8. Imagine a private company decides to sponsor an event in exchange for publicity. Give an example of when a sponsorship could have a negative result for the sponsoring company.

Answer:

Political events like a candidate rally are particularly tricky for companies, and sponsoring them could result in a lot of consumer backlash, specially from the people who are not affiliated to the sponsored politician or political party.

This is why many companies avoid political sponsorships or political statements, because politics is a very divisive issue, and while such an action could earn the company the loyal following of a few, it could also discourage a lot more people from ever buying their products.

Sharp Screen Films, Inc., is developing its annual financial statements at December 31, current year. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and income statement are summarized as follows:

Current Year Prior Year
Balance sheet at December 31
Cash $66,550 $65,500
Accounts receivable 18,150 24,750
Merchandise inventory 24,750 19,200
Property and equipment 212,250 152,600
Less Accumulated depreciation (61,500) (47,050)
$260,200 $215,000
Accounts payable $11,800 $21,900
Wages payable 4,500 5,100
Note payable, long-term 62,300 74,400
Contributed capital 102,000 67,000
Retained earnings 79,600 46,600
$260,200 $215,000
Income statement for current year
Sales $206,000
Cost of goods sold 103,000
Depredation expense 14,450
Other expenses 44,100
Net income $44,450

Additional Data:

a. Bought equipment for cash $59 650.
b. Paid $12,100 on the long-term note payable.
c. Issued new shares of stock for $35,000 cash.
d. Dividends of $11,450 were declared and paid.
e. Other expenses all relate to wages.
f. Accounts payable includes only inventory purchases made on credit.

Required:
Prepare the statement of cash flows using the indirect method for the year ended December 31, current year.

Baltimore Inc. reported pretax GAAP income of $45,000 in 2020. In analyzing differences between GAAP income and taxable income, the company determined that it had deducted $5,000 in nondeductible fines and added $2,800 in tax-exempt municipal interest revenue to GAAP income. The statutory tax rate is 25%. Determine the following:

a. Taxable income
b. Income tax payable
c. Income tax expense
d. Net income

Due to better internet job searching websites, the job finding rate increases in the recent years. In a survey studying the job finding rate in Jan 2019, 420 out of 10,000 unemployed workers report that they found jobs. In the same period of time, a similar survey studying employment status reports that 29 out of 10,000 employed workers left their jobs. What is the steady unemployment rate

Well-managed companies set aside money to pay for emergencies that inevitably arise in the course of doing business. A commercial solid-waste recycling and disposal company in Mexico City puts 0.5% of its after-tax income into such an account. (a) How much will the company have after 7 years if after-tax income averages $15.2 million and inflation and market interest rates are 5% per year and 9% per year, respectively

Game Theory and Strategic Choices -- End of Chapter Problem You have developed a new computer operating system and are considering whether you should enter the market and compete with Microsoft. Microsoft has the option of offering their operating system for a high price or a low price. Once Microsoft selects a price, you will decide whether you want to enter the market or not enter the market. If Microsoft charges a high price and you enter, Microsoft will earn $30 million and you will earn $10 million. If Microsoft charges a high price and you do not enter, Microsoft will earn $60 million and you will earn $0. If Microsoft charges a low price and you enter, Microsoft will earn $20 million and you will lose $5 million. If Microsoft charges a low price and you do not enter, Microsoft will earn $50 million and you will earn $0. Construct a payoff table and find the Nash equilibrium if you and Microsoft both make your decisions simultaneously.
In a simultaneous move game, Microsoft will and you will:___________

