Answer:
Accounts payable - Current Liabilities
Accounts receivable- Current Assets
Accumulated depreciation—equipment - Property,Plant & Equipment
Buildings - Property,Plant & Equipment
Cash - Current Assets
Interest payable - Current liabilities
Goodwill - Intangible assets
Income taxes payable - Current liabilities
Inventory - Current Assets
Stock investments (to be sold in 7 months) - Current Assets
Land (in use) - Property,Plant & Equipment
Mortgage payable - long term liabilities
Supplies - Current Assets
Equipment - Property,Plant & Equipment
Prepaid rent - Current Assets
Financial statement items on Ming Corporation's balance sheet can be classified into specific categories such as Stockholders' Equity, Current Assets, Intangible Assets, Long-term Liabilities, Current Liabilities, and Property, Plant, and Equipment.
Stockholders' Equity: Long-term Investments
Current Assets: Accounts Receivable, Cash, Inventory, Supplies, Prepaid Rent
Intangible Assets: Goodwill
Long-term Liabilities: Interest Payable, Mortgage Payable
Current Liabilities: Accounts Payable, Income Taxes Payable
Property, Plant, and Equipment: Accumulated Depreciation—Equipment, Buildings, Land (in use), Equipment
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Houser Corporation owns 4,000,000 shares of stock in Baha Corporation. On December 31, 2012, Houser distributed these shares of stock as a dividend to its stockholders. This is an example of a
a. property dividend.
b. stock dividend.
c. liquidating dividend. d. cash dividend.
Answer:
The correct option is (a)
Explanation:
Property dividend is distributing assets as dividends to its stockholders. This distribution is not in the form of cash. It could be any asset including any stock that the organization holds with some other company.
In this case, Houser corporation distributes shares of Baha corporation to its shareholders as dividends. This is an example of property dividend.
As you know, Barbie has broken up with her long term squeeze, Ken. She's decided she wants to get involved in some projects to keep her mind off heart-broken Ken. So Barbie decided to create a clothing line, snack foods, hair products, and new aerobics equipment. All of these products will be manufactured in Barbie's very own pink factory and will be sold with the Barbie brand on them. This type of branding is best described as:
Answer:
This type of branding is best described as Brand extension
Explanation:
Barbie create products of different categories and the existing brand name is extended to a new product category. Brand extension strategy assumes an existing brand name, but combines it with a new product category. Benefits of this strategy are instant recognition and faster acceptance and saving substantial advertising costs. The risk is that may confuse the image of the main brand.
Final answer:
Barbie is using a corporate branding strategy to leverage her brand's reputation across a variety of new products. This approach helps to ensure consistency and recognition among consumers, building brand trust and loyalty, much like the branding strategies used by other successful companies.
Explanation:
The branding strategy that Barbie is adopting for her new ventures can be described as a corporate branding strategy. This approach involves using the Barbie brand, which already has a strong presence and recognition, across a variety of products such as clothing, snack foods, hair products, and aerobics equipment. By doing so, Barbie is leveraging her brand's reputation to create synergies among her product offerings and ensuring that consumers receive a consistent message across multiple platforms and sources.
This strategy is akin to other corporate branding strategies where a central theme or image, such as Abercrombie & Fitch's "casual luxury" or the physical aspects of a product touted in advertisements (unbreakable bottle, nonstick surface, etc.), is used to unify a range of products. The use of a strong, recognizable brand name helps in building trust and loyalty among consumers while also facilitating the entry of new products into the market.
Furthermore, as Naomi Klein pointed out in her text No Logo, such branding practices are deeply woven into the fabric of modern economies, shaping consumer behaviors and corporate dynamics alike. Companies aim to protect and capitalize on their brands, which often become their most valuable assets.
The Betterbilt Construction Company designs and builds residential mobile homes. The company is ready to construct, in sequence, 16 new homes of 2,400 square feet each. The successful bid for the construction materials in the first home is $64,800, or $27 per square foot. The purchasing manager believes that several actions can be taken to reduce material costs by 8% each time the number of homes constructed doubles. Based on this information, a. What is the estimated cumulative average material cost per square foot for the first five homes? b. What is the estimated material cost per square foot for the last (16th) home?
Answer:
(a) The estimated cumulative average material cost per square foot for the first five homes is $24.47.
(b) The estimated material cost per square foot for the last (16th) home is $19.34.
Explanation:
(a) If the cost its reduced by 8% every time the number of homes is doubled, we can express the cost of the first five houses as
C1 = C
C2 = C*(1-0.08)=0.92*C
C3 = C2 = 0.92*C
C4 = C2*(1-0.08)=0.92*0.92*C = 0.8464*C
C5 = C4 = 0.8464*C
Then, the average cost of the first five houses is
[tex]\bar{C}=(1/5)*(C1+C2+C3+C4+C5)\\\\\bar{C}=(1/5)*(C+0.92C+0.92C+0.8464C+0.8464C)\\\\\bar{C}=(1/5)*4.5328*C = 0.90656*C=0.90656*27=24.47[/tex]
The estimated cumulative average material cost per square foot for the first five homes is $24.47.
