you are considering the purchase of a zero coupon u s treasury note with 4 years to 665608

Aug 30, 2021 | Uncategorized

U.S. Treasuries represent a significant holding in many pension portfolios. You decide to analyze the yield curve for U.S. Treasury notes.

a. Using the data in the table below, calculate the 5 year spot and forward rates assuming annual compounding. Show your calculations.

U.S. Treasury Note Yield Curve Data

b. Define and describe each of the following three concepts:

i. Yield to maturity.

ii. Spot rate.

iii. Forward rate.

Explain how these concepts are related.

c. You are considering the purchase of a zero coupon U.S. Treasury note with 4 years to maturity. Based on the above yield curve analysis, calculate both the expected yield to maturity and the price for the security. Show your calculations.

suppose that the prices of zero coupon bonds with various maturities are given in th 665611

Aug 30, 2021 | Uncategorized

Suppose that the prices of zero coupon bonds with various maturities are given in the following table. The face value of each bond is $1,000.

a. Calculate the forward rate of interest for each year.

b. How could you construct a 1 year forward loan beginning in year 3? Confirm that the rate on that loan equals the forward rate.

c. Repeat (b) for a 1 year forward loan beginning in year 4.

compute the price of a 5 year annual pay treasury security with a coupon rate of 9 b 665612

Aug 30, 2021 | Uncategorized

The spot rates of interest for five U.S. Treasury Securities are shown in the following exhibit. Assume all securities pay interest annually.

a. i. Compute the 2 year implied forward rate for a deferred loan beginning in 3 years.

ii. Explain your answer by using the expectations theory.

b. Compute the price of a 5 year annual pay Treasury security with a coupon rate of 9% by using the information in the exhibit.

how many three year holding periods are there in a single year the answer is one thi 665615

Aug 30, 2021 | Uncategorized

More Annualized Returns

Suppose you buy some stock in Johnson & Johnson (JNJ) at a price of $50 per share. Three years later, you sell it for $62.50. No dividends were paid. What is your annualized return on this investment?

The situation here is a bit different because your holding period is now longer than a year, but the calculation is basically the same. For the three year holding period, your return is:

Percentage return = (P_t+1 P_t ) / P_t = ($62.50 $50) / $50 = .25 = 25%

How many three year holding periods are there in a single year? The answer is one third, so m in this case is 1/3. The annualized return is:

1 + EAR = (1 + holding period percentage return)^m

= (1 + .25)^1/3

= 1.0772

Subtracting the one, we get an annualized return of .0772, or 7.72 percent.

the approximate geometric average is thus 123 040401 2 1028 which is quite close to 665618

Aug 30, 2021 | Uncategorized

Geometric versus Arithmetic Average Returns: 1926–2006

are expressed in decimals (as opposed to percentages), the geometric average return is approximately equal to the arithmetic average return minus half the variance. For example, looking at the large company stocks, the arithmetic average is .123 and the standard deviation is .201, implying that the variance is .040401. The approximate geometric average is thus .123 .040401/2 = .1028, which is quite close to the actual value.

calculate the geometric average return for the large company stocks for the last fou 665619

Aug 30, 2021 | Uncategorized

Calculating the Geometric Average Return

Calculate the geometric average return for the large company stocks for the last four years in Table 1.1 , 2003–2006.

First, convert percentages to decimal returns, add one, and then calculate their product.

Notice that the number 1.7332 is what our investment is worth after five years if we started with a one dollar investment. The geometric average return is then calculated as Geometric average return = 1.7332^1/4 1 = .1474, or 14.74% Thus the geometric average return is about 14.74 percent in this example. In contrast, in Example 1.4, the average arithmetic return was calculated as 15.07 percent. Here is a tip: If you are using a financial calculator, you can put $1 in as the present value, $1.7332 as the future value, and 4 as the number of periods. Then, solve for the unknown rate. You should get the same answer we did.

you want to buy 1 000 shares of pfizer pfe at a price of 24 per share you put up 18 665621

Aug 30, 2021 | Uncategorized

The Account Balance Sheet

You want to buy 1,000 shares of Pfizer (PFE) at a price of $24 per share. You put up $18,000 and borrow the rest. What does your account balance sheet look like? What is your margin?

The 1,000 shares of Pfizer cost $24,000. You supply $18,000, so you must borrow $6,000. The account balance sheet looks like this:

Your margin is the account equity divided by the value of the stock owned:

Margin = $18,000 / $24,000 = .75 or 75 percent

when the margin is 50 percent you could borrow 3 000 when the margin is 60 percent y 665622

Aug 30, 2021 | Uncategorized

Calculating Initial Margin

Suppose you have $3,000 in cash in a trading account with a 50 percent initial margin requirement. What is the largest order you can place (ignoring commissions)? If the initial margin were 60 percent, how would your answer change?

When the initial margin is 50 percent, you must supply half of the total (and you borrow the other half). So, $6,000 is the largest order you could place. When the initial margin is 60 percent, your $3,000 must equal 60 percent of the total. In other words, it must be the case that $3,000 = 0.60 X Total order

Total order = $3,000/.60 = $5,000

As this example illustrates, the higher the initial margin required, the less you can borrow. When the margin is 50 percent, you could borrow $3,000. When the margin is 60 percent, you can borrow only $2,000.

in our previous example example suppose the maintenance margin was 40 percent at wha 665624

Aug 30, 2021 | Uncategorized

How Low Can It Go?

In our previous example (Example), suppose the maintenance margin was 40 percent. At what price per share would you have been subject to a margin call?

To answer, let P * be the critical price. You own 300 shares, so, at that price, your stock is worth 300 X P *. You borrowed $6,600, so your account equity is equal to the value of your stock less the $6,600 you owe, or 300 X P * $6,600. We can summarize this information as follows:

Amount borrowed = $6,600

Value of stock = 300 X P *

Account equity = 300 X P * $6,600

From our preceding discussion, your percentage margin is your dollar margin (or account equity) divided by the value of the stock:

Margin = Account equity / Value of stock

=300 X P* $6,600 / 300 X P*

To find the critical price, we will set this margin to the maintenance margin and solve for P *:

Maintenance margin = Number of shares X P* Amount borrowed / Number of shares X P *

Solving for P * yields

P * = Amount borrowed / Number of shares 1 Maintenance margin

Finally, setting the maintenance margin equal to 40 percent, we obtain this critical price, P *:

P * = $6,600 /300 1 .40

=$6,600 / 180

=$36.67

At any price below $36.67, your margin will be less than 40 percent, and you will be subject to a margin call. So, $36.67 is the lowest possible price that could be reached before you are subject to a margin call.

the initial margin is 50 percent and the maintenance margin is 40 percent what does 665626

Aug 30, 2021 | Uncategorized

A Case of The Shorts

You shorted 5,000 shares of a particular stock at a price of $30 per share. The initial margin is 50 percent, and the maintenance margin is 40 percent. What does your account balance sheet look like following the short?

Following the short, your account becomes:

Notice that you shorted $150,000 worth of stock, so, with a 50 percent margin requirement, you deposited $75,000.

in our previous example example 2 6 at what price per share would you be subject to 665627

Aug 30, 2021 | Uncategorized

Margin Calls

In our previous example (Example 2.6), at what price per share would you be subject to a margin call?

To answer this one, let P * be the critical price. The short liability then is 5,000 shares at a price of P *, or 5,000 X P *. The total account value is $225,000, so the account equity is $225,000 5,000 X P *. We can summarize this information as follows:

Short position = 5,000 X P *

Account equity = $225,000 5,000 X P *

Notice that the total account value, $225,000, is the sum of your initial margin deposit plus the proceeds from the sale, and this amount does not change. Your margin is the account equity relative to the short liability:

Margin = Account equity / Value of stock

=Initial margin deposit + Short proceeds Number of shares X P * / Number of shares X P *

=$150,000+75,000 5,00 0 X P* / 5,000 X P *

To find the critical price, we will set this margin equal to the maintenance margin and solve for P *:

Maintenance margin = Initial margin deposit + Short proceeds Number of shares X P * / Number of shares X P *

Solving for P * yields:

P * = (Initial margin deposit + Short proceeds)/Number of shares

/

1 + Maintenance margin

Finally, setting the maintenance margin equal to 40 percent, we obtain this critical price, P *:

P * = $225,000/5,000 /1.40= $32.14

At any price above $32.14, your margin will be less than 40 percent, so you will be subject to a margin call. So $32.14 is the highest possible price that could be reached before you are subject to a margin call.

what is your annualized return one put contract costs 250 so you can buy 40 of them 665631

Aug 30, 2021 | Uncategorized

Put Returns

In our example for Macron Technology, suppose a put option is also available with a premium of $2.50. Calculate your percentage return for the three month holding period if the stock price declines to $47 per share. What is your annualized return? One put contract costs $250, so you can buy 40 of them. Notice that your 40 contracts give you the right to sell 4,000 shares at $50 per share.

If, in three months, Macron is selling for $47, your put options are worth $50

$47 = $3 each. You control 4,000 shares, so your options are worth 4,000 shares X $3 = $12,000 total. You invested $10,000, so your dollar return is $12,000 $10,000 = $2,000, and your percentage return is $2,000/$10,000 = 20%.

To annualize your return, we need to compute the effective annual return, recognizing that there are 4 three month periods in a year:

1 + EAR = 1.20 4

1 + EAR = 2.0736

EAR = 1.0736 = 107.36 %

Your annualized return is thus about 107 percent.

if the simple capm is valid which of the following situations in problems 6 to 12 ar 665502

Aug 30, 2021 | Uncategorized

Consider the following table, which gives a security analyst’s expected return on two stocks for two particular market returns:

a. What are the betas of the two stocks?

b. What is the expected rate of return on each stock if the market return is equally likely to be 5% or 25%?

c. If the T bill rate is 6% and the market return is equally likely to be 5% or 25%, draw the SML for this economy.

d. Plot the two securities on the SML graph. What are the alphas of each?

e. What hurdle rate should be used by the management of the aggressive firm for a project with the risk characteristics of the defensive firm’s stock? If the simple CAPM is valid, which of the following situations in problems 6 to 12 are possible? Explain. Consider each situation independently.

when plotting portfolio r on the preceding table relative to the sml portfolio 665511

Aug 30, 2021 | Uncategorized

The following table shows risk and return measures for two portfolios.

When plotting portfolio R on the preceding table relative to the SML, portfolio

R lies:

a. On the SML.

b. Below the SML.

c. Above the SML.

d. Insufficient data given.

When plotting portfolio R relative to the capital market line, portfolio R lies:

a. On the CML.

b. Below the CML.

c. Above the CML.

d. Insufficient data given.

state what action mckay should take to achieve murray rsquo s objective justify your 665512

Aug 30, 2021 | Uncategorized

Joan McKay is a portfolio manager for a bank trust department. McKay meets with two clients, Kevin Murray and Lisa York, to review their investment objectives. Each client expresses an interest in changing his or her individual investment objectives. Both clients currently hold well diversified portfolios of risky assets.

a. Murray wants to increase the expected return of his portfolio. State what action McKay should take to achieve Murray’s objective. Justify your response in the context of the Capital Market Line.

b. York wants to reduce the risk exposure of her portfolio but does not want to engage in borrowing or lending activities to do so. State what action McKay should take to achieve York’s objective. Justify your response in the context of the Security Market Line.

karen kay a portfolio manager at collins asset management is using the capital asset 665514

Aug 30, 2021 | Uncategorized

Briefly explain whether investors should expect a higher return from holding Portfolio A versus Portfolio B under capital asset pricing theory (CAPM). Assume that both portfolios are fully diversified.

Karen Kay, a portfolio manager at Collins Asset Management, is using the capital asset pricing model for making recommendations to her clients. Her research department has developed the information shown in the following exhibit.

Forecast Returns, Standard Deviations, and Betas

a. Calculate expected return and alpha for each stock.

b. Identify and justify which stock would be more appropriate for an investor who wants to

i. add this stock to a well diversified equity portfolio.

ii. hold this stock as a single stock portfolio.

the data below describe a three stock financial market that satisfies the single ind 665515

Aug 30, 2021 | Uncategorized

The data below describe a three stock financial market that satisfies the single index model.

The single factor in this economy is perfectly correlated with the value weighted index of the stock market. The standard deviation of the market index portfolio is 25%.

a. What is the mean excess return of the index portfolio?

b. What is the covariance between stock B and the index?

c. Break down the variance of stock B into its systematic and firm specific components.

compute the expected return standard deviation beta and nonsystematic standard devia 665519

Aug 30, 2021 | Uncategorized

The following are estimates for two of the stocks in problem 1.

The market index has a standard deviation of 22% and the risk free rate is 8%.

a. What is the standard deviation of stocks A and B?

b. Suppose that we were to construct a portfolio with proportions:

Stock A: .30

Stock B: .45

T bills: .25

Compute the expected return, standard deviation, beta, and nonsystematic standard deviation of the portfolio.

competition among these many well backed highly paid aggressive analysts ensures tha 665528

Aug 30, 2021 | Uncategorized

Rewards for Incremental Performance

Consider an investment management fund currently managing a $5 billion portfolio. Suppose that the fund manager can devise a research program that could increase the portfolio rate of return by one tenth of 1% per year, a seemingly modest amount. This program would increase the dollar return to the portfolio by $5 billion X.001, or $5 million. Therefore, the fund would be willing to spend up to $5 million per year on research to increase stock returns by a mere tenth of 1% per year. With such large rewards for such small increases in investment performance, it should not be surprising that professional portfolio managers are willing to spend large sums on industry analysts, computer support, and research effort, and therefore that price changes are, generally speaking, difficult to predict.

With so many well backed analysts willing to spend considerable resources on research, easy pickings in the market are rare. Moreover, the incremental rates of return on research activity may be so small that only managers of the largest portfolios will find them worth pursuing.

Although it may not literally be true that “all” relevant information will be uncovered, it is virtually certain that there are many investigators hot on the trail of most leads that seem likely to improve investment performance. Competition among these many well backed, highly paid, aggressive analysts ensures that, as a general rule, stock prices ought to reflect available information regarding their proper levels.

suppose the stock of a company with market value of 100 million falls by 4 on the da 665529

Aug 30, 2021 | Uncategorized

Using Abnormal Returns to Infer Damages

Suppose the stock of a company with market value of $100 million falls by 4% on the day that news of an accounting scandal surfaces. The rest of the market, however, generally did well that day. The market indexes were up sharply, and based on the usual relationship between the stock and the market, one would have expected a 2% gain on the stock. We would conclude that the impact of the scandal was a 6% drop in value, the difference between the 2% gain that we would have expected and the 4% drop actually observed. One might then infer that the damages sustained from the scandal were $6 million, because the value of the firm (after adjusting for general market movements) fell by 6% of $100 million when investors became aware of the news and reassessed the value of the stock.

gradually to new information and prices are determined by the interaction between su 665540

Aug 30, 2021 | Uncategorized

A “random walk” occurs when:

a. Stock price changes are random but predictable.

b. Stock prices respond slowly to both new and old information.

c. Future price changes are uncorrelated with past price changes.

d. Past information is useful in predicting future prices.

Two basic assumptions of technical analysis are that security prices adjust:

a. Gradually to new information, and study of the economic environment provides an indication of future market movements.

b. Rapidly to new information, and study of the economic environment provides an indication of future market movements.

c. Rapidly to new information, and market prices are determined by the interaction between supply and demand.

d. Gradually to new information, and prices are determined by the interaction between supply and demand.

which one of the following would be a bullish signal to a technical analyst using co 665541

Aug 30, 2021 | Uncategorized

When technical analysts say a stock has good “relative strength,” they mean:

a. The ratio of the price of the stock to a market or industry index has trended upward.

b. The recent trading volume in the stock has exceeded the normal trading volume.

c. The total return on the stock has exceeded the total return on T bills.

d. The stock has performed well recently compared to its past performance.

Which one of the following would be a bullish signal to a technical analyst using contrary opinion rules?

a. The level of credit balances in investor accounts declines.

b. The ratio of bearish investment advisors to the number of advisory services expressing an optimistic opinion is historically quite high.

c. A large proportion of speculators expect the price of stock index futures to rise.

d. The ratio of over the counter (OTC) volume to New York Stock Exchange(NYSE) volume is relatively high.

identify and provide reasons why over an extended period of time value stock investi 665554

Aug 30, 2021 | Uncategorized

Growth and value can be defined in several ways. “Growth” usually conveys the idea of a portfolio emphasizing or including only issues believed to possess above average future rates of per share earnings growth. Low current yield, high price to book ratios, and high price to earnings ratios are typical characteristics of such portfolios. “Value” usually conveys the idea of portfolios emphasizing or including only issues currently showing low price to book ratios, low price to earnings ratios, above average levels of dividend yield, and market prices believed to be below the issues’ intrinsic values.

a. Identify and provide reasons why, over an extended period of time, value stock investing might outperform growth stock investing.

b. Explain why the outcome suggested in (a) should not be possible in a market widely regarded as being highly efficient.

select the statement from the table above that best illustrates each of the followin 665555

Aug 30, 2021 | Uncategorized

Don Sampson begins a meeting with his financial advisor by outlining his investment philosophy as shown below:

Select the statement from the table above that best illustrates each of the following behavioral finance concepts. Justify your selection.

i. Mental accounting.

ii. Overconfidence (illusion of control).

iii. Reference dependence (framing).

assume that you are informed that a given portfolio manager has been evaluated as su 665560

Aug 30, 2021 | Uncategorized

Richard Roll, in an article on using the capital asset pricing model (CAPM) to evaluate portfolio performance, indicated that it may not be possible to evaluate portfolio management ability if there is an error in the benchmark used.

a. In evaluating portfolio performance, describe the general procedure, with emphasis on the benchmark employed.

b. Explain what Roll meant by the benchmark error and identify the specific problem with this benchmark.

c. Draw a graph that shows how a portfolio that has been judged as superior relative to a “measured” security market line (SML) can be inferior relative to the “true” SML.

d. Assume that you are informed that a given portfolio manager has been evaluated as superior when compared to the Dow Jones Industrial Average, the S&P 500, and the NYSE Composite Index. Explain whether this consensus would make you feel more comfortable regarding the portfolio manager’s true ability.

e. Although conceding the possible problem with benchmark errors as set forth by Roll, some contend this does not mean the CAPM is incorrect, but only that there is a measurement problem when implementing the theory. Others contend that because of benchmark errors the whole technique should be scrapped. Take and defend one of these positions.

investors believe that the firm will be able to make good on the remaining interest 665567

Aug 30, 2021 | Uncategorized

Suppose a firm issued a 9% coupon bond 20 years ago. The bond now has 10 years left until its maturity date but the firm is having financial difficulties. Investors believe that the firm will be able to make good on the remaining interest payments, but that at the maturity date, the firm will be forced into bankruptcy, and bondholders will receive only 70% of par value. The bond is selling at $750.

