• Q : What is maximum opportunity cost of capital....
    Accounting Basics :

    What is maximum opportunity cost of capital in both the Base Case and the Bicycle Scenario such that you should undertake the Segway People Mover Project?

  • Q : Present value of the note....
    Accounting Basics :

    A company borrowed $500,000 cash from the bank by signing a 5-year 6% installment note. The present value factor for an annuity at 6% for 5 years is 4.2124. Each annuity payment equals $118,697. The

  • Q : Refund the outstanding bonds....
    Accounting Basics :

    The town of Newport issued $1,500,000 of general obligation refunding bonds at a 2% premium. Bond issuance costs of $15,000 were incurred. The proceeds, net of the premium, are being used to refund

  • Q : Liquidated and distributed the stock and cash....
    Accounting Basics :

    The assets transferred had a value of $370,000, a basis of $250,000 and were subject to a liability of $20,000. Roberts Inc. had an operating loss of $1 million. The long term tax exempt rate is 4%.

  • Q : Compute net income for the first year....
    Accounting Basics :

    The partnership paid $3,000 in interest that was the amount owed for the year and paid $8,000 for a two-year insurance policy on the first day of business. Compute net income for the first year for

  • Q : Market rate on the issue date....
    Accounting Basics :

    Nike issued 25-year, 7% bonds with a par value of $200,000. Interest is paid semiannually. The market rate on the issue date was 6.5%. Nike received $211,568 in cash proceeds. Which of the following

  • Q : Calculate income from continuing operations....
    Accounting Basics :

    In 2010, the company's accountant discovered that depreciation expense in 2009 for the office building was overstated by $300.

  • Q : Capitalize the new public park....
    Accounting Basics :

    A local citizen donated land with a fair market value of $500,000 to the county government. The donor had paid $550,000 for the land five years ago. The county incurred $150,000 in development costs

  • Q : At what amount would camco record the forward contract....
    Accounting Basics :

    The spot rate on June 1 was 1 = $.004167, and the 90-day forward rate was 1 = $.00427. At what amount would CamCo record the Forward Contract on June 1st?

  • Q : Maximum amount of interest expenditures....
    Accounting Basics :

    A government has $3,000,000 of 6%, 10-year general obligation bonds outstanding. The bonds were issued on July 2, 20X7 to finance construction of a general capital asset. Interest is payable semian

  • Q : Taxes or special assessments....
    Accounting Basics :

    If taxes or special assessments are levied by the General Fund and then-transferred to the debt service fund, they are:

  • Q : How many of the coupon bonds would you need to issue....
    Accounting Basics :

    Suppose your company needs to raise $30 million and you want to issue 30-year bonds for this purpose. Assume the required return on your bond issue will be 8 percent

  • Q : Annual principal repayment....
    Accounting Basics :

    What type of serial bond schedules an increase each year in annual principal repayment approximately equivalent to the decrease in interest payments?

  • Q : What amount should be debited to equipment....
    Accounting Basics :

    At the date of purchase, what amount should be debited to Equipment?

  • Q : Determine the unadjusted rate of return....
    Accounting Basics :

    Income before taxes earned by the ice cream parlor is taxed at an effective rate of 20 percent. Determine the unadjusted rate of return (use average investment) for each alternative.

  • Q : Overstatement or understatement....
    Accounting Basics :

    There are 3,000 accounts receivable with a gross value of $6,900,000. The accounts are similar in size and will be treated as a single stratum. An overstatement or understatement of more than $150,0

  • Q : Depreciation expense using the straight-line rate....
    Accounting Basics :

    Diamond Company is considering investing in new equipment that will cost $600,000 with a 10-year useful life. The new equipment is expected to produce annual net income of $40,000 over its useful li

  • Q : What is the breakeven level of sales in units....
    Accounting Basics :

    What is the breakeven level of sales in units per month (round to the nearest whole unit)?

  • Q : Prepare a cash budget....
    Accounting Basics :

    It pays interest of 1 percent per month in cash on the last day of the month. To be prudent, the company desires to maintain a $12,000 cash cushion. Prepare a cash budget.

  • Q : How many units of product x must be sold....
    Accounting Basics :

    A company sells two products - X and Y. Product X is sold at a price of $50 and has a variable cost of $25. Product Y is sold at a price of $25 and has a variable cost of $20. Product X and Y are so

  • Q : Governmental activities changes in net assets....
    Accounting Basics :

    The reconciliation from governmental changes in fund balances to governmental activities changes in net assets would reflect:

  • Q : Should john''s camera go forward with change in production....
    Accounting Basics :

    With the change in production, John's Camera will lower its fixed to $80,000 but raise its variable costs to $90 per unit. Should John's Camera go forward with the change in production process?

  • Q : Expenditures and changes in fund balances....
    Accounting Basics :

    A government had the following transfers reported in its governmental funds Statement of Revenues, Expenditures and Changes in Fund Balances:

  • Q : Cost recovery deduction with respect to the asset....
    Accounting Basics :

    Augie purchased one used asset during the year (five-year property) on November 10, 2010, at a cost of $400,000. She made the § 179 election. The income from the business before the cost recove

  • Q : Cost recovery for the leasehold improvements....
    Accounting Basics :

    On May 30, 2010, Jane signed a 20-year lease on a factory building to use for her business. The lease begins on June 1, 2010. In August of 2010, Jane paid $100,000 for leasehold improvements to the

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