1. Entity A is a Hong Kong-based limited company that participates in building material industry for many years. It sells high-quality raw materials to different local and foreign manufacturers. Entity B is one of its loyal customers for more than 30 years.

   On 1 January 2019, Entity A received advanced payment of $3,845,000 from Entity B through the Hong Kong City Bank for selling Material X. According to the contract terms, Entity A would only deliver Material X to Entity B on 31 December 2019. The regular cash-selling price of Material X was $3,845,000. The cost of sales of Material X was $2,856,000.

   On 1 January 2020, Entity A entered into another contract with Entity B. This contract stated that Entity A was required to transfer Material Y and Material Z to Entity B in exchange for $658,550. According to the contract terms, Entity A could invoice this full amount on 31 January 2020. Material Y was to be delivered on 28 February 2020 and Material Z was to be delivered on 31 March 2020. Both promises to transfer Material Y and Material Z were identified as separate performance obligations. The amount of $258,000 was allocated to Material Y and $400,550 to Material Z. The costs of sales of Material Y and Material Z were 75% and 80% of their selling prices respectively. Entity A received a crossed cheque from Entity B of Material Y and Material Z on 30 April 2020.

   The market interest rates for the year of 2019 and 2020 were 5.50% and 6.75% respectively. Entity A adopts perpetual inventory system for keeping its inventory accounting records. Entity A recognises revenue when control of each material transfers to Entity B.

   REQUIRED:

   Provide journal entries for Entity A from 1 January 2019 to 30 April 2020 in accordance with the relevant accounting standards.

   ACCOUNT NAMES FOR INPUT:

   | Plant | Machine | Motor van | Equipment | Land | Building | Inventory | Intangible assets |

   | Bank | Payable | Receivable | Other income | Other expense | Interest expense | Interest revenue |

   | Depreciation | Accum. depreciation | Impairment loss | Reversal of impairment loss | Goodwill |

   | Loss on disposal | Gain on disposal | Restoration liability | Revaluation surplus | Revaluation deficit |

   | Asset for product to be returned | Commission expense | Commission revenue | Revenue |

   | Cost of sales | Refund liability | Contract asset | Contract liability | Retained earnings | No entry |

   ANSWERS:

   Journal Entries:

   Date	Account Name	Debit ($)	Credit ($)	Hints For Sequence
   1-Jan-19	Blank 1	Blank 2
   	Blank 3		Blank 4
   31-Dec-19	Blank 5	Blank 6
   	Blank 7	Blank 8		Judge Dr/Cr side
   	Blank 9	Blank 10		Judge Dr/Cr side
   	Blank 11	Blank 12		Judge Dr/Cr side
   	Blank 13	Blank 14		Judge Dr/Cr side
   	Blank 15	Blank 16		Judge Dr/Cr side
   1-Jan-20	Blank 17	Blank 18
   	Blank 19		Blank 20
   31-Jan-20	Blank 21	Blank 22
   	Blank 23		Blank 24
   28-Feb-20	Blank 25	Blank 26
   	Blank 27	Blank 28		Judge Dr/Cr side
   	Blank 29	Blank 30		Judge Dr/Cr side
   	Blank 31	Blank 32		Judge Dr/Cr side
   31-Mar-20	Blank 33	Blank 34
   	Blank 35	Blank 36		Judge Dr/Cr side
   	Blank 37	Blank 38		Judge Dr/Cr side
   	Blank 39	Blank 40		Judge Dr/Cr side
   30-Apr-20	Blank 41	Blank 42
   	Blank 43		Blank 44

Tax Computation Problem

John and Mary Jane Diaz are married, filing jointly. Their address is 204 Shoe Lane, Blacksburg, VA 24061. John is age 35, and Mary Jane is age 30. They are expecting their first child in early 2021. John’s salary in 2020 was $105,000, from which $20,800 of Federal income tax and $4,700 of state income tax were withheld. Mary Jane made $52,000 and had $3,000 of Federal income tax and $3,100 of state income tax withheld. The appropriate amounts of FICA tax and Medicare tax were withheld for John and for Mary Jane. John’s Social Security number is 111-11-1111, and Mary Jane’s Social Security number is 123-45-6789.

Both John and Mary Jane are covered by their employer’s medical insurance policies with 80% of the premiums being paid by their employers. The total premiums were $10,000 for John and $6,200 for Mary Jane. Mary Jane received medical benefits of $7,300 under the plan. John was not ill during 2020. Mary Jane paid noncovered medical expenses of $1,300.

