Answer:
Instructions are listed below
Explanation:
- Direct materials are those materials and supplies that are consumed during the manufacture of a product, and which are directly identified with that product.
- Direct labor is production or services labor that is assigned to a specific product, cost center, or work order.
- Manufacturing overhead refers to indirect factory-related costs that are incurred when a product is manufactured.
- Period costs are not directly tied to the production process. Overhead or sales, general, and administrative (SG&A) costs are considered period costs. SG&A includes costs of the corporate office, selling, marketing, and the overall administration of company business.
- Product costs are the direct costs involved in producing a product. A manufacturer, for example, would have production costs that include: Direct labor, Raw materials, Manufacturing supplies, Overhead that's directly tied to the production facility such as electricity.
In this exercise:
a. Annual picnic for plant employees and their families: Period costs-administrative expense.
b. Cost of fabric used by clothing manufacturer: Product costs- DM
c. Cost of plastic for a toy manufacturer: Product costs-DM
d. Cost of sewing machine needles used by a shirt manufacturer: Product costs- MOH
e. Cost of television commercials: Period cost - Selling
You plan to purchase an $110,000 house using a 15-year mortgage obtained from your local bank. The mortgage rate offered to you is 5.5 percent. You will make a down payment of 10 percent of the purchase price. a. Calculate your monthly payments on this mortgage. b. Calculate the amount of interest and, separately, principal paid in the 100th payment. c. Calculate the amount of interest and, separately, principal paid in the 130th payment. d. Calculate the amount of interest paid over the life of this mortgage.
Answer:
Cuota: 808.91
100th cuota:
Amortization 561.07
Interest 247.84
130th cuota:
Amortization 561.07
Interest 247.84
Total Inerest:
$ 46,603.80
Explanation:
We will first calculate the mortgage payment. which is the PTM of the present value of an ordinary annuity
[tex]PV \div \frac{1-(1+r)^{-time} }{rate} = C\\[/tex]
PV $99,000.00 (110,000 - 10% down payment)
time 180 (15 years x 12 month per year)
rate 0.004583333 (0.055 divided by 12 month per year
[tex]99,000 \times \frac{1-(1+0.0045833)^{-180} }{0.0045833} = C\\[/tex]
C $ 808.91
Now we will calculate "t" which is the amortization ofthe first period:
Cuota - Interest = t
interest: 99,000 x 0.00548333 = 453.75
808.91 - 453.75 = 355.16
Now will calculatize this by 100 period
and by 130 period to get the amortization in each k period.
[tex]t\: (1+ r)^{k} = Amortization_k[/tex]
t = 355.16
k = 100
rate 0.00458
[tex]355.16 \: (1+ 0.0045833)^{100} = Amortization_{100}[/tex]
Amortization 561.07
For interest we subtract from the cuota:
808.91 - 561.07 = 247.84
We repeat for the 130th payment:
[tex]355.16 \: (1+ 0.00458333333333333)^{130} = Amortization_{130}[/tex]
Amortization 643.58
808.91 - 561.07 = 247.84 interest
Total Interest:
Cuota x total payment - principal
808.91 x 180 - 99,000 = $ 46,603.80
Tamarisk, Inc. has the following inventory data:
Nov. 1 Inventory 31 units @ $6.20 each
8 Purchase 125 units @ $6.70 each
17 Purchase 62 units @ $6.55 each
25 Purchase 94 units @ $6.90 each
A physical count of merchandise inventory on November 30 reveals that there are 104 units on hand. Cost of goods sold (rounded) under LIFO is
Answer:
Cost of goods sold (rounded) under LIFO is $1.403
Explanation:
Date Q Cost U.Cost Sold Inventory Cost
nov-01 31 192,2 6,2 0 31 0
nov-08 125 837,5 6,7 52 73 348
nov-17 62 406,1 6,55 62 0 406
nov-25 94 648,6 6,9 94 0 649
312 208 104 1403
Using the LIFO method, which considers the most recent purchases first, the cost of goods sold by Tamarisk, Inc. in November amounts to $1,403.10.
Explanation:The LIFO (Last In, First Out) method assumes that the most recently purchased inventory items are sold first. Since we are asked to find out the cost of goods sold (COGS), and there were 104 units left over at the end of November, it means that Tamarisk, Inc. must have sold the rest.
Initially, Tamarisk Inc. had 31 units, and then added 125 units, 62 units, and 94 units to its inventory. Hence, total units bought = 31 + 125 + 62 + 94 = 312 units. Since there are 104 units left, the company sold 312 - 104 = 208 units in November.
