Bowe Ltd is a reporting entity and complies with AASB 112 ‘Income Taxes'. Bowe maintains separate accounts for any deferred tax assets or deferred tax liabilities (i.e. does not offset deferred tax assets and deferred tax liabilities). Bowe’s accounting records for the year ended 30 June 2020 disclose the following:
|
Revenue |
$1,200,000 |
|
Cost of goods sold |
300,000 |
|
SG&A expenses |
100,000 |
|
Capital expenditure (not allowed for tax deduction) |
200,000 |
|
Deductible temporary difference, 30 June 2020 |
50,000 |
|
Taxable temporary difference, 30 June 2020 |
80,000 |
|
Deductible temporary difference, 30 June 2019 |
50,000 |
|
Taxable temporary difference, 30 June 2019 |
30,000 |
|
Tax rate |
20% |
|
Total tax base of assets |
1,000,000 |
|
Total tax base of liabilities |
800,000 |
REQUIRED:
Calculate deferred tax expense for the year ended 30 June 2020. Your answers must comply with AASB 112 ‘Income Taxes’. Show all necessary working, explanations and assumptions to support your answer.
In: Accounting
The following data are taken from the records of Alee Company. December 31, 2020 December 31, 2019 Cash $ 15,000 $ 8,000 Current assets other than cash 85,000 60,000 Long-term debt investments 10,000 53,000 Plant assets 335,000 215,000 $445,000 $336,000 Accumulated depreciation $ 20,000 $ 40,000 Current liabilities 40,000 22,000 Bonds payable 75,000 –0– Common stock 254,000 254,000 Retained earnings 56,000 20,000 $445,000 $336,000 Additional information: Held-to-maturity debt securities carried at a cost of $43,000 on December 31, 2019, were sold in 2020 for $34,000. The loss (not unusual) was incorrectly charged directly to Retained Earnings. Plant assets that cost $50,000 and were 80% depreciated were sold during 2020 for $8,000. The loss was incorrectly charged directly to Retained Earnings. Net income as reported on the income statement for the year was $57,000. Dividends paid amounted to $10,000. Depreciation charged for the year was $20,000. Instructions Prepare a statement of cash flows for the year 2020 using the indirect method.
In: Accounting
Question 1 – CVP Analysis
Brandon Manufacturing provides the data below relating to its single product for 2020:
Required:
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In: Accounting
(b)Raymond Traders is a small business, and it undertakes periodical stock-takes to determine its inventory value. On 30 June 2020, Raymond Traders completed a physical stock-take, and inventory on hand as at 30 June 2020 had a cost of $39,600. However, some of the inventory items were deemed to be obsolete and Net Realisable value was determined to be $36,000.
(i) Based on the information above, what inventory management system is Raymond Traders currently using? Outline one advantage and one disadvantage of the inventory management system.
(ii)Advice Raymond Traders on the value of inventories to be shown in the Statement of Financial Position as at 30 June 2020, with reference to NZ IAS 2. Explain. (iii)In light of your answer (ii) above, prepare a journal entry to record any required adjustments on 30 June 2020.
(c) NZ IAS 2, paragraph 36 requires companies to make disclosures to present inventory fairly in their financial statements. List six disclosures that companies must include in the financial statements as additional disclosures.
In: Accounting
Bridgeport Corp. sponsors a defined benefit pension plan for its
employees. On January 1, 2020, the following balances related to
this plan.
| Plan assets (market-related value) | $536,000 | ||
| Projected benefit obligation | 652,000 | ||
| Pension asset/liability | 116,000 | Cr. | |
| Prior service cost | 86,000 | ||
| Net gain or loss (debit) | 99,000 |
As a result of the operation of the plan during 2020, the actuary
provided the following additional data for 2020.
| Service cost | $124,000 | ||
| Settlement rate, 9%; expected return rate, 10% | |||
| Actual return on plan assets | 49,000 | ||
| Amortization of prior service cost | 26,000 | ||
| Contributions | 144,000 | ||
| Benefits paid retirees | 88,000 | ||
| Average remaining service life of active employees | 10 | years |
1.Using the preceding data, compute pension expense for Bridgeport
Corp. for the year 2020 by preparing a pension worksheet that shows
the journal entry for pension expense. (Enter all
amounts as positive.)
2. Use the market-related asset value
to compute the expected return and for corridor
amortization.
| Expected return |
$ |
|
| Corridor amortization |
$ |
In: Accounting
Cheyenne Corp.’s income statement for the year ended December 31, 2020, had the following condensed information:
| Service revenue | $773,600 | |||
| Operating expenses (excluding depreciation) | $497,000 | |||
| Depreciation expense | 57,000 | |||
| Unrealized loss on FV-NI investments | 4,500 | |||
| Loss on sale of equipment | 12,100 | 570,600 | ||
| Income before income taxes | 203,000 | |||
| Income tax expense | 52,000 | |||
| Net income | $151,000 |
There were no purchases or sales of trading (FV-NI) investments
during 2020.
