Some of E and S Electronics's merchandise is gathering dust. It is now December 31, 2018, and the current replacement cost of the ending merchandise inventory is $ 22,000 below the business's cost of the goods, which was $ 100,000. Before any adjustments at the end of the period, the company's Cost of Goods Sold account has a balance of $ 390,000.
Requirements:
1. Journalize any required entries.
2. At what amount should the company report merchandise inventory on the balance sheet?
3. At what amount should the company report cost of goods sold on the income statement?
4. Which accounting principle or concept is most relevant to this situation?
Answers
Answer:
Explanation:
1. The journal entry has been attached.
2. The company report merchandise inventory on the balance sheet as:
= $100,000 - $22,000
= $78,000
This is because, when using the market value method, it should be noted that the inventories will be written down to their market value when it is is lower than inventory cost and in situations whereby the market value is higher than inventory cost, there will be no effect given.
3. The company should report cost of goods sold on the income statement as:
= $390000+$22000
= $412,000
4. The accounting principle of conservatism is used here. Conservatism is a policy whereby companies predict possible future losses but they do not anticipate the future gains. It is used by companies on order to play safe. This can be seen here as we wrote down the inventory value when market value is lower than inventory cost.
Related Questions
Suppose that examination of a pro forma reveals that the fifth-year net operating income (NOI) for an income-producing property that you are analyzing is $913,058 (you can assume that this cash flow occurs at the end of the year). If you estimate the projected rental growth rate for the property to be 3% per year, determine the projected sale price of the property at the end of year 5 if the going-out capitalization rate is 8%.
Answers
Answer:
The project sale price at the end of year 5 is $ 11,755,622
Explanation:
Solution
Recall that:
Analyzing an income producing property is = $913,058
The rental rate of growth for the property to be is =3%
At the end of the year 5, the projected sale price of the property if going g-out capitalization is = 8%
Then
we find the projected sales price is given below:
= ( $ 913,058 x 1.03 ) / 0.08
= $940,449.74/0.08
= $ 11,755,622
ThreePoint Sports Inc. manufactures basketballs for the Women’s National Basketball Association (WNBA). For the first 6 months of 2020, the company reported the following operating results while operating at 80% of plant capacity and producing 120,300 units.
Amount Sales $4,571,400
Cost of goods sold 3,713,667
Selling and administrative expenses 534,893
Net income $322,840
Fixed costs for the period were cost of goods sold $960,000, and selling and administrative expenses $257,000.
In July, normally a slack manufacturing month, ThreePoint Sports receives a special order for 10,000 basketballs at $28 each from the Greek Basketball Association (GBA). Acceptance of the order would increase variable selling and administrative expenses $0.75 per unit because of shipping costs but would not increase fixed costs and expenses.
Prepare an incremental analysis for the special order. (Round all per unit computations to 2 decimal places
Answers
Answer:
Incremental profit is $120,500
Explanation:
First and foremost, it is noteworthy that accepting the new order would increase revenue, cost of goods sold as well as the variable selling and administrative expenses.
Selling price per unit=$4,571,400/120,300=$38
variable cost of goods sold per unit=($3,713,667-$960,000)/120,300=$22.89
increase in selling and administrative expenses by unit is $0.75
initial variable selling and administrative expenses per unit=($534,893- $257,000)/120,300=$2.31
revised variable selling and administrative expenses per unit=$2.31 +$0.75=$3.06
Incremental analysis
Increase in revenue($38*10,000) $380,000
increase in cost of goods sold($22.89*10,000) ($228,900)
increase in selling & admin. exp.($3.06*10,000) ($30,600)
incremental profit $120,500
Pearson Motors has a target capital structure of 30% debt and 70% common equity, with no preferred stock. The yield to maturity on the company's outstanding bonds is 12%, and its tax rate is 40%. Pearson's CFO estimates that the company's WACC is 13.70%. What is Pearson's cost of common equity
Answers
Answer:
Cost of common equity is 16.49%
Explanation:
The WACC of weighted average cost of capital is the cost of a firm's capital structure. The capital structure of the firm can comprise of the following components namely debt, preferred stock and common stock.
For a firm which has only debt and equity, the WACC is calculated as follows,
WACC = wD * rD * (1 - tax rate) + wE * rE
Where,
w represents the weight of each componentr represents the cost of each componentwe multiply the cost of debt (rD) by (1 - tax rate) to calculate the after tax cost of debtPlugging in the values of the available components, we can calculate the cost of common equity to be,
0.1370 = 0.3 * 0.12 * (1 - 0.4) + 0.7 * rE
0.1370 = 0.0216 + 0.7 * rE
0.1370 - 0.0216 = 0.7 * rE
0.1154 / 0.7 = rE
rE = 0.164857 or 16.4857% rounded off to 16.49%
Using benefit-cost ratio analysis, determine which one of the three mutually exclusive alternatives should be selected.
