Answer:
2016 Accounts receivable turnover is 7.65
2017 Accounts receivable turnover is 8.58
Explanation:
Accounts receivable turnover is the ratio of the net credit sales divided by the average accounts receivable for the period
For 2016 average accounts receivable=($519,500+$557,500)/2=$538,500.00
Net credit sales in 2016 is $ 4,117,000
Accounts receivable turnover for 2016=$4,117,000/$538,500= 7.65
For 2017 average accounts receivable=($557,500+$ 581,300)/2=$569,400.00
Net credit sales in 2017 is $ 4,888,000
Accounts receivable turnover for 2017=$4,888,000/$569,400= 8.58
You just inherited some money, and a broker offers to sell you an annuity that pays $4,300 at the end of each year for 20 years. You could earn 5% on your money in other investments with equal risk. What is the most you should pay for the annuity
Answer:
hhhhhhhhhhhhhhmmmmmmmmmmmmm
Explanation:
In 2021, Space Technology Company modified its model Z2 satellite to incorporate a new communication device. The company made the following expenditures:
Basic research to develop the technology $2,000,000
Engineering design work 680,000
Development of a prototype device 300,000
Acquisition of equipment 60,000
Testing and modification of the prototype 200,000
Legal and other fees for patent application on the
new communication system 40,000
Legal fees for successful defense of the new patent 20,000
Total $3,300,000
The equipment will be used on this and other research projects. Depreciation on the equipment for 2021 is $10,000. During your year-end review of the accounts related to intangibles, you discover that the company has capitalized all the above as costs of the patent. Management contends that the device represents an improvement of the existing communication system of the satellite and, therefore, should be capitalized.
Required:
Prepare correcting entries that reflect the appropriate treatment of the expenditures. Record the correcting entry for the patent.
Answer: The answer is provided below
Explanation:
The total of the research and development expense is $3180000. This was gotten by the addition of the:
Basic research to develop the technology = 2000000
Engineering design work = 680000
Development of prototype device= 300000
Testing and modification of the prototype = 200000
Total = 2000000 + 680000 + 300000 + 200000 = $3180000.
Further explanation has been attached in the journal.
The loss associated with the fact that at the profitminusmaximizing quantity consumers value the goods more than it cost to produce them is called A. Lerner Loss. B. comparative loss. C. deadweight loss. D. Consumer Value Loss.
Answer:
deadweight loss.
Explanation:
Deadweight loss can also be referred to excess burden. Deadweight loss occurs when there is an inefficiency in the market as a result of reduction in optimal production of goods and services, in this situation the equilibrium of demand and supply is distorted.
For example, deadweight loss can result from raise in price of goods and services as a result of tax. When price is raised as a result of tax, buyers tend to reduce consumption and this can reduce the production of goods. The reduced production of goods and the reduced consumption can reduce the size of the market less than optimum equilibrium.
Wexell Framing's cost formula for its supplies cost is $1,230 per month plus $10 per frame. For the month of October, the company planned for activity toward 592 frames, but the actual level of activity was 597 frames. The actual supplies cost for the month was $7,050. The activity variance for supplies cost in October would be closest to
Answer:
Activity variance= $150 favorable
Explanation:
Giving the following information:
Standard:
Fixed costs= $1,230
Variable cost per unit= $10
Actual:
The actual level of activity was 597 frames.
The actual supplies cost for the month was $7,050.
To calculate the activity variance, we need to use the following formula:
Activity variance= actual costs - standard cost*actual activity
Standard costs= 1,230 + 10*597= 7,200
Activity variance= 7,050 - 7,200
Activity variance= $150 favorable
E-Eyes just issued some new preferred stock. The issue will pay an annual dividend of $14 in perpetuity, beginning 6 years from now. If the market requires a 12 percent return on this investment, how much does a share of preferred stock cost today?
