The preliminary 2021 income statement of Alexian Systems, Inc., is presented below:

Additional information:

1. Selling and administrative expense includes $31 million in restructuring costs.
2. Included in other income is $125 million in income from a discontinued operation. This consists of $90 million in operating income and a $35 million gain on disposal. The remaining $6 million is from the gain on sale of investments.
3. Cost of goods sold was increased by $10 million to correct an error in the calculation of 2020’s ending inventory. The amount is material.

Required:
Prepare a revised income statement for 2021 reflecting the additional facts. Use a multiple-step format. Assume that an income tax rate of 25% applies to all income statement items, and that 10 million shares of common stock were outstanding throughout the year. (Enter your answers in millions rounded to 2 decimal places. Round EPS answers to 2 decimal places.)
  

On January 1, 2021, Ithaca Corp. purchases Cortland Inc. bonds that have a face value of $340,000. The Cortland bonds have a stated interest rate of 5%. Interest is paid semiannually on June 30 and December 31, and the bonds mature in 10 years. For bonds of similar risk and maturity, the market yield on particular dates is as follows: (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1)

1. Calculate the price Ithaca would have paid for the Cortland bonds on January 1, 2021 (ignoring brokerage fees), and prepare a journal entry to record the purchase.
2. Prepare all appropriate journal entries related to the bond investment during 2021, assuming Ithaca accounts for the bonds as a held-to-maturity investment. Ithaca calculates interest revenue at the effective interest rate as of the date it purchased the bonds. Record the purchase of Cortland bonds on January 1, 2021.
3. Prepare all appropriate journal entries related to the bond investment during 2021, assuming that Ithaca chose the fair value option when the bonds were purchased and that Ithaca determines the fair value of the bonds semiannually. Ithaca calculates interest revenue at the effective interest rate as of the date it purchased the bonds.

Contribution Margin, CVP, Net Income, Margin of Safety

Nail Glow, Inc., produces novelty nail polishes. Each bottle sells for $5.90. Variable unit costs are as follows:

Fixed overhead costs are $34,475 per year. Fixed selling and administrative costs are $6,720 per year. Nail Glow sold 35,000 bottles last year.

Required:

1. What is the contribution margin per unit for a bottle of nail polish? Round your answer to the nearest cent.
$ per unit

What is the contribution margin ratio? Round your answer to four decimal places. Use the rounded value in the subsequent computations. (Express as a decimal-based amount rather than a whole percent.)

2. How many bottles must be sold to break even?
bottles

What is the break-even sales revenue? Round your answer to the nearest dollar, if rounding is required. Use the rounded value in the subsequent computations.
$

3. What was Nail Glow’s operating income last year?
$

4. What was the margin of safety in revenue?
$

5. Suppose that Nail Glow, Inc., raises the price to $6.50 per bottle, but anticipated sales will drop to 28,750 bottles. What will the new break-even point in units be? Round your answer to the nearest whole number of units.
bottles

1. Reimbursement Methods

A. A hospital admits 525 patients per month who stay an average of five (5.0) days per admission. This hospital charges $12,000 per admission and incurs $7,100 in costs ($4,000 fixed and $3,100 variable) per patient. Assume all patients are reimbursed under the same reimbursement method, complete the table and calculate net income for the hospital under each reimbursement method.

            A.         80% of Charges:

            B.         Cost:

            C.         $1,550 per diem:

            D.         $7,250 per case:

            E.         $195 capitation (per member per month): assume the number of covered lives is 15,000.

                                                Charge             Cost                 Per Diem          Per Case          Capitation

Total Revenue                        $ _______ _______ _______ _______ _______

Less: Contractual discounts    _______ _______ _______ _______ _______

Net Revenue                             _______ _______ _______ _______ _______

Less: Expenses                                    _______ _______ _______ _______ _______

Net Income                               $          _______ _______ _______ _______ _______

Calculate the expected net income for a hospital with the following patient mix:

80% of Charges: 95 admissions per month (18.1%)

Cost: 26 admissions per month (5.0%)

$1,550 per diem: 53 admissions per month (10.1%)

