MANAGERIAL ACCOUNTING (LL)W/CONNECT
16th Edition
ISBN: 9781260489293
Author: Garrison
Publisher: MCG
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Chapter 2, Problem 9E
To determine
The
To determine
The factors rejecting CFO arguments shall be determined.
To determine
The Arguments supporting the CFO shall be determined.
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41
A company issues a $1,000 par value bond at 100. The bonds have one warrant attached to buy one share of common stock for $30 within the next five years. At the time, the stock is trading at $60, and the
warrant can be traded separately from the bond. The bond alone trades at 99 without the warrant. Once issued, the market price for the warrant is $31.
How much of the bond sale proceeds is allocated to the warrant if the proportional method is used?
$29.13
$30.07
$29.41
$30.36
35
A company had 100,000 shares of stock outstanding and repurchased 20,000 of those shares as treasury stock.
What is a valid reason for this action?
To increase dividends to improve market perception
To increase shares available for stock compensation
To increase shareholders' equity
To increase assets to avoid a takeover
14 A company reported total assets of $300,000 as of December 31, 2018, and $500,000 as of December 31, 2019. Net sales revenue was $200,000 for the year ending December 31, 2019. Net income was
$20,000 for the year ending December 31, 2019.
What was the company's return on assets for the year ending December 31, 2019?
0000
4%
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○ 10%
50%
Chapter 2 Solutions
MANAGERIAL ACCOUNTING (LL)W/CONNECT
Ch. 2.A - EXERCISE 2A-1 Activity-Based Absorption Costing...Ch. 2.A - EXERCISE 2A-2 Activity-Based Absorption Costing as...Ch. 2.A - EXERCISE 2A-3 Activity-Based Absorption Costing as...Ch. 2.A - PROBLEM 2A-4 Activity-Based Absorption Costing as...Ch. 2.A - Prob. 5PCh. 2.A -
CASE 2A-6 Activity-Based Absorption Costing and...Ch. 2.B - EXERCISE 2B-1 Overhead Rate Based on Capacity...Ch. 2.B - EXERCISE 2B-2 Overhead Rates and Capacity Issues...Ch. 2.B - Prob. 3PCh. 2.B - Prob. 4C
Ch. 2 - Prob. 1QCh. 2 - What is absorption costing?Ch. 2 - What is normal costing?Ch. 2 - How is the unit product cost of a job calculated?
Ch. 2 - Explain the four-step process used to compute a...Ch. 2 - What is the purpose of the job cost sheet in a...Ch. 2 - Explain why some production costs must be assigned...Ch. 2 - Why do companies use predetermined overhead rates...Ch. 2 - What factors should be considered in selecting an...Ch. 2 - If a company fully allocates all of its overhead...Ch. 2 - Would you expect the amount of applied overhead...Ch. 2 - Prob. 12QCh. 2 - What is a plantwide overhead rate? Whyare multiple...Ch. 2 - This Excel worksheet relates to the Dickson...Ch. 2 - This Excel worksheet relates to the Dickson...Ch. 2 - Prob. 3AECh. 2 - This Excel worksheet relates to the Dickson...Ch. 2 - Prob. 1F15Ch. 2 - Prob. 2F15Ch. 2 - Prob. 3F15Ch. 2 - Prob. 4F15Ch. 2 - Prob. 5F15Ch. 2 - Prob. 6F15Ch. 2 - Prob. 7F15Ch. 2 - Prob. 8F15Ch. 2 - Prob. 9F15Ch. 2 - Prob. 10F15Ch. 2 - Prob. 11F15Ch. 2 - Sweeten Company had no jobs in progress at the...Ch. 2 - Prob. 13F15Ch. 2 - Prob. 14F15Ch. 2 - Prob. 15F15Ch. 2 - EXERCISE 2-1 Compute a Predetermined Overhead Rate...Ch. 2 - Prob. 2ECh. 2 - EXERCISE 2–3 Computing Total Job Costs and Unit...Ch. 2 - EXERCISE 24 Computing Total Job Costs and Unit...Ch. 2 - EXERCISE 2-5 Computing Total Job Costs and Unit...Ch. 2 - Prob. 6ECh. 2 - EXERCISE 2-7 Job-Order Costing; Working Backwards...Ch. 2 - EXERCISE 2-8 Applying Overhead Cost; Computing...Ch. 2 - EXERCISE 2–9 Job-Order Costing and Decision Making...Ch. 2 - Prob. 10ECh. 2 - Prob. 11ECh. 2 - Prob. 12ECh. 2 - EXERCISE 2—13 Departmental Predetermined Overhead...Ch. 2 - EXERCISE 214 Job-Orders Costing for a Service...Ch. 2 - Prob. 15ECh. 2 - PROBLEM 2—16 Plantwide Predetermined Overhead...Ch. 2 - PROBLEM 217 Plantwide and Departmental...Ch. 2 - Prob. 18PCh. 2 - Prob. 19PCh. 2 - Prob. 20PCh. 2 - PROBLEM 2-21 Plant wide Versus Multiple...Ch. 2 - CASE 2-22 Plantwide versus Departmental Overhead...
