Concord Company, a machinery dealer, leased manufacturing equipment to Mays Corporation on January 1, 2017. The lease is for a 7-year period and requires equal annual payments of $26,143 at the beginning of each year. The first payment is received on January 1, 2017.
Concord had purchased the machine during 2016 for $75,000. Collectibility of lease payments is reasonably predictable, and no important uncertainties surround the amount of costs yet to be incurred by Concord. Concord set the annual rental to ensure an 8% rate of return.
The machine has an economic life of 8 years with no residual value and reverts to Concord at the termination of the lease.
Required:
1. Compute the amount of the lease receivable. (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answer to 0 decimal places e.g. 58,971.)
2. Prepare all necessary journal entries for Headland for 2017. (Round answers to decimal places e.g. 5,125.)

Answer and Explanation:

1. The computation of lease receivable is shown below:-

Amount of Lease Receivable = Present value amount i.e calculated by using the present value formula shown in the spreadsheet

Given that

Rate = 8%

NPER = 7 years

PMT = $26,143

FV = $0

The formula is

= -PV(RATE;NPER;PMT;FV;TYPE)

After applying this above formula, the present value is $146,998.94

2. Now The Journal entry is shown below:-

a. Lease Receivable A/c Dr,  $146,998.94

   Cost of Goods Sold  Dr, $75,000

                To Inventory A/c  $75,000

                To Sales  $146,998.94

(Being lease receivable is recorded)

Here we debited the lease receivables and cost of goods sold as it increased the assets and expenses  and we credited the inventory and sales as  it reduced the assets and increased the revenues

b. Cash A/c Dr, $26,143

                To Lease receivable A/c $26,143

(Being the first payment of lease is recorded)

For recording this we debited the cash as it increased the sales and credited the lease receivables as it decreased the assets

c. Interest Receivable A/c Dr, $9,668.432   {($146,998.4 - $26,143) × 8%}

              To Interest Income A/c $9,668.432

(Being accrued interest is recorded)

For recording this we debited the cash as it increased the sales and credited the interest income and it increased the revenue

Assumptions: These two graphs show two sectors of the labor market for a particular kind of labor. Relevant product markets are competitive. The two labor demand curves are identical. Initially the quantities of labor employed in the two sectors are L1 and L'1, and the wage rate in each sector is Wn. If a union is formed in sector 1 and the union increases the wage rate from Wn to Wu, then employment will Multiple Choice decrease, but we cannot determine by how much. decrease by 0L2 in sector 1. decrease by L1L2 in sector 1. increase by L1L2 in sector 1.

Your company is considering expanding its retail outlet. Currently, inventory levels are $5,000. With the expansion, it is expected that inventory levels will need to be $9,500. It is expected that accounts receivable will increase by $4,000 and account payable will decrease by $10,000. The expansion of the building will cost $120,000. What change in net working capital is this expansion causing

In its first year of operations, Gomes Company recognized $28,000 in service revenue, $6,000 of which was on account and still outstanding at year-end. The remaining $22,000 was received in cash from customers. The company incurred operating expenses of $15, 800. Of these expenses, $12,000 were paid in cash; $3, 800 was still owed on account at year-end. In addition, Gomes prepaid $2, 400 for insurance coverage that would not be used until the second year of operations.
(a) Calculate the first year's net earnings under the cash basis of accounting, and calculate the first year's net earnings under the basis of accounting.
(b) Which basis of accounting (cash or accrual) provides more useful information for decision-makers?

) A company sells a software suite that includes a word processor and spreadsheet applications. The suite sells for $250 and the items are also available separately for $200 (spreadsheet) and $170 (word processor). The spreadsheet app is by far the best seller of the standalone product sales. Using the incremental-revenue allocation method and assuming that the spreadsheet is the primary product, how much of the $250 revenue from the bundled product sale would be allocated to the spreadsheet and to the word processing products?

