Answer: $130,000
$205,600
$50,000
Explanation:
Depreciation expense using the straight line depreciation method = (Original cost of asset - Salvage value) / useful life
Depreciation expense = ( $400,000 - $40,000) / 4 = $90,000
Net book value for year 1 =$400,000 - $90,000 = $310,000
Net book value for year two = $310,000 - $90,000 = $220,000
Net book value for year 3 = $220,000 - $90,000 = $130,000
Deprecation expense using the unit of production method = [ (Original cost of asset - Salvage value) / total estimated productive capacity] × actual productive use of asset
($400,000 - $40,000) / 20,000 = $18
Depreciation expense for year 1 = $18 × 3000 =$54,000
Net book value for year 1 = $400,000 - $54,000 = $346,000
Depreciation expense for year 2 = $18 × 1800 = $32,400
Net book value for year two = $346,000 - $32,400 = $313,600
Depreciation expense for year 3 = $18 × 6000 = $108,000
Net book value for year three = $313,600 - $108,000 = $205,600
In the double declining method = 2 × (1/number of years ) =2 × (1÷4) = 0.5
Deprecation expense using the double declining method = 0.5 × net book value
Depreciation expense for year 1 = 0.5 × $400,000=$200,000
Net book value for year 1 = $400,000 -$200,000=$200,000
Depreciation expense for year two = $200,000 × 0.5 = $100,000
Net book value for year two = $200,000 - $100,000 = $100,000
Depreciation expense for year 3 = $100,000 × 0.5 =$50,000
Net book value for year three = $100,000 - $50,000 = $50,000
The book value at the end of year 3 using straight-line depreciation is $130,000. Using units-of-production depreciation, it's $94,000, and using double-declining-balance depreciation, it's $50,000.
To calculate the book value of the machine at the end of year 3, we'll address each depreciation method separately.
Straight-Line Depreciation
A machine costs $400,000 with an estimated residual value of $40,000 and an estimated useful life of four years. The annual depreciation expense using the straight-line method is:
Annual Depreciation Expense = (Cost - Residual Value) / Useful Life
Annual Depreciation Expense = ($400,000 - $40,000) / 4 = $90,000
After three years, the total depreciation is:
Total Depreciation = Annual Depreciation Expense * Number of Years
Total Depreciation = $90,000 * 3 = $270,000
The book value at the end of year 3 is:
Book Value = Cost - Total Depreciation
Book Value = $400,000 - $270,000 = $130,000
Units-of-Production Depreciation
A machine costs $400,000 with an estimated residual value of $40,000 and an estimated useful life of 20,000 machine hours. The company uses units-of-production depreciation and ran the machine 3,000 hours in year 1, 8,000 hours in year 2, and 6,000 hours in year 3. The depreciation expense per machine hour is:
Depreciation Expense per Hour = (Cost - Residual Value) / Total Estimated Hours
Depreciation Expense per Hour = ($400,000 - $40,000) / 20,000 = $18
Total hours used in three years is 3,000 + 8,000 + 6,000 = 17,000 hours. The accumulated depreciation is:
Accumulated Depreciation = Depreciation Expense per Hour * Total Hours
Accumulated Depreciation = $18 * 17,000 = $306,000
The book value at the end of year 3 is:
Book Value = Cost - Accumulated Depreciation
Book Value = $400,000 - $306,000 = $94,000
Double-Declining-Balance Depreciation
A machine costs $400,000 with an estimated residual value of $40,000 and an estimated useful life of four years. The depreciation rate for the double-declining-balance method is:
Depreciation Rate = 2 / Useful Life
Depreciation Rate = 2 / 4 = 50%
Year-by-year depreciation calculations:
Year 1: Depreciation = $400,000 * 50% = $200,000; Year-end Book Value = $400,000 - $200,000 = $200,000
Year 2: Depreciation = $200,000 * 50% = $100,000; Year-end Book Value = $200,000 - $100,000 = $100,000
Year 3: Depreciation = $100,000 * 50% = $50,000; Year-end Book Value = $100,000 - $50,000 = $50,000
The book value at the end of year 3 is $50,000.
Clothing Frontiers began operations on January 1 and engages in the following transactions during the year related to stockholders’ equity.January 1 Issues 700 shares of common stock for $34 per share.April 1 Issues 110 additional shares of common stock for $38 per share.Record the transactions, assuming Clothing Frontiers has either $1 par value common stock or $1 stated value stock. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)1. Record the issuance of 700 shares of common stock for $34 per share.2. Record the issuance of 110 additional shares of common stock for $38 per share.
The two transactions related to the issuance of shares by Clothing Frontiers should be recorded by debiting cash for the total amount received, crediting common stock for the amount equal to number of shares times the par or stated value, and crediting 'Paid-In Capital in Excess of Par – Common Stock' for the remaining amount. This applies to both the original 700 shares and the 110 additional shares.
