Ingrid Ilyasova is considering the purchase of the common stock of the Irish Indigo Inc. The most recent dividend paid by the company was $3.78 per share. This dividend is expected to increase at a constant rate of 5.25% indefinitely. Ingrid uses the CAPM to calculate her required rate of return. The current rate on U.S. Treasury securities is 2.78% and the expected rate of return on the stock market going forward is 16.22%. If the beta of the company is 1.17, what is the maximum amount that Ingrid would pay for a share of stock for this company ?

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Use the Internet and/or Strayer Learning Resource Center to research a U.S.-based company that manufactures technology products. Recommend one (1) approach that your selected company can take in order to lower the direct labor costs of technology products while remaining competitive with global markets. Provide a rationale for your recommended approach. Imagine that you are a Chief Financial Officer (CFO) of a company. Recommend two (2) actions that you could take regarding the company’s supply chain to reduce manufacturing costs of direct materials.

In the liabilities section of its 2013 balance sheet, Bank of America reported "noninterest-bearing deposits" in U.S. offices of over $373 million. Bank of America is a very large banking company.

In the liabilities section of its 2013 balance sheet, Newmont Mining Corporation reported "reclamation and remediation liabilities" of more than $1.5 billion.scuss what you believe the nature of these liabilities are and how each company might pay them off. In thinking about your response, think about the industry that each company operates in.

What are the Journal Entries for March thru December?

January

1. On January 1^st, The Board of Directors issued 250,000 additional shares (par of $.25) to raise capital for the New Year. Assume no change in price from Dec 31, 2018.

2. Purchased a truck for $240,000 cash on the 1^st of January. The truck will be depreciated over a 5 year period. You decide to use the 200% declining-balance depreciation method because it is determined that the truck will be more productive when it is newer. The truck has an estimated salvage value of $25,000.[Adjusting Entry Required]

3. Purchased new office equipment for $97,000 with cash from California Furniture on January 1, 2019. The new furniture will be depreciated over a ten-year period on a straight-line basis. The cabinet has an estimated salvage value of $5,000.[Adjusting Entry Required]

4. On January 1^st, a 5 year, $138,000 long-term note payable was taken from a local bank.

5. On January 5^th you receive payment from interest earned and accrued in 2018.

6. On January 22^nd you purchased 8,500 additional units of inventory at a cost of $76.50 per unit. You paid 45% in cash and purchased the remainder on account.

7. On January 25^th you pay $289,000 cash toward your accounts payable.

February

8. Paid cash for $52,300 worth of radio advertising on February 1^st. This gives you radio advertising space until January 31^st, 2020.[Adjusting Entry Required]

9. February 13^th you collect $356,000 of account payments from customers.

March

10. Purchased a parcel of land on March 1, 2019 for $990,000 by paying $480,000 in cash and signing a short-term note payable with the seller for $510,000. You must repay the $510,000 in exactly one year on March 1, 2020. You agree to pay the seller 5 percent interest (annual rate) on a quarterly basis (June 1, September 1, December 1, 2019, and March 1, 2020).[Adjusting Entry Required]

11. On March 19^th you purchased $29,000 of office supplies from Super Office Supplies with cash.

12. On March 20^th you received a payment of $41,000 for 200 hours of service to be performed in the future.

April

13. April 21^st, your customers bought 15,000 units of your product for $122 per unit (you decide what your company sells). The cost of this product is determined by the method of inventory valuation used by your company. Customers paid you 60% in cash and the remainder was on account.

14. On April 27^nd you purchased 9,250 units at a cost of $78.5 per unit. You paid 65% in cash and purchased the remainder on account.

15. On April 29^th you pay $546,000 cash toward your accounts payable.

May

16. On May 1^st you pay all dividends owed to your owners.

June

17. Leased additional warehouse space from Leasing Solutions for two years on June 1^st due to expiration of the previous rental contract. $105,000 cash was paid for the new contract on this date which covers the rental fee for two years. There is no value left in the previous contract. [Adjusting Entry Required]

18. Wage expenses from January 1 – June 30 are $506,000. Pay this in full including your beginning balance in wages payable.

19. On June 19^th, $134,000 of prepaid insurance was used.

20. On June 26^th a customer that previously bought your product on account has filed for bankruptcy. He owed you $47,500. You expect to collect $0.

