On October 1st American Company purchased this 1,000,000 peso CD when the peso was worth 10 cents

This 2 year CD pays interest at 12% with interest paid each April 1st and October 1st

American Company purchased this 1,000,000 peso CD when the peso was worth 10 cents

On December 31st The peso was worth 8 cents

On April 1st 2020 the peso was worth 9 cents

On October 1st 2020 the peso was worth 11 cents

On December 1st 2020 the peso was worth 10 cents

On April 1st 2021 the peso was worth 8 cents

On October 1st 2021 the peso was worth 9 cents

REQUIRED: MAKE ALL THE JOURNAL ENTRIES AMERICAN MAKES IN CONNECTION WITH THIS CD

DON'T FORGET THE INITIAL PURCHASE OF THE CD AND THE NECESSARY ADJUSTING ENTRIES AT YEAR END

Balls ‘n Bats is a $24 million company with 1 president and 10 sales reps
in these two territories: Northern U.S. ($16 million in sales, 7 reps),
Southern U.S. ($8 million in sales, 3 reps).
The company sells two different products (and each rep sells both):
-Balls ($18 million in sales) and
-Bats ($6 million in sales).

And you can assume that the following list contains
information on all costs for this company:
                Each rep is paid a straight salary of $60,000
                The company president is paid a salary of $200,000
                They recently ran a national TV ad for balls, which cost $300,000;

And then separately they ran a national TV ad for bats, which cost $100,000
Cost of goods sold is exactly 75% of sales

Based on a full cost analysis that allocates indirect costs using % of sales, how much of the company profit is generated by the Southern US territory? Enter dollar amount.

1. Calculate the weighted average cost of capital for a company given the following information:

Risk-free rate in the U.S.: 4%

Expected return on the U.S. market portfolio: 14%

Company’s risk relative to the market risk: 0.9

The company has 2-year, 12% bonds (paid semi-annually), face value of $1,000, selling for $1095.73.

The company’s marginal tax rate: 35%

The company finances 38% of its capital by debt and 62% by common equity.

2. Calculate the weighted average cost of capital for a company given the following information:

Price of the company’s common stock: $30.04

Dividend just been paid: $2.6

Expected perpetual constant growth rate: 4%

The company can borrow from its bank at 9% per year

The company’s marginal tax rate: 35%

The market value of the company’s assets is $160 million financed by $54.40 million in debt and the rest in equity

Over the past decade, many American candy companies, including Hershey Company, Brach’s Confections, and Ferrara Pan Candy, opened factories in Mexico and Canada to produce candy that is then shipped back to the United States for sale. Although lower wages in Mexico might explain part of this move, wages in Canada are comparable to U.S. wages.

Explain how U.S. price supports (price floors) for the sugar industry may have encouraged these moves.

The sugar industry is the longest protected in U.S. history. Many economists and industry experts argue that these protectionist policies hurt consumers and are no longer needed.

Do you agree? Why or why not? Use the concepts of supply and demand, and consumer and producer surplus to support your answer.

Explain why the U.S. sugar industry have experienced such long protectionist policies such as import quotas and subsidies?

Question 1. Impact on the Accounting Equation and Journal Entries Following are events related to Dinky Donky Limited (the “Company”) for the current month (that is May). Assume all transactions relate to this month

. Determine the impact on the accounting equation of the following transactions, and write the relevant journal entry for each:

1) The owner of the company placed $250,000 into the company at the start of the month by way of half in cash and the rest in transfer of two vehicles of equal value.

2) The company bought an apartment building from Diamond Limited worth $20,000,000 by issuing $5,000,000 of bond debt, taking out a bank loan of $8,000,000 and remainder by issuing shares.

3) The company received the gas bill at the end of the month amounting to $80,000. The company has 3 months to pay.

4) At the end of this month the wages had yet to be paid. On last day of month, the company paid half of monthly wage in cash and said they would pay the balance in two weeks. Monthly wages are $600,000.

5) The company paid the outstanding electricity bill for last month. The bill was received by the company 14 days ago and recorded then. The value of the bill was $85,000.

6) The company paid $100,000 in cash for administrative supplies required during the month. All supplies will be used in the month.

7) The company recognized that $500,000 of its long-term debt is actually due to be paid in next 3 months.

8) The company sold inventory to a customer. The customer paid $560,000 by paying 75% in cash and the rest by credit. The inventory originally cost the company $320,000.

9) The company purchased inventory valued at $400,000. Half of the inventory was paid in cash, and the remainder was acquired on credit.

10) The company bought a new factory paying $300,000 in cash and transferring a block of land valued at $500,000 to the old owner of the factory.

11) The company paid a dividend of $200,000 at the end of the month to the owner of the company.

12) The owner of the company paid $40,000 for his family to attend the Champion’s League Final (May 31, 2020) between Barcelona and Liverpool that Liverpool won 25 – 0. The owner used his wife’s credit card to make the purchase. Required:

Analyse how each transaction above impacts the accounting equation. Each transaction is to be treated independently. Then, record the journal entries for the transactions noted above.

Conflict Case

You are employed by a Fortune 500 company, based in Austin, working in their HR department. The company makes toys. Your specific role is to aid managers who are having difficulties. The CEO of the company has told one of the supervisors to come see you, because there is an issue with his department.

