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# Accounting

### Riscalla Company has two divisions, A and B. The following information is available:

1. Riscalla Company has two divisions, A and B. The following information is available: Division A Revenue: \$300,000 Income: \$30,000 Invested capital: \$100,000 Cost of capital: 20% Division B Revenue: \$350,000 Income: \$90,000 Invested capital: \$150,000 Cost of capital: 15% Calculate the residual income for ea

### Dividend Valuation Model and Wealth Maximization

Eastern Telecom is trying to decide whether to increase its cash dividend immediately or use the funds to increase its future growth rate. It will use the dividend valuation model for analysis purposes. The model formula is as follow: P0 = __D1___ Ke - g P0 = Price of stock D1 = Dividend at the end of the first yea

### The Keever Corporation's purchasing manager obtained a special price on an aluminum alloy from a new supplier, resulting in a direct-material price variance of \$9,800(F).

The Keever Corporation's purchasing manager obtained a special price on an aluminum alloy from a new supplier, resulting in a direct-material price variance of \$9,800(F). The alloy produced more waste than normal, as evidenced by a direct-material quantity variance of \$3,000(U), and was also difficult to use. This slowed worker

### Tax: charitable contributions, and AMT calculation

24. Doug's records contain the following information: 1. Donated stock having a fair market value of \$3,600 to a qualified charitable organization. He acquired the stock five months previously at a cost of \$2,400. 2. Paid \$700 to a church school as a requirement for the enrollment of his daughter. 3. Paid \$200 for an

### Tax: unreasonable compensation; deductions for medical, taxes, interest

1). Anita, the controlling shareholder and an employee of Southwest Corporation, receives an annual salary of \$750,000. Based on several factors including the size of the corporation's operations and a comparison of salary received by officers of comparably-sized corporations, the IRS contends that Anita's salary should be no h

### Tax Accounting: passive losses, depreciation, Sec 1231, ordinary gain

1). Julie reports the following income and loss: Salary \$ 90,000 Income from activity A 60,000 Loss from activity B ( 35,000) Loss from activity C ( 55,000) Activities A, B, and C are all passive activities. Based on this information, Julie has a. adjusted gross income of \$60,000. b. salary of \$90,000 and net losse

### Tax Accounting: basis in equipment, stock, gain or loss on sale

1). Mr. Dennis, sole proprietor of Dennis Company, purchased a machine for use in his business. Mr. Dennis' costs in connection with this purchase were as follows: Note to seller \$33,000 Cash paid to seller 5,000

### Tax Accounting: calculate adjusted basis in home, rental and other property

1). Michelle purchased her home for \$150,000, and subsequently added a garage costing \$25,000 and a new porch costing \$5,000. Repairs to the home's plumbing cost \$1,000. The adjusted basis in the home is a. \$150,000. b. \$151,000. c. \$180,000. d. \$181,000. 2). Which one of the following does not affect the adjusted basis

### Depreciation tax shield 7

7. A project will increase sales by \$140,000 and cash expenses by \$95,000. The project will cost \$100,000 and be depreciated using the straight-line method to a zero book value over the 4-year life of the project. The company has a marginal tax rate of 34%. What is the value of the depreciation tax shield? (Points: 2) \$

### Megatronics corporation a massive retailer of electronics products, is organized in four separate divisions. The four divisional managers are evaluated at year-end, and bonuses are awarded based on R

I need help with this problem. Megatronics corporation a massive retailer of electronics products, is organized in four separate divisions. The four divisional managers are evaluated at year-end, and bonuses are awarded based on ROI. Last year, the company as a whole produced a 13 percent return on its investment. During t

### ROI: residual income

I need help with this problem. This is a sample problem that was brought up in class. Wyalusing Industries has manufactured prefabricated houses for over 20 years. The houses are constructed in sections to be assembled on customer' lots. Wyalusing expanded into the precut housing market when it acquired Fairmont Company, o

### Accounting errors

Rensing Company's December 31 year-end financial statements contained the following errors: Dec 31 2007 Dec 31 2008 Ending inventory \$7,500 understated \$11,000 overstated Depreciation Expense \$2,000 understated An insurance premium of \$18,000 was prepaid in 2007 cov

### E6-5 Segregation of Duties

The following task are perfrmed by three employees, each of whom is capable of performing all of the tasks. Do not concern yourself with the time required to perform the tasks, but with the need to provide for segregation of duties. Assign the duties by using a check mark to indicate which employee should prform each task. Remem

### Net pay/ vacation pay

27. The following totals for the month of June were taken from the payroll register of ABC Company: Salaries expense \$13,000 Social security and Medicare Taxes withheld 975 Income Taxes withheld 2,600 Retirement Savings 500 The entry to record the payment of net pay would include a ________. debit to Salaries P

### Income tax liability: replacement property in a sale of land

You have a client who is in possession of 1,000 acres of farm ground. The farm ground was purchased 10 years ago for \$160,000, and is now worth \$2,000,000. The client wishes to sell the farm ground and purchase an apartment building of approximately equal value to his farm ground. How would you suggest your client obtain the r

### 13. Bright Co. holds Park Co.'s \$20,000, 120 day, 9% note. The entry made by Bright Co. when the note is collected, assuming no interest has previously been accrued is:

13. Bright Co. holds Park Co.'s \$20,000, 120 day, 9% note. The entry made by Bright Co. when the note is collected, assuming no interest has previously been accrued is: Cash 20,000 Notes Receivable 20,000 Accounts Receivable 20,600 Notes Receivable 20,000 Interest Revenue 600 Cash 20,60

### 11. ABC company uses the estimate of sales method of accounting for uncollectible accounts. ABC estimates that 3% of all credit sales will be uncollectible. On January 1, 2005, the Allowance for Doubtful Accounts had a credit balance of \$2,400. During 2005, ABC wrote-off accounts receivable totaling \$1,800 and made credit sales of \$100,000. After the adjusting entry, the December 31, 2005, balance in the Uncollectible Accounts Expense would be ________.

