Answer: The attendant’s expected earn- ings for the period between 4:00 P.M and 5:00 P.M is $12,67.
Explanation: The discrete random variable X represent attendant’s earnings.
The expected value of the discrete random variable X is
= E (x) = ∑× f(x)= 7 × 1/12 + 9 × 1/12 + 11 × 1/4 + 13 × 1/4 + 15 × 1/6 + 17 × 1/6 = 12,67.The expected earnings for the attendant at a car wash between 4:00 P.M. and 5:00 P.M. on a sunny Friday is calculated using probabilities of different earnings outcomes, resulting in $12.67.
The expected value is calculated by multiplying each outcome by its probability and then summing all those products. The earnings and the corresponding probabilities are $7 (1/12), $9 (1/12), $11 (1/4), $13 (1/4), $15 (1/6), and $17 (1/6). Using these values, we can compute the expected earnings as follows:
(1/12) times $7(1/12) times $9(1/4) times $11(1/4) times $13(1/6) times $15(1/6) times $17
Expected Earnings = (1/12) times 7 + (1/12) times 9 + (1/4) times 11 + (1/4)times 13 + (1/6)times 15 + (1/6)times 17
Expected Earnings = 0.5833 + 0.75 + 2.75 + 3.25 + 2.5 + 2.8333
Expected Earnings = $12.6666 (rounded to $12.67)
Therefore, the expected earnings for the attendant between 4:00 P.M. and 5:00 P.M. on a sunny Friday is $12.67.
3M Co. reports beginning raw materials inventory of $902 million and ending raw materials inventory of $855 million. 3M purchased $3,646 million of raw materials during the year. What is the amount of raw materials it used during the year
Answer:
$3693 million
Explanation: The materials used in the primary stage of production is called
raw materials. These are the basic materials used for production.
.
Raw material used is the amount of raw materials consumed by the entity
in a specific period , generally a year .
.
Raw materials used = begining invetory + purchased inventory - ending invetory
therefore,
Raw materials used = $902 million + $3646 million - $855 million
= $3693 million
To find the amount of raw materials used during the year, use the formula Beginning Inventory + Purchases - Ending Inventory.
Explanation:To find the amount of raw materials used during the year, we need to calculate the change in raw materials inventory. The beginning inventory was $902 million and the ending inventory was $855 million. The formula to calculate raw materials used is: Beginning Inventory + Purchases - Ending Inventory.
Plugging in the values, we get: $902 million + $3,646 million - $855 million = $3,693 million. Therefore, 3M Co. used $3,693 million of raw materials during the year.
Caspion Corporation makes and sells a product called a Miniwarp. One Miniwarp requires 10.5 kilograms of the raw material Jurislon. Budgeted production of Miniwarps for the next five months is as follows: August 23,400 units September 22,100 units October 23,500 units November 24,700 units December 24,400 units The company wants to maintain monthly ending inventories of Jurislon equal to 20% of the following month's production needs. On July 31, this requirement was not met since only 11,600 kilograms of Jurislon were on hand. The cost of Jurislon is $26 per kilogram. The company wants to prepare a Direct Materials Purchase Budget for the next five months. The total cost of Jurislon to be purchased in August is:
Answer:
The total cost of Jurislon to be purchased in August is: $7,293,260
Explanation:
We will calculate the kilograms needed to fulfil the sales and the desired ending inventory.
Then we will subtract the beginning balance, to know how many kilograms do we need to purchase for the requirement.
Last we multiply by the unit cost to get the cost in dollars
August 23,400 units x 10.5 = 245,700
ending 20% september
20% x 22,100 x 10.5 = 46,410
Total requirement 292,110
beginning (11,600)
total purchase in kilograms 280,510
280,510 x $26 = $7,293,260 total cost for August
Matt's retail store offers all its products at $2 lesser than its competitors throughout the year. The store never runs any promotional campaigns or offers any additional special discounts. Matt's retail store is following a(n) ________.
Answer:
The everyday low pricing policy is the policy that Matt's retail store is following.
Explanation:
Everyday low pricing policy is the kind of a pricing strategy in which any company or firm keeps the prices of its products at low over a long period of time rather than putting any kind of sale or promotional activities. So here the consumers don't have to wait for the sale to start, the prices are already at everyday low. An important assumption to understand here is that in this kind of pricing strategy cost of production is assumed not be changed, that is why a company is able to implement this policy over a long period of time.
