Question 1
Please help solve and show work Problem 19-15 EPS; convertible preferred stock; convertible bonds; order of entry [LO19-7, 19-9, 19-10] Information from the financial statements of Henderson-Niles Industries included the following at December 31, 2013: Common shares outstanding throughout the year 100 million Convertible preferred shares (convertible into 32 million shares of common) 60 million Convertible 10% bonds (convertible into 13.5 million shares of common) $ 900 million Henderson-Niles? net income for the year ended December 31, 2013, is $520 million. The income tax rate is 40%. Henderson-Niles paid dividends of $2 per share on its preferred stock during 2013. Required: Compute basic and diluted earnings per share for the year ended December 31, 2013. (Round your answers to 2 decimal places.) Problem 19-13 EPS; nonconvertible preferred stock; treasury shares; shares sold; stock dividend; options [LO19-4, 19-5, 19-6, 19-7, 19-8, 19-10] On December 31, 2012, Dow Steel Corporation had 600,000 shares of common stock and 300,000 shares of 8%, noncumulative, nonconvertible preferred stock issued and outstanding. Dow issued a 4% common stock dividend on May 15 and paid cash dividends of $400,000 and $75,000 to common and preferred shareholders, respectively, on December 15, 2013. On February 28, 2013, Dow sold 60,000 common shares. In keeping with its long-term share repurchase plan, 2,000 shares were retired on July 1. Dow's net income for the year ended December 31, 2013, was $2,100,000. The income tax rate is 40%. As part of an incentive compensation plan, Dow granted incentive stock options to division managers at December 31 of the current and each of the previous two years. Each option permits its holder to buy one share of common stock at an exercise price equal to market value at the date of grant and can be exercised one year from that date. Information concerning the number of options granted and common share prices follows: Date Granted Options Granted Share Price (adjusted for the stock dividend) December 31, 2011 8,000 $ 24 December 31, 2012 3,000 $ 33 December 31, 2013 6,500 $ 31 The market price of the common stock averaged $32 per share during 2013. Required: Compute Dow's earnings per share for the year ended December 31, 2013. (Round your answers to 2 decimal places.) Basic and diltued
Question 2
Forecasting Monthly Sales For years The Glass Slipper restaurant has operated in a resort community near a popular ski area of New Mexico. The restaurant is busiest during the first 3 months of the year, when the ski slopes are crowded and tourists flock to the area. When James and Deena Weltee built The Glass Slipper, they had a vision of the ultimate dining experience. As the view of surrounding mountains was breathtaking, a high priority was placed on having large windows and providing a spectacular view from anywhere inside the restaurant. Special attention was also given to the lighting, colors, and overall ambiance, resulting in a truly magnificent experience for all who came to enjoy gourmet dining. Since its opening, The Glass Slipper has developed and maintained a reputation as one of the ?must visit? places in that region of New Mexico. While James loves to ski and truly appreciates the mountains and all that they have to offer, he also shares Deena?s dream of retiring to a tropical paradise and enjoying a more relaxed lifestyle on the beach. After some careful analysis of their financial condition, they knew that retirement was many years away. Nevertheless, they were hatching a plan to bring them closer to their dream. They decided to sell The Glass Slipper and open a bed and breakfast on a beautiful beach in Mexico. While this would mean that work was still in their future, they could wake up in the morning to the sight of the palm trees blowing in the wind and the waves lapping at the shore. They also knew that hiring the right manager would allow James and Deena the time to begin a semi-retirement in a corner of paradise. To make this happen, James and Deena would have to sell. The Glass Slipper for the right price. The price of the business would be based on the value of the property and equipment, as well as projections of future income. A forecast of sales for the next year is needed to help in the determination of the value of the restaurant. Monthly sales for each of the past 3 years are provided in Table 5.14. Discussion Questions 1. Prepare a graph of the data. On this same graph, plot a 12-month moving average forecast. Discuss any apparent trend and seasonal patterns. 2. Use regression to develop a trend line that could be used to forecast monthly sales for the next year. Is the slope of this line consistent with what you observed in question 1? If not, discuss a possible explanation. 3. Use the multiplicative decomposition model on these data. Use this model to forecast sales for each month of the next year. Discuss why the slope of the trend equation with this model is so different from that of the trend equation in question 2. MONTH 2008 2009 2010 January 438 444 450 February 420 425 438 March 414 423 434 April 318 331 338 May 306 318 331 June 240 245 254 July 240 255 264 August 216 223 231 September 198 210 224 October 225 233 243 November 270 278 289 December 315 322 335
