hw due 020913 by 10pm

homework_due_friday_020913_by_10pm.docx

Home >Business & Finance homework help >Accounting homework help >hw due 020913 by 10pm

"Life Insurance in Africa" Please respond to the following:

· Explain what is driving the rise of life insurance in Kenya. Identify and then discuss the challenges, along with the type of journal entry an insurance company should make to account for a whole life policy, where part of the premium goes to investment.

Career Choices" Please respond to the following:

· review the requirements for each of the three certifications to determine which you are best suited for and state why.

On December 21, 2012, Zurich Company provided you with the following information regarding its trading securities.

December 31, 2012
Investments (Trading)	Cost	Fair Value	Unrealized Gain (Loss)
Stargate Corp. stock	$21,890	$20,890	$(1,000	)
Carolina Co. stock	10,440	9,440	(1,000	)
Vectorman Co. stock	21,890	22,430	540
Total of portfolio	$54,220	$52,760	(1,460	)
Previous fair value adjustment balance			0
Fair value adjustment—Cr.			$(1,460	)

During 2013, Carolina Company stock was sold for $9,950. The fair value of the stock on December 31, 2013, was: Stargate Corp. stock—$21,160; Vectorman Co. stock—$22,270.

(a)		Prepare the adjusting journal entry needed on December 31, 2012.
(b)		Prepare the journal entry to record the sale of the Carolina Company stock during 2013.
(c)		Prepare the adjusting journal entry needed on December 31, 2013.

(Credit account titles are automatically indented when amount is entered. Do not indent manually.)

No.

Account Titles and Explanation

Debit

Credit

(a)

(b)

(c)

Securities

Cost

Fair Value

Unrealized Gain (Loss)

Stargate Corp. stock

$21,890

$21,160

$(730

)

Vectorman Co. stock

21,890

22,270

380

Total of portfolio

$43,780

$43,430

(350

)

Previous fair value adjustment balance—Cr.

(1,460

)

Fair value adjustment—Dr.

$1,110

Top of Form

The following facts relate to Alschuler Corporation.

1.		Deferred tax liability, January 1, 2012, $53,280.
2.		Deferred tax asset, January 1, 2012, $0.
3.		Taxable income for 2012, $153,180.
4.		Pretax financial income for 2012, $222,000.
5.		Cumulative temporary difference at December 31, 2012, giving rise to future taxable amounts, $293,040.
6.		Cumulative temporary difference at December 31, 2012, giving rise to future deductible amounts, $46,620.
7.		Tax rate for all years, 30%.
8.		The company is expected to operate profitably in the future.

(a)

Compute income taxes payable for 2012.

Income taxes payable	$
Taxable income	$153,180
Enacted tax rate	30	%
Income taxes payable	$45,954

Click here if you would like to Show Work for this question

(b)

The parts of this question must be completed in order. This part will be available when you complete the part above.

(c)

The parts of this question must be completed in order. This part will be available when you complete the part above.

Bottom of Form

Latoya Company provides the following selected information related to its defined benefit pension plan for 2012.

Pension asset/liability (January 1)	$34,860	Cr.
Accumulated benefit obligation (December 31)	402,070
Actual and expected return on plan assets	11,970
Contributions (funding) in 2012	157,550
Fair value of plan assets (December 31)	807,450
Settlement rate	10	%
Projected benefit obligation (January 1)	733,850
Service cost	80,745

(a) Compute pension expense.

Pension expense for 2012

Prepare the journal entry to record pension expense and the employer’s contribution to the pension plan in 2012. Preparation of a pension worksheet is not required. Benefits paid in 2012 were $61,060. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Account Titles and Explanation	Debit	Credit

(b) Indicate the pension-related amounts that would be reported in the company’s income statement and balance sheet for 2012.

Latoya Company Income Statement (Partial) For the year ended December 31, 2012.

		$

Latoya Company Balance Sheet (Partial) December 31, 2012

			$

(a) Computation of pension expense:

Service cost	$ 80,745
Interest cost ($733,850 x 10%)	73,385
Expected return on plan assets	(11,970	)
Pension expense for 2012	$142,160

(b) Pension liability = $34,860 – $15,390 = $19,470

Latoya Company Pension Worksheet

General Journal Entries

Memo Record Entries

Annual Pension Expense

Cash

Pension Asset/ Liability

Projected Benefit Obligation

Plan Assets

Balance, Jan. 1, 2012

34,860

Cr.

733,850

Cr.

698,990

Dr. *

Service cost

80,745

Dr.

80,745

Cr.

Interest cost

73,385

Dr.

73,385

Cr.

Actual return

11,970

Cr.

11,970

Dr.

Amortization of PSC

Contributions

157,550

Cr.

157,550

Dr.

Benefits

61,060

Dr.

61,060

Cr. **

Journal entry for 2012

142,160

Dr.

157,550

Cr.

15,390

Dr.

Balance, Dec. 31, 2012

19,470

Cr.

826,920

Cr.

807,450

Dr.

