Sarasota Company reported 2020 net income of $152,900. During 2020, accounts receivable increased by $17,160 and accounts payable increased by $9,582. Depreciation expense was $48,000.
Required:
Prepare the cash flows from operating activities section of the statement of cash flows.
Answers
Answer:
$193,322
Explanation:
• Prepare the cash flow from operating activities section of the statement of cash flow.
Please find attached detailed solution to the above question and answer.
The net cash provided by operating activities is $193,322.
Related Questions
If demand is perfectly inelastic and supply is upward sloping, then a $1 tax per unit placed on producers will:
Answers
Answer:
If demand is perfectly inelastic, this means that no matter how much the price of a good rises, demand will stay the same.
If supply is upward sloping, this means that the higher the price, the higher the supply, because the more revenue producers obtain.
However, in this case, the producers would raise the price of the good, by the amount of the tax: $1, and consumers would buy the same amount. However, the extra revenue from the higher price would go to the governmet in the form of tax revenue, and not to the producers.
Because of the housing bubble, many houses are now selling for much less than their selling price just two to three years ago. There is evidence that homeowners with virtually identical houses tend to ask for more if they paid more for the house. What fallacy are they making and why?
Answers
Answer:
Sunk cost fallacy
Explanation:
Sunk cost is mostly related to the sunk cost fallacy. This happens when a person or company refuses to change a decision simply due to the fact that they have already put the money down for it even though continuing with such is not the best decision. Such a fallacy has the ability of affecting even the smallest financial decision.
Here people believe they can recover money which they have spent and this is not actually true as sunk costs are not recoverable.
A manager has determined that a potential new product can be sold at a price of $33.50 each. The cost to produce the product is $26.00, but the equipment necessary for production must be leased for $160,000 per year. What is the break-even point
Answers
Answer:
the break-even point in units is 21,333 units
Explanation:
The computation of the break even point in units is shown below:
Break even point in units is
= Fixed cost ÷ contribution margin per unit)
= $160,000 ÷ ($33.50 - $26)
= $160,000 ÷ $7.5
= 21,333 units
Hence, the break-even point in units is 21,333 units
And, the same is to be considered
We simply applied the above formula so that the correct units could come
Assume there is a bond with the yield to maturity (YTM) of 11%, coupon rate of 10%. Further assume that the current inflation rate is 3%. What is the bond’s real interest rate?
Answers
Answer:
7.77%
Explanation:
The Real Interest Rate is the interest rate that has been adjusted with the effects of Inflation. Effect of inflation is to reduce the value of money over time.
Real Interest Rate = (1 + Nominal Return) / (1 + Inflation Rate) - 1
Therefore,
Real Interest Rate = (1 + 0.11) / (1 + 0.03) - 1
= 0.0777
= 7.77%
Conclusion
The bond’s real interest rate is 7.77%
Accounts Balances Accounts Balances Cash $ 40,000 Common Stock $ 50,000 Accounts Receivable 50,000 Retained Earnings 35,000 Supplies 1,100 Dividends 1,100 Prepaid Rent 3,000 Service Revenue 65,000 Equipment ? Salaries Expense 30,000 Accounts Payable 17,000 Rent Expense 12,000 Salaries Payable 5,000 Interest Expense 3,000 Interest Payable 3,000 Supplies Expense 7,000 Deferred Revenue 9,000 Utilities Expense 6,000 Notes Payable 30,000 Required: Prepare a trial balance by placing amounts in the appropriate debit or credit column and determining the balance of the Equipment account.
Answers
Answer:
Trial Balance
Debit Credit
$ $
Cash 40,000
Common Stock 50,000
Accounts Receivable 50,000
Retained Earnings 35,000
Supplies 1,100
Dividends 1,100
Prepaid Rent 3,000
Service Revenue 65,000
Equipment 60,800
Salaries Expense 30,000
Accounts Payable 17,000
Rent Expense 12,000
Salaries Payable 5,000
Interest Expense 3,000
Interest Payable 3,000
Supplies Expense 7,000
Deferred Revenue 9,000
Utilities Expense 6,000
Notes Payable 30,000
Totals $214,000 $214,000
The Equipment Balance is $60,800. This is the amount that will ensure that the Debit equals the Credit side.
Explanation:
The Trial Balance is used to check for mathematical accuracy. The debit Totals must equal the credit totals. In our case we expect debit totals to have a shortfall and this shortfall belongs to Equipment. The Trial Balance has been prepared above.
