(Various Time Value Situations) Using the appropriate interest table, provide the solution to each of the following four questions by computing the unknowns

P6-2 (Various Time Value Situations) Using the appropriate interest table, provide the solution to each of the following four questions by computing the unknowns.

(a) What is the amount of the payments that Ned Winslow must make at the end of each of 8 years to accumulate a fund of $90,000 by the end of the eighth year, if the fund earns 8% interest, compounded annually?

(b) Robert Hitchcock is 40 years old today and he wishes to accumulate $500,000 by his sixty-fifth birthday so he can retire to his summer place on Lake Hopatcong. He wishes to accumulate this amount by making equal deposits on his fortieth through his sixty-fourth birthdays. What annual deposit must Robert make if the fund will earn 12% interest compounded annually?

(c) Diane Ross has $20,000 to invest today at 9% to pay a debt of $47,347. How many years will it take her to accumulate enough to liquidate the debt?

(d) Cindy Houston has a $27,600 debt that she wishes to repay 4 years from today; she has $19,553 that she intends to invest for the 4 years. What rate of interest will she need to earn annually in order to accumulate enough to pay the debt?

Click here for the solution: (Various Time Value Situations) Using the appropriate interest table, provide the solution to each of the following four questions by computing the unknowns

Using the information from Rebekah Company prepare a pension worksheet inserting January 1, 2008

E20-3 (Preparation of Pension Worksheet with Reconciliation) Using the information from Rebekah Company prepare a pension worksheet inserting January 1, 2008, balances, showing December 31, 2008, balances, the reconciliation schedule, and the journal entry recording pension expense.

Rebekah Company provides the following information about its defined benefit pension plan for the year 2008.

Service cost $ 90,000
Contribution to the plan $ 105,000
Prior service cost amortization $ 10,000
Actual and expected return on plan assets $64,000
Benefits paid $40,000
Accrued pension cost liability at January 1, 2008 $10,000
Plan assets at January 1, 2008 $ 640,000
Projected benefit obligation at January 1, 2008 $800,000
Unrecognized prior service cost balance at January 1, 2008 $150,000
Interest/discount (settlement) rate 10%

Click here for the solution: Using the information from Rebekah Company prepare a pension worksheet inserting January 1, 2008

Based on the following income statement and balance sheet for Rashid Corporation, determine the cash flows from operating activities using the indirect method

Based on the following income statement and balance sheet for Rashid Corporation, determine the cash flows from operating activities using the indirect method.

Rashid Corporation
Income Statement
For Year ended Dec. 31, 2009

Sales 504,000
Cost of goods sold 327,600
Depreciation expense 42000
other operating expenses 125500 (495100)
other gains (losses):
Gain on sale of equipment 7200
Income before taxes 16100
Income tax expense (4800)
Net income 11,300

Rashid Corporation
Balance Sheets
For Year ended Dec. 31, 2009

2009 2008
Assets
Cash 64650 55800
Accounts Receivable 21000 29000
Inventory 58000 52100
Equipment 240000 222000
Accumulated depreciation (106000) (96000)
Total assets 277650 262900

Liabilities:
Accounts Payable 28400 23700
Income taxes payable 1050 1200
Total Liabilities 29450 24900

Equity
Common Stock 106000 106000
Capital in excess of par value 18000 18000
Retained earnings 124200 114000
Total equity 248200 238000

Click here for the solution: Based on the following income statement and balance sheet for Rashid Corporation, determine the cash flows from operating activities using the indirect method

Eric Johnson (using data from Problem 1.6) determines his costs to be as follows

Problems 1.7 Eric Johnson (using data from Problem 1.6) determines his costs to be as follows:

• Labor: $10 per hour
• Resin: $5 per pound
• Capital expense: 1% per month of investment
• Energy: $.50 per BTU.

Show the percent change in productivity for one month last year versus one month this year, on a multifactor basis with dollars as the common denominator.

