The Harris Company is the lessee on a four-year lease with the
following payments at the end of each year:
| Year 1: | $ | 12,500 |
| Year 2: | $ | 17,500 |
| Year 3: | $ | 22,500 |
| Year 4: | $ | 27,500 |
An appropriate discount rate is 7 percentage, yielding a present
value of $66,314.
a-1. If the lease is an operating lease, what will
be the initial value of the right-of-use asset?
a-2. If the lease is an operating lease, what will
be the initial value of the lease liability?
a-3. If the lease is an operating lease, what will
be the lease expense shown on the income statement at the end of
year 1?
a-4. If the lease is an operating lease, what will
be the interest expense shown on the income statement at the end of
year 1? (Leave no cells blank – be certain to enter “0”
wherever required.)
a-5. If the lease is an operating lease, what will
be the amortization expense shown on the income statement at the
end of year 1? (Leave no cells blank – be certain to enter
“0” wherever required.)
b-1. If the lease is a finance lease, what will be
the initial value of the right-of-use asset?
b-2. If the lease is a finance lease, what will be
the initial value of the lease liability?
b-3. If the lease is a finance lease, what will be
the lease expense shown on the income statement at the end of year
1? (Leave no cells blank – be certain to enter “0” wherever
required.)
b-4. If the lease is a finance lease, what will be
the interest expense shown on the income statement at the end of
year 1? (Round your answer to the nearest dollar
amount.)
b-5. If the lease is a finance lease, what will be
the amortization expense shown on the income statement at the end
of year 1? (Round your answer to the nearest dollar
amount.)
In: Accounting
The Harris Company is the lessee on a four-year lease with the
following payments at the end of each year:
| Year 1: | $ | 11,000 |
| Year 2: | $ | 16,000 |
| Year 3: | $ | 21,000 |
| Year 4: | $ | 26,000 |
An appropriate discount rate is 7 percentage, yielding a present
value of $61,233.
a-1. If the lease is an operating lease, what will
be the initial value of the right-of-use asset?
a-2. If the lease is an operating lease, what will
be the initial value of the lease liability?
a-3. If the lease is an operating lease, what will
be the lease expense shown on the income statement at the end of
year 1?
a-4. If the lease is an operating lease, what will
be the interest expense shown on the income statement at the end of
year 1? (Leave no cells blank – be certain to enter “0”
wherever required.)
a-5. If the lease is an operating lease, what will
be the amortization expense shown on the income statement at the
end of year 1? (Leave no cells blank – be certain to enter
“0” wherever required.)
b-1. If the lease is a finance lease, what will be
the initial value of the right-of-use asset?
b-2. If the lease is a finance lease, what will be
the initial value of the lease liability?
b-3. If the lease is a finance lease, what will be
the lease expense shown on the income statement at the end of year
1? (Leave no cells blank – be certain to enter “0” wherever
required.)
b-4. If the lease is a finance lease, what will be
the interest expense shown on the income statement at the end of
year 1? (Round your answer to the nearest dollar
amount.)
b-5. If the lease is a finance lease, what will be
the amortization expense shown on the income statement at the end
of year 1? (Round your answer to the nearest dollar
amount.)
In: Finance
4. (Applying LU and LUP decompositions) In this problem, we'll use the LU/LUP decomposition to solve a linear system of equations.
a) For A = [12 -8 13 -1 13;14 11 -5 -5 -7;1 -8 -9 10 8;-11 10 -8 3 8;-11 -8 4 2 -4] find matrices P, L, and U so that PA = LU using Matlab's lu function. Based on your results: did Matlab use pivoting during the lu-computation?
b) For b = [4;-4;-5;3;7] solve Ax = b using the LU decomposition as follows. Solving Ax = b is the same as solving PAx = Pb. (With P from a). Since PA = LU, we need to solve LUx = Pb, and we can split that into two triangular systems as follows: Ly = Pb, and Ux = y. Solve both of these systems using Matlab's linsolve, state x and y explicitly.
c) Compare the quality of the x you found in b to the solution of Ax = b you get from using linsolve. (As in 2d, work with the differences Ax - b).
d) You want so solve Ax = b for various vectors b, so you collect them into a single matrix B. So your goal is to find a matrix X so that AX = B (one column in X for each column in B). Working with P, L, and U from parts a/b we see that this amounts to solving two systems: LY = PB and UX = Y. For B = [18 -7 -14 10 -14 -2 13 12 -15 -15;-15 -14 4 -2 13 -16 15 -3 -15 14;3 12 -10 -17 2 19 -17 17 15 5;-1 -8 6 -11 20 -20 -4 -13 3 -6;-20 1 8 17 -17 11 -10 -10 2 1] solve these two equations using Matlab's linsolve.
