On January 1, 2018, the general ledger of a company includes the following account balances: Accounts Debit Credit Cash $ 87,000 Accounts Receivable 56,000 Allowance for Uncollectible Accounts $ 5,000 Inventory 47,000 Building 87,000 Accumulated Depreciation 27,000 Land 217,000 Accounts Payable 37,000 Notes Payable (6%, due in 3 years) 54,000 Common Stock 117,000 Retained Earnings 254,000 Totals $ 494,000 $ 494,000 The company accounts for all inventory transactions using the perpetual FIFO method. Purchases and sales of inventory are recorded using the gross method for cash discounts. The $47,000 beginning balance of inventory consists of 470 units, each costing $100. During January 2018, the company had the following transactions: During January 2018, the following transactions occur: January 2 Lent $37,000 to an employee by accepting 6% note due in six months. January 5 Purchased 5,200 units of inventory on account for $520,000 ($100 each) with terms 1/10, n/30. January 8 Returned 110 defective units of inventory purchased on January 5. January 15 Sold 5,000 units of inventory on account for $600,000 ($120 each) with terms 2/10, n/30. January 17 Customers returned 100 units sold on January 15. These units are placed in inventory to be sold in the future. January 20 Received cash from customers on accounts receivable. This amount includes $53,000 from 2017 plus amount receivable on sale of 4,500 units sold on January 15. January 21 Wrote off remaining accounts receivable from 2017. January 24 Paid on accounts payable. The amount includes the amount owed at the beginning of the period plus the amount owed from purchase of 4,800 units on January 5. January 28 Paid cash for salaries during January, $45,000. January 29 Paid cash for utilities during January, $27,000. January 30 Paid dividends, $6,000. The following information is available on January 31, 2018. Of the remaining accounts receivable, the company estimates that 10% will not be collected. Accrued interest income on notes receivable for January. Accrued interest expense on notes payable for January. Accrued income taxes at the end of January for $6,700. Depreciation on the building, $3,700.
Record each of the transactions listed above in the 'General Journal' tab (these are shown as items 1 - 13) assuming a FIFO perpetual inventory system. The transaction on January 30 requires two entries: one to record sales revenue and one to record cost of goods sold. Review the 'General Ledger' and the 'Trial Balance' tabs to see the effect of the transactions on the account balances. Record adjusting entries on January 31. in the 'General Journal' tab (these are shown as items 14-18). Record the closing entries in the 'General Journal' tab (these are shown as items 19 and 20). (The company prepares closing entries by closing the appropriate accounts directly to Retained Earnings. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
In: Accounting
The Concord Company recently moved to activity-based costing and implemented customer profitability analysis. In doing so, they found that one of their oldest customers, The Mequon Company, is not profitable. The Mequion Company is small and the management of Concord knows they are very reliant on products from Concord and that they can't absorb a significant increase from Concord, which is needed to make them profitable.
1. What would you recommend if you were part of The Concord Company management team?
2. Because of their long relationship, does The Concord Company have a moral obligation to help them staying in business?
In: Accounting
company
Nike
Take some time to review the website of the company you’ve selected. What is the company’s mission? (2 pt)
Customer Focus: Who are your company's customers? What are some of the unique things the company does to provide superb customer service? (2 pt)
List your company’s main competitors (2 pt)
Review Porter’s Strategies for Competitive Advantage. Which of the strategies does your selected company use? Explain why you’ve the selected this strategy. (2 pts)
List at least one way your selected company uses technology? (2 pt)
In: Computer Science
Please answer question 1. Thank you.
You and your team are financial consultants who have been hired by a large, publicly traded electronics firm, Brilliant Electronics (BE), a leader in its industry. The company is looking into manufacturing its new product, a machine using sophisticated state of the art technology developed by BE’s R&D team, overseas. This overseas project will last five years. They’ve asked you to evaluate this project and to make a recommendation about whether or not the company should pursue it. BE’s management team needs your recommendation and the analysis used to arrive at it by no later than April 10, 2020.
