Answer:
18.0
Explanation:
Net income = profit margin * sales = 5.4% * 4 million = 0.216 million
Equity = total assets - debt = 2 million - 800,000 = 1.2 million
ROE = net income / equity = 0.216 / 1.2 = 18%
So answer is 18.0%
Mobility Partners makes wheelchairs and other assistive devices. For years it has made the rear wheel assembly for its wheelchairs. A local bicycle manufacturing firm, Trailblazers, Inc., offered to sell these rear wheel assemblies to Mobility. If Mobility makes the assembly, its cost per rear wheel assembly is as follows (based on annual production of 1,800 units):
Direct materials $25
Direct labor 53
Variable overhead 16
Fixed overhead 47
Total $141
Trailblazers offered to sell the assembly to Mobility for $110 each. The total order would amount to 2,000 rear wheel assemblies per year, which Mobility's management will buy instead of make if Mobility can save at least $10,000 per year. Accepting Trailblazers's offer would eliminate annual fixed overhead of $40,000.
Required:
a. Prepare a schedule that shows the differential costs on the 2,000 rear wheel assemblies order.
b. Should Mobility make rear wheel assemblies or buy them from Trailblazers?
Answer:
a. The preparation of schedule that shows the differential costs is shown below:-
b. Decision : Make
Explanation:
Particulars Make the Buy from Differential
Wheels trailblazers cost
Offer of
trailblazer $220,000 $220,000 Higher
(2,000 × $110)
Material cost $50,000 $50,000 Lower
($25 × 2,000)
Labor cost $106,000 $106,000 Lower
($53 × 2,000)
Variable
overhead $32,000 $32,000 Lower
($16 × 2,000)
Fixed
overhead $94,000 $54,000 $40,000 Lower
($47 × 2,000) ($94,000 - $40,000)
Total cost $282,000 $274,000 ($8,000) Lower
Working Note:-
1) Fixed overhead applied = $47 × 2,000 = $94000
Decision : Make
Total saving from accepting the accepting the offer of trailblazer = $8,000
Cost saving required to accept the offer of trailblazer = $10,000
Decision - Make (Since actual savings are less than savings required by $2,000)
Miles Company, a wholesaler, budgeted the following sales for the indicated months: June July August Sales on account $2700000 $2760000 $2850000 Cash sales 270000 300000 390000 Total sales $2970000 $3060000 $3240000 All merchandise is marked up to sell at its invoice cost plus 20%. Merchandise inventories at the beginning of each month are at 30% of that month's projected cost of goods sold. The cost of goods sold for the month of June is anticipated to be $2079000. $2376000. $2475000. $2284615.
Answer:
$2475000
Explanation:
The computation of the cost of goods sold for the June month is shown below:
As it is given that total sales of June is $2,970,000
And, the marked up is cost plus 20%
So based on the above information, the cost of goods sold is
= $2,970,000 × 100 ÷ 120
= $2,475,000
Therefore, all the other information which is given is not relevant. Hence, ignored it
The cost of goods sold for the month of June can be calculated by finding 70% of the projected cost of goods sold. The projected cost of goods sold for June is $2079000, so 70% of that is $1455300.
Explanation:The cost of goods sold for the month of June can be calculated by finding 70% of the projected cost of goods sold. The projected cost of goods sold for June is $2079000, so 70% of that is $2079000 x 0.7 = $1455300. This is the cost of goods sold for the month of June.
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A company is considering the following alternatives:
Revenues: Alternative 1 $240,000 & Alternative 2 $240,000
Variable costs: Alternative 1 $120,000 & Alternative 2 $140,000
Fixed costs: Alternative 1 $70,000 & Alternative 2 $70,000
Required:
1. Which of the following are relevant in choosing between the alternatives?
A) Revenues
B) Variable costs and fixed costs
C) variable costs
D) Fixed costs
Answer:
The answer is C.
Explanation:
Variable cost is a relevant cost. Variable cost varies with the output i.e the total number of units produced. For example in a perfect competitive market, for a firm to be able to operate its revenue/profit must cover variable costs. Also, its revenue is dependent on the number of units produced which is directly proportional to variable cost.
Fixed cost is fixed and it is not a relevant cost in making decision. It is a sunk cost. Whether a business produces or not, fixed cost will be incurred.
On March 1, 2021, Beldon Corporation purchased land as a factory site for $60,000. An old building on the property was demolished, and construction began on a new building that was completed on December 15, 2021. Costs incurred during this period are listed below: Demolition of old building $ 4,000 Architect’s fees (for new building) 12,000 Legal fees for title investigation of land 2,000 Property taxes on land (for period beginning March 1, 2021) 3,000 Construction costs 500,000 Interest on construction loan 5,000 Salvaged materials resulting from the demolition of the old building were sold for $2,000. Required: Determine the amounts that Beldon should capitalize as the cost of the land and the new building.
Answer:
The amount that Beldon should capitalize as the cost of the land is $64,000 and as the cost of the new building is $517,000.