11. ABC company uses the estimate of sales method of accounting for uncollectible accounts. ABC estimates that 3% of all credit sales will be uncollectible. On January 1, 2005, the Allowance for Doubtful Accounts had a credit balance of \$2,400. During 2005, ABC wrote-off accounts receivable totaling \$1,800 and made credit sal

### Uses the direct write-off method of accounting for uncollectible

9. The LMN Co. uses the direct write-off method of accounting for uncollectible accounts receivable. The entry to write off an account that has been determined to be uncollectible would be as follows: ________. debit Allowance for Doubtful Accounts; credit Accounts Receivable debit Sales Returns and Allowan

### Busy Pig Company Two Products

Busy Pig company produces two products. Absorption costing for the products look like this: Product A Product B Direct materials 6000 40 000 Direct wages 10 000 20 000 Indirec

### Portfolio Returns

Problem: Rate of Return if State Occurs State of Economy Probability of State of Econ Stock A Stock B Stock C Boom 0.30 0.30 0.45 0.33 Good

### Economies of scale Develop a list of variables that may affect economies of scale (taxes, rent, overhead costs, quantity discounts on ordering from suppliers, efficiency of production, etc.) and describe with real life examples of how these factors may affect the price of each unit, and how a firm may incorporate these concepts to take advantage of economies of scale. of economies of scale.

Economies of scale Develop a list of variables that may affect economies of scale (taxes, rent, overhead costs, quantity discounts on ordering from suppliers, efficiency of production, etc.) and describe with real life examples of how these factors may affect the price of each unit, and how a firm may incorporate these concep

### Distribution of proceeds among partners

After realization of a portion of the non cash assets of Bemis, Coppo & Dipp LLP, which was being liquidated, the capital balances were Bemis, 54,600; Coppo, 40,500; and Dipp, 17,000. Cash of 34,100 and other assets with a carrying amount of 98,000 were on hand. Creditors' claims totaled 20,000. Bemis, Coppo, and Dipp share net

### ROI and operating income

Suppose that I have an operating income of 90,000 and net assets with a fair market value of 300,000. Another company pays 450,000 for my net assets and business activities. How do I: 1. Calculate the ROI for Company A. based on its present operating income and the fair market value of its net assets? and, 2. How do I

Hi! I need help calculating the net realizable value of A/R at 12/31/09, as well as preparing a balance sheet for the company. Current assets section of balance sheet for Company B: A/R - \$63,000 Less: Allowance for bad debts - (9,000) \$54,000 The company's accounting records revealed the following information fo

### Accounting for Bad Debts issue

Here's the question: as of January 2009, the balance in Company A's Allowance for Bad Debts account was 9,720. During the year, a total of 23,900 of delinquent receivables was written off as bad debt. The balance in the Allowance for Bad Debt account at December 31, 2009 was 10,480. a. What was the total amount of bad debts

### Prepare Kelly and Chanelle's tax return Form 1040 and Schedules A, B, C, and SE for the current year.

Kelly and Chanelle Chambers, ages 47 and 45, are married and live at 584 Thoreau Drive, Boston, MA 59483. Kelly's Social Security number is 254-93-9483 and Chanelle's is 374-48-2938. The Chambers have two children: Emma, age 23, and Chet, age 19. Their Social Security numbers are 385-64-8496 and 385-68-9462, respectively. Emma i

### Custom Carpeting reported the following data for its most recent fiscal year's manufacturing operations:

43. Custom Carpeting reported the following data for its most recent fiscal year's manufacturing operations: Direct labor hours 6,000 Direct labor cost \$120,000 Machine hours 4,000 Material cost \$800,000 Manufacturing overhead \$600,000 Manufacturing overhead is allocated to jobs b

### AT produces two compression machines that are popular with manufacturers of plastics: no. 165 and no. 172.

I need help with this problem. AT produces two compression machines that are popular with manufacturers of plastics: no. 165 and no. 172. Machine no. 165 has an average selling price of \$60,000, whereas no. 172 typically sells for approximately \$55,000. The company is very concerned about quality and has provided the follow

### Filing Status and Number of Dependents For US Federal Tax Return: how many dependents can John take?

I need an easy way to understand how to determine the filing status of the taxpayer and the number of dependents that a taxpayer can claim on his tax return. I have problems with head of household, qualifying widow with a child and married filing separately. Sometimes it is complicated to determine the number of dependents.

### Job costing-vs-process costing,manufacturing overhead rate

1.Describe job-costing and process-costing systems. Explain when it would be appropriate to use each. 2.In a job-costing system, explain why it is necessary to apply indirect costs to production through the use of a manufacturing overhead cost allocation rate.