Answer:
21.82 %
Explanation:
Earnings per share is the monetary value of earnings per outstanding share of common stock for a company
Growth multiple = EPS in current year / EPS of 10th year before
Growth multiple = $3.60/ $0.50
Growth multiple = 7.20
Next, raise the 1/10th power of the growth rate as it is required to compute the growth rate in 10 years
(7.20)1/10 = 1.2182
Now, 1 is to be subtracted from the figure obtained that is 1.2182
1.21 – 1 = 0.2182
In the final step, multiply 0.2182 by 100 to obtain the answer in percentage which is as follows:
0.2182 * 100 = 21.82 %
wesimann co. issed 11-year bonds a year ago at a coupon rate of 7.1% The bonds make semiannual payments and have a par value of 1,000. if the ytm on these bonds is 5.4%, what is the current bond price
Answer:
$1,130.04
Explanation:
The computation of the current bond price is shown below:
But before that following calculations need to be done
Number of periods = 11 - 1 = 10 × 2 = 20
Rate = 5.4% ÷ 2 = 2.7%
Coupon = (7.1% of 1000) ÷ 2 = $35.5
Now
The Current bond price is
= Coupon × [1 - 1 ÷ (1 + r)^n] ÷ r + FV ÷ (1 + r)^n
= $35.5 × [1 - 1 ÷ (1 + 0.027)^20] ÷ 0.027 + $1,000 ÷ (1 + 0.027)^20
= $35.5 × [1 - 0.586937] ÷ 0.027 + $586.936514
= $35.5 × 15.29863 + $586.936514
= $1,130.04
On March 31 a company needed to estimate its ending inventory to prepare its first quarter financial statements. The following information is available: Beginning inventory, January 1: $4,200 Net sales: $71,000 Net purchases: $69,000 The company's gross margin ratio is 25%. Using the gross profit method, the estimated ending inventory value would be:
Answer:
$19,950
Explanation:
The formula for determining the estimated ending inventory value is given below:
estimated ending inventory value=cost of goods available for sale -cost of goods sold
cost of goods available for sale=beginning inventory+purchases
cost of goods available for sale=$4,200+$69,000=$73200
Cost of goods sold=net sales-(net sales*gross margin)
Cost of goods sold=$71000-($71000*25%)=$53250
estimated ending inventory value=$73200 -$53250 =$19,950
A business pays weekly salaries of $30100 on Friday for a five-day week ending on that day. The adjusting entry necessary at the end of the fiscal period ending on a Thursday is
Answer and Explanation:
The adjusting entry would be
Salaries and Wages Expense $24,080 ($30,100 ÷ 5 days × 4 days)
To Salaries and Wages Payable $24,080
(being the salaries & wages expense is recorded)
Here we debited the salaries and wages expense as it increased the expenses and at the same time we credited the salaries and wages payable as it also increased the liabilities
The same is to be considered
Find the future value at the end of year 3 of the following stream of cash flows received at the end of each year, assuming the firm can earn 17 percent on its investments. A. $16,320 B. $20,127 C. $23,548 D. $27,551
Answer:
B. $20,127
Explanation:
Calculation to Find the future value at the end of year 3
Using this formula
A=P(1+r/100)^n
where,
A= represent future value
P= represent present value
r =represent rate of interest
n= represent time period.
Let plug in the formula
A=3,000*(1.17)^2+6,000*(1.17)+9,000
A=3,000*1.3688+7,020+9,000
A=4,106+7,020+9,000
A=$20,127
Therefore the future value at the end of year 3 will be $20,127
Effect of Doubtful Accounts on Net IncomeDuring its first year of operations, Mack's Plumbing Supply Co. had sales of $630,000, wrote off $10,100 of accounts as uncollectible using the direct write-off method, and reported net income of $69,300. Determine what the net income would have been if the allowance method had been used, and the company estimated that 2.5% of sales would be uncollectible.
