ahmedshakir43

ahmedshakir43

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Syed Ahmed Shakir

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Architecture1Management2English4Business1Sociology1Information Technology1Algebra1Computer Science9Accounting3Calculus1Biology2Statistics11Economics1Chemistry9
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XYZ, Inc. is a calendar-year corporation that began business on January 1, 2017. For 2018, it reported the following information in its current year audited income statement. Notes with important tax information are provided below. 

Reconcile book income to taxable income on worksheet (below).

 

Notes:

1. XYZ owns 10% of the outstanding Home Corp. (HC) stock.  Home Corp. reported $2,000,000 of income for the year. XYZ accounted for its investment in HC under the equity method and it recorded its pro rata share of HC’s earnings for the year. HC also distributed a $100,000 dividend to XYZ.
2. Of the $20,000 interest income, $5,000 was from Ford Motor, $7,000 was from a Toyota, $6,000 was from a Town of Presque Isle municipal bond, and the remaining $2,000 was from an investment in a CD (certificate of deposit).
3. Life insurance proceeds from death of the CFO.
4. This includes total officer compensation of $3,500,000. The CEO was paid $1,250,000 for salary in 2018 (no one officer received more than $1,000,000 compensation).
5. $2,000 is the portion of interest paid on a loan taken out to obtain a tax exempt municipal bond from the City of Presque Isle.
6. XYZ actually wrote off $48,000 of its accounts receivable as uncollectible.
7. Tax depreciation was $700,000.  
8. In the current year, XYZ made $23,500 in actual payments on warranties it provided to customers.
9. XYZ made $750,000 of cash contributions to qualified charities during the year.
10. On January 1 of this year XYZ acquired the assets of another business. In the process it acquired $200,000 of goodwill. At the end of the year, XYZ wrote off $10,000 of the goodwill as impaired. 
11. XYZ expensed all of its organizational expenditures for book purposes. It expensed the maximum amount of organizational expenditures allowed for tax purposes.
12. The other expenses do not contain any items with book-tax differences.
13. XYZ received rental income payments in 2018 that relates to 2019. They have not earned the amount as of year-end and was not recorded in the books. The total amount received was $21,500

 

 

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C o m p r e h e n s i v e P r o b l e m C h a p t e r s 6 – 8
Fray Enterprises is a small business that purchases electronicpersonal information managers (PIM) from manufacturers
and sells them to consumers. Th ese PIMs keep track ofappointments, phone numbers, to-do lists, and the like. Fray
conducts business via the Internet and, at this point, carries onlyone model of PIM, the ZL-420. Fray provides the following
trial balance as of January 1, 2011.

Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . $ 9,200
Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . 26,800
Allowance for Bad Debts . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $804
Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . .31,650
Prepaid Rent . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . .1,100
Offi ce Supplies . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . 900
Accounts Payable . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19,100
Wages Payable . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2,800
Taxes Payable . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 3,400
Common Stock (10,000 shares). . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . .30,000
Retained Earnings . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13,546
Totals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . .$69,650$69,650

Fray uses the periodic FIFO inventory method in accounting for itsinventory. Th e inventory of ZL-420 consists of the
following inventory layers:
Layer Units Price per Unit Total Price
1
(oldest purchase) 50 $120 $ 6,000
2 80 130 10,400
3 70 135 9,450
4
(most recent purchase) 40 145 5,800
Total 240 $31,650
Fray provides the following additional relevant information:
• Th e company uses the percentage of receivables method inestimating bad debts; 2% of the ending receivables
balance is deemed to be uncollectible.
• Fray conducts an actual physical count of its inventory and office supplies at the end of each month.
• Fray rents its warehouse, offi ce facilities, and computerequipment. Rent on the computer equipment is paid at
the beginning of each month. Rent on the warehouse and offi cespace is paid on the 15th of each month.
• Payroll is paid on the 5th and the 20th (pay periods end on the15th and the last day of the month).
• Taxes Payable represents payroll taxes that are due by the 5th ofthe following month.
• All sales and all inventory purchases are on account.

