Question 1
Jan 21, 2013 at 2:46pm Q Week Three Exercise Assignment Inventory 1. Specific identification method. Boston Galleries uses the specific identification method for inventory valuation. Inventory information for several oil paintings follows. Painting Cost 1/2 Beginning inventory Woods $11,000 4/19 Purchase Sunset 21,800 6/7 Purchase Earth 31,200 12/16 Purchase Moon 4,000 Woods and Moon were sold during the year for a total of $35,000. Determine the firm?s a. cost of goods sold. b. gross profit. c. ending inventory. 2. Inventory valuation methods: basic computations. The January beginning inven?tory of the White Company consisted of 300 units costing $40 each. During the first quarter, purchases were: Date Quantity Cost 1/15 700 $45 1/31 1200 $48 2/12 800 $46 2/27 650 $51 Sales during the first quarter were. Date Sold 1/19 500 2/2 600 2/13 500 2/28 100 The White Company uses a perpetual inventory system. Using the White Company data, fill in the following chart to compare the results obtained under the FIFO, LIFO, and weighted-average inventory methods. FIFO LIFO Weighted Average Goods available for sale $ $ $ Ending inventory, March 31 Cost of goods sold 3. Perpetual inventory system: journal entries. At the beginning of 20X3, Beehler Company implemented a computerized perpetual inventory system. The following transactions occurred: ? Purchases on account: 500 units @ $4 = $2,000 ? Sales on account: 300 units @ $5 = $1,500 ? Purchases on account: 600 units @ $5 = $3,000 ? Sales on account: 300 units @ $5 = $1,500 a. Prepare journal entries for the above purchases and sales. b. Calculate the balance in the firm?s Inventory account. 4. Inventory valuation methods: computations and concepts. Wave Riders Surfboard Company began business on January 1 of the current year. Below are the transactions for the year : 1/3: Purchase 100 boards @ $125 3/17: Sold 50 boards @ $250 4/3: Purchase 200 boards @ $135 5/17: Sold 75 boards @ $250 6/3: Purchase 100 boards @ $145 1/3: Purchase 100 boards @ $155 3/17: Sold 300 boards @ $250 1/3: Purchase 100 boards @ $140 Wave Riders uses a perpetual inventory system. Instructions a. Calculate cost of goods sold, ending inventory, and gross profit under each of the following inventory valuation methods: ? First-in, first-out ? Last-in, first-out ? Weighted average b. Which of the three methods would be chosen if management?s goal is to (1) produce an up-to-date inventory valuation on the balance sheet? (2) approximate the physical flow of a sand and gravel dealer? 5. Depreciation methods. Betsy Ross Enterprises purchased a delivery van for $30,000 in January 20X7. The van was estimated to have a service life of 5 years and a resid?ual value of $6,000. The company is planning to drive the van 20,000 miles annually. Compute depreciation expense for 20X8 by using each of the following methods: a. Units-of-output, assuming 17,000 miles were driven during 20X8 b. Straight-line c. Double-declining-balance 6. Depreciation computations. Alpha Alpha Alpha, a college fraternity, purchased a new heavy-duty washing machine on January 1, 20X3. The machine, which cost $1,000, had an estimated residual value of $100 and an estimated service life of 4 years (1,800 washing cycles). Calculate the following: a. The machine?s book value on December 31, 20X5, assuming use of the straight-line depreciation method b. Depreciation expense for 20X4, assuming use of the units-of-output depreciation method. Actual washing cycles in 20X4 totaled 500. c. Accumulated depreciation on December 31, 20X5, assuming use of the double-declining-balance depreciation method. 