Answer and Explanation:
The computation is shown below:
a. Account receivable turnover ratio is
= Net credit sales ÷ Average accounts receivable
where,
the Average accounts receivable would be
= (Accounts receivable, beginning of year + Accounts receivable, end of year) ÷ 2
For year 2
= ($3,522) ÷ ($81 + $68) ÷ 2
= 47.3 times
For year 1
= ($3,283) ÷ ($68 + $74) ÷ 2
= 46.2 times
b. The days sales in receivables is
= 365 days ÷ account receivable turnover ratio
For year 2
= 365 days ÷ 47.3 times
= 7.7 days
For year 1
= 365 days ÷ 46.2 times
= 7.9 days
c. As we can see that the change in accounts receivable turnover from year 1 to year 2 i.e from 46.2 times to 47.3 times is favorable change and it is increasing and the change in days sales in receivables from year 1 to year 2 i.e from 7.9 days to 7.7 days indicates a favorable change
A 20-year bond of a firm in severe financial distress has a coupon rate of 12% and sells for $885. The firm is currently renegotiating the debt, and it appears that the lenders will allow the firm to reduce coupon payments on the bond to one-half the originally contracted amount. The firm can handle these lower payments. What is (a) the stated and (b) the expected yield to maturity of the bonds? The bond makes its coupon payments annually. (Do not round intermediate calculations. Round your answers to 3 decimal places.)
Answer:
(a) Using Microsoft excel, the stated yield is 4.04%
(b) The expected yield of the maturity bonds is 4.03%
Explanation:
Tamarisk Company leases a building and land. The lease term is 4 years and the annual fixed payments are $720,000. The lease arrangement gives Tamarisk the right to purchase the building and land for $13,750,000 at the end of the lease. Based on an economic analysis of the lease at the commencement date, Tamarisk is reasonably certain that the fair value of the leased assets at the end of lease term will be much higher than $13,750,000.
What are the total lease payments in this lease arrangement?
Answer:
$17,790,000
Explanation:
The computation of the total lease payment is shown below:
As we know that
Total lease payment is
= [(Annual lease payment × Number of years of the lease) + Value of right to purchase at the building and land at the end of the year]
= ($720,000 × 7) + $12,750,000
= $17,790,000
We simply applied the above formula so that the total lease payments could arrive
Mention and explain the different types of checks, and is the type of the check effect
the indorsement?
Answer:
There are types of checks that are used in endorsements.
Explanation:
The checks are different types that are used in endorsements by bearers
The Bank cheque The order chequeThe bearer chequeThe blank chequeThe counter chequeThe stale chequeThe mutilated chequeThe post-dated chequeThe open chequeThe crossed chequeThe gift chequeThe traveler chequeThe banker chequeThe outstanding chequeTextra Plastics produces parts for a variety of small machine manufacturers. Most products go through two operations, molding and trimming, before they are ready for packaging. Expected costs and activities for the molding department and for the trimming department for 2017 follow. (Round "OH rate and cost per unit" answers to 2 decimal places.)
Molding Trimming
Direct labor hours 52,000 DLH 48,000 DLH
Machine hours 30,500 MH 3,600 MH
Overhead costs $ 730,000 $ 590,000
Data for two special order parts to be manufactured by the company in 2017 follow:
Part A27C Part X82B
Number of units 9,800 units 54,500 units
Machine hours
Molding 5,100 MH 1,020 MH
Trimming 2,600 MH 650 MH
Direct labor hours
Molding 5,500 DLH 2,150 DLH
Trimming 700 DLH 3,500 DLH
Answer and Explanation:
1. The computation of the departmental overhead rate for the molding department based on machine hours and for trimming department based on direct labor hours are shown below:
For molding department
= Overhead cost ÷ machine hours
= $730,000 ÷ 30,500 machine hours
= $23.93 per machine hour
For trimming department
= Overhead cost ÷ direct labor hours
= $590,000 ÷ 48,000 direct labor hours
= $12.29 per machine hour
2. Now the total overhead cost for Part A27C and Part X82B and its overhead cost per unit are as follows
Part A27C Activity Departmental For Total Overhead
Driver OH Rate each Cost
Molding Machine
Hours $23.93 Machine $122,065.57
Hour (5,100 MH × 23.93 )
Trimming Direct
Labor Hours $12.29 Direct $8,604.17
Labor Hour (700 DLH × 12.29 )
Total Overheads $130,669.74 ÷ 9,800 units
Overhead per unit $13.33
Part X82B Activity Departmental For Total Overhead
Driver OH Rate each Cost
Molding Machine
Hours $23.93 Machine $24,413.11
Hour (1,020 MH × 23.93 )
Trimming Direct
Labor Hours $12.29 Direct $43,020.83
Labor Hour (3,500 DLH × 12.29)
Total Overhead $674,33.95 ÷ 54,500 units
Overhead per unit $1.24
The expected average rate of return for a proposed investment of $600,000 in a fixed asset, with a useful life of four years, straight-line depreciation, no residual value, and an expected total net income of $216,000 for the 4 years, is:____________A. 18%B. 15%C. 27%D. 9%
Answer:
18%
Explanation:
Average rate of return= Average net income/Average investment ×100/1
Average net income= $216,000/4
= $54,000
Average investment= $600,000/2
= $300,000
Therefore, the average rate of return is calculated as follows.
