At December 31, 2020, the available-for-sale debt portfolio for
Cullumber, Inc. is as follows.
|
Security |
Cost |
Fair Value |
Unrealized |
||||
| A | $17,100 | $14,600 | $(2,500 | ) | |||
| B | 12,500 | 15,100 | 2,600 | ||||
| C | 22,500 | 26,000 | 3,500 | ||||
| Total | $52,100 | $55,700 | 3,600 | ||||
| Previous fair value adjustment balance—Dr. | 400 | ||||||
| Fair value adjustment—Dr. | $3,200 | ||||||
On January 20, 2021, Cullumber, Inc. sold security A for $14,700.
The sale proceeds are net of brokerage fees.
Cullumber, Inc. reports net income in 2020 of $123,000 and in 2021
of $135,000. Total holding gains (including any realized holding
gain or loss) equal $40,000 in 2021.
Prepare a statement of comprehensive income for 2020, starting
with net income.
Prepare a statement of comprehensive income for 2021, starting with
net income.
In: Accounting
Two accountants, Yuan Tsui and Sergio Aragon, are arguing about
the merits of presenting an income statement in the multiple-step
versus the single-step format. The discussion involves the
following 2020 information for P. Bride Company (in
thousands):
| Administrative expenses | Selling expenses | |||||||
| Officers’ salaries | $4,000 | Delivery | $2,050 | |||||
| Depreciation of office furniture and equipment | 3,060 | Sales commissions | 67,640 | |||||
| Cost of goods sold | 57,190 | Depreciation of sales equipment | 6,260 | |||||
| Rental revenue | 14,330 | Sales revenue | 308,900 | |||||
| Interest expense | 1,730 | |||||||
Common shares outstanding for 2020 total 30,000 (in thousands).
Income tax for the year was $18,130.
Prepare an income statement for the year ended December 31, 2020, using the multiple-step format, showing expenses by function. Include calculation of EPS.
In: Accounting
In 2018, the Westgate Construction Company entered into a
contract to construct a road for Santa Clara County for
$10,000,000. The road was completed in 2020. Information related to
the contract is as follows:
|
2018 |
2019 |
2020 |
|||||||
|
Cost incurred during the year |
$ |
2,580,000 |
$ |
4,042,000 |
$ |
2,175,800 |
|||
|
Estimated costs to complete as of year-end |
6,020,000 |
1,978,000 |
0 |
||||||
|
Billings during the year |
2,060,000 |
4,562,000 |
3,378,000 |
||||||
|
Cash collections during the year |
1,830,000 |
4,200,000 |
3,970,000 |
||||||
Westgate recognizes revenue over time according to percentage of
completion.
Required:
5. Calculate the amount of revenue and gross
profit (loss) to be recognized in each of the three years assuming
the following costs incurred and costs to complete
information.
|
2018 |
2019 |
2020 |
|||||||
|
Cost incurred during the year |
$ |
2,580,000 |
$ |
3,830,000 |
$ |
3,990,000 |
|||
|
Estimated costs to complete as of year-end |
6,020,000 |
4,160,000 |
0 |
||||||
In: Accounting
Sheffield Corp. purchased a machine on July 1, 2020, for $30,975. Sheffield paid $210 in title fees and a legal fee of $175 related to the machine. In addition, Sheffield paid $590 in shipping charges for delivery, and $450 to a local contractor to build and wire a platform for the machine on the plant floor. The machine has an estimated useful life of 10 years, a total expected life of 12 years, a residual value of $6,300, and no salvage value. Sheffield uses straight-line depreciation.
Calculate the 2020 depreciation expense if Sheffield prepares financial statements in accordance with IFRS.
| Depreciation expense | $enter the Depreciation expense in dollars |
eTextbook and Media
Calculate the 2020 depreciation expense if Sheffield prepares financial statements in accordance with ASPE.
| Depreciation expense | $enter the Depreciation expense in dollars |
In: Accounting
Assume that today is December 31, 2019, and that the following information applies to Abner Airlines:
After-tax operating income [EBIT(1 - T)] for 2020 is expected to
be $450 million.
The depreciation expense for 2020 is expected to be $200
million.
The capital expenditures for 2020 are expected to be $350
million.
No change is expected in net operating working capital.
The free cash flow is expected to grow at a constant rate of 4% per
year.
The required return on equity is 16%.
The WACC is 9%.
The firm has $190 million of non-operating assets.
The market value of the company's debt is $4.113 billion.
120 million shares of stock are outstanding.
Using the corporate valuation model approach, what should be the company's stock price today? Do not round intermediate calculations. Round your answer to the nearest cent.
In: Finance
Assume that today is December 31, 2019, and that the following information applies to Abner Airlines: After-tax operating income [EBIT(1 - T)] for 2020 is expected to be $650 million. The depreciation expense for 2020 is expected to be $110 million. The capital expenditures for 2020 are expected to be $275 million. No change is expected in net operating working capital. The free cash flow is expected to grow at a constant rate of 6% per year. The required return on equity is 16%. The WACC is 9%. The firm has $201 million of non-operating assets. The market value of the company's debt is $5.596 billion. 110 million shares of stock are outstanding. Using the corporate valuation model approach, what should be the company's stock price today? Do not round intermediate calculations. Round your answer to the nearest cent. $
In: Finance
Assume that today is December 31, 2019, and that the following information applies to Abner Airlines: After-tax operating income [EBIT(1 - T)] for 2020 is expected to be $400 million. The depreciation expense for 2020 is expected to be $190 million. The capital expenditures for 2020 are expected to be $350 million. No change is expected in net operating working capital. The free cash flow is expected to grow at a constant rate of 7% per year. The required return on equity is 15%. The WACC is 9%. The firm has $199 million of non-operating assets. The market value of the company's debt is $2.440 billion. 90 million shares of stock are outstanding. Using the corporate valuation model approach, what should be the company's stock price today? Do not round intermediate calculations. Round your answer to the nearest cent
In: Finance
a. How much of the loss may C deduct on his 2020 return?
b. What is C’s basis in the XYZ Company stock that was purchased on January 8, 2021?
In: Accounting
Bridgeport Corp. sponsors a defined benefit pension plan for its employees. On January 1, 2020, the following balances relate to this plan.
| Plan assets | $469,800 | ||
| Projected benefit obligation | 607,000 | ||
| Pension asset/liability | 137,200 | ||
| Accumulated OCI (PSC) | 97,100 | Dr. |
As a result of the operation of the plan during 2020, the following
additional data are provided by the actuary.
| Service cost | $91,100 | |
| Settlement rate, 8% | ||
| Actual return on plan assets | 54,400 | |
| Amortization of prior service cost | 19,100 | |
| Expected return on plan assets | 51,600 | |
| Unexpected loss from change in projected benefit
obligation, due to change in actuarial predictions |
79,700 | |
| Contributions | 99,500 | |
| Benefits paid retirees | 85,800 |
Using the data above, compute pension expense for Bridgeport Corp. for the year 2020 by preparing a pension worksheet.
In: Accounting
C purchase XYZ Company stock several years ago for $50,000. Unfortunately, the stock had declined in value. Therefore, C decided to sell the stock on December 15, 2020 for $35,000, incurring a loss of ($15,000). C had other gains of $40,000 in 2020 and felt he would like to offset those gains with the loss on XYZ Company stock. However, after reading some very favorable news about XYZ Company in early January, 2021, C decided to buy back XYZ Company stock. So on January 8, 2021 C bought back the stock for $36,000.
How much of the loss may C deduct on his 2020 return?
What is C’s basis in the XYZ Company stock that was purchased on January 8, 2021?
In: Accounting