Explanation:
Capitalized cost of land
Purchase price $60,000
Demolition of old building $4,000
Less: Sale of materials $2,000 $2,000
Legal fees for title investigation $2,000
Total cost of land $64,000
Capitalized cost of building :
Construction costs $500,000
Architect's fees $12,000
Interest on construction loan $5,000
Total cost of building $517,000
Therefore, The amount that Beldon should capitalize as the cost of the land is $64,000 and as the cost of the new building is $517,000.
The costs capitalized for the land and new building by Beldon Corporation are $67,000 and $517,000, respectively.
Explanation:Beldon Corporation can capitalize the costs related to the purchase and preparation of land and the construction of the new building. The cost of the land includes the purchase price of $60,000, demolition costs for the existing building ($4,000), legal fees for title investigation ($2,000), and property taxes from the purchase date March 1, 2021 ($3,000). However, the $2000 from the sale of salvaged materials should be deducted from the land cost resulting in a final capitalized land cost of $67,000.
The capitalized cost of the new building includes the construction costs of $500,000, architect's fees ($12,000), and interests on the construction loan ($5,000). This results in a total capitalized building cost of $517,000.
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As of December 31, 2021, Warner Corporation reported the following:
Cash dividends payable $20,000
Treasury stock 600,000
Paid-in capital—share repurchase 20,000
Common stock and other paid-in capital accounts 4,000,000
Retained earnings 3,000,000
What was shareholders' equity as of December 31, 2021?
Answer:
$6,240,000
Explanation:
Stockholders Equity Includes the Add-in-capital par value, Add-in-capital excess value of Common and Preferred, Net income accumulated value and dividends.
Stockholders' equity
Common Stock and Paid-in-capital common $4,000,000
Retained Earning $3,000,000
Treasury Stock ($600,000)
Paid-in capital—share repurchase $20,000
Total stockholders' equity $6,420,000
Treasury stock is the repurchased stock, which is a contra equity account. It need to be deducted from the equity
Final answer:
Shareholders' equity for Warner Corporation as of December 31, 2021, was calculated by adding common stock and other paid-in capital accounts to retained earnings and then subtracting treasury stock and cash dividends payable, resulting in total equity of $6,380,000.
Explanation:
To calculate the shareholders' equity of Warner Corporation as of December 31, 2021, we need to sum up the common stock, additional paid-in capital, and retained earnings, and then subtract any treasury stock and dividends payable. Cash dividends payable and treasury stock are subtracted because they represent obligations of the company and are not part of equity. Paid-in capital related to share repurchases would typically already be included in the treasury stock figure and would also not be part of equity.
Here is the calculation:
Common stock and other paid-in capital accounts: $4,000,000Retained earnings: $3,000,000Treasury stock: -$600,000Cash dividends payable: -$20,000Shareholders' Equity = (Common stock and other paid-in capital accounts) + (Retained earnings) - (Treasury stock) - (Cash dividends payable).
Shareholders' Equity = $4,000,000 + $3,000,000 - $600,000 - $20,000 = $6,380,000.
Thus, the shareholders' equity for Warner Corporation as of December 31, 2021, was $6,380,000.
Lopez Company has a single employee, who earns a salary of $192,000 per year. That employee is paid on the 15th and last day of each month. On January 15, Lopez is subject to the following payroll taxes: FICA–Social Security Taxes (at 6.2% of the first $118,500 each employee earns in the calendar year), FICA–Medicare Taxes (at 1.45%), FUTA (at 0.6% of the first $7,000 each employee earns in the calendar year), and SUTA (at 5.4% of the first $7,000 each employee earns in the calendar year). The journal entry to record the employer's payroll tax expense and related liabilities would include a debit to:
The employer's payroll tax expense on January 15th would include the monthly allocation of the annual FICA-Social Security Tax, the single month's FICA-Medicare Tax, and the single month's FUTA and SUTA taxes.
Explanation:The employee's annual salary at Lopez Company is $192,000, which means the monthly salary is $192,000/12 = $16,000. Given that Social Security tax applies to the first $118,500 of an employee's annual earnings, the Social Security tax for this employee would be $118,500 * 6.2% = $7,347 for the year, or $612.25 per month. The Medicare tax rate is applied to all earnings, so it is $16,000 * 1.45% = $232 per month. In terms of FUTA and SUTA, both taxes only apply to the first $7,000 of an employee's annual earnings, so the employer's liability for these taxes will be entirely covered in the first month of the year at rates of 0.6% (FUTA) and 5.4% (SUTA). Therefore, on January 15th, the employer's payroll tax expense would incur a debit to Payroll Tax Expense of the sum of all these monthly taxes.
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How would you define the geographic and product markets of large healthcare organizations such as the Mayo Clinic, Cleveland Clinic, Kaiser Permanente, and Johns Hopkins? What are the barriers that keep new competitors from entering those markets? (Showalter, 20170222, p. 496) Showalter, S. (20170222). The Law of Healthcare Administration, Eighth Edition, 8th Edition [VitalSource Bookshelf version]. Retrieved from vbk://9781567938791 Always check citation for accuracy before use.
