Answer:
Net loss per share is -$4.80
Explanation:
The net loss per share is the total loss in the year divided by the weighted average number of common stock in the year.
Total net loss=net loss-preferred stock dividend
preferred stock dividend=$100*6,000*9.5%=$ 57,000.00
total net loss=-$1,743,000-$57,000=-$1,800,000
weighted average number of common stock=368,000*5/12+(368,000+12,000)*7/12=375,000 shares
net loss per share=-$1,800,000/375,000=-$4.80
A local family-run Greek restaurant has been a part of the community for twenty years. Their mission is to provide local, fresh, healthy, nutritious, and great-tasting food at reasonable prices in a clean, friendly, convenient environment. Their son studied business in college. When he returned to run the restaurant, he wanted to make the business more community-minded and environmentally responsible. What are some additions that could be implemented which are aligned with this company’s values?
The correct answer to this open question is the following.
Although there are not options provided, we can say that some additions that could be implemented which are aligned with this company’s values are the inclusion on the menu of organic food, vegan food, and kosher products so all kinds of customers can find a good option in the restaurant.
Another important thing is the way to market and communicate their innovations to consumers. In college, the son should have learned that the way a restaurant markets its products and services is as important as the kinds of food it offers.
Financial Statements of a Manufacturing Firm
The following events took place for Sorensen Manufacturing Company during January, the first month of its operations as a producer of digital video monitors:
Purchased $48,800 of materials.
Used $37,600 of direct materials in production.
Incurred $56,100 of direct labor wages.
Incurred $79,100 of factory overhead.
Transferred $131,300 of work in process to finished goods.
Sold goods for $234,700.
Sold goods with a cost of $104,400.
Incurred $60,000 of selling expense.
Incurred $26,400 of administrative expense.
Using the information given, complete the following: a. Prepare the January income statement for Sorensen Manufacturing Company.
A. Prepare the January income statement for Sorensen Manufacturing Company.
B. Determine the inventory balances at the end of the first month of operations.
Answer:
A. income statement for Sorensen Manufacturing Company.
Sales $234,700
Less Cost of Sales
Opening Finished Goods Inventory 0
Cost of Manufacture $131,300
Less Finished Goods Inventory (131,300 - 104,400) ($26,900) ($104,400)
Gross Profit $130,300
Less Expenses
Selling Expense ($60,000)
Administrative Expense ($26,400)
Net Income / (loss) $43,900
B. inventory balances at the end of the first month
Work In Process Inventory = $41,500
Raw Materials Inventory = $11,200
Finished Goods Inventory = $26,900
Explanation:
Calculation of Work in Process Inventory
Direct Materials $37,600
Direct Labor $56,100
Factory Overhead $79,100
Total Cost of Manufacture $172,800
Less Closing Work in Process ($41,500)
Cost of Manufacture $131,300
Calculation of Raw Materials Inventory
Opening Raw Materials Inventory $0
Add Purchases $48,800
Less Raw Materials Unsed In Manufacturing ($37,600)
Closing Raw Materials Inventory $11,200
Calculation of Finished Goods Inventory
Opening Stock of Finished Goods $0
Add Costs of Goods Manufactured $131,300
Less Cost of Goods Sold ($104,400)
Opening Stock of Finished Goods $26,900
The materials price and efficiency variances could be an indication that the company purchased less expensive ingredients of higher ​quality, which resulted in more than the standard number of rejected units. The labor price variance suggests that more experienced workers may have worked​ more, resulting in a faster work pace and a higher than normal amount of rejects or waste.
a. True
b. False
Answer:
The answer to the question is False.
Explanation:
Materials Price and Efficiency Variance measures cost of materials purchased against the amount budgeted for it. When materials which are higher in quality are purchased at a lower price, the Materials Price Variance is said to be favorable. This means that it should lead to a lower number of rejected units given that one purchased materials of higher quality.
Labor price variance is favourable if the actual cost of labor to the organisation fall below the budgeted amount.
The measure of expected output from a certain input of materials is referred to as material yield variance. Material yield variance is directly related to labour efficience variance.
A favorable labor price/material yield variance should result in faster work pace and lower of waste or rejects.
Therefore the above assertions are false.
Cheers!
The overarching purpose of credit risk analysis is to: Question 11 options: a) Identify credit opportunities b) Determine a company’s optimal capital structure c) Provide information to banks about credit losses d) Quantify potential credit losses
Answer:
d) Quantify potential credit losses
Explanation:
Credit risk is the possibility of a loss happening because of a borrower's failure to payback a loan or meet up with contractual obligations. The overaching purpose of credit risk analysis is the quantification of the level of credit risk that the borrower poses to the lender. The purpose of credit analysis is to determine if borrowers are credit worthy by quantifying the risk of loss that the lender may experience.
Therefore option D is the answer.
