Answer:
Estimate of the stock's current price=$132.71
Explanation:
Price of the stock today = [tex]\frac{D1}{(1+ke)^1}+\frac{D2}{(1+ke)^2}+\frac{D3}{(1+ke)^3}+\frac{P3}{(1+ke)^3}[/tex].
where [tex]D_1= D_0*(1+g)=2.2(1.22)=2.684[/tex]
and ke using CAPM = [tex]r_f+b(r_m-r_f)[/tex] = 0.065+1.4(0.02)=0.093
and P3= [tex]\frac{D4}{ke-g}[/tex]
Estimate of the stock's current price = [tex]\frac{2.684}{(1+0.093)^1}+\frac{2.684(1.22)}{(1+0.093)^2}+\frac{2.684(1.22)(1.07)}{(1+0.093)^3}+\frac{2.684(1.22)(1.07^2)}{(0.093-0.07)(1+ke)^3}[/tex] = 132.71
Compute the total manufacturing cost for a manufacturer with the following information for the month. Raw materials purchased $ 43,200 Direct materials used 58,250 Direct labor used 14,000 Factory supervisor salary 8,800 Salesperson commissions 6,000 Depreciation expense—Factory building 3,700 Depreciation expense—Delivery equipment 3,400 Indirect materials 1,800
Answer:
Cost of good manufactured= $86550
Explanation:
To calculate the cost of manufactured goods we need to use the following formula:
Cost of good manufactured= Beginning work in progress+ direct materials of the period + direct labor + manufactured overhead - ending work in progress
Beginning work in progress= 0
Direct materials = beginning inventory + purchase - ending inventory= 58250
Direct labor= 14000
Manufactured overhead=Factory supervisor salary + Depreciation expense Factory building + Indirect materials= 8800 + 3700 + 1800= 14300
Ending work in progress= 0
Cost of good manufactured= 58250 + 14000 + 14300= $86550
People, in general, do not lend money to one another to buy a house or a car because: A. they do not know about the capacity of other people to repay their debts. B. of information problems. C. they do not know about the effort other people will provide to repay their debts. D. All of the above.
Answer: People, in general, do not lend money to one another to buy a house or a car because: D. All of the above.
Explanation: It all comes down to information problems, assuming that all participants fully know the financial capacity of others would lend money because there would be no uncertainty and risk.
That is why certain requirements are requested when requesting loans at a bank.
Interest-only loan (regular interest payments each year and principal at maturity). Chuck Ponzi has talked an elderly woman into loaning him $35 comma 000 for a new business venture. She has, however, successfully passed a finance class and requires Chuck to sign a binding contract on repayment of the $35 comma 000 with an annual interest rate of 12% over the next 15 years. Determine the cash flow to the woman under an interest-only loan, in which Ponzi will pay the annual interest expense each year and pay the principal back at the end of the contract. What is the amount of payment that the woman will receive at the end of years 1 through 14?
Answer:
Ans. From years 1 through 14 she will receive $4,200 and ending year 15 she will receive $39,200 (which is $35,000 of the loan plus $4,200 interest)
Explanation:
Hi, this works just like a bond with a coupon, so first we need to find the amount of interest that she is going to receive every year, at the end of the year, with an annual interest rate of 12%.
[tex]Interests=Loan*(interestRate)[/tex]
[tex]Interest=35,000*0.12=4,200[/tex]
So, that is what she will receive every year at the end of the year from yr1 through 14. in year 15 she will get $39,200, which is the interest + the principal, in our case, $35,000.
Best of luck.
Thumb Ink Inc. is a publishing company based in the United States. Its marketing and supply chain activities will add value when:
a. it dispatches new quality regulations to its vendors.
b. it switches to online media because they are widely used.
c. it copies the standards of other publishing companies.
d. it enters into joint ventures.
Answer:
b. it switches to online media because they are widely used.
Sheldon has the following year-end account balances: Accounts Receivable, $5,000; Supplies, $12,000; Equipment, $18,000; Accounts Payable, $17,000; Stockholders’ Equity, $43,000. The Cash account balance was not available at year-end. Given the account balances listed, the balance in the Cash account should be A : $95,000. B : $43,000. C : $25,000. D : $61,000.
Final answer:
The missing Cash account balance is calculated using the accounting equation Assets = Liabilities + Shareholders' Equity. Given the account balances, Cash is found to be $25,000.
Explanation:
The student has provided account balances for various items and is seeking to find the correct balance of the Cash account of a fictitious entity. To find the missing Cash account balance, you need to apply the basic accounting equation which states that Assets = Liabilities + Shareholders' Equity.
Here's the step-by-step calculation using the given account balances:
Sum of given Assets (excluding Cash) = Accounts Receivable ($5,000) + Supplies ($12,000) + Equipment ($18,000) = $35,000.
