Answer:
Journal 1
Debit : Fees Earned $702,400
Credit : Income Statement $702,400
Closing off Revenue against Income Statements
Journal 2
Debit : Income Statement $574,600
Credit : Wages Expense $480,000
Credit : Rent Expense $69,000
Credit : Supplies Expense $11,000
Credit : Miscellaneous Expense $14,600
Closing off Expenses against Income Statements
Explanation:
The Income Statement accounts for Incomes and expenses. Therefore, close off the Income Accounts against the Income Statement as well as Expenses Accounts.
What is the relationship between households and the financial market?
Answer:
In other words, the household sector diverts a portion of income to the financial markets which is then used by the business and government sectors to finance their spending. Household Saving: The household sector both buys and sells legal claims through the financial markets.
Explanation:
define fannie mae and freddie mac.
Answer:
Fannie Mae and Freddie Mac were created by Congress. They perform an important role in the nation's housing finance system – to provide liquidity, stability and affordability to the mortgage market.
Explanation:
A postretirement asset is computed as the excess of the expected postretirement benefit obligation over the fair value of plan assets. fair value of plan assets over the accumulated postretirement benefit obligation. accumulated postretirement benefit obligation over the fair value of plan assets. accumulated postretirement benefit obligation over the fair value of plan assets, but not vice versa.
Answer:
fair value of plan assets over the accumulated postretirement benefit obligation
Explanation:
What is the price today (in dollars and cents) of a 20-year zero coupon bond if the required rate of return is 6.95%. The bond face value is $1000. $ Place your answer in dollars and cents. You should set your calculator for at least four decimal places of accuracy. I'll remind you of this from time to time but this is a working rule throughout the semester. Do not include a dollar sign or comma in your answer. This is another rule that I'll remind you of but should be a working rule throughout the semester.
Answer:
Bond Price - Zero Coupon Bond = 260.8460 rounded off to 260.85
Explanation:
A zero coupon bond is a kind of bond which pays no periodic interest of coupon payments. Instead it is offered at a discount and it pays the par/face value at maturity. The difference between the par/face value and the issue price is the interest rate which is embedded in price of the bond. Thus, the formula to calculate the price of a zero coupon bond is as follows,
Bond Price - Zero Coupon Bond = Face Value / (1+r)^n
Where,
r is the required rate of returnn is the number of periods till maturityBond Price - Zero Coupon Bond = 1000 / (1+0.0695)^20
Bond Price - Zero Coupon Bond = 260.8460 rounded off to 260.85
If the price of an item decreases, producers will create fewer of the item. This is due to the
A.
Law of Demand
B.
Law of Supply
C.
Law of Price
D.
Consumer Choice
Answer:
the answer is B,law of supply
Cemptex Corporation prepares its statement of cash flows using the indirect method to report operating activities. Net income for the 2021 fiscal year was $634,000. Depreciation and amortization expense of $89,000 was included with operating expenses in the income statement. The following information describes the changes in current assets and liabilities other than cash: Decrease in accounts receivable $24,000 Increase in inventory 9,400 Increase in prepaid expenses 8,700 Increase in salaries payable 10,200 Decrease in income taxes payable 13,000Required: Prepare the operating activities section of the 2021 statement of cash flows.
Answer:
$726,100
Explanation:
Preparation of the operating activities section of the 2021 statement of cash flows.
Cash Flow from Operating Activities
Net Income $634,000
Adjustments:
Depreciation and amortization $89,000
Changes in operating asset and liabilities
Decrease in Account receivable $24,000
Increase in Inventory $ (9,400)
Increase in Prepaid expenses $ (8,700)
Increase in Salaries payable $10,200
Decrease in Income tax payable $ (13,000)
Operating activities $726,100
Therefore the operating activities section of the 2021 statement of cash flows will be $726,100
The Richmond Corporation uses the weighted-average method in its process costing system. The company has only a single processing department. The company's ending work in process inventory on August 31 consisted of 18,000 units. The units in the ending work in process inventory were 100% complete with respect to materials and 60% complete with respect to labor and overhead. If the cost per equivalent unit for August was $2.75 for materials and $4.25 for labor and overhead, the total cost assigned to the ending work in process inventory was:
Answer:
$95,400
Explanation:
Step 1 : Find the equivalent units of production in Ending Work in Progress
Materials = 18,000 x 100 % = 18,000 units
Conversion costs = 18,000 x 60 % = 10,800 units
Step 2 : Calculate the Cost of units in Ending Work in Progress
Cost of units in Ending Work in Progress = 18,000 x $2.75 + 10,800 x $4.25
= $95,400
Conclusion :
The ending work in process inventory was $95,400.
