Answer:
Review
Explanation:
The correct answer is - Review
Reason -
From the Review tab, click the Spelling & Grammar command.
The Spelling and Grammar pane will appear on the right.
Answer:
it is C
Explanation:
What is the solution to this problem?
Flintstone Company is owned equally by Fred Stone and his sister Wilma, each of whom hold 2,400 shares in the company. Wilma wants to reduce her ownership in the company, and it was decided that the company will redeem 480 of her shares for $30,700 per share on December 31 of this year. Wilmaâs income tax basis in each share is $7,900. Flintstone has current E&P of $10,930,000 and accumulated E&P of $50,210,000.
a. What is the amount and character (capital gain or dividend) recognized by Wilma as a result of the stock redemption, assuming only the "substantially disproportionate with respect to the shareholder" test is applied?
b. What is Wilmaâs income tax basis in the remaining 1,920 shares she owns in the company?
c. Assuming the company did not make any dividend distributions this year, by what amount does Flintstone reduce its E&P as a result of the redemption?
Answer:
Explanation:
From the given information:
In Flinstone company;
The old ownership = 2400/(2400+200) = 50%
New onwership = 1920/(1920 + 2400) = 44.4%
The reduction in Wilma ownership in Flinstone company is from 50% to 44.4%
Dividend amount perceived by WIlma is:
$30700 × 480 shares = $14,736,000
The responsibility of Wilma in the wake of taking the redemption is in reality more than the 40% (80% x 50%), so she fails the considerably disproportionate test.
Hence, dividend recognition = $1,47,36,000
b)
Wilma's personal income tax expense premise in excess shares can be determined by summing back the unused tax premise of 480 offers reclaimed to the premise of her leftover offers 1920.
unused tax premise of 480 shares = 480 × $7900 = $37,92,000
premises of the remaining shares = 1920 × $7900 = $1,51,68,000
In the remaining shares, WIlma income tax = $37,92,000 + $1,51,68,000
= $1,89,60,000
c)
Flintstone will make the decrease in its E&P by a measure of profit perceived by Wilma =$1,47,36,000
Match each of the principles and phases in the development of an accounting system with the statement that best describes them.
1. Information must be understandable, relevant, reliable, timely, and accurate.
2. Benefits of information must outweigh the cost of providing it.
3. The system should accommodate a variety of users and changing information needs.
4. The accounting system must consider the needs and knowledge of various users.
5. The system should be capable of meeting the changes in the demands made upon it.
a. Useful output
b. Cost effectiveness
c. Flexibility
Answer:
. Useful output
Cost effectiveness
Flexibility
Useful output
Flexibility
Explanation:
Accounting principles are guidelines that should guide companies when reporting financial data.
If the output is useful, it would contain the information needed by users of accounting information in terms they understand, on time and it should not be misleading
The accounting information should be cost effective. It should be profitable to the company to provide the information. The cost of providing the information should be less than the cost
The information should be flexible. It should not only be suitable for only some particular users of accounting information but to all users of accounting information
On May 1, 2020, Richardson Inc. entered into a contract to deliver one of its specialty mowers to Kickapoo Landscaping Co. The contract requires Kickapoo to pay the contract price of $900 in advance on May 15, 2020. Kickapoo pays Richardson on May 15, 2020, and Richardson delivers the mower (with cost of $575) on May 31, 2020.
Required:
a. Prepare the journal entry on May 1, 2020, for Richardson.
b. Prepare the journal entry on May 15, 2020, for Richardson.
c. Prepare the journal entry on May 31, 2020, for Richardson.
Answer:
A. No entry
B. Dr Cash $900
Cr Unearned sales Revenue $900
C. Dr Unearned sales Revenue $900
Dr Cost of goods sold $575
Cr Sales Revenue $900
Cr Inventory $575
Explanation:
A. Preparation of the journal entry on May 1, 2020, for Richardson.
May 1, 2020
No entry
B. Preparation of the journal entry on May 15, 2020, for Richardson.
May 15, 2020
Dr Cash $900
Cr Unearned sales Revenue $900
C Preparation of the journal entry on May 31, 2020, for Richardson.
May 31, 2020
Dr Unearned sales Revenue $900
Dr Cost of goods sold $575
Cr Sales Revenue $900
Cr Inventory $575
Barrington Industries anticipated selling 29,000 units of a major product and paying sales commissions of $6 per unit. Actual sales and sales commissions totaled 31,500 units and $182,700, respectively. If the company used a static budget for performance evaluations, Barrington would report a cost variance of: Multiple Choice $6,300U. $6,300F. $8,700U. $8,700F. None of the answers is correct.
Answer:
Barrington would report $8,700U cost variance.
