At the beginning of the year, Miranda began a calendar-year business and placed in service the following assets during the year:

Assuming Miranda elects out of bonus depreciation and does not elect §179 expensing , answer the following questions: (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.) (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.)

b. What is Miranda’s year 2 cost recovery for each asset?

The comparative balance sheet for Astro Company for the current year and the preceding year are presented below:

Current Preceding

Year Year

Assets

Cash---------------------------------------- $ 52,100 $ 42,500

Accounts receivable (net)-------------------    91,350    61,150

Inventories--------------------------------- 104,500 109,500

Prepaid expenses--------------------------------      3,600      2,700

Land---------------------------------------    50,000    50,000     

Equipment---------------------------------- 580,000 500,000

Accumulated depreciation------------------- (212,600) (175,400)

Patents--------------------------------------    35,000    40,000

Total Assets            $703,950            $630,450

======= =======

Liabilities and Stockholder’s Equity

Accounts payable-------------------------- $ 61,150 $ 75,000

Dividends payable-------------------------    12,000    10,000

Salaries payable----------------------------      6,650      7,550

Mortgage note payable, due 20x9----------    50,000        0

Bonds payable-----------------------------        0   75,000

Common stock, $20 par------------------- 300,000 250,000

Premium on common stock----------------- 100,000    75,000

Retained earnings--------------------------- 174,150 137,900

Total Liabilities and Stockholder’s Equity  $703,950            $630,450

====== =======

An examination of the income statement and the accounting records revealed the following additional information applicable to the current year:

1. Net income, $96,250.
2. Depreciation expense reported on the income statement $37,200.
3. Patent amortization reported on the income statement $5,000.
4. A mortgage note for $50,000 was issued for cash.
5. Equipment was purchased for $80,000 cash.
6. 2,500 shares of common stock were issued at a premium for $30 per share cash.
7. Bonds payable were retired for cash.
8. Cash dividends declared, $60,000

Continued next page:

REQUIRED: Using the form provided below, prepare a statement of cash flow using the indirect method.

Present your answers in the exact same format as below describing each section and sub-section.

Cash Flows From Operating Activities:

Net Income(Loss)

Items Affecting Net Income But Not Cash:

Add:

Add:

Add:

Deduct:

Current Assets & Current Liabilities:

Add: Increase in

Add: Increase in

Add: Decrease in

Add: Decrease in

Deduct: Increase in

Deduct: Increase in

Deduct: Decrease in

Deduct: Decrease in__________________________               

Net Cash______(Flow or Used)From Operating Activities-----------------

Cash Flows From Investing Activities:

Add: Sale of

Add: Sale of

Deduct: Purchase of

Deduct: _Purchase of_______________________________________________

Net Cash_________(Flow or Used) From Investing Activities-----------------------------

Cash Flows from Financing Activities:

Add: Issuance of

Add: Issuance of

Add: Issuance of

Deduct: Retirement of

Deduct: Payment of

Deduct:_Payment of_______________________________________

Net Cash_________(Flow or Used) From Financing Activities-----------------------------

Net Increase (Decrease) In Cash______________

An investment pays $20,000 at the end of year 2, $30,000 at the end of year 4 and $X at the end of year 8. At an annual effective rate of 8.5%, the modified duration of this cash flow is 5.51704. Calculate X (round your answer to integer).

Show all works, and please show ur work it with math steps and illustrations instead of excel tables!! Thank you! I will thumb up if it's correct!

Year one is the first year of business renting apartments to students at the edge of USC's main campus. At the end of the year maintenance personnel had earned $400 for which they were never paid. Also at the end of year one, tenants had rented out several of the apartments but never paid the $800 rent. In year two maintenance personnel earned another $500 of wages and still did not get paid. New students moved in but never paid their $1,200 in total rent for the year. At the end of year two, no rent was ever collected nor were any wages paid since the business began. Requirement: Record the adjusting entries (if any) for each year to account for the described events. Do the year end closing entries for each of the two years. Post to the ledger for each year. Indicate with year numbers all transactions on the T accounts. Label each T account according to the proper account classification in parenthesis (ie. Asset, liability, revenue, etc.) Label adjusting journal entries (adj) and closing journal entries (cls). Required: Produce the Income statement for each year. Why do we do adjusting entries (think of how the income statement and balance sheet are off if we do not do adjusting entries)? What does this problem teach you about revenue and expense recognition relative to cash disbursement and cash receipt? What happens to your balance sheet accounts versus your income statement accounts each year?

If the price index was 90 in year 1, 100 in year 2, and 95 in year 3, then the economy experienced

The domestic airfare for business travel for the current year and the previous year was reported. A sample of 12 flights with their domestic airfares shown for both years is contained in the Excel Online file below. Construct a spreadsheet to answer the following questions.

a. Formulate the hypotheses and test for a significant increase in the mean domestic airfare for business travel for the one-year period.

_________<>≤≥=≠
_________<>≤≥=≠

What are the -value, degrees of freedom, and -value

Using a .05 level of significance, what is your conclusion?

We _________can concludecannot conclude that there has been a significance increase in business travel airfares over the one-year period.

b. What is the sample mean domestic airfare for business travel for each year?

c. What is the percentage change in the airfare for the one-year period?

% (to 2 decimals)

Compute the duration of a bond that pays $100 in year 1 and $5 in year 2. The term-structure of interest rates is flat at 10%. It means r1 = r2 = 10%

The yield on a one year bond is 3%. The expected yield on a one year bond, one year in the future is 4%. The expected yield on a one year bond in 2 years is 5%. The liquidity premium 0.5(n-1)%. The "3-2" spread is _____ .

1. -.5%
2. -1%
3. 0%
4. 0.5%
5. 1%

The yield on a one year bond is 3%. The expected yield for the one year bond a year later is 4%. The expected yield for the one year bond in 2 years is 5%. According to the expectations hypothesis, the yield on a three year bond should be _____.

a.3%

b.4%

c.5%

d.None of the above

An equipment manufacturer is in the third year of a 6 year contract for ABCD corporation. The contract calls for annual production of 30,000 units at a selling price of $45 per unit. Variable costs are $25 per unit and direct fixed costs are $100,000 per year. A new customer (XYZ corporation) approaches you and asks you to produce on a one time basis (i.e. no follow up contract) 60,000 units of the same equipment at a selling price of $35. There are no incremental direct fixed costs. (a) What is the net segment income of the ABCD contract per year and over the 6 year life of the contract? (b) What is the net segment income of the XYZ contract? (c) If the contract with ABCD calls for you to reduce your selling price for the rest of the 6 year contract to that of XYZ, what is the real value of the XYZ contract?

Inventory balances at the beginning and end of the year were as follows: Beginning of Year End of Year Raw materials $ 54,000 $ 34,000 Work in process ? $ 31,000 Finished goods $ 37,000 ? The total manufacturing costs for the year were $680,000; the cost of goods available for sale totaled $730,000; the unadjusted cost of goods sold totaled $662,000; and the net operating income was $30,000. The company’s underapplied or overapplied overhead is closed to Cost of Goods Sold. Required: Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement. (Hint: Prepare the income statement and schedule of cost of goods sold first followed by the schedule of cost of goods manufactured.)