Each alternative has a 10-year useful life. Assume a 20% MARR.
A B C
First cost $560 $340 $120
Uniform annual benefit 140 100 40
Salvage value 40 0 0
Answers
Answer:
project C
Explanation:
20% MARR
A B C
First cost $560 $340 $120
Uniform annual benefit $140 $100 $40
Salvage value $40 0 0
yearly cash flows 1 - 9 $140 1 - 10 $100 1 - 10 $40
10 $180
Using an excel spreadsheet I calculated the present value of the project's cash flows: $593.41 $419.25 $167.70
all the NPVs are positive: $33.41 $79.25 $47.70
since we are going to apply a benefit-cost analysis, we must determine the return on investment (ROI) = net profit (or NPV in this case) / investment
ROI A = $33.41 / $560 = 5.97%ROI B = $79.25 / $340 = 23.31%ROI C = $47.70 / $120 = 39.75%Since the return on investment is higher for project C, then that project should be selected.
Del Gato Clinic deposits all cash receipts on the day when they are received and it makes all cash payments by check. At the close of business on June 30, 2017, its Cash account shows an $15,239 debit balance. Del Gato Clinic’s June 30 bank statement shows $14,651 on deposit in the bank.
a. Outstanding checks as of June 30 total $1,745.
b. The June 30 bank statement lists a $95 service charge.
c. Check No. 919, listed with the canceled checks, was correctly drawn for $389 in payment of a utility bill on June 15. Del Gato Clinic mistakenly recorded it with a debit to Utilities Expense and a credit to Cash in the amount of $398.
d. The June 30 cash receipts of $2,247 were placed in the bank’s night depository after banking hours and were not recorded on the June 30 bank statement.
Answers
Answer:
cash account $15,239
bank statement $14,651
reconciliation per bank statement:
bank statement $14,651
+ deposits in transit $2,247
- outstanding checks ($1,745)
reconciled bank statement $15,153
reconciliation per cash account:
cash account $15,239
+ error on check No. 919, $9
- bank service fees ($95)
reconciled cash account $15,153
reconciled bank statement $15,153 = reconciled cash account $15,153
"What is the value today of $1,400 per year, at a discount rate of 10 percent, if the first payment is received 5 years from now and the last payment is received 26 years from today
Answers
Answer:
Present Value= $7,518.22
Explanation:
Giving the following information:
Cash flow= $1,400 per year
Interest rate= 10 percent
Number of years= 21 years
5 years from now a
First, we need to calculate the value of the investment 5 years from now. To do that, we determine the final value and then the present value.
FV= {A*[(1+i)^n-1]}/i
A= annual deposit
FV= {1,400*[(1.10^21)-1]}/0.1
FV= 89,603.50
PV= FV/(1+i)^n
PV= 89,603.50/ (1.1^21)
PV= 12,108.17
Finally, the value today:
PV= 12,108.17/1.1^5
PV= $7,518.22
Daniel deposits $2,000 per year at the end of the year for the next 15 years into an IRA account that currently pays 7%. How much will Daniel have on deposit at the end of the 15 years
Answers
Answer:
$50,258.
Explanation:
According to the scenario, computation of the given data are as follow:-
We can calculate the deposit amount at the end of 15 years by using following formula:-
Deposit Amount per year(PMT) = $2,000
Interest rate = 7% = 0.07
Deposit year (n) = 15 years
Future value(FVIFA) = PMT × [{(1 + interest rate)^number of years - 1} ÷ interest rate]
= $2,000 × [{(1 + 0.07)^15 - 1} ÷ 0.07]
= $2,000 × [{2.7590315 - 1} ÷ 0.07]
= $2,000 × [1.7590315/0.07]
= $2,000 × 25.129022
= $50,258
According to the analysis total deposit at the end of the year is $50,258.
Xenon Inc.’s August 31 bank statement had an ending cash balance of $2,567. On August 31, Xenon’s general ledger showed a balance of $860. After comparing the general ledger to the bank statement the following items were noted: Outstanding checks: $2,250 Interest paid by the bank: $12 An NSF check from one of Xenon’s customers: $32 Deposits in transit: $1,900 A service fee charged by the bank: $8 A direct deposit from a customer: $1400 Check #345 was written at Acme Insurance; the amount of the check was $615. It was recorded in the general ledger for $600.
