Sachs Brands’ defined benefit pension plan specifies annual retirement benefits equal to 1.6% × service year’s ×final year’s salary, payable at the end of each year. Angela Davenport was hired by Sachs at the beginning of 2010 and is expected to retire at the end of 2044 after 35 years’ service. Her retirement is expected to span 18 years. Davenport’s salary is $90,000 at the end of 2024 and the company’s actuary projects her salary to be $240,000 at retirement. The actuary’s discount rate is 7%.At the beginning of 2025, changing economic conditions caused the actuary to reassess the applicable discount rate. It was decided that 8% is the appropriate rate. Required: Calculate the effect of the change in the assumed discount rate on the PBO at the beginning of 2025 with respect to Davenport.
> The CARES Act allows some companies to (1) save more taxes and (2) obtain those savings faster. How does the Act enable those benefits?
> George Young Industries (GYI) acquired industrial robots at the beginning of 2022 and added them to the company’s assembly process. During 2024, management became aware that the $1 million cost of the equipment was inadvertently recorde
> What are the primary ways in which the CARES Act changed accounting for the tax effects of NOLs?
> You are internal auditor for Shannon Supplies, Inc., and are reviewing the company’s preliminary financial statements. The statements, prepared after making the adjusting entries, but before closing entries for the year ended December 3
> Conrad Playground Supply underwent a restructuring in 2024. The company conducted a thorough internal audit, during which the following facts were discovered. The audit occurred during 2024 before any adjusting entries or closing entries are prepared. a.
> Suppose the Environmental Protection Agency is in the process of investigating Ozone Ruination Limited for possible environmental damage but has not proposed a penalty as of December 31, 2020, the company’s fiscal year-end. Describe the two-step process
> Whaley Distributors is a wholesale distributor of electronic components. Financial statements for the years ended December 31, 2022 and 2023, reported the following amounts and subtotals ($ in millions): In 2024, the following situations occurred or came
> What transactions are included in income from continuing operations? Briefly explain why it is important to segregate income from continuing operations from other transactions affecting net income.
> Funseth Farms Inc. purchased a tractor in 2021 at a cost of $30,000. The tractor was sold for $3,000 in 2024. Depreciation recorded through the disposal date totaled $26,000. (1) Prepare the journal entry to record the sale. (2) Now assume the tractor wa
> Williams-Santana Inc. is a manufacturer of high-tech industrial parts that was started in 2009 by two talented engineers with little business training. In 2024, the company was acquired by one of its major customers. As part of an internal audit, the fol
> What are the three main types of sustainability disclosures? How can those disclosures provide information to shareholders and stakeholders?
> Williams-Santana Inc. is a manufacturer of high-tech industrial parts that was started in 2012 by two talented engineers with little business training. In 2024, the company was acquired by one of its major customers. As part of an internal audit, the fol
> How does IFRS differ from current U.S. GAAP with respect to accounting for impairments?
> The Collins Corporation purchased office equipment at the beginning of 2022 and capitalized a cost of $2,000,000. This cost included the following expenditures: The company estimated an eight-year useful life for the equipment. No residual value is antic
> Answer Q 12–26 but assume that the investment is classified as AFS.
> You have been hired as the new controller for the Ralston Company. Shortly after joining the company in 2024, you discover the following errors related to the 2022 and 2023 financial statements: a. Inventory at 12/31/2022 was understated by $6,000. b. In
> When market rates of interest rise after a fixed-rate security is purchased, the value of the now-below-market, fixed-interest payments declines, so the market value of the investment falls. How would that drop in fair value be reflected in the investmen
> The Cecil-Booker Vending Company changed its method of valuing inventory from the average cost method to the FIFO cost method at the beginning of 2024. At December 31, 2023, inventories were $120,000 (average cost basis) and were $124,000 a year earlier.
> Northwest Carburetor Company established a fund in 2021 to accumulate money for a new plant scheduled for construction in 2024. How should this special purpose fund be reported in Northwest’s balance sheet?
> Refer to the situation described in BE 11–2. Calculate depreciation expense for 2024 and 2025 using sum-of-theyears’- digits, assuming the equipment was purchased on (1) January 1, 2024, and (2) March 31, 2024.