Explanation:When a corporation issues stock, an entry is made to recognize this transaction in the books. Assuming Clothing Frontiers has either $1 par value common stock or $1 stated value stock, the entries would be recorded as follows:
1. The issuance of 700 shares of common stock for $34 per share would be:
Debit: Cash (700 shares * $34)= $23,800
Credit: Common Stock (700 shares * $1)= $700
Credit: Paid-In Capital in Excess of Par – Common Stock=$23,100
2. The issuance of 110 additional shares of common stock for $38 per share would be:
Debit: Cash (110 shares * $38)= $4,180
Credit: Common Stock (110 shares * $1)= $110
Credit: Paid-In Capital in Excess of Par – Common Stock=$4,070
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Clothing Frontiers' common stock issuances are recorded by debiting Cash for the total funds received, crediting Common Stock for the par or stated value, and crediting Additional Paid-in Capital for the excess received over par value.
Explanation:The transactions occurring in Clothing Frontiers during the year are related to the issuance of common stock. Assuming the company has either $1 par value or $1 stated value common stock, the recording of these transactions in the ledger would look as follows:
Issuance of 700 shares of common stock for $34 per share: Debit Cash for $23,800 (700 shares * $34) and credit Common Stock for $700 (the par or stated value, which is $1 * 700 shares) and Additional Paid-in Capital for $23,100 (the difference between cash received and par value).Issuance of 110 additional shares of common stock for $38 per share: Debit Cash for $4,180 (110 shares * $38) and credit Common Stock for $110 (the par or stated value, which is $1 * 110 shares) and Additional Paid-in Capital for $4,070 (the difference between cash received and par value).Learn more about Common Stock Issuance here:https://brainly.com/question/33537295
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Buttner Company borrows $88,500 on September 1, 2014, from Harrington State Bank by signing an $88,500, 12%, one-year note.
How much is accrued interest at December 31, 2014?A.) $2,655
B.) $10,620
C.) $3,540
D.) $4,425
Answer:
C.) $3,540
Explanation:
The loan borrowed is the Principal = $88,500
Interest rate per year = 12% or 0.012 as a decimal
Interest accrued formula = Principal * rate * time
Note: time will be from Sep1 - Dec 31 = 4 months or [tex]\frac{4}{12}[/tex]years
Interest accrued = 88,500 * 0.012 * [tex]\frac{4}{12}[/tex]
Interest accrued = 3,540
Therefore, as of December 31st, 2014, $3,540 would be the interest accrued hence choice C is correct.
Crane Companyplanned to use 1 yard of plastic per unit budgeted at $91 a yard. However, the plastic actually cost $90 per yard. The company actually made 4100 units, although it had planned to make only 3300 units. Total yards used for production were 4160. How much is the total materials variance?
Answer:
$1300 U
Explanation:
Budgeted cost of plastic per yard = $91
Actual cost of the plastic per yard = $90
Actual units made = 4100
Budgeted units to be made = 3300
Actual plastic used = 4160 yards
Now,
Materials quantity variance
= ( Budgeted material - Actual material ) × Actual cost
= ( 1 × 4100 - 4160 ) × $90
= -$5,400 [Here negative sign means unfavorable ]
Materials price variance = ( Budgeted cost - Actual cost ) × Actual units
= ( $91 - $90 ) × 4100
= $4100
Therefore,
Total material variance = $4,100 - $5,400
= - $1,300
i.e $1300 U
Buerhle Company needs to determine if its indefinite-life intangibles other than goodwill have been impaired and should be reduced or written off on its balance sheet. The impairment test(s) to be used is (are) ______________.
A. Both recoverability test and fair value test
B. Recoverability test but not fair value test
C. Not recoverability test but fair value test
D. Neither recoverability test nor fair value test
Answer: The correct answer is "C. Not recoverability test but fair value test".
Explanation: The impairment test to be used is Not recoverability test but fair value test. To determine whether intangibles of indefinite life have deteriorated and must present another value in their balance sheet, they must implement the fair value test.
Rogue Motors Inc. has a 11% required rate of return. The firm does not expect to initiate dividends for 10 years, at which time it will pay $2.00 per share in dividends. At that time, the firm expects its dividends to grow at 6% forever. What is an estimate of the firms' price in 10 years (P10) if its dividend at the end of year 10 is $2.00?Group of answer choicesa. $31.20b. $42.40c. $42.80d. $33.40
Answer:
The correct answer is B that is $42.40
Explanation:
As per the dividend discount model, present price of the share is the present value of future dividend is computed as:
Price of the firm in 10 years = Dividend at the end of the year 10 × (1 + Growth rate in dividends) / (Required return - Growth rate in dividends)
where
Dividend at the end of the year 10 is $2.00
Growth rate in dividends is 6%
Required return is 11%
Putting the value above,
= $2.00 × (1 + 6%) / (11% - 6%)
= $2.00 × (1 + 0.06) / 5%
= $2.00 × 1.06 / 0.05
= $ 2.12 / 0.05
= $42.4
To produce espressos, a coffee shop has fixed costs of 200 dollars each day and variable costs of one dollar per espresso. The number of espressos that the coffee shop sells on a given day depends linearly on the price of each espresso: If the price is $1.00, then they sell 200 espressos, and if the price is $2.00, then they sell 100 espressos. What is the choice of price that will maximize their profit?
Answer
The answer and procedures of the exercise are attached in the following image.
Explanation
Please consider the data provided by the exercise. If you have any question please write me back. All the exercises are solved in a single sheet with the formulas indications.
First, figure out what the price of each espresso is in relation to the number of espressos the shop sells. $2 per expresso is the correct answer.
What is the best price option for them to maximize their profit?
