Research the different nursing care facilities in your community. Discuss the pros and cons of the facility in terms of what they offer. Provide a brief report with the following questions: • What is the basic rate for room, board, and services (it’s a good idea to get this information in writing)? • What services are covered by this rate? • Are there other services available and how much do they cost? • What are the payment policies? • What is the refund policy if someone leaves before the end of a month? • What is the policy for rate increases? • How long has the current administration been in place? • Is there enough staff available to meet my needs? • Is there frequent staff turnover? • Is some level of nursing care provided (RN, LPN, Nursing • Assistant)? How often is it available? • Who will help me with medications if I need it (e.g. reminding me to take them, opening the bottle)? • Can someone administer medications to me if I can’t take them myself (e.g. applying medication to my skin, putting a pill in my mouth)? • Can someone help me if I need special care (e.g. caring for a wound)? • What happens if I have an emergency? Can I get help right away? • Are staffs suitably dressed, personable, and outgoing? • Do the staff members treat residents with respect and dignity? • Do staff members treat each other in a professional manner? • What language does most of the staff speak? • What type of help with personal care is available (e.g. bathing, dressing)? • How flexible is the schedule for receiving help with personal care? • What, if any, transportation services are available? (e.g. medical appointments, shopping, religious services). • Will staff arrange for activities (e.g. hair appointment, concert)? • How does the home support and accommodate personal hobbies? • Are there regularly planned activities that I will enjoy? • Will I be able to attend religious services of my choice? • Can I bring my pet with me when I move? • When can I have visitors? • Are there shops, a library, a park, or other amenities within walking distance? • Is the home close to activities I enjoy? • Is the home on a bus line? • Is there an outside area to sit, walk, or garden? • Are there shops, a library, a park, or other amenities within walking distance? • Is the home close to activities I enjoy? • Is the home on a bus line? • Is there an outside area to sit, walk, or garden? • Is the floor plan easy to follow? • Are doorways, hallways, and rooms accommodating to wheelchairs and walkers? • Are there hand rails to help with walking and in the bathroom? • Are cupboards and shelves easy to reach? • Are there nonskid floors and firm carpets to assist walking? • Does the home have good natural and artificial lighting? • Is the home clean, free of odors, and well heated and cooled? • Does the home meet my standards of cleanliness? • Is the home free from obvious environmental hazards? • Are the home’s rooms clean, safe, and adequate for my needs? • Will I have free use of common areas, such as the kitchen, activity rooms, toilet facilities, dining room, or grounds? • Can I smoke in my room or in common areas? • What furniture is provided? • Can I bring along some of my furniture or other personal items? • Can I adjust the temperature of my room? • Is there a sit-down shower? • Can I have my own personal phone line or internet connection? • Are emergency procedures clearly posted? • Am I able to lock my room and/or are there locked areas in each room for personal valuables? • Is the food pleasing, nutritious, adequate, and attractively served? • What if I don’t like what is being served? • Can I cook in my room? • Are snacks available? • Are there specific meal times or are they flexible? • Is there a refrigerator available to store my personal food? • Will the home meet my dietary or cultural food preferences? • Can I request special foods? • Do other residents socialize with each other and appear happy and comfortable? • Do residents speak favorably of the facility? • Do the residents look like people I want to live with? • How are room changes and roommate concerns addressed? • Is there a resident group that meets? • Do any of the other residents have a history of violent or other problem behaviors? How are these situations handled by staff?

Research the different nursing care facilities in your community. Discuss the pros and cons of the facility in terms of what they offer. Provide a brief report with the following questions: • What is the basic rate for room, board, and services (it’s a good idea to get this information in writing)? • What services are covered by this rate? • Are there other services available and how much do they cost? • What are the payment policies? • What is the refund policy if someone leaves before the end of a month? • What is the policy for rate increases? • How long has the current administration been in place? • Is there enough staff available to meet my needs? • Is there frequent staff turnover? • Is some level of nursing care provided (RN, LPN, Nursing • Assistant)? How often is it available? • Who will help me with medications if I need it (e.g. reminding me to take them, opening the bottle)? • Can someone administer medications to me if I can’t take them myself (e.g. applying medication to my skin, putting a pill in my mouth)? • Can someone help me if I need special care (e.g. caring for a wound)? • What happens if I have an emergency? Can I get help right away? • Are staffs suitably dressed, personable, and outgoing? • Do the staff members treat residents with respect and dignity? • Do staff members treat each other in a professional manner? • What language does most of the staff speak? • What type of help with personal care is available (e.g. bathing, dressing)? • How flexible is the schedule for receiving help with personal care? • What, if any, transportation services are available? (e.g. medical appointments, shopping, religious services). • Will staff arrange for activities (e.g. hair appointment, concert)? • How does the home support and accommodate personal hobbies? • Are there regularly planned activities that I will enjoy? • Will I be able to attend religious services of my choice? • Can I bring my pet with me when I move? • When can I have visitors? • Are there shops, a library, a park, or other amenities within walking distance? • Is the home close to activities I enjoy? • Is the home on a bus line? • Is there an outside area to sit, walk, or garden? • Are there shops, a library, a park, or other amenities within walking distance? • Is the home close to activities I enjoy? • Is the home on a bus line? • Is there an outside area to sit, walk, or garden? • Is the floor plan easy to follow? • Are doorways, hallways, and rooms accommodating to wheelchairs and walkers? • Are there hand rails to help with walking and in the bathroom? • Are cupboards and shelves easy to reach? • Are there nonskid floors and firm carpets to assist walking? • Does the home have good natural and artificial lighting? • Is the home clean, free of odors, and well heated and cooled? • Does the home meet my standards of cleanliness? • Is the home free from obvious environmental hazards? • Are the home’s rooms clean, safe, and adequate for my needs? • Will I have free use of common areas, such as the kitchen, activity rooms, toilet facilities, dining room, or grounds? • Can I smoke in my room or in common areas? • What furniture is provided? • Can I bring along some of my furniture or other personal items? • Can I adjust the temperature of my room? • Is there a sit-down shower? • Can I have my own personal phone line or internet connection? • Are emergency procedures clearly posted? • Am I able to lock my room and/or are there locked areas in each room for personal valuables? • Is the food pleasing, nutritious, adequate, and attractively served? • What if I don’t like what is being served? • Can I cook in my room? • Are snacks available? • Are there specific meal times or are they flexible? • Is there a refrigerator available to store my personal food? • Will the home meet my dietary or cultural food preferences? • Can I request special foods? • Do other residents socialize with each other and appear happy and comfortable? • Do residents speak favorably of the facility? • Do the residents look like people I want to live with? • How are room changes and roommate concerns addressed? • Is there a resident group that meets? • Do any of the other residents have a history of violent or other problem behaviors? How are these situations handled by staff?