Answer:
Mack's Plumbing Supply Co.
Effect of Doubtful Accounts on Net Income
Mack's would have reduced the net income further by $5,650.
This implies that net income reported would have been $63,650 ($69,300 - $5,650).
Explanation:
Sales revenue = $630,000
Allowance method = 2.5% of sales as uncollectible.
Uncollectible Allowance = $15,750 ($630,000 * 2.5%)
Direct write-off method, uncollectible allowance = $10,100
Reported net income = $69,300
Effect on net income of using the allowance method = $63,650 ($69,300 - $15,750 + $10,100)
At the beginning of December, Global Corporation had $2,400 in supplies on hand. During the month, supplies purchased amounted to $3,500, but by the end of the month the supplies balance was only $2,500. What is the appropriate month-end adjusting entry?
Answer and Explanation:
The appropriate month-end adjusting entry is shown below:
Supplies expense Dr $3,400
To Supplies $3,400
(being supplies expense is recorded)
Working note:
= Supplies on hand at the beginning + purchase - end of the month
= $2,400 + $3,500 - $2,500
= $3,400
Here the supplies expense is debited as it increased the supplies and credited the supllies as it decreased the assets
Loaded-Up Fund charges a 12b-1 fee of 1.00% and maintains an expense ratio of 0.50%. Economy Fund charges a front-end load of 3.0%, but has no 12b-1 fee and an expense ratio of 0.25%. Assume the rate of return on both funds’ portfolios (before any fees) is 6% per year.
Required:
a. How much will an investment of $1,000 in each fund grow to after 1 year?
b. How much will an investment of $1,000 in each fund grow to after 2 year?
c. How much will an investment of $1,000 in each fund grow to after 11 year?
Answer:
a) $1025.8
b) $1084.8
c) $1794.1
Explanation:
The formula for this question is
End value of investment = I * (1 - f) * (1 + r - t)^T,
where
I = basic investment, $1000
f = front end load, 3% = 0.03
r = ratio, 6% = 0.06
t = true expense ratio, 0.25% = 0.0025
T = time of investment, 1, 2 and 11 years.
Now, applying the values to the formula, we have
End of Investment after 1 year =
1000 * (1 - 0.03) * (1 + 0.06 - 0.0025)¹ =
1000 * 0.97 * 1.0575 =
$1025.8
End of Investment after 2 years =
1000 * (1 - 0.03) * (1 + 0.06 - 0.0025)² =
1000 * 0.97 * 1.1183 =
$1084.8
End of Investment after 11 years =
1000 * (1 - 0.03) * (1 + 0.06 - 0.0025)¹¹ =
1000 * 0.97 * 1.8496 =
$1794.1
For its inspecting cost pool, Davidson, Inc. expected overhead cost of $300,000 and 4,000 inspections. The actual overhead cost for that cost pool was $360,000 for 5,000 inspections. The activity-based overhead rate used to assign the costs of the inspecting cost pool to products is A.$60 per inspection. B.$72 per inspection. C.$75 per inspection. D.$90 per inspection.
Answer:
C. $75 per inspection
Explanation:
The computation of the activity-based overhead rate used to assign the costs is shown below:
= Expected overhead cost ÷ expected inspections
= $300,000 ÷ 4,000 inspections
= $75 per inspection
hence the correct option is C. $75 per inspection
We simply applied the above formula so that the correct value could come
Hence, the same is to be considered
If the alternatives are mutually exclusive and the MARR is 15% per year, the alternative to select is
Answer: Only Alternative B
Explanation:
As the alternatives are mutually exclusive, the alternative to select would be the one that is superior to all of the others and above MARR.
B, C and D all have rates of return higher than MARR so they will pass the first step.
When C is compared to B, it has an incremental return of 10% which is less than the MARR so C will be discarded as B is a better option.
Now compare B with D. When D is compared to B, it has an incremental return of 13% which is less than the MARR so B is again superior.
