Answer:
(a)
Dr. Cash $2,630,000
Cr. Preferred Stock $2,147,000
Cr. Add-in-Capital excess of par preferred stock $483,000
Explanation:
Preferred stockholders has an advantage that they are paid first when there is any dividend is announced. The residual dividend will be divided into the common stockholders. Any prior years due dividend and current years dividend associated with preferred share will be paid first.
Par value = 113,000 x 19 = $2,147,000
Excess of par value = $2,630,000 - $2,147,000 = $483,000
Gold futures contracts are based on 100 troy ounces and are priced in dollars per troy ounce. At the end of trading today, you saw a market report on the November contracts with these prices: Open 1293.00, High 1295.00, Low 286.00, and Settle1296.10. If you own two of these contracts, what is the value of your position as of the end of the trading day?
A. $129,610
B. $259,000
C. $258,600
D. $259,220
E. $260,4607.
Answer:
D. $259,220
Explanation:
The computation of the value for your position at the end of the trading day is shown below;
Given that
Settled price = $1296.10
And, the
Two contracts are
= 2 × 100
= 200 troy ounces
Now the position at the end of the day is
= Two contracts × settled price
= $200 × 1296.10
= $259,220
We simply multiplied the two contracts with the settled price so that the value could arrive
hence. the correct option is d.
Zachary Manufacturing Company has an opportunity to purchase some technologically advanced equipment that will reduce the company’s cash outflow for operating expenses by $1,287,000 per year. The cost of the equipment is $9,187,846.67. Zachary expects it to have a 11-year useful life and a zero salvage value. The company has established an investment opportunity hurdle rate of 15 percent and uses the straight-line method for depreciation. (PV of $1 and PVA of $1) (Use appropriate factor(s) from the tables provided.)
Required:
a. Calculate the internal rate of return of the investment opportunity. (Do not round intermediate calculations.)
b. Indicate whether the investment opportunity should be accepted.
1. Internal Rate of Return
2. Should the investment opportunity be accepted?
Answer:
IRR = 8%
Don't accept the project
Explanation:
The internal rate of return is the discount rate that equates the after tax cash flows from an investment to the amount invested.
IRR can be calculated using a financial calculator:
Cash flow in year 0 = -9,187,846.67
Cash flow each year from year 1 to 11 = 1287000
IRR = 8%
Because the IRR is less than the hurdle rate, the project shouldn't be accepted.
To find the IRR using a financial calacutor:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. After inputting all the cash flows, press the IRR button and then press the compute button.
I hope my answer helps you
Answer:
a) IRR
IRR = 9%
b)
Since the IRR is less than the hurdle rate , the project should be rejected. An IRR with higher than the hurdle rate implies that the project would decrase the wealth of ths shareholders
Explanation:
IRR = a% + ( NPVa/(NPVa + NPVb)× (b-a)%
NPV = PV of annual savings - initial cost
PV of annual savings = A× (1- (1+r)^(-n) )/r
A- annual savings in operating cost , r- rate of return, n- number of years
NPVa
PV of annual savings = 1,287,000 × (1- 1.15^(-11))/0.15= 6,735,787.15
NPV = 6,735,787.15 - 9,187,846.67.= 2,452,059.52
NPVb
PV of annual savings = (1,287,000 × (1- 1.03^(-11))/0.03=11908127.23
NPV b = 11908127.23 -9187846.67 =2720280.564
IRR = 3% + ( 2720280.564 /(2720280.564 +2,452,059.52) )× (15-3)%
IRR = 9%
Since the IRR is less than the hurdle rate , the project should be rejected. An IRR with higher than the hurdle rate implies that the project would decrase the wealth of ths shareholders
Milltown Company sells used cars. During the month, the dealership sold 22 cars at an average price of $15,000 each. The budget for the month was to sell 20 cars at an average price of $16,000. Compute the dealership sales volume variance for the month.
Answer:
Sales volume variance = $32,000 favorable
Explanation:
The sales volume variance is calculated as the difference between the budgeted and the actual sales volume multiplied by he standard price per unit
Unit
Budgeted sales units 20
Actual sales units 22
Sales volume 2
Standard price per unit ×$16,000
Sales volume variance $32,000 Favorable
Sales volume variance = $32,000
Assume you purchased 400 shares of XYZ common stock on margin at $30 per share from your broker. A. If the initial margin is 55%, the amount you borrowed from the broker is $5400 . B. What is the new margin if the price of share falls to $26?
Answer:
Part A. $5,400
Part B. $5,720
Explanation:
Part A.
The Amount borrowed can be calculated by
Amount Borrowed= 400 shares * $30 per share * (100% - 55%) = $5,400
Part B.
The New margin was 55% and as per the requirements the price of the share is $26, so
The New Margin = 400 shares * $26 per share * 55% = $5,720
A client in the 28 percent marginal tax bracket is comparing a municipal bond that offers a 4.8 percent yield to maturity and a similar risk corporate bond that offers a 6.55 percent yield. Which bond will give the client more profit after taxes
Answer:
The municipal bond will give the client more profit after taxes because it has a higher equivalent yield (8.06%) compared to that of the corporate bond (6.55%)
Explanation:
Here, we are to compare a municipal bond to a corporate bond and determine which of the two will give the client more profit after taxes.