Explanation:
This can be calculated as follows:
Actual sales commissions = $182,700
Budgeted sales commissions = Anticipated sales units * commissions of per unit = 29,000 * $6 = $174,000
Sales commission cost variance = Actual sales commissions - Budgeted sales commissions = $182,700 - $174,000 = $8,700U
Since the Actual sales commissions is greater than Budgeted sales commissions, the cost variance is unfavourable and Barrington would report $8,700U cost variance.
The Jamison Company's inventory was destroyed on July 4, 2016, when its warehouse caught on fire early in the morning. Inventory was totally destroyed. The accounting records, which were located in a fireproof vault, contained the following information: Sales (1/1/16 through 7/3/16)$240,000 Purchases (1/1/16 through 7/3/16)180,000 Inventory (1/1/16)45,000 Gross profit ratio25% of cost Using the gross profit method, what is the estimated cost of the inventory that was destroyed by the fire
Answer:
$15,000
Explanation:
With regards to the above information, the estimated cost of inventory that was destroyed by fire is computed as
= [Sales - (Purchases + Inventory)]
Given that;
Sales 1/1/16 through 7/3/16 = $240,000
Purchases 1/1/16 through 7/3/16 = $180,000
Inventory 1/1/16 = $45,000
= [$240,000 - ($180,000 + $45,000)]
= $240,000 - $225,000
= $15,000
The following information applies to the questions displayed below Over a four-year period, Jackie Corporation reported the following series of gross profits 2018 2019 2020 2021 $60,000 $66,000 $74,000 $90,000 Cost of goods sold32,000 46,00028,000 48,000 $28,000 $20,000 $46,000 $42,000 Net sales Cross profit In 2021, the company performed a comprehensive review of its inventory accounting procedures. Based on this review company records reveal that ending inventory was understated by $11,000 in 2019. Inventory in all other years is correct. Problem 6-10A Part 1
Required:
1. Calculate the gross profit ratio for each of the four years based on amounts originally reported. (Round your answers to the nearest whole percent.) Gross Profit Ratio 2018 2019 2020 2021 The following information applies to the questions displayed below Over a four-year period, Jackie Corporation reported the following series of gross profits 2021 Net sales Cost of goods sold Gross profit $60,000 $66,000 $74,000 $90,000 $28,000 $20,000 46,000 $42,000 In 2021, the company performed a comprehensive review of its inventory accounting procedures. Based on this review, company records reveal that ending inventory was understated by $11,000 in 2019. Inventory in all other years is correct
2. Calculate the gross profit ratio for each of the four years based on corrected amounts. (Round your answers to the nearest whole percent.) Gross Ratio 2018 2019 2020 2021
Answer:
1. Gross Profit ratio
2018 47%
2019 30%
2020 62%
2021 47%
2. Gross Profit ratio
2018 47%
2019 47%
2020 47%
2021 47%
Explanation:
1. Calculation for the gross profit ratio for each of the four years based on amounts originally reported.
2018 2019 2020 2021
Net sales $60,000 $66,000 $74,000 $90,000
Less Cost of goods sold $32,000 $46,000 $28,000 $48,000
=Gross profit$ 28,000 $20,000 $46,000 $42,000
Gross Profit ratio
2018 47% =$28,000/$60,000
2019 30% =$20,000/$66,000
2020 62% =$46,000/$74,000
2021 47% =$42,000/$90,000
2. Calculation for the gross profit ratio for each of the four years based on corrected amounts.
Cost of goods sold 2019=$46,000-$11,000
Cost of goods sold 2019=$35,000
Cost of goods sold 2020=$28,000+$11,000
Cost of goods sold 2020=$39,000
2018 2019 2020 2021
Net sales $60,000 $66,000 $74,000 $90,000
Less Cost of goods sold $32,000 $35,000 $39,000 $48,000
=Gross profit $28,000 $31,000 $35,000 $42,000
Gross Profit ratio
2018 47% =$28,000/$60,000
2019 47% =$31,000/$66,000
2020 47% =$35,000/$74,000
2021 47% =$42,000/$90,000
On the basis of the following data, determine the value of the inventory at the lower of cost or market.
Inventory Item Inventory Quantity Cost per Unit Market Value per Unit
(Net Realizable Value)
Birch 100 $125 $120
Cypress 75 100 108
Mountain Ash 80 90 86
Spruce 130 74 80
Willow 60 105 98
Answer:
Total inventory value is $41,880.
Explanation:
Note: See the attached excel file for the calculation of the the value of the inventory at the lower of cost or market.
From the attached excel file, we have:
Inventory Item Total Lower of Cost or Market ($)
Birch 12,000
Cypress 7,500
Mountain Ash 6,880
Spruce 9,620
Willow 5,880
Total 41,880
Therefore, total inventory value is $41,880.
