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Presented below is information related to copyrights owned by Ivanhoe Company at December 31, 2020. Cost $8,620,000 Carrying amount 4,300,000 Expected future net cash flows 4,180,000 Fair value 3,440,000 Assume that Ivanhoe Company will continue to use this copyright in the future. As of December 31, 2020, the copyright is estimated to have a remaining useful life of 10 years. Required:(a) Prepare the journal entry to record the impairment of the asset at December 31, 2020. The company does not use accumulated amortization accounts.(b) Prepare the journal entry to record amortization expense for 2021 related to the copyrights
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Rafa runs a profit maximizing firm. It turns out that for Rafa his fixed costs are $1,000 and his avoidable fixed costs are $600. In his current short run situation when he has successfully set his marginal revenue equal to his marginal cost where marginal costs are rising, he is disappointed to discover that his economics profits are negative. In fact at this production level his profits are $- 500. Required:1. Which one of the following statements is TRUE? A) Rafa's accounting profits must also be negative in the short run. B) Rafa should shut down in the short run. C) Rafa should continue to produce at a loss in the short run. D) If Rafa is a monopolist, he should continue to operate in the short run, otherwise he should shut down.
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One of the employees of Davenport Corporation recently was involved in an accident with one of the corporation's delivery vans. The corporation is either going to repair the damaged van or sell it as is and buy a comparable used van. Information related to this decision is provided below: Initial cost of the damaged van $ 30,000 Accumulated depreciation to date on van $ 18,000 Salvage value of van immediately before crash $ 9,000 Salvage value of van immediately after crash $ 1,000 Cost to repair damaged van $ 5,000 Cost of a comparable used van $ 10,000 Based on the information above, Davenport would be financially better off:
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The appellate court decides that the trial court committed reversible error by including evidence found by law enforcement. Law enforcement discovered this evidence when committing a Fourth Amendment violation, which should have been excluded at trial. This inadmissible evidence was the lynchpin of the prosecutors case, which resulted in a conviction. 1. Where does the case go from here? 2. Is the Defendant free to go? 3. Does it go back to the trial court? 4. Does it go all the way up to the Supreme Court?
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Suppose the government wants to reduce the total pollution emitted by three firms. Currently, each firm is creating 4 tons of pollution, for a total of 12 tons. The government is considering the following two methods to reduce total pollution to 6 tons: 1. The government sets regulation specifying that each of the three firms must cut its pollution in half. 2. The government allocates two tradable pollution permits to each of the three firms. Each permit allows the firm to emit 1 ton of pollution. Assume the negotiation and exchange of permits are costless.The following table shows the cost each firm faces to eliminate each unit of pollution.Cost of Eliminating: Firm X Firm Y Firm ZFirst ton of pollution $950 $280 $600Second ton of pollution $1,650 $300 $720Third ton of pollution $2,500 $350 $880Fourth ton of pollution $3,550 $450 $1,050Suppose the owners of the three firms get together and agree on a trading price of $800 per permit.Complete the following table with the action each firm will take at this permit price and the amount of pollution each firm will eliminate.Firm Initial Pollution Permit Allocation (Tons of pollution) Action Final Amount of Pollution Eliminated (Tons of pollution)Firm X 2 Firm Y 2 Firm Z 2Determine the total cost of eliminating 6 tons of pollution under each method, and enter the amounts in the following table.Method Total Cost of Eliminating 6 Tons of Pollution (Dollars)Regulation Tradable pollution permits
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TRUE OR FALSE: when you have a credit card or loan, it is better to have higher interest rate
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Marian, a top graduate from Loyola in Humanities, was hired by a major corporation into a management position. Marian finished the corporation's management training program top in her group, and is performing above the norm in her position. She is really enjoying her work.As a black woman she feels isolated, as there are no other black women managers and few women in her area. One night at a company party she heard a conversation between two of her male co-workers and their supervisor. They were complaining to him about Marian's lack of qualifications and her unpleasant personality. They cursed affirmative action regulations for making the hiring of Marian necessary.
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Regulatory focus theory suggests that consumers will react differently depending on which broad set of motives is more salient. Name and describe the two prominent sets of motives and describe how consumers will react when each set of motives is more noticeable. Use a specific product or service to explain your answer.
