Distinguish between measuring assets based on current cost and historical cost.

Listed below are transactions that might be reported as investing and/or financing activities on a statement of cash flows. Possible reporting classifications of those transactions are provided also. Required: Indicate the reporting classification of each transaction by entering the appropriate classification code. Problems Classifications +I Investing activity (cash inflow) -I Investing activity (cash outflow) +F Financing activity (cash inflow) -F Financing activity (cash outflow) N Noncash investing and financing activity X Not reported as an investing and/or a financing activity. Transactions +I 1. Sale of land. 2. Issuance of common stock for cash. 3. Purchase of treasury stock. 4. Conversion of bonds payable to common stock. 5. Lease of equipment. 6. Sale of patent. 7. Acquisition of building for cash. 8. Issuance of common stock for land. 9. Collection of note receivable (principal amount). 10. Issuance of bonds. 11. Issuance of stock dividend. 12. Payment of property dividend. 13. Payment of cash dividends. 14. Issuance of short-term note payable for cash. 15. Issuance of long-term note payable for cash. 16. Purchase of marketable securities (“available for sale”). 17. Payment of note payable. 18. Cash payment for 5-year insurance policy. 19. Sale of equipment. 20. Issuance of note payable for equipment. 21. Acquisition of common stock of another corporation. 22. Repayment of long-term debt by issuing common stock. 23. Payment of semiannual interest on bonds payable. 24. Retirement of preferred stock. 25. Loan to another firm. 26. Sale of inventory to customers. 27. Purchase of marketable securities (cash equivalents).

Define relevant costs. Why are historical costs irrelevant?

Comfy Corporation manufactures furniture in several divisions, including the patio furniture division. The manager of the patio furniture division plans to retire in two years. The manager receives a bonus based on the division’s ROI, which is currently 7%. One of the machines that the patio furniture division uses to manufacture the furniture is rather old, and the manager must decide whether to replace it. The new machine would cost $35,000 and would last 10 years. It would have no salvage value. The old machine is fully depreciated and has no trade-in value. Comfy uses straight-line depreciation for all assets. The new machine, being new and more efficient, would save the company$5,000 per year in cash operating costs. The only difference between cash flow and net income is depreciation. The internal rate of return of the project is approximately 7%. Comfy Corporation’s weighted-average cost of capital is 5%. Comfy is not subject to any income taxes. 1. Should Comfy Corporation replace the machine? Why or why not? 2. Assume that "investment" is defined as average net long-term assets (that is, after depreciation) during the year. Compute the project's ROI for each of its first five years. If the patio furniture manager is interested in maximizing his bonus, would he replace the machine before he retires? Why or why not? 3. What can Comfy do to entice the manager to replace the machine before retiring?

The vapor-phase molar volume of a particular compound is reported as $23,000 \mathrm{cm}^{3} \cdot \mathrm{mol}^{-1}$ at 300 K and 1 bar. No other data are available. Without assuming ideal-gas behavior, determine a reasonable estimate of the molar volume of the vapor at 300 K and 5 bar.

A $0.35 m^3$ vessel is used to store liquid propane at its vapor pressure. Safety considerations dictate that at a temperature of 320 K the liquid must occupy no more than 80% of the total volume of the vessel. For these conditions, determine the mass of vapor and the mass of liquid in the vessel. At 320 K the vapor pressure of propane is 16.0 bar.