Bridge Benefit Cost Benefit-Cost Benefit/Cost

Bridge Benefit Cost Benefit-Cost Benefit/Cost

1 80 40 40 2

2 60 20 40 3

3 60 40 20 1.5

4 20 40 -20 .5

5 30 20 10 1.5

6 30 40 -10 .75

What is optimal budget and which bridges should be built?

If budget is limited to 70 which projects should be undertaken?
 

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4-25 Ratio analysis the Corrigan Corporation’s 2010 and 2011 financial statements follow, along with some industry average ratios

4-25 Ratio analysis the Corrigan Corporation’s 2010 and 2011 financial statements follow, along with some industry average ratios.

a. Assess Corrigan’s liquidity position, and determine how it compares with peers and how the liquidity position has changed over time.

b. Assess Corrigan’ asset management position, and determine how it compares with peers and how its asset management efficiency has changed over time.

c. Assess Corrigan’s debt management position, and determine hoe it compares with peers and how its debt management has changed over time.  

d. Assess Corrigan’s profitability ratios, and determine how they compare with peers and how the profitability position has changed over time.

e. Assess Corrigan’s market value ratios, and determine hoe their valuation compares with peers and how it has changed over time.

f. Calculate Corrigan’s ROE, as well as the industry averages, ROE, using the extended pare with the industry average numbers?

g. What do you thing would happen to its ratios if the company initiated cost-cutting measures that allowed it to hold lower levels of inventory and substantially decreased the cost of goods sold? No calculations are necessary. Think about which ratios would be affected by changes in these two accounts.

Corrigan Corporation: Balance Sheets as of December 31

                                          2005              2004

Cash                                  72,000           65,000 Accounts receivable           439,000         328,000 Inventories                         894,000         813,000 Total current assets            1,405,000      1,206,000 Land and building              238,000          271,000 Machinery                         132,000         133,000 Other fixed assets              61,000           57,000 Total assets                       1,836,000       1,667,000 Accounts and notes payable 432,000       409,000 Accrued liabilities              170,000         162,000 Total current liabilities        602,000         571,500 Long –term debt               404,290          258,898 Common stock                 575,000          575,000 Retained earnings              254,710          261,602 Total liabilities and equity  1,836,000       1,667,000

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1)Recievables - bad debts At january 1 2007 the credit balance in the Allowance

Recievables - bad debts

At january 1 2007 the credit balance in the Allowance for Doubtful accounts of the master company was $ 400,000.for 2007 the provision for doubtful accounts is based on a percentage of net sales.Net sales for 2007 were $50,000.Based on the latest available facts,the 2007 provision for doubtful accounts is estimated to be 0 .7 % of net sales.During 2007 uncollectible receivables amounting to $ 410,000 were written off against the allowance for doubtful accounts.

Recquired:

prepare a schedule computing the balance in master's Allowance for doubtful accounts at december 31,2007. show supporting computations in good form.

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Springfield Manufacturing produces electronic storage devices

Springfield Manufacturing produces electronic storage devices, and uses the following three-part classification for its manufacturing costs: direct materials, direct manufacturing labor, and indirect manufacturing costs. Total indirect manufacturing costs for January were $300 million, and were allocated to each product on the basis of direct manufacturing labor costs of each line. Summary data (in millions) for January for the most popular electronic storage device, the Big Bertha, was:

 

Direct materials costs $9,000,000

Direct manufacturing labor costs $3,000,000

Indirect manufacturing costs $8,500,000

Units produced 40,000

Required:

A. Compute the manufacturing cost per unit for each product produced in January.

B. Suppose production will be reduced to 30,000 units in February. Speculate as to whether the unit costs in February will most likely be higher or lower than unit costs in January; it is not necessary to calculate the exact February unit cost. Briefly explain your reasoning.

 

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Springfield Manufacturing produces electronic storage devices

Springfield Manufacturing produces electronic storage devices, and uses the following three-part classification for its manufacturing costs: direct materials, direct manufacturing labor, and indirect manufacturing costs. Total indirect manufacturing costs for January were $300 million, and were allocated to each product on the basis of direct manufacturing labor costs of each line. Summary data (in millions) for January for the most popular electronic storage device, the Big Bertha, was:

Big Bertha

Direct materials costs $9,000,000

Direct manufacturing labor costs $3,000,000

Indirect manufacturing costs $8,500,000

Units produced 40,000

Required:

A. Compute the manufacturing cost per unit for each product produced in January.

B. Suppose production will be reduced to 30,000 units in February. Speculate as to whether the unit costs in February will most likely be higher or lower than unit costs in January; it is not necessary to calculate the exact February unit cost. Briefly explain your reasoning.

