Consider the following case of Happy Turtle Transportation Company:
Suppose Happy Turtle Transportation Company is considering a project that will require $300,000 in assets.
The project is expected to produce earnings before interest and taxes (EBIT) of $55,000.
Common equity outstanding will be $30,000 shares.
The company incurs a tax rate of 40%.
1. If the project is financed using 100% equity capital, then Happy Turtle Transportation Company’s return on equity (ROE) on the project will be 11.55% / 10.45% / 13.20% / 11.00%. In addition, Happy Turtle’s earnings per share (EPS) will be$ 0.99 / $ 1.10 / $ 1.21 / $0.94 / $ 1.05.
2. Alternatively, Happy Turtle Transportation Company’s CFO is also considering financing the project with 50% debt and 50% equity capital. The interest rate on the company’s debt will be 13%. Because the company will finance only 50% of the project with equity, it will have only 15,000 shares outstanding. Happy Turtle Transportation Company’s ROE and the company’s EPS will be ???? if the management decides to finance the project with 50% debt and 50% equity.
14.20% and $ 1.42, respectively
14.91% and $ 1.35, respectively
17.04% and $ 1.63, respectively
16.33% and $ 1.56, respectively
3. When a firm uses debt financing, the business risk exposure for the firm’s common shareholders will increase / decrease.

Answer: Check attachment

Explanation:

1. Based on the calculations on the attachment, the return on equity is 11% and the earning per share is $1.1.

2. Return on equity is 14.20% and the earning per share is $1.42.

3. The business risk exposure for the common area shareholders of the firm will increase when debt financing is used by the firm.

Check the attachment for further details

Variable manufacturing costs are $150 per unit and fixed manufacturing costs are $75,000. Sales are estimated to be 6,000 units. How much would absorption costing income from operations differ between a plan to produce 6,000 units and a plan to produce 7,500 units?

What Limo servie do you use in Los Angeles for Prom Night?

Aubrey Inc. issued $4,000,000 of 10%, 10-year convertible bonds on June 1, 2020, at 98 plus accrued interest. The bonds were dated April 1, 2020, with interest payable April 1 and October 1. Bond discount is amortized semiannually on a straight-line basis. On April 1, 2021, $1,500,000 of these bonds were converted into 30,000 shares of $20 par value common stock. Accrued interest was paid in cash at the time of conversion. Instructions a. Prepare the entry to record the interest expense at October 1, 2020. Assume that accrued interest payable was credited when the bonds were issued. (Round to nearest dollar.) b. Prepare the entry(ies) to record the conversion on April 1, 2021. (Book value method is used.) Assume that the entry to record amortization of the bond discount and interest payment has been made.

The modern business environment has been shaped by political and economic events. Rapid growth and change in many areas have been typical in the past two or three decades. In the midst of growth and change, some trends have emerged as the drivers of change. Political and economic trends have different dynamics.

The international business manager needs a clear vision and understanding of world events and the markets and countries in which he or she operates. Putting current events into the historical context provides the manager with the ability to distinguish anomalies from trend events. The same vision and understanding offer the manager insights into timing and opportunity.

The transformation of the political economy of the world's nations has been driven by a wave of democratic revolutions and the strong move toward a more free market economic model. International business managers must assess the attractiveness of specific locations. Countries with democratic regimes, market-based economic policies, and strong protection of property rights are more likely to attain a high and sustained growth rate. These countries are attractive locations for international business.

Identify whether the trend is primarily political or economic in nature.

a. Spread of market based systems
b. New world order
c. Privatization
d. Deregulation
e. Spread of democracy

Scenario D. Jimena works for a small company that makes nut butters from ingredients like cashews and macadamia nuts, and jams from mixtures of tropical fruits. She reports to the CFO. It is her job to predict the costs of raw materials for the next five years. She uses various research sources, including the news, to learn who the competitors are and what they have been doing. In fact, she subscribes to an analyst e-newsletter that tells her about crop availability and weather conditions all around the globe. Every month she develops a spreadsheet for her boss indicating the likely costs of fruits and nuts given the type of weather conditions expected in each area of the world and thus the availability of particular crops. She is also involved in a team that is investigating how to cut production costs. They have recently met with Spicy Sides, a company that produces jars of condiments. Spicy Sides is considered the top company in the condiment industry, especially in its knowledge of how to pack food products in jars. Jimena's team is comparing their processes to those of Spicy Sides to see how they might improve.The information Jimena is using to compete in a better way is calledA. mission statement.B. organizational database.C. knowledge document.D. best-case scenario.E. competitive intelligence.

