1. Which of the following is true about property rights?

1. You don’t need property rights for real estate to have some value.
2. The right of use cannot be transferred.
3. They are the same in different states.
4. They give value to real estate.

2. What is the order of the Capital Stack in the order of first claims priority?

a. Senior Debt, Mezzanine, Junior Debt, Common Equity, Preferred Equity

b. Preferred Equity, Common Equity, Junior Debt, Mezzanine, Senior Debt

c. Senior Debt, Junior Debt, Mezzanine, Preferred Equity, Common Equity

d. Mezzanine, Common Equity, Senior Debt, Preferred Debt, Junior Equity

3. What type of lien can become senior to all other claims to a property?

1. Mechanics lien
2. Tax lien
3. Specific lien
4. General lien

4. Real Estate is the single largest component of wealth in society

True/False

A consulting firm has two departments, Corporate and Government. Computer support is common to both departments. The cost of computer support is $6 million. The following information is given: Gigabytes of Storage Number of Consultants Corporate 85,000 180 Government 35,000 230

Required: a. What is the cost charged to each department if the allocation is based on the number of gigabytes of storage? (Do not round intermediate calculations. Enter your answers in thousands of dollars.)

b. What is the cost charged to each department if number of consultants is the allocation basis? (Do not round intermediate calculations. Enter your answers in thousands of dollars.)

Magnolia Manufacturing makes wing components for large aircraft. Kevin Choi is the production manager, responsible for manufacturing, and Michelle Michaels is the marketing manager. Both managers are paid a flat salary and are eligible for a bonus. The bonus is equal to 1 percent of their base salary for every 10 percent profit that exceeds a target. The maximum bonus is 6 percent of salary. Kevin’s base salary is $280,000 and Michelle’s is $340,000. The target profit for this year is $5 million. Kevin has read about a new manufacturing technique that would increase annual profit by 20 percent. He is unsure whether to employ the new technique this year, wait, or not employ it at all. Using the new technique will not affect the target.

Required: a. Suppose that profit without using the technique this year will be $5 million. By how much will Kevin’s and Michelle’s bonus change if Kevin decides to employ the new technique? (Enter your answers in dollars, not in millions.)

b. Suppose that profit without using the technique this year will be $7.5 million. By how much will Kevin’s and Michelle’s bonus change if Kevin decides to employ the new technique? (Round your intermediate percentage answers to nearest whole percent. Enter your answers in dollars, not in millions.)

1.

Vertical Analysis of Income Statement

Revenue and expense data for Innovation Quarter Inc. for two recent years are as follows:

a. Prepare an income statement in comparative form, stating each item for both years as a percent of sales. If required, round percentages to one decimal place. Enter all amounts as positive numbers.

b. The vertical analysis indicates that the cost of goods sold as a percent of sales __________ by 5 percentage points, while selling expenses ____________ by 2 percentage points, and administrative expenses ___________ by 1 percentage points. Thus, net income as a percent of sales ________ by 2 percentage points.

2.

Vertical Analysis of Balance Sheet

Balance sheet data for Alvarez Company on December 31, the end of two recent fiscal years, follows:

Prepare a comparative balance sheet for both years, stating each asset as a percent of total assets and each liability and stockholders' equity item as a percent of the total liabilities and stockholders' equity. If required, round percentages to one decimal place.

2.

Horizontal Analysis of the Income Statement

Income statement data for Winthrop Company for two recent years ended December 31, are as follows:

a. Prepare a comparative income statement with horizontal analysis, indicating the increase (decrease) for the current year when compared with the previous year. If required, round to one decimal place.

b. The net income for Winthrop Company increased between years. This increase was the combined result of an ______ in sales and _____ percentage _____ in cost of goods sold. The cost of goods sold increased at a ______ rate than the increase in sales, thus causing the percentage increase in gross profit to be ______ than the percentage increase in sales.

Cost Classifications (Algo)

[The following information applies to the questions displayed below.]

