Show the effect of each transaction on the three basic accounting elements by indicating the dollar amount of the increase or decrease under the proper element heading. Compute the resulting accounting equation.

a. Owner invested $16,500 cash in the business.
b. Paid premium for two-year insurance policy, $1,500.
c. Purchased a van valued at $35,000 with $5,000 down payment; the balance to be paid over three years.
d. Paid the rent for the month, $900.
e. Purchased $470 of supplies for cash.
f. Cash sales for the month, $8,750.
g. Billed credit customers $14,200 for monthly services.

Answers

Answer 1

Answer:

Assets = Liabilities + Owner’s Equity = $67,800

Explanation:

Note: See the attached excel file for the Effect of Each Transaction on the Three Basic Accounting Elements.

From attached excel file, the resulting accounting equation can be computed as follows

Assets = Total Cash + Total Insurance Prepaid + Total Van + Total  Supplies + Total Accounts Receivable = $17,380 + $750 + $35,000 + $470 + $14,200 = $67,800

Liabilities = Total Accounts Payable = $30,000

Owner’s Equity  = Total Capital + Total Retained earnings = $16,500 + $21,300 = $37,800

Liabilities + Owner’s Equity = $30,000 + $37,800 = $67,800

Therefore, we have:

Assets = Liabilities + Owner’s Equity = $67,800


Related Questions

Austen, the night shift manager of a 24-hour convenience store, would regularly drive his car to the back door, unlock it, and load in a couple of cases of beer, every night. These cases of beer were marked down for no apparent reason, and Austen paid the reduced price. Is Austen setting a good example for his employees

Answers

Answer:

                                                                                                                          bro              

Explanation:

When schools and businesses allocate admissions or jobs on the basis of race, gender, disability, or other criteria unrelated to ability, they are aiming at

Answers

Answer:

equality of outcome

Explanation:

Equality of outcome may be defined as to ensuring people with disadvantaged for making any personal profit or gains. It eliminates the personal responsibility of the people.

In the context, when the schools or the businesses allocate jobs or admissions based on the people's disability, race or gender or some other criteria which is unrelated to ability, they are mostly trying o to aim at equality of outcome.

Emily and Betsey are economists. Emily thinks that the wealthiest 10 percent of the U.S. population should be taxed a rate higher than the rest of society because they can better afford it. Betsey thinks that everyone should be taxed at the same rate because that is the fairest scenario and the wealthy should not be penalized for their success. In this example, Emily and Betsey:______

Answers

Answer: b. have different normative views about tax policy.

Explanation:

Economists follow different theories and principles on how the world should be so most times they will disagree with each other on key issues such as taxation and government intervention in markets.

Emily and Betsy both believe in different taxation policies which means that they have different views on how people should be taxed in an economy with one of them believing in a proportional tax regime (Betsey) and the other believing in a progressive tax regime (Emily).

As you move from job shop towards continuous process: A. Your capital intensity decreases B. Your volume decreases C. Your customization ability decreases D. Your throughput decreases E. None of the above

Answers

Answer: C. Your customization ability decreases.

Explanation:

Job Shops are able to customize products and services because they manufacture products on a small scale and usually for individual job orders whereas continuous processing is more large scale and the products are more homogeneous.

As one move from a job shop to a continuous process, they will find that they would be unable to customize products as much as they could before because they would be producing a higher volume of goods and so would not have the time to be customizing the products as much.

Acme Fastener and Tool is having major problems with demand management. The VP of Sales is very focused on increasing productivity according to forecasts, but the operations manager routinely presents obstacles to increasing production above current levels. Of the following, which problem is the firm experiencing?
a. Functional silos.
b. Lack of attention on operational planning.
c. Overemphasis on forecasting.
d. Focus on tactics.

Answers

Answer:

Functional silos

Explanation:

Functional silo occurs when different teams with their responsibilities and functions have different views about a process.

The managers who have accumulated resources and influence are conflicted over the functional aspects of a process rather than looking out for the wider benefit of the business.

In the given scenario VP of Sales is very focused on increasing productivity according to forecasts, but the operations manager routinely presents obstacles to increasing production above current levels.

They are both pursuing conflicting agendas instead of working together.

This is called functional silo.

