The following is a list of costs that were incurred in the production and sale of large commercial airplanes Classify each cost as either a product cost or a period cost. Hence, option A is correct.
What is large commercial?Large Commercial refers to use by a for-profit organization that conducts business and offers commercial goods or services in the county where the communication site is situated and has a population of at least 150,000.
Anything that is commercial is typically related to business or commerce. A commercial is a piece of company advertising. Selling products or services for a profit is referred to as commerce. Additionally, commercial trading is conducted in the forward and futures markets, typically for hedging reasons.
To summarize, commercial speech is the promotion of a good or service through written works, radio, television, or the Internet. Commercials, Internet advertisements, and fliers are a few examples.
Thus, option A is correct.
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Information related to Whispering Winds Corp. is presented below.
1. On April 5, purchased merchandise on account from Martinez Company for $34,800, terms 2/10, net/30, FOB shipping point.
2. On April 6, paid freight costs of $790 on merchandise purchased from Martinez.
3. On April 7, purchased equipment on account for $28,200.
4. On April 8, returned damaged merchandise to Martinez Company and was granted a $5,500 credit for returned merchandise.
5. On April 15, paid the amount due to Martinez Company in full.
Prepare the journal entries to record these transactions on the books of Harwick Co. under a perpetual inventory system.
Answer:
Harwick Co Entries
DATE ACCOUNT TITLE & EXPLANATION DEBIT CREDIT
$ $
5 Apr. Merchandise Inventory 34,800
Account Payable 34,800
(To record purchase of inventory on account)
6 Apr. Freight In 790
Cash 790
(To record freight cost incurred Purchase of merchandise)
7 Apr. Equipment 28,200
Account Payable 28,200
(To record purchase of equipment on account)
8 Apr. Account Payable 5,500
Merchandise Inventory 5,500
(To record return of damaged merchandise)
15 Apr. Account Payables 34,800
Cash (34,800-5,500) 29,300
(To record payment made)
Consider a low-wage labor market. Workers in this market are not presently covered by the minimum wage, but the government is considering implementing such legislation. If implemented, this law would require employers in the market to pay workers a $5 hourly wage. Suppose all workers in the market are equally productive, the current market clearing wage rate is $4 per hour, and that at this market clearing wage there are 600 employed workers. Further suppose that under the minimum wage legislation, only 500 workers would be employed and 300 workers would be unemployed. Finally, assume that the market demand and supply curves are linear and that the market reservation wage, the lowest wage at which any worker in the market would be willing to work, is $2. Compute the dollar value of the impact of the policy on employers, workers, and society as a whole.
Answer:
the total impact of minimum wage on employers, workers, and society as a whole is -$150
Explanation:
From the information given ;
As a result of the increase in the wage they must pay; employers will lose surplus that relates to the area of a trapezoid resulting from the reduction in the size of the surplus triangle according to the demand curve of labor; In short, since the trapezoid is a parallelogram ; it could be thought to be as a rectangle with sides equal to the wage increase of ( $5 - $4) = $1
Also; the new employment level is $500
The triangle with a height equal to the wage increase is $1 with a base equal to the reduction in the number of workers demanded (600 - 500 = 100)
Summing up all two areas together;we get:
= (1)(500) + (1) (100/2)
= 500 + 50
= $550
The worker who remain in the market each gain a surplus equal to the amount of $1 increase in the wage that they receive.
Therefore; the total increase in surplus = (1)(500) = $500
The 100 workers who lose their job will definitely lose surplus.
If these worker are evenly distributed along the market supply curve between the market reservation wage of $2 and market equilibrium wage of $4.
Their average loss of surplus can be computed as:
= 1/2($4 - $2)
=0.5($2)
= $1
Thus; the total loss of surplus is :
= $100× $1
= $100
Thus , the total impact of minimum wage on employers, workers, and society as a whole is :
= $550 -$ 100 - $550
= -$150
A noncancelable lease contains an option to purchase a leased asset at a price that is sufficiently lower than the asset's expected fair value so that the exercise of the option appears reasonably certain. The fair value of the asset exceeds the lessor's cost of the asset. Therefore, the lease will be accounted for by the lessor as a(n):________ a) Guaranteed lease. b) Financing lease. c) Operating lease. d) Sales-type lease.
Answer:
d) Sales-type lease.
Explanation:
A bargain purchase option is a non-cancelable lease that contains an option to purchase a leased asset at a price that is sufficiently lower than the asset's expected fair value so that the exercise of the option appears reasonably certain.
Hence, the fair value of the asset exceeds the lessor's cost of the asset. Therefore, the lease will be accounted for by the lessor as Sales-type lease.
A Sales-type lease is a type of capital lease that doesn't meet the criteria to be classified as operating and the lessor makes both interest income and a loss or profit on the transaction, thus causing the fair market value of the leased asset to exceed the lessor's cost to purchase the leased asset.
Additionally, in a sales-type lease, the lessor should ensure net investment, impairment, variable lease payment, interest income are accounted for before the commencement date of the lease.
Consider two ways to protect your car from theft. The Club is a conspicuous steering wheel lock that makes it difficult for a thief to take a car. Lojack is a secret tracking system that makes it easier for police to catch a thief who steals a car on which it is installed.
If a car thief encounters a car with the Club and a car without it, the car with the Club imposes a________externality on the car without the Club. A policy implication of this result is a______those who use the Club.
If a car thief encounters two cars without the Club, but the car thief fears a Lojack system might be installed in one of the cars, the car with the Lojack system imposes a_______externality on the other car. A policy implication of this result is a_______those who use the Lojack technology.