Research the different nursing care facilities in Miami, FL . Discuss the pros and cons of the facility you find in terms of what they offer. Provide a brief report with the following questions:

• What is the basic rate for room, board, and services (it’s a good idea to get this information in writing)?

• What services are covered by this rate?

• Are there other services available and how much do they cost?

• What are the payment policies?

• What is the refund policy if someone leaves before the end of a month?

• What is the policy for rate increases?

• How long has the current administration been in place?

• Is there enough staff available to meet my needs?

• Is there frequent staff turnover?

• Is some level of nursing care provided (RN, LPN, Nursing • Assistant)?

How often is it available?

• Who will help me with medications if I need it (e.g. reminding me to take them, opening the bottle)?

• Can someone administer medications to me if I can’t take them myself (e.g. applying medication to my skin, putting a pill in my mouth)?

• Can someone help me if I need special care (e.g. caring for a wound)?

• What happens if I have an emergency? Can I get help right away?

• Are staffs suitably dressed, personable, and outgoing?

• Do the staff members treat residents with respect and dignity?

• Do staff members treat each other in a professional manner?

• What language does most of the staff speak?

• What type of help with personal care is available (e.g. bathing, dressing)?

• How flexible is the schedule for receiving help with personal care?

• What, if any, transportation services are available? (e.g. medical appointments, shopping, religious services)

. • Will staff arrange for activities (e.g. hair appointment, concert)?

• How does the home support and accommodate personal hobbies?

• Are there regularly planned activities that I will enjoy?

• Will I be able to attend religious services of my choice?

• Can I bring my pet with me when I move?

• When can I have visitors?

• Are there shops, a library, a park, or other amenities within walking distance?

• Is the home close to activities I enjoy?

• Is the home on a bus line?

• Is there an outside area to sit, walk, or garden?

• Are there shops, a library, a park, or other amenities within walking distance?

• Is the home close to activities I enjoy?

• Is the home on a bus line?

• Is there an outside area to sit, walk, or garden?

• Is the floor plan easy to follow?

• Are doorways, hallways, and rooms accommodating to wheelchairs and walkers?

• Are there hand rails to help with walking and in the bathroom?

• Are cupboards and shelves easy to reach?

• Are there nonskid floors and firm carpets to assist walking?

• Does the home have good natural and artificial lighting?

• Is the home clean, free of odors, and well heated and cooled?

• Does the home meet my standards of cleanliness?

• Is the home free from obvious environmental hazards?

• Are the home’s rooms clean, safe, and adequate for my needs?

• Will I have free use of common areas, such as the kitchen, activity rooms, toilet facilities, dining room, or grounds?

• Can I smoke in my room or in common areas?

• What furniture is provided?

• Can I bring along some of my furniture or other personal items?

• Can I adjust the temperature of my room?

• Is there a sit-down shower?

• Can I have my own personal phone line or internet connection?

• Are emergency procedures clearly posted?

• Am I able to lock my room and/or are there locked areas in each room for personal valuables?

• Is the food pleasing, nutritious, adequate, and attractively served?

• What if I don’t like what is being served?

• Can I cook in my room?

• Are snacks available?

• Are there specific meal times or are they flexible?

• Is there a refrigerator available to store my personal food?

• Will the home meet my dietary or cultural food preferences?

• Can I request special foods?

• Do other residents socialize with each other and appear happy and comfortable?

• Do residents speak favorably of the facility?

• Do the residents look like people I want to live with?

• How are room changes and roommate concerns addressed?

• Is there a resident group that meets?

• Do any of the other residents have a history of violent or other problem behaviors? How are these situations handled by staff?

