Required     

(a) Calculate the depreciation expense using the straight-line method for 2019 and 2020.
(b) Calculate the depreciation expense using the diminishing-balance method and a depreciation rate of 25% for 2019 and 2020.
(c) Calculate the depreciation expense using the units-of-production method for 2019, assuming the machine usage was 1,820 hours
(d) On 31 December 2020 the company discarded a delivery truck that was purchased on 1 January 2016 for $23,980 cash (including
GST of 10%) and was depreciated on a straight line basis with a useful life of 6 years and a residual value of $2180 (excluding GST).
What was the profit or loss on the scrapping of the truck?

Consider a simple economy that produces two goods: pencils and muffins. The following table shows the prices and quantities of the goods over a three-year period.

From 2019 to 2020, nominal GDP   , and real GDP   .

The inflation rate in 2020 was   .

Why is real GDP a more accurate measure of an economy's production than nominal GDP?

Real GDP is not influenced by price changes, but nominal GDP is.

Real GDP does not include the value of intermediate goods and services, but nominal GDP does.

Real GDP measures the value of the goods and services an economy produces, but nominal GDP measures the value of the goods and services an economy consumes.

Presented below is information related to Ivan Calderon Corp. for the year 2020. Net sales $1,300,000 Write-off of inventory due to obsolescence $80,000 Cost of goods sold 780,000 Depreciation expense omitted by accident in 2019 55,000 Selling expenses 65,000 Casualty loss 50,000 Administrative expenses 48,000 Cash dividends declared 45,000 Dividend revenue 20,000 Retained earnings at December 31, 2019 980,000 Interest revenue 7,000 Effective tax rate of 20% on all items Partially correct answer. Your answer is partially correct. Try again. Prepare a multiple-step income statement for 2020. Assume that 60,000 shares of common stock are outstanding for the entire year. (Round earnings per share to 2 decimal places, e.g. 1.49.) Prepare a separate retained earnings statement for 2020. (List items that increase adjusted retained earnings first.)

Recording Entries for Long-Term Note Receivable; Effective-Interest Method

On January 1, 2020, Jacobs Company sells land financed through a $40,000 note, issued by Andress Company. The note is a $40,000, 8%, annual interest-bearing note. Andress agrees to repay the $40,000 proceeds on December 31, 2021. The prevailing interest rate on similar notes is 11%. Assume that the cost of the land is equal to the fair value of the note.

Required

Prepare all entries for Jacobs over the note term, including any year-end adjustments. Use the effective interest method to amortize the discount.

r the note term, including any year-end adjustments. Use the effective interest method to amortize the discount

irkland Company combines its operating expenses for budget purposes in a selling and administrative expense budget. For the first 6 months of 2020, the following data are available.

Prepare a selling and administrative expense budget by quarters for the first 6 months of 2020. (List variable expenses before fixed expense.)

Presented below is information related to Donaldson Corp., for the year 2020. Prepare an income statement and answer the question below and other questions requiring the use of this income statement. Net sales $1,820,000 Cost of goods sold 1,240,000 Selling expenses 86,000 Administrative expenses 74,000 Dividend revenue 25,000 Interest revenue 20,000 Interest expense 50,000 Write-off of goodwill due to impairment 40,000 Depreciation expense omitted in 2018 105,000 Dividends declared 12,000 Effect on prior year’s of change in accounting principle (credit) 230,000 Loss from operations of discontinued component of business, net of tax 190,000 Gain from disposal of component of business, net of tax 260,000 Federal tax rate of 20% on all items Assume the 200,000 shares of common stock were outstanding during 2020. In the multiple-step income statement for 2020, how much was net income?

Use the following information to answer MCQ21 to MCQ23

On January 1st, 2018, Crane Construction Corporation signed a contract to construct a building with a contract price of $18,000,000. The company expects to get this contract completed by 2020. Crane uses the percentage of completion method Information relating to the costs, billings, and collections for this contract is as follows:

                                                                             2018                   2019                  2020   

Total costs incurred to date                            $4,500,000            $7,920,000          $13,800,000

Estimated costs to complete                            7,500,000              5,280,000                     -0-

Customer billings to date                                  6,600,000            12,000,000            16,800,000

Collections to date                                            6,000,000            10,500,000            16,500,000

What is the percentage of completion for the year 2019?

Select one:

a. 0.26

b. 0.375

c. 0.66

d. 0.60

What is the gross profit that Crane Cor to recognize in 2020?

Select one:

a. $4,200,000

b. $2,250,000

c. $6,000,000

d. $1,320,000

How much the cost incurred in the year 2019 only:

Select one:

a. $7,920,000

b. $13,200,000

c. $3,420,000

d. $5,280,000

Whispering Winds Corporation manufactures a line of amplifiers that carry a three-year warranty against defects. Based on experience, the estimated warranty costs related to dollar sales are as follows: first year after sale—1% of sales; second year after sale—2% of sales; and third year after sale—3% of sales. Sales and actual warranty expenditures for the first three years of business were:

(a)

Calculate the amount that Whispering Winds Ltd. should report as warranty expense on its 2020 income statement and as a warranty liability on its December 31, 2020 SFP using the assurance-type warranty (expense-based approach). Assume that all sales are made evenly throughout each year and that warranty expenditures are also evenly spaced according to the rates above.

Chiefs Construction Company has contracted to build an office building. The construction is scheduled to begin on January 1, 2020, and the estimated time of completion is July 1, 2023. The building cost is estimated to be $20,000,000 and will be billed at $24,000,000. The following data relate to the construction period:

1) Compute the estimated gross profit for 2020, 2021, 2022, and 2023 assuming that the percentage-of-completion method is used.

2) Prepare the necessary journal entries for Chiefs Company for the years 2022 and 2023 under percentage-of-completion method.

3) Prepare the necessary journal entries for Chiefs Company for the years 2022 and 2023 under completed contract method.

Abby runs a printing business and leases a building for which she pays rent of $75,000 per annum. During the year ended 30 June 2020, Abby incurred the following expenses: Painting of the exterior of the building at a cost of $12,000. The original paintwork was peeling and mouldy and didn’t represent the kind of look Abby wanted for her business. Re-surfacing of the dirt carpark with a new non-slip cement to fill in pot-holes and create a safer environment for her customers $8,000 Replace torn awning over the front door for $1,500. The replacement awning was made of the same material as the original awning. Payment of $22,000 for a commercial embroidery machine so that Abby could introduce clothing design and printing into her business. The machine was purchased on 10 February 2020 and installed on 26 February 2020.

Advise Abby if the expenses would be deductible with reference to relevant statute or other supporting documents.