Pack & Carry is debating whether to invest in new equipment to manufacture a line of high-quality luggage

Pack & Carry is debating whether to invest in new equipment to manufacture a line of high-quality luggage. The new equipment would cost $1,728,125, with an estimated five-year life and no salvage value. The estimated annual operating results with the new equipment are as follows:

Revenue from Sales of New Luggage $800,000
Expenses Other Than Depreciation $306,250
Depreciation (Straight-Line Basis) 345,625 651,875
Increase in Net Income from the New Line 148,125

All revenue from the new luggage line and all expenses (except depreciation) will be received or paid in cash in the same period as recognized for accounting purposes. You are to compute the following for the investment in the new equipment to produce the new luggage line:

a. Annual cash flows.
b. Payback period.
c. Return on average investment.
d. Total present value of the expected future annual cash inflows, discounted at an annual rate of 10 percent.
e. Net present value of the proposed investment discounted at 10 percent.

Solution: Pack & Carry is debating whether to invest in new equipment to manufacture a line of high-quality luggage

Posted in Homework Help | Comments Off

An investment center in Shellforth Corporation was asked to identify three proposals for its capital budget

An investment center in Shellforth Corporation was asked to identify three proposals for its capital budget. Details of those proposals are:

Capital Budget Proposals
A B C
Capital Required $80,000 $50,000 $150,000
Annual Operating Return 24,000 16,000 15,000

Shellforth uses residual income to evaluate all capital budgeting projects. Its minimum required return is 12 percent.

a. Assume you are the investment center manager. Which project do you prefer? Why?
b. Assume your investment center’s current ROI is 18 percent and that the president of Shellforth is thinking about using ROI for the investment center’s evaluation. Would your preferences for the projects listed above change? Why?

Solution: An investment center in Shellforth Corporation was asked to identify three proposals for its capital budget

Posted in Homework Help | Comments Off

Sapsora Company uses ROI to measure the performance of its operating divisions and to reward division managers

Sapsora Company uses ROI to measure the performance of its operating divisions and to reward division managers. A summary of the annual reports from two divisions is shown below. The company’s weighted-average cost of capital is 12 percent.

Division A Division B
Total Assets $6,000,000 $8,750,000
Current Liabilities 500,000 1,750,000
After-Tax Operating Income 1,000,000 1,180,000
ROI 25% 14%

a. Which division is more profitable?
b. Would EVA more clearly show the relative contribution of the two divisions to the company as a whole? Show the computations.
c. Suppose the manager of Division A was offered a one-year project that would increase his investment base by $250,000 and show a profit of $37,500. Would the manager choose to invest in the new project?

Solution: Sapsora Company uses ROI to measure the performance of its operating divisions and to reward division managers

Posted in Homework Help | Comments Off

Accounting Assignments

1) Viva Inc. had bought machine X for $15,500 two years ago. The machine had no residual value and had an estimated useful life of 10 years. If the company uses the straight line depreciation method, calculate the current book value of the machine.

2) Henry Tax Planning Service bought production equipment for $9,600 on January 1, 2015. It has an estimated useful life of 5 years and zero residual value. Henry uses the straight-line method to calculate depreciation and records depreciation expense in the books at the end of every month. As of June 30, 2015, the book value of this equipment shown on Henry’s balance sheet will be:

3) Real Weight Losers, a diet magazine, collected $480,000 in subscription revenue in May. Each subscriber will receive an issue of the magazine for each of the next 12 months, beginning with the June issue. The company uses the accrual method of accounting. Provide the adjusting entry needed on June Assume the magazine initially records a liability for the subscription revenue.

4) On July 1, Alpha Company prepaid rent for a small equipment storage area. They paid $20,000 to rent the area for the period of July 1 through the end of the year. Provide the journal entry needed on July 1 when the payment is made. Assume the prepaid expense is initially recorded as an asset.

5) Luminous Electrical Repair performed services costing $8,000 on January 24 and invoiced the customer. Luminous received the $8,000 on January 31. Provide the journal entry on January 31 when the cash was received.

6) On January 1, 2015, the Accounts Receivable of Linda Company had a debit balance of $20,000. During January, the company provided services for $600,000 on account. The company collected $250,000 from its customers on account in January. What was the ending balance in the Accounts Receivable account at the end of January?

7) A company received $5,000 for 100 one-year subscriptions on July 1. The journal entry to record this is

8) On July 1, Alpha Company paid rent of $15,000 for a small equipment storage area for the period of July 1 till December 31. Provide the adjusting journal entry on July 31. Assume the prepaid expense is initially recorded as an asset.