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- 29 A company's income statement reveals the following amounts related to the company's operations for the most recent year: .Net sales revenue: $5,000,000 • Interest expense: $60,000 Income tax expense: $80,000 ⚫ Net income: $400,000 What was the company's times-interest-earned ratio for the year? 4.33 6.75 7.67 9.00arrow_forward20 A bank will only continue a credit line for one of its small business customers if the small business can keep an acid-test greater than 1. The company's reported current accounts are as follows: ⚫ Cash: $6,000 • Accounts receivable (net): $19,000 • Inventory: $8,000 • Short-term investment: $4,500 ⚫ Current liabilities: $17,000 Which decision should the bank make? Close the credit line because the acid-test ratio is 0.45. Close the credit line because the acid-test ratio is 0.58. Maintain the credit line because the acid-test ratio is 2.21. Maintain the credit line because the acid-test ratio is 1.74.arrow_forward00 16.67% 25.00% 400.00% 600.00% 13 A company reported net sales revenue of $6,000,000 for the year ending December 31, 2018, and $8,000,000 for the year ending December 31, 2019. Net income was $1,000,000 for the year ending December 31, 2018, and $2,000,000 for the year ending December 31, 2019. What was the company's profit margin on sales for the year ending December 31, 2019?arrow_forward
- 25 A municipality issues bonds to fund a new school capital improvement project. The municipality wants to manage its cash flow and therefore needs the bonds to mature over a period of many years. Which type of bonds should be issued? Coupon Term Serial Unsecured 0000arrow_forward12 A company reported the following financial information: As of December 31, 2018 total assets of $10,000,000 net sales revenue of $6,000,000 .Net income of $1,000,000 As of December 31, 2019 total assets of $14,000,000 net sales revenue of $8,000,000 .net income of $2,000,000 What was the company's return on assets for the year ending December 31, 2019? O 8.33% O 14.29% O 16.67% O 66.67%arrow_forward46 Which two circumstances lead to an impairment? Choose 2 answers. A significant change in legal factors that decreases an asset's value A future net cash flow that is significantly greater than anticipated The presence of significantly fewer competitors than anticipated A significant excess of cost expectations for constructing an asset A significant increase in the expected market value of an asset A significant reduction in the expected cost of acquiring an assetarrow_forward
- 28 A company's most recent balance sheet depicts the following amounts: Current assets: $400,000 Long-term assets: $500,000 Current liabilities: $100,000 Long-term liabilities: $200,000 Stockholders' equity: $600,000 What is the company's debt-to-assets ratio, rounded to the nearest percent? 25% 33% 40% 50%arrow_forward32 A company is preparing financial statements immediately after the holders of convertible preferred stock convert their shares to common stock. There has been no change to the company's redeemable preferred stock. What is the effect of the conversion? An increase in liabilities on the balance sheet A decrease in earnings per share A gain if the dollar amounts of preferred stock and additional paid-in capital in excess of par exceed the number of common shares times the par value of the common stock A loss if the dollar amounts of preferred stock and additional paid-in capital in excess of par are less than the number of common shares times the par value of the common stockarrow_forward39 A company issues a convertible bond with a face value of $1,000 for $1,100. What information should be included in the journal entry for issuance? Debit Premium on Bonds Payable for $100 Credit Discount on Bonds Payable for $100 Debit Discount on Bonds Payable for $100 O Credit Premium on Bonds Payable for $100arrow_forward
- 23 A company issues at par 10-year term bonds with a par value of $500,000, dated January 1 and bearing interest at an annual rate of 5% payable semiannually on January 1 and July 1. Which journal entry is recorded on January 1? Debit Cash for $500,000; Credit Bonds Payable for $500,000 Debit Bonds Payable for $500,000; Credit Cash for $500,000 Debit Cash for $500,000; Credit Bonds Receivable for $500,000 Debit Bonds Receivable for $500,000; Credit Cash for $500,000arrow_forward8 A company purchases an asset on January 1 for $100,000 with a 10-year life. The asset has a salvage value of $5,000, resulting in a depreciation basis of $95,000. At the end of the asset's useful life, the company disposes of the asset. Which amount is available from depreciation to contribute to the purchase of a replacement asset? $0 $5,000 $95,000 $100,000arrow_forward44 Corporation A offers to issue additional shares of common stock in five years to Corporation B. The issuance of stock is contingent on Corporation B achieving minimum earnings. Corporation B meets the earnings requirement in the first quarter of Year Two. Which action will Corporation A take once the contingent earnings have been achieved? O Corporation A will not include the number of contingent shares in its earnings per share calculation. Corporation A will report its basic earnings per share and issue the shares to Corporation B. O Corporation A will include the number of contingent shares in its earnings per share calculation. Corporation A will include a proportionate number of shares of the contingent shares in its earnings per share calculation.arrow_forward
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