Impact on EPS, Rankings, and Computations

Waseca Company had 5 convertible securities outstanding during all of 2016. It paid the appropriate interest (and amortized any related premium or discount using the straightline method) and dividends on each security during 2016. Each of the convertible securities is described in the following table:

Additional data:

Net income for 2016 totaled $119,460. The weighted average number of common shares outstanding during 2016 was 40,000 shares. No share options or warrants are outstanding. The effective corporate income tax rate is 30%.

Required:

1. Prepare a schedule that lists the impact of the assumed conversion of each convertible security on diluted earnings per share. Round to two decimal places.

2. Prepare a ranking from 1-5 of the order in which each of the convertible securities should be included in diluted earnings per share. The convertible security having the most dilutive impact on diluted earnings per share is listed at the top of the ranking (i.e. "1").

3. Compute basic earnings per share. Round to two decimal places.
$ ___ per share

4. Compute diluted earnings per share. Round to two decimal places.
$ ___ per share

5. Indicate the amount(s) of the earnings per share that Waseca would report on its 2016 income statement. Round to the nearest cent.

Basic earnings per share: $ ___

Diluted earnings per share: $ ___

Question (a):

Dividing Partnership Net Income.

Required:

Steve Conyers and Chelsy Poodle formed a partnership, dividing income as follows: Annual salary allowance to Poodle of $170,500. Interest of 6% on each partner's capital balance on January 1. Any remaining net income divided to Conyers and Poodle, 1:2. Conyers and Poodle had $77,600 and $75,000, respectively, in their January 1 capital balances. Net income for the year was $310,000. How much is distributed to Conyers and Poodle?

Question (b):

Liquidating Partnerships

Prior to liquidating their partnership, Perkins and Brooks had capital accounts of $46,000 and $74,000, respectively. Prior to liquidation, the partnership had no cash assets other than what was realized from the sale of assets. These partnership assets were sold for $144,000. The partnership had $5,000 of liabilities. Perkins and Brooks share income and losses equally. Determine the amount received by Brooks as a final distribution from liquidation of the partnership.

Comprehensive: EPS

Frost Company has accumulated the following information relevant to its 2016 earnings per share.

1. Net income for 2016: $150,500.
2. Bonds payable: On January 1, 2016, the company had issued 10%, $200,000 bonds at 110. The premium is being amortized in the amount of $1,000 per year. Each $1,000 bond is currently convertible into 22 shares of common stock. To date, no bonds have been converted.
3. Bonds payable: On December 31, 2014, the company had issued $540,000 of 5.8% bonds at par. Each $1,000 bond is currently convertible into 11.6 shares of common stock. To date, no bonds have been converted.
4. Preferred stock: On July 3, 2015, the company had issued 3,800 shares of 7.5%, $100 par, preferred stock at $108 per share. Each share of preferred stock is currently convertible into 2.45 shares of common stock. To date, no preferred stock has been converted and no additional shares of preferred stock have been issued. The current dividends have been paid.
5. Common stock: At the beginning of 2016, 25,000 shares were outstanding. On August 3, 7,000 additional shares were issued. During September, a 20% stock dividend was declared and issued. On November 30, 2,000 shares were reacquired as treasury stock.
6. Compensatory share options: Options to acquire common stock at a price of $33 per share were outstanding during all of 2016. Currently, 4,000 shares may be acquired. To date, no options have been exercised. The unrecognized compensation cost (net of tax) related to these options is $5 per share.
7. Miscellaneous: Stock market prices on common stock averaged $41 per share during 2016, and the 2016 ending stock market price was $40 per share. The corporate income tax rate is 30%.

Required:

1. Compute the basic earnings per share. Round intermediate calculations to the nearest whole number, then round your final answer to two decimal places.
   $ per share
2. Compute the diluted earnings per share. Round intermediate calculations to the nearest whole number, then round your final answer to two decimal places.
   $ per share
3. Indicate which earnings per share figure(s) Frost would report on its 2016 income statement.
   Choose: (1) Basic EPS only (2) Both basic and diluted EPS (3) Diluted EPS only

The following data are for the 2016 fiscal year of Alphabet, Inc., which is the parent company of Google, Inc., and Facebook, Inc. All dollar amounts are in thousands.

