Register now to access 7 million high quality study materials (What's Course Hero?) Course Hero is the premier provider of high quality online educational resources. With millions of study documents, online tutors, digital flashcards and free courseware, Course Hero is helping students learn more efficiently and effectively. Whether you're interested in exploring new subjects or mastering key topics for your next exam, Course Hero has the tools you need to achieve your goals.
3 Pages
"2-10-2010
Course: MGMT 351, Winter 2010School: Purdue
Rating:
Word Count: 299
Document Preview
20-16 EXERCISE The excess of the cumulative net gain or loss over the corridor amount is amortized by dividing the excess by the average remaining service period of employees. The average remaining service period is computed as follows: Expected future years of service = Average remaining service life per employee Number of employees 5, 600 Average remaining service life per employee = = 14. 400 Amortization of...
Unformatted Document Excerpt
Coursehero >> Indiana >> Purdue >> MGMT 351Course Hero has millions of student submitted documents similar to the one
below including study guides, practice problems, reference materials, practice exams, textbook help and tutor support.
Course Hero has millions of student submitted documents similar to the one
below including study guides, practice problems, reference materials, practice exams, textbook help and tutor support.
20-16 EXERCISE The excess of the cumulative net gain or loss over the corridor amount is amortized by dividing the excess by the average remaining service period of employees. The average remaining service period is computed as follows:
Expected future years of service = Average remaining service life per employee Number of employees 5, 600 Average remaining service life per employee = = 14. 400
Amortization of Net (Gain) or Loss (Gain) or Loss For the Year Ended December 31, 2010 2011 2012 2013 Projected Benefit Obligation (a) $4,000,000 4,520,000 5,000,000 4,240,000 Plan Assets (a) $2,400,000 2,200,000 2,600,000 3,040,000 Amount (300,000 (480,000 (210,000) (290,000) Accumulated OCI (G/L) (a) $ 0 300,000 780,000 550,000(d) Minimum Amortization of (Gain) Loss $ 0 0 20,000(c) 9,000(e)
Year 2010 2011 2012 2013 (a) (b) (c) (d) (e)
Corridor (b) $400,000 452,000 500,000 424,000
As of the beginning of the year. The corridor is 10 percent of the greater of the projected benefit obligation or plan assets. $780,000 $500,000 = $280,000; $280,000/14 = $20,000. $780,000 $20,000 $210,000 = $550,000. $550,000 $424,000 = $126,000; $126,000/14 = $9,000.
1
EXERCISE 20-20
General Journal Entries Annual Postretirement Expense Balance, Jan. 1, 2010 Service cost Interest cost Actual return Contributions Benefits Journal entry for 2010 Balance, Dec. 31, 2010 45,000 Dr. 26,400 Dr. 11,000 Cr. 10,000 Cr. 60,400 Dr. 10,000 Cr. 50,400 Cr. 270,400 Cr. Postretirement Asset /Liability 220,000 Cr.
Memo Record
Cash
Plan Assets 330,000 Cr. 110,000 Dr. 45,000 Cr. 26,400 Cr. 11,000 Dr. 10,000 Dr. 20,000 Dr. 20,000 Cr. 381,400 Cr. 111,000 Dr. 60,400 50,400 10,000
APBO
Postretirement Expense..................................................................... Postretirement Asset/Liability................................................. .......................................................................................
2
PROBLEM Cash 20-13 (a) HOLLENBECK FOODS INC. Postretirement Benefit Worksheet2010 General Journal Entries Annual Postretirement OCIGain/ Postretirement Expense Cash Loss Asset/Liability 70,000 Dr. 20,000 Dr. 15,000 Cr. 5,000 Dr. 80,000 Dr.
Memo Record APBO Plan Assets 200,000 Cr. 200,000 Dr. 70,000 Cr. 20,000 Cr. 15,000 Dr. 44,000 Dr. 65,000 Dr. 44,000 Cr.
Items Balance, Jan. 1, 2010 Service cost Interest cost* Actual return Unexpected gain** Contributions Benefits Journal entry, for 2010 Accumulated OCI, Dec. 31, 2009 Balance, Dec. 31, 2010 *$200,000 X .10 = $20,000 **$15,000 $10,000 = $5,000
65,000 Cr. 65,000 Cr.
5,000 Cr. 5,000 Cr. 0 5,000 Cr. 10,000 Cr. 10,000 Cr.
246,000 Cr. 236,000 Dr.
