Sage Corporation has pretax financial income (or loss) from 2015 through 2021 as follows.

Pretax financial income (loss) and taxable income (loss) were the same for all years since Sage has been in business. In recording the benefits of a loss carryforward, assume that it is more likely than not that the related benefits will be realized.

Indicate what the income tax expense portion of the income statement for 2016 should look like. Assume all income (loss) relates to continuing operations.

How should the income tax expense section of the income statement for 2017 appear?

What entry for income taxes should be recorded in 2020​​​​​​​

How should the income tax expense section of the income statement for 2020 appear?

The following information is taken from Smith Corporation's financial statements:

December 31

2020   2019

For 2020 Year

—————————————

Net income                  $63,300

Depreciation expense              22,000

Amortization of patents             5,000

Cash dividends declared and paid        25,000

Gain or loss on sale of patents         none

INSTRUCTIONS

Prepare a statement of cash flows for Smith Corporation for the year 2020. (Use the indirect method.)

Assume that in March of 2019 you buy a bond issued by a corporation that has a face of $10,000 and a coupon rate of 5%. The bond will mature in March of 2022. Assume that you pay $10,500 for the bond.

2.a (3 points) Given that you paid $10,500 for the bond, what does this tell you about the market interest rate (the yield to maturity) on the coupon bond when you bought it?

2.b (4 points) Assume that you plan on selling the bond in March of 2020. Use a bond- pricing equation to illustrate the price that you will be able to sell the bond for in March of 2020. You do not have to solve the equation.

2.c (4 points) Assume that the corporation defaults in March of 2020 and pays you $9000 rather than the promised future cash flows. Briefly discuss the concept of the actual return earned on a debt instrument and how the corporation’s default has affected your actual return on the bond that you bought in 2019.

3) Between February 2008 and Summer 2009, the Fed supplemented its open market operations with a greatly expanded program of direct lending (both overnight and short term 28 and 84 day loans) to commercial banks, investment banks, brokerage and primary dealer units of bank holding companies. It also agreed to accept a wider range of short-term securities (instead of accepting only T-Bills) as collateral on these loans and even initiated a program to buy commercial paper from money market funds. Explain why the Fed created all these extraordinary direct lending facilities instead of simply relying on traditional open market purchases of Treasury securities. 4 pts

4) As conditions in short term financial markets improved by summer of 2009 the Fed closed down its lending under these programs mentioned in Q3 above. However, throughout the next 4 years the Fed increased substantially its purchases of longer term mortgage backed securities and Treasury notes from banks in a series of 3 “Quantitative Easing” (QE) Programs.

A) Assume that both lender & borrower confidence levels start to return to normal and financial and physical investment levels start to rise much more strongly in the next 12 months than in the last few years. What potential problems will the extraordinary growth in banks’ reserve deposits and in the size of the Fed’s portfolio of longer term Treasury and Mortgage backed bonds that has resulted from 3 rounds of Quantitative Easing create then for the Fed? 4pts

B) What relatively untested policy tools will help the Fed deal with this problem? Explain. ( Hint: you may wish to look at www.federalreserve.gov then click monetary policy…then Policy Normalization: principles and Plans) 4pts.

Andretti Company has a single product called a Dak. The company normally produces and sells 87,000 Daks each year at a selling price of $58 per unit. The company’s unit costs at this level of activity are given below:

A number of questions relating to the production and sale of Daks follow. Each question is independent.

3. The company has 600 Daks on hand that have some irregularities and are therefore considered to be "seconds." Due to the irregularities, it will be impossible to sell these units at the normal price through regular distribution channels. What is the unit cost figure that is relevant for setting a minimum selling price?

4. Due to a strike in its supplier’s plant, Andretti Company is unable to purchase more material for the production of Daks. The strike is expected to last for two months. Andretti Company has enough material on hand to operate at 25% of normal levels for the two-month period. As an alternative, Andretti could close its plant down entirely for the two months. If the plant were closed, fixed manufacturing overhead costs would continue at 35% of their normal level during the two-month period and the fixed selling expenses would be reduced by 20% during the two-month period.

a. How much total contribution margin will Andretti forgo if it closes the plant for two months?

b. How much total fixed cost will the company avoid if it closes the plant for two months?

c. What is the financial advantage (disadvantage) of closing the plant for the two-month period?

d. Should Andretti close the plant for two months?

Andretti Company has a single product called a Dak. The company normally produces and sells 83,000 Daks each year at a selling price of $60 per unit. The company’s unit costs at this level of activity are given below:

Direct materials $ 9.50

Direct labor 9.00

Variable manufacturing overhead 2.30

Fixed manufacturing overhead 9.00 ($747,000 total)

Variable selling expenses 2.70

Fixed selling expenses 3.50 ($290,500 total)

Total cost per unit $ 36.00

1-a. Assume that Andretti Company has sufficient capacity to produce 103,750 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its unit sales by 25% above the present 83,000 units each year if it were willing to increase the fixed selling expenses by $100,000. What is the financial advantage (disadvantage) of investing an additional $100,000 in fixed selling expenses?

1-b. Would the additional investment be justified?

4. Due to a strike in its supplier’s plant, Andretti Company is unable to purchase more material for the production of Daks. The strike is expected to last for two months. Andretti Company has enough material on hand to operate at 25% of normal levels for the two-month period. As an alternative, Andretti could close its plant down entirely for the two months. If the plant were closed, fixed manufacturing overhead costs would continue at 35% of their normal level during the two-month period and the fixed selling expenses would be reduced by 20% during the two-month period.

b. How much total fixed cost will the company avoid if it closes the plant for two months?

c. What is the financial advantage (disadvantage) of closing the plant for the two-month period?

Bob's lawn mowing service is a profit maximizing competitive firm. The following questions relate to Bob's short run and long run decisions regarding shutting down and exiting. For each question, determine whether Bob should shut down or operate in the short run and exit or remain in lawn mowing business in the long run.

a. Suppose that Bob is payed $28 per lawn and he mows 12 lawns per day. His total cost each day is $400, of which $50 is a fixed cost. Should Bob shut down or operate in the short run? Should Bob exit or remain in business in the long run?

b. Suppose Bob is payed $30 per lawn and he mows 12 lawns per day. His total cost each day is $400, $50 of which is a fixed cost. Should Bob shut down or operate in the short run? Should Bob exit or remain in business in the long run?

c. Suppose Bob is payed $35 per lawn and he mows 12 lawns per day. His total cost each day is $400, $50 of which is a fixed cost. Should Bob shut down or operate in the short run? Should Bob exit or remain in business in the long run?

topic: Radio telescoped

d. The technology and principle of working and its operation with suitable results?
e. Sustainability aspects: highlight the parameters which makes the system sustainable and discussion of effective parameters studied ?
f. Evaluation of the work with proper justification for chosen parameters and values ?

Q- ‘The dynamic world of the technologies is fast changing the nature of the goods and the ways to produce them.’ In the context of the above statement, explain the impact of technology on the long run cost and the elasticity of supply in your business over a period of time. Support your answer with an appropriate diagram.