Suppose Stuart Company has the following results related to cash flows for 2018:

Net Income of $5,600,000
Increase in Accounts Payable of $600,000
Decrease in Accounts Receivable of $900,000
Depreciation of $1,900,000
Increase in Inventory of $200,000
Other Adjustments from Operating Activities of -$800,000

Assuming no other cash flow adjustments than those listed above, create a statement of cash flows with amounts in thousands.

What is the Net Cash Flow from Operating Activities?

Please specify your answer in the same units as the statement of cash flows.

Operating Leverage

Beck Inc. and Bryant Inc. have the following operating data:

a. Compute the operating leverage for Beck Inc. and Bryant Inc. If required, round to one decimal place.

b. How much would income from operations increase for each company if the sales of each increased by 10%? If required, round answers to nearest whole number.

c. The difference in the increases  of income from operations is due to the difference in the operating leverages. Beck Inc.'s higher  operating leverage means that its fixed costs are a larger  percentage of contribution margin than are Bryant Inc.'s.

E7-5 Calculating Ending Inventory and Cost of Goods Sold Under FIFO, LIFO, and Average Cost LO7-2

Penn Company uses a periodic inventory system. At the end of the annual accounting period, December 31 of the current year, the accounting records provided the following information for product 1:

Required:

Compute ending inventory and cost of goods sold for the current year under FIFO, LIFO, and average cost inventory costing methods. (Round "Average cost per unit" to 2 decimal places and final answers to nearest whole dollar amount.)

1. Discuss in 2 pages format APA, privacy issues of the internet of things (IoT) facing accounting departments in the U.S, and what policies and/or controls may need to be added/strengthened to protect privacy.

19. Under sum-of-the-years’-digits depreciation . . .

a. the book value remains the same each year.

b. the depreciation rate changes each year.

c. the denominator of the SYD fraction changes each year.

d. all of the above.

20. For assets acquired during the year, the sum-of-the-years’-digits method requires that the same depreciation rate be used . . .

a. for the remaining months of the year of acquisition, then again in the final year of the asset’s estimated life for any months not depreciated in Year 1.

b. for 12 consecutive months, even if that results in the same rate being used in two different calendar years.

c. throughout the life of the asset.

d. until the end of the calendar year, then recomputed for the next calendar year.

21. Company records show that an employee provided with a company car drove it 80% for business and 20% for personal use. The company reports the personal use as income on the employee’s W-2. As a result . . .

a. the company can depreciate 80% of the car’s cost basis.

b. the company cannot depreciate the car.

c. the company can depreciate 100% of the car’s cost basis.

d. the company can depreciate the car without IRS limits on annual depreciation.

22. On which of the following assets can a company take a Sec. 179 deduction?

a. a warehouse

b. a computer

c. a rental apartment building

d. an office building

X Company is planning to stop the production and sale of Product Q, which lost $8,000 last year. If Product Q is dropped, two things will happen in each of the next three years: 1) last year's loss will be avoided, and 2) sales of Product R will be increased, contributing $10,000 to annual profits. In addition, if Product Q is dropped, the company will be able to sell some equipment immediately for $14,000. Assuming a discount rate of 4%, what is the net present value of stopping the production and sale of Product Q?

Could you give me an answer as fast as you can? Please..! Thank You!

Learning Objectives: CHAPTER 7

1. Measure and account for the cost of plant assets
2. Distinguish a capital expenditure from an immediate expense
3. Measure and record depreciation on plant assets
4. Analyze the effect of a plant asset disposal
5. Apply GAAP for natural resources and intangible assets
6. Explain the effect of an asset impairment on the financial statements
7. Analyze rate of return on assets
8. Analyze the cash flow impact of long-lived asset transactions

EXAMPLE OF WHAT I'M LOOKING FOR:

One thing I found challenging was the credits and debits concept from chapter two and matching them up, (common stock would be a cash debit and stock credit). Once I got it down it was one of those "why didn't it make sense to me sooner" moments but at the time I didn't understand and would switch things. How I approached the chapter was really to make sure I understood all the terms, ie notes payable, accounts receivable, etc. Being able to understand them without going back to the textbook made the process a bit faster and overall easier. Another thing was really taking advantage of the internet and that if there was something in the textbook I didn't understand, looking it up on Google and going through different websites and tutorials. While going through the problems I made sure to take as thorough notes as I could with information that I knew would help me moving forward, targeting the problems that were difficult for me. Being able to go back and read through something that was written in a way that made the most sense to me as an individual definitely proved helpful. I also Skyped a friend who is currently enrolled in a financial accounting class and we would work through problems together.

Imagine that you are a Certified Public Accountant (CPA) with a new client who needs an opinion on the most advantageous capital structure of a new corporation. Your client formed the corporation in question to provide technology to the medical profession to facilitate compliance with the Health Insurance Portability and Accountability Act (HIPAA). Your client is very excited because of the ability to secure several significant contracts with enough capital.

Use the Internet and Strayer Library to research the advantages and disadvantages of debt for capital formation versus equity for capital formation of a corporation. Prepare a formal letter to the client using the six (6) step tax research process in Chapter 1 that was demonstrated in Appendix A on page 7 of your textbook as a guide.

Write a one to two (1-2) page letter in which you:

1. Compare the tax advantages of debt versus equity capital formation of the corporation for
   the client.
2. Recommend to the client whether he / she should use debt or equity for capital formation of the new corporation, based on your research. Provide a rationale for the response.

Exercise 12-25 (Algorithmic)
Fair Value and Equity Methods

Nadal Corporation purchased 8,800 common shares of Beck Inc., on January 1, 2018, for $107,000. During 2018, Beck declared and paid cash dividends to Nadal in the amount of $7,000. Nadal's share of Beck's net income for 2018 was $5,700. At December 31, 2018, the fair value of the 10,000 shares was $122,000. This is Nadal's only investment.

Required:

1. Assume that Beck has 66,000 common shares outstanding. What journal entries will Nadal make during 2018 relative to this investment?

2. Assume that Beck has 35,200 common shares outstanding. What journal entries will Nadal make during 2018 relative to this investment?

Could you write detailed calculation getting 2018 Dec 31 Investments-Equity Method and Investment Income-Equity Method

Ripit Company wants to buy a numerically controlled (NC) machine to be used in producing specially machined parts for manufacturers of tractors The outlay required is $480,000. The NC equipment will last five years with no expected salvage value. The expected after-tax cash flows associated with the project follow:

Year               Cash Revenues       Cash Expenses

1                      $780,000                   $600,000

2                        780,000                     600,000

3                        780,000                     600,000

4                        780,000                     600,000

5                        780,000                     600,000

Required:

1. Compute the payback period for the NC equipment.

2. Compute the NC equipment's ARR.

3. Compute the investment's NPV, assuming a required rate of return of 10 percent.

4. Compute the investment's IRR.

9. Younger Corporation reports that at an activity level of 8,700 units, its total variable cost is $653,109 and its total fixed cost is $658,416.

Required:

For the activity level of 8,800 units, compute: (a) the total variable cost; (b) the total fixed cost; (c) the total cost; (d) the average variable cost per unit; (e) the average fixed cost per unit; and (f) the average total cost per unit. Assume that this activity level is within the relevant range.

10. Match the following terms to the appropriate statement by placing the letter to the left of each statement.

a.Committed fixed cost b. Fixed Cost c. Variable Cost d. Total Cost e. Discretionary Fixed Cost f. High-low method g. Mixed Cost h. Relevant Range i. Scattergraph j. Step cost

1. Cost that does not change in total as long as production is in the relevant range.

2. Fixed costs that cannot be changed over the short run.

3. Cost that changes in total as production changes but remains unchanged per unit.

4. The sum of fixed costs and variable costs

5. The normal level of operating activity.

6. Fixed costs that can be changed over the short run.

7. A cost that has both a fixed and variable component.

8. A cost that is fixed over only a small range of activity.

9. A graph that shows total costs in relation to volume, or activity level.

10. A method of estimating the fixed and variable cost components of a mixed cost that requires using only two data points, the lowest point of activity and the highest point of activity.