Audited Balance 10/31/2018 Preliminary Balance 10/31/2019
Sales* $56,038,100 $61,641,910
Executive salaries 544,881 583,956
Factory hourly payroll 10,402,954 11,697,055
Factory supervisors' salaries 659,285 770,600
Office salaries 1,948,821 2,694,881
Sales commissions 2,950,799 2,829,500
Sales have increased 10% over prior year. 3% percent of that is due to an increase in the average selling price. The remaining 7% is attributed to an increase in the number of units sold.
Required:
Journalize the entries.
Answer:
Accounts Receivable (Dr.) $61,641,910
Sales (Cr.) $61,641,910
Executive Salaries Expense (Dr.) $58,956
Executive Salaries Payable (Cr.) $58,956
Hourly Payroll Expense (Dr.) $11,697,055
Hourly Payroll Payable (Cr.) $11,697,055
Factory Supervisor Salaries Expense (Dr.) $770,600
Factory Supervisor Salaries Payable (Cr.) $770,600
Office Salaries Expense (Dr.) $58,956
Office Salaries Payable (Cr.) $58,956
Sales Commission (Dr.) $2,829,500
Cash (Cr.) $2,829,500
Explanation:
The sales rise is 10% due to out of which 3% is due to rise in selling price and the rest 7% rise is due to number of units sold.
The 3% rise accounts for $1,681,143 and the 7% increase is $3,922,667.
Concord Corporation had 302000 shares of common stock issued and outstanding at December 31, 2020. No common stock was issued during 2021. On January 1, 2021, Concord issued 201000 shares of nonconvertible preferred stock. During 2021, Concord declared and paid $100000 cash dividends on the common stock and $81000 on the preferred stock. Net income for the year ended December 31, 2021 was $611000. What should be Concord's 2021 earnings per common share
Answer:
$1.05 per share
Explanation:
Earnings per share is computed as
= (Net income reported - Preferred stock dividend) ÷ (Outstanding number of shares + additional shares issued)
= ($611,000 - $81,000) ÷ (302,000 + 201,000)
= $530,000 ÷ 503,000
= $1.05 per share.
Therefore, Concord's 2021 earnings per common share is $1.05 per share.
Suppose a firm produces with a technology that exhibits constant returns to scale at all levels of production. The firm's inputs are workers and laptops. The firm sells its output in a perfectly competitive market. It also hires its inputs (hires workers and rents laptops) in perfectly competitive markets. Assume that in the long run the firm produces y units of output using x1 workers and x2 laptops. If the firm doubles the amount of workers and laptops (using 2x1 and 2x2), we would expect the firm's long-run profits to
Answer:
Not change
Explanation:
In the long run we expect firms to earn zero profits. With competitive markets for both inputs and output, and with constant returns to scale, a doubling of all inputs would lead to twice as much output, twice as much revenue, and twice as much cost.
All materials are added at the start of production. Refer to Keyser Corporation. Assume that the cost per EUP for material and conversion are $1.75 and $4.55, respectively. What is the cost assigned to ending Work in Process
Answer:
The cost assigned to ending Work in Process explanations only.
Explanation:
Hi your question is incomplete, I tried to look for it online but I could not find it.
Here are some explanations and steps you need to consider to answer this question.
The cost assigned to ending Work in Process :
Ending Work in Process usually have different number of equivalent units of production with respect to materials and conversion cost depending on the percentage of work completed for materials and conversion during the production process.
Step 1
So the first step is to calculate the equivalent units of production of Ending Ending work in process for Materials and Conversion costs.
Equivalent units of production = Physical units x Percentage completion (Materials / Conversion).
Step 2
The next step would be to calculate the cost assigned to ending Work in Process.
Equivalent units in materials are multiplied against Cost per Equivalent Unit) EUP for materials ($1.75 ) so is the Equivalent units in conversion costs against Cost per Equivalent Unit) EUP for conversion ($1.75). The total of the two amounts is the cost assigned to ending Work in Process.
Leo Manufacturing Company uses the FIFO method in its process costing system. The first processing department, the Soldering Department, started the month with 32,000 units in its beginning work-in-process inventory that were 70% complete with respect to conversion costs. The conversion cost in this beginning work-in-process inventory was $116,150. An additional 84,500 units were started into production during the month. There were 38,000 units in the ending work-in-process inventory of the Soldering Department that were 80% complete with respect to conversion costs. A total of $580,125 in conversion costs were incurred in the department during the month. What would be the cost per equivalent unit for conversion costs?