Question 3
Week 8 : Final Exam - Final Exam I have 2.5 hours to get this complete Time Remaining: Page: 1 2 3 4 Page 1 1. (TCO 1) A difference between actual costs and planned costs (Points : 4) should be investigated if the amount is exceptional. indicates that the planned cost was poorly estimated. indicates that the manager is doing a poor job. should be ignored unless it involves the cost of ingredients. 2. (TCO 1) Marco Diner produced and sold 2,000 bagels last month and had fixed costs of $6,000. If production and sales are expected to increase by 10% next month, which of the following statements is true? (Points : 4) Total fixed costs will increase. Total fixed costs will decrease. Fixed cost per unit will increase. Fixed cost per unit will decrease. 3. (TCO 2) Which of the following is not a manufacturing cost? (Points : 4) Manufacturing overhead Direct materials Direct labor Administrative expenses 4. (TCO 2) A form used to accumulate the cost of producing an item is called a(n) (Points : 4) job-cost sheet material requisition balance sheet invoice 5. (TCO 3) Why do we compute equivalent units differently for raw materials and conversion costs? (Points : 4) Raw materials are more difficult to count Conversion costs are more difficult to count They are introduced into the process at different times None of the above 6. (TCO 3) The Freedom Corporation?s painting department had a beginning inventory of 580 units, which had direct material costs of $22,715. During June, 9,290 units were started and costs of $1,268,085 were incurred for direct material. Ending inventory consists of 1,000 units, which are 35% complete with respect to direct material. What is the cost per equivalent unit for direct material? (Points : 4) $40.00 $137.00 $140.00 $159.00 7. (TCO 4) The range of activity for which estimates of cost behavior are likely to be accurate is the (Points : 4) incremental range margin of safety relevant range range of opportunity 8. (TCO 4) The number of units that must be sold to exactly cover its fixed and variable costs is the (Points : 4) contribution margin break-even point relevant range margin of safety 9. (TCO 5) Which of the following is treated as a product cost in variable costing? (Points : 4) Sales commissions Administrative salaries Fixed manufacturing overhead Direct labor 10. (TCO 5) When the number of units sold is equal to the number of units produced, net income using full costing will be (Points : 4) greater than net income under variable costing equal to net income using variable costing less than income using variable costing none of the above 11. (TCO 6) A contract which specifies that the suppler will be paid for the cost of production as well as some fixed amount or percentage of cost is called a(n) (Points : 4) approved overrun. cost-plus contract. allocation plan. indirect cost budget. 12. (TCO 6) The traditional approach to cost allocation (Points : 4) tends to over-cost high volume core products. usually requires more cost pools than ABC. attempts to identify the activities that cause costs. produces more accurate costs than any other method. 13. (TCO 7) Fixed costs that will be eliminated if a particular course of action is undertaken are called (Points : 4) optional costs opportunity costs direct costs avoidable costs Week 8 : Final Exam - Final Exam Time Remaining: Page: 1 2 3 4 Page 2 1. (TCO 7) Two or more products that result from common inputs are called (Points : 4) split products joint products combination products common products 2. (TCO 8) Which of the following statements about price, demand and profit is most generally true? (Points : 4) As price increases, demand increases As demand increases, prices increase As prices increase, demand decreases As price increases, profits decrease 3. (TCO 8) Which of the following are relevant in deciding whether to accept or reject a special order? (Points : 4) The impact the order will have on existing business. The price that will be charged on the special order. The incremental cost of filling the special order. All of the above. 4. (TCO 9) Which of the following is not a component of a time value of money problem? (Points : 4) The amount of cash received. The time until the cash is received. The opportunity costs of the alternative actions. The required rate of return. 5. (TCO 9) The internal rate of return (Points : 4) takes into account the time value of money. is the rate of return that equates the present value of future cash flows to the initial investment. both A and B neither A nor B 6. (TCO 10) Which of the following is not a reason that actual results may deviate from planned performance? (Points : 4) A bottom-up approach to budgeting was used. Managers have done a particularly good or particularly poor job of managing operations. Conditions have changed since the budget was developed. The budget was poorly conceived and constructed. 