Answer:
$2.1 million
Explanation:
Colin will retire at 67 and expects to live 28 more years. Be believes that he will need approximately $112,500 (in current dollars) per year to live while he is retired. His social security benefits are $30,000 + $20,000 in a government sponsored annuity (in current dollars) per year, so that means that he needs to cover the remaining $62,500. In order to calculate this, I will assume that Colin receives his first distribution on his 67th birthday (annuity due) and each distribution is made on an annual basis and received on the subsequent birthdays until he turns 94 (28th distribution).
The $62,500 that Jordan expects to need once he retires must be adjusted to inflation (3%). In 27 years they will equal $62,500 x (1 + 3%)²⁷ = $138,830.56
Using an excel spreadsheet, I calculated the present value of Colin's 28 distributions using an 8% discount rate = $2,064,637.04 , which we can round up to $2.1 million
Colin currently has $200,000 in his retirement account and in 27 years (age 67), his account will be worth $200,000 x (1 + 8%)²⁷ = $1,597,612.29
this means that Colin will be $2,064,637.04 - $1,597,612.29 = $467,024.75 short
using the future value of an annuity formula, we can calculate the annual contribution:
annual contribution = future value / annuity factor
future value = $467,024.75 FV annuity factor, 8%, 27 periods = 87.35077annual contribution = $467,024.75 / 87.35077 = $5,346.54
You have just discovered an error in the implementation plan that will prevent you from meeting a milestone date. The BEST thing you can do is: Select one: a. Develop options to meet the milestone date. b. Change the milestone date. c. Remove any discussion about dates in the project status report. d. Educate the team about the need to meet milestones.
The best thing one can do after discovering an error in the implementation plan is to develop an options to meet the milestone date.
What is an implementation plan?An implementation plan refers to a plan that outlines the steps to take when trying to accomplish a shared goal, objective, preset goals etc.
Thus, the option of develop an options to meet the milestone date will help to ensure the meeting holds
Therefore, the Option A is correct.
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A plastic manufacturing company has made a strategic decision to purchase a fleet of 3- D printers and use these printers to produce small and medium products for customers, instead of using traditional injection-mold techniques. Your Project Manager has projected that the new system will reduce labor costs by $36,000 each year over the next five years (Years 1-5). The purchase price (including installation and testing) of the new 3-D printers is $92,700. At the end of the project, the printers will be sold in the secondary market for $17,500. What is the net present value of this investment if the discount rate is 10.75% per year
Answer:
$51,696.44
Explanation:
Net present value is the present value of after-tax cash flows from an investment less the amount invested.
NPV can be calculated using a financial calculator
Cash flow in year 0 = $-92,700
Cash flow each year from year 1 to 4 = $36,000
Cash flow in year 5 = r $17,500 + $36,000 = $53,500
I = 10.75%
NPV = $51,696.44
To find the NPV using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
A corporate bond with a 5 percent coupon has 10 years left to maturity. It has a credit rating of BBB and a yield to maturity of 8.0 percent. Recently, the firm has gotten into some trouble and the rating agency is downgrading the firm’s bonds to BB. The new appropriate discount rate will be 9 percent. What will be the change in the bond's price, in dollars? Assume interest payments are paid semi-annually and par value is $1,000. (Round your answer to 2 decimal places. Do not include a dollar sign. If the price decreases, use a negative "-" sign. If the price increases, use a "+" sign.)
Answer:
$56.31
Explanation:
The computation of change in the bond's price, in dollars is presented with the help of a spreadsheet that has been attached.
Price at BBB ratings = $796.15
Price at BB ratings = $739,84
Change in bond's price is come from
= $796.15 - $739.84
= $56.31
Hence, the change in the bond price is $56.30 and the same is to be considered
Halpern Corporation is authorized to issue 1,000,000 shares of $3 par value common stock. During 2018, its first year of operation, the company has the following stock transactions.
Jan.1 Paid the state $5,000 for incorporation fees.
Jan.15 Issued 500,000 shares of stock at $6 per share.
Jan.30 Attorneys for the company accepted 500 shares of common stock as payment for legal services rendered in helping the company incorporate. The legal services are estimated to have a value of $7,000.
July2 Issued 100,000 shares of stock for land. The land had an asking price of $900,000. The stock is currently selling on a national exchange at $8 per share.
Sept.5 Purchased 15,000 shares of common stock for the treasury at $8 per share.
Dec.6 Sold 11,000 shares of the treasury stock at $11 per share.
Required:
Journalize the transactions for Halpern Corporation.
