Answer:
(A) decrease by 6,000
(B)
Service revenue 587,000
salaries expense (355,000)
interst expense (3,000)
other expenses (195,000)
income before tax 34,000
income tax (35%) (11,900)
net income 22,100
(C)
Retained Earings
Balance Jan 1 90,000
Net Earnings 22,100
Dividends (20,000)
Balance, Dec 31 92,100
Explanation:
collected from customer 552,000
salaries paid (340,000)
interest paid (3,000)
other expenses paid (195,000)
cash dividend paid (20,000)
net (6,000)
For the income statement we use the accrued base and we do not consider the dividends.
Service revenue 587,000
salaries expense (355,000)
interst expense (3,000)
other expenses (195,000)
income before tax 34,000
income tax (35%) (11,900)
net income 22,100
The retained earnigns will increase by the net income amount and decrease with the dividends paid.
A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations:
Selling price $157
Units in beginning inventory 200
Units produced 7,900
Units sold 7,500
Units in ending inventory 600
Variable costs per unit:
Direct materials $47
Direct labor $45
Variable manufacturing overhead $7
Variable selling and administrative expense $5
Fixed costs:
Fixed manufacturing overhead $260,700
Fixed selling and administrative expense $120,000
Required:
What is the total period cost for the month under variable costing?
Answer:
$418,200
Explanation:
Period Costs under Variable Costing include (1) Fixed Manufacturing Overheads and (2) All Non-Manufacturing Expenses.
Calculation of Period Costs
Fixed manufacturing overhead $260,700
Fixed selling and administrative expense $120,000
Variable selling and administrative expense ($5 × 7,500) $37,500
Total Period Cost $418,200
The Green Company, an accrual basis taxpayer, provides business-consulting services. Clients generally pay a retainer at the beginning of a 12-month period. This entitles the client to no more than 40 hours of services. Once the client has received 40 hours of services, Green charges $500 per hour. Green Company allocates the retainer to income based on the number of hours worked on the contract. At the end of the tax year for contracts entered into for the current year, the company had $50,000 of unearned revenues from these contracts. The company also had $10,000 in unearned rent income received this year from excess office space leased to other companies. Based on the above, Green must include in gross income for the subsequent tax year:A. $60,000.B. $50,000.C. $10,000.D. $0.E. None of these.
Answer:
D. $0
Explanation:
Unearned revenues are a liability (permanent account), therefore, they cannot be included in the income statement.
E.g. Journal entry to record unearned service revenue
Dr Cash 50,000
Cr Unearned revenue 50,000
Unearned revenue will continue to be a liability until the earning process is completed, then the liability is cancelled and revenue is recognized.
E.g. Journal entry to record accrued revenue
Dr Unearned revenue 50,000
Cr Service revenue 50,000
Chance Company had two operating divisions, one manufacturing farm equipment and the other office supplies. Both divisions are considered separate components as defined by generally accepted accounting principles. The farm equipment component had been unprofitable, and on September 1, 2018, the company adopted a plan to sell the assets of the division. The actual sale was completed on December 15, 2018, at a price of $600,000. The book value of the division’s assets was $1,000,000, resulting in a before-tax loss of $400,000 on the sale.
The division incurred a before-tax operating loss from operations of $120,000 from the beginning of the year through December 15. The income tax rate is 30%. Chance’s after-tax income from its continuing operations is $440,000.Required:Prepare an income statement for 2016 beginning with income from continuing operations. Include appropriate EPS disclosures assuming that 100,000 shares of common stock were outstanding throughout the year. (Amounts to be deducted should be indicated with a minus sign. Round EPS answers to 2 decimal places.)
Answer:
Net income = $76,000
Earning per share (EPS):
Income from continuing operations per share = $4.40 per share
Loss from discontinued operations per share = -$3.64 per share
Net Income per share = $0.76 per share
Explanation:
Note: See the attached excel file for the income statement.
Also Note: Two years (2016 and 2018) were mistakenly mentioned in the question instead of just one of them. I therefore picked 2016 to prepare the income statement.