Total Liabilities = Accounts Payable ($17,000).
Shareholders' Equity = $43,000.
Subtracting the sum of Liabilities and Shareholders' Equity from the sum of Assets, we get the balance of the Cash account:
Cash = Total Assets - (Total Liabilities + Shareholders' Equity).
Inserting the given figures:
Cash = (Accounts Receivable + Supplies + Equipment + Cash) - (Accounts Payable + Shareholders' Equity)
Cash = ($35,000 + Cash) - ($17,000 + $43,000)
Cash = $35,000 + Cash - $60,000
Cash = Cash - $25,000
To isolate the value of Cash, we move all terms containing 'Cash' to one side:
Cash - Cash = -$25,000
Therefore, the balance in the Cash account should be $25,000.
Fritz Evans is the owner and operator of Be-The-One, a motivational consulting business.
At the end of its accounting period, December 31, 2013, Be-The-One has assets of $395,000
and liabilities of $97,000. Using the accounting equation, determine the following amounts:
a. Owner's equity as of December 31, 2013.
b. Owner's equity as of December 31, 2014, assuming that assets decreased by $65,000
and liabilities increased by $36,000 during 2014.
PE
Answer:
2013 Equity: 298,000
2014 Equity: 327,000
Explanation:
(A)
Assets = Liabilities + Equity
395,000 = 97,000 + Equity
395,000 - 97,000 = Equity
298,000 = Equity
(B)
if asset increase by 65,000
and liabilities increase by 36,000
(395,000 + 65,000) = (97,000 + 36,000) + Equity
460,000 = 133,000 + Equity
Equity = 460,000 - 133,000 = 327,000
In the AD partnership, Allen's capital is $140,000 and Daniel's is $40,000 and they share income in a 3:1 ratio, respectively. They decide to admit David to the partnership. Each of the following questions is independent of the others.
Refer to the information provided above. David directly purchases a one-fifth interest by paying Allen $34,000 and Daniel $10,000. The land account is increased before David is admitted. By what amount is the land account increased?
A. $40,000
B. $10,000
C. $36,000
D. $20,000
Answer: Option (A) is correct.
Explanation:
Given that,
Allen's capital is $140,000
Daniel's is $40,000
Income sharing Ratio = 3:1
David paid for a 1/5th stake in the partnership
Allen = $34,000 and Daniel = $10,000
Total amount paid by David = $44,000
Land account is increased before David is admitted
Therefore,
The value of entire entity = 5 × $44,000
= $220,000
Upward valuation on account of land revaluation = $220,000 - $180,000
= $40,000
Normative and positive statements
The following table contains statements that provide some analysis of policies that address breast cancer.
Categorize each of them as positive or normative.
Statement
Positive
Normative
Breast cancer is the fifth most common cause of cancer death.
For women aged 60 to 69, breast cancer screening significantly reduces breast cancer mortality.
Doctors should encourage women aged 60 to 69 to be screened for breast cancer.
The government should force doctors to encourage women aged 60 to 69 to be screened for breast cancer.
Answer:
1. Breast cancer is the fifth most common cause of cancer death - Positive statement
2. For women aged 60 to 69, breast cancer screening significantly reduces breast cancer mortality - Positive statement
3. Doctors should encourage women aged 60 to 69 to be screened for breast cancer - Normative statement
4. The government should force doctors to encourage women aged 60 to 69 to be screened for breast cancer - Normative statement
Final answer:
Explanation of positive and normative statements about breast cancer policies.
Explanation:
Normative:
Doctors should encourage women aged 60 to 69 to be screened for breast cancer.The government should force doctors to encourage women aged 60 to 69 to be screened for breast cancer.Positive:
Breast cancer is the fifth most common cause of cancer death.For women aged 60 to 69, breast cancer screening significantly reduces breast cancer mortality.Marlin Corporation reported pretax book income of $1,009,000. During the current year, the net reserve for warranties increased by $26,800. In addition, book depreciation exceeded tax depreciation by $100,900. Finally, Marlin subtracted a dividends received deduction of $15,900 in computing its current year taxable income. Marlin's current income tax expense or benefit would be:
Answer:
tax benefit
Explanation:
pretax income 1,009,000
permanent difference:
non-taxable dividend (15,900)
book taxable income: 993,100
temporary difference:
book exceeded tax depreicaiton 100,900
warrant liablity 26,800
Government Taxable income 1,120,800
journal entry:
tax expense for the book income
deferred tax benefit for the temporary difference
tax payable for the government taxable income
It is a tax benefit as in some point because, the warranties will be recognize as expense an the depreication will match at the end of the useful life, the company's book taxable income be lower in some point to balance the current difference.
