Midwest Entertainment has four operating divisions: Bus Charters, Lodging, Concerts, and Ticket Services. Each division is a separate segment for financial reporting purposes. Revenues and costs related to outside transactions were as follows for the past year (dollars in thousands):

Bus Charters Division participates in a frequent guest program with Lodging Division. During the past year, Bus Charters reported that it traded lodging award coupons for travel that had a retail value of $1.3 million, assuming that the travel was redeemed at full fares. Concerts Division offered 20 percent discounts to Midwest’s bus passengers and lodging guests. These discounts to bus passengers were estimated to have a retail value of $360,000. Midwest's lodging guests redeemed $150,000 in concert discount coupons. Midwest’s hotels also provided rooms for Bus Charters’s employees (drivers and guides). The value of the rooms for the year was $650,000.

Ticket Services Division sold chartered tours for Bus Charters valued at $220,000 for the year. This service for intracompany lodging was valued at $100,000. It also sold concert tickets for Concerts; tickets for intracompany concert admission were valued at $54,000.

While preparing all of these data for financial statement presentation, Lodging Division’s controller stated that the value of the bus coupons should be based on their differential and opportunity costs, not on the full fare. This argument was supported because travel coupons are usually allocated to seats that would otherwise be empty or that are restricted similar to those on discount tickets. If the differential and opportunity costs were used for this transfer price, the value would be $250,000 instead of $1.3 million. Bus Charters’s controller made a similar argument concerning the concert discount coupons. If the differential cost basis were used for the concert coupons, the transfer price would be $54,000 instead of the $360,000.

Midwest reports assets in each division as follows (dollars in thousands):

a. Using the retail values for transfer pricing for segment reporting purposes, what are the operating profits for each Midwest division? (Enter your answers in thousands of dollars.)

b. What are the operating profits for each Midwest division using the differential cost basis for pricing transfers? (Enter your answers in thousands of dollars.)

c. Rank each division by ROI using the transfer pricing methods in requirements (a) and (b). (Round your answers to 2 decimal places.)

Midwest Entertainment has four operating divisions: Bus Charters, Lodging, Concerts, and Ticket Services. Each division is a separate segment for financial reporting purposes. Revenues and costs related to outside transactions were as follows for the past year (dollars in thousands):

Bus Charters Division participates in a frequent guest program with Lodging Division. During the past year, Bus Charters reported that it traded lodging award coupons for travel that had a retail value of $1.3 million, assuming that the travel was redeemed at full fares. Concerts Division offered 20 percent discounts to Midwest’s bus passengers and lodging guests. These discounts to bus passengers were estimated to have a retail value of $350,000. Midwest's lodging guests redeemed $170,000 in concert discount coupons. Midwest’s hotels also provided rooms for Bus Charters’s employees (drivers and guides). The value of the rooms for the year was $660,000.

Ticket Services Division sold chartered tours for Bus Charters valued at $210,000 for the year. This service for intracompany lodging was valued at $110,000. It also sold concert tickets for Concerts; tickets for intracompany concert admission were valued at $55,000.

While preparing all of these data for financial statement presentation, Lodging Division’s controller stated that the value of the bus coupons should be based on their differential and opportunity costs, not on the full fare. This argument was supported because travel coupons are usually allocated to seats that would otherwise be empty or that are restricted similar to those on discount tickets. If the differential and opportunity costs were used for this transfer price, the value would be $250,000 instead of $1.3 million. Bus Charters’s controller made a similar argument concerning the concert discount coupons. If the differential cost basis were used for the concert coupons, the transfer price would be $55,000 instead of the $350,000.

Midwest reports assets in each division as follows (dollars in thousands):

Required:

a. Using the retail values for transfer pricing for segment reporting purposes, what are the operating profits for each Midwest division? (Enter your answers in thousands of dollars.)

b. What are the operating profits for each Midwest division using the differential cost basis for pricing transfers? (Enter your answers in thousands of dollars.)

c. Rank each division by ROI using the transfer pricing methods in requirements (a) and (b). (Round your answers to 2 decimal places.)

Old Town Entertainment has two employees in Year 1. Clay earns $4,400 per month, and Philip, the manager, earns $10,100 per month. Neither is paid extra for working overtime. Assume the Social Security tax rate is 6 percent on the first $110,000 of earnings and the Medicare tax rate is 1.5 percent on all earnings. The federal income tax withholding is 16 percent of gross earnings for Clay and 20 percent for Philip. Both Clay and Philip have been employed all year.

Required
a. Calculate the net pay for both Clay and Philip for March.
b. Calculate the net pay for both Clay and Philip for December.
c. Is the net pay the same in March and December for both employees?
d. What amounts will Old Town report on the Year 1 W-2s for each employee?

What amounts will Old Town report on the Year 1 W-2s for each employee? (Do not round intermediate calculations.)