Domingo Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 500 units. The costs and percentage completion of these units in beginning inventory were: Cost Percent Complete Materials costs $ 5,600 50% Conversion costs $ 1,800 20% A total of 6,900 units were started and 6,200 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month: Cost Materials costs $ 158,800 Conversion costs $ 120,500 The ending inventory was 85% complete with respect to materials and 75% complete with respect to conversion costs. What are the equivalent units for conversion costs for the month in the first processing department

The PMI "Code of Ethics and Professional Conduct" provides guidelines for ethical behavior by project management practitioners. It describes four main values that should guide a project managerâs actions. List these four values and give one example per value of why it should guide a project managerâs actions.

On February 1, 2014, Nelson Corporation purchased a parcel of land as a factory site for $280,000. An old building on the property was demolished, and construction began on a new building which was completed on November 1, 2014. Costs incurred during this period are listed below: Demolition of old building $ 20,000 Architect's fees 35,000 Legal fees for title investigation and purchase contract 5,000 Construction costs 1,340,000 (Salvaged materials resulting from demolition were sold for $10,000.)
Nelson should record the cost of the land and new building, respectively, as

In their Portland, Oregon facility, Wavy Wood Works makes several types of wood bowls from coastal drift wood. To make a bowl, the first step is to clean the drift wood. Each piece of drift wood makes a single bowl. There is one cleaning machine. It takes 40 seconds to load each piece of wood and the machine can hold up to 35 pieces. Once all of the pieces are loaded into the machine, it takes 45 minutes to clean the set (no matter the number of pieces in the set). Once the wood is cleaned, 15 skilled artisans carve the bowls, each one takes on average 100 minutes to produce each bowl. After carving, bowls are finished with a stain. It takes 30 seconds to load each bowl into the stain machine. The staining machine holds up to 35 bowls. Once all of the bowls are loaded, they are soaked for 80 minutes. After staining, bowls are unloaded onto drying racks. There is plenty of space on the drying racks.

What is the maximum capacity (bowls per hour) of this process?

Whispering Winds Corp. took a physical inventory on December 31 and determined that goods costing $213,000 were on hand. Not included in the physical count were $35,000 of goods purchased from Coronado Industries, FOB, shipping point, and $26,500 of goods sold to Sunland Company for $31,000, FOB destination. Both the Coronado purchase and the Sunland sale were in transit at year-end.
Required:
1. What amount should Whispering Winds report as its December 31 inventory?

A factory machine was purchased for $393000 on January 1, 2018. It was estimated that it would have a $74000 salvage value at the end of its 5-year useful life. It was also estimated that the machine would be run 30000 hours in the 5 years. The company ran the machine for 3900 actual hours in 2018.
Required:
1. If the company uses the units-of-activity method of depreciation, the amount of depreciation expense for 2018 would be ________.
A) $51090.
B) $41470.
C) $82940.
D) $74000.

J&E Enterprisesi s considering and investment which produces no cash flows for the first year. In the second year, the cash inflow is $47,000. This inflow will increase to $198,000 and then $226,000 for the following two years, respectively, before ceasing permanently. The initial investment will cost $318,000. The firm requires a 15.5 percent rate of return and has a required discounted payback period of three years. Should the project be accepted. Why or why not?



Year Cash flow Discounted cash flo Cumulative cash flo

1 $0 $0.00 $0.00
2 $47,000 $35,321.72 $35,231.72
3 $198,000 $128,504.77 $163,736.49
4 $226,000 $126,993.21 $290,729.70

Cool Cars Location (Scenario) An automobile producer from Southern Italy, Cool Cars, has developed plans to expand internationally through greenfield FDI in an international market. Cool Cars has enjoyed success marketing stylish but economical autos in Portugal, Spain and Italy. Management is confident they can duplicate this success in other auto markets. At present they are deciding between Russia and Canada as locations for their investment. From the following list which one would favor building in Russia? Select one: a. The Russian government is more transparent and has a lower level of corruption than Canada b. Cool Cars would be able to take advantage of NAFTA c. Intellectual property lawsuits are common in Russia. d. Land and construction costs are comparatively less expensive in Russia than in Canada

rates at business hotels are typically much lower on weekends than during the week
True or false?

