Answer: Payback rule
Explanation: As per the pay back rule, the project which earns its initial investment more quickly is considered to be acceptable and profitable.
In the given case, the company is expecting a project which do not affect liquidity and does not take too much cost on research for the coming future. Thus, a project with a shorter time period of recovery of initial investment will be suitable fro them.
Hence the company should use payback rule to evaluate its product.
Megan was employed by a large company. Her supervisor told her to falsify government reports. She refused and was fired. She sued for wrongful discharge. Her employer claimed that, since Megan was an at-will employee, she had no legal right to claim the company was liable for damages. Is the employer right?
Answer:
The employer is not right
Explanation:
An at-will employment under US law allows an employer to terminate any an at will -without having to state any reason for the same. The employee will have to leave his position in the company at once.
There is, however, an exception to this law. At-will employees can be fired under any circumstances but not for illegal reasons. If employer is terminating an employee based on illegal reasons such as discrimination based on color or race, or for reporting illegal activity carried out by the company, the employee can sue the employer.
In this case, Megan was terminated as she refused to falsify government reports. It is an illegal activity and she cannot be terminated stating that she was an at-will employee.
So, Megan can sue the employer for wrongful discharge and employer was not right on his part.
An employer cannot claim that an at-will employee has no legal right to sue for wrongful discharge if the employee was fired for refusing to engage in illegal activities. The employer's actions would violate the employee's rights under Title VII of the Civil Rights Act of 1964, which prohibits discrimination based on race, color, religion, sex, or national origin.
Explanation:An employer cannot claim that an at-will employee has no legal right to sue for wrongful discharge if the employee was fired for refusing to engage in illegal activities, such as falsifying government reports. The employer's actions would violate the employee's rights under Title VII of the Civil Rights Act of 1964, which prohibits discrimination based on race, color, religion, sex, or national origin. Firing an employee for refusing to participate in illegal activities is considered a violation of public policy, even for at-will employees.
In the case of Megan, if she was fired for refusing to falsify government reports, she may have grounds to sue for wrongful discharge. The employer's claim that Megan had no legal right to claim liability for damages is not valid in this situation. Megan can argue that her termination was a violation of public policy, and she should be able to seek legal action.
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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.
The Walden Manufacturing Corp. has office support salaries of $5,200, factory supplies of $2,300, indirect labor of $7,300, direct materials of $17,300, advertising expense of $3,800, office expense of $14,600, and direct labor of $21,600. What is the total period cost?
Answer:
Total period cost= $23600
Explanation:
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. Period costs are not attached to one particular product or the cost of inventory like product costs.
In this exercise:
Period costs:
Office support salaries of $5,200
Advertising expense of $3,800
Office expense of $14,600
Total period cost= $23600
What is a teaming agreement? An agreement that will force both the vendor and customer to work together An agreement designed to allow vendors to work together without fear of exposing secrets A secret agreement between the vendor and customer An agreement between two teams who are not working together
Answer: An agreement between two teams who are not working together
Explanation: A teaming agreement refers to the agreement made by two or more individual corporations to work together.
Usually these agreement are made by the leading entities of an industry to bid on Government contract, so that there will be less competition and everyone gets the fair share in profit.
Such agreements are considered totally legal so the companies do not need to keep it in any secrecy.
Hence from the above we can conclude that statement 4 is correct.
A teaming agreement is a formal contract made between two or more organizations who agree to combine their resources and capabilities to work together on a specific project, usually one that is contract-based. These agreements provide various benefits like accessing broader markets, sharing of skills, and reducing costs and risks. The terms of the agreement define the relationship and responsibilities of the parties involved.
Explanation:A Teaming Agreement is a formal contract between two or more organizations who agree to work together on a specific project, often one that is contract-based. It's often used in industries like government contracting, where companies with complementary capabilities can combine their resources to bid on larger projects. These agreements are designed to create synergies and shared benefits, such as accessing broader markets, sharing resources and skills, and reducing risk and cost.
Typically, one company acts as the principal or lead and the others as team members, and each member contributes different skills or capabilities, aligned to the overall objective of the project. The terms and conditions of the teaming agreement will define the relationship between the parties, including their duties and responsibilities, the sharing of profits and losses, the handling of confidential information, and various other project-specific parameters. It's not intended to force parties to work together, or to be secretive agreements, but are open and clear contracts that enable beneficial partnerships.
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The SRT partnership agreement specifies that partnership net income be allocated as follows:
Partner S Partner R Partner T
Salary allowance $20,000 $25,000 $15,000
Interest on average capital balance 10% 10% 10%
Remainder 30% 30% 40%
Average capital balances for the current year were $60,000 for S, $50,000 for R, and $40,000 for T.