First find Y in LY = PB, and then use that to find X in UX = Y. Check that AX - B is close to the zero matrix.
For this last problem, work with format short (or even format compact) so that the matrices don't use up too much screenspace.
In: Advanced Math
C4-2 From Recording Transactions (Including Adjusting Journal Entries) to Preparing Financial Statements and Closing Journal Entries (Chapters 2, 3, and 4) [LO 2-3, LO 3-3, LO 4-1, LO 4-2, LO 4-3, LO 4-4, LO 4-5, LO 4-6]
|
[The following information applies to the questions displayed below.] |
| Brothers Harry and Herman Hausyerday began operations of their machine shop (H & H Tool, Inc.) on January 1, 2013. The annual reporting period ends December 31. The trial balance on January 1, 2015, follows (the amounts are rounded to thousands of dollars to simplify): |
| Account Titles | Debit | Credit | ||||
| Cash | $ | 4 | ||||
| Accounts Receivable | 4 | |||||
| Supplies | 11 | |||||
| Land | 0 | |||||
| Equipment | 50 | |||||
| Accumulated Depreciation | $ | 7 | ||||
| Software | 23 | |||||
| Accumulated Amortization | 5 | |||||
| Accounts Payable | 6 | |||||
| Notes Payable (short-term) | 0 | |||||
| Salaries and Wages Payable | 0 | |||||
| Interest Payable | 0 | |||||
| Income Tax Payable | 0 | |||||
| Common Stock | 67 | |||||
| Retained Earnings | 7 | |||||
| Service Revenue | 0 | |||||
| Salaries and Wages Expense | 0 | |||||
| Depreciation Expense | 0 | |||||
| Amortization Expense | 0 | |||||
| Income Tax Expense | 0 | |||||
| Interest Expense | 0 | |||||
| Supplies Expense | 0 | |||||
| Totals | $ | 92 | $ | 92 | ||
| Transactions during 2015 (summarized in thousands of dollars) follow: | |
| 1. | Borrowed $13 cash on a six-month note payable dated March 1, 2015. |
| 2. | Purchased land for future building site; paid cash, $7. |
| 3. | Earned revenues for 2015, $140, including $30 on credit and $110 collected in cash. |
| 4. | Issued additional shares of stock for $2. |
| 5. | Recognized salaries and wages expense for 2015, $75 paid in cash. |
| 6. | Collected accounts receivable, $14. |
| 7. | Purchased software, $12 cash. |
| 8. | Paid accounts payable, $14. |
| 9. | Purchased supplies on account for future use, $17. |
| 10. | Signed a $30 service contract to start February 1, 2016. |
| Data for adjusting journal entries: | |
| 11. | Unrecorded amortization for the year on software, $5. |
| 12. | Supplies counted on December 31, 2015, $11. |
| 13. | Depreciation for the year on the equipment, $7. |
| 14. | Accrued interest of $2 on notes payable. |
| 15. | Salaries and wages earned but not yet paid or recorded, $13. |
| 16. | Income tax for the year was $9. It will be paid in 2016. |
References
Section BreakC4-2 From Recording Transactions (Including Adjusting Journal Entries) to Preparing Financial Statements and Closing Journal Entries (Chapters 2, 3, and 4) [LO 2-3, LO 3-3, LO 4-1, LO 4-2, LO 4-3, LO 4-4, LO 4-5, LO 4-6]
1.
value:
1.11 points
Required information
C4-2 Part 2
| Required: | |
| 2. |
Record journal entries for transactions (1) through (10). (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in thousands of dollars.) |
References
eBook & Resources
General JournalLearning Objective: 04-01 Explain why adjustments are needed.Learning Objective: 04-04 Prepare financial statements.
C4-2 Part 2Learning Objective: 04-02 Prepare adjustments needed at the end of the period.Learning Objective: 04-05 Explain the closing process.
Difficulty: 3 HardLearning Objective: 04-03 Prepare an adjusted trial balance.Learning Objective: 04-06 Explain how adjustments affect financial results.
Check my work
2.
value:
1.11 points
Required information
C4-2 Part 3, 5, and 8
| 3, 5 and 8. |
Set up T-accounts for the accounts on the trial balance. Enter beginning balances and post the transactions 1-10, adjusting entries 11-16, and closing entry. (Enter your answers in thousands of dollars.) |
References
eBook & Resources
WorksheetLearning Objective: 04-01 Explain why adjustments are needed.Learning Objective: 04-04 Prepare financial statements.
C4-2 Part 3, 5, and 8Learning Objective: 04-02 Prepare adjustments needed at the end of the period.Learning Objective: 04-05 Explain the closing process.
Difficulty: 3 HardLearning Objective: 04-03 Prepare an adjusted trial balance.Learning Objective: 04-06 Explain how adjustments affect financial results.