Yield to maturity (YTM) would then be calculated using the following inputs:

The yield to maturity based on promised payments is 13.7%. Based on the expected payment of $700 at maturity, however, the yield to maturity would be only 11.6%. The stated yield to maturity is greater than the yield investors actually expect to receive.

if you expect their yields to maturity to be 8 at the beginning of next year what wi 665572

Aug 30, 2021 | Uncategorized

Assume you have a 1 year investment horizon and are trying to choose among three bonds. All have the same degree of default risk and mature in 10 years. The first is a zero coupon bond that pays $1,000 at maturity. The second has an 8% coupon rate and pays the $80 coupon once per year. The third has a 10% coupon rate and pays the $100 coupon once per year.

a. If all three bonds are now priced to yield 8% to maturity, what are their prices?

b. If you expect their yields to maturity to be 8% at the beginning of next year, what will their prices be then? What is your before tax holding period return on each bond? If your tax bracket is 30% on ordinary income and 20% on capital gains income, what will your after tax rate of return be on each?

c. Recalculate your answer to (b) under the assumption that you expect the yields to maturity on each bond to be 7% at the beginning of next year.

fill in the table below for the following zero coupon bonds all of which have par va 665574

Aug 30, 2021 | Uncategorized

Fill in the table below for the following zero coupon bonds, all of which have par values of $1,000.

ignoring credit quality identify four features of these issues that might account fo 665583

Aug 30, 2021 | Uncategorized

Assume that two firms issue bonds with the following characteristics. Both bonds are issued at par.

Ignoring credit quality, identify four features of these issues that might account for the lower coupon on the ABC debt. Explain.

if the firm were to issue a fixed rate note with a 15 year maturity what coupon rate 665584

Aug 30, 2021 | Uncategorized

A large corporation issued both fixed and floating rate notes 5 years ago, with terms given in the following table:

a. Why is the price range greater for the 9% coupon bond than the float in grate note?

b. What factors could explain why the floating rate note is not always sold at par value?

c. Why is the call price for the floating rate note not of great importance to investors?

d. Is the probability of call for the fixed rate note high or low?

e. If the firm were to issue a fixed rate note with a 15 year maturity, what coupon rate would it need to offer to issue the bond at par value?

f. Why is an entry for yield to maturity for the floating rate note not appropriate?

what would be the effect if any of an increase in the volatility of interest rates o 665585

Aug 30, 2021 | Uncategorized

On May 30, 1999, Janice Kerr is considering one of the newly issued 10 year AAA corporate bonds shown in the following exhibit.

a. Suppose that market interest rates decline by 100 basis points (i.e., 1%). Contrast the effect of this decline on the price of each bond.

b. Should Kerr prefer the Colina over the Sentinal bond when rates are expected to rise or to fall?

c. What would be the effect, if any, of an increase in the volatility of interest rates on the prices of each bond?

the multiple choice problems following are based on questions that appeared in past 665589

Aug 30, 2021 | Uncategorized

The multiple choice problems following are based on questions that appeared in past CFA examinations.

a. An investment in a coupon bond will provide the investor with a return equal to the bond’s yield to maturity at the time of purchase if:

i. The bond is not called for redemption at a price that exceeds its par value.

ii. All sinking fund payments are made in a prompt and timely fashion over the life of the issue.

iii. The reinvestment rate is the same as the bond’s yield to maturity and the bond is held until maturity.

iv. All of the above.

b. A bond with a call feature:

i. Is attractive because the immediate receipt of principal plus premium produces a high return.

ii. Is more apt to be called when interest rates are high because the interest savings will be greater.

iii. Will usually have a higher yield than a similar non callable bond.

iv. None of the above.

c. The yield to maturity on a bond is:

i. Below the coupon rate when the bond sells at a discount, and above the coupon rate when the bond sells at a premium.

ii. The discount rate that will set the present value of the payments equal to the bond price.

iii. The current yield plus the average annual capital gain rate.

iv. Based on the assumption that any payments received are reinvested at the coupon rate.

d. In which one of the following cases is the bond selling at a discount?

i. Coupon rate is greater than current yield, which is greater than yield to maturity.

ii. Coupon rate, current yield, and yield to maturity are all the same.

iii. Coupon rate is less than current yield, which is less than yield to maturity.

iv. Coupon rate is less than current yield, which is greater than yield to maturity.

e. Consider a 5 year bond with a 10% coupon that has a present yield to maturity of 8%. If interest rates remain constant, 1 year from now the price of this bond will be:

i. Higher

ii. Lower

iii. The same

iv. Par

f. The call feature of a bond means the:

i. Investor can call for payment on demand.

ii. Investor can call only if the firm defaults on an interest payment.

iii. Issuer can call the bond issue before the maturity date.

iv. Issuer can call the issue during the first 3 years.

prepare an unadjusted trial balance for ultimate designs as of october 31 2008 665489

Aug 30, 2021 | Uncategorized

On October 1, 2008, Kristy Gomez established an interior decorating business, Ultimate Designs. During the month, Kristy Gomez completed the following transactions related to the business:

Oct. 1. Kristy transferred cash from a personal bank account to an account to be used for the business, $20,000.

3. Paid rent for period of October 3 to end of month, $1,600.

10. Purchased a truck for $15,000, paying $5,000 cash and giving a note payable for the remainder.

13. Purchased equipment on account, $4,500.

14. Purchased supplies for cash, $1,100.

15. Paid annual premiums on property and casualty insurance, $2,800.

15. Received cash for job completed, $6,100.

21. Paid creditor a portion of the amount owed for equipment purchased on October 13, $2,400.

24. Recorded jobs completed on account and sent invoices to customers, $8,600.

26. Received an invoice for truck expenses, to be paid in November, $875.

27. Paid utilities expense, $900.

27. Paid miscellaneous expenses, $315.

29. Received cash from customers on account, $4,100.

30. Paid wages of employees, $2,500.

31. Withdrew cash for personal use, $3,000.

Instructions

1. Journalize each transaction in a two column journal, referring to the following chart of accounts in selecting the accounts to be debited and credited. (Do not insert the account numbers in the journal at this time.) Journal entry explanations may be omitted.

2. Post the journal to a ledger of four column accounts, inserting appropriate posting references as each item is posted. Extend the balances to the appropriate balance columns after each transaction is posted.

3. Prepare an unadjusted trial balance for Ultimate Designs as of October 31, 2008.

equity realty acts as an agent in buying selling renting and managing real estate 665490

Aug 30, 2021 | Uncategorized

Equity Realty acts as an agent in buying, selling, renting, and managing real estate. The unadjusted trial balance on July 31, 2008, is shown at the top of the following page.

The following business transactions were completed by Equity Realty during August 2008:

Aug. 1. Purchased office supplies on account, $1,500.

2. Paid rent on office for month, $2,500.

3. Received cash from clients on account, $28,720.

5. Paid annual insurance premiums, $3,600.

Aug. 9. Returned a portion of the office supplies purchased on August 1, receiving full credit for their cost, $250.

17. Paid advertising expense, $3,450.

23. Paid creditors on account, $2,670.

29. Paid miscellaneous expenses, $500.

30. Paid automobile expense (including rental charges for an automobile), $1,500.

31. Discovered an error in computing a commission; received cash from the salesperson for the overpayment, $1,000.

31. Paid salaries and commissions for the month, $17,400.

31. Recorded revenue earned and billed to clients during the month, $51,900.

31. Purchased land for a future building site for $75,000, paying $10,000 in cash and giving a note payable for the remainder.

31. Withdrew cash for personal use, $5,000.

31. Rented land purchased on August 31 to a local university for use as a parking lot during football season (September, October, and November); received advance payment of $2,000.

Instructions

1. Record the August 1 balance of each account in the appropriate balance column of a four column account, write Balance in the item section, and place a check mark (??) in the Posting Reference column.

2. Journalize the transactions for August in a two column journal. Journal entry explanations may be omitted.

3. Post to the ledger, extending the account balance to the appropriate balance column after each posting.

4. Prepare an unadjusted trial balance of the ledger as of August 31, 2008.

prepare a corrected unadjusted trial balance as of july 31 of the current year 665491

Aug 30, 2021 | Uncategorized

The following records of Mainstay TV Repair are presented in the working papers:

1. Journal containing entries for the period July 1–31.
2. Ledger to which the July entries have been posted.
3. Preliminary trial balance as of July 31, which does not balance.

Locate the errors, supply the information requested, and prepare a corrected trial balance according to the following instructions. The balances recorded in the accounts as of July 1 and the entries in the journal are correctly stated. If it is necessary to correct any posted amounts in the ledger, a line should be drawn through the erroneous figure and the correct amount inserted above. Corrections or notations may be inserted on the preliminary trial balance in any manner desired. It is not necessary to complete all of the instructions if equal trial balance totals can be obtained earlier. However, the requirements of instructions (6) and (7) should be completed in any event.

Instructions

1. Verify the totals of the preliminary trial balance, inserting the correct amounts in the schedule provided in the working papers.

2. Compute the difference between the trial balance totals.

3. Compare the listings in the trial balance with the balances appearing in the ledger, and list the errors in the space provided in the working papers.

4. Verify the accuracy of the balance of each account in the ledger, and list the errors in the space provided in the working papers.

5. Trace the postings in the ledger back to the journal, using small check marks to identify items traced. Correct any amounts in the ledger that may be necessitated by errors in posting, and list the errors in the space provided in the working papers.

6. Journalize as of July 31 the payment of $110 for gas and electricity. The bill had been paid on July 31 but was inadvertently omitted from the journal. Post to the ledger. (Revise any amounts necessitated by posting this entry.)

7. Prepare a new unadjusted trial balance.

Epic Video has the following unadjusted trial balance as of July 31, 2008:

The debit and credit totals are not equal as a result of the following errors:

a. The balance of cash was overstated by $5,000.

b. A cash receipt of $3,200 was posted as a credit to Cash of $2,300.

c. A debit of $2,780 to Accounts Receivable was not posted.

d. A return of $235 of defective supplies was erroneously posted as a $253 credit to Supplies.

e. An insurance policy acquired at a cost of $500 was posted as a credit to Prepaid Insurance.

f. The balance of Notes Payable was overstated by $4,500.

g. A credit of $600 in Accounts Payable was overlooked when the balance of the account was determined.

h. A debit of $2,000 for a withdrawal by the owner was posted as a debit to Carlton Dey, Capital.

i. The balance of $9,450 in Advertising Expense was entered as $9,540 in the trial balance.

j. Miscellaneous Expense, with a balance of $2,520, was omitted from the trial balance.

Instructions

1. Prepare a corrected unadjusted trial balance as of July 31 of the current year.

2. Does the fact that the unadjusted trial balance in (1) is balanced mean that there are no errors in the accounts? Explain.

what information other than just debit and credit journal entries could the accounti 665496

Aug 30, 2021 | Uncategorized

The following excerpt is from a conversation between Shelley Ryan, the president and chief operating officer of Diamond Construction Company, and her neighbor, Miguel Jimenez.

Miguel: Shelley, I’m taking a course in night school, “Intro to Accounting.” I was wondering— could you answer a couple of questions for me?

Shelley: Well, I will if I can.

Miguel: Okay, our instructor says that it’s critical we understand the basic concepts of accounting, or we’ll never get beyond the first test. My problem is with those rules of debit and credit  you know, assets increase with debits, decrease with credits, etc.

Shelley: Yes, pretty basic stuff. You just have to memorize the rules. It shouldn’t be too difficult.

Miguel: Sure, I can memorize the rules, but my problem is I want to be sure I understand the basic concepts behind the rules. For example, why can’t assets be increased with credits and decreased with debits like revenue? As long as everyone did it that way, why not? It would seem easier if we had the same rules for all increases and decreases in accounts. Also, why is the left side of an account called the debit side? Why couldn’t it be called something simple . . . like the “LE” for Left Entry? The right side could be called just “RE” for Right Entry. Finally, why are there just two sides to an entry? Why can’t there be three or four sides to an entry?

In a group of four or five, select one person to play the role of Shelley and one person to play the role of Miguel.

1. After listening to the conversation between Shelley and Miguel, help Shelley answer Miguel’s questions.

2. What information (other than just debit and credit journal entries) could the accounting system gather that might be useful to Shelley in managing Diamond Construction Company?

shane raburn is planning to manage and operate birdie caddy service at biloxi golf a 665497

Aug 30, 2021 | Uncategorized

Shane Raburn is planning to manage and operate Birdie Caddy Service at Biloxi Golf and Country Club during June through August 2008. Shane will rent a small maintenance building from the country club for $500 per month and will offer caddy services, including cart rentals, to golfers. Shane has had no formal training in record keeping. Shane keeps notes of all receipts and expenses in a shoe box. An examination of Shane’s shoe box records for June revealed the following:

June 1. Withdrew $2,000 from personal bank account to be used to operate the caddy service.

1. Paid rent to Biloxi Golf and Country Club, $500.

2. Paid for golf supplies (practice balls, etc.), $650.

3. Arranged for the rental of 40 regular (pulling) golf carts and 10 gasoline driven carts for $1,500 per month. Paid $750 in advance, with the remaining $750 due June 20.

7. Purchased supplies, including gasoline, for the golf carts on account, $350. Biloxi Golf and Country Club has agreed to allow Shane to store the gasoline in one of its fuel tanks at no cost.

15. Received cash for services from June 1–15, $3,150.

17. Paid cash to creditors on account, $350.

20. Paid remaining rental on golf carts, $750.

22. Purchased supplies, including gasoline, on account, $200.

25. Accepted IOUs from customers on account, $850.

28. Paid miscellaneous expenses, $180.

30. Received cash for services from June 16–30, $3,200.

30. Paid telephone and electricity (utilities) expenses, $160.

30. Paid wages of part time employees, $450.

30. Received cash in payment of IOUs on account, $550.

30. Determined the amount of supplies on hand at the end of June, $390.

Shane has asked you several questions concerning his financial affairs to date, and he has asked you to assist with his record keeping and reporting of financial data.

a. To assist Shane with his record keeping, prepare a chart of accounts that would be appropriate for Birdie Caddy Service.

b. Prepare an income statement for June in order to help Shane assess the profitability of Birdie Caddy Service. For this purpose, the use of T accounts may be helpful in analyzing the effects of each June transaction.

c. Based on Shane’s records of receipts and payments, calculate the amount of cash on hand on June 30. For this purpose, a T account for cash may be useful.

d. A count of the cash on hand on June 30 totaled $4,980. Briefly discuss the possible causes of the difference between the amount of cash computed in (c) and the actual amount of cash on hand.

print a listing of at least two ads for accounting jobs alternatively bring to class 665498

Aug 30, 2021 | Uncategorized

The increasing complexity of the current business and regulatory environment has created an increased demand for accountants who can analyze business transactions and interpret their effects on the financial statements. In addition, a basic ability to analyze the effects of transactions is necessary to be successful in all fields of business as well as in other disciplines, such as law. To better understand the importance of accounting in today’s environment, search the Internet or your local newspaper for job opportunities. Then do one of the following:

1. Print a listing of at least two ads for accounting jobs. Alternatively, bring to class at least two newspaper ads for accounting jobs.

2. Print a listing of at least two ads for nonaccounting jobs for which some knowledge of accounting is preferred or necessary. Alternatively, bring to class at least two newspaper ads for such jobs.

you are a consultant to a large manufacturing corporation that is considering a proj 665500

Aug 30, 2021 | Uncategorized

You are a consultant to a large manufacturing corporation that is considering a project with the following net after tax cash flows (in millions of dollars):

The project’s beta is 1.8. Assuming that rf = 8% and E(rM) =16%, what is the net present value of the project? What is the highest possible beta estimate for the project before its NPV becomes negative?

prepare mccracken s cash budget for the month of may use good form mccracken expects 665476

Aug 30, 2021 | Uncategorized

The following information is budgeted for McCracken Plumbing Supply Company for next quarter:

All sales at McCracken are on credit. Forty percent are collected in the month of sale, 58% in the month following the sale, and the remaining 2% are uncollectible. Merchandise purchases are paid in full the month following the month of purchase. The selling and administrative expenses above include $8,000 of depreciation on display fixtures and warehouse equipment. All other selling and administrative expenses are paid as incurred. McCracken wants to maintain a cash balance of $15,000. Any amount below this can be borrowed from a local bank as needed in increments of $1,000. All borrowings are made at month end.

Required:

Prepare McCracken”s cash budget for the month of May. Use good form. McCracken expects to have $24,000 of cash on hand at the beginning of May.

using this data along with your answer to part 1 above prepare a cash budget in good 665477

Aug 30, 2021 | Uncategorized

The Fraley Company, a merchandising firm, has planned the following sales for the next four months:

Sales are made 40% for cash and 60% on account. From experience, the company has learned that a month’s sales on account are collected according to the following pattern:

The company requires a minimum cash balance of $4,000 to start a month.

Required:

a. Compute the budgeted cash receipts for June.

b. Assume the following budgeted data for June:

Using this data, along with your answer to part (1) above, prepare a cash budget in good form for June. Clearly show any borrowing needed during the month. The company can borrow in any dollar amount, but will not pay any interest until the following month.

prepare the company s production budget for the third quarter of this year the month 665478

Aug 30, 2021 | Uncategorized

Bledso Supply Corporation manufactures and sells cotton gauze. Expected sales of gauze (in boxes) for upcoming months are as follows:

Management likes to maintain a finished goods inventory equal to 25% of the next month”s estimated sales.

