Adams Industries holds 55,000 shares of FedEx common stock, which is not a large enough ownership interest to allow Adams to exercise significant influence over FedEx. On December 31, 2021, and December 31, 2022, the market value of the stock is $98 and $112 per share, respectively. What is the appropriate reporting category for this investment and at what amount will it be reported in the 2022 balance sheet

Answers

Answer 1

Answer:

The explanation is given below:-

$6,160,000

Explanation:

Since owning shares is not a huge enough to exert significant control. So, strategy for reporting would be a fair value process.

According to the scenario the computation of amount reported in the 2022 balance sheet is shown below:-

Fair value through net income = Shares of FedEx common stock × Market value of the stock of 31 Dec 2022

= 55000 × $112

= $6,160,000

So, for computing the amount reported in the 2022 balance sheet we simply multiply the Shares of FedEx common stock with Market value of the stock of 31 Dec 2022.


Related Questions

Blossom Co. leased machinery from Young, Inc. on January 1, 2020. The lease term was for 8 years, with equal annual rental payments of $5,800 at the beginning of each year. In addition, the lease provides an option to purchase the machinery at the end of the lease term for $1,500, which Blossom is reasonably certain it will exercise as it believes the fair value of the machinery will be at least $5,000. The machinery has a useful life of 10 years and a fair value of $43,000. The implicit rate of the lease is not known to Blossom. Blossom’s incremental borrowing rate is 9%. Prepare Blossom’s 2020 journal entries

Answers

Answer and Explanation:

The Journal entry is shown below:-

1. Right of use Dr, $35,743.93

                   To lease liability $35,743.93

(Being lease assets and lease liability is recorded)

Working note as attached using spreadsheet

Here we debited the right of use as it increased the assets and we credited the lease liability as it also increased the liability

2. Lease liability Dr, $5,800

                To Cash $5,800

(Being payment on lease liability is recorded)

Here, we debited the lease liability as it decrease the liability and we credited the cash as  it decreased the asset

3. Interest expenses Dr, $2,694.95

               To Lease liability $2,694.95

(Being interest expenses is recorded)

Here we debited the interest expense as it increased the expenses and we credited the leased liability as it increased the liability

4. Amortization expenses Dr, $3,574.39    ($35,743.93 ÷ 10 )

                 To Right of use $3,574.39

(Being amortization expenses is recorded)

Here we debited the amortization expenses as it increase the expenses and we credited the right of use as it reduced the assets  

Working Note

Interest expenses = (Lease liability - First lease payment) × Incremental borrowing rate

= ($35,743.93 - $5,800) × 9%

= $2,694.95

Piedmont Hotels is an all-equity company. Its stock has a beta of .94. The market risk premium is 7.5 percent and the risk-free rate is 3.3 percent. The company is considering a project that it considers riskier than its current operations so it wants to apply an adjustment of 2.5 percent to the project's discount rate. What should the firm set as the required rate of return for the project

Answers

Answer:

Required rate of return for the project = 9.7%

Explanation:

The risk-adjusted discount factor = cost of equity + the adjustment

Cost of equity can be calculated using the capital asset pricing model CAPM

Using the CAPM , the rate of return on equity can be determined as follows:

E(r)= Rf +β(Rm-Rf)

E(r) =? , Rf- 3.3%, Rm- 7.5%, β- 0.94

Cost of equity = Rf + β (Rm -Rf)

Cost of equity = 3.3% + 0.94×(7.5-3.3)= 7.248

The risk-adjusted discount factor=  7.248 + 2.5= 9.748

Required rate of return for the project = 9.7%

g Willow Creek Company purchased and installed carpet in its new general offices on April 30 for a total cost of $18,000. The carpet is estimated to have a 15-year useful life and no residual value. a. Prepare the journal entry necessary for recording the purchase of the new carpet. If an amount box does not require an entry, leave it blank. Apr. 30 b. Record the December 31 adjusting entry for the partial-year depreciation expense for the carpet, assuming that Willow Creek uses the straight-line method. Do not round intermediate calculations. If an amount box does not require an entry, leave it blank. Dec. 31

Answers

Answer:

a. The journal entry for recording the purchase of the new carpet would be as follows:

April 30 Debit   Credit

Carpet $18,000  

Cash      $18,000

b. The journal entry would be as follows:

December 31                                  Debit       Credit

Depreciation expense - carpet $800  

Accumulated depreciation- carpet  $800

Explanation:

a. The journal entry for recording the purchase of the new carpet would be as follows:

April 30 Debit   Credit

Carpet $18,000  

Cash      $18,000

b.  According to the given data, the carpet is estimated to have a 15-year useful life and no residual value, therefore the December 31 adjusting entry for the partial-year depreciation expense for the carpet would be to debit Depreciation expense - carpet for $800 and to credit Accumulated depreciation- carpet for $800.

The journal entry would be as follows:

December 31                                  Debit       Credit

Depreciation expense - carpet $800  

Accumulated depreciation- carpet  $800

Suppose Mr. Lane just bought a share of BlueWind Co., a renewable energy startup. BlueWind promises to pay Mr. Lane $18 in dividends for one year and then the firm will shut down. Suppose that the liquidation value of the share is $3, and the rate of time preference is 5%. Then, according to the single-period dividend discount model, the present value of the cash payment received by Mr. Lane in one year would be

Answers

Answer:

The present value of the cash payment is $20

Explanation:

The present value of cash payment receivable by Mr Lane in one year's time is the today's equivalent amount of the dividend of $18 as well as the liquidation value of $3.

The present value is the total cash inflows multiplied by the discount factor

discount factor=1/(1+r)^n

where is the rate of time preference of 5%'

n is 1 i.e in one year's time

total cash inflows=$18+$3=$21

discount factor =1/(1+5%)^1=0.95238

present value of cash payment=0.95238*$21=$20

On May 1, 2020, Riverbed Inc. entered into a contract to deliver one of its specialty mowers to Kickapoo Landscaping Co. The contract requires Kickapoo to pay the contract price of $990 in advance on May 15, 2020. Kickapoo pays Riverbed on May 15, 2020, and Riverbed delivers the mower (with cost of $648) on May 31, 2020. (a) Prepare the journal entry on May 1, 2020, for Riverbed. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.)

Answers

Answer and Explanation:

The journal entries are shown below:

On May 1

No journal entry is required as the Riverbed Inc entered into a contract for delivering of the specialty mowers to Kickapoo Landscaping Co which do not required any kind of entry because there is no need to record the entry that contains any type of contract entered

 

On December 31, Westworld Inc. has the following equity accounts and balances: Retained Earnings, $50,500; Common Stock, $2,100; Treasury Stock, $3,100; Paid-In Capital in Excess of Par Value, Common Stock, $40,100; Preferred Stock, $8,100; and Paid-In Capital in Excess of Par Value, Preferred Stock, $4,100. Prepare the stockholders’ equity section of Westworld’s balance sheet. (Negative amount(s) should be indicated by a minus sign.)

Answers

Answer:

$101,800

Explanation:

Westworld Inc.

Stockholder's equity section

Paid in the capital:

Particulars Amount Amount

Common stock $2,100

Additional paid-in capital in excess of par value-Common stock $40,100

Total$42,200

Preferred Stock $8,100

Additional paid-in capital in excess of par value-Preferred Stock $4,100

Total $12,200

Total Paid-in capital $54,400

($42,200+$12,200)

Retained earnings $50,500

Total Paid-in capital and Retained earnings $104,900

($54,400+$50,500)

Less: Treasury stock $-3,100

Total Stockholder's equity $101,800

The value of the total stockholder's equity will be $101800.

The stockholders’ equity section of Westworld’s balance sheet will be calculated thus:

Common stock = $2100Add: Additional paid in capital = $40100Add: Preferred stock = $8100Add: Additional paid in capital for preferred stock = $4100Add: Retained earnings = $50500Less: Treasury stock = $3100Total stockholders equity = $101800

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During its first year of operations, a company granted its employees vacation privileges and pension rights estimated at a cost of $23,125 and $15,073, respectively. The vacations are expected to be taken in the next year, and the pension rights are expected to be paid in the future 5-30 years. What is the total cost of vacation pay and pension rights to be recognized in the first year

Answers

Answer:

$38,198

Explanation:

Recognization principle state that the total amount paid in the first year will be the sum of the amounts given as a whole which will inturn be considered as paid for the employees.

