Questions
P11–13 Initial investment at various sale prices Ed Mann, sole owner of Edward Mann Consulting (EMC)...

P11–13 Initial investment at various sale prices Ed Mann, sole owner of Edward Mann Consulting (EMC) is replacing one machine with another. The old machine was purchased 3 years ago for an installed cost of $10,000. The firm is depreciating the machine under MACRS, using a 5-year recovery period (see Table 4.2). The new machine costs $24,000 and requires $2,000 in installation costs. The firm is subject to a 40% tax rate. In each of the following cases, calculate the initial investment for the replacement.

Table 4.2

Rounded Depreciation Percentages by Recovery Year Using MACRS for First Four Property Classes

Percentage by recovery yeara

Recovery year

3 years

5 years

7 years

10 years

   1

33%

20%

14%

10%  

   2

45

32

25

18

3

15

19

18

14

4

  7

12

12

12

5

12

  9

  9

6

  5

  9

  8

7

  9

  7

8

  4

  6

9

  6

10

  6

11

    

    

    

  4

Totals

100%

100%

100%

100%

  1. EMC sells the old machine for $11,000.
  2. EMC sells the old machine for $7,000.
  3. EMC sells the old machine for $2,900.
  4. EMC sells the old machine for $1,500.

I don't have a finance calculator. I have the TI84 PLus, please show work . thanks.

In: Accounting

Hickory Company manufactures two products—15,000 units of Product Y and 7,000 units of Product Z. The...

Hickory Company manufactures two products—15,000 units of Product Y and 7,000 units of Product Z. The company uses a plantwide overhead rate based on direct labor-hours. It is considering implementing an activity-based costing (ABC) system that allocates all $729,600 of its manufacturing overhead to four cost pools. The following additional information is available for the company as a whole and for Products Y and Z:

Activity Cost Pool Activity Measure Estimated Overhead Cost Expected Activity
Machining Machine-hours $ 227,700 11,000 MHs
Machine setups Number of setups $ 153,900 270 setups
Product design Number of products $ 91,000 2 products
General factory Direct labor-hours $ 257,000 13,200 DLHs
Activity Measure Product Y Product Z
Machine-hours 7,700 3,300
Number of setups 60 210
Number of products 1 1
Direct labor-hours 8,700 4,500

Required :

9. Using the ABC system, how much total manufacturing overhead cost would be assigned to Product Y?

10. Using the ABC system, how much total manufacturing overhead cost would be assigned to Product Z?

11. Using the plantwide overhead rate, what percentage of the total overhead cost is allocated to Product Y and Product Z?

12. Using the ABC system, what percentage of the Machining costs is assigned to Product Y and Product Z?

13. Using the ABC system, what percentage of Machine Setups cost is assigned to Product Y and Product Z?

14. Using the ABC system, what percentage of the Product Design cost is assigned to Product Y and Product Z?

15. Using the ABC system, what percentage of the General Factory cost is assigned to Product Y and Product Z?

In: Accounting

Compare among Sales and Marketing Systems, Accounting and Finance System, Human Resource System and Ethics Strategic...

Compare among Sales and Marketing Systems, Accounting and Finance System, Human Resource System and Ethics Strategic Enterprise System and give examples

In: Accounting

Gabriela and Johnny are married and filed a joint tax return. They had the following items...

Gabriela and Johnny are married and filed a joint tax return. They had the following items for 2018:

Salary $103,000
Loss in sale of § 1244 small business stock acquired 3 years ago (110,000)
Stock acquired 2 years ago became worthless during the year (10,000)
Long-term capital gain 75,000
Non-business bad debt (9000)

Gabriela's car was completely destroyed in a hurricane, which had been declared a federal disaster area. At the time of the hurricane, the car had a fair market value of $30,000 and an adjusted basis of $40,000. She used the car 100% of the time for personal use. She received an insurance recovery of $25,000.

1. Provide a detailed calculation of the couple's AGI.

Your Answer must:

(a) explain the rule for § 1244 small business stock and how it applies to the facts;

(b) show a detailed netting capital item;

(c) explains the rule for worthless stock;

(d) explains the rule for the tax treatment of nonbusiness bad debts.

2.(a) What is the rule for calculating the amount of the casualty loss?

(b) Apply the rule to the facts and show a detailed calculation of the loss.

(c) Which schedule does the casualty loss total appear on?

In: Accounting

The following transactions occurred during March 2021 for the Wainwright Corporation. The company owns and operates...