7. (TCO 10) The cash budget alerts management to all of the following except? (Points : 4) Stockouts will cause customer dissatisfaction The cash balance will be very low Excess cash will be available for investment Significant capital acquisitions are planned 8. (TCO 10) The difference between the stand and actual cost is a(n) (Points : 4) actual cost overrun. variance by exception. slack amount. standard cost variance. 9. (TCO 10) Which of the following are components of a direct labor variance? (Points : 4) Rate and efficiency Attainable and ideal Price and quantity Volume and controllable 10. (TCO 10) The type of center that has responsibility for generating revenue as well as controlling costs is a(n) (Points : 4) investment center. cost center. business center. profit center. 11. (TCO 10) Responsibility accounting holds managers responsible for (Points : 4) all costs charge to their department. all direct cost of their department plus part of the allocated company costs. only costs they have personally approved. only costs they can control. 12. (TCO 10) The ratio that measures the return earned independently of how the firm is financed is the (Points : 4) return on stockholders' equity. price earnings ratio. earnings per share. return on assets. Week 8 : Final Exam - Final Exam Time Remaining: Page: 1 2 3 4 Page 3 1. (TCO 1) Distinguish managerial accounting from financial accounting. Include a brief discussion of the differences in the types of information provided to users as well as the differences of the users of the accounting information. (Points : 20) 2. (TCO 6) Pacific Airlines has three service departments; ticketing, baggage handling, and aircraft maintenance. Costs of these departments are allocated to two revenue producing departments, domestic and international flights. Costs for the service departments are not separated into fixed and variable and the totals are as follows: Ticketing $4,000,000 Baggage handling $2,000,000 Aircraft maintenance $6,000,000 Air miles are as follows: Domestic 5,000,000 International 20,000,000 (a) Allocate the service department costs based on air miles. (b) Evaluate World Airlines use of air miles as a basis for allocation. Do you think the cause-and-effect relationship is strong? (c) Suggest alternative methods to allocate the service department costs. (Points : 25) 3. (TCO 10) Gina's Boutique makes custom jewelry. One item, the guru necklace, is a best seller and sales in units for the first quarter are as follows: January 100,000 units February 150,000 units March 180,000 units Desired ending inventory is budgeted at 20% of next month sales. Compute production for February. (Points : 25) 4. (TCO 2) Singleton Company is trying to determine a predetermined manufacturing overhead. Estimated overhead for the upcoming year is $600,000. Budgeted machine hours are 120,000 hours, and budgeted labor hours are 15,000 hours at a rate of $20.00 per hour. Compute the predetermined overhead rate based on: (a) Machine hours (b) Direct labor hours (c) Direct labor dollars (Points : 25) Week 8 : Final Exam - Final Exam Time Remaining: Page: 1 2 3 4 Page 4 1. (TCO 9) A project will require an initial investment of $600,000 and is expected to generate the following cash flows: Year 1 $100,000 Year 2 $250,000 Year 3 $250,000 Year 4 $200,000 Year 5 $100,000 (a) What is the project's payback period? (b) If the required rate of return is 20% and taxes are ignored, what is the project's net present value? (Points : 25) 2. (TCO 4) Legal Docs Inc is a legal services firm that files incorporation papers for small businesses. They charge $1,000 per application. This year's income statement shows the following: Sales $1,295,000 Variable Expenses $1,023,000 Contribution margin $272,000 Fixed costs $250,000 Profit $22,000 Required: (a) Compute the break-even point in units. (b) Compute the contribution margin ratio. (c) Compute the current margin of safety. (d) How many applications must the company sell to make a profit of $350,000? (Points : 25) 3. (TCO 5) The following data has been taken from Air-Tite company in its first year of business. Units produced 200,000 Units sold 180,000 Units in ending inventory 20,000 Fixed manufacturing overhead $600,000 (a) Compute the amount of fixed manufacturing overhead that would be expensed in the current year if full absorption costing is used. (b) Compute the amount of fixed manufacturing overhead that would be expensed in the current year if variable costing is used. (c) Compute the amount of fixed manufacturing overhead that would be included in ending inventory under full absorption costing. (Points : 25),I only have 2 hours from now to have it complete.