Answer:
Price of stock= $66.19
Explanation:
The price of preferred stock is the dividend payable discounted at the required rate of return of 12%.
Price = Dividend/required rate of return
Discount the dividend to to its worth in year year 5
Price = 14/0.12= 116.666
Step 2
Discount the dividend to year o
Price of stock = 116.66× 1.12^(-5)= 66.19
Price of stock= $66.19
Cullumber Company is considering buying equipment for $220000 with a useful life of 5 years and an estimated salvage value of $6000. If annual expected income is $28000, the denominator in computing the annual rate of return is $226000. $110000. $113000. $220000.
Answer:
Average investment(denominator) = $113,000
Explanation:
Annual rate of return is the average annual income as a percentage of average investment . It is the proportion of the average investment that is earned, on the average, as annual income.
Annual rate of return = annual net income/ average investment
Average investment =( Initial,cost + scrap value)/2
Average investment = (220,000 + 6,000)/2= $113,000
Average investment(denominator) = $113,000
Automobiles are often leased, and there are several terms unique to auto leases. Suppose you are considering leasing a car. The price you and the dealer agree on for the car is $27,600. This is the base capitalized cost. Other costs that may be added to the capitalized cost price include the acquisition (bank) fee, insurance, or extended warranty. Assume these costs are $1,050. Capitalized cost reductions include any down payment, credit for a trade-in, or dealer rebate. Assume you make a down payment of $3,000 and there is no trade-in or rebate. If you drive 12,000 miles per year, the lease-end residual value for this car will be $17,000 after three years.The lease or "money" factor, which is the interest rate on the loan, is the APR of the loan divided by 2,400. The lease factor the dealer quotes you is .00265. The monthly lease payment consists of three parts: A depreciation fee, a finance fee, and sales tax. The depreciation fee is the net capitalization cost minus the residual value, divided by the term of the lease. The net capitalization cost is the cost of the car minus any cost reductions plus any additional costs. The finance fee is the net capitalization cost plus the residual, times the money factor, and the monthly sales tax is the depreciation payment plus the finance fee, times the tax rate.
a. What APR is the dealer quoting you? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
b. What is your monthly lease payment for a 36-month lease if the sales tax is 7 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Answer:
a. 6.36%
b. $378.02
Explanation:
a. The computation of Annual percentage rate is shown below:-
Annual percentage rate = Lease factor × 2,400
= 0.00265 × 2,400
= 6.36%
b. For computation of monthly lease payment first we need to find out the depreciation charge, finance charge and tax which is shown below:-
Depreciation charge = (Base cost + Other cost - Down payment - Residual value) ÷ Number of lease payment
= ($27,600 + $1,050 - $3,000 - $17,000) ÷ 36
= $8,650 ÷ 36
= $240.27
Finance charge = (Base cost + Other cost - Down payment - Residual value) × Lease factor
= ($27,600 + $1,050 - $3,000 - $17,000) × 0.00265
= $42,650 × 0.00265
= $113.0225
now,
Tax = (Depreciation charge + Finance charge) × Tax rate
= ($240.27 + $113.0225) × 7%
= $353.2925 × 7%
= $24.73
Monthly Lease payment = Depreciation charge + Finance charge + Tax
= $240.27 + $113.0225 + $24.73
= $378.02
For 20Y2, McDade Company reported a decline in net income. At the end of the year, T. Burrows, the president, is presented with the following condensed comparative income statement:
Question not attempted.