Required:

Prepare the company”s production budget for the third quarter of this year (the months of July, August and September) in good form. Include a column for each month and a total column for the entire quarter.

prepare budgeted income statements for november and december 665479

Aug 30, 2021 | Uncategorized

Weldon Industrial Gas Corporation supplies acetylene and other compressed gases to industry. Data regarding the store”s operations follow:

• Sales are budgeted at $360,000 for November, $380,000 for December, and $350,000 for January.

• Collections are expected to be 75% in the month of sale, 20% in the month following the sale, and 5% uncollectible.

• The cost of goods sold is 65% of sales.

• The company purchases 60% of its merchandise in the month prior to the month of sale and 40% in the month of sale. Payment for merchandise is made in themonth following the purchase.

• Other monthly expenses to be paid in cash are $21,900.

• Monthly depreciation is $20,000.

• Ignore taxes.

Statement of Financial Position

October 31

Required:

a. Prepare a Schedule of Expected Cash Collections for November and December.

b. Prepare a Merchandise Purchases Budget for November and December.

c. Prepare Cash Budgets for November and December.

d. Prepare Budgeted Income Statements for November and December.

e. Prepare a Budgeted Balance Sheet for the end of December.

prepare a merchandise purchases budget for november and december 665480

Aug 30, 2021 | Uncategorized

Caprice Corporation is a wholesaler of industrial goods. Data regarding the store”s operations follow:

Sales are budgeted at $350,000 for November, $320,000 for December, and $300,000 for January.

Collections are expected to be 80% in the month of sale, 16% in the month following the sale, and 4% uncollectible.

The cost of goods sold is 70% of sales.

The company purchases 60% of its merchandise in the month prior to the month of sale and 40% in the month of sale. Payment for merchandise is made in the month following the purchase.

The November beginning balance in the accounts receivable account is $78,000.

The November beginning balance in the accounts payable account is $254,000.

Required:

a. Prepare a Schedule of Expected Cash Collections for November and December.

b. Prepare a Merchandise Purchases Budget for November and December.

prepare an unadjusted trial balance for hannah knox architect as of july 31 2008 665481

Aug 30, 2021 | Uncategorized

Hannah Knox, an architect, opened an office on July 1, 2008. During the month, she completed the following transactions connected with her professional practice:

a. Transferred cash from a personal bank account to an account to be used for the business, $25,000.

b. Paid July rent for office and workroom, $2,000.

c. Purchased used automobile for $16,500, paying $1,500 cash and giving a note payable for the remainder.

d. Purchased office and computer equipment on account, $6,500.

e. Paid cash for supplies, $975.

f. Paid cash for annual insurance policies, $1,200.

g. Received cash from client for plans delivered, $3,750.

h. Paid cash for miscellaneous expenses, $240.

i. Paid cash to creditors on account, $2,500.

j. Paid installment due on note payable, $450.

k. Received invoice for blueprint service, due in August, $750.

l. Recorded fee earned on plans delivered, payment to be received in August, $3,150.

m.Paid salary of assistant, $1,500.

n. Paid gas, oil, and repairs on automobile for July, $280.

Instructions

1. Record the above transactions directly in the following T accounts, without journalizing:Cash; Accounts Receivable; Supplies; Prepaid Insurance; Automobiles; Equipment; Notes Payable; Accounts Payable; Hannah Knox, Capital; Professional Fees; Rent Expense; Salary Expense; Automobile Expense; Blueprint Expense; Miscellaneous Expense. To the left of the amount entered in the accounts, place the appropriate letter to identify the transaction.

2. Determine account balances of the T accounts. Accounts containing a single entry only (such as Prepaid Insurance) do not need a balance.

3. Prepare an unadjusted trial balance for Hannah Knox, Architect, as of July 31, 2008.

determine the account balances after all posting is complete accounts containing onl 665482

Aug 30, 2021 | Uncategorized

On March 1, 2008, Kara Frantz established Mudcat Realty, which completed the following transactions during the month:

a. Kara Frantz transferred cash from a personal bank account to an account to be used for the business, $15,000.

b. Paid rent on office and equipment for the month, $2,500.

c. Purchased supplies on account, $850.

d. Paid creditor on account, $400.

e. Earned sales commissions, receiving cash, $15,750.

f. Paid automobile expenses (including rental charge) for month, $2,400, and miscellaneous expenses, $600.

g. Paid office salaries, $3,250.

h. Determined that the cost of supplies used was $575.

i. Withdrew cash for personal use, $1,000.

Instructions

1. Journalize entries for transactions (a) through (i), using the following account titles: Cash; Supplies; Accounts Payable; Kara Frantz, Capital; Kara Frantz, Drawing; Sales Commissions; Office Salaries Expense; Rent Expense; Automobile Expense; Supplies Expense; Miscellaneous Expense. Explanations may be omitted.

2. Prepare T accounts, using the account titles in (1). Post the journal entries to these accounts, placing the appropriate letter to the left of each amount to identify the transactions.

Determine the account balances, after all posting is complete. Accounts containing only a single entry do not need a balance.

3. Prepare an unadjusted trial balance as of March 31, 2008.

4. Determine the following:

a. Amount of total revenue recorded in the ledger.

b. Amount of total expenses recorded in the ledger.

c. Amount of net income for March.

journalize each transaction in a two column journal referring to the following chart 665483

Aug 30, 2021 | Uncategorized

On June 1, 2008, Brooks Dodd established an interior decorating business, Coordinated Designs. During the month, Brooks completed the following transactions related to the business:

June 1. Brooks transferred cash from a personal bank account to an account to be used for the business, $18,000.

5. Paid rent for period of June 5 to end of month, $2,150.

6. Purchased office equipment on account, $8,500.

8. Purchased a used truck for $18,000, paying $10,000 cash and giving a note payable for the remainder.

10. Purchased supplies for cash, $1,200.

12. Received cash for job completed, $10,500.

15. Paid annual premiums on property and casualty insurance, $2,400.

23. Recorded jobs completed on account and sent invoices to customers, $5,950.

24. Received an invoice for truck expenses, to be paid in July, $1,000.

29. Paid utilities expense, $1,200.

29. Paid miscellaneous expenses, $400.

30. Received cash from customers on account, $3,200.

30. Paid wages of employees, $2,900.

30. Paid creditor a portion of the amount owed for equipment purchased on June 6, $2,125.

30. Withdrew cash for personal use, $1,750.

Instructions

1. Journalize each transaction in a two column journal, referring to the following chart of accounts in selecting the accounts to be debited and credited. (Do not insert the account numbers in the journal at this time.) Explanations may be omitted.

2. Post the journal to a ledger of four column accounts, inserting appropriate posting references as each item is posted. Extend the balances to the appropriate balance columns after each transaction is posted.

3. Prepare an unadjusted trial balance for Coordinated Designs as of June 30, 2008.

passport realty acts as an agent in buying selling renting and managing real estate 665484

Aug 30, 2021 | Uncategorized

Passport Realty acts as an agent in buying, selling, renting, and managing real estate. The unadjusted trial balance on October 31, 2008, is shown at the top of the following page.

The following business transactions were completed by Passport Realty during November 2008:

Nov. 1. Paid rent on office for month, $5,000.

2. Purchased office supplies on account, $1,750.

5. Paid annual insurance premiums, $4,800.

10. Received cash from clients on account, $52,000.

15. Purchased land for a future building site for $90,000, paying $10,000 in cash and giving a note payable for the remainder.

17. Paid creditors on account, $7,750.

Nov. 20. Returned a portion of the office supplies purchased on November 2, receiving full credit for their cost, $250.

23. Paid advertising expense, $2,100.

27. Discovered an error in computing a commission; received cash from the salesperson for the overpayment, $700.

28. Paid automobile expense (including rental charges for an automobile), $1,500.

29. Paid miscellaneous expenses, $450.

30. Recorded revenue earned and billed to clients during the month, $48,400.

30. Paid salaries and commissions for the month, $25,000.

30. Withdrew cash for personal use, $8,000.

30. Rented land purchased on November 15 to local merchants association for use as a parking lot in December and January, during a street rebuilding program; received advance payment of $2,500.

Instructions

1. Record the November 1, 2008, balance of each account in the appropriate balance column of a four column account, write Balance in the item section, and place a check mark (??) in the Posting Reference column.

2. Journalize the transactions for November in a two column journal. Journal entry explanations may be omitted.

3. Post to the ledger, extending the account balance to the appropriate balance column after each posting.

4. Prepare an unadjusted trial balance of the ledger as of November 30, 2008.

verify the totals of the preliminary trial balance inserting the correct amounts in 665485

Aug 30, 2021 | Uncategorized

The following records of Mainstay TV Repair are presented in the working papers:

1. Journal containing entries for the period July 1–31.
2. Ledger to which the July entries have been posted.
3. Preliminary trial balance as of July 31, which does not balance.

Locate the errors, supply the information requested, and prepare a corrected trial balance according to the following instructions. The balances recorded in the accounts as of July 1 and the entries in the journal are correctly stated. If it is necessary to correct any posted amounts in the ledger, a line should be drawn through the erroneous figure and the correct amount inserted above. Corrections or notations may be inserted on the preliminary trial balance in any manner desired. It is not necessary to complete all of the instructions if equal trial balance totals can be obtained earlier. However, the requirements of instructions (6) and (7) should be completed in any event.

Instructions

1. Verify the totals of the preliminary trial balance, inserting the correct amounts in the schedule provided in the working papers.

2. Compute the difference between the trial balance totals.

3. Compare the listings in the trial balance with the balances appearing in the ledger, and list the errors in the space provided in the working papers.

4. Verify the accuracy of the balance of each account in the ledger, and list the errors in the space provided in the working papers.

5. Trace the postings in the ledger back to the journal, using small check marks to identify items traced. Correct any amounts in the ledger that may be necessitated by errors in posting, and list the errors in the space provided in the working papers.

6. Journalize as of July 31 the payment of $125 for advertising expense. The bill had been paid on July 31 but was inadvertently omitted from the journal. Post to the ledger. (Revise any amounts necessitated by posting this entry.)

7. Prepare a new unadjusted trial balance.

prepare a corrected unadjusted trial balance as of march 31 2008 665486

Aug 30, 2021 | Uncategorized

Iberian Carpet has the following unadjusted trial balance as of March 31, 2008.

The debit and credit totals are not equal as a result of the following errors:

a. The balance of cash was understated by $3,000.

b. A cash receipt of $4,500 was posted as a debit to Cash of $5,400.

c. A debit of $1,850 to Accounts Receivable was not posted.

d. A return of $350 of defective supplies was erroneously posted as a $530 credit to Supplies.

e. An insurance policy acquired at a cost of $175 was posted as a credit to Prepaid Insurance.

f. The balance of Notes Payable was understated by $7,500.

g. A credit of $900 in Accounts Payable was overlooked when determining the balance of the account.

h. A debit of $3,500 for a withdrawal by the owner was posted as a credit to Jose Mendrano, Capital.

i. The balance of $7,200 in Advertising Expense was entered as $720 in the trial balance.

j. Gas, Electricity, and Water Expense, with a balance of $6,900, was omitted from the trial balance.

Instructions

1. Prepare a corrected unadjusted trial balance as of March 31, 2008.

2. Does the fact that the unadjusted trial balance in (1) is balanced mean that there are no errors in the accounts? Explain.

determine account balances of the t accounts accounts containing a single entry only 665487

Aug 30, 2021 | Uncategorized

Lynette Moss, an architect, opened an office on April 1, 2008. During the month, she completed the following transactions connected with her professional practice:

a. Transferred cash from a personal bank account to an account to be used for the business, $22,500.

b. Purchased used automobile for $15,300, paying $4,000 cash and giving a note payable for the remainder.

c. Paid April rent for office and workroom, $2,500.

d. Paid cash for supplies, $1,200.

e. Purchased office and computer equipment on account, $5,200.

f. Paid cash for annual insurance policies on automobile and equipment, $1,600.

g. Received cash from a client for plans delivered, $6,500.

h. Paid cash to creditors on account, $1,800.

i. Paid cash for miscellaneous expenses, $300.

j. Received invoice for blueprint service, due in May, $800.

k. Recorded fee earned on plans delivered, payment to be received in May, $3,500.

l. Paid salary of assistant, $1,500.

m.Paid cash for miscellaneous expenses, $210.

n. Paid installment due on note payable, $200.

o. Paid gas, oil, and repairs on automobile for April, $250.

Instructions

1. Record the above transactions directly in the following T accounts, without journalizing: Cash; Accounts Receivable; Supplies; Prepaid Insurance; Automobiles; Equipment; Notes Payable; Accounts Payable; Lynette Moss, Capital; Professional Fees; Rent Expense; Salary Expense; Blueprint Expense; Automobile Expense; Miscellaneous Expense. To the left of each amount entered in the accounts, place the appropriate letter to identify the transaction.

2. Determine account balances of the T accounts. Accounts containing a single entry only (such as Prepaid Insurance) do not need a balance.

3. Prepare an unadjusted trial balance for Lynette Moss, Architect, as of April 30, 2008.

journalize entries for transactions a through i using the following account titles c 665488

Aug 30, 2021 | Uncategorized

On July 1, 2008, Bill Bonds established Genesis Realty, which completed the following transactions during the month:

a. Bill Bonds transferred cash from a personal bank account to an account to be used for the business, $18,000.

b. Purchased supplies on account, $1,000.

c. Earned sales commissions, receiving cash, $14,600.

d. Paid rent on office and equipment for the month, $3,000.

e. Paid creditor on account, $600.

f. Withdrew cash for personal use, $1,500.

g. Paid automobile expenses (including rental charge) for month, $2,000, and miscellaneous expenses, $500.

h. Paid office salaries, $2,800.

i. Determined that the cost of supplies used was $725.

Instructions

1. Journalize entries for transactions (a) through (i), using the following account titles: Cash; Supplies; Accounts Payable; Bill Bonds, Capital; Bill Bonds, Drawing; Sales Commissions; Rent Expense; Office Salaries Expense; Automobile Expense; Supplies Expense; Miscellaneous Expense. Journal entry explanations may be omitted.

2. Prepare T accounts, using the account titles in (1). Post the journal entries to these accounts, placing the appropriate letter to the left of each amount to identify the transactions. Determine the account balances, after all posting is complete. Accounts containing only a single entry do not need a balance.

3. Prepare an unadjusted trial balance as of July 31, 2008.

4. Determine the following:

a. Amount of total revenue recorded in the ledger.

b. Amount of total expenses recorded in the ledger.

c. Amount of net income for July.

the following report was prepared for evaluating the performance of the plant manage 665436

Aug 30, 2021 | Uncategorized

Classifying costs

The following report was prepared for evaluating the performance of the plant manager of Nuuman Inc. Evaluate and correct this report.

prepare the current assets section of lawler company rsquo s balance sheet at 665438

Aug 30, 2021 | Uncategorized

Using the above information, complete the following:

a. Prepare the January income statement for Air Temp Manufacturing Company.

b. Determine the inventory balances at the end of the first month of operations. Manufacturing company balance sheet Partial balance sheet data for Lawler Company at December 31, 2012, are as follows:

Prepare the Current Assets section of Lawler Company’s balance sheet at

determine the cost of direct materials used in production by saron during the month 665439

Aug 30, 2021 | Uncategorized

December 31, 2012.

Cost of direct materials used in production for a manufacturing company Saron Manufacturing Company reported the following materials data for the month ending April 30, 2012:

Determine the cost of direct materials used in production by Saron during the month ended April 30, 2012.

two items are omitted from each of the following three lists of cost of goods manufa 665440

Aug 30, 2021 | Uncategorized

Cost of goods manufactured for a manufacturing company

Two items are omitted from each of the following three lists of cost of goods manufactured statement data. Determine the amounts of the missing items, identifying them by letter.

two items are omitted from each of the following three lists of cost of goods sold d 665442

Aug 30, 2021 | Uncategorized

Income statement for a manufacturing company

Two items are omitted from each of the following three lists of cost of goods sold data from a manufacturing company income statement. Determine the amounts of the missing items, identifying them by letter.

statement of cost of goods manufactured for a manufacturing company cost data for be 665443

Aug 30, 2021 | Uncategorized

Statement of cost of goods manufactured for a manufacturing company Cost data for Bedford Manufacturing Company for the month ending May 31, 2012, are as follows:

a. Prepare a cost of goods manufactured statement for May 2012.

b. Determine the cost of goods sold for May 2012.

cost of goods sold profit margin and net income for a manufacturing company the foll 665444

Aug 30, 2021 | Uncategorized

Cost of goods sold, profit margin, and net income for a manufacturing company The following information is available for Vega Manufacturing Company for the month ending July 31, 2012:

For the month ended July 31, 2012, determine Vega’s (a) cost of goods sold, (b) gross profit, and (c) net income.

using the above information determine the following missing amounts 665445

Aug 30, 2021 | Uncategorized

Cost flow relationships

The following information is available for the first month of operations of Enders Company, a manufacturer of mechanical pencils:

Using the above information, determine the following missing amounts:

a. Cost of goods sold

b. Finished goods inventory

c. Direct materials cost

d. Direct labor cost

e. Work in process inventory

classify each cost as either a product cost or a period cost indicate whether each p 665446

Aug 30, 2021 | Uncategorized

Classifying costs

The following is a list of costs that were incurred in the production and sale of lawn mowers:

a. Attorney fees for drafting a new lease for headquarters offices.

b. Commissions paid to sales representatives, based on the number of lawn mowers sold.

c. Property taxes on the factory building and equipment.

d. Hourly wages of operators of robotic machinery used in production.

e. Salary of vice president of marketing.

f. Gasoline engines used for lawn mowers.

g. Factory cafeteria cashier’s wages.

h. Electricity used to run the robotic machinery.

i. Maintenance costs for new robotic factory equipment, based on hours of usage.

j. License fees for use of patent for lawn mower blade, based on the number of lawn mowers produced.

k. Salary of factory supervisor.

l. Steel used in producing the lawn mowers.

m. Telephone charges for company controller’s office.

n. Paint used to coat the lawn mowers.

o. Straight line depreciation on the robotic machinery used to manufacture the lawn mowers.

p. Tires for lawn mowers.

q. Engine oil used in mower engines prior to shipment.

r. Cash paid to outside firm for janitorial services for factory.

s. Cost of advertising in a national magazine.

t. Salary of quality control supervisor who inspects each lawn mower before it is shipped.

u. Plastic for outside housing of lawn mowers.

v. Steering wheels for lawn mowers.

w. Filter for spray gun used to paint the lawn mowers.

x. Cost of boxes used in packaging lawn mowers.

y. Premiums on insurance policy for factory buildings.

z. Payroll taxes on hourly assembly line employees.