Following is information on two alternative investments being considered by Jolee Company. The company requires a 6% return from its investments. (PV of $1, FV of $1, PVA of $1, and FVA of $1). (Use appropriate factor(s) from the tables provided.)
Project A Project B
Initial investment $ (174,325 ) $ (152,960 )
Expected net cash flows in year:
1 41,000 44,000
2 60,000 53,000
3 72,295 68,000
4 87,400 81,000
5 59,000 30,000
For each alternative project compute the net present value.
Project A
Initial Investment $174,325
Chart values are based on:
i =
Year Cash inflow x Table factor = Present Value
1 =
2 =
3 =
4 =
5 =
Project B
Initial Investment $152,960
Year Cash inflow x Table factor = Present Value
1 =
2 =
3 =
4 =
5 =
For each alternative project compute the profitability index.
Choose Numerator: / Choose Denominator: = Profitability index
/ = Profitability index
Project A
Project B
2. Assume If the company can only select one project, which should it choose?
Project A or Project B

The management accountant for Giada's Book Store has prepared the following income statement for the most current year: Cookbook Travel Book Classics Total Sales $63,000 $179,000 $60,000 $302,000 Cost of goods sold 37,000 70,000 23,000 130,000 Contribution margin 26,000 109,000 37,000 172,000 Order and delivery processing 19,000 26,000 9,000 54,000 Rent (per sq. foot used) 3,000 3,000 3,000 9,000 Allocated corporate costs 10,000 10,000 10,000 30,000 Corporate profit $ (6,000) $70,000 $15,000 $79,000 If the cookbook product line had been discontinued prior to this year, the company would have reported ________. the same amount of corporate profits less corporate profits greater corporate profits resulting profits cannot be determined

Rabbit Foot Motors has been approached by a new customer with an offer to purchase 5,000 units of its hands-free, Wi-Fi-enabled automotive model—the SMAK—at a price of $18,000 per automobile. Rabbit Foot’s other sales would not be affected by this new customer offer. Rabbit Foot normally produces 100,000 units of its SMAK model per year but only plans to produce and sell 90,000 in the coming year. The normal sales price is $35,000 per SMAK. Unit cost information for the normal level of activity is as follows:

Fixed overhead will not be affected by whether or not the special order is accepted.

1. What are the relevant costs and benefits of the two alternatives (accept or reject the special order)?

a. Special order price, direct materials, direct labor, and variable overhead.
b. Special order price, direct materials, direct labor, variable overhead, and fixed overhead
c. Normal price, direct materials, direct labor, and variable overhead.
d. Normal price, direct materials, direct labor, variable overhead, and fixed overhead.

2. By how much will operating income increase or decrease if the order is accepted?
a. increase by $_______
b. decrease by $_________

Wesley, who is single, listed his personal residence with a real estate agent on March 3 of the current year at a price of $390,000. He rejected several offers in the $350,000 range during the summer. Finally, on August 16, he and the purchaser signed a contract to sell for $363,000. The sale (i.e., closing) took place on September 7. The closing statement showed the following disbursements:

Real estate agent's commission $21,780
Appraisal fee 600
Exterminator's certificate 300
Recording fees 800
Mortgage to First Bank 305,000
Cash to seller 34,520

Wesley's adjusted basis for the house is $200,000. He owned and occupied the house for seven years. On October 1, 2017, Wesley purchases another residence for $325,000.
a. Wesley's recognized gain on the sale is __________
b. Wesley's adjusted basis for the new residence is ___________
c. Assume instead that the selling price is $800,000.
Wesley's recognized gain is _____________, and his adjusted basis for the new residence is __________

Which of these investments may be long term? Choose four answers.
savings accounts
mutual funds
bonds
retirement funds
commodities

The information in the table is from the statement of cash flows for a company at four different points in time (M, N, O, and P). Negative values are presented in parentheses.
For each point in time, state whether the company is most likely in the introductory phase, growth phase, maturity phase, or decline phase.
Point in Time
M N O P
Net cash provided by
operating activities $(60,000) $30,000 $120,000 $(10,000)
Cash provided by
investing activities (100,000) 25,000 30,000 (40,000)
Cash provided by
financing activities 70,000 (90,000) (50,000) 120,000
Net income (38,000) 10,000 100,000 (5,000)