The first thing to calculate here is the equivalent taxable yield of the municipal yield.
Mathematically, we employ a mathematical approach approach here;
Equivalent taxable yield = Municipal yield/(1-tax rate)
From the question, we can identify that the tax rate is 28%
28% = 28/100 = 0.28
The municipal yield = 4.8%
Inputing these into the equation;
Equivalent taxable yield = 5.8/(1-0.28) = 5.8/0.72 = 8.06% approximately
Now comparing this value to the value of the corporate bond, we can see that the municipal bond offers a better profit after tax since it has a higher equivalent yield
John has an auto which is covered for collision losses subject to a $250 deductible. Kate's auto also has collision coverage but her deductible is $500. How would a $2,000 collision loss be paid if it occurs when John borrows Kate's car because his car is in the shop for repairs?
Answer:
Kate policy will pay 1500 dollars while Johns policy will pay 250 dollars
Explanation:
kates policy will pay 1500 dollars while johns policy will pay 250 dollars.
Since Kates deductible is 500 dollars, this deductible will be subtracted from the 2000 dollars collission loss that occurred when John borrowed her car. which gives $1500. therefore her policy will get to pay 1500 dollars. while johns policy will have to pay $250
The following events occur for The Underwood Corporation during 2021 and 2022, its first two years of operations. June 12, 2021 Provide services to customers on account for $38,600. September 17, 2021 Receive $23,000 from customers on account. December 31, 2021 Estimate that 45% of accounts receivable at the end of the year will not be received. March 4, 2022 Provide services to customers on account for $53,600. May 20, 2022 Receive $10,000 from customers for services provided in 2021. July 2, 2022 Write off the remaining amounts owed from services provided in 2021. October 19, 2022 Receive $43,000 from customers for services provided in 2022. December 31, 2022 Estimate that 45% of accounts receivable at the end of the year will not be received.
Required:1. Record transactions for each date. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)2. Post transactions to the following accounts: Cash, Accounts Receivable, and Allowance for Uncollectible Accounts.3. Calculate the net realizable value of accounts receivable at the end of 2015 and 2016.
Answer:
Underwood Corporation
Journal Entries:
Debit Credit
June 12, 2021:
Accounts Receivable $38,600
Service Revenue $38,600
To record services to customers on account
Sept. 17, 2021:
Cash Account $23,000
Accounts Receivable $23,000
To record cash receipt from customers.
Dec. 31, 2021:
Uncollectible Accounts Exp $7,020
Allowance for Doubtful Accounts $7,200
To record allowance for doubtful accounts.
March 4, 2022:
Accounts Receivable $53,600
Service Revenue $53,600
To record services to customers on account.
May 20, 2022:
Cash Account $10,000
Accounts Receivable $10,000
To record cash receipts from customers.
July 2, 2022:
Allowance for Doubtful Accounts $5,600
Accounts Receivable $5,600
To write off the uncollectible balance.
Oct. 19, 2022:
Cash Account $43,000
Accounts Receivable $43,000
To record cash receipts from customers.
Dec. 31, 2022:
Uncollectible Accounts Exp $3,170
Allowance for Doubtful Accounts $3,170
To record allowance for doubtful accounts.
b) Posting Transactions to the accounts:
Cash Account
Debit Credit Balance
Sept 17, 2021: Accounts Receivable $23,000 $23,000
May 20, 2022:Accounts Receivable $10,000 $33,000
Oct. 19, 2022: Accounts Receivable $43,000 $76,000
Accounts Receivable
Debit Credit Balance
June 12, 2021 Service Revenue $38,600 $38,600
Sept 17, 2021 Cash $23,000 $15,600
March 4, 2022 Service Revenue $53,600 $69,200
May 20, 2022 Cash $10,000 $59,200
July 2, 2022 Allowance for Uncollectible $5,600 $53,600
Oct. 19, 2022 Cash $43,000 $10,600
Allowance for Uncollectible Accounts
Debit Credit Balance
Dec. 31, 2021 Uncollectible Accounts Expense $7,200 $7,200
July 2, 2022 Accounts Receivable $5,600 $1,600
Dec 31, 2022 Uncollectible Accounts Expense $3,170 $4,770
3. Net Realizable Value of Accounts Receivable at the end of 2021 and 2022:
2021 2022
Accounts Receivable Balance $15,600 $10,600
less Allowance for Doubtful Accounts ($7,200) ($4,770)
Net Realizable Value $8,400 $5,830
Explanation:
a) Allowance for Doubtful is an amount that is estimated which may not be recovered from customers for services rendered. This allowance is made in order to provide for losses that may arise from credit sales. The estimated allowance is 45% of the Accounts Receivable Balance at the end of the year.
b) When a write-off of debts occurs, the Allowance for Doubtful Accounts is adjusted with the direct write-off to reduce the balance.
