(Capital Gains and Losses – Introduction).

In 2018, Steven Spielberg (single) has $5,000 of net short-term capital loss and $17,000 of net long-term capital loss. In 2019, he has $2,000 of net short-term capital gain, $8,000 of net 28% long-term capital gain, and $4,000 of net 0%/15%/20% long-term capital gain.

Determine the type (short-term or long-term) and amount of capital loss to be carried forward to 2019 and 2020, respectively.

Very well organised, please how every step.

Aspen Company estimates its manufacturing overhead to be $631,250 and its direct labor costs to be $505,000 for year 2. Aspen worked on three jobs for the year. Job 2-1, which was sold during year 2, had actual direct labor costs of $195,600. Job 2-2, which was completed, but not sold at the end of the year, had actual direct labor costs of $326,000. Job 2-3, which is still in work-in-process inventory, had actual direct labor costs of $130,400. Actual manufacturing overhead for year 2 was $801,900. Manufacturing overhead is applied on the basis of direct labor costs.

Required:

Prepare an entry to allocate over- or underapplied overhead to Work in Process, Finished Goods and Cost of Goods Sold. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

• Record the allocation of over- or underapplied overhead.

Note: Enter debits before credits.

DataSpan, Inc., automated its plant at the start of the current year and installed a flexible manufacturing system. The company is also evaluating its suppliers and moving toward Lean Production. Many adjustment problems have been encountered, including problems relating to performance measurement. After much study, the company has decided to use the performance measures below, and it has gathered data relating to these measures for the first four months of operations.

Management has asked for your help in computing throughput time, delivery cycle time, and MCE. The following average times have been logged over the last four months:

Required:

1-a. Compute the throughput time for each month.

1-b. Compute the delivery cycle time for each month.

1-c. Compute the manufacturing cycle efficiency (MCE) for each month.

2. Evaluate the company’s performance over the last four months.

3-a. Refer to the move time, process time, and so forth, given for month 4. Assume that in month 5 the move time, process time, and so forth, are the same as in month 4, except that through the use of Lean Production the company is able to completely eliminate the queue time during production. Compute the new throughput time and MCE.

3-b. Refer to the move time, process time, and so forth, given for month 4. Assume in month 6 that the move time, process time, and so forth, are again the same as in month 4, except that the company is able to completely eliminate both the queue time during production and the inspection time. Compute the new throughput time and MCE.

Cane Company manufactures two products called Alpha and Beta that sell for $155 and $115, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 110,000 units of each product. Its average cost per unit for each product at this level of activity are given below:

The company considers its traceable fixed manufacturing overhead to be avoidable, whereas its common fixed expenses are unavoidable and have been allocated to products based on sales dollars.

13. Assume that Cane’s customers would buy a maximum of 87,000 units of Alpha and 67,000 units of Beta. Also assume that the raw material available for production is limited to 168,000 pounds. How many units of each product should Cane produce to maximize its profits?

Alpha:

Beta:

a) A cash-basis business owner pays $2,300 for "in-house" lobbing expenses during the year. How much can she deduct?

b) What is the annual dollar limit of deductible compensation for the top five most highly compensated executives of a publicly held corporation?

c) A taxpayer traveled to a neighboring state to investigate the purchase of two restaurants in 2014. She pays/incurs investigation expenses of $35,000. Assuming she was not in the restaurant business previously, how much can she deduct in 014 if she acquires them and begins operations on July 1st?

Course: Theory of Interest (Actuarial Science)

Chapter: Yield Rates

Problem: This is a Multi-Part Question

Joe's retirement scheme at work pays $500 at the end of each month. Joe puts his money in an account which earns a nominal 12% converted monthly, the interest is reinvested at a nominal 4% converted monthly. Carol's account also pays $500 at the end of each month, but she earns nominal 12% convertible monthly (principal and interest both earn 12%). After 20 years, Joe and Carol retire.

a) How much money will Carol have? Answer: $184,465.8246

b) How long will it be before Carol's account exceeds Joe's by $1,000,000? Answer: 355.0933299 months or 29.59111082 years

Twenty metrics of liquidity, Solvency, and Profitability

The comparative financial statements of Automotive Solutions Inc. are as follows. The market price of Automotive Solutions Inc. common stock was $66 on December 31, 20Y8.

Determine the following measures for 20Y8. Round ratio values to one decimal place and dollar amounts to the nearest cent. For number of days' sales in receivables and number of days' sales in inventory, round intermediate calculations to the nearest whole dollar and final amounts to one decimal place. Assume there are 365 days in the year.

The following information is taken from Smith Corporation's financial statements:

December 31

2020   2019

For 2020 Year

—————————————

Net income                  $63,300

Depreciation expense              22,000

Amortization of patents             5,000

Cash dividends declared and paid        25,000

Gain or loss on sale of patents         none

INSTRUCTIONS

Prepare a statement of cash flows for Smith Corporation for the year 2020. (Use the indirect method.)

Menlo Company distributes a single product. The company’s sales and expenses for last month follow:

Required:

1. What is the monthly break-even point in unit sales and in dollar sales?

2. Without resorting to computations, what is the total contribution margin at the break-even point?

3-a. How many units would have to be sold each month to attain a target profit of $40,800?

3-b. Verify your answer by preparing a contribution format income statement at the target sales level.

4. Refer to the original data. Compute the company's margin of safety in both dollar and percentage terms.

5. What is the company’s CM ratio? If sales increase by $88,000 per month and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase?