Answer and Explanation:
The Journal entries are shown below:-
1. Organization Expenses Dr, $5,000
To Cash $5,000
(Being Organization Expenses is recorded)
2. Cash Dr, $3,000,000 (500,000 × $6)
To Common Stock $1,500,000 (500,000 × $3)
Paid-In Capital in Excess of Par-Common Stock $1,500,000
(Being cash is recorded)
3. Organization Expenses Dr, $7,000
To Common Stock $1,500 (500 × $3)
Paid-In Capital in Excess of Par-Common Stock $5,500
(Being paid in capital in excess is recorded)
4. Land Dr, $800,000 (100,000 × 8 )
To Common Stock $300,000 (100,000 × $3)
To Paid-In Capital in Excess of Par-Common Stock $500,000
(Being land is recorded)
5. Treasury Stock Dr, $120,000 (15,000 × $8)
To Cash $120,000
(Being treasury stock is recorded)
6. Cash Dr, $121,000 (11,000 × $11)
To Treasury Stock $88,000 (11,000 × $8)
To Paid-In Capital from Treasury Stock $33,000
(Being cash is recorded)
At Mighty-Tuf Industrial Products Group, 30 percent of its employees are neither a citizen of the parent company nation nor the host nation where they have a manufacturing plant. These employees would be classified as
Employees that are not from the parent country or the host nation are known as third-country nationals.
Who are third-country nationals?These are those employees that do not come from the country the company was founded in, or from the country that the company is operating in.
These employees are usually hired based on competence and not due to internal policies dictating that a certain number of nationals or home citizens must be hired.
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Companies normally pay dividends quarterly and they go through a specific process. Firms first declare the quarterly dividend. The declaration date is the date on which a firm's directors issue a statement declaring a dividend. The company closes its stock transfer books at the close of business on the holder-of-record date. If the company lists the stockholder as an owner on this date, then the stockholder receives the dividend. The ex-dividend date is the date on which the right to the current dividend no longer accompanies a stock; it is usually two business days prior to the holder-of-record date. Finally, the payment date is the date on which a firm actually mails dividend checks. Give the correct response to the following question. Seller sells Indigo Company stock to Buyer on the ex-dividend date. Which of the following statements is correct?
a. Neither Seller nor Buyer will receive the dividend. The dividend rolls over to a special account for the next quarter's dividend.
b. Buyer is now the owner of the stock, so Buyer receives the dividend.
c. Because the stock was sold on the ex-dividend date, a special rule applies where the dividend is divided between Buyer and Seller
d. Because the stock was sold on the ex-dividend date, Seller would still be considered the owner of the stock and would receive the dividend
Answer:
d. Because the stock was sold on the ex-dividend date, Seller would still be considered the owner of the stock and would receive the dividend
Explanation:
since the buyer purchased on ex dividend date he will not receive the next dividend but the seller will. If he had purchased before the ex dividends date he would receive next dividend. Ex dividend dates are usually one to two business days before record date or holder of record date in which owner of stock is recorded. However the ex dividend date does not consider stock holder as per stock transfer until holder of record date
(Ignore income taxes in this problem.) Alesi Corporation is considering purchasing a machine that would cost $283,850 and have a useful life of 5 years. The machine would reduce cash operating costs by $81,100 per year. The machine would have a salvage value of $107,100 at the end of the project. (Assume the company uses straight-line depreciation.) Required: a. Compute the payback period for the machine. (Round your answer to 2 decimal places.) b. Compute the simple rate of return for the machine. (Round your intermediate answers to nearest whole dollar and your final answer to 2 decimal places.)
Answer:
(A) Payback period for the machine= 3.5 years
(B) Simple rate of return for the machine= 87.5%
Explanation:
Alesu corporation is considering purchasing a machine that would cost $283,850
The useful life is 5 years
The machine would reduce cash operating costs by $81,100 per year
The salvage value is $107,100
(A) The payback period for the machine can be calculated as follows
= cost/amount of cash flow
= 283,850/81,100
= 3.5 years
(B) The simple rate of return for the machine can be calculated as follows
First we calculate the depreciation expense
= 283,850-107,100/5
= 176,750/5
= 35,350
Annual incremental income= cost savings -depreciation expenses
= 283,850-35,350
= 248,500
Simple rate of return = annual incremental income/cost × 100
= 248,500/283,850 × 100
= 0.875 × 100
= 87.5%
Hakara Company has been using direct labor costs as the basis for assigning overhead to its many products. Under this allocation system, product A has been assigned overhead of $27.80 per unit, while product B has been assigned $13.23 per unit. Management feels that an ABC system will provide a more accurate allocation of the overhead costs and has collected the following cost pool and cost driver information:
Cost Pools Activity Costs Cost Drivers Activity Driver Consumption
Machine setup $360,000 Setup hours 4,000
Materials handling 85,000 Pounds of materials 17,000
Electric power 50,000 Kilowatt-hours 25,000
The following cost information pertains to the production of A and B, just two of Hakara's many products:
A B
Number of units produced 4,000 10,000
Direct materials cost $39,000 $38,000
Direct labor cost $22,000 $27,000
Number of setup hours 100 200
Pounds of materials used 2,000 2,000
Kilowatt-hours 2,000 4,000
Required:
Use activity-based costing to determine a unit cost for each product.
