Answer:
B. an unfavorable balance of trade and payments
Explanation:
The BOP or the balance of trade is defined as the net gains or net exports that make the balance of payments and is said to be favorable when the country export more and imports less and is a positive change. It is said to be negative when the country imports more and exports less thus unfavorable in terms of the trade and payments. Hence it means that the country has a deficit and this can impact the services and is not good for the economic growth perspective."Moccasin Company manufactures cotton shirts. 12,000 shirts are produced during the first week of July. The unit quantity standard is 6 meters cloth per shirt and the actual quantity used was 0.50 meters per shirt. Determine the quantity of cloth that should be used for the actual output of 12,000 shirts."
Answer:
The answer is 72,000 Meters.
Explanation:
From the question given, let us recall:
Moccasin Company produces cotton shirts. =12,000
The unit quantity standard = 6 meters
The quantity used actually was = 0.50 meters per shirt
The next step is to determine the quantity of cloth that should be used for the actual output of 12,000 shirts.
Quantity of cloth that should be used
= 12,000 * 6 meters cloth per shirt
= 72,000 Meters
g Oregon Corp. prepares its financial statements annually and has a calendar year end. The adjusted trial balance ( NO MORE ADJUSTING ENTRIES ARE NEEDED) shows the following balances at December 31, 2019 (all accounts have normal balances): December 31, 2019 General Ledger Balances: Bad debt expense $ 100,000 Accounts Receivable 2,000,000 Allowance for Doubtful Accounts 300,000 What amount would be reported on Oregon Corp's balance sheet as the NET accounts receivable (the cash realizable value) at December 31, 2019
Answer:
$1,700,000
Explanation:
The computation of the NET accounts receivable (the cash realizable value) at December 31, 2019 is shown below:
= Account receivable - allowance for doubtful debts
= $2,000,000 - $300,000
= $1,700,000
By deducting the allowance for doubtful debts from the account receivable we can get the net account receivable or the cash realizable value
Therefore we ignored the bad debt expense
anufactures a specialty precision scale. For January, the company expects to sell 1 comma 500 scales at an average price of $ 2 comma 300 per unit. The average manufacturing cost of each unit sold is $ 1 comma 420. Variable operating expenses for the company will be $ 1.10 per unit sold and fixed operating expenses are expected to be $ 7 comma 700 for the month. Monthly interest expense is $ 3 comma 200. The company has a tax rate of 30 % of income before taxes. Prepare Bell Smythe's budgeted income statement for January.
Answer:
Budgeted net income of $913,295.00
Explanation:
The budgeted income statement comprises of budgeted revenue less variable production cost and variable overhead,as well as fixed expenses.
The interest expense and tax are deducted in order to arrive at net income
Bell Budgeted Income Statement for January:
Budgeted sales revenue ($2,300*1,500) $3,450,000.00
Variable Budgeted manufacturing cost($1420*1500) ($2,130,000.00)
Gross profit $1,320,000.00
Variable operating expenses($1.10*1500) ($1,650.00)
Fixed operating expenses ($7,700.00)
Operating income $1,310,650.00
Monthly interest expense ($3,200.00)
Taxes at the rate of 30%(1,310,450.00-3200)*30% ($392,175 .00)
Budgeted net income $913,295.00
Interest expense is a deductible expense in computing,that accounted for deducting from operating income before applying the tax rate of 30%
Dab Corporation was organized on January 1, Year 1. During Year 1, Dab had the following transactions relating to shareholders' equity:Issued 28,000 shares of common stock in exchange for cash of $442,400Reported net income of $98,000Reported net holding gains on available-for-sale investments in debt securities of $1,000Paid dividends of $54,000What is total shareholders’ equity at the end of Year 1?please explain how/show work,
Answer:
$487,400
Explanation:
Equity which represents the amount owed to the owners of the business includes retained earnings (which is the accumulation of the net income/loss over the years less dividends paid) and common shares.
The total shareholders’ equity at the end of Year 1
= $442,400 + $98,000 + $1,000 - $54,000
= $487,400
Common stock, net gain on available-for-sale investments in debt securities and report net profit increases the shareholder's equity while dividend paid reduces it hence the signs assigned.