Cheyenne’s statement of financial position included the following
comparative data at December 31:
| 2020 | 2019 | |||
|---|---|---|---|---|
|
FV-NI investments |
$21,700 | $26,200 | ||
|
Accounts receivable |
35,100 | 54,900 | ||
|
Accounts payable |
45,400 | 31,500 | ||
|
Income tax payable |
6,900 | 9,200 |
Assume that Cheyenne Corp.’s current cash debt coverage ratio in 2019 was 4.5. Calculate the company’s current cash debt coverage ratio in 2020. (Round answer to 1 decimal places, e.g. 7.5.)
| Cash Debt Coverage Ratio times (rounded to 1 decimal place) |
In: Accounting
The following information is available for Bob and Brenda Horton, a married couple filing a joint return for 2020. Bob is 61 and Brenda is 60. They have fully supported their son, Charles age 31 (a US citizen) who lived with Bob and Brenda all of 2020. Bob and Brenda fully supported Charles for all of 2020. Charles only source of income was $3,990 from unemployment.
The following information relates to Bob and Brenda for 2020:
Salary – Bob $80,000
Salary – Brenda 120,000
Interest income (from bank account) 150
Interest Income from State of NY bonds 4,000
Capital Loss on the sale of ZeZ, Inc stock (7,220)
Property taxes paid 4,000
State income taxes paid 5,000
Home mortgage interest paid 6,000
Charitable contributions paid 3,000
Federal Withholding 39,000
Tax liability (using rate schedule)
In: Accounting
Brady Construction Company contracted to build an apartment
complex for a price of $6,900,000. Construction began in 2018 and
was completed in 2020. The following is a series of independent
situations, numbered 1 through 6, involving differing costs for the
project. All costs are stated in thousands of dollars.
| Estimated Costs to Complete | ||||||||||||
|
Costs Incurred During Year |
(As of the End of the Year) |
|||||||||||
|
Situation |
2018 |
2019 |
2020 |
2018 |
2019 |
2020 |
||||||
| 1 | 1,690 | 2,700 | 1,470 | 4,170 | 1,470 | — | ||||||
| 2 | 1,690 | 1,470 | 3,160 | 4,170 | 3,160 | — | ||||||
| 3 | 1,690 | 2,700 | 3,120 | 4,170 | 3,020 | — | ||||||
| 4 | 690 | 3,190 | 1,380 | 4,830 | 970 | — | ||||||
| 5 | 690 | 3,190 | 2,630 | 4,830 | 3,020 | — | ||||||
| 6 | 690 | 3,190 | 3,700 | 6,455 | 3,410 | — | ||||||
Required:
Complete the following table. (Do not round intermediate
calculations. Enter answers in dollars. Round your final answers to
the nearest whole dollar. Negative amounts should be indicated by a
minus sign.)
Gross Profit (loss) Recogonized
Revenue Recogonized over time/Revenue Recogonized upon completed for situation 1-6 years 2018, 2019, 2020
In: Accounting
For the following four questions please use the following table and information. Assume that the CPI base year is 1990 and also assume that the CPI market basket has .04 houses, .1 cars, and 1,500 gallons of gasoline. Please use 1 decimal place in your answers.
| Year | House Price | Car Price | Nominal Gasoline Price per Gallon |
| 1990 | $150,000 | $10,000 | $2.00 |
| 2000 | $210,000 | $18,000 | $2.10 |
| 2010 | $225,000 | $25,000 | $2.30 |
| 2019 | $250,000 | $30,000 | $2.50 |
| 2020 | $252,000 | $30,500 | $2.70 |
1- What is the value of the CPI in 1990?
2-What is the value of the CPI in 2020?
3-What is the value of the core CPI in 2020? Hint: what of this market basket would be excluded and what would be included?
4- Say that you wanted to compute the market basket in each of 1990, 2000, 2010, 2019, and 2020. when you compare your calculations, what is kept constant over these years?
a) the prices of goods
b) the number of goods in the market basket
c) nothing
In: Economics
use the data below to explain the current state of the economy. Explain what EACH piece of data illustrates about the economy’s health as well as the OVERALL health of the economy. Use the information from this week's lesson to help you formulate your answer and use those economic terms and concepts.
Economic Data:
According to the Bureau of Labor Statistics the Inflation Rate calculated using the CPI is 0.6% as of June 2020 which is significantly lower than an average of 2.3% in 2019. According to the Federal Reserve, the inflation rate over the past 18 years as measured by the PCE index is as follows:
In: Economics