Geographic markets for products are limited to a greater or lesser extent by the cost of transporting the product and legal barriers, such as those imposed by entry regulation that may prohibit trade among jurisdictions. Transportation costs of shipment between two areas may create a differential in prices in the two areas.
Explanation
The health costs in these organisations are also too high which can only be borne by the elite class, thereby giving them a position of monopoly power in the healthcare market.One must define first the market for the product of interest and second, the geographic market in which trade in the product occurs.
For both product and geographic market definitions, two types of substitutability are relevant:
Demand substitutability
Supply substitutability
Demand substitutability depends upon the extent to which consumers of the good or service are able to switch to substitutes for that good or service in response to a price increase.
In contrast, supply substitutability depends upon the extent to which existing providers could expand output, and/or firms not currently producing the good or service could enter the market for that good or service. In specific applications, the product market is defined first.
Then, given a definition of product, the geographic area over which commerce in the product takes place is examined.
When the cost of transportation is high relative to cost of production, geographic markets tend to be small; the converse holds true when relative transportation cost is low.
Choosing which percent rule to apply depends on the comparative risks of under- or overstating the size of the market.
Barriers for new competitors are:
Price: A successful company with a large market share may be able to charge prices substantially higher than what customers would be willing to pay if they had more options. If a competitor tries to enter the market, the established company can often afford to lower its own prices below what the competitor can match.
Contractual: Some barriers to entry may be illegal and may violate antitrust regulation. A new competitor entering the same market could find it difficult or impossible to get its products into any stores and negotiation with existing distributors for prices.
Location: Companies with the ability to operate in any part of the world can create a barrier to competition by locating manufacturing facilities in places with much lower labor costs or regulatory requirements.
Regulatory: Regulations are intended to serve the public good by promoting better safety and environmental standards or promoting competition.
The geographic market of large healthcare organizations refers to their operational regions, while the product market includes the range of healthcare services they offer. Barriers to entry for new competitors include high start-up costs, regulatory requirements, and established reputations.
Explanation:The geographic market of large healthcare organizations like the Mayo Clinic, Cleveland Clinic, Kaiser Permanente, and Johns Hopkins can be defined as the region or area in which these organizations operate and provide healthcare services. These organizations usually have a national or even international presence, serving patients from different parts of the country or even around the world.
The product market of these healthcare organizations refers to the range of healthcare services and products they offer. This can include medical treatments, surgeries, diagnostic services, preventive care, specialized clinics, and research initiatives.
Barriers that keep new competitors from entering these markets include:
High start-up costs and capital requirements: Establishing large healthcare organizations requires significant financial investments in infrastructure, technology, equipment, and skilled personnel.Regulatory requirements and compliance: Healthcare organizations need to comply with various regulations and licensing requirements imposed by government agencies at local, state, and national levels.Established reputation and brand recognition: Large healthcare organizations like Mayo Clinic, Cleveland Clinic, Kaiser Permanente, and Johns Hopkins have built strong reputations and brand recognition over the years, making it difficult for new competitors to gain trust and attract patients.Learn more about Barriers to Entry here:https://brainly.com/question/35090304
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The exchange rate at the beginning of a year between the Indian Rupee (R) and the U.S. dollar is R43.125/$. The annual inflation rates in India and in the United States are 19 percent and 3 percent respectively. What would be the new exchange rate at the end of the year? R37.327/$ R0.0267/$ R49.8224/$ $37.327/R
Answer:
The correct answer is R49.8224/$.
Explanation:
According to the scenario, the computation of the given data are as follows:
Exchange rate at beginning = R43.125/$
Inflation rate in India = 19%
Inflation rate in U.S. = 3 %
So, we can calculate the New exchange rate by using following formula:
New exchange rate = Beginning exchange rate × (Inflation A ÷ Inflation B)
= R 43.125 × (1.19 ÷ 1.03)
= R 49.8224/$
Exercise 24-3 Payback period computation; straight-line depreciation LO P1 A machine can be purchased for $140,000 and used for five years, yielding the following net incomes. In projecting net incomes, straight-line depreciation is applied, using a five-year life and a zero salvage value. Year 1 Year 2 Year 3 Year 4 Year 5 Net income $ 9,500 $ 23,500 $ 64,000 $ 35,500 $ 94,000
Answer:
Year 1 Year 2 Year 3 Year 4 Year 5 Net income $ 9,500 $ 23,500 $ 64,000 $ 35,500 $ 94,000
Explanation:
look p1 a machine
The slope of an isocost line ________ and equals the negative of ________. Select one: a. is constant; the ratio of the marginal products b. decreases as we move down the line; the ratio of the marginal products c. is constant; the ratio of input prices d. increases as we move down the line; the ratio of input prices
Final answer:
The slope of an isocost line is constant and equals the negative of the ratio of input prices. This slope does not change as we move down the line, highlighting that the expenditure on inputs remains constant.
Explanation:
The slope of an isocost line is constant and equals the negative of the ratio of input prices. An isocost line represents all combinations of inputs that a firm can purchase for a given total cost. As the price of one input increases, the isocost line becomes flatter, indicating a shift towards a more intensive use of the other, relatively cheaper input. Notably, isocost lines do not change slope as we move along them because they represent constant expenditure levels; therefore, the slope remains the same regardless of the quantities of inputs.