= $54,000/$300,000 ×100/1
= 0.18×100
=18%
Hence the average rate of return is 18%
Answer:
The answer is 18%
Explanation:
Average rate of Return
= expected total net income / Average investment
Average net income
=$216,000 / 4 = $54,000
Average investment
= $600,000 / 2 = $300,000
Then the expected average rate of return
= $54,000 / $300,000
= 0.18 x 100
= 18%
18% is the average rate of return
The Wilson Company purchased $35,000 of merchandise from the Poole Wholesale Company. Wilson also paid $2,800 for freight costs to have the goods shipped to its location.Which of the following statements regarding the necessary entries for the transactions is true? Wilson uses a perpetual inventory system.
A. Total debits to the inventory account would be $37,800.
B. Total debits to the inventory account would be $35,000.
C. Transportation-in would be debited for $2,800.
D. Total debits to the inventory account would be $2,800
Answer:
Option A, total debits to the inventory account would be $37,800, is correct
Explanation:
The cost of the merchandise inventory to Wilson Company is the cost of the inventory purchased and the freight-in cost.
In other words, the amount to be recognized in merchandise inventory account is the sum of both amounts i.e $35,000+$2800=$37,800
This would be debited to merchandise inventory and $2,800 would be credited to the cash account while $35,000 is credited to accounts payable
You are working as accounting information system(AIS) expert in H and H, a multinational entity(MNE) for couple of years inSpain. One of its subsidiaries in an emerging country of Asia is developing their AIS. Management selected you for this expatriate assignment for the next three years. Your boss will have a metting with you next week. What would you discuss with your boss?
Answer:
stakeholders for the project, documented goal and objective of the assignment, discuss SMART(specific, measurable, agreed, reaganlistic, timeframe) for the assignment, resources for the assignment, GANTT chart of the assignment, risk assessment for the project.
Explanation:
Before starting any major assignment, one must set its goals and objectives very clearly. A list of milestone and progress measuring report must be prepared so that tracking is easy. Also, all the associated risks must be analyze and catered for
When Nancy's aunt left for her annual Christmas vacation, she left Nancy in charge of her coffee shop. During this time, there was a riot in the city and the door of the café got damaged. Under such circumstances, Nancy can make necessary repairs if she cannot reach her aunt for further instructions because she has:_________.
A. express authority.
B. power of attorney.
C. apparent authority.D. inherent agency power
Answer:
inherent agency power
Explanation:
pls mark brainliest
Barriers to International Trade Countries often use various government regulations to manipulate the amount of goods and services imported from other countries. This activity is important because it will help you to understand the effects of trade protectionism on the overall international trading atmosphere. The goal of this exercise is to challenge your knowledge of the different types of international trade barriers. Select the barrier to international trade that each statement best describes. 1. A complete ban on trade with another country or a prohibition on trading specific types of products, services, or technology to another country 2. A customs duty or tax levied mainly on imports 3. The United States only allows a certain amount of aluminum sheet to come into the country from China 4. The United States recently raised taxes on all imported solar panels in order to attempt to make U.S.-made solar panels more competitive 5. A limit on the numbers of a product that can be imported 6. The United States does not export any materials to North Korea that may help North Korea bolster its nuclear program.
Answer: Please refer to Explanation
Explanation:
1. Embargoes and sanctions
When a trade embargo or sanctions are in play, depending on the strength of the nation or International organisation that imposed it, countries are not allowed to trade with the country that is under an embargo. Sometimes the trade embargo can be on all products and sometimes just specific sectors are targeted. An example is the current United States embargo on Venezuela which targets their oil sector and as such most countries are avoiding buying Venezuelan oil.
2. Tariffs
This is a method of reducing the amount of a certain good imported from outside. Tariffs are usually introduced to protect the domestic producers and supplier in an economy and work by taxing imports or placing a customs duty on them. They are usually imposed when the imports are cheaper than domestic Production.