Answer and Explanation:
According to the given situation,
The car with the club enforces on the car without the club a negative externality if a robber experiences a car with the club and a car without them. A policy implication of that result is a tax on those who use the club.
If a car thief reaches two cars even without club, however the car thief is afraid to build a lojack system in one of cars, the car with the Lojakc system forces on the other car positive externality. A resulting policy consequence is a subsidy for those who use the Lojack system.
Lindsay is training two new sales representatives, Lance and Ayden, to use the revised client-tracking database, which has been updated and improved. Lindsay is sharing her desktop to walk them through the steps of inputting new client information. Lindsay is in Indianapolis, Lance is in Boston, and Ayden is in Phoenix.
In order to make the meeting more successful, Lindsay should:________.
a. Be sure that Lance and Ayden know how to connect to Lindsay’s desktop.
b. Frequently ask Lance and Ayden if what she is saying makes sense.
c. Explain how questions should be asked and answered.
e. Expect to review meeting content due to the limitations of virtual technology.
Answer:
a. Be sure that Lance and Ayden know how to connect to Lindsay’s desktop.
b. Frequently ask Lance and Ayden if what she is saying makes sense.
e. Expect to review meeting content due to the limitations of virtual technology.
Explanation:
In today's world there is a wide array of different programs that allow us to virtually connect with other individuals in order to communicate, share ideas, and hold meetings. These options, unfortunately, have their downsides as well, the main one being faulty connection which leads to miscommunication. This can lead to serious problems. Therefore the best way to guarantee success is to help those attending the meeting make sure they know how to connect and participate correctly, and continuously make sure they are understanding everything that is being said. Once the meetings are done, a review will make sure that everyone is on the same page and clear up any questions that anyone may have.
A team has prepared and estimate for what it can get accomplished in a Sprint. The Product Owner has wanted more to get accomplished in the upcoming Sprint and wants the Team to take on an additional user story. What should the ScrumMaster do in response to this conflict?
Answer: ScrumMaster should ask the Product Owner which other User Story they would like to give up in exchange for the one they want to add for this upcoming Sprint.
Explanation:
The options to the question are:
a. ScrumMaster should replan the Product Backlog and propose better user stories to address in the Sprint.
b. ScrumMaster should ask the Product Owner which other User Story they would like to give up in exchange for the one they want to add for this upcoming Sprint.
c. Stay out of the way as this is not the ScrumMaster's job to resolve.
d. ScrumMaster should ask the team to take the story on and work overtime.
From the question, we are informed that a team has prepared an estimate for what it can get accomplished in a Sprint and that the Product Owner has wanted more to get accomplished in the upcoming Sprint and therefore wants the team to take on an additional user story.
The best way to tackle this conflict is for the ScrumMaster should ask the Product Owner which other User Story they would like to give up in exchange for the one they want to add for this upcoming Sprint. Since an estimate has already been prepared, taking an additional user story will bring about an overestimation. Therefore, to being the right track, the thing to do is to actually give up a user story for the new one to be added.
Suppose that you are a member of the Board of Governors of the Federal Reserve System. The economy is experiencing a sharp and prolonged inflationary trend. What changes in (a) the reserve ratio, (b) the discount rate, and (c) open-market operations would you recommend? Explain in each case how the change you advocate would affect commercial bank reserves, the money supply, interest rates, and aggregate demand. g
Answer:
Explanation:
1. Assuming an economy is experiencing a sharp and prolonged inflationary trend, I'll recommend the following changes:
a. Reserve ratio: I will increase the reserve ratio.
b. Discount rate: I will increase the discount rate.
c. Open market operations: I will recommend tightening the money supply through the selling of more government bonds.
2a. The reserve requirement is the central bank regulation which sets the minimum amount of reserves which must be held by a commercial bank. An increase in the reserve ratio will lead to less money in circulation.
b. the money supply: Thhe money supply will contract i.e tighten
c. Interest rates: Interest rates will rise leading to an increase in the investments which keeps money out of circulation and also lead to a decrease in inflation rates.
d. Aggregate demand. Aggregate demand would reduce, and this would lead to a reduction in inflation.
A food truck operator originally produced hamburgers and hotdogs. To serve the tastes of their various customers, the hot dog vendor decides to start producing turkey dogs and ham sandwiches as well. Since the new products were introduced, average costs rose dramatically. The vendor is experiencing:__________.
a. Economies of scope
b. Diseconomies of scope
c. Economies of scale
d. Diseconomies of scale
Answer:
The correct answer is (b) Dis-economies of scope
Explanation:
Solution
Dis-economics of scope : This refers to a situation when the average cost of production is greater from the shared production of services than the average costs from the preceding independent production of the services.
The vendor here in this case is experiencing Dis-economics of scope.
Record the following transactions of Fronke’s Fashions in a general journal:
April 1 Purchased merchandise for cash, $2,310.
2 Returned merchandise for cash purchased on April 1; received a cash refund of $218.
4 Purchased merchandise on credit from Breit Distributors, Invoice 125, $871, terms n/30; freight of $46 prepaid by Breit Distributors and added to the invoice.
7 Returned damaged merchandise purchased on April 4 from Breit Distributors; received Credit Memorandum 202 for $58.
30 Paid the amount due to Breit Distributors for the purchase of April 4, less the return on April 7, Check 1458.
Answer:
Fronke's Fashions
General Journal:
April 1:
Debit Purchases $2,310
Credit Cash Account $2,310
To record purchase of merchandise for cash.
April 2:
Debit Cash Account $218
Credit Purchases Returns $218
To record return of merchandise for cash.
