Eximco Corporation (based in Champaign, Illinois) has a number of transactions with companies in the country of Mongagua, where the currency is the mong. On November 30, 2017, Eximco sold equipment at a price of 500,000 mongs to a Mongaguan customer that will make payment on January 31, 2018. In addition, on November 30, 2017, Eximco purchased raw materials from a Mongaguan supplier at a price of 300,000 mongs; it will make payment on January 31, 2018. To hedge its net exposure in mongs, Eximco entered into a two-month forward contract on November 30, 2017, to deliver 200,000 mongs to the foreign currency broker in exchange for $104,000. Eximco properly designates its forward contract as a fair value hedge of a foreign currency receivable. The following rates for the mong apply:
Date Spot Rate Forward Rate (to January 31, 2018)
November 30, 2017 $ 0.53 $ 0.52
December 31, 2017 0.50 0.48
January 31, 2018 0.49 N/A
Eximco's incremental borrowing rate is 12 percent. The present value factor for one month at an annual interest rate of 12 percent (1 percent per month) is 0.9901.
a. Prepare all journal entries, including December 31 adjusting entries, to record these transactions and the forward contract.
b. What is the impact on net income in 2017?
c. What is the impact on net income in 2018?
In: Accounting
The Greensboro Performing Arts Center (GPAC) has a total capacity of 8,900 seats: 2,500 center seats, 3,000 side seats, and 3,400 balcony seats. The budgeted and actual tickets sold for a Broadway musical show are as follows: |
Percentage Occupied |
|||||||||
Ticket Price | Budgeted Seats | Actual Seats | |||||||
Center | $ | 85 | 90 | % | 95 | % | |||
Side | 75 | 80 | 85 | ||||||
Balcony | 65 | 85 | 75 | ||||||
The actual ticket prices are the same as those budgeted. Once a show has been booked, the total cost does not vary with the total attendance. |
Required: |
Compute the following for the show: |
1. |
The budgeted and actual sales mix percentages for different types of seats. (Round your answers to 4 decimal places. (i.e. .123456 = 12.3456%)) |
2. |
The budgeted average contribution margin per seat. Assume the ticket price is also the contribution margin. (Round your answer to 4 decimal places.) |
3-a. |
The total sales mix variance. (Round your answers to the nearest whole dollar amount.) |
3-b. |
The total sales quantity variance. (Round your answers to the nearest whole dollar amount.) |
4. |
The total sales volume variance. |
In: Accounting
Based on past experience, Leickner Company expects to purchase raw materials from a foreign supplier at a cost of 1,100,000 marks on March 15, 2018. To hedge this forecasted transaction, the company acquires a three-month call option to purchase 1,100,000 marks on December 15, 2017. Leickner selects a strike price of $0.81 per mark, paying a premium of $0.002 per unit, when the spot rate is $0.81. The spot rate increases to $0.817 at December 31, 2017, causing the fair value of the option to increase to $9,000. By March 15, 2018, when the raw materials are purchased, the spot rate has climbed to $0.83, resulting in a fair value for the option of $22,000.
a. Prepare all journal entries for the option hedge of a forecasted transaction and for the purchase of raw materials, assuming that December 31 is Leickner's year-end and that the raw materials are included in the cost of goods sold in 2018.
b. What is the overall impact on net income over the two accounting periods?
c. What is the net cash outflow to acquire the raw materials
In: Accounting
Perform a horizontal analysis for Mazzic Inc. Use 2010 as the base year.
Do not enter dollar signs or commas in the input boxes.
Round your answers to 2 decimal places.
Mazzic Inc. In Millions of Dollars |
||||
2013 | 2012 | 2011 | 2010 | |
Revenue | $468 | $356 | $252 | $197 |
Revenue Ratio | Answer% | Answer% | Answer% | 100% |
Net Income | $239 | $196 | $142 | $89 |
Net Income Ratio | Answer% | Answer% | Answer% | Answer% |
I have calculated everything but the something with the roundup must be wrong. Thank you!
In: Accounting
Brandlin Company of Anaheim, California, sells parts to a foreign customer on December 1, 2017, with payment of 26,000 korunas to be received on March 1, 2018. Brandlin enters into a forward contract on December 1, 2017, to sell 26,000 korunas on March 1, 2018. Relevant exchange rates for the koruna on various dates are as follows:
Date Spot Rate Forward Rate (to March 1, 2018)
December 1, 2017 $ 4.40 $ 4.475
December 31, 2017 4.50 4.600
March 1, 2018 4.65 N/A
Brandlin's incremental borrowing rate is 15 percent. The present value factor for two months at an annual interest rate of 15 percent (1.25 percent per month) is 0.9755. Brandlin must close its books and prepare financial statements at December 31.
a-1. Assuming that Brandlin designates the forward contract as a cash flow hedge of a foreign currency receivable and recognizes any premium or discount using the straight-line method, prepare journal entries for these transactions in U.S. dollars.
a-2. What is the impact on 2017 net income?
a-3. What is the impact on 2018 net income?
a-4. What is the impact on net income over the two accounting periods?
b-1. Assuming that Brandlin designates the forward contract as a fair value hedge of a foreign currency receivable, prepare journal entries for these transactions in U.S. dollars.
b-2. What is the impact on 2017 net income?
b-3. What is the impact on 2018 net income?
b-4. What is the impact on net income over the two accounting periods?
