The following selected transactions relate to investment
activities of Ornamental Insulation Corporation during 2018. The
company buys debt securities, not intending to profit from
short-term differences in price and not necessarily to hold debt
securities to maturity, but to have them available for sale when
circumstances warrant. Ornamental’s fiscal year ends on December
31. No investments were held by Ornamental on December 31,
2017.
| Mar. | 31 | Acquired 6% Distribution Transformers Corporation bonds costing $530,000 at face value. | ||
| Sep. | 1 | Acquired $1,095,000 of American Instruments’ 8% bonds at face value. | ||
| Sep. | 30 | Received semiannual interest payment on the Distribution Transformers bonds. | ||
| Oct. | 2 | Sold the Distribution Transformers bonds for $568,000. | ||
| Nov. | 1 | Purchased $1,530,000 of M&D Corporation 4% bonds costing at face value. | ||
| Dec. | 31 | Recorded any necessary adjusting entry(s) relating to the investments. The market prices of the investments are: |
| American Instruments bonds | $ | 1,032,000 | |
| M&D Corporation bonds | $ | 1,603,000 | |
(Hint: Interest must be accrued.)
Required:
1. Prepare the appropriate journal entry for each
transaction or event during 2018, as well as any adjusting entries
necessary at year end. For any sales, prepare entries to update the
fair-value adjustment, record any reclassification adjustment, and
record the sale.
2. Indicate any amounts that Ornamental Insulation
would report in its 2018 income statement, 2018 statement of
comprehensive income, and 12/31/2018 balance sheet as a result of
these investments.
I need help with the journal entries
In: Accounting
The following selected transactions relate to investment activities of Ornamental Insulation Corporation during 2018. The company buys debt securities, not intending to profit from short-term differences in price and not necessarily to hold debt securities to maturity, but to have them available for sale when circumstances warrant. Ornamental’s fiscal year ends on December 31. No investments were held by Ornamental on December 31, 2017.
Mar. 31 Acquired 6% Distribution Transformers Corporation bonds costing $500,000 at face value.
Sep. 1 Acquired $1,050,000 of American Instruments’ 8% bonds at face value.
Sep. 30 Received semiannual interest payment on the Distribution Transformers bonds.
Oct. 2 Sold the Distribution Transformers bonds for $535,000.
Nov. 1 Purchased $1,500,000 of M&D Corporation 4% bonds costing at face value.
Dec. 31 Recorded any necessary adjusting entry(s) relating to the investments. The market prices of the investments are: American Instruments bonds $ 990,000 M&D Corporation bonds $ 1,570,000 (Hint: Interest must be accrued.)
Required: 1. Prepare the appropriate journal entry for each transaction or event during 2018, as well as any adjusting entries necessary at year end. For any sales, prepare entries to update the fair-value adjustment, record any reclassification adjustment, and record the sale.
2. Indicate any amounts that Ornamental Insulation would report in its 2018 income statement, 2018 statement of comprehensive income, and 12/31/2018 balance sheet as a result of these investments.
In: Accounting
The following selected transactions relate to investment
activities of Ornamental Insulation Corporation during 2018. The
company buys debt securities, not intending to profit from
short-term differences in price and not necessarily to hold debt
securities to maturity, but to have them available for sale when
circumstances warrant. Ornamental’s fiscal year ends on December
31. No investments were held by Ornamental on December 31,
2017.
| Mar. | 31 | Acquired 8% Distribution Transformers Corporation bonds costing $400,000 at face value. | ||
| Sep. | 1 | Acquired $900,000 of American Instruments’ 10% bonds at face value. | ||
| Sep. | 30 | Received semiannual interest payment on the Distribution Transformers bonds. | ||
| Oct. | 2 | Sold the Distribution Transformers bonds for $425,000. | ||
| Nov. | 1 | Purchased $1,400,000 of M&D Corporation 6% bonds costing at face value. | ||
| Dec. | 31 | Recorded any necessary adjusting entry(s) relating to the investments. The market prices of the investments are: |
| American Instruments bonds | $ | 850,000 | |
| M&D Corporation bonds | $ | 1,460,000 | |
(Hint: Interest must be accrued.)
Required:
1. Prepare the appropriate journal entry for each
transaction or event during 2018, as well as any adjusting entries
necessary at year end. For any sales, prepare entries to update the
fair-value adjustment, record any reclassification adjustment, and
record the sale.
2. Indicate any amounts that Ornamental Insulation
would report in its 2018 income statement, 2018 statement of
comprehensive income, and 12/31/2018 balance sheet as a result of
these investments.
