CP 9‐5
Paul’s Roofing Corporation paid monthly corporate income tax
installments of $500 commencing February 15, 2019. The company’s
income before income taxes for the year ended December 31, 2019
was $15,000. The corporate income tax rate is 40%. Paul’s Roofing paid
the 2019 corporate income taxes owing on January 31, 2020.
CHAPTER NINE / Debt Financing: Current and Non‐current Liabilities First US Edition
Required:
1. Record the February 15, 2019 payment.
2. Record the 2019 corporate income tax expense.
3. Record the January 31, 2020 payment.
Descriptions and general ledger account numbers are not necessary.
Show calculations where applicable.
In: Accounting
On January 1, 2020, the Hardin Company budget committee has reached agreement on the following data for the 6 months ending June 30, 2020.
Sales units:First quarter 5,000; second quarter 6,900; third quarter 7,300.
Ending raw materials inventory:40% of the next quarter’s production requirements.
Ending finished goods inventory:25% of the next quarter’s expected sales units.
Third-quarter production:7,360 units.
The ending raw materials and finished goods inventories at December 31, 2019, follow the same percentage relationships to production and sales that occur in 2020. 3 pounds of raw materials are required to make each unit of finished goods. Raw materials purchased are expected to cost $6 per pound.
Prepare a production budget by quarters for the 6-month period ended June 30, 2020.
HARDIN COMPANY
Production Budget
For the Six Months Ending June 30, 2020For the Quarter Ending June 30, 2020June 30, 2020
HARDIN COMPANY
Direct Materials Budget
For the Six Months Ending June 30, 2020June 30, 2020For the Quarter Ending June 30, 2020
In: Accounting
How should specimens be transported from the University Health Centre to the TDH laboratory?
In: Biology
In this problem, assume that the distribution of differences is approximately normal. Note: For degrees of freedom d.f. not in the Student's t table, use the closest d.f. that is smaller. In some situations, this choice of d.f. may increase the P-value by a small amount and therefore produce a slightly more "conservative" answer. Are America's top chief executive officers (CEOs) really worth all that money? One way to answer this question is to look at row B, the annual company percentage increase in revenue, versus row A, the CEO's annual percentage salary increase in that same company. Suppose a random sample of companies yielded the following data:
B: Percent increase for company 6 12 12 18 6 4 21 37
A: Percent increase for CEO 15 28 21 14 -4 19 15 30
Do these data indicate that the population mean percentage increase in corporate revenue (row B) is different from the population mean percentage increase in CEO salary? Use a 5% level of significance. (Let d = B − A.)
(a) What is the level of significance?
State the null and alternate hypotheses.
H0: μd = 0; H1: μd > 0
H0: μd = 0; H1: μd < 0
H0: μd ≠ 0; H1: μd = 0
H0: μd = 0; H1: μd ≠ 0
H0: μd > 0; H1: μd = 0
(b) What sampling distribution will you use? What assumptions are you making?
The standard normal. We assume that d has an approximately uniform distribution.
The Student's t. We assume that d has an approximately normal distribution.
The Student's t. We assume that d has an approximately uniform distribution.
The standard normal. We assume that d has an approximately normal distribution.
What is the value of the sample test statistic? (Round your answer to three decimal places.)
(c) Find the P-value. (Round your answer to four decimal places.)
Sketch the sampling distribution and show the area corresponding to the P-value.
(d) Based on your answers in parts (a) to (c), will you reject or fail to reject the null hypothesis? Are the data statistically significant at level α?
Since the P-value ≤ α, we fail to reject H0. The data are statistically significant.
Since the P-value > α, we reject H0. The data are not statistically significant.
Since the P-value > α, we fail to reject H0. The data are not statistically significant.
Since the P-value ≤ α, we reject H0. The data are statistically significant.
(e) Interpret your conclusion in the context of the application.
Fail to reject H0. At the 5% level of significance, the evidence is sufficient to claim a difference in population mean percentage increases for corporate revenue and CEO salary.
Reject H0. At the 5% level of significance, the evidence is insufficient to claim a difference in population mean percentage increases for corporate revenue and CEO salary.
Reject H0. At the 5% level of significance, the evidence is sufficient to claim a difference in population mean percentage increases for corporate revenue and CEO salary.
Fail to reject H0. At the 5% level of significance, the evidence is insufficient to claim a difference in population mean percentage increases for corporate revenue and CEO salary.
In: Statistics and Probability
In this problem, assume that the distribution of differences is
approximately normal. Note: For degrees of freedom
d.f. not in the Student's t table, use
the closest d.f. that is smaller. In
some situations, this choice of d.f. may increase
the P-value by a small amount and therefore produce a
slightly more "conservative" answer.
Are America's top chief executive officers (CEOs) really worth all
that money? One way to answer this question is to look at row
B, the annual company percentage increase in revenue,
versus row A, the CEO's annual percentage salary increase
in that same company. Suppose a random sample of companies yielded
the following data:
| B:
Percent increase for company |
22 | 6 | 12 | 18 | 6 | 4 | 21 | 37 |
| A:
Percent increase for CEO |
25 | 27 | 26 | 14 | -4 | 19 | 15 | 30 |
Do these data indicate that the population mean percentage increase in corporate revenue (row B) is different from the population mean percentage increase in CEO salary? Use a 5% level of significance. (Let d = B ? A.)
(a) What is the level of significance?
State the null and alternate hypotheses.
