An All-Pro offensive lineman is in contract negotiations. The team has offered the following salary structure (note: today is Year=0). The appropriate discount rate is 12% per year, compounded monthly.

a) The lineman wants the timing of the payments modified. (He is happy with the overall value of the contract – so no increase in overall value, measured in PV terms -- is needed.)

Instead of the initial terms offered, he would like to receive a $3,000,000 signing bonus, today. In addition, he wants the remaining overall value of the contract paid out in equal quarterly installments (beginning one quarter from today) over the next four years (last payment at t=4. So, there are 16 quarterly payments). What payment amount should he receive each quarter (for the next four years)?

b) The lineman has changed his mind. He now wants the overall value of the contract increased by $2,000,000. In addition, he wants to receive quarterly payments (over the next four years) that grow by 2% each quarter. If the first quarterly payment is received one quarter from today and the last is received at t=4, what amount should he receive in the first quarterly payment (received 3 months from today)?​

Please fully answer the question and show your work. Also, provide the formulas used to solve this problem.

1. On December 31, 2019, the balance sheet for Chowdhury Inc., includes the liabilities listed below:
   1. 11% callable bonds (call price 101) with a face amount of $40 million were issued for $40 million on October 31, 2010. The bonds mature on October 31, 2030, at a redemption price of $40 million. Market conditions are such that the call is not expected to be exercised.
   2. Management intended to refinance $6 million of its 10% notes that mature in May 2020. In early March, prior to the actual issuance of the 2019 financial statements, Chowdhury Inc., negotiated a line of credit with a commercial bank for up to $5 million any time during 2020. Any borrowings will mature two years from the date of borrowing.
   3. Noncallable 12% bonds with a face amount of $20 million were issued for $20 million on September 30, 2000. The bonds mature on September 30, 2020. Sufficient cash is expected to be available to retire the bonds at maturity.
   4. A $12 million 9% bank loan is payable on October 31, 2025. The bank has the right to demand payment after any fiscal year-end in which Chowdhury’s ratio of current assets to current liabilities falls below a contractual minimum of 1.7 to 1 and remains so for six months. That ratio was 1.45 on December 31, 2019, due primarily to an intentional temporary decline in inventory levels. Normal inventory levels will be reestablished during the first quarter of 2020.

Required:

1. For items a – d determine the amount that can be reported as a current liability and as a noncurrent liability. Explain the reasoning behind your classifications.
2. Prepare the liability section of a classified balance sheet and any necessary note disclosure for Chowdhury at December 31, 2019. Accounts payable and accruals are $32 million.

Accounting Major

The data in the enclosed spreadsheet comes from the Texas Higher Education Coordinating Board and the Texas Department of Labor. It represents the total wages earned by major, during the 4^th quarter after graduation. http://www.txhighereddata.org/reports/performance/ctcasalf/gainful.cfm

What was the mean 4^th quarter wages for 2016 grads in your major:_____________

What was the median 4^th quarter wages for 2016 grads in your major:_____________

What percent of 2016 graduates in your major were employed in the 4^th quarter?_______

What are some limitations to the THECB wage report that might impact interpretation of wage data? Should you use the mean or median to provide the best estimate of annual wages for graduates in this major? Explain your answer:

Based on #4, calculate an estimation of annual wage for this major, one year out from graduation:_______________________

Go to O-NET (https://www.onetonline.org/). This site is run by the US Department of Labor. The Department of Labor uses actual wage date to create an overview of expected wages and job availability. Search for an occupation related to your major under “Occupation Quick Search”.

Occupation Researched:__________________

What are related occupations:___________________________________________

Percentage of respondents working in field with a Bachelor’s degree:_____________

Percentage of respondents working in field with a Master’s degree:_____________

What is the median wage in 2017 (nationally)_________________

What is the median wage in 2017 (Texas only) ___________________

What is the projected job growth (2016-2026) nationally for occupation?___________________

What is the projected job growth (2016-2026) in Texas for this occupation? _______________

One the State Wage Data tab, select the “Employment Concentration Tab”. Where are people in this occupation most concentrated?________________

How does the median annual wage in Texas compare to the THECB wage calculated in #5?

What factors might account for the differences in wages between the O-NET Texas data and the THECB data?

Based on these data, what is your best estimate of your wages the first year after graduation? Justify your answer:

How has this research affirmed or changed your career plans?

