Isabella traveled to a neighboring state to investigate the purchase of an interior design firm. Her expenses included travel, legal, accounting, and miscellaneous expenses. The total was $51,000. She incurred the expenses in January and February of 2018. In each of the following scenarios, what can Isabella deduct in 2018?
In your computations, round the per-month amount to the nearest dollar. If an amount is zero, enter "0".
a. Isabella was in the interior design business
and did not acquire the interior design firm.
$
b. Isabella was in the interior design
business. She acquired the interior design firm and began operating
it on August 1, 2018.
$
c. Isabella did not acquire the interior design
firm and was not in the interior design business.
$
d. Isabella acquired the interior design firm
but was not in the interior design business when she acquired it.
Operations began on May 1, 2018.
$
In: Accounting
We should select one U.S. based company like Google for example,
from the Software industry and review the company’s most recent GRI
report. We should review the report and identify and organize
information in the report to generate key themes.
We should conduct research to identify general sustainability
practices within the Software industry.
Compile your research into a report that summarizes:
- A review of your company's sustainability efforts in comparison to general industry practices.
- A summary of the key themes or activities within your company's sustainability efforts.
- An evaluation of where your company falls within the stages outlined in the article.
- Your overall assesment of your company's sustainability efforts.
In: Finance
Recording Export Transactions
Daisy Brands, a U.S. company, sells items abroad. Daisy prices many of these transactions in the currency of the customer. Following are four such transactions made in the last accounting period, plus the direct exchange rates for each date:
| Country | Amount | Currency |
Spot rate at sale |
Spot rate at collection |
|||
|---|---|---|---|---|---|---|---|
| Argentina | 250,000 | Peso | $0.056 | $0.049 | |||
| Canada | 400,000 | Dollar | 0.732 | 0.713 | |||
| India | 300,000 | Rupee | 0.016 | 0.018 | |||
| South Africa | 100,000 | Rand | 0.074 | 0.077 |
Required
Prepare the journal entries made by Daisy Brands to record the above sale and collection transactions.
Argentina
| Description | Debit | Credit | |
|---|---|---|---|
| AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales | Answer | Answer | |
|
AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales |
Answer | Answer | |
| To record purchase of inventory | |||
| Foreign currency | Answer | Answer | |
| AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales | Answer | Answer | |
|
AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales |
Answer | Answer | |
| To record purchase sufficient foreign currency to pay supplier. | |||
| AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales | Answer | Answer | |
|
AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales |
Answer | Answer | |
| To record payment of liability to supplier. | |||
Canada
| Description | Debit | Credit | |
|---|---|---|---|
| AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales | Answer | Answer | |
|
AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales |
Answer | Answer | |
| To record purchase of inventory | |||
| Foreign currency | Answer | Answer | |
| AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales | Answer | Answer | |
|
AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales |
Answer | Answer | |
| To record purchase sufficient foreign currency to pay supplier. | |||
| AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales | Answer | Answer | |
|
AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales |
Answer | Answer | |
| To record payment of liability to supplier. | |||
India
| Description | Debit | Credit | |
|---|---|---|---|
| AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales | Answer | Answer | |
|
AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales |
Answer | Answer | |
| To record purchase of inventory | |||
| AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales | Answer | Answer | |
|
AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales |
Answer | Answer | |
|
Accounts receivable |
Answer | Answer | |
| To record purchase sufficient foreign currency to pay supplier. | |||
| AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales | Answer | Answer | |
|
AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales |
Answer | Answer | |
| To record payment of liability to supplier. | |||
South Africa
| Description | Debit | Credit | |
|---|---|---|---|
| AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales | Answer | Answer | |
|
AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales |
Answer | Answer | |
| To record purchase of inventory | |||
| AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales | Answer | Answer | |
|
AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales |
Answer | Answer | |
|
Accounts receivable |
Answer | Answer | |
| To record purchase sufficient foreign currency to pay supplier. | |||
| AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales | Answer | Answer | |
|
AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales |
Answer | Answer | |
| To record payment of liability to supplier. | |||
In: Accounting
Costa Cruise Lines (CCL) (a U.S. company based in Miami, FL) purchased a ship from Komatsu Heavy Equipment for ¥700 million – payable in 1 year. The current spot rate is ¥110/$ and the one-year forward rate is ¥108/$.
For borrowing (or depositing), the annual interest rate in Japan is 6%. In the United States, the rate is 2%.
Yen call and put options, with a 1-year expiration date and an exercise price of $.009 are available. The price (premium) of the call option is $.002 per yen. The price (premium) of the put option is $.001 per yen.
