Master Business with Fun Quizzes & Brain Teasers!

Each of the following situations occurred during 2011 for one of your audit clients:1. The write-off of inventory due to obsolescence.2. Discovery that depreciation expenses were omitted by accident from 2010's income statement.3. The useful lives of all machinery were changed from eight to five years.4. The depreciation method used for all equipment was changed from the declining-balance to the straight-line method.5. Ten million dollars face value of bonds payable were repurchased (paid off) prior to maturity resulting in a material loss of $500,000. The company considers the event unusual and infrequent.6. Restructuring costs were incurred.7. The Stridewell Company, a manufacturer of shoes, sold all of its retail outlets. It will continue to manufacture and sell its shoes to other retailers. A loss was incurred in the disposition of the retail stores. The retail stores are considered components of the entity.8. The inventory costing method was changed from FIFO to average cost.Required:1. For each situation, identify the appropriate reporting treatment from the list below (consider each event to be material):a. As an extraordinary item.b. As an unusual or infrequent gain or loss.c. As a prior period adjustment.d. As a change in accounting principle.e. As a discontinued operation.f. As a change in accounting estimate.g. As a change in accounting estimate achieved by a change in accounting principle.2. Indicate whether each situation would be included in the income statement in continuing operations (CO) or below continuing operations (BC), or if it would appear as an adjustment to retained earnings (RE). Use the format shown below to answer requirements 1 and 2
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A machine that cost $500,000 has an estimated residual value of $25,000 and an estimated useful life of five years. The company uses straight-line depreciation. Calculate its book value at the end of year 4. (Do not round intermediate calculations.)
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You own 500 shares of Great, Inc. stock. It is currently priced at $50. You are going on vacation, and you realize that the company will be reporting earnings while you are away. To protect yourself against a rapid drop in the price, you place a stop-limit order to sell 500 shares at $40. It turns out the earnings report was not so good and the stock price fell to $30 right after the announcement. It did, however, bounce back, and by the end of the day it was back to $42. What happened in your account
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In its most recent financial statements, Del-Castillo Inc. reported $65 million of net income and $950 million of retained earnings. The previous retained earnings were $937 million. How much in dividends did the firm pay to shareholders during the year? Enter your answer in dollars. For example, an answer of $1.2 million should be entered as 1,200,000.
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Vang Enterprises, which is debt-free and finances only with equity from retained earnings, is considering 7 equal-sized capital budgeting projects. Its CFO hired you to assist in deciding whether none, some, or all of the projects should be accepted. You have the following information: rRF= 4.50%; RPM = 5.50%; and b = 0.93. The company adds or subtracts a specified percentage to the corporate WACC when it evaluates projects that have above- or below-average risk. Data on the 7 projects are shown below. If these are the only projects under consideration, how large should the capital budget be?Project Risk Risk Factor Expected Return Cost (Millions) 1 Very low -2.00% 7.60% $25.00 2 Low -1.00% 9.15% $25.00 3 Average 0.00% 10.10% $25.00 4 High 1.00% 10.40% $25.00 5 Very high 2.00% 10.80% $25.00 6 Very high 2.00% 10.90% $25.00 7 Very high 2.00% 13.00% $25.00 a. $ 125b. $ 100c. $ 25d. $50e. $75
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Cullumber Company purchased machinery on January 1 at a list price of $320000, with credit terms 4/10, n/30. Payment was made within the discount period. Cullumber paid $21750 sales tax on the machinery and paid installation charges of $5900. Prior to installation, Cullumber paid $11200 to pour a concrete slab on which to place the machinery. What is the total cost of the new machinery
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Kahn of Portland Oregon sent a letter to Lischner of Los Angeles inquiring whether Kushners property in Humboldt County was for sale. Lischner replied that he was interested in selling and asked Kahn about the fair market value. Kahn wrote that it was difficult to make an offer without a legal description of the property and asked for it and the annual taxes. These were provided by Lischner. Subsequently, Kahn wrote, "I hesitate to place a value on someone elses property, but I can tell you that I have been offered a similar track of property for $2,000. Since your property is closer to mine, I would prefer to buy yours, and offer a four-year term contract at a total price of $2,500." The two parties ultimately agreed on a cash price of $2,500. Shortly after contracting with Kahn, Lischner went to Humboldt county and readily learned, upon the most superficial inquiry that the property was worth more than $2,500. He sold the property to Pacoima Lumber Sales, Inc. for $7,500. Thereupon, Kahn sued Lischner for $5,000. Lischner responded that he had been induced to contract by a fraudulent misrepresentation as to the value of the property by Kahn and therefore could rescind their contract of sale.What are the elements that must be present for fraudulent misrepresentation? Did Kahn commit fraud? Why, or why not.