Required earnings are the:_______
a. adjusted net income multiplied by the required rate of return on common equity capital.
b. net income the analyst expects the firm to generate multiplied by the required rate of return on common equity capital.
c. the market value of common equity capital at the beginning of the period multiplied by the required rate of return on common equity capital.
d. the book value of common equity capital at the beginning of the period multiplied by the required rate of return on common equity capital.

A and B Companies have been operating separately for five years. Each company has a minimal amount of liabilities and a simple capital structure consisting solely of voting common stock. In exchange for 40 percent of its voting stock, A Company acquires 80 percent of the common stock of B Company. This is a "tax-free" stock-for-stock exchange for tax purposes. B Company’s identifiable assets have a total net fair market value of $800,000 and a total net book value of $580,000. The fair market value of the A stock used in the exchange is $700,000, and the fair value of the noncontrolling interest is $175,000.
Required:
1. The goodwill reported following the acquisition would be _____________.

The revenues and expenses of Paradise Travel Service for the year ended May 31, 2018, follow: Accounts Fees earned $1,430,000 Office expense 305,000 Miscellaneous expense 37,000 Wages expense 897,000 Everett McCauley invested an additional $60,000 in the business in exchange for common stock, and $27,000 of dividends were paid during the year. Retained earnings as of June 1, 2017, was $557,000. Prepare a retained earnings statement for the year ended May 31, 2018. Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. Be sure to complete the statement heading. "Less" or "Add" is not required. A decrease to retained earnings should be entered as a negative amount. Labels For the Year Ended May 31, 2018 May 31, 2018 Amount Descriptions Change in retained earnings Dividends Net income Net loss Retained earnings, June 1, 2017 Retained earnings, May 31, 2018 Paradise Travel Service Retained Earnings Statement 1 2 3 4 5

The R&D division of Piqua Chemical Corp. has just developed a chemical for sterilizing the vicious Brazilian "killer bees" which are invading Mexico and the southern United States. The president of the company is anxious to get the chemical on the market to boost the company’s profits. He believes his job is in jeopardy because of decreasing sales and profits. The company has an opportunity to sell this chemical in Central American countries, where the laws are much more relaxed than in the United States. The director of Piqua’s R&D division strongly recommends further testing in the laboratory for side-effects of this chemical on other insects, birds, animals, plants, and even humans. He cautions the president, "We could be sued from all sides if the chemical has tragic side-effects that we didn’t even test for in the labs." The president answers, "We can’t wait an additional year for your lab tests. We can avoid losses from such lawsuits by establishing a separate wholly-owned corporation to shield Piqua Corp. from such lawsuits. We can’t lose any more than our investment in the new corporation, and we’ll invest in just the patent covering this chemical. We’ll reap the benefits if the chemical works and is safe, and avoid the losses from lawsuits if it’s a disaster." The following week, Piqua creates a new wholly-owned corporation called Finlay Inc., sells the chemical patent to it for $10, and watches the spraying begin.Instructions: 1. Who are the stakeholders in this situation? 2. Are the president's motives and actions ethical? 3. Can Piqua shield itself against losses of Finlay Inc.?

Think about the different types of financial statements you learned about the income statement, statement of retained earnings, balance sheets, and statements of cash flow. If you were an investor, would you place more emphasis on any one particular financial statement? Why, or why not?

