EXHIBIT 1

Panes Accounting Policies, Procedures and Other Relevant Facts

1. Pane uses the allowance method for receivables, the percentage of credit sales method to determine uncollectible accounts, and has a perpetual inventory system.
2. Depreciation is computed using the double-declining balance method. Amortization is computed using the straight-line method.
3. All purchases and expenses are on account unless otherwise indicated.

6. Pane's income tax rate is 30%.
7. All of the property, plant and equipment on the balance sheet as of 1/1/2021 is fully depreciated. Therefore, the only depreciation for the current year will relate to property, plant and equipment that Pane has purchased during the current year.
8. 500,000 shares of stock are outstanding as of 12/31/2021.

EXHIBIT 2

Pane in the Glass, Inc. Transactions for the Year Ended December 31, 2021

1. On January 1, Pane buys land and a building for one lump-sum of cash.

Contract price:	$590,000
Fair Value: Land	$400,000
Fair Value: Building	$200,000
Useful Life of Building (years)	20
Residual Value: Building	$20,000

2. On February 9, Pane purchases $33,000,000 of inventory on account. Note that the company employs a perpetual inventory system.

3. On March 1, Pane purchases a machine (on account) to make stained glass windows. Pane pays for the machine on March 9. The machine has no residual value.

Contract Price:	$105,500
Transportation Costs:	$7,200
Installation Costs:	$4,956
Sales Tax:	$10,550
Useful Life of Machine (years)	6

4. On April 1, Pane makes a credit sale to Gane Co. and requires Gane to sign a $70,000, 1-year (12-month) note. Interest of 12% (annually) is to be assessed in addition to the face value of the note and collected at maturity. The cost of the inventory sold totals $45,000 (IGNORE ANY TIME VALUE OF MONEY EFFECT RELATED TO THIS TRANSACTION).

5. On May 1, Pane sells $30,000 of stained windows with terms 2/10, n/EOM. The cost of the inventory equals $17,000 and the company uses a perpetual inventory system. Pane uses the gross method to record the sale. On May 8, Pane made collections on these sales (ASSUME THE COMPANY DOES NOT USE A SALES DISCOUNT ACCOUNT AND INSTEAD DEBITS THE SALES REVENUE ACCOUNT FOR DISCOUNTS TAKEN).

6. On May 20, Pane determined that it will not collect on a prior-year credit sale of $530,000 due to the customers recent bankruptcy proceedings. Pane writes off the account from the allowance for doubtful accounts.

7. On July 1, Pane pays cash for a patent that will allow it to produce a revolutionary new window for boats and other marine vehicles called "T-Panes".

Cost of Patent	$120,000
Estimated Economic Life (in years)	12

8. On October 10, Pane records the collection of $57,000,000 from customers as settlement of accounts receivable.

9. On November 16, Pane records the payment of $26,350,000 to suppliers as settlement of accounts payable.

10. On December 31, Pane evaluates its sales information for the year. The following information relates to sales transactions not previously recorded. Record the sales (as one transaction) and note that the company employs a perpetual inventory system.

Sales		$75,000,000
Percentage of Sales on Credit		95%
Cost of Inventory Sold		$37,000,000

11. On December 31, Pane evaluates its salary information for the year. The company incurred salary expense totaling $8.7 million dollars during the year. Of this amount, $8.3 million was paid out in cash during the year, and the remaining amount will be paid in the following year.

12. On December 31, Pane evaluates the companys research and development (R&D) activities conducted throughout the year to help develop a new bullet proof glass for the Department of Defense. Management determines that the company incurred the following costs related to the R&D activities:

Material used from inventory		$95,000
Wages and Salaries (paid in cash)		$151,000
Machine purchased for cash for the R&D project with a useful life of 1 year and no alternative future uses		$47,000

EXHIBIT 2 (cont.)

Pane in the Glass, Inc. Additional Information Available at Year-End

On December 31, 20X1:

13. Pane accrues interest on the note signed by Gane on April 1 (see Transaction #4). Assume interest is assessed based on number of months the note was outstanding during the year.

14. Pane believes that 1% of its net credit sales will be uncollectible for the year. Net credit sales amounted to $71,250,000. Pane increases the allowance for doubtful accounts based on this analysis.

15. Pane uses the first-in, first-out (FIFO) cost flow assumption. At year-end, Pane determines an inventory write-down of $27,000 is necessary. Assume that Pane records inventory write-downs directly to cost of goods sold, as opposed to a separate loss account.

16. Pane records depreciation and amortization expense. Use the double declining balance method for depreciation and the straight-line method for amortization. Note that all assets on the books at the beginning of the year are fully depreciated, so you only need to record depreciation and amortization for the following 3 items from the current year. Use the accumulated depreciation and accumulated amortization accounts.

1. From item 1 above, a building was acquired for 196,667 with a residual value of 20,000 and a useful life of 20 years.
2. From item 3 above, a piece of machinery was acquired for 128,206 with no residual value and a useful life of 6 years (hint: only a partial year of depreciation will be recorded since it is not acquired at the beginning of the year).
3. From item 7 above, a patent was acquired for $120,000 with a useful life of 12 years (hint: only a partial year of amortization will be recorded since it is not acquired at the beginning of the year).

17. Pane purchased a subsidiary many years ago that produces various specialty medical glass products and named it PaneMeds, which invested heavily in an artificial jaw replacement, GlassJaw. Due to inferior durability, the market reacted negatively to the product and Pane decided to review the PaneMeds operating segment for impairment to goodwill. Based on this analysis, a goodwill impairment of 100,000 needs to be recognized.

18. Income tax expense was recognized as 30% of the pre-tax net income amount of $28,150,921. The cash tax payment will not be remitted until the following year.

Journal Entries Account No. and Account Title Combined DR Transaction No Date 1 January 1 Dr. Dr. Cr. 2 February 9 Dr. Or. 3 March 1 Dr. Cr. March 9 Dr. 4 April 1 Dr. Dr. 5 May 1 Dr. 5 5 5 Dr. May 8 Dr. Dr. 6 May 20 Dr. 7 July 1 Dr. 8 October 10 Dr. November 16 Dr. 10 6 December 31 Dr. Dr. S 8 Dr. 11 December 31 Dr