Question 1
Consider the production, sales inventory, and capacity limits stated below for the manufacture of small turbine engines used in auxiliary power units, ground support equipment and various other uses. The company expects to market the unit for $50,000 each in quarters one and two and to raise the price to $55,000 for the third quarter. At that price it is expected that demand for the three periods will be 250, 300, and 300 respectively. Cost of production is expected to increase by $1000 each quarter, with period one cost at $28,000. If overtime production must be used, cost of production during overtime will be 20% higher than normal production costs, due to higher wage rates. Production capacity for the three periods is 250, 300, 300, respectively, and overtime capacity is 100, 100, and 125 for each period, respectively. Inventory costs, including an estimate of opportunity costs of the money and labor invested is $5,000 for periods one and two, and $5,500 for period three. The costs of lost sales, an amount to indicate loss of customer goodwill and loyalty is estimated to be very high, since there are several new, aggressive competitors entering the market. It is estimated at $40,000 per lost sale. At commencement of period 1 there are 100 units in inventory. Due to expected high demand in period four it is desired to have not less than 50 units in inventory. a. Develop a table containing sales, lost sales, product, overtime production, and inventory at period completion for each period. b. What is the total profit for the three periods combined? c. If inventory costs were reduced by 50% would the production schedule change? d. If demand in period one were to be higher than expected, what would happen to the solution? e. If demand in period two were 400 vice 300, what would be the effect on schedule and profitability? f. If demand in period two were 500 vice 300, what would be the effect on schedule and profitability? Compare this result with that found in (e). g. If overtime capacity could be increased by 20% by changing the overtime differential to 40% vice 20%, how would that effect profitability given the conditions of (b), (e), and (f) respectively? h. What appears to be the overriding factor in the above example and what steps would you recommend to the company?
Question 2
5.DATA: Carewood makes an environmentally friendly artificial fireplace log. You have been asked to prepare the company?s master budget for the first quarter of the year 2013 and have been provided with the following: a. The 12/31/2012 balance sheet data follows: ASSETS Cash $ 4,330 Accounts Receivable 8,450 Direct Materials Inventory (2,178 pounds) 436 Finished Goods Inventory (1,200 logs) 2,808 Plant and Equipment $220,000 Less Accumulated Depreciation (56,000) 164,000 Total Assets $180,024 LIABILITIES AND STOCKHOLDER?S EQUITY Accounts Payable $ 1,109 Note Payable 20,000 Total Liabilities $ 21,109 Common Stock $100,000 Retained Earnings 58,915 158,915 Total Liabilities and Stockholder?s Equity $180,024 b. Each log requires the following standards for direct material and labor: ? 3.3 pounds of material mix at $.20 per lb ? 10 minutes of labor time per unit; direct labor averages $14.40 per hour Each finished log requires three minutes of machine time. Variable overhead is applied at the rate of $12.00 per hour of machine time. Annual fixed production overhead is budgeted at $46,800 (see breakdown below). Salaries $30,000 Insurance 1,800 Fixed portion of utilities 6,000 Depreciation 9,000 Total $46,800 Fixed overhead is incurred evenly throughout the year c. Expected sales in units for the first five months of 2013 are: January 6,000 February 9,000 March 6,500 April 5,900 May 5,100 Carewood grants no discounts, and all sales are on credit at $6.00 per log. The company?s collection pattern is 80 percent in the month of sale, 15 percent in the month following sale, and 5 percent in the second month following the sale. The Accounts Receivable balance in the balance sheet data represents amounts remaining due from November sales of $33,000 and December sales of $34,000. d. Carewood completes all production each day. The desired ending balance of Direct Materials Inventory is 10 percent of the amount needed to satisfy the next month?s production for finished goods. The desired ending balance in Finished Goods Inventory is 20 percent of the next month?s sales. e. Purchases of direct materials are paid 70 percent in the month of purchase and 30 percent in the month following the purchase. No discounts are taken. The note payable has a 12 percent interest rate, and the interest is paid at the end of each month. The $20,000 balance of the principal on the note is due on March 31, 2013. f. CareWood?s minimum cash balance desired is $4,000. The firm may only borrow at the beginning of a month and repay at the end of a month in $500 increments ($500, $1,000, $1,500 etc.). Principal should only be repaid in a month when excess cash exists. Interest on these short-term loans, if any, is payable monthly at a 14% rate. You may have to borrow money to meet your monthly interest obligations on any loans outstanding. g. Selling and Administrative expenses, paid as incurred, run $9,000 per month plus 1 percent of sales. Direct labor and overhead are paid as incurred. h. The company accrues income taxes at a 40 percent rate. A quarterly tax installment will be paid on April 15, 2013. Required:5. Prepare a schedule of cash payments for direct materials for the first quarter of 2013. (5 pts.) Thank you, use the attach Document to answer my quesions. I will upload it.
