On January 1, 2017, Palka, Inc., acquired 70 percent of the outstanding shares of Sellinger Company for $1,274,000 in cash. The price paid was proportionate to Sellinger’s total fair value, although at the acquisition date, Sellinger had a total book value of $1,540,000. All assets acquired and liabilities assumed had fair values equal to book values except for a patent (six-year remaining life) that was undervalued on Sellinger’s accounting records by $270,000. On January 1, 2018, Palka acquired an additional 25 percent common stock equity interest in Sellinger Company for $512,500 in cash. On its internal records, Palka uses the equity method to account for its shares of Sellinger.

During the two years following the acquisition, Sellinger reported the following net income and dividends:

1. Show Palka’s journal entry to record its January 1, 2018, acquisition of an additional 25 percent ownership of Sellinger Company shares.

2. Prepare a schedule showing Palka’s December 31, 2018, equity method balance for its Investment in Sellinger account.

The shareholders’ equity section of the balance sheet of TNL Systems Inc. included the following accounts at December 31, 2017: Shareholders' Equity ($ in millions) Common stock, 300 million shares at $1 par $ 300 Paid-in capital—excess of par 2,400 Paid-in capital—share repurchase 2 Retained earnings 2,000 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. A) On February 5, 2018, TNL Systems purchased 7 million shares at $12 per share.B) On July 9, 2018, the corporation sold 3 million shares at $14 per share. C)On November 14, 2020, the corporation sold 3 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.

Use the following information to answer questions 1 - 3

Inhale, Inc., is currently operating at maximum capacity. All costs, assets, and current liabilities vary directly with sales. The tax rate and the dividend payout ratio will remain constant. In 2019, no new equity will be raised and sales are projected to increase by 10 percent. Construct the pro formas for 2019 (at first leave interest and long term debt unchanged). Then answer the following questions.

Projected total assets = $______

Projected 2013 Retained Earnings = $______

Additional new debt required = $______

Duchess Company's records show the following account balances at December 31,2018

Sales 19,000,000

Cost of Goods Sold 11,000,000

General an administrative expenses 1,200,000

Selling Expenses 700,000

Interest expense 900,000

Income tax has not yet been determined. The following events also occurred during 2018. All transactions are material in amount.

1. 500,000 in restructuring costs were incurred in connection with plant closings.

2. Inventory costing 600,000 was written off as obsolete. Material losses of this type are considered to be unusual.

3. The company experienced a negative foreign currency translation adjustment of 400,000 and had unrealized gain investments of 380,000.

Required: Prepare a single, continuous multiple-step statement of comprehensive income for 2018. The company's effective tax rate on all items affecting comprehensive income is 40%. Each component of other comprehensive income should be displayed net of tax. Calculate earnings per share if there were 1,000,000 shares outstanding at January 1, 2018 and 400,000 additional shares were issued in July 2018.

Calculate the times earned interest ratio(amounts to be deducted should be indicated with a minus sign)

On February 1, 2018, Arrow Construction Company entered into a three-year construction contract to build a bridge for a price of $8,075,000. During 2018, costs of $2,030,000 were incurred, with estimated costs of $4,030,000 yet to be incurred. Billings of $2,536,000 were sent, and cash collected was $2,280,000.

In 2019, costs incurred were $2,536,000 with remaining costs estimated to be $3,645,000. 2019 billings were $2,786,000, and $2,505,000 cash was collected. The project was completed in 2020 after additional costs of $3,830,000 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.

Fong Technology Ltd. (Fong) manufactures high-quality camera drones. Their high-quality product image and innovations in product features are known to the market. The following are the data of Fong’s business for 2018 and 2019:

Conversion costs in each year depend on production capacity defined in terms of the number of drones that can be produced, not the actual units produced.

Required

(a) Is Fong’s strategy one of cost leadership or product differentiation? Explain briefly.

(b) Calculate Fong’s operating income for the years 2018 and 2019

(c) Calculate the growth, price-recovery, and productivity components and, using these information, prepare a reconciliation statement to explain the change in operating income from 2018 to 2019. (Indicate favourable change with ‘F’ and unfavourable change with ‘U’)

The Gorman Group issued $980,000 of 9% bonds on June 30, 2018, for $1,076,985. The bonds were dated on June 30 and mature on June 30, 2038 (20 years). The market yield for bonds of similar risk and maturity is 8%. Interest is paid semiannually on December 31 and June 30.

Complete the below table to record the company's journal entry. (Round intermediate calculations and final answers to the nearest whole dollar. Enter interest rate to 1 decimal place. (i.e. 0.123 should be entered as 12.3).)

Required: Complete the below table to record the company's journal entry.

1. to 3. Prepare the journal entry to record their issuance by The Gorman Group on June 30, 2018, interest on December 31, 2018 and interest on June 30, 2019 (at the effective rate).

[The following information applies to the questions displayed below.]

Starbooks Corporation provides an online bookstore for electronic books. The following is a simplified list of accounts and amounts reported in its accounting records. The accounts have normal debit or credit balances. Assume the year ended on September 30, 2018.

On January 1, 2017, Palka, Inc., acquired 70 percent of the outstanding shares of Sellinger Company for $1,789,900 in cash. The price paid was proportionate to Sellinger’s total fair value, although at the acquisition date, Sellinger had a total book value of $2,250,000. All assets acquired and liabilities assumed had fair values equal to book values except for a patent (six-year remaining life) that was undervalued on Sellinger’s accounting records by $297,000. On January 1, 2018, Palka acquired an additional 25 percent common stock equity interest in Sellinger Company for $665,625 in cash. On its internal records, Palka uses the equity method to account for its shares of Sellinger.

During the two years following the acquisition, Sellinger reported the following net income and dividends:

Show Palka’s journal entry to record its January 1, 2018, acquisition of an additional 25 percent ownership of Sellinger Company shares.

Prepare a schedule showing Palka’s December 31, 2018, equity method balance for its Investment in Sellinger account.

“The following balances were taken from Jane's books who is a sole trader and operates a catering business.                                                                                                                                                                          

Jane's trial balance for the year to 30th June 2019 was as follows:

Additional information                                                                                                             

1. The stock/inventory as at 30th June 2019 originally cost £36,000. However, the estimated net realisable value is calculated at £35,200.                                                                                                        
2. A motor vehicle repair carried out in September 2018 costing £400 was still unpaid at the end of the year.                                                                                               
3. Insurance prepaid as at 30th June 2019 was £1500.                                                                                                    
4. Rent owing as at 30th June 2019 were £2050.                                                                                                    
5. Increase the provision for doubtful debts to 6% of debtors.                                                                                                    
6. Depreciation on equipment is to be taken at 25% on a reducing balance basis.”                                                                                                                                                                                       

Required

1. Prepare Jane's income statement for the year ending 30th June 2019 and a statement of financial position as at 30th June 2019.