Maribeth Company made the following expenditures relating to Product Zee: Legal costs to file a patent on Product Zee. Production of the finished product would not have been undertaken without the patent 100,000 Special equipment to be used solely for development of Product Zee. The special equipment has no other use and has an estimated useful life of four years Labor and materials costs incurred in producing a prototype model Cost of testing the prototype What total amount of costs should be expensed when incurred? 600,000 2,000,000 800,000 А. 2,800,000 B. 2,950,000 C. 3,400,000 D. 3,500,000
Q: From the following facts, for straight-line depreciation, what is: Given: Cost - $ 35,000…
A: Depreciation per year as per straight line method = (Cost - Residual value)/useful life
Q: Which of the following would appear only in the footnotes accompanying the financial statements? Oa.…
A: Financial statement means the statement which include the income statement and the balance sheet.…
Q: From the following facts, for the units produced depreciation, what is: Given: COST - $ 40,000…
A: In case of units of production method Number of years the equipment is depreciated will be upto…
Q: The following details have been extracted from the standard cost card for product x which is…
A: The standard is set in advance, and the actual performance is measured against it. If the actual…
Q: What are the ethical responsibilities of the tax practitioner in dealing with tax evasion?
A: Tax evasion is a criminal crime in which a person or corporation intentionally avoids paying a…
Q: PREPARE BRS? Bank Balance = $4,487 Book Balance = S$5,899 Interest income = $35 %3D Deposit in…
A: Introduction: Bank reconciliation statement: To Reconcile between the cash and pass book balances…
Q: The company's accounts receivable to 500,000. Prepaid Expenses and unearned income are 30,000 and…
A: Introduction: Balance sheet: All Assets and liabilities are to be shown in Balance sheet. It tells…
Q: KK Ltd regularly sells goods to its wholly-owned subsidiary company Ash Ltd, which it has owned…
A: A consolidated financial statement is a statement of accounts under which the line-by-line items of…
Q: The Company provided the following stockholders' equity account balances at the end of the year:…
A: Common shares are the ordinary shares issued by the company to the common shareholders. Treasury…
Q: The following data were gathered to use in reconciling the bank account of Photo Op: Balance per…
A: Introduction: BRS: BRS stands for Bank Reconciliation statement. To reconcile the difference between…
Q: Lathrop Inc. purchased equipment on January 1, 2020, for $150,000 cash plus a note payable. The fair…
A: Date Accounts, explanation and title Debit Credit 1 January 2020 Equipment (542,666 -…
Q: Received a six-month insurance policy renewal from general insurance company for $1200 paid a meatly…
A: Prepaid expenses are those for which the payment has been made before it occurs. For example,…
Q: Projected sales in units for the coming five months are given below.
A: 1. Sales BudgetJanuaryFebruaryMarchBudgeted sales in units10,000 10,500 13,000 x Price per unit$…
Q: Company A conducts the following transaction for the financial year ending Dec. 2011 for a…
A: LIFO (Last in first out) method of inventory valuation shows the inventory which is purchased at…
Q: Accounts Payable $12,000 Buildings 70,000 Cash 8,000 Accounts Recelvable 7,000 Seles Tex Payable…
A: Introduction: Current Assets: The assets which can be easily converted in to cash with in 12 months…
Q: SELLING PRICE R116 UNITS IN OPENING INVENTORY 600 UNITS MANUFACTURED 2550 UNIT SOLD 3050 UNITS IN…
A: Marginal costing method: It is also called the Variable costing method. In this method, all the…
Q: Required: Show the relevant extract of the financial statement as at Dec 31, 2008.