For the 16th home, the number we can estimate that the number of homes double 4 times: at house number 2,4, 8 and 16.
Other way to calculate that is [tex]n=log_2(16)=4[/tex]
We can write the cost of the 16th house as
[tex]C_{16}=0.92*C_8=0.92^{2} *C_4=0.92^{3} *C_2=0.92^{4} *C\\\\C_{16}=0.92^{4} *C=0.716*C=0.716*27=19.34[/tex]
The estimated material cost per square foot for the last (16th) home is $19.34.
The estimated cumulative average material cost per square foot for the first five homes is $22.61. The estimated material cost per square foot for the 16th home is $16.42.
Explanation:To find the estimated cumulative average material cost per square foot for the first five homes, we need to apply the 8% reduction in material costs each time the number of homes doubles. Let's calculate:
The material cost for the first home is $27 per square foot, so the estimated material cost for the second home would be $27 - 8% of $27 ($2.16) = $24.84 per square foot.The estimated material cost for the third home would be $24.84 - 8% of $24.84 ($1.99) = $22.85 per square foot.The estimated material cost for the fourth home would be $22.85 - 8% of $22.85 ($1.83) = $21.03 per square foot.The estimated material cost for the fifth home would be $21.03 - 8% of $21.03 ($1.68) = $19.35 per square foot.Therefore, the estimated cumulative average material cost per square foot for the first five homes is $(27+24.84+22.85+21.03+19.35)/5 = $22.61 per square foot.
To find the estimated material cost per square foot for the last (16th) home, we need to apply the 8% reduction eight times since the number of homes doubles four times.
The estimated material cost for the 16th home would be $27 - (8% of $27) * 8 = $16.42 per square foot.
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Why is the shape of the production possibilities frontier (PPF) often curved instead of straight? Because the production possibilities frontier is based on the productive capabilites, and of a nation overall, rather than the productive capacity of an individual. Typically, some resources are better suited for producing one good than another, which means that there are diminishing returns when moving such resources away from producing what they are best suited for. The productive efficiency of an economy decreases as it moves from left to right along the PPF. To take a potential sunk cost into account, the PPF is curved to distribute the burden of the sunk cost based on allocative effieciency.
Answer:
The correct answer is the second statement.
Explanation:
A production possibility frontier shows the maximum possible combinations of two goods that can be produced using the given resources. This frontier is concave to the origin. The curve shape of this frontier is because of increasing marginal opportunity cost.
We have limited resources that serve alternative uses. To increase the production of one commodity we need to decrease the production of the other. but the resources are not perfectly substitutable between these two goods. So when we increase the production of one good the marginal opportunity cost of the giving up the alternative goes on increasing.
An elderly physician has built up his own practice into a quite valuable business. Now that he is thinking of retiring, he wants to take on a partner to learn the business and eventually buy the practice in three years. Her compensation will be a salary plus 25% of the profits if they are below the historical average and 50% for any increase above the historical average. The eventual purchase price for the practice will be 5 times the average profits over the three years. Discuss the efficiency aspects of such a contract. Are the incentives of the buyer and seller aligned?
Answer:
No
Explanation:
Tehe Overlapping tenure for the retiring and new physicians tends to increase the transfer of practice specific knowledge. The profit sharing with the new physician increases her incentives to maximize profits but since the sale price is a multiple of the profits during this 3 year, the new physician has an incentive to shirk to keep the profits low. it would be better to use a multiple of profits from the period before she began this probation.
Final answer:
The contract aligns the incentives of both the retiring physician and the incoming partner by using a tiered profit-sharing scheme and a purchase price based on average profits. This promotes efficiency and growth of the practice but could also lead to potential drawbacks like short-term focus and compromise in care quality.
Explanation:
The contract under consideration provides a form of profit-sharing compensation, where the new partner will earn a salary plus a percentage of profits. If profits are below the historical average, the partner receives 25% of the profits, and for any increase above the historical average, the partner's share jumps to 50%. The eventual purchase price of the practice is set at five times the average profits over a three-year span, incentivizing both parties to maximize profits during this period. From an efficiency standpoint, this contract aligns the incentives of the buyer and seller. The tiered profit-sharing agreement encourages the new partner to increase profits beyond the historical average, therefore boosting their personal earnings and raising the practice's sale price. The retiring physician, in turn, is incentivized to ensure a smooth transition and operational success, as this will maximize the practice's value at the time of the sale. This alignment of incentives can create an environment for growth and could potentially increase the quality and reputation of the practice. However, there are potential drawbacks. If not carefully managed, the focus on increasing profits may lead to short-term decision-making that sacrifices long-term sustainability or ethical considerations. Additionally, the pressure to increase profits might lead to cost-cutting measures that could compromise patient care or employee satisfaction.