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Read the following scenario to answer the questions in below. As the book-keeper for your company you are required to create quarterly financial statements (Income Statement, Statement of Owner's Equity Balance Sheet and Statement of Cash Flows) in order to report on the financial activities of the company for the quarter (three months). It is now March 29th, and in preparation for creating the 1st quarter's financial statements (as of 3/31), you have called a meeting with the Dept. Managers for Accounts Receivable and Accounts Payable to confirm deadlines that have to be met for recording March-related transactions. As the meeting starts the owner walks in - she sits quietly as you explain the deadlines, but as soon as you have finished she says "Well, for this quarter, if we have not paid March invoices by March 31, there is no need to record them in March. We can record/expense those invoices when we pay them in April or May."Questions:1. Do you agree with the owner, or, do you feel that an adjusting entry is necessary in the situation described? If so - which type of adjusting entry is needed?2. Discuss the impact (understated or overstated) on the accounts affected if the adjustment is not made and explain how the adjustment affects the appropriate financial statements
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Resources fall broadly into two categories: tangible and intangible. Tangible resources have physical attributes and are visible. Intangible resources have no physical attributes and thus are invisible. Examples of intangible resources are a firm's culture, its knowledge, brand equity, and reputation. 1. Which of the following is an example of an intangible resource?Multiple Choice:A) equipmentB) copyrightC) cashD) landE) inventory
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ReVitalAde produced 13,000 cases of powdered drink mix and sold 12,000 cases in April 2018. The sales price was $ 29, variable costs were $ 12 per case ($ 9 manufacturing and $ 3 selling and administrative), and total fixed costs were $ 100,000 ($ 91,000 manufacturing overhead and $ 9,000 selling and administrative). The company had no beginning Finished Goods Inventory. Required:1. Prepare the April income statement using variable costing.2. Determine the product cost per unit.
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WP Corporation produces products X, Y, and Z from a single raw material input in a joint production process. Budgeted data for the next month is as follows: Product X Product Y Product Z Units produced 1,500 2,000 3,000 Per unit sales value at split-off $ 19.00 $ 21.00 $ 24.00 Added processing costs per unit $ 7.00 $ 7.50 $ 7.00 Per unit sales value if processed further $ 29.00 $ 29.00 $ 30.00 The cost of the joint raw material input is $149,000. Which of the products should be processed beyond the split-off point?Product X Product Y Product ZA) Yes Yes NoB) No Yes NoC) Yes No YesD) No Yes Yes1. Choice D2. Choice A3. Choice B4. Choice C
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Robin Corporation retires its $800000 face value bonds at 104 on January 1, following the payment of annual interest. The carrying value of the bonds at the redemption date is $829960. Required:A) The entry to record the redemption will include __________.O a debit of $32000 to Premium on Bonds Payable. O debit of $2040 to Loss on Bond Redemption. O credit of $32040 to Premium on Bonds Payable. O credit of $2040 to Loss on Bond Redemption.
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Brussels Enterprises issues bonds at par dated January 1, 2019, that have a $3,600,000 par value, mature in four years, and pay 7% interest semiannually on June 30 and December 31. Required:a. Record the entry for the issuance of bonds for cash on January 1. b. Record the entry for the first semiannual interest payment and the second semiannual interest payment. c. Record the entry for the maturity of the bonds on December 31, 2022 (assume semiannual interest is already recorded).
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The functional areas of business ethies include
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Rush Industries, Inc. builds parts for large automated heavy equipment. The Vice President for Marketing has determined that sales are dwindling for the firm's products because of aggressive pricing by competitors. Rush Industries sells the product for $775 whereas the competition's comparable part is selling in the $650 range. The VP for Marketing has determined that a price drop to $625 is necessary to regain market share and annual sales of 1,200 units. Data based on sales of 1,200 units is as follows: Budgeted Amount Actual Amount Cost Direct materials (sheet metal) 8,000 sq.ft. 10,000 sq.ft. $9.66 per sq.ft. Direct labor 4,800 hrs. 5,000 hrs. $33.60 per hour Machine setups 2,600 hrs. 2,800 hrs. $42.00 per hour Mechanical assembly 3,200 hrs. 3,600 hrs. $34.00 per hour Required: 1. The current cost per unit is ___________.
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Sheffield's Bakery makes a variety of home-style cookies for upscale restaurants in the Atlanta metropolitan area. The company's best-selling cookie is the double chocolate almond supreme. Sheffield's recipe requires 10 ounces of a commercial cookie mix, 5 ounces of milk chocolate, and 1 ounce of almonds per pound of cookies. The standard direct materials costs are $0.80 per pound of cookie mix, $4 per pound of milk chocolate, and $19 per pound of almonds. Each pound of cookies requires 1 minute of direct labor in the mixing department and 5 minutes of direct labor in the baking department. The standard labor rates in those departments are $12.70 per direct labor hour (DLH) and $27 per DLH, respectively. Variable overhead is applied at a rate of $37.00 per DLH; fixed overhead is applied at a rate of $60 per DLH.Required:1. Calculate the standard cost for a pound of Sheffield's double chocolate almond supreme cookies. (Round answer to 2 decimal places, e.g. 3.51.)
