Hrudka Corp. has manufactured a broad range of quality products since 1988. The following information is available for the company’s fiscal year ended February 28, 2014. Hrudka follows ASPE. 1. The company has $4 million of bonds payable outstanding at February 28, 2014, that were issued at par in 2003. The bonds carry an interest rate of 7%, payable semi-annually each June 1 and December 1. 2. Hrudka has several notes payable outstanding with its primary banking institution at February 28, 2014. In each case, the annual interest is due on the anniversary date of the note each year (same as the due dates listed). The notes are as follows: Due Date Amount Due Interest Rate Apr. 1, 2014 $150,000 8% Jan. 31, 2015 200,000 9% Mar. 15, 2015 500,000 7% Oct. 30, 2016 250,000 8% 3. Hrudka uses the expense approach to account for warranties. The company has a two-year warranty on selected products, with an estimated cost of 1% of sales being returned in the 12 months following the sale, and a cost of 1.5% of sales being returned in months 13 to 24 following sale. The warranty liability outstanding at February 28, 2013, was $5,700. Sales of warrantied products in the year ended February 28, 2014, were $154,000. Actual warranty costs incurred during the current fiscal year are as follows: Warranty claims honoured on 2012–2013 sales $4,900 Warranty claims honoured on 2013–2014 sales 1,100 $6,000 4. Regular trade payables for supplies and purchases of goods and services on open account are $414,000 at February 28, 2014. Included in this amount is a loan of $23,000 owing to an affiliated company. 5. The following information relates to Hrudka’s payroll for the month of February 2014. The company’s required contribution for EI is 1.4 times that of the employee contribution; for CPP it is 1.0 times that of the employee contribution. Salaries and wages outstanding at February 28, 2014 $220,000 EI withheld from employees 9,500 CPP withheld from employees 16,900 Income taxes withheld from employees 48,700 Union dues withheld from employees 21,500 6. Hrudka regularly pays GST owing to the government on the 15th of the month. Hrudka’s GST transactions include the GST that it charges to customers and the GST that it is charged by suppliers. During February 2014, purchases attracted $28,000 of GST, while the GST charged on invoices to customers totalled $39,900. At January 31, 2014, the balances in the GST Receivable and GST Payable accounts were $34,000 and $60,000, respectively. 7. Other miscellaneous liabilities included $50,000 of dividends payable on March 15, 2014; $25,000 of bonuses payable to company executives (75% payable in September 2014, and 25% payable the following March); and $75,000 in accrued audit fees covering the year ended February 28, 2014. 8. Hrudka sells gift cards to its customers. The company does not set a redemption date and customers can use their cards at any time. At March 1, 2013, Hrudka had a balance outstanding of $950,000 in its Unearned Revenues—Gift Cards account. The company received $225,000 in cash for gift cards purchased during the current year and $375,000 in redemptions took place during the year. Based on past experience, 15% of customer gift card balances never get redeemed. At the end of each year, Hrudka recognizes 15% of the opening balance of Unearned Revenues as earned during the year. Instruction. For a manufacturer such as Hrudka, how should the revenue from unredeemed gift cards be shown on the income statement, as opposed to revenue from redeemed gift cards?
In: Accounting
25. A relative price is:
A. the rate of inflation. B. a measure of overall prices at a particular point in time. C. the percentage change in a price index such as the CPI. D. the price of a specific good in comparison to the prices of other goods and services.
26.a specific good in comparison with other goods and services are called _______.
A. quality adjustments; substitution bias. B. changes in a relative price; inflation. C. inflation; changes in a relative price. D. price level adjustments; quality adjustments.
27. Suppose the value of the CPI is 1.10 in year 1, 1.16 in year 2, and 1.27 in year 3. Assume also that the price of computers increases by 3% between year 1 and year 2, and by another 3% between year 2 and year 3. The price level is increasing, the inflation rate is _______, and the relative price of computers is _________.
A. increasing; increasing B. constant; increasing C. constant; decreasing D. increasing; decreasing
28. Inflation _____ the signals sent by price changes to demanders and suppliers of goods and services.
A. amplifies B. obscures C. enhances D. has no impact on
29. The phenomenon known as _____ occurs when inflation causes people to pay an increasing percentage of their income in taxes even when their real incomes have not changed.
A. hyperinflation B. bracket creep C. the Fisher effect D. substitution bias
30. The shoe leather costs of inflation include all of the following EXCEPT:
A. the lost purchasing power of cash. B. the extra costs incurred to avoid holding cash. C. the cost of more frequent trips to the bank. D. the installation of a new cash management system. 31. Ann's Cookie Shop needs $1,000 cash per day for customer transactions. Ann has a choice between going to the bank first thing on Monday morning to withdraw $5,000 - enough cash for the whole week - or going to the bank first thing every morning for $1,000 each time. Ann puts the cost of going to the bank at $1 per trip. Assume that funds left in the bank earn precisely enough interest to keep their purchasing power unaffected by inflation. Ann's Cookie shop is open 5 days a week for 50 weeks each year. If Ann goes to the bank everyday when the inflation rate is 10%, then the annual cost of going to the bank is _____ and Ann's annual losses from holding cash are _____.