Lakeside Manufacturing provided the following information for the month ended March 31:Sales Revenue$26,000Beginning Finished Goods Inventory8,000Ending Finished Goods Inventory13,500Cost of Goods Manufactured15,600Compute cost of goods available for sale.
Answer:
cost of goods available for sale= $29,100
Explanation:
Giving the following information:
Sales Revenue$26,000
Beginning Finished Goods Inventory8,000
Ending Finished Goods Inventory13,500
Cost of Goods Manufactured15,600
cost of goods available for sale= beginning finished goods inventory + purchases
We have to find the amount of purchases.
We know that:
cost of goods manufactured= Beginning Finished Goods Inventory + purchases - Ending Finished Goods Inventory
15600= 8000 + purchases - 13500
purchases= 15600 - 8000 + 13500
purcases= 21,100
cost of goods available for sale= 8000 + 21100= $29,100
Present value (with changing interest rates). Marty has been offered an injury settlement of $12 comma 000 payable in 3 years. He wants to know what the present value of the injury settlement is if his opportunity cost is 5%. (The opportunity cost is the interest rate in this problem.) What if the opportunity cost is 6.5%? What if it is 11.5%?
Answer:
If opportunity cost is 5%, PV=10,366.05
If opportunity cost is 6.5%, PV=9,934.19
If opportunity cost is 11.5%, PV=8,656.79
Explanation:
PV=Σ[tex](\frac{CF_{t} }{(1+i)^{t} })[/tex]
If opportunity cost is 5%: PV = [tex]\frac{12,000 }{(1+0.05)^{3} }[/tex] =10,366.05
If opportunity cost is 6.5%: PV = [tex]\frac{12,000 }{(1+0.065)^{3} }[/tex] =9,934.19
If opportunity cost is 11.5%: PV = [tex]\frac{12,000 }{(1+0.115)^{3} }[/tex] =8,656.79
The contribution margin ratio of Candle Corporation's only product is 65%. The company's monthly fixed expense is $455,300 and the company's monthly target profit is $41,300. Required: Determine the dollar sales to attain the company's target profit. (Round your answer to the nearest whole dollar amount.)
Answer:
Break-even point in dollars= $764,000
Explanation:
Giving the following information:
The contribution margin ratio of Candle Corporation's only product is 65%.
The company's monthly fixed expense is $455,300.
The target profit is $41,300.
Break-even point in dollars= (fixed costs + profit)/contribution margin ratio
Break-even point in dollars= (455300+41300)/0.65
Break-even point in dollars= $764,000
Assuming Net Income for the year is $250,000, what is the cash flows from operating activity given in the following information:
Increase in Salaries Payable $17,500
Depreciation Expense $7,500
Increase in Prepaid Rent $26,500
Loss on sale of asset $1,150
Increase in Accounts Payable $29,000
Increase in Inventory $76,000
Answer: $202,650
Explanation:
Given that,
Net Income for the year = $250,000
Increase in Salaries Payable = $17,500
Depreciation Expense = $7,500
Increase in Prepaid Rent = $26,500
Loss on sale of asset = $1,150
Increase in Accounts Payable = $29,000
Increase in Inventory = $76,000
Cash flows from operating activity:
= Net Income + Salaries Payable + Depreciation Expense - Prepaid Rent + Loss on sale of asset + Accounts Payable - Inventory
= $250,000 + $17,500 + $7,500 - $26,500 + $1,150 + $29,000 - $76,000
= $202,650
Vista Camera Services started the year with total assets of $ 100 comma 000 and total liabilities of $ 55 comma 000. The revenues and the expenses for the year amounted to $ 120 comma 000 and $ 80 comma 000, respectively. During the year, the company did not issue any common stock, but it distributed dividends of $ 50 comma 000. What is the amount of stockholders' equity at the end of the year?
Answer:
The amount of stockholders' equity at the end of the year is $35,000
Explanation:
For computing the ending balance of the stockholder equity, first we have to compute the beginning balance of equity which is shown below:
Total assets = Total liabilities + stockholder equity
$100,000 = $55,000 + stockholder equity
So, stockholder equity = $100,000 - $55,000
= $45,000
Now the ending balance of stockholder equity would equal to
= Opening balance of stockholder equity + revenues - expenses - dividend paid
= $45,000 + $120,000 - $80,000 - $50,000
= $35,000
At the beginning of the year, Cullumber Company had total assets of $864,000 and total liabilities of $523,000. (Treat each item independently.) (a) If total assets increased $156,000 during the year and total liabilities decreased $86,000, what is the amount of stockholders’ equity at the end of the year? Stockholders’ equity $enter a dollar amount (b) During the year, total liabilities increased $91,000 and stockholders’ equity decreased $77,000. What is the amount of total assets at the end of the year? Total assets $enter a dollar amount (c) If total assets decreased $90,000 and stockholders’ equity increased $103,000 during the year, what is the amount of total liabilities at the end of the year? Total liabilities $enter a dollar amount
Answer:
a. $583,000
b. $878,000
c. $330,000
Explanation:
In this question, we have to use the accounting equation which is presented below:
Total assets = Total liabilities + stockholder's equity
$864,000 = $523,000 + stockholder's equity
So, the stockholder's equity = $864,000 - $523,000 = $341,000
a. New assets = Old assets + addition
= $864,000 + $156,000
= $1,020,000
New liabilities = Old liabilities - reduction
= $523,000 - $86,000
= $437,000
So, the stockholder's equity = $1,020,000 - $437,000 = $583,000
b. New liabilities = Old liabilities + addition
= $523,000 + $91,000
= $614,000
New equity = Old equity - reduction
= $341,000 - $77,000
= $264,000
So, the total assets = New liabilities + New equity
= $614,000 + $264,000
= $878,000
c. New assets = Old assets - reduction
= $864,000 - $90,000
= $774,000
New equity = Old equity + addition
= $341,000 + $103,000
= $444,000
So, the total liabilities = $774,000 - $444,000 = $330,000
Using the accounting equation (Assets = Liabilities + Stockholders' Equity) we find that at the end of the year the stockholders’ equity is $583,000 (a), total assets amount to $878,000 (b) and total liabilities sum up to be $330,000 (c).