Question 3
P 18-5 Shareholders' equity transactions; statement of shareholders' equity LO6 through LO8 Listed below are the transactions that affected the shareholders' equity of Branch-Rickie Corporation during the period 2011?2013. At December 31, 2010, the corporation's accounts included: a. November 1, 2011, the board of directors declared a cash dividend of $.80 per share on its common shares, payable to shareholders of record November 15, to be paid December 1. b. On March 1, 2012, the board of directors declared a property dividend consisting of corporate bonds of Warner Corporation that Branch-Rickie was holding as an investment. The bonds had a fair value of $1.6 million, but were purchased two years previously for $1.3 million. Because they were intended to be held to maturity, the bonds had not been previously written up. The property dividend was payable to shareholders of record March 13, to be distributed April 5. c. On July 12, 2012, the corporation declared and distributed a 5% common stock dividend (when the market value of the common stock was $21 per share). Cash was paid in lieu of fractional shares representing 250,000 equivalent whole shares. d. On November 1, 2012, the board of directors declared a cash dividend of $.80 per share on its common shares, payable to shareholders of record November 15, to be paid December 1. e. On January 15, 2013, the board of directors declared and distributed a 3-for-2 stock split effected in the form of a 50% stock dividend when the market value of the common stock was $22 per share. f. On November 1, 2013, the board of directors declared a cash dividend of $.65 per share on its common shares, payable to shareholders of record November 15, to be paid December 1. Required: 1. Prepare the journal entries that Branch-Rickie recorded during the three-year period for these transactions. 2. Prepare comparative statements of shareholders' equity for Branch-Rickie for the three-year period ($ in 000s). Net income was $330 million, $395 million, and $455 million for 2011, 2012, and 2013, respectively. P 18-12 Various shareholders' equity topics; comprehensive LO1 LO4 through LO8 Part A In late 2010, the Nicklaus Corporation was formed. The corporate charter authorizes the issuance of 5,000,000 shares of common stock carrying a $1 par value, and 1,000,000 shares of $5 par value, noncumulative, nonparticipating preferred stock. On January 2, 2011, 3,000,000 shares of the common stock are issued in exchange for cash at an average price of $10 per share. Also on January 2, all 1,000,000 shares of preferred stock are issued at $20 per share. Required: 1. Prepare journal entries to record these transactions. 2. Prepare the shareholders' equity section of the Nicklaus balance sheet as of March 31, 2011. (Assume net income for the first quarter 2011 was $1,000,000.) Part B During 2011, the Nicklaus Corporation participated in three treasury stock transactions: a. On June 30, 2011, the corporation reacquires 200,000 shares for the treasury at a price of $12 per share. b. On July 31, 2011, 50,000 treasury shares are reissued at $15 per share. c. On September 30, 2011, 50,000 treasury shares are reissued at $10 per share. Required: 1. Prepare journal entries to record these transactions. 2. Prepare the Nicklaus Corporation shareholders' equity section as it would appear in a balance sheet prepared at September 30, 2011. (Assume net income for the second and third quarter was $3,000,000.) Part C On October 1, 2011, Nicklaus Corporation receives permission to replace its $1 par value common stock (5,000,000 shares authorized, 3,000,000 shares issued, and 2,900,000 shares outstanding) with a new common stock issue having a $.50 par value. Since the new par value is one-half the amount of the old, this represents a 2-for-1 stock split. That is, the shareholders will receive two shares of the $.50 par stock in exchange for each share of the $1 par stock they own. The $1 par stock will be collected and destroyed by the issuing corporation. On November 1, 2011, the Nicklaus Corporation declares a $.05 per share cash dividend on common stock and a $.25 per share cash dividend on preferred stock. Payment is scheduled for December 1, 2011, to shareholders of record on November 15, 2011. On December 2, 2011, the Nicklaus Corporation declares a 1% stock dividend payable on December 28, 2011, to shareholders of record on December 14. At the date of declaration, the common stock was selling in the open market at $10 per share. The dividend will result in 58,000 (.01 ? 5,800,000) additional shares being issued to shareholders. Required: 1. Prepare journal entries to record the declaration and payment of these stock and cash dividends. 2. Prepare the December 31, 2011, shareholders' equity section of the balance sheet for the Nicklaus Corporation. (Assume net income for the fourth quarter was $2,500,000.) 3. Prepare a statement of shareholders' equity for Nicklaus Corporation for 2011.