To calculate COGS using the LIFO method, we begin by taking the last purchase first (94 units at $6.90 each = $648.6). But, we have 208 - 94 = 114 units left to account for, so we move to the second last purchase (62 units at $6.55 each = $406.1). We still need to account for 114 - 62 = 52 units, so we pull these from the second purchase (52 units at $6.70 each = $348.4). Therefore, the total COGS under LIFO is $648.6 + $406.1 + $348.4 = $1,403.10.
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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.
Income Statement. A firm’s income statement included the following data. The firm’s average tax rate was 20%. (LO3-1) Cost of goods sold $8,000 Income taxes paid $2,000 Administrative expenses $3,000 Interest expense $1,000 Depreciation $1,000 What was the firm’s net income? What must have been the firm’s revenues? What was EBIT?
Answer:
Revenues: $23.000
Net Income : $8.000
EBIT: $11.000
Please see details below:
Explanation:
Income Statement 2017
Revenues $23.000
Cost of goods sold -$8.000
Depreciation -$1.000
Gross Profit $14.000
Administrative Expenses -$3.000
Net Income Before Taxes and Int $11.000
Interest Expenses -$1.000
Net Income Before Taxes $10.000
Tax RATE 20% -$2.000
Net Income after Taxes $8.000
Leisure Industries manufactures custom-designed playground equipment for schools and city parks. Leisure expected to incur $ 627 comma 000 of manufacturing overhead cost, 41 comma 800 of direct labor hours, and $ 919 comma 600 of direct labor cost during the year (the cost of direct labor is $22 per hour). The company allocates manufacturing overhead on the basis of direct labor hours. During September, Leisure completed Job 309. The job used 160 direct labor hours and required $ 13 comma 000 of direct materials. The City of Hamptonville has contracted to purchase the playground equipment at a price of 23 % over manufacturing cost. . Calculate the manufacturing cost of Job 309. 2. How much will the City of Hamptonville pay for this playground equipment?
Answer:
Price= $85263,6
Explanation:
We need to calculate the price paid by the City of Hamptonville for playground equipment.
We know the following information:
Direct material= $13000
Direct labor= 160hours*$22hour= $3520
Manufacturing overhead: it is assigned on labor hours.
We need to calculate the value of manufacturing overhead.
Labor hours presupuested= $41800/$22hour= 1900hours
$/hour of manufacturing overhead= $627000/1900hours= $330
Manufacturing overhead Job 309= 330*160hours= $52800
Manufacturing cost Job 309= direct material + direct labor + Manufacturing overhead= 13000 + 3520 + 52800= $69320
Price=69320*1.23= $85263,6
Final answer:
The manufacturing cost for Job 309 is $18,920. The City of Hamptonville will pay $23,271.60 for the playground equipment, which is 23% over the manufacturing cost.
Explanation:
To calculate the manufacturing cost of Job 309 for Leisure Industries, we need to determine the overhead allocation rate, which is calculated by dividing the expected manufacturing overhead cost by the number of direct labor hours. Here, we have $627,000 of expected manufacturing overhead and 41,800 direct labor hours, giving us an overhead allocation rate of $15 per direct labor hour ($627,000 \/ 41,800).
For Job 309, the total direct labor cost can be calculated by multiplying the number of direct labor hours used by the cost per hour, which is 160 hours \\times $22/hour = $3,520. To this, we add the overhead cost, which is 160 hours \\times $15/hour = $2,400. We also know the direct materials cost for this job is $13,000. Adding all these costs gets us the total manufacturing cost for Job 309: $3,520 (labor) + $2,400 (overhead) + $13,000 (materials) = $18,920.
The City of Hamptonville will pay 23% over the manufacturing cost for the playground equipment. Hence, the selling price will be $18,920 \\times 1.23 = $23,271.60.
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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A grocery store manager must decide whether to buy four rug cleaners to rent to customers. The manager estimates that the first would yield $200 a year, the second $150, the third $75, and the fourth $20. If the interest rate is 12 percent and each rug cleaner costs $500, how many should the manager buy?
Answer:
It will purchase three.
Explanation:
the return will be:
income / investment
1ST rug cleaners: 200/500 = 40% return
2 rug cleaners: 150/500 = 30% return
3 rug cleaners: 75/500 = 15% return
4 rug cleaners: 20/500 = 4% return
As the current market rate is 12% if the forth rug cleaner is pruchased it will not turn out profitable.
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.
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.
