Daly bhd. is a leasing company that enters into 5-year lease (that does not allow cancellation) for equipment with Krause Bhd. on 1 january 2019. The equipment has an estimated life of 6 years and a fair value of RM 1,800,00 at the commencement of the lease. in addition, the leased equipment is of a specialized nature such that only Krause Bhd. can use the equipment without major modifications being made. The lease contains the following provisions:
rental payments of RM 200,000, payable at the beginning of each 6-month period, throughout the lease period.
it is expected that Daly Bhd. will realize rm 100,000 from selling the assets at the expiration of the lease. however, the actual residual value is expected to be rm60,000. the residual value is not guaranteed by Klause Bhd. Krause's incremental borrowing rate is 8%. Krause uses the straight line method to depreciate its assets.
(a) related journal entries for the year 2019 in the books of Krause Bhd ( include amortization schedule through 1 January 2020)
(b) prepare the statements of profit or loss and statements of financial position as at 31 December 2020
In: Accounting
Independent Energy depreciates all assets using the straight-line method. The company's fiscal year end is December 31. The following selected transactions and events occurred during the first three years:
|
2020 |
Jan | 1 | Purchased equipment from the Equipment World for $214,500 on account. |
Independent Energy also incurred freight and installation costs of $1,500 and $4,000 respectively.
| Sep | 30 | Paid for annual insurance of $4,200 and routine maintenance of $1,700 for the |
machine. The insurance policy expires on September 30, 2021.
| Dec | 31 | Recorded 2020 depreciation on the basis of an estimated 10-year useful life and |
residual value of $20,000.
|
2021 |
Dec | 31 | Recorded 2021 depreciation and impairment loss (if any). Independent Energy |
conducted an impairment assessment as indicators suggested that an impairment may be possible. It was determined that the recoverable amount of the equipment is currently $160,000. The estimated residual value remained unchanged.
|
2022 |
Dec | 31 | Independent Energy sold the equipment to Engaged Auto Company for |
proceeds of $140,000.
Instructions
Prepare the necessary entries. (Show calculations.)
In: Accounting
The Matson Company had the following financial information for the year ended April 30
Salaries Expense $123,800
Common Stock 72,000
Allowance for Doubtful Accounts 7,000
Bad Debts Expense 15,800
Supplies 14,500
Interest Revenue 4,600
Accumulated Depreciation 38,000
Sales 500,000
Dividends 12,000
Interest Receivable (short term) 3,300
Beginning Retained Earnings 28,800
Advertising Expense 79,000
Accounts Payable 142,000
Cash Flow from Investing Activities 105,000
Notes Receivable (short-term) 17,000
Land 50,000
Cash 23,000
Inventory 154,000
Salaries Payable 102,000
Cost of Goods Sold 212,000
Accounts Receivable 113,000
Equipment 77,000
a) Prepare the multistep income statement (in good form) for April 30, 2020.
b) Prepare the classified balance sheet (in good form) as of April 30, 2020.
There may be items that will NOT appear on either statement. The total current assets are $317,800 and the total current liabilities are $244,000. You do not need any detail for cost of goods sold so don't include it!
In: Accounting
On August 1, 2020, Sage Ltd. purchased a call option from Starco Corporation. The option gave Sage the right to buy 8,000 shares in a third company, Dillon Ltd., at a price of $10 per share. On the day Sage purchased the option, Dillon shares were trading at $10 each. Sage paid $1,300 for the options. On August 31, 2020, the Dillon shares were trading at $12 each, and the options for Dillon shares were trading at $25,000. On September 15, Sage settled the options in cash when the Dillon shares were trading at $16 and the options were trading at $48,000.
QUESTION:
1) Prepare the journal entries to record the above transactions.
A) (To record the acquisition of the option.)
B) (To record the change in value of the option.)
C) (To record the change in value of the option.)
D) (To record the settlement of the option.)
2) Prepare the September 15 journal entry settling the option for cash, and assuming Sage accepted instead the shares in Dillon.
A) (To record the change in value of the option.)
B) (To take delivery of the shares
using the option.)
In: Accounting
On January 1, 2018, Lawson Brothers Enterprises (LBE) granted restricted stock units (RSUs) representing 40 million of its $1 par common shares to executives, subject to forfeiture if employment is terminated within four years. After the recipients of the RSUs satisfy the vesting requirement, the company will distribute the shares. The common shares had a market price of $10 per share on the grant date. At the date of grant, LBE anticipated that 5% of the recipients would leave the firm prior to vesting. Ignore taxes.
Required:
1. Prepare the appropriate journal entry to record compensation expense on December 31, 2018. Show calculations.
2. Prepare the appropriate journal entry to record compensation expense on December 31, 2019. Show calculations.
3. During 2020 third year, LBE revised its estimate of forfeitures from 5% to 10%. Prepare the appropriate journal entry to record compensation expense on December 31, 2020. Show calculations.
4. Prepare the appropriate journal entry to record compensation expense on December 31, 2021. Show calculations.
In: Accounting
Westcott–Smith is a privately held investment management company. Two other investment counseling companies, which want to be acquired, have contacted Westcott–Smith about purchasing their business. Company A’s price is £2 million. Company B’s price is £3 million. After analysis, Westcott–Smith estimates that Company A’s profitability is consistent with a perpetuity of £300,000 a year. Company B’s prospects are consistent with a perpetuity of £435,000 a year. Westcott–Smith has a budget that limits acquisitions to a maximum purchase cost of £4 million. Its opportunity cost of capital relative to undertaking either project is 12 percent.
A) Determine which company or companies (if any) Westcott–Smith should purchase according to the NPV rule.
B) Determine which company or companies (if any) Westcott–Smith should purchase according to the IRR rule.
C) State which company or companies (if any) Westcott–Smith should purchase. Justify your answer.
