1. Per the information in Chapter One, _________________ is(are) important skill(s) to develop

                                                                for a career in the finance area.

1. critical thinking.
2. communication.
3. collaboration.
4. financial computing skills.
5. A and B and C.
6. A and B and C and D.

2 The overall goal of a corporation can be summarized as

1. maximizing shareholder wealth.
2. maximizing the firm’s “Net Income.”
3. maximizing the firm’s “Earnings Per Share” (EPS).
4. maximizing the number of common stock shares outstanding.

3. The “stakeholders” of a toy manufacturing corporation headquartered in Boston and doing business

                                                                domestically within the U.S. may include the following EXCEPT

1. the firm’s shareholders.
2. vendors of the firm’s packaging materials.

C. members of the Board of Directors of the Bank of England.

D. residents of Boston, the community in which the firm’s corporate headquarters is located.

4. The system of rules, processes, and laws that is used to direct and control a corporation is

                                                                known as

1. the “agency” issue.
2. corporate governance.
3. the Board of Directors.
4. the prospectus.

5. Corporate ethics programs seek to

1. reduce litigation and judgment costs.
2. maintain a positive corporate image.
3. build shareholder confidence.
4. gain the loyalty and respect of stakeholders.
5. A and B and C and D.
6. A and B and D.

The Polaris Company uses a job-order costing system. The following transactions occurred in October:

1. Raw materials purchased on account, $210,000.
2. Raw materials used in production, $190,000 ($152,000 direct materials and $38,000 indirect materials).
3. Accrued direct labor cost of $49,000 and indirect labor cost of $21,000.
4. Depreciation recorded on factory equipment, $105,000.
5. Other manufacturing overhead costs accrued during October, $131,000.
6. The company applies manufacturing overhead cost to production using a predetermined rate of $5 per machine-hour. A total of 76,200 machine-hours were used in October.
7. Jobs costing $512,000 according to their job cost sheets were completed during October and transferred to Finished Goods.
8. Jobs that had cost $452,000 to complete according to their job cost sheets were shipped to customers during the month. These jobs were sold on account at 22% above cost.

Required:

1. Prepare journal entries to record the transactions given above.

2. Prepare T-accounts for Manufacturing Overhead and Work in Process. Post the relevant transactions from above to each account. Compute the ending balance in each account, assuming that Work in Process has a beginning balance of $34,000.

Have recent tax law changes increased or decreased the double tax on C corporation income? Explain.

Material, Labor, and Variable Overhead Variances The following summarized manufacturing data relate to Kiosse Corporation’s May operations, during which 2,000 finished units of product were produced. Normal monthly capacity is 1,100 direct labor hours.

Assume that the 6,200 lb. of materials purchased were all used in producing the 2,000 completed units. Determine the materials price and efficiency variances, labor rate and efficiency variances, and variable overhead spending and efficiency variances.

Do not use negative signs with any of your answers. Next to each variance answer, select either "F" for Favorable or "U" for Unfavorable.

The Town of Weston has a Water Utility Fund with the following trial balance as of July 1, 2016, the first day of the fiscal year:

During the year ended June 30, 2017, the following transactions and events occurred in the Town of Weston Water Utility Fund:

1. Accrued expenses at July 1 were paid in cash.
2. Billings to nongovernmental customers for water usage for the year amounted to $1,383,000; billings to the General Fund amounted to $110,000.
3. Liabilities for the following were recorded during the year:

4. Materials and supplies were used in the amount of $278,000 all for costs of sale and services.
5. $14,200 of old accounts receivable were written off.
6. Accounts receivable collections totaled $1,482,800 from nongovernmental customers and $49,000 from the General Fund.
7. $1,047,800 of accounts payable were paid in cash.
8. One year’s interest in the amount of $177,200 was paid.
9. Construction was completed on plant assets costing $253,000; that amount was transferred to Utility Plant in Service.
10. Depreciation was recorded in the amount of $263,100.
11. Interest in the amount of $25,300 was reclassified to Construction Work in Progress. (This was previously paid in item 8).
12. The Allowance for Uncollectible Accounts was increased by $10,000.
13. As required by the loan agreement, cash in the amount of $103,000 was transferred to Restricted Assets for eventual redemption of the bonds.
14. Accrued expenses, all related to costs of sales and services, amounted to $92,000.
15. Nominal accounts for the year were closed.

Required:

1. Record the transactions for the year in general journal form.
2. Prepare a Statement of Revenues, Expenses, and Changes in Fund Net Position.
3. Prepare a Statement of Net Position as of June 30, 2017.
4. Prepare a Statement of Cash Flows for the year ended June 30, 2017. Assume all debt and interest are related to capital outlay. Assume the entire construction work in progress liability (see item 3) was paid in entry 7. Include restricted assets as cash and cash equivalents.

Specter Co. combines cash and cash equivalents on the balance sheet. Using the following information, determine the amount reported on the year-end balance sheet for cash and cash equivalents.

• $7,000 cash deposit in checking account.
• $28,000 bond investment due in 20 years.
• $7,000 U.S. Treasury bill due in 1 month.
• $400, 3-year loan to an employee.
• $1,800 of currency and coins.
• $700 of accounts receivable.