Prepare a bank reconciliation for Xenon, Inc.
Answers
Answer:
Bank Reconciliation Statement as at August 31
Balance at Bank as per Updated Cash Book $2,281
Add Unpresented Cheques $2,250
Less Lodgements not yet credited ($1,900)
Balance as per Bank Statement $2,631
Explanation:
Step 1 Bring the Cash Book Bank Balance up to date
Debit :
Balance as at August 31, $860
Interest $12
NSF check $32
Direct deposit $1400
Totals $2,304
Credit :
Service fee charged $8
Insurance understated $15
Updated Cash Book Balance (Balancing figure) $2,281
Totals $2,304
Step 2 Prepare the Bank Reconciliation Statement
Bank Reconciliation Statement as at August 31
Balance at Bank as per Updated Cash Book $2,281
Add Unpresented Cheques $2,250
Less Lodgements not yet credited ($1,900)
Balance as per Bank Statement $2,631
Titon Sports, which produces footballs, has two departments: cutting and stitching. Footballs that have undergone the cutting process are immediately transferred to the stitching department. Direct material is added at the end of the stitching process. Conversion costs are added evenly during stitching operations. When those operations are done, the footballs are immediately transferred to Finished Goods. The following is a summary of the March 2019 operations of the stitching department:
Physical Units Transferred-in Costs Direct Materials Conversion Costs
Beginning work in process 17,500 $ 45,360 $0 $17,660
Degree of Completion 100% 0% 60%
Transferred in during March 2019 56,000
Completed and transferred out during March 2019 52,000
Ending work in process 21,500
Degree of Completion 100% 0% 20%
Total costs added during March $154,560 $28,080 $89,310
Required:
a. Suppose Titon Sports uses the weighted average method. What are the equivalent units for direct material costs during March
b. Suppose Titon Sports uses the weighted average method. What is the conversion cost per equivalent unit during March?
c. Suppose Titon Sports uses the weighted average method. What is the total cost assigned to the units completed and transferred out during March?
d. Suppose Titon Sports uses the weighted average method. What is the amount of conversion cost assigned to the ending work in process?
e. Suppose Titon Sports uses the FIFO method. What are the equivalent units for transferred-in costs during March?
f. Suppose Titon Sports uses the FIFO method. What is the direct material cost per equivalent unit during March?
g. Suppose Titon Sports uses the FIFO method. What is the total cost assigned to the ending work in process?
h. Suppose Titon Sports uses the FIFO method. What is the amount of conversion cost assigned to the units completed and transferred out during March?
Answers
Answer:
We find the equivalent units for both Weighted Average Method and FIFO separately for cost calculations . These are given along as required.
Explanation:
Titon Sports
Equivalent Units
Weighted Average Method
Particulars Units % of Completion Equivalent Units
Materials --Conversion Materials --Conversion
Completed and
Transferred 52,000 100% 100% 52,000 52,000
Ending work
in process 21,500 0% 20% Zero 4300
Equivalent Units 52,000 56,300
Particulars Units % of Completion Equivalent Units
Transferred In Transferred In
Completed and
Transferred 52,000 100% 52,000
Ending work
in process 21,500 100% 21,500
Equivalent Units 73500
Particulars Transferred In Materials Conversion Total
Costs
Beginning WIP $ 45,360 $0 $17,660
Total costs added $154,560 $28,080 $89,310
Total Costs 199920 $28,080 106970 $334970
b. Conversion cost per equivalent unit during March
Total Conversion Costs/ Total Equivalent Units Conversion
= 106970/56,300 = $1.9 per Equivalent Unit
Materials cost per equivalent unit during March
Total Materials Costs/ Total Equivalent Units Materials
= 28080/52000 = $ 0.54 per Equivalent Unit
Transferred In cost per equivalent unit during March
Total Transferred In Costs / Total Transferred In Units
= 199920 / 73500 = 2.72
C. Cost Assigned To Transferred Out Goods $ 268,320
Materials = 52,000*0.54= $ 28080
Conversion = 52,000* 1.9= 98800
Transferred in Units = 2.72 * 52000= 141440
Cost Assigned To Ending Work In Process $66650
Conversion = 4300* 1.9= 8170
Transferred in Units = 2.72 * 21500= 58,480
C. Total Costs Assigned = Transferred Out + Ending = $334970
d. Conversion cost assigned to the ending work in process: $8170
Conversion = 4300* 1.9= 8170
We see the difference between the weighted average and FIFO method is that the FIFO method only accounts for the current period costs not the total the costs.Where as the weighted method includes all the costs from preceeding department and also current costs.