April 4:
Debit Purchases $825
Debit Freight-in $46
Credit Accounts Payable (Breit Distributors) $871
To record purchase of merchandise on credit, Invoice 125, terms n/30
April 7:
Debit Accounts Payable (Breit Distributors) $58
Credit Purchases Returns $58
To record return of damaged merchandise, Credit Memo 202.
April 30:
Debit Accounts Payable (Breit Distributors) $813
Credit Cash Account $813
To record payment of amount due via Check 1458.
Explanation:
Journal entries are made to record business transactions as they occur on a daily basis. The journal is the first accounting record kept about a transaction. It shows the account that will be debited or credited in the General Ledger.
Asonia Co. will pay a dividend of $5.30, $9.40, $12.25, and $14.25 per share for each of the next four years, respectively. The company will then close its doors. If investors require a return of 9.8 percent on the company's stock, what is the stock price?
Answer:
$31.68
Explanation:
The computation of the stock price is shown below:
= Dividend for year 1 ÷ (1 + required return)^number of years + Dividend for year 2 ÷ (1 + required return)^ number of years + Dividend for year 3 ÷ (1 + required return)^ number of years + Dividend for year 4 ÷ (1 + required return)^ number of years
= $5.30 ÷ (1 + 9.8%) + $9.40 ÷ (1 + 9.8%)^2 + $12.25 ÷ (1 + 9.8%)^3 + $14.25 ÷ (1 + 9.8%)^4
= 4.82695810564663 + 7.79692170895252 + 9.25399090557962 + 9.80404969365523
= 31.681920413834
= $31.68
Lenders charge a loan origination fee to A. cover the expenses involved in generating the loan B. guard against charges of usury C. guard against losses in the event of a short sale D. cover the losses involved if the borrower repays the loan before the end of the loan term.
Answer:
A
Explanation:
An origination fee is the fee charged to cover expenses involved with processing a loan application.
The Blossom Hotel opened for business on May 1, 2022. Here is its trial balance before adjustment on May 31. BLOSSOM HOTEL Trial Balance May 31, 2022 Debit Credit Cash $ 2,513 Supplies 2,600 Prepaid Insurance 1,800 Land 15,013 Buildings 67,600 Equipment 16,800 Accounts Payable $ 4,713 Unearned Rent Revenue 3,300 Mortgage Payable 33,600 Common Stock 60,013 Rent Revenue 9,000 Salaries and Wages Expense 3,000 Utilities Expense 800 Advertising Expense 500 $110,626 $110,626 Other data: 1. Insurance expires at the rate of $450 per month. 2. A count of supplies shows $1,070 of unused supplies on May 31. 3. (a) Annual depreciation is $2,760 on the building. (b) Annual depreciation is $2,160 on equipment. 4. The mortgage interest rate is 5%. (The mortgage was taken out on May 1.) 5. Unearned rent of $2,620 has been earned. 6. Salaries of $720 are accrued and unpaid at May 31.
Answer:
BLOSSOM HOTEL
Trial Balance
May 31, 2022
Debit Credit
Cash $2,513
Supplies $2,600
Prepaid Insurance $1,800
Land $15,013
Buildings $67,600
Equipment $16,800
Accounts Payable $4,713
Unearned Rent Revenue $3,300
Mortgage Payable $33,600
Common Stock $60,013
Retained earnings $4,700
$106,326 $106,326
Rent Revenue $9,000
Salaries and Wages Expense $3,000
Utilities Expense $800
Advertising Expense $500
net income $4,700
adjusting entries:
Dr Insurance expense 450
Cr Prepaid insurance 450
Dr Supplies expense 1,530
Cr Supplies 1,530
Dr Depreciation expense 4,920
Cr Accumulated depreciation building 2,760
Cr Accumulated depreciation equipment 2,160
Dr Interest expense 140
Cr Interest payable 140
Dr Unearned revenue 2,620
Cr Rent revenue 2,620
Dr Wages expense 720
Cr Wages payable 720
BLOSSOM HOTEL
Income Statement
May 31, 2022
Rent Revenue $11,620
Salaries and Wages Expense $3,720
Utilities Expense $800
Supplies expense $1,530
Depreciation expense $4,920
Advertising Expense $500
Insurance expense $450
Interest expense $140
net loss -$440
BLOSSOM HOTEL
Balance Sheet
May 31, 2022
Debit Credit
Cash $2,513
Supplies $1,070
Prepaid Insurance $1,350
Land $15,013
Buildings $64,840
Equipment $14,640
Accounts Payable $4,713
Interest payable $140
Wages payable $720
Unearned Rent Revenue $680
Mortgage Payable $33,600
Common Stock $60,013
Retained earnings ($440)
$99,426 $99,426
Multiple Choice Question 72 Sheffield Corp. produces a product that requires 2.1 pounds of materials per unit. The allowance for waste and spoilage per unit is 0.2 pounds and 0.1 pounds, respectively. The purchase price is $2 per pound, but a 2% discount is usually taken. Freight costs are $0.1 per pound, and receiving and handling costs are $0.07 per pound. The hourly wage rate is $12 per hour, but a raise which will average $0.30 will go into effect soon. Payroll taxes are $1.20 per hour, and fringe benefits average $2.40 per hour. Standard production time is 1 hour per unit, and the allowance for rest periods and setup is 0.2 hours and 0.1 hours, respectively. The standard direct materials quantity per unit is
Answer:
Standard quantity= 2.4 pounds
Explanation:
Giving the following information:
Sheffield Corp. produces a product that requires 2.1 pounds of materials per unit. The allowance for waste and spoilage per unit is 0.2 pounds and 0.1 pounds, respectively.
To calculate the standard quantity, we need to add the allowance for waste and spoilage.
