Salazar Group,s 2005 and 2006 year- end balance sheet follow.

Salazar Group,s 2005 and 2006 year- end balance sheet follow.
1.How many common shares are outstanding on each cash dividend date?
2. What is the total dollar amount for each of the four cash dividends?
3. What is the amount of the capitalization of retained earnings for the stock dividend?
4. What is the per share cost of the treasury stock purchased?
5. How much net income did the company earn during year 2012

CLICK HERE FOR THE SOLUTION

P13-8A Razz Corporation’s common stock is currently selling on a stock exchange at $170 per share, and its current balance sheet shows the following stockholders’ equity section

Problem 13-8A Razz Corporation’s common stock is currently selling on a stock exchange at $170 per share, and its current balance sheet shows the following stockholders’ equity section

ANSWER KEY Problem 13-8A Computation of book values and dividend allocations C3 A2 P2

13. Accounting for Corporations

Larson−Wild−Chiappetta: Fundamental Accounting Principles, Seventeenth Edition 

Problem 13-8A Razz Corporation’s common stock is currently selling on a stock exchange at $170 per share, and its current balance sheet shows the following stockholders’ equity section

Preferred stock—5% cumulative, $___ par value, 1,000 shares

authorized, issued, and outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . .                     $100,000

Common stock—$___ par value, 4,000 shares authorized, issued,

and outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                       160,000

Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  300,000

Total stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                 $560,000

Required

1. What is the current market value (price) of this corporation’s common stock?

2. What are the par values of the corporation’s preferred stock and its common stock?

3. If no dividends are in arrears, what are the book values per share of the preferred stock and the common stock?

4. If two years’ preferred dividends are in arrears, what are the book values per share of the preferred stock and the common stock?

5. If two years’ preferred dividends are in arrears and the preferred stock is callable at $110 per share, what are the book values per share of the preferred stock and the common stock?

6. If two years’ preferred dividends are in arrears and the board of directors declares cash dividends of $20,000, what total amount will be paid to the preferred and to the common shareholders? What is the amount of dividends per share for the common stock?

Analysis Component

7. What are some factors that can contribute to a difference between the book value of common stock and its market value (price)?

Check (4) Book value of common, $112.50

(5) Book value of common, $110

(6) Dividends per common share, $1.25

SOLUTION PREVIEW

Problem 13-8A  

1.         Market price = $170 per share (current stock exchange price given)

2.         Computation of stock par values

            Preferred: Paid-in amount / Number of shares = $100,000 / 1,000 = $100

            Common: Paid-in amount / Number of shares = $160,000 / 4,000 = $40  

3.         Book values with no dividends in arrears

            Book value per preferred share           = par value (when not callable) = $100

Common stock
Total equity	$ 560,000

 

File name: P13-8A-Razz-Corporations.doc File type: application/msword Price: $6

P 18-1A The following costs result from the production and sale of 4,000 drum sets manufactured by Vince Drum Company for the year ended December 31, 2011

P18-1A The following costs result from the production and sale of 4,000 drum sets manufactured by Vince Drum Company for the year ended December 31, 2011

Problems 18-1AVince Drum Company

Financial & Managerial Accounting, Information for Decisions, 4^th ed., John J. Wild, Ken W. Shaw and Barbara Chiappetta

The following costs result from the production and sale of 4,000 drum sets manufactured by Vince Drum Company for the year ended December 31, 2011. The drum sets sell for $250 each. The company has a 25% income tax rate.

Variable production costs

            Plastic for casing……………………………………..$68,000

            Wages of assembly workers………………………….328,000

            Drum stands………………………………………….104,000

Variable sellings costs

            Sales commissions…………………………………….60,000

Fixed manufacturing costs

            Taxes on factory………………………………………10,000

            Factory maintenance…………………………………..20,000

Factory machinery depreciation                                  .  80,000. 

