This business finance question involves understanding the concepts of notes receivables, interest calculations, and time value of money. It specifically references transactions with notes receivable, including time extensions on past due accounts, calculating accrued interest, and handling dishonored notes or written-off accounts. The interest on notes can be calculated using the formula: Interest = Principal x Rate x Time.
Explanation:The subject of this question revolves around notes receivable and interest calculations in business finance. A few key transactions involving notes receivable are provided. First, Miranda Lee is given a time extension on her past due account, which means she defaults on a loan with a $15,000 principal amount and a 45-day term at a 7% interest rate. The accrued interest is then calculated and added to the principal when she makes her payment. The second and third scenarios involve similar transactions with the Tomas Company and H. Cheng. The primary difference with H. Cheng's note is that it is dishonored, which means he defaults on his payment and the debt is written off. Interest on these loans can be calculated using the formula: Interest = Principal x Rate x Time, where Time is the portion of the year the note is outstanding, Rate is the note's interest rate, and Principal is the note's face value. Some concepts involved are future value, present value, interest rates and time value of money.
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Final answer:
Accounts Receivable, accrued interest, dishonored notes.
Explanation:
Accounts Receivable represent amounts owed to a company for goods or services provided on credit terms. When a note is accepted, it signifies a formal promise to pay a specific amount at a future date with interest.
Accrued interest is the interest that has accumulated on a note but has not been paid or recorded yet. Adjusting entries are made to recognize this interest as it is earned over time.
When a note is dishonored, it means that the maker of the note fails to make the required payment, leading to potential financial implications for the payee.
Policymakers in a small country impose a specific tariff of $2.00 per unit. Prior to the tariff the country imported 10,000 units and after the tariff 8,000 units. The redistributive effects of the tariff are:
Select one:
a. such that $16,000 is forward shifted onto domestic consumers.
b. impossible to determine with the information given.
c. shared equally between domestic producers and domestic consumers.
d. such that $4,000 is backward shifted onto domestic producers.
Answer:
Option A is the correct answer.
Explanation:
Redistribution effect is also referred to as the transfer effect.
Under the redistribution effect, the price level increases after exacting tariff, this, in turn, increases the producer surplus and decreases the consumer surplus.
Based on the given information tariff =$2 per unit; Total revenue before tariff = PQ, where P is price and Q is quantity.
Let us denote the original price as P.
Therefore, total revenue before tariff = P*10000 = 10000P.
After imposing tariff $2 the price raises and becomes: P+2
So,
Total revenue after tariff = (P+2)*8000 = 8000P+16000
This implies that the extra $16000 amount bears consumers after imposing the specific tariff.
Thus, option A is the correct answer.
Perez, Inc. recently completed 40,000 units of a product that was expected to consume six pounds of direct material per finished unit. The standard price of the direct material was $7.50 per pound. If the firm purchased and consumed 246,000 pounds in manufacturing (cost = $1,881,000), the direct-material quantity variance would be (with steps)
Answer:
$45,000 Unfavorable
Explanation:
The computation of direct-material quantity variance is shown below:-
Direct Material Quantity Variance = Standard Rate × (Actual Quantity - Standard Quantity Used for Actual Production)
= $7.50 × (246,000 - 40,000 × 6)
= $7.50 × (246,000 - 240,000)
= $7.50 × 6,000
= $45,000 Unfavorable
Therefore for computing the direct-material quantity variance we simply applied the above formula.
A preferred stock has a face value of $100 and pays annual dividends at a rate of 8 percent. The required rate of return on this stock is 12 percent. What is the price of this security if the next dividend is paid in exactly one year?
Answer: $66.67
Explanation:
The value of a Preferred Stock is calculated with the following formula,
Value of the preferred stock = Annual Dividend/rate of return
The Annual Dividend is 8% of the face value so,
= 0.08 * $100
= $8
Therefore the Value of the Stock is,
= 8/0.12
= $66.67
Answer: $66.67
Explanation:
GIVEN the following ;
Face value of preferred stock = $100
Dividend rate per annum = 8% = 0.08
Required rate of return = 12% = 0.12
Price of stock if Dividend is paid in exactly one year =?
Price of stock = ( Dividend ÷ Rate of return)
Dividend = (annual dividend rate × face value of stock)
Dividend = 0.08 × $100 = $8
Price of stock = ($8 ÷ 0.12)
Price of stock = $66.667
Therefore price of security if Dividend is paid in exactly one year = $66.67
Sarah is the manager of a store. As the holiday season approaches, Sarah decides that the store needs to be decorated. She knows Stephanie is creative, so she assigns Stephanie the task of decorating the store.
This is an example of __________.
A. authority
B. responsibility
C. flexibility
D. delegation
Answer:
D. delegation
Explanation:
Delegation is the process of assigning the authority of completion of a specific task, to someone else. Generally, passed down from a superior to a subordinate. In this case, Sarah has passed down the role of decorating to Stephanie. Delegation in a business not only reduces the workload burden for those who delegate but it is likely to increase motivation of the person the work is being delegated today. This is because they feel valued that their superior is entrusting them with an important task. However, it is important to note that if too much work is delegated, it may infuriate employees as they might feel like they are being overworked.
Rihanna, Inc. sells watches for $100 per watch. The variable expenses are $20 per unit, and the fixed expenses total $80,000 per period. By how much will net operating income change if watch sales are expected to increase by $400,000
Answer:
Net operating income = $240,000
Explanation:
At first we have to determine the break-even sales.