* Assume that one year from today, the spot rate for yen is either ¥130/$ or ¥105/$. If CCL decides to hedge with options, should they use a call or a put? If CCL follows the appropriate options hedging strategy, what is CCL’s net cost (in $US) to purchase the ship if the spot rate is ¥130/$? What is the net cost if the spot rate is ¥105/$? (Be sure to include the cost of buying the option in your answer.)
Recommended strategy (check one box): Call options….□ Put options….□
Net Cost if ¥130/$ = $____________________ Net cost if ¥105/$ = $____________________
* If CCL decides to hedge with a forward contract, what will the ship cost (in $US)?
* If CCL decides to use a money market hedge, what will the ship cost (in $US)?
In: Finance
Consider the following table for a period of six
years:
| Returns | |||||||
| Year | Large-Company Stocks | U.S. Treasury Bills | |||||
| 1 | –14.99 | % | 7.35 | % | |||
| 2 | –26.56 | 8.02 | |||||
| 3 | 37.29 | 5.93 | |||||
| 4 | 23.99 | 5.37 | |||||
| 5 | –7.28 | 5.48 | |||||
| 6 | 6.63 | 7.73 | |||||
Calculate the arithmetic average returns for large-company stocks
and T-bills over this time period. (Do not round
intermediate calculations and enter your answers as a percent
rounded to 2 decimal places, e.g., 32.16.)
| Arithmetic average returns | |
| Large-company stock | % |
| T-bills | % |
Calculate the standard deviation of the returns for large-company
stocks and T-bills over this time period. (Do not round
intermediate calculations and enter your answers as a percent
rounded to 2 decimal places, e.g., 32.16.)
| Standard deviation | |
| Large-company stock | % |
| T-bills | % |
Calculate the observed risk premium in each year for the
large-company stocks versus the T-bills.
a. What was the arithmetic average risk premium
over this period? (A negative answer should be indicated by
a minus sign. Do not round intermediate calculations and enter your
answer as a percent rounded to 2 decimal places, e.g.,
32.16.)
Average risk premium
%
b. What was the standard deviation of the risk
premium over this period? (Do not round intermediate
calculations and enter your answer as a percent rounded to 2
decimal places, e.g., 32.16.)
Risk premium standard deviation
%
In: Finance
|
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|
In: Accounting
Recording Export Transactions
Daisy Brands, a U.S. company, sells items abroad. Daisy prices many of these transactions in the currency of the customer. Following are four such transactions made in the last accounting period, plus the direct exchange rates for each date:
| Country | Amount | Currency | Spot rate at sale |
Spot rate at collection |
|||
|---|---|---|---|---|---|---|---|
| Argentina | 250,000 | Peso | $0.056 | $0.049 | |||
| Canada | 400,000 | Dollar | 0.732 | 0.713 | |||
| India | 300,000 | Rupee | 0.016 | 0.018 | |||
| South Africa | 100,000 | Rand | 0.074 | 0.077 |
Required
Prepare the journal entries made by Daisy Brands to record the above sale and collection transactions.
Argentina
| Description | Debit | Credit | |
|---|---|---|---|
| AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales | Answer | Answer | |
|
AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales |
Answer | Answer | |
| To record purchase of inventory | |||
| Foreign currency | Answer | Answer | |
| AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales | Answer | Answer | |
|
AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales |
Answer | Answer | |
| To record purchase sufficient foreign currency to pay supplier. | |||
| AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales | Answer | Answer | |
|
AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales |
Answer | Answer | |
| To record payment of liability to supplier. |
Canada
| Description | Debit | Credit | |
|---|---|---|---|
| AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales | Answer | Answer | |
|
AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales |
Answer | Answer | |
| To record purchase of inventory | |||
| Foreign currency | Answer | Answer | |
| AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales | Answer | Answer | |
|
AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales |
Answer | Answer | |
| To record purchase sufficient foreign currency to pay supplier. | |||
| AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales | Answer | Answer | |
|
AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales |
Answer | Answer | |
| To record payment of liability to supplier. |
India
| Description | Debit | Credit | |
|---|---|---|---|
| AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales | Answer | Answer | |
|
AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales |
Answer | Answer | |
| To record purchase of inventory | |||
| AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales | Answer | Answer | |
|
AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales |
Answer | Answer | |
|
Accounts receivable |
Answer | Answer | |
| To record purchase sufficient foreign currency to pay supplier. | |||
| AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales | Answer | Answer | |
|
AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales |
Answer | Answer | |
| To record payment of liability to supplier. |
South Africa
| Description | Debit | Credit | |
|---|---|---|---|
| AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales | Answer | Answer | |
|
AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales |
Answer | Answer | |
| To record purchase of inventory | |||
| AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales | Answer | Answer | |
|
AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales |
Answer | Answer | |
|
Accounts receivable |
Answer | Answer | |
| To record purchase sufficient foreign currency to pay supplier. | |||
| AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales | Answer | Answer | |
|
AnswerAccounts receivableCashExchange gainExchange lossForeign currencySales |
Answer | Answer | |
| To record payment of liability to supplier. |
PreviousSave AnswersNext
In: Accounting
Sunrise Manufacturing, Inc. Sunrise Manufacturing, Inc., a U.S. multinational company, has the following debt components in its consolidated capital section, Sunrise's shareholders' equity is $50,000,000 and its finance staff estimates their cost of equity to be 17.5%.