In the attached excel file, the earning per share (EPS) is calculated as follows:
Number of shares outstanding = 100,000 shares
Income from continuing operations per share = Income from continuing operations / Number of shares outstanding = $440,000 / 100,000 = $4.40 per share
Loss from discontinued operations per share = Loss from discontinued operations / Number of shares outstanding = -$364,000 / 100,000 = -$3.64 per share
Net Income per share = Net Income / Number of shares outstanding = $76,000 / 100,000 = $0.76 per share
Income statement data for Whirlpool Industries from the company’s 2016 financial statements follow. Use these data to reformulate the income statement for 2014, 2015, and 2016 under the assumption that warranty expense is a constant percentage of revenue across all three years. Specifically, compute the adjustments to: warranty expense, income tax expense, and net income. The company’s tax rate is 30%.
12 Months Ended ($ 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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Libby bought 250 stocks of a company named Xylet last year. Xylet’s total earning for the year is $ 4million and it has 1,000,000 outstanding stocks. What is Xylet’s Earning per share (EPS)?
A.
4
B.
0.04
C.
40
D.
400
Answer:
4
Explanation:
You want to invest $6,000 annually beginning now in order to accumulate $33,300 for a down payment on a house in five years. To find the annual interest rate you would need to receive to accomplish this goal, you would search the fifth row in the:
To find the annual interest rate you would need to receive to accomplish this goal, you would search the fifth row in the: Future value of a annuity due of $1 table for the factor closed to 5.55.
Future value of a annuity dueSince we have $6,000 as the amount invested annually and we need to accumulate $33,300.
Therefore the annuity factor required is:
Annuity factor=$33,300/$6,000
Annuity factor=5.55 and its future value of annuity
Inconclusion Future value of a annuity due of $1 table for the factor closed to 5.55.
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Celia is a college student who just took her first trip to Las Vegas. While there, she charged $2,000 on her new credit card. When her credit card statement arrived, she noted that there were $3,000 in charges related to her Las Vegas trip! Horrified, she called the credit card company to dispute the excess charges. The credit card company insisted she had charged $3,000 on the card and Celia insisted she had only charged $2,000 on the card. Finally, Celia and the credit card company agreed that Celia would pay $2,500 as full payment of the credit card. Celia promptly sent them a check for $2,500. The following month, the credit card company billed Celia for the remaining $500! Celia sued, arguing that the credit card company had agreed to accept $2,500 as payment in full. The court agreed and ruled in Celia’s favor, holding that the credit card company and Celia had entered into an accord and satisfaction. But what if the facts of the case were different? Select each set of facts below that could change the outcome of the court’s decision.
Answer:
1)Celia actually did charge $3,000 on her credit card and admitted such to the credit card company, but argued she only had $2,500 in her bank account to pay off the credit card.
Telling a bank or a credit card company that you do not have enough money top pay right now will not make them forgive the unpaid balance. They might offer you some type of agreement or schedule for you to pay for the remaining balance (in this case $500). A court will never rule in favor of a borrower just because they do not want to pay the whole balance and will not accept a payment schedule.
3) Celia and the credit card company agreed that Celia would pay $2,500 as full payment of the disputed debt, but Celia never paid the $2,500.
When Celia and the credit card company reached an agreement to settle their dispute, that agreement is binding on both parties. Celia must pay the $2,500 and the credit card company will not charge any more money. But if Celia doesn't make the payment, she is not performing her part and the credit card company can sue her for it, and will probably win.
Explanation:
the options are missing:
Celia actually did charge $3,000 on her credit card and admitted such to the credit card company, but argued she only had $2,500 in her bank account to pay off the credit card. Celia actually did charge $3,000 on her credit card and admitted such to the credit card company. However, Celia had no money, so she offered the credit card company her car in exchange for full payment of the debt and the credit card company accepted. Celia turned over title to her car to the credit card company. Celia and the credit card company agreed that Celia would pay $2,500 as full payment of the disputed debt, but Celia never paid the $2,500. Celia believed she did not charge anything on her credit card during her trip to Las Vegas. The credit card company claims she charged $3,000 to the card while in Las Vegas.Use this information about Department J to answer the question that follow. Department J had no work in process at the beginning of the period. 18,000 units were completed during the period, and 2,000 units were 30% completed at the end of the period. The following manufacturing costs were debited to the departmental work in process account during the period (assume the company uses FIFO and rounds cost per unit to two decimal places): Direct materials (20,000 at $5) $100,000 Direct labor 142,300 Factory overhead 57,200 Assuming that all direct materials are placed in process at the beginning of production, what is the total cost of the 18,000 units completed during the period
Answer: $283,140
Explanation:
Total Cost = Materials cost + Conversion cost
Conversion cost per unit = (Direct labor + Factory overhead ) / Equivalent units of production
= (142,300 + 57,200)/ ( 18,000 + (2,000 * 30%))
= 199,500/ 18,600
= $10.73 per unit
Direct material cost is $5 per unit from the question.