Standard quantity= 2.1 + 0.2 + 0.1
Standard quantity= 2.4 pounds
For the next nine questions, use the data in the following tables for an economy that produces only two things, bread and computers. Assume that all production is consumed in each year:
Year 1
Good Quantity Price
Bread 30 $10
Computers 10 $50
Year 2
Good Quantity Price
Bread 40 $15
Computers 15 $60
1. Using the chain weighted method, and selecting year 1 as a base, what is real GDP in year 2?
2. Using the chain weighted method, and selecting year 2 as a base, what is real GDP in year 2?
Answer:
1. Using the chain weighted method, and selecting year 1 as a base, what is real GDP in year 2?
$1,1502. Using the chain weighted method, and selecting year 2 as a base, what is real GDP in year 2?
$1,500Explanation:
When you use the chain weighted method, you must multiply the base year's price times the current quantities to determine real GDP.
Year 1 Year 2
Quantity Price Quantity Price
Bread 30 $10 40 $15
Computers 10 $50 15 $60
real GDP in year 2 using year 1 as base = (15 x $50) + (40 x $10) = $750 + $400 = $1,150
real GDP in year 2 using year 2 as base = (15 x $60) + (40 x $15) = $900 + $600 = $1,500
The Digital Electronic Quotation System (DEQS) Corporation pays no cash dividends currently and is not expected to for the next five years. Its latest EPS was $12.50, all of which was reinvested in the company. The firm’s expected ROE for the next five years is 21% per year, and during this time it is expected to continue to reinvest all of its earnings. Starting in year 6, the firm’s ROE on new investments is expected to fall to 16%, and the company is expected to start paying out 45% of its earnings in cash dividends, which it will continue to do forever after. DEQS’s market capitalization rate is 20% per year.A. What is your estimate of DEQS’s intrinsic value per share?B. Assuming its current market price is equal to its intrinsic value, what do you expect to happen to its price over the next year?C. What do you expect to happen to price in the following year?D. What is your estimate of DEQS’s intrinsic value per share if you expected DEQS to pay out only 25% of earnings starting in year 6?
Answer:
Kindly check attached picture
Explanation:
Kindly check attached picture for detailed explanation
A company reported net income of $6 million. During the year the average number of common shares outstanding was 3 million. The price of a share of common stock at the end of the year was $5. There were 400,000 shares of preferred stock outstanding on average and no dividends were declared and the preferred stock is noncumulative. The Price/Earnings Ratio is approximately:
a. $0.40.b. $1.76.c. $1.86.d. $2.00.
Answer:
The correct answer is $2.5, but it is not included in the option.
Explanation:
Earning per share (EPS) = Net income / Average number of common shares outstanding = $6,000,000 / 3,000,000 = $2 per share
Common stock market price per share (MPS) = $5
Price/Earnings Ratio = MPS / EPS = $5 / $2 = $2.5
The correct answer is $2.5.
Bond X is a premium bond making semiannual payments. The bond has a coupon rate of 9.6 percent, a YTM of 7.6 percent, and has 13 years to maturity. Bond Y is a discount bond making semiannual payments. This bond has a coupon rate of 7.6 percent, a YTM of 9.6 percent, and also has 13 years to maturity. Assume the interest rates remain unchanged and both bonds have a par value of $1,000.
Required:
a. What are the prices of these bonds today?
b. What do you expect the prices of these bonds to be in one year?
c. What do you expect the prices of these bonds to be in three years?
d. What do you expect the prices of these bonds to be in eight years?
e. What do you expect the prices of these bonds to be in 12 years?
f. What do you expect the prices of these bonds to be in 13 years?
Answer:Hi
Explanation:Hi
g Question 1 of 1010.0 Points A company's unethical behavior may result in the following except A. buyers will shun the company B. the company will have difficulty recruiting and retaining talented employees C. the company risks damage to shareholders in the form of lost revenues, higher costs, and lower profits, and the company's reputation will suffer D. the company will have to deal with the Sarbanes-Oxley Act of 2002, which requires the company remove the tarnished employees E. All of these choices are correct
Answer:
E
Explanation:
Answer:
the answer is E
Explanation:
A machine that produces a certain piece must be turned off by the operator after each piece is completed. The machine "coasts" for 15 seconds after it is turned off, thus preventing the operator from removing the piece quickly before producing the next piece. An engineer has suggested installing a brake that would reduce the coasting time to 3 seconds.
The machine produces 50,000 pieces a year. The time to produce one piece is 1 minute 45 seconds, excluding coastint time. The operator earns $10 an hour and other direct costs for operating the machine are $5 an hour. The brake will require servicing every 589 hours of operation. It will take the operator 30 minutes to perform the necessary maintenance and will require $48 in parts and material. The brake is expected to last 7,500 hours of operation (with proper maintenance) and will have no salvage value.How much could be spent for the brake if the Minimum Attractive Rate of Return is 10% compounded annually?