Carlin Company, which uses net present value to analyze investments, requires a 10% minimum rate of return. A staff assistant recently calculated a $500,000 machine's net present value to be $86,400, excluding the impact of straight-line depreciation. FV of 1 (i=10%, n=5): 1.611 FV of a series of $1 cash flows (i=10%, n=5): 6.105 PV of $1 (i=10%; n = 5): 0.621 PV of a series of $1 cash flows (i=10%, n=5): 3.791 If Carlin ignores income taxes and the machine is expected to have a five-year service life, the correct net present value of the machine would be:
Answer:
The correct net present value of the machine would be $86,400
Explanation:
For computing the net present value, the discount factor, yearly cash inflows are required.
In the question, it is already mentioned that Carlin ignores income taxes, and for depreciation, income tax is to be considered. So, automatically the depreciation is also not be considered in calculating part which means that the net present value would remain the same.
Tatoo Inc. reported a net capital loss of $13,500 in 2018. The company had a net capital gain of $4,800 in 2016 and $3,500 in 2015. In 2017, although the company suffered a net operating loss, it had net capital gains of $1,500. What is the amount of Tatoo's capital loss carryover remaining after it applies the carryback?
Answer:
The amount of Tatoo's capital loss carryover remaining after it applies the carryback is $ 5200.
Explanation:
The net capital loss will be set off as :
2016 : $ 4800
2017 : $ 3500
Net carryback = $ 13500 - $ 4800 - $ 3500
= $ 5200
Therefore, the amount of Tatoo's capital loss carryover remaining after it applies the carryback is $ 5200.
An airline manufacturer incurred the following costs last month (in thousands of dollars):
a. Airplane seats . . . . . . . . . . . . . . . . . . . . . . . . . $220
b. Production supervisors' salaries . . . . . . . . . . . . . . $170
c. Depreciation on forklifts . . . . . . . . . . . . . . . . . . . . $110
d. Machine lubricants . . . . . . . . . . . . . . . . . . . . . $35
e. Factory janitors' wages . . . . . . . . . . . . . . . . . . . . . $60
f. Assembly workers' wages . . . . . . . . . . . . . . . . . . . $600
g. Property tax on corporate marketing office . . . . . $25
h. Plant utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $160
i. Cost of warranty repairs . . . . . . . . . . . . . . . . . . . . $230
j. Machine operators' health insurance . . . . . . . . . . $40
k. Depreciation on administrative offices . . . . . . . . . $60
l. Cost of designing new plant layout . . . . . . . . . . . . $165
m. Jet engines . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,700
Requirement
1. Assuming the cost object is an airplane, classify each cost as one of the following: direct material (DM), direct labor (DL), indirect labor (IL), indirect materials (IM), other manufacturing overhead (other MOH), or period cost. What is the total for each type of cost? (Enter amounts in thousands instead of dollars by omitting the $000s. Leave cells blank that do not require numerical inputs.)
DM DL IM IL MOH Period
a. Airplane seats . . . . . . . . . . . . . . .
b. Production supervisors' salaries .
c. Depreciation on forklifts . . . . . . . .
d. Machine lubricants . . . . . . . . . . .
e. Factory janitors' wages . . . . . . . .
f. Assembly workers' wages . . . . . .
Answer:
Instructions are listed below
Explanation:
- Direct materials are those materials and supplies that are consumed during the manufacture of a product, and which are directly identified with that product.
- Direct labor is production or services labor that is assigned to a specific product, cost center, or work order.
- Manufacturing overhead refers to indirect factory-related costs that are incurred when a product is manufactured.
- Period costs are not directly tied to the production process. Overhead or sales, general, and administrative (SG&A) costs are considered period costs. SG&A includes costs of the corporate office, selling, marketing, and the overall administration of company business.
In this exercise:
Direct Material:
Airplane seats . . . . . . . . . . . . . . . . . . . . . . . . . $220
Jet engines . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,700
Total= $1920
Direct labor:
Assembly workers' wages . . . . . . . . . . . . . . . . . . . $600
Machine operators' health insurance . . . . . . . . . . $40
Total= $640
Indirect labor:
Production supervisors' salaries . . . . . . . . . . . . . . $170
Factory janitors' wages . . . . . . . . . . . . . . . . . . . . . $60
Total= $230
MOH:
Machine lubricants . . . . . . . . . . . . . . . . . . . . . $35
Plant utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $160
Depreciation on forklifts . . . . . . . . . . . . . . . . . . . . $110
Total= $305
Period cost:
Property tax on corporate marketing office . . . . . $25
Cost of warranty repairs . . . . . . . . . . . . . . . . . . . . $230
Depreciation on administrative offices . . . . . . . . . $60
Cost of designing new plant layout . . . . . . . . . . . . $165
Total= $480
In general, individuals and nations should specialize in producing goods _________ other individuals or nations.
