Your client, a publically-traded company, in 2019 acquires $2.5
million of fixed assets. All of these assets are 5 year class MACRS
property. The first three years of MACRS depreciation are: First
Year $625,000; Second Year 750,000; Third Year $450,000. For book
purposes, the company uses a 10 year useful life, straight-line
depreciation with no salvage value. Obviously, these assets will
create a DTL. How should the DTL be presented for these assets at
the end of year 2? Ignore partial year depreciation and assume a
21% tax rate.
a. $105, 000 Long-Term; $78,750 Short-Term
b. $78,750 Long-Term $105,000 Short-Term
c. $183,750 Long-Term
d. None of the above
In: Accounting
A publically traded company more than doubled its EPS by changing depreciation methods. In justifying the change, management supported the change as follows: In comparison to direct competitors, the previous depreciation method was more conservative and thus had a negative impact on earnings. Although difficult to prove, there is considerable evidence that accounting changes are made for reasons other than improved financial reporting. GAAP are flexible in the initial selection of accounting methods and in making subsequent changes. However, the accounting standards specifically require that only changes to preferable accounting methods be made. Does this violate GAAP? Is this ethical? What would be an alternative course of action?
In: Accounting
| The difference between total revenue and total cost is: | |||||||||
|
| Total revenue is a firm's: | |||||||||
|
In: Economics
Having an issue with question C. My answer continues to be incorrect. Thank you.
McGriff Dog Food
Company normally takes 27 days to pay for average daily credit
purchases of $9,460. Its average daily sales are $10,700, and it
collects accounts in 27 days.
a. What is its net credit position?
b-1. If the firm extends its average payment period from 27 days to 38 days (and all else remains the same), what is the firm's new net credit position? (Negative amount should be indicated by a minus sign.)
In: Finance
During the month, the following transactions occurred for Trevor’s Supply Company. The company uses the perpetual inventory method.
|
Dec. 1 |
Accepted a 4-month, 6% note from a customer in settlement of $12,400 account. |
|
3 |
Wrote off as uncollectible specific accounts totaling $680. |
|
8 |
Purchased $17,200 of inventory on account, terms 2/10, n/30. |
|
11 |
Sold $25,000 of inventory that cost $17,500, terms 1/15, n/45. |
|
12 |
Paid $13,750 for employee salaries. |
|
15 |
Customers returned $8,000 of inventory sold on December 11th that cost $5,200. |
|
17 |
Collected the balance due from the December 11th sale. |
|
18 |
Paid the balance due on the December 8th purchase. |
|
24 |
Received $370 on an account previously written off. |
|
27 |
Purchased advertising supplies for $1,300 on account. |
|
31 |
Paid freight on inventory sold, $3,218. |
Instructions
(a) Journalize the transactions using the accounts listed in part b. Round all amounts to the nearest dollar.
(b) Post to the T accounts. Beginning balances are already shown.
(c) Journalize the following adjustments:
|
1. |
Interest accrual for the note. |
|
2. |
Bad debts are expected to be 20% of the ending accounts receivable. |
|
3. |
A count of advertising supplies at month end, reveals that $560 remains unused. |
|
4. |
The income tax rate is 30% based on $9,645 taxable income. |
(d) Post adjusting entries to the T accounts.
(e) Prepare a trial balance.
(f) Prepare the financial statements for the year ending December 31. The income statement should be formatted as a Multiple Step Income Statement as detailed in Chapter 5.
(g) Ratio analysis
In: Accounting
A company's customer service department asks its customers to rate their over-the-phone service on a scale of 1–20 immediately after their service has been completed. The company then matches each customer's rating with the number of minutes the person waited on hold. The accompanying table shows the ratings and numbers of minutes on hold for 10 randomly selected customers. Complete parts a through c below.
Minutes Rating
1 14
7 12
3 20
8 15
5 13
2 17
5 10
3 17
5 12
2 15
a. Calculate the sample covariance.
b. Calculate the sample correlation coefficient.
c. Describe the relationship between x and y.