In: Accounting
Problem 12-5 Various transactions related to trading securities [LO12-1, 12-3]
The following selected transactions relate to investment
activities of Ornamental Insulation Corporation during 2018. The
company buys debt securities, intending to profit from short-term
differences in price and maintaining them in an active trading
portfolio. Ornamental’s fiscal year ends on December 31. No
investments were held by Ornamental on December 31, 2017.
| Mar. | 31 | Acquired 8% Distribution Transformers Corporation bonds costing $590,000 at face value. | ||
| Sep. | 1 | Acquired $1,470,000 of American Instruments' 10% bonds at face value. | ||
| Sep. | 30 | Received semiannual interest payment on the Distribution Transformers bonds. | ||
| Oct. | 2 | Sold the Distribution Transformers bonds for $655,000. | ||
| Nov. | 1 | Purchased $2,350,000 of M&D Corporation 6% bonds at face value. | ||
| Dec. | 31 | Recorded any necessary adjusting entry(s) relating to the investments. The market prices of the investments are: |
| American Instruments bonds | $ | 1,429,000 | |
| M&D Corporation bonds | $ | 2,429,000 | |
(Hint: Interest must be accrued.)
Required:
1. Prepare the appropriate journal entry for each
transaction or event during 2018, as well as any adjusting entries
necessary at year end.
2. Indicate any amounts that Ornamental Insulation
would report in its 2018 income statement, 2018 statement of
comprehensive income, and 12/31/2018 balance sheet as a result of
these investments.
In: Accounting
The following selected transactions relate to investment
activities of Ornamental Insulation Corporation during 2018. The
company buys debt securities, not intending to profit from
short-term differences in price and not necessarily to hold debt
securities to maturity, but to have them available for sale when
circumstances warrant. Ornamental’s fiscal year ends on December
31. No investments were held by Ornamental on December 31,
2017.
| Mar. | 31 | Acquired 8% Distribution Transformers Corporation bonds costing $550,000 at face value. | ||
| Sep. | 1 | Acquired $1,125,000 of American Instruments’ 10% bonds at face value. | ||
| Sep. | 30 | Received semiannual interest payment on the Distribution Transformers bonds. | ||
| Oct. | 2 | Sold the Distribution Transformers bonds for $590,000. | ||
| Nov. | 1 | Purchased $1,550,000 of M&D Corporation 6% bonds costing at face value. | ||
| Dec. | 31 | Recorded any necessary adjusting entry(s) relating to the investments. The market prices of the investments are: |
| American Instruments bonds | $ | 1,060,000 | |
| M&D Corporation bonds | $ | 1,625,000 | |
(Hint: Interest must be accrued.)
Required:
1. Prepare the appropriate journal entry for each
transaction or event during 2018, as well as any adjusting entries
necessary at year end. For any sales, prepare entries to update the
fair-value adjustment, record any reclassification adjustment, and
record the sale.
2. Indicate any amounts that Ornamental Insulation
would report in its 2018 income statement, 2018 statement of
comprehensive income, and 12/31/2018 balance sheet as a result of
these investments.
In: Accounting
1. Sources of monopoly power
A monopolist, unlike a competitive firm, has some market power. It can raise its price, within limits, without the quantity demanded falling to zero. The main way it retains its market power is through barriers to entry—that is, other companies cannot enter the market to create competition in that particular industry.
Complete the following table by indicating which barrier to entry appropriately explains why a monopoly exists in each scenario.
|
Scenario |
Barriers to Entry |
|||
|---|---|---|---|---|
|
Exclusive Ownership of a Key Resource |
Government-Created Monopolies |
Economies of Scale |
||
| The Aluminum Company of America (Alcoa) formerly controlled all U.S. sources of bauxite, a key component in the production of aluminum. Given that Alcoa did not sell bauxite to any other companies, Alcoa was a monopolist in the U.S. aluminum industry from the late 19th century until the 1940s. | ||||
| In order to own and operate a taxi, drivers are required to obtain a taxi medallion. | ||||
| In the natural gas industry, low average total costs are obtained only through large-scale production. In other words, the initial cost of setting up all the necessary pipes and hoses makes it risky and, most likely, unprofitable for competitors to enter the market. | ||||
Grade It Now
In: Economics
Assume Saeed Inc. Purchases inventory evenly throughout 2014.
The ending inventory is purchased Nov. 30, 2014.
Uses straight-line depreciation on fixed assets.
Declares and pays dividends on Nov. 30, 2014.
Purchased the fixed assets on April 1, 2014.
