On the first day of the fiscal year, Jill Company issues $3,639,000

On the first day of the fiscal year, Jill Company issues $3,639,000, 11%, 10-year bonds for cash of $4,673,393 when the market rate of interest was 7%. The bonds pay interest semi-annually on June 30 and December 31. Determine (1) the premium on bonds payable at the date of issuance, (2) the semi-annual cash interest payment, (3) the semi-annual premium amortization using the straight line method, and (4) the semi-annual interest expense.

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Martin Buber Co. purchased land as a factory site for $622,400 (A+ Guaranteed)

Martin Buber Co. purchased land as a factory site for $622,400. The process of tearing down two old buildings on the site and constructing the factory required 6 months.

The company paid $65,352 to raze the old buildings and sold salvaged lumber and brick for $9,803. Legal fees of $2,879 were paid for title investigation and drawing the purchase contract. Martin Buber paid $3,423 to an engineering firm for a land survey, and $105,808 for drawing the factory plans. The land survey had to be made before definitive plans could be drawn. Title insurance on the property cost $2,334, and a liability insurance premium paid during construction was $1,400. The contractor’s charge for construction was $4,263,440. The company paid the contractor in two installments: $1,867,200 at the end of 3 months and $2,396,240 upon completion. Interest costs of $264,520 were incurred to finance the construction.

Determine the cost of the land and the cost of the building as they should be recorded on the books of Martin Buberk Co. Assume that the land survey was for the building.

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The Laurel Co. is owned and operated by Paul Laurel (A+ Guaranteed)

The Laurel Co. is owned and operated by Paul Laurel. The following is an excerpt from a conversation between Paul Laurel and Maria Fuller, the chief accountant for The Laurel Co.: Paul: Maria, I have a question about this recent balance sheet. Maria: Sure, what’s your question? Paul: Well, as you know, I’m applying for a bank loan to finance our new store in Clinton, and I noticed that the accounts payable are listed as $180,000. Maria: That’s right. Approximately $150,000 of that represents amounts due our suppliers, and the remainder is miscellaneous payables to creditors for utilities, office equipment, supplies, etc. Paul: That’s what I thought. But as you know, we normally receive a 2% discount from our suppliers for earlier payment, and we always try to take the discount. Maria: That’s right. I can’t remember the last time we missed a discount. Paul: Well, in that case, it seems to me the accounts payable should be listed minus the 2% discount. Let’s list the accounts payable due suppliers as $147,000 rather than $150,000. Every little bit helps. You never know. It might make the difference between getting the loan and not. How would you respond to Paul Laurel’s request?

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Samanca Cabinets makes custom wooden cabinets for high-end stereo systems from specialty woods

Samanca Cabinets makes custom wooden cabinets for high-end stereo systems from specialty woods. The company uses a job-order costing system. The capacity of the plant is determined by the capacity of its constraint, which is time on the automated bandsaw that makes finely beveled cuts in wood according to the preprogrammed specifications of each cabinet. The bandsaw can operate up to 150 hours per month. The estimated total manufacturing overhead at capacity is $11,000 per month. The company bases its predetermined overhead rate on capacity, so its predetermined overhead rate is $74 per hour of bandsaw use

The results of a recent month’s operations appear below:
  Sales $ 39,860
  Beginning inventories $ 0
  Ending inventories $ 0
  Direct materials $ 4,820
  Direct labor (all variable) $ 9,640
  Manufacturing overhead incurred $ 10,870
  Selling and administrative expense $ 9,350
  Actual hours of bandsaw use 124

Now I need to know what would be the dollar amount for the “Cost of Goods Sold”

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Medusa Products uses a job-order costing system

Medusa Products uses a job-order costing system. Overhead costs are applied to jobs on the basis of machine-hours. At the beginning of the year, management estimated that the company would work 85,000 machine-hours and incur $170,000 in manufacturing overhead costs for the year.

Required:

1) Compute the company’s predetermined overhead rate.

2) Assume that during the year the company actually worked only 80,000 machine-hours and incurred $168,000 of manufacturing overhead costs. Compute the amount of underapplied or overapplied overhead for the year.

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The following information is provided in the 2011 annual report to shareholders of paris-perfume.com

The following information is provided in the 2011 annual report to shareholders of paris-perfume.com:

December 31, 2011 December 31, 2010
Accounts receivable ??? $100 million
Inventory $70 million $30 million
Other assets ??? $170 million
Total assets ??? $300 million

Total liabilities ??? $100 million
Total stockholders’ equity ??? $200 million

For the year ended Dec. 31, 2011
Net sales ???
Cost of goods sold ???
Net income $40 million
Return on assets 10%
Receivables turnover 8.0
Inventory turnover 12.0
Asset turnover 2.5
Return on stockholders’ equity 20%
Profit margin on sales 4%

Required: Compute the missing amount in the paris-perfume.com financial statement information, indicated by ??? in the table above.

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Stock A has a beta of 1.56 and has the same reward-to-risk ratio as stock B

Stock A has a beta of 1.56 and has the same reward-to-risk ratio as stock B. Stock B has a beta of 0.86 and an expected return of 13.57 percent. What is the expected return (in percents) on stock A if the risk-free rate is 4.31 percent?

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Talbot Industries is considering launching a new product

Talbot Industries is considering launching a new product. The new manufacturing equipment will cost $17 million, and production and sales will require an initial $5 million investment in net operating working capital. The company’s tax rate is 40%.

a. What is the initial investment outlay?

b. The company spent and expensed $150,000 on research related to the new product last year. Would this change your answer? Explain.

c. Rather than build a new manufacturing facility, the company plans to install the equipment in a building it owns but is not now using. The building could be sold for $1.5 million after taxes and real estate commissions. How would this affect your answer?

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Lamar Lumber Company has sales of $8 million per year

Lamar Lumber Company has sales of $8 million per year, all on credit terms calling for payment within 30 days; and its accounts receivable are $1.2 million. Assume 365 days in year for your calculations.

What is Lamar’s DSO? Round your answer to two decimal places.
days

What would DSO be if all customers paid on time? Round your answer to two decimal places.
days

How much capital would be released if Lamar could take actions that led to on-time payments? Round your answer to the nearest cent

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Capello’s Deli traditionally pays an annual dividend of $1.61 per share (Answer Key)

Capello’s Deli traditionally pays an annual dividend of $1.61 per share. The firm is projecting dividends of $1.8 and $2.17 over the next two years, respectively. After that, the company expects to pay a constant dividend of $2.52 a share. What is the maximum amount you are willing to pay for one share of this stock if your required return is 10.75 percent?

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