Exercise 20-16

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

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

Flint 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.)

Garda World Security Corporation has the following shares, taken from the equity section of its balance sheet dated December 31, 2020.

*All shares were issued during 2018.

During its first three years of operations, Garda World Security Corporation declared and paid total dividends as shown in the last column of the following schedule.

Required:
Part A
1. Calculate the total dividends paid in each year to the preferred and to the common shareholders.

2. Calculate the dividends paid per share to both the preferred and the common shares in 2020. (Round the final answers to 2 decimal places.)

Part B
1. Calculate the total dividends paid in each year to the preferred shares and to the common shareholders assuming preferred shares are cumulative.

2. Calculate the dividends paid per share to both the preferred and the common shares in 2020 assuming preferred shares are cumulative. (Round the final answers to 2 decimal places.)

At the end of the financial year 2019, Strong Tool Company anticipated its revenues, expenses, capital expenditures and changes in working capital over the next 3 years (2020-2022) to be as shown in the table below.

The company estimated the depreciation charges to be fixed at $15,000 every year. The firm has a tax rate of 28% and a cost of capital of 15%.

Requirement 1: You are required to estimate the free cashflow available to the firm (FCFF) for the period of 2020-2022. Calculate each of the missing values in the table below (there are 20 missing values in total).

Requirement 2 Free cash flows beyond year 3 are estimated to grow at an annual rate of 5%. Apply the growing perpetuity formula to estimate the terminal value of Strong Tool Company as of year 3. What is the value of the terminal value today?

Requirement 3 Strong Tool Company's current value of existing debt is ​$80,000. Estimate the value of the equity of the company by applying the free cash flow to the firm method.

2. working with databases and files in python

a) Write a function with prototype “def profound():” that will prompt the user to type something profound. It will then record the date and time using the “datetime” module and then append the date, time and profound line to a file called “profound.txt”. Do only one line per function call. Use a single write and f-string such that the file contents look like:

2020-10-27 11:20:22 -- Has eighteen letters does

2020-10-27 11:20:36 -- something profound

b) Write a function with prototype “def bestwords():” that will prompt the user to enter a line with some of the best words (separated by spaces). These will be converted to lower case and stored in a data base file (using the dbm and pickle modules) whose keys are a tuple of the current year, month and day (using the datetime module) and the “values” are a set of words collected on that day. Each new word should be checked against all previously-entered words (even those on other days) and it is not added if it already exists in the database. (Hint: I simply subtracted all previous sets of words from the current set, then added that new set to the one for the current day (if it already existed).

c) Write a function with prototype “def printbestwords():” that will simply open the database of best words and print the keys and values, sorted by the keys. Don’t forget to close the database on exit. Example output:

(2020, 10, 26) {'infantroopen', 'susbesdig'}

(2020, 10, 27) {'deligitimatize'}

(2020, 10, 28) {'transpants', 'resaption'}

Problem 21-06 (Part Level Submission)

Novak Leasing Company agrees to lease equipment to Splish Corporation on January 1, 2020. The following information relates to the lease agreement.
1. The term of the lease is 7 years with no renewal option, and the machinery has an estimated economic life of 9 years.

2.The cost of the machinery is $517,000, and the fair value of the asset on January 1, 2020, is $657,000

3.At the end of the lease term, the asset reverts to the lessor and has a guaranteed residual value of $55,000. Splish estimates that the expected residual value at the end of the lease term will be 55,000. Splish amortizes all of its leased equipment on a straight-line basis

4. The lease agreement requires equal annual rental payments, beginning on January 1, 2020

5.The collectibility of the lease payments is probable.

6.Novak desires a 10% rate of return on its investments. Splish’s incremental borrowing rate is 11%, and the lessor’s implicit rate is unknown.
(Assume the accounting period ends on December 31.)

