Answer:
Effect on income= $60,000 decrease
Explanation:
Giving the following information:
Current contribution margin= 15,000*(20 - 14)
Current contribution margin= $90,000
The study shows that $70,000 of the $100,000 in fixed expenses charged to Product X1 would remain even if the product was discontinued.
To calculate the effect on income, we need to use the following formula:
Effect on income= avoidable fixed costs - total contribution margin
Effect on income= 30,000 - 90,000
Effect on income= $60,000 decrease
Apr. 2 Purchased $3,100 of merchandise from Lyon Company with credit terms of 2/15, n/60, invoice dated April 2, and FOB shipping point.
3 Paid $390 cash for shipping charges on the April 2 purchase.
4 Returned to Lyon Company unacceptable merchandise that had an invoice price of $750.
17 Sent a check to Lyon Company for the April 2 purchase, net of the discount and the returned merchandise.
18 Purchased $5,500 of merchandise from Frist Corp. with credit terms of 1/10, n/30, invoice dated April 18, and FOB destination.
21 After negotiations, received from Frist a $500 allowance toward the $5,500 owed on the April 18 purchase.
28 Sent check to Frist paying for the April 18 purchase, net of the allowance and the discount.
Required:
Prepare journal entries to record the above transactions for a retail store. Assume a perpetual inventory system.
Answer:
1. Apr 02
Dr Merchandise inventory $3,100
Cr Accounts payable-Lyon $3,100
2 Apr 03
Dr Merchandise inventory $390
Cr Cash $390
3 Apr 04
Dr Account payable-Lyon $750
Cr Merchandise inventory $750
4 Apr 17
Dr Account payable-Lyon $2,350
Cr Cash $2,303
Cr Merchandise inventory $47
5 Apr 18
Dr Merchandise inventory $5,500
Cr Account payable-Frist Corp $5,500
6 Apr 21
Dr Account payable-Frist Corp $500
Cr Merchandise inventory $500
7 Apr 28
Dr Account payable-Frist Corp $ 5000
Cr Cash $4,950
Cr Merchandise inventory $50
Explanation:
Preparation of the journal entries to record the above transactions for a retail store. Assume a perpetual inventory system.
1. Apr 02
Dr Merchandise inventory $3,100
Cr Accounts payable-Lyon $3,100
2 Apr 03
Dr Merchandise inventory $390
Cr Cash $390
3 Apr 04
Dr Account payable-Lyon $750
Cr Merchandise inventory $750
4 Apr 17
Dr Account payable-Lyon ($3100-$750) $2,350
Cr Cash ($2350*98%) $2,303
Cr Merchandise inventory $47
($2,350-$2,303)
5 Apr 18
Dr Merchandise inventory $5,500
Cr Account payable-Frist Corp $5,500
6 Apr 21
Dr Account payable-Frist Corp $500
Cr Merchandise inventory $500
7 Apr 28
Dr Account payable-Frist Corp ($5500-$500) $5000
Cr Cash (5000*99%) $4950
Cr Merchandise inventory $50
($5000-$4950)
Ayala Architects incorporated as licensed architects on April 1, 2017. During tne first month of the operation of the business, these events and transactions occurred:
Apr. 1 Stockholders invested $18,000 cash in exchange for common stock of the corporation.
Hired a secretary-receptionist at a salary of $375 per week, payable monthly.
2 Paid office rent for the month $900.
3 Purchased architectural supplies on account from Burmingham Company $1, 300.
10 Completed blueprints on a carport and billed client $1, 900 for services.
11 Received $700 cash advance from M. Jason to design a new home.
20 Received $2, 800 cash for services completed and delivered to S. Melvin.
30 Paid secretary-receptionist for the month $ 1, 500.
30 Paid $300 to Burmingham Company for accounts payable due.
The company uses these accounts: Cash, Accounts Receivable, Supplies, Accounts Payable, Unearned Service Revenue, Common Stock, Service Revenue, Salaries and Wages Expense, and Rent Expense.
Instructions:
(a) Journalize the transactions, including explanations
(b) Post to the ledger T-accounts.
(c) Prepare a trial balance on April 30, 2017.
Answer:
Ayala Architects
a) Journal Entries:
Apr. 1: Debit Cash $18,000
Credit Common Stock $18,000
To record the issuance of common shares for cash.
Apr. 2: Debit Rent Expense $900
Credit Cash $900
To record the payment of rent for the month.
Apr. 3: Debit Supplies $1,300
Credit Accounts payable (Burmingham Company) $1,300
To record the purchase of supplies on account.
