Answer:
(a) Purchase of equipment: investing; it is an outflow.
(b) Redemption of bonds payable: financing; it is an outflow.
(c) Sale of building: investing; it is an inflow.
(d) Depreciation: operating - add to net income.
(e) Exchange of equipment for furniture: significant noncash investing and financing activities.
(f) Issuance of capital stock: financing; it is an outflow.
(g) Amortization of intangible assets: operating - add to net income.
(h) Purchase of treasury stock: financing; it is an outflow.
(i) Issuance of bonds for land: significant noncash investing and financing activities.
(j) Payment of dividends: financing; it is an outflow.
(k) Increase in interest receivable on notes receivable: operating - deduct from net income.
(l) Pension expense exceeds amount funded: operating - add to net income.
Explanation:
A financial statement in accounting are written reports that measures an organization's financial performance, strength and liquidity over a specific accounting period. Financial performance is a summary of how an organization incurs both revenues and expenses with respect to its operating and non-operating activities.
The indirect method of cash-flow statements, adjusts net income for activities or items that affects reported net income or loss rather than cash.
Becky Knauer recently resigned from her position as controller for Shamalay Automotive, a small, struggling foreign car dealer in Upper Saddle River, New Jersey. Becky has just started a new job as the controller for Mueller Imports, a much larger dealer for the same car manufacturer. Demand for this particular make of car is exploding, and the manufacturer cannot produce enough to satisfy demand. The manufacturer’s regional sales managers are each given a certain number of cars. Each sales manager then decides how to divide the cars among the independently owned dealerships in the region. Because of the high demand for these cars, dealerships all want to receive as many cars as they can from the regional sales manager.
Becky’s former employer, Shamalay Automotive, receives only about 25 cars each month. Consequently, Shamalay is not very profitable.
Becky is surprised to learn that her new employer, Mueller Imports, receives more than 200 cars each month. Becky soon gets another surprise. Every couple of months, a local jeweler bills the dealer $5,000 for "miscellaneous services." Franz Mueller, the owner of the dealership, personally approves payment of these invoices, noting that each invoice is a "selling expense." From casual conversations with a salesperson, Becky learns that Mueller frequently gives Rolex watches to the manufacturer’s regional sales manager and other sales executives. Before talking to anyone about this, Becky decides to work through her ethical dilemma. Put yourself in Becky’s place.
Requirements
1. What is the ethical issue?
2. What are your options?
3. What are the possible consequences?
4. What should you do?
Answer:
1. The ethical issue here is that Becky Knauer's new boss usually bribes the sales manager of a car dealership to get more quota of cars. He is doing this because the car is in high demand. The higher his quota, the higher the number of cars. The higher the number of cars, the more of them he can sell. The more he can sell, the higher the profits.
Here is the dilemma.
First, the action of Becky's boss is wrong, but it is also helping to keep the business afloat thus translating to securing her job and probably sustaining the pay she is receiving. We know this because Becky's former employer who receives just 25 cars a month is not very profitable.
Becky as the Controller, however, is in charge of Compliance. The actions of her boss are unethical. She has to flag such issues and report to him.
Franz is the owner of the dealership and is on the top of the 'food chain'. There is no one else within the organisational structure to report the matter to. He is supposed to lead by example. He, as the owner of the organisation, however, is leading with a bad example because other sales personnel know about these shady transactions.
2. Becky's options are as follows:
A. If she is too scared to confront her boss, she can decide to resign. She would have lost her job. There is no guarantee she will get another and the unethical practices will continue.
B. She can raise the issue with her boss and point out the dangers of continuing in such practice. By doing this, she is ruling out the possibility that he somehow is unaware of the dangers of his actions. In raising the matter with her boss, she must do this in black and white.
The above decision can go either left or right.
Right means that her boss comes to understand the import of his actions and makes amends. Left means, he gets jittery and fires her.
3. As stated above, Franz may fire Becky if she flags his actions.
If this happens, she can take the matter to the State of New Jersy Motor Commission and possibly sue Franz for wrongful dismissal.
Cheers!