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Hart, Attorney at Law, experienced the following transactions in Year 1, the first year of operations: Accepted $36,000 on April 1, Year 1, as a retainer for services to be performed evenly over the next 12 months. Performed legal services for cash of $54,000. Purchased $2,800 of office supplies on account. Paid $2,400 of the amount due on accounts payable. Paid a cash dividend to the stockholders of $5,000. Paid cash for operating expenses of $31,000. Determined that at the end of the accounting period $200 of office supplies remained on hand. On December 31, Year 1, recognized the revenue that had been earned for services performed in accordance with Transaction 1. Required: Show the effects of the events on the financial statements using a horizontal statements model like the following one. In the Statement of Cash Flows column, use the initials OA to designate operating activity, IA for investing activity, FA for financing activity, and NC for net change in cash. The first event has been recorded as an example. (Do not round intermediate calculations. Enter any decreases to account balances and cash outflows with a minus sign. Not all cells in the "Statement of Cash Flows" column may require an input - leave cells blank if there is no corresponding input needed.)Event # Cash Supples Accts. Pay Unearn. Rev. Ret. Earn. Rev Exp Net Inc. Cash Flow 1 $36,000 NA NA $36,000 NA $36,000 NA NA $36,000 OA2
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A local college is deciding whether to conduct a campus beautification initiative that would involve various projects, such as planting trees and remodeling buildings, to make the campus more aesthetically pleasing. For the students of the college, the visual appearance of the campus is and . Thus, the visual appearance would be classified as a public good. Suppose the college administrators estimate that the beautification initiative will cost $1,540. To decide whether the initiative should be undertaken, administrators conduct a survey of the college's 380 students, asking each of them their willingness to pay for the beautification project. The average willingness to pay, as revealed by the survey, is $14. The benefit of the beautification initiative, as suggested by the survey, is $_______. Because the estimated benefit is than the cost, the college administrators undertake the beautification initiative. The calculation of the benefit of the beautification initiative relied on the ability of the administrators to capture the true willingness to pay of each student accurately. Which of the following scenarios would cause the survey used by the college administrators to yield misleading data on willingness to pay? A. Students are surveyed at random, using conventional survey and data-gathering methods.B. Students believe that if the initiative does not happen, the funds for the initiative will not be spent elsewhere.
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Empire Company is a manufacturer of smart phones. Its controller resigned in October 2017. An inexperienced assistant accountant has prepared the following income statement for the month of October 2020.EMPIRE COMPANYIncome StatementFor the Month Ended October 31, 2020Sales revenue $780,000Less:Operating expensesRaw materials purchases $264,000Direct labor cost 190,000Advertising expense 90,000Selling and administrative salaries 75,000Rent on factory facilities 60,000Depreciation on sales equipment 45,000Depreciation on factory equipment 31,000Indirect labor cost 28,000Utilities expense 12,000Insurance expense 8,000803,000Net loss $(23,000)Prior to October 2020, the company had been profitable every month. The companys president is concerned about the accuracy of the income statement. As her friend, you have been asked to review the income statement and make necessary corrections. After examining other manufacturing cost data, you have acquired additional information as follows.1. Inventory balances at the beginning and end of October were:October 1 October 31Raw materials $18,000 $29,000Work in process 20,000 14,000Finished goods 30,000 50,0002. Only 75% of the utilities expense and 60% of the insurance expense apply to factory operations. The remaining amounts should be charged to selling and administrative activities.Prepare a letter to the president of the company, Shelly Phillips, describing the changes you made. Explain clearly why net income is different after the changes. Keep the following points in mind as you compose your letter.1. This is a letter to the president of a company, who is your friend. The style should be generally formal, but you may relax some requirements. For example, you may call the president by her first name.2. Executives are very busy. Your letter should tell the president your main results first (for example, the amount of net income).3. You should include brief explanations so that the president can understand the changes you made in the calculations.
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is esports better than sports? Explain?
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One side is usually more powerful than the other when a contract is being negotiated. Select one: True False
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find the nominal annual rate of interest compounded monthly if $1200 accumulates to $1618.62 in years
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5. What has made California a particularly good place for entrepreneurs
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Who are mangers? Explain how managers differ from non-managerialemployees and Describe classification, levels and different skills of managers.
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in an arithmetic progression U5=-1/2 and S7=21 find a, d and U9
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Cotton On Ltd. currently has the following capital structure: Debt: $3,500,000 par value of outstanding bond that pays annually 10% coupon rate with an annual before-tax yield to maturity of 12%. The bond issue has face value of $1,000 and will mature in 20 years.
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Petra is paying her ten employees for 40 hours a week 52 weeks each year. In 2007 Petra spent___ on wages for her employees each week. When the minimum wage rose in 2009, Petra had to increase her annual budget for wage from 2008 by___.
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MINI CASE STUDY - 6 marks In years gone by the soft drinks market was dominated by fizz, with Coca-Cola as the leading brand. Within UK sales of over 1 billion a year, Coke is stil massive, but in 2015 and 2016 sale fell. In recent years the big winners have been: Main water brands, e.g. Evian Energy drinks e.g. Red Bull/Monster Adult-focused drinks, such as Fever-Tree Drinks with a healthy vibe such as Innocent Coconut water. Oddly, though in the UK no one has quite managed the trick pulled off by Oasis in America; a big selling, non-fizzy drink for adults. Answer the below questions: Q1. Outline one possible reasons why UK sale of Coca-Cola are declining (2 marks) Q2. a) Outline where you think Coconut Water is positioned on the soft drinks market map. (2 marks) b) Outline one benefit of that positioning for a business such as Innocent drinks. (2 marks)
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(I don't need this answered, I just wanted to put the correct answers out there for other users) Drag the tiles to the correct box. Match the credit types to the examples. Secured Credit - home payments Installment Credit - student loan Unsecured Credit - credit card Hope this helps! :) #platofam
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The Giant Machinery has the current capital structure of 65% equity and 35% debt. Its net income in the current year is $250,000. The company is planning to launch a project that will requires an investment of $175,000 next year. Currently the share of Giant machinery is $25/share.
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An investor buys a stock that will return $200 profit if it goes up today and lose $500 if it goes down. Based on the market trend, there is 70% chance that the stock will go up and 20% chance that it will go down and 10% chance it will stay the same. What is the expected amount of return
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you have a constant 128 items in your inventoru. you decide to shrink your inventory by 7%. how many items remain in your new inventory
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What is the age distribution of promotion-sensitive shoppers? A supermarket super shopper is defined as a shopper for whom at least 70% of the items purchased were on sale or purchased with a coupon.
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