Refer to the information given. Assuming a current year net income of $45,000, what amount should be allocated to each partner?
Partner S Partner R Partner T
A. $17,000 $21,000 $7,000
B. ($9,000) ($9,000) ($12,000)
C. $13,500 $13,500 $18,000
D. $22,500 $22,500 $0
Answer:
A. $17,000 $21,000 $7,000
Explanation:
From the income, we will subtract the salaries and interest, this will give us the amount to distribute among the partner
net income 45,000
salaries (60,000) (20,000 + 25,000 + 15,000)
interest (15, 000) (60,000 + 50,000 + 40,000) x 10%
net loss (30,000)
Each partner will receive his salary and capital interest, and proportion of the remainder
Allocate to S
20,000 + 6,000 - 9,000 = 17,000
Allocate to R
25,000 + 5,000 - 9,000 = 21,000
Allocate to T
15,000 + 4,000 - 12,000 = 7,000
Sandra is running an online bookstore. Her market research shows her that many people visit the site, look at several books, add one or more books to the shopping cart but never actually purchase anything. Based on what she learned about the consumer buying process, Sandra decided to offer free delivery. She felt that this would make it easier for the customer in the ___________ stage of the consumer buying process.
Answer: Purchase stage
Explanation: This is the second last stage in the buying process. Until this stage the customer must have decided to make the purchase. However it is not guaranteed that the customer will do it as any small issue could lead to change in mind.
In the given case, Sandra is giving additional services as the customers on her sight decides to purchase the book but cancels the order after.
Thus, from the above we can conclude that the given case relates to the purchase stage.
Pix Company has the following production data for March: no beginning work in process, units started and completed 31,000, and ending work in process 4,100 units that are 100% complete for materials and 40% complete for conversion costs. Pix uses the FIFO method to compute equivalent units. If unit materials cost is $4 and unit conversion cost is $13. The total costs to be assigned are $564,720, prepare the cost section of the production cost report for Pix Company using the FIFO approach.
Answer:
unit beggining WIP 0
Units started and completed 31,000
Ending inventory 4,100
Total physical units 35,100
Equivalent units (materials)
Units started and completed 31,000
WIP materials (4,100 x 100%) 4,100
Total units accounted for 35,100
Equivalent units (conversion)
Units started and completed 31,000
WIP materials (4,100 x 40%) 1,640
Total units accounted for 32.640
Cost Incurred during March:
35, 100 x 4 = 140,400
32,640 x 13 = 1,044,480
Total cost 1, 184,880
Cost assigned to units transferred out
31,000 x (4 + 13) = 527,000
Cost of WIP
4,100 x 4 = 16.400
1,640 x 13 = 21,320
Total 37,720
Explanation:
We need to do the count of physical units
we need to calcualte the equivalent units:
transferred + ending x completion percentage
then the cost incurred
and allocate cost to finished goods and the ending WIP based on the equivalent units of materials and conversion
Final answer:
To prepare the production cost report for Pix Company, we calculate equivalent units for materials and conversion costs, then assign total costs using these calculations, which matches the provided total costs of $564,720.
Explanation:
The question involves preparing the cost section of a production cost report for Pix Company using the FIFO method for the month of March. The data includes units started and completed, the ending work in process units and their completion percentages, and the costs for materials and conversion. Using the provided unit costs for materials ($4) and conversion ($13), we calculate the equivalent units for both materials and conversion under the FIFO method. Since all ending work in process units are 100% complete for materials, equivalent units for materials are the same as the physical units. For conversion, the equivalent units are based on the completion percentage. The total costs are then assigned based on these calculations.
To calculate the cost for materials: 31,000 units completed + 4,100 units in ending WIP at 100% = 35,100 equivalent units. Materials cost: 35,100 units x $4/unit = $140,400.
For conversion costs: 31,000 units (from units completed) + (4,100 units in ending WIP x 40% completion for conversion) = 32,640 equivalent units. Conversion cost: 32,640 units x $13/unit = $424,320.
Total costs to be assigned = Materials cost + Conversion cost = $140,400 + $424,320 = $564,720, matching the total costs provided in the question.
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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Kim's Retail had 800 units of inventory on hand at the end of the year. These were recorded at a cost of $ 13 each using the lastminusin, firstminusout (LIFO) method. The current replacement cost is $ 9 per unit. The selling price charged by Kim's Retail for each finished product is $ 15. In order to record the adjusting entry needed under the lowerminusofminuscostminusorminusmarket rule, the Merchandise Inventory will be ________.