"analytic solver" ADC also is concerned about cash flow in years 2, 3, 4, and 5. Use Analytic Solver to estimate the distribution of the minimum annual operating profit (undiscounted) earned in any of the four years. What is the mean value of the minimum annual operating profit over the four years
Answer:
is there an image that shows the amount of $
Explanation:
can't solve without knowing the amount sorry
Belden, Inc. acquires 30 percent of the outstanding voting shares of Sheffield, Inc. on January 1, 2017, for $312,000, which gives Belden the ability to significantly influence Sheffield. Sheffield has a net book value of $800,000 at January 1, 2017. Sheffield's asset and liability accounts showed carrying amounts considered equal to fair values except for a copyright whose value accounted for Belden's excess cost over book value in its 30 percent purchase. The copyright had a remaining life of 16 years at January 1, 2017. No goodwill resulted from Belden's share purchase. Sheffield reported net income of $180,000 in 2017 and $230,000 of net income during 2018. Dividends of $70,000 and $80,000 are declared and paid in 2017 and 2018, respectively. Belden uses the equity method. On its 2018 comparative income statements, how much income would Belden report for 2017 and 2018 in connection with the company's investment in Sheffield
Answer:
how much income would Belden report for 2017 and 2018 in connection with the company's investment in Sheffield
2017: $54,000
2018: $69,000
total $123,000
Explanation:
the journal entries used to record the investment in Sheffield Inc. are:
January 1, 2017
Dr Investment in Sheffield Inc. 312,000
Cr Cash 312,000
the adjustments entries necessary for 2017 are:
December 31, 2017, dividends are distributed
Dr Cash 21,000 (= $70,000 x 30%)
Cr Investment in Sheffield Inc. 21,000
December 31, 2017, net income is reported
Dr Investment in Sheffield Inc. 54,000 (= $180,000 x 30%)
Cr Revenue from investment in Sheffield Inc. 54,000
the adjustments entries necessary for 2018 are:
December 31, 2018, dividends are distributed
Dr Cash 24,000 (= $80,000 x 30%)
Cr Investment in Sheffield Inc. 24,000
December 31, 2018, net income is reported
Dr Investment in Sheffield Inc. 69,000 (= $230,000 x 30%)
Cr Revenue from investment in Sheffield Inc. 69,000
Operating expenses other than depreciation for the year were $300,000. Accrued expenses decreased by $30,000 during the year. Cash payments for operating expenses to be reported on the cash flow statement using the direct method would be
Answer: $330,000
Explanation:
Using the Direct Cashflow statement the expenses minus the Depreciation is added to a reduction in the Accrued Expenses to give the amount paid.
Therefore,
= 300,000 + 30,000
= $330,000
The rationale behind this is that Operating Expenses are paid for by cash and so reduce the cash balance. Depreciation on the other hand, even though it is recognised as an expense, it is not a cash expense because the company doesn't give cash to the equipment being depreciated, the depreciation is just recorded and it does not reduce the cash balance. Operating Expenses like electricity reduce the cash balance because they are paid for.
Accrued Expenses are a liability and when a liability decreases that means that the company has used some cash to pay it off. This is a cash payment which falls under Operating Expenses because they were expenses owed and now they have been paid for.
On January 1, 2020, Oriole Company had Accounts Receivable $137,400, Notes Receivable $24,000, and Allowance for Doubtful Accounts $12,200. The note receivable is from Willingham Company. It is a 4-month, 9% note dated December 31, 2019. Oriole Company prepares financial statements annually at December 31. During the year, the following selected transactions occurred.
Jan. 5 Sold $20,000 of merchandise to Sheldon Company, terms n/15.
20 Accepted Sheldon Company’s $20,000, 3-month, 8% note for balance due.
Feb. 18 Sold $9,000 of merchandise to Patwary Company and accepted Patwary’s $9,000, 6-month, 9% note for the amount due.
Apr. 20 Collected Sheldon Company note in full.
30 Received payment in full from Willingham Company on the amount due.
May 25 Accepted Potter Inc.’s $5,200, 3-month, 7% note in settlement of a past-due balance on account.
Aug. 18 Received payment in full from Patwary Company on note due.
25 The Potter Inc. note was dishonored. Potter Inc. is not bankrupt; future payment is anticipated.
Sept. 1 Sold $13,100 of merchandise to Stanbrough Company and accepted a $13,100, 6-month, 10% note for the amount due.
Required:
Journalize the above transactions. The company uses straight-line depreciation for buildings and equipment. The buildings are estimated to have a 50-year life and no salvage value. The equipment is estimated to have a 10-year useful life and no salvage value. Update depreciation on assets disposed of at the time of sale or retirement
Answer:
Oriole Company
Journal entries:
Jan. 5
Debit Accounts Receivable (Sheldon Company) $20,000
Credit Sales Revenue $20,000
To record sale of merchandise, terms n/15.
Jan. 20
Debit Notes Receivable (Sheldon Company) $20,000
Credit Accounts Receivable (Sheldon Company) $20,000
To record acceptance of 3-month, 8% note
Feb 18
Debit Notes Receivable (Patwary Company) $9,000
Credit Sales Revenue $9,000
To record sale of merchandise for a 6-month, 9% note
April 20
Debit Cash Account $20,400
Credit Notes Receivable (Sheldon Company) $20,000
Credit Interest on Notes Receivable $400
To record full settlement on account
April 30
Debit Cash Account $24,720
Credit Notes Receivable (Willingham Company) $24,000
Credit Interest on Notes Receivable $720
To record full settlement on account.
May 25
Debit Notes Receivable (Potter Inc.) $5,200
Credit Accounts Receivable (Potter Inc.) $5,200
To record acceptance of a 3-mont, 7% note.
