Archives: Solution Manual

CHAPTER 14 Financial Statement Analysis LEARNING OBJECTIVES 1. APPLY HORIZONTAL AND VERTICAL ANALYSIS TO FINANCIAL STATEMENTS. 2. ANALYZE A COMPANY’S PERFORMANCE USING RATIO ANALYSIS. 3. APPLY THE CONCEPT OF SUSTAINABLE INCOME. statement data over a period of time to determine […]

SOLUTION Chapter 13 Waterways Continuing Problem WCP13 (a) WATERWAYS CORPORATION—Installation Division Statement of Cash Flows—Indirect Method For the Year Ended December 31, 2017 Cash flows from operating activities Net income ……………………………………………………………… Adjustments to reconcile net income to net cash provided […]

CHAPTER 13 SOLUTIONS TO PROBLEMS: SET B PROBLEM 13-1B Transaction SCF Activity Affected Cash inflow, outflow, or no cash flow effect? (a) Recorded depreciation expense on the plant assets. O No cash flow effect (b) Incurred a loss on disposal […]

3. (a) Depreciation Expense …………………………………….. 25,000 Accumulated Depreciation ……………………….. 25,000 (b) Depreciation expense ($25,000) is added to net income in the operating section. in the income statement, and is included in the net income amount on the statement of cash […]

P13-3A Prepare the operating activities section – indirect method The income statement of Whitlock Company is presented here. Sales revenue $7,700,000 Cost of goods sold Beginning inventory $1,900,000 Purchases 4,400,000 Goods available for sale 6,300,000 Ending inventory 1,400,000 Total cost […]

Chapter 13 – Weygandt Managerial 7e Challenge Exercises Solutions Solution CE13-1 (a) Payment of interest on notes payable. (6) not separately reported in the statement of cash flows. (b) Exchange of land for patent. (5) significant noncash investing and financing […]

CHAPTER 13 Statement of Cash Flows ASSIGNMENT CLASSIFICATION TABLE Learning Objectives Questions Brief Exercises Do It! Exercises A Problems *1. Discuss the usefulness and format of the statement of cash flows. 1, 2, 3, 4, 5, 6, 7, 8, 9, […]

CHAPTER 13 STATEMENT OF CASH FLOWS LEARNING OBJECTIVES 1. DISCUSS THE USEFULNESS AND FORMAT OF THE STATEMENT OF CASH FLOWS. 2. PREPARE A STATEMENT OF CASH FLOWS USING THE INDIRECT METHOD. 3. ANALYZE THE STATEMENT OF CASH FLOWS. *4. PREPARE […]

SOLUTION Chapter 12 Waterways Continuing Problem WCP12 (a) (1) NET PRESENT VALUE Buy New Backhoes Time Period Cash Flow 8% Discount Rate Present Value Equipment purchase 0 $(200,000) 1 $ (200,000) Salvage value of old equip 0 42,000 1 42,000 […]

CHAPTER 12 SOLUTIONS TO PROBLEMS: SET B PROBLEM 12-1B (a) Project Mary $140,000 ÷ [($10,000 + $28,000)] = 3.68 years Project Winnie Cash Flow Cumulative Cash Flow $47,500 ($12,500 + $35,000) $47,000 ($12,000 + $35,000) $ 47,500 $ 94,500 Project […]

CHAPTER 12 SOLUTIONS TO EXERCISES—SET B EXERCISE 12–1B (a) The cash payback period is: $48,000 ÷ $8,000 = 6 years The net present value is: Cash Flows X 9% Discount Factor = Present Value project should be accepted. The reason […]

E12 – 2 Compute cash payback period and net present value Doug’s Custom Construction Company is considering three new projects, each requiring an equipment investment of $22,000. Each project will last for 3 years and produce the following net annual […]

Less: initial investment (390,000) Net present value $ 3,448 Average investment = ($400,000 + $15,000) / 2 = $207,500 $25,000 / $207,500 = 12.05% 425,261.95 Less: initial investment (400,000.00) Net present value $ 25,261.95 higher net present value and a […]

Chapter 12: Using Excel to Make Decisions at Current Designs Part 1 (a), (b), (c) Data Required rate of return 9% Cost of new rotomold oven 256,000$ Salvage value of new rotomold oven –$ Estimated useful life 8 years Projected […]

CHAPTER 12 Planning for Capital Investments ASSIGNMENT CLASSIFICATION TABLE Learning Objectives Questions Brief Exercises Do It! Exercises A Problems 1. Describe capital budgeting inputs and apply the cash payback technique. 1, 2, 3 1 1 1, 2, 6, 9, 10, […]

CHAPTER 12 Planning for Capital Investments LEARNING OBJECTIVES 1. DESCRIBE CAPITAL BUDGETING INPUTS, AND APPLY THE CASH PAYBACK TECHNIQUE. 2. USE THE NET PRESENT VALUE METHOD. 3. IDENTIFY CAPITAL BUDGETING AND REFINEMENTS. 4. USE THE INTERNAL RATE OF RETURN METHOD. […]

