Question: Legacy issues $325,000 of 5%, four-

> What are landed costs? Should we consider landed costs in more detail when participating in international supply chain management?

> Can a shipping company that does not actually own a ship deliver cargoes on behalf of their shippers? Explain.

> A colleague tells you that the inventory is incurring extra costs and hence all inventories and warehouses need to be removed. Do you agree? Justify your answer.

> “Transportation and warehousing are the two major functions of logistics.” Do you agree with this proposition? Explain.

> In the chapter, we suggested that advanced information systems will automate some of the more routine purchasing activities. What are the implications for purchasing professionals? Is this a good time to join the purchasing profession? Explain.

> One of your co-workers tells you that operations and supply chain management are both related to freight movement, and has nothing to do with passenger transportation. Do you agree? Justify your answer.

> Under what conditions might a company prefer to negotiate rather than use competitive bidding to select a supplier?

> Consider the cafeteria services available at a university. In many cases, these services are outsourced to a private firm. Use Tables 7.6 and 7.7 as guides to explain why this is the case. In what quadrant would such services be positioned when determini

> Though simulations are used to imitate the operation of a real-world process or system over time, they have a number of disadvantages. Identify their advantages as well as their disadvantages.

> Is it true to say that the waiting line for a bank with constant service time will have a longer waiting time than a bank with irregular service time, assuming all other things, including time between arrivals, are the same? Why or why not?

> A manufacturer takes raw material from a supplier, processes it using a single manufacturing step, and then sells it to its customers. Suppose the manufacturer decides to double the capacity of the manufacturing step. Under what conditions will throughpu

> What are the relationships among learning, productivity, and effective capacity? What are the pros and cons of using learning curves to estimate future resource requirements?

> Assume that you are the operations manager of a department store. Is it logical for cashiers to be fully engaged all the time in order to keep the customers’ waiting time to a minimum when the latter usually arrive at random intervals? Explain your answe

> Who do you think would benefit more from a “virtual supply chain” capacity strategy—a small start-up firm with few resources or an older, more established company? Why? What are the risks associated with such a strategy?

> What kind of capacity strategy—lead, lag, or match— would you expect a toy targeted for the Christmas period to adopt? What about a public employment agency? Why?

> “As a matter of fact, an environment supporting standardized products will usually have an easier time managing capacity than an environment supporting customized products.” Is this proposition true? Justify your answer.

> Consider the simplified Anheuser-Busch supply chain shown in Figure 1.2. Is Alcoa really the first entity in the supply chain? What other suppliers would AnheuserBusch have? What information should be shared among companies in the supply chain?

> The ledger of Tyler Lambert and Jayla Yost, attorneys-at-law, contains the following accounts and balances after adjustments have been recorded on December 31, 20Y3: The balance in Yost’s capital account includes an additional investm

> The ledger of Tyler Lambert and Jayla Yost, attorneys-at-law, contains the following accounts and balances after adjustments have been recorded on December 31, 20Y3: The balance in Yost’s capital account includes an additional investm

> Ecker Company reports $2,700,000 of net income for 2015 and declares $388,020 of cash dividends on its preferred stock for 2015. At the end of 2015, the company had 678,000 weighted-average shares of common stock. 1. What amount of net income is availabl

> Rugged Sports Enterprises LP is organized as a limited partnership consisting of two individual partners: Hockey LP and Football LP. Both partners separately operate a minor league hockey team and a semipro football team. Compute partner return on equity

> The partners in the Biz Partnership have agreed that partner Mandy may sell her $100,000 equity in the partnership to Brittney, for which Brittney will pay Mandy $85,000. Present the partnership’s journal entry to record the sale of Mandy’s interest to B

> Prepare journal entries to record the following transactions involving the short-term securities investments of Krum Co., all of which occurred during year 2015. a. On August 1, paid $450,000 cash to purchase Houtte’s 9% debt securities ($450,000 princip

> Next to the following list of eight characteristics of business organizations, enter a brief description of how each characteristic applies to general partnerships. Characteristic Application to General Partnerships I. Life 2. Owners' liability 3. L

