Answer: b. reissuing treasury stock
Explanation:
Investing Activities in the Cashflow Statement refer to transactions that have to do with the buying and selling of Capital Goods such as Fixed Assets. It also refers to investments in other company bonds and stock.
Financing has to do with how the firm finances it's operations. These include long term debt and stock related transactions.
When these transactions are non-cash, it means quite rightly that no cash was exchanged and instead something else for exchanged instead of cash. For example, A non-cash Investing and Financing activity would be the purchase of long-term assets by issuing bonds.
In this question, option B being the reissuance of Treasury Stock is not a non-cash transaction. Treasury Stock is the company's own stock that it required from the market. By reissuing it, they will be doing so with cash involved. That is, people will buy the reissued shares and pay cash for them thus making it a Cash Financing Activity.
On October 30, 2019, Sanchez Company acquired a piece of machinery and signed a 12-month note for $24,000. The face value of the note includes the price of the machinery and interest. The note is to be paid in four $6,000 quarterly installments. The value of the machinery is the present value of the four quarterly payments discounted at an annual interest rate of 16%. Required: 1. Prepare all the journal entries required to record the preceding information including the year-end adjusting entry and any payments. Present value techniques should be used. 2. Show how the preceding items would be reported on the December 31, 2019, balance sheet.
Answer:
the present value of the note payable:
PV = payment x {1 - [1 / (1 + r)ⁿ]} / r
payment = $6,000
r = 16% / 4 = 4%
n = 4
PV = $6,000 x {1 - [1 / (1 + 0.04)⁴]} / 0.04 = $21,779.37 ≈ $21,779
October 30, 2019, machinery purchased
Dr Machinery 21,779
Dr Discount on notes payable 2,221
Cr Notes payable 24,000
Using the straight amortization method, the interest expense will be $555.25 per payment.
December 31, 2019, accrued interest on notes payable
Dr Interest expense 370
Cr Interest payable 370
January 31, 2020
Dr Interest payable 370
Dr Interest expense 185.25
Dr Note payable 6,000
Cr Discount on notes payable 555.25
Cr Cash 6,000
April 30, 2020
Dr Interest expense 555.25
Dr Note payable 6,000
Cr Discount on notes payable 555.25
Cr Cash 6,000
July 31, 2020
Dr Interest expense 555.25
Dr Note payable 6,000
Cr Discount on notes payable 555.25
Cr Cash 6,000
October 31, 2020
Dr Interest expense 555.25
Dr Note payable 6,000
Cr Discount on notes payable 555.25
Cr Cash 6,000
On the December 31, 2019 balance sheet, the accounts should show:
Assets:
Machinery $21,779
Liabilities:
Note payable 24,000
Discount on notes payable ($2,221)
Interest payable $370
Retained earnings ($370)
Metlock Corporation enters into a 7-year lease of equipment on December 31, 2019, which requires 7 annual payments of $41,100 each, beginning December 31, 2019. In addition, Metlock guarantees the lessor a residual value of $18,400 at the end of the lease. However, Metlock believes it is probable that the expected residual value at the end of the lease term will be $9,200. The equipment has a useful life of 7 years. Prepare Metlocks' December 31, 2019, journal entries assuming the implicit rate of the lease is 10% and this is known to Metlock.
Answer:
Kindly check the attached picture
Sela traveled from her home in Flagstaff to San Francisco to seek specialized medical care. Because she was unable to travel alone, her father accompanied her. Total expensesincluded: Hotel room en route ($150 times× 2 rooms times× 3 nights):$900 Mileage, 1,000 miles Doctors bills in San Francisco: 1,600 The total medical expenses deductible before the 10% limitation are...