Lexington Garden Supply pays $ 280,000 for a group purchase of land, building, and equipment. At the time of acquisition, the land has a current market value of $ 93,000 , the building's current market value is $ 186,000 , and the equipment's current market value is $ 31,000. Prepare a schedule allocating the purchase price of $ 280,000 to each of the individual assets purchased based on their relative market values, then journalize the lump-sum purchase of the three assets. The business signs a note payable for the purchase price.
Begin by preparing a schedule allocating the purchase price of $280,000.
Market (Sales) Value Percentage of Total Market Value Cost of Asset
Land
Building
Equipment
Total
Date Accounts Debit Credit
Account choices:
Accounts Debit Credit
Building
Cash
Equipment
Land
Note Payable
Note Receivable
Now journalize the lump-sum purchase of the three assets. The business signs a note payable for the purchase price.
Answer:
Given:
Current market value:
Land = $93,000
Building = $186,000
Equipment = $31,000
We are required to prepare a schedule allocating the purchase price of $280,000.
The schedule is prepared below.
___________________________
Market (Sales) Value:
Land= $93,000;
Building= $186,000;
Equipment= $31,000;
Total= 310,000(93,000+186,000+31,000)
____________________________
% of Total Market Value:
Land= 30%(93,000/310,000);
Building= 60%(186,000/310,000); Equipment= 10%(31,000/310,000)
Total = 100%
____________________________
Cost of Asset:
Land= 84,000(30%*280,000)
Building = 168,000(60%*280,000)
Equipment = 28,000(10%*280,000)
Total = 280,000(84,000+168,000+28,000)
____________________________
b) To journalize the lump-sum purchase of the three assets.
Account title:____Debit: _____Credit:
Land _________84,000______0
Building_______168,000_____0
Equipment _____28,000______0
Note payable_____0_______280,000
Answer is attached for easier understanding.
Changes in the job market, such as significant expansion or reduction within a particular career field, causing large numbers of people to move up or down the class ladder would characterize ________________ mobility.
Answer:
social
Explanation:
Social mobility refers changes in an individual's social economic class within a stratification system. A social stratification system is the way society ranks individuals and families according to the social status. A person's or a family's social status is generally determined by wealth or power (or both).
When a person moves up the social ladder (stratification system) it means that they are improving their status and society generally perceives them as more valuable. E.g. Serguei Brin went from being a Russian immigrant to an extremely wealthy and powerful person after Google was a success. That is a clear example of a person moving up the social ladder.
People can also lower their social class when they lose their jobs and go through severe economic hardships.
Schwartz Industry is an industrial company with 100100 million shares outstanding and a market capitalization (equity value) of $ 4$4 billion. It has $22 billion of debt outstanding. Management have decided to delever the firm by issuing new equity to repay all outstanding debt. a. How many new shares must the firm issue? b. Suppose you are a shareholder holding 100 shares, and you disagree with this decision. Assuming a perfect capital market, describe what you can do to undo the effect of this decision.
Answer:
HA LOL
Explanation:
Neon Light Company of Kansas City ships lamps and lighting appliances throughout the country. Ms. Neon has determined that through the establishment of local collection centers around the country, she can speed up the collection of payments by one and one-half days. Furthermore, the cash management department of her bank has indicated to her that she can defer her payments on her accounts by one-half day without affecting suppliers. The bank has a remote disbursement center in Florida.a. If Neon Light Company has $3.20 million per day in collections and $1.24 million per day in disbursements, how many dollars will the cash management system free up? (Enter your answer in dollars not in millions (e.g., $1,234,567).) Freed-up funds $b. If Neon Light Company can earn 10 percent per annum on freed-up funds, how much will the income be? (Enter your answer in dollars not in millions (e.g., $1,234,567).)
Answer:
a. The amount of dollars will the cash management system free up is $10,220,000
b. The income will be of $1,022,000
Explanation:
a. According to the given data in order to calculate the amount of dollars will the cash management system free up we would have to make the following calculation:
Freed-up fund = $3,200,000 * 3 + $1,240,000 * 1/2
Freed-up fund = $10,220,000
The amount of dollars will the cash management system free up is $10,220,000
b. To calculate the income If Neon Light Company can earn 10 percent per annum on freed-up funds we would have to make the following calculation:
Interest on freed-up cash = $10,220,000 * 10%
Interest on freed-up cash=$1,022,000
The income will be of $1,022,000
True or False: The price consumers pay will be higher if the tax were imposed on producers. True False If the demand for gasoline were less elastic, this tax would be effective in reducing the quantity of gasoline consumed. True or False: Consumers of gasoline are hurt by this tax. True False Workers in the oil industry are by this tax.
Diogo has a utility function, U(q 1, q 2)equalsq 1 Superscript 0.8 Baseline q 2 Superscript 0.2, where q 1 is chocolate candy and q 2 is slices of pie. If the price of slices of pie, p 2, is $4.00, the price of chocolate candy, p 1, is $8.00, and income, Y, is $100, what is Diogo's optimal bundle? The optimal valueLOADING... of good q 1 is
Answer:
The value of "[tex]\bold{q_1=2.5}[/tex]".
