Questions
Mamas & Papas, Inc. issues 7%, 10-year bonds with a face amount of $80,000 for $74,564...

Mamas & Papas, Inc. issues 7%, 10-year bonds with a face amount of $80,000 for $74,564 on January 1, 2020. The market interest rate for bonds of similar risk and maturity is 8%. Interest is paid semiannually on June 30 and December 31.


1. Record the bond issue in the journal.

2. Record in the journal the first interest payment on June 30, 2020.

In: Accounting

What could be a possible problem Mr Omar Al Balushi face if he goes ahead with...

What could be a possible problem Mr Omar Al Balushi face if he goes ahead with his decision on recruiting a marketing manager in management t am? Does he have any other option if the management refuses to recruit a marketing manager so to bring the change in company philosophy and behaviour toward marketing?


Omar Al Balushi, the senior executive of ACT Technology Company, was saying to himself, "One more year has gone without making a good profit and if it continues at this pace, so soon the company will go bankrupt". He added, "profit has decreased by 15% in a market of 20% of growth per annum."
Omar Al Balushi, who has been a senior executive at ACT Technology company, witnessed a decrease in sales and profit for the last three years. ACT Technology, which is based in Muscat, manufactures sophisticated electromechanical control devices for factory production lines, more specifically, ACT Technology is specialized in producing control devices only for chemical manufacturing facilities. The products suit to chemical processing plan which provides safety and cut-out mechanisms.
ACT Technology products are sold across all the GCC counties and middle east though salesforces based in the capitals of these countries; 12 salesforces based in Riyadh, Abu-Dhabi, Dubai, Kuwait city, Manamah, Doha, Beruit, Amman, Muscat, Jeddah and Tehran. As can be seen from the previous geographic distribution the focus is on the major cities in the region and all of the sales representatives are qualified, mechanical engineers. Despite the fact that 95% of ACT Technology sales come from the chemical industry, the electrochemical control device has many applications in a wide variety of industries.
For the reason to do with the history of the company, the owner (Mr Bala Bathichara) of the company, who happened to be an engineer, found an opportunity in such a device. His father in law who was a rich man doing business in the detergent industry supported him by being one of his first customers and a generous financer of Bala's project. However, nowadays, Mr Bala is not anymore in the executive position, but he still maintains the company financial affairs. Mr Bala's philosophy on business felt among the company's executive team.
The excellence in products and production is the essence of Mr Bala's Philosophy which is backed by strong technical sales support. He believed that if products are well designed and produced in high-quality, there will always be a market. It is self-evident that such type of products required for salespeople to push the products by showing the consequences of not buying the safety mechanisms which may result in damage to the clients manufacturing process. Therefore, the technical salespeople used to emphasize the negative aspect (of not having such device) rather than the positive aspects (of how good, they were, time-saving in the case of plant breakdown, etc). This technique of sales was pivotal to the success of ACT Technology sales strategy, according to Mr Bala. The embedment of the philosophy in salespeople is still clear in their behaviour, decision-making process and sales approaches unless most of customers' show no interest in updating their control equipment.
Few thousands of Rials spent on advertisement and sales promotion, however, from time to time, whenever there was a surplus of cash, Mr Bala would have spent on advertising in the local magazine " Y-Magazine". Due to the associated expenses, the company follows a cost-plus pricing structure basis, fixed prices by the accounting department. In other words, the company salespeople given no room to negotiate the price with clients. Hence, a disappointment has prevailed among the salespeople for not being able to negotiate with clients over price and delivery terms as per the customers' requirement because Bala's philosophy prevails, " If they wanted the product badly enough, they will wait for it, and Why offer a discount for large quantities - if they did not want that many they would not order them".
During the last few years, many competitors from the GCC countries entered the market. In plain English, the market became so competitive and thus, the ACT Technology market share dropped sharply. ACT Technology used to be the traditional supplier of the device across the GCC countries. However, the new competitors introduced updated and innovative devices based on the new advancement in electronics. However, ACT Technology management believed in the superiority of their products/device, therefore believing once the trend of novelty is worn off, the customers will revert to ACT.
Unlike many of his colleagues, Al Balushi was worried by developments over the past five years and felt there was a need for many changes. He was aware that the more successful new entrants to the industry had introduced a marketing philosophy into their operations. Compared with ten years ago in this type of business, it was now common practice for companies to appoint marketing managers. Furthermore, he knew from talking to other people in the industry that such companies considered sales to be an integral part of marketing. At a recent meeting with his senior staff, he mentioned to the sales manager the possibility of appointing a marketing director. The sales manager, who was shortly expecting to be made sales director, was scathing about the idea. His view was that marketing was suitable for a baked beans manufacturer but not for a company engaged in the manufacture and sale of sophisticated control devices for the chemicals industry. He argued that ACT Technology customers would not be swayed by superficial advertising and marketing ploys.
Now, Mr Omar Al Balushi is intending to appoint a marketing manager based on the recent figures which strongly indicate that a change must be brought in the management philosophy and the way sales are functioned at ACT technology; he needed a marketing manager has marketing experience but has come from the chemical industry. The person appointed would have equal status to the sales manager, and ultimately either the new appointee or the existing sales manager would be promoted to the board of directors.