Dehner Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on the following data: Total direct labor-hours 52,000 Total fixed manufacturing overhead cost$291,200 Variable manufacturing overhead per direct labor-hour$5.00 Recently, Job P951 was completed with the following characteristics: Number of units in the job 20 Total direct labor-hours 100 Direct materials$780 Direct labor cost$5,200 The unit product cost for Job P951 is closest to
Answer:
Unitary cost= $352
Explanation:
First, we need to calculate the predetermined overhead rate:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Predetermined manufacturing overhead rate= (291,200 / 52,000) + 5
Predetermined manufacturing overhead rate= $10.6 per direct labor hour
Now, we can calculate the total cost of Job P951:
Total cost= 780 + 5,200 + 10.6*100
Total cost= $7,040
Finally, the unitary cost:
Unitary cost= 7,040 / 20
Unitary cost= $352
he newspaper reported last week that Bennington Enterprises earned $34.03 million this year. The report also stated that the firm’s return on equity is 12 percent. The firm retains 80 percent of its earnings. What is the firm's earnings growth rate? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) What will next year's earnings be? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to the nearest whole number, e.g., 1,234,567.)
Answer:
(A) 9.6%
(B) 37,296,880
Explanation:
Current earnings for Bennington Enterprise is $34.03 million
The ROE is 12 percent
= 12/100
= 0.12
Retention ratio is 80 percent
= 80/100
= 0.8
(A) The firms earning growth rate can be calculated as follows
= 0.8× 0.12
= 0.096×100
= 9.6%
(B) Next year earnings can be calculated as follows
= 34,030,000 × (1+0.096)
= 34,030,000× 1.096
= 37,296,880
Which of the following will help you have a good credit score?
OA.
Opening a lot of credit accounts.
B.
Keeping your balance at the maximum available amount of credit.
O C.
Paying off your debt as quickly as possible.
D.
All of the above
Psychologists have observed that: Multiple Choice once investors have made a loss, they become much more willing to take risks. investors tend to place too much faith in their ability to spot mispriced stocks. when forecasting the future, people tend to place too little weight on recent events. investors like stocks of companies whose names begin with letters that occur early in the alphabet.
Answer:
investors tend to place too much faith in their ability to spot mispriced stocks.
Explanation:
Risk management can be defined as the process of identifying, evaluating, analyzing and controlling potential threats or risks present in a business as an obstacle to its capital, revenues and profits. This ultimately implies that, risk management involves prioritizing course of action or potential threats in order to mitigate the risk that are likely to arise from such business decisions.
Psychologists have observed that investors tend to place too much faith in their ability to spot mispriced stocks.
This ultimately implies that, investors usually feel they can tell a mispriced stock caused by the behavior of market participants.
Marcy's, Inc., operates department stores located primarily in the Southwest, Southeast, and Midwest. In its 2016 third-quarter report, the company reported Cost of Goods Sold of $2,100 million, ending inventory for the third quarter of $3,200 million, and ending inventory for the previous quarter of $2,800 million. Estimate merchandise purchases for the third quarter.
Answer:
$2,500 million
Explanation:
Calculation to Estimate merchandise purchases for the third quarter
Using this formula
Third quarter merchandise purchases= Ending inventory + Cost of goods sold - Beginning inventory
Let plug in the formula
Third quarter merchandise purchases= $3,200 million + $2,100 million - $2,800 million
Third quarter merchandise purchases= $2,500 million
Therefore The Estimated merchandise purchases for the third quarter will be $2,500 million
Of the following, the most important cause of the Great Depression was soaring energy costs soaring energy costs:________
A. serious dislocation in international trade serious dislocation in international trade
B. European abandonment of the gold standard European abandonment of the gold standard
C. confiscatory social security taxes confiscatory social security taxes
D. excessive government spending
Answer:
The correct answer is the option A: Serious dislocation in international trade.
Explanation:
To begin with, the Great Depression is the famous name that receives the financial crisis that started in the United States with the breakdown of the New York's stock exchange market and that quickly spread throught out the whole world ended up shooking the entire global economy for about a complete decade.
The major causes of it where a couple of various things and situation that finally tended to the explosion of the stock market. The context was that the United States after winning the First War became the most powerful nation in the world and with that also the country with more gold reserves so it obligate the european nations to pay the debts of the war as well as difficult them to trade in the international market by elevating the taxes to their imports and pushing its own exports to every other country. So thats basically how the whole international trade suffered from a dislocation.
The most important cause of the Great Depression was A. serious dislocation in international trade.