Answer:
Unitary cost A= $21
Unitary cost= $10.1
Explanation:
First, we need to calculate the predetermined overhead rate for each activity:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Machine setup= 360,000/4,000= $90 per setup hour
Materials handling= 85,000/17,000= $5 per pound
Electric power= 50,000/25,000= $2 per killowat
Now, we can allocate overhead to each product:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Product A:
Machine setup= 90*100= $9,000
Materials handling= 5*2,000= $10,000
Electric power= 2*2,000= $4,000
Total= $23,000
Product B:
Machine setup= 90*200= $18,000
Materials handling= 5*2,000= $10,000
Electric power= 2*4,000= $8,000
Total= $36,000
Finally, the total cost and unitary cost:
Product A:
Total cost= 39,000 + 22,000 + 23,000= $84,000
Unitary cost= 84,000/4,000= $21
Product B:
Total cost= 38,000 + 27,000 + 36,000= $101,000
Unitary cost= 101,000/10,000= $10.1
James uses a random letter and random number generator to create his bank account password. This action helps safeguard his bank account against ______.
a. phishing
B. HACKING
c. dumpster diving
d. skimming
Answer: B. HACKING
Explanation: just did it
James uses a random letter and random number generator to create his bank account password. This action helps safeguard his bank account against "hac-king". The correct option is B.
The hac-king refers to the activity which is performed of compromising digital devices and network by gaining unauthorized access to an account or computer system.
The types of hac-king are as follows, the system, mobile, computer, network, password and the website hac-king. James uses a random letter and random number generator to create his bank account password is hac-ked by the password hac-king.
Therefore, the correct option is B.
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What is a standard of living?
A. The lowest level in a social class
B. The ability to provide for your needs and wants
C. The arrangement of people in a society
D. A list of purchases you hope to make in your lifetime
The maximum dollar amount that can be borrowed using the cash advance provision on a credit card is called the:
Almonds are a crop that grows on trees. Farmers do not need to replant trees every year to produce a crop of almonds. It takes at least five years after planting for trees to bear fruit. Several factors such as weather, disease, and long term projections about price impact the supply of almonds available. Barley is a grass that must be planted each year to produce a crop. The growing season is short, about three to four months. Several factors influence farmers' decisions to plant barley each year, including price, weather, and disease.
Based on this information. Which of the followings are true?
a. Almonds have a more inelastic supply in the short run because little can be done to change production in the short run.
b. It is impossible to infer anything about the price elasticity of supply for these two crops.
c. Barley has a more inelastic supply in the short run because barley is more dependent on price in the short run.
d. The crops have the same price elasticity of supply because they are both agricultural commodities.
Answer: a. Almonds have a more inelastic supply in the short run because little can be done to change production in the short run.
Explanation:
Based on the scenario given in the question, the correct answer will be:
(a) almonds have a more inealstic supply in the short run because little can be done to change production in the short run.
Due to the fact that option the determinants of supply of almonds and barley are mentioned, option (b) isn't correct.
For option (c), the supply of barley isn't inelastic. This can be seen as the output of barley can be increased more than the output of almond.
For option (d), just because they're both agricultural commodities doesn't mean that they'll have same price elasticity of supply.
The true statement should be option a. Almonds have a more inelastic supply in the short run because little can be done to change production in the short run.
Supply:Almonds should have a more inelastic supply in the short run since little could be done to vary the production in the short run. because of this, the other options don; 't have an inelastic supply since barley output should be more than the almond output.
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The Ingraham Corporation has $1,000 par value bonds outstanding. The bonds have an annual coupon rate of 8.90 percent and an annual yield to maturity of 8.03 percent. The annual inflation rate is 2.66 percent. What is the real rate of return on the bonds?
Based on the inflation rate and the yield to maturity, the real rate of return on the bonds will be 5.23%.
