Evan and David are students at Berkeley College. They share an apartment that is owned by David. David is considering subscribing to an Internet provider that has the following packages available: Evan spends most of his time on the Internet ("everything can be found online now"). David prefers to spend his time talking on the phone rather than using the Internet ("going online is a waste of time"). They agree that the purchase of the $90 total package is a "win-win" situation. Requirements Package Per Month A. Internet access $ 80 B. Phone services 20 1. Allocate the $90 between Evan and David using (a) the stand-alone cost-allocation method, (b) the incremental cost-allocation method, and (c) the Shapley value method. 2. Which method would you recommend they use and why? C. Internet access + phone services 90 Requirement 1. Allocate the $90 between Evan and David using (a) the stand-alone cost-allocation method, (b) the incremental cost-allocation method, and (c) the Shapley value method. (Round your answers to the nearest cent.) Costs allocated to Evan David (a) Stand-alone 72.00 $ (b) Incremental Evan primary user David primary user (c) Shapley $ 18.00 20.00

Evan and David are students at Berkeley College. They share an apartment that is owned by David. David is considering subscribing to an Internet provider that has the following packages available: Evan spends most of his time on the Internet ("everything can be found online now"). David prefers to spend his time talking on the phone rather than using the Internet ("going online is a waste of time"). They agree that the purchase of the $90 total package is a "win-win" situation. Requirements Package Per Month A. Internet access $ 80 B. Phone services 20 1. Allocate the $90 between Evan and David using (a) the stand-alone cost-allocation method, (b) the incremental cost-allocation method, and (c) the Shapley value method. 2. Which method would you recommend they use and why? C. Internet access + phone services 90 Requirement 1. Allocate the $90 between Evan and David using (a) the stand-alone cost-allocation method, (b) the incremental cost-allocation method, and (c) the Shapley value method. (Round your answers to the nearest cent.) Costs allocated to Evan David (a) Stand-alone 72.00 $ (b) Incremental Evan primary user David primary user (c) Shapley $ 18.00 20.00

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

T grows beets in her own garden. Although T detests beets, she will be required torecognize income when:a. She harvests her beets.b. She consumes beets that she could have sold for $100.c. She sells beets for $100 to somebody who actually likes them.d. She exchanges $100 worth of beets for $100 worth of spinach grown by herneighbor.e. Both (c) and (d) are correct T (a cash method taxpayer) pays $250,000 for a house to be held as an investment (it isactually worth $300,000).a. In all cases, T would be required to recognize $50,000 as income in the year hebuys the house.b. T will never be required to recognize income until he disposes of the house inan arm’s length sale or exchange.c. If T acquired the house from a person who owes him $50,000 for services rendered,T would be required to recognize $50,000 as income in the year he buysit.d. (c) would be the correct answer only if T accepts the house in satisfaction of thedebt owed to him for services rendered.e. None of the above.
Dawn is a director of the Manello Corporation. Bert, a friend of Dawn's and an inventor, creates a new product. Bert wants Manello to handle the production and marketing of this new product, so Bert discusses his new invention with Dawn. Dawn thinks the new invention will be a huge success, but in order to maximize her personal income, Dawn suggests to Bert that she handle the manufacturing and marketing, leaving Manello out of it completely. Bert agrees. Discuss the propriety of Dawn's actions in this situation. Would the outcome be any different if Dawn were merely a shareholder owning 4 percent of Manello? Please solve and analyze this case. use facts, issue, analysis conclusion. What would be the likely outcome in court.?
Sasha owns eight profitable rent properties and would like to shift some of this income to her children, Darius age 17, and Delilah age 11. Darius would be responsible for yard maintenance, snow removal, and other various jobs. Delilah would help her mom clean and maintain the apartment units. What factors should Sasha consider in setting an appropriate income for Darius and Delilah?
Last week Santiago found a new pair of red Nike Air Soles in the parking lot. He had just paid $120 to buy a pair of blue Nike Air Soles a few days earlier. A friend offers $80 to buy the pair of red Air Soles. Santiago says no and decides to keep both pairs for himself. The opportunity cost of this decision is how much
Veronica and Jasmine are twin sisters. They recently bought a townhouse together because they knew that they couldn’t afford to buy one on their own. They live in a small community where cost of living is less, but so are incomes. Veronica works as a hair stylist and makes about $800.00 a week and Jasmine is a store manager and brings home just a bit more, $900.00 a week. There mortgage payment is $950.00 a month and utilities, phone, cable and internet cost an addition $600.00. Their grocery bill is approximately $600.00 a month because both girls enjoy entertaining and having friends over. Veronica is paying off her student loan from hair stylist school and that costs an additional $156.00 per month. Their car payments are $800.00 per month and their gas is only $150.00 as everything is located so close together. They are hoping to go to Cuba with some friends for a week in November. The cost of the trip is $685.00 each. November is four months away. Will they be able to save enough…
Timmy and Tammy, boyfriend and girlfriend (but not married and with no present intention to marry), have co-owned (50-50) and lived together in a home in Dallas for five years. Now they plan to sell because they’ve decided to move to Alaska. They tell you, their CPA, that they anticipate around $600,000 total profit on the sale. You advise them that they – (a) must get married before they sell in order to maximize the § 121 exclusion. (b) must get married by year-end in order to maximize the § 121 exclusion. (c) will pay no tax on a total of $250,000 of the gain, split evenly between them on their respective “single” tax returns. (d) will pay no tax on a total of $500,000 of the gain, split evenly between them, on their respective “single” tax returns. (Choose the answer you believe to be correct and defend your choice.)