Answer:
$6.71 per unit
Explanation:
The computation of the cost per equivalent unit for conversion costs is shown below:
As we know that
Cost per equivalent unit for conversion costs is
= Total conversion cost in the month ÷ Equivalent Units of Production
where,
Equivalent units of Production is
= (Beginning Inventory × Percentage completed in the month) + [(Units started in the month - Ending Inventory) × 100%] + (Ending Inventory × percentage completed in the month)
= (32,000 × 30%) + [(84,500 - 38,000) × 100%] + (38,000 × 80%)
= 86,500 units
Now the cost per equivalent unit for conversion cost is
= $580,125 ÷ 86,500 units
= $6.71 per unit
Stockbrokers who market their services with confidence that they can outperform the market average in picking stocks are especially likely to a employ workers who use heuristics. b find it difficult to decide which stocks to purchase. c use algorithms to generate stock choices. d avoid the dangers of belief perseverance. e appear credible to their customers.
Answer:
e. appear credible to their customers.
Explanation:
Sarbanes-Oxley Act of 2002 is a legal framework which was passed by the 107th U.S Congress on the 30th of July, 2002. The law required that investment banking be completely made rid of research analysts who works at a broker-dealer firms, so that the analysts are not influenced to write favorable reports to enhance their potential investment banking businesses.
It is a law that imposes a stiffer penalty for any securities related law-break offence by accountants, auditors, etc., by mandating strict reforms to the existing securities regulations.
A stockbroker refers to an individual who is saddled with the responsibility of buying and selling stocks (shares) on a stock exchange market on behalf of his or her clients.
Stockbrokers who market their services with confidence that they can outperform the market average in picking stocks are especially likely to appear credible to their customers.
Imagine a hypothetical economy with a population of 100 people, 80 of which over sixteen. Forty eight of these people who are working and twelve people who are willing, able and looking for work cannot find jobs. The unemployment rate in this economy is____________ % (enter percentage as a whole number, not a decimal, no percentage sign). S
Suppose that 10 of those unemployed people get discouraged and give up looking for work. Now, the unemployment rate is __________% (enter percentage as a whole number, not a decimal, no percentage sign).
Answer:
a) unemployment rate = 15
b) unemployment rate = 2.5
Explanation:
unemployed people are those who are willing and available to work and have actively been seeking a job in the past four weeks. This accurately describes the 12 people who are willing, able and looking for work but cannot find jobs. To calculate the unemployment rate in percentage, the following formula is used:
[tex]unemployment\ rate = \frac{number\ of\ unemployed}{labour\ force} \times 100\\[/tex]
Where:
a) Number of unemployed = 12
Labour force = 80 (number of people over 16 years of age)
[tex]\therefore unemployment\ rate = \frac{12}{80} \times 100 = 0.15 \times 100 = 15\\[/tex]
b) if 10 of the unemployed people get discouraged and give up looking for work, the number of unemployed becomes 2 persons, (12 - 10 = 2).
[tex]\therefore unemployment\ rate = \frac{2}{80} \times 100 = \frac{200}{80} = 2.5[/tex]
The Bandeiras Corporation, a merchandising firm, has budgeted its activity for December according to the following information:Sales at $650,000, all for cash.Merchandise inventory on November 30 was $300,000.The cash balance at December 1 was $38,000.Selling and administrative expenses are budgeted at $120,000 for December and are paid in cash.Budgeted depreciation for December is $65,000.The planned merchandise inventory on December 31 is $330,000.The cost of goods sold is 70% of the sales price.All purchases are paid for in cash.There is no interest expense or income tax expense.The budgeted cash receipts for December are:
Answer:
See below
Explanation:
The budgeted cash disbursement for December are;
Beginning cash balance
$38,000
Sales
$650,000
Selling and admin
($120,000)
* Purchases (see calculation below)
($485,000)
Closing cash balance
$83,000
We will use the below to get purchases
Opening stock + Purchases - Closing stock = Cost of sales
Therefore,
$300,000 + Purchases - $330,000 = 70% × $650,000
Purchases = $455,000 + $330,000 - $300,000
Purchases = $485,000
The budgeted cash disbursement
= Purchases + Selling and admin
= $485,000 + $120,000
= $605,000
Scare-2-B-U (S2BU) specializes in costumes for all occasions. The average price of each of its costumes is $240. For each occasion, S2BU receives a 20 percent deposit two months before the occasion, 50 percent the month before, and the remainder on the day the costume is delivered. Based on information at hand, managers at S2BU expect to make costumes for the following number of occasions during the coming months. April 75 May 45 June 30 July 60 August 75 September 165 Required: a. What are the expected revenues for S2BU for each month, April through September
Answer:
Results are below.