McDade Company
Comparative Income Statement
For the Years Ended December 31, 20Y2 and 20Y1
1 20Y2 20Y1
2 Sales $16,800,000.00 $15,000,000.00
3 Cost of goods sold 11,500,000.00 10,000,000.00
4 Gross profit $5,300,000.00 $5,000,000.00
5 Selling expenses $1,770,000.00 $1,500,000.00
6 Administrative
expenses 1,220,000.00 1,000,000.00
7 Total operating
expenses $2,990,000.00 $2,500,000.00
8 Income from
operations $2,310,000.00 $2,500,000.00
9 Other income 256,950.00 225,000.00
10 Income before
income tax $2,566,950.00 $2,725,000.00
11 Income tax expense 1,413,000.00 1,500,000.00
12 Net income $1,153,950.00 $1,225,000.00
1. Prepare a comparative income statement with horizontal analysis for the two-year period, using 20Y1 as the base year. Use the minus sign to indicate an amount or percent decrease. If required, round percentages to one decimal place.
2. To the extent the data permit, comment on the significant relationships revealed by the horizontal analysis prepared in (1).
Answer: The answers have been provided below
Explanation:
a. A comparative income statement with horizontal analysis for the two-year period, while using 20Y1 as the base year have been analysed and attached. In the picture attached, the increase or decrease in the amount was gotten from the year 20Y2 and 20Y1.
For example for sales,
Sales 20Y2 = $16,800,000.00
Sales 20Y1 = $15,000,000.00
Amount = $16,800,000.00 - $15,000,000.00 = $1,800,000
Percentage increase = ($1,800,000 ÷ $15,000,000)× 100 = 12%
The same method was applicable to every other figures.
b. We can see that the sales for year 20y2 rose by 12% even though the net income has a negative value of -5.8%.
We can see that there is also a rise in operating expenses of the firm at a higher rate than the increase in the sales rate of the company. The income from operation also reduced by 7.6%. These are some of the reasons which led to the negative net income.
Janice plans to save $80 a month, starting today, for 20 years. Kate plans to save $80 a month for 20 years, starting one month from today. Both Janice and Kate expect to earn an average return of 5.5 percent on their savings. At the end of the 20 years, Janice will have approximately ________ more than Janice.
a. $66.67
b. $159.73
c. $78.14
d. $0
e. $189.12
Answer: b. $159.73
Explanation: At the end of the twenty years, Janice would have approximately $159.73 more than Kate. To solve for this, we calculate the future value of the money saved over the time period for both Janice and Kate, and then take the difference to arrive at the correct answer.
Future Value for Janice = $80 ×{[1 + (.055 / 12)]^240 - 1} / (.055 / 12) × [1 + (.055 / 12)] = $35,009.92
Future Value for Kate = $80 ×{[1 + (.055 / 12)]^240 - 1} / (.055 / 12) = $34,850.19
Difference = $35,009.92 - $34,850.19 = $159.73
Suppose that Mystic Energy and E-Storm are the only two producers of hydrogen fuel cells. The market inverse demand curve for hydrogen fuel cells is P = 1,300 – 0.08Q, where Q is the number of fuels cells per month and P is the price per fuel cell. The marginal cost is constant at $500. Acting as a cartel, the owners of Mystic Energy and E-Storm agree to evenly split the market output. In this case, each firm produces ____.
Answer:
The amount each firm produces would be 2,500 units per month
Explanation:
According to the given data we have the following:
demand curve for hydrogen fuel cells= P = 1,300 – 0.08Q
marginal cost=$500
Therefore, in order to calculate the amount each firm produces we would have to use the following formula:
MR = MC
This gives 1300 - 0.16Q = 500 or Q = 5000 units
Therefore, The amount Each of them would be producing= 5,000/2 = 2500 amount Each of them would be producing=2,500 units per month
The amount each firm produces would be 2,500 units per month
What would be the value of the bond described in Part d if, just after it had been issued, the expected inflation rate rose by 3 percentage points, causing investors to require a 13% return? Would we now have a discount or a premium bond?
Answer:
The value of bond is $837.213, the bond is a discount bond
Explanation:
Solution
Given that
The Rate of return is 13% which is higher than the coupon rate.
What this suggest is that the investors anticipates a return that is higher when compared to return supplied by bonds. thus, the bond value we decrease and it becomes a discount bond.