Therefore for the first year, the vacation pay and the pension right will be :

$23,125 +$15,073

=$38,198

Therefore the total cost of vacation pay and pension rights to be recognized in the first year will be $38,198

On January 1, 2021, Tonge Industries had outstanding 480,000 common shares ($1 par) that originally sold for $30 per share, and 6,000 shares of 10% cumulative preferred stock ($100 par), convertible into 60,000 common shares.

On October 1, 2021, Tonge sold and issued an additional 16,000 shares of common stock at $37. At December 31, 2021, there were 22,000 incentive stock options outstanding, issued in 2020, and exercisable after one year for 22,000 shares of common stock at an exercise price of $34. The market price of the common stock at year-end was $52. During the year, the price of the common shares had averaged $44.

Net income was $940,000. The tax rate for the year was 40%.

Required:

Compute basic and diluted EPS for the year ended December 31, 2021. (Enter your answers in thousands.)

Answers

Answer:

842,000 shares

Explanation:

Please the solution to the given problem in the file attached below

Answer:

Basic EPS = $1.82

Diluted EPS = $1.72

Explanation:

The picture attached herewith shows the calculation to the problem and it is so explanatory.

Never Forget Bakery purchased a lot in Oil City six years ago at a cost of $278,000. Today, that lot has a market value of $320,000. At the time of the purchase, the company spent $6,000 to level the lot and another $8,000 to install storm drains. The company now wants to build a new facility on that site. The building cost is estimated at $1.03 million. What amount should be used as the initial cash flow for this project?

Answers

Answer:

The   amount that  should be used as the initial cash flow for this project is $1,350,000

Explanation:

The amount to be used as the initial cash flow for the project comprises of estimated building cost of $1.03 million and the market worth of the lot now.

The cost six years ago of $278,000,the cost of leveling as well as the cost of installing the storm drains were long ago time and are not relevant now.

In a nutshell the cost of the new project is $1,350,000($1,030,000+$320,0000)

Okun's law states that
a. a change in the output gap occurs with a change in the rate of unemployment that is smaller in magnitude and in the opposite direction.
b. a change in the output gap occurs with a change in the rate of unemployment that is larger in magnitude and in the opposite direction.
c. inflation causes a decrease in the value of money held by the public.
d. the government may temporarily suspend citizens' rights during periods of hyperinflation in an attempt to maintain security and stability.

Answers

Answer:

C, I think is the answer.

Explanation:

Stiller Corporation incurred fixed manufacturing costs of $24,000 during 2015. Other information for 2015 includes: The budgeted denominator level is 2,000 units. Units produced total 1,500 units. Units sold total 1,200 units. Beginning inventory was zero. The company uses absorption costing and the fixed manufacturing cost rate is based on the budgeted denominator level. Manufacturing variances are closed to cost of goods sold. Operating income using absorption costing will be ________ than operating income if using variable costing.

Answers

Answer:

Operating profit using absorption costing will be higher by $3,600 than operating income if using variable costing.

Explanation:

The difference between profit under variable costing and under absorption costing is simply the value of the change in inventory.

Usually, a decrease in inventory would cause profit under absorption costing to be lower . This is so because cost of goods sold would become higher leading to a lower profit . And vice versa

Difference in profit = POAR × change inventory

Predetermined Overhead absorption rate(POAR)

= Estimated overhead/ estimated production unit

= $24,000/2,000 units = $12 per unit

Change in inventory = 1500 - 1200= 300 units

Difference in profit = 300 × $12 per unit = $3,600

Operating profit using absorption costing will be higher by $3,600 than operating income if using variable costing.

