Answer:
Strategic planning
Explanation:
Strategic planning is defined as the process by which a business outlines direction and strategy. It also involves decision on how the business will allocate it's resources to achieve its strategic goals.
Strategic plan involves formulation of mission, vision, and plan of action that will make the business achieve set goals.
In this scenario top management of Wisniewski Automobile Parts Inc. has decided that the company's objective for the next two years will be to expand the overall business internationally. This is the strategic plan of the business for the next two years
Adjusting factory overhead LO P4
The following information is available for Lock-Tite Company, which produces special-order security products and uses a job order costing system.
April 30 May 31
Inventories
Raw materials $ 43,000 $ 52,000
Work in process 10,200 21,300
Finished goods 63,000 35,600
Activities and information for May
Raw materials purchases (paid with cash) 210,000
Factory payroll (paid with cash) 345,000
Factory overhead Indirect materials 15,000
Indirect labor 80,000
Other overhead costs 120,000
Sales (received in cash) 1,400,000
Predetermined overhead rate based on direct labor cost 70 %
Determine whether there is over or underapplied overhead.Factory OverheadUnderapplied overhead
Answer:
26,500 Under applied
Explanation:
Lock-Tite Company
Actual Factory Overhead 215,000
Factory overhead Indirect materials 15,000
Indirect labor 80,000
Other overhead costs 120,000
Direct Labor = 345,000
Predetermined Overhead = 70% of $ 345,000= $ 241,500
Actual Overhead = $ 215,000
Difference = Predetermined Overhead - Actual Overhead
= 241,500- $ 215,000= 26,500 Under applied
We find the difference between actual overhead and applied overhead to find the underapplied ( overapplied overhead. If the actual overhead is less than applied overhead it is underapplied. But if the actual overhead is greater than applied overhead it is over applied.
Raw materials Opening $ 43,000
Add Materials Purchases 195000 ( 210,000 - 15000)
Less Raw materials Closing $ 52,000
Direct Materials Used 186,000
Direct Labor 345,000
FOH 215,000
Total Manufacturing Costs 746,000
Add Work in process Opening 10,200
Less Work in process Closing 21,300
Add Finished goods Opening 63,000
Less Finished goods Closing 35,600
Cost Of Goods Sold 762,300
March 6 Cash 2,500 Unearned Fees 2,500 What is the best explanation for this journal entry? a. Performed services for which cash is owed. b. Received cash for services performed. c. Paid cash in advance for services to be performed. d. Received cash for services to be performed in the future.
Answer:
d. Received cash for services to be performed in the future.
Explanation:
This form of biddings can easily be found in a double entry or a cash journal for credit received or cash for services been done or also services performed in the nearest future.
This is used in ledger management to balance and make cash entry and journals a great positive result in checks and balances.
It is also noted that the credit to the income statement for the service revenue gives rise to the net income. This generally increases accumulated money in the course of the business.
Apr. 20 Purchased $35,500 of merchandise on credit from Locust, terms n/30. May 19 Replaced the April 20 account payable to Locust with a 90-day, 8%, $35,000 note payable along with paying $500 in cash. July 8 Borrowed $63,000 cash from NBR Bank by signing a 120-day, 10%, $63,000 note payable. __?__ Paid the amount due on the note to Locust at the maturity date. __?__ Paid the amount due on the note to NBR Bank at the maturity date. Nov. 28 Borrowed $21,000 cash from Fargo Bank by signing a 60-day, 7%, $21,000 note payable. Dec. 31 Recorded an adjusting entry for accrued interest on the note to Fargo Bank.
Answer:
April 20
Dr Inventory 35,500
Cr Account payable 35,500
May 19
Dr account payable 35,500
Cr cash 500
Cr note payable 35,000
Juy 8
Dr Cash 63,000
Cr Note payable 63,000
Aug 17
Dr Note payable 35,000
Dr Interest expense 700
Cr Cash 35,700
Nov 5
Dr Note payable 63,000
Dr Interest expense 1,575
Cr Cash 64,575
Nov 28
Dr Cash 21,000
Cr Note payable 21,000
Dec 31
Dr Interest expense 135
Cr Interest payable 135
Jan 27
Dr Note payable 21,000
Dr Interest payable 135
Dr Interest payable 110
Cr Cash 21,245
Explanation:
Adjusting entry for accrued interest on the note to Fargo Bank.
April 20
Dr Inventory 35,500
Cr Account payable 35,500
May 19
Dr account payable 35,500
Cr cash 500
Cr note payable 35,000
Juy 8
Dr Cash 63,000
Cr Note payable 63,000
Aug 17
Dr Note payable 35,000
Dr Interest expense 700
(35,000×8%×90/360)
Cr Cash 35,700
Nov 5
Dr Note payable 63,000
Dr Interest expense 1,575
(63,000×10%×90/360)
Cr Cash 64,575
Nov 28
Dr Cash 21,000
Cr Note payable 21,000
Dec 31
Dr Interest expense 135
( 21,000×7%×33/360)
Cr Interest payable 135
Jan 27
Dr Note payable 21,000
Dr Interest payable 135
Dr Interest payable 110
(21,000×7×27/360)
Cr Cash 21,245
At September 30, the accounts of East Terrace Medical Center (ETMC) include the following:
Accounts Receivable $143,000
Allowance for Uncollectible Accounts (credit balance) 3,200
During October through December, ETMC completed the following selected transactions:
Dec. 28 Wrote off as uncollectible the $1,500 account receivable from Brown Co. and the $1,100 account receivable from Jacob Weiss.