Data from Problem 1.6
Last Year Now
Units produced 1,000 1,000
Labor (hours) 300 275
Resin (pounds) 50 45
Capital invested ($) 10,000 11,000
Energy (BTU) 3,000 2,850


Click here for the solution: Eric Johnson (using data from Problem 1.6) determines his costs to be as follows

Refer to Problem 4.2. Develop a forecast for years 2 through 12 using exponential smoothing with a= .4 and a forecast for year 1 of 6

Problem 4.3 Refer to Problem 4.2. Develop a forecast for years 2 through 12 using exponential smoothing with a= .4 and a forecast for year 1 of 6. Plot your new forecast on a graph with the actual data and the naive forecast. Based on a visual inspection, which forecast is better
Year 1 2 3 4 5 6 7 8 9 10 11
Demand 7 9 5 9 13 8 12 13 9 11 7


Click here for the solution: Refer to Problem 4.2. Develop a forecast for years 2 through 12 using exponential smoothing with a= .4 and a forecast for year 1 of 6

Record the following transactions using the accounting equation

1. Record the following transactions using the accounting equation.

Example:
Assets = Liabilities + Equity
XXXX(cash) XXXX(accounts payable)

A. Amanda invests $17,000 cash into her merchandising business.
B. She buys $6,500 of office equipment and $3,000 of office supplies with cash from Office Depot.
C. Additional purchases were supplies for $35,000 on account from various suppliers.


Click here for the solution: Record the following transactions using the accounting equation

Journalize the following transactions using the perpetual inventory method

5. Journalize the following transactions using the perpetual inventory method.

Aug. 6 Purchased $830 of inventory on account from Johnston with terms of 2/10, n/30.
Aug. 8 Purchased $2,611 of inventory for cash from Pillner Company.
Aug.15 Paid for August 6 purchase from Johnston.
Aug. 17 Purchased $1,743 of merchandise on account from Luis Company with Terms of 3/15, n/45.


Click here for the solution: Journalize the following transactions using the perpetual inventory method

Complete an Income Statement, Statement of Owner's Equity, and Balance Sheet using the information provided below for Rya’s Planning Services

Complete an Income Statement, Statement of Owner's Equity, and Balance Sheet using the information provided below for Rya’s Planning Services.

Cash………………………………….$21,500
Accounts Receivable………. 17,500
Office Supplies……………… … 500
Equipment…………………… …….15,000
Accounts Payable…………… . 9,750
Rya Page, Capital……………....28,200
Rya Page, Drawing……………… 5,000
Planning Fees Income……… …26,250
Office Supplies Expense……….. 200
Rent Expense……………………… … 800
Salaries Expense……………… …. 3,000
Utilities Expense……………… ….. 700


Click here for the solution: Complete an Income Statement, Statement of Owner's Equity, and Balance Sheet using the information provided below for Rya’s Planning Services

Using the P/E, P/CF, and P/S ratios, estimate the 2010 share price for Abbott Laboratories

28. Using the P/E, P/CF, and P/S ratios, estimate the 2010 share price for Abbott Laboratories. Use the average stock price each year to calculate the price ratios.


Click here for the solution: Using the P/E, P/CF, and P/S ratios, estimate the 2010 share price for Abbott Laboratories

What is the major advantage of using the indirect method to present the statement of cash flows?

14. What is the major advantage of using the indirect method to present the statement of cash flows?


Click here for the solution: What is the major advantage of using the indirect method to present the statement of cash flows?

What is the difference between preparing the statement of cash flows using the direct method and using the indirect method?

12. What is the difference between preparing the statement of cash flows using the direct method and using the indirect method?


Click here for the solution: What is the difference between preparing the statement of cash flows using the direct method and using the indirect method?

If two service departments service the same number of departments, which service department's costs are allocated first when using the step method

1. If two service departments service the same number of departments, which service department's costs are allocated first when using the step method?

2. Which of the following service department cost allocation methods is most widely used by manufacturing companies?

3. Which of the following statements is (are) false regarding the effective use of management control systems.
(A) In general, cost allocations should not be used in management control systems because clear control over the cost being allocated cannot be determined.
(B) The primary reason to use a dual rate allocation system is to focus a manager's performance evaluation on factors under the manager's direct control.

4. The amount of resources used in an activity-based costing (ABC) system for a specific activity is computed by multiplying the:

5. Which of the following statements is false?

6. In general, the first budget prepared is the

7. Relative performance evaluations (RPE) are not designed to

8. Which of the following items would be classified as a batch-level cost in an activity-based cost management (ABM) system?

