Legend Service Center just purchased an automobile hoist for $37,200. The hoist has an 8-year life and an estimated salvage value of $3,400. Installation costs and freight charges were $2,600 and $800, respectively. Legend uses straight-line depreciation. The new hoist will be used to replace mufflers and tires an automobiles. Legend estimates that the new hoist will enable his mechanics to replace 5 extra mufflers per week. Each muffler sells for $72 installed. The cost of a muffler is $37, and the labor cost to install a muffler is $15.

(a) Compute the cash payback period for the new hoist. Cash payback period = _______ YEARS

(b) Compute the annual rate of return for the new hoist. (Round answer to 2 decimal places, e.g. 10.529.)

Annual rate of return = ________

1. What are alaska air groups earnings per share amounts disclosed on the income statement for the most recent year? What dilutive securities are discussed in the footnotes? Please identify and describe other examples of dilutive securities. How do these impact earnings per share?

Ellis issues 7.0%, five-year bonds dated January 1, 2017, with a $580,000 par value. The bonds pay interest on June 30 and December 31 and are issued at a price of $604,738. The annual market rate is 6% on the issue date.

Required:

1. Complete the below table to calculate the total bond interest expense over the bonds' life.
2. Prepare a straight-line amortization table for the bonds’ life.
3. Prepare the journal entries to record the first two interest payments.

Complete the below table to calculate the total bond interest expense over the bonds' life.

Prepare a straight-line amortization table for the bonds’ life.

Prepare the journal entries to record the first two interest payments.

• Record the first interest payment on June 30, 2017.

• Record the second interest payment on December 31, 2017.

1:        Users of financial statements

Identify at least three types of users of financial statements. Describe their primary use of the financial statements and how the misstatement of those statements might injure the user.

2:        Overview of the Financial Statement Audit

What is a financial statement audit, and what is the overall objective of the audit? What must the auditor do to accomplish this objective?

Walbin Corporation uses the weighted-average method in its process costing system. The beginning work in process inventory in a particular department consisted of 19,000 units, 100% complete with respect to materials cost and 30% complete with respect to conversion costs. The total cost in the beginning work in process inventory was $25,600. A total of 55,000 units were transferred out of the department during the month. The costs per equivalent unit were computed to be $1.80 for materials and $3.50 for conversion costs. The total cost of the units completed and transferred out of the department was:
Multiple Choice
•   $291,500
•   $314,500
•   $233,750
•   $280,300

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Vallin Manufacturing Corporation’s beginning work in process inventory consisted of 9,700 units, 100% complete with respect to materials cost and 60% complete with respect to conversion costs. The total cost in the beginning inventory was $53,000. During the month, 57,000 units were transferred out. The equivalent unit cost was computed to be $4.20 for materials and $4.70 for conversion costs under the weighted-average method. Given this information, the total cost of the units completed and transferred out was:
Multiple Choice
•   $426,000
•   $355,600
•   $507,300
•   $354,000
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Mundes Corporation uses the weighted-average method in its process costing system. The beginning work in process inventory in its Painting Department consisted of 3,600 units that were 60% complete with respect to materials and 40% complete with respect to conversion costs. The cost of the beginning work in process inventory in the department was recorded as $10,400. During the period, 9,600 units were completed and transferred on to the next department. The costs per equivalent unit for the period were $5.60 for material and $6.60 for conversion costs. The cost of units transferred out during the month was:
Multiple Choice
•   $63,360
•   $66,400
•   $117,120
•   $84,000

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In July, one of the processing departments at Okamura Corporation had beginning work in process inventory of $32,000 and ending work in process inventory of $37,000. During the month, the cost of units transferred out from the department was $167,000. In the department's cost reconciliation report for July, the total cost to be accounted for under the weighted-average method would be:
Multiple Choice
•   $69,000
•   $138,000
•   $151,000
•   $204,000

On January 4, 2018, Runyan Bakery paid $324 million for 10 million shares of Lavery Labeling Company common stock. The investment represents a 30% interest in the net assets of Lavery and gave Runyan the ability to excercise significant influence over Lavery's operations. Runyan chose the fair value option to account for this investment. Runyan received dividends of $2.00 per share on December 31, 2018, and Lavery reported net income of $160 million for the year ended December 31, 2018. The market value of Lavery's common stock at December 31, 2018 was $31 per share. On the purchase date, the book value of Lavery's net assets was $800 million and:

a. The fair value of Lavery's depreciable assets, with an average remaining useful life of six years, exceeded their book value by $80 million.

b. The remainder of the excess of the cost of the investment over the book value of net assets purchased was attributable to goodwill. Required:

1-a. Prepare all appropriate journal entries related to the investment during 2018, assuming Runyan accounts for this investment under fair value option, and accounts for the Lavery investment in a manner similar to what it would use for securities for which there is not specific influence.