Apr. 10: Debit Accounts receivable $1,900
Credit Service Revenue $1,900
To record the sale of services on account.
Apr. 11: Debit Cash $700
Credit Unearned Service Revenue $700
To record receipt of cash in advance for services.
Apr. 20: Debit Cash $2,800
Credit Service Revenue $2,800
To record the receipt of cash for services rendered.
Apr. 30: Debit Salaries and Wages Expense $1,500
Credit Cash $1,500
To record payment of salaries for the month. ($375 * 4 weeks)
Apr. 30: Debit Accounts payable (Burmingham Company) $300
Credit Cash $300
To record payment on account.
b) T-accounts
Cash
Account Titles Debit Credit
Common stock $18,000
Rent $900
Unearned revenue 700
Service revenue 2,800
Salaries and wages 1,500
Accounts payable 300
Balance 18,800
Accounts Receivable
Account Titles Debit Credit
Service Revenue $1,900
Supplies
Account Titles Debit Credit
Accounts payable $1,300
Accounts Payable
Account Titles Debit Credit
Supplies $1,300
Cash $300
Balance 1,000
Unearned Service Revenue
Account Titles Debit Credit
Cash $700
Common Stock
Account Titles Debit Credit
Cash $18,000
Service Revenue
Account Titles Debit Credit
Accounts receivable $1,900
Cash 2,800
Balance $4,700
Salaries and Wages Expense
Account Titles Debit Credit
Cash $1,500
Rent Expense
Account Titles Debit Credit
Cash $900
c) Trial Balance
As of April 30, 2017:
Account Titles Debit Credit
Cash $18,800
Accounts receivable 1,900
Supplies 1,300
Accounts payable $1,000
Unearned Service Revenue 700
Common Stock 18,000
Service Revenue 4,700
Salaries and wages exp. 1,500
Rent Expense 900
Totals $24,400 $24,400
Explanation:
a) Data and Analysis:
Apr. 1: Cash $18,000 Common Stock $18,000
Apr. 2: Rent Expense $900 Cash $900
Apr. 3: Supplies $1,300 Accounts payable (Burmingham Company) $1,300
Apr. 10: Accounts receivable $1,900 Service Revenue $1,900
Apr. 11: Cash $700 Unearned Service Revenue $700
Apr. 20: Cash $2,800 Service Revenue $2,800
Apr. 30: Salaries and Wages Expense $1,500 Cash $1,500 ($375 * 4 weeks)
Apr. 30: Accounts payable (Burmingham Company) $300 Cash $300
A company purchased a 3-acre tract of land for a building site for $440,000. The company demolished the old building at a cost of $21,000, but was able to sell scrap from the building for $2,400. The cost of title transfer was $1,350 and attorney fees for reviewing the contract was $680. Property taxes paid were $7,500, of which $700 covered the period after the purchase date. The capitalized cost of the land is:
Answer:
$467,430
Explanation:
Calculation for The capitalized cost of the land is:
Purchase price $440,000
Demolition costs $21,000
Scrap sold ($2,400)
Title insurance $1,350
Legal fees $680
Property taxes ($7,500 – $700) $6,800
Total cost of land $467,430
Therefore The capitalized cost of the land is:$467,430
Doug and Sue Click file a joint tax return and decide to itemize their deductions. The Clicks' income for the year consists of $90,000 in salary, $2,000 interest income, and $800 long-term capital loss. The Clicks' expenses for the year consist of $1,500 investment interest expense. Assuming that the Clicks' marginal tax rate is 35 percent, what is the amount of their investment interest expense deduction for the year
Answer:
$1,500
Explanation:
Based on the information given we were told that the expenses for the year was the amount of $1,500 which represent the investment interest expense which simply means that the amount of their INVESTMENT INTEREST EXPENSE deduction for the year will be the amount of $1,500 which is INVESTMENT INTEREST EXPENSE amount.
Therefore the amount of their investment interest expense deduction for the year will be $1,500
Kathy is an office manager at a growing law firm that specializes in pursuing awards for accident victims. She is assigned as the head of a problem-solving group to decide on where to locate a new, expanded office downtown. A major decision facing the group is whether to rent space in a sleek, new office building or to renovate space in a former factory building. The space in the old factory building would have brick walls and resemble a large loft.
Answer:
Kathy should seek quotes from various rental space providers.