Now,
The bond value is given below:
Bond value = [Coupon rate in year 1 / ( 1 + Investor return )1 + Coupon rate in year 2 / ( 1 + Investor return )2 + Coupon rate in year n / ( 1 + Investor return )n ] + Par value / ( 1 + investor return )n
Thus,
= [ $100 / (1 + 0.13)1 + $100 / ( 1 + 0.13)2... $100 / ( 1 + 0.13)10 ] + $1000 / ( 1 + 0.13 )10
= $542.62 + 294.58
= $837.21
Value of bond will be = $837.213
Prospect Realty Co. pays weekly salaries of $27,600 on Monday for a six-day workweek ending the preceding Saturday. Journalize the necessary adjusting entry at the end of the accounting period, assuming that the period ends on Friday. If an amount box does not require an entry, leave it blank. Accounts Receivable
Answer:
Dr salaries expense $23,000
Cr salaries payable $23,000
Explanation:
By Friday ,employees would have worked for 5 days out of the six-day week whose cost is $27,600,hence the salaries for the 5 days should be provided as computed below:
salaries accrued =$27,600*5/6=$23,000
The salaries accrued of $23,000 at the close of the period on that particular Friday should be debited to salaries expense and credited to salaries payable prior its payment on Monday.
When payment is made cash would be credited while salaries payable is debited.
Pharoah Company had checks outstanding totaling $42200 on its May bank reconciliation. In June, Pharoah Company issued checks totaling $263900. The June bank statement shows that $196400 in checks cleared the bank in June. A check from one of Pharoah Company's customers in the amount of $2000 was also returned marked "NSF." The amount of outstanding checks on Pharoah Company's June bank reconciliation should be
Answer:
$109,700
Explanation:
Pharoah Company Outstanding checks on bank reconciliation:
Formula for Outstanding checks on bank reconciliation will be:
Outstanding checks on bank reconciliation = Total checks outstanding+Checks issued during month -checks cleared during the month
Hence,
= $42,200+$263,900-$196,400
= $109,700
Therefore the amount of outstanding checks on Pharoah Company's bank reconciliation should be $109,700
Setrakian Industries needs to raise $71.8 million to fund a new project. The company will sell bonds that have a coupon rate of 5.78 percent paid semiannually and that mature in 25 years. The bonds will be sold at an initial YTM of 6.46 percent and have a par value of $2,000. How many bonds must be sold to raise the necessary funds
Answer:
39,183 bonds
Explanation:
In order to determine the number of bonds that must be sold to realize cash of $71.8 million,the price per bond needs to be established using pv formula in excel as found below:
=-pv(rate,nper,pmt,fv)
rate is yield to maturity of 6.46% divided by 2
nper is the number of coupon payments which is 25 years multiplied by 2 i.e 50
pmt is the amount of semiannual coupon i.e $2000*5.78%*6/12=$57.8
fv is the face value of $2000 per bond
=-pv(6.46%/2,50,57.8,2000)=$ 1,832.43
number of bonds to be issued=$71,800,000/$ 1,832.43 = 39,183 bonds
If you followed Taguchi’s principles, and you wanted to investigate a design with 5 factors at 2 levels, how many experiments do you need? How many would you need if you used 5 factors at 2 levels in Classical Statistics with full factorial experiments; half factorial as well as Saturated ? Some of the students can try their own numbers such as 3 factors at 2 levels; 2 factors at 2 levels; 2 factors at 3 levels, 3 factors at 3 levels, etc… I would like each student to have a unique set of factors and levels so I can be sure that everyone understands the Taguchi principles in DoE.