The accounting records of Kesswil Company provided the data below. Net loss ($40,000) Depreciation expense 12,000 Increase in salaries payable 11,000 Increase in accounts receivable 4,000 Decrease in inventory 4,800 Amortization of patent 700 Decrease in premium on bonds payable 500 Requirements: Determine the following: (1) Increase (decrease) in operating assets (net): (2) Increase (decrease) in operating liabilities (net): (3) Net cash flows from operating activities:

Answers

Answer:

Increase (decrease) in operating assets (net)*              $800

Increase (decrease) in operating liabilities**             $10,500

Net cash flows from operating activities                 ($16,000)

Explanation:

Kesswil Company

Statement of cash flows (extract)

Net loss                                                                    ($40,000)

Add: Depreciation expense                                        12,000

        Amortization of patent                                            700

Increase (decrease) in operating assets (net)*              800

**Increase (decrease) in operating liabilities**          10,500

Net cash flows from operating activities               ($16,000)

Note:

Increase in accounts receivable                               (4,000)

Decrease in inventory                                                 4,800

*Increase (decrease) in operating assets (net):            800

Increase in salaries payable                                       11,000

Decrease in premium on bonds payable                    (500)

**Increase (decrease) in operating liabilities            10,500

On January 2, 2020, Concord Corporation replaced its boiler with a more efficient one. The following information was available on that date: Purchase price of new boiler $140500 Carrying amount of old boiler 8500 Fair value of old boiler 3200 Installation cost of new boiler 21600 The old boiler was sold for $3200. What amount should Concord capitalize as the cost of the new boiler

Answers

Answer:

The amount that Concord should capitalize as the cost of the new boiler is $162,100

Explanation:

Solution

Recall that:

The price of purchasing a new boiler = $140500

The amount of old boiler = 8500

The cost of installation of new boiler = $21600

Old boiler sold for = $3200

Now,

The Cost of New Boiler = Purchase Price of new boiler + Installation cost of new boiler

= $140500 + 21600

= $162,100

ASAP HELP ME PLEASE , GIVING BRAINLIEST TO CORRECT AWNSER

Answers

Answer:

A

Explanation:

Answer:

because people would have to have good contraptions in order to be able to make free choices

Explanation:

You pay $20,800 to the Laramie Fund which has a NAV of $18.00 per share at the beginning of the year. The fund deducted a front-end load of 3.00%. The securities in the fund increased in value by 12% during the year. The fund's expense ratio is 1.50% and is deducted from year end asset values. What is your rate of return on the fund if you sell your shares at the end of the year

Answers

Answer:

6.92%

Explanation:

Beginning investment fund is $20,800.

Now, fund available= Beginning fund(1-front end load)

=20,800(1-0.03)=$20176

Now, the number of shares that can be brought with the available fund

[tex}\text{Number of shares}=\frac{\text{fund available}}{NAV_{beginning}}[/tex]

[tex]=\frac{20176}{18}[/tex]

=1120

Now calculating closing NAV

NAV(closing)=NAV(beginning)=(1+increased%)

=$18(1+12%)=18×1.12

=$20.16

Calculate year end asset value

Year end asset value =NAV(closing)×No. of shares

=$20.16×1120=$22579.2

Value of investment after deducting the expense ratio

Closing investment value = Year end asset value×(1-expense ratio)

=$22579.2×(1-1.5%)

=$22240.512

Now,

Return on the fund =[(closing investment value)-(Beginning investment fund)]÷Beginning investment fund

=(22240.512-20800)÷20800

=0.0692

or, 6.92%

Ratios are generally calculated from historical data. Of what use are they in assessing

the firm’s future financial condition?​

Answers

I would say by the firm calculating their reports from before it usually shows where the company should stand for tears to come

Explanation:

Assume the economy of country C produces hotdogs and buns in the following quantities and prices in 2016 and 2017. Assume also that 2016 is the base year and the real GDP will be calculated using 2016 prices. What is the real GDP 2017? Hot Dogs Buns Quantity Price Quantity Price Year 2016 (base year) 6 million $2 4 million $1 Year 2017 8 million $3 6 million $2 a. $22 million. b. $26 million c. $16 million. d. $36 million.

Answers

Answer:

Option (a).

Explanation:

According to the scenario, computation of the given data are as follow:-

Real GDP = Base Year Price × Current Year Quantity

Real GDP in 2016= $2 × 6 million + $1 × 4 million

= $12 million + $4 million = $16 million

Real GDP in 2017 = $2 × 8 million + $1 × 6 million

= $16 million + $6 million = $22 million

According to the analysis, the real GDP in 2017 is $22 million. So (a) option is correct.