Explanation:
Kathy should make a decision to rent of renovate the building based on cost. The major criteria for decision making is based on the monetary factors. Rent for the new space will be compared with the renovation cost in order to reach to a final decision.
Beginning inventory, purchases, and sales data for DVD players are as follows: November 1 Inventory 52 units at $79 10 Sale 35 units 15 Purchase 27 units at $83 20 Sale 25 units 24 Sale 13 units 30 Purchase 39 units at $86 The business maintains a perpetual inventory system, costing by the first-in, first-out method.
Determine the cost of the goods sold for each sale and the inventory balance after each sale, presenting the data in the form illustrated.
Under FIFO, if units are in inventory at two different costs, enter the units with the LOWER unit cost first in the Cost of Goods Sold Unit Cost column and in the Inventory Unit Cost column and LOWER unit cost first in the Inventory.
Answer:
November 1 Inventory 52 units at $79
November 10 Sale 35 units
COGS = 35 x $79 = $2,765Inventory balance = 17 x $79 = $1,343November 15 Purchase 27 units at $83
November 20 Sale 25 units
COGS = (17 x $79) + (3 x $83) = $1,592Inventory balance = (24 x $83) = $1,992November 24 Sale 13 units
COGS = 13 x $83 = $1,079Inventory balance = 11 x $83 = $913November 30 Purchase 39 units at $86
Inventory balance = $913 + (39 x $86) = $4,267Book Co. is an online book store which sells both fiction and non-fiction books. After analyzing the online book retail industry and assessing its current and predicted sales, Book Co. decides to move away from non-fictions and target only the fiction market which is expected to have a 20% growth in sales. This is an example of __________ strategy.
Answer:
A corporate-level strategy
Explanation:
Book Co. is an online book store that sells both fiction and non-fiction books. After analyzing the online book retail industry and assessing it's current and predicted sales, Book Co. decides to move away from non-fiction and target only the fiction market which is expected to have a 20% growth in sales. This is an example of a corporate-level strategy.
What are corporate-level strategies?That destination influences all the techniques and decisions in each other as a part of your enterprise. So, for instance, in case your commercial enterprise has reached market saturation and also you want to diversify to continue to exist, your company-degree method might be to unfold to new markets.
What are the 3 corporate strategies?To expand the business and increase profits.To maintain current business operations.To revive an ailing business.Learn more about corporate strategies here: https://brainly.com/question/17151786
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Identify which cost of inflation—menu costs or shoe-leather costs—is illustrated in each of the scenarios.
a. During the German hyperinflation of 1921‐1923, some workers reportedly were paid two to three times per day. They would then rush out to spend their earnings before they became nearly worthless.
This is an example of:_____
1. menu costs.
2. shoe‑leather costs.
b. A hyperinflation in Zimbabwe was so severe that, according to one observer of supermarket employees, they were "running around that store with label makers, changing the prices three, four times a day."
This is an example of:_____
1. menu costs.
2. shoe‑leather costs.
Answer:
shoe‑leather costs
. menu cost
Explanation:
Inflation is constant price in general price level
Types of inflation
demand pull inflationcost push inflationShoe leather cost is when people try to spend money immediately so they would not be holding money for a long time. This is because money loses its value in an inflation.
Menu costs are the costs of changing price constantly as a result of inflation, When there is inflation, prices increases regularly. As a result prices needs to be updated regularly.
A process includes 9 tasks and there are 3 workers. Each task can be assigned to only one worker and each worker must be assigned consecutive tasks. You need to balance the line by assigning the 9 tasks to the 3 workers in such a way to optimize capacity per hour. The time to complete tasks 1 to 9 (in seconds) are as follows:
80, 50, 30, 25, 55, 15, 45, 105, 40
Reqiured:
What is the capacity of this process in units per hour?
Answer:
The capacity of this process in units per hour is:
= 2.43 tasks per worker hour.
Explanation:
a) Data and Calculations:
Number of tasks in the process = 9
Number of workers available = 3
Thus, each worker will accomplish 3 tasks (9/3)
Total time to accomplish the 9 tasks = Sum(80, 50, 30, 25, 55, 15, 45, 105, 40) = 445 seconds or 1.236 hours
Therefore, the capacity of the process per hour = 9/(1.236 * 3) = 9/3.708
= 2.43 tasks per worker hour
XYZ Corp. applies manufacturing overhead costs to products at a budgeted indirect-cost rate of $65 per direct manufacturing labor-hour. A retail outlet has requested a bid on a special order of a necklace. Estimates for this order include: Direct materials of $35,000; 250 direct manufacturing labor-hours at $25 per hour; and a 30% markup rate on total manufacturing costs.
