Question 1
Werner Chemical, Inc., leased a protein analyzer on September 30, 2013. The five-year lease agreement calls for Werner to make quarterly lease payments of $391,548, payable each September 30, December 31, March 31, June 30, with the first payment at September 30, 2013. Werner's incremental borrowing rate is 12%. Depreciation is recorded on a straight-line basis at the end of each fiscal year. The useful life of the equipment is five years. Use PVAD of $1. Required: 1. Determine the present value of the lease payments at September 30, 2013. (Round "PV Factor" to 5 decimal places and final answer to the nearest whole dollar amount.) Present value $ 2. What pretax amounts related to the lease would Werner report in its balance sheet at December 31, 2013? (Round "PV Factor" to 5 decimal places, intermediate and final answers to the nearest whole dollar amount.) Pretax amounts Liability $ Asset $ -------------------------------------------------------------------------------- 3. What pretax amounts related to the lease would Werner report in its income statement for the year ended December 31, 2013? (Round "PV Factor" to 5 decimal places, intermediate and final answer to the nearest whole dollar amount.) Pretax amount $ 4. What pretax amounts related to the lease would Werner report in its statement of cash flows for the year ended December 31, 2013? (Round "PV Factor" to 5 decimal places, intermediate and final answers to the nearest whole dollar amount.) Capital lease $ (Click to select)Significant noncash investing and financing activityCash outflows from operating activityCash outflows from financing activity Interest portion $ (Click to select)Cash outflows from operating activitySignificant noncash investing and financing activityCash outflows from financing activity Principal portion $ (Click to select)Cash outflows from financing activityCash outflows from operating activitySignificant noncash investing and financing activity Times-Roman Publishing Company reports the following amounts in its first three years of operation: ($ in 000s) 2013 2014 2015 Pretax accounting income $ 250 $ 240 $ 230 Taxable income 290 220 260 -------------------------------------------------------------------------------- The difference between pretax accounting income and taxable income is due to subscription revenue for one-year magazine subscriptions being reported for tax purposes in the year received, but reported in the income statement in later years when earned. The income tax rate is 40% each year. Times-Roman anticipates profitable operations in the future. Required: 1. What is the balance sheet account for which a temporary difference is created by this situation? Unearned subscription revenue Earned subscription revenue 2. For each year, indicate the cumulative amount of the temporary difference at year-end. (Enter your answers in thousands.) December 31 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- 2013 2014 2015 Temporary difference $ $ $ -------------------------------------------------------------------------------- 3. Determine the balance in the related deferred tax account at the end of each year. Is it a deferred tax asset or a deferred tax liability? (Enter your answers in thousands.) December 31 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- 2013 2014 2015 (Click to select)Deferred tax liabilityDeferred tax asset $ $ $
Question 2
A market researcher wants to study the television viewing habits of a particular small city. A sample of 40 adult residents is asked to record their television viewing in one week. The results are: Viewing time: = 15.3 hours, S = 3.8 hours. 27 respondents watched the evening news every weeknight. (a) Set up a 90% confidence interval estimate for the average weekly viewing time. Write a sentence to explain the meaning of your answer. (b) Test at the 5% level whether there is evidence that more than half of the city?s adult residents watch the evening news every weeknight. Null hypothesis: Alternative hypothesis: p-value: Conclusion: (c) Suppose that a national census later finds that the national average amount of television watched by adults is 16.1 hours per week, and that 48.7% watch the national news every weeknight. In what ways, if any, does this particular city differ from the nation as a whole in its viewing habits? (d) What important assumptions are needed to ensure the viability of the analyses?,Hi there, I really appreciate your help. I am a new member to course hero and the question is due today. Thanks again :),Thank You Natalia. Your help is much appreciated. Regards, Francis,Hi there, is there any possibility that it could be done before the deadline?,Possibly by 1/24/2012 8:00 PM ? Your help is much appreciated.,Sorry to bug you but it is very urgent. Thank You lots for your help so far :) Regards, Francis,Thank You.,HI there, Thank You for answering the other question. if it maybe easier for you, i'm attaching the question in word. Regards, Francis