We know,
Break-even sales in units = Fixed expense ÷ (Sales price per unit - Variable cost per unit)
Break-even sales in units = $80,000 ÷ ($100 - 80)
Break-even sales in units = $80,000 ÷ $20 = 4,000 units.
Therefore, if the company sells 4,000, there will be no operating income.
If the total sales of Rihanna, Inc. is increased by $400,000, it means the company sells $400,000 ÷ $100 = 4,000 more units.
Therefore,
Sales = $400,000
Less: Variable expense (4,000*$40) = $160,000
Contribution Margin = $240,000
The new net operating income will be $240,000 as the fixed expense remains same for the entire period.
Dinklage Corp. has 7 million shares of common stock outstanding. The current share price is $67, and the book value per share is $6. The company also has two bond issues outstanding. The first bond issue has a face value of $60 million, a coupon rate of 7 percent, and sells for 92 percent of par. The second issue has a face value of $45 million, a coupon rate of 6 percent, and sells for 104 percent of par. The first issue matures in 22 years, the second in 7 years. Both bonds make semiannual coupon payments. a. What are the company's capital structure weights on a book value basis
Answer:
The company's capital structure weights on a book value basis are:
a. 28.57% for equity, and
b. 71.43% for debt.
Explanation:
Book value of equity = 7,000,000 * $6 = $42,000,000
Book value of debts = $60,000,000 + $45,000,000 = $105,000,000
Dinklage Corp.'s total value = $42,000,000 + $105,000,000 = $147,000,000
Book value weights of equity = $42,000,000 / $147,000,000 = 0.2857, or 28.57%
Book value weights of debt = = 1 - 0.2857 = 0.7143, or 71.43%
Therefore, the company's capital structure weights on a book value basis are 28.57% for equity and 71.43% for debt.
To calculate the capital structure weights on a book value basis, multiply the number of shares of common stock by the book value per share and the face value of each bond by the number of bonds outstanding. Then divide the book value of each component by the total book value of the company's capital structure to determine the weights.
Explanation:To calculate the capital structure weights on a book value basis, we need to determine the book value of the company's common stock and its outstanding bonds. The book value of the common stock is found by multiplying the number of shares outstanding by the book value per share. The book value of the bonds is the face value of each bond multiplied by the number of bonds outstanding. To calculate the weights, divide the book value of each component by the total book value of the company's capital structure.
The book value of the common stock is $42 million (7 million shares x $6 per share).The book value of the first bond issue is $55.2 million ($60 million x 0.92).The book value of the second bond issue is $46.8 million ($45 million x 1.04).The total book value of the company's capital structure is $144 million ($42 million + $55.2 million + $46.8 million).
The capital structure weights on a book value basis are:
Common stock: 29.17% ($42 million / $144 million)First bond issue: 38.33% ($55.2 million / $144 million)Second bond issue: 32.50% ($46.8 million / $144 million)Learn more about Capital structure weights here:https://brainly.com/question/36197017
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Niles and Marsha adopted an infant boy (a U.S. citizen). They paid $17,500 in 2016 for adoption-related expenses. The adoption was finalized in early 2017. Marsha received $3,600 of employer-provided adoption benefits. For question a) assume that any adoption credit is not limited by modified AGI or by the amount of tax liability.
A. What amount of adoption credit, if any, can Niles and Marsha take in 2017? $9,970
B. Using the information in question a), assume that their modified AGI was $222,000 in 2017. What amount of adoption credit is permitted in 2017? (Do not round intermediate calculations. Round your final answer to the nearest whole dollar amount.)
Answer:
A) the adoption credit for 2017 was $13,570 per child. This credit applies only to adoption processes finalized during that year. This case applies since the adoption process was started in 2016 but ended in 2017.
total adoption credit = $13,570 - $3,600 received in benefits from employer = $9,970
B) the phase out range in 2017 was $203,540–$243,540. Since their income was $222,000, their adoption credit will phase out proportionally by = ($222,000 - $203,540) x ($13,570 / $40,000) = $18,460 x 0.33925 = $6,263
So the adoption tax credit = $13,570 - $6,263 = $7,307
Final answer:
Niles and Marsha can claim a $13,900 adoption credit if it is not limited by their AGI or tax liability. For a modified AGI of $222,000, the credit would begin to phase out, requiring further information for an exact calculation.
Explanation:
When answering part A, if the adoption credit is not limited by modified AGI or tax liability, Niles and Marsha can claim the full amount of their adoption-related expenses as a credit. Given that they have $17,500 in adoption expenses and received $3,600 in employer-provided adoption benefits, they can claim the remaining expenses of $13,900 as an adoption credit.
For part B, since Niles and Marsha have a modified AGI of $222,000 in 2017, their adoption credit begins to phase out. According to the tax brackets provided, their income places them in the range where the credit begins to phase out (phased-out adoption credit). The phase-out amount and the resulting adoption credit they can claim would require additional tax calculation information that has not been provided. Typically, for these calculations, one would need to refer to the specific IRS adoption credit phase-out rules and limits for the year 2017.
Which of the following is NOT a part of the business case for why companies should act in a socially responsible manner? A. Acting in a socially responsible manner is in the overall best interest of shareholders. B. Every business has a moral duty to be a good corporate citizen C. Acting in a socially responsible manner reduces the risk of reputation-damaging incidents. D. To the extent that a company's socially responsible behavior wins applause from consumers and fortifies its reputation, a company may win additional patronage. E. Acting in a socially responsible manner can generate internal benefits (as concerns employee recruiting, workforce retention, employee morale, and training costs).
Answer:
D
Explanation:
Final answer:
The correct answer is B. Every business has a moral duty to be a good corporate citizen.
