Transfer price: The price charged for the goods and services transferred among the divisions is referred to as transfer price. Income statement: The financial statement which reports revenues and expenses from business operations and the result of those operations as net income or net loss for a particular time period is referred to as income statement.

Question

Calm Ltd has the following data relating tò two investment projects, only one of which mayb e s e l e c t e d :The cost of capital is 10 per cent, and depreciation is calculated using straight line method.a . Calculate for each of the project:i. Average annual accounting rate of return on average capital investedi i . Net Present Valuei l l . I n t e r n a l R a t e o f Returnb. Discuss the relative merits of the methods of evaluation mentioned above in (a).Q.4a . In the context of process costing, discuss the following concepts briefly, i . Equivalent unitsNormal lossill. Abnormal lossi v. Joint productsV . By productsb . Discuss the different types of standard costing and objectives of standard costing.

Answer 1

Question

Chapter 24, Problem 24.6BPR

(1)

To determine

Transfer price: The price charged for the goods and services transferred among the divisions is referred to as transfer price.

Income statement: The financial statement which reports revenues and expenses from business operations and the result of those operations as net income or net loss for a particular time period is referred to as income statement.

(2)

To determine

The increase in S Division, NS Division, and Company E income from operations as a result of transfer pricing

(3)

To determine

To prepare: The income statements for S and NS Divisions of Company E for the year ended December 31, 20Y8

(4)

To determine

The increase in S Division, NS Division, and Company E income from operations as a result of transfer pricing

(5) (a)

To determine

The range of transfer price, if negotiated price approach is used

(b)

To determine

To suggest: The transfer price

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Calm Ltd has the following data relating tò two investment projects, only one of which mayb e s e l e c t e d :The cost of capital is 10 per cent, and depreciation is calculated using straight line method.a . Calculate for each of the project:i. Average annual accounting rate of return on average capital investedi i . Net Present Valuei l l . I n t e r n a l R a t e o f Returnb. Discuss the relative merits of the methods of evaluation mentioned above in (a).Q.4a . In the context of process costing, discuss the following concepts briefly, i . Equivalent unitsNormal lossill. Abnormal lossi v. Joint productsV . By productsb . Discuss the different types of standard costing and objectives of standard costing.

Please help me correct the wrong answers:

What are total assets at the end of the year?

Answer 2

Question

Chapter 24, Problem 24.6BPR

(1)

To determine

Transfer price: The price charged for the goods and services transferred among the divisions is referred to as transfer price.

Income statement: The financial statement which reports revenues and expenses from business operations and the result of those operations as net income or net loss for a particular time period is referred to as income statement.

(2)

To determine

The increase in S Division, NS Division, and Company E income from operations as a result of transfer pricing

(3)

To determine

To prepare: The income statements for S and NS Divisions of Company E for the year ended December 31, 20Y8

(4)

To determine

The increase in S Division, NS Division, and Company E income from operations as a result of transfer pricing

(5) (a)

To determine

The range of transfer price, if negotiated price approach is used

(b)

To determine

To suggest: The transfer price

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Answer 3

Question

Chapter 24, Problem 24.6BPR

(1)

To determine

Transfer price: The price charged for the goods and services transferred among the divisions is referred to as transfer price.

Income statement: The financial statement which reports revenues and expenses from business operations and the result of those operations as net income or net loss for a particular time period is referred to as income statement.

(2)

To determine

The increase in S Division, NS Division, and Company E income from operations as a result of transfer pricing

(3)

To determine

To prepare: The income statements for S and NS Divisions of Company E for the year ended December 31, 20Y8

(4)

To determine

The increase in S Division, NS Division, and Company E income from operations as a result of transfer pricing

(5) (a)

To determine

The range of transfer price, if negotiated price approach is used

(b)

To determine

To suggest: The transfer price

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Answer 4

Question

Chapter 24, Problem 24.6BPR

(1)

To determine

Transfer price: The price charged for the goods and services transferred among the divisions is referred to as transfer price.