On June 1, Year 1 Oxian Corp. receives $24,000 from a customer for work to be performed evenly over the next 2 years. What is the amount of revenue that Oxian should recognize on the income statement for Year 1
Answer:
$7,000 is the amount of revenue in year 1
Explanation:
The amount received from the customer is $24,000,which is payment for work to be performed over 24-month period i.e 2 years
In year 1,the work would be performed from June -December,hence 7-month worth of revenue should be recognized in year 1 as follows
revenue recognition in year=$24,000*7/24=$7,000
The amount of revenue attributable to year 1 on the income statement is $7,000
Distinguish between the direct and indirect strategies. when is each appropriate.
Answer: Depends on Content and Audience.
Explanation:
Deciding which strategy to use depends on the content of the work to be presented or the audience being presented to.
If the content is positive or if the audience are Positive or neutral about the work to be presented, the Direct Strategy is preferable. This refers to stating the conclusion or main idea at the beginning of the presentation and then working to explain it.
However, if you deduce that the audience are not positive to the content or that the content is not exactly good news or positive, it would be best to use the Indirect approach. With this approach you start with the evidence and other information then state the conclusion or main idea towards the end. This gives you the opportunity to win the audience over or at least explain why the content is negative before they reach the conclusion.
Assume that a $1,000,000 par value, semiannual coupon US Treasury note with three years to maturity has a coupon rate of 3%. The yield to maturity (YTM) of the bond is 7.70%. Using this information and ignoring the other costs involved, calculate the value of the Treasury note:
Answer:
Value of treasury Note =$876,205.93
Explanation:
The value of the notes is the present value of future cash flow discounted at its YTM of 7.70%.
The value of the Note is the present value of the future cash receipts expected from the it. The value is equal to present values of interest payment and the redemption value (RV).
Value of Notes = PV of interest + PV of RV
The value of Note can be worked out as follows:
Step 1
Calculate the PV of Interest payment
Present value of the interest payment
PV = Interest payment × (1- (1+r)^(-n))/r
r-Yield to Maturity, n- number of years
Interest payment = 3% × $1,000,000 × 1/2= $15000 .
Semi-annual interest yield = 7.7%/2 =3.85
PV = 15,000 × (1 - (1.0385)^(-3×2)/0.0385) = 79,017.4892
Step 2
PV of redemption Value
PV of RV = RV × (1+r)^(-n)
= 1000,000 × (1.0385)^(-3×2)
= 797188.4444
Step 3
Calculate Value of the Notes
=79,017.4892 + 797,188.44
= $876,205.93
Value of treasury Note =$876,205.93
Novak Express reports the following costs and expenses in June 2017 for its delivery service. Indirect materials $7,000 Drivers’ salaries $16,900 Depreciation on delivery equipment 12,000 Advertising 5,100 Dispatcher’s salary 5,400 Delivery equipment repairs 450 Property taxes on office building 930 Office supplies 660 CEO’s salary 12,500 Office utilities 1,050 Gas and oil for delivery trucks 2,900 Repairs on office equipment 270 Determine the total amount of (a) delivery service (product) costs and (b) period costs. (a) Delivery service (product) costs $ (b) Period costs $
Answer and Explanation:
The computation is shown below:
a. For delivery service product cost
Indirect materials $7,000
Depreciation on delivery equipment $12,000
Dispatcher's salary $5,400
Gas and oil for delivery trucks $2,900
Drivers' salaries $16,900
Delivery equipment repairs $450
Total $44,650
The product cost includes direct material, direct labor and factory overhead cost which are used to make the product
b) Period costs:
Property taxes on office building $930
CEO's salary $12,500
Advertising $5,100
Office utilities $11,050
Repairs on office equipment $270
Total $29,850
The period cost includes majorly part of the selling and admin expense and it also recorded those expenses which are incurred according to the passage of time
current assets and current liabilities were $100 million and $40 million, respectively. The prior year, 2018, Jones and Co. reported current assets and current liabilities of $80 million and $30 million, respectively. What is Jones and Co.'s Working Capital for 2019
Answer:
$60 million
Explanation:
Working capital is the amount of resources at the disposal of a firm in order to run its day-to-day activities.
Working capital is determined by deducting total current liabilities from total current assets
Jones and Co.'s working capital for the year 2019 is the difference between the current assets for 2019 and the current liabilities for the same year
current assets is $100 million
current liabilities is $40 million
working capital=$100 million-$40 million=$60 million
26. Teller Co. is planning to sell 900 boxes of ceramic tile, with production estimated at 870 boxes during May. Each box of tile requires 44 pounds of clay mix and a quarter hour of direct labor. Clay mix costs $0.40 per pound and employees of the company are paid $12.00 per hour. Manufacturing overhead is applied at a rate of 110% of direct labor costs. Teller has 3,900 pounds of clay mix in beginning inventory and wants to have 4,500 pounds in ending inventory.What is the total amount to be budgeted in pounds for direct materials to be purchased for the month?