So therefore as here Matt's retail store is giving $2 lesser price for its product than its competitors , it means that Matt's retail store has applied everyday low pricing strategy.
Matt's retail store is employing an everyday low pricing strategy, consistent with a horizontal supply curve and the Law of Demand.
This pricing strategy reflects an understanding of the Law of Demand, where lowering prices leads to an increase in the quantity demanded, assuming that demand is elastic. In competitive retail markets, setting a unique, consistent price without fluctuating with sales or promotions allows buyers to purchase as much as they desire at that price, aligning with the concept of a horizontal supply curve.
Night Flights is preparing a contribution margin report segmented by route. The following information is available: Miami/LA Atlanta/ New York New York/ Chicago Average ticket price per passenger $1,250 $900 $750 Total passengers served 5,400 8,800 12,200 Total miles flown 190,000 176,000 97,600 The variable costs per unit are as follows: Fuel $25 per mile Wages $45 per mile Food/beverage service $7 per passenger Selling $70 per passenger What is the contribution margin ratio for the New York/Chicago route (to the closest tenth of a percent)?
The contribution margin ratio for the New York/Chicago route is approximately -138.8%.
Explanation:The contribution margin ratio for the New York/Chicago route can be calculated using the following steps:
Calculate the total revenue generated from the route by multiplying the average ticket price per passenger by the total number of passengers served.Calculate the total variable costs for the route by multiplying the variable costs per unit (fuel, wages, food/beverage service, and selling) by the total miles flown.Subtract the total variable costs from the total revenue to get the contribution margin for the route.Finally, divide the contribution margin by the total revenue and multiply by 100 to get the contribution margin ratio.Applying these steps to the New York/Chicago route:
Total revenue = $750 (average ticket price per passenger) x 12,200 (total passengers served) = $9,150,000Total variable costs = ($25 (fuel per mile) + $45 (wages per mile) + $7 (food/beverage service per passenger) + $70 (selling per passenger)) x 97,600 (total miles flown) = $21,840,000Contribution margin = Total revenue - Total variable costs = $9,150,000 - $21,840,000 = -$12,690,000Contribution margin ratio = (Contribution margin / Total revenue) x 100 = (-$12,690,000 / $9,150,000) x 100 = -138.76%Agee Technology, Inc., issued 9% bonds, dated January 1, with a face amount of $380 million on July 1, 2018, at a price of $370 million. For bonds of similar risk and maturity, the market yield is 10%. Interest is paid semiannually on June 30 and December 31. Prepare the journal entry to record interest at the effective interest rate at December 31. What would be the amount(s) related to the bonds that Agee would report in its statement of cash flows for the year ended December 31, 2018, if it uses the direct method?
Answer:
Part 1 Journal Entry
Journal Entry to record interest
Interest Expense A/c Dr. $17.1 million
To Interest Payable A/c $17.1 million
(Interest expense of Agee Technology on bonds of face value of $380 million @9% for 6 months.)
Interest Payable A/c Dr. $17.1 million
To Cash a/c $17.1 million
(Interest paid on the bonds for 6 months)
Part 2 Cash Flow
Amount related to bonds to be reported in cash flow statement
Issue of bonds = $370 million. (Financing Activity)
Less: Interest paid on 1 July = $380 million X 9% X 6/12 = $17.1 million
Less: Interest paid on 31 December = $380 million X 9% X 6/12 = $17.1 million
Net cash inflow from financing activities = $335.8
Explanation:
Since bonds are dated 1 January though issued on 1 July interest for 6 months i.e. 1 January to 30 June will be paid.Market rate of yield does not make any impact in calculations.Interest will be calculated on face value of bonds, issue price does not matter.The interest for the period from Jan to June will be paid on issue of bonds, i.e. on 1 July 2018 itself.On 31 December interest will be paid only for 6 months.In cash flow statement under direct method there is a change of pattern in reporting operating activities, there is no change in disclosing financing activities.
To record the interest on Agee Technology, Inc.'s bonds at the effective rate, debit Interest Expense for $18.5 million, credit Discount on Bonds Payable for $1.4 million, and credit Cash for $17.1 million. On the statement of cash flows using the direct method, they would report a $17.1 million cash outflow for interest payment.
