Answer:
Taxes to be Withheld From Gross Pay (Employee-Paid Taxes)= @141.2
Explanation:
Taxes to be Withheld From Gross Pay (Employee-Paid Taxes)
September Earnings Subject to Tax
Federal income tax @$70
FICA—Social Security = 800 (@tax rate= 6.20%)= $49.6
FICA—Medicare :800(@tax rate=1.45%)= $11.6
Total taxes withheld : 141.2
Taxes to be Withheld From Gross Pay (Employee-Paid Taxes)= @141.2
In scenario A of BMX Company, the FICA Social Security tax for September is $161.2, FICA Medicare tax is $37.7, and federal income tax is $70, totaling liabilities of $269.9. Since the gross pay through August exceeded $7,000, there will be no FUTA and SUTA tax for September. The company's journal entry would record these amounts as salary expense and related payroll liabilities.
Explanation:To calculate the payroll liabilities, first, let's calculate the September contribution of each tax:
FICA Social Security tax is 6.2% of September's gross pay up to the $118,500 limit. In this case, it would be 6.2% of $2,600 which equals $161.20. FICA Medicare tax is 1.45% of September's gross pay. In this case, it would be 1.45% of $2,600 which equals $37.70.FUTA tax is 0.6% of gross pay up to the first $7,000. The gross pay from January through August has exceeded $7,000 so there will be no FUTA tax for September.SUTA tax is 2.9% of gross pay up to the first $7,000. Again, as the employee has already exceeded this limit, there will be no SUTA tax for September.
Adding these amounts to the federal tax withheld gives a total liabilities of $269.9 (70 + 161.2 + 37.7).
The journal entries as of September 30 will be:
Debit Salary Expense $2,600Credit Social Security Tax Payable $161.20Credit Medicare Tax Payable $37.70Credit Federal Income Tax Payable $70Credit Salaries Payable $2331.1 Learn more about Payroll Liabilities here:https://brainly.com/question/32139674
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Dexter owns a large tract of land and subdivides it for sale. Assume that Dexter meets all of the requirements of § 1237 and during the tax year sells the first eight lots to eight different buyers for $113,000 each. Dexter's basis in each lot sold is $79,100, and he incurs total selling expenses of $4,520 on each sale. What is the amount of Dexter’s capital gain and ordinary income?
Answer:
Please see attachment
Explanation:
Please see attachment
Dexter's capital gain is $235,040, and he has no ordinary income from the sales of the lots. The gain is calculated by subtracting the total basis value and the total selling expenses from the total revenue.
Explanation:To find out Dexter's gain from these transactions, we first need to determine his total revenue, total basis, and total selling expenses. Total revenue is the sale amount he gets, which will be 8 sales at $113,000 each, equal to $904,000. The total basis is the original value of each lot, which is 8 lots times $79,100, equal to $632,800. Total selling expenses are 8 times $4,520, equal to $36,160. The total gain or loss is calculated by subtracting from total revenue, the sum of total basis and total selling expenses. That makes his combined gain $904,000 - $632,800 - $36,160 = $235,040.
This entire amount will be considered a capital gain by § 1237 because Dexter has met all requirements. This means that there is no ordinary income from these transactions.
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A bank has $320 million in deposits and is holding $39 million in reserves. If the required reserve ratio is 10%, what is the maximum new loan amount the bank can extend? Type an answer and press enter to submit million dollars
Answer:
$7 million.
Explanation:
remember that, the bank can give new loan amount only from its excess reserves.calculation of required reserves:required reserves= deposits*required reserve ratio
=$320m*10/100
=$32million
(it is given that, deposits =$320m and required reserve ratio=10%)
therefore, the excess reserves = reserves held by bank-required reserves=$39m-$32m
=$7m
hence, the maximum new loan amount the bank can extend = $7 million
Answer:
$70 million
Explanation:
first we must calculate excess reserves:
total deposits = $320 million
required reserve ratio = 10% = 10% x $320 million = $32 million
excess reserves = total reserves - required reserves = $39 million - $32 million = $7 million
once we calculates excess reserves, we must multiply that amount by the money multiplier to determine the maximum amount of new loans:
new loans = excess reserves x money multiplier = $7 million x (1 / 10%) = $7 million x 10 = $70 million
Ken places a $20 value on a cigar, and Mark places a $17 value on it. The equilibrium price for this brand of cigar is $15. Refer to Scenario 12-1. Suppose the government levies a tax of $1 on each cigar, and the equilibrium price of a cigar increases to $16. What is total consumer surplus after the tax is levied?
Answer:
$5
Explanation:
Consumer surplus is defined as the difference between the highest amount a consumer is willing to pay for a product and the amount the consumer actually pays for the product.