Total cost of the 18,000 units;
= (18,000 * 5) + (18,000 * 10.73)
= $283,140
5. Calculating tax incidence Suppose that the U.S. government decides to charge cola consumers a tax. Before the tax, 40 billion cases of cola were sold every year at a price of $5 per case. After the tax, 34 billion cases of cola are sold every year; consumers pay $6 per case (including the tax), and producers receive $2 per case. The amount of the tax on a case of cola is $ per case. Of this amount, the burden that falls on consumers is $ per case, and the burden that falls on producers is $ per case. True or False: The effect of the tax on the quantity sold would have been larger if the tax had been levied on producers. True False
Answer:
The amount of tax on a case of Cola is ;
= Selling price - Producer gain
= 6 - 2
= $4
The burden that falls on consumers is;
= Current selling price - Previous selling price
= 6 - 5
= $1
The burden that falls on the producers is;
= Selling price less consumer tax - Producer gain
= 5 - 2
= $3
The effect of the tax on the quantity sold would have been larger if the tax had been levied on producers. FALSE.
Whether the tax is on the producer or on the consumer makes no difference because the quantity sold will be the same. The statement is therefore false.
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
Jasper Golf Resort has a full-service hotel and three golf courses. The hotel, in addition to having over 100 hotel rooms, has two dining areas and a catering service for weddings and meetings. The hotel has a housekeeping staff and a repairs and maintenance group. In addition, there is a meetings coordinator with a technical staff to support meetings. The golf courses have a superintendent that oversees a grounds and maintenance staff. Each course has a pro shop that includes apparel and golf supplies and a lunch counter. In addition, there is a golf cart center that provides carts to each course.
Classify the following responsibility centers as investment center, profit center or cost center.
a. Jasper Golf Resort
b. Hotel
c. Golf Courses
d. House-keeping
e. Restaurants
f. Weddings and meetings
g. Grounds and maintenance
h. Carts
i. ProShops
Answer and Explanation:
The classification is as follows
a. Investment center
b. Profit center
c. Profit center
d. Cost center
e. Profit center
f. Profit center
g. Cost center
h. Profit center
g. Profit center
In this way it should be classified as an investment center or profit center or cost center
Hence, the same is to be considered
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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Three hairstylist, Francois, Bernard and Mimi run Fast Service Hair Salon. They perform only shampooing and hairstyling activities. On average it takes 10 minutes to shampoo, 15 minutes to style hair, and 5 minutes to bill the customer. When a customer arrives, he or she first checks in the receptionist (Lulu). This takes only 3 minutes. One of the three stylists then takes charge of the customer and performs all three activities – shampooing, styling and billing consecutively. A customer has suggested that billing activity be transferred to Lulu. What would be the impact on salon's capacity (i.e., the maximum number of customers they can serve per hour)?
Answer:
Fast Service Hair Salon
The impact is that instead of a stylist serving only 5 customers in 150 minutes, this same stylist can serve 6 customers. The company-wide implication is that the three stylists, Francois, Bernard, and Mimi can serve 18 customers in 150 minutes altogether instead of just 15 customers under the former arrangement.
Since Lulu, the receptionist is idle most of the time, she can be assigned the billing of customers to enable the stylists to serve more customers with concentration.
Explanation:
Activities and time:
Shampooing = 10 min
Hairstyling = 15 min
Billing = 5 min
Total time per customer = 30 minutes
If billing is assigned to Lulu, the total time per customer reduces to 25 (30 - 5) minutes, thus saving 5 minutes of the stylist's time or an equivalent of 5/30 or 16.7% of their time per customer.
Diamond Bank expects that the Singapore dollar will depreciate against the dollar from its spot rate of $.43 to $.42 in 60 days. The following interbank lending and borrowing rates exist:
Lending Rate Borrowing Rate
U.S. dollar 7.0% 7.2%
Singapore dollar 22.0% 24.0%
Diamond Bank considers borrowing 10 million Singapore dollars in the interbank market and investing the funds in dollars for 60 days.
