Question 2

The Concord Inc., a manufacturer of low-sugar, low-sodium, low-cholesterol TV dinners, would like to increase its market share in the Sunbelt. In order to do so, Concord has decided to locate a new factory in the Panama City area. Concord will either buy or lease a site depending upon which is more advantageous. The site location committee has narrowed down the available sites to the following three very similar buildings that will meet their needs. Building A: Purchase for a cash price of $618,700, useful life 28 years. Building B: Lease for 28 years with annual lease payments of $70,420 being made at the beginning of the year. Building C: Purchase for $653,900 cash. This building is larger than needed; however, the excess space can be sublet for 28 years at a net annual rental of $6,460. Rental payments will be received at the end of each year. The Concord Inc. has no aversion to being a landlord. Click here to view factor tables In which building would you recommend that The Concord Inc. locate, assuming a 12% cost of funds? (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to 0 decimal places, e.g. 458,581.)

		Net Present Value
Building A		$enter a dollar amount rounded to 0 decimal places
Building B		$enter a dollar amount rounded to 0 decimal places
Building C		$enter a dollar amount rounded to 0 decimal places

The Concord Inc. should locate itself in

select a building Building ABuilding BBuilding C

Question 3

Presented below are a number of independent situations. For each individual situation, determine the amount that should be reported as cash. 1. Checking account balance $928,400; certificate of deposit $1,438,400; cash advance to subsidiary of $983,530; utility deposit paid to gas company $191.

Cash balance

$

2. Checking account balance $501,500; an overdraft in special checking account at same bank as normal checking account of $19,280; cash held in a bond sinking fund $232,800; petty cash fund $350; coins and currency on hand $1,540.

Cash balance

$

3. Checking account balance $618,300; postdated check from customer $9,900; cash restricted due to maintaining compensating balance requirement of $103,800; certified check from customer $10,576; postage stamps on hand $559.

Cash balance

$

4. Checking account balance at bank $45,650; money market balance at mutual fund (has checking privileges) $51,780; NSF check received from customer $755.

Cash balance

$

5. Checking account balance $700,700; cash restricted for future plant expansion $515,200; short-term Treasury bills (which mature in 6 months) $186,470; cash advance received from customer $965 (not included in checking account balance); cash advance of $6,740 to company executive, payable on demand; refundable deposit of $24,520 paid to federal government to guarantee performance on construction contract.

Cash balance

$

Question 4

Cheyenne Company reports the following financial information before adjustments.

		Dr.			Cr.
Accounts Receivable		$134,200
Allowance for Doubtful Accounts					$2,550
Sales Revenue (all on credit)					817,200
Sales Returns and Allowances		51,990

Prepare the journal entry to record bad debt expense assuming Cheyenne Company estimates bad debts at (a) 5% of accounts receivable and (b) 5% of accounts receivable but Allowance for Doubtful Accounts had a $1,350 debit balance. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

No.	Account Titles and Explanation	Debit	Credit
(a)	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount
(b)	enter an account title	enter a debit amount	enter a credit amount
	enter an account title	enter a debit amount	enter a credit amount