Consumer surplus = willingness to pay - market price
The willingness to pay is the highest amount a consumer would be willing to pay for the purchase of a good or service. It is the value a consumer places on a product.
Before the tax, Ken's consumer surplus = $20 - $15 = $5
Before the tax, Mark's consumer surplus = $17 - $15 = $2
Total consumer surplus- $2 +$5 = $7
After the tax, ken's consumer surplus =$20-$16=$4
After the tax, Mark's consumer surplus = $17 - $16 = $1
Total consumer surplus- $4 + $1 = $5
After the tax on cigars, the total consumer surplus for Ken and Mark combined is $5, which is the sum of the difference between their valuation of the cigar and the new price after the tax.
Explanation:The student is asking about consumer surplus after the imposition of a tax on cigars. Consumer surplus is the difference between what consumers are willing to pay for a good and what they actually pay. In the scenario described, Ken values the cigar at $20 and Mark values it at $17, while the equilibrium price is $15. After the government imposes a $1 tax, the new price becomes $16. The total consumer surplus for Ken and Mark after the tax would be the sum of their individual surpluses: ($20 - $16) for Ken and ($17 - $16) for Mark, which equals $4 + $1 = $5.
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Combining two assets having perfectly positively correlated returns will result in the creation of a portfolio with an overall risk that ________. A. remains unchanged B. increases to a level above that of either asset C. decreases to a level below that of either asset D. lies between the asset with the higher risk and the asset with the lower risk
Answer:
The correct option is (B)
Explanation:
The main objective of creating a portfolio is to minimise the overall risk of investments. Two investments with the same correlation signs are riskier because, if one investment gives a negative return, the other investment will do the same. The combined loss is more than the loss one investment will sustain. The portfolio is always constructed by adding investments with opposite correlation signs.
Consider a game of the "Jack and Jill" type in which a market is a duopoly and each firm decides to produce either a "high" quantity of output or a "low" quantity of output. If the two firms successfully reach and maintain the cooperative outcome of the game, then :a. both the combined profit of the firms and total surplus are maximized.b. the combined profit of the firms is maximized but total surplus is not maximized.c. the combined profit of the firms is not maximized but total surplus is maximized.d. neither the combined profit of the firms nor total surplus is maximized.
Answer:
c. the combined profit of the firms is not maximized but total surplus is maximized.
Explanation:
Where there is a duopoly market, it basically means that for the concerned product there are only two producers in the market for the product, and accordingly they rule the market.
When one company produces high quantity and the other low then they might be able to reach at the combined level profit which is maximized, but there will not be any kind of surplus.
This is because when there are only two companies producing each shall produce quantities in bulk, which shall generate huge amount of surplus in the market, although in that case when there is huge supply the profits might be low.
An economy’s relationship between short-run equilibrium output and inflation (its aggregate demand curve) is described by the equation: Y = 13,000 – 20,000π. Initially, the inflation rate is 4 percent, or π = 0.04. Potential output Y* equals 12,000.
a. The short-run equilibrium output is_____________ .
b. The rate of inflation at the long-run equilibrium is _____________.
Answer:
(a) 12,200
(b) 5%
Explanation:
(a) Y = 13,000 - 20,000 (.04)
Y = 13,000 - 800
Y = 12,200
Therefore, the short run equilibrium output is 12,200.
(b) Y = 13,000 - 20,000π
Substituting the value of y* by 12,000
12,000 = 13,000 - 20,000π
20,000π = 13,000 - 12,000
π = (1,000 ÷ 20,000 ) × 100
π = 0.05 or 5 %
Therefore, the rate of inflation at the long-run equilibrium is 5%.
The short-run equilibrium output is 12,200, found by substituting the given inflation rate into the aggregate demand equation. The rate of inflation at the long-run equilibrium is 5%, which keeps the output at its potential level.
Explanation:To find the short-run equilibrium output, we substitute the initial inflation rate π = 0.04 into the aggregate demand curve equation, Y = 13,000 - 20,000π. This yields:
Y = 13,000 - 20,000(0.04) = 13,000 - 800 = 12,200.
For part b, since the long-run equilibrium output is at the potential output level, and in the long run, the aggregate supply curve is vertical, changes in inflation do not affect the output. Therefore, the economy produces at its potential regardless of the rate of inflation. In the equation Y = 13,000 - 20,000π, for Y to be equal to the potential output Y* of 12,000, π must be:
12,000 = 13,000 - 20,000π → 20,000π = 13,000 - 12,000 → 20,000π = 1,000 → π = 1,000 / 20,000 = 0.05 or 5%
This means the rate of inflation at the long-run equilibrium is 5%.
On October 1, 2018, Equipment Suppliers Company made a loan to one of its customers. The customer signed a 4-month note for $110,000 at 13%. How much interest revenue did the company record in the year 2018? (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.)