The following market data on BE’s securities are current:
Debt: 210,000 6.4 percent coupon bonds outstanding, 25 years to maturity, selling or 108 percent of par; the bonds have $1000 par value each and make semi-annual payments
Common Stock: 8,300,000 shares outstanding, selling for $68 per share; beta=1.1
Preferred Stock: 450,000 shares of 4.5% preferred stock outstanding, selling or $81 per share
Market: 7 percent expected market risk premium; 3.5 percent risk-free rate
The company bought some land three years ago for $3.9 million in anticipation of using it as a toxic dump site for waste chemicals, but it built a piping system to safely discard the chemicals instead. The land was appraised last week for $4.4 million on an after-tax basis. In five years, the after-tax value of the land will be $4.8 million, but the company expects to keep the land for a future project. The company wants to build its new manufacturing plant on this land; the plant will cost $37 million to build.
At the end of the project (the end of year 5), the plant can be scrapped for $5.1 million. The manufacturing plant will be depreciated using the straight line method.
The company will incur $6,700,000 in annual fixed costs excluding depreciation. The plan is to manufacture 15,300 machines per year and sell them at $11,450 per machine; the variable production costs are $9,500 per machine. Selling price and costs are expected to remain unchanged over the life of the project.
BE uses PK Global (PKG) as its lead underwriter. PKG charges BE spreads of 8% on new common stock issues, 6% on new preferred stock issues, and 4% on new debt issues. PKG has included all direct and indirect issuance costs (along with its profit) in setting these spreads. BE’s tax rate is 35 percent. The project requires $1,300,000 in initial net working capital investment to get operational. Assume BE raises all equity for new projects externally (that is, BE does not use retained earnings).
The weighted average flotation cost is the sum of the weight of each source of funds in the capital structure of the company times the flotation costs, so:
fT = ($564.4/$827.65)(0.08) + ($36.45/$827.65)(0.06) + ($226.8/$827.65)(0.04) = 0.0682, or 6.82%
Thus the initial investment is increased by the amount of flotation costs:
(Amount raised)(1 – 0.0682) = $37,000,000
Amount raised = $37,000,000/(1 – 0.0682) = $39,708,092
a. A one-page executive summary for the CEO and CFO that provides the client with your recommendation regarding the project and the analysis that supports it.
b. The main body of the report which contains Excel spreadsheets and/or other supporting documentation that the CFO can review in order to gain a thorough understanding of your analysis and to assess its quality and accuracy. This documentation should explain how the consulting team calculated its answers to 1-4 below. It should be labeled in a manner that makes it easy to follow. Your analysis should include, and your recommendation should be based on, the following:
1) What is the NPV and IRR of the project? You will use these calculations to support your recommendation.
In: Finance
Denzel Brooks opened a Web consulting business called Venture
Consultants and completed the following transactions in
March.
| March | 1 | Brooks invested $175,000 cash along with $25,000 in office equipment in the company in exchange for common stock. | ||
| 2 | The company prepaid $9,000 cash for six months' rent for an office. Hint: Debit Prepaid Rent for $9,000. | |||
| 3 | The company made credit purchases of office equipment for $3,900 and office supplies for $1,800. Payment is due within 10 days. | |||
| 6 | The company completed services for a client and immediately received $4,500 cash. | |||
| 9 | The company completed a $10,700 project for a client, who must pay within 30 days. | |||
| 12 | The company paid $5,700 cash to settle the account payable created on March 3. | |||
| 19 | The company paid $6,500 cash for the premium on a 12-month insurance policy. Hint: Debit Prepaid Insurance for $6,500. | |||
| 22 | The company received $4,100 cash as partial payment for the work completed on March 9. | |||
| 25 | The company completed work for another client for $3,900 on credit. | |||
| 29 | The company paid a $5,500 cash dividend. | |||
| 30 | The company purchased $1,400 of additional office supplies on credit. | |||
| 31 | The company paid $600 cash for this month's utility bill. |
Required:
1. Prepare general journal entries to record these
transactions using the following titles: Cash (101); Accounts
Receivable (106); Office Supplies (124); Prepaid Insurance (128);
Prepaid Rent (131); Office Equipment (163); Accounts Payable (201);
Common Stock (307); Dividends (319); Services Revenue (403); and
Utilities Expense (690).
2. Post the journal entries from part 1 to the
ledger accounts.
3. Prepare a trial balance as of the end of
March.