Southern Alliance Company needs to raise $70 million to start a new project and will raise the money by selling new bonds. The company will generate no internal equity for the foreseeable future. The company has a target capital structure of 60 percent common stock, 15 percent preferred stock, and 25 percent debt. Flotation costs for issuing new common stock are 12 percent, for new preferred stock, 9 percent, and for new debt, 2 percent. What is the true initial cost figure the company should use when evaluating its project ?

Answers

Answer:

$88,832,487.31

Explanation:

According to the scenario, computation of the given data are as follow:-

FT = flotation cost of new debt percent × target capital debt percent + flotation cost of new common stock percent × target capital common stock percent +  flotation cost of new preferred stock percent × target capital preferred stock percent

= 0.02 × 0.25+ 0.12 × 0.60 + 0.09 × 0.15

= 0.005 + 0.072 + 0.135

= 0.212

Now

True initial cost

= $70 million ÷ ( 1 - 0.212)

= $70 million ÷ 0.788

= $88,832,487.31

The Nandina Corporation was formed and began operations on July 1, 2018, and incurred the following expenses during the year: State fees for incorporation $800 Legal and accounting fees incident to organization 1,500 Legal fees for the issuance of stock 600 Temporary directors’ fees 1,000 If the corporation chooses not to expense but rather amortizes organizational costs over 180 months, what is the amount of its amortization expense for 2018?

Answers

Answer:

$110.00

Explanation:

Nandina Corporation

The amount of amortization expenses for 2018

State fees for incorporation $800

Legal and accounting fees incident to organization 1,500

Temporary directors’ fees 1,000

Total $3,300

Hence:

$3,300/180 months x 6 months

= $110.00

Therefore the amount of its amortization expense for 2018 will be $110.00

The president of Ravens Inc. attended a seminar about the contribution margin model and returned to her company full of enthusiasm about it. She requested that last year’s traditional model income statement be revised, and she received the following report: Division Total Company A B C Sales $ 484,000 $ 188,000 $ 128,000 $ 168,000 Variable expenses 268,000 112,000 66,000 90,000 Contribution margin $ 216,000 $ 76,000 $ 62,000 $ 78,000 Fixed expenses 172,000 54,000 68,000 50,000 Net income (loss) $ 44,000 $ 22,000 $ (6,000 ) $ 28,000 The president was told that the fixed expenses of $172,000 included $94,500 that had been split evenly between divisions because they were general corporate expenses. After looking at the statement, the president exclaimed, "I knew it! Division B is a drag on the whole company. Close it down!"
Evaluate the President's remark.

Answers

Answer and Explanation:

a. The president remark in case of the allocated fixed expenses should be ignored the misleading result as it is seen that the division B has suffered a loss of $6,000 due to which the president exclaimed  "I knew it!.

Moreover the president ignored the given information i.e $172,000 included $94,500 that had been split evenly between divisions as they are classified as a general corporate expenses

So if it is split evenly the general corporate expenses for division B is $31,500 which is come from by dividing the $94,500 from 3 divisions

And if we do not allocated the expenses so all divisions would come in profit  

In 2020, Marigold Corp., issued for $102 per share, 86000 shares of $100 par value convertible preferred stock. One share of preferred stock can be converted into three shares of Marigold's $25 par value common stock at the option of the preferred stockholder. In August 2021, all of the preferred stock was converted into common stock. The market value of the common stock at the date of the conversion was $30 per share. What total amount should be credited to additional paid-in capital from common stock as a result of the conversion of the preferred stock into common stock?

Answers

Answer:

$2322,000

Explanation:

The computation of amount credited to additional paid-in capital is shown below:-

Amount credited to additional paid-in capital = Issued per share × Number of shares) - (Number if shares × Preferred stock shares converted into three shares × Par value of common stock

= ($102 × 86,000) - (86,000 × 3 × $25)

= $8,772,000 - $6,450,000

= $2322,000

So, for computing the amount credited to additional paid-in capital we simply applied the above formula.

