Assume Nortel Networks contracted to provide a customer with Internet infrastructure for $2,750,000. The project began in 2018 and was completed in 2019. Data relating to the contract are summarized below:
| 2018 | 2019 | |||||
| Costs incurred during the year | $ | 360,000 | $ | 2,155,000 | ||
| Estimated costs to complete as of 12/31 | 1,440,000 | 0 | ||||
| Billings during the year | 500,000 | 1,770,000 | ||||
| Cash collections during the year | 280,000 | 1,825,000 | ||||
Required:
1. Compute the amount of revenue and gross profit
or loss to be recognized in 2018 and 2019 assuming Nortel
recognizes revenue over time according to percentage of
completion.
2. Compute the amount of revenue and gross profit
or loss to be recognized in 2018 and 2019 assuming this project
does not qualify for revenue recognition over time.
3. Prepare a partial balance sheet to show how the
information related to this contract would be presented at the end
of 2018 assuming Nortel recognizes revenue over time according to
percentage of completion.
4. Prepare a partial balance sheet to show how the
information related to this contract would be presented at the end
of 2018 assuming this project does not qualify for revenue
recognition over time.
In: Accounting
The Oklahoma City Zoo has proposed adding to their Web site a major segment providing a virtual tour of the grounds and animals, suitable for both routine enjoyment and educational purposes in class rooms. Survey data indicate that this will have either a neutral or positive effect upon actual zoo attendance. The Web site will be professionally done and have an initial cost of $325,000. Upkeep, refreshing the videos, and developing videos for scientific research and entertainment will cost another $80,000 per year. The zoo is expected to be in operation for an indefinite period; however, a study period of only 10 years for the Web site is to be assumed, with only a residual (salvage) value of $60,000 for the archival value being anticipated. Interest is 10%. An estimated 100,000 persons will visit the e-zoo in the first year, increasing by 30,000 each year, and they will receive, on the average, an additional $0.80 of benefit per visit when the new area is complete. On the basis of B/C analysis, should the Web site be supported for funding?
In: Economics
Listed below are several transactions that took place during the
second and third years of operations for RPG Company.
| Year 2 | Year 3 | |||||
| Amounts billed to customers for services rendered | $ | 290,000 | $ | 390,000 | ||
| Cash collected from credit customers | 200,000 | 340,000 | ||||
| Cash disbursements: | ||||||
| Payment of rent | 74,000 | 0 | ||||
| Salaries paid to employees for services rendered during the year | 134,000 | 154,000 | ||||
| Travel and entertainment | 24,000 | 34,000 | ||||
| Advertising | 12,000 | 29,000 | ||||
In addition, you learn that the company incurred advertising costs
of $19,000 in year 2, owed the advertising agency $4,400 at the end
of year 1, and there were no liabilities at the end of year 3.
Also, there were no anticipated bad debts on receivables, and the
rent payment was for a two-year period, year 2 and year 3.
Required:
1. Calculate accrual net income for both
years.
2. Determine the amount due the advertising agency
that would be shown as a liability on RPG’s balance sheet at the
end of year 2.
In: Accounting
You have two hourly contract employees who work for you. They both make $30 per hour. How much should you budget in labour costs for the year, based on the following assumptions;
| (i) Total working hours in a year (40 hours per week x 52 weeks) |
| (ii) 10 holidays per year (8 hours per day) that you do not pay them for |
| (iii) 10 days vacation per year (8 hours per day) that you do not pay them for |
| (iv) 4 Sick days (8 hours per day) that you do not pay them for |
|
(v) You do not pay them for their 30 min lunch each day |
How many hours will each work this year based on the assumptions above? How much should you budget to spend?
Develop your own personal budget. Include such expenses such as Rent/Mortgage, Utilities, Travel, Tuition, Books, Clothing, Entertainment, Food, Telephone, Misc.
In: Finance
At the beginning of the 2010 school year, Britney Logan decided to prepare a cash budget for the months of September, October, November, and December. The budget must plan for enough cash on December 31 to pay the spring semester tuition, which is the same as the fall tuition. The following information relates to the budget:
Cash balance, September 1 (from a summer job) . . . . . . . . . . . . . . . . . . . . . . . $7,000
Purchase season football tickets in September . . . . . . . . . . . . . . . . . . . . . . . . . 100
Additional entertainment for each month . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 250
Pay fall semester tuition on September 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,800
Pay rent at the beginning of each month . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 350
Pay for food each month . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200
Pay apartment deposit on September 2 (to be returned Dec. 15) . . . . . . . . . . . . 500
Part-time job earnings each month (net of taxes) . . . . . . . . . . . . . . . . . . . . . . . . 900
a. Prepare a cash budget for September, October, November, and December.
b. Are the four monthly budgets that are presented prepared as static budgets or flexible budgets?
c. What are the budget implications for Britney Logan?
