Question: Upton Company has current assets equal to $

> Kim went to Ling’s Market to pick up a few items for dinner. It was a stormy day, and the wind had blown water through the market’s door each time it opened. As Kim entered through the door, she slipped and fell in the rainwater that had accumulated on t

> Can a manufacturer be held liable to any person who suffers an injury proximately caused by the manufacturer’s negligently made product?

> White Plains Coat & Apron Co. and Cintas Corp. are competitors. White Plains had five-year exclusive contracts with some of its customers. As a result of Cintas’s soliciting of business, dozens of White Plains’ customers breached their contracts and ente

> Charles Robison, an employee of West Star Transportation, Inc., was ordered to cover an unevenly loaded flatbed trailer with a 150-pound tarpaulin. The load included uncrated equipment and pallet crates of different heights, about thirteen feet off the g

> Ronald Rawls and Zabian Bailey were in an auto accident in Bridgeport, Connecticut. Bailey rear-ended Rawls at a stoplight. Evidence showed it was more likely than not that Bailey failed to apply his brakes in time to avoid the collision, failed to turn

> At the Weatherford Hotel in Flagstaff, Arizona, in Room 59, a balcony extends across thirty inches of the room’s only window, leaving a twelve-inch gap with a three-story drop to the concrete below. A sign prohibits smoking in the room but invites guests

> While living in her home country of Tanzania, Sophia Kiwanuka signed an employment contract with Anne Margareth Bakilana, a Tanzanian living in Washington, D.C. Kiwanuka traveled to the United States to work as a babysitter and maid in Bakilana’s house.

> Medtronic, Inc., is a medical technology company that competes for customers with St. Jude Medical S.C., Inc. James Hughes worked for Medtronic as a sales manager. His contract prohibited him from working for a competitor for one year after leaving Medtr

> Sharon Yeagle was an assistant to the vice president of student affairs at Virginia Polytechnic Institute and State University (Virginia Tech). As part of her duties, Yeagle helped students participate in the Governor’s Fellows Program. The Collegiate Ti

> Donald and Gloria Bowden hosted a cookout at their home in South Carolina, inviting mostly business acquaintances. Justin Parks, who was nineteen years old, attended the party. Alcoholic beverages were available to all of the guests, even those who, like

> Suppose that a state imposes a higher tax on out-of-state companies doing business in the state than it imposes on in-state companies. Is this a violation of equal protection if the only reason for the tax is to protect the local firms from out-of-state

> Susan Calles lived with her four daughters, Amanda (age 11), Victoria (age 5), and Jenna and Jillian (age 3). In March 1998, Calles bought an Aim N Flame utility lighter, which she stored on the top shelf of her kitchen cabinet. A trigger can ignite the

> Bensing Company manufactures generic drugs for the treatment of heart disease. A federal law requires generic drug makers to use labels that are identical to the labels on brand-name versions of the drugs. Hunter Rothfus purchased Bensing’s generic drugs

> Medicis Pharmaceutical Corp. makes Solodyn, a prescription oral antibiotic. Medicis warns physicians that “autoimmune syndromes, including drug- induced lupus-like syndrome,” may be associated with use of the drug. Amanda Watts had chronic acne. Her phys

> While driving on Interstate 40 in North Carolina, Carroll Jett became distracted by a texting system in the cab of his tractor-trailer truck. He smashed into several vehicles that were slowed or stopped in front of him, injuring Barbara and Michael Durke

> Five-year-old Cheyenne Stark was riding in the backseat of her parents’ Ford Taurus. Cheyenne was not sitting in a booster seat. Instead, she was using a seatbelt designed by Ford, but was wearing the shoulder belt behind her back. The car was involved i

> David Dobrovolny bought a new Ford F-350 pickup truck. A year later, the truck spontaneously caught fire in Dobrovolny’s driveway. The truck was destroyed, but no other property was damaged, and no one was injured. Dobrovolny filed a suit in a Nebraska s

> Yun Tung Chow tried to unclog a floor drain in the kitchen of the restaurant where he worked. He used a drain cleaner called Lewis Red Devil Lye that contained crystalline sodium hydroxide. The product label said that users should wear eye protection, pu