Estimated total product costs for this special order equal________
Answer:
Total production costs= $57,500
Explanation:
Giving the following information:
Estimated manufacturing overhead rate= $65 per direct manufacturing labor-hour.
Direct materials of $35,000
250 direct manufacturing labor-hours at $25 per hour
First, we need to allocate overhead:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Allocated MOH= 65*250= $16,250
Now, the total production costs:
Total production costs= 35,000 + 25*250 + 16,250
Total production costs= $57,500
Leaper Corporation uses an activity-based costing system with the following three activity cost pools: Activity Cost Pool Total Activity Fabrication 35,000 machine-hours Order processing 250 orders Other Not applicable The Other activity cost pool is used to accumulate costs of idle capacity and organization-sustaining costs. The company has provided the following data concerning its costs: Wages and salaries $ 380,000 Depreciation 150,000 Occupancy 170,000 Total $ 700,000 The distribution of resource consumption across activity cost pools is given below: Activity Cost Pools Fabrication Order Processing Other Total Wages and salaries 35% 30% 35% 100% Depreciation 15% 45% 40% 100% Occupancy 35% 30% 35% 100% The activity rate for the Order Processing activity cost pool is closest to:
Answer:
Order processing= $930 per order
Explanation:
First, we need to calculate the estimated costs for order processing:
Order processing cost= (380,000*0.3) + (150,000*0.45) + (170,000*0.3)
Order processing cost=$232,500
Now, we can calculate the activity rate:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Order processing= 232,500 / 250
Order processing= $930 per order
Joe Corporation produces and sells two products. In the most recent month, Product C90B had sales of $19,950 and variable expenses of $5,985. Product Y45E had sales of $26,190 and variable expenses of $10,476. The fixed expenses of the entire company were $17,000. If the sales mix were to shift toward Product C90B with total dollar sales remaining constant, the overall break-even point for the entire company:
Answer:
Decrease
Explanation:
Calculation to determine overall break-even point for the entire company
Contribution margin for C90B = ($19,950-
$5,985)/$19,950
Contribution margin for C90B = 70%
Contribution margin for Y45E =( $26,190- $10,476)/$26,190
Contribution margin for Y45E= 60%
Therefore Based on the above calculation if the sales mix were to shift toward Product C90B with total dollar sales remaining constant, the overall break-even point for the entire company
Would DECREASE reason been that C90B have more contribution margin ratio of 70% compare to Y45E which had contribution margin ratio of 60%
Data related to the inventories of Costco Medical Supply are presented below: Surgical Surgical Rehab Rehab Equipment Supplies Equipment Supplies Selling price $ 260 $ 100 $ 340 $ 165 Cost 170 90 250 162 Costs to sell 30 15 25 10 In applying the lower of cost or net realizable value rule, the inventory of surgical equipment would be valued at: Multiple Choice $240. $170. $152. $230.
Answer:
$85
Explanation:
Calculation for what the inventory of surgical supplies would be valued at
Net realizable value = $100 - $15
Net realizable value = $85
Therefore based on the above calculation the inventory of surgical supplies would be valued at $85
Wakanda Corporation is working on its direct labor budget for the next two months. Each unit of output requires 0.6 direct labor-hours. The direct labor rate is $9 per direct labor-hour. The production budget calls for producing 4,000 units in March and 5,000 units in April. What would be the total combined direct labor cost paid to workers by Morie for the two months
Answer:
See below
Explanation:
Required production in units 4,000 5,000
Direct labor hour per unit 0.6 0.6
Total direct labour hours needed 2,400 3,000
Direct labor cost per hour
$9 $9
Total direct labor cost
$21,600 $27,000
Therefore, the total combined direct labor cost paid to workers by Morie for the two months is $48,600
Assume that tea and lemons are complements and that coffee and tea are substitutes. An effective price ceiling on coffee would cause the _____ curve for lemons to shift _____. Hint: You will need to take a minute to think through this question. You can do it! Think about what is happening in all 3 markets (tea, lemons, coffee). Also, consider how much of each item is actually being exchanged.
Answer:
An effective price ceiling on coffee would cause the demand curve for lemons to shift to the left.
Explanation:
An effective price ceiling results in lower prices, increased demand, and shortages. Since tea and lemons are complement, a decrease in the price of coffee (substitute of tea) would result in a decrease in the demand for lemons (complement of tea). This means that the demand curve for lemons will shift to the left.
