Answer:
Equity at August 1st 0
adds: Carmen Camry Investment 101,4000
Net Income 5,410
Subtotal 106,810
Withdrawals -5,950
Carmen Camry capital account at the end of August 31th 100,860
Explanation:
We have to calculae the net income
Fees earned 26,960
office 5,200
rent expense 9,500
salaries expense 5,560
telephone expense 820
miscellaneous expenses 470
Total Expenses 21,550
Net Income 5,410
Then we do the equity stamtent:
beginning + investment + net income - withdrawals = ending
Equity at August 1st 0
adds: Carmen Camry Investment 101,4000
Net Income 5,410
Subtotal 106,810
Withdrawals -5,950
Carmen Camry capital account at the end of August 31th 100,860
Answer:
HELP TODAY
STATEMENT OF OWNER'S EQUITY
FOR THE YEAR ENDED 31 AUGUST xxxx
$
Camry: Opening Balance 0
Add : Investment contribution 101, 400
Net income 10, 610
Less: Drawings (5,950)
Camry: Closing Balance 106, 060
Explanation:
The statement of owner's equity shows changes that occurred in the capital account in a business classified as a sole proprietorship (a business owned and managed by one person). This statement comprises of any contributions by the owner plus any operating income generated less operating costs and drawings made by the owner. In order to arrive at the above valuation, net income should be calculated. This is done by subtracting all expenses ($16350) from the consulting fees revenue ($26,960) that was generated during August. The net income generated was $10, 610 ($26,960 - ($9500 + $5560 + 820 + 470)). The drawings amount and initial contribution were both given in the question.
Note: The office supplies are considered to be an asset in Help Today. However, if the office supplies were to be treated as an expense, then the net income would be reduced by $5200.
A company received a bank statement with a balance of $ 6 comma 300. Reconciling items included a bookkeeper error of $ 400long dasha $ 400 check recorded as $ 600long dashtwo outstanding checks totaling $ 820, a service charge of $ 22, a deposit in transit of $ 260, and interest revenue of $ 22. What is the adjusted bank balance?
Answer:
Bank adjusted balance 5,720
Explanation:
6,300
-840 outstanding check
+260 deposit in ransit
5,720 bank adjustment balance
Notes:
the bookkepper error needs to be done on books cash accountthe service charge are included in the bank statemnt, is at adjustment to the book cashthe interest revenue is also 22 an adjustment for the book cash accountOne of the advantages of starting your own business is
A. no hassles. B. profit. C. free time. D. lack of responsibility .8
Answer:
B. profit
Hope this helps
Explanation
One of the advantages of starting your own business is B profit
The advantages of having businessOne of the advantages of starting your own business is the potential to earn a profit. As a business owner, you have the opportunity to generate income and build wealth through the success of your venture.
Unlike being an employee, where your earnings are typically limited to a salary or wages, owning a business allows you to reap the financial rewards of your efforts and entrepreneurial activities.
However, it is important to note that starting and running a business also comes with various challenges, responsibilities, and risks. B profit is correct
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Consider the cash flows in selections 1 through 4. In each case, the first cash flow occurs at the end of the first period, the second cash flow at the end of the second period, and so on. Which of the following selections has the lowest PRESENT VALUE if the discount rate is 10%?1. $100; $100; $100; $1002. $0; $0; $0; $5003. $350; $0; $0; $04. $50; $50; $50; $375
Answer:
Selection 1 has lowest NPV = $316.9
Explanation:
Rate of discount is 10% therefore PV factor for every year = [tex]\frac{1}{(1+0.1){^n}}[/tex]
Here 0.1 because interest rate is 10% n = number of year for year 1 = 1 for year 2 = 2 and so on.
Selection 1
Year Cash Flow PV Factor Value
1 $100 0.909 $90.9
2 $100 0.826 $82.6
3 $100 0.751 $75.1
4 $100 0.683 $68.3
Net Present Value = $316.9
Selection 2
In this only in 4th year the payment is received = $500 X 0.683 PV Factor
= $341.5
Selection 3
Only in year 1 $350 is received = $350 X 0.909 = $318.15
Selection 4
Year Cash Flow PV Factor Value
1 $50 0.909 $45.45
2 $50 0.826 $41.3
3 $50 0.751 $37.55
4 $375 0.683 $256.125
Net Present Value = $380.425
Selection 1 has lowest NPV = $316.9
Selection a) has the lowest present value of approximately $364.20 when the discount rate is 4%. The correct answer is option a : $100; $100; $100; $100
To find the present value of each selection, we use the formula for calculating the present value of a series of cash flows:
[tex]\[ PV = \frac{CF_1}{(1+r)^1} + \frac{CF_2}{(1+r)^2} + \frac{CF_3}{(1+r)^3} + \frac{CF_4}{(1+r)^4} \][/tex]
where [tex]\( CF_n \)[/tex] represents the cash flow at the end of period n and r is the discount rate.
