Answer and Explanation:
The total deductible expense is for tax purpose is shown below:
The income that is earned from gambling and winning lotteries via legal or illegal the same is to taxable
Also the nonrecorded and illegal expenses would be ignored
The following expenses should be considered as deductible
(1) Rent paid of $41,500
(2) Travel expenses $4,150
(3) Utilities of $24,900
(4) Wages $356,750
(5) Payroll Taxes $20,750
(6) Property insurance $2075
Bribes and illegal kickbacks are not taxable
If Mux/Px < MUy/Py, then A. Spending a dollar less on Y and a dollar more on X increases utility B. Spending a dollar less on X and a dollar more on Y increases utility C. The substitution effect will increase the quantity of the good demanded while the income effect t will decrease the quantity of the good demanded D. The substitution effect will decrease the quantity of the good demanded while the income effect will increase the quantity of the good demanded
Answer:
B. Spending a dollar less on X and a dollar more on Y increases utility
Explanation:
Consumer's utility maximising equilibrium in case of two commodities is when Marginal Utility on per unit currency spent on both goods is equal.
MU X / P X = MU Y / P Y
If MU X / P X < MU Y / P Y : Consumer gets more additional satisfaction per unit currency spent, from good Y than good X
So in this case, spending a dollar less on X & a dollar more on Y increases utility.
Haskell Corp. is comparing two different capital structures. Plan I would result in 12,000 shares of stock and $100,000 in debt. Plan II would result in 8,700 shares of stock and $155,000 in debt. The interest rate on the debt is 5 percent. Compare both of these plans to an all-equity plan assuming that EBIT will be $80,000. The all-equity plan would result in 18,000 shares of stock outstanding. Assuming that the corporate tax rate is 40 percent, what is the EPS for each of these plans? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Assuming that the corporate tax rate is 40 percent, what are the break-even levels of EBIT for each plan as compared to that for an all-equity plan? (Do not round intermediate calculations.)
Answer:
Please find attached detailed solution to the above question.
Explanation:
Please as attached detailed solution.
Your firm has taken out a 521,000 loan with 8.6% APR (compounded monthly) for some commercial property. As is common in commercial real estate, the loan is a 5-year loan based on a 15-year amortization. This means that your loan payments will be calculated as if you will take 15 years to pay off the loan, but you actually must do so in 5 years. To do this, you will make 59 equal payments based on the 15-year amortization schedule and then make a final 60th payment to pay the remaining balance.
A. What will your monthly payments be?
B. What will your final payment be?
Answer:
The monthly payment will be = $5161.08
The final payment will be: = $413,684.38
Explanation:
From the given information:
Given that:
the loan amount = $521000
The interest rate for the loan is = 8.6% compounded monthly
the loan is being amortized for 15 years
Thus, the firm will be paying the due amount after 15 years
We use the Excel software to find the monthly payment and the final payment.
a. Using the Excel Function ( =PMT(8.6%/12,15*12,-521000) )
The monthly payment will be = $5161.08
b.Using the Excel Function (=CUMPRINC(8.6%/12,15*12,521000,60,180,1) )
The final payment will be: = $413,684.38
These can be seen in the images attached below.
Kivi Service Stations is considering expanding its operations to include the greater Dubuque area. Rather than build new service stations in the Dubuque area, management plans to acquire existing service stations and convert them into Kivi outlets. Kivi is evaluating two similar acquisition opportunities. Information relating to each of these service stations is presented as follows. Joe’s Garage Gas N’ Go Estimated normal rate of return on net assets 20 % 20 % Fair value of net identifiable assets $ 950,000 $ 980,000 Actual average net income for past five years 220,000 275,000 Required: a. Compute an estimated fair value for any goodwill associated with Kivi purchasing Joe’s Garage. Base your computation upon an assumption that successful service stations typically sell at about 9.25 times their annual earnings. b. Compute an estimated fair value for any goodwill associated with Kivi purchasing Gas N’ Go. Base your computation upon an assumption that Kivi’s management expects excess earnings to continue for four years.
