The following information is available for two different types of businesses for the 2014 accounting period. Lewis CPAs is a service business that provides accounting services to small businesses. Casual Clothing is a merchandising business that sells sports clothing to college students. Data for Lewis CPAs

1. Borrowed $80,000 from the bank to start the business.
2. Provided $60,000 of services to clients and collected $60,000 cash.
3. Paid salary expense of $40,000.

Data for Casual Clothing

1. Borrowed $80,000 from the bank to start the business.
2. Purchased $50,000 inventory for cash.
3. Inventory costing $32,000 was sold for $60,000 cash.
4. Paid $7,200 cash for operating expenses.

Required
a. Prepare an income statement, balance sheet, and statement of cash flows for each of the companies.
b. Which of the two businesses would have product costs? Why?
c. Why does Lewis CPAs not compute gross margin on its income statement?
d. Compare the assets of both companies. What assets do they have in common? What assets are different? Why?

On july 1, 2016, killearn company acquired 103,000 of the outstanding shares of shaun company for $21 per share. this acquisition gave killearn a 40 percent ownership of shaun and allowed killearn to significantly influence the investee's decisions. as of july 1, 2016, the investee had assets with a book value of $6 million and liabilities of $1,468,500. at the time, shaun held equipment appraised at $140,000 above book value; it was considered to have a seven-year remaining life with no salvage value. shaun also held a copyright with a five-year remaining life on its books that was undervalued by $562,500. any remaining excess cost was attributable to goodwill. depreciation and amortization are computed using the straight-line method. killearn applies the equity method for its investment in shaun. shaun's policy is to declare and pay a $1 per share cash dividend every april 1 and october 1. shaun's income, earned evenly throughout each year, was $580,000 in 2016, $606,600 in 2017, and $649,200 in 2018. in addition, killearn sold inventory costing $93,000 to shaun for $155,000 during 2017. shaun resold $97,500 of this inventory during 2017 and the remaining $57,500 during 2018.a. determine the equity income to be recognized by killearn during each of these years. 2016 2017 2018b. compute killearn’s investment in shaun company’s balance as of december 31, 2018.

If the findings and the results are not presented properly, the research completed was a waste of time and money. true false

Aproduct has a demand of 4000 units per year. ordering cost is $20, and holding cost is $4 per unit per year. the cost-minimizing solution for this product is to order: ? a. 200 units per order. b. all 4000 units at one time. c. every 20 days. d. 10 times per year. e. none of the above