Check my work
3.
value:
1.11 points
Required information
C4-2 Part 3
| 3. |
Post the journal entries from requirement 2 to T-accounts and prepare an unadjusted trial balance. (Enter your answers in thousands of dollars.) |
References
eBook & Resources
WorksheetLearning Objective: 04-01 Explain why adjustments are needed.Learning Objective: 04-04 Prepare financial statements.
C4-2 Part 3Learning Objective: 04-02 Prepare adjustments needed at the end of the period.Learning Objective: 04-05 Explain the closing process.
Difficulty: 3 HardLearning Objective: 04-03 Prepare an adjusted trial balance.Learning Objective: 04-06 Explain how adjustments affect financial results.
Check my work
4.
value:
1.11 points
Required information
C4-2 Part 4
| 4. |
Record the adjusting journal entries (11) through (16). (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in thousands of dollars.) |
References
eBook & Resources
General JournalLearning Objective: 04-01 Explain why adjustments are needed.Learning Objective: 04-04 Prepare financial statements.
C4-2 Part 4Learning Objective: 04-02 Prepare adjustments needed at the end of the period.Learning Objective: 04-05 Explain the closing process.
Difficulty: 3 HardLearning Objective: 04-03 Prepare an adjusted trial balance.Learning Objective: 04-06 Explain how adjustments affect financial results.
Check my work
5.
value:
1.11 points
Required information
C4-2 Part 5
| 5. |
Post the adjusting entries from requirement 4 and prepare an adjusted trial balance. (Enter your answers in thousands of dollars.) |
References
eBook & Resources
WorksheetLearning Objective: 04-01 Explain why adjustments are needed.Learning Objective: 04-04 Prepare financial statements.
C4-2 Part 5Learning Objective: 04-02 Prepare adjustments needed at the end of the period.Learning Objective: 04-05 Explain the closing process.
Difficulty: 3 HardLearning Objective: 04-03 Prepare an adjusted trial balance.Learning Objective: 04-06 Explain how adjustments affect financial results.
Check my work
6.
value:
1.11 points
Required information
C4-2 Part 6
| 6.a | Prepare an income statement. |
| 6.b | Prepare a statement of retained earnings. |
| 6.c |
Prepare balance sheet. (Amounts to be deducted should be indicated by a minus sign.) |
References
eBook & Resources
Financial StatementsLearning Objective: 04-01 Explain why adjustments are needed.Learning Objective: 04-04 Prepare financial statements.
C4-2 Part 6Learning Objective: 04-02 Prepare adjustments needed at the end of the period.Learning Objective: 04-05 Explain the closing process.
Difficulty: 3 HardLearning Objective: 04-03 Prepare an adjusted trial balance.Learning Objective: 04-06 Explain how adjustments affect financial results.
Check my work
7.
value:
1.11 points
Required information
C4-2 Part 7
| 7. |
Prepare the closing journal entry. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in thousands of dollars.) |
References
eBook & Resources
General JournalLearning Objective: 04-01 Explain why adjustments are needed.Learning Objective: 04-04 Prepare financial statements.
C4-2 Part 7Learning Objective: 04-02 Prepare adjustments needed at the end of the period.Learning Objective: 04-05 Explain the closing process.
Difficulty: 3 HardLearning Objective: 04-03 Prepare an adjusted trial balance.Learning Objective: 04-06 Explain how adjustments affect financial results.
Check my work
8.
value:
1.11 points
Required information
C4-2 Part 8
| 8. |
Post the closing entry from requirement 7 and prepare a post-closing trial balance. (Enter your answers in thousands of dollars.) |
References
eBook & Resources
WorksheetLearning Objective: 04-01 Explain why adjustments are needed.Learning Objective: 04-04 Prepare financial statements.
C4-2 Part 8Learning Objective: 04-02 Prepare adjustments needed at the end of the period.Learning Objective: 04-05 Explain the closing process.
Difficulty: 3 HardLearning Objective: 04-03 Prepare an adjusted trial balance.Learning Objective: 04-06 Explain how adjustments affect financial results.
Check my work
9.
value:
1.12 points
Required information
C4-2 Part 9
| 9-a. |
How much net income did H & H Tool, Inc., generate during 2015? What was its net profit margin? (Enter "Net Income" in thousands of dollars. Round "Net Profit Profit" to 2 decimal places.) |
| 9-b. | Is the company financed primarily by liabilities or stockholders’ equity? | ||||
|
| 9-c. |
What is its current ratio? (Enter your answers in thousands of dollars.) |
In: Accounting
Question 5 (1 point)
Suppose 65.47% of small businesses experience cash flow problems in their first 5 years. A consultant takes a random sample of 522 businesses that have been opened for 5 years or less. What is the probability that less than 64.62% of the businesses have experienced cash flow problems?
