The following information pertains to the payrolls of Warrs Company for November 2018:

Employees       Wage earned               Wage earned               Federal Income           State/local

                        By 10/31/2018 in November 2018     Tax                              Income Taxes

Jane                 $105,000                     $12,000                       $1,500                         $650

Tom                     60,000                      7,000 500 250

Bill                        6,000 1,200                          0                                   0

Actual state unemployment tax rate is 4%, while the federal unemployment tax rate is 1%. The taxable income limit for social security tax is $110,000/person, year, while the taxable income limit of SUTA and FUTA is $7,000/ person, year.

- Prepare the necessary journal entries for November payrolls of Warrs Company if salaries and wages are paid in cash after withholding all payroll taxes and dues.

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.

In 2018, the internal auditors of KJI Manufacturing discovered the following material errors made in prior years:
  

1. Equipment was purchased on June 30, 2016, for $130,000. The purchase was incorrectly recorded as a debit to repair and maintenance expense. The equipment has a useful life of five years and no residual value.
2. On March 31, 2017, $62,000 was paid to a contractor to landscape the area around a manufacturing plant including the installation of a sprinkler system. The expenditure was debited to the Land account. The landscaping is expected to have a 20-year useful life and no residual value.

KJI uses the straight-line method of depreciation for all depreciable assets.

Required:
1. Prepare the journal entries at December 31, 2018, to correct the errors (ignore income taxes).
2. Prepare the journal entries to record 2018 depreciation for any assets recorded in requirement 1.

Lancaster Services, Inc. leased equipment from Phillips Corporation. Phillips completed construction of the machine on January 1, 2018. The lease agreement for the $8 million (fair value and present value of the lease payments) machine specified four equal payments at the end of each year. The useful life of the machine was expected to be four years with no residual value. Phillip's implicit interest rate was 10%.

Required:
1. Prepare the journal entry for Lancaster Services at the beginning of the lease on January 1, 2018.
2. Prepare an amortization schedule for the four-year term of the lease. Round your answers to the nearest whole dollar amounts.
3. Prepare the appropriate journal entries related to the lease on December 31, 2018.
4. Prepare the appropriate journal entries related to the lease on December 31, 2020.

In 2018, the Westgate Construction Company entered into a contract to construct a road for Santa Clara County for $10,000,000. The road was completed in 2020. Information related to the contract is as follows:

Westgate recognizes revenue over time according to percentage of completion.

Required:

1. Calculate the amount of revenue and gross profit (loss) to be recognized in each of the three years. (Do not round intermediate calculations. Loss amounts should be indicated with a minus sign.)

Roth Corporation used the equity method to report the following transactions for the years 2018 and 2019:

2018 Feb. 2 Purchased 40% of the voting common shares of Dunn Enterprises Inc. for $500,000.
This is a long-term investment giving Roth Corporation significant influence over the operations of Dunn Enterprises Inc.

Oct. 15 Received $20,000 cash dividends on Dunn Enterprises Inc. common shares.

Dec. 31 Dunn Enterprises Inc. reported total income of $190,000 for the year ended December 31, 2018.

2019 Jun. 30 Dunn Enterprises Inc. reported total income of $40,000 for the six months ended June 30, 2019.

Jun 30 Sold one-half of the Dunn Enterprises Inc. shares for $275,000.

Prepare journal entries to record the above transactions.

Statistics question (please show thorough working):

- Part a):

Public health authorities want to estimate the proportion of Australians aged 18-65 who caught the flu during winter 2018. If the true proportion is thought to be about 24%, how large a sample will be needed if we want to be 95% sure that our estimate will be within 0.02 of the true value?

- Part b):

Due to a change in the available funding, the sample actually used for estimating the prevalence of flu included 1,712 randomly-selected Australians aged 18-65. Of these, 367 reported having a “flu-like illness” during winter 2018. Use these data to calculate a 90% confidence interval for the proportion of Australians aged 18-65 who had a flu-like illness during winter 2018.

Boulder, Inc., obtained 90 percent of Rock Corporation on January 1, 2016. Annual amortization of $22,600 is applicable on the allocations of Rock's acquisition-date business fair value. On January 1, 2017, Rock acquired 75 percent of Stone Company's voting stock. Excess business fair-value amortization on this second acquisition amounted to $9,000 per year. For 2018, each of the three companies reported the following information accumulated by its separate accounting system. Separate operating income figures do not include any investment or dividend income.

1. What is consolidated net income for 2018?
2. How is 2018 consolidated net income distributed to the controlling and noncontrolling interests?

On January 1, 2014, Pronghorn Company purchased a building and equipment that have the following useful lives, salvage values, and costs.

The building has been depreciated under the double-declining-balance method through 2017. In 2018, the company decided to switch to the straight-line method of depreciation. Pronghorn also decided to change the total useful life of the equipment to 9 years, with a salvage value of $4,800 at the end of that time. The equipment is depreciated using the straight-line method.

(a) Prepare the journal entry necessary to record the depreciation expense on the building in 2018.

(b) Compute depreciation expense on the equipment for 2018.

Up and its 80 percent–owned subsidiary (Down) reported the following figures for the year ending December 31, 2018. Down paid dividends of $54,000 during this period.

In 2017, intra-entity gross profits of $54,000 on upstream transfers of $162,000 were deferred into 2018. In 2018, intra-entity gross profits of $71,200 on upstream transfers of $196,400 were deferred into 2019.

1. What amounts appear for each line in a consolidated income statement?

2. What income tax expense should appear on the consolidated income statement if each company files a separate return? Assume that the tax rate is 30 percent.