What is the real rate of return?This can be found by the formula:
= (( 1 + nominal Return) / ( 1 + Inflation rate)) - 1
Solving gives:
= ( ( 1 + 8.0%) / ( 1 + 8.90%)) - 1
= 1.0523 - 1
= 5.23%
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Federal Trade Commission (FTC) regulations require that: Multiple Choice all used cars be sold with a warranty. used car buyers be informed of whether or not the vehicle comes with a warranty. used cars with over 100,000 miles be sold only by the individual owner, not by a dealer. major repairs must be made on all used cars prior to being offered for sale. the seller of a defective used car pay half the cost of the required repairs.
Federal Trade Commission (FTC) regulations require that used car buyers be informed of whether or not the vehicle comes with a warranty.
What is the Federal Trade Commission
The Federal trade commission is a body that is saddled with the responsibility of enforceing federal consumer protection laws which are aimed at preventing fraud, deception and unfair business practices.
The Commission also prevents federal antitrust laws that guides against anticompetitive mergers and other business practices that could result in higher prices, fewer choices, or less innovation.
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What is the Governance Structures mean
Collections from customers are normally 68 percent in the month of sale, 17 percent in the month following the sale, and 13 percent in the second month following the sale. The balance is expected to be uncollectible. All purchases are on account. Management takes full advantage of the 1 percent discount allowed on purchases paid for by the tenth of the following month. Purchases for August are budgeted at $70,000, and sales for August are forecasted at $76,000. Cash disbursements for expenses are expected to be $15,800 for the month of August. The company’s cash balance on August 1 was $28,000. Required: Prepare the expected cash collections during August. Prepare the expected cash disbursements during August. Calculate the expected cash balance on August 31.
Answer:
A. $ 72,780
B. $80,150
C. $20,630
Explanation:
A. Preparation of the expected cash collections during August.
Expected collection August
Month Sales Percent Expected collections
June 74,000 69% 51,060
July 78,000 19% 14,820
August 69,000 10% 6,900
Total$ 72,780
2. Preparation of the expected cash disbursements during August.
Expected cash disbursement
during August
July purchases to be paid in August $65000
Less 1% cash discount 650
Net purchases cost$64,350
Add Cash disbursements for expenses 15,800
Total payments$80,150
3. Calculation for the expected cash balance on August
Expected cash balance on 31 August
Balance, 1 August$28,000
Add Expected receipts 72,780
Cash available$100,780
LessExpected payments 80,150
Expected balance, 31 August$20,630
Cheryl wants to have $2,000 in
spending money to take on a
trip to Disney World in three
years. How much must she
deposit now in a savings
account that pays 5% to have
the money she needs in three
years?
Answer:
$1, 727.68
Explanation:
Cheryl wants to have $2000 three years from now in an account that pays 5%
The $2000 is equivalent to the Future value when applying the compound interest formula. The present value is the amount she needs to invest now.
Fv= PV (1+5/100)^3
$2000 = PV(1+0.05)^3
$2000 =Pv 1.157625
Pv = $2000/1.157625
Pv= 1,727.68
Cheryl has to invest $1, 727.68
For the current year, Hodges Department Store reported the following data:
Goods available for sale $1,074,450
December 31, inventory balance 85,430
The current replacement cost of inventory on balance sheet data is $91,730. Using the lower-of-cost-or-market rule, what is the cost of goods sold for Hodges
Department Store?
A. 5897,290
O B. $982.720
C. $989,020
D. $898,060
Using the lower-of-cost-or-market rule, what is the cost of goods sold for Hodges is: C. $989,020.
Cost of good soldUsing this formula
Cost of goods sold=Goods available for sale-Inventory balance
Where:
Goods available for sale=$1,074,450
Inventory balance=$85,430
Let plug in the formula
Cost of good sold=$1,074,450-$85,430
Cost of good sold=$989,020
Inconclusion Using the lower-of-cost-or-market rule, what is the cost of goods sold for Hodges is: C. $989,020.
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Income statement data for Whirlpool Industries from the company’s 2016 financial statements follow. Use these data to reformulate the income statement for 2014, 2015, and 2016 under the assumption that warranty expense is a constant percentage of revenue across all three years. Specifically, compute the adjustments to: warranty expense, income tax expense, and net income. The company’s tax rate is 30%.
12 Months Ended ($ millions) Dec. 31, 2016 Dec. 31, 2015 Dec. 31, 2014
Net sales $23,928 $24,101 $23,082
Warranty expense 366 610 372
Required:
Compute the average warranty expense to net sales rate over the past three years.
