1. In 2010, LinkedIn reported trade payable obligations totaling $10.8 million in other accrued expenses within accrued liabilities instead of accounts payable. In 2011, note 2 in the 10-K financial statements described the use of accrued liabilities instead of accounts payable as a classification. Do you believe LinkedIn’s accounting qualifies as a financial shenanigan?

2. Tineseltown Construction just received a $2 billion contract to construct a modern football stadium in the City of Industry, located in southern California, for a new National Football League (NFL) team called the Los Angeles Devils of Industry. The company estimates that it will cost $1.5 billion to construct the stadium. Explain how Tineseltown can make revenue recognition decisions each year that enable it to manage earnings over the three-year duration of the contract.

The action plan in the Boston Bike Network Plan anticipates spending $30 million in construction costs for work on establishing and renovating 100 miles of bike lanes in the city. The overall goal of the Boston Climate Action Plan is to reduce vehicle miles traveled (VMT) by 5.5% from 2005 levels, which would result in an estimated reduction of 68 thousand tons of CO2 per year. Assume the bike paths and VMT effects last for 30 years, the value of CO2 reduction is $40 per ton (based on another study), and the discount rate is 5%. In years 10 and 20, 10% of the original capital cost is spent for maintenance.

a. Calculate the B/C ratio, net present value, and internal rate of return for the bike path network.

1.     Eastman Publishing Company is considering publishing an electronic textbook on spreadsheet applications for business. The fixed cost of manuscript preparation, textbook design, and Web site construction is estimated to be $160,000. Variable processing costs are estimated to be $6 per book. The publisher plans to sell access to the book for $46 each. Eastman has created a predictive model that estimates demand as a function of price. The predictive model is demand = 4000-6*p where p is the price of the e-book.

Build a spreadsheet model to calculate the profit/loss for a given price.

Use goal seek to compute the price that results in break even

Use a data table that varies price from $50 to $400 increment of $25 to find the price that maximizes profit.

***Please show the formula in Excel.

A specialty concrete mixer used in construction was purchased for $300,000 7 years ago. Its annual O&M costs are $105,000. At the end of the 8-year planning horizon, the mixer will have a salvage value of $5,000. If the mixer is replaced, a new mixer will require an initial investment of $375,000. At the end of the 8-year planning horizon, it will have a salvage value of $45,000. Its annual O&M cost will be only $40,000 due to newer technology. Analyze this using an EUAC measure and a MARR of 15% to see if the concrete mixer should be replaced if the old mixer is sold for its market value of $65,000.

Part a

Use the cash flow approach (insider’s viewpoint approach).

Show the EUAC values used to make your decision:

1- Existing concrete mixer: $ ??????????????

2- New concrete mixer: $ ??????????????

A specialty concrete mixer used in construction was purchased for $290,000 7 years ago. It is MACRS-GDS 5-year property. Its annual O&M costs are $80,000. At the end of an 8-year planning horizon, the mixer will have a salvage value of $6,500. If the mixer is replaced, a new mixer will require an initial investment of $375,000, and at the end of the 8-year planning horizon, the new mixer will have a salvage value of $45,000. Its annual O&M cost will be only $40,000 due to newer technology. Use an EUAC measure, a tax rate of 40 percent, and an after-tax MARR of 9 percent to perform an after-tax analysis to see if the concrete mixer should be replaced if the old mixer is sold for its market value of $55,000.

In each of the following scenarios, prepare journal entries, as necessary, or give proper accounting recognition. For each, tell why you made an entry or accounting recognition or why you did not.

Identify the appropriate fund to account for construction-type special assessments.

Big City provides a defined benefit pension plan for employees of the city water department, an enterprise fund. Assume that the service cost component is $420,000, and interest on the pension liability is $380,000 for the year. Actual returns on plan assets for the year were $300,000, while the projected level of earnings on plan investments was $360,000. This difference is to be amortized over a five-year period, beginning this year. Finally, assume the City is amortizing a deferred inflow resulting from a change in plan assumptions from a prior year in the amount of $10,000 per year.

As a financial analyst for Muffin Construction, you have been asked to recommend the method of financing the acquisition of new equipment needed by the firm. The equipment has a useful life of 8 years. If purchased, the equipment, which costs $700,000 will be depreciated using straight-line depreciation to a zero book value. If purchased, the needed funds can be borrowed at a 10% pretax annual rate. Muffin’s weighted after-tax cost of capital is 12%. The actual salvage value at the end of 8 years is expected to be $50,000. Muffin’s marginal tax rate is 40%. Annual, beginning of year lease payments would be $160,000.

Compute the Net Advantage to Leasing; and Should Muffin lease or own the equipment?

Please show your all work! Thank you so much~

The following transactions are unrelated:
a) Equipment listed at $12,000 was purchased at terms of 4%/10, net 30. To take
advantage of the discount, the company borrowed $9,000 of the purchase price by
issuing a one-year 11 percent note that was repaid with interest at maturity.
b) Equipment with a list price of $5,000 was purchased under the terms of 2%/10,
net 30. Payment was made 20 days after purchase.
c) A company paid $260,000 for land upon which to build a new facility. The cost to
raze and remove an old building on the site of the newly proposed facility was
$50,000. Usable fixtures from the old building were sold for $10,000. The
company paid $3,000 to the architect that designed the new building, $30,000 for
excavation of the basement, and $420,000 to a contractor for construction of the
building.
Required -
Prepare journal entries for the above transactions.

Cardiff and Delp is an architectural firm that provides services for residential construction projects. The following data pertain to a recent reporting period.

Activities Costs

Design department Client consultation 1,900 contact hours $ 266,000

Drawings 1,400 design hours 76,300

Modeling 44,000 square feet 30,800

Project management department

Supervision 1,200 days $ 192,000

Billings 11 jobs 8,600

Collections 11 jobs 19,340

Required: 1. & 2. Using ABC, compute the firm's activity overhead rates. Form activity cost pools where appropriate. Assign costs to a 9,200 square foot job that requires 550 contact hours, 344 design hours, and 145 days to complete. (Round activity rate answers to 2 decimal places.)