Bonnie Jo purchased a used camera (five-year property) for use in her sole proprietorship. The basis of the camera was $3,000. Bonnie Jo used the camera in her business 60 percent of the time and used it for personal purposes the rest of the time during the first year. Calculate Bonnie Jo's depreciation deduction during the first year, assuming the sole proprietorship had a loss during the year. (Bonnie did not place the property in service in the last quarter.)

Answers

Answer:

$360

Explanation:

The computation of the depreciation deduction during the first year is shown below:

= Basis of the camera × given percentage × weightage

= $3,000 × 60% × 20%

= $360

Since the 60% is used for business and 40% used for personal

And there is a recovery period of assets of 5 years so  half year convention period applies

Northfield Casino is considering converting the Polsky Building at University of Akron into a state-of-the-art gaming parlor. This expansion project will require an initial outlay of $75,000,000 with a project life of five years. Cash flows from operating the new parlor are expected to be $25,000,000 every year for the next five years. The parlor will be sold for $50,000,000 at the end of five years. The project's required rate of return, or discount rate is 18%. Based on this information: The project's payback period is:______.
a. 2.25 Years.
b. 2.5 Years.
c. 2.75 Years.
d. 3 Years.
e. 3.2 Years.

Answers

Answer:

d. 3 Years.

Explanation:

Payback period calculates the amount of time it takes to recover the amount invested in a project from its cumulative cash flows.

Payback period = amount invested / cash flow

$75,000,000 / $25,000,000 = 3 years

I hope my answer helps you

Stahlmaere Inc. is a start-up company that manufactures simple machines. It is interested in analyzing the profit from a new machine using Monte Carlo simulation. It wants to investigate the profit resulting from a selling price of $150 per unit. The setup and advertising costs are known to total $75,000. They assume that the demand for the product is normally distributed with a mean of 1500 units and a standard deviation of 100 units. The company estimates that the raw material cost per unit is uniformly distributed between $5 and $6. The labor cost per unit is assumed to follow a discrete uniform distribution from $12 to $16. A junior analyst has devised the following Excel spreadsheet that simulates a single scenario using the information given above: Selling price per unit = 150 Set up and advertising cost = 75000 Demand = =NORM.INV(RAND(),1500,100) Raw material cost per unit = =5+(6-5)*RAND() Labor cost per unit = =RANDBETWEEN(12,16) Profit = =(B1*B4)-B2-((B5+B6)*B4) Copy-and-paste the above information into cells A1:B8 of an Excel spreadsheet. Then use a data table to repeat the simulation 1000 times. From the simulation results, estimate Stahlmaere's expected mean profit. Understanding that simulation is random in nature and that your estimate is unlikely to match any of the answer choices exactly, choose the answer choice that is closest to the estimated mean profit.

A. $180,000
B. $50,000
C. $150,000
D. $90,000
E. $120,000

Answers

Answer:

$ 120,000

Explanation:

Formulas:

Cell        Formula

B4          =NORMINV(RAND(),1500,100)

B5          =5+(6-5)*RAND()

B6          =RANDBETWEEN(12,16)

B8          =(B1*B4)-B2-((B5+B6)*B4)

B12         =AVERAGE(F3:F1002)

Enter formula = B8 in cell E2

and =RANDBETWEEN(12,16) in E3 copy down to E1002 (this represents labor cost)

To create the data table, select range E2:F1002

click Data tab > What-If Analysis in Data Tools group > Data Table > In the resulting dialogue box, enter B6 in the Column Input cell, and B1 in the Row Input cell.

Estimated mean profit = $ 121,445 this is closest to $ 120,000

THE ANSWER IS $ 120,000

On November 1, 2018, Green Valley Farm entered into a contract to buy a $150,000 harvester from John Deere. The contract required Green Valley Farm to pay $150,000 in advance on November 1, 2018. The harvester (cost of $110,000) was delivered on November 30, 2018. The journal entry to record the contract on November 1, 2018 includes a Group of answer choices a) credit to Accounts Receivable for $150,000 b) credit to Sales Revenue for $150,000. c) credit to Unearned Sales Revenue for $150,000. d) debit to Unearned Sales Revenue for $150,000.