The following transactions occurred for Fray during January of2011:
Jan. 1 Paid rent on the computer equipment, $1,400.
5 Recorded sales for the week, 130 units at $210 per unit. (Th ecompany uses a periodic inventory system.)
5 Paid wages payable and taxes payable from the prior period.
5 Collected $19,000 from customers on account during theweek.
8 Purchased offi ce supplies for cash, $300.
10 Received 70 ZL-420s from the manufacturer at a cost of $145 perunit.
11 Paid accounts payable, $16,900.
12 Collected $22,000 from customers on account during theweek.
12 Recorded sales for the week, 120 units at $210 per unit.
15 Paid monthly rent for the offi ce and warehouse, $2,200.
15 Received 130 ZL-420s from the manufacturer at a cost of $150 perunit.
18 A customer returned a ZL-420 and requested a refund. A check wasimmediately mailed to the customer in
the amount of $210.
19 Collected $30,000 from customers on account during theweek.
19 Recorded sales for the week, 140 units at $210 per unit.
20 Paid the semimonthly payroll for the pay period ending onJanuary 15. Salaries and wages total $4,800 and
payroll taxes were as follows: FICA taxes payable, employee, $367;FICA taxes payable, employer, $367; state
withholding taxes payable, $310; federal withholding taxes payable,$780; federal unemployment taxes payable,
$60; state unemployment taxes payable, $180.
22 Received notice that a customer owing Fray $630 had fi ledbankruptcy and would be unable to pay.
23 Paid the taxes payable from the payroll on January 20.
24 Received 180 ZL-420s from the manufacturer at a cost of $150 perunit.
25 Purchased offi ce supplies for cash, $480.
25 Paid accounts payable, $43,000.
26 Collected $30,500 from customers on account during theweek.
26 Recorded sales for the week, 135 units at $220 per unit.
29 Customers returned 7 ZL-420s and requested refunds. Checks wereimmediately mailed to each customer in
the amount of $210 each.
30 Received 140 ZL-420s from the manufacturer at a cost of $145 perunit.
31 Collected $29,900 from customers on account.
31 Recorded sales for the partial week, 70 units at $220 perunit.
31 Accrued the semimonthly payroll for the pay period ending onJanuary 31. Salaries and wages total $5,000
and payroll taxes were as follows: FICA taxes payable, employee,$382; FICA taxes payable, employer, $382;
state withholding taxes payable, $230; federal withholding taxespayable, $810; federal unemployment taxes
payable, $65; state unemployment taxes payable, $190.

Required:
1. Provide the required journal entries to record each of the aboveevents.
2. Make the adjusting entries necessary (1) to record bad debtexpense for the period and (2) to adjust inventory
and offi ce supplies. A count of inventory and offi ce suppliesrevealed 165 ZL-420s on hand and supplies
valued at $1,000.
3. Prepare a trial balance as of January 31, 2011.
4. Prepare an income statement and a balance sheet for FrayEnterprises.
5. Compute Fray’s number of days’ sales in inventory, number ofdays’ sales in accounts receivable, and number
of days’ purchases in accounts payable ratios. What can youconclude about the company’s liquidity position
based on this analysis

Journal entries: Jan. 1: Rent Expense 1,400 Prepaid Rent 1,400 Jan. 5: Account...

36. A Clinical psychologist tests whether changing to a more nutritious diet will influence happiness levels. What is the research hypothesis?

a.    The change in diet will have no impact on happiness levels

b.    The change in diet will improve happiness levels

c.     The change in diet will decrease happiness levels

d.    The change in diet will change happiness levels

 

37. In statistics, the symbol μM is the:

a.    The sample mean

b.    The population mean

c.     The mean of the distribution of sample means

d.    The population standard deviation

 

38. The "cut-off sample score on the comparison distribution" is the point at which:

a.    The research hypothesis is rejected

b.    if the research hypothesis is true, a result this extreme is unlikely. 

c.     if the null hypothesis is true, a result this extreme is unlikely. 

d.    the null hypothesis is accepted.

 

39. The mean of a distribution of means is:

a.    the square-root of the original population mean. 

b.    the original population mean divided by the sample size (N). 

c.     the same as the original population mean. 

d.    the sample mean multiplied by the variance. 

 

40. A Psychologist is using a t-test to examine if taking a stress reduction course would increase how much people sleep. For this study, the significance level is .01 and the sample size is 15. What is the cut-off t-value for this study?

a.    2.625

b.    1.64

c.     2.947

d.    1.762

 

41. Which significance level(s) do Psychologists often use?

a.    .01

b.    .10

c.     .05

d.    Both A and C

 

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