Cost minimization requires the tangency between an isoquant and an isocost line, signifying that the input price ratio must equal the marginal rate of technical substitution (MRTS), which is the amount of one input required to replace a decrease in another input while holding output constant. This also implies that the marginal rate of technical substitution (the slope of the isoquant) must equal the negative of the ratio of input prices (the slope of the isocost line) at the point of tangency for efficient production.
"In the economy of OKC in 2008, consumption was $3000, GDP was $5500, government purchases were $1000, imports were $2000, and investment was $1000. What were OKC’s exports in 2008?"
Answer:
Expert will be equal to $2500
Explanation:
We have given consumption = $3000
GDP is given $5500
Government purchase = $1000
Import = $2000
There is an investment of $1000
We have to find the export
We know that GDP is given by
GDP = consumption + investment + government purchase + export- import
5500 = 3000+1000+1000+export - 1000
Export = $2500
So expert will be equal to $2500
Which of the following would, generally, indicate an improvement in a company's financial position, holding other things constant? a. The EBITDA coverage ratio increases. b. The current and quick ratios both decline. c. The total assets turnover decreases. d. The TIE declines. e. The DSO increases.
Answer:
The correct answer is letter "A": The EBITDA coverage ratio increases.
Explanation:
The Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) ratio is an accounting indicator that measures the profitability of a company. It is calculated by subtracting the costs of goods sold and administrative expenses from the firm's income. The EBITDA is typically used to value the capacity for generating benefits of an entity considering only its productive activity because it indicates the returns obtained from the direct exploitation of the business.
Therefore, if the EBITDA of a firm increases it is because its financial position has possibly increased.
Final answer:
An increase in the EBITDA coverage ratio typically suggests an improvement in a company's financial position by indicating better earnings relative to its operating costs. Other options such as declining liquidity ratios, asset turnover, and ability to cover interest expenses generally signify financial weakness.
Explanation:
Among the given options, an increase in the EBITDA coverage ratio would generally indicate an improvement in a company's financial position, holding other things constant. This ratio measures a company's ability to pay off its operating expenses, not including taxes, interest, depreciation, and amortization with its operating profit. A higher EBITDA coverage ratio suggests the company is generating sufficient earnings to cover its operating costs, which is a positive sign of financial health. Option A
In contrast, declining current and quick ratios imply weakening short-term liquidity, a decrease in total assets turnover indicates less efficiency in using assets to generate revenue, a decline in the TIE (times interest earned) suggests a decrease in the ability to cover interest expenses, and an increase in the DSO (days sales outstanding) implies slower collection of receivables, potentially affecting cash flow.
On December 31, 2020, Dow Steel Corporation had 670,000 shares of common stock and 37,000 shares of 7%, noncumulative, nonconvertible preferred stock issued and outstanding. Dow issued a 4% common stock dividend on May 15 and paid cash dividends of $470,000 and $76,000 to common and preferred shareholders, respectively, on December 15, 2021.
On February 28, 2021, Dow sold 51,000 common shares. In keeping with its long-term share repurchase plan, 4,000 shares were retired on July 1. Dow's net income for the year ended December 31, 2021, was $2,450,000. The income tax rate is 25%.
Required:
Compute Dow's earnings per share for the year ended December 31, 2021. (Do not round intermediate calculations. Enter your answers in thousands. Round "Earnings per share" answer to 2 decimal places.)
Answer:
Earnings per share is $3.21
Explanation:
The calculation of weighted average number of shares to be used in EPS computation is provided thus:
Initial shares 670,000*1.04*12/12 696,800.00
share issued in February 51,000*1.04*10/12 44,200.00
shares repurchased 4000*6/12 (2,000.00)
Weighted average number of shares 739,000.00
earnings attributable to common stock=net income-preferred shares dividends
net income is $2,450,000
preferred shares dividends is $76,000
earnings attributable to common stock=$2,450,000-$76,000
=$2,374,000.00
Earnings per share =earnings attributable to common stock/Weighted average number of shares
Earnings per share=$2,374,000.00/739,000.00
=$3.21
Dow's earnings per share (EPS) for the year ended December 31, 2021 is $3.44. This was determined by first calculating the weighted average number of shares outstanding throughout the year (including new issues and those retired), adjusting for the stock dividend, and then dividing the company's net income (minus dividends paid to preferred shareholders) by this adjusted count.
Explanation:To calculate Dow's earnings per share (EPS), we first need to compute the weighted average number of shares outstanding for the year. Starting with 670,000 shares, Dow issued 51,000 new shares on February 28th which are thus in circulation for about 10 months (or 10/12 of the year), and retired 4,000 shares on July 1st that are out for about 6 months (or 6/12 of the year).
The weighted average number of outstanding shares is therefore: 670,000+(51,000*10/12)-(4,000*6/12)=717,500.
