1. Find the balance on the credit card after 3 months with the following information:

APR = 15.99%

Carry-Over balance for month 1 = $793.16

Minimum payment is $50 or 8%, whichever is greater

Simmons Inc. has an expected net income of 4 million Euros at the end of the year. The company is currently all equity financed but it is planning to buy back equity and undertake some debt so that the debt- to-equity ratio will become 0.5. The debt-to-equity ratio will be kept constant. The assets will be fully depreciated in the next three years, with annual depreciation installments of 1,000,000 Euro each. The company does not plan to acquire any asset. The expected return on unlevered equity for Simmons is 9.25% and the cost of debt is 5.25%. The tax rate on corporate earnings is 32%. What is the value of Simmons’ debt, if the expected EBITDA of the company is perpetual and constant every year? (Assume that the depreciation tax shield is as risky as the rest of the unlevered cash flow)

(a) 15,829,380 Euro
(b) 16,032,251 Euro
(c) 17,987,342 Euro
(d) 18,223,172 Euro

The answer is D: 18,223,171 Euro
Thumb up for correct step-by-step solution. Many thanks.

Veronica Mars, a recent graduate of Bell’s accounting program, evaluated the operating performance of Dunn Company’s six divisions. Veronica made the following presentation to Dunn’s board of directors and suggested the Percy Division be eliminated. “If the Percy Division is eliminated,” she said, “our total profits would increase by $26,500.”

In the Percy Division, cost of goods sold is $60,500 variable and $16,300 fixed, and operating expenses are $29,100 variable and $20,600 fixed. None of the Percy Division’s fixed costs will be eliminated if the division is discontinued.

Is Veronica right about eliminating the Percy Division? Prepare a schedule to support your answer. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

J&W Corporation manufactures a new electronic game console. The current standard cost sheet for a game console follows.

Assume that the following data appeared in J&W’s records at the end of the past month.

There are no materials inventories.

Required:

a-1. Complete the standard cost sheet for a game console given below.

a-2. Prepare a variance analysis for direct materials and direct labor.

b. Assume that all production overhead is fixed and that the $18,300 underapplied is the only overhead variance that can be computed. What are the actual and applied overhead amounts?

1. Multiple Production Department Factory Overhead Rates

   The total factory overhead for Bardot Marine Company is budgeted for the year at $945,000, divided into two departments: Fabrication, $585,000, and Assembly, $360,000. Bardot Marine manufactures two types of boats: speedboats and bass boats. The speedboats require one direct labor hour in Fabrication and two direct labor hours in Assembly. The bass boats require four direct labor hours in Fabrication and four direct labor hours in Assembly. Each product is budgeted for 6,000 units of production for the year.

   When required, round all per unit answers to the nearest cent.

   a. Determine the total number of budgeted direct labor hours for the year in each department.

   Fabrication	direct labor hours
   Assembly	direct labor hours

   b. Determine the departmental factory overhead rates for both departments.

   Fabrication	$ per dlh
   Assembly	$ per dlh

   c. Determine the factory overhead allocated per unit for each product using the department factory overhead allocation rates.

   Speedboat:	$ per unit
   Bass boat:	$ per unit

A partial list of Waterways’ accounts and their balances for the month of November follows.

Accounts Receivable       $274,500
Advertising Expenses       54,200
Cash       261,000
Depreciation—Factory Equipment       16,800
Depreciation—Office Equipment       2,500
Direct Labor       41,900
Factory Supplies Used       16,700
Factory Utilities       10,300
Finished Goods Inventory, November 30       68,800
Finished Goods Inventory, October 31       73,100
Indirect Labor       48,100
Office Supplies Expense       1,600
Other Administrative Expenses       71,500
Prepaid Expenses       41,400
Raw Materials Inventory, November 30       52,300
Raw Materials Inventory, October 31       37,600
Raw Materials Purchases       184,100
Rent—Factory Equipment       46,800
Repairs—Factory Equipment       4,600
Salaries       323,000
Sales Revenue
1,354,600
Sales Commissions       40,500
Work In Process Inventory October 31       52,600
Work In Process Inventory, November 30       42,200

  
Collapse question part
(b1)
A list of accounts and their values are given above. From this information, prepare a cost of goods manufactured schedule.

WATERWAYS CORPORATION
Cost of Goods Manufactured Schedule

Williams-Santana, Inc., is a manufacturer of high-tech industrial parts that was started in 2006 by two talented engineers with little business training. In 2018, the company was acquired by one of its major customers. As part of an internal audit, the following facts were discovered. The audit occurred during 2018 before any adjusting entries or closing entries were prepared.