Dec. 31 Recorded uncollectible-account expense based on the again of accounts receivable, which follows:
Age of Accounts
Accounts Receivable 1-30 Days 31-60 Days 61-90 Days Over 90 Days
$163,000 $100,000 $40,000 $ 14,000 $9,000
Estimated percent uncollectible 0.1% 1% 10% 30%
1. Record the transactions in the journal.
2. Open the Allowance for Uncollectible Accounts, and post entries affecting that account. Keep a running balance.
3. Show how East Terrace Medical Center should report accounts receivable on its balance sheet at December 31, 2007
You started a venture 2 years ago with $400,000 dollars and own 60% of the 500,000 shares issued. What is the pre and post money valuations under each deal offered: • Alpha Ventures offers $200,000 for 20% of the firm • Beta Ventures offers $400,000 for 600,000 new shares • Kappa Ventures offers $200,000 for 100,000 existing shares
Answer:
Alpha Venture :Post money $1,000,000
Alpha Venture :Post money $800,000
Beta Ventures Post money $400,000
Beta Venture Pre-money $800,000
Kappa Ventures Post money $200,000
Kappa Ventures Pre money $400,000
Explanation:
Calculation for Alpha Ventures Post money:
$200,000/20%=$ 1,000,000
Alpha Ventures Pre-money will be :
$1,000 000- $200,000
= $800,000
Calculation for Beta Ventures Post money
= $400,000
Beta Ventures Pre-money will be:
=$ 400,000+$400,000
=$800,000
Calculation of Kappa Ventures Post money:
= $200,000
Kappa venture Pre-money will be:
= $200,000+$200$000
= $400,000
The pre and post-money valuations under the three deal offerings are as follows:
Deals Investment Pre-money Post-money
Amount Valuation Valuation
Alpha Ventures $200,000 $800,000 $1,000,000 ($200,000/20%)
Beta Ventures $400,000 $552,381 $952,381 ($400,000/42%)
Kappa Ventures $200,000 $1,466,667 $1,666,667 ($200,000/12%)
Data and Calculations:
Dollars Number Percentage
of Shares Holding
Capital investment = $400,000 500,000 60%
Total capital $666,667 833,333 100%
Beta Ventures:
Total new shares = 1,433,333 (833,333 + 600,000)
Percentage holding = 42% (600,000/1,433,333 x 100)
Kappa Ventures:
Percentage holding = 12% (100,000/833,333 x 100)
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On January 1, 2020, Blue Co. purchased 24,000 shares (a 10% interest) in Elton John Corp. for $1,300,000. At the time, the book value and the fair value of John’s net assets were $14,100,000.
On July 1, 2021, Blue paid $2,920,000 for 48,000 additional shares of John common stock, which represented a 20% investment in John. As a result of this transaction, Blue owns 30% of John and can exercise significant influence over John’s operating and financial policies. (Any excess fair value is attributed to goodwill.)
John reported the following net income and declared and paid the following dividends.
Net Income
Dividend per Share
Year ended 12/31/20
$690,000 None
Six months ended 6/30/21
480,000 None
Six months ended 12/31/21
800,000 $1.55
Determine the ending balance that Blue Co. should report as its investment in John Corp. at the end of 2021.
Investment in Elton John Corp. $Enter the investment in Elton John Corp. in dollars
Answer:
$4,465,400
Explanation:
The investment in Elton in 2020 $1,300,000
share of 2020 net income(10%*$690,000) $69,000
ending balance of investment in 2020 $1,369,000
Share of net income 6/30/21 ($480,000*10%) $48,000
ending balance of investment 6/30/21 $1,417,000
Acquisition of investment 7/1/2021 $2,920,000
Total amount of investment $4,337,000
share of net income 12/31/2021($800,000*30%) $240,000
Dividends received(48,000+24,000)*$1.55 ($111,600)
balance of investment in Elton John Corp $4,465,400
In computing the above value,at each point in time the share of Blue Co from net income earned by Elton john corp is added while any dividends received in cash is deducted.
Concord Company, a machinery dealer, leased manufacturing equipment to Mays Corporation on January 1, 2017. The lease is for a 7-year period and requires equal annual payments of $26,143 at the beginning of each year. The first payment is received on January 1, 2017. Concord had purchased the machine during 2016 for $75,000. Collectibility of lease payments is reasonably predictable, and no important uncertainties surround the amount of costs yet to be incurred by Concord. Concord set the annual rental to ensure an 8% rate of return. The machine has an economic life of 8 years with no residual value and reverts to Concord at the termination of the lease.
Compute the amount of the lease receivable.
Answer:
$ 146,998.94
Explanation:
The applicable formula in this case is the present of annuity due.The amount of annual lease rental needs to be stated to present value equivalence by discounting all future cash flows of lease rentals to today's equivalent worth.