Explanation:You are asking about the journal entry for the interest payment of bonds at the effective interest rate and the reporting on the statement of cash flows using the direct method for Agee Technology, Inc. Here is how you would calculate and record these figures:
First, since the bonds were issued at a discount (price less than face value), the effective interest method is used to amortize the discount over the life of the bond. The carrying amount of the bond initially is $370 million, and the semiannual interest payment at the stated rate of 9% on the face amount of $380 million is $17.1 million (0.09 x $380 million x 1/2). The effective semiannual interest expense, however, is calculated on the carrying amount at the market rate, which is 10% or 5% semiannually on $370 million, resulting in $18.5 million (0.05 x $370 million).
To record the interest payment and the amortization of the discount, the entry at December 31, 2018, would be:
In the statement of cash flows using the direct method, Agee would report $17.1 million as an outflow under operating activities for the interest payment. The amortization of the bond discount is a non-cash adjustment and does not appear on the statement of cash flows.
Bonds payable—various issues On July 1, 2013, $6 million face amount of 7%, 10-year bonds were issued. The bonds pay interest on an annual basis on June 30 each year. The market interest rates were slightly higher than 7% when the bonds were sold.
Required:
a. How much interest will be paid annually on these bonds?
b. Were the bonds issued at a premium or discount? Explain.
c. Will the annual interest expense on these bonds be more than, equal to, or less than the amount of interest paid each year? Explain your answer.
Answer:
(A) 420,000 cash disbursements
(B) discount.
(C) It will be more than the cash disbursements
Explanation:
6,000,000 x 0.07 = 420,000 cash disbursements
(B) the bonds were issued at discount, because the market rate was higher than 7% so the price fall below face value to match the market price.
(C) It will be more than the cash disbursements. There is adiference between face value and cash proceed from the issuance of the bonds, this diference is amortize each period increasing the interest expense of the bond.
The interest paid annually on the bonds is $420,000. The bonds were neither issued at a premium nor a discount. The annual interest expense on the bonds will be equal to the amount of interest paid each year.
Explanation:a. The interest paid annually on these bonds can be calculated by multiplying the face amount of the bonds ($6 million) by the stated interest rate (7%). Therefore, the annual interest payment is $420,000 ($6 million x 7%).
b. Whether the bonds were issued at a premium or discount depends on the market interest rates at the time of the bond issuance. If the market interest rates were lower than 7%, the bonds would be issued at a premium, and if the market interest rates were higher than 7%, the bonds would be issued at a discount.
c. The annual interest expense on these bonds will be equal to the amount of interest paid each year. This is because the stated interest rate of 7% is the same as the market interest rate at the time of issuance, so there is no premium or discount.
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You are going to buy a new computer at a downtown store that is a 25-minute drive each way and has the computer for $900. You earn $16 per hour at your job and will have to take time off to go buy the computer. You can expect to spend 40 minutes in the store making your purchase. What is the opportunity cost of buying the computer, measured in dollars? Enter an answer such as 42.00 or 34.50, with two decimal places. Do not enter a dollar sign.
Answer: The opportunity cost of buying computer is $337.5.
Explanation:
The total time taken in travelling to buy a computer at a downtown store:
= 25 minutes for one side × 2
= 50 minutes
Given that,
expect 40 minutes spend in a store for making purchase
So,
total time taken by a individual = time taken in a store + time taken in travelling
= (50 + 40) minutes
= 90 minutes
Also given that,
a individual earns $16 per hour at job
Hence, he earns = [tex]\frac{60}{16}[/tex]
= $3.75 per minute
so,
Total opportunity cost = earning per minute × total time taken
= $3.75 × 90 minutes
= $337.5
Assume that, after analyzing its business transaction, a firm has the following ending balances: accounts payable $3,400, accounts receivable $2,000, cash $1,000, capital $3,600, equipment $3,000, prepaid rent $600, and supplies $400. What is the total amount of assets that will be reported on the firm’s balance sheet?
Answer:
Total Assets = $7,000
Explanation:
Total assets are sum of fixed and current assets
Fixed assets = Assets held for a period more than a year.
Here Equipment is fixed asset with a value of $3,000
Current Assets = Accounts Receivable, Cash balance, Prepaid rent, Supplies
= $2,000 + $1,000 + $600 + $400
=$4,000
Total assets = $3,000 + $4,000 = $7,000
The firm's total assets, which include cash, accounts receivable, equipment, prepaid rent, and supplies, amount to $7,000.
To calculate the total amount of assets that will be reported on the firm’s balance sheet, we must add up all the individual asset balances. Assets typically include cash, accounts receivable, equipment, prepaid expenses, and supplies. In this case, the ending balances for the firm's assets are: cash of $1,000, accounts receivable of $2,000, equipment of $3,000, prepaid rent of $600, and supplies of $400. These figures combine to give a total asset value.