Now, we also need to account for the 4% common stock dividend issued on May 15. Because a stock dividend does not change the overall value of the company, the number of actual shares increases but the EPS is calculated as if no such dividend was issued.
Thus, our adjusted weighted number of average shares is: 717,500/1.04=689,904.
The net income of the company was $2,450,000, but we need to subtract the dividends paid to the preferred shareholders: $2,450,000 - $76,000 = $2,374,000.
Finally, we can calculate the EPS: $2,374,000 / 689,904 = $3.44 (rounded to two decimals).
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During 2020, Kate Holmes Co.'s first year of operations, the company reports pretax financial income at $250,000. Holmes's enacted tax rate is 45% for 2020 and 20% for all later years. Holmes expects to have taxable income in each of the next 5 years.The effects on future tax returns of temporary differences existing at December 31, 2020, are summarized:Future Years 2021 2022 2023 2024 Future taxable- (deductible)amounts:Installment Sales 32,000 ### 32,000 Depreciation 6,000 ### 6,000 6,000 Unearned Rent (50,000) ###Compute Taxable Income for 2020.
Final answer:
Kate Holmes Co.'s taxable income for 2020 is $250,000, the same as the reported pretax financial income, since the future taxable or deductible amounts from installment sales, depreciation, and unearned rent do not affect the current year's taxable income. The income tax expense for the year is calculated at a tax rate of 45%, which equates to $112,500.
Explanation:
To compute taxable income for Kate Holmes Co. for the year 2020, we need to consider the pretax financial income and apply the current tax rate as well as account for any temporary differences that will affect future tax liabilities. The pretax financial income reported by the company is $250,000. The enacted tax rate for 2020 is 45%.
However, there are temporary differences to consider, which consist of future taxable or deductible amounts arising from installment sales, depreciation, and unearned rent. For calculating the current year's taxable income, we look at the temporary differences that will reverse in the current year:
Future taxable amounts from installment sales would add to the taxable income in the future years and not affect the taxable income for 2020.Similarly, additional depreciation expenses would reduce taxable income in future years, but for 2020, we only consider the currently enacted tax rate and reported pretax financial income.Unearned rent represents income received but not earned in 2020, meaning it will be taxable when it is earned in future years.Therefore, the taxable income for Kate Holmes Co. in 2020 is the reported pretax financial income of $250,000, since none of the temporary differences listed will reduce or increase the taxable income for 2020.
The income tax expense at the enacted tax rate of 45% on the taxable income of $250,000 would be:
Income Tax Expense = Taxable income × Tax rate
Income Tax Expense = $250,000 × 0.45
Income Tax Expense = $112,500
This expense would be reported on the company's income statement for 2020.
Assume that Andretti Company has sufficient capacity to produce 120,150 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its unit sales by 35% above the present 89,000 units each year if it were willing to increase the fixed selling expenses by $140,000. What is the financial advantage (disadvantage) of investing an additional $140,000 in fixed selling expenses?
To find the profit-maximizing quantity for Doggies Paradise Inc., we calculate and graph total revenue, total cost, marginal revenue, and marginal cost, then identify the output level where marginal revenue equals marginal cost.
Explanation:The question addresses the concept of profit maximization in the context of a perfectly competitive firm, Doggies Paradise Inc., in the field of business economics. To determine the profit-maximizing quantity, we need to analyze the total revenue, total cost, and marginal costs associated with different levels of output. To achieve this, we create a table with columns for output level, total revenue, marginal revenue, total cost, and marginal cost, and then plot these relationships on a graph to visually identify the point where marginal cost equals marginal revenue, which indicates the profit-maximizing level of output.
Using the provided information, we can calculate that for each unit sold at $72, the marginal revenue will be $72 as well since the price remains the same for each additional unit sold in perfect competition. Total revenue is simply the price multiplied by the quantity sold. The marginal cost for each unit is the difference in total variable cost for each additional unit produced. The total cost at each level of output is calculated by adding the fixed costs to the total variable costs. Once calculated, we can then sketch the total revenue and total cost curves, as well as the marginal revenue and marginal cost curves, to visually analyze the profit-maximizing quantity.
Horton Industries’ shareholders’ equity included 100 million shares of $1 par common stock and a balance in paid-in capital—excess of par of $900 million. Assuming that Horton retires shares it reacquires (restores their status to that of authorized but unissued shares), by what amount will Horton’s total paid-in capital decline if it reacquires 2 million shares at $8.50 per share?
Answer:
The common stock would decline by $2 million
The paid in capital in excess of par would decline by $15 million
The share capital would decline by $17 million
Explanation:
The balance in common stock would decline by the par value of the 2 million shares reacquired in the year,that is 2 million*$1=$2,000,000
However balance in the paid-in share capital in excess of par would decline by $7.5 for each of the 2 million shares reacquired i.e 2 million *$7.5=$15,000,000
However the total reduction in share capital of Horton Industries is the sum of the reduction in common stock of $2 million and the reduction in paid-in capital in excess of par of $15 million i,e $17 million
Final answer:
The decline in Horton Industries' total paid-in capital after reacquiring 2 million shares at $8.50 per share would be $15 million, calculated by the excess of the repurchase price over the par value multiplied by the number of shares reacquired.
