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Gain / Loss on Assets

Green Industries (a sole proprietorship) sold three SS1231 assets during 2005. Data on these property dispositions are as follows: Asset Cost Acquired Depreciation Sold for Sold on Rack $100,000 10/10/01 $60,000 $135,000 10/10/05 Forklift $35,000 10/16/02 $23,000 $

Accounting for Income Taxes

Accounting for Income Taxes a. Roberts Corp. reports pretax accounting income of $200,000, but due to a single temporary difference, taxable income is only $150,000. At the beginning of the year, no temporary differences existed. Roberts is subject to a tax rate of 40%. Required: Prepare the compound journal entry to reco

Accounting changes and error corrections: - Journal Entries

Accounting changes and error corrections: a. Macintosh Inc. changed from LIFO to the FIFO inventory costing method on January 1, 2006. Inventory values at the end of each year since the inception of the company are as follows: FIFO LIFO 2004 $200,000 $180,000 2005 400,000 360,000 Requi

Earnings per Share

On December 31, 2005, Brisbane Company had 100,000 shares of common stock outstanding and 30,000 shares of 7%, $50 par, cumulative preferred stock outstanding. On February 28, 2006, Brisbane purchased 24,000 shares of common stock on the open market as treasury stock paying $40 per share. Brisbane sold 6,000 treasury shares on

Bond Rates and Proxy/Takeover Questions

1. You are given the following data; k* = real risk-free rate = 4.0% Constant inflation premium = 7.0% Maturity risk premium = 1.0% Default risk premiums for AAA bonds = 3.0% Liquidity premium for long-term = 2.0% Assume that a highly liquid market does NOT exist for long-term US Treasury bonds, and the expected

Tax deductions: away from home expenses

21. Mr. and Mrs. South's adjusted gross income was $85,000. During the year they incurred and paid the following: Publications (unreimbursed and related to employment) - $500 Tax return preparation fee - 1,000 Professional dues - 1,200 Fees for will preparation (no tax advice) - 800 Life insurance premiums - 1,400 Assu

Accounting Problems

Accounting Problems. Classification of product cost and period cost, statement of cash flows for Millco, income statement and balance for Aron Concrete, and cash budget of Ritewell Publishers. See attached file for full problem description. Bright, Inc., a producer of educational toys for children, incurs the following

Accounting Problem: Example

Please see attached for full problem. 1. Based on what you have learned regarding ABC costing, please help Mary prepare a revised cost report by: a. Computing the overhead rate for various activities in the spirit of ABC b. Preparing a new cost report for the three products c. In your opinion how many cost pools will be s

Home Office Tax Deductions

Brittney is a broker who works full-time for a national brokerage firm. She also maintains an office in her home for her sole proprietorship, which she uses to provide financial planning services to clients. Expenses of the business (other than home office expenses) are $3,200. Brittany's home expenses are as follows:

Taxes on sale of home

Milton, who is single, listed his personal residence with a realtor on March 3, 2005, at a price of $250,000. He rejected several offers in the $200,000 range during the summer. Finally, on August 16, 2005, he and the purchaser signed a contract to sell at $245,000. The sale (i.e. closing) took place on September 7, 2005. The cl

Like Kind Exchanges

Teresa calls you to discuss her latest tax planning ideas. At a cocktail party last night she was mesmerized by a discussion of like kind exchanges. She now feels that like kind exchanges will be the solution to all of her tax problems. She just "knows" she should do the following like kind exchanges this year: · Exc

Tax Liability

Margie purchased a commercial building in January 1990 for $100,000. She also purchased equipment for $30,000 at that time and opened a business. She replaced the roof of the building in August 1995 at total cost of $20,000. She has depreciated the building and new roof using the straight-line method. The equipment has been full


Scoff Division of World-Wide Paint currently is losing money; therefore senior management is considering selling or closing it. Scoff's only product an intermediate chemical called Binder is used principally by the firm's Latex Division. If Scoff is sold, Latex Division can purchase ample quantities of Binder in the market at su

Comparison of Single Cost Drivers to ABC

A road contractor has been using kilometers of road constructed as a cost driver. Based on last years costs he estimates that he can build a kilometer of road for $3 million. The county has recently asked him for an estimate to build 20 kilometers of road. Before making his bid based on his $3 million per kilometer estimate,