In: Statistics and Probability
Example 4:
Suppose that the monopolist faces a demand curve for its widgets as q = 9 - 0.2p. The firm’s marginal revenue and cost functions are: MR(q) = 45 – 10q and MC(q) = 15 + 5q. The firm’s total cost function is C(q) = 2.5q2 + 15q + 3.
In: Economics
Ecru Company has identified five industry segments: plastics, metals, lumber, paper, and finance.
It appropriately consolidated each of these segments in producing its annual financial statements. Information describing each segment (in thousands) follows:
| Plastics | Metals | Lumber | Paper | Finance | |||||||||||||||
| Sales to outside parties | $ | 6,370 | $ | 2,169 | $ | 646 | $ | 357 | $ | 0 | |||||||||
| Intersegment transfers | 113 | 136 | 101 | 113 | 0 | ||||||||||||||
| Interest income from outside parties | 0 | 21 | 8 | 0 | 29 | ||||||||||||||
| Interest income from intersegment loans | 0 | 0 | 0 | 0 | 164 | ||||||||||||||
| Operating expenses | 3,954 | 1,632 | 936 | 589 | 18 | ||||||||||||||
| Interest expense | 63 | 18 | 53 | 30 | 89 | ||||||||||||||
| Tangible assets | 1,316 | 3,011 | 339 | 586 | 114 | ||||||||||||||
| Intangible assets | 74 | 366 | 0 | 50 | 0 | ||||||||||||||
| Intersegment loans (debt) | 0 | 0 | 0 | 0 | 669 | ||||||||||||||
Ecru does not allocate its $1,260,000 in common expenses to the various segments.
Perform testing procedures to determine Ecru’s reportable operating segments.
a. Revenue test
b. Profit or loss test
c. Asset test
In: Accounting
a) A telecommunications company enters into a contract with a customer. Under the contract, the company promises to provide to the customer 4 GB data, 300 minutes of talk time, and 500 texts for $36.
Required:
Briefly explain how the telecommunications company should account for the contract under NZ IFRS 15. You need to refer to the relevant requirements but not to any specific paragraph of NZ IFRS 15.
b) A company sells mobile phone sets for $99 each. The company’s cost of each phone set is $70. The phone set became very popular with its customers. Near
the end of the financial year, 5000 customers purchased the phone set from the company. The company allows its customers to return the phone set within 14
days if they have not unpacked the set. The return period has not expired for any phone set sold by the end of the year. The company expects, based on its
past experience, that 1% of its customers will return the phone set.
Required:
i) Prepare the journal entries in the books of the company to record the transaction.
ii) Explain why the transaction is recorded in this manner using NZ IFRS 15 requirements.
In: Accounting
Stock Market Valuation and Success - IPO
The business I’ve chosen is DocuSign Inc (DOCU). The company makes software for digitally signing documents, and has been on CNBC’s list of startups revolutionizing the technology industry three times. They went public in April 2018 after raising $629.3 million in IPO. The stock opened at $38 per share, above the estimates of between $24 and $26 per share, and closed at $39.73 per share. DocuSign planned to offer 16.1 million shares but initially sold 21.7 million shares giving them a total of 152.1 million shares, valuing the company at $4.41 billion, which is above the original $3 billion valuation estimated. The IPO money has been spent on major investments in infrastructure and security, and creating a company culture that’ll attract top talent (Novet, 2018).
The market at the time seemed very favorable for the tech company’s. DocuSign was the eighth cloud based company to go public in 2018 following Dropbox and Zscaler Inc. In recent years leading up to going public in 2018 the company struggled with revenue loss, but its revenue has risen 39% overall. The revenue losses have been $52 million for the fiscal year ending 2017, $115 million in 2016, and $123 million in 2015. In good news for shareholders the revenue in fiscal year 2019 was over $700 million and the company grew 35%. There was some fear the company may not be profitable in the future because most of their revenue is from customer subscriptions, but they’ve done a good job at partnering with companies to use their services creating more revenue, and more profit value for shareholders (Bary, 2018).
For Chegg: explain whether you agree or disagree with the above assessments of my Selected IPO that occurred in the last five years . Can you identify additional economic and market factors that may have influenced the results of the IPO?
In: Finance