Let's calculate the present value for each selection:
a) [tex]\( PV_a = \frac{100}{(1+0.04)^1} + \frac{100}{(1+0.04)^2} + \frac{100}{(1+0.04)^3} + \frac{100}{(1+0.04)^4} \)[/tex]
[tex]\[ PV_a = \frac{100}{1.04} + \frac{100}{1.04^2} + \frac{100}{1.04^3} + \frac{100}{1.04^4} = 96.15 + 92.59 + 89.29 + 86.17 = 364.20 \][/tex]
b) [tex]\( PV_b = \frac{0}{(1+0.04)^1} + \frac{0}{(1+0.04)^2} + \frac{0}{(1+0.04)^3} + \frac{450}{(1+0.04)^4} \)[/tex]
[tex]\[ PV_b= \frac{450}{1.04^4} = \frac{450}{1.1699} = 384.69 \][/tex]
c) [tex]\( PV_c = \frac{400}{(1+0.04)^1} + \frac{0}{(1+0.04)^2} + \frac{0}{(1+0.04)^3} + \frac{0}{(1+0.04)^4} \)[/tex]
[tex]\[ PV_c = \frac{400}{1.04} = 384.62 \][/tex]
d) [tex]\( PV_d = \frac{50}{(1+0.04)^1} + \frac{50}{(1+0.04)^2} + \frac{50}{(1+0.04)^3} + \frac{275}{(1+0.04)^4} \)[/tex]
[tex]\[ PV_d = \frac{50}{1.04} + \frac{50}{1.04^2} + \frac{50}{1.04^3} + \frac{275}{1.04^4} = 48.08 + 46.30 + 44.59 + 242.71 = 381.68 \][/tex]
Therefore, selection a) has the lowest present value of approximately $364.20.
Complete question : Consider the cash flows in selections a through d. In each case, the first cash flow occurs at the end of the first period, the second cash flow at the end of the second period, and so on. Which of the following selections has the lowest present value if the discount rate is 4%?
a) $100; $100; $100; $100
b) $0; $0; $0; $450
c) $400; $0; $0; $0
d) $50; $50; $50; $275
Pearson Motors has a target capital structure of 30% debt and 70% common equity, with no preferred stock. The yield to maturity on the company's outstanding bonds is 12%, and its tax rate is 25%. Pearson's CFO estimates that the company's WACC is 12.50%. What is Pearson's cost of common equity? Do not round intermediate calculations. Round your answer to two decimal places.
Answer:
The total amount of all common equity investors' investments in a firm, along with the total value of all common shares, plus retained earnings (RE) and additional paid-in capital (APIC), is known as common equity.
Explanation:
The stock of a company is neither an asset nor a liability. A common stock is a type of investment.
The cost of common equity at Pearson is 14%.Given:WACC =12.50%Tax rate = 25%Outstanding bibds = 12%Capital structure = 30:70[tex]\text{After-tax cost of debt}[/tex] [tex]= \text{yield to maturity}[/tex] × [tex](1-\text{tax rate})[/tex]
[tex]= 12(1-0.25)[/tex]
[tex]=9[/tex]%
[tex]\text{WACC} =[/tex] [tex]\text{Respective costs}[/tex] × [tex]\text{Respective weight}[/tex]
[tex]12.5 = (9) (0.3) + (0.7)[/tex] × [tex]\text{Cost of common equity}[/tex]
[tex]\text{Cost of common equity}[/tex] = [tex]\frac{(12.5-2.7)}{0.7}[/tex]
[tex]=14.00[/tex]%
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The cost of common equity for Pearson Motors is 14.67%.
To find the cost of common equity (rs), we can use the Weighted Average Cost of Capital (WACC) formula:
[tex]\[ WACC = \frac{D}{V} \times rd \times (1 - t) + \frac{E}{V} \times rs \][/tex]
We can plug these values into the WACC formula:
[tex]\[ 0.1250 = 0.30 \times 0.12 \times (1 - 0.25) + 0.70 \times rs \][/tex]
Solving for [tex]\( rs \):[/tex]
[tex]\[ 0.1250 = 0.30 \times 0.12 \times 0.75 + 0.70 \times rs \][/tex]
[tex]\[ rs = \frac{0.0980}{0.70} \][/tex]
[tex]\[ rs = 0.1400 \][/tex]
Converting to percentage form and rounding to two decimal places:
[tex]\[ rs = 14.00\% \][/tex]
However, since we are not rounding intermediate calculations, the precise value before rounding to two decimal places is:
[tex]\[ rs = 14.666666666667\% \][/tex]
Rounded to two decimal places, the cost of common equity is 14.67%.
Economies of scale occur when a firm'sa. marginal costs are constant as output increases. b. long-run average total costs are decreasing as output increases. c. long-run average total costs are increasing as output increases. d. marginal costs are equal to average total costs for all levels of output.
Economies of scale occur when a firm's long-run average total costs are decreasing as output increases. This means that the business can achieve a cost advantage by increasing the production scale. Hence, the cost per unit of product decreases.