Carmen Camry operates a consulting firm called Help Today, which began operations on August 1. On August 31, the company;s records show the following accounts and amounts for the month of August. Use this information to prepare an August statement of retained earnings for Help Today. (Amounts to be deducted should be entered with a minus sign.)
Cash $ 25,360
Dividends $ 6,000
Accounts receivable 22,360
Consulting fees earned 27,000
Office supplies 5,250
Rent expense 9,550
Land 44,000
Salaries expense 5,600
Office equipment 20,000
Telephone expense 860
Accounts payable 10,500
Miscellaneous expense 520
Common stock 102,000
Use the above information to prepare an August statement of retained earnings for Help Today. The Retained Earnings account balance at August 1 was $0. Hint: Net income for August is $10,470.

Answers

Answer:

$4,470

Explanation:

Preparation of an August statement of retained earnings for Help Today.

First step is to prepare the income statement of Help Today

HELP TODAY Income Statement

For Month Ended August 31

Revenues:

Consulting fees earned: $27,000

Total Revenues: $27,000

Expenses:

Rent Expenses $9,550

Salaries Expenses $5,600

Telephone Expenses $860

Miscellaneous Expenses $520

Total Expenses $16,530

Net income $10,470

($27,000-$16,530)

Now let Prepare an August statement of retained earnings for Help Today

HELP TODAY Statement of Retained Earnings

For Month Ended August 31

Retained earnings, August 1: $0

Add: Net Income: $10470

Less: Dividends: ($6000)

Retained earnings, August 31: $4470

($10470-$6000)

Therefore August statement of retained earnings for Help Today is $4470

Kurt has 25/50/25 auto insurance coverage. One evening he lost control of his vehicle, hitting a parked car and damaging a storefront along the street. Damage to the parked car was $9,000, and damage to the store was $20,300.

Required:
a. What amount will the insurance company pay for the damages?
b. What amount will Kurt have to pay?

Answers

Answer:

A. $25,000

B. $4,300

Explanation:

A. Calculation to determine What amount will the insurance company pay for the damages

Using this formula

Insurance payment=(Claim amount, Policy limit)

Let plug in the formula

Insurance payment= $25,000

Therefore the amount that the insurance company will pay for the damages is $25,000

B. Calculation to determine What amount will Kurt have to pay

Using this formula

Personal liability=Claim amount - Insurance payment

Let plug in the formula

Personal liability=($9,000 + $20,300) - $25,000

Personal liability=$29,300-$25,000

Personal liability=$4,300

Therefore Kurt have to pay $4,300

Characteristics of entertaining media messages according to Bosshart and Marconi include psychological relaxation, stimulation, fun, challenges, dialogue, and joy.

a. True
b. False

Answers

Answer:

FALSE

Explanation:

Zhang Industries sells a product for $700. Unit sales for May were 400 and each month's sales are expected to exceed the prior month's results by 3%. Zhang pays a sales manager a monthly salary of $3,000 and a commission of 2% of sales. Compute the projected selling expense to be reported on the selling expense budget for the manager for month ended June 30.
a) $8,600.
b) $11,652.
c) $8,652.
d) $5,768.
e) $8,768.

Answers

Answer:

Total selling expense= $8,768

Explanation:

Giving the following information:

Selling price= $700

Sales for June in units= 400*1.03= 412

Fixed selling expense= $3,000

Sales commission= 2%

We need to calculate the total commission sales:

Total sales revenue= 700*412= $288,400

Total commission= 0.02*288,400

Total commission= 5,768

Now, the total selling expense:

Total selling expense= 5,768 + 3,000

Total selling expense= $8,768

U.S. businesspeople are often accused of ethnocentricity. This means that

Answers

Answer:

brainllest if right

This means that they are very superior or in a higher rank than others.

Explanation:

Key Company acquires 60, 10%, 5 year, $1,000 Community bonds on January 1, 2012 for $61,250. This includes a brokerage commission of $1,250. The journal entry to record this investment includes a debit to Group of answer choices Debt Investments for $60,000. Debt Investments for $61,250. Cash for $61,250. Stock Investments for $60,000.

