How do you view
outsourcing?
Considering all of the stakeholders of a business
(owners, employees, shareholders, customers, and the community in
which the business operates), who stands to benefit the most from
outsourcing?
Have you or a friend or
family member been impacted by outsourcing? If so, please share
your experience to the extent you are comfortable.
According to Investopedia.com, “outsourcing” is
defined as “a practice used by different companies to reduce costs
by transferring portions of work to outside suppliers rather than
completing it internally.” Further, “outsourcing is an effective
cost-saving strategy when used properly. It is sometimes more
affordable to purchase a good from companies with comparative
advantages than it is to produce the good internally. An example of
a manufacturing company outsourcing would be Dell buying some of
its computer components from another manufacturer in order to save
on production costs. Alternatively, businesses may decide to
outsource book-keeping duties to independent accounting firms, as
it may be cheaper than retaining an in-house accountant.”
There has been much controversy and concern in the
business world and in our overall economy in the U.S. regarding the
outsourcing of many jobs, particularly in the manufacturing sector,
from the U.S. to foreign countries. This is not just a U.S.
problem; there are recent concerns of outsourcing in Germany and
Brazil, for example.
Some of the benefits of outsourcing
are seen as lower overall costs, potentially less government
regulation and increased profits. Often
cited detriments of outsourcing are bad publicity
(“taking jobs away from Americans”, etc.) and reduced quality of
goods and services unless an employee of the U.S. company can be on
site to oversee the work.
In: Economics
How do you view
outsourcing?
Considering all of the stakeholders of a business
(owners, employees, shareholders, customers, and the community in
which the business operates), who stands to benefit the most from
outsourcing?
Have you or a friend or
family member been impacted by outsourcing? If so, please share
your experience to the extent you are comfortable.
According to Investopedia.com, “outsourcing” is
defined as “a practice used by different companies to reduce costs
by transferring portions of work to outside suppliers rather than
completing it internally.” Further, “outsourcing is an effective
cost-saving strategy when used properly. It is sometimes more
affordable to purchase a good from companies with comparative
advantages than it is to produce the good internally. An example of
a manufacturing company outsourcing would be Dell buying some of
its computer components from another manufacturer in order to save
on production costs. Alternatively, businesses may decide to
outsource book-keeping duties to independent accounting firms, as
it may be cheaper than retaining an in-house accountant.”
There has been much controversy and concern in the
business world and in our overall economy in the U.S. regarding the
outsourcing of many jobs, particularly in the manufacturing sector,
from the U.S. to foreign countries. This is not just a U.S.
problem; there are recent concerns of outsourcing in Germany and
Brazil, for example.
Some of the benefits of outsourcing
are seen as lower overall costs, potentially less government
regulation and increased profits. Often
cited detriments of outsourcing are bad publicity
(“taking jobs away from Americans”, etc.) and reduced quality of
goods and services unless an employee of the U.S. company can be on
site to oversee the work.
In: Economics
Blue Company in its first year of operations provides the following information related to one of its available-for-sale debt securities at December 31, 2020. Amortized cost $51,700 Fair value 43,400 Expected credit losses 12,900
What is the amount of the credit loss that Blue should report on this available-for-sale security at December 31, 2020?
Prepare the journal entry to record the credit loss, if any (and
any other adjustment needed), at December 31, 2020.
(Credit account titles are automatically indented when
amount is entered. Do not indent manually. If no entry is required,
select "No Entry" for the account titles and enter 0 for the
amounts.)
Assume the same information as for part (c). Prepare the journal
entry to record the credit loss, if necessary (and any other
adjustment needed), at December 31, 2020. (Credit
account titles are automatically indented when amount is entered.
Do not indent manually. If no entry is required, select "No Entry"
for the account titles and enter 0 for the
amounts.)
In: Accounting
Cansela Corporation uses a periodic inventory system and the
LIFO method to value its inventory. The company began 2018 with
inventory of 5,600 units of its only product. The beginning
inventory balance of $75,600 consisted of the following
layers:
| 2,100 units at $11 per unit | = | $ | 23,100 | |
| 3,500 units at $15 per unit | = | 52,500 | ||
| Beginning inventory | $ | 75,600 | ||
During the three years 2018–2020, the cost of inventory remained
constant at $17 per unit. Unit purchases and sales during these
years were as follows:
| Purchases | Sales | |
| 2018 | 11,500 | 13,000 |
| 2019 | 15,000 | 17,000 |
| 2020 | 13,500 | 14,700 |
Required:
1. Calculate cost of goods sold for 2018, 2019,
and 2020.