July

21. Your company issued 1,000, 2.9% bonds (face value of each bond is $1,000) at 96.8229 on July 1^st, 2019. The bonds are due on July 1, 2024, with interest payable each January 1 and July 1. The market rate at the time of the bond issuance was 3.6 Percent. Use the effective-interest method to calculate both the interest expense and the amortization of the bond discount when each interest payment is made.[Adjusting Entry Required]

August

22. Purchased a Patent (Intangible Asset) for $97,000 on August 1^st. The patent will be amortized over a 10 year period on a straight-line basis.[Adjusting Entry Required]

23. On August 6^th, a piece of land that was originally purchased for $1,150,000 was sold for $2,000,000 cash.

24. August 15^th, your customers bought 9,000 units of your product at $128 per unit. The cost of this product is determined by the method of inventory valuation used by your company. Customers paid you 60% in cash and the remainder was on account.

25. Received on August 25^th a $164,000 cash payment from a customer paying on their account.

September

26. $49,000 cash was paid for an investment in Company X's marketable securities on September 3^rd.   

27. On September 12^th, a piece of equipment was sold for $760,000 cash. The equipment was originally purchased for $530,000. At the time of the sale, it had been depreciated by $75,000.

28. Purchased and used $11,900 worth of fuel for the delivery truck on September 18^th.

October

29. Your top sales officer met with a new customer to discuss a potential future contract. She informs you that the customer is considering signing the $280,000 deal, which would become effective February 2020.

30. On October 1^st, you purchased 11,250 units at the increased price of $80 per unit. The purchase was made on account.

31. On October 10^th you paid your supplier $95,000 cash for inventory purchased on account.

November

32. November 1^st, the CEO, in an effort to adjust ratios, ordered the repurchasing of the company’s own stock. The quantity of stock repurchased was 150,000 shares.

33. Purchased a two-year building insurance policy on November 1^st for $391,000 cash.[Adjusting Entry Required]

34. On November 17^th a customer pays you $736,000 for work that you will finish in January of 2020.

35. November 19^th, your customers bought 8,650 units of your product at $136 per unit. The cost of this product is determined by the method of inventory valuation used by your company. Customers paid you 45% in cash and the remainder was on account.

36. An employment contract is signed with a new regional manager. You have offered him $190,000 per year. He will not begin working for the company until March 2020.

December

37. Wages earned from July 1^st through December 31^st was $552,000. Wages earned between Dec. 15^thand Dec 31^st amounting to $34,000 was not paid this until Jan 7th.

38. At the end of the year, $54,000 cash was paid to the local bank for the long-term note payable taken out on January 1, 2019. $46,000 of this was applied to the loan principal. The remaining amount was the accumulated interest due for 2019.

39. On December 31^st, the marketable (trading) securities you purchased on September 3, 2019 transaction now has a fair market value of $35,000.

40. On December 31^st, $579,000 depreciation expense for the year was calculated for equipment purchased before January 1, 2019.

41. On December 31^st, you declare dividends of $.24 per share to be paid at a later date.

42. On December 31^st, the utility bill was paid for the year. The amount was $54,000 and you paid in cash.

43. On December 31^st, you pay in cash recurring interest on the long-term note acquired prior to the year 2017. HINT: See prior year financial statements.

44. On December 31^st, your company earned interest on the average 2019 cash balance which will be paid January 5^th, 2020. The average interest rate for the year was 4.0%. Note: Compute the average cash using only the beginning and ending balance.

45. By December 31^st, 147 of the prepaid service hours from March 20, 2019 were completed.

46. A count of office supplies indicated that $26,800 of office supplies had been used by December 31^st.

47. Since the inception of your company, you have been able to collect 89% of your ending accounts receivable balance from customers that bought your product on account. Based on this information, adjust your allowance for bad debt account. NOTE: Use your 2019 ending accounts receivable balance to make this calculation

Prepare Journal Entries for the following below

January

1. On January 1^st, The Board of Directors issued 250,000 additional shares (par of $.25) to raise capital for the New Year. Assume no change in price from Dec 31, 2018.

2. Purchased a truck for $240,000 cash on the 1^st of January. The truck will be depreciated over a 5 year period. You decide to use the 200% declining-balance depreciation method because it is determined that the truck will be more productive when it is newer. The truck has an estimated salvage value of $25,000.[Adjusting Entry Required]

3. Purchased new office equipment for $97,000 with cash from California Furniture on January 1, 2019. The new furniture will be depreciated over a ten-year period on a straight-line basis. The cabinet has an estimated salvage value of $5,000.[Adjusting Entry Required]

4. On January 1^st, a 5 year, $138,000 long-term note payable was taken from a local bank.

5. On January 5^th you receive payment from interest earned and accrued in 2018.

6. On January 22^nd you purchased 8,500 additional units of inventory at a cost of $76.50 per unit. You paid 45% in cash and purchased the remainder on account.