A. $50;$5,000 B. $50;$1,000 C. $250; $100 D. $250; $1,000
32. If workers and employers agree to a three-year wage contract expecting 3% inflation and inflation turns out to be 5%, then:
A. workers gain and employers gain. B. workers gain and employers lose. C. workers lose and employers gain. D. workers lose and employers lose.
33. When inflation turns out to be different than expected, wealth is ______.
A. destroyed B. redistributed C. increased D. decreased
34. It is difficult to engage in long-term financial planning when inflation is:
A. high and erratic. B. low and stable. C. accounted for through indexing. D. predictable.
35. The real interest rate is the:
A. market interest rate. B. annual percentage increase in the nominal value of a financial asset. C. annual percentage increase in the purchasing power of a financial asset. D. the interest rate charged on a loan in dollar terms.
36. The annual increase in the dollar value of a financial asset is called the:
A. real rate of return. B. inflation rate. C. real interest rate. D. nominal interest rate.
37. The market interest rate in Alpha is 7% and the market interest rate in Beta is 10%, but the inflation rate in Alpha is 3% and inflation rate in Beta is 8%. Which of the following statements is true?
A. The real interest rate is higher in Alpha, but the nominal interest rate is higher in Beta. B. The real interest rate is lower in Alpha, but the nominal interest rate is lower in Beta. C. Both the real and nominal interest rates are higher in Alpha. D. Both the real and nominal interest rates are higher in Beta.
38. On January 1, 2004, Anna invested $5,000 at 5% interest for one year. The CPI on January 1, 2004 stood at 1.60. On January 1, 2005, the CPI was 1.68. The real rate of interest earned by Anna was ____ percent.
A. -5 B. 0 C. 5 D. 8
39. Unexpectedly high inflation ______ borrowers and _____ lenders. A. helps; hurts B. helps; helps C. hurts; hurts D. hurts; helps 40. The Fisher effect is the tendency for ____ interest rates to be ______ when inflation is high.
A. real; high B. real; low C. market; low D. nominal; high
In: Economics
On December 27, 2017, Mint Company placed an order to purchase merchandise on account from a seller, Lemon, Inc. Lemon’s listed catalog price for the merchandise is $13,000. Lemon’s historical cost for these items is $4,000. Mint has been a customer of Lemon’s for years and was able to negotiate these terms: (i) a 7% trade discount and (ii) payment terms of 2/10, n/30. The goods were shipped by Lemon FOB shipping point on December 30, 2017 and arrived at Mint’s facility on January 5, 2018. At the time of shipment, Lemon paid $700 in shipping costs. On January 6, Mint returned $2,000 worth of merchandise to Lemon, which had an original cost to Lemon of $615. Mint paid Lemon in full on January 7.
Show all of your work and calculations, and make sure you answer all parts of the question.
Required:
Date: MM/DD/YY
Dr. Account………...XX
Cr. Account…………...XX
Date: MM/DD/YY
Dr. Account………...XX
Cr. Account…………...XX
Date: MM/DD/YY
Dr. Account………...XX
Cr. Account…………...XX
Date: MM/DD/YY
Dr. Account………...XX
Cr. Account…………...XX
Facts (Problems 6-7):
On June 29, 2019 Hulu Company placed an order to purchase 10,000 units of “This is Us” Merchandise from the seller The Big Three Company. Unit price for the merchandise was $4.50 while The Big Three company originally paid a cost of $3.00.
As The Big Three Company was trying to attract more customers and expand, it began its promotion of providing a discount of 15% to any customers that order 10,000 units or more with an additional discount of 2/10, n/30. Both companies use the gross method for purchases and discounts. On July 2, 2019 The Big Three Company shipped the merchandise on F.O.B. Shipping Point, and the merchandise arrived on July 10th. Shipping cost of $3,000 was pre-paid by The Big Three Company. On July 11th, Hulu paid off the balance after returning 500 units.
Date: MM/DD/YY
Dr. Account………...XX
Cr. Account…………...XX
In: Accounting
In: Accounting
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In: Accounting
1) A company has 3,000 shares of common stock outstanding at a price of $27 per share. It also has 150 bonds outstanding, each with a face value of $1,000 and currently selling at 45% of face value. The tax rate is 20%. What is the weight of debt that would be used in the calculation of the weighted average cost of capital?
2) A company has equity with a market value of $15,000 and debt with a market value of $9,500. The company also has 200 shares of preferred stock that pay a constant annual dividend per share of $2.65 forever; the next dividend is in one year. The cost of the preferred stock is 8%. What is the weight of the preferred stock that would be used in the calculation of the weighted average cost of capital?