A. that they can produce more quickly than
B. that they can produce less quickly than
C. for which they have a lower opportunity cost compared to
D. for which they have a higher opportunity cost compared to
Answer: In general, individuals and nations should specialize in producing goods "C. for which they have a lower opportunity cost compared to" other individuals or nations.
Explanation: According to the theory of comparative advantages: Each country should specialize in what is most efficient. A comparative advantage is the ability of one country to produce using relatively less resources than another.
Fran buys 1,000 shares of stock issued by Miller Brewing. In turn, Miller uses the funds to buy new machinery for one of its breweries. In the terminology of macroeconomics....
a. Fran is investing; Miller is saving.
b. Fran is saving; Miller is investing.
c. Fran and Miller are both saving.
d. Fran and Miller are both investing.
Answer: d. Fran and Miller are both investing.
Explanation: An investment is the action of using a quantity of resources in a project or business to make a profit.
Both Fran and Miller are investing, because Fran wants to take advantage of his savings by buying the shares to make them grow and Miller wants to invest in his business, to be able to increase production or get a better result than he currently maintains.
Answer:
The correct answer is letter "B": Fran is saving; Miller is investing.
Explanation:
In Macroeconomics many points differentiate a saving from an investment. Savings are usually destined for short-term goals, allowing individuals to dispose of that money at any time. Investments are destined to be part of a long-term goal. Money cannot be cashed immediately out of investments since in most cases they are part of a production process, such as machinery in mines, for instance.
In that case, Fran is saving by buying 1000 shares of stock while Miller is investing by purchasing new machinery for one of its breweries.
Arrowhead Delivery Service is owned and operated by Gates Deeter. The following selected
transactions were completed by Arrowhead Delivery Service during August:
1. Received cash from owner as additional investment, $25,000.
2. Paid creditors on account, $3,750.
3. Billed customers for delivery services on account, $22,400.
4. Received cash from customers on account, $11,300.
5. Paid cash to owner for personal use, $6,000.
Indicate the effect of each transaction on the accounting equation elements (Assets,
Liabilities,
Owner's Equity, Drawing, Revenue, and Expense). Also indicate the specific
item within the accounting equation element that is affected. To illustrate, the answer to
(1) is shown below.
(1) Asset (Cash) increases by $25,000; Owner's Equity (Gates Deeter, Capital) increases
by $25,000.
Answer
(1) Asset (Cash) increases by 25,000;
Owner's Equity (Gates Deeter, Capital) increases by 25,000.
(2) Liaiblities (Accounts Payable) decrease by 3,750
Assets (Cash ) decrease by 3,750
(3) Assets (Account Receivable ) increase by 22,400
Owner's Equity (Services revenue) increases by 22,400.
(4) Assets (Cash) increase by 11,300
Assets (Account Receivables) decrease by 11,3000
(5) Owner's Equity (Gates Deeter, Capital) decreases by 6,000.
Assets (Cash ) decrease by 6,000
Explanation:
Each transacion must have at least two accounts to explain it.
Also we must make sure that the change we made balance
so we should check if Assets = Liab + Equity
with the values, increases and decreases we post.
Fred who is a Colts Fan paid $75 for a ticket to go to a Football game. He also spent an additional $30 for parking and bought dinner for $10. Fred took four hours off from a part time job that pays him $10 an hour to go to the game. Fred’s opportunity cost of going to the game is
(A) $155
(B) $145
(C) $105
(D) $75
(E) $135
Answer:
The correcto answer is A: $155
Explanation:
Giving the following information we need to calculate the net profit or loss:
$75 for a ticket
$30 for parking
$10 dinner
Fred took four hours off from a part-time job that pays him $10 an hour to go to the game.
Total cost of the game= $115
Total loss from nos going to work= $40
Total loss= $155
If he wouldn't have gone to the game, he would have saved $115 and gain $40
Country A can produce, at most, 50 olives or 25 pickles, or some combination of olives and pickles such as the 30 olives and 10 pickles it is currently producing. Country B can produce, at most, 130 olives or 65 pickles, or some combination of olives and pickles such as the 90 olives and 20 pickles it is currently producing.
a. Is there a basis for trade? If so, offer the two countries a deal they can't refuse.
