Chapter 12, Problem 12.14E

Montana oversees the Coffee Bean Division at the Sarasota Corp., and she is evaluating different options for the sale of the company's beans. In the past, the Coffee Bean Division has been selling to external customers only, and has been operating at full capacity. As the business grew and expanded, so did its production capacity. It is now operating with some idle capacity, and has been debating whether to sell internally to another business unit. The Coffee Maker Division has recently decided that it will be giving away a free pound of coffee with each brewer machine purchase. It anticipates needing 14,300 pounds of coffee in the coming year and is obtaining quotes both internally and externally. The Coffee Bean Division has a capacity of 177,000 pounds of coffee and reported the following for its external sales: 162,200 pounds resulting in sales of $204,300, variable costs of $123,272, and fixed costs of $54,300. An external vendor has offered the Coffee Maker Division the following…

None

Jimmy owns two parcels of real estate, Tara and Sundance. Tara is worth $150,000 and Sundance is worth $225,000. Jimmy plans to bequeath Tara directly to his spouse Lois and leave her a life estate in Sundance. What amount of value will be included in Jimmy's gross estate and taxable estate should he die now?

Arcadia, Incorporated, acquired 100 percent of the voting shares of Bruno Company on January 1, 2023. In exchange, Arcadia pald $241,000 in cash and Issued 100,000 shares of its own $1 par value common stock. On this date, Arcadia's stock had a fair value of $15 per share. The combination is a statutory merger with Bruno subsequently dissolved as a legal corporation. Bruno's assets and liabilities are assigned to a new reporting unit. The following shows fair values for the Bruno reporting unit for January 1, 2023, along with respective carrying amounts on December 31, 2024. Bruno Reporting Unit Cash Receivables Inventory Patents Royalty agreements Equipment (net) Goodwill Accounts payable Long-term liabilities Fair Values 1/1/23 $ 74,000 Carrying Amounts 12/31/24 $ 43,000 203,250 238,000 205,500 253,000 583,500 670,000 660,750 630,000 374,500 308,000 ? 416,000 (136,000) (640,500) (198,000) (558,000) Note: Parentheses indicate a credit balance. Required: a. Prepare Arcadia's journal…

Exercise 11-6 (Algo) Contrasting Return on Investment (ROI) and Residual Income [LO11-1. LO11-2] Tan Corporation of Japan has two regional divisions with headquarters in Osaka and Yokohama. Selected data on the two divisions follow: Sales Net operating income Average operating assets Required: Osaka Division $ 9,200,000 Yokohama $ 22,000,000 $ 552,000 $ 2,300,000 $ 1,760,000 $ 11,000,000 1. For each division, compute the return on Investment (ROI). 2. Assume that the company evaluates performance using residual Income and that the minimum required rate of return for any division is 13%. Compute the residual Income for each division. Complete this question by entering your answers in the tabs below. Required 1 Required 2 For each division, compute the return on investment (ROI). ROI Osaka Yokohama % % Required 1 Required 2 >

The small business deduction is only available on: Multiple Choice The first $500,000 in manufacturing and processing income earned by a Canadian controlled private corporation. None of the above. All of the income earned in Canada by a Canadian controlled private corporation. Income earned in Canada by a resident corporation.

Banele had a taxable estate of $18.0 million when they died this year. Calculate the amount of estate tax due (if any) under the following alternatives. (Refer to Exhibit 25-1 and Exhibit 25-2.) Note: Enter your answers in dollars and not in millions of dollars.   a. Banele's prior taxable gifts consist of a taxable gift of $1 million in 2005. Estate tax due ______ b. Banele's prior taxable gifts consist of a taxable gift of $1.5 million in 2005. Estate tax due ______   EXHIBIT 25-1 Unified Transfer Tax Rates* Tax Base Equal to or Over Not Over Tentative Tax Plus of Amount Over $       0 $10,000 $     0    18% $      0 10,000 20,000 1,800 20 10,000 20,000 40,000 3,800 22 20,000 40,000 60,000 8,200 24 40,000 60,000 80,000 13,000 26 60,000 80,000 100,000 18,200 28 80,000 100,000 150,000 23,800 30 100,000 150,000 250,000 38,800 32 150,000 250,000 500,000 70,800 34 250,000 500,000 750,000 155,800 37 500,000 750,000 1,000,000 248,300 39 750,000 1,000,000…

20-31 EOQ, uncertainty, safety stock, reorder point. Phillips Corporation is a major manufacturer of food processors. It purchases motors from Viking Corporation. Annual demand is 52,000 motors per year or 1,000 motors per week. The ordering cost is $360 per order. The annual carrying cost is $6.50 per motor. It cur- rently takes 2 weeks to supply an order to the assembly plant. 1. What is the optimal number of motors that Phillips's managers should order according to the EOQ model? 2. At what point should managers reorder the motors, assuming that both demand and purchase-order lead time are known with certainty? 3. Now assume that demand can vary during the 2-week purchase-order lead time. The following table shows the probability distribution of various demand levels: Required Total Demand for Motors for 2 Weeks 1,600 1,800 2,000 2,200 Probability of Demand (sums to 1) 0.05 0.20 0.50 0.20 0.05 2,400 If Phillips runs out of stock, it would have to rush order the motors at an…

None