Use the cost information Jennifer has assembled to construct a forecast of cost of goods sold and operating expenses for 2004 through 2009. Assume first that the Bernoulli will be introduced, with its new cost structure, one year from now, and then calculate a cost forecast assuming that the $18 million is not provided for development of the new product. 3. Using the information developed for Questions 1 and 2, develop a discounted cash flow analysis for the Bernoulli division for 2004 through 2009. Working's board has asked for net present value and internal rate of the return when making decisions in the past.
On December 20, 2010, Excello sold $1.2 million of equipment to Data Equipment Systems. Typically, this type of transaction would be recorded as a sale on the date of shipment. However, the customer requested that Excello hold on to the product until January 11, 2011, because Data Equipment lacked the warehouse capacity to hold the product until then. On December 30, Reed approaches the controller, Marty Fuller, to discuss the dilemma. Fuller explains the rules in accounting for sales where the goods are held for future delivery.
Find AASB 102, the accounting standard that deals with Inventories, and then answer Discussion Q1 from the textbook. • Exercises 6.10 and 6.11 are set to show you the similarities and differences between the Income Statements produced when a periodic or perpetual inventory system is used. Figure 6.11 on page 249 of the textbook may help you to complete these exercises. As an additional requirement, include the journal entries you would have used to close the accounts of Moree Retail Ltd and Narrabri Ltd when each inventory system is used. • Discussion Q 8 from the textbook.
ACCOUNTING CASES, RESEARCH, AND ANALYSIS GROUP ASSIGNEMNT #1 MEMORANDUM TO: Professor Siyi Li FROM: Group 5 DATE: October 3, 2013 SUBJECT: Performance Based Stock Compensation This memo is an analysis of the case in which the Company Sooner or Later Inc granted “at the money” performance based stock options and the fair value is not easily determinable. The grant-date fair value of each award is $9. With the revenue target factored into the fair value assessment the grant-date fair value is $6. Management believes it is probable the company will achieve cumulative revenue in excess of $10 million. General Priciple – Performance are only recorded when the target is proable to be acheived Sooner and Later Inc On January 1, 2006, Sooner or Later Inc. granted 1,000 “at-the-money” employee stock options (i.e., the exercise price was equal to the stock price on the grant date).
14-20 What tax years are available to corporations? How do the options differ from other forms of business organizations? Solution Upon establishing a new corporation, the corporation may choose either a calendar year or a fiscal year. They may choose either of the two regardless of the tax years of its owners which creates tax savings. This differs from other forms of business organizations, S corporations are required to use the calendar year unless they can establish a business purpose to use a fiscal year.
Taking the option to abandon into account, what is the project’s NPV? (d) What is the value of the option to abandon? Solution: (a) Using an initial cash flow of -2.1 million followed by 10 cash flows of 420,000 each and a discount rate of 16%, calculate NPV. You should get NPV = -$70,044.46. (b) Since the opportunity cost of continuing the project is 1.4 million and the project has 9 years left, use your calculator with n=9, R=16%, PV=−1.4 million and FV=0.
Lincoln Savings and Loan Association Term A1/Spring, 2014 January 9, 2014 Table of Contents Issues……………………………………….3 Facts……………..6 Analysis………………………………………….8 Conclusions……………………………………………………15. References……………………………………………………………attached The issues that will be expounded on for this case are as follows: 1. Describe the substance over form concept and why was Arthur Young criticized for not encouraging Lincoln Savings to apply it. Also what responsibilities do auditors have when clients violate this principle? 2.
c. Company personnel account for the sequence of shipping documents and verify that an entry for each shipment is included in the sales journal. This control relates most directly to the sales transaction-related audit objective of (1) occurrence. 14-22 ( Objectives 14-3, 14-4 ) For each of the following types of misstatements (parts a through d), select the control that should have prevented the misstatement: a. A manufacturing company received a substantial sales return in the last month of the year, but the credit memorandum for the return was not prepared until after the auditors had completed their testing. The returned merchandise was included in the physical inventory.
3) A company changes from straight-line to an accelerated method of calculating depreciation, which will be similar to the method used for tax purposes. The entry to record this change should include a A. credit to Accumulated Depreciation 4) Presenting consolidated financial statements this year when statements of individual companies were presented last year is an accounting change that should be reported by restating the financial statements of all prior periods presented. 13) If a short-term obligation is excluded from current liabilities because of refinancing, the footnote to the financial statements describing this event should include all of the following information EXCEPT: the number of financing institutions that refused to refinance the debt, if any 14) Stock dividends distributable should be classified on the balance sheet as an item of stockholders' equity. 15) Which of the following items is a current liability? A long-term debt maturing currently, which is to be paid with cash in a sinking fund b.
True B. False Question 33 of 50 1.0/ 1.0 Points If a client changes auditors, the new auditors may have to reissue the audit report for the previous year. A. True B. False Question 34 of 50 1.0/ 1.0 Points An Unbilled Services account can be used to capture services that are provided before and during the surgery that have not yet been billed.