Explanation:Economies of scale occur when a firm's long-run average total costs decrease as output increases. This concept refers to the cost advantage that a business can achieve by increasing the scale of production, meaning producing more output. As the scale of production increases, the cost per unit of product decreases, which is the essence of economies of scale. For instance, a large manufacturing company may be able to produce goods at a lower cost per unit compared to a smaller company because it can buy raw materials in bulk at a cheaper price and distribute the fixed costs over a larger number of units. Therefore, the correct answer to your question is: b. long-run average total costs are decreasing as output increases.
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Economies of scale occur when a company's long-run average total costs decrease as output increases, due to operational efficiencies gained from increased production. This concept is represented by option 'b' in the question. Other options do not accurately illustrate economies of scale.
Explanation:The correct answer to the question is 'b. long-run average total costs are decreasing as output increases'. This statement is consistent with the concept of Economies of Scale. It refers to the economic concept where the average cost of production decreases as the quantity produced increases. It is often happening because of operational efficiencies and synergies when production volumes are increased.
Conversely, Diseconomies of Scale occur when long-run average costs start to increase as output increases. This increase in costs as the firm increases output might occur because the firm becomes too large and difficult to manage effectively, causing an increase in costs.
Moreover, other options such as option 'a', 'c' and 'd' do not accurately depict the concept of economies of scale. In particular, changes in marginal cost or total costs do not directly relate to or indicate the presence of economies of scale, which specifically refers to changes in long-run average total costs.
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How does nominal GDP differ from real GDP?a. nominal GDP includes intermediate goods and real GDP does notb. Nominal GDP is based on current prices and real GDP is based on constant pricesc. nominal GDP includes only durable goods and real GDP includes durable and nondurable goodsd. nominal GDP is calculated using current output and real GDP is calculated using constant goods
Answer:
The correct answer is option b.
Explanation:
The nominal GDP is a measure of economic growth. It shows the quantity of final goods produced in an economy at the current market prices. It is not inflation adjusted and thus includes fluctuations in price level.
The real GDP on the other hand is exclusive of inflation. IT is a inflation adjusted measure and measures the growth in economic output at constant prices.
So, the basic difference between the two is that nominal GDP is based on current prices, while real GDP is based on constant prices.
Nominal GDP is based on current market prices and can be influenced by changes in prices from one year to the next, whereas Real GDP is computed using constant prices from a particular base year, adjusting for the inflation impacts and providing a more precise measure of economic growth.
Explanation:In economics, the key difference between nominal GDP and real GDP lies in how each measurement adjusts for inflation and changes in the economy's price level over time. Nominal GDP is calculated at current market prices, including both the changes in production and changes in prices. This means if prices change from one year to the next, it can affect Nominal GDP.
On the other hand, Real GDP is calculated using constant prices from a specific base year. This adjusts for the effects of inflation, providing a more accurate measure of the actual growth of the economy. It reflects changes in the economy due to rises in output and not due to rises in prices. Therefore, the answer is option b: Nominal GDP is based on current prices and real GDP is based on constant prices.
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Upland has a population of 15,000, of whom 9,000 work 8 hours a day to produce real output of $342,000. Lowland has a population of 8,000, of whom 7,000 work 7 hours a day to produce real output of $171,500. A. Upland has higher productivity and higher real GDP per person than Lowland. B. Upland has higher productivity but lower real GDP per person than Lowland. C. Upland has lower productivity but higher real GDP per person than Lowland. D. Upland has lower productivity and lower real GDP per person than Lowland.
Answer:
A.- Upland has higher productivity and higher real GDP per person than LowlandExplanation:
GDP per person: GDP / population
Productivity: GDP / hours worked
GDP per person Upland 342,000 / 15,000 = 22,8
Hours worked Upland = 9,000* 8 = 72,000
Productivity Upland = 342,000 / 72,000 = 4.75
GDP per person Lowland 171,500 / 8,000 = 21.4375
Hours worked Lowland 7,000* 7 = 49,000
Productivity Lowland = 171,500 / 49,000 = 3.5
Comparison
22.8 > 21.4375 & 4.75 > 3.5
This problem involves calculating productivity (output per hour) and real GDP per person (total output per person). It is found that Upland has higher productivity and higher real GDP per person than Lowland.
Explanation:In order to answer this question, we need to understand two economic concepts: productivity and real GDP per person. Productivity is the output produced per hour of work. In Upland, workers produce $342,000 in 8*9000 hours, which gives a productivity of about $4.75/hour. In Lowland, workers produce $171,500 in 7*7000 hours, leading to a productivity of about $3.50/hour. Hence, Upland has higher productivity.
Real GDP per person is the total output divided by the population. Upland has a real GDP per person of $342,000/15,000 which is approximately $22.8/person, whereas Lowland has a real GDP of $171,500/8,000 amounting to about $21.44/person. Therefore, Upland has a higher real GDP per person. This means the correct answer would be Upland has higher productivity and higher real GDP per person than Lowland.
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You are considering two independent projects that have differing requirements. Project A has a required return of 12 percent compared to Project B’s required return of 13.5 percent. Project A costs $75,000 and has cash flows of $21,000, $49,000, and $12,000 for Years 1 to 3, respectively. Project B has an initial cost of $70,000 and cash flows of $15,000, $18,000, and $41,000 for Years 1 to 3, respectively. Given this information, you should:
1. accept both Project A and Project B.