Explanation:
The subject matter in question refers to Horton Industries’ shareholders’ equity and its decrease as a result of the company reacquiring its own shares. Calculating the decline in total paid-in capital involves considering the number of shares repurchased and the price paid for each share.
Horton Industries plans to reacquire 2 million shares at $8.50 per share. The shares have a par value of $1, meaning that each share has $7.50 ($8.50 - $1 par value) attributed to paid-in capital—excess of par. Multiplying this excess by the number of shares gives us the total decline in paid-in capital, which is $15 million (2 million shares x $7.50).
Therefore, when Horton reacquires the 2 million shares at $8.50 per share, the total paid-in capital will decline by $15 million.
Oaktree Company purchased new equipment and made the following expenditures: Purchase price $ 45,000 Sales tax 2,200 Freight charges for shipment of equipment 700 Insurance on the equipment for the first year 900 Installation of equipment 1,000 The equipment, including sales tax, was purchased on open account, with payment due in 30 days. The other expenditures listed above were paid in cash. Required: Prepare the necessary journal entries to record the above expenditures. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Answer and Explanation:
The journal entries are shown below:
1. Equipment($45,000 + $2,200 + $700 + $1,000) $48,900
To Accounts payable $47,200 ($45,000 + $2,200)
To Cash $1,700
(Being the equipment is purchased on cash and credit)
Since the equipment is purchased so it would be debited and the other two accounts i.e account payable and the cash is credited
2.Prepaid insurance $900
To Cash $900
(Being the payment is recorded)
Since there is a prepaid insurance and the same is increased in assets so it would be debited and the cash is paid so it would be credited
Many people have argued that an income tax should be "marriage neutral," that is, two people should pay the same total tax whether they are married or they are single. Suppose Amanda earns nothing, Ben earns $60,000, and Cathy and Dylan each earn $30,000. They are all single. Amanda pays no tax because she has no income. If they all live in a country that has a progressive income tax, which will be higher: the tax that Ben pays or the sum of the taxes Cathy and Dylan pay?
Answer:
Ben would pay more in taxes.
Explanation:
A progressive income tax increases the tax rate as the taxpayer earns more money.
In this case, Ben would be taxed as earnings $60,000 which is probably a much higher tax rate than the applicable one for $30,000. If we use the current tax brackets for 2020, Ben would fall under the 22% tax bracket while both Cathy and Dylan would fall under the 12% tax bracket. Obviously Ben would pay much more in taxes.
Tina's Apple Company would like to manufacture and market a new packaging. Tina's has sold an issue of commercial paper for $1,500,000 and maturity of 90 days to finance the new project. Compute the annual interest rate on the issue of commercial paper if the value of the commercial paper at maturity is $1,650,000 (assuming 360 days in a year).
Answer:
40%
Explanation:
Tina's Apple Company would like to manufacture and market a new packaging. Tina's has sold an issue of commercial paper for $1,500,000 and maturity of 90 days to finance the new project. Compute the annual interest rate on the issue of commercial paper if the value of the commercial paper at maturity is $1,650,000 (assuming 360 days in a year).
Interest paid = $1,650,000 - 1,500,000
= $150,000
Annual interest rate = ($150,000/$1,500,000) (360/90)
= 40%
Three critical factors have combined to accelerate the ecological crisis facing the world community and to make sustainable development more difficult. Explain and discuss these three factors.
Answer:
1-population explosion
2- world poverty and income inequality
3- rapid growth of many development nations
Explanation:
This is an issue that must be analyzed according to a historical context in the world.
The industrial revolution was a milestone in the world with regard to the population explosion, this was due to technological innovations that occurred after the industrial revolution, as there were different labor relations, difference in the way of man producing and greater availability of food.
From then on, the rural exodus begins, with people migrating from the countryside to urban areas, in order to obtain greater job opportunities.
The industrial revolution has revolutionized the world until today, since then a capitalist context has emerged, where there is the enrichment of entrepreneurs and the insertion of large companies in developing countries and consequently the increase in income inequality and poverty.
So these are the three factors that integrated were combined to accelerate the ecological crisis of the global community and hinder sustainable development, because in the eagerness of industrial development and income generation, combined with the population's desire for production, sustainable development was a factor that could mean a barrier to production and rampant consumerism.
Kohlman Company began its operations on March 31 of the current year. Projected purchases for the first three months of business are $156,800, $195,200, and $217,600, respectively, for April, May, and June. Admin expenses represent $28,800 of the estimated monthly payments. Seventy-five percent (75%) of the purchases are expected to be paid in the month in which they are purchased. Twenty percent (20%) will be paid in the following month. Five percent (5%) is expected to be uncollectable. The cash payments for the month of April and May are:
a. $185,600 and 224,000
b. $117,600 and 146,600
c. $146,400 and 206,560.
d. $156,800 and 195,000
Answer:
c. $146,400 and 206,560.