Answers

Answer:

Debt Investments for $61,250

Explanation:

When the investment is recorded so here the debt investment should be debited and cash should be credited for $61,250. The investment would be recorded at cost basis also the brokerage represent the investment part

So the journal entry is

Debt investment Dr $61,250

    To Cash $61,250

(Being cash paid)

Pope’s Garage had the following accounts and amounts in its financial statements on December 31, 2019. Assume that all balance sheet items reflect account balances at December 31, 2019, and that all income statement items reflect activities that occurred during the year then ended.

Accounts receivable $33,000
Depreciation expense 12,000
Land 27,000
Cost of goods sold 90,000
Retained earnings 59,000
Cash 9,000
Equipment 71,000
Supplies 6,000
Accounts payable 23,000
Service revenue 20,000
Interest expense 4,000
Common stock 10,000
Income tax expense 12,000
Accumulated depreciation 45,000
Long-term debt 40,000
Supplies expense 14,000
Merchandise inventory 31,000
Sales revenue 140,000

Required:
a. Calculate the total current assets at December 31, 2019.
b. Calculate the total liabilities and owners’ equity at December 31, 2019.
c. Calculate the earnings from operations (operating income) for the year ended December 31, 2019.
d. Calculate the net income (or loss) for the year ended December 31, 2019.
e. What was the average income tax rate for Pope’s Garage for 2019?
f. If $16,000 of dividends had been declared and paid during the year, what was the January 1, 2019, balance of retained earnings?

Answers

Answer and Explanation:

a. The computation of the total current asset is shown below

= Account receivable + cash + supplies + merchandise inventory

= $33,000 + $9,000 + $6,000 + $31,000

= $79,000

b The total liabilities and owners equity is

= Account payable + long term debt + common stock + retained earnings

= $23,000 + $40,000 + $10,000 + $59,000

= $132,000

c. The earnings from operations is

Sales revenue $140,000

Less cost of goods sold $90,000

Gross profit $50,000

add: service revenue $20,000

Less depreciation expense $12,000

Less supplies expense $14,000

Operating income $44,000

d. The net income is

= operating income - interest expense - income tax expense

= $44,000 - $4,000 - $12,000

= $28,000

e. The average income tax rate is

= $12,000 ÷ $40,000 × 100

= 30%

f. The beginning retained earnings is

= $59,000 + $16,000  - $28,000

= $47,000

If a well-diversified portfolio of stocks has an expected return of 15% when the expected return on the market portfolio is 10%, then:__________a) Treasury bills are offering a 7% yield.b) The portfolio beta is greater than 1.0.c) The portfolio beta equals 1.67.d) The investor's portfolio contains many defensive stocks.

Answers

Answer:

B. The portfolio beta is greater than 1.0

Explanation:

the answer to this question is option b. The portfolio beta is greater than 1.0. the reason is simple. we have the portfolio of expected return, which is 15% to be greater than the market portfolio of return which is 10 percent, then this is to tell us that the portfolio beta is going to be greater than 1.

15% is greater than 10%.

If the potential customers belong to the same segment, display comparable characteristics, and choose the same product qualities consistent with their segment, then which condition for the ideal market segment approach should be used

Answers

Answer: internally homogenous

Explanation:

Since the potential customers belong to the same segment, display comparable characteristics, and choose the same product qualities that are consistent with their segment, then the condition for the ideal market segment approach which should be used is the internally homogeneous.

On the other hand, if the potential customers are in different segments, have different characteristics, and choose different product qualities, then the externally homogeneous will be ideal.

internally homogenous

Based on this income statement for Company XYZ for the year ending December 31, 2014, what adjustment would need to be made to Net Income to account for Gain or Loss in calculating cash flow from Operating Activities using the indirect method

Answers

Answer:

a) Adjustment of (16,000) in the operating section.

Explanation:

While preparing the operating activities section of the cash flow statement, the net income, depreciation expense, amortization expense, loss on sale of an asset should be added and the profit on sale should be deducted

So there is the loss of $30,000 that should be added and the gain on sale should be deducted i.e. $46,000

So there is an adjustment of -$16,000 in the operating activities section

A

Hope it helps you!

-miraculousfanx-

Mankiw discusses Giffen goods as a possible counterexample to the law of demand. Although not explicitly mentioned by Mankiw, Veblen goods are another possible exception to the law of demand. Perform a quick web search to answer the following:

a. What is a Veblen good?
b. What is an example of a Veblen good?
c. Why do some consumers purchase Veblen goods?