Fixed selling administrative costs 

            Lease of equipment for sales staff……………………  20,000

Accounting staff salaries……………………………….70,000

Administrative management salaries………………….150,000

                                                                                               

Required

1.   Prepare a contribution margin income statement for the company

2.   Compute its contribution margin and contribution margin ratio.

3.   Interpret the contribution margin ratio from part 2.

File name: P-18-1A-Vince-Drum-Company.doc File type: application/msword Price: $5

16-1A 16-3A Kazaam Company, a merchandiser, recently completed its calendar-year 2005 operations. For the year,

Problem 16-1A 16-3A Kazaam Company, a merchandiser, recently completed its calendar-year 2005 operations. For the year,
(1) all sales are credit sales,

(2) all credits to Accounts Receivable reflect cash receipts from customers,
(3) all purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash
payments for inventory, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses. KazaamÂ’s balance sheets and income statement follow:

KAZAAM COMPANY                                                                                           SOLUTION
Comparative Balance Sheets
December 31, 2005
2005 2004
Assets
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 53,875 $ 76,625
Accounts receivable . . . . . . . . . . . . . . . . . 65,000 49,625
Merchandise inventory . . . . . . . . . . . . . . . 273,750 252,500
Prepaid expenses . . . . . . . . . . . . . . . . . . . 5,375 6,250
Equipment . . . . . . . . . . . . . . . . . . . . . . . . 159,500 110,000
Accum. depreciation—Equipment . . . . . . . . (34,625) (44,000)
Total assets . . . . . . . . . . . . . . . . . . . . . . . $522,875 $451,000
Liabilities and Equity
Accounts payable . . . . . . . . . . . . . . . . . . . $ 88,125 $116,625
Short-term notes payable . . . . . . . . . . . . . 10,000 6,250
Long-term notes payable . . . . . . . . . . . . . 93,750 53,750
Common stock, $5 par value . . . . . . . . . . 168,750 156,250
Contributed capital in excess
of par, common stock . . . . . . . . . . . . . . 32,500 0
Retained earnings . . . . . . . . . . . . . . . . . . . 129,750 118,125
Total liabilities and equity . . . . . . . . . . . . . $522,875 $451,000

KAZAAM COMPANY
Income Statement
For Year Ended December 31, 2005
Sales . . . . . . . . . . . . . . . . . . . . . . . . . $496,250
Cost of goods sold . . . . . . . . . . . . . . 250,000
Gross profit . . . . . . . . . . . . . . . . . . . . 246,250
Operating expenses
Depreciation expense . . . . . . . . . . . $ 18,750
Other expenses . . . . . . . . . . . . . . . 136,500 155,250
Other gains (losses)
Loss on sale of equipment . . . . . . . 5,125
Income before taxes . . . . . . . . . . . . . . $ 85,875
Income taxes expense . . . . . . . . . . . . 12,125
Net income . . . . . . . . . . . . . . . . . . . . $ 73,750

Additional Information on Year 2005 Transactions
a. The loss on the cash sale of equipment is $5,125 (details in b).
b. Sold equipment costing $46,875, with accumulated depreciation of $28,125, for $13,625 cash.
c. Purchased equipment costing $96,375 by paying $25,000 cash and signing a long-term note payable
for the balance.
d. Borrowed $3,750 cash by signing a short-term note payable.
e. Paid $31,375 cash to reduce the long-term notes payable.
f. Issued 2,500 shares of common stock for $18 cash per share.
g. Declared and paid cash dividends of $62,125.

Required
1. Prepare a complete statement of cash flows; report its operating activities using the indirect method.
Disclose any noncash investing and financing activities in a note.
2. Analyze and discuss the statement of cash flows prepared in part 1, giving special attention to the wisdom of the cash dividend payment.

Refer to the information reported about Kazaam Company in Problem 16-1A.
Required

Prepare a complete statement of cash flows using a spreadsheet as in Exhibit 16A.1; report its operating activities using the indirect method. Identify the debits and credits in the Analysis of  hanges
columns with letters that correspond to the following list of transactions and events:

a. Net income is $73,750.
b. Accounts receivable increased.
c. Merchandise inventory increased.
d. Prepaid expenses decreased.
e. Accounts payable decreased.
f. Depreciation expense is $18,750.
g. Sold equipment costing $46,875, with accumulated depreciation of $28,125, for $13,625 cash. This yielded a loss of $5,125.
h. Purchased equipment costing $96,375 by paying $25,000 cash and (i.) by signing a long-term note payable for the balance.
j. Borrowed $3,750 cash by signing a short-term note payable.
k. Paid $31,375 cash to reduce the long-term notes payable.
l. Issued 2,500 shares of common stock for $18 cash per share.
m. Declared and paid cash dividends of $62,125.