Answer:
A. $1,085,000
B. $316,000
Explanation:
A. Computation of an estimated fair value for any goodwill associated with Kivi purchasing Joe’s Garage
Actual average net income per year $220,000
Sales multiplier 9.25 times
Estimated fair market value of Joe's Garage$2,035,000
($220,000*9.45 Times)
Fair market value of identifiable assets($950,000)
Estimated goodwill of Joe's Garage$1,085,000
($2,035,000-$950,000)
b. Computation for an estimated fair value for any goodwill associated with Kivi purchasing Gas N’ Go.
Actual average net income per year$275,000
Earnings for Gas N' Go($196,000)
(20%×$980,000)
Estimated excess earnings of Gas N' Go$79,000
($275,000-$196,000)
Management expect excess earning of four years ×4
Estimated goodwill of Gas N' Go $316,000
($79,000×4 years)
Between January 2010 and January 2016, U.S. employment increased by 12.1 million workers, but the number of unemployed workers declined by only 7.3 million. True or False: The labor force has remained unchanged.
Answer:
False, the labor forced increased
Explanation:
labor force = total number of people actively working (employed) or searching for jobs (unemployed)
lets say L = the total labor force in 2010
by 2016, L had increased by 12.1 million and decreased by 7.3 million
net change of L = 12.1 - 7.3 = 4.8 more million people were part of the labor force in 2016 than in 2010.
How do prevention and resistance technologies stop intruders from accessing and reading sensitive information?A) Content filtering,encryption,and firewallsB) Calculating,locking,and firewallsC) Content prohibiting,and cookiesD) None of the above
Answer: A. Content filtering, encryption and firewalls.
Explanation:
Due to fraud and other security challenges, prevention and resistance technologies are important in order to help computer and internet users to protect their informations.
Ways to achieve this include content filtering, encryption and firewalls. Content filtering is when the access to a particular web content is restricted. Encryption has to do with the translation of data into another form so that it won't be accessible to anyone without the password. Firewall is also done on order to curb unauthorized access.
Judd Company has a beginning inventory in year one of $1,400,000 and an ending inventory of $1,694,000. The price level has increased from 100 at the beginning of the year to 110 at the end of year one. Calculate the ending inventory under the dollar-value LIFO method.
Answer:
The ending inventory under the dollar-value LIFO method is $1,554,000.
Explanation:
The dollar-value LIFO method can be described as a variation on the last in, first out (LIFO) method which focuses on the estimation of a conversion price index that can be employed to compare the year-end inventory to the base year cost.
The ending inventory under the dollar-value LIFO method can be calculated as follows:
Beginning inventory at begining price level = $1,400,000
Ending inventory at ending price level = $1,694,000
Beginning price level = 100
Ending price level = 110
Beginning price index = Beginning price level / Beginning price level = 100 / 100 = 1.0
Ending price index = Ending price level / Beginning price level = 110 / 100 = 1.1
Ending inventory at base year prices = Ending inventory at ending price level / Ending price index = $1,694,000 / 1.1 = $1,540,000
Real-dollar quantity increase in inventory = Ending inventory at base year prices - Beginning inventory = $1,540,000 - $1,400,000 = $140,000
Value of real dollar quantity increase in inventory = Real dollar quantity increase in inventory * Ending price index = $140,000 * 1.1 = $154,000
Dollar value LIFO Ending inventory = Beginning inventory at begining price level + Value of real dollar quantity increase in inventory = $1,400,000 + $154,000 = $1,554,000
Therefore, the ending inventory under the dollar-value LIFO method is $1,554,000.
Lake Sales had $2,200,000 in sales last month. The contribution margin ratio was 30% and operating profits were $180,000. What is Lake's break-even sales volume
Answer:
$1,600,000
Explanation:
Sales
$2,200,000
Contribution margin ratio
30%
$660,000
Sales $2,200,000
Contribution margin $660,000
Operating profit $180,000
Fixed cost = Contribution margin - Operating profit
= $660,000 - $180,000
= $480,000
Break even sales = Fixed cost / Contribution margin ratio
= $480,000 / 30%
= $1,600,000
Therefore, Lake's break even sales volume is $1,600,000
A consumer is likely to have a broad search including more brands during an external information search when:
Answer:
There is a direct relationship between perceived risk and external research. The higher the perceived risk, the more external research a consumer will carry out. Perceived risk is not simply fearing that you will make a bad purchase, but it also refers to the costs and benefits associated with the purchase.