Aug 18
Debit Cash Account $9,405
Credit Notes Receivable (Patwary Company) $9,000
Interest on Notes Receivable $405
To record full settlement on account.
Aug 25
Debit Accounts Receivable $5,291
Credit Notes Receivable (Potter Inc.) $5,200
Credit Interest on Notes Receivable $91
Sept. 1
Debit Notes Receivable (Stanbrough Company) $13,100
Credit Sales Revenue $13,100
To record sale of merchandise with a 6-month 10% notes receivable.
Dec. 31
Debit Depreciation Expense - Building $
Credit Accumulated Depreciation - Building $
To record depreciation expense for the year.
Debit Depreciation Expense - Equipment $
Credit Accumulated Depreciation - Equipment $
To record depreciation expense for the year.
Explanation:
Journal entries are prepared to record business transactions in the accounting books. They show which account is to be debited and which is to be credited in the ledger.
Note that the book values of building and equipment were not included in this question, hence no figures were added to the adjusting journal entries for depreciation expenses.
Suppose that Ava withdraws $300 from her savings account at Second Bank. The reserve requirement facing Second Bank is 10%. Assume the bank does not wish to hold any excess reserves of new deposits. Use this information to complete the balance sheet below to show how Second Bank's assets and liabilities change when Ava withdraws the $300 from the bank.Instructions: include a negative sign if necessary.
Assets Liabilities
Change in Reserves: $_____________ Change in Deposits: $_______________
Change in Loans: $_______________
Answer:
Change in Reserves: –$30
Change in Deposits: –$300
Change in Loans: –$270
Explanation:
The calculation of each element of the balance sheet is as follows:
Change in Reserves = Amount withdrawn by Ava * Reserve requirement faced by Second Bank = $300 * 10% = $30. This is a reduction and will be negative in the Second Bank's Balance Sheet.
Change in Deposits = Amount withdrawn by Ava = $300. This is a reduction and will be negative in the Second Bank's Balance Sheet.
Change in loan = Amount withdrawn by Ava - Change in Reserves = $300 - $30 = $270. This is a reduction and will be negative in the Second Bank's Balance Sheet.
Change in Reserves: –$30 .
Change in Deposits: –$300
Change in Loans: –$270
Calculation of change in reserves, deposits and loans:Since
Change in Reserves = Amount withdrawn by Ava * Reserve requirement faced by Second Bank
= $300 * 10%
= $30.
This represent a reduction and will be negative on the Second Bank's Balance Sheet.
Now
Change in Deposits = Amount withdrawn by Ava
= $300.
This is a reduction and will be negative on the Second Bank's Balance Sheet.
And,
Change in loan = Amount withdrawn by Ava - Change in Reserves
= $300 - $30 = $270.
This is a reduction and will be negative in the Second Bank's Balance Sheet.
learn more about liabilities here: https://brainly.com/question/23828880
Assume that a parent company acquired 100% of a subsidiary on 1/1/X1. The purchase price was $175,000 in excess of the subsidiary’s book value of net assets on acquisition date and the excess was assigned entirely to an unrecorded patent. The life of the patent is 10 years. Assume the subsidiary sells inventory to the parent. The parent ultimately sells the inventory to outside customers. The following relates to the years X2 and X3:
Inventory Sales GP of unsold inventory Receivable (Payable) $103,300 $29,441 $41,320 $87,900 $19,137 $27,986
Please complete the following using the spreadsheet below:
Prepare the consolidated financial statements at 12/31/X3 by placing the appropriate entries in their respective debit/credit column cells.
Answer:
A spreadsheet was prepared for the consolidated financial statement for a parent company.
Below is the attached file and solution for the work spreadsheet for consolidation entries.
Explanation:
Solution
Given that:
The following information for X2 and X3 is given below:
Sales (Inventory) The GP of inventory (Unsold) Receivable (Payable)
X2 $87,900 $19,137 $27,986
X3 $103,300 $29,441 $41,320
Now,
Note: Kindly find an attached copy of he spreadsheet below for the consolidated financial statement at 12/31/X3
Suppose demand for U.S. products across the world increases. What is the impact on the flow of financial capital as a result of the increase in demand for products, the value of the U.S. dollar, and the foreign money price of the U.S. dollar? Financial capital flow / Value of the U.S. dollar / Price of the U.S. dollar No Change / Appreciate / Increase Inflow / Depreciate / Decrease Inflow / Appreciate / Increase Outflow / Depreciate / Increase Outflow / Appreciate / Decrease
Answer:
Impact on the flow of financial capital:
Financial capital flow / Value of the U.S. dollar / Price of the U.S. dollar:
No Change / Appreciate / Increase
Financial capital flow will not change. Financial capital flow does not refer to the flows for purchase of goods and services, but only for investments.