Bailey, Inc., is considering buying a new gang punch that would allow them to produce circuit boards more efficiently. The punch has a first cost of $100,000 and a useful life of 15 years. At the end of its useful life, the punch has no salvage value. Labor costs would increase $2,000 per year using the gang punch, but raw material costs would decrease $12,000 per year. MARR is 5 %/year.
A. What is the discounted payback period for this investment? Image for Bailey, Inc., is considering buying a new gang punch that would allow them to produce circuit boards more effi ______years
B. If the maximum attractive DPBP is 3 years, what is the decision rule for judging the worth of this investment?
C. Should Bailey buy the gang punch based on DPBP?
Answer:
14.2 years
Do not invest
yes
Explanation:
Discounted payback calculates the amount of time it takes to recover the amount invested in a project from it cumulative discounted cash flows
Cash flow each year = $12,000 - $2,000 = $10,000
Discounted cash flow in year 1 = 10,000 / 1.05 = 9.523.81
Discounted cash flow in year 2 = 10,000 / 1.05^2 = 9,070.29
Discounted cash flow in year 3 = 10,000 / 1.05^3 = 8,638.38
Discounted cash flow in year 4 = 10,000 / 1.05^4 = 8,227.02
Discounted cash flow in year 5 = 10,000 / 1.05^5 = 7,835.26
Discounted cash flow in year 6 = 10,000 / 1.05^6 = 7,462.15
Discounted cash flow in year 7 = 10,000 / 1.05^7 = 7,106.81
Discounted cash flow in year 8 = 10,000 / 1.05^8 = 6,768.39
Discounted cash flow in year 9 = 10,000 / 1.05^9 = 6,446.09
Discounted cash flow in year 10 = 10,000 / 1.05^10 = 6,139.13
Discounted cash flow in year 11 = 10,000 / 1.05^11 = 5846.79
Discounted cash flow in year 12 = 10,000 / 1.05^12 = 5568.37
Discounted cash flow in year 13 = 10,000 / 1.05^13 = 5303.21
Discounted cash flow in year 14 = 10,000 / 1.05^14 =5050.68
Discounted cash flow in year 15 = 10,000 / 1.05^15 = 4810.17
Discounted payback period = [-100,000 + ( discounted cash flows from year 1 to 14) ] + 1013.62/4810.17 = 14.2 years
The cash flows would turn positive between year 14 and 15
If the DPBP is 3 years, the project should not be accepted because the payback period is 14.2 years which is greater than 3 years
Bailey buy the gang punch based on DPBP because the amount invested is recouped with the useful life of the machine
Acme Investors is considering the purchase of the undeveloped Baker Tract of land. It is currently zoned for agricultural use. If purchased, however, Acme must decide how to have the property rezoned for commercial use and then how to develop the site. Based on its market study, Acme has made estimates for the two uses that it deems possible, that is, office or retail. Based on its estimates, the land could be developed as follows:
Which would be the highest and best use of this site?
Office Retail
Rentable Square Feet 100,000 80,000
Rents per square foot $24 $30
Operating Expenses Ratio 40% 50%
Avg. Growth in NOI Per Year 3% 3%
Required Return (r) 13% 14%
Total Construction Cost
per square foot $100 $100
Using the information from above, but assuming the site is currently improved with an industrial building that generates $400,000 of NOI per year. Investors require a return of 10% for such properties and assume no growth in NO. It would require $50,000 to demolish the existing building/prepare the site for redevelopment. From your work in above, what is the highest and best use as vacant? What is the highest and best use as improved?
Answer:
Office
Explanation:
Calculation to determine Which would be the highest and best use of this site
The analysis for the Baker Tract is as follows: OFFICE RETAIL
Rent 2,400,000 2,400,000
(100,000*$24=2,400,000)
Less Expenses (960,000) (1,200,000)
(2,400,000*40%=960,000)
(2,400,000*50%=1,200,000)
Cash Flow 1,440,000 1,200,000
(2,400,000-960,000=$1,440,000)
(2,400,000-$1,200,000=$1,200,000)
Cap Rate 0.10 0.11
(13%-3%=0.10)
(14%-3%=0.11)
Property Value 14,400,000 10,909,090
(1,440,000/0.10=14,400,000)
(1,200,000/0.11=10,909,090)
Construction Cost (10,000,000) ( 8,000,000)
(100,000*100=10,000,000)
(80,000*100=8,000,000)
Residual 4,400,000 2,909,090
(14,400,000-10,000,000=4,400,000)
( 10,909,090-8,000,000=2,909,090)
Therefore Based on the above calculation OFFICE would be the highest and best use of this site reason been that OFFICE has the HIGHEST amount of $4,400,000 compare to retail which has $2,909,090.
