Question 1
Assume that the machine will produce 1,000 units of product per year that will sell at $30 each ($30,000). The revenue received for these units of product are cash inflows. At the same time the machine will create cash outflows or costs - the labor needed to operate it, electricity expenses, maintenance costs, etc. These are examples of cash outflows. Assume per year these outflows are $10,000. If so, your net inflow per year is $20,000 ($30,000 in cash inflows less $10,000 of outflows)! I hope this helps you better understand the concept of cash inflows and outflows for a project. As you approach the exercises you will note that at the beginning usually companies have a large outflow - the initial project investment. For instance, in the case of a new machine, this investment will be the initial cost of the machine. This initial investment and any net outflows subsequently are expressed as negative amounts, e.g. -$20,000. Class, it is important that you practice thse ideas on your own. Let's assume that the "Project" is a new manufacturing plant. Costs associated with the project are $4 million to build the plant and $1 of costs to run the plant every year. This would include the cost of electricity, water, labor, and other miscellaneous expenses. You expect to produce and sell 30 million parts every year for revenues of $5 million a year. The manufacturing and selling costs of your parts are $1 million per year. Assuming there are NO other costs or revenues and that this project is to run for 10 years: 1. What are the cash inflows and outflows for year 0 and years 1 to 10? 2. What is the net present value of the project if the required rate of return (also known as the discount rate or cost of capial) is 10%? 3. Should this project be accepted?
Question 2
Capital Projects Fund Homework Problem Accuracy matters. Tiger Township entered into the following transactions during 2005. 1. The township authorized a bond issue of $11 million for the construction of a pedestrian walkway as part of a downtown revitalization project. An additional $1 million of general revenues is to be used for the project. The authorization was recorded in the appropriate fund. 2. One million dollars of general revenues were paid to the construction fund from the General Fund. 3. The bonds were issued at 101. The premium was transferred to the fund from which the debt is to be serviced. 4. The township entered into a contract with Cooper Construction Company for construction of the walkway at an estimated cost of $10,350,000. 5. An engineering design firm was paid $174,000 for design work on the project. 6. A bill for $4,200,000 was received from Cooper Construction Company for work completed on the walkway to date. All but a 5% retainage was paid. 7. The accounts were closed at year end. 8. The walkway project was completed in 2006. Cooper Construction billed the township the remaining $6,150,000 due on the project. The township approved the project and paid Cooper in full. 9. The unused resources of the construction fund were set aside for debt service on the bonds. Accordingly, those resources were paid to the appropriate fund. Prepare the journal entries required in the Capital Projects Fund to account for the above transactions. Prepare closing entries.
Question 3
1. (TCO 1) Which financial statement is prepared first? (Points : 4) Balance sheet Income statement Retained earnings statement Statement of cash flows 2. (TCO 1) Management?s views on the company?s short-term debt paying ability, expansion financing, and results of operations are found in which of the following? (Points : 4) auditor?s report management discussion and analysis section notes to the financial statements president?s state of the company report 3. (TCO 4) Using the following balance sheet and income statement data, what is the earnings per share? Current assets $ 7,000 Net income $ 12,000 Current liabilities 4,000 Stockholders? equity 27,000 Average assets 40,000 Total liabilities 9,000 Total assets 30,000 Average common shares outstanding was 10,000 (Points : 4) $3.60 $4.00 $1.20 $0.83 4. (TCO 4) Which of the following is not considered a measure of liquidity? (Points : 4) Current ratio Working capital Debt to total assets ratio Each of the above are liquidity measures 5. (TCO 2) Which pair of accounts follows the rules of debit and credit, in relation to increases and decreases, in the same manner? (Points : 4) Accounts Payable and Rent Expense Repair Expense and Notes Payable Prepaid Insurance and Advertising Expense Service Revenues and Equipment 6. (TCO 2) Which of the following is not part of the recording process? (Points : 4) Analyzing transactions Preparing a trial balance Entering transactions in a journal Posting journal entries 7. (TCO 3) An accounts payable clerk also has access to the approved supplier master file for purchases. The control principle of _______________________ . (Points : 4) establishment of responsibility is violated independent internal verification is violated documentation procedures is violated segregation of duties is violated 8. (TCO 3) The following information was taken from Mitchell Company cash budget for the month of July: Beginning cash balance $50,000 Cash receipts 48,000 Cash disbursements 68,000 If the company has a policy of maintaining end of the month cash balance of $50,000, the