Home Products Inc. (HPI) entered into a contract on June 30, Year 1, to buy 750,000 pounds of aluminum siding on September 30, Year 1, at a price of $18.25 a pound The company's troasurer simultaneously took a short position in a forward contact by agreeing to sell 750,000 pounds of aluminum at a price of $16 50 a pound on September 30, Year 1. Assume the following prices for aluminum siding and the aluminum forward contract. June 30 Year 1 September 30 Year 1 Aluminum siding / lb. $18.25 $17.95 Aluminum forward/Ib $16.50 $16.32 Based on the above what is the earnings effect of the aluminum siding purchase commitment with the corresponding fair value hedge at the September 30, Year 1 end?
Q: A company deposited $14,500 into an investment fund at the beginning of every quarter for 7 years. I...
A: The accumulated value of any fund is equal to the sum of future value of all the deposits made durin...
Q: A nuclear power plant would generate electricity worth $50 million per year for this year and the ne...
A:
Q: What principal amount is equivalent to a withdrawal of 10,600 on the 2nd year, 4,000 on the 4th yea...
A: Let the principal amount = P Withdrawal in year 2 (W2) = 10600 W4 = 4000 Deposit in year 5 (D5) = 54...
Q: A 5-year project will require an investment of $100 million. This comprises of plant and machinery w...
A: " Hi, Thanks for the Question. Since you asked multiple sub parts questions, we will answer first th...
Q: What is the impact of annuity dues in consideration to business matter?
A: Annuity Due: It is the fixed amount of payment that is due immediately at the beginning of each peri...
Q: Darnell receives a portion of his income from his holdings of interest-bearing U.S. government bonds...
A:
Q: Suppose you were to receive a perpetual annual payment (perpetuity) of €640 per year. In the followi...
A: Present Value: It represents the present worth of the future cash flow stream and is computed by di...
Q: The following cash flows have been identified by Company A for a potential capital investment projec...
A: Present value of cash inflows = [Year 1 cash flow/(1 + r)1] + [Year 2 cash flow/(1 + r)2] ...
Q: Given the cash flow below, select the standard notations that used to find the present worth i- 996 ...
A: For the given cash flow diagram the present worth is given as ,
Q: A fast food restaurant feels they could increase their profits by introducing ice cream. The equipme...
A: Given: Year Particulars Amount 0 Initial investment -$250,000 1 Cash inflows $125,000 2 Cas...
Q: An installment contract for the purchase of a car requires payments of $346.89 at the end of each mo...
A: Present Value: The present value is the value of cash flow stream or the fixed lump sum amount at t...
Q: Beginning Inventory $11,500 Dairy Alternative Purchases (+) $1,000 Produce Purchases (+) $500 Protei...
A: In the given chart we are given the information regarding the inventory.
Q: A 5-year project will require an investment of $100 million. This comprises of plant and machinery ...
A: Cost of equity refers to the return that is required if an investment is made either by a company or...
Q: 1. The following are exercises in future (terminal) values: a. At the end of three years, how much i...
A: “Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only on...
Q: Francorp has a break-even point of $175,000. Ifactual sales are $225,000 then what is the margin of ...
A: The margin of safety is an investment idea that states that an investor should only buy assets when ...
Q: A pump is required for 10 years at a remote location. The pump can be driven by an electric motor if...
A: Equivalent uniform annual cost or EAC is the annual cost which includes the cost of ownership, opera...
Q: Suppose Huron Corp. must make a $50 million pension payment every year for the next 5 years. Huron d...
A: With the help of the given information we have to prepare a table.
Q: What is the difference (term of investment) between Money Market, Bond Market, Equity Market, Foreig...
A: Financial markets encompass any marketplace where securities are traded, such as the stock market, b...
Q: Appendix The directors of Mylo Ltd are currently considering two mutually exclusive investment proj...
A: Net present value is the sum of discounted cash flows with the required rate of return. One should g...
Q: 16. A student borrows $58,600 at 6.0% compounded monthly. Find the monthly payment and total interes...
A: 16 ) In this question we are given, PV = $58600 r = 6.0 % t = 25 years n = 25 × 12 = 300 months i = ...
Q: v Details Piease upload your hand written solution (pdf) to Canvas. You are creating a price-weighte...
A: Market value weight First, the market value of each asset in index is calculated by per asset price ...