The value of U.S. dollar will appreciate relative to the increased demand.
The price of the U.S. dollar will increase, given the law of supply and demand.
Explanation:
a) Financial Capital Flow refers to the movement of investment capital, in and out of countries. When money for investment goes from one country to another, it is a capital flow, in-flow for the country receiving and out-flow for the country investing. The term does not include money people and businesses use to purchase each others' goods and services. There is why, in this scenario, there is no recorded change in financial capital flow in the U.S.
b) The value of the U.S. dollar is the total amount of U.S. dollar which a foreign currency can purchase at a particular exchange rate. It is based on the exchange rate, otherwise called the price of the U.S. dollar to another currency.
c) Price of the U.S. dollar is the exchange rate. It shows the value of one U.S. dollar vis-a-vis a foreign currency.
On January 1, 2020, Headland Company issued 10-year, $1,840,000 face value, 6% bonds, at par. Each $1,000 bond is convertible into 16 shares of Headland common stock. Headland net income in 2020 was $473,800, and its tax rate was 20%. The company has 103,000 shares of common stock outstanding throughout 2020. None of the bonds were converted in 2020.
a. Compute diluted earnings per share for 2014.
b. Compute diluted earnings per share for 2014, assuming the same facts as above, except that
$1,000,000 of 6% convertible preferred stock was issued instead of the bonds. Each $100 preferred
share is convertible into 5 shares of Crocker common stock.
Answer:
a. $3.64
b. $3.56
Explanation:
Basic Earning per Share = Earnings Attributable to Holders of Common Stocks / Weighted Average Number of Common Shares
Earnings Attributable to Holders of Common Stocks Calculation :
Net income $473,800
Less Interest on bonds after tax ($1,840,000×6%×80%) ($88,320)
Earnings Attributable to Holders of Common Stocks $385,480
Weighted Average Number of Common Shares Calculation:
Common Shares 103,000
Weighted Average Number of Common Shares 103,000
Basic Earning per Share = $385,480/103,000
= $3.74
Diluted Earning per Share = Adjusted Earnings Attributable to Holders of Common Stocks / Adjusted Weighted Average Number of Common Shares
Adjusted Earnings Attributable to Holders of Common Stocks Calculation:
Earnings Attributable to Holders of Common Stocks $385,480
Add Back Interest on bonds after tax ($1,840,000×6%×80%) $88,320
Earnings Attributable to Holders of Common Stocks $473,800
Adjusted Weighted Average Number of Common Shares Calculation:
Weighted Average Number of Common Shares 103,000
Add Convertible Bonds (1840,000/1000×16) 26,440
Adjusted Weighted Average Number of Common Shares 129,880
Diluted Earning per Share = $473,800/ 129,880
= $3.64
What is the principle of supply and demand?
Answer:
erm
Explanation:
The more supply, the less demand. The less supply, the more demand.
Answer:
This is a theory that says interaction between sellers of a resource and the buyers of that resource.
Eckert Company is involved in producing and selling high-end golf equipment. The company has recently been involved in developing various types of laser guns to measure yardages on the golf course. One small laser gun, called LittleLaser, appears to have a very large potential market. Because of competition, Eckert does not believe that it can charge more than $84 for LittleLaser. At this price, Eckert believes it can sell 119,000 of these laser guns. Eckert will require an investment of $14,875,000 to manufacture, and the company wants an ROI of 16%. Determine the target cost for one LittleLaser.
Answer:
Target cost per unit = $64
Explanation:
Target cost is the cost at which a product must be produced and sold to achieve a desired profit margin
Target cost =(Sales revenue - (ROI × capital) )/ No of units
Target cost =( (84 × 119,000) - (16%× $14,875,000 ) )/ 119,000 guns
Target cost per unit = (9996000 - 2380000) / 119,000 units= $ 64 per unit
Target cost per unit = $64
Zenith Consulting Co. has the following accounts in its ledger: Cash; Accounts Receivable; Supplies; Office Equipment; Accounts Payable; Common Stock; Retained Earnings; Dividends; Fees Earned; Rent Expense; Advertising Expense; Utilities Expense; Miscellaneous Expense.TransactionsMar. 1 Paid rent for the month, $4,000. 3 Paid advertising expense, $1,350. 5 Paid cash for supplies, $1,800. 6 Purchased office equipment on account, $11,500. 10 Received cash from customers on account, $8,600. 15 Paid creditor on account, $3,180. 27 Paid cash for miscellaneous expenses, $700. 30 Paid telephone bill for the month, $550. 31 Fees earned and billed to customers for the month, $37,200. 31 Paid electricity bill for the month, $830. 31 Paid dividends, $2,000.Journalize the preceding selected transactions for March 2018 in a two-column journal. Refer to the Chart of Accounts for exact wording of account titles.
