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, 2

0

12, Zurich Company provided you with the following information regarding its trading securities.

)

540

)

)

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)

(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 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.

(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

)

Pension expense for 2012

$ 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

733,850

Cr.

Service cost

80,745

80,745

Cr.

73,385

Dr.

73,385

Cr.

11,970

Cr.

11,970

Dr.

157,550

Cr.

157,550

Dr.

Dr.

61,060

Dr.

157,550

Cr.

Dr.

Cr.

Cr.

807,450

Dr.

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.

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

(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.

Cash

Description/Account

Debit

Credit

Materials, Cash, Payables, etc.

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.

$

$

$

Gross profit recognized

Income Statement (2013)

Balance Sheet (12/31/13)

(a) (1)

2012

2013

$175,000

$

200,000

$350,000

650,000

$175,000

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

$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.

Description/Account

Debit

Credit

Materials, Cash, Payables, etc.

400,000

437,500

250,000

Construction Expense

400,000

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]

(b)

Income Statement (2013)

$200,000

Balance Sheet (12/31/13)

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

$750,000

175,000

200,000

**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.

units

units

@

units

@

30

units

@

units

@

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.

$

$

$

$

$

$

Purchases

6,810

10,800

x

=

7,660

x

=

Oksana Corporation
Condensed Income Statement
For the year ended December 31

First-in, first-out

Last-in, first-out

:

x

$27

=

$183,870

$30

324,000

$37

283,420

$791,290

x

$37

=

x

$30

=

x

=

x

$27

=

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.

0.82

4.43

0.66

0.82

0.82

1,500

0.82

1.64

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.

$

Item No.

Quantity

1320

$5.25

$4.92

$4.92

$4.92

1,700

1333

4.43

3.77

3.94

3.94

1,400

1426

7.38

6.07

5.90

6.07

6.07

1,300

1437

5.90

5.08

4.51

4.51

1,500

1510

3.69

3.28

3.28

3.28

1,200

1522

4.92

4.43

4.92

4.92

4.92

1,000

1573

2.95

2.62

2.62

2.62

3,500

1626

7.71

8.53

7.38

8.53

7.71

1,500

The amount of Sedato Company’s inventory

Cost per
Unit

Replacement
Cost

Net Realizable
Value

Net Real. Value
Less Normal Profit

Designated
Market Value

LCM

Final Inventory
Value

$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.)

2014

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

$

2007

2014

(1)

(2)

$272,658

(3)

$45,443

$272,658

0

318,101

(4)

$272,658

$22,722

318,101

(5)

$272,658

(6)

0

$272,658

0

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.

$41,692

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.)

No.

Account Titles and Explanation

Debit

Credit

(a)

(b)

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.)

No.

Account Titles and Explanation

Debit

Credit

(a)

(b)

Santana Company

Delaware Company

(a)

2,978

*

New equipment

$16,379

)

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

Book value of old equipment

Fair value of old equipment

23,080

Computation of loss:

$26,802

Loss on disposal of equipment

$3,722

(b)

Cash paid

Fair value of old equipment

20,102

Cost of new equipment

:

$2,978

Cost of new equipment

$23,080

Fair value of old equipment

$20,102

=

Gain on disposal of equipment

Computation of gain on disposal of equipment:

Less: Book value of old equipment ($41,692 – $28,291)

13,401

$6,701

Cost of new equipment:

Fair value of equipment

$23,080

2,978

Cost of new equipment

Less: Cash received

$20,102

=

$26,802

23,080

$3,722

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

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