SOLUTION Chapter 11 Waterways Continuing Problem WCP11 (a) Materials Price Variance Actual Quantity X Actual Price less Actual Quantity X Standard Price 229,000 lbs 229,000 lbs X X (b) Materials Quantity Variance Actual Quantity X Standard Price less Standard Quantity […]

CHAPTER 11 SOLUTIONS TO PROBLEMS: SET B (a) Total materials variance: ( AQ X AP ) (20,000 X $5.95) – ( SQ X SP ) (19,400* X $6.00) Materials price variance: (20,000 X $5.95) $119,000 – (20,000 X $6.00) $120,000 […]

Direct labor: 1/2 X $18 = 9.00 Overhead: $9 X 70% = 6.30 Standard cost: $27.80 3. Setting prices is facilitated. 4. Management control is enhanced by having a basis for evaluation of cost control. 5. Variances are highlighted in […]

E11-2 Compute standard materials costs Hank Itzek manufactures and sells homemade wine, and he wants to develop a standard cost per gallon. The following are required for production of a 50-gallon batch. 3,000 ounces of grape concentrate at $0.06 per […]

Besler Building 3,800 4,000 $80.00 16,000 F High quality paint/needed less Cartwright Building 4,500 4,200 $80.00 24,000 U Inexperienced worker/wasted paint Total quantity variance $28,000 U Besler Building 3,800 $78.50 $80.00 5,700 F Paint cheaper than standard cost Cartwright Building […]

Chapter 11: Using Excel to Make Decisions at Current Designs Part 1 Data Actual activity for Huegel Hollow order: Purchases of polyethylene powder 1,200 pounds Finishing kits assembled 20 kits Type I labor hours 38 hours Type Il labor hours […]

CHAPTER 11 Standard Costs and Balanced Scorecard ASSIGNMENT CLASSIFICATION TABLE Learning Objectives Questions Brief Exercises Do It! Exercises A Problems 1. Describe standard costs. 1, 2, 3, 4, 5, 6, 7, 8, 9 1, 2, 3 1 1, 2, 3, […]

CHAPTER 11 Standard Costs and Balanced Scorecard LEARNING OBJECTIVES 1. DESCRIBE STANDARD COSTS. 2. DETERMINE DIRECT MATERIALS VARIANCES. 3. DETERMINE DIRECT LABOR AND TOTAL MANUFACTURING OVERHEAD VARIANCES. 4. PREPARE VARIANCE REPORTS AND BALANCED SCORECARDS. *5. IDENTIFY THE FEATURES OF A […]

SOLUTION Chapter 10 Waterways Continuing Problem WCP10 (a) WATERWAYS CORPORATION Manufacturing Overhead Flexible Budget For the Month of March 2017 Production in units 115,500 116,500 117,500 118,500 119,500 Variable costs Indirect materials ($.05/unit a) $ 5,775 $ 5,825 $ 5,875 […]

CHAPTER 10 SOLUTIONS TO PROBLEMS: SET B PROBLEM 10-1B (a) SPEIER COMPANY Flexible Monthly Manufacturing Overhead Budget Assembly Department For the Year 2017 Rent Property taxes Total fixed costs Total costs 800 500 11,100 $25,500 800 500 11,100 $27,100 800 […]

CHAPTER 10 SOLUTIONS TO EXERCISES—SET B EXERCISE 10-1B (a) MONICA COMPANY Selling Expense Report For March By Month Year–to–Date Month Budget Actual Difference Budget Actual Difference January $31,000 $29,000 $2,000 F $ 31,000 $ 29,000 $2,000 F February $37,000 $38,500 […]

b. The inflation rate in Australia should be higher. c. Nominal interest rates in Australia should be higher; relative real rates in the two countries should be the same. 6. The main advantage is the avoidance of the tariff. Additional […]

E10-3 Prepare flexible manufacturing overhead budget Myers Company uses a flexible budget for manufacturing overhead based on direct labor hours. Variable manufacturing overhead costs per direct labor hour are as follows. $1.00 0.70 0.40 Fixed overhead costs per month are […]

Input area: Sales price in dollars 98,000$ Variable cost in dollars 81,000$ Profit 16,999$ Profit at a $/€ exchange rate of $1.37 Profit 22,276$ Breakeven $/€ exchange rate 1.07$ Exchange rate movement -17.35% Output area: Dollars per plan at current […]

Depreciation – auto (sales staff) 2,500 3,000 500 U Total fixed 110,000 110,500 500 U Total expenses $608,375 $572,625 $35,750 F (continued on the next page) Chapter 10 – Weygandt Managerial 7e Challenge Exercises Solutions Solution CE10-1 (a) Jennings Outdoor […]

5. Such instruments go by a variety of names, but the key feature is that the dividend adjusts, keeping the price relatively stable. This price stability, along with the dividend tax exemption, makes so-called adjustable rate preferred stock very attractive […]

Chapter 10: Using Excel to Make Decisions at Current Designs Part 1 Data Kayaks budgeted for production in 2017 4,000 Manufacturing overhead budget for 2017 Type I labor 15.00$ per hour Type II labor 12.00$ per hour Polyethylene powder required […]