Explanation:
Given value:
[tex]U= Max \ q_1^{0.8} \ q_2^{0.2}\\\\[/tex]
Differentiate the above equation with respect of [tex]q_1[/tex], which will give [tex]MUq_1[/tex] as follows:
[tex]MUq_1= q_2^{0.2}(\frac{0.2}{q_1^{0.8}})\\\\[/tex]
[tex]=0.2(\frac{ q_2^{0.2}}{q_1^{0.8}})[/tex]
Differentiate the equation with respect of [tex]q_2[/tex], which will give [tex]MUq_2[/tex] as follows:
[tex]MUq_2= q_1^{0.8}(\frac{0.8}{q_1^{0.8}})\\\\[/tex]
[tex]=0.8(\frac{ q_1^{0.8}}{q_2^{0.2}})}{}[/tex]
for balancing the equation
[tex]\frac{MUq_1}{P_1}=\frac{MUq_2}{P_2}\\\\\frac{MUq_1}{MUq_2}=\frac{P_1}{P_2}\\\\[/tex]
[tex]\frac{0.2(\frac{ q_2^{0.2}}{q_1^{0.8}})} {0.8(\frac{ q_1^{0.8}}{q_2^{0.2}})}}= \frac{8}{4}\\\\\frac{(\frac{ q_2^{0.2}}{q_1^{0.8}})} {4(\frac{ q_1^{0.8}}{q_2^{0.2}})}}= \frac{2}{1}\\\\\frac{(\frac{ q_2^{0.2}}{q_1^{0.8}})} {(\frac{ q_1^{0.8}}{q_2^{0.2}})}}= 8\\\\\frac{q_2}{q_1}=8\\\\q_2=8q_1\\\\[/tex]
Calculate the value of [tex]q_1[/tex] and [tex]q_2[/tex] as follows:
[tex]100 =p_1q_1+P_2q_2\\\\100= 8q_1+4(8q_1)\\\\100=8q_1+32q_1\\\\100=40q_1\\\\q_1=\frac{100}{40}\\\\q_1=2.5[/tex]
[tex]q_2=8q_1\\\\\therefore q_1=2.5\\\\q_2=8\times 2.5\\\\q_2=20.0\\\\q_2=20[/tex]
Hejl Catering uses two measures of activity, jobs and meals, in the cost formulas in its budgets and performance reports. The cost formula for catering supplies is $210 per month plus $86 per job plus $15 per meal. A typical job involves serving a number of meals to guests at a corporate function or at a host's home. The company expected its activity in March to be 23 jobs and 222 meals, but the actual activity was 28 jobs and 217 meals. The actual cost for catering supplies in March was $5,830. The spending variance for catering supplies in March would be closest to
Answer:
Spending variance= $43 favorable
Explanation:
Giving the following information:
Standard:
Fixed costs= $210
Variable cost per job= $86
Variable cost per meal= $15
The actual activity was 28 jobs and 217 meals. The actual cost for catering supplies in March was $5,830.
To calculate the spending variance, we need to use the following formula:
Spending variance= (actual costs - standard costs)
Standard costs= 210 + 28*86 + 15*217= 5,873
Spending variance= 5,830 - 5,873
Spending variance= $43 favorable
Communication with the public and employees should be overseen by the director of PR. The duties of the crisis team should be divided according to each member’s area of expertise. Since communicating accurate information is critical, you will need to assign specific members to interface with your own employees and public-safety agencies. If your company does not have a public relations executive, this job should be handled by the head of marketing or human resources. Furthermore, all members of your crisis team should receive training in crisis communication. Which option is the best revision of the paragraph for logical flow and transition?
a. Communication with the public and employees should be overseen by the director of PR. The duties of the crisis team should be divided according to each member’s area of expertise. Since communicating accurate information is critical, you will need to assign specific members to interface with your own employees and public-safety agencies. If your company does not have a public relations executive, this job should be handled by the head of marketing or human resources. Furthermore, all members of your crisis team should receive training in crisis communication.
b. All members of your crisis team should receive training in crisis communication, and the duties of the crisis team should be divided according to each member’s area of expertise. Since communicating accurate information is critical, you will need to assign specific members to interface with your own employees and public-safety agencies. Communication with the public and employees should be overseen by the director of PR. If your company does not have a public relations executive, this job should be handled by the head of marketing or human resources.
c. The duties of the crisis team should be divided according to each member’s area of expertise. Since communicating accurate information is critical, you will need to assign specific members to interface with your own employees and public-safety agencies. Communication with the public and employees should be overseen by the director of PR. If your company does not have a public relations executive, this job should be handled by the head of marketing or human resources. Nevertheless, all members of your crisis team should receive training in crisis communication.
Answer: The third option (option C) is the right answer.
Explanation:
The paragraph which has the best coherence is option C. This is because in the case of the third option, it explains that the flow of ideas is constant from one sentence to another.