In: Accounting
Karla Tanner opened a Web consulting business called Linkworks
and completed the following transactions in its first month of
operations.
| April | 1 | Tanner invested $100,000 cash along with office equipment valued at $24,000 in the company in exchange for common stock. | ||
| 2 | The company prepaid $7,200 cash for 12 months’ rent for office space. Hint: Debit Prepaid Rent for $7,200. | |||
| 3 | The company made credit purchases for $12,000 in office equipment and $2,400 in office supplies. Payment is due within 10 days. | |||
| 6 | The company completed services for a client and immediately received $2,000 cash. | |||
| 9 | The company completed a $8,000 project for a client, who must pay within 30 days. | |||
| 13 | The company paid $14,400 cash to settle the account payable created on April 3. | |||
| 19 | The company paid $6,000 cash for the premium on a 12-month insurance policy. Hint: Debit Prepaid Insurance for $6,000. | |||
| 22 | The company received $6,400 cash as partial payment for the work completed on April 9. | |||
| 25 | The company completed work for another client for $2,640 on credit. | |||
| 28 | The company paid a $6,200 cash dividend. | |||
| 29 | The company purchased $800 of additional office supplies on credit. | |||
| 30 | The company paid $700 cash for this month’s utility bill. |
Required:
1. Prepare general journal entries to record these
transactions using the following titles: Cash (101); Accounts
Receivable (106); Office Supplies (124); Prepaid Insurance (128);
Prepaid Rent (131); Office Equipment (163); Accounts Payable (201);
Common Stock (307); Dividends (319); Services Revenue (403); and
Utilities Expense (690).
2. Post the journal entries from part 1 to the
ledger accounts.
3. Prepare a trial balance as of April 30.
In: Accounting
Denzel Brooks opened a Web consulting business called Venture
Consultants and completed the following transactions in
March.
| March | 1 | Brooks invested $150,000 cash along with $22,000 in office equipment in the company in exchange for common stock. | ||
| 2 | The company prepaid $6,000 cash for six months’ rent for an office. (Hint: Debit Prepaid Rent for $6,000.) | |||
| 3 | The company made credit purchases of office equipment for $3,000 and office supplies for $1,200. Payment is due within 10 days. | |||
| 6 | The company completed services for a client and immediately received $4,000 cash. | |||
| 9 | The company completed a $7,500 project for a client, who must pay within 30 days. | |||
| 12 | The company paid $4,200 cash to settle the account payable created on March 3. | |||
| 19 | The company paid $5,000 cash for the premium on a 12-month insurance policy. (Hint: Debit Prepaid Insurance for $5,000.) | |||
| 22 | The company received $3,500 cash as partial payment for the work completed on March 9. | |||
| 25 | The company completed work for another client for $3,820 on credit. | |||
| 29 | The company paid $5,100 cash in dividends. | |||
| 30 | The company purchased $600 of additional office supplies on credit. | |||
| 31 | The company paid $500 cash for this month’s utility bill. |
Required:
1. Prepare general journal entries to record these
transactions using the following titles: Cash (101); Accounts
Receivable (106); Office Supplies (124); Prepaid Insurance (128);
Prepaid Rent (131); Office Equipment (163); Accounts Payable (201);
Common Stock (307); Dividends (319); Services Revenue (403); and
Utilities Expense (690).
2. Post the journal entries from part 1 to the
ledger accounts.
3. Prepare a trial balance as of the end of
March.
In: Accounting
Denzel Brooks opened a Web consulting business called Venture
Consultants and completes the following transactions in
March.
| March | 1 | Brooks invested $155,000 cash along with $21,000 n office equipment in the company in exchange for common stock. | ||
| 2 | The company prepaid $9,000 cash for six months' rent for an office. (Hint: Debit Prepaid Rent for $9,000.) | |||
| 3 | The company made credit purchases of office equipment for $2,600 and office supplies for $1,600. Payment is due within 10 days. | |||
| 6 | The company completed services for a client and immediately received $5,500 cash. | |||
| 9 | The company completed a $7,400 project for a client, who must pay within 30 days. | |||
| 12 | The company paid $4,200 cash to settle the account payable created on March 3. | |||
| 19 | The company paid $6,000 cash for the premium on a 12-month insurance policy. (Hint: Debit Prepaid Insurance for $6,000.) | |||
| 22 | The company received $3,500 cash as partial payment for the work completed on March 9. | |||
| 25 | The company completed work for another client for $5,290 on credit. | |||
| 29 | The company paid $5,700 cash in dividends. | |||
| 30 | The company purchased $1,200 of additional office supplies on credit. | |||
| 31 | The company paid $900 cash for this month's utility bill. |
Required:
1. Prepare general journal entries to record these
transactions using the following titles: Cash (101); Accounts
Receivable (106); Office Supplies (124); Prepaid Insurance (128);
Prepaid Rent (131); Office Equipment (163); Accounts Payable (201);
Common Stock (307); Dividends (319); Services Revenue (403); and
Utilities Expense (690).