Bunnell Corporation is a manufacturer that uses job-order costing. On January 1, the company’s inventory balances were as follows:

The company applies overhead cost to jobs on the basis of direct labor-hours. For the current year, the company’s predetermined overhead rate of $12.75 per direct labor-hour was based on a cost formula that estimated $510,000 of total manufacturing overhead for an estimated activity level of 40,000 direct labor-hours. The following transactions were recorded for the year:

1. Raw materials were purchased on account, $654,000.
2. Raw materials use in production, $618,800. All of of the raw materials were used as direct materials.
3. The following costs were accrued for employee services: direct labor, $460,000; indirect labor, $150,000; selling and administrative salaries, $270,000.
4. Incurred various selling and administrative expenses (e.g., advertising, sales travel costs, and finished goods warehousing), $417,000.
5. Incurred various manufacturing overhead costs (e.g., depreciation, insurance, and utilities), $360,000.
6. Manufacturing overhead cost was applied to production. The company actually worked 41,000 direct labor-hours on all jobs during the year.
7. Jobs costing $1,539,250 to manufacture according to their job cost sheets were completed during the year.
8. Jobs were sold on account to customers during the year for a total of $3,172,500. The jobs cost $1,549,250 to manufacture according to their job cost sheets.

Required :

6. What is the journal entry to record the transfer of completed jobs that is referred to in item g above?

7. What is the ending balance in Work in Process?

8. What is the total amount of actual manufacturing overhead cost incurred during the year?

9. Is manufacturing overhead underapplied or overapplied for the year? By how much?

10. What is the cost of goods available for sale during the year?

Andretti Company has a single product called a Dak. The company normally produces and sells 83,000 Daks each year at a selling price of $60 per unit. The company’s unit costs at this level of activity are given below:

Direct materials $ 9.50

Direct labor 9.00

Variable manufacturing overhead 2.30

Fixed manufacturing overhead 9.00 ($747,000 total)

Variable selling expenses 2.70

Fixed selling expenses 3.50 ($290,500 total)

Total cost per unit $ 36.00

1-a. Assume that Andretti Company has sufficient capacity to produce 103,750 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its unit sales by 25% above the present 83,000 units each year if it were willing to increase the fixed selling expenses by $100,000. What is the financial advantage (disadvantage) of investing an additional $100,000 in fixed selling expenses?

1-b. Would the additional investment be justified?

4. Due to a strike in its supplier’s plant, Andretti Company is unable to purchase more material for the production of Daks. The strike is expected to last for two months. Andretti Company has enough material on hand to operate at 25% of normal levels for the two-month period. As an alternative, Andretti could close its plant down entirely for the two months. If the plant were closed, fixed manufacturing overhead costs would continue at 35% of their normal level during the two-month period and the fixed selling expenses would be reduced by 20% during the two-month period.

b. How much total fixed cost will the company avoid if it closes the plant for two months?

c. What is the financial advantage (disadvantage) of closing the plant for the two-month period?

The following information is available for the employees of Webber Packing Company for the first week of January Year 1: Kayla earns $27 per hour and 1½ times her regular rate for hours over 40 per week. Kayla worked 51 hours the first week in January. Kayla’s federal income tax withholding is equal to 12 percent of her gross pay. Webber pays medical insurance of $75 per week for Kayla and contributes $50 per week to a retirement plan for her. Paula earns a weekly salary of $1,350. Paula’s federal income tax withholding is 18 percent of her gross pay. Webber pays medical insurance of $110 per week for Paula and contributes $135 per week to a retirement plan for her. Vacation pay is accrued at the rate of 2 hours per week (based on the regular pay rate) for Kayla and $95 per week for Paula. Assume the Social Security tax rate is 6.0 percent on the first $110,000 of salaries and the Medicare tax rate is 1.5 percent of total salaries. The state unemployment tax rate is 5.4 percent and the federal unemployment tax rate is 0.6 percent of the first $7,000 of salary for each employee.

c. Prepare the journal entry to record the payment of the payroll for the week.

The correct accounts are as follows:

Salaries Expense

Fica Tax: SS Payable

Fica Tax: Med Payable

Cash

I can't figure out the correct amounts

d. Prepare the journal entry to record the payroll tax expense and fringe benefit expense for Webber Packing Company for the week.

.

1. ffect of Transactions on A company's ability to pay its current liabilities.Current Position Analysis

   Data pertaining to the current position of Lucroy Industries Inc. follow:

   Cash	$417,500
   Marketable securities	190,000
   Accounts and notes receivable (net)	340,000
   Inventories	750,000
   Prepaid expenses	48,000
   Accounts payable	190,000
   Notes payable (short-term)	240,000
   Accrued expenses	315,000

   Required:

   1. Compute (a) the The excess of the current assets of a business over its current liabilities.working capital, (b) the A financial ratio that is computed by dividing current assets by current liabilities.current ratio, and (c) the A financial ratio that measures the ability to pay current liabilities with quick assets (cash, temporary investments, accounts receivable), computed as quick assets divided by current liabilities.quick ratio. Round ratios to one decimal place.

   a. Working capital	$
   b. Current ratio
   c. Quick ratio

   2. Compute the working capital, the current ratio, and the quick ratio after each of the following transactions and record the results in the appropriate columns. Consider each transaction separately and assume that only that transaction affects the data given. Round ratios to one decimal place.