Research the different nursing care facilities in your community. Discuss the pros and cons of the facility in terms of what they offer. Provide a brief report with the following questions:

• What is the basic rate for room, board, and services (it’s a good idea to get this information in writing)?
• What services are covered by this rate?
• Are there other services available and how much do they cost?
• What are the payment policies?
• What is the refund policy if someone leaves before the end of a month?
• What is the policy for rate increases?
• How long has the current administration been in place?
• Is there enough staff available to meet my needs?
• Is there frequent staff turnover?
• Is some level of nursing care provided (RN, LPN, Nursing
• Assistant)? How often is it available?
• Who will help me with medications if I need it (e.g. reminding me to take them, opening the bottle)?
• Can someone administer medications to me if I can’t take them myself (e.g. applying medication to my skin, putting a pill in my mouth)?
• Can someone help me if I need special care (e.g. caring for a wound)?
• What happens if I have an emergency? Can I get help right away?
• Are staffs suitably dressed, personable, and outgoing?
• Do the staff members treat residents with respect and dignity?
• Do staff members treat each other in a professional manner?
• What language does most of the staff speak?
• What type of help with personal care is available (e.g. bathing, dressing)?
• How flexible is the schedule for receiving help with personal care?
• What, if any, transportation services are available? (e.g. medical appointments, shopping, religious services).
• Will staff arrange for activities (e.g. hair appointment, concert)?
• How does the home support and accommodate personal hobbies?
• Are there regularly planned activities that I will enjoy?
• Will I be able to attend religious services of my choice?
• Can I bring my pet with me when I move?
• When can I have visitors?
• Are there shops, a library, a park, or other amenities within walking distance?
• Is the home close to activities I enjoy?
• Is the home on a bus line?
• Is there an outside area to sit, walk, or garden?
• Are there shops, a library, a park, or other amenities within walking distance?
• Is the home close to activities I enjoy?
• Is the home on a bus line?
• Is there an outside area to sit, walk, or garden?
• Is the floor plan easy to follow?
• Are doorways, hallways, and rooms accommodating to wheelchairs and walkers?
• Are there hand rails to help with walking and in the bathroom?
• Are cupboards and shelves easy to reach?
• Are there nonskid floors and firm carpets to assist walking?
• Does the home have good natural and artificial lighting?
• Is the home clean, free of odors, and well heated and cooled?
• Does the home meet my standards of cleanliness?
• Is the home free from obvious environmental hazards?
• Are the home’s rooms clean, safe, and adequate for my needs?
• Will I have free use of common areas, such as the kitchen, activity rooms, toilet facilities, dining room, or grounds?
• Can I smoke in my room or in common areas?
• What furniture is provided?
• Can I bring along some of my furniture or other personal items?
• Can I adjust the temperature of my room?
• Is there a sit-down shower?
• Can I have my own personal phone line or internet connection?
• Are emergency procedures clearly posted?
• Am I able to lock my room and/or are there locked areas in each room for personal valuables?
• Is the food pleasing, nutritious, adequate, and attractively served?
• What if I don’t like what is being served?
• Can I cook in my room?
• Are snacks available?
• Are there specific meal times or are they flexible?
• Is there a refrigerator available to store my personal food?
• Will the home meet my dietary or cultural food preferences?
• Can I request special foods?
• Do other residents socialize with each other and appear happy and comfortable?
• Do residents speak favorably of the facility?
• Do the residents look like people I want to live with?
• How are room changes and roommate concerns addressed?
• Is there a resident group that meets?
• Do any of the other residents have a history of violent or other problem behaviors? How are these situations handled by staff?

***PLEASE USE CURRENT INFORMATION***

Please assume that his gross income is $172,900 (which consists only of salary) for purposes of this problem.

December 31, 2020

To the friendly student tax preparer:

Hi, it’s Shady Slim again. I just got back from my 55th birthday party, and I’m told that you need some more information from me in order to complete my tax return. I’m an open book! I’ll tell you whatever I think you need to know.

Let me tell you a few more things about my life. As you may recall, I am divorced from my wife, Alice. I know that it’s unusual, but I have custody of my son, Shady Jr. The judge owed me a few favors and I really love the kid. He lives with me full time and my wife gets him every other weekend. I pay the vast majority of my son’s expenses. I think Alice should have to pay some child support, but she doesn’t have to pay a dime. The judge didn’t owe me that much, I guess.

I had to move this year after getting my job at Roca Cola. We moved on February 3 of this year, and I worked my job at Roca Cola for the rest of the year. I still live in the same state, but I moved 500 miles away from my old house. I hired a moving company to move our stuff at a cost of $2,300, and I drove Junior in my car. Junior and I got a hotel room along the way that cost us $65 (I love Super 8!).

Can you believe I’m still paying off my student loans, even after 15 years? I paid a total of $900 in interest on my old student loans this year.

Remember when I told you about that guy that hit me with his car? I had a bunch of medical expenses that were not reimbursed by the lawsuit or by my insurance. I incurred a total of $20,000 in medical expenses, and I was only reimbursed for $11,000. Good thing I can write off medical expenses, right?

I contributed a lot of money to charity this year (and have receipt documentation for all contributions). I’m such a nice guy! I gave $1,000 in cash to the March of Dimes. I contributed some of my old furniture to the church. It was some good stuff! I contributed a red velvet couch and my old recliner. The furniture is considered vintage and is worth $5,000 today (the appraiser surprised me!), even though I only paid $1,000 for it back in the day. When I contributed the furniture, the pastor said he didn’t like the fabric and was going to sell the furniture to pay for some more pews in the church. Oh well, some people just have no taste, right? Roca Cola had a charity drive for the United Way this year and I contributed $90. Turns out, I don’t even miss it because Roca Cola takes it right off my paycheck every month . . . $15 a month starting in July. My pay stub verifies that I contributed the $90 to the United Way. Oh, one other bit of charity from me this year. An old buddy of mine was down on his luck. He lost his job and his house. I gave him $500 to help him out.