Therefore, the total assets would be calculated as follows:
Cash + Accounts Receivable + Equipment + Prepaid Rent + Supplies
$1,000 + $2,000 + $3,000 + $600 + $400 = $7,000.
Hence, the firm will report a total of $7,000 in assets on its balance sheet.
You are the CEO of a home appliance manufacturing company and have recently undertaken a review of your company's strategy. In comparing your stock market valuation to that of your closest competitor, you note that your firm is currently valued at $50 billion, while your competitor is valued at $40 billion. How should you proceed?
Answer: As the CEO of a home appliance manufacturing company, it lies upon us to work thoroughly while reviewing our company's strategy.
If, while comparing our stock market valuation to that of our closest competitor, we note that our firm is currently valued at $50 billion, while our competitor is valued at $40 billion, even then we shouldn't work hastily and ponder upon any conclusion.
In such situation it'll be better if we, compare the current valuations with past valuations to determine if we can find a trend. We should first analyze on what made us more competitive, as this strategy will help us to sustain longer in the market.
Paolucci Corporation's relevant range of activity is 6,900 units to 14,500 units. When it produces and sells 10,700 units, its average costs per unit are as follows: Average Cost per Unit Direct materials $ 6.85 Direct labor $ 3.75 Variable manufacturing overhead $ 1.75 Fixed manufacturing overhead $ 3.30 Fixed selling expense $ 1.05 Fixed administrative expense $ 0.75 Sales commissions $ 1.00 Variable administrative expense $ 0.65 If 9,700 units are sold, the variable cost per unit sold is closest to:
Answer:
Total Variable Cost per Unit $14
Explanation:
We re asked for the variable cost per unit which are constant at unit level.
The fixed cost are not relevant.
So we just need to add the current variable cost.
Direct materials $ 6.85
Direct labor $ 3.75
Variable manufacturing overhead $ 1.75
Sales commissions $ 1.00
Variable administrative expense $ 0.65
Total Variable $14
The variable cost per unit for the Paolucci Corporation remains the same within the relevant range of activity. The costs per unit of direct materials, labor, variable manufacturing overhead, and variable administrative expense add up to $12.95, which applies to both 10,700 and 9,700 units sold.
Explanation:To calculate the variable cost per unit sold, we need to consider the costs that vary with production. The average costs given for 10,700 units include direct materials, direct labor, variable manufacturing overhead, and variable administrative expense. These four costs are summed up to find the total variable cost per unit. To find the variable cost per unit for 9,700 units sold, we will use the same costs per unit since variable costs per unit remain constant within the relevant range of activity.
Total Variable Cost per Unit = Direct materials + Direct labor + Variable manufacturing overhead + Variable administrative expense
Total Variable Cost per Unit for 10,700 units = $6.85 + $3.75 + $1.75 + $0.65 = $12.95 per unit
Since we are within the relevant range (6,900 to 14,500 units), the variable cost per unit will not change based on the activity level. Thus, the variable cost per unit sold for 9,700 units will also be $12.95 per unit.
A surplus or shortage in the money market is eliminated by adjustments in the price level according to classical theory, but not liquidity preference theory. liquidity preference theory, but not classical theory. neither liquidity preference theory nor classical theory. both liquidity preference theory and classical theory.
Answer:
The correct answer is option A.
Explanation:
According to the classical theory, the quantity of money is directly related to price level. So, any shortage or surplus in the money market can be corrected by increasing or decreasing price level.
According to the liquidity preference theory, however, money is demanded for transactionary, precautionary and speculative motive. So, only price level does not affects the quantity of money. Interest rates also effect the demand for money.
So, option A is the correct answer.
Final answer:
A surplus or shortage in the money market is eliminated by adjustments in the price level according to liquidity preference theory, but not classical theory.
Explanation:
In the context of the money market, a surplus or shortage is eliminated by adjustments in the price level according to liquidity preference theory, but not classical theory.
In classical theory, the money market is assumed to be in equilibrium at all times, with any surplus or shortage quickly eliminated by adjustments in the price level. However, in liquidity preference theory, changes in the money supply can lead to changes in interest rates, which in turn affect the demand for money and the equilibrium in the money market.
In summary, the correct answer is liquidity preference theory, but not classical theory.
The value of a business owner's time is an example ofa. an opportunity cost. b. a fixed cost. c. an explicit cost. d. total revenue.
