1. Missing Statement Items, Available-for-Sale Securities

   Highland Industries Inc. makes investments in available-for-sale securities. Selected income statement items for the years ended December 31, Year 2 and Year 3, plus selected items from comparative balance sheets, are as follows:

   There were no dividends.

   Determine the missing items. If required, use the minus sign to indicate a net or operating loss, unrealized losses, or a credit balance in the valuation allowance account.

   Highland Industries Inc.
   Selected Income Statement Items
   For the Years Ended December 31, Year 2 and Year 3
   	Year 2	Year 3
   Operating Income (Loss)	$	$
   Gain (Loss) from Sale of Investments	4,980	(9,960)
   Net Income (Loss)	$	$(13,700)

   Highland Industries Inc.
   Selected Balance Sheet Items
   December 31, Year 1, Year 2, and Year 3
   	Dec. 31, Year 1	Dec. 31, Year 2	Dec. 31, Year 3
   Assets
   Available-for-Sale Investments, at Cost	$97,110	$84,660	$118,280
   Valuation Allowance for Available-for-Sale Investments	6,230	(7,470)
   Available-for-Sale Investments, at Fair Value
   Stockholders' Equity
   Unrealized Gain (Loss) on Available-for-Sale Investments			(8,720)
   Retained Earnings	$204,180	$288,840	$

Walsh Company manufactures and sells one product. The following information pertains to each of the company’s first two years of operations:

Variable costs per unit: Manufacturing: Direct materials $ 23 Direct labor $ 16 Variable manufacturing overhead $ 4 Variable selling and administrative $ 3 Fixed costs per year: Fixed manufacturing overhead $ 320,000 Fixed selling and administrative expenses $ 50,000 During its first year of operations, Walsh produced 50,000 units and sold 40,000 units. During its second year of operations, it produced 40,000 units and sold 50,000 units. The selling price of the company’s product is $56 per unit.

Required: 1. Assume the company uses variable costing: a. Compute the unit product cost for Year 1 and Year 2. b. Prepare an income statement for Year 1 and Year 2. 2. Assume the company uses absorption costing: a. Compute the unit product cost for Year 1 and Year 2. b. Prepare an income statement for Year 1 and Year 2. 3. Reconcile the difference between variable costing and absorption costing net operating income in Year 1.

I cant follow this answer, please break it down better. Please resend this answer

"A firm is considering purchasing a new milling machine and has collected the following information for its income statement and cash flow statement. However, this income statement was calculated as if there is no inflation! All dollars are expressed in constant (year-0) dollars. Recalculate the income and cash flow statement by assuming there is a general (average) inflation of 2.6% applied to revenue, O&M, and salvage value.
- The firm will pay back the loan in 2 years, and the annual loan payment is $26,571.
- The tax rate is 38%.
- The revenue for year 1 is $40,000 and $36,000 for year 2.
- O&M for year 1 is $8,000 and $11,000 for year 2.
- The interest paid on the debt is $2743 for year 1 and $1409 for year 2.
- The taxable income is $19,111 for year 1 and $14,897 for year 2.
- The income taxes are $7,262 for year 1 and $5,661 for year 2.
- The milling machine costs $71,000.
- The salvage value at the end of year 2 is $48,000.
Calculate the IRR of the cash flow based on actual dollars. Express your answer as a percentage between 0 and 100.
You should calculate the depreciation based on the information given in the problem, but do not refer to the MACRS table. You will also need to calculate the amount that is borrowed and that goes to the principal on the debt in years 1 and 2."

"A firm is considering purchasing a new milling machine and has collected the following information for its income statement and cash flow statement. However, this income statement was calculated as if there is no inflation! All dollars are expressed in constant (year-0) dollars. Recalculate the income and cash flow statement by assuming there is a general (average) inflation of 2.6% applied to revenue, O&M, and salvage value.
- The firm will pay back the loan in 2 years, and the annual loan payment is $26,571.
- The tax rate is 38%.
- The revenue for year 1 is $40,000 and $36,000 for year 2.
- O&M for year 1 is $8,000 and $11,000 for year 2.
- The interest paid on the debt is $2743 for year 1 and $1409 for year 2.
- The taxable income is $19,111 for year 1 and $14,897 for year 2.
- The income taxes are $7,262 for year 1 and $5,661 for year 2.
- The milling machine costs $71,000.
- The salvage value at the end of year 2 is $48,000.
Calculate the IRR of the cash flow based on actual dollars. Express your answer as a percentage between 0 and 100.
You should calculate the depreciation based on the information given in the problem, but do not refer to the MACRS table. You will also need to calculate the amount that is borrowed and that goes to the principal on the debt in years 1 and 2."