> Valdez issues $450,000 of 13%, four-year bonds dated January 1, 2015, that pay interest semiannually on June 30 and December 31. They are issued at $493,608, and their market rate is 10% at the issue date. Required 1. Prepare the January 1, 2015, journa

> Flagstaff Systems issues bonds dated January 1, 2015, that pay interest semiannually on June 30 and December 31. The bonds have a $90,000 par value and an annual contract rate of 12%, and they mature in five years. Required For each of the following thr

> Braun Company signs a five-year capital lease with Verdi Company for office equipment. The annual year-end lease payment is $20,000, and the interest rate is 10%. Required 1. Compute the present value of Braun’s lease payments. 2. Prep

> Soltech Company’s common stock is currently selling on a stock exchange at $90 per share, and its current balance sheet shows the following stockholders’ equity section. Required (Round per share amounts to cents.) 1

> The equity sections from Hovo Corporation’s 2015 and 2016 balance sheets follow. The following transactions and events affected its equity during year 2016. Feb. 15 Declared a $0.40 per share cash dividend, date of record five days

> At December 31, the end of Chilton Communication’s third quarter, the following stockholders’ equity accounts are reported: In the fourth quarter, the following entries related to its equity are recorded: Required

> Balthus Corp. reports the following components of stockholders’ equity on December 31, 2015: It completed the following transactions related to stockholders’ equity in year 2016: Jan. 10 Purchased 40,000 shares of i

> Weiss Company is incorporated at the beginning of this year and engages in a number of transactions. The following journal entries impacted its stockholders’ equity during its first year of operations. Required 1. Explain the transact

> Lasure, Ramirez, and Toney, who share income and loss in a 2:1:2 ratio, plan to liquidate their partnership. At liquidation, their balance sheet appears as follows. Required Prepare journal entries for (a) the sale of equipment, (b) the allocation of i

> Part 1. Gibbs, Cook, and Chan are partners and share income and loss in a 5:1:4 ratio. The partnership’s capital balances are as follows: Gibbs, $606,000; Cook, $148,000; and Chan, $446,000. Gibbs decides to withdraw from the partnership, and the partner

> Hunter, Folgers, and Tulip have been partners while sharing net income and loss in a 5:3:2 ratio. On January 31, the date Tulip retires from the partnership, the equities of the partners are Hunter, $150,000; Folgers, $90,000; and Tulip, $60,000. Present

> Sally Cook, Lin Xi, and Ken Schwartz formed the CXS Partnership by making capital contributions of $144,000, $216,000, and $120,000, respectively. They predict annual partnership net income of $240,000 and are considering the following alternative plans

> Mark Albin, Roland Peters, and Sam Ramsey invested $164,000, $98,400, and $65,600, respectively, in a partnership. During its first calendar year, the firm earned $270,000. Required Prepare the entry to close the firm’s Income Summary account as of its

> Maria Bell and J.R. Green are forming a partnership to which Bell will devote one-third time and Green will devote full time. They have discussed the following alternative plans for sharing income and loss: (a) in the ratio of their initial capital inves

> Doering Company, a U.S. corporation with customers in several foreign countries, had the following selected transactions for 2015 and 2016. 2015 Apr. 8 Sold merchandise to Salinas & Sons of Mexico for $5,938 cash. The exchange rate for pesos is $0.10

> Stoll Co.’s long-term available-for-sale portfolio at December 31, 2014, consists of the following. Stoll enters into the following long-term investment transactions during year 2015. Jan. 29 Sold 3,500 shares of Company B common stoc

> Selk Steel Co., which began operations on January 4, 2015, had the following subsequent transactions and events in its long-term investments. 2015 Jan. 5 Selk purchased 60,000 shares (20% of total) of Kildaire’s common stock for $1,560,000. Oct. 23 Kild

> Grass Security, which began operations in 2015, invests in long-term available-for-sale securities. Following is a series of transactions and events determining its long-term investment activity. 2015 Jan. 20 Purchased 1,000 shares of Johnson & Johnson a

> Rose Company had no short-term investments prior to year 2015. It had the following transactions involving short-term investments in available-for-sale securities during 2015. Apr. 16 Purchased 4,000 shares of Gem Co. stock at $24.25 per share plus a $18

