Financial Accounting

You will each find an article from the past three months that relates to the topics such as long-term liabilities (i.e. debt) or stockholders’ equity.  There are many topics to select from including financial statements, company performance, ethics, inventory, receivables, liabilities, issuing stocks, etc.

submit a thread of 200-400 words to summarize the article selected and identify how the article relates to topic(s). You must reference a minimum of two sources. Be sure to not plagiarize, but paraphrase sources. The article selected should be attached for reference.

Bubba's Custom Shrimp Catering uses activity-based costing to determine the cost of its catering events. The firm has two activity cost pools: cooking (activity rate is $500 per catering event) and serving (activity rate is $12 per plate). The firm currently has 25 catering events a year, with an average of 50 plates per event. It also incurs about $400 in direct costs for each event. The firm has four opportunities to improve its processes (listed below in the answer choices). None of these process improvements is expected to affect revenue. Each process improvement costs $2,500. Which of the following is the MOST profitable process improvement (read the answer choices carefully)? Selected Answer: c. Reduce direct costs per event by 25% Answers: a. Reduce the number of plates per event by 20%. b. Reduce serving activity rate by 25% c. Reduce direct costs per event by 25% d. Reduce cooking activity rate by 25%

Variable and Absorption Costing
Summarized data for 2016 (the first year of operations) for Gorman Products, Inc., are as follows:

a. Prepare an income statement based on full absorption costing.
Only use a negative sign with your answer for net income (loss), if the answer represents a net loss. Otherwise, do not use negative signs with any answers. Round answers to the nearest whole number, when applicable.

b. Prepare an income statement based on variable costing.
Only use a negative sign with your answer for net income (loss), if the answer represents a net loss. Otherwise, do not use negative signs with any answers. Round answers to the nearest whole number, when applicable.

c. Assume that you must decide quickly whether to accept a special one-time order for 1,000 units for $15 per unit.

Which income statement presents the most relevant data? Answerabsorption costingvariable costing

Determine the apparent profit or loss on the special order based solely on these data.
Use a negative sign with your answer if the special order creates an apparent loss. Round answer to the nearest whole number.

$Answer  

d. If the ending inventory is destroyed by fire, which costing approach would you use as a basis for filing an insurance claim for the fire loss? Why?
Select the most appropriate statement.

Absorption costing approach because the cost should include a reasonable portion of fixed manufacturing costs.

Variable costing approach because the cost should include a reasonable portion of fixed manufacturing costs.

Please answer all parts of the question.

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Oscar Clemente is the manager of Forbes Division of Pitt, Inc., a manufacturer of biotech products. Forbes Division, which has $4.03 million in assets, manufactures a special testing device. At the beginning of the current year, Forbes invested $5.04 million in automated equipment for test machine assembly. The division’s expected income statement at the beginning of the year was as follows:

A sales representative from LSI Machine Company approached Oscar in October. LSI has for $5.22 million a new assembly machine that offers significant improvements over the equipment Oscar bought at the beginning of the year. The new equipment would expand division output by 10 percent while reducing cash fixed costs by 5 percent. It would be depreciated for accounting purposes over a three-year life. Depreciation would be net of the $594,000 salvage value of the new machine. The new equipment meets Pitt's 12 percent cost of capital criterion. If Oscar purchases the new machine, it must be installed prior to the end of the year. For practical purposes, though, Oscar can ignore depreciation on the new machine because it will not go into operation until the start of the next year.

The old machine, which has no salvage value, must be disposed of to make room for the new machine.

Pitt has a performance evaluation and bonus plan based on residual income. Pitt uses a cost of capital of 12 percent in computing residual income. Income includes any losses on disposal of equipment. Investment is computed based on the end-of-year balance of assets, net book value. Ignore taxes.

Required:

a. What is Forbes Division’s residual income if Oscar does not acquire the new machine? (Negative amount should be indicated by a minus sign. Enter your answer in thousands of dollars. Round your final answers to nearest whole dollar.)

b. What is Forbes Division’s residual income this year if Oscar acquires the new machine? (Negative amount should be indicated by a minus sign. Enter your answer in thousands of dollars. Round your final answers to nearest whole dollar.)

c. If Oscar acquires the new machine and operates it according to specifications, what residual income is expected for next year? (Negative amount should be indicated by a minus sign. Enter your answer in thousands of dollars. Round your final answers to nearest whole dollar.)

AHH! Corporation has three product lines with limited demand. The firm has NO fixed costs. Below are some facts about the firm. Oh! No! Way! Monthly demand (units) 100 120 140 Machine hours per unit 3 6 8 Price per unit $70 $75 $80 Variable costs per unit $60 $62 $60 The firm can only supply 1,800 hours of machine time per month between the three product lines. What is the firm's maximum monthly profit? Selected Answer: c. $4,300 Answers: a. $5,560 b. $4,510 c. $4,300 d. $4,650

Tawana owns and operates a sole proprietorship and has a 37 percent marginal tax rate. She provides her son, Jonathon, $10,000 a year for college expenses. Jonathon works as a pizza delivery person every fall and has a marginal tax rate of 15 percent.