2. accept Project A and reject Project B.
3. accept Project B and reject Project A.
4. reject both Project A and Project B.
5. accept whichever one you want but not both.
Answer:
4. reject both Project A and Project B.
their NPV are negative so are not profitable.
Explanation:
We have to calculate the present value of the projects at their return rate
Project A
Present value of the cash flow - investment = net present value
[tex]\frac{21,000}{(1.12)^{1} } = PV[/tex]
[tex]\frac{49,000}{(1.12)^{2} } = PV[/tex]
[tex]\frac{12,000}{(1.12)^{3} } = PV[/tex]
-75,000 + PV 21,000 + PV 49,000 + PV 12,000
-75,000 + 18,750 + 39062.5 + 8,541.36 = -8646.14
Project B
Present value of the cash flow - investment = net present value
-70,000 + PV 15,000 + PV 18,000 + PV 41,000
[tex]\frac{15,000}{(1.135)^{1} } = PV[/tex]
[tex]\frac{18,000}{(1.135)^{2} } = PV[/tex]
[tex]\frac{41,000}{(1.135)^{3} } = PV[/tex]
-70,000 + 13215.86 + 13972.71 + 28041.18 = -14770.25
The law of supply declares which of the following?a. supply falls as price fallsb. supply increases as price fallsc. supply stays the same no matter how prices changed. supply falls as prices increase
The law of supply states that supply increases as the price falls.
Explanation:A market equilibrium occurs when the total quantity of goods and services demanded in an economy equals the total quantity supplied, resulting in stable economic conditions without inflation or recession. Thus, it is directly influenced. by both the forces of demand and supply.
The law of supply declares that supply increases as the price falls. This means that when the price of a good or service goes down, suppliers are willing to produce and sell more of it. Conversely, when the price goes up, suppliers are willing to produce and sell less of it. This relationship remains true as long as all other factors influencing supply, such as production costs and technology, remain constant.
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The correct answer to the student's question is 'a. supply falls as price falls,' as the law of supply states there is a direct relationship between price and quantity supplied.
The law of supply is a fundamental concept in economics that describes how producers respond to changes in price. According to the law of supply, if all other factors are held constant (ceteris paribus), an increase in the price of a good or service will lead to an increase in the quantity supplied of that good or service. Conversely, if the price of a good or service falls, the quantity supplied will also decrease. Therefore, the correct answer to the student's question is 'a. supply falls as price falls.'
For each of the following transactions, what is the initial effect (increase or decrease) on M1? On M2? a. You sell a few shares of stock and put the proceeds into your savings account. b. You sell a few shares of stock and put the proceeds into your checking account. c. You transfer money from your savings account to your checking account. d. You discover $0.25 under the floor mat in your car and deposit it in your checking account. e. You discover $0.25 under the floor mat in your car and deposit it in your savings account. 2. There are three types of money: commodity money, commodity-backed money, and fiat money. Which type of money is used in each of the following situations? a. Bottles of rum were used to pay for goods in colonial Australia.
Answer: The description are as follows:
Explanation:
Monetary aggregates are as follows:
M1 = Currency with public + Check-able deposits + other deposits with RBI
M2 = M1 + Post office Savings A\c
(a) Selling shares of stocks doesn't affect any of the monetary aggregates, M1 or M2. But depositing the selling amount into savings account have an impact on M2. As savings account is a constituent of M2, which lead to increase in M2 and doesn't have any impact on M1.
(b) Selling shares of stocks doesn't affect any of the monetary aggregates, M1 or M2. But depositing the selling amount into checking account have an impact on both M1 and M2. As checking account is a constituent of M1 and M1 is a constituent of M2, so, this will increase both M1 and M2.
(c) If the amount is transferred from savings account to checking then this will increase the M1 and doesn't change M2. As checking account is a component of M1, so this will increase M1. M2 consists of both checking & savings account, so there is no impact on M2.
(d) Depositing cash into a checking account doesn't impact M1 or M2. Because there is just a transfer of funds from one component of M1 (that is currency with public) to another component of M1 (that is checking account).
(e) Depositing cash into a savings account doesn't have any impact on M2 but it decreases M1. Because there is a fall in the component of M1 (that is currency with public) which will decreases M1. There is no change in M2, as M2 consists of both M1 and Savings account.
Commodity Money is used in a situation where bottles of rum were used to pay for goods in colonial Australia. Commodity money is a money that is used for buying goods. Ideally, there is a trade of a commodity for a commodity.
