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Eddie Zambrano Corporation began operations on January 1, 2011. During its first 3 years of operations, Zambrano reported net income and declared dividends as follows. Net Income Dividends Declared 2011 $ 40,000 $ –0– 2012 125,000 50,000 2013 160,000 50,000 The following information relates to 2014. Income before income tax $240,000 Prior period adjustment: understatement of 2012 depreciation expense (before taxes) $ 25,000 Cumulative decrease in income from change in inventory methods (before taxes) $ 35,000 Dividends declared (of this amount, $25,000 will be paid on Jan. 15, 2015) $100,000 Effective tax rate 40% Instructions (a) Prepare a 2014 retained earnings statement for Eddie Zambrano Corporation. (b) Assume Eddie Zambrano Corp. restricted retained earnings in the amount of $70,000 on December 31, 2014. After this action, what would Zambrano report as total retained earnings in its December 31, 2014, balance sheet?
Explain the moral hazard problem as it relates to deposit insurance. (LO2)
1. : What are the characteristics of an open communication climate? Describe the organizational benefits of managers cultivating an open communication climate.
How does mechanical assembly differ from the other methods of assembly discussed in previous chapters (e.g., welding, brazing, etc.)?
1. Why do you think Nicola and Steve are on the defensive? Might the emphasis on core leadership behaviors be handled in a different way? What do you suggest?
What should determine the choice of cost allocation method (direct, step-down and reciprocal) discussed in this chapter?
If a bond’s coupon rate is greater than the investor’s required rate of return on the bond, would the bond’s price be greater than or less than its par value? Explain. (LO1)
Explain why the expenses incurred to get an asset in place and operable should be included in the asset’s basis.
What is meant by par value, and what is its significance to stockholders
Larry Byrd, Inc., spent $68,000 in attorney fees while developing the trade name of its new product, the Mean Bean Machine. Prepare the journal entries to record the $68,000 expenditure and the first year’s amortization, using an 8-year life.
1. : Over the past 20 years, entrepreneurship has been the fastest-growing course of study on campuses throughout the United States. Do you think it is possible to teach someone to be an entrepreneur? Why or why not?
A flux-cored arc-welding process is used to join two low alloy steel plates at a 90° angle using an outside fillet weld. The steel plates are ½ in thick. The weld bead consists of 55% metal from the electrode and the remaining 45% from the steel plates. The melting factor of the steel is 0.65 and the heat transfer factor is 0.90. The welding current is 75 amps and the voltage is 16 volts. The velocity of the welding head is 40 in/min. The diameter of the electrode is 0.10 in. There is a core of flux running through the center of the electrode that has a diameter of 0.05 in and contains flux (compounds that do not become part of the weld bead). (a) What is the cross-sectional area of the weld bead? (b) How fast must the electrode be fed into the workpiece?
} Marc and Michelle are married and earned salaries this year of $64,000 and $12,000, respectively. In addition to their salaries, they received interest of $350 from municipal bonds and $500 from corporate bonds.Marc and Michelle also paid $2,500 of qualifying moving expenses, and Marc paid alimony to a prior spouse in the amount of $1,500.Marc and Michelle have a 10-year-old son, Matthew, who lived with them throughout the entire year.Thus, Marc and Michelle are allowed to claim a $1,000 child tax credit for Matthew.Marc and Michelle paid $6,000 of expenditures that qualify as itemized deductions and they had a total of $5,500 in federal income taxes withheld from their paychecks during the course of the year. a. What is Marc and Michelle’s gross income?
Charles Austin of the controller’s office of Thompson Corporation was given the assignment of determining the basic and diluted earnings per share values for the year ending December 31, 2015. Austin has compiled the information listed below. 1. The company is authorized to issue 8,000,000 shares of $10 par value common stock. As of December 31, 2014, 2,000,000 shares had been issued and were outstanding. 2. The per share market prices of the common stock on selected dates were as follows. Price per Share July 1, 2014 $20.00 January 1, 2015 21.00 April 1, 2015 25.00 July 1, 2015 11.00 August 1, 2015 10.50 November 1, 2015 9.00 December 31, 2015 10.00 3. A total of 700,000 shares of an authorized 1,200,000 shares of convertible preferred stock had beenissued on July 1, 2014. The stock was issued at its par value of $25, and it has a cumulative dividendof $3 per share. The stock is convertible into common stock at the rate of one share of convertible preferred for one share of common. The rate of conversion is to be automatically adjusted for stock splits and stock dividends. Dividends are paid quarterly on September 30, December 31, March 31, and June 30. 4. Thompson Corporation is subject to a 40% income tax rate. 5. The after-tax net income for the year ended December 31, 2015, was $11,550,000. The following specific activities took place during 2015. 1. January 1—A 5% common stock dividend was issued. The dividend had been declared on December 1, 2014, to all stockholders of record on December 29, 2014. 2. April 1—A total of 400,000 shares of the $3 convertible preferred stock was converted into common stock. The company issued new common stock and retired the preferred stock. This was the only conversion of the preferred stock during 2015. 3. July 1—A 2-for-1 split of the common stock became effective on this date. The board of directors had authorized the split on June 1. 4. August 1—A total of 300,000 shares of common stock were issued to acquire a factory building. 5. November 1—A total of 24,000 shares of common stock were purchased on the open market at $9 per share. These shares were to be held as treasury stock and were still in the treasury as of December 31, 2015. 6. Common stock cash dividends—Cash dividends to common stockholders were declared and paid as follows. April 15—$0.30 per share October 15—$0.20 per share 7. Preferred stock cash dividends—Cash dividends to preferred stockholders were declared and paid as scheduled. Instructions (a) Determine the number of shares used to compute basic earnings per share for the year ended December 31, 2015. (b) Determine the number of shares used to compute diluted earnings per share for the year ended December 31, 2015. (c) Compute the adjusted net income to be used as the numerator in the basic earnings per share calculation for the year ended December 31, 2015.
