Cooper, Inc., experienced the following events during 2004. 1. Acquired $55,000 cash from the issue of common stock. 2. Paid $15,000 cash to purchase land. 3. Borrowed $5,000 cash from First Bank. 4. Provided services for $21,000 cash. 5. Paid $1,500 cash for utilities expense. 6. Paid $11,000 cash for other operating expe
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1. If you were to pick one company for your SLP company to merge with, what would it be? Explain your choice with respect to possible benefits of this merger and why you would choose this company over any other choice for a potential. 2. How would you finance a takeover of this chosen corporation? Explain your reasoning.
Question 1 From the following income statement (in millions), calculate operating income after tax using both the top-down and bottom-up methods. Use a tax rate of 37 percent. Revenue $ 6,450 Cost of goods sold (3,870) Operating expenses (1,843) Interest expense (135) Income taxes (181) Net
Allocating Service Department Costs Armstrong Industries produces electronic equipment for the marine industry. Armstrong has two service departments (maintenance and computing) and two production departments (assembly and testing). Maintenance costs are allocated on the basis of square footage occupied, and computing costs ar
Activity-Based Costing The Divine Cheesecake Shoppe is a national bakery that is known for its strawberry cheesecake. They also make 12 different kinds of cheesecake as well as several other types of bakery items. They have recently adopted an activity-based costing system to assign manufacturing overhead to products. The fo
Which one of the following is a characteristic of a business combination that should be accounted for as an acquisition? The combination must involve the exchange of equity securities only. The transaction establishes an acquisition fair value basis for the company being acquired. The two companies may be about the same siz
The fair value of Carnes' Land and Buildings are $650,000 and $550,000, respectively. On May 1, 2000, Riley Company issues 30,000 shares of its $10 par value ($25 fair value) common stock in exchange for all of the shares of Carnes' common stock. On May 1, 2000, what value is assigned to the investment account?
Hoyt Corporation agreed to the following terms in order to acquire the net assets of Brown Company on January 1, 2009: (1.) To issue 400 shares of common stock ($10 par) with a fair value of $45 per share. (2.) To assume Brown's liabilities which have a fair value of $1,500. On the date of acquisition, the consideration trans
Calculating Material and Labor Variances Star Band Uniforms uses a standard costing system. The standard material and labor costs for producing a marching band hat is as follows: Materials (0.70 yards × $10.00) $7.00 Direct labor (0.80 hours × $12.50) $10.0 During May, the company produced 3,000 band hats; 3,50
Kristen had the followig transactions for 2008: Salary, moving expenses incurred to change jobs, inheritiance received from deceased uncle, life insurance proceeds from policy on uncle's life (Kristen was named the beneficiary), cash prize from church raffle, payment of state income tax. What is Kristen's AGI for 2008?
Dabney and Nancy are married, both gainfully employed, and have two children who are 3 and 6 years old. Dabney's salary is $35,000 while Nancy's salary is $40,000. During the year, they spend $7,000 for child care expenses that are required so both of them can work outside of the home. Calculate the credit for child and d
How does the code of professional conduct impact the internal accounting function?
A fixed asset typically goes through the life cycle of acquisition, usage, and disposal. For each of these stages of the life cycle, discuss one key accounting issue related to a fixed asset the company must address.
Solve the problems: Application Practice Answer the following questions. Use Equation Editor when writing mathematical expressions or equations. First, save this file to your hard drive by selecting Save As from the File menu. Click the white space below each question to maintain proper formatting. 1. You have
Cost Allocation Process Apex Company's Copy Department, which does almost all of the photocopying for the Sales Department and the Administrative Department, budgets the following costs for the year, based on the expected activity of 6,000,000 copies: Salaries (fixed) $94,300 Employee benefits (fixed) 15,400 Depreciati
The predetermined overhead allocation rate for Forsythe, Inc., is based on estimated direct labor costs of $400000 and estimated factory overhead of $500000. Actual costs incurred were: Direct materials $250000 Direct labor $410000 Indirect materials $55000 Indirect labor
One way that banks can reduce the duration of their asset portfolios is through the use of: Choose one answer. a. fixed rate mortgages. b. adjustable rate mortgages. c. certificates of deposit d. short-term borrowing. e. none of the above.
Holmes Company prepares monthly cash budgets. Relevant data from operating budgets for 2011 are: January February Sales $350,000 $400,000 Direct materials purchases 110,000 130,000 Direct labor 90,000 100,000 Manufacturing overhead 70,000 75,000 Selling and administrative expense
Please help explain the following: A leverage of 1.81 means that: (Assume leverage is calculated as Assets/Equity) 1. Assets are funded with 81% debt. 2. Assets are funded with 81% equity. 3. $1.81 of assets is funded with $1.00 of debt and $0.81 of equity. 4. $1.81 of assets is funded with $1.00 of equity and $0.81 of deb
P11-3B John's Drug Store has four employees who are paid on an hourly basis plus time-and-a-half for all hours worked in excess of 40 hours a week. Payroll data for the week ended February 15, 2010, are presented below: Employees: Hours Worked: Hourly Rate: Fed Inc Tax Withholdings: United Fund: T
Sally Brown died, leaving to her husband Linus an insurance policy contract that provides that the beneficiary (Linus) can choose any one of the following four options. $55,000 immediate cash. $3,700 every 3 months payable at the end of each quarter for 5 years. $18,000 immediate cash and $1,600 every 3 months for 10 yea
What are the sources of evidence a CPA uses in judging whether there is sufficient authoritative support for applying an accounting principal to a transaction or set of transactions recorded in a client's books?
The heating division of the ITA international produces a heating element that it sells to its customers for $42 per unit. Its variable cost per unit is $19, and its fixed cost per unit is $10. Top management of ITA International would like the Heating Division to transfer 15,000 heating units to another division within the compa
Identify the tax issue or issues suggested by the following situations and state each issue in the form of a question.(need two questions for each situation) 1.Guenther is researching a tax issue involving the deductibility of costs to remodel an office building. He has found several authorities permitting such costs to be de
Find a 2006 10th Circuit Court of Appeals decision involving Roger L. Watkins and answer the following questions: a.What is the complete citation to the case? b.What is the citation to the original trial court decision to which this appeal relates? c.In your own words, explain the basic tax issues addressed in the case.
An accountant for a company makes the assumptions or performs the activities listed below. Match which of the following concepts of accrual accounting most directly relates to each assumption or action: a) Periodicity b) Going concern c) Matching rule d) Revenue recognition e) Deferral f) Accrual 1. In estimating the
Which of the following statements is correct? A) Traditional costing systems allocate both manufacturing costs and non-manufacturing costs B) Activity-based costing systems allocate only manufacturing costs C) Activity-based costing systems allocate both manufacturing costs and non-manufacturing costs D) Traditional costin
A 15% increase in production will result in: A) a 15% increase in the variable cost per unit B) a 15% increase in total mixed costs C) a 15% increase in total manufacturing costs D) a 15% decrease in total variable costs E) none of the above.
In this module, we are going to review your organization and its applicability for Activity Based Costing (ABC). Identify a product or service in your organization that could use ABC. You can also use this technique for selling and administrative costs. Then identify at least two activities for ABC and the appropriate cost dri
One of your clients, David, has been trying to convince his mother, Lorinda, to give him a tract of undeveloped land. Lorinda is willing to make the gift, but she is uncertain about the tax consequences involved. In any event, she wants David to pay any gift tax that would result. The land was purchased by Lorinda