What was the Great Depression?The Great Depression was the global economic meltdown that was experienced by many nations following the end of the first world war.
After the defeat of Germany, many reparation sanctions were imposed on it for civilian damages caused by aggressive Germany.
Many nations who participated in the war also experienced economic stagnation and uncertainty with war debts suffocating economic activities.
Thus, the most important cause of the Great Depression was Option A.
Learn more about the Great Depression at https://brainly.com/question/441267
What is the role of the Federal Trade Commission?
Explanation:
The fredeal trade commission protests consumers by stopping unfair, deceptive and fraudulent practices in the marketplace. We conduct investigation, sue companies, develop rules to ensure a vibrant marketplace, and educated consumers and businesses about their rights and responsibilities.a disgruntled customer will tell how many people
Answer:
A dissatisfied customer will tell between 9-15 people about their experience. Around 13% of dissatisfied customers tell more than 20 people. – White House Office of Consumer Affairs. Happy customers who get their issue resolved tell about 4-6 people about their experience.
Explanation:
correct me if I am wrong
Learned Corporation has provided the following information: Cost per Unit Cost per Period Direct materials $ 5.30 Direct labor $ 3.75 Variable manufacturing overhead $ 1.35 Fixed manufacturing overhead $ 36,000 Sales commissions $ 0.70 Variable administrative expense $ 0.60 Fixed selling and administrative expense $ 12,000 Required: a. For financial reporting purposes, what is the total amount of product costs incurred to make 8,000 units
Answer:
$119,200
Explanation:
The Absorption Costing method is recommended by GAAP or IFRS for financial reporting instead of Variable Costing method.
Thus to calculate product costs under absorption costing, we add the total of all manufacturing costs (Variable and Fixed),
Non - Manufacturing costs are treated as Period Costs which are expensed in the Income Statement.
Direct materials ($ 5.30 x 8,000 units) $42,400
Direct labor ($ 3.75 x 8,000 units) $30,000
Variable manufacturing overhead ($ 1.35 x 8,000 units) $10,800
Fixed manufacturing overhead $ 36,000
Total Product Cost $119,200
therefore,
The total amount of product costs incurred to make 8,000 units is $119,200.
Lumens, Inc. is a lampshade manufacturer who uses a process costing system and calculates per-unit costs using the weighted average method. The following month of August data relates to the first production department (the Canvas Department) of its Golden Shade line of lampshades: How many units were started in the Canvas Department during the month of August
Answer:
the no of units to be started is 5,500 units
Explanation:
The computation of the number of units to be started in the canvas department is as follows:
= Units completed and transferred out + Ending work in process inventory
= 5100 units + 400 units
= 5500 units
Hence, the no of units to be started is 5,500 units
xercise 7-24 (Static) Assigning Costs to Jobs (LO 7-1, 2) Forest Components makes aircraft parts. The following transactions occurred in July. Purchased $119,000 of materials on account. Issued $117,600 in direct materials to the production department. Issued $8,400 of supplies from the materials inventory. Paid for the materials purchased in transaction (1) using cash. Returned $15,400 of the materials issued to production in (2) to the materials inventory. Direct labor employees earned $217,000, which was paid in cash. Purchased miscellaneous items for the manufacturing plant for $120,400 on account. Recognized depreciation on manufacturing plant of $245,000. Applied manufacturing overhead for the month. Forest uses normal costing. It applies overhead on the basis of direct labor costs using an annual, predetermined rate. At the beginning of the year, management estimated that direct labor costs for the year would be $3,000,000. Estimated overhead for the year was $2,790,000. The following balances appeared in the inventory accounts of Forest Components for July. Beginning Ending Materials Inventory ? $88,200 Work-in-Process Inventory ? 73,500 Finished Goods Inventory $18,200 49,700 Cost of Goods Sold ? 521,500 Required: a. Prepare journal entries to record these transactions. b. Prepare T-accounts to show the flow of costs during the period from Materials Inventory through Cost of Goods Sold.
Answer:
Forest Components
a. Journal Entries
1. Debit Raw materials $119,000
Credit Accounts payable $119,000
To record purchase of materials on account.
2. Debit Work in Process $117,600
Credit Raw materials $117,600
To record transfer of materials to production.
3. Debit Overhead $8,400
Credit Raw materials $8,400
To record indirect materials used.
4. Debit Accounts payable $119,000
Credit Cash $119,000
To record payment for materials.
5. Debit Raw materials $15,400
Credit Work in Process $15,400
To record the return of materials to warehouse.