The higher the benefits that a consumer can obtain from a purchase, the higher the risk of not getting enough benefits if they make a bad choice. E.g. if you have a lot of good choices available, then you will want to do some more research to choose the best one.
Generally consumers include more brands in their search when they are physically in stores. As consumers we generally consider a very limited number of brands when we shop online, but when we are in a store, we tend to broaden our search and include al the brands that we find.
Suppose you purchase a ten-year bond with annual coupons.You hold the bond for four years and sell it immediately after receiving the fourth coupon. If the bond's yield to maturity was when you purchased and sold the bond, a. What cash flows will you pay and receive from your investment in the bond per face value? b. What is the internal rate of return of your investment?
Answer:
Explanation:
The Full question is "Suppose you purchase a 10-year bond with 6% annual coupons. You hold the bond for four years, and sell it immediately after receiving the fourth coupon. If the bond’s yield to maturity was 5% when you purchased and sold the bond, what cash flows will you pay and receive from your investment in the bond per $100 face value?"
Face Value = $100
YTM = 5%
Annual Coupon = 6% * $100 = $6
Purchase Price = $6*PVIFA(5%, 10) + $100*PVIF(5%, 10)
Purchase Price = $6*(1-(1/1.05)^10)/0.05 + 100/1.05^10
Purchase Price = $107.72
Selling Price = $6*PVIFA(5%, 6) + $100*PVIF(5%, 6)
Selling Price = $6*(1-(1/1.05)^6)/0.05 + 100/1.05^6
Selling Price = $105.08
Cash Outflow at Year 0 = $107.72
Cash Inflow at Year 1 = $6
Cash Inflow at Year 2 = $6
Cash Inflow at Year 3 = $6
Cash Inflow at Year 4 = $6 + $105.08 = $111.08
B. The internal rate of return of your investment = 5.001% (Find attach the calculation)
Which is an example of a businessman making an investment?
he receives financing from an angel investor
he contributes money to a partnership
he applies for a small business loan
he reports investor fraud to the SEC
Answer:
he contributes money to a partnership
The one that can be stated as an example of a businessman who is making an investment is by making a contribution in the form of money to a partnership. Hence, Option B is correct.
What is a businessman?An individual who owns or has shares in a private sector and engages in commercial or industrial activities to generate cash flow, sales, and income by combining human, financial, intellectual, and physical capital with the goal of sustaining is referred to as a businessman or businesswoman.
Although it is a difficult career path, those who choose business reap the rewards of their labour and have access to employment options in almost every industry.
One may find them in almost any company, managing operations, hiring and firing staff, keeping the books balanced, and managing funds. The one that can be used as an illustration of a businessman investing is by giving a financial contribution to a partnership.
Therefore, Option B is correct.
Learn more about businessman from here:
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Sheridan Company reports:
Cash provided by operating activities $ 329000
Cash used by investing activities 119000
Cash provided by financing activities 139000
Beginning cash balance 92000
What is Sheridan’s ending cash balance?
Answer: $441,000
Explanation:
The following can be deuced from the question:
Cash provided by operating activities = $329000
Cash used by investing activities = $119000
Cash provided by financing activities = $139000
Beginning cash balance = $92000
Sheridan’s ending cash balance will be:
= Beginning cash balance + cash provided by operating activities + cash provided by financing activities - cash used by operating activities
= $92000 + $329000 + $139000 - $119000
= $441,000
Researchers at Ohio State and Michigan put leader behavior into two broad categories; __________ and __________.
a. Task , Power
b. People , Task
c. Task , Organizational
Answer:
b. People , Task
Explanation:
Based on the Michigan Leadership Studies that was carried out around 1950s and 1960s which centered on behavioral approaches and identification of leader relationships and group processes. The outcome of the research showed that there are three significant traits of productive leaders which are mainly:
1. Task-oriented behavior
2. Relationship-oriented behavior: this focused on people interaction in and out of the work place.
3. Participative leadership.
Hence, in this case, it can be concluded that "Researchers at Ohio State and Michigan put leader behavior into two broad categories; PEOPLE and TASK.