(b) Journal Entry Postretirement Expense............................................................ Other Comprehensive Income (G/L)............................ Postretirement Asset/Liability...................................... Cash............................................................................... Financial Statements Income Statement Postretirement expense......................................................... Comprehensive Income Net income................................................................................ Asset gain (loss).................................................................... Comprehensive income............................................................. Balance Sheet Liabilities Postretirement asset/liability......................................... Stockholders Equity Accumulated other comprehensive income..................
80,000
5,000 10,000 65,000 $80,000
$XXXX 5,000 $XXXX $10,000 $ 5,000
3
Find millions of documents on Course Hero - Study Guides, Lecture Notes, Reference Materials, Practice Exams and more.
Course Hero has millions of course specific materials providing students with the best way to expand
their education.
Below is a small sample set of documents:
Below is a small sample set of documents:
Purdue - MGMT - 351
EXERCISE 15-1 (a) Jan. 10 Cash (80,000 x $6). Common Stock (80,000 x $3). Paid-in Capital in Excess of Par. Organization Expense. Common Stock (5,000 x $3). Paid-in Capital in Excess of Par. Cash (30,000 x $8). Common Stock (30,000 x $3). Paid-in Capital
Purdue - MGMT - 351
EXERCISE 20-1 (a) Computation of pension expense: Service cost. Interest cost ($500,000 x .10). Expected return on plan assets. Prior service cost amortization. Pension expense for 2010. Pension Expense. Cash. Pension Asset /Liability. Other Comprehensive
Purdue - MGMT - 351
EXERCISE 20-9 (a) Note to financial statements disclosing components of 2010 pension expense: Note X: Net pension expense for 2010 is composed of the following components of pension cost: Service cost. Interest cost. Expected return on plan assets. Prior
Purdue - MGMT - 351
NameSection Homework Quiz61.Pension information for Woods, Inc. for the year 2011 is: Service cost Interest on projected benefit obligation Interest on vested benefits Amortization of prior service cost due to increase in benefits Expected return on pl
Purdue - MGMT - 351
EXERCISE 16-16 (a) Event Dates Outstanding Shares Outstanding Restatement 1.2 x 3.0 1.2 x 3.0 3.0 3.0 Fraction of Year 1/12 1/12 2/12 1/12 4/12 3/12 Weighted Shares 144,000 180,000 360,000 155,000 620,000 480,000 1,939,000Beginning balance Jan. 1Feb. 1 4
Purdue - MGMT - 351
EXERCISE 16-14 (a) 1/1/10 Unearned Compensation. Common Stock ($10 x 10,000). Paid-in Capital in Excess of Par. 12/31/11Compensation Expense ($500,000 5). Unearned Compensation. 500,000 100,000 400,000 100,000 100,000(b)7/25/14Common Stock. Paid-in Cap
Purdue - MGMT - 351
EXERCISE 16-4 (a) Cash . Bonds Payable. Premium on Bonds Payable. (To record issuance of $10,000,000 of 8% convertible debentures for $10,600,000. The bonds mature in twenty years, and each $1,000 bond is convertible into five shares of $30 par value comm
Purdue - MGMT - 351
EXERCISE 15-12 (a) 6/1 Retained Earnings. Dividends Payable. 6/14 6/30 No entry on date of record. Dividends Payable. Cash.(b)6,000,000 6,000,0006,000,000 6,000,000If this were a liquidating dividend, the debit entry on the date of declaration would b
Purdue - MGMT - 351
EXERCISE 15-8 (a) $1,000,000 x 6% = $60,000; $60,000 x 3 = $180,000. The cumulative dividend is disclosed in a note to the stockholders equity section; it is not reported as a liability. Preferred Stock (3,000 x $100). Common Stock (3,000 x 7 x $10). Paid
Purdue - MGMT - 351
Example Problem On Taxes Solution Income before Tax is $200,000. Tax rate is 40%. Financial Report To Shareholders $20,000 5,000 30,000 11,000 24,000 9,000 10,000 Tax Return $35,000 4,000 8,000 17,000 -3,000Depreciation Warranty expense Installment sales
Purdue - MGMT - 351
EXERCISE 19-4 (a) Pretax financial income for 2010. $ 80,000 Excess depreciation per tax return. (16,000) Excess rent collected over rent earned. 27,000 Nondeductible fines. 11,000 Taxable income. $102,000 Taxable income. $102,000 Enacted tax rate. 30% In