Instructions

Classify each cost as either a product cost or a period cost. Indicate whether each product cost is a direct materials cost, a direct labor cost, or a factory overhead cost. Indicate whether each period cost is a selling expense or an administrative expense. Use the following tabular headings for your answer, placing an “X” in the appropriate column.

identify whether each of the costs is to be classified as direct or indirect define 665448

Aug 30, 2021 | Uncategorized

Cost classifications—service company

A partial list of Frend Hotel’s costs is provided below.

a. Champagne for guests.

b. Cost to mail a customer survey.

c. Training for hotel restaurant servers.

d. Cost to replace lobby furniture.

e. Cost of soaps and shampoos for rooms.

f. Cost of food.

g. Wages of desk clerks.

h. Cost to paint lobby.

i. Cost of advertising in local newspaper.

j. Cost of laundering towels and bedding.

k. Wages of kitchen employees.

l. Guest room telephone costs for long distance calls.

m. Cost of room mini bar supplies.

n. Utility cost.

o. Cost of valet service.

p. General maintenance supplies.

q. Wages of maids.

r. Salary of the hotel president.

s. Depreciation of the hotel.

t. Cost of new carpeting.

u. Wages of bellhops.

v. Wages of convention setup employees.

w. Pay per view movie rental costs (in rooms).

Instructions

1. What would be Frend’s most logical definition for the final cost object?

2. Identify whether each of the costs is to be classified as direct or indirect. Define direct costs in terms of a hotel guest as the cost object.

determine the amounts of the missing items identifying them by letter 665449

Aug 30, 2021 | Uncategorized

Manufacturing income statement, statement of cost of goods manufactured Several items are omitted from each of the following income statement and cost of goods manufactured statement data for the month of December 2010:

Instructions

1. Determine the amounts of the missing items, identifying them by letter.

2. Prepare a statement of cost of goods manufactured for McClellan Company.

3. Prepare an income statement for McClellan Company.

prepare the 2010 statement of cost of goods manufactured 665450

Aug 30, 2021 | Uncategorized

Statement of cost of goods manufactured and income statement for a manufacturing company The following information is available for Deutsch Corporation for 2010:

Instructions

1. Prepare the 2010 statement of cost of goods manufactured.

2. Prepare the 2010 income statement.

indicate whether each period cost is a selling expense or an administrative expense 665451

Aug 30, 2021 | Uncategorized

Classifying costs

The following is a list of costs that were incurred in the production and sale of boats:

a. Cost of electrical wiring for boats.

b. Commissions to sales representatives, based upon the number of boats sold.

c. Salary of shop supervisor.

d. Salary of president of company.

e. Cost of boat for “grand prize” promotion in local bass tournament.

f. Power used by sanding equipment.

g. Hourly wages of assembly line workers.

h. Boat chairs.

i. Legal department costs for the year.

j. Memberships for key executives in the Bass World Association.

k. Cost of normal scrap from defective hulls.

l. Fiberglass for producing the boat hull.

m. Decals for boat hull.

n. Annual fee to pro fisherman Jim Bo Wilks to promote the boats.

o. Yearly cost maintenance contract for robotic equipment.

p. Annual bonus paid to top executives of the company.

q. Masks for use by sanders in smoothing boat hulls.

r. Special advertising campaign in Bass World.

s. Cost of metal hardware for boats, such as ornaments and tie down grasps.

t. Straight line depreciation on factory equipment.

u. Oil to lubricate factory equipment.

v. Salary of chief financial officer.

w. Canvas top for boats.

x. Wood paneling for use in interior boat trim.

y. Cost of paving the headquarters employee parking lot.

z. Steering wheels.

Instructions

Classify each cost as either a product cost or a period cost. Indicate whether each product cost is a direct materials cost, a direct labor cost, or a factory overhead cost. Indicate whether each period cost is a selling expense or an administrative expense. Use the following tabular headings for your answer, placing an “X” in the appropriate column.

indicate whether each period cost is a selling expense or an administrative expense 665452

Aug 30, 2021 | Uncategorized

Classifying costs

The following is a list of costs incurred by several businesses:

a. Charitable contribution to United Fund.

b. Fees charged by collection agency on past due customer accounts.

c. Maintenance costs for factory equipment.

d. Cost of fabric used by clothing manufacturer.

e. Salary of the vice president of manufacturing logistics.

f. Rent for a warehouse used to store finished products.

g. Wages of a machine operator on the production line.

h. Depreciation of tools used in production.

i. Travel costs of marketing executives to annual sales meeting.

j. Cost of sewing machine needles used by a shirt manufacturer.

k. Depreciation of microcomputers used in the factory to coordinate and monitor the production schedules.

l. Maintenance and repair costs for factory equipment.

m. Wages of production quality control personnel.

n. Depreciation of robot used to assemble a product.

o. Cost of a 30 second television commercial.

p. Pens, paper, and other supplies used by the Accounting Department in preparing various managerial reports.

q. Electricity used to operate factory machinery.

r. Factory janitorial supplies.

s. Oil lubricants for factory plant and equipment.

t. Cost of plastic for a telephone being manufactured.

u. Fees paid to lawn service for office grounds upkeep.

v. Telephone charges by president’s office.

w. Surgeon’s fee for knee replacement.

x. Depreciation of copying machines used by the Marketing Department.

Instructions

Classify each of the preceding costs as a product cost or period cost. Indicate whether each product cost is a direct materials cost, a direct labor cost, or a factory overhead cost. Indicate whether each period cost is a selling expense or an administrative expense. Use the following tabular headings for preparing your answer, placing an “X” in the appropriate column.

identify whether each of the costs is to be classified as direct or indirect define 665453

Aug 30, 2021 | Uncategorized

Cost classifications—service company

A partial list of Gaelic Medical Center’s costs is provided below.

a. Operating room supplies used on patients (catheters, sutures, etc.).

b. Utility costs of the hospital.

c. Training costs for nurses.

d. Cost of maintaining the staff and visitors’ cafeteria.

e. Cost of intravenous solutions.

f. Cost of blood tests.

g. Cost of improvements on the employee parking lot.

h. Salary of the nutritionist.

i. General maintenance of the hospital.

j. Cost of patient meals.

k. Cost of laundry services for operating room personnel.

l. Depreciation on patient rooms.

m. Depreciation of X ray equipment.

n. Cost of drugs used for patients.

o. Doctor’s fee.

p. Nurses’ salaries.

q. Overtime incurred in the Records Department due to a computer failure.

r. Salary of intensive care personnel.

s. Cost of X ray test.

t. Cost of new heart wing.

u. Cost of advertising hospital services on television.

Instructions

1. What would be Gaelic’s most logical definition for the final cost object?

2. Identify whether each of the costs is to be classified as direct or indirect. Define direct costs in terms of a patient as a cost object.

prepare the 2010 statement of cost of goods manufactured 665455

Aug 30, 2021 | Uncategorized

Statement of cost of goods manufactured and income statement for a manufacturing company The following information is available for Rosetta Company for 2010:

Instructions

1. Prepare the 2010 statement of cost of goods manufactured.

2. Prepare the 2010 income statement.

discuss whether felix behaved in an ethical manner 665456

Aug 30, 2021 | Uncategorized

Ethics and professional conduct in business

Jarrett Manufacturing Company allows employees to purchase, at cost, manufacturing materials, such as metal and lumber, for personal use. To purchase materials for personal use, an employee must complete a materials requisition form, which must then be approved by the employee’s immediate supervisor. Felix Thecat, an assistant cost accountant, charges the employee an amount based on Jarrett’s net purchase cost. Felix Thecat is in the process of replacing a deck on his home and has requisitioned lumber for personal use, which has been approved in accordance with company policy. In computing the cost of the lumber, Felix reviewed all the purchase invoices for the past year. He then used the lowest price to compute the amount due the company for the lumber. Discuss whether Felix behaved in an ethical manner.

basics indicate whether the following statements are true or false 665464

Aug 30, 2021 | Uncategorized

Basics Indicate whether the following statements are true or false.

1. Managerial accountants have a single role within an organization, collecting and reporting costs to management.

2. Financial accounting reports are general purpose and intended for external users.

3. Managerial accounting reports are special purpose and issued as frequently as needed.

4. Managers’ activities and responsibilities can be classified into three broad functions: cost accounting, budgeting, and internal control.

5. As a result of the Sarbanes Oxley Act of 2002, managerial accounting reports must now comply with generally accepted accounting principles (GAAP).

6. Top managers must certify that a company maintains an adequate system of internal controls.

how many ounces of plastic resin should mate plan on purchasing during the month of 665474

Aug 30, 2021 | Uncategorized

Mate Boomerang Corporation manufactures and sells plastic boomerangs. Expected boomerang sales (in units) for the upcoming months are as follows:

Seven ounces of plastic resin are needed to produce every boomerang. Mate likes to have enough plastic resin on hand at the end of the month to cover 25% of the next month”s production requirements. Mate also likes to maintain a finished goods inventory equal to 10% of the next month”s estimated sales.

Required:

How many ounces of plastic resin should Mate plan on purchasing during the month of October?

compute the amount of inventory that the company should purchase during the months o 665475

Aug 30, 2021 | Uncategorized

All sales at Meeks Company, a wholesaler, are made on credit. Experience has shown that 70% of the accounts receivable are collected in the month of the sale, 26% are collected in the month following the sale, and the remaining 4% are uncollectible. Actual sales for March and budgeted sales for the following four months are given below:

The company”s cost of goods sold is equal to 60% of sales. All purchases of inventory are made on credit. Meeks Company pays for one half of a month”s purchases in the month of purchase, and the other half in the month following purchase. The company requires that end of month inventories be equal to 25% of the cost of goods sold for the next month.

Required:

a. Compute the amount of cash, in total, which the company can expect to collect in May.

b. Compute the budgeted dollar amount of inventory which the company should have on hand at the end of April.

c. Compute the amount of inventory that the company should purchase during the months of May and June.

d. Compute the amount of cash payments that will be made to suppliers during June for purchases of inventory.

the human resources manager of hodgson industrial design estimates that the average 665054

Aug 30, 2021 | Uncategorized

The human resources manager of Hodgson Industrial Design estimates that the average labor rate for the coming year for Hodgson”s production staff will be $25/hour. This estimate is based on a standard mix of personnel at different pay rates, as well as a reasonable proportion of overtime hours worked.

During the first month of the new year, Hodgson has difficulty hiring a sufficient number of new employees, and so must have its higher paid existing staff work overtime to complete a number of jobs. The result is an actual labor rate of $30/hour. Hodgson”s production staff worked 10,000 hours during the month. Its labor rate variance for the month is:

($30/hr Actual rate $25/hour Standard rate) x 10,000 hours = $50,000 Labor rate variance

why is the allocation of default risk less of an issue for brady bonds 665350

Aug 30, 2021 | Uncategorized

1. Many assets trade in more than one type of market. In what types of markets do the following trade?

a. Used cars

b. Paintings

c. Rare coins

2. When mortgages are pooled into securities, the pass through agencies (Freddie Mac and Fannie Mae) typically guarantee the underlying mortgage loans.

If the homeowner defaults on the loan, the pass through agency makes good on the loan; the investor in the mortgage backed security does not bear the credit risk.

a. Why does the allocation of default risk to the pass through agency rather than the security holder make economic sense?

b. Why is the allocation of default risk less of an issue for Brady bonds?

3. How can tax motives contribute to the desire for unbundling?

what is the broadest definition of derivatives 665351

Aug 30, 2021 | Uncategorized

The Hewlett Packard/Compaq Proxy Fight When Carly Fiorini, the CEO of Hewlett Packard, proposed a merger with Compaq Computer, Walter Hewlett, son of the company’s founder and member of the HP board of directors, dissented. The merger had to be approved by shareholders, and Hewlett engaged in a proxy fight to block the deal. One estimate is that HP spent $150 million to lobby shareholders to support the merger; even small shareholders of HP reported receiving 20 or more phone calls from the company in support of the deal.1 the merger ultimately was approved in an uncharacteristically close vote. No surprise that less than 1% of public companies face proxy contests in any particular year.

The real takeover threat is from other firms. If one firm observes another underperforming, it can acquire the underperforming business and replace management with its own team. The stock price should rise to reflect the prospects of improved performance, which provides incentive for firms to engage in such takeover activity.

Quotations

Q: What is the broadest definition of derivatives?

Q: What are the most common forms of derivatives?

Q: In business, what are they used for?

Q: How do over the counter derivatives generally originate?

Q: Why are derivatives potentially dangerous?

Q: If they are so dangerous, why are so many businesses using derivatives?

lanni products is a start up computer software development firm it currently owns co 665353

Aug 30, 2021 | Uncategorized

Lanni Products is a start up computer software development firm. It currently owns computer equipment worth $30,000 and has cash on hand of $20,000 contributed by Lanni’s owners. For each of the following transactions, identify the real and/or financial assets that trade hands. Are any financial assets created or destroyed in the transaction?

a. Lanni takes out a bank loan. It receives $50,000 in cash and signs a note promising to pay back the loan over 3 years.

b. Lanni uses the cash from the bank plus $20,000 of its own funds to finance the development of new financial planning software.

c. Lanni sells the software product to Microsoft, which will market it to the public under the Microsoft name. Lanni accepts payment in the form of 1,500 shares of Microsoft stock.

d. Lanni sells the shares of stock for $80 per share and uses part of the proceeds to pay off the bank loan.

reconsider companies xyz and abc from concept check 5 calculate the percentage chang 665360

Aug 30, 2021 | Uncategorized

a. If you buy 100 shares of IBM stock, to what are you entitled?

b. What is the most money you can make on this investment over the next year?

c. If you pay $50 per share, what is the most money you could lose over the year?

Suppose XYZ in Table 2.3 increases in price to $110, while ABC falls to $20.

Find the percentage change in the price weighted average of these two stocks.

Compare that to the percentage return of a portfolio that holds one share in each company.

Reconsider companies XYZ and ABC from Concept Check 5. Calculate the percentage change in the market value weighted index. Compare that to the rate of return of a portfolio that holds $500 of ABC stock for every $100 of XYZ stock (i.e., an index portfolio).

consider the data in table 2 3 for a hypothetical two stock version of the dow jones 665362

Aug 30, 2021 | Uncategorized

Price Weighted Average

Consider the data in Table 2.3 for a hypothetical two stock version of the Dow Jones Average.

Stock ABC sells initially at $25 a share, while XYZ sells for $100. Therefore, the initial value of the index would be (25 _ 100)/2 _ 62.5. The final share prices are $30 for stock ABC and $90 for XYZ, so the average falls by 2.5 to (30 _ 90)/2 _ 60. The 2.5 point drop in the index is a 4% decrease: 2.5/62.5 _ .04. Similarly, a portfolio holding one share of each stock would have an initial value of $25 _ $100 _ $125 and a final value of $30 _ $90 _ $120, for an identical 4% decrease.

Notice that price weighted averages give higher priced shares more weight in determining performance of the index. For example, although ABC increased by 20%, while XYZ fell by only 10%, the index dropped in value. This is because the 20% increase in ABC represented a smaller price gain ($5 per share) than the 10% decrease in XYZ ($10 per share). The “Dow portfolio” has four times as much invested in XYZ as in ABC because XYZ’s price is four times that of ABC. Therefore, XYZ dominates the average. You might wonder why the DJIA is now (in mid 2003) at a level of about 9,000 if it is supposed to be the average price of the 30 stocks in the index. The DJIA no longer equals the average price of the 30 stocks because the averaging procedure is adjusted whenever a stock splits or pays a stock dividend of more than 10%, or when one company in the group of 30 industrial firms is replaced by another. When these events occur, the divisor used to compute the “average price” is adjusted so as to leave the index unaffected by the event.

suppose xyz were to split two for one so that its share price fell to 50 we would no 665363

Aug 30, 2021 | Uncategorized

Splits and Price Weighted Averages

Suppose XYZ were to split two for one so that its share price fell to $50. We would not want the average to fall, as that would incorrectly indicate a fall in the general level of market prices. Following a split, the divisor must be reduced to a value that leaves the average unaffected. Table 2.4 illustrates this point. The initial share price of XYZ, which was $100 in Table 2.3, falls to $50 if the stock splits at the beginning of the period. Notice that the number of shares outstanding doubles, leaving the market value of the total shares unaffected. The divisor, d, which originally was 2.0 when the two stock average was initiated, must be reset to a value that leaves the “average” unchanged. Because the sum of the post split stock prices is 75, while the presplit average price was 62.5, we calculate the new value of d by solving 75/d _ 62.5. The value of d, therefore, falls from its original value

of 2.0 to 75/62.5 _ 1.20, and the initial value of the average is unaffected by the split:

75/1.20=62.5.

At period end, ABC will sell for $30, while XYZ will sell for $45, representing the same negative 10% return it was assumed to earn in Table 2.3. The new value of the price weighted average is (30 _ 45)/1.20 _ 62.5. The index is unchanged, so the rate of return is zero, rather than the _4% return that would be calculated in the absence of a split.