 

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The G. Wolf Corporation is examining two capital-budgeting

(Risk-adjusted discount rates and risk classes)

The G. Wolf Corporation is examining two capital-budgeting projects with five year lives. The first, project A, is a replacement project; the second, project B, is a project unrelated to current operations. The G. Wolfe Corporation uses the risk-adjusted discount rate method and groups according to purpose and then uses a required rate of return or discount rate that has been pre-assigned projects to that purpose or risk class.

The expected cash flows for these projects are as follows:

Project A Project B

Initial investment Cash Flow $250,000 $400,000

Year 1 $30,000 135,000

Year 2 40,000 135,000

Year 3 50,000 135,000

Year 4 90,000 135,000

Year 5 130,000 135,000

The purpose or risk classes and pre-assigned required rates of return are as follows.

Purpose Required Rate of Return

Replacement decision 12%

Modification or expansion of existing product line 15

Project unrelated to current operations 18

Research and development operations 20

Determiner the project's risk-adjusted net present value.

Calculation of Risk adjusted net present value:

 

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Coach Bjourn Toulouse led the Big Red Herrings to several disappointing football seasons

Operations Management Problems 1 & 5

1. Coach Bjourn Toulouse led the Big Red Herrings to several disappointing football seasons. Only better recruiting will return the Big Red Herrings to winning form. Because of the current state of the program, Boehring University fans are unlikely to support increases in the $192 season ticket price. Improved recruitment will increase overhead costs to $30,000 per class section from the current $25,000 per class section. The university’s budget plan is to cover recruitment costs by increasing the average class size to 75 students. Labor costs will increase to $6,500 per three-credit course. Material costs are about $25 per student for each three-credit course. Tuition will be $200 per semester credit, which is matched by state support of $100 per semester credit.

a. What is the productivity ratio? Compared to the result obtained in Example Solution, did productivity increase or decrease for the course process?

b. If instructors work an average of 20 hours per week for 16 weeks for each three-credit class of 75 students, what is the labor productivity ratio?

5. The Big Black Bird Company (BBBC) has a large order for special plastic-lined military uniforms to be used in an urgent military operation. Working the normal two shifts of 40 hours, the BBBC production process usually produces 2,500 uniforms per week at a standard cost of $120 each. Seventy employees work the first shift and 30 the second. The contract price is $200 per uniform. Because of the urgent need, BBBC is authorized to use around the-clock production, six days per week. When each of the two shifts works 72 hours per week, production increases to 4,000 uniforms per week but at a cost of $144 each.

a. Did the productivity ratio increase, decrease, or remain the same? If it changed, by what percentage did it change?

b. Did the labor productivity ratio increase, decrease, or remain the same? If it changed, by what percentage did it change?

c. Did weekly profits increase, decrease, or remain the same?

 

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Southwest Airlines offers four flights per weekday from Cleveland

Southwest Airlines offers four flights per weekday from Cleveland, Ohio, to Tucson, Arizona. Adding a fifth flight per weekday would cost $15,000 per flight, or $110 per available seat. Calculate the incremental costs borne by Southwest following a decision to go ahead with a fifth flight per day for a minimal 60-flight trial period. What is the marginal cost? In this case, is incremental cost or marginal cost relevant for decision-making purposes?

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Xacc 280 appendix d - Masasi Company, Inc.

XACC 280 Appendix D Xacc 280 appendix_d

Axia College Material Appendix D Xacc 280 appendix_d

Use this Trial Balance template to prepare an adjusted trial balance for Masasi Company, Inc. at June 30, 2008. You can place summation formulas at the end of the Debit and Credit columns to compute debit and credit totals. Otherwise, you can compute totals using a calculator, then enter totals directly.

 

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H55 Company sells two products, beer and wine

 

H55 Company sells two products, beer and wine. Beer has a 10 percent profit margin and wine has a 12 percent profit margin. Beer has a 27 percent contribution margin and wine has a 25 percent contribution margin. If other factors are equal, which product should H55 push to customers?

a. Beer

b. Wine

c. Selling either results in the same additional income for the company

d. It should sell an equal quantity of both.

