Discuss the elimination process of inter-company bond and lease.

What is the formula I would insert into Excel

Problem 14-9 Zero-coupon bonds [LO14-2]

On January 1, 2018, Darnell Window and Pane issued $19.2 million of 10-year, zero-coupon bonds for $6,761,942. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)

Required:
2. Determine the effective rate of interest.
1. & 3. to 5. Prepare the necessary journal entries.

Complete this question by entering your answers in the tabs below.

• Interest rate
• General Journal

Determine the effective rate of interest.

• 1

  Record the issuance of the bonds.

• 2

  Record annual interest expense at December 31, 2018.

• 3

  Record annual interest expense at December 31, 2019.

• 4

  Record the payment at the bonds' maturity.

Each of the four independent situations below describes a finance lease in which annual lease payments are payable at the beginning of each year. The lessee is aware of the lessor’s implicit rate of return. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)

Required:
a. & b. Determine the amount of the annual lease payments as calculated by the lessor and the amount the lessee would record as a right-of-use asset and a lease liability, for each of the above situations. (Round your answers to the nearest whole dollar amount.)

1) Discuss the steps required when installing a qualified plan along with any difficulties that may be involved.

2)   Discuss required spousal benefit provisions, including QDROs. Include potential hardships for either spouse as a result of these provisions.  Also, discuss what would likely happen if these provisions were withdrawn.

3)   Discuss situations in which an individual may not be allowed, or may not wish to use, a Roth IRA for retirement planning.

Culver Leasing Company agrees to lease equipment to Larkspur Corporation on January 1, 2020. The following information relates to the lease agreement. 1. The term of the lease is 7 years with no renewal option, and the machinery has an estimated economic life of 9 years. 2. The cost of the machinery is $575,000, and the fair value of the asset on January 1, 2020, is $755,000. 3. At the end of the lease term, the asset reverts to the lessor and has a guaranteed residual value of $50,000. Larkspur estimates that the expected residual value at the end of the lease term will be 50,000. Larkspur amortizes all of its leased equipment on a straight-line basis. 4. The lease agreement requires equal annual rental payments, beginning on January 1, 2020. 5. The collectibility of the lease payments is probable. 6. Culver desires a 9% rate of return on its investments. Larkspur’s incremental borrowing rate is 10%, and the lessor’s implicit rate is unknown. Discuss the nature of this lease for both the lessee and the lessor. Calculate the amount of the annual rental payment required. Compute the value of the lease liability to the lessee. Prepare the journal entries Larkspur would make in 2020 and 2021 related to the lease arrangement. Prepare the journal entries Culver would make in 2020 and 2021 related to the lease arrangement. Suppose Larkspur expects the residual value at the end of the lease term to be $40,000 but still guarantees a residual of $50,000. Compute the value of the lease liability at lease commencement.

Discuss the requirement of IAS 7 in respect to preparation of cash flow statement for a group.

In January 2017, Mitzu Co. pays $2,700,000 for a tract of land with two buildings on it. It plans to demolish Building 1 and build a new store in its place. Building 2 will be a company office; it is appraised at $854,000, with a useful life of 20 years and a $90,000 salvage value. A lighted parking lot near Building 1 has improvements (Land Improvements 1) valued at $427,000 that are expected to last another 14 years with no salvage value. Without the buildings and improvements, the tract of land is valued at $1,769,000. The company also incurs the following additional costs:

3. Using the straight-line method, prepare the December 31 adjusting entries to record depreciation for the 12 months of 2017 when these assets were in use.

• Record the year-end adjusting entry for the depreciation expense of Building 2.

• 2

  Record the year-end adjusting entry for the depreciation expense of Building 3.

• 3

  Record the year-end adjusting entry for the depreciation expense of Land Improvements 1.

• 4

  Record the year-end adjusting entry for the depreciation expense of Land Improvements 2.

Cameron Co. established a $180 petty cash fund on January 1, 2020. One week later, on January 8, the fund contained $34.95 in cash and receipts for these expenditures: postage, $50.40; transportation-in, $32.40; store supplies, $39.35; and a withdrawal of $22.90 by Jim Cameron, the owner. Cameron uses the perpetual method to account for merchandise inventory.

a. Prepare the journal entry to establish the fund on January 1.

b. Prepare a summary of the petty cash payments and record the entry to reimburse the fund on January 8. (Round your answers to 2 decimal places.)

Analysis Component:

If the January 8 entry to reimburse the fund were not recorded and financial statements were prepared for the month of January, would profit be over- or understated?

multiple choice

• Overstated

• Understated

Shown below is activity for one of the products of Weasel:

January 1 balance, 220 units at $50 for a total of $11,000

Purchases: January 10-200 units at $42

                     January 20-500 units at $55

Sales: January 12-350 units

             January 28-425 units

1. Compute the ending inventory and cost of goods sold assuming Weasel uses LIFO and a periodic inventory system.

2. Compute the ending inventory and costs of goods sold assuming Weasel uses average cost and periodic inventory system.

Please Show all Work

Indicate the missing amount for each letter.

As a recently hired MBA intern, you are working in a consulting capacity to provide an analysis for Al Dente's Italian Restaurant. A financial income Statement is presented below: Sales $2,698,000 Cost of sales (all variable) $1,557,563 Gross Margin $1,140,438 Operating expenses: Variable $277,975 Fixed $213,675 Total operating expenses: $491,650 Administative expenses (all fixed) $564,375 Net operating income $84,413 This income statement presents the sales, expenses and pre-tax operating income for a local eating facility. At Al Dente, the average meal cost for lunches and dinners are $20 and $40 respectively. Al Dente serves both lunch and dinner 300 days per year and serves twice as many lunches as dinners. As the MBA intern you are to prepare a managerial

3. Using the CM income statement format, verify that your calculated break-even volume for lunches and dinners results in a NOI of zero (hint: in your prepared CM statement from #1, breakout the Sales dollars into subcategories lunch and dinner as shown below, using the values of X for in the # of meals cells). Present the entire CM statement at the BE level.

Presented here is the income statement for Fairchild Co. for March:

Based on an analysis of cost behavior patterns, it has been determined that the company's contribution margin ratio is 25%.

Required:

a. Rearrange the preceding income statement to the contribution margin format.

What is Owner Equity and how is it calculated using the basic accounting equation. There are two components of equity on a cost basis balance sheet and three components of equity on a market basis balance sheet. Explain what each of the components is. Why is the extra component of equity on the market basis balance sheet not found on the cost basis balance sheet?

Golden Gate Construction Associates, a real estate developer and building contractor in San Francisco, has two sources of long-term capital: debt and equity. The cost to Golden Gate of issuing debt is the after-tax cost of the interest payments on the debt, taking into account the fact that the interest payments are tax deductible. The cost of Golden Gate’s equity capital is the investment opportunity rate of Golden Gate’s investors, that is, the rate they could earn on investments of similar risk to that of investing in Golden Gate Construction Associates. The interest rate on Golden Gate’s $69 million of long-term debt is 8 percent, and the company’s tax rate is 30 percent. The cost of Golden Gate’s equity capital is 10 percent. Moreover, the market value (and book value) of Golden Gate’s equity is $83 million.

The company has two divisions: the real estate division and the construction division. The divisions’ total assets, current liabilities, and before-tax operating income for the most recent year are as follows:

Required:

Calculate the economic value added (EVA) for each of Golden Gate Construction Associates’ divisions. (Round your weighted-average cost of capital to 3 decimal places (i.e. .123). Enter your answers in millions rounded to 3 decimal places (i.e. 1,234,000 should be entered as 1.234).)