This return is greater than that calculated in the absence of a split. The relative weight of XYZ, which is the poorer performing stock, is reduced by a split because its initial price is lower; hence the performance of the average is higher. This example illustrates that the implicit weighting scheme of a price weighted average is somewhat arbitrary, being determined by the prices rather than by the outstanding market values (price per share times number of shares) of the shares in the average.

consider the three stocks in the following table represents price at time t and repr 665368

Aug 30, 2021 | Uncategorized

1. Turn to Figure 2.9 and look at the listing for General Mills.

a. What was the firm’s closing price yesterday?

b. How many shares could you buy for $5,000?

c. What would be your annual dividend income from those shares?

d. What must be its earnings per share?

2. Consider the three stocks in the following table. Represents price at time t, and Represents shares outstanding at time t. Stock C splits two for one in the last period.

P0 Q0 P1 Q1 P2 Q2

A 90 100 95 100 95 100

B 50 200 45 200 45 200

C 100 200 110 200 55 400

3.a. Calculate the rate of return on a price weighted index of the three stocks for the first period.

b. What must happen to the divisor for the price weighted index in year 2?

c. Calculate the rate of return for the second period.

find the equivalent taxable yield of the municipal bond in the previous problem for 665370

Aug 30, 2021 | Uncategorized

1. Find the equivalent taxable yield of the municipal bond in the previous problem for tax brackets of zero, 10%, 20%, and 30%.

2. The coupon rate on a tax exempt bond is 5.6%, and the rate on a taxable bond is 8%. Both bonds sell at par. The tax bracket (marginal tax rate) at which an investor would be indifferent between the two bonds is:

a. 30.0%

b. 39.6%

c. 41.7%

d. 42.9%

3. Which security should sell at a greater price?

a. A 10 year Treasury bond with a 9% coupon rate versus a 10 year T bond with a 10% coupon.

b. A 3 month maturity call option with an exercise price of $40 versus a 3 month call on the same stock with an exercise price of $35.

c. A put option on a stock selling at $50, or a put option on another stock selling at

$60 (all other relevant features of the stocks and options may be assumed to be identical).

the expense ratio including 12b 1 fees is 1 what is the rate of return for an invest 665402

Aug 30, 2021 | Uncategorized

Fees and Net Returns

To see how expenses can affect rate of return, consider a fund with $100 million in assets at the start of the year and with 10 million shares outstanding. The fund invests in a portfolio of stocks that provides no income but increases in value by 10%. The expense ratio, including 12b 1 fees, is 1%. What is the rate of return for an investor in the fund?

The initial NAV equals $100 million/10 million shares _ $10 per share. In the absence of expenses, fund assets would grow to $110 million and NAV would grow to $11 per share, for a 10% rate of return. However, the expense ratio of the fund is 1%. Therefore, $1 million will be deducted from the fund to pay these fees, leaving the portfolio worth only $109 million, and NAV equal to $10.90. The rate of return on the fund is only 9%, which equals the gross return on the underlying portfolio minus the total expense ratio. Fees can have a big effect on performance. Table 4.2 considers an investor who starts with $10,000 and can choose between three funds that all earn an annual 12% return on investment before fees but have different fee structures. The table shows the cumulative amount in each fund after several investment horizons. Fund Ahas total operating expenses of .5%, no load, and no 12b 1 charges. This might represent a low cost producer like Vanguard.

Fund B has no load but has 1% in management expenses and .5% in 12b 1 fees. This level of charges is fairly typical of actively managed equity funds. Finally, Fund C has 1% in management expenses, no 12b 1 charges, but assesses an 8% front end load on purchases. Note the substantial return advantage of low cost Fund A. Moreover, that differential is greater for longer investment horizons.

Although expenses can have a big impact on net investment performance, it is sometimes difficult for the investor in a mutual fund to measure true expenses accurately. This is because of the common practice of paying for some expenses in soft dollars. A portfolio manager earns soft dollar credits with a stockbroker by directing the fund’s trades to that broker. Based on those credits, the broker will pay for some of the mutual fund’s expenses, such as databases, computer hardware, or stock quotation systems. The soft dollar arrangement means that the stockbroker effectively returns part of the trading commission to the

fund. The advantage to the mutual fund is that purchases made with soft dollars are not included in the fund’s expenses, so the fund can advertise an unrealistically low expense ratio to the public. Although the fund may have paid the broker needlessly high commissions to obtain the soft dollar “rebate,” trading costs are not included in the fund’s expenses. The impact of the higher trading commission shows up instead in net investment performance. Soft dollar arrangements make it difficult for investors to compare fund expenses, and periodically these arrangements come under attack.

the fund has not borrowed any funds but its accrued management fee with the portfoli 665404

Aug 30, 2021 | Uncategorized

The composition of the Fin group Fund portfolio is as follows:

The fund has not borrowed any funds, but its accrued management fee with the portfolio manager currently totals $30,000. There are 4 million shares outstanding.

What is the net asset value of the fund?

match the following descriptions to the proper phase 665417

Aug 30, 2021 | Uncategorized

Three phases of the management process are planning, controlling, and improving. Match the following descriptions to the proper phase:

illustrates the reporting of inventory on the balance sheet for a merchandising and 665419

Aug 30, 2021 | Uncategorized

Illustrates the reporting of inventory on the balance sheet for a merchandising and a manufacturing business. MusicLand Stores, Inc., a retailer of musical instruments, reports only Merchandise Inventory. In contrast, Legend Guitars, manufacturer of guitars, reports Finished Goods, Work in Process, and Materials inventories. In both balance sheets, inventory is reported in the Current Assets section.

three phases of the management process are controlling planning and decision making 665422

Aug 30, 2021 | Uncategorized

Management process

Three phases of the management process are controlling, planning, and decision making. Match the following descriptions to the proper phase.

three phases of the management process are planning directing and controlling match 665423

Aug 30, 2021 | Uncategorized

Management process

Three phases of the management process are planning, directing, and controlling. Match the following descriptions to the proper phase.

for january determine a the cost of goods manufactured and b the cost of goods sold 665427

Aug 30, 2021 | Uncategorized

Cost of goods sold, cost of goods manufactured

Swain Company has the following information for January:

For January, determine (a) the cost of goods manufactured and (b) the cost of goods sold.

which of the following items are properly classified as part of factory overhead for 665431

Aug 30, 2021 | Uncategorized

Classifying costs as factory overhead

Which of the following items are properly classified as part of factory overhead for Caterpillar, a maker of heavy machinery and equipment?

a. Sales incentive fees to dealers

b. Factory supplies used in the Danville, Kentucky, tractor tread plant

c. Depreciation on Peoria, Illinois, headquarters building

d. Interest expense on debt

e. Amortization of patents on new assembly process

f. Steel plate

g. Vice president of finance’s salary

h. Property taxes on the Aurora, Illinois, manufacturing plant

i. Plant manager’s salary at Aurora, Illinois, manufacturing plant

j. Consultant fees for a study of production line employee productivity

from the choices presented in parentheses choose the appropriate term for completing 665433

Aug 30, 2021 | Uncategorized

Concepts and terminology

From the choices presented in parentheses, choose the appropriate term for completing each of the following sentences:

a. The implementation of automatic, robotic factory equipment normally (increases, decreases) the direct labor component of product costs.

b. Payments of cash or the commitment to pay cash in the future for the purpose of generating revenues are (costs, expenses).

c. Feedback is often used to (improve, direct) operations.

d. Advertising costs are usually viewed as (period, product) costs.

e. The balance sheet of a manufacturer would include an account for (cost of goods sold, work in process inventory).

f. A product, sales territory, department, or activity to which costs are traced is called a (direct cost, cost object).

g. Factory overhead costs combined with direct labor costs are called (prime, conversion) costs.

from the choices presented in parentheses choose the appropriate term for completing 665434

Aug 30, 2021 | Uncategorized

Concepts and terminology

From the choices presented in parentheses, choose the appropriate term for completing each of the following sentences:

a. An example of factory overhead is (sales office depreciation, plant depreciation).

b. The plant manager’s salary would be considered (direct, indirect) to the product.

c. Materials for use in production are called (supplies, materials inventory).

d. Direct materials costs combined with direct labor costs are called (prime, conversion) costs.

e. The phase of the management process that uses process information to eliminate the source of problems in a process so that the process delivers the correct product in the correct quantities is called (directing, improving).

f. The wages of an assembly worker are normally considered a (period, product) cost.

g. Short term plans are called (strategic, operational) plans.

a partial list of the costs for wisconsin and minnesota railroad a short hauler of f 665435

Aug 30, 2021 | Uncategorized

Classifying costs in a service company

A partial list of the costs for Wisconsin and Minnesota Railroad, a short hauler of freight, is provided below. Classify each cost as either indirect or direct. For purposes of classifying each cost as direct or indirect, use the train as the cost object.

a. Fuel costs

b. Maintenance costs of right of way, bridges, and buildings

c. Wages of switch and classification yard personnel

d. Cost to lease (rent) train locomotives

e. Wages of train engineers

f. Cost to lease (rent) railroad cars

g. Depreciation of terminal facilities

h. Payroll clerk salaries

i. Safety training costs

j. Cost of track and bed (ballast) replacement

k. Salaries of dispatching and communications
personnel

given these correlations which of the following portfolios constructed from these st 664838

Aug 30, 2021 | Uncategorized

Minimum Variance Portfolio Stocks A, B, and C each have the same expected return and standard deviation. The following shows the correlations between returns on these stocks:

Given these correlations, which of the following portfolios constructed from these stocks would have the lowest risk?

a. One equally invested in stocks A and B.

b. One equally invested in stocks A and C.

c. One equally invested in stocks B and C.

d. One totally invested in stock C.

markowitz efficient frontier which of the following portfolios cannot lie on the eff 664839

Aug 30, 2021 | Uncategorized

Markowitz Efficient Frontier Which of the following portfolios cannot lie on the efficient frontier as described by Markowitz?

minimum variance portfolio why is the minimum variance portfolio important in regard 664841

Aug 30, 2021 | Uncategorized

Portfolio Volatility True or false: If two stocks have the same standard deviation of 45 percent, then any portfolio of the two stocks will also have a standard deviation of 45 percent.

Diversification You are an investment adviser and a client makes the following statement:

I do not want a diversified portfolio since I will never get the highest possible return. How do you respond to your client?

Investment Opportunity Set You have a portfolio created from two assets. As you add more of the lower risk asset to your portfolio, the risk of your portfolio increases. What do you know about your current portfolio?

Minimum Variance Portfolio Why is the minimum variance portfolio important in regard to the Markowitz efficient frontier?

standard deviations using the information in the previous question calculate the sta 664842

Aug 30, 2021 | Uncategorized

Expected Returns Use the following information on states of the economy and stock returns to calculate the expected return for Dingaling Telephone:

Standard Deviations Using the information in the previous question, calculate the standard deviation of returns.

expected returns calculate the expected returns for roll and ross by filling in the 664843

Aug 30, 2021 | Uncategorized

Expected Returns Calculate the expected returns for Roll and Ross by filling in the following table (verify your answer by expressing returns as percentages as well as decimals):

standard deviations calculate the standard deviations for roll and ross by filling i 664844

Aug 30, 2021 | Uncategorized

Standard Deviations Calculate the standard deviations for Roll and Ross by filling in the following table (verify your answer using returns expressed in percentages as well as decimals):

portfolio expected returns calculate the expected return on a portfolio of 45 percen 664845

Aug 30, 2021 | Uncategorized

Portfolio Expected Returns Calculate the expected return on a portfolio of 45 percent Roll and 55 percent Ross by filling in the following table:

calculating returns and standard deviations based on the following information calcu 664847

Aug 30, 2021 | Uncategorized

Calculating Returns and Standard Deviations Based on the following information, calculate the expected return and standard deviation for the two stocks.

your portfolio is invested 25 percent each in a and c and 50 percent in b what is th 664848

Aug 30, 2021 | Uncategorized

Returns and Standard Deviations Consider the following information:

a. Your portfolio is invested 25 percent each in A and C, and 50 percent in B. What is the expected return of the portfolio?

b. What is the variance of this portfolio? The standard deviation?

portfolio returns and volatilities fill in the missing information in the following 664849

Aug 30, 2021 | Uncategorized

Portfolio Returns and Volatilities Fill in the missing information in the following table. Assume that Portfolio AB is 30 percent invested in Stock A.

portfolio returns and volatilities given the following information calculate the exp 664850

Aug 30, 2021 | Uncategorized

Portfolio Returns and Volatilities Given the following information, calculate the expected return and standard deviation for a portfolio that has 45 percent invested in Stock A, 35 percent in Stock B, and the balance in Stock C.

portfolio variance use the following information to calculate the expected return an 664851

Aug 30, 2021 | Uncategorized

Portfolio Variance Use the following information to calculate the expected return and standard deviation of a portfolio that is 40 percent invested in 3 Doors, Inc., and 60 percent invested in Down Co.:

what are the expected return and standard deviation of the minimum variance portfoli 664854

Aug 30, 2021 | Uncategorized

Minimum Variance Portfolio Consider two stocks, Stock D with an expected return of 13 percent and a standard deviation of 39 percent and Stock I, an international company, with an expected return of 16 percent and a standard deviation of 53 percent. The correlation between the two stocks is _.10. What is the weight of each stock in the minimum variance portfolio?

Minimum Variance Portfolio What are the expected return and standard deviation of the minimum variance portfolio in the previous problem?

Minimum Variance Portfolio Asset K has an expected return of 15 percent and a standard deviation of 41 percent. Asset L has an expected return of 6 percent and a standard deviation of 10 percent. The correlation between the assets is .09. What are the expected return and standard deviation of the minimum variance portfolio?

using the quick and dirty scattergraph method derive a cost formula for utilities 665042

Aug 30, 2021 | Uncategorized

The owner of the Diamondhead restaurant in Honolulu would like to determine the fixed and variable components of the restaurant”s utility expenses. The owner believes  that the variable component of the utilities cost is driven by the number of meals served.

Required:

a. Plot the data on the graph below.

b. Using the quick and dirty scattergraph method, derive a cost formula for utilities

cost.

c. c Use your cost formula to predict the utilities cost if 5,200 meals are served.

calculate what arlo s should expect for total variable cost if 9 000 t shirts are so 665043

Aug 30, 2021 | Uncategorized

Arlo”s T shirt Shop only has three costs: T shirt cost, rent cost on the shop, and

utilities cost. Arlo”s sells the T shirt for $14.50 each. Management has prepared the

following estimated cost information for next month:

Assume that all of the activity levels mentioned in this problem are within the relevant

range.

Required:

a. Calculate what Arlo”s should expect for total variable cost if 9,000 T shirts are sold

next month.

b. Prepare Arlo”s contribution approach income statement for a monthly sales volume

level of 10,000 T shirts.

operating expenses are a mixture of fixed costs and variable and mixed costs that va 665045

Aug 30, 2021 | Uncategorized

Butler Sales Company is a distributor that has an exclusive franchise to sell a particular product made by another company. Butler Sales Company”s income statements for the last two years are given below:

Operating expenses are a mixture of fixed costs and variable and mixed costs that vary with respect to the number of units sold.

Required:

a. Estimate the company”s variable operating expenses per unit, and its total fixed operating expenses per year.

b. Compute the company”s contribution margin for this year.

estimate buff s cost formula for monthly clean up cost using the high low method 665047

Aug 30, 2021 | Uncategorized

The management of Buff Sports Stadium believes that the number of sporting events each month is a measure of activity for total clean up cost. Shown below are event  figures and total clean up costs for the past four months: 

Required:

a. Estimate Buff”s cost formula for monthly clean up cost using the high low method.

b. Estimate Buff”s cost formula for monthly clean up cost using the least squares  regression method.

using the least squares regression method estimate the cost formula for this cost 665049

Aug 30, 2021 | Uncategorized

Below are cost and activity data for a particular cost over the last four periods. Your boss has asked you to analyze this cost so that management will have a better understanding of how this cost changes in response to changes in activity.

Required:

Using the least squares regression method, estimate the cost formula for this cost.

using the least squares regression method estimate the cost formula for this cost 665050

Aug 30, 2021 | Uncategorized

Below are cost and activity data for a particular cost over the last four periods. Your boss has asked you to analyze this cost so that management will have a better understanding of how this cost changes in response to changes in activity.

Required:

Using the least squares regression method, estimate the cost formula for this cost.

hodgson industrial design is using a standard costing system to calculate its invent 665051

Aug 30, 2021 | Uncategorized

Hodgson Industrial Design is using a standard costing system to calculate its inventory balances and cost of goods sold. The company conducts a month end physical inventory count that results in a reasonably accurate set of unit quantities for all inventory items. The cost accountant multiplies each of these unit quantities by their standard costs to derive the ending inventory valuation. This ending balance is $2,500,000.

The beginning inventory account balance is $2,750,000 and purchases during the month were $1,000,000, so the calculation of the cost of goods sold is:

To record the correct ending inventory balance and cost of goods sold, Hodgson records the following entry, which clears out the purchases asset account and adjusts the ending inventory balance to $2,500,000:

please find attached 2012 and 2013 reports 663063

Aug 30, 2021 | Uncategorized

Length: 2000 words

Task:

Referring to the 2012 and 2013 annual reports of Flight Centre

1) Apply two of the interpretive techniques, analyse the financial data contained in the three financial statements and comment on the company’s profitability, liquidity and gearing.
Calculation for the financial statements should be done in Microsoft Excel according to the financial data providing in the annual reports.

2) Critique the usefulness of publicly available financial information contained in the annual report of a company from the perspective of a potential investor.

Structure of the Report

Executive summary

Table of contents

Introduction

Body

Conclusion

References

Appendix of all calculations

Your report must include as an appendix details of all calculations completed as part of the interpretive techniques applied to reach your conclusions.