> Brandon Stroud was driving a golf car made by Textron, Inc. The golf car did not have lights, but Textron did not warn against using it on public roads at night. When Stroud attempted to cross a road at 8:30 p.m., his golf car was struck by a vehicle dri

> Jason Clark, an experienced hunter, bought a paintball gun. Clark practiced with the gun and knew how to screw in the carbon dioxide cartridge, pump the gun, and use its safety and trigger. Although Clark was aware that he could purchase protective eyewe

> Carmen buys a television set manufactured by AKI Electronics. She is going on vacation, so she takes the set to her mother’s house for her mother to use. Because the set is defective, it explodes, causing considerable damage to her mother’s house. Carmen

> Does Winstead have an ethical duty to comply with the defendants’ discovery request? Discuss.

> Most states and the federal government permit inmates to grow 1/2-inch beards. Would the policies followed at these institutions be relevant in determining the need for a beard restriction in this case? Discuss.

> Rim Corporation makes tire rims that it sells to Superior Vehicles, Inc., which installs them on cars. One set of rims is defective, which an inspection would reveal. Superior does not inspect the rims. The car with the defective rims is sold to Town Aut

> If Bad Frog had sought to use the label to market toys instead of beer, would the court’s ruling likely have been the same? Explain your answer.

> Should U.S. courts, and particularly the United States Supreme Court, look to other nations’ laws for guidance when deciding important issues—including those involving rights granted by the Constitution? If so, what impact might this have on their decisi

> When should a statement made on social media be considered a true threat?

> Thomas worked in the nonmilitary operations of a large firm that produced both military and nonmilitary goods. When the company discontinued the production of nonmilitary goods, Thomas was transferred to the plant producing military equipment. Thomas lef

> Aric Toll owns and manages the Balboa Island Village Inn, a restaurant and bar in Newport Beach, California. Anne Lemen lives across from the Inn. Lemen complained to the authorities about the Inn’s customers, whom she called “drunks” and “whores.” Lemen

> Robert Brown applied for admission to the University of Kansas School of Law. Brown answered “no” to questions on the application asking if he had a criminal history and acknowledged that a false answer constituted “cause for . . . dismissal.” In fact,

> Abbott Laboratories licensed SmithKline Beecham Corp. to market an Abbott human immunodeficiency virus (HIV) drug in conjunction with one of SmithKline’s drugs. Abbott then increased the price of its drug fourfold, forcing SmithKline to increase its pric

> Mark Wooden sent e-mail to an alderwoman for the city of St. Louis. Attached was a nineteen-minute audio that compared her to the biblical character, Jezebel—she was a “bitch in the Sixth Ward,” spending too much time with the rich and powerful and too l

> In 2001, Puerto Rico enacted a law that requires specific labels on cement sold in Puerto Rico and imposes fines for any violations of these requirements. The law prohibits the sale or distribution of cement manufactured outside Puerto Rico that does not

> Judge James DeWeese hung a poster in his courtroom showing the Ten Commandments. The American Civil Liberties Union (ACLU) filed a suit, alleging that the poster violated the establishment clause. DeWeese responded that his purpose was not to promote re

> Shalene Kolchek bought a Great Lakes Spa from Val Porter, a dealer who was selling spas at the state fair. After Kolchek signed the contract, Porter handed her the manufacturer’s paperwork and arranged for the spa to be delivered and installed for her. T

> Yuhu manufactures cell phones and is developing a new model with a feature (aptly named Don’t Drink and Dial) that prevents the phone from dialing an owner-defined list of phone numbers between the hours of midnight and 6:00 A.M. The new phone model has

> Integrity Accounting Firm provides various financial services to organizations. Integrity has decided to price its jobs at the total variable costs of the job plus 15%. The job for a medium sized dance club client included the following costs: Direct ma

> Consider each of the following independent scenarios: a. Terrin Belson, plant manager for the laser printer factory of Compugear Inc., brushed his hair back and sighed. December had been a bad month. Two machines had broken down, and some factory product

> Blaylock Company provided the following information: Required: 1. Calculate the change in cash. 2. Explain the role of the change in cash flow in the statement of cash flows.