I paid a lot of money in interest this year. I paid a total of $950 in personal credit card interest. I also paid $18,000 in interest on my $500,000 home mortgage that helped me buy my dream home. I also paid $2,000 in real estate taxes for my new house.

A few other things I want to tell you about this year. Someone broke into my house and stole my kid’s brand-new bicycle and my set of golf clubs. The total loss from theft was $900. I paid $125 in union dues this year. I had to pay $1,200 for new suits for my job. Roca Cola requires its managers to wear suits every day on the job. I spent a total of $1,300 to pay for gas to commute to my job this year.

Oh, this is pretty cool. I’ve always wanted to be a firefighter. I spent $1,400 in tuition to go to the local firefighter’s school. I did this because someone told me that I can deduct the tuition as an itemized deduction, so the money would be coming back to me. That should be all the information you need right now.

Please calculate my taxable income and complete page 1 of Form 1040 (through taxable income, line 11b) and Schedule A.

Required information [The following information applies to the questions displayed below.] Read the following letter and help Shady Slim with his tax situation. Please assume that his gross income is $172,900 (which consists only of salary) for purposes of this problem. December 31, 2020 To the friendly student tax preparer: Hi, it’s Shady Slim again. I just got back from my 55th birthday party, and I’m told that you need some more information from me in order to complete my tax return. I’m an open book! I’ll tell you whatever I think you need to know. Let me tell you a few more things about my life. As you may recall, I am divorced from my wife, Alice. I know that it's unusual, but I have custody of my son, Shady Jr. The judge owed me a few favors and I really love the kid. He lives with me full time and my wife gets him every other weekend. I pay the vast majority of my son's expenses. I think Alice should have to pay some child support, but she doesn't have to pay a dime. The judge didn't owe me that much, I guess. I had to move this year after getting my job at Roca Cola. We moved on February 3 of this year, and I worked my job at Roca Cola for the rest of the year. I still live in the same state, but I moved 500 miles away from my old house. I hired a moving company to move our stuff at a cost of $2,300, and I drove Junior in my car. Junior and I got a hotel room along the way that cost us $65 (I love Super 8!). Can you believe I’m still paying off my student loans, even after 15 years? I paid a total of $900 in interest on my old student loans this year. Remember when I told you about that guy that hit me with his car? I had a bunch of medical expenses that were not reimbursed by the lawsuit or by my insurance. I incurred a total of $20,000 in medical expenses, and I was only reimbursed for $11,000. Good thing I can write off medical expenses, right? I contributed a lot of money to charity this year (and have receipt documentation for all contributions). I’m such a nice guy! I gave $1,000 in cash to the March of Dimes. I contributed some of my old furniture to the church. It was some good stuff! I contributed a red velvet couch and my old recliner. The furniture is considered vintage and is worth $5,000 today (the appraiser surprised me!), even though I only paid $1,000 for it back in the day. When I contributed the furniture, the pastor said he didn’t like the fabric and was going to sell the furniture to pay for some more pews in the church. Oh well, some people just have no taste, right? Roca Cola had a charity drive for the United Way this year and I contributed $90. Turns out, I don’t even miss it because Roca Cola takes it right off my paycheck every month . . . $15 a month starting in July. My pay stub verifies that I contributed the $90 to the United Way. Oh, one other bit of charity from me this year. An old buddy of mine was down on his luck. He lost his job and his house. I gave him $500 to help him out. I paid a lot of money in interest this year. I paid a total of $950 in personal credit card interest. I also paid $18,000 in interest on my $500,000 home mortgage that helped me buy my dream home. I also paid $2,000 in real estate taxes for my new house. A few other things I want to tell you about this year. Someone broke into my house and stole my kid's brand new bicycle and my set of golf clubs. The total loss from theft was $900. I paid $125 in union dues this year. I had to pay $1,200 for new suits for my job. Roca Cola requires its managers to wear suits every day on the job. I spent a total of $1,300 to pay for gas to commute to my job this year. Oh, this is pretty cool. I've always wanted to be a firefighter. I spent $1,400 in tuition to go to the local firefighter's school. I did this because someone told me that I can deduct the tuition as an itemized deduction, so the money would be coming back to me. That should be all the information you need right now. Please calculate my taxable income and complete page 1 of Form 1040 (through taxable income, line 11b) and Schedule A. You're still doing this for free, right? a. Calculate the taxable income.

ames Corporation is planning to issue bonds with a face value of $501,500 and a coupon rate of 6 percent. The bonds mature in 10 years and pay interest semiannually every June 30 and December 31. All of the bonds will be sold on January 1 of this year. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided. Round your final answer to whole dollars.)

Required:

Compute the issue (sale) price on January 1 of this year for each of the following independent cases:

a. Case A: Market interest rate (annual): 4 percent.

b. Case B: Market interest rate (annual): 6 percent.

c. Case C: Market interest rate (annual): 8.5 percent.

Park Corporation is planning to issue bonds with a face value of $790,000 and a coupon rate of 7.5 percent. The bonds mature in 6 years and pay interest semiannually every June 30 and December 31. All of the bonds were sold on January 1 of this year. Park uses the effective-interest amortization method and also uses a discount account. Assume an annual market rate of interest of 8.5 percent. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided. Round your final answer to whole dollars.)  