Answer: Opportunity cost
Explanation:
A. Opportunity cost can be defined as the next best alternative foregone , it is the cost of profit the business looses while choosing one alternative over other.
B. Fixed cost are those cost that do not change with the level of output produced in the firm.
C. In simple words the direct costs a business pay to the outsiders for running its operations is called explicit cost.
D. Total revenue is the amount of income a company has before deducting its expenses occurred to earn that income.
So from the above explanations we can conclude that value of a business owner's time is an example of opportunity cost.
Final answer:
The value of a business owner's time is an example of an opportunity cost, representing the potential benefits forgone by not choosing the next best alternative, such as income from another job or personal leisure time.
Explanation:
The value of a business owner's time is an example of an opportunity cost. Opportunity cost is a key concept in economics that involves the notion of implicit costs, which are not directly billed or paid out but represent the potential benefits that are forgone by choosing one alternative over another. In the context of a business owner, this could include the income they could have earned in another occupation, or the value of their leisure time that is lost when they dedicate time to their own business. Implicit costs like these are subtle and include the depreciation of goods, materials, and the owner's time which could have been used for other activities or opportunities.
Mary, a CPA, prepared Gordon’s tax return for the current year. In preparing his return, she took a deduction that is contrary to the Code. She feels that he is entitled to this deduction because of her belief that possible confl icts exist between two sections of the Internal Revenue Code. Is Mary in conflict with the AICPA “Statements on Responsibilities in Tax Practice”?
Answer: YES, marry is in conflict.
Explanation: As being a certified public accountant it is responsibility of mary to correctly prepare the tax return for the client. However, she took a deduction that is contrary to the code hence she failed to do her work properly. Now, gordon would have to bear the additional tax in case of correction of the error in deduction made by his CPA.
Assume that Sandhill Co. uses a periodic inventory system and has these account balances: Purchases $420,800; Purchase Returns and Allowances $11,900; Purchase Discounts $8,100; and Freight-in $17,700. Sandhill Co. has beginning inventory of $58,100, ending inventory of $92,600, and net sales of $643,000. Determine the amounts to be reported for cost of goods sold and gross profit.
Answer:
Cost of goods Sold = $384,000
Gross Profit = $259,000
Explanation:
Cost of goods sold = Opening Inventory + Net Purchase - Closing Inventory
Opening Inventory = $58,100 Closing Inventory = $92,600
Net Purchases = Purchase - Purchase Return - Discounts + Freight in
Freight in forms part of cost of purchase because without this expense inventory cannot be bought in.
Net Purchases = $420,800 - $11,900 - $8,100 + $17,700 = $418,500
Cost of goods Sold = $58,100 + $418,500 - $92,600 = $384,000
Gross Profit = Sales - Cost of Goods Sold
= $643,000 - $384,000 = $259,000.
Why are intermediate goods not included in GDP?a. to avoid counting them twice in GDPb. to make sure only nondurable goods are included in GDPc. to keep goods that are not bought and sold out of the GDPd. to ensure that only goods produced in the US are included in GDP
Answer: Option (a) is correct.
Explanation:
Correct option (a): to avoid counting them twice in GDP.
Intermediate goods are the goods which are utilize in the production of final goods. Intermediate goods are like inputs in the production of final goods.
While calculating GDP of an economy, it includes the market value all the final goods and services that are produced in an economy.
While calculating GDP from value added method, this includes the value of all the stages that are included in the production of final goods.
So, the value of intermediate goods is not included in GDP, this is happened to avoid counting them twice in GDP.
Intermediate goods are not included in GDP to prevent counting them twice. They are the goods used in production, and their value is already embodied in the final goods' price.
Explanation:The reason intermediate goods are not included in Gross Domestic Product (GDP) is option 'a', to avoid counting them twice. Intermediate goods are goods used in the production of other goods. They are part of the cost of producing the final goods. Thus, their value is already included in the final goods' market price. If we count intermediate goods separately, we would be double-counting them leading to an inflated and inaccurate measure of GDP.
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Liability management refers to: a bank's handling of the assets in individual trust funds. a bank's handling of loans and other assets. how a bank attracts deposits and what it pays for them. how a bank manages its accounts receivable.
Answer:
Liability management refers to how a bank handles it loans and other assets.
Explanation:
Liability management is a practice adopted by banks to keep a balance between assets and liabilities, so that they possess enough liquidity to facilitate lending and also a healthy balance sheet is maintained. Banks need to keep a balance between maturity of their assets and liabilities. It is a mechanism to address the risk of mismatch in bank's assets and liabilities.