Note: There shouldn’t be any plagiarism at all, it’s very important. Also there should be at least 10 APA Style references. Lastly please do all the calculation in Microsoft Excel. Please Find Attached 2012 and 2013 Reports. Thanks

Document Preview:

Length: 2000 words Task: Referring to the 2012 and 2013 annual reports of Flight Centre 1) Apply two of the interpretive techniques, analyse the financial data contained in the three financial statements and comment on the company’s profitability, liquidity and gearing. Calculation for the financial statements should be done in Microsoft Excel according to the financial data providing in the annual reports. 2) Critique the usefulness of publicly available financial information contained in the annual report of a company from the perspective of a potential investor. Structure of the Report Executive summary Table of contents Introduction Body Conclusion References Appendix of all calculations Your report must include as an appendix details of all calculations completed as part of the interpretive techniques applied to reach your conclusions. Note: There shouldn’t be any plagiarism at all, it’s very important. Also there should be at least 10 APA Style references. Lastly please do all the calculation in Microsoft Excel. Please Find Attached 2012 and 2013 Reports. Thanks

Attachments:

Accounting MB….docx

1. FLT 2013 A….pdf

FLT 2012 Annu….pdf

brief exercise 13 15 selected data taken from a recent year s financial statements o 663066

Aug 30, 2021 | Uncategorized

Brief Exercise 13 15

Selected data taken from a recent year’s financial statements of trading card company
Topps Company, Inc. are as follows (in millions).

Compute these ratios: current cash debt coverage ratio, cash debt coverage ratio, and free cash flow. Provide a brief interpretation of your results.
(Round answers to 2 decimal places, e.g. 0.12.)

Current cash debt coverage ratio			times
Cash debt coverage ratio			times
Free Cash Flow

schrager manufacturing company has two production departments cutting and assembly j 663106

Aug 30, 2021 | Uncategorized

Schrager Company has two production departments: Cutting and Assembly. July 1 inventories are Raw Materials $4,200, Work in Process—Cutting $2,900, Work in Process—Assembly $10,600, and Finished Goods $31,000. During July, the following transactions occurred.

Journalize the transactions. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

week 3 discussion questionin working out your responses to the discussion question y 663210

Aug 30, 2021 | Uncategorized

Week 3 Discussion QuestionIn working out your responses to the Discussion Question, you should choose examples from your own experience or find appropriate cases on the Web that you can discuss. Credit will be given for references you make to relevant examples from real companies.

Consider the following statement: To maximise profit, you need to sell your output at the highest price. After what you have learned this week with regards to costing systems and pricing of products, analyse the validity of this statement. How should marginal costs be considered when determining prices?

Please submit your initial response through the Turnitin submission link below in addition to posting it to the Discussion Board thread.

Week 3 Hand in Assignment

Managing Finance Week 3 Hand In Assignment

A computer manufacturer produces three types of devices:mobile phones, tablets, and computers. For the production of these three devices you have the following information:

ABC analysis suggested that overhead costs are distributed to the three products according to the table below:

For each of the three products, the company aims at a different percentage for profit. Under the full absorption costing method and the targeted profit percentage, the prices of the three products should be:

1. Calculate the aimed profit percentages for the three products and under the full absorption costing method, with overhead costs absorbed on the basis of direct labour hours.
2. Use the profit percentages that you derived in (1) and calculate the prices of the three products under the ABC system.
3. Recommend a cost system and include any changes that you would suggest to the pricing strategy of the computer company (target length 300 words).

which of the following costs associated with the truck will be treated as a revenue 663227

Aug 30, 2021 | Uncategorized

A lump sum purchase or basket purchase involves paying a single price for several assets as a group.

True or False

The double declining balance method is an accelerated method of depreciation.

True or False

The gain or loss on the sale of a plant asset is determined by comparing:

sale value and original cost.

sale value and book value.

sale value and residual value.

book value and residual value.

A company purchased a computer on July 1, 2015 for $50,000. Estimated useful life of the computer was 5 years and it has no residual value. Which of the following methods should be used to best match its expense against the revenue it produces?

the straight line method

the first in, first out method

the units of production method

the double declining balance method

When a plant asset is sold for a price lower than its book value, there will be a gain.

True or False

Which of the following accounting principles requires businesses to record depreciation?

the matching principle

the going concern principle

the cost principle

the revenue recognition principle

Which of the following is included in the cost of a plant asset?

amounts paid to make the asset ready for its intended use

replacement of damaged parts of the asset

regular repair and maintenance cost

wages of workers who work with the asset

Iverycoast Inc. purchased a van on January 1, 2015, for $800,000. Estimated life of the van was 5 years, and its estimated residual value was $90,000. Iverycoast uses the straight line method of depreciation. At the beginning of 2017, the company revised the total estimated life of the asset from 5 years to 4 years. The estimated residual value remained the same as estimated earlier. Calculate the depreciation expense for the year 2017.

$250,000

$220,000

$213,000

$145,000

Which of the following is true of asset turnover ratio?

It measures how efficiently a business uses its sales to finance the assets.

It measures how the ending inventory helps in increasing the value of assets.

It measures how efficiently a business uses its net profit to finance the assets.

It measures how efficiently a business uses its average total assets to generate sales.

Which of the following is an expense resulting from decline in the utility of a natural resource?

depletion

amortization

depreciation

obsolescence

Fred owns a delivery truck. Which of the following costs, associated with the truck, will be treated as a revenue expenditure?

modification for new use

addition to storage capacity

major engine overhaul

oil change and lubrication

If a company uses the contra account, Accumulated Amortization, this account will typically be shown on the balance sheet.

True or False

A company purchased a used machine for $10,000. The machine required installation costs of $1,000 and insurance while in transit of $500. At which of the following amounts would the machine be recorded?

$10,500

$11,000

$10,000

$11,500

Steel Rolling Company purchased a mine on January 1, 2015, for $500,000 and it is estimated to contain 30,000 tons of iron ore. There is no residual value. The company has extracted 2,500 tons of ore in 2015 and 3,800 tons of ore in 2016. What is depletion expense for 2016? (Do not round your intermediate calculations).

$42,667

$63,667

$63,333

$33,333

Attachments:

quiz question….doc

current development in accounting thoughts 663248

Aug 30, 2021 | Uncategorized

hi.i want u to do my assignment for subject Current development in accounting thougts.plz make sure that all the data u put is write by your own words not a single word copy from internet or some other source because i want to put it on turnition where they show all the work if u copied from internet or from some websites.just give me quality work and plagirism free work.thanks

Document Preview:

Assessment item 2 Assignment 2 Value: 15% Length: 1500 words Task Content assessed: Various normative theories, measurement issues under IFRS and  Conceptual framework ?Key generic skills: Research, critical thinking and written communication. ?Subject Learning Outcome for Question 1:  Be able to apply theoretical knowledge to analyse and synthesize complex issues in the accounting practice. Question 1 Short report 8 marks ( 800 words excluding table of content and references) Refer to the Article ICAEW (2011) ‘Measurement in financial reporting information for better market initiative’ Financial Reporting Faculty,  icaew.com/bettermarkets. Write a critical comments report on the above article by focusing on the following points:  Why has accounting measurement  become a controversial issue in the recent debate in financial reporting? In recent years accounting standards have been released, which have shown a movement away from historical costs and a movement towards fair values. Why do you think this is occurring? Further, why do you think that conceptual frameworks have not been amended to stipulate an alternative historical cost such as fair values? Compare and contract measurement choices, explain in your own words the impact of wrong choices of measurement for an organisation. Subject Learning Outcome for Question 2 : Be able to critically analyse established knowledge of social power and its influence on financial reporting through legitimize concepts. ?  Question 2   Short report 7 marks ( 700 words excluding table of content and references) Refer to the article Hines, R. (1991)  ‘ The FABS’s conceptual framework, financial accounting and the maintenance of the social world’ , Accounting organization and Society, 16(4), pp. 313 51 Hines made the following statement in her (1991, p.328) article: Conceptual Frameworks presume, legitimize and produce the assumptions of an objective world and as such  they play a part in constituting the social…

Attachments:

Glen assignme….docx

create a powerpoint presentation to provide a succinct explanation 663251

Aug 30, 2021 | Uncategorized

Assignment # 1

Value:15%

Task

The assessment is based on two blog entries, Blog 1 and Blog 4 which will be posted on the Resouce section under Assignment.

Assignment Question 1 (7.5%)

Create a PowerPoint Presentation to provide a succinct explanation of how the implementation of cloud computing relates to an organisations strategy and how it could affect a company’s value chain. Use a recent announcement by a company to illustrate your explanation. Your presentation should be a maximum of 10 slides. Please include any accompanying notes (in the note section of your presentation) you would use for a 10 minute presentation. Alternatively you can use Voice over PowerPoint to provide a 10 minute presentation. Ensure you refer to the marking criteria specified in the subject outline.

Assignment Question 2 (7.5%)

Your manager has requested a report explaining how ERP can value add. Include in your report any potential risks that should be avoided when implementing a cloud based ERP solution in an organisation. Use the blog post above as a starting point . Your report, including executive summary should be maximum length 1200 words.

Question 1 should be pasted in word and then uploaded onto Turnitin.

Rationale

This assignment is designed to enable you to demonstrate your ability to:

• understand and apply foundation principles relating to computerised information systems in contemporary organisations

• explain the role of data analysis tools and data mining;

• to illustrate typical network configurations and identify the components of a network, particularly identifying the role that cloud computing has in a network;

• evaluate accounting information system architecture, particularly identifying the role that cloud computing and ERP have as the basis for an accounting information system;

• identify organisational risk and the impact that cloud computing and ERP systems have on that risk

Attachments:

ACC539 Assign….docx

acct 640 case 3 performance drinks contribution margin reporting 663373

Aug 30, 2021 | Uncategorized

ACCT640 – Managerial Accounting Fall 2013 Case #3 – Performance Drinks A further study of: Regression Analysis Contribution Margin Reporting Cost Volume Profit Analysis Differential Analysis Capital Budgeting Written by: Tim Bergsma, CMA, CFE Assistant Professor – Accounting Davenport University Donald W. Maine – College of Business Email: tbergsma@davenport.edu Background: Performance Drinks, LLC is owned by Dave N. Port. Performance Drinks produces a variety of sports centered drinks. They began operations in 1993 shortly after Mr. Port graduated with his M.B.A. from Davenport University. The company saw early success as sports and fitness nutritional products gained new popularity in the 1990’s. Financially the company is sound and has been wise in controlling their growth over the years. However, within the last 18 months Mr. Port has noticed a drop in overall company profitability. This is especially troubling considering that the company has continued to experience top line growth. Mr. Port and his management team have been considering developing a new product line. However, those plans have been put on hold until they can figure out why their profits are shrinking. Performance Drinks makes four different kinds of sports drinks. Those drinks are as follows: • Basic • Hydration • Intensity • Post Workout Each of these drinks contains a slightly different nutritional profile and is targeted for different users and uses. The Basic drink has the least nutritional benefit and is targeted for general consumption. The Hydration product targets endurance athletes and specializes in hydration replacement. The Intensity product was designed with energy enhancement in mind. It serves the needs of extreme athletes who need long durations of sustained energy. Lastly, the Post Workout product is a nutritional replacement product that is generally used following exertion. Information Related to Case #2 (this section is the same as you received when you were assigned Case #2): You are the Controller for Performance Drinks. You feel as though you have a good handle on the financial reporting and the overall company performance. However, admittedly, your accounting information system has been designed to serve the needs of external users from an aggregate perspective. To that end you utilize absorption costing exclusively within the organization. You recall studying the concept of Activity Based Management (ABM) and Activity Based Costing (ABC) while taking a managerial accounting course. You wonder if applying those ideas to your business would help to uncover the mystery of the disappearing profits. You recall from your Management Accounting class that product costs are comprised of: • Direct Materials • Direct Labor • Manufacturing Overhead You don’t suspect that anything strange is going with your direct costs. You do wonder, however, if a more thorough understanding of your indirect costs may be in order. Over a series of weeks you talk with a variety of employees, representing a multitude of functional areas, from within the company. During those conversations you take careful note on what activities might be consuming resources and how those activities might be measured. You sharpen your pencil and begin to unpack what you’ve learned. You start with reviewing last month’s Product Level Profit Report. That report is following: Since your primary area of focus is on the indirect costs you compile the following report which further details your overhead charges: Overhead Activities: Using traditional costing methods, which support your absorption costing system, you base overhead allocation on direct labor cost. Furthermore, “fringe benefits” are a function of direct labor cost. As a result of your many meetings to discuss company overhead you determine that the majority of your indirect costs are related to four primary activities. Those activities are equipment set ups, production runs, production management and machine hour capacity. “Production Management” refers to a number of items that are correlated to the number of products the company produces. Ultimately you determine that your key activities have the following usage patterns, as they pertain to the monthly overhead costs: Upon reviewing budget data from the last budget cycle you discover that the monthly number of set ups was estimated to be 85. The number of production runs was estimated to be 250. That monthly machine hour capacity is presently at 20,000 machine hours. Lastly, Performance Drinks produces a total of four products. After talking with the Plant Manager you create the following usage data relative to products and activities: New Information Pertaining to Case #3: The financial reporting to date has been done using absorption costing. That is to say that the manufacturing costs included direct materials, direct labor, variable manufacturing overhead and fixed manufacturing overhead. In this sense the Income Statements have historically reported Gross Margin. Following is a Monthly Income Statement, based on absorption costing, for Performance Drinks: You begin to wonder if there would be any value in repackaging the income statement in a way that would report Contribution Margin as opposed to Gross Margin. You know that in order to report Contribution Margin you will need to understand your costs as variable and fixed. Unfortunately the general ledger does not specifically report costs as variable and fixed. You remember learning that regression analysis can be used to generate data that can be used to create a total cost equation. With the total cost equation we can understand our total cost as the sum of fixed costs and variable costs. After doing some research your collect the following data related to overhead and possible causal factors: Requirement #1 Using the data above, which has also been provided electronically in Excel, run the following regression analyses: • Linear regression analyzing total overhead cost and units sold • Linear regression analyzing total overhead cost and machine hours used • Multiple regression analysis analyzing total overhead cost along with both units sold and machine hours used Requirement #2 Based on the results from the three regression analyses determine which correlation provides the best estimate of the total cost equation. Explain why you selected the correlation that you did. Requirement #3 Write out the total cost equation using the results from the multiple regression test. Requirement #4 Create a “Contribution” formatted income statement using the results from the multiple regression test. Your selling price per unit and your direct material cost per unit and your direct labor cost per unit and your fringe benefits all come from the original “Traditional” income statement. Use the following additional information regarding machine hours, used by each product, to compute variable overhead. Reference the following sales volumes, by product, for your cost allocation related to units sold. This data will help you calculate variable overhead. Use the following template as a guide for the format of your “Contribution” Income Statement: Requirement #5 Compute the following: • Break even point in units • Break even point in sales dollars • Targeted profit point in units (use $50,000 as your targeted profit point) • Margin of Safety Requirement #6 A new customer has surfaced. That customer has asked you to consider producing a special one time order for them. This special order would require a modification to the recipe that will slightly increase the variable cost per unit. Furthermore, there would be a small fixed cost addition. The details for the order as follows: Conduct a differential analysis regarding this special order. Would you accept this order under the conditions provided? Explain and defend your position. Requirement #7: Your management team has asked you to consider investing in a new piece of equipment. The details of that investment opportunity are following: The discount rate for this project is 5%. Compute the following: • Net Present Value • Internal Rate of Return Would you recommend investing in this new piece of equipment? Explain and defend your position. Clarification on format and data: Clear communication and professionalism are important. Defending your answer with data is important. • An electronic copy of this Case (this document) is available within Blackboard. Additionally, an Excel file, containing the necessary data for the case will be available within Blackboard. • Create one professional report, in Word, that contains all of answers. In that report you should clearly label all of your answers. Make your answers easy to read and find. Imagine you were giving this report to your boss. Further imagine you have to lead your boss and the executive team through your findings. You will then have one Word document as your final product. You will also have one Excel file. • Grading is based on both accuracy (see rubric) and your ability to communicate your answers professionally and clearly. • Use the following naming structure for your files: last name_first initial_case3.docx. Of course your Excel file will have an .xls suffix. • Double space your report. • Put good thought into how you organize your Excel document. Part of your grade will be based upon the usability and layout of your Excel file. Imagine that have to give the electronic copy of your Excel file to your boss, or a peer, to work with. Imagine that you could not coach them at all on how to use your file. Is your file organized and labeled so clearly that anyone could use it, easily, without instructions from you? You want to strive for that kind of clarity in your work. • Your report should have a title page. Use APA 6th edition for guidance on title pages. • You will physically hand in your report. You will also upload to Blackboard both your Word document and your Excel file. • Due date: Tuesday, October 22nd at 6:00 PM EDT • Late submissions will result in the following: 10% reduction in score for each 24 hour period of being late (up to 3 days). After 3 days late zero credit will be earned. • As always please come to me with learning questions. This project is a learning experience. Rubric: This project is worth 25% (250 points) of your overall course grade. I will convert your scores to a 250 point scale.

Attachments:

ACCT640 Case ….xlsx

ACCT640 Case ….docx

it is essential that presentation of assignments adheres to accepted standards 663393

Aug 30, 2021 | Uncategorized

Assignment 1

Value:15%

Task

This assessment task consists of two (2) questions: a newsletter, and a question on financial statement presentation. A total of 50 marks are allocated to the questions below, which will then be converted to a mark out of 15%.

Rationale

This assessment task is designed to assess your understanding of topics 1 and 2 of the subject.

Marking criteria

A detailed marking rubric has been provided in the ‘Requirements’ section below for each question.

Presentation

Physical presentation of assignments

It is essential that presentation of assignments adheres to accepted standards in relation to neatness and layout, as you are practising to present material in a work situation. Correct formatting and referencing procedures of material should be strictly adhered to for essays. You should submit a proper reference list (using APA referencing style)for all essay type assignments. A reference list contains only those works cited or quoted from in your essay. A bibliography is acceptable for practical type assignments.

For practical questions:

• all journal entries must include narrations unless otherwise specified;
• any ledger accounts should preferably be shown in ‘T’ account format and dates and descriptions be included;
• journal entries and ledger accounts must reflect the strict order of sequence of events;
• financial statements (including extracts) should include proper headings and accord with presentation standards.

Penalties will be incurred if material is not correctly referenced and if presentation is not of an acceptable standard.

Please also note the following:

• Journal entries, ledger accounts, worksheets and financial statements should always balance. If you have to submit a piece of work that does not balance because you cannot detect your error please include some comment about the source of your problem so the marker can provide appropriate feedback.
• Include workings where appropriate. Partial marks can be allocated for workings where the final answer is incorrect.