How much pretax income does it currently take Tawana to generate the $10,000 (after-taxes) given to Jonathon?

If Jonathon worked for his mother’s sole proprietorship, what salary would she have to pay him to generate $10,000 after taxes (ignoring any Social Security, Medicare, or self-employment tax issues)?

How much money would the strategy save?

Mah Sing Group Berhad and UEM Sunrise Berhad are two leading property developers in Malaysia. The corporate profile of these two companies is as follows:

Mah Sing Group Berhad was listed on the Main Board of Bursa Malaysia in 1992 and ventured into property development in 1994. Mah Sing is one of Malaysia’s fully integrated developers with residential, commercial and industrial developments. The Group currently has 47 projects (34 ongoing) in Greater Kuala Lumpur and Klang Valley, Penang, Johor as well as Sabah. A leading property developer in Malaysia, Mah Sing’s diverse portfolio includes master planned townships, integrated developments, Grade A office buildings, retail projects and industrial developments. For more than two decades, Mah Sing has continuously created iconic developments that have won over 200 domestic and global awards for company performance, corporate governance, product design, concept, innovation and quality. Mah Sing has launched numerous big projects with luxury in mind. Some of the notables are Icon Residence (Mont Kiara), M City (Jalan Ampang), M Residence (Rawang), Icon City (Petaling Jaya), and Ferringhi Residence (Batu Ferringhi, Penang).

UEM Sunrise Berhad is a public-listed Company and one of Malaysia’s leading property developers. It is the Flagship Company for township and property development businesses of UEM Group Berhad and Khazanah Nasional Berhad. UEM group is wholly-owned by Khazanah, the strategic Investment fund of the government of Malaysia. The Company has core competencies in macro township development; high-rise residential, commercial, retail and integrated developments; as well as property management and project & construction services. The company is renowned for its numerous award-winning high-rise and landed residential; commercial and mix-use developments in Iskandar Puteri, Kuala Lumpur's affluent Mont' Kiara enclave, the Kuala Lumpur City Centre, Cyberjaya, Shah Alam, Bangi and Seremban.

Selected ratios for the three financial years of 2015, 2016 and 2017 are as follows:

Required:

1. Compare the performance of these two companies based on all the ratios above.

2. Identify two ratios that will be important to banks in evaluating loan application from these companies.

3. Identify two ratios that investors will consider in deciding to invest in any of these two companies.

Frederick and Sons is a small company that makes faucets rings.   They have experienced a larger than normal bad debts due to the slowdown in the economy.  Koehler Corporation is a multimillion-dollar Corporation that makes faucets and other plumber supplies is also experiencing bad debt losses. What method would each company use when writing off customers’ accounts unable to pay and why?   Give an entry for each when actually writing off a customer’s account.

Marc and Michelle are married and earned salaries this year of $64,000 and $12,000, respectively. In addition to their salaries, they received interest of $350 from municipal bonds and $500 from corporate bonds. Marc contributed $2,500 to an individual retirement account, and Marc paid alimony to a prior spouse in the amount of $1,500 (under a divorce decree effective June 1, 2005). Marc and Michelle have a 10-year-old son, Matthew, who lived with them throughout the entire year. Thus, Marc and Michelle are allowed to claim a $2,000 child tax credit for Matthew. Marc and Michelle paid $6,000 of expenditures that qualify as itemized deductions and they had a total of $3,500 in federal income taxes withheld from their paychecks during the year.

a. What is Marc and Michelle’s gross income?

b. What is Marc and Michelle’s adjusted gross income?

c. What is the total amount of Marc and Michelle’s deductions from AGI?

d. What is Marc and Michelle’s taxable income?

e. What is Marc and Michelle’s taxes payable or refund due for the year?

1. Take the Starbucks balance sheet (2018) and calculate the % of each account to the total of that section of the balance sheet (cash as a % of total assets, ST investments as a % of total assets......., then A/P as a % total of total liabilities, etc) Do this for all categories under assets, liability and equity. Perform the calculations on 2018 only.

2. What is the accounting equation for Starbucks as of 2017 and 2018?

3. What is the value (market cap) of Starbucks at Sep. 30, 2018?

For ALL of the following DO NOT GIVE ME JUST DEFINITIONS. It must be explained in the context of and using specifically the Starbucks financial results/statements, .

4. What are inventories? (minimum 100 words)

4a. What is the difference between Long-term and short-term investments? (minimum 100 words)

4b.What is the difference between accounts payable and accrued liabilities? (minumum 100 words)

4c. What is deferred revenues? Why is it a liability? (minimum 100 words)

4d. What is the difference between common and preferred stock (this is not on the Starbucks balance sheet thus reference to the book) - minimum 100 words.