6. Debit Work in Process $217,000
Credit Cash $217,000 (direct labor)
To record the payment for direct labor.
7. Debit Overhead $120,400
Credit Account payable $120,400
Purchase of miscellaneous items for manufacturing plant.
8. Debit Overhead $245,000
Credit Depreciation expense $245,000
To record depreciation expense for overhead
9. Debit Work in Process $201,810
Credit Overhead $201,810
To record overhead applied.
b. T-accounts:
Materials Inventory
Account Titles Debit Credit
Beginning balance $79,800
Accounts payable $119,000
Work in Process $117,600
Overhead 8,400
Work in Process 15,400
Ending Balance 88,200
214,200 214,200
Work in Process Inventory
Account Titles Debit Credit
Beginning balance $105,490
Raw materials 117,600
Raw materials $15,400
Direct labor (cash) 217,000
Overhead 201,810
Finished Goods 553,000
Ending Balance 73,500
$641,900 $641,900
Overhead
Account Titles Debit Credit
Raw materials $8,400
Accounts payable 120,400
Depreciation exp. 245,000
Work in Process $201,810
Finished Goods Inventory
Account Titles Debit Credit
Beginning balance $18,200
Work in Process 553,000
Cost of goods sold $521,500
Ending balance $49,700
Cost of Goods Sold
Account Titles Debit Credit
Finished Goods $521,500
Explanation:
a) Data and Analysis:
1. Raw materials $119,000 Accounts payable $119,000
2. Work in Process $117,600 Raw materials $117,600
3. Overhead $8,400 Raw materials $8,400
4. Accounts payable $119,000 Cash $119,000
5. Raw materials $15,400 Work in Process $15,400
6. Work in Process $217,000 Cash $217,000 (direct labor)
7. Overhead $120,400 Account payable $120,400
8. Overhead $245,000 Depreciation expense $245,000
9. Work in Process $201,810 Overhead $201,810 ($217,000 * $0.93)
Estimated direct labor costs = $3,000,000
Estimated overhead costs = $2,790,000
Predetermined overhead rate = $2,790,000/$3,000,000 = $0.93
Please Help!!
1. True or False: A tax lien which is a failure of an individual to pay his or her taxes and it can remain on a credit report for up to 10 years.
2. True or False: Credit utilization is the ratio of an individual's credit balance to their credit card limit.
3. True or false: Chapter 7 bankruptcy is focused more on the restructuring of an individual's finances rather than the elimination of debt altogether.
Answer:
1. True
2. True
3. False
Explanation:
1. True (If a tax is unpaid then it remains on the credit report up to 10 years)
2. True ( The statement correctly stats that Credit utilization is the ratio of an individual's credit balance to their credit card limit )
3. False because Chapter 7 bankruptcy is focused more on restructuring of debt altogether.
Trustmark provides more than 2 million people with flexible medical, life, and disability benefits and fitness and wellness services. The company, headquartered in Lake Forest, Illinois, has more than 6,200 full- and part-time employees working in twenty five locations across the United States. Trustmark experienced steady growth until mid-1990, when it experienced financial pressures that forced it to re-evaluate its operations. Trustmark concentrated on core competencies, sold off businesses, and focused on generating capital. Once the company was financially sound, Trustmark executives moved to create a culture that would be open to innovation and opportunity. The challenge was to create a culture where all employees felt they could challenge that status quo and seek new opportunities. The key to creating this culture was developing effective leaders who supported it. Trustmark used workshops and 360-degree feedback to help the "Trustmark Renaissance," a radical change in the organization culture and mindset, succeed. The leadership program includes sessions, attended by senior leaders, directors, and managers, during which participants learn about leadership practices, such as how to inspire a shared vision, challenge the process, enable others to act, and encourage with the heart. During these sessions, participants also receive feedback from their 360-degree assessments. Participants also get one-on-one coaching where they can discuss their leadership challenges and their feedback. Participants are asked to identify development areas to focus on during the next step in the process, a two-day workshop. At the workshop, participants learn more about the leadership practices and how to improve the areas identified in their feedback. Participants leave the workshop with an improvement plan for improving their leadership effectiveness. Participants are paired with partners who are expected to provide post-workshop support, exchange action plans, and commit to follow-up to ensure success in using what they learned. 1- What development activities are used in this program? Why are they important? 2- What data or outcomes should be collected to monitor the effectiveness of the leadership development program? Explain the business reason for your choice or outcomes or data.
Answer:
Trustmark
1. The development activities used in this program are:
a. Leadership workshops
b. 360-degree feedback
c. One-on-one coaching
d. Improvement plans for participants
1b. These development activities enable participants to achieve success in their development learning.