___________ is/are associated with collecting, storing, and distributing the product or service to buyers. They consist of warehousing, material handling, delivery operation, order processing, and scheduling.
a. Services
b. Inbound logistics
c. Outbound logistics
d. Operations
Answer:
Outbound logistics
Explanation:
Logistics is defined as the process by which inventory and other goods are moved from their source to locations of use or consumption.
Outbound logistics for a business is concerned with movement of finished goods from a company to the consumer. It is movement of goods outward.
Various activities involved in this are storing, collection, order processing, warehousing, and distribution.
On the other hand inbound logistics deals with inflow of required raw materials and equipment for production or operations.
Newton Company currently produces and sells 7,000 units of a product that has a contribution margin of $5 per unit. The company sells the product for a sales price of $23 per unit. Fixed costs are $39,000. The company is considering investing in new technology that would decrease the variable cost per unit to $11 per unit and double total fixed costs. The company expects the new technology to increase production and sales to 12,000 units of product. What sales price would have to be charged to earn a $90,000 desired profit assuming the investment in technology is made
Answer:
selling price= $25
Explanation:
Giving the following information:
Fixed costs= $78,000
Unitary variable cost= $11
Desited profit= $90,000
Break-even point in units= 12,000
To calculate the selling price, we need to use the following formula:
Break-even point in units= (fixed costs + desired profit) / contribution margin per unit
12,000= (78,000 + 90,000) / (selling price - 11)
12,000*selling price - 132,000 = 168,000
12,000selling price = 300,000
selling price= $25
Which of these is an acceptable less hazardous method of cleaning than solvents?
[You Chose] Using disposable wipesUsing a dishwasherUsing a water hoseMechanical cleaning
Answer:
I guess that this depends on what you want to clean, but my choice is
using a dishwasherE.g. if you are a mechanic and you need to clean auto parts (which are dirty and greasy), then a hot soap washer is very useful. A hot soap washer is basically a dishwasher that works with hot pressurized water. Generally, detergent is much less hazardous than solvents. This method applies to all the objects that can be moved into the sink in order to be washed.
If you want to clean things at home, the same applies. The least hazardous cleaning method is using hot water and detergent.
A pressurized water hose may be a solution to certain issues, e.g. clean bird poop on top of a car or a sidewalk. If you can mechanically clean something (use a broom or vacuum cleaner), then there is no reason why you would need a solvent. Using disposable wipes only increases the amount of waste that you generate.
Answer:
The correct alternative to cleaning parts beside just using solvents, would be Mechanical Cleaning.
Joseph just received an inheritance of $35,775 from his great aunt. He plans to invest the funds for retirement. If Joseph can earn 4.75% per year with quarterly compounding for 32 years, how much will he have accumulated?
a. $237,416.b. $71,550.c. $184,622.d. $162,113.
Answer:
FV= $162,113.25
Explanation:
Giving the following information:
Initial investment= $35,775
Interest rate= 0.0475/4= 0.011875
Number of periods= 32*4= 128
To calculate the future value, we need to use the following formula:
FV= PV*(1+i)^n
FV= 35,775*(1.011875^128)
FV= $162,113.25
What are the advantages and disadvantages of making small, frequent purchases from just a few suppliers?
Answer: The small frequent purchases means purchasing small budget goods and services in a short duration.
Explanation:
Advantages of small frequent purchases: It reduces the inventory levels.
Disadvantages of small frequent purchases: It increases the inbound transportation costs.
Using fewer supplier means to fill up the delivery transportation to its capacity of loading so that goods can be delivered at low transportation cost.
Suppose that government officials have set an emissions tax to reduce pollution. Assume that the optimal tax would be $1,500, but government officials have set the tax at $500. At the equilibrium with the $500 tax: a. there will be too much pollution. b. the marginal social cost of pollution will be less than $500. c. the marginal social benefit of pollution will be less than $500. d. the marginal social benefit of pollution will be more than $500.