The first sentence serves as an introduction which talked about the reasons why duties should be divided based on each member’s expertise. The sentences moved smoothly and also logically from one sentence to another sentence. An example is the sentence that “if your company does not have a public relations executive…..”. This should logically proceed the sentence that says that communication ought to be overseen by the director of PR.
This shows that the third option possesses a consistent and logical train of thought as well.
Analysis reveals that a company had a net increase in cash of
$21,980 for the current year. Net cash provided by operating
activities was $19,800; net cash used in investing activities
was $10,900 and net cash provided by financing activities
was $13,080. If the year-end cash balance is $26,700, the
beginning cash balance was:
Answer:
The multiple choices are as follows:
$4,720.
$17,260.
$48,680.
$43,960.
$42,960.
The beginning cash balance was $4,720
Explanation:
The formula for closing cash balance can be used to determine the opening cash balance as shown thus:
closing cash balance=net increase in cash+opening balance of cash
by arranging the equation
opening cash balance =closing cash balance-net increase in cash
closing cash balance is $26,700
net increase in cash is $21,980
opening cash balance=$26,700-$21,980=$4,720
MILLS ALLOCATES MANUFACTURING OVERHEAD TO PRODUCTION BASED ON STANDARD DIRECT LABOR HOURS. MILLS REPORTED THE FOLLOWING ACTUAL RESULTS FOR 2018:ACTUAL NUMBER OF UNITS PRODUCED: 1,000ACTUAL VARIABLE OVERHEAD: $4000ACTUAL FIXED OVERHEAD: $3,100ACTUAL DIRECT LABOR HOURS: 1,600Note: 1. VOH Coat Var. $1,600U(RE-POST EDIT) Info from E23-18 Murr, Inc. produced 1,000 units of the company's product in 2018, The standard quantity of direct materials was three yards of cloth per unit at a standard cost of $1.35 per yard. The accounting records showed that 2,500 yards of cloth were used and the company paid $1.40 per yard. Standard time was two direct labor hours per unit at a standard rate of$10.00 per direct labor hour. Employees worked 1,700 hours and were paid $9.50 per hourMills Inc. Is a competitor of murry, Inc. from exercise E23-18. Mills also uses a standard cost system and provides the following info.Static budget variable overhead $1,200Static budget fixed overhead $1,600Static budget direct labor hours 800 hoursStatic budget number of units 400 unitsStandard direct labor hours 2 hours per unitFigure out and analyze:1. Compute the variable overhead cost and efficiency variances and fixed overhead cost and volume variances.2. EXPLAIN (as best you can) why the variances are favorable or unfavorable. Based on cost and efficiency budget standards.
Answer:
1. Compute the variable overhead cost and efficiency variances and fixed overhead cost and volume variances.
variable overhead cost variance = $1,000 unfavorablevariable efficiency variance = -$1,200 favorablefixed overhead costs = $1,500 unfavorablefixed overhead volume variance = -$100 favorable2. EXPLAIN (as best you can) why the variances are favorable or unfavorable. Based on cost and efficiency budget standards.
variable overhead cost variance is unfavorable because actual variable overhead costs per unit are higher than budgeted.variable efficiency variance is favorable because the company used less direct labor hours than budgeted to produce a higher amount of units (1,600 vs. 2,000).fixed overhead costs are unfavorable because total fixed overhead costs were much higher than budgeted, but most of this variance can be explained by higher output. fixed overhead volume variance are favorable because a higher volume was produced using less hours than budgeted.Explanation:
Static budget variable overhead $1,200
Actual variable overhead $4,000
Static budget fixed overhead $1,600
Actual fixed overhead $3,100
Static budget direct labor hours 800 hours
Actual direct labor hours 1,600
Static budget number of units 400 units
Actual units produced 1,000
Standard direct labor hours 2 hours per unit
Actual direct labor hours 1.6 per unit
standard variable rate = $1,200 / 400 units = $3 per unit
actual variable rate = $4,000 / 1,000 units = $4 per unit
standard fixed rate = $1,600 / 800 hours = $2 per hour
actual fixed rate = $3,100 / 1,600 hours = $1.9375 per hour
variable overhead cost variance = actual costs - (standard rate x actual units) = $4,000 - ($3 x 1,000) = $1,000 unfavorable
variable efficiency variance = (actual hours x standard rate) - (standard hours x standard rate) = (1,600 × $3) − (2,000 x $3) = $4,800 - $6,000 = -$1,200 favorable
fixed overhead costs = actual overhead costs - budgeted overhead costs = $3,100 - $1,600 = $1,500 unfavorable
fixed overhead volume variance = (actual fixed rate x actual hours) - (standard rate x actual hours) = ($1.9375 x 1,600) - ($ x 1,600) = $3,100 - $3,200 = -$100 favorable
Majka Company was started on January 1, Year 1. During Year 1, the company experienced the following three accounting events: (1) earned cash revenues of $29,500, (2) paid cash expenses of $13,500, and (3) paid a $1,800 cash dividend to its stockholders. These were the only events that affected the company during Year 2016.
a. Create an accounting equation and record the effects of each accounting event under the appropriate general ledger account headings.
b. Prepare an income statement, statement of changes in stockholders’ equity, and a balance sheet dated December 31, 2016, for Majka Company.
c. Explain why the income statement uses different terminology to date the income statement than is used to date the balance sheet.