Explanation:
The correct answer is B. Every business has a moral duty to be a good corporate citizen. The business case for why companies should act in a socially responsible manner includes several factors, such as:
Acting in a socially responsible manner is in the overall best interest of shareholder.Acting in a socially responsible manner reduces the risk of reputation-damaging incidents.To the extent that a company's socially responsible behavior wins applause from consumers and fortifies its reputation, a company may win additional patronage.Acting in a socially responsible manner can generate internal benefits, such as employee recruiting, workforce retention, employee morale, and training costs.The idea that every business has a moral duty to be a good corporate citizen is not part of the business case for acting in a socially responsible manner. While businesses need to consider their impact on society, it is not necessarily a driving factor in the business case.
Ivanhoe Corp.'s 2021 income statement had pretax financial income of $502000 in its first year of operations. Ivanhoe uses an accelerated cost recovery method on its tax return and straight-line depreciation for financial reporting. The differences between the book and tax deductions for depreciation over the five-year life of the assets acquired in 2021, and the enacted tax rates for 2021 to 2025 are as follows:
Book Over (Under) Tax
Tax Rates
2021 $(102000) 25%
2022 (132000) 20%
2023 (32000) 20%
2024 122000 20%
2025 142000 20%
There are no other temporary differences.
Required:
A) In Ivanhoe's December 31, 2021 balance sheet, the noncurrent deferred income tax liability and the income taxes currently payable should be ___________.
Answer:
$20,400 and $100,000
Explanation:
The computation of the non-current deferred income tax liability and the income taxes currently payable is shown below:
The non-current deferred income tax liability is
= $102,000 × 20%
= $20,400
And, the income taxes currently payable is
= ($502,000 - $102,000) × 25%
= $400,000 × 25%
= $100,000
Since we have to determine for the year 2021 so we considered the 2021 amount and tax rate for another year for the first part and for the second amount we take the remaining amount and then multiplied it by the tax rate of 2021
An example of a difference in types of business combination is: A. A statutory merger can only be effected by a capital stock acquisition while a statutory consolidation can only be effected by an asset acquisition. B. A statutory merger requires dissolution of the acquired company while a statutory consolidation does not require dissolution. C. A statutory merger can only be effected by an asset acquisition while a statutory consolidation can only be effected by a capital stock acquisition. D. A statutory consolidation requires dissolution of the acquired company while a statutory merger does not require dissolution.
Answer:
B. A Statutory merger requires dissolution of the acquired company while a statutory consolidation does not require dissolution.
Explanation:
A statutory merger refers to collaboration between two entities wherein one entity i.e the acquiring firm gets entitled to continue it's legal existence while the weak company or the acquired company's identity is lost.
In case of statutory consolidation, it is a kind of merger wherein, the merged entities lose their identity and an altogether new entity is formed to take over the assets and liabilities.
In case of statutory merger, the acquiring company takes over the business and assets and liabilities of the acquired company whereas under consolidation, the assets and liabilities of both the entities are pooled together and taken over by a new entity which is created.
Federal and state governments may oppose and disallow any of the two mergers if they believe, such mergers would lead to anti competitive practices and creation of monopolies.
David considers himself to be a responsible and safe driver. He has never been in an accident and never received a speeding ticket. He is looking for the minimal amount of automobile insurance possible. Which type of coverage best fits David's goals
Answer:
The correct answer is letter "A": liability coverage.
Explanation:
Liability coverage is the type of insurance that takes care of damages of other parties involved in a car accident rather than its policyholder. Most liability coverages are inexpensive since the damages the insurance company covers have a limit. Vehicle damages and medical bills as a result of an accident are typical expenses covered by liability coverage. In some cases, it covers a rental car for the other party affected if the vehicle is not drivable after the collision.
(Measuring growth) If Pepperdine, Inc.'s return on equity is 19 percent and the management plans to retain 61 percent of earnings for investment purposes, what will be the firm's growth rate?
Answer:
11.59% growth rate
Explanation:
This analysis is done in the SUSTAINABLE GROWTH RATE MODEL.
Pepperdine Incorporation's Return on Equity (ROE) is equal to 19%
Pepperdine Incorporation's Retention Ratio (RR) is equal to 61% of it's earnings.
This implies that Pepperdine Incorporation' retains 61% of income(earning) for investment purposes.
The firm's growth rate will be gotten from multiplying the ROE by the RR.
That is: 19% × 61% = 11.59%
That is the answer.
Return on Equity and Retention Rate are two indices used in growth rate measurement.
Pepperdine, Inc.'s growth rate is calculated by multiplying the return on equity (19%) by the retention ratio (61%), resulting in a growth rate of 11.59%.
Explanation:The student is asking about the growth rate of Pepperdine, Inc., which can be calculated using the retention ratio and return on equity (ROE). The growth rate formula in this context is the product of the retention ratio (the percentage of earnings retained after dividends are paid) and the ROE. Given that Pepperdine, Inc. has an ROE of 19% and plans to retain 61% of earnings, the firm's growth rate can be calculated as:
Growth Rate = Retention Ratio × Return on Equity
Growth Rate = 0.61 × 0.19 = 0.1159 or 11.59%
Therefore, Pepperdine, Inc.'s expected growth rate is 11.59%.