Question 4
Base Case In 2011, the Top Company, Inc. is considering the purchase of its first integrated computer system. The company manufactures corrugated paper, which is used for various purposes including making boxes. The company has been in business since 1990, incorporated in 1996, had achieved annual sales of $2,000,000 in 2010, and has the reputation of a very aggressive and competent competitor. Without the computer, Top Company?s sales are expected to stay constant in nominal terms at $2,000,000 in each of the next five years. The purchase price of the new computer system is $400,000. The system will provide all customer service representatives with on-line access to customer information, inventory and production files and will provide for electronic billing and bill payment. The cost of installation and freight-in is $50,000, paid for in time zero and capitalized with the cost of the computer. The computer has a depreciation life of four years and the company plans to depreciate the equipment and associated capitalized expenses to zero using the MACRS 4-year schedule. The expected life of the project is five years. The historical and current information that management has about the project and its expected and historical costs are as follows: The company has been working with the EDS Company for the last eight months to develop an assessment of its computer needs. EDS has already been paid $25,000 for its services. The Top Company has agreed to pay EDS a consulting fee of $10,000 at the end of each of the three years for their assistance in making the computerization process a successful and learning experience for the company if the company goes forward with the computer project. Necessary software development and training cost at the end of each of the first three years of operation will total $80,000 per year. These costs will be expensed when incurred. These costs will be included in the manufacturing overhead cost pool and allocated to various products on the basis of direct labor hours. The expected operating benefits of the computer system are numerous. First, management expects customer service to improve, a factor that is estimated to produce an expected increase in annual sales of $200,000. Furthermore, management expects cost of goods sold on all sales to decline from 45 percent of sales to 40 percent of sales as a direct result of operating efficiencies attributable to the computer system. (Assume that depreciation expense for the new computer system is not included in cost of goods sold.) Management believes that the current supervisor of administrative services, a person who is being paid $40,000 per year, has the capacity to supervise the computer system operation. The supervision of the computer system is expected to take 20 percent of the supervisor?s time. Management expects that normal salary increases for this person would average five percent per year over the life of the computer. One new employee will be hired (assume at the end of the first year) as a result of the computerization project. This person is responsible for performing all technical support operations and will be paid $45,000 per year. Management believes that both accounts receivable and accounts payable will decline, due to the electronic collection and bill payment aspects of the computer software. Accounts receivable are expected to decline from 30 percent of sales to 25 percent of sales while accounts payable are expected to decline from its current level of 9 percent of sales to 6 percent of sales. These changes will impact the net working capital investment for both existing and new sales. Management expected these changes in working capital as a percentage of sales to happen at the end of the first year of the computer operation. Management expects no other changes in current asset or current liability management that could be attributed to the computer system. An aspect of the project is the fact that the computer system vendor has offered to repurchase the system from The Top Company at the end of five years. The vendor has offered a price of $50,000 for the old system. As part of the offer of the certain price of the old equipment, management had to agree to use the vendor?s annual maintenance program, which cost $20,000 per year. The cost of the maintenance will be accounted for as period costs which will be expensed each year. Management hired a consultant last year that had, for $20,000, informed the company that the appropriate after-tax nominal opportunity cost of capital to use in the analysis of all cash flows associated with computerization projects is 12 percent. Management knew its current cost of borrowed funds was 9 percent and that 50 percent of the project would be financed with debt. The Top Company?s tax rate was expected to be 40 percent in each of the next five years. Answer the following questions, using the net present value model where appropriate: 1. Are there any sunk costs in this project description? Explain. 2. What are the incremental effects of the computer project on the company?s required working capital investment? 3. What are the expected incremental effects of the computer project on total operating cash flows of the firm? 4. Putting your answers to items 1-3 together with all other relevant facts, assess whether management should go forward with the computer project. 5. Explain to management why the interest cost of borrowed funds was/was not included in your cash flow estimates for the project.,Hi I extended the due time to tomorrow. Please attempt and see if you can manage to get some of the questions solved.,sorry I think i carelessly put the wrong date on it. How do I edit the date?,hi, Im not sure if there was an error in your savings on COGS. should it be "200,000* 5% = 10,000" instead of 2000000 x 5% = 100,000 shown on the spreadsheet?,i think i get it. sorry i was mistaken.,Hi for the vendor has offered a price of $50,000 for the old system. How did you consider it into the analysis? Regards, Albert
Question 5