9) ABC Company signed a one-year $48,000 note payable at 8% interest on May 1, 2014. If ABC only adjusts their accounts once a year at year-end, how much interest expense was accrued on December 31, 2014?

10) The balances of select accounts of Sandra Company as at December 31, 2015 are given below:

Debit Credit
Building $120,000
Cash 5,000
Office Supplies 700
Furniture 3,000
Prepaid Insurance 450
Accumulated Depreciation—Furniture $1,000
Land 35,000
Accumulated Depreciation—Building 4,800
Accounts Receivable 2,500

The insurance has been prepaid for the next half year. What are the total current assets that would be shown on the balance sheet?

11) Education for All sells tickets in advance for their weekly productions and records the proceeds as Unearned Revenue. At the end of each month, Education for All makes an adjusting entry to account for the tickets used during the month (ticket revenue.) On March 1, the Unearned Revenue account had a credit balance of $4,000. During March, they sold 300 tickets at $20 each and 250 tickets were used during the month. What is the balance in Unearned Revenue at the end of March?

12) Golden Oak Antique Shop had the following account balances at the end of the current accounting period:

Beginning inventory $73,000
Net purchases 58,250
Net sales revenue 87,500

The normal gross profit for the company is $45%. What was the company’s estimated cost of goods sold for the accounting period?

13) Samson Company had the following balances and transactions during 2014:

Beginning Merchandise Inventory 10 units at $95
March 10 Sold 8 units
June 10 Purchased 20 units at $100
October 30 Sold 15 units

What is the amount of the company’s Merchandise Inventory, as disclosed in the December 31, 2014 balance sheet as per the periodic first-in, first-out (FIFO) costing method?

14) Collins Computers stored its inventory in a warehouse which suffered a fire in late November, 2014. Their sales office was at a different location. In order to file a claim with the insurance company, the owners ask you to estimate the inventory in the warehouse. The following information is available:

Beginning inventory for November $375,500
Purchases through November 30 470,250
Net sales revenue through November 31 793,000

The company’s gross profit has historically been 40% of Net sales revenue. Estimate the value of the inventory destroyed in the fire using the gross profit method.

15) The Allowance for Bad Debts account has a credit balance of $2,000. The company’s management estimates that 2% of net credit sales will be uncollectible for the year 2015. Net credit sales for the year amounted to $250,000. What will be the amount of Bad Debts Expense reported on the income statement for 2015?

16) Art Parrish, the sole employee of Parrish Sales, has gross salary for March of $4,000. The entire amount is under the OASDI limit of $110,100, and thus subject to FICA. He is also subject to federal income tax at a rate of 18%. Art has a deduction of $320 for health insurance and $80 for United Way. Provide the Provide the journal entry to record salaries expense and payroll withholdings. (Assume a FICA—OASDI Tax of 4.2% and FICA—Medicare Tax of 1.45%.)

17) A $35,000, two-month, 7% note payable was issued on December 1, 2015. What is the amount of interest expense recorded in the year 2016?

18) The following information is needed to reconcile the cash balance for Fire Steel Inc.
• A deposit of $5,800 is in transit.
• Outstanding checks total $1,500.
• The book balance is $6,800 at February 28, 2013.
• The bookkeeper recorded a $1,740 check as $17,400 in payment of the current month’s rent.
• The bank balance at February 28, 2013 was $18,000.
• A deposit of $400 was credited by the bank for $4,000.
• A customer’s check for $3,700 was returned for nonsufficient funds.
• The bank service charge is $60.
Based on this information, prepare a bank reconciliation for Fire Steel Inc. as of February 28, 2013.
Answer:
Bank Book
Balance, February 28, 2013 Balance, February 28,2013

Adjusted balance Feb. 28, 2013 Adjusted balance Feb. 28, 2013

Solution: Accounting Assignments

Posted in Homework Help | Comments Off

Prepare a debt amortization schedule for a bond issued at discount

Prepare a debt amortization schedule for a bond issued at discount. Assume that the bond matures in 12 years with market interest rate at time of issue—10% annually and 5% semiannually. The stated interest rate is 8%. The interest is paid semiannually.

