McKenzie purchased qualifying equipment for his business that cost $457,900 in 2019. The taxable income of the business for the year is $111,500 before consideration of any § 179 deductions.
If an amount is zero, enter "0".
a. Calculate McKenzie’s § 179 expense deduction
for 2019 and any carryover to 2020.
§ 179 expense deduction for 2019: $ _________
§ 179 carryover to 2020: $ _________
b. How would your answer change if McKenzie
decided to use additional first-year (bonus) depreciation on the
equipment instead of using § 179 expensing? Hint:
See Concept Summary 8.5.
§ 179 expense deduction for 2019: $ _________
§ 179 carryover to 2020: __________
In: Accounting
P21.3 Leader Enterprises Ltd. follows IFRS and has provided the following information:
In 2019, Leader was sued in a patent infringement suit, and in 2020, Leader lost the court case. Leader must now pay a competitor $50,000 to settle the suit. No previous entries had been recorded in the books relative to this case because Leader's management felt the company would win.
A review of the company's provision for uncollectible accounts during 2020 resulted in a determination that 1.5% of sales is the appropriate amount of bad debt expense to be charged to operations, rather than the 2% used for the preceding two years. Bad debt expense recognized in 2019 and 2018 was $33,200 and $14,300, respectively. The company would have recorded $19,800 of bad debt expense under the old rate for 2020. No entry has yet been made in 2020 for bad debt expense.
Leader acquired land on January 1, 2017, at a cost of $70,000. The land was charged to the Equipment account in error and has been depreciated since then on the basis of a five-year life with no residual value, using the straight-line method. Leader has already recorded the related 2020 depreciation expense using the straight-line method.
During 2020, the company changed from the double-declining-balance method of depreciation for its building to the straight-line method because of a change in the pattern of benefits received. The building cost $1.4 million to build in early 2018, and no residual value is expected after its 40-year life. Total depreciation under both methods for the past three years is as follows. Double-declining-balance depreciation has been recorded for 2020.
| Straight-Line | Double-Declining-Balance | |||
| 2018 | $35,000 | $70,000 | ||
| 2019 | 35,000 | 66,500 | ||
| 2020 | 35,000 | 63,175 |
Late in 2020, Leader determined that a piece of specialized equipment purchased in January 2017 at a cost of $75,000 with an estimated useful life of five years and residual value of $5,000 is now expected to continue in use until the end of 2024 and have a residual value of $3,000 at that time. The company has been using straight-line depreciation for this equipment, and depreciation for 2020 has already been recognized based on the original estimates.
The company has determined that a $350,000 note payable that it issued in 2018 has been incorrectly classified on its statement of financial position. The note is payable in annual instalments of $50,000, but the full amount of the note has been shown as a long-term liability with no portion shown in current liabilities. Interest expense relating to the note has been properly recorded.
a. For each of the accounting changes, errors, or transactions, present the journal entry(ies) that Leader needs to make to correct or adjust the accounts, assuming the accounts for 2020 have not yet been closed. If no entry is required, write “none” and briefly explain why. Ignore income tax considerations.
b. Prepare the entries required in part (a) but, where retrospective adjustments are made, adjust the entry to include taxes at 25%.
c. For each of the accounting changes, identify the type of change involved and whether retrospective or prospective treatment is required.
In: Accounting
The records for Botox Company show this data for 2010 and 2011:
- For 2010, Botox recorded a probable and estimable contingent liability due to a lawsuit. The range for the loss is $700,000 to $1,000,000. In 2011, the lawsuit is settled and Botox pays the actual loss of $850,000.
- Gross profit on a two-year construction contract begun in 2010 was recorded at $350,000 for 2010 and $600,000 for 2011. Cash received was $50,000 in 2010 and $500,000 in 2011.
- An officer of Botox Company passed away during 2011. Life insurance proceeds from a key officer life insurance policy was $200,000.
- Botox earns $600 per month on a municipal bond investment throughout 2010 and 2011.