Question 3
Question #1 (15 points) The ABC Company has two operating divisions and two support divisions. The following table presents the amount of hours of service provided by the two support divisions: OP 1 OP 2 SUP 1 SUP 2 SUP 1 1,000 2,000 0 1,000 SUP2 3,000 1,500 500 0 The costs for the four departments appear below: Department Costs OP 1 $250,000 OP 2 $300,000 SUP 1 $150,000 SUP 2 $60,000 a) Allocate the support department costs to the operating departments using the direct method. b) Allocate the support department costs to the operating departments using the step-down method, starting with Support Department 1. Question #2 (15 points) A company purchases and processes 15,000 gallons of raw material at a cost of $30,000. From this process, it produces 600 pounds of JP1 and 900 pounds of JP2. JP1 can be sold for $21 per pound or processed further into 6,000 units of FP1 at a total cost of $12,750. FP1 has a selling price of $4 per unit. JP2 can be sold for $26 per pound or processed further into 10,200 units of FP2 at a total cost of $26,250. FP2 has a selling price of $5 per unit. Assume that the company sells only FP1 and FP2. In other words, it further processes both joint products. Also, assume there is no beginning or ending inventory. Required: Allocate the joint costs to JP1 and JP2 using the physical measure method (based on pounds), sales value at split off method, and the NRV method. Bonus: Is it a good idea for the company to process JP1 into FP1? Is it a good idea for the company to process JP2 into FP2? Why or why not (be specific!). Question #3 (30 points) Expected production (units) 8,000 Standard pounds of DM usage per unit 3.00 Standard DM price per pound $5 Standard DML hours per unit 5.00 Standard DML rate per hour $15.00 Standard VMOH rate $6.00 per DLH Standard FMOH rate $8.00 per DLH Actual Units produced 7,800 Pounds of DM purchased 25,000 Total cost of DM purchased $130,000 Pounds of DM used 23,100 DML hours worked 40,100 Total cost of DML $585,460 VMOH $250,000 FMOH $350,000 a) Calculate the following variances: Direct materials price variance Direct materials efficiency variance Direct manufacturing labor rate variance Direct manufacturing labor efficiency variance VMOH spending variance VMOH efficiency variance FMOH spending variance FMOH production-volume variance b) Prepare the following journal entries: Purchase of direct materials Usage of direct materials Paying of wages for direct manufacturing labor Incurrence of VMOH & FMOH Application of VMOH & FMOH to production Closing out VMOH and FMOH accounts
Question 4
Chapter 6 4. Antivirus, Inc., expects its sales next year to be $2,000,000. Inventory and accounts receivable will increase by $430,000 to accommodate this sales level. The company has a steady profit margin of 12 percent with a 25 percent dividend payout. How much external financing will the firm have to seek? Assume there is no increase in liabilities other than that which will occur with the external financing. 8. Biochemical Corp. requires $500,000 in financing over the next three years. The firm can borrow the funds for three years at 10.60 percent interest per year. The CEO decides to do a forecast and predicts that if she utilizes short-term financing instead, she will pay 7.25 percent interest in the first year, 11.90 percent interest in the second year, and 8.15 percent interest in the third year. Determine the total interest cost under each plan. Which plan is less costly? 10. Assume that Hogan Surgical Instruments Co. has $2,000,000 in assets. If it goes with a low-liquidity plan for the assets, it can earn a return of 18 percent, but with a high-liquidity plan, the return will be 14 percent. If the firm goes with a short-term financing plan, the financing costs on the $2,000,000 will be 10 percent, and with a long-term financing plan, the financing costs on the $2,000,000 will be 12 percent. (Review Table 6?11 on page 178 for parts a, b, and c of this problem.) a. Compute the anticipated return after financing costs with the most aggressive asset-financing mix. b. Compute the anticipated return after financing costs with the most conservative asset-financing mix. c . Compute the anticipated return after financing costs with the two moderate approaches to the asset-financing mix. d. Would you necessarily accept the plan with the highest return after financing costs? Briefly explain. Chapter 7 2. Neon Light Company of Kansas City ships lamps and lighting appliances throughout the country. Ms. Neon has determined that through the establishment of local collection centers around the country, she can speed up the collection of payments by one and one-half days. Furthermore, the cash management department of her bank has indicated to her that she can defer her payments on her accounts by one-half day without offending suppliers. The bank has a remote disbursement center in Florida. a. If Neon Light Company has $2 million per day in collections and $1 million per day in disbursements, how many dollars will the cash management system free up? b. If Neon Light Company can earn 9 percent per annum on freed-up funds, how much will the income be? c. If the total cost of the new system is $375,000, should it be implemented? 