Lunar coast Incorporated issued BBB bonds two years ago that provided a yield to maturity of 12.5
percent. Long-term risk-free government bonds were yielding 8.5 percent at that time. The current
risk premium on BBB bonds versus government bonds is half of what it was two years ago. If the riskfree long-term government bonds are currently yielding 7.8 percent, then at what rate should Lunar
coast expect to issue new bonds

The excess return is computed by ________ the average return for the investment. Group of answer choices subtracting the inflation rate from adding the inflation rate to subtracting the average return on the U.S. Treasury bill from adding the average return on the U.S. Treasury bill to subtracting the average return on long-term government bonds from

When the Federal Reserve decreases bank's reserves through an open-market operation: ____________

a. deposits increase, currency in circulation increases, and the monetary base remains the same.
b. the monetary base decreases, the money multiplier decreases, and the money supply increases.
c. loans increase, the federal funds rate rises, and the discount rate rises.
d. the monetary base decreases, loans decrease, and the money supply decreases.

The shadow banking system refers to:______.
a. Non-bank financial firms that acted as banks by borrowing and lending of U.S. Treasury bills in an effort to make a profit.
b. Non-bank financial firms that acted as banks by borrowing and lending in an effort to make a profit.
c. Non-bank financial firms that acted as stock brokers by buying and selling stocks in an effort to make a profit.
d. Non-bank financial firms that provide profit advice to hedge fund managers.

Acort Industries owns assets that will have a 75% probability of having a market value of $52 million in one year. There is a 25% chance that the assets will be worth only $22 million. The current risk-free rate is 5%, and Acort's assets have a cost of capital of 10%. a) If Acort is unlevered, what is the current market value of its equity? b) Suppose instead that Acort has debt with a face value of $18 million due in one year. According to MM (i.e. perfect market), what is the value of Acort's equity in this case? c) What is the expected return of Acort's equity without leverage? What is the expected return of Acort's equity with leverage? d) What is the lowest possible realized return of Acort's equity with and without leverage?

When a company uses a
allocation rate there is only one base for allocating all overhead costs to products or other cost objects.

Are female expatriates different?.​

During the current month, Tomlin Company incurs the following manufacturing costs.
(a) Purchased raw materials of $16,940 on account.
(b) Incurred factory labor of $38,528. Of that amount, $32,281 relates to wages payable and $6,247 relates to payroll taxes payable.
(c) Factory utilities of $3,108 are payable, prepaid factory property taxes of $2,008 have expired, and depreciation on the factory building is $8,322.
Prepare journal entries for each type of manufacturing cost. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
No. Account Titles and Explanation Debit Credit
(a)
(b)
(c)

Burcham Corporation reported pretax book income of $600,000. Tax depreciation exceeded book depreciation by $400,000. In addition, the company received $300,000 of tax-exempt municipal bond interest. The company's prior-year tax return showed taxable income of $50,000. Compute the company's book equivalent of taxable income. - Use this number to compute the company's total income tax provision or benefit, assuming a tax rate of 34%.

Andrews Company manufactures a line of office chairs. Each chair takes $18 of direct materials and uses 1.9 direct labor hours at $18 per direct labor hour. The variable overhead rate is $1.00 per direct labor hour, and the fixed overhead rate is $1.50 per direct labor hour. Andrews expects to have 640 chairs in ending inventory. There is no beginning inventory of office chairs.
Prepare a cost of goods sold budget for Andrews Company.

Brushy Mountain Mining Company's ore reserves are being depleted, so its sales are falling. Also, its pit is getting deeper each year, so its costs are rising. As a result, the company's earnings and dividends are declining at the constant rate of 6% per year. What is the value of Brushy Mountain's stock (in dollars) if the company is expected to pay $4.40/share in dividend at t

Aldo Industries, Inc. has two service departments (Human Resources and Building Maintenance) and two production departments (Machining and Assembly). The company allocates Building Maintenance cost on the basis of square footage and believes that Building Maintenance provides more service than Human Resources. The square footage occupied by each department follows.