11. Indicate which of the following costs are classified as mixed or step costs.

12. Vest Construction Company’s cost of renting a crane for the last four months is as follows:

Using the high-low method, what is the company’s estimated variable and fixed component of operating expenses? What is the total cost equation? What would be the estimated total cost if a crane is rented for 60 hours per month?

Financial statements for Askew Industries for 2021 are shown below (in thousands):

Required:
Calculate the following ratios for 2021. (Consider 365 days a year. Do not round intermediate calculations and round your final answers to 2 decimal places.)
1. inventory turn over ratio:________

2. Average days in inventory:_______ days

3. Receivables turnover rate:_______

4. Average collection period:________days

5. Asset turnover ratio:_________

6. Profit margin on sales:______%

7. Return on assets:__________%

8. Return on equity:________%

9. Equity multiplier:____________times

10. Return on equity (using the DuPoint framework):_________%

Backcountry Adventures is a Colorado-based outdoor travel agent that operates a series of backcountry huts. Currently, the value of the firm is $3.8 million. But profits will depend on the amount of snowfall: If it is good year, the firm will be worth $5.2 million, and if it is a bad year it will be worth $2.5 million. Suppose managers always keep the debt to equity ratio of the firm at 30%, and the debt is riskless.

a. What is the initial amount of debt?
b. Calculate the percentage change in the value of the firm, its equity and its debt once the level of snowfall is revealed, but before the firm adjusts the debt level to achieve its target debt to equity ratio.
c. Calculate the percentage change in the value of outstanding debt once the firm adjusts to its target debt-equity ratio.
d. What does this imply about the riskiness of the firm's tax shields. Explain.