Required:
a. Estimate the profits (or losses) that could be earned from this strategy.
b. Should Diamond Bank pursue this strategy?
Answer:
a) if you borrow 10 million Singapore dollars today and purchase $4,300,000. You then invest this money and earn $4,300,000 x 7% x 2/12 = $50,167 in interests. At the end of the 60 days you will have $4,350,167.
You can use the $4,350,167 to purchase 10,357,540 Singapore dollars.
At this moment, you will owe 10,000,000 x 24% x 2/12 = 400,000 in interests + 10,000,000 principal = 10,400,000 Singapore dollars
net loss = 10,357,540 - 10,400,000 = 42,460 Singapore dollars
b) No, they shouldn't since they will lose money. The problem with this operation is that the borrowing rate for Singapore dollars are too high (24%) vs a lending rate of 7% in US dollars.
Since graduating from college five years ago, you have worked for a national chain of men's clothing stores. You have held several positions within the company and are currently manager of a local branch store.
Over the past three years, you have observed a pattern in the purchases of men's suits. You establish that the majority of men's suit purchases are black, brown, blue, gray, and olive. You also noticed that French cuff shirts are now fashionable, but few stores carry a wide color selection. Because you have always wanted to be in business for yourself, you decide to open a shop that will sell suits that are black, brown, blue, gray, and olive and to carry a wide array of colors of French cuff shirts. Your store will also sell fashionable ties and cuff links. You have decided that your store will brand itself for focusing on men's fashion; therefore, the name for your store will be "The Style Shop." You have discussed your plan with a number of people in the industry, and they believe your idea is a viable one and have encouraged you to pursue your dream of becoming an entrepreneur.
A new upscale outdoor shopping mall is opening nearby, and you have decided that now is the time to take the plunge and go into business for yourself. After developing a comprehensive business plan that includes marketing strategies and financial projections, you decide to open The Style Shop in the new mall.
One of the things you must decide in the process of transforming your idea into reality is the form of ownership for your new business. Should it be organized as a sole proprietorship, a partnership, or a corporation? What advantages or disadvantages are there to each choice? What do you think of the proposed name for the business, The Style Shop? use the chart below to organize your thoughts.
Business Entity Advantages Dis-Advantages
Sole Proprietorship
Partnership
Corporation
Explanation:
Sole Propietorship:
Individual ownership is a form of business that is facilitated, where there are not so many rules and formalities and taxes are paid on the company's income. In this business model, there is a single owner of the enterprise who manages the business and is the only one responsible for the company's debts and profits.
The advantages are: low opening cost, low taxes, greater control, easier selling
The disadvantages are: greater liability for debts, less attraction for investors
Partnership:
A partnership is a business model where two or more people come together to open a new business together. Which means sharing responsibilities arising from the business.
The advantages are: less formality than a limited partnership, more simplified accounting, shared responsibilities, easier opening that can be agreed in writing.
The disadvantages are: conflicts over business disagreements, personal conflicts can hinder business, lack of stability, debt sharing
Corporation:
A company is a legal entity, which separates itself from its owners and acquires its own legal responsibility.
The advantages are: tax benefits, less personal responsibility, greater investment attraction, greater capital generation.
The disadvantages are: greater formalization, greater need for capital, greater inspection, greater payment of taxes, greater social and environmental responsibility.
What do you think of the proposed name for the business, The Style Shop?
The proposed name for the business should be a more specific name, as the name is very generic, there is no specificity that guarantees greater clarity about what the business offers and for whom. An ideal name should be more focused on your potential audience and easier to identify.
Suppose that the U.S. government decides to charge wine producers a tax. Before the tax, 30,000 bottles of wine were sold every week at a price of $4 per bottle. After the tax, 25,000 bottles of wine are sold every week; consumers pay $6 per bottle, and producers receive $3 per bottle (after paying the tax). The amount of the tax on a bottle of wine is $ per bottle. Of this amount, the burden that falls on consumers is $ per bottle, and the burden that falls on producers is $ per bottle. True or False: The effect of the tax on the quantity sold would have been smaller if the tax has been levied on consumers. True
Answer:
Explanation:
We were informed from the question that;
BEFORE; the tax, 30,000 bottles of wine were sold every week at a price of $4 per bottle.
AFTER; After the tax, 25,000 bottles of wine are sold every week; consumers pay $6 per bottle and producers receive $3 per bottle (after paying the tax).
