accounting questions

  1. Steering Corporation is making a $90,650 investment in equipment with a 5-year life. The company uses the straight-line method of depreciation and has a tax rate of 20 percent. The company’s required rate of return is 13 percent.
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    What is the present value of the tax savings related to depreciation of the equipment? (Round present value factor calculations to 4 decimal places, e.g. 1.2151 and final answer to 0 decimal place, e.g. 125. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
The present value$enter present value in dollars rounded to 0 decimal place 
  1. Martinez Hardy recently rejected a $24,400,000, five-year contract with the Vancouver Seals hockey team. The contract offer called for an immediate signing bonus of $9,150,000 and annual payments of $3,050,000. To sweeten the deal, the president of player personnel for the Seals has now offered a $26,630,000, five-year contract. This contract calls for annual increases and a balloon payment at the end of five years.
Year 1$3,050,000
Year 23,130,000
Year 33,210,000
Year 43,290,000
Year 53,580,000
Year 5 balloon payment10,370,000
Total$26,630,000


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Suppose you are Hardy’s agent and you wish to evaluate the two contracts using a required rate of return of 15 percent. In present value terms, how much better is the second contract? (Round present value factor calculations to 4 decimal places, e.g. 1.2151 and final answers to 0 decimal places, e.g. 125. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Present value of old contractenter a dollar amount
Present value of new contractenter a dollar amount
In present value terms, the second contract is select an option                             than the old one.
  1. Sipacore Industrial has estimated that production for the next five quarters will be:
Production Information
1st quarter, 202041,400 units
2nd quarter, 202037,600 units
3rd quarter, 202045,200 units
4th quarter, 202035,200 units
1st quarter, 202143,000 units


Finished units of production require 6 pounds of raw material per unit. The raw material cost is $7 per pound. There is $260,820 of raw material on hand at the beginning of the first quarter, 2020. Sipacore desires to have 15 percent of next quarter’s material requirements on hand at the end of each quarter.
Prepare quarterly direct materials purchases budgets for Sipacore Industrial for 2020.

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Sipacore Industrial
Direct Materials Purchases Budget
For the Year Ending December 31, 2020
Quarter 1Quarter 2Quarter 3Quarter 4Year
select an opening direct materials purchases budget item                            enter a number of unitsenter a number of unitsenter a number of unitsenter a number of unitsenter a number of units
select an item                            $enter a dollar amount $enter a dollar amount $enter a dollar amount $enter a dollar amount $enter a dollar amount 
select a summarizing line for the first part                            enter a total dollar amount for the first partenter a total dollar amount for the first partenter a total dollar amount for the first partenter a total dollar amount for the first partenter a total dollar amount for the first part
select between addition and deduction                            : select an item                            enter a dollar amountenter a dollar amountenter a dollar amountenter a dollar amountenter a dollar amount
select a summarizing line for the second part                            enter a total dollar amount for the second partenter a total dollar amount for the second partenter a total dollar amount for the second partenter a total dollar amount for the second partenter a total dollar amount for the second part
select between addition and deduction                            : select an item                            enter a dollar amountenter a dollar amountenter a dollar amountenter a dollar amountenter a dollar amount
select a closing direct materials purchases budget item                            $enter a total amount for the direct materials purchases budget $enter a total amount for the direct materials purchases budget $enter a total amount for the direct materials purchases budget $enter a total amount for the direct materials purchases budget $enter a total amount for the direct materials purchases budget 
  1. The Clinton Antique Mall budgeted credit sales in the first quarter of 2021 to be as follows:
January$192,000
February204,000
March217,600


Credit sales in December 2020 are expected to be $240,000. The company expects to collect 75 percent of a month’s sales in the month of sale and 25 percent in the following month.
Estimate cash receipts for each month of the first quarter of 2021.