Ben and John formed BCD Inc., a corporation, in 2013. Ben received 80% of the voting common stock, the only class of stock and John received the remaining 20% of the stock. In 2014, Ben transferred additional property to BCD Inc. The property had an adjusted basis to Ben of $40,000 and a fair market value of $50,000 on the date of the transfer. On the same day, and in exchange for the property he transferred to BCD Inc., Ben received cash of $15,000 and additional stock worth $35,000. How much gain was recognized by Ben as a result of this transaction
Answer:
Gain recognized by Ben = $10,000
Explanation:
Given Data:
Adjusted basis of property=$40000
Cash received = $15000
Additional stock received = $35000
Total received = Cash received + Additional stock received
= $35000 + $15000
= $50000
Gain recognized by Ben = Total received - Adjusted basis of property
=$50,000 -$40,000
= $10,000
Therefore, gain recognized by Ben = $10,000
Mills Corporation acquired as a long-term investment $290 million of 8% bonds, dated July 1, on July 1, 2021. Company management has classified the bonds as an available-for-sale investment. The market interest rate (yield) was 6% for bonds of similar risk and maturity. Mills paid $340 million for the bonds. The company will receive interest semiannually on June 30 and December 31. As a result of changing market conditions, the fair value of the bonds at December 31, 2021, was $330 million.
Required:
a. Prepare the journal entry to record Mills’ investment in the bonds on July 1, 2018 and interest on December 31, 2018, at the effective (market) rate.
b. At what amount will Mills report its investment in the December 31, 2018, balance sheet?
c. Suppose Moody’s bond rating agency upgraded the risk rating of the bonds, and Mills decided to sell the investment on January 2, 2019, for $290 million. Prepare the journal entry to record the sale.
Answer:
Journal Entries are given below
Explanation:
Mills Corporation-journal Entries
Date Particulars Debit (In Miln) Credit (in Mln)
01-Jul-21 Bond Investment $290.00
Investment premium $50.00
Cash $340.00
Investment recorded
31-Dec-21 Cash ($290 * 8% * 6/12) $11.60
Premium bond investment $1.40
Interest revenue ($340*6%*6/12) $10.20
Revenue recognized for bond interest and amortization of discount.
31-Dec-21 Unrealized holding gain or loss $8.60
Fair value adjustment ($340 - $330 - $1.40) $8.60
investment recorded at fair value.
02-Jan-19 Fair value adjustment Dr $8.60
Reclassification adjustment - $8.60
Fair value adjustment at the time of sale
02-Jan-19 Cash $290.00
Loss on sale of investment $48.60
bond investment premium $48.60
Investment in Bond $290.00
Sale of investment.
Direct Materials Purchases Budget Anticipated sales for Safety Grip Company were 42,000 passenger car tires and 19,000 truck tires. Rubber and steel belts are used in producing passenger car and truck tires as follows: Passenger Car Truck Rubber 35 lbs. per unit 78 lbs. per unit Steel belts 5 lbs. per unit 8 lbs. per unit The purchase prices of rubber and steel are $1.20 and $0.80 per pound, respectively. The desired ending inventories of rubber and steel belts are 40,000 and 10,000 pounds, respectively. The estimated beginning inventories for rubber and steel belts are 46,000 and 8,000 pounds, respectively. Prepare a direct materials purchases budget for Safety Grip Company for the year ended December 31, 20Y9. Safety Grip Company Direct Materials Purchases Budget For the Year Ending December 31, 20Y9 Rubber Steel Belts Total Pounds required for production: Passenger tires lbs. lbs. Truck tires Total pounds available lbs. lbs. Total units purchased lbs. lbs. Unit price x $ x $ Total direct materials to be purchased $
Answer and Explanation:
The preparation of direct materials purchases budget is shown below:-
Safety Grip Company
Direct Materials Purchases Budget
For the Year Ending December 31, 2019
Rubber Steel Belts
Pounds required for production
Passenger tires $1,470,000 210,000
(42,000 × 35 lbs) (42,000 × 5 lbs)
Truck tires 1,482,000 1520,00
(19,000 × 78 lbs) (42,000 × 8 lbs)
Add: Desired ending inventory 40,000 10,000
Total 2,992,000 372,000
Less: Estimated beginning
inventory 46,000 8,000
Total units purchased 2,946,000 364,000
Unit price $1.20 $0.80
Total direct materials to be
purchased $3,535,200 $291,200
(2,946,000 × $1.20) (364,000 × $0.80)
Therefore by above we have prepared the direct materials purchases budget.