✓✓The amount of tax on wine = $6 - $3 = $3 per bottle
✓✓The tax burden on consumers = The amount paid after tax - The amount paid before tax
= $6 - $4
=$2 per bottle
✓✓The tax burden on Producers = Price received before tax - price received after tax
= $4 - $3
=$1 per bottle
Hence, The amount of the tax on a bottle of wine is $3 per bottle. Of this amount, the burden that falls on consumers is $2 per bottle, and the burden that falls on producers is $1 per bottle.
The effect of the tax on the quantity sold would have been smaller if the tax had been levied on consumers(FALSE)
This is false, since the The tax burden on Producers is $1 per bottle while that of The tax burden on consumer is $2 per bottle.
Walton Boat Company makes inexpensive aluminum fishing boats. Production is seasonal, with considerable activity occurring in the spring and summer. Sales and production tend to decline in the fall and winter months. During year 2, the high point in activity occurred in June when it produced 207 boats at a total cost of $153,160. The low point in production occurred in January when it produced 38 boats at a total cost of $45,000. Required Use the high-low method to estimate the amount of fixed cost incurred each month by Walton Boat Company. Determine the total estimated cost if 200 boats are made.
Answer:
Total estimated cost $148,680
Fixed cost $20,680
Explanation:
Using the high-low method to estimate the amount of fixed cost that is incurred each month
Units Cost
High 207 153,160
LOW 38 45,000
Difference 169 108,160
Variable cost per unit= 108,160/169
Variable cost per unit= 640
Fixed cost = 153,160-207*640
Fixed cost = 20,680
Total estimated cost= 200*640+20,680
Total estimated cost=128,000+20,680
Total estimated cost=148,680
Therefore Total estimated cost will be $148,680 and Fixed cost will be $20,680
Penny, a full-time biochemist, loves stock car racing. To feed her passion, she bought a used dirt-track car and has started entering some local dirt-track races. The prize money is pretty small ($1,000 for the winner), but she really is not in it for the money. Penny reported the following income and expenses from her nights at the track: Prize money $3,660 Expenses: Transportation from her home to the races 1,760 Depreciation on the dirt-track car 4,780 Entry fees 5,400 Oil, gas, supplies, repairs for the dirt-track car 2,890 What are the tax effects of Penny’s racing income and expenses assuming that the racing activity is a hobby for Penny?
Answer:
Options includes:
Penny’s racing income - Includable or excludable (choose one)
Penny;s racing expenses – Deductible or non deductible (Choose one)
Gross income for tax – Increases or decreases (choose one)
Penny’s racing income is includable in Gross Income
Penny's racing expenses is Non-Deductible. This is because Miscellaneous expenses deduction has been eliminated. No hobby expenses will be deductible
Gross Income for Tax will Increase. This is because hobby income increases and this in turn increase the gross income for tax.
1. What is an organization?
Jennifer and Jamar are married and live in a home with their 13-year-old dependent son, Oscar. This year, they had the following tax information. Jamar’s salary $ 60,000 Jennifer’s Qualified Business Income from sole proprietorship 95,000 Dividend income 2,800 Deduction for self-employment tax 6,712 Itemized deductions 19,200 Compute adjusted gross income (AGI) and taxable income.
a. AGI $151,088; taxable income $89,430.
b. AGI $157,800; taxable income $114,000.
c. AGI $157,800; taxable income $133,000.
d. AGI $151,088; taxable income $108,630.
Answer:
d. AGI $151,088; taxable income $108,630.
Explanation:
First we need to calculate Gross Income
Gross Income = Salary Income + Business Income + Dividend Income
Gross Income = $60,000 + $95,000 + $2,800
Gross Income = $157,800
Now Calculate adjusted gross income
Adjusted Gross Income = Gross Income - Self Employment Tax
Adjusted Gross Income = $157,800 - $6,712
Adjusted Gross Income = $151,088
Deduction will be as follow
Higher of
Itemized Deduction = $19,200
Standard deduction = $24,400
So, Standard deduction will be made because it is higher
QBI deduction = $95,000 x 20% = $19,000
Taxable Income = Adjusted Gross Income - Standard Deduction - QBI deduction
Taxable Income = $151,088 - $24,400 - $19,000
Taxable Income = $107,688
Organization Culture Profile (OCP) is a framework that provides an insight into different organization types. Which of the
following does NOT accurately describe OCP in all corporations?