Lu Technology Co. manufactures DVDs for computer software and entertainment companies. Lu uses job order costing. On June 2,Lu began production of 5,800 ​DVDs, Job​ 423, for Portrait Pictures for $1.20 sales price per DVD. Lu promised to deliver the DVDs to Portrait Pictures by June 5. Lu incurred the following direct​ costs:

Data table:

more info:

LuTechnology allocates manufacturing overhead to jobs based on the relation between estimated overhead of $550,000 and estimated direct labor costs of $440,000. Job 423 was completed and shipped on June 3.

Requirement 1. Prepare a job cost record for Job 423. Calculate the predetermined overhead allocation rate​ (round to two decimal​ places); then allocate manufacturing overhead to the job.

Begin by determining the total amount of direct materials and direct labor incurred on the job.​ Next, calculate the predetermined overhead allocation rate and apply manufacturing overhead to the job.​ Lastly, compute the total cost of Job 423 and the cost per DVD.

Requirement 2. Journalize in summary form the requisition of direct materials and the assignment of direct labor and the allocation of manufacturing overhead to Job 423. Wages are not yet paid. ​(Record debits​ first, then credits. Exclude explanations from any journal​ entries.)

Start by journalizing the use of direct materials.

​Next, journalize the use of direct labor.

Now journalize the allocation of overhead to Job 423.

Requirement 3. Journalize completion of the job and the sale of the 5,800

DVDs on account. ​(Record debits​ first, then credits. Exclude explanations from any journal​ entries.)

Begin by preparing the entry to show the completion of the job.

​Next, journalize the revenue portion of the sale of Job 423.

​Finally, journalize the cost of goods portion of the sale.

and,

Princeton Computer Company uses a job order costing system in which each batch manufactured is a different job. Princeton Computer Company assigns direct materials and direct labor to each job. The company assigns labor costs at $26 per hour. It allocates manufacturing overhead to jobs based on a predetermined overhead allocation​rate, computed as a percentage of direct labor costs. At the beginning of 2020​, the controller prepared the following​budget:

In November 2020​, PrincetonComputer Company worked on several jobs. Records for two jobs appear​ here:

Midwest Entertainment has four operating divisions: Bus Charters, Lodging, Concerts, and Ticket Services. Each division is a separate segment for financial reporting purposes. Revenues and costs related to outside transactions were as follows for the past year (dollars in thousands):

Bus Charters Lodging Concerts Ticket Services Revenues $ 11,700 $ 5,400 $ 4,490 $ 1,550 Costs 7,950 3,530 3,300 1,450

Bus Charters Division participates in a frequent guest program with Lodging Division. During the past year, Bus Charters reported that it traded lodging award coupons for travel that had a retail value of $1.3 million, assuming that the travel was redeemed at full fares. Concerts Division offered 20 percent discounts to Midwest's bus passengers and lodging guests. These discounts to bus passengers were estimated to have a retail value of $370,000. Midwest's lodging guests redeemed $150,000 in concert discount coupons. Midwest's hotels also provided rooms for Bus Charters's employees (drivers and guides). The value of the rooms for the year was $660,000.

Ticket Services Division sold chartered tours for Bus Charters valued at $190,000 for the year. This service for intracompany lodging was valued at $100,000. It also sold concert tickets for Concerts; tickets for intracompany concert admission were valued at $56,000.

While preparing all of these data for financial statement presentation, Lodging Division's controller stated that the value of the bus coupons should be based on their differential and opportunity costs, not on the full fare. This argument was supported because travel coupons are usually allocated to seats that would otherwise be empty or that are restricted similar to those on discount tickets. If the differential and opportunity costs were used for this transfer price, the value would be $250,000 instead of $1.3 million. Bus Charters's controller made a similar argument concerning the concert discount coupons. If the differential cost basis were used for the concert coupons, the transfer price would be $56,000 instead of the $370,000.

Midwest reports assets in each division as follows (dollars in thousands):

Bus Charters $ 48,000 Lodging 19,100 Concerts 15,350 Ticket Services 2,750

Required:

a. Using the retail values for transfer pricing for segment reporting purposes, what are the operating profits for each Midwest division? (Enter your answers in thousands of dollars.)

Bus Charters Lodging Concerts Ticket Services

Total Revenues

Total Costs

Operating Profits

b. What are the operating profits for each Midwest division using the differential cost basis for pricing transfers? (Enter your answers in thousands of dollars.)

Bus Charters

Lodging

Concerts

Ticket Services

c. Rank each division by ROI using the transfer pricing methods in requirements (a) and (b). (Round your answers to 2 decimal places.)

Bus Charters

Lodging

Concerts

Ticket Services

Bus Charters

Lodging

Concerts

Ticket Services

Midwest Entertainment has four operating divisions: Bus Charters, Lodging, Concerts, and Ticket Services. Each division is a separate segment for financial reporting purposes. Revenues and costs related to outside transactions were as follows for the past year (dollars in thousands):

Bus Charters Division participates in a frequent guest program with Lodging Division. During the past year, Bus Charters reported that it traded lodging award coupons for travel that had a retail value of $1.3 million, assuming that the travel was redeemed at full fares. Concerts Division offered 20 percent discounts to Midwest’s bus passengers and lodging guests. These discounts to bus passengers were estimated to have a retail value of $360,000. Midwest's lodging guests redeemed $140,000 in concert discount coupons. Midwest’s hotels also provided rooms for Bus Charters’s employees (drivers and guides). The value of the rooms for the year was $630,000.