Explanation:
Giving the following information:
Selling price= $240
Sales in units:
April 75
May 45
June 30
July 60
August 75
September 165
The sales revenue is calculated using the following formula:
Sales revenue= number of units sold * selling price per unit
Sales revenue:
April= 75*240= $18,000
May= 45*240= $10,800
June= 30*240= $7,200
July= 60*240= $14,400
August= 75*240= $18,000
September= 165*240= $39,600
Jane Industries manufactures plastic toys. During October, Jane's Fabrication Department started work on 10,400 models. During the month, the company completed 11,200 models, and transferred them to the Distribution Department. The company ended the month with 2200 models in ending inventory. There were 3000 models in beginning inventory. All direct materials costs are added at the beginning of the production cycle and conversion costs are added uniformly throughout the production process. The FIFO method of process costing is being followed. Beginning work in process was 30% complete as to conversion costs, while ending work in process was 55% complete as to conversion costs.
Beginning inventory​:
Direct materials costs $20,000
Conversion costs $11,100
Manufacturing costs added during the accounting period​:
Direct materials costs $70,700
Conversion costs $240,500
What is the amount of direct materials cost assigned to ending work-in-process inventory at the end of October?
a. $19,783
b. $20,337
c. $10,923
d. $14,916
Answer:
d. $14,916
Explanation:
Note that Jane Industries uses FIFO method of process costing.
Step 1 : Equivalent Units in respect of materials
Materials = 3,000 x 0 % + 8,200 x 100% + 2,200 x 100%
= 10,400 units
Step 2 : Cost per Equivalent unit in respect of materials
Cost per Equivalent = $70,700 ÷ 10,400 units
= $6.80
Step 3 : direct materials cost assigned to ending work-in-process
Ending work-in-process (Materials Cost) = 2,200 x $6.80
= $14,960
On April 1, Townsley Company sold merchandise with a selling price of $10,000 on account to Trout Company, with terms 3/10, n/30. On April 5, Trout Company returned merchandise with a selling price of $1,000. Trout Company paid the amount due on April 9. What journal entry did Townsley Company prepare on April 9 assuming the gross method is used
Answer and Explanation:
The journal entry is shown below:
Cash $8,730
Sales Discount ($9,000 × 3%) $270
To Accounts receivable $9,000 ($10,000 - $1,000)
Here cash and sales discount is debited as it increased the assets and discount while on the other hand the account receivable should be credited as it reduced the assets
Spiess Corporation has two major business segments--Apparel and Accessories. Data concerning those segments for December appear below: Sales revenues, Apparel $ 775,000 Variable expenses, Apparel $ 314,000 Traceable fixed expenses, Apparel $ 201,000 Sales revenues, Accessories $ 799,000 Variable expenses, Accessories $ 425,000 Traceable fixed expenses, Accessories $ 128,000 Common fixed expenses totaled $401,000 and were allocated as follows: $172,000 to the Apparel business segment and $229,000 to the Accessories business segment. Required: Prepare a segmented income statement in the contribution format for the company.
Answer:
Spiess Corporation
The segmented income statement in the contribution format for December:
Apparel Accessories Total
Sales revenues, $ 775,000 $ 799,000 $1,574,000
Variable expenses, 314,000 425,000 739,000
Contribution margin $461,000 $374,000 $835,000
Traceable fixed expenses, 201,000 128,000 329,000
Common fixed expenses 172,000 229,000 401,000
Total expenses $373,000 $357,000 $730,000
Net income $88,000 $17,000 $105,000
Explanation:
a) Data and Calculations:
Apparel Accessories
Sales revenues, $ 775,000 $ 799,000
Variable expenses, 314,000 425,000
Traceable fixed expenses, 201,000 128,000
Common fixed expenses 172,000 229,000
b)Spiess' segmented income statement presents the revenues and costs according to the business segments to enable the managers understand how their specific segments are performing vis-a-vis others in Spiess Corporation. It serves as a managerial tool for business insights.
The Sandeep Company's April 30 pre-reconciliation cash balance on its books was $35,000. While preparing the April 30 bank reconciliation, Sandeep determined that outstanding checks total $11,000, deposits in transit total $7,000, and bank service charges are $50. Assuming there are no other reconciling items, what was Sandeep's April 30 cash balance per the bank statement
Answer: $38,950
Explanation:
The bank balance and the book cash balance might often be different for different reasons, one of which is due to the transactions recorded in the books not having been processed by the banks amongst others.
The books and bank balance will therefore need to be reconciled.
Balance per bank statement = Cash balance in books + Outstanding checks - Deposits in transit - Bank charges
= 35,000 + 11,000 - 7,000 - 50
= $38,950
Jack and Jill are the only two residents in a neighbourhood, and they would like to hire a security guard. The value of a security guard is $50 per month to Jack and $90 per month to Jill. Irrespective of who pays the guard, the guard will protect the entire neighbourhood and charge $120 per month for the service. Suppose Jack earns $4,000 per month and Jill earns $8,000 per month.
a. With a proportional tax of 1 percent on income, how much would Jack and Jill pay, and would it be enough to pay for the security guard?
Jack would pay $ _____.
