Part A:

Rainbow City had the following transactions during the year.

Required: Prepare the necessary journal entries in the appropriate governmental fund general journal and the government-wide governmental activities general journal for each of the following Rainbow City transactions.

1. The city received a donation of land that is to be used by Parks and Recreation to develop a public park. At the time of the donation, the land had an acquisition value of $4,800,000 and was recorded on the donor’s books at a historical cost of $3,800,000.
2. The Public Works Department sold machinery with a historical cost of $35,100 and accumulated depreciation of $28,700 for $5,000. The machinery had originally been purchased with special revenue funds.
3. A car was leased for the mayor’s use. The first payment was $800, and the present value of the remaining lease payments was $24,000. (Note: the initial cash payment was made by the General Fund.)
4. During the current year, a Capital Projects Fund completed a new public safety building that was started in the prior year. The total cost of the project was $9,720,000. Financing for the project came from a $9,000,000 bond issue that was sold in the prior year and from a $720,000 federal capital grant received in the current year. Current expenditures for the project totaled $1,176,000. The full cost is attributed to the building because it was constructed on city-owned property.
5. The city records a half year of straight-line depreciation on capital assets placed in service during the year. The building in Item 4 has an estimated 30-year life with no salvage value.
6. Due to technological developments, the city determined that the service capacity of some of the technology equipment used by general government has been impaired. The calculated impairment loss due to technology obsolescence was $1,210,000.

Part B:

In the current year, the building occupied by Surf Beach City’s Culture and Recreation Department suffered severe structural damage as a result of a hurricane. It had been 48 years since a hurricane had hit the Rainbow City area, although hurricanes in Rainbow City’s geographic area are not uncommon. The building had been purchased 10 years earlier at a cost of $2,000,000 and had accumulated depreciation of $500,000 as of the date of the hurricane. Based on a restoration cost analysis, city engineers estimate the impairment loss at $230,000; however, the city expects during the next fiscal year to receive insurance recoveries of $120,000 for the damage.

Requirements:

1. Should the estimated impairment loss be reported as an extraordinary item? Explain.
2. Record the estimated impairment loss in the journal for governmental activities at the government-wide level.
3. How should the insurance recovery be reported in the following fiscal year? (You do not need to provide journal entries.)
   • Submit your responses to Part A in Excel format. The answers to Part B can be included on the spreadsheet or be submitted in a Word document.
   • Show calculations for all questions.
   • Support writing portion of the assignment, with credible sources.
   • Use terms, evidence, and concepts from class readings, including professional business language.
   • Review the week’s CT Assignment grading rubric for more information on expectations and how you will be graded.

Required information

[The following information applies to the questions displayed below.]

Washington County’s Board of Representatives is considering the construction of a longer runway at the county airport. Currently, the airport can handle only private aircraft and small commuter jets. A new, long runway would enable the airport to handle the midsize jets used on many domestic flights. Data pertinent to the board’s decision appear below.

In addition to the preceding data, two other facts are relevant to the decision. First, a longer runway will require a new snowplow, which will cost $120,000. The old snowplow could be sold now for $12,000. The new, larger plow will cost $8,000 more in annual operating costs. Second, the County Board of Representatives believes that the proposed long runway, and the major jet service it will bring to the county, will increase economic activity in the community. The board projects that the increased economic activity will result in $80,000 per year in additional tax revenue for the county.

In analyzing the runway proposal, the board has decided to use a 10-year time horizon. The county’s hurdle rate for capital projects is 14 percent.

Use Appendix A for your reference. (Use appropriate factor(s) from the tables provided.)

Required:

1. Compute the initial cost of the investment in the long runway.

2. Compute the annual net cost or benefit from the runway.

3-a. Determine the IRR on the proposed long runway. (Round your answer to the nearest whole percent.)

3-b. Should it be built considering IRR?

In analyzing the runway proposal, the board has decided to use a 10-year time horizon. The county’s hurdle rate for capital projects is 14 percent. The County Board of Representatives believes that if the county conducts a promotional effort costing $28,000 per year, the proposed long runway will result in substantially greater economic development than was projected originally. However, the board is uncertain about the actual increase in county tax revenue that will result.

Required:

Suppose the board builds the long runway and conducts the promotional campaign. What would the increase in the county’s annual tax revenue need to be in order for the proposed runway’s internal rate of return to equal the county’s hurdle rate of 14 percent? (Round intermediate and final answer to the nearest dollar amount.)