Kubin Company’s relevant range of production is 24,000 to 31,000 units. When it produces and sells 27,500 units, its average costs per unit are as follows:

Exercise 1-10 (Algo) Differential Costs and Sunk Costs [LO1-5]

Required:

1. What is the incremental manufacturing cost incurred if the company increases production from 27,500 to 27,501 units?

2. What is the incremental cost incurred if the company increases production and sales from 27,500 to 27,501 units?

3. Assume that Kubin Company produced 27,500 units and expects to sell 27,160 of them. If a new customer unexpectedly emerges and expresses interest in buying the 340 extra units that have been produced by the company and that would otherwise remain unsold, what is the incremental manufacturing cost per unit incurred to sell these units to the customer?

4. Assume that Kubin Company produced 27,500 units and expects to sell 27,160 of them. If a new customer unexpectedly emerges and expresses interest in buying the 340 extra units that have been produced by the company and that would otherwise remain unsold, what incremental selling and administrative cost per unit is incurred to sell these units to the customer?

B. During 2020, Masefield, Inc. had the following convertible securities outstanding:

• $200,000 of 6% convertible bonds. Each $1,000 bond is convertible into 30 shares of common stock.

• $100,000 of 10%, $50 par, cumulative preferred stock. Each share is convertible into 4 shares of common stock.

Masefield, Inc. has an income tax rate of 30%. Its reported net income for 2020 was $210,000, and it had 26,000 shares of common stock outstanding all year.

Instructions: Calculate basic and diluted earnings per share for Masefield. You may omit ranking and impact of the dilutive securities. ****You must show computations.

Bruno Corporation is authorized to 20,000 shares of 6%, $100 par, cumulative, convertible preferred stock and 100,000 shares, $10 par value common stock. Bruno has outstanding 6,000 shares of preferred stock and 40,000 shares of common stock on the December 31, 2019 balance sheet. The following are selected transactions that occurred in 2020:

1. Bruno Corporation owes shares of Naple Corporation. At December 31, 2019, the securities were carried in Bruno’s accounting records at the cost of $875,000 which equaled the fair value. On April 1, when the fair of the securities was $990,000, Bruno declared a property dividend whereby the Naple securities are to be distributed on April 29, 2020 to common stockholders of record on April 15, 2020.

2. Acquired land by issuing 640 shares of preferred stock and 1,000 shares of common stock. The preferred and common stock are selling at $113 and $36 per share, respectively. The land was appraised at $112,000.

3. Bruno issued 3,000 shares of common stock and 1,000 shares of preferred stock for a lump sum of $220,000. The market price of the common stock was $38 and the preferred, $118.

4. Preferred shareholders, who originally paid the corporation $110 per share their stock converted 5,000 shares into common stock. Each preferred share is convertible into 3 shares of common stock. The current market price of the preferred stock and the common stock is $120 and $41 per share, respectively.

5. The company purchased 4,000 shares of its common stock at a price of $40 per share to be held in treasury. The company uses the cost method.

6. The company sold 500 shares of its common treasury stock for $42 per share.

7. The company sold 1,000 shares of its common treasury stock for $37 per share.

8. The board of directors declared a cash dividend for the year. The preferred and common shares outstanding on this date were 2,640 and 41,500 respectively. The common stock dividend was $2 per share. When you make this entry show separate liabilities for the preferred and common stock dividends.

Instructions: Prepare the journal entries to record the above events. *****Be sure to show calculations and note any assumptions when completing the entry.

Depreciation by Three Methods; Partial Years

Perdue Company purchased equipment on April 1 for $37,530. The equipment was expected to have a useful life of three years, or 4,860 operating hours, and a residual value of $1,080. The equipment was used for 900 hours during Year 1, 1,700 hours in Year 2, 1,500 hours in Year 3, and 760 hours in Year 4.

Required:

Determine the amount of depreciation expense for the years ended December 31, Year 1, Year 2, Year 3, and Year 4, by (a) the straight-line method, (b) units-of-output method, and (c) the double-declining-balance method.

