On May 1, 2020, Spencer Industries purchased the machine for use in its production process. The cash price of this machine was $35,000, sales tax $2,200, insurance during shipping $80, shipping costs $150, installation and testing costs $70, and $100 of oil and lubricants to be used with the machinery during its first year of operations.

Instructions:

1. Prepare the journal entry to record its purchase on May 1, 2020.

2. Compute depreciation on December 31, 2020 under the methods bellow:

A. The straight-line method of depreciation, estimates the useful life of the machine is 4 years with a $5,000 residual value remaining at the end of that time period.

B. The declining-balance method, estimates the useful life of the machine is 4 years with a $5,000 residual value remaining at the end of that time period. The rate used is twice the straight-line rate.

C. The units-of-activity method, estimates that the useful life of the machine is 125,000 units. Actual usage is as follows: 2020, 28,000 units; 2021, 37,000 units; 2022, 42,000 units; and 2023, 18,000 units.

3. The adjusting entry to record annual depreciation using straight-line method on December 31, 2020.

Grape Inc. had the following balance sheet at December 31, 2019:

Grape INC. BALANCE SHEET DECEMBER 31, 2019

Cash $ 31,000

Accounts payable $ 61,000

Accounts receivable 56,800

Notes payable (long-term) 76,000

Investments 86,000

Common stock 200,000

Plant assets (net) 138,500

Retained earnings 41,300

Land 66,000

Total assets and Total Liabilities and Stockholders' Equity $378,300 $378,300

During 2020, the following occurred:

1. Grape liquidated its available-for-sale investment portfolio at a gain of $15,000.

2. A tract of land was purchased for $61,000 cash.

3. An additional $15,200 in common stock was issued at par.

4. Dividends totaling $41,000 were declared and paid to stockholders.

5. Net income for 2020 was $46,000, including $8,000 in depreciation expense.

6. Land was purchased through the issuance of $195,000 in additional notes payable.

7. At December 31, 2020, Cash was $68,000, Accounts Receivable was $84,000, and Accounts Payable was $72,000.

Instructions:

(a) Prepare the balance sheet as it would appear at December 31, 2020

(b) Prepare a statement of cash flows for the year 2020 for Grape. Prepare all in good form.

Write a function that takes the current date and corrects the number of days, if it's wrong. The function must return true if the date passed to it is a valid date and false, if not. The main function uses the returned value to either print "Date validated", if a valid date was entered or "Invalid date entered. Changed to ", followed by the modified date.

For example: if given 11/31/2020, it will produce 12/1/2020. If given 2/29/2021, it will make it 3/1/2021. But, if 11/29/2020 is entered, it will not change it.

To check the date, the function uses the fact that months 4, 6, 9, 11 have 30 days, month 2 has 28 days in non-leap years and 29 in leap years and the remaining months have 31 days.

A year is a leap year if it's divisible by 400 or if not, it's divisible by 4, but not 100.

Example interaction between the user and the program:

Enter a date: 2/31/2021

Invalid date entered. Changed to 3/3/2021

Another example:

Enter a date: 12/32/2020

Invalid date entered. Changed to  1/1/2021

Another example:

Enter a date: 10/28/2020

Date validated.

Press any key to continue.

In its first year of business, Sweet Acacia purchased land, a building, and equipment on March 5, 2020, for $648,000 in total. The land was valued at $280,235, the building at $334,915, and the equipment at $68,350. Additional information on the depreciable assets follows:

Allocate the purchase cost of the land, building, and equipment to each of the assets.

Sweet Acacia has a December 31 fiscal year end and is trying to decide how to calculate depreciation for assets purchased during the year.

Calculate depreciation expense for the building and equipment for 2020 and 2021 assuming depreciation is calculated to the nearest month. (Round answers to 0 decimal places, e.g. 5,275.)

Sweet Acacia has a December 31 fiscal year end and is trying to decide how to calculate depreciation for assets purchased during the year.

Calculate depreciation expense for the building and equipment for 2020 and 2021 assuming a half-year's depreciation is recorded in the year of acquisition. (Round answers to 0 decimal places, e.g. 5,275.)

Question 1. Merino Plc 2019 and 2020 Balance Sheets included the following items:

Merino Plc Income Statement was as follows:

Required:

Prepare the STATEMENT OF CASH FLOWS for the year ended December 31, 2020. Additional information includes the following:

1. Equipment was purchased for $64,848 cash
2. Issued 3,360 common shares for cash at $28 per share
3. Declared and paid cash dividends during the year.

