Columbia Sportswear is an outdoor and active lifestyle apparel and footwear company. Assume that last year Columbia reported cost of goods sold of $941 million. This year, cost of goods sold was $1,146 million. Accounts payable was $174 million at the end of last year and $214 million at the end of this year.

Required:

1. For this year, compute the average number of days that Columbia's accounts payable are outstanding. (Assume 365 days in a year. Do not round intermediate calculations. Round your final answer to nearest whole number.)

Number of days______

The price of a home is $200,000. The bank requires a 15% down payment. The buyer is offered two mortgage options: 15-year fixed at 8% or 30-year fixed at 8%. Calculate the amount of interest paid for each option. How much does the buyer save in interest with the 15-year option?

find the monthly payment for the 15-year option

find the monthly payment for the 30-year

Calculate the total cost of interest for both mortgage options. How much does the buyer save in interest with the 15-year option?

A drill press is purchased for $12,000. It is anticipated that its market value at the end of any year will be 18% less than its market value at the end of that year. In other words, its market value is reduced by 18% each year. The repair costs are covered by the warranty in Year 1. However, the repair cost in Year 2 is $500 and increases by $500 each year. This machining company has an MARR of 15%. State here on Blackboard the minimum EUAC (to the closest penny) of this drill press and its economic life (in years).

Large Ltd. purchased 80% of Small Company on January 1, Year 6, for $620,000, when the statement of financial position for Small showed common shares of $430,000 and retained earnings of $130,000. On that date, the inventory of Small was undervalued by $43,000, and a patent with an estimated remaining life of five years was overvalued by $64,000.

Small reported the following subsequent to January 1, Year 6:

A test for goodwill impairment on December 31, Year 8, indicated a loss of $19,600 should be reported for Year 8 on the consolidated income statement. Large uses the cost method to account for its investment in Small and reported the following for Year 8 for its separate-entity statement of changes in equity:

Required:

(a) Prepare the cost method journal entries of Large for each year (Years 6, 7, and 8).

(b) Compute the following on the consolidated financial statements for the year ended December 31, Year 8:

- (i) Goodwill

- (ii) Non-controlling interest on the statement of financial position

- (iii) Retained earnings, beginning of year

- (iv) Profit attributable to Large’s shareholders

- (v) Profit attributable to non-controlling interest

Exercise 6-9 Variable and Absorption Costing Unit Product Costs and Income Statements [LO6-1, LO6-2, LO6-3]

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

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 $59 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.

Exercise 6-9 (Algo) Variable and Absorption Costing Unit Product Costs and Income Statements [LO6-1, LO6-2, LO6-3]

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

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 $53 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.

On January 1, Boston Company completed the following transactions (use a 7% annual interest rate for all transactions): (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided.)

A. Borrowed $115,600 for nine years. Will pay $6,300 interest at the end of each year and repay the $115,600 at the end of the 9th year.

B. Established a plant remodeling fund of $490,450 to be available at the end of Year 10. A single sum that will grow to $490,450 will be deposited on January 1 of this year.

C. Agreed to pay a severance package to a discharged employee. The company will pay $75,300 at the end of the first year, $112,800 at the end of the second year, and $150,300 at the end of the third year.

D. Purchased a $171,500 machine on January 1 of this year for $34,300 cash. A five-year note is signed for the balance. The note will be paid in five equal year-end payments starting on December 31 of this year.

2-a. In transaction (b), what single sum amount must the company deposit on January 1 of this year? (Round your answer to nearest whole dollar.)

2-b. What is the total amount of interest revenue that will be earned? (Round your answer to nearest whole dollar.)

3. In transaction (c), determine the present value of this obligation.

4-a. In transaction (d), what is the amount of each of the equal annual payments that will be paid on the note?

4-b. What is the total amount of interest expense that will be incurred?

Exercise 7-9 Variable and Absorption Costing Unit Product Costs and Income Statements [LO7-1, LO7-2, LO7-3]

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

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 $80 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.

Exercise 7-9 Variable and Absorption Costing Unit Product Costs and Income Statements [LO7-1, LO7-2, LO7-3]

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

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 $81 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.