Answer:
The total medical expenses deductible before the 10% limitation is 2090
Explanation:
Solution
Recall that:
The Total expenses included is stated as follows:
Th Hotel room is = $150 * two rooms * three nights
Mileage of = $900,
Miles = 1000
Doctor's bill ins an Francisco = 1,600
Now,
To next step is to find the total medical expenses deductible before the 10% limitation is given as follows:
Doctor's bill = 1,600
The total expenses i hotel room is calculated as :150 * 1 *3 = 450
So,
The total = 1600 + 450 = 2050
It is also important to know that only 10% of the expense stay for the accompanied person is permitted
Therefore,
450*10% =45
Total 2050+45 = 2090
Monique is the operations manager of a chain of hair salons in upscale urban neighborhoods. Customers in these neighborhoods expect high quality services and products, and Monique is struggling to use the salon's resources efficiently and effectively to provide the level of quality the areas' customers demand. What will most likely happen if Monique can't find a way to meet customers' demands for quality
Multiple Choice
A. The hair salons will be forced to move to a less demanding neighborhood.
B. The hair salons will be taken over by competitors in the area.
C. The hair salons will stay in business, and customers will adapt to their services and products.
D. The hair salons will be converted into a different type of business that can succeed in this area.
E. The hair salons will go out of business.
Answer:
Option B. The hair salons will be taken over by competitors in area.
Explanation:
The reason is that when the quality of the product that the seller promised is not delivered the customer satisfaction level drops significantly and thus moves towards the other seller which results in the loss of the customer. So this means if the business is not delivering the desired quality then it will keep loosing business customers because the competitor will take over the lost business.
Suppose you were going to save $1,000 per year for three years at a 10% interest rate compounded annually, with the first investment occurring today. What would be the future value of this investment
Answer:
$13,310
Explanation:
The investment would be 100% = $1000 * 100% / 10% = $10,000
So this is the amount that would be deposited today to earn $1000 each year which is 10% of the amount deposited today.
The Future Value is given as under:
Future Value = Present Value * (1 + r)^n
Here,
Present value is $10,000
r is 10%
and n is 3 years
So, by putting values we have:
Future Value = $10,000 * (1 + 10%)^3 = $13,310
Selected operating data for two divisions of Outback Brewing, Ltd., of Australia are given below: Division Queensland New South Wales Sales $ 2,275,000 $ 2,781,000 Average operating assets $ 650,000 $ 515,000 Net operating income $ 232,050 $ 200,232 Property, plant, and equipment (net) $ 265,000 $ 215,000 Required: 1. Compute the rate of return for each division using the return on investment (ROI) formula stated in terms of margin and turnover. 2. Which divisional manager seems to be doing the better job
Answer:
Queensland division has ROI of 35.7%
New South Wales division has ROI of 38.88%
The divisional manager at New South Sales division has a higher ROI and seems to doing better job
Explanation:
The return on investment stated in terms of margin and turnover=net operating income/sales*sales/average operating assets
For Queensland division return on investment is computed thus:
net operating income is $232,050
sales is $2,275,000
average operating assets is $650,000
return on investment=$232,050/$2,275,000*$2,275,000/$650,000=35.70%
For New South Wales division return on investment is computed thus:
net operating income is $200,232
sales is $2,781,000
average operating assets is $515,000
return on investment=$200,232/$2,781,000*$2,781,000/$515,000=38.88%
Comparing costs under ABC to traditional plantwide overhead rate LO P1, P3 Smythe Co. makes furniture. The following data are taken from its production plans for the year. Direct labor costs $ 5,870,000 Hazardous waste disposal costs 630,000 Chairs Tables Expected production 211,000 units 17,000 units Direct labor hours required 254,000 DLH 16,400 DLH Hazardous waste disposed of 200 pounds 800 pounds
Determine the hazardous waste disposal cost per unit for chairs and for tables if costs are assigned using a single plantwide overhead rate based on direct labor hours.