2. Post the journal entries from part 1 to the
ledger accounts.
3. Prepare a trial balance as of the end of
March.
In: Accounting
Karla Tanner opened a Web consulting business called Linkworks
and completed the following transactions in its first month of
operations.
| April | 1 | Tanner invested $110,000 cash along with office equipment valued at $26,400 in the company in exchange for common stock. | ||
| 2 | The company prepaid $7,200 cash for 12 months’ rent for office space. Hint: Debit Prepaid Rent for $7,200. | |||
| 3 | The company made credit purchases for $13,200 in office equipment and $2,640 in office supplies. Payment is due within 10 days. | |||
| 6 | The company completed services for a client and immediately received $2,000 cash. | |||
| 9 | The company completed a $8,800 project for a client, who must pay within 30 days. | |||
| 13 | The company paid $15,840 cash to settle the account payable created on April 3. | |||
| 19 | The company paid $6,000 cash for the premium on a 12-month insurance policy. Hint: Debit Prepaid Insurance for $6,000. | |||
| 22 | The company received $7,040 cash as partial payment for the work completed on April 9. | |||
| 25 | The company completed work for another client for $2,640 on credit. | |||
| 28 | The company paid a $6,200 cash dividend. | |||
| 29 | The company purchased $880 of additional office supplies on credit. | |||
| 30 | The company paid $700 cash for this month’s utility bill. |
Required:
1. Prepare general journal entries to record these
transactions using the following titles: Cash (101); Accounts
Receivable (106); Office Supplies (124); Prepaid Insurance (128);
Prepaid Rent (131); Office Equipment (163); Accounts Payable (201);
Common Stock (307); Dividends (319); Services Revenue (403); and
Utilities Expense (690).
2. Post the journal entries from part 1 to the
ledger accounts.
3. Prepare a trial balance as of April 30.
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Question 1 of 8 Total1
In: Accounting
Denzel Brooks opened a Web consulting business called Venture
Consultants and completes the following transactions in
March.
| March | 1 | Brooks invested $185,000 cash along with $29,000 n office equipment in the company in exchange for common stock. | ||
| 2 | The company prepaid $8,500 cash for six months' rent for an office. (Hint: Debit Prepaid Rent for $8,500.) | |||
| 3 | The company made credit purchases of office equipment for $2,600 and office supplies for $2,500. Payment is due within 10 days. | |||
| 6 | The company completed services for a client and immediately received $3,000 cash. | |||
| 9 | The company completed a $8,900 project for a client, who must pay within 30 days. | |||
| 12 | The company paid $5,100 cash to settle the account payable created on March 3. | |||
| 19 | The company paid $7,100 cash for the premium on a 12-month insurance policy. (Hint: Debit Prepaid Insurance for $7,100.) | |||
| 22 | The company received $3,200 cash as partial payment for the work completed on March 9. | |||
| 25 | The company completed work for another client for $3,750 on credit. | |||
| 29 | The company paid $7,300 cash in dividends. | |||
| 30 | The company purchased $600 of additional office supplies on credit. | |||
| 31 | The company paid $800 cash for this month's utility bill. |
Required:
1. Prepare general journal entries to record these
transactions using the following titles: Cash (101); Accounts
Receivable (106); Office Supplies (124); Prepaid Insurance (128);
Prepaid Rent (131); Office Equipment (163); Accounts Payable (201);
Common Stock (307); Dividends (319); Services Revenue (403); and
Utilities Expense (690).
2. Post the journal entries from part 1 to the
ledger accounts.
3. Prepare a trial balance as of the end of
March.
In: Accounting