H0: ?d = 0; H1: ?d < 0H0: ?d > 0; H1: ?d = 0 H0: ?d ? 0; H1: ?d = 0H0: ?d = 0; H1: ?d > 0H0: ?d = 0; H1: ?d ? 0
(b) What sampling distribution will you use? What assumptions are
you making?
The Student's t. We assume that d has an approximately normal distribution.The Student's t. We assume that d has an approximately uniform distribution. The standard normal. We assume that d has an approximately uniform distribution.The standard normal. We assume that d has an approximately normal distribution.
What is the value of the sample test statistic? (Round your answer
to three decimal places.)
(c) Find the P-value. (Round your answer to four decimal
places.)
Sketch the sampling distribution and show the area corresponding to
the P-value.
(d) Based on your answers in parts (a) to (c), will you reject or fail to reject the null hypothesis? Are the data statistically significant at level ??
Since the P-value ? ?, we reject H0. The data are statistically significant.Since the P-value > ?, we fail to reject H0. The data are not statistically significant. Since the P-value > ?, we reject H0. The data are not statistically significant.Since the P-value ? ?, we fail to reject H0. The data are statistically significant.
(e) Interpret your conclusion in the context of the
application.
Reject H0. At the 5% level of significance, the evidence is sufficient to claim a difference in population mean percentage increases for corporate revenue and CEO salary.Fail to reject H0. At the 5% level of significance, the evidence is insufficient to claim a difference in population mean percentage increases for corporate revenue and CEO salary. Fail to reject H0. At the 5% level of significance, the evidence is sufficient to claim a difference in population mean percentage increases for corporate revenue and CEO salary.Reject H0. At the 5% level of significance, the evidence is insufficient to claim a difference in population mean percentage increases for corporate revenue and CEO salary.
In: Statistics and Probability
Martinez Company sells tablet PCs combined with Internet service, which permits the tablet to connect to the Internet anywhere and set up a Wi-Fi hot spot. It offers two bundles with the following terms.
1. Martinez Bundle A sells a tablet with 3 years of Internet service. The price for the tablet and a 3-year Internet connection service contract is $491. The standalone selling price of the tablet is $246 (the cost to Martinez Company is $166). Martinez Company sells the Internet access service independently for an upfront payment of $291. On January 2, 2020, Martinez Company signed 110 contracts, receiving a total of $54,010 in cash.
2. Martinez Bundle B includes the tablet and Internet service plus a service plan for the tablet PC (for any repairs or upgrades to the tablet or the Internet connections) during the 3-year contract period. That product bundle sells for $589. Martinez Company provides the 3-year tablet service plan as a separate product with a standalone selling price of $151. Martinez Company signed 210 contracts for Martinez Bundle B on July 1, 2020, receiving a total of $123,690 in cash.
Prepare any journal entries to record the revenue arrangement for Martinez Bundle A on January 2, 2020, and December 31, 2020.
|
(To record sales) |
|
(To record cost of goods sold) |
Prepare any journal entries to record the revenue arrangement for
Martinez Bundle B on July 1, 2020, and December 31, 2020.
|
(To record sales) |
|
(To record cost of goods sold) |
Repeat the requirements for part (a), assuming that Martinez
Company has no reliable data with which to estimate the standalone
selling price for the Internet service.
(To record sales)
|
(To record cost of goods sold) |
In: Accounting
finchco case for corporate finance,
It was late February 2010, and Harry Finch who was president and chief executive officer (CEO) of Finch Distributing Company (Finchco), was thinking about selling his business. At 65 years of age but in excellent health, he wanted to pursue his dream of buying a yacht and sailing around the world. His interest in selling the company had begun in earnest when in late 2007 Finchco had received a $35.4 million offer1 to purchase the company from one of its U.S. suppliers. Unfortunately, at the onset of the financial crisis, the offer was revoked. Since that time, Finchco had experienced a financial reversal related to the downturn of the economy but Finch felt that the company was turning around and had a potential large contract on the horizon. He wondered whether the time was right to offer his firm for sale.
In: Finance
|
Neon Corporation’s stock returns have a covariance with the market portfolio of .0455. The standard deviation of the returns on the market portfolio is 20 percent, and the expected market risk premium is 7.9 percent. The company has bonds outstanding with a total market value of $55.04 million and a yield to maturity of 6.9 percent. The company also has 4.54 million shares of common stock outstanding, each selling for $24. The company’s CEO considers the current debt–equity ratio optimal. The corporate tax rate is 40 percent, and Treasury bills currently yield 3.8 percent. The company is considering the purchase of additional equipment that would cost $42.04 million. The expected unlevered cash flows from the equipment are $11.84 million per year for five years. Purchasing the equipment will not change the risk level of the company. |
|
Calculate the NPV of the project. |
In: Finance
|
Neon Corporation’s stock returns have a covariance with the market portfolio of .0385. The standard deviation of the returns on the market portfolio is 20 percent, and the expected market risk premium is 9.5 percent. The company has bonds outstanding with a total market value of $55.2 million and a yield to maturity of 8.5 percent. The company also has 4.70 million shares of common stock outstanding, each selling for $25. The company’s CEO considers the current debt–equity ratio optimal. The corporate tax rate is 40 percent, and Treasury bills currently yield 5.4 percent. The company is considering the purchase of additional equipment that would cost $42.2 million. The expected unlevered cash flows from the equipment are $12 million per year for five years. Purchasing the equipment will not change the risk level of the company. |
|
Calculate the NPV of the project. |
In: Finance
Who is the most powerful person you know personally? What is it that makes the person so powerful? Be sure to answer this question in the context of the information presented in the chapter.
In: Operations Management