Feel Good Inc. began operations on January 1, 2014, its first year of operations. The company reported a loss for accounting & tax purposes of $100,000 and was virtually certain of realizing the benefits of the loss during the loss carry-forward period of 20 years.

The company became profitable in its second year of operations (2015) and reported income before taxes of $800,000 for the year ended December 31, 2015 which includes the following items.

1. Depreciation of property, plant and equipment was $175,000. CCA of $255,000 will be claimed on this equipment in the 2015 tax return.

2. Feel Good Inc. has an investment in 15% of the common shares of Down Under Inc. (a taxable Canadian corporation). Down Under Inc. paid out a total cash dividend of $90,000 to its shareholders during the calendar year 2015.

3. Feel Good Inc. paid a non-tax deductible fine for bribing health inspectors in the amount of $25,000.

4. During 2015, Feel Good Inc. accrued a warranty expense of $136,000 and settled warranty claims for an amount of $82,000.

5. Feel Good Inc. sponsors a defined benefit pension plan and according to the Income Tax Act, can only deduct the cash payments to the plan. The journal entry to record pension activity for 2015 was as follows:

Pension expense $150,000

Cash $100,000

Accrued pension liability $50,000

Other information:

The tax rate for all years is 35%.

Feel Good Inc. is a publicly traded company.

REQUIRED:

a) Prepare the income tax related journal entries for the year ended December 31, 2015.

b) Complete, in good form, the income statement for 2015 & 2014, beginning with the line " Income before income taxes

Match the descriptions with the journal entry that is most closely associated with the data flow Debit Credit 1. Payroll process to GL/BR process: GL Manufacturing Overhead (tax on factory workers) FICA taxes payable employer tax accrual update General and administrative expense SUTA taxes payable 2. B/AR/CR process to GL/BR process: GL Selling expense FUTA taxes payable write-off update Debit Credit 3. B/AR/CR process to GL/BR process: GL invoice update Allowance for doubtful accounts Accounts receivable 4. Payroll process to GL/BR process: GL disbursement voucher update v Debit Credit 5. Payroll process to GL/BR process: GL tax deposit update Bad debt expense Allowance for doubtful accounts 6. B/AR/CR process to GL/BR process: GL V Debit Credit cash receipts update Accounts Receivable Sales 7. AP/CD process to GL/BR process: GL payable update v Debit Credit 8. AP/CD process to GL/BR process: GL Federal income tax withholding cash disbursements update Payroll Clearing State income tax withholding FICA tax withholdings payable 9. Payroll process to GL/BR process: GL labor distribution update Accrued payroll 10. B/AR/CR process to GL/BR process: GL *Debit Credit estimated bad debts updateACCOUNTING CODES Use the information below to answer the questions that follow. Four account codes are used to identify the nature of transactions for input into a computerized accounting system. The numerical codes for identifying transactions are constructed by arranging the four account codes in the following order: . A two-digit number (Table 1) identifies the Fund Code corresponding to the fund that is receiving revenue, paying an expenditure, or is otherwise affected by the transaction A four-digit number (Table 2) identifies the Resource Code for tracking activities funded with revenues that have special accounting or reporting requirements A four-digit number (Table 3) identifies the Function Code corresponding to the activity for which a service or material is acquired . A four-digit number (Table 4) identifies the Object Code that classifies expenditures by type of commodity or service, and classifies revenue by source Table 1 Table 2 FUND CLASSIFICATION CODE RESOURCE CODE General Fund Unrestricted 0000 Adult Education Fund 11 State Lottery 1100 Child Development Fund 12 Title I 3010 Cafeteria Special Revenue 13 Child Nutrition 5310 Deferred Maintenance Fund 14 Community Based Tutoring 6285 Building Fund 21 After School Education 6010 Table 3 Table 4 FUNCTION " CODE OBJECT CODE Instruction 1000 Teacher Salanes 1100 Administration 2100 Certificated Support Salaries 1200 Instructional Library & Technology | 2420 Instructional Aide Salanes 2100 Guidance / Counseling Services 3110 Classified Support Salanes 2200 Food Services 3700 Materials & Supplies 4300 Community Services 5000 Noncapitalized Equipment 4400 optional for Revenues Food 4700 State Lottery Revenue 8560 All Other State Revenue 8590 Special Education - Grants 8182 Jestions 8-15. 0-8560 refers to revenue received from: *for DM562,500. The offer requested payment as follows: DM 62 500 as a cash down payment at the time the offer was accepted by Pelzer DM 2507000 to be paid three months after the offer was accepted, by which time Culver would have shipped the first half of the order. DM 250.000 to be paid six months after the offer was accepted, by which time Culver would have shipped the last half of the order DM 562 500 The price of DM562,500 was derived by pricing the order at $225,090 and multiplying this dollar price by DM2.50. the approximate exchange rate on February 1. The actual exchange rate of February I had been DM2 4734/5. but Turner rounded this up because of a weakness in the mark since the first of the year, Exchange quotations for the first nine weeks of 1982 are given in Exhibit 3. Exhibit 1 Culver Radio, Inc., Statement of Income and Retained Earnings, years ending December 31. 1982, and December 31. 1981 (unaudited) 1982 198I Sales $ 1.813.297 $ 1,855.585 Cost of Goods Sold Inventory, January 361,327 273,056 Purchases of materials-net 1,065,932 1,072 672 Less inventory. December 31 438 402 361, 128 Cost of materials consumed 626,531 711.344 Direct labor 247,860 222,912 Factory overhead 283,832 20 200 Cow of Goods Sold 1.158.223 1.194.456 Gross Profit Expenses 655,074 465.402 Selling expense Warehouse and delivery expense Administrative expense 466,360 465,402 Total Expense 111,244 76,948 Net (loss) from Operations 187.616 193.138 Other Income Interest income Miscellaneous income Bad debt recovered (74.359) Total Other Income (1 10,146) Net Loss Before Provision for: Federal and state taxes 28 339 31 395 Provision for federal and state taxes 74,178 Net Loss 58,349 Retained Earnings, January 1 Retained Earnings, December 31 86 688 105.959 (25.458) 31,600 280 6.532 (23,738) 25,068 224,805 199 737 201,067 244,805Print Item Starting Questions A. Determine the due date of the note. B. Determine the maturity value of the note. Assume a 360-day year when calculating interest. Journal G. (1) Journalize the entry to record the receipt of the note by Jaffe Furniture. Refer to the Chart of Accounts for exact wording of account tiles. PAGE 1 JOURNAL ACCOUNTING EQUATION DESCRIPTION POST, REF. DEBIT CREDIT ASSETS LIANLITIES C. (2) Journalice the entry to record the receipt of payment of the more at maturity. Refer to the Chart of Accounts for exact wording of account miles. Check My Work 2 more Check My Work uses remaining. Previous E Saw and Excit Submit Assignment