- Machinery was acquired in January 2010 for $300,000. Straight-line depreciation over a five-year life (no salvage value) is used. For tax purposes, Tuesday may deduct 30% of the cost in 2010 and 25% of the cost in 2011, with the remainder of the cost being depreciated at 15% per year for the three years 2012-2014.
- Pretax financial income is $1,350,000 in 2010 and $1,500,000 in 2011. The tax rate is 25% for all years.
- Botox Company has no beginning balances of deferred tax assets or liabilities.
(a) Prepare a schedule for 2010 and 2011 starting with pretax financial income and compute taxable income.
(b) Prepare the journal entry to record income taxes for 2011.
In: Accounting
Lifestyle Reset is a monthly subscription box filled with personalized health and fitness tips, assorted workout schedules, and a variety of supplies for people to regain control of their health. By logging onto the Lifestyle Reset website, consumers can select whether they are looking to lose, gain, or maintain their current body weight, strive to tone or build muscle and select the types of products they wish to receive in their box each month. Before releasing Lifestyle Reset into the market, it is important to determine the value and need the product will meet for customers, as well as utilize the eight-step Stage-Gate innovation process to create the Lifestyle Reset implementation plan.
Since people have an extremely difficult time making drastic lifestyle changes, Lifestyle Reset would prove valuable to the consumer through its healthy tips, realistic workout plans, and delicious meal ideas that can help lead the consumer towards healthier habits one box at a time. In a time where two out of three adults are obese, America is in need of Lifestyle Reset to help restore the health and wellness of the population.
Describe the innovation and its value to the organization/entity to which you are pitching your idea. (Minimum 200 words)
In: Economics
Read The Question & Answer. Do You Agree With The Answer? Why Or Why Not. Explain.
Question: Do you think that the demand for air cargo will increase or decrease over next three years? Why
Answer: Air transport has traditionally been deemed expensive compared to sea transport. However, in recent years, there has been a consistent increase in air cargo demand. This upward trend has been caused by the rise of e-commerce platforms, such as Amazon, Alibaba, and Jumia (Report Linker, 2020). Amazon has begun dominating the supply chain through programs such as Amazon Flex and Amazon Air to rival the dominant FedEx. Notably, increased globalization has also liberalized most economies, making demand shift to cheaper goods with minimal compromise on quality. As a result, the Asian markets have become economic hubs as they provide cheap labor, bringing down the production costs as well as the overall costs of the products. In addition to costs, the consumers are also becoming increasingly attached to convenience and fast deliveries, making air transport rise in demand. Based on the costs, competition, and consumer convenience, air cargo demand is set to rise over the next five years. According to the International Air Transport Association (2020), the demand as measured using cargo tonne-kilometers (CTKs) has been consistently rising since 2010, rising from an average of 13 billion CTKs to about 22 billion CTKs towards the end of 2019. This was interrupted by the COVID-19 pandemic, but the demand has not fallen to as far as 2010. This is a positive indicator that despite the disruption, air cargo demand is gaining traction. According to Report Linker (2020), the US's cargo volumes grew by 4.1% in 2018 to 63.7 million metric tons. This increased to about 65.9 million metric tons in 2019, with forecasts predicting further growth. Therefore, based on these statistics and the pandemic notwithstanding, air cargo demand will continue to rise in the next three years due to preference of speed, flexibility, relatively cheaper costs due to competition, and the influx of e-commerce.
In: Economics
Question 1: Consider a biallelic locus in an annual plant population. You observe the allele frequencies of allele A and allele T are equal to 0.4 and 0.6 in 2010, respectively.
A) Calculate the heterozygosity (H) of this locus in 2010, assuming the population mating is at random.
B) What is the expected frequency of allele A in 2020?
C) If the effective population size of this population is equal to 1,000, what is the expected heterozygosity of this locus in 2020?
D) If the effective population size is equal to 10 instead, what is the expected heterozygosity in 2020?