Skysong, Inc. just began business and made the following four inventory purchases in June:
June 1 123 units $850
June 10 164 units 1280
June 15 164 units 1380
June 28 123 units 1080
$4590
A physical count of merchandise inventory (rounded to whole dollar) on June 30 reveals that there are 170 units on hand. The inventory method which results in the highest gross profit for June is
Answer:
The inventory method which results in the highest gross profit for June is FIFO
Explanation:
Month Units Cost U/cost LIFO E.INVEN. I.COST
jun-01 123 850 7 123 861 0
jun-10 164 1280 8 47 376 936
jun-15 164 1380 8 0 0 1312
jun-28 123 1080 9 0 0 1107
4590 170 1237 3355
FIFO E.INVEN. I.COST
7 0 0 861
8 0 0 1312
8 47 376 936
9 123 1107 0
170 1483 3109
Reactive Power Generation has the following capital structure. Its corporate tax rate is 40%. Security Market Value Required Rate of Return Debt $ 30 million 4 % Preferred stock 30 million 6 Common stock 40 million 10 What is its WACC? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
Answer:
The WACC is 6.52%
Explanation:
The formula to compute WACC is shown below:
= Weightage of debt × cost of debt × ( 1- tax rate) + (Weightage of preferred stock) × (cost of preferred stock) + (Weightage of common stock) × (cost of common stock)
where,
Weighted of debt = Debt ÷ total firm
The total firm includes debt, preferred stock, and the equity which equals to
= $30 million + $30 million + $40 million
= $100 million
So, Weighted of debt = ($30 million ÷ $100 million) =0.3
So, the weight of preferred stock = (Preferred stock ÷ total firm)
= $30 million ÷ $100 million
= 0.3
And, the weighted of common stock = (Common stock ÷ total firm)
= $40 million ÷ $100 million
= 0.4
Now put these values to the above formula
So, the value would equal to
= (0.3 × 4%) × ( 1 - 40%) + (0.3 × 6%) + (0.4 × 10%)
= 0.72% + 1.8% + 4%
= 6.52%
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.
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
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:
Debit: Cash $(666,900 - 33,345) = $633,555 (Net amount received)Debit: Service Charge Expense $33,345 (Fees to National Factors Inc.)Credit: Accounts Receivable $666,900 (Amount of receivables sold)Learn more about Accounting for Receivable Sale here:https://brainly.com/question/17233316
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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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Jenna decides to see a movie that costs $7 for the ticket and has an opportunity cost of $20. After the movie, she says to one of her friends that the movie was not worth it. Apparently:
A. Jenna failed to apply the cost-benefit model to her decision.
B. Jenna was not rational.
C. Jenna overestimated the benefits of the movie.
D. Jenna underestimated the benefits of the movie.
Answer:
The correct answer is option C.
Explanation:
The cost of the movie ticket is $7.
The opportunity cost involved is $20.
The total cost of the movie will thus be $27.
Jenna would have thought that the benefit of watching the movie would be worth $27 at least.
But later she said that the movie was not worth it. This means that the cost incurred was higher than the benefits earned.
This implies that Jenna overestimated the benefits of watching the movie.
Home Realty, Incorporated, has been operating for three years and is owned by three investors. J. Doe owns 60 percent of the total outstanding stock of 9,000 shares and is the managing executive in charge. On December 31, the following financial items for the entire year were determined: sales revenue, $236,000; salaries and wages expense, $111,000; interest expense, $7,700; advertising expenses, $9,725; and income tax expense, $19,900. Also during the year, the company declared and paid the owners dividends amounting to $17,000. Prepare the company’s income statement.
Answer:
Net profit= $87675
Explanation:
An income statement is one of the three important financial statements used for reporting a company's financial performance over a specific accounting period. The income statement focuses on the four key items - revenue, expenses, gains, and losses. It does not cover receipts (money received by the business) or the cash payments/disbursements (money paid by the business).
It follows the general structures:
Revenues (+)
Operating Revenue
Non-Operating Revenue
Total
Expenses (-)
Primary Activity Expenses
Secondary Activity Expenses
Total
Gains (+)
Losses (-)
Net income/loss
In this exercise:
Total revenues=$236000
Expenses:
salaries=$111000
Advertising=$9725
Interest=7700
Total Expenses=$128425
Taxes= $19900
Net profit= $87675
Note: dividends shouldn't be included in the Income Statement
The income statement for Home Realty, Incorporated shows a net income of $88,675, calculated by subtracting the sum of salaries, interest, advertising expenses, and income tax from the total sales revenue of $236,000.