John makes child support payments of $15,000 for his son, Rod, who lives with Jill, John’s former spouse, except for two months in the summer when he visits John and Mary Jane. At the time of the divorce, John worked for a Fortune 500 company and received a salary of $225,000. As a result of corporate downsizing, he lost his job.

Mary Jane’s father lived with them until his death in November. His only sources of income were salary of $2,800, unemployment compensation benefits of $3,500, and Social Security benefits of $4,100. Of this amount, he deposited $6,000 in a savings account. The remainder of his support of $9,500, which included funeral expenses of $4,500, was provided by John and Mary Jane.

Other income received by the Diazes was as follows:

John has always wanted to operate his own business. In October 2020, he incurred expenses of $15,000 in investigating the establishment of a retail computer franchise. With the birth of their child expected next year, however, he decides to forgo self-employment for at least a couple of years.

John and Mary Jane made charitable contributions of $8,700 during the year and paid an additional $1,800 in state income taxes in 2020 upon filing their 2019 state income tax return. Their deductible home mortgage interest was $8,200, and their property taxes came to $4,800. They paid sales taxes of $2,000, for which they have receipts. They paid a ticket of $150 that Mary Jane received for running a red light (detected by a red light camera).

Part 1—Tax Computation

Calculate John and Mary Jane’s tax (or refund) due for 2020.

Part 2—Tax Planning

Assume that the Diazes come to you for advice in December 2020. John has learned that he will receive a $40,000 bonus. He wants to know if he should take it in December 2020 or in January 2021. Mary Jane will quit work on December 31 to stay home with the baby. Their itemized deductions will decrease by $3,100 because Mary Jane will not have state income taxes withheld. Mary Jane will not receive the employee award in 2021. She expects the medical benefits received to be $9,000. The Diazes expect all of their other income items to remain the same in 2021. Write a letter to John and Mary Jane that contains your advice, and prepare a memo for the tax files.

For the US export subsidy program: Assuming an export subsidy is paid on a per unit basis for products sold outside of the US, other things equal, we would expect that

a) expected price of product in US would: Increase, Decrease, It Depends

b) expected quantity produced in US would: Increase, Decrease, It Depends

c) expected price of product outside of US would: Increase, Decrease, It Depends

d) expected quantity sold outside of US would: Increase, Decrease, It Depends

On January 1, 2017, Eagle borrows $27,000 cash by signing a four-year, 9% installment note. The note requires four equal payments of $8,334, consisting of accrued interest and principal on December 31 of each year from 2017 through 2020. (Table B.1, Table B.2, Table B.3, and Table B.4) (Use appropriate factor(s) from the tables provided. Round your intermediate calculations and final answers to the nearest dollar amount. Round all table values to 4 decimal places, and use the rounded table values in calculations.) Prepare the journal entries for Eagle to record the loan on January 1, 2017, and the four payments from December 31, 2017, through December 31, 2020.

Eagle borrows $27,000 cash by signing a four-year, 9% installment note. Record the issuance of the note on January 1, 2017.

Record the payment of the first installment payment of interest and principal on December 31, 2017.

Record the payment of the second installment payment of interest and principal on December 31, 2018.

Record the payment of the third installment payment of interest and principal on December 31, 2019

Record the payment of the fourth installment payment of interest and principal on December 31, 2020.

GeneralProducts Inc. is incorporated in Nevada, USA on Jan 1st 2013 to take over a local retail chain. The objective of the company is to supply goods of everyday use to customers at the most competitive prices. GeneralProducts has established a chain of stores throughout USA. The retail operations of the company are so designed that customers can shop seamlessly in stores and online.

You may use the attached Balance Sheet of GeneralProducts as of Dec 31, 2015 (Links to an external site.) and the financial data for 2016.The same information is provided below.

GeneralProducts provides us financial and business related data for 2016 below.

