Business
Mortar Corporation acquired 80 percent ownership of Granite Company on January 1, 20X7, for $173,000. At that date, the fair value of the noncontrolling interest was $43,250. The trial balances for the two companies on December 31, 20X7, included the following amounts:Item Mortar Corporation Granite Company Debit Credit Debit CreditCash $38,000 $25,000 Accounts Receivable 50,000 55,000 Inventory 240,000 100,000 Land 80,000 20,000 Buildings and Equipment 500,000 150,000 Investment in Granite Company Stock 202,000 Cost of Goods Sold 500,000 250,000 Depreciation Expense 25,000 15,000 Other Expenses 75,000 75,000 Dividends Declared 50,000 20,000 Accumulated Depreciation $155,000 $75,000 Accounts Payable 70,000 35,000Mortgages Payable 200,000 50,000Common Stock 300,000 50,000Retained Earnings 290,000 100,00Sales 700,000 400,00Income from Subsidiary 45,000 $1,760,000 $1,760,000 $710,000 $710,000 Additional Information: a. On January 1, 20X7, Granite reported net assets with a book value of $150,000 and a fair value of $191,250. b. Accumulated depreciation on Buildings and Equipment was $60,000 on the acquisition date. c. Granite's depreciable assets had an estimated economic life of 11 years on the date of combination. d. The difference between fair value and book value of Granite's net assets is related entirely to buildings and equipment. Required:Give all journal entries recorded by Mortar related to its investment in Granite during 20X7.
Given the following information regarding an income producing property, determine the internal rate of return (IRR) using levered cash flows. Expected Holding Period: 5 years; 1 year Expected NOI: $89,100; 2 year Expected NOI: $91,773; 3 year Expected NOI: $94,526; 4 year Expected NOI: $97,362; 5 year Expected NOI: $100,283; Debt Service in each of the next five years: $58,444; Current Market Value: $885,000; Required equity investment: $221,250; Net Sale Proceeds of Property at end of year 5: $974,700; Remaining Mortgage Balance at end of year 5: $631,026.A) 10.6%B) 12.2%C) 22.9%D) 33.4%
Case ScenarioOver the past four years, the LSS organization, a nonprofit organization headquartered in Minneapolis, MN, has become renowned nationally for its Camp Noah project. Following floods, tornadoes or other weather emergencies, children lose their daily routine, their schools and oftentimes their homes. Parents are often stressed and unavailable during emergencies, and children have few resources to help them understand their situation. In Camp Noah, volunteers with skills in child psychology and counseling meet in a two day support group environment with children in flood ravaged areas. They encourage the children to share their stories and develop important resiliency skills and learn how to cope emotionally with the disaster.Due to the need for such services, LSS has developed a training system that lets them partner with resource organizations located near flood or tornado areas. They have partnered with many local organizations around the U.S. to train, equip and empower volunteers to staff local camps attended by children during their summer vacation. LSS also provides pre-packaged Camp Noah supplies that range from workbooks, crayons and puppets to a quilt for each child.Recently, powerful rainstorms in southeastern France triggered flash flooding that displaced more than 1000 families, and left 200,000 people without electricity for more than two weeks. City officials in France called the LSS Director of Camp Noah Services, Chris Walker, and asked if she could provide training and equip 20 volunteers in southeastern France to deliver the Camp Noah curriculum to up to 500 children. The French officials have asked that a decision to proceed be made within 2 weeks, and that the training and they want the equipment be delivered 6 weeks after the decision is made. Chris Walker wants to help but isnt sure how to start. Currently, Camp Noah supplies are all written in English, and the counselor training documents are only written in English as well. The floods occurred in an area of France that has few English speakers.You are a contract employee who has been engaged to help LSS because you speak French fluently and because you are an expert, experienced project manager with great interpersonal skills. Your job is to assist the director, Chris Walker, during project initiation. If the project is approved, you may be asked to lead the remainder of the project as well. You and Chris have been in meetings together all day discussing the opportunity for a French Camp Noah. Youve been listening very carefully and asking dozens of questions about the potential effort. Now, youre ready to get started and put your considerable project management skills and knowledge to work.Questions based on above scenario and answer need to be 1/2 page long:1. Is this (or will this be) a project or operations? Justify your choice.2. What process group is this project currently in? How do you know?3. As an experienced project manager, you are aware that analyzing the environment in which a project operates is critically important. Select two (2) OPA and two (2) EEF that you believe are important to understand for this project. Apply these to the case scenario and justify why the four items you selected are important. 4. Once the decision is made to proceed with the project, Chris Walker, the director, will need to select a project manager. You know that LSS is a strong-matrix org. What does this mean in terms of how the project will be conducted and the role of the project manager? (5. You and Chris Walker, the director, will work on trying to define what project success will look like as you define the project objectives. What should you keep in mind about the process of writing objectives? Why are good statements of project objectives important to project success?
Assume that you are part of the accounting team for Logan Digital. The company currently expects to sell 362 units for total revenue of $16,300 each month. Logan Digital estimates direct materials costs of $3,150, direct labor costs of $4,200, variable overhead costs of $2,100, and variable selling and administrative costs of $1,050. Fixed costs of $4,800 are also expected, which includes fixed overhead and selling and administrative costs. Using this information, complete the contribution margin income statement shown below.Logan Digital is examining cost behavior patterns. Your recommendation is to first determine the break-even point in units. First, calculate the contribution margin (CM) per unit (rounded to the nearest dollar).Next, complete the formula below to determine the break-even units.Total Fixed Costs / Contribution Margin per Unit = UnitsA profit-volume graph helps managers to visualize the relationship between profits and units sold. The data for Logan Digital has been used to construct the profit-volume graph below. The purple points (diamond symbols) plot the profit line. The operating loss is the shaded area bordered by the red points (cross symbols). The operating profit is the area bounded by the green points (triangle symbols). Graph the correct profit-value graph.APPLY THE CONCEPTS: Effect of Changes to Sales Price, Variable Costs and Fixed CostsNow consider each of the following scenarios for Logan Digital. Calculate the contribution margin (CM) per unit, rounded to nearest dollar, and the new break-even point in units, rounded to the nearest whole unit, for each scenario separately.Scenario 1 Scenario 2 Scenario 3Logan will dispose of a machine in the factory. The depreciation on that equipment is $500 per month. After some extensive market research, Logan has determined that a sales price increase of $2 per unit will not affect the sales volume and will be effective immediately. Logan has been experiencing quality problems with a materials supplier. Changing suppliers will improve the quality of the product but will cause direct materials costs to increase by $1 per unit.
The balance sheet for Appalachian Corporation at the end of the current year includes the following: Bonds payable, 6% $5,000,000 6% Preferred stock, $100 par 1,000,000 Common stock, $10 par 2,000,000 Net income was $565,000 and income tax expense for the current year amounted to $285,000. Cash dividends paid on common stock were $200,000, and the common stock was selling for $28 per share at the end of the year. There were no ownership changes during the year. Determine each of the following:a. Number of times bond interest charges are earned;b. Number of times preferred dividends are earned;c. Earnings per share on common stock;d. Price-earnings ratio;e. Dividends per share of common stock; andf. Dividend yield.