Problem A, Income Taxes Harms Way Company (HWC) provides you with the following information for the year ended October 31, 2020. Your assignment is to calculate income tax expense, income taxes payable, and deferred income tax assets/liabilities. The end result will be a journal entry to record all of that. In addition, you must calculate HWC’s effective tax rate and prepare a reconciliation to the federal statutory rate of 21%. You can explain the difference in words, if you wish.

Information provided:

1. Income before tax, as shown on HWC’s GAAP statement of income = $2,440,000

2. Depreciation calculated under GAAP = $300,000. Depreciation as will be shown on the tax return = $475,000.

3. Interest income on municipal bonds, which is not subject to federal income tax = $150,000.

4. Fines recorded and paid during the year to the EPA for environmental violations = $450,000. Fines are not tax deductible.

5. Meals and entertainment expenses recorded during the year = $375,000. Only one-half (50%) of those expenses may be deducted for tax purposes.

6. At the end of the fiscal year (in October 2020), HWC received a payment of $750,000 from a client for a product to be delivered in November 2020. Under the tax law, that payment is taxable when received, not when the product is delivered.

Your Assignment: Calculate:

1. Income tax expense (GAAP).

2. Income taxes currently payable.

3. Deferred income taxes resulting from this year’s operations.

Be sure to show your work, I give partial credit (full credit, too, of course), but I must be able to see how you calculated amounts used in your answer

PROBLEM 2-2Merger and Consolidation, Goodwill Impairment Stockholders of Acme Company, Baltic Company, and Colt Company are considering alternative arrangementsfor a business combination. Balance sheets and the fair values of each company’s assets on October 1, 2014, wereas follows:

AcmeBalticColtAssets$3,900,000$7,500,000$950,000Liabilities$2,030,000$2,200,000$260,000Common stock, $20 par value2,000,0001,800,000540,000Other contributed capital—0—600,000190,000Retained earnings (deficit)(130,000)2,900,000(40,000)Total equities$3,900,000$7,500,000$950,000Fair values of assets$4,200,000$9,000,000$1,300,000

Acme Company shares have a fair value of $50. A fair (market) price is not available for shares of the othercompanies because they are closely held. Fair values of liabilities equal book values.

Required

:A.Prepare a balance sheet for the business combination. Assume the following: Acme Company acquires all theassets and assumes all the liabilities of Baltic and Colt Companies by issuing in exchange 140,000 shares ofits common stock to Baltic Company and 40,000 shares of its common stock to Colt Company.

B.Assume, further, that the acquisition was consummated on October 1, 2014, as described above. However, bythe end of 2015, Acme was concerned that the fair values of one or both of the acquired units had deteriorated.To test for impairment, Acme decided to measure goodwill impairment using the present value of future cashflows to estimate the fair value of the reporting units (Baltic and Colt). Acme accumulated the following data:

Carrying Value ofFair ValueYearPresent Value Identifiable Identifiable 2015 of Future Cash FlowsNet Assets*Net AssetsBaltic$6,500,000$6,340,000$6,350,000Colt$1,900,0001,200,0001,000,000

Prepare the journal entry, if needed, to record goodwill impairment at December 31, 2015.

READREAD THE ARTICLE BELOWBELOW. FROM THE WALL STREET.

describe all relevant informationinformation. telling the main thing you take away from the articlearticle and how it applies to globalization.

HANGZHOU, China -- When Michelle Xian wandered into one of the fast-food restaurants at a shopping mall here on a recent weekday, she didn't realize it was a KFC.

The modern décor featured an open kitchen and hanging plants, and the menu included tuna-and-pesto paninis and quinoa-and-corn salads. Customers were busy placing orders via smartphone, using QR codes printed on tables, or through a facial-recognition system that matches their images to their Alipay digital wallets.

"I don't normally go to KFC because it's not that healthy," said Ms. Xian, 30 years old, who ordered a chicken sandwich before being told where she was. "This is more aligned with new trends."

The KFC concept store, known as KPRO, is a testing ground for owner Yum China Holdings as it tries to capture a new audience and drive growth in the wake of its spinoff from U.S. parent Yum Brands Inc. a year ago last week. In a strategic break from its American counterpart, which is going back to finger-lickin' basics in the U.S., Yum China is pushing healthier offerings and technology.

Since the spinoff, China's biggest fast-food chain, with more than 7,700 KFC and Pizza Hut stores, has bought a controlling stake in an online food-delivery company, partnered with China's most-popular digital wallet service and improved its smartphone apps.

Yum China's 63-year-old chief executive, Muktesh "Micky" Pant, concedes he was skeptical of the emphasis on apps at first, telling his team they were too complicated.

"They very politely told me to just hang on, and I'm glad I didn't interfere," he said in a recent interview. "People have far more apps on their phones, and they are able to navigate them effectively."

Mobile payments at Yum China's restaurants represented 45% of sales in the quarter ended Aug. 31, up from 17% in all of 2016. Delivery orders, most of which come from online apps, were 14% of sales in the same period, up from 10% last year. Its two-year-old loyalty program, meanwhile, has become one of the largest in the world, with more than 127 million members -- dwarfing industry leader Panera Bread Co. in the U.S., which has about 25 million members.

