A company leases a machine on January 1, Year One for five years which call for annual payments of $4,000 for the first year and then $10,000 per year after that. The present value of these payments based on a reasonable interest rate of 10 percent is assumed to be $38,000. This lease
Its average sales per day were $ 668.49 during 2008 and its average collection period was 99 days. This represented an improvement from the average collection period of 105 days in 2005. 3. SciTronics apparently needed $ 29,000 of inventory at year-end 2008 to support its operations during 2008. Its activity during 2008 as measured by the cost of goods sold was $ 74,000.
To forecast 2010 sales based on 2009 sales, Equation 1 must be used: St = $500,000 + $1.10St–1 S2010 = $500,000 + $1.10($1,500,000) = $2,150,000 3. Equation 2 requires a forecast of gross domestic product. Equation 3 uses the actual gross domestic product for the past year and, therefore, is observable. 4. Advantages: Using the highest R2, the lowest
Because this property is normally sold, the lessee (Royal) must report it as a sales-type lease. 3. If the machine has an expected life of five years, then both parties must report the transaction as a capital lease. 4. If the lease contract gives Royal the option to buy the machine at the end of four years, then both parties must report the transaction as a capital lease 28.
AMBA 630 Week 2 1.) What 3 items of important information does the income statement reveal about the financial performance of the company over the last three years? $ in Millions(except for per share items) | 2011 | 2010 | 2009 | Revenue | 12,317 | 11,691 | 10,908 | Gross Profit | 1,602 | 1,475 | 1,235 | S. G. & A Expense | 752 | 780 | 722 | Operating Income | 508 | 695 | -274 | Net Income | 198 | 458 | -346 | Income Statement % | 2011 | 2010 | 2009 | Revenue Growth | 95 | 93 | | Gross Profit/Revenue | 13 | 13 | | S. G. & A Expense | 6 | 6 | 6 | Operating Income/Revenue | 4 | 6 | -3 | Net Income/Revenue | 2 | 4 | 3 | Revenue Growth: Should grow over time, & the Marriot
| 0.1525 | c. | 6.68% | Question 3 The life expectancy of Timely brand watches is normally distributed with a mean of four years and a standard deviation of eight months. a. | What is the probability that a randomly selected watch will be in working condition for more than five years? | b. | The company has a three-year warranty period on their watches.
2. Using a traditional DCF method we calculated that the per-film value of a sequel right to be a loss of $2.43 Million. To obtain this value we discounted the costs back three years to get our present value, and discounted inflows back four years. After calculating these two present values, we subtracted the costs from the inflows to reach our value. We could adjust the DCF to get a value closer to the true value of sequel rights by adjusting the WACC based on the success of the first film.
Once the new machinery is paid in full and Molly’s fixed costs return to $1,700 per month, her new monthly profit after 3 years will be $1,955. The answer was derived by using the following equation: 4,300 × (1.1 – $0.25) –1700 =
The Johnsons Calculate Their Income Taxes Several years have gone by since Harry and Belinda graduated from college and started their working careers. They both earn good salaries. They believe that they are paying too much in federal income taxes. The Johnsons’ total income last year included Harry’s salary of $63,000 and Belinda’s salary of $84,000. She contributed $3,000 to her 401(k) for retirement.
What specific mistakes (apart from failure to notice “red flags”) did the auditor make? For each mistake, describe what the auditor should have done. If you were the Managing Partner for the CPA firm and had full knowledge of all the facts and events in the case, what changes in policy or procedures would you implement to make sure this audit failure does not occur in the future? The first mistake that the auditors made involved Mr. George Greenspan during the 1986 audit. This was the first audit that ZZZZ Best had as a public company and the mistake involved the inspection of the insurance restoration sites.