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After numerous campus interviews, Alex Sanchi, a student at BC, received two office interview invitations from the Orlando offices of two large firms. Both firms offered to cover her "out-of-pocket expenses" (travel, hotel, and meals). She scheduled the interviews for both firms on the same day, one in the morning and one in the afternoon. At the conclusion of each interview, she submitted to both firms her total out-of-pocket expenses of $296 for mileage, hotel, meals, parking and tolls. She believes this approach is appropriate. If she had made two trips, her cost would have been two times $296. She is also certain that neither firm knew she had visited the other on that same trip. Within ten days Alex received two checks in the mail, each in the amount of $296.Did Alex handle the situation properly? If not what should she have done?
Answer:
She should have been honest and transparent about the interviews to both potential employers.
Explanation:
A good working relationship is based on trust, honesty and ethical behavior from both the potential employee and employer. Alex, being dishonest at the beginning of a potential relationship, may ruin the chances of having that relationship. If either of her potential employers found out, she would be labelled as unethical and may face legal action for using funds from one firm to attend an interview of another. The honest action would have been to set different days (consecutive) and informed both that she would be there for both days and for what. This would have benefited her as well as it would have allowed her some time to prepare for the next interview.
A good member of any team is honest, trustworthy and reliable, among other traits.
Answer:
Situation was not handled properly.
Interviews would have been scheduled for different days
Explanation:
Doubling bills is an un-ethical act of charging two different clients for the same time working while in reality the actual cost of time spent for each client is less than the bill submitted.This violates the law of professional conduct.
Alex's idea of submitting two different daily expenses to the two firms for interviews attended on the same day is double billing , which might attract fines or other punishments if discovered .
It would have been better if she scheduled the interviews on different days so far each of the firms are willing to cover the expenses.
Jennifer Baskiter is president and CEO of Plants&More, an Internet company that sells plants and flowers. The success of her startup Internet company has motivated her to expand and create two divisions. One division focuses on sales to the general public and the other focuses on business-to-business sales to hotels, restaurants, and other firms that want plants and flowers for their businesses. She is considering using a return on investment as a means of evaluating her divisions and their managers. She has hired you as a compensation consultant. What issues or concerns would you raise regarding the use of ROI for evaluating the divisions and their managers?
Answer:
Evaluating Divisional Managers on the basis of ROI may not be goal congruent.
Explanation:
While Return On Investment (ROI) is a common denominator for comparing the returns of dissimilar business or divisions, it has its demerits.
A problem exists when this measure is used to evaluate performance of divisional managers. Evaluating Divisional Managers on the basis of ROI may not be goal congruent.
Divisional Managers will accept or not accept projects in their best interest if new projects does not result in greater ROI than the previous,leaving or ignoring the company interest.
Blossom Company incurs these expenditures in purchasing a truck: cash price $20,000, accident insurance (during use) $1,500, sales taxes $1,100, motor vehicle license $200, and painting and lettering $1,600. What is the cost of the truck
To calculate the cost of the truck, making sure to include all expenditures related to the purchase, we add together the cash price, accident insurance, sales taxes, motor vehicle license, and painting and lettering costs. This results in a total cost of $24,400 for the Blossom Company to purchase the truck.
Explanation:The cost of the truck for the Blossom Company incorporates several factors. These factors include the cash price of the truck, accident insurance, sales taxes, motor vehicle license, and painting and lettering. In your case, we'll add all these expenditures together to find the total cost of the truck.
The cash price of the truck is $20,000.Accident insurance during the truck's use is $1,500.Sales taxes paid amounted to $1,100.The cost of the motor vehicle license was $200.Finally, the cost for painting and lettering amounted to $1,600.To calculate the total, you simply add these costs together, i.e., $20,000 + $1,500 + $1,100 + $200 + $1,600 which results in a total cost of $24,400.
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The cost of the truck for Blossom Company, including all associated expenditures, is $24,400.
Here's a breakdown of the expenditures and how they contribute to the total cost:
1. Cash price of the truck: $20,000
- This is the base cost of acquiring the truck.
2. Accident insurance during use: $1,500
- This expenditure directly relates to ensuring the truck against accidents during its operational use.
3. Sales taxes: $1,100
- These are taxes paid on the purchase of the truck, typically calculated as a percentage of the purchase price.
4. Motor vehicle license: $200
- This is the fee paid to legally register and license the truck for road use.
5. Painting and lettering: $1,600
- This expenditure is for customizing the truck with painting and lettering, likely for identification or branding purposes.
To find the total cost of the truck, we sum up all these expenditures:
[tex]\[ \text{Total Cost of the Truck} = \text{Cash Price} + \text{Accident Insurance} + \text{Sales Taxes} + \text{Motor Vehicle License} + \text{Painting and Lettering} \][/tex]
[tex]\[ \text{Total Cost of the Truck} = \$20,000 + \$1,500 + \$1,100 + \$200 + \$1,600 \][/tex]
[tex]\[ \text{Total Cost of the Truck} = \$24,400 \][/tex]
OMS Manufacturing expects to produce and sell 12000 units of Big, its only product, for $20 each. Direct material cost is $3 per unit, direct labor cost is $10 per unit, and variable manufacturing overhead is $6 per unit. Fixed manufacturing overhead is $24,000 in total. Variable selling and administrative expenses of $1 per unit and fixed selling and administrative expenses are $3,000 in total. According to generally accepted accounting principles, inventoriable cost per unit of Big would be
Answer:
Inventory cost per unit of Big would be $21.
Explanation:
According to generally accepted accounting principles, inventory cost per unit of products is the total manufacturing cost of that product divided by the unit of that product produced. The total manufacturing cost are cost that are directly related to the production of the product. Therefore, selling and distribution expenses are not part of the total manufacturing cost.