*$733,850 – $34,860 = $698,990 **$807,450 – ($698,990 + $11,970 + $157,550) = $61,060

Recognition of Profit, Percentage-of-Completion)

In 2012 Gurney Construction Company agreed to construct an apartment building at a price of $1,500,000. The information relating to the costs and billings for this contract is shown below.

	2012	2013	2014
Cost incurred to date	$350,000		$750,000	$981,250
Estimated costs yet to be incurred	650,000		250,000	-0-
Customer billings to date	187,500		625,000	1,500,000
Collection of billings to date	150,000		400,000	1,175,000

(a)

Assuming that the percentage-of-completion method is used.

(1)

Compute the amount of gross profit to be recognized in 2012 and 2013.

	2012	2013
Gross profit recognized	$	$

(2)

Prepare journal entries for 2013.

Description/Account	Debit	Credit

Materials, Cash, Payables, etc.


Cash

Construction Expense

(b)

For 2013, show how the details related to this construction contract would be disclosed on the balance sheet and on the income statement.

Income Statement (2013)
	$

Balance Sheet (12/31/13)

	$
	$
(a) (1)	Gross profit recognized

2012	2013
$175,000	$200,000

Gross profit recognized in 2012:
Contract price		$1,500,000
Costs:
Costs to date	$350,000
Estimated additional costs	650,000	1,000,000
Total estimated profit		500,000
Percentage completion to date
($350,000/$1,000,000)		35%
Gross profit recognized in 2012		$175,000

Gross profit recognized in 2013:
Contract price		$1,500,000
Costs:
Costs to date	$750,000
Estimated additional costs	250,000	1,000,000
Total estimated profit		500,000
Percentage completion to date
($750,000/$1,000,000)		75%
Total Gross profit recognized		375,000
Less: Gross profit recognized in 2012		175,000
Gross profit recognized in 2013		$200,000

(2)	Journal entries for 2013.

Description/Account	Debit	Credit
Construction in Process ($750,000 - $350,000)	400,000
Materials, Cash, Payables, etc.		400,000
Accounts Receivable ($625,000 - $187,500)	437,500
Billings on Construction in Process		437,500
Cash ($400,000 - $150,000)	250,000
Accounts Receivable		250,000
Construction Expense	400,000
Construction in Process	200,000
Revenues from long-term Contract		*600,000

* 1,500,000 × [($750,000 – $350,000) ÷ $1,000,000]

(b)

Income Statement (2013)
Gross profit on long-term construction project	$200,000

Balance Sheet (12/31/13)
Current assets:
Receivables- construction in process	* $225,000
Inventories-construction in process totaling	$500,000
($1,125,000 ** less billings of $625,000)

* $225,000 = $625,000 – $400,000

**Total cost to date	$750,000
2012 Gross profit	175,000
2013 Gross profit	200,000
	$1,125,000

"AICPA" Please respond to the following:

· assume that you are a practicing CPA working in a public accounting firm. Discuss how a membership to the AICPA would help you professionally.

· Identify other professional accounting organizations and explain how each may help you professionally.

The board of directors of Oksana Corporation is considering whether or not it should instruct the accounting department to change from a first-in, first-out (FIFO) basis of pricing inventories to a last-in, first-out (LIFO) basis. The following information is available.

Sales	21,600	units	@	$61
Inventory, January 1	6,210	units	@	24
Purchases	6,810	units	@	27
	10,800	units	@	30
	7,660	units	@	37
Inventory, December 31	9,880	units	@	?
Operating expenses	$243,600

Prepare a condensed income statement for the year on both bases for comparative purposes.

Oksana Corporation Condensed Income Statement For the year ended December 31
		First-in, first-out		Last-in, first-out
				$			$
:
		$				$






				$			$
Purchases
	6,810	x	$27	=	$183,870
	10,800	x	$30	=	324,000
	7,660	x	$37	=	283,420
					$791,290

Computation of inventory, Dec. 31:
First-in, first-out:
	7,660 units	x	$37	=	$283,420
	2,220 units	x	$30	=	66,600
					$350,020

Last-in, first-out:
	6,210 units	x	$24	=	$149,040
	3,670 units	x	$27	=	99,090
					$248,130

Sedato Company follows the practice of pricing its inventory at the lower-of-cost-or-market, on an individual-item basis.

Item No.	Quantity	Cost per Unit	Cost to Replace	Estimated Selling Price	Cost of Completion and Disposal	Normal Profit
1320	1,700	$5.25	$4.92	$7.38	$0.57	$2.05
1333	1,400	4.43	3.77	5.58	0.82	0.82
1426	1,300	7.38	6.07	8.20	0.66	1.64
1437	1,500	5.90	5.08	5.25	0.74	1.48
1510	1,200	3.69	3.28	5.33	1.31	0.98
1522	1,000	4.92	4.43	6.40	0.66	0.82
1573	3,500	2.95	2.62	4.10	1.23	0.82
1626	1,500	7.71	8.53	9.84	0.82	1.64

From the information above, determine the amount of Sedato Company’s inventory.