3. Import Quota
Another way to protect the domestic economy. In this scenario, a country allows the import of a certain good only up to an extent for a period which is usually a year. For instance, the United States in this scenario could say that in 2020 only 500 megatons of Aluminum are allowed into the country from China. After that, no more is allowed until 2021.
4. Tariff.
This is a Tariff and as earlier explained, is meant to protect the domestic producers by taxing imports that are cheaper.
5. Import Quota.
This is clearly an import Quota as earlier described because the country is limiting the amount of a certain good that can come into it.
6. Embargoes and Sanctions.
This is a clear example of an embargo. The United States is limiting the amount of goods exported to North Korea because they are under sanctions and embargoes. The United States and Western nations do not want to export anything to North Korea that could aid it's Nuclear Industry so it is a targeted embargo on their nuclear industry.
For each of the following separate transactions,
(a) prepare the reconstructed journal entry and
(b) identify the effect it has, if any, on the investing section or financing section of the statement of cash flows.
1. Sold a building costing $30,000, with $20,000 of accumulated depreciation, for $8,000 cash, resulting in a $2,000 loss.
2. Acquired machinery worth $10,000 by issuing $10,000 in notes payable.
3. Issued 1,000 shares of common stock at par for $2 per share.
4. Notes payable with a carrying value of $40,000 were retired for $47,000 cash, resulting in a $7,000 loss
Answer: The answer is provided below
Explanation:
a. The reconstructed journal entry has been prepared and attached.
b. The following are the effects it has on the investing section or the financing section of the statement of cash flows.
The first transaction will lead to a cash inflow of $8,000 from the investing activities.
The second transaction is non-cash transaction therefore, it will not be reported in either the financing or the investing activities.
The third transaction will lead to a cash inflow of $2,000 from the financing activities.
The fourth transaction will lead to a cash outflow from the financing activities.
Thw diagram has been attached.
ABC company has just purchased a life truck that has a useful life of 5 years. The engineer estimates that maintenance costs for the truck during the first year will be $1,000. As the truck ages, maintenance costs are expected to increase at a rate of $300 per year over the remaining life. Assume that the maintenance costs occur at the end of each year. The firm wants to set up a maintenance account that earns 12% interest per year. All future maintenance expenses will be paid out of this account. How much does the firm have to deposit in the account now
Answer:
Total amount to be invested today =$1,706.432
Explanation:
The first maintenance cost would occur a year from now, then the Present value will be equal to :
PV = 1,000 × 1.12^(-1)
PV = 892.857
The rest of the maintenance cost represents an annuity .
We will determine the PV of the annuity of $300 discounted at 12% per annum starting in year 2
PV = A × 1- (1+r)^(-n)
A- 300, r= 12%, n= 4
PV in year 1 = 300 × 1 - (1.12)^(-4)= 911.204804
PV in year 0= F × (1+r)^(-n)
= 911.204804 × 1.12^(-1)= 813.57
Total amount to be invested today = 813.57 + 892.85=1706.43
Total amount to be invested today =$1,706.432
The First National Bank of Nelsonville has no excess reserves when a new deposit of $10,000 is made. The required reserve ratio for all banks is 5 percent. How much is the largest possible increase in checking account balances throughout the entire banking system
Answer:
$950
Explanation:
Reserve ratio is defined as the percentage amount of deposit that a bank is instructed by the governing central bank to keep as cash reserve. This is used to control the money supply in the economy as the the check - able amount that are subjected to withdrawal is limited to the funds available after the reserve ratio has been considered.
Workings
New deposit - $10,000
Required reserve ratio - 5%
No existing excess ratio as at the time of deposit.
Reserve ratio - 5%*10000 = 50
Increase in checking account = 1000-50
= $950
Primo Industries collected $105,000 from customers in 2019. Of the amount collected, $25,000 was for services performed in 2018. In addition, Primo performed services worth $40,000 in 2019, which will not be collected until 2020. Primo Industries also paid $72,000 for expenses in 2019. Of the amount paid, $30,000 was for expenses incurred on account in 2018. In addition, Primo incurred $42,000 of expenses in 2019, which will not be paid until 2020.
Required:
a. Compute 2014 cash-basis net income.
b. Compute 2014 accrual-basis net income.
Answer:
a. $33,000.
b. $36,000.
Explanation:
Net income is calculated as sales minus cost of goods sold, selling, general and administrative expenses, operating expenses, depreciation, interest, taxes, and other expenses. It is also called net earnings.
Now, Cash accounting recognizes revenue and expenses only when money changes hands, but accrual accounting recognizes revenue when it's earned, and expenses when they're billed (but not paid).
a. 2014 Cash-basis net income:
Primo Industries collected $105,000 from customers in 2019
Primo Industries also paid $72,000 for expenses in 2019
=105,000-72,000
=$33,000
b. 2014 accrual-basis net income.