Answer:
Chairs= $2.805
Tables= $2.25
Explanation:
Giving the following information:
Hazardous waste disposal costs= $630,000
Production:
Chairs= 211,000
Tables= 17,000 units
Direct labor hours required:
Chairs= 254,000 DLH
Tables= 16,400 DLH
Total DLH= 270,400
First, we need to calculate the estimated overhead rate:
Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Estimated manufacturing overhead rate= 630,000/ 270,400
Estimated manufacturing overhead rate= $2.33 per direct labor hour
Now, we can allocate overhead to each product line:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Chairs= 2.33*254,000= $591,820
Tables= 2.33*16,400= $38,212
Finally overhead per unit:
Chairs= 591,820/211,000= $2.805
Tables= 38,212/17,000= $2.25
A company estimates that the revenue (in dollars) from the sale of x doghouses is given by R(x)=14,000ln(0.01x+1). Use the differential to approximate the change in revenue fro the sale of one more doghouse if 110 doghouses have already been sold.
Answer: The change in revenue for the sale of 1 more doghouse $ 66.67 dollars
Explanation: Differential is a function that can be used to approximate function value with a great degree of accuracy. This is done by the following.
Mathematical definition of derivative: f'(x) = lim f(x+Δx) - f(x)/Δx.
If Δx is very small:
f'(x) . Δx ≅ f(x+Δx) - f(x)
Knowing that Δy ≅ f(x+Δx) - f(x) and the diferential of variable x can be written by dx as the variable y can be dy:
dy = f'(x) dx
which means that the differential dy is approximately equal to the change Δy, if Δx is very small.
For the question, R(x) = y(x) = 14,000ln(0.01x+1)
f'(x) = [tex]\frac{d[14,000.ln(0.01x+1)]}{dx}[/tex]
Using the chain rule, the derivative will be:
f'(x) = 14,000.[tex]\frac{0.01}{0.01x+1}[/tex]
dy = 14,000.[tex]\frac{0.01}{0.01x+1}[/tex].dx
dx is the change in x. For the question, the change is 1 (1 more doghouse) and x is 110:
dy = 14,000[tex]\frac{0.01}{0.01.110+1}.1[/tex]
dy = [tex]\frac{140}{2.1}[/tex]
dy = 66.67
The change in revenue is $66.67 dollars.
PLATO: Calc Economic
Country A is a main producer of agricultural goods. In the past three years, farmers in country A have seen their sales drop because consumers have begun to buy cheaper imported produce from country B. Not wanting the income of its farmers to drop, the government of country A imposes a tax on all agricultural imports from country B so that those goods are more expensive, and therefore less attractive, to consumers. The farmers in country A see their incomes begin to rise. Two months later, country B retaliates by levying a tax on all imports from country A. Because the manufacturing firms in country A lose business from the country they export to the most, they are forced to close.
What impact did the tariff that country A imposed on country B have?
Answer:
It created a trade barrier
Explanation:
trade barrier are government policies that restrict internatinoal trade.
The policy of country A on goods imported from country B created a barrier that affected country A's industries.
Answer:
Country B imposed a tariff on country A’s goods to retaliate for country A’s tariffs. So, while incomes increased for farmers in country A, the country’s manufacturers lost a substantial amount of export business. The manufacturers closed, and their employees lost their jobs. Ultimately, country A’s regulations had an unfavorable effect on the country’s own economy. Additionally, the tariff may have harmed country A’s reputation as a trade partner and affected its future trade prospects.
Explanation:
PLATO WORD for WORD answer
Bobbi and Stuart are partners. The partnership capital of Bobbi is $41,400 and that of Stuart is $74,700. Bobbi sells his interest in the partnership to John for $63,900. The journal entry to record the admission of John as a new partner would include a credit to:_________.
a. Stuart's capital account for $58,050
b. John's capital account for $63,900
c. John's capital account for $41,400
d. John's capital account for $41,400 and a credit to Stuart's capital account for $74,700
Answer:
c. John's capital account for $41,400
Explanation:
Based on this information it can be said that in this scenario the journal entry to record the admission of John as a new partner would include a credit to John's capital account for $41,400. This is mainly because even though Bobbi sold his interest for $63,900 his actual interest capital in the partnership was that of $41,400 .... meaning that John now holds a partnership capital of $41,400 and the Bobbi profited $22,500
From its inception through the year of 2017, First Mart, Inc. was profitable and made strong dividend payments each year. In the year 2018, First Mart had major losses and paid no dividends. In 2019, the company started making large profits again, and they were able to pay dividends to all shareholders—both common and preferred. There are 1,700 shares of cumulative, 14% preferred stock outstanding. The preferred stock has a par value of $100.00. What is the total amount of dividends that should be paid to the preferred stockholders in December, 2019?