Answer:
$3,575
Explanation:
The computation of the interest revenue recorded in the year 2018 is shown below:
= Principal × rate of interest × number of months ÷ (total number of months in a year)
= $110,000 × 13% × (3 months ÷ 12 months)
= $3,575
The three months is calculated from October 1 , 2018 to December 31, 2018
We assume the books are closed on December 31, 2018
Final answer:
The Equipment Suppliers Company would record approximately $4,767 as interest revenue for the year 2018 on the 4-month note for $110,000 at a 13% annual interest rate.
Explanation:
To calculate the interest revenue recorded by the Equipment Suppliers Company for the year 2018, we need to use the simple interest formula:
I = PRT
where:
I is the interest
P is the principal amount ($110,000)
R is the annual interest rate (13% or 0.13)
T is the time in years
Since the note is for 4 months, the time in years (T) is 4/12 or 1/3 of a year. We'll now calculate the interest:
I = $110,000 × 0.13 × (4/12)
First, calculate the product of the principal and the annual interest rate:
$110,000 × 0.13 = $14,300
Then multiply the result by the time factor:
$14,300 × (4/12) = $14,300 × 1/3 ≈ $4,766.67
The interest revenue recorded in 2018 would be approximately:
$4,767 (rounded to the nearest dollar)
Discounters, Inc. issued $50,000, 4-year, 6% bonds that pay interest annually on January 1 when the going market interest rate was 7%. On the issue date, the carrying value of bonds, net of discount or including premium, rounded to the nearest $1, is ______.
Answer:
$48,307
Explanation:
The carrying value is the value of the bond plus any unamortized premiums or less any unamortized discounts.
Salman is a new employee at a quarry. Being a new employee, he feels lonely at work. However, he finds a group of people who share jokes and speak informally with each other to reduce work-related stress. Salman feels confident being with them and joins their group. In the context of the reasons for joining groups, which of the following is the reason why Salman joined the group?
A. ClosenessB. Strength in numbersC. Achievement as objectiveD. Common goals
Answer:
The answer is letter B
Explanation:
The reason why he joined the group was strength in numbers. Salmon joined the group because he felt confident being in the group. Having ties to others gives people confidence they may lack when they act alone. Their sense of confidence is well founded. In an organization, a group of people tends to be more influential than one person acting alone.
Salman joined the group at work for the solidary benefit of experiencing belonging and social interaction, which aligns with options related to closeness or common goals.
Explanation:The reason why Salman joined the group at his new workplace is likely because of a solidary benefit, which is the satisfaction derived from the experience of working with other people who share similar interests and social needs. As the new employee felt lonely and subsequently found a group that shares jokes and interacts informally to alleviate work-related stress, the group provides a sense of belonging and social interaction which is vital to most people's well-being and can significantly improve job satisfaction. This aligns with options involving closeness or common goals from the given choices.
The ACC Tutoring Service provides tutoring to accounting students. The volume of tutoring is low at the beginning of the semester and increases before exams. ACC had its highest level of service in May when they provided 4,300 hours of tutoring at a total cost of $125,000 and it lowest level of service in January when they provided 1,500 hours of tutoring at a total cost of $55,000. Using the high-low method, the estimated fixed costs are
Answer:
Estimated fixed cost is $17,500.
Explanation:
Applying the high-low method, first, we calculated the variable cost per unit of the firm: ( 125,000 - 55,000) / (4,300 - 1,500) = $25 per tutoring hour.
We have : Total cost of a firm = Variable cost per tutoring hour x tutoring hour delivered + fixed cost.
put the number in the formula, using the high point ( using low point will also result in the same result of fixed cost), we have:
125,000 = 25 x 4,300 + fixed cost <=> Fixed cost = 125,000 - 25 x 4,300 = $17,500.
To estimate fixed costs using the high-low method, first calculate the variable cost per unit. Next, to find the fixed costs, subtract the total variable costs from the total costs. In this case, the estimated fixed costs are $17,500.
Explanation:The high-low method is a cost estimation technique used in managerial accounting. It's used to separate a mixed cost into its fixed and variable components. The first step in the high-low method is to calculate the variable cost per unit.
To do this, we subtract the total cost at the lowest activity level from the total cost at the highest activity level and divide by the difference in hours. Here, it's ($125,000 - $55,000) / (4,300 hours - 1,500 hours) = $70,000 / 2,800 hours = $25/hour. This is the variable cost per hour.
Next, to find the fixed costs, we need to subtract the total variable costs at either the high or low point from the total costs at that point. Using the high point, the total variable cost is 4,300 hours * $25/hour = $107,500. So, the total fixed costs are $125,000 - $107,500 = $17,500.