PV=PMT*(1/i-1/i(1+i)^n)*(1+i)
i is the rate of return of 8% OR 0.08
n is the number of years which is 7
PMT is the yearly lease rental of $26143
PV=26143*(1/0.08-1/0.08(1+0.08)^7)*(1+0.08)
PV=26143*(1/0.08-1/0.137106)*(1+0.08)
PV=26143*(12.5-7.293629941 )*(1.08)
PV=26143*5.206370059 *1.08
PV= 146,998.94
Assume that the custodian of a $450 petty cash fund has $62.50 in coins and currency plus $382.50 in receipts at the end of the month. The entry to replenish the petty cash fund will include:
Answer:
All receipts for petty cash A/c Dr. $382.50
Cash over and short A/c Dr. $5
To Cash A/c $387,50
(Being the replenish the petty cash fund is recorded)
Explanation:
According to the scenario, computation of the given data are as follow:-
We can calculate the total receipts and coins by using following formula:-
Total Receipts and Coin = Coins in Cash Fund + Currency Plus in Receipts = $62.50 + $382.50
= $445
Shortage of Petty Cash Account is
= Total Receipts and Coin - assume Custodian of a Petty Cash
= $445 - $450
= - $5
Journal Entry:-
All receipts for petty cash A/c Dr. $382.50
Cash over and short A/c Dr. $5
To Cash A/c $387,50
(Being the replenish the petty cash fund is recorded)
For recording this we debited the petty cash receipts as it increased the assets and credited the cash as it decreased the assets and the balancing is transferred to cash short and over
On January 1, Year 1, Brown Co. borrowed cash from First Bank by issuing a $65,000 face value, four-year term note that had an 8 percent annual interest rate. The note is to be repaid by making annual cash payments of $19,625 that include both interest and principal on December 31 of each year. Brown used the proceeds from the loan to purchase land that generated rental revenues of $31,200 cash per year.
Prepare an amortization schedule for the four-year period.
-------------------------------------------------------------------------------------'
year principal balance jan 1 cash payments dec 31 applied to interest applied to principal principal balance end of period
1
2
3
4
5
Answer:
Find attached schedule.
Explanation:
The bond amortization schedule is hereby attached,the balance of $1 left after 4 years is due to rounding error,since the loan is meant to have been paid in its entirety,hence zero balance should be left.
The repayment of $19,625 is usually divided into two the interest which is the 8% of the loan beginning while the balance after having deducted interest is used to reduce the principal.
Tandy Company was issued a charter by the state of Indiana on January 15 of this year. The charter authorized the following: Common stock, $5 par value, 116,000 shares authorized Preferred stock, 15 percent, par value $15 per share, 5,200 shares authorized During the year, the following transactions took place in the order presented: Sold and issued 20,600 shares of common stock at $30 cash per share. Sold and issued 2,000 shares of preferred stock at $34 cash per share. At the end of the year, the accounts showed net income of $41,200. No dividends were declared.
Required: 1. Prepare the stockholders' equity section of the balance sheet at the end of the year.
Answer:
Equity section of the balance sheet at the end of the year
Authorized Share Capital
116,000 Common stock, $5 par value. 580,000
5,200 Preferred stock, 15 percent, par value $15 per share, 78,000
658,000
Issued Share Capital
Common stock
20,600 Common stock, $5 par value 103,000
Share Premium (20,600×$25) 515,000
Total 618,000
Preferred stock
2,000 Preferred stock, 15 percent, par value $15 per share 30,000
Share Premium (2,000×$19) 38,000
Total 68,000
Retained Earnings
Profit for the year 41,200
Total Equity 727,200
Explanation:
Price issued above the par value of a share is called share premium and is included in equity for each class of stock.
Profit for the year is also included in Equity as Part of the Retained Earnings.
Bramble's Bakery makes a variety of home-style cookies for upscale restaurants in the Atlanta metropolitan area. The company's best-selling cookie is the double chocolate almond supreme. Bramble's recipe requires 10 ounces of a commercial cookie mix, 5 ounces of milk chocolate, and 1 ounce of almonds per pound of cookies. The standard direct materials costs are $0.80 per pound of cookie mix, $6 per pound of milk chocolate, and $18 per pound of almonds. Each pound of cookies requires 1 minute of direct labor in the mixing department and 7 minutes of direct labor in the baking department. The standard labor rates in those departments are $12.70 per direct labor hour (DLH) and $19 per DLH, respectively. Variable overhead is applied at a rate of $35.80 per DLH; fixed overhead is applied at a rate of $60 per DLH.
Calculate the standard cost for a pound of Bramble's Bakery double chocolate almond supreme cookies.
Answer:
$15.51 per Double chocolate almond supreme
Explanation:
Calculate the standard cost for a pound of Mama Fran's double chocolate almond supreme cookies.
