#3.5 Brandywine Homecare Brandywine Homecare, a not-for-profit business, had revenues of $12 million in 2007. Expenses other than depreciation totaled 75 percent of revenues, and depreciation expense was $1.5 million. All revenues were collected in cash during the year and all expenses other than depreciation were paid in cash. A. Construct Brandywine’s 2007 income statement. Brandywine Homecare Income statement Month ending December 31, 2007 Revenue $12,000,000 Total revenue $12,000,000 Expenses: Depreciation $ 1,500,000 Other 12,000,000 x 75/100 = 9,000,000 Total expenses= Depreciation + Other expenses= 1,500,000+ 9,000,000= $10,500,000 Total revenue – total expenses = Net income or Profit - 12,000,000- 10,500,000= 1,500,000 B.
$24,000 B. $75,000 C. $99,000 D. $51,000 E. $80,000 Difficulty: Easy 3. On January 1, 2008, Pacer Company paid $1,920,000 for 60,000 shares of Lennon Co.'s voting common stock which represents a 45% investment. No allocation to goodwill or other specific account was made. Significant influence over Lennon was achieved by this acquisition.
Good Citizen, Inc. incurred their first loss during this fiscal year on both their financial statements and tax returns. Suppose there are no differences between the calculation of book income and taxable income. The net loss this year was $1,000,000, prior year's income was $12,000,000 and the applicable tax rate was 40%. What would the entry be if the government(s) allowed the Company to carry a tax loss back to prior tax years for a full refund of prior taxes paid? a. DR Deferred tax asset $400K, CR Tax benefit (provision) $400K b. DR Current tax receivable $400K, CR Tax benefit (provision) $400K c. DR Tax expense (provision) $400K, CR Current taxes payable $400K d. DR Tax expense (provision) $400K, CR Deferred tax liability $400K e. DR Current tax expense $400K, CR Deferred tax expense $400K 4.
(Points : 5) sales under $1,000,000 no accountants on staff insignificant receivables and payables all sales and purchases on account 5. (TCO D) Two companies report the same cost of goods available for sale, but each employs a different inventory costing method. If the price of goods has increased during the period, then the company using _____. (Points : 5) LIFO will have the highest ending inventory FIFO will have the highest cost of goods sold FIFO will have the highest ending inventory LIFO will have the lowest cost of goods sold 6. (TCOs A, E) Equipment with a cost of $192,000 has an estimated salvage value of $18,000 and an estimated life of 4 years or 12,000 hours.
(Hint: Assume that all expenses, except depreciation, were cash expenses.) What was the hospital's 2007 cash flow? 3.5 Brandywine Homecare, a not-for-profit business, had revenues of $12 million in 2007. Expenses other than depreciation totaled 75 percent of revenues, and depreciation expense was $1.5
Basic present value calculations Calculate the present value of the following cash flows, rounding to the nearest dollar: a. A single cash inflow of $12,000 in five years, discounted at a 12% rate of return. Present Value | Rate per period | 0.567 | Cash Inflow | 12000 | Present Value | 6804 | b. An annual receipt of $16,000 over the next 12 years, discounted at a 14% rate of return. Present Value | Rate per period | 5.66 | Cash Inflow | 16000 | Present Value | 90560 | c. A single receipt of $15,000 at the end of Year 1 followed by a single receipt of $10,000 at the end of Year 3.
Inventory per the books is $483,172. Your inventory turnover is one times per year and the industry standard is 1.5 times per year. Per our conversations over the year I have suggested that you should evaluate the inventory and those items that still have in inventory for more that 24 months should be either at a very little profit or at least at your cost. The sale of these items can then either reinvest into items that will turnover or to reduce debt. The accounts payable at the Fiscal Year End increased by almost 200%.
| On January 1, 2013, Pacer Company paid $1,920,000 for 60,000 shares of Lennon Co.'s voting common stock which represents a 45% investment. No allocation to goodwill or other specific account was made. Significant influence over Lennon was achieved by this acquisition. Lennon distributed a dividend of $2.50 per share during 2013 and reported net income of $670,000. What was the balance in the Investment in Lennon Co. account found in the financial records of Pacer as of December 31, 2013?
C. accounting profits produced. D. increase in total sales produced. 3. Assume your firm has an unused machine that originally cost $75,000, has a book value of $20,000, and is currently worth $25,000. Ignoring taxes, the correct opportunity cost for this machine in capital budgeting decisions is: A.
Chapter 20, Problem 1 Firm A has $10,000 in assets entirely financed with equity. Firm B also has $10,000 in assetsbut these assets are financed by $5,000 in debt (with a 10 percent rate of interest)and $5,000 in equity. Both firms sell 10,000 units of output at $2.50 per unit. The variable costs of production are $1, and fixed production costs are $12,000. (To ease the calculation, assume no income tax.)