The Brick Company had cash sales of $227,900 for Year 1, its first year of operation. On April 2, the company purchased 214 units of inventory at $225 per unit. On September 1, an additional 161 units were purchased for $248 per unit. The company had 66 units on hand at the end of the year. The company’s income tax rate is 40 percent. All transactions are cash transactions.
a. The preceding paragraph describes five accounting events: (1) a sales transaction, (2) the first purchase of inventory, (3) a second purchase of inventory, (4) the recognition of cost of goods sold expense, and (5) the payment of income tax expense. Show the amounts of each event in horizontal statements models like the following ones, assuming first a FIFO and then a LIFO cost flow.
b. Compute net income using FIFO.
c. Compute net income using LIFO.
e. Which method, FIFO or LIFO, produced the larger amount of assets on the balance sheet

Colsen Communications is trying to estimate the first-year net operating cash flow (at Year 1) for a proposed project. The financial staff has collected the following information on the project:

The company has a 40% tax rate, and its WACC is 13%.

Write out your answers completely. For example, 13 million should be entered as 13,000,000.

1. What is the project's operating cash flow for the first year (t = 1)? Round your answer to the nearest dollar.

b.If this project would cannibalize other projects by $1.5 million of cash flow before taxes per year, how would this change your answer to part a? Round your answer to the nearest dollar.
The firm's OCF would now be $

1. Tax disclosures and strategies: Examine the income tax expense and deferred tax assets and liabilities.

a)      Determine the amount of tax expense on the income statement and distinguish between current and deferred portions.

b)      Assess the company’s effective tax rate, is it consistent? If not, do the fluctuations seem reasonable?

c)      Do the deferred tax assets and liabilities seem appropriate given the company’s industry?

d)      Is there a valuation allowance? How big is it relative to total deferred tax assets? Has the valuation allowance changed markedly during the year? This might indicate income shifting.

A partial amortization schedule for a 10-year note payable issued on January 1, Year 1, is shown next:

Required
a. Using a financial statements model like the one shown next, record the appropriate amounts for the following two events:

1. (1) January 1, Year 1, issue of the note payable.
2. (2) December 31, Year 1, payment on the note payable.

b. If the company earned $96,000 cash revenue and paid $62,000 in cash expenses in addition to the interest in Year 1, what is the amount of each of the following?

1. (1) Net income for Year 1.
2. (2) Cash flow from operating activities for Year 1.
3. (3) Cash flow from financing activities for Year 1.

c. What is the amount of interest expense on this loan for Year 4?

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

• Required A
• Required B1
• Required B2
• Required B3
• Required C

Using a financial statements model like the one shown next, record the appropriate amounts for the following two events: (1) January 1, Year 1, issue of the note payable. (2) December 31, Year 1, payment on the note payable. (In the Statement of Cash Flows column, use the initials OA to designate operating activity, IA for investing activity, FA for financing activity and NA to indicate the element is not affected by the event. Enter any decreases to account balances with a minus sign.)

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1.    New Madrid Corporation has sales of $2,000,000 in its first year of business. Over this year variable costs of goods sold were 20% of sales. Fixed cost of goods sold were $200,000. Selling and administrative cost were $400,000 and taxes were 30% of pretax income. Please calculate New Madrid Corporation’s after-tax income.

2.    Please start with the data in the prior problem concerning New Madrid Corporation. In projecting the proforma second years income statement for New Madrid, assume that sales increase by 20% in the second year of operation, variable costs of goods sold stay at 20% of sales, fixed cost of sales increase by 10% over the second year, selling and administrative cost increase by 5% and taxes remain at 30% of pretax profit. Please calculate New Madrid Corporation’s projected after-tax income for the second year of operation.

3.    Caruthersville Corporation begins the year with $800,000 in plant property and equipment. This equipment is depreciated by $40,000 over the coming year. Over this same year, Caruthersville purchases additional equipment worth $70,000. What is the ending balance of the plant property and equipment account at the end of the year?

4.    Hamon Corporation is projecting its balance sheet and it arrives at the following numbers for the coming years. At the end of year one, total assets equal $8,000,000 while total liabilities and equity equal $9,500,000. At the end of year two, total assets equal $11,000,000 and total liabilities and equity equals 10,000,000. How much money will Hamon need to borrow money or have left over in years one and two?

Mr. Lew is entitled to a $5,200 bonus this year (year 0). His employer gives him two options. He can either receive his $5,200 bonus in cash, or the employer will credit him with $4,500 deferred compensation. Under the deferral option, the employer will accrue 6 percent annual interest on the deferred compensation. Consequently, the employer will pay $8,059 ($4,500 plus compounded interest) to Mr. Lew when he retires in year 10. Which option has the greater NPV under each of the following assumptions?

a. Mr. Lew's current marginal tax rate is 28 percent, and his marginal tax rate at retirement will be 15 percent.

b. Mr. RS’s current marginal tax rate is 28 percent, and his marginal tax rate at retirement will be 28 percent.

In making calculations, use a 5 percent discount rate. Please show computation

What’s the present value of a perpetuity that pays $1,000 per year beginning 1 year from now, if the appropriate interest rate is 5%? What would the value be if payments on the annuity began immediately? ($20,000, $21,000. Hint: Just add the $1,000 to be received immediately to the value of the annuity.)

Jake is hoping to be promoted to head pharmacist and make $120,000/year starting next year. He thinks he has a 60% chance of being promoted. His current salary is $70,000/year. If he is not promoted, he will earn his current salary next year.

What is his mean salary for next year?

What is the variance of his salary for next year?

What is the standard deviation of his salary for next year?

consider a financial asset that pays a perpetuity of $600 per year, starting one year from now. The discount rate is 9%. If the required investment today is $4000, what is the net present value of the investment

A claim is received from Sharon Turner, a 56-year-old woman with a 30-year history as a cashier. The paperwork provided to you, is inclusive of a Notice of Disability and a Claim for Compensation, and Sharon states she has hurt her back at work but does not know how. There has also been some disciplinary action taken against Sharon in the last two weeks and the employer wants the claim investigated. The form was signed by the worker seven days ago.

1

What relevant policies, procedures and/or legislation dictate how this claim should be managed? (40–60 words)

2.What should the agent do when processing this claim? (250–300 words)