Hale Corporation is comparing two different capital structures, an all-equity plan (Plan I) and a levered plan (Plan II). Under Plan I, the company would have 190,000 shares of stock outstanding. Under Plan II, there would be 140,000 shares of stock outstanding and $2.8 million in debt outstanding. The interest rate on the debt is 6 percent and there are no taxes. If EBIT is $275,000, what is the EPS for each plan? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) If EBIT is $525,000, what is the EPS for each plan? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) What is the break-even EBIT? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

Ealing Company began operations as a new subsidiary of Fundamental Company, a U.S. Corporation, on January 2, 2018, by issuing common stock for 180,000 foreign currency units (FCU). Ealing immediately borrowed 35,000 FCU with a 10-year, 10% note, interest payable annually on January 1. On the same date, Ealing bought a building for 200,000 FCU. The building was to be depreciated for 20 years on a straight-line basis with a residual value of 40,000 FCU.
During the year, the building was rented for 9,000 FCU per month. At year's end, all rent had been collected.
On May 1 a repair on the building of 15,000 FCU was completed and paid for. Land for a parking lot was acquired for 30,000 FCU in cash on June 1.
A dividend of 20,000 FCU was declared and paid on December 1.

Exchange rates for the year were as follows:
January 2, 2018 1 FCU = $.30

May 1, 2018 1 FCU = .37

June 1, 2018 1 FCU = .38

November 1, 2018 1 FCU = .41

December 1, 2018 1 FCU = .39

December 31, 2018 1 FCU = .35

average for 2018 1 FCU = .36

Fundamental company determined that the FCU was the functional currency and translation using the current rate method was appropriate for consolidation. Calculate the translation adjustment for 2018. (You might remember that the translation adjustment uses the net assets approach, not the net monetary assets approach.)

Activity Index: Standard direct labour hours 2,000 3,200 3,600 4,000 Variable costs Indirect materials $ 4,000 $ 6,400 $ 7,200 $ 8,000 Indirect labour 2,300 3,680 4,140 4,600 Utilities 3,200 5,120 5,760 6,400 Total variable 9,500 15,200 17,100 19,000 Fixed costs Supervisory salaries 1,000 1,000 1,000 1,000 Rent 3,000 3,000 3,000 3,000 Total fixed 4,000 4,000 4,000 4,000 Total costs $13,500 $19,200 $21,100 $23,000 The company applies total overhead on the basis of direct labour hours at $6.00 per direct labour hour and the standard hours per dining chair is 1/2 hour each. The company's actual production was 5,800 dining chairs with 3,000 actual hours of direct labour. Actual overhead was $18,200, of which $4,100 was fixed. Required: a) Calculate the variable overhead budget and fixed overhead variances. Prepare the entries for manufacturing overhead during the period and the entry to recognize the overhead variances at the end of the period

Vertical Analysis of Balance Sheet

Balance sheet data for Hanes Company on December 31, the end of the fiscal year, are shown below.

Prepare a comparative balance sheet for 20Y2 and 20Y1, stating each asset as a percent of total assets and each liability and stockholders' equity item as a percent of the total liabilities and stockholders' equity. If required, round percentages to one decimal place.

On January 1, 2020, Hawkeye Air leased a new airplane for 5 years. The expected life of the airplane is 20 years. The lease stipulates that Hawkeye Air makes annual payments of $1,085,923 payable at the beginning of each year. Hawkeye Air has an incremental borrowing rate of 4.3%. Hawkeye Air has an option to renew the lease with a 2% increase in the lease payment.

1) How will the lease be classified and how do you know?

1b) Calculate the present value of the lease payments.

2) What is the balance sheet impact of the lease at the beginning of the lease (1/1/2020)?

2a) What is the income statement impact of the lease for 2020?

2b) Identify any effects the lease arrangement and the associated reporting would have on the statement of cash flows for 2020.

Discuss the importance of and various types of performance measures that management can use to focus its attention on areas that need to be corrected or improved. (250 words)

Palisade Creek Co. is a merchandising business that uses the perpetual inventory system. The account balances for Palisade Creek Co. as of May 1, 2019 (unless otherwise indicated), are as follows:

During May, the last month of the fiscal year, the following transactions were completed:

Record the following transactions on page 20 of the journal. Refer to the Chart of Accounts for exact wording of account titles.

Record the following transactions on page 21 of the journal. Refer to the Chart of Accounts for exact wording of account titles.