A: Building account…
Q: Aztec Inc. produces soft drinks. Mixing is the first department, and its output is measured in…
A:
Q: On January 1, 2016, Indians Corporation bought a factory equipment for P924,000 salvage value was…
A: Introduction: Depreciation: Decreasing value of fixed assets over its useful life period called as…
Q: Ivory Inc. has forecast purchases on account to be $317,000 in March, $377,000 in April, $427,000 in…
A: Budgeted cash payment for June = Cash payment for purchases in June + Cash payment for purchases in…
Q: On January 1, 2023, Jones Corporation issued $2.982.000, 9%, 5-year bonds with interest payable on…
A: Interest expense on bonds is calculated at the market rate of interest on the issue value of the…
Q: Clyde Corp is considering the purchase of a new piece of equipment. The cost savings from the…
A: Following formula used for answering above questions: Accounting rate of return = Annual Income /…
Q: List two circumstances in which obtaining capital allowances on the reducing balance basis is more…
A: Depreciation is the reducing value of an asset, If we buy something from the market or any fixed…
Q: Using the folowing information, prepare a bank reconciliation. • Bank balance: $4,687 Book balance:…
A: Bank reconciliation statement means the statement in which the balance as per cash book and balance…
Q: A drive in movie theater has been selling popcorn, and the small concession stand has normally…
A: Break-even point analysis is calculated to determine number of units produced to cover fixed and…
Q: Holiday Corp. has two divisions, Quail and Marlin. Quail produces a widget that Marlin could use in…
A: If widgets are produced in the excess capacity, only variable cost is relevant because fixed cost do…
Q: Use the information for the next two (2) questions. Bold Company estimated annual warranty expense…
A: Introduction: Warranty liability means repairing the products which was sold earlier. Warranty…
Q: Blossom Co. uses the percentage-of-receivables basis to record bad debt expense. It estimates that…
A:
Q: NhyiraCapital Limited began research into the software it has used over a period. The software has…
A: The question is related to Accounting for Intangible Assets. As per the Standard the development of…
Q: A key criterion in auditing (both internal and external) is independence. In what way (s) can…
A: There are mainly two types of audits in a business that are external audit and internal audit.…
Q: Direct Materials Purchases Budget: Direct Labor Budget Crescent Company produces stuffed toy…
A:
Q: You have a business manufacturing Artfarts for Dogtown, Inc. Following is the costing data you have…
A: Activity-based costing is a costing approach in which a company's activities are identified and the…
Q: On January 1, 2017, Naruto Company issued its P2,000,000, 10%, 5-year-term bonds for 1.125. Bond…
A: Interest expense for the year = Interest payment for the year - Amortized bond premium for the year…
Q: Using the following information, prepare a bank reconciliation. • Bank balance: $4,021 • Book…
A: Introduction: Bank reconciliation statement: BRS stands for Bank Reconciliation statement. To…
Q: If a company erroneously records a $50 check received from a customer as $500 in its records, which…
A: Since the company has made error in its books, the rectification also needs to eb done in its own…
Q: 14.24 David Jurman, Ltd., has received the following orders: Period 1 3 4 6. 10 40 30 40 8 9 Order…
A: The process of determining how much resource will be required to fulfill demand is referred to as…
Q: Carl has a b
A: The income of the parent company does not include any income from its subsidiary company which shows…
Q: Variable Cost Concept of Product Pricing Smart Stream Inc. uses the variable cost concept of…
A: Variable Cost = Direct Material + Direct labor + factory overhead + selling and administrative…
Q: Anxious Company acquired two items of machinery. On December 31, 2020, Anxious Company purchased a…
A: Note means an instrument issued by company acknowledging the debt due from company to bond holder.…
Q: Required: 1. Express each year's income statement in common-size percentages. (R
A:
Q: FlashKick Company manufactures and sells soccer balls for teams of children in elementary and high…
A: Lets understand the basics. Budget is a future estimation of profit and loss. Management first…
Q: The standard cost of product 777 includes 2.1 units of direct materials at $6.00 per unit. During…
A: Materials price variance = (Standard price - Actual price) x Actual quantity Materials quantity…
Q: wift, LLC purchased equipment (7-year property) for use in its business on October 15, 2021. This…
A: MACRS Depreciation To calculate the tax adjusted basis of the assets first to determine the cost of…
Q: Use the income statement below to answer the following questions. BASIC TRAVEL Contribution…
A: Formulas: Break even point = Fixed costs /Contribution margin per unit where, Contribution margin…
Q: Gordon Helps and Associates Company ltd makes two products. Information regarding one of those…
A: Cost per unit is the cost of making a single unit. It may include the variable as well as fixed…
Q: Cost of goods sold budget Direct materials used Part K298 $fill in the blank…
A: Ponderosa, Inc., produces wiring harness assemblies used in the production of semi-trailer trucks.…
Q: Exercise 13.6 (Algo) Recording closing entries. LO 13-5 On December 31, 20X1, the Income Statement…