Q: What is disbursal rate
A: Disbursal rate is an important concept in the realm of financial markets and in the realm of fintech...
Q: You have 3 projects with the following cash flows: Year 1 4 Project 1 Project 2 Project 3 - $150 $18...
A: Net present Value or NPV is the present value of all the expected cashflows. NPV is an cashflow that...
Q: As a Project Engineering had been tasked to make an analysis and to recommend to your company on the...
A: Concept ROI means return of income. It is one of performance measure used to evaluate efficiency on ...
Q: What is Debt Service?
A: Step 1 The amount of money required to pay interest on the loan with the principal over some time is...
Q: Consider a loan of $7700 at 6.8% compounded semiannually, with 18 semiannual payments. Find the foll...
A: Amortization schedule refers a schedule of loan amortization which shows the periodic loan payments,...
Q: A couple borrows $300,000 at an APR of 4.8% compounded monthly on a 30-year mortgage with monthly pa...
A: Given, P = $ 300,000 r = 4.8% = 4.812×100= 0.004 M = $1574 n = 30 years × 12 = 360
Q: S00 $2,400 $2,200 $2,000 $1,00 $1.600 $1,400 $1,200 $1,000 Monthly Wage Rate
A: Equilibrium level is the level where the demand and supply is equal to each other. It is the balance...
Q: Trade off Theory ates that Firms with higher operating risk should use less debt Firms should use eq...
A: We know that Debt is the cheaper source of finance, if any firm who is not using debt and have only ...
Q: Gasoline Eclectic First Cost $3400 $6000 Annual operating cost $1200 S750 Annual maintenance $300 $5...
A: Present worth of alternative is very important while selecting and comparing different alternatives ...
Q: Calculate the future value of end-of-quarter payments of $5,000 made for 5 years into an investment ...
A: The value of current payment or upcoming flow of payments at any future date when flow of payment te...
Q: May deposits PhP 20,000 into a fund at the beginning of each year for 10 years. At the end of 15 yea...
A: This is a classic case of an annuity due, annuity perpetuity, annuity deferrals. First, we will comp...
Q: Charlie has a project for which he had determined a present worth of $56,822. He now has to calculat...
A: The value of payment or receipt to be executed in future at present time is called the Present Value...
Q: Show the cash flow diagram and solutions. A bank give a certain interest rate compounded semiannual...
A: Here, Present value = Php 7,000 Future value at the end of 12 years = Php28,000 Number of years = 12...
Q: You currently have $50,000 in a bank account that pays interest at 6% p.a. compounding monthly. You...
A: The withdrawals are in the form of an annuity due. This is because they are taking place at the begi...
Q: Current market price of ABC stock is $77 ABC Stock price after 30 days =$80 ABC Stock price after 45...
A: A) Price or face value of call option as on today = MAXIMUM,{0, CURRENT MARKET PRICE(CPM)-EXCISE ...
Q: The price of land near a beach is expected to increase 8 % yearly. If the current price RM 13 per sq...
A: Current price (CP) = RM 13 Annual increase (g) = 8% Period (n) = 5 Years
Q: Edward made equal deposits at the beginning of every 3 months into an RRSP. At the end of 6 years, t...
A: Effective annual rate = (1 + Monthly interest rate)^12 - 1 = (1 + 3.75%/12)^12 - 1 =0.03815129256 o...
Q: A B Initial investment outlay ($) 200,000 275,000 Freight Charges ($) 20,000 30,000 Set Up c...
A: the given problem is comparison of project based on the various method such as profit comparison met...
Q: Refer to the graph below. It shows 2 indifference curves: for person A and for person B. Which perso...
A: In this question , The Indifference curve (IC) shows the various bundles of two goods that the consu...
Q: Jenny is planning to deposit ₱17,000.00 Quezon Metropolitan Bank is offering 7.5% compound...
A: Compound interest is also called as interest on the amount of interest. In other words this is the a...
Q: For a sum of money invested at 11.5% compounded for 5 years state the following values. i) The num...
A: Compound interest is when you reinvest the interest earned back so in the next period we earn even m...
Q: ompute for the simple interest earned and maturity value, if their money will be invested in 3 years...
A: Interest can be defined as an amount of money a lender receives for lending money. There ar two type...
Q: Which fluctuate more--long-term or short-term interest rates? Why?
A: An investor's debt to a borrower is represented by a bond, which may be a fixed-income investment (t...