Jill would pay $ _____.
This tax _____ be enough to pay for the security guard.
b. Suppose instead that Jack proposes a payment scheme under which Jack and Jill would each receive the same net benefit from hiring the guard. How much would Jack and Jill pay now?
Jack would pay $ _____.
Jill would pay $ _____.
Would both Jack and Jill vote for this scheme? _____
Answer:
Jack and Jill
a. With a proportional tax of 1 percent on income, it would be enough to pay for the security guard $120.
Jack would pay $ __40___.
Jill would pay $ __80___.
This tax _will____ be enough to pay for the security guard.
b. Based on net benefit from the guard:
Jack would pay $ __43___.
Jill would pay $ _ 77____.
Would both Jack and Jill vote for this scheme? __No___ Jack will feel cheated by Jill in the sum of $3. Jack will likely prefer the 1% based on income.
Explanation:
a) Data and Calculations:
Value of a security guard for Jack = $50 per month
Value of a security guard for Jill = $90 per month
Total value of a security guard for both Jack and Jill = $140 ($50 + $90)
Cost of hiring a guard = $120 per month
Jack's monthly earnings = $4,000
Jill's monthly earnings = $8,000
Total monthly earnings for both Jack and Jill = $12,000
a. Proportional tax of 1 percent on income = $120 ($12,000 * 1%)
Jack will pay $4,000 * 1% = $40
Jill will pay $8,000 * 1% = $80
Total = $120
b. Net benefit scheme:
Jack will pay $50/$140 * $120 = $43
Jill will pay $90/$140 * $120 = $77
Total = $120
13. Suppose we can postpone investment three years and, with the new improved technology, the project will have similar risk but for an investment of $5 million will generate perpetual cash flows (beginning exactly one year after the investment) of $500,000. Would you recommend that we invest in the original project or wait three years to invest in the new project
Answer:
Invest in the original project.
Explanation:
It is better for the company to invest in the current project rather than waiting for three year. The project after three years will require initial investment of $5 million and will provide returns of $500,000. These cash flows needs to be discounted at a discount factor to determine the present value of the cash flow. The value of money three years later will be lower than the current value.
Triple Tier Bakery is a locally-owned business offering custom cakes, cupcakes, desserts and wedding cakes. At year end, Triple Tier's balance of Allowance for Uncollectible Accounts is $550 (credit) before adjustment. The Accounts Receivable balance is $22,500. During the next year, Triple Tier estimates that 10% of accounts will be uncollectible. Record the adjustment required for Allowance for Uncollectible Accounts?
Answer and Explanation:
The adjusting entry is
Bad Debts expense ($22,500 ×10% - $550) $1,700
To Allowance for uncollectible accounts $1,700
(Being adjustment for Allowance for Uncollectible Accounts is recorded)
Here bad debt expense is debited as it increased the expense and credited the allowance as it reduced the assets
Setrakian Industries needs to raise $48.5 million to fund a new project. The company will sell bonds that have a coupon rate of 5.56 percent paid semiannually and that mature in 10 years. The bonds will be sold at an initial YTM of 6.13 percent and have a par value of $2,000. How many bonds must be sold to raise the necessary funds
Answer:
25,317 unit
Explanation:
Current price of bond = PV(Rate, Nper, Pmt, Fv)
Current price of bond = PV(6.13%/2, 10*2 ,5.56%/2*2000, 2000)
Current price of bond = $1,915.71
Number of bonds to issue = $48,500,000 / $1,915.71
Number of bonds to issue = 25316.98430
Number of bonds to issue = 25,317 unit
Scenario: You are in the market for a new car. You do not have a trade-in, but you have saved $3,000 toward a down payment. You currently earn $3,750.00 gross monthly income, of which 28% is withheld for various deductions. You have heard of the 20% rule of thumb, but want to limit your payments to no more than 18% of your net monthly income because of other debt commitments. You currently have a credit score of 685. You expect to drive the car an average 15,000 miles per year. You're considering purchasing a used-rather than new car. This strategy offers several advantages.
1. Which of the following is not an advantage of purchasing a used car?
A. The reduced down payment required for the purchase.
B. A lack of knowledge and confidence in the mechanical condition of the car.
C. The price of the automobile.
D. Avoidance of the vehicle's significant decrease in value due to depreciation.
2. Which of the following will directly affect the final cost of a new car if you elect to purchase the vehicle?
A. The amount of the trade-in on an existing vehicle (if applicable).
B. The color of the vehicle.
C. The extent to which you dress up when you negotiate the purchase.
D. The amount of any rebate or incentives associated with the purchase of the new vehicle.
E. The period or term of any loan used to finance the purchase.
3. Alternatively, after seeing several television commercials suggesting the benefits of leasing a new automobile, you’ve started thinking about the phenomenon of leasing. Which of the following statements regarding leasing is true?