In: Finance
7-27. As auditor of the Star Manufacturing Company, you have noticed the following accounts on the trial balance taken from the books of Star one month before year-end:
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Account Name |
From Whom Confirm? |
Information to Confirm |
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Cash in bank |
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Trade accounts receivable |
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Notes receivable |
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Inventories |
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Land |
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Buildings, net |
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Furniture, fixtures, and equipment, net |
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Trade accounts payable |
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Mortgages payable |
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Capital stock |
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Retained earnings |
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Sales |
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Cost of sales |
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General and administrative expenses |
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Legal and professional fees |
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Interest expense |
In: Accounting
In: Accounting
Q9.Al ZakiCompany doing the business for sale of Televisions. The company made total sales of 10 Million in which Cash Sales were OMR 3 Million.As the Company make sales on credit to different customers it reports the following financial information before adjustments.Debit Balance of Account Receivable OMR 475,000.Debit Balance of Allowance for Doubtful Accounts OMR 22,500.Al Zaki Company estimates bad debts at 3.5% of net sales and follows direct write off method to record the Journal entries. Based on the previousyears’ experience Al Zaki Company also estimated bad debts at 6.25% of account receivables as per the allowance method on credit sales. As Al ZakiCompany has not received the full amount it has written off the estimated amount of account receivables on 30 October. In the month of January the customers has paid the full amount which was written off by Al Zaki Company. You are required to write the necessary Journal entries.
In: Accounting
Part 1: Firm Performance
In this spreadsheet, you will find data with a number of variables that are commonly studied in business strategy research. Working from column A across, each firm has an identifier code. Firm ownership is a dummy coded variable where 0 = publicly-traded and 1 = privately-held firm ownership. Firm performance is the company’s self-assessment about the extent to which they meet/exceed performance expectations.
The remaining variables are factors that are predicted to influence performance. Customer orientation measures the extent to which a firm focuses on its customers and their needs, wants, and preferences. Long term orientation, benchmarking, and planning are variables that speak to the firm’s strategic planning capacity. Finally, risk taking is the firm’s capacity for risky strategic moves. Each variable is measured by managers reporting on a 1-7 Likert scale.
|
Firm ID |
ownership (private = 1) |
firm performance |
customer orientation |
long-term orientation |
benchmarking |
planning |
risk taking |
Risk taking squared |
firm performance |
|
1 |
1 |
4.33 |
5.50 |
6.20 |
5.00 |
1.00 |
5.00 |
25.00 |
4.33 |
|
2 |
0 |
4.00 |
6.25 |
4.80 |
1.83 |
4.17 |
5.80 |
33.64 |
4.00 |
|
3 |
0 |
4.67 |
6.25 |
2.00 |
5.50 |
5.33 |
4.80 |
23.04 |
4.67 |
|
4 |
0 |
4.00 |
4.25 |
3.80 |
1.67 |
5.00 |
6.00 |
36.00 |
4.00 |
|
5 |
1 |
4.67 |
6.25 |
5.60 |
4.50 |
4.50 |
5.20 |
27.04 |
4.67 |
|
6 |
1 |
5.67 |
5.25 |
4.20 |
5.00 |
2.17 |
3.00 |
9.00 |
5.67 |
|
7 |
0 |
2.67 |
3.00 |
5.40 |
5.33 |
5.50 |
4.60 |
21.16 |
2.67 |
|
8 |
0 |
2.67 |
5.75 |
3.00 |
4.33 |
4.67 |
6.80 |
46.24 |
2.67 |
|
9 |
1 |
5.00 |
6.25 |
5.00 |
3.33 |
3.83 |
4.80 |
23.04 |
5.00 |
|
10 |
1 |
6.00 |
6.25 |
5.80 |
3.83 |
4.33 |
2.80 |
7.84 |
6.00 |
|
11 |
1 |
5.00 |
6.00 |
3.80 |
4.00 |
3.00 |
3.60 |
12.96 |
5.00 |
|
12 |
0 |
5.00 |
6.25 |
5.00 |
4.67 |
3.83 |
4.20 |
17.64 |
5.00 |
|
13 |
1 |
5.33 |
5.50 |
5.40 |
2.67 |
4.00 |
3.20 |
10.24 |
5.33 |
|
14 |
0 |
5.00 |
4.75 |
5.20 |
6.67 |
6.00 |
1.60 |
2.56 |
5.00 |
|
15 |
0 |
4.67 |
6.50 |
6.80 |
4.67 |
5.50 |
4.00 |
16.00 |
4.67 |
9. Estimate a multiple regression model for the influence of customer orientation, long-term orientation, and benchmarking on firm performance. Report the regression equation and interpret your findings.
Please answer with Excel solved with toolpak if necessary.
In: Statistics and Probability