In: Mechanical Engineering
Research and Development Costs
Cressman Company incurred R&D costs for various projects in 2019 as follows:
| Materials used for research | $ 250,000 |
| Materials used for development | 160,000 |
| Equipment acquired that will have alternative uses in
future research projects for 4 years |
2,000,000 |
| Personnel costs of employees involved in research | 600,000 |
| Personnel costs of employees involved in development | 400,000 |
| Consulting fees paid to outsiders for research | 30,000 |
| Consulting fees paid to outsiders for development | 100,000 |
| Indirect costs reasonably allocable for research | 150,000 |
| Indirect costs reasonably allocable for development | 60,000 |
Required:
1. What is the amount of Cressman's R&D expenses for 2019 if it uses U.S. GAAP?
| CRESSMAN COMPANY | |
| 2019 Expense Calculations | |
| U.S. GAAP | |
| Materials used in R&D projects | $ |
| Depreciation expense on equipment (straight-line) | |
| Personnel costs | |
| Consulting fees | |
| Indirect costs | |
| $ | |
2. How would your answer change if Cressman uses IFRS? Assume that the company can demonstrate that the projects are expected to generate future economic benefits.
| CRESSMAN COMPANY | |
| 2019 Expense Calculations | |
| IFRS | |
| Materials used in research projects | $ |
| Depreciation expense on equipment (straight-line) | |
| Personnel costs | |
| Consulting fees | |
| Indirect costs | |
| $ | |
| Materials used in development projects | $ |
| Personnel costs | |
| Consulting fees | |
| Indirect costs | |
| $ | |
In: Accounting
In: Finance
|
Bracy Company acquired a new piece of construction equipment on January 1, 2015, at a cost of $141,000. The equipment was expected to have a useful life of 14 years and a residual value of $22,000 and is being depreciated on a straight-line basis. On January 1, 2016, the equipment was appraised and determined to have a fair value of $153,690, a salvage value of $22,000, and a remaining useful life of thirteen years. |
| a. |
Determine the amount of depreciation expense that Bracy should recognize in determining net income in 2015, 2016, and 2017 and the amount at which equipment should be carried on the December 31, 2015, 2016, and 2017 balance sheets using (1) U.S. GAAP and (2) IFRS. In measuring property, plant, and equipment subsequent to acquisition, Bracy uses the revaluation model in IAS 16. |
| Determine the adjustments that Bracy would make in 2015, 2016, and 2017 to reconcile net income and stockholders’ equity under U.S. GAAP to IFRS. (If there is no reconciliation adjustment select "No adjustment is required to". Input all values as positive numbers. |
In: Accounting
Problem Solving: Please answer the following problems showing your solutions, Double Rule and Encircle Final Answers. This must be done thru your handwriting placed in a Bond Paper. THANKYOU!!!
1. On July 1, 2019 J Corp acquired a machinery worth Php 2,500,000 from D Co. Term of the contract calls for a downpayment of Php 500,000 and signing a 2 year 10% note payable for the balance. Interest is payable quarterly. The existing loan agreement does not carry a provision to refinance. During September, J Corp was experiencing financial difficulty due to COVID-19 and was unable to pay the periodic interest. a. What amount of current liability should J Corp report in its December 31, 2019 balance sheet assuming D Co. agreed at balance sheet date not to demand payment as a consequence of the breach? b. What amount of current liability should J Corp report in its December 31, 2019 balance sheet assuming D Co. agreed to provide a grace period ending at least twelve months to rectify the breach?
2. A truck owned and operated by B Company was involved in an accident with an auto driven by Julia on January 12, 2019. B Company received notice on April 24, 2019 of a lawsuit for Php 800,000 damages for a personal injury suffered by Julia. B Company counsel believes it is reasonably possible that Julia will be successful against the company for an estimated amount in the range between Php 100,000 and Php 400,000. No amount within this range is a better estimate of potential damages than any other amount. It is expected that the lawsuit will be adjudicated in the latter part of 2020. What amount of loss should B Company accrue at December 31, 2019?
3. In November and December of 2020, adventure Company received Php 792,000 for 1,000, 3 year subscriptions at Php 264 per issue per year, starting with the January 2006 issue. adventure elected to include the Php 792,000 in its 2020 income statement for tax purposes. What amount should advneture report in its 2020 balance sheet as unearned subscription revenue?