Required:

1. Prepare the journal entry to record the issuance of the bonds. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

2. Prepare the journal entry to record the interest payment on June 30 of this year. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

3. What bond payable amount will Park report on its June 30 balance sheet? (Enter all amounts with a positive sign.)

Several years ago, Walters Company issued bonds with a face value of $613,000 at par. As a result of declining interest rates, the company has decided to call the bond at a call premium of 10 percent over par. Record the retirement of the bonds. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

On January 1 of this year, Clearwater Corporation sold bonds with a face value of $761,000 and a coupon rate of 6 percent. The bonds mature in 10 years and pay interest annually every December 31. Clearwater uses the straight-line amortization method and also uses a discount account. Assume an annual market rate of interest of 7 percent. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided. Round your final answer to whole dollars.)

Required:

1. Prepare the journal entry to record the issuance of the bonds. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

2. Prepare the journal entry to record the interest payment on December 31 of this year. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

3. How will the bonds be reported on Clearwater's December 31 Balance Sheet?

[The following information applies to the questions displayed below.]

Claire Corporation is planning to issue bonds with a face value of $210,000 and a coupon rate of 10 percent. The bonds mature in two years and pay interest quarterly every March 31, June 30, September 30, and December 31. All of the bonds were sold on January 1 of this year. Claire uses the effective-interest amortization method and also uses a discount account. Assume an annual market rate of interest of 12 percent. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided.)  

8.

value:
10.00 points

Required information

Required:

1. Provide the journal entry to record the issuance of the bonds. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your final answers to nearest whole dollar amount.)

References

eBook & Resources

General JournalDifficulty: 2 MediumLearning Objective: 10-04 Report bonds payable and interest expense for bond securities issued at a discount.

Check my work

9.

value:
10.00 points

Required information

2. Provide the journal entry to record the interest payment on March 31, June 30, September 30, and December 31 of this year. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your final answers to nearest whole dollar amount.)

Serotta Corporation is planning to issue bonds with a face value of $380,000 and a coupon rate of 12 percent. The bonds mature in two years and pay interest quarterly every March 31, June 30, September 30, and December 31. All of the bonds were sold on January 1 of this year. Serotta uses the effective-interest amortization method and also uses a premium account. Assume an annual market rate of interest of 8 percent. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided.)

11.

value:
10.00 points

Required information

1. Provide the journal entry to record the issuance of the bonds January 1.(If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your final answers to nearest whole dollar amount.)

References

eBook & Resources

General jounralDifficulty: 2 MediumLearning Objective: 10-05 Report bonds payable and interest expense for bond securities issued at a premium.

Check my work

12.

value:
10.00 points

Required information

2. Provide the journal entry to record the interest payment on March 31, June 30, September 30, and December 31 of this year. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your final answers to nearest whole dollar amount.)

References

eBook & Resources

General jounralDifficulty: 2 MediumLearning Objective: 10-05 Report bonds payable and interest expense for bond securities issued at a premium.

Check my work

13.

value:
10.00 points

Required information

3. What bonds payable amount will Serotta report on this year's December 31 balance sheet? (Round your final answers to nearest whole dollar amount.)

CASE: Queensland Food Corp

In early January 2003, the senior-management committee of Queensland Food Corp was to meet to draw up the firm’s capital budget for the new year. Up for consideration were 11 major projects that totaled over $20.8 million. Unfortunately, the board of directors had imposed a spending limit of only $8.0 million; even so, investment at that rate would represent a major increase in the firm’s asset base of $65.6 million. Thus the challenge for the senior managers of Queensland Food Corp was to allocate funds among a range of compelling projects nominated for consideration.

The Company

Queensland Food Corp, headquartered in Brisbane, Australia, was a producer of high-quality ice cream, yogurt, bottled water, and fruit juices. Its products were sold throughout two states (Queensland, New South Wales) and two territories (ACT and Northern Territory). (See Exhibit 1 for map of the company’s marketing region.)

Exhibit 1 – Queensland Food Corp, located in Australia

Queensland Food Corp sales had been static since 2000 (see Exhibit 2), which management attributed to low population growth in Northern Territory and market saturation in some areas. Outside observers, however, faulted recent failures in new-product introductions.

Exhibit 2 Summary of Financial Results (millions AUD except per share amounts)

Most members of management wanted to expand the company’s market presence and introduce more new products to boost sales.

Resource Allocation

The capital budget at Queensland Food Corp was prepared annually by a committee of senior managers who then presented it for approval by the board of directors. The committee consisted of five managing directors, the president Chief Executive (CEO), and the chief finance officer (CFO). Typically, the CEO solicited investment proposals from the managing directors. The proposals included a brief project description, a financial analysis, and a discussion of strategic or other qualitative consideration.

As a matter of company policy, investment proposals at Queensland Food Corp were subjected to two financial tests, payback and internal rate of return (IRR). Financial tests were considered hurdles and had been established in 2001 by the management committee and varied according to the type of project:

Exhibit 3 Company Policy for Project Approval

In January 2003, the estimated weighted-average cost of capital (WACC) for Queensland Food Corp was 10.5 percent. In describing the capital-budgeting process, the CFO, Tony Austin, said, “We use the sliding scale of IRR tests as a way of recognizing differences in risk among the various types of projects. Where the company takes more risk, we should earn more return. The payback test signals that we are not prepared to wait for long to achieve that return.”

At the conclusion of the most recent meeting of the directors, the board voted unanimously to limit capital spending in 2003 to $8.0 million.