In: Economics

On January 1, 2020 Beaver Inc. determines that it wants to purchase 2,000 tons of wheat...

On January 1, 2020 Beaver Inc. determines that it wants to purchase 2,000 tons of wheat in January 2021. Thus, Beaver Inc. enters into a futures contract that gives Beaver Inc. the right and obligation to purchase 2,000 tons of wheat for $75 per ton. The contract is classified as a cash flow hedge and expires in January 2021.

Required:

1. On January 1, 2020 the market price for a ton of wheat is $75. What journal entry does Beaver Inc. record associated with this hedge on this date?

2. On June 30, 2020 the market price for a ton of wheat is $90. What journal entry does Beaver Inc. record associated with this hedge on this date?

3. On December 31, 2020 the market price for a ton of wheat is $70. What journal entry does Beaver Inc. record associated with this hedge on this date?

4. On January 1, 2021 Beaver Inc. purchases 2,000 tons of wheat at the market price of $70 and settles the hedge. What journal entries does Beaver Inc. record associated with its purchased of wheat and its hedge on this date?

In: Finance

Laura Leasing Company signs an agreement on January 1, 2020, to lease equipment to Windsor Company....

Laura Leasing Company signs an agreement on January 1, 2020, to lease equipment to Windsor Company. The following information relates to this agreement. 1. The term of the non-cancelable lease is 3 years with no renewal option. The equipment has an estimated economic life of 5 years. 2. The fair value of the asset at January 1, 2020, is $66,000. 3. The asset will revert to the lessor at the end of the lease term, at which time the asset is expected to have a residual value of $5,000, none of which is guaranteed. 4. The agreement requires equal annual rental payments of $21,328 to the lessor, beginning on January 1, 2020. 5. The lessee’s incremental borrowing rate is 5%. The lessor’s implicit rate is 4% and is unknown to the lessee. 6. Windsor uses the straight-line depreciation method for all equipment.

Prepare an amortization schedule that would be suitable for the lessee for the lease term

Prepare all of the journal entries for the lessee for 2020 and 2021 to record the lease agreement, the lease payments, and all expenses related to this lease. Assume the lessee’s annual accounting period ends on December 31

In: Accounting

Calculate a price index for 2018, 2019, and 2020 using the following information about prices. Let...

Calculate a price index for 2018, 2019, and 2020 using the following information about prices. Let the market basket consist of the price of one pizza pie, two sodas, and four caffe lattes. Let the year 2018 be the base year (with an index value of 100). See the instruction video, "inflation.ppsm".

Year

Price of a pizza

Price of a Soda

Price of a Caffe Latte

2018

2019

2020

$6.00

$6.50

$7.0

$0.50

$0.55

$0.65

$1.50

$2.20

$2.60

A. Calculate the price index for each year. To compute the price index for each year, you must first compute cost of market basket for each year (Show mathematical steps in detail to receive full credits).

B. How much inflation occurred between 2018 and 2019? Between 2018 and 2020? In other words, what is the change in the price index between 2018 vs 2019 and 2018 vs 2020?

1. Show mathematical steps in detail

2. interpret what the computed numbers (inflation rate) indicate in detail

In: Economics

On July 1, 2020, IBM Inc. purchased a 3-year, $50,000 bond with a June 30, 2023...

  1. On July 1, 2020, IBM Inc. purchased a 3-year, $50,000 bond with a June 30, 2023 maturity date. The bond’s stated rate of interest was 5%, paid semiannually (June 30 and December 31). The bond was purchased at face value for $50,000 and properly reported as a trading security.

    The fair market value of the bond purchased by IBM was $51,000 on December 31, 2020.

    What was the balance in the Securities Fair Value Adjustment account at December 31, 2020? What was the net dollar impact of the adjustment to the SFVA Adjustment account on 2020 income before income taxes?