Answer:
Total dividend paid in 2019 =$47,600
Explanation:
The cumulative preference shares entire the investors to fixed amount of dividend. Where dividends are not paid during an accounting period, the unpaid dividend are carried forward and paid in arrears when profits become available.
Dividend = Dividend rate× nominal value of stock
Dividend in 2018 (unpaid) = 14%× 1,700 × 100 =23,800
Dividend in 2019 = 14%× 1,700 × 100 =23,800
Total dividend paid in 2019 = Unpaid dividend of 2018 + Dividend payable in 2019
= 23,800 + 23,800= $47,600
Total dividend paid in 2019 =$47,600
Your boss makes an intentional effort to understand the emotion or mood of the office at all times. Your boss uses that information when assigning team members to specific projects or when communicating with the team as a whole or as individuals. These behaviors are examples of ______.
Answer:
The correct answer is: emotional intelligence.
Explanation:
To begin with, the concept of "emotional intelligence", in the field of business, refers to the capability of individuals to recognize their own emotions and also the ones of the others around him, in order to use that information with the purpose of guiding or leading the thinking and behavior of the group or team in order to establish better results when working together as a whole. That is why, when your boss is making an intentional effort to understand the emotions of all the office and use that information to assign the teams, then he is using the emotional intelligence to work better.
The computer workstation furniture manufacturing that Santana Rey started in January is progressing well. As of the end of June, Business Solutions's job cost sheets show the following total costs accumulated on three furniture jobs.
Job 602 Job 603 Job 604
Direct materials $ 1,500 $ 3,700 $ 2,800
Direct labor 900 1,380 1,800
Overhead 360 552 720
Job 602 was started in production in May, and these costs were assigned to it in May: direct materials, $600; direct labor, $250; and overhead, $100. Jobs 603 and 604 were started in June. Overhead cost is applied with a predetermined rate based on direct labor costs. Jobs 602 and 603 are finished in June, and Job 604 is expected to be finished in July. No raw materials are used indirectly in June. (Assume this company’s predetermined overhead rate did not change over these months.)
Required:1. What is the cost of the raw materials used in June for each of the three jobs and in total?2. How much total direct labor cost is incurred in June?3. What predetermined overhead rate is used in June?4. How much cost is transferred to finished goods inventory in June? (Leave no cell blank enter "0" wherever required.)
Answer:
Results are below.
Explanation:
Giving the following information:
Job 602 Job 603 Job 604
Direct materials= $ 1,500 $ 3,700 $ 2,800
Direct labor= 900 1,380 1,800
Overhead= 360 552 720
Job 602:
direct materials= $600
direct labor= $250
overhead= $100.
1) Raw materials:
Job 602= 1,500 - 600= $900
Job 603= 3,700
Job 604= 2,800
Total= $7,400
2) Direct labor:
Job 602= 900 - 250= $650
Job 603= 1,380
Job 604= 1,800
Total= $3,830
3) Overhead:
Job 602= 350 - 100= 250
Job 603= 552
Job 604= 720
Total= $1,522
4) The cost transferred to finished goods is the total cost of jobs 602 and 603.
Total cost 602= 1,500 + 900 + 360= 2,760
Total cost 603= 3,700 + 1,380 + 552= $5,632
Total cost transferred to finished goods= 2,760 + 5,632= $8,392
Direct Labor Variances for a Service Company Hit-n-Run Food Trucks, Inc. owns and operates food trucks (mobile kitchens) throughout the west coast. The company's employees have varying wage levels depending on their experience and length of time with the company. Employees work 8-hour shifts and are assigned to a truck each day based on labor needs to support the daily menu. One of its trucks, Jose O'Brien's Mobile Fiesta, specializes in Irish-Mexican fusion cuisine. The truck offers a single menu item that changes daily. On November 11, the truck prepared 200 of its most popular item, the Irish Breakfast Enchilada. The following data are available for that day: Quantity of direct labor used 24 hrs. (3 employees, working 8 hour shifts) Actual rate for direct labor $15.00 per hr. Standard direct labor per meal 0.1 hr. Standard rate for direct labor $15.50 per hr. a. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Direct Labor Rate Variance $ Direct Labor Time Variance $ Total Direct Labor Cost Variance $ b. Discuss what might have caused these variances.