Purdue - MGMT - 351
EXERCISE 17-1 (a) 1 (b) 2 (c) 1 (d) 2 (e) 3 (f) 2EXERCISE 17-2 (a) January 1, 2010 Held-to-Maturity Securities. Cash. (b) December 31, 2010 Cash .30,000 Interest Revenue. (c) December 31, 2011 Cash .30,000 Interest Revenue. 30,000 30,000 300,000 300,000
Purdue - MGMT - 351
PROBLEM 17-7(a)February 1 Available-for-Sale Securities. Interest Revenue (4/12 x .10 x $300,000). Cash. 310,000 April 1 300,000 10,000Cash . 15,000 Interest Revenue ($300,000 x .10 x 6/12). 15,000 July 1 Available-for-Sale Securities. Interest Revenue
Purdue - MGMT - 351
Homework Quiz9 Name SectionRecall that: Cash + Other Assets = L + PIC + BRE + R X + G L D1. 2. 3. 4. 5. 6. 7. 8. 9.What was 2007 Net Income? What was the dollar amount of 2007 Dividends? (2 points) What was 2007 Treasury Stock purchases in shares? In d
Purdue - MGMT - 351
Homework Quiz8 Name SectionRecall that: Cash + Other Assets = L + PIC + BRE + R X + G L D Transaction 1. 2. 3. 4. On 1/19/10 ABC Companys corporate charter authorized 500,000 shares of $10 par value stock of which 300,000 shares had been issued (sold) an
Purdue - MGMT - 351
Homework Quiz7 Name 1. SectionPension Worksheet. Using the information below, complete the pension worksheet for 2010 on the next page.Amounts at December 31, 2009 a. Accumulated OCI (Loss) $91,000 (Prior service cost recognized in 2009) b. PBO Balance
Purdue - MGMT - 351
NameSection Homework Quiz6 ReplaceRecall that: Cash + Other Assets = L + PIC + BRE + R X + G L DTransaction 1. 2. 3. 4.ABC Company sold (issued) 10,000 shares of its $12 par value common stock for $31.50 per share. ABC Company purchased from sharehold
Purdue - MGMT - 351
M351 Notes, Class 13: Stockholders Equity, pages 740-756 A. Stockholders share proportionally: 1. 2. 3. 4. in profits and losses in management (right to vote for the board) in assets in liquidation in new issues of stock of the same class (preemptive righ
Purdue - MGMT - 351
M351 Notes, Class 11: Pensions and OPEB, pages 1067-1079 A. Pensions are to be recognized in the companys balance sheet and in the notes to its financial statements. B. In the companys balance sheet the net funded status (a net pension asset or a net pens
Purdue - MGMT - 351
Homework Quiz11 Name SectionABC Company had 552,000 issued and outstanding shares of $10 par common stock at 1/1/10. ABC also had 10,000 shares of $100 par, 6% convertible preferred stock issued and outstanding at 1/1/10. Each $100 par preferred share is
Purdue - MGMT - 351
M351 Notes, Class 21, Taxes Day 1, pp. 990-1005 A. Terminology: the following phrases all mean the same amount on the financial statement prepared for ownerspretax financial income, income before taxes, income for financial reporting, income for book purp
Purdue - MGMT - 351
Homework Quiz10 Name SectionABC Company had 490,000 issued and outstanding shares of $10 par common stock at 1/1/10. ABC also had 10,000 shares of $100 par, 6% preferred stock issued and outstanding at 1/1/10. During 2010 ABC did the following: a. Issued
Purdue - MGMT - 351
M351 Notes, Class 18: Dilutive Securities and EPS, pages 827-834 A. Restricted stock compensation transfers shares of stock to employees. The restricted shares cannot be sold, transferred, or pledged until the award vests (usually 3 to 5 years). During th
Purdue - MGMT - 351
M351 Notes, Class 15: Stockholders Equity, pages 765-774 A. The balance sheet version of the statement of stockholders equity appears on page 765 in Illustration 15-13. Another version of a statement of stockholders equity appears on page 766 in Illustrat
Purdue - MGMT - 351
M351 Notes, Class 17: Dilutive Securities and EPS, pages 811-827 A. Per share amounts are presented as needed for (see Illustration 16-7 on page 812): Income from continuing operations, net of tax Gain or loss from discontinued operations Income before ex
Purdue - MGMT - 351
M351 Notes, Class 16: Dilutive Securities and EPS, pages 794-811 A. At issuance Convertible Bonds are recorded as a straight debt instrument with all of the proceeds in debt accounts. For example, assume that ABC Company issues 2,000 bonds with a face val
Purdue - MGMT - 351