7. On January 25^th you pay $289,000 cash toward your accounts payable.

February

8. Paid cash for $52,300 worth of radio advertising on February 1^st. This gives you radio advertising space until January 31^st, 2020.[Adjusting Entry Required]

9. February 13^th you collect $356,000 of account payments from customers.

March

10. Purchased a parcel of land on March 1, 2019 for $990,000 by paying $480,000 in cash and signing a short-term note payable with the seller for $510,000. You must repay the $510,000 in exactly one year on March 1, 2020. You agree to pay the seller 5 percent interest (annual rate) on a quarterly basis (June 1, September 1, December 1, 2019, and March 1, 2020).[Adjusting Entry Required]

11. On March 19^th you purchased $29,000 of office supplies from Super Office Supplies with cash.

12. On March 20^th you received a payment of $41,000 for 200 hours of service to be performed in the future.

April

13. April 21^st, your customers bought 15,000 units of your product for $122 per unit (you decide what your company sells). The cost of this product is determined by the method of inventory valuation used by your company. Customers paid you 60% in cash and the remainder was on account.

14. On April 27^nd you purchased 9,250 units at a cost of $78.5 per unit. You paid 65% in cash and purchased the remainder on account.

15. On April 29^th you pay $546,000 cash toward your accounts payable.

May

16. On May 1^st you pay all dividends owed to your owners.

June

17. Leased additional warehouse space from Leasing Solutions for two years on June 1^st due to expiration of the previous rental contract. $105,000 cash was paid for the new contract on this date which covers the rental fee for two years. There is no value left in the previous contract. [Adjusting Entry Required]

18. Wage expenses from January 1 – June 30 are $506,000. Pay this in full including your beginning balance in wages payable.

19. On June 19^th, $134,000 of prepaid insurance was used.

20. On June 26^th a customer that previously bought your product on account has filed for bankruptcy. He owed you $47,500. You expect to collect $0.

July

21. Your company issued 1,000, 2.9% bonds (face value of each bond is $1,000) at 96.8229 on July 1^st, 2019. The bonds are due on July 1, 2024, with interest payable each January 1 and July 1. The market rate at the time of the bond issuance was 3.6 Percent. Use the effective-interest method to calculate both the interest expense and the amortization of the bond discount when each interest payment is made.[Adjusting Entry Required]

August

22. Purchased a Patent (Intangible Asset) for $97,000 on August 1^st. The patent will be amortized over a 10 year period on a straight-line basis.[Adjusting Entry Required]

23. On August 6^th, a piece of land that was originally purchased for $1,150,000 was sold for $2,000,000 cash.

24. August 15^th, your customers bought 9,000 units of your product at $128 per unit. The cost of this product is determined by the method of inventory valuation used by your company. Customers paid you 60% in cash and the remainder was on account.

25. Received on August 25^th a $164,000 cash payment from a customer paying on their account.

September

26. $49,000 cash was paid for an investment in Company X's marketable securities on September 3^rd.   

27. On September 12^th, a piece of equipment was sold for $760,000 cash. The equipment was originally purchased for $530,000. At the time of the sale, it had been depreciated by $75,000.

28. Purchased and used $11,900 worth of fuel for the delivery truck on September 18^th.

October

29. Your top sales officer met with a new customer to discuss a potential future contract. She informs you that the customer is considering signing the $280,000 deal, which would become effective February 2020.

30. On October 1^st, you purchased 11,250 units at the increased price of $80 per unit. The purchase was made on account.

31. On October 10^th you paid your supplier $95,000 cash for inventory purchased on account.

November

32. November 1^st, the CEO, in an effort to adjust ratios, ordered the repurchasing of the company’s own stock. The quantity of stock repurchased was 150,000 shares.

33. Purchased a two-year building insurance policy on November 1^st for $391,000 cash.[Adjusting Entry Required]

34. On November 17^th a customer pays you $736,000 for work that you will finish in January of 2020.

35. November 19^th, your customers bought 8,650 units of your product at $136 per unit. The cost of this product is determined by the method of inventory valuation used by your company. Customers paid you 45% in cash and the remainder was on account.