Calculate the presentvalue of $5,000 received five years from today if your investments pay a. 6 percent compounded annually b. 8 percent compounded annually c. 10 percent compounded annually d. 10 percent compounded semiannually e. 10 percent compounded quarterly
Answer: 3736.30 , 3402.90 , 3104.60 , 3069.56 , 3051.35
Explanation: We can compute present values by using the following formula :-
[tex]=\:present\:value\:=\frac{future value}{\left ( 1+interest\:rate\right )^{no. of periods}}[/tex]
[tex]=\:present\:value\:=\frac{5000}{\left ( 1+o.o6\right )^{1}}[/tex] = 3736.30
[tex]=\:present\:value\:=\frac{5000}{\left ( 1+o.08\right )^{1}}[/tex] = 3402.90
[tex]=\:present\:value\:=\frac{5000}{\left ( 1+o.1\right )^{1}}[/tex] = 3104.60
[tex]=\:present\:value\:=\frac{5000}{\left ( 1+o.1\right )^{2}}[/tex] = 3069.56
[tex]=\:present\:value\:=\frac{5000}{\left ( 1+o.1\right )^{4}}[/tex] = 3051.35
A company sold merchandise for $24,000 on account with terms of 5/15, n/30. The company uses a perpetual inventory system. After two days, it received defective merchandise worth $4,000. The journal entry to record the cash receipt for the sale if the payment is received within 10 days of the invoice date would include ________. A) a debit to Cash for $20,000, a credit to Merchandise Inventory for $1,000, and a credit to Sales Revenue for $19,000. B) a debit to Cash for $19,000, a debit to Sales Discount for $1,000, and a credit to Accounts Receivable for $20,000 C) a debit to Cash for $20,000, a debit to Merchandise Inventory for $4,000, and a credit to Accounts Receivable for $24,000. D) a debit to Sales Revenue for $24,000, a credit to Accounts Receivable for $20,000, and a credit to Sales Discounts for $4,000
Answer:
OPTION B
Cash debit for 19,000
Sales Discount debit for 1,000
Account receivable credit for 20,000
Explanation:
First, notice that this entry to record the payment of the invoice, so we are settlng this customer account, we are not recording the sale, that was done 10 days ago.
Same applies to the merchandise return, that was 2 days ago so we don't have to record that, only the cash payment from the customer.
The company sold merchandise for 24,000
Then the customer return 4,000
so the total value of the account at payment date is 20,000
Because it is done within 10 days it will give a 5% discount because the term are 5/15 (5% discount within the first 15 days) n/30 (nominal AKA no discount within 30 days)
So 20,000 sale x 5% discount = $1,000 discount
lastly, nominal - discount = cash outflow
$20,000 - $1,000 = $19,000
Resuming:
Cash debit for 19,000 (cash receive fro mthe customer)
Sales Discount debit for 1,000 (discount according to the sales term)
Account receivable credit for 20,000 (write-off the account)
The journal entry to record the cash receipt for the sale if the payment is received within 10 days of the invoice date would include a debit to Cash for $19,000, a debit to Sales Discount for $1,000, and a credit to Accounts Receivable for $20,000. Thus, option B is correct.
What is Journal entry?A Journal entry can be defined as an accounting record in which the transaction is being made. Every commerce has two reactions and all these are being accounted for with the help of a journal entry.
The information provided is:
The business received $24,000 for the goods it sold.
The customer then returns 4,000.
The user's account total worth at the time of payment was $20,000.
Since the term is 5/15, n/30, it will grant a 5% reduction because it is completed within 10 days
20,000 sales x 5% off is $1,000 off.
Last but not least, nominal - discount = cash outflow
$20,000 - $1,000 = $19,000
The calculation willl be:
19,000 in cash is deducted (cash receive from the customer)
For 1,000, the sales discount is debited (discount according to the sales term)
20 000 in credit for accounts receivable (write-off the account)
Therefore, option B is the correct option.
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In the long run, both monopolistic competition and competitive markets result in: a) a wide variety of brand-name choices for consumers. b) an inefficient allocation of resources. c) zero economic profit for firms. d) excess capacity. e)insufficient capacity.
Answer:
c) zero economic profit for firms.
Explanation:
In both cases, while there is room for economic gain, market structures - perfect competition and monopolistic competition - will attract entrants to compete. In the long run, the market goes into balance when economic profit is zero.
Recalling that the concept of economic profit is different from accounting profit.
