CHAPTER 21 Accounting for Leases ASSIGNMENT CLASSIFICATION TABLE (BY TOPIC) Topics Questions Brief Exercises Exercises Problems Concepts for Analysis *1. Rationale for leasing. 1‚ 2‚ 4 1‚ 2 *2. Lessees; classification of leases; accounting by lessees. 3‚ 5‚ 7‚ 8‚ 14 1‚ 2‚ 3‚ 4‚ 5 1‚ 2‚ 3‚ 5‚ 7‚ 8‚ 11‚ 12‚ 13‚ 14 1‚ 2‚ 3‚ 4‚ 6‚ 7‚ 8‚ 9‚ 11‚ 12‚ 14‚ 15‚ 16 1‚ 2‚ 3‚ 4‚ 5‚ 6 *3. Disclosure of leases. 19 2‚ 4‚ 5‚ 7‚ 8 2‚ 3‚ 5 *4. Lessors;
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1. List at least five reasons why people visit Web sites. • Learn about products or services that the company offers • Buying products or services that the company offers • Obtaining information about warranty‚ service‚ or repair policies for products purchased • Obtaining general company or organization information • Obtaining financial information for making an investment in the compnay or organization • Identifying the people that manage the organization • Obtaining contact information
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Chapter 1 The Financial Statements Short Exercises (5 min.) S 1-1 Computed amounts in boxes Total Assets = Total Liabilities + Stockholders’ Equity a. $300‚000 = $150‚000 + $150‚000 b. 280‚000 = 110‚000 + 170‚000 c. 210‚000 = 50‚000 + 160‚000 (5 min.) S 1-2 Ethics is a factor that should be included in every business and accounting decision‚ beyond the potential economic and legal consequences
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Mergers & Acquisitions Questions Q.3 The following are the details on two potential merger candidates‚ Northrop and Grumman‚ in 1993: Northrop Grumman Revenues $4‚400.00 $3‚125.00 Cost of Goods Sold (w/o Depreciation) 87.50% 89.00% Depreciation $200.00 $74.00 Tax Rate 35.00% 35.00% Working Capital 10% of Revenue 10% of Revenue Market Value of Equity $2‚000.00 $1‚300.00 Outstanding Debt $160.00 $250.00 Both firms are in steady state and are expected to grow 5% a year in the long term. Capital spending
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Solutions to Valuation Questions 1. Assume you expect a company’s net income to remain stable at $1‚100 for all future years‚ and you expect all earnings to be distributed to stockholders at the end of each year‚ so that common equity also remains stable for all future years (assumes clean surplus). Also‚ assume the company’s β = 1.5‚ the market risk premium is 4% and the 20-30 year yield on risk free treasury bonds is 5%. Finally‚ assume the company has 1‚000 shares of common stock outstanding.
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SOLUTIONS MANUAL CHAPTER 15 PUT AND CALL OPTIONS PROBLEMS Exercise (strike) price 1. A stock has an exercise (strike) price of $40. a. If the stock price goes to $41.50‚ is the exchange likely to add a new strike price? b. If the stock price goes to $42.75 is the exchange likely to add a new strike price? 15-1. a) No. For stocks over $25‚ the normal interval is $5‚ with a new strike price added at the halfway point or $42.50 (between $40 and $45). b) Yes‚ the stock price has equaled or exceeded
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Chapter 2 Auditing IT Governance Controls Review Questions 1. What is IT governance? Response: IT governance is a relatively new subset of corporate governance that focuses on the management and assessment of strategic IT resources. 2. What are the objectives of IT governance? Response: The key objectives of IT governance are to reduce risk and ensure that investments in IT resources add value to the corporation. 3. What is distributed data processing? Response: Distributed
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CHAPTER 17 PROCESS COSTING 17-1 Industries using process costing in their manufacturing area include chemical processing‚ oil refining‚ pharmaceuticals‚ plastics‚ brick and tile manufacturing‚ semiconductor chips‚ beverages‚ and breakfast cereals. 17-2 Process costing systems separate costs into cost categories according to the timing of when costs are introduced into the process. Often‚ only two cost classifications‚ direct materials and conversion costs‚ are necessary. Direct
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CHAPTER 7 CORPORATIONS: REORGANIZATIONS SOLUTIONS TO PROBLEM MATERIALS Status: Q/P Question/ Learning Present in Prior Problem Objective Topic Edition Edition 1 LO 1 IRS Letter Ruling Unchanged 1 2 LO 1 Reorganizations follow tax law Unchanged 2 3 LO 1 Types of reorganizations Unchanged 3 4 LO 2 Comparing like-kind exchange to corporate New reorganization 5 LO 2 Four-column template Unchanged 5 6 LO 1‚ 2‚ 3 Reorganization: tax attributes Unchanged 6 7
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Solutions for Review Problems of Chapter 14 1. a. Given the following diagram for a product‚ determine the quantity of each component required to assemble one unit of the finished product. b. Draw a tree diagram for the stapler: a. F: 2 J: 2 x 2 = 4 D: 2 x 4 = 8 G: 1 L: 1 x 2 = 2 J: 1 x 2 = 2 H: 1 A: 1 x 4 = 4 D: 1 x 2 = 2 Totals: F = 2; G = 1; H = 1; J = 6; D = 10; L = 2; A = 4 b. Stapler Top Assembly Base Assembly Cover Spring Slide Assembly Base Strike Pad Rubber Pad 2 Slide
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