Question 1 (EPS)

The following summarised information is available in relation to ‘La Scan’, a publicly listed company in Australia:

Statement of comprehensive income extracts for years ended 30^th June:

* Acquired on the 1^st November 2017

Analyst expect profits from the market sector in which La Scan’s existing operations are based to increase by 6% in the year to 30^th June 2019 and by 8% in the sector of its newly acquired operations.

On 1^st July 2016 La Scan had:

$12 million of $1 ordinary shares in issue.

$5 million 8% convertible debentures 2023; the terms of conversion are 40 equity shares in exchange for each $100 of debenture.

On 1 January 2018 the directors of La Scan were granted options to buy 2 million shares in the company for $1 each. The average market price of La Scan’s shares for the year ending 30^th June 2018 was $2.50 each.

Assume an income tax rate of 30% for year 2016,2017 and 2018

Required:

(i) Calculate La Scan’s estimated profit after tax for the year ending 30 June 2019 assuming the analysts’ expectations prove correct;

(ii) Calculate the diluted earnings per share (EPS) on the continuing operations of La Scan for the year ended 30 June 2018 and the comparatives for 2017.

Universal Foods issued 12% bonds, dated January 1, with a face amount of $155 million on January 1, 2018 to Wang Communications. The bonds mature on December 31, 2032 (15 years). The market rate of interest for similar issues was 14%. Interest is paid semiannually on June 30 and December 31. Universal uses the straight-line method. Universal Foods sold the entire bond issue to Wang Communications. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)

Required:
1-3. Prepare the journal entry to record the purchase of the bonds by Wang Communications on January 1, 2018, interest revenue on June 30, 2018 and interest revenue on December 31, 2025. (Enter your answers in whole dollars. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Answer is not complete.

Smith, Inc., has the following stockholders’ equity accounts as of January 1, 2018:

Haried Company purchases all of Smith's common stock on January 1, 2018, for $14,520,000. The preferred stock remains in the hands of outside parties. Any excess acquisition-date fair value will be assigned to franchise contracts with a 40-year remaining life

During 2018, Smith reports earning $680,000 in net income and declares $590,000 in cash dividends. Haried applies the equity method to this investment. a.What is the noncontrolling interest's share of consolidated net income for this period? b.What is the balance in the Investment in Smith account as of December 31, 2018? c.What consolidation entries are needed for 2018?

Prepare Entry S and A to eliminate the subsidiary stockholders' equity, record excess fair values, and to record the outside ownership of the subsidiary's preferred stock at fair value.

Prepare Entry S and A to eliminate the subsidiary stockholders' equity, record excess fair values, and to record the outside ownership of the subsidiary's preferred stock at fair value.

Prepare Entry I to eliminate the equity accrual made in connection with common stock along with the excess amortization recorded by the parent.

Prepare Entry D to remove the intra-entity dividend declarations made on common stock.

Prepare Entry E to recognize the amortization of franchises for the current year.

On January 2, 2015, Roth, Inc. purchased a laser cutting machine to be used in the fabrication of a part for one of its key products. The machine cost $120,000, and its estimated useful life was four years or 1,150,000 cuttings, after which it could be sold for $5,000.

Required

a. Calculate each year’s depreciation expense for the machine's useful life under each of the following depreciation methods (round all answers to the nearest dollar):

1. Straight-line.
2. Double-declining balance.
3. Units-of-production. (Assume annual production in cuttings of 280,000; 430,000; 360,000; and 80,000.)

1. Straight-Line

2. Double-declining balance

3. Units of Production

b. Assume that the machine was purchased on July 1, 2015. Calculate each year’s depreciation expense for the machine's useful life under each of the following depreciation methods:

1. Straight-line.
2. Double-declining balance.

1. Straight-Line

2. Double-declining balance (Round answers to the nearest whole number, when appropriate.)

Just Dew It Corporation reports the following balance sheet information for 2017 and 2018. JUST DEW IT CORPORATION 2017 and 2018 Balance Sheets Assets Liabilities and Owners' Equity 2017 2018 2017 2018 Current assets Current liabilities Cash $ 10,650 $ 10,700 Accounts payable $ 72,000 $ 64,250 Accounts receivable 27,600 27,950 Notes payable 47,500 46,750 Inventory 63,400 64,300 Total $ 119,500 $ 111,000 Total $ 101,650 $ 102,950 Long-term debt $ 56,100 $ 62,500 Owners' equity Common stock and paid-in surplus $ 82,000 $ 82,000 Fixed assets Retained earnings 183,050 194,450 Net plant and equipment $ 339,000 $ 347,000 Total $ 265,050 $ 276,450 Total assets $ 440,650 $ 449,950 Total liabilities and owners' equity $ 440,650 $ 449,950 Based on the balance sheets given for Just Dew It, calculate the following financial ratios for the year 2017. a. Current ratio b. Quick ratio c. Cash ratio d. NWC to total assets ratio e. Debt-equity ratio and equity multiplier f. Total debt ratio and long-term debt ratio Based on the balance sheets given for Just Dew It, calculate the following financial ratios for the year 2018. a. Current ratio b. Quick ratio c. Cash ratio d. NWC to total assets ratio e. Debt-equity ratio and equity multiplier f. Total debt ratio and long-term debt ratio