Answer:
The answer is 38,880
Explanation:
Solution
We recall that:
Tell cooperation plans to sell boxes = 900
The estimated production during May = 870 boxes
The Cost of f clay mix = $0.40 per pound
Each of the boxes requires = 44 pounds of clay mix
The company employees are paid per hour = $12.00
The manufacturing overhead = 110%
The beginning inventory, the teller has = 3900 pounds of clay mix
The ending inventory = 4,500
Now,
The total amount budgeted for the direct materials to be purchased for the month is stated as follows:
The materials budgeted to be purchased is = The budgeted production of materials * the number of raw materials ) plus the ending - beginning inventory.
Thus
(870 * 44) + 4500- 3900
=38,880
Orchard Fresh, Inc., purchases apples from local orchards and sorts them into four categories. Grade A are large blemish-free apples that can be sold to gourmet fruit sellers. Grade B apples are smaller and may be slightly out of proportion. These are packed in boxes and sold to grocery stores. Apples for slices are even smaller than Grade B apples and have blemishes. Apples for applesauce are of lower grade than apples for slices, yet still suitable for canning. Information on a recent purchase of 21,000 pounds of apples is as follows: Grades Pounds Grade A 1,890 Grade B 5,250 Slices 8,400 Applesauce 5,460 Total 21,000 Total joint cost is $17,850. Required: 1. Allocate the joint cost to the four grades of apples using the physical units method. Joint Cost Grades Allocation Grade A $ Grade B Slices Applesauce Total $ 2. Allocate the joint cost to the four grades of apples by finding the average joint cost per pound and multiplying it by the number of pounds in the grade. Round the average cost answer to the nearest cent. Average cost
Answer and Explanation:
According to the scenario, computation of the given data are as follow:-
1. Allocate the joint cost by using the physical unit method
Particular Allocation of physical unit Allocated joint cost ($)
Grade A $17,850 × 1,890 ÷ 21,000 1606.5
Grade B $17,850 × 5,250 ÷ 21,000 4462.5
Slices $17,850 × 8,400 ÷ 21,000 7,140
Applesauce $17,850 × 5,460 ÷ 21,000 4,641
Total 17,850
Allocated Joint Cost = Total Joint Cost × Pounds Grades ÷ Total Pounds Grades
2. Allocate the joint cost by using multiplying method:-
Average Joint Cost Per Pound is
= Total Joint Cost ÷ Total Pounds Grades
= $17,850 ÷ 21,000
= 0.85
Allocated joint cost = Average Joint Cost Per Pound × Pounds Grades
Particular Allocation of average cost Allocated joint cost
Grade A 0.85 × 1,890 1606.5
Grade B 0.85 × 5,250 4462.5
Slices 0.85 × 8,400 7,140
Applesauce 0.85 × 5,460 4,641
Total 17,850
Sandhill Company purchases an oil tanker depot on January 1, 2020, at a cost of $639,700. Sandhill expects to operate the depot for 10 years, at which time it is legally required to dismantle the depot and remove the underground storage tanks. It is estimated that it will cost $69,980 to dismantle the depot and remove the tanks at the end of the depot’s useful life.
Prepare the journal entries to record the depot (considered a plant asset) and the asset retirement obligation for the depot on January 1, 2017. Based on an effective-interest rate of 6%, the present value of the asset retirement obligation on January 1, 2017, is $40,070.
Answer:
Dr Depot $639,700
Cr Cash $639,700
Dr Depot $40,070
Cr Asset retirement obligation $40,070
Explanation:
Sandhill Company Journal entries
Dr Depot $639,700
Cr Cash $639,700
Dr Depot $40,070
Cr Asset retirement obligation $40,070
Jill resigns from her job, at which she was earning $50,000 per yer, and uses her $100,000 savings on which she was earning 5 percent interest, to start a business. In the first year she earns revenue of $150,000 and her costs are as follows; Rent 25,000, Utilities 12,000, wages 30,000, materials 20,000 calculate Jill's accounting profit
Answer:
$63,000
Explanation:
Accounting profit is total revenue less total explicit cost
Total cost = 25,000 + 12,000 + 30,000 + 20,000 = 87,000
Revenue = $150,000
Accounting profit = = $150,000 - 87,000 = $63,000
I hope my answer helps you
Professor Stern's colleague, Dr. Schmertz, gives one midterm exam and a final exam. He weights the final twice as heavily as the midterm to determine the course grade. No grades can be dropped. If the midterm score is represented on the horizontal axis and the final score on the vertical axis, and if a student in Dr. Schmertz's class cares only about her course grade, her indifference curve is:______
(a) a line with slope -2.