Solution: Prepare a debt amortization schedule for a bond issued at discount

Posted in Homework Help | Comments Off

16-33 (Control Activities in Payroll Processing) As part of the audit of Manor Company, you are assigned to review and test the payroll transactions of the Galena plant

16-33 (Control Activities in Payroll Processing) As part of the audit of Manor Company, you are assigned to review and test the payroll transactions of the Galena plant. Your tests show that all numerical items were accurate. The proper hourly rates were used, and the wages and deductions were calculated correctly. The payroll register was properly footed, totaled, and posted. Various plant personnel were interviewed to ascertain the payroll procedures being used in the department. You determine that:
1. The payroll clerk receives the time cards from the various department supervisors at the end of each pay period, checks the employee’s hourly rate against information provided by the personnel department, and records the regular and overtime hours for each employee.
2. The payroll clerk sends the time cards to the plant’s data processing department for compilation and processing.
3. The data processing department returns the time cards with the printed checks and payroll register to the payroll clerk on completion of the processing.
4. The payroll clerk verifies the hourly rate and hours worked for each employee by comparing the detail in the payroll register to the time cards.
5. If errors are found, the payroll clerk voids the computer-generated check, prepares another check for the correct amount, and adjusts the payroll register accordingly.
6. The payroll clerk obtains the plant signature plate from the accounting department and signs the payroll checks.
7. An employee of the personnel department picks up the checks and holds them until they are delivered to the department supervisors for distribution to the employees. Required a. Identify the shortcomings in the payroll procedures used in the payroll department of the Galena plant and suggest corrective actions. b. Identify the weaknesses, if any, that you believe are material and the reasons why.

Solution: As part of the audit of Manor Company, you are assigned to review and test the payroll transactions of the Galena plant

Posted in Homework Help | Comments Off

ECO 550 Final Exam (A+ Guaranteed)

Question 1

In the linear breakeven model, the difference between selling price per unit and variable cost per unit is referred to as:

Question 2

A ____ total cost function implies that marginal costs ____ as output is increased.

Question 3

The short-run cost function is:

Question 4

In a study of banking by asset size over time, we can find which asset sizes are tending to become more prominent.  The size that is becoming more predominant is presumed to be least cost. This is called:

Question 5

In determining the shape of the cost-output relationship only ____ depreciation is relevant.


Question 6

The main difference between perfect competition and monopolistic competition is:

Question 7

An “experience good” is one that:

Question 8

All of the following are true for both competition and monopolistic competition in the long run, except one of them.  Which is it?

Question 9

If price exceeds average costs under pure competition, ____ firms will enter the industry, supply will ____, and price will be driven ____.

Question 10

In the long-run, firms in a monopolistically competitive industry will

Question 11

Regulatory agencies engage in all of the following activities except _______.

Question 12

In natural monopoly, AC continuously declines due to economies in distribution or in production, which tends to found in industries which face increasing returns to scale.  If price were set equal to marginal cost, then:

Question 13

The practice by telephone companies of charging lower long-distance rates at night than during the day is an example of:

Question 14

Of the following, which is not an economic rationale for public utility regulation?

Question 15

When the cross elasticity of demand between one product and all other products is low, one is generally referring to a(n) ____ situation.

Question 16

If a cartel seeks to maximize profits, the market share (or quota) for each firm should be set at a level such that the ____ of all firms is identical.

Question 17

Which of the following is an example of an oligopolistic market structure?

Question 18

Some market conditions make cartels MORE likely to succeed in collusion.  Which of the following will make collusion more successful?

Question 19

In a kinked demand market, whenever one firm decides to lower its price,

Question 20

Barometric price leadership exists when

Question 21

The difference between cooperative and non-cooperative games is

Question 22

Credible promises and hostage mechanisms can support a continuous stream of cooperative exchanges except when

Question 23

Credibility in threats and commitments in sequential games is based on

Question 24

A key to analyzing subgame perfect equilibrium strategy in sequential games is


Question 25

Non-cooperative sequential games can incorporate all the following features except

Question 26

Which of the statements about price discrimination is (are) false?

Question 27

Third-degree price discrimination exists whenever:

Question 28

Vacation tours to Europe invariably package visits to disparate regions:  cities, mountains, and the seaside.  Bundling, a type of second degree price discrimination, is most profitable when:

Question 29

____ is a new product pricing strategy which results in a high initial product price. This price is reduced over time as demand at the higher price is satisfied.

Question 30

The optimal mark-up is:  m = -1/ (E+1).  When the mark-up on cookware equals 50%, then demand elasticity (E) for cookware is:

Question 31

When borrowers who do not intend to repay are able to hide their bad credit histories, a lender’s well-intentioned borrowers should

Question 32

Agency problems appear in many settings within a firm. All of the following are examples, except which is NOT a good example of this problem?

