Wendy Marvel sold $260,000 of its inventory to Carla during 2021 for $400,000. Carla sold $300,000 of this merchandise in 2021 with the remainder to be disposed of during 2022. Assume Wendy Marvel owns 35% of Carla and has the ability to exert significant influence over Carla. What journal entry will be recorded at the end of 2021 to defer the recognition of the investor's share of the intra- entity gross profits?
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- Assume, for purposes of this question only, that Susan acquired 2,000 shares of Hawk Corporation stock for $80,000 on March 31, 2014. On March 1, 2023, she sells 125 shares for $3,750. On March 22, 2023, she purchases 135 shares of Hawk Corporation stock for $4,725. a. What is Susan’s realized gain or loss from the sale on March 1, 2023? b. What is Susan’s recognized gain or loss from the sale on March 1, 2023? c. What is Susan’s basis in the 135 shares purchased on March 22, 2023? d. When does Susan’s holding period begin for the 135 sharesDuring 2018, the following events occurred: 1. Addilional inventory was acquired during he year at a cost of P 354,000 and recprded using the perpetual inventory system. As of December 31, 2018, the partnership owedn70,800 to its suppliers. 2 In order to facilitate startup operations, the partnership borTowed P 500,000 from a bank on May 1, 2018. The borowing was evidenced by a 9% interest bearing note and interest is payable semi-annually. Interest payments due for 2018 are accordingly paid by the partnership. 3. Sales on account amounted to P1,829,000 with related cost of goods sold of P1,058,000. At December 31, 2018, customers owed the partnership P247,300. 4. Selling and general expenses, exduding depreciation and interest, amounted to P401 200. On December 31, 2018, P 73,160 of these expenses are unpaid. 5. The partnership pays a weekly salary of P 12,800 which is payable every Friday. December 31, 2018 falls on a Thursday and this accrual is not yet recorded in the partnership…9. Pez owns 30% of Rollo. In 2020, Pez sells inventory costing $100,000 to Rollo for $150,000. At December 31, 2020 $60,000 of this inventory was still held by Rollo and is sold in 2021. In 2021, Pez sells inventory costing $200,000 to Rollo for $250,000. At December 31, 2021 $60,000 of this inventory is still held by Rollo. In 2021, Rollo reports net income of $80,000. How much equity income is reported by Pez in 2021 ?
- Juan is a proprietor owning the following assets as of June 1, 2022:Cash – P 3,000Trade Receivables – P 15,000Inventory – P 20,000Office equipment P 30,000Accounts payable – P 10,000Pedro would like to form a partnership with Juan by investing Cash and Inventory amounting to P 20,000 and P 50,000, respectively. Juan agrees and on June 1, 2022, they formed the partnership. During formation, it was assessed that 5% may be uncollectible. Items in inventory destroyed by rust amounted to P 1,000. The office equipment, meanwhile, was not depreciated for two years. The office equipment has an estimated useful life of six years.After adjusting the books, how much is the total assets of the partnership?Pearl Inc. owns shares of Martinez Corporation stock. At December 31, 2020, the securities were carried in Pearl’s accounting records at their cost of $821,000, which equals their fair value. On September 21, 2021, when the fair value of the securities was $1,333,000, Pearl declared a property dividend whereby the Martinez securities are to be distributed on October 23, 2021, to stockholders of record on October 8, 2021.Prepare all journal entries necessary on those three dates. (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.)Keiji Jones is the owner of a small retail business operated as a sole proprietorship. During 2022, his business recorded the following items of income and expense: Revenue from inventory sales Cost of goods sold Business license tax Rent on retail space. Supplies Wages paid to employees Payroll taxes Utilities Required: $ 147,000 33,500 2,400 42,000 15,000 22,000 1,700 3,600 a. Compute taxable income attributable to the sole proprietorship by completing Schedule C to be included in Keiji's 2022 Form 1040. b. Compute self-employment tax payable on the earnings of Keiji's sole proprietorship by completing a 2022 Schedule SE, Form 1040. c. Assume that Keiji's business is not a service business, and that it has $155,000 unadjusted basis in tangible depreciable property. Calculate Keiji's 2022 QBI deduction, before any overall taxable income limitation. Complete this question by entering your answers in the tabs below. Schedule C Schedule SE Part a Part b Part c Assume that Keiji's…