Answers

Answer:

Find the answers below

Explanation:

A. Veblen goods are luxury goods sought after by wealthy people and for which these category of people increase their demand as the prices of the good increase (in contrast to the popular law of demand).

2. Examples are luxury houses or cars, jewelry etc.

3. Some customers buy these type of goods in order to show how wealthy they are or show their status.

At a specific point on the demand curve for backpacks, the elasticity of demand is calculated to be -1.6.
a. At that point, we would describe demand as ________.
b. If the price of backpacks fell by 10%, the quantity demanded would rise by ________and revenue for the backpack industry would ______ .
c. If the price of backpacks rose by 20% the quantity demanded would fall by _______ and revenue for the backpack industry would ________.

Answers

Answer:

elastic

16%

32%

decrease

Explanation:

Price elasticity of demand measures the responsiveness of quantity demanded to changes in price of the good.

Price elasticity of demand = percentage change in quantity demanded / percentage change in price  

If the absolute value of price elasticity is greater than one, it means demand is elastic. Elastic demand means that quantity demanded is sensitive to price changes.  

Demand is inelastic if a small change in price has little or no effect on quantity demanded. The absolute value of elasticity would be less than one

Demand is unit elastic if a small change in price has an equal and proportionate effect on quantity demanded.  

Infinitely elastic demand is perfectly elastic demand. Demand falls to zero when price increases  

Perfectly inelastic demand is demand where there is no change in the quantity demanded regardless of changes in price.

A stock has a market price of $25 and a standard deviation of returns of 24 percent. The $25 call option matures in 4 months and the risk-free rate is 2.89 percent. N(d1) is .555198 and N(d2) is .500096. What is the value of the call option per share of stock

Answers

Answer:

$334.38

Explanation:

Use the following formula to calculate the value of call option

Value of call option = ( N ( [tex]d_{1}[/tex] )  S ) - N ( [tex]d_{2}[/tex] ) K [tex]e^{rt}[/tex]

Where

S = $25

N(d1) = 0.555198

N(d2) = 0.500096

K = 25

r = 2.89%

t = 4/12 = 0.3333

Placing values in the formula

Value of call option = ((0.555198 x $25 ) x $25) - ( 0.500096 x $25 ) x 1.00967891

Value of call option = $346.99875 - $12.62340

Value of call option = $334.37535

Value of call option = $334.38

Pina Colada Corp. has the following transactions during August of the current year.

Aug. 1 Issues shares of common stock to investors in exchange for $10,880.
4 Pays insurance in advance for 3 months, $1,500.
16 Receives $880 from clients for services rendered.
27 Pays the secretary $680 salary.

Required:
Indicate the basic analysis and the debit-credit analysis.

Answers

Answer and Explanation:

The indication of the basic analysis and the debit credit analysis is as follows;

Date                   Basic Analysis                    Debit - Credit Analysis

Aug. 1       The asset Cash is increased;     Debits increase assets;

              the stockholders' equity account   Debit Cash

                Common stock is increased.         $10,880

                                                      Credits increase stockholders' equity

                                                                      Credit Common stock

                                                                             $10,880

Aug. 4            The asset Prepaid Insurance        Debits increase assets;

                           is increased;                              Debit Prepaid Insurance

              the asset Cash is decreased.               $ 1,500

                                                                              Credits decrease assets;

                                                                             Credit Cash

                                                                              $ 1,500

Aug. 16        The asset Cash is increased;        Debits increase assets;

           the revenue Service revenue               Debit Cash

             is increased.                                         $880

                                                                          Credits increase revenues:

                                                                          Credit Service revenue

                                                                          $880

Aug. 27      The expense Salaries expense    Debits increase expenses:

                  is increased;                                Debit Salaries expense

                 the asset Cash is decreased.       $680.