Required

1. Calculate the EBIT for each company.
2. Calculate each company’s debt-to-assets ratio, current ratio, and the times-interest-earned ratio.
3. Calculate each company’s return-on-assets ratio using EBIT instead of net earnings. Calculate each company’s return-on-equity ratio using net earnings.
4. Alphabet reported interest expense of $124 million, before taxes. What was its after-tax interest expense in dollars? (Hint: You will need to compute its tax rate by dividing income tax expense by earnings before taxes, which must be computed.)

The Cutting Department of Karachi Carpet Company provides the following data for January. Assume that all materials are added at the beginning of the process.

a. Prepare a cost of production report for the Cutting Department. If an amount is zero or a blank, enter in "0". For the The rate used to allocate costs between completed and partially completed production.cost per equivalent unit computations, round your answers to two decimal places.

b. Compute and evaluate the change in cost per equivalent unit for direct materials and conversion from the previous month (December). If required, round your answers to two decimal places.

"Foreign Currency Transactions and International Financial Reporting Standards (IFRS)"

• Analyze the main reasons why a company might prefer a foreign currency option over a forward contract in hedging a foreign currency firm commitment. In contrast, analyze the main reasons why a company might prefer a forward contract over an option in hedging a foreign currency asset or liability. Determine the option (e.g. a foreign currency option or a forward contract) that you consider to be more effective. Provide a rationale for your response.
• Assume that all the companies in the world use International Financial Reporting Standards (IFRS). Determine at least two (2) obstacles to the worldwide comparability of financial statements and provide one (1) strategy to overcome the obstacles in question. Provide support for your rationale.

Prepare journal entries for the City of Pudding's governmental funds to record the following transactions, first for fund financial statements and then for government-wide financial statements.

1. A new truck for the sanitation department was ordered at a cost of $107,250.
2. The city print shop did $2,700 worth of work for the school system (but has not yet been paid).
3. An $12 million bond was issued to build a new road.
4. Cash of $183,000 is transferred from the general fund to provide permanent financing for a municipal swimming pool that will be viewed as an enterprise fund.
5. The truck ordered in (a) is received at an actual cost of $110,850. Payment is not made at this time.
6. Cash of $38,600 is transferred from the general fund to the capital projects fund.
7. A state grant of $60,000 is received that must be spent to promote recycling.
8. The first $9,300 of the state grant received in (g) is appropriately expended.

Schedule of Cash Payments

EastGate Physical Therapy Inc. is planning its cash payments for operations for the first quarter (January–March). The Accrued Expenses Payable balance on January 1 is $33,100. The budgeted expenses for the next three months are as follows:

Other operating expenses include $4,200 of monthly depreciation expense and $900 of monthly insurance expense that was prepaid for the year on May 1 of the previous year. Of the remaining expenses, 65% are paid in the month in which they are incurred, with the remainder paid in the following month. The Accrued Expenses Payable balance on January 1 relates to the expenses incurred in December.

Prepare a schedule of cash payments for operations for January, February, and March.

Given the financial data for four mutually exclusive alternatives in the table below,

Use a Rate of Return Analysis to solve for the following:

• Which alternative should be chosen using an MARR of 9%? Mathematical solution
• Create a choice table from 0 – 25%.
• Create a graphical solution to the problem indicating which alternative should be chosen for interest rates from 0 – 20%. Make sure your graph has all proper labels including the appropriate choices for the Rate of Returns shown in the graph. The graph should be on its own page and not embedded.  

Statement of Cash Flows—Indirect Method

The comparative balance sheet of Yellow Dog Enterprises Inc. at December 31, 20Y8 and 20Y7, is as follows:

Additional data obtained from the income statement and from an examination of the accounts in the ledger for 20Y8 are as follows:

1. Net income, $137,520.
2. Depreciation reported on the income statement, $42,030.
3. Equipment was purchased at a cost of $82,060, and fully depreciated equipment costing $22,560 was discarded, with no salvage realized.
4. The mortgage note payable was not due for six years, but the terms permitted earlier payment without penalty.
5. 7,000 shares of common stock were issued at $20 for cash.
6. Cash dividends declared and paid, $83,800.

