Depreciation expense
Assume that Gonzalez Company purchased an asset on January 1, 2014, for $44,600. The asset had an estimated life of six years and an estimated residual value of $4,460. The company used the straight-line method to depreciate the asset. On July 1, 2016, the asset was sold for $30,645.
1. Make the journal entry to record depreciation for 2016.
2. Record the sale of the asset.
3. How does the entry affect the accounting equation?
4. How should the gain or loss on the sale of the asset be presented on the income statement?
In: Accounting
(Related to Checkpoint 4.3) (Analyzing Profitability) In 2016, the Allen Corporation had sales of
$ 66million, total assets of $ 50 million, and total liabilities of 21million. The interest rate on the company's debt is 5.6percent, and its tax rate is 35percent. The operating profit margin is 14 percent.
a. Compute the firm's 2016 net operating income and net income.
b. Calculate the firm's operating return on assets and return on equity. (Hint: You can assume that interest must be paid on all of the firm's liabilities.)
In: Finance
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a. |
Double-declining-balance method |
|
b. |
Activity method (units of output) |
|
c. |
Sum-of-the-years'-digits method |
|
d. |
Straight-line method
|
In: Accounting
In: Finance
TREATMENT OF DEBENTURES On 3 January 2016, French Limited purchased 15,000 debentures (having face value of £ 10 each) issued by Greek Limited. Debentures were purchased at £ 9.7 each. However, the fair value of each debenture as on the date of purchase was £ 96 in the quoted market.
Transaction cost of £ 350 was also incurred on purchase of debentures. Coupon rate is 12% which is payable anually on 31 December whereas the effective interest rate is 12.6%. French Limited classified the investment in debentures as financial asset at amortised cost. At initial recognition,
French Limited determined that debenture was not credit impaired. On 31 December 2017, French Limited determined that there had been a significant increase in credit risk since the acquisition of the debentures.
On 31 December 2018, French Limited determined that the debenture was credit impaired.
French Limited's estimates of expected credit losses in respect of the investment in debentures at different dates are given below:
Date Life Time 12 months 3 January 2016 £ 54,500 £ 11,200 31 December 2016 £ 54,500 £ 11,200 31 December 2017 £ 62,600 £ 12,400 31 December 2018 £ 70,900 £ 14,500 31 December 2019 £ 70,900 £ 14,500
Annual interest has been received on time each year
. Required: Prepare journal entries in the books of French Limited in respect of the above for the years ended 31 December 2016 to 31 December 2019. 9.6
In: Accounting
Percentage-of-Completion and Completed Contract Methods
Philbrick Company signed a three-year contract to provide sales training to the employees of Elliot Company. The contract price is $1,200 per employee and the estimated number of employees to be trained is 400. The expected number to be trained in each year and the expected training costs follow.
| Number of Employees |
Training Costs Incurred |
|
|---|---|---|
| 2016 | 125 | $60,000 |
| 2017 | 200 | 75,000 |
| 2018 | 75 | 40,000 |
| Total | 400 | $175,000 |
Required
For each year, compute the revenue, expense, and gross profit
reported assuming revenue is recognized using the following
method.
(Do not round until your final answers. Round your answers to two
decimal places.)