Answer:
Explanation:
The solution is given below check the picture attached for better explanation
Direct labour rate variance:
=(Actual rate per hour-standard rate per hour)×actual hours
=($15-$15.50)×24 hours
=$12 F
2.
Direct labourTime variance:
=(Actual direct labour hour-standard direct labour hours)×standard rate per hour
={24-(200×.10)}×15.50
=$62 U
3. Total direct labour cost variance=direct labour rate variance+direct labour time variance
=310-360
=$50 U
44. The most important type of coverage is
a. Uninsured motorist
b. Medical payments
c. Collision
d. Liability insurance
Answer:
According to me, the correct answer can be d. Liability insurance.
Bailey Corporation, prepares the following adjustments required at the end of the month on July 31: Before these adjustments, Bailey had assets of $70,000, Liabilities of $50,000 and Stockholders’ equity of $20,000. Here are the adjustments made: a. Received a $568 utility bill for electricity usage in July to be paid in August. b. Owed wages to 4 employees who worked four days at $103 each per day at the end of July. The company will pay employees at the end of the first week of August. c. On July 1, loaned money to an employee who agreed to repay the loan in one year along with $2,400 for one full year of interest. No interest has been recorded yet. After the adjustments stockholders’ equity on 7/31 will be
Answer:
After the adjustments stockholders’ equity on 7/31 will be $20,184.
Explanation:
Journal Entries to Show the adjustments are as follows :
a.
Utility Expenses $568 (debit)
Accounts Payable $568 (credit)
b.
Wages Expense $1,648 (debit)
Wages Payable $1,648 (credit)
c.
Loan Receivable $2,400 (debit)
Interest Income $2,400 (credit)
To Determine Effect on Equity use the Accounting Equation : Assets = Equity + Liability.
Therefore, Equity = Assets - Liability
Effect on Assets = $70,000 + $2,400 = $72,400
Effect on Liabilities = $50,000 + $568 + $1,648 = ($52,216)
Effect on Equity (Total) = $20,184
Conclusion :
Therefore, After the adjustments stockholders’ equity on 7/31 will be $20,184.
Olympia Marketing has instituted new policies around misappropriation of assets, conflicts of interests, and kickbacks. Also with the local elections just around the corner, management sent out reminders about political contributions and confidentiality of company information. All of these policies can be found in Olympia Marketing's:________.
a. employee handbook
b. policies and procedures manual
c. moral rights approach
d. code of ethics.
e. value system.
Stoneheart Group is expected to pay a dividend of $3.17 next year. The company's dividend growth rate is expected to be 3.9 percent indefinitely and investors require a return of 11.7 percent on the company's stock. What is the stock price?
Answer:
The price of the stock= 40.64
Explanation:
According to the dividend growth model, the price of a stock is the present value of expected dividend discounted at the required rate of return.
This is done as follows:
Price of a stock = D×(1+r)/(r-g)
D(1+g) - Dividend for next year = 3.17
g- growth rate - 3.9%
r- required rate of return - 11.7%
P = 3.17/(0.117- 0.039)=40.641
The price of the stock= 40.64
Thomas Company has decided to purchase a company vehicle. The accountant was given all of purchase details. Which should be used to record the vehicle in the accounting records? The price negotiated with the dealer. The manufacturer’s suggested retail price (MSRP). The amount of the loan with the bank. The average selling price of similar vehicles in the area.
Answer:
The price negotiated with the dealer.
Explanation:
Since in the question it is mentioned that the Thomas company decided to purchase a company vehicle. And the accountant provided all the purchase details.
