XYZ stock price and dividend history are as follows: Year Beginning-of-Year Price Dividend Paid at Year-End 2015 $ 130 $ 5 2016 144 5 2017 120 5 2018 125 5 An investor buys six shares of XYZ at the beginning of 2015, buys another three shares at the beginning of 2016, sells one share at the beginning of 2017, and sells all eight remaining shares at the beginning of 2018. a. What are the arithmetic and geometric average time-weighted rates of return for the investor? Prepare a chart of cash flows for the four dates corresponding to the turns of the year for January 1, 2015, to January 1, 2018. What is the dollar-weighted rate of return? (Hint: If your calculator cannot calculate internal rate of return, you will have to use a spreadsheet or trial and error.)

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

Equipment was purchased on June 30, 2016, for $140,000. 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.

On March 31, 2017, $66,000 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.

Module Assignment:

Depreciation Exercise

On January 1, 2018, Happy Hospital purchased an MRI for $8,375,000. It cost an additional $125,000 to deliver, install and calibrate the MRI. The MRI has a useful life of 5 years, at which time it is expected that it will be disposed of for a $100,000 salvage value.

Using straight-line depreciation method, prepare a schedule showing annual depreciation expense and accumulated depreciation for each of the 5 years.

Show how the asset and accumulated depreciation would appear on the balance sheet at December 31, 2018.

Prepare journal entries to record the asset’s acquisition, annual depreciation for each year and the asset’s sale for $100,000.

Year    Annual Expense          Accumulated Depr      Net asset value

2018

2019

2020

2021

2022

Property, Plant & Equipment

Less: Accumulated depreciation

Net Asset value

Boulder, Inc., obtained 90 percent of Rock Corporation on January 1, 2016. Annual amortization of $25,900 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 $12,800 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, 2018, NFB Visual Aids issued $780,000 of its 20-year, 8% bonds. The bonds were priced to yield 10%. Interest is payable semiannually on June 30 and December 31. NFB Visual Aids records interest expense at the effective rate and elected the option to report these bonds at their fair value. On December 31, 2018, the fair value of the bonds was $650,000 as determined by their market value in the over-the-counter market. General (risk-free) interest rates did not change during 2021. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Required: 1-a. Determine the price of the bonds at January 1, 2018. 1-b to 4. Prepare the necessary Journal entries.

Bramble Inc. reports the following pretax income (loss) for both financial reporting purposes and tax purposes.

The tax rates listed were all enacted by the beginning of 2018.

Prepare the journal entries for the years 2018–2021 to record income tax expense (benefit) and income taxes payable (refundable) and the tax effects of the loss carryforward, assuming that at the end of 2020 the benefits of the loss carryforward are judged more likely than not to be realized in the future. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

IFRS 15

Alignment Co. signed a contract to provide network service to Clumsy Ltd for one year from April 2018 for $100 per month. The contract required Clumsy Ltd to make a single payment to Alignment Co for all 12 months at the beginning of the contract. Alignment Co received 12,000 on the 1st of April 2018.

What amount of revenue should Alignment Co recognise in its statement of profit and loss for the year ended December 31, 2018?

A company enters into a contract to supply 4 types of products to a customer. The promise to supply each of these products is regarded as a separate performance obligation.

The stand alone prices of these four products are:

Product A $32,000

Product B $18,500

Product C $25,500

Product D $20,000

On January 1, 2018, Patriots Co. awarded restricted stock units (RSUs) representing 30 million of its $1 par common shares to key personnel, subject to forfeiture if employment is terminated within three years. After the recipients of the RSUs satisfy the vesting requirement, the company will distribute the shares. On the grant date, the shares had a market price of $3 per share.

Required:

Determine the total compensation cost pertaining to the RSUs.

Prepare the appropriate journal entry to record the award of RSUs on January 1, 2018.

Prepare the appropriate journal entry to record compensation expense on December 31, 2018, December 31, 2019, and December 31, 2020.

Prepare the appropriate journal entry to record the lifting of restrictions on the RSUs and issuing shares at December 31, 2020.

Arizona Inc. uses the perpetual inventory system, and recorded the following data pertaining to raw material X during January 2018:

                                                                                      Units                                 

       Date                                Received           Cost              Issued           On Hand

       Jan   1      Inventory                                $4.50                                        3,200

       Jan 11      Sale ($18)                                                      1,600                1,600

       Jan 15      Purchase           1,000            $4.70                                        2,600

       Jan 17      Sale ($18)                                                       1,100               1,500

       Jan 25      Purchase           1,500            $4.90                                       3,000         

       Round your answer to two decimals.

       Instructions:

1. Determine the cost of sales, gross profit and inventory value of raw material X inventory at January 31, 2018 using the moving-weighted average method.

2. Determine the cost of sales, gross profit and inventory value of raw material X inventory at January 31, 2018 using the average cost method.

Rembrandt Paint Company had the following income statement items for the year ended December 31, 2018 ($ in 000s):

In addition, during the year the company completed the disposal of its plastics business and incurred a loss from operations of $3.1 million and a gain on disposal of the component’s assets of $5.0 million. 600,000 shares of common stock were outstanding throughout 2018. Income tax expense has not yet been recorded. The income tax rate is 40% on all items of income (loss).

Required:
Prepare a multiple-step income statement for 2018, including EPS disclosures.