> Carlsville Company, which began operations in 2015, invests its idle cash in trading securities. The following transactions are from its short-term investments in trading securities. 2015 Jan. 20 Purchased 800 shares of Ford Motor Co. at $26 per share pl

> Refer to the bond details in Problem 14-4A. Required 1. Compute the total bond interest expense over the bonds’ life. 2. Prepare an effective interest amortization table like the one in Exhibit 14B.2 for the bonds’ li

> The Struter Partnership has total partners’ equity of $510,000, which is made up of Main, Capital, $400,000, and Frist, Capital, $110,000. The partners share net income and loss in a ratio of 80% to Main and 20% to Frist. On November 1, Madison is admitt

> Refer to the bond details in Problem 14-5A. Required 1. Prepare the January 1, 2015, journal entry to record the bonds’ issuance. 2. Determine the total bond interest expense to be recognized over the bonds’ life. 3.

> At the end of the current year, the following information is available for both Pulaski Company and Scott Company. Required 1. Compute the debt-to-equity ratios for both companies. 2. Comment on your results and discuss the riskiness of each company&ac

> On November 1, 2015, Norwood borrows $200,000 cash from a bank by signing a five-year installment note bearing 8% interest. The note requires equal total payments each year on October 31. Required 1. Compute the total amount of each installment payment.

> Ellis issues 6.5%, five-year bonds dated January 1, 2015, with a $250,000 par value. The bonds pay interest on June 30 and December 31 and are issued at a price of $255,333. The annual market rate is 6% on the issue date. Required 1. Calculate the total

> Refer to the bond details in Problem 14-2A, except assume that the bonds are issued at a price of $4,895,980. Required 1. Prepare the January 1, 2015, journal entry to record the bonds’ issuance. 2. For each semiannual period, compute

> Hillside issues $4,000,000 of 6%, 15-year bonds dated January 1, 2015, that pay interest semiannually on June 30 and December 31. The bonds are issued at a price of $3,456,448. Required 1. Prepare the January 1, 2015, journal entry to record the bonds&a

> Ike issues $180,000 of 11%, three-year bonds dated January 1, 2015, that pay interest semiannually on June 30 and December 31. They are issued at $184,566. Their market rate is 10% at the issue date. Required 1. Prepare the January 1, 2015, journal entr

> Hartford Research issues bonds dated January 1, 2015, that pay interest semiannually on June 30 and December 31. The bonds have a $40,000 par value and an annual contract rate of 10%, and they mature in 10 years. Required For each of the following three

> Rogers Company signs a five-year capital lease with Packer Company for office equipment. The annual year-end lease payment is $10,000, and the interest rate is 8%. Required 1. Compute the present value of Rogers’s five-year lease payme

> Rodriguez Corporation issues 19,000 shares of its common stock for $152,000 cash on February 20. Prepare journal entries to record this event under each of the following separate situations. 1. The stock has a $2 par value. 2. The stock has neither par

> Raphael Corporation’s common stock is currently selling on a stock exchange at $85 per share, and its current balance sheet shows the following stockholders’ equity section: Required (Round per share amounts to cents

> The equity sections from Atticus Group’s 2015 and 2016 year-end balance sheets follow. The following transactions and events affected its equity during year 2016. Jan. 5 Declared a $0.50 per share cash dividend, date of record Janu

> At September 30, the end of Beijing Company’s third quarter, the following stockholders’ equity accounts are reported. In the fourth quarter, the following entries related to its equity are recorded: Required 1. Ex

> Kohler Corporation reports the following components of stockholders’ equity on December 31, 2015: In year 2016, the following transactions affected its stockholders’ equity accounts. Jan. 1 Purchased 4,000 shares o

> Kinkaid Co. is incorporated at the beginning of this year and engages in a number of transactions. The following journal entries impacted its stockholders’ equity during its first year of operations. Required 1. Explain the transactio

> Kendra, Cogley, and Mei share income and loss in a 3:2:1 ratio. The partners have decided to liquidate their partnership. On the day of liquidation their balance sheet appears as follows. Required Prepare journal entries for (a) the sale of inventory,