In the month of November Pharoah Company wrote checks in the amount of $68800. In December, checks in the amount of $94176 were written. In November, $63002 of these checks were presented to the bank for payment, and $80970 in December. What is the amount of outstanding checks at the end of December?
The amount of outstanding checks for Pharoah Company at the end of December is $19,004.
To calculate the amount of outstanding checks at the end of December for Pharoah Company, we need to identify the total checks written and the amount that was presented to the bank for payment for both November and December.
In November, Pharoah Company wrote checks totaling $68,800, of which $63,002 were presented to the bank. In December, $94,176 checks were written, with $80,970 being presented to the bank.
Outstanding checks are those that have been written but not yet presented to the bank for payment.
To find the total outstanding checks at the end of December, we first find the outstanding checks for November: $68,800 - $63,002 = $5,798.
Then we sum this amount with the checks written in December and subtract the amount of checks presented in December: ($5,798 + $94,176) - $80,970 = $19,004.
Thus, the amount of outstanding checks at the end of December is $19,004.
Kansas Company has a current production capacity level of 200,000 units per month. At this level of production, variable costs are $0.60 per unit and fixed costs are $0.50 per unit. Current monthly sales are 173,000 units. 3M Company has contacted Kansas Company about purchasing 20,000 units at $1.00 each. Current sales would not be affected by the special order and no additional fixed costs would be incurred on the special order. If the order is accepted, what is Kansas Company's change in profits
Answer:
Effect on income= $8,000 increase
Explanation:
Giving the following information:
Variable costs are $0.60 per unit
3M Company has contacted Kansas Company about purchasing 20,000 units at $1.00 each.
Because it is a special offer and there is unused capacity, we will not take into account the fixed costs:
Effect on income= 20,000*(1 - 0.6)= $8,000 increase
Company had no investments prior to the current year. It had the following transactions involving short-term available-for-sale and held-to-maturity securities during the year. Prepare journal entries to record the following transactions associated with the investment purchases.
January 10 Purchased 6,000 shares of Gray Company stock at $15.00 plus a broker's fee of $700. (Classified as short-term available-for-sale securities)
June 1 Purchased $180,000 of Duke Company 4%, five-year bonds at par value. Interest payments are paid semiannually on June 1 and December 1. (Classified as held-to- maturity)
July 1 Sold 3,000 shares of Gray company stock at $22 less a $600 brokerage fee.
December 1 Received a check for the first semiannual interest payment on the Duke Company bonds.
(show calculations in description of JE when appropriate) Date Description DR CR Jan. 10 June 1 July 1 Dec. 1
Answer:
Date Description DR CR
Jan10 Short-term available for sales $90,700
cash 90,700
June 1 Held to maturity securities 180,000
cash 180,000
July 1 Cash 65,400
brokerage fee 600
Short-term available for sale securities 45,000
Income statement 15,000
workings
Jan 10 purchases = (6000*$15 ) + 700= $90,700
july 1 sales = 3000*$22 = $66,000
Explanation:
Fortune, Inc., is preparing its master budget for the first quarter. The company sells a single product at a price of $25 per unit. Sales (in units) are forecasted at 42,000 for January, 62,000 for February, and 52,000 for March. Cost of goods sold is $12 per unit. Other expense information for the first quarter follows.Commissions 11 % of salesRent $ 18,000 per monthAdvertising 12 % of salesOffice salaries $ 78,000 per monthDepreciation $ 47,000 per monthInterest 11 % annually on a $260,000 note payableTax rate 30 %I need the commisions exspense, advertising exspense, interrest expense and Income Tax expense #sWould be nice to get how they were calculated as wellFORTUNE, INC.Budgeted Income StatementFor Quarter Ended March 31Sales $3,900,000Cost of goods sold 1,872,000Gross profit 2,028,000Operating expensesCommissions expenseRent expense 54,000Advertising expenseOffice salaries expense 234,000Depreciation expense 141,000Interest expenseTotal operating expenses 429,000Income before taxes 1,599,000Income tax expenseNet income $1,599,000
Answer and Explanation:
The preparation of the income statement is presented below:
Sales $3,900,000
Less: Cost of goods sold $1,872,000
Gross profit $2,028,000
Less: Operating expenses
Commissions expense $429,000
Rent expense $54,000
Advertising expense $468,000
Office salaries expense $234,000
Depreciation expense $141,000
Interest expense $7,150
Total operating expenses -$1,333,150
Income before taxes $694,850
Less: Income tax expense $208,455
Net income $486,395
Working notes:
1. Commissions expense is 11 % of sales
= 11% × $3,900,000
= $429,000
2. Advertising expense is 12 % of sales
= 12% × $3,900,000
= $468,000
Interest expense is 11 % annually on a $260,000
= 11% × 260000 × 3 months ÷ 12 months
= $7,150
Income tax expenses =is
= 30% × $694,850
= $208,455
As we know that the income statement records the expenses and the revenues and the same is shown to determine the net income or net loss for the given period
The manager of a discretionary account places client funds in a suitable investment because it provides a higher commission than alternatives that are also suitable for the client. The selected investment subsequently appreciates in value. This investment manager did not:
a. place the client’s interests first.