I send you the entire question but only the last part I need help with. I got all the other parts correct ,but you need to see everthing to follow . Please show clear detail working. What would be the increase in the county annual revenue need to be be in order for the proposed runway's internal rate of return to equal to the hurdle rate of 14%?

is prepaid lease a fixed cost or sunk cost?

Phillip’s full-time real estate business is named “Phillip Dunphy Realty.” His ­business is located at 645 Grove Street, Los Angeles, California 90018, and his ­employer identification number is 93-3488888. Phillip’s gross receipts during the year were $730,000. Phillip uses the cash method of accounting for his business. Phillip’s business expenses are as follows: 1)Advertising $ 5,000 2) Professional dues 800 3)Professional journals 200 4)Employee wages 48,000 5)Insurance on office contents 1,120 6) Accounting services 2,100 7)Miscellaneous office expense 500 8)Utilities and telephone 3,360 9)Payroll taxes 3,600 10)Depreciation ? to be calculated On March 20, Phillip moved his business out of the old offices at 1103 Allium Lane into a newly constructed and equipped office on Grove Street. Phillip sold the old office building and all its furnishings. Phillip’s expenditures for the new office building are as follows: Date equired Asset Cost 3/20 Land $ 300 000 3/20 Office bulding $ 2 500 000 3/20 Furniture $ 200 000 4/1 Computer system $ 350 000 6/1 Art works $ 150 000 Phillip computes his cost recovery allowance using MACRS. He would like to use the §179 immediate expensing, but he has elected to not claim any bonus depreciation. Phillip has never claimed §179 or bonus depreciation before. The assets Phillip sold on March 20 are as follows: Date Acquired Asset Sale price Original Cost Accumulated Depreciation as of beginning of the year 5/1/11 Office building $ 940 000 $ 900 000 $ 129 825 5/1/11 Land $ 200 000 $ 100 000 0 7/1/11 Furniture $ 50 000 $ 239 000 $ 206 998 8/13/13 Furniture $ 10 000 $ 324 000 $ 222 782 4/12/14 Office Equipment $100 000 $120 000 $ 67 524 5/13/15 Computers $30 000 $50 000 $ 10 000 Phillip has never sold any assets relating to his business before this transaction.

Phillip and Claire received $300 of interest from State Savings Bank on a joint ­account. They also received a qualified dividend of $395 on jointly owned stock in Xila Corporation.

The Philip and Claire Dunphy sold 60 shares of Fizbo Corporation common stock on September 3 for $65 a share (minus a $50 total commission). The Dunphy purchased the stock on November 8, 2016, for $90 a share. They also sold a painting for $13,000 on March 1. Claire purchased the painting for $20,050 on September 1, 2010, as an investment.

The Dunphys filed their 2016 federal, state, and local returns on April 13, 2017. They paid the following additional 2016 taxes with their returns: federal income taxes of $630, state income taxes of $250, and city income taxes of $75.

Use the following information to complete Phillip and Claire Dunphy’s 2017 ­federal income tax return, any required forms, and schedules.

4. Cost of debt versus cost of equity. Because the cost of debt is lower than the cost of equity, firms must increase their use of debt as much as possible to increase the firm’s value. What is your answer to this argument?

Explain and draw total cost, average cost, Marginal cost for decreasing returns to scale.

Capital component weights, cost of debt, cost of preferred stock, and cost of common equity.

Be sure to use 4 decimal places.

Current assets: 3,100

Property, plant and equipment: 3,400

Total assets: 6,500.

Current liablities: 1,500

Long term debt: 1,750

Preferred stock, $100 par: 500

Common stock, no par: 1,250

Retained earnings: 1,500

Total liabilities and equities: 6,500

Growth rate 7.5%

Coupon on new bonds: 7.75%

Corporate tax rate: 25%

Dividend on preferred: 8%

Price of common stock: $24.00

Price of $100 par value preferred: $75.00

Anticipated common dividend: $1.56

Flotation cost on preferred: $4.00

Flotation cost on common: $2.50

How to find the cost of debt, cost of preferred stock, cost of common equity, capital structure, and the weighted average cost of capital for a publicly traded company like Costco or Amazon.

a) What are the similarities and differences between prime cost, product cost and period cost. b) What are the similarities and differences between fixed costs, variable costs.