Empire Building Co. makes toxic material used in chemical weapons. On December 31, 2008 they buy a factory for $5 million(cash) for the production of Policus, a dangerous chemical. The plant is expected to be used for 10 years, at which time it will be dismantled and the site will be cleaned up. Empire estimates that it will cost them $10 million at the end of 2018 to remove the factory and clean the area. The risk free rate on December 31, 2018 is 4% and the adjusted risk rate for the company is 8%.

a) Record the journal entry(ies) for the purchase of the factory.

b) Record the required adjusting entry(ies) at the end of 2009.

c) On December 31, 2018 the factory is removed at a cost of 7$ million and site is cleaned up at for an additional $4 million . Record the required journal entry(ies) for the factory clean up.

On 31 December 2018, the accounting records in Ahmed’s Company showed the following information:

                                                                                          (in Dirhams)

Prepare the Income Statement AND Balance Sheet for year ended December 31, 2018

Just Dew It Corporation reports the following balance sheet information for 2017 and 2018. JUST DEW IT CORPORATION 2017 and 2018 Balance Sheets Assets Liabilities and Owners' Equity 2017 2018 2017 2018 Current assets Current liabilities Cash $ 10,450 $ 10,000 Accounts payable $ 70,750 $ 63,000 Accounts receivable 27,800 28,750 Notes payable 49,500 48,000 Inventory 63,200 63,100 Total $ 120,250 $ 111,000 Total $ 101,450 $ 101,850 Long-term debt $ 64,900 $ 62,700 Owners' equity Common stock and paid-in surplus $ 90,000 $ 90,000 Fixed assets Retained earnings 144,300 182,150 Net plant and equipment $ 318,000 $ 344,000 Total $ 234,300 $ 272,150 Total assets $ 419,450 $ 445,850 Total liabilities and owners' equity $ 419,450 $ 445,850 Based on the balance sheets given for Just Dew It, calculate the following financial ratios for the year 2017.

a. Current ratio

b. Quick ratio

c. Cash ratio

d. NWC to total assets ratio

e. Debt-equity ratio and equity multiplier

f. Total debt ratio and long-term debt ratio

On June 15, 2018, Sanderson Construction entered into a long-term construction contract to build a baseball stadium in Washington, D.C., for $410 million. The expected completion date is April 1, 2020, just in time for the 2020 baseball season. Costs incurred and estimated costs to complete at year-end for the life of the contract are as follows ($ in millions):

Required:
1. Compute the revenue and gross profit will Sanderson report in its 2018, 2019, and 2020 income statements related to this contract assuming Sanderson recognizes revenue over time according to percentage of completion.
2. Compute the revenue and gross profit will Sanderson report in its 2018, 2019, and 2020 income statements related to this contract assuming this project does not qualify for revenue recognition over time.
3. Suppose the estimated costs to complete at the end of 2019 are $200 million instead of $50 million. Compute the amount of revenue and gross profit or loss to be recognized in 2019 using the percentage of completion method.

On June 15, 2018, Sanderson Construction entered into a long-term construction contract to build a baseball stadium in Washington, D.C., for $310 million. The expected completion date is April 1, 2020, just in time for the 2020 baseball season. Costs incurred and estimated costs to complete at year-end for the life of the contract are as follows ($ in millions):

Required:
1. Compute the revenue and gross profit will Sanderson report in its 2018, 2019, and 2020 income statements related to this contract assuming Sanderson recognizes revenue over time according to percentage of completion.
2. Compute the revenue and gross profit will Sanderson report in its 2018, 2019, and 2020 income statements related to this contract assuming this project does not qualify for revenue recognition over time.
3. Suppose the estimated costs to complete at the end of 2019 are $120 million instead of $30 million. Compute the amount of revenue and gross profit or loss to be recognized in 2019 using the percentage of completion method.

XYZ Company purchased a land for $ 1,000,000 during 2017 and chooses the revaluation model in accounting for its land.  