Explanation:The student is required to prepare an income statement for Home Realty, Incorporated, based on the financial items provided. An income statement summarizes the revenues, expenses, and profits over a specific period. The following information helps create the income statement:
Sales Revenue: $236,000Salaries and Wages Expense: $111,000Interest Expense: $7,700Advertising Expenses: $9,725Income Tax Expense: $19,900The net income is calculated as:
Total Revenues - Total Expenses = Net Income
Sales Revenue: $236,000
- Salaries and Wages: $111,000
- Interest Expense: $7,700
- Advertising Expenses: $9,725
- Income Tax Expense: $19,900
Net Income: $236,000 - ($111,000 + $7,700 + $9,725 + $19,900) = $88,675
Dividends paid to the owners are not included in the income statement since they are distributions of profit, not business expenses.
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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
Luther Inc., has 3,000 shares of 6%, $50 par value, cumulative preferred stock and 100,000 shares of $1 par value common stock outstanding at December 31, 2013, and December 31, 2012. The board of directors declared and paid a $7,500 dividend in 2012. In 2013, $36,000 of dividends are declared and paid. What are the dividends received by the preferred stockholders in 2013?
a. $25,500
b. $18,000
c. $ 10,500
d. $ 9,000
Answer:
c. $ 10,500
Explanation:
3,000 shares at $50 yields 6% cumulative = dividends per year
3,000 x 50 x 0.06 = $9,000 dividends per year
dividends for 2012:
7,500 - 9,000 preferred dividends = -1,500
The preferred stock accumulated 1,500 dividend to recieve in future periods
dividends for 2013:
36,000 - 9,000 preferred for 2013 - 1,500 accumulate = 25,500 available for common stock
The preferred stock reviee 9,000 + 1,500 = 10,500 for 2013
Lease-A-Rama Co. leases equipment to Dunlavy Co. over a lease term of 5 years, with equal annual payments starting the first day of the lease. The fair value of the equipment is $500,000 and the expected residual value at the end of the lease term is $50,000. Lease-A-Rama expects a 12% return on investment as a result of the lease. What is the amount of the equal lease payments Dunlavy will make, and at what amount will Lease-A-Rama record its gross investment in the lease?
Answer:
Ans. a) Equal lease payments are $116,816.41 and; b)Gross investment in the lease = $634,082.05
Explanation:
Hi, in order to find the annuity of a lease that has a 12% return and residual value of $50,000, for four years and with its first payment made the same day of the lease, we need to solve for "A" the following equation.
[tex]PresentValue=A+\frac{A((1+r)^{n-1}-1) }{r(1+r)^{n-1} } +\frac{ResidualValue}{(1+r)^{n} }[/tex]
Where:
r= expected rate of return
n= Number of payments
Therefore, everything should look like this
[tex]500,000=A+\frac{A((1+0.12)^{4}-1) }{0.12(1+0.12)^{4} } +\frac{50,000}{(1+0.12)^{5} }[/tex]
[tex]500,000=A+A(3.03734935)+28,371.34[/tex]
[tex]500,000-28,371.34=A(4.03734935)[/tex]
[tex]\frac{500,000-28,371.34}{4.03734935} =A[/tex]
[tex]A=116,816.41[/tex]
That is the annual payment of the lease, with a residual value of 50,000, rate = 12%, for 5 years, with its first payment made the same day that the lease was issued.
B) the gross invesment to be recorded by Lease-A-Rama is
116,816.41*5 + 50,000= 634,082.05
Best of luck.
Final answer:
The answer explains how to calculate the equal lease payments and the gross investment in the lease for a business scenario involving equipment leasing. By doing this, the gross investment in the lease turns out to be $500,000.
Explanation:
Equal Lease Payments:
Calculate the present value of the annuity using the formula: PV = (PMT x (1 - (1 + r)⁻ⁿ) / r), where PMT is the annual lease payment, r is the discount rate, and n is the number of years.
Substitute the given values: PV = (PMT x (1 - (1 + 0.12)⁻⁵) / 0.12), PV = $384,053.89.
Since the fair value of the equipment is $500,000, the annual payment must cover the value and the return, thus annual lease payment = ($500,000 - $384,053.89) = $115,946.11.
Gross Investment in the Lease: $500,000.
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!
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.
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.
Budgeted Sales for January: 8,000 Units Budgeted Sales for February: 10,000 Units Budgeted Sales for March: 12,000 Units Beginning Finished Goods for January: 3,000 Units Pevensie Inc. plans to have ending finished goods inventory of 20% of next month's projected sales. What are the budgeted total required production units for February?
Answer:
Production= 10400 units
Explanation:
Giving the following information:
Budgeted Sales for January: 8,000 Units
Budgeted Sales for February: 10,000 Units
Budgeted Sales for March: 12,000 Units
Beginning Finished Goods for January: 3,000
Units Pevensie Inc. plans to have an ending finished goods inventory of 20% of next month's projected sales.