Collection of credit salesJanuaryFebruaryMarch
Collection of December sales$enter a dollar amount $enter a dollar amount $enter a dollar amount 
Collection of January salesenter a dollar amountenter a dollar amountenter a dollar amount
Collection of February salesenter a dollar amountenter a dollar amountenter a dollar amount
Collection of March salesenter a dollar amountenter a dollar amountenter a dollar amount
$enter a total dollar amount $enter a total dollar amount $enter a total dollar amount 
  1. The Cinrich Antique Mall expects to make purchases in the first quarter of 2021 as follows:
January$98,800
February124,800
March88,400


Purchases in December 2020 are expected to be $95,200. The company expects that 50 percent of a month’s purchases will be paid in the month of purchase and 50 percent will be paid in the following month.
Estimate cash disbursements related to purchases for each month of the first quarter of 2021.

Cash disbursements for purchasesJanuaryFebruaryMarch
Payment of December purchases$enter a dollar amount $enter a dollar amount $enter a dollar amount 
Payment of January purchasesenter a dollar amountenter a dollar amountenter a dollar amount
Payment of February purchasesenter a dollar amountenter a dollar amountenter a dollar amount
Payment of March purchasesenter a dollar amountenter a dollar amountenter a dollar amount
$enter a total dollar amount $enter a total dollar amount $enter a total dollar amount 