 

 

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12-4 The Campbell Company is evaluating the proposed

12-4 The Campbell Company is evaluating the proposed acquisition of a new milling machine. The machine's base price is $108,000, and it would cost another $12,500 to modify it for special use. The machine falls into the MACRS 3- year, and it would be sold after 3 years for $65,000. The machine would require an increase in net working capital (inventory) of $5,500. The milling machine would have no effect on revenues, but it is expected to save the firm $44,000 per year in before tax operating costs, mainly labor. Campbell's marginal tax rate is 35%.

a) What is the net cost of the machine for capital budgeting purposes? (That is, what is the year 0 net cash flow?)

b) What are the net operating cash flows in Years 1,2, and 3?

c) What is the additional Year 3 cash flow (that is, the after-tax salvage and the return of working capital)?

d) If the project's cost of capital is 12%, should the machine be purchased?

 

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A4. (Investment criteria) An investment of $100 returns

Chapter 9 A4. (Investment criteria) An investment of $100 returns exactly $100 in one year. The cost of capital is 10%. a. What are the payback, NPV, and IRR for this investment? b. Is this a profitable investment?

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On January 1, 2008, the ledger of Mane Company contains the following liability accounts.

Prepare current liability entries, adjusting entries, and current liabilities section.

On January 1, 2008, the ledger of Mane Company contains the following liability accounts.

During January the following selected transactions occurred.

Jan 5 sold merchandise for cash totaling $22,680, which includes 8% sales taxes.

12 Provided services for customers who had made advance payments of $10,000. (Credit Service Revenue)

14 Paid state revenue department for sales taxes collected in December 2007($7,700).

20 Sold 800 units of a new product on credit at $50 per unit, plus 8% sales tax. This new product is subject to a 1-year warranty.

21 Borrowed $18,000 from UCLA Bank on a 3-month, 8%, $18,000 note.

25 Sold merchandise for cash totaling $12,420, which includes 8% sales taxes.

Instructions

(a) journalize the January transactions.

(b) Journalize the adjusting entries at January 31 for (1) the outstanding notes payable, and (2) estimated warranty liability, assuming warranty costs are expected to equal 7% of sales of the new product(Hint: Use on third of a month for the UCLA Bank note.)

(c) Prepare the current liabilities section of the balance sheet at January 31, 2008. assume no change in accounts payable.

 

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The adjusted trial balance columns of the worksheet for Porter Company are as follows

P4-2A The adjusted trial balance columns of the worksheet for Porter Company are as follows. PORTER COMPANY Worksheet For the Year Ended December 31, 2008

Adjusted Account Trial Balance No. Account Titles Dr. Cr. 101 Cash 18,800 112 Accounts Receivable 16,200 126 Supplies 2,300 Prepare worksheet, financial statements, and adjusting and closing entries. (SO 1, 2, 6) (a) Adjusted trial balance $57,800 (b) Net income $6,680 Total assets $48,730 Account Trial Balance No. Account Titles Dr. Cr. 130 Prepaid Insurance 4,400 151 Office Equipment 44,000 152 Accumulated Depreciation—Office Equipment 20,000 200 Notes Payable 20,000 201 Accounts Payable 8,000 212 Salaries Payable 2,600 230 Interest Payable 1,000 311 Common Stock 30,000 320 Retained Earnings 6,000 332 Dividends 12,000 400 Service Revenue 77,800 610 Advertising Expense 12,000 631 Supplies Expense 3,700 711 Depreciation Expense 8,000 722 Insurance Expense 4,000 726 Salaries Expense 39,000 905 Interest Expense 1,000 Totals 165,400 165,400

Instructions

1. Complete the worksheet by extending the balances to the financial statement columns.

2. Prepare an income statement, a retained earnings statement, and a classified balance sheet. $10,000 of the notes payable become due in 2009. No additional issuance of common stock occurred during 2008.

3. Prepare the closing entries. Use J14 for the journal page.

4. Post the closing entries. Use the three-column form of account. Income Summary is account No. 350.

5. Prepare a post-closing trial balance.

TUTORIAL PREVIEW

Porter Company
Worksheet (Partial)
For the Year Ended December 31, 2008
		Adjusted
Account		Trial Balance		Income Statement		Balance Sheet
No.	Titles	Dr.	Cr.	Dr.	Cr.	Dr.	Cr.
101	Cash	18,800				18,800
112	Accounts Receivable	16,200				16,200
126	Supplies	2,300				2,300

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After a protracted legal case, Joe won a settlement that

 

After a protracted legal case, Joe won a settlement that will pay him $11,000 each year for the next ten years. If the market interest rates are currently 5%, exactly how much should the court invest today, assuming end of year payments, so there will be nothing left in the account after the final payment is made?