1. Percentage-of-completion method, where percentage-of-completion is determined by the number of employees trained.
| Revenue | Expense | Gross Profit | |
|---|---|---|---|
| 2016 | Answer | Answer | Answer |
| 2017 | Answer | Answer | Answer |
| 2018 | Answer | Answer | Answer |
| Total | Answer | Answer | Answer |
2. Percentage-of-completion method, where percentage-of-completion is determined by the costs incurred.
| Revenue | Expense | Gross Profit | |
|---|---|---|---|
| 2016 | Answer | Answer | Answer |
| 2017 | Answer | Answer | Answer |
| 2018 | Answer | Answer | Answer |
| Total | Answer | Answer | Answer |
3. Completed contract method.
| Revenue | Expense | Gross Profit | |
|---|---|---|---|
| 2016 | Answer | Answer | Answer |
| 2017 | Answer | Answer | Answer |
| 2018 | Answer | Answer | Answer |
| Total | Answer | Answer | Answer |
In: Accounting
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ART I: STOCK VALUATION |
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Dividend from Financial Statements: |
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Read the Explanations to the right of the calculation cells for specific information on the data. |
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| Year | Cash Div/share ($) | Dividend Yield | Stockholder's Equity (in millions) | Stock Price | ||||
| 2015 | 2.92 | 3.00% | 2,491 | 97.33333333 | ||||
| 2016 | 3.12 | 2.70% | 429 | 115.5555556 | ||||
| 2017 | 3.32 | 2.60% | 1,030 | 127.6923077 | ||||
|
1. Stock Valuation - The new dividend yield if the company increased its dividend per share by 1.75 |
||||||||
| Year | Cash Div/Share ($) +1.75 | Dividend Yield | Stockholder's Equity (in millions) | Stock Price | ||||
| 2015 | 4.67 | 4.80% | 2,491 | 97.33333333 | ||||
| 2016 | 4.87 | 4.21% | 429 | 115.5555556 | ||||
| 2017 | 5.07 | 3.97% | 1,030 | 127.6923077 | ||||
|
2. The dividend yield if the firm doubled it's outstanding shares |
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| Year | Cash Div/Share ($) | Dividend Yield | Stockholder's Equity (in millions) -doubled | Stock Price | ||||
| 2015 | 1.46 | 1.50% | 4,982 | 97.33333333 | ||||
| 2016 | 1.56 | 1.35% | 858 | 115.5555556 | ||||
| 2017 | 1.66 | 1.30% | 2,060 | 127.6923077 | ||||
|
3. The rate of return on equity (i.e., the cost of stock) based on the new dividend yield you calculated above |
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| Year | Cash Div/Share ($) +1.75 | Stock Price | Return on Investment | |||||
| 2015 | 4.67 | 97.33333333 | CALCULATE ROI | |||||
| 2016 | 4.87 | 115.5555556 |
(Dividends + Capital gain)/ Divided by the original Price |
|||||
| 2017 | 5.07 | 127.6923077 | (D1 + (P1-P0)) / PO |
In: Finance
The accountant for Becker Company wants to develop a balance sheet as of December 31, 2016. A review of the asset records has revealed the following information:
| a. | Asset A was purchased on July 1, 2014, for $50,000 and has been depreciated on the straight-line basis using an estimated life of six years and a residual value of $5,000. |
| b. | Asset B was purchased on January 1, 2015, for $82,500. The straight-line method has been used for depreciation purposes. Originally, the estimated life of the asset was projected to be six years with a residual value of $7,500; however, at the beginning of 2016, the accountant learned that the remaining life of the asset was only three years with a residual value of $2,500. |
| c. | Asset C was purchased on January 1, 2015, for $50,000. The double-declining-balance method has been used for depreciation purposes, with a four-year life and a residual value estimate of $5,000. |
Required:
| 1. | Assume that these assets represent pieces of equipment. Calculate the acquisition cost, accumulated depreciation, and book value of each asset as of December 31, 2016. |
| 2. | How would the assets appear on the balance sheet on December 31, 2016? |
| 3. | Assume that Becker Company sold Asset B on January 2, 2017, for $34,500. Calculate the amount of the resulting gain or loss and prepare the journal entry for the sale. Where would the gain or loss appear on the income statement? |
In: Finance
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On January 1, 2016, Fascom had the following account balances in its shareholders' equity accounts. |
| Common stock, $1 par, 247,000 shares issued | 247,000 |
| Paid-in capital - excess of par, common | 494,000 |
| Paid-in capital - excess of par, preferred | 165,000 |
| Preferred stock, $100 par, 16,500 shares outstanding | 1,650,000 |
| Retained earnings | 3,300,000 |
| Treasury stock, at cost, 4,700 shares | 23,500 |
|
During 2016, Fascom Inc. had several transactions relating to common stock. |
| January 15: |
Declared a property dividend of 100,000 shares of Slowdown Company (book value $11.3 per share, market value $9.65 per share). |
| February 17: |
Distributed the property dividend. |
| April 10: |
A 2-for-1 stock split was declared and distributed on outstanding common stock and effected in the form of a stock dividend. The market value of the stock was $4 on this date. |
| July 18: |
Declared and distributed a 4% stock dividend on outstanding common stock. The market value is $5 per share. |
| December 1: |
Declared a 50 cents per share cash dividend on the outstanding common shares. |
| December 20: |
Paid the cash dividend. |
| Required: |
|
Without preparing journal entries, prepare the shareholders' equity section of Fascom's balance sheet as of December 31, 2016. Assume net income is $470,000 for 2016. |
In: Accounting
|
Ratios |
2016 |
2015 |
2014 |
2013 |
|
Profit margin |
19% |
17.8% |
17.3% |
19.9% |
|
Gross Profit Margin |
41.4% |
38.5% |
38.1% |
38.8% |
|
Current Ratio |
1.4 : 1 |
3.3 : 1 |
1.5 : 1 |
1.6 : 1 |
|
Quick Ration |
0.8 : 1 |
3 : 1 |
1.2 : 1 |
1.3 : 1 |
|
Working Capital (in millions) |
$1,380.3 |
$6,692.6 |
$1,437.6 |
$1,880.1 |
|
Accounts Receivable Turnover (times per year) |
17.8 |
20.1 |
21.7 |
20.9 |
|
Accounts Receivable Days Outstanding (days) |
21.9 |
18.7 |
16.2 |
17.1 |
|
Inventory Turnover (times per year) |
181.3 |
148.8 |
145.4 |
140.2 |
|
Days of Inventory (days) |
2.0 |
2.5 |
2.5 |
2.6 |
|
Operation Cycle (days) |
22.5 |
22.0 |
25.0 |
23.9 |
|
Note 1 |
Note 1 & 2 |
Note 2 |
Note 3 |
Significant Observation:
There was a significant increase in Inventory Turnover from 2015 to 2016.
My question would be what would cause my signifcant obervation based on the sec 10-K reports any help would be great thanks.
2016 McDonald's Company Annual Report. (2016 SEC 10-K) (SEC Filing Date: 3/31/2017). Retrieved February 10, 2018, from https://www.sec.gov/Archives/edgar/data/63908/000006390817000017/mcd-12312016x10k.htm#s1A53D3CFBC595772B22DE6C28CEA0F55
In: Accounting