A. If you select to use a closed-end lease, then you’ll be free from any final payment. That’s why they call it a walkaway lease.
B. Leasing can result in lower monthly payments than would be incurred if you purchased the vehicle.
C. Customary end-of-term charges on a lease can include a disposition fee, an early termination charge, and an excess mileage charge.
D. If you use an open-end lease, you’ll be required to pay the difference between the vehicle’s projected residual value and its actual market value.
E. Leases work best for people who want to drive a vehicle for years and years, and drive at least 30,000 miles every year.
4. A lease payment is based on four variables. Which of the following is not one of these variables?
A. The money, or lease, factor.
B. The vehicle’s residual value.
C. The closed-end premium.
5. Being upside down in a loan is the same as having:____.
A. Negative equity.
B. A negative interest rate.
6. Complete the following table to determine your desired maximum monthly payment.
Gross income (monthly) $
Deductions (dollar amount) $
Take-home pay $
Percentage allotted for car payment %
Maximum monthly payment $
7. You have decided to purchase a new car and have negotiated the price. A four-year loan is resulting in payments of $586.00 per month. How might you get your monthly payment down to your desired monthly goal?
A. Shop for a loan with a higher interest rate.
B. Extend the term of the loan from four to five years.
C. Shorten the term of the loan from four to three years.
D. Shop for a loan with a lower interest rate.
8. A good credit score is an important factor when buying a car because it allows you to (1)____obtain financing terms, and (2)_____afford a expensive or better vehicle for the same loan amount.
Answer:
Market for a New Car
1. A disadvantage of purchasing a used car:
B. A lack of knowledge and confidence in the mechanical condition of the car.
2. D. The amount of any rebate or incentives associated with the purchase of the new vehicle.
3. B. Leasing can result in lower monthly payments than would be incurred if you purchased the vehicle.
4. C. The closed-end premium.
5. Being upside down in a loan is the same as having:____.
A. Negative equity.
6. Gross income (monthly) $3,750
Deductions (dollar amount) $1,050
Take-home pay $2,700
Percentage allotted for car payment 18%
Maximum monthly payment $486
7. Using the savings towards a down payment can help reduce the monthly payment to $486 from $586.
Explanation:
a) Data and Calculations:
Savings towards down payment = $3,000
Gross monthly income = $3,750
Withholdings = 28% 1,050 ($3,750 * 28%)
Net after withholdings $2,700
Payment for car
limited to 18% $486
Net after car payment $2,214
Gabuat Corporation, which has only one product, has provided the following data concerning its most recent month of operations: Selling price $ 164 Units in beginning inventory 0 Units produced 3,700 Units sold 3,260 Units in ending inventory 440 Variable costs per unit: Direct materials $ 51 Direct labor $ 32 Variable manufacturing overhead $ 6 Variable selling and administrative expense $ 6 Fixed costs: Fixed manufacturing overhead $88,800 Fixed selling and administrative expense $32,600 The total gross margin for the month under the absorption costing approach is:
Answer:
$155,700
Explanation:
Absorption costing
Sales $164 × 3,260 = $534,640
Less cost of goods sold
Opening inventory
Add variable cost of goods manufactured
[3,700 × ($51 + $32 + $6 = $89)] = $329,300
Fixed manufacturing cost
$88,800
Cost of goods available for sale
$418,100
Less ending inventory 440 × $89
$39,160
Cost of goods sold
$378,940
Gross margin
$155,700
Less variable selling and administration expenses $6 × 3,260
$19,560
Fixed selling and administrative expenses
$32,600
The total gross margin for the month under the absorption costing approach is $155,700
Super Saver Groceries purchased store equipment for $43,000. Super Saver estimates that at the end of its 10-year service life, the equipment will be worth $4,000. During the 10-year period, the company expects to use the equipment for a total of 13,000 hours. Super Saver used the equipment for 1,200 hours the first year. Required: Calculate depreciation expense of the equipment for the first year, using each of the following methods. (Do not round your intermediate calculations.)
Answer:
$3900
$8600
$3600
Explanation:
This is the remaining part of the question :
Required: Calculate depreciation expense of the equipment for the first year, using each of the following methods