Explanation:The subject of this question is business, specifically the calculation of asset, liability, and stockholder's equity values. Stockholder's equity represents the value of a business after all debts have been settled. It's calculated using the equation: Assets = Liabilities + Stockholder's equity.
For section (a), the initial stockholders' equity is $864,000 (assets) - $523,000 (liabilities) = $341,000. If assets increased by $156,000 to $1,020,000, and liabilities decreased by $86,000 to $437,000, then at the end of the year, stockholders' equity will be $1,020,000 - $437,000 = $583,000.
For section (b), if liabilities increased by $91,000 to $614,000, and the stockholders equity decreased by $77,000 to $264,000, then the total assets at the end of the year would be $614,000 (liabilities) + $264,000 (Stockholders’ equity) = $878,000.
In section (c), if the assets decreased $90,000 to $774,000, and the stockholders' equity increased by $103,000 to $444,000, then the total liabilities will be total assets - stockholders' equity = $774,000 - $444,000 = $330,000.
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Which one of the following statements is not characteristic of mutual funds?
A. They are always considered to be financial institutions.
B. They raise money by selling shares to investors.
C. They pool the savings of many investors.
D. They offer professional management and portfolio diversification.
Answer: Option A
Explanation: Mutual funds are introduced by the financial institutions in the market and are not financial institutions themselves.
These funds collect money from various different investors and pool them together to invest in securities of different companies. These funds are managed by the investment professionals who receive both fixed and variable fees depending on the performance of portfolio.
The portfolio is divided into shares and such shares are then sold into the stock market.
Hence from the above we can conclude that option A.
Which of these is an example of third-degree price discrimination?
(A) charging different prices to consumers at a flea market
(B) charging different prices at a used car dealership
(C) charging block rates on utilities
(D) charging airline business passengers and regular travelers different prices
Answer:
(D) charging airline business passengers and regular travelers different prices
Explanation:
Third degree price discrimination – the price varies according to consumer attributes such as age, sex, location, and economic status. Price discrimination is present throughout commerce. Examples include airline and travel costs, coupons, premium pricing, gender based pricing, and retail incentives.
A reserve price is a minimum price set by the auctioneer. If no bidder is willing to pay the reserve price, the item is unsold at a profit of $0 for the auctioneer. If only one bidder values the item at or above the reserve price. An auctioneer faces two bidders, each with a value of either $30 or $80, with both values equally probable. What reserve price should the auctioneer set, and what is the expected revenue from auctioning the item with and without a reserve price?
The auctioneer should set the reserve price at $30. The expected revenue from auctioning the item without a reserve price is $55.
Explanation:To determine the reserve price, we need to consider the values of the two bidders and their probabilities. In this case, both bidders have equal probabilities of valuing the item at $30 or $80. The auctioneer should set the reserve price at $30, the minimum value that one bidder may have. This way, if one bidder values the item at $30 or higher, the auctioneer can sell it, earning a profit of $30. If neither bidder values the item at $30 or higher, the item remains unsold, resulting in a profit of $0 for the auctioneer.
The expected revenue from auctioning the item without a reserve price can be calculated by multiplying the probability of each bidder value by the price the auctioneer receives for that bidder's value.
If one bidder values the item at $30, the probability is 1/2 and the auctioneer receives $30, resulting in an expected revenue of $30 * 1/2 = $15.If one bidder values the item at $80, the probability is 1/2 and the auctioneer receives $80, resulting in an expected revenue of $80 * 1/2 = $40.Therefore, the total expected revenue from auctioning the item without a reserve price is $15 + $40 = $55.
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The statement of retained earnings or the statement of stockholders’ equity reconciles the net income, dividends paid, and the change in retained earnings during a particular year. Which of the following best describes shareholders equity? Equity is the initial claim on value of the assets before the firm pays off its liabilities. Equity is the difference between the company’s assets and liabilities.