The Devon Motor Company produces automobiles. On April 1st the company had no beginning inventories and it purchased 7,390 batteries at a cost of $145 per battery. It withdrew 6,800 batteries from the storeroom during the month. Of these, 100 were used to replace batteries in cars being used by the company’s traveling sales staff. The remaining 6,700 batteries withdrawn from the storeroom were placed in cars being produced by the company. Of the cars in production during April, 90 percent were completed and transferred from work in process to finished goods. Of the cars completed during the month, 30 percent were unsold at April 30th.

1. Determine the cost of batteries that would appear in eachof the following accounts at April 30.

a. raw materials
b. work in process
c. finished goods
d. cost of goods sold
e. selling expanse

2. Specify whether each of the above accounts would appear onthe balance sheet or on the income statement at April 30.

how does a strong economy affect the demand for goods and services

Adjusting Entries Journalize the adjusting entry needed at December 31 for each situation. Record debits first, then credits. Check your spelling carefully and do not abbreviate. Use account names exactly as given in the Chart of Accounts. Accrued Salaries Expense of $2,300. Accrued Salaries Expense of $2,300. Date Accounts Debit Credit Dec. 31 correct correct correct correct correct correct correct Depreciation in the amount of $200 was recorded on the furniture. Depreciation in the amount of $200 was recorded on the furniture. Date Accounts Debit Credit Dec. 31 correct incorrect correct correct correct correct correct Prepaid Insurance for the month expired. Remember, a four month insurance policy of $1,800 was paid for on December 1. Prepaid Insurance for the month expired. Remember, a four month insurance policy of $1,800 was paid for on December 1. Date Accounts Debit Credit Dec. 31 correct correct correct correct correct correct correct Office Supplies used during the month, $80.

Consider the subschema of a receiving clerk. The receiving clerk needs sufficient rights in her logical view to perform her duties but not be given rights that she does not need. Within her duties, she validates that items being received were ordered from a supplier before she accepts shipments from that supplier. To do so she must be able to see purchases from each supplier. Determine which rights (Create, Read, Update, and Delete) the receiving clerk should have for data corresponding to sales, cash receipts, purchases, and suppliers.

The Moto Hotel opened for business on May 1, 2017. Here is its trial balance before adjustment on May 31.

MOTO HOTEL Trial Balance May 31, 2017

Debit Credit
Cash $2,523
Supplies 2,600
Prepaid Insurance 1,800
Land 15,023
Buildings 67,600
Equipment 16,800
Accounts Payable $4,723
Unearned Rent Revenue 3,300
Mortgage Payable 33,600
Common Stock 60,023
Rent Revenue 9,000
Salaries and Wages Expense 3,000
Utilities Expense 800
Advertising Expense 500
$110,646 $110,646

Other data:
1. Insurance expires at the rate of $450 per month.
2. A count of supplies shows $1,140 of unused supplies on May 31.
3. (a) Annual depreciation is $2,880 on the building.
(b) Annual depreciation is $2,280 on equipment.
4. The mortgage interest rate is 6%. (The mortgage was taken out on May 1.)
5. Unearned rent of $2,510 has been earned.
6. Salaries of $880 are accrued and unpaid at May 31.

Required:
Journalize the adjusting entries on May 31.

D'Anconia Copper is an all-equity firm with 60 million shares outstanding, which are currently trading at $20 per share. Last month, d'Anconia announced that it will change its capital structure by issuing $300 million in debt. The $200 million raised by this issue, plus another $200 million in cash that d'Anconia already has, will be used to repurchase existing shares of stock. Assume that capital markets are perfect.

1. At the conclusion of this transaction, what will be the value of a share of Anconia Copper will be closest to:

a. $18.33
b. $20.00
c. $25.00
d. $27.50

2. Suppose you are a shareholder in d'Anconia Copper holding 300 shares, and you disagree with the decision to lever the firm. You can undo the effect of this decision by:

a. borrowing $2,000 and buying 100 shares of stock.
b. selling 100 shares of stock and lending $2,000.
c. borrowing $1,200 and buying 60 shares of stock.
d. selling 60 shares of stock and lending $1,200

For each item below, indicate whether a debit or credit applies.
1. Decrease in Notes Payable
2. Increase in Dividends
3. Increase in Common Stock
4. Increase in Unearned Rent Revenue
5. Decrease in Interest Payable
6. Increase in Prepaid Insurance
7. Decrease in Salaries and Wages Expense
8. Decrease in Supplies
9. Increase in Revenues
10. Decrease in Accounts Receivable