The amount of Sedato Company’s inventory	$
Item No.	Cost per Unit	Replacement Cost	Net Realizable Value		Net Real. Value Less Normal Profit		Designated Market Value	LCM	Quantity	Final Inventory Value
1320	$5.25	$4.92	$6.81	*		$4.76	**	$4.92	$4.92	1,700	$ 8,364
1333	4.43	3.77	4.76			3.94		3.94	3.94	1,400	5,516
1426	7.38	6.07	7.54			5.90		6.07	6.07	1,300	7,891
1437	5.90	5.08	4.51			3.03		4.51	4.51	1,500	6,765
1510	3.69	3.28	4.02			3.04		3.28	3.28	1,200	3,936
1522	4.92	4.43	5.74			4.92		4.92	4.92	1,000	4,920
1573	2.95	2.62	2.87			2.05		2.62	2.62	3,500	9,170
1626	7.71	8.53	9.02			7.38		8.53	7.71	1,500	11,565
											$58,127

*$7.38 – $0.57 = $6.81. **$6.81 – $2.05 = $4.76.

On March 10, 2014, No Doubt Company sells equipment that it purchased for $597,600 on August 20, 2007. It was originally estimated that the equipment would have a life of 12 years and a salvage value of $52,290 at the end of that time, and depreciation has been computed on that basis. The company uses the straight-line method of depreciation. Compute the depreciation charge on this equipment for 2007, for 2014, and the total charge for the period from 2008 to 2013, inclusive, under each of the six following assumptions with respect to partial periods. (Round answers to 0 decimal places, e.g. $45,892.)

		2007	2008-2013 Inclusive	2014
(1)	Depreciation is computed for the exact period of time during which the asset is owned. (Use 365 days for the base.)	$	$	$
(2)	Depreciation is computed for the full year on the January 1 balance in the asset account.	$	$	$
(3)	Depreciation is computed for the full year on the December 31 balance in the asset account.	$	$	$
(4)	Depreciation for one-half year is charged on plant assets acquired or disposed of during the year.	$	$	$
(5)	Depreciation is computed on additions from the beginning of the month following acquisition and on disposals to the beginning of the month following disposal.	$	$	$
(6)	Depreciation is computed for a full period on all assets in use for over one-half year, and no depreciation is charged on assets in use for less than one-half year.	$	$	$
			2008–2013
		2007	Incl.	2014	Total
(1)	$597,600 – $52,290 = $545,310
	$545,310 ÷ 12 = $45,443
	per yr. ($124.50 per day) 133*/365 of $45,443 =	$16,559
	2008–2013 Include. (6 x $45,443)		$272,658
	68/365 of $45,443 =			$8,466	$297,683
(2)		0	$272,658	$45,443	318,101
(3)		$45,443	$272,658	0	318,101
(4)		$22,722	$272,658	$22,722	318,101
(5)	4/12 of $45,443	$15,148
	2008–2013 Inc.		$272,658
	3/12 of $45,443			$11,361	299,167
(6)		0	$272,658	0	272,658

*(11 + 30 + 31 + 30 + 31) = 133

Santana Company exchanged equipment used in its manufacturing operations plus $2,978 in cash for similar equipment used in the operations of Delaware Company. The following information pertains to the exchange.

	Santana Co.	Delaware Co.
Equipment (cost)	$41,692	$41,692
Accumulated depreciation	28,291	14,890
Fair value of equipment	20,102	23,080
Cash given up	2,978

(a) Prepare the journal entries to record the exchange on the books of both companies. Assume that the exchange lacks commercial substance. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

No.	Account Titles and Explanation	Debit	Credit
(a)	Santana Company:




(b)	Delaware Company:

(b) Prepare the journal entries to record the exchange on the books of both companies. Assume that the exchange has commercial substance. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

No.	Account Titles and Explanation	Debit	Credit
(a)	Santana Company





(b)	Delaware Company

(a)

	Valuation of equipment

	Book value of equipment given	$13,401
	Cash paid	2,978
	New equipment	$16,379

OR

	Fair value received	$23,080
	Less: Gain deferred	6,701	*
	New equipment	$16,379

*	Fair value of old equipment	$20,102
	Book value of old equipment	(13,401	)
	Gain on disposal of equipment	$6,701

Computation of loss:
Book value of old equipment		$26,802
Fair value of old equipment		23,080
Loss on disposal of equipment		$3,722

(b)

Cost of new equipment:
Cash paid		$2,978
Fair value of old equipment		20,102
Cost of new equipment		$23,080

Computation of gain on disposal of equipment:
Fair value of old equipment		$20,102
Less: Book value of old equipment ($41,692 – $28,291)	=	13,401
Gain on disposal of equipment		$6,701

Cost of new equipment:
Fair value of equipment		$23,080
Less: Cash received		2,978
Cost of new equipment		$20,102

Computation of loss on disposal of equipment:
Book value of old equipment ($41,692 – $14,890)	=	$26,802
Less: Fair value of equipment		23,080
Loss on disposal of equipmentbLoss on disposal of equipment		$3,722