Q: An item will need replacing in 6 years from now at a cost of ₱128,000.00. How much should the owner ...
A: Future value required (FV) = P128,000 Period = 6 years Quarterly periods (n) = 6*4 = 24 Interest ra...
Q: What is the difference (financial instruments traded) between Money Market, Bond Market, Equity Mark...
A: Financial markets encompass any marketplace where securities are traded, such as the stock market, b...
Q: For each of the companies described here, would you expect it to have a low, medium, or high dividen...
A: As you have asked a question with multiple parts, we will solve the first 3 parts as per the policy ...
Q: LEIC plc plans to acquire PEAR Plc. The timeline is as follows. Day 1- Market values for shares are ...
A: According to the Efficient Market Hypothesis (EMH), current stock prices adjust fast to new public i...
Q: A 5-year project will require an investment of $100 million. This comprises of plant and machinery w...
A: Hi, since you have posted a question with multiple sub-parts, we will answer the first three as per ...
Q: why is knowledge of the money market important for carrying out value maximizing working capital sho...
A: The money market is important for the organizations and the government to keep a smooth cash flow op...
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- Steele Corp. purchases equipment for $30,000. Regarding the purchase, Steele paid shipping of $1,200, paid installation fees of $2,750, pays annual maintenance cost of $250, and received a 10% discount on sales price. Determine the acquisition cost of the equipment.On March 1, 2019, Elkhart enters into a new contract to build a specialized warehouse for 7 million. The promise to transfer the warehouse is determined to be a performance obligation. The contract states that if the warehouse is usable by November 30, 2019, Elkhart will receive a bonus of 600,000. For every week after November 30 that the warehouse is not usable, the bonus will decrease by 150,000. Elkhart provides the following completion schedule: Required: 1. Assume that Elkhart uses the expected value approach. What amount should Elkhart use for the transaction price? 2. Assume that Elkhart uses the most likely amount approach. What amount should Elkhart use for the transaction price? 3. Next Level What is the purpose of assessing whether a constraint on the variable consideration exists?On January 1, 2019, Mopps Corp. agrees to provide Conklin Company 3 years of cleaning and janitorial services. The contract sets the price at 12,000 per year, which is the normal standalone price that Mopps charges. On December 31, 2020, Mopps and Conklin agree to modify the contract. Mopps reduces the fee for the third year to 10,000, and Conklin agrees to a 4-year extension that will extend services through December 31, 2024, at a price of 15,000 per year. At the time that the contract is modified, Mopps is charging other customers 13,500 for the cleaning and janitorial service. Required: Should Mopps and Conklin treat the modification as a separate contract? If so how should Mopps account for the contract modification on December 31, 2020? Support your opinion by discussing the application to this case of the factors that need to be considered for determining the accounting for contract modifications.
- Sandhill Company sells goods that cost $275,000 to Indigo Company for $440,000 on January 2, 2020. The sales price includes an installation fee, which is valued at $41,400. The fair value of the goods is $408,600. The goods were delivered on March 1, 2020. Installation is considered a separate performance obligation and was completed on June 18, 2020. Under the terms of the contract, Indigo Company pays Sandhill $260,000 upon delivery of the goods and the balance at the completion of the installation.Ivanhoe Company sells goods that cost $250,000 to Bridgeport Company for $400,000 on January 2, 2020. The sales price includes an installation fee, which is valued at $41,000. The fair value of the goods is $369,000. The goods were delivered on March 1, 2020. Installation is considered a separate performance obligation and was completed on June 18, 2020. Under the terms of the contract, Bridgeport Company pays Ivanhoe $261,000 upon delivery of the goods and the balance at the completion of the installation. Using the five-step process for revenue recognition, determine when and how much revenue would be recognized by Ivanhoe. Assume IFRS is followed. (Round percentage allocations to 2 decimal places, 15.25 and final answers to 0 decimal places, e.g. 5,275.) Performance Obligation When? How much? Deliver goods choose a transaction date January 2, 2020March 1, 2020June 18, 2020 $enter a…On January 1, 2020, Gordon Co. enters into a contract to sell a customer a wiring base and shelving unit that sits on the base in exchange for $3,000. The contract requires delivery of the base first but states that payment for the base will not be made until the shelving unit is delivered. Gordon identifies two performance obligations and allocates $1,200 of the transaction price to the wiring base and the remainder to the shelving unit. The cost of the wiring base is $700; the shelves have a cost of $320. Instructions a. Prepare the journal entry on January 1, 2020, for Gordon. b. Prepare the journal entry on February 5, 2020, for Gordon when the wiring base is delivered to the customer. c. Prepare the journal entry on February 25, 2020, for Gordon when the shelving unit is delivered to the customer and Gordon receives full payment.