(b) a line with slope -1.
(c) a line with slope - 0:5.
(d) L-shaped with the kink at (x, 2x).
(e) L-shaped with the kink at (2x, x).
Answer: c) a line with slope - 0:5.
Explanation:
The final exam weights twice as much as the midterm.
Denote that by assuming that the final exam is Y and the midterms is X.
This would mean that the Course grade is,
= 2y + x
Since the Course grade is all the student cares about then that means that her Utility is the same.
U = 2y + x
If we were to draw an indifference curve based on a utility level of hers say for instance c, we would denote it as,
c = 2y + x
The equation of a line takes the form,
y = mx + c with m being the slope.
Denoting the indifference curve in this manner would therefore be,
c = 2y + x
c/2 = y + x/2
c/2 - x/2 = y
y = -x/2 + c/2
y = -½x + c/2
The slope will therefore be -½.
Hi-Test Company uses the weighted-average method of process costing to assign production costs to its products. Information for September follows. Assume that all materials are added at the beginning of its production process, and that conversion costs are added uniformly throughout the process.
Work in process inventory, September 1 (2,000 units, 100% complete with respect to
direct materials, 80% complete with respect to direct labor and overhead; includes
$45,000 of direct material cost, $25,600 in direct labor
cost, $30,720 overhead cost) $101,320
Units started in April 28,000
Units completed and transferred to
finished goods inventory 23,000
Work in process inventory, September 30 (units, 100% complete with respect to direct materials, 40% complete with respect to direct labor and overhead) ?
Costs incurred in September
Direct materials $375,000
Conversion $341,000
Required:
Compute each of the following, assuming Hi-Test uses the weighted-average method of process costing.
1. The number of physical units that were transferred out and the number that are in ending work in process inventory.
2. The number of equivalent units for materials and conversion for the month.
Equivalent Units of Production (EUP)
Units % Material EUP-Materials % Conversion EUP-Conversion
Equivalent units of production
3. The cost per equivalent unit of materials and conversion for the month.
Cost per Equivalent Unit of Production Direct Materials Conversion
Total costs
÷ Equivalent units of production
Cost per equivalent unit of production
4. The total cost of goods transferred out.
Costs Transferred Out EUP Cost per EUP Total cost
Direct materials
Conversion
Total transferred out
7. The total cost of ending work in process inventory.
Costs of Ending Work in Process EUP Cost per EUP Total cost
Direct materials
Conversion
Total cost of ending work in process
Answer and Explanation:
The computation of given question is shown below:-
Hi-Test Company
Weighted-average method
Equivalent units
Particulars Physical units Material Conversion costs
Units to be accounted for
Beginning work-in-progress 2,000
Production started 28,000
Total units 30,000
Units accounted for:
1. Completed and transferred
out 23,000 23,000 23,000
(23,000 × 100%)
Ending work-in-progress 7,000 7,000 2,800
(7,000 × 100%) (7,000 × 40%)
2. Total units 30,000 30,000 25,800
Materials Conversion costs Total costs
Costs to account for:
Beginning work in
progress $45,000 $56,320 $101,320
($25,600 + $30,720)
Costs added during
period $375,000 $341,000 $716,000
Total costs $420,000 $397,320 $817,320
÷
Total equivalent unit
of production $30,000 $25,800
3. Cost per equivalent unit $14.00 $15.40
Cost accounted for
4. Completed and transferred
out $322,000 $354,200 $676,200
(23,000 × $14.00) (2,800 × $15.40)
7. Ending work in progress $98,000 $43,120 $141,120
(30,000 × $14.00) (25,800 × $15.40)
Total cost $420,000 $397,320 $817,320
Selected transactions for the Brook Wang Company are presented in journal form below.Date Account Titles and Explanation Ref. Debit CreditMay 5 Accounts Receivable 4,300 Service Revenue 4,300(Billed for services performed) 12 Cash 1,900 Accounts Receivable 1,900(Received cash in payment of account) 15 Cash 3,900 Service Revenue 3,900(Received cash for services performed) Post the transactions to T-accounts and determine each account's ending balance. (Post entries in the order presented in the problem statement.)
Answer:
Cash
Debit Credit
May 12 $1,900
May 15 $3,900
$5,800
Accounts receivable
Debit Credit
May 5 $4,300
May 12 $1,900
$2,400
Service revenue
Debit Credit
May 5 $4,300
May 15 $3,900
$8,200
Explanation:
May 5
Accounts Receivable 4,300
Service Revenue 4,300(Billed for services performed)
May 12
Cash 1,900
Accounts Receivable 1,900(Received cash in payment of account)
May 15
Cash 3,900
Service Revenue 3,900(Received cash for services performed)
North Company has completed all of its operating budgets. The sales budget for the year shows 50,180 units and total sales of $2,273,600. The total unit cost of making one unit of sales is $23. Selling and administrative expenses are expected to be $301,900. Interest is estimated to be $10,240. Income taxes are estimated to be $214,000. Prepare a budgeted multiple-step income statement for the year ending December 31, 2020.