2. Disregarding income tax, determine the LIFO
liquidation profit or loss, if any, for each of the three
years.
3. Determine the effects of LIFO liquidation on
cost of goods sold and net income for 2018, 2019, and 2020.
Cansela’s effective income tax rate is 35%.
In: Accounting
Computing and Assessing Plant Asset Impairment
Zeibart Company purchases equipment for $225,000 on July 1, 2016, with an estimated useful life of 10 years and expected salvage value of $25,000. Straight-line depreciation is used. On July 1, 2020, economic factors cause the fair value of the equipment to decline to $90,000. On this date, Zeibart examines the equipment for impairment and estimates $125,000 in future cash inflows related to use of this equipment.
a. Is the equipment impaired at July 1, 2020? Explain.
b. If the equipment is impaired on July 1, 2020, compute the impairment loss and prepare a journal entry to record the loss.
c. What amount of depreciation expense would Zeibart record for the 12 months from July 1, 2020 through June 30, 2021? Prepare a journal entry to record this depreciation expense.
(Hint: Assume no change in salvage value.)
d. Using the financial statement effects template, show how the entries in parts b and c affect Zeibart Company's balance sheet and income statement.
In: Accounting
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In: Finance
1.) Winnie the Pooh Inc. issues 5,000 shares of $2 par common stock for $75 a share and 10,000 shares of $6 par preferred stock for $88 dollars per share. Journalize the issuance of these stocks:
2.) Winnie the Pooh Inc. the most generous of the companies declares a $200,000 cash dividend on April 1st, 2020. The company has 10,000 shares of $5 par common stock with a market value of $25 per share and 20,000 shares of $10 par 8% preferred stock with a $60 market value per share. The preferred stock is cumulative, and dividends were not paid in 2019. The date of record is April 20th, and the payment date is April 29th. Make the necessary journal entry showing exactly which shareholders will receive how much of each dividend, also be sure to perform the correct entry on the correct date: April 1st, 2020 journal entry: April 20th, 2020 journal entry: April 29th, 2020 journal entry:
In: Accounting
Champion Incorporated is a Canadian company that manufactures steel. On January 2, 2020, Champion purchased a building for $25,000,000 that it will use for manufacturing its products. The building has a useful life of 20 years with no estimated residual value. To comply with regulatory code, the government requires Champion to clean up the property on which the building is located at the end of the building’s useful life. Champion estimates that the clean up will cost $2,200,000. Assume that the clean up costs relate entirely to the purchase of the building, not to operations over the next 20 years.
The company’s discount rate is 5%. Champion adheres to IFRS and has a December 31 year end. Champion uses the straight-line method to depreciate all its buildings.
Required:
Prepare journal entries to record each of the following:
In: Finance
Cansela Corporation uses a periodic inventory system and the LIFO method to value its inventory. The company began 2018 with inventory of 6,100 units of its only product. The beginning inventory balance of $87,200 consisted of the following layers: 2,600 units at $12 per unit = $ 31,200 3,500 units at $16 per unit = 56,000 Beginning inventory $ 87,200 During the three years 2018–2020, the cost of inventory remained constant at $18 per unit. Unit purchases and sales during these years were as follows: Purchases Sales 2018 19,000 20,000 2019 25,000 27,500 2020 21,000 22,000 Required: 1. Calculate cost of goods sold for 2018, 2019, and 2020. 2. Disregarding income tax, determine the LIFO liquidation profit or loss, if any, for each of the three years. 3. Determine the effects of LIFO liquidation on cost of goods sold and net income for 2018, 2019, and 2020. Cansela’s effective income tax rate is 30%.
In: Accounting
Problem 16-5 Change in tax rate; record taxes for four years [LO16-1, 16-4, 16-5]
The DeVille Company reported pretax accounting income on its
income statement as follows:
| 2018 | $ | 405,000 | |
| 2019 | 325,000 | ||
| 2020 | 395,000 | ||
| 2021 | 435,000 | ||
Included in the income of 2018 was an installment sale of property
in the amount of $52,000. However, for tax purposes, DeVille
reported the income in the year cash was collected. Cash collected
on the installment sale was $20,800 in 2019, $26,000 in 2020, and
$5,200 in 2021.
Included in the 2020 income was $21,000 interest from investments
in municipal bonds.
The enacted tax rate for 2018 and 2019 was 30%, but during 2019 new
tax legislation was passed reducing the tax rate to 25% for the
years 2020 and beyond.
Required:
Prepare the year-end journal entries to record income taxes for the
years 2018–2021. (If no entry is required for a transaction/event,
select "No journal entry required" in the first account field.)
In: Accounting