Answer:
$9197.72
Explanation:
To find the amount to be spent for the brake if the Minimum Attractive Rate of Return is 10% compounded annually, we have the following:
Cost incurred without the brake = Number of pieces * (Number of minutes for producing one product / total number of minute in an hour) * cost per peice
Where,
Number of minutes for producing a product without the brake system =
105 seconds(1 min, 45 sec) + 15 seconds(coast time) = 2 minutes or 120 seconds
Thus,
Cost incurred without break is =
[tex]50,000* \frac{2}{60}* (10 + 5) = 25,000 [/tex]
Let's find the number of minutes for installing a break
= 105 + 3 seconds = 108 seconds = 1.8 minutes
Cost incurred with break =
[tex] 50,000 * \frac{1.8}{60} * (10 + 5) = $ 22,500 [/tex]
To find the maintainence cost, let's consider parts & material cost and labor cost for operator
[tex] (\frac{50000 * \frac{1.8}{60}}{589}) * (\frac{30}{60} * (10+48)) = 73.85 [/tex]
No. of years the brake will last
[tex] = \frac{\frac{7500}{50000}}{1.8/60} = 5 years [/tex]
The maximum amount that can be spent on brake will be the difference in cost incurred with brake and without brake * present value of annuity factor of 5 years at 10%
= (25,000 - 22,573.85)*PVAF, 10% for 5 years = $9197.72
$9198 (rounded off)
The the amount to be spent for the brake if the Minimum Attractive Rate of Return is 10% compounded annually is $9197.72
Buster Industries pays weekly salaries of $30,000 on Friday for a five-day week ending on that day. The adjusting entry necessary at the end of the fiscal period ending on Tuesday is
Answer:
Debit Salary Expenses $12,000, Credit Salary Payable $12,000
Explanation:
5 days salaries = $30,000
2 days salaries = $30,000/5 =$20,000
The adjusting entry would be increasing salary expenses and creating a corresponding liability for the same.
Debit Salary Expenses $12,000, Credit Salary Payable $12,000
The adjusting entry necessary at the end of the fiscal period ending on Tuesday is : Debit Salary Expenses $12,000, Credit Salary Payable $12,000.
A 12-month period known as a "fiscal period" or "fiscal year" is when a business entity is required to account for all transactions and events involving that specific company. The 12-month timeframe does not always correspond to the 365-day period from January 1 to December 31.
The calculation for salary is as follows:
The total of 5days salaries is $30,000.
So, 2 days salaries will be:
[tex]\dfrac{\$30,000}{5} \times 2\\\\=\$12,000[/tex]
The adjusting entry would be increasing salary expenses and creating a corresponding liability for the same.
Therefore, the salaries expense account is debited and salaries payable account is credited for $12000.
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Major Manuscripts, Inc.
2012 Income Statement
Net sales $7,800
Cost of goods sold 6,865
Depreciation 210
Earnings before interest and taxes $ 725
Interest paid 31
Taxable Income $ 694
Taxes 284
Net income $410
Dividends $ 187
Major Manuscripts, Inc.
2012 Balance Sheet
2012 2012
Cash $ 2,400
Accounts payable $ 1,550
Accounts rec. 880
Long-term debt 300
Inventory 2,700
Common stock $ 3,100
Total $ 5,980
Retained earnings 4,430
Net fixed assets 3,400
Total assets $ 9,380
Total liabilities & equity $ 9,380
Major Manuscripts, Inc., is currently operating at maximum capacity. All costs, assets, and current liabilities vary directly with sales. The tax rate and the dividend payout ratio will remain constant. In 2013, no new equity will be raised and sales are projected to increase by 10 percent. Construct the pro formas for 2013 and answer the following questions (show your work!).
Projected total assets= $______
Projected retained earnings= $______
Additional new debt required= $______
Answer:
Projected total assets = $10,318
Projected retained earnings = $4,675.30
Additional new debt required = $537.70
Explanation:
external financing needed = EFN = [(total assets/total sales) x ($ Δ sales)] - [(total current liabilities/total sales) x ($ Δ sales)] - [profit margin x forecasted sales in $ x (1 - dividend payout ratio)]
total assets = $9,380, projected total assets = $9,380 x 1.1 = $10,318
total sales = $7,800
$ Δ sales = $780
current liabilities = $1,550
profit margin = net income / sales = $410 / $7,800 = 0.052564
forecasted sales = $7,800 x 1.1 = $8,580
dividends payout ratio = dividends / net income = $187 / $410 = 0.4561
EFN = [($9,380/$7,800) x ($780)] - [($1,550/$7,800) x ($780)] - [0.052564 x $8,580 x (1 - 0.4561)]
EFN = $938 - $155 - $245.30 = $537.70
projected retained earnings = current retained earnings - projected net income - projected dividends = $4,430 + $451 - $205.70 = $4,675.30
Evaluate the following investment options by comparing their risk and liquidity: buying a franchise real estate (buying property) mutual fund Which of the three investment alternatives is the best for you? Explain the reasons for your choice.
Answer:
Buying a franchise: For me, this is the riskiest investment, because the success of the business depends on the product or service it sells. If there is no demand for the product or service, the business will go under. This investment is also highly illiquid—in addition, finding someone willing to buy a business is difficult.
Mutual fund: This is the least risky of the three investment options. It is highly liquid compared to buying a franchise or real estate. Mutual fund investors can easily cash in their investments by selling the units they hold in a fund at the current market price.
Real estate: Real estate is a risky investment. First, property prices can fall in a depressed housing market. Second, real estate properties are illiquid. They can’t be sold quickly for a good price, especially in times of recession in the housing market or in the overall economy.
A mutual fund is the best of the three investment options for me, for the following reasons:
I can invest small amounts of money regularly and get higher returns on the investment than I would from a savings account. Also, this is a highly liquid investment. In case of a financial emergency, I can quickly sell my mutual fund units at their current market price.
Real estate is currently both a risky and illiquid investment, because of poor market conditions.
Buying a franchise is not a good option for me, because I don’t plan to go into business. In any case, I don’t have the money to make this investment.