                                                                                                  CLICK HERE FOR THE SOLUTION

The ledger of AISExperts Inc. showed the following balances after adjustment, but before closing, on December 31, 2007, the end of the current year

The ledger of AISExperts Inc. showed the following balances after adjustment, but before closing, on December 31, 2007, the end of the current year:

Accounts payable 79000

Accounts receivable 104000

Accumulated depreciation – equipment 28000

Depreciation expense 800

Interest revenue 1925

Cash 80500

Common stock (10,000 shares outstanding) 100000

Cost of merchandise sold 635550

Dividend 19100

Equipment 139450

General expenses 114250

Interest expense 5600

Merchandise inventory 154250

Prepaid insurance 11225

Retained earnings ?

Salaries Payable 14550

Sales 960250Sales 960250

The president of AISExperts Inc., has asked you to develop a flexible financial statement package (call the file yourlastnameyourfirstnameFinState07), using Excel that includes:

• a data entry sheet

• a trial balance,

• a single-step income statement,

• a multi-step income statement,

• a statement of retained earnings,

• a classified balance sheet, and

• a post-close trial balance (a trial balance with only accounts not “closed”)

Each statement must be on one sheet in the file and this file should allow the financial statements to be prepared quickly by entering account balances in the appropriate cells on the first sheet of the file (book) – data entry sheet.

Include percentages in the Income Statement (vertical analysis) i.e. gross profit percentage, % of selling expenses to sales, etc. (common sizing and vertical analysis are basically the same analysis techniques – every number in the multi-step income statement are divided by sales).

Use the financial information above as input for your statements. Only formulas/cell references should appear on all sheets except your data entry sheet (except titles and dates) – no hard coded numbers in the financial statements.

Your file must contain documentation with comments (Excel commands: INSERT, COMMENT). The comments should be included where you think explanation is required i.e. earnings per share on the bottom of the income statement should probably be explained or retained earnings might require some additional comments.

File name: The-ledger-of-AISExperts-Inc..xls File type: application/vnd.ms-excel Price: $10 

PR 13-2B Bobblehead Corporation produces and sells basketball jerseys. On July 1, 2008,

PR 13-2B Bobblehead Corporation produces and sells basketball jerseys. On July 1, 2008,

Financial and managerial accounting By Carl S. Warren, James M. Reeve

Bobblehead Corporation produces and sells basketball jerseys. On July 1, 2008, Bobblehead Corp. issued $16,000,000 of seven-year, 13% bonds at an effective interest rate of 10%. Interest on the bonds is payable semiannually on Dec. 31 and June 30. The fiscal year of the company is the calender year.

Instructions:
1. Journalize the entry to record the amount of the cash proceeds from the sale of the bonds.
2. Journalize the entries to record the following:
a. The first semiannual interest payment on Dec.31,2008 andthe amortization of the bond premium, using the straight-line method. (Round to the nearest dollar)
b. The interest payment on June 30, 2009, and the amortization of the bond premium, using the straight-line method. (Round to the nearest dollar)
3. Determine the total interest expense for 2008.
4. Will the bond proceeds always be greater than the face amount of the bonds when the contract rate is greater than the market rate of interest? Explain.

File name: PR-13-2B-Bobblehead-Corporation.doc File type: application/msword Price: $8

A company is considering a high-tech project lasting five years. The project requires $800,000 of initial

A company is considering a high-tech project lasting five years. The project requires $800,000 of initial investment and generates net cash flows of $200,000, $300,000, $300,000, $200,000, and $300,000 in years 1, 2, 3, 4, and 5, respectively. Therefore, the cash flows are as follows:

                    Year           Cash Flow

                      0            -800,000
                      1             200,000

                      2             300,000

                      3             300,000

                      4             200,000

                      5             300,000

The appropriate discount rate (or the cost of capital) is 10%.

1. If the company uses the NPV method, should the project be accepted? Why (or why not)?

2. If the company uses the IRR method, should the project be accepted? Why (or why not)?

3. The company’s maximum acceptable payback period is 3 years. If the company uses the payback period method, should the project be accepted? Why (or why not)?

4. Would you accept a project which requires $50,000 of initial investment and yields $10,000 every year infinitely? Why (or why not)? Assume that the discount rate (or the cost of capital) is 10%.