M351 Notes, Class 14: Stockholders Equity, pages 756-765 A. In order to pay cash dividends a company must have sufficient retained earnings and cash. B. There are four kinds of dividends: 1. 2. 3. 4. cash property liquidating stock (usually common)Divide
Purdue - MGMT - 351
M351 Notes, Class 20, Equity Method, Impairments, Category Transfers, pp. 870-883 A. Accounting using the equity method: When a company purchases shares of another companys common stock, the investment is recorded at cost. For example, assume an investor
Purdue - MGMT - 351
M351 Notes, Class 19, Investment in Debt Securities, pp. 856-870 A. Debt securities (issued by other companies, or governmental entities; does not include A/R and loans receivable as those instruments do not meet the definition of securities) are to be pl
Purdue - MGMT - 351
EXERCISE 19-8 (a) 2010 Income Tax Expense. Deferred Tax Asset ($20,000 x 40%). Deferred Tax Liability ($30,000 x 40%). Income Tax Payable ($830,000 x 40%). 2011 Income Tax Expense. Deferred Tax Asset ($10,000 x 40%). Deferred Tax Liability ($40,000 x 40%)
Purdue - MGMT - 351
Homework Quiz12 Name SectionABC Companys pretax accounting income is $500,000 and its tax rate is 40%. The following items cause taxable income to be different from pretax accounting income: a. Depreciation expense on the tax return is $120,000 and is $9
Purdue - MGMT - 351
M351 Notes, Class 22, Taxes Day 1, pp. 1006-1011 A. Loss carrybackwhen a company has a net operating loss on its tax return, it may carry back the loss to the two previous years and offset profits in those two previous years and receive refunds for taxes
Purdue - MGMT - 351
M351 Notes, Class 22, Taxes Day 1, pp. 1006-1011 A. Loss carrybackwhen a company has a net operating loss on its tax return, it may carry back the loss to the two previous years and offset profits in those two previous years and receive refunds for taxes
Purdue - MGMT - 351
Name Final Exam Tentative Solution Management 351 Spring 2010Section:1. This exam consists of 20 multiple choice items and 4 problems (with several parts each). The exam is 15 pages plus this cover page. Please check to see that your exam document is co
Purdue - MGMT - 351
Statement of Cash Flows Example Problem Sales Cost of Goods Sold Depreciation Expense Gain on sale machinery Net income Accounts Receivable Inventory Accounts Payable Machinery Accumulated Depreciation 2011 10,000 (6,000) (900) 480 3,580 12/31/11 1,000 1,
Purdue - MGMT - 351
M351 Notes, Class 25: Changes & Errors, pages 1197-1214 A. Correction of errors: Restate (go back and change [write over] presented statement amounts to change incorrect statement amounts to correct amounts. Also make a journal entry, if necessary, to cha
Purdue - MGMT - 351
Homework Quiz14 Name SectionABC Company acquired put into service a depreciable asset at the beginning of 2006. The asset had a cost of $600,000, residual value of $50,000, and expected life of 8 years. At the beginning of 2009 ABC estimated that the rem
Purdue - MGMT - 351
M351 Notes, Class 24: Changes & Errors, pages 1180-1197 A. Changes in accounting principle: Report retrospectively: go back and change (write over) presented statement amounts as if the company had always been on the new accounting principle). See Illustr
Purdue - MGMT - 351
Notes for Class 23 A. Presentation of Deferred Taxes on the Balance Sheet 1. Individual Deferred Tax Assets and Liabilities are reported as current or noncurrent based on the classification of the related asset or liability (for example, the Deferred Tax
Purdue - MGMT - 351
Error Example #1Sales Less: Depreciation Exp. Income before taxes Less: Tax Expense Net Income BRE Add: Net Income ERE Cash PP&E Less: Accum, Depreciation Total Assets Current Liabilities Long term debt Common Stock ERE Total Liabilities & Equity 2007 20
Purdue - MGMT - 351
Homework Quiz15 Name Section AmountABC Company has the following information for the year ended 2009. Item Accounts payable increase Accounts receivable increase Common stock increase Depreciation expense Income taxes payable increase (current) Inventory
Purdue - MGMT - 351
M351 Notes, Class 26: Statement of Cash Flows, pages 1242-1258 A. The Statement of Cash Flows has three elements: Cash Flows From Operations Cash Flows From Investment Cash Flows From Financing B. There are two methods of preparing Cash Flow From Operatio
Purdue - MGMT - 411
