A 4-year, 8%, $40,000 notes payable was issued on January 1, Year 1. The maker is required to pay $10,000 plus interest on December 31 of every year for the next four years. What amount, if any, should be reported as a current liability on January 1, Year 2?

A :

zero; the note is a long-term liability

B :

$13,200

C :

$39,600

D :

$10,000

1. The Company just began making boingos at the beginning of Year 1. During Year 1, the company produced 10 boingos and used a total of 20,000 pounds of direct materials and 10,000 direct labor hours (these are both totals, NOT per unit). Each pound of direct material costs $50 and each hour of direct labor costs $30. These 10 units will make up the baseline for your learning curve computations. The class example and the homework problem both had a baseline of only 1 unit, but this problem is different. The management of the company expects a 90% learning curve to be in effect over the first 4 years of producing boingos. The company produced 14 units in Year 2, 16 units in Year 3, and 40 units in Year 4. Compute the total estimated direct labor COST for Year 4.

2. Refer to question 1. Compute the total estimated direct materials COST for Year 4.

Packard Company engaged in the following transactions during Year 1, its first year of operations: (Assume all transactions are cash transactions.)1) Acquired $950 cash from the issue of common stock.2) Borrowed $420 from a bank.3) Earned $650 of revenues.4) Paid expenses of $250.5) Paid a $50 dividend.
During Year 2, Packard engaged in the following transactions: (Assume all transactions are cash transactions.)1) Issued an additional $325 of common stock.2) Repaid $220 of its debt to the bank.3) Earned revenues of $750.4) Incurred expenses of $360.5) Paid dividends of $100.

3.1)        What is Packard Company's net cash flow from financing activities for Year 2?

  
   A)    $320 outflow.    
   B)    $220 outflow.
   C)    $225 inflow.
   D)    $5 inflow.
  

3.2)        What was the balance of Packard's Retained Earnings account before closing in Year 1?

   A)    $0           
   B)    $400
   C)    $350
   D)    $450
  

3.3)        What is the amount of total stockholders’ equity that will be reported on Packard’s balance sheet at the end of Year 1?

   )    $900          
   B)    $1,350
   C)    $1,300
   D)    $250
  

3.4)        What is the after-closing amount of retained earnings that will be reported on Packard’s balance sheet at the end of Year 2?(Assume that closing entries have been

   A)    $800       
   B)    $290
   C)    $740
   D)    $640
  

3.5)        What is the amount of assets that will be reported on Packard’s balance sheet at the end of Year 2?

   A)    $2,115    
   B)    $395
   C)    $2,215
   D)    $440
  

3.6)        What is the net cash inflow from operating activities that will be reported on Packard’s statement of cash flows for Year 1?

            A)    $350       
            B)    $400
            C)    $820
            D)    $650

Lexington Company engaged in the following transactions during Year 1, its first year in operation: (Assume all transactions are cash transactions)Acquired $6,000 cash from issuing common stock.Borrowed $4,400 from a bank.Earned $6,200 of revenues.Incurred $4,800 in expenses.Paid dividends of $800.
Lexington Company engaged in the following transactions during Year 2: (Assume all transactions are cash transactions)Acquired an additional $1,000 cash from the issue of common stock.Repaid $2,600 of its debt to the bank.Earned revenues, $9,000.Incurred expenses of $5,500.Paid dividends of $1,280.

25.1)      What was the net cash flow from financing activities reported on Lexington's statement of cash flows for Year 2?

A)    $1,000 outflow.  
   B)    $2,880 outflow.
   C)    $1,000 inflow.
   D)    $2,880 inflow.
  

25.2)      What is the amount of total assets that will be reported on Lexington's balance sheet at the end of Year 1?

   A)    $12,000  
   B)    $11,000
   C)    $1,600
   D)    $7,600
  

25.3)      What was the amount of retained earnings that will be reported on Lexington's balance sheet at the end of Year 1?

   A)    $6,200    
   B)    $1,400
   C)    $600
   D)    $5,400
  

25.4)      What was the amount of liabilities on Lexington's balance sheet at the end of Year 2?