b. face an ethical dilemma because the investment was profitable.
c. have a conflict of interest because the investment was suitable for the client.
Answer:
have a conflict of interest because the investment was suitable for the client.
Explanation:
A manager as an agent of the client is supposed to always act in the interest of his principal.
In this scenario the manager places client funds in a suitable investment because it provides a higher commission than alternatives that are also suitable for the client. The selected investment subsequently appreciates in value.
The manager acted in the interest of the client and this resulted in return on investment
Answer: c. have a conflict of interest because the investment was suitable for the client.
Explanation: A conflict of interest situation arises when an individual (the manager of a discretionary account in this instance) has competing interests or loyalties because of their duties to more than one person or organization and serving one interest could adversely affect a duty owed to make decisions for the benefit of a third party (the client). The manager did not have a conflict of interest because the investment was suitable for the client. However, a manager who knowingly places clients funds in an investment which are not in their best interests, but which earn the manager a bigger commission, would be guilty of conflict of interest.
The Red Bud Co. pays a constant dividend of $3.10 a share. The company announced today that it will continue to do this for another 2 years after which time they will discontinue paying dividends permanently. What is one share of this stock worth today if the required rate of return is 8.7 percent?
Answer:
The stock is worth $5.48 today
Explanation:
The dividend on this stock is just like an annuity as the amount of dividend is constant and they are paid after a constant interval of time and for a defined period of time. Thus, the price of this share today will be the present value of annuity or the present value of expected future dividends. Using the present value of ordinary annuity formula, the price of the stock will be,
Price today = 3.1 * [ (1 - (1+0.087)^-2) / 0.087 ]
Price today = $5.475 rounded off to $5.48
An enterprising student has set up an internship clearinghouse for business students. Each student who uses the service fills out a form and lists up to 10 companies that he or she would like to have contacted. The clearinghouse has a choice of two methods to use for processing the forms. The traditional method requires about 20 minutes to review the form and arrange the information in the proper order for processing. Once this setup is done, it takes only two minutes per company requested to complete the processing. The other alternative uses an optical scan/retrieve system, which takes only a minute to prepare but requires five minutes per company for completing the processing. If it costs about the same amount per minute for processing with either of the two methods, when should each be used?
Answer:
If it costs about the same amount per minute for processing with either of the two methods,
The traditional method should be used when there is enough time since it requires 20 minutes to process the information for 10 companies.
The other alternative uses an optical scan/retrieve system should be used in emergencies since it takes just one minute to prepare.
Explanation:
Based on the variables provided, The traditional method involves less time in total because it took longer for the alternative method to complete the processing
The traditional method duration is summarized as follows
20 minutes to review the form and arrange the information in the proper order for processing.
2 minutes per company to complete the processing (2 x 20)
bringing the total duration for review and processing to 40 minutes.
The alternative method which uses an optical scan/retrieve system, which takes only
1 minute to prepare
5 minutes per company for completing the processing (5 x 10)
bringing the total duration to 51 minutes.
The traditional method should be used when a student lists 6 or fewer companies, and the optical scan/retrieve method should be used when a student lists 7 or more companies. This conclusion is reached by calculating the break-even point.
Explanation:To determine when to use each method, you need to find the break-even point; this is when the time it takes for both methods is the same. Let's denote the number of companies as 'n'.