Lecture 2: Quantitative ReviewQuantitative Review: Returns on securities and portfolios Stats: means, variances, covariances, correlations, regressions BKM chapter 5Readings:Review: Asset classes, securities (differ w.r.t. return/risk) Invest directl
Purdue - MGMT - 411
Lecture 2: Quantitative Review - AddendumQuantitative Review: Returns on securities and portfolios Stats: means, variances, covariances, correlations, regressions BKM chapter 5Readings:Part A - Outline:-How to measure returns?-for securities & port
Purdue - MGMT - 411
Lecture 1: IntroductionCapital Markets and Securities Trading Readings: BKM, Chapter 2 and Chapter 3Review: Financial markets are absolutely vital to the world (as we know it) Financial markets give access to capital Financial markets give opportunity
Purdue - MGMT - 411
MGMT41100 B.-H. Hwang Spring 2010Practice Problems #1 - Solutions 1. Toyota stock has the following probability distribution of expected prices one year from now:a) If you buy Toyota today for $55 and it will pay a dividend during the year of $4 per sha
Purdue - MGMT - 411
MGMT41100 B.-H. Hwang Spring 2010Practice Problems #2 - Solutions 1. You invest a total of $100 in (1) a risky asset with an expected rate of return of 0.11 and a standard deviation of 0.21 and (2) a risk-free asset with a rate of return of 0.045. a) How
Purdue - MGMT - 411
Course Syllabus Krannert School of Management, Purdue University MGMT 41100 Investment Management Spring 2010 Rawls Hall 1057 (classroom) Prof. Byoung-Hyoun Hwang Krannert 540 (office) bhwang@purdue.edu (e-mail) http:/www.bhwang.com (website)This course
Purdue - MGMT - 411
Formula Sheet MGMT41100(Zero Dividend Growth Model)(Capital Allocation Line)(Capital Market Line)(CAPM)(Fama-French-3-Factor-Model)
Purdue - MGMT - 411
Lecture 2: Quantitative ReviewSolution SlidesSlides with problems have white background Slides with solutions have red background4/9/11Portfolio weights can be positive (a long position) or negative (a short position) Equity - pos: you buy/buy on marg
Purdue - MGMT - 411
Lecture 6: Market Efficiency The Efficient Market Hypothesis Empirical Evidence BKM chapter 8Readings:Efficient Market HypothesisPrices are (on average) rightd d Pt = Et t +1 + t + 2 2 + (1 + r ) (1 + r ) Investors use all available information in
Purdue - MGMT - 411
Lecture 4: Testing Asset Pricing Models Testing the Capital Asset Pricing Model (CAPM) Individual Investor BehaviorReadings:BKM chapter 711ReviewIn a world where the CAPM holds, which one of the following is not a true statement regarding the capit
Purdue - MGMT - 411
Lecture 6: Market Efficiency Limits to arbitrage Behavioral Theories BKM chapter 8Readings:Efficient Market HypothesisScenario: Fords fundamental value is $20. Overly pessimistic investors push down the price to $15. Our assumption has been that arbi
Purdue - MGMT - 411
Midterm 2 Review Session Course overview Sample problemsMidterm2:Tuesday, March 9 (PHYS114) Logistics: You have 1h 30 min Exam is closed book and closed notes (I will provide the formula sheet) Bring a calculator Others: Write answers on answer page D
Purdue - MGMT - 411
April 2, 2010MGMT411: Checklist for Special Topics I: Fixed Income-Basic concept + terminology + types of bonds How to price a bond (same discount rate for all coupon payments + face value; different discount rates for coupon payments + face value) Con
Purdue - MGMT - 411
Purdue - MGMT - 411
Relevant Chapters for Special Topics III: Equity/Common Stock I believe the most relevant sections in BKM (8th edition) are: Section 12.6 12.7 Dont worry about industry life cycles and industry structure and performance 13.3 Just skim 13.4 Just skim Remem
Purdue - MGMT - 411
Purdue - MGMT - 411
Purdue - MGMT - 411
Relevant Chapters for Special Topics II: Derivatives I believe the most relevant sections in BKM (8th edition) are: Section 15.1 Dont worry about option clearing corporation, other listed options 15.2 16.2 17.1 Remember that we also covered material that
Purdue - MGMT - 411
Formula Sheet MGMT41100(Stocks) (Spot Rate) (Forward Rate)(Bonds)For small interest rate changes: , where(Binomial)(Risk-neutral)(zero dividend growth model)(constant dividend growth model)(portfolio p consists of two assets: market portfolio + ri