Lopez Company paid wages of $178,200 this year. Of this amount, $107,500 was taxable for net FUTA and SUTA purposes. The state's contribution tax rate is 3.1% for lopez Company. Due to cash flow problems, the company did not make any SUTA payments until after the Form 940 filing date. Compute the following; round your answers to the nearest cent.

a. Amount of credit the company would receive against the FUTA tax for its SUTA contributions
$

b. Amount that lopez Company would pay to the federal government for its FUTA tax
$

c. Amount that the company lost because of its late payments
$

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During 2017, lopez worked for two different employers. Until May, he worked for M Construction Company in, Iowa, and earned $21,210. The state unemployment rate for lopez is 4.6%. He then changed jobs and worked for Hugh Improvement Company in kansas, and earned $28,200 for the rest of the year. The state unemployment rate for Ford is 5.1%. Determine the unemployment taxes (FUTA and SUTA) that would be paid by each company. Round your answers to the nearest cent.

Use Figure 5.1 to determine SUTA caps in Iowa and Kansas

The marketing manager has recently completed a sales forecast. She believes the company’s sales will increase by 1 percent each month over the previous month’s sales from December 2015 through March 2016. Then sales are expected to remain constant for several months. Helping Hand’s projected balance sheet as of December 31, 2015 is as follows: Cash $ 60,000 Accounts receivable 172,530 Marketable securities 10,000 Inventory 39,784 Buildings and equipment (net of accumulated depreciation) 600,000 Total assets $ 882,314 Accounts payable $ 111,940 Sales commissions payable 4,040 Bond interest payable 8,000 Property taxes payable 0 Bonds payable (4%; due in 2020) 600,000 Common stock 100,000 Retained earnings 58,334 Total liabilities and stockholders' equity $ 882,314 The following information has been accumulated to assist with preparing the master budget for the first quarter of 2016: 1) Projected sales for November 2015 are $200,000. Credit sales are typically 90% of total sales.

5).Helping Hand’s credit experience indicates that 13% of credit sales are collected during the month of sale, 75% in the month following the sale, and 10% in the second month following the sale. Experience shows the remaining credit sales are uncollectible. 2 Helping Hand’s board of directors has indicated an intention to declare and pay dividends of $150,000 on the last day of each quarter. 6) The interest on any short-term borrowing will be paid when the loan is repaid. Interest on Helping Hand’s bonds is paid semiannually on February 28 and August 31 for the preceding sixmonth period. 7) Property taxes are paid quarterly on March 31, June 30, September 30, and December 31 for the preceding three-month period. Required: Build a model to forecast Helping Hand Corp’s cash balance at March 31, 2016. Your model must contain the following master budget schedules. Round all amounts to the nearest dollar. Your model should allow you to change any of the assumptions provided above and easily recalculate the ending cash balance at March 31, 2016. The assumptions may be on a separate worksheet but all of the schedules below must be on one worksheet. 1) Sales budget: 2015 2016 November December January February March 1st Quarter Total sales Cash sales Sales on account 2) Cash receipts budget: 2016 January February March 1st Quarter Cash sales Cash collections from credit sales made during current month Cash collections from credit sales made during preceding month Cash collections from credit sales made during 2nd preceding month Total cash receipts 3) Purchases budget: 2015 2016 December January February March 1st Quarter Budgeted cost of goods sold Add: Desired ending inventory Total goods needed Less: Expected beginning inventory Purchases 4) Cash disbursements budget: 2016 January February March 1st Quarter Inventory purchases: Cash payments for purchases during the current month Cash payments for purchases during the preceding month Total cash payments for inventory purchases Other expenses: Sales salaries Advertising and promotion Administrative salaries Interest on bonds Property taxes Sales commissions Total cash payments for other expenses Total cash disbursements

Section 1:

Identify and explain a product that you will manufacture.

Calculate the cost to manufacture this product on a per unit basis considering the cost factors of material, labour and manufacturing overhead. This calculation will form the basis of the cost of goods sold.

Determine the expected selling price of this product based on market research or based on a required gross profit.

Determine the amount of operating expenses, and selling and administrative expenses that will be required each month to operate the business. (These expenses could all be considered cash basis).

Section 2:

Based on the information developed in Section 1 prepare a Sales Budget differentiating between cash and credit sales for each month of operations starting in January, the first month of operation, to the end of the first quarter ended March 31, 2016. You should state the collection period for the credit sales. (Usually net 30 days)

Based on the forecasted sales budget, prepare an Inventory Purchases Budget for each monthly period and set a target for the ending inventory at each month end. You should state the payment period that is expected. Prepare a Cash Budget for each month based on the Sales and Inventory Budgets and the estimated operating expenses each month.