The following transactions occurred during March 2021 for the Wainwright Corporation. The company owns and operates a wholesale warehouse.

  1. Issued 48,000 shares of non-par common stock in exchange for $480,000 in cash.
  2. Purchased equipment at a cost of $76,000. $19,000 cash was paid and a notes payable to the seller was signed for the balance owed.
  3. Purchased inventory on account at a cost of $146,000. The company uses the perpetual inventory system.
  4. Credit sales for the month totaled $210,000. The cost of the goods sold was $126,000.
  5. Paid $6,500 in rent on the warehouse building for the month of March.
  6. Paid $7,150 to an insurance company for fire and liability insurance for a one-year period beginning April 1, 2021.
  7. Paid $126,000 on account for the merchandise purchased in 3.
  8. Collected $94,500 from customers on account.
  9. Recorded depreciation expense of $1,900 for the month on the equipment.


Prepare journal entries to record each of the transactions listed above. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

In: Accounting

Sam Strother and Shawna Tibbs are senior vice presidents of Mutual of Seattle. They are co-directors...

Sam Strother and Shawna Tibbs are senior vice presidents of Mutual of Seattle. They are co-directors of the company's pension fund management division, with Strother having responsibility for fixed income securities (primarily bonds) and Tibbs responsible for equity investments. A major new client, the Northwestern Municipal Alliance, has requested that Mutual of Seattle present an investment seminar to the mayors of the cities in the association, and Strother and Tibbs, who will make the actual presentation, have asked you to help them. To illustrate the common stock valuation process, Strother and Tibbs have asked you to analyze the Temp Force Company, an employment agency that supplies word processor operators and computer programmers to businesses with temporarily heavy workloads. You are to answer the following questions.

a. Describe briefly the legal rights and privileges of common stockholders.

b. (1) Write out a formula that can be used to value any stock, regardless of its dividend pattern. (2) What is a constant growth stock? How are constant growth stocks valued? (3) What happens if a company has a constant g that exceeds its rs? Will many stocks have expected g > rs in the short run (i.e., for the next few years)? In the long run (i.e., forever)?

c. Assume that Temp Force has a beta coefficient of 1.2, that the risk-free rate (the yield on T-bonds) is 7.0%, and that the market risk premium is 5%. What is the required rate of return on the firm's stock?

d. Assume that Temp Force is a constant growth company whose last dividend (D0, which was paid yesterday) was $2.00 and whose dividend is expected to grow indefinitely at a 6% rate. (1) What is the firm's expected dividend stream over the next 3 years? (2) What is the firm's current intrinsic stock price? (3) What is the stock's expected value 1 year from now? (4) What are the expected dividend yield, the expected capital gains yield, and the expected total return during the first year?

In: Accounting

After reading the chapter chapter 7 content folder answer one of the following questions. 1. Describe...

After reading the chapter chapter 7 content folder answer one of the following questions. 1. Describe the characteristics of a proprietary funds? Explain the difference between an Enterprise Fund and an Internal Service Fund? 2. When is it required to establish an enterprise fund? How does a enterprise fund show up in the Governmental Wide financial statements both the statement of Net Assets and Statements of Activities? 3. List at least 5 differences between a proprietary fund and a general fund?

In: Accounting

1.Galehouse Gas Stations Inc. expects sales to increase from $1,750,000 to $1,950,000 next year. Galehouse believes...

1.Galehouse Gas Stations Inc. expects sales to increase from $1,750,000 to $1,950,000 next year. Galehouse believes that net assets (Assets − Liabilities) will represent 80 percent of sales. His firm has an 12 percent return on sales and pays 40 percent of profits out as dividends.
  
a. What effect will this growth have on funds?

The cash balance will (increase by or decrease by) ___#__.

2.Bronco Truck Parts expects to sell the following number of units at the prices indicated under three different scenarios in the economy. The probability of each outcome is indicated.
Outcome Probability Units Price
A 0.30 490 $25
B 0.30 88     $33
C 0.40 1,190 $38

What is the expected value of the total sales projection?

3.Sales for Ross Pro’s Sports Equipment are expected to be 47,000 units for the coming month. The company likes to maintain 15 percent of unit sales for each month in ending inventory. Beginning inventory is 12,000 units.
How many units should the firm produce for the coming month?

4.Vitale Hair Spray had sales of 21,000 units in March. A 50 percent increase is expected in April. The company will maintain 20 percent of expected unit sales for April in ending inventory. Beginning inventory for April was 1,050 units.
How many units should the company produce in April?