> Part 1. Meir, Benson, and Lau are partners and share income and loss in a 3:2:5 ratio. The partnership’s capital balances are as follows: Meir, $168,000; Benson, $138,000; and Lau, $294,000. Benson decides to withdraw from the partnership, and the partn

> Bill Beck, Bruce Beck, and Barb Beck formed the BBB Partnership by making capital contributions of $67,500, $262,500, and $420,000, respectively. They predict annual partnership net income of $450,000 and are considering the following alternative plans o

> Kara Ries, Tammy Bax, and Joe Thomas invested $80,000, $112,000, and $128,000, respectively, in a partnership. During its first calendar year, the firm earned $249,000. Required Prepare the entry to close the firm’s Income Summary account as of its Dece

> Irene Watts and John Lyon are forming a partnership to which Watts will devote one-half time and Lyon will devote full time. They have discussed the following alternative plans for sharing income and loss: (a) in the ratio of their initial capital invest

> On March 1, 2015, Eckert and Kelley formed a partnership. Eckert contributed $82,500 cash and Kelley contributed land valued at $60,000 and a building valued at $100,000. The partnership also assumed responsibility for Kelley’s $92,500 long-term note pay

> Prescrip Co. began operations in 2014. The cost and fair values for its long-term investments portfolio in available-for-sale securities are shown below. Prepare Prescrip’s December 31, 2015, adjusting entry to reflect any necessary fai

> On December 31, 2015, Lujack Co. held the following short-term available-for-sale securities. Lujack had no short-term investments prior to the current period. Prepare the December 31, 2015, year-end adjusting entry to record the fair value adjustment fo

> On December 31, 2015, Reggit Company held the following short-term investments in its portfolio of available-for-sale securities. Reggit had no short-term investments in its prior accounting periods. Prepare the December 31, 2015, adjusting entry to repo

> Prepare journal entries to record the following transactions involving both the short-term and long-term investments of Cancun Corp., all of which occurred during calendar-year 2015. Use the account Short-Term Investments for any transactions that you de

> Prepare journal entries to record the following transactions involving the short-term securities investments of Natura Co., all of which occurred during year 2015. a. On June 15, paid $1,000,000 cash to purchase Remedy’s 90-day short-term debt securities

> Brooks Co. purchases various investments in trading securities at a cost of $66,000 on December 27, 2015. (This is its first and only purchase of such securities.) At December 31, 2015, these securities had a fair value of $72,000. 1. Prepare the Decembe

> Prepare journal entries to record the following transactions involving the short-term securities investments of Duke Co., all of which occurred during year 2015. a. On March 22, purchased 1,000 shares of RIP Company stock at $10 per share plus an $80 bro

> The Carrefour Group reports the following description of its financial assets available-for-sale. Carrefour’s financial statements report €18 million in net unrealized losses (net of unrealized gains), which are inclu

> On May 8, 2015, Jett Company (a U.S. company) made a credit sale to Lopez (a Mexican company). The terms of the sale required Lopez to pay 800,000 pesos on February 10, 2016. Jett prepares quarterly financial statements on March 31, June 30, September 30

> Leigh of New York sells its products to customers in the United States and the United Kingdom. On December 16, 2015, Leigh sold merchandise on credit to Bronson Ltd. of London at a price of 17,000 pounds. The exchange rate on that day for £1 was $1.4583.

> Kramer and Knox began a partnership by investing $60,000 and $80,000, respectively. The partners agreed to share net income and loss by granting annual salary allowances of $50,000 to Kramer and $40,000 to Knox, 10% interest allowances on their investmen

> The following information is available from the financial statements of Regae Industries. Compute Regae’s return on total assets for 2015 and 2016. (Round returns to one-tenth of a percent.) Comment on the company’s ef

> Prepare journal entries to record the following transactions and events of Kodax Company. 2015 Jan. 2 Purchased 30,000 shares of Grecco Co. common stock for $408,000 cash plus a broker’s fee of $3,000 cash. Bushtex has 90,000 shares of common stock outst

