Merrill Corp. has the following information available about a potential capital investment:   

Assume straight line depreciation method is used.  


Required:
1. Calculate the project’s net present value. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor(s) from the tables provided. Do not round intermediate calculations. Round the final answer to nearest whole dollar.)

         

2. Without making any calculations, determine whether the internal rate of return (IRR) is more or less than 7 percent.

    

   

3. Calculate the net present value using a 13 percent discount rate. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor(s) from the tables provided. Do not round intermediate calculations. Round the final answer to nearest whole dollar.)

       

4. Without making any calculations, determine whether the internal rate of return (IRR) is more or less than 13 percent.

    

On August 15, 2017, Jarvis Company issued 50,000 options on the shares of RBC (Royal Bank Corporation). Each option gives the option holder the right to buy one share of RBC at $60 per share until March 16, 2018. Jarvis received $25,000 for issuing these options. At the company’s year-end of December 31, 2017, the options contracts traded on the Montreal Exchange at $.40 per contract. On March 16, 2018, RBC shares closed at $58 per share, none of the options were exercised, so the options had to be removed and any gain or loss earned thus far reported.

Required:

Record all journal entries related to these call options.

Selected data derived from the income statement and balance sheet of National Beverage Co. for a recent year are as follows:

Required:

P6-6A. Goods in Transit The Yankee Wholesale Company sells merchandise to a variety of retailers. Yankee uses different freight terms with its various customers and suppliers. All sales are made on account.

Required

For each of the following transactions, indicate which company has ownership of the goods in transit:

a. Yankee sold merchandise to X-Mart stores, with shipping terms of F.O.B shipping point.

b. Yankee purchased merchandise from Zendo Manufacturing Company, with shipping terms of F.O.B. destination.

c. Yankee Sold merchandise to Mary's boutique, with shipping terms of F.O.B destination.

d. Sunshine Manufacturing Company sold merchandise to Yankee, with shipping terms of F.O.B. shipping point.

e. Yankee purchased merchandise from Warfield Manufacturing Company, with freight terms of F. O. B shipping point.

f. Stevenson Stores purchased merchandise from Yankee, with shipping terms of F.O.B shipping point.

P6-7A. Lower-of-Cost-or-Net Realizable Value Method The Vandy Company had the following inventory at year-end:

   Unit Price

   Quantity Cost Net Realizable Value

Fans

Model X1...................................................................................300 $18    $19

Model X2..................................................................................250    23 24

Model X3..................................................................................450    29 25

Heaters

Model B7...................................................................................500    24 30

Model B8...................................................................................290 35    32   

Model B9...................................................................................100 41    37

Required

a. Determines the value of ending inventory after applying the lower-of-cost-or-net realizable value method to each item of inventory.

b. Would the net income be lower under the cost method or the lower-of-cost-or-net realizable value method?

Maher Corporation, which has only one product, has provided the following data concerning its most recent month of operations:

Required:

a. What is the unit product cost for the month under variable costing?

b. What is the unit product cost for the month under absorption costing?

c. Prepare a contribution format income statement for the month using variable costing.

d. Prepare an income statement for the month using absorption costing.

e. Reconcile the variable costing and absorption costing net operating incomes for the month.

Consolidation at date of acquisition (purchase price greater than book value, acquisition journal entries
Assume that the parent company acquires its subsidiary by exchanging 50,000 shares of its $1 par value Common Stock, with a fair value on the acquisition date of $30 per share, for all of the outstanding voting shares of the investee. In its analysis of the investee company, the parent values all of the subsidiary’s assets and liabilities at an amount equaling their book values except for an unrecorded Trademark with a fair value of $120,000, an unrecorded Video Library valued at $300,000, and Patented Technology with a fair value of $60,000.

a. Prepare the journal entry that the parent makes to record the acquisition.

b. Given the following acquisition-date balance sheets of the parent and the subsidiary, prepare the consolidation entries.

c. Prepare the consolidation spreadsheet.

d. Where were the intangible assets on the parent or subsidiary’s balance sheets?

A.)On the parent's balance sheet embedded in the equity investment account. On the subsidiary's balance sheet, each intangible asset is listed.

B.)On the parent's balance sheet embedded in the equity investment account. After the consolidation process is complete, each intangible asset is listed on the consolidated balance sheet.

C.)On the subsidiary's balance sheet embedded in retained earnings. After the consolidation process is complete, each intangible asset is listed on the consolidated balance sheet.

Cash Flow Issues

• Explain cash-flow issues relevant to reimbursement of providers.
• Compare the risks to payer and provider of each reimbursement methodology.
• Examine the concept of positive cash flow in relation to claims processing.

Reimbursement issues

• Explain timely payment, with examples.
• Describe recoupment, with examples.
• Examine the concept of difficult economics in relation to a healthcare provider

Prepare in good form:

an Income Statement, Statement of Owner’s Equity

2. Classified Balance Sheet,

3. Calculate the Current Ratio and prepare the Closing Entries in a general journal

Question #1 – 35 Marks

The following is the adjusted trial balance for Reid Tax and Accounting Services for the year ended December 31, 2017

Reid Tax and Accounting Services Adjusted Trial Balance December 31, 2017

Account Title Dr Cr
Accounts payable 6,300
Accounts Receivable 9,000
Accumulated Depreciation Building 41,000
Accumulated Depreciation Equipment $4,200
Building    350,000
Cash $98,000
Depreciation expense, building 7,000
Depreciation expense, equipment 800
Insurance expense 5,200
Interest payable 2,000
Land 700,000
Long-term note payable 52,000
Fred Reid, Capital 1,010,000
Fred Reid, Withdrawals 200,500
Office equipment 8,000
Office supplies 3,300
Prepaid Insurance 9,000
Prepaid Rent 15,000
Rent expense 6,000
Salaries expense 89,000
Salaries payable 14,500
Service fees earned 370,800
Totals $1,500,800 $1,500,800