Answer:
the Merchandise Inventory will be credited by $3200
Explanation:
given data
Retail inventory = 800 units
recorded cost = $13
replacement cost = $ 9 per unit
selling price charged = $15
to find out
the Merchandise Inventory will be
solution
we know here market is equal to current replacement cost that is $9
and here we can say
market is here less than cost
so inventory will be valued at Market
so we find
down in inventory is = 800 × ( 13 - 9 )
down in inventory is = 3200
so the Merchandise Inventory will be credited by $3200
If we know that a firm has a net profit margin of 4.6 %, total asset turnover of 0.62, and a financial leverage multiplier of 1.54, what is its ROE? What is the advantage to using the DuPont system to calculate ROE over the direct calculation of earnings available for common stockholders divided by common stock equity?
Answer:
4.39%
Explanation:
Using DuPont equation in computing for ROE enables further analysis of the company's strengths and weaknesses. By using this equation, ROE is segregated into different drivers of ROE that focus on key metrics of financial performance. These metrics focus on operational efficiency (Net Profit margin), asset use efficiency (Total Asset Turnover) and financial leverage (Equity or Financial Multiplier). Further, this provides information that will be used by the company in its planning activities.
You buy a ten-year bond with an 8% coupon rate at a yield-to-maturity of 6%. (Both rates follow the BEY convention.) You hold the bond for two years, reinvesting coupons in a money market account earning an APR of 4%, compounded monthly. On the day you receive the fourth coupon, you sell the bond. Since market interest rates have increased, you sell it at a yield-to-maturity of 8%. What is your realized compound yield? Report the realized compound yield as an APR with semi-annual compounding.
Answer:
Ans. the realized yield is 0.7749% APR semi-annual compounding
Explanation:
Hello, first we need to find the exact amount paid for this bond, you can find this by finding the coupon that it pays every 6 months and transforming the effective annual rate of the YTM into semi-annual effective rate. All this as follows.
[tex]Coupon=FaceValue*\frac{AnnualCouponRate}{2}=1000*\frac{0.08}{2}=40[/tex]
[tex]YTM(SemiAnnual)=(1+YTM(annual))^{\frac{1}{2} } -1=(1+0.06)^{\frac{1}{2} } -1=0.0296[/tex]
Ok, so far, our semi annual coupon is $40 and our semi-annual YTM is 2.96%. Now. we are ready to find the price paid for the bond.
[tex]Price=\frac{Coupon((1+YTM)^{n-1}-1) }{YTM(1+YTM)^{n-1} } +\frac{(FaceValue+Coupon)}{(1+YTM)^{n} }[/tex]}
[tex]Price=\frac{40((1+0.0296)^{19}-1) }{40(1+0.0296)^{19} } +\frac{(1000+40)}{(1+0.0296)^{20} } =1155.91[/tex]
4 bonds were received and placed in a money market account earning a 4% compounded monthly rate, in order to make things more simple, let´s convert this into a semi-annual effective rate, since the bonds are paid every 6 months. Like this.
[tex]r(semi-annual)=(1+\frac{0.04}{12} )^{6} -1=0.020167[/tex]
Since you received 4 coupons, we have to find the future value of this 4 coupons, that is:
[tex]FV(Coupons)=40(1+0.020167)^{3}+ 40(1+0.020167)^{2}+40(1+0.020167)^{1}+40[/tex]}
[tex]FV(Coupons)=164.91[/tex]
The selling price of the bond, given the new YTM=8% is:
[tex]Price=\frac{40((1+0.03923)^{15}-1) }{40(1+0.03923)^{15} } +\frac{(1000+40)}{(1+0.03923)^{16} } =1009.02[/tex]
Adding both values (sell price of the bond and future values of the coupons) we get the money inflow, what we will call from here FV. The persent value is the money you first paid for the bond.
And then we find the rate of return of all this transactions by using this formula.
[tex]\sqrt[2]{\frac{FV}{PV} }-1=r[/tex][tex]\sqrt[2]{\frac{(1009.02+164.91}{1155.91} }-1=r =0.0077638[/tex]
The return of this invesment is 0.77638% effective annually, but we need it to have a semi-annual compounding, so first, we need to turn this effective annual rate into an effective semi annual rate and them, multiply by 2. this is the math of all this.
[tex]EffectiveSemi-annnual=(1+0.0077638)^{\frac{1}{2} } -1=0.0038744[/tex]
[tex]APR(SemiAnnualComp)=0.0038744*2=0.007749[/tex]
APR(SemiAnnualComp)= 0.7749%
Best of luck.
The present value of an annuity is the sum of the discounted value of all future cash flows.
You have the opportunity to invest in several annuities. Which of the following 10-year annuities has the greatest present value (PV)? Assume that all annuities earn the same positive interest rate.