Answer:
Number of full factorial experiments needed as per classical statistics is 5
Explanation:
We can use the following method to solve the given problem
Number of experiments needed as per Taguchi's principles:
No. of factors, F= 5
No. of levels, L = 2
No. of experiments, E = 1 + F*(L-1)
= 1 + 5*(2-1) = 1 + 5*1 = 6
Number of full factorial experiments needed as per classical statistics:
E = L^F
= 2^5
= 32
The following events occurred for Favata Company: a. Received $13,000 cash from owners and issued stock to them. b. Borrowed $10,000 cash from a bank and signed a note due later this year. c. Bought and received $1,100 of equipment on account. d. Purchased land for $18,000; paid $1,600 in cash and signed a long-term note for $16,400. e. Purchased $6,000 of equipment, paid $1,600 in cash and charged the rest on account. Required: For each of the events (a) through (e), perform transaction analysis and indicate the account, amount, and direction of the effect (+ for increase and - for decrease) on the accounting equation. (Enter any decreases to account balances with a minus sign.)
Answer and Explanation:
The indication of the account, amount and the direction of the effect are as follows
As we know that
Accounting equation is
Total assets = Total liabilities + stockholder equity
Based on this, the indication and the direction aare as follows
Assets = Liabilities + Stockholders' Equity
A) $13,000 = 0 + $13,000
It increased both the assets and the stockholder equity i.e capital
B) $10,000 = $10,000 + 0
It increased both the assets and the liabilities
C) $1,100 = $1,100 + 0
It increased both the assets and the liabilities
D) +$18,000 -$1,600 = $16,400 + 0
It increased the land by $18,000 and decreased the cash by $1,600 and at the same time it increased the liabilities by $16,400
E) +$6,000 -$1,600 = $4,400 + 0
It increased the equipment by $6,000 and decreased the cash by $1,600 and at the same time it also increased the liabilities by $4,400
Total $44,900 = $31,900 + $13,000
The following is an excerpt from the Sherman Act of 1890: "Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce . . . shall be deemed guilty of a misdemeanor, and, on conviction thereof, shall be punished by fine . . . or by imprisonment . . . or by both said punishments, in the discretion of the court."
The Sherman Act of 1890 is an example of which of the following?
a) Antitrust lawsb) Price regulations
Answer:
A. Antitrust Laws
Explanation:
Antitrust laws also known as Competition laws are rules and regulations set forth by the government of the United States to prevent the monopolization of a market as well to promote fair competition by all stakeholders in a market. The Sherman Antitrust Act of 1890 falls into this category.
The Act seeks to prohibit the monopolization of a particular trade or other acts that seek to limit trade. If found guilty by a competent court, a fine up to the tune of $10,000,000 can be imposed on organizations, $350,000 for individuals or even a 3 years time in jail.
The Federal Commissions Act, and The Clayton Act are other examples of Antitrust laws.
What is one of the negative effects of globalization?
Operating data for Bramble Corp. are presented below.
2020 2019
Sales revenue $730,000 $650,000
Cost of goods sold 480,340 473,850
Selling expenses 105,850 84,500
Administrative expenses 50,370 52,000
Income tax expense 29,930 26,650
Net income 63,510 13,000
Prepare a schedule showing a vertical analysis for 2020 and 2019.
(Round percentages to 1 decimal place, e.g. 12.1%.)
BRAMBLE CORP. Condensed Income Statement For the Years Ended December 31 2020 2019 Amount Percent Amount Percent
Sales $730,000 % $650,000 %
Cost of goods sold 480,340 % 473,850 %
Gross profit 249,660 % 176,150 %
Selling expenses 105,850 % 84,500 %
Administrative expenses 50,370 % 52,000 %
Total operating expenses 156,220 % 136,500 %
Income before income taxes 93,440 % 39,650 %
Income tax expense 29,930 % 26,650 %
Net income $ 63,510 % $ 13,000 %
Answer:
Explanation:
Vertical analysis of financial statement entails the expression of each line of the financial statement as a percentage of a base figure for analysis and evaluation purpose.
