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“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, 2
0
12, 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 |
22,4 30 |
||||||||
|
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,
27
0
.
(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)
Securities
Cost
Fair Value
Unrealized
Gain (Loss)
$21,890
$(730
)
21,890
380
$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 ta
x
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.
Compute income taxes payable for 2012.
Income taxes payable
$
Taxable income
$153,180
Enacted tax rate
Income taxes payable
$45,954
Click here if you would like to Show Work for this question
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.)
(b) Indicate the pension-related amounts that would be reported in the company’s income statement and balance sheet for 2012.
|
Latoya Company |
|
Latoya Company |
(a) Computation of pension expense:
|
$ 80,745 |
|||
|
Interest cost ($733,850 x 10%) |
73,385 |
||
|
Expected return on plan assets |
(11,970 |
||
|
$ 142,160 |
(b) Pension liability
=
$34,860 – $
15,390
= $
19,470
|
Latoya Company |
||||||||||||
|
General Journal Entries |
Memo Record Entries |
|||||||||||
|
Annual Pension |
Cash |
Pension Asset/ |
Projected Benefit |
Plan |
||||||||
|
Balance, Jan. 1, 2012 |
34,860 |
Cr. |
698,990 |
Dr. * |
||||||||
| Dr. | ||||||||||||
| Interest cost | ||||||||||||
|
Actual return |
||||||||||||
|
Amortization of PSC |
||||||||||||
| Contributions | ||||||||||||
| Benefits | 61,060 |
Cr. ** |
||||||||||
|
Journal entry for 2012 |
142,160 | 15,390 | ||||||||||
|
Balance, Dec. 31, 2012 |
19,470 |
826,920 |
*$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 |
|
Assuming that the percentage-of-completion method is used. |
|
(1) |
Compute the amount of gross profit to be recognized in 2012 and 2013. |
|
Gross profit recognized |
|
(2) |
Prepare journal entries for 2013. |
|
Description/Account |
Debit |
Credit |
|||
|
Materials, Cash, Payables, etc. |
|||||
|
Construction Expense |
|
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) |
|
$175,000 |
$ 200,000 |
|
Gross profit recognized in 2012 : |
|||
|
Contract price |
$1,500,000 |
||
|
Costs: |
|||
|
Costs to date |
|||
|
Estimated additional costs |
1,000,000 |
||
|
Total estimated profit |
500,000 | ||
|
Percentage completion to date |
|||
|
($350,000/$1,000,000) |
35% |
||
| Gross profit recognized in 2012 | |||
|
Gross profit recognized in 2013 : |
|||
|
($750,000/$1,000,000) |
75% |
||
|
Total Gross profit recognized |
37 5,000 |
||
|
Less: Gross profit recognized in 2012 |
175,000 | ||
| Gross profit recognized in 2013 |
|
(2) |
Journal entries for 2013. |
|
Construction in Process ($750,000 – $350,000) |
400,000 |
||
|
Accounts Receivable ($625,000 – $187,500) |
437,500 |
||
|
Billings on Construction in Process |
|||
|
Cash ($400,000 – $150,000) |
250,000 | ||
|
Accounts Receivable |
|||
|
Construction in Process |
200,000 |
||
|
Revenues from long-term Contract |
*600,000 |
|
* 1,500,000 × [($750,000 – $350,000) ÷ $1,000,000] |
|
Gross profit on long-term construction project |
|
|
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 |
|
2012 Gross profit |
|
2013 Gross profit |
| $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 |
@ |
24 |
||||||
|
Purchases |
6,810 |
27 | |||||||
|
10,800 |
|||||||||
|
7,660 |
37 | ||||||||
|
Inventory, December 31 |
9,880 |
? |
|||||||
|
Operating expenses |
$24 3,600 |
Prepare a condensed income statement for the year on both bases for comparative purposes.
|
Oksana Corporation |
||||||||||||||||||
|
First-in, first-out |
Last-in, first-out |
|||||||||||||||||
|
: |
||||||||||||||||||
| x |
$27 |
= |
$183,870 |
|||||||||||||||
|
$30 |
324,000 |
|||||||||||||||||
|
$37 |
283,420 |
|||||||||||||||||
|
$791,290 |
|
Computation of inventory, Dec. 31: |
||
|
First-in, first-out: |
||
|
7,660 units |
$283,420 |
|
|
2,220 units |
66,600 |
|
|
$350,020 |
||
|
Last-in, first-out: |
||
|
6,210 units |
$24 |
$149,040 |
|
3,670 units |
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 |
||||||||||
|
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 |
6.40 |
||||||||||||
|
1573 |
3,500 |
2.95 |
2.62 |
4.10 |
1.23 |
||||||||||
|
1626 |
7.71 |
8.53 |
9.84 |
From the information above, determine the amount of Sedato Company’s inventory.
|
The amount of Sedato Company’s inventory |
||||||
|
Cost per |
Replacement |
Net Realizable |
Net Real. Value |
Designated |
LCM |
Final Inventory |
|
$6.81 |
* |
$ 4.76 |
** |
$ 8,364 |
||
| 4.76 |
3.94 |
5,516 |
||||
|
7.54 |
7,891 |
|||||
|
4.51 |
3.03 |
6,765 |
||||
|
4.02 |
3.04 |
3,936 |
||||
|
5.74 |
4,920 |
|||||
|
2.87 |
2.05 |
9,170 |
||||
|
9.02 |
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 |
|||||||
|
(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 |
||||||||
|
Incl. |
Total |
|||||||
|
$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 |
||||||
| 0 |
$45,443 |
318,101 |
||||||
|
$22,722 |
||||||||
|
4/12 of $45,443 |
$15,148 |
|||||||
|
2008–2013 Inc. |
||||||||
|
3/12 of $45,443 |
$11,361 |
299,167 |
||||||
| 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 |
|||||
|
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.)
|
Santana Company: |
|
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.)
|
Santana Company |
|
Delaware Company |
(a)
|
Valuation of equipment |
||||||
|
Book value of equipment given |
$ 13,401 |
|||||
|
Cash paid |
||||||
|
New equipment |
$16,379 |
|||||
|
OR |
||||||
|
Fair value received |
$23,080 |
|||||
|
Less: Gain deferred |
6,701 |
|||||
| * |
Fair value of old equipment |
$20,102 |
||||
|
Book value of old equipment |
(13,401 |
|||||
|
Gain on disposal of equipment |
$6,701 |
|
Computation of loss: |
||
|
$26,802 |
||
|
Loss on disposal of equipment |
$3,722 |
(b)
|
Cost of new equipment : |
||
|
$2,978 |
||
| Cost of new equipment |
$23,080 |
|
Computation of gain on disposal of equipment: |
|
|
Less: Book value of old equipment ($41,692 – $28,291) |
13,401 |
|
$6,701 |
|
Less: Cash received |
| $20,102 |
|
Computation of loss on disposal of equipment: |
|
Book value of old equipment ($41,692 – $14,890) |
|
Less: Fair value of equipment |
|
Loss on disposal of equipmentbLoss on disposal of equipment |