=(105,000-25000+40000)-(72000-30000+42000)
=120000-84000
=$36,000
Preparing statement of cash flows LO P2, P3.Use the following information of VPI Co to prepare a statement of cash flows for the year ended December 31 using the indirect method. (Amounts to be deducted should be indicated by a minus sign) Cash best prior year-end $40,000Increase in inventory 5.400 Depreciation expense 4,400 Cash received from using stock 8.600 Cash paid for dividende 1,400Gain on Sale of machinery 2,100 Cash received from sale of inventory 9.700 Increase in account payable 1,700 Net Increase 27.000 Decrease in account payable 3.000 VPI CO. Statement of Cash Flows (Indirect Method) For Current Year Ended December 31 Cash flows from operating activities Adjustments to reconcile net income to net cash provided by operating activities Income statement items not affecting cash Changes in current operating assets and liabilities $ 0 rences Cash flows from investing activities $0 Cash flows from financing activities $0
Answer:
$85,500
Explanation:
VPI CO. Statement of Cash Flows (Indirect Method) For Current Year Ended December 31
Cash flows from operating activities
Net Income $ 27,000
Adjustment to reconcile net income to net cash provided by operating activities:
Income statement items not affecting cash
Depreciation expnese $ 4,400
Gain on sale of machinery $ (2,100)
Changes in current operating assets and liabilities:
Increase in inventory $ (5,400)
Increase in accounts payable $ 1,700
Decrease in accounts receivable $ 3,000
Net cash generated from operating activities $ 28,600(A)
Cash flow from investing activities:
Cash received from sale of Inventory $ 9,700
Net cash generated from investing activities $ 9,700 (B)
Cash flow from financing activities:
Cash received from issuing stock $8,600
Cash paid for dividends $ (1,400)
Net cash generated from financing activities (8,600-1,400) $ 7,200 (C)
Net increase in cash and cash equivalents (A+B+C) $ 45,500
Add: Beginning cash balance $40,000
Ending cash balance $85,500
Developing and evaluating solutions to reduce the gap between desired process performance and current performance is the final step in the six sigma DMAIC approach for process improvement. True False
Answer: False
Explanation:
The six sigma DMAIC approach for process improvement is a way of improving performance in such a way that it makes the company more profitable as well as improving customer relations and satisfaction.
The DMAIC is an acronym that stands for the the steps in the process as seen in the graph attached.
The above statement about Developing and Evaluating Solutions to make a company perform better is not the final step in the process as it falls under the fourth step, which is to Improve.
The final step is Control. Here the main focus is on preserving what has been achieved. It works by monitoring the situation and ensuring that the process improves if a loophole is spotted.
Two firms are planning to sell 10 or 20 units of their goods and face the payoff matrix illustrated to the right. What is the Nash equilibrium if both firms make their decisions simultaneously? What strategy does each firm use? A. The game does not have a Nash equilibrium. B. The Nash equilibria are for Firm 1 to produce 10 and Firm 2 to produce 20 and for Firm 1 to produce 20 and Firm 2 to produce 10. C. The Nash equilibrium is for Firm 1 to produce 20 and Firm 2 to produce 10. D. The Nash equilibrium is for Firm 1 and Firm 2 each to produce 10. E. The Nash equilibrium is for Firm 1 to produce 10 and Firm 2 to produce 20
Answer:
D. The Nash equilibrium is for Firm 1 and Firm 2 each to produce 10.
Explanation:
Firm 2
10 units 20 units
10 units 30 / 50 /
Firm 1 30 35
20 units 40 / 20 /
60 20
(firm 1 /
firm 2)
Firm 1's dominant strategy would be to sell 10 units with an expected payoff outcome = 30 + 50 = 80
Firm 2's dominant strategy would be to sell 10 units with an expected payoff outcome = 30 + 60 = 90
Since both firms have the same dominant strategy (to produce 10 units), there is a Nash Equilibrium where both firms produce 10 units and each one earns 30.
Global Services is considering a promotional campaign that will increase annual credit sales by $570,000. The company will require investments in accounts receivable, inventory, and plant and equipment. The turnover for each is as follows: Accounts receivable 3 times Inventory 6 times Plant and equipment 1 time All $570,000 of the sales will be collectible. However, collection costs will be 3 percent of sales, and production and selling costs will be 70 percent of sales. The cost to carry inventory will be 6 percent of inventory. Depreciation expense on plant and equipment will be 5 percent of plant and equipment. The tax rate is 30 percent. a. Compute the investments in accounts receivable, inventory, and plant and equipment based on the turnover ratios. Add the three together.