                                                                       Credits decrease assets:

                                                                      Credit Cash

                                                                         $680

Lewis Corporation has two service departments: Data Processing and Administration/Personnel. The company also has three divisions: X, Y, and Z. Data Processing costs are allocated based on hours of use and Administration/Personnel costs are allocated based on number of employees. Department Direct Costs Employees Hours of use Administration/ Personnel $400,000 10 3,300 Data Processing 850,000 5 1,100 X 450,000 30 1,800 Y 300,000 15 2,200 Z 550,000 25 4,500 Assume that Data Processing provides more service than Administration/Personnel. Refer to Lewis Corporation. Assume that Data Processing costs have been allocated and the balance in Administration is $600,000. Using the step method, what amount is allocated to Y

Answers

Answer:

Lewis Corporation

Using the step method, the amount allocated to Y is:

Y =  $128,571

Explanation:

a) Data and Calculations:

Department      Direct Costs   Employees     Hours of use

Administration/            

Personnel         $400,000                10                3,300

Data Processing 850,000                 5                 1,100

X                         450,000                30                1,800

Y                         300,000                 15               2,200

Z                         550,000                25               4,500

Allocation of Administration/

 Personnel cost of $600,000:

X = $257,143 (600,000 * 30/70)

Y =  $128,571 (600,000 * 15/70)

Z = $214,286 (600,000 * 25/70)

Fong Corporation sold $2,000,000, 7%, 5-year bonds on January 1, 2017. The bonds were dated January 1, 2017 and pay interest on January 1. The company uses straight-line amortization on bond premiums or discounts.

Required:
Prepare all necessary journal entries to record the issuance of the bonds and bond interest expense for 2017.

Answers

Answer:

Jan 1

Dr Cash 2,040,000

Cr Bonds payable 2,000,000

Cr Premium on bonds payable 40,000

Dec 31

Dr Interest expense 100,000

Dr premium on bonds payable 40,000

Cr Interest payable 140,000

Explanation:

Preparation of the journal entries to record the issuance of the bonds and bond interest expense for 2017.

Jan 1

Dr Cash 2,040,000

Cr Bonds payable2,000,000

Cr Premium on bonds payable40,000

Dec 31

Dr Interest expense100,000

Dr premium on bonds payable40,000

Cr Interest payable140,000

(7%*$2,000,000)

Mercury Company has only one inventory pool. On December 31, 2021, Mercury adopted the dollar-value LIFO inventory method. The inventory on that date using the dollar-value LIFO method was $201,000. Inventory data are as follows:


Year Ending Inventory at Year-End Costs Ending Inventory at Base Year Costs
2019 $260,400 $248,000
2020 347,300 302,000
2021 350,400 292,000

Required:
Compute the inventory at December 31, 2019, 2020, and 2021, using the dollar-value LIFO method.

Answers

Answer:

Explanation:

The cost index can be calculated as follows:

In 2019:

= 260400/248000

= 1.05

In 2020:

= 347300/302000

= 1.15

In 2021:

= 350400/292000

= 1.2

Inventory Layers converted to the base cost

Date        [tex]\text{(Inventory at } \ \ \ \ \ \ \ \ \text{(year-end } \\ \\ \text{ year end cost) } \div \ \ \ \text{cost index) } = \ \ \ \ \ \ \ \text{ Inventory layers(base year cost) }[/tex]

12/31/20   201000            ÷        1               =           201000

12/31/20  260400            ÷        1.05          =           248000

12/31/20   347300            ÷        1.15           =            302000

12/31/20    350400           ÷        1.2            =            292000

Inventory Layers converted to cost                  Ending Inventory  DVL cost

[tex]\text{(Inventory layers } \ \ \text{("year-end } \\ \\ \text{ base year cost) } \times \text{ cost index") } = \ \ \text{ Inventory layers(cost) }[/tex]

Base

201000            ×        1                = 201000

201000            ×        1                = 201000

Dec 31, 2019

47000              ×        1.05           = 49350                                    

ADD                                               250350                                

Base

201000            ×        1                = 201000

Dec 31, 2019

47000              ×        1.05           = 49350

Dec 31, 2020

(302000 - 248000)

= 54000           ×        1.15             = 62100                  

ADD                                                312450                  

Base

201000            ×        1                = 201000

Dec 31, 2019

47000              ×        1.05           = 49350

Dec 31, 2021

(292000 - 248000)

= 44000           ×        1.15             =  50600        

ADD                                                300950        

A company has 1000000 shares outstanding trading at $15 a piece. Managers believe that the discount rate appropriate for the risk borne is 15% and total cash flows, expected to be $1 million next year, will rise by 5% per year indefinitely. Discuss a strategy that is beneficial to the current shareholders.