Holmes Company reported the following balance sheets at December 31, 2017 and 2018:

Its income statement for 2018 was as follows:

Additional information:

During 2018, Holmes had the following transactions:

Declared and paid a common dividend of $50 million.

Purchased additional fixed assets, but did not sell any.

Issued $30 million of new debt.

Paid interest on all its debt, and included the interest in Other operating expenses.

Repurchased common shares, but did not issue any.

Required:

Prepare a cash flow statement for Holmes for 2018, using the indirect method to present the operating section. For your calculations, it may be helpful to use the worksheet approach described in the chapter appendix to construct the cash flow statement. (Net cash outflows and amounts to be deducted should be indicated by a minus sign.)

Just Dew It Corporation reports the following balance sheet information for 2017 and 2018. JUST DEW IT CORPORATION 2017 and 2018 Balance Sheets Assets Liabilities and Owners' Equity 2017 2018 2017 2018 Current assets Current liabilities Cash $ 10,050 $ 10,300 Accounts payable $ 74,750 $ 58,500 Accounts receivable 27,300 28,950 Notes payable 49,000 50,000 Inventory 64,900 64,000 Total $ 123,750 $ 108,500 Total $ 102,250 $ 103,250 Long-term debt $ 64,400 $ 63,200 Owners' equity Common stock and paid-in surplus $ 84,000 $ 84,000 Fixed assets Retained earnings 166,100 190,550 Net plant and equipment $ 336,000 $ 343,000 Total $ 250,100 $ 274,550 Total assets $ 438,250 $ 446,250 Total liabilities and owners' equity $ 438,250 $ 446,250 Based on the balance sheets given for Just Dew It, calculate the following financial ratios for the year 2017. a. Current ratio b. Quick ratio c. Cash ratio d. NWC to total assets ratio e. Debt-equity ratio and equity multiplier f. Total debt ratio and long-term debt ratio Based on the balance sheets given for Just Dew It, calculate the following financial ratios for the year 2018. a. Current ratio b. Quick ratio c. Cash ratio d. NWC to total assets ratio e. Debt-equity ratio and equity multiplier f. Total debt ratio and long-term debt ratio

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.

(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.

Hope Company’s total assets were $5,380. Hope collected on $957 of account receivable that had previously been written off.  After the collection, Hope’s total assets will be $______

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Hope Company’s total assets were $19,502. Hope determined that an $1,066 account receivable was uncollectible and wrote off the receivable. After the write off, Hope’s total assets will be $______

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At the beginning of 2018 Evan Company had a $1,795 balance in its accounts receivable account and a $462 balance in allowance for doubtful accounts. During 2018, Evan experienced the following events.

(1) Earned $2,697 of revenue on account.

(2) Collected $1,639 cash from accounts receivable.

(3) Wrote-off $612 of accounts receivable as uncollectible.

Evan estimates uncollectible accounts to be 3% of sales. Based on this information, the December 31, 2018 balance in the accounts receivable account is

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Ava Company sets bad debt expense at 2 percent of its sales. Ava reported total sales of $ 65,249. Before the adjustment, Ava had $509 credit balance in its allowance for doubtful accounts.

What is the ending balance in the Allowance for Doubtful Accounts that Ava report on its Balance Sheet?

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On December 31, 2018, Ava Company had an ending balance of $9,213 in its accounts receivable account and an unadjusted (current) balance in its allowance for doubtful accounts account of $119.Ava estimates uncollectible accounts expense to be 9% of receivables. .Based on this information, the amount of uncollectible accounts expense shown on the 2018 income statement is $___________

Hello,

can you assist with the below and show all work?

Target costs:
Medical Instruments uses a manufacturing costing system with one direct cost category (direct materials) and three indirect cost categories:
a. Setup, production order, and materials-handling costs that vary with the number of batches.
b. Manufacturing operations costs that vary with machine-hours.
c. Costs of engineering changes that vary with the number of engineering changes made

A) calculate the manufacturing cost per unit of HJ6 in 2017

B) calculate the manufacturing cost per unit of HJ6 in 2018

C) Did medical instruments achieve the target manufacturing cost per unit in HJ6 in 2018