On January 1, 2018, the Highlands Company began construction on a new manufacturing facility for its own use. The building was completed in 2019. The company borrowed $2,100,000 at 8% on January 1 to help finance the construction. In addition to the construction loan, Highlands had the following debt outstanding throughout 2018:

Construction expenditures incurred during 2018 were as follows:

Required:
Calculate the amount of interest capitalized for 2018 using the specific interest method. (Do not round the intermediate calculations. Round your percentage answers to 1 decimal place (i.e. 0.123 should be entered as 12.3%).)
  

Prepare the answer to the following question by either entering text directly or uploading an Excel or Word file. Do NOT upload a .pdf or .jpg file or you will receive zero credit. Show computations. The prepaid insurance account has an unadjusted balance of $46,000 at December 31, 2018, the end of Hanson Company's accounting year. Insurance expense has an unadjusted $2,000 balance at the same point in time. Some policies that were in effect have expired. Some of those were renewed and some were not. The following policies are in effect at December 31, 2018: Policy Date Policy Total Premium Type Acquired Term Paid when acquired Liability 1-31-17 2 years $48,000 Auto 6-30-18 2 years 9,000 Business interruption 8-1-18 1 year 840 Determine the adjusted balance in prepaid insurance at December 31, 2018. 2.Determine the amount of total insurance expense (you need not separate the expense by policy type) to report on the income statement for the year ended December 31, 2018.

Prepare the answer to the following question by either entering text directly or uploading an Excel or Word file. Do NOT upload a .pdf or .jpg file or you will receive zero credit. Show computations.

The prepaid insurance account has an unadjusted balance of $46,000 at December 31, 2018, the end of Hanson Company's accounting year. Insurance expense has an unadjusted $2,000 balance at the same point in time. Some policies that were in effect have expired. Some of those were renewed and some were not. The following policies are in effect at December 31, 2018:

Policy                                                                 Date                 Policy            Total Premium

  Type                                                               Acquired             Term         Paid when acquired

Liability                                                              1-31-17          2 years         $48,000

Auto                                                                   6-30-18             2 years             9,000

Business interruption 8-1-18              1 year                 840

1. Determine the adjusted balance in prepaid insurance at December 31, 2018.

2.Determine the amount of total insurance expense (you need not separate the expense by policy type) to report on the income statement for the year ended December 31, 2018.

On January 1, 2018, Allied Industries leased a high-performance conveyer to Karrier Company for a four-year period ending December 31, 2021, at which time possession of the leased asset will revert back to Allied. The equipment cost Allied $923,000 and has an expected useful life of five years. Allied expects the residual value at December 31, 2021, will be $307,000. Negotiations led to the lessee guaranteeing a $354,000 residual value.

Equal payments under the finance/sales-type lease are $207,000 and are due on December 31 of each year with the first payment being made on December 31, 2018. Karrier is aware that Allied used a 5% interest rate when calculating lease payments. (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. Prepare the appropriate entries for both Karrier and Allied on January 1, 2018, to record the lease.
2. Prepare all appropriate entries for both Karrier and Allied on December 31, 2018, related to the lease

5-On August 5, 2018, Famous Furniture shipped 40 dining sets on consignment to Furniture Outlet, Inc. The cost of each dining set was $360 each. The cost of shipping the dining sets amounted to $3,600 and was paid for by Famous Furniture. On December 30, 2018, the consignee reported the sale of 30 dining sets at $850 each. The consignee remitted payment for the amount due after deducting a 6% commission, advertising expense of $600, and installation and setup costs of $780. The amount cash received by Famous furniture is

6-On August 5, 2018, Famous Furniture shipped 40 dining sets on consignment to Furniture Outlet, Inc. The cost of each dining set was $360 each. The cost of shipping the dining sets amounted to $1,800 and was paid for by Famous Furniture. On December 30, 2018, the consignee reported the sale of 30 dining sets at $850 each. The consignee remitted payment for the amount due after deducting a 6% commission, advertising expense of $600, and installation and setup costs of $780. The total profit on units sold for the consignor is

Q1. X and Y established a partnership on January 1, 2018. X invested cash of $60,000 and B invested $70,000 in cash and equipment with a book value of $30,000 and fair value of $50,000. For both partners, the beginning capital balance was to equal the initial investment. X and Y agreed to the following procedure for sharing profits and losses:

- 9% interest on the yearly beginning capital balance

- $10 per hour of work that can be billed to the partnership's clients

- the remainder divided in a 2:3 ratio

The Articles of Partnership specified that each partner should withdraw no more than $1,000 per month.