Answer: there will be too much pollution
Explanation:
From the question, we are informed that government officials have set an emissions tax to reduce pollution and that the optimal tax should have been $1,500 but government officials have set the tax equal to $500.
It should be noted that due to the fact that the optimal tax has been set below the equilibrium, this will lead to a rise in pollution as the people will be aware that they're paying less than the optimal level which will lead to more pollution. An increase in the optimal tax will have help in reducing the pollution.
Roger owns some farmland that he rents to a tenant. The tenant lives in an old farmhouse on the property and raises crops on the land. Roger is concerned about legal liability if the tenant injures someone. Roger requires the tenant to have liability insurance and to add himself to the liability coverage through an endorsement. Under the tenant's liability insurance, Roger is a(n)
Answer:
additional insured
Explanation:
An additional insured endorsement refers to an amendment clause made to an exiting policy which adds someone else, and therefore, extends the coverage of the policy to include this recently added party.
In this case, Roger was included or added to his tenant's liability insurance policy, therefore, he will be covered by it.
Farris Corporation, which has only one product, has provided the following data concerning its most recent month of operations: Selling price $ 78 Units in beginning inventory 0 Units produced 8,800 Units sold 8,700 Units in ending inventory 100 Variable costs per unit: Direct materials $ 18 Direct labor $ 10 Variable manufacturing overhead $ 4 Variable selling and administrative expense $ 5 Fixed costs: Fixed manufacturing overhead $255,200 Fixed selling and administrative expense $ 87,000 What is the unit product cost for the month under absorption costing
Answer:
$61
Explanation:
The computation of unit product cost for the month under absorption costing is shown below:-
Unit product cost = Direct material + Direct labor + Variable Manufacturing overhead + Fixed manufacturing cost
= $18 + $10 + $4 + ($255,200 ÷ 8,800)
= $61
Therefore for computing the unit product cost for the month under absorption costing we simply applied the above formula.
Mr. Boyd and Ms. Tuck decide to form a new corporation named BT Inc. Mr. Boyd transfers $10,000 cash and business inventory ($20,000 FMV; adjusted tax basis $3,200), and Ms. Tuck transfers business equipment (FMV $60,000; adjusted tax basis $41,500) to BT. In exchange for their cash and property, BT issues 1,200 shares of common stock to its two shareholders. How many shares should Mr. Boyd and Ms. Tuck each receive? Compute Mr. Boyd’s realized and recognized gain on his exchange of property for stock, and determine his tax basis in his BT common shares. Compute Ms. Tuck’s realized and recognized gain on her exchange of property for stock, and determine her tax basis in her BT common shares. Determine BT Inc.’s book and tax basis in the inventory transferred by Mr. Boyd and the equipment transferred by Ms. Tuck.
Answer:
1. Mr Boyd's share = 400, Ms Tuck = 800
2. Mr Boyd's realised gain = $16,800, recognized gain = $0, basis = $13200
Ms Tuck's realized gain = $18500, gain recognized = 0, basis = $41500
Explanation:
1.
Total share = $1200
Cash received from Mr Boyd = 10000
FMV from him = 20000
Total value = 30000
FMV of equipment from Ms Tuck = 60000
Total value from both of them = 60000 + 30000 = $90000
Number of share Mr Boyd is to receive = 1200x(30000/90000)
= 400
Number of share Ms Tuck is to receive
= 1200x(60000/90000)
= 800
2.
Mr Boyd's gains
Cash received = 10000
FMV = 20000
Total = 30000
Adjusted basis = 3200
Total tax basis = 10000+3200
Gain realized = 30000-13200
= 16800
Gain realized = 0 because it is a non taxable exchange.
Mr Boyd's realised gain = $16800, recognised gain = $0, basis = $13200
Ms Tuck
FMV = 60000
Adjusted tax basis = 41500
Gain realized = 60000-41500
= 18500
Gain recognized = 0(non taxable exchange)
Ms Tuck's realized gain = $18500, recognized gain = $0, basis = $41500
3
the FMV basis of inventory = 20000
carryover basis = 3200
equipment basis FMV = 60000
carryover basis = 41500
note that no gain if equal to or more than 80 percent of the ownership of the stock in a non taxable exchange.