    SFVA Balance: $1,000 Cr

    Effect of Net Income: no effect

    SFVA Balance: $1,000 Cr

    Effect of Net Income: $1,000 increase

    SFVA Balance: $1,000 Dr

    Effect of Net Income: $1,000 increase

    None of the other answer choices is correct.

    SFVA Balance: $1,000 Dr

    Effect of Net Income: $1,000 decrease

    SFVA Balance: $1,000 Dr

    Effect of Net Income: no effect

    SFVA Balance: $1,000 Cr

    Effect of Net Income: $1,000 decrease

In: Accounting

Exercise 20-09 (Part Level Submission) Sheffield Enterprises provides the following information relative to its defined benefit...

Exercise 20-09 (Part Level Submission) Sheffield Enterprises provides the following information relative to its defined benefit pension plan.

Balances or Values at December 31, 2020

Projected benefit obligation $2,726,200

Accumulated benefit obligation 1,996,100

Fair value of plan assets 2,263,000

Accumulated OCI (PSC) 210,000

Accumulated OCI—Net loss (1/1/20 balance, 0) 45,900

Pension liability 463,200

Other pension plan data for 2020: Service cost $94,200

Prior service cost amortization 42,100

Actual return on plan assets 130,000

Expected return on plan assets 175,900

Interest on January 1, 2020, projected benefit obligation 250,700

Contributions to plan 92,300 Benefits paid 139,800

(c)

Your answer is incorrect. Try again.

Compute the amount of accumulated other comprehensive income reported at December 31, 2020. (Enter loss using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Accumulated other comprehensive income (loss) $

In: Accounting

. Complete the required tasks utilizing excel and label everything. All work must be shown FKG...

. Complete the required tasks utilizing excel and label everything. All work must be shown

FKG Inc. carries the following debt and equity securities on its books at December 31, 2020. All securities were purchased during 2020.

Trading Securities

Company                                                                   Cost                            Fair Value, 12/31/20        Fair Value, 12/31/21

Company A Investment                                      $ 25,000                $ 13,000                                  $ 20,000

Company B Investment                                      $ 13,000                $ 20,000                                  $ 20,000

Company C Investment                                      $ 35,000                $30,000                                   $ 25,000

Available-for-Sale Securities

Company                                                                     Cost                          Fair Value, 12/31/20        Fair Value, 12/31/21

Company X Investment                                      $210,000              $130,000                                $ 50,000

Company Y Investment                                       $ 50,000                $60,000                                   $ 70,000

Required:
  1. Prepared ALL the necessary journal entries for FKG on December 31, 2020 AND December 31, 2021
  2. What net effect would the valuation of these debt and equity investments have on 2020 net income?
  3. What net effect would the valuation of these debt and equity investments have on 2021 net income?

In: Accounting

Teal Corp. sponsors a defined benefit pension plan for its employees. On January 1, 2020, the...

Teal Corp. sponsors a defined benefit pension plan for its employees. On January 1, 2020, the following balances relate to this plan.
Plan assets $489,900
Projected benefit obligation 616,700
Pension asset/liability 126,800
Accumulated OCI (PSC) 95,600 Dr.

As a result of the operation of the plan during 2020, the following additional data are provided by the actuary.
Service cost $86,900
Settlement rate, 9%
Actual return on plan assets 57,100
Amortization of prior service cost 19,500
Expected return on plan assets 54,000
Unexpected loss from change in projected benefit obligation,
   due to change in actuarial predictions		 77,700
Contributions 103,700
Benefits paid retirees 88,900

Using the data above, compute pension expense for Teal Corp. for the year 2020 by preparing a pension worksheet. (Enter all amounts as positive.)

Prepare the journal entry for pension expense for 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

In: Accounting

Teal Corp. sponsors a defined benefit pension plan for its employees. On January 1, 2020, the...

Teal Corp. sponsors a defined benefit pension plan for its employees. On January 1, 2020, the following balances relate to this plan.
Plan assets $489,900
Projected benefit obligation 616,700
Pension asset/liability 126,800
Accumulated OCI (PSC) 95,600 Dr.

As a result of the operation of the plan during 2020, the following additional data are provided by the actuary.
Service cost $86,900
Settlement rate, 9%
Actual return on plan assets 57,100
Amortization of prior service cost 19,500
Expected return on plan assets 54,000
Unexpected loss from change in projected benefit obligation,
   due to change in actuarial predictions		 77,700
Contributions 103,700
Benefits paid retirees 88,900

Using the data above, compute pension expense for Teal Corp. for the year 2020 by preparing a pension worksheet. (Enter all amounts as positive.)

Prepare the journal entry for pension expense for 2020. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

In: Accounting