[tex]\text{N} = -100 \text{ x }\text{P}+300\\\text{Profit} = \text{Revenue - Cost}\\\text{Profit} = \text{P} \text{ x } \text{N} - 200\\\text{Profit} = \text{P} \text{x} (-100 \text{ x } \text{P} +300)-200-(-100 \text{x} \text{P}+300) \\= -100 \text{ x } \text{P}^2+400\text{P}-500\\\text{P} = 2, \\\text{Profit} = -300\\[/tex]
The choice of the price will be $2/ coffee to maximize their profit.
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Allen Boating Company manufactures special metallic materials and decorative fittings for luxury yachts that require highly skilled labor. Allen uses standard costs to prepare its flexible budget. For the first quarter of the year, direct materials and direct labor standards for one of their popular products were as follows: Direct materials: 2 pound per unit; $ 12 per pound Direct labor: 2 hours per unit; $ 19 per hour Allen produced 3 comma 000 units during the quarter. At the end of the quarter, an examination of the direct materials records showed that the company used 6 comma 500 pounds of direct materials and actual total materials costs were $ 99 comma 900. What is the direct materials efficiency variance?
Answer:
42,000 unfavorable
Explanation:
The computation of the direct materials efficiency variance is shown below:
= (Actual quantity - Standard quantity) × standard price
= (6,500 pounds - 3,000 pounds) × $12 per pound
= 3,500 pounds × $12 per pound
= 42,000 unfavorable
Since the standard quantity is less than the actual quantity so the direct material efficiency variance would come unfavorable
All other information which is given is not relevant. Hence, ignored it
Wilson's has 10,000 shares of common stock outstanding at a market price of $35 a share. The firm also has a bond issue outstanding with a total face value of $250,000 which is selling for 102 percent of face value. The cost of equity is 11 percent while the preminus tax cost of debt is 8 percent. The firm has a beta of 1.1 and a tax rate of 34 percent. What is Wilson's weighted average cost of capital?
Answer:
8.62%
Explanation:
Weighted average cost of capital is WACC.
First, find the market values of equity and debt
Market value of equity = 10,000*35 = 350,000
Market values of Debt = 250,000
WACC formula is ;
WACC= wE*rE + wD*rD(1-tax)
whereby,
wE = weight of equity = 350,000/(350,000+250,000) = 0.5833
rE = Cost of equity = 11% or 0.11 as a decimal
wD = weight of debt = 250,000/(350,000+250,000) = 0.4167
rD = pretax cost of debt = 8% or 0.08 as a decimal
tax = 34%
So, WACC = (0.5833*0.11) + [ 0.4167 *0.08(1-0.34) ]
WACC = 0.0642 + 0.02200
= 0.0862
Therefore, weighted average cost of capital (WACC)= 8.62%
Which of the following statements is FALSE?
A) Expected return should rise proportionately with volatility.
B) Investors would not choose to hold a portfolio that is more volatile unless they expected to
earn a higher return.
C) Smaller stocks have lower volatility than larger stocks.
D) The largest stocks are typically more volatile than a portfolio of large stocks
Answer:C. Smaller stock have lower volatility than larger stock.
Explanation:
Volatility refers to the prones of a stock price to changes in market conditions. The higher the impact of changes in market conditions on a stock the higher the volatility level and the lower the impact of changes in market conditions on a stock price the lower the volatility. However the size of a stock does not necessarily determine the level of his volatility, a
stock may be small but still have a large volatility level and stock may be large and have low volatility level.
A firm is considering three capacity alternatives: A, B, and C. Alternative A would have an annual fixed cost of $100,000 and variable costs of $22 per unit. Alternative B would have annual fixed costs of $120,000 and variable costs of $20 per unit. Alternative C would have fixed costs of $80,000 and variable costs of $30 per unit. Revenue is expected to be $50 per unit. A) Which alternative has the lowest break-even quantity? B) Which alternative will produce the highest profits for an annual output of 10,000 units? C) At what volumes of output would the company be indifferent between each pair of choices? Path: p Words:0
Answer:
A) Alternative A has the lowest preak-even point at 3,572 units
B) Both alternatives A and B will produce the highest profit of $180,000.
C) 10,000 units between A and B
2,500 units between A and C
4,000 units between B and C
Explanation:
The revenue functions for each of the alternatives are:
[tex]R_A = (\$50-\$22)n - \$100,000\\R_B = (\$50-\$20)n - \$120,000\\R_C = (\$50-\$30)n - \$80,000[/tex]
Where 'n' is the annual output, in units produced.
A) At the break-even point, revenue is equal to zero. The break-even outputs for each alternative are:
[tex]0 = (\$50-\$22)n_A - \$100,000\\n_A = 3,572\\0 = (\$50-\$20)n_B - \$120,000\\n_B = 4,000\\0 = (\$50-\$30)n_C - \$80,000\\n_A = 4,000\\[/tex]
Alternative A has the lowest preak-even point at 3,572 units.
B) The revenues for each alternative at n=10,000 units are:
[tex]R_A = (\$50-\$22)10,000 - \$100,000\\R_A = \$180,000R_B = (\$50-\$20)10,000 - \$120,000\\R_B= \$180,000\\R_C = (\$50-\$30)10,000 - \$80,000\\R_C = \$120,000[/tex]
Both alternatives A and B will produce the highest profit of $180,000.