Answer:
Majka Company
a) Accounting equation to record effects of each event:
1. Assets (Cash) increased $29,500 = Liabilities + Equity (Retained Earnings) increased $29,500.
2. Assets (Cash) decreased $13,500 = Liabilities + Equity (Retained Earnings) decreased $13,500.
3. Assets (Cash) decreased $1,800 = Liabilities + Equity (Retained Earnings) decreased $1,800.
b) Income Statement, Statement of Changes in Stockholders' Equity, and a Balance Sheet dated December 31, 2016:
1) Income Statement for the year ended December 31, 2016:
Sales $29,500
Expenses ($13,500)
Net Income $16,000
Dividend ($1,800)
Retained Earnings $14,200
2) Statement of Changes in Stockholders' Equity:
Retained Earnings b/f $0
Net Income $16,000
Dividend ($1,800)
Retained Earnings $14,200
3. Balance Sheet as at December 31, 2016:
Assets:
Cash ($29,500 - 13,500 - 1,800) $14,200
Liabilities + Equity:
Equity: Retained Earnings $14,200
c) Reason for different terminology to date income statement and balance sheet:
Income statement is prepared for an accounting period. It covers a specified period, while a balance sheet is prepared as at an accounting date. This means that one can prepare a balance sheet daily, or even after each transaction. But, an income statement covers a period of time, say a month, a quarter, or six months, or a year, as the case may be.
Explanation:
Income Statement, Changes in Equity, and the Balance Sheet are important financial statements, which a business prepares to report its financial performance (results), the changes that occur in owners' equity, and the financial position respectively.
You are trying to price two bonds that have the same maturity and par value but different coupon rates. Both bonds mature in 8 years and at maturity both bonds return the par value of $1,000. One bond has a coupon rate of 4% and a yield to maturity of 4%. The other bond has a coupon rate of 5% and a yield to maturity of 4%. What is the absolute value of the difference between the prices of these two bonds
The difference between the prices of the two bonds is $67.33.
What is the bond?A bond is a type of fixed-income mechanism that conveys a loan made by an investor to a borrower. A bond could be considered as an I.O.U. between the lender and borrower that contains the elements of the loan and its payments.
The formula of bond pricing:
[tex]\rm{Bond Price}=C\times\dfrac{1-(1+r)^n}{r}+ \dfrac{F}{(1+r)^n}[/tex]
Where,
C= Coupon Rate, r = Maturity Rate, F= par value, n= Number of year.
Computation of final value of the bond:
Bond 1:
According to the given information,
Coupon rate(C)= 4%,
Maturity rate(r) = 4%,
Par value of the bond(F)= $1,000
Apply the given values in the above formula:
[tex]\rm{Bond Price}=C\times\dfrac{1-(1+r)^n}{r}+ \dfrac{F}{(1+r)^n}\\\\\\\rm{Bond Price}=4\%\times\dfrac{1-(1+4\%)^8}{4\%}+\dfrac{\$1,000}{(1+4\%)^8}\\\\\\\rm{Bond Price}=\$1,000.[/tex]
Therefore, the bond price is $1,000.
Bond 2:
According to the given information,
Coupon rate(C)= 5%,
Maturity rate(r) = 4%,
Par value of the bond(F)= $1,000
Apply the given values in the above formula:
[tex]\rm{Bond Price}=C\times\dfrac{1-(1+r)^n}{r}+ \dfrac{F}{(1+r)^n}\\\\\\\rm{Bond Price}=5\%\times\dfrac{1-(1+4\%)^8}{4\%}+\dfrac{\$1,000}{(1+4\%)^8}\\\\\\\rm{Bond Price}=\$1,067.33.[/tex]
Therefore, the difference between the prices of these two bonds is :
[tex]\text{Difference}= \text{Bond 1-Bond2}\\\\\text{Difference}= \$1,000-\$1,067.33\\\\\text{Difference}= 67.33[/tex]
Learn more about the bond, refer to:
https://brainly.com/question/13559242
For each of the following items, indicate by using the appropriate code letter, how the item should be reported in the statement of cash flows, using the indirect method.