5.At the end of January, Higgins Data Systems had an inventory of 680 units, which cost $12 per unit to produce. During February the company produced 1,010 units at a cost of $15 per unit.
If the firm sold 1,180 units in February, what was its cost of goods sold? (Assume LIFO inventory accounting.)

6. The Bradley Corporation produces a product with the following costs as of July 1, 20X1:
Material    $5 per unit
Labor 3 per unit
Overhead 1 per unit
Beginning inventory at these costs on July 1 was 3,450 units. From July 1 to December 1, 20X1, Bradley Corporation produced 12,900 units. These units had a material cost of $4, labor of $6, and overhead of $3 per unit. Bradley uses LIFO inventory accounting.
a. Assuming that Bradley Corporation sold 14,800 units during the last six months of the year at $18 each, what is its gross profit?

b. What is the value of ending inventory?

7.J. Lo’s Clothiers has forecast credit sales for the fourth quarter of the year:
September (actual)   $57,000
Fourth Quarter
October $47,000
November   $42,000
December $67,000
Experience has shown that 15 percent of sales are collected in the month of sale, 70 percent are collected in the following month, and 15 percent are never collected.

Prepare a schedule of cash receipts for J. Lo’s Clothiers covering the fourth quarter (October through December):
J. Lo’s Clothiers
Sept Oct Nov Dec
a. Credit sales
In month of sales
One month after sales
Total cash receipts

8. Wright Lighting Fixtures forecasts its sales in units for the next four months as follows:
March $25,000
April $27,000
May $24,500
June $23,000

Wright maintains an ending inventory for each month in the amount of two and one-half times the expected sales in the following month. The ending inventory for February (March’s beginning inventory) reflects this policy. Materials cost $7 per unit and are paid for in the month after production. Labor cost is $11 per unit and is paid for in the month incurred. Fixed overhead is $21,500 per month. Dividends of $21,900 are to be paid in May. The firm produced 24,000 units in February.
Complete a production schedule and a summary of cash payments for March, April, and May. Remember that production in any one month is equal to sales plus desired ending inventory minus beginning inventory.

Wright Lighting Fixtures
Production Schedule
March April May June
a. Projected unit sales
b. Desired ending inventory
c. Total units required
d. Beginning inventory e. Units to be produced
Cash Payments
February March April May
a. Units produced
b. Material cost
c. Labor cost
d. Fixed overhead
e. Dividends
f. Total Cash Payments

In: Accounting

Worley Company buys surgical supplies from a variety of manufacturers and then resells and delivers these...

Worley Company buys surgical supplies from a variety of manufacturers and then resells and delivers these supplies to hundreds of hospitals. Worley sets its prices for all hospitals by marking up its cost of goods sold to those hospitals by 9%. For example, if a hospital buys supplies from Worley that cost Worley $100 to buy from manufacturers, Worley would charge the hospital $109 to purchase these supplies.

For years, Worley believed that the 9% markup covered its selling and administrative expenses and provided a reasonable profit. However, in the face of declining profits, Worley decided to implement an activity-based costing system to help improve its understanding of customer profitability. The company broke its selling and administrative expenses into five activities as shown:

Activity Cost Pool (Activity Measure) Total Cost Total Activity
Customer deliveries (Number of deliveries) $ 672,000 8,000 deliveries
Manual order processing (Number of manual orders) 365,000 5,000 orders
Electronic order processing (Number of electronic orders) 231,000 11,000 orders
Line item picking (Number of line items picked) 989,000 460,000 line items
Other organization-sustaining costs (None) 630,000
Total selling and administrative expenses $ 2,887,000

Worley gathered the data below for two of the many hospitals that it serves—University and Memorial (each hospital purchased medical supplies that had cost Worley $32,000 to buy from manufacturers):

Activity

Activity Measure University Memorial
Number of deliveries 16 23
Number of manual orders 0 41
Number of electronic orders 20 0
Number of line items picked 140 210

Required:

1. Compute the total revenue that Worley would receive from University and Memorial.

2. Compute the activity rate for each activity cost pool.

3. Compute the total activity costs that would be assigned to University and Memorial.

4. Compute Worley’s customer margin for University and Memorial. (Hint: Do not overlook the $32,000 cost of goods sold that Worley incurred serving each hospital.)

In: Accounting

Silver Company makes a product that is very popular as a Mother’s Day gift. Thus, peak...