Additional Information:
• A $10,000 installment on the long-term note payable is due within one year.
• Fred Reid invested $40,000 into her business during the year

Required:

1. Prepare in good form, an Income Statement, Statement of Owner’s Equity and a Classified Balance Sheet for the year ended December 31, 2017. – 26 Marks

2. Calculate the Current Ratio at December 31, 2017 – 4 Marks

3. Prepare the Closing Entries at December 31, 2017.in a general journal – 5 Marks

On October 31, 2017, Lexington Corp. declared and issued a 12% common stock dividend. Prior to this dividend, Lexington had 302,000 shares of $0.001 par value common stock issued and outstanding. The fair value of Lexington's common stock was $16.75 per share on October 31, 2017. As a result of this stock dividend, the company's total stockholders' equity please explain in details

Prepare journal entries to record the following merchandising transactions of Lowe’s, which uses the perpetual inventory system and the gross method. (Hint: It will help to identify each receivable and payable; for example, record the purchase on August 1 in Accounts Payable—Aron.)
  

Exercise 12-9 Evaluating New Investments Using Return on Investment (ROI) and Residual Income [LO12-1, LO12-2]

Keep-Or-Drop Decision, Alternatives, Relevant Costs

Reshier Company makes three types of rug shampooers. Model 1 is the basic model rented through hardware stores and supermarkets. Model 2 is a more advanced model with both dry-and wet-vacuuming capabilities. Model 3 is the heavy-duty riding shampooer sold to hotels and convention centers. A segmented income statement is shown below.

While all models have positive contribution margins, Reshier Company is concerned because operating income is less than 10 percent of sales and is low for this type of company. The company’s controller gathered additional information on fixed costs to see why they were so high. The following information on activities and drivers was gathered:

In addition, Model 1 requires the rental of specialized equipment costing $19,000 per year.

Required: 1. Reformulate the segmented income statement using the additional information on activities. Use a minus sign to indicate any negative margins. Do NOT round interim calculations and, if required, round your answer to the nearest dollar. ( can you please provide detail solutions)

2. Using your answer to Requirement 1, assume that Reshier Company is considering dropping any model with a negative product margin. What are the alternatives?
- Select your answer -Keeping Model, Dropping Model, Keeping Model 1 or dropping it

Which alternative is more cost effective and by how much? (Assume that any traceable fixed costs can be avoided.) Do NOT round interim calculations and, if required, round your answer to the nearest dollar. Select your answer -Keeping Model 1Dropping Model: will add $ _____to operating income

3. What if Reshier Company can only avoid 190 hours of engineering time and 5,150 hours of setup time that are attributable to Model 1? How does that affect the alternatives presented in Requirement 2? Which alternative is more cost effective and by how much? Do NOT round interim calculations and, if required, round your answer to the nearest dollar. Select your answer -Keeping Model or Dropping Model : will add $_______ to operating income

3)   The December 31, 2019, trial balances for Paul Corporation and its subsidiary Stuart are listed below.

                                                          Paul Corporation                          Stuart Company

                                                        Debit              Credit                  Debit               Credit

      Cash                                       $  30,000                                    $   8,000                        

      Receivables (net)                        13,000                                       12,000

      Inventory, 1/1                            12,000                                       10,000

      Investment in S                         150,000                                                 

      Plant and equipment (net)         250,000                                     195,000

      Land                                         100,000                                       80,000

      Accounts payable                                            $  30,000                                   $  10,000

      Other liabilities                                                   85,000                                     100,000

      Common stock ($10 par)                                   250,000                                     100,000

      Retained earnings, 1/1                                      168,000                                       84,000

      Dividends declared                     15,000                                       20,000                        

      Sales                                                                132,000                                       91,000

      Dividend income                                                 15,000

      Purchases                                   60,000                                       30,000

      Other expenses                           50,000           _______                30,000          _______

                                                    $680,000          $680,000           $385,000          $385,000

      Inventory, 12/31                       $15,000                                     $12,000

A.   Prepare the journal entries found on Paul’s books for 2019

B.   Prepare the workpaper entries for 2019

Linda's Luxury Travel (LLT) is considering the purchase of two Hummer limousines. Various information about the proposed investment is as follows

Initial investment (2 limos) $960,000

Useful life 10 years

Salvage value $120,000

Annual net income generated $82,560

LLT's cost of capital 13%

Assume straight line depreciation method is used. Required Help LLT evaluate this project by calculating each of the following:

1. Accounting rate of return. (Round your percentage answer to 1 decimal place.)

2. Payback period. (Round your answer to 2 decimal places.)

3.Net present value.

I require answer for all the 3 questions. Thank you

Pureform, Inc., uses the weighted-average method in its process costing system. It manufactures a product that passes through two departments. Data for a recent month for the first department follow:

The beginning work in process inventory was 80% complete with respect to materials and 65% complete with respect to labor and overhead. The ending work in process inventory was 60% complete with respect to materials and 50% complete with respect to labor and overhead.

Required:

1. Compute the first department's equivalent units of production for materials, labor, and overhead for the month.

2. Determine the first department's cost per equivalent unit for materials, labor, and overhead for the month. (