Lisa is a sales manager at a clothing retail store. She has hired you, a recent graduate with a marketing degree with an emphasis on marketing information systems. She wants you to analyze big data that the company has gathered on its customers to come up with Ideal Customer Profiles so that the firm can make marketing Investment decisions to attract such customers. Lisa explains that an ideal customer profile is a description of the demographics, psychographies, and behavior of the customers who are most likely to purchase their firm's product. In order to identify the ideal Customers, you must determine the Customer Acquisition Costs, Lifetime Value, Payback Periods, and Customer Retention. You are familiar with these concepts because you learned about them in your marketing classes.You are now ready to calculate the Customer Lifetime Value, which Lisa wants calculated as a forecast of the net profit related to the whole purchase future associated with a customer. It equals the monthly sales to a certain customer, multiplied by the gross profit percentage, multiplied by the number of lifetime months a customer is expected to purchase from a certain store. Using company data, you have determined that the gross profit percentage is 25 percent, or 0.25. The monthly sales to an average customer would be $150 for the first group and $210 for the second group.A. Monthly Sales to a CustomerB. Gross Profit Percentage C. Number of Lifetime Months D. Customer Lifetime Value Over a 240-month period, what is the Customer Lifetime Value for the first group? a. $11,000 b. $9,000 c. $10,000 d. $12,000

Let’s say there is an investment product whose Annual Percentage Rate (APR) is 8%. If this investment product compounds quarterly (that is, four times a year), what will be the Effective Annual Interest Rate (EAR)?

Bacrometer, Inc., makes part no. 566 on one of its production lines. Each month Bacrometer makes 6,000 of part no. 566 at a variable cost of $4 per part. Bacrometer has been provided a bid for part no. 566 from another manufacturer that will make the part for $5 per part. Bacrometer knows the production line could be rented to another manufacturer for $8,000 per month. Fixed costs associated with the production line will remain unchanged regardless of the company's decision.
a. Compute the incremental cost to make with the incremental cost to buy. Remember the incremental cost to make includes the opportunity cost of the foregone rent revenue.b. Should Bacrometer continue to make part no. 566?

At the beginning of the year, accounts receivable were $146,000 and the allowance for bad debts was $11,700. During the year, sales (all on account) were $602,000, cash collections were $582,000, bad debts expense totaled $14,800, and $12,200 of accounts receivable were written off as bad debts.
Required:
Calculate the balances at the end of the year for the Accounts Receivable and Allowance for Bad Debts accounts. (Hint: Use T-accounts to analyze each of these accounts, plug in the amounts that you know, and solve for the ending balances.)
Ending balance
Accounts Receivable
Allowance for Bad Debts

During the year, Belyk Paving Co. had sales of $2,275,000. Cost of goods sold, administrative and selling expenses, and depreciation expense were $1,285,000, $535,000, and $420,000, respectively. In addition, the company had an interest expense of $245,000 and a tax rate of 21 percent. (Ignore any tax loss carryforward provision and assume interest expense is fully deductible.)
a. What is the company’s net income?
b. What is its operating cash flow?
c. Explain your results in parts (a) and (b)

The following transactions occurred during March 2018 for the Wainwright Corporation.
The company owns and operates a wholesale warehouse. Issued 45,000 shares of common stock in exchange for $450,000 in cash.
Purchased equipment at a cost of $55,000. $17,500 cash was paid and a notes payable to the seller was signed for the balance owed.
Purchased inventory on account at a cost of $108,000. The company uses the perpetual inventory system.
Credit sales for the month totaled $195,000. The cost of the goods sold was $85,000.
Paid $6,500 in rent on the warehouse building for the month of March.
Paid $7,500 to an insurance company for fire and liability insurance for a one-year period beginning April 1, 2021.
Paid $85,000 on account for the merchandise purchased in 3.
Collected $70,000 from customers on account.
Recorded depreciation expense of $2,500 for the month on the equipment.
Prepare journal entries to record each of the transactions listed above.

At the beginning of the period, the Cutting Department budgeted direct labor of $139,000, direct materials of $152,000 and fixed factory overhead of $13,000 for 7,700 hours of production. The department actually completed 11,700 hours of production. What is the appropriate total budget for the department, assuming it uses flexible budgeting

4. What is a power machine's "throw"?
OA. The direct line out from the tool.
OB. The machine's horsepower.
OC. The speed of the machine's moving parts.
OD. The material the machine operates on.

You are interviewing for an entry-level financial analyst position with Wayne Industries. Bruce Wayne, the senior partner, wants to be sure all the people he hires are very familiar with basic accounting principles. He gives you the following data and asks you to fill in the missing information. Each column is an independent case. Month and day reference are for the current year.
Case A Case B
Revenues 200,000
Expenses 70,000
Net Income
Retained Earnings, Jan 1 300,000 100,000
Dividends Paid 70,000 30,000
Retained Earnings, Dec 31 270,000
Current Assets, Dec 31 80,000
Non-current Assets, Dec 31 180,000
Total Assets, Dec 31 410,000
Current Liabilities, Dec 31
Total Liabilities, Dec 31 140,000
Total Stockholder's Equity, Dec 31 210,000

Manufacturers Southern leased high-tech electronic equipment from Edison Leasing on January 1, 2021. Edison purchased the equipment from International Machines at a cost of $168,120. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Related Information: Lease term 2 years (8 quarterly periods) Quarterly rental payments $22,500 at the beginning of each period Economic life of asset 2 years Fair value of asset $168,120 Implicit interest rate 8% (Also lessee’s incremental borrowing rate)
Required:
Prepare a lease amortization schedule and appropriate entries for Manufacturers Southern from the beginning of the lease through January 1, 2022. Amortization of the right-of-use asset is recorded at the end of each fiscal year (December 31) on a straight-line basis.