File name: A-company-is-considering-a-high-tech.doc File type: application/msword Price: $8

6-13 You have observed the following returns over time

6-13 You have observed the following returns over time:
Year Stock X Stock Y Market
2003 14% 13% 12%
2004 19% 7% 10%
2005 216% 25% 212%
2006 3% 1% 1%
2007 20% 11% 15%

Assume that the risk-free rate is 6% and the market risk premium is 5%.
a. What are the betas of Stocks X and Y?
b. What are the required rates of return for Stocks X and Y?
c. What is the required rate of return for a portfolio consisting of 80% of Stock X and 20% of Stock Y?
d. If Stock X’s expected return is 22%, is Stock X under- or over-valued?

SOLUTION PREVIEW

b.      What are the required rates of return for Stocks X and Y?

 

k _X = 6% + (5%)1.3471 = 12.7355%.

 

k _Y = 6% + (5%)0.6516 = 9.2540%.

File name: 6-13 You have observed.doc File type: . .doc  PRICE:$6 

Moon Valley Cabinets is approached by Ms. Luanne Birch, a new customer, to fulfill a large one-time-only special order for a product similar to one offered to regular customers. The following per unit data apply for sales to regular customers

Moon Valley Cabinets is approached by Ms. Luanne Birch, a new customer, to fulfill a large one-time-only special order for a product similar to one offered to regular customers. The following per unit data apply for sales to regular customers:
Direct materials $100
Direct labor 125                                                                            CLICK HERE FOR SOLUTION
Variable manufacturing support 60         
Fixed manufacturing support 75
Total manufacturing costs 360
Markup (60%) 216
Targeted selling price $576
Moon Valley Cabinets has excess capacity. Ms. Birch wants the cabinets in cherry rather than oak, so direct material costs will increase by $30 per unit.
Questions:
For Moon Valley Cabinets, what is the minimum acceptable price of this one-time-only special order? (7 points)
Other than price, what other items should Moon Valley Cabinets consider before accepting this one-time-only special order? (4 points)
How would the analysis differ if there was limited capacity? (4 points)

                                                                                                        CLICK HERE FOR THE SOLUTION

Indicate how each of the following would shift the (1) marginal cost curve, (2) average- variable cost curve, (3) average fixed cost curve, and (4) average- total cost curve of a manufacturing firm. In each case specify the direction of the shift.

Indicate how each of the following would shift the (1) marginal cost curve, (2) average- variable cost curve, (3) average fixed cost curve, and (4) average- total cost curve of a manufacturing firm. In each case specify the direction of the shift.

1. A reduction in business property taxes
2. An increase in the nominal wages of production workers.
3. A decrease in the price of electricity.
4. An increase in insurance rates on plant and equipment.
5. An increase in transportation costs.

File name: Indicate-how-each.doc File type: application/msword Price: $5

Business is going well for Park'N Fly, the company that operates remote parking lots near major airports. The board of directors of this family-owned company believes that Park'N fly could

Business is going well for Park'N Fly, the company that operates remote parking lots near major airports. The board of directors of this family-owned company believes that Park'N fly could earn an additional $1.5 million income before interest and taxes by expanding into new markets. However, the $5 million that the business needs for growth cannot be raised within the family. The directors, who strongly wish to retain family control of the company, must consider issuing securities to outsiders. They are considering three financing plans.                                                                                      CLICK HERE FOR SOLUTION

Plan A is to borrow at 6%. Plan B is to issue 100,000 shares of common stock. Plan C is to issue 100,000 shares of nonvoting $3.75 preferred stock ($3.75 is the annual dividend paid on each share of preferred stock). Park 'N Fly presently has net income of $2.5 million and 1 million shares of common stock outstanding. The company's income tax rate is 40%.

Required:

1- Prepare an analysis to determine which plan will result in the highest earnings per share of common stock.
2- Recommend one plan to the board of directors. Give your reasons.

                                                                                                         CLICK HERE FOR THE SOLUTION

Presented below is a schedule of property dispositions for Frank Thomas Co.

Presented below is a schedule of property dispositions for Frank Thomas Co.

Schedule of Property Dispositions
		Accumulated	Cash	Fair Market	Nature of
	Cost	Depreciation	Proceeds	Value	Disposition
Land	$40,000		$31,000	$31 ,000	Condemnation
Building	15,000	__	3,600	_	Demolition
Warehouse	70,000	$11,000	74,000	74,000	Destruction by fire
Machine	8,000	3,200	900	7,200	Trade-in
Furniture	10,000	7,850	—	3,100	Contribution
Automobile	8,000	3,460	2,960	2,960	Sale

February 15, a condemnation award was received as consideration for unimproved land held prima-as an investment, and on March 31, another parcel of unimproved land to be held as an investment is purchased at a cost of $35,000.

