Portillo Inc. uses a calendar year for financial reporting. The company is authorized to issue 9,000,000 £10 par ordinary shares. At no time has Portillo issued any potentially dilutive securities. Listed below is a summary of Portillo’s ordinary share activities.
1. Number of ordinary shares issued and outstanding at December 31, 2014 2,400,000
2. Shares issued as a result of a 10% share dividend on September 30, 2015 240,000
3. Shares issued for cash on March 31, 2016 2,000,000
Number of ordinary shares issued and outstanding at December 31, 2016 4,640,000
4. A 2-for-1 share split of Portillo’s ordinary shares took place on March 31, 2017
Required:
a. Compute the weighted-average number of ordinary shares used in computing earnings per ordinary share for 2015
b. Compute the weighted-average number of ordinary shares used in computing earnings per ordinary share for 2016
c. Compute the weighted-average number of ordinary shares used in computing earnings per ordinary share for 2017

Need the calculations and working of each part.

Assume that at the beginning of 2015 Fast Delivery purchased a used Jumbo 747 aircraft at a cost of $55,200,000. Fast Delivery expects the plane to remain useful for five years ​(6,800,000 ​miles) and to have a residual value of $5,200,000. Fast Delivery expects to fly the plane 835,000 miles the first​ year, 1,225,000 miles each year during the​ second, third, and fourth​ years, and 2,290,000 miles the last year.

1. Compute Fast Delivery​'s depreciation for the first two years on the plane using the following​ methods:

a. ​Straight-line method

b. ​Units-of-production method​ (round depreciation per mile to the closest​ cent)

c. ​Double-declining-balance method

2. Show the​ airplane's book value at the end of the first year under each depreciation method.

Answers:

A. Using the straight-line method, depreciation is $_________ for 2015 and $__________ for 2016.

B. Using the units-of-production method, depreciation is $__________ for 2015 and $__________ for 2016

C. Using the doubling-decling-balance method, depreciation is $_________ for 2015 and $________ for 2016

2.  

(A) Corporation acquired 20,000 of the 100,000 outstanding common shares of (B) Company on January 1, 2016, for a cash consideration of $200,000. During 2016, (B) Company had net income of $120,000 and paid dividends of $80,000. At the end of 2016, shares of (B) Company were trading for $11 each. During 2017, (B) Company had a loss of $60,000 and paid dividends of $40,000. Income for the first half of the year was $80,000 and the loss in the second half of the year was $140,000. The dividends were paid on June 30. On July 2, 2017, (A) Corporation sold 5,000 shares of (B) Company for a consideration of $12 per share. At the end of 2017, the share price of (B) Company had fallen to $6 per share. The average of market analysts' forecasts was that the share price could be expected to rise to $8 per share over the next five years. (Assume that the future recoverable value of the shares is assessed to be $8 per share.)​

Provide journal entries for (A) Corporation for all transactions relating to its investment in (B) Company for the year 2017 if it accounts for its investment in (B) Company using the equity method. ​

During 2016 (its first year of operations) and 2017, Batali Foods used the FIFO inventory costing method for both financial reporting and tax purposes. At the beginning of 2018, Batali decided to change to the average method for both financial reporting and tax purposes.

Income components before income tax for 2018, 2017, and 2016 were as follows ($ in millions):

Dividends of $26 million were paid each year. Batali’s fiscal year ends December 31.

Required:
1. Prepare the journal entry at the beginning of 2018 to record the change in accounting principle. (Ignore income taxes.)
2. Prepare the 2018–2017 comparative income statements.
3. & 4. Determine the balance in retained earnings at January 2017 as Batali reported using FIFO method and determine the adjustment of balance in retained earnings as on January 2017 using average method instead of FIFO method.

Maxwell Company manufactures and sells a single product. Price and cost data regarding Maxwell’s product and operations for fiscal year 2016 are as follows (presented under absorption or full costing):

_____________________________________________________________________________

Revenue (120,000 units)                                                                      $3,000,000

Less: Cost of sales

          Direct materials                                                  $1,320,000

          Directed Labor                                                        600,000

          Variable manufacturing overhead                          300,000

          Fixed manufacturing overhead                               192,000        2,412,000

Gross margin                                                                                          $588,000

Less: Variable selling expenses                                       $156,000

          Fixed selling and administrative expenses              276,000          432,000                

Net income                                                                                              $156,000

_________________________________________________________________________  

a. Compute the number of units required to be produced and sold in order to earn direct costing profits of $260,000 in 2017; you may assume that in 2017, fixed costs, as well as per unit variable cost and (per unit) selling prices are the same as for fiscal year 2016.

b. Answer this question independently of part (a) above. Now suppose that Maxwell’s management believes that direct labor costs will increase by 8 percent in fiscal year 2017, but all other variable costs per unit, fixed costs, and selling prices will remain as in 2016. Compute the breakeven point in units for 2017 based on these assumptions.