For 2018, the partnership's income was $40,000. X had 400 billable hours, and Y worked 700 billable hours.

In 2019, the partnership's income was $30,000, and X and Y worked 800 and 1,200 billable hours respectively. Each partner withdrew $1,000 per month throughout 2018 and 2019. (round off decimal places)

1. Determine the amount of net income allocated to each partner for 2018.

2. Determine the amount of net income allocated to each partner for 2019.

Myka, Inc. acquired 15% of Pete Corporation on January 1, 2017, for $125,000 when the book value of Pete’s net assets was $950,000. During 2017, Pete reported net income of $530,000 and paid dividends of $40,000. On January 1, 2018, Myka purchased an additional 15% of Pete for $550,000. Any excess of cost over book value was attributable to goodwill (No amortization). On that same date, Myka changed to the equity method. During 2018, Pete reported net income of $730,000 and paid dividends of $90,000.

Required: What type and amount of income(s) did Myka record from Pete in 2017? Please show calculations so that partial credit can be granted. What type and amount of income(s) did Myka record from Pete in 2018? Please show calculations so that partial credit can be granted. What journal entry was made to convert to the equity method? What was the balance in the Equity Investment in Pete account at December 31, 2018? Please show calculations so that partial credit can be granted.

Alquist Company uses the retail method to estimate its ending inventory. Selected information about its year 2018 operations is as follows: January 1, 2018, beginning inventory had a cost of $240,000 and a retail value of $290,000. Purchases during 2018 cost $2,076,000 with an original retail value of $3,360,000. Freight costs were $24,000 for incoming merchandise. Net additional markups were $250,000 and net markdowns were $610,000. Based on prior experience, shrinkage due to shoplifting was estimated to be $29,000 of retail value. Merchandise is sold to employees at a 25% of selling price discount. Employee sales are recorded in a separate account at the net selling price. The balance in this account at the end of 2018 is $390,000. Sales to customers totaled $2,400,000 for the year. Required: 1. Estimate ending inventory and cost of goods sold using the conventional retail method. 2. Estimate ending inventory and cost of goods sold using the LIFO retail method. (Assume stable prices.) (For all requirements, Round your intermediate calculations and final answers to whole dollars.)

The Omega Corporation manufactures two types of vacuum cleaners: the ZENITH for commercial building use and the House-Helper for residences. Budgeted and actual operating data for the year 2018 are as follows:

Static Budget                    ZENITH         House-Helper                       Total

Number sold                         15,000                    60,000                    75,000

Contribution margin       $3,750,000            $12,000,000            $15,750,000

Actual Results                  ZENITH         House-Helper                       Total

Number sold                         16,500                    38,500                    55,000

Contribution margin       $6,200,000            $10,200,000            $16,400,000

Assume that Omega Corporation operates in Midwest market. The total Midwest market is expected to be 500,000 units in sales volume for 2018. The actual total Midwest market for 2018 was 440,000 units in sales volume.

Required: Label all variances as either favorable (F) or unfavorable (UF)

1. Calculate the total contribution margin for the flexible budget.
2. Determine the total static-budget variance, the total flexible-budget variance, and the total sales-volume variance in terms of the contribution margin.
3. Calculate the market-share and market size variances in contribution margin terms for the Omega Corporation for 2018.

On January 1, 2012, P Corp acquired 80% of the outstanding common stock of S Corp for $820,000. On January 1, 2018, P Corp sold $120,000 of land to S Corp for cash. The cost of the land was $50,000 at the date of the transfer. Also on January 1, 2018, P Corp transferred equipment to S Corp for $20,000 cash. The equipment originally cost $26,000 and has a book value of $15,000 (three-year remaining useful life).

During 2019, S Corp sold the land to a third-party for $150,000. The equipment continued to be used by S Corp.

Instructions:

1. Prepare the 2018 journal entries only relating to land and equipment transactions (P Corp and S Corp).

2. Prepare the 2018 consolidation worksheet entries only relating to the land and equipment transactions.

3. Prepare the 2019 journal entries only relating to land sale and equipment transactions (P Corp and S Corp).

4. Prepare the 2019 consolidation worksheet entries only relating to the land and equipment transactions.