Explanation: PLATO
Buying a franchise: For me, this is the riskiest investment, because the success of the business depends on the product or service it sells. If there is no demand for the product or service, the business will go under. This investment is also highly illiquid in addition to someone willing to buy a business is difficult. Mutual fund is the least risky of the three investment options. It is highly liquid compared to buying a franchise or real estate. Mutual fund investors can easily cash in their Investments by selling the units they hold in a fund at the current market price. Real estate: Real estate is a risky investment. First, property prices can fall in a depressed housing market. Second, real estate properties are illiquid. They can't be sold quickly for a good price, especially in times of recession in the housing market or in the overall economy. A mutual fund is the best of the three investment options for me, for the following reasons: I can invest small amounts of money regularly and get higher returns on the investment than I would from a savings account. Also, this is a highly liquid investment. In case of a financial emergency, I can quickly sell my mutual fund units at their current market price. Real estate is currently both a risky and liquid investment, because of poor market conditions. Buying a franchise is not a good option for me, because I don't plan to go into business. In any case, I don't have the money to make this investment.
Explanation:
plato and i change it up a little
On December 1 of the current year, Rob Elliot invested $35,000 of his cash to form a proprietorship, GGE Enterprises. After all transactions have been entered into the accounting equation, the following are the ending balances for selected items on December 31. On that date, the financial statements were prepared. The statement of owner’s equity for GGE Enterprises reported Rob Elliot’s owner’s equity as of December 31 at $38,000. The balance sheet reported total liabilities and owner’s equity of $55,650. Accounts Accounts Rob Elliot, Rob Elliot, Fees Rent Supplies Utilities Wages Miscellaneous Cash Receivable Land Payable Capital Drawing Earned Expense Expense Expense Expense Expense ? $8,600 $16,500 ? ? $5,750.00 $26,750.00 $6,400.00 ? $4,650.00 $1,265.00 $460.00 Review the following questions. Place an ‘X’ in the box to indicate which financial statement(s) report the desired information. Enter the amount reported on the financial statement. Balance Income Statement of Sheet Statement Owner’s Equity Amount What are the total assets owned by GGE Enterprises? $ How much cash is being held by GGE Enterprises? X $ By what amount did Rob Elliot’s equity increase or decrease during the period? $ What is the amount of profit or loss during December? $ What were the total expenses for December? $ How much expense was reported for supplies? $ How much does GGE Enterprises owe to its creditors? $
Answer and Explanation:
The formula and the computation is shown below:
a. Total Assets = Total Liabilities and Owners’ Equity
Total Assets = $55,650
b. Total Assets = Cash + Accounts Receivable + Land
$55,650 = Cash + $8,600 + $16,500
Cash = $55,650 - $8,600 - $16,500
= $30,550
c. Increase in Owners’ Equity = Rob Elliot Capital on 31 December - Rob Elliot, Capital on 31 December
= $38,000 - $0
= $38,000
d. Increase in Owners’ Equity = Additional Investment during December + Net Income - Rob Elliot Drawing
= $38,000 = $35,000 + Net income - $5,750
Net income = $8,750
e. Net Income = Fees Earned - Total Expenses
$8,750 = $26,750 - Total expenses
Total expenses = $26,750 - $8,750
= $18,000
f. Total Expenses = Rent Expense + Supplies Expense + Utilities Expense + Wages Expense + Miscellaneous Expense
$18,000 = $6,400 + Supplies Expense + $4,650 + $1,265 + $460
Supplies expenses = $18,000 - $12,775
= $5,225
g. Total Liabilities and Owners’ Equity = Total Liabilities + Total Owners’ Equity
$55,650 = Total Liabilities + $38,000
Total liabilities = $17,000
Total Liabilities = Accounts Payable
Accounts Payable = $17,000
Amount owed to Creditors = Accounts Payable
Amount owed to Creditors = $17,000
At December 31, 2015, Albrecht Corporation had outstanding 368,000 shares of common stock and 6,000 shares of 9.5%, $100 par value cumulative, nonconvertible preferred stock. On May 31, 2016, Albrecht sold for cash 12,000 shares of its common stock. No cash dividends were declared for 2016. For the year ended December 31, 2016, Albrecht reported a net loss of $1,743,000.
Calculate Albrecht's net loss per share for the year ended December 31, 2016.
Answer:
Net loss per share is -$4.80
Explanation:
The net loss per share is the total loss in the year divided by the weighted average number of common stock in the year.
Total net loss=net loss-preferred stock dividend
preferred stock dividend=$100*6,000*9.5%=$ 57,000.00
total net loss=-$1,743,000-$57,000=-$1,800,000
weighted average number of common stock=368,000*5/12+(368,000+12,000)*7/12=375,000 shares
net loss per share=-$1,800,000/375,000=-$4.80
Marigold Corp. is authorized to issue both preferred and common stock. The par value of the preferred is $50. During the first year of operations, the company had the following events and transactions pertaining to its preferred stock. Feb. 1Issued 48,500 shares for cash at $51 per share. July 1Issued 58,000 shares for cash at $59 per share. Journalize the transactions.
Answer:
Dr cash $ 2,473,500.00
Cr preferred stock $ 2,425,000.00
Cr paid-in capital in excess of par-preferred stock $48,500
Dr cash $ 3,422,000.00
Cr preferred stock $ 2,900,000
Cr paid-in capital in excess of par-preferred stock $522,000
Explanation:
The issue of preferred shares on Feb 1 would result in cash proceeds of $ $2,473,500.00 i.e (48,500*$51)
The proceeds would be debited to cash while preferred stock account is credited with par amount of $ 2,425,000.00 (48,500*$50) and the remaining amount of $ 48,500.00 is credited to paid-in capital in excess of par-preferred stock.