22. You decide finance a $12,000 car at 3% compounded monthly for 4 years. What will your monthly payments be
Answers
Answer:
$265.60
Explanation:
P0 = d(1 - (1+i/k)^-nk / (n/k) (Formula as attached to the question)
P0 = $12,000
i = 0.03
k = 12
n = 4
12,000 = d( 1 - (1+0.03/12)^-4*12) / (0.03/12)
1000 * 0.03 = d(1 - (1.0025)^48
30 = d(1 - 0.997053263)
30 = d(0.112946737)
d = 30 / 0.112946737
d = 265.6119229
d = $265.6
Hence, the monthly payment will be $265.60
Troll Island is a small island nation that recently experienced an autonomous change in aggregate expenditures (AE). AE increased by 5 billion, and the marginal propensity to consume on Troll Island is equal to 0.73 . What is the change in Troll Island's real GDP after the increase in AE
Answers
Answer:
18.52
Explanation:
The computation of the change in Troll island real GDO after rise in AE is shown below:
Given that
Rise in accumulated depreciation by 5 billion
Marginal propensity to consume is 0.73
Based on the above information,
We know that
MPS = 1 - MPC
= 1 - 0.73
And, the multiplier is
= 1 ÷ (1 - MPC)
= 1 ÷ (1 - 0.73)
= 1 ÷ 0.27
= 3.70
Now the change is
= 5 billion × 3.70
= 18.52
Portia Grant is an employee who is paid monthly. For the month of January of the current year, she earned a total of $9,288. The FICA tax for social security is 6.2% of the first $128,400 earned each calendar year and the FICA tax rate for Medicare is 1.45% of all earnings. The FUTA tax rate of 0.6% and the SUTA tax rate of 5.4% are applied to the first $7,000 of an employee's pay. The amount of federal income tax withheld from her earnings was $1,541.17. What is the total amount of taxes withheld from the Portia's earnings
Answers
Answer:
total taxes withheld = $2,251.71
Explanation:
the journal entry to record Portia's wage expense:
Dr Wages expense 9,288
Cr Federal income taxes withheld 1,541.17
Cr FICA OASDI taxes withheld 575.86
Cr FICA Medicare taxes withheld 134.68
Cr Wages payable 7,036.29
net pay = $7,036.29
total taxes withheld = $9,288 - $7,036.29 = $2,251.71
footsteps Co. has a bond oustanding with a coupon rate of 5.2% and annual payments. The bond currently 1,012.50 matures in 16 years and has a par value of 1,000. What is the YTM of the bond
Answers
Answer:
the yield to maturity is 5.08%
Explanation:
The computation of the YTM of the bond is shown below:
Given that
NPER = 16 years
PMT = $1,000 × 5.2% = $52
PV = $1,012.50
FV = $1,000
The formula is shown below:
= RATE(NPER,PMT,-PV,FV,type)
After applying the above formula, the yield to maturity is 5.08%
Hence, the yield to maturity is 5.08%
During the first year of Sheffield Corp.'s operations, all purchases were recorded as assets. Supplies in the amount of $28000 were purchased. Actual year-end supplies amounted to $7100. The adjusting entry for store supplies will
Answers
Answer:
$20,900
Explanation:
This $20,900 will be recorded as Supplies Expense, which will decrease Net Income because expenses will increase by $20,900. and Inventory will be decreased by $20,900
Supplies used = $28,000 – $7,100 = $20,900
Entry
Dr Supplies Expense $20,900
Cr Inventory $20,900
Assume that Martinez completed the office and warehouse building on December 31, 2020, as planned at a total cost of $14,560,000, and the weighted-average amount of accumulated expenditures was $10,080,000. Compute the avoidable
Answers
Answer:
Note: The complete question is attached as picture
1. Avoidable interest on construction loan = $6,000,000 * 12% = $672,000
Calculation of weighted average interest rate on general loan
Loan Amount Interest rate Interest (Amount*rate)
Short term loan 3,920,000 10% 392,000
Long term loan 2,800,000 11% 308,000
Total 6,720,000 700,000
Weighted average interest rate = 700,000 / 6,720,000
Weighted average interest rate =0.10416667
Weighted average interest rate = 10.42%
Avoidable interest on remaining expenditure = ($10,080,000 - $5,600,000) * 10.42%
Avoidable interest on remaining expenditure = $4480000 * 10.42%
Avoidable interest on remaining expenditure = $466,816
Total avoidable interest = $672,000 + $466,816
Total avoidable interest = $1,138,816
2. Total cost of building capitalized = $14,560,000 + $$1,138,816
Total cost of building capitalized = $15,698,816
Depreciation expenses = Cost - Salvage value / Useful life
Depreciation expenses = $15,698,816 - $840,000 / 30 years
Depreciation expenses = $14,858,816 / 30 years
Depreciation expenses = $495293.86667
Depreciation expenses = $495,293.87
Identify and discuss the core factors of communication that must be considered in the presentation of an annual report.