The percent markup on a pickup truck is known to be 252% based on cost to the seller. If the seller paid $15,800 for one, then what would be the corresponding percent markup based on selling price? (round to the nearest tenth of a percent)
Answer:
The markup rate under selling price will be 71.59%
Explanation:
Using markup base on cost the formula is:
sales price = cost x markup percentage + cost
sales price = COST X 252% + COST = 2.52 COST + COST = 3.52 COST
SALES PRICE = 3.52 x COST
Knowing that price is 15,800 the cost is 15,800/3.52 = 4,488.64
Using selling price the formula is:
cost / ( 1 - markup) = Price
Replacing Price with the ammount given in the cost-base markup we got:
4,488.64/(1-markup) = 15,800
now we solve for the markup
1 - 4,488.64/15,800 = markup = 0.7159 = 71.59%
Let’s assume you purchased a new car and finance it through the dealer. The purchase price was $30,000 including all fees, taxes and delivery costs. The dealer offered an ‘all inclusive’ financing plan at a 12% rate. Your 30 monthly payments were $1,300, derived by adding interest of $9,000 to the $30,000 and dividing by 30 monthly payments. Your friends tell you that your interest rate is above 20% and that you should have borrowed from your home equity line at a lower rate. Are they right?
Answer:
real rate = 0.214051525
Your friends are right
Explanation:
We have to calculate the rate at the present value of an annuity of 30 monthly payment of 1,300 which equals 30,000
[tex]C * \frac{1-(1+r)^{-time} }{rate} = PV\\[/tex]
[tex]1300 * \frac{1-(1+r)^{-30} }{rate} = 30,000\\[/tex]
we use excel, iteractive process or a financial calculator to solve for rate
0.0178376
this rate will be the monthly rate, we need to multiply by 12
0.0178376
x 12
0.214051525
A newly created design business, Teri's Art, is finishing its first year of operations. During the year, credit sales were $ 42,000 and collections of credit sales were $ 34,000. One account for $ 650 was written off. Teri's Art uses the aging-of-receivables method to account for bad debts expense. It has estimated $ 200 as uncollectible at yearminusend. What is the amount of the Bad Debts Expense for the first year of operations?
Answer:
The bad debt expense for the year was 650
Explanation:
bad debt expense 200 DEBIT
allowance 200 CREDIT
allowance 200 DEBIT
bad debt expense 450 DEBIT
account receivable 650 CREDIT
The bad debt expense for the year was 650
Final answer:
The Bad Debts Expense for Teri's Art for the first year is calculated by adding the already written-off uncollectible account ($650) and the end-of-year estimated uncollectible amount ($200), totaling $850.
Explanation:
To calculate the Bad Debts Expense for the first year of operations for Teri's Art, we need to take into account the credit sales, collections, write-offs, and the estimated uncollectible amount based on the aging-of-receivables method. Teri's Art had credit sales of $42,000, of which $34,000 were collected. An account of $650 was already written off as uncollectible. Additionally, the company has estimated another $200 as uncollectible at year-end.
Using this information, the Bad Debts Expense for the year would be the sum of the written-off account and the estimated uncollectible amount:
$650 + $200 = $850.
The Bad Debts Expense for Teri's Art in its first year is therefore $850.
What is the argument commonly used by supporters of a state income tax? A. It will probably be quite regressive. B. It is a fairer but highly unreliable source of revenue. C. It makes Texas more attractive to businesses that are considering relocating from out of state. D. It is a fair and more reliable source of revenue.
Answer:
D. It is a fair and more reliable source of revenue.
Explanation:
Their tax base is reliable and the amount is tie to the person or business income, so more tax implies that the person is having higher income as well. This make it fair, because high-income taxpayers contribute more nominal amount than low-income taxpayers, but the rate is the same for both.
Whirly Corporation’s contribution format income statement for the most recent month is shown below: Total Per Unit Sales (8,000 units) $ 248,000 $ 31.00 Variable expenses 144,000 18.00 Contribution margin 104,000 $ 13.00 Fixed expenses 55,700 Net operating income $ 48,300 Required: (Consider each case independently): 1. What would be the revised net operating income per month if the sales volume increases by 90 units
Answer:
An increase in sale for 90 units, will increase the net income for 1$,170
Explanation:
We are not given with any information of additional cost or special price for this units, so we use the current values.
So we simply multiply the contribution per unit by the increase in sale.
Contribution Margin x Δ sales = Δ income
13 x 90 = 1,170
Each unit contributes with 13 additional income, there are 90 additional units
Total income added 1,170
Tubaugh Corporation has two major business segments--East and West. In December, the East business segment had sales revenues of $240,000, variable expenses of $135,000, and traceable fixed expenses of $31,000. During the same month, the West business segment had sales revenues of $910,000, variable expenses of $480,000, and traceable fixed expenses of $173,000. The common fixed expenses totaled $254,000 and were allocated as follows: $127,000 to the East business segment and $127,000 to the West business segment. The contribution margin of the West business segment is
Answer:
The contribution margin of the West business segment is $430,000
Explanation:
The contribution margin is the difference between the sales revenue and the variable expense. Other cost like - fixed expense, traceable fixed cost is irrelevant while calculating the fixed cost.
So,
Contribution margin for the West business :
= Sales revenue - Variable expense
= $910,000 - $480,000
= $430,000
Thus, the contribution margin of the West business segment is $430,000
Nancy Henderson is a saleswoman for a manufacturer of small kitchen appliances. She does not directly solicit orders. Her primary duties involve promotional activities and introducing new products to her employer's indirect customers. She spends much of her time demonstrating appliances at various retail stores. Nancy would be classified as a(n):
Answer: sales and marketing person
Explanation: Nancy Henderson would be considered as a sales and marketing employee with detailed knowledge. She will be considered as a hardworking employee as she spends much of her time in demonstration of new products to prospective customers. She is focused on her job as she carefully follow orders which are not even direct from her manager. Her primary duties regarding promotion and introduction clarifies she is involved in sales and marketing activities.
