t is now July 2016. Consider the following Futures Market for 1,000 barrels of Crude Oil:

Suppose you are the CFO of an independent oil refiner. You will need to purchase 500,000 barrels of Crude Oil in November 2015 and February 2016 on the spot market. Please devise a hedging strategy for the company, assuming you are only allowed to use ‘front month’ contracts – meaning that in July 2015 (now) you can only hedge with the December 2016 futures contract. When that position is closed at the price indicated, then you can use the March 2016 Futures contract.

What would the average price have been if you simply purchased the oil in the spot market?

Matt Broderick Company began operations on January 2, 2013. It employs 9 individuals who work 8-hour days and are paid hourly. Each employee earns 10 paid vacation days and 6 paid sick days annually. Vacation days may be taken after January 15 of the year following the year in which they are earned. Sick days may be taken as soon as they are earned; unused sick days accumulate. Additional information is as follows.

Actual Hourly wage rate 2016 2017    Vacation days used by each employee    2016    2017 Sick days used by each employee    2016    2017

   $10 $11 0    9 4 5
(a)Prepare journal entries to record transactions related to compensated absences during 2016 and 2017.
(b) Compute the amounts of any liability for compensated absences that should be reported on the balance sheet at December 31, 2016, and 2017. Please explain each step with each calculation

Depreciation by Three Methods; Partial Years Razar Sharp Company purchased equipment on July 1, 2014, for $58,050. The equipment was expected to have a useful life of three years, or 5,940 operating hours, and a residual value of $1,620. The equipment was used for 1,100 hours during 2014, 2,100 hours in 2015, 1,800 hours in 2016, and 940 hours in 2017. Required: Determine the amount of depreciation expense for the years ended December 31, 2014, 2015, 2016, and 2017, by (a) the straight-line method, (b) units-of-output method, and (c) the double-declining-balance method. Note: FOR DECLINING BALANCE ONLY, round the multiplier to four decimal places. Then round the answer for each year to the nearest whole dollar. a. Straight-line method Year Amount 2014 $ 2015 $ 2016 $ 2017 $ b. Units-of-output method Year Amount 2014 $ 2015 $ 2016 $ 2017 $ c. Double-declining-balance method Year Amount 2014 $ 2015 $ 2016 $ 2017 $

Lansing Company’s 2016 income statement and selected balance sheet data (for current assets and current liabilities) at December 31, 2015 and 2016, follow.
  

Required:

Prepare the cash flows from operating activities section only of the company’s 2016 statement of cash flows using the indirect method.(Amounts to be deducted should be indicated with a minus sign.)
  

Gross Profit Method: Estimation of Flood Loss

On November 21, 2016, a flood at Hodge Company's warehouse caused severe damage to its entire inventory of Product Tex. Hodge estimates that all usable damaged goods can be sold for $8,400. The following information was available from Hodge's accounting records for Product Tex:

Based on recent history, Hodge had a gross margin (profit) on Product Tex of 30% of net sales.

Required:

1. Prepare a schedule to calculate the estimated loss on the inventory in the flood, using the gross profit method.

Weiland Co. shows the following information on its 2016 income statement: sales = $158,500; costs = $80,800; other expenses = $4,100; depreciation expense = $9,800; interest expense = $7,300; taxes = $19,775; dividends = $7,750. In addition, you're told that the firm issued $3,700 in new equity during 2016 and redeemed $6,100 in outstanding long-term debt.
  
a. What is the 2016 operating cash flow? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)
  
Operating cash flow            $
  
b. What is the 2016 cash flow to creditors? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)
  
Cash flow to creditors            $
  
c. What is the 2016 cash flow to stockholders? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)
  
Cash flow to stockholders            $
  
d. If net fixed assets increased by $20,800 during the year, what was the addition to NWC?

Abbott Laboratories' has a defined benefit retirement plan. The company's 2016 annual report includes the following excerpt about these plans (in millions): Projected benefit obligations, January 1, 2016 $7,820 Service cost — benefits earned during the year 263 Interest cost on projected benefit obligations 288 Actuarial losses (gains) 645 Benefits paid (242 ) Other, including foreign currency translation (257 ) Projected benefit obligations, December 31, 2016 $8,517 Plans' assets at fair value, January 1, 2016 $6,772 Actual return on plan assets 631 Company contributions 582 Benefits paid (242 ) Other, including foreign currency translation (201 ) Plan assets at fair value, December 31, 2016 $7,542 What is the funded status of this plan? Select one: A. The plan is underfunded by $975 million B. The plan is overfunded by $975 million C. The plan is underfunded by $8,517 million D. The plan is overfunded by $7,542 million E. None of the above

Govermental Accounting

Compute The Expense and Expenditure for the Grambling Housing Development for the year ended December 31, 2016 based on the following data:

Grambling Housing Development, a small housing service nonprofit agency, began operations on January 1, 2016, with $40,000 cash and $150,000 Equipment, on which $60,000 was owed on a note to Chase Bank. The equipment was expected to have a remaining useful life of 25 years with no salvage value. During its first year of operations, ending December 31, 2016, Grambling Housing paid or accrued the following:2.Utilities, $24,0004.Capital Outlay-additional houses were purchased on January 3, 2016 for $300,000 expected to have a 25 year useful life.

Salaries and other personnel costs, $100,000

Utilities $24,000

Debt service-interest $5,500 and payment on long-term note principal $10,000

Capital Outlay-additional houses were purchased on January 3, 2016 for $300,000 expected to have a 25 year useful life.

E19-14 (L01,2,3,4) (Deferred Tax Liability, Change in Tax Rate, Prepare Section of Income Statement) Novotna Inc.’s only temporary difference at the beginning and end of 2016 is caused by a $3 million deferred gain for tax purposes for an install- ment sale of a plant asset, and the related receivable (only one-half of which is classified as a current asset) is due in equal install- ments in 2017 and 2018. The related deferred tax liability at the beginning of the year is $1,200,000. In the third quarter of 2016, a new tax rate of 34% is enacted into law and is scheduled to become effective for 2018. Taxable income for 2016 is $5,000,000, and taxable income is expected in all future years.

Instructions

(a) Determine the amount reported as a deferred tax liability at the end of 2016. Indicate proper classification(s).

(b) Preparethejournalentry(ifany)necessarytoadjustthedeferredtaxliabilitywhenthenewtaxrateisenactedintolaw.

(c) Draft the income tax expense portion of the income statement for 2016. Begin with the line “Income before income

taxes.” Assume no permanent differences exist.