Answer:
There is no basis for trade, as both country has the same opportunity cost. It will not produce benefit from trade
Explanation:
We will check if there is a comparative advantage between country's to know if there is benefit from trade:
Country A
olives opportunity cost:
25/50 = 1/2 = 0.50
Do an olive means renounce to half-unit of pickles
pickes opportunity cost:
50/25 = 2
Do a pickle cost 2 olives for country A
Country B
olives opportunity cost:
65/130 = 1/2 = 0.5
Do an olive means renounce to half-unit of pickles
pickles:
130/65 = 2
each pickle is produce at the expense of 2 olives
for planning control, and decision-making purpose:
(A) fixed costs should be converted to a per unit basis
(B) discretionary fixed costs should be eliminated
(C) variable costs should be ignored
(D) mixed costs should be separated into their variable and fixed components
Answer:
D) mixed costs should be separated into their variable and fixed components
Explanation:
A mixed cost is a cost that contains both a fixed cost component and a variable cost component. It is important to understand the mix of these elements of a cost, so that one can predict how costs will change with different levels of activity. Typically, a portion of a mixed cost may be present in the absence of all activity, in addition to which the cost may also increase as activity levels increase. As the level of usage of a mixed cost item increases, the fixed component of the cost will not change, while the variable cost component will increase. The formula for this relationship is
Find the amount to which $550 will grow under each of the following conditions. Do not round intermediate calculations. Round your answers to the nearest cent.
(A) 9% compounded annually for 5 years.
(B) 9% compounded semiannually for 5 years.
(C) 9% compounded quarterly for 5 years.
(D) 9% compounded monthly for 5 years.
Answer:
(A)Fv= $864.2
(B) Fv= $1302.05
(C) Fv= $2003.4
(D) Fv= $96817.21
Explanation:
Giving the following information:
Initial investment= $550
We will use the final value formula:
FV=Present value*(1+i)^n
(A) 9% compounded annually for 5 years.
Fv= 550*(1.09)^5=$864.2
(B) 9% compounded semiannually for 5 years.
Fv= 550*(1.09)^10= $1302.05
(C) 9% compounded quarterly for 5 years.
Fv= 550*(1.09)^15= $2003.4
(D) 9% compounded monthly for 5 years.
Fv= 550*(1.09)^60=$96817.21
Healthy Foods Inc. sells 60-pound bags of grapes to the military for $15 a bag. The fixed costs of this operation are $90,000, while the variable costs of grapes are $0.15 per pound. a. What is the break-even point in bags? (Round your answer to 2 decimal places.) b. Calculate the profit or loss (EBIT) on 14,000 bags and on 35,000 bags. c. What is the degree of operating leverage at 21,000 bags and at 35,000 bags? (Round your answers to 2 decimal places.) d. If Healthy Foods has an annual interest expense of $17,000, calculate the degree of financial leverage at both 21,000 and 35,000 bags. (Round your answers to 2 decimal places.) e. What is the degree of combined leverage at both 21,000 and 35,000 bags? (Round your answers to 2 decimal places.)
Answer:
BEP units: 15,000 60-pounds bags
(B)
14,000 generates 6,000 loss
35,000 generates 120,000 net
(C) operating leverage: 2
(D) financial leverage: 1.63
(E) combined leverage: 3,26
Explanation:
[tex]\frac{Contribution \: Margin}{Sales \: Revenue} = Contribution \: Margin \: Ratio[/tex]
[tex]Sales \: Revenue - Variable \: Cost = Contribution \: Margin[/tex]
60 pounds sales price = $ 15
60 pound cost: 60 x 0.15 = $ 9
Contribution Margin 6
[tex]\frac{Fixed\:Cost}{Contribution \:Margin} = Break\: Even\: Point_{units}[/tex]
Fixed Cost 90,000
BEP units: 15,000
(B) profit at given level:
sales x margin - fixed cost = net profit
14,000 x 6 - 90,000 = (6,000)
35,000 x 6 - 90,000 = 120,000
(C) operating leverage: change in EBIT / change in sales
income at 21,000 x 6 - 90,000 = 36,000
EBIT change:
120,000/36,000 = 3 + 1/3
Slaes change:
35,000/21,000 = 1 + 2/3
operating leverage:
(3 + 1/3) / (1 + 2/3) = 2
(d) financial leverage
change in net income:
(120,000 - 17,000) / (36,000 - 17,000)
103,000 / 19,000 = 103/19
change in EBIT 3 + 1/3 (already calculate
(103/19) / (3+1/3) = 1.626315789
(E) combined
2 x 1.626315789 = 3,252631578
Final answer:
The break-even point for Healthy Foods Inc. is 15,000 bags. EBIT is a loss of $4,000 at 14,000 bags and a profit of $120,000 at 35,000 bags. Degree of operating leverage and degree of financial leverage, as well as the degree of combined leverage, can be calculated at different quantities of bags sold, incorporating the fixed costs and interest expenses accordingly.
Explanation:
To calculate the break-even point in bags for Healthy Foods Inc., we first need to determine the contribution margin per bag. Since the variable cost is $0.15 per pound and each bag is 60 pounds, the variable cost per bag is 60 * $0.15 = $9. Therefore, the contribution margin per bag is the selling price per bag minus the variable cost per bag, which is $15 - $9 = $6 per bag. The break-even point in bags can then be calculated by dividing the total fixed costs by the contribution margin per bag, i.e., $90,000 / $6 = 15,000 bags.