9. Which of the following activities is most likely to be classified as value-added for a manufacturing company?

10. The unused resource capacity is the difference between the resources supplied and the resources


Click here for the solution: If two service departments service the same number of departments, which service department's costs are allocated first when using the step method

The management of Coker Corp. is doing a quick forecast of 20X9 using the modified percentage of sales method

The management of Coker Corp. is doing a quick forecast of 20X9 using the modified percentage of sales method in preparation for a more detailed planning exercise later in the month. The estimate is to assume a 10% growth in sales. All other line items are to be assumed to grow at the same rate except for fixed assets which is projected to increase by $88,000 due to an expansion program already underway. Approximate financial statements for the current year, 20X8, and a planning worksheet are shown below. The firm pays 9% interest on all of its debt. Assume the tax rate is a flat 25%. There are no plans for dividends or the sale of additional stock next year. Make a forecast of Coker’s complete income statement and balance sheet. Work to the nearest thousand dollars. (Hints: The easiest way to grow a number by 10% is to multiply it by 1.1 rather than taking 10% and adding. Do not grow subtotals. For example, to grow Revenue and COGS by 10%, round each to the nearest thousand and subtract for Gross Margin. Don’t grow interest, debt, or equity; use the debt/interest iteration technique.)


Click here for the solution: The management of Coker Corp. is doing a quick forecast of 20X9 using the modified percentage of sales method

Journalize the following transactions for Wilson Company using the gross method of accounting for purchase discounts

Journalize the following transactions for Wilson Company using the gross method of accounting for purchase discounts. Assume a perpetual inventory system.

June 2 Purchased goods from Peterson Company on account, $13,600, terms 3/10, n/30.
June 8 Returned merchandise to Peterson Company that was previously purchased on account, $3,400.
June 12 Paid the amount due to Peterson Company.


Click here for the solution: Journalize the following transactions for Wilson Company using the gross method of accounting for purchase discounts

Using the information from Problem 47, determine the basis of the property contributed in the hands of the corporation in each instance

48. Using the information from Problem 47, determine the basis of the property contributed in the hands of the corporation in each instance. Assume that the 80% rule is met in all cases.


Click here for the solution: Using the information from Problem 47, determine the basis of the property contributed in the hands of the corporation in each instance

Using the data in Exercise 9-15, assume that during the second year of operations Filippi’s Plumbing Supply Co. had net sales of $5,500,000

EX 9-16 Effect of doubtful accounts on net income

Using the data in Exercise 9-15, assume that during the second year of operations Filippi’s Plumbing Supply Co. had net sales of $5,500,000, wrote off $70,000 of accounts as uncollectible using the direct write-off method, and reported net income of $450,000.

a. Determine what net income would have been in the second year if the allowance method (using 1½% of net sales) had been used in both the first and second years.

b. Determine what the balance of the allowance for doubtful accounts would have been at the end of the second year if the allowance method had been used in both the first and second years.

Click here for the solution: Using the data in Exercise 9-15, assume that during the second year of operations Filippi’s Plumbing Supply Co. had net sales of $5,500,000

Determine the size of the M1 money supply using the following information

1. Determine the size of the M1 money supply using the following information.
Currency plus traveler’s checks $25 million
Negotiable CDs $10 million
Demand deposits $13 million
Other checkable deposits $12 million

Click here for the solution: Determine the size of the M1 money supply using the following information

Lance Lawn Services reports bad debt expense using the allowance method

E 16-5 Temporary difference; future deductible amounts; taxable income given

Lance Lawn Services reports bad debt expense using the allowance method. For tax purposes, the expense is deducted when accounts prove uncollectible (the direct write-off method). At December 31, 2011, Lance has accounts receivable and an allowance for uncollectible accounts of $20 million and $1 million, respectively, and taxable income of $75 million. At December 31, 2010, Lance reported a deferred tax asset of $435,000 related to this difference in reporting bad debts, its only temporary difference. The enacted tax rate is 40% each year.

Required:
Prepare the appropriate journal entry to record Lance's income tax provision for 2011.

Click here for the solution: Lance Lawn Services reports bad debt expense using the allowance method

Using the appropriate interest table, compute the present values of the

E6-5 (Computation of Present Value) Using the appropriate interest table, compute the present values of the following periodic amounts due at the end of the designated periods.
(a) $50,000 receivable at the end of each period for 8 periods compounded at 12%.
(b) $50,000 payments to be made at the end of each period for 16 periods at 9%.
(c) $50,000 payable at the end of the seventh, eighth, ninth, and tenth periods at 12%.

Click here for the solution: Using the appropriate interest table, compute the present values of the

Bruno Company accumulates the following data concerning a mixed cost, using miles as the activity level

BE5-4 Bruno Company accumulates the following data concerning a mixed cost, using miles as the activity level

Miles Driven Total Cost Miles Driven Total Cost
January 8,000 $14,150 March 8,500 $15,000
February 7,500 13,500 April 8,200 14,490

Compute the variable and the fixed cost element using the high-low method

Click here for the solution: Bruno Company accumulates the following data concerning a mixed cost, using miles as the activity level