Arrow Co. entered into a contract with a customer for $410,000. The contract is for the delivery of equipment and a three-year service maintenance contract for the equipment. Arrow sells separately the equipment for a selling price of $400,000, and the maintenance contract for three years for $50,000. The equipment was delivered on 1 June 1 20X1. Arrow has a 30 November year-end.
Required:
Prepare the journal entries required to record the revenue related to this contract during the period 1 June 20X1 to 30 November 20X1.
In: Accounting
The capital investment for a new highway paving machine is $950000. This expense is estimated, in year zero dollars, is $92600. This expense is estimated to increase at the rate of 5.7% per year. Assume that f=4.5%, N=7 years, MV at the end of the year 7 is 10% of the capital investment, and the MARR (in real terms) is 10.05% per year. What uniform annual revenue (before taxes), in actual dollars, would machine need to generate to break even?
f is the inflation rate
In: Finance
According to the SEC, “[A]s part of the cover up, Peregrine personnel wrote off millions of dollars in uncollectible—primarily sham—receivables, to acquisition-related accounts” (LR 18205A).
1. Explain how this would affect the signal of CFFO lagging, or falling behind, operating income that would normally indicate an overstatement of revenue.
2. Explain how the improper write-off of accounts receivable as “acquisition costs” would affect the signal of accounts receivable increasing as a percentage of sales.
In: Accounting
The following data are from the accounting records of Niles Castings for year 2.
| Units produced and sold | 88,000 | ||
| Total revenues and costs | |||
| Sales revenue | $ | 340,000 | |
| Direct materials costs | 70,000 | ||
| Direct labor costs | 36,000 | ||
| Variable manufacturing overhead | 17,000 | ||
| Fixed manufacturing overhead | 43,000 | ||
| Variable marketing and administrative costs | 16,500 | ||
| Fixed marketing and administrative costs | 37,000 | ||
a. Prepare a gross margin income statement.
b. Prepare a contribution margin income statement.
In: Accounting
Suppose that an oil well is expected to produce 12, 00,000 barrels of oil during its first production year. However, its subsequent production (yield) is expected to decrease by 9% over the previous year's production. The oil well has a proven reserve of 10,500,000 barrels. Suppose that the price of oil is expected to be $120 per barrel for the next six years. What would be the present worth of the anticipated revenue trim at an interest rate of 10% compounded annually over the next six years?
In: Economics
Assume the following information
180 day US interest rate = 8%
180 day British interest rate = 9%
180 day forward rate of British pound = 1.50
Spot rate of British pound = 1.48
Assume that Riverside Corp. from the United States will receive 400,000 pounds in 180 days. Would it be better off using forward hedge or a money market hedge? Substantiate your answer with estimated revenue for each type of hedge and show all work.
In: Finance
In 2018, the Westgate Construction Company entered into a contract to construct a road for Santa Clara County for $10,000,000. The road was completed in 2020. Information related to the contract is as follows: 2018 2019 2020 Cost incurred during the year $ 2,044,000 $ 2,628,000 $ 2,890,800 Estimated costs to complete as of year-end 5,256,000 2,628,000 0 Billings during the year 2,170,000 2,502,000 5,328,000 Cash collections during the year 1,885,000 2,600,000 5,515,000 Westgate recognizes revenue over time according to percentage of completion. Required:
In: Accounting
7. Assume you have completed a capital budgeting analysis of building a new plant on land you own, and the project's NPV is $100 million. You now realize that instead of building the plant, you could build a parking garage, and would generate a pre tax revenue of $17 million. The project would last 3 years, the corporate tax rate is 40%, and the WACC is 12%. What is the new NPV of the project, after incorporating the effect of the opportunity cost?
In: Finance
what is the definition of elasticity of
demand?
formula?
each of the following cases, indicate which could you think has a relatively more price elastic demand and identify the reason (more substitutes bigger share of the budget or more times to adjust)
:motorcycles or Harley Davidsons
:peanut butter or housing
:your electric bill this month or over the entire year
If TAXI fares rise what will happen to the total revenue received by taxi operators assuming that the elasticity of demand for TAXI fares is elastic?
In: Economics
Suppose a market is characterized by the following:
QD = 1,500-3P
QS = -500+2P
A) Determine the equilibrium price and quantity .
B) Graph the equilibrium price and quantity in part A)
C) Suppose the government imposes a per-unit tax of 5 (ie. 5 dollars in tax on every unit
purchased) on buyers. Solve for the new equilibrium price and quantity. HINT: There are
two prices and one quantity to solve for. .
D) Determine the total amount of tax revenue collected by the per-unit tax in B) .
In: Economics