Which of the following statements is CORRECT? Question 8 options: An investor can eliminate virtually all market risk if he or she holds a very large and well diversified portfolio of stocks. The higher the correlation between the stocks in a portfolio, the lower the risk inherent in the portfolio. It is impossible to have a situation where the market risk of a single stock is less than that of a portfolio that includes the stock. Once a portfolio has about 40 stocks, adding additional stocks will not reduce its risk by even a small amount. An investor can eliminate virtually all diversifiable risk if he or she holds a very large, well-diversified portfolio of stocks.
Answer:
Once a portfolio has about 40 stocks, adding additional stocks will not reduce its risk by even a small amount.
Explanation:
a) are e) are the same just the working is diferent but are true:
A stock’s stand-alone will be higher than a portfolio of more stocks.
A rational investor can eliminate the diversifiable risk by holding the stock in a well-diversified portfolio, and the risk that remains is called market risk So are FALSE
b) higher correlation means the stocks behave in the same direction, so the risk is not eliminate. To decrease the risk it should be a portfolio of lower correlation
FALSE
c) two stock one with risk of 10% and one with risk of 2%
the portfolio of this two shares, assuming same quantity, would be less than 10% making the statment false.
FALSE
d) Once a portfolio has about 40 stocks, adding additional stocks will not reduce its risk by even a small amount.
That is correct, because the market risk is there even if the portfolio is compose of all the of the market.
Because It cannot be eliminated through diversification
TRUE
An investor can eliminate virtually all diversifiable risk if he or she holds a very large, well-diversified portfolio of stocks.
Explanation:The correct statement among the options is: An investor can eliminate virtually all diversifiable risk if he or she holds a very large, well-diversified portfolio of stocks.
Diversification is an important concept in investing. It involves spreading investments across different assets, such as stocks, bonds, and mutual funds, to reduce the risk associated with investing in a single asset or company.
By holding a well-diversified portfolio that includes a large number of different stocks and assets, an investor can reduce the impact of any individual stock's performance on their overall portfolio and eliminate most of the risk that is specific to individual stocks.
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Bandar Industries Berhad of Malaysia manufactures sporting equipment. One of the company’s products, a football helmet for the North American market, requires a special plastic. During the quarter ending June 30, the company manufactured 35,000 helmets, using 22,500 kilograms of plastic. The plastic cost the company $171,000. According to the standard cost card, each helmet should require 0.6 kilograms of plastic, at a cost of $8 per kilogram. Required: 1. According to the standards, what cost for plastic should have been incurred to make 35,000 helmets? How much greater or less is this than the cost that was incurred?
Answer: cost of plastic = $168,000
excess cost = $3000
Explanation: This can be done as follows :-
cost of plastic = (standard quantity per * (standard price * ( no. of helmet)
should been helmet) per kg of plastic)
incurred
= (0.6) * (8) * (35,000)
= $168,000
so the extra cost incurred is $3000 that is $171,000 - $168,000 .
The standard cost for plastic to produce 35,000 helmets should have been $168,000. The actual cost incurred was $171,000, which means $3,000 more was spent than the standard cost.
Explanation:According to the standard cost card, the standard cost for plastic to make 35,000 helmets would be calculated by multiplying the standard amount of plastic required for one helmet by the standard cost per kilogram and then by the total number of helmets. The standard amount of plastic per helmet is 0.6 kilograms, and the cost per kilogram is $8.
The calculation would be:
Standard cost = 0.6 kg/helmet × $8/kg × 35,000 helmets
Therefore, the standard cost = 21,000 kg × $8/kg = $168,000.
Now, comparing this to the actual cost incurred, which was $171,000, we can find the difference:
Difference = Actual cost - Standard cost = $171,000 - $168,000 = $3,000.
Therefore, the actual cost incurred was $3,000 more than the standard cost.
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Parent Corporation purchased land from S1 Corporation for $220,000 on December 26, 20X8. This purchase followed a series of transactions between P-controlled subsidiaries. On February 15, 20X8, S3 Corporation purchased the land from a non affiliate for $160,000. It sold the land to S2 Company for $145,000 on October 19, 20X8, and S2 sold the land to S1 for $197,000 on November 27, 20X8. Parent has control of the following companies:
Subsidiary Level of Ownership 2008 Net IncomeS3 80% $100,000S2 70% $70,000S1 90% $95,000Parent reported income from its separate operations of $200,000 for 20X8.10-3. Based on the preceding information, at what amount should the land be reported in the consolidated balance sheet as of December 31, 20X8?A. $145,000B. $220,000C. $197,000D. $160,000
Answer:
$160,000
Explanation:
On February 15, 20X8, S3 Corporation purchased the land from a non affiliate for $160,000.
That was the last operation involving a third party.