(Record the purchase of Lavery stock for $324 million) (Record Runyan share of Lavery's $160 mil net income)

(Record the receipt of cash dividends of $2 per share on 10 mil shares)

(Record any nec. entry related to depreciation. The fair value of Lavery's depreciable assets, with an average remaining useful life of six years, exceeded their book value by $80 mil) (Record any nec. adj entry to correctly report the investment on the balance sheet. The market value of Lavery's common stock at Dec 31 2018 was $1 per share)

1-b Calculate the effect of these journal entries on 2018 net income, and the amount at which the investment is carried in the December 31, 2018, balance sheet.

(Effect on net income)

(Investment)

2-a Prepare all appropriate journal entries related to the investment during 2018, assuming Runyan accounts for this investment under the fair value option, but uses equity method accounting to account for Lavery's income and dividends, and then records a fair value adjustment at the end of the year that allows it to comply with GAAP.

(Record the purchase of Lavery Labeling stock for $324 mil)

(Record Runyan's share of Lavery's $160 mil net income)

(Record the receipt of cash dividends of $2 per share on 10 mil shares)

(Record any nec entry to related depreciation. The fair value of Lavery's depreciable assets, with an avg remaining useful life of six years, exceeded their book value by $80 mil) (Record any nec adj entry to correctly report the investment on the bal sheet. The market value of Lavery's common stock at Dec 31, 2018 was $1 per share)

2-b Calculate the effect of these journal entries on 2018 net income, and the amount at which the investment is carried in the December 31, 2018, balance sheet.

(Calculate the effect of these journal entries on 2018 net income, and the amount at which the investment is carried in the Dec 31, 2018 balance sheet)

(net income) (Investment)

The partnership of Dennis and Grover reports the following​ information:

• Mike Dennis withdrew cash of $151,000 for personal use.

• Frank Grover withdrew cash of $128,000 during the year.

• Net income is $268,000. The first $134,000 is shared based on the partner capital investments ​(Dennis $108,000 and Grover $160,000​). The next $100,000 is shared based on partner​ service, with Dennis receiving 60 percent and Grover receiving 40 percent. The remainder is shared equally.

Journalize the entries on December 31 to close to each Capital account with the net income to the​ partners, and to close the​ partners' Withdrawal accounts. Explanations are not required. Indicate the amount of increase or decrease in each​ partner's Capital balance. What was the overall effect on partnership​ capital?

Explain computing Earnings & profits and Determined Dividends received by Shareholders?

1-

Direct Materials Variances

Silicone Engine Inc. produces wrist-worn tablet computers. The company uses Thin Film Crystal (TFC) LCD displays for its products. Each tablet uses one display. The company produced 450 tablets during December. However, due to LCD defects, the company actually used 500 LCD displays during December. Each display has a standard cost of $6.00. LCD displays were purchased for December production at a cost of $3,150.

Determine the price variance, quantity variance, and total direct materials cost variance for December. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. And, enter your final variance amounts to the nearest whole dollar.

2-

Direct Materials and Direct Labor Variance Analysis

Abbeville Company manufactures faucets in a small manufacturing facility. The faucets are made from brass. Manufacturing has 70 employees. Each employee presently provides 36 hours of labor per week. Information about a production week is as follows:

Required:

a. Determine the standard cost per faucet for direct materials and direct labor. Round the cost per unit to two decimal places.

b. Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

c. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

[The following information applies to the questions displayed below.]fNotes with important tax information are provided below

XYZ is a calendar-year corporation that began business on January 1, 2017. For 2018, it reported the following information in its current year audited income statement. Notes with important tax information are provided below. Exhibit 16-6.