For EBIT calculations, we can determine the profit or loss by multiplying the number of bags sold by the contribution margin per bag, and then subtracting the fixed costs. At 14,000 bags, EBIT is (14,000 * $6) - $90,000 = -$4,000, indicating a loss. At 35,000 bags, EBIT is (35,000 * $6) - $90,000 = $120,000, which is a profit.
The degree of operating leverage (DOL) can be calculated as Q * (P - V) / (Q * (P - V) - F), where Q is the quantity sold, P is the price per unit, V is the variable cost per unit, and F is the fixed costs. At 21,000 bags, DOL is 21,000 * ($15 - $9) / (21,000 * ($15 - $9) - $90,000). At 35,000 bags, the calculation would be similar with the respective quantities.
For the degree of financial leverage (DFL), we include the interest expense in the calculations. DFL is calculated as EBIT / (EBIT - interest expenses), so for 21,000 and 35,000 bags sold, we would calculate it using the previously found EBIT values and subtract the annual interest expense of $17,000.
Finally, the degree of combined leverage (DCL) is the product of DOL and DFL, which shows the combined effect of operating and financial leverage on earnings per share, calculated for both 21,000 and 35,000 bags, rounding to two decimal places.
The average capital investments for 2006 were:
Jones......................................................................... $100,000
King........................................................................................ 200,000
Lane................................................................................. 300,000
How much of the $90,000 partnership profit for 2006 should be allocated to Jones?
A)$15,000
B)$27,000
C)$30,000
D)$33,000
Answer:
A)$15,000
Explanation:
jones 100,000
king 200,000
lane 300,000
Total 600,000
Assuming profit are distributed based on capital investment, jones will receive:
100,000/600,000 = 1/6 of the profit
proft x jones ratio = allocate income to Jones
90,000 x 1/6 = 15,000
This will be the amount of profit attributable to Jones.
The following is an account for a production department, showing its costs for one month: Work in Process Inventory Beginning Balance 5,600 Completed and transferred out 50,010 Direct materials 21,800 Direct labor 16,400 Overhead 11,000 Ending Balance 4,790 Assume that materials are added at the beginning of the production process and that direct labor and overhead are applied uniformly. If the started and completed units cost $42,050, what was the cost of completing the units in the beginning Work in Process inventory?
Answer: $7,960
Explanation:
Given that,
Beginning WIP Inventory balance = 5,600
Completed and transferred out = 50,010
Direct materials = 21,800
Direct labor = 16,400
Overhead = 11,000
Ending Balance = 4,790
Started and completed units cost = $42,050
Therefore,
Cost of completing the units in the beginning WIP inventory:
= Completed and transferred out - Cost of Started and completed units
= $50,010 - $42,050
= $7,960
Answer:
The cost of completing the units in the beginning Work in Process inventory is $7,960
Explanation:
The computation of the beginning Work in Process inventory is shown below:
= Cost of Completed and transferred out - started and completed units cost
= $50,010 - $42,050
= $7,960
All other information which is mentioned in the question is not relevant. Hence, it is not to be considered in the computation part.
Since we have to compute the completing units so we considered the above two things only.
This information relates to Sunland Company for the year 2017. Retained earnings, January 1, 2017 $83,080 Advertising expense 2,232 Dividends 7,440 Rent expense 12,896 Service revenue 71,920 Utilities expense 2,976 Salaries and wages expense 37,200 After analyzing the data, prepare an income statement for the year ending December 31, 2017.
Answer:
Net Income : $16.616
Retained Earnings: $92.256
Please see details below:
Explanation:
Income Statement 2017
Sales $71.920
Advertising Expenses -$2.232
Miscellaneous Expenses -$50.096
Utilities Expenses -$2.976
Net Income $16.616
Retained Earnings Report
Opening retained earnings $ 83.080
Add: Net Income $ 16.616
Subtotal $ 99.696
Less: Dividens -$ 7.440
Total $ 92.256
A company had inventory on November 1 of 5 units at a cost of $25 each. On November 2, they purchased 15 units at $27 each. On November 6 they purchased 11 units at $30 each. On November 8, 12 units were sold for $60 each. Using the LIFO perpetual inventory method, what was the value of the inventory on November 8 after the sale?
Answer:
Total value of sold goods= $357
Total value of inventory (after Nov 8)= $503
Explanation:
Giving the following information we need to calculate the value of inventory:
November: 5 units at a cost of $25 each.
On November 2:15 units at $27 each.
On November 6:11 units at $30 each.
On November 8: 12 units were sold for $60 each.