Answers

Answer:

d) debit to Unearned Sales Revenue for $150,000

Explanation:

Green Valley Farm Journal entry

Dr Unearned Sales Revenue 150,000

Cr Sales Revenue150,000

Dr Cost of Goods Sold 110,000

Cr Inventory110,000

Therefore the journal entry to record the contract on November 1, 2018 is debit to Unearned Sales Revenue for $150,000

Moates Corporation has provided the following data concerning an investment project that it is considering:

Initial investment $ 250,000
Annual cash flow $ 119,000 per year
Expected life of the project 4 years
Discount rate 8 %
Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factor(s) using the tables provided.

The net present value of the project is closest to: (Round your intermediate calculations and final answer to the nearest whole dollar amount.)

Multiple Choice

$250,000

$144,128

$(131,000)

$(144,128)

Answers

Answer:

$144,128

Explanation:

The net present value is the present value of after tax cash flows from an investment less the amount invested.

NPV can be calculated using a financial calculator:

Cash flow in year 0 = $-250,000

Cash flow each year from year 1 to 4 = $119,000

I = 8%

NPV = $144,143

To find the NPV using a financial calacutor:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. After inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.

3. Press compute

I hope my answer helps you

Waterways puts much emphasis on cash flow when it plans for capital investments. The company chose its discount rate of 8% based on the rate of return it must pay its owners and creditors. Using that rate, Waterways then uses different methods to determine the best decisions for making capital outlays.
In 2017 Waterways is considering buying five new backhoes to replace the backhoes it now has. The new backhoes are faster, cost less to run, provide for more accurate trench digging, have comfort features for the operators, and have 1-year maintenance agreements to go with them. The old backhoes are working just fine, but they do require considerable maintenance. The backhoe operators are very familiar with the old backhoes and would need to learn some new skills to use the new backhoes.
The following information is available to use in deciding whether to purchase the new backhoes.
Old Backhoes New Backhoes
Purchase cost when new $90,000 $200,000
Salvage value now $42,000
Investment in major overhaul needed in next year $55,000
Salvage value in 8 years $15,000 $90,000
Remaining life 8 years 8 years
Net cash flow generated each year $30,425 $43,900
Required:
1. Evaluate in the following ways whether to purchase the new equipment or overhaul the old equipment. (Hint: For the old machine, the initial investment is the cost of the overhaul. For the new machine, subtract the salvage value of the old machine to determine the initial cost of the investment.)
a. Using the net present value method for buying new or keeping the old
b. Using the payback method for each choice. (Hint: For the old machine, evaluate the payback of an overhaul.)
c. Comparing the profitability index for each choice.
d. Calculate the internal rate of return for the new and old blackhoes.
e. Comparing the internal rate of return for each choice to the required 8% discount rate.

Answers

Answer:

Explanation:

Base on the scenario been described in the question,Hey, since there are multiple sub-parts posted, we will answer first three sub-parts. If you want any specific sub-part to be answered then please submit that sub-part only or specify the question number in your message.

2

Compute the net present value to make decision for buying the new Backhoes or keeping the old:

We can fine the calculations in the file attached below

During April, the production department of a process operations system completed and transferred to finished goods 18,000 units that were in process at the beginning of April and 90,000 units that were started and completed in April. April's beginning inventory units were 100% complete with respect to materials and 40% complete with respect to labor. At the end of April, 30,000 additional units were in process in the production department and were 100% complete with respect to materials and 60% complete with respect to labor. The beginning inventory included materials cost of $107,000 and the production department incurred direct materials cost of $329,000 during the month. Compute the direct materials cost per equivalent unit for the department using the weighted-average method

Answers

Answer:

Cost per equivalent unit of materials = $3.16

Explanation:

Under the weighted average method of valuation, to account for completed units, it is assumed that the entire degree of work required is done in the period under consideration. So there is no separation of the completed units into opening inventory and fully worked.