Answers
Answer:
Presentation of an Annual Report
Core Factors of Communication:
1. Clarity: Information presented to diverse users must attempt to be clear to the users. This is a key factor to avoid the communication of wrong information to users with different levels of understanding and technical skills.
2. Informative: For the annual report to achieve its purposes, it must be informative to the users. The annual report is a snapshot of an organization activities and performance. It must achieve this purpose of delivering information to the intended users.
3. Logical sequence: The annual report of a company must follow some recognized logical order to ensure full coverage of all required topics. For example, in presenting the financial statements, there is a recognized order for their presentation. This order must be strictly followed to reduce confusion.
4. Conciseness: Information being presented to a wide audience must be concise to achieve its intended purpose. The length of the presentation should not be such as to discourage the average reader of the annual report. This means that irrelevant information should be eliminated.
Explanation:
Annual reports are required from companies by the stockholders and the potential investors. There are other stakeholders who also require the annual reports. Since annual reports are met to meet the information needs of many different stakeholders, its presentation should be such that accommodation is made for the various users.
If we have information about workers' marginal products, then total and average product can be found by
Answers
Answer:
Summing the marginal values to find the total and dividing it by the number of workers to get the average.
Explanation:
As we know that the marginal product of labor would be the extra amount of the product that is received by adding one or more labor in the process of the production. Now if we add the marginal amounts so we can get the total product
Also the average product could be determined by dividing the total product by its number of workers
Therefore the above is the answer
You are offered a chance to buy an asset for $4,000 that is expected to produce cash flows of $750 at the end of Year 1, $1,000 at the end of Year 2, $850 at the end of Year 3, and $6,250 at the end of Year 4. What rate of return would you earn if you bought this asset
Answers
Answer:
The answer would be 136.64 because you would Divied then you would Add the bigger number with the smallest number.
Explanation:
Given a perfectly competitive market structure, a firm's total fixed costs are $195, average variable costs are $4, marginal revenue is $6, and the quantity demanded is 65. Assuming the firm is a profit maximizer, what are the firm's total profits
Answers
Answer: -$65
Explanation:
The following can be deuced from the question:
Revenue: $6 × $65 = $390
Less: Variable cost = $4 × $65 = $260.
Contribution = $390 - $260 = $130
Less: fixed cost = $195
Firms profit/loss will be:
= $130 - $195
= -$65
The firm is making a loss of $65.
Frasier Cabinets wants to maintain a growth rate of 5 percent without incurring any additional equity financing. The firm maintains a constant debt-equity ratio of .55, a total asset turnover ratio of 1.30, and a profit margin of 9 percent. What must the dividend payout ratio be?
Answers
Answer:
73.74 %
Explanation:
Calculation for dividend payout ratio
First step is to calculate Return on equity
Return on equity = 0.09 ×1.30 ×(1 + 0.55)
Return on equity= 0.18135
Second step is to calculate Sustainable growth
Sustainable growth = [0.18135 ×b]/[1 - (0.18135 ×b)]
0.05 = (0.18135 x b)/ ( 1- (0.18135 x b))
b = 0.2626
Last step is to calculate the Dividend Payout ratio
Dividend Payout ratio = 1 - 0.2626
Dividend Payout ratio=0.7374*100
Dividend Payout ratio = 73.74 %
Therefore Dividend Payout ratio will be 73.74 %
"Cullumber, Inc., stock has a beta of 1.30. If the expected market return is 15.0 percent and the risk-free rate is 4.0 percent, what does CAPM indicate the appropriate expected return for Cullumber stock is? (Round answer to 2 decimal places, e.g. 52.75.)"
Answers
Answer:
14.4%
Explanation:
Using CAPM,
The Expected return = Risk free rate + Market return - Risk free rate * Beta
The Expected return = 4.0 % + 15%-4.0%*1.30
The Expected return = 4.0 % + 9.0%*1.30
The Expected return = 0.04+ (0.08*1.30)
The Expected return = 0.04 + 0.104
The Expected return = 0.144
The Expected return = 14.4%
Innovators and entrepreneurs flourish most in a _____ because _____. planned economy; any individual who has an innovative idea is free to try to make money out of that idea by starting a business. mixed economy; it provides more incentives for businesses and entrepreneurs to develop innovations than any other economic system. market economy; it grants existing businesses and entrepreneurs the freedom to improve their operations through innovation command economy; established businesses and individual entrepreneurs can reap rewards in the form of high profits owing to innovation.