The compañy uses LIFO (last in first out) inventory
11 units at $30= $330
1 unit at $27= $27
Total value of sold goods= $357
Total value of inventory=5u*25+14*27= $503
The asset, liabilities, and equities of Damon Design Studio have the following balances at December 31, 2018. The retained earnings was 39,000 at the beginning of the year. At year end, common stock was $ 13,000 and dividends were $ 57,000.Notes Payable $14,000Rent expense 23,000Cash 3,200Office supplies 5,100Salaries expense 65,000Property tax expense 2,200Office furniture 48,400Utilities expense 7,200Account payable 3,600Service revenue 154,600Account receivable 9,300Miscellaneous expense 3,800(a) Preparing the statement of retained earning(b) Prepare the statement of retained earning for Damon Design Studio for the year ending December 31, 2018.
Answer:
Explanation:
For computing the retained earning ending balance, first, we have to compute the net income. So, the calculation is shown below:
= Service revenue - salaries expense - property tax expense - utilities expense - miscellaneous expense - rent expense
= $154,600 - $65,000 - $2,200 - $7,200 - $3,800 - $23,000
= $53,400
So, the net income would be $53,400
Now, we have to find the ending retained earning balance which equals to
= Beginning retained earning balance + net income - dividend paid
= $39,000 + $53,400 - $57,000
= $35,400
The preparation of the statement of retained earning is presented in the spreadsheet. Kindly find the attachment below:
The statement of retained earnings for Damon Design Studio for the year ending December 31, 2018, starts with an opening balance of $39,000, adds a net income of $53,400 and subtracts dividends of $57,000, resulting in an ending balance of $35,400.
Explanation:Preparing the Statement of Retained Earnings for Damon Design StudioTo prepare the statement of retained earnings for Damon Design Studio for the year ending December 31, 2018, we must consider the beginning balance of retained earnings, add the net income (or loss), and subtract any dividends paid during the year.
The beginning retained earnings is given as $39,000. We will calculate net income by subtracting total expenses from the total service revenue. Here's the detailed calculation:
Service Revenue: $154,600Total Expenses (Rent expense + Salaries expense + Property tax expense + Utilities expense + Miscellaneous expense): $23,000 + $65,000 + $2,200 + $7,200 + $3,800 = $101,200Net Income: Service Revenue - Total Expenses = $154,600 - $101,200 = $53,400Retained Earnings at the beginning of the year: $39,000
Plus Net Income: $53,400
Minus Dividends: $57,000
Retained Earnings at the end of the year: $39,000 + $53,400 - $57,000 = $35,400
Statement of Retained Earnings SummaryDamon Design Studio
Retained Earnings, January 1, 2018: $39,000
Add: Net Income for 2018: $53,400
Less: Dividends Paid in 2018: $57,000
Retained Earnings, December 31, 2018: $35,400
Galehouse Gas Stations Inc. expects sales to increase from $1,670,000 to $1,870,000 next year. Galehouse believes that net assets (Assets − Liabilities) will represent 55 percent of sales. His firm has an 9 percent return on sales and pays 25 percent of profits out as dividends. a. What effect will this growth have on funds? b. If the dividend payout is only 5 percent, what effect will this growth have on funds?
The growth in sales is expected to increase funds by approximately $986,425.
Step 1
To determine the effect of the sales growth on funds, we first calculate the net assets and then assess the change in funds.
Net Assets:
Net Assets = 55% of Sales
= 0.55 * $1,870,000
= $1,028,500
Step 2
Return on Sales (ROS):
ROS = 9% of Sales
= 0.09 * $1,870,000
= $168,300
Step 3
Dividends Paid:
Dividends = 25% of Profits
= 0.25 * ROS
= 0.25 * $168,300
= $42,075
Step 4
Change in Funds:
Change in Funds = Net Assets - Dividends Paid
= $1,028,500 - $42,075
= $986,425
Therefore, the growth in sales from $1,670,000 to $1,870,000 will result in an increase in funds by $986,425.
The increase in sales is expected to boost funds by $986,425, calculated by subtracting dividends paid from the net assets.
Complete question : Galehouse Gas Stations Inc. expects sales to increase from $1,670,000 to $1,870,000 next year. Galehouse believes that net assets (Assets − Liabilities) will represent 55 percent of sales. His firm has an 9 percent return on sales and pays 25 percent of profits out as dividends. What effect will this growth have on funds?
Costs Classification a. Annual picnic for plant employees and their families Period costs-administrative expense b. Cost of fabric used by clothing manufacturer Product costs-direct materials cost c. Cost of plastic for a toy manufacturer Product costs-direct materials cost d. Cost of sewing machine needles used by a shirt manufacturer Product costs-factory overhead cost e. Cost of television commercials
Answer:
Instructions are listed below
Explanation:
- Direct materials are those materials and supplies that are consumed during the manufacture of a product, and which are directly identified with that product.