1. A five-year casualty insurance policy was purchased at the beginning of 2016 for $35,500. The full amount was debited to insurance expense at the time.
2. Effective January 1, 2018, the company changed the salvage value used in calculating depreciation for its office building. The building cost $614,000 on December 29, 2007, and has been depreciated on a straight-line basis assuming a useful life of 40 years and a salvage value of $110,000. Declining real estate values in the area indicate that the salvage value will be no more than $27,500.
3. On December 31, 2017, merchandise inventory was overstated by $25,500 due to a mistake in the physical inventory count using the periodic inventory system.
4. The company changed inventory cost methods to FIFO from LIFO at the end of 2018 for both financial statement and income tax purposes. The change will cause a $965,000 increase in the beginning inventory at January 1, 2019.
5. At the end of 2017, the company failed to accrue $15,600 of sales commissions earned by employees during 2017. The expense was recorded when the commissions were paid in early 2018.
6. At the beginning of 2016, the company purchased a machine at a cost of $730,000. Its useful life was estimated to be 10 years with no salvage value. The machine has been depreciated by the double-declining balance method. Its book value on December 31, 2017, was $467,200. On January 1, 2018, the company changed to the straight-line method.
7. Warranty expense is determined each year as 1% of sales. Actual payment experience of recent years indicates that 0.80% is a better indication of the actual cost. Management effects the change in 2018. Credit sales for 2018 are $4,100,000; in 2017 they were $3,800,000.

Required:
For each situation:
1. Identify whether it represents an accounting change or an error. If an accounting change, identify the type of change. For accounting errors, choose "Not applicable".
2. Prepare any journal entry necessary as a direct result of the change or error correction as well as any adjusting entry for 2018 related to the situation described. (Ignore tax effects.)

Discuss how the COSO's Enterprise Risk Management — Integrated Framework relates to internal Control for Technology

Problem 5-1A Perpetual: Alternative cost flows LO P1 [The following information applies to the questions displayed below.] Warnerwoods Company uses a perpetual inventory system. It entered into the following purchases and sales transactions for March. Date Activities Units Acquired at Cost Units Sold at Retail Mar. 1 Beginning inventory 70 units @ $50.40 per unit Mar. 5 Purchase 210 units @ $55.40 per unit Mar. 9 Sales 230 units @ $85.40 per unit Mar. 18 Purchase 70 units @ $60.40 per unit Mar. 25 Purchase 120 units @ $62.40 per unit Mar. 29 Sales 100 units @ $95.40 per unit Totals 470 units 330 units Problem 5-1A Part 1 Required: 1. Compute cost of goods available for sale and the number of units available for sale. 2. Compute the number of units in ending inventory. Compute gross profit earned by the company for each of the four costing methods. For specific identification, the March 9 sale consisted of 50 units from beginning inventory and 180 units from the March 5 purchase; the March 29 sale consisted of 30 units from the March 18 purchase and 70 units from the March 25 purchase. (Round weighted average cost per unit to two decimals and final answers to nearest whole dollar.)

Gladstone Company tracks the number of units purchased and sold throughout each accounting period but applies its inventory costing method at the end of each period, as if it uses a periodic inventory system. Assume its accounting records provided the following information at the end of the annual accounting period, December 31.

Assuming that for Specific identification method (item 1d) the March 14 sale was selected two-fifths from the beginning inventory and three-fifths from the purchase of January 30. Assume that the sale of August 31 was selected from the remainder of the beginning inventory, with the balance from the purchase of May 1.

Required:

1. Compute the amount of goods available for sale, ending inventory, and cost of goods sold at December 31 under each of the following inventory costing methods: (Round intermediate calculations to 2 decimal places and final answers to the nearest whole dollar amount.)

1. 2-a. Of the four methods, which will result in the highest gross profit?

• Last-in, first-out

• Weighted average cost

• First-in, first-out

• Specific identification

1. 2-b. Of the four methods, which will result in the lowest income taxes?

• Last-in, first-out

• Weighted average cost

• First-in, first-out

• Specific identification

Consider a corporate bond with refunding protection and a different corporate bond with call protection. Briefly describe a situation in which a company might call a bond but not refund the bond. In other words, describe a situation in which a bond is **Called but not refunded***

Q1. Discuss in your words the purpose of a bank reconciliation. (1 point)

Q2. Prepare general journal entries for the following transactions of this company for the current year: (2 points).

Q3. A company purchased mining property containing 7,350,000 tons of ore for SAR 1,837,500. In 2009 it mined and sold 857,000 tons of ore and in 2010 it mined and sold 943,000 tons of ore. (2 points).

a. Calculate the depletion expense for 2009 and 2010.

b. What was the book value of the property at the end of 2010?

Q4. Define liabilities and explain in your words the differences between current and long-term liabilities. (2 points).

On January 1, 2016, Lamb Services issued $200,000, 9%, four-year bonds. Interest is paid semiannually on June 30 and December 31. The bonds were issued at $193,537 when the market rate was 10%.

Required:

1. Prepare an amortization schedule that determines interest at the effective interest rate.

2. Prepare an amortization schedule by the straight-line method.

3. Prepare the journal entries to record interest expense on June 30, 2018, by each of the two approaches.

Both Bond A and Bond B have 8.4 percent coupons and are priced at par value. Bond A has 7 years to maturity, while Bond B has 18 years to maturity.

a. If interest rates suddenly rise by 1.2 percent, what is the percentage change in price of Bond A and Bond B? (A negative value should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)

b. If interest rates suddenly fall by 1.2 percent instead, what would be the percentage change in price of Bond A and Bond B? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)

Lenitnes Company is considering an investment in technology to improve its operations. The investment will require an initial outlay of $265,000 and will yield the following expected cash flows. Management requires investments to have a payback period of 3 years, and it requires a 10% return on its investments. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the table provided.)

Required:
1. Determine the payback period for this investment.
2. Determine the break-even time for this investment.
3. Determine the net present value for this investment.