$7,250 per case: 262 admissions per month (49.9%)

$190 capitation (per member per month): 79 admissions per month (15.0%)

assume the number of covered lives is 2,250

No pay: 10 admissions per month (1.9%)

please explain how you got this answer

The project will last for 8 years, beginning in 2011 (year 0) and ending in 2019 (year 8). Depreciation is straight line to zero, and taxation (at the time) is 35% in the United States. In any year with a negative EBIT, there is no tax. The capital investment for the fibre line project is $350,000,000 (invested in year 0), including costs of amplification sites, earthmoving equipment, easements etc. Working capital is expected to be $60,000,000, returned at the end of the project. A 24 hours a day, 7 days a week maintenance team is required to ensure 99.99% operational capacity, costing $60 million per year, and increasing at 3% per year. The project success hinges on access to the fibre ports in the exchanges, they know this and charge $50,000,000 per year (combined), declining by 5% p.a. as demand declines.      A team of surveyors and builders who inspected the 1400 km path cost $1.5 million. At the end of the project, the technology is obsolete for its purpose in investment banking, but it can be sold to a telecom provider (contributing to the revenue for year 8) for $127,000,000. Revenue is subscription based at $3,600,000 per year, per subscription. In year 1 there will be 200 subscriptions, year 2 is 150, year 3 is 100, year 4 is 50. In year 5, 6, 7, 8 only 20 subscriptions are taken in per year. The all-important discount rate is 14.5%.

Question: What is the NPV and IRR using excel?

The adjusted, pre-closing trial balance appears below for B. Counter, CPA, a sole proprietorship, at December 31, 2020. Accounts are listed in alphabetical order.

ACCOUNTS DR CR

Accounting Revenue (Income) 1,500 CR

Accounts Payable 8,700 CR

Accounts Receivable 500 DR

Buildings & Equipment 5,000 DR

Capital, January 1, 2020 12,900 CR

Cash (checking account) 4,100 DR

Insurance Expense 400 DR

Land 9,000 DR

Owner Withdrawals (Drawing) 1,000 DR

Prepaid Insurance Expense 800 DR

Supplies Expense 200 DR

Supplies on Hand 700 DR

Unearned Accounting Revenue 400 CR

Utilities Expense 400 DR

Wages Expense 1,400 DR

Totals 23,500 (debits) 23,500 (credits)

From the adjusted trial balance above, answer the questions below. Note that your best approach is to first prepare the three financial statements in a methodical and careful manner.

Questions:

1. What are total (gross) revenues on the 2020 income statement?

2. What are total expenses on the 2020 income statement?

3. What are total assets on the 12/31/20 balance sheet?

4. What are total liabilities on the 12/31/20 balance sheet?

5. True or False: If the goal of the business owner is to increase the equity in the business, the trend in the capital account is positive for the year.

Milano Pizza is a small neighborhood pizzeria that has a small area for in-store dining as well as offering take-out and free home delivery services. The pizzeria’s owner has determined that the shop has two major cost drivers—the number of pizzas sold and the number of deliveries made.

The pizzeria’s cost formulas appear below:

In November, the pizzeria budgeted for 1,560 pizzas at an average selling price of $15 per pizza and for 220 deliveries.

Data concerning the pizzeria’s actual results in November appear below:

1. Complete the flexible budget performance report that shows both revenue and spending variances and activity variances for the pizzeria for November. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

The Gourmand Cooking School runs short cooking courses at its small campus. Management has identified two cost drivers it uses in its budgeting and performance reports—the number of courses and the total number of students. For example, the school might run two courses in a month and have a total of 65 students enrolled in those two courses. Data concerning the company’s cost formulas appear below:

For example, administrative expenses should be $3,600 per month plus $45 per course plus $6 per student. The company’s sales should average $890 per student.

The company planned to run four courses with a total of 65 students; however, it actually ran four courses with a total of only 57 students. The actual operating results for September appear below:

Required:

1. Prepare the company’s planning budget for September.

2. Prepare the company’s flexible budget for September.

3. Calculate the revenue and spending variances for September.