In this case , the sales revenue is used as the base figure
Vertical analysis of Bramble corp . Income statement for 2020 / 2019
Item 2020 % 2019 %
Sales revenue 730,000 100 650,000 100
Cost of goods 480,340 65.8 473,850 72.9
Gross profit 249,660 34.2 176,150 27.1
Selling expenses 105,850 14.5 84,500 13.0
Admin Expenses 50,370 6.9 52,000 8
Operating Expenses 156,220 21.4 136,500 21
Income before tax 93,440 12.8 39,650 6.1
Income tax Expenses 29,930 4.1 26,650 4.1
Net Income 63,510 8.7 13,000 2
SI International had a FCFE of $122.1M last year and has 12.43M shares outstanding. SI's required return on equity is 11.3%, and WACC is 9.8%. If FCFE is expected to grow at 7.0% forever, the intrinsic value of SI's shares is Multiple Choice $14.76. $244.43. $108.00. $68.29.
Answer:
The value per share = $375.379
Explanation:
The intrinsic value of shares is the present value of the Free cash flow to equity (FFCE) discounted at cost of equity.
Total value of equity= FCFE× (1+g)/(r-g)
Total Value of equity= 122.1 × (1.07)/(0.113-0.07)= 3038.302326
The value per share = Total Value of company /Number of shares
= $3038.302326 / 12.43 units
= $244.43 per unit
Arundel Company disclosed the following information for its recent calendar year.
Income Statement Data Selected Year-End Balance Sheet Data
Revenues $120,000 Accounts receivable decrease $29,000
Expenses: Purchased a machine for cash 20,000
Salaries expense 74,000 Salaries payable increase 24,000
Utilities expense 30,000 Other accrued liabilities decrease 15,000
Depreciation expense 29,000 Other expenses 8,500
Net loss $(21,500 )
Requried:
Prepare the operating activities section of the statement of cash flows using the indirect method.
Answer:
The Cash flows from operating activities is the following:
Net loss ($21,500)
Depreciation expense $29,000
Accounts receivable decrease $29,000
Salaries payable increase $24,000
Accrued liabilities decrease ($15,000)
Net cash provided by operating activities= $45,500
Explanation:
Accordfing to the given data, the operating activities section of the statement of cash flows using the indirect method would be as follows:
Cash flows from operating activities
Net loss ($21,500)
Depreciation expense $29,000
Accounts receivable decrease $29,000
Salaries payable increase $24,000
Accrued liabilities decrease ($15,000)
Net cash provided by operating activities= $45,500
The Net cash provided by operating activities is $45,000
Suppose the government imposes a tax on cheese. The deadweight loss from this tax will likely be greater in the:a) first year after it is imposed than in the eighth year after it is imposed because demand and supply will be less elastic in the first year than in the eighth year. b) first year after it is imposed than in the eighth year after it is imposed because demand and supply will be more elastic in the first year than in the eighth year. c) eighth year after it is imposed than in the first year after it is imposed because demand and supply will be less elastic in the first year than in the eighth year. d) eighth year after it is imposed than in the first year after it is imposed because demand and supply will be more elastic in the first year than in the eighth year.
Answer:
c) eighth year after it is imposed than in the first year after it is imposed because demand and supply will be less elastic in the first year than in the eighth year.
Explanation:
Tax increases the price of a good.
Dead weight loss is reduction in efficiency as a result of taxation.
Demand and supply is usually less elastic in the short run when compared to the long run. I the short run, consumers and producers don't have enough time to search for suitable substitutes.
So in the short run, there would be little or no change in demand or supply but in the long run, consumers would be able to search for more subsituites so the deadweight loss would be greater.