C) As seen above, for n=10,000 the company would be indifferent between A and B.
Between A and C:
[tex]R_A = R_C\\ (\$50-\$22)n - \$100,000 = (\$50-\$30)n - \$80,000\\n=\frac{100,000-80,000}{28-20} \\n=2,500[/tex]
Between B and C:
[tex]R_B = R_C\\ (\$50-\$20)n - \$120,000 = (\$50-\$30)n - \$80,000\\n=\frac{120,000-80,000}{30-20} \\n=4,000[/tex]
The break-even quantity, highest profits for an annual output of 10,000 units, and volumes of output where the company would be indifferent between each pair of options can be calculated using principles of cost-analysis and revenue. These involve the calculation of break-even points, profits and equality of total costs.
Explanation:In order to calculate the break-even quantities for alternatives A, B, and C, we need to figure out the point at which the total revenue equals the total costs. This can be done using the formula for break-even point: Break-even quantity = Fixed costs / (Price - Variable costs per unit).
To find the highest profits for an annual output of 10,000 units, we need to calculate the total costs for each option and subtract these from the total revenue. This yields the profit for each option: Profit = Total revenue - Total costs.
Lastly, to determine at what volumes of output the company would be indifferent between each pair of choices, we need to set the total costs for each option equal to each other and solve for the quantity: Total costs_A = Total costs_B = Total costs_C.
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The financial statements for Highland Corporation included the following selected information: Common stock $ 1,600,000 Retained earnings $ 900,000 Net income $ 1,000,000 Shares issued 90,000 Shares outstanding 80,000 Dividends declared and paid $ 800,000 The common stock was sold at a price of $30 per share. What is the amount o f additional paid-in capital?
What was the amount of retained earnings at the beginning of the year?
How many shares are in treasury stock?
Answer:
Please see attachment .
Explanation:
Please see attachment .
The amount of retained earnings at the beginning of the year is $700,000 and numbers of shares that are in treasury stock is 10,000 shares.
Retained earningsa. Beginning Retained earnings:
Beginning Retained earnings=Endingn retained earnings-Net income+Dividends
Beginning Retained earnings=$900,000-$1,000,000+$800,000
Beginning Retained earnings=$700,000
b. Number of shares:
Treasury stock=Issued shares-Outstanding shares
Treasury stock=90,000-80,000
Treasury stock=10,000 shares
Inconclusion the amount of retained earnings at the beginning of the year is $700,000 and numbers of shares that are in treasury stock is 10,000 shares.
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State whether each of the following events will result in a movement along the market demand curve for labor in electronics factories in China or whether it will cause the market demand curve for labor to shift. If the demand curve shifts, indicate whether it will shift to the left or to the right and draw a graph to illustrate the shift.
The wage rate declines.
b. The price of televisions declines.
c. Several firms exit the TV market in China.
d. Chinese high schools introduce new vocational courses in assembling electronic products
Final answer:
The decline in wage rate results in movement along the demand curve for labor. The decrease in the price of televisions and the exit of several firms from the TV market in China cause the demand curve for labor to shift to the left. New vocational courses could potentially shift the demand curve for labor to the right.
Explanation:
When analyzing shifts in the market demand curve for labor in electronics factories in China, different factors will have distinct impacts. Below are the analyzed scenarios:
The wage rate declines: This will result in a movement along the existing demand curve for labor, as it reflects a change in the quantity of labor demanded at a lower wage rate, rather than a shift in the overall demand for labor.The price of televisions declines: This will likely cause the demand curve for labor to shift to the left, since lower prices for televisions could reduce producers' revenue and, consequently, the number of workers they can afford to hire.Several firms exit the TV market in China: This would also typically result in a shift to the left of the labor demand curve because there would be fewer firms demanding labor.Chinese high schools introduce new vocational courses in assembling electronic products: This could potentially shift the labor demand curve to the right as it might increase the productivity of the labor force, making workers more valuable to employers.Kando Company incurs a $11.00 per unit cost for Product A, which it currently manufactures and sells for $13.50 per unit. Instead of manufacturing and selling this product, the company can purchase it for $6.00 per unit and sell it for $11.30 per unit. If it does so, unit sales would remain unchanged and $6.00 of the $11.00 per unit costs of Product A would be eliminated.
1. Prepare Incremental cost analysis. Should the company continue to manufacture Product A or purchase it for resale? (Round your answers to 2 decimal places.)
In the format below:
Manufacture A Purchase Product B
sales
costs
aviodable cost
unavoidable costs
cost to purchase
totals costs
sales
The company should...
Manufacture A:
- Sales: $13.50 per unit
- Costs: $11.00 per unit
- Avoidable costs: $6.00 per unit
- Unavoidable costs: $5.00 per unit ([$11.00 - $6.00] per unit)
- Total costs: $11.00 per unit
Purchase Product B for Resale:
- Sales: $11.30 per unit
- Cost to purchase: $6.00 per unit
- Total costs: $6.00 per unit
The company should purchase Product B for resale rather than manufacturing Product A, as the total cost per unit for Product B is lower compared to the total cost per unit for manufacturing Product A.