Statement of Cash Flows The following items involve the cash flow activities of Rocky Horror Picture Co.: Net income, $42,800 Payment of dividends, $16,000 Ten-year, $33,000 bonds payable were issued at face value Depreciation expense, $24,500 Building acquired at a cost of $33,400 Accounts receivable decreased by $3,600 Accounts payable decreased by $4,700 Equipment acquired at a cost of $8,000 Inventories increased by $5,800 Beginning cash balance, $17,700 Required: Prepare Rocky Horror Picture’s statement of cash flows using the indirect method. ROCKY HORROR PICTURE CO. Statement of Cash Flows For Year Ended December 31, Current Year Operating Activities:

Gwen Stefani makes the following charitable donations in the current year:

1. Inventory held for resale in Gwen Stefani’s business (a sole proprietorship)

Basis $ 8,000, Market Value $ 7,200

2. Stock in Driskoll, Inc., held as an investment (acquired two years ago)

Basis 16,000, Market Value 40,000

3. Coin collection held as an investment (acquired five years ago)

Basis 4,000, Market Value 20,000

The Driskoll stock and the inventory were given to Gwen Stefani’s church, and the coin collection was given to the Salvation Army. Both donees promptly sold the property for the stated fair market value. Disregarding percentage limitations, Gwen Stefani’s current charitable contribution deduction is:

Zoum Corporation had the following transactions during the year: Issued $250,000 of par value common stock for cash. Recorded and paid wages expense of $120,000. Acquired land by issuing common stock of par value $100,000. Declared and paid a cash dividend of $20,000. Sold a long-term investment (cost $8,000) for cash of $6,000. Recorded cash sales of $800,000. Bought inventory for cash of $320,000. Acquired an investment in Zynga stock for cash of $42,000. Converted bonds payable to common stock in the amount of $1,000,000. Repaid a 6-year note payable in the amount of $440,000. What is the net cash provided by financing activities? Group of answer choices ($1,210,000). $230,000. ($210,000). $790,000.

Estimating and Recording Bad Debt Estimates and Write-offs; Reporting of Accounts Receivable

At December 31, 2020, its annual year-end, the accounts of Sun Systems Inc. show the following.

1. Sales revenue for 2020, $900,000, of which one-sixth was on account.
2. Allowance for doubtful accounts, balance December 31, 2019, $4,500 credit.
3. Accounts receivable, balance December 31, 2020 (prior to any write-offs of uncollectible accounts during 2020), $90,250.
4. Uncollectible accounts to be written off, December 31, 2020, $5,250.
5. Aging schedule at December 31, 2020, showing the following breakdown of total accounts receivable, excluding amounts to be written off.

Required

a. Prepare the 2020 entry to write off the uncollectible accounts.

b. Prepare the 2020 adjusting entry to record bad debt expense for each of the following separate assumptions concerning expected bad debt loss rates. Note: Treat each of the following scenarios separately, they are independent of one another.

1. Bad debt expense is based on credit sales, 1.5%. (Hint: See p. 8-19: Alternative to Estimating Net Realizable Value)

2. The Allowance for Doubtful accounts is based on total receivables at year-end, 2.5%.

3. The Allowance for Doubtful accounts is based on aging schedule: not past due, 0.5%; past due 1–60 days, 1%; and past due over 60 days, 8%.

4. Bad debt expense is based on direct write-off method (assume entry in part a has not been recorded).

c. Prepare the 2020 balance sheet disclosure relating to accounts receivable for each assumption 1 through 4 of part b.

a.

b. Note: Treat each scenario separately, they are independent of one another.

1.

2.

3.

4.

c.  

Note: Do not use negative signs with your answers.

On 1 January 2019 Liam Ltd acquired 90% of the issued shares of Ian Ltd. During the year ended 31 December 2019 the following intra group transactions occurred:

• Sales of inventory:

Ian Ltd sold inventory to Liam Ltd $360,000. This inventory costed Ian Ltd $300,000. At 31 December 2019 Liam Ltd held 50% of the inventory acquired from Ian Ltd.

• Intragroup sale of equipment:

An item of equipment originally acquired by Liam Ltd on 1 January 2017 at a cost of $400,000 was sold to Ian Ltd on 1 January 2019 for $340,000. Liam Ltd had depreciated this asset at 10% per annum on a straight-line basis with no scrap value. There is no change in the asset expected life subsequent to the sale.

• During the year ended 31 December 2019 the following dividends were paid:

• Liam Ltd     $100,000
• Ian Ltd        $40,000

• On 30 June 2019 Liam Ltd lent Ian Ltd $100,000. Interest on this loan at 8% was paid up to 31 December 2019.

Required:

Prepare the consolidation journal entries required to eliminate the above intragroup transactions for the year ended 31 December 2019. Assume a tax rate of 30%.