Using the Payback Method, IRR, and NPV Problems Purpose of Assignment The purpose of this assignment is to allow the student to calculate the project cash flow using net present value (NPV), internal rate of return (IRR), and the payback methods. Assignment Steps Resources: Corporate Finance Calculate the following time value of money problems in Microsoft Excel or Word document. You must show all of your calculations. If you want to accumulate $500,000 in 20 years, how much do you need to deposit today that pays an interest rate of 15%? What is the future value if you plan to invest $200,000 for 5 years and the interest rate is 5%? What is the interest rate for an initial investment of $100,000 to grow to $300,000 in 10 years? If your company purchases an annuity that will pay $50,000/year for 10 years at a 11% discount rate, what is the value of the annuity on the purchase date if the first annuity payment is made on the date of purchase? What is the rate of return required to accumulate $400,000 if you invest $10,000 per year for 20 years. Assume all payments are made at the end of the period. Calculate the project cash flow generated for Project A and Project B using the NPV method. Which project would you select, and why? Which project would you select under the payback method? The discount rate is 10% for both projects. Use Microsoft® Excel® to prepare your answer. Note that a similar problem is in the textbook in Section 5.1. Sample Template for Project A and Project B: Show all work. Submit the all calcluations. Click the Assignment Files tab to submit your assignment.

define the two major approaches to accounting system: cash versus accrual.

why are the industrialized nations of the world moving toward standardization of accounting standards? Is the standardization a good idea? Why or why not?

Brothers Harry and Herman Hausyerday began operations of their machine shop (H & H Tool, Inc.) on January 1, 2016. The annual reporting period ends December 31. The trial balance on January 1, 2018, follows (the amounts are rounded to thousands of dollars to simplify):

Transactions and events during 2018 (summarized in thousands of dollars) follow:

1. Borrowed $11 cash on March 1 using a short-term note.
2. Purchased land on March 2 for future building site; paid cash, $8.
3. Issued additional shares of common stock on April 3 for $27.
4. Purchased software on July 4, $11 cash.
5. Purchased supplies on account on October 5 for future use, $19.
6. Paid accounts payable on November 6, $12.
7. Signed a $20 service contract on November 7 to start February 1, 2019.
8. Recorded revenues of $168 on December 8, including $44 on credit and $124 collected in cash.
9. Recognized salaries and wages expense on December 9, $89 paid in cash.
10. Collected accounts receivable on December 10, $28.

Data for adjusting journal entries as of December 31:

11. Unrecorded amortization for the year on software, $4.
12. Supplies counted on December 31, 2018, $12.
13. Depreciation for the year on the equipment, $5.
14. Interest of $1 to accrue on notes payable.
15. Salaries and wages earned but not yet paid or recorded, $13.
16. Income tax for the year was $7. It will be paid in 2019.

1. 9-a. How much net income did H & H Tool, Inc., generate during 2018? What was its net profit margin?

2. 9-b. Is the company financed primarily by liabilities or stockholders’ equity?

3. 9-c. What is its current ratio?

Commercial Law Question

Ben was an alumnus of HKU. He joined Wonder Sports Supplies Limited as a marketing assistant after graduated a year ago. Last Saturday, he took a recently marketed skateboard from his employer without permission and wanted to try it out near the HKU campus.

Ben was so excited to be back to the HKU campus again. He jumped onto the skateboard and started off despite the fact that he was not very skillful in this sport. Skateboarding on the lane in front of the HKU Residential College, Ben decided to go all the way along Bonham Road to Block D. As he was going down the slope, he started to accelerate at high speed and finally lost control. Ben skateboard ran into Tom, who was walking with his back towards the skateboard. Tom was knocked down by Ben, broke his left arm and injured his head. He was then rushed to the hospital by an ambulance.

Required:

(a)     Discuss whether Tom can bring an action against Ben for his injuries based on tort of negligence.

(b)     Explain the concept of vicarious liability. Discuss whether Tom can sue Wonder Sports Supplies Limited instead of Ben.

Some of the items on the balance sheet are based on estimated information. Consider management’s responsibility when it comes to the use of estimates (e.g., net realizable value of receivables, valuation of inventories, accumulated depreciation, etc). 1.Describe the incentives management has to misrepresent estimates. 2.With the core value of integrity in mind, discuss controls and procedures companies can put in place to prevent misrepresentation of these estimates.

Mr. Smith is the CFO of Suffolk Fasteners, Inc. and he is preparing for a meeting with SCC Bank to arrange the financing for the first quarter of 2020. Based on his sales forecast and the information he has provided (as detailed in the Situation below), your job as the company’s new management accountant is to prepare the following budgeted reports for the First Quarter of 2020:

1. Monthly Sales Budget
2. Monthly Production Budget
3. Monthly Direct Materials Budget

Situation:

Suffolk Fasteners, Inc. makes standard-size 2-inch fasteners, which it sells for $155 per thousand. Mr. Smith is the majority owner of the corporation and manages the inventory and finances of the company. He estimates sales for the following months in year 2020 to be:

In 2019, Suffolk Fasteners budgeted sales were $175,000 in November and $232,500 in December (1,500,000 fasteners).

Past history shows that Suffolk Fasteners collects 50 percent of its accounts receivable in the normal 30-day credit period (the month after the sale) and the other 50 percent in 60 days (two months after the sale).It pays for its materials 30 days after receipt. In general, Mr. Smith likes to keep a two-month supply of inventory in anticipation of sales. Inventory at the beginning of December was 2,600,000 units. (This was not equal to his desired two-month supply.)