The rest of the operation should not recognize any income or loss.
If not, a company can create artificial gains and losses by selling the asset at diferent prices.
It will sale higher on one company to avoid a net loss
and then sale cheaper on another to decrease the taxable income.
That's why it will be "lock" at 160,00 until an operation is made with a non-affiliate company
Bountiful Water Services had net income for the month of October of $ 40 comma 400. Assets as of the beginning and end of the month totaled $ 346 comma 000, and $ 462 comma 000, respectively. Calculate Bountiful Water Services' ROA for the month of October
Answer:
The ROA for the month of October was 10%
Explanation:
Return over Assets: It represent the yield of the company base on the resources it has during the period.
Return Over Assets = Net income / average Assets
were average assets = ( beginning + ending ) / 2
Net income $40,400
Beginning Assets $346,000
Ending Assets $462,000
Average Assets $404,000
ROA = 40,400/404,000 = 10%
Omega Instruments has budgeted $300,000 per year to pay for certain ceramic parts over the next 5 years. If the company expects the cost of the parts to increase uniformly according to an arithmetic gradient of $10,000 per year, what is it expecting the cost to be in year 1, if the interest rate is 10% per year?
Answer:
281,281.28
Explanation:
expected cost 300,000 + 10,000 = 310,000
with an inerest rate of 10%
discount value equals to 281,281.28
Omega Instruments is expecting the cost of the parts to be $341,000 in Year 1.
Data and Calculations:
Annual budgeted payment for ceramic parts =$300,000
Period of budget = 5 years
Expected increase in the cost of the parts = $10,000 per year
Price of the parts in Year 1 = $310,000 ($300,000 + $10,000)
Interest rate per year = 10%
Expected cost of the ceramic parts in Year 1 based on 10% interest rate = $341,000 ($310,000 x 1.1)
Thus, Omega Instruments expects the cost of the parts to rise to $341,000 in Year 1.
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Which of the following is true of cellphone communication? It is free from policies and legal restrictions. It is cost-effective when communicating with people located in several time zones. It ensures complete confidentiality and is not prone to misuse. It improves performance among salespersons by improving their outreach to clients.
Cellphone communication helps improve performance among salespersons by expanding their outreach to clients, making it an efficient tool for long-distance communication. It does not ensure complete confidentiality and is subject to policies and legal restrictions.
Explanation:Of the given statements related to cellphone communication, the one that holds true is: it improves performance among salespersons by improving their outreach to clients. Cellphones, thanks to advancements in technology like microwave transmission and communications satellites, have revolutionized our communication methods. They provide cheap, and often better-quality services, thus accommodating more consumer choice.
With regards to long-distance communication, they have proven to be cost-effective. Cellphones are being increasingly used for economic activities, enabling long-distance connections of production and sales, with many services including travel planning, financial advice, and music being available at lower costs. However, it's important to note that cell phone communication does not ensure complete confidentiality and it is certainly not free from policies and legal restrictions.
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Before the year began, Johnson Manufacturing estimated that manufacturing overhead for the year would be $160,000 and that 12,000 direct labor hours would be worked. Actual results for the year included the following: Actual manufacturing overhead cost $175,000 Actual direct labor hours 15,000. If the company allocates manufacturing overhead based on direct labor hours, the manufacturing overhead for the year would have been: A. $15,000 overallocated. B. $15,000 underallocated. C. $25,000 overallocated. D. $25,000 underallocated.
Answer:
C. $25,000 overallocated.
Explanation:
[tex]\frac{Cost\: Of \:Manufacturing \:Overhead}{Cost \:Driver}= Overhead \:Rate[/tex]
160,000 / 12,000 = 13.33333333 = 13 + 1/3 (to avoid rounding issues)
Applied Overhead
[tex]rate \times actual \: labor \: hours = applied \: overhead[/tex]
(13 + 1/3) * 15,000 = 200,000
Actual Overhead (175,000)
Overapplied for 25,000
Remember that the overhead is done by distributing the estimated overhead cost over a cost driver, which usually is direct labor or machine hours
Final answer:
Johnson Manufacturing overallocated manufacturing overhead by approximately $25,000. This was determined by calculating the predetermined overhead rate, applying it to the actual labor hours, and then comparing to the actual overhead incurred. The correct answer is option (C).
Explanation:
Johnson Manufacturing initially estimated that the manufacturing overhead would be $160,000 for 12,000 direct labor hours, which gives us a predetermined overhead rate (POHR). To calculate the POHR, we divide the estimated manufacturing overhead by the estimated direct labor hours: $160,000 / 12,000 hours = $13.33 per labor hour. This rate is then applied to the actual labor hours to allocate manufacturing overhead.
Using the actual labor hours of 15,000, we multiply by the POHR: 15,000 hours x $13.33 per hour = $199,950. This is the amount of overhead that should have been applied based on actual hours worked. However, the actual manufacturing overhead incurred was $175,000.
Now, we compare the applied overhead ($199,950) to the actual overhead ($175,000). Since the applied overhead is greater than the actual overhead, manufacturing overhead was overallocated by the difference: $199,950 - $175,000 = $24,950. The closest answer is C. $25,000 overallocated.