Please also refer to the detailed guidelines provided in the ‘Requirements’ section for the newsletter question.

Requirements

All workings, when appropriate, must be shown to substantiate your answers.

Question 1 [35 marks]

The regulatory environment for financial reporting

You are a member of a large accounting firm which is responsible for preparing financial reports, including statements and notes to the accounts; and for advising staff in client firms who are responsible for preparing financial reports. The firm only deals with large Australian companies listed on the Australian Stock Exchange. One of your key tasks is to monitor the changes and developments in the financial reporting environmentand summarise them in a regularly published newsletter.

Required:

Prepare a
2page
newsletterthat identifies and summarises developments and changes in the financial reporting environmentfor the period24
July 2014 22 August 2014, inclusive.

Detailed guidelines for completing this question:

1. Monitoring of changes and developments

This will involve regular monitoring of a number of sources over the required period. The sources should be varied in range, as you will need to identify and consider developments/changes relating to:

• Technical issues such as issue of new accounting standards, exposure drafts or other pronouncements or interpretations.
• Regulation and monitoring of financial reporting.
• Political influences or other potential developments (such as identification of any reporting failures) that could impact or may be of interest to staff (such as Enron or Parmalat failure). ‘Political’ does not only mean action from politicians – it would also include lobbying/actions by other groups to promote their own interests – for example there may be articles about companies, or particular interest groups such as Group of 100, saying that if certain accounting standards are introduced this will disadvantage or have a negative impact.

You will need to consider both local (Australian) and international sources and developments. A section on ‘international’ items/developments must be included in the newsletter. This should not be restricted to the IASB.

2. Potential sources

Given the scope of the potential influences on financial reporting you will need to monitor a range of sources. Below is a list of sources that may be of interest, note that this list is not exhaustive, students should search for sources outside of these. Students should not rely on any one type of source, but a range of sources from each category, i.e. do not just look at websites, also check journals, newspapers etc. Examples of possible information sources include:

(i) Websites such as those of:

• Australian Accounting Standards Board
• Financial Reporting Council
• Australian Securities and Investment Commission
• Australian Securities Exchange
• International Federation of Accountants
• Institute of Chartered Accountants in Australia
• CPA Australia
• International Accounting Standards Board
• Financial Accounting Standards Board
• Websites of large accounting firms.

(ii) Professional publications:

• In the Black (CPA)
• Charter (ICAA)

(iii) Newspapers/journals

3. Contents

The restriction of a
2 page newslettermeans thatyouneed to use your own judgement as to whether to include information about specific changes and developments and how much information to include.It is not intended that you provide complete details of changes/developments (although you may consider in particular cases that more detail is needed). The purpose of the newsletter is to alert staff to changes and developments that may impact on their work and provide enough information about these changes/developments to satisfy the following:

• For staff (the intended audience) to understand the nature of the development/change and its potential impact (so staff can decide whether they need to investigate further given the nature of their own work),
• Provide sufficient information for staff to be able to obtain further information on the development/change if they wish to,
• The newsletter should where possible be inyour own wordswith sources adequately referenced using the appropriate referencing system.

Some examples ofsignificant items to be considered include:

• Revised or reissued accounting standards or interpretation (both national and international),
• ASIC reviews on financial reporting,
• New ASX disclosures for listed companies.

Given the target audience, it would be assumed that they have a working knowledge of common terms and abbreviations (such as AASB, FASB) so abbreviations may be used.Don’t be afraid to be creative. The effectiveness of a newsletter is impacted by how interesting the readers find it.

What not to consider?

Students need to take care that the developments and the changes considered and included in the newsletter are relevant to the objective, in particular the issues/developments that directly relate to the preparation of financial reports for large companies listed on the Australian Stock Exchange. The newsletter SHOULD NOT consider areas only INDIRECTLY related to the preparation of financial reports such as (and this is not an exhaustive list):

• Fraud,
• Auditing,
• Taxation,
• Other disclosures by listed companies such as:
  • Industry disclosures required by peak organisations,
  • Voluntary disclosures in the area of corporate social responsibility,
  • Voluntary Environmental disclosures.

4. Format

The newsletter should be in the following format:

• The top of the newsletter must include the title (you need to decide on what to call your newsletter) and details of the period the newsletter is considering.
• The newsletter should not read as one continuous ‘essay’. It must include headings and sub headings that assist in identifying the nature of changes/developments and help to guide the reader, and also enable the reader to distinguish between items of interest and the relative importance of changes.
• You must refer the reader to specific sources so that they are able to obtain more detailed information of the development/change.
• The newsletter must be printed in minimum font size of11 points(You may wish to use larger fonts etc for headings etc). You may wish to set your newsletter out using columnsbutthis is optional. Apart from minimum font size, there are no specific requirements in relation to line spacing, margins etc. However, you should note that simply reducing line spacings, margins to ‘fit more in’ may impact on the presentation and effectiveness of the newsletter.
• There isnospecific ‘word limit’. The newsletter must beno longer than 2 pages. In cases where the newsletter exceeds the 2 page limit, only the first 2 pages will be marked.

Do
notattach actual articles/printouts of web sources etc to your assessment. You are only required to include details of these in the bibliography.

5. Bibliography and referencing

This assessment must include a bibliography rather than a reference list (this should not be part ofyour newsletter and tobe given on a separate page).A bibliography includes all materials used in the preparation of your assignment, not just those referenced within the paper.The reason a bibliography is required (rather than a reference list) is that this will provide an insight into the range and regularity of your monitoring activities (not just those specifically referenced within your ‘paper’) which is part of the criteria for assessment.It is expected that the bibliography will be quite long.The bibliography needs to include specifics of what you have actually accessed and read that is related to the area not just a general link to a website or newspaper etc. Therefore if you use a source such as the AASB website, please reference every article that you read separately. Assessments without a bibliography will not be accepted or marked.

When citing electronic sources please include the date accessed. If you are unsure how to cite electronic sources check the referencing guides that are available from the library or online at the student services site.APA referencing style should be used forall citing format.

Please be reminded that plagiarism is regarded as a serious issue within the University system with severe consequences for students who have been found to have deliberately plagiarised, the minimum penalty being zero for the assignment. All students should ensure that they are familiar with the plagiarism policy and referencing requirements before commencing assessment.

Rationale

Thepurpose of this assignment is to help you further develop some of the skills and knowledge required and valued by the accountancy profession. The task that you will be required to undertake is similar to the tasks required of a professional accountant working within the financial reporting field. Accounting professionals need to ensure they are aware of current developments and that their knowledge is ‘up to date’. They need to be able to identify changes that have occurred that may impact on their work and to know where they can obtain information about these changes. In this assignment you are asked to provide a summary of recent developments relating to financial reporting.

Assuch this assignment aims to:

• Developthe student’s ability to identify and source changes to financial reporting requirements so as to update professional knowledge required for practice;
• Acquirean awareness of current developments and changes (both locally and internationally) that may impact on current and future financial reporting rules and regulations;
• Developthe student’s ability to provide written material appropriate to the accountancy profession;
• Helpstudents appreciate the limitations of the currency of knowledge in a technical financial reporting area;
• Allowstudents to understand the relationships between technical issues and community attitude to financial reporting.

Assessment criteria

The newsletter will be assessed in relation to the criteria specified in the following marking guide.

MarkingSheet

Question 2 [15 marks]

Financial statement presentation

Bogong Ltd, has prepared the following statement of financial position as at 30 June 2014:

Required:

List and explain what corrections must be made to the above statement of financial position, or additional note disclosures prepared, to ensure that it complies with the requirements of AASB 101.(Note: you are not required to explain the disclosure requirements contained in accounting standards other than AASB 101 (such as AASB 112 Income Taxes or AASB 116 Property, Plant & Equipment)).

(Source: Adapted fromDagwell, R., Wines, G., Lambert, C. (2012). Corporate Accounting in Australia. (1^stedition) Sydney: Pearson Australia.

Assessment criteria

The assessment rubric for this question is provided below. The detailed allocation of marks has been provided above for your information.

Attachments:

ACC514 assign….docx

cop the partnership of hiller and roundtree cpas showed revenues of 195 000 and expe 663453

Aug 30, 2021 | Uncategorized

The partnership of Hiller and Roundtree, The partnership of Hiller and Roundtree, CPAs, showed revenues of $195,000 and expenses of $52,000 on their year end work sheet. Their capital balances as of January 1, 20 , were $52,000 for B. Hiller and $48,000 for O. Roundtree. No additional investments were made during the year. As stated in their partnership agreement, after withdrawing salary allowances of $60,000 for Hiller and $40,000 for Roundtree, the partners each withdrew 5% interest on their January 1 capital balances. No additional withdrawals were made. Any remaining net income is to be divided on a 45 55 basis.REQUIRED1. Prepare the lower portion of the income statement of the partnership for the year ended December 31, 20 , showing the division of the partnership net income for the year.2. Prepare a statement of partners equity for the year ended December 31, 20 , and the partners equity section of the balance sheet on that date.3. Prepare closing entries for the partnership as of December 31, 20 . (For simplicity, use the account titles

the partnership of hiller and roundtree cpas showed revenues of 195 000 and expenses 663468

Aug 30, 2021 | Uncategorized

The partnership of Hiller and Roundtree, CPAs, showed revenues of $195,000 and expenses of $52,000 on their year end work sheet. Their capital balances as of January 1, 20 , were $52,000 for B. Hiller and $48,000 for O. Roundtree. No additional investments were made during the year. As stated in their partnership agreement, after withdrawing salary allowances of $60,000 for Hiller and $40,000 for Roundtree, the partners each withdrew 5% interest on their January 1 capital balances. No additional withdrawals were made. Any remaining net income is to be divided on a 45 55 basis.

Required

Hide Feedback Partially Correct

Hide Feedback Partially Correct

Hide Feedback Partially Correct

Hide Feedback

janet taxpayer residing in australia is named as the sole beneficiary of aproperty 1 663484

Aug 30, 2021 | Uncategorized

Janet (taxpayer) residing in Australia is named as the sole beneficiary of aproperty (1.85 hectares) with a large homestead as a result of the deathof a relative on 7/10/2010. The property is not used for commercialpurposes and at the date of death, the property was valued at$1.45million. Settlement took place on 21/12/2010. After moving into thehomestead shortly after taking ownership, she planned to take a one yeartrip which she had been planning for some time in late 2011. The taxpayerfelt that the homestead was far too large for her (she is single), applied tothe ATO for an exemption for ABN registration and some fourteen monthslater (16/2/2012), she obtained council approval to subdivide the propertyinto three, with the intention of building three units, one she will take up asher own residence, the other two will be sold. Work commenced someweeks after approval and on 12th December that same year, thetaxpayer returned and moved into one of the apartments. The other twowere sold in March/April in 2013, one selling for $1.35m (24/3/2013), theother for $1.45m (9/4/2013).You are to consider the CGT implications both from the relevant sections(ITAA), rulings, etc. and from the values (if/where applicable). Assume thatthe blocks are subdivided equally. For each determination that you make,you should clarify. You should also clarify what Capital Gains and CGT is inyour answer (15 marks)Part 2: QuestionExplain using examples and relevant sections of the act, what thedifferences between Ordinary Income and Statutory income are. Use yourown examples (not from MTG or Barkoczy text) (5 marks)

nav suppose the fund in the previous problem has liabilities of 110 000 what is the 664170

Aug 30, 2021 | Uncategorized

NAV An open end mutual fund has the following stocks:

If there are 50,000 shares of the market fund, what is the NAV?

NAV Suppose the fund in the previous problem has liabilities of $110,000. What is the NA of the fund now?

the offering prospectus disclose that the fund promoter gets an 8 percent fee from t 664178

Aug 30, 2021 | Uncategorized

Taxes and MMMFs In the previous problem, which MMMF offers you the highest yield if you are a resident of Texas, which has no state income tax?

Closed End Funds The Argentina Fund has $410 million in assets and sells at a 13.1 percent discount to NAV. If the quoted share price for this closed end fund is $18.43, how many share are outstanding? If you purchase 1,000 shares of this fund, what will the total shares outstanding be now?

Closed End Fund Discounts Suppose you purchase 5,000 shares of a closed end mutual fun at its initial public offering; the offer price is $28 per share. The offering prospectus disclose that the fund promoter gets an 8 percent fee from the offering. If this fund sells at a 12 percen discount to NAV the day after the initial public offering, what is the value of your investment?

forward rates an analyst gathered the following spot rates 664322

Aug 30, 2021 | Uncategorized

Forward Rates An analyst gathered the following spot rates:

The one year forward rate two years from now is closest to

a. _4.91 percent

b. 5.17 percent

c. 10.05 percent

d. 7.5 percent

based on the data above the one year implied forward rate two years from now is clos 664326

Aug 30, 2021 | Uncategorized

Forward Rates An analyst gathers the following information:

Based on the data above, the one year implied forward rate two years from now is closest to:

a. 6.25 percent

b. 7.01 percent

c. 7.26 percent

d. 7.51 percent

what does this tell you about the relationship between implied forward rates the sha 664818

Aug 30, 2021 | Uncategorized

U.S. Treasury STRIPS, close of business February 15, 2008:

Treasury STRIPS Calculate the quoted yield for each of the STRIPS given in the table above. Does the market expect interest rates to go up or down in the future?

Treasury STRIPS What is the yield of the two year STRIPS expressed as an EAR?

Forward Interest Rates According to the pure expectations theory of interest rates, how much do you expect to pay for a one year STRIPS on February 15, 2009? What is the corresponding implied forward rate? How does your answer compare to the current yield on a one year STRIPS? What does this tell you about the relationship between implied forward rates, the shape of the zero coupon yield curve, and market expectations about future spot interest rates?

compare your answer to the solutions you found in problem 16 what does this tell you 664819

Aug 30, 2021 | Uncategorized

Forward Interest Rates According to the pure expectations theory of interest rates, how much do you expect to pay for a five year STRIPS on February 15, 2009? How much do you expect to pay for a two year STRIPS on February 15, 2011?

Forward Interest Rates This problem is a little harder. Suppose the term structure is set according to pure expectations and the maturity preference theory. To be specific, investors require no compensation for holding investments with a maturity of one year, but they demand a premium of .30 percent for holding investments with a maturity of two years.

Given this information, how much would you pay for a one year STRIPS on February 15, 2009? What is the corresponding implied forward rate? Compare your answer to the solutions you found in Problem 16. What does this tell you about the effect of a maturity premium on implied forward rates?

portfolio expected returns calculate the expected return on a portfolio of 50 percen 664827

Aug 30, 2021 | Uncategorized

Use the following table of states of the economy and stock returns to answer the review problems:

1. Expected Returns Calculate the expected returns for Roten and Bradley.

2. Standard Deviations Calculate the standard deviations for Roten and Bradley.

3. Portfolio Expected Returns Calculate the expected return on a portfolio of 50 percent Roten and 50 percent Bradley.

4. Portfolio Volatility Calculate the volatility of a portfolio of 50 percent Roten and 50 percent Bradley

what is the expected return of the stock 664829

Aug 30, 2021 | Uncategorized

Expected Return An analyst estimates that a stock has the following return probabilities and returns depending on the state of the economy:

What is the expected return of the stock?

a. 7.8 percent

b. 11.4 percent

c. 11.7 percent

d. 13.0 percent

describe some of the risks encountered by a firm such as harvest partners 658948

Aug 30, 2021 | Uncategorized

Harvest Partners Grows Its Investments

Is it possible to have too much money to spend in too little time? Harvest Partners and other private equity firms have just a few years to invest about $500 billion.

Harvest Partners, based in New York City, is a private equity firm that specializes in leveraged buyouts and growth financing. It focuses on companies in the United States, the rest of North America, and western Europe that have well established sales or operations in the United States. The firm manages funds emphasizing private equity and debt investments. Harvest Partners makes equity investments of anywhere from $30 million to $100 million in companies whose revenues run between $100 million and $750 million. It prefers to be a control investor and become a partner in the companies it finances. Those companies tend to be middle market firms that need investment to adapt to changing times and markets.

Private equity firms usually have three to six years to reinvest funds they have raised from client investors. If they cannot or do not, they must return that money. During the boom years, Harvest Partners raised $815 million from client investors. So far it has reinvested about $293 million. Now the firm is facing a 2012 deadline to reinvest the remaining $522 million.

Not all private equity investments are successful. Harvest Partners had owned the equity of the Natural Products Group, a manufacturer of organic shampoos and soaps. But when NPG went bankrupt, Harvest Partners lost its entire investment.

Recently Harvest Partners joined MTP Energy Management to invest $80 million in Regency Energy Partners, a middle market natural gas company. Michael DeFlorio, a senior managing director of Harvest Partners, said that Regency embodies our investment strategy focused on exceptionally managed . . . midstream service providers participating in the most promising resource plays in the industry.”

Questions for Critical Thinking

1. Describe some of the risks encountered by a firm such as Harvest Partners.

2. Why do you think Harvest Partners and other equity firms are required to invest their clients’ funds within a limited time frame?

research conocophillips how close has it come to raising the desired 10 billion 658952

Aug 30, 2021 | Uncategorized

ConocoPhillips Divests to Return to Its Core

ConocoPhillips, with headquarters in Houston, Texas, is the third largest American oil company. It has nearly 30,000 employees in offices in 30 countries around the world. But for two years running, Conoco did poorly in the New York Stock Exchange, with its shares losing 40 percent of their value. Conoco more than doubled its debt when it bought Burlington Resources Inc., a natural gas producer, for $36 billion. At the end of a recent year, Conoco debt was three times that of the largest U.S. oil company, ExxonMobil, even though ExxonMobil was almost twice Conoco size in terms of revenue. How could Conoco turn itself around?

At its annual analyst meeting, the company announced plans to enhance its value to its shareholders by increasing dividends by 10 percent and buying back some shares of its stock. Another goal is to raise $10 billion by 2012.