Answers
Answer:
market economy; it grants existing businesses and entrepreneurs the freedom to improve their operations through innovation
Explanation:
Innovators can be defined as group of people or individuals who have the intellectual capability to create, develop and manage new ideas, products etc.
An entrepreneur refers to an individual who is involved in the buying and selling of goods and services usually from scratch or small capacity.
Innovators and entrepreneurs flourish most in a market economy because it grants existing businesses and entrepreneurs the freedom to improve their operations through innovation.
This ultimately implies that, an open market such as a market driven economy creates the enabling environment for business to grow.
What is your company's Inventory Carrying Cost rate? (Ask your Director of Logistics or the CFO. If that's not possible, provide an estimation using all 4 categories presented in class.) Do you think it's an accurate computation, a good estimate or a not-even-close estimate? Recommend one action that should be taken to improve the accuracy of this number.
Answers
Answer:
The inventory carrying cost rate is 20% to 30%
Explanation:
The Inventory carrying cost is the expense that a company has to incur in order to hold the inventory in its warehouse till the orders are received. This cost is different for every business as it depends on the properties of inventory. The perishable goods are more expensive to hold and the carrying cost will be high for such inventory.
Calculate the Equivalent Uniform Annual Benefit (EUAB) for the cash flow below for interest rate of 10%
Answers
Answer:
The Equivalent Uniform Annual Benefit (EUAB) is 2,220.52.
Explanation:
Note: This question is not complete. The complete question is therefore provided before answering the question. See the attached pdf file for the complete question.
The explanation to the answer is now given as follows:
Note: See the attached excel file for the calculation of the total present values of cash flow (in bold red color).
Equivalent Uniform Annual Benefit (EUAB) refers to an annual benefit or cash flow that is obtained by converting any cash flow to an equivalent uniform cash flow.
From the question, the diagram indicates that the amount of the annual cash flows from year 1 to year 80 is $2,000, except for years 10 and 40 which are 7,000 and 15,000 respectively (in bold blue color in the attached excel file).
Because of years 10 and 40 which are 7,000 and 15,000, we first calculate the present value of all the annual cash flows from year 1 to 80 (in bold red color in the attached excel file).
From the attached excel file, we have:
Total present value of cash flows = 22,205.19
The annuity factor is calculated using the annuity formula as follows:
Annuity factor = ((1-(1/(1 + r))^n)/r) …………… (1)
Where;
r = interest rate = 10%, or 0.10
n = number of years = 80
Substituting the values into equation (1), we have:
Annuity factor = ((1-(1/(1 + 0.10))^80) / 0.10)
Annuity factor = 9.9951181414995
Approximating to 2 decimal places, we have:
Annuity factor = 10.00
The Equivalent Uniform Annual Benefit (EUAB) can therefore now be calculate using the formula for calculating the Equivalent Uniform Annual Benefit (EUAB) as follows:
EUAB = Total present value of cash flows / Annuity factor ……………. (2)
Substituting the values into equation (2), we have:
EUAB = 22,205.19 / 10.00
EUAB = 2,220.52
Therefore, the Equivalent Uniform Annual Benefit (EUAB) is 2,220.52.
Omnidata uses the annualized income method to determine its quarterly federal income tax payments. It had $100,000, $50,000, and $90,000 of taxable income for the first, second, and third quarters, respectively ($240,000 in total through the first three quarters). What is Omnidata's annual estimated taxable income as of the end of the third quarter
Answers
Answer:
$300,000
Explanation:
Calculation for the annual estimated taxable income as of the end of the third quarter
Using this formula
Annual estimated taxable income=2 × (First quarter taxable income + Second quarter taxable income)
Let plug in the formula
Annual estimated taxable income=2 x ($100,000 + $50,000 )
Annual estimated taxable income=2×$150,000
Annual estimated taxable income=$300,000
Therefore the annual estimated taxable income as of the end of the third quarter will be $300,000
Name and explain the four marketing strategies for company growth
Answers
-Packaging what draws people in to purchase
-Consistency to grow /make product better products or grow company more
-Patience companies take time and money
hope this helps
The nation of Singapore has no natural resources to speak of, must import its water, and is very small in land mass. However, it has a very high real per capita gross domestic product (GDP) and a literacy rate of over 95%. How can such a small country with no resources be so prosperous
Answers
Answer:
Singapore is rich in other resources, like human capital.