Question 4
1. The reliability of a short-term cash forecast depends most heavily on the quality of: a. Cost of goods sold forecast b. Current ratio forecast c. Sales forecast d. Shares outstanding forecast 2. What is the correct order of the following steps in preparing a projected income statement (not all steps may be show)? i. Project future net sales ii. Project future net income iii. Project future cost of goods sold iv. Project future interest expense Choose one answer. a. i, ii, iii, iv b. ii, iv, iii, i c. i, iii, ii, iv d. I, iii, iv, ii 3. What is the correct order of the following steps in preparing a projected balance sheet (not all steps may be shown)? i. Project future cash ii. Project future accounts receivable iii. Project future accounts payable iv. Project future property plant and equipment Choose one answer. a. i, ii, iv, iii b. ii, iv, iii, i c. I, iii, ii, iv d. I, iii, iv, ii 4. Which of the following is the most useful in assessing short-term liquidity of a company? Choose one answer. a. Taxes payable b. Working Capital c. Next period?s sales d. Prospective cash flows 5. The residual income model defines stock price as book value plus the present value of residual income. What is the effect on stock price in a given period if the firm?s cost of capital is greater than its return on equity? a. Cannot be determined b. No effect c. Stock price increases d. Stock price decreases 6. Over time, what observation(s) best characterizes how ROE for a given firm should behave? i. ROE will increase, because the firm becomes more efficient ii. ROE will decrease, because competition will erode profitability iii. The answer depends on how conservative the firm?s accounting policies are, which affects its reported earnings. a. i and ii b. ii and iii c. i, ii, and iii are all possibilities d. None of the above 7. The reasonableness and feasibility of short-term cash forecasts can be evaluated by preparing a. A bank reconciliation b. Pro forma financial statements c. A statement of Cash Flows d. Interest coverage computations 8. If a company is to successfully remain in business over the long haul, which of the following statements is most correct? a. Total cash flow from operations, measured over an extended period, must be greater than zero b. Total cash flow from investing, measured over an extended period, must be positive c. Total cash flow from financing, measured over an extended period, should be negative d. Total cash flow from financing plus total cash flow from investing, measured over an extended period, must be positive 9. Which of the following statement is incorrect? a. The quicker a company collects money from its customers the greater its liquidity, all else equal b. The more quickly a company turns over its inventory, the greater its liquidity, all else equal c. The lower a company?s depreciation the greater its liquidity, all else equal d. The greater a company?s profit margin the greater its liquidity, all else equal 10. Which of the following statement is incorrect? a. It is possible for a profitable company to go out of business because of short-term liquidity problems b. If a company has a current ratio greater than 2, it will never go out of business because of liquidity problems c. The current ratio is always greater than or equal to the quick ratio d. The accuracy of a cash flow forecast is inversely related to the forecast horizon. 11. Which of the following best describes the current ratio? a. debt ratio b. operating performance ratio c. liquidity ratio d. efficiency ratio 12. Which of the following is NOT likely to be used to measure a company?s liquidity? a. working capital b. financial leverage c. current ratio d. acid-test (quick) ratio 13. Which of the following will NOT affect the calculation of leverage ratios? a. existence of non-capitalized operating leases b. existence of assets where market value is much higher than book value c. existence of significant debt covenants d. existence of pension liabilities where projected benefit liability is much greater than plan assets and accumulated benefit obligation 14. An analyst should treat preferred stock on a firm?s balance sheet as debt when calculating leverage ratios if the preferred stock is: a. redeemable by shareholders b. convertible into common stock c. issued at a variable dividend rate d. callable by the issuer 15. The short-term liquidity of a company a. is only of concern to creditors of a company b. is determinable by looking at current ratio c. depends largely upon prospective cash flows d. is determinable by calculating cash to current liabilities ratio 16. A company wishes to increase its financial leverage. Which of the following actions, all other things being equal, will achieve this? i. repurchase stock ii. issue more dividends iii. sell accounts receivable at face value iv. split stock 2 for 1 a. i, ii and iii b. i and ii c. I and iv d. I, ii and iv 17. Which of the following statements are correct with respect to the times interest earned ratio? i. it is independent of operating income ii. it is independent of the interest rate paid on debt iii. it is independent of the tax rate iv. it is independent of the amount of dividends paid a. i, ii and iii b. i and iii c. i and iv d. iii and iv 18. The earnings to fixed charges ratio: a. indicates how efficiently assets are used b. typically includes depreciation in the denominator c. typically excludes extraordinary gains and losses from the numberator d. indicates the proportion of debt used to finance the company 19. Reported operating income for Horace Corporation was $145,000 and reported interest expense was $45,000. Times interest earned for Horace Corporation, after necessary adjustments, was: a. 2.22 b. 3.22 c. 4.22 d. 4.48 20. Typical debt covenants would i. limit the issuance of additional debt senior to the obligation ii. specify minimum