SBS Corporation borrowed $70,000 from the bank on July 1, 2017. The note had a 6 percent annual rate of interest and matured on April 30, 2018. Interest and principal were paid in cash on the maturity date.

Required:

A.        What amount of interest expense was recognized on the 2017 income statement?

B.        What amount of cash did SBS pay for interest in 2017?

C.        What amount of total liabilities was reported on the December 31, 2017, balance sheet?

D.        What amount of interest expense was reported on the 2018 income statement?

E.         What total amount of cash was paid to the bank on April 30, 2018, for principal and interest?

3) Greece, Ireland, Portugal, and Spain all went through national budget difficulties in recent years, use the data below to answer questions regarding the sovereign debts of these nations (All data is in billions of current US dollars)

a. compute the debt-to-GDP ratio for all four nations for 2018

b. Compute the average yearly budget deficit for each of the nations over this period.

c. In your judgment, which of the four nations was in the worse fiscal shape in 2018? Use your computations from above to justify your answer.

On October 1, 2017, Vaughn, Inc., leased a machine from Fell Leasing Company for five years. The lease requires five annual payments of $10,000 beginning September 30, 2018. Vaughn’s incremental borrowing rate is 11%, and it uses a calendar year for reporting purposes. The machine has a 12-year economic life with zero salvage value. Vaughn correctly classifies the lease as an operating lease under ASU 2016-02. Use the appropriate factors (PV of 1, PVAD of 1, and PVOA of 1).

3) How much of the lease liability should be classified as current on December 31, 2017, and December 31, 2018?

P.S. I already got the value of the leased equipment, which is $36,959. The rent expense for 2017 is $2,500 and for 2018 is $10,000

Dollar-Value LIFO

Belstock Company manufactures one product. On December 31, 2015, Belstock adopted the dollar-value LIFO inventory method. The inventory on that date using the dollar-value LIFO inventory method was $200,000. Inventory data for succeeding years are as follows:

Required:

Compute the ending inventory using the dollar-value LIFO method for 2016, 2017, and 2018. Do not round your intermediate calculations. If required, round your answers to the nearest dollar.

On January 1, 2017, James Airlines contracted with Sam Aircraft to construct an airplane to Jamess specifications at a cost of $2,500,000. During 2017, James paid Sam $400,000 on January 1, and another $450,000 on September 30. On January 1, 2017, James had borrowed $360,000 at 11% to partially finance the construction. The remaining amount was paid to Sam upon delivery of the airplane on June 30, 2018.

James has approximately $1,600,000 of additional debt outstanding at December 31, 2017 at an average interest cost of 12%. And at the end of December 2018, $ 345,000 of the construction loan and $1,500,000 of the additional debt was outstanding.

What is the total capitalized cost of the airplane under construction at the end of 2017?

What is the total capitalized cost of the completed airplane at the end of 2018?

On April 1, 2016, the KB Toy Company purchased equipment to be used in its manufacturing process. The equipment cost $57,200, has an ten-year useful life, and has no residual value. The company uses the straight-line depreciation method for all manufacturing equipment.

On January 4, 2018, $14,750 was spent to repair the equipment and to add a feature that increased its operating efficiency. Of the total expenditure, $2,900 represented ordinary repairs and annual maintenance and $11,850 represented the cost of the new feature. In addition to increasing operating efficiency, the total useful life of the equipment was extended to 12 years.

Required:

1. Prepare journal entries for the depreciation for 2016 and 2017.
2. Prepare journal entries for the 2018 expenditure.
3. Prepare journal entries for the depreciation for 2018.

On April 1, 2016, the KB Toy Company purchased equipment to be used in its manufacturing process. The equipment cost $57,200, has an ten-year useful life, and has no residual value. The company uses the straight-line depreciation method for all manufacturing equipment. On January 4, 2018, $14,750 was spent to repair the equipment and to add a feature that increased its operating efficiency. Of the total expenditure, $2,900 represented ordinary repairs and annual maintenance and $11,850 represented the cost of the new feature. In addition to increasing operating efficiency, the total useful life of the equipment was extended to 12 years.

1. Prepare journal entries for the depreciation for 2016 and 2017.
2. Prepare journal entries for the 2018 expenditure.
3. Prepare journal entries for the depreciation for 2018.

Jonathan operates a business as a sole proprietor. His business is a lawn service and landscaping business. In July 2018, Jonathan purchased two new lawn mowers at a cost of $6,000 each. He also purchased a new warehouse to store all of the equipment in. The warehouse cost $200,000 and he purchased it in August 2018

In 2020, Jonathan had the following items of income and deduction:

$70,000 of income form lawn service

$20,000 in expenses related to his business

Sale of the warehouse for $210,000

Sale of one mower (purchased in 2018) for $4,000

Please calculate Jonathan's depreciation deductions for 2020 (if any), ignoring bonus depreciation and Section 179. Also, please calculate Jonathan's taxable income and any special issues relating to how the income will be taxed.

Hanson Manufacturing Company purchased a machine for $1,060,000 at the beginning of 2018. The machine has an estimated useful life of five years and an estimated residual value of $270,000. The machine, which is expected to last 20,000 hours, was operated 3,000 hours in 2018 and 2,000 hours in 2019.

REQUIRED:

1.      Compute the annual depreciation for 2018 and 2019 under the following depreciation methods. You must show all of your work to receive any credit.

         (a) Straight-line:

         (b) Units of production:

         (c) Double-declining balance:

No. 5 continued:

2.      Assume the machine is sold at the beginning of 2020 for $760,000. Prepare the journal entry to record the disposal of the machine under each of the three methods.

         (a) Straight-line:

         (b) Units of production:

         (c) Double-declining balance:

Toyota Camry, Honda Accord and Ford F-150 are the top 3 best-selling passenger cars in the U.S for the last 5 years. Data for 2018 is shown in the table below. Your interest is to to determine whether the shares in the passenger car market have changed in 2018. Use an alpha of 0.05 on your test. Market Share Observed in 2018 Toyota Camry 0.40 90 Honda Accord 0.35 70 Ford F-150 0.25 40 total 100% 200 What is the expected value for each category What is the value of the test statistic you calculated for this problem? What is the value of degrees of freedom? What is the critical value for the given alpha What is your decision after performing the test What is your conclusion after performing the test? Be specific and relate to the problem.