O Innovation
O Detail-oriented
O Outcome-oriented
O Values
The option that doesn't festive Organization Culture Profile is D. Values.
What is Organization Culture Profile?Organization Culture Profile simply means the outcome oriented culture that emphasize results, achievements, as important values.
OCP comprises of dimensions such as respect, outcome orientation, tram oriented, innovation, etc.
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Which of the following industries is most likely to have low equipment utilization?
Answer:
Restaurants
Explanation:
The utilities sector refers to a category of companies that provide basic amenities, such as water, sewage services, electricity, dams, and natural gas.
ChowMein Company is the exclusive Montana distributor of lawn mowers for a small manufacturing company. It sells only one model at $600 per unit and for which ChowMein pays $250. ChowMein's other variable costs amount to $50 per unit. Fixed costs are $2,000. In April, ChowMein sold 15 lawn mowers and it sold 20 in May.
Required:
Calculate the following values:
a. Monthly break-even point in sales dollars
b. Monthly break-even point in units
c. Monthly income for April
d. Monthly income for May
e. Margin of safety for April
Answer:
ChowMein Company
a. Monthly break-even point in sales dollars = Fixed Costs/Contribution margin
= $2,000/50%
= $4,000
b. Monthly break-even point in units = Fixed Costs/Contribution per unit
= $2,000/$300
= 6.67 or simply 7 units
c. Monthly income for April:
Sales ($600 * 15) = $9,000
Variable cost ($300 * 15) = $4,500
Contribution = $4,500
Fixed Costs = $2,000
Income = $2,500
d. Monthly income for May:
Sales ($600 * 20) = $12,000
Variable cost ($300 * 20) = $6,000
Contribution = $6,000
Fixed Costs = $2,000
Income = $4,000
e. Margin of Safety for April:
Sales in April minus Break-even Sales
= $9,000 - $4,000
= $5,000
Explanation:
Data and Calculations:
Unit selling price = $600
Unit variable costs = $300 ($250 + 50)
Unit Contribution = $300
Contribution margin = 50% ($300/$600 * 100)
Fixed Costs = $2,000
April sales = 15
May sales = 20
Eastman publishing Company is considering publishing a paperback textbook on spreadsheet applications for business. The fixed cost of manuscript preparation, text- book design, and production setup is estimated to be $80,000. Variable production and material costs are estimated to be $3 per book. Demand over the life of the book is estimated to be 4,000 copies. The publisher plans to sell the text to college and university bookstores for $20 each.
Required:
a. What is the breakeven point?
b. What profit or loss can be anticipated with a demand of 4000 copies?
c. With a demand of 4000 copies, what is the minimum price per copy that the publisher must charge to break even?
d. If the publisher believes that the price per copy could be increased to $25.95 and not affect the anticipated demand of 4000 copies, what action would you recommend? What profit or loss can be anticipated?
The breakeven point is the sales volume at which all costs and revenues are equal and there is no profit or loss. Breakeven Point = 4,707 copies. The publisher can anticipate a loss of $12,000 with a demand of 4,000 copies.
a.
Breakeven Point (in units) = Fixed Costs / (Selling Price per Unit - Variable Cost per Unit)
Breakeven Point (in units) = $80,000 / ($20 - $3) = 4,706.67 or 4707 approx.
b.
Total Cost = Fixed Costs + (Variable Cost per Unit * Number of Copies)
Total Revenue = Selling Price per Unit * Number of Copies
Total Cost = $80,000 + ($3 * 4,000) = $92,000
Total Revenue = $20 * 4,000 = $80,000
Profit or Loss = Total Revenue - Total Cost
Profit or Loss = $80,000 - $92,000 = -$12,000
c.
Selling Price per Unit = (Fixed Costs / Number of Copies) + Variable Cost per Unit
Selling Price per Unit = ($80,000 / 4,000) + $3 = $20 + $3 = $23
The publisher must charge a minimum price of $23 per copy to break even with a demand of 4,000 copies.
d.