Uses SAR as the functional currency.
Exchange Rates are given:
Jan 1, 2014 0.260
April 1, 2014 0.255
Nov. 30, 2014 0.240
Dec. 31, 2014 0.238
REQUIRED
Prepare a schedule to Saeed’s financial statements on Dec. 31, 2014 to U.S. dollars.
In: Accounting
Someone posted from a discussion question.... respond to posted
What are the three roles of the U.S. government in the health care system and in health insurance?
Without the government Healthcare in the United States and basically anywhere in the world would not exist. In the U.S the government has three important roles, the United States government acts as a provider, payor and lawmaker.
The government provides health care directly through for example; The Veterans Administration, TRICARE and the India Health Service. There are clinics, hospital and other health organizations that are supported by the government. As a payor to third party organizations or services. These services could be for example, to handle the claims for Medicare among other things. The third role of the United States government in the Health Care system is to act as a lawmaker, regular, to promote fair competition and avoid monopolies, moreover, the government enact laws to protect and service the public.
Provide some examples of the influence the Federal government has on private health insurance.
In terms of the influence the government has had on private health insurance. The state provides regulations and mandates to providers of health insurances, they must comply with certain regulations and requirement. The state also controls and monitors their legal functions and structure to ensure the company can meet its obligations.
In: Operations Management
Larkin Hydraulics, a wholly owned subsidiary of Caterpillar (U.S.), sold a 12 megawatt compression turbine to Rebecke-Terwilleger Company of the Netherlands for €4,000,000, payable in three months (90 days). Larkin derived its price quote of €4,000,000 by dividing its normal U.S. dollar sales price of $4.320,000 by the then current spot rate of $1.0800/€.
Four approaches are possible:
1. Hedge in the forward market. The 3-month forward exchange quote was $1.1060/€.
2. Hedge in the money market. Larkin could borrow euros in the Libor market at 8% per annum and invest in € at 5% p.a. In
the USD Libor market the firm can borrow at 7% p.a. and invest at 4% p.a.
3. Hedge with foreign currency options. August put options were available at strike price of $1.1000/€ for a premium of 2.0%
per contract. August call options with a strike at $1.1000/€ could be purchased for a premium of 3.0%.
4. Do nothing. Larkin could wait until the sales proceeds were received in August and sell the euros received for dollars in the
spot market.
Larkin’s banker forecasts that the exchange rate in 90 days will be $1.1400/€.
What should Larkin do?
In: Finance
Conch Republic Electronics Conch Republic Electronics is a midsized electronics manufacturer located in Key West, Florida. The company president is Shelly Couts, who inherited the company. The company originally repaired radios and other household appliances when it was founded over 70 years ago. Over the years, the company has expanded, and it is now a reputable manufacturer of various specialty electronic items. Jay McCanless, a recent MBA graduate, had been hired by the company in its finance department. One of the major revenue-producing items manufactured by Conch Republic is a smart phone. Conch Republic currently has one smart phone model on the market and sales have been excellent. The smart phone is a unique item in that it comes in a variety of tropical colors and is preprogrammed to play Jimmy Buffett music. However, as with any electronic item, technology changes rapidly, and the current smart phone has limited features in comparison with newer models. Conch Republic spent $750,000 to develop a prototype for a new smart phone that has all the features of the existing one but adds new features such as wifi tethering. The company has spent a further $200,000 for a marketing study to determine the expected sales figures for the new smart phone. Conch Republic can manufacture the new smart phone for $205 each in variable costs. Fixed costs for the operation are estimated to run $5.1 million per year. The estimated sales volume is 64,000, 106,000, 87,000, 78,000, and 54,000 per year for the next five years, respectively. The unit price of the new smart phone will be $485. The necessary equipment can be purchased for $34.5 million and will be depreciated on a seven-year MACRS schedule. It is believed the value of the equipment in five years will be $5.5 million. Net working capital for the smart phones will be 20 percent of sales and will occur with the timing of the cash flows for the year (i.e., there is no initial outlay for NWC). Changes in NWC will thus first occur in Year 1 with the first year?s sales. Conch Republic has a 35 percent corporate tax rate and a required rate of return of 12 percent. Shelly has asked Jay to prepare a report that answers the following questions: Questions
5. How sensitive is the NPV to changes in the price of the new smart phone?
6. How sensitive is the NPV to changes in the quantity sold?
7. Should Conch Republic produce the new smart phone?
8. Suppose Conch Republic loses sales on other models because of the introduction of the new model. How would this affect your analysis?
In: Finance