Explanation:The incremental cost analysis compares the costs and revenues associated with manufacturing Product A against purchasing and reselling Product B. For manufacturing Product A, the sales price is $13.50 per unit, with a cost of $11.00 per unit. However, $6.00 per unit of these costs can be avoided, leaving $5.00 per unit as unavoidable costs. Thus, the total cost of manufacturing Product A remains at $11.00 per unit.
On the other hand, purchasing Product B for resale incurs a cost of $6.00 per unit but allows sales at $11.30 per unit. In this scenario, the total cost per unit for Product B is $6.00, which is lower than the $11.00 total cost per unit for manufacturing Product A. As a result, opting to purchase Product B for resale would be more beneficial for Kando Company, offering a lower total cost per unit and potentially increasing overall profitability compared to manufacturing Product A.
Ted’s wallet is as empty as his bank account, and he needs $3,500 immediately.Fortunately, he has three gold coins that he inherited from his grandfather.Each is worth $2,500, but it is Sunday, and the local rare-coin store is closed. When approached, Ted’s neighbor Andreaagrees to buy the first coin for $2,300. Another neighbor, Cami, agrees to buy the second for $1,100. A final neighbor,Lorne, offers 'all the money I have on me"—SlOO—for the last coin. Desperate, Ted agrees to the proposal. Which of thedeals is supported by consideration? (a) Ted’s agreement with Andrea, only(b) Ted’s agreements with Andrea and Cami, only(c) All three ofthe agreements(d) None ofthe agreements
Answer:B. Teddy's agreement with Andrea and Cami, only.
Explanation:
Consideration is anything of value that moves from both parties to a contract, it must equally be specific and devoid of ambiguity.
The agreement with Andrea and Camil both meet these requirements. However the agreement with Lorne is not devoid of ambiguity because we are not sure of the amount of his consideration.
Which of the following are effective means of aligning management goals with shareholder interests?
I. Employee stock options
II. Threat of a takeover
III. Management bonuses tied to performance goals
IV. Threat of a proxy fight
A. I and III only
B. II and IV only
C. I, II, and III only
D. I, III, and IV only
E. I, II, III, and IV
Answer:
E. I, II, III, and IV
Explanation:
All of the mentioned strategies would work.
Employee stock option provides the enthusiasm and energy to perform good among employees. This is beneficial for the company and shareholders as well.
The threat of takeover, scares the shareholders in losing their share, and effective voting right. Also the management feels threaten as the new company might replace them with the management personnel they desire.
Management bonuses help management to get a boost in energy and accordingly motivates to work good, also the shareholders desiring performance will find it effective.
The threat of proxy fight engages both the parties to behave properly towards each other and respect each other.
On March 31, 2011, M. Belotti purchased the right to remove gravel from an old rock quarry. The gravel is to be sold as roadbed for highway construction. The cost of the quarry rights was $164,000, with estimated salable rock of 20,000 tons.
During 2011, Belotti loaded and sold 4,000 tons of rock and estimated that 16,000 tons remained at December 31, 2011.
At January 1, 2012, Belotti estimated that 20,000 tons still remained.
During 2012, Belotti loaded and sold 8,000 tons.
Belotti would record depletion in 2012 of:
(A) $54,667. (B) $65,600. (C) $52,480. (D) $55,760.
Answer:
Belotti would record depletion in 2012 of:
(C) $52,480.
Explanation:
The cost of the quarry rights was $164,000.Estimated salable rock of 20,000 tonsUnits Cost for Depletion : $ 8,20During 2011, Belotti loaded and sold 4,000 tons, it means a depletion during 2011 of $32,800.
At December 2011 the monetary balance of the quarry was $131.200
At January 1, 2012, Belotti estimated that 20,000 tons still remained.
The new unit cost of the quarry is $6,56
During 2012, Belotti loaded and sold 8,000 tons, it means a depletion during 2012 of $52,480, 8,000 tons * $6,56 = $52,480
In 2019, Britt drove her automobile 16,200 miles for business. She incurred $900 in gas expenses and $235 in tolls associated with the business mileage. Assuming Britt uses the standard mileage method, her deduction is
Answer:
$9,631
Explanation:
In 2019, the Standard mileage rate deduction for the business purposes is 58 cents per mile.
Therefore,
Her deduction is as follows:
= (No. of miles drove × 58 cents per mile) + Tolls associated with the business mileage
= (16,200 × 58 cents per mile) + $235
= 9,396 + 235
= $9,631
Therefore, by using the standard mileage method, her deduction is $9,631.
Jiu has $105,000 of losses from a real estate rental activity in which she actively participates. She has other rental income of $25,000 and other passive activity income of $32,000. Her AGI before considering these items of income and loss is $95,000.Does she have any suspended losses to carry over? Explain.
Jiu may have $23,000 in suspended losses to carry over to future years. She can offset $57,000 of her $105,000 real estate rental activity loss with her passive activity income and potentially deduct an additional $25,000 of the loss against her AGI of $95,000, due to IRS allowance for rental real estate losses.
Explanation:The question pertains to whether Jiu has any suspended losses to carry over after accounting for rental activity losses, additional rental income, other passive activity income, and her adjusted gross income (AGI). Suspended losses are losses from passive activities that exceed income from passive activities and cannot be deducted in the current year, but can be carried forward to future tax years.