2. The data or outcomes that should be collected to monitor the effectiveness of the leadership development program are the improved ability of participants to:
a. inspire a shared vision
b. challenge the process
c. enable others to act
d. encourage with the heart.
The business reason for the above-stated outcomes is that these outcomes will demonstrate that participants have actually improved their leadership skills. Their improved leadership skills will galvanize them to become effective leaders who could create and grab new business opportunities for the overall growth of the company.
Explanation:
Creating a culture open to innovation and opportunity will enable Trustmark to become competitive.
Leadership workshops are sessions where participants learn and improve their leadership skills.
360-degree feedback is a communication strategy that enables face-to-face or one-on-one interaction.
One-on-one coaching is a personalized form of coaching aimed at improving a leader's skills exclusively.
Improvement plans for participants enable workshop participants to develop their skills and grow in their leadership experience.
Katie Homes and Garden Co. has 14,800,000 shares outstanding. The stock is currently selling at $82 per share. If an unfriendly outside group acquired 30 percent of the shares, existing stockholders will be able to buy new shares at 35 percent below the currently existing stock price. a. How many shares must the unfriendly outside group acquire for the poison pill to go into effect
Answer:
A. $4,440,000
B. $53.30
Explanation:
A. Calculation for How many shares must the unfriendly outside group acquire for the poison pill to go into effect
Number of shares = $14,800,000*30%
Number of shares=$4,440,000
Therefore the numbers of shares that must the unfriendly outside group acquire for the poison pill to go into effect is $4,440,000
b. Calculation for What will be the new purchase price for the existing stockholders
New purchase price = 82*(1-0.35)
New purchase price = $53.30
Therefore the new purchase price for the existing stockholders is $53.30
Sound Software estimates that it will sell LaTeX: NN units of a program after spending LaTeX: aa thousands of dollars on advertising, where LaTeX: N\left(a\right)=-a^2+300a+6N ( a ) = − a 2 + 300 a + 6 when LaTeX: 0\le a\le3000 ≤ a ≤ 300. What is the maximum number of units that can be sold and how much need to be spent on advertising in order to achieve this sales goal?
Answer:
Explanation:
From the given information:
N(a) = -a² +300a + 6
Taking the differential of the above equation with respect to "a"
Then;
N'(a) = - 2a + 300
where;
the Critical points N'(a) = 0
-2a + 300 = 0
-2a = -300
a = -300/-2
a = 150
Now;
N(0) = -(0)² +300(0) + 6
N(150) = (-150)² +300(150) + 6 =22506
N(300) = (-300)² +300(300) + 6 = 6
∴
The max. number of the possible unit that can be sold = 22506
The amount spent on advertising to get to this goal = 150 thousand dollars
One of the four major time value of money terms; the amount to which an individual cash flow or series of cash payments or receipts will grow over a period of time when earning interest at a given rate of interest.
a. True
b. False
Answer:
true
Explanation:
Solver provides sensitivity analysis information on all of the following except the a. range of values for objective function coefficients which do not change optimal solution. b. impact on optimal objective function value of changes in constrained resources. c. amount by which the right hand side of the constraints can change and still the shadow price is accurate. d. impact on right hand sides of changes in constraint coefficients.
Answer:
The correct answer is OPTION D (impact on right hand sides of changes in constraint coefficients).
Explanation:
Solver is an excel program that can be used to solve systems of equations even solve for multiple equations, using a powerful iteration technique in a bid to get a closer approximation to the solution of a problem.
A sensitivity report is one of the three reports that can be generated using the solver which can solve for the effect of how changes in the constraints no matter how small could still affect the overall solution.
The objective function is a target cell.
The solver doesn't provide information on how the impact on the right-hand sides of changes in constraint coefficients as information showed is that as long as there is a positive less than or equal constraints, increasing the values of the right-hand side values of constraints would not change the optimal solution.