A: Closing entry means the entries passed at the end of specified period where all the balances of…
Q: DO NOT INCLUDE COMMAS OR BO The Company acquired a machine on January 1, Year 1. The machine cost…
A: Depreciation: Depreciation means the reduction in the value of an asset over the life of the assets…
Q: TAP & Brothers Third-Quarter Budget Data July August September Credit Sales 256,167 262,962…
A: Cash Budget is an Future estimation of all expected cash receipts and cash payments to be made for…
Q: Exercise 13-27 (Algorithmic) (LO, 1) On July 1, 2021, Katrina purchased tax-exempt bonds (face value…
A: Katrina purchased tax exempt bonds . As per IRS interest received on tax exempt bonds is not a…
Step by step
Solved in 3 steps
- Outspoken Company made the following expenditures relating to Product Y. Legal costs to file a patent on Product Y. Production of the finished product would not have been undertaken without the patent Special equipment to be used solely for development of Product Y. The equipment has no other use and has an estimated useful life of four years. Labor and material costs incurred in producing a prototype Cost of testing the prototype - 100,000 600,000 2,000,000 800,000 What total amount should be expensed when incurred? a. 2,800,000 b. 2,950,000 c. 3,400,000 d. 3,500,000. Squarepants company made the following expenditures relating to product Y.Legal costs to file a patent on Product Y. Production of the finishedProduct would not have been undertaken without the patent 75,000Special equipment to be used solely for the development of Product YThe equipment has no other use and has an estimated useful life of 4 yrs 450,000Labor and materials costs incurred in producing a prototype 1,500,000Cost of testing the prototype 600,000 What total amount should be expensed when incurred?A manufacturer incurs the following costs: $38,000 developing new techniques that will be put in place shortly to cut production costs; $27,000 researching a new process to improve the quality of the standard product and $8,000 on market research into the commercial viability of a new type of product. It is company policy to capitalise costs whenever permitted by IAS 38 Intangible Assets. 9.7 How much should be charged as research and development expenditure in profit or loss? (ignore amortisation) $73,000 $35,000 $27,000 $38,000 A 229ni2ud a yde C BPP EARNING MEDIA
- 7. During 2020, TULIP Corporation incurred costs to develop and produce a routine, low-risk computer software product as follows: Packaging product (500 units) -₱90,000; Duplication of computer software and training materials from product masters (1,000 units) -₱250,000; Completion of detailed program design -₱130,000; Cost of producing product masters for training materials -₱150,000; Other testing costs after the establishment of technological feasibility -₱200,000; Costs incurred for coding and testing to establish technological feasibility -₱100,000; Other coding costs after the establishment of technological feasibility -₱240,000. In TULIP's December 31, 2020 statement of financial position, what amount should be capitalized as software cost subject to amortization? * a. ₱ 540,000 b. ₱ 570,000 c. ₱ 690,000 d. ₱ 590,000Rust Industrial Systems is trying to decide between two different conveyor belt systems. System A costs $276,000, has a four-year life, and requires $84,000 in pretax annual operating costs. System B costs $390,000, has a six-year life, and requires $78,000 in pretax annual operating costs. Both systems are to be depreciated straight-line to zero over their lives and will have zero salvage value. Suppose the company always needs a conveyor belt system; when one wears out, it must be replaced. Assume the tax rate is 24 percent and the discount rate is 8 percent. Calculate the EAC for both conveyor belt systems. Note: Your answers should be negative values and indicated by minus signs. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. System A System B Which conveyor belt system should the firm choose? System A System BNewmarge Products Inc. is evaluating a new design for one of its manufacturing processes. The new design will eliminate the production of a toxic solid residue. The initial cost of the system is estimated at 860,000 and includes computerized equipment, software, and installation. There is no expected salvage value. The new system has a useful life of 8 years and is projected to produce cash operating savings of 225,000 per year over the old system (reducing labor costs and costs of processing and disposing of toxic waste). The cost of capital is 16%. Required: 1. Compute the NPV of the new system. 2. One year after implementation, the internal audit staff noted the following about the new system: (1) the cost of acquiring the system was 60,000 more than expected due to higher installation costs, and (2) the annual cost savings were 20,000 less than expected because more labor cost was needed than anticipated. Using the changes in expected costs and benefits, compute the NPV as if this information had been available one year ago. Did the company make the right decision? 3. CONCEPTUAL CONNECTION Upon reporting the results mentioned in the postaudit, the marketing manager responded in a memo to the internal audit department indicating that cash inflows also had increased by a net of 60,000 per year because of increased purchases by environmentally sensitive customers. Describe the effect that this has on the analysis in Requirement 2. 4. CONCEPTUAL CONNECTION Why is a postaudit beneficial to a firm?
