Use the following Adjusted Trial Balance and Statement of Retained Earnings to prepare the CLASSIFIED BALANCE SHEET for Hang in There Company for April 30, 2020

Hang in There Company

Statement of Retained Earnings

April 30, 2020

Retained Earnings, May 1, 2019                   $18,200

Net Income for the Year         10,200

Dividends0        

Retained Earnings, April 30, 2020                  $28,400

Blue Company in its first year of operations provides the following information related to one of its available-for-sale debt securities at December 31, 2020. Amortized cost $51,700 Fair value 43,400 Expected credit losses 12,900

What is the amount of the credit loss that Blue should report on this available-for-sale security at December 31, 2020?

Prepare the journal entry to record the credit loss, if any (and any other adjustment needed), at December 31, 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Assume the same information as for part (c). Prepare the journal entry to record the credit loss, if necessary (and any other adjustment needed), at December 31, 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Bridgeport Corporation ended its first fiscal year on December 31, 2020, reporting a pretax income for accounting purposes of $2,538,000. All of Bridgeport’ products were sold with a two-year warranty included. Bridgeport recorded $626,000 of warranty expense for accounting purposes in 2020, including $376,000 of actual warranty costs incurred during the year plus $250,000 in estimated warranty liability for the remainder of the warranty period. Estimated liabilities are not deductible for tax purposes. Bridgeport was subject to a 25% income tax rate and follows IFRS.

Calculate Bridgeport Ltd.’s taxable income and income tax payable for 2020.

Taxable Income $

Income Taxes Payable $

Prepare the journal entries to record the 2020 current and deferred income taxes. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit (To record current tax expense.) (To record deferred tax expense.)

McCombs Contractors received a contract to construct a mental health facility for $2,500,000. Construction was begun in 2020 and completed in 2021. Cost and other data are presented below:

2020 2021

Costs incurred during the year $1,500,000 $1,300,000

Estimated costs to complete 1,200,000 0

Billings during the year 1,200,000 1,300,000

Cash collections during the year 1,000,000 1,500,000

Part 1: Assume that McCombs recognizes revenue on this contract over time according to percentage of completion. Required: Compute the amount of gross profit recognized during 2020 and 2021.

Part 2: Assume that McCombs recognizes revenue on this contract over time according to percentage of completion. Required: Prepare all journal entries to record costs, billings, collections, and profit (loss) recognition. Round your answers to the nearest whole dollar.

Part 3: Assume that McCombs recognizes revenue upon project completion. Required: Compute the amount of gross profit recognized by McCombs during 2020 and 2021.

Cansela Corporation uses a periodic inventory system and the LIFO method to value its inventory. The company began 2018 with inventory of 5,600 units of its only product. The beginning inventory balance of $75,600 consisted of the following layers:
  

  
During the three years 2018–2020, the cost of inventory remained constant at $17 per unit. Unit purchases and sales during these years were as follows:
  

  
Required:
1. Calculate cost of goods sold for 2018, 2019, and 2020.
2. Disregarding income tax, determine the LIFO liquidation profit or loss, if any, for each of the three years.
3. Determine the effects of LIFO liquidation on cost of goods sold and net income for 2018, 2019, and 2020. Cansela’s effective income tax rate is 35%.

Exercise 21-10 (Part Level Submission)

The following facts pertain to a non-cancelable lease agreement between Sandhill Leasing Company and Teal Mountain Company, a lessee.

The collectibility of the lease payments by Sandhill is probable.

c.  Prepare a lease amortization schedule for Rode for the 5-year lease term.

d.  Prepare the journal entries on the lessee's books to reflect the signing of the lease agreement and to record the payments and expenses related to this lease for the years 2020 and 2021. Rode's annual accounting period ends on December 31. Reversing entries are used by Rode.

Computing and Assessing Plant Asset Impairment

Zeibart Company purchases equipment for $225,000 on July 1, 2016, with an estimated useful life of 10 years and expected salvage value of $25,000. Straight-line depreciation is used. On July 1, 2020, economic factors cause the fair value of the equipment to decline to $90,000. On this date, Zeibart examines the equipment for impairment and estimates $125,000 in future cash inflows related to use of this equipment.

a. Is the equipment impaired at July 1, 2020? Explain.

b. If the equipment is impaired on July 1, 2020, compute the impairment loss and prepare a journal entry to record the loss.

c. What amount of depreciation expense would Zeibart record for the 12 months from July 1, 2020 through June 30, 2021? Prepare a journal entry to record this depreciation expense.

(Hint: Assume no change in salvage value.)

d. Using the financial statement effects template, show how the entries in parts b and c affect Zeibart Company's balance sheet and income statement.

On 1 July, 2018 Bundoora Ltd acquires 25 percent of the issued capital of Preston Ltd for a cash consideration of $150,000. At the date of acquisition, the share capital and retained earnings of Preston Ltd are as follows: Share capital $120,000 and Retained earnings $480,000 (Total Shareholders’ equity $600,000). Additional information:  For the year ending 30 June 2019 Preston Ltd records an after-tax profit of $50,000 from which it pays a dividend of $30,000.  For the year ending 30 June, 2020 Preston Ltd records an after-tax loss of $30,000. On 30 June 2020, Preston Ltd declares dividends of $10,000.  Bundoora Ltd has a number of subsidiaries. Required: (i) Prepare the journal entries using both the cost and equity methods of accounting in context of parent entity for the investment in Preston Ltd for each of the years ended 30 June 2019 to 2020. (ii) Calculate the carrying amount of the investment in Preston Ltd at 30 June 2020.