> During the last 2 years of operations, Barnes Company had the following transactions: a. Purchased a new plant for $5,000,000. b. Issued bonds with a 6-year maturity date for $2,000,000. c. Reported profits of $7,000,000 for the most recent year. d. Sol

> Paxton Company provided the following income statement for last year: Sales …………………………………………………………………….. $ 87,021,000 Cost of goods sold ………………………………………………….. (62,138,249) Gross margin …………………………………………………………. $ 24,882,751 Operating expenses ………………………………

> What is the accounting rate of return? Compute the ARR for an investment that requires an initial outlay of $300,000 and promises an average net income of $100,000.

> East Mullett Manufacturing earned operating income last year as shown in the following income statement: Sales ……………………………………………………………….. $3,750,000 Cost of goods sold ……………………………………………… 2,250,000 Gross margin …………………………………………………… $1,500,000 Selling and

> What is the payback period? Compute the payback period for an investment requiring an initial outlay of $80,000 with expected annual cash inflows of $30,000.

> Jeremy Costa, owner of Costa Cabinets Inc., is preparing a bid on a job that requires $1,800 of direct materials, $1,600 of direct labor, and $800 of overhead. Jeremy normally applies a standard markup based on cost of goods sold to arrive at an initial

> Rebert Inc. showed the following balances for last year: Rebert’s net income for last year was $3,182,000. Also, assume that the dividends paid to common stockholders for last year were $2,600,000 and that the market price per share

> Juroe Company provided the following income statement for last year: Sales …………………………………………………………..……… $11,300,000 Cost of goods sold ………………………………………………… 3,000,000 Gross margin …………………………………………….……… $ 8,300,000 Operating expenses ……………………………………………… 3

> Juroe Company provided the following income statement for last year: Sales …………………………………………………………..……… $11,300,000 Cost of goods sold ………………………………………………… 3,000,000 Gross margin …………………………………………….……… $ 8,300,000 Operating expenses ……………………………………………… 3

> Tsao Company provided the following income statement for last year: Sales ………………………………………………………. $16,250,000 Cost of goods sold ………………………………………. 6,500,000 Gross margin ………………………………………….. $ 9,750,000 Operating expenses ……………………………………. 3,750,000 Operating

> The income statement, statement of retained earnings, and balance sheet for Somerville Company are as follows: Somerville Company Statement of Retained Earnings For the Year Ended December 31, 2014 Balance, beginning of period …&acir

> Kurena Company provided the following information on one of its factories: Maximum units produced in a quarter: ………….………… 180,000 units Actual units produced in a quarter: …………………………..... 112,500 units Hours of cell production labor in a quarter: …………..

> Ventris Company found that one of its manufacturing cells had actual cycle time of 15 minutes per unit. The theoretical cycle time for this cell was 9 minutes per unit. Required: 1. Calculate the amount of processing time per unit and the amount of nonp

> East Mullett Manufacturing earned operating income last year as shown in the following income statement: Sales ……………………………………………………………….. $3,750,000 Cost of goods sold ……………………………………………… 2,250,000 Gross margin …………………………………………………… $1,500,000 Selling and

> Ernst Company’s balance sheet shows total liabilities of $32,500,000, total stockholders’ equity of $8,125,000, and total assets of $40,625,000. Required: Round answers to two decimal places. 1. Calculate the debt ratio. 2. Calculate the debt-to-equity

> Blaylock Company earned net income of $900,000 in 2014. Blaylock provided the following information: Required: Compute the financing cash flows for the current year.

> Blaylock Company provided the following partial comparative balance sheets and the income statement for 2014. Required: Compute operating cash flows using the indirect method.