(A) An annuity that pays $1, 000 at the beginning of each year
(B) An annuity that pays $1, 000 at the end of each year
(C) An annuity that pays $500 at the end of every six months
(D) An annuity that pays $500 at the beginning of every six months
Answer:
Ans. The best choice is:
A) An annuity that pays $1, 000 at the beginning of each year (PV=$6,759.02 with a discount rate of 10% annual)
Explanation:
Hi, well, I think that the best way of explaing is by discussing each option. In order to be alot more clear in the emplanation, let´s consider a 10% annual discount rate for all cases:
(A) $1, 000 at the beginning of each year, for 10 years
This is pretty straight forward, but please consider this, one of the payments is made in the present, therefore, when calculating the present value of the annuity, do not use 10 periods, use 9 and add 1000 to this calculation, everything should look like this.
[tex]PV=1000+\frac{1000((1+0.1)^{9}-1) }{0.1(1+0.1)^{9} } =6759.02[/tex]
(B) $1, 000 at the end of each year, for 10 years
We do the same as we did in A), but this time, we count 10 annuities and we don´t add 1000 at the beginning. Everything should look like this.
[tex]PV=\frac{1000((1+0.1)^{10}-1) }{0.1(1+0.1)^{10} } =6144.57[/tex]
(C) $500 at the end of every six months, for 20 semesters
This option requires that we transform the rate (10% Effective annual) into semi-annual terms. That is as follows.
[tex]r(Semi-annual)=(1+r(Annual))^{\frac{1}{2} } -1[/tex]
Therefore
[tex]r(Semi-annual)=(1+0.1))^{\frac{1}{2} } -1=0.0488[/tex]
Now, this is our discount rate, the one we need to use if the payments are made every six months. Let´s see how the math to this should look like.
[tex]PV=\frac{500((1+0.0488)^{20}-1) }{0.0488(1+0.0488)^{20} } =6294.52[/tex]
(D) $500 at the beginning of every six months, for 20 semesters (10 years)
We need to use the discount rate of C) (4.88% semi-annual), but the process is just like in A)
[tex]PV=500+\frac{500((1+0.0488)^{19}-1) }{0.0488(1+0.0488)^{19} } =6601.75[/tex]
Best of Luck.
In the Solow growth model with population growth, but no technological progress, the steady-state amount of investment can be thought of as a break-even amount of investment because: the quantity of investment just equals the amount of:
A) output needed to achieve the maximum level of consumption per worker.
B) capital needed to replace depreciated capital and to equip new workers.
C) saving needed to achieve the maximum level of output per worker.
D) output needed to make the capital per worker ratio equal to the marginal product of capital.
Answer: the steady-state amount of investment can be thought of as a break-even amount of investment because: the quantity of investment just equals the amount of: "B) capital needed to replace depreciated capital and to equip new workers."
Explanation: According to the Solow growth model an economy is in a steady state when it makes the most efficient use of its resources. That is, the state in which the saving or investment is equal to the depreciation of capital.
Pun Corporation concluded the fair value of Slender Company was $60,000 and paid that amount to acquire its net assets. Slender reported assets with a book value of $55,000 and fair value of $71,000 and liabilities with a book value and fair value of $20,000 on the date of combination. Pun also paid $4,000 to a search firm for finder’s fees related to the acquisition. Required: Prepare the journal entries to be made by Pun to record its investment in Slender and its payment of the finder's fees. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Answer:
Investment on Slender 51,000
Goodwill 9,000
fees expense 4,000
Cash 64,000
Explanation:
fair value of Slender:
71,000 - 20,000 = 51,000
purchase price 60,000
goodwil 9,000
finder's fees 4,000
It will recognize the goodwill for Slender
it will pay the finder's and recognize them as expense
The total cash will be 60,000 to aquire Slender and the 4,000 finder's expense
[The following information applies to the questions displayed below.] The following information was reported in the December 31, 2017, financial statements of National Airways, Inc. (listed alphabetically, amounts in millions). Accounts Payable $ 4,315 Accounts Receivable 660 Aircraft Fuel Expense 9,500 Cash 3,050 Common Stock 1,260 Dividends 35 Equipment 15,330 Income Tax Expense 270 Interest Expense 210 Landing Fees Expense 3,900 Notes Payable 6,990 Repairs and Maintenance Expense 2,000 Retained Earnings (as of December 31, 2017) 7,195 Salaries and Wages Expense 3,400 Supplies 720 Ticket Revenues 21,100 Prepare an income statement for the year ended December 31, 2017. (Enter your answers in millions (i.e., 10,000,000 should be entered as 10.).)
