Leonardo, who is married but files separately, earns $170,000 of taxable income. He also has $22,250 in city of Tulsa bonds. His wife, Theresa, earns $64,500 of taxable income.

If Leonardo earned an additional $90,500 of taxable income this year, what would be the marginal tax rate on the extra income for year 2018? (Use tax rate schedules)

Stein Books Inc. sold 1,900 finance textbooks for $250 each to High Tuition University in 20X1. These books cost $210 to produce. Stein Books spent $12,200 (selling expense) to convince the university to buy its books.

Depreciation expense for the year was $15,200. In addition, Stein Books borrowed $104,000 on January 1, 20X1, on which the company paid 12 percent interest. Both the interest and principal of the loan were paid on December 31, 20X1. The publishing firm's tax rate is 30 percent.

Did Stein Books make a profit in 20X1? Please verify with an income statement.

Apple Inc.

Company analysis: How is your company positioned within its industry? Does it differ in fundamental ways from peer companies (who may or may not also act unethically)?

1. Home Co, a US company making small kitchen appliances, imports plastics from Mexico. Home Co makes an order for next year for plastics, for which it will have to make a payment of MXN150 mn in 1 year. Casa’s finance manager is worried about Mexican Pesos (MXP) because it can be very volatile due to problems in the economy, so he decides to hedge the payable.

He talks to the banks and collects the following information on potential hedging possibilities:

1-year borrowing rate in US$= 3%

1-year deposit rate in US$=1%

1-year borrowing rate in MXN=6%

1-year deposit rate in MXN=4%

Spot rate of MXN= $0.045

1-year forward rate of USMXN=$0.05

Future spot rate of MXN (1-year later)= $0.03 with 70% probability

Future spot rate of MXN (1-year later)=$0.04 with 20% probability

Future spot rate of MXN (1-year later)=$0.05 with 10% probability

Strike price of a 1-year call option = $0.04, premium = $0.005 (per dollar)

Strike price of a 1-year put option = $0.05 , premium= $0.005 (per dollar)

1. By using the relevant information above, calculate the cost of hedging for each of the 3 methods (forward hedge, money market hedge or option hedge) to Casa Co. Which one should the company use, why? (15 points)
2. Would Casa be better off if it did not make the hedge? (5 points)

Suppose your company imports computer motherboards from Singapore. The exchange rate is currently 1.5119 S$/US$. You have just placed an order for 20,000 motherboards at a cost to you of 231.70 Singapore dollars each. You will pay for the shipment when it arrives in 90 days. You can sell the motherboards for $164 each.

Calculate your profit if the exchange rates stay the same over the next 90 days. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Profit            $  

Calculate your profit if the exchange rate rises by 8 percent over the next 90 days. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Profit            $

Calculate your profit if the exchange rate falls by 8 percent over the next 90 days. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Profit            $

What is the break-even exchange rate? (Do not round intermediate calculations and round your answer to 4 decimal places, e.g., 32.1616.)

Break-even exchange rate            S$  /$

What percentage decrease does this represent in terms of the Singapore dollar versus the U.S. dollar? (Enter your answer as a positive value. Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)

Percentage decrease             %

suppose your company imports computer motherboards from singapore. the exchange rate is currently 1.2836S$/US$. you have just placed an order for 24,000 motherboards at a cost to you of 236 singapore dollars each. you will pay for the shipment when it arrives in 90 days. you can sell the motherboards for $195 each. what is your profit at the current exchange rate? what is your profit if the exchange rate goes up by 10 percent over the next 90 days? what is your profit if the exchange rate goes down by 10 percent over the next 90 days? what is the break even exchange rate? what percentage rise or fall does this represent in terms of singapore dollar versus the us dollar?

Suppose your company imports computer motherboards from Singapore. The exchange rate is currently 1.5138 S$/US$. You have just placed an order for 39,000 motherboards at a cost to you of 231.20 Singapore dollars each. You will pay for the shipment when it arrives in 90 days. You can sell the motherboards for $164 each. Calculate your profit if the exchange rates stay the same over the next 90 days. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Profit $ 439530 Calculate your profit if the exchange rate rises by 8 percent over the next 90 days. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Profit $ 880620 Calculate your profit if the exchange rate falls by 8 percent over the next 90 days. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Profit $ What is the break-even exchange rate? (Do not round intermediate calculations and round your answer to 4 decimal places, e.g., 32.1616.) Break-even exchange rate S$ /$ What percentage decrease does this represent in terms of the Singapore dollar versus the U.S. dollar? (Enter your answer as a positive value. Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Percentage decrease %

Aaliyah Turner opened Turner Apple Photography on January 1 of the current year. During January, the following transactions occurred and were recorded in the company's books:

1. Aaliyah invested $14,100 cash in the business in exchange for common stock.
2. Aaliyah contributed $26,000 of photography equipment to the business in exchange for common stock.
3. The company paid $2,700 cash for an insurance policy covering the next 24 months.
4. The company received $6,300 cash for services provided during January.
5. The company purchased $6,800 of office equipment on credit.
6. The company provided $3,350 of services to customers on account.
7. The company paid cash of $2,100 for monthly rent.
8. The company paid $3,700 on the office equipment purchased in transaction #5 above.
9. Paid $335 cash for January utilities.

Based on this information, the amount of total stockholders’ equity reported on the Balance Sheet at the end of the month would be:

Multiple Choice

• $39,800.

• $38,350.

• $36,815.

• $47,315.

• $46,400.\

Larry Bar opened a frame shop and completed these transactions:

1. Larry started the shop by investing $41,100 cash and equipment valued at $19,100 in exchange for common stock.
2. Purchased $180 of office supplies on credit.
3. Paid $2,300 cash for the receptionist's salary.
4. Sold a custom frame service and collected $5,600 cash on the sale.
5. Completed framing services and billed the client $310.

What was the balance of the cash account after these transactions were posted?

Multiple Choice

• $11,020.

• $44,710.

• $44,530.

• $11,330.

• $44,400.

At the beginning of January of the current year, Little Mikey's Catering ledger reflected a normal balance of $63,000 for accounts receivable. During January, the company collected $17,000 from customers on account and provided additional services to customers on account totaling $13,600. Additionally, during January one customer paid Mikey $6,100 for services to be provided in the future. At the end of January, the balance in the accounts receivable account should be:

Multiple Choice

• $60,300.

• $66,400.

• $59,600.

• $3,400.

• $65,700.

On December 1, Orenthal Marketing Company received $3,600 from a customer for a 2-month marketing plan to be completed January 31 of the following year. The cash receipt was recorded as unearned fees. The adjusting entry for the year ended December 31 would include:

Multiple Choice

• a credit to Earned Fees for $2,400.

• a debit to Unearned Fees for $1,800.

• a debit to Earned Fees for $3,600.

• a credit to Unearned Fees for $1,200.

• a debit to Earned Fees for $2,400.

4. Describe at least two differences in disclosure provided in the footnotes of the competitors under IFRS and US GAAP. Example: – The Property, Plant and Equipment footnote is much more detailed for Company X in IFRS than for Company Y using US GAAP. For each PP&E component, it reconciles the differences beginning and ending net book values including additions, disposals, currency translation effects, depreciation and impairments. Company Y lists the PP&E components only.