A company has a 12% WACC and is considering two mutually exclusive investments (that cannot be repeated) with the following net cash flows: a. What is each projects NPV? b. What is each projects IRR?...
What conditions, externally and internally, would be desired/necessary for a firm to diversify?
Multiple Choice Questions 1. Ginger Company's product has a contribution margin per unit of $11.25 and a contribution margin ratio of 22.5%. What is the selling price of the product? A. $5. B. $20....
Sundance Systems has the following transactions during July. July 5 Purchases 40 LCD televisions on account from Red River Supplies for $2,500 each, terms 3/10, n/30. July 8 Returns to Red River two...
Thirty-five samples of size 7 each were taken from a fertilizer-bag-filling machine. The results were: overall mean = 57.75 lb; Average range = 1.78 lb. (a) Determine the upper and lower control...
Kara Shin is a licensed CPA. During the first month of operations of her business, Kara Shin, Inc., the following events and transactions occurred. May 1 Stockholders invested $20,000 cash in...
UrLink Company is a newly formed company specializing in high-speed Internet service for home and business. The owner, Lenny Kirkland, had divided the company into two segments: Home Internet Service...
Plaza, Inc., acquires 80 percent of the outstanding common stock of Stanford Corporation on January 1, 2018, in exchange for $900,000 cash. At the acquisition date, Stanford's total fair value,...
Eisler Corporation issued 2,000 $1,000 bonds at 101. Each bond was issued with one detachable stock warrant. After issuance, the bonds were selling in the market at 98, and the warrants had a market...
Tarbox Manufacturing Company makes sheet metal products for heating and air conditioning installations. For the past several years, the company's income has been declining. Its statements of cost of...
(Inventory Errors) The net income per books of Adamson Company was determined without knowledge of the errors indicated below. Prepare a work sheet to show the adjusted net income figure for each of...
Juanita Pierre opened a law office, on July 1, 2012. On July 31, the balance sheet showed Cash $5,000, Accounts Receivable $1,500, Supplies $500, Equipment $6,000, Accounts Payable $4,200, and Owners...
Why is there so much government regulation involving social responsibility issues? Should there be less?
H. Jeckel Manufacturing Company allows employees to purchase manufacturing materials (such as metal and lumber) at cost for personal use. To do so, an employee must complete a materials requisition...
(Two Temporary Differences, Tracked through 3 Years, Multiple Rates) Taxable income and pretax financial income would be identical for Jones Co. except for its treatments of gross profit on...
As the Cottrell Bicycle Co. of St. Louis completes plans for its new assembly line, it identifies 25 different tasks in the production process. VP of Operations Jonathan Cottrell now faces the job of...
1. What type of controlfeedforward, concurrent, or feedbackdo you think would be most important in this situation? Explain your choice. 2. How might immediate corrective action have been used in this...
On September 1, Boylan Office Supply had an inventory of 30 calculators at a cost of $18 each. The company uses a perpetual inventory system. During September, the following transactions occurred....
Kenoly Corporation owns a patent that has a carrying amount of $300,000. Kenoly expects future net cash flows from this patent to total $210,000. The fair value of the patent is $110,000. Prepare...
Consider each of the following situations independently. (Ignore income taxes.) 1. Annual cash inflows from two competing investment opportunities are given below. Each investment opportunity will...
The Awake Coffee Company produces gourmet instant coffee. The company wants to be sure that the average fill of coffee containers is 12.0 ounces. To make sure the process is in control, a worker...
Wells Printing is considering the purchase of a new printing press. The total installed cost of the press is $2.2 million. This outlay would be partially offset by the sale of an existing press. The...
Kraft Enterprises owns the following assets at December 31, 2010. What amount should be reported ascash? Cash in bank-savings account Checking account balance Postdated checks Certificates of deposit...
Larner Corporation is a diversified manufacturer of industrial goods. The companys activity-based costing system contains the following six activity cost pools and activity rates: Activity Cost Pool...
Three different plans for financing an $18,000,000 corporation are under consideration by its organizers. Under each of the following plans, the securities will be issued at their par or face amount,...
