On July 1, 2020, Dynamic Company purchased for cash 40% of the outstanding capital stock of Cart Company. Both Dynamic and Cart have a December 31 year-end. Cart, whose common stock is actively traded in the over-the-counter market, reported its total net income for the year to Dynamic and also paid cash dividends on November 15, 2020, to Dynamic and its other stockholders.

Required:

a. How should Dynamic report the foregoing facts in its December 31, 2020, balance sheet and its income statement for the year then ended? Discuss the rationale for your answer.

b. If Dynamic should elect to report its investment at fair value, how would its balance sheet and income statement differ from your answer to part (a)?

Presented below is information related to Whispering Corp. for the year 2020.

Prepare a multiple-step income statement for 2020. Assume that 60,800 shares of common stock are outstanding for the entire year. (Round earnings per share to 2 decimal places, e.g. 1.49.) .

Prepare a separate retained earnings statement for 2020. (List items that increase adjusted retained earnings first.)

Bramble Company issued $432,000 of 10%, 20-year bonds on January 1, 2020, at 102. Interest is payable semiannually on July 1 and January 1. Bramble Company uses the effective-interest method of amortization for bond premium or discount. Assume an effective yield of 9.7705%. Prepare the journal entries to record the following. (Round intermediate calculations to 6 decimal places, e.g. 1.251247 and final answer to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

(a) The issuance of the bonds. (b) The payment of interest and related amortization on July 1, 2020. (c) The accrual of interest and the related amortization on December 31, 2020.

An analysis of the accounts of Roberts Company reveals the following manufacturing cost data for the month ended June 30, 2020.

Costs incurred: raw materials purchases $ 57,250, direct labor $ 51,410, manufacturing overhead $22,900. The specific overhead costs were: indirect labor $ 6,160, factory insurance $ 4,610, machinery depreciation $ 4,920, machinery repairs $ 2,230, factory utilities $ 3,210, and miscellaneous factory costs $ 1,770. Assume that all raw materials used were direct materials.

(a) Prepare the cost of goods manufactured schedule for the month ended June 30, 2020.

(b) Show the presentation of the ending inventories on the June 30, 2020, balance sheet.

On January 1, 2020, Bonita Company sold 12% bonds having a maturity value of $650,000 for $699,280, which provides the bondholders with a 10% yield. The bonds are dated January 1, 2020, and mature January 1, 2025, with interest payable December 31 of each year. Bonita Company allocates interest and unamortized discount or premium on the effective-interest basis.

Prepare a schedule of interest expense and bond amortization for 2020–2022. (Round answer to 0 decimal places, e.g. 38,548.)

Ron's Don't Wait Inc (RDW) purchased a delivery van on July 1, 2019. The Van cost $65,000 and has an estimated life of 5 years or 200,000 kms and a residual value of $5,000. RDW uses exact months for it's depreciation. RDW estimates the Van will be driven 22,000 kms in 2019, 55,000 in 2020, 48,000 in 2021, 65,000 in 2022, and 25,000 in 2023.

Required

Prepare the following depreciation schedule for all 5 years for each of the following methods:

      a) Straight Line

b) Double-Declining Balance

c) Units of Output

Which method should RDW Inc adopt if it wants to maximize it's earnings in 2020?

Novak Co. has the following defined benefit pension plan balances on January 1, 2020.

Projected benefit obligation 4555000

Fair value of plan assets 4555000

The interest (settlement) rate applicable to the plan is 10%. On January 1, 2021, the company amends its pension agreement so that prior service costs of $599,000 are created. Other data related to the pension plan are:

Prepare a pension worksheet for the pension plan in 2020. (Enter all amounts as positive.)