For the traditional method, the time required is 20 minutes for form review plus 2 minutes per company: T1 = 20 + 2n minutes.
For the optical scan, the time required is 1-minute preparation and 5 minutes per company: T2 = 1 + 5n minutes.
To find the break-even point, set T1 equal to T2, and solve for 'n':
20 + 2n = 1 + 5n.
By solving this equation, we find that 'n' equals 6.33. This means that the traditional method should be used when a student lists 6 or fewer companies, and the optical scan/retrieve method should be used when a student lists 7 or more companies.
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Cedar Designs Company, a custom cabinet manufacturing company, is setting standard costs for one of its products. The main material is cedar wood, sold by the square foot. The current cost of cedar wood is $ 7.00 per square foot from the supplier. Delivery costs are $ 0.40 per square foot. Carpenters' wages are $ 20.00 per hour. Payroll costs are $ 3.00 per hour, and benefits are $ 6.00 per hour. How much is the direct labor standard cost per hour? A. $ 9.00 B. $ 23.00 C. $ 29.00 D. $ 20.00
Answer:
Standard direct labour cost = $20.00 per hour
Explanation:
The direct labour costs represent expenditures incurred in respect of direct worker which can be traced to the product been produced. For example, the labour cost of machine operator saddled with production task.
The payroll cost is not a direct labour cost because payroll employed are not direct workers, also benefits are overheads related to direct workers
Standard direct labour cost = $20.00
Division A of Barsema, Inc. has operating data as follows: Capacity 20,000 units Selling price $80 per unit Variable costs $45 per unit Fixed costs $20 per unit Division B wants to purchase units from Division A. If Division A agrees to sell units to Division B, A's variable costs will be $5 less per unit. If Division A has capacity available to meet B's requirements, what is the minimum price it should charge
Answer:
the minimum price it should charge is $40 per unit.
Explanation:
Minimum Transfer Price = Variable Costs - Internal Savings + Opportunity Cost
Note : Division A has capacity available to meet B's requirements therefore there is no opportunity cost.
There are Internal savings of $5 as A's variable costs will be $5 less per unit.
Minimum Transfer Price = $45 - $5
= $40
A company acquired mineral rights for $7,500,000. The mineral deposit is estimated at 600,000 tons and during the year 100,000 tons were extracted and sold. a. Calculate depletion expense for the year. b. Show the effects on the accounts and the financial statements of the company. c. What is the book value of the mineral rights at the end of the current year
Answer:
The answer is given below;
Explanation:
a. Depletion Expense for the year ($7,500,000/600,000)*100,000=$1,250,000
b. The net income and as a results retained earnings will be reduced $1,250,000
c. The mineral rights will be reported at $7,500,000-$1,250,000 =$6,250,000
2. Before the Interview If you do well in the application process and screening interview, you will be invited to a face-to-face interview. Proper preparation before the interview is critical. Be sure to practice answers to possible questions, familiarize yourself with the company, and project a professional image in person and online. Consider the scenario, and then answer the question. You did well on a telephone interview, and your prospective employer has scheduled a face-to-face interview for the following week. What should you do to prepare for the interview?
Answer:
Possible options:
A. Select bold-colored clothes the night before.
B. Call the hiring manager to discuss the position.
C. Visit the company's website to learn more about the organization.
Answer is B
Explanation:
Managers in international businesses will need to evaluate the attractiveness of a country as a market or location for a facility or investment. Knowing how to think about events and situations will help the manager make that evaluation. Managers can use economic and socioeconomic indicators to evaluate potential locations to conduct business.
Answer:
The statement is: True.
Explanation:
Before starting businesses in a foreign country, managers must analyze if the target region fulfills the minimal conditions to conduct operations and, more important if the returns are good enough to cover the expenses of the investment. For such a purpose, social indicators such as average consumer income, education, or occupational class should be reviewed by executives. Countries with higher ratings should be the priority to start international businesses there.
One year ago, the spot rate of U.S. dollars for Canadian dollars was .90 USD/CAD. Since that time, 17)_____ the rate of inflation in the U.S has been 2% higher than that in Canada. Based on the theory of Relative PPP, the current spot exchange rate of U.S. dollars for Canadian dollars should be approximately:
Answer:
0.88 USD/CAD
Explanation:
As per relative purchase power parity theory, the difference between the inflation rates of two currencies is equal to the rate by which one currency appreciates or depreciates with respect to the other.
