ACCT 550 Week 7 Homework Chapter 11: E11-4, E11-9, E11-11, E11-17 E11-4 (Depreciation Computations—Five Methods) Wenner Furnace Corp. purchased machinery for $279,000 on May 1, 2012. It is estimated that it will have a useful life of 10 years, salvage value of $15,000, production of 240,000 units, and working hours of 25,000. During 2013, Wenner Corp. uses the machinery for 2,650 hours, and the machinery produces 25,500 units. Instructions From the information given, compute the depreciation charge for 2013 under each of the following methods. (Round to the nearest dollar.)
$24,000 increase D. $11,000 decrease 45. Hylow Corporation sells its product for $12 per unit. Next year, fixed expenses are expected to be $400,000 and variable expenses are expected to be $8 per unit. How many units must the company sell to generate net operating income of $80,000? A.
Accounts Payable Home depot reported its January 31, 2010 accounts payable at $4,863,000 and on January 30, 2011 the same was reported the following fiscal year at $4,717,000. There is a loss of ($-146,000) which possibly indicates the repayment of construction loans, now that Home Depot now operates over 2,000 retail locations with 1,976 in the USA, 179 stores in Canada, 85 stores in Mexico and 8 stores in China. (Home Depot, 2011). Total Current Liabilities The total current liabilities for the home depot organization in January 31, 2010 was reported at $10,363,000 and the same was reported the following fiscal year on in January 30, 2011 at $10,122,000, once again there is a decrease from 2010 to 2011. Two Largest Current Liabilities
Given the following cash flow stream at the end of each year: Year 1: $4,000 Year 2: $2,000 Year 3: 0 Year 4: -$1,000 Using a 10% discount rate, the present value of this cash flow stream is: a. $4,606 b. $3,415 c. $3,636 d. Other 8. Consider a 10-year annuity that promises to pay out $10,000 per year, given this is an ordinary annuity and that an investor can earn 10% on her money, the future value of this annuity, at the end of 10 years, would be: a. $175,312 b.
One of the items was sold during the year. Required: Based on this information, how much product cost would be allocated to cost of goods sold and ending inventory, assuming use of: a. LIFO b. FIFO c. Weighted average (total cost/total number) | |Cost of goods sold |Ending inventory | |LIFO |700 |800 | |FIFO |800 |700 | |Weighted Average |750 |750 | Problem 2. Teague Company purchased a new machine on January 1, 2012, at a cost of $150,000. The machine is expected to have an eight-year life and a $15,000 salvage value. The machine is expected to produce 675,000 finished products during its eight-year life.
$ | | Beginning inventory(jan1, year1) | 3,000,000 | 0.215 | 645,000 | | Purchases(year 2) | 7,250,000 | 0.175 | 1,268,750 | | Ending inventory(4qt,year2) | (4,250,000) | 0.16 | (680,000) | | Cost of goods sold | 6,000,000 | | 1,233,750 | | | | | | | 1-2-. Equipment | | | PLN | USD/PLN | U.S. $ | | Old Equipment - at January 1, Year 1 | 10,000,000 | 0.25 | 2,500,000 | | New Equipment-acquired January 3, Year 2 | 2,500,000 | 0.18 | 450,000 | | Total | 12,500,000 | | 2,950,000 | | | | | | | Acc. Depreciation -Old Equipment | 4,000,000 | 0.25 | 1,000,000 | | Acc. Depreciation -New Equipment | 250,000 | 0.18 | 45,000 | | Total | 4,250,000 | | 1,045,000 | | | | | | | Depreciation Expense - Old Equip. | 1,000,000 | 0.25 | 250,000 | | Depreciation Expense - New Equip.
– 133 2013 net sales / base year 2011 net sales = 800,000 / 600,000 = 1.33 1.33 x 100% = 133% 5. In analyzing financial statements, horizontal analysis is a- tool 6. Comparative balance sheets - are usually prepared for at least two years 7. Assume the following cost of goods sold data for a company: 2013 $1,500,000 2012 1,200,000 2011 1,000,000 If 2011 is the base year, what is the percentage increase in cost of goods sold from 2011 to 2013? – 50% = New - Old Old 100 8.
Its cost was $12,000, it has a ten-year life, and straight-line depreciation will be taken. SOLUTION: 1. Factory Overhead Cost Budget Percent of normal capacity 80% 90% 110% Number of units 4,000 4,500 5,500 Number of standard direct labor hours 16,000 18,000 22,000 Budgeted factory overhead: Fixed cost: Depreciation on building and machinery $ 1,200 $ 1,200 $ 1,200 Taxes on building and machinery 500 500 500 Insurance on building and machinery 500 500 500 Superintendent’s salary 1,500 1,500 1,500
What is the amount of its credit carryover and the last year to which the carryover could be used? Answer: $7,750 carried over to 2004 or 2025 4. Margolin Corporation has a regular taxable income of $120,000. It has a positive adjustment of $90,000, preference items of $50,000 and negative adjustments of $40,000. What is its alternative minimum tax?
A company issued a 30-year, $1,000 par value bond that has 10.85% coupon rate. Coupons are paid out semi-annually and the relevant interest rate is 9% compounded semiannually. a. (3 points) What was the value of this bond when it was issued? PMT = (.1085/2)*1000=54.25 N = 60 R = 0.09/2=0.045 (or 4.5 for calculator purposes) FV = 1000 PV =?