So for recording the vehicle in the accounting records the price negotiated with the dealer is used as in the accounting, only numbers are recorded which are based on the type of the transactions.
The purchase details includes color of a vehicle, price, mileage, capacity, etc
Therefore for accounting purpose, we only considered the price and the same is to be considered.
Fund to Retire Bonds At the beginning of 2019, Shanklin Company issued 10-year bonds with a face value of $1,000,000 due on December 31, 2028. Shanklin wants to accumulate a fund to retire these bonds at maturity by making annual deposits beginning on December 31, 2019. Required: How much must Shanklin deposit each year, assuming that the fund will earn 12% interest a year compounded annually
Answer:
$56,984
Explanation:
We can find the Annuity value by using the annuity formula which is as under:
Future Value = Annuity Value * Annuity Factor
Here
Future Value given is $1,000,000
Annuity Factor at 12% for 10 year bond = [1 - (1 + 12%)^10] / 12% = 17.548735
By putting values in the formula given above, we have:
$1,000,000 / 17.548735 = Annuity Value
Annuity Value = $56,984
Data centers are built upon ------------------ commodity hardware and designed with ------------------ architectures A. standardized , technical B. standardized, non standard C. techncal , modular D. standardized , modular
Answer:
Option D: Standardized, modular
Explanation:
Data center in simple terms is said to be a part of a building set aside for a particular purpose (designated space within a building) that is meant or use for holding or housing computers and also it related parts or components.
A modular data center has easy way of deploying data center capacity as it can be placed anywhere data capacity is needed.standardization in data center helps equipment providers and data center builders to reduce timelines of deploymentr as standardized designs gives a lot of options that helps with countless combinations and permutations.
Answer:
I am 100% that the answer is D) standardized, modular
Explanation:
1.) Data centers are built upon standardized commodity hardware and designed with modular architectures
On January 1, 2020, Swifty Corporation granted an employee an option to purchase 15000 shares of Swifty's $5 par value common stock at $18 per share. The Black-Scholes option pricing model determines total compensation expense to be $341000. The option became exercisable on December 31, 2021, after the employee completed two years of service. The market prices of Swifty's stock were as follows: January 1, 2020 $30 December 31, 2021 50 For 2021, should recognize compensation expense under the fair value method of
Answer:
For 2021, should recognize compensation expense under the fair value method of $170,500
Explanation:
According to the given data we have the following:
option pricing model determines total compensation expense to be $341,000
Also, The option became exercisable on December 31, 2021, after the employee completed two years of service.
Therefore, in order to calculate the amount should recognize compensation expense we would have to make the following calculation:
amount should recognize compensation expense=$341,000/2
amount should recognize compensation expense=$170,500
For 2021, should recognize compensation expense under the fair value method of $170,500
A defining characteristic of the subscription-based business model is that
a. the user pays for access to a product or service whether he or she uses it during the payment term or not.
b. basic features of a product or service are provided free of charge, but the user must pay for premium services such as advanced features or add-ons.
c. initial product is often sold at a loss or given away for free in order to drive demand for complementary goods.
d. user pays for only the services he or she consumes.
Answer:
a. The user pays for access to a product or service whether he or she uses it during the payment term or not.
Explanation:
Obviously, a defining characteristic of the subscription-based business such as TV subscription require the customers to subscribe regardless of how much or how less the customers will watch it. If the customers did not watch the TV, it does not bother the producer as a sales has been made on the business model.
This business model requires regular to regular payment mode to renew the existing subscription on the business as well.
Answer: A.
The user pays for access to a product or service whether he or she uses it during the payment term or not.
Explanation: the subscription-based business model is that the user must pay for the services, even if the user did not make use of that service, for example, if a user subscribe for a television cable, and he/she traveled and was not around to watch the TV, the cable has been paid for and he was not chanced to make use of it.
Industries that use this model presently are cable television, cellular service providers, satellite radio, Internet service providers, and health clubs.