Lindon Company is the exclusive distributor for an automotive product that sells for $32.00 per unit and has a CM ratio of 30%. The company’s fixed expenses are $177,600 per year. The company plans to sell 20,900 units this year.

Required:

1. What are the variable expenses per unit? (Round your "per unit" answer to 2 decimal places.)

2. What is the break-even point in unit sales and in dollar sales?

3. What amount of unit sales and dollar sales is required to attain a target profit of $81,600 per year?

4. Assume that by using a more efficient shipper, the company is able to reduce its variable expenses by $3.20 per unit. What is the company’s new break-even point in unit sales and in dollar sales? What dollar sales is required to attain a target profit of $81,600?

Neptune Company produces toys and other items for use in beach and resort areas. A small, inflatable toy has come onto the market that the company is anxious to produce and sell. The new toy will sell for $3.40 per unit. Enough capacity exists in the company’s plant to produce 30,200 units of the toy each month. Variable expenses to manufacture and sell one unit would be $2.14, and fixed expenses associated with the toy would total $56,578 per month.

The company's Marketing Department predicts that demand for the new toy will exceed the 30,200 units that the company is able to produce. Additional manufacturing space can be rented from another company at a fixed expense of $2,829 per month. Variable expenses in the rented facility would total $2.38 per unit, due to somewhat less efficient operations than in the main plant.

Required:

1. What is the monthly break-even point for the new toy in unit sales and dollar sales.

2. How many units must be sold each month to attain a target profit of $12,546 per month?

3. If the sales manager receives a bonus of 15 cents for each unit sold in excess of the break-even point, how many units must be sold each month to attain a target profit that equals a 28% return on the monthly investment in fixed expenses?

(For all requirements, Round "per unit" to 2 decimal places, intermediate and final answers to the nearest whole number.)

Question One.
The costs incurred by Noriega Company to acquire land and construct a building
were as follows:

Requirements:
a. Determine the cost of land
b. Determine the cost of the building ( 3 Marks)
c. Assuming the residue value of the building is K60,000,000 and that the
economic life is Ten years, compute Noriega LTD Company’s depreciation
expense for Year 1, Year 2, Year 3 under the following methods
i. Straight line Method
ii. Double Declining Method
iii. The Sum of Years Digit (SYD) Method ( 2 Marks)
d. At the beginning of Year 4, Noriega LTD Company incurred an additional
Cost of K10, 000,000 in order to add a new wing to the building; as a result
the salvage value of the building is increased by k5, 000,000 and also
increased the remaining life of the building by 2 years.

i. Re- Calculate the depreciation for the next two years using the straight
line method. ( 3 Marks)

Pittman Company is a small but growing manufacturer of telecommunications equipment. The company has no sales force of its own; rather, it relies completely on independent sales agents to market its products. These agents are paid a sales commission of 15% for all items sold.

Barbara Cheney, Pittman’s controller, has just prepared the company’s budgeted income statement for next year as follows:

*Primarily depreciation on storage facilities.

As Barbara handed the statement to Karl Vecci, Pittman’s president, she commented, “I went ahead and used the agents’ 15% commission rate in completing these statements, but we’ve just learned that they refuse to handle our products next year unless we increase the commission rate to 20%.”

“That’s the last straw,” Karl replied angrily. “Those agents have been demanding more and more, and this time they’ve gone too far. How can they possibly defend a 20% commission rate?”

“They claim that after paying for advertising, travel, and the other costs of promotion, there’s nothing left over for profit,” replied Barbara.

“I say it’s just plain robbery,” retorted Karl. “And I also say it’s time we dumped those guys and got our own sales force. Can you get your people to work up some cost figures for us to look at?”

“We’ve already worked them up,” said Barbara. “Several companies we know about pay a 7.5% commission to their own salespeople, along with a small salary. Of course, we would have to handle all promotion costs, too. We figure our fixed expenses would increase by $3,000,000 per year, but that would be more than offset by the $4,000,000 (20% × $20,000,000) that we would avoid on agents’ commissions.”

The breakdown of the $3,000,000 cost follows:

“Super,” replied Karl. “And I noticed that the $3,000,000 equals what we’re paying the agents under the old 15% commission rate.”

“It’s even better than that,” explained Barbara. “We can actually save $92,000 a year because that’s what we’re paying our auditors to check out the agents’ reports. So our overall administrative expenses would be less.”

“Pull all of these numbers together and we’ll show them to the executive committee tomorrow,” said Karl. “With the approval of the committee, we can move on the matter immediately.”

Required:

1. Compute Pittman Company’s break-even point in dollar sales for next year assuming:

a. The agents’ commission rate remains unchanged at 15%.

b. The agents’ commission rate is increased to 20%.

c. The company employs its own sales force.

2. Assume that Pittman Company decides to continue selling through agents and pays the 20% commission rate. Determine the dollar sales that would be required to generate the same net income as contained in the budgeted income statement for next year.

3. Determine the dollar sales at which net income would be equal regardless of whether Pittman Company sells through agents (at a 20% commission rate) or employs its own sales force.

4. Compute the degree of operating leverage that the company would expect to have at the end of next year assuming:

a. The agents’ commission rate remains unchanged at 15%.

b. The agents’ commission rate is increased to 20%.

c. The company employs its own sales force.

Use income before income taxes in your operating leverage computation.