amount the company would have to borrow is which of the following? (Points : 4) $20,000 $10,000 $30,000 $12,000 9. (TCO 11) The major reporting standard for presenting managerial accounting information is which of the following? (Points : 4) relevance generally accepted accounting principles the cost principle the current tax law 10. (TCO 11) A manufacturing process requires small amounts of glue. The glue used in the production process is classified as which of the following? (Points : 4) period cost indirect material direct material miscellaneous expense 11. (TCO 11) Sales commissions are classified as which of the following? (Points : 4) overhead costs period costs product costs indirect labor 12. (TCO 11) Manufacturing costs include which of the following? (Points : 4) direct materials and direct labor only direct materials and manufacturing overhead only direct labor and manufacturing overhead only direct materials, direct labor, and manufacturing overhead 13. (TCO 11) Hardigan Manufacturing Company reported the following year-end information: beginning work in process inventory, $80,000 cost of goods manufactured, $980,000 beginning finished goods inventory, $50,000 ending work in process inventory, $70,000 and ending finished goods inventory, $40,000 How much is Hardigan?s cost of goods sold for the year? (Points : 4) $980,000 $990,000 $970,000 $1,000,000 14. (TCO 5) Which statement below describes a variable cost? (Points : 4) It varies in total with changes in the level of activity. It remains constant in total over different levels of activity. It varies inversely in total with changes in the level of activity. It varies proportionately per unit with changes in the level of activity. 15. (TCO 5) Which of the following is an underlying assumption of CVP analysis? (Points : 4) Factors other than changes in activity may affect costs. Cost classifications are reasonably accurate. Increases in inventories cause increase in total fixed costs. Unit costs remain the same over the relevant range. 1. (TCO 5) A company has total fixed costs of $210,000 and a contribution margin ratio of 30%. How much sales are necessary to break even? (Points : 4) $125,000 $630,000 $700,000 $54,000 2. (TCO 5) How much sales are required to earn a target income of $80,000, if total fixed costs are $100,000 and the contribution margin ratio is 40%? (Points : 4) $300,000 $200,000 $450,000 $330,000 3. (TCO 6) Which one of the following is correct concerning a budget? (Points : 4) It can act as a substitute for management. It is a written statement of management?s plans for a specified future time period. It is required for all business operations. It is used only by manufacturing companies. 4. (TCO 6) Which one of the following is one of the factors that must be present, if budgets are to be effective? (Points : 4) All upper level managers should verify the validity of the amounts in the budget. Research and analysis should occur in order to set realistic goals. The company must have the stockholders? approval of the budget. The budget committee must prepare the budget. 5. (TCO 6) Long-range planning does which of the following? (Points : 4) generally presents more detailed information than an annual budget generally encompasses a longer period of time than an annual budget is usually more accurate than an annual budget is prepared on a quarterly basis if the budget is prepared on a quarterly basis 6. (TCO 6) Which one of the following is a source of information used to prepare the budgeted income statement? (Points : 4) Cash budget Budgeted balance sheet Selling and administrative expense budget Capital expenditure budget 7. (TCO 7) Which statement is true concerning a static budget report? (Points : 4) It considers performance at numerous activity levels. It is appropriate in evaluating a manager?s effectiveness in controlling fixed costs. It should be used when the actual level of activity is materially different from the master budget activity level. It is most effective when evaluating a manager?s effectiveness in controlling variable costs. 8. (TCO 7) Which type of center is the housekeeping department of a manufacturing company? (Points : 4) A segment A profit center A cost center An investment center 9. (TCO 7) The best measure of the performance of the manager of a profit center is which of the following? (Points : 4) rate of return on investment success in meeting budgeted goals for controllable costs amount of controllable margin generated by the profit center amount of contribution margin generated by the profit center 10. (TCO 7) Merck Pharmaceuticals is evaluating its Vioxx division, an investment center. The division has a $45,000 controllable margin and $300,000 of sales. How much will Merck?s average operating assets be when its return on investment is 10%? (Points : 4) $450,000 $495,000 $300,000 $255,000 11. (TCO 11) Financial and managerial accounting are both concerned with the economic events of an enterprise. Similarities between financial and managerial accounting do exist, but they have a different focus. Briefly distinguish between financial and managerial accounting as they relate to (1) the primary users, (2) the type and frequency of reports, (3) the purpose of reports, and (4) the content of reports.,Please i need some help now......i have last than a hour,Please answer,Ok,whats going on?