Question 33

Buying electricity off the freewheeling grid at one quarter ’til the hour for delivery on the hour illustrates:

Question 34

Vertical integration may be motivated by all of the following except:

Question 35

The Herfindahl-Hirschman index (also shortened to just the Herfindahl index) is a measure of ____.

Question 36

____ occurs whenever a third party receives or bears costs arising from an economic transaction in which the individual (or group) is not a direct participant.

========================================================================================================================

Question 1

In the linear breakeven model, the difference between selling price per unit and variable cost per unit is referred to as:

Question 2

In a study of banking by asset size over time, we can find which asset sizes are tending to become more prominent.  The size that is becoming more predominant is presumed to be least cost. This is called:

Question 3

George Webb Restaurant collects on the average $5 per customer at its breakfast & lunch diner. Its variable cost per customer averages $3, and its annual fixed cost is $40,000.  If George Webb wants to make a profit of $20,000 per year at the diner, it will have to serve__________ customers per year.

Question 4

Break-even analysis usually assumes all of the following except:

Question 5

The short-run cost function is:

Question 6

In the long-run, firms in a monopolistically competitive industry will

Question 7

Under asymmetric information,

Question 8

The price for used cars is well below the price of new cars of the same general quality.  This is an example of:

Question 9

The main difference between perfect competition and monopolistic competition is:

Question 10

If price exceeds average costs under pure competition, ____ firms will enter the industry, supply will ____, and price will be driven ____.

Question 11

Declining cost industries

Question 12

Of the following, which is not an economic rationale for public utility regulation?

Question 13

____ as practiced by public utilities is designed to encourage greater usage and therefore spread the fixed costs of the utility’s plant over a larger number of units of output.

Question 14

Regulatory agencies engage in all of the following activities except _______.

Question 15

The practice by telephone companies of charging lower long-distance rates at night than during the day is an example of:

Question 16

“Conscious parallelism of action” among oligopolistic firms is an example of ____.

Question 17

A cartel is a situation where firms in the industry

Question 18

Even ideal cartels tend to be unstable because

Question 19

In a kinked demand market, whenever one firm decides to lower its price,

Question 20

The existence of a kinked demand curve under oligopoly conditions may result in

Question 21

The starting point of many methods for predicting equilibrium strategy in sequential games is

Question 22

Essential components of a game include all of the following except:

Question 23

Credibility in threats and commitments in sequential games is based on

Question 24

In a game, a dominated strategy is one where:

Question 25

Credible promises and hostage mechanisms can support a continuous stream of cooperative exchanges except when

Question 26

Vacation tours to Europe invariably package visits to disparate regions:  cities, mountains, and the seaside.  Bundling, a type of second degree price discrimination, is most profitable when:

Question 27

____ is the price at which an intermediate good or service is transferred from the selling to the buying division within the same firm.

Question 28

The segmenting of customers into several small groups such as household, institutional, commercial, and industrial users, and establishing a different rate schedule for each group is known as:

Question 29

To maximize profits, a monopolist that engages in price discrimination must allocate output in such a way as to make identical the ____ in all markets.

Question 30

Firms that have a cover charge for their customers and charge for each item they purchase as well are exhibiting

Question 31

Non-redeployable durable assets that are dependent upon unique complementary and perfectly redeployable assets to achieve substantial value-added will typically be organized as

Question 32

Which of the following are not approaches to resolving the principal-agent problem?

Question 33

Governance mechanisms are designed

Question 34

Agency problems appear in many settings within a firm. All of the following are examples, except which is NOT a good example of this problem?
Answer

Question 35

____ occurs whenever a third party receives or bears costs arising from an economic transaction in which the individual (or group) is not a direct participant.

Question 36

The antitrust laws regulate all of the following business decisions except ____.

Here’s the SOLUTION

Posted in Homework Help | Comments Off

CJA 444 week 3 DQ 1

CJA 444 week 3 DQ 1

Does increased motivation result in increased stress?

Click here for CJA 444 week 3 DQ 1 solution.

Posted in Homework Help | Comments Off

CJA 444 week 2 DQ 2

CJA 444 week 2 DQ 2

What do you see as the influence of the external political environment on the ethics of decision making in your agency?

Click here for CJA 444 week 2 DQ 2 solution.

Posted in Homework Help | Comments Off

CJA 444 week 2 DQ 1

CJA 444 week 2 DQ 1

Imagine that you are the chief executive of a criminal justice agency and you see the need to change the culture from the traditional criminal justice culture that values the status quo to one that values innovation. What steps would you take to initiate and sustain cultural change?

Click here for CJA 444 week 2 DQ 1 solution.

Posted in Homework Help | Comments Off