Answer:
Date Particulars Debit Credit
Mar. 1 Rent expense 4000
Cash 4000
Paid rent for the month
Mar. 3 Advertising expense 1350
Cash 1350
Paid advertising expense
Mar. 5 Supplies 1800
Cash 1800
Paid cash for supplies
Mar. 6 Equipment 11500
Accounts payable 11500
Purchased office equipment
on account
Mar. 10 Cash 8600
Accounts receivable 8600
Received cash from customers
on account
Mar. 15 Accounts payable 3180
Cash 3180
Paid creditor on account
Mar. 27 Miscellaneous expenses 700
Cash 700
Paid cash for miscellaneous
expenses
Mar. 30 Utilities expenses 550
Cash 550
Paid telephone bill for the month
Mar. 31 Accounts receivable 37200
Fees earned 37200
Fees earned and billed to
customers for the month
Mar. 31 Utilities expenses 830
Cash 830
Paid electricity bill for the month
Mar. 31 Dividends 2000
Cash 2000
Paid dividends
he ABC company is considering the purchase of a new machine that will last 5 years and cost $100,000; maintenance will cost $12,000 per year. If the interest rate is 10% per year, compounded quarterly, a. how much money should the company set aside for this machine b. what is the future value, at the end of year 5, of the given cash flows
Answer:
a.
$145,051.26
b.
$237,669.51
Explanation:
First, calculate the equivalent annual interest rate
Equivalent annual interest rate = ( ( 1 + ( i / n ) )^n ) - 1
Equivalent annual interest rate = ( ( 1 + ( 10% / 4 ) )^4 ) - 1
Equivalent annual interest rate = 10.38%
a.
We will use the following formula to calculate the amount of money set aside.
Net Present value = Initial Cost + Maintainance cost x ( 1 - ( 1 + r )^-n / r
Net Present value = $100,000 + $12,000 x ( 1 - ( 1 + 10.38% )^-5 / 10.38%
Net Present value = $145,051.26
b.
We need to calculate the future value of using the following formula
Future value = $100,000 x ( 1 + 10.38% )^5 + [ $12,000 x ( ( 1 + 10.38% )^5 - 1 / 10.38%
Future value = $163,852.08 + $73,817.43 = $237,669.51
Smith Law Firm specializes in the preparation of wills for estate planning. On October 1, 2021, the company begins operations by issuing stock for $11,000 and obtaining a loan from a local bank for $22,000. By the end of 2021, the company provides will preparation services of $29,000 cash and pays employee salaries of $20,000. In addition, Smith pays $1,700 in cash dividends to stockholders on December 31, 2021.
Answer: $31,300
Explanation:
The Financing Section of the Cashflow statement deals with any and everything that has to do with the raising of capital for the business and the accounts that are concerned with this. This means that anything to do with the Equity Accounts including dividends as well as the Bond Accounts and long term loans falls under this section.
Out of Smith Law Firm's transactions for 2021 that we are given, the following are therefore classified as Financing Activities.
1. Issuing Stock
2. Obtaining a Loan
3. Dividend Payment.
Remember, inflows increase the cash balance and Outflows reduce it.
The total.amount of Financing Cashflows will therefore be,
= 11,000 (stock issuance which is inflow) + 22,000 (loan acquisition which is an inflow) - 1,700 (dividends are Outflows)
= $31,300
$31,300 is the amount of Financing Cashflows Smith will report in 2021.
An investment project provides cash inflows of $745 per year for eight years. What is the project payback period if the initial cost is $1,700? What if the initial cost is $3,300? What if it is $6,100? Ross, Stephen,Ross, Stephen. Fundamentals of Corporate Finance (Kindle Locations 14578-14580). McGraw-Hill Higher Education. Kindle Edition.
Answer:
2.28 years
4.43 years
8.19 years
Explanation:
Payback period is the time period in which initial investment of a project is recovered.
Initial cost = $1,700
Pay back period = Initial Investment / Yearly cash inflow
Pay back period = $1,700 / $745 = 2.28 years
Initial cost = $3,300
Pay back period = Initial Investment / Yearly cash inflow
Pay back period = $3,300 / $745 = 4.43 years
Initial cost = $6,100
Pay back period = Initial Investment / Yearly cash inflow
Pay back period = $6,100 / $745 = 8.19 years
Nash Corporation had income from continuing operations of $10,813,600 in 2020. During 2020, it disposed of its restaurant division at an after-tax loss of $206,600. Prior to disposal, the division operated at a loss of $316,100 (net of tax) in 2020 (assume that the disposal of the restaurant division meets the criteria for recognition as a discontinued operation). Nash had 10,000,000 shares of common stock outstanding during 2020. Prepare a partial income statement for Nash beginning with income from continuing operations. (Round earnings per share to 2 decimal places, e.g. 1.48.)