Explanation:
Since in the question it is mentioned that Singapore who has no natural resource but import its water and small portion of the land mass at the same time it has very high GDP and the literacy rate over and above 95%
So in this case, it is rich in the other resources example human capital as it is possible for a small country to make an optimum use of it also it has the nice geographical location.
Therefore the second option is correct
M11-2 (Algo) Computing the Number of Unissued Shares LO11-1 The balance sheet for Ronlad Corporation reported 172,000 shares outstanding, 270,000 shares authorized, and 22,000 shares in treasury stock. How many shares have been issued
Answers
Answer: 194,000 shares
Explanation:
Shares are issued from the number of shares authorized. The company can then decided to repurchase some of these issued shares and make them treasury stock.
Issued shares will therefore be the sum of shares outstanding and treasury shares
= 172,000 + 22,000
= 194,000 shares
Darrin Brown bought a pub. The purchase price was $695,000. An appraiser provided the following appraisal values: land, $320,000; building, $370,000; and equipment, $60,000. What cost should be allocated to the building
Answers
Answer:
$342,867
Explanation:
Use the appraisal values to apportion the purchase price to the cost of the Building.
Calculation of the Cost of Building :
Total Appraisal Value = $320,000 + $370,000 + $60,000
= $750,000
Cost of Building = $370,000 / $750,000 × $695,000
= $342,867
You take out student loans to help pay for your degree at a 5% annual interest rate. Assume the bank expected inflation to average 3% per year. What real interest rate did the bank expect to earn from your loan
Answers
Answer:
Real interest rate= 0.02 = 2%
Explanation:
Giving the following information:
Nominal interest rate= 5%
Inflation rate= 3%
To calculate the real interest rate, we need to use the following formula:
Real interest rate= nominal interest rate - inflation rate
Real interest rate= 0.05 - 0.03
Real interest rate= 0.02 = 2%
A company has 200,000 shares of 8% preferred stock with $10 par in its capital structure. The preferred stock currently sells for $15. The company has a tax rate of 40%. Ignore flotation costs. The cost of preferred stock used in WACC will be:
Answers
Answer:
the cost of preferred stock is 5.33%
Explanation:
The computation of the cost of preferred stock is shown below:
The cost of preferred stock is
= (Par value × dividend rate) ÷ (Share price)
= ($10 × 8%) ÷ ($15)
= ($0.8) ÷ ($15)
= 5.33%
Hence, the cost of preferred stock is 5.33%
The same is to be considered
We simply applied the above formula so that the correct cost could come
During the month of July, Clanton Industries issued a check in the amount of $723 to a supplier on account. The check did not clear the bank during July. In preparing the July 31 bank reconciliation, the company should:______.
A. Deduct the check amount from the book balance of cash.
B. Add the check amount to the book balance of cash.
C. Adam Deduct the check amount from the bank balance.
D. Add the check amount to the bank balance.
E. Make a journal entry in the company records for an error.
Answers
Answer: C. Deduct the check amount from the bank balance.
Explanation:
This is an outstanding check which means that it has reflected as a reduction in the book balance but not in the bank balance.
The way to reconcile it therefore is to deduct it from the bank balance that way it will reduce the bank balance the same way it had reduced the book balance.
How much will net operating income increase (decrease) per month if the monthly advertising budget increases by $9,600, the monthly sales volume increases by 100 units, and the total monthly sales increase by $6,000
Answers
Answer:
I could not find the exact missing details for your question so I will use a similar one that you can reference. See attached.
Fixed expenses will remain the same and only advertising and sales increased so;
Increase (decrease) in Net Operating income = Increase in sales * Contribution margin ratio - increase in expenses (advertising)
= 16,000 * 40% - 8,200
= 6,400 - 8,200
= -$1,800
Decrease of $1,800
What is the duration of a four-year Treasury bond with a 10 percent semiannual coupon selling at par
Answers
Answer:
the formula to calculate modified duration of bonds:
modified duration = [1 - (1 + y)⁻ⁿ] / y
since this bond pays semiannual interest,
modified duration = [1 - (1 + 5%)⁻⁸] / 5%
modified duration = (1 - 1.05⁻⁸) / 5% = 6.4632 semiannual periods
modified duration in years = 6.4632 / 2 = 3.2316 years
if you want to determine the Macaulay duration = modified duration x (1 + yield) = 3.2316 years x 1.05 = 3.39318 years