Ticket Services Division sold chartered tours for Bus Charters valued at $200,000 for the year. This service for intracompany lodging was valued at $100,000. It also sold concert tickets for Concerts; tickets for intracompany concert admission were valued at $55,000.

While preparing all of these data for financial statement presentation, Lodging Division’s controller stated that the value of the bus coupons should be based on their differential and opportunity costs, not on the full fare. This argument was supported because travel coupons are usually allocated to seats that would otherwise be empty or that are restricted similar to those on discount tickets. If the differential and opportunity costs were used for this transfer price, the value would be $250,000 instead of $1.3 million. Bus Charters’s controller made a similar argument concerning the concert discount coupons. If the differential cost basis were used for the concert coupons, the transfer price would be $55,000 instead of the $360,000.

Midwest reports assets in each division as follows (dollars in thousands):

Required:

a. Using the retail values for transfer pricing for segment reporting purposes, what are the operating profits for each Midwest division? (Enter your answers in thousands of dollars.)

b. What are the operating profits for each Midwest division using the differential cost basis for pricing transfers? (Enter your answers in thousands of dollars.)

c. Rank each division by ROI using the transfer pricing methods in requirements (a) and (b). (Round your answers to 2 decimal places.)

Problem 11-14
Replacement Analysis

DeYoung Entertainment Enterprises is considering replacing the latex molding machine it uses to fabricate rubber chickens with a newer, more efficient model. The old machine has a book value of $600,000 and a remaining useful life of 5 years. The current machine would be worn out and worthless in 5 years, but DeYoung can sell it now to a Halloween mask manufacturer for $265,000. The old machine is being depreciated by $120,000 per year for each year of its remaining life.

The new machine has a purchase price of $1,160,000, an estimated useful life and MACRS class life of 5 years, and an estimated salvage value of $105,000. The applicable depreciation rates are 20.00%, 32.00%, 19.20%, 11.52%, 11.52%, and 5.76%. Being highly efficient, it is expected to economize on electric power usage, labor, and repair costs, and, most importantly, to reduce the number of defective chickens. In total, an annual savings of $255,000 will be realized if the new machine is installed. The company's marginal tax rate is 35% and the project cost of capital is 15%.

1. What is the initial net cash flow if the new machine is purchased and the old one is replaced? Round your answer to the nearest dollar.
   $
2. 
   
3. 
   
4. 
   
5. Calculate the annual depreciation allowances for both machines, and compute the change in the annual depreciation expense if the replacement is made. Do not round intermediate calculations. Round your answers to the nearest dollar.

   Year	Depreciation Allowance, New	Depreciation Allowance, Old	Change in Depreciation
   1	$	$	$
   2	$	$	$
   3	$	$	$
   4	$	$	$
   5	$	$	$

6. 
   
7. What are the incremental net cash flows in Years 1 through 5? Do not round intermediate calculations. Round your answers to the nearest dollar.

   CF1	$
   CF2	$
   CF3	$
   CF4	$
   CF5	$

8. 
   
9. Should the firm purchase the new machine?
   -Select-YesNoItem 22
   
   Support your answer. Do not round intermediate calculations. Round your answer to the nearest dollar.
   
   NPV: $

The rise of digital technology has seen a fundamental shift in the way media are consumed. Although television traditionally has been a mainstay of home entertainment, the more recent shift in media consumption—coupled with the rise in the availability of Internet-enabled devices—has meant that time spent in front of the television now is shared with smartphones, tablets, and laptops (Deloitte, 2016; Google, 2014).

Identify and discuss 5 internal and 5 external factors influencing consumer behaviour.                                                                                          

Discuss the ways in which digital technology is influencing consumer behaviour with regard to the television industry.                       

This topic can be further analyzed using the questions below. Please share your opinions in the initial post and be sure to provoke a discussion with your fellow students (asking a question is an easy way).

·         What are some of the ways the Internet can be used for education, entertainment, communication and business?

·         Do you think that the Internet usage is an anti-social activity?

·         Do you think the Internet is making people more impatient and that we are becoming a society where we all want instant satisfaction?

·         Do you think governments have the right to censor the Internet?

Partnership BPE's profits and losses are shared equally among the three partners. The adjusted basis of Partner E's interest in the partnership on January 1, 2019 was $65,000. On January 3, 2019, Partner E withdrew $16,000 in cash. The partnership reported $165,000 as ordinary income on its 2019 partnership return. In addition, $6,000 for qualified travel, meal, and entertainment expenses was shown on E's Schedule K-1 of Form 1065. Due to the 50% limitation, $3,000 of the $6,000 is unallowable as a deduction. What is the amount of E's basis in the partnership on December 31, 2019?