The unadjusted trial balance for PS Music as of July 31, 20Y5 is as follows:
PS Music
Unadjusted Trial Balance
July 31, 20Y5
Account No. Debit Balances Credit Balances
Cash 11 9,945
Accounts Receivable 12 2,750
Supplies 14 1,020
Prepaid Insurance 15 2,700
Office Equipment 17 7,500
Accounts Payable 21 8,350
Unearned Revenue 23 7,200
Common Stock 31 9,000
Dividends 33 1,750
Fees Earned 41 16,200
Wages Expense 50 2,800
Office Rent Expense 51 2,550
Equipment Rent Expense 52 1,375
Utilities Expense 53 1,215
Music Expense 54 3,610
Advertising Expense 55 1,500
Supplies Expense 56 180
Miscellaneous Expense 59 1,855
40,750 40,750
Based on those balances and the additional data below, prepare adjusting journal entries. Include Posting References, using the account numbers in your spreadsheet. You will need the following additional accounts:
Account # Account Name
18 Accumulated Depreciation-Office Equipment
22 Wages Payable
57 Insurance Expense
58 Depreciation Expense
The data needed to determine adjustments for the two-month period ending July 31, 2019, are as follows:
July 31: During July, PS Music provided guest disc jockeys for KXMD for a total of 115 hours. The contract requires PS Music to provide a guest disc jockey for 80 hours per month for a monthly fee of $3,600, which PS Music has already received payment for. Any additional hours beyond 80 will be billed to KXMD at $40 per hour.
Account Post. Ref. Debit Credit
July 31: Supplies on hand at July 31, $275.
Account Post. Ref. Debit Credit
July 31: The balance of the prepaid insurance account relates to the following July 1, 2019 transaction: "Paid a premium of $2,700 for a comprehensive insurance policy covering liability, theft, and fire. The policy covers a one-year period."
Account Post. Ref. Debit Credit
July 31: Depreciation of the office equipment is $50.
Account Post. Ref. Debit Credit
July 31: The balance of the unearned revenue account relates to the contract between PS Music and KXMD, described in the July 3, 2019 transaction, which included the following: "On behalf of PS Music, Peyton signed a contract with a local radio station, KXMD, to provide guest spots for the next three months. The contract requires PS Music to provide a guest disc jockey for 80 hours per month for a monthly fee of $3,600." In accordance with the contract, Peyton received $7,200 from KXMD as an advance payment for the first two months.
Account Post. Ref. Debit Credit
July 31: Accrued wages as of July 31, 2019, were $140.
Account Post. Ref. Debit Credit
Answer:
PS Music
Adjusting Journal Entries:
Debit Accounts receivable 12 $1,400
Credit Fees Earned 41 $1,400
To record extra services rendered. (115 - 80) * $40
Debit Supplies Expense 56 $745
Credit Supplies 14 $745
To record supplies used.
Debit Insurance Expense 57 $225
Credit Prepaid Insurance 15 $225
To record expired insurance expense ($2,700 * 1/12).
Debit Depreciation Expense -Office Equipment 58 $50
Credit Accumulated Depreciation-Office Equipment 18 $50
To record depreciation expense for the month.
Debit Unearned Revenue 23 $3,600
Credit Fees Earned 41 $3,600
To record fees earned.
Debit Wages Expense 50 $140
Credit Wages Payable 22 $140
To record accrued wages.
