"A firm is considering purchasing a computer system. -Cost of system is $174,000. The firm will pay for the computer system in year 0. -Project life: 5 years -Salvage value in year 0 (constant) dollars: $18,000 -Depreciation method: five-years MACRS -Marginal income-tax rate = 41% (remains constant over time) -Annual revenue = $165,000 (year-0 constant dollars) -Annual expenses (not including depreciation) = $99,000 (year-0 constant dollars) -The general inflation rate is 2.7% during the project period (which will affect all revenues, expenses, and the salvage value but not depreciation). -The firm borrows the entire $174,000 at 8% interest to be repaid in 2 annual payments. The debt interest paid and the principal payment SHOULD NOT be changed by the inflation rate. Lending agencies set the interest rate of borrowing to account for the inflation rate. Calculate the effects of borrowing and include the debt interest paid and the principal repayment into the income statement and cash flow statement. Determine the INFLATION-FREE IRR' of the computer system. Enter your answer as a percentage between 0 and 100."

The Collins Corporation purchased office equipment at the beginning of 2019 and capitalized a cost of $2,308,000. This cost included the following expenditures:

The company estimated an eight-year useful life for the equipment. No residual value is anticipated. The double-declining-balance method was used to determine depreciation expense for 2019 and 2020.

In 2021, after the 2020 financial statements were issued, the company decided to switch to the straight-line depreciation method for this equipment. At that time, the company’s controller discovered that the original cost of the equipment incorrectly included one year of annual maintenance charges for the equipment.

Required:
1 & 2. Ignoring income taxes, prepare the appropriate correcting entry for the equipment capitalization error discovered in 2021 and any 2021 journal entries related to the change in depreciation methods. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your final answers to the nearest whole dollar.) requirement 3 Record the 2021 adjusting entry for depreciation.

Splish Co. is building a new hockey arena at a cost of $2,600,000. It received a downpayment of $460,000 from local businesses to support the project, and now needs to borrow $2,140,000 to complete the project. It therefore decides to issue $2,140,000 of 12%, 10-year bonds. These bonds were issued on January 1, 2019, and pay interest annually on each January 1. The bonds yield 11%.

Prepare the journal entry to record the issuance of the bonds on January 1, 2019.

Prepare a bond amortization schedule up to and including January 1, 2023, using the effective interest method.

Assume that on July 1, 2022, Splish Co. redeems half of the bonds at a cost of $1,126,600 plus accrued interest. Prepare the journal entry to record this redemption.

A delivery truck was acquired on January 1, 2020, at a cost of $40,600. The truck was originally estimated to have a salvage value of $16,800 and an estimated life of 5 years. Depreciation has been recorded through December 31, 2021, using the straight-line method. On January 1, 2022, the truck’s engine was rebuilt at a cost of $5,000 the estimated salvage value was revised to $15,600 and the useful life was revised to a total of 6 years.

Prepare the journal entry to record depreciation expense for 2022. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Adjusting journal entry at 12/31/22:

New lithographic equipment, acquired at a cost of $940,000 at the beginning of a fiscal year, has an estimated useful life of five years and an estimated residual value of $105,750. The manager requested information regarding the effect of alternative methods on the amount of depreciation expense each year. On the basis of the data presented to the manager, the double-declining-balance method was selected. In the first week of the fifth year, the equipment was sold for $151,924. Required: 1. Determine the annual depreciation expense for each of the estimated five years of use, the accumulated depreciation at the end of each year, and the book value of the equipment at the end of each year by (a) the straight-line method and (b) the double declining- balance method. Round your answers to the nearest whole dollar. 2. On January 1, journalize the entry to record the sale. Refer to the Chart of Accounts for exact wording of account titles. 3. On January 1, journalize the entry to record the sale, assuming that the equipment was sold for $105,874 instead of $151,924. Refer to the Chart of Accounts for exact wording of account titles.

There are many important and interesting extensions of the material in Chapter 13 (cost accounting and reporting) and a lot going on out there beyond the scope of this initial look at Cost Accounting and Reporting. So I’d like you to do a little digging this week for our discussion topic.

I’d like you to choose one of the following three topics (one may interest you more than the others), find an article, provide a summary paragraph, and provide a paragraph on your perspective now as you’ve looked a little deeper into the topic:

- The Value Chain and Strategic Cost Management
- Absorption Costing vs. Direct (Variable) Costing
- Activity-Based Costing

Classify each of the following activities into one of the four cost of quality categories and/or identify it as a value-added or a non-value-added activity.

• Value-added activity
• Non-value-added
• Internal failure cost
• External failure cost
• Appraisal cost
• Prevention cost

a. Rework, due to poor materials, on bicycles at Trek

b. Inspection costs incurred by Walmart on merchandise purchased from Mattel, Inc.

c. Costs incurred by Walmart when merchandise, purchased from Grocers, Inc., spoils in its warehouse before shipping to its stores

d. Work in process inventory wait-and-move time between the lathing and finishing stages in a furniture manufacturing facility.

e. Training for line workers on proper operation of equipment.

f. Recording the number of defects produced each month.

g. Offering customer refunds due to defective products.

h. Waste disposal costs at Kimberly-Clark.

Alpha Systems Ltd. is considering a project with a cost of $160,000 and cash flows of $32,500 per year for the eight-year life of the project

(a) If the risk-free are is 8% and the risk premium is 4%, should the project be accepted?

(b) Suppose the firm used a firm-wide opportunity cost of capital approach. If the opportunity cost of capital is 16% and the risk premium is the same, should the project be accepted?

Q1. The initial cost of constructing a permanent dam (i.e., a dam that is expected to last forever) is $425 million. The annual net benefits will depend on the amount of rainfall: $18 million in a "dry" year, $29 million in a "wet" year and $52 million in a "flood" year. Meteorological records indicate that over the last 100 years there have been 86 "dry" years, 12 "wet" years, and 2 "flood" years.

Assume the annual benefits, measured in real dollars, begin to accrue at the end of the first year. Using the meteorological records as a basis for prediction, what are the net benefits of the dam if the real discount rate is 5 percent?

Q2. Use the following alternative discount rate values (0.01; 0.03; 0.04; 0.06; 0.07) to investigate the sensitivity of the present value of net benefits of the dam in Q1 to the assumed value of the real discount rate. Compute the "breakeven" value of the discount rate, dBE.

Please provide your calcluation.

"A firm is considering purchasing a computer system.
-Cost of system is $182,000. The firm will pay for the computer system in year 0.
-Project life: 4 years
-Salvage value in year 0 (constant) dollars: $23,000
-Depreciation method: five-years MACRS
-Marginal income-tax rate = 41% (remains constant over time)
-Annual revenue = $154,000 (year-0 constant dollars)
-Annual expenses (not including depreciation) = $96,000 (year-0 constant dollars)
-The general inflation rate is 2.1% during the project period (which will affect all revenues, expenses, and the salvage value but not depreciation).
-The firm borrows the entire $182,000 at 7.1% interest to be repaid in 2 annual payments. The debt interest paid and the principal payment SHOULD NOT be changed by the inflation rate. Lending agencies set the interest rate of borrowing to account for the inflation rate.
Calculate the effects of borrowing and include the debt interest paid and the principal repayment into the income statement and cash flow statement. Determine the INFLATION-FREE IRR' of the computer system. Enter your answer as a percentage between 0 and 100."