The issue of preferred shares on July 1 would result in cash proceeds of $3,422,000.00 i.e (58,000*$59)
The proceeds would be debited to cash while preferred stock account is credited with par amount of $ 2,900,000.00 (58000*$50) and the remaining amount of $ 522,000.00 is credited to paid-in capital in excess of par-preferred stock
Kater Company manufactures shelving units. The company receives pre-cut wood, drills holes in the wood so that movable shelves may be installed, then assembles and paint the units. Classify each of the following items of factory overhead as either fixed or variable cost.
a. Supervisor of the Drilling Department
b. Oil used to lubricate drill press machines
c. Propane for forklift trucks used to move the material from the Drilling Department to the Assembly Department
d. Natural gas used to heat the plant
e. Security guard
f. Insurance on factory building
g. Electricity to power drill press machines
h. Rent of factory building
Answer: Please see below for answers.
Explanation:
Variable costs are referred to as costs incurred to a company which change as the volume of production by the company or business changes that is when the volume of production increases, the costs increases , and decreases with decreased production.
Fixed costs are expenses incurred to a company which do not change in relation to the volume of production by the company or business that is when the volume of production increases or decreases, the costs remains the same.
a. Supervisor of the Drilling Department----- Fixed cost
b.Oil used to lubricate drill press machines---- Variable cost
c.Propane for forklift trucks used to move the material from the Drilling Department to the Assembly Department---- Variable cost
e.Natural gas used to heat the plant----- Variable cost
f.Security guard---- fixed cost s
g.Insurance on factory building----- Fixed costs
h.Electricity to power drill press machines---- Variable costs
.i Rent of factory building-Fixed costs
Debit CreditCash $2,870 Accounts Receivable $3,231 Supplies 800 Equipment 3,800 Accounts Payable 2,666 Unearned Service Revenue 1,200 Common Stock 6,000 Retained Earnings 3,000 Service Revenue 2,380 Salaries and Wages Expense 3,400 Office Expense 940 Totals $13,371 $16,91Each of the listed accounts should have a normal balance per the general ledger. An examination of the ledger and journal reveals the following errors.1. Cash received from a customer on account was debited for $570, and Accounts Receivable was credited for the same amount. The actual collection was for $750.2. The purchase of a computer printer on account for $500 was recorded as a debit to Supplies for $500 and a credit to Accounts Payable for $500.3. Services were performed on account for a client for $890. Accounts Receivable was debited for $890 and Service Revenue was credited for $89.4. A payment of $65 for telephone charges was recorded as a debit to Office Expense for $65 and a debit to Cash for $65.5. When the Unearned Service Revenue account was reviewed, it was found that service revenue amounting to $325 was performed prior to June 30 (related to Unearned Service Revenue).6. A debit posting to Salaries and Wages Expense of $670 was omitted.7. A payment on account for $206 was credited to Cash for $206 and credited to Accounts Payable for $260.8. A dividend of $575 was debited to Salaries and Wages Expense for $575 and credited to Cash for $575.
Answer:
TRIAL BALANCE
Assets:
Cash $2,920
Accounts Receivable $3,051
Supplies $300
Equipment $4,300
Total assets 10,571
Liabilities + Stockholders' Equity
Accounts Payable $2,200
Unearned Service Revenue $875
Common Stock $6,000
Retained Earnings $1,496
Total liabilities + stockholders' equity 10,571
Explanation:
1.Cash received from a customer on account was debited for $570, and Accounts Receivable was credited for the same amount. The actual collection was for $750.
Dr Cash 180
Cr Accounts receivable 180
2. The purchase of a computer printer on account for $500 was recorded as a debit to Supplies for $500 and a credit to Accounts Payable for $500.
Dr Equipment 500
Cr Supplies 500
3. Services were performed on account for a client for $890. Accounts Receivable was debited for $890 and Service Revenue was credited for $89.
Dr Accounts receivable 0
Cr Service revenue 801
4. A payment of $65 for telephone charges was recorded as a debit to Office Expense for $65 and a debit to Cash for $65.
Dr Office expense 0
Cr Cash 130
5. When the Unearned Service Revenue account was reviewed, it was found that service revenue amounting to $325 was performed prior to June 30 (related to Unearned Service Revenue).
Dr Unearned service revenue 325
Cr Service revenue 325
6. A debit posting to Salaries and Wages Expense of $670 was omitted.
Dr Wages expense 670
Cr Cash 0
7. A payment on account for $206 was credited to Cash for $206 and credited to Accounts Payable for $260.
Dr Accounts payable 466
Cr Cash 0
8. A dividend of $575 was debited to Salaries and Wages Expense for $575 and credited to Cash for $575.
Dr Retained earnings 575
Cr Wages expense 575
Service Revenue 2,380 + 801 + 325 = 3,506
Salaries and Wages Expense 3,400 + 670 - 575 = 3,495
Office Expense 940
net loss -929
Cash $2,870 + 180 - 130 = 2,920
Accounts Receivable $3,231 - 180 = 3,051
Supplies 800 - 500 = 300
Equipment 3,800 + 500 = 4,300
Accounts Payable 2,666 - 466 = 2,200
Unearned Service Revenue 1,200 - 325 = 875
Common Stock 6,000
Retained Earnings 3,000 - 575 - 929 = 1,496
We have learned about four types of adjustments: (1) prepaid expenses, (2) unearned revenues, (3) accrued revenues, and (4) accrued expenses. With those concepts in mind, review the following scenario, As the book-keeper for your company you are required to create quarterly financial statements (Income Statement, Statement of Owner's Equity Balance Sheet and Statement of Cash Flows) in order to report on the financial activities of the company for the quarter (three months). It is now March 29th, and in preparation for creating the 1st quarter's financial statements (as of 3/31), you have called a meeting with the Dept. Managers for Accounts Receivable and Accounts Payable to confirm deadlines that have to be met for recording March-related transactions. As the meeting starts the owner walks in - she sits quietly as you explain the deadlines, but as soon as you have finished she says "Well, for this quarter, if we have not paid March invoices by March 31, there is no need to record them in March. We can record/expense those invoices when we pay them in April or May." Required:
1. Do you agree with the owner, or, do you feel that an adjusting entry is necessary in the situation described? If so - which type of adjusting entry is needed?