Net income in the first eight months of this year rose 19% over the same period a year earlier, while system sales, which include revenue from franchises and joint ventures, grew 10% in the latest quarter.

"To the U.S. investor, the numbers look meteoric," said Sara Senatore, an analyst at Sanford Bernstein. Shares in Yum China are up more than 65% since the company was listed on the New York Stock Exchange in November 2016.

"But Yum, broadly speaking, is holding its own," she added, keeping pace with Chinese chain restaurant sales.

One not-so-bright spot for Yum China is Pizza Hut. Sales at its stores open at least a year were flat in the most recent quarter, compared with 7% sales growth at KFC.

Yum Brands was the first major Western fast-food company to enter China, beating McDonald's Corp. by three years when it opened a KFC near Tiananmen Square in 1987. Its long success was dimmed in recent years by food-safety scares and stronger competition, leading the parent company to spin it off and instead collect a percentage of sales.

"Food safety and nutrition is a greater consideration for Chinese consumers, while speed of service and authenticity is more important to U.S. consumers," said Morningstar analyst R.J. Hottovy in an email. Technology also figures heavily in Yum China's strategy. The company has partnered with Alibaba Group Holding Ltd. affiliate Ant Financial to offer its "smile to pay" system at the KPRO in Hangzhou, Alibaba's headquarters city.

Customers go to a self-serve kiosk to choose items on a video screen, then pay by looking at a camera, provided they've enabled facial-recognition on their Alipay app. For security, they must also enter their phone number.

Explain Reliance ltd succinctly.I bought shares of Reliance on 08/07/2015 for Rs900/ and sold it on 08/07/2020 for Rs 1812/-.Dividend received from 2015-16 was 6% , (20016-17)- 7%,(2017-18)-8%, (2018-19)-8%, (2019-2020)-6.5%.The face value of shares of Reliance is Rs100/-.Dividends received are invested every year in Bank Saving account at 4%.Find out the Discounted Cash flows over the time 2015-16 to 2019-20 and also for 2020 when shares are sold.Also determine IRR and average Return on investment.

The following information is available from ABC co.'s inventory records for March 2020.

Instructions: Compute the costs of goods sold for March 2020 using the following methods.

a) FIFO with perpetual inventory.

b) Weighted average. (Periodic system).

c) Moving average. (Perpetual system).

d) LIFO with periodic inventory.

e) LIFO with perpetual inventory.

Suppose IQ scores were obtained from randomly selected

twinstwins.

For

2020

such pairs of​ people, the linear correlation coefficient is

0.8670.867

and the equation of the regression line is

ModifyingAbove y with caret equals 5.44 plus 0.93 xy=5.44+0.93x​,

where x represents the IQ score of the

twin born secondtwin born second.

​Also, the

2020

x values have a mean of

96.2696.26

and the

2020

y values have a mean of

94.9594.95.

What is the best predicted IQ of the

twin born firsttwin born first​,

given that the

twin born secondtwin born second

has an IQ of

9494​?

Use a significance level of 0.05

Sunland Co. began operations on January 2, 2020. It employs 17 people who work 8-hour days. Each employee earns 10 paid vacation days annually. Vacation days may be taken after January 10 of the year following the year in which they are earned. The average hourly wage rate was $20 in 2020 and $21.75 in 2021. The average vacation days used by each employee in 2021 was 9. Sunland Co. accrues the cost of compensated absences at rates of pay in effect when earned.

Prepare journal entries to record the transactions related to paid vacation days during 2020 and 2021

On January 1, 2020, Castaway Corp. issued 5,000 shares of preferred stock ($15 par value) at $45 per share. Each share of preferred stock is redeemable at the option of the stockholder at $45 per share. On September 1, 2020, preferred shareholders holding 1,000 shares of preferred stock redeemed their stock.

The entry recorded by Castaway Corp. on January 1, 2020, would not include the following:

On July 1, 2018, Kirby, Inc. issued $3,000,000, 6%, 5-year bonds at a price of 98. Interest is payable semiannually on January 1 and July 1. The bonds are callable at 102. Kirby uses straight-line amortization. On January 1, 2020, Kirby paid interest and recorded amortization on all of the bonds, and purchased the entire issue at the call price. Prepare journal entries to record: The issue of the bonds on July 1, 2018. The payment of interest and amortization of any discount or premium on January 1, 2019, July 1, 2019, and January 1, 2020 (ignore accrual entries). The repurchase of the bonds on January 1, 2020.

On April 1, 2019 Garr Co. issued $4,800,000 of 5%, 5-year convertible bonds at a price of 102. The bonds pay interest on April 1 and October 1. Bond premium is amortized each interest payment period on a straight-line basis.

On April 1, 2020, all of these bonds were converted into 20,000 shares of $5 par common stock.

a) Prepare the entry to record the original issuance of the convertible bonds.

b) Prepare the entries to record the interest payment and premium amortization at October 1, 2019 and April 1, 2020.

c) Prepare the entry to record the conversion on April 1, 2020.