In: Finance
The Sunrise enterprises, a single product company, provides you the following data for the Month of Sep. 2020.
• Sales (4,000 units @ $25/unit): $1,00000
• Contribution Margin per unit: $12
• Total fixed expenses for the month: $18,000 Required: Calculate break-even point( in units and in dollars) and margin of safety( in Percentage, units and Dollars) for Sunrise enterprises using above data. Also draw a CVP graph and show the sales volume representing break-even point and margin of safety on the graph.
This question is from Economics, I want answer of this question with diagram and explanation of diagram
Please help me.
In: Economics
| Item | Firm a | Firm B |
| outstanding shares | 2000 | 1000 |
| price per share | US$40 | US$20 |
Consider the following information above for Firms A and B.
Firm A is considering taking over Firm B.The synergy benefits from the takeover are estimated at US $5000
(A) At a cash consideration of US$22 per share, what is the NPV of acquisition to firm A?
(B) Assuming the cash consideration in part (A) above ,what will be post merger price per share?
(C) Considering the cash consideration in part (A),what is the amount of merger premium
(D) if the terms of merger provide for a stock consideration,with an exchange ratio of 1:2,what will be the NPV of acquisition to Firm A?what will be the post-Merger Price ?
(E)If an amount of US$22000 is used as the consideration amount but the terms of merger provide for a stock consideration ,how will your answer to part (D)above change?comment on the difference in your answers(if any ).
(F) What will be the NPV of Acquisition for Firm B in parts (A) , (D) and (E)
In: Finance
What are the standout features of Epic's corporate culture?
ation
Corporate Culture and Strategy Execution
In this exercise you will explore the corporate culture and values of Epic and the important role of corporate culture plays in strategy execution.
Just as every human being has a unique personality, every company has its own unique corporate culture. These corporate cultures include shared values, ingrained attitudes, and company traditions that determine norms of behavior, accepted work practices, and styles of operating. The character of a company’s culture is a product of the core values and beliefs that executives espouse, the standards of what is ethically acceptable and what is not, the “chemistry” and the “personality” that permeate the work environment, the company’s traditions, and the stories that get told over and over to illustrate and reinforce the company’s shared values, business practices, and traditions. In a very real sense, the culture is the company’s automatic, self-replicating “operating system” that defines “how we do things around here.” A company’s culture is important because it influences the organization’s actions and approaches to conducting business. As such, it plays an important role in strategy execution and may have an appreciable effect on business performance as well. When a company’s present culture promotes attitudes, behaviors, and ways of doing things that are in sync with the chosen strategy and conducive to first-rate strategy execution, the culture functions as a valuable ally in the strategy execution process. The foundation of a company’s corporate culture nearly always resides in its dedication to certain core values and the bar it sets for ethical behavior.
Case:
Epic Systems Corporation creates software to support record keeping for mid- to large-sized health care organizations, such as hospitals and managed care organizations. Founded in 1979 by CEO Judith Faulkner, the company claims that its software is “quick to implement, easy to use and highly interoperable through industry standards.” Widely recognized for superior products and high levels of customer satisfaction, Epic won the Best Overall Software Suite award for the sixth consecutive year—a ranking determined by health care professionals and compiled by KLAS, a provider of company performance reviews. Part of this success has been attributed to Epic’s strong corporate culture—one based on the slogan “Do good, have fun, make money.” By remaining true to its 10 commandments and principles, its homegrown version of core values, Epic has nurtured a work climate where employees are on the same page and all have an overarching standard to guide their actions.
Epic’s 10 Commandments:
Do not go public.
Do not be acquired.
Software must work.
Expectations = reality.
Keep commitments.
Focus on competency. Do not tolerate mediocrity.
Have standards. Be fair to all.
Have courage. What you put up with is what you stand for.
Teach philosophy and culture.
Be frugal. Do not take on debt for operations.
Epic’s Principles:
Make our products a joy to use.
Have fun with customers.
Design in collaboration with users.
Make it easy for users to do the right thing.
Improve the patient’s health and healthcare experience.
Generalize to benefit more.
Follow processes. Find root causes. Fix processes.
Dissent when you disagree; once decided, support.
Do what is difficult for us if it makes things easier for our users.
Escalate problems at the start, not when all hell breaks loose.
Epic fosters this high-performance culture from the get-go. It targets top-tier universities to hire entry-level talent, focusing on skills rather than personality. A rigorous training and orientation program indoctrinates each new employee. In 2002, Faulkner claimed that someone coming straight from college could become an “Epic person” in three years, whereas it takes six years for someone coming from another company. This culture positively affects Epic’s strategy execution because employees are focused on the most important actions, there is peer pressure to contribute to Epic’s success, and employees are genuinely excited to be involved. Epic’s faith in its ability to acculturate new team members and stick true to its core values has allowed it to sustain its status as a premier provider of health care IT systems.
Note: Developed with Margo Cox.
Sources: Company website; communications with an Epic insider; “Epic Takes Back ‘Best in KLAS’ title,” Healthcare IT News, January 29, 2015, www.healthcareitnews.com/news/epic-takes-back-best-klas; “Epic Systems’ Headquarters Reflect Its Creativity, Growth,” Boston Globe, July 28, 2015, www.bostonglobe.com/business/2015/07/28/epic-systems-success-like-its-headquarters-blend-creativity-and-diligence/LpdQ5m0DDS4UVilCVooRUJ/story.html(accessed December 5, 2015).
In: Operations Management
grocery prices seem to keep going up. a market researcher was asked to interview 65 shoppers and ask how much each spent per week to feed their family. the average amount was 166.50 with a std. deviation of $49.10. construct the 90%, 95% and 99% confidence interval for the true mean amount spent on weekly groceries.
In: Statistics and Probability