> Randel Company produces a variety of gardening tools and aids. The company is examining the possibility of investing in a new production system that will reduce the costs of the current system. The new system will require a cash investment of $3,455,400

> Eyring Company invested $7,500,000 in a new product line. The life cycle of the product is projected to be 7 years with the following net income stream: $300,000, $300,000, $500,000, $900,000, $1,000,000, $2,100,000, and $1,200,000. Required: Calculate

> Washington Company has two divisions: the Adams Division and the Jefferson Division. The following information pertains to last year’s results: Washington’s actual cost of capital was 12%. In addition, Washington Co

> Ventura Manufacturing is considering an investment in a new automated manufacturing system. The new system requires an investment of $3,000,000 and either has (a) even cash flows of $750,000 per year or (b) the following expected annual cash flows: $375,

> Falconer Company had net (after-tax) income last year of $12,375,400 and total capital employed of $111,754,000. Falconer’s actual cost of capital was 9%. Required: 1. Calculate the EVA for Falconer Company. 2. CONCEPTUAL CONNECTION Is Falconer creating

> The Tuxedo Division of Shamus O’Toole Company had operating income last year of $152,250,000 and average operating assets of $2,175,000,000. O’Toole’s minimum acceptable rate of return is 8%. (Round all answers to two decimal places.) Required: 1. Calcu

> Data follow for the Construction Division of D. Jack Inc.: (Note: Round all answers to two decimal places.) Required: 1. Compute the margin and turnover ratios for each year. 2. Compute the ROI for the Construction Division for each year.

> Discuss the differences between centralized and decentralized decision making.

> Tidwell Company experienced the following during 2013: a. Sold preferred stock for $480,000. b. Declared dividends of $150,000 payable on March 1, 2014. c. Borrowed $575,000 from bank on a 2-year note. d. Purchased $80,000 of its own common stock to hold

> During 2013, Shorts Company had the following transactions: a. Purchased $200,000 of 10-year bonds issued by Makenzie Inc. b. Acquired land valued at $70,000 in exchange for machinery. c. Sold equipment with original cost of $540,000 for $330,000; accumu

> During the year, Hepworth Company earned a net income of $61,725. Beginning and ending balances for the year for selected accounts are as follows: There were no financing or investing activities for the year. The above balances reflect all of the adjus

> Jarem Company showed $189,000 in prepaid rent on December 31, 2013. On December 31, 2014, the balance in the prepaid rent account was $226,800. Rent expense for 2014 was $472,500. Required: 1. What amount of cash was paid for rent in 2014? 2. CONCEPTUAL

> Stillwater Designs is a private company and outsources production of its Kicker speaker lines. Suppose that Stillwater Designs provided you the following transactions. a. Sold a warehouse for $750,000. b. Reported a profit of $100,000. c. Retired long-te

> The income statement for Piura Merchandising Corporation is as follows: Other information is as follows: a. Accounts payable decreased by $20,000 during the year. b. Accounts receivable increased by $20,000. c. All wages were paid at the beginning of t

> What are the advantages in using worksheets when preparing a statement of cash flows?

> Explain how the statement of cash flows can be prepared using the worksheet approach.

> Roberts Company has provided the following partial comparative balance sheets and the income statement for 2014. Required: Compute operating cash flows using the direct method.

> What is the Balanced Scorecard?

> During the year, Blaylock Company sold equipment with a book value of $280,000 for $380,000 (original purchase cost of $480,000). New equipment was purchased. Blaylock provided the following comparative balance sheets: Required: Calculate the investing

> Fred Jackson, president and owner of Bailey Company, is concerned about the company’s ability to obtain a loan from a major bank. The loan is a key factor in the firm’s plan to expand its operations. Demand for the firm’s product is high—too high for the

> Fabre Company, Patterson Company’s competitor, is considering the same investments as Patterson. Refer to the data in Problem 14-47 above. Assume that Fabre’s cost of capital is 14%. data in Problem 14-47: Patterson

> Patterson Company is considering two competing investments. The first is for a standard piece of production equipment. The second is for computer-aided manufacturing (CAM) equipment. The investment and after-tax operating cash flows follow: Patterson u

> New marge Products Inc. is evaluating a new design for one of its manufacturing processes. The new design will eliminate the production of a toxic solid residue. The initial cost of the system is estimated at $860,000 and includes computerized equipment,