In the given case, the difference between inflation rates of two currencies is 2% i.e rate of inflation in USA has been higher by 2% than the rate of inflation in Canada.
As per relative purchase power parity theory, in such a scenario, Canadian dollar would appreciate by 2% or US Dollar will depreciate by 2%.
SPOT rate 1 year ago ,for 1 USD $ = 0.90 CAN$
Difference in inflation rate = Inflation rate in USA - Inflation rate in canada
= + 2%
Thus, CAN $ will appreciate by 2% over the period of 1 year while USD will depreciate by 2%. So the spot rate as on today would be,
[tex]1\ US\ Dollar\ =\ 0.90\ (1\ -\ .02)\ CAN\ Dollar[/tex]
Thus, [tex]1\ US\ Dollar\ =\ 0.882\ CAN\ Dollar[/tex] OR 0.88 CAD approx.
Oak Inc. has the following information regarding its assets: Book Value Estimated Undiscounted Cash Flows Fair Value Equipment $ 48,000 $ 43,000 $ 40,000 Building $ 81,000 $ 83,000 $ 78,000 Patent $ 43,000 $ 47,000 $ 45,000 What amount of loss should be recorded due to asset impairments
Answer:
$8,000
Explanation:
Given that,
Equipment:
Book value = $48,000
Estimated Undiscounted Cash Flows = $43,000
Fair value = $40,000
Building:
Book value = $81,000
Estimated Undiscounted Cash Flows = $83,000
Fair value = $78,000
Patent:
Book value = $43,000
Estimated Undiscounted Cash Flows = $47,000
Fair value = $45,000
From the above information, we can conclude that only the equipment is impaired as it is the only asset whose estimated future cash flows are less than its book value.
The impairment loss obtained from the asset is determined as the difference between the fair value and the book value.
Amount of loss should be recorded due to asset impairments:
= Book value - Fair value
= $48,000 - $40,000
= $8,000
The stockholders' equity section of the balance sheet for Pokagon Corporation appeared as follows before its recent stock dividend: Common stock, $10 par, 10,000 shares issued and outstanding $ 100,000 Additional paid-in capital - common 120,000 Retained earnings 150,000 Total stockholders' equity $370,000 Pokagon declared a 10% stock dividend when the market price per share was $20. After the stock dividend was distributed, the components of the stockholders' equity section were:
Answer:
Common stock = $110,000
Additional Paid in capital = $130,000
Retained earnings = $130,000
Explanation:
The computation of stockholders' equity is given below:
Common stock = Outstanding shares + (Stock dividend percentage × Shares issued × Par value per share)
= 100,000 + (10% × 10,000 × $10)
= $110,000
Additional Paid in capital = Additional paid-in capital - common + (Stock dividend percentage × Shares issued × (Market price per share - Par value per share))
= 120,000 + (10% × 10,000 × ($20 - $10))
= $130,000
Retained earnings= Retained earning(Given) - (Stock dividend percentage × Outstanding shares × Market price per share)
= 150,000 - (10% × 100,000 × $20)
= $130,000
Jaycee Auto Repair has the following budgeted costs for the next year: Time Charges Material Charges Shop employees’ wages and benefits $120,000 $- Parts manager’s salary and benefits - 45,000 Office employee’s salary and benefits 30,000 15,000 Other overhead 15,000 40,000 Invoice cost of parts and materials - 400,000 Total budgeted costs $165,000 $500,000 The materials loading charge is 65% and the labor charge per hour is $47. Jaycee estimates that the repairs to a Cadillac Escalade damaged in an accident will take 45 hours of labor and $3,500 in parts and materials. The total cost of the repairs is
Answer:
Explanation:
Total cost of repairs:
Material = 3,500
Material loading charge = 3,500 * 65% = 2,275
Labor (45hrs* $47per hr) = 2,115
Thus, total cost =(3500 + 2275 + 2115) = $7,890
The total cost of the repairs is $7,890.
The calculation is as follows:Given that,
Material = 3,500
So,
Material loading charge is
= 65% of $3,500
= 2,275
And,
Labor (45hrs × $47per hr) = 2,115
Thus, total cost is
= $2,275 + $3,500 + $2,115
= $7,890
Therefore we can conclude that The total cost of the repairs is $7,890.