Answer:
The investments in accounts receivable, inventory, and plant and equipment based on the turnover ratios would be the following:
Accounts receivable is $190,000
Inventory is $95,000
Plant and equipment is $570,000
The Total would be of $855,000
Explanation:
According to the given data we have the following:
Global Services is considering a promotional campaign that will increase annual credit sales by $570,000.
Therefore, in order to calculate the the investments in accounts receivable, inventory, and plant and equipment based on the turnover ratios we would have to make the following calculations:
Accounts receivable=$570,000/3=$190,000
Inventory=$570,000/6=$95,000
Plant and equipment=570,000/1=$570,000
Therefore, the Total would be of $855,000
You expect to receive a payment of $600 one year from now. Answer the following questions and show your calculations:
A. The discount rate is 6%. What is the present value of the payment to be received?
B. Suppose that the discount rate rises to 7%. What is the present value of the payment to be received?C. What will cause the present value of a future payment to decline?
Answer:
Instructions are below.
Explanation:
Giving the following information:
You expect to receive a payment of $600 one year from now.
A) Discount rate= 6%
We need to use the following formula:
PV= FV/(1+i)^n
PV= 600 / (1.06)= $566.04
B) Discount rate= 7%
PV= 600 / (1.07)= $560.75
C) The future value of a certain cash flow declines when the interest rate (discount rate) increases or "n" (time) increases.
Option A to buy new has a monthly payment of 338 dollars for 60 months, up-front cost of 2,500 dollars, and 275 dollars a month for insurance and gas. Option B to lease new has a monthly payment of 229 dollars for 36 months, up-front cost of 3,925 dollars, and 275 dollars a month for insurance and gas. Option C to buy used has a monthly payment of 250 dollars for 36 months, up-front cost of 2,000 dollars, and 225 dollars per month for insurance and gas. Based on your budget, which transportation option is the best financial decision for you? Explain your answer in at least two sentences.
Answer: Option C is the best financial decision.
Explanation:
Given Data:
Option C
Monthly payment = $250 For 36 months
Upfront = $2,000 ( down payment ).
Insurance and gas = $225/month.
Option C, is a more economical Transportation option because it’s total cost is lesser which is $11,225 compared to option A which is $23,055 and option B $12,444
Answer:
on edge
Explanation:
Option C is probably the best choice for my budget. The other options will require too high of an up-front cost and high monthly payments. They also include restrictions.
To live comfortably in retirement, you decide you will need to save $2 million by the time you are 65 (you are 30 years old today). You will start a new retirement savings account today and contribute the same amount of money on every birthday up to and including your 65th birthday. Using TVM principles, how much must you set aside each year to make sure that you hit your target goal if the interest rate is 5%? What flaws might exist in your calculations, and what variables could lead to different outcomes? What actions could you take ensure you reach your target goal?
Answer: Please refer to Explanation
Explanation:
1) You want to have $2 million when you are 65 which is 35 years from now. The interest rate is 5% and you need to know how much to deposit per year to get to that level. The $2 million is therefore the future value of your contributions which makes this an Annuity.
To calculate for the Annuity amount use the following formula,
FV of Annuity = Annuity ( ( (1 + i)^ n -1 )/ i )
2,000,000 = A ( ( ( 1 + 5%) ^ 35 -1 ) / 5%)
2,000,000 = A ( (1.05^35 -1 )/5%)
2,000,000 = A (90.3203074)
A = 2,000,000/90.3203074
A = $22,143
You should set aside $22,143 every year.
2) The major flaw in the calculation is the assumption that the interest rates will remain the same over the 35 years. This is almost impossible and will affect the amount that would need to be deposited every year to achieve the target. If the interest rate should increase then it will increase the amount that you are to get meaning you can get more than $2 million then you would not have to deposit as much to get to $2 million. If it decreases however, you will have to deposit more to get to the required $2 million because the amount earned in interest will not enable you to get to $2 million in that timeframe. .
To live in conformably you need to retire and decide that you need to pay about 2 million dollars to save and by the time of 65 need to start a retirement plan, the TVM concept the target goals has a interest rate of 5%.
For which we need to calculate the
FV of Annuity = Annuity ( ( (1 + i)^ n -1 )/ i )2,000,000 = A ( ( ( 1 + 5%) ^ 35 -1 ) / 5%)2,000,000 = A ( (1.05^35 -1 )/5%)2,000,000 = A (90.3203074)A = 2,000,000/90.3203074Hence A = $22,143.Learn more about the to live.