Based on the above, the inventory cost per unit of Big can be calculated as follows:
Total direct material cost = 12,000 × $3 = $36,000
Total direct labor cost = 12,000 × $10 = $120,000
Total variable manufacturing overhead = 12,000 × $6 = $72,000
Total variable manufacturing cost = 36,000 + 120,000 + 72,000 = $228,000
Fixed manufacturing overhead = $24,000
Total manufacturing cost = $228,000 + $24,000 = $252,000
Inventory cost per unit = $252,000 ÷ 12,000 = 21 per unit.
Therefore, of inventory cost per unit of Big would be $21.
Answer:
$21.00 per unit
Explanation:
Direct material cost 3
Direct labour cost 10
Variable
manufacturing 6
overhead
Fixed manufacturing
overhead
(24000/12000) 2
Inventory cost per unit
3 + 10 + 6 + 2 = $21.00 per unit
Suppose Stanley's Office Supply purchases 50,000 boxes of pens every year. Ordering costs are $100 per order and carrying costs are $0.40 per box. Moreover, management has determined that the EOQ is 5,000 boxes. The vendor now offers a quantity discount of $0.02 per box if the company buys pens in order sizes of 10,000 boxes. Determine the before-tax benefit or loss of accepting the quantity discount. (Assume the carrying cost remains at $0.40 per box whether or not the discount is taken. And a hint: C*P
Answer:
The Before Tax benefit = 500 USD
Explanation:
Data Given:
Purchase = 50,000 boxes
Ordering Cost = 0.40 USD per box
EOQ = 5000 boxes = Economic Order Quantity
Vendor Offer = 0.02 USD per Box for the order size of 10,000 boxes.
Our EOQ is 5000:
So, first find costs associated without the offer.
Ordering Cost = (50000/5000) x 100 = 1000 USD
Carrying Cost = (5000/2) x 0.4 = 1000 USD
Total cost before accepting the offer = 1000 + 1000 = 2000 USD
Now, let's find the costs associated with offer accepted.
Ordering Cost = (50000/10000) x 100 = 500 USD
Carrying Cost = (10000/2) x 0.4 = 2000 USD
Total Cost = 2500 USD
Cost Saved from Discount = 50000 x 0.02 = 1000 USD
So, Total after accepting the offer = 2500 USD - 1000 USD
Total after accepting the offer = 1500 USD
So, the Before Tax benefit = 500 USD
The before-tax benefit of accepting the quantity discount is $15,900.
Explanation:The before-tax benefit or loss of accepting the quantity discount can be calculated by comparing the costs of ordering and carrying inventory for both scenarios: with and without the discount. Without the discount, the ordering cost for 50,000 boxes of pens is $100. The carrying cost per box is $0.40, so the carrying cost for 50,000 boxes is $20,000. With the discount, the ordering cost for 10,000 boxes of pens is $100, and the carrying cost for 10,000 boxes is $4,000. Therefore, the before-tax benefit of accepting the quantity discount would be the difference between the costs of both scenarios: ($100 + $20,000) - ($100 + $4,000) = $15,900.
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On January 1, Duffy Enterprises issued $100,000 in bonds that mature in 10 years. The bonds were issued at 104. The bonds have a stated interest rate of 8%. The bonds pay interest once per year on December 31. What is the carrying value of the bonds on the date of issue?
The carrying value of the bonds on the date of issue can be calculated using the present value formula. The formula calculates the present value of the bond's future cash flows, which include the stated interest payments and the principal repayment at maturity.
Explanation:The carrying value of the bonds on the date of issue can be calculated using the present value formula.
The formula calculates the present value of the bond's future cash flows, which include the stated interest payments and the principal repayment at maturity.
In this case, the bond has an annual interest payment of $8,000 (100,000 x 8%). S
ince the bond matures in 10 years, the total interest payments over the life of the bond would be $80,000 (8,000 x 10).
The principal repayment at maturity is the face value of the bond, which is $100,000.
To calculate the carrying value of the bond on the date of issue, we need to discount the future cash flows using the stated interest rate of 8%.
The discounting factor for each year can be calculated by dividing 1 by (1 + interest rate) raised to the power of the number of years.
Since the bond pays interest once per year on December 31, the carrying value on the date of issue is the present value of the interest payments plus the present value of the principal repayment.
itemized summary of the expected income and expenses for a defined period of time
Answer:Budget
Explanation:Budget refers to when you create a list of your proposed income and ecpenditure in order to aid decision making .
It is often estimated and can be made for a person , government or organization .
Answer:
Budget
Explanation:
An itemized summary of probable income and expenses for a given period. A budget is a plan for managing income, spending, and saving during a given period of time. The portion of personal income available for spending after taxes and basic essentials have been deducted.
Walters manufactures a specialty food product that can currently be sold for $22 per unit and has 20,000 units on hand. Alternatively, it can be further processed at a cost of $12,000 and converted into 12,000 units of Deluxe and 6,000 units of Super. The selling price of Deluxe and Super are $30 and $20, respectively. The incremental net income of processing further would be:
Answer:
$28,000
Explanation:
The computation of incremental net income is shown below:-
Deluxe = 12,000 × $30
= $ 360,000
Super = 6,000 × $20
= $120,000
Total sales value = Deluxe + Super
= $ 360,000 + $120,000
= $480,000
Deduct amount = Total sales value - Further processing cost
= $480,000 - $12,000
= $468,000
Incremental net income after further processing = Deduct amount - sales value before further processing
= $468,000 - (20,000 × $22)
= $28,000
So, for computing the incremental net income of processing further we simply applied the above formula.