Mary just deposited $33,000 in an account paying 7% interest. She plans to leave the money in this account for eight years. How much will she have in the account at the end of the seventh year?

Mary and Joe would like to save up $10,000 by the end of three years from now to buy new furniture for their home. They currently have $1500 in a savings account set aside for the furniture. They would like to make equal year end deposits to this savings account to pay for the furniture when they purchase it three years from now. Assuming that this account pays 6% interest, how much should the year end payments be?

Show all work for each assignment and explain each step carefully.


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ACC/280 P4-1A Thomas Magnum began operations as a private investigator on January 1, 2008.

ACC/280 P4-1A Thomas Magnum began operations as a private investigator on January 1, 2008. The trial balance columns of the worksheet for Thomas Magnum, P.I. at March 31 are as follows.

THOMAS MAGNUM, P.I., INC.
Worksheet For the Quarter Ended March 31, 2008
Trial Balance
                 
Account Titles Dr. Cr. Cash 11,400 Accounts Receivable 5,620 Supplies 1,050 Prepaid Insurance 2,400 Equipment 30,000 Notes Payable 10,000 Accounts Payable 12,350 Common Stock 20,000 Dividends 600 Service Revenue 13,620 Salaries Expense 2,200 Travel Expense 1,300 Rent Expense 1,200 Miscellaneous Expense 200 55,970 55,970

Other data:
1. Supplies on hand total $380. 2. Depreciation is $1,000 per quarter. 3. Interest accrued on 6-month note payable, issued January 1, $300. 4. Insurance expires at the rate of $200 per month. 5. Services provided but unbilled at March 31 total $530.

Instructions
(a) Journalize the adjusting entries from the adjustments columns of the worksheet.

(b) Prepare an income statement and a retained earnings statement for the quarter and a classified balance sheet at March 31. No additional common stock was issued during the quarter ended March 31, 2008.

(c) Journalize the adjusting entries from the adjustments columns of the worksheet.

(d) Journalize the closing entries from the financial statement columns of the worksheet.

 

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P4-2A The adjusted trial balance columns of the worksheet for Porter Company are as follows. PORTER COMPANY

PORTER COMPANY - P4-2A The adjusted trial balance columns of the worksheet for Porter Company are as follows

Worksheet For the Year Ended December 31, 2008

Adjusted Account Trial Balance

No.      Account Titles             Dr.                   Cr.

101      Cash18,800

112      Accounts Receivable   16,200

126      Supplies 2,300

Adjusted Account Trial Balance

No. Account Titles       Dr.                   Cr.

130      Prepaid Insurance        4,400

151      Office Equipment        44,000

152      Accumulated Depreciation—Office Equipment 20,000

200      Notes Payable 20,000

201      Accounts Payable 8,000

212      Salaries Payable 2,600

230      Interest Payable 1,000

311      Common Stock 30,000

320      Retained Earnings 6,000

332      Dividends 12,000

400      Service Revenue 77,800

610      Advertising Expense 12,000

631      Supplies Expense 3,700

711      Depreciation Expense 8,000

722      Insurance Expense 4,000

726      Salaries Expense 39,000

905      Interest Expense 1,000

Totals   165,400           165,400

Instructions

(a) Complete the worksheet by extending the balances to the financial statement columns.

(b) Prepare an income statement, a retained earnings statement, and a classified balance sheet.

$10,000 of the notes payable become due in 2009. No additional issuance of common stock occurred during 2008.

(c) Prepare the closing entries. Use J14 for the journal page.

(d) Post the closing entries. Use the three-column form of account. Income Summary is account No. 350.

(e) Prepare a post-closing trial balance.

 

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P3-2A Neosho River Resort, Inc.

P3-2A Neosho River Resort, Inc. opened for business on June 1 with eight air-conditioned units. Its trial balance before adjustment on August 31 is as follows.

NEOSHO RIVER RESORT, INC.