Cost per equivalent unit = cost / total equivalent units

Total units completed and transferred out= 18,000 + 90000= 108,000

Items                    Unit                                                         Equivalent unit

Completed units    108,000         100% × 108,000 =     108,000

Closing inventory   30,000          100%  ×  30,000 =     30,000

Total equivalent unit of material                                    138,000

Cost per equivalent unit = Total cost/Total equivalent unit

=    (107,000 + 329,000) /138,000 units

= $3.16

Barbara's Bakery purchased three new 7-year assets during the current year. She chose NOT to use Section 179 immediate expensing or take bonus depreciation. The furnishings were purchased for $15,000 in April, the equipment for $6,000 in July, and the appliances for $40,000 in November. What amount of depreciation expense is allowable in the current year

Answers

Answer:

Depreciation in Current year is $14,939

Explanation:

Answer:

I think it is 4748. If it asks second year, it will be 16072.

Explanation:

Furnishings...in April, second quarter:

15,000x17.85%=2677.5

Equipment...in July, third quarter:

6,000x10.71%=642.6

Appliances...in November, fourth quarter

40,000x3.57%=1428

Total: 2677.5+642.6+1428=4748

Builder Products, Inc., uses the weighted-average method in its process costing system. It manufactures a caulking compound that goes through three processing stages prior to completion. Information on work in the first department, Cooking, is given below for May: Production data: Pounds in process, May 1; materials 100% complete;conversion 90% complete 76,000Pounds started into production during May 410,000Pounds completed and transferred out ?Pounds in process, May 31; materials 60% complete;conversion 40% complete 36,000Cost data: Work in process inventory, May 1: Materials cost$117,900Conversion cost$53,600Cost added during May: Materials cost$613,080Conversion cost$294,700 Required:1. Compute the equivalent units of production for materials and conversion for May.2. Compute the cost per equivalent unit for materials and conversion for May.3. Compute the cost of ending work in process inventory for materials, conversion, and in total for May.4. Compute the cost of units transferred out to the next department for materials, conversion, and in total for May.5. Prepare a cost reconciliation report for May.

Answers

Answer:

1.Total Equivalent Units   Materials    471,600  Conversion     464,400

2. Cost Per Equivalent Unit Materials $ 1.33  Conversion   $ 0.75

3. Cost of Ending Work In Process  $ 39528

4. Cost Of Units Transferred Out = $ 936,000

5. Cost Materials  $ 627 228 and Conversion $348,300

Explanation:

Builder Products, Inc.,

Weighted-Average Method

1. Equivalent Units

Particulars              Units       % of Completion       Equivalent Units

                                       Materials Conversion   Materials Conversion

Transferred Out    450000     100         100             450,000      450,000

Ending WIP           36000        60          40                21,600          14,400  

Total Equivalent Units                                              471,600       464,400

Transferred Out units are calculated by adding Opening Inventory and production started and subtracting ending inventory units.

Transferred Out units = Opening Inventory+ production started -ending inventory units

Transferred Out units =76,000 + 410,00 - 36000= 450000 units.

2. Cost Per Equivalent Units

                                                     Materials         Conversion

Cost Of Opening Inventory         117,900                 53600

Cost Added                                  613,080              294,700

Total Costs                                  624,980               348,300

Equivalent Units                         471,600                464,400

Cost per Equivalent Unit            624980/471600        348300/464400

                                                      $ 1.33                           $ 0.75

3. Cost of Ending Work In Process  $ 39528

Materials = 21600 * $ 1.33= $ 28728

Conversion = 14400 * $ 0.75=  $10800

We multiply the equivalent number of units with the cost per unit to find the cost.

4. Cost Of Units Transferred Out = $ 936,000

Materials = 450 000 * $ 1.33= $ 598,500

Conversion = 450000 * $ 0.75 =  $ 337,500

5. A Cost Reconciliation Report

                                      Materials              Conversion

Ending WIP                     $ 28728                  $10800

Transferred Out                $ 598,500             $ 337,500

Total                                 627 228**                 348,300

These calculated costs reconcile with the costs given in the above data.

                                                   Materials              Conversion

Cost Of Opening Inventory         117,900                 53600

Cost Added                                  613,080              294,700

Total Costs                                  624,980**               348,300

The difference is in the cost of materials which is actually 624,980** and we found it out to be 627 228**  . This is because we rounded the Cost per Equivalent Unit of material from $ 1.325 to $1.33

If we multiply 1.325 *  471,600  we get $ 624870 which is almost the same.

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