7. Eco-Friendly Products has annual credit sales of $900,000 and an average collection period of 30 days. Assume a 360-day year. What is the company?s average accounts receivable balance? Accounts receivable are equal to the average daily credit sales times the average collection period. 13. Fisk Corporation is trying to improve its inventory control system and has installed an online computer at its retail stores. Fisk anticipates sales of 75,000 units per year, an ordering cost of $8 per order, and carrying costs of $1.20 per unit. a. What is the economic ordering quantity? b. How many orders will be placed during the year? c. What will the average inventory be? d. What is the total cost of ordering and carrying inventory? Chapter 8 10. Talmud Book Company borrows $16,000 for 30 days at 9 percent interest. What is the dollar cost of the loan? Dollar cost of loan = Amount borrowed x Interest rate x Days loan is outstanding/ 360 14. The Dade Company is borrowing $300,000 for one year and paying $27,000 in interest to Miami National Bank. The bank requires a 20 percent compensating balance. What is the effective rate of interest? What would be the effective rate if the company were required to make 12 monthly payments to retire the loan? The principal, as used in Formula 8?6 on page 232, refers to funds the firm can effectively utilize (Amount borrowed ? Compensating balance). 17. Your company plans to borrow $5 million for 12 months, and your banker gives you a stated rate of 14 percent interest. You would like to know the effective rate of interest for the following types of loans. (Each of the following parts stands alone.) a. Simple 14 percent interest with a 10 percent compensating balance. b. Discounted interest. c. An installment loan (12 payments). d. Discounted interest with a 5 percent compensating balance.
Question 5
"Charles Austin of the controller's office of Thompson Corporation was given the assignment of determining the basic and diluted earnings per share values for the year ending December 31, 2011. Austin has compiled the information listed below. The company is authorized to issue 8,000,000 shares of $10 par value common stock. As of December 31, 2010, 2,000,000 shares had been issued and were outstanding. The per share market prices of the common stock on selected dates were as follows. Price per Share July 1, 2010 $20.00 January 1, 2011 21.00 April 1, 2011 25.00 July 1, 2011 11.00 August 1, 2011 10.50 November 1, 2011 9.00 December 31, 2011 10.00 A total of 700,000 shares of an authorized 1,200,000 shares of convertible preferred stock had been issued on July 1, 2010. The stock was issued at its par value of $25, and it has a cumulative dividend of $3 per share. The stock is convertible into common stock at the rate of one share of convertible preferred for one share of common. The rate of conversion is to be automatically adjusted for stock splits and stock dividends. Dividends are paid quarterly on September 30, December 31, March 31, and June 30. Thompson Corporation is subject to a 40% income tax rate. The after-tax net income for the year ended December 31, 2011 was $11,550,000. The following specific activities took place during 2011. January 1?A 5% common stock dividend was issued. The dividend had been declared on December 1, 2010, to all stockholders of record on December 29, 2010. April 1?A total of 400,000 shares of the $3 convertible preferred stock was converted into common stock. The company issued new common stock and retired the preferred stock. This was the only conversion of the preferred stock during 2011. July 1?A 2-for-1 split of the common stock became effective on this date. The board of directors had authorized the split on June 1. August 1?A total of 300,000 shares of common stock were issued to acquire a factory building. November 1?A total of 24,000 shares of common stock were purchased on the open market at $9 per share. These shares were to be held as treasury stock and were still in the treasury as of December 31, 2011. Common stock cash dividends?Cash dividends to common stockholders were declared and paid as follows. April 15?$0.30 per share October 15?$0.20 per share Preferred stock cash dividends?Cash dividends to preferred stockholders were declared and paid as scheduled. a)Determine the number of shares used to compute basic earnings per share for the year ended December 31, 2011. bDetermine the number of shares used to compute diluted earnings per share for the year ended December 31, 2011. cCompute the adjusted net income to be used as the numerator in the basic earnings per share calculation for the year ended December 31, 2011"