- Build Limited plans to start a project (Project Beta) for the forthcoming yearthat will be sold to an international corporation. Build Limited is yet to pay for the research costs to date, which total Rs. 150,000. The following additional costs have been estimated by the managing director to complete project Beta. MaterialsTwo materials are needed for project Beta – Material A and Material B. Material A has already been purchased at a cost of Rs. 60,000. It is toxic; and if not used in project Beta, it must be disposed of at a cost of Rs. 5,000. Material B – there are 50 kgs available in inventory which has been purchased at Rs. 400 per kg. project Beta will require a total of 150 kgs of this material. The current purchase price if Rs. 450 per kg and this material is regularly used in other projects currently undertaken by Build Limited. LabourProject Beta will require skilled labour which is hard to recruit in the present situation. Workers will have to be transferred from another…Rust Industrial Systems Company is trying to decide between two different conveyor belt systems. System A costs $290,000, has a four - year life, and requires $93, 000 in pretax annual operating costs. System B costs $370,000, has a six - year life, and requires $87,000 in pretax annual operating costs. Both systems are to be depreciated straight - line to zero over their lives and will have zero salvage value. Whichever project is chosen, it will not be replaced when it wears out. The tax rate is 25 percent and the discount rate is 8 percent. Calculate the NPV for both conveyor belt systems. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g " 32.16.).Peyton Manufacturing is trying to decide between two different conveyor belt systems. System A costs $248,000, has a four-year life, and requires $77,000 in pretax annual operating costs. System B costs $348,000, has a six-year life, and requires $71,000 in pretax annual operating costs. Both systems are to be depreciated straight-line to zero over their lives and will have zero salvage value. Suppose the company always needs a conveyor belt system; when one wears out, it must be replaced. Assume the tax rate is 22 percent and the discount rate is 9 percent. Calculate the EAC for both conveyor belt systems. (Your answers should be negative values and indicated by minus signs. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) System A System B $ -398,387.80
- 15. Hobie Corp. has the following information for the purchase of a new machine in its manufacturing process: Cost of the machine Expected useful life-the cost of the machine will be depreciated on a straight-line basis to a terminal disposal value of zero. Working capital investment upon machine purchase (fully recovered at the end of the useful life) Annual cost savings with the new machine Machine's expected salvage value at the end of four years Required rate of return Hobie's tax rate a. Calculate the net present value (NPV) of the project (round your solution to dollars). $ 225,000 4 years c. Should the project be accepted or rejected? Why? $12,000 $ 66,000 $8,000 8% 15% b. What is the payback period of the project (round your solution to two decimal places)?Rust Industrial Systems Company is trying to decide between two different conveyor belt systems. System A costs $350,000, has a 4-year life, and requires $141,000 in pretax annual operating costs. System B costs $430,000, has a 6-year life, and requires $135,000 in pretax annual operating costs. Both systems are to be depreciated straight- line to zero over their lives and will have zero salvage value. Whichever project is chosen, it will not be replaced when it wears out. The tax rate is 22 percent and the discount rate is 8 percent. Calculate the NPV for both conveyor belt systems. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) System A System B Which conveyor belt system should the firm choose? ○ System B O System ATanaka Industrial Systems Company is trying to decide between two different conveyor belt systems. System A costs $360,000, has a 4-year life, and requires $149,000 in pretax annual operating costs. System B costs $440,000, has a 6-year life, and requires $143,000 in pretax annual operating costs. Both systems are to be depreciated straight- line to zero over their lives and will have zero salvage value. Suppose the company always needs a conveyor belt system; when one wears out, it must be replaced. Assume the tax rate is 24 percent and the discount rate is 10 percent. Calculate the EAC for both conveyor belt systems. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Answer is complete but not entirely correct. System A -650,486.43 X System B -836,677.14 X $ $