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Algoma, Inc., signs a five-year lease for office equipment with Office Solutions. The present value of the lease payments is $15,499. Prepare the journal entry that Algoma records at the inception of this finance lease.
Answer:
Dr. Lease asset office equipment $15,499
Cr. Lease Liability $15,499
Explanation:
A capital lease is a lease between two parties in which a party transfer leases asset to in exchange of lease payments.
To make a lease finance lease following criteria must be fulfilled.
The asset will be transferred to lessee at the end of lease periodAgreement must contain bargain purchase optionLease period must be 75% or more of useful life of assetValue of lease must be equal or more than the market value of assetThe current sections of Sandhill Co.'s balance sheets at December 31, 2021 and 2022, are presented here. Sandhill Co's net income for 2022 was $137,700. Depreciation expense was $24,300. 2022 2021 Current assets $89,100 Cash $94,500 Accounts receivable 72,000 80,100 151,200 Inventory 154,800 Prepaid expenses 24,300 19.800 $342000 $343,800 Total current assets Current liabilities Accrued expenses payable $13,500 $4,500 Accounts payable 76,500 82800 $90,000 Total current liabilities $87.300
Prepare the net cash provided (used) by operating activities section of the company's statement of cash flows for the year ended December 31, 2022, using the indirect method.
Answer and Explanation:
The prepartion of the net cash provided or used by operating activities section of the cash flow statement is presented below:
Cash flows from operating activities
Net income $137,700
Adjustments made
Depreciation expense $24,300
Add: Decrease in Accounts receivable $8,100 ($72,000 - $80,100)
Add: Decrease in inventory $3,600 ($151,200 - $154,800)
Less: Increase in Prepaid expenses -$4,500 ($24,300 - $19,800)
Add: Increase in accrued expenses payable $9,000 ($13,500 - $4,500)
Less: Decrease in accounts payable -$6,300 ($76,500 - $82,800)
Total of adjustments $34,200
Net cash provided by operating activities $171,900
The negative sign represents cash outflow and positive sign represents cash inflow
Required information
Use the following information for Quick Studies below.
[The following information applies to the questions displayed below.]
The following is the adjusted trial balance of Sierra Company.
Account Title Debit Credit
Cash $ 35,000
Prepaid insurance 2,000
Notes receivable (due in 5 years) 7,000
Buildings 95,000
Accumulated depreciation–Buildings $ 27,000
Accounts payable 10,000
Notes payable (due in 3 years) 10,500
H. Sierra, Capital 33,000
H. Sierra, Withdrawals 8,500
Consulting revenue 84,500
Wages expense 5,000
Depreciation expense–Buildings 9,500
Insurance expense 3,000
Totals $ 165,000 $ 165,000
Question Requirement:
Use the information adjusted trial balance to prepare Sierra Company's classified balance sheet as of December 31. SIERRA COMPANY Balance Sheet December 31:
Answer:
SIERRA COMPANY Balance Sheet December 31:
Current Assets:
Cash $35,000
Prepaid insurance 2,000 $37,000
Long-Term Assets:
Notes receivable (due in 5 years) 7,000
Buildings 95,000
Accumulated depreciation 27,000 68,000 $75,000
Total Assets $112,000
Current Liabilities:
Accounts payable 10,000
Long-term Liabilities:
Notes payable (due in 3 years) 10,500 $20,500
H. Sierra, Capital $33,000
H. Sierra, Withdrawals 8,500 24,500
Retained Earnings 67,000 $91,500
Total Liabilities + Equity $112,000
Explanation:
a) Sierra Company's Income Statement:
Consulting revenue $84,500
Wages expense -5,000
Depreciation expense–Buildings -9,500
Insurance expense -3,000
Net Income $67,000
b) Here, the Net Income is equal to the Retained Earnings, which is carried forward.
c) To prepare a balance sheet, which contains permanent accounts, the temporary accounts or periodic accounts must be eliminated in the Income Statement summary. The resulting figure is then carried forward to the balance sheet. Permanent accounts are the accounts that are carried forward to the next accounting period. They are stated in the balance sheet according to their various assets, liabilities, and equity classifications.
Based on the given data, the net income will be $67,000
Current Assets:
Cash $35,000
Prepaid insurance 2,000 $37,000
Long-Term Assets:
Notes receivable (due in 5 years) 7,000
Buildings 95,000
Accumulated depreciation 27,000 68,000 $75,000
Total Assets $112,000
Current Liabilities:
Accounts payable 10,000
Long-term Liabilities:
Notes payable (due in 3 years) 10,500 $20,500
H. Sierra, Capital $33,000
H. Sierra, Withdrawals 8,500 24,500
Retained Earnings 67,000 $91,500
Total Liabilities + Equity $112,000
a) Income Statement of Sierra Companies-
Consulting revenue $84,500
Wages expense -5,000
Depreciation expense–Buildings -9,500
Insurance expense -3,000
Net Income $67,000
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if data links connecting different parts of the united states were to fail, gdp would fall. if, on the other hand, the network of state-of-the-art, high-speed connections were doubled in size, what would happen
Answer:
(1). Increament in GDP.