Answers

Answer:

Explanation:

Knowing the value of the equity and establishing the intrinsic worth of the share may help you develop a perfect strategy that will benefit the current shareholders.

Value of the equity =  Cashflow÷(discount rate - growth rate)

= $1,000,000 ÷ (15%-5%)  

= $1,000,000 ÷ (10%)  

= $10,000,000

Intrinsic value per share = Value of the equity ÷ Shares outstanding

= $10,000,000 ÷ 1,000,000

= $10

For the share, The intrinsic value = $10

However, since the current trading share price is $15, then we can posit that the share price is over-valued.

As a result, the perfect strategy that will be beneficial to the shareholders is for the current shareholders to sell the shares (short selling at a high price and purchasing at a low price).

One of these demand and supply diagrams holds within it the concept of economic efficiency for laptop computers. The shaded triangular shape represents consumer surplus, which demonstrates that the equilibrium price in the market was less than what many of the consumers were willing to pay. The equilibrium price for laptop computers is $800 and the equilibrium quantity is 700 laptops.

Required:
Draw the shaded triangular area that represents the area of consumer surplus of laptop computers.

Answers

Answer:

The shaded triangular area in the attached photo represents the area of consumer surplus of laptop computers.

Explanation:

Note: See the attached photo for the shaded triangular area that represents the area of consumer surplus of laptop computers.

Consumer surplus on a supply and demand chart represents the area that is bound by the y-axis or price-axis on the left, the demand curve on the right, and a horizontal line where y or price equals the current market price (in this, $800).

Therefore, the shaded triangular area in the attached photo represents the area of consumer surplus of laptop computers.

According to real business cycle theorists, ______________ consumption resulting from the major production innovations incentivizes businesses to borrow ______________ from banks, causing the money supply to ______________.

Answers

Answer:

increase in,  more,  increase

Explanation:

Real business cycle theory states that the [tex]\text{macroeconomic fluctuations}[/tex] in any economy can be explained by the technological shocks and the changes in the productivity. All these changes in the technological growth affects the decisions of the firms on investment as well as workers or the labor supply.

Edward C. Prescott and Finn E. Kydland first gave the concept of real business cycle theory.

In the theory of real business cycle, the increase in consumption results from the major [tex]\text{production innovations incentivizes businesses}[/tex] to borrow more from the banks, and it causes the supply of money to increase.

Ice Cream Corporation uses the weighted-average method in its process costing system. Data concerning the first processing department for the most recent month are listed below:

Beginning work in process inventory:
Units in beginning work in process inventory 900
Materials costs $13,000
Conversion costs $5,100
Percent complete with respect to materials 75%
Percent complete with respect to conversion 20%
Units started into production during the month 9,600
Units completed and transferred to the next department during the month 8,500
Materials costs added during the month $172,100
Conversion costs added during the month $242,100
Ending work in process inventory:
Units in ending work in process inventory 2,000
Percent complete with respect to materials 90%
Percent complete with respect to conversion 30%

The cost per equivalent unit for materials for the month in the first processing department is closest to: __________

Answers

Answer:

Ice Cream Corporation

The cost per equivalent unit for materials for the month in the first processing department is closest to: __________

=  $17.97.

Explanation:

a) Data and Calculations:

                                                                Units    Materials   Conversion

Beginning work in process inventory     900     $13,000        $5,100

Degree of completion                                               75%              20%

 Units started into production              9,600

Total units in production                    10,500

Units completed and transferred       8,500         100%            100%

Ending work in process inventory     2,000           90%              30%

                                                                Units    Materials   Conversion

Beginning work in process inventory     900     $13,000         $5,100

Costs added during the month                         $172,100      $242,100

Total production costs for the month               $185,100    $247,200

Equivalent units of production:

                                                             Units    Materials           Conversion

Units completed and transferred       8,500    8,500 (100%)   8,500 (100%)

Ending work in process inventory     2,000     1,800 (90%)        600 (30%)

Total equivalent units                                      10,300                9,100

Cost per equivalent unit:

                                                           Materials           Conversion

Total production costs                      $185,100           $247,200

Total equivalent units                           10,300                  9,100

Cost per equivalent unit                       $17.97                $27.16

Green Penguin Pencil Company has a total asset turnover ratio of 3.50x, net annual sales of $40 million, and operating expenses of $18 million (including depreciation and amortization). On its balance sheet and income statement, respectively, it reported total debt of $2.50 million on which it pays a 11% interest rate.
To analyze a company's financial leverage situation, you need to measure the firm's debt management ratios. Based on the preceding information, what are the values for Green Penguin Pencil's debt management ratios? The U.S. tax structure influences a firm's willingness to finance with debt. The tax structure debt.