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Teal Company sells televisions at an average price of $814 and also offers to each customer a separate 3-year warranty contract for $81 that requires the company to perform periodic services and to replace defective parts. During 2017, the company sold 327 televisions and 277 warranty contracts for cash. It estimates the 3-year warranty costs as $19 for parts and $29 for labor, and accounts for warranties separately. Assume sales occurred on December 31, 2017, and straight-line recognition of warranty revenues occurs.Account Title Debit Credit 1. Cash (Correct) $304,533 (Correct) 2. Sales Rev. (Correct) $279,585 (Correct) 3. Unearned Sales Warranty (Correct) $24948 (correct) What liability relative to these transactions would appear on the December 31, 2017, balance sheet and how would it be classified?
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Denton Company manufactures and sells a single product. Cost data for the product are given below: Variable costs per unit: Direct materials $5 Direct labor 11 Variable manufacturing overhead 3 Variable selling and administrative 1 Total variable cost per unit $20 Fixed costs per month: Fixed manufacturing overhead $120,000 Fixed selling and administrative 169,000 Total fixed cost per month $289,000The product sells for $52 per unit. Production and sales data for July and August, the first two months of operations, are as follows: Units Produced Units SoldJuly 27,000 23,000 August 27,000 31,000 The companys Accounting Department has prepared absorption costing income statements for July and August as presented below: July AugustSales $1,196,000 $1,612,000 Cost of goods sold 483,000 651,000 Gross margin 713,000 961,000 Selling and administrative expenses 241,000 265,000 Net operating income $472,000 $696,000 Required:1. Determine the unit product cost under absorption costing and variable costing.2. Prepare contribution format variable costing income statements for July and August.3. Reconcile the variable costing and absorption costing net operating income.
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The Lopez-Portillo Company has $11.3 million in assets, 90 percent financed by debt, and 10 percent financed by common stock. The interest rate on the debt is 10 percent and the par value of the stock is $10 per share. President Lopez-Portillo is considering two financing plans for an expansion to $21.5 million in assets. Under Plan A, the debt-to-total-assets ratio will be maintained, but new debt will cost a whopping 10 percent! Under Plan B, only new common stock at $10 per share will be issued. The tax rate is 30 percent. a. If EBIT is 11 percent on total assets, compute earnings per share (EPS) before the expansion and under the two alternativesEarnings Per ShareCurrent $ Plan A $ Plan B $ b. What is the degree of financial leverage under each of the three plans? (Round your answers to 2 decimal places.)Degree OfFinancial LeverageCurrent Plan A Plan B c. If stock could be sold at $20 per share due to increased expectations for the firms sales and earnings, what impact would this have on earnings per share for the two expansion alternatives? Compute earnings per share for each. (Round your answers to 2 decimal places.)Earnings Per SharePlan A $ Plan B $
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In late December you decide, for tax purposes, to sell a losing position that you hold in Twitter, which is listed on the NYSE, so that you can capture the loss and use it to offset some capital gains, thus reducing your taxes for the current year. However, since you still believe that Twitter is a good long-term investment, you wish to buy back your position in February the following year. To get this done you call your Charles Schwab brokerage account manager and request that he immediately sell your 1 comma 200 shares of Twitter and then in early February buy them back. Charles Schwab charges a commission of $4.95 for online stock trades and for broker-assisted trades there is an additional $25 service charge, so the total commission is $29.95.a. Suppose that your total transaction costs for selling the 1,400 shares of Twitter in December were $59.95. What was the bid/ask spread for Twitter at the time your trade was executed? b. Given that Twitter is listed on the NYSE, do your total transaction costs for December seem reasonable? Explain why or why not. c. When your February statement arrives in the mail, you see that your total transaction costs for buying the 1,400 shares of Twitter were $47.95. What was the bid/ask spread for Twitter at the time your trade was executed? d. What are your total round-trip transaction costs for both selling and buying the shares, and what could you have done differently to reduce the total costs?
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Use the following information to create an income statement and balance sheet.Accounts Payable 250,000Accounts Receivable 230,000Cash 370,000Common Stock 100,000Costs 430,000Depreciation Expense 40,000Dividends 73,800Goodwill 170,000Interest Expense 60,000Inventory 80,000Land 499,770Line of credit (used) 150,000Long Term Loan 400,000Paid in Surplus 225,000Preferred Stock 75,000
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Which of the following cannot be considered a benefit of implementing HACCP
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David is certified by his doctor as terminally ill with liver disease. His doctor certifies that he cannot reasonably be expected to live for more than a year. He sells his life insurance policy to Viatical Settlements, Inc., for $250,000. He has paid $20,000 so far for the policy.How much of the $250,000 must David include in his taxtable income?
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