Horngren's Financial & Managerial Accounting, The Managerial Chapters (6th Edition)
6th Edition
ISBN: 9780134486857
Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 26, Problem 1FC
1.
To determine
Explain whether the actions of person J are fraudulent and explain the reasons. Explain whether person J’s percentage of ownership would affect or not.
2.
To determine
Explain the steps that the bank could take to prevent person J’s fraudulent activities.
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
Mr. Smith acquired a property consisting of one acre of land and a two-story building five years ago for $100,000. He also obtained an $80,000 mortgage loan from ACE Bank to provide financing to complete the purchase. This year, Mr. Smith constructed another building on the property with his own funds at a cost of $20,000. Mr. Smith has decided after completing the building to approach Duce Bank to borrow and mortgage the new building with a $16,000 loan. Is Duce Bank likely to provide the $16,000 in financing? What other options may Mr. Smith have to consider?
Mr. Charles owns a private garbage dump. He has been asked that to avoid leaks that contaminate the groundwater, he must install a plastic protector. The landfill area is 7 km2 and the cost of handling the vapors is $ 1,000 per km2 and is paid for all land use. The installation cost of the protector is known to be $ 2,000,000. To recoup the investment in 5 years, Mr. Charles charged $ 50 for the delivery truck loads, $ 100 for the dump truck loads, and $ 200 for the compactor truck loads. It is also known that the monthly distribution has been estimated at 1,000 delivery truck loads, 200 dump truck loads and 500 compactor truck loads.
a) What internal rate of return did Mr. Charles obtain on his investment? to. Effective monthly and Effective annually
b) If the minimum attractive rate of return is 8% annual compound monthly cash for Mr. Charles's businesses, what can you recommend in this regard, support your answers?
taxpayer purchased a building for $250,000 for his business. Before beginning to use the property in
operations, the Taxpayer replaced the old air conditioning system with a new one at a cost of
$25,000. In addition, he removed the doors and windows and installed new doors and windows at a
cost of $40,000. Similarly, he hired a landscape gardener who changed the green areas around the
building with an investment of $3,000. Ultimately, the building was painted at a cost of $5,000.
Determine the starting base.
Select one:
a.
$315,000
b.
$275,000
C.
$318,000
d.
$323,000
Chapter 26 Solutions
Horngren's Financial & Managerial Accounting, The Managerial Chapters (6th Edition)
Ch. 26 - Match the following business activities to the...Ch. 26 - Match the following business activities to the...Ch. 26 - Prob. 3TICh. 26 - Prob. 4TICh. 26 - Prob. 5TICh. 26 - Match the following business activities to the...Ch. 26 - Prob. 7TICh. 26 - Prob. 8TICh. 26 - Prob. 9TICh. 26 - Based on your answers to the above questions,...
Ch. 26 - Prob. 11TICh. 26 - Prob. 12TICh. 26 - Prob. 13TICh. 26 - What is the NPV of the project?Ch. 26 - Prob. 15TICh. 26 - Prob. 16TICh. 26 - What is the second step of capital budgeting? a....Ch. 26 - Which of the following methods does not consider...Ch. 26 - Suppose Francine Dunkelbergs Sweets is considering...Ch. 26 - Your rich aunt has promised to give you 2,000 per...Ch. 26 - Prob. 5QCCh. 26 - Prob. 6QCCh. 26 - In computing the IRR on an expansion at Mountain...Ch. 26 - Prob. 8QCCh. 26 - Which of the following is the most reliable method...Ch. 26 - Prob. 10QCCh. 26 - Explain the difference between capital assets,...Ch. 26 - Describe the capital budgeting process.Ch. 26 - What is capital rationing?Ch. 26 - Prob. 4RQCh. 26 - Prob. 5RQCh. 26 - List some common cash outflows from capital...Ch. 26 - What is the payback method of analyzing capital...Ch. 26 - Prob. 8RQCh. 26 - Prob. 9RQCh. 26 - Prob. 10RQCh. 26 - What are some criticisms of the payback method?Ch. 26 - What is the accounting rate of return?Ch. 26 - How is ARR calculated?Ch. 26 - What is the decision rule for ARR?Ch. 26 - Prob. 15RQCh. 26 - What is an annuity? How does it differ from a lump...Ch. 26 - Prob. 17RQCh. 26 - Explain the difference between the present value...Ch. 26 - Prob. 19RQCh. 26 - Prob. 20RQCh. 26 - Prob. 21RQCh. 26 - Prob. 22RQCh. 26 - What is the decision rule for NPV?Ch. 26 - What is the profitability index? When is it used?Ch. 26 - What is the internal rate of return?Ch. 26 - Prob. 26RQCh. 26 - Prob. 27RQCh. 26 - What is the decision rule for IRR?Ch. 26 - Prob. 29RQCh. 26 - Why should both quantitative and qualitative...Ch. 26 - Review the following activities of the capital...Ch. 26 - Carter Company is considering three investment...Ch. 26 - Carter Company is considering three investment...Ch. 26 - Consider how Hunter Valley Snow Park Lodge could...Ch. 26 - Consider how Hunter Valley Snow Park Lodge could...Ch. 26 - Prob. 6SECh. 26 - Consider how Hunter Valley Snow Park Lodge could...Ch. 26 - Suppose Hunter Valley is deciding whether to...Ch. 26 - Prob. 9SECh. 26 - Prob. 10SECh. 26 - Prob. 11SECh. 26 - Refer to the Hunter Valley Snow Park Lodge...Ch. 26 - Consider how Hunter Valley Snow Park Lodge could...Ch. 26 - Prob. 14SECh. 26 - Prob. 15SECh. 26 - Match each capital budgeting method with its...Ch. 26 - Fill in each statement with the appropriate...Ch. 26 - Prob. 18ECh. 26 - Prob. 19ECh. 26 - Prob. 20ECh. 26 - Prob. 21ECh. 26 - Prob. 22ECh. 26 - Prob. 23ECh. 26 - Holmes Industries is deciding whether to automate...Ch. 26 - Use the NPV method