7. Depreciation computations: change in estimate. Aussie Imports purchased a specialized piece of machinery for $50,000 on January 1, 20X3. At the time of acquisition, the machine was estimated to have a service life of 5 years (25,000 operating hours) and a residual value of $5,000. During the 5 years of operations (20X3 - 20X7), the machine was used for 5,100, 4,800, 3,200, 6,000, and 5,900 hours, respectively. Instructions a. Compute depreciation for 20X3 - 20X7 by using the following methods: straight line, units of output, and double-declining-balance. b. On January 1, 20X5, management shortened the remaining service life of the machine to 20 months. Assuming use of the straight-line method, compute the company?s depreciation expense for 20X5. c. Briefly describe what you would have done differently in part (a) if Aussie Imports had paid $47,800 for the machinery rather than $50,000 In addition, assume that the company incurred $800 of freight charges $1,400 for machine setup and testing, and $300 for insurance during the first year of use
Question 2
CASE #1 Finland, like the United States, is a wealthy country. Its economy is open?providing consumers a wide variety of choices when it comes to consumer products. What sets Finland apart, though, is that the country keeps very detailed records about its citizens?including everything from the ages, sex, and incomes of people living in the same household, the amount they spend annually on commuting, and vehicle purchases. Consider this: Researchers have determined that when a Finnish household buys a new car, the odds that one of that household?s nearest 10 neighbors will purchase the same brand of vehicle during the next week and a half increases by 86 percent! Costco Wholesale, the warehouse membership outlet, is the fifth largest retailer in the United States. Founded in Seattle in 1983, and merged with Price Club in 1993, the company now runs 457 stores. While most of its locations are in the United States, the company operates outlets in Canada, the United Kingdom, Taiwan, South Korea, and Japan. Its two largest competitors are Sam?s Club (owned by Wal-Mart) and BJ?s Wholesale Club (started by Zayre?s). Case #2Because it is a membership club, the 44.6 million Costco consumers each pay $45 a year, and small businesses pay $100 annually. Each location stocks approximately 4,000 types of items, but only a few brands or versions of each. For example, Costco may stock only four brands of toothpaste, while a typical Wal-Mart may carry 60 brands and sizes of toothpaste, and over 100,000 different types of items. Costco attempts to keep prices low, to make it impossible for another retailer to offer the same merchandise for less. Their cardinal rule is that no branded item can be marked up more than 14 percent, and no private-label item by more than 15 percent. As a comparison, supermarkets often use a 25 percent markup, and department stores typically mark up merchandise by 50 percent or more. answer the following questions in an one page paper for both case. 1. Evaluate possible methods of measuring cultural impact on consumer behavior 2. Determine the impact of culture on market strategy and segmentation 3. Assess the impact of religion on consumer behavior in today?s market
Question 3
Pettit printing Company has a total market value of $100 million, consisting of 1 million shares selling for $50 per share and $50 million of 10% perpetual bonds now selling at par value. The firm's EBIT is $13.24 million, and its tax rate is 15%. Pettit can change its capital structure by either increasing its debt to 70% (based on market values) or decreasing it to 30%. If it decides to increase its use of financial leverage, it must call its old bonds and issue new ones with a 12% coupon. If it decides to decrease its financial leverage, it will call in its old bonds and replace them with new 8% coupon bonds. The firm will sell or repurchase stock at its new equilibrium price to complete the capital structure change. The firm pays out all earnings as dividends; hence, its stock is zero growth stock. Its current cost of equity, rs, is 14%. If it increases financial leverage, rs will be 16%. If it decreases financial leverage, rs will be 13%. Calculate the firm's WACC and total corporate value under each capital structure. Please show all work and explain fully.,Okay, thanks. If you have any questions please don't hesitate to ask.