On January 1, 2013, Parflex Corporation exchanged $344,000 cash for 90 percent of Eagle Corporations outstanding voting stock. Eagles acquisition date balance sheet follows: On January 1, 2013,...
DCF, accrual accounting rate of return, working capital, evaluation of performance, no income taxes. Century Lab plans to purchase a new centrifuge machine for its New Hampshire facility. The machine...
Nicki Johnson, a sophomore mechanical engineering student, received a call from an insurance agent who believes that Nicki is an older woman who is ready to retire from teaching. He talks to her...
Chavez Company most recently reconciled its bank statement and book balances of cash on August 31 and it reported two checks outstanding, No. 5888 for $1,028.05 and No. 5893 for $494.25. The...
The Lakeshore Hotels guest-days of occupancy and custodial supplies expense over the last seven months were; Guest-days is a measure of the overall activity at the hotel. For example, a guest who...
David Abbot is interested in purchasing a bond issued by Sony. He has obtained the following information on the security: Answer the following questions. a. Calculate the before-tax cost of the Sony...
Alcide Mining Company purchased land on February 1, 2014, at a cost of $1,190,000. It estimated that a total of 60,000 tons of mineral was available for mining. After it has removed all the natural...
Hertz Limo Service was organized to provide limousine service between the airport and various suburban locations. It has just completed its second year of business. Its trial balance follows. The...
Multiple Choice Questions 1. Halifax Corporation has a December 31 fiscal year-end. As of December 31, Year 1, the company has a debt covenant violation that results in a 10-year note payable to Nova...
Why should managers worry about product over costing or under costing?
EEO legislation was prompted by significant social events. List those events and describe how they influenced the passage of various EEO laws.
A tabular analysis of the transactions made during August 2010 by Witten Company during its first month of operations is shown below. Each increase and decrease in stockholders equity is explained....
The net income per books of Linda Patrick Company was determined without knowledge of the errors indicated. Instructions Prepare a worksheet to show the adjusted net income figure for each of the 6...
Suppose a local company has the following balance sheet accounts: AccountsBalances Land..........$9,000 Equipment ......... ? Salaries Payable ....... 4,300 Notes Payable....... ? Supplies .............
PC-Express is a computer retail store that sells two kinds of microcomputers: desktops and laptops. The company earns $600 on each desktop computer it sells and $900 on each laptop. The...
Senger Company sold merchandise of $15,500, terms 2/10, n/30, to Burns Inc. on April 23. Burns paid Senger for the merchandise on May 2. On May 12, Senger paid Burns $650 for costs incurred by Burns...
Presented below are three unrelated situations. (a) Ron Stein Company recently signed a lease for a new office building, for a lease period of 10 years. Under the lease agreement, a security deposit...
Tim Urban, owner/ manager of urbans Motor Court in Key West, is considering outsourcing the daily room cleanup for his motel to Duffys Maid Service. Tim rents an average of 50 rooms for each of 365...
Orion Iron Corp. tracks the number of units purchased and sold throughout each year but applies its inventory costing method at the end of the year, as if it uses a periodic inventory system. Assume...
The following information pertains to Joyce Company. 1. Cash balance per bank, July 31, $7,328. 2. July bank service charge not recorded by the depositor $38. 3. Cash balance per books, July 31,...
Carlos Cavalas, the manager of Echo Products Brazilian Division, is trying to set the production schedule for the last quarter of the year. The Brazilian Division had planned to sell 3,600 units...
Colter Company prepares monthly cash budgets. Relevant data from operating budgets for 2014 are: All sales are on account. Collections are expected to be 50% in the month of sale, 30% in the first...
The following are the eight balance-related audit objectives, six tests of details of balances for accounts receivable, and seven tests of controls or substantive tests of transactions for the sales...
Judi Dench is a licensed dentist. During the first month of the operation of her business, the following events and transactions occurred. April 1 Stockholders invested $40,000 cash in exchange for...
Cortez Company sells chairs that are used at computer stations. Its beginning inventory of chairs was 100 units at $60 per unit. During the year, Cortez made two batch purchases of this chair. The...