(2). Decrease In marginal product.
(3). POSITIVE marginal Product (MP).
Explanation:
"If data links connecting different parts of the united states were to fail, gdp would fall. if, on the other hand, the network of state-of-the-art, high-speed connections were doubled in size" what will happen are given below;
=> There will be an increase in the Gross Domestic Product (GDP).
=> There will be a reduction In the value of the marginal Product (MP). The marginal Product (MP) will reduce as far more than the original network.
=> The marginal Product (MP) will be POSITIVE.
On January 2, Todd Company acquired 40% of the outstanding stock of McGuire Company for $205,000. For the year ending December 31, McGuire earned income of $48,000 and paid dividends of $14,000. Required: Prepare the entries for Todd Company for the purchase of the stock, share of McGuire income, and dividends received from McGuire.
Answer:
The entries for Todd Company for the purchase of the stock, share of McGuire income, and dividends received from McGuire would be as follows:
debit credit
jan 2
Investment in equity $205,000
cash $205,000
[Investment made]
dec3 1
Investment in equity $19,200
share in net income of affilates $19,200
[share in net income recorded]
dec 31
cash $5,600
dividend income $5,600
[dividend received]
Explanation:
The entries for Todd Company for the purchase of the stock, share of McGuire income, and dividends received from McGuire would be as follows:
debit credit
jan 2
Investment in equity $205,000
cash $205,000
[Investment made]
dec3 1
Investment in equity $19,200
share in net income of affilates $19,200
[share in net income recorded]
share in net income of affilates=$48,000*0.40=$19,200
dec 31
cash $5,600
dividend income $5,600
[dividend received
dividend income=14000*0.40=$5,600
An investment is expected to generate annual cash flows forever. The first annual cash flow is expected in 1 year and all subsequent annual cash flows are expected to grow at a constant rate annually. We know that the cash flow expected in 4 years from today is expected to be $7500 and the cash flow expected in 5 years from today is expected to be $9000. What is the cash flow expected to be in 2 years from today?
Answer:
$5,208
Explanation:
First we need to calculate the growth rate using following formula
Growth Rate = (Final Value - Initial Value) / Initial Value
Placing Values in the formula = ($9,000 - $7,500) / $7,500 = $1,500 / $7,500 = 0.2 = 20%
As the cash flow in growing on constant rate of 20%. We need to calculate the prior years cash flow using following formula.
Cash Flow after growth = Current Cash flow ( 1 + growth rate)
Year 3 cash flow
$7,500 = Cash Flow of Year 3 ( 1 + 20% )
Cash Flow of Year 3 = $7,500 / 120%
Cash Flow of Year 3 = $6,250
Year 2 cash flow
$6,250 = Cash Flow of Year 2 ( 1 + 20% )
Cash Flow of Year 3 = $6,250 / 120%
Cash Flow of Year 3 = $5,208
Suppose that, in a competitive market without government regulations, the equilibrium price of rental cars is $58 per day.Complete the following table by indicating whether each of the statements is an example of a price ceiling or a price floor and whether it is binding or nonbinding.Statement Price Control and Binding or NotThe government prohibits car-rental companies from renting out rental cars for more than $87 per day. Price Control (Price Ceiling Or Price Floor)?_______ Binding or Not Binding?_______Due to new regulations, car-rental companies that would like to pay better wages in order to hire more workers are prohibited from doing so. Price Control (Price Ceiling Or Price Floor)?_______ Binding or Not Binding?_______The government has instituted a legal minimum price of $87 per day for rental cars. Price Control (Price Ceiling Or Price Floor)?_________ Binding or Not Binding?_______
Answer:
1. Price ceiling non binding
2. Price ceiling, binding
3. Price floor binding
Explanation:
A price ceiling is when the government or an agency of the government sets the maximum price for a good or service.
Price ceiling is binding if it is set below equilibrium price.
A price floor is when the government or an agency of the government sets the minimum price for a good or service.
Price floor is binding when it is set above minimum price.
If equilibrium price is $58 and the maximum price set by the government is $87. This is a price ceiling but it is not binding because it is above equilibrium price.
If the minimum price is $87. It is an example of A price floor and it is binding because it is set above equilibrium price.