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Doyle Company issued $360,000 of 10-year, 8 percent bonds on January 1, Year 2. The bonds were issued at face value. Interest is payable in cash on December 31 of each year. Doyle immediately invested the proceeds from the bond issue in land. The land was leased for an annual $53,500 of cash revenue, which was collected on December 31 of each year, beginning December 31, Year 2.
Organize the transaction data in accounts under the accounting equation for Year 2 and Year 3.
Answer:
The balance of the equation at end of year 2 is$388,800
The balance of the equation at end of year 3 is $417,600
Explanation:
Assets =Liabilities +shareholders' equity
Land +cash Bonds payable retained earnings
1/1/year 2 $360,000 =$360,000
1/1/year 2 $360,000 ($360,000)
31/12/year2 $53,500 = $53,500
31/12/year2 ($28,800) = ($28,800)
Balance $388,800 = $388,800
Opening balance $388,800= $388,800
31/12/year3 $53,500= $53,500
31/12/year3 ($28,800)= ($28,800)
Balance $ 417,600 $417,600
The interest on bond=$360,000*8%=$28,800
Porter Incorporated issued $210,000 of 6 percent, 10-year, callable bonds on January 1, Year 1. The bonds were issued at their face value. The call premium was 2 percent (bonds are callable at 102). Interest was payable annually on December 31. The bonds were called on December 31, Year 5. Required Prepare the journal entries to record the bond issue on January 1, Year 1, and the bond redemption on December 31, Year 5. Entries for accrual and payment of interest are not required.
Answer:
Jan. 1
Dr Cash $210,000
Cr Bonds Payable $210,000
Dec. 31
Dr Loss on Bond Redemption $4,200
Bonds Payable $210,000
Cr Cash $214,200
Explanation:
Porter Incorporated Journal entries
Jan. 1
Dr Cash $210,000
Cr Bonds Payable $210,000
Dec. 31
Dr Loss on Bond Redemption $4,200
Bonds Payable $210,000
Cr Cash $214,200
(102%×$210,000=$214,200)
The coordination argument on wage cuts implies that Select the correct answer below:A. firms should never coordinate with each other in cutting wages B. firms should consult government before cutting wages C. unless firms cut wages simultaneously, workers will resist D. firms coordinate with each other to cut wages at the same time
Answer:
The correct answer is letter "D": firms coordinate with each other to cut wages at the same time.
Explanation:
The coordination argument on wage cuts is cooperation by companies that pursue lowering wages. They do it at the same time to avoid competition and gain from the decrease. For this approach to be possible both firms must have perfect information on what is the lower compensation employees of other entities could accept.
A company purchased $9,500 of merchandise on June 15 with terms of 3/10, n/45. On June 20, it returned $475 of that merchandise. On June 24, it paid the balance owed for the merchandise taking any discount it was entitled to. The cash paid on June 24 equals:
$7,968.
$8,342.
$7,925.
$8,170.
$8,600.
Answer:
The amount paid would be $ 8754.75 or $8755
Explanation:
The terms of 3/10, n/45 tell us the 3 % discount will be allowed within the first ten days.
The company bought $9,500 of merchandise on June 15 with terms of 3/10, n/45. On June 20, it returned $475 of that merchandise. So the amount of merchandise inventory left would be
$9,500-$475= $ 9025
On June 24, it paid the balance owed for the merchandise taking any discount it was entitled to.
The discount allowed on $ 9025 would be
3 % of $ 9025=( 3/100)*9025= $ 270.75
Deducting this discount from the amount of $ 9025
The amount paid would be $ 9025 -$ 270.75= $ 8754.75 or $8755
Answer:
The cash paid on June 24 equals $ 8,754.25
Explanation:
Let's recall that term 3/10, indicates the number of days (from the invoice date) within which the buyer should pay the invoice in order to receive the 3 % discount.
n/45 means that if the buyer does not pay the (full) invoice amount within the 10 days to qualify for the discount, then the net amount is due within 45 days after the sales invoice date.
Now, let's calculate the cash paid on June 24, this way:
June 15 - Purchase of $ 9,500
June 20 - Return of $ 475, Balance of $ 9,025
June 24 - Payment of balance less 3% discount because the company is paying before 10 days from the invoice date
9,025 * 0.97 = 8,754.25
U.S. car dealers sell both used and new cars each year. However, only the sales of the new cars count toward GDP. The sale of used cars does not count because:
a. the car had been previously counted in the GDP of the year it was built.
b. there are more used cars than new cars.
c. the value of the used car depends on the value of the new car.
d. the value of used cars cannot be determined.