Exhibit 4 Project Proposals

1.    Distribution Truck Fleet Replacement/Expansion. Wayne Ramsey proposed to purchase 100 new refrigerated tractor trailer trucks, 50 each in 2003 and 2004. By doing so, the company could sell 60 old, fully depreciated trucks over the two years for a total of $120,000. The purchase would expand the fleet by 40 trucks within two years. Each of the new trailers would be larger than the old trailers and afford a 15 percent increase in cubic meters of goods hauled on each trip. The new tractors would also be more fuel and maintenance efficient. The increase in number of tucks would permit more flexible scheduling and more efficient routing and servicing of the fleet than at present and would cut delivery times and, therefore, possibly inventories. It would also allow more frequent deliveries to the company’s major markets, which would reduce loss of sales cause by stock-outs. Finally, expanding the fleet would support geographical expansion over the long term. As shown in Exhibit 3, the total net investment in trucks of $2.2 million and the increase in working capital to support added maintenance, fuel, pay-roll, and inventories of $200,000 was expected to yield total cost savings and added sales potential of $770,000 over the next seven years. The resulting IRR was estimated to be 7.8 percent, marginally below the minimum 8 percent required return on efficiency projects. Some of the managers wondered if this project would be more properly classified as “efficiency” than “expansion.”

2.    New Plant Construction. Ian Gardner noted that Queensland Food Corp’s yogurt and ice-cream sales in the southeastern region of the company’s market were about to exceed the capacity of its Sydney manufacturing and packaging plant. At present, some of the demand was being met by shipments from the company’s newest most efficient facility, located in Darwin, Australia. Shipping costs over that distance were high however, and some sales were undoubtedly being lost when marketing effort could not be supported by delivery. Gardner proposed that a new manufacturing and packaging plant be built in ACT, Australia, just at the current southern edge of Queensland Food Corp’s marketing region, to take the burden off the Sydney and Darwin plants.

The cost of this plant would be $2.5 million and would entail $500,000 for working capital. The $1.4 million worth of equipment would be amortized over seven years, and the plant over ten years. Through an increase in sales and depreciation, and decrease in delivery costs, the plant was expected to yield after-tax cash flows totaling $2.4 million and an IRR of 11.3 percent over the next ten years. This project would be classified as a market extension.

3.    Existing Plant Expansion. In addition to the need for greater production capacity in Queensland Food Corp’s southeastern region, its Cairns’ plant had reached full capacity. This situation made the scheduling of routine equipment maintenance difficult, which, in turn, created production-scheduling and deadline problems. This plant was one of two highly automated facilities that produced Queensland Food Corp’s entire line of bottled water, mineral water, and fruit juices. The Cairn’s plant supplied Northern Territory and Queensland (the major market).

The Cairn’s plants capacity could be expanded by 20 percent for $1.0 million. The equipment ($700,000) would be deprecated over seven years, and the plant over ten years. The increased capacity was expected to result in additional production of up to $150,000 per year, yielding an IRR of 11.2 percent. This project would be classified as a market extension.

4.    Fat Free(!) Greek Yogurt/Ice Cream Development/Introduction. David D. Jones noted that recent developments in the European market showing promise of significant cost savings to food producers as well as stimulating growing demand for low-calorie products. The challenge was to create the right flavor to complement or enhance the other ingredients. For ice-cream manufacturers, the difficulty lay in creating a balance that would result in the same flavor as was obtained when using traditional yogurt/ice cream.

$1.5 million would be needed to commercialize a yogurt line that had received promising results in consumer and production tests. This cost included acquiring specialized production facilities, working capital, and the cost of the initial product introduction. The overall IRR was estimated to be 17.3 percent.

Jones stressed that the proposal, although highly uncertain in terms of actual results, could be viewed as a means of protecting present market share, because other high-quality ice-cream producers carrying out the same research might introduce these products; if the HooRoo Cakes brand did not carry a fat free line and its competitors did, the HooRoo Cakes brand might suffer. This project would be classed in the new-product category of investments.

5.    Plant Automation. Ian Gardner also requested $1.4 million to increase automation of the production lines at six of the company’s older plants. The result would be improved throughout speed and reduced accidents, spillage, and production tie-ups. The last two plants the company had built included conveyer systems that eliminated the need for any heavy lifting by employees. The systems reduced the chance of injury to employees; at the six older plants, the company had sustained on average of 75 missed worker-days per year per plant in the last two years because of muscle injuries sustained in heavy lifting. At an average hourly wage of $14.00 per hour, over $150,000 per year was thus lost, and the possibility always existed of more serious injuries and lawsuits. Overall cost savings and depreciation totaling $275,000 per year for the project were expected to yield an IRR of 8.7 percent. This project would be classed in the efficiency category.

6.    Water Treatment (4 plants). Queensland Food Corp preprocessed a variety of fresh fruits at its Brisbane and Darwin plants. One of the first stages of processing involved cleaning the fruit to remove dirt and pesticides. The dirty water was simply sent down the drain and into the like-named rivers. Recent legislation from the Department of Sustainability, Environment, Water, Population and Communities (Australian Government) called for any waste water containing even the slight traces of poisonous chemicals to be treated at the sources and gave companies four years to comply. As and environmentally oriented project, this proposal fell outside the normal financial tests of project attractiveness. Gardner noted, however, that the wastewater treatment equipment could be purchased today for $400,000; he speculated that the same equipment would cost $1.0 million in four years when immediate conversion became mandatory. In the intervening time, the company would run the risks that Australian Government and local regulators would shorten the compliance time or that the company’s pollution record would become public and impair the image of the company in the eyes of the consumer. This project would be classed in the environmental category.