Yi Company began operations on January 1, 2013. During 2013, the company engaged in the following cash transactions:
1) issued stock for $48,000
2) borrowed $29,000 from its bank
3) provided consulting services for $46,000
4) paid back $19,000 of the bank loan
5) paid rent expense for $11,000
6) purchased equipment costing $16,000
7) paid $3,400 dividends to stockholders
8) paid employees' salaries, $25,000
What is Yi's cash flow from financing activities?
Answer:
Financing
from stock issuance 48,000
loan from bank 29,000
payment of loan (11,000)
dividends paid (3,400)
Cash flow generated from financing activities 62,600
Explanation:
Financing activities:
Thse associate with the issaunce of stock, the dividen of those stock, and debt operation, such as issued bonds or loan and their payment.
Which of the following is a condition in which observation is an appropriate method for data collection? A. Anonymity is desiredB. Respondents are widely dispersedC. Attitudinal information is neededD. Natural setting is imperativeE. Extensive amount of information is needed
The correct option here is D) natural settings are imperative.
Observation method of collecting data(primary) is one of the most popular method used , where data is collected by an observer, who personally observes the person from whom data is being collected or collecting knowledge through observation of the phenomena. This method comes to be very handy when the natural settings are very crucial or plays an important role, as an observer might have to use different observation practices for different research approaches.
The people of a previously quiet and peaceful country have come to recognize the need to expand and improve their security forces after a wave of terroristic threats and acts. Considering their resource limitations, the extent to which security is enhanced will most likely be determined by _________.
Answer:
The extent to which security is enhanced depends on the amount of goods and services people are willing to forego.
Explanation:
We know that resources in an economy is limited and unlimited wants are satisfied used these limited resources. People will obviously prefer security due to increase terrorist threats. Enhancement in security though will be determined by the amount of other goods and services that people are willing to forego. The amount that people forego will be invested on enhancing security.
Shannon Company segments its income statement into its North and South Divisions. The company’s overall sales, contribution margin ratio, and net operating income are $1,050,000, 40%, and $21,000, respectively. The North Division’s contribution margin and contribution margin ratio are $154,000 and 44%, respectively. The South Division’s segment margin is $175,000. The company has $262,500 of common fixed expenses that cannot be traced to either division.Required:Prepare an income statement for Shannon Company that uses the contribution format and is segmented by divisions. In addition, for the company as a whole and for each segment, show each item on the segmented income statements as a percent of sales
Answer:
North Division:
Sales 154,000 12.8%
Variables Cost 101,640 8.44%
Contribution Margin 52,360 4.39%
South Division:
Sales 1,050,000 87.20%
Variables Cost 630,000 52.33%
Contribution Margin 420,000 34.84%
Total Contribution 472,360 39.23%
Fixed Cost 262,500 21.18%
Net Income 209,860 17.43%
Explanation:
First we do the income statements
then we add both sales figures together:
154,000 + 1,050,000 = 1,204,000
And add the percentajeof sales for each line
n Crawford Company, the predetermined overhead rate is 80% of direct labor cost. During the month, $210,000 of factory labor costs are incurred, of which $180,000 is direct labor and $30,000 is indirect labor. Actual overhead incurred was $200,000. The amount of overhead debited to Work in Process Inventory should be:
Answer:
WIP 144,000 debit
Factory Overhead 144,000 credit
Explanation:
210,000 labor cost
30,000 indirect labor
180,000 direct labor
The rate is based on direct labor cost, so we use this figure.
180,000 x 80% = 144,000
Remember, the rate is calculate using a given cost driver. So it only this cost driver matters.
Final answer:
The amount of overhead debited to Work in Process Inventory for Crawford Company would be $144,000, based on the predetermined overhead rate of 80% of the $180,000 direct labor cost.
Explanation:
In the Crawford Company scenario, the predetermined overhead rate is calculated as 80% of the direct labor cost. Given that the direct labor cost for the month is $180,000, we would apply the overhead rate to this figure to determine how much overhead should be debited to Work in Process Inventory.
Calculating the overhead debited, we take 80% of $180,000, which is:
0.80 × $180,000 = $144,000Therefore, the amount of overhead debited to Work in Process Inventory would be $144,000.
It is important to note that this figure is based on the predetermined overhead rate and not on the actual overhead costs incurred by the company during the month.
A company purchased land for $70,000 cash. Real estate brokers' commission was $5,000 and $7,000 was spent for demolishing an old building on the land before construction of a new building could start. Under the historical cost principle, the cost of land would be recorded at
Answer:
UNDER THE HISTORICAL COST OF PRINCIPLE THE COST OF LAND WOULD BE $82,000
Explanation:
Historical cost principle is one of many principle that is used in the accounting , where it states that the value of the asset which will be recorded in the asset side of the balance sheet will be based on the original amount of price which was incurred to acquire the asset at the time of purchase. In this we will include the broker's commission and amount spent for demolishing old building
COST OF LAND = purchase price + broker commission + cost on demolishing
= $70,000 + $5000 + $7000
= $82,000