Columbo Corporation, a calendar-year corporation, began business in 2003. With the initial capital contributions from its sole shareholder, it purchased a building on March 12 for $250,000. It also purchased the following items for use in the business. Item Purchase Date Acquisition Cost Office Furniture April 1
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16. Mossfeet Shoe Company is a single product firm. Mossfeet is predicting that a price increase next year will not cause unit sales to decrease. What effect would this price increase have on the following items for next year? Contribution Break-Even Margin Ratio Point A) Increase Decrease B) Decrease Decrease
The Assembly Department started the month with 78,000 units in its beginning work in processing inventory. An additional 254,000 units were transferred in from the prior department during the month to begin processing in the Assembly Department. There were 21,000 units in the ending work in processing inventory of the Assembly
20. The following information pertains to Nova Company's Cost-Volume-Profit relationships: Breakeven Point in Units Sold 1,000 Variable Expenses per Unit $500 Total Fixed Costs $150,000 How much will be contributed to Net Operating Income by the 1,001st unit sold? A) $650. B) $500. C) $150. D) $ 0.
Why would a CFO be interested in evaluating the employees and employee compensation plans during a due diligence process?"
9. At the date of an acquisition which is not a bargain purchase, the purchase method A) consolidates the subsidiary's assets at fair market value and the liabilities at book value. B) consolidates all subsidiary assets and liabilities at book value. C) consolidates all subsidiary assets and liabilities at fair market valu
6. Club Co. appropriately uses the equity method to account for its investment in Chip Corp. As of the end of 2004, Chip's common stock had suffered a significant decline in market value, which is expected to be recovered over the next several months. How should Club account for the decline in value? A) Club should switch to
38. On November 8, 2003, Power Corp. sold land to Wood Co., its wholly owned subsidiary. The land cost $61,500 and was sold to Wood for $89,000. From the perspective of the combination, when is the gain on the sale of the land realized? A) Proportionately over a designated period of years B) When Wood Co. sells the land to
17. In a purchase transaction where cost exceeds book value, which statement is true? A) Net assets of the acquired company are revalued to their fair market values and any excess of cost over fair market value is allocated to goodwill. B) Net assets of the acquired company are maintained at book value and any excess of cost
Dr. Stephanie White, the Chief Administrator of Uptown Clinic, a community mental health agency, is concerned about the dilemma of coping with reduced budgets next year and into the foreseeable future, but increasing demand for services. In order to plan for reduce budgets, she must first identify where costs can be cut or reduc
1. Complete liquidation - open transaction ABC,Inc. adopts a plan of complete liquidation on July 3, 10*1 and pursuant to the plan makes the following distributions to Anne Able, its sole shareholders, who has a basis of $26,000 for her stock: July 23,20*1 $9,000 Mar 11,20*2
1. Subsidiary liquidation ABC, Inc. owns 95% of the outstanding capital stock of XYZ, Inc. liquidates pursuant to IRC 332 and distributes property, as follows: To ABC, Inc. FMV $95,000, Basis $40,000 To 5% shareholders FMV $ 5,000, Basis $2,000 Will XYZ,
Proops Company has a weighted-average unit contribution margin of $30 for its two products, Drew and Carey. Expected sales for Proops are 40,000 Drews and60,000 Careys. Fixed expenses are $1,800,000. At the expected sales level, Proops' net income will be:
Parallel Consulting Ltd began 1 Jan 2006 with 200,000 shares of $1 par value common stock outstanding. The stockholders' equity is as follows: Stockholders' equity Capital stock: Ordinary share, $1 par value, 1,000,000 shares authorized, 200,000 shares issued and outstanding $200,000 Additional paid-in capital: Sh
1. Gaw Company owns 15% of the common stock of Teal Corporation and used the fair-value method to account for this investment. Teal reported net income of $110,000 for 2002 and paid dividends of $60,000 on October 1, 2002. How much income should Gaw recognize on this investment in 2002? A) $16,500 B) $ 9,000 C) $25,500