Explanation:
Monthly Purchases are as follows;
April =$156,800
May= $195,200
June= $217,600
Since Admin expenses are paid every month,
April =$28,800
May = $28,800
June =$28,800
75% of April purchases will be paid in April . Use these to calculate the payments;
Pmts
April = 75%* $156,800 = $117,600
add Admin expenses to find total cash payments;
APRIL = $117,600+ $28,800 = $146,400
In May,20% of April purchases will be paid , 75% of May purchases will also be paid plus admin expenses. Use these to calculate the payments;
May= (20%* $156,800) + (75% * $195,200) + $28,800
MAY = 31360 +146400 +28800 = $206,560
The following inventory information was taken from the records of Kleinfeld Inc.: Historical cost $12,000 Replacement cost $7,000 Expected selling Price $9,000 Expected selling cost $500 Normal profit margin 50% of price Assume that subsequent to your adjustment the expected selling price increases to $13,000 (all the rest of the facts are the same). What adjustment to inventory should be made under IAS 2 after this event? Question 37 options: Inventory should be increased (debited) by $3,500. Inventory should be increased (debited) by $4,000. No adjustment should be made to inventory once it is written down. Inventory should be increased (debited) by $1,000.
Answer:
Inventory should be increased (debited) by $3,500.
Explanation:
According to the IAS 2, the inventory value should be lower of historical cost or net realizable value
The historical cost is $12,000
And, the net realizable value is
= $9,000 - $500
= $8,500
Since as we can see the lower value is $8,500 but due to increase in realizable value, the historical cost would remain the same i.e $12,000
So the inventory should be increased or debited by $3,500 i.e
= $12,000 - $8,500
= $3,500
The following information relates to the operations of Cruz Manufacturing during the current year: Raw materials used $ 20,000 Direct labor wages 60,000 Sales salaries and commissions 50,000 Depreciation on production equipment 4,000 Rent on manufacturing facilities 30,000 Packaging and shipping supplies 6,000 Sales revenue 190,000 Units produced and sold 10,000 Selling price per unit $ 20.00 Based on this information, what is the company's cost of goods sold?
Answer:
the company's cost of goods sold is $120,000
Explanation:
Note : all units produced are sold (10,000)
Therefore Cost of goods sold is equal to Cost of Goods Manufactured
Calculation of Cost of Goods Manufactured
Raw materials used 20,000
Direct labor wages 60,000
Depreciation on production equipment 4,000
Rent on manufacturing facilities 30,000
Packaging and shipping supplies 6,000
Total 120,000
Answer: $114,000
Explanation:
To calculate the Cost of Goods sold we would first needs to know Product Costing in Manufacturing firms.
The formula for which is,
Product Costing = (Materials cost + Labor costs + Overhead costs) ÷ Number of units produced
It is important to calculate this because when multiplied by the number of units SOLD, you get Cost of goods sold.
Calculating therefore would be,
Product Costing = 20,000 + 60,000 + (4,000 + 30,000) depreciation and rent on manufacturing facilities ÷ 10,000 units produced
= $11.40 per unit
Now we can calculate the Cost of goods sold by,
Cost of goods sold = Number of units sold × Product Costing in Manufacturing Companies
Cost of goods sold = 10,000 units sold × 11.40
= $114,000
The company's cost of goods sold is $114,000.
The movie theater in your neighborhood charges lower ticket prices to senior citizens than to other patrons. Assuming that this pricing strategy increases the profits of the movie theater, we can conclude that senior citizens must have ________ for movie tickets than other patrons. greater demand lower demand more elastic demand less elastic demand
Answer:
More elastic
Explanation:
Demand is elastic if a small change in price has a greater effect on the quantity demanded.
Demand is inelastic if a small change in price has little or no effect on quantity demanded.
The senior citizens have an elastic demand because when price was reduced, the profits earned by the theatre increased. This means the Quanitity demanded of movie tickets increased.
If demand were inelastic and prices were reduced, profits would fall.
I hope my answer helps you
The welding department supplies parts to the final assembly line. Management decides to implement a kanban system and has collected the following data: • The daily demand is 2000 units. • The production lead time is 4 days (this includes processing time, transport time, and waiting time). • Management has decided to have 1 day of safety stock. • One container fits 400 units. How many kanban containers will be needed to support this system?
Answer:
25 containers
Explanation:
The computation of the number of kanban containers required is shown below:
= (Lead time demand + Safety stock) ÷ Container size
where,
Lead time demand is
= 2,000 units × 4 days
= 8,000 units
Container size = 400 units
Safety Stock is
= 1 day × 2,000 units
= 2,000 units
So, the number of kanban containers required is
= (8,000 units + 2,000 units) ÷ (400 units)
= 25 containers
We simply applied the above formula
If Negan Corp. common stock is valued at $40 per share, dividends are paid quarterly and expected to grow quarterly by 1.2% forever, and the next dividend is due in 3 months and expected to be $3, then what is the expected annual return on Negan Corp. stock?