1. Standard Material Cost (Ratio Denominator = 10 + 5 + 1 = 16)
Std. Mat Cost = 10 Ounces /16 * $0.80 + 5 Ounces /16* $6 + 1/16* $18
Standard Material Cost = $3.5 per Double chocolate almond supreme
2. Standard Direct Labor Cost
Std. Labor Cost = 1 /60 Hours * $12.7 per Hour + 7/60 Hour * $19 per Hour
Std. Labor Cost = $2.4283 per Double chocolate almond supreme
3. Standard Variable Overhead Cost
Std. Variable OH. Cost = 6/60 Hours * $35.8
Standard Variable overhead cost = $3.58 per Double chocolate almond supreme
4. Standard Fixed Overhead Cost
Std. Fixed Overhead per cake = 6/60 Hours * $60 per Hour
Standard Fixed overhead cost = $6 per Double chocolate almond supreme
Now Standard cost for a pound is calculated as under:
Standard cost for a pound = 2.9375 + 2.4617 + 3.70 + 6
Standard cost for a pound = $15.51 per Double chocolate almond supreme
Pharoah Corporation purchased 29000 shares of common stock of the Sherman Corporation for $44 per share on January 2, 2020. Sherman Corporation had 100000 shares of common stock outstanding during 2021, paid cash dividends of $154000 during 2021, and reported net income of $540000 for 2021. Pharoah Corporation should report revenue from investment for 2021 in the amount of _______.
Answer:
$201,260
Explanation:
Total number of shares purchased for Sherman corporation is 29,000 at the rate of $44 each
Outstanding number of shares for Sherman corporation is 100,000
Therefore, the amount of investment is calculated by dividing the total number of shares by the outstanding number of shares
= 29,000/100,000
=0.29 × 100
= 29%
Amount of dividend in Sherman corporation is $154,000
Net income of Sherman corporation is $540,000
The total revenue generated by Pharoah corporation is
= 29/100 × ($154,000+$540,000)
= 0.29 × 694000
= $201,260
Thus,Pharaoh Corporation should report revenue from investment for 2021 in the amount of $201,260
Answer:
Pharoah Corporation should report revenue from investment for 2021 in the amount of $156,600
Explanation:
In order to calculate the amount Pharoah Corporation should report revenue from investment for 2021 we would have to use the following formula:
Pharoah Corporation's revenue from investment =reported net income*Pharoah Corporation's share in Sherman
Pharoah Corporation's share in Sherman = 29,000 / 100,000 = 29%
Therefore, Pharoah Corporation's revenue from investment =$540,000 * 29%
Pharoah Corporation's revenue from investment = $156,600
Pharoah Corporation should report revenue from investment for 2021 in the amount of $156,600
Concern about terrorists using biological warfare has caused the U.S. government to create stockpiles of specific drugs. The federal government has purchased Cipro, the only drug specifically approved by the FDA to treat inhaled anthrax, from Bayer, the German drug and chemical company. The U.S. government has also purchased smallpox vaccine from Acambis, a British drug company. These transactions are examples of: Group of answer choices market elasticity principles. the circular flow of products. organizational clusters. reciprocity. global organizational markets.
Answer: Global organizational markets.
Explanation:
In Organizational markets, the main participants are huge trading Institutions such as Governments or large Corporations. In Organizational markets, the participants may be few but the transactions can have a lot of Quantity i.e a government can buy a huge order from one company.
The goods sold here can be highly specialized and made for few buyers and so is not for personal Consumption.
The US buying a drug for anthrax which is a rare disease but can be weaponized shows that this is a specific purchase therefore it is more likely to be a purchase on the Global Organizational Market.
You are currently deciding whether to invest in data loss prevention software. You have some reliable statistics that the software will reduce your information theft incidents by half of the current values. The cost of the software is $100K per year. Recalculate the new ARO and ALE for hacker and employee information theft. Based on these new values, explain your decision whether or not to invest in the Data Loss Prevention Software.
Answer:no
Explanation:
Karim Corp. requires a minimum $8,000 cash balance. Loans taken to meet this requirement cost 1% interest per month (paid monthly). Any excess cash is used to repay loans at month-end. The cash balance on July 1 is $8,400, and the company has no outstanding loans. Forecasted cash receipts (other than for loans received) and forecasted cash payments (other than for loan or interest payments) follow. July August September Cash receipts$20,000 $26,000 $40,000 Cash payments 28,000 30,000 22,000
Answer:
a. Ending Cash balances:
July = $8,000
August = $8,000
September = $14,207
b. Ending Loan balances:
July = $7,600
August = $11,676
September = $0
Explanation:
Find attached the excel file for the full cash budget for July, August and September.
Magic City Enterprises manufactures a beautiful bookcase. Listed below are a number of costs incurred. Identify each cost as either fixed or variable; product or period. If the cost is a product cost, then state whether it would be considered a direct or indirect cost.
1. Factory Rent
2. Advertising
3. Packing Supplies for Shipping
4. Factory Security Guard
5. Wages of Employees Who Sand the wood
6. Administrative Assistant in Corporate office
7. Paper Towels in the Men's Room in the Factory
8. Executive Jet
9. Lumber
10. Depreciation on Factory Tools (Straight-Line)
Answer:
1. Factory Rent = Fixed , Product (Indirect Cost)
2. Advertising = Fixed , Period
3. Packing Supplies for Shipping = Variable, Period
4. Factory Security Guard = Fixed, Product (Indirect Cost)
5. Wages of Employees Who Sand the wood = Variable, Product (Direct Cost)
6. Administrative Assistant in Corporate office = Fixed , Period
7. Paper Towels in the Men's Room in the Factory = Fixed , Product (Indirect Cost)
8. Executive Jet = Fixed, Period
9. Lumber = Variable, Product (Direct Cost)
10. Depreciation on Factory Tools (Straight-Line) = Fixed, Product (Indirect Cost)
Explanation:
Product versus Period Cost.