Given the following data: Selling price per unit $ 2.00 Variable production cost per unit $ 0.30 Fixed production cost $ 3,000 Sales commission per unit $ 0.20 Fixed selling expenses $ 1,500 The break-even point in dollars is:
Answer:
Break-even point (dollars)= $6,000
Explanation:
Giving the following information:
Selling price per unit $ 2.00
Variable production cost per unit $ 0.30
Fixed production cost $ 3,000
Sales commission per unit $ 0.20
Fixed selling expenses $ 1,500
To calculate the break-even point in dollars, we need to use the following formula:
Break-even point (dollars)= fixed costs/ contribution margin ratio
Fixed costs= 3,000 + 1,500= 4,500
Unitary variable cost= 0.3 + 0.2= $0.5
Break-even point (dollars)= 4,500 / [(2 - 0.5) / 2]
Break-even point (dollars)= $6,000
Business K exchanged an old asset (FMV $95,000) for a new asset (FMV $95,000). Business K’s tax basis in the old asset was $107,000. Compute Business K’s realized loss, recognized loss, and tax basis in the new asset assuming the exchange was a taxable transaction. Compute Business K’s realized loss, recognized loss, and tax basis in the new asset assuming the exchange was a nontaxable transaction. Six months after the exchange, Business K sold the new asset for $100,000 cash. How much gain or loss does Business K recognize if the exchange was taxable? How much gain or loss if the exchange was nontaxable?
Answer:
All requirements solved
Explanation:
A realized loss is the loss that is recognized when assets are sold for a price lower than the original purchase price
1.If Exchange was a taxable transaction:
Realized loss = $95,000 amount realised - $107,000 tax basis = $12,000
Recognized loss = $12,000
Tax basis in new asset = $92,000 cost
2. If the exchange was a non-taxable transaction:
Realized loss = $95,000 amount realised - $107,000 tax basis = $12,000
Recognized loss = $0
Tax basis in new asset = $104,000 substituted basis
3. If exchange was taxable,
Gain recognized on sale of new asset = ( $100,000 amount realized - $95,000 Tax basis)
Gain recognized on the sale of new asset = $7,000
If exchange was non taxable,
loss recognized on sale of new asset = $100,000 amount realized - $107,000 Tax basis
loss recognized on sale of new asset = $7,000
Grover Company has the following data for the production and sale of 1,900 units. Sales price per unit $ 950 per unit Fixed costs: Marketing and administrative $ 418,000 per period Manufacturing overhead $ 370,500 per period Variable costs: Marketing and administrative $ 50 per unit Manufacturing overhead $ 80 per unit Direct labor $ 100 per unit Direct materials $ 240 per unit What is the total manufacturing cost per unit
Answer:
$415
Explanation:
The computation of the total manufacturing cost per unit is shown below:-
Total manufacturing cost per unit = Direct material + Direct labor + Manufacturing overhead + Fixed manufacturing overhead
= $240 + $100 + $80 + ($370,500 ÷ 1,900)
= $40 + $100 + $80 + $195
= $415
SO, we have applied the above formula.
Rust Pipe Co. was established in 1994. Four years later the company went public. At that time, Robert Rust, the original owner, decided to establish two classes of stock. The first represents Class A founders' stock and is entitled to twelve votes per share. The normally traded common stock, designated as Class B, is entitled to one vote per share. In late 2010, Mr. Stone, an investor, was considering purchasing shares in Rust Pipe Co. While he knew the existence of founders’ shares were not often present in other companies, he decided to buy the shares anyway because of a new technology Rust Pipe had developed to improve the flow of liquids through pipes. Of the 1,900,000 total shares currently outstanding, the original founder's family owns 52,725 shares. What is the percentage of the founder's family votes to Class B votes? (Do not round intermediate calculations. Input your answer as a percent rounded to 2 decimal places.)