If car rentals want to pay their workers more but can't do it because of new regulations, I it means it's a price ceiling and it is binding.
I hope my answer helps you
Since 2005, publicly traded companies in the European Union have been required to use IFRS in preparing their consolidated financial statements. What is the EU's objective in requiring the use of IFRS
Answer:
Comparability of Financial Statements in different jurisdictions
Explanation:
The reason is that if the IFRC is successful in achieving this then it will help the investor to make more informed decisions and gain maximum out of the investment and all this is only possible by enhanced comparability of the financial statements in different jurisdictions.
According to supply-side fiscal policy, increasing tax rates on wages and profits will: Group of answer choices result in higher unemployment and inflation. reduce both unemployment and the price level. lower the price level but raise unemployment. increase the real output as well as the price level.
Answer:
The correct answer is the third option: lower the price level but raise unemployment.
Explanation:
To begin with, supply-side fiscal policies are the ones that tend to benefit the supply that an economy puts with the purpose of increasing it believing that the raise of it will cause an increase in the level of production of the economy. Secondly, if tax rates on wages and profits increase then the firms will have less income in order to hire more workers to produce more and therefore that the level of unemployment will increase. And if the unemployment increases then the price level will decrease due to the fact that the firms will not have many workers to pay and therefore they will lower the prices in order to sell more because of its low costs regarding wages
Purchase-Related Transactions Using Perpetual Inventory System The following selected transactions were completed by Niles Co. during March of the current year:
Mar. 1. Purchased merchandise from Haas Co., $13,900, terms FOB shipping point, 2/10, n/eom. Prepaid freight of $550 was added to the invoice.
5. Purchased merchandise from Whitman Co., $10,650, terms FOB destination, n/30.
10. Paid Haas Co. for invoice of March 1.
13. Purchased merchandise from Jost Co., $7,100, terms FOB destination, 1/10, n/30.
14. Issued debit memo to Jost Co. for $1,300 of merchandise returned from purchase on March 13.
18. Purchased merchandise from Fairhurst Company, $9,600, terms FOB shipping point, n/eom.
18. Paid freight of $310 on March 18 purchase from Fairhurst Company.
19. Purchased merchandise from Bickle Co., $13,800, terms FOB destination, 2/10, n/30.
23. Paid Jost Co. for invoice of March 13, less debit memo of March 14.
29. Paid Bickle Co. for invoice of March 19.
31. Paid Fairhurst Company for invoice of March 18.
31. Paid Whitman Co. for invoice of March 5.
Required: Journalize the entries to record the transactions of Britt Co. for March. Mar. 1 Mar. 5 Mar. 10 Mar. 13 Mar. 14 Mar. 18-purchase Mar. 18-freight Mar. 19 Mar. 23 Mar. 29 Mar. 31-Fairhurst Mar. 31-Whitman
Answer:
Mar. 1
Merchandise $13,900 (debit)
Freight Charges Prepaid $550 (debit)
Accounts Payable : Haas Co. $13,900 (credit)
Cash $550 (credit)
Mar. 5
Merchandise $10,650 (debit)
Accounts Payable : Whitman Co. $10,650 (credit)
Mar. 10
Accounts Payable : Haas Co. $13,622 (debit)
Cash $13,622 (credit)
Mar. 13
Merchandise $7,100 (debit)
Accounts Payable : Jost Co. $7,100 (credit)
Mar. 14
Accounts Payable : Jost Co. $1,300 (debit)
Merchandise $1,300 (credit)
Mar. 18-purchase
Merchandise $9,600 (debit)
Accounts Payable : Fairhurst Company $9,600 (credit)
Mar. 18-freight
Freight Charges $310 (debit)
Cash $310 (credit)
Mar. 19
Merchandise $13,800(debit)
Accounts Payable : Bickle Co. $13,800 (credit)
Mar. 23
Accounts Payable : Jost Co. $5,742 (debit)
Cash $5,742 (credit)
Mar. 29
Accounts Payable : Bickle Co. $13,524 (debit)
Cash $13,524 (credit)
Mar. 31-Fairhurst
Accounts Payable : Fairhurst. $9,600 (debit)
Cash $9,600 (credit)
Mar. 31-Whitman
Accounts Payable : Whitman $10,650 (debit)
Cash $10,650 (credit)
Explanation:
When Merchandise is purchased on Account,
Recognize the Merchandise Account (debit) and recognize the Accounts Payable Account (credit).
When Merchandise is finally paid for.
First determine if payment fall within discount period.
Also determine if there were previous returns to supplier.
Then de-recognize the Accounts Payable Account and recognize the Cash Payment to the extend of amount paid.