Answer:
income statement for the year ending December 31, 2020
Sales Revenue $2,273,600
Less Cost of Sales ( 50,180 units × $23) ($1,154,140)
Gross Profit $1,119,460
Less Operating Expenses :
Selling and administrative ($301,900)
Operating Income $817,560
Less Non - Operating Expenses :
Finance Cost - Interest ($10,240)
Income tax Expense ($214,000)
Net Income / (Loss) $593,320
Explanation:
A multi-step Income statement presents separately Income derived from Primary Activities of the entity known as Operating Income. When other Secondary Activities are added, the result gives us the Net Income for the period.
First Choice Carpets is considering purchasing new weaving equipment costing $ 734 comma 000. The company's management has estimated that the equipment will generate cash inflows as follows: Year 1 $ 214 comma 000 2 214 comma 000 3 254 comma 000 4 254 comma 000 5 154 comma 000 Considering the residual value is zero, calculate the payback period. (Round your answer to two decimal places.)
Answer: 3.20 years
Explanation:
The Payback Period is a financial evaluation technique for the viability of projects by checking how long it will take for a project to pay back it's Initial cost of capital.
The above weaving machine cost $734,000 and will generate cash for 5 years.
In the first 3 years it will generate,
= 214,000 + 214,000 + 254,000
= $682,000
You can tell that the Machine will have paid off by the fourth year judging by how much is left to payback.
However, the exact period is needed. You can get that by dividing the amount remaining by the Cashflow for the year in which it is to be completed. This way you can see the proportion of time it will take for the current year to reach the desired sum.
The Cashflow for Year 4 is $254,000.
= (Initial investment - Amount from Year before Payback Year) / Cashflow in Payback Year
= (734,000 - 682,000) / 254,000
= 52,000/ 254,000
= 0.20
It will take 0.20 of Year 4 to payback the amount fully.
That means that the total Payback Period is,
= 3 years + 0.20
= 3.2 years
A bankrupt who owns a house has the option of either paying the mortgage or losing his home. The court cannot reduce the amount owed; its choice is to discharge the entire debt or leave it whole. Congress considered a bill that would permit a bankruptcy judge to adjust the terms of mortgages to aid debtors in holding onto their houses. Proponents argued that this change in the law would reduce foreclosures and stabilize the national housing market. Opponents said that it was not fair to reward homeowners for being irresponsible. How would you have voted on this bill?
Answer: I will vote in favor of the bill.
Explanation:
Based on the above scenario, I would vote in favor of the bill. The argument here is in the case of bankruptcy, if an individual is willing to pay their dues but because of unavoidable financial circumstances, the individual seeks more time or other assistance which can help so that the person will later pay. I believe it's a good idea which should be supported by the law.
The court should have the right to decide terms of mortgages to help debtors in order for them to pay their debts in future rather than forcing them to leave the house. It will also help the country deal with issue of facilitating housing to maximum number of individuals.
In my opinion, the judge's decision should be given prime importance as the judge must evaluate the intention of the debtor and the capability of the debtor to pay the debts
Sodium Inc. borrowed $175,000 on April 1. The note requires interest at 12% and principal to be paid in one year. How much interest is recognized for the period from April 1 to December 31?
Answer:
The amount of interest that is recognized for the period from April 1 to December 31 is $15,750
Explanation:
According to the given data we have the following:
interest=12%
From April 1 to December 31 we have 9 months
Sodium Inc. borrowed $175,000
Therefore, in order to calculate the amount of interest that is recognized for the period from April 1 to December 31 we would have to make the following calculation:
Interest for 9 months= $175,000 x 12% x 9 months / 12
Interest for 9 months=$15,750
The amount of interest that is recognized for the period from April 1 to December 31 is $15,750
g A depreciation of the U.S. real exchange rate induces U.S. consumers to buy a. fewer domestic goods and fewer foreign goods. b. more domestic goods and fewer foreign goods. c. fewer domestic goods and more foreign goods. d. more domestic goods and more foreign goods.
Answer:
more domestic goods and fewer foreign goods.
Explanation:
Real exchange rate is the rate at which the goods and services of a domestic country is exchanged for the goods and services of a foreign country.
If there's deprecation, it means that foreign goods becomes more expensive relative to domestic goods. As a result, demand for foreign goods would fall and demand for domestic goods would increase.