Janus Coat Company purchased a delivery truck on June 1 for $30,000, paying $10,000 cash and signing a 6%, month note for the remaining balance. The truck expected to depreciate $6,000 each year Janus Coat Company prepares monthly financial statements.
Account Tittles and Explanation
Answer:
Find below complete question:
Janus Coat Company purchased a delivery truck on June 1 for $30,000, paying $10,000 cash and signing a 6%, 2-month note for the remaining balance. The truck is expected to depreciate $6,000 each year. Janus Coat Company prepares monthly financial statements. Instructions:
(a) Prepare the general journal entry to record the acquisition of the delivery truck on June 1st. (b) Prepare any adjusting journal entries that should be made on June 30th. (c) Show how the delivery truck will be reflected on Janus Coat Company's balance sheet on June 30th.
Dr Truck $30,000
Cr Cash $10,000
Cr notes payable $20,000
Dr depreciation expense $500
Cr accumulated depreciation $500
Dr interest expense $100
Cr interest payable $100
Balance sheet extract on 30th June"
Delivery truck $30,000
Accumulated depreciation ($500)
Net book value $29,500
Explanation:
The journal entry to record the purchase of the truck would have $30,000 debited to truck account while cash and notes payable are credited with $10,000 and $20,000 respectively.
On 30 June depreciation expense =$6000/12=$500
Interest of one month on the note payable on 30th June=$20,000*6%*1/12=$100
Assume that all investors have the same information and care only about expected return and volatility. If new information arrives about one stock, can this information affect the price and return of other stocks? If so, explain why? If new information arrives about one stock, can this information affect the price and return of other stocks?
Answer:
Yes
Explanation:
Yes, because with the existence of the new information, there would be changes in attractiveness of the stock. If there are no changes in other stock prices, it, would change the expected return on this stock. If expected return was to go up, then investors would be interested in this stock, implying they would not be holding the market portfolio.
New information regarding stock attracts investors, leading to shift in portfolio of investor. With greater demand for the particular stock, revenues/prices of other stock declines. This is because, investor becomes more attracted to buying that particular stock and other stocks are sold off in the market.
A stock’s price fluctuations are approximately normally distributed with a mean of $29.51 and a standard deviation of $3.87. You decide to sell whenever the price reaches its highest 10% of values. What is the highest value you would still hold the stock?
Answer:
$34.46
Explanation:
In this Question there is Highest value of 10% and the probability of 90%.
we will use following formula to calculate the highest value of the stock
z value = ( x - mean ) / Standard deviation
where
x = the highest value
z score value at 10% = 1.28
Placing value in the formula
1.28 = ( x - $29.51 ) / $3.87
1.28 x $3.87 = x - $29.51
$4.9536 = x - $29.51
x = $4.9536 + $29.51
x = 34.4636
Novak Corp. is authorized to issue both preferred and common stock. The par value of the preferred is $50. During the first year of operations, the company had the following events and transactions pertaining to its preferred stock. Feb. 1 Issued 47,000 shares for cash at $52 per share. July 1 Issued 62,500 shares for cash at $56 per share. Journalize the transactions.
Answer:
Feb 1=> Cash ( debit) = 2,444,000.
Prefered stock (credit) = 2,350,000.
Paid in capital in excess of par value-preferred stock(credit) = 94000.
July 1=> Cash (debit) = 3,500,000.
Prefered stock (credit) = 3,125,000.
Paid in capital in excess of par value-preferred stock(credit) = 375000.
Explanation:
(A). On FEB. 1, the accounts and Explanation is given below:
Cash ( debit) = 2,444,000 {that is from; 47,000 × $52}.
Prefered stock (credit) = 2,350,000 { that is from; 47,000 × $50}.
Paid in capital in excess of par value-preferred stock(credit) = 2,444,000 - 2,350,000 = 94,000.
(B). On JULY 1, the accounts and Explanation is given below;
"July 1 Issued 62,500 shares for cash at $56 per share."
=> Cash (debit) = 62500 × 56 = 3,500,000.
Prefered stock (credit) = 3,125,000 { that is from; 62,500 × $50}.