Below are the following information:

a ) What is the amount of unrealized gain on revaluation - land for the year 2017? ___Unrealized gain

b ) How much is the accumulated other comprehensive income for the year 2017 to be recognized in the balance sheet? ____accumulated other comprehensive income

c ) What is the amount of unrealized gain on revaluation - land for the year 2018? ____

d ) How much is the impairment loss for the year 2018? ____

e ) How much is the accumulated other comprehensive income for the year 2018 to be recognized in the balance sheet? ____

f ) How much is the recovery of impairment loss and revaluation gain on land for the year 2019? _____

g ) What is the amount of unrealized gain on revaluation - land for the year 2019?  ____

h ) If the land was sold on January 10, 2020, for $ 1,115,000, how much is the gain on sale of land? ____

i ) How much is the accumulated other comprehensive income to be recycled to the retained earnings as a result of the gain on sale of land? ____

On February 1, 2018, Arrow Construction Company entered into a three-year construction contract to build a bridge for a price of $8,500,000. During 2018, costs of $2,200,000 were incurred, with estimated costs of $4,200,000 yet to be incurred. Billings of $2,740,000 were sent, and cash collected was $2,450,000.

In 2019, costs incurred were $2,740,000 with remaining costs estimated to be $3,900,000. 2019 billings were $2,990,000, and $2,675,000 cash was collected. The project was completed in 2020 after additional costs of $4,000,000 were incurred. The company’s fiscal year-end is December 31. This project does not qualify for revenue recognition over time.

Required:

1. Calculate the amount of revenue and gross profit or loss to be recognized in each of the three years.

2a. Prepare journal entries for 2018 to record the transactions described (credit "various accounts" for construction costs incurred).

2b. Prepare journal entries for 2019 to record the transactions described (credit "various accounts" for construction costs incurred).

3a. Prepare a partial balance sheet to show the presentation of the project as of December 31, 2018.

3b. Prepare a partial balance sheet to show the presentation of the project as of December 31, 2019.

What is the Cash flow from Assets?
What is the OCF?
What are the changes in NWC?
What are the Net New Borrowing from Creditors and from Owners?

The shareholders’ equity section of the balance sheet of TNL Systems Inc. included the following accounts at December 31, 2017:

Required:
1. During 2018, TNL Systems reacquired shares of its common stock and later sold shares in two separate transactions. Prepare the entries for both the purchase and subsequent resale of the shares assuming the shares are (a) retired and (b) viewed as treasury stock.

On February 5, 2018, TNL Systems purchased 8 million shares at $12 per share.

On July 9, 2018, the corporation sold 2 million shares at $14 per share.

On November 14, 2020, the corporation sold 2 million shares at $9 per share.

2. Prepare the shareholders’ equity section of TNL Systems’ balance sheet at December 31, 2020, comparing the two approaches. Assume all net income earned in 2018–2020 was distributed to shareholders as cash dividends.

Company A has the following portfolio of Available for sale securities at 12/31/17:

Security Cost Fair Value

ABC Inc. Bonds $35,000 $36,000

XYZ Corp Bonds $25,000 $28,000

DEF Co. Bonds $20,000 $21,000

PQR Inc. Bonds $20,000 $22,000

All these investments were purchased in 2017. In 2018, Company A sold the PQR Inc. bonds for $26,000. The remaining investments were still held at 12/31/18 and had the following fair values: ABC bonds $34,000, XYZ Corp bonds $29,000 and DEF Co. bonds $20,500. Company A had a tax rate of 25% for both 2017 and 2018.

1. For these securities, what will be the net effect on 2017 other comprehensive income (specify increase or decrease)

2. What will be the net effect of the reclassification adjustment reported in 2018's other comprehensive income? Will it increase or decrease the other comprehensive income for the year?

3. For these securities, what will be the net effect on 2018 other comprehensive income? (specify increase or decrease)

Based on the above information, what will be the balance in the accumulated other comprehensive income account on the 12/31/18 balance sheet?