If the price per copy is increased to $25.95, the net profit or loss can be calculated as follows:
Total Revenue (with increased price) = $25.95 * 4,000 = $103,800
Profit or Loss (with increased price) = Total Revenue - Total Cost
Profit or Loss (with increased price) = $103,800 - $92,000 = $11,800
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XYZ covered the following employees under its qualified plan. Rob, a 4% owner and employee with compensation of $32,000. Robin, Rob's cousin, a commissioned salesperson with compensation of $195,000 last year (the highest paid employee). Robin owns 2% of the company stock. Randy, the chief operating officer, who had compensation of $160,000 last year, but was not in the top 20% of paid employees. Assuming the company made the 20% election when determining who is highly compensated, which of the following statements is correct? a. Randy is a key employee, but not a highly compensated employee. b. Robin is a key employee, but Rob is not. c. Neither Rob, Robin, or Randy are highly compensated employees or key employees. d. Rob and Robin are both key employees.
Answer:
b. Robin is a key employee, but Rob is not.
Explanation:
The IRS defines key employees as anyone that meets at least one of the following during 2020:
owns 5% f the company that sponsors the qualified plan.owns 1% of the company that sponsors the qualified plan and has a salary of at least $150,000 per year. An employee that makes at least $185,000 per year.A highly compensated employee is anyone that:
owns 5% of the company that sponsors the qualified plan.makes at least $130,000 per year.**In this case, Randy is not considered a highly compensated employee (HCE) because the company only considers employees earning salaries in the top 20% to be so.
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
The bargaining power of suppliers (clover tropika)?????
Answer:
comprises one of the five forces that determine the intensity of competition in an industry.
Explanation:
The bargaining power of suppliers comprises one of the five forces that determine the intensity of competition in an industry. The others are barriers to entry, industry rivalry, the threat of substitutes and the bargaining power of buyers.
Old Tyme Soda produces one flavor of a popular local soft drink. It had no work-in-process on October 31 in its only inventory account. During November, Old Tyme started 11,400 barrels. Work-in-process on November 30 is 1,900 barrels. The production supervisor estimates that the ending work-in-process inventory is 40 percent complete. An examination of Old Tyme’s accounting records shows direct material costs of $24,413 and conversion costs of $27,400 for November. All production is sold as it is produced. Required: a. Compute cost of goods sold for November. b. What is the value of work-in-process inventory on November 30
Answer:
a. $47,975
b. $3,838
Explanation:
a. Cost of goods sold = Units transferred out * Cost per barrel
Cost per barrel
= (Material + Conversion costs) / Equivalent units produced
Equivalent units produced
= Units transferred = 11,400 - 1,900 = 9,500
EUP = Units transferred + Equivalent WIP
= 9,500 + (40% * 1,900)
= 10,260 units
Cost per barrel = (24,413 + 27,400 ) / 10,260
= $5.05
Cost of goods sold = 9,500 * 5.05
= $47,975
b. Value of Work in Process
= Work in process * Cost
= (40% * 1,900) * 5.05
= $3,838
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 )
PS.53 Brother I.D. Ricks is a faculty member at BYU-Idaho whose grandchildren live in Oklahoma and California. He and his wife would like to visit their grandchildren at least once a year in these states. They currently have one vehicle with well over 100,000 miles on it, so they want to buy a newer vehicle with fewer miles and that gets better gas mileage. They are considering two options: (1) a new subcompact car that would cost $19,500 to purchase or (2) a used sedan that would cost $13,700.
They anticipate that the new subcompact would get 41 miles per gallon (combined highway and around town driving) while the sedan would get 26 miles per gallon. Based on their road tripping history they expect to drive 18,000 miles per year. For the purposes of their analysis they are assuming that gas will cost $2.24 per gallon.
Required:
a. How many miles would the Ricks need to drive before the cost of these two options would be the same?
b. How many years would it take for these two options to cost the same?
Answer:
Results are below.
Explanation:
First, we need to structure the total cost of each car:
Subcompact= 19,500 + 0.055*x
Sedan= 13,700 + 0.086*x
x= miles driven
Now, we equal both formulas and isolate x:
19,500 + 0.055x = 13,700 + 0.086x
5,800 = 0.031x
187,096.77 = x
The indifference point is 187,096.77 miles.
Prove:
Subcompact= 19,500 + 0.055*187,096.77= $29,790.32
Sedan= 13,700 + 0.086*187,096.77= $29,790.32
Finally, the time required:
Number of years= 187,096.77/18,000= 10.39 years
so that Finally, the time required:
(b) The Number of years is = 187,096.77/18,000= 10.39 yearsLearn more information:
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