In: Accounting
The Kingbird, Inc. opened on April 1. All facilities were
completed on March 31. At this time, the ledger showed No. 101 Cash
$7,360, No. 140 Land $10,640, No. 145 Buildings (concession stand,
projection room, ticket booth, and screen) $6,640, No. 157
Equipment $7,360, No. 201 Accounts Payable $3,360, No. 275 Mortgage
Payable $8,640, and No. 311 Common Stock $20,000. During April, the
following events and transactions occurred.
Apr. 2 | Paid film rental of $1,170 on first movie. | |
3 | Ordered two additional films at $1,080 each. | |
9 | Received $2,250 cash from admissions. | |
10 | Made $2,140 payment on mortgage and $1,480 for accounts payable due. | |
11 | Kingbird, Inc. contracted with Dever Company to operate the concession stand. Dever is to pay 20% of gross concession receipts (payable monthly) for the rental of the concession stand. | |
12 | Paid advertising expenses $230. | |
20 | Received one of the films ordered on April 3 and was billed $1,080. The film will be shown in April. | |
25 | Received $5,200 cash from admissions. | |
29 | Paid salaries $1,500. | |
30 | Received statement from Dever showing gross concession receipts of $2,500 and the balance due to The Kingbird, Inc. of $500 ($2,500 × 20%) for April. Dever paid one-half of the balance due and will remit the remainder on May 5. | |
30 | Prepaid $1,050 rental on special film to be run in May. |
In addition to the accounts identified above, the chart of accounts
shows No. 112 Accounts Receivable, No. 136 Prepaid Rent, No. 400
Service Revenue, No. 429 Rent Revenue, No. 610 Advertising Expense,
No. 726 Salaries and Wages Expense, and No. 729 Rent Expense.
a. Enter the beginning balances in the ledger as of April 1.
b. Journalize the April transactions. Kingbird, Inc. records admission revenue as service revenue, rental of the concession stand as rent revenue, and film rental expense as rent expense. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. Record journal entries in the order presented in the problem. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
c. Post the April journal entries to the ledger. (Post
entries in the order of journal entries presented in the previous
part.)
d. Prepare a trial balance on April 30, 2019.
In: Accounting
Department G had 2,040 units 25% completed at the beginning of the period, 12,800 units were completed during the period, 1,700 units were 20% completed at the end of the period, and the following manufacturing costs debited to the departmental work in process account during the period: Work in process, beginning of period $30,000 Costs added during period: Direct materials (12,460 units at $9) 112,140 Direct labor 76,800 Factory overhead 25,600 All direct materials are placed in process at the beginning of production and the first-in, first-out method of inventory costing is used. What is the total cost of the departmental work in process inventory at the end of the period (round unit cost calculations to four decimal places and round your final answer to the nearest dollar)? a. $17,367 b. $23,473 c. $18,056 d. $15,300
In: Accounting
On January 1, 20X7, Pepper Company acquired 90 percent of the
outstanding common stock of Salt Corporation for $1,242,000. On
that date, the fair value of noncontrolling interest was equal to
$138,000. The entire differential was related to land held by Salt.
At the date of acquisition, Salt had common stock outstanding of
$520,000, additional paid-in capital of $200,000, and retained
earnings of $540,000. During 20X7, Salt sold inventory to Pepper
for $440,000. The inventory originally cost Salt $360,000. By
year-end, 30 percent was still in Pepper's ending inventory. During
20X8, the remaining inventory was resold to an unrelated customer.
Both Pepper and Salt use perpetual inventory systems.
Income and dividend information for both Pepper and Salt for 20X7
and 20X8 are as follows:
Pepper Company | Salt Corp. | ||||||||||||
Operating Income |
Dividends | Net Income | Dividends | ||||||||||
20X7 | $ | 860,000 | $ | 160,000 | $ | 360,000 | $ | 200,000 | |||||
20X8 | 910,000 | 200,000 | 420,000 | 200,000 | |||||||||
Assume Pepper uses the fully adjusted equity method to account for
its investment in Salt.
Required:
a. Present the worksheet consolidation entries necessary to prepare
consolidated financial statements for 20X7.
b. Present the worksheet consolidation entries necessary to prepare
consolidated financial statements for 20X8.