Explanation:
a) Data and Calculations:
PS Music
Unadjusted Trial Balance
July 31, 20Y5
Account No. Debit Balances Credit Balances
Cash 11 9,945
Accounts Receivable 12 2,750
Supplies 14 1,020
Prepaid Insurance 15 2,700
Office Equipment 17 7,500
Accounts Payable 21 8,350
Unearned Revenue 23 7,200
Common Stock 31 9,000
Dividends 33 1,750
Fees Earned 41 16,200
Wages Expense 50 2,800
Office Rent Expense 51 2,550
Equipment Rent Expense 52 1,375
Utilities Expense 53 1,215
Music Expense 54 3,610
Advertising Expense 55 1,500
Supplies Expense 56 180
Miscellaneous Expense 59 1,855
40,750 40,750
Analysis of Adjustments:
Accounts receivable 12 $1,400 Fees Earned 41 $1,400 (115 - 80) * $40
Supplies Expense 56 $745 Supplies 14 $745
Insurance Expense 57 $225 Prepaid Insurance 15 $225 ($2,700 * 1/12)
Depreciation Expense -Office Equipment 58 $50 Accumulated Depreciation-Office Equipment 18 $50
Unearned Revenue 23 $3,600 Fees Earned 41 $3,600
Wages Expense 50 $140 Wages Payable 22 $140
The following information is related to the pension plan of Gamekeeper, Inc. for 2017:
Actual return on plan assets $335,000
Amortization of net gain 132,000
Amortization of prior service cost due to increase in benefits 240,000
Expected return on plan assets 368,000
Interest on projected benefit obligation 580,000
Service cost 1,295,000
Pension expense for 2017 is:_______
a. $1,615,000.
b. $1,165,000.
c. $1,894,000.
d. $1,927,000.
Answer:
a. $1,615,000
Explanation:
Calculation for what the Pension expense for 2017 is:
Service cost, $1,295,000
Add Interest on the projected benefit obligation $580,000
Less Expected return on plan assets, ($368,000) Less amortization of net gain ($132,000)
Add amortization of PSC, $240,000
Pension expense $1,615,000
Therefore Pension expense for 2017 is:$1,615,000
For an organization with a Liabilities to Fund Balance ratio of 1.90, we can conclude that:
a. for every $1 in restricted fund balance, the entity has $1.90 in debt.
b. for every $1 in total fund balance, the entity has $1.90 in debt.
c. for every $1 in unrestricted fund balance, the entity has $1.90 in debt.
d. for every $1 in total assets, the entity has $1.90 in debt.
Answer: b. for every $1 in total fund balance, the entity has $1.90 in debt.
Explanation:
The Liabilities to Fund Balance ratio enables analysts to know the debt load of the fund. It is also known as the Debt to Net Worth ratio and is calculated by the formula:
= Interest - bearing debt / Total Capital
As shown from the formula, if the ratio is 1.90, it means that for every $1 in the total fund balance, the fund has $1.90 in debt.
bond economicial definition.
In addition to telling readers why an illustration is important, why else should you refer to it in the text of your document?
Answer:
To assist the readers to relate objects and actions with texts.
Explanation:
Aside from telling readers why an illustration is important, the other reason you should refer to it in the text of your document is "to assist the readers to relate objects and actions with texts."
This is evident in the fact that illustration in a text is a means of presenting a graphical representation of ideas, processes, or theories to aid or give elaborate meaning to what is written.
The classical dichotomy is the separation of real and nominal variables. The following questions test your understanding of this distinction.
Susan spends all of her money on comic books and mandarins. In 2009 she earned $27.00 per hour, the price of a comic book was $9.00, and the price of a mandarin was $3.00.
Which of the following give the nominal value of a variable?
A) Susan's wage is 3 comic books per hour in 2009.
B) The price of a mandarin is 0.33 comic books in 2009.
C) The price of a mandarin is $3.00 in 2009.
Answer:
The price of a mandarin is $3.00 in 2009.
Explanation:
The classical dichotomy is an economic theory that postulates that ( real variables e.g. output and employment, are independent of monetary variables e.g. price
In an ethical dilemma such as the one presented above
Multiple Choice
there are two choices, neither of which resolves the situation in an ethically acceptable manner
there are two choices, either of which resolves the situation in an ethically acceptable manner
there are two choices, one of which resolves the situation in an ethically acceptable manner
there is only one choice
there are no choices
Answer:
there are two choices, neither of which resolves the situation in an ethically acceptable manner
Explanation:
Given that Ethical dilemma is a philosophical term that describes circumstances whereby an individual is having two available decisions for him to pick one. However, none of them supersede the other in terms of ethical requirements.
Therefore, in this case, the correct answer is "there are two choices, neither of which resolves the situation in an ethically acceptable manner."
In 1974, the price level for Pacifica was 100, the price level for Atlantica was also 100, and in the foreign exchange market 1 Pacifica pound was equal to 1 Atlantica mark. In 2003, the price level in Pacifica had risen to 280 and the price level in Atlantica had risen to 360. a. According to PPP, what should the pound-mark exchange rate be in 2003
Answer: 0.78 pound mark exchange rate
Explanation:
The Purchasing power parity (PPP) is typically used to make comparison between the currencies of different countries' currencies and also used in comparing their standards of living.