e.Titon Sports
Equivalent Units
FIFO Method
Particulars Units % of Completion Equivalent Units
Materials --Conversion Materials --Conversion
Completed and
Transferred 52,000 100% 100% 52,000 52,000
Ending work
in process 21,500 0% 20% Zero 4300
Less
Beg. WIP 17500 0% 60% Zero 10500
Equivalent Units 52,000 45,800
Particulars Units % of Completion Equivalent Units
Transferred In Transferred In
Completed and
Transferred 52,000 100% 52,000
Ending work
in process 21,500 100% 21,500
Less
Beg. WIP 17500 100% 17500
Equivalent Units 56000
f. Materials cost per equivalent unit during March (FIFO)
Total Materials Costs/ Total Equivalent Units Materials
= 28080/52000 = $ 0.54 per Equivalent Unit
g. Cost Assigned To WORK In Process (FIFO) $ 8385
Conversion cost per equivalent unit during March
Total Conversion Costs/ Total Equivalent Units Conversion
= 89310/ 45,800 = $1.95 per Equivalent Unit
Conversion = 4300* 1.95= $ 8385
h. Cost Assigned To Transferred Out Goods $ 273,000
Materials = 52,000*0.54= $ 28080
Conversion = 52,000* 1.95= 101,400
Transferred In cost per equivalent unit during March
Total Transferred In Costs / Total Transferred In Units
= 154560 / 56,000 = 2.76
Transferred in Units Costs = 2.76 * 52000= 143520
You are thinking about renting a room in a house next year with three of your friends. For each month's rent, you are willing to pay $435, your first friend is willing to pay $400, your second friend is willing to pay $560, and your third friend is willing to pay $460. The landlord agrees to offer each of you separate leases but will charge you all the same price: $400. You decide this is a good deal, so you and your friends move in. A couple of months later, you learn from someone who knows the landlord that he would have been willing to rent each room for $350 per month. 1. What is the amount of producer surplus per month?$ 2. What is the amount of total consumer surplus per month? $ 3. What is the amount of total surplus each month? $
Answers
Answer:
1. $200
2. $255
3. $455
Explanation:
Producer surplus is the difference between the least price a producer is willing to sell his product and the price of the good.
Producer surplus = price - least price of the product
$400 - $350 = $50
$50 × 4 = $200
Consumer surplus is the difference between the willingness to pay of a consumer and the price of the good.
Consumer surplus = highest amount a consumer would be willing to pay - price
Consumer surplus for me = $435 - $400 = $35
Consumer surplus for the first friend = $400 - $400 = 0
Consumer surplus for the second friend = $560 - $400 = $160
Consumer surplus for the third friend = $460 - $400 = $60
Total surplus = consumer surplus + producer surplus
Total consumer surplus = $60 + $160 + 0 + $35 = $255
Total surplus = $255 + $200 = $455
I hope my answer helps you
You are a manager for Herman Millera major manufacturer of office furniture. You recently hired an economist to work with engineering and operations experts to estimate the production function for a particular line of office chairs. The report from these experts indicates that the relevant production function is:Q = 2(K)1/2(L)1/2where K represents capital equipment and L is labor. Your company has already spent a total of $8,000 on the 9 units of capital equipment it owns. Due to current economic conditions, the company does not have the flexibility needed to acquire additional equipment. If workers at the firm are paid a competitive wage of $120 and chairs can be sold for $400 each, what is your profit-maximizing level of output and labor usage?
Answers
Answer:
$4000 is the correct answer to the given question .