Henna Co. produces and sells two products, T and O. It manufactures these products in separate factories and markets them through different channels. They have no shared costs. This year, the company...
The Butler-Perkins Company (BPC) must decide between two mutually exclusive projects. Each costs $6,750 and has an expected life of 3 years. Annual project cash flows begin 1 year after the initial...
Breakeven analysis and target profit, taxes Patterson Parkas Companys sales revenue is $30 per unit, variable costs are $19.50 per unit, and fixed costs are $147,000. Required (a) Compute Pattersons...
You are the manager of a firm that charges customers $16 per unit for the first unit purchased, and $12 per unit for each additional unit purchased in excess of one unit. The accompanying graph...
Jefferson County established a capital project fund in 2011 to build lowincome housing with the transfer of $100,000 from the General Fund. The following transactions occurred during 2012: 1. April...
Sandra Saunders and her design team are analyzing the production costs for three alternative monitor designs. Given the cost information below, and assuming form and function are similar for each...
Raymond Companys trial balance at December 31, 2014, is presented below. All 2014 transactions have been recorded except for the items described shown below. Unrecorded transactions: 1. On May 1,...
Maquoketa Services was formed on May 1, 2017. The following transactions took place during the first month. Transactions on May 1: 1. Jay Bradford invested $40,000 cash in the company, as its sole...
Briefly discuss Harrahs marketing information system, using Figure as a guide. Joseph, a 30-something New Yorker, recently went on a weekend trip to Atlantic City, New Jersey, where he hoped to stay...
1. Trace the path of the medication list and denote possible failure points. Construct a process flowchart of the existing process and create a new chart of an improved process. 2. Was the medication...
1. Make a list of the elements that are interrelated or interdependent. Then write a paragraph stating why it is critical to monitor these elements closely. 2. Decide on the boundaries and ultimate...
1. What challenges would there be to creating an effective team in an organization that was growing by acquiring other companies? How could managers deal with these challenges? 2. Why do you think...
Wang Co. has delivery equipment that cost $50,000 and has been depreciated $24,000. Instructions Record entries for the disposal under the following assumptions. (a) It was scrapped as having no...
(Multiple-step and Single-step) Two accountants for the firm of Elwes and Wright are arguing about the merits of presenting an income statement in a multiple-step versus a single-step format. The...
A portion of the combined statement of income and retained earnings of Seminole Inc. for the current year follows. During the year, Seminole Inc. suffered a major casualty loss of $1,340,000 after...
1. Besides the factors identified, what other factors should Invincibility Systems take into account in its HR planning? 2. What legal concerns does the data analysis at Invincibility raise? How...
World Foods, Inc., imports food products such as meats, cheese, and pastries to the United States from warehouses at ports in Hamburg, Marseilles, and Liverpool. Ships from these ports deliver the...
Acquisition Costs of Realty the expenditures and receipts below and on the next page are related to land, land improvements, and buildings acquired for use in a business enterprise. The receipts are...
Pauls Book Warehouse distributes hardcover books to retail stores and extends credit terms of 2/10, n/30 to all of its customers. At the end of May, Pauls inventory consisted of books purchased for...
Callie Peters is completing the audit of MakingNewFriends.com for the year ended December 31, 2013. Callie has been the audit manager on this engagement for the past three years. MakingNewFriends.com...
Jackplum Vineyards, whose fiscal year begins on November 1, has just completed a record-breaking year producing and selling wine. Its inventory account balances on October 31 of this year were...
MULTIPLE-CHOICE QUESTIONS 1. Long-lived assets include which of the following? a. Tangible assets such as equipment. b. Intangible assets such as patents. c. Natural resources. d. All of the above....
The Ulmer Uranium Company is deciding whether or not it should open a strip mine, the net cost of which is $4.4 million. Net cash inflows are expected to be $27.7 million, all coming at the end of...
The following questions concern the determination of the proper sample size in audit sampling using the following table: Required a. Assume that the initial sample size for column 1 using...
Olathe Company exchanges old delivery equipment for new delivery equipment. The book value of the old delivery equipment is $31,000 (cost $61,000 less accumulated depreciation $30,000). Its fair...