Answer:
Explanation:
Before preparing the income statement, first, we have to compute the net income or net loss. So, the calculation is shown below:
In the simplest form, the net income = Total revenue - total expenses
= Ticket Revenue - aircraft fuel expense - income tax expense - interest expense - Repairs and Maintenance Expense - Salaries and Wages Expense - Landing Fees Expense
= $21,100 - $9,500 - $270 - $210 - $2,000 - $3,400 - $3,900
= $1,820
The preparation of the income statement is presented in the spreadsheet. Kindly find the attachment below:
Final answer:
National Airways, Inc. reported a net income of $1,820 million for the year ended December 31, 2017, calculated by subtracting total expenses ($19,280 million) from total revenues ($21,100 million).
Explanation:
Income Statement for National Airways, Inc.
The income statement for National Airways, Inc. for the year ended December 31, 2017, is a financial document that summarizes the company's revenues and expenses during the year. Below is the detailed calculation based on the provided figures:
Revenues:
Ticket Revenues: $21,100 million
Expenses:
Aircraft Fuel Expense: $9,500 million
Landing Fees Expense: $3,900 million
Salaries and Wages Expense: $3,400 million
Repairs and Maintenance Expense: $2,000 million
Income Tax Expense: $270 million
Interest Expense: $210 million
Total Expenses: $19,280 million
Net Income: (Revenues - Total Expenses) = $21,100 million - $19,280 million = $1,820 million
To summarize, all the revenue and expense items are accounted for to arrive at the net income for the year. National Airways, Inc. has reported a net income of $1,820 million for the fiscal year 2017. The calculation is straightforward, subtracting total expenses from total revenues to determine net income.
Which of the following statements is false?If there are only two goods, guns and butter, it is possible to produce more of both goods through economic growth.If there are only two goods, guns and butter, it is possible to produce more of both goods if the economy is currently operating at an inefficient point.If there are only two goods, guns and butter, it is possible to produce more of both goods if the economy is currently operating at an efficient point.If there are only two goods, guns and butter, producing more of one means producing less of the other if the economy is currently operating at an efficient point.
Answer:
If there are only two goods, guns and butter, it is possible to produce more of both goods if the economy is currently operating at an efficient point.
Explanation:
As when an economy is at an efficient point then, the economy will tend to indulge in producing the commodity in which it has an absolute advantage and thus, will later on trade in order to be better off.
In the given instance, the economy is efficient and since the nature of both the goods guns and butter are completely different, thus the economy will produce more of any single product to gain competitive advantage in that product.
Thus, efficient economy also cannot produce both the goods.
Final answer:
The false statement is that more of both goods can be produced if the economy is currently operating at an efficient point on the PPF. To produce more of both goods, economic growth must occur, or the economy must be operating at an inefficient point inside the PPF.
Explanation:
The false statement is: "If there are only two goods, guns and butter, it is possible to produce more of both goods if the economy is currently operating at an efficient point." In economic terms, this is represented by the production possibilities frontier (PPF). The PPF shows the maximum possible output that an economy can produce given its resources and technology. When an economy is operating on the PPF, it is considered to be operating efficiently. Producing more of one good on the PPF would require the production of less of the other good due to the trade-offs involved, assuming the available resources are fully utilized.
Economic growth can shift the PPF outward, allowing the production of more of both goods. Productive efficiency is achieved when goods are produced at the lowest resource cost, or when marginal cost equals average total cost. An economy operating at an inefficient point, inside the PPF, can indeed increase production of both goods without trade-offs until it reaches the frontier. Finally, increased production capabilities such as through technological advancements can lead to an outward shift of the PPF, where more of both goods can be produced at a new, more efficient point.
On April 1, 2016, Alpha Company issued $500,000 of 12%, 10-year bonds. The bonds, which were issued at 103, pay interest on October 1 and April 1. Use this information to prepare the General Journal entry (without explanation) to record the April 1, 2016 bond issue. If no entry is required then write "No Entry Required."
Answer:
cash 515,000 debit
bonds payable 500,000 credit
Premium on Bonds 15,000 credit
Explanation:
to know the cash proceeds fro mthe issuance of the bonds we will multiply the face value by the point issued:
500,000 x 103 / 100 = 515,000
As the amount collected is higher than face value we reocgnize a Premium on Bonds Payable for the difference:
515,000 - 500,000 = 15,000
In the ABC partnership (to which Daniel seeks admittance), the capital balances of Albert, Bert, and Connell, who share income in the ratio of 5:3:2 are:
Albert 500000
Bert 300000
Connell 200000
Based on the preceding information, if no goodwill or bonus is recorded, how much should Daniel invest for a 20 percent interest?