Silver Company makes a product that is very popular as a Mother’s Day gift. Thus, peak sales occur in May of each year, as shown in the company’s sales budget for the second quarter given below:

April May June Total
Budgeted sales (all on account) $340,000 $540,000 $170,000 $1,050,000

From past experience, the company has learned that 20% of a month’s sales are collected in the month of sale, another 75% are collected in the month following sale, and the remaining 5% are collected in the second month following sale. Bad debts are negligible and can be ignored. February sales totaled $270,000, and March sales totaled $300,000.

Required:

1. Prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter.

2. What is the accounts receivable balance on June 30th?

Complete this question by entering your answers in the tabs below.

  • Required 1
  • Required 2

What is the accounts receivable balance on June 30th?

Complete this question by entering your answers in the tabs below.

  • Required 1
  • Required 2

Prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter.

Requirement 1
Schedule of Expected Cash Collections
April May June Total
February sales
March sales
April sales
May sales
June sales
Total cash collections
Requirement 2
Total accounts receivable at June 30

In: Accounting

Samuel and Darcy are partners. The partnership capital for Samuel is $50,000 and that of Darcy...

Samuel and Darcy are partners. The partnership capital for Samuel is $50,000 and that of Darcy is $60,000. Josh is admitted as a new partner by investing $50,000 cash. Josh is given a 20% interest in return for his investment. The amount of the bonus to the old partners is ______________ ? Record journal entries to record the following separate transactions related to issuing stock: On February 20, a company issues 10,000 shares of $4 par value common stock in exchange for services rendered to help with incorporation. The services are valued at $50,000. On March 1, a company issues 42,500 shares of $4 par value common stock for $297,500. On September 10, a company issues 20,000 shares of $20 par value preferred stock for $28 per share. Date Account Debit Credit For each of the following separate (unrelated) dividend transactions, prepare the journal entry:

In: Accounting

Question a) Mr. Jones purchased 250 shares of Ruth Limited on February 1 of the current...

Question a)

Mr. Jones purchased 250 shares of Ruth Limited on February 1 of the current year for $20 per share. On May 1 of the current year, he purchased 100 more shares for $25 per share. On June 20 of the current year, Mr. Jones sells 100 shares for $15 per share. His allowable capital loss on June 20 is $643.00.

True
False

Question c)

Which of the following is not included in ITA 53 as an adjustment to the adjusted cost base of an asset?

CCA deductions taken.

Forgiveness of debt on property.

Government grants.

Undeducted interest and property tax on vacant land

In: Accounting

Required information [The following information applies to the questions displayed below.] Arndt, Inc., reported the following...

Required information

[The following information applies to the questions displayed below.]

Arndt, Inc., reported the following for 2018 and 2019 ($ in millions):

2018 2019
Revenues $ 896 $ 993
Expenses 766 806
Pretax accounting income (income statement) $ 130 $ 187
Taxable income (tax return) $ 125 $ 210
Tax rate: 40%
  1. Expenses each year include $30 million from a two-year casualty insurance policy purchased in 2018 for $60 million. The cost is tax deductible in 2018.
  2. Expenses include $3 million insurance premiums each year for life insurance on key executives.
  3. Arndt sells one-year subscriptions to a weekly journal. Subscription sales collected and taxable in 2018 and 2019 were $32 million and $31 million, respectively. Subscriptions included in 2018 and 2019 financial reporting revenues were $19 million ($8 million collected in 2017 but not recognized as revenue until 2018) and $27 million, respectively. Hint: View this as two temporary differences—one reversing in 2018; one originating in 2018.
  4. 2018 expenses included a $14 million unrealized loss from reducing investments (classified as trading securities) to fair value. The investments were sold in 2019.
  5. During 2017, accounting income included an estimated loss of $5 million from having accrued a loss contingency. The loss was paid in 2018 at which time it is tax deductible.
  6. At January 1, 2018, Arndt had a deferred tax asset of $5 million and no deferred tax liability.

Required:
1. Which of the five differences described are temporary and which are permanent differences?Required:

3. Compute the deferred tax amounts that should be reported on the 2018 balance sheet. (Enter your answers in millions (i.e., 10,000,000 should be entered as 10).)

In: Accounting

PANTHER CORPORATION Expected Account Balances for December 31, Year 2 Cash $ 5,600 Accounts receivable 328,000...

