Comprehensive CVP analysis:

Bison Industries manufactures 16GB flash drives. The current sales volume is 100,000 units per month. Price and cost data for a relevant rage extending to 200,000 units per month is as follows:

1. Prepare a contribution margin format income statement in good form including per unit and ratio columns.
   
2. What is the company’s contribution margin per unit? Contribution margin ratio? Total contribution margin?
   
3. What would the company’s monthly operating income be if it sold 130,000 units?
   
4. What would the company’s monthly operating income be if it had sales of $4,000,000?
   
5. What is the breakeven point in units and dollars?
   
6. What is the current margin of safety in units and dollars?
   
7. How many units would the company have to sell to earn a target monthly profit of $260,100?
   
8. Management is currently in contract negations with the labor union. If the negotiations fail, direct labor costs will increase by 10% and fixed costs will increase by $23,500 per month. If these costs increase, how many units will the company have to sell each month to breakeven?

(Entries for Equipment Acquisitions) Jane Geddes Engineering Corporation purchased conveyor equipment with a list price of $10,000. The vendors credit terms were 2/10, n/30. Presented below are two independent cases related to equipment. Assume that the purchases of equipment are recorded gross. (Round to nearest dollar)

a.) Geddes paid cash for the equipment 8 days after the purchase. The vendor's credit terms are 2/10, n/30. Assume equipment purchases are initially recorded gross.
b.) Geddes traded in equipment with a book value of $2,000 (initial cost $8,000) and paid $9,500 in case one month after the purchase. The old equipment could have been sold for $400 at the date of trade. Assume the exchange has commercial substance.

c.) Geddes gave the vendor a $10,800 zero-interest-bearing note for the equipment on the date of purchase. The note was due in one year and was paid on time. Assume that the effective-interest rate in the market was 9%

Instructions
Prepare the general journal entries required to record the acquisition and payment in cash of the independent cases above. Round to the nearest dollar.

A company will sell Widgets to consumers at a price of $85 per unit. The variable cost to produce Widgets is $23 per unit. The company expects to sell 15,000 Widgets to consumers each year. The fixed costs incurred each year will be $110,000. There is an initial investment to produce the goods of $2,900,000 which will be depreciated straight line over the 13 year life of the investment to a salvage value of $0. The opportunity cost of capital is 10% and the tax rate is 31%.

a) What is operating cash flow each year? answer 634953.85

b) Using the an annual operating cash flow of $634,953.85, what is the net present value of this investment?  

Should the company accept or reject this project?

I know how to do part a but i dont know how to do part b, can u provide steps please

United Rentals Corporation is authorized to issue 100,000 shares of 5%, $60 par value preferred stock and 5,000,000 shares of no-par common stock with a stated value of $3 per share. During 2018, its first year of operation, the company has the following transactions.    

    Jan. 1 Issued 15,000 shares of preferred stock for cash at $106 per share.    

    Jan. 15 Issued 500,000 shares of common stock for cash at $8 per share.    

    Mar. 2 Issued 20,000 shares of common stock for land. The land had an

              asking price of $300,000. The stock is currently selling

              on a national exchange at $14 per share.

    Apr. 30 Issued 4,000 shares of common stock to attorneys in payment of

              their bill for $50,000 for legal services rendered in helping the

              company incorporate.

    Sept. 5 Purchased 10,000 shares of its own common stock at

              $15 per share.    

    Dec. 6 Sold 8,000 shares of the treasury stock at $16 per share.

    Dec. 10 Sold the remaining treasury stock for $14 per share.    

     INSTRUCTIONS

     Journalize the transactions for United Rentals Corporation.

1. The Urban Outfitters Company had the following financial information on June 30,2018, the end of their fiscal year:

       Preferred stock, 9%, $100 par value,75,000 shares

        authorized, ____??___shares issued.................    $4,000,000

        Common stock, $15 par value, 2,500,000 shares

        authorized; __??__ shares issued and _??____

        outstanding ..................................         9,000,000

        Additional paid-in capital

           In excess of par value-common...................      900,000   

        Retained Earnings ..................................   2,400,000                                                        

        Treasury stock (5,000 shares)..............              240,000

     INSTRUCTIONS

     Complete the following statements and show your computations. (Show

    computations)    

1. The number of shares of common stock outstanding was _______________.
2. The total annual preferred stock dividend is_______________.
3. The total Paid-In-Capital is_____________________.    

     (d) The number of shares of preferred stock issued was __________.

     (e) The average sales price per share of the common stock when issued was                                  

     (f) The cost per share of the treasury stock was $_____________.

Impact of the 2018 Tax Changes...and the resulting increases vs decreases to the corporation's value

Return on Investment, Margin, Turnover

Ready Electronics is facing stiff competition from imported goods. Its operating income margin has been declining steadily for the past several years. The company has been forced to lower prices so that it can maintain its market share. The operating results for the past 3 years are as follows:

For the coming year, Ready's president plans to install a JIT purchasing and manufacturing system. She estimates that inventories will be reduced by 70% during the first year of operations, producing a 20% reduction in the average operating assets of the company, which would remain unchanged without the JIT system. She also estimates that sales and operating income will be restored to Year 1 levels because of simultaneous reductions in operating expenses and selling prices. Lower selling prices will allow Ready to expand its market share.