> Comparative Statements of Retained Earnings for Renderer Corporation were reported as follows for the fiscal years ending December 31, 2022, 2023, and 2024. No preferred stock or potential common shares were outstanding during any of the periods shown.
> Superior Company owns 40% of the outstanding stock of Bernard Company. During 2024, Bernard paid a $100,000 cash dividend on its common shares. What effect did this dividend have on Superior’s 2024 financial statements?
> On December 31, 2023, Ainsworth, Inc., had 600 million shares of common stock outstanding. Twenty million shares of 8%, $100 par value cumulative, nonconvertible preferred stock were sold on January 2, 2024. On April 30, 2024, Ainsworth purchased 30 mill
> LCI Cable Company grants 1 million performance stock options to key executives at January 1, 2024. The options entitle executives to receive 1 million of LCI $1 par common shares, subject to the achievement of specific financial goals over the next four
> If merchandise inventory is understated at the end of 2023, and the error is not discovered, how will net income be affected in 2024?
> JBL Aircraft manufactures and distributes aircraft parts and supplies. Employees are offered a variety of share-based compensation plans. Under its nonqualified stock option plan, JBL granted options to key officers on January 1, 2024. The options permit
> Southeast Steel, Inc., changed from the FIFO inventory costing method to the LIFO method during 2024. How would this change likely be reported in the 2024 comparative financial statements?
> Walters Audio Visual, Inc., offers a stock option plan to its regional managers. On January 1, 2024, 40 million options were granted for 40 million $1 par common shares. The exercise price is the market price on the grant date, $8 per share. Options cann
> Sugar baker Designs Inc. changed from the FIFO inventory costing method to the average cost method during 2024. Which items from the 2023 financial statements should be restated on the basis of the average cost method when reported in the 2024 comparativ
> Refer to the situation described in P 19–2. Assume Partner prepares its financial statements using International Financial Reporting Standards (IFRS). Required: Determine the compensation expense related to the options to be recorded each year, 2024–202
> Refer to the situation described in BE 11–2. Assume the equipment was purchased on March 31, 2024, instead of January 1. Calculate depreciation expense for 2024 and 2025 using each of the following depreciation methods: (1) straight line, (2) double-decl
> Refer to the situation described in P 19–2. Assume Partner measures the fair value of all options on January 1, 2024, to be $4.50 per option using a single weighted-average expected life of the options assumption. Required: 1. Determine the compensation
> Partner Brands is a calendar-year firm with operations in several countries. As part of its executive compensation plan, at January 1, 2024, the company issued 400,000 executive stock options permitting executives to buy 400,000 shares of Partner stock f
> Witter House is a calendar-year firm with 300 million common shares outstanding throughout 2024 and 2025. As part of its executive compensation plan, at January 1, 2023, the company had issued 30 million executive stock options permitting executives to b
> At January 1, 2024, M. E. Gaynor Corporation had outstanding the following securities: The following additional information is available: ∙ On September 1, 2024, M. E. Gaynor sold 72 million additional shares of common stock. â
> On January 1, 2024, Daewoo Industries had outstanding 440,000 common shares ($l par) that originally sold for $20 per share, and 4,000 shares of 10% cumulative preferred stock ($100 par), convertible into 40,000 common shares. On October 1, 2024, Daewoo
> At December 31, 2024, the financial statements of Hollingsworth Industries included the following: Required: Compute basic and diluted EPS for the year ended December 31, 2024.