Question 4
Lockard Company purchased machinery on January 1, 2012, for $142,080. The machinery is estimated to have a salvage value of $14,208 after a useful life of 8 years. (a) Compute 2012 depreciation expense using the straight-line method. (b) Compute 2012 depreciation expense using the straight-line method assuming the machinery was purchased on September 1, 2012. (a) Depreciation expense $ (b) Depreciation expense $ Lockard Company purchased machinery on January 1, 2012, for $90,160. The machinery is estimated to have a salvage value of $9,016 after a useful life of 8 years. (a) Compute 2012 depreciation expense using the double-declining-balance method. (b) Compute 2012 depreciation expense using the double-declining-balance method assuming the machinery was purchased on October 1, 2012. (Do not round intermediate calculations. Round final answers to 0 decimal places, e.g. 2,520.) (a) Depreciation expense $ (b) Depreciation expense $ Agazzi Company purchased equipment for $332,740 on October 1, 2012. It is estimated that the equipment will have a useful life of 8 years and a salvage value of $23,200. Estimated production is 40,200 units and estimated working hours are 20,900. During 2012, Agazzi uses the equipment for 580 hours and the equipment produces 1,000 units. Compute depreciation expense under each of the following methods. Agazzi is on a calendar-year basis ending December 31. (a) Straight-line method for 2012 (Round answer to 0 decimal places, e.g. $45,892.) $ (b) Activity method (units of output) for 2012 (Round rate per unit to 2 decimal places, e.g. $5.35 and final answer to 0 decimal places, e.g. $45,892.) $ (c) Activity method (working hours) for 2012 (Round rate per hour to 2 decimal places, e.g. $5.35 and final answer to 0 decimal places, e.g. $45,892.) $ (d) Sum-of-the-years?-digits method for 2014 (Round answer to 0 decimal places, e.g. $45,892.) $ (e) Double-declining-balance method for 2013 (Round answer to 0 decimal places, e.g. $45,892.) $ Machinery purchased for $125,840 by Carver Co. in 2008 was originally estimated to have a life of 8 years with a salvage value of $9,680 at the end of that time. Depreciation has been entered for 5 years on this basis. In 2013, it is determined that the total estimated life should be 10 years with a salvage value of $10,890 at the end of that time. Assume straight-line depreciation. (a) Prepare the entry to correct the prior years? depreciation, if necessary. (b) Prepare the entry to record depreciation for 2013. (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Use Machinery related account.) No. Account Titles and Explanation Debit Credit (a) (b)
Question 5
Please help. 1. Can you determine the price of an airline ticket based upon the distance flown? The following data represents the miles flown and the dollars spent for the ticket. Test this hypothesis using simple regression. Include the output and your analysis. Data Display Row Miles x Dollars y 1 1211 1802 2 1345 2405 3 1422 2005 4 1687 2511 5 1849 2332 6 2026 2305 7 2133 3016 8 2253 3385 9 2400 3090 10 2468 3694 11 2699 3371 12 2806 3998 13 3082 3555 14 3209 4692 15 3466 4244 16 3643 5298 17 3852 4801 18 4033 5147 19 4267 5738 20 4498 6420 21 4533 6059 22 4804 6426 23 5090 6321 24 5233 7026 25 5439 6964 2. Using the above model, if you were going to buy a ticket from Chicago to New York, how much would you expect to pay? 3. This is obviously concocted data. Use any site you wish to gather actual data to test this model. Run the regression and analyze your results. Be prepared to share your analysis with the class. 4. The following data are the average wine consumption rates (in liters per person) and the number of ischemic heart disease deaths (per 1000 men aged 55 to 64 years old) for 18 industrial countries. (Lancet, June 16, 1979) Does this data suggest that heart disease mortality is associated with average wine consumption? Data Display Heart Disease Row Wine Consumption Mortality 1 2.8 6.2 2 3.2 9.0 3 3.2 7.1 4 3.4 6.8 5 4.3 10.2 6 4.9 7.8 7 5.1 9.3 8 5.2 5.9 9 5.9 8.9 10 5.9 5.5 11 6.6 7.1 12 8.3 9.1 13 12.6 5.1 14 15.1 4.7 15 25.1 4.7 16 33.1 3.1 17 75.9 3.2 18 75.9 2.1