Preparing the [I] consolidation entries for sale of depreciable assets—Equity method Assume that on January 1, 2016, a parent sells to its wholly owned subsidiary, for a sale price of $162,000, equipment that originally cost $184,000. The parent originally purchased the equipment on January 1, 2012, and depreciated the equipment assuming a 10-year useful life (straight-line with no salvage value). The subsidiary has adopted the parent’s depreciation policy and depreciates the equipment over the remaining useful life of 6 years. The parent uses the equity method to account for its Equity Investment. a. Compute the annual pre-consolidation depreciation expense for the subsidiary (postintercompany sale) and the parent (pre-intercompany sale). Subsidiary - depreciation $Answer Parent - depreciation $Answer b. Compute the pre-consolidation Gain on Sale recognized by the parent during 2016. $Answer c. Prepare the required [I] consolidation entry in 2016 (assume a full year of depreciation). Description Debit Credit [lgain] Equipment [ldep] d. Prepare the required [l] consolidation entry in 2019 (assuming the subsidiary is still holding the equipment). Description Debit Credit [lgain] Equipment [ldep]

7. Measuring standalone risk using realized (historical) data

Returns earned over a given time period are called realized returns. Historical data on realized returns is often used to estimate future results. Analysts across companies use realized stock returns to estimate the risk of a stock.

Consider the case of Happy Dog Soap Inc. (HDS):

Five years of realized returns for HDS are given in the following table. Remember:

Given the preceding data, the average realized return on HDS’s stock is _________ .

The preceding data series represents _________ of HDS’s historical returns. Based on this conclusion, the standard deviation of HDS’s historical returns is _________ .

If investors expect the average realized return from 2012 to 2016 on HDS’s stock to continue into the future, its coefficient of variation (CV) will be __________ .

1. Venture capitalist X invests in 20% (1,000,000 shares of common stock) of a company for $10 million dollars and in the next round of financing the company issues an additional 5 million shares of common stock to venture capitalist Z for $5 million dollars. The stake of Venture capitalist X in the company is reduced to 10%. This is an example of dilution. (True or False)

2. One way for individuals who are not accredited investors to gain exposure to venture capital investments is to invest in public companies that are actively involved in funding startups (True or False)

3.

Investors who bought the series D convertible preferred stock issued by Zoom in 2016 and then sold the shares in the IPO earned an annual rate of return of between 105% and 110%. (assume the purchase was on January 1^st, 2016 and the sale was on December 31^st, 2019). (True or False)

4. Preferred shares that are sold to venture capitalists give the venture capitalists preferred rights to residual economic value relative to the rights of common shares. (True or False)

Use the following information for questions 86–88.

At the beginning of 2015; Elephant, Inc. had a deferred tax asset of $4,000 and a deferred tax liability of $6,000. Pre-tax accounting income for 2015 was $300,000 and the enacted tax rate is 40%. The following items are included in Elephant’s pre-tax income:

86.     What is Elephant, Inc.’s taxable income for 2015?

a.   $300,000

b.   $252,000

c.   $348,000

d.   $452,000

87.     Which of the following is required to adjust Elephant, Inc.’s deferred tax asset to its correct balance at December 31, 2015?

a.   A debit of $20,800

b.   A credit of $15,200

c.   A debit of $15,200

d.   A debit of $16,800

the answer is D why ???

88.     The ending balance in Elephant, Inc’s deferred tax liability at December 31, 2015 is

a.   $9,200

b.   $15,200

c.   $10,400

d.   $31,200

the answer is B why ???

Goodwill

Composite Company is considering purchasing EKC Company. EKC's balance sheet at December 31, 2016, is as follows:

At December 31, 2016, Composite discovered the following about EKC:

No allowance for uncollectible accounts has been established. An allowance of $4,200 is considered appropriate.

The LIFO inventory method has been used. The FIFO inventory method would be used if EKC were purchased by Composite. The FIFO inventory valuation of the December 31, 2016, ending inventory would be $172,000.

The fair value of the property, plant, and equipment (net) is $760,000.

The company has an unrecorded patent that is worth $100,000.

The book values of the current liabilities and bonds payable are the same as their market values.

Required:

1. Compute the value of the goodwill if Composite pays $1,425,800 for EKC.

$

2. Why would the book value of a company's identifiable net assets differ from its market value?

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