Human Resources 6,000
Building Maintenance 13,000
Machining 1 8,000
Assembly 26,000

Assuming use of the step-down method, over how many square feet would the Building Maintenance cost be allocated (i.e., spread)?

Bismith Company reported: Actual fixed overhead Fixed manufacturing overhead spending variance Fixed manufacturing production-volume variance $700,000 $40,000 unfavorable $30,000 unfavorable
To record the write-off of these variances at the end of the accounting period, Bismith would
A. credit Fixed Manufacturing Production-Volume Variance for $30,000
B. debit Fixed Manufacturing Control for $700,000
C. credit Fixed Manufacturing Overhead Allocated for $700,000
D. debit Fixed Manufacturing Overhead Spending Variance for $40,000

Computing and Recording Interest Capitalization Bullock Company is constructing a building for its own use and has been capitalizing interest based on average expenditures on a quarterly basis since the project began last year. The following expenditures are made during the first quarter: January 1, $2,520,000; February 1, $2,295,000; and March 31, $3,285,000. Bullock had the following debts outstanding during this quarter. Debt Amount Note payable, 10%, incurred specifically to finance construction $1,440,000 Short-term note payable, 15% 2,250,000 Mortgage note payable, 8% 1,080,000 Answer the following questions, round your answers to the nearest whole number.
a. Compute interest to be capitalized and interest to be expensed for this first quarter.
Amount of interest to be capitalized Answer 0
Amount of interest to expense Answer 0
b. Prepare the entry to record the construction expenditures and interest.
Note: Record the debit accounts in alphabetical order using the first letter of the account name
. Account Name Dr.
Cr.

Sheffield Inc. manufactures two products: car wheels and truck wheels. To determine the amount of overhead to assign to each product line, the controller, Robert Hermann, has developed the following information.

Car Truck
Estimated wheels produced 36,000 11,000
Direct labor hours per wheel 1 3

Total estimated overhead costs for the two product lines are $731,400.

Required:
Calculate overhead rate.

Last year, Pastis Productions reported $100,000 in sales and $40,000 in cost of goods sold. The company estimates it would have doubled its sales and cost of goods sold had it allowed customers to buy on credit, but it also would have incurred $50,000 in additional expenses relating to wages, bad debts, and interest. Using these estimates, calculate the amount by which Income from Operations would increase (decrease).

Recently, some college alumni started a moving service for students living on campus. They have 3 employees and are debating hiring one more. The hourly wage for an employee is $30 per hour. An average moving job takes 4 hours. The company currently does 3 moving jobs per week, but with one more employee, the company could manage 5 jobs per week. The company charges $100 for a moving job.
Instructions:
Round your answers to the nearest whole number.
a. The new employee's marginal product of labor is ______.
b. The value of that merginal product is ______.
c. The moving service should moving jobs ______- hire another worker.

Bonita, Inc. uses activity-based costing as the basis for information to set prices for its six lines of seasonal coats.

Activity Cost Pools Estimated Overhead Estimated Use of Cost Drivers per Activity
Designing $452,795 11,900 designer hours
Sizing and cutting 4,231,150 157,000 machine hours
Stitching and trimming 1,501,000 79,000 labor hours
Wrapping and packing 327,050 31,000 finished units

Required:
Compute the activity-based overhead rates using the following budgeted data for each of the activity cost pools.

Robert Parish Corporation purchased a new machine for its assembly process on January 1, 2014. The cost of this machine was $315,900. The company estimated that the machine would have a salvage value of $15,900 at the end of its service life. Its life is estimated at 4 years, and its working hours are estimated at 40,000 hours. Year-end is December 31.
Instructions
Compute the depreciation expense under the following methods and complete the depreciation schedules below.
(a) Straight-line depreciation.
(b) Activity method for 2014 and 2015, assuming that machine usage was 15,000 hours for 2014; 11,710 hours for 2015; 12,150 hours for 2016 and 1,140 hours for 2017.
(c) Sum-of-the-years'-digits.
(d) Double-declining-balance.