Solar Innovations Corporation bought a machine at the beginning of the year at a cost of $35,000. The estimated useful life was five years and the residual value was $3,500. Assume that the estimated productive life of the machine is 10,000 units. Expected annual production for year 1, 2,000 units; year 2, 3,000 units; year 3, 2,000 units; year 4, 2,000 units; and year 5, 1,000 units.
Answer:
Refer explanation
Explanation:
1. Straight-line depreciation:
It is the simplest method of calculating depreciation and believes that the asset's value depreciates equally every year.
Depreciation per year = (Cost of asset - salvage value) / number of useful life years.
Please refer attached table one for all years depreciation.
2. Double-declining balance Method:
This is where the asset's value is depreciated at twice the rate than the straight line method. The depreciation amounts would be higher in the early years of the asset's life and gradually reduce towards the end. Hence, it does not mean that the depreciation amount would be higher than the straight line basis.
Straight Line depreciation per year = 1/5* x 100 = 20%
*as it is useful for five years
Hence double-depreciation value = 20% x 2 = 40%
It is calculated as depreciation rate x book value of asset at the beginning of the period.
Please refer attached table two for all years depreciation.
3. Activity based depreciation is whereby an asset is depreciated based on the asset’s activity such as the number of hours worked or the number of units produced, during a particular period of time. Activity based depreciation per year is calculated as:
[(Cost - Salvage value) x activity performed during the period] / Total estimated life activity of the asset
Please refer attached table three for all years depreciation.
The estimated production cost per unit can be calculated by subtracting the depreciation expense from the expected production in each year.
Explanation:The estimated productive life of the machine is 10,000 units. In year 1, the expected production is 2,000 units, in year 2 it is 3,000 units, in year 3 it is 2,000 units, in year 4 it is 2,000 units, and in year 5 it is 1,000 units. To calculate the depreciation expense for each year, we can use the formula: Depreciation expense = (Cost - Residual value) / Estimated useful life.
Depreciation expense for year 1 = ($35,000 - $3,500) / 5 = $6,700.
Similarly, we can calculate the depreciation expense for each year and subtract it from the expected production in that year to get the estimated production cost per unit.
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Crandle Manufacturers Inc. is approached by a potential customer to fulfill a oneminustimeminusonly special order for a product similar to one offered to domestic customers. The company has excess capacity. The following per unit data apply for sales to regular customers: Variable costs: Direct materials $ 130 Direct labor 100 Manufacturing support 105 Marketing costs 65 Fixed costs: Manufacturing support 185 Marketing costs 55 Total costs 640 Markup (50%) 320 Targeted selling price $ 960 What is the change in operating profits if the oneminustimeminusonly special order for 1 comma 100 units is accepted for $ 560 a unit by Crandle? A. $ 176 comma 000 decrease in operating profits B. $ 175 comma 360 increase in operating profits C. $ 176 comma 000 increase in operating profits D. $ 175 comma 360 decrease in operating profits
Answer:
C. $176000 increase in operating profits
Explanation:
Contribution margin is the ability of a company to cover its variable costs using revenue. It is calculated as selling price per unit minus variable cost per unit. The amount left covers fixed costs or is profit.
Contribution margin per unit = 560 - (130 + 100 + 105 + 65) = $160
Profit increase = $160 x 1100 units = $176000
This is profit because the company already covers it’s fixed costs selling to regular customers since it had total costs of $640 per unit and sold at $960 (with a 50% mark up).
On January 1, 20X4, Polar Corp. paid $104,000 for $100,000 par value, 9% bonds of Seal Corp. Seal had issued $300,000 of the 10-year bonds on January 1, 20X2 for $360,000. The bonds pay interest semi-annually. Polar had previously purchased 80% of the common stock of Seal on January 1, 20X1, at underlying book value. Polar reported operating income (excluding income from subsidiaries) of $50,000 and Seal reported net income of $30,000 for 20X4. Both companies use straight-line amortization. What amount of interest expense and gain/loss should be included in the 20X4 consolidated income statement
Answer:
$14,000
Explanation:
Amount of interest expense = [(Bond issued by 'S' company x 9%) - Amount of
premium x (unsold bonds / Bonds issued)]
= (300,000 x 0.09) - 60000/10 x 200,000/300,000
= (27,000 - 6000) x 0.66667
= 21,000 x 0.66667
= $14,000
For the 20X4 consolidated income statement:
Interest expense should be[tex]\$15,500.[/tex]
No gain or loss related to the bonds should be recognized.
