Larkspur Company began operations on January 1, 2019, adopting the conventional retail inventory system. None of the company’s merchandise was marked down in 2019 and, because there was no beginning inventory, its ending inventory for 2019 of $38,000 would have been the same under either the conventional retail system or the LIFO retail system.

On December 31, 2020, the store management considers adopting the LIFO retail system and desires to know how the December 31, 2020, inventory would appear under both systems. All pertinent data regarding purchases, sales, markups, and markdowns are shown below. There has been no change in the price level.

Cost

Retail

Inventory, Jan. 1, 2020

$38,000$59,600

Markdowns (net)

12,800

Markups (net)

22,000

Purchases (net)

129,900175,400

Sales (net)

166,400

Determine the cost of the 2020 ending inventory under both (a) the conventional retail method and (b) the LIFO retail method. (Round ratios for computational purposes to 2 decimal place, e.g. 78.72% and final answers to 0 decimal places, e.g. 28,987.)

Waterway Construction Company has entered into a contract beginning January 1, 2020, to build a parking complex. It has been estimated that the complex will cost $600,000 and will take 3 years to construct. The complex will be billed to the purchasing company at $901,000. The following data pertain to the construction period.

(a) Using the percentage-of-completion method, compute the estimated gross profit that would be recognized during each year of the construction period. (If answer is 0, please enter 0. Do not leave any fields blank.)

(b) Using the completed-contract method, compute the estimated gross profit that would be recognized during each year of the construction period. (If answer is 0, please enter 0. Do not leave any fields blank.)

[Javascript] Create a function(returnObjectFromId(case, ...idNum)) to return the case Object(s) for a given idNum, or list of idNums.

Calling with a single `idNum` value should return the case Object, and return NULL if an id value that's unknown is passed

returnObjectFromId(case, 84838) would return the Object in the cases Array with

an 'idNumber' of id, and use the .find() method of the cases Array to locate items by idNumber.

returnObjectFromId(cases, -23298312) would return null.

returnObjectFromId(cases, 161020, 161021) would return an Array of case Objects

with two elements, matching the id values. We don't add anything to the returned Array,

if any of the ids in the list are unknown.

As an example, the following function would return an Array of 2 case Objects, ignoring the unknown

id(-23298312):

returnObjectFromId(cases, 231321, 241249, -23298312) would return an Array of 2 cases.

example of case object:

case = {

"idNumber": 112319,

"Reported Date": "2020-08-15",

"Episode Date": "2020-07-12",

},

{

"idNumber": 132421,

"Reported Date": "2020-08-12",

"Episode Date": "2020-07-19",

},

...etc

LCI Cable Company grants 1.5 million performance stock options to key executives at January 1, 2018. The options entitle executives to receive 1.5 million of LCI $1 par common shares, subject to the achievement of specific financial goals over the next four years. Attainment of these goals is considered probable initially and throughout the service period. The options have a current fair value of $20 per option.

Required:
1. & 2. Record the necessary journal entries.
3. Suppose at the beginning of 2020, LCI decided it is not probable that the performance objectives will be met. Prepare the appropriate entries on December 31 of 2020 and 2021.

1. Record the grant of 1.5 million performance stock options when the options have a fair value of $20 per option as on January 01, 2018.

2. Record the entry that would be made on December 31 of 2018, 2019, 2020 and 2021.

3a. Prepare any necessary entry on December 31, 2020 assuming that it is not probable that the performance objectives will be met.

3b. Prepare any necessary entry on December 31, 2021 assuming that it is not probable that the performance objectives will be met

Amanah Berhad is a furniture manufacturer which is based in Pasir Gudang. The following trial balance was taken from the books of Amanah Berhad on 31 December 2020.

Additional information:

(i)           Insurance expired during the year, RM2,000.

(ii)       Estimated bad debts, 5% of the accounts receivable.

(iii)      Depreciation on equipment, 10% per year.

(iv)      Interest at 5% is receivable on the note for one full year.

(v)       Rent paid in advance, RM5,400 (originally charged to expense).

(vi)      Accrued salaries and wages at December 31, RM5,800.

(vii)     Advertising paid in advance, RM560 (originally charged to expense).

Required;

(a)       Prepare adjusting journal entries for the above items.