Balanced scorecard measures for customer perspective Leyland College is in the process of developing a balanced scorecard. The administrators decided that their customers are parents and future employers of their students. They believe the students are their products. Required Discuss whether each of the following potential measures would be useful for the customer perspective in the balanced scorecard. (a) Parent ratings of satisfaction with the high school curriculum (b) Graduation rate (c) Percentage of students employed during the summer after graduation (d) Employer satisfaction ratings for Flowing Wells High School graduates (e) Monthly earnings of graduates (f) Number of graduates attending classes beyond high school (g) Cost per student per year (h) Number of classes per student per semester (i) Average number of college credit hours completed per teacher
Identify some of the general principles and guidelines for design for assembly.
1. : If you were the leader of a special-purpose team developing a new computer game and conflicts arose related to power and status differences among team members, what would you do? Of the conflict-handling styles described in this chapter, which do you think might be most effective? Explain your answer.
Recording transactions in the accounting system requires knowledge of the important characteristics of the elements of financial statements, such as assets and liabilities. In addition, accountants must understand the inherent uncertainty in accounting measures and distinctions between related accounting concepts that are important in evaluating the effects of transactions on the financial statements. Instructions Access the IASB Framework at the IASB website (http://eifrs.iasb.org/). (Click on the IFRS tab and then register for free eIFRS access if necessary.) When you have accessed the documents, you can use the search tool in your Internet browser to respond to the following items. (Provide paragraph citations.) (a) Provide the definition of an asset and discuss how the economic benefits embodied in an asset might flow to a company. (b) Provide the definition of a liability and discuss how a company might satisfy a liability. (c) What is “accrual basis”? How do adjusting entries illustrate application of the accrual basis?
The financial statements of Marks and Spencer plc (M&S) are available at the book’s companion website or can be accessed at http://annualreport.marksandspencer.com/_assets/downloads/Marksand- Spencer-Annual-report-and-financial-statements-2012.pdf. Instructions Refer to M&S’s financial statements and the accompanying notes to answer the following questions. (a) What were M&S’s total assets at 31 March 2012? At 2 April 2011? (b) How much cash (and cash equivalents) did M&S have on 31 March 2012? (c) What were M&S’s selling and marketing expenses in 2012? In 2011? (d) What were M&S’s revenues in 2012? In 2011? (e) Using M&S’s financial statements and related notes, identify items that may result in adjusting entries for prepayments and accruals. (f) What were the amounts of M&S’s depreciation and amortization expense in 2011 and 2012?
Are there other points in the supply chain/production process where firms could make use of a better understanding of behavioural economics?
Midwest Enterprises made the following entry on December 31, 2014. Interest Expense 10,000 Interest Payable 10,000 (To record interest expense due on loan from Anaheim National Bank) What entry would Anaheim National Bank make regarding its outstanding loan to Midwest Enterprises? Explain why this must be the case.
Distinguish between product costs and period costs as they relate to inventory
Winkin, Blinkin, and Nod are equal shareholders in SleepEZ, an S corporation. In the conditions listed below, how much income should each report from SleepEZ for 2025 under both the daily allocation and the specific identification allocation methods? Refer to the following table for the timing of SleepEZ’s income. Period Income January 1 through March 15 (74 days) $125,000 March 16 through December 31 (291 days) 345,500 January 1 through December 31, 2025 (365 days) $470,500
Ramirez Company has a held-for-collection investment in the 6%, 20-year bonds of Soto Company. The investment was originally purchased for $1,200,000 in 2013. Early in 2014, Ramirez recorded an impairment of $300,000 on the Soto investment, due to Soto’s financial distress. In 2015, Soto returned toprofitability and the Soto investment was no longer impaired. What entry does Ramirez make in 2015 under (a) GAAP and (b) IFRS?
1. : A survey found that 69 percent of MBA students view maximizing shareholder value as the primary responsibility of a company. The Business Roundtable’s new Statement on the Purpose of a Corporation said that five major stakeholders should receive equal attention. With which view do you agree? Why?
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