ConocoPhillips will raise these funds through divestiture, selling off some of its noncore assets. The company said that these assets did not fit well strategically with its core operations, they had high operation costs, and they were marketable. The company acknowledged that it would lose from 80,000 to 120,000 barrels of oil production per day and 400 to 600 million barrels of oil equivalent in reserve. But it hoped to emerge leaner and stronger, with a renewed focus on core projects that would bring in a higher return on investment.

Jim Mulva, the chairman and CEO, said, We are focused on creating and delivering value to our shareholders. We are taking decisive action to sell assets, reduce debt, build on our record of shareholder distributions, and improve returns while growing production and reserves per share,”

Some analysts believed that Conoco first priority was to sell its 9 percent stake in Syncrude, which one analyst referred to as one of Conoco crown jewels.” Syncrude Canada Ltd. is located in the province of Alberta, just north of Montana, and is the world largest producer of synthetic crude oil from oil sand deposits. Conoco recently announced that it sold its share in Syncrude to China Sinopec for $4.65 billion, pending approval by the Chinese and Canadian governments. Mulva declared, [W]e are pleased that [Sinopec] has recognized the value of this quality asset.”

Another of Conoco noncore assets was its 20 percent share in Lukoil, Russia biggest oil producer. Conoco had invested heavily in Lukoil in hopes of large profits on some joint projects with Lukoil, but those profits had never materialized. This was in part because of strict Russian regulations concerning foreign companies in important industries. Lukoil CEO, Vagit Alekperov, commented, Initially, we were aiming for a large package of joint projects, but it turned out to be rather narrow, which probably also disappointed [Conoco].” At first, Conoco hoped Lukoil would buy back half of its stake, but Lukoil turned that offer down. Conoco then offered those shares for sale on the open market, keeping a 10 percent share in Lukoil. Conoco hopes to earn about $5 billion from that sale and use those funds to repurchase some of its stock from shareholders.

Conoco 25 percent share in the Rockies Express Pipeline is another of the company crown jewels.” This high speed, natural gas pipeline runs almost 1,700 miles from northwestern Colorado to eastern Ohio. Conoco has offered its stake in the Rockies Express Pipeline for sale. Will ConocoPhillips achieve its goal of raising $10 billion by 2012? Time will tell.

Questions for Critical Thinking

1. Why is it important for ConocoPhillips to increase the value of its shares for its investors?

2. Research ConocoPhillips. How close has it come to raising the desired $10 billion?

compare hedge funds with mutual funds 658953

Aug 30, 2021 | Uncategorized

Top Hedge Fund Managers Earn Record Paychecks

Along with the rest of the banking and investment industry, hedge fund managers experienced steep drops in income during the recent recession. But as the economy began to revive, the 25 top earning hedge fund managers earned $25.3 billion. That figure shattered even the old record, set in the boom days before the crisis.

One of those managers was David Tepper of Appaloosa Management. Other investors feared that the banking sector would collapse again, but Tepper bet that the federal government would step in to prevent the biggest banks from failing. In late 2008 and early 2009, he invested heavily in preferred shares and bonds of the big banks, among other seemingly losing prospects. Tepper, formerly of Goldman Sachs, won big, earning $4 billion. We bet on the country revival,” he said. Those who keep their heads while others are panicking do well.” The U.S. Treasury Department apparently agreed with him, because it also bought preferred stock in troubled banks to help shore them up. The Treasury has since sold many of those stocks at a handsome profit.

Hedge funds are elite, private investment companies that are open only to highly qualified, large investors. Unlike mutual funds, hedge funds are not regulated by the Securities and Exchange Commission. During the heady days before the financial crisis, hedge funds earned huge profits. Their managers did well, too, because they usually take a significant percentage of a hedge fund annual earnings. When the crisis struck, even these funds experienced losses in the double digits, and their managers saw their income drop by as much as 50 percent. But when the market rallied, hedge funds resurged as well. Of the 25 top hedge fund managers, the lowest earner made $350 million.

As the United States and the rest of the world economies recovered, the news media reported the immense salaries of CEOs and other top corporate executives at banks and large brokerage houses. The stories stirred the critics, especially because ordinary people were losing their jobs, homes, and health insurance. But some analysts believe that hedge fund managers such as David Tepper earned their huge salaries because they dared to take big risks in the hope of big rewards.

Of course, not all hedge funds did well when the stock market revived. The gap between the highest earning hedge funds and the losing ones grew wider. Nadia Papagiannis, a hedge fund analyst at Morningstar Inc., said, The hedge funds that survived 2008 were able to capture the gains on the way up in 2009. This year is not going to be as lucrative as last year. There not enough of room [sic] for another rally as big as we saw in ‘09.” Questions for Critical Thinking

1. Compare hedge funds with mutual funds.

2. Do you agree that the top hedge fund managers deserve their high salaries? Why or why not?

what might be some short term funding options for comet some long term options which 658954

Aug 30, 2021 | Uncategorized

Comet Skateboards Rides the Triple Bottom Line

Jason Salfi, co founder and president of Comet Skateboards, is the first to admit he can let the wheels get away from him. Since the inception of Comet Skateboards, he estimates that he has personally tanked the company four times. I started the company with a friend and we would sacrifice everything for quality,” Salfi admits. It easy to see how this could happen. Salfi loves skateboarding and he a fanatic about building the best skateboards on the market with the most sustainable materials available.

During the first years of production—when Comet moved from California to Ithaca, New York in order to source bio composite materials—Salfi and his partner paid top dollar for all the materials they used in building the boards. We weren’t really watching how much money we were making,” Salfi says sheepishly. They were so wrapped up in the excitement of developing and manufacturing an entirely new class of skateboard, they forgot to watch the bank account balance.Salfi recalls that they did all the stereotypical things that small start ups do to obtain financing—maxed out their credit cards, got friends and family to co sign for loans, found angel investors. But Comet Skateboards just seemed to roll through the money without enough return to ensure its survival.

Then the firm hired a manager to specialize in financial details. With a professional in place, Salfi began to understand the real and potential impacts certain buying decisions would have on the bottom line, and the way cash flow would affect getting products to the marketplace. Now, Comet can forecast better how a product release will affect cash flow, and how that in turn will affect the way they as a business can reach customers. Ultimately we trying to create a sustainable business platform to get our sustainable business vision out there in the marketplace,” explains Salfi. But they couldn’t do this without managing the company financial resources.

Comet Skateboards is considered a triple bottom line company, carrying the B Corporation logo. This means that Comet strives to create benefit for the company owners (profit), the community (people), and the environment (planet). Currently there are more than two hundred B Corporations in thirty industries around the nation. Each company has submitted to rigorous evaluation and has put written standards in place addressing social and environmental responsibility. Everything that Comet does, from its closed loop manufacturing process to its community involvement, refers to its triple bottom line commitment.

Jason Salfi insists that managing the finances for a triple bottom line company is pretty much the same as managing the finances for a traditional company. But there are some differences, particularly in the procurement of raw materials, energy use, and waste disposal. Also, triple bottom line companies are held accountable for the way they treat employees and how they are involved in the community. The ‘magic’ is making sure we can afford all that,” observes Salfi. It just a matter of prioritization. We not going on $50,000 golf retreats. We reinvesting the capital we have in the materials we use and the way we interact with people.”

Despite the fact that he says he didn’t pay attention to finances in the company early days, Salfi has a good grasp on Comet role in the larger economic picture. He likes the idea of projecting the impact Comet has on consumers’ buying decisions, particularly young people. Teenagers who choose Comet skateboards are choosing products that are made by a triple bottom line firm. If you look at the way a 14 year old decides to buy things for the rest of his or her life, and you look at the number of decisions that young person is going to make over the span of 50 or 60 years, you could extrapolate that we have impacted 1,000 people in a certain way that could eventually transfer billions of dollars toward socially responsible businesses,” explains Salfi. We influencing the buying decisions of youth.”

Salfi believes that, decades ago, commerce used to be about improving the quality of life, but somewhere along the line, profits skewed motivations.” He likes the idea of the triple bottom line rebalancing the priorities of business. We like to think that as a B Corporation, we are part of a group that wants to bring back the original motivation for business, which was all about creating an improved quality of life for everyone, not just a select few.” It might actually be possible for a few well engineered skateboards to change the world.

Questions for Critical Thinking

1. Hiring a financial manager was a major step for Comet Skateboards. Identify some of the factors the manager would have to consider when creating a plan for risk return trade off.

2. What might be some short term funding options for Comet? Some long term options? Which would be best for this company, and why?

p>3. Suppose a larger firm approached Comet with an offer of acquisition. Create a chart outlining the major pros and cons of such an offer. 4. How might Comet designation as a B Corporation affect the way it answers the three essential questions for building a financial plan?

should not for profit organizations be required to open their books to donors why or 658955

Aug 30, 2021 | Uncategorized

So Much to Do, So Little Cash

When Dan Wallach started Greensburg GreenTown, he knew it wouldn’t be easy. A self proclaimed idea guy, he admits that the details of high finance elude him. What he is good at is rallying people around a cause and getting them to write a few big checks. This time, though, Wallach decided to involve the largest number of people possible. Greensburg GreenTown One Million $5.00 Donations campaign was the result.

The money that is raised will be used to cover GreenTown operating expenses, as well as to fund gaps in municipal projects, build model green homes, and educate residents about green building practices. Another aspect of GreenTown work is to provide information and access to media organizations. Shortly after the tornado, the Planet Green cable channel began production on a television series that would chronicle the town rebuilding. Wallach thought the exposure created by that show and others like it would be valuable in his fund raising efforts.

As a not for profit organization, Greensburg GreenTown is heavily regulated by the IRS, because the donations it receives are fully tax deductible. It falls into the same category as religious organizations and educational institutions, which are exempt from federal income taxes but must pay other federal taxes, such as employment taxes. Because working through the red tape required to obtain this IRS status can take time, many organizations, GreenTown included, work through an approved intermediary while their applications are processed.

Although Greensburg GreenTown supports and educates Greensburg residents, the town itself must rely on other sources of funding. All towns have budgets for repairs and improvements, but no one expected to have to rebuild the entire town. After the tornado, Greensburg had no roads, no hospital, no school system, no utilities, or any of the other services one might expect to find in a town. Money was tight even before the tornado, so rebuilding seemed an impossible task.

Luckily, various government and corporate organizations chipped in. The Federal Emergency Management Agency (FEMA) and the U.S. Department of Agriculture (USDA) provided aid in the form of grants. Corporations like Frito Lay donated significant amounts of money to support the town innovative business incubator. With millions of dollars at stake and hundreds of projects under way at once, Assistant Town Administrator and Recovery Coordinator Kim Alderfer says the hardest part is keeping track of it all.

Questions After viewing the video, answer the following questions:

1. What are the key legal and financial distinctions of Greensburg GreenTown?

2. If you were in Kim Alderfer shoes, what kind of financial contingency plan would you put in place for Greensburg future?

3. Should not for profit organizations be required to open their books to donors? Why or why not?

accounting performance drinks case 662526

Aug 30, 2021 | Uncategorized

Attachments:

ACCT640 Case ….xlsx

which research proposal should fenwar have accepted why 662569

Aug 30, 2021 | Uncategorized

1. Use the Internet to access the home page for the City of Chicago, www.cityofchicago.org. Use the Programs and Initiatives link to access information about various capital projects underway in the city government. When this text went to press, these initiatives included such categories as Environment, Housing, Technology, and Transportation.

Required: Read about one or more of these capital projects, and then discuss how the organization’s managers should go about making significant decisions about expenditures for major capital projects like the one you have explored. (If you prefer, complete a similar requirement for a different city of your choosing.)

2. DYSFUNCTIONAL FOCUS

ON EARLY CASH FLOWS

The timing of cash flows in investment decisions can sometimes create behavioral incentives to make dysfunctional decisions. The following hypothetical scenario presents such a situation.

The Institute for Environmental Studies (IES) is a privately funded, nonprofit scientific organization based in Montreal. The organization’s director of field research is scheduled to retire in two years, and the assistant director, Marie Fenwar, is hoping to be appointed to the post at that time. In her current position, Fenwar has significant administrative responsibilities, including the approval of research proposals and equipment acquisitions. Fenwar has developed a reputation for carefully scrutinizing every proposed project and keeping the institute’s field research branch within its budget. Fenwar has been so successful in her job that she has been quietly assured by several members of the IES board of directors that she is in line for her boss’s job. She knows, however, that her prospects depend on her continued success in keeping the

field research branch in solid financial shape. IES recently signed a contract with the U.S. and

Canadian governments to do a five year study of the effects of global warming on the migration of water fowl. The contract fee is $500,000, payable in equal annual installments over the contract term. Fenwar is now considering two alternative proposals for carrying out the study. Each proposal entails the purchase of equipment and the incurrence of various operating costs throughout the term of the contract. Fenwar’s normal procedure for project evaluation is to calculate each proposal’s NPV, using an 8 percent hurdle rate. The projected costs follow:

Year Type of Cost Research Proposal I Research Proposal II

Time 0 Equipment acquisition* $ 40,000 $70,000

Year 1 Operating costs 150,000 75,000

Year 2 Operating costs 120,000 75,000

Year 3 Operating costs 75,000 95,000

Year 4 Operating costs 40,000 95,000

Year 5 Operating costs 40,000 95,000

* The equipment will be obsolete at the end of the contract term.

Fenwar calculated an NPV of $1,370 for Proposal Iand $(14,375) for Proposal II. After completing her NPV analysis, however, Fenwar was tempted to ignore it. These thoughts ran through her mind as she drove to work: “If I approve Proposal I, the financial picture for the field research branch is going to pieces for the next two years. After a $40,000 initial investment in equipment, I’m going to show losses of $50,000 and $20,000 in the first two years. That’s not going to look very good when the board considers my promotion.” When she arrived at the office, Fenwar wrote a memo approving Proposal II.

Question. Which research proposal should Fenwar have accepted? Why? Comment on the ethical issues in this scenario.

Attachments:

ACCT Homework….docx

draft a memo to a client comparing the advantages and disadvantages of using forward 662581

Aug 30, 2021 | Uncategorized

FORWARD CONTRACT

A

1. Draft a memo to a client comparing the advantages and disadvantages of using forward contracts and options to hedge foreign exchange risk.
2. On December 1, 2009, a U.S. based company entered into a three month forward contract to purchase 1 million Mexican pesos on March 1, 2010.

The following are the purchase rates for US dollar per peso

The company’s borrowing rate is 12 percent. The present value factor for two months at an annual interest rate of 12 percent (1 percent per month) is 0.9803.

How will the U.S. company report the forward contract on its December 31, 2009, balance sheet?

PROVIDE YOUR REFERENCE IN APA FORMAT AND PROVIDE YOUR IN TEXT CITATION.

B)

ANALYSIS OF GOVERMENTAL PERFORMANCE

1. Should citizens be concerned if the pension plan funding measure decreases over time? Why or why not?

PROVIDE YOUR REFERENCE IN APA FORMAT AND PROVIDE YOUR IN TEXT CITATION.

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FORWARD CONTRACT A Draft a memo to a client comparing the advantages and disadvantages of using forward contracts and options to hedge foreign exchange risk. On December 1, 2009, a U.S. based company entered into a three month forward contract to purchase 1 million Mexican pesos on March 1, 2010. The following are the purchase rates for US dollar per peso Date                                                     ?Spot Rate                           ?Forward Rate (March, 2010)??December 1, 2009                              ?$0.088                                        ?$0.084??December 31, 2009                         ?$0.080                                  ?$0.074??March 1, 2010                                     ?$0.076? ??The company’s borrowing rate is 12 percent. The present value factor for two months at an annual interest rate of 12 percent (1 percent per month) is 0.9803. How will the U.S. company report the forward contract on its December 31, 2009, balance sheet? PROVIDE YOUR REFERENCE IN APA FORMAT AND PROVIDE YOUR IN TEXT CITATION. B) ANALYSIS OF GOVERMENTAL PERFORMANCE Should citizens be concerned if the pension plan funding measure decreases over time? Why or why not? PROVIDE YOUR REFERENCE IN APA FORMAT AND PROVIDE YOUR IN TEXT CITATION.

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FORWARD CONTR….doc

the company according to anthony s orchard strategic plan is hoping to purchase 662594

Aug 30, 2021 | Uncategorized

To prepare for this Individual Assignment:

Review the Anthony’s Orchard case study in the unit resources.

Consider the following:

§ The company, according to Anthony’s Orchard Strategic Plan, is hoping to purchase an apple press in order to start a new line of prepared apple products—apple juice.

§ The company estimates this new product offering will generate an additional $95,000 net income per year and estimated cash flows of $90,000 per year. The cost of the apple press will be $950,000 and this expenditure, as shown in the budgeted cash flow statement, is expected to take place in the fourth quarter of 2012.

§ The apple press is expected to have a seven year life and no salvage value.

§ The company requires a 10% return on investment for new capital investments and the company uses a cost of capital of 8%.

§ The company’s revenue goal for 2015 is $25 million.

§ Assume a minimum 12% gross margin on revenue.

To complete this Individual Assignment, answer the following:

§ Do you think the company’s revenue goal of $25 million by 2015 is realistic?

§ Explain how purchase of the apple press might affect the company’s revenue goals. Based on this information, explain whether Anthony’s Orchard should invest in the apple press. Support your response with relevant information provided in the case study, the previous year’s financials for 2010, the current year’s financials for 2011 and the budgeted year’s financials for 2012.

§ Draft budgeted financial statements from 2012 to 2015 under both options that provide a realistic assessment of expected revenues and costs, and explain how you have arrived at these budgeted figures.

Notes:

You should fully state and justify any assumptions that you make in relation to the financial data you use. Be sure to include all references as well.

This Individual Assignment forms the basis of Section 2 of your Final Project. You will receive feedback on this work from your Faculty Member, and will be expected to incorporate any suggestions into the Final Project.

Your submission (excluding appendices) should be 1,000 words (+/ 10%) in length. Reference must be according to the Harvard Reference system

Attachments:

Budgets Ant….pdf

Current Year ….pdf

Previous Year….pdf

compute the specified ratios using hilda company s balance sheet at december 31 2011 662659

Aug 30, 2021 | Uncategorized