Note: FOR DECLINING BALANCE ONLY, round the multiplier to four decimal places. Then round the answer for each year to the nearest whole dollar.

a. Straight-line method

b. Units-of-output method

c. Double-declining-balance method

Posting Journal Entries and preparing Trial Balance

Dyna Corp., a legal firm, completed the following transactions during the month of January, its first month of operations.

1. Jan. 1 Issued 4,000 shares of common stock for $20,000 cash.

2. Jan. 3 Purchased $24,000 of office equipment by paying $2,000 cash and by signing a one-year, 10% interest-bearing note payable for the remaining balance.

3. Jan. 3 Purchased $1,200 supplies on account. Hint: Debit supplies.

4. Jan. 4 Performed $1,600 of legal services on account.

5. Jan. 6 Received a $600 cash deposit from a new client for legal work to commence next month.

6. Jan. 10 Paid $2,000 cash for a 12-month insurance policy.

7. Jan. 13 Paid cash to settle the account for supplies purchased on January 3.

8. Jan. 20 Performed legal services for $2,000 cash.

9. Jan. 30 Collected $800 cash from customer on account for legal services performed on January 4.

10. Jan. 31 Paid $1,200 cash in salaries for the month of January.

11. Jan. 31 Paid $400 cash dividends to shareholders.

12. Jan. 31 Paid $2,000 cash for January rent.

Using the information above, complete the following requirements.

a. Post the journal entries 1 through 12 to T-accounts (serving as a ledger), and determine the ending balance in each T-account.

Note: Enter amounts in the order that they are presented above (1 through 12), using the first answer field on the appropriate side of the T-account. Not all answer fields will be used. Do not enter dates.

On January 1, 2014, Enterprise purchased 15-year, 6% bonds having maturity a value of $474,000. Interest is paid annually on December 31 and the bonds provide the bondholders a 5% yield. Pacific Enterprise uses the effective-interest method to amortize discount or premium. At the time of acquisition, the bonds were classified as trading. The fair value of the bonds on December 31, 2018 is $489,000. The fair value of the bonds as of December 31 of the immediately preceding year (prior measurement date) was $442,000. What is the amount of net income recognized in the 2018 income statement solely as a result of these bonds? Please show work!

Besides taking inventory counts, what other steps or controls can be put into place with regards to inventory? Discuss any physical controls (i.e. non-computer based) as well as automated (i.e. computer-based) controls that can be implemented to safeguard inventories. What is the goal for each control you noted? Please indicate at least 3 controls or actions that can be taken to help minimize loss of inventory and maintain accurate inventory records.

Golden Corp., a merchandiser, recently completed its 2017 operations. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory, (5) Other Expenses are all cash expenses, and (6) any change in Income Taxes Payable reflects the accrual and cash payment of taxes. The company’s balance sheets and income statement follow.

Additional Information on Year 2017 Transactions

1. Net income was $155,200.
2. Accounts receivable increased.
3. Inventory increased.
4. Accounts payable increased.
5. Income taxes payable increased.
6. Depreciation expense was $54,000.
7. Purchased equipment for $56,300 cash.
8. Issued 13,200 shares at $5 cash per share.
9. Declared and paid $101,000 of cash dividends.

    
Required:
Prepare a complete statement of cash flows using a spreadsheet; report operating activities under the indirect method. (Enter all amounts as positive values.)

The current asset section of the Excalibur Tire Company’s balance sheet consists of cash, marketable securities, accounts receivable, and inventory. The December 31, 2021, balance sheet revealed the following:

Required:
Determine the following 2021 balance sheet items:

1.Current assets

2.Shareholders' equity

3.Long-term assets

4.Long-term liabilities

"Ethical Considerations" Please respond to the following:

• Reflect upon the responsibilities placed on auditors by the PCAOB, and discuss whether those expectations are adequate considering current emerging issues.
• Discuss whether the Sarbanes-Oxley Act should be modified to adjust regulation of corporate executives and auditors in response to issues subsequent to the 2002 scandals.

Do you know why your credit card can be refused even though you are profitable?