As an auditor, a common task is to verify that expenditures of a company are properly classified as capital or revenue expenditures. Discuss the determinants of such classifications. If an expenditure is capitalized, is such expenditure ever expensed? If so, how?

Problem 14-1 Determining the price of bonds; discount and premium; issuer and investor [LO14-2]

On January 1, 2018, Instaform, Inc., issued 14% bonds with a face amount of $50 million, dated January 1. The bonds mature in 2037 (20 years). The market yield for bonds of similar risk and maturity is 16%. Interest is paid semiannually. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)

Required:
1-a. Determine the price of the bonds at January 1, 2018.
1-b. Prepare the journal entry to record their issuance by Instaform.
2-a. Assume the market rate was 12%. Determine the price of the bonds at January 1, 2018.
2-b. Assume the market rate was 12%. Prepare the journal entry to record their issuance by Instaform.
3. Assume Broadcourt Electronics purchased the entire issue in a private placement of the bonds. Using the data in requirement 2, prepare the journal entry to record the purchase by Broadcourt.

• Required 1
• Required 2
• Required 3
• Required 4

Determine the price of the bonds at January 1, 2018. (Round your answer to 2 decimal places.)

Prepare the journal entry to record the bond issuance by Bishop on January 1, 2018. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to 2 decimal places.)

• ecord the interest on June 30, 2018, using the effective interest method.

Note: Enter debits before credits.

• Record the interest on December 31, 2018, using the effective interest method.

Note: Enter debits before credits.

Whirly Corporation’s contribution format income statement for the most recent month is shown below: Total Per Unit Sales (7,600 units) $ 243,200 $ 32.00 Variable expenses 152,000 20.00 Contribution margin 91,200 $ 12.00 Fixed expenses 54,200 Net operating income $ 37,000 Required: (Consider each case independently):

1. What would be the revised net operating income per month if the sales volume increases by 80 units?

2. What would be the revised net operating income per month if the sales volume decreases by 80 units?

3. What would be the revised net operating income per month if the sales volume is 6,600 units?

Got question 1.

The City Sky Co is a property investment and development company. Recently the company purchased a vacant piece of land south of Brisbane on which it is planning to build 15 apartments to sell. The City Sky Co has engaged the services of the local lawyer, Maurice Blackburn, to provide the legal services required for the development for $33,000. Maurice Blackburn runs an established sole trader business and turns over revenue of $300,000 per year. Advise The City Sky Co of the input tax credit entitlements that they may be entitled to. Assume that The City Sky Co is registered for GST purposes.

Fixed and Variable Cost Allocation

Kumar, Inc., evaluates managers of producing departments on their ability to control costs. In addition to the costs directly traceable to their departments, each production manager is held responsible for a share of the costs of a support center, the Human Resources (HR) Department. The total costs of HR are allocated on the basis of actual direct labor hours used. The total costs of HR and the actual direct labor hours worked by each producing department are as follows:

*$0.25 per direct labor hour plus $100,000.

When the capacity of the HR Department was originally established, the normal usage expected for each department was 18,000 direct labor hours. This usage is also the amount of activity planned for the two departments in Year 1 and Year 2.

Required:

1. Allocate the costs of the HR Department using the direct method and assuming that the purpose is product costing.

2. Allocate the costs of the HR Department using the direct method and assuming that the purpose is to evaluate performance.

Characteristics of Production Process, Cost Measurement

Vince Melders, of EcoScape Company, designs and installs custom lawn and garden irrigation systems for homes and businesses throughout the state. Each job is different, requiring different materials and labor for installing the systems. EcoScape estimated the following for the year:

During the year, the following actual amounts were experienced:

Vince Melders, owner of EcoScape, noticed that the watering systems for many houses in a local subdivision had the same layout and required virtually identical amounts of prime cost. Vince met with the subdivision builders and offered to install a basic watering system in each house. The idea was accepted enthusiastically, so Vince created a new company, Irrigation Specialties, to handle the subdivision business. In its first three months in business, Irrigation Specialties experienced the following:

Required:

1. Should Irrigation Specialties use process costing or job-order costing?

2. If Irrigation Specialties uses an actual costing system, what is the cost of a single system installed in June? In July? In August? Round your answers to the nearest dollar.

3. Now assume that Irrigation Specialties uses a normal costing system. Estimated overhead for the year is $57,800, and estimated production is 680 watering systems. What is the predetermined overhead rate per system?

$ per system installed

What is the cost of a single system installed in June? In July? In August?