Answer and Explanation:
The presentation of the partial income statement is presented below:
Nash Corporation
Partial income statement
Income from continuing operations $10,813,600
Discontinued operations
Loss from operations of a division $316,100
Loss from disposal of the division $206,600 ($522,700)
Net income $10,290,900
Earning per share
Income from continuing operations
($10,813,600 ÷ 10,000,000 shares) $1.08
Less Discontinued operations
($522,700 ÷ 10,000,000 shares) -$0.05
Net income
($10,290,900 ÷ 10,000,000 shares) $1.03
We simply deduct the losses from the income so that the net income could arrive
In each dropdown that follows, select the correct sign [less than ( <), greater than (> ), or equal (=)] for each comparison, assuming periods of rising prices. 1. FIFO inventory LIFO inventory 2. FIFO cost of goods sold LIFO cost of goods sold 3. FIFO net income LIFO net income 4. FIFO income taxes LIFO income taxes b. Why would management prefer to use LIFO over FIFO in periods of rising prices? Income shown on the company’s tax return would be lower if LIFO rather than FIFO is used. Income shown on the company’s tax return would be higher if LIFO rather than FIFO is used. Cost of goods sold shown on the company’s income statement would be lower if LIFO rather than FIFO is used. Dividends shown on the company’s financial statements would be higher if LIFO rather than FIFO is used.
Answer:
1. FIFO inventory is greater than (>) LIFO inventory.
2. FIFO cost of goods sold is less than (<) LIFO cost of goods sold.
3. FIFO net income is greater than (>) LIFO net income.
4. FIFO income taxes are greater than (>) LIFO income taxes.
b. Income shown on the company’s tax return would be lower if LIFO rather than FIFO is used.
Explanation:
FIFO and LIFO are accounting methods used in managing costs related to inventory, stock repurchases at different times and financial activities associated with monetary costs a company had tied up within inventory of feedstocks, raw materials, produced goods, and equipment parts.
Simply stated, FIFO and LIFO are accounting methods is used for the valuation of the cost of goods sold and ending inventory of a company.
FIFO is an acronym for "First In, First Out" and it assumes oldest unit of inventory is sold first, meaning goods that were first added to inventory are the first goods removed from inventory for sale and are recorded as sold first.
LIFO is an acronym for "Last In, First Out" and it assumes last unit to arrive in inventory is sold first, meaning goods that were last added to inventory are the first goods removed from inventory for sale and are recorded as sold first.
Santa Klaus Toys just paid a dividend of $3.00 per share. The required return is 11.7 percent and the perpetual dividend growth rate is 3.9 percent. What price should this stock sell for five years from today?
Answer:
P5=48.3860
Explanation:
Santa Klaus Toys
The Price of the stock 5 years from today will be :
P5=D6/(r-g)=
D0*(1+g)^6/(r-g)
Where
D0 =3
g =3.9%
r=11.7%
Hence:
P5=3*(1+3.9%)^6/(11.7%-3.9%)
P5=3*(1+0.039)^6/(0.117-0.039)
P5=3*(1.039)^6/(0.078)
P5=3.77410/0.078
P5=48.3860
Tate Company purchased equipment on November 1, 2020 and gave a 3-month, 9% note with a face value of $120,000. Tate’s year-end is December 31st. The December 31, 2020 adjusting entry is Group of answer choices debit Interest Expense and credit Cash, $7,200 debit Interest Expense and credit Interest Payable, $1,800 debit Interest Expense and credit Interest Payable, $1,200 debit Interest Expense and credit Interest Payable, $10,800
Answer: Debit Interest Expense and credit Interest Payable, $1,800
Explanation:
The amount of time that has elapsed between the 1st of November and the 31st of December is 2 months.
This means that the interest over the last 2 months has to be calculated and recorded on the 31st of December.
Bear in mind that the 9% is an annual interest rate figure and so when calculating the interest, you must adjust for the amount of months in the year.
Interest owed for 2 months is,
= 9% * 2/12 (2 months have elapses out of 12 months in the year) * $120,000
= $1,800
Interest owed is $1,800.
The correct entry will therefore be,
Dec 31
DR Interest Expense $1,800
CR Interest Payable $1,800
( To record interest payable on note)
Beta Corporation had net income of $325,000 and paid dividends to common stockholders of $39,000 in 2017. The weighted average number of shares outstanding in 2017 was 50,000 shares. Beta Corporation's common stock is selling for $52 per share on the New York Stock Exchange. Beta Corporation's price-earnings ratio is
Answer:
The price earnings ratio for Beta corporation is 8 times
Explanation:
The formula for price-earnings ratio is the stock market price divided by the stock earnings per share.