   A)    $480.      
   B)    $1,800.
   C)    $1,000.
   D)    ($2,600).
  

1. A project costs $10 million today. Next year (year 1) the cash inflow will be either $10 million or $2 million with equal probability. If the year-1 cash inflow was $10 million, then the year-2 cash flow will also be $10 million. If the year-1 cash inflow was $2 million, then the year-2 cash flow will also be $2 million. If the firm can abandon the project ONLY after year 1 for a known amount of $3 million at that time, what is the abandonment value if the appropriate discount rate is 5%?

2. Project 1, that the firm is already doing, currently has an expected NPV of $120,000 and a standard deviation of $200,000. Project 2, that the firm is going to undertake, has an expected NPV of $100,000 and a standard deviation of $150,000. The correlation between these two projects is 0.80. What is the coefficient of variation for the portfolio of projects?

3. You have just agreed to a new loan and have purchased a $3,000 computer today. The loan has a 19.6% annual interest rate, compounded monthly. The minimum monthly payment is $58 and you do not expect to ever pay more than the minimum payment. Assuming no additional charges or costs will occur with this loan, approximately what will you owe on the loan at the end of 3 years (36 months) when you expect to need another new computer?

Canyon Tours showed the following components of working capital last year:

a. What was the change in net working capital during the year? (A negative amount should be indicated by a minus sign.)

b. If sales were $37,800 and costs were $25,800, what was cash flow for the year? Ignore taxes.

A 45 year old woman had a double mastectomy performed a year ago for cancer. Breast augmentation is being considered.

1. How should the nurse answer the patient’s question about the time frame of breast implants?
2. What possible complications of breast augmentation surgery should be considered?

Consider this statement: “Women should rethink their child-rearing options in light of the recent risk factors for breast cancer involving delayed childbearing or the decision not to have children.”

1. What do you think about this statement?
2. How would you respond?

Imagine that while showering one day, you find a lump in your breast.

1. What do you think would be your initial reaction?
2. What would you do first?
3. Why did you choose to do this action first instead of another action?

Whatcom Co. issued a 19-year bond a year ago at a coupon rate of 6 percent. The bond makes semiannual coupon payments. If the YTM on these bonds is 8 percent now, what is the current bond price? (Note: when bond face value is not given, assume the common choice of $1,000 for face value.)

1. Ron Remy enters into a three-year lease to rent his property. In the first year, in addition to $9,600 for the year's rent, he received $1,600 in advance as rent for the last two months of the lease and $800 as a security deposit which he plans to return to the tenant at the end of the lease. What amount must be reported as income by Ron?

2. B received a salary of $27,000 before he retired in October of this year. After he retired, he received Social Security benefits of $3,000 during the year. What amount, if any, of his Social Security benefit is taxable.

3. Art Aubrey owns and operates an apartment building. During 2018, he received the following:

What is Art's gross rental income?

Powell’s fiscal year-end is December 31, and it prepares financial statements just once a year, at year-end. The company has already recorded mostof its transaction and adjusting entries for the year ended December 31, 2018. The resulting trial balance follows:

Omitted Transactions

T1.       Powell purchased equipment on December 31, 2018. The company gave a down payment of $9,500 and signed a 4-year promissory note for the balance due. The note requires Powell to make annual payments of $10,485 with the first payment due on December 31, 2019. The prevailing market rate of interest for comparable notes is 9%.

T2.       On December 31, 2018, Powell engaged in an exchange of buildings with ABC Co. The following information pertains to the building each company owned immediately before the exchange:

In addition, Powell received $13,320 cash from ABC. Assume the exchange of buildings hascommercial substance.

T3.       On the same date (December 31, 2018), Powell engaged in another exchange of buildings, this one with XYZ Co. The following information pertains to the building each company owned immediately before the exchange:

In addition, Powell received $15,525 cash from XYZ. Assume the exchange of buildings lackscommercial substance.

– Instructions –

Prepare the journal entries to record the omitted transactions (T1 through T3).