   Transaction	Working Capital		Current Ratio		Quick Ratio
   a. Sold marketable securities at no gain or loss, $70,000.	$
   b. Paid accounts payable, $105,000.	$
   c. Purchased goods on account, $130,000.	$
   d. Paid notes payable, $110,000.	$
   e. Declared a cash dividend, $160,000.	$
   f. Declared a common stock dividend on common stock, $30,000.	$
   g. Borrowed cash from bank on a long-term note, $220,000.	$
   h. Received cash on account, $125,000.	$
   i. Issued additional shares of stock for cash, $565,000.	$
   j. Paid cash for prepaid expenses, $12,000.	$

Esperado Furnishings are retailers who purchase and sell household furnishings, including table lamps. The business uses a perpetual inventory system and adjusts cost of goods sold for any shortage or excess inventory. The business began the last quarter of 2018 with merchandise inventory of 10 pairs of “Italia” table lamps at a total cost of $168,200.

The following transactions, relating to the “Italia” brand were completed during the quarter:

All purchases were on account and received on the dates stated. Required:

1. Prepare a perpetual inventory record for Esperado Furnishings, using the first in, first out (FIFO) method to determine the value of ending inventory at December 31, 2018, and the total amount to be assigned to cost of goods sold for the period.

2. Given that selling, distribution and administrative costs for the quarter were $23,445, $10,250 and$75,435 respectively, prepare an income statement for Esperado Furnishings for the period, to determine the net profit for the quarter, assuming the perpetual inventory system.

3. You are told that 8 pairs of lamps sold on November 27, 2018 were on account. State the journal entries necessary to record the transactions on November 12 and November 27, assuming the business uses a:

- Perpetual inventory system

- Periodic inventory system

4. Assuming that Esperado sold 86 pairs of “Italia” brand of lamps during the quarter; determine the value of ending inventory and cost of goods sold assuming the business used the periodic system and the LIFO method?

A firm's bonds have a maturity of 8 years with a $1,000 face value, have an 11% semiannual coupon, are callable in 4 years at $1,142, and currently sell at a price of $1,261.56.

1. What is their nominal yield to maturity? Round your answer to two decimal places.
   
   %
   
2. What is their nominal yield to call? Round your answer to two decimal places.
   
   %
   
3. What return should investors expect to earn on these bonds?
   
   1. Investors would expect the bonds to be called and to earn the YTC because the YTC is greater than the YTM.
   2. Investors would not expect the bonds to be called and to earn the YTM because the YTM is greater than the YTC.
   3. Investors would not expect the bonds to be called and to earn the YTM because the YTM is less than the YTC.
   4. Investors would expect the bonds to be called and to earn the YTC because the YTC is less than the YTM.
   5. Investors would expect the bonds to be called and to earn the YTC because the YTM is less than the YTC.
   
   -Select-IIIIIIIVV

Costs per Equivalent Unit

Georgia Products Inc. completed and transferred 89,000 particle board units of production from the Pressing Department. There was no beginning inventory in process in the department. The ending in-process inventory was 2,400 units, which were 3⁄5 complete as to conversion cost. All materials are added at the beginning of the process. Direct materials cost incurred was $219,360, direct labor cost incurred was $28,100, and factory overhead applied was $12,598.

Determine the following for the Pressing Department. Round "cost per equivalent unit" answers to the nearest cent.

Kaufman Enterprises has bonds outstanding with a $1,000 face value and 10 years left until maturity. They have an 12% annual coupon payment, and their current price is $1,180. The bonds may be called in 5 years at 109% of face value (Call price = $1,090).

1. What is the yield to maturity? Round your answer to two decimal places.
   %
   
2. What is the yield to call if they are called in 5 years? Round your answer to two decimal places.
   %
   
3. Which yield might investors expect to earn on these bonds? Why?
   
   1. Investors would not expect the bonds to be called and to earn the YTM because the YTM is less than the YTC.
   2. Investors would expect the bonds to be called and to earn the YTC because the YTC is less than the YTM.
   3. Investors would expect the bonds to be called and to earn the YTC because the YTM is less than the YTC.
   4. Investors would expect the bonds to be called and to earn the YTC because the YTC is greater than the YTM.
   5. Investors would not expect the bonds to be called and to earn the YTM because the YTM is greater than the YTC.
   
   -Select I-V
   
4. The bond's indenture indicates that the call provision gives the firm the right to call the bonds at the end of each year beginning in Year 5. In Year 5, the bonds may be called at 109% of face value; but in each of the next 4 years, the call percentage will decline by 1%. Thus, in Year 6, they may be called at 108% of face value; in Year 7, they may be called at 107% of face value; and so forth. If the yield curve is horizontal and interest rates remain at their current level, when is the latest that investors might expect the firm to call the bonds?
   
   In Year (5,6,7,8,9)?