Paid in capital in excess of par value-preferred stock(credit) = 3,500,000 - 3,125,000 = 375,000.
Answer:
Dr cash $2,444,000
Cr preferred stock $2,350,000
Cr paid-in capital in excess of par-preferred stock $94,000
Dr cash $3,500,000
Cr preferred stock $3,125,000
Cr paid-in capital in excess of par-preferred stock $375,000
Explanation:
The cash proceeds received from the issuance of preferred stock on February 1 is $ 2,444,000.00 (47,000*$52)out of which $2,350,000 ($50*47000) is credited to preferred stock and the balance of $94,000($2*47000) is credited to paid-in capital in excess of par-preferred stock
The cash proceeds received from the issuance of preferred stock on July 1 is $ 3,500,000 (62500*$56)out of which $ 3,125,000.00 ($50*62500) is credited to preferred stock and the balance of $375,000($6*62,500) is credited to paid-in capital in excess of par-preferred stock
Isabel, a calendar-year taxpayer, uses the cash method of accounting for her sole proprietorship. In late December she received a $20,000 bill from her accountant for consulting services related to her small business. Isabel can pay the $20,000 bill anytime before January 30 of next year without penalty. Assume her marginal tax rate is 37 percent this year and next year, and that she can earn an after-tax rate of return of 9 percent on her investments. When should she pay the $20,000 bill this year or next?
Answer: She should pay in December
Explanation:
Assuming she pays in December, she can claim a 37% tax saving as it is an Expense and she will therefore pay the following Net of Tax,
= $20,000 * ( 1 - tax rate)
= 20,000 * ( 1 - 0.37)
= 20,000 * 0.63
= $12,600
Her total bill in December would be $12,600.
If she pays in January however then she would have lost 9% on the tax saving. Accounting for this would be,
The tax saving is
= $20,000 * 0.37
= $7,400
Discounting it to present day will be,
= 7,400 / (1 + r)
= 7,400 / 1 .09
= $6,788.99
Meaning that the amount she will effectively pay in January is,
= $20,000 - 6,788.99
= $13,211.01
Paying in December therefore saves her more.
As an investor you want to choose between two countries-Japan and South Korea. Suppose Japan's nominal interest rate is 12 percent and inflation rate is 7 percent, while South Korea's is 7 percent and 3 percent respectively. Where would you invest and why?
Answer:
South Korea
Explanation:
That is because south korea has low inflation rate.
A $38,000 coil winding and unwinding machine is estimated to provide additional value to production by $15 per unit. When the machine is operated at 58 units per hour, it needs to be cooled down after 4 hours of operation and receive minor maintenance for 15 minutes. When the machine is operated at 118 units per hour, it needs to be cooled down after 5 hours of operation and receive minor maintenance for 30 minutes. The production line runs 8 hours per day. If each maintenance check costs $625 and the machine has a useful life of 80,000 hours of operations, at what speed should the machine should be operated
Answer: 118 units per hour
Explanation:
At 58 units per hour:
The cycle time = 4 hours + 0.25 hours
= 4.25 hours
The cycle per day = 8/4.25 = 1.88 cycle
The value added per day will be:
= 1.88 × 4 × 58 × 15
= $6542.4
The cost of maintenance per day will be: = 1.88 × $625 = $1175
The cost of operating the machine per day will be:
= $38,000/80,000 × 4 × 1.88
= $3.57
The net increase in the value per day will be:
= $6542.4 - $1175 - $3.57
= $5363.83
At 118 units per hour:
The cycle time = 5 hours + 0.5 hours
= 5.5 hours
The cycle per day = 8/5.5 = 1.45 cycle
The value added per day will be:
= 1.45 × 5 × 118 × 15
= $12832.5
The cost of maintenance per day will be: = 1.45 × $625 = $906.25
The cost of operating the machine per day will be:
= $38,000/80,000 × 5 × 1.45
= $3.44
The net increase in the value per day will be:
= $128322.5 - $906.25 - $3.44
= $11922.81
The machine should be operated at 118 units per hour because it gives a higher value.