> Al capture Company reported a net income of $150,000 in 2024. The weighted-average number of common shares outstanding for 2024 was 40,000. The average stock price for 2024 was $33. Assume an income tax rate of 25%. Required: For each of the following i
> Information from the financial statements of Park-Rao Industries included the following at December 31, 2024: Park-Rao’s net income for the year ended December 31, 2024, is $520 million. The income tax rate is 25%. Park-Raoâ€
> On December 31, 2023, Dow Steel Corporation had 600,000 shares of common stock and 300,000 shares of 8%, noncumulative, nonconvertible preferred stock issued and outstanding. Dow issued a 4% common stock dividend on May 15 and paid cash dividends of $400
> On December 31, 2023, Dow Steel Corporation had 600,000 shares of common stock and 300,000 shares of 8%, noncumulative, nonconvertible preferred stock issued and outstanding. ∙ Dow issued a 4% common stock dividend on May 15 and paid ca
> Refer to the situation described in BE 11–20. Assume that SCC’s fair value of $40 million approximates fair value less costs to sell and that the present value of SCC’s estimated future cash flows is $41 million. If Web- Helper prepares its financial sta
> On December 31, 2023, Dow Steel Corporation had 600,000 shares of common stock and 300,000 shares of 8%, noncumulative, nonconvertible preferred stock issued and outstanding. ∙ Dow issued a 4% common stock dividend on May 15 and paid cash dividends of $4
> Comparative Statements of Shareholders’ Equity for Locke Inter technology Corporation were reported as follows for the fiscal years ending December 31, 2022, 2023, and 2024. Required: Infer from the statements the events and transactio
> On October 15, 2023, the board of directors of Martinez Materials Corporation approved a stock option plan for key executives. On January 1, 2024, 20 million stock options were granted, exercisable for 20 million shares of Martinez’s $1 par common stock.
> U.S. Metallurgical Inc. reported the following balances in its financial statements and disclosure notes at December 31, 2023. U.S.M.’s actuary determined that 2024 service cost is $60,000. Both the expected and actual rate of return on
> A partially completed pension spreadsheet showing the relationships among the elements that constitute Carney, Inc.’s defined benefit pension plan follows. Six years earlier, Carney revised its pension formula and recalculated benefits
> Herring Wholesale Company has a defined benefit pension plan. On January 1, 2024, the following pension related data were available The rate of return on plan assets during 2024 was 9%, although it was expected to be 10%. The actuary revised assumptions
> Stanley-Morgan Industries adopted a defined benefit pension plan on April 12, 2024. The provisions of the plan were not made retroactive to prior years. A local bank, engaged as trustee for the plan assets, expects plan assets to earn a 10% rate of retur
> Sachs Brands’ defined benefit pension plan specifies annual retirement benefits equal to 1.6% × service year’s × final year’s salary, payable at the end of each year. Angela Davenport was hired by Sachs at the beginning of 2010 and is expected to retire
> Sachs Brands’ defined benefit pension plan specifies annual retirement benefits equal to 1.6% × service year’s × final year’s salary, payable at the end of each year. Angela Davenport was hired by Sachs at the beginning of 2010 and is expected to retire
> Refer to the situation described in BE 11–20. Assume that the fair value of SCC is $44 million instead of $40 million. What amount of impairment loss should WebHelper report in its income statement?
> Air France–KLM (AF), a Franco-Dutch company, prepares its financial statements according to International Financial Reporting Standards. AF’s financial statements and disclosure notes for the year ended December 31, 2019, are available in Connect. This m
> Target Corporation prepares its financial statements according to U.S. GAAP. Target’s financial statements and disclosure notes for the year ended February 1, 2020, are available under the Investor Relations link at the company’s website (www.target.com)
> Use Solver to create Answer and Sensitivity Reports for question 17 at the end of Chapter 2 and answer the following questions: a. How much excess wiring and testing capacity exists in the optimal solution? b. What is the company’s total profit if it has
> Use the multiplicative seasonal technique for stationary data to model the data. Use Solver to determine the optimal values of a and b. a. What are the optimal values of a and b? b. Prepare a line graph comparing the predictions from this method against
> The CitruSun Corporation ships frozen orange juice concentrate from processing plants in Eustis and Clermont to distributors in Miami, Orlando, and Tallahassee. Each plant can produce 20 tons of concentrate each week. The company has just received orders
> Use the additive seasonal technique for stationary data to model the data. Use Solver to determine the optimal values of a and b. a. What are the optimal values of a and b? b. Prepare a line graph comparing the predictions from this method against the or