_____ may be daunting and perhaps risky, but the challenge of it grabs people in the gut and gets their juices flowing and creates tremendous forward momentum. Such goals are achieved through a breakthrough in the organization’s products or services.
Answer: the correct answer is BHAGs or Big Hairy Audacious Goals.
Explanation: BHAGs are those goals that can be achieved if there is a great idea or invention that makes the company move forward and stay ahead of the competition.
The only difference between variable and absorption costing is the expensing of ________.A) direct manufacturing costs B) variable marketing costs C) fixed manufacturing costs D) variable administrative costs
Answer:
The correct answer is C. fixed manufacturing costs
Explanation:
We can see that in Absorption costing, all the costs are included and that includes fixed costs. on the other hand, in the variable costing, it is only included the variable costs that are directly incurred in production.
It took you four months to find a job, and you were almost out of money, when you finally landed your position. Today your boss asked you to do something you think is unethical, but she assures you that it is normal for this industry. You aren’t sure what the corporate culture is yet because you are new at the company. You also aren't sure if she's telling you the truth or not. How do you respond?
Answer:
research.
Explanation:
you do research on it, seperate from the company. you need to be prepared to make a decision, and not just rush into it.
A small apartment property is estimated to have potential gross income of $ 25,000. Vacancy and collection losses are expected to average 5 percent over the life of the property. Operating expenses are expected to average about 30 percent of effective gross income. An overall capitalization rate of 12 percent is derived from market transactions of similar properties. What is the market value?
Answer:
the market value of the property would be $138,542.
Explanation:
To calculate the market value of the property , we need to divide the net operating income by the capitalization rate, in the question we have been given the capitalization rate but the operating income is not available to us. So with the help of given potential gross income we will calculate the effective gross income and then from it we will calculate the net operating income, lets see how to do step wise calculation -
POTENTIAL GROSS INCOME - $25,000
(-) VACANCY AND COLLECTION LOSSES = 5% X $25,000
= $1250
EFFECTIVE GROSS INCOME = $23,750
Now from this we will subtract the operating expenses to get net operating income -
EFFECTIVE GROSS INCOME = $23,750
(-) OPERATING EXPENSES = 30% X $23,750
= $7125
NET OPERATING INCOME = $16,625
Now for calculating market value putting these value sin the formula -
NET OPERATING INCOME / MARKET CAPITALIZATION RATE
= $16,625 / 12%
= $138,541.66
= $138,542 ( APPROXIMATELY )
Martha Beyerlein Company incurred $150,000 of research and development costs in its laboratory to develop a patent granted on January 2nd, 2017. On July 31st, 2017, Beyerlein paid $35,000 for legal fees in a successful defense of the patent. The total amount debited to Patents through July 31st, 2017, should be
Answer:
The total amount that will be debited to the patents account on July 31, 2017 will be $35,000.
Explanation:
The amount of $150,000 will not be included in the patents account because this patent was developed by the Martha beyerlein company not purchased from any other firm , so the cost incurred here will be debited to the research and development account. And only the $35,000 that was paid for legal fees will be debited to the patents account.
The market price of a security is $26. Its expected rate of return is 13%. The risk-free rate is 5% and the market risk premium is 7.0%. What will be the market price of the security if its correlation coefficient with the market portfolio doubles (and all other variables remain unchanged)? Assume that the stock is expected to pay a constant dividend in perpetuity. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Final answer:
The new market price of the security after the correlation coefficient with the market portfolio doubles cannot be accurately determined based on the information provided. One would need to know the security's beta or dividend growth rate, which is not mentioned in the question.
Explanation:
The market price of a security is influenced by its expected rate of return and its correlation with the market portfolio. If the correlation coefficient of the security with the market portfolio doubles, it implies a higher risk associated with the security. Using the Capital Asset Pricing Model (CAPM), we can understand that as risk (beta) increases, so does the required rate of return. However, without a formula directly correlating market price and beta in the given scenario, we cannot precisely calculate the new market price without additional information on the security's beta or its cash flows such as dividends.
It is also important to note that when the security promises a constant dividend in perpetuity, the price can be figured out using the Gordon Growth Model (assuming constant growth rate for dividends), but this requires the growth rate, which hasn't been provided in the question. Therefore, based on the given information, we cannot accurately determine what the new market price of the security would be if its correlation coefficient with the market were to double.
One of the main disadvantages of buying a franchise is that you may end up
A. choosing a poor location. B. feeling like an employee. C. hiring a large staff. D. paying too much for operating costs. 4.