Current exchange rates are also listed in the table. Income taxes are 39% around the world after allowing for credits. Calculate Sunrise's weighted average cost of capital. Are any assumptions implicit in your calculation?
What is Sunrise's weighted average cost of capital?
Data Table:
|
Assumption |
Value |
|
|
Tax rate |
39% |
|
|
25-year US$ bonds |
$20 comma 000 comma 00020,000,000 |
|
|
5-year US$ bonds |
$8,000,000 |
|
|
10-year eurobonds (euros) |
euro€8,000,000 |
|
|
20-year yen bonds (yen) |
¥750,000,000 |
|
|
Before-tax cost of 25-year US$ bonds |
8.0% |
|
|
Before-tax cost of 5-year US$ bonds |
5.0% |
|
|
Before-tax cost of 10-year eurobonds |
6.0% |
|
|
Before-tax cost of 20-year yen bonds |
4.0% |
|
| Spot rate
($/euro€) |
1.2200 |
|
| Spot rate
($/pound£) |
1.9400 |
|
| Spot rate
(yen¥/$) |
105.00 |
In: Finance
Stoney Run Construction Company (U.S. GAAP) enters into a 3-year contract to build a new warehouse facility. Information for Years 1, 2, and 3 is shown below:
| Year 1 | Year 2 | Year 3 | ||
| Sale price | $2,800,000 | $2,800,000 | $2,800,000 | |
| Estimated costs | 1,600,000 | 2,000,000 | 2,000,000 | |
| Costs incurred to date (paid in cash) | 400,000 | 900,000 | 2,000,000 | |
| Billed to date | 250,000 | 1,150,000 | 2,800,000 | |
| Received in cash to date | 190,000 | 950,000 | 2,800,000 | |
COST RECOVERY METHOD (IFRS)
Question 1: Calculate the Gross Profit booked in Year 1:
Question 2: Book the following Journal Entries for Year 1:
1-Record Sale
2-Record payments received
Question 3: Book the following journal entries for Year 3:
1-Record payments received
2-Record gross profit
In: Accounting
On January 1, 2014, Trenten Systems, a U.S.-based company,
purchased a controlling interest in Grant Management Consultants
located in Zurich, Switzerland. The acquisition was treated as a
purchase transaction. The 2014 financial statements stated in Swiss
francs are given below.
| GRANT MANAGEMENT CONSULTANTS Comparative Balance Sheets January 1 and December 31, 2014 |
||||
| Jan. 1 | Dec. 31 | |||
| Cash and Receivables | 20,000 | 54,400 | ||
| Net Property, Plant, and Equipment | 40,500 | 36,600 | ||
| Totals | 60,500 | 91,000 | ||
| Accounts and Notes Payable | 29,900 | 32,100 | ||
| Common Stock | 20,200 | 20,200 | ||
| Retained Earnings | 10,400 | 38,700 | ||
| Totals | 60,500 | 91,000 | ||
| GRANT MANAGEMENT CONSULTANTS Consolidated Income and Retained Earnings Statement for the Year Ended December 31, 2014 |
||
| Revenues | 73,000 | |
| Operating Expenses including Depreciation of 3,900 francs | 29,400 | |
| Net Income | 43,600 | |
| Dividends Declared and Paid | 15,300 | |
| Increase in Retained Earnings | 28,300 | |
Direct exchange rates for Swiss franc are:
| Dollars per Franc | ||
| January 1, 2014 | $0.5987 | |
| December 31, 2014 | 0.5321 | |
| Average for 2014 | 0.5654 | |
| Dividend declaration and payment date | 0.5810 |
1. Translate the year-end balance sheet and income statement of the foreign subsidiary using the current rate method of translation.
2. Prepare a schedule to verify the translation adjustment.
In: Accounting