(Note: Round all numbers to two decimal places.)

Required:

1. Compute the ROI, margin, and turnover for Years 1, 2, and 3.

2. Conceptual Connection: Suppose that in Year 4 the sales and operating income were achieved as expected, but inventories remained at the same level as in Year 3. Compute the expected ROI, margin, and turnover.

Why did the ROI increase over the Year 3 level?
The ROI increased because expenses decreased and assets turned over at a higher rate (sales increased).

3. Conceptual Connection: Suppose that the sales and net operating income for Year 4 remained the same as in Year 3 but inventory reductions were achieved as projected. Compute the ROI, margin, and turnover.

Why did the ROI exceed the Year 3 level?
The ROI increased because assets decreased.

4. Conceptual Connection: Assume that all expectations for Year 4 were realized. Compute the expected ROI, margin, and turnover.

Why did the ROI increase over the Year 3 level?
The ROI increased because expenses decreased and assets turned over at a higher rate.

One of your Taiwanese suppliers has bid on a new line of molded plastic parts that is currently being assembled at your plant. The supplier has bid $0.10 per part, given a forecast you provided of 200,000 parts in year 1; 400,000 in year 2; and 500,000 in year 3. Shipping and handling of parts from the supplier’s factory is estimated at $0.03 per unit. Additional inventory handling charges should amount to $0.005 per unit. Finally, administrative costs are estimated at $30 per month.

Although your plant is able to continue producing the part, the plant would need to invest in another molding machine, which would cost $20,000. Direct materials can be purchased for $0.06 per unit. Direct labor is estimated at $0.05 per unit for wages plus a 50 percent surcharge for benefits and, indirect labor is estimated at $0.009 per unit plus 50 percent benefits. Up-front engineering and design costs will amount to $30,000. Finally, management has insisted that overhead be allocated if the parts are made in-house at a rate of 100 percent of direct labor wage costs. The firm uses a cost of capital of 15 percent per year.

a. Calculate the difference in NPVs between the Make and Buy options. Express all costs as positive values in your calculations. It is suggested to use the NPV function in Excel. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

(Difference in NPV $

b. Should you continue to produce in-house or accept the bid from your Taiwanese supplier?

Nicole’s Getaway Spa (NGS) purchased a hydrotherapy tub system to add to the wellness programs at NGS. The machine was purchased at the beginning of the year at a cost of $9,500. The estimated useful life was five years and the residual value was $500. Assume that the estimated productive life of the machine is 10,000 hours. Expected annual production was year 1, 2,200 hours; year 2, 2,300 hours; year 3, 2,400 hours; year 4, 2,100 hours; and year 5, 1,000 hours.

Assume NGS sold the hydrotherapy tub system for $2,850 at the end of year 3.The following amounts were forecast for year 3: Sales Revenues $43,000; Cost of Goods Sold $34,000; Other Operating Expenses $4,300; and Interest Expense $900. Create an income statement for year 3 for each of the different depreciation methods, ending at Income before Income Tax Expense. (Don't forget to include a loss or gain on disposal for each method.).

Estate Finance Family Tax Plan Question

1. On January 2, 2000, Larry creates a trust with himself as trustee. Larry as trustee may distribute income and principal to Susie and Leon to provide for their health, education, maintenance and support. Upon Larry's death, the remainder is distributed to Susie and Leon equally. Does Larry's power to distribute principal and income cause the trust to be grantor as to Larry under § 671? Why or why not?

What is the Interpretation between the two companies' ratios for The 2015 & 2016 Celgene & 2015 & 2016 Gilead Financial statements used to calculate these ratios.

Estate Finance Family Tax Plan Question

Assume for the purposes of this question that the UPAIA dictates the calculation of fiduciary accounting income.

1. In 2001, Larry creates a trust with Tenleytown Trust Company as trustee. The trustee must distribute income to Susie, Jeff and Leon (the trust does not provide for distributions of principal). In 2002, the trust has $50,000 of interest from corporate bonds, $50,000 of interest from tax-exempt municipal bonds and $50,000 of dividends. The trust also sells Asset A that has a basis of $100,000 for $500,000. In 2012, trust pays trustee fees to Tenleytown Trust Company of $50,000 and attorney's fees of $50,000 to the law offices of Hiram Katz. What is the trust's fiduciary accounting income? Analyze how much of each receipt and disbursement should be allocated to income or principal.

Financial accounting information is historical in nature, reporting on what has happened in the past. To facilitate comparisons between companies, this information must conform to certain accounting standards or principles called generally accepted accounting principles (GAAP).

Please discuss this statement, emphasising the importance of a user of financial statements being able to compare financial statements prepared by different companies.

Write a paragraph discussing the differences between common stock and preferred stock from the investor's perspective for this company. Comment specifically on dividends, potential for the future increase in share price and risks.

Thanks,