In: Accounting
Video Planet ("VP") sells a big screen TV package consisting of a 60-inch plasma TV, a universal remote, and on-site installation by VP staff. The installation includes programming the remote to have the TV interface with other parts of the customer’s home entertainment system. VP concludes that the TV, remote and installation service are separate performance obligations. VP sells the 60-inch TV separately for $1,850 and sells the remote separately for $150, and offers the entire package for $2,100. VP does not sell the installation service separately. VP is aware that other similar vendors charge $200 for the installation service. VP also estimates that it incurs approximately $150 of compensation and other costs for VP staff to provide the installation service. VP typically charges 50% above cost on similar sales.
Required: 1. to 3. Calculate the stand-alone price of the installation service using each of the following approaches.
1. Adjusted market assessment
2. Expected cost plus margin
3. Residual
In: Accounting
16)Chang owed Scott $800 but was unable to pay Scott on the due date. Scott agreed to let Chang pay him the following month. This agreement
A)Is enforceable by chang
b)is binding legally
c)is not binding legally
d)contains adequate consideration by scott
17_Comparative negligence is negligence of the injured party. True of False
18_Altier orally promised his daughter a silver bracelet as a gift. Altier is not legally bound because
a)The consideration was inadequate
b)he never intended to give the gift
c)a promise to make a gift is unenforceable
d)the gift was too expensive
19_Kavik has been declared legally insane by a court. Her purchase of an electric corn popper for $43.95 is
a)void
b)voidable by kavik
c)valid if the price of the corn poper is reasonable
d)valid if the store declares it valid
20_Cigarette lighters, jewelry, and electronic games are classified legally as
a)necessaries
b)adult items
c)luxury items
d)entertainment items
In: Economics
|
On January 1, 2018, Hire Now Corporation, a calendar year, accrual basis C corporation was organized and began business operations. Hire Now provides HR consulting services for businesses. During 2018, it had financial income (per books) before tax of $3,000,000. The following items were expensed in arriving at Hire Now’s 2018 financial income (per books): · $200,000 straight-line financial depreciation; total federal tax depreciation amounted to $900,000. · $30,000 increase to its allowance for doubtful accounts; actual bad debts written off amounted to $9,000. · $20,000 of qualifying meals and entertainment expenses. · $3,000 fine for filing its articles of incorporation late with the Secretary of State. |
|
|
What is Hire Now Corporation’s 2018 federal taxable income and federal income tax liability? Please show your work and explain your calculations. Also, identify any book/tax differences as permanent differences or temporary differences. |
|
In: Accounting
Average Weekly Earnings (2011)
• Mining, oil, and gas $1,737
• Utilities $1,644
• Professional, scientific, technical services $1,213
• Public administration $1,114
• Construction $1,091
• Finance and insurance $1,064
• Manufacturing $982
• Logging and forestry $974
• Education and related services $956
• Transportation and warehousing $919
• Health and social services $809
• Arts, entertainment, and recreation $551
• Retail trade $513
• Accommodation/food/beverage services $357
1. Examine the list of industries and pay rates above. Provide
two possible reasons WHY each
industry has the relative pay level that it does.
Compensating differential
• Seasonal employment
• Cost of living
• Poor working conditions
• Poor industry reputation
2. Based on the concept of “compensating differentials,” develop a
list of job/organizational
characteristics that would make you willing to work for less money.
Then develop a list of
job/organizational characteristics that would cause you to want
more money to accept a
given job.
In: Accounting
Phoenix Company’s 2017 master budget included the following
fixed budget report. It is based on an expected production and
sales volume of 15,000 units.
| PHOENIX COMPANY Fixed Budget Report For Year Ended December 31, 2017 |
|||||
| Sales | $ | 3,150,000 | |||
| Cost of goods sold | |||||
| Direct materials | $ | 960,000 | |||
| Direct labor | 240,000 | ||||
| Machinery repairs (variable cost) | 45,000 | ||||
| Depreciation—Plant equipment (straight-line) | 300,000 | ||||
| Utilities ($45,000 is variable) | 210,000 | ||||
| Plant management salaries | 200,000 | 1,955,000 | |||
| Gross profit | 1,195,000 | ||||
| Selling expenses | |||||
| Packaging | 75,000 | ||||
| Shipping | 105,000 | ||||
| Sales salary (fixed annual amount) | 235,000 | 415,000 | |||
| General and administrative expenses | |||||
| Advertising expense | 150,000 | ||||
| Salaries | 241,000 | ||||
| Entertainment expense | 90,000 | 481,000 | |||
| Income from operations | $ | 299,000 | |||
Required:
1&2. Prepare flexible budgets for the company
at sales volumes of 14,000 and 16,000 units and classify all items
listed in the fixed budget as variable or fixed.
prepare the fied budget report
In: Accounting