I hope my answer helps you
Joy Manufacturing Company needs to know its anticipated cash inflows for the next quarter by month. Cash sales are 25 percent of total sales each month. Historically, sales on account have been collected as follows: 50 percent in the month of the sale, 30 percent in the month after the sale, and the remaining 20 percent two months after the sale. Gross sales for the quarter are projected as follows: January $20,000 February $10,000 March $40,000 Joy's expected cash collections for March would be:
Answer:
$30,250
Explanation:
The computation of expected cash collections for March is shown below:-
Particulars January February March
Gross sales $20,000 $10,000 $40,000
Cash sales (25%) $5,000 $2,500 $10,000
Credit sales $15,000 $7,500 $30,000
To reach credit sales we simply deduct the cash sales from gross sales.
Particulars March
Collections from:
March cash sales $10,000
Credit sales for:
January $3,000 ($15,000 × 20%)
February $2,250 ($7,500 × 30%)
March $15,000 ($30,000 x 50%)
Total collections $30,250
To reach total collection we simply added the march cash sales and Credit sales of Jan, Feb and March.
At the first meeting, team members appear to have a difference of opinion regarding the direction of the project. Robin and Khalil want to discuss the general goals of the events. Jordan and Adam believe that it's unnecessary to spend time discussing goals and philosophy and want to go straight to discussing team ground rules and making assignments. You're in the unenviable position of being the tie-breaker. Your vote can take the team in one of two directions: ironing out the general goals or establishing team ground rules and assignments. Which direction will you choose
Answer:
The correct answer is the second option: to go straight to discussing team ground rules and making assignments.
Explanation:
To begin with, in the case presented the team must understand that the general goals and the philosophy behind their actions and operations at the time of working must been already understood by everyone at that point due to the fact that those things are mentionated before start the action. Therefore that as Jordan and Adam said, it is unnecessary to discuss the things that they already must undersood, if they did their previous homework, and must go straight to the action and gain time instead of lossing it. Moreover, by doing that they will have time enough to even correct mistakes that they make during the process, so that is why to go straight to the action is the correct option to take.
“For those brave enough to act effectively now to stabilise and protect your business and maintain liquidity, opportunity will come.” Explain whether the Statement of Cash Flows is able to illustrate the ‘liquidity’ of an entity to its users and provide ONE recommendation how companies can maintain liquidity during this pandemic.
Answer: The answer is given below
Explanation:
The cash flow statement is a vital aspect of the financial statement that is provided by every organization as it is useful in knowing helps the cash flows from investing, operating, and the financing activities. The cash flow statement is useful in understanding the movement of cash for the year, vital when making business decisions and also helps to measure liquidity of a company.
During the current pandemic that has stalled productive activities at most organizations, maintaining liquidity is very vital. One way of maintaining liquidity during this period is for a firm to have enough cash that will be necessary to maintain and keep the business running. Thia can be done by reviewing the current assets of the firm and looking at those that can be converted to cash and used on immediate basis. Also, in case the firm has marketable securities, such firm can sell the securities on order to maintain liquidity.
Gundy Corporation produces area rugs. The following per unit cost information is available: direct materials $19, direct labor $6, variable manufacturing overhead $3, fixed manufacturing overhead $6, variable selling and administrative expenses $3, and fixed selling and administrative expenses $7. Using a 35% markup on total per unit cost, compute the target selling price.
Answer:
59.4
Explanation:
Gundy Corporation target selling price
Particular Amount($)
Direct material 19
Direct labor 6
Variable manufacturing overhead 3
Fixed manufacturing overhead 6
Variable selling and administrative expenses 3
Fixed selling and administrative expenses 7
Total cost 44
Add : Profit(35% ×44) 15.4
Target selling price per unit 59.4
(44+15.4)
Answer:
Selling price= $59.4
Explanation:
Giving the following information:
direct materials $19
direct labor $6
variable manufacturing overhead $3
fixed manufacturing overhead $6
variable selling and administrative expenses $3
fixed selling and administrative expenses $7
Mark-up= 35% on total per-unit cost
First, we need to calculate the total unitary cost:
Total unitary cost= 19 + 6 + 3 + 6 + 3 + 7= $44
Now, the selling price:
Selling price= 44*1.35= $59.4
Fashion Jewelers uses the perpetual inventory system. On April 2, Fashion sold goods with a cost of $5,500 for $14,000 with terms of 4/15, n/30. On April 4, the customer reported damaged goods and Fashion granted a $2,000 sales allowance. On April 10, Fashion received the payment for the sale. Give the journal entry that will be recorded on April 10 by Fashion.