1. The computation of the adjustments to warranty expense, income tax expense, and net income and the reformulation of the income statement for 2014, 2015, and 2016 for Whirlpool Industries are as follows:
12 Months Ended ($ millions) Dec. 31, 2016 Dec. 31, 2015 Dec. 31, 2014
Net sales $23,928 $24,101 $23,082
Warranty expense 366 610 372
Taxable income $23,562 $23,491 $22,710
Tax expenses (30%) $7,069 $7,047 $6,813
Net income $16,493 $16,444 $15,897
2. The computation of the average warranty expense to net sales rate over the past three years is as follows:
12 Months Ended ($ millions) Dec. 31, 2016 Dec. 31, 2015 Dec. 31, 2014
Net sales $23,928 $24,101 $23,082
Warranty expense 366 610 372
Warranty expenses to
net sales rate 1.5296% 2.5310% 1.6116%
Average warranty expenses to net sales rate = 1.89% (5.6722/3)
Data and Calculations:12 Months Ended ($ millions) Dec. 31, 2016 Dec. 31, 2015 Dec. 31, 2014
Net sales $23,928 $24,101 $23,082
Warranty expense 366 610 372
Warranty expenses to
net sales rate 1.5296% 2.5310% 1.6116%
Average warranty expenses to net sales rate = 1.89% (5.6722/3)
Thus, the average warranty expense to net sales rate over the past three years is 1.89%.
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Common stock, par $12 per share, 49,000 shares outstanding. Preferred stock, 8 percent, par $17.5 per share, 7,710 shares outstanding. Retained earnings, $238,000. On January 1, 2019, the board of directors was considering the distribution of a $63,800 cash dividend. No dividends were paid during 2017 and 2018. Required: Determine the total and per-share amounts that would be paid to the common stockholders and to the preferred stockholders under two independent assumptions: The preferred stock is noncumulative. The preferred stock is cumulative. Why were the dividends per share of common stock less for the cumulative preferred stock than the noncumulative preferred stock
Answer:
a. The Preferred stock is noncumulative.Preferred stock
= 7,710 * 17.5 * 8%
= $10,794
Per share
= 10,794/7,710
= $1.40
Common Shareholders.
= 63,800 - 10,794
= $53,006
Per share
= 53,006/49,000
= $1.08
b. Preferred stock is cumulative.This means that if preferred dividends are not paid in a year, they will be accrued and paid when they can.
Preferred stock
= 7,710 * 3 years (2017,2018,2019)
= $23,130
Per share = 23,130/7,710
= $3
Common stock
= 63,800 - 23,130
= $40,670
Per share
= 40,670/49,000
= $0.83
c. Why were the dividends per share of common stock less for the cumulative preferred stock than the noncumulative preferred stock?
b. The dividends in arrears on the preferred stock had to be fulfilled before dividends could be paid for the current year.
If output is given by a Cobb-Douglas production function, real GDP is growing at 4%, the capital to labor ratio is constant, and the labor force is growing at 1.5%, what is the growth rate of the Solow residual
Based on the capital to labor ratio and the labor force growth rate, the growth rate of the Solow residual is 2.5%.
What is the Solow Residual?
This is the part of the growth in real GDP that is not as a result of an increase in capital or labor. The capital remained at zero growth and the labor was growing at 1.5%.
The Solow residual growth rate will then be:
= Real GDP growth rate - Labor force growth
= 4% - 1.5%
= 2.5%
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Preston Department Store has a new promotional program that offers a free gift-wrapping service for its customers. Preston's customer-service department has practical capacity to wrap 5,000 gifts at a budgeted fixed cost of $4,950 each month. The budgeted variable cost to gift-wrap an item is $0.35. During the most recent month, the department budgeted to wrap 4,500 gifts. Although the service is free to customers, a gift-wrapping service cost allocation is made to the department where the item was purchased. The customer-service department reported the following for the most recent month:
Department Budgeted Items Wrapped Actual Items Wrapped
Giftware 1000 1200
Women's Apparel 850 650
Fragrances 1000 900
Men's Apparel 750 450
Domestic 900 800
Total 4500 4000
Required:
1. Using the single-rate method, allocate gift-wrapping costs to different departments in these three ways:
a. Calculate the budgeted rate based on the budgeted number of gifts to be wrapped and allocate costs based on the budgeted use (of gift-wrapping services).
b. Calculate the budgeted rate based on the budgeted number of gifts to be wrapped and allocate costs based on actual usage.
c. Calculate the budgeted rate based on the practical gift-wrapping capacity available and allocate costs based on actual usage.