A product cost is attached to the cost object and is included in the valuation of the cost object.All manufacturing costs are product costs.
Period costs are not attached to the products. Non-manufacturing costs are Period costs.
Fixed versus Variable.
Behavior of costs in relationship with Activity will tell us whether a cost is a Fixed cost or Variable Cost.
Fixed Costs remain the same for any level of activity, whilst variable costs vary in direct proportion to with the level of activity.
Direct versus Indirect.
By observation of the cost object, we are able to identify is a cost is a direct cost or indirect cost.
Direct costs can be easily traced on the cost object. Indirect costs are difficult to trace on the cost object.
Assume Nortel Networks contracted to provide a customer with Internet infrastructure for $2,100,000. The project began in 2021 and was completed in 2022. Data relating to the contract are summarized below: 2021 2022Costs incurred during the year $ 308,000 $ 1,615,000 Estimated costs to complete as of 12/311, 232,000 0 Billings during the year 390,000 1,640,000 Cash collections during the year 270,000 1,760,000 Required:1. Compute the amount of revenue and gross profit or loss to be recognized in 2021 and 2022 assuming Nortel recognizes revenue over time according to percentage of completion.2. Compute the amount of revenue and gross profit or loss to be recognized in 2021 and 2022 assuming this project does not qualify for revenue recognition over time.3. Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of 2021 assuming Nortel recognizes revenue over time according to percentage of completion.4. Prepare a partial balance sheet to show how the information related to this contract would be presented at the end of 2021 assuming this project does not qualify for revenue recognition over time.Compute the amount of revenue and gross profit or loss to be recognized in 2021 and 2022 assuming Nortel recognizes revenue over time according to percentage of completion. (Loss amounts should be indicated with a minus sign. Use percentages as calculated and rounded in the table below to arrive at your final answer.)
Answer:
2021
revenues 420,000
gross profit 112,000
2022
revenues 1,680,000
gross profit 65,000
Explanation:
2021:
Cost incurred 308,000
Estimed to complete 1,232,000
Total cost 1,540,000
Percentage of completion 308,000 / 1,540,000 = 20%
Revenue will be recongize for 20% of the total
2,100,000 x 20% = 420,000
Less Cost (308,000)
Gross Profit 112,000
For 2022 we recognize the rest as the project is completed
2,100,000 - 420,000 = 1,680,000
Incurred Cost (1,615,000)
Gross Profit 65,000
The Gross Profit will is 65,000. A company's gross profit is calculated by deducting its entire sales from its total cost of products sold. All products sold by the business are included in the overall sales.
What does "gross profit" actually mean?Gross income is the total of all incomes, salaries, profits, interest payments, rents, and other kinds of income for families and people before any deductions or taxes. It differs from net income, which is calculated as gross income less any applicable taxes and other deductions.The cost of products sold is subtracted from revenue to calculate gross profit, also known as gross income. In general, fixed costs are not taken into account when calculating gross profit; only variable costs are.For example:
In 2022
revenues 1,680,000
gross profit 65,000
Explanation:
2021:
Cost incurred 308,000
Estimed to complete 1,232,000
Total cost 1,540,000
Percentage of completion 308,000 / 1,540,000 = 20%
Revenue will be recongize for 20% of the total
2,100,000 x 20% = 420,000
Less Cost (308,000)
Gross Profit 112,000
For 2022 we recognize the rest as the project is completed
2,100,000 - 420,000 = 1,680,000
Incurred Cost (1,615,000)
Gross Profit 65,000
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Ben and Carla Covington plan to buy a condominium. They will obtain a $221,000, 30-year mortgage at 5.0 percent. Their annual property taxes are expected to be $1,850. Property insurance is $490 a year, and the condo association fee is $225 a month. Based on these items, determine the total monthly housing payment for the Covingtons. Use Exhibit 7-7. (Round your intermediate calculations and final answer to 2 decimal places.)