Jiu's real estate rental activity loss is $105,000. She actively participates in this activity, which allows her to offset this loss against her passive activity income ($25,000 from other rental income and $32,000 from additional passive activity income), totaling $57,000.
After applying the passive activity income ($57,000) against the rental activity loss ($105,000), Jiu would be left with $48,000 ($105,000 - $57,000) in losses that cannot be currently deducted. Considering her AGI of $95,000, which is before considering these items of income and loss, the nondeductible portion depends on additional tax rules that apply to losses from passive activities and her income level.
However, the IRS allows up to $25,000 in rental losses to be deducted if the taxpayer's modified AGI is $100,000 or less, with the deduction phaseout starting at an AGI of $100,000 and completely phasing out at $150,000. Since Jiu's AGI is $95,000, she can deduct $25,000 of the loss, potentially reducing the suspended loss to $23,000 ($48,000 - $25,000). The remaining loss may be carried over to future years.
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Jiu has $23,000 suspended losses to carry over after offsetting $25,000 special allowance and $57,000 passive income.
To determine if Jiu has any suspended losses to carry over, we need to consider the passive activity loss (PAL) rules under the Internal Revenue Code. Passive activity losses can only offset passive activity income unless certain exceptions apply.
Jiu's scenario is as follows:
- Real estate rental activity loss: $105,000
- Other rental income: $25,000
- Other passive activity income: $32,000
- Adjusted Gross Income (AGI) before considering these items: $95,000
Step-by-Step Analysis:
1. Calculate Total Passive Activity Income:
- Other rental income: $25,000
- Other passive activity income: $32,000
- Total passive activity income: $25,000 + $32,000 = $57,000
2. Offset Losses Against Passive Income:
- Jiu can use her passive activity income to offset her passive activity losses.
- Loss from real estate rental activity: $105,000
- Passive activity income available to offset this loss: $57,000
Therefore, $105,000 (loss) - $57,000 (income) = $48,000 (remaining loss)
3. Special Allowance for Real Estate Activities:
- The IRS allows an exception for real estate professionals and those who actively participate in rental real estate activities, permitting them to offset up to $25,000 of real estate losses against non-passive income if their AGI is $100,000 or less. This allowance phases out between $100,000 and $150,000 AGI.
- Jiu's AGI before considering these items is $95,000, so she qualifies for the full $25,000 special allowance.
Therefore, from the remaining $48,000 loss:
- Special allowance: $25,000
Remaining loss after special allowance: $48,000 - $25,000 = $23,000
Conclusion:
Jiu has $23,000 of suspended passive activity losses to carry over to future years because she has utilized $25,000 against the special allowance and $57,000 against passive income.
Summary in 20 words:
Jiu has $23,000 suspended losses to carry over after offsetting $25,000 special allowance and $57,000 passive income against $105,000 loss.
Action Aaron McKinney is a cost accountant for Majik Systems Inc. Martin Dodd, vice president of marketing, has asked Aaron to meet with representatives of Majik Systems’ major competitor to discuss product cost data. Martin indicates that the sharing of these data will enable Majik Systems to determine a fair and equitable price for its products. Would it be ethical for Aaron to attend the meeting and share the relevant cost data? Why or why not?
Answer:It will not be ethical for Aaron to attend the meeting and share relevant cost data
Explanation:
Sharing of the relevant cost data will enable the competitor to have a good idea of what goes into Aaron production and it's pricing policy which may be use to the advantages of the competitor.
Furthermore there is no law that protect a firm from his competitor abuse of information obtain through mutual consent.
Sharing cost data with a competitor would be unethical and potentially illegal. Aaron should decline the invitation and communicate the concerns to his superiors.
Explanation:It would not be ethical for Aaron to attend the meeting and share the relevant cost data. As a cost accountant, Aaron has a responsibility to his company and its customers to keep sensitive information confidential. Sharing proprietary cost data with a competitor could harm his company's competitive advantage and violate confidentiality agreements.
Furthermore, sharing cost data with a competitor could be seen as anti-competitive behavior and may even be illegal under antitrust laws. Companies are expected to compete fairly and independently determine their prices based on their own cost structures.
Aaron should decline the invitation and communicate the potential ethical and legal concerns to his superiors. He could suggest exploring other strategies for determining a fair and equitable price, such as market research, customer feedback, or benchmarking against industry standards.
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Which of the following probably occurred as the U.S. economy experienced increasing real GDP in 1954? Check all that apply.
Car sales declined.
Total real income increased.
The unemployment rate declined.
Corporate profits increased.
All optionsTotal real income increased.probably occurred as the U.S. economy experienced increasing real GDP in 1954
When the economy grows and real GDP rises, overall income tends to increase as more goods and services are produced, leading to higher wages and earnings.
Economic growth typically leads to job creation, as businesses expand production and hire more workers, reducing unemployment.
Corporate profits increased: With a growing economy, businesses often experience higher demand for their products and services, which generally leads to increased profits.
In long-run equilibrium, all firms in the industry earn zero economic profit. Why is this true? All firms in perfectly competitive industries earn zero economic profit in the long run because A. firms are price takers, maximizing profit by producing where total revenue equals total cost. B. if profit were positive, then firms would produce more, increasing price, and if profit were negative, then firms would produce less, decreasing price. C. firms are price takers, maximizing profit by producing where price equals marginal cost. D. if profit were positive, then firms would enter, decreasing price, and if profit were negative, then firms would exit, increasing price. E. barriers to entry and exit prevent firms from earning positive or negative economic profit.