- Direct labor is production or services labor that is assigned to a specific product, cost center, or work order.
- Manufacturing overhead refers to indirect factory-related costs that are incurred when a product is manufactured.
- Period costs are not directly tied to the production process. Overhead or sales, general, and administrative (SG&A) costs are considered period costs. SG&A includes costs of the corporate office, selling, marketing, and the overall administration of company business.
- Product costs are the direct costs involved in producing a product. A manufacturer, for example, would have production costs that include: Direct labor, Raw materials, Manufacturing supplies, Overhead that's directly tied to the production facility such as electricity.
In this exercise:
a. Annual picnic for plant employees and their families: Period costs-administrative expense.
b. Cost of fabric used by clothing manufacturer: Product costs- DM
c. Cost of plastic for a toy manufacturer: Product costs-DM
d. Cost of sewing machine needles used by a shirt manufacturer: Product costs- MOH
e. Cost of television commercials: Period cost - Selling
Preston Company manufactures a product with a unit variable cost of $140 and a unit sales price of $264. Fixed manufacturing costs were $720,000 when 10,000 units were produced and sold. The company has a one-time opportunity to sell an additional 3,000 units at $210 each in a foreign market which would not affect its present sales. If the company has sufficient capacity to produce the additional units, acceptance of the special order would affect net income as follows: Select one: a. Income would increase by $156,000. b. Income would decrease by $162,000. c. Income would increase by $210,000. d. Income would increase by $6,000.
Answer:
c. Income would increase by $210,000.
Explanation:
For computing the effect of net income, first we have to compute the net income which is shown below:
Net income = Sales - variable cost - fixed cost
where,
Sales = Number of units × selling price per unit
= 10,000 units × $264
= $2,640,000
Variable cost = Number of units × variable cost per unit
= 10,000 units × $140
= $1,400,000
And, the fixed cost is $720,000
Now put these values to the above formula
So, the value would equal to
= $2,640,000 - $1,400,000 - $720,000
= $520,000
If 3,000 additional units are sell
Then, increased in the net income would be
= Additional units × (New Selling price - variable cost)
= 3,000 units × ($210 - $140)
= 3,000 units × $70
= $210,000
Which describes the role of automatic stabilizers in the economy? Automatic stabilizers have a similar impact as discretionary fiscal policy but occur automatically, without action by the government. Automatic stabilizers increase aggregate demand during recessions and reduce aggregate demand during expansions. Automatic stabilizer
Answer: Automatic stabilizers have a similar impact as discretionary fiscal policy but occur automatically, without action by the government.
Explanation: Automatic stabilizers refers to those factors which comes into act automatically when the economy faces any kinds of problems. Usually these includes the tax and transfer systems in the economy that affects the demand and supply of the commodities.
These factors comes into force without the direct intervention of the government.
Hence from the above we can conclude that the correct option is first statement.
Automatic stabilizers are mechanisms in the economy that automatically adjust government spending and taxes based on economic conditions. During recessions, they boost aggregate demand, and during expansions, they reduce aggregate demand. They act as shock absorbers, reducing the impact of economic bumps.
Explanation:Role of Automatic Stabilizers in the EconomyAutomatic stabilizers are a part of fiscal policy in the economy. They are built-in mechanisms that automatically adjust government spending and taxes based on the state of the economy, without requiring any specific action from the government. These stabilizers work to stabilize the economy during economic fluctuations. For example, during a recession, automatic stabilizers increase government spending and reduce taxes, thereby boosting aggregate demand. Conversely, during an economic expansion, they decrease government spending and increase taxes, which helps to reduce aggregate demand. Automatic stabilizers act like shock absorbers in a car, reducing the impact of economic bumps, although they don't eliminate them completely.
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Initial sale price of common stock Hudson-Perry Recordings Inc has one issue of preferred stock and one issue of common stock outstanding. Given their stockholders' equity account that follows, determine the original price per share at which the firm sold its single issue of common stock. Stockholders' Equity ($000) Preferred stock $ 228 Common stock ($ 0.24 par, 1 comma 402 comma 000 shares outstanding) 336 Paid-in capital in excess of par on common stock 19 comma 466 Retained earnings 1 comma 803 Total stockholders' equity Modifying $ 21 comma 833 with double underline The original price per share is $ nothing. (Round to the nearest cent.)
Answer:
the original price from the issue of shares: 14.12 dollars
Explanation:
It will be the sum of the common stock and the paid-in capital in excess of par:
The values are expresses as thousand, so we multiply by 1,000
common stock 0.24 x 1,402,000 = 336,480
additional paid-in 19,466 x 1,000 = 19,466,000
Total 19,802,480
Price per share: 19,802,480 / 1,402,000 = 14,12410 = $14.12 This will be the original price of the price.