2. Using the dual-rate method, compute the amount allocated to each department when (a) the fixe cost rate is calculated using budgeted costs and the practical gift-wrapping capacity, (b) fixed costs are allocated based on budgeted usage of gift-wrapping services, and (c) variable costs are allocated using the budgeted variable-cost rate and actual usage.
3. Comment on your results in requirements 1 and 2. Discuss the advantages of the dual-rate method.
Answer:
Preston Department Store
1) Using the single-rate method:
a. Calculation of the budgeted rate based on the budgeted number of gifts = Total overhead/budgeted number of gifts
= $6,525/4,500
= $1.45
Allocation of costs based on the budgeted use of gift-wrapping services:
Department Budgeted Items Budgeted Allocation
Wrapped Rate
Giftware 1,000 $1.45 $1,450.00
Women's Apparel 850 $1.45 1,232.50
Fragrances 1,000 $1.45 $1,450.00
Men's Apparel 750 $1.45 $1,087.50
Domestic 900 $1.45 $ 1,305.00
Total 4,500 $1.45 $6,525.00
b. Allocation of costs based on the actual use of gift-wrapping services:
Department Actual Items Budgeted Allocation
Wrapped Rate
Giftware 1,200 $1.45 $1,740.00
Women's Apparel 650 $1.45 $942.50
Fragrances 900 $1.45 $1,305.00
Men's Apparel 450 $1.45 $652.50
Domestic 800 $1.45 $ 1,160.00
Total 4,000 $1.45 $5,800.00
c. Budgeted rate based on the practical gift-wrapping capacity:
= Total budgeted costs/practical gift-wrapping capacity
= $6,700/5,000
= $1.34
Allocation of costs based on the actual use of gift-wrapping services:
Department Actual Items Budgeted Allocation
Wrapped Rate
Giftware 1,200 $1.34 $1,608.00
Women's Apparel 650 $1.34 $871.00
Fragrances 900 $1.34 $1,206.00
Men's Apparel 450 $1.34 $603.00
Domestic 800 $1.34 $ 1,072.00
Total 4,000 $1.34 $5,360.00
2. Using the dual-rate method:
Fixed cost rate = $4,950/5,000 = $0.99
Variable cost rate = $0.35
a) Allocation of costs based on the actual use of gift-wrapping services:
Department Budgeted Items Actual Items Allocation
Wrapped Wrapped Fixed Variable Total
Giftware 1,000 1,200 $990.00 $420 $1,410
Women's Apparel 850 650 841.50 227.5 $1,069
Fragrances 1,000 900 990.00 315 $1,305
Men's Apparel 750 450 742.50 157.5 $900
Domestic 900 800 891.00 280 $1,171
Total 4,000 $5,855
b) Allocation of fixed cost based on budgeted usage of gift-wrapping services:
Fixed cost rate based on budgeted usage = $4,950/4,500 = $1.10
Department Budgeted Items Allocation of
Wrapped Fixed costs
Giftware 1,000 $1,100
Women's Apparel 850 $ 935
Fragrances 1,000 $ 1,100
Men's Apparel 750 $ 825
Domestic 900 $ 990
Total 4,500 $4,950
c) Allocation of variable costs using the budgeted variable-cost rate and actual usage
Variable cost rate = $0.35
Department Actual Items Allocation of
Wrapped Variable costs
Giftware 1,200 $420
Women's Apparel 650 $227.50
Fragrances 900 $ 315
Men's Apparel 450 $157.50
Domestic 800 $280
Total 4,000 $1,400
3. It looks as if the dual-rate method is far better than the single-rate method. But it consumes more time during the allocation process. It is also a bit difficult and confusing.
The dual-rate cost allocation method categorizes costs into fixed costs and variable costs. The dual-rate method gives different cost allocation rates and is a more exact cost allocation method.
Explanation:
Practical capacity = 5,000
Budgeted fixed cost = $4,950
Budgeted variable cost = $0.35
Budgeted units = 4,500
Budgeted variable cost = $1,575 ($0.35 * 4,500)
Total overhead = $6,525 ($4,950 + 1,575)
Predetermined overhead rate = $1.45 ($6,525/4,500)
Department Budgeted Items Actual Items
Wrapped Wrapped
Giftware 1,000 1,200
Women's Apparel 850 650
Fragrances 1,000 900
Men's Apparel 750 450
Domestic 900 800
Total 4,500 4,000
Determine which of the following annual gifts are subject to gift taxes and to what extent they need to be included in an estate.
a. Grandfather have a grandchild $24,000 for the purchase of a new car.
b. Father gave $35,000 to a son to start a small business.
c. Parents paid $35,000 to Wellesley College for their daughter's tuition.
d. Sister paid $47,000 of her brother's qualified medical expenses to Duke Medical Center.
e. Widow gave $105,000 to charity.
f. Mother gave a daughter a life insurance policy with a face value of $50,000 and a cash value of $10,000 two years prior to the mother's death.