Answer: a. the car had been previously counted in the GDP of the year it was built.
Explanation: Though both used and new cars are sold in the U.S. by car dealers, the sale of used cars does not count because the car had been previously counted in the GDP of the year it was built. The Gross Domestic Product (GDP) which is defined as a measure of the economic production of a country in financial terms over a specific time period (usually a year), sums the dollar value of what has been produced in the economy over the year, not what was actually sold. In simpler terms, they were produced in a previous year and are part of that year's GDP.
a. the car had been previously counted in the GDP of the year it was built.
The sale of used cars does not count toward GDP because the car had been previously counted in the GDP of the year it was built.
GDP measures the value of goods and services produced within a specific period, typically one year. When a new car is manufactured and sold, its value is included in that year's GDP.
However, reselling that car in subsequent years does not count towards GDP because it does not reflect new production, merely a transfer of ownership of an already produced good. This exclusion helps prevent double counting of goods and ensures that GDP accurately reflects the amount of new production occurring within the economy in a given year.Suppose that the demand equation for Bobby Dolls is given by q = 216 – p2, where p is the price per doll in dollars and q is the number of dolls sold per week. a. Compute the price elasticity of demand when p = $5, and interpret your results. b. Find the price at which the weekly revenue is maximized. c. What is the maximum weekly revenue.
Answer:
P.Ed at p = 5 :- 0.26
Revenue maximising price = 8.5 ; Maximum Total Revenue = 1222
Explanation:
Price Elasticity of Demand shows responsive change in demand, due to change in price. P.Ed = ( dq / dp ) x ( p / q )
q = 216 - p^2
dq / dp = - 2p
P.Ed = dq / dp x ( p / q )
So, PEd = ( -2p ) x ( p / q )
[ (- 2p) (p) ] / [ 216 - p^2 ]
(- 2p^2 ) / ( 216 - p^2 )
Putting value of P = 5 in P.Ed
- 2(25)
216 - 25
= - 50 / 191
P.Ed = 0.26
Revenue is the total value of receipts from sale of goods & services. TR = p x q
q = 216 - p^2
TR = 216p - p^3
To find price maximising TR , we will derivate TR function with respect to 'p'
d TR / d p = 216 - 3p^2
d TR / d p = 216 - 3p^2 = 0
3p^2 = 216
p^2 = 216 / 3
p^2 = 72
p = √ 72
p = 8.5
Finding maximum revenue ; Putting price = 8.5 in TR function
TR = 216p - p^3
216 (8.5) - (8.5)^3
1836 - 614
1222
On March 1, 2018, Rose Company invests $12,000 in Sprouts, Inc. stock. Sprouts pays Rose a $350 dividend on October 1, 2018. Rose sells the Sprouts's stock on October 31, 2018, for $12,250. Assume the investment is categorized as a short-term equity investment and Rose Company does not have significant influence over Sprouts, Inc.Requirement: 1. Journalize the transactions for Rose's investment in Sprouts' stock. (Record debits first, then credits. Select the exd the requirements planation on the last line of the journal entry table.)2. What was the net effect of the investment on Rose's net income for the year ended December 31, 2018?
Answer:
1. Journalize the transactions for Rose's investment in Sprouts' stock:
March 1 2018
Dr Trading securities - Sprouts's stock 12,000
Cr Cash 12,000
(to record the purchase of Sprout's stock)
October 1 2018
Dr Cash 350
Cr Dividend Income 350
(to record the dividend receipt from Sprout's stock)
October 31 2018
Dr Cash 12,250
Cr Gain on disposal of short-term investment 250
Cr Trading securities - Sprouts's stock 12,000
(to record disposal of Sprout's stock)
2. Net effect of the investment on Rose's net income for the year ended December 31, 2018: $600.
Explanation:
1. As this investment is short-term investment and is held for sell, fair value methodology should be applied to record this transaction. The detailed journal entries are as in answer part.
2. As fair value methodology is applied, the net income of Rose will include: dividend income + gain on disposal of short-term investment = $350 + $250 = $600.