Required information Great Adventures Problem AP3-1 [The following information applies to the questions displayed below.] Tony and Suzie graduate from college in May 2021 and begin developing their new business. They begin by offering clinics for basic outdoor activities such as mountain biking or kayaking. Upon developing a customer base, they’ll hold their first adventure races. These races will involve four-person teams that race from one checkpoint to the next using a combination of kayaking, mountain biking, orienteering, and trail running. In the long run, they plan to sell outdoor gear and develop a ropes course for outdoor enthusiasts. On July 1, 2021, Tony and Suzie organize their new company as a corporation, Great Adventures Inc. The articles of incorporation state that the corporation will sell 36,000 shares of common stock for $1 each. Each share of stock represents a unit of ownership. Tony and Suzie will act as co-presidents of the company. The following transactions occur from July 1 through December 31. Jul. 1 Sell $18,000 of common stock to Suzie. Jul. 1 Sell $18,000 of common stock to Tony. Jul. 1 Purchase a one-year insurance policy for $4,320 ($360 per month) to cover injuries to participants during outdoor clinics. Jul. 2 Pay legal fees of $1,500 associated with incorporation. Jul. 4 Purchase office supplies of $1,400 on account. Jul. 7 Pay for advertising of $370 to a local newspaper for an upcoming mountain biking clinic to be held on July 15. Attendees will be charged $40 on the day of the clinic. Jul. 8 Purchase 10 mountain bikes, paying $12,300 cash. Jul. 15 On the day of the clinic, Great Adventures receives cash of $2,800 from 70 bikers. Tony conducts the mountain biking clinic. Jul. 22 Because of the success of the first mountain biking clinic, Tony holds another mountain biking clinic and the company receives $3,350. Jul. 24 Pay $960 to a local radio station for advertising to appear immediately. A kayaking clinic will be held on August 10, and attendees can pay $110 in advance or $160 on the day of the clinic. Jul. 30 Great Adventures receives cash of $7,700 in advance from 70 kayakers for the upcoming kayak clinic. Aug. 1 Great Adventures obtains a $40,000 low-interest loan for the company from the city council, which has recently passed an initiative encouraging business development related to outdoor activities. The loan is due in three years, and 6% annual interest is due each year on July 31. Aug. 4 The company purchases 14 kayaks, paying $20,400 cash. Aug. 10 Twenty additional kayakers pay $3,200 ($160 each), in addition to the $7,700 that was paid in advance on July 30, on the day of the clinic. Tony conducts the first kayak clinic. Aug. 17 Tony conducts a second kayak clinic, and the company receives $11,900 cash. Aug. 24 Office supplies of $1,400 purchased on July 4 are paid in full. Sep. 1 To provide better storage of mountain bikes and kayaks when not in use, the company rents a storage shed for one year, paying $3,240 ($270 per month) in advance. Sep. 21 Tony conducts a rock-climbing clinic. The company receives $14,000 cash. Oct. 17 Tony conducts an orienteering clinic. Participants practice how to understand a topographical map, read an altimeter, use a compass, and orient through heavily wooded areas. The company receives $18,000 cash. Dec. 1 Tony decides to hold the company’s first adventure race on December 15. Four-person teams will race from checkpoint to checkpoint using a combination of mountain biking, kayaking, orienteering, trail running, and rock-climbing skills. The first team in each category to complete all checkpoints in order wins. The entry fee for each team is $500. Dec. 5 To help organize and promote the race, Tony hires his college roommate, Victor. Victor will be paid $40 in salary for each team that competes in the race. His salary will be paid after the race. Dec. 8 The company pays $1,800 to purchase a permit from a state park where the race will be held. The amount is recorded as a miscellaneous expense. Dec. 12 The company purchases racing supplies for $2,900 on account due in 30 days. Supplies include trophies for the top-finishing teams in each category, promotional shirts, snack foods and drinks for participants, and field markers to prepare the racecourse. Dec. 15 The company receives $20,000 cash from a total of forty teams, and the race is held. Dec. 16 The company pays Victor’s salary of $1,600. Dec. 31 The company pays a dividend of $3,500 ($1,750 to Tony and $1,750 to Suzie). Dec. 31 Using his personal money, Tony purchases a diamond ring for $4,900. Tony surprises Suzie by proposing that they get married. Suzie accepts and they get married! The following information relates to year-end adjusting entries as of December 31, 2021. Depreciation of the mountain bikes purchased on July 8 and kayaks purchased on August 4 totals $8,500. Six months’ of the one-year insurance policy purchased on July 1 has expired. Four months of the one-year rental agreement purchased on September 1 has expired. Of the $1,400 of office supplies purchased on July 4, $270 remains. Interest expense on the $40,000 loan obtained from the city council on August 1 should be recorded. Of the $2,900 of racing supplies purchased on December 12, $140 remains. Suzie calculates that the company owes $13,700 in income taxes. Part 7 Post the closing entries of retained earnings to the T-account.

How do I post to the T-account?

Alan Legler requires an estimate of the cost of goods lost by fire on March 9. Merchandise on hand on January 1 was $38,600. Purchases since January 1 were $65,700; freight-in, $3,300; purchase returns and allowances, $2,200. Sales are made at 33 ¹/₃% above cost and totaled $99,900 to March 9. Goods costing $10,000 were left undamaged by the fire; remaining goods were destroyed.

Compute the cost of goods destroyed. (Round gross profit percentage and final answer to 0 decimal places, e.g. 15% or 125.)

Compute the cost of goods destroyed, assuming that the gross profit is 33 ¹/₃% of sales. (Round ratios for computational purposes to 5 decimal places, e.g. 78.72345% and final answer to 0 decimal places, e.g. 28,987.)