Exercise 10-13

Presented below is information related to Kingbird Company.

1. On July 6, Kingbird Company acquired the plant assets of Doonesbury Company, which had discontinued operations. The appraised value of the property is:

Kingbird Company gave 12,500 shares of its $100 par value common stock in exchange. The stock had a market price of $202 per share on the date of the purchase of the property.

2. Kingbird Company expended the following amounts in cash between July 6 and December 15, the date when it first occupied the building. (Prepare consolidated entry for all transactions below.)

3. On December 20, the company paid cash for equipment, $272,300, subject to a 2% cash discount, and freight on equipment of $11,410.

Prepare entries on the books of Kingbird Company for these transactions. (Round intermediate calculations to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places e.g. 58,971. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

list of accounts

Accounts Payable
Accumulated Depreciation-Building
Accumulated Depreciation-Equipment
Accumulated Depreciation-Machinery
Accumulated Depreciation-Trucks
Buildings
Cash
Common Stock
Contribution Revenue
Cost of Goods Sold
Depreciation Expense
Direct Labor
Discount on Notes Payable
Equipment
Factory Overhead
Gain on Disposal of Buildings
Gain on Disposal of Equipment
Gain on Disposal of Machinery
Gain on Disposal of Trucks
Insurance Expense
Interest Expense
Inventory
Land
Land Improvements
Loss on Disposal of Buildings
Loss on Disposal of Equipment
Loss on Disposal of Machinery
Loss on Disposal of Trucks
Machinery
Maintenance and Repairs Expense
Materials
No Entry
Notes Payable
Organization Expense
Paid-in Capital in Excess of Par - Common Stock
Prepaid Insurance
Retained Earnings
Salaries and Wages Expense
Sales Revenue
Trading Securities
Trucks

Exercise 10-13

Presented below is information related to Kingbird Company.

1. On July 6, Kingbird Company acquired the plant assets of Doonesbury Company, which had discontinued operations. The appraised value of the property is:

Kingbird Company gave 12,500 shares of its $100 par value common stock in exchange. The stock had a market price of $202 per share on the date of the purchase of the property.

2. Kingbird Company expended the following amounts in cash between July 6 and December 15, the date when it first occupied the building. (Prepare consolidated entry for all transactions below.)

3. On December 20, the company paid cash for equipment, $272,300, subject to a 2% cash discount, and freight on equipment of $11,410.

Prepare entries on the books of Kingbird Company for these transactions. (Round intermediate calculations to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places e.g. 58,971. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

List of Accounts

Accounts Payable
Accumulated Depreciation-Building
Accumulated Depreciation-Equipment
Accumulated Depreciation-Machinery
Accumulated Depreciation-Trucks
Buildings
Cash
Common Stock
Contribution Revenue
Cost of Goods Sold
Depreciation Expense
Direct Labor
Discount on Notes Payable
Equipment
Factory Overhead
Gain on Disposal of Buildings
Gain on Disposal of Equipment
Gain on Disposal of Machinery
Gain on Disposal of Trucks
Insurance Expense
Interest Expense
Inventory
Land
Land Improvements
Loss on Disposal of Buildings
Loss on Disposal of Equipment
Loss on Disposal of Machinery
Loss on Disposal of Trucks
Machinery
Maintenance and Repairs Expense
Materials
No Entry
Notes Payable
Organization Expense
Paid-in Capital in Excess of Par - Common Stock
Prepaid Insurance
Retained Earnings
Salaries and Wages Expense
Sales Revenue
Trading Securities
Trucks

A school that opened with 1500 students in the year 2000 was expected to grow at a rate of p'(t)= 150/ √(1+.2t), where p(t) represents the total school population t years after 2000. What was the expected enrollment in 2005.

I got p(t) to be 1500√u and I can't find out how to get C. If someone could make sure I have the right p(t) and explain how to get C, that would be great.

f Nokia decided to embrace the change and move from the old slate (Nokia phones in 2005) to the future slate (smartphones similar to apple and Samsung smartphones in 2020), bearing in mind the lesson learned stated in the last page in the case, propose suitable levers throughout Lewin’s three phases of managing change which in your opinion could have saved Nokia from failure. The levers should cover the four organisational subsystems. (at least 2 levers in each subsystem).

Problem 12-08A

Which of the following statements is false?

Group of answer choices

One disadvantage of the corporate form is the double taxation of profit.

A debenture is an unsecured debt with maturity longer than 10 years.

