Exercise 19-11

At the end of 2019, Concord Company has $180,300 of cumulative temporary differences that will result in reporting the following future taxable amounts.

2020 $60,400

2021 52,200

2022 38,700

2023 29,000

$180,300

Tax rates enacted as of the beginning of 2018 are: 2018 and 2019 40 %

2020 and 2021 30 %

2022 and later 25 %

Concord’s taxable income for 2019 is $321,800. Taxable income is expected in all future years.

(a) Prepare the journal entry for Concord to record income taxes payable, deferred income taxes, and income tax expense for 2019, assuming that there were no deferred taxes at the end of 2018. (Credit account titles are automatically indented when 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.)
(b) Prepare the journal entry for Concord to record income taxes payable, deferred income taxes, and income tax expense for 2019, assuming that there was a balance of $23,100 in a Deferred Tax Liability account at the end of 2018. (Credit account titles are automatically indented when 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.)

Delcon Incorporation is prepared to report the following income statement for the year
2019.
Sales 1,52,00,000
Less, operating cost 1,19,00,000
EBIT 33,00,000
Less, interest 3,00,000
Earning before tax 30,00,000
Les, Tax @ 40% 12,00,000
Net income 18,00,000Prior to reporting these income statements, the company wants to determine its annual
dividend. The company has 5,00,000 shares of stock outstanding and its stock trades at Rs
48 per share.
a. The company had a 40% dividend payout ratio in 2018. If the company wants to
maintain this payout ratio in 2019, what will be its per share dividend in 2019?
b. If the company maintains this 40% payout ratio, what will be the current yield of the
company's stock?
c. The company reported net income of Rs 1500,000 in 2018. Assume that the number of
shares outstanding has remained constant. What was the company’s per share dividend
in 2018?
d. As an alternative to maintain the same dividend payout ratio, the company is
considering maintaining the same dividend per share in 2019 that it paid in 2018. If it
chooses this policy, what will be the company's dividend payout ratio in 2019?
e. Does the dividend policy of the organization affect the price of the stock?

In your audit of Newman Company, you find that a physical inventory on December 31, 2019, showed merchandise with a cost of $399,450 was on hand at that date. You also discover the following items were all excluded from the $399,450.

1. Merchandise costing $52,310 shipped by a vendor f.o.b. shipping point on December 31, 2017, and received by Newman on January 5, 2018.

2. Merchandise costing $75,730 shipped by a vendor f.o.b. destination on December 30, 2017, and received by Newman on January 4, 2018.

3. Merchandise costing $42,890 which was shipped by Newman f.o.b. shipping point to a customer on December 29, 2017. The customer was scheduled to receive the merchandise on January 2, 2018.

4. Merchandise costing $39,580 which was shipped by Newman f.o.b. destination to a customer on December 31, 2017. The customer was expected to receive the merchandise on January 6, 2018.

5. Merchandise of $61,320 which is held by Newman on consignment. The consignor is the Max Suzuki Company.

For each of the items 1- 5, determine whether it should be Added In (A) or Ignored (ok as is) (I). For each of the above items place an A or an I beside the number below.

1. __________________ 2. __________________ 3. __________________ 4. __________________ 5. __________________

The following two tables are used in all the following questions. Thus, part of the following questions involve determining exactly what you need for each question. Please assume that for GDP calculations, only two things are produced in this economy: houses (a good) and dog walking (a service). Please ignore coffee for the GDP calculations. Also, assume that 2018 is the base year for GDP calculations. The base year for the CPI is not given.

Without making a calculation, which did you think increased more from 2018 to 2019 -- real or nominal GDP? Why?

Finally, for this and the following short-answer questions, please fully explain your answer and show all computations.

On January 1, 2018, Sledge had common stock of $220,000 and retained earnings of $360,000. During that year, Sledge reported sales of $230,000, cost of goods sold of $120,000, and operating expenses of $50,000.

On January 1, 2016, Percy, Inc., acquired 70 percent of Sledge's outstanding voting stock. At that date, $70,000 of the acquisition-date fair value was assigned to unrecorded contracts (with a 20-year life) and $30,000 to an undervalued building (with a 10-year remaining life).

In 2017, Sledge sold inventory costing $12,500 to Percy for $25,000. Of this merchandise, Percy continued to hold $4,000 at year-end. During 2018, Sledge transferred inventory costing $15,000 to Percy for $30,000. Percy still held half of these items at year-end.