> ‘‘I know that it’s the thing to do,’’ insisted Pamela Kincaid, vice president of finance for Colgate Manufacturing. ‘‘If we are going to be competitive, we need to build this completely automated plant.’’ ‘‘I’m not so sure,’’ replied Bill Thomas, CEO of

> Leak am Company’s product engineering department has developed a new product that has a 3 year life cycle. Production of the product requires development of a new process that requires a current $100,000 capital outlay. The $100,000 will be raised by iss

> Kildare Medical Center, a for-profit hospital, has three investment opportunities: (1) adding a wing for in-patient treatment of substance abuse, (2) adding a pathology laboratory, and (3) expanding the outpatient surgery wing. The initial investments an

> Briefly explain three common transfer pricing policies used by organizations.

> Stillwater Designs has been rebuilding Model 100, Model 120, and Model 150 Kicker subwoofers that were returned for warranty action. Customers returning the subwoofers receive a new replacement. The warranty returns are then rebuilt and resold (as second

> Julianna Cardenas, owner of Baker Company, was approached by a local dealer of air conditioning units. The dealer proposed replacing Baker’s old cooling system with a modern, more efficient system. The cost of the new system was quoted at $339,000, but i

> Emery Communications Company is considering the production and marketing of a communications system that will increase the efficiency of messaging for small businesses or branch offices of large companies. Each unit hooked into the system is assigned a m

> Jonathan Butler, process engineer, knows that the acceptance of a new process design will depend on its economic feasibility. The new process is designed to improve environmental performance. On the negative side, the process design requires new equipmen

> Skiba Company is thinking about two different modifications to its current manufacturing process. The after-tax cash flows associated with the two investments follow: Skiba’s cost of capital is 10%. Required: 1. Compute the NPV and th

> Each of the following scenarios are independent. Assume that all cash flows are after-tax cash flows. a. Thomas Company is investing $120,000 in a project that will yield a uniform series of cash inflows over the next 4 years. b. Video Repair has decided

> Wise Company is considering an investment that requires an outlay of $600,000 and promises an after-tax cash inflow 1 year from now of $693,000. The company’s cost of capital is 10%. Required: 1. Break the $693,000 future cash inflow into three componen

> All scenarios are independent of all other scenarios. Assume that all cash flows are after-tax cash flows. a. Kambry Day is considering investing in one of the following two projects. Either project will require an investment of $20,000. The expected cas

> Booth Company wants to buy a numerically controlled (NC) machine to be used in producing specially machined parts for manufacturers of tractors. The outlay required is $960,000. The NC equipment will last 5 years with no expected salvage value. The expec

> Each of the following scenarios is independent. Assume that all cash flows are after-tax cash flows. a. Cuenca Company is considering the purchase of new equipment that will speed up the process for producing flash drives. The equipment will cost $7,200,

> What are the five steps for preparing the statement of cash flows? What is the purpose of each step?

> Each of the following scenarios is independent. Assume that all cash flows are after-tax cash flows. a. Southward Manufacturing is considering the purchase of a new welding system. The cash benefits will be $400,000 per year. The system costs $2,250,000

> Explain what a post audit is and how it can provide useful input for future capital investment decisions, especially those involving advanced technology.

> Weeden Inc. intends to invest in one of two competing types of computer-aided manufacturing equipment: CAM X and CAM Y. Both CAM X and CAM Y models have a project life of 10 years. The purchase price of the CAM X model is $2,400,000, and it has a net ann

> Manny Carson, certified management accountant and controller of Wake man Enterprises, has been given permission to acquire a new computer and software for the company’s accounting system. The capital investment analysis showed an NPV of $100,000. However

> Eunice Company produces two products from a joint process. Joint costs are $70,000 for one batch, which yields 1,000 liters of germain and 4,000 liters of hastain. Germain can be sold at the split-off point for $24 or be processed further, into geraiten,

> Norton Company produces two products (Juno and Hera) that use the same material input. Juno uses two pounds of the material for every unit produced, and Hera uses five pounds. Currently, Norton has 16,000 pounds of the material in inventory. All of the m