Business

You read in The Wall Street Journal that 30-day T-bills are currently yielding 5.5%…

Question: You read in The Wall Street Journal that 30-day T-bills are currently yielding 5.5%. Your brother-in-law, a broker at Safe and Sound Securities, has given you the following estimates of current interest rate premiums: Inflation premium = 3.25% Liquidity premium = 0.6% Maturity risk premium = 1.8% Default risk premium = 2.15% On the …

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M2-19 Calculating Missing Amounts and Cost of Goods Sold [LO 2-6]

Question: M2-19 Calculating Missing Amounts and Cost of Goods Sold [LO 2-6] For each of the following independent cases A–D, compute the missing values: (Enter all amounts as positive values.) Case Cost of Goods Manufactured Beginning Finished Goods Inventory Ending Finished Goods Inventory Cost of Goods Sold A $3,180 $560 $270 B 4,190 1,400 4,560 C …

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Bruno Company has decided to expand its operations…

Question: Bruno Company has decided to expand its operations. The bookkeeper recently completed the balance sheet presented below in order to obtain additional funds for expansionBRUNO COMPANY Statement of Financial PositionDecember 31, 2010 Current assetsCash $260,000Accounts receivable (net) 340,000Inventories at lower-of-average-cost-or-net realizable value 401,000Trading securities-at cost (fair value $120,000) 140,000Property, plant, and equipmentBuilding (net) 570,000Office …

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Paul Polishan apparently dominated Leslie Fay’s accounting and financial reporting…

Question: Paul Polishan apparently dominated Leslie Fay’s accounting and financial reporting functions and the individuals who were his subordinates. What implications do such circumstances pose for a company’s independent auditors? How should auditors take such circumstances into consideration when planning an audit? Answer: Finding the implications, if one individual dominates a company’s reporting and accounting: …

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Interpreting the statement of cash flow relations…

Question: Interpreting the statement of cash flow relations. Exhibit 6.34 presents statements of cash flow for eight companies for the same year:a. American Airlines (airline transportation)b. American Home Products (pharmaceuticals)c. Interpublic Group (advertising and other marketing services)d. Procter & Gamble (consumer products)e. Reebok (athletic shoes)f. Texas Instruments (electronics)g. Limited Brands (speciality retailing)h. Upjohn (pharmaceuticals)Discuss the …

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Wurtz Inc. has sponsored a noncontributory, defined benefit pension…

Question: Wurtz Inc. has sponsored a noncontributory, defined benefit pension plan for its employees since 20X0. Prior to 20×8, cumulative net pension expense recognized equalled cumulative contributions to the plan. Other relevant information about the pension plan on January 1, 20X8, is as follows. The company has 200 employees. All these employees are expected receive …

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The trial balance before adjustment for Martinez Company shows the following balances…

Question: The trial balance before adjustment for Martinez Company shows the following balances. Using the data above, give the journal entries required to record each of the following cases. (Each situation is independent.) Answer: Working Notes; For case (3.) Amount of allowance to be ($84700 x 7 / 100) = $5929 + $2700 debit balance …

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