Bearcat Construction begins operations in March and has the following transactions.
March 1 Issue common stock for $21,000.
March 5 Obtain $9,000 loan from the bank by signing a note.
March 10 Purchase construction equipment for $25,000 cash.
March 15 Purchase advertising for the current month for $1,100 cash.
March 22 Provide construction services for $18,000 on account.
March 27 Receive $13,000 cash on account from March 22 services.
March 28 Pay salaries for the current month of $6,000.
Required:
1. Record each transaction. Bearcat uses the following accounts: Cash, Accounts Receivable, Equipment, Notes Payable, Common Stock, Service Revenue, Advertising Expense, and Salaries Expense. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

USA Airlines uses the following performance measures. Classify each of the performance measures below into the most likely balanced Scorecard perspective it relates to. Select your answers using C(customer), P (internal process), / (innovation and growth), or F(financial). 1. Percentage of late flights 2. Cost of leasing airport gates 3. Employee satisfaction survey ratings 4. Percentage of waste recycled 5. Number of reports of mishandled or lost baggage 6. Operating cash flow 7. Employee diversity training sessions completed 8. Accidents or safety incidents per mile flown 9. Percentage of on-time departures 10. Average ticket price 11. Percentage of ground crew trained 12. Time airplane is on ground between flights 13. On-time flight percentage 14. Net income

Which of the following statements is false about assessing interests in negotiations? Select one: a. If you don’t ask what the other’s interests are, you are likely to be off base. b. Parties in conflict often assume they know the interests of the other. c. Taking a firm position suggests several interests typically underlie it. d. Parties always have multiple interests. e. Relational and identity issues are rarely important in negotiations.

The following transactions occurred during March 2013 for the Wainwright Corporation. The company owns and operates a wholesale warehouse.




1. Issued 30,000 shares of common stock in exchange for $300,000 in cash.
2.
Purchased equipment at a cost of $40,000. $10,000 cash was paid and a note payable was signed for the balance owed.

3. Purchased inventory on account at a cost of $90,000. The company uses the perpetual inventory system.
4. Credit sales for the month totaled $120,000. The cost of the goods sold was $70,000.
5. Paid $5,000 in rent on the warehouse building for the month of March.
6.
Paid $6,000 to an insurance company for fire and liability insurance for a one-year period beginning April 1, 2013.

7. Paid $70,000 on account for the merchandise purchased in 3.
8. Collected $55,000 from customers on account.
9. Recorded depreciation expense of $1,000 for the month on the equipment.



Required:
Analyze each transaction and show the effect of each on the accounting equation for a corporation. (Amounts to be deducted should be indicated by a minus sign. Enter the net change on the accounting equation.)

ASSETS = Liabilities + Paid-in Capital + Retained Earnings

1

2

3

4

5

6

7

8

9

Match the given terms to the appropriate statement relating to the various functions of money. Each term is used only once. 1. Money provides a way of measuring a good for value in standardized terms. 2. Money permits us to make purchases today and enables us to pay off the purchases at some future point in time. 3. Money keeps its overall purchasing power. 4. Money is used to complete the transaction between the buyer and seller.a) Unit of Account b) Medium of Exchange c) Store of Value d) Standard of Deferred Payment

A U.S. company's foreign subsidiary had the following amounts in stickles (§) in 2013: COGS § 12,000,000 Ending Inventory 600,000 Beg. inventory 240,000 The average exchange rate during 2013 was §1 = $.96. The beginning inventory was acquired when the exchange rate was §1 = $1.20. The ending inventory was acquired when the exchange rate was §1 = $.90. The exchange rate at December 31, 2013 was §1 = $.84. Assuming that the foreign country had a highly inflationary economy, at what amount should the foreign subsidiary's cost of goods sold have been reflected in the 2013 U.S. dollar income statement? A. $11,253,600. B. $11,577,600. C. $11,649,600. D. $11,613,600. E. $11,523,600. D. $11,613,600. A U.S. company's foreign subsidiary had the following amounts in stickles (§), the functional currency, in 2013: COGS § 12,000,000 Ending Inventory 600,000 Beg. inventory 240,000 The average exchange rate during 2013 was §1 = $.96. The beginning inventory was acquired when the exchange rate was §1 = $1.20. The ending inventory was acquired when the exchange rate was §1 = $.90. The exchange rate at December 31, 2013 was §1 = $.84. At what amount should the foreign subsidiary's cost of goods sold have been reflected in the 2013 U.S. dollar income statement? A. $11,253,600. B. $11,577,600. C. $11,520,000. D. $11,613,600. E. $11,523,600.