Answer:
a. Grandfather have a grandchild $24,000 for the purchase of a new car.
Subject to gift tax.
b. Father gave $35,000 to a son to start a small business.
Not subject to gift tax
c. Parents paid $35,000 to Wellesley College for their daughter's tuition.
Not subject to gift tax
d. Sister paid $47,000 of her brother's qualified medical expenses to Duke Medical Center.
Not subject to gift tax
e. Widow gave $105,000 to charity.
Subject to gift tax
f. Mother gave a daughter a life insurance policy with a face value of $50,000 and a cash value of $10,000 two years prior to the mother's death.
Subject to gift tax
Explanation:
The terms “sales” and “marketing” can be used interchangeably.
True
False
Answer:
False
Explanation:
Sales is all about you: your products, your services, and your business. Marketing on the other hand, is all about your customers. Whether inbound, outbound, or all around, it's all about them. Although not interchangeable, the sales and marketing are definitely interwined.
You are a tutor for introductory financial accounting. You tell your students "Recording adjusting entries is a critical step in the accounting cycle, and the two major classifications of adjusting entries are prepayments and accruals". Chris, one of the students in the class, says, "I don't understand".
Required:
1. When do prepayments occur? When do accruals occur?
2. Describe the appropriate adjusting entry for (a) prepaid expenses, (c) deferred revenues.
3. What is the effect on (a) net income (b) assets (c) liabilities (d) stockholders' equity of not recording a required adjusting entry for prepayments? For each item, indicate clearly whether the effect will be an Increase, a Decrease, or No Effect. Please present your answers using the template below. I have done Net income as an example. Item Increase Decrease No Effect Net income x Assets Liabilities Stockholders' Equity
4. Describe the appropriate adjusting entry for (a) accrued expenses (c) accrued revenues.
5. What is the effect on (a) net income (b) assets (c) liabilities (d) stockholders' equity of not recording a required adjusting entry for accruals? For each item, clearly indicate whether the effect will be an Increase, a Decrease, or No Effect. Please present your answers using the template below. Item Increase Decrease No Effect Net income Assets Liabilities Stockholders' Equity
Answer:
1 and 2
for e.g., on January 2, you purchase a 1 year insurance policy for $1,200
the journal entry to record this transaction would be:
Dr Prepaid insurance 1,200
Cr Cash 1,200
On June 30, you are preparing the financial statements for the first 6 months of operations. Since 6 months have already passed since you purchased insurance, then you have to accrue 6 months worth of insurance expense:
June 30, adjustment entry
Dr Insurance expense 600
Cr Prepaid insurance 600
3. What is the effect on (a) net income (b) assets (c) liabilities (d) stockholders' equity of not recording a required adjusting entry for prepayments? For each item, indicate clearly whether the effect will be an Increase, a Decrease, or No Effect.
E.g. prepaid insurance is an asset account, and if you do not adjust it in order to determine insurance costs, then your net income will be overstated. Your balance sheet will also be overstated, since assets and retained earnings will be higher than they should be.
(a) net income ⇒ increase
(b) assets ⇒ increase
(c) liabilities ⇒ no effect
(d) stockholders' equity ⇒ increase
4. Describe the appropriate adjusting entry for (a) accrued expenses (c) accrued revenues.
Since I already used a prepaid account as an example, I will now us a deferred revenue account. Suppose that you are the insurance company, and you sell a 1 year policy on January 2.
January 2, sales revenue
Dr Cash 1,200
Cr Deferred revenue 1,200
Deferred revenues are liabilities, since you collected money in exchange for providing future services.
Again on June 30, you are preparing the financial records for the first 6 months. you notice that 6 months have already passed since you sold the policy, so you accrued 6 months worth of revenue.
June 30, adjustment entry
Dr Deferred revenue 600
Cr Revenue 600
5. What is the effect on (a) net income (b) assets (c) liabilities (d) stockholders' equity of not recording a required adjusting entry for accruals? For each item, clearly indicate whether the effect will be an Increase, a Decrease, or No Effect.