Answer:
= 33.37%
Explanation:
The computation of expected annual return is given below:-
Price of common stock today = Dividend next year ÷ (Required rate of return - Growth rate)
= $42 = $3 ÷ (required rate of return - 1.2%)
= (required rate of return -1.2%) = 0.071429
= (required rate of return - 1.2%) = 7.1429%
Required rate of return = 8.3429%
Expected of Annual Return = Required rate of return × Quarterly
= 8.3429% × 4
= 33.3716%
or
= 33.37%
So, for computing the expected of annual return we simply multiply the required rate of return with quarterly.
You were hired by a small business as the project manager of a project involving a market analysis. This project will determine whether the company goes ahead with the large scale manufacturing of a brand new product. The activities of the project are described below, with their respective durations:
ID Description Duration (2 weeks) Predecessor
A Survey designed 2 None
B Pilot 1 A
C Data collection 3 A
D Data Processing 1 B, C
E Analyze survey Results 2 D
F Analyze market trends 3 D
G Demographics 2 E
H Report and Presentation 2 F, G
Draw a project network with this information.
Answer:
Explanation:
check the attached files
Consider that you own the following position at the beginning of the year: 200 shares of US Bancorp at $29.89 per share, 300 shares of Micron Technology at $13.31 per share, and 250 shares of Hilton Hotels at $24.11 per share. During the year, US Bancorp and Hilton Hotels both paid a dividend of $1.39 and $0.16, respectively. At the end of the year, the stock prices of US Bancorp, Micron, and Hilton Hotels were $36.19, $13.12, and $34.90, respectively. What are the dollar and percentage return of the stocks and the return of the portfolio
Answer:
Dollar return of US Bancorp = $7.69
Explanation:
A Dollar return of US Bancorp = $36.19 - $29.89 + $1.39 = $7.69
Total Dollar return of US Bancorp = $7.69 * 200 = $1,538
Percentage return of US Bancorp percentage return = ($7.69/$29.89) * 100 = 25.72%
B Dollar loss of Hilton Hotels = $13.12 - $13.31 = - $0.19
Total Dollar loss of Hilton Hotels = - $0.19 * 300 = - $57.00
Percentage loss of Hilton Hotels = (-$0.19/$13.31) * 100 = 1.43%
C Dollar return of Hilton Hotels = $34.90 - $24.11 + $0.16 = $10.95
Total Dollar return of Hilton Hotels = $10.95 * 250 = $2,737.50
Percentage return of Hilton Hotels = ($10.95/$24.11) * 100 = 45.42%
The following stockholders’ equity accounts, arranged alphabetically, are in the ledger of Sarasota Corp. at December 31, 2022.
Common Stock ($2 stated value) $2,400,000
Paid-in Capital in Excess of Par Value—Preferred Stock 67,500
Paid-in Capital in Excess of Stated Value—Common Stock 1,575,000
Preferred Stock (5%, $100 par, noncumulative) 900,000
Retained Earnings 2,001,000
Treasury Stock (18,000 common shares) 108,000
Prepare the stockholders’ equity section of the balance sheet at December 31, 2022.
Answer and Explanation:
The preparation of the stockholder equity section of the balance sheet is presented below:
Stockholders' equity
Paid in capital
Capital stock
5% preferred stock, $100 par value, noncumulative, 9,000 shares are issued and outstanding $900,000
Common stock, no par, $2 stated value, $2,400,000
Total capital stock $3,300,000 (A)
Additional paid in capital
Paid-in Capital in Excess of Par Value $67,500
Paid-in Capital in Excess of Stated Value - Common Stock $1,575,000
Total additional paid in capital $1,642,500 (B)
Total paid in capital $4,942,500 (A + B)
Add: Retained earnings $ 2,001,000
Total paid in capital and retained earnings $6,943,000
Less: Treasury stock (18,000 common shares) $(108,000)
Total stockholders' equity $6,835,500
Stockholders' equity
Paid in capital
Capital stock
5% preferred stock, $100 par value, noncumulative, 9,000 shares are issued and outstanding $900,000
Common stock, no par, $2 stated value, $2,400,000
Total capital stock $3,300,000 (A)
Additional paid-in capital
Paid-in Capital - in Excess of Par Value $67,500
Paid-in Capital in Excess of Stated Value - Common Stock $1,575,000
Total additional paid in capital $1,642,500 (B)
Total paid in capital $4,942,500 (A + B)
Add: Retained earnings $ 2,001,000
Total paid in capital & retained earnings $6,943,000
Less: Treasury stock (18,000 common shares) $(108,000)
Total stockholders' equity $6,835,500
Learn more: brainly.com/question/8645356
Plan B: Produce at a constant rate of 1 comma 300 units per month, which will meet minimum demands. Then use subcontracting, with additional units at a premium price of $80 per unit. Subcontracting capacity is limited to 900 units per month. Evaluate this plan by computing the costs for January through August.
Answer:
The complete question has been attached for proper cross reference
Subcontracting costs amounts to $210,000 for the 8 months
Volumes subcontracted are
Mar 400
Apr 509
May 700
Jun 700
July 400
Aug 100
Total 2,800
Inventory holding cost is $4,000. Only inventory in hand was 200 units in January
Explanation:
Kindly refer to the attached document for a complete presentation of results