4e. What is additional paid-in-capital? (minimum 100 words).

4f. What is retained earnings. (minimum 100 words)

Ayres Services acquired an asset for $88 million in 2021. The asset is depreciated for financial reporting purposes over four years on a straight-line basis (no residual value). For tax purposes the asset’s cost is depreciated by MACRS. The enacted tax rate is 25%. Amounts for pretax accounting income, depreciation, and taxable income in 2021, 2022, 2023, and 2024 are as follows:

Required:
For December 31 of each year, determine (a) the cumulative temporary book-tax difference for the depreciable asset and (b) the balance to be reported in the deferred tax liability account.

Amazon: Describe the fraud risks (Please be industry specific, you can find this out indirectly by reading more about the company)

Oslo Company prepared the following contribution format income statement based on a sales volume of 1,000 units (the relevant range of production is 500 units to 1,500 units):

1.  What is the contribution margin per unit? (Round your answer to 2 decimal places.)

2. What is the contribution margin ratio?

3. What is the variable expense ratio?

4. If sales increase to 1,001 units, what would be the increase in net operating income? (Round your answer to 2 decimal places.)

5. If sales decline to 900 units, what would be the net operating income?

6. If the selling price increases by $2 per unit and the sales volume decreases by 100 units, what would be the net operating income?

7. If the variable cost per unit increases by $1, spending on advertising increases by $1,150, and unit sales increase by 130 units, what would be the net operating income?

8. What is the break-even point in unit sales?

9. What is the break-even point in dollar sales?

10. How many units must be sold to achieve a target profit of $4,500?

11. What is the margin of safety in dollars? What is the margin of safety percentage?

12. What is the degree of operating leverage? (Round your answer to 2 decimal places.)

13. Using the degree of operating leverage, what is the estimated percent increase in net operating income of a 5% increase in sales? (Round your intermediate calculations and final answer to 2 decimal places.)

14. Assume that the amounts of the company’s total variable expenses and total fixed expenses were reversed. In other words, assume that the total variable expenses are $4,200 and the total fixed expenses are $17,500. Under this scenario and assuming that total sales remain the same, what is the degree of operating leverage? (Round your answer to 2 decimal places.)

15. Assume that the amounts of the company’s total variable expenses and total fixed expenses were reversed. In other words, assume that the total variable expenses are $4,200 and the total fixed expenses are $17,500. Given this scenario and assuming that total sales remain the same. Using the degree of calculated operating leverage, what is the estimated percent increase in net operating income of a 5% increase in sales? (Round your intermediate calculations and final answer to 2 decimal places.)

Oscar Clemente is the manager of Forbes Division of Pitt, Inc., a manufacturer of biotech products. Forbes Division, which has $4 million in assets, manufactures a special testing device. At the beginning of the current year, Forbes invested $5 million in automated equipment for test machine assembly. The division's expected income statement at the beginning of the year was as follows:

Sales revenue $ 16,000,000 Operating costs Variable 2,000,000 Fixed (all cash) 7,500,000 Depreciation New equipment 1,500,000 Other 1,250,000 Division operating profit $ 3,750,000

A sales representative from LSI Machine Company approached Oscar in October. LSI has for $6.5 million a new assembly machine that offers significant improvements over the equipment Oscar bought at the beginning of the year. The new equipment would expand division output by 10 percent while reducing cash fixed costs by 5 percent. It would be depreciated for accounting purposes over a three-year life. Depreciation would be net of the $500,000 salvage value of the new machine. The new equipment meets Pitt's 20 percent cost of capital criterion. If Oscar purchases the new machine, it must be installed prior to the end of the year. For practical purposes, though, Oscar can ignore depreciation on the new machine because it will not go into operation until the start of the next year. The old machine, which has no salvage value, must be disposed of to make room for the new machine. Pitt has a performance evaluation and bonus plan based on ROI. The return includes any losses on disposal of equipment. Investment is computed based on the end-of-year balance of assets, net book value. Ignore taxes. Oscar Clemente is still assessing the problem of whether to acquire LSI’s assembly machine. He learns that the new machine could be acquired next year, but if he waits until then, it will cost 15 percent more. The salvage value would still be $500,000. Other costs or revenue estimates would be apportioned on a month-by-month basis for the time each machine (either the current machine or the machine Oscar is considering) is in use. Fractions of months may be ignored. Ignore taxes.

Required: Calculate ROI for the coming year assuming that the new equipment is bought at the beginning of the year. (Do not round intermediate calculations. Round your final answer to nearest whole percentage.)

An S corporation is considered a flow-through business entity that has the advantages of both the corporation and proprietorship. Discuss the general rules that govern S corporations. What are some of the operational rules that effect various code provisions on S corporations? Go to www.irs.gov (Links to an external site.)Links to an external site. and provide a synopsis of the similarities and differences between S corporations and one other form of business.