Building

- April 2, land and building were purchased at a total cost of $75,000, of which 20% was allocated to "--• building on the corporate books. The real estate was acquired with the intention of demolishing the . ;lding, and this was accomplished during the month of November. Cash proceeds received in November resent the net proceeds from demolition of the building.

Warehouse

3n June 30, the warehouse was destroyed by fire. The warehouse was purchased January 2, 2004, and :-.j depreciated $11,000. On December 27, the insurance proceeds and other funds were used to purchase placement warehouse at a cost of $90,000.

Machine

December 26, the machine was exchanged for another machine having a fair market value of $6,300 :-nd cash of $900 was received. (The exchange lacks commercial substance.)

Furniture

August 15, furniture was contributed to a qualified charitable organization. No other contributions - ere made or pledged during the year.

Automobile

November 3, the automobile was sold to Ozzie Guillen, a stockholder.

Instructions

Indicate how these items would be reported on the income statement of Frank Thomas Co. (AICPA adapted)


TUTORIAL PREVIEW

The following accounting treatment appears appropriate for these items:

Land— the loss on the condemnation of the land of $9,000 ($40,000 – $31,000) should be reported as an extraordinary item on the income statement.


File name: Frank Thomas Co.doc    File type:  .doc  PRICE: $10

Acme Dog Clinic is evaluating a project that costs $69,455 and has expected net cash inflows of $15,500 per year for 6 years.

Acme Dog Clinic is evaluating a project that costs $69,455 and has expected net cash inflows of $15,500 per year for 6 years.
The first inflow occurs one year after the cost outflow, and the project has a cost of capital of 11.8%.
1. What is the project’s payback?
2. What is the project’s NPV?
3. What is the project’s IRR?
4. is the project financially acceptable? Why or why not?

                                                                                                              CLICK HERE FOR THE SOLUTION

Baxter Products manufactures office furniture by using an assembly-line process. All direct aterials are introduced at the start of the process, and conversion cost is incurred evenly throughout manufacturing.

Baxter Products manufactures office furniture by using an assembly-line process. All direct aterials are introduced at the start of the process, and conversion cost is incurred evenly throughout manufacturing. An examination of the company's Work-in-Process account for August revealed the following selected information:

August 1 balance: 6000 units, 40% complete, cost $44,600*
Production started: 1,800 units
Direct materials used during August: $90,000
August conversion cost: $51,400

Production completed: 1,400 units

*Supplementary records disclosed direct material cost of $30,000 and conversion cost of $14,600.

Conversations with manufacturing personnel revealed that the ending work in process was 80% complete.

Required:
A. Determine the number of units in the August 31 work-in-process inventory.
B. Calculate the cost of goods completed diring August, and prepare the
appropriate journal entry to record completed production.
C. Determine the cost of the August 31 work-in-process inventory.

                                                                                                        CLICK HERE FOR THE SOLUTION

Nicholals Company manufactures TVs. Some of the company's data

Nicholals Company manufactures TVs.   Some of the company's data was misplaced.  

Use the following information to replace the lost data.

F-Favorable & U-Unfavorable

Analysis	Actual Results	Flexible Variances	Flexible Budget	Sales Volume Variances	Static Budget
Units Sold	112,500		112,500		103,125
Revenues	$42,080	$1,000(F)	(A)?	$1,400(U)	(B)?
Variable Costs	(C ?	$200(U)	$15,860	$2,340(F)	$18,200
Fixed Costs	$8,280	$860(F)	$9,140		$9,140
Operating Income	$17,740	(D)?	$16,080	(E)?	$15,140
NEED A through F

A.) What are the respective flexible-budget revenues for A?
B.) What are the static-budget revenues for B?
C.) What are the actual variable costs for C?
D.) What is the total flexible-budget variance for D?
E.) What is the total sales-volume variance for E?
F.) What is the total static-budget variance?


TUTORIAL PREVIEW

A.)  What are the respective flexible-budget revenues for A?

Flexible budget variance = Actual results – Flexible Budget amounts

1,000 (F) = 42,080 – Flexible Budget amounts

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