? Decisions in Paradise Part I When most people imagine the South Pacific often warm weather, sunny beaches, and palm trees accompany the thought. Ideas of lounging in a hammock in the shade, watching loved one play in the surf while drinking an iced cold beverage, and escaping from the stress of working and city life soothe the mind. However, not all South Pacific islands share the vision of an island paradise and a ?vacation get-a-way.? Some islands are in desperate need of help in the form of protection of inclement weather, medical assistants, protection, and economic development. Kava Kava is one such island in the South Pacific that faces significant problems including floods, tornados, hurricanes, and tsunamis. The island is also subject to earthquakes, volcano eruptions, and fires as well as needing medical assistance to combat the avian flu, and outbreaks of AIDS. Kava is not without resources though; agriculture produces sugar, bananas, coffee, cocoa, and spices with island water providing fine fishing abilities and tourism. Kava is enriched with natural gas and petroleum and can provide inexpensive quality labor. Because of the petroleum, and resources Kava is subject to petroleum spills and terrorism from within and outside the country (University of Phoenix, n.d.). The people of Kava speak several languages including English, French, Spanish, and a number of indigenous languages practicing various religions mainly indigenous faiths with a small Islamic, Buddhist, and Christian presents. A sizeable number of Americans have made Kava their home blending in with the ethnic mix of indigenous tribes (Asian, African, Spanish, and French). Opportunities Kava has on its side, is community based organizations, faith-based groups, businesses, and government services (local, state, and national) including military help (University of Phoenix, n.d.). Global Gaming Hello, my name is Nik and I work for Chickasaw Nation Global Gaming Solutions, LLC (for short Global Gaming, GG), Chris, the founder of GG is sending me to Kava to meet with an associate Alex to establish a greater presence of our organization in Kava, taking on various forms based on what is mutually beneficial for GG and the people of Kava. GG is an organization with a mission to promote the general welfare of indigenous people all over the world by supporting educational, health, and housing programs while respecting historical and community activities while securing economic growth, and commerce (Chickasaw Nation, 2010). thank you for including your mission! This is the context for the case ? Once on the island, Alex explains why the government has invited companies such as GG to Kava. The government wishes to have an efficient organizational structure that includes all phases of an organization; leadership, strategic planning, marketing, purchasing, human and physical resources, technology, and finance to develop the country economically. Once trade has been established, goods from Kava can be exported around the world. Although developing Kava in an economically in the long-run benefits Kava and GG, Chris?s goal is to do what is right, and the people of Kava desperately need help turning this island from a place plagued with disasters into an island paradise (University of Phoenix, n.d.). Formulation Tools and Techniques To frame the problem GG must identify the problem, define criteria, goals, and objectives, and evaluate effects of the problem. The problem is Kava does not have enough people or money to safeguard themselves from natural disasters, terrorism, pollution, and medical concerns. The goal is to bring people, protection, and commerce to Kava to help develop Kava into an island paradise. For whom: the citizens of Kava or tourists? Next, the decision is made by identifying causes, framing alternatives, evaluate impacts of alternatives, and make the decision. The main priority is to provide sufficient housing (in secure locations), education, and medical attention to the people of Kava while maintaining the country?s historical culture; this can be funded by federal grants. Second, request government and military assistance to secure against terrorism and provide geological technologies to measure and predict natural disasters as well as help clean devastated areas. Last, create and develop commerce by inviting indigenous and other people of Kava to join the GG team of professionals; technology, marketing, purchasing, information technology, human resources, strategic planning, leadership, and finance to learn commerce and effectively sustain themselves. You are presenting solutions prematurely ? what are the issues (listed earlier) that present challenges (problems) to successfully achieving your mission on Kava? Evaluating the decision includes measuring impacts, and implementing the decision. The goal of GG is to send a full team of professionals to Kava to institute building safe schools, homes, and clinics on federal funding that will bring laborers to Kava. GG will also send a full team of professionals to train the indigenous and other people of Kava on how to create businesses and develop international trade. The request of military and government aid will protect against terrorism, and find geographically safe, clean areas in which to live and create commerce. Conclusion Kava is in desperate need of help in many areas; natural disasters, medical issues, pollution, and terrorism. GG proposes to bring in a fully staffed organization to help benefit the people of Kava by helping them build a solid foundation of health, education, and training in commerce while respecting cultures and traditions. References The Chickasaw Nation. (2010). The Official Site of the Chickasaw Nation. Retrieved from http://www.chickasaw.net/ University of Phoenix. (n.d.). Critical Thinking: Strategies in Decision Making. Retrieved from University of Phoenix, MGT350 website. University Of Phoenix. (n.d.). Decision Making Steps. Retrieved from https://ecampus.phoenix.edu/classroom/ic/classroom.aspx Review APA guide on reference formatting