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Suppose that a chicken farm uses a nearby stream to dispose of the wastes released by its chickens. These wastes flow downstream into a lake that has become thick with algae and polluted due to the minerals in the waste matter. The local office of a nonprofit environmental organization collects enough donations to stop the farm's pollution. Which of the following types of private solutions to the externality of pollution has occurred in this case? a. contracts b. Moral codes and social sanctions c. Integration of different types of businesses through merger or acquisition d. Charities It’s important to note that sometimes private solutions to externalities do not work. For example, this occurs when one party repeatedly holds out for a better deal. This describes the problem of (transaction cost, breakdown in bargaining, property held in common)
Answer:
The answer is letter D.
Explanation:
Charities. It’s important to note that sometimes private solutions to externalities do not work. For example, this occurs when one party repeatedly holds out for a better deal. This describes the problem of (transaction cost, breakdown in bargaining, property held in common)
The charitable actions of a local nonprofit organization represent a private solution to the externality of pollution caused by a chicken farm. This solution falls under the category of charities. The problem of one party holding out for a better deal causing a breakdown in bargaining relates to high transaction costs.
The solution to the chicken farm's pollution of the nearby stream and lake in this scenario represents a form of a charitable action to mitigate a negative externality. The local nonprofit environmental organization collected donations to stop the farm's pollution, which aligns with the concept of charities helping to fight behaviors resulting in negative externalities. Charities establish a private solution by using private funding to address externalities without requiring government intervention.
When discussing why sometimes private solutions to externalities do not work, the problem described is referred to as a breakdown in bargaining. A breakdown occurs when one party holds out for a better deal, resulting in increased transaction costs or difficulties in reaching an efficient solution to the externality.
The Guitar Shoppe reports the following sales forecast: August, $130,000; and September, $230,000. Total sales include 35% cash sales, 50% of credit sales collected in the month following sale, and the remaining 15% credit sales written off as uncollectible. Prepare a schedule of cash receipts for September.
Answer:
Total= $145,500
Explanation:
Giving the following information:
The Guitar Shoppe reports the following sales forecast: August, $130,000; and September, $230,000. Total sales include 35% cash sales, 50% of credit sales collected in the month following sale, and the remaining 15% credit sales written off as uncollectible.
Cash collection:
From August= (130,000*0.50)= 65,000
September= (230,000*0.35)= 80,500
Total= 145,500
Final answer:
The total cash receipts for the Guitar Shoppe in September include cash sales from September and 50% of August's credit sales, amounting to $122,750.
Explanation:
Schedule of Cash Receipts for September
To prepare the schedule of cash receipts for September, we need to consider the sales from August and September, respectively, and apply the company's policy regarding cash and credit sales. According to the shop's policy, 35% of sales are cash, and for the remaining 65% of sales that are on credit, 50% will be collected in the month following the sale, and 15% will be considered uncollectible.
August Sales:
$130,000
September Sales:
The total cash receipts for September include the cash sales from September and 50% of the credit sales from August. Therefore, the total cash receipts for September would be the sum of $80,500 and $42,250, which equals $122,750.
A study finds that during blizzards, online sales are highly associated with the number of snow plows on the road; the more plows, the more online purchases. The director of an association of online merchants suggests that the organization should encourage municipalities to send out more plows whenever it snows because, he says, that will increase business. Comment on the director's conclusion.
Answer:A snow plow helps to clear the road of snow after a snow downpour, while online purchases are transactions conducted through internet services.
The Director conclusion that municipality should send more plows to increase sales is not valid for the two situation are exclusive of each other the number of plows does not determine the number of online sales, plows are used naturally to clear the snow but it's the blizzards that prevents people to physically visits stores and rather prefers to order online.
So it can be concluded that period of blizzards increases online transactions and the online transactions is not dependent on plows on the streets.
Explanation:
You want to buy a car, and a local bank will lend you $20,000. The loan would be fully amortized over 5 years (60 months), and the nominal interest rate would be 12%, with interest paid monthly. What is the monthly loan payment? What is the loan’s EFF%?
Final answer:
The monthly loan payment for a $20,000 car loan with a 12% interest rate over 5 years is approximately $424.55. The loan's EFF% is approximately 12.68%.
Explanation:
To find the monthly loan payment, we can use the formula for the amortization of a loan:
Monthly Payment = (Loan Amount * Monthly Interest Rate) / (1 - (1 + Monthly Interest Rate)^-Total Months)
For this loan, the loan amount is $20,000, the monthly interest rate is 12% divided by 12 months (0.12 / 12 = 0.01), and the total months are 60. Plugging in these values, we get:
Monthly Payment = (20000 * 0.01) / (1 - (1 + 0.01)^-60)
Simplifying the equation and calculating, the monthly loan payment is approximately $424.55.