Larry Bar opened a frame shop and completed these transactions: Larry started the shop by investing $40,800 cash and equipment valued at $18,800 in exchange for common stock. Purchased $150 of office supplies on credit. Paid $2,000 cash for the receptionist's salary. Sold a custom frame service and collected $5,300 cash on the sale. Completed framing services and billed the client $280. What was the balance of the cash account after these transactions were posted
Answer:
$44,100
Explanation:
Open a Cash Account and find the Balance
Cash Account
Debit :
Capital $40,800
Sales $5,300
Credit :
Salary $2,000
Balance c/d $44,100
the balance of the cash account after these transactions were posted is $44,100
(Land’s End) Geoff Gullo owns a small firm that manufactures "Gullo Sunglasses." He has the opportunity to sell a particular seasonal model to Land’s End. Geoff offers Land’s End two purchasing options: ∙ Option 1. Geoff offers to set his price at $65 and agrees to credit Land’s End $53 for each unit Land’s End returns to Geoff at the end of the season (because those units did not sell). Since styles change each year, there is essentially no value in the returned merchandise. ∙ Option 2. Geoff offers a price of $55 for each unit, but returns are no longer accepted. In this case, Land’s End throws out unsold units at the end of the season. This season’s demand for this model will be normally distributed with mean of 200 and standard deviation of 125. Land’s End will sell those sunglasses for $100 each. Geoff ’s production cost is $25. a. How much would Land’s End buy if they chose option 1? [14.3] b. How much would Land’s End buy if they chose option 2? [14.3] c. Which option will Land’s End choose? [14.4] d. Suppose Land’s End chooses option 1 and orders 275 units. What is Geoff Gullo’s expected profit? [14.4]
Answer:
Answer is explained in the explanation section below.
Explanation:
a)
Answer-a with option-1
the land end sale price is $100, purchase cost is $65 and salvege valu is $53
So the underage cost = Cu = 100-65 = 35 and overage cost = Co = 65-53 = 12
the critical ratio = Cu/(Cu+Co) = 35/47 = 0.7422
From the standard normal distribution function The Z value at 0.7422 = 0.66
The optimal order quantity = 200 + 0.66 x 125 = 282.5
The optimal order quantity = 282.5
b)
Answer-b with option-1
the land end sale price is $100, purchase cost is $55 and salvage value is $0
So the underage cost = Cu = 100-55 = 45 and overage cost = Co = 55-0 = 55
the critical ratio = Cu/(Cu+Co) = 45/100 = 0.45
From the standard normal distribution function The Z value at 0.45 = -0.12
the optimal order quantity = 200 - 0.12 x 125
The optimal order quantity = 185
c)
We have to calculate the expected profit in each case to determine which option Lands Ends should choose.
With option-1 Geoff's sells 282.5 units at $65 for total revenue of 18363 and production cost of 282.5 = 7063
Geoff credits Lands ends for each returned sunglass so we need to evaluate how many sunglasses Land Ends return.
Expected lost sales = 125 x 0.1528 = 19.1
Expected sales = 200 - 19.1 = 180.9
expected left over inventory = 282.5 - 180.9 = 101.6
Expected profit = (100-65) x 180.9 - (65-53)x 101.6 = 5112
Expected profit = 5112
Similarly with option 2 the Expected profit = 4053
So option-1 is preferred.
d)
If the Land chooses option-1 and orders 275 units Then Geoff earn = 275 x $65 = $17875
and production cost = $25 x 275 = $6875
With order quantity 275 the z statistics = 0.6
and expected lost sales = 125 x 0.6 = 21.09
Expected left over inventory = 275-200+21.09 = 96.09
So the Geoff's buy back cost = 96.09 x 53 = $5093
and expected profit = $17875 - $5093 = $5907
expected profit = $5907
(A)The optimal order quantity = 282.5
(B) The optimal order quantity = 185
(C) Expected profit = 4053
(D) Expected profit = $5907
What is Optical order quantity?a) Answer-a with option-1
When the land end sale price is $100, the purchase cost is $65 and also the salvage value is $53
So the underage cost is = Cu = 100-65 = 35 and
overage cost is = Co = then is 65-53 = 12 the critical ratio = Cu/(Cu+Co) = 35/47 = 0.7422
From the quality Gaussian distribution function The Z value at 0.7422 is = 0.66
Then, The optimal order quantity is = 200 + 0.66 x 125 = 282.5
Thus, The optimal order quantity = 282.5
b) Answer-b with option-1
When the land end sale price is $100, the purchase cost is $55 and also the salvage value is $0
So the underage cost is = Cu = 100-55 = 45 and overage cost is = Co = 55-0 = 55
the critical ratio = Cu/(Cu + Co) = 45/100 = 0.45
From the quality Gaussian distribution function The Z value at 0.45 = -0.12
Then the optimal order quantity = 200 - 0.12 x 125
Thus, The optimal order quantity is = 185
c) Then We have to calculate the expected profit in each case to work out which option Lands Ends should choose.
With option-1 Geoff's sells 282.5 units at $65 for total revenue of 18363 and a cost of 282.5 = 7063
When Geoff credits Lands ends for every returned sunglass so we want to judge what number of sunglasses Land Ends returns.