A. $400,000
B. $200,000
C. $300,000
D. $250,000
Answer:
D. $ 250,000
Explanation:
The total capital of Albert, Bert and Conell is:
$500000 + $300000 + $200000 = $1000000
given that Daniel will have 20% share in partnership.
So total capital of the partnership after admission of Daniel will be calculated as follows:
($1000000×100)/80 = $ 1250000
Daniel will invest:
$1250000 – $1000000 = $250,000
Daniel should invest $200,000 to acquire a 20% interest in the ABC partnership, given the current capital balances of the partners and his desired income ratio.
Explanation:In the ABC partnership, the current capital balance sums up to $500,000 (Albert) + $300,000 (Bert) + $200,000 (Connell) = $1,000,000. If Daniel seeks for a 20% interest, this implies that he is purchasing 20% of the total value of the partnership. Therefore, he must invest $1,000,000 * 20% = $200,000. This is the level of capital contribution needed from Daniel for a 20% stake in the partnership with no goodwill contribution or bonus recorded.
Therefore, the correct answer is B. $200,000.
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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.
Based on the semi-strong form of the efficient market theory, an investor reacting immediately to a news flash on the television generallyA) can make an abnormal profit.B) is guaranteed to make a reasonable profit.C) is too late to make an exceptional profit.D) will suffer a loss.
Answer:
Option C)
Explanation:
The theory of semi-strong form or structure of efficient market is a sort of holds that security costs alter rapidly to recently accessible data, in this way wiping out the utilization of key or specialized examination to accomplishing a better yield.
Since, under the semi-solid type of the efficient market, all open data is limited in current costs.
Thus its too late for an investor responding immediately to a news flashing on the television to make exceptional gain.
Assume that a small country produces only green peppers and red peppers. Last year, it produced 100 green peppers and 50 red peppers and sold them at prices of $2 per green pepper and $3 per red pepper. This year, it produced 150 green peppers and 60 red peppers and sold them at prices of $2 per green pepper and $4 per red pepper. What is real GDP this year if the base year is last year
Answer:
The correct answer is $480.
Explanation:
Real GDP is the value of economic output calculated in an economy in a year. It is an inflation-adjusted measure. IT calculates growth in GDP on the basis of base year price. So, the change in price is not included and only change in output is included.
The price of green pepper in the base year was $2. The price of red pepper was $3.
Real GDP
= 150 × $2 + 60 × $3
= $300 + $180
= $480
The real GDP in the current year is $480.
The real GDP for the current year, calculated using last year's prices as a base year, is $480, which comprises $300 from 150 green peppers and $180 from 60 red peppers.
To calculate the real GDP for the current year using the prices of the base year, we multiply the quantities of goods produced in the current year by their respective prices in the base year.
Last year (base year) prices: $2 for each green pepper, $3 for each red pepper.Current year production: 150 green peppers, 60 red peppers.Using the base year prices to value this year's production:
Green peppers: 150 (quantity) × $2 (price) = $300Red peppers: 60 (quantity) × $3 (price) = $180The sum of these values gives us the real GDP for the current year:
Real GDP = $300 (green peppers) + $180 (red peppers) = $480
Swifty's Market used the perpetual method to record the following events involving a recent purchase of inventory:
Received goods for $118000, terms 2/8, n/30.
Returned $2300 of the shipment for credit.
Paid $300 freight on the shipment.
Paid the invoice within the discount period.
As a result of these events, the company's inventory
Answer:
The company's inventory is $113,686
Explanation:
The computation of the company inventory is shown below:
= Purchase of inventory - returned goods - discount of net purchase + freight expenses
= {$118,000 - $2,300 - 2% × (118,000 - $2,300) + $300}
= {$115,700 - $2,314 + $300}
= $113,686
It is already mentioned in the question that the invoice amount is paid with the discount period so we apply the discount rate
A purchase of a French bottle of wine by a resident of Honduras would be considered an ____ when counting GDP in Honduras. As a result, this purchase would be ____ Honduran GDP. A purchase of a box of cigars made in Honduras and sold in Canada would be considered an ____ for Honduran GDP, which would be ____ Honduran GDP.
Answer:
import, subtract. export, added
Explanation:
The GDP equation is given by GDP = C + I + G + (X – M) where C is consumption, I investment, G is government expenditures and M are imports.
Since the bottle of wine was produced in France it had to be imported to Honduras to be consumed, imports enters the GDP equation with a minus sign. This implies imports are subtracted from the GDP equation. For a box of Honduras cigars to be consumed in Canada they had to be exported there, so these are counted as exports with enter the GDP equation with a plus sign. So exports are added.
