CHAPTER 3 EXAM STUDY OBJECTIVE . The annual report contains four basic financial statements: the income statement‚ the balance sheet‚ the cash flow statement‚ and statement of stockholders’ equity. a. True b. False . The primary reason the annual report is important in finance is that it is used by investors when they form expectations about the firm’s future earnings and dividends‚ and the riskiness of those cash flows. a. True b. False . Companies typically
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CHAPTER 24 PROBLEMS AND CASE PROBLEM 24-1 Annual Budget $18‚000 Gasoline Oil‚ minor 5‚626 repairs .. Outside repairs 4‚500 Insurance 28‚000 Salaries & 90‚000 benefits Depreciation 66‚000 202‚125 Total miles 375‚000 Cost per mile $0.539 No. of Cars 15 One-Month Budget 1‚500 April Varianc Actual e 1‚720 220 469 550 81 375 1‚500 495 1‚600 120 100 7‚500 7‚500 5‚500 16‚844 31‚250 $0.539 15 5‚867 17‚732 35‚000 $0.507 16 367 888 Required: Employing flexible budgeting techniques‚
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4000*(1.04^n) annually 3. Depreciation Expense From year 2003 to year 2006‚ the annual depreciation = book value of new vessel /25 = 39‚000‚000/25 = 1‚560‚000 From year 2007 to year 2011‚ the annual depreciation = new vessel depreciation + survey depreciation = 1‚560‚000 +300‚000/5= 1‚620‚000 From year 2012 to year 2016‚ the annual depreciation = new vessel depreciation + survey depreciation = 1‚560‚000+350‚000/5= 1‚630‚000 In year 2017‚ the annual depreciation = 1‚560‚000 4. Unlevered
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$34‚630‚ costs of $10‚340‚ depreciation expense of $2‚520‚ and interest expense of $1‚750. If the tax rate is 35 percent‚ what is the operating cash flow‚ or OCF? Operating cash flow $ 17283 Calculations: Sales - Cost - Depreciation = EBIT(Earnings Before Interest Taxes –Depreciation Amortization) 34630 - 10340 - 2520 = 21770 EBIT - Interest = Taxable Income 21770 - 1750 = 20020 Taxes (35%) = 20020 x .35 = 7007 Net income: 20020 - 7007 = 13013 EBIT + depreciation - less taxes = OCF 21770 +
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borrowed to finance construction: capitalized f) Local real estate taxes: capitalized g) Cost of mistakes: expensed h) Overhead costs capitalized i) Insurance & non-covered by insurance costs: expensed 2. a) Firstly‚ we need to match its depreciation to revenue still being earned from the theater‚ small stores‚ and apartment buildings‚ until the building gets razed. This demonstrates that Archer Company’s intentions when purchasing the land and buildings‚ was to raze the old building and construct
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Dividends – Safeco 600‚000 Investment in Safeco 650‚000 (E) Stockholders’ equity—Safeco‚ 1/1 7‚000‚000 Investment in Safeco 7‚000‚000 (R) Equipment‚ net 500‚000 Inventory 200‚000 Goodwill 300‚000 Investment in Safeco 1‚000‚000 (O) Depreciation expense 100‚000 Cost of goods sold 200‚000 Goodwill impairment loss 50‚000 Equipment‚ net 100‚000 Inventory 200‚000 Goodwill 50‚000 b. Calculation of equity in net income for 2015: Safeco’s reported net income $ 2‚000‚000 Revaluation
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CHAPTER 10 SOLUTIONS TO BRIEF EXERCISES BRIEF EXERCISE 10-1 $27‚000 + $1‚400 + $10‚200 = $38‚600 BRIEF EXERCISE 10-2 |Expenditures | | | | | | | | | |Capitalization Period | |Weighted-Average Accumulated Expenditures | |Date | |Amount | |
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improvements on facilities) Cash 2‚500 Improvement Services 2‚500 Operating Revenue 5‚000 (To record printing services billed) Operating Expenses 9‚000 Cash 9‚000 Depreciation Expense Equipment 1‚500 Depreciation Expense Building 900 Accumulated Depreciation 2‚400 (To record depreciation for operations) Chapter 10 Question for Review and Discussion 1‚ 5‚ and 15 1. 1. The GASB states to identify all financial reporting by the government. The financial report will show
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Week Three Exercise Assignment Inventory 1. Specific identification method. a. cost of goods sold. Cash $35‚000 Sales $35‚000 Woods Good $11‚000 Wood Inventory $11‚000 Moon Goods $4‚000 Moon Inventory $4‚000 Total Cost of goods $15‚000 b. gross profit. Sales Revenue $35‚000-Cost of Goods $15‚000=$20‚000 Gross Profit c. ending inventory. $21‚800 (sunset)+ $31‚200 (earth)=$53‚000 (ending inventory) 2. Inventory valuation methods: basic computations. 3. Perpetual inventory system:
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business owner may have a great idea but without the accounting infrastructure in place a business will not be stable. I will discuss what financial and accounting records may be necessary for the business. Also the assets‚ inventory‚ depreciation and how I will price my services. The world of elementary textbook publishing is dominating by four large publishers. According to Dirk Smillie‚ who writes for Forbes Magazine‚ the industry of elementary and secondary textbook industry
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