PANTHER CORPORATION Expected Account Balances for December 31, Year 2

Cash $ 5,600

Accounts receivable 328,000

Inventory (January 1, Year 2) 300,000

Plant and equipment 560,000

Accumulated depreciation $ 172,000

Accounts payable 188,000

Notes payable (due within one year) 208,000

Accrued payables 101,000

Common stock 360,000

Retained earnings 514,600

Sales revenue 2,480,000

Other income 52,000

Manufacturing costs Materials 831,000

Direct labor 881,000

Variable overhead 581,000

Depreciation 28,000

Other fixed overhead 39,000

Marketing Commissions 96,000

Salaries 72,000

Promotion and advertising 196,000

Administrative Salaries 72,000

Travel 14,000

Office costs 44,000

Income taxes - Dividends 28,000 $ 4,075,600

$ 4,075,600 Adjustments for the change in inventory and for income taxes have not been made. The scheduled production for this year is 400,000 units, and planned sales volume is 350,000 units. Sales and production volume was 250,000 units last year. The company uses a full-absorption costing and FIFO inventory system and is subject to a 40 percent income tax rate.

The actual income statement for last year follows:

PANTHER CORPORATION Statement of Income and Retained Earnings For the Budget Year Ended December 31, Year 1 Revenues

Sales revenue $ 1,900,000

Other income 80,000 $ 1,980,000 Expenses

Cost of goods sold

Materials $ 540,000

Direct labor 552,000

Variable overhead 352,000

Fixed overhead 56,000 $ 1,500,000

Beginning inventory 300,000 $ 1,800,000

Ending inventory 300,000 $ 1,500,000

Selling Salaries $ 62,000

Commissions 68,000

Promotion and advertising 134,000 264,000

General and administrative Salaries $ 64,000

Travel 9,500 Office costs 40,000 113,500

Income taxes 41,000 1,918,500

Operating profit 61,500

Beginning retained earnings 481,100

Subtotal $ 542,600

Less dividends 28,000

Ending retained earnings $ 514,600

Required: Prepare a budgeted income statement and balance sheet using Excel template.

In: Accounting

aroque Beverages (BB) produces and sells fruit drinks. Production is done in two stages: (1) fresh...

aroque Beverages (BB) produces and sells fruit drinks. Production is done in two stages: (1) fresh fruit is processed into juice concentrate and (2) juice concentrate is processed into the final beverage. Currently, BB has one factory that can process 7,500 units of juice concentrate and 10,000 units of the final beverage (one unit of juice concentrate is required to make one unit of the final beverage). Expected per unit manufacturing costs, based on production of 7,500 units, in the two stages are as follows:
​Stage One​Stage Two
​Direct Material​ £80​ £90
​Direct Labor​ £40​ £20
​Variable OH​ £60​ £30
​Fixed OH​ £50​ £30
For the upcoming fiscal year, Ferenc Deák (the divisional manager of BB) expects demand to be for 10,000 units of the final beverage at a price of £750/unit; however he is constrained to selling only 7,500 units (and therefore only expects to produce 7,500 units of both the juice concentrate and the final beverage). Additionally, he expects to incur £1,175,000 in fixed non-manufacturing costs and £750,000 in corporate overhead charges. This charge is meant to ensure that Ferenc's division pays for its usage of corporate services (including general marketing, legal and R&D). When Ferenc enquired as to the rationale for the amount of the allocation, he was told that it was because his division was one of the largest divisions of the company.
Ferenc is paid a bonus of 3% of BB residual income (but before bonus payment) and 1% of the corporate residual income (but before bonus payments); corporate profit is forecasted to be £1,890,000. The capital invested in BB is equal to £3,000,000 and the capital invested in the company as a whole is equal to £12,000,000. The corporate wide cost of capital is 10%.
Required:
a. Calculate Ferenc's expected bonus for the next fiscal year.
Ferenc has been approached by Irina Spalko - manager of Mamadou (another division within the same company) - who wants to supply BB with 10,000 units of juice concentrate (in an all-or-nothing transaction). Ferenc knows that the decentralized structure of the organisation means that he can decide whether to accept the offer, without interference from the head office. Ferenc also knows that if he accepts the offer, then the factory space dedicated to producing juice concentrate will sit idle.
b. Calculate the maximum transfer price that Ferenc would be willing to pay per unit to Mamadou for 10,000 units of juice concentrate to ensure that BB profit remains unchanged. (Note: the budgeted corporate charge will remain at £750,000).

In: Accounting