Final answer:
A purchase of a French bottle of wine by a resident of Honduras is an import and subtracts from Honduran GDP, while a purchase of a box of cigars made in Honduras and sold in Canada is an export and adds to Honduran GDP. The formula for GDP is C + I + G + (X - M), where C is Consumption, I is Investment, G is Government Purchases, X is exports, and M is imports.
Explanation:
A purchase of a French bottle of wine by a resident of Honduras would be considered an import when counting GDP in Honduras. As a result, this purchase would be subtracting from Honduran GDP. A purchase of a box of cigars made in Honduras and sold in Canada would be considered an export for Honduran GDP, which would be adding to Honduran GDP.
GDP calculation is based on adding consumption, private investment, government purchases, and net exports (exports minus imports). In the case of the French wine being an import, it would not add to the country's GDP because it is not produced within Honduras. Conversely, the box of cigars, being an export, represents production within the country and therefore contributes to the nation's GDP.
Following the formula for GDP: GDP = C + I + G + (X - M) where:
C is ConsumptionI is InvestmentG is Government PurchasesX is eXportsM is iMportsFor the example given in the self-check question, Country A's GDP would be calculated as follows:
GDP = Consumption ($2,000 billion) + Investment ($50 billion) + Government Purchases ($1,000 billion) + eXports ($20 billion) - iMports ($40 billion) = $3,030 billion.
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
Choose from any list or enter any number in the input fields and then click Check Answer. 6 parts remaining More Info a. The business has interest expense of $ 3 comma 600 that it must pay early in January 2021. b. Interest revenue of $4 comma 800 has been earned but not yet received. c. On July 1, 2020, when the business collected $12 comma 600 rent in advance, it debited Cash and credited Unearned Rent Revenue. The tenant was paying for two years' rent. d. Salary expense is $6 comma 400 per daylong dashMonday through Fridaylong dashand the business pays employees each Friday. This year, December 31 falls on a Thursday. e. The unadjusted balance of the Supplies account is $3 comma 500. The total cost of supplies on hand is $ 1 comma 600. f. Equipment was purchased on January 1 of this year at a cost of $160 comma 000. The equipment's useful life is five years. There is no residual value. Record depreciation for this year and then determine the equipment's book value.
Final answer:
The question discusses various accounting entries, including depreciation of equipment, which is calculated using the straight-line method for a $160,000 equipment with a 5-year life and no residual value, giving a yearly depreciation of $32,000 and a book value of $128,000 at year-end.
Explanation:
The question involves various aspects of business accounting, including interest expense and revenue, advance payments, salary expenses, supply costs, and depreciation of equipment. Each part requires a specific accounting treatment to reflect the true financial position of the business at year-end. We will specifically discuss the depreciation of equipment as part of our example.
Depreciation of Equipment
For the equipment purchased at the beginning of the year with a cost of $160,000 and a useful life of five years with no residual value, the annual depreciation expense would be calculated using the straight-line method. This method evenly spreads the cost of the asset over its useful life. Thus, the annual depreciation expense is $32,000 ($160,000 / 5 years). The book value of the equipment at the end of the year would be $128,000 ($160,000 - $32,000).
Key Takeaways
It is crucial to record depreciation to reflect the usage and the reduced value of assets over time.
Accurate record-keeping ensures that financial statements present a true view of the company's financial health.
Understanding such basic principles is foundational for anyone studying business or accounting.
Why would an American company downplay its American origin while operating in another country?
a. Conveying messages based on the home county is typically bad for business.
b. Strategic price elasticity management.
c. This reduces price sensitivity in the host country.
d. Strategically downplaying the country-of-origin effect.
Answer:
The correct answer would be option D, Strategically downplaying the country of origin effects.
Explanation:
The meaning of downplaying is make something appear less important than it actually is. So if a company is operating in another country, not in his own country, then downplaying the country of origin has better effects than promoting or giving importance to home country while operating in other country. This is strategically very important and has bigger effects. For example, if the American company is operating in Japan, then the culture, the values of Japanese society is much different than American society, so if American company will not downplay it American origin, and try to impose its own culture and values in Japanese workplace, it would have a bad effect on the whole system. So strategically downplaying the country of origin effects a lot.