I hope my answer helps you
Kingbird Company has the following stockholders’ equity accounts at December 31, 2017.Common Stock ($100 par value, authorized 8,600 shares) $473,000Retained Earnings 281,300Prepare entries in journal form to record the following transactions, which took place during 2018. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)(1) 300 shares of outstanding stock were purchased at $98 per share. (These are to be accounted for using the cost method.)(2) A $21 per share cash dividend was declared.(3) The dividend declared in (2) above was paid.(4) The treasury shares purchased in (1) above were resold at $102 per share.(5) 460 shares of outstanding stock were purchased at $105 per share.(6) 350 of the shares purchased in (5) above were resold at $97 per share.
Answer:
Journal Entries :
1.
Common Stocks $29,400 (debit)
Cash $29,400 (credit)
2.
Dividends Declared $174,300 (debit)
Shareholders for Dividends $174,300 (credit)
3.
Shareholders for Dividends $174,300 (debit)
Cash $174,300 (credit)
4.
Cash $30,600 (debit)
Common Stocks $30,600 (credit)
5.
Common Stocks $48,300 (debit)
Cash $48,300 (credit)
6.
Cash $29,100 (debit)
Common Stocks $29,100 (credit)
Explanation:
1.
Common Stocks $29,400 (debit)
Cash $29,400 (credit)
Purchase Cost = 300 shares × $98 = $29,400
2.
Dividends Declared $174,300 (debit)
Shareholders for Dividends $174,300 (credit)
Dividend Calculation = (8600 - 300) × $21 = $174,300
Note : Recognize the Liability : Shareholders for Dividends and recognise the Equity Element : Dividends Declared
3.
Shareholders for Dividends $174,300 (debit)
Cash $174,300 (credit)
Note : De-recognize the Liability : Shareholders for Dividends and De -recognize the Assets of Cash.
4.
Cash $30,600 (debit)
Common Stocks $30,600 (credit)
Proceeds = 300 shares × $102 = $30,600
5.
Common Stocks $48,300 (debit)
Cash $48,300 (credit)
Purchase Cost = 460 shares × $105 = $48,300
6.
Cash $29,100 (debit)
Common Stocks $29,100 (credit)
Proceeds = 300 shares × $97 = $29,100
Mr. Bagley, a self-employed musician, timely filed his Year 1 income tax return, which showed an AGI of $180,000 and total tax of $45,000. He expects his Year 2 total tax to be $70,000. What is his required payment through withholding and estimated tax for Year 2
Answer:
$45,000
Explanation:
Since we assume that Mr. Bagley calculated his next year's taxes correctly, in order to determine the federal tax withholding, we should divide the total expected taxes by 4. Generally self-employed pay federal tax withholdings in quarterly payments.
Mr. Bagley has two options:
the first option is to pay quarterly taxes according to last year's taxes = $45,000 / 4 = $11,250 per quarter. This would be the required payment. Mr. Bagley's second option is to pay $70,000 / 4 = $17,500 every quarter in order to lower his final annual payment. He can choose to do this, but he is not required to do so.All of the following statements regarding valuation of receivables under U.S. GAAP and IFRS are true except:______
A. Both require the allowance method for uncollectibles unless uncollectibles are immaterial.
B. Both require that receivables be reported net of estimated collectibles.
C. Both require that the expenses for estimated collectibles be recorded in the same period revenues generated from those receivables are recorded.
D. Both allow using percent of sales, percent of receivables, or aging of receivables to estimate uncollectibles.
E. Both require that the expense related to uncollectibles be recorded when the receivable is determined to be uncollectible.
Answer:
E. Both require that the expense related to uncollectibles be recorded when the receivable is determined to be uncollectible.
Explanation:
GAAP is an acronym for Generally Accepted Accounting Principles, it comprises of the accounting standard, procedures and principles used by public institutions in the United States of America. The U.S GAAP is issued by the Financial Accounting Standards Board (FASB) and adopted by the U.S. Securities and Exchange Commission (SEC).
IFRS is an acronym for International Financial Reporting Standards, it comprises of a set of accounting standards or rules issued by the International Accounting Standards Board (IASB). The International Financial Reporting Standards ensures that statement of income, when reported by accountants is consistent, transparent and comparable globally.
Also, there are notable similarities between the U.S GAAP and IFRS, these are;
1. Both require the allowance method for uncollectibles unless uncollectibles are immaterial.
2. Both require that receivables be reported net of estimated collectibles.
3. Both require that the expenses for estimated collectibles be recorded in the same period revenues generated from those receivables are recorded.
4. Both allow using percent of sales, percent of receivables, or aging of receivables to estimate uncollectibles.
Richman Company purchased $1,200,000 of 8%, 5-year bonds from Carlin, Inc. on January 1, 2021, with interest payable on July 1 and January 1. The bonds sold for $1,249,896 at an effective interest rate of 7%. Using the effective interest method, Richman Company adjusted the Available-for-Sale Debt Securities account for the Carlin, Inc. bonds on July 1, 2021 and December 31, 2021 by the amortized premiums. At December 31, 2021, the fair value of the Carlin, Inc. bonds was $1,272,000. Prepare the journal entry for Richman Company to record the same.