Explanation:
The marginal cost with compare to the labor can be written as
[tex]MC\ = \frac{dQ}{dL} \\MC =\frac{d\ ( 2(K)1/2(L)1/2\ )}{dL} \\\\MC=\frac{\sqrt{K} }{\sqrt{L} }[/tex]
Here K=9 units putting this value in the previous equation we get
[tex]MC\ = \frac{\sqrt{9} }{\sqrt{L} }[/tex]
[tex]MC=\frac{3}{\sqrt{L} }[/tex]
We can find the value of labor by the given formula that are given below
[tex]V *MC=\ W\\400\ *\frac{3}{\sqrt{L} }\ =120\\ L=10[/tex]
From the given question that are mention in question
Q = 2(K)1/2(L)1/2
Putting the value of K and L in the given equation we get
[tex]Q\ =2 * \sqrt{9} \ * \sqrt{100} \\Q\ = 60[/tex]
So profit maximizing output is =$60 chairs as the chairs can be sold for the $400 each so = $60 * $400 *10=$24000 chairs
As the competitive wage of $120 for 100 units as well as the total of $8,000 on the 9 units of capital equipment
=$20000
Therefore profit-maximizing level of output =$24000-$20000=$4000
Carol Corp. has a component that is a discontinued operation. The revenues and expenses of the component were $100,000 and $160,000, respectively. The component was sold with a resulting gain of $200,000. The tax rate is 40%. What is the total gain or loss on discontinued operations (net-of-tax effects) that will be reported on the income statement
Answers
Answer:
$84,000 gain
Explanation:
Carol Corp total gain or loss on discontinued operation
Revenues $100,000
Expenses $160,000
Components sold $200,000
Hence:
$100,000-$160,000+$200,000
= $140,000
$140,000 * net of tax 60%
= $84,000 gain
The tax rate of 40%
100%-40%=60% as the net tax rate
Bramble Corp. has the following accounts at December 31: Common Stock, $11 par, 5,450 shares issued, $59,950; Paid-in Capital in Excess of Par—Common Stock $33,400; Retained Earnings $47,000; and Treasury Stock, 550 shares, $12,650. Prepare the stockholders’ equity section of the balance sheet
Answers
Answer:
$127,700
Explanation:
Bramble Corp stockholders’ equity section of the balance sheet
Stockholders’ equity
Paid-in Capital
Capital Stock
Common Stock 59,950
Additional Paid-in Stock
Paid-in Capital in Excess of Par Common Stock 33,400
Total paid in Capital 93,350
Retained Earnings 47,000
Total paid in Capital and Retained Earnings 140,350
(93,350+47,000)
LessTreasury Stock 12,650
Total Stockholders’ equity 127,700
(140,350-12,650)
Inventory Valuation under Absorption CostingDuring the most recent year, Judson Company had the following data associated with the product it makes:Units in beginning inventory 300Units produced 14,200Units sold ($300 per unit) 12,700Variable costs per unit: Direct materials $20Direct labor $60Variable overhead $13Fixed costs: Fixed overhead per unit produced $30Fixed selling and administrative $140,000Required:1. How many units are in ending inventory?2. Using absorption costing, calculate the per-unit product cost.3. What is the value of ending inventory under absorption costing?
Answers
Answer:
Instructions are below.
Explanation:
Giving the following information:
Units in beginning inventory 300
Units produced 14,200
Units sold ($300 per unit) 12,700
Variable costs per unit:
Direct materials $20
Direct labor $60
Variable overhead $13
Fixed costs:
Fixed overhead per unit produced $30
Fixed selling and administrative $140,000
1) Ending inventory= units produced + beginning inventory - units sold
Ending inventory= 14,200 + 300 - 12,700
Ending inventory= 1,800
2) The absorption costing method includes all costs related to production, both fixed and variable. The unit product cost is calculated using direct material, direct labor, and total unitary manufacturing overhead.
Unit product cost= 20 + 60 + 13 + 30
Unit product cost= $123
3) Ending inventory= 1,800*123= $221,400
Without authorization, Brady uses the trademark of Ciera Coffee Company to promote cheap, flavorless candy, which is not similar to Ciera's products but diminishes the quality of the coffee company's mark. This is:________.
a. cybersquatting.
b. typosquatting.
c. trademark infringement.
d. trademark dilution.
Answers
Answer:
d. trademark dilution.
Explanation:
-Cybersquatting. is when someone registers a domain with the name of an organization or brand to sell it for a higher price.
-Typosquatting is when someone creates a website with a similar name of a well-known site so people will go to their website when they make a mistake writing the address.
-Trademark infringement is when someone uses a trademark on a similar product without permission from the owner and this can cause confusion to the customers.
-Trademark dilution is a concept that allows the owner to forbid someone from using their brand on a similar product if it can negatively affect the perception people have.
According to this, the answer is trademark dilution because Brady's use of the trademark have a negative impact on the perception people have about the brand.
Required information The following information applies to the questions displayed below.)
Green Wave Company plans to own and operate a storage rental facility. For the first month of operations, the company has the following transactions.