To find the loan's EFF%, we can use the formula:
EFF% = (1 + Monthly Interest Rate)^12 - 1
For this loan, the monthly interest rate is 0.12 divided by 12 (0.12 / 12 = 0.01). Plugging in this value, we get:
EFF% = (1 + 0.01)^12 - 1
Calculating, the loan's EFF% is approximately 12.68%.
A company’s inventory records report the following in November of the current year: BeginningNovember 15 units @ $10 PurchaseNovember 210 units @ $12 PurchaseNovember 66 units @ $14 On November 8, it sold 18 units for $40 each. Using the LIFO perpetual inventory method, what was the amount recorded in the cost of goods sold account for the 18 units sold?
The amount recorded in the cost of goods sold account for the 18 units sold on November 8 is $224.
To determine the cost of goods sold (COGS) using the LIFO (Last In, First Out) perpetual inventory method, we follow these steps:
Step 1: Identify Inventory Transactions:
Beginning Inventory (November 1): 5 units at $10 each
Purchase (November 2): 10 units at $12 each
Purchase (November 6): 6 units at $14 each
Step 2: Calculate Total Units Available for Sale:
Total units = 5 (beginning) + 10 (Nov 2) + 6 (Nov 6)
Total units = 21 units
Step 3: Sales Data:
Sold on November 8: 18 units
Selling Price: $40 each (but this won't affect COGS calculation)
Step 4: Using LIFO Method:
Under LIFO, the most recently purchased inventory is sold first. Thus, we need to sell from the most recent purchases:
First: The last purchase on November 6: 6 units at $14 each
Second: The next purchase on November 2: 10 units at $12 each
Third: We now need to sell 2 more units from the beginning inventory.
Last: The beginning inventory on November 1: 2 units at $10 each (from 5 units available).
Step 5: Calculating COGS:
From November 6 (6 units) = 6 * $14 = $84
From November 2 (10 units) = 10 * $12 = $120
From November 1 (2 units) = 2 * $10 = $20
Step 6: Total COGS:
COGS = 84 + 120 + 20
COGS = $224.
Correct Question:
A company’s inventory records report the following in November of the current year:
Beginning: November 1 = 5 units at $10
Purchase: November 2: 10 units at $12
Purchase: November 6: 6 units at $14
On November 8, it sold 18 units for $40 each. Using the LIFO perpetual inventory method, what was the amount recorded in the cost of goods sold account for the 18 units sold?
Art, Inc., has 5,000 shares of 4%, $100 par value, cumulative preferred stock and 20,000 shares of $1 par value common stock outstanding at December 31, 2018. There were no dividends declared in 2016. The board of directors declares and pays a $45,000 dividend in 2017 and in 2018. What is the amount of dividends received by the common stockholders in 2018?
$25,000
$20,000
$45,000
$0
Answer:
Dividend paid to Common Stockholders = $25000
so correct option is a. $25,000
Explanation:
given data
shares outstanding = 5,000
Par value = $100
Dividend Rate = 4%
common stock outstanding = 20,000 shares
par value = $1
dividend = $45,000
to find out
What is the amount of dividends received by the common stockholders in 2018
solution
first we get here Value of Preferred Stock that is express as
Value of Preferred Stock = Number of shares outstanding × Par value ....................1
put here value we get
Value of Preferred Stock is = 5,000 × $100
Value of Preferred Stock is = $500,000
and
Annual Dividend will be here
Annual Dividend = Value of Preferred Stock × Dividend Rate .........................2
put here value we get
Annual Dividend = $500,000 × 4%
Annual Dividend = $20,000
and
so as for 2017 Dividend paid is here as
Dividend paid to Preferred Stockholders = for 2016 + for 2017
Dividend paid to Preferred Stockholders = $20,000 + $20,000 = $40000
so Dividend paid to Common Stockholders = $45000- $40000 = $5000
and
for 2018 Dividend paid is here as
Dividend paid to Preferred Stockholders is = $20,000 for the 2018
so
Dividend paid to Common Stockholders will be = $45000 - $20000
Dividend paid to Common Stockholders = $25000
so correct option is a. $25,000
Consider an economy with two labor markets—one for manufacturing workers and one for service workers. Suppose initially that neither is unionized.
a. If manufacturing workers formed a union, what impact would you predict on the wages and employment in manufacturing?
b. How would these changes in the manufacturing labor market affect the supply of labor in the market for service workers? What would happen to the equilibrium wage and employment in this labor market?
Answer:
a. Wages increase but employment decreases.
b. Wages decreases and employment increases.
Explanation:
An economy has two separate labor markets, one for manufacturing workers and one for service workers. Neither of them is initially unionized.
a. If a union is formed in the market for manufacturing workers, this will increase wages in that market. This happens because the workers will be able to get their wages raised through collective bargaining.