> Implement the following LP model in a spreadsheet. Use Solver to solve the problem and create a Sensitivity Report. Use this information to answer the following questions: a. What is the smallest value the objective function coefficient for X3 can assum
> Implement the following LP model in a spreadsheet. Use Solver to solve the problem and create a Sensitivity Report. Use this information to answer the following questions: a. Which of the constraints are binding at the optimal solution? b. Is the optima
> Consider the following constraint, where S is a slack variable: 3X1 1 4X2 2 S 5 12 a. What was the original constraint before the slack variable was included? b. What value of S is associated with each of the following points: i) X1 = 5, X2 = 0 ii) X1
> Consider the following constraint, where S is a slack variable: a. What was the original constraint before the slack variable was included? b. What value of S is associated with each of the following points: i) X1 = 2, X2 = 2 ii) X1 = 8, X2 = 0 iii) X
> Consider the following LP problem: a. Use slack variables to rewrite this problem so that all its constraints are equal-to constraints. b. Identify the different sets of basic variables that might be used to obtain a solution to the problem. c. Of the p
> Implement the following LP problem in a spreadsheet. Use Solver to solve the problem and create a Sensitivity Report. Use this information to answer the following questions: a. What range of values can the objective function coefficient for variable X1
> Computers and word processors notwithstanding, the art of writing by hand recently entered a boom era. People are buying fountain pens again, and mechanical pencils are becoming more popular than ever. Joe Script, the president and CEO of Parket Sisters,
> Consider the following LP problem: a. Use slack variables to rewrite this problem so that all its constraints are equal-to constraints. b. Identify the different sets of basic variables that might be used to obtain a solution to the problem. c. Of the p
> Consider the following LP problem: MAX: 4X1 1 2X2 Subject to: 2X1 1 4X2 # 20 3X1 1 5X2 # 15 X1, X2 $ 0 a. Use slack variables to rewrite this problem so that all its constraints are equal-to constraints. b. Identify the different sets of basic variable
> Refer to question 42 at the end of Chapter 3 and answer the following questions: a. Create a Spider Plot to summarize what happens to the optimal total profit as the total storage capacity increases from 300,000 cf to 400,000 cf in 10,000 cf increments.
> Use Solver to create a Sensitivity Report for question 37 at the end of Chapter 3 and answer the following questions. a. Is the solution degenerate? b. Is the solution unique? c. How much can the profit per ton on commodity one decrease before the optima
> Use Solver to create a Sensitivity Report for question 35 at the end of Chapter 3 and answer the following questions. a. Is the solution degenerate? b. Is the solution unique? c. How much should the recycler be willing to pay to acquire more cardboard? d
> CaroliNet is a satellite TV service provider for residential customers in the state of North Carolina. The company is planning to expand and offer satellite TV service in South Carolina as well. The company wants to establish a set of service hubs throug
> Use Solver to create a Sensitivity Report for question 34 at the end of Chapter 3 and answer the following questions: a. Is the solution unique? b. If Sentry wants to increase their production capacity in order to meet more of the demand for their produc
> The Embassy Lodge hotel chain wants to compare its brand efficiency to that of its major competitors using DEA. Embassy collected the following data reported in industry trade publications. Embassy views customers’ perceptions of satisf
> Use Solver to create a Sensitivity Report for question 33 at the end of Chapter 3 and answer the following questions. a. Is the solution degenerate? b. Is the solution unique? c. Use a Solver Plot to determine the maximum price the Pelletier Corporation
> Fidelity Savings & Loans (FS&L) operates a number of banking facilities throughout the Southeastern United States. The officers of FS&L wants to analyze the efficiency of the various branch offices using DEA. The following data has been selec
> Hamilton & Jovanovich (H&J) is a global investment company, providing start-up capital to promising new ventures around the world. Due to the nature of its business, H&J holds funds in a variety of countries and converts between currencies as
> Use Solver to create a Sensitivity Report for question 24 at the end of Chapter 3 and answer the following questions: a. Are there alternate optimal solutions to this problem? Explain. b. What is the highest possible octane rating for regular gasoline, a
> Winter Wear house operates a clothing store specializing in ski apparel. Given the seasonal nature of their business, there is often somewhat of an imbalance between when bills must be paid for inventory purchased and when the goods are actually sold and
> Use Solver to create a Sensitivity Report for question 29 at the end of Chapter 3 and answer the following questions. a. What is the maximum level profit that can be achieved for this problem? b. Are there alternate optimal solutions to this problem? If
