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
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How are the tax benefits of net operating losses (NOL) disclosed on financial statements? Which is more beneficial to an organization, a NOL carry-forward or a NOL carry-back? Why? When would a company decide to forego a carry-back?
Why are there differences between taxable and financial income? What are some examples of permanent and temporary differences? Why do these differences exist? How do they affect the financial statements?
In January 2004, Wilkinson, Inc., acquired 20 percent of the outstanding common stock of Bremm, Inc., for $700,000. This investment gave Wilkinson the ability to exercise significant influence over Bremm. Bremm's assets on that date were recorded at $3,900,000 with liabilities of $900,000. Any excess of cost over book value of t
When should a consolidated entity recognize a goodwill impairment loss? a. If both the market value of a reporting unit and its associated implied goodwill fall below their respective carrying values. b. Whenever the market value of the entity declines significantly. c. If the market value of a reporting unit falls b
During 2006, Edgemont Corporation had revenues of $230,000 and expenses, including income taxes, of $190,000. On December 31, 2005, Edgemont had assets of $350,000, liabilities of $80,000, and capital stock of $210,000. Edgemont paid a cash dividend of $25,000 in 2006. No additional stock was issued.
What are some examples that lead to economic profit or loss, but not necessarily a recognizable event for accounting purposes?
Assume that the following data describe the condition of the banking system: Total Reserves: $200 billion Transactions Deposits: $800 billion Cash held by the public: $100 billion Reserve Requirement: 0.20 a) How large is the money supply (M1)? b) How large are the required reserves? c) How large are excess re
A firm has the following income statement. What is its net operating profit after taxes (NOPAT)? Sales $1,000 Costs 600 Depreciation 250 EBIT $ 150 Interest expense 50 EBT $ 100 Taxes (40%) 40 Net income $ 60
I need to identify and describe at least three of the largest variable expenses for Microsoft and Novell, Inc's most recent fiscal years. Explain the financial impact each of those expenses has had on the companies' margins and profitability.
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. P=d/k-g P= Price of the stock today D1= Dividend at end of the first year D x (1 x g) D0= Dividend today K= Required rate o
Owner's equity accounts for a company are below: common stock ($1 par value) $ 10,000 Capital Surplus 180,000 Retained earnings 586,000 Total owners equity $776,500 a. If the company's stock sells for $25 per share and a 10 % stock dividend
A bank sells a customer $500 of American Express traveler's checks for which the bank collects from the customer $505. (The bank charges 1% fee for this service.) How does the bank record this transaction? How does this transaction affect American Express' balance sheet?
Why should favorable variances be analyzed? What should a business organizations process for investigating variances communicate to the employees?
1. Access the Financial Accounting Standards Board website www.fasb.org, review this site and indicate how this site can be used by an independent auditor in conducting an audit of a company's financial statements. (Approximately 300 words)
What is the history of the management team of Coca Cola? Have there been acquisitions or divestitures for Coca Cola? What is its financial history of Coca Cola?
Hall Inc. has computed federal taxable income before deduction for state taxes of $3 million. It incurred state income tax in six states of $750,000 and paid $60,000 in state franchise taxes. a. Calculate Hall's federal taxable income and tax liability. b. Calculate Hall's total federal and state tax burden as a percenta
Huron Corp. operates in an industry that has a high rate of bad debts. On Dec.31, before any year end adjustments, the balance in Huron's Accounts Receivable acct. was $75,000 and the Allowance for Doubtful Acct. had a balance of $37,500. The year-end balance reported in the statement of financial position for the Allowance for
The percentages of product costs comprised by direct materials, direct labor, and manufacturing overhead for three companies are as follows Company A Direct Materials 7% Direct labor 13 Manufacturing overhead 80 Company B Direct Materials 21% Direct labor
The media and others suggest that the current account deficit run by the U.S. is a problem for the economy. What do you think? What action(s) would you advise federal government officials to take on this issue?
A firm has 1.5 million shares outstanding. EBIT is $5 million and interest paid is $2 million. If the corporate tax rate is 35%, what is earnings per share? a. $0.50 b. $0.95 c. $1.30 d. $1.70 e. $2.50.
ACME Co. will pay a dividend of $5 per share in 1 year. Its stock sells at $50 a share, and firms in the same industry provide an expected rate of return of 14 percent. What is the expected growth rate of the company's dividends?
Imagine you are the financial manager of a corporation responsible for approving next year's annual operating budget. The Marketing, R&D (Research and Development) and G&A (General & Administrative) departments all submitted expense budgets with annual growth of less than 10%. However, the VP of Sales submitted an expense budget
How can managers more effectively use budgets to manage their day-to-day operations? What information do managers need to prepare a useful budget?
A financial analyst is examining the relationship between stock prices and earnings per share. She chooses sixteen publicly traded companies at random and records for each the company's current stock price and the company's earnings per share reported for the past 12 months. Her data are given below, with x denoting the earnings
1. According to the constant growth dividend discount model, an increase in the required rate of return of stock will (everything else equal): a. Increase the value of the stock. b. Decrease the value of the stock. c. Not have any effect on the value of the stock. d. May either increase or decrease the value of the st
Marion Manufacturing has the following labor costs: Factory?Gross wages $141,000 Factory?Net wages 118,000 Employer Payroll Taxes Payable 23,000 How much should Marion debit to Factory Labor to record these amounts? At May 31, 2006, Beyonce Inc. has $4,500 in beginning raw materials, $6,000 of direct labor. If manufacturi
Filigree Inc., a foreign corporation, is a wholly owned subsidiary of Gold Corporation, a U.S. corporation. Filigree's 2003 taxable income of $1 million included $300,000 of Subpart F income. Filigree paid $270,000 of foreign income tax and made no distributions to Gold during 2003. Gold's separate company 2003 taxable income wa
Suppose Sheila and Ed issue 200,000 shares of $1 par value preferred stock at $5 per share. What is the entry for this issuance? How is this transaction treated in the equity section of the balance sheet?
Net Gains and Losses. Need help with a and b. See attached file for full problem description.