1. Calculate the amortization of the bond premium/discount:
Seal Corp.'s Bonds:
Issued amount: $360,000
Par value: [tex]\$300,000[/tex]
Premium: [tex]\$360,000 - \$300,000 = \$60,000[/tex]
Life of bonds: [tex]10[/tex] years ([tex]20[/tex] semi-annual periods)
Annual amortization of the premium:
[tex]\[ \frac{\$60,000}{20} = \$3,000 \][/tex]
Semi-annual amortization of the premium:
[tex]\[ \frac{\$3,000}{2} = \$1,500 \][/tex]
2. Determine Seal Corp.'s interest expense:
Seal Corp. pays interest semi-annually on the par value of the bonds:
[tex]\[ \$300,000 \times 9\% = \$27,000 \] (annual interest)[/tex]
[tex]\[ \text{Semi-annual interest payment} = \$27,000 / 2 = \$13,500 \][/tex]
Adjust for the amortization of the premium:
[tex]\[ \text{Annual interest expense} = \$27,000 - \$3,000 = \$24,000 \][/tex]
[tex]\[ \text{Semi-annual interest expense} = \$13,500 - \$1,500 = \$12,000 \][/tex]
Total interest expense for 20X4:
[tex]\[ 2 \times \$12,000 = \$24,000 \][/tex]
3. Calculate Polar Corp.'s interest income:
Polar purchased [tex]\$100,000[/tex] par value bonds at [tex]\$104,000[/tex], indicating a premium of [tex]\$4,000.[/tex]
Annual amortization of Polar's premium:
[tex]\[ \frac{\$4,000}{8} = \$500 \][/tex]
Semi-annual amortization of the premium:
[tex]\[ \frac{\$500}{2} = \$250 \][/tex]
Semi-annual interest income for Polar:
[tex]\[ \$4,500 - \$250 = \$4,250 \][/tex]
Total interest income for 20X4:
[tex]\[ 2 \times \$4,250 = \$8,500 \][/tex]
4. Consolidate and eliminate intercompany transactions:
When consolidating, the intercompany interest expense and income need to be eliminated:
Seal's interest expense:
[tex]\[ \$24,000 \][/tex]
Polar's interest income:
[tex]\[ \$8,500 \][/tex]
The intercompany interest expense and income should be eliminated, so:
[tex]\[ \text{Consolidated interest expense} = \$24,000 - \$8,500 = \$15,500 \][/tex]
Gain/Loss on Bonds:
There is no gain or loss to be recognized in the consolidated income statement related to the bonds, as the purchase price and carrying amount adjustments are amortized and included in the interest expense and income calculations.
On January 1, 2018, Sauder Corporation signed a five-year noncancelable lease for equipment. The terms of the lease called for Sauder to make annual payments of $200,000 at the beginning of each year for five years beginning on January 1, 2018 with the title passing to Sauder at the end of this period. The equipment has an estimated useful life of 7 years and no salvage value. Sauder uses the straight-line method of depreciation for all of its fixed assets. Sauder accordingly accounts for this lease transaction as a finance lease. The minimum lease payments were determined to have a present value of $833,972 at an effective interest rate of 10%.
Required:
1. In 2019, Sauder should record interest expense of ___________.
In 2019, Sauder should record interest expense of $63,397.
Explanation:
The equipment has an estimated useful life of 7 years and no salvage value. Sauder uses the straight-line method of depreciation for all of its fixed assets.The minimum lease payments were determined to have a present value of $833,972 at an effective interest rate of 10%.The easiest way to calculate the record interest expense is that to multiply a debt of a company by the average interest rate of its debts.Interest expense can be considered both as liability and also an asset. These items can be taken on the balance sheet, which can be completed from the accounting software.Interest occurred, but it has not been paid as according to the balance sheet date, it is referred to as the accrued interest. An interest rate that has incurred.In 2019, Sauder should record interest expense of $63,397.Sauder Corporation should record the interest expense for 2019 as $43,397.20, which is calculated based on the adjusted principal balance after the beginning-of-year payment.
Explanation:On January 1, 2019, Sauder Corporation should record interest expense related to the finance lease. Given that the present value of the minimum lease payments at the beginning of 2018 (after the first payment) is $833,972 and the effective interest rate is 10%, the interest expense for 2019 can be calculated as follows:
The opening balance for 2018 after the first payment will be $633,972 ($833,972 - $200,000). The interest expense for 2019 is 10% of the opening balance, which is $63,397.20 (10% * $633,972). However, since the lease payment is made at the beginning of the year, the principal portion for the 2019 payment needs to be subtracted to get the opening balance for 2019.
After the payment made at the beginning of 2019, the principal will reduce by $200,000, leading to an adjusted principal balance of $433,972 ($633,972 - $200,000). Therefore, the interest expense for 2020 will be 10% of this new balance, which amounts to $43,397.20 (10% * $433,972).
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Suppose that nominal GDP was $9250000.00 in 2005 in Orange County California. In 2015, nominal GDP was $11750000.00 in Orange County California. The price level rose 2.50% between 2005 and 2015, and population growth was 4.25%. Calculate the following figures for Orange County California between 2005 and 2015. Give all answers to two decimals. a. Nominal GDP growth was %. Part 2 (1 point)FeedbackS Hit by. Economic growth was %.
The nominal GDP growth rate, reflecting the percentage change in nominal GDP from 2005 to 2015, is 27.02%. This growth signifies the increase in the economy's production of goods and services during the period.
The nominal GDP growth rate measures the percentage change in nominal GDP from one year to the next. For the period between 2005 and 2015:
Nominal GDP in 2005 was $9,250,000, and in 2015, it rose to $11,750,000.
The rise in the price level over the same period was 2.50%, and the population growth rate was 4.25%.
To calculate the nominal GDP growth rate:
[tex]\[ \text{Nominal GDP growth rate} = \left( \frac{\text{Nominal GDP in 2015} - \text{Nominal GDP in 2005}}{\text{Nominal GDP in 2005}} \right) \times 100 \][/tex]
Substituting the values:
[tex]\[ \text{Nominal GDP growth rate} = \left( \frac{11,750,000 - 9,250,000}{9,250,000} \right) \times 100 = 27.02\% \][/tex]
The economic growth rate, which represents the change in the economy's production of goods and services, is also calculated as 27.02% using the formula:
[tex]\[ \text{Economic growth rate} = \left( \frac{\text{Nominal GDP in 2015}}{\text{Nominal GDP in 2005}} - 1 \right) \times 100 \][/tex]
Both rates indicate a 27.02% growth in the economy over the specified period.