As their wages increase, the supply of manufacturing workers will increase but their demand will decline as hiring workers will become costlier. This will create unemployment in the market for manufacturing workers.
b. The service's labor market is still not unionized. The unemployed workers from the manufacturing labor market will join the services labor market, seeking employment.
As the supply of labor increases in the service labor market, the supply curve will shift to the right. This rightward shift will cause their wages to decline. Employment in the services labor market will increase as it becomes cheaper to hire more workers.
A. If the people shgould form a union here, the impact of such union is that it may lead to higher wages but reduction in the number of workers.
What is a union?In the labor market, the trade union is a group of organized workers that aim to have better situations for the members of the union in terms of labor.
b. The changes made by tghe people is going to increase the supply of labor that is in the economy.
This would cause the equilibrium wage and employment in the country to fall.
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A productivity index of 110% means that a company’s labor costs would have been 10% higher if it had not made production improvements. Now refer to the Income Statement in Baldwin's Annual Report. The direct labor costs for Baldwin were $32,558. These labor costs could have been $20,000 higher if investments in training that increased productivity had not been made. What was the productivity index for Baldwin that led to such savings?
Answer:
161.4%
Explanation:
Please see attachment
The difference between zero profit and zero economic profit is that:
a. economists include opportunity cost in zero economic profit, while accountants do not include opportunity cost in zero profit.
b. economists do not include opportunity cost in zero economic profit, while accountants do include opportunity cost in zero profit.
c. economists include opportunity cost in zero profit, while accountants do not include opportunity cost in zero economic profit.
d. economists do not include opportunity cost in zero profit, while accountants do include opportunity cost in zero economic profit.
Answer:
The correct answer is letter "A": economists include opportunity cost in zero economic profit, while accountants do not include opportunity cost in zero profit.
Explanation:
Normal profit is an economic term that means zero economic profits. To an economist, this is normal since total revenue equals total cost which includes both explicit and implicit costs. It differs from the accounting profit or zero profits since the latter does not take into consideration implicit cost.
Zero profit refers to the accounting concept where total revenue equals explicit costs, while zero economic profit includes both explicit and implicit costs, the latter encompassing opportunity costs that accountants do not consider.
Explanation:The difference between zero profit and zero economic profit lies in the inclusion of opportunity costs in the calculation. A zero profit, often referred to in the context of accounting, means that the total revenue equals explicit costs, which encompass only the actual cash transactions involved in running a business. On the other hand, zero economic profit, a concept used by economists, factors in both explicit and implicit costs, the latter including opportunity costs, which represent the potential gains from alternative uses of the resources.
Accordingly, the correct answer to the question is:
a. economists include opportunity cost in zero economic profit, while accountants do not include opportunity cost in zero profit.
The difference between zero profit and zero economic profit is that economists include opportunity cost in zero economic profit, while accountants do not include opportunity cost in zero profit.
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Consider the economies of Blahnik and Gobbledigook, both of which produce glops of gloop using only tools and workers. Suppose that, during the course of 40 years, the level of physical capital per worker rises by 5 tools per worker in each economy, but the size of each labor force remains the same.
Complete the following tables by entering productivity (in terms of output per worker) for each economy in 2013 and 2053.
Year
Blahnik
Physical Capital Labor Force Output Productivity
(Tools per worker) (Workers) (Glops of gloop) (Glops per worker)
2013 11 30 1,800
2053 16 30 2,160
Year
Gobbledigook
Physical Capital Labor Force Output Productivity
(Tools per worker) (Workers) (Glops of gloop) (Glops per worker)
2013 8 30 900
2053 13 30 1,620
Initially, the number of tools per worker was higher in Blahnik than in Gobbledigook. From 2013 to 2053, capital per worker rises by 5 units in each country. The 5-unit change in capital per worker causes productivity in Blahnik to rise by a _______ amount than productivity in Gobbledigook. This illustrates the concept of ______, which makes it ______ for countries with low output to catch up to those with higher output.
Answer
The answer and procedures of the exercise are attached in a microsoft excel document.
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.
Palmona Co. establishes a $310 petty cash fund on January 1. On January 8, the fund shows $217 in cash along with receipts for the following expenditures: postage, $38; transportation-in, $13; delivery expenses, $15; and miscellaneous expenses, $27. Palmona uses the perpetual system in accounting for merchandise inventory.
Prepare journal entry to establish the fund on January 1, reimburse it on January 8, and reimburse the fund and increase it to $330 on January 8, assuming no entry in part 2
The journal entries include one to establish the petty cash fund on January 1st, another to reimburse it for expenditures on January 8th, and finally, an entry to increase the fund to $330 also on January 8th.
Establishing the Fund:
January 1st:
Petty Cash 310
Cash 310
To establish petty cash fund.