In: Accounting
Major Mills is a large manufacturer of breakfast cereal. One of its most popular products is Sugar-Bombs, which sells at wholesale for $55/case. |
The cost to produce is $42.20 per case, as follows: Ingredients, $8.70; Packaging, $4.10; Direct Labor, $3.40; Overhead, $26 (20% variable). |
A large grocery retailer has approached Major Mills with a proposal to create a house-brand version of Sugar-Bombs. |
The retailer offers to purchase 10,000 cases per month of the house brand for one year, after which the contract could be renewed. The retailer will purchase the house brand for $33/case. |
A slight change in the recipe would reduce ingredients cost by 30 cents per case. Packaging cost would increase by 12 cents per case because of a new ink required. |
There would be an initial annual setup cost of $18,000. Because Major Mills has excess capacity of only 9,000 cases per month on the production line, they would lose 1,000 cases per month of sales of Sugar-Bombs. |
a) Would accepting the retailer's offer be profitable for Major Mills? |
b) What other factors should Major Mills consider in deciding whether to accept this offer? |
In: Accounting
In: Accounting
Could anyone explain how changing accounts payable and increasing revenues changes the debt/equity ratio?
In: Accounting
On January 1, 20X7, Pepper Company acquired 90 percent of the
outstanding common stock of Salt Corporation for $1,242,000. On
that date, the fair value of noncontrolling interest was equal to
$138,000. The entire differential was related to land held by Salt.
At the date of acquisition, Salt had common stock outstanding of
$520,000, additional paid-in capital of $200,000, and retained
earnings of $540,000. During 20X7, Salt sold inventory to Pepper
for $440,000. The inventory originally cost Salt $360,000. By
year-end, 30 percent was still in Pepper's ending inventory. During
20X8, the remaining inventory was resold to an unrelated customer.
Both Pepper and Salt use perpetual inventory systems.
Income and dividend information for both Pepper and Salt for 20X7
and 20X8 are as follows:
Pepper Company | Salt Corp. | ||||||||||||
Operating Income |
Dividends | Net Income | Dividends | ||||||||||
20X7 | $ | 860,000 | $ | 160,000 | $ | 360,000 | $ | 200,000 | |||||
20X8 | 910,000 | 200,000 | 420,000 | 200,000 | |||||||||
Assume Pepper uses the fully adjusted equity method to account for
its investment in Salt.
Required:
a. Present the worksheet consolidation entries necessary to prepare
consolidated financial statements for 20X7.
b. Present the worksheet consolidation entries necessary to prepare
consolidated financial statements for 20X8.
In: Accounting
What are the characteristics of a good partner in a strategic alliance? Why do these partner traits help make a strategic alliance successful?
no Plagiarism please I need some help thank you please do not use the answer already on this site those two answers not make any sense to me and can you please make sure it's clear and concise I have a really bad eyes thank you
In: Accounting
In: Accounting
Andretti Company has a single product called a Dak. The company normally produces and sells 120,000 Daks each year at a selling price of $50 per unit. The company’s unit costs at this level of activity are given below:
Direct materials | $ | 8.50 | |
Direct labor | 11.00 | ||
Variable manufacturing overhead | 3.30 | ||
Fixed manufacturing overhead | 5.00 | ($600,000 total) | |
Variable selling expenses | 3.70 | ||
Fixed selling expenses | 5.50 | ($660,000 total) | |
Total cost per unit | $ | 37.00 | |
A number of questions relating to the production and sale of Daks follow. Each question is independent.
Required:
1-a. Assume that Andretti Company has sufficient capacity to produce 156,000 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its unit sales by 30% above the present 120,000 units each year if it were willing to increase the fixed selling expenses by $110,000. What is the financial advantage (disadvantage) of investing an additional $110,000 in fixed selling expenses?
1-b. Would the additional investment be justified?
2. Assume again that Andretti Company has sufficient capacity to produce 156,000 Daks each year. A customer in a foreign market wants to purchase 36,000 Daks. If Andretti accepts this order it would have to pay import duties on the Daks of $3.70 per unit and an additional $18,000 for permits and licenses. The only selling costs that would be associated with the order would be $2.10 per unit shipping cost. What is the break-even price per unit on this order?
3. The company has 800 Daks on hand that have some irregularities and are therefore considered to be "seconds." Due to the irregularities, it will be impossible to sell these units at the normal price through regular distribution channels. What is the unit cost figure that is relevant for setting a minimum selling price?
4. Due to a strike in its supplier’s plant, Andretti Company is unable to purchase more material for the production of Daks. The strike is expected to last for two months. Andretti Company has enough material on hand to operate at 25% of normal levels for the two-month period. As an alternative, Andretti could close its plant down entirely for the two months. If the plant were closed, fixed manufacturing overhead costs would continue at 40% of their normal level during the two-month period and the fixed selling expenses would be reduced by 20% during the two-month period.
a. How much total contribution margin will Andretti forgo if it closes the plant for two months?
b. How much total fixed cost will the company avoid if it closes the plant for two months?
c. What is the financial advantage (disadvantage) of closing the plant for the two-month period?
d. Should Andretti close the plant for two months?
5. An outside manufacturer has offered to produce 120,000 Daks and ship them directly to Andretti’s customers. If Andretti Company accepts this offer, the facilities that it uses to produce Daks would be idle; however, fixed manufacturing overhead costs would be reduced by 30%. Because the outside manufacturer would pay for all shipping costs, the variable selling expenses would be only two-thirds of their present amount. What is Andretti’s avoidable cost per unit that it should compare to the price quoted by the outside manufacturer?
In: Accounting