to determine whether Hawkins...Ch. 26 - Refer to the data regarding Hawkins Products in...Ch. 26 - Hudson Manufacturing is considering three capital...Ch. 26 - Prob. 28ECh. 26 - You are planning for a very early retirement. You...Ch. 26 - Splash Nation is considering purchasing a water...Ch. 26 - Hill Company operates a chain of sandwich shops....Ch. 26 - Henderson Manufacturing, Inc. has a manufacturing...Ch. 26 - Hayes Company is considering two capital...Ch. 26 - You are planning for an early retirement. You...Ch. 26 - Water City is considering purchasing a water park...Ch. 26 - Howard Company operates a chain of sandwich shops....Ch. 26 - Hughes Manufacturing, Inc. has a manufacturing...Ch. 26 - Prob. 38BPCh. 26 - Prob. 39PCh. 26 - This problem continues the Piedmont Computer...Ch. 26 - Darren Dillard, majority stockholder and president...Ch. 26 - Prob. 1TIATCCh. 26 - Spencer Wilkes is the marketing manager at Darby...Ch. 26 - Prob. 1FCCh. 26 - Prob. 1CA
Knowledge Booster
Similar questions
- Ms. Brown purchased a property consisting of one acre of land and a building for $100,000 five years ago. She obtained an $80,000 mortgage loan from ABC Bank at that time. The building was very old and Ms. Brown has just had it torn down. She now wants to build a new building. Ms. Brown hopes to finance construction with ABC Bank and will call them soon to discussfinancing the new project. How will ABC Bank evaluate the possibility of making another loan to Ms. Brown?arrow_forwardRaul Martinas, a professor of languages at Eastern University, owns a small office building adjacent to the university campus. He acquired the property 10 years ago at a total cost of $559,000—that is, $52,000 for the land and $507,000 for the building. He has just received an offer from a realty company that wants to purchase the property; however, the property has been a good source of income over the years, and so Martinas is unsure whether he should keep it or sell it. His alternatives are as follows: a. Keep the property. Martinas’s accountant has kept careful records of the income realized from the property over the past 10 years. These records indicate the following annual revenues and expenses: Martinas makes a $12,675 mortgage payment each year on the property. The mortgage will be paid off in eight more years. He has been depreciating the building by the straight-line method, assuming a salvage value of $76,050 for the building, which he still thinks is an appropriate figure.…arrow_forwardYou are to refer to Kate Minimart operation below: Kate operates a minimart store located in a private estate. She invested $20,000 of her own funds and took an additional $10,000 bank loan to pay for the renovation and store fittings totaled $22,000, balance funds to use for operation needs. Kate paid a monthly rent of $5,000 for the store. The minimart sells a variety of goods estimated a total worth of $10,000. All sales are on cash basis amounting to about $12,000 to $14,000 each month. Kate is at a loss how to prepare the accounts for her business. You will perform the following: (0) Select an accounting principle and explain how it can be applied to Kate Minimart 3arrow_forward
- William Murray achieved one of his life-long dreams by opening his own business. The Coronado Driving Range, on May 1, 2025. He invested $24,100 of his own savings in the business. He paid $6,850 cash to have a small building constructed to house the operations and spent $860 on golf clubs, golf balls, and yardage signs. Murray leased 4 acres of land at a cost of $1,320 per month. (He paid the first month's rent in cash.) During the first month, advertising costs totaled $760, of which $200 was unpaid at the end of the month. Murray paid his three nephews $400 for retrieving golf balls. He deposited in the company's bank account all revenues from customers ($5,260). On May 15, Murray withdrew $810 in cash for personal use. On May 31, the company received a utility bill for $190 but did not immediately pay it. On May 31, the balance in the company bank account was $18.560. Murray is feeling pretty good about results for the first month, but his estimate of profitability ranges from a…arrow_forward(iii) (iv) element Select THREE (3) transactions that Kate Minimart performs and illustrate their effect on the accounting equation. Select ONE (1) financial statement to prepare at period end. Describe the following: -the purpose of preparing the statement the key components ONE (1) user and how he can use its information provide a brief format of the selected financial statement (with no numbers).arrow_forwardA college plans to build a new dormitory building. A group of alumni volunteered to donate enough funds to cover all the maintenance cost of the dormitory. As an analyst working for the college, you are asked to determine the amount of the donation. You are told that the maintenance cost of the dormitory will be $35,000 per year for the first 20 years. Then it will increase to $45,000 per year for years 21 through 30, and to $60,000 per year after that. The dormitory is assumed to have an indenite service life. The college will place the funds on an account that will pay 12% interest compounded annually. How large should the donation be? A) $500,000 B) $304,478 C) $347,231 D) Answers A, B and C are not correctarrow_forward
- Claude purchased raw land three years ago for $1,000,000 to develop into lots and sell to individuals planning to build their dream homes. Claude intended to treat this property as inventory, like his other development properties. Before completing the development of the property, however, he decided to contribute it to South Peak Investors LLC when it was worth $3,000,000, in exchange for a 10 percent capital and profits interest. South Peak’s strategy is to hold land for investment purposes only and then sell it later at a gain. a. If South Peak sells the property for $3,110,000 four years after Claude’s contribution, how much gain or loss is recognized, and what is its character? [Hint: See §724.] [capital gain/loss or Ordinary gain/loss] b. If South Peak sells the property for $3,110,000 five and one-half years after Claude’s contribution, how much gain or loss is recognized, and what is its character?arrow_forwardRaul Martinas, a professor of languages at Eastern University, owns a small office building adjacent to the university campus. He acquired the property 10 years ago at a total cost of $608,500-that is, $78,500 for the land and $530,000 for the building. He has just received an offer from a realty company that wants to purchase the property: however, the property has been a good source of income over the years, and so Martinas is unsure whether he should keep it or sell it. His alternatives are as follows: a Keep the property. Martinas's accountant has kept careful records of the income realized from the property over the past 10 years. These records indicate the following annual revenues and expenses: Martinas makes a $13,250 mortgage payment each year on the property The mortgage will be paid off in eight more years. He has been depredating the building by the straight-line method, assuming a salvage value of $79,500 for the building, which he still thinks is an appropriate figure. He…arrow_forwardKendall purchased an office building in Atlanta's growing west end. The building is 70 years old and has been empty for over ten years. The offices are in disrepair. First thing Kendall must do is to hire a painter to paint the interior of the office building. Kendall reaches out to Cameron, and they have the following conversation: Kendall: I will pay you $25,000 to paint the interior of my office building. Cameron: I have seen your office building, it will cost you $75,000 for me to paint that building's interior. Kendall: Ah, yes. Well, let's split it down the middle. I will pay you $50,000.00. Cameron: OK. I agree to do it for $50,000, but you must also supply the paint, brushes, ladders, tarps, cleaner, and other equipment I need. Does a contract exist between Kendall and Cameron?? Explain fully using IRAC.arrow_forward
- Upon graduation from high school, William Nitter accepted a job as a plumber's assistant for a large local plumbing company. After three years of hard work, William received a plumbing licence and decided to start his own business. He had saved $31,000, which he Invested in the business. His lawyer had advised him to start as a corporation. First, he transferred the $31,000 from his savings account to a business bank account for William's Plumbing Services Inc. and was issued shares. He then purchased a used panel truck for $21,500 cash and second hand tools for $3,700, rented space in a small building, Inserted an advertisement in the local paper, and opened his business on July 1 of the current year. Immediately. William was very busy, after one month, he employed an assistant A Although William knew practically nothing about the financial side of the business, he realized that a number of reports were required and that expenses and collections from clients had to be controlled…arrow_forwardErica trades as a financial adviser. She rents an office in the town centre and employs three full-time staff. She advises clients on how to manage their savings, investments and pension funds. Erica decided that she needed a new computer system for the business in order to improve efficiency. The following expenditure was incurred when the new system was purchased: Cost of computer $1900 Paper, ink cartridges and other consumables $110 Cost of colour laser printer $450 Installation and testing costs $200 Staff training on new system $500 Annual insurance against theft and breakdowns $90 Cost of rewiring to accommodate new computer $340 Annual maintenance agreement $99 REQUIRED: Calculate the total of capital expenditure incurred by Erica’s business when acquiring the computer system. To what extent would the business’s profits have been reduced by the expenditure listed. If Erica had borrowed $3000 to pay for the new computer system, how would the interest payments on the…arrow_forwardUpon graduation from high school, William Nitter accepted a job as a plumber's assistant for a large local plumbing company. After three years of hard work, William received a plumbing licence and decided to start his own business. He had saved $31,000, which he invested in the business. His lawyer had advised him to start as a corporation. First, he transferred the $31.000 from his savings account to a business bank account for Willam's Plumbing Services Inc. and was issued shares. He then purchased a used panel truck for $21,500 cash and second-hand tools for $3,700, rented space in a small building, inserted an advertisement in the local paper, and opened his business on July 1 of the current year. Immediately. William was very busy, after one month, he employed an assistant D Although William knew practically nothing about the financial side of the business, he realized that a number of reports were required and that expenses and collections from clients had to be controlled…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you