> Information regarding Carperk Company’s individual investments in securities during its calendar-year 2015, along with the December 31, 2015, fair values, follows. a. Investment in Brava Company bonds: $420,500 cost, $457,000 fair value. Carperk intends

> Ticker Services began operations in 2013 and maintains long-term investments in available-for-sale securities. The year-end cost and fair values for its portfolio of these investments follow. Prepare journal entries to record each year-end fair value adj

> Complete the following descriptions by filling in the blanks. 1. Debt securities reflect a ______ relationship such as investments in notes, bonds, and certificates of deposit. 2. Equity securities reflect an ______ relationship such as shares of stock i

> On January 1, 2015, Shay issues $700,000 of 10%, 15-year bonds at a price of 973⁄4. Six years later, on January 1, 2021, Shay retires 20% of these bonds by buying them on the open market at 1041⁄2. All interest is accounted for and paid through December

> Citywide Company issues bonds with a par value of $150,000 on their stated issue date. The bonds mature in five years and pay 10% annual interest in semiannual payments. On the issue date, the annual market rate for the bonds is 8%. 1. What is the amount

> Quatro Co. issues bonds dated January 1, 2015, with a par value of $400,000. The bonds’ annual contract rate is 13%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate a

> Woodwick Company issues 10%, five-year bonds, on December 31, 2014, with a par value of $200,000 and semiannual interest payments. Use the following bond amortization table and prepare journal entries to record (a) the issuance of bonds on December 31, 2

> Dobbs Company issues 5%, two-year bonds, on December 31, 2015, with a par value of $200,000 and semiannual interest payments. Use the following bond amortization table and prepare journal entries to record (a) the issuance of bonds on December 31, 2015;

> Kramer and Knox began a partnership by investing $60,000 and $80,000, respectively. During its first year, the partnership earned $160,000. Prepare calculations showing how the $160,000 income should be allocated to the partners under each of the followi

> Paulson Company issues 6%, four-year bonds, on December 31, 2015, with a par value of $200,000 and semiannual interest payments. Use the following bond amortization table and prepare journal entries to record (a) the issuance of bonds on December 31, 201

> Bringham Company issues bonds with a par value of $800,000 on their stated issue date. The bonds mature in 10 years and pay 6% annual interest in semiannual payments. On the issue date, the annual market rate for the bonds is 8%. 1. What is the amount of

> Heineken N.V. reports the following information for its loans and borrowings as of December 31, 2013, including proceeds and repayments for the year ended December 31, 2013 (euros in millions). 1. Prepare Heineken’s journal entry to r

> Tano issues bonds with a par value of $180,000 on January 1, 2015. The bonds’ annual contract rate is 8%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date

> General Motors advertised three alternatives for a 25-month lease on a new Tahoe: (1) zero dollars down and a lease payment of $1,750 per month for 25 months, (2) $5,000 down and $1,500 per month for 25 months, or (3) $38,500 down and no payments for 25

> Harbor (lessee) signs a five-year capital lease for office equipment with a $10,000 annual lease payment. The present value of the five annual lease payments is $41,000, based on a 7% interest rate. 1. Prepare the journal entry Harbor will record at ince

> On May 1, 2015, Brussels Enterprises issues bonds dated January 1, 2015, that have a $3,400,000 par value, mature in 20 years, and pay 9% interest semiannually on June 30 and December 31. The bonds are sold at par plus four months’ accrued interest. 1. H

> Duval Co. issues four-year bonds with a $100,000 par value on June 1, 2015, at a price of $95,948. The annual contract rate is 7%, and interest is paid semiannually on November 30 and May 31. 1. Prepare an amortization table like the one in Exhibit 14.7

> Quatro Co. issues bonds dated January 1, 2015, with a par value of $400,000. The bonds’ annual contract rate is 13%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate a

> Stanford issues bonds dated January 1, 2015, with a par value of $500,000. The bonds’ annual contract rate is 9%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at t

> Angela Moss and Autumn Barber organize a partnership on January 1. Moss’s initial net investment is $75,000, consisting of cash ($17,500), equipment ($82,500), and a note payable reflecting a bank loan for the new business ($25,000). Barber’s initial inv