36. An employment contract is signed with a new regional manager. You have offered him $190,000 per year. He will not begin working for the company until March 2020.

December

37. Wages earned from July 1^st through December 31^st was $552,000. Wages earned between Dec. 15^th and Dec 31^st amounting to $34,000 was not paid this until Jan 7th.

38. At the end of the year, $54,000 cash was paid to the local bank for the long-term note payable taken out on January 1, 2019. $46,000 of this was applied to the loan principal. The remaining amount was the accumulated interest due for 2019.

39. On December 31^st, the marketable (trading) securities you purchased on September 3, 2019 transaction now has a fair market value of $35,000.

40. On December 31^st, $579,000 depreciation expense for the year was calculated for equipment purchased before January 1, 2019.

41. On December 31^st, you declare dividends of $.24 per share to be paid at a later date.

42. On December 31^st, the utility bill was paid for the year. The amount was $54,000 and you paid in cash.

43. On December 31^st, you pay in cash recurring interest on the long-term note acquired prior to the year 2017. HINT: See prior year financial statements.

44. On December 31^st, your company earned interest on the average 2019 cash balance which will be paid January 5^th, 2020. The average interest rate for the year was 4.0%. Note: Compute the average cash using only the beginning and ending balance.

45. By December 31^st, 147 of the prepaid service hours from March 20, 2019 were completed.

46. A count of office supplies indicated that $26,800 of office supplies had been used by December 31^st.

47. Since the inception of your company, you have been able to collect 89% of your ending accounts receivable balance from customers that bought your product on account. Based on this information, adjust your allowance for bad debt account. NOTE: Use your 2019 ending accounts receivable balance to make this calculation.

2) Level II ADRs are:

a. those that are listed on a U.S. Exchange and cannot raise new money in U.S.

b. none of the other answers

c. private placements by foreign firms in U.S. under Rule 144a

d. those that are listed on a U.S. Exchange & can raise new money in U.S. e. those that are not allowed to be listed on a U.S. Exchange

Managing Transaction Exposures Assume the following information: Spot rate: CHF/USD = 0.7142 90-day forward rate: CHF/USD = 0.7114 USD 90-day interest rate: 3.75% (APR) CHF 90-day interest rate: 5.33% (APR) The option data for July contracts is given the table below. Strike price (CHF/USD) Call Premium Put Premium 0.70 2.55¢ per CHF 1.42¢ per CHF 0.72 1.55¢ per CHF 2.4¢ per CHF

1-U.S. Company ABC, which exports to Switzerland, expects to receive CHF 450,000 in 90 days. Should Company ABC use currency derivatives to hedge transaction risk? If yes, which derivatives should Company ABC use? Please use a contingency graph to support your choices and computation. If no, please explain why (20 points).

2-U.S. Company XYZ, which imports Swiss watches, needs to pay CHF 750,000 in 90 days. Should Company XYZ use currency derivatives to hedge transaction risk? If yes, which derivatives should Company XYZ use? Please use a contingency graph to support your choices and computation. If no, please explain why (20 points).

Note that the time to pay option premium and time to exchange currencies are different. Please account for the opportunity costs/profit (time value of option premium).

Exercise 16-13

Nash Company issues 3,700 shares of restricted stock to its CFO, Dane Yaping, on January 1, 2020. The stock has a fair value of $116,000 on this date. The service period related to this restricted stock is 4 years. Vesting occurs if Yaping stays with the company for 4 years. The par value of the stock is $5. At December 31, 2021, the fair value of the stock is $155,000.

(a) Prepare the journal entries to record the restricted stock on January 1, 2020 (the date of grant), and December 31, 2021. (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.)

(b) On March 4, 2022, Yaping leaves the company. Prepare the journal entry to account for this forfeiture. (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.)

On January 1, 2020, Larkspur Company makes the two following acquisitions. 1. Purchases land having a fair value of $320,000 by issuing a 4-year, zero-interest-bearing promissory note in the face amount of $485,782. 2. Purchases equipment by issuing a 6%, 9-year promissory note having a maturity value of $360,000 (interest payable annually). The company has to pay 11% interest for funds from its bank.

(a) Record the two journal entries that should be recorded by Larkspur Company for the two purchases on January 1, 2020.

(b) Record the interest at the end of the first year on both notes using the effective-interest method. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 58,971. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

On January 1, 2020, Culver Company makes the two following acquisitions.

The company has to pay 10% interest for funds from its bank.

(Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 58,971. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)