(a) net income ⇒ decrease
(b) assets ⇒ no effect
(c) liabilities ⇒ increase
(d) stockholders' equity ⇒ decrease
On October 28, 2021, Zebra Technologies Corporation committed to a plan to sell a division that qualified as a component of the entity according to GAAP regarding discontinued operations and was properly classified as held for sale on December 31, 2021, the end of the company's fiscal year. The division's loss from operations for 2021 was $1,940,000. The division's book value and fair value less cost to sell on December 31 were $3,130,000 and $2,300,000, respectively. What before-tax amount(s) should Zebra Technologies Corporation report as loss on discontinued operations in its 2021 income statement
Answer:
$2,770,000
Explanation:
The computation of loss on discontinued operations is shown below:-
Loss on disposal of discontinued division = Book value of assets of discontinued division - Fair value of assets of discontinued division
= $3,130,000 - $2,300,000
= $830,000
Loss on discontinued operations = Loss on operations of discontinued division + Loss on disposal of discontinued division
= $1,940,000 + $830,000
= $2,770,000
The Werner Corporation uses the weighted-average method in its process costing system. The company recorded 24,400 equivalent units for conversion costs for November in a particular department. There were 4,000 units in the ending work in process inventory on November 30 which were 60% complete with respect to conversion costs. The November 1 work in process inventory consisted of 5,000 units which were 40% complete with respect to conversion costs. A total of 22,000 units were completed and transferred out of the department during the month. The number of units started during November in the department was: rev: 02_21_2018_QC_CS-116232 Multiple Choice 21,000 units 17,000 units 22,000 units 26,000 units
Answer:
21,000 units
Explanation:
The computation of the number of units started during November in the department is shown below:-
Number of units started during November in the department = units completed and transferred out + units in the ending work in process inventory - units in the Beginning work in process inventory
= 22,000 + 4,000 - 5,000
= 21,000 units
Therefore we have applied the above formula.
WSP Manufacturing produces a pesticide chemical and uses process costing. There are three processing departmentsMixing, Refining, and Packaging. On January 1, the first departmentMixinghad no beginning inventory. During January, fl. oz. of chemicals were started in production. Of these, fl. oz. were completed and fl. oz. remained in process. In the Mixing Department, all direct materials are added at the beginning of the production process, and conversion costs are applied evenly through the process. At the end of the month, WSP calculated equivalent units. The ending inventory in the Mixing Department was % complete with respect to conversion costs. With respect to conversion costs, how many equivalent units were calculated for the product that was completed and for ending inventory?
Answer: Product completed: 32,000 equivalent units; Products in ending inventory: 4,800 equivalent units
Explanation:
The question notes that 32,000 fl. oz were completed and the conversion costs were applied evenly so the completed EUP is;
= 32,000 fl. oz.
The EUP for the closing inventory;
Units were 60% complete in respect to Conversion and there are 8,000 units in process.
= 8,000 * 60%
= 4,800 fl. oz
The following information pertains to Sunland Company.
1. Cash balance per bank, July 31, $7,688.
2. July bank service charge not recorded by the depositor $47.
3. Cash balance per books, July 31, $7,724.
4. Deposits in transit, July 31, $3,060.
5. $2,376 collected for Sunland Company in July by the bank through electronic funds transfer. The collection has not been recorded by Sunland Company.
6. Outstanding checks, July 31, $695.
Required:
a. Prepare a bank reconciliation at July 31, 2022.
b.Journalize the adjusting entries at July 31 on the books of Sunland Company.
Answer:
A. Adjusted cash balance per bank $10,053
Adjusted cash balance per book $ 10,053
B. July 31
Dr Cash $ 2,376
Cr Accounts Receivable $ 2,376
July 31
Dr Bank service charge $47
Cr Cash $ 47
Explanation:
Preparation of Bank Reconciliation
31-Jul-22
SUNLAND COMPANY
Cash Balance per bank statement $7,688
Add: Deposit in transit $ 3,060
$ 10,748
Less: Outstanding checks $ 695
Adjusted cash balance per bank $ 10,053
Cash balance per books $ 7,724
Add: Electronic fund transfer received $2,376
$10,100
less; Bank service charge $ 47
Adjusted cash balance per books $10,053
B. Preparation of Journal entry
July 31
Dr Cash $ 2,376
Cr Accounts Receivable $ 2,376
(To record electronic fund transfer received by bank)
July 31
Dr Bank service charge $ 47
Cr Cash $ 47
(To record bank service charges )
Costs that can be influenced by management at a specific level of management are called
Oa. direct costs
Ob. noncontrollable costs
Oc. controllable costs
Od. variable costs
The controllable costs are the costs that can be influenced by management at a specific level of management.
What are controllable costs?These are the types of costs over which an organization or company have full authority.
This type of cost has to do with a companies marketing budgets and its costs of labor.
Read more on controllable costs here: https://brainly.com/question/1549591