Answer: "Equity is the difference between the company’s assets and liabilities" Describes shareholders equity.
Explanation: This statement is reflected in the basic equity equation:
Assets = Liabilities + Equity.
If we clear the net worth it would be:
Assets - Liabilities = Equity.
Shareholders' equity, often called stockholders' equity, represents the residual interest in a company's assets after liabilities are deducted. It's calculated as total assets minus total liabilities. It's influenced by net income earned and dividends paid out.
Explanation:Shareholders' equity, also known as stockholders' equity, represents the equity interest of the company's shareholders. It is essentially a company's residual interest in the assets of the entity after deducting liabilities. In simpler terms, equity is what's left after you subtract a company's total liabilities from its total assets, which could be distributed to the shareholders if the company was liquidated.
For instance, if a company has $100 million in assets and $75 million in liabilities, the Shareholders' equity is $25 million. This represents the net value of the company or the amount of money that would be returned to shareholders if all the company's assets were sold and all its debts paid off. Net income and dividends paid are significant components of shareholders' equity because the company can either use its profit to pay dividends to shareholders or retain it for future growth, both of which impacts shareholders' equity.
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Why is real GDP a more accurate measure of an economy's production than nominal GDP? Real GDP does not include the value of intermediate goods and services, but nominal GDP does. Real GDP is not influenced by price changes, but nominal GDP is. Nominal GDP is adjusted for the effects of inflation or deflation, whereas real GDP is not.
Answer: Option (b) is correct.
Explanation:
Real GDP is totally based on the base year price level. This means that base year price level remains the same over all the periods. Therefore, Real GDP is generally not affected by the changes occur in the price level. Hence, it only includes the changes in output.
Nominal GDP takes into account the effect of changes in the price level. Therefore, it is affected by the changes in the price level and it is also measured in current U.S dollars. Hence, it doesn't show the true value of the goods and services produced in a given year.
Final answer:
Real GDP is a more accurate representation of an economy's production than nominal GDP because it adjusts for inflation or deflation, providing a true picture of economic growth and changes in production levels over time.
Explanation:
Real GDP is a more accurate measure of an economy's production than nominal GDP because it takes into account the effects of inflation or deflation. Nominal GDP measures the value of all final goods and services produced within a country using current prices without adjustment. This means that an increase in nominal GDP could just indicate rising prices rather than an actual increase in production. Real GDP, on the other hand, is adjusted using a price index, such as the GDP deflator, to reflect the actual volume of goods and services produced, effectively stripping out any price changes.
For example, if a country's only produces apples and the price of an apple increases from one year to the next, the nominal GDP would show an increase even if the same number of apples were produced both years. However, real GDP would remain the same since it would adjust for this price increase, thus accurately representing the static production levels. Therefore, real GDP provides a clearer picture of a nation's economic growth and true changes in production level over time irrespective of price fluctuations. This is crucial for making meaningful comparisons of economic output over different time periods.
You deposited $1,000 in a savings account that pays 8 percent interest, compounded quarterly, planning to use it to finish your last year in college. Eighteen months later, you decide to go to the Rocky Mountains to become a ski instructor rather than continue in school, so you close out your account. How much money will you receive?
Answer: $1,126.16
Explanation:
Given that,
Amount deposited in savings account = $1,000
Interest rate = 8%, compounded quarterly
Since the interest is compounded quarterly, therefore
[tex]Number\ of\ periods = \frac{18}{3}[/tex]
n= 6
[tex]Effective\ rate\ of\ interest=\frac{Interest\ Rate}{4}[/tex]
[tex]Effective\ rate\ of\ interest=\frac{0.08}{4}[/tex]
= 0.02
e = 2%
Hence,
[tex]Amount\ to\ be\ received = Deposited\ Amount\times(1+e)^{n}[/tex]
[tex]Amount\ to\ be\ received = 1,000\times(1+0.02)^{6}[/tex]
= 1,000 × 1.1261
= $1,126.16
The sum of money that will be received after 18 months is $1,126.16. The sum is received after compounding the principal for 18 months at a rate 8%.
What is compounding?Compounding refers to the process in which the interest is credited on the principal amount as well as on the interest up-to the date of interest calculation.
The formula to calculate the amount after compounding is:
[tex]\rm A = P(1+\dfrac{r}{n})^{nt}[/tex]
where A is the final amount, P is the principal, r is the rate of interest, n is the number of times principal is compounded in a year, and t is the tenure (in years).
Given:
Principal is $1,000
Rate is 8%
Compounding is quarterly therefore n will be 4.
And the value of t is the tenure, that is 18 months or 1.5 years.