A. Cash 11,520 Accounts Receivable 11,520
B. Cash 12,000 Accounts Receivable 12,000
C. Accounts Receivable 12,000 Sales 12,000
D. Cash 12,000 Sales Discount 480 Accounts Receivable 11,520
Answer: Cash 11,520 Sales Discount 480 Accounts Receivable 12,000
Explanation:
Fashion Jewellers sold goods for $14,000.
Out of this $14,000, damaged goods were returned which caused Fashion Jewellers to reduce the figure by $2,000 by way of a sales allowance.
The figure is now,
= 14,000 - 2,000
= $12,000
This $12,000 is subject to a trade term of 4/15, n30 which means that as long as the amount is paid in 15 days, a 4% discount is applicable. If the balance is not paid in 15 days however, it should be paid in 30 days.
Fashion house received the payment within the discount period so the good is liable to a 4% reduction.
= 12,000 * 4%
= $480
That means that only,
= 12,000 - 480
= $11,520 was paid as balance in cash
The proper entry on April 10 is therefore,
DR Cash $11,520
DR Sales Discount $480
CR Accounts Receivable $12,000
Sales discount is an expense and Expenses are debited when they increase.
The options do not have this answer but it is correct.
Answer:
Cash 11,520 Dr. Sales Discount 480 Dr Accounts Receivable 12,000 Cr
Explanation:
Fashion Jewelers
Perpetual inventory system
Sales $ 14000
Sales Allowance $ 2000
Sales Discounts 4% of $12000 ( 14000- 2000) = $ 480
Net Sales = $ 12000- $ 480= $ 11520
The journal entry that will be recorded on April 10 by Fashion.
Cash $11520 Dr
Sales Discount $ 480 Dr
Accounts Receivable $12000 Cr
Sales discount is an expense account and is debited. Accounts Receivable will be credited with the full amount.
Driving is a _______ business.
Answer:
hard
Explanation:
At the annual meeting of the HR division at a consumer products company, the vice president of HR noted that pay compression was a problematic phenomenon for certain jobs for which there was high demand, but low supply. This problem was especially acute for jobs in information technology and software engineering. The vice president of HR has hired you as a compensation consultant to help the company formulate an action plan for dealing with this situation. What would you say in this situation about potential solutions to the problem?
Answer:
Provide equity adjustments for employees hardest hit by pay compression
Explanation:
Pay compression is defined as a situation where employees earn similar salary regardless of their skills and experience.
In this situation pay compression will cause employee attrition because they are not satisfied with the compensation that is uniform to all employees.
To remedy this equity adjustments can be introduced for those hardest hit by the pay compression.
For example an information technology expert with 10 years experience will feel undervalued if he is on the same pay level as a new hire.
Equity adjustment is a salary change that is outside normal salary program based on promotion, reclassification, and merit.
This is used as a solution where retention of high demand staff required. A staff can be offered higher compensation to ensure they do not leave the organisation.
Higher compensation can be given based on tenure in a particular position
"An individual owns a bicycle repair business as a sole proprietorship. He does not make a lot of money, but he does have $5,000 available for investment this year. The BEST recommendation for this individual is to make a $5,000 contribution to a(n):"
Answer:
Roth IRA
Explanation:
Based on the information provided in this scenario it can be said that the individual's best option would be to make a $5,000 contribution to a Roth IRA fund. This is a retirement fund that can be will provide will continue to grow exponentially throughout the years and the individual can withdraw that money when they turn 60 years old. At this point the money is completely tax free.