Answer:
34.25%
Explanation:
Votes per share = 12
Shares owned = 52725
Now we are to calculate the total value of the total number of of votes
Total votes = votes per share * shares owned
= 12*52725
Total = 632700
Value of votes of class B
Total shares outstanding - founders family shares
= 1900000 - 52725
= 1847275
The question requires us to calculate percentage of the founder's family votes to Class B votes
632700/1847275
= 0.3425
= 34.25%
Skysong Corporation had income from continuing operations of $10,811,000 in 2020. During 2020, it disposed of its restaurant division at an after-tax loss of $205,400. Prior to disposal, the division operated at a loss of $319,800 (net of tax) in 2020 (assume that the disposal of the restaurant division meets the criteria for recognition as a discontinued operation). Skysong had 10,000,000 shares of common stock outstanding during 2020. Prepare a partial income statement for Skysong beginning with income from continuing operations. (Round earnings per share to 2 decimal places, e.g. 1.48.)
Answer:
look up on google is all i can say
Explanation:
Joni Hyde Inc. has the following amounts reported in its general ledger at the end of the current year.
Organization costs $24,000
Trademarks 15,000
Discount on bonds payable 35,000
Deposits with advertising agency
for ads to promote goodwill of company 10,000
Excess of cost over fair value of net
identifiable assets of acquired subsidiary 75,000
Cost of equipment acquired for research
and development projects; the equipment
has an alternative future use 90,000
Costs of developing a secret formula for a
product that is expected to be marketed for
at least 20 years 80,000
On the basis of this information, compute the total amount to be reported by Hyde for intangible assets on its balance sheet at year-end. Equipment has alternative future use.
Answer:
90,000
Explanation:
An intangible asset is an asset that is not physical in nature. Goodwill, brand recognition and intellectual property, such as patents, trademarks, and copyrights, are all intangible assets.
Trademarks = 15,000
Excess of cost over the fair value of net
identifiable assets (Goodwill) = 75,000
Total intangible assets = 90,000
Epiphany is an all-equity firm with an estimated market value of $400,000. The firm sells $275,000 of debt and uses the proceeds to purchase outstanding equity. Compute the weight in equity and the weight in debt after the proposed financing and repurchase of equity. Group of answer choices 0.31, 0.69 0.34, 0.66 0.48, 0.52 0.69, 0.31
Answer:
Epiphany
Weight in equity = 0.31
Weight in debt = 0.69
Explanation:
a) Data and Calculations:
Estimated market value of equity = $400,000
Debts = $275,000
Net equity after debt = $125,000
Weight in equity = $125,000/$400,000 = 0.31
Weight in debt = $275,000/$400,000 = 0.69
b) The weight in equity shows the relationship between the equity and the total capital (equity and debt) in use in Epiphany after the sale of debt and repurchase of outstanding equity.
c) The weight in debt shows the relationship between the debt capital and the total capital (equity and debt) in use in Epiphany after the sale of debt and repurchase of outstanding equity.
Prepare adjusting entries for the following transactions. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)
1. Unrecorded interest accrued on savings bonds is $410.
2. Property taxes incurred but not paid or recorded amount to $800.
3. Unearned service revenue of $4,000 was collected in advance. By year end $700 was still unearned.
4. Prepaid insurance had a $750 debit balance prior to adjustment. By year end, 60 percent was still unexpired.
5. Salaries incurred by year end but not yet paid or recorded amounted to $650.
Answer:
1. Dr Interest Receivable 410
Cr Interest Revenue 410
2. Dr Property Tax Expense 800
Cr Property Taxes Payable 800
3. Dr Unearned Service Revenue 3,300
Cr Service Revenue 3,300
4. Dr Insurance Expense 300
Cr Prepaid Insurance 300
5. Dr Salaries and Wages Expense 650
Cr Salaries and Wages Payable 650
Explanation:
Preparation of Journal entries
1. Dr Interest Receivable 410
Cr Interest Revenue 410
2. Dr Property Tax Expense 800
Cr Property Taxes Payable 800
3. Dr Unearned Service Revenue 3,300
Cr Service Revenue 3,300
($4,000 – $700)
4. Dr Insurance Expense 300
Cr Prepaid Insurance 300
[$750 x (100%-60%)]
5. Dr Salaries and Wages Expense 650
Cr Salaries and Wages Payable 650