Santa Corporation Accounting Assingment Help With Solution

Posted on April 20, 2017

Santa Corporation Accounting Assingment Help With Solution

 
MULTIPLE CHOICE
 

  1. Which of the following is the date on which a company determines the owners of the stock that will receive a dividend?
    1. date of record
    2. measurement date
    3. date of declaration
    4. date of payment

 

  1. Which is the date when a firm gives a stock option to employees?
    1. vesting date
    2. grant date
    3. exercise date
    4. market date

 

  1. Which is the date when employees elect to exchange the option and cash for shares of common stock?
    1. vesting date
    2. grant date
    3. exercise date
    4. market date

 

  1. Which is the first date when employees can usually exercise their stock options?
    1. vesting date
    2. grant date
    3. exercise date
    4. liquidating date

 

  1. In some countries the account Reserve for Contingencies may be most comparable to which of the following accounts for a company reporting under U.S. GAAP?
    1. Contingency Expense
    2. Retained Earnings Appropriated for Contingencies
    3. Unearned Contingency Fees
    4. Contingency Losses

 

  1. Which of the following is not a condition that requires capital lease accounting?
    1. The lease term extends for more than 70% of the assets economic
    2. The lease agreement transfers ownership of the leased asset to the
    3. The lease agreement contains a bargain purchase
    4. The present value of the minimum lease payments equals or exceeds 90% of the fair market value of the asset.

 

Questions 7 through 10 refer to the following information for the Santa Corporation:

 

Santa Corporation manufactures Christmas decorations and supplies throughout the world. The company owns property, plant, and equipment and also enters into operating leases for certain facilities. Assume that Santa’s incremental borrowing rate is 8%. The company’s tax rate is 40%. Listed below is selected financial data for Santa and a portion of the company’s operating lease footnote.

 201420132012
Property, Plant, & Equipment (net)$ 882,468$ 717,453$ 658,214
Total Assets1,756,8541,405,4841,254,896
Common Shareholders’ Equity867,992652,626587,951

 

Sales$2,922,915$2,415,632
Cost of Goods Sold2,016,8111,642,630
Depreciation Expense78,58467,542
Interest Expense106,66390,343
Net Income248,448217,407
 Santa Corp.

Operating Lease Disclosure

(amounts in thousands)

 
 Operating Lease Commitments at the end of 2014 
 

Year

 

Reported Lease Commitments

 
2015$148,239 
2016$252,800 
2017$278,327 
2018$279,210 
2019$285,452 
Beyond 2019$2,471,600 

 

  1. Using the information provided by Santa Corporation estimate the average life of the operating
    1. 66 years
    2. 66 years
    3. 10 years
    4. Not able to determine

 

  1. Use the information provided by Santa Corporation to calculate the present value of the operating leases. a. $2,142,003
  2. $2,024,945 c. $1,482,390 d.   $2,854,452

 

  1. Use the information provided by Santa Corporation to calculate the company’s 2014 fixed asset turnover ratio. a. 0
  2. 3.65
  3. 3.23
  4. 5.21

 

  1. Assuming that Santa Corporation was required to capitalize its operating lease how would the company’s fixed asset ratio change under this
    1. increase
    2. decrease
    3. no effect
    4. unable to determine

 

  1. Under the fair value method of accounting for stock options, firms must value stock options on the
    1. grant
    2. intrinsic
    3. measurement
    4. fair value

 

  1. Which of the following is not a criterion for defining a lease as a capital lease?
    1. Ownership is transferred by the end of the lease

 

  1. The lease contains an option to purchase the asset at a bargain
  2. The present value of the lease payments at the beginning of the lease is 75% or more than the value of the asset.
  3. The lease term is at least 75% of the economic life of the

 

  1. If a company leases equipment to other companies and records these leases as operating leases rather than capi- tal leases, its:
  2. recorded liabilities will be
  3. recorded assets will be
  • total cash flows will be
  1. leverage ratios will be
    1. I and III
    2. II and IV
    3. I only
    4. II, III and IV

 

  1. If a company that leases equipment from another company records these leases as operating leases rather than capital leases, its:
  2. recorded liabilities will be
  3. recorded assets will be
  • total cash flows will be
  1. leverage ratios will be
    1. I and III
    2. II and IV
    3. I only
    4. II, III and IV

 

  1. Which one of the following statements is false?
    1. Short-term obligations may be classified as long term if the company intends to refinance them on a long- term basis and can demonstrate the ability to do
    2. Violation of a long-term debt covenant automatically means the company must reclassify the debt as cur- rent.
    3. Current liabilities are recorded at their maturity value, and not their present
    4. If a bond is issued at a discount the effective interest rate is greater than the coupon

 

  1. A lessee must account for a lease as a capital lease if:
  2. lease transfers ownership to lessee at the end of the
  3. lease contains option to purchase the asset at the end of the lease at a bargain
  • lease is longer than 20
  1. present value of lease is greater than 10% of lessee’s
    1. I and II
    2. I, II and III
    3. I, III and IV
    4. I, II and IV

 

  1. Which of the following statements about stock dividends is true?
    1. Stock dividends increase the number of shares
    2. Stock dividends are more valuable than stock
    3. Stock dividends are recorded as a reduction in
    4. Stock dividends are dividends given in the form of stock from another

 

  1. An analyst should consider whether a company acquired assets through a capital lease or an operating lease because a company may structure:
    1. leases to be treated like capital leases to enhance its leverage
    2. leases to be treated like capital leases to enhance its cash
    3. leases to be treated like operating leases to enhance its leverage

 

  1. leases to be treated like operating leases to enhance its cash

 

 
 

How it Works

How It works ?