Answer:
D. if profit were positive, then firms would enter, decreasing price, and if profit were negative, then firms would exit, increasing price.
Explanation:
Perfectly competitive firms are price takers, hence they cannot influence the price of their products.
Perfectly competitive industries have no barriers to entry or exist of firms ,so if in the short run, firms are earning economic profit, then firms would enter into the industry , decreasing price, and if profit were negative, then firms would exit, increasing price. This makes perfect competitive firms to earn zero economic profit in the long run.
On January 1, 2019, Ellen Greene Company makes the following acquisition.
Purchases land having a fair value of $200,000 by issuing a 5-year, zero-interest-bearing promissory note in the face amount of $337,012.
On December 31, 2019, how much interest expense should be recognized on the zero-interest-bearing promissory note? (Hint: First solve for the implied interest rate) Round your final answer to the nearest dollar.
Answer:
The interest expense should be recognized on the zero-interest-bearing promissory note is 22.000
Explanation:
Interest expense = (Fair value of the land * Interest rate)
Supposing a interest rate of 11% we get:
Interest expense = 200.000 * 11% = 22.000
The interest expense that should be recognized on the zero-interest-bearing promissory note will be $22000.
From the complete question, the land that was purchased have a fair value of $200,000 and the company has to pay 11% interest for funds from its bank.
Therefore, the interest will be calculated thus:
= Interest rate × Fair value
= 11% × $200,000
= 0.11 × $200,000
= $22000.
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Yellow Press, Inc., buys paper in 1,500-pound rolls for printing. Annual demand is 3 comma 000 3,000 rolls. The cost per roll is $ 875 875, and the annual holding cost is 20 20 percent of the cost. Each order costs $ 75 75. a. How many rolls should Yellow Press order at a time?
Answer:
59 orders
Explanation:
For computing the how many rolls should order at a time, first we have to determine the economic order quantity which is shown below:
The computation of the economic order quantity is shown below:
= [tex]\sqrt{\frac{2\times \text{Annual demand}\times \text{Ordering cost}}{\text{Carrying cost}}}[/tex]
where,
Carrying cost = $875 × 20% = $175
And, other items values would remain the same
ow put these values to the above formula
So, the value would be equal to
= [tex]\sqrt{\frac{2\times \text{3,000}\times \text{\$75}}{\text{\$175}}}[/tex]
= 50.71 units
Now The number of orders would be equal to
= Annual demand ÷ economic order quantity
= $3,000 ÷ 50.71 units
= 59 orders
Using the Economic Order Quantity (EOQ) formula, it's determined that Yellow Press should order approximately 51 rolls at a time to minimize costs.
Explanation:
To determine how many rolls Yellow Press should order at a time, we apply the Economic Order Quantity (EOQ) model. The EOQ formula is given as:
EOQ = √(2DS)/H}
where:
D is the annual demand (in this case, 3,000 rolls),
S is the cost per order (in this case, $75),
H is the annual holding cost per unit (which is 20% of the cost per roll, so 0.20 x $875 = $175).
Plugging the numbers into the EOQ formula, we get:
EOQ =√{(2 × 3000 rolls × $75) / $175}
EOQ = √{(450,000) / $175}
EOQ = √{2,571.43}
EOQ ≈ 50.71 rolls
Since Yellow Press cannot order a fraction of a roll, it should order 51 rolls at a time to minimize the combined costs of ordering and holding inventory.
The major problem addressed by the warehouse layout strategy is: O requiring frequent close contact between forklift drivers and item pickers. O balancing product flow from one work station to the next. O locating the docks near a convenient access point to the closest highway minimizing difficulties caused by material flow varying with each product. O addressing trade-offs between space and material handling.
Answer:
addressing trade-offs between space and material handling.
Explanation:
Warehouses are the one which store goods for the daily needs and that of every nature, raw material, work in process or finished. It basically targets to store goods so that there is no shortage of goods in case of need.
Since the cost of warehouses are huge because of the area and other facilities they offer, there is a standard planning which a company performs to meet the requirements of goods and also shall be cost effective.
There for the warehouses face this problem of balancing in between the cost related to material handling and that of space available.
The primary challenge addressed by warehouse layout strategy is managing the trade-offs between storage space and material handling. Just-in-time delivery systems and trade site locations heavily influence warehouse positioning due to factors such as proximity to suppliers and transportation hubs.
Explanation:The major problem addressed by the warehouse layout strategy is addressing trade-offs between space and material handling. A well-designed warehouse layout should ensure that there is a balance in the use of space and the efficiency of moving materials around. Central to this issue is how the docks are positioned in relation to access points to highways, optimizing material flow, and how close or far suppliers are in terms of just-in-time delivery systems. Warehouses have to be designed to handle the varying material flow that comes with different products, which includes understanding Weber's Location Model and considering land costs and transportation methods.
Advanced technology, transportation methods, and effective labor policies play a crucial role in reducing congestion in shipping networks and maintaining effective supply chains, particularly in times of national emergencies. The practice of just-in-time delivery, such as used by car manufacturers, indicates the importance of having parts delivered when needed, which influences the location of suppliers and warehouses.