A. Discuss the nature of this lease for both the lessee and the lessor.

-This is a finance lease for Splish

-This is a sales type lease for Novack

B. Calculate the amount of the annual rental payment required.

- Annual rental payment $117413

C. Compute the value of the lease liability to the lessee.

- Present value of minimum lease payments ????

D. Prepare the journal entries Splish would make in 2020 and 2021 related to the lease arrangement

E. Prepare the journal entries Novak would make in 2020 and 2021 related to the lease arrangement.

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.

Brighton Ltd has unadjusted trial balance as follows on 30 June 2020.

Additional information:

1. Depreciation on the motor vehicles is on the straight-line method with a useful life of 12 years and scrap value of $4,800.
2. Depreciation on the equipment is on the reducing-balance method with a depreciation rate of 20% and scrap value of $300.
3. Expired insurance amounted to $4,500.
4. A physical stocktake has determined that office supplies on hand amounted to $700.
5. The balance in the unearned rental revenue account includes $350 for services provided on 25 June 2020.
6. Salaries earned but not paid amounted to $2,500.
7. Accrued interest on the bank loan is $4,100.
8. Electricity expense for June of $275 has not been paid for or recorded at 30 June 2020.

Required:

(a) Prepare the necessary adjusting entries in the general journal for the year ended 30 June 2020. Narrations are not required.

(b) Prepare an income statement for the year ended 30 June 2020.

*Please upload the solution as soon as you can finish it. Thanks for your help

Canvas Corp. is a large construction company that reports under IFRS. They have recently signed a contract with Ontario Tech University to build an addition to the library. Canvas began work on the contract at the beginning of 2020. Contract information and estimates are as follows: Contract price ……………………………………………….. $ 2,000,000 Estimated costs Labour.................................................................................. $ 435,000 Materials and subcontracts ................................................. 765,000 Indirect costs........................................................................ 300,000 1,500,000 Estimated gross profit................................................................... $ 500,000 At the end of 2020, the following was the actual status of the contract: Progress Billings to date ......................... $ 1,115,000 Costs incurred to date: Labour.................................................................................. $ 207,000 Materials and subcontracts ................................................. 468,000 Indirect costs........................................................................ 75,000 Latest forecast of total costs of project (no change).................... $ 1,500,000 At the end of 2021, progress billings to date totalled $1,900,000 and costs incurred to date totalled $1,395,000 with a forecast of $155,000 remaining costs to complete. Cash collected was $980,000 during 2020 and $1,000,000 during 2021. Job is expected to be completed in 2022 Instructions a) Calculate the gross profit that would be reported on this contract for 2020 and 2021. b) Prepare all journal entries for 2020. c) Indicate the account(s) and the amount(s) that would be shown on Canvas’ statement of d) Assume all the same facts, except that the forecast of remaining costs in 2021 is not $155,000, but $555,000. How much income (loss) would Canvas then report for the year 2021? e) Assume you are a shareholder of Canvas Corp. Do you think that recognizing revenue over time rather than at a point in time makes the financial statements more useful? Explain your answer.

Exercise 8-19 (Part Level Submission)

Waterway Corporation began operations on December 1, 2019. The only inventory transaction in 2019 was the purchase of inventory on December 10, 2019, at a cost of $25 per unit. None of this inventory was sold in 2019. Relevant information is as follows.

During the year 2020, the following purchases and sales were made.

The company uses the periodic inventory method.

(a1) Calculate average-cost per unit. (Round answer to 2 decimal places, e.e. 2.76.)

(a2) Determine ending inventory under (1) specific identification, (2) FIFO, (3) LIFO, and (4) average-cost. (Round answer to 0 decimal places, e.g. 2,760.)

(b1) Calculate price index. (Round answer to 4 decimal places, e.g. 2.7600.)

(b2) Determine ending inventory using dollar-value LIFO. Assume that the December 2, 2020, purchase cost is the current cost of inventory.(Hint: The beginning inventory is the base layer priced at $25 per unit.) (Round answer to 0 decimal places, e.g. 2,760.)