Trial Balance August 31, 2008

Account Number &nb sp; Debit Credit  

101 &nbs p; Cash 19,600 126 &nbs p; Supplies 3,300 130 & nbsp; Prepaid Insurance 6,000 140 & nbsp; Land 25,000 143 Cottages 125,000 149 &nbs p; Furniture 26,000 201 ; Accounts Payable &nb sp; $ 6,500 208 &nb sp; Unearned Rent &nb sp; 7,400 275 ; Mortgage Payable &nb sp; 80,000 311 &nbs p; Common Stock 100,000 332 &n bsp; Dividends 5,000 429 & nbsp; Rent Revenue &n bsp; 80,000 622 &nb sp; Repair Expense 3,600 726 ; Salaries Expense 51,000 732 Utilities Expense 9,400 $273,900 $273,900

In addition to those accounts listed on the trial balance, the chart of accounts for Neosho River Resort also contains the following accounts and account numbers: No. 112 Accounts Receivable, No. 144 Accumulated Depreciation—Cottages, No. 150 Accumulated Depreciation—Furniture, No. 212 Salaries Payable,No. 230 Interest Payable,No. 320 Retained Earnings,No. 620 Depreciation Expense—Cottages, No. 621 Depreciation Expense—Furniture, No. 631 Supplies Expense, No. 718 Interest Expense, and No. 722 Insurance Expense.

Other data:

1. Insurance expires at the rate of $400 per month.

2. A count on August 31 shows $600 of supplies on hand.

3. Annual depreciation is $6,000 on cottages and $2,400 on furniture.

4. Unearned rent of $4,100 was earned prior to August 31.

5. Salaries of $400 were unpaid at August 31.

6. Rentals of $1,000 were due from tenants at August 31. (Use Accounts Receivable.)

7. The mortgage interest rate is 9% per year. (The mortgage was taken out on August 1.) Instructions

(a) Journalize the adjusting entries on August 31 for the 3-month period June 1–August 31.

(b) Prepare a ledger using the three-column form of account. Enter the trial balance amounts and post the adjusting entries. (Use J1 as the posting reference.)

(c) Prepare an adjusted trial balance on August 31.

(d) Prepare an income statement and a retained earnings statement for the 3 months ending August 31 and a balance sheet as of August 31.

 

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Calculate the future value of 1,535

1. Calculate the future value of 1,535 invested today for 8 years at 6 percent.

2. What is the total present value of the following cash stream, discounted at 8 percent?

Year                1       2      3       4      5

                       400   750  945   145  78

3. If you invested $2,000 per year into an IRA for 30 years and received 6 percent return each year, what would the account balance be in 30 years?

4. A friend gives you a proposition. If you give him 1,500 dollars today, he will guarantee your receive 12 percent compounded annually on your investment. How much money will you receive from him at the end of 5 years?

5. You want to buy a new Computer Aided Design (CAD) system for your business. The cost of the system is $150,000 and you expect to save over $40,000 per year in reduced labor costs. Please calculate the net present value of the CAD if your required return is 10 percent and the life of the system is expected to be 5 years.

SOLUTION PREVIEW

1.     Calculate the future value of 1,535 invested today for 8 years at 6 percent.

Rate =	6%
Nper =	8
PV =	-1,535
FV =?

 

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XACC 280 Week 3 P3-1A MASASI COMPANY, INC. Trial Balance June 30, 2008 Account Number Debit Credit 101

Xacc 280 appendix d, Masasi Company Inc., at june 30

 

ACC 280 Week 3 checkpoint, updated

Acc280 checkpoint assignment- Adjusting Entries, Posting, and Preparing an Adjusted Trial Balance.

Parts a, b, and c of P3-1A on pp. 128–129 of Financial Accounting.

Use the templates in Appendix D. Complete all three tabs

 

SOLUTION PREVIEW

Appendix D

Adjusting Entries, Posting, and Preparing an Adjusted Trial Balance

Adjusting Entries

Use this General Journal to record adjusting entries on June 30, 2008 for Masasi Company, Inc. The first few lines are completed for you.

			GENERAL JOURNAL			J3
DATE	ACCOUNT TITLE AND EXPLANATION			REF.	DEBIT	CREDIT
June 30	Supplies Expense			631	1,400
	Supplies    ($2000 - $6000)			126		1,400
30	Utilites Expense			732	150
	Utilites Payable			244		150
30	Insurance Expense			722	250

 

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