The manufacturing overhead budget at Polich Corporation is based on budgeted direct labor-hours. The direct labor budget indicates that 9,700 direct labor-hours will be required in February. The variable overhead rate is $8.30 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $137,740 per month, which includes depreciation of $18,140. All other fixed manufacturing overhead costs represent current cash flows. The February cash disbursements for manufacturing overhead on the manufacturing overhead budget should be:
Answer:
190,390
Explanation:
Budgeted direct labor-hours 9,400
Variable manufacturing overhead rate $ 8.60
Variable manufacturing overhead $ 80,840
Fixed manufacturing overhead 127,840
Total manufacturing overhead 208,680
Less depreciation 18,290
Cash disbursement for manufacturing overhead $ 190,390
Moreno Company Comparative Income Statement For the Years Ended December 31, 20-- 1 Current Year Previous Year
2Sales $1,120,000.00 $1,000,000.00
3 Cost of goods sold 971,250.00 875,000.00
4 Gross profit $148,750.00 $125,000.00
5 Selling expenses $71,250.00 $62,500.00
6 Administrative expenses 56,000.00 50,000.00
7 Total operating expenses $127,250.00 $112,500.00
8 Income before income tax $21,500.00 $12,500.00
9 Income tax expense 8,000.00 5,000.00
10 Net income $13,500.00 $7,500.00
Required: A. Prepare a comparative income statement with horizontal analysis for the two-year period, indicating the increase (decrease) for the current year when compared with the previous year. Use the minus sign to indicate an amount or percent decrease. If required, round percentages to one decimal place. B. What conclusions can be drawn from the horizontal analysis?
Answer:
Moreno Company
Comparative Income Statement
For the Years Ended December 31, 20-- 1
Amount %
Current Year Previous Year Increase Increase
(Decrease) (Decrease)
(1) (2) 3= (1-2) 3/2*100
Sales $1,120,000 $1,000,000 120,000 12%
Cost of goods sold 971,250 875,000 96,250 11%
Gross profit $148,750 $125,000 23,750 19%
Selling expenses $71,250 $62,500 8750 14 %
Administrative expenses56,000 50,000 6000 12%
Total operating expenses$127,250 $112,500 14,750 13.11%
Income before income tax $21,500 $12,500 9000 72%
Income tax expense 8,000 5,000 3000 60%
Net income $13,500 $7,500 6000 80%
The sales have increased 12 and so has the gross profit by 19% which shows a good advance.
Net income has increased by 80% which is good progress.
The operating expenses have increased more than sales which should be controlled.
Barnes Enterprises has bonds on the market making annual payments, with 14 years to maturity, a par value of $1,000, and a price of $958. At this price, the bonds yield 8.9 percent. What must the coupon rate be on the bonds
Answer:
8.36%
Explanation:
To find out the coupon rate, first we have to determine the PMT which is shown in the attachment below:
Given that,
Present value = $958
Future value = $1,000
Rate of interest = 8.9%
NPER = 14 years
The formula is shown below:
= PMT(Rate;NPER;-PV;FV;type)
The present value come in negative
So, after solving this, the yearly payment is $83.64
Now the coupon rate is
= $83.64 ÷ $1,000
= 8.36%
In an appraisal interview, the rating manager should never ________. take any responsibility for an employee's performance assist the employee in setting goals refuse to take some responsibility for an employee's performance if the supervisor neglected to provide regular performance feedback refuse to discuss negative employee performance as a defense against a possible lawsuit
Answer:
The correct answer is letter "C": refuse to take some responsibility for an employee's performance if the supervisor neglected to provide regular performance feedback.
Explanation:
Performance appraisals are evaluations managers make of employees to find out if they are meeting the expectations of their duties. These tests aim to measure the efficiency of employees in their day-to-day activities at work, The appraisals have a standard method of rating workers according to their tasks and position in the firm and based on that standard feedback is provided.
Supervisors are in charge of giving workers immediate suggestions on how workers could improve their operations but if they have not done that resulting in poor performance of an employee, the managers conducting the tests must accept part of the responsibility for that to happen relies on the managers.
Maxwell Mining Company's ore reserves are being depleted, so its sales are falling. Also, because its pit is getting deeper each year, its costs are rising. As a result, the company's earnings and dividends are declining at the constant rate of 10% per year. If D0 = $6 and rs = 15%, what is the value of Maxwell Mining's stock? Round your answer to the nearest cent.
Answer:
The current value of stock is $21.60 per share.
Explanation:
The current value of the stock whose dividends are growing/declining at a constant rate can be calculated using the constant growth model of DDM.
The growth will be taken as a negative percentage in case the growth rate is falling. So, g will be g= -0.1 or -10%. The formula for price under this model is,
P0 = D0 * (1+g) / ( r - g)
Where,
D0 * (1+g) is the dividend expected for the next period or D1r is the required rate of returng is the growth rateTaking g as -0.1.
P0 = 6 ( 1 - 0.1) / (0.15 + 0.1)
P0 = $ 21.60
To find the value of Maxwell Mining Company's stock, we can calculate the present value of its future earnings and dividends by using the present value formula. The stock price per share is approximately $256,500.
Explanation:To find the value of Maxwell Mining Company's stock, we need to calculate the present value of its future earnings and dividends. Given that D0 (current dividend) is $6 and rs (required rate of return) is 15%, we can use the present value formula to determine the stock value. Assuming the constant decline in earnings and dividends at a rate of 10% per year, we can calculate the present value of total profits and divide it by the number of shares to arrive at the price per share. In this case, the price per share should be approximately $256,500.
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