2. Why is the adjustment necessary? (Refer to concepts in the chapter) In your post:
a) discuss the impact (understated or overstated) on the accounts affected if the adjustment is not made, and
b) explain how the adjustment affects the appropriate financial statements
3, Assume one of the unpaid invoices is for $2,000 in Advertising. Show the type of adjusting entry you would create.
Answer:
1. Do you agree with the owner, or, do you feel that an adjusting entry is necessary in the situation described? If so - which type of adjusting entry is needed?
She is wrong, because the accrual principle states that both revenues and expenses must be recognized during the periods that they actually occur, not when they are collected or paid for.2. Why is the adjustment necessary? (Refer to concepts in the chapter) In your post:
If you do not record accrued expenses, then you are understating first quarter expenses and overstating second quarter expenses.a) discuss the impact (understated or overstated) on the accounts affected if the adjustment is not made, and
March invoices represent costs and expenses associated to the activities carried out during March, and not recording them properly will result in net income being over stated during March (first quarter)and under stated during the second quarter.b) explain how the adjustment affects the appropriate financial statements
First quarter's net income will be over stated while second quarter's net income will be under stated.3, Assume one of the unpaid invoices is for $2,000 in Advertising. Show the type of adjusting entry you would create.
Dr Advertising expense 2,000
Cr Accounts payable 2,000
Explanation:
In September 2000 the Pullman Group arranged a bond issue for the estate of the late Marvin Gaye. The collateral on the bonds (and source of cash flow for interest and principal payments) consisted of future royalties from classic songs such as "What's Going On," and "I Heard It Though The Grapevine." The bond issue had a $1,000 face value and a coupon rate of 5%. If the bond matures in 26 years, pays semiannual coupons, and the yield to maturity is 6%, what will the bond sell for
Answer:
The bond will sell for the amount of $869.17
Explanation:
According to the given data coupon amount = 50/2 = 25
Therefore, in order to calculate the selling price of the bond we would have to make the following calculation:
selling price of the bond = 25 * PVIFA(3%,52) + 1,000 * PVIF(3%,52)
selling price of the bond= 25 * 26.1662 + 1,000 * 0.2150
selling price of the bond= $869.17
The bond will sell for the amount of $869.17
The bond will sell for $869.17, if the bond matures in 26 years, pays semiannual coupons, and the yield to maturity is 6%.
What is the present value of annuity factor?PVIFA is an abbreviation of the Present Value Interest Factor of Annuity. It is an idea based on the time value of money; the money you have now is worth more than the same amount of money a few years from now.
As per the given information:
[tex]\rm\,By \;the \; amount \;of \;coupon \;data \; provided \; = \dfrac{50}{2} = \$25[/tex]
Therefore, in order to calculate the selling price of a bond we will need to do the following calculations:
[tex]\rm\,Bond \; sale \;price = 25 \times PVIFA (3\%, 52) + 1,000 \times PVIF (3\%, 52)\\\\Bond sale price = 25 \times 26.1662 + 1,000 \times 0.2150\\\\ Bond sale price = \$869.17[/tex]
Hence, the bond will sell for $869.17
To learn more about present value of annuity factor, refer:
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Ethan Manufacturing Inc. produces floor mats for automobiles. The owner, Joseph Ethan, has asked you to assist in estimating maintenance costs. Together, you and Joseph determine that the single best cost driver for maintenance costs is machine hours. These data are from the previous fiscal year for maintenance costs and machine hours: Month Maintenance Costs Machine Hours 1 $ 2,750 1,840 2 2,910 1,920 3 3,060 2,000 4 3,170 2,020 5 3,250 2,050 6 3,220 2,030 7 3,160 2,010 8 3,000 1,990 9 2,770 1,850 10 2,370 1,250 11 2,380 1,450 12 2,600 1,740 Required: 1. What is the cost equation for maintenance costs using the high-low method? 2. Calculate the mean absolute percentage error (MAPE) for the cost equation you developed in requirement 1.
Answer:
Month Maintenance Machine Equation MAPE
costs hours error (Abs.)
1 $2,750 1,840 $269 9.78%
2 $2,910 1,920 $197 6.77%
3 $3,060 2,000 $135 4.41%
4 $3,170 2,020 $47 1.48%
5 $3,250 2,050 0 0%
6 $3,220 2,030 $8 0.25%
7 $3,160 2,010 $46 1.46%
8 $3,000 1,990 $184 6.13%
9 $2,770 1,850 $260 9.39%
10 $2,370 1,250 0 0%
11 $2,380 1,450 $210 8.82%
12 $2,600 1,740 $309 11.88%
60.37%
variable cost per unit = (highest activity cost - lowest activity cost) / (highest activity units - lowest activity units) = ($3,250 - $2,370) / (2,050 - 1,250) = $880 / 800 units = $1.10 per unit
fixed cost = $3,250 – ($1.10 x 2,050) = $995
Cost model = $995 + $1.10X
2. Calculate the mean absolute percentage error (MAPE) for the cost equation you developed in requirement 1.
MAPE = 60.37% / 12 = 5.03%