Reporting Intercorporate Interests (Equity vs Cost Method) 1. On January 1, 2007, Rotor Corporation acquired 30 percent of Stator Company’s Stock for $150,000. On the acquisition date, Stator reported Net assets of $450,000 valued at historical cost and %500,000 stated at fair Value. The difference was due to the increased value of buildings with a remaining life of 15 years. During 2007 and 2008 Stator reported Net Income of $25,000 and $15,000 and paid dividends $10,000 and $12,000, respectively.
They were given a 10% discount by the manufacturer. They paid $400 for shipping and sales tax of $3,000. Stine estimates that the machinery will have a useful life of 10 years and a residual value of $20,000. If Stine uses straight-line depreciation, annual depreciation will be • $3,760. • $4,072.
Both monies pooled together after taxes add together the sum of £1626.56. With outgoings at £1140 and £1625 pooled together there is a difference of £405 which split between the two girls would be a total of £202.50. Using the online household equivalence calculator this compensates Praveena’s loss of income by 37%. Case study 2 Casper is in the process of paying for his holiday which will cost him £2000, he is considering what to do? If Casper decided to take out a loan that charges 20% APR over one year for the amount of £2000 over 12 months he would expect to pay £183 per month for 12 months with interest of £205.
The pay date actually gets pushed up to 9/14/12 since 9/15/13 falls on a Saturday. Since this is a semi-monthly payroll consisting of 86.67 hours per period. Assuming that all the employee’s paperwork was complete on the first day of employment 9/7/13 such that it met the input cutoff, then this employee would be paid for 6 days, which is a total of 52 hours. (86.67*60%). 2.
UNIT 4 Exam Review 1) You have purchased $70,000 worth of goods. The dealer is giving you terms of 3/10, n/60. You were billed on March 15 and given a loan rate of 6.5%. If you take out a loan to take advantage of the discount, how much do you really save by getting the loan and taking advantage of the discount, but still paying interest? Answer: Amount of discount = 70,000 * .03 = $2100.
(five points) Question 2: Determine the total costs of direct materials for August purchases. (five points) Problem 2 - Russell Company has the following projected account balances for June 30, 20X2: Accounts payable | $40,000 | Sales | $800,000 | Accounts receivable | 100,000 | Capital stock | 400,000 | Depreciation, factory | 24,000 | Retained earnings | ? | Inventories (5/31 & 6/30) | 180,000 | Cash | 56,000 | Direct materials used | 200,000 | Equipment, net | 240,000 | Office salaries | 80,000 | Buildings, net | 400,000 | Insurance, factory | 4,000 | Utilities, factory | 16,000 | Plant wages | 140,000 | Selling expenses | 60,000 | Bonds payable | 160,000 | Maintenance, factory | 28,000 | Question 1: Calculate the budgeted net income for June 20X2. (five points) Question 2: Calculate the budgeted total assets as of June 30, 20X2. (five points) Problem 3 - Tylon's Hardware uses a flexible budget to develop planning information for its warehouse operations.
Question 1 In this question we will analyze what are the relevant cash flows associated with each project. First we will analyze the incremental costs for the Planet Karaoke Pub project which lasts for 4 years. We have up-front renovations costs that are between 770 000 and 1 000 000 Bahts which are the initial outlay for this project. We will now see the revenues associated with this project. We have a monthly renting fee of 170 000 for the first 2 years and then 178 500 monthly fee for the last 2 years.
The equipment was acquired on January 1. It had a $1,000 estimated salvage value and a three-year useful life. 7. Sold inventory to customers for $25,000 that had cost $14,000 to make. Required Explain how these events would affect the balance sheet, income statement, and statement of cash flows by recording them in a horizontal financial statements model as indicated here.
Moreover, the chamber divides its new customers into four “buckets” according to the size of the company. Average dues for customers increase from Bucket 1 to Bucket 4. Change of the Contract In March 2007, Heartland started using a new compensation contract. The old contract used an annual sales commission rate of 25% for sales up to $40,000 and then increased by 2% for each additional $10,000 of sales. Under this contract, Noah obtained a total salary of $58,777.80, including a sales commission of $23,777.80.
Currently, the price to rent one of these units is $5,000 per year, and 15 units are rented. Costs of capital and labor are the only significant explicit expenses. The labor and capital inputs can be varied daily. Bond used a $100,000 inheritance to start the business and is quite pleased that he has received several offers in the past month to sell the firm for $300,000. The firm’s accountant has prepared an income statement for 1998 that shows a profit of $15,000 after paying Bond a salary of $25,000 for the year.