Alternative B should therefore be chosen as it is better than the other options.
Describe the process of conducting a performance appraisal review and when disciplinary action is necessary.
Answer:
Performance appraisal is a method of evaluating an employees work production.
Explanation:
Performance appraisal is also known as performance evaluation or performance review in an organization. It is defined as a method of evaluation and documentation of an employees work performance or productivity in the organization.
The process of conducting performance appraisal review in the organization includes :
1. In conducting a performance appraisal review a formal system should be in place and it should be used consistently.
2. Establishing performance standards.
3. The tools used for performance appraisal should always reflect the job description of the employees and it should based on various surveys or scales.
4. Data should be collected so as to ensure unbiased evaluation and thorough evaluation over time.
5. Compare the performance of an employee in the organization to all the employee metrics.
6. Employee feedback is also taken regarding their job description and the key areas that they are working.
Disciplinary action is taken in an organization in order to correct a work related behavior. It is not meant for giving punishment to the employees but to correct their behavior and ethics. Every employees are expected to work according to the company policy and maintain the work ethics and company secrets. If an employee fails to maintain the work ethics, disciplinary action is taken against him so as to correct his actions.
Litton Industries uses a perpetual inventory system. The company began its fiscal year with inventory of $267,000. Purchases of merchandise on account during the year totaled $845,000. Merchandise costing $902,000 was sold on account for $1,420,000. Prepare the journal entries to record these transactions.
Answer and Explanation:
The journal entries are shown below:
1. Inventory Dr $845,000
To Account payable $845,000
(Being inventory purchase on the account)
2. Account receivable Dr $1,420,000
To Sales revenue $1,420,000
(Being sale on the account is recorded)
3. Cost of goods sold Dr $902,000
To Inventory $902,000
(Being cost of sales is recorded)
These journal entries are to be recorded
Managerial accounting information: Multiple Choice Is used mainly by external users. Involves gathering information about costs for planning and control decisions. Is generally the only accounting information available to managers. Can be used for control purposes but not for planning purposes. Has little to do with controlling costs.
Answer:
Involves gathering information about costs for planning and control decisions.
Explanation:
Managerial accounting is also cost called cost accounting. It is used by managers to efficiently manage a business enterprise by identifying, measuring, analysis, and interpretation of accounting information mainly for internal use.
External bodies do not use managerial accounting information.
Therefore the information gained is used by managers mainly to make planning and control decisions within the business.
The Raven Co. has just gone public. Under a firm commitment agreement, Raven received $21.39 for each of the 20 million shares sold. The initial offering price was $23 per share, and the stock rose to $28.41 per share in the first few minutes of trading. Raven paid $950,000 in direct legal and other costs and $320,000 in indirect costs. What was the flotation cost as a percentage of funds raised?
Answer: 33.2%
Explanation:
Floatation costs percentage = Total costs / Net amount received
Net amount received = Total received - Direct legal - Indirect cost
= (21.39 * 20 million) - 950,000 - 320,000
= $426,530,000
Total Cost = 950,000 + ((Initial offering price - Amount received) * 20 million) + 320,000 + ((Stock appreciation - initial offering price) * 20 million)
= $141,670,000
Floatation cost = 141,670,000/ 426,530,000
= 33.2%
When a bill is paid in QuickBooks using the Pay Bills window, QuickBooks: Multiple Choice Increases the Accounts Payable account and increases the Checking account Increases an Expense account and increases the Accounts Payable account Decreases an Expense account and decreases the Checking account Decreases the Accounts Payable account and decreases the Checking account
Answer:
Decreases the Accounts Payable account and decreases the Checking account
Explanation:
In the case when the bill is paid in quick books by using the window of pay bills so the liabilities would be reduced also the liquid asset would be decreased
Since the liabilities is reduced i.e. account payable so automatically the checking account would also be reduced
hence, the last option is correct
The same is to be considered
Answer:
You would decrease the accounts payable (paying the bill relieves part of the balance in this account) and decreases the cash account (when you pay the bill, you use or reduce the cash)
Explanation:
see my answer for explanation
Vanilla Bean Restaurant is considering a project with an initial cost of $525,000. The project will not produce any cash flows for the first three years. Starting in year 4, the project will produce cash inflows of $721,000 a year for three years. This project is risky, so the firm has assigned it a discount rate of 16 percent. What is the project's net present value
Answer:
Vanilla Bean Restaurant
The project's net present value (NPV) is:
$511,798
Explanation:
a) Data and Calculations:
Initial project cost = $525,000 in year 1
Project's inflows in Year 4, 5, & 6 = $721,000 each
Discount rate = 16%
Present value of inflows:
Year 4 = $721,000 * 0.552 = $397,992
Year 5 = $721,000 * 0.476 = $343,196
Year 6 = $721,000 * 0.410 = $295,610
Total present value = $1,036,798
Therefore, the NPV = $511,798 ($1,036,798 - $525,000). The present value is the difference between the present value of the project's cash inflows and the present value of project's cash outflows during the project's life.