The primary goal of a publicly-owned for-profit corporation is to maximize the value of stock.

As interest rate increases significantly, companies are more likely to call the callable bonds they have issued.

Equity holders have a residual claim in the firm while creditors have voting power.

Why is a company's cash burn rate significant for its survival?

A) It represents the speed with which the company is using up cash and how soon it will run out of cash in an adverse economic environment.

B) It is a signal of the ability of a startup company to raise cash from venture capitalists.

C) It indicates how quickly the company will run out of cash before it can pay all its debt obligations.

D) It measures the rate at which a company is investing in new products and how quickly it will generate additional revenue.

1) XYZ Inc. sells a single product for $27 per unit. Direct materials costs were $5 per unit, while direct labour and variable manufacturing overhead costs were $3 and $2 respectively. Fixed overhead costs amount $20,000 per month. The company has a practical production capacity of 5,000 units per month. Variable selling costs are $2 per unit. Fixed selling costs are $2,000 per month. Last month, the company produced 5,000 units and sold 3,000 units. What is the company's operating income using variable costing?

2) XYZ Inc. sells a single product for $40 per unit. Direct materials costs were $5 per unit, while direct labour and variable manufacturing overhead costs were $3 and $2 respectively. Fixed manufacturing overhead costs amount $20,000 per month. The company has a practical production capacity of 5,000 units per month. Variable selling costs are $2 per unit. Fixed selling costs are $10,000 per month. Last month, the company produced 5,000 units and sold 3,000 units. What is the company's operating income using absorption costing?

3) XYZ Inc. sells a single product for $30 per unit. Direct materials costs were $5 per unit, while direct labour and variable manufacturing overhead costs were $3 and $2 respectively. Fixed manufacturing overhead costs amount $20,000 per month. The company has a practical production capacity of 10,000 units per month. Variable selling costs are $2 per unit. Fixed selling costs are $2,000 per month. During the company's first month of operations, the company produced 9,000 units and sold 6,000 units. The company's operating income under absorption costing for its first month of operations would be:

• The same as its variable costing operating income.

• $6,000 higher than its variable costing operating income.

• $8,000 lower than its variable costing operating income.

• $10,000 higher than its variable costing operating income.

A client of your financial consulting firm, Omaha manufacturing company, is considering a new investment proposal that involves manufacturing and selling bright blue self driving taxi cabs. You are asked to create the NPV analysis.

Your client has assembled the following information.

A new machine will have to be purchased today (Year0) at a cost of $120,000.

It will generate revenues all of which are taxable, expected to be $265,000, $240,000, $215,000 in each of the 3 years (year 1,2,and 3) of the project life.

Gross profit expected to be 30% of sales revenue

The new machine will be depreciated straight-line down to its salvage value of $0 over the 3 year life.

Tax rate of client is 21%. The company has a WACC of 14%

1. Depreciation expense increases the amount of tax paid? T/F

2. What is the NPV of the project?(round to nearest dollar)

3. What is the payback period in years?(round to 2 decimal places)

4.What is the IRR?(Round to 2 decimal places, i.e. enter 10.1% as 0.101)

5.Regardless of your answer on question 2, assume that the NPV is >0. Should you invest?

6.Regardless of your answer on question 3, assume the payback is more than 3 years should you invest in the project?

7. Regardless of your answer on question 4, assume the project has an IRR of 12%. Should you invest?

QUESTION 1

If price is cut and demand is inelastic, then

1. total revenue will rise.

2. quantity demanded will fall

3. total revenue will fall.

4. total revenue will not change.  

QUESTION 2

The presence of substitute goods will tend to make demand more

1. inelastic.

2. vertical.

3. elastic.

4. unit elastic.

QUESTION 3

Brand name products tend to have demand curves that are relatively more inelastic because

1. brand name products tend to have more substitutes.

2. brand names are not valued.

3. brand name products tend to have fewer substitutes.

4. consumers are very sensitive to the prices of brand names.

QUESTION 4

A manager can determine if her product is viewed as a normal good or an inferior good by considering

1. income elasticity.

2. cross elasticity.

3. price elasticity.

4. advertising elasticity.

QUESTION 5

A luxury good has

1. a very high income elasticity.

2. a cross elasticity of one.

3. a negative price elasticity.

4. a negative income elasticity.

QUESTION 6

Knowing demand is equivalent to knowing the

1. average investor.

2. customer.

3. employee.

4. economic profit.