Answer:
$1,551
Explanation:
Ben and Carla Covington
(Monthly)
Mortgage payment $1,105
(5% ×221)
Property taxes $155
( $1,850/12)
Property insurance 41
($490/12 )
Association fee $250
Covingtons total monthly housing payment $1,551
On January 1, Year 1, the Timble Corporation (Timble) leases a piece of typical equipment to use for eight years. The equipment has an expected life of ten years and no anticipated salvage value. Timble has an incremental borrowing rate of 5%. Annual payments for this asset are $9,000 with the first payment to be made immediately. At the end of the eight years, Timble has the right to buy the asset for $10,000 in cash. This amount is expected to be significantly below the expected fair value of the equipment on that date so it is reasonable to expect Timble to pay this amount. Timble records depreciation based on the straight-line method and interest based on the effective rate method. The present value of an annuity due of $1 at 5% for eight years is assumed to be 6.80. The present value of an ordinary annuity of $1 at 5% for eight years is assumed to be 6.50. The present value of a single amount of $1 at 5% in eight years is assumed to be 0.66. What amount of depreciation expense should Timble record for Year 1
Answer: $6780
Explanation:
Asset recorded in books of timble will be:
= (PVAF at 5%, 8 × Annual CF) + (PVAF at 5%,8 × salvage)
where CF = cash flow
PVAF = present value of annuity factor
= (6.80 × 9000 ) +(0.66 × 10000)
= 61200+ 6600
= $ 67800
Since the equipment has an expected life of ten years with no anticipated salvage value, then the depreciation will be:
Depreciation = 67800 ÷ 10
= $ 6780
Module 2 Assignment By using 2-dimension graphs (in MS WORD) for PRICE and QUANTITY, demonstrate the effect that each of the following will have on the demand for gasoline in a competitive market? State what happens to demand. Explain your reasoning in each case and relate it to a demand determinant. If you are not able to use MS-WORD, just draw on a piece of paper, take a picture, and submit it as a PDF file. If you cannot use MS Word tools, just use your pen and paper and upload images or screenshots. (a) an increase in the number of cars (25 points) (b) the economy moves into a recession (25 points) (c) an increase in the price of car insurance, taxes, maintenance (25 points) (d) consumer expectations of substantial price increases in gasoline (25 points) Total == 100 points.
Answer: The answer is provided below
Explanation:
a. An increase in the number of cars will lead to an increase in demand as more people will demand for gasoline. This will lead to a rightward shift of the demand curve from D1 to D2. The increase in demand will also lead to the rise in price of gasoline from P1 to P2.
b. When the economy moves into a recession, people will purchase less cars because of the recession, as the income level of the consumers will have fallen. Due to the decrease in the number of cars, the demand for gasoline also reduces. This is denoted by the leftward shift in the demand curve in the attached diagram from D1 to D2.
c. The increase in the price of car insurance, taxes, maintenance will also lead to a reduction in the demand for cars which will in turn, reduce the demand for gasoline. Thereby the demand curve shifts from from D1 to D2 leftward.
d. The expectations of substantial increase in the price of gasoline, will lead to a higher demand for gasoline in the present period because due to the expectation of a higher price, the consumers will go and buy more gasoline and keep for future use. As the demand for gasoline rises, this will lead to the demand curve for gasoline to shift rightward and also the price will increase from P1 to P2.
The diagram has also been attached.
Additional Information: Net income for 2020 was $26,890. Land was sold for cash at a loss of $2,000. Cash dividends were paid during the year. Equipment was purchased for cash. In addition, equipment costing $40,000 with a book value of $13,000 was sold for $14,000 cash. What is the cash flow from operating activities? Group of answer choices $85,290 $86,290 $108,290 $84,290
Answer:
The question is wrong ,find attached correct question:
The correct option in the attached is $58290 ,option E,which is missing in the original question
Explanation:
Cash flow from operating activities=net income+depreciation charge-increase in accounts receivable+decrease in inventory+decrease in prepaid expenses-decrease in accounts payable+loss on sale of land-gain on sale of equipment
cash flow from operating activities=$26,890+($135,000-$92,000)-($77,000-$64,000)+($140,000-$132,000)+($16,540-$12,140)-($45,000-$33,000)+$2000-$1000=$58290
On January 1, 2013, US Manufacturing purchased a machine for $ 830,000. The company expected the machine to remain useful for ten years and to have a residual value of $ 60,000. US Manufacturing uses the straight-line method to depreciate its machinery. US Manufacturing used the machine for six years and sold it on January 1, 2018, for $ 300,000.1. Compute accumulated depreciation on machine on January 1, 2018.2. Record the sale of the machinery on January 1,2018.
Answer and Explanation:
The computation and the journal entry is shown below:
1. For accumulated depreciation, first we have to find out the depreciation expense using the straight line method
= (Original cost - salvage value) ÷ (Useful life)
= ($830,000 - $60,000) ÷ (10 years)
= $77,000
Now the accumulated depreciation for 5 years is
= $77,000 × 5 years
= $385,000
2. Now the journal entry is
Cash $300,000
Loss on sale or disposal $145,000
Accumulated Depreciation - Machine equipment $385,000
To Machine equipment $830,000
(Being the sale of the machinery is recorded)
For recording this we debited the cash, loss and accumulated depreciation as it increased the assets, losses, and the accumulated depreciation balance and credited the machine equipment as it decreased the assets
Partial adjusted trial balance for Bramble Corp. at December 31, 2017, includes the following accounts:
Retained Earnings $17,700, Dividends $5,600, Service Revenue $38,800, Salaries and Wages Expense $13,700, Insurance Expense $1,850, Rent Expense $3,840, Supplies Expense $1,530, and Depreciation Expense $1,000. The balance in Retained Earnings is the balance as of January 1. Prepare a retained earnings statement for the year assuming net income is $15,787.
Answer:
Retained earnings statement for year ended December 31, 2017
Opening Retained Earnings Balance $17,700
Add Net Income $15,787
Less Dividends ($5,600)
Closing Retained Earnings Balance $27,887
Explanation:
Retained earnings statement shows the Income that is attributable to Common Stock Holders.
Its is prepared by adjusting the Opening Retained Earnings balance with the Income and Dividends declared during the period.