The major cost of production is the purchase of raw materials in the form of steel rods, which are cut, threaded, and finished. Last year raw material costs were $52 per 1,000 fasteners, but Mr. Smith has just been notified that material costs have risen, effective January 1, to $60 per 1,000 fasteners. Suffolk Fasteners uses FIFO inventory accounting. Labor costs are relatively constant at $20 per thousand fasteners, since workers are paid on a piecework basis. Overhead is allocated at $10 per thousand units, and selling and administrative expense is 20 percent of sales. Labor expense and overhead are direct cash outflows paid in the month incurred, while interest and taxes are paid quarterly.

The corporation usually maintains a minimum cash balance of $25,000, and it puts its excess cash into marketable securities. The average tax rate is 40 percent, and Mr. Smith usually pays out 50 percent of net income in dividends to stockholders. Marketable securities are sold before funds are borrowed when a cash shortage is faced. Ignore the interest on any short-term borrowings. Interest on the long-term debt is paid in March, as are taxes and dividends.

As of year-end, the Suffolk Fasteners budgeted balance sheet was as follows:

Wyman Corporation uses a process costing system. The company manufactured certain goods at a cost of $890 and sold them on credit to Percy Corporation for $1,255. The complete journal entry to be made by Wyman at the time of this sale is:

• Debit Accounts Receivable $1,255; credit Sales $1,255; debit Cost of Goods Sold $890; credit Finished Goods Inventory $890.

• Debit Finished Goods Inventory $890; debit Sales $1,255; credit Accounts Receivable $1,255; credit Cost of Goods Sold $890.

• Debit Accounts Receivable $1,255; credit Sales $365; credit Finished Goods Inventory $890.

• Debit Accounts Receivable $1,255; debit Selling expense $890; credit Sales $1,255; credit Cost of Goods Sold $890.

• Debit Cost of Goods Sold $1,255; credit Sales $1,255.

2.

During March, the production department of a process operations system completed and transferred to finished goods 17,000 units that were in process at the beginning of March and 150,000 units that were started and completed in March. March's beginning inventory units were 100% complete with respect to materials and 59% complete with respect to conversion. At the end of March, 34,000 additional units were in process in the production department and were 100% complete with respect to materials and 24% complete with respect to conversion. Compute the number of equivalent units with respect to both materials and conversion respectively for March using the weighted-average method.

• 184,000 materials; 165,130 conversion.

• 175,160 materials; 175,160 conversion.

• 201,000 materials; 175,160 conversion.

• 201,000 materials; 201,000 conversion.

• 167,000 materials; 158,160 conversion.

Moon Corporation and Star Corporation are in the same line of business and both were recently organized, so it may be assumed that the recorded costs for assets are close to current market values. The balance sheets for the two companies are as follows at July 31, current year.

MOON CORPORATION BALANCE SHEET JULY 31, CURRENT YEAR

Assests

Cash 21600

Acounts receivable 31200

Office equipment 1400

Building 45600

land 44640

total: 144480

Liabilities

Notes payable (due in 60 days) 14880

accounts payable 11520

stock holders equity:

Capital stock 72000

Retained Earnings: 46080

Total: 144480

Star Corporation Balance Sheet July 31, current year

Assets

Cash 5760

Accounts receivable 11520

Office equipment 14400

building 72600

land 115200

Liabilities

Notes Payable (due in 60 days) 26880

accounts payable 51840

Stock Holders Equity:

Capital stock: 86400

Retained earnings: 53760

Total: 218880

A) Assume that you are a banker and that each company has applied to you for a 90-day loan of $12,000. Which would you consider to be the more favorable prospect? Explain your answer fully.

B) Assume that you are an investor considering purchasing all the capital stock of one or both of the companies. For which business would you be willing to pay the higher price? Do you see any indication of a financial crisis that you might face shortly after buying either company? Explain your answer fully. (For either decision, additional information would be useful, but you are to reach your decision on the basis of the information available.)

E13.17 Contributions Received on Behalf of Others

The United Way receives contributions and distributes them to other NFP organizations. Some of its transactions for the current year are as follows:

1. Donors contribute $5 million, designated to specific unaffiliated NFP organizations. $3 million of this money is distributed according to donor wishes during the current year.

2. Donors contribute $2 million, to be distributed to unaffiliated NFP organizations selected by United Way. United Way distributes $1.8 million of these donations in the current year.

3. Donors contribute $1 million, to be distributed to a specific affiliated organization. United Way distributes $900,000 of these donations in the current year.

Required

Prepare journal entries to record the above activities. If the item affects net assets, identify the category affected.

Evaluate the valuation and method used to determine the Initial Public Offering value of Facebook stock, indicating any miscalculations in the valuation that may have mislead potential investors and how these errors may have been minimized. Provide support for your response. Assess the performance of the stock within the first year of the public offering, indicating the drivers of the performance and the resulting impact to the company performance.

Specific Identification, FIFO, LIFO, and Weighted-Average

Swing Company's beginning inventory and purchases during the fiscal year ended September 30, 20-2, were as shown.

Use the following information for the specific identification method.

There are 1,300 units of inventory on hand on September 30, 20-2. Of these 1,300 units:

Required:

Calculate the total amount to be assigned to cost of goods sold for the fiscal year ended September 30, 20-2, and ending inventory on September 30, 20-2, under each of the following periodic inventory methods.

you will cover the options you have to communicate tax updates to clients.

With the ever-changing tax rules that come into effect every year, what options would you use to notify your client of the changes to the tax code that may affect them? Give several specific examples of different circumstances that warrant a communication and the services that you would subscribe to for each example. Give an example of a tax change that occurred this year that you would not notify your clients about.