Tuff-Rider, Inc., manufactures touring bikes and mountain bikes in a variety of frame sizes, colors, and component combinations. Identical bicycles are produced in lots of 100. The projected demand,...
Lorance Corporation issued $400,000, 7%, 20-year bonds on January 1, 2017, for $360,727. This price resulted in an effective-interest rate of 8% on the bonds. Interest is payable annually on January...
Design a management development program for first-level supervisors in an electric utility company. What courses and experiences do they need?
Nonmonetary Exchanges on August 1, Hyde, Inc. exchanged productive assets with Wiggins, Inc. Hydes asset are referred to below as Asset A, and Wiggins is referred to as Asset B. The following facts...
Maria Chavez owns a catering company that serves food and beverages at parties and business functions. Chavezs business is seasonal, with a heavy schedule during the summer months and holidays and a...
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. The companys EBIT...
Wriston Company has $300,000 to invest. The company is trying to decide between two alternative uses of the funds. The alternatives are as follows: The working capital needed for project B will be...
Henri of Henris French Cuisine (HFC), a chain of 12 restaurants, is trying to decide if it makes sense to outsource the purchasing function. Currently, Henri employs two buyers at an annual fixed...
Identify several industries that have highly variable demand patterns. Explore how they adjust capacity.
The Harriet Hotel in downtown Boston has 100 rooms that rent for $150 per night. It costs the hotel $30 per room in variable costs (cleaning, bathroom items, etc.) each night a room is occupied. For...
The cash account for Online Medical Co, at June 30, 2012, indicated a balance of $9,375. The bank statement indicated a balance of $10,760 on June 30, 2012. Comparing the bank statement and the...
Gabrielle just won $2.5 million in the state lottery. She is given the option of receiving a total of $1.3 million now, or she can elect to be paid $100,000 at the end of each of the next 25 years....
Samantha Stamford opened a medical practice. During July, the first month of operation, the business, titled Samantha Stamford, M.D., experienced the following events: July 6 Stamford contributed...
Files and More, Inc. (F&M), a manufacturer of office equipment, uses MRP to schedule its production. Because of the current recession and the need to cut costs, F&M has targeted inventory as a prime...
Mike Devereaux Company shows the following entries in its Equipment account for 2015. All amounts are based on historical cost. Instructions (a) Prepare any correcting entries necessary. (b) Assuming...
At May 31, 2017, the accounts of Lopez Company show the following. 1. May 1 inventoriesfinished goods $12,600, work in process $14,700, and raw materials $8,200. 2. May 31 inventoriesfinished goods...
Flying Flags is opening a new theme park in southern Indiana. The park will have six main attractions: (a) animal kingdom, (b) Broadway shows, (c) carousel and other kiddie rides, (d) daredevil...
For 2012, Campbell Soup Company had pension expense of $73 million and contributed $71 million to the pension fund. Prepare Campbell Soup Companys journal entry to record pension expense and funding.
Hart Corporation encounters the following situations: 1. Hart collects $1,300 from a customer in 2014 for services to be performed in 2015. 2. Hart incurs utility expense which is not yet paid in...
Kaleta Company reports the following for the month of June. Instructions (a) Calculate the cost of the ending inventory and the cost of goods sold for each cost low assumption, using a perpetual...
Suppose the following data are derived from the 2014 financial statements of Southwest Airlines. (All dollars are in millions.) Southwest has a December 31 year-end. Cash balance, January 1,...
IBP Inc. is considering establishing a new machine to automate a meat packing process. The machine will save $50,000 in labor annually. The machine can be purchased for $200,000 today and will be...
1. What should Andy Gibson have done differently in his meeting with Jacob Clemson in Jacobs office? 2. What are some things Andy could have done differently from his initial contact with Mr. Clemson...
The Field, Brown & Snow partnership was begun with investments by the partners as follows: Field, $ 131,250; Brown, $ 165,000; and Snow, $ 153,750. The operations did not go well, and the partners...
Adam Nichols, a former disc golf star, operates Adams Discorama. At the beginning of the current season on April 1, the ledger of Adams Discorama showed Cash $1,800, Inventory $2,500, and Owners...