The stock market price has been given as $52 per share
the earnings per share=net income-preferred dividends/weighted average number of shares
net income is $325,000
preferred dividends is $0
weighted average number of shares is 50,000
earnings per share=($325,000-$0)/50,000=$6.5
price earnings ratio=$52/$6.5= 8 times
The income statement of Sarasota Company is shown below. SARASOTA COMPANY INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2020 Sales revenue $6,890,000 Cost of goods sold Beginning inventory $1,910,000 Purchases 4,410,000 Goods available for sale 6,320,000 Ending inventory 1,620,000 Cost of goods sold 4,700,000 Gross profit 2,190,000 Operating expenses Selling expenses 460,000 Administrative expenses 700,000 1,160,000 Net income $1,030,000 Additional information: 1. Accounts receivable decreased $350,000 during the year. 2. Prepaid expenses increased $160,000 during the year. 3. Accounts payable to suppliers of merchandise decreased $300,000 during the year. 4. Accrued expenses payable decreased $90,000 during the year. 5. Administrative expenses include depreciation expense of $50,000. Prepare the operating activities section of the statement of cash flows using the direct method.
Answer:
Cash flow from Operating Activities
Cash Receipts from Customers $7,240,000
Cash Paid to Suppliers and Employees ($ 6,360,000)
Net Cash from Operating Activities $880,000
Explanation:
Cash Paid to Suppliers and Employees Calculation :
Cost of goods sold 4,700,000
Add Selling expenses 460,000
Add Administrative expenses 700,000
Less Depreciation Expense (50,000)
5,810,000
Decrease in Accounts Payable 300,000
Increase in Prepaid Expenses 160,000
Decrease in Accrued Expenses Payable 90,000
Cash Paid to Suppliers and Employees 6,360,000
Cash Receipts from Customers Calculation :
Sales revenue $6,890,000
Add Decrease in Accounts Receivables $350,000
Cash Receipts from Customers $7,240,000
The following purchase transactions occurred during August for Backcountry Kayak Excursions. Aug 1 Purchased Kevlar kayaks (equipment) for $471 on account from Gear Inc. Aug 6 Purchased kayak paddles (supplies) for $701 on account from Southland Co. Aug 14 Purchased life vests (supplies) for $3,588 on account from Gear Inc. Record these transactions in a purchases journal. If no entry is required, select "no entry" from the dropdown box. If an amount box does not require an entry, leave it blank.Purchases Journal Page 1Date Account Post Ref Accounts Supplies Other Accounts Post. Amount Credited Payable Dr. Dr. Ref Cr. Aug 1 6 14
Answer:
Backcountry Kayak Excursions - Purchases Journal
Supplier's Payment Accounts
Date account Item terms payable Inventory
Aug 1 Gear Inc. Equipment* On account $471 $471
Aug 6 Southland Supplies* On account $701 $701
Aug 14 Gear Inc. Supplies* On account $3,558 $3,558
Total $4,730 $4,730
Because there is not enough room here, i just recorded the purchases as either equipment or supplies, but you can also record them in a more detailed manner.
Equipment: Kevlar kayaksSupplies: paddlesSupplies: life vestsThe payment terms are either on account or cash purchases. If the purchases are made on cash, they will not increase accounts payable.
Since this is a retailer, the items purchased are allocated to inventory, but in other cases they could be allocated to different departments, e.g. sales, manufacturing, etc.
Mike purchases a new heavy-duty truck (5-year class recovery property) for his delivery service on March 30, 2019. No other assets were purchased during the year. The truck is not considered a passenger automobile for purposes of the listed property and luxury automobile limitations. The truck has a depreciable basis of $42,000 and an estimated useful life of 5 years. Assume half-year convention for tax. Assume half-year convention for tax.
Required:
a. Calculate the amount of depreciation for 2017 using financial accounting straight-line depreciation (not the straight-line MACRS election) over the truck's estimated useful life.
b. Calculate the amount of depreciation for 2017 using the straight-line depreciation election, using MACRS tables over the minimum number of years with no bonus depreciation or election to expense
c.Calculate the amount of depreciation for 2017, including bonus depreciation but no election to expense, that Mike could deduct using the MACRS tables
d. Assume no income limit on the expense election. Calculate the amount of depreciation for 2017 including bonus depreciation and the election to expense that Mike can deduct
Answer:
a. Calculate the amount of depreciation for 2017 using financial accounting straight-line depreciation (not the straight-line MACRS election) over the truck's estimated useful life.
