• Q : Explain the effective interest method....
    Accounting Basics :

    On February 1, 2011, Wolf Inc. issued 10% bonds dated February 1, 2011, with a face amount of $200,000. The bonds sold for $239,588 and mature in 20 years. The effective interest rate for these bond

  • Q : Treating the entire investment as a purchase of stock....
    Accounting Basics :

    When Keith created a new corporation as the sole shareholder, he was advised by his accountant to treat 50 percent of the amount invested as a loan and 50 percent as a purchase of stock.

  • Q : What would be the range of acceptable transfer prices....
    Accounting Basics :

    The Laker Co. and Heat Co. are both subsidiary companies owned by the NBA Jam Co. The Laker Co. makes a product called the "Brick" with a variable cost per unit of $9 and total fixed expenses of $40

  • Q : What is b depreciation expense....
    Accounting Basics :

    B Company switched from the sum-of-the-years-digits depreciation method to straight-line depreciation in2011. The change affects machinery purchased at the beginning of 2009 at a cost of $72,000.

  • Q : What is the divisions turnover....
    Accounting Basics :

    What is the division's margin (before the new project)?What is the division's turnover (before the new project)?

  • Q : Explain the inventory loss....
    Accounting Basics :

    Southern California Inc., through no fault of its own, lost an entire plant due to an earthquake on May 1, 2011. In preparing their insurance claim on the inventory loss, they developed the followin

  • Q : What were net sales for the year....
    Accounting Basics :

    Robertson Corporation's inventory balance was $22,000 at the beginning of the year and $20,000 at the end. The inventory turnover ratio for the year was 6.0 and the gross profit ratio 40%. What wer

  • Q : What is the level of safety stock....
    Accounting Basics :

    Spring Corp. has two divisions, Daffodil and Tulip. Daffodil produces a gadget that Tulip could use in its production. Tulip currently purchases 100,000 gadgets for $12.50 on the open market.

  • Q : The options are exercised....
    Accounting Basics :

    Under its executive stock option plan, W Corporation granted options on January 1, 2011, that permit executives to purchase 15 million of the company's $1 par common shares within the next eight yea

  • Q : The schedule of funding progress....
    Accounting Basics :

    Two sets of ratios are shown in the schedule of funding progress prepared for Pension Truest Funds: (A) the funded ratio; and (B) the unfunded actuarial accrued liability as a percentage of covered

  • Q : How should the acquisition of the preferred stock be account....
    Accounting Basics :

    On January 1, 2011, Parent Corporation acquired a controlling interest in the voting common stock of Foxboro Co. At the same time, Parent purchased sixty percent of Foxboro's outstanding preferred s

  • Q : What is the projects internal rate of return....
    Accounting Basics :

    Jimmy Chitwood, Inc. is considering a project that is estimated to generate annual cash inflows of $35,000. The equipment required for the project would cost $266,210.

  • Q : Differences between straight line depreciation....
    Accounting Basics :

    The financial reporting carrying value of Boze Music's only depreciable asset exceeded its tax basis by $150,000 at December 31, 2011. This was a result of differences between straight line deprecia

  • Q : Trust fund prepared two financial statements....
    Accounting Basics :

    A Pension Trust Fund prepared two financial statements and two supplementary schedules. Where does the obligation (calculated by the actuary) for the total benefits earned by employees and retirees

  • Q : What is the net present value of this investment....
    Accounting Basics :

    The working capital will be released at the end of the 10 years. The new shampoo is expected to generate net cash inflows of$80,000 per year for each of the 10 years.

  • Q : Determine the direct materials price variance....
    Accounting Basics :

    Determine the direct materials price variance, direct materials quantity variance, and total materials cost of variance for March. Use the minus sign to enter favorable variances as negative numbers

  • Q : Calculate the maximum amount the company....
    Accounting Basics :

    What is the maximum amount the company should be willing to pay an outside supplier per unit for the part if the supplier commits to supplying all 40,000 units required each year?

  • Q : Shows the budgeted costs....
    Accounting Basics :

    In October, Harry Company reports 21,400 actual direct labor hours, and it incurs $117,700 of manufacturing overhead costs. Standard hours allowed for the work done is 20,400 hours.

  • Q : Prepare a revised computation of earnings per share....
    Accounting Basics :

    On the basis of the information above, do you agree with the controller's computation of earnings per share for the year? If you disagree, prepare a revised computation of earnings per share

  • Q : Establish inventory values....
    Accounting Basics :

    A management purpose for allocating joint costs of a processing center to the various products produced is to.report correct standard product costs for comparative analysis

  • Q : Calculate the npv of accepting the special sale....
    Accounting Basics :

    NoFat manufactures one product, olestra, and sells it to large potato chip manufacturers as the key ingredient in nonfat snack foods, including Ruffles.

  • Q : What effect will the payments have on accounting equation....
    Accounting Basics :

    B Row Inc need some long term financing and arranged for a 10 year, $100000, 7% mortgage loan on January 1, 2010. Annual payments of $14238 will be made on December 31 each year. What effect will th

  • Q : Explain the total amount of the cash dividend....
    Accounting Basics :

    A company's board of directors votes to declare a cash dividend of $0.50 per share. The company has 15,000 shares authorized, 10,000 issued, and had 2,000 treasury stock shares.

  • Q : What is the earnings per share....
    Accounting Basics :

    Shamrock Company had net income of $30,000. On January 1, the number of shares of common stock outstanding was 8,000. What is the earnings per share?

  • Q : What is approximate internal rate of return....
    Accounting Basics :

    Orkin Company is considering two different, mutually exclusive capital expenditure proposals. Project A will cost $489,272, has an expected useful life of 13 years, a salvage value of zero.

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