Trade site locations are also a critical consideration, as historically cities that offer multiple transportation modes grow larger due to the convenience of breaking bulk. Therefore, considering site factors such as transportation intersections is key for business logistics.
Managerial leaders: Group of answer choices
build a strategic vision to change the organization.
act as change agents in the organization.
support and guide the performance and well-being of individual employees.
possess all of the competencies of great leaders.
engage in participative leadership.
Answer:
Support and guide the performance and well-being of individual employees.
Explanation:
A managerial leader is responsible for making his or her subordinates perform their tasks accordingly and effectively to achieve the expected organizational goals and results.
The main function of a manager is to manage, control and coordinate employee actions always with a focus on organizational results.
A good managerial leader must be flexible, have a vision of organizational systems and processes, set a schedule and know his subordinates, their expectations and motivations, in order to be always available to help improve their competencies and skills that will be essential to achieve. of goals and results.
Bet'R Bilt Bikes just announced that its annual dividend for this coming year will be $2.42 a share and that all future dividends are expected to increase by 2.5% annually. What is the market rate of return if this stock is currently selling for $22 a share?
Answer:
13.50%
Explanation:
The computation of the market rate of return is shown below:
Current selling price for share = Annual dividend ÷ (Market rate of return - growth rate)
$22 = $2.42 ÷ (Market rate of return - 2.5%)
(Market rate of return - 2.5%) = $2.42 ÷ $22
(Market rate of return - 2.5%) = 11%
So, the market rate of return would be
= 11% + 2.5%
= 13.50%
The market rate of return for Bet'R Bilt Bikes, given the current annual dividend of $2.42 per share, an expected annual dividend growth rate of 2.5% and the current share price of $22, is calculated to be approximately 13.5%.
Explanation:Your question is about determining the market rate of return for Bet'R Bilt Bikes, given the annual dividend and the expected annual dividend growth. To do this, we use the Gordon Growth Model, also known as the Dividend Discount Model (DDM). The formula is as follows:
Market Rate of Return = (Annual Dividend payment/Price per share) + Annual Growth Rate
Plugging in the values from your question, we get:
Market Rate of Return = (2.42 / 22) + 0.025 = 0.135 or 13.5%
So, the market rate of return for Bet'R Bilt Bikes, given the information provided, is approximately 13.5%.
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Hugo has been working on his company’s new marketing campaign for the past few weeks. He is now looking at the target market and the message, trying to decide between using an email marketing campaign or a guerilla marketing campaign. Which step of the marketing planning process is Hugo struggling with at the moment? a. the fourth step: defining the message b. the eighth step: measuring the results and refining the approach as needed c. the sixth step: determining the promotional mix: which tools to use, when, and how much
Answer:C. the sixth step determining the promotional mix: which tools to use, when and how much.
Explanation:
By working on his product, the market, the message content, advertising methods,the target market, all this show that he his in the sixth step.
Grover Corporation purchased a truck at the beginning of 2017 for $109,200. The truck is estimated to have a salvage value of $4,200 and a useful life of 120,000 miles. It was driven 21,000 miles in 2017 and 29,000 miles in 2018. What is the depreciation expense for 2018?a. $27,405b. $7,000c. $25,375d. $43,750
Answer:
The depreciation expense for 2018: c. $25,375
Explanation:
Grover Corporation uses the units-of-production depreciation method. Depreciation expense is calculated by the following formula:
Depreciation Expense = [(Cost of asset − Salvage Value )/Life in Number of Units
] x Number of Units Produced = Depreciation Expense per unit x Number of Units Produced
In the company,
Depreciation Expense per mile = ($109,200-$4,200)/120,000= $0.875
The truck was driven 29,000 miles in 2018, so the depreciation expense for 2018: $0.875 x 29,000 = $25,375
Which of the following formulas is accurate for calculating gross rating points (GRP)? Multiple Choice A. impressions multiplied by frequency reach multiplied by B. impressions reach multiplied by frequency reach divided by C. impressions reach divided by frequency
Answer:
The correct answer is : reach multiplied by frequency.
Explanation:
In marketing, the Gross Rating Point or GRP measures the size of an ad campaign during a given medium or schedule. The concept is typically confused with the measure of the size of potential consumers reached but GRP is not in charge of that matter. The GRP is calculated in percent of the target market reached multiplied by the exposure frequency.
Pratte Boat Wash's cost formula for its cleaning equipment and supplies is $2,530 per month plus $44 per boat. For the month of April, the company planned for activity of 58 boats, but the actual level of activity was 12 boats. The actual cleaning equipment and supplies for the month was $3,160. The spending variance for cleaning equipment and supplies in April would be closest to:_________.
Answer:
$102 unfavorable
Explanation:
The computation of the spending variance is shown below:
= Actual supplies cost - expected supplies cost
where
Actual supplies cost is $3,160
And, the flexible supplies cost would be
= Actual level of activity × price per boat + supplies cost per month
= 12 boats ×$44 + $ 2,530
= $528 + $ 2,530
= $3,058
Now put these values to the above formula
So, the value would equal to
= $3,160 - $3,058
= $102 unfavorable
= $11,389
Now put these values to the above formula
So, the value would equal to
= $11,700 - $11,389
= $311 unfavorable