depreciation expense per year = $42,000 / 5 = $8,400
depreciation expense for 2017 = $8,400 x 9/12 = $6,300
b. Calculate the amount of depreciation for 2017 using the straight-line depreciation election, using MACRS tables over the minimum number of years with no bonus depreciation or election to expense
using MACRS table, depreciation expense = $42,000 x (20%/2 due to half year) = $4,200
c. Calculate the amount of depreciation for 2017, including bonus depreciation but no election to expense, that Mike could deduct using the MACRS tables
= ($42,000 / 2) + $4,200 = $21,000 + $4,200 = $25,200
d. Assume no income limit on the expense election. Calculate the amount of depreciation for 2017 including bonus depreciation and the election to expense that Mike can deduct
$42,000
4 pressures to your income (financial)
A zero coupon bond with a face value of $1,000 is issued with an initial price of $415.50. The bond matures in 10 years. What is the implicit interest, in dollars, for the first year of the bond's life
Answer:
$38.14
Explanation:
The yield to maturity on the bond can be computed using the rate formula in excel as shown below:
=rate(nper,pmt,-pv,fv)
nper is the bond life measured in years which is 10
pmt is the annual coupon payment since the bond zero coupon ,pmt is $0
pv is current price of the bond which is $415.50
fv is the face value of the bond i.e $1000
=rate(10,0,-415.50,1000)=9.18%
implicit interest in dollars for first year=cash proceeds*yield to maturity
cash proceeds which is the same as price of bond is $415.50
implicit interest in dollars=$415.50*9.8%=$38.14
According to the Florida bureau of economic research, the mean rent price for condo in Florida is $ 700, We want to test this hypothesis:_______
a) A random sample of 50 condos rented was taken.
b) The mean was $ 800.
c) The assumption here is that the standard deviation of the population is known and is $ 400.
d) Alpha
Answer:
The answer is a.
Explanation:
I can safely say that in order to have an exact value of an average of $ 700, it is because an initial survey had to be made of people in 50 condominiums that allowed finding several sample means and finally finding the total sample mean, this data allows determining an exact average of reliable values supplied by respondents in the sample.
A company is considering an iron ore extraction project that requires an initial investment of $1,400,000 and will yield annual cash inflows of $613,228 for three years. The company's discount rate is 9%. Calculate IRR. Present value of ordinary annuity of $1:
10% 12% 14% 15% 16% 18% 20%
1 0.909 0.893 0.877 0.870 0.862 0.847 0.833
2 1.736 1.690 1.647 1.626 1.605 1.566 1.528
3 2.487 2.402 2.322 2.283 2.246 2.174 2.106
4 3.170 3.037 2.914 2.855 2.798 2.690 2.589
a. 13%
b. 15%
c. 14%
d. 17%
Answer:
b. 15%
Explanation:
IRR 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 = $-1,400,000
Cash flow each year for 3 years = $613,228
IRR = 15%
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
Of customers who register a complaint, ________. all will do business with the company again because they are unwilling to dedicate the effort required to find another vendor none will do business with the company again customers whose complaints are satisfactorily resolved are more likely to provide publicity than those who are dissatisfied the speed of resolution has no impact on the likelihood of repeat business some will do business with the company again if their complaint is resolved
Answer:
Some will do business with the company again if their complaint is resolved.
Explanation:
In the current situations that surrounds marketing and different businesses, it is now inevitable for customers not to complain and at such can lead to loss of customer(s).
Complaints from a customer primarily highlights a problem, this ranges from problem with your product to employees or internal processes, and also by hearing these problems directly from your customers, you can investigate and improve to prevent further complaints in the future.
That is why it is said that some customers will likely do business with the company again if their complaint are been resolved.
Answer:
some will do business with the company again if their complaint is resolved
Explanation:
Complaints are made by customers who are seeking better services from a business as regards it's products and services.
When complaints are resolved customers usually do business again with the company.
Customers who do not complain are those who notice the problem with the products or services offered and move to a competitor.
For a customer to make a complaint it means he is still loyal to the company but wants improvement in some area of product and services offering.
Suppose a bank offers to lend you $10,000 for 1 year on a loan contract that calls for you to make interest payments of $250.00 at the end of each quarter and then pay off the principal amount at the end of the year. What is the effective annual rate on the loan
Answer:
10.38%
Explanation:
From the question above a bank offers to lend an amount of $10,000 for a period of 1 year
The bank expects an interest of $250 to be paid every 4 months
= $250×4
= $1,000
Total amount of interest= $1,000
The first step is to calculate the nominal interest
= (1000/10,000)×100
= 0.1×100
= 10%
Therefore, the effective annual rate on the loan can be calculated as follows
= (1+r/m)^m-1
r = 10% , m = 4
= [1+(10/100)/4]^-1
=[ (1+0.1/4)^4]-1
= (1+0.025^4)-1
= (1.025^4)-1
= 1.1038-1
= 0.1038×100
= 10.38%
Hence the effective annual rate in the loan is 10.38%
The UCR Corp expects an earnings of $100,000 every year forever. The company currently has no debt, and its cost of equity is 15 percent. (a) If the corporate tax rate is 40 percent, what is the value of the company
Answer:
Value of the company = $400,000
Explanation:
The value of a firm is the present value of its stream of net cash flow discounted at the appropriate cost of capital. The appropriate cost of capital here is 15%.
Net cash flow = 100,000 - (40% × 100,000)= 60,000
Value of the company = A/r
A= 60,000, r-discount rate - 15%,
Value of the company = 60,000/0.15= $400,000
Value of the company = $400,000