1. January 1 Issue 10,000 shares of common stock in exchange for $35,000 in cash.
2. January 5 Purchase land for $20,500. A note payable is signed for the full amount.
3. January 9 Purchase storage container equipment for $8,300 cash.
4. January 12 Hire three employees for $2,300 per month.
5. January 18 Receive cash of $12,300 in rental fees for the current month.
6. January 23 Purchase office supplies for $2,300 on account.
7. January 31 Pay employees $6,900 for the first month's salaries.
Post each transaction to T-accounts and calculate the ending balance for each account. For each posting, indicate the corresponding transaction number and the appropriate transaction amount. Since this is the first month of operations, all T-accounts have a beginning balance of zero.
Answers
Answer:
Green Wave Company
T-Ledger Accounts:
1. Common Stock Account
Jan. 1 Cash Account $35,000
Cash Account
1. Jan. 1 Common Stock $35,000 3. Jan. 9 Equipment $8,300
5. Jan 18 Rental Fees $12,300 7. Jan. 31 Salaries $6,900
Jan. 31 Balance $32,100
$47,300 $47,300
Feb. 1 Balance $32,100
2. Land Account
Jan. 5 Note Payable $20,500
2. Note Payable Account
Jan. 5 Land $20,500
3. Equipment Account
Jan. 9 Cash $8,300
5. Rental Fees Revenue
Jan. 18 Cash $12,300
6. Office Supplies
Jan. 23 Accounts Payable $2,300
6. Accounts Payable
Jan. 23 Office Supplies $2,300
7. Salaries Expense
Jan. 31 Cash $6,900
Explanation:
T-Ledger accounts are ledger accounts in the form of the letter T. It has debit on the left-hand side and credit on the right-hand side. It is an accounting tool for determining balances.
Which of these behaviors is BEST for managing an intercultural project team?
a. Enter the situation with no knowledge of the local culture and customs to avoid any appearance of bias.
b. Classify members of the project team in accordance with popular stereotypes.
c. Learn alternative means of exchanging information.
d. Foster an atmosphere of inclusivity by ignoring cultural differences.
Answers
Answer:
Foster an atmosphere of inclusivity by ignoring cultural differences.
Explanation:
When we gather a team of individuals from different cultural backgrounds to form a team that undertake tasks to create a unique product or service, its good we acknowledge that differences exist between cultures. We are not expected to assign values to such cultures, terming some as right or wrong, good or bad. Every form of cultural stereotypes or bias much be avoided.
Suppose the long run production function is given by: Q = 4*L +2K2. Marginal product of labor (MPL) = 4 and wage is $10. Marginal product of capital (MPK) = 4K and price of capital (K) is $10. Consider the allocation labor (L) = 10 and capital (K) = 2. Based on information, the MRTS is equal to:_____
a. 4
b. 2.5
c. 1
d. 0.5
Answers
Answer:
ANSWER IS BELOW :)
Explanation:
Not sure, but I think its is 56(6)+k-6
Suppose that on March 1, 2014 Cardullo's purchased an order of German chocolate from a supplier for $250, but didn't pay cash for the order until March 31, 2014. How would you record this transaction at the time of the purchase?
Answers
Answer:
Dr merchandise inventory $250
Cr accounts payable $250
Explanation:
The appropriate thing to do on the transaction date would be to recognize that $250 is being owed to the supplier from whom the German chocolate was bought by crediting accounts payable with $250 and debiting merchandise inventory with the same amount.
Upon payment on 31 March 2014,the accounts payable amount is reversed by a way of debit and cash account credited accordingly with the $250 to show an outflow of cash from the business.
Janice would like to send her parents on a cruise for their 25th wedding anniversary. She has priced the cruise at $15,000 and she has 5 years to accumulate this money. How much must Janice deposit annually in an account paying 10 percent interest in order to have enough money to send her parents on the cruise
Answers
Answer:
Annual deposit= $2,456.96
Explanation:
Giving the following information:
The number of years= 5 years
Final value= $15,000
Interest rate= 10%
We need to calculate the annual deposit to reach the objective. We will use the following formula:
FV= {A*[(1+i)^n-1]}/i
A= annual deposit
Isolating A:
A= (FV*i)/{[(1+i)^n]-1}
A= (15,000*0.1) / [(1.10^5)-1]
A= $2,456.96
Midas Corporation is a sporting goods manufacturer. Most of its energies and resources are devoted to manufacturing and selling a line of sports shoes that has been a reasonable hit in the past. The company rarely undertakes any marketing research studies to assess consumer wants and needs and seldom devises new advertising or promotional strategies. Midas Corporation is exhibiting _____. Selected Answer: Correct production orientation Answers: investor orientation market orientation customer orientation
Answers
Answer:
Production orientation
Explanation:
When a company engages in production orientation it means that they are producing what they believe their customers will purchase simply because they are offering it. The company does not care about their customers' needs and preferences, and simply believes that because they are good at producing a certain type of product that was successful in the past, it will continue to be successful and its customers will remain loyal to them. This philosophy was very popular during the industrial revolution where companies produced what they could hoping that there would be enough customers to buy their production regardless of what it was.