"A firm is considering purchasing a new milling machine and has collected the following information for its income statement and cash flow statement. However, this income statement was calculated as if there is no inflation! All dollars are expressed in constant (year-0) dollars. Recalculate the income and cash flow statement by assuming there is a general (average) inflation of 4.9% applied to revenue, O&M, and salvage value.
- The firm will pay back the loan in 2 years, and the annual loan payment is $11,808.
- The tax rate is 36%.
- The revenue for year 1 is $46,000 and $42,000 for year 2.
- O&M for year 1 is $12,000 and $13,100 for year 2.
- The interest paid on the debt is $1722 for year 1 and $895 for year 2.
- The taxable income is $22,275 for year 1 and $19,434 for year 2.
- The income taxes are $8,019 for year 1 and $6,996 for year 2.
- The milling machine costs $70,000.
- The salvage value at the end of year 2 is $48,000.
Calculate the IRR of the cash flow based on actual dollars. Express your answer as a percentage between 0 and 100.
You should calculate the depreciation based on the information given in the problem, but do not refer to the MACRS table. You will also need to calculate the amount that is borrowed and that goes to the principal on the debt in years 1 and 2."

"A firm is considering purchasing a new milling machine and has collected the following information for its income statement and cash flow statement. However, this income statement was calculated as if there is no inflation! All dollars are expressed in constant (year-0) dollars. Recalculate the income and cash flow statement by assuming there is a general (average) inflation of 4.9% applied to revenue, O&M, and salvage value.
- The firm will pay back the loan in 2 years, and the annual loan payment is $11,808.
- The tax rate is 36%.
- The revenue for year 1 is $46,000 and $42,000 for year 2.
- O&M for year 1 is $12,000 and $13,100 for year 2.
- The interest paid on the debt is $1722 for year 1 and $895 for year 2.
- The taxable income is $22,275 for year 1 and $19,434 for year 2.
- The income taxes are $8,019 for year 1 and $6,996 for year 2.
- The milling machine costs $70,000.
- The salvage value at the end of year 2 is $48,000.
Calculate the IRR of the cash flow based on actual dollars. Express your answer as a percentage between 0 and 100.
You should calculate the depreciation based on the information given in the problem, but do not refer to the MACRS table. You will also need to calculate the amount that is borrowed and that goes to the principal on the debt in years 1 and 2."

A construction company Y is considering to participate in the tendering process for building a toll bridge. The duration of the construction project is 5 years. The successful tenderer is allowed to collect toll from the bridge users after the completion of the project and subsequently will be responsible for maintaining the bridge. The expected cash flow transactions from this project are as follows:

• Receive bank loan of RM 2,000,000 now
• Annual material expenses of RM 200,000 in year 1 and expected to increase by RM 20,000 per year until year 5
• Annual bridge maintenance cost of RM 70,000 from year 6 until end of bridge life
• Annual bank loan payment of RM 500,000 starting from the first year until at the end of year 10
• Progress payment received from the government: RM 4,000,000 (end of year 3) and RM 8,000,000 (end of year 5)
• Toll revenue of RM 500,000 per year from year 6 until year 10

a) Construct cash flow diagram to summarize the above transactions.

b) Another company is interested in this project and is willing to buy over this project worth RM 1,500,000 now. Should this offer being accepted? Show all your calculations to justify your decision and assume the growth rate is 12% per year.                                                                                             

Depreciation by Two Methods; Sale of Fixed Asset

New lithographic equipment, acquired at a cost of $718,750 on March 1 of Year 1 (beginning of the fiscal year), has an estimated useful life of five years and an estimated residual value of $61,800. The manager requested information regarding the effect of alternative methods on the amount of depreciation expense each year.

On March 4 of Year 5, the equipment was sold for $105,300.

Required:

1. Determine the annual depreciation expense for each of the estimated five years of use, the accumulated depreciation at the end of each year, and the book value of the equipment at the end of each year by the following methods:

a. Straight-line method

b. Double-declining-balance method

2. Journalize the entry to record the sale assuming that the manager chose the double declining-balance method. If an amount box does not require an entry, leave it blank.

3. Journalize the entry to record the sale in (2) assuming that the equipment was sold for $90,400 instead of $105,300. If an amount box does not require an entry, leave it blank.

Missing Statement Items, Available-for-Sale Securities

Highland Industries Inc. makes investments in available-for-sale securities. Selected income statement items for the years ended December 31, Year 2 and Year 3, plus selected items from comparative balance sheets, are as follows:

There were no dividends.

Determine the missing items. If required, use the minus sign to indicate a net or operating loss, unrealized losses, or a credit balance in the valuation allowance account.

1. Assume that in year 1 an economy produces 1000 units of output and they sell for $90 a unit, on average. In year 2, the economy produces the same 1000 units of output, and sells it for $110 a unit, on average. Use year 1 prices as base year to calculate real GDP in Year 1 and Year 2. What happened to real GDP between years 1 and 2?

2. Which of the following are included and which are excluded in calculating this year’s GDP? Explain in each instance.

(a) A homeowner who mows her own lawn

(b) A decline in the average hours worked per week

(c) Business expenditures on pollution control equipment

(d) Income from illegal drug activities

(e) The person who purchases a health care product

3. The next four questions refer to the following price and output data over a five-year period for an economy that produces only one good. Assume that year 2 is the base year.

Year Units of output Price per unit

1 16 $2

2 20 3

3 30 4

4 36 5

5 40 6

a. Give the nominal GDP for year 3.

b. What is the real GDP for year 3?