Required:

Prepare a statement of cash flows, using the indirect method. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments.

Can the elements of the Fraud Triangle be observed?

Let's explore this idea by responding to each of the following:

• "An organization with significant fraud risk looks and sounds like"
• "An organization with minimal fraud risk looks and sounds like"

Calculate gross pay for each of the following employees of Launchpad Co. The company offers a regular wage rate of $8.20/hour to all employees. Under an incentive plan in place for all employees, this rate increases for any employee who can meet weekly production goals. The increased rates and corresponding thresholds that must be met are as follows: $9.40/hour for producing at least 2,000 units $10.60/hour for producing at least 2,800 units $11.80/hour for producing at least 3,700 units $13/hour for producing at least 4,700 units All employees are paid an overtime wage rate that is 1.5 times their respective regular wage rates. NOTE: For simplicity, all calculations throughout this exercise, both intermediate and final, should be rounded to two decimal places at each calculation.

1:Bronson Chau worked 42 hours and produced 1,870 units. Gross Pay = $

2:Pauline Myers worked 42 hours and produced 3,650 units. Gross Pay = $

3:Angela Smith worked 52 hours and produced 2,160 units. Gross Pay = $

4:Angelo Balducci worked 47 hours and produced 4,790 units. Gross Pay = $

Tia and Colton graduate from college in May 2018 and begin developing their new business. They begin by offering clinics for basic outdoor activities such as mountain biking or kayaking. Upon developing a customer base, they’ll hold their first adventure races. These races will involve four-person teams that race from one checkpoint to the next using a combination of kayaking, mountain biking, orienteering, and trail running. In the long run, they plan to sell outdoor gear and develop a ropes course for outdoor enthusiasts.

On July 1, 2018, Tia and Colton organize their new company as a corporation, Great Adventures Inc. The articles of incorporation state that the corporation will sell 30,000 shares of common stock for $1 each. Each share of stock represents a unit of ownership. Tia and Colton will act as co-presidents of the company. The following transactions occur from July 1 through December 31.

The following information relates to year-end adjusting entries as of December 31, 2018.

1. Depreciation of the mountain bikes purchased on July 8 and kayaks purchased on August 4 totals $6,820.
2. Six months’ worth of insurance has expired.
3. Four months’ worth of rent has expired.
4. Of the $1,900 of office supplies purchased on July 4, $370 remains.
5. Interest expense on the $46,000 loan obtained from the city council on August 1 should be recorded.
6. Of the $2,900 of racing supplies purchased on December 12, $190 remains.
7. Colton calculates that the company owes $13,200 in income taxes.

REQUIREMENTS:

1. Record each of the transactions listed above in the ‘General Journal’ tab (these are shown as items 1-27). From those transactions, populate the ‘General Ledger’ and review the ‘Trial Balance’ tab to see the effect of the transactions on the account balances.
2. Record the adjusting entries in the ‘General Journal’ tab (these are shown as items 28-34). Update your ‘General Ledger’.
3. Review the adjusted ‘Trial Balance’ as of December 31, 2018.
4. Prepare an income statement for the period ended December 31, 2018, in the ‘Income Statement’ tab.
5. Prepare a classified balance sheet as of December 31, 2018, in the ‘Balance Sheet’ tab.
6. Record the closing entries in the ‘General Journal’ tab (these are shown as items 35-37). Update your ‘General Ledger’.

*will someone please explain/show the steps in this process for me? Thank you so much!

Amy company produces and sells a toy for $205 per unit. In the first year of operations, 100,000 units were produced and 75,000 were sold. other information for the year includes:

direct materials $31 per unit

direct manufacturing labor $3 per unit

variable manufacturing overhead costs $4 per unit

sales selling expenses $4 per unit

total fixed manufacturing costs $1,250,000

total fixed administrative expenses $950,000

a. compute the contribution margin per unit

Answer $163

b. then compute the inventoriable cost per unit under absorption costing

Answer $50.50

c. and finally, compute the inventoriable cost per unit under variable costing

Answer $38.00