Problem 8-30 Integration of the Sales, Production, and Direct Materials Budgets [LO8-2, LO8-3, LO8-4]

Milo Company manufactures beach umbrellas. The company is preparing detailed budgets for the third quarter and has assembled the following information to assist in the budget preparation:

1. The Marketing Department has estimated sales as follows for the remainder of the year (in units):

The selling price of the beach umbrellas is $11 per unit.

2. All sales are on account. Based on past experience, sales are collected in the following pattern:

Sales for June totaled $363,000.

3. The company maintains finished goods inventories equal to 15% of the following month’s sales. This requirement will be met at the end of June.

4. Each beach umbrella requires 4 feet of Gilden, a material that is sometimes hard to acquire. Therefore, the company requires that the ending inventory of Gilden be equal to 50% of the following month’s production needs. The inventory of Gilden on hand at the beginning and end of the quarter will be:

5. Gilden costs $0.80 per foot. One-half of a month’s purchases of Gilden is paid for in the month of purchase; the remainder is paid for in the following month. The accounts payable on July 1 for purchases of Gilden during June will be $62,120.

Required:

1. Calculate the estimated sales, by month and in total, for the third quarter.

2. Calculate the expected cash collections, by month and in total, for the third quarter.

3. Calculate the estimated quantity of beach umbrellas that need to be produced in July, August, September, and October.

4. Calculate the quantity of Gilden (in feet) that needs to be purchased by month and in total, for the third quarter.

5. Calculate the cost of the raw material (Gilden) purchases by month and in total, for the third quarter.

6. Calculate the expected cash disbursements for raw material (Gilden) purchases, by month and in total, for the third quarter.

Rayyan Builder Berhad manufactures specialist insulating products that are used in both residential and commercial buildings. One of the products, Product W, is made using two different raw materials and two types of labor. The company operates a standard absorption costing system and is now preparing its budgets for the next six quarters. The following information has been identified for Product W:

Inventory policy:
Closing inventory of finished goods - 30 percent of the following quarter’s sales demand.
Closing inventory of materials - 45 percent of the following quarter’s materials usage.

The management team is concerned that Rayyan Builder has recently faced increasing competition in the marketplace for Product W. As a consequence, there have been issues concerning the availability and costs of the specialized materials and employees needed to manufacture Product W, and there is concern that these might cause problems in the current budget setting process.

Required:
Prepare the following budgets for each quarter for Rayyan Builder Berhad:
a) Sales budget.
b) Production budget in units.
c) Raw material purchases budget in kgs and value for Material A.
d) Raw material purchases budget in kgs and value for Material B.
e) Direct labor budget for skilled labor in hours and RM.
f) Direct labor budget for semi-skilled labor in hours and RM.

Problem 8-30 Integration of the Sales, Production, and Direct Materials Budgets [LO8-2, LO8-3, LO8-4]

Milo Company manufactures beach umbrellas. The company is preparing detailed budgets for the third quarter and has assembled the following information to assist in the budget preparation:

The Marketing Department has estimated sales as follows for the remainder of the year (in units):

The selling price of the beach umbrellas is $10 per unit.

All sales are on account. Based on past experience, sales are collected in the following pattern:

Sales for June totaled $440,000.

The company maintains finished goods inventories equal to 15% of the following month’s sales. This requirement will be met at the end of June.

Each beach umbrella requires 4 feet of Gilden, a material that is sometimes hard to acquire. Therefore, the company requires that the ending inventory of Gilden be equal to 50% of the following month’s production needs. The inventory of Gilden on hand at the beginning and end of the quarter will be:

Gilden costs $0.40 per foot. One-half of a month’s purchases of Gilden is paid for in the month of purchase; the remainder is paid for in the following month. The accounts payable on July 1 for purchases of Gilden during June will be $37,660.

Required:

1. Calculate the estimated sales, by month and in total, for the third quarter.

2. Calculate the expected cash collections, by month and in total, for the third quarter.

3. Calculate the estimated quantity of beach umbrellas that need to be produced in July, August, September, and October.

4. Calculate the quantity of Gilden (in feet) that needs to be purchased by month and in total, for the third quarter.

5. Calculate the cost of the raw material (Gilden) purchases by month and in total, for the third quarter.

6. Calculate the expected cash disbursements for raw material (Gilden) purchases, by month and in total, for the third quarter.