Tara Westmont, the stockholder of Tiptoe Shoes, Inc., had annual revenues of $185,000, expenses of $103,700, The company paid $18,000 cash in dividends to the owner (sole stockholder). The retained earnings account before closing had a balance of $297,000. The entry to close the Income Summary account at the end of the year, after revenue and expense accounts have been closed, is:
Answer:
The entry to close the Income Summary account at the end of the year, after revenue and expense accounts have been closed is:
Debit Income Summary Account $63,300
Credit Retained Earnings $63,300
To close the income summary account.
Explanation:
a) Closing entries are made to close the temporary (Income Summary) accounts so that only the permanent (balance sheet) accounts remain. Temporary accounts are period accounts whose balances are taken to the income summary account. They are not carried over to the next accounting period, except the net financial performance result, known as the net income, which adjusts the Retained Earnings.
On October 10, the stockholders’ equity of Sherman Systems appears as follows.
Common stock–$10 par value, 90,000 shares authorized, issued, and outstanding $ 900,000
Paid-in capital in excess of par value, common stock 306,000
Retained earnings 1,008,000
Total stockholders’ equity $ 2,214,000
1.
Prepare journal entries to record the following transactions for Sherman Systems.
a.
Purchased 6,800 shares of its own common stock at $43 per share on October 11.
b. Sold 1,450 treasury shares on November 1 for $49 cash per share.
c. Sold all remaining treasury shares on November 25 for $38 cash per share.
1.Record the purchase of 6,800 shares of its own common stock for $43 cash per share.
2.Record the reissue of 1,450 shares of the treasury stock for $49 cash per share.
3.Record the reissue of the remaining shares of the treasury stock for $38 cash per share.
2.
Prepare the revised equity section of its balance sheet after the October 11 treasury stock purchase.
Answer:
Sherman Systems
1. Journal Entries
Debit Credit
a) October 11:
Treasury Stock $68,000
Additional Paid-in Capital $224,400
Cash $292,400
To record purchase of 6,800 shares at $43 per share.
b) November 1:
Cash $71,050
Treasury Stock $14,500
Additional Paid-in Capital $56,550
To record sale of 1,450 treasury shares at $49 per share.
c) November 25:
Cash $203,300
Treasury Stock $53,500
Additional Paid-in Capital $149,800
To record sale of 5,350 treasury shares at $38 per share.
2. Revised Equity Section of Sherman Systems' Balance Sheet as at October 11:
Common stock at“$10 par value,
90,000 shares authorized, issued, and outstanding $ 900,000
Paid-in capital in excess of par value, common stock 81,600
Treasury Stock (68,000)
Retained earnings 1,008,000
Total stockholders' equity $1,921,600
Explanation:
1. Additional Paid-in Capital:
Balance on October 10 $306,000
Treasury Stock ($224,400)
Balance on October 11 $81,600
2. Treasury Stock is a contra account to Common Stock. It represents the purchase of its own shares by a company. There are two methods for accounting for treasury stock. One is the par value method, where the adjustments for above or below par value are made in the Additional Paid-in Capital account. The other method is the costing method, where the adjustments for above or below par value are made in the Treasury stock.
3. The equity section prepared above is limited to the October 11 transaction. The transactions occurring on November 1 and 25 were not required by the question.
4. The remaining shares of the treasury stock reissued on November 25 is equal to 6,800 - 1,450 = 5,350 shares.
Assume that demand for a commodity is represented by the equation P=10−0.2Qd. Supply is represented by the equation P=2+0.2Qs, where Qd and Qs are quantity demanded and quantity supplied, respectively, and P is price. Instructions: Enter your answers as whole numbers.
Required:
a. Using the equilibrium condition Qs = Qd, determine equilibrium price.
b. Determine equilibrium quantity.
c. Graph the two equations to substantiate your answers and label these two graphs as D1 and S1.
Answer:
Equilibrium price=6
Equilibrium quantity=20
Explanation:
P=10-0.2Qd
P-10= -0.2Qd
Qd=p-10/-0.2
Qd=-5p+50
P=2+0.2Qs
P-2=0.2Qs
Qs=p-2/0.2
Qs=5p-10
(a)
Qs=Qd
5p-10= -5p+50
5p-10+5p-50=0
10p-60=0
10p=60
p=6
Equilibrium price=6
Equilibrium quantity
Qd=-5p+50
=-5(6)+50
=-30+50
=20
Qs=5p-10
=5(6)-10
=30-10
=20
Equilibrium quantity=20
(c) Graph has been attached showing the equilibrium price and quantity
Assume the spot rate on the Canadian dollar is C$1.1847. The risk-free nominal rate in the U.S. is 5 percent while it is only 4 percent in Canada. What one-year forward rate will create interest rate parity?
Answer:
C$1.1734
Explanation:
Interest rate parity refers to the relationship between interest rates and the value of currencies. In order to achieve interest rate parity, the hedged returns from investing in Canadian or US dollars should be the same in one year.