According to PPP, the pound-mark exchange rate in 2003 will be calculated as:
= 280/360
= 0.78
Alphabet Company, which uses the periodic inventory method, purchases different letters for resale. Alphabet had no beginning inventory. It purchased A thru G in January at $10.50 per letter. In February, it purchased H thru L at $12.50 per letter. It purchased M thru R in March at $13.50 per letter. It sold A, D, E, H, J and N in October. There were no additional purchases or sales during the remainder of the year.Use the information above to answer the following question. If Alphabet Company uses the FIFO method, what is the cost of its ending inventory?a. $24b. $42c. $58d. $76
Answer: $154.00
Explanation:
If the company is using FIFO, they would have sold off the earliest purchases first. As the sold 6 letters in October, the letter left from the first purchase is:
A to G = 7 letter
= 7 - 6
= 1 letter
Remaining inventory = 1 letter at $10.50
H - L = 5 letter
= 5 * 12.50 = $62.50
M through to R = 6 letter
= 6 * 13.50
= $81
Total ending inventory = 10.50 + 62.50 + 81
= $154.00
Note: Options are most likely for a variant of this question.
Arthur deposits Kenya shillings P into a savings account at time 0, which pays interest at a nominal rate of j, compounded semi-annually. In the last 6 months of the 7th year, he earns interest that is 2.4 times what he earned in the last 6 months of the 4th year. Calculate j
Answer:
hiii ni mao ya wapi brooo
Say you are planning to start a new business. You expect to have losses for the first 2 years and then achieve significant profits. But, in order to grow, you will need to be able to keep the after-tax earnings. You also want to limit your liability. How will you structure your business regarding issuing debt versus increasing equity and why
Answer:
Answer is explained in the explanation section below.
Explanation:
Solution:
It is perfectly natural that the loss will occur at the start. Since it is not able to pay fixed interest obligations, a preferential or equity capital increase is recommended. The debt fund will create a financial crisis in the capital structure because it will be difficult for the company to fulfil its payment obligation on the initial stage.
The composition of debt capital will contribute to a certain tax savings, but it will certainly increase the overall outflow of the fund.
For Example:
Total Capital is 1,000,000 costing of 500,00 debt and 500,000 equity and 40 % tax bracket.
Suppose total return is 10% on capital.
Earnings for the year : 1,000,000 * 10 % = 100,000
Interest obligation (assume borrowed at 12 % ) = 60,000
Profit before tax = 40,000
Tax at the rate 40% = 16,000
Earning after tax available for growth = 24,000
Total capital only consists of equities in this example.
The earnings will be same = 100,000
Less tax at the rate 40 % = 40,000
Net earnings available for future growth = 60,000
We have an extra earnings available for future growth is 36,000 (60,000 - 24,000).
Ignore tax saving 24,000 (40,000 - 16,000) Because the enterprise requires more for future growth following tax earnings at the initial stage.
So,
The business was structured to maximize the use of own resources instead of borrowing the fund.
Striker Company estimates its expected cash receipts for the period to be $80,000 and its expected cash disbursements to be $70,000. The beginning cash balance for the period was $5,000. The management wants to maintain a minimum cash balance of $40,000. Knowledge Check 01 How much cash will the company need to borrow
Answer:
$25,000
Explanation:
Calculation for How much cash will the company need to borrow
Cash needed to borrow=$40,000 - (($80,000 - $70,000) + $5,000).
Cash needed to borrow=$40,000+$10,000-$5,000
Cash needed to borrow=$25,000
Therefore How much cash will the company need to borrow is $25,000
Larry Ellison starts a company that manufacturers high-end custom leather bags. He hires 3 employees. Each employee only begins working on a bag when a customer order has been received and then she makes the bag from beginning to end. The average production time of a bag is 2.2 days with a standard deviation of 3 days. Larry expects to receive one customer order per day on average. The interarrival times of orders have a coefficient of variation of 1. What is the expected duration, in days, between when an order is received and when production begins on the bag?
Answer:
0.93 days
Explanation:
Number of employees ( m ) = 3
Average production time of a bag ( p ) = 2.2 days
standard deviation ( std ) = 3 days
Number of customer order expected per day = 1
Coefficient of interarrival times of order ( c ) = 1
arrival time ( a ) = 1
Determine the expected duration between when a n order is received and when production begins on the bag
determine the utilization time = p / ( m*a ) = 2.2 / ( 3 * 1 ) = 0.733
Hence the expected time :
Tq = 0.93 days
attached below is the detailed solution