Question 5 options:
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Question 6 (1 point)
The rainfall in Aberdeen Reservoir, Washington (the wettest place in the contiguous United States) averages 123.79 inches per year with a standard deviation of 5.958 inches. A random sample of 36 is taken from the population. What is the distribution of the sample mean?
Question 6 options:
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Question 7 (1 point)
The rainfall in Aberdeen Reservoir, Washington (the wettest place in the contiguous United States) averages 130.78 inches per year with a standard deviation of 6.568 inches. A random sample of 37 is taken from the population. What is the distribution of the sample mean?
Question 7 options:
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Question 8 (1 point)
Suppose that NBA players average 28.7 points per game with a standard deviation of 8.04. A random sample of 187 players is taken. What is the probability that the sample mean is between 28.48 and 28.7?
Question 8 options:
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In: Statistics and Probability
Instructions: prepare any necessary journal entries for the above business activities.
The following information pertains to the business activities of the Hartman Company for the year ended on 12/31/2019
1. Stockholders invested $140,000 cash in the company on 1/1/2019
2. Purchased equipment costing $35,000 for $15,000 in cash and the remainder on credit on 1/15/2019.
3. Purchased supplies for $1,800 on 1/17/2019.
4. Paid $3,600 for a one-year insurance policy on 4/1/2019.
5. Singed a lease contract for the office building and paid $4,000 as a security deposit on 5/1/2019.
6. Hired an administrative assistant at an annual salary of $48,000 on 6/1/2019.
7. Purchased inventory costing $260,000 for $100,000 in cash and the remainder on credit on 6/2/2019
8. Paid off what Hartman owes for the purchase of inventory in transaction "7" on 6/12/2019.
9. Sold inventory costing $180,000 for $350,000 in 2019.
10. Total wage of $70,000 were paid in 2019.
11. Dividends of $4,000 were paid for 2019.
In: Accounting
Consider rolling both a fair four-sided die numbered 1-4 and a fair six-sided die numbered 1-6 together. After rolling both dice, let X denote the number appearing on the foursided die and Y the number appearing on the six-sided die. Define W = X +Y . Assume X and Y are independent.
(a) Find the moment generating function for W.
(b) Use the moment generating function technique to find the expectation.
(c) Use the moment generating function technique to find the variance
In: Statistics and Probability
Consider a fair four-sided die numbered 1-4 and a fair six-sided die numbered 1-6, where X is the number appearing on the four-sided die and Y is the number appearing on the six-sided die. Define W=X+Y when they are rolled together. Assuming X and Y are independent, (a) find the moment generating function for W, (b) the expectation E(W), (c) and the variance Var(W). Use the moment generating function technique to find the expectation and variance.
In: Statistics and Probability
Mercer Development is considering the potential of four different development projects. Each project would be completed in at most three years. The required cash outflow for each project is given in the table below, along with the net present value (NPV) of each project and the budget cash that is available to spend for each year.
|
Cash Outflow Required ($ million) |
Budget Cash Available ($ million) |
||||
|
Project 1 |
Project 2 |
Project 3 |
Project 4 |
||
|
Year 1 |
10 |
9 |
6 |
12 |
35 |
|
Year 2 |
4 |
5 |
4 |
2 |
12 |
|
Year 3 |
7 |
0 |
3 |
0 |
10 |
|
NPV |
30 |
28 |
20 |
14 |
|
The management of Mercer development wants to develop a linear programming model to find the optimal decisions on which projects to participate in. Suppose that for each project, Mercer Development can either fully participate or not at all. The objective of the management is to maximize the total NPV obtained by participating selected projects.
Formulate this problem as a linear programming problem.
In: Finance
On February 1, 2018, Cromley Motor Products issued 6% bonds,
dated February 1, with a face amount of $50 million. The bonds
mature on January 31, 2022 (4 years). The market yield for bonds of
similar risk and maturity was 8%. Interest is paid semiannually on
July 31 and January 31. Barnwell Industries acquired $50,000 of the
bonds as a long-term investment. The fiscal years of both firms end
December 31. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1
and PVAD of $1)
Required:
1. Determine the price of the bonds issued on February 1,
2018.
2-a. Prepare amortization schedules that indicate
Cromley’s effective interest expense for each interest period
during the term to maturity.
2-b. Prepare amortization schedules that indicate
Barnwell’s effective interest revenue for each interest period
during the term to maturity.
3. Prepare the journal entries to record the
issuance of the bonds by Cromley and Barnwell’s investment on
February 1, 2018.
4. Prepare the journal entries by both firms to
record all subsequent events related to the bonds through January
31, 2020.
In: Accounting