> The CFO for Eagle Beach Wear and Gift Shop is in the process of planning for the company’s cash flows for the next six months. The following table summarizes the expected accounts receivables and planned payments for each of these month
> Refer to the previous question. Suppose location 1 has 15 cars available rather than 16. Create a Sensitivity Report for this problem and answer the following questions: a. Is the optimal solution unique? How can you tell? b. According to the Sensitivity
> Companies are often interested in segmenting their customers to better target specific product offerings to meet specific customer needs. The file CustomerData.xlsx that accompanies this book contains data on 198 customers for an online retailer. Specifi
> The accounting firm of Coopers & Andersen is conducting a benchmarking survey to assess the satisfaction level of their clients versus clients served by competing accounting firms. The clients are divided into four groups: A total of 4,000 companies
> Use Solver to create a Sensitivity Report for question 18 at the end of Chapter 3 and answer the following questions: a. Is the optimal solution unique? How can you tell? b. Which location is receiving the fewest cars? c. Suppose a particular car at loc
> A regional quality inspector for Green Roof Inns has 16 properties she must visit next month. The driving time from one property to the next is proportional to the straight-line distance between the properties. The X and Y coordinate for each property ar
> Refer to the previous question. Suppose the investments available to the Merrits have the following levels of risk associated with them. If the Merrits want the weighted average risk level of their investments to not exceed 4, how much money will they
> So how am I going to spend this money,” thought Martha Lentz as he sat staring at the pictures and posters of manatees around his office. An avid environmentalist, Martha is the president of “Friends of the Manatees&ac
> Use Solver to create a Sensitivity Report for question 17 at the end of Chapter 3 and answer the following questions: a. Is the solution degenerate? b. Is the solution unique? c. Explain the signs of the reduced costs for each of the decision variables.
> During the execution of the B&B algorithm, many candidate problems are likely to be generated and awaiting further analysis. In the B&B example in this chapter, we chose the next candidate problem to analyze in a rather arbitrary way. What other, more st
> Francois and Camille Merrit recently inherited a substantial amount of money from a deceased relative. They want to use part of this money to establish an account to pay for their daughter’s college education. Their daughter, Lisa, will
> Use Solver to create a Sensitivity Report for question 16 at the end of Chapter 3 and answer the following questions: a. Is the solution degenerate? b. Is the solution unique? c. Suppose the profit per pallet of Tahoe panels went down by $40. Would the
> Solve the following problem manually using the B&B algorithm. You can use the computer to solve the individual problems generated. Create a branch-and-bound tree to display the steps you complete
> Jack Potts recently won $1,000,000 in Las Vegas and is trying to determine how to invest his winnings. He has narrowed his decision down to five investments, which are summarized in the following table. If Jack invests $1 in investment A at the beginnin
> Use Solver to create a Sensitivity Report for question 15 at the end of Chapter 3 and answer the following questions: a. How much would electric trimmers have to cost in order for the company to consider purchasing these items rather than making them? b.
> Max Gooding is tired of losing money in his office’s weekly football pool and has decided to try to do something about it. Figure 8.44 (and file Football.xlsx that accompanies this book) contains a listing of the teams in the Imaginary
> A natural gas trading company wants to develop an optimal trading plan for the next 10 days. The following table summarizes the estimated prices (per thousand cubic feet [cf]) at which the company can buy and sell natural gas during this time. The compan
> Use Solver to create a Sensitivity Report for question 14 at the end of Chapter 3 and answer the following questions: a. Is the solution degenerate? b. Does the problem have alternate optimal solutions? c. If Sable University wanted 1,000 more maroon shi
> Brue Lee is the Vice President of Purchasing for the consumer electronics division of the Major Electric Corporation (MEC). The company recently introduced a new type of video camcorder that has taken the market by storm. Although Brue is pleased with th
> Alaskan Railroad is an independent, stand-alone railroad operation not connected to any other rail service in North America. As a result, rail shipments between Alaska and the rest of North America must be shipped by truck for thousands of miles or loade
> The Dot Com Corporation is implementing a pension plan for its employees. The company intends to start funding the plan with a deposit of $50,000 on January 1, 2022. It plans to invest an additional $12,000 one year later, and continue making additional