On January 1, 2017, Percy sold equipment to Sledge for $17,000. This asset originally cost $26,000 but had a January 1, 2017, book value of $11,000. At the time of transfer, the equipment's remaining life was estimated to be five years.

Percy has properly applied the equity method to the investment in Sledge.

1. Prepare worksheet entries to consolidate these two companies as of December 31, 2018.
2. Compute the net income attributable to the noncontrolling interest for 2018.

On March 1, 2017, Shamrock Construction Company contracted to construct a factory building for Fabrik Manufacturing Inc. for a total contract price of $8,390,000. The building was completed by October 31, 2019. The annual contract costs incurred, estimated costs to complete the contract, and accumulated billings to Fabrik for 2017, 2018, and 2019 are given below: 2017 2018 2019 Contract costs incurred during the year $3,003,300 $2,179,700 $2,117,000 Estimated costs to complete the contract at 12/31 3,386,700 2,117,000 –0– Billings to Fabrik during the year 3,240,000 3,460,000 1,690,000

(a) Using the percentage-of-completion method, prepare schedules to compute the profit or loss to be recognized as a result of this contract for the years ended December 31, 2017, 2018, and 2019. (Ignore income taxes.) (If answer is 0, please enter 0. Do not leave any fields blank.)

(b) Using the completed-contract method, prepare schedules to compute the profit or loss to be recognized as a result of this contract for the years ended December 31, 2017, 2018, and 2019. (Ignore income taxes.) (If answer is 0, please enter 0. Do not leave any fields blank. Enter loss using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

I am happy to post this in two different posts! I just need the first few parts in order to ask the rest. If possible, please answer all

On January 1, 2018, Entity A issued 8% bonds dated January 1, 2018, with a face amount of $10 million. The bonds mature in 2022 (5 years). For bonds of similar risk and maturity, the market yield is 10%. Interest is paid semiannually on June 30 and December 31.

A. What was the issue price of the bonds?

B. Prepare the journal entry to record the bond issuance.

C. Prepare the journal entry to record interest on June 30, 2018, using the straight-line method.

D. Prepare the journal entry to record interest on December 31, 2018, assuming that Entity A had used the effective interest method from the inception. Prepare an amortization schedule similar to Illus. 14-6 on p. 776 to help.

E. Prepare a partial balance sheet showing the bonds at December 31, assuming that Entity A had used the effective interest method from the inception.

F. Why might a company utilize the straight-line method to amortize premium or discount? When is it permissible to do so?

Jokowi Bond Sdn Bhd (JBSB) produces a type of box which is sold for RM15 per unit. The normal annual production and sales for the boxes are 20,000 units.

The following data consist of costs incurred during the year ended 2018:

The management accountant of the company is proposing the following alternatives to increase sales for the year 2019 and to reduce the idle capacity:

• Reducing the selling price to RM12 per unit which would lead to an estimated increase in the sales volume by 15%.
• An increase in sales would result in an increase of direct labour cost per unit by 10%.
• Fixed manufacturing overhead   is also expected to increase to RM25,000 due to an aggressive advertising campaign planned to boost sales.

Required:

1. 1. Calculate the total variable cost per unit and total fixed expenses for the year 2018.
2. 2. Calculate break even unit and sales for 2018.             
   3. Calculate margin of safety in units and value for 2018.  
   4. Advise JBSB’s management on whether they should implement the proposal outlined above for the year 2019. (Show profit comparison).  

On March 1, 2018, Gold Examiner receives $149,000 from a local bank and promises to deliver 94 units of certified 1-oz. gold bars on a future date. The contract states that ownership passes to the bank when Gold Examiner delivers the products to Brink’s, a third-party carrier. In addition, Gold Examiner has agreed to provide a replacement shipment at no additional cost if the product is lost in transit. The stand-alone price of a gold bar is $1,410 per unit, and Gold Examiner estimates the stand-alone price of the replacement insurance service to be $90 per unit. Brink’s picked up the gold bars from Gold Examiner on March 30, and delivery to the bank occurred on April 1.

Required:
1. How many performance obligations are in this contract?
2. Prepare the journal entry Gold Examiner would record on March 1, March 30 and April 1.

(1Record the receipt of cash by Gold Examiner March 01, 2018,

2.Record any necessary entry when Brink's has picked up the gold bars from Gold Examiner March 30, 2018

3. Record any necessary entry upon delivery of the gold bars to the bank. April 01, 2018)