# Accounting

## Crumbly Cookie Company is considering expanding by purchasing a new machine that costs \$62,000, has zero terminal disposal value, and has a 10-year useful life. It expects the annual increase in cash revenues from the expansion to be \$28,000 per year. It expects additional annual cash costs to operate the machine to be \$18,000 per year. Its cost of capital is 8%. Ignore taxes.

Crumbly Cookie Company is considering expanding by purchasing a new machine that costs \$62,000, has zero terminal disposal value, and has a 10-year useful life. It expects the annual increase in cash revenues from the expansion to be \$28,000 per year. It expects additional annual cash costs to operate the machine to be \$18,000 per …

## Sara has decided to quit her corporate job and live her dream by opening up her own food truck selling her “famous” tacos. She expects to earn \$90,000 per year once she gets a loyal following. To run her business, she will need to get a food truck, equipment, and a license. The food truck will cost her \$800 per month to lease, equipment rentals are \$150 per month and an annual license is \$300. Sara will also be taking a large pay cut to follow her dream. Her corporate job’s annual salary is \$100,000 annually.

Sara has decided to quit her corporate job and live her dream by opening up her own food truck selling her “famous” tacos. She expects to earn \$90,000 per year once she gets a loyal following. To run her business, she will need to get a food truck, equipment, and a license. The food truck …

## Consider two cash flow streams, where each will return the ith payment after i years: 100, 140, 131 and 90, 160, 120. Is it possible to tell which cash flow stream is preferable without know- ing the interest rate?

Consider two cash flow streams, where each will return the ith payment after i years: 100, 140, 131 and 90, 160, 120. Is it possible to tell which cash flow stream is preferable without know- ing the interest rate? EXPERT ANSWER Cash Flow 1 100, 140, 131 andCash Flow 2 90, 160, 120. let us …

## Suppose that Par’s management (Problem 14) encounters the following situations: a. The accounting department evises its estimate of the profit contribution for the deluxe bag to \$18 per bag b. A new low-cost material is available for the standard bag, and the profit contribution c. New sewing equipment is available that would increase the sewing operation capac- If each of these situations is encountered separately, what is the optimal solution and the per standard bag can be increased to \$20 per bag. (Assume that the profit contribution of the deluxe bag is the original \$9 value.) ity to 750 hours. (Assume that 10A +9B is the appropriate objective function.) total profit contribution?

EXPERT ANSWER 1) Solution: optimal solution : 10,560 Working: Standard Model (x) Deluxe Model (y) Maximum Total Profits No of Bags 300 420 10,560 Profit (\$) / Bag 10 18 Constraints Total Hours of Prod. Used Total Hours of Prod. Available Slack Time Cutting and Dyeing 0.7 1 630 ≤ 630 0 Sewing 0.5 0.833 …

## Fill in the following missing income statement values. The cases are independent.

Problem 4-2 Fill in the following missing income statement values. The cases are independent. Case A Case B Sales 250000 COGS 200000 Goss Profit 150000 Operating Expenses 60000 60000 Operating Income Interest Expense 10000 Income Before Taxes 80000 Tax Expense (40%) 92000 Net Income EXPERT ANSWER Problem 4-2 Fill in the following missing income statement …

## Prepare journal entries to record the following merchandising transactions of Stone Company, which applies the perpetual inventory system. (Hint: It will help to identify each receivable and payable; for example, record the purchase on August 1 in Accounts Payable — Abilene.)

Prepare journal entries to record the following merchandising transactions of Stone Company, which appliesthe perpetual inventory system. (Hint: It will help to identify each receivable and payable; for example,record the purchase on August 1 in Accounts Payable — Abilene.)Aug. 1 Purchased merchandise from Abilene Company for \$6,000 under credit terms of 1y10, ny30,FOB destination, invoice …

## a) Saeed and Rasheed carried on business in partnership. On 31st December 2007 Saeed retired. Their Balance Sheet at that date was as follows

a) Saeed and Rasheed carried on business in partnership. On 31st December 2007 Saeed retired. Their Balance Sheet at that date was as followsLiabilities and CapitalRs.AssetsRs.Accounts Payable10,000Land and Building5,000Notes Payable8,000Plant and Machinery12,000Saeed – Capital Account21,000Loose Tools4,000Rasheed – Capital Account14,000Patterns and Models2,000Inventory15,000Accounts Receivable11,000Notes Receivable2,500Cash1,50053,00053,000Profits and Losses were shared in the proportions of Saeed two-thirds, and Rasheed …

## Using the accounting equation for transaction analysis, prepare financial statements, and calculating return on assets (ROA)

Using the accounting equation for transaction analysis, prepare financial statements, and calculating return on assets (ROA)Davis Consulting began operations and completed the following transactions during December 2014: EXPERT ANSWER