A. Added to net income
B. Deducted from net income
C. Cash outflow—investing activity
D. Cash inflow—investing activity
E. Cash outflow—financing activity
F. Cash inflow—financing activity
G. Significant noncash investing and financing activity
____ 1. Decrease in accounts payable during a period
____ 2. Declaration and payment of a cash dividend.
____ 3. Loss on sale of land.
____ 4. Decrease in accounts receivable during a period.
____ 5. Redemption of bonds for cash.
____ 6. Proceeds from sale of equipment at book value.
____ 7. Issuance of common stock for cash.
____ 8. Purchase of a building for cash.
____ 9. Acquisition of land in exchange for common stock.
____ 10. Increase in merchandise inventory during a period
Answer:
1. Decrease in accounts payable during a period - Deducted from net income (B)
2. Declaration and payment of a cash dividend - Cash outflow (financing activity ) (E)
3. Loss on disposal of land - Added to net income (A)
4. Decrease in accounts receivable during a period - Added to net income (A)
5. Redemption of bonds for cash - Cash outflow (financing activity) (E)
6. Proceeds from sale of equipment at book value - Cash inflow (investing activity ) (D)
7. Issuance of common stock for cash - Cash inflow (financing activity) (F)
8. Purchase of a building for cash - Cash outflow(investing activity ) (C)
9. Acquisition of land in exchange for common stock - Significant non-cash (investing and financing activity ) (G)
10. Increase in inventory during a period - Deducted from net income (B)
The Winston Company estimates that the factory overhead for the following year will be $1,250,000. The company has decided that the basis for applying factory overhead should be machine hours, which is estimated to be 50,000 hours. The total machine hours for the year were 54,300. The actual factory overhead for the year was $1,375,000. a) Determine the total factory overhead amount applied. b) Calculate the over or under applied amount for the year. c) Prepare the journal entry to close factory overhead into Cost of Goods Sold.
Answer:
Instructions are below.
Explanation:
Giving the following information:
Estimated factory overhead= $1,250,000.
Estimated machine-hours= 50,000 hours.
The total machine hours for the year were 54,300. The actual factory overhead for the year was $1,375,000.
First, we need to determine the predetermined manufacturing overhead rate:
Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Estimated manufacturing overhead rate= 1,250,000/50,000= $25 er machine hour
Now, we can allocate overhead:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Allocated MOH= 25*54,300= $1,357,500
Finally, we calculate the under/over allocation:
Under/over applied overhead= real overhead - allocated overhead
Under/over applied overhead= 1,375,000 - 1,357,500
Under/over applied overhead= $17,500 underapplied
Cost of goods sold 17,500
Manufacturing overhead 17,500
Six equal annual contributions are made to a fund, with the first deposit on December 31, 2019. Required: Using the future value tables, determine the equal contributions that, if invested at 10% compounded annually, will accumulate to a fund of $30,000 on December 31, 2024.
Answer:
The answer is $3,888.22
Explanation:
This is an annuity due because the cash flow is being done on the first day of each period.
Annuity is a fixed sum of money paid to or receceived from someone or business every year.
Future Value(FV) = $30,000
Interest rate(i or I/Y) = 10%
Number of years(N)= 6 years
Annuity (PMT) = ?
Using a Financial calculator to solve it (Texa BA II Plus )
Annuity (equal contributions) will be $3,888.22
The balanced scorecard approach uses only financial measures to evaluate performance. uses rather vague, open statements when setting objectives in order to allow managers and employees flexibility. normally sets the financial objectives first, and then sets the objectives in the other perspectives to accomplish the financial objectives. evaluates performance using about 10 different perspectives in order to effectively incorporate all areas of the organization.
Answer: Normally sets the financial objectives first, and then sets the objectives in the other perspectives to accomplish the financial objectives.
Explanation:
The Balanced Scorecard Approach is a method of measuring the internal business environment's effectiveness.
It is used to improve the parts of the internal business Environment that are in need of improvement which then has the domino effect of improving facets of the external business environment as well.
It has 4 areas that it focuses on in the business, which are Learning and Growth, Business Processes, Customers, and Finance.
The financial objectives are usually set first and then the other areas have objectives set up in such a way that the Financial objectives are accomplished.
Kylie was born into a family that owns numerous corporations and more than one multimillion dollar home. She never worried about paying for college or
buying her own car. These characteristics define Kylie's
You have just purchased a U.S. Treasury bond for $747.25. No payments will be made until the bond matures 5 years from now, at which time it will be redeemed for $1,000. What interest rate will you earn on this bond
Answer:
6% interest rate
Explanation:
The equation you should use is just a variation of the PV formula:
r = (FV/PV)1/t -1
r = ($1000/$747.25)1/5 - 1
r = 6% interest rate
The interest rate i will eventually earn on this bond is 6%
Following are forecasts of Target Corporation's sales, net operating profit after tax (NOPAT), and net operating assets (NOA) as of January 30, 2016 Reported Horizon Period Terminal $ millions 2016 2017 2018 2019 2020 Period Sales $73,785 $75,261 $76,766 $78,301 $79,867 $80,666 NOPAT 3,312 3,387 3,454 3,524 3,594 3,630 NOA 21,445 21,872 22,309 22,755 23,210 23,443 Answer the following requirements assuming a terminal period growth rate of 1%, a discount rate (WACC) of 6%, common shares outstanding of 602 million, and net nonoperating obligations (NNO) of $8,488 million. a. Estimate the value of a share of Target common stock using the discounted cash flow (DCF) model as of January 30, 2016. Instructions: Round all answers to the nearest whole number, except for discount factors and stock price per share. Round discount factors to 5 decimal places. Round stock price per share to two decimal places. Do not use negative signs with any of your answers.