Then the Expected lost sales is = 125 x 0.1528 = 19.1
After that Expected sales is = 200 - 19.1 = 180.9
Then expected left over inventory is = 282.5 - 180.9 = 101.6
After that Expected profit is = (100-65) x 180.9 - (65-53)x 101.6 = 5112
Thus, Expected profit is = 5112
Similarly, with option 2, the Expected profit is = 4053
So option-1 is preferred.
d) If the Land chooses option-1 and also orders 275 units Then Geoff earn = 275 x $65 = $17875 and also the cost is = $25 x 275 = $6875
With order quantity 275 the z statistics = 0.6 and also expected lost sales = 125 x 0.6 = 21.09
Then Expected left over inventory is = 275-200+21.09 = 96.09
So the Geoff's repurchase cost = 96.09 x 53 = $5093
and also expected profit is = $17875 - $5093 = $5907
Thus, Expected profit is = $5907
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Some recent financial statements for Smolira Golf Corp. follow.
SMOLIRA GOLF CORP.
2014 and 2015 Balance Sheets
Assets Liabilities and Owners’ Equity
2014 2015 2014 2015
Current assets Current liabilities
Cash $ 24,236 $26,000 Accounts payable $25,084 $29,000
Accounts receivable 14,348 17,100 Notes payable 19,000 12,700
Inventory 27,892 29,000 Other 13,471 18,300
Total $ 66,476 $72,100 Total $ 57,555 $60,000
Long-term debt $ 88,000 $99,000
Owners’ equity
Common stock and paid-in surplus $45,000 $45,000
Accumulated retained earnings 219,616 233,000
Fixed assets
Net plant and equipment $343,695 $364,900 Total $264,616 $278,000
Total assets 410,171 $437,00 Total liabilities and owners’ equity
$410,171 $437,000
SMOLIRA GOLF CORP.
2015 Income Statement
Sales $ 392,640
Cost of goods sold 257,000
Depreciation 48,800
Earnings before interest and taxes $86,840
Interest paid 16,200
Taxable income $70,640
Taxes (40%) 28,256
Net income $ 42,384
Dividends $ 29,000
Retained earnings 13,384
Find the following financial ratios for Smolira Golf Corp. (use year-end figures rather than average values where appropriate): (Enter your profitability ratio answers as a percent rounded to 2 decimal places, e.g., 32.16. Round the remaining answers to 2 decimal places, e.g., 32.16.)
Short-term solvency ratios: 2014 2015
a. Current ratio times times
b. Quick ratio times times
c. Cash ratio times times
Asset utilization ratios:
d. Total asset turnover times
e. Inventory turnover times
f. Receivables turnover times
Long-term solvency ratios: 2014 2015
g. Total debt ratio times times
h. Debt–equity ratio times times
i. Equity multiplier times times
j. Times interest earned times
k. Cash coverage ratio times
Profitability ratios:
I. Profit margin %
m. Return on assets %
n. Return on equity %
Answer:
Smolira Golf Corp.
Short-term solvency ratios: 2014 2015
a. Current ratio 1.15 times 1.20 times
b. Quick ratio 0.67 times 0.72 times
c. Cash ratio 0.42 times 0.43 times
Asset utilization ratios:
d. Total asset turnover times 0.90 times
e. Inventory turnover times 9.03 times
f. Receivables turnover times 24.97 times
Long-term solvency ratios: 2014 2015
g. Total debt ratio times times 0.35 times 0.36 times
h. Debt–equity ratio times times 0.55 times 0.57 times
i. Equity multiplier times times 0.65 times 0.64 times
j. Times interest earned times 5.36 times
k. Cash coverage ratio times 1.50 times
Profitability ratios:
I. Profit margin % = 10.79%
m. Return on assets % = 9.70%
n. Return on equity % = 15.25%
Explanation:
a) Data and Calculations:
SMOLIRA GOLF CORP.
2014 and 2015 Balance Sheets
Assets
2014 2015
Current assets
Cash $24,236 $26,000
Accounts receivable 14,348 17,100
Inventory 27,892 29,000
Total current assets $ 66,476 $72,100
Fixed assets
Net plant &
equipment $343,695 $364,900
Total assets 410,171 $437,000
Liabilities and equity
Current liabilities:
Accounts payable $25,084 $29,000
Notes payable 19,000 12,700
Other current liabilities 13,471 18,300
Total $ 57,555 $60,000
Long-term debt $ 88,000 $99,000
Total $145,555 $159,000
Owners’ equity:
Common stock and
paid-in surplus $45,000 $45,000
Accumulated
retained earnings 219,616 233,000
Total liabilities and
owners’ equity $410,171 $437,000
SMOLIRA GOLF CORP.