Oriole Company has a new product going on the market next year. The following data are projections for production and sales: Variable costs $430000 Fixed costs $450000 ROI 16% Investment $2200000 Sales 200000 units What is the markup percentage
Answer:
The markup percentage is 40%
Explanation:
The computation of the markup percentage is shown below:
Markup percentage is
= Return on investment ÷ Total cost
= ($2,200,000 × 16%) ÷ ($430,000 + $450,000)
= $352,000 ÷ $880,000
= 40%
Hence, the markup percentage is 40%
We simply applied the above formula
And, the same is to be considered
Sales would be ignored in this case
On average, your firm sells $26,400 of items on credit each day. The firm's average operating cycle is 41 days and it acquires and sells inventory, on average, every 24 days. What is the average accounts receivable balance
Answer:
$448,800
Explanation:
Calculation for the average accounts receivable balance
Average accounts receivable balance = $26,400 x (41 days - 24 days)
Average accounts receivable balance = $26,400×17days
Average accounts receivable balance = $448,800
Therefore the Average accounts receivable balance will be $448,800
A newly issued 20-year, $1,000, zero coupon bond just sold for $311.05. What is the implicit interest, in dollars, for the first year of the bond's life
Answer: $18.70
Explanation:
Based on the information given in the question, let the yield be represented by i
The beginning value of the coupon is $311.05.
The ending value is calculated as $329.75
Implicit interest will now be:
= $329.75 - $311.05
= $18.70
Check attachment for further explanation.
A buyer plans to buy designer bows at $15,000 cost with an average MU of 47%. The first purchase is for $4,500.00 at cost and $9,000.00 at retail. What must the markup on the balance of the purchases be in order to maintain the average MU percentage?
Answer:
24.29%
Explanation:
markup percentage = (selling price - cost per unit) / cost per unit
total markup:
0.47 = (total retail price - $15,000) / $15,000
$15,000 x 0.47 = total retail price - $15,000
$7,050 = total retail price - $15,000
total retail price = $22,050
the store already sells $9,000 worth of goods, so that means that $13,050 goods at retail price will be purchased
we repeat our formula, only that this time we will calculate the MU %:
MU % = ($13,050 - $10,500) / $10,500 = $2,550 / $10,500 = 0.2429 = 24.29%
American Chemical Company manufactures a chemical compound that is sold for $52 per gallon. A new variant of the chemical has been discovered, and if the basic compound were processed into the new variant, the selling price would be $73 per gallon. American expects the market for the new compound variant to be 8,600 gallons initially and determines that processing costs to refine the basic compound into the new variant would be $146,200. Required: a. What would be the effect on total profit if American produces the new compound variant
Answer:
Effect on income= $34,400 increase
Explanation:
Giving the following information:
Actual price= $52
New variant price= $73
Number of units= 8,600 gallons
Total cost= $146,200
To calculate the effect on income, we need to use the following formula:
Effect on income= increase in income - total cost
Effect on income= 8,600*(73 - 52) - 146,200
Effect on income= $34,400 increase
A friend tells you she has saved for 7 years and has a present sum of $10,000, which earned at the rate of 8% per year, compounded quarterly. Determine the equivalent amount she had to start with 7 years ago.
Answer:
$5750.1
Explanation:
The amount she started with can be referred to as present value (PV), while the amount sum she has after the 7 years is the future value (FV).
Thus:
FV = PV[tex](1 +\frac{r}{m}) ^{nm}[/tex]
From the question, FV = $10000, m = 3, n = 7 and r = 0.08.
10000 = PV[tex](1+\frac{0.08}{3}) ^{(3*7)}[/tex]
= PV[tex](1.0267)^{(21)}[/tex]
= 1.7391PV
PV = [tex]\frac{10000}{1.7391}[/tex]
= 5750.1006
PV = 5750.1
The equivalent amount the she had to start with is $5750.1.
The equivalent amount would be as follows:
$[tex]5750.1[/tex]
Find the amount
Given that,
Present value of the principal = $10,000
Rate of interest = 8%
Time = 7 years
We know that,
The principal was compounded quarterly,
No. of quarters in 7 years = 7 × 3
= 21
So,
The Future Value = Present Value[tex](1 + r/m)^_{nm}[/tex]
⇒ 10,000 = Present Value [tex]( 1 + 0.08/3)^{21}[/tex]
∵ Present Value [tex]= 10,000/1.7391[/tex]
[tex]=[/tex] $[tex]5750.1[/tex]
Thus, $[tex]5750.1[/tex] is the correct answer.
Learn more about "Amount" here:
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Data concerning Bedwell Enterprises Corporation's single product appear below:
Selling price per unit $ 185.00
Variable expense per unit $ 94.00
Fixed expense per month $ 437,240
The unit sales to attain the company's monthly target profit of $24,000 is closest to:__________ (Do not round intermediate calculations.)
a. 5,069
b. 4,907
c. 4,805
d. 2,493
Answer:
Number of units= 5,069
Explanation:
Giving the following information:
Selling price per unit $ 185.00
Variable expense per unit $ 94.00
Fixed expense per month $ 437,240
Desired profit= $24,000
To calculate the number of units to be sold, we need to use the following formula:
Break-even point in units= (fixed costs + desired profit) / contribution margin per unit
Break-even point in units= 461,240 / (185 - 94)
Break-even point in units= 5,069 units
Answer:Unit sales to attain the company;s monthly target = 5,069---A
Explanation:
Total desired Contribution =Fixed cost+Target profits
= $437,240 + $24,000 =$461,000
Contribution margin = Selling price per unit -variable expense per unit
= $185 -$94 =$91
of $24,000
Break even point / unit sales to attain= Total desired Contribution/ Contribution margin
= $461,240/ $91
= 5,068.57
rounded to 5,069 units
You expect to receive $10,000 at graduation in two years. You plan on investing it at 9 percent until you have $60,000. How long will you wait from now
Answer:
22.79 years
Explanation:
The computation of the number of years is shown below
Future value = Present value × ( 1 + rate)^number of years
$60,000 = $10,000 × (1.09)^n
($60,000 ÷ $10,000) = (1.09)^n
6 = (1.09)^n
Now take the log on both sides
log 6 = n × log 1.09
n = log 6 ÷ log 1.09
= 20.79 years
So, the time is
= 20.79 years + 2 years
= 22.79 years
A company has a DSO of 28 days. The company’s average daily sales are $4,000. What is the level of accounts receivable? Assume there are 365 days in a year.
Answer:
the level of accounts receivable is $112,000
Explanation:
The computation of the level of sales is shown below:
Days Sales Outstanding (DSO) = Accounts Receivable (A/R) ÷ Average Daily Sales
28 days = Account receivable ÷ $4,000
So, the account receivable is
= $4,000 × 28 days
= $112,000
Hence, the level of accounts receivable is $112,000
We simply applied the above formula so that the correct value could come
And, the same is to be considered
Using the Shannon and Weaver Model of Communication to describe a web page, the web page itself would be:______
Answer:
channel
Explanation:
Shannon and Weaver Model of Communication is usually reffered to as "the mother of all model" gives theory about how human communication can disintegrated into concepts such as
✓Encoder
✓Sender
✓Channel
✓Reciver
✓Noise
Recorder.
It works in a way in which One sending the message (sender) will encode it, then forward it through technological "channel"such as telephone to the receiver, which is convert to codes and send through a medium.It should be noted that Using the Shannon and Weaver Model of Communication to describe a web page, the web page itself would be channel.
If the Allowance account had a credit balance of $29,500 immediately before the year-end adjustment for bad debts and no accounts were written-off or allowed for during the year, what was the amount of Bad Debt Expense recognized during the year
Answer:
Bad Debt expense recognized during the year = $39000
Explanation:
Note: A table is missing and it is attached as picture
Allowance for Doubtful Accounts
Debit Credit
Balance before year-end adjustment $29,000
Current Yr. Bad debt recognized $39,000
Closing Balance as per balance sheet $68,000
Total Balance $68,000 $68,000
You wish to buy a $27,500 car. The dealer offers you a 6-year loan with a 7.2 percent APR. What are the monthly payments?
Answer:
$471.49
Explanation:
The formula for computing the monthly payment is shown below:
PMT=P(r/n)/1-(1+r/n)^(-nt)
P=loan amount=$27,500
r=interest rate=7.2%
n=number of monthly payments in a year=12
t= duration of loan=6 years
PMT=27500*(7.2%/12)/(1-(1+7.2%/12)^(-6*12)
PMT=27500*0.6000% /(1-(1+0.6000%)^-72
PMT=165 /(1-0.650047943 )
PMT=$471.49
Samuel, Inc. has Accounts Receivable of $150,000 and an Allowance for Doubtful Accounts of $13,000. If it writes-off a customer account balance of $1,300, what is the amount of its net accounts receivable
Answer:
$135,700
Explanation:
The Accounts Receivable are shown in the Balance Sheet at the amount that is expected to be collected by the entity from its customers - thus providing for a Faith Representation of Financial Statements. This will be after the Allowance for Doubtful Accounts and any amounts Written Off are Deducted.
Accounts Receivable Balance = $150,000 - $13,000 - $1,300
= $135,700
Mariota Industries has sales of $380,080 and costs of $178,290. The company paid $32,390 in interest and $14,500 in dividends. It also increased retained earnings by $69,626 during the year. Of the company's depreciation was $19,820, what was its average tax rate
Answer:
tax rate = 43.76%
Explanation:
Mariota's net income before taxes = $380,080 - $178,290 - $19,820 - $32,390 = $149,580
Mariota's net income after taxes = $69,626 + $14,500 = $84,126
$149,580 x (1 - tax rate) = $84,126
1 - tax rate = $84,126 / 149,580 = 0.5624
1 - tax rate = 0.5624
1 - 0.5624 = tax rate
tax rate = 0.4376 = 43.76%
The best estimate of the total variable manufacturing cost per unit is: (Round your intermediate calculations to 2 decimal places.)
Answer:
$95.2
Explanation:
The computation of the best estimate of the total variable manufacturing cost per unit is shown below;
Particulars Difference Per unit
Production Volume 6,800 8,000 1200
Direct materials $402,560 $473,600 $59.2
Direct labor $153,000 $180,000 $22.5
Manufacturing
overhead $1,007,900 $1,024,100 $16,200 $13.5
(16200 ÷ 1200)
Total Manufacturing
cost 1563460 1677700 $95.2