- Global Company, a real estate developer, is owned by five founding sharcholders. On December 1, 2019, the entity declared a property dividend of a "one-bedroom flat" for each shareholder. The property dividend is payable on January 31, 2020. On December 1, 2019, the carrying amount of a one-bedroom flat is P1,000,000 and the fair value is P1,500,000. However, the fair value is P1,800,000 on December 31, 2019 and P1,900,000 on January 31, 2020. How much should be charged to retained earnings during 2019 in relation to the property dividends?Items 18 to 20 are based on the following data. The partnership business of John Estrada and Peter Arroyo was formed on January 2, 2020. At that date, the following assets were invested as derived from their respective sole proprietor's books. Book of Estrada Book of Arroyo 160,000 Cash. .P145,000 Accounts receivable. 80,000 50,000 Allowance for doubtful accounts. (5,000) (3,000) Merchandise inventory. 200,000 190,000 Partner's agreement as follows: 1. Estrada and Arroyo's adjusted capital contributions must be equal. In the event that one's contribution will exceed the other, any one of them shall withdraw "Cash" from their respective investment. 2. Their respective Accounts receivable should have a probability of collections. 80% for Estrada and 90% for Arroyo. 3. Merchandise inventory will be caried in the partnership book "as is". 4. Prepaid expense of P20,000 should be recognized for Estrada and P5,000 Accrued expenses for Arroyo. 18. How much is the adjusted capital contribution…L Company owns 30% of S Company’s common stock which gives it the ability to apply significant influence and thus uses the equity method of accounting for its investment. During 2020 L Company sold inventory costing $120,000 to S company for $200,000. Also during 2020 S company resold $85,000 of this inventory to third parties. What journal entry would L Company make at the end of 2020 to defer the intra-entity gross profit?
- Z admits A as a partner in business. Accounts in the ledger for Z on November 20, 2018, just before the admission of A, show the following balances: Cash Accounts Receivable Merchandise Inventory Prepaid expense Accounts Payable Z, Capital P 6,800 14,200 20,000 1,000 9,000 33,000 It is agreed that the purposes of establishing Z's interest the following adjustments shall be made: a) An allowance for doubtful accounts of 3% of accounts receivable is to be established b) The merchandise inventory is to be valued at P23,000. c) Prepaid salary expenses of P600 and accrued rent expense of P800 are to be recognized. A is to invest sufficient cash to obtain a 1/3 interest in the partnership. (1) Z's adjusted capital before the admission of A; and (2) the amount cash investment by A:Dennis sells short 475 shares of ARC stock at $112 per share on January 15, 2019. He buys 950 shares of ARC stock on April 1, 2019, at $140 per share. On May 2, 2019, Dennis closes the short sale by delivering 475 of the shares purchased on April 1. a. What are the amount and nature of the loss upon closing the short sale? Dennis has loss in the amount of $ b. When does the holding period for the remaining shares begin? The holding period for the remaining shares begins on c. If Dennis sells (at $154 per share) the remaining 475 shares on January 20, 2020, what will be the nature of his gain or loss? Dennis has in the amount of $As of June 30, 2020, Kagura and Hayabusa decided to form a Partnership. Their balance sheet on this date is as follows: Account Kagura Hayabusa Cash 70,000 40,000 Accounts Receivable 20,000 30,000 Allowance for doubtful accounts - 2,000 Notes receivable 10,000 20,000 Merchandise Inventory 80,000 100,000 Machinery and equipment 120,000 - Furnitures and Fixtures - 110,000 Accumulated Depreciation 10,000 20,000 Accounts payable 30,000 20,000 Notes payable 20,000 5,000 The partners agreed to the following adjustments: Uncollectible accounts of P3,000 for Kagura is to be provided; and 10% of the account receivable for Hayabusa is uncollectible. Kagura’s inventory amounting to P5,000 is worthless, while Hayabusa’s inventory has a fair value of P140,000 and costs to sell of P10,000. An interest of 10% on notes receivable dated March 31, 2020 is to be accrued for both books. Accrued rent income of…