On July 1, 2016, Killearn Company acquired 88,000 of the outstanding shares of Shaun Company for $13 per share. This acquisition gave Killearn a 25 percent ownership of Shaun and allowed Killearn to significantly influence the investee's decisions. As of July 1, 2016, the investee had assets with a...
Southwestern Edison Company leased equipment from Hi-Tech Leasing on January 1, 2018. Hi-Tech manufactured the equipment at a cost of $90,000.
Lease term 3 years
Annual payments $40,000 on January 1 each year
Life of asset 3 years
Fair value of asset $111,332
1. The Cheyenne Hotel in Big Sky, Montana, has accumulated records of the total electrical costs of the hotel and the number of occupancy-days over the last year. An occupancy-day represents a room rented for one day. The hotel's business is highly seasonal, with peaks occurring d...
Mornson and Greene have decided to form a partnership. They have agreed that Mornson is to invest $291,000 and Greene is to invest $97,000. Morrison is to devote one-half time to the business, and Greene is to devote full time. The following plans for the division of income are considered:
Discuss how the abnormal accrual models in the literature are used to help detect earnings management. These models are widely used in accounting research; provide an example with citation (and link if available), and discuss the major finding and use of the model.
In your answer explain the conce...
Continuous Problem - City of Monroe
The Balance Sheets of the General Fund and the Street and Highway Fund of the City of Monroe as of December 31, 2016, follow. These (beginning) balances have been entered in the proper general ledger accounts, as of 1/1/2017.
CITY OF MONROE
Assume your company is involved in a major lawsuit and the probable damages are estimated to be $2,000,000.
A. Describe the effects damage estimates would have on the financial statements of a corporation and a partnership.
B. How do disclosure requirements differ from a corporation to a partners...
VI. Statement of Changes in Financial Position
A. From the perspective of an investor, determine whether or not you would invest in your chosen company based on the company's statement of changes in financial position (SCFP). Support your opinion.
The return on assets is very low, under 3% in e...
I recently read in a financial magazine an article that indicated that the airline industry has poor financial flexibility.
What is meant by financial flexibility?
Why financial flexibility is important for the airline industry?
How can the airline industry as a whole to improve their financial...
Dialyze USA is considering opening a new branch dialysis and infusion center in a suburban free-standing strip center. Dialyze USA is a for-profit corporation, thus subject to income taxes.
Equipment and fixtures for the center will cost $2,000,000 and be depreciated to $0 over a 5-year period o...
Nordic Company issued bonds with the following provisions
Maturity value: $60,000,000.
Interest: 7.9 percent per annum payable semi-annually each June 30 and December 31.
Terms: Bonds dated January 1, 2017, due five years from that date.
The company's fiscal year ends on December 31. The bonds w...
Tthe IRS eliminated the majority of determination letters.
Please answer these questions:
Questions 1: Did the IRS provide any rationale for the change in practice?
Questions 2: How will employer get the clarity that need regarding its retirement plans?
Discuss the necessity, role, limitations, and benefits of Determination Letters. Why is the Determination Letter of value and what does it represent to the receiver? Discuss your thoughts and provide examples where appropriate to illustrate your ideas.
Jeff Robinson is a real estate developer who specializes in residential apartments.
A complex of 40 run-down apartments has recently come on the market for $645,500.
Robinson predicts that after remodeling, the 20 one-bedroom units will rent for $500 per
month and the 20 two-bedroom apartments fo...
A company has adopted the following policies regarding merchandise purchases
and inventory. At the end of any month, the inventory should be $18,500 plus 80% of the cost
of goods to be sold during the following month. The cost of merchandise sold averages 75%
of sales. Purchase terms are generall...
EnterTech has noticed a significant decrease in the profitability of its line of portable CD players.
The production manager believes that the source of the trouble is old, inefficient equipment used
to manufacture the product. The issue raised, therefore, is whether EnterTech should (1) buy new
The division managers of Chester Construction Corporation submit capital investment proposals
each year for evaluation at the corporate level. Typically, the total dollar amount requested by the
divisional managers far exceeds the company's capital investment budget. Thus, each proposal is
Pack & Carry is debating whether to invest in new equipment to manufacture a line of high-quality
luggage. The new equipment would cost $1,728,125, with an estimated five-year life and no salvage
value. The estimated annual operating results with the new equipment are as follows:
Revenue from s...
You are the manager of the Midwest Region, a 27-restaurant division that is part of the chain "Bites
and Bits." The restaurants offer casual dining and compete with such chains in your region as
Olive Garden and Outback Steakhouse . You receive an annual cash bonus of 5 percent of sales
Jennifer Baskiter is president and CEO of Plants& More.com , an Internet company that sells plants
and flowers. The success of her startup Internet company has motivated her to expand and create
two divisions. One division focuses on sales to the general public and the other focuses on
AgriChem Industries manufactures fertilizer concentrate and uses cost standards. The fertilizer
is produced in 500-pound batches; the normal level of production is 250 batches of fertilizer per
month. The standard costs per batch are as follows:
Gumchara Corporation reported the following information with respect to the materials required to
manufacture amalgam florostats during the current month:
Standard price per gram of materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4
Standard quantity of materials ...