(b)       Prepare Income Statement of Amanah Berhad for the year ended 31 December 2020.

(c)          Prepare Statement of Financial Position of Amanah Berhad as at 31 December 2020.

PART A

Shania Twain Ltd pays its annual insurance premium in cash on 1 September each year.  The latest payment of $9,000 was on 1 September 2020 which was $600 more than the previous year.  All transactions are recorded in the general journal. Shania Twain Ltd has a December 31st year end.

Required:

Assuming Shania Twain Ltd uses the Asset approach to record the payment, prepare general journal entries (narrations are NOT required) required at:

1. 1 September 2020
2. 31 December 2020 (adjusting entry only; i.e. closing entry not required)

PART B

Why do we prepare closing entries at year end?

PART C

Shania Twain Ltd had Accounts Receivable of $215,000 and an Allowance for Doubtful Debts of $520 (Credit) at 31 December 2020.  A review of outstanding accounts indicated the need to immediately write off $700 of bad debts and to make a provision for Doubtful Debts for next year based on 3% of Adjusted Accounts Receivable.

Prepare the necessary general journal entries for the above information (narrations are NOT required).

PART D

Shania Twain Ltd had purchased equipment on 1 January 2020 at a cost of $200,000. The equipment had a useful life of 6 years and an estimated residual of $35,000.  The company decided to use the reducing balance method of depreciation at 30% per annum.

Calculate the depreciation and prepare the necessary journal entry for the year ended 31 December 2021.

Exercise 12-04

Presented below is selected information for Cullumber Company.

Answer the questions asked about each of the factual situations. (Do not leave any answer field blank. Enter 0 for amounts.)

1. Cullumber purchased a patent from Vania Co. for $1,340,000 on January 1, 2018. The patent is being amortized over its remaining legal life of 10 years, expiring on January 1, 2028. During 2020, Cullumber determined that the economic benefits of the patent would not last longer than 6 years from the date of acquisition. What amount should be reported in the balance sheet for the patent, net of accumulated amortization, at December 31, 2020?

2. Cullumber bought a franchise from Alexander Co. on January 1, 2019, for $3,150,000. The carrying amount of the franchise on Alexander’s books on January 1, 2019, was $315,000. The franchise agreement had an estimated useful life of 30 years. Because Cullumber must enter a competitive bidding at the end of 2021, it is unlikely that the franchise will be retained beyond 2028. What amount should be amortized for the year ended December 31, 2020?

3. On January 1, 2020, Cullumber incurred organization costs of $257,500. What amount of organization expense should be reported in 2020?

The actuary for the pension plan of Ivanhoe Inc. calculated the following net gains and losses.

Other information about the company’s pension obligation and plan assets is as follows.

Ivanhoe Inc. has a stable labor force of 400 employees who are expected to receive benefits under the plan. The total service-years for all participating employees is 4,400. The beginning balance of accumulated OCI (G/L) is zero on January 1, 2020. The market-related value and the fair value of plan assets are the same for the 4-year period. Use the average remaining service life per employee as the basis for amortization.

Compute the minimum amount of accumulated OCI (G/L) amortized as a component of net periodic pension expense for each of the years 2020, 2021, 2022, and 2023. Apply the “corridor” approach in determining the amount to be amortized each year. (Round answers to 0 decimal places, e.g. 2,500.)

On March 10, 2020, Pharoah Company sold to Barr Hardware 160 tool sets at a price of $50 each (cost $30 per set) with terms of n/60, f.o.b. shipping point. Pharoah allows Barr to return any unused tool sets within 60 days of purchase. Pharoah estimates that (1) 10 sets will be returned, (2) the cost of recovering the products will be immaterial, and (3) the returned tools sets can be resold at a profit. On March 25, 2020, Barr returned 7 tool sets and received a credit to its account. Assume that instead of selling the tool sets on credit, that Pharoah sold them for cash.

(a)

Partially correct answer iconYour answer is partially correct.

Prepare journal entries for Pharoah to record (1) the sale on March 10, 2020, (2) the return on March 25, 2020, and (3) any adjusting entries required on March 31, 2020 (when Pharoah prepares financial statements). Pharoah believes the original estimate of returns is correct. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.)