ROI and Residual Incomes

ROI and Residual Incomes BOATS A B C D E Revenues 5,500,000 8,300,000 10,400,000 12,800,000 20,400,000 Annual Expenses 3,800,000 8,200,000 9,100,000 9,900,000 18,900,000 Income 1,700,000 100,000 1,300,000 2,900,000 1,500,000 Book Value 0 5,200,000 6,100,000 5,200,000 8,300,000 Market Value 5,000,000

Optimal Output levels for Measer Enterprises

Measer Enterprises produces standard telephone key pads. The firm operates in a highly competitive market in which the keypads are sold for $4.50 each. Du tto the nature of the production technology the firm can produce only between 10,000 and 13,000 units per month in fixed increments of 1,000 units Measer has the following cos

Activity Based Costing in a Dialysis Clinic

A dialysis clinic offers two services hemiodialysis(HD) and peridoneal dialysis (PD). HD requires patients to come to the clinic three time a week to receive treatment. PD allows patients to administer their own treatment daily in their own homes. The profit analysis of the two services follows: Total HD PD Revenue

Accounting Information Systems (AIS)

1. From the perspective of an accountant, what are your priorities about the accounting information system performance? How are these priorities related to the accounting internal control, the system components and the processes of developing the system? 2. What are the drawbacks of poorly documented systems?

Managerial Accounting Problems

1. Machain Corporation applies manufacturing overhead to products on the basis of standard machine-hours. The company's cost formula for variable overhead cost is $2.90 per machine hour. The actual variable overhead cost for the month was $15,270. The original budget for the month was based on 5,000 machine hours. The compa

Goodwill Asset Amortiztion/Depletion

Data related to the acquisition of timber rights and intangible assets during the current year ended December 31 are as follows: a. Timber rights on a track of land were purchased for $720,000 on July 11. The stand of timber is estimated a 2,250,000 board feet. During the current year, 600,000 board feet of timber were

Managerial Accounting

16. Yehle Inc. regularly uses material YS1E and currently has in stock 460 liters of the material for which it paid $2,530 several weeks ago. If this were to be sold as is on the open market as surplus material, it would fetch $4.55 per liter. New stocks of the material can be purchased on the open market for $5.45 per liter, bu

Accounting Problems

1.) A total of 6850 kilograms of raw material was purchased at a total cost of $21,920. The material price variance was $1370 favorable. The standard price per kilogram for the raw material must be: A) $0.20 B) $3.00 C) $3.20 D) $3.40 2.) Merle Corporation applies manufacturing overhead to products on the basis of s

Itemized Deductions Limitations

Bob, who is single had AGI of $400,000 in 2006. He incurred the following expenses & losses during the year. Medical expenses before 7.5% of AGI limitation $39,500 State & local income taxes $5,200 Real Estate taxes $4,400 Home mortgage interest

Taxable Income and Home Mortgage Interest Rates

Janet, (single) has the following items for 2006: - Salary $140000 - Home mortgage interest $10,000 A hurricane completely destroyed her duplex during the current year. She lived in half of the duplex & rented the other half. She paid $400,000 for the duplex & has taken $80,000 of cost recovery on the rental portion. It w

Accounting Review Problems

Introduction to Managerial Accounting Review Questions Chapter 7 1. Which of the following might be included as a disbursement on a cash budget? A) A Above B) B Above C) C Above D) D Above 2. Thirty percent of Sharp Company's sales are for cash and 70% are on account. Sixty percent of the account sales

Multi-nation gross margin and tax calculations

Multi-National Enterprises (MNE) operates in two countries, X and Y, with tax rates of 40% and 10%, respectively. Production costs are exactly the same in each country. The following summarizes the operating data for the two subsidiaries. (All data have been converted to dollars to simplify the example.) Subsidiary In Country

Managerial Accounting Problem

Cost Volume Profit Analysis You are considering the purchase of a hotel with 20 rooms. If you buy it ,the fixed costs are expected to be $200,000 per year. The variable costs of renting a room for one night include $20 for maid service and $5 for utilities and other costs. Assume no taxes. a If you expect to rent the rooms