7.    Market Expansion West (Western Territory) and 8. Market Expansion South (Victoria). Mick Dell’Orco recommend that the company expand its market westward to include the Western Territory and to the south (Victoria, South Australia and Tasmania). He believed it was time to expand sales of ice cream, and possibly yogurt, geographically. It was his theory that the company could sustain expansions in both directions simultaneously, but practically speaking, Dell’Orco doubted that the sales and distribution organizations could sustain both expansions at once.

Each alternative geographical expansion had its benefits and risks. If the company expanded southward, it could reach a large population with a great appetite for frozen dairy products, but it would also face more competition from local and state ice cream manufacturers. The southward expansion would have to be supplied by facilities in ACT and New South Wales, at least initially.

Looking to the west, consumers in Western Territory have substantial purchasing power due to the explosion in the mining industry, but the population is significantly less than in the southward expansion geographical area. Expansion to the west would require building consumer demand and planning for future plants to produce products in Western Territory. Expansion to the west would need to be supplied by rail from Darwin facilities and further redistribution truck fleet.

The initial cost for each proposal was $2 million in working capital. The bulk of the costs were expected to involve the financing of distributorships, but over the ten-year forecast period, the distributors would gradually take over the burden of carrying receivables and inventory. Both expansion proposals assumed the rental of suitable warehouse and distribution facilities. The after-tax cash flow was expected to be $3.75 million for southward expansion and $2.75 million for westward expansion. Dell’Orco pointed out that southward expansion meant a higher possible IRR but that moving westward was a less risky proposition. The projected IRRs were 21.4 percent and 18.8 percent for southward and westward expansion, respectively. These projects would be classed in the new market category.

9.    Snack Food Development/Introduction. David D. Jones suggested that the company use the excess capacity in its Darwin facility to produce a line of snack foods of dried fruits to be test-marketed in Northern Territory. He noted the strength of the HooRoo brand in that area and the success of other food and beverage companies that had expanded into snack food production. He also argued that the company’s reputation for wholesome, quality products would be enhanced by a line of dried fruits and that name association with the new product would probably even lead to increased sales of the company’s other products among health-conscious consumers.

Equipment and working capital invests were expected to total $1.5million and $300,000, respectively, for this project. The equipment would be depreciated over seven years. Assuming the test market was successful, cash flows from the project would be able to support further plant expansions in other strategic locations. The IRR was expected to be 20.5 percent, well above the IRR required for new product projects (12 percent).

10.  Computer-based Inventory Control System. Wayne Ramsey had pressed for three years unsuccessfully for a state-of-the-art computer-based inventory-control system that would link field sales reps, distributors, drivers, warehouses, and possibly retailers. The benefits of such a system would be shortening delays in ordering and order processing, better control of inventory, reduction of spoilage, and faster recognition of changes in demand at the customer level. Ramsey was reluctant to quantify these benefits, because they could range between modest and quite large amounts. This year he presented a cash-flow forecast as part of a business case for the project. An initial outlay of $1.2 million for the system, followed by $300,000 next year for ancillary equipment. The inflows reflected depreciation tax shields, tax credits, cost reductions in warehousing, and reduced inventory. He forecasted these benefits to last for only three years. Even so, the project’s IRR was estimated to be 16.2 percent. This project would be classed in the efficiency category.

11.  Bundaberg Rum Acquisition. Anthony Mitchel had advocated making diversifying acquisitions in an effort to move beyond the company’s mature core business but doing so in a way that exploited the company’s skills in brand management. He had explored six possible related industries, in the general field of consumer packaged goods, and determined that a promising small liquor manufacturer, Bundaberg Rum, offered unusual opportunities for real growth and, at the same time, market protection through branding. He had identified Bundaberg Rum as a well-established brand of liquor as the leading private Australian manufacturer of rum, located in Bundaberg, Queensland.

The proposal was expensive: $1.5 million to buy the company and $2.5 million to renovate the company’s facilities completely while simultaneously expanding distribution to new geographical markets. The expected returns were high: after-tax cash flows were projected to be $13.4 million, yielding an IRR of 28.7 percent. This project would be classed in the new-product category of proposals.

Conclusion

Each member of the management committee was expected to come to the meeting prepared to present and defend a proposal for the allocation of Queensland Food Corp’s capital budget of $8.0 million. Exhibit 3 summarizes the various projects in terms of their free cash flows and the investment-performance criteria.

Exhibit 5 Free Cash Flow and Analysis of Proposed Projects (Note 1) ($ millions AUD)

1Project Number 6 not included

2Equivalent Annuity is that level of equal payments over 10 years that yields a NPV at the minimum required rate of return for that project. It corrects for

differences in duration among various projects. In ranking projects based on EA, larger annuities create more investor wealth than smaller annuities.

3Reflects $1.1 million spent initially and at end of year 1

4Free cash flow = incremental profit or cost savings after taxes + depreciation – investment in fixed assets

5$1.5 million would be spent in year one, $2.0 million in year two, and 0.5 million in year 3.

Case Study Questions 1. Financial Analysis: a. Which NPV of those shown in Exhibit 3 should be used? Why? b. Using all NPV forms presented in Exhibit 3, rank the projects. c. Since the wastewater treatment project is a cost of doing business, it does not have a NPV. Suggest a way to evaluate the effluent project. d. List the projects that would be funded or unfunded using the financial analysis (include Project 6 in your list) 2. Weighted Scoring Model Analysis Based on the paper by Englund and Graham (1999), Chapter 2 (Kloppenborg (2017)) and the case information, a. Use a scoring model to evaluate and select projects (pp. 45-47, Kloppenborg): i. List and define potential criteria ii. List and define those criteria that are mandatory (i.e., screening) criteria iii. Weight the remaining criteria using an AHP process b. Which projects were screened from further consideration in part 2a, ii? c. Rank order the remaining projects based on the group analysis. 3. Were the results different between the financial analysis (Question 1) and the weighted scoring model (Question 2) approach? If yes, why?