James comes to you because many of his employees have transferred out of the division or quit. When you ask James if anything has changed in his division to cause this, James tells you that he is not sure of the cause. If anything, he thinks his employees should be even more satisfied than before. James tells you that last month he decided to implement a new pay system for all his teams and also the team leaders. He decided that the workers in the teams would get 80% of their base pay from the year before, but would get a bonus for every 1000 toys they made beyond what they produced last year. By his calculations, if his division produces the same number of toys as last year, the bonuses will put the teams at 100% of their pay. If they produce fewer toys, they will make less money--but if they produce more, they will make more. In order to keep teams from competing against each other, the bonuses will be paid out according to how well the entire division does, not on how each individual team does. James decided to do this on a Monday and had it implemented on that Tuesday, with a memo sent out explaining the change.

So far as the team leaders are concerned, James decided to give them 80% of their pay but, instead of more money, the team leader bonuses would consist of company-paid trips to Europe. James thought that this was a great idea, as everyone likes to go on trips. Furthermore, the trips are actually worth more than the team leaders would be able to make if they were just being paid cash, even if the division suddenly became the top producer in the company. So they are worth more than the money they would get, but the system still saves the company money because the company owns a travel agency, meaning that they are able to get the trips at a huge discount. This new policy is the only change that James can think of that might have affected the teams in his division.

Both James and the CEO are looking to you for answers. And once again, the CEO wants a memo about the situation, and what you are going to do about it in the next two hours.*

*Note: As the CEO wants the information in 2 hours (although, obviously, you have until the assignment is due to turn in your memo), you are not expected to do any sort of advanced research. No citations are needed. Furthermore, as you are given no further information about the situation, your “plan” will be viewed in such a light.

You are to write a 1+ page, formal memo (the text needs to go onto the second page, even if it is a single word) addressing this situation. The memo should be single spaced, with a full space between paragraphs (like this document).

**There is no additional reading for this case.

Upper Division of Lower Company acquired an asset with a cost of $560,000 and a four-year life. The cash flows from the asset, considering the effects of inflation, were scheduled as follows.

The cost of the asset is expected to increase at a rate of 20 percent per year, compounded each year. Performance measures are based on beginning-of-year gross book values for the investment base. Ignore taxes.

Required:

a. What is the ROI for each year of the asset's life, using a historical cost approach?

b. What is the ROI for each year of the asset's life if both the investment base and depreciation are determined by the current cost of the asset at the start of each year?

Assume that a parent company acquired 80% of a subsidiary on January 1, 2014. The purchase price was $175,000 in excess of the subsidiary’s book value of Stockholders’ Equity on the acquisition date, and that excess was assigned entirely to an unrecorded Patent owned by the subsidiary. The assumed economic useful life of the patent is 10 years.

Assume that subsidiary sells inventory to the parent. The parent, ultimately, sells the inventory to customers outside of the consolidated group. You have complied the following data for the years ending 2015 and 2016 related with intra-entity inventory sales.

                Inventory Sales                 Gross Profit Remaining in Unsold Inventory

2016           $ 103,300                                   $29,441

2015           $ 87,900                                     $19,137

The inventory not remaining at the end of the year has been sold to unaffiliated entities outside of the consolidated group. The unsold part will be sold to unaffiliated entities in the following year. The parent company applies equity method for this investment.

Subsidiary reports $216,930 as net income on its income statement for the year of 2016.

1. Show the computation to yield the pre-consolidation balance for Equity income in subsidiary (appeared under parent company’s income statement) during 2016.
2. If the intra-entity sales changes from upstream to downstream, then how would the balance change for Equity income in subsidiary during 2016.
3. Show the consolidation adjustment entries related to intra-entity inventory sales.

On January 23, 16,000 shares of Tolle Company are acquired at a price of $24 per share plus a $160 brokerage commission. On April 12, a $0.40-per-share dividend was received on the Tolle Company stock. On June 10, 6,400 shares of the Tolle Company stock were sold for $32 per share less a $100 brokerage commission. Prepare the journal entries for the original purchase, the dividend, and the sale under the cost method. Refer to the Chart of Accounts for exact wording of account titles. When required, round your answers to the nearest dollar. CHART OF ACCOUNTS General Ledger ASSETS 110 Cash 111 Petty Cash 120 Accounts Receivable 121 Allowance for Doubtful Accounts 131 Notes Receivable 132 Interest Receivable 141 Merchandise Inventory 145 Office Supplies 161 Investments-Tolle Company Stock 165 Valuation Allowance for Trading Investments 166 Valuation Allowance for Available-for-Sale Investments 181 Land 193 Office Equipment 194 Accumulated Depreciation-Office Equipment LIABILITIES 210 Accounts Payable 221 Notes Payable 231 Interest Payable 241 Salaries Payable EQUITY 311 Common Stock 312 Paid-In Capital in Excess of Par-Common Stock 321 Preferred Stock 322 Paid-In Capital in Excess of Par-Preferred Stock 331 Treasury Stock 332 Paid-In Capital from Sale of Treasury Stock 340 Retained Earnings 350 Unrealized Gain (Loss) on Available-for-Sale Investments 351 Cash Dividends 352 Stock Dividends 390 Income Summary REVENUE 410 Sales 611 Interest Revenue 612 Dividend Revenue 621 Income of Tolle Company 631 Gain on Sale of Investments 641 Unrealized Gain on Trading Investments EXPENSES 511 Cost of Merchandise Sold 512 Bad Debt Expense 516 Cash Short and Over 520 Salaries Expense 531 Advertising Expense 534 Selling Expenses 535 Rent Expense 537 Office Supplies Expense 562 Depreciation Expense-Office Equipment 590 Miscellaneous Expense 710 Interest Expense 721 Loss of Tolle Company 731 Loss on Sale of Investments 741 Unrealized Loss on Trading Investments Prepare the journal entries for the original purchase, the dividend, and the sale under the cost method. Refer to the Chart of Accounts for exact wording of account titles. When required, round your answers to the nearest dollar.