levels of selected financial ratios iii. specify minimum levels of earnings coverage iv. prohibit excessive dividends or stock repurchases a. ii and iii b. ii and iv c. i, iii and iv d. I, ii, iii and iv 21. Pitfalls when forecasting earnings include failure to consider i. capital adequacy ii. capacity constraints iii. anticipated return on equity iv. new management a. i and iii b. ii and iv c. I, iii and iv d. I, ii and iii 22. Which of the following can affect earnings quality? i. management?s choice of accounting principle ii. management?s choice of dividend policy iii. management?s estimates iv. management?s discretionary expenditures a. i, ii, iii and iv b. i, ii and iii c. i, iii and iv d. i and iii 23. Which of the following is NOT a typical form of earnings management? a. Changing accounting estimates b. Offsetting one-time gains and losses c. Changing accounting principles d. Changing auditors 24. Which of the following would NOT be considered a component of business risk? a. financial leverage b. variability of demand c. variability of price of inputs to production d. changing regulatory requirements 25. business risk: a. is independent of actions by management b. does not affect the systematic risk of a company c. refers to financial leverage d. is a component of the overall risk of a company 26. Interim financial reports a. are not required by SEC b. are as reliable as annual reports c. require allocation of certain discretionary costs across interim periods d. normally use FIFO inventory reporting, regardless of method used for annual reports. 27. Which of the following will affect observed price earnings ratio (lagged ratio): i. quality of earnings ii. business risk iii. risk free rate of interest iv. expected growth a. all of the above b. ii, iii and iv c. ii and iv d. i, ii and iv 28. Which of the following will affect observed price to book ratio i. expected ROCE ii. business risk iii. risk free rate of interest iv. expected growth a. all of the above b. ii, iii and iv c. ii and iv d. i, ii and iv 29. Which of the following statement is most correct? a. if two companies have the same ROE and the same risk they must have the same residual income (abnormal earnings) for the year b. If two companies have the same net book value and the same residual income this year, then their stock prices must be the same c. If two companies have the same ROE and the same stock price their earnings must be the same for the year d. If two companies have the same ROE, net book value, and cost of capital then their residual income must be the same for the year 30. Two companies, A and B, have the same ROEs but Company A has a higher residual income. Which of the following would explain this, all else equal? a. company A is riskier than company B b. Company A has higher expected future growth c. Company A has greater net book value d. Company A has lower ROA
Question 5
Blueprint for Personal & Professional Growth (BPPG) Definition of BPPG The adult learner and the business professional in the 21st century must learn to self-manage, self-monitor, and self-motivate to meet the multiple demands in his/her personal and professional life. The Blueprint for Personal & Professional Growth (BPPG) is designed to help you establish a habit or process of setting goals, analyzing and reflecting on benchmarks, and addressing strengths and challenges. The BPPG (initiated in the first course of the MBA and addressed in each subsequent core course) encourages you to consider, reflect, address, and develop successful skills and dispositions. The BPPG will culminate in the Capstone as you incorporate reflections from each core course of MBA program. The BPPG is designed to guide you in the development of skills and dispositions that will help you achieve your personal and professional goals. The BPPG in MMBA 6520 has these components: 1) Part I, Personal and Professional Ethics, due in Week 3. Consider your own personal business ethics in light of the kinds of corruption and ethical malfeasance made possible by the technological age. Describe the ways in which you can either improve your own business ethics or help to impact the ethics of those who surround you (Weeks 1-3). 2) Part II, Yourself in the Global Economy, due in Week 5. Reflect upon and analyze how you see yourself in the context of the global economy. Explain your ideas for self-improvement based on your readings about other cultures and the ways that business is conducted internationally (Weeks 4-5). 3) Part III, Teaming and Interpersonal Relationships, due in Week 8. Based on the group activity in which you participated in this course, what new self-knowledge have you acquired regarding how you function in a team environment? Think about intersections between your group interactions and the mindset of intimacy and generosity that you have already been establishing. How might you create more intimate, generous relationships spanning a global, virtual workspace (Weeks 6-8)? Your reflection or introspection in your BPPG should be personal, purposeful, and intentional so that you can assess your current skills, abilities, and dispositions then determine how you will continue to develop, hone, or strengthen specific skills or dispositions. Objectives for the BPPG 1. The student reads, researches, and incorporates Learning Resources (sources beyond personal anecdotes) in response to reflection questions. 2. The student demonstrates the critical thinking skills of comparing/contrasting, analyzing, and inquiry during reflection. 3. The student explores and examines his/her own individual values and belief system during the reflective activity. 4. The student identifies patterns or connections between theory and practice. 5. The student focuses on thoughts based on past and current learning, and describes how the learning or course content has or may affect future paths.