Question 4
1) Frank's Sporting Goods projects sales for the second quarter of 20XX to be as follows: April $100,000 May $120,000 June $110,000 20% of Frank's sales are for cash, 70% of accounts receivable are collected one month following the sale, and the rest are collected two months following the sale. January sales were $40,000, February sales were $60,000, and March sales were $80,000. a) Prepare a monthly schedule of cash receipts for the second quarter of 20XX. b) What is the balance in accounts receivable at the end of June? COLLECTIONS: 2)3. A new restaurant is ready to open for business. It is estimated that the food cost (variable cost) will be 30% of sales, while fixed cost will be $540,000. The first year's sales estimates are $1,500,000. The cost to start up this restaurant will be $2,000,000. Two financing alternatives are being considered: a) 50% equity financing and 50% debt at 9%, or b) all equity financing. Common stock can be sold at $5 per share. FINANCING PLAN A IS REQUIRED. FINANCING PLAN B IS EXTRA CREDIT ONLY!! a) Compute the Operating Break?even point in dollars. b) Compute DOL. c) Compute DFL and DCL. 3)Mountain Home Systems, Inc. is a well?known and reputable supplier of integrated circuits to manufacturers of telecommunications devices. The firm is currently debating whether to expand its sales to car?telephone manufacturers. While the firm expects an extra $3 million in sales if it enters this market, it also knows that 15% of its sales will ultimately be uncollectible. In addition, collection costs will be 3% on all new sales and the firm's production and selling costs are 80% of sales. Mountain Home's tax rate is 30%. a) Calculate Mountain Home's additional net income from the new sales. b) If Mountain Home can turn its receivables over 4 times per year, what will its additional investment in accounts receivable be and what will the firm earn as an after?tax return on that investment? : c) Mountain Home management requires that any new project earn a minimum of 10% return on investment. Should the firm enter the car?telephone manufacturer market?,Hi, I have already sent question #1 to one of your tutors and was given a price of $7.50. The question I sent earlier had different numbers but was the same question. I was wondering if I can get a better price if I get all 3 questions done from you guys?
Question 5
Question 1 On January 1, 2011, john doe enterprises (JDE) acquired a 55% interest in bubba manufacturing inc.(BMI). JDE paid for the transaction with $7 million cash and 500,000 shares of JDE common stock (no par value, market value : $14.90 per share). At the time of the acquisition, BMI?s book value (stockholder?s equity) was $16970,000. Differences between book value and fair value for BMI on January 1, 2011 are indicated below: Book Value Fair Value Land 1700,000 2550,000 Buildings (7 year remaining life) 2700,000 3400,000 Equipment (5 year remaining life) 3700,000 3300,000 JDE employs the equity method to account for this investment Record the journal entry for the combination on January 1, 2011. Show your calculations for goodwill and minority interest at acquisition and the amortization and allocation amounts of book value ? fair value differences that will be included at year end. Question 2 Assume that JDE sold inventory to BMI at a markup equal to 25% of cost. Transfers were $165,000. Of this inventory, $55,000 was on hand at the end of 2011. Required: for the consolidated financial statements, determine the balances that would appear for the following accounts: 1) sales, 2) cost of goods sold, 3) minority interest expense and 4) inventory JDI BMI elimination consolidation Sales 297,958,000 108,937,500 Less: cost of goods sold (81,300,000) (30,177,000) -minority interest Expense Inventory 15,250,000 10,400,000