Therefore the amount will be:
[tex]\rm A = 1000(1+\dfrac{0.08}{4})^{4\times1.5}\\\\\rm A = 1000(1.02)^{6}\\\\\rm A = 1000(1.126)\\\\\rm A = \$1,126.16[/tex]
Therefore the amount we will receive is $1,126.16
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On March 3, Splish Brothers Inc. sells $666,900 of its receivables to National Factors Inc. National Factors Inc. assesses a service charge of its receivables to Western Factors Inc. Western Factors Inc. assesses a service charge of 5% of the amount of receivables sold. Prepare the entry on Sheridan Company books to record the sale of the receivables.
Answer:
cash 633,555 debit
loss on factoring 33,345 debit
accounts receivable 666,900 credit
--to record sales of receivables--
Explanation:
666,900 x 5% fee = 33,345 factoring expense
666,900 - 33,345 = 633,555 cash proceeds
we will write-off the erceivable sold.
We will increase our cash and recognize the loss on the factoring
When Splish Brothers Inc sold its receivables to National Factors Inc., a fee of $33,345 was charged. They received a net amount of $633,555. The process involves debiting cash and service charge expenses while crediting accounts receivable.
Explanation:Splish Brothers Inc. sold its receivables worth $666,900 to National Factors Inc. The service charge assessed by National Factors Inc. on the receivables sold is 5%. So, the charges incurred would be 5% of $666,900 i.e. $33,345. Therefore, the book keeping entry for this transaction would show:
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Which of the following statements is true of a distribution channel?
a. It is almost synonymous with demand chains.
b. It traditionally encompasses outbound logistics.
c. It handles the entire process of value creation.
d. It inhibits any contribution to the world's GDP.
Answer:
The answer is: A) It is almost synonymous with demand chains.
Explanation:
A company´s distribution channel is the chain of businesses through which a good passes until it reaches its final customer.
An extremely simple example would be: Factory - Wholesale distributor - Local retail store - Customer
A demand chain is just the distribution channel but seen through the eye of the customer. It answers the following question: The good that I just bought passed through which businesses in order for me to get it?
The demand chain for the previous example would be: Customer - Local retail store - Wholesale distributor - Factory
On September 1, 2012, Valdez Company reacquired 16,000 shares of its $10 par value common stock for $15 per share. Valdez uses the cost method to account for treasury stock. The journal entry to record the reacquisition of the stock should debit
a. Treasury Stock for $160,000.
b. Common Stock for $160,000.
c. Common Stock for $160,000 and Paid-in Capital in Excess of Par for $60,000.
d. Treasury Stock for $240,000
Answer:
d. Treasury Stock for $240,000
Explanation:
The journal entry for re-acquisition of the stock under the cost method is shown below:
Treasury stock A/c Dr $240,000
To Cash A/c $240,000
(Being the stock are reacquired for cash)
The $240,000 amount should be come from
= Number of shares × common stock per share
= 16,000 shares × $15
= $240,000
Since the stock is reacquired so we used the treasury stock account instead of the common stock account
In the LMN partnership, Lynn's capital is $60,000, Marty's is $80,000, and Nancy's is $70,000. They share income in a 4:3:3 ratio, respectively. Nancy is retiring from the partnership. Each of the following questions is independent of the others.
41. Refer to the information above. Nancy is paid $84,000, and no goodwill is recorded. In the journal entry to record Nancy's withdrawal
A. Lynn, Capital will be debited for $7,000
B. Marty, Capital will be debited for $6,000
C. Nancy, Capital will be credited for $70,000
D. Cash will be debited for $84,000
Answer:
B. Marty, Capital will be debited for $6,000
Explanation:
The journal entry must record the following operations:
Lynn, Capital will be debited for $8,000
Marty, Capital will be debited for $6,000
Nancy, capital will be debited $70,000
Cash will be credited for $84,000
Income sharing is met, where Lynn and Marty have a 4:3 ratio, that equates to reduced $8,000 of Lynn's capital, and reduced $6,000 of Marty's capital.
Option B es the correct.
Hope this helps!
Calculation of EPS and retained earnings Everdeen Mining, Inc., ended 2019 with net profits before taxes of $ 436 comma 000. The company is subject to a 21 % tax rate and must pay $ 64 comma 000 in preferred stock dividends before distributing any earnings on the 170 comma 000 shares of common stock currently outstanding. a. Calculate Everdeen's 2019 earnings per share (EPS). b. If the firm paid common stock dividends of $ 0.80 per share, how many dollars would go to retained earnings?
Final answer:
Everdeen's 2019 earnings per share (EPS) is $1.65. The total amount contributed to retained earnings after paying a dividend of $0.80 per share on 170,000 shares is $144,440.
Explanation:
Calculation of Earnings Per Share (EPS) and Retained Earnings
To calculate Everdeen's 2019 earnings per share (EPS), we must first determine the net income after taxes and preferred stock dividends:
Net profits before taxes: $436,000
Minus tax (21%): $436,000 * 0.21 = $91,560
Net profits after taxes: $436,000 - $91,560 = $344,440
Minus preferred stock dividends: $344,440 - $64,000 = $280,440
Next, divide the remaining profit by the number of common stock shares:
EPS = $280,440 / 170,000 shares = $1.65 per share
For part b, calculating the total dividends paid to common shareholders:
Total common stock dividends = $0.80 per share * 170,000 shares = $136,000
Finally, to calculate the amount that goes to retained earnings:
Retained earnings = Net income - Total common stock dividends
Retained earnings = $280,440 - $136,000 = $144,440
Floor Coverings reported the following summarized data at December 31, 2018. Accounts appear in no particular order, and all have normal balances. Prepare the trial balance of Smith Floor Coverings at December 31, 2018.