Teresa owns and operates a store in a country experiencing a high rate of inflation. In order to prevent the value of money in her cash register from falling too quickly, Teresa sends an employee to the bank four times per day to make deposits in an interest-bearing account that protects the store's revenues from the effects of inflation. This is an example of the _______________

Petro Corporation has provided the following information concerning a capital budgeting project:
After-tax discount rate 11 %
Tax rate 30 %
Expected life of the project 4
Investment required in equipment $80,000
Salvage value of equipment $0
Working capital requirement $20,000
Annual sales $180,000
Annual cash operating expenses $40,000
The working capital would be required immediately and would be released for use elsewhere at the end of the project. The company uses straight-line depreciation on all equipment. Assume cash flows occur at the end of the year except for the initial investments. The company takes income taxes into account in its capital budgeting.
Required:
Determine the net present value of the project.

On July 31, 2020, Cullumber Company engaged Minsk Tooling Company to construct a special-purpose piece of factory machinery. Construction begun immediately and was completed on November 1, 2020. To help finance construction, on July 31 Cullumber issued a $324,000, 3-year, 12% note payable at Netherlands National Bank, on which interest is payable each July 31. $216,000 of the proceeds of the note was paid to Minsk on July 31. The remainder of the proceeds was temporarily invested in short-term marketable securities (trading securities) at 10% until November 1. On November 1, Cullumber made a final $108,000 payment to Minsk. Other than the note to Netherlands, Cullumber’s only outstanding liability at December 31, 2020, is a $29,500, 8%, 6-year note payable, dated January 1, 2017, on which interest is payable each December 31.Calculate the interest revenue, weighted-average accumulated expenditures, avoidable interest, and total interest cost to be capitalized during 2020.

a. "The choice of strategy for a multinational firm must depend on a comparison of the benefits of that strategy (in terms of value creation) with the costs of implementing it (as defined by organizational architecture necessary for implementation). On this basis, it may be logical for some firms to pursue a localization strategy, others a global or international strategy, and still others a transnational strategy." Is this statement correct? Why or why not?

On May 1, A makes a written offer to B for the sale of A's car. On May 2, A mails B a letter revoking the offer. On May 3, A telephones B to tell him that he is revoking the offer. On May 4, B learns that A has sold the car to C. On May 5, A's letter finally gets to B. On what day did A's offer terminate? Why?

Because of her excessive tardiness and absenteeism during the year, the company discharged Ruth V. Williams on November 13. Ruth has requested Form W-2 be given to her. Form W-2 will include her final pay. For the week ending November 7, she was late a total of six hours; and for this week, she missed two full days and was late two hours on another day. In lieu of two weeks' notice, Williams was given two full weeks' pay ($1,223.08). Along with her dismissal pay ($1,223.08), she was paid for the week ending November 7 (34 hours, or $519.86) and the days worked this current week (22 hours, or $336.38). The total pay for the two partial weeks is $856.24.Pay Points:Prepare a Wage and Tax Statement, Form W-2, to be given to Williams.1) Record a separate payroll register (on one line) to show Williamsâs total earnings, deductions, and net pay. The two weeksâ dismissal pay is subject to all payroll taxes. Include dismissal pay with the total earnings but do not show the hours in the Time Record columns. Use the tax table for the biweekly payroll period for the total gross pay ($2,079.32) of Williams.The deduction for group insurance premiums is $14.40. In the Time Record column, make a note of Williamsâs discharge as of this date. Indicate the payroll check number used to prepare the final check for Williams. When posting to the earnings record, make a notation of Williamsâs discharge on this date.2) Prepare the journal entries to transfer the net cash and to record Williamsâs final pay and the employerâs payroll taxes. Post to the ledger accounts.3) Use the blank Form W-2. Box "a" should be left blank, since Glo-Brite Paint Company does not use a control number to identify individual Forms W-2.