Notes:

1. XYZ owns 30 percent of the outstanding Hobble Corp. (HC) stock. Hobble Corp. reported $1,000,000 of income for the year. XYZ accounted for its investment in HC under the equity method and it recorded its pro rata share of HC's earnings for the year. HC also distributed a $200,000 dividend to XYZ.
2. Of the $20,000 interest income, $5,000 was from a City of Seattle bond (issued in 2017), $7,000 was from a Tacoma City bond issued in 2015, $6,000 was from a fully taxable corporate bond, and the remaining $2,000 was from a money market account.
3. This gain is from equipment that XYZ purchased in February and sold in December (i.e., it does not qualify as §1231 gain).
4. This includes total officer compensation of $2,500,000 (no one officer received more than $1,000,000 compensation).
5. This amount is the portion of incentive stock option compensation that vested during the year (recipients are officers)
6. XYZ actually wrote off $27,000 of its accounts receivable as uncollectible.
7. Tax depreciation was $1,900,000.
8. In the current year, XYZ did not make any actual payments on warranties it provided to customers.
9. XYZ made $500,000 of cash contributions to qualified charities during the year.
10. On July 1 of this year XYZ acquired the assets of another business. In the process it acquired $300,000 of goodwill. At the end of the year, XYZ wrote off $30,000 of the goodwill as impaired.
11. XYZ expensed all of its organizational expenditures for book purposes. It expensed the maximum amount of organizational expenditures allowed for tax purposes.
12. The other expenses do not contain any items with book-tax differences.
13. This is an estimated tax provision (federal tax expense) for the year. Assume that XYZ is not subject to state income taxes.

Estimated tax information:

XYZ made four equal estimated tax payments totaling $480,000. Assume for purposes of estimated tax penalties, assume XYZ reported a tax liability of $800,000 in 2017. During 2018, XYZ determined its taxable income at the end of each of the four quarters as follows:

Finally, assume that XYZ is not a large corporation for purposes of estimated tax calculations. (Do not round intermediate calculations. Round your answers to the nearest dollar amount.)

a. Compute XYZ’s taxable income.

ANSWER FOR A IS 1,868,360

b. Compute XYZ’s income tax liability.

Denzel Brooks opened a Web consulting business called Venture Consultants and completes the following transactions in March.

Required:
1. Prepare general journal entries to record these transactions using the following titles: Cash (101); Accounts Receivable (106); Office Supplies (124); Prepaid Insurance (128); Prepaid Rent (131); Office Equipment (163); Accounts Payable (201); Common Stock (307); Dividends (319); Services Revenue (403); and Utilities Expense (690).
2. Post the journal entries from part 1 to the ledger accounts.
3. Prepare a trial balance as of the end of March.

Portsmouth Company makes upholstered furniture. Its only variable cost is direct materials. The demand for the company's products far exceeds its manufacturing capacity. The bottleneck (or constriant) in the production process is upholstery labor-hours. Information concerning three of Portsmouth's upholstered chairs appears below:

Required:

1. Portsmouth is considering paying its upholstery laborers additional compensation to work overtime. Assuming that this extra time would be used to produce sofas, up to how much of an overtime premium per hour should the company be willing to pay to keep the upholstery shop open after normal working hours?

2. A small nearby upholstering company has offered to upholster furniture for Portsmouth at a price of $34 per hour. The management of Portsmouth is confident that this upholstering company’s work is high quality and their craftsmen can work as quickly as Portsmouth’s own craftsmen on the simpler upholstering jobs such as the Love Seat. How much additional contribution margin per hour can Portsmouth earn if it hires the nearby upholstering company to make Love Seats?

3. Should Portsmouth hire the nearby upholstering company?

The case study of Pure Organic food and Juice Bar :

The four key questions that should drive your analysis are :

1. What are the goals and objectives of Graham and Buob?

2. What are some of the challenges facing Pure? What explains their low-profit levels? What is the main problem Pure faces?

3. How would you characterize Pure's competitive market?

4. How does Pure create value for the consumer? What differentiates this restaurant from the competition?

Instructions:

1. Maximum Four pages for analysis including the appendix (you decide if to use the appendix or not)

On January 1, 2018 you bought a zero coupon bond with 5 years to maturity at $ 675. On January 1, 2019 this bond traded at $ 731. What would be your taxable income from holding this bond in 2018, if straight-line method for interest deduction were used?

a. $ 67.25

b. $ 56

c. $ 32.5

d. $ 65

e. $ 0