Funtime Park competes with Splash World by providing a variety of rides. Funtime sells tickets at $ 90 per person as a one-day entrance fee. Variable costs are $ 18 per person, and fixed costs are $ 464 comma 400 per month. Under these conditions, the breakeven point in tickets is 6 comma 450 and the breakeven point in sales dollars is $580 comma 500. Read the requirements LOADING.... Requirement 1. Suppose Funtime Park cuts its ticket price from $ 90 to $ 72 to increase the number of tickets sold. Compute the new breakeven point in tickets and in sales dollars. Begin by selecting the formula labels and then entering the amounts to compute the number of tickets Funtime must sell to break even under this scenario. (Abbreviation used: CM
Answer:
The new breakeven point in tickets is 8,600 and in sales dollars $619,200
Explanation:
BP=FC/CM
BP= breakeven point
FC=fixed cost
CM=contribution margin
8,600=464,400/(72-18)
8,600*72= $619,200
Answer:
BEPd 619,200
BEPu 8,600
Explanation:
1) sales price at 72:
[tex]Sales \: Revenue - Variable \: Cost = Contribution \: Margin[/tex]
contribution per unit
72 - 18 = 54
[tex]\frac{Contribution \: Margin}{Sales \: Revenue} = Contribution \: Margin \: Ratio[/tex]
54 / 72 = 75%
[tex]\frac{Fixed\:Cost}{Contribution \:Margin \:Ratio} = Break\: Even\: Point_{dollars}[/tex]
464,400 / 0.75 = 619,200
in units: sales to break even 619,200 / 72 unit sales price = 8.600
our uncle is about to retire, and he wants to buy an annuity that will provide him with $57,000 of income a year for 20 years, with the first payment coming immediately. The going rate on such annuities is 5.25%. How much would it cost him to buy the annuity today?
Answer:
It cost him 640,617 dollars
Explanation:
as the first payment start today we will calculate the present value for an annuity-due of 57,000 for 20 years discounted at 5.25%
[tex]C \times \frac{1-(1+r)^{-time} }{rate} = PV\\[/tex]
C 52,500
time 20
rate 0.0525
[tex]52500 \times \frac{1-(1+0.0525)^{-20} }{0.0525} = PV\\[/tex]
PV $640,617
A firm has estimated the following demand function for its product:
Q = 100 - 5 P + 5 I + 15 A
Where Q is quantity demanded per month in thousands, P is product price, I is an index of consumer income, and A is advertising expenditures per month in thousands. Assume that P = $200, I = 150, and A = 30. For simplicity in calculating the results, use the point elasticity formulas to complete the calculations indicated below.
(i) Calculate quantity demanded.
(ii) Calculate the price elasticity for demand. Is demand elastic, inelastic, or unit elastic?
(iii) Calculate the income elasticity of demand. Is the good normal or inferior?
(iv) Calculate the advertising elasticity of demand.
Answer:
(i) Q=300
(ii) Elasticity of Demand=-3.33 (elastic)
(iii) Income Elasticity= 2.5 (normal good)
(iv) Advertising Elasticity: 1.5
Explanation:
The Demand function is given by
[tex]Q=100-5P+5I+15A[/tex]
(1) To solve (i) we need to replace P = 200, I = 150, and A = 30 in the demand equation:
[tex]Q=100-5(200)+5(150)+15(30)=300[/tex]
(2) To find the price elasticity (how much quantity demanded changes with price) we use the point price elasticity formula
[tex]\eta_{Price}=\frac{\Delta Q}{\Delta P}\frac{P}{Q}[/tex]
From the above equation we get: [tex]\frac{\Delta Q}{\Delta P}=-5[/tex]
Replacing in the elasticity formula
[tex]\eta_{Price}=-5\frac{200}{300}=|-3.33|>1[/tex]
in absolute terms the elasticity is bigger than one so it is an elastic demand.
(3) For income elasticity (how much quantity demanded changes with income), we proceed similarly as above. But the derivative is respect to income
[tex]\eta_{Income}=\frac{\Delta Q}{\Delta I}\frac{I}{Q}=5\frac{150}{300}=2.5>1[/tex][/tex]
Which is bigger than one, denoting this is a normal good because it's bigger than one.
(4) Advertising elasticity (how much quantity demanded changes with expenditures in advertising), we proceed as before
[tex]\eta_{advertising}=\frac{\Delta Q}{\Delta A}\frac{A}{Q}=15\frac{30}{300}=1.5[/tex]
Swifty's Market used the perpetual method to record the following events involving a recent purchase of inventory:
Received goods for $75400, terms 2/12, n/30.
Returned $1300 of the shipment for credit.
Paid $700 freight on the shipment.
Paid the invoice within the discount period.
As a result of these events, the company's inventory
Answer:
Inventory balance will be of 73,318
Explanation:
Inventory 75,400
Account payable 75,400
to record goods received
Account payable 1,300
Inventory 1,300
to record return of goods
Inventory 700
Cash 700
to record payment of freight
Account Payable 74,100
Inventory 1,482
Cash 72,618
to record payment of invoice within discount period
75,400 - 1,300 = 74,100
74,100 x 2% = 1,482
Inventory balance:
DEBIT CREDIT
75,400
1,300
700
1,482
balance:
73,318