1. Straight-line.
2.Double Declining Method
3.Activity Based
Straight line depreciation expense = (Cost of asset - Salvage value) / useful life
(43,000 - 4000) / 10 = $3900
Depreciation expense using the double declining method = Depreciation factor x cost of the asset
Depreciation factor = 2 x (1/useful life) = 2/10 = 0.2
Depreciation expense = 0.2 x $43,000 = $8600
Activity method based on hours worked = (hours worked that year / total hours of the machine) x (Cost of asset - Salvage value)
(1200 / 13,000) x (43,000 - 4000) = $3600
Arntson, Inc., manufactures and sells two products: Product R3 and Product N0. The annual production and sales of Product of R3 is 200 units and of Product N0 is 100 units. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below: Expected ProductionDirect Labor-Hours Per UnitTotal Direct Labor-Hours Product R32008.01,600 Product N010011.01,100 Total direct labor-hours 2,700 The direct labor rate is $15.80 per DLH. The direct materials cost per unit is $287.80 for Product R3 and $104.80 for Product N0. The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: EstimatedExpected Activity Activity Cost PoolsActivity MeasuresOverhead CostProduct R3Product N0Total Labor-relatedDLHs$39,6361,6001,1002,700 Production ordersorders 57,4216007001,300 Order sizeMHs 432,0753,6003,9007,500 $529,132 The unit product cost of Product N0 under activity-based costing is closest to: (Round your intermediate calculations to 2 decimal places.) Select one: A. $2,042.37 per unit B. $2,434.27 per unit C. $2,996.06 per unit D. $2,525.39 per unit
Answer:
C.$2,996.06 per unit
Explanation:
Calculation to determine what The unit product cost of Product N0 under activity-based costing is closest to:
First step is to Compute the activity rates
Activity Cost (a)Estimated Overhead cost (b)Total Expected Activity (a) ÷(b)Activity Rate
Labor-related $39,636÷2,700DLHs=$14.68per DLH
Production orders $57,421÷ 1,300orders =$44.17per order
Order size $432,075 ÷7,500MHs =$57.61per MH
Second step is to Compute the overhead cost per unit under activity-based costing
Using this formula
Overhead cost per unit=Activity Cost Pools and Activity Rates*Expected Activity=Amount
Let plug in the formula
Product N0
Labor-related, at $14.68 per DLH *1,100 =$16,148
Production orders, at $44.17 per order *700 =$30,919
Order size, $57.61 per MH *3,900 =$224,679
Total overhead costs assigned (a)$271,746
($16,148+$30,919+$224,679)
Number of units produced (b)100
Overhead cost per unit (a) ÷ (b)$2,717.46
($271,746÷100)
Third step is to Compute the unit product costs under activity-based costing
Product N0
Direct materials $104.80
Direct labor $173.80
(11.0 DLHs × $15.80 per DLH)
Overhead $2,717.46
Unit product cost $2,996.06
($104.80+$173.80+$2,717.46)
Therefore The unit product cost of Product N0 under activity-based costing is closest to: $2,996.06
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which gas is reffered to as laughing gas
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Answer:
Nitrous oxide is a safe and effective sedative agent that is mixed with oxygen and inhaled through a small mask that fits over your nose to help you relax. Nitrous oxide, sometimes called “laughing gas,” is one option your dentist may offer to help make you more comfortable during certain procedures.
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Beeman Company exchanged machinery with a fair value of $4,680,000, a recorded cost of $7,200,000 and accumulated depreciation of $3,600,000 with Lacey Corporation for machinery Lacey owns.
The machinery that Lacey owns has a fair value of $4,520,000, a recorded cost of $8,640,000, and accumulated depreciation of $4,752,000. Lacey also gave Beeman $160,000 of cash in the exchange. Assume depreciation has already been updated.
Instructions
(a) Prepare the entries on both companies' books assuming that the exchange had commercial substance.
(b) Prepare the entries on both companies' books assuming that the exchange lacked commercial substance
Answer:
See below
Explanation:
A. Commercial substance
Beeman company
Machinery ...............................Dr
$4,520,000
Accumulated depreciation......Dr $3,600,000
Cash.......Dr $160,000
To Gain on disposal of plant assets ..........Cr $1,080,000
To equipment ............Cr $7,200,000
Lacey Company
Equipment ............Dr $4,680,000
Accumulated depreciation ........Dr $4,752,000
To Gain on disposal of equipment ..............Cr $632,000
To equipment ...........Cr $8,640,000
To cash ................Cr $160,000
B. Lacked commercial substance
Berman company
Equipment ............Dr $3,476,923
Accumulated depreciation .........Dr $3,600,000
Cash ........Dr $160,000
To gain on disposal of equipment ..............Cr $36,923
To equipment ..............Cr $7,200,000
Working
= ($160,000 / ($160,000 + $4,520,000) × $1,080,000
= $36,923
Lacey corporation
Equipment ..............Dr $4,048,000
Accumulated depreciation...........Dr $4,752,000
To equipment .................Cr $8,640,000
To cash ..................................... Cr $160,000
Commercial substance
Lacey company
Cost............ Dr $8,640,000
Accumulated depreciation...........Dr $4,752,000
Book value............... Dr $3,888,000
Fair value.......... Dr $4,520,000
Gain on disposal .................Dr $632,000