Reimbursing the Fund:
January 8th:
Postage Expense 38
Transportation-In Expense 13
Delivery Expenses 15
Miscellaneous Expenses 27
Cash Over and Short 3
Cash 217
(To reimburse petty cash for expenses: 38+13+15+27 = 93, and 310 - 93 - 217 = 0. Cash over and short is for balancing the entry)
Increasing the Fund:
Still on January 8th:
Petty Cash 20
Cash 20
(To increase the petty cash fund to 330)
Complete the following sentences. _______ pricing is setting a low price to drive competitors out of business with the intention of setting a monopoly price when the competition has gone.
A. Pillaging B. Predacious C. Piratical D. Predatory
The first firm to be accused of this practice was _______.
A. Standard Oil B. General Mills C. Microsoft D. Coca-Cola
Answer: The correct answers are "D. Predatory" and "A. Standard Oil".
Explanation: Predatory pricing is setting a low price to drive competitors out of business with the intention of setting a monopoly price when the competition has gone.
The first firm to be acused of this practice was Standard Oil.
Predatory prices consist of a pricing strategy that can be used by a predominant firm in the market in order to eliminate its competitors and thus secure the market monopoly. It's about reducing prices below cost.
Standard oil was the first company accused of this practice in 1958.
Company XYZ has a target capital structure of 50% equity and 50% debt. Its cost of equity is 6%, and cost of debt is 8% What would happen to XYZ's WACC if its capital structure were to shift to 75% equity and 25% debt? Assume a tax rate is40%.
A. WACC decrease
B. WACC increases
C. WACC remains constant
Answer:
Option (B) is correct.
Explanation:
WACC = (We × ke) + [Wd × kd × (1 - t)]
where,
We = Equity
Wd = Debt
ke = cost of equity
kd = cost of debt
t = tax rate
At 50% equity and 50% debt,
WACC = (50% × 6%) + [50% × 8% × (1 - 0.4)]
= 5.40%
At 75% equity and 25% debt,
WACC = (75% × 6%) + [25% × 8% × (1 - 0.4)]
= 5.70%
Therefore, there is an increase in the XYZ's WACC if its capital structure were to shift to 75% equity and 25% debt.
Ross and Reba are both in their 30s, and they are married. Reba earns $64,000 annually, and Ross earns $1,800 annually working part-time. Their adjusted gross income is $81,500. Reba participates in an employer-sponsored retirement plan. Ross and Reba contribute the maximum amount allowable annually to their IRAs. What is their allowable deduction for this year's contributions? a.$5,000 b.$6,800 c.$-0- d.$1,800 e.$12,000
Answer:
$11000 (Not part of the options)
Explanation:
Given the following information
Reba salary is $64,000 P/A
Ross salary is $1,800 P/A
Adjusted gross income is $81,500
To calculate their allowable deduction for the year's contributions:
If their spouse is an active participant in the employer sponsored retirement plan .It means that the deduction is limited MAGI. In this case, their MAGI is less than the threshold limit .Therefore 5500*2 = $11000 can be deductible .
Horace sells equipment with an adjusted basis of $20,000 to his great-grandson, Matthew, for its fair market value of $15,000. Matthew sells the equipment to an unrelated party for $17,000. What are Matthew’s realized and recognized gains (losses) upon the sale?
Answer:
The recognized gains upon the sale is $2000.
Explanation:
As the cost of purchase of the equipment to Mathew is $15000 and the sale proceeds received is $17000. The gain is actually calculated as follows;
Gain = Sale proceeds –Cost of equipment
Gain = Matthew sells the equipment to an unrelated party for $17,000 – Matthew bought equipment for its fair market value of $15,000
Which is $1700 -$1500 = $2000
Therefore the recognized gains upon the sale is $2000.
Russell Corporation sold a parcel of land valued at $440,000. Its basis in the land was $294,800. For the land, Russell received $121,500 in cash in year 0 and a note providing that Russell will receive $229,000 in year 1 and $89,500 in year 2 from the buyer (plus reasonable interest on the note). (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.)
a. What is Russell’s realized gain on the transaction?
b. What is Russell’s recognized gain in year 0, year 1, and year 2?
Year 0
Year 1
Year 2
Answer:
Please see attachment
Explanation:
Please see attachment
Final answer:
The realized gain on the sale of the land is $145,200. The recognized gain for Russell Corporation in year 0 is $40,068, in year 1 is $75,145, and in year 2 is $29,987. These calculations are based on the installment payments received each year as a proportion of the total sale price.
Explanation:
Realized and Recognized Gain Calculation
The student is asking about the realized and recognized gain from a real estate transaction for Russell Corporation. To find the realized gain, we subtract the basis of the land from the amount Russell will receive from the sale. The total amount Russell will receive is the sum of the cash and note payments: $121,500 (year 0) + $229,000 (year 1) + $89,500 (year 2) = $440,000. Since the land's basis was $294,800, the realized gain is $440,000 - $294,800 = $145,200.