4. In November and December 2020, Sweet Company, a newly organized magazine publisher, received Php 72,000 for 1,000 three year subscriptions at Php 24,000 per year, starting with the November 2020 issue of the magazine. Sweet elected to include the entire Php 72,000 in its 2020 income tax return. How much should Sweet report in its 2020 balance sheet as unearned subscriptions?
5. During 2019, S Company sold 500,000 boxes of hotcakes under a new sales promotional program. Each box contains one coupon, which when submitted with Php 16, entitles the customer to a baking pan. S Company pays Php 20 per pan and Php 2 handling and shipping. S Company estimates that 80% of the coupons will be redeemed, even though only 300,000 coupons had been processed during 2019. What amount should S Company report as liability for unredeemed coupons at December 31, 2019?
In: Accounting
You are 30 years old today and are considering studying for an MBA. You have just received your annual salary of $50,000 which you expect will grow by 3% per year. MBA’s typically earn $80,000 upon graduation with salaries growing by 4% per year. The MBA program you’re considering is a full-time, 2-year program that costs $30,000 per year, payable at the end of each study year. You want to retire on your 65th birthday. The relevant discount rate is 8%. Is it worthwhile for you to quit your job in order to earn an MBA? (Ignoring taxes.)
Use Excel formulas.
In: Finance
The given data represent the total compensation for 10 randomly selected CEOs and their company's stock performance in 2009. Analysis of this data reveals a correlation coefficient of r=-0.2000. What would be the predicted stock return for a company whose CEO made $15 million? What would be the predicted stock return for a company whose CEO made $25 million?
Compensation ($ millions) Stock Return (%)
26.81 6.16
12.66 29.92
19.14 31.49
13.11 79.34
11.99 -8.35
11.41 2.22
26.23 4.08
14.61 10.81
17.12 4.13
14.18 11.88
What would be the predicted stock return for a company whose CEO made $15 million? _________% (Type an integer or decimal rounded to one decimal place as needed.)
In: Statistics and Probability
Samuel company, a toy retailer, is publicly listed in Hong Kong. The company is thinking of investing in natural gas wells in Russia. This would be a five-year project. The CEO of the company has employed you as a financial manager for this investment project. Explain to the CEO the major considerations, methods and challenges in determining the required rate of return for this project. Explain if there would be any difference in the estimation of required rate of return for a private firm or a publicly traded firm. Explain also whether it is important to consider the issue of operating leverage in analysing this project. The CEO says “ The cost of capital depends on the source of the money, not the risk of the project.” Do you agree? Explain and illustrate your explanation with example. (limit your answer to 450 words)
In: Finance
According to John Connors, former CFO of Microsoft, how does a company decide whether to increase its dividend, have a special dividend, or repurchase its stock to return capital to investors? Be DETAILED in your answer
In: Finance
Below are Sullivan Corp.'s comparative balance sheet accounts at December 31, 2020 and 2019,
|
|
2020 |
|
2019 |
|
Increase |
|
|
Cash |
$ 815,000 |
$ 700,000 |
||||
|
Accounts receivable |
1,128,000 |
1,168,000 |
||||
|
Inventory |
1,850,000 |
1,715,000 |
||||
|
Property, plant, and equipment |
3,307,000 |
2,967,000 |
||||
|
Accumulated depreciation |
(1,165,000) |
(1,040,000) |
||||
|
Investment in Myers Co. |
310,000 |
275,000 |
||||
|
Loan receivable |
250,000 |
— |
||||
|
Total assets |
$6,495,000 |
$5,785,000 |
||||
|
Accounts payable |
$1,015,000 |
$ 955,000 |
||||
|
Income taxes payable |
30,000 |
50,000 |
||||
|
Dividends payable |
80,000 |
100,000 |
||||
|
Lease liability |
400,000 |
— |
||||
|
Common stock, $1 par |
500,000 |
500,000 |
||||
|
Paid-in capital in excess of par - common |
1,500,000 |
1,500,000 |
||||
|
Retained earnings |
2,970,000 |
2,680,000 |
||||
|
Total liabilities and stockholders' equity |
$6,495,000 |
$5,785,000 |
||||
Additional information:
2020 2019
$80,000 $100,000
Declared 12/15/2020 12/15/2019
Paid 2/28/2021 2/28/2020
Required: Prepare a statement of cash flows for Sullivan Corp. for the year ended December 31, 2020, using the indirect method.
In: Accounting