Service revenue %38,000
Equipment 45,000
Rent expenses 10,000
Common stock 25,000
Account payable 1,500
Dividens 12,900
Salaries payable 15,000
Salaries expenses 1,800
Cash 12,000
Accont receivable 4,000
Interest payable 7,500
Utility expanse 1,300
Answer:
Cash 12,000 debit
Accont receivable 4,000 debit
Equipment 45,000 debit
Account payable 1,500 credit
Salaries payable 15,000 credit
Interest payable 7,500 credit
Common stock 25,000 credit
Dividens 12,900 debit
Service revenue 38,000 credit
Salaries expenses 1,800 debit
Utility expanse 1,300 debit
Rent expenses 10,000 debit
Total 87,000 87,000 credit
Explanation:
Assets and expenses account will have a debit balance
Dividends will also have a debit balance
Then liabilities (payable) accounts, equity accounts (common stock) and revenues account have a credit balance
With this in mind we arrenge the accounts and create the trial balance.
Last, we add each column. This is to make sure it is correct, debit = credit
Final answer:
To prepare the trial balance of Smith Floor Coverings, each account with a normal balance is listed alongside the respective debit or credit columns. The trial balance shows that total debits equal total credits, which confirms that the ledger accounts are balanced.
Explanation:
To prepare the trial balance of Smith Floor Coverings at December 31, 2018, we need to list each account and its balance in the correct debit or credit column. A trial balance aims to verify that the total debits equal the total credits in the ledger accounts. The summarized data will be listed as follows:
AccountDebitCreditCash12,000Accounts Receivable4,000Equipment45,000Service Revenue38,000Rent Expenses10,000Salaries Expenses1,800Utility Expense1,300Account Payable1,500Interest Payable7,500Salaries Payable15,000Common Stock25,000Dividends12,900
Total
87,000
87,000
The trial balance totals for debits and credits should both be $87,000, showing that the ledger is balanced.
Next, imagine that you are a manager of a start-up company with limited cash and resources. In your initial post, describe the types of motivators that you might employ as you develop your culture and attract good talent to your company. Explain why you have selected these motivators.
Answer: I want employees who are like-minded with the values and best practices in my company .
Explanation: Having a candidate attraction strategy that speaks to your company culture will increase the likeliness of attracting and engaging talent who will thrive and stay with you longer.Hiring talent that doesn’t align with your company culture creates personal conflict within the employee that will no doubt impact their work and those they work with It’s your responsibility as an employer to set your employees up for success, and making sure their values and work ethic is in line with your culture before extending an offer is the very first thing you can do for them and the rest of your workforce.Company culture expresses what the organization’s expectations, values and beliefs are and how the organization interacts with both its own employees and the people in the communities in which they do business .
Although appealing to more refined tastes, art as a collectible has not always performed so profitably. During 2010, Deutscher-Menzies sold Arkie under the Shower, a painting by renowned Australian painter Brett Whiteley, at auction for a price of $1,100,000. Unfortunately for the previous owner, he had purchased it three years earlier at a price of $1,680,000. What was his annual rate of return on this painting?
Answer:
the annual rate of return on the painting was -13.17%
Explanation:
we will construct the equation for future value at the annual rate of return at which a principal of 1,680,000 return 1,100,000 in three years:
[tex]Principal \: (1+ r)^{time} = Amount[/tex]
Principal 1,680,000
time 3 years
Amount 1,100,000
rate r
[tex]1,680,000 \: (1+ r)^{3} = 1,100,000[/tex]
[tex]r = \sqrt[3]{ 1,100,000 \div 1,680,000} -1[/tex]
r = -0.131650681 = -13.17%
As expected, because the amount after three years is lower than the principa the rate of return is negative
Final answer:
The annual rate of return on the painting 'Arkie under the Shower,' after being purchased for $1,680,000 and sold for $1,100,000 over three years, is approximately -12.99%.
Explanation:
The question asks for the calculation of the annual rate of return on an investment in art. The previous owner purchased 'Arkie under the Shower' for $1,680,000 and sold it for $1,100,000 three years later. To calculate the annual rate of return, we use the formula for compound interest [tex](A = P(1 + r)^n)[/tex], where A is the final amount, P is the principal amount, r is the rate of return per period, and n is the number of periods. Inverting this formula to solve for r gives us [tex]r = ((A/P)^(^1^/^n^)) - 1[/tex]. Plugging in the numbers: [tex]r = (($1,100,000 / $1,680,000)^(^1^/^3^)) - 1[/tex], which gives an annual rate of return of approximately -12.99%.