Final answer:
Buying a franchise may lead to feeling like an employee due to strict rules and guidelines from the franchisor. You have to pay franchise and royalty fees, impacting operating costs, and you might have less flexibility in business decisions. The correct option is b.
Explanation:
One of the main disadvantages of buying a franchise is that you may end up feeling like an employee. This is because, as a franchisee, you are required to follow the operational guidelines and rules that have been established by the franchisor. This can include specific procedures for marketing, staff training, and the types of products or services that can be offered. Purchasing a franchise involves paying an initial franchise fee, along with ongoing royalty fees, which can influence the total operating costs. Moreover, while franchises come with brand recognition and support, they may also limit your flexibility and creativity as a business owner.
On January 1, 2020, Blossom Company had $1,335,000 of common stock outstanding that was issued at par. It also had retained earnings of $750,500. The company issued 45,000 shares of common stock at par on July 1 and earned net income of $405,000 for the year. Journalize the declaration of a 16% stock dividend on December 10, 2020, for the following independent assumptions. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) (a) Par value is $10, and market price is $19. (b) Par value is $5, and market price is $22
Answer:
(A)
Retained Earnings 527,440 debit
Common Stock 277,600 credit
Additional Paid-In 249,840 credit
(B)
Retained Earnings 1,080,640 debit
Common Stock 245,600 credit
Additional Paid-In 835,040 credit
Explanation:
1,335,000 common stock
RE 750,500
(A)
40,000 at par value = 10 = 400,000 issued stocks July 1st
Stock dividends 16%
1,735,000 x .16 = 277,600 CS
173,500 x .16 x 19 = 527,440 market value of the bond dividends
Retained Earnings 527,440 debit
Common Stock 277,600 credit
Additional Paid-In 249,840 credit
(B)
40,000 x 5 = 200,000 issued stocks July 1st
Stock dividends 16&
1,535,000 x .16 = 245,600 CS
307,000 shares x .16 x 22 = 1,080,640 market value of the bonds dividends
Retained Earnings 1,080,640 debit
Common Stock 245,600 credit
Additional Paid-In 835,040 credit
The net present value of a project is zero. The minimum desired rate of return used to obtain the net present value is 8%. Which of the following statements is TRUE? A. The project is desirable if the minimum desired rate of return is 6%. B. The project is undesirable if the minimum desired rate of return is 6%. C. The project is desirable if the minimum desired rate of return is 6% or 10%. D. The project is desirable if the minimum desired rate of return is 10%.
Answer:
A. The project is desirable if the minimum desired rate of return is 6%.
Explanation:
If the NPV of a project is zero at an 8% rate it means it yields 8%
Remember:
PV = net cash flow at present value using a given rate - investment
So if PV = 0 then
net cash flow at given the rate = investment
Which makes the business profitable at that rate.
So if the desired minimum is 6% the project yields above that. Making it profitable and therefore, desirable
Mary's Baskets Company expects to manufacture and sell 30,000 baskets in 2019 for $5 each. There are 4,000 baskets in beginning finished goods inventory with target ending inventory of 4,000 baskets. The company keeps no work-in-process inventory. What amount of sales revenue will be reported on the 2019 budgeted income statement?
Answer:
budgeted sales revenue will be 150,000
Explanation:
It expects to sell 30,000 at $5 each
so sales revenue would be
[tex]30,000 \times 5 = 150,000[/tex]
The beginning and ending inventory has no relevance. The question is already telling us how many unis the company expecs to sell and their unit price.
We just have to multiply
You have been asked by the president of your company to evaluate the proposed acquisition of a new special-purpose machine. The machine's total price including installation and delivery is $70,000. The machine falls into the four-year class using straight line depreciation method, and it will be sold after four years for $0. The use of this new machine will bring revenue of $25,000 annually for 4 years, and will have annual maintenance expense of $5,000. The firm's marginal tax rate is 40 percent and the required rate of return is 10%. (Please show your work)
a. What is the initial investment ? (keep your number as a whole number: example of answer format: $1,000)
b. What is the Cash Flow at year 1 ? ( keep your number as a whole number: example of answer format: $1,000 )
c. What is the Cash Flow at year 4 ? ( keep your number as a whole number: example of answer format: $1,000 )
d. What is NPV ? ( keep your number to two decimals: example of answer format: $1,000.00 or if it's negative, then -$1,000.00)
Answer:
Explanation: download the manual if you may get and get solutions