An economy produces the following products: burgers and coffee. Use the information in the following table to calculate
(a) The total cost of the consumption basket consisting of 8 burgers and 15 cups of coffee in 2010, 2018 and 2019
(b) Consumer Price Index for years 2018 and 2019 that measures the cost of the consumption basket relative to the base year.
(c) Inflation rate for 2019.
| Product | Quantity | Base Year Price (2010) | Price (2018) | Price (2019) |
|---|---|---|---|---|
| Burgers | 8 | $2.00 | $2.1 | $2.5 |
| Cups of coffee | 15 | $4.00 | $4.50 | $4.50 |
In: Economics
The records of Groot Corp. for calendar 2018 reflected the following correct pre-tax amounts:
• gain from discontinued operations, $50,000;
• cash dividends declared and paid, $45,000;
• retained earnings, January 1, 2018, $275,000,
• correction of accounting error, $35,000 debit;
• income before income taxes and before discontinued operations, $165,000.
The average income tax rate of 40 % applies to all items except the dividends.
Required
1. Calculate the December 31, 2018 ending balance of retained earnings.
In: Accounting
Prepare a horizontal analysis of revenues and gross profit—both in
dollar amounts and in percentages—for 2019 and 2018.
In millions)
2019 2018 2017
Revenue $9,575 $9,300 $8,975
Cost of Goods Sold 6,250 6,000 5,890
Begin by calculating the gross profit for each year, then prepare a horizontal analysis of revenues and gross profit—both in dollar amounts and in percentages—for 2019 and 2018. (Enter amounts in millions as provided to you in the problem statement. Round the percentages to one decimal place, X.X%. Use a minus sign or parentheses to indicate a decrease.)
In: Accounting
Mister Macchiato purchased a coffee drink machine on January? 1, 2016 for $ 38,000. Expected useful life is 10 years or 50,000 drinks. In 2016?, 10,000 drinks were? sold, and in 2017, 20,000 drinks were sold. Residual value is $3,000.
b. Assume that Mister Macchiato sold the equipment for $23,000 cash on July? 1, 2018. Assume that management has depreciated the equipment by using the? double-declining-balance method. Record Mister Macchiato?'s depreciation for 2018 and the sale of the equipment on July? 1, 2018.
In: Accounting
Horizon Value of Free Cash Flows Current and projected free cash flows for Radell Global Operations are shown below.
| Actual 2016 |
2017 |
Projected 2018 |
2019 |
|
| Free cash flow | $602.40 | $663.08 | $703.13 | $759.38 |
| (millions of dollars) |
Growth is expected to be constant after 2018, and the weighted
average cost of capital is 11.55%. What is the horizon (continuing)
value at 2019 if growth from 2018 remains constant? Round your
answer to the nearest dollar. Round intermediate calculations to
two decimal places.
In: Finance
a) Obtain the value of nominal GDP and real GDP in 2018 and 2019 for this economy.
|
Good |
2018 |
2018 |
2019 |
2019 |
|
P18 |
Q18 |
P19 |
Q19 |
|
|
Food |
$1 |
100 |
$1 |
150 |
|
Clothing |
$5 |
200 |
$1 |
200 |
|
Household items |
$10 |
50 |
$3 |
60 |
|
Health Care |
$40 |
20 |
$20 |
30 |
b) Explain why looking just at the evolution of nominal GDP would
make an analyst erroneously conclude that this economy has gone
through a severe crisis/recession in 2015
In: Economics
Do some research to find the 2018 balance sheets for Macy’s and Nordstrom online. For each company, navigate to the company’s website, then scroll down to investors or investor relations, 2018 annual report, and locate their 2018 balance sheet.
Identify and describe the company’s three most significant accounts in the following areas:
How do these two retailer’s balance sheets compare? Which company do you feel is healthier?
In: Accounting
Herbert, Inc., acquired all of Rambis Company’s outstanding stock on January 1, 2017, for $654,000 in cash. Annual excess amortization of $11,400 results from this transaction. On the date of the takeover, Herbert reported retained earnings of $401,000, and Rambis reported a $207,000 balance. Herbert reported internal net income of $56,500 in 2017 and $73,100 in 2018 and declared $10,000 in dividends each year. Rambis reported net income of $22,700 in 2017 and $39,300 in 2018 and declared $5,000 in dividends each year.
a. Assume that Herbert’s internal net income figures above do not include any income from the subsidiary.