K. Johnson, Inc.'s managers want to evaluate the firm's prior-year performance in terms of its contribution to shareholder value. This past year, the firm earned an operating income return on investment of 12 percent, compared to an industry norm of 11 percent. It has been estimated that the firm's investors have an opportunity cost on their funds of 14 percent, which is the same as the firm's overall cost of capital. The firm's total assets for the year were $ 100 million. Compute the amount of economic value created or destroyed by the firm. How does your finding support or fail to support what you would conclude using ratio analysis to evaluate the firm's performance? Assume that the firm has no debt.
Answer:
The company destroyed 2,000,000 capital
As the returns are less than the cost of create the assets.
It is destroys wealth to the stockholders
Explanation:
operating return on investment 12%
industry 11%
opportunity cost 14% overall cost of capital
Assets: 100 millions
Economic Value Added:
income - Assets x WACC
as there is no debt , the WACC will be the cost of capital
Return: 100,000,000 x 12% = 12,000,000
Assetx x cost of capital
100,000,000 x 14% = 14,000,000
EVA = 12,000,000 - 14,000,000 = -2,000,000
The company destroyed 2,000,000 capital
As the returns are less than the cost of create the assets.
The following information is available for Windsor, Inc. for the year ended December 31, 2017. Beginning cash balance $ 45,720 Accounts payable decrease 3,759 Depreciation expense 164,592 Accounts receivable increase 8,331 Inventory increase 11,176 Net income 288,646 Cash received for sale of land at book value 35,560 Cash dividends paid 12,192 Income taxes payable increase 4,775 Cash used to purchase building 293,624 Cash used to purchase treasury stock 26,416 Cash received from issuing bonds 203,200 Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)
Answer:
Cash generated for the year: 348,793
ending cash: 394,513
Explanation:
Operating Activities:
Net Income 288,646
depreciation 164,592
adjusted 453,238
change in Working capital:
AP decrease 3,759
Tax Payable 4,775
AR increase (8,331)
Inventory increase (11,176)
total change (10,973)
cash generated from operating activities 442.265
Investing Activities
proceed from land 35,560
purchase of building (293,624)
cash used from investing activities 258,064
Financing Activities
issuance of shares 203,200
TS purchase (26,416)
dividends paid (12,192)
cash generated from financing activities 164,592
Cash generated for the year: 348,793
beginning cash 45,720
ending cash 394,513
The Arizona Company, a U.S.-based manufacturer, ordered a piece of equipment from Sonora Inc., a Mexico-based supplier, agreeing to pay 300,000 Mexican pesos upon delivery of the equipment in three months time. At the time of the contract signing, the exchange rate between the U.S. dollar and the Mexican peso was 10P:$1.
With concerns about a weakening U.S. dollar, The Arizona Company decided to hedge its currency exposure by purchasing a forward foreign exchange contract from a local bank.
The forward contract committed The Arizona Company to pay $30,300 in three months in exchange for 300,000 pesos.
What was the forward foreign exchange rate implicit in the contract (assuming no transaction costs)?
Answer:
the forward contract rate is 9.9P = 1 USD
Explanation:
at contract 300,000 pesos at 10:1
When Arizone hedged a forward it is paying 30,300 for the 300,000 pesos so the implicit rate is not 10:1 as it would be paying 30,000 not 30,300
So we calcualte the rate:
pesos/dollars
300,000 / 30,300 = 9.900
the forward contract rate is 9.9P = 1 USD
A project has the following cash flow. Year zero's cash flow is $10000. The following years' cash flows decrease by $2000 each year. At the end of the project's life time, the cash flow is $-10000. The engineer who's evaluating this project disaggregate the cash flow by breaking it down to an annuity starting from year 0 to 10 with A = $10000 and the rest as a uniform gradient cash flow. The engineer analyzes the present worth of the project as P=A(P/A,i,a)(F/P,i,b)-G(P/G,i,c)(F/P,i,d). What should be the values for a, b, c, d, and G?
Answer:
a=b=c=10
G = 800
Explanation:
a,b,c show the time(number of years)
G is the amount of increase in cash flow each year.
how do debits to a bank accounts help us understand why subtracting a negative number result in addition?
Answer:
See explanation below
Explanation:
Subtracting a negative number result in addition, also as debiting a negative amount instead of crediting a positive number have the same outcome:
Debits to a bank account help us understand why subtracting a negative number results in addition.
Explanation:In accounting, a debit is an entry that represents an increase in assets or a decrease in liabilities. When we subtract a negative number, it is equivalent to adding a positive number. This is because subtracting a negative is the same as adding a positive. Let's take an example:
A bank account has a balance of $100.A debit of -$50 is made to the bank account.To find the new balance, we can subtract the negative number: $100 - (-$50).The subtraction can be rewritten as addition: $100 + $50.The new balance of the bank account is $150.Therefore, debits to a bank account help us understand why subtracting a negative number results in addition.