For recognized gain, we consider the amount of money actually received each year. In year 0, Russell received $121,500, but since the full gain cannot be realized until all payments are received (considering the installment sale method), the recognized gain in year 0 is a proportion of the total gain. This is calculated as ($121,500 / $440,000) * $145,200 = $40,068. Similarly, the recognized gain in year 1 is ($229,000 / $440,000) * $145,200 = $75,145, and in year 2, ($89,500 / $440,000) * $145,200 = $29,987.
Each year's recognized gain reflects the installment received that year as a proportion of the total sale price, applied to the total realized gain.
Your company just bought a new distillation unit for $175,000 to be used for research and development. Such equipment has a 3-year MACRS classification. The MACRS percentages are 33.33 percent, 44.44 percent, 14.82 percent, and 7.41 percent, respectively. What is the book value of the distillation unit at the end of year 2?A) $12,968.00B) $38,902.50C) $49,833.50D) $77,770.00E) $116,673.50
Answer:
B) $38,902.50
Explanation:
The MACRS percentages are
First year = 33.33 percent
Second year = 44.44 percent
Third year = 14.82 percent
Fourth year = 7.41 percent
First Year 33.33% = $175,000 * 33.33/100 = $116,672.50
Second Year 44.44% = $116,672.50 - ($175,000 * 44.44/100)
= $116,672.50 - $77,770.00 = $38,902.50
An electronics firm is considering how best to supply the world market for microprocessors used in consumer and industrial electronic products. A manufacturing plant costs approximately $500 million to construct and requires a highly skilled work force. The total value of the world market for this product over the next 10 years is estimated to be between $10 and $15 billion. The tariffs prevailing in this industry are currently low. Should the firm adopt a concentrated or decentralized manufacturing strategy? What kind of location(s) should the firm favor for its plant(s)?
The firm should adopt a concentrated manufacturing strategy. This is because based on the fact that tariffs are low in terms of the sum above that was paid, this factory is said to be able to supply different markets at little higher cost.
What is concentrated manufacturing?A centralized manufacturing strategy is known to be a type of method used that consist of only one principal facility through which one's product is moved and distributed.
It is known to help makes consistent quality easy as a person only need to validate only one process. The Centralized manufacturing is known to be the option that best suit the firm above as priority is focus on just on methods instead of multiple.
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Given the significant startup investment and other factors, the firm should likely adopt a concentrated manufacturing strategy. Location decision should consider various factors, with a emphasis on the availability of a skilled workforce and other substantial elements rather than just low-cost environments.
Explanation:Considering the given information, it appears the electronics firm would likely benefit from a concentrated manufacturing strategy. Justifying a $500 million investment requires significant production volume, which is more feasible with a centralized approach. Factors including the total value of the world market and low tariffs further support this strategy.
When deciding on plant location, firms must evaluate a variety of factors, including labor and capital costs, proximity to suppliers and customers, infrastructure quality, tax levels, and local government competence. Given the need for a highly skilled work force in this case, the firm may favor locations with a strong technical education system and existing high-tech industries.
Though environmental regulations can be a concern, they typically make up only 1 to 2% of a large industrial plant's costs. Therefore, this should not be a determining factor in location decision. The company should favor a location that aligns with these considerations while also providing the necessary facilities and a suitable environment for large scale production.
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.According to supply-side fiscal policy, reducing tax rates on wages and profits will:
a.Group of answer choices
b.reduce both unemployment and inflation.
c.create demand-pull inflation.
d.lower the price level but may trigger a recession.
e.result in stagflation.
Answer:
The answer is C.
Explanation:
Reducing tax rate according to supply - side policy creates demand pull inflation.
Demand pull inflation is a situation whereby people have more buying power due to the availability of cash thereby leading to high demand and consequentially leading to an increase in the price of goods and services by suppliers.
That is the process where demand outplays supply due to the high purchasing power thereby causing price to increase which is the demand pull inflation effect.
Marvin received Form 1099-C reporting canceled credit debt of $7,000. His total liabilities immediately before the cancellation were $43,000. The FMV of assets immediately before the cancellation were $38,000. What amount of canceled debt will Marvin report on his return?
Answer:
$2000 of canceled debt that Marvin must report on his return
Explanation:
Please see attachment
Answer:
$2.000
Explanation:
First we calculate the debt incurred as the result of the cancellation by deducting liabilities with asset value as follows:
43,000 - 38,000 = $5,000
Under the insolvency exception rule Marvin can exclude the $5,000 cancelled debt from income.
7,000 - 5,000 = $2,000
Hence, Marvin must report the addition of $2,000 aside from his income on his returns.