If the parent uses the equity method, what is the amount reported as consolidated retained earnings on December 31, 2018?
What would be the amount of consolidated retained earnings on December 31, 2018, if the parent had applied either the initial value or partial equity method for internal accounting purposes?
b. Under each of the following situations, what is the Investment in Rambis account balance on Herbert’s books on January 1, 2018?
The parent uses the equity method.
The parent uses the partial equity method.
The parent uses the initial value method.
c. Under each of the following situations, what is Entry *C on a 2018 consolidation worksheet?
The parent uses the equity method.
The parent uses the partial equity method.
The parent uses the initial value method.
In: Accounting
Following are selected account balances from Penske Company and Stanza Corporation as of December 31, 2018:
| Penske | Stanza | ||||||||
| Revenues | $ | (795,000 | ) | $ | (700,000 | ) | |||
| Cost of goods sold | 283,250 | 175,000 | |||||||
| Depreciation expense | 184,000 | 302,000 | |||||||
| Investment income | Not given | 0 | |||||||
| Dividends declared | 80,000 | 60,000 | |||||||
| Retained earnings, 1/1/18 | (732,000 | ) | (268,000 | ) | |||||
| Current assets | 510,000 | 668,000 | |||||||
| Copyrights | 1,072,000 | 558,500 | |||||||
| Royalty agreements | 722,000 | 1,116,000 | |||||||
| Investment in Stanza | Not given | 0 | |||||||
| Liabilities | (562,000 | ) | (1,631,500 | ) | |||||
| Common stock | (600,000 | ) | ($20 par) | (200,000 | ) | ($10 par) | |||
| Additional paid-in capital | (150,000 | ) | (80,000 | ) | |||||
Note: Parentheses indicate a credit balance.
On January 1, 2018, Penske acquired all of Stanza’s outstanding stock for $818,000 fair value in cash and common stock. Penske also paid $10,000 in stock issuance costs. At the date of acquisition copyrights (with a six-year remaining life) have a $632,000 book value but a fair value of $746,000.
As of December 31, 2018, what is the consolidated copyrights balance?
For the year ending December 31, 2018, what is consolidated net income?
As of December 31, 2018, what is the consolidated retained earnings balance?
As of December 31, 2018, what is the consolidated balance to be reported for goodwill?
|
In: Accounting
Following are selected account balances from Penske Company and Stanza Corporation as of December 31, 2018:
| Penske | Stanza | ||||||||
| Revenues | $ | (795,000 | ) | $ | (700,000 | ) | |||
| Cost of goods sold | 283,250 | 175,000 | |||||||
| Depreciation expense | 184,000 | 302,000 | |||||||
| Investment income | Not given | 0 | |||||||
| Dividends declared | 80,000 | 60,000 | |||||||
| Retained earnings, 1/1/18 | (732,000 | ) | (268,000 | ) | |||||
| Current assets | 510,000 | 668,000 | |||||||
| Copyrights | 1,072,000 | 558,500 | |||||||
| Royalty agreements | 722,000 | 1,116,000 | |||||||
| Investment in Stanza | Not given | 0 | |||||||
| Liabilities | (562,000 | ) | (1,631,500 | ) | |||||
| Common stock | (600,000 | ) | ($20 par) | (200,000 | ) | ($10 par) | |||
| Additional paid-in capital | (150,000 | ) | (80,000 | ) | |||||
Note: Parentheses indicate a credit balance.
On January 1, 2018, Penske acquired all of Stanza’s outstanding stock for $818,000 fair value in cash and common stock. Penske also paid $10,000 in stock issuance costs. At the date of acquisition copyrights (with a six-year remaining life) have a $632,000 book value but a fair value of $746,000.
As of December 31, 2018, what is the consolidated copyrights balance?
For the year ending December 31, 2018, what is consolidated net income?
As of December 31, 2018, what is the consolidated retained earnings balance?
As of December 31, 2018, what is the consolidated balance to be reported for goodwill?
|
In: Accounting