1. Trades Marks were acquired for $200,000 in 2015.Estimated useful at the time of acquisition was 20 years
   There was a litigation brought out by a competitor against the Trade Mark. GeneralProducts could successfully defend this litigation at a cost of $ 45,000. New useful life of Trade Mark is estimated to be 25 years from the date of acquisition.
2. All sales are on credit and total $ 940,560. COGS are $780,650.
3. Included in the total sales of $940,560 are the sales of GeneralProducts brand 6000 soap powder boxes GeneralProducts includes one coupon in every soap powder box. Customers can redeem 4 coupons for one Kitchen utensil. Based on past experience 60% of the coupons are redeemed by customers. During 2016 3,400 coupons were redeemed. Purchase of premiums during 2016 total 1,000 premiums @ $1.10 each on credit.
4. 6% Bonds Payable are issued on Jan 1 2015 to yield 8% interest. Interest is paid semi-annualy on Jan 1st and June 30th.
   General Products can redeem these Bonds any time after June 30,2016 @ 101.
5. To take advantage of lower interest rates and to finance the redemption of 6% Bonds on Sept.1st 2016, GeneralProducts issued 5%Bonds in the face value of $100,000 to yield 6% The maturity period of these 5% Bonds is 10 years and interest is paid semi-annually on 1st Jan and 30th June. The proceeds from the issue of 5% Bonds are used to redeem 6% Bonds Payable @ 101 on Sept.1st 2016.
6. Selling Administrative Expenses excluding depreciation are $87,345. PP&E is depreciated on Striaght Line Method over 25 years of life.
7. Cash collected from customers total $906,450
8. Cash paid to suppliers for credit purchases total $728,254
9. Purcahses of inventory total $689,525.All purchases are on credit.
10. GeneralProducts purchased Land for $30,000 for construction of building

Requirements

1. Record the necessary journal entries for 2016
2. Prepare Income Statement and Retained Earnings Statement for the year 2016
3. Prepare Balance Sheet on December 31,2016
4. Show full work of all the financial items reported in Income Statement and Balance Sheet. Please round your calculations closest to $. Ignore tax.

Joanne asks you whether the outgoings listed below are allowable deductions. Joanne recently completed her medical degree and took up employment in Newcastle Base hospital. The following outgoings were incurred by her during the 2018-2019 income year:

1.   Travelling to Newcastle for the job interview $300;
2.   Moving from her home in Canberra to relocate to Newcastle $3,000;
3.   Purchase of compulsory doctors’ whites uniform to wear at work $600;
4.   Child care expenses for her two-year-old daughter $15,000;
5.   Travelling from Newcastle hospital to Newcastle CBD for a second job as a waitress in a restaurant $4,000;
6.   Purchase of meals at the hospital before travelling to the Newcastle CBD to commence the second job $600; and
7.   Speeding fine incurred on her way from Newcastle hospital to the Newcastle CBD to commence the second job $500.

Advise Joanne on whether or not the outgoings are tax deductible. Your answer must be supported by legislation, case law and tax rulings (if any).

On August 27, 2015, Celgene Corporation acquired all of the outstanding stock of Receptos, Inc., in exchange for $7.6 billion in cash. Referring to Celgene’s 2015 financial statements and its July 14, 2015, press release announcing the acquisition, answer the following questions regarding the Receptos acquisition.

Why did Celgene acquire Receptos?

What accounting method was used, and for what amount, to record the acquisition?

What amount did Celgene include in pre-combination service compensation in the total consideration transferred? What support is provided for this treatment in the Accounting Standards Codification (see ASC 805-30-30, paragraphs 9-13)?

What allocations did Celgene make to the assets acquired and liabilities assumed in the acquisition? Provide a calculation showing how Celgene determined the amount allocated to goodwill.

Describe the nature of the in-process research and development product rights acquired by Celgene in its acquisition of Receptos.

How will Celgene account for the in-process research and development product rights acquired in the Receptos combination?

Suppose you were the financial Accountant for Max Company Pty. Ltd. The board of directors promoted you to position of Finance manager considering the satisfactory services that you rendered to the company. The CEO has asked you to analyze two proposed capital investments, Projects Naru and Oheema. The cost of capital for each project is 12%.

The projects’ initial cost and expected net cash flows are as follows. The two projects are mutually exclusive projects.

1. If you apply the pay criterion, which project will you choose? Why?
2. If you apply the NPV criterion, which project will you choose? Why?
3. If you apply the RR criterion, which project will you choose? Why?

Please give the answers with explanations

Christine, a newly appointed chief financial officer (CFO) at Winter Pty Ltd, is asked to evaluate and report on the company's present financial condition to the board of directors at an upcoming meeting. She discovers several instances where Paul, the chief executive officer (CEO), has made excessive risky business decisions, going against company policy resulting in the current liquidity problem facing the company.

Paul, Christine’s superior, is fearful of the board’s reactions to the adverse financial report, so he instructs Christine to modify the report to conceal the liquidity problem. Paul told Christine that the liquidity situation will ‘turn around in the near future’ and there is ‘no need to waste the board's time on the matter’. He makes it clear to Christine that if she refuses his request she will no longer have his support.

Describe Christine’s possible response using each of the six stages of Kohlberg’s stages of moral reasoning and development