Answer:
The estimate value of Target common stock is $ 93.71
Explanation:
Find attached computation of estimate value of common stock using DCF approach.
First of all determine Free Cash Flow in each which is the NOPAT minus the increase in NOA.
I discounted the FCF to present using the WACC of 6% as discount rate.
The terminal value formula is in the attached as well.
Kindly note that the discount factor for the terminal value is the preceding year discount factor.
The present value of all free cash flows including terminal value gives the estimate of the entire firm value.
Consider the production function Q = f(L,K) = 10KL / K+L. The marginal products of labor and capital for this function are given by?
MPL = 10K^2 / (K +L)^2, MPK = 10L^2 / (K +L)^2.
(a) In the short run, assume that capital is fixed at K = 4. What is the production function for the firm (quantity as a function of labor only)? What are the average and marginal products of labor? Draw APL and MPL on one graph.
(b) What is the marginal rate of technical substitution for this technology?
(c) Are the returns to scale of this production function increasing, decreasing or constant? Explain.
Answer:
ANSWER IS BELOW :)
Explanation:
Tbh im not sure, but I think its 10(5)+65
Hedge Fund
You are a bond analyst working for a hedge fund. A bond you follow has face value 100, has a coupon rate of 5% (paid once a year) and matures in 5 years. You are trying to find if there is any profitable trading strategy. You’ve done extensive research and have formed your opinions on future economic conditions. As a result, you expect that there will soon be a major shift in the yield curve. The current and the expected yield curve is shown below:
Year Current Expected
1 1% 3.00%
2 1.50% 2.50%
3 2.00% 3.50%
4 3.00% 4.00%
5 5.00% 5.00%
Question 1/3
Calculate the price of the bond based on the current yield curve? (use 2 decimal digits)
incorrect
Question 2/3
Calculate the price of the bond based on the expected yield curve $ ______(keep two decimal points)
Question 3/3
You are 100% sure about your expectation of the movement of the yield curve in the near future. And you want to set up a trading position before the market price in the future shift of yield curve. What should you do?
Buy the bond
Sell the bond
Do nothing
A computer glitch (of all things) was discovered at The Baruch Academic Computing Center, and it was determined that only 1,150 students were actually served. If the design capacity of the system is 1,800 students per semester and the highest number of students who can actually go to their 93. 18 orientation session is 1,200, what is the utilization and efficiency of the system?
Answer:
Utilization = 0.6388 = 63.88%
Efficiency = 0.9583 = 95.83%.
Explanation:
So, in this question we are given the following parameters or information or data that is going to assist us in solving this question/problem and they are;
=> "only 1,150 students were actually served. If the design capacity of the system is 1,800 students per semester''
=> " the highest number of students who can actually go to their orientation session is 1,200".
(A). Thus, the Utilization of the system= real capacity/ designed capacity.
=> 1150/1800 = 0.6388.
Hence, 0.6388 × 100% = 63.88%
(B). Efficiency of the system = real capacity/ designed capacity .
=> 1150/1200 = 0.9583.
Therefore, 0.9583 × 100% = 95.83%.
Answer:
Utilization = 63.88%
Efficiency = 95.83%
Explanation:
Given that:
The actual usage number of students served were 1150 students
The Design Capacity of the system is 1,800 students per semester
The highest number (effective capacity ) for the orientation session is 1,,200
The objective here is to determine the utilization and efficiency of the system.
Using the formula
Utilization of the system = actual usage number / design capacity of the system
Efficiency of the system = actual usage number / effective capacity for the orientation session
Therefore; we have
Utilization = 1150/1800 = 0.6388
= 63.88%
Efficiency = 1150/1200 = 0.9583
= 95.83%
Your firm is considering two different projects that are mutually exclusiveand they will be replaced once the project is over. Given a required return of 12%, which project should your firm undertake(Hint: you should calculate the EAA to decide which is the better project for this problem)
Your firm is considering two different projects that are mutually exclusiveand they will be replaced once the project is over. Given a required return of 12%, which project should your firm undertake(Hint: you should calculate the EAA to decide which is the better project for this problem)
Time 0 1 2 3
Project A -25,000 15,000 20,000 20,000
Project B -25,000 11,000 11,000 11,000
Answer:
Project A should be better and should be accepted because it produces a higher EAA of $7,732.5746
Explanation:
NPV = PV of cash inflow- Initial cost
PV of cash inflow = 15,000×1.12^(-1) + 20,000×1.12^(-2) + 20,000×1.12^(-3)=43,572.33
NPV = 43,572.33 -25,000 =18572.33965
EAA= NPV /Annuity factor
= 18572.339/2.401831268 = 7732.57468
Project B
PV of annuity = A× (1- (1+r)^(-n))/r
= 11,000× (1-1.12^(-4))/0.12=33410.84281
NPV = 33410.84281 - 25,000= 8410.842813
EAA = 8410.842/3.03734 =2769.139
Project A should be better and should be accepted because it produces a higher EAA of $7,732.5746