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)
Clemens Cars’s job cost sheet for Job A40 shows that the cost to add security features to a car was $11,000. The car was delivered to the customer, who paid $15,700 in cash for the added features. What journal entries should Clemens record for the completion and delivery of Job A40?
Answer:
Clemens Cars’s Journal entry
1.
Dr Finished goods inventory $11,000
Cr Work in process inventory $11,000
2.
Dr Cost of goods sold $11,000
Cr Finished goods inventory $11,000
3.
Dr Cash $15,700
Cr Sales revenue $15,700
Explanation:
Based on the information given above in which Clemens Cars’s job cost sheet shows that the cost to add security features to a car was $11,000 which means we have to record cost of completed jobs to FG by Debiting Finished goods inventory with $11,000 and Crediting Work in process inventory with the same amount and as well record cost of goods sold by debiting Cost of goods sold with $11,000 and crediting Finished goods inventory with the same amount.
Since the car was delivered to the customer, who paid $15,700 in cash for the added features which means we have to record sale price of job by Debiting Cash with $15,700 and Crediting Sales revenue with the same amount.
Lupore Fabrics obtained a contract in Watts Mills, South Carolina that involves the production of materials for military uniforms, a project contracted with the federal government for $2,800,000. What laws govern the wages Lupore Fabrics pays to its workers for this project
Answer:
The laws are:
1.The Davis-Bacon Act of 1931
2.Walsh-Healey Act of 1936
3.Fair Labor Standards Act of 1938 (FSLA)
Explanation:
1. The Davis-Bacon Act of 1931 federal law makes it mandatory that on-site workers receive certain wages, benefits, and overtime sets the minimum wage for federal government construction contracts that are above $2,000.
2. Walsh-Healey Act of 1936 : establishes the minimum wage for federal government construction contracts that are above $15,000 and involve the manufacturing of materials, supplies and equipment.
3. Fair Labor Standards Act of 1938: sets the federal minimum wage that applies in all the country, and other regulation when people work over 40 hours a week.
The owner of Showtime Movie Theaters, Inc., would like to predict weekly gross revenue as a function of advertising expenditures. Historical data for a sample of eight weeks are entered into the Microsoft Excel Online file below. Use the XLMiner Analysis ToolPak to perform your regression analysis in the designated areas of the spreadsheet. Open spreadsheet Develop an estimated regression equation with the amount of television advertising as the independent variable (to 2 decimals). Revenue = + TVAdv Develop an estimated regression equation with both television advertising and newspaper advertising as the independent variables (to 2 decimals). Revenue = + TVAdv + NewsAdv Is the estimated regression equation coefficient for television advertising expenditures the same in part (a) and in part (b)? Predict weekly gross revenue for a week when $4.9 thousand is spent on television advertising and $3.9 thousand is spent on newspaper advertising (to 2 decimals)?
Answer:
The predicted value of Revenue is $98.24.
Explanation:
The data provided is for the weekly gross revenue, the amount of television advertising and the amount of newspaper advertising.
Determine the regression equation developed to estimate the amount of weekly gross revenue based on television advertising using Excel.
Consider the Excel image for Summary Output for Weekly Revenue Vs. T.V. Adv.
The estimated regression equation with the amount of television advertising as the independent variable is:
Revenue = 89.31 + 1.27 TVAdv
Consider the Excel image for Summary Output for Weekly Revenue Vs. T.V. Adv. & News Adv.
The estimated regression equation with both television advertising and newspaper advertising as the independent variables is:
Revenue = 83.78 + 1.78 TVAdv + 1.47 NewsAdv
For TVAdv = $4.9 and NewsAdv = $3.9 predict the value of Revenue as follows:
[tex]\text{Revenue} = 83.78 + 1.78\ \text{TVAdv} + 1.47\ \text{NewsAdv}[/tex]
[tex]=83.78 + (1.78 \times 4.9) + (1.47 \times 3.9)\\\\=98.235\\\\\approx 98.24[/tex]
Thus, the predicted value of Revenue is $98.24.
Purchase-Related Transactions
Stylon Co., a women's clothing store,
purchased $48,000 of merchandise from a supplier on account, terms FOB destination, 2/10, n/30, using the net method under a perpetual inventory system. Stylon returned merchandise with an invoice amount of $7,500, receiving a credit memo.a. Journalize Stylon's entry to record the purchase. If an amount box does not require an entry, leave it blank.
b. Journalize Stylon's entry to record the merchandise return. If an amount box does not require an entry, leave it blank.
c. Journalize Stylon's entry to record the payment within the discount period of 10 days. If an amount box does not require an entry, leave it blank.
d. Journalize Stylon's entry to record the payment beyond the discount period of 10 days. If an amount box does not require an entry, leave it blank.
Answer:
A.
Dr merchandise inventory 47,040
Cr Account payable 47,040
B.
Dr Account payable 7,350
Cr merchandise inventory 7,350
C.
Dr Account payable 39,690
Cr Cash 39,690
D.
Dr Account payable 39,690
Dr Purchase discount 810
Cr cash 40,500
Explanation:
Stylon Co. Journal entry
A.
Dr merchandise inventory 47,040
Cr Account payable 47,040
(48,000-(48,000×2%)
B.
Dr Account payable 7,350
Cr merchandise inventory 7,350
(7500-(7500×2%)
C.
Dr Account payable 39,690
Cr Cash 39,690
(47,040-7,350)
D.
Dr Account payable 39,690
Dr Purchase discount 810
(48000-7500)×2%
Cr cash 40,500
Answer:
Stylon Co.
Journal Entries:
a) Debit Inventory $48,000
Credit Accounts Payable $48,000
To record good purchased: terms, FOB destination, 2/10, n/30.
b) Debit Accounts Payable $7,500
Credit Inventory $7,500
To record return of merchandise.
c) Debit Account Payable $40,500
Credit Cash Discount $810
Credit Cash Account $39,690
To record payment to suppliers within 10 days.
d) Debit Account Payable $40,500
Credit Cash Account $40,500
To record payment to suppliers after 10 days.
Explanation:
a) Journal entries are made when transactions take place to recognize them in the books of accounts. They show which account is debited and which is credited in the Ledger.
b) Under the perpetual inventory system, the purchase and return of merchandise are recorded in the Inventory Account in order to strike a continuous balance per each transaction. It is unlike the periodic inventory system which records purchase and return of merchandise in the Purchases Account. Inventory is then accounted for when a physical count is carried out at the end of the period.
If supply rises by more than demand rises, equilibrium price will and equilibrium quantity will .is the difference between maximum buying price and price paid.Producers’ surplus is the difference between and selling price.
Answer: 1. Decrease and Increase
2. Consumer Surplus
3. Prize Received and Minimum
Explanation:
1. When the supply of a good outweighs the demand of the good then the prices will fall as a result. The law of Supply and Demand shows that when Supply rises for a good, there are more sellers and therefore the price reduces due to the fact that the good is not very rare. That is the situation when Supply is higher than demand, prices will DECREASE because there is an INCREASE in the quantity of goods in the market. I have attached a graph to explain it better.
2. Consumer Surplus is known as the difference between what you as a consumer are willing to pay for a good and what you actually pay for it. If what you're willing to pay for it is more than what you actually pay for it then it is positive and it is a good thing for you because it means you spend less.
3. Producers’ surplus is the difference between PRIZE RECEIVED and MINIMUM selling price.
The Producer surplus is the difference between what was actually paid for a good or service minus the minimum price that the producer was willing to accept for it. Again, if this is positive then it is a good thing for the Producer because it means that they make a good profit. If it is negative then even though it doesn't necessarily mean that they made a loss, it could mean that that transaction wasn't viable.
Based on the following data for the current year, what is the number of days' sales in inventory (rounded to one decimal place)? Assume 365 days a year. Sales on account during year $500,771 Cost of goods sold during year 221,222 Accounts receivable, beginning of year 42,436 Accounts receivable, end of year 51,937 Inventory, beginning of year 30,786 Inventory, end of year 41,508 a.59.6 b.50.8 c.68.5 d.119.3
Answer:
Option A. The number of days' sales in inventory 59.6 days.
Explanation:
Opening inventory = $ 30,786
Closing inventory = $ 41,508
Average inventory = (Opening inventory + closing inventory) ÷ 2
= ($ 30,786 + $ 41,508) ÷ 2
= $ 72,294 ÷ 2
= $ 36,147
Day sales in inventory = (Average inventory × 365) ÷ cost of goods
= ($ 36,147 × 365) ÷ $ 221,222
= $ 13,193,655 ÷ $ 221,222
= 59.64
Gilberto is a hard-working college freshman. One Tuesday, he decides to work nonstop until he has answered 250 practice problems for his physics course. He starts work at 8:00 AM and uses a table to keep track of his progress throughout the day. He notices that as he gets tired, it takes him longer to solve each problem. Time Total Problems Answered 8:00 AM 0 9:00 AM 100 10:00 AM 175 11:00 AM 225 Noon 250 Use the table to answer the following questions. The marginal, or additional, gain from Gilberto’s first hour of work, from 8:00 AM to 9:00 AM, isproblems. The marginal gain from Gilberto’s third hour of work, from 10:00 AM to 11:00 AM, isproblems. Later, the teaching assistant in Gilberto’s physics course gives him some advice. "Based on past experience," the teaching assistant says, "working on 62.5 problems raises a student’s exam score by about the same amount as reading the textbook for 1 hour." For simplicity, assume students always cover the same number of pages during each hour they spend reading. Given this information, in order to use his 4 hours of study time to get the best exam score possible, how many hours should he have spent working on problems, and how many should he have spent reading?
A. 0 hours working on problems, 4 hours reading
B. 1 hour working on problems, 3 hours reading
C. 2 hours working on problems, 2 hours reading
D. 4 hours working on problems, 0 hours reading
The time that Gilberto should divide from 4 hours among reading and solving problems would be:
B). 1 hour working on problems, 3 hours reading
Study-Time
As a student, it is very crucial to separate your study time effectively to produce the desired outcome. In this situation, it is given that;Solving around 62.5 problems gives the equal enhancement in the score as reading the text for 1 hour. Therefore, Gilberto should spend the majority in reading the text to increase his score by gaining knowledge i.e. 3 hours and 1 hour on solving the obstacles/problems that he faces.Thus, option B is the correct answer.
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The following data represent quantities of tea leaf pluckings (tender shoots from tea plants) from sixteen different plots of tea bushes intended for experimental use in Ceylon, a type of tea from Sri Lanka. The tea bushes are randomly divided into four different treatment groups. Experimenters wish to determine if the mean number of pluckings differs among the four treatments. Test this using 5% significance, assuming that these samples are drawn from normal populations with equal variances. Treatment 1 Treatment 2 Treatment 3 Treatment Pluckings Pluckings Pluckings Pluckings 88 102 91 88 94 110 109 118 109 110 115 94 88 102 91 961. Give the null and alternative2. What is the value of the F-test statistic? Add the F-test statistic to the graph and shade the right tail. Use technology to determine the P-value for this hypothesis test. 3. What does the P-value tell you about the null and alternative hypotheses? 4. State a conclusion in the context of this problem.
Answer:
Explanation:
1)[tex]H_0[/tex] : All group means equal or [tex]\mu _1=\mu _2=\mu _3=\mu _4[/tex]
[tex]H_1:\mu 1=\mu 2=\mu 3\neq \mu 4[/tex]
At least one of the treatment group means are different
ANOVA TABLE
Source of Variation SS df MS F P-value F crit
Between Groups 213.5 3 71.16667 0.65 0.5975 3.490295
Within Groups 1312.5 12 109.375
MSB = SSB / DFB = 71.16667
MSE = SSE / DFE = 109.375
F = MSB / MSE = 0.650667
3) P-value: 0.597576
The test statistic is not significant and failed to reject the null hypothesis.
4) The test statistic is not significant. So, there is no evidence to conclude that there is a difference between groups.
Overton Company has gathered the following information.
Units in beginning work in process 20,000
Units started into production 164,000
Units in ending work in process 24,000
Percent complete in ending work in process:
Conversion costs 60%
Materials 100%
Costs incurred:
Direct materials $101,200
Direct labor $164,800
Overhead $184,000
Instructions
(a) Compute equivalent units of production for materials and for conversion costs.
(b) Determine the unit costs of production.
(c) Show the assignment of costs to units transferred out and in process.
Answer:
Kindly check attached picture for detailed computations of section a, b and c.
Clara and Nathan have planned to merge their companies. They have met to put forth their respective proposals and the rationale behind the proposals. Also, both Clara and Nathan have made their interests and expectations from the merger obvious to each other. Which of the following stages of negotiation are Clara and Nathan in at present?
A. Planning and preparation
B. Defining ground rules
C. Clarification and justification
D. Closure and implementation
Answer:
The correct answer is the option C: Clarification and justification.
Explanation:
To begin with, in the stage of clarification and justification of the negotiation process the parties do not need to be argumentative but instead they need to be educative to each other by showing the other what are the reasonable statements that are established in order to proove their positions on each argument done before. That is why, in this stage the positions of each party are discussed at length in order to comprehend what every party is supporting for and that is why this stage is called of ''justification''.
A financial bubble starts to inflate when:________
a) investors become irrationally optimistic that an asset's price will continue to rise.
b) investors become irrationally pessimistic that an asset needs to be sold immediately.
c) a good experiences a rise in demand that is unexplained, increasing its price.
d) inflation begins to accelerate, and monetary and fiscal policy are ineffective at slowing its growth.
Answer:
a) investors become irrationally optimistic that an asset's price will continue to rise.
Explanation:
A financial bubble starts to inflate when investors become irrationally optimistic that an asset's price will continue to rise. This causes these investors to throw money into the investments without any prior investigation for fear of missing out on the potential profits. This causes the price of the investment to rise drastically as more and more individuals invest until it reaches a tipping point, and those that invested at the very start begin to sell their investment options and take profit. Which causes the "bubble" to pop and the price comes crashing down.
Finley Company
End-of-Period Spreadsheet
For the Year Ended December 31
Adjusted Trial Balance Income Statement Balance Sheet
Account Title Debit Credit Debit Credit Debit Credit
Cash 16,000 16,000
Accounts Receivable 6,000 6,000
Supplies 2,000 2,000
Equipment 19,000 19,000
Accumulated Depr. 6,000 6,000
Accounts Payable 10,000 10,000
Wages Payable 2,000 2,000
Common Stock 5,000 5,000
Retained Earnings 11,640 11,640
Dividends 1,000 1,000
Fees Earned 40,291 40,291
Wages Expense 20,072 20,072
Rent Expense 5,057 5,057
Depreciation Expense 5,802 5,802
Totals 74,931 74,931 30,931 40,291 44,000 34,640
Net Income (Loss) 9,360 9,360
40,291 40,291 44,000 44,000
The ending balance of retained earnings is
a. $16,640
b. $0
c. $9,360
d. $20,000
Exercise 5-19A Recording sales, purchases, shipping, and returns: buyer and seller-periodic LO P5 Sydney Retailing (buyer) and Troy Wholesalers (seller) enter into the following transactions. May 11 Sydney accepts delivery of $35,000 of merchandise it purchases for resale from Troy: invoice dated May 11, terms 3/10, n/90, FOB shipping point. The goods cost Troy $23,450. Sydney pays $690 cash to Express Shipping for delivery charges on the merchandise. 12 Sydney returns $2,800 of the $35,000 of goods to Troy, who receives them the same day and restores them to its inventory. The returned goods had cost Troy $1,876. 20 Sydney pays Troy for the amount owed. Troy receives the cash immediately. Assume that both buyer and seller use a periodic inventory system and the gross method. 1. Prepare journal entries that Sydney Retailing (buyer) records for these three transactions. 2. Prepare journal entries that Troy Wholesalers (seller) records for these three transactions.
Answer and Explanation:
The Journal entries are shown below:-
1. Inventory Dr, $35,000
To Accounts Payable $35,000
(Being merchandise purchase on credit is recorded)
2. Freight-in Dr, $690
To Cash $690
(Being payment of delivery charges is recorded)
3. Accounts Payable Dr, $2,800
To Purchase returns and allowances Accounts Payable $2,800
(Being return of merchandise on credit is recorded)
4. Accounts Payable Dr, $32,200 ($35,000 - $2,800)
To Purchase discounts $1,050 ($35,000 × 3%)
To Cash $31,150
(Being cash payment is recorded)
5. Accounts Receivable Dr, $35,000
To Sales $35,000
(Being merchandise sale on credit is recorded)
6. Sales Return Dr, $2,800
To Accounts receivable $2,800
(Being return of merchandise on credit is recorded)
7. Cash Dr, $31,150 ($35,000 - $2,800 - $1,050)
Sales discount Dr, $1,050
To Accounts Receivable $30,100
(Being cash received is recorded)
A Calculate inventory amounts when costs are rising (LO6-3)
[The following information applies to the questions displayed below.]
During the year, TRC Corporation has the following inventory transactions. Date Transaction Number of Units Unit Cost Total Cost Jan. 1 Beginning inventory 58 $ 50 $ 2,900 Apr. 7 Purchase 138 52 7,176 Jul. 16 Purchase 208 55 11,440 Oct. 6 Purchase 118 56 6,608 522 $ 28,124 For the entire year, the company sells 444 units of inventory for $68 each. Exercise 6-4A Part 1 Required: 1. Using FIFO, calculate ending inventory, cost of goods sold, sales revenue, and gross profit.
Answer:
Using FIFO to calculate inventory amounts when costs are rising:
Unit Unit Cost Total Cost
Jan. 1 Beginning inventory 58 $ 50 $ 2,900
Apr. 7 Purchase 138 52 7,176
Jul. 16 Purchase 208 55 11,440
Oct. 6 Purchase 118 56 6,608
522 $ 28,124
b) Less Cost of Sales 444 $ 23,756
a) Ending Inventory 78 56 $ 4,368
c) Sales 444 68 $30,192
Cost of Goods Sold 444 $23,756
d) Gross Profit $6,436
Explanation:
FIFO is one of the methods for computing inventory. It is First in, First Out based on the concept that goods that were purchased first would be the first to be sold. When there are rising prices and goods are of perishable nature, it makes sense to sell the goods that were bought first.
Joe makes an hourly salary of $8.10 for 40 regular hours of work. For each hour worked over 40 hours, he is paid at a rate of $12.15 per hour. Last week Joe worked 45 hours. He has withholdings of social security tax (6.2%), medicare tax (1.45%), federal tax ($61.12), state tax ($21.03), city tax ($6.01), pension ($4.12), disability insurance ($1.31), medical insurance ($13.05), and dental insurance ($5.46).
a. What is Joe’s Medicare tax deduction?
b. What is Joe’s Social Security deduction?
c. What is Joe’s Medicare tax deduction?
d. Joe’s other deductions are: federal tax 21.03, city tax 4.12, disability insurance 13.05, and dental insurance $5.46.
What are Joe’s total deductions for this pay period?
e. What is Joe’s net pay for this pay period?
f. If Joe pays the same amount for medical insurance each weekly pay period, what is his annual premium?
g. Does Joe receive time-and-a-half, double-time, or triple-time for each hour of overtime?
Answer:
a. What is Joe’s Medicare tax deduction?
$384.75 x 1.45% = $5.58b. What is Joe’s Social Security deduction?
$384.75 x 6.2% = $23.85c. What is Joe’s Medicare tax deduction?
$384.75 x 1.45% = $5.58d. Joe’s other deductions are: federal tax 21.03, city tax 4.12, disability insurance 13.05, and dental insurance $5.46.
What are Joe’s total deductions for this pay period?
$23.85 + $5.58 + $21.03 + $4.12 + $13.05 + $5.46 = $73.09e. What is Joe’s net pay for this pay period?
$384.75 - $73.09 = $311.66f. If Joe pays the same amount for medical insurance each weekly pay period, what is his annual premium?
$13.05 x 52 = $678.60g. Does Joe receive time-and-a-half, double-time, or triple-time for each hour of overtime?
time and a halfExplanation:
total gross salary = (40 x $8.10) + (5 x $12.15) = $384.75
The Old Age, Survivors, and Disability Insurance (OASDI) program is known as "Social Security" in the US. The correct options are provided below:
a. Joe’s Medicare tax deduction is $384.75 x 1.45% = $5.58
b. Joe’s Social Security deduction is $384.75 x 6.2% = $23.85
c. Joe’s Medicare tax deduction is $384.75 x 1.45% = $5.58
d. Joe’s other deductions are a federal tax 21.03, a city tax 4.12, disability insurance 13.05, and dental insurance of $5.46.
Joe’s total deductions for this pay period are $23.85 + $5.58 + $21.03 + $4.12 + $13.05 + $5.46 = $73.09.
e. Joe’s net pay for this pay period is $384.75 - $73.09 = $311.66
f. His annual premium is $13.05 x 52 = $678.60.
It is managed by the Social Security Administration (SSA), a government organization. Although it is most recognized for its retirement benefits, it also offers income for handicapped employees and survivor benefits.
A federal program in the United States called Social Security offers retirement benefits and disability income to eligible individuals, as well as to their spouses, children, and survivors.
Social Security retirement benefits are only available to those who have paid into the system for at least ten years and are at least 62 years old. Higher monthly benefits are offered to those who delay taking Social Security benefits until they are 70.
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Below is information regarding inventory purchased and sold by Pikes Peak Tea Company: Pikes Peak had no beginning inventory in 2016, and during 2016 it purchased inventory of 100 tea kettles for $60 each. In 2017, Pikes Peak Tea Company sold 80 tea kettles for a retail price of $90 each. In 2018, the replacement cost of the tea kettles changed to $50 per tea kettle. Pikes Peak did not sell any inventory in 2018. Which of the following statements are correct for Pikes Peak Tea Company?
I. Pikes Peak would have a total ending inventory of $1,200 at the end of 2018
II. Pikes Peak would record a credit to inventory for a total of $4,800 in 2017
III. Pikes Peak would record a debit to cost of goods sold for $200 in 2018
a. I, II, and Ill are all correct statements
b. ll and Ill are the only correct statements, not
c. I and II are the only correct statements, not III
d. III is the only correct statement, not I and II
e. ll is the only correct statement, not I or III
Answer:
The correct answer is option (c) I and II are the only correct statements, not III
Explanation:
Solution
Given:
From the question stated, we are to find the correct Pikes Peak Tea Company.
Now,
Just As the pikes peal tea company purchased 100 kettles at $60 each and sold it for 80 kettles
Hence, the company had 20 kettles that was priced at at 60 each that is, $1,200. then, the Inventory resulted to $4,800 (80 * $60) and sold by the company and has to be credited in the Inventory ledger.
Jumpin Corporation uses the percentminusofminussales method to estimate uncollectibles. Net credit sales for the current year amount to $ 2 comma 100 comma 000, and management estimates 3% will be uncollectible. The Allowance for Uncollectible Accounts prior to adjustment has a debit balance of $ 1 comma 800. The amount of UncollectibleminusAccount Expense reported on the income statement will be:
Answer:
The amount of Uncollectible Account Expense reported on the income statement will be: $ 64,800
Explanation:
Jumpin Corporation
Percent of Sales method
Net credit sales $ 2 100 000,
Un collectible estimated 3%
Un collectibles Accounts = 3% of $ 2 100,000, = $ 63,000
Unadjusted Allowance for Un collectible Accounts $ 1, 800 Dr.
Required Adjustment = $ 64,800
The amount of Un collectible Account Expense reported on the income statement will be: $ 64,800
In the percent of sales method emphasis is laid on the matching principle in the income statement and amount of bad debts expense is subtracted from the accounts receivables.
Blain is buying a home for \$325,000.t His interest rate on the loan will be 3.6 for 30 years. He will have a down payment of $15,000. What is the LTV on the loan
Answer:
95.38%
Explanation:
The loan-to-value ratio compares the mortgage amount to the value of the home purchased using the mortgage loan.
Mortgage amount=purchase price of the home-down payment
purchase price is $325,000
down payment is $15,000
mortgage amount=$325,000-$15,000=$310,000
loan-to-value ratio=mortgage amount/home value=$310,000/$325,000=95.38%
The LTV rounded to two decimal places is 95.38%
This implies that 95% of the home value is financed by mortgage while 5% was financed by the home owner
A market maker faces the following demand and supply for widgets. Eleven buyers are willing to buy at the following prices: $15, $14, $13, $12, $11, $10, $9, $8, $7, $6, $5. Eleven sellers are also willing to sell at the same prices. If the market maker is free to choose the number of transactions he can make, what is his maximum profit
Answer:
maximum profit ($30 in total) is obtained by selling 5 units
Explanation:
if the market maker buys and sells one unit, his/her profit = $15 - $5 = $10if the market maker buys and sells two units, his/her profit = $10 + ($14 - $6) = $18if the market maker buys and sells three units, his/her profit = $18 + ($13 - $7) = $24if the market maker buys and sells four units, his/her profit = $24 + ($12 - $8) = $28if the market maker buys and sells five unit, his/her profit = $28 + ($11 - $9) = $30the maximum profit per unit is obtained by selling only 1 unit, but the total maximum profit is obtained by selling 5 units.
Perry Mayson, a single taxpayer, graduated law school last year with quite a bit of qualified student loan debt and ends up paying $4,300 in interest on the loan in the current tax year. Fortunately, Perry is well compensated and earns adjusted gross income of $90,000 during the current year. Perry may deduct his student loan interest in the current year.
A. True
B. False
Answer:
False
Explanation:
Adjusted gross income (AGI) refers to the measure of income calculated from gross income. It is used to determine how much of an individual's income is taxable. It affects a taxpayer's eligibility to claim many of the deductions and credits available on the tax return.
Gross income is the total money earned by an individual in a year, which includes wages, dividends, alimony, capital gains, interest income, royalties, rental income, and retirement distributions.
Modified Adjusted Gross Income (MAGI) is the adding back of certain items such as foreign earned income and tax-exempt student loan interest.
The amount for MAGI where student loan can be deducted is is $80,000.
Perry may not deduct his student loan interest in the current year because his AGI has exceeded the $80,000 threshold.
Answer:
B. False
Explanation:
Since Perry Mayson is well compensated and earns adjusted gross income of $90,000 during the current year. Perry cannot deduct his student loan interest in the current year because his gross income of $90,000 has exceeded the maximum benchmark or threshold (MAGI) appropriate for the deduction of student loan interest.
For single taxpayers in the United States of America, the maximum benchmark or threshold appropriate for the deduction of student loan interest is $80,000.
Hence, if a student's Modified Adjusted Gross Income (MAGI) is below $80,000; then student loan interest can be deducted.
Suppose that Lil John Industries’ equity is currently selling for $35 per share and that 2.8 million shares are outstanding. The firm also has 58,000 bonds outstanding, which are selling at 104 percent of par. Assume Lil John was considering an active change to its capital structure so that the firm would have a (D/E) of 1.3.
Which type of security (stocks or bonds) would it need to sell to accomplish this? Sell bonds and buy back stock Sell stock and buy back bonds How much would the firm have to sell?
Answer:
Explanation:
Given that :
Current share price = $35
Share outstanding = 28,000, 000
Bond outstanding = 58,000
current bond price = 104 % par value
Default par value of the bond = $1000
Target Debt /Equity ratio = 1.3
The type of security (stocks or bonds) it would need to sell to accomplish this is as follows:
Total debt = current bond price × bonds outstanding
= 104% par value × 58000
= 104 % × 1000 × 58000
= $ 60,320,000
Total equity = current share price × shares outstanding
Total equity = 35 × 28,000,000
Total equity = $ 98,000,000
Current debt-equity ratio = Total debt/ total equity
= $ 60,320,000/ $ 98,000,000
= 0.62
Hence , the current debt ration is 0.62 which is less than the target 1.3. Thus, the company needs to issue debt bonds to buy-back shares to make changes in the capital structure in order to achieve the target capital structure of 1.3
How much to be sold to achieve the target capital structure of 1.3
Total Value = Debt + Equity
Total Value = 60,320,000 + 98,000,000
Total Value = 158,320,000
Current debt ratio = Debt/total value
Current debt ratio = 60,320,000/158,320,000
Current debt ratio = 0.381
Required debt ratio = Target dent ratio/1+ target debt ratio
Required debt ratio = 1.3/1+1.3
Required debt ratio = 1.3/2.3
Required debt ratio = 0.5652
Debt to be sold = (Target debt ratio - current debt ratio) × Total value
Debt to be sold = (0.5652 - 0.381) × 158,320,000
Debt to be sold = 0.1842 × 158,320,000
Debt to be sold = $29,162,544
Hence, the new debt to be sold is $29,162,544 to achieve target debt equity ratio of 1.3
Verify:
New debt = Old Debt +New debt sold
New debt = $60,320,000 + $29,162,544
New debt = $89,482,544
New Equity = Old Equity - New Equity (i.e new debt sol/buy back share)
New Equity = $98,000,000 - $29,162,544
New Equity = $68,837,456
New debt equity ratio = New debt/ New equity
New debt equity ratio = $89,482,544/ $68,837,456
New debt equity ratio = 1.299
New debt equity ratio ≅ 1.3 Target D/E ratio
Hopes that helps a lot!
For the just completed year, Hanna Company had net income of $41,500. Balances in the companys current asset and current liability accounts at the beginning and end of the year were as follows:
December 31
End of Year Beginning of Year
Current assets:
Cash and cash equivalents $ 57,000 $ 78,000
Accounts receivable $ 162,000 $ 188,000
Inventory $ 442,000 $ 370,000
Prepaid expenses $ 11,500 $ 14,000
Current liabilities:
Accounts payable $ 370,000 $ 384,000
Accrued liabilities $ 8,500 $ 12,000
Income taxes payable $ 36,000 $ 27,000
The Accumulated Depreciation account had total credits of $48,000 during the year. Hanna Company did not record any gains or losses during the year.
Required: Use the indirect method to determine the net cash provided by (or used in) operating activities for the year.
Answer:
$37,500
Explanation:
The computation of the net cash provided or used by operating activities are as follows
Cash flow from operating activities
Net income $41,500
Add: depreciation expenses $48,000
Add: Decrease in account receivable ($162,000 - $188,000) $26,000
Less: Increase in inventory ($442,000 - $370,000) -$72,000
Add: Decrease in prepaid expenses ($11,500 - $14,000) $2,500
Less: Decrease in account payable ($370,000 - $384,000) -$14,000
Less: Decrease in accrued liabilities ($8,500 - $12,000) -$3,500
Add: Increase in income tax payable ($36,000 - $27,000) $9,000
Cash flow provided by operating activities $37,500
The negative sign indicates the cash outflow and the positive sign indicated the cash inflow
Unethical practices can take place during recruitment. Explain
Explanation:
1. Rusing :
rusing occurs when a recruiter assumes an alias during a phone call to a potential clients or candidate, Most often to convince a gatekeeper that deer call to a sincere cooperate leader is personal confident and / or urgent .
2. Double Rusing :
as with other business discipline there is a such of things as conflict of interest. for example as a recruiter at an agency, you don't recruit candidates from clients who are you to feel other jobs it's just common courtesy and common sense .
Is a risk neutral person likely to make a fair bet? A. No. Risk neutral individuals are indifferent about making a fair bet. B. Yes. Risk neutral individuals are unwilling to make a fair bet. C. No. Risk neutral individuals are willing to make a fair bet. D. Yes. Risk neutral individuals are indecisive about making a fair bet.
Answer: A. No. Risk neutral individuals are indifferent about making a fair bet.
Explanation: A fair bet is given as a wager with an expected value (the sum of the probability of a payoff times the value of the payoff) of zero. A risk neutral individual is one who is indifferent about making a fair bet thus, such person has a constant marginal utility (the extra pleasure from each extra dollar of wealth) of wealth.
On April 1st, Bob the Builder entered into a contract of one-month duration to build a barn for Nolan. Bob is guaranteed to receive a base fee of $4,000 for his services in addition to a bonus depending on when the project is completed. Nolan created incentives for Bob to finish the barn as soon as he can without jeopardizing the structural integrity of the barn. Nolan offered to pay an additional 25% of the base fee if the project finished 2 weeks early and 20% if the project finished a week early. The probability of finishing 2 weeks early is 25% and the probability of finishing a week early is 55%.What is the expected transaction price with variable consideration estimated as the expected value?
a. $4,750
b. $5,000
c. $5,750
d. $5,500
Answer:
$4,690
Note: The correct answer is $4,690 as calculated below based on the information provided but it is not included in the option. Kindly confirm this from your teacher.
Explanation:
This can be calculated using as follows:
Expected value of finishing = Base fee * Additional percentage * Probability of finishing
Therefore, we have:
Expected value of finishing 2 weeks early = $4,000 * 25% * 25% = $250
Expected value of finishing a week early = $4,000 * 20% * 55% = $440
As a result, we have:
Expected transaction price = Base fee + Expected value of finishing 2 weeks early + Expected value of finishing a week early = $4,000 + 250 + 440 = $4,690.
Therefore, the expected transaction price with variable consideration estimated as the expected value is $4,690.
Since the market return represents the expected return on an average stock, the market return reflects a certain amount of risk. As a result, there exists a market risk premium, which is the amount over and above the risk-free rate, that is required to compensate stock investors for assuming an average amount of risk.
A. True
B. False
Answer:
A. True
Explanation:
In the Stock Exchange Market, the market return can be calculated by the expected return on an average stock. This return is a reflection of a certain amount of risk. It gives rise to the existence of a market risk premium, which is the amount over and above the risk-free rate, that is required to compensate stock investors for assuming an average amount of risk.
ABC company has just purchased a life truck that has a useful life of 5 years. The engineer estimates that maintenance costs for the truck during the first year will be $2,000. As the truck ages, maintenance costs are expected to increase at a rate of $300 per year over the remaining life. Assume that the maintenance costs occur at the end of each year. The firm wants to set up a maintenance account that earns 8% interest per year. All future maintenance expenses will be paid out of this account. How much does the firm have to deposit in the account now?
Answer:
$10,540
Explanation:
To calculate, the formula for calculating the present value (PV) of a growing annuity is used as follows:
PVga = [P / (r - g)] * [1 - {(1 + g) / (1 + r)}^n] .................... (1)
Where;
P = maintenance costs for the first year = $2,000
r = interest per year = 8%, or 0.08
g = growth rate of maintenance costs = $300 / $2,000 = 0.15
n = useful life = 5
Substituting the values into equation (1), we have:
PVga = [2,000 / (0.08 - 0.15)] * [1 - {(1 + 0.15) / (1 + 0.08)}^5] = $10,539.88, or $10,540.
Therefore, the firm has to deposit $10,540 in the account now.
Cramer Corporation and Mr. Chips formed a general partnership. Cramer contributed $500,000 cash, and Mr. Chips contributed a building with a $500,000 FMV and $300,000 tax basis. The partnership immediately borrowed $700,000 of recourse debt. What is Cramer's tax basis in its partnership interest
Answer:
$850,000
Explanation:
Cramer's tax basis in its partnership interest can be estimated as follows:
Cramer's cash contribution to the general partnership = $500,000
Cramer's share of the recourse debt borrowed = $700,000 / 2 = $350,000
Cramer's tax basis in its partnership interest = Cramer's cash contribution + Cramer's share of the recourse debt = $500,000 + $350,000 = $850,000
Note:
The reecourse debt is shared equally as coventionally required when the profit and loss sharing is not stated in the question.
The adjusted trial balance for China Tea Company at December 31, 2021, is presented below:
Accounts Debit Credit
Cash $16,000
Accounts receivable 162,000
Prepaid rent 10,000
Supplies 31,000
Equipment 370,000
Accumulated depreciation $129,000
Accounts payable 11,000
Salaries payable 3,500
Interest payable 1,900
Notes payable (due in two years) 37,000
Common stock 210,000
Retained earnings 176,100
Dividends 27,000
Service revenue 360,000
Salaries expense 150,000
Advertising expense 75,000
Rent expense 18,000
Depreciation expense 32,000
Interest expense 2,500
Utilities expense 35,000
Totals $928,500 $928,500
Required:
Prepare an income statement for China Tea Company for the year ended December 31, 2021:a
Answer:
Kindly check attached picture
Explanation:
Given the details below
Accounts Debit Credit
Cash $16,000
Accounts receivable 162,000
Prepaid rent 10,000
Supplies 31,000
Equipment 370,000
Accumulated depreciation $129,000
Accounts payable 11,000
Salaries payable 3,500
Interest payable 1,900
Notes payable (due in two years) 37,000
Common stock 210,000
Retained earnings 176,100
Dividends 27,000
Service revenue 360,000
Salaries expense 150,000
Advertising expense 75,000
Rent expense 18,000
Depreciation expense 32,000
Interest expense 2,500
Utilities expense 35,000
Totals $928,500 $928,500
Prepare an income statement for China Tea Company for the year ended December 31, 2021
Kindly check attached picture
A job-needs analysis:___________.1. Examines the ethics of each employee in the organization.2. Includes an assessment of how each employee adds to the organizational culture.3. Uses information gathered from job analysis and competency modeling.4. Is accurately described by all of the above.
Answer:
3. Uses information gathered from job analysis and competency modeling
Explanation:
A job-needs analysis is a process that companies implement to create good job descriptions by using data about skills, responsibilities, and work environment of a position. Also, for this it is important to do a job analysis because it helps to gather all the information about the requirements of a particular job. According to this, the answer is that a job-needs analysis uses information gathered from job analysis and competency modeling.
The other options are not right because a job analysis involves information about the position like skills and duties not about the ethics of each employee in the organization or an assessment of how each employee adds to the organizational culture.