Answer:
Dr. Bond Receivable $30,761
Cr. Gain on Revaluation $30,761
Explanation:
A bond is issued on the premium if it is issued at a value over its face value,
Bond Premium = Issuance value - Face Value = $1,249,896 - $1,200,000 = $49,896
July 1,2021
Amortization = ($1,200,000 x 8% ) - ( $1,249,896 x 7% ) = $8,507 x 6/12 = $4,254
Un-amortised Premium = $49,896 - $4,254 = $45,642
Carrying Value = $1,200,000 - $45,642 = $1154,358
Dec 31 , 2021
Amortization = ($1,200,000 x 8% ) - ( $1,245,642 x 7% ) = $8,507 x 6/12 = $4,403
Un-amortised Premium = $45,642 - $4,403 = $41,239
Carrying value = $1,200,000 + $41,239 = $1,241,239
Revaluation Gain = 1,272,000 - $1,241,239 = $30,761
The business world is becoming increasingly global due to advances in technology and travel. This means that businesspeople must know how to navigate intercultural ethics, not just the ethics of their particular country. To better prepare for the ethical challenges of a global marketplace, you should broaden your cultural awareness and familiarize yourself with strategies that help you adhere to legal and ethical guidelines.Read the following passages, and then answer the questions.You have recently been told you are going on a business trip to Thailand. You want to schedule a meeting with your supervisor to discuss how she conducts business in an ethical manner while in Thailand. In order to prepare for the meeting, you make a list of questions you would like to ask.What is an example of a good question to ask in this meeting?What are the company policies when it comes to handling bribery?Is it customary in this country to take off your shoes before entering a home?What are the top three sights I should see?After solidifying an overseas deal with a large bottling company, the executive informs you that in order to expedite the signing of the materials, he will need an extra $10,000.How should you react to his request?Immediately judge the man as immoral and corrupt and end the business deal.Inform the executive that this extra $10,000 wasn’t in the original contract. Avoid assuming unethical behavior until you clarify what he is asking for in relation to the agreed-upon contract.Negotiate his request and offer $5,000.Rather than determining whether a culture has good or bad ethics, it is best to look for practical solutions to the cultural challenges of doing global business.Which of the following suggestions acknowledge different values and respect the need for moral initiative? Check all that apply.Find alternatives.Don’t rationalize shady decisions.Avoid transparency.Refuse business if it violates your basic values.
Since the questions are different, the answers are separated for question 1 and 2
ANSWER:
1) The best question to ask is: "What are the top three sights I should see".
2) Avoid assuming unethical behavior until you clarify what he is asking for in relation to the agreed-upon contract.
Inform the executive that this extra $10,000 wasn't in the original contract.
EXPLANATION:
1) It I very important to know the things expected to happen in the meeting, so that you can prepare ahead for it. Knowing the top three sights will help you prepare ahead for them. This question tends to extract the frequent and most occuring actions the supervisor always encounter during her meetings at Thailand.
2) It is not always right for us to condemn people's actions without the details of such action. Try to understand the details of why the executive wants you to add $10,000 to the cost of the project, so that you won't assume wrongly. And it is always right to specify the $10,000 demanded by the executive as a separate cost from the initial cost of the project, if the money does not directly linked the the initial cost of the project.
What is the true income tax rate on interest income if the nominal interest rate is 8 percent a year, the inflation rate is 5 percent a year, and the tax rate on nominal interest is 25 percent? The true income tax rate is nothing percent.
Answer:
66.67%
Explanation:
First, we need to calculate the Interest paid
Tax Paid = 25% x 8% = 2%
Tax paid is the nominal rate, now we need to calculate the real rate.
Before-tax real interest rate = Nominal Interest rate - Inflation rate
Before-tax real interest rate = 8% - 5% = 3%
True Income Tax rate = Tax paid / Before-tax real interest rate
True Income Tax rate = 2% / 3%
True Income Tax rate = 66.67%
Selected account balances before adjustment for Alantic Coast Realty at July 31, 2016, the end of the current year, are as follows:
Debits Credits
Accounts Receivable $ 75,000
Equipment 345,700
Accumulated Depreciation—Equipment $112,500
Prepaid Rent 9,000
Supplies 3,350
Wages Payable –
Unearned Fees 12,000
Fees Earned 660,000
Wages Expense 325,000
Rent Expense –
Depreciation Expense –
Supplies Expense –
Data needed for year-end adjustments are as follows:
a. Unbilled fees at July 31, $11,150.
b. Supplies on hand at July 31, $900.
c. Rent expired, $6,000.
d. Depreciation of equipment during year, $8,950.
e. Unearned fees at July 31, $2,000.
f. Wages accrued but not paid at July 31, $4,840.