On January 1, 2003, Bangle Company purchased 30% of the voting common stock of Sleat Corp. for $1,000,000. Any excess of cost over book value was assigned to goodwill. During 2003, Sleat paid dividends of $24,000 and reported a net loss of $140,000. What is the balance in the investment account on December 31, 2003? A) $950
Cashen Co. paid $2,400,000 to purchase all of the common stock of Janex Corp. on January 1, 2001. Janex's reported earnings for 2003 totaled $432,000, and it paid $120,000 in dividends during the year. The amortization of allocations related to the investment was $24,000. Cashen's net income, not including the investment, was
Use the following information to answer Questions 21 and 22. On January 1, 2002, Cale Corp. paid $1,020,000 to purchase Kaltop Co. Kaltop maintained separate incorporation. Cale used the equity method to account for the investment. The following information is available for Kaltop's assets, liabilities, and stockholders' e
When Jolt Co. acquired 75% of the common stock of Yelts Corp. Yelts owned land with a book value of $70,000 and a fair market value of $100,000. What amount should have been reported for the land on a consolidated balance sheet, assuming the Economic Unit Concept was used? A $70,000 B $75,000 C $85,000 D $92,500
Perch Co. acquired 80% of the common stock of Float Corp. for $1,600,000. The fair market value of Float's net assets was $1,850,000, and the book value was $1,500,000. What is the dollar amount of Noncontrolling Interest which should appear on a balance sheet prepared immediately after consolidation according to the Econom
Perch Co. acquired 80% of the common stock of Float Corp. for $1,600,000. The fair market value of Float's net assets was $1,850,000, and the book value was $1,500,000. What amount of Goodwill should have been recognized according to the Economic Unit Concept? A $150,000 B $250,000 C $0 D $120,000 E $170,000
Reisen Travel offers helicopter service from suburban towns to John F. Kennedy International Airport in New York City. Each of its 10 helicopters makes between 1,000 and 2,000 round-trips per year. The records indicate that a helicopter that has made 1,000 round-trips in the year incurs an average operating cost of $300 per roun
Provide appropriate supporting analysis for your answer choice. Abbey Company, which has only one product, has provided the following data concerning its most recent month of operations: Selling price $129 Units in beginning inventory 0 Units produced 6,300 Units sold 6,100 Units in ending inventory 200
Sharon, a single taxpayer, has taxable income of $100,000, a regular tax liability of $26,560, a positive AMT adjustment due to limitations on itemized deductions of $20,000, and tax preferences of $25,000 in 2006. What is Sharon's AMT for 2006? Can you please show me step by step how this is calculated?
Cade Company produces a single product. The cost of producing and selling a single unit of this product at the company's normal activity level of 40,000 units per month is as follows: Direct materials $38.80 Direct labor $9.70 Variable manufacturing overhead $2.30 Fixed manufacturing overhead $18.10 Variable se
Explain the advantages and disadvantages of a cafeteria plan?Please explain and provide a reference.
What would be the cost per equivalent unit for conversion costs for September on the Casting Department's production report?
Maenhout Corporation uses the FIFO method in its process costing system. Operating data for the Casting Department for the month of September appear below: Units Percentage Complete Beginning work in process inventory
During its fiscal year, Morey Corporation had outstanding 600,000 shares of $6.50 preferred stock and 2,000,000 shares of uncommon stock. Morey's net income for the year was $19,550,000. The company also had granted stock options to employees for 200,000 shares of common stock at $10 per share. The average price of the compan
Background information A company has two major businesses that it operates. One business manufactures and sells unicycles for commercial use in circuses, etc. (total sales of $150M), and the other sells bicycles to the public (total sales of $20M). The unicycle business occupies 75,000 square feet of the manufacturing wareho
The Congress Company has identified two methods for producing playing cards. One method involves using a machine having a fixed cost of $10,000 and variable costs of $1.00 per deck of cards. The other method would use a less expensive machine (fixed cost = $5,000), but it would require greater variable costs ($1.50 per deck of