2015 Income Statement
Sales $ 392,640
Cost of goods sold 257,000
Depreciation 48,800
Earnings before
interest and taxes $86,840
Interest paid 16,200
Taxable income $70,640
Taxes (40%) 28,256
Net income $ 42,384
Dividends $ 29,000
Retained earnings 13,384
Short-term solvency ratios: 2014 2015
a. Current ratio times times $ 66,476/$ 57,555 $72,100/$60,000
1.15 times 1.20 times
Current assets/Current liabilities
b. Quick ratio times times $38,584/$57,555 $43,100/$60,000
0.67 times 0.72 times
= (Current assets- Inventory)/Current liabilities
c. Cash ratio times times $24,236/$57,5555 $26,000/$60,000
0.42 times 0.43 times
Cash ratio = Cash/Current liabilities
Asset utilization ratios:
d. Total asset turnover times = Sales/Total asset = $ 392,640/$437,000 = 0.90 times
e. Inventory turnover times = Cost of goods sold/Average Inventory = $257,000/$28,446 = 9.03 times
f. Receivables turnover times = Sales/Average Receivable = $392,640/$15,724 = 24.97 times
Long-term solvency ratios: 2014 2015
g. Total debt ratio times times = Total Debt/Total Assets
= $145,555/$410,171 $159,000/$437,000
= 0.35 times 0.36 times
h. Debt–equity ratio times times
= $145,555/$264,616 $159,000/$278,000
= 0.55 times 0.57 times
i. Equity multiplier times times
= $264,616/$410,171 $278,000/$437.000
= 0.65 times 0.64 times
= Equity/Assets
j. Times interest earned times $86,840/$16,200
= 5.36 times
= EBIT/Interest Expense
k. Cash coverage ratio times = $24,236/$16,200 = 1.50 times
Profitability ratios:
I. Profit margin % = Net income/Sales = $42,384/$392,640 * 100 = 10.79%
m. Return on assets % = Net income/Assets
= $42,384/$437,000 * 100 = 9.70%
n. Return on equity % = Net income/Equity
= $42,384/$278,000 * 100
= 15.25%
A person managing a dry-cleaning store for $30,000 per year decides to open a dry-cleaning store. The revenues of the store during the first year of operation are $100,000 and the expenses are $35,000 for salaries, $10,000 for supplies, $8,000 for rent, $2,000 for utilities, and $5,000 for interest on a bank loan. Calculate (a) the explicit costs, (b) the implicit costs, (c) the business profit, (d) the economic profit, and (e) indicate whether the person should open the dry-cleaning store.
Answer:
$60,000
$40,000
$30,000
$10,000
he can open the store
Explanation:
Explicit cost includes the amount expended in running the business. They include rent , salary and cost of raw materials
Explicit cost = $35,000 + $10,000 + $8,000 + $2,000 + $5,000 = $60,000
Implicit cost is the cost of the next best option forgone when one alternative is chosen over other alternatives. If he didn't open the dry cleaning stores he could be earning $30,000 as a manager. $30,000 is his implicit cost
Accounting profit or business profit = total revenue - explicit cost
$100,000 - $60,000 = $40,000
Economic profit = accounting profit - implicit cost
$40,000 - $30,000 = $10,000
Since his economic and accounting profit are positive, he can open the store
accrual basis financial statements every June 30 and December 31. On 1/1/2001 the company issued bonds to the public. The bonds are due at the end of 20 years, on 12/31/2020. The face value of the bonds is $100,000 and the annual coupon rate is 12%. Coupon payments are made to the bondholders semi-annually every June 30 and December 31, beginning 6/30/2001. The bonds were issued to yield 10% annual rate. You can use our present value tables presented in class, Tables 2 and 4. What is the book value of Bonds Payable on 1/1/2001
Answer:
$85,553
Explanation:
January 1, 2021
Dr Cash 114.963
Cr Bonds payable 100,000
Cr Premium on bonds payable 14,963
market price:
$100,000 / (1 + 5%)⁴⁰ = $14,205
$6,000 x 19.793 (PVIFA, 5%, 40 periods) = $100,758
market price = $114,963
amortization of bond premium = ($114,963 x 5%) - $6,000 = -$252
amortization of bond premium = ($114,711 x 5%) - $6,000 = -$264
carrying value = $100,000 - $14,447 = $85,553
an installment loan would most likely be issued by which of the following?
A) a bank
B) a car dealer
C) a mortgage broker
D) a furniture store
/Answer: A because you have to pay it back.
Explanation: