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Answer the following questions related to working capital management:
a) PT Solusindo Nusantara, a company with no liquidity problems, always pays its suppliers in full 45 days after the invoice even though they offer a
4% discount if the company pays in 10 days (4/10 net 45). Explain using the effective cost concept, why this is not good working capital management. Justify your answer with actual figures related to the calculation of the effective cost.
b) Pizza Club is thinking about financing the purchase of a delivery van with a useful life on 10 years using a 3-year loan from the bank because it is cheaper than a 10-year one? Would this be a good idea? Use the hedging principle.
c) Which one of the following credit-terms would be the best for a company? Justify your answer with actual figures related to the calculation of the effective cost. The answer depends on whether the company can take advantage of the credit terms or not.
a. 3/10 net 50
b. 2/10 net 70
c. 4/20 net 45
d. 6/15 net 95
Do the necessary acquisition analysis and provide the business combination valuation entries and the pre-acquisition adjustment entry at acquisition date.
In the current year, Norris, an individual, has $52,000 of ordinary income, a Net Short Term Capital Loss (NSTCL) of $9,800 and a Net Long Term Capital Gain (NLTCG) of $2,900. From his capital gains and losses, Norris reports:
On March 20, 10,000 shares of Thorlite Company are acquired at a price of $30 per share plus a $250 brokerage fee. On May 30, a $0.25-per-share dividend was received on the Thorlite Company stock. On June 15, 5,000 shares of the Thorlite Company stoc..
Using effective interest amortization, how much interest expense will be recognized in 2012? What will the carry value of the bonds be on December 31, 2012
Purpose a report that reconciles the total cost assigned to the ending work in process inventory and the units transferred out with the costs in the beginning inventory and costs added during the period.
Ethical theory grounds and justifies our moral decisions. Which ethical theory most closely approximates the considerations you appeal to when engaging in moral decision-making? Give an example of when you appealed to a utilitarian, deontic, or virtu..
question smith and sons is developing the 2011 budget. in 2011 the company would like to increase selling prices by 20
Discuss the current operating performance concept of income and the all-inclusive concept of income. Is comprehensive income consistent with either of the two? Discuss why or why not.
On March 10, 2017, Sarasota Company sold to Barr Hardware 170 tool sets at a price of $50 each (cost $32 per set) with terms of n/60, f.o.b. shipping point. Sarasota allows Barr to return any unused tool sets within 60 days of purchase. Prepare journ..
On January 1, 2014, Blair Corporation purchased for $500,000 a tract of land (site number 101) with a building. Blair paid a real estate broker's commission of $36,000, legal fees of $6,000, and title guarantee insurance of $18,000. The closing state..
Lerner Corporation wholesales repair products to equipment manufacturers. On April 1, 2016, Lerner Corporation issued $12,000,000 of five-year, 8% bonds at a market (effective) interest rate of 6%, receiving cash of $13,023,576. Interest is payable s..
Compute the amount of under- or overapplied overhead cost for the year and prepare a schedule of Cost of Goods Manufactured for the year.
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