E) Based on your calculation, explain why genetic diversity is typically very low in endangered species.
Question 2: The observed heterozygosity (H) of a microsatellite is equal to 0.2% in a diploid population, and the mutation rate (per generation) at this microsatellite locus is equal to 2 x 10-8.
A) Estimate the effective population size of this population.
B) The census population size of this population is 106. Name two distinct processes that can contribute to the mismatch between the census population size and the effective population size.
Question 3: Suppose there are two annual plant species (A and B). Species A lives in a stable environment and has a constant census population size of 1,000. Species B lives in an unstable environment alternating between dry and wet years. Species B’s census population size is 200 in dry years and 1,800 in wet years. The frequencies of the dry and wet years are equal.
A) What is the effective population size of species A?
B) What is the effective population size of species B?
C) Assume the two species are similar in genome size and mutation rate, which species do you expect to have a higher level of heterozygosity? Why?
Question 4: Suppose a population has an effective population size of 50. In one generation, the average heterozygosity (averaged across loci) is reduced from 0.5 to 0.42. Is the population mating at random? Why?
Question 5: What is the effective population size in a population in which each breeding male controls a harem of 10 females, and the total population consists of 400 males and 400 females?
In: Biology
A company offers a bond with exactly 100 years to maturity (now 2000 to 2100) and its face value $2,000 that makes coupon payments at the end of each year.
Issue date: 2000; Maturity date: 2100
Coupon rate: 8%
2000 price: $2,000
2005 price: $1500
2010 price: $2,020.5
Q1: What is the interest rate in 2005 in market?
Q2: Sam bought this bond in 2005(yr) right after it made its coupon payment (he did not collect the coupon). Bob bought another bond at the same time with the same coupon rate, issue date and face value but a maturity date of 2015. Bob did not collect the coupon in 2005 either. It is 2010 now, if they were to sell their bonds today who would make more money?
In: Finance
Evan, a single individual, operates a service business that earned $110,000 in 2020. The business has no tangible property and paid no W-2 wages.
Required:
In: Accounting
GreenSpruce Inc. reported income from continuing operations before tax of $2,774,500 during 2020. Additional transactions occurring in 2020but not included in the $2,774,500 are as follows:1.
The corporation experienced an insured flood loss of $124,000 during the year.
2.The sale of FV-NI investments resulted in a loss of $165,850.
3.When its president died, the corporation gained $155,000 from an insurance policy. The cash surrender value of this policy had been carried on the books as an investment in the amount of $71,300 (the gain is non-taxable).
4.The corporation disposed of its recreational division at aloss of $178,250 before tax. Assume that this transaction meets the criteria for accounting treatment as discontinued operations.Instructions:
(a)Prepare an income statement for the year 2020, starting with income from continuing operations before income tax. Calculate earnings per share as required under IFRS. There were 60,000 common shares outstanding during the year. (Assume a tax rate of 20% on all items unlessthey are noted as being non-taxable.)
(b)Assume that beginning retained earnings for 2020is $3,967,000 and that dividends of $271,250 were declared during the year. Prepare the retained earnings portion of the statement of changes in equity for 2020
In: Accounting
For Questions 1 through 6, please use the following information:
Princess Tools Inc (2009) [2010]
Sales (5800) [6500] Cogs (3670) [4038] Current liabilities (703) [1055] Depreciation (125) [122] Cash (270) [300] Accounts Receivable (1045) [1234] Net fixed Assets (3008) [3342] Inventory (1474) [1533] Interest (290) [200] Taxes (600) [680] Common stock (2400) [2600] Long term debt (2500) [1200] Dividends (100) [100]
1. What is the Cash Flow to Creditors for 2010?
2. What is the Cash Flow to Stock Holders for 2010?
3. What is the Cash flow From Assets for 2010?
4. What is the Operating Cash Flow for 2010?
5. What is the Net Capital Spending for 2010?
6. What is the Change in Net Working Capital for 2010?
In: Accounting