#include

#include

#include

#define WORDLENGTH 30

#define MAX 100

struct car

{

char model[WORDLENGTH];

int year;

int milage;

};

typedef struct car Car;

Car createCar(char model[], int year, int milage)

{

Car c;

strcpy(c.model, model);

c.year = year;

c.milage = milage;

return c;

}

void regCars(Car reg[], int *pNrOfCars)

{

char again[WORDLENGTH] = "yes", model[WORDLENGTH];

int year, milage;

while (strcmp(again, "yes") == 0)

{

printf("Ange model:");

scanf("%s%*c", model);

printf("Ange year:");

scanf("%d%*c", &year);

printf("Ange milage:");

scanf("%d%*c", &milage);

reg[*pNrOfCars] = createCar(model, year, milage);

(*pNrOfCars)++;

printf("Do you rigister another car? enter yes or no:\n");

scanf("%s%*c", again);

}

}

void printRegister(Car reg[], int nrOfCars)

{

int i = 0;

for (i = 0; i < nrOfCars; i++)

{

printf("%d. Car: %s, Year model: %d, Mil: %d\n", i + 1, reg[i].model, reg[i].year, reg[i].milage);

}

}

int main()

{

Car carRegister[MAX];

int nrOfCars = 0;

char r[100];

printf("register a car\n");

regCars(carRegister, &nrOfCars);

printf("Do you want to print the cars details or quit? entr print or quit:\n");

scanf("%s", r);

if (strcmp(r, "print") == 0)

printRegister(carRegister, nrOfCars);

else

exit(1);

return 0;

}

Add a menu item that is "Increase miles" where you should be able to select a car by entering its location in the register and then can increase the number of miles it has traveled. So to increase the fiat's miles above, enter 3.

Edit: this question is a following question to a previous one which was:

In question number one we should Add the function that prints all cars in the register in our car register program. The printout should look as follows:
1. Car: Volvo, Year model: 2011, Mil: 3000
2. Car: Saab, Year model: 2000, Mil: 5000
Car: Fiat, Model year: 1999, Mil: 40000

Then in a separate question we should Change the program so that it starts with a menu according to
below. Depending on what you choose, the correct function is called. Then the user gets another chance to choose until he chooses to quit.

• register cars

• Print all cars
• Exit

#include <stdio.h>

#include <string.h>

#include <stdlib.h>

#define WORDLENGTH 30

#define MAX 100

struct car{
char model[WORDLENGTH];

int year;
int milage;

};
typedef struct car Car;

void printCar(Car c){
printf("Bil: %s, Arsmodell: %d, mil: %d\n",c.model,c.year,c.milage);

}

Car createCar(char model[],int year, int milage){

Car c;

strcpy(c.model,model);

c.year=year;

c.milage=milage;

return c;

}

void regCars(Car reg[],int *pNrOfCars){
char again[WORDLENGTH] = "ja", model[WORDLENGTH];

int year,milage;
while(strcmp(again,"ja")==0){

printf("Ange model:");
scanf("%s%*c",model);
printf("Ange year:");
scanf("%d%*c",&year);
printf("Ange milage:");

scanf("%d%*c",&milage);

reg[*pNrOfCars]=createCar(model,year,milage);

(*pNrOfCars)++;

printf("Vill du fortsatta? (ja/nej)");

scanf("%s%*c",again); }

}

void printRegister(Car reg[], int nrOfCars){}

int main(){
Car carRegister[MAX];
int nrOfCars=0;

regCars(carRegister,&nrOfCars);

printRegister(carRegister, nrOfCars);

return 0;

}

the answer was:

#include <stdio.h>

#include <string.h>

#include <stdlib.h>

#define WORDLENGTH 30

#define MAX 100

struct car{
char model[WORDLENGTH];

int year;
int milage;

};
typedef struct car Car;




Car createCar(char model[],int year, int milage){

Car c;

strcpy(c.model,model);

c.year=year;

c.milage=milage;

return c;

}

void regCars(Car reg[],int *pNrOfCars){
char again[WORDLENGTH] = "yes", model[WORDLENGTH];

int year,milage;
while(strcmp(again,"yes")==0){

printf("Ange model:");
scanf("%s%*c",model);
printf("Ange year:");
scanf("%d%*c",&year);
printf("Ange milage:");

scanf("%d%*c",&milage);

reg[*pNrOfCars]=createCar(model,year,milage);

(*pNrOfCars)++;

printf("Do you rigister another car? enter yes or no:\n");

scanf("%s%*c",again); }

}

void printRegister(Car reg[], int nrOfCars){
    int i=0;
    for(i=0;i<nrOfCars;i++)
    {
        printf("%d. Car: %s, Year model: %d, Mil: %d\n",i+1,reg[i].model,reg[i].year,reg[i].milage);
    }
}

int main(){
Car carRegister[MAX];
int nrOfCars=0;
char r[100];
printf("register a car\n");
regCars(carRegister,&nrOfCars);
printf("Do you want to print the cars details or quit? entr print or quit:\n");
scanf("%s",r);
if(strcmp(r,"print")==0)
printRegister(carRegister, nrOfCars);
else 
exit(1);
return 0;

}