Answers

Solution :

a). Asset turnover ratio = total sales / total asset   = 3.50

     Total asset         =   40 million / 3.5      =   1142857

     Total debt          =  2.50 million

Therefore, the debt ratio = [tex]$\frac{\text{debt}}{\text{total asset}}$[/tex]

                                         [tex]$=\frac{2500000}{1142857}$[/tex]

                                         = 2.18

b). Time interest earned ratio = EBIT/Interest

  EBIT = net sales - operating expense

           = 40,000,000 - 18,000,000

           = $ 22,000,000

Interest expense  = 10 % x 2,500,000

                              =  $ 250,000

Times interest earned ratio = EBIT/ interest expense

                                              = [tex]$\frac{\$ 22,000,000}{\$250,000}$[/tex]

                                               = 88 times

c). Total equity = total asset - total debt

                         =  400,000,000 - 2,500,000

                         = 397,500,000

   Money raised from the creditor for each dollar of equity

                         = 2,500,000/397,500,000

                         = 6%



An important difference between a perfectly competitive firm and a monopolist is

Answers

Answer:

I don't know because I am in class 6

Schell Company manufactures automobile floor mats. It currently has two product lines, the Standard and the Deluxe. Suppose that Schell has conducted further research into its overhead and potential cost drivers. As a result, the company has compiled the following detailed information, breaking total overhead into three cost pools:
Activity Cost Pools Cost Driver Cost Assigned to Pool Quantity/Amount Consumed by Standard Floor Mat Line Quantity/Amount Consumed by
Deluxe Floor Mat Line
Material handling
Number of moves
$
2,300.00
50 moves
50 moves
Quality control
Number of inspections
$
8,763.00
570 inspections
700 inspections
Machine maintenance
Number of machine hours
$
14,360.00
3,090 machine hours
4,090 machine hours
Required :
1. Calculate the activity rates for each cost pool assuming Schell uses an ABC system. (Round your answers to 2 decimal places.)
Activity Rate
Material Handing
Per Material Move
Quality Control
Per Inspection
Maintenance
Per Machine Hourm
2. Calculate the amount of overhead that Schell will assign to the Standard floor mat line. (Round your intermediate calculations to 2 decimal places.
Total Overhead Assigned
3. Determine the amount of overhead Schell will assign to the Deluxe product line. (Round your intermediate calculations to 2 decimal places.)
Total Overhead Assigned

Answers

Answer and Explanation:

The computation is shown below:

1. The activity rate for each cost pool is

Material handling ($2,300) ÷ (50 + 50) = $23.00

Quality Control ($8,763) ÷ ($570  + 700) = $6.90

Machine Maintenance ($14,360)  ÷ (3,090 + 4,090) = $2.00

2    

Total overhead assigned to the standard floor mat line is

= $23 × 40 + $6.9 × 570 + $2 × 3,090

= $1,150 + $3,933 + $6,180

= $11,263.00

3    

Total overhead assigned to deluxe product line

= $23 × 50 +  $6.9 × 700 + $2 × 4,090

= $1,150 + $4,830 + $8,180

= $14,160.00

Jantee, a Senior Manager at LionShare Inc., is responsible for the strategic planning process in his organization. He is currently implementing a strategy. Which of the following stages of the strategic planning process is Jantee most likely to have completed immediately before the implementation stage?
A) Stating the organizational mission
B) Conducting a SWOT analysis
C) Establishing goals and objectives
D) Formulating supporting functional strategies

Answers

Answer:

D) Formulating supporting functional strategies

Explanation:

Since in the given situation, Jantee who is the senior manager responsible for the strategic planning process so here he should have to complete the strategies related to the functional and that should be supported prior to coming to the implementation stage

So as per the given situation, the option d is correct

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