TABLE B9.1 Present value of $1 due in n periods
6% 7% 8% 9% 10% 11% 12% 13% 14% 15% 16% 20% 30%
1 0.9434 0.9346 0.9259 0.9174 0.9091 0.9009 0.8929 0.8850 0.8772 0.8696 0.8621 0.8333 0.7692
2 0.8900 0.8734 0.8573 0.8417 0.8264 0.8116 0.7972 0.7831 0.7695 0.7561 0.7432 0.6944 0.5917
3 0.8396 0.8163 0.7938 0.7722 0.7513 0.7312 0.7118 0.6931 0.6750 0.6575 0.6407 0.5787 0.4552
4 0.7921 0.7629 0.7350 0.7084 0.6830 0.6587 0.6355 0.6133 0.5921 0.5718 0.5523 0.4823 0.3501
5 0.7473 0.7130 0.6806 0.6499 0.6209 0.5935 0.5674 0.5428 0.5194 0.4972 0.4761 0.4019 0.2693
6 0.7050 0.6663 0.6302 0.5963 0.5645 0.5346 0.5066 0.4803 0.4556 0.4323 0.4104 0.3349 0.2072
7 0.6651 0.6227 0.5835 0.5470 0.5132 0.4817 0.4523 0.4251 0.3996 0.3759 0.3538 0.2791 0.1594
8 0.6274 0.5820 0.5403 0.5019 0.4665 0.4339 0.4039 0.3762 0.3506 0.3269 0.3050 0.2326 0.1226
9 0.5919 0.5439 0.5002 0.4604 0.4241 0.3909 0.3606 0.3329 0.3075 0.2843 0.2630 0.1938 0.0943
10 0.5584 0.5083 0.4632 0.4224 0.3855 0.3522 0.3220 0.2946 0.2697 0.2472 0.2267 0.1615 0.0725
11 0.5268 0.4751 0.4289 0.3875 0.3505 0.3173 0.2875 0.2607 0.2366 0.2149 0.1954 0.1346 0.0558
12 0.4970 0.4440 0.3971 0.3555 0.3186 0.2858 0.2567 0.2307 0.2076 0.1869 0.1685 0.1122 0.0429
13 0.4688 0.4150 0.3677 0.3262 0.2897 0.2575 0.2292 0.2042 0.1821 0.1625 0.1452 0.0935 0.0330
14 0.4423 0.3878 0.3405 0.2992 0.2633 0.2320 0.2046 0.1807 0.1597 0.1413 0.1252 0.0779 0.0254
15 0.4173 0.3624 0.3152 0.2745 0.2394 0.2090 0.1827 0.1599 0.1401 0.1229 0.1079 0.0649 0.0195
16 0.3936 0.3387 0.2919 0.2519 0.2176 0.1883 0.1631 0.1415 0.1229 0.1069 0.0930 0.0541 0.0150
17 0.3714 0.3166 0.2703 0.2311 0.1978 0.1696 0.1456 0.1252 0.1078 0.0929 0.0802 0.0451 0.0116
18 0.3503 0.2959 0.2502 0.2120 0.1799 0.1528 0.1300 0.1108 0.0946 0.0808 0.0691 0.0376 0.0089
19 0.3305 0.2765 0.2317 0.1945 0.1635 0.1377 0.1161 0.0981 0.0829 0.0703 0.0596 0.0313 0.0068
20 0.3118 0.2584 0.2145 0.1784 0.1486 0.1240 0.1037 0.0868 0.0728 0.0611 0.0514 0.0261 0.0053
TABLE B9.2 Present value of an annuity of $1 per period
6% 7% 8% 9% 10% 11% 12% 13% 14% 15% 16% 20% 30%
1 0.9434 0.9346 0.9259 0.9174 0.9091 0.9009 0.8929 0.8850 0.8772 0.8696 0.8621 0.8333 0.7692
2 1.8334 1.8080 1.7833 1.7591 1.7355 1.7125 1.6901 1.6681 1.6467 1.6257 1.6052 1.5278 1.3609
3 2.6730 2.6243 2.5771 2.5313 2.4869 2.4437 2.4018 2.3612 2.3216 2.2832 2.2459 2.1065 1.8161
4 3.4651 3.3872 3.3121 3.2397 3.1699 3.1024 3.0373 2.9745 2.9137 2.8550 2.7982 2.5887 2.1662
5 4.2124 4.1002 3.9927 3.8897 3.7908 3.6959 3.6048 3.5172 3.4331 3.3522 3.2743 2.9906 2.4356
6 4.9173 4.7665 4.6229 4.4859 4.3553 4.2305 4.1114 3.9975 3.8887 3.7845 3.6847 3.3255 2.6427
7 5.5824 5.3893 5.2064 5.0330 4.8684 4.7122 4.5638 4.4226 4.2883 4.1604 4.0386 3.6046 2.8021
8 6.2098 5.9713 5.7466 5.5348 5.3349 5.1461 4.9676 4.7988 4.6389 4.4873 4.3436 3.8372 2.9247
9 6.8017 6.5152 6.2469 5.9952 5.7590 5.5370 5.3282 5.1317 4.9464 4.7716 4.6065 4.0310 3.0190
10 7.3601 7.0236 6.7101 6.4177 6.1446 5.8892 5.6502 5.4262 5.2161 5.0188 4.8332 4.1925 3.0915
11 7.8869 7.4987 7.1390 6.8052 6.4951 6.2065 5.9377 5.6869 5.4527 5.2337 5.0286 4.3271 3.1473
12 8.3838 7.9427 7.5361 7.1607 6.8137 6.4924 6.1944 5.9176 5.6603 5.4206 5.1971 4.4392 3.1903
13 8.8527 8.3577 7.9038 7.4869 7.1034 6.7499 6.4235 6.1218 5.8424 5.5831 5.3423 4.5327 3.2233
14 9.2950 8.7455 8.2442 7.7862 7.3667 6.9819 6.6282 6.3025 6.0021 5.7245 5.4675 4.6106 3.2487
15 9.7122 9.1079 8.5595 8.0607 7.6061 7.1909 6.8109 6.4624 6.1422 5.8474 5.5755 4.6755 3.2682
16 10.1059 9.4466 8.8514 8.3126 7.8237 7.3792 6.9740 6.6039 6.2651 5.9542 5.6685 4.7296 3.2832
17 10.4773 9.7632 9.1216 8.5436 8.0216 7.5488 7.1196 6.7291 6.3729 6.0472 5.7487 4.7746 3.2948
18 10.8276 10.0591 9.3719 8.7556 8.2014 7.7016 7.2497 6.8399 6.4674 6.1280 5.8178 4.8122 3.3037
19 11.1581 10.3356 9.6036 8.9501 8.3649 7.8393 7.3658 6.9380 6.5504 6.1982 5.8775 4.8435 3.3105
20 11.4699 10.5940 9.8181 9.1285 8.5136 7.9633 7.4694 7.0248 6.6231 6

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