We will assume that the ending finished goods of January reaches 20% required for February.
February:
(+)Budgeted Sales for February= 10,000 Units
(+)Ending finished goods= 12000*0,20= 2400 units
(-)Beginning finished goods inventory= 2000 units
Production= 10000+2400-2000= 10400 units
At the beginning of the year, Smith, INc., budgeted the following: Units: 10,000 Sales: $100,000 Total variable expenses: $ 60,000 Total fixed expenses: $ 20,000 Variable factory overhead $ 30,000 Fixed factory overhead: $ 10,000 There were no beginning inventories. At the end of the year, no work was in process, total factory overhead incurred was $39,500, and underapplied factory overhead was $1,500. Factory overhead was applied on the basis of budgeted unit production. How many units were produced this year?
To determine the number of units produced by Smith, Inc., it was calculated that the total applied factory overhead was $38,000, by subtracting the underapplied overhead from the total overhead incurred. By dividing this amount by the standard overhead rate of $4 per unit based on the budgeted production, it was found that 9,500 units were produced.
Explanation:To calculate how many units were produced this year by Smith, Inc., we need to consider the total factory overhead applied and the underapplied factory overhead. The total factory overhead applied is based on the budgeted unit production, which consists of both variable and fixed components.
According to the information provided, variable factory overhead was budgeted at $30,000 and fixed factory overhead was budgeted at $10,000, totaling $40,000 for the factory overhead based on the budgeted production of 10,000 units. This gives us a standard overhead rate of $4 per unit (i.e., $40,000 ÷ 10,000 units).
At the end of the year, the actual total factory overhead incurred was $39,500. Additionally, there was an underapplied factory overhead of $1,500, indicating that the overhead costs applied to the products were less than the actual overhead incurred. Therefore, the total applied factory overhead can be calculated by subtracting the underapplied overhead from the total overhead incurred, which equals $38,000 ($39,500 - $1,500).
To find the number of units produced, we divide this total applied overhead by the standard overhead rate of $4 per unit. This gives us 9,500 units produced (i.e., $38,000 ÷ $4 per unit).
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
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.
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
The trial balance for Windsor, Inc. appears as follows:
Windsor, Inc.
Trial Balance
December 31, 2017
Cash $230
Accounts Receivable 407
Prepaid Insurance 64
Supplies 140
Equipment 3120
Accumulated Depreciation, Equipment $470
Accounts Payable 300
Common Stock 940
Retained Earnings 1090
Service Revenue 2331
Salaries and Wages Expense 780
Rent Expense 390 0
$5131 $5131
If service for $137 had been performed but not billed, the adjusting entry to record this would include a:
Answer:
Explanation:
The adjusting entry is shown below:
Accounts receivable A/c Dr $137
To Service revenue $137
(Being service is performed)
When service is performed but not billed yet, we debit the accounts receivable account and credit the service revenue account as the amount is not yet received from the client so we do not debit the service revenue account.
Final answer:
The adjusting entry for services performed but not billed would include a debit to Accounts Receivable for $137 and a credit to Service Revenue for $137, which reflects earned revenue that is yet to be paid.
Explanation:
The student's question pertains to how to record an adjusting entry in Windsor, Inc.'s accounting records for services that have been performed but not yet billed by the end of the accounting period. An adjusting entry is made to ensure that the revenues and expenses are recognized in the period in which they are incurred, following the accrual basis of accounting. Since the service was performed but not billed, we need to recognize this revenue.
To record this adjusting entry, we would debit (increase) Accounts Receivable and credit (increase) Service Revenue. This reflects that the company has earned revenue but has not yet received the payment, thus increasing the amount owed by customers. The adjusting entry would be:
Debit Accounts Receivable: $137
Credit Service Revenue: $137
. Based on the following data, Accounts payable…………………………………………………..... $62,000 Accounts receivable…………………………………………………. 100,000 Cash………………………………………………………………....... 30,000 Inventory………………………………………………………………. 138,000 Land………………………………………………………………….… 160,000 Common Stock ………………………………………………………. 200,000 Revenue………………………………………………………………. 80,000 Dividends……………………………………………………………… 56,000 Expenses……………………………………………………………… 40,000 what is the amount of total assets?
Answer: $428,000
Explanation:
Given that,
Accounts payable = $62,000
Accounts receivable = 100,000
Cash = 30,000
Inventory = 138,000
Land = 160,000
Common Stock = 200,000
Revenue = 80,000
Dividends = 56,000
Expenses = 40,000
Total assets = Accounts receivable + Cash + Inventory + Land
= 100,000 + 30,000 + 138,000 + 160,000
= $428,000