When the government decides to cut military spending, it is implementing a(n) _____ policy.

Urban Window Company had gross wages of $309,000 during the week ended July 15. The amount of wages subject to social security tax was $278,100, while the amount of wages subject to federal and state unemployment taxes was $39,000. Tax rates are as follows:

Social security 6.0%
Medicare 1.5%
State unemployment 5.4%
Federal unemployment 0.6%

The total amount withheld from employee wages for federal taxes was $61,800.

Required:
a. Journalize the entry to record the payroll for the week of July 15.
b. Journalize the entry to record the payroll tax expense incurred for the week of July 15.

In what ways do goals and objectives help managers control various processes within an organization? How do specific and measurable goals affect employees and promote organizational performance? Provide an example from your own experience of when a specific goal or objective provided beneficial control over a process. Explain what the beneficial control was and how did it positively impact organizational performance.

Textbook: Principles of Management-v.1.1

In the current year, Nighthawk Corporation, a calendar year C corporation, has $5,080,000 of adjusted taxable income and $152,400 of business interest income. Nighthawk has no floor plan financing interest. The business interest expense for the year is $2,032,000. a. Assume that Nighthawk has average gross receipts for the prior three-year period of $35,200,000. Determine Nighthawk's current-year deduction for business interest. $______ b. Assume that Nighthawk has average gross receipts for the prior three-year period of $19,500,000. Determine Nighthawk's current-year deduction for business interest. $______

Auto Parts, Inc. is medium-sized company that manufactures auto parts in Buffalo, New York. The company currently loses $40,000 per month. The owner of the company is evaluating whether she should shut down the factory. She thinks that the factory should continue to operate until the economic environment improves and buyer for the factory can be identified. The logic of the owner is that her company has already invested millions of dollars in the factory over the years. The monthly fixed costs for the factory are $30,000. The CEO of Auto Parts, Inc. thinks the factory should be shut down because most the monthly fixed costs ($30,000/month) are sunk costs.
Do you agree with the owner or the CEO?

Shen is skilled at making both necklaces and earrings. Shen has no preference between making necklaces or earrings since he earns the same amount from the two activities. If the selling price of earrings decreases from $20 to $10, then Shen's opportunity cost of making necklaces____________ and making necklaces is now__________ profitable than making earrings.

Suppose that the necklaces market consists of several suppliers like Shen who are skilled at making both necklaces and earrings. Which of the following is likely to happen to the supply curve of necklaces when the price of a earrings decreases?

a. It shifts to the left
b. It shifts to the right
c. It does not change

An Introduction to Cost Terms and Purposes Cost of goods manufactured, income statement, manufacturing company Consider the following account balances (in thousands) for the Carolina Corporation:
Carolina Corporation
Beginning of 2017 End of 2017
Direct materials inventory 124,000 73,000
Work-in-process inventory 173,000 145,000
Finished-goods inventory 240,000 206,000
Purchases of direct materials 262,000
Direct manufacturing labor 217,000
Indirect manufacturing labor 97,000
Plant insurance 9,000
Depreciation-plant, building, and equipment 45,000
Plant utilities 26,000
Repairs and maintenance-plant 12,000
Equipment leasing costs 65,000
Marketing, distribution, and customer-service costs 125,000
General and administrative costs 71,000
Required:
1. Prepare a schedule for the cost of goods manufactured for 2017.
2. Revenues for 2017 were 1300000 .Prepare an income statement for 2017.

Crawford corporation incurred the following transactions.
1. Purchased raw materials on account of $54,900.
2. Raw Materials of $42,500 were requisitioned to the factory, An analysis of the materials requisition slips indicated that $8,400 was classified as an individual.
3. labor costs incurred were $67,100, of which $50,800 pertained to factory wages payable and $16,300 pertained to employer payroll taxes.
4. Time tickets indicated that $54,300 was direct labor and $12,800 was indirect labor.
5. Manufacturing overhead costs incurred on account were $84,300.
6. Depreciation on the company's office building was $8,600.
7, Manufacturing overhead was applied at the rate of 150% of direct labor cost.
8. Goods costing $90,400 were completed and transferred to finished goods.
9. Finished goods costing $82,300 to manufacture were sold on account for $112,700.
Journalize the transactions. (credit account titles are automatically indented when the amount is entered. Do not indent manually.)