Required:
1. Journalize the six adjusting entries required at July 31, based on the data presented. Refer to the Chart of Accounts for exact wording of account titles.
2. What would be the effect on the income statement if adjustments (a) and (f) were omitted at the end of the year?
3. What would be the effect on the balance sheet if adjustments (a) and (f) were omitted at the end of the year?
4. What would be the effect on the "Net increase or decrease in cash" on the statement of cash flows if adjustments (a) and (f) were omitted at the end of the year?
Answer:
Required 1.
a.
Trade Receivables $11,150 (debit)
Deferred Revenue $11,150 (credit)
b.
Supplies $900 (debit)
Income Statement $900 (credit)
c.
Rent Expense $6,000 (debit)
Prepaid Rent $6,000 (credit)
d.
Depreciation $8,950 (debit)
Accumulated Depreciation $8,950 (credit)
e.
Trade Receivables $2,000 (debit)
Deferred Revenue $2,000 (credit)
f.
Wages Expense $4,840 (debit)
Wages Payable $4,840 (credit)
Required 2.
a. No Effect
b. Income is Overstated by $4,840
Required 3.
a. Decrease in Assets $11,150 and Decrease in Liabilities $11,150
b. Decrease in Liabilities $4,840
Required 4.
a. No Effect
b. Net Increase in Cash $4,840
Explanation:
Journal a.
We recognized the Assets of Trade Receivable at $11,150 and Liability : Deferred Revenue $11,150. Both entries do not affect the Income statement.
Journal b.
We recognized the Expense : Wages Expense at $4,840 and a Liability Wages Payable at $4,840. The Wage Expense increases the expenses in income statement to correct an Overstated Profit.
Soap Company manufactures soap X and soap Y and can sell all it can make of either. Hours available to produce the products are the constrained resources. Based on the following data, if Soap could reduce the processing time for X by 10 percent, which of the following statements is true?
X Y
Sales Price $20 $25
Variable Cost 14 15
Hours needed to process 3 5
A. It would take 162 minutes to process one unit of X.
B. There would be no difference in the contribution margin per hour as compared to it before the processing time reduction.
C. The contribution margin per hour for X would be $2.
D. Soap Y would still be the most profitable.
Answer:
It would take 162 minutes to make one unit of product X.
Explanation:
Giving the following information:
Hours available to produce the products are the constrained resources.
Soap could reduce the processing time for X by 10 percent.
X Y
Sales Price $20 $25
Variable Cost 14 15
Hours needed to process 3 5
First, we need to determine the number of minutes required to make one unit of Product X under the new method:
Number of minutes required= (3*60)*0.9= 162 minutes.
It would take 162 minutes to make one unit of product X.
B) False. The contribution margin per hour of Product B is higher than product Y.
C) False. The contribution margin per hour of $2 was before the improvement in product X.
D) False. Product Y has a higher contribution margin per unit but lower compared to the contribution margin per hour.
The unadjusted trial balance for Monty Corp. is shown below.
MONTY CORP.
Trial Balance
October 31, 2017
Debit Credit
Cash $15,330
Supplies 2,750
Prepaid Insurance 750
Equipment 4,760
Notes Payable $4,760
Accounts Payable 2,300
Unearned Service Revenue 1,720
Common Stock 11,510
Retained Earnings 0
Dividends 540
Service Revenue 13,360
Salaries and Wages Expense 4,000
Rent Expense 5,520
$33,650 $33,650
Assume the following adjustment data.
1. Supplies on hand at October 31 total $690.
2. Expired insurance for the month is $125.
3. Depreciation for the month is $60.
4. As of October 31, services worth $930 related to the previously recorded unearned revenue had been performed.
5. Services performed but unbilled (and no receivable has been recorded) at October 31 are $260.
6. Interest expense accrued at October 31 is $85.
7. Accrued salaries at October 31 are $1,570.
Prepare the adjusting entries for the items above. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)
Answer:
1.
No Entry
2.
Insurance Expense $125 (debit)
Insurance Prepaid $125 (credit)
3.
Depreciation $60 (debit)
Accumulated depreciation $60 (credit)
4.
Unearned Revenue $930 (debit)
Earned Revenue $930 (credit)
5.
Accounts Receivable $260 (debit)
Service Revenue $260 (credit)
6.
Interest expense $85 (debit)
Interest payable $85 (credit)
7.
Salaries expense $1,570 (debit)
Salaries Payable $1,570 (credit)
Explanation:
There is no entry required for supplies on hand as this is the Ledger Account Balance.
Insurance expense is recognized out of the prepaid insurance premium.
The liability : Unearned Revenue is de-recognized and Earned Revenue is recognized when services have finally been performed.