Suppose that your retirement benefits during your first year of retirement are $60,000 per year which is just enough to meet your cost of living during the first year. However, your cost of living is expected to increase at an annual rate of 5% due to inflation. If there is no cost-of-living adjustment in your retirement pension, then some of your future living cost has to come from savings other than retirement pension. If your saving account earns 7% interest a year, how much should you set aside in order to meet this future increase in the cost of living for 25 years
Answers
Answer:
The money side aside in order to meet this future increase in the cost of living for 25 years is $429,060
Explanation:
Solution
Given that:
The first year retirement benefit is = $60,000
Expected increase of cost of living at an annual rate = 5%
Savings earn account = 7%
Now,
We find the the pension current worth
P₁ = $60,000 (P/A, i, n)
= $60,000 (P/A 7%, 25)
$60,000 (11.654)
= 699, 254
Thus,
we compute the current worth of cost of living by applying the factor of geometric series.
P₂ = $60,000 (P/A, g,i, n)
= $60,000 (P/A, 5% 7%, 25)
= $60,000 [ 1-(1+0.05)^25 + (1+0.07)^-25/0.07 -0.05]
= $60,000 (1 - 0.6239/0.02)
=$60,000 (0.3761/0.02)
= $22,566/0.02 =$1,128,300
Now, we calculate the money that will be saved
Which is $1,128,300 - $699,254
= $429,060
The beginning cash balance is $15,000. Sales are forecasted at $800,000 of which 80% will be on credit. 70% of credit sales are expected to be collected in the year of sale, 28% in the year thereafter. Cash expenditures for the year are forecasted at $475,000. Accounts Receivable from previous accounting periods totaling $9,000 and will all be collected in the current year. The company is required to make a $15,000 loan payment on the last day of every year.. Compute the excess of cash receipts over cash disbursements during the current year.
Answers
Answer:
$127,000
Explanation:
Cash sales=1-80%=20%*$800,000=$160,000.00
Credit sales collection=($800,000-$160,000)*70%=$448,000.00
Accounts receivable from previous year=$9,000
Total cash receipts=$160,000+$448,000+$9,000=$ 617,000.00
Total cash payments= cash expenditure+loan payment
cash expenditures is $475,000
loan payment is $15,000
total cash payments=$475,000+$15,000=$490,000
excess of cash receipts over cash disbursements=$617,000-$490,000=$127,000
Consider the following production data for Alternatives A and B in a firm that uses a 10% interest rate. Annual fixed cost per unit Alt A - $ 2 million Alt B - $ 3.5 million Annual variable cost per unit Alt A - $ 850 Alt B - $250 If the company is going to produce 4000 units annually, which alternative should be chosen? a. Alt. A b.Neither alternative should be chosen because the negative cash flows are greater than the positive cash flows for both alternatives. c. This problem cannot be solved because there is not enough data given. d. Alt. B
Answers
ANSWER: This problem cannot be solved because there is not enough data given. Option C is the most correct option.
EXPLANATION: when setting up a business, we consider all alternative of production, and determine the one that has a lower cost and still gives the best output, that is optimization.
For the question: it cannot be solved because of the negative sign in the cost, which needs to be explained further in the question. This cost cannot be entered into book keeping unless more explanation is given to the negative sign, as cost is not revenue. It is the money spent already and should have a positive sign.