- Sunland Company sells goods that cost $300,000 to Marigold Company for $400,000 on January 2, 2020. The sales price includes an installation fee, which is valued at $36,900. The fair value of the goods is $373,100. The goods were delivered on March 1, 2020. Installation is considered a separate performance obligation and was completed on June 18, 2020. Under the terms of the contract, Marigold Company pays Sunland $254,000 upon delivery of the goods and the balance at the completion of the installation. Using the five-step process for revenue recognition, determine when and how much revenue would be recognized by Sunland. Assume IFRS is followed. (Round percentage allocations to 2 decimal places, 15.25 and final answers to 0 decimal places, e.g. 5,275.) Performance Obligation When? How much? Deliver goods choose a transaction date January 2, 2020March 1, 2020June 18, 2020 $enter a dollar…Johnson Inc. enters into a $300,000 contract for the purchase of customized equipment with Builder Inc. The construction of the equipment is expected to take two years. Johnson Inc. owns the work in process during the two-year period but will not take possession of the equipment until completed. The contractor will bill Johnson monthly for performance completed to date. After year-one, Builder Inc. incurred costs of $120,000 and expects remaining costs to be $108,000. Builder Inc. has billed Johnson $150,000 in total for the year. Johnson has paid $135,000 to Builder Inc. Determine the amount of revenue and expenses that Builder Inc. should recognize in the first year of the contract. a. Revenue Expenses $157,895 $120,000 b. Revenue Expenses $150,000 $114,000 c. Revenue Expenses $78,947 $120,000 d. Revenue Expenses $0 $0 e. Revenue Expenses $150,000 $120,000Brilliant Company sold a franchise to sell its products for P5,000,000 on January 1, 2021. The initial fee is payable P500,000 upon signing of the contract and the balance in 5 equal installments every December 31, evidenced by a 12% promissory note. The agreement provides that the franchisor will assist in the location of site, supervision of the building construction, project study or market survey, assistance in the acquisition of facilities, training and management of personnel, quality control, advertising and promotion. It was also agreed that the franchisee will pay a royalty fee equal to 5% of its average sales every calendar year. The franchise outlet was opened on May 1, 2021 and the average monthly sales of the franchisee is P100,000. The franchisor has incurred P1,500,000 related to the services required by the contract. 1. How much is the Initial Franchise Fee Revenue to be recognized in 2021? 2. How much is the Continuing Franchise Fee Revenue to be recognized in 2021? 3.…
- Oriole Company sells goods that cost $320,000 to Sheffield Company for $435,000 on January 2, 2020. The sales price includes an installation fee, which is valued at $35,600. The fair value of the goods is $409,400. The goods were delivered on March 1, 2020. Installation is considered a separate performance obligation and was completed on June 18, 2020. Under the terms of the contract, Sheffield Company pays Oriole $257,000 upon delivery of the goods and the balance at the completion of the installation. Questions in pictures.In 20x1, Metallica Co. enters into a construction contract with a customer. The transaction price in the contract is ₱1,200,000. At contract inception, Metallica Co. estimates a total contract cost of ₱944,000. The actual costs incurred in 20x1 are ₱590,000. The estimated cost to complete on December 31, 20x1 is ₱410,000. Progress billings during the year amount to ₱70,000, ₱60,000 of which is collected. At contract inception, Metallica Co. determines that its performance obligation in the contract is a single performance obligation that is satisfied over time. Metallica Co. uses the cost-to-cost method to measure its progress in the contract. How much is the profit recognized in 20x1? a. 118,000 c. 122,000 b. 120,800 d. 132,200On January 1, SaLow Company enters into a contract to provide custom-made equipment to ByHi Corporation for $100,000. The contract terms allow cancellation without penalty by either party at any time prior to delivery of the goods. The contract specifies a delivery date of March 15 but the equipment was not delivered until April 10. The contract required full payment within 30 days after delivery. When should revenue be recognized for this contract?