Forward rate / spot rate = (1 + risk free rate Canada) / (1 + risk free rate US)
Forward rate / C$1.1847 = 1.04 / 1.05 = 0.9905
Forward rate = 0.9905 x C$1.1847 = C$1.1734
Model, Inc., produces model automobiles made from metal. It operates two production departments, Molding and Painting, and has three service departments, Administration, Accounting, and Maintenance. The accumulated costs in the three service departments were $269,000, $402,000, and $199,000, respectively. Management is concerned that the costs of its service departments are getting too high. In particular, managers would like to keep the costs of service departments under $3.50 per unit on average. You have been asked to allocate service department costs to the two production departments and compute the unit costs.
The company decided that Administration costs should be allocated on the basis of square footage used by each production and service department. Accounting costs are allocated on the basis of number of employees. Maintenance costs are allocated on the basis of the dollar value of the equipment in each department. The use of each base by all departments during the current period follows:
Used by
Allocation Base Administration Accounting Maintenance Molding Painting
Building area 12,000 63,000 69,300 441,000 56,700
Employees 44 14 22 66 88
Equipment value $ 177.00 $ 236.00 $ 17.50 $ 118.00 $ 59.00
(in thousands)
Direct costs of the Molding Department included $242,500 in direct materials, $327,500 in direct labor, and $105,000 in overhead. The Painting Department’s direct costs consisted of $211,000 in direct materials, $219,000 in direct labor, and $82,500 in overhead.
Required:
Using the step method, determine the allocated costs and the total costs in each of the two producing departments. Ignore self-usage (for example, ignore work done by Administration for itself). Rank order the allocation as follows: (1) Maintenance, (2) Accounting, and (3) Administration
Answer:
Total Service Costs Molding :350031.22 Painting: 205081. 46
Explanation:
Given Data
Model, Inc.
Service
Administration, Accounting, Maintenance
Costs $269,000, $402,000, $199,000,
Building area 12,000 63,000 69,300
Employees 44 14 22
Equipment value
(in thousands) $ 177.00 $ 236.00 $ 17.50
Production
Molding Painting
Costs
Direct Materials $242,500 $211,000
Direct Labor $327,500 $219,000
Overheads $105,000 $82,500
Building area 441,000 56,700
Employees 66 88
Equipment value
(in thousands) $ 118.00 $ 59.00
First we find the activity rates for each cost using total cost driver except self usage
1) Maintenance $ 199,000
Equipment Value= 177 + 236+ 118+ 59= 590 ( in thousands) ( all but maintenance itself )
Maintenance per equipment = 199,000/590,000= 0.3373 per equipment
2) Accounting,= $402,000,
Employees=44 + 22 + 66 + 88 = 220
Accounting per Employee= $402,000,/220= 1827.27 per Employee
3) Administration= $269,000
Building area =63,000 +69,300 +441,000+ 56,700= 630,000
Administration per square footage= 269,000/ 630,000= 0.4269= 0.43 per square
Then we multiply the rates to find the service costs allocated.
Production
Molding Painting
Costs
Direct Materials $242,500 $211,000
Direct Labor $327,500 $219,000
Overheads $105,000 $82,500
Service Cost Allocated
Building area 0.43*441,000 0.43* 56,700
= 189630 =24381
Employees 66* 1827.27 88 *1827.27
= 120599.82 = 160799.76
Equipment value
(in thousands) $ 118.00* 0.3373 $ 59.00 *0.3373
= 39801.4 = 19900.7
Total Service Costs 350031.22 205081. 46
Total Costs 1025031.22 717581. 46
A drawback of short-term contracting as an alternative to making a component in-house is that:_______.
a. it is the most-integrated alternative to performing an activity so the principal company has no control over the agent.
b. the buying firm cannot demand lower prices due to the lack of a competitive bidding process.
c. it fails to allow a long planning period that individual market transactions provide.
d. the supplying firm has no incentive to make any transaction-specific investments to increase performance or quality.
Answer:
D. the supplying firm has no incentive to make any transaction-specific investments to increase performance or quality.
Explanation:
A drawback of short-term contracting as an alternative to making a component in-house is that the supplying firm has no incentive to make any transaction-specific investments to increase performance or quality.
Fredrick works for Vision, a billboard advertising agency, which hires billboards from owners on behalf of clients. Fredrick routinely accepts pay- offs from billboard owners in exchange for referring their billboards to clients. This behaviour could result in his dismissal from Vision, if found out. Which statement is Fredrick most probably utilizing to rationalize his actions?
a. "It's not really illegal."
b. "It's in everyone's best interests."
c. "No one will ever know about it."
d. "The organization will stand behind me."
e. "I cannot be held responsible."
Answer:
B. It is in everyone's best interests
Explanation:
Fredrick works for Vision, a billboard advertising agency. This agency specializes in hiring billboards from owners on behalf of clients. Simply put, Vision, an advertising agency, matches the need of its clients with the provision of billboards obtained from owners of such.
Fredrick works for the firm, and the implication is that, he's an agent of the agency firm, and the advertising firm is the Principal. The action of Fredrick routinely accepting pay-offs from the billboards owners contravenes this arrangement. Fredrick is thus acting parallel in line with his Principal.
It is thus worthy of note that Fredrick could only rationalize this action because he believes he is servicing the needs of the advertising agency and also the billboards owners. In his wisdom, everyone's objective is being made, bar the moral implications and obligations.
So, among the options enlisted, option B is the plausible answer.