4. Carrying costs will decrease because they are not holding goods in inventory. Shortage costs will probably increase, depending on how close the suppliers are and how well they can estimate need. The operating cycle will decrease because the inventory […]

CHAPTER 10 Budgetary Control and Responsibility Accounting ASSIGNMENT CLASSIFICATION TABLE Learning Objectives Questions Brief Exercises Do It! Exercises A Problems 1. Describe budgetary control and static budget reports. 1, 2, 3, 4, 5 1, 2 1 1, 2, 8, 9 […]

CHAPTER 16 PIEPKORN MANUFACTURING WORKING CAPITAL MANAGEMENT, PART 1 1. The cash flow each quarter will consist of the sales collection, minus the suppliers paid, expenses, dividends, interest, and capital outlays. The payables paid each quarter are based off the […]

CHAPTER 10 Budgetary Control and Responsibility Accounting LEARNING OBJECTIVES 1. DESCRIBE BUDGETARY CONTROL AND STATIC BUDGET REPORTS. 2. PREPARE FLEXIBLE BUDGET REPORTS. 3. APPLY RESPONSIBILITY ACCOUNTING TO COST AND PROFIT CENTERS. 4. EVALUATE PERFORMANCE IN INVESTMENT CENTERS. *5. EXPLAIN THE […]

35 36 37 38 39 40 41 Discount on purchases 9,032.22 9,744.72 9,440.00 9,124.44 Wages, taxes, and other costs (259,050.00) (275,550.00) (298,800.00) (277,200.00) Interest and dividends (115,000.00) (115,000.00) (115,000.00) (115,000.00) Outlay (325,000.00) Cash flow 41,690.11$ 44,947.61$ 113,664.00$ (245,841.78)$ 1 2 […]

Accumulated amount = $6,000 X 1.79586 = $10,775.16 Case B 6% 8 periods Case B 4% 12 periods = $9,600 X 1.60103 = $15,369.89 = $78,000 X 13.18079 = $1,028,101.62 APPENDIX A Time Value of Money SOLUTIONS TO BRIEF EXERCISES […]

5. It is clear that the stock was sold too cheaply, so Zipcar had reason to be unhappy. 6. No, but, in fairness, pricing the stock in such a situation is extremely difficult. 7. It’s an important factor. Only 9.68 […]

APPENDIX A TIME VALUE OF MONEY LEARNING OBJECTIVES 1. COMPUTE INTEREST AND FUTURE VALUES. 2. COMPUTE PRESENT VALUE. 3. SOLVE FOR FUTURE VALUE OF AN ANNUITY. 4. IDENTIFY THE VARIABLES FUNDAMENTAL TO SOLVING PRESENT VALUE PROBLEMS. APPENDIX A REVIEW Value […]

Since the company must currently provide audited financial statements due to the bond covenants, the audit costs are not incremental costs and should not be included in the calculation of the fees. So, the sum of the other fees is: […]

Waterways Continuing Problem 1 Waterways Continuing Problem WCP1 Waterways Corporation is a private corporation formed for the purpose of pro- viding the products and the services needed to irrigate farms, parks, commercial projects, and private homes. It has a centrally […]

Filing fees 15,000$ NASDAQ listing fee 125,000$ Transfer agent fee 6,500$ Engraving expenses 450,000$ Other expenses 75,000$ Audit cost/year 300,000$ IPO size 125,000,000$ Input area: Underwriter fee 7.00% Legal fees and expenses 1,800,000$ SEC registration fees 13,500$ Output area: Underwriter […]

SOLUTION Chapter 9 Waterways Continuing Problem WCP9 (a) Sales budget WATERWAYS CORPORATION Sales Budget For the First Quarter of 2017 First Quarter January February March Quarter Expected unit sales 113,000 112,500 116,000 341,500 (b) Production budget WATERWAYS CORPORATION Production Budget […]

4. Friday, December 29 is the ex-dividend day. Remember not to count January 1 because it is a holiday, and the exchanges are closed. Anyone who buys the stock before December 29 is entitled to the dividend, assuming they do […]

CHAPTER 9 SOLUTIONS TO PROBLEMS: SET B PROBLEM 9-1B MERCER FARM SUPPLY COMPANY Sales Budget For the Six Months Ending June 30, 2017 Quarter Six Months 1 2 Expected unit sales ………………. 40,000 50,000 90,000 MERCER FARM SUPPLY COMPANY Production […]

5. The implication is that the company should not retain earnings unless the ROE of the new project is greater than the shareholders required return on equity. This is an intuitive result. Shareholders want the company to retain earnings for […]

CHAPTER 9 SOLUTIONS TO EXERCISES—SET B EXERCISE 9-1B JARGON ELECTRONICS INC. Sales Budget For the Six Months Ending June 30, 2017 Quarter 1 Quarter 2 Six Months Product Units Selling Price Total Sales Units Selling Price Total Sales Units Selling […]

6. Homemade leverage refers to the use of borrowing on the personal level as opposed to the corporate level. 7. One answer is that the right to file for bankruptcy is a valuable asset, and the financial manager acts in […]