In July, one of the processing departments at Okamura Corporation had beginning work in process inventory of $26,000 and ending work in process inventory of $31,000. During the month, the cost of units transferred out from the department was $161,000. In the department's cost reconciliation report for July, the total cost to be accounted for under the weighted-average method would be:
Answers
Answer:
$192,000
Explanation:
Using the weighted-average method the Costs to be accounted for will be:
Cost of ending work in process inventory$31,000
Add Cost of units transferred out $161,000
Total cost accounted for$192,000
Therefore using the Weighted average method the cost to be accounted for will be $192,000
Heather Hudson makes stuffed teddy bears. Recent information for her business follows: Selling price per bear$35.00 Total fixed cost per month 1,500.00 Variable cost per bear 24.00 Determine the degree of operating leverage if she sells 350 bears this month. (Round your answer to 2 decimal places.) 35.00
Answers
Answer:
1.64
Explanation:
Heather Hudson degree of operating leverage
Formula for degree of operating leverage will be:
Degree of Operating Leverage = Total Contribution Margin / Net Operating Income
Total CM = (35-24) * 350
= 3,850
Formula for Net operating income
Net Operating income = Contribution Margin – Fixed Costs
= 3,850 – 1,500 =2,350
Therefore:
Operating Leverage =
3,850/2,350
= 1.64
Answer:
1.64
Explanation:
Heather Hudson is a manufacturer of stuffed teddy bears, the following are the current information gotten from her business
Selling price of the bear= $35
Total fixed cost per month= 1,500
Variable cost for one near= 24
The formular used to calculate the degree of operating leverage is
= Total contribution margin/ Net operating income
First of all we have to find the Total contribution margin
= (35-24)×350
= 11×350
= 3,850
Total contribution cost = 3,850
The next step is to find the Net operating income
= Contribution margin-fixed costs
= 3,850-1,500
= 2,350
Therefore the degree of operating leverage is
= 3,850/2350
= 1.64
Hence Heather Hudson degree of operating leverage if she sells 350 bears for a month is 1.64
Assume yourself as a Marketing Specialist of a Company and Determine the New Product Development Process by manufacturing a New Product for your company.
Answers
Explanation:
Assuming my company produces body care products and decides to introduce a new product–a toothbrush, the development process would involve:
1. Idea Generation:
It smbegins with an idea or imagination of what the ideal toothbrush would be, what problem would it solve for consumers. The idea could be random or it could be as a result of an identified need.
2. Idea Evaluation:
Remember, it is one thing to have an idea but another to have an idea that would work. Therefore, quality time would be taken to separate workable ideas about the ideal toothbrush from bad ones. This idea evaluation process is a very useful stage in the product development process.
3. Concept Development and Testing:
Remember, testing the concept about the new toothbrush allows for an expanded idea. The prototype of the toothbrush would be tested with consumers to find out whether the idea is worth the effort. Their feedback would be noted to improve the product further.
4. Marketing strategy
5. Final Product development
Brockman Corporation's earnings per share were $3.50 last year, and its growth rate during the prior 5 years was 9.0% per year. If that growth rate were maintained, how many years would it take for Brockman's EPS to triple
Answers
Answer:
12.75 years
Explanation:
Solution
Recall that:
The earnings of Brockman Corporation per share is =$3.50
The growth rate in 5 years = 9.0%
Now,
We apply this formula which is stated below:
A=P(1+r/100)^n
P = present value
n = period of time
r = the rate of interest
Thus,
(3*3.5)=3.5*(1.09)^n
3=(1.09)^n
By applying long on either side we have the following
log 3=n*log (1.09)
n=log 3/log (1.09)
Approximately, this is equal to =12.75 years
Therefore, it will take Brockman's EPS to triple in 12 .75 years.
You are the manager of a retail store. You believe the economy is in a recession and that sales for the month will be unusually slow. Since you have complete discretion over the pricing at your location, you decide to have a store-wide sale and offer ten percent off all merchandise for a three-day period. You don't expect your superiors to criticize this decision as you believe they, along with the majority of the other store managers, feel the same way about the economy as you do. Which one of the following applies to you?
Answers
Explanation:
In the scenario described above, it can be identified that the behavioral characteristic of the manager is that he is an aggressive person.
This type of behavior has as main characteristics the expression of your ideas, needs and feelings to the detriment of those of other people, this can be seen in the question in the excerpt that says that the manager made an important decision for the business without consulting his superiors because you believe they feel the same way about the economy as you do.
Although this aggressive behavior can sometimes be expressive, it can also lead to hostility.
Games Galore Corp. hires Haley, a minor, to create new customized game software for certain clients. Haley signs a contract that requires her to work for Games Galore for eighteen months. Before beginning work, however, Haley tells Games Galore that she will not create new software for Games Galore and that she is going to work for Ideal Worldcraft, Inc., a Games Galore competitor. Is Games Galore's contract with Haley enforceable? Why or why not?
Answers
Explanation:
In the scenario exemplified in the question above, it can be said that because he is a minor, Haley's contract with Games Galore can be canceled.
Therefore, if the case is brought to court, it will likely be determined that Haley will return the valuable work materials provided by Game Galore and any amounts received by Haley that were provided for in the contract.