Step 1:- Click on Submit your Assignment here or shown in left side corner of every page and fill the quotation form with all the details. In the comment section, please mention product code mentioned in end of every Q&A Page. You can also send us your details through our email id support@assignmentconsultancy.com with product code in the email body. Product code is essential to locate your questions so please mentioned that in your email or submit your quotes form comment section.
 
Step 2:- While filling submit your quotes form please fill all details like deadline date, expected budget, topic , your comments in addition to product code . The date is asked to provide deadline.
 
Step 3:- Once we received your assignments through submit your quotes form or email, we will review the Questions and notify our price through our email id. Kindly ensure that our email id assignmentconsultancy.help@gmail.com and support@assignmentconcultancy.com must not go into your spam folders. We request you to provide your expected budget as it will help us in negotiating with our experts.
 
Step 4:- Once you agreed with our price, kindly pay by clicking on Pay Now and please ensure that while entering your credit card details for making payment, it must be done correctly and address should be your credit card billing address. You can also request for invoice to our live chat representatives.
 
Step 5:- Once we received the payment we will notify through our email and will deliver the Q&A solution through mail as per agreed upon deadline.
 
Step 6:-You can also call us in our phone no. as given in the top of the home page or chat with our customer service representatives by clicking on chat now given in the bottom right corner.

Features

Features for Assignment Help

Zero Plagiarism
We believe in providing no plagiarism work to the students. All are our works are unique and we provide Free Plagiarism report too on requests.

 

Relevancy
We believe in providing perfect, relevant and 100% accurate solutions to the student as per questions asked. All our experts are perfect in providing that so as to give unique experience to the students.

 

Three Stage Quality Check
We are the only service providers boasting of providing original, relevant and accurate solutions. Our three stage quality process help students to get perfect solutions.

 

 

100% Confidential
All our works are kept as confidential as we respect the integrity and privacy of our clients.

Related Services

 
True/False
 

  1. The lessor in a capital lease recognizes both a(n) asset and a liability equal to the present value of all future cash flows at the inception of the

 

  1. A capital lease arrangement is effectively a financed

 

  1. Under an operating lease agreement the lessee recognizes depreciation expense each period that the leased asset is

 

  1. A security that has both equity and debt characteristics is classified on the balance sheet as a

 

  1. For a contingent liability to be recognized on the balance sheet the dollar amount needs to be reasonably estimate-able.

 

  1. The grant date is the first date at which employees can exercise their stock

 

  1. Firms must value stock options on the vesting

 

  1. Stockholders are the residual claimants of a

 

  1. If the lease term is 75% or more of the economic life of the asset, the lease needs to be classified as a capital lease.

 

  1. Operating leases can inflate both return on assets and asset turnover

 

  1. A convertible bond is an equity investment, which is convertible into bonds at the option of the owner of the convertible

 
SHORT ESSAY
 

  1. Assume that you are currently negotiating a lease transaction in the role of the lessee. Discuss whether you would rather structure the lease as an operating lease or a capital lease and

 

  1. Why do companies issue stock dividends? Do shareholders benefit from receiving stock dividends? Is the com- pany’s motivation for stock splits different from that for stock dividends? If so, how is it different?

 

SHORT PROBLEM

 

  1. In the chart below, assign the directional effect (I = increase, D = decrease, or NE = no effect) of each of the following six transactions on the components of the book value of common shareholders’ equity. Don’t leave any spaces

 

  1. Issuance of $1 par value common stock for $100 per
  2. Stock options
  3. Cash dividend declared and
  4. Stock options
  5. A two-for-one stock split declared and
  6. Purchase of treasury stock

 

 

 

 

 

Item

 

 

Common Stock

 

Additional Paid-In Capital

 

 

Deferred Compensation

 

 

Retained Earnings

 

Treasury Stock at Cost

Total Common Shareholders’ Equity
a.      
b.      
c.      
d.      
e.      
f.      
       

 

 

  1. On January 1, 2014 the XYZ company granted options to buy 10,000 shares of the company’s common stock to the CEO at an exercise price equal to the closing price of their stock that day, $21 per share. On that day the options pricing model the company uses valued the options at $10 each. The CEO must wait 2 years before the options are exercisable. If unexercised, the options expire on December 31, 2023. On December 31, 2014, the stock of the company was trading at $25 per share. On June 30, 2016 the CEO exercised all of the options when the stock price was $46 per

 

REQUIRED:

 

  1. What line items related to the stock options (if any) would appear on the Statement of Cash Flow (and where in the statement) for the period ending December 31, 2014?

 

  1. What line items related to the stock options (if any) would appear on the Balance Sheet (and where in the statement) as of December 31, 2014?

 

  1. What would be the impact on net income for the year 2014 related to the stock options?

 

  1. What line items related to the stock options (if any) would appear on the Statement of Cash Flow (and where in the statement) for the period ending December 31, 2016?

 

  1. What would be the impact on net income for the year 2016 related to the stock options?

 

Product Code :Acc53

To get answer for this question, kindly click here (Note: Don’t forget to write the product code in comment section)

You can also email us at assignmentconsultancy.help@gmail.com but please mentioned product code in the mail body while sending emails.You can browse more questions to get answer in our Q&A sections here.

Summary
User Rating
5 based on 1 votes
URL