Income statement: The financial statement which reports revenues and expenses from business operations and the result of those operations as net income or net loss for a particular time period is referred to as income statement.

(2)

To determine

The increase in S Division, NS Division, and Company E income from operations as a result of transfer pricing

(3)

To determine

To prepare: The income statements for S and NS Divisions of Company E for the year ended December 31, 20Y8

(4)

To determine

The increase in S Division, NS Division, and Company E income from operations as a result of transfer pricing

(5) (a)

To determine

The range of transfer price, if negotiated price approach is used

(b)

To determine

To suggest: The transfer price

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Answer 5

Chapter 24, Problem 24.6BPR

(1)

To determine

Transfer price: The price charged for the goods and services transferred among the divisions is referred to as transfer price.

Income statement: The financial statement which reports revenues and expenses from business operations and the result of those operations as net income or net loss for a particular time period is referred to as income statement.

(2)

To determine

The increase in S Division, NS Division, and Company E income from operations as a result of transfer pricing

(3)

To determine

To prepare: The income statements for S and NS Divisions of Company E for the year ended December 31, 20Y8

(4)

To determine

The increase in S Division, NS Division, and Company E income from operations as a result of transfer pricing

(5) (a)

To determine

The range of transfer price, if negotiated price approach is used

(b)

To determine

To suggest: The transfer price

Answer 6

Chapter 24, Problem 24.6BPR

(1)

To determine

Transfer price: The price charged for the goods and services transferred among the divisions is referred to as transfer price.

Income statement: The financial statement which reports revenues and expenses from business operations and the result of those operations as net income or net loss for a particular time period is referred to as income statement.

Answer 7

Chapter 24, Problem 24.6BPR

(1)

To determine

Transfer price: The price charged for the goods and services transferred among the divisions is referred to as transfer price.

Income statement: The financial statement which reports revenues and expenses from business operations and the result of those operations as net income or net loss for a particular time period is referred to as income statement.

Answer 8

(2)

To determine

The increase in S Division, NS Division, and Company E income from operations as a result of transfer pricing

Answer 9

(2)

To determine

The increase in S Division, NS Division, and Company E income from operations as a result of transfer pricing

Answer 10

(3)

To determine

To prepare: The income statements for S and NS Divisions of Company E for the year ended December 31, 20Y8

Answer 11

(3)

To determine

To prepare: The income statements for S and NS Divisions of Company E for the year ended December 31, 20Y8

Answer 12

(4)

To determine

The increase in S Division, NS Division, and Company E income from operations as a result of transfer pricing

Answer 13

(4)

To determine

The increase in S Division, NS Division, and Company E income from operations as a result of transfer pricing

Answer 14

(5) (a)

To determine

The range of transfer price, if negotiated price approach is used

Answer 15

(5) (a)

To determine

The range of transfer price, if negotiated price approach is used

Answer 16

(b)

To determine

To suggest: The transfer price

Answer 17

(b)

To determine

To suggest: The transfer price

Answer 18

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Answer 29

Ch. 24 - Differentiate between centralized and...Ch. 24 - Differentiate between a profit center and an...Ch. 24 - Prob. 3DQ Ch. 24 - What is the major shortcoming of using income from...Ch. 24 - In a decentralized company in which the divisions...Ch. 24 - How does using the return on investment facilitate...Ch. 24 - Why would a firm use a balanced scorecard in...Ch. 24 - What is the objective of transfer pricing?Ch. 24 - When is the negotiated price approach preferred...Ch. 24 - When using the negotiated price approach to...

Solution Summary: The author explains that if the market price is the appropriate transfer price for Company E, the buying division could prefer the negotiated price over market prices.

The increase in S Division, NS Division, and Company E income from operations as a result of transfer pricing

To prepare: The income statements for S and NS Divisions of Company E for the year ended December 31, 20Y8

The increase in S Division, NS Division, and Company E income from operations as a result of transfer pricing

The range of transfer price, if negotiated price approach is used

To suggest: The transfer price

Chapter 24 Solutions