:

FMV $400,000

Cost                             $200,000

A/D-Tax                       ($125,000)

• Chris Burke also has a building that would suit Tucson LLC’s needs with a FMV of $430,000. Separately, Tucson LLC’s real estate agent has a buyer interested in purchasing Tucson LLC’s building for its FMV of $425,000.

Determine whether it is better from a tax perspective for Tucson LLC to enter into a like kind exchange with Fred or if they should buy the building from Chris and sell their building to the buyer their real estate agent identified.

When making your determination consider both the gain on sale of the Tucson LLC's building (if any) as well as the tax depreciation expense allowable on the new building acquired by Tucson LLC. You must show your calculations for each scenario as support for your conclusion.

4. Detail for the fixed assets on the balance sheet above is as follows:

   Date Acquired	Description	Cost	Tax A/D
   4/1/2019	Furniture & Fixtures	$15,000	$8,000
   4/1/2019	Veterinary Equipment	$31,000	$12,500
   4/1/2019	Copier	$4,000	$1,000

Sendelbach Corporation is a U.S.-based organization with operations throughout the world. One of its subsidiaries is headquartered in Toronto. Although this wholly owned company operates primarily in Canada, it engages in some transactions through a branch in Mexico. Therefore, the subsidiary maintains a ledger denominated in Mexican pesos (Ps) and a general ledger in Canadian dollars (C$). As of December 31, 2017, the subsidiary is preparing financial statements in anticipation of consolidation with the U.S. parent corporation. Both ledgers for the subsidiary are as follows:

• The Canadian subsidiary’s functional currency is the Canadian dollar, and Sendelbach’s reporting currency is the U.S. dollar. The Canadian and Mexican operations are not viewed as separate accounting entities.

• The building and equipment used in the Mexican operation were acquired in 2007 when the currency exchange rate was C$0.20 = Ps 1.

• Purchases of inventory were made evenly throughout the fiscal year.

• Beginning inventory was acquired evenly throughout 2016; ending inventory was acquired evenly throughout 2017.

• The Main Office account on the Mexican records should be considered an equity account. This balance was remeasured into C$7,680 on December 31, 2017.

• Currency exchange rates for 1 Ps applicable to the Mexican operation follow:

• The December 31, 2016, consolidated balance sheet reported a cumulative translation adjustment with a $52,950 credit (positive) balance.

• The subsidiary’s common stock was issued in 2004 when the exchange rate was $0.45 = C$1.

• The subsidiary’s December 31, 2016, retained earnings balance was C$151,590, an amount that has been translated into U.S.$69,663.

• The applicable currency exchange rates for 1 C$ for translation purposes are as follows:

1. Remeasure the Mexican operation’s account balances into Canadian dollars. (Note: Back into the beginning net monetary asset or liability position.)

2. Prepare financial statements (income statement, statement of retained earnings, and balance sheet) for the Canadian subsidiary in its functional currency, Canadian dollars.

3. Translate the Canadian dollar functional currency financial statements into U.S. dollars so that Sendelbach can prepare consolidated financial statements.

4. SENDELBACH CORPORATION Financial Statements For the Year Ended December 31, 2017 Canadian Dollar U.S. Dollar Income Statement: Sales C$ Cost of goods sold Gross profit C$ 0 $0.00 Salary expense Utility expense Depreciation expense Gain on sale of equipment Remeasurement loss Net income C$ 0 $0.00 Statement of Retained Earnings: Retained earnings, 1/1/15 C$ Net income Retained earnings, 12/31/15 C$ 0 $0.00 Balance Sheet: Assets: Cash C$ Buildings and equipment Receivables Inventory Total C$ 0 $0.00 Liabilities and Equities: Common stock C$ Cumulative translation adjustment Retained earnings Total C$ 0 $0.00

Salmone Company reported the following purchases and sales for its only product. Salmone uses a perpetual inventory system. Determine the cost assigned to cost of goods sold using LIFO.

$2,260

$3,180

$1,860

$3,580

$2,100

For several years Fister Links Products has held Microsoft bonds, considered by the company to be securities available-for-sale. The bonds were acquired at a cost of $500,000. At the end of 2018, their fair value was $610,000 and their amortized cost was $510,000. At the end of 2019, their fair value was $600,000 and their amortized cost was $520,000.

At what amount will the investment be reported in the December 31, 2019, balance sheet? What adjusting entry is required to accomplish this objective (ignore interest)?

(please explain how did you get the adjusting entry/ steps)

Parkette, Inc., acquired a 60 percent interest in Skybox Company several years ago. During 2017, Skybox sold inventory costing $188,000 to Parkette for $235,000. A total of 13 percent of this inventory was not sold to outsiders until 2018. During 2018, Skybox sold inventory costing $225,320 to Parkette for $262,000. A total of 30 percent of this inventory was not sold to outsiders until 2019. In 2018, Parkette reported cost of goods sold of $577,500 while Skybox reported $365,000. What is the consolidated cost of goods sold in 2018?

Salmone Company reported the following purchases and sales of its only product. Salmone uses a perpetual inventory system. Determine the cost assigned to ending inventory using LIFO.

Multiple Choice

$7,160

$6,960

$14,935

$7,640

$7,975

Salmone Company reported the following purchases and sales of its only product. Salmone uses a perpetual inventory system. Determine the cost assigned to ending inventory using LIFO. Date Activities Units Acquired at Cost Units Sold at Retail May 1 Beginning Inventory 150 units @ $10.00 5 Purchase 220 units @ $12.00 10 Sales 140 units @ $20.00 15 Purchase 100 units @ $13.00 24 Sales 90 units @ $21.00

Multiple Choice $2,980 $2,460 $2,860 $5,440 $2,590

nzelmo Corporation invested in Jones Manufacturing by purchasing a​ 10% interest in the company. Anzelmo had no significant influence in Jones. Over​ time, Anzelmo acquired more shares in​ Jones, and in​ 2016, Anzelmo's president became a member of the board of directors when its ownership interest reached​ 30% of Jones. The cost basis of its investment is​ $2,000,000. Under the equity​ method, the valuation of the investment would be​ $2,400,000. The fair value of the investment is​ $2,600,000. What is the amount of the adjustment to the investment account necessary to properly record the change in accounting​ principal?

Golf Guide is seeking new customers through both direct mail and magazine ads. In a recent period, Golf Guide spent $25,277 on direct mail and spent $34,173 on golf magazine ads. The company gained 548 new customers through its direct mail and gained 805 new customers through its magazine ads. Calculate the overall cost per customer acquired for the combined program of direct mail and magazine ads. (Rounding: nearest penny.)

show step by step how you got the answer.