Answer:
2.50%; 15%
Explanation:
Profit margin = (Net income ÷ sales) × 100
= ($10,000 ÷ $400,000) × 100
= 2.50%
Total long-term debt to total assets ratio = 40%
So,
= Total equity ÷ Total assets
= 60%
Equity multiplier = Total assets ÷ Total equity
= 1.66667
ROA = 9%
ROE (return on equity):
= (Profit margin × Total assets turnover) × Equity multiplier
= ROA × Equity multiplier
= 9% × 1.66667
= 15%
Final answer:
The profit margin of XYZ Corporation is 0.0250. To find it, divide the net income of $10,000 by the total sales of $400,000. Similarly, a firm's accounting profit with a sales revenue of $1 million and various costs would be $50,000.
Explanation:
To calculate the profit margin of XYZ Corporation, we divide its net income by its total sales. The profit margin formula is: Profit Margin = (Net Income / Total Sales).
In this case, XYZ Corporation's net income is $10,000 and its total sales are $400,000. Therefore, the profit margin would be calculated as follows: Profit Margin = ($10,000 / $400,000) = 0.025. So, the profit margin, when entered correctly as a decimal, is 0.0250.
For the self-check question regarding the firm with sales revenue of $1 million, the accounting profit is found by subtracting the total costs (labor, capital, and materials) from the sales revenue. The firm's accounting profit would be: $1 million - ($600,000 + $150,000 + $200,000) = $1 million - $950,000 = $50,000.
Action Aaron McKinney is a cost accountant for Majik Systems Inc. Martin Dodd, vice president of marketing, has asked Aaron to meet with representatives of Majik Systems’ major competitor to discuss product cost data. Martin indicates that the sharing of these data will enable Majik Systems to determine a fair and equitable price for its products. Would it be ethical for Aaron to attend the meeting and share the relevant cost data? Why or why not?
Answer:It will not be ethical for Aaron to attend the meeting and share relevant cost data
Explanation:
Sharing of the relevant cost data will enable the competitor to have a good idea of what goes into Aaron production and it's pricing policy which may be use to the advantages of the competitor.
Furthermore there is no law that protect a firm from his competitor abuse of information obtain through mutual consent.
Sharing cost data with a competitor would be unethical and potentially illegal. Aaron should decline the invitation and communicate the concerns to his superiors.
Explanation:It would not be ethical for Aaron to attend the meeting and share the relevant cost data. As a cost accountant, Aaron has a responsibility to his company and its customers to keep sensitive information confidential. Sharing proprietary cost data with a competitor could harm his company's competitive advantage and violate confidentiality agreements.
Furthermore, sharing cost data with a competitor could be seen as anti-competitive behavior and may even be illegal under antitrust laws. Companies are expected to compete fairly and independently determine their prices based on their own cost structures.
Aaron should decline the invitation and communicate the potential ethical and legal concerns to his superiors. He could suggest exploring other strategies for determining a fair and equitable price, such as market research, customer feedback, or benchmarking against industry standards.
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Allen Boating Company manufactures special metallic materials and decorative fittings for luxury yachts that require highly skilled labor. Allen uses standard costs to prepare its flexible budget. For the first quarter of the year, direct materials and direct labor standards for one of their popular products were as follows: Direct materials: 2 pound per unit; $ 12 per pound Direct labor: 2 hours per unit; $ 19 per hour Allen produced 3 comma 000 units during the quarter. At the end of the quarter, an examination of the direct materials records showed that the company used 6 comma 500 pounds of direct materials and actual total materials costs were $ 99 comma 900. What is the direct materials efficiency variance?
Answer:
42,000 unfavorable
Explanation:
The computation of the direct materials efficiency variance is shown below:
= (Actual quantity - Standard quantity) × standard price
= (6,500 pounds - 3,000 pounds) × $12 per pound
= 3,500 pounds × $12 per pound
= 42,000 unfavorable
Since the standard quantity is less than the actual quantity so the direct material efficiency variance would come unfavorable
All other information which is given is not relevant. Hence, ignored it
A firm in a competitive industry has a total cost function of TC = 0.2 Q2 – 5Q + 30, whosecorresponding marginal cost curve is MC=0.4Q – 5. If the firm faces a price of 6,
a)what quantity should it sell? (10 points)
b)What profit does the firm make at this price? (10 points)
c)Should the firm shut down? (10 points)
Answer:
Consider the following calculations
Explanation:
TC=0.2Q2 - 5Q + 30,
MC=0.4Q - 5.
Equilibrium condition
MC=P
0.4Q - 5 = 6
0.4Q = 11
Q = 11/.4
=27.5
Profit = TR - TC
=27.5*6 - .2(27.5)2 -5(27.5)+30
=165 -756.25 -137.5 +30
= - 698.5
Firm is incurring loss
Firm will continue to produce as long as it is able to recover AVC
AVC =0.2Q -5
=0.2(27.5) -5
=5.5 -5
=0.5
Hence firm will continue to produce
Final answer:
The firm should sell 27.5 units to maximize profit at the given price of $6. It would make a profit of approximately $121.25. Since the firm is profitable, it should not consider shutting down.
Explanation:
To determine the profit-maximizing level of output for a firm in a competitive industry, we equate the marginal cost (MC) to the price (P), since a profit-maximizing firm will produce up to the point where MC = P.
a) Quantity Sold: Given the firm's MC = 0.4Q - 5, and the market price P = 6, we set MC equal to P:
0.4Q - 5 = 6
0.4Q = 11
Q = 11 / 0.4
Q = 27.5 units (rounded to two decimal places)
The firm should sell 27.5 units.
b) Profit Calculation: Profit (π) is the total revenue (TR) minus total cost (TC). The TR can be calculated as P × Q, and TC from the given function TC = 0.2Q2 – 5Q + 30.
TR = 6 × 27.5 = 165
TC = 0.2 × (27.5)^2 – 5 × 27.5 + 30
TC = 0.2 × 756.25 – 137.5 + 30
TC ≈ 151.25 – 137.5 + 30
TC ≈ 43.75
π = TR – TC = 165 – 43.75 = 121.25
The firm makes a profit of approximately $121.25.
c) Shut Down Decision: A firm should shut down if the price it receives is less than the average variable cost (AVC), since it cannot cover its variable costs. The directly obtained AVC from the TC function is not given. We can analyze using the provided TC to infer AVC, or simplify and say since the firm is making profits, it should not shut down.
Considering the profit calculated above, the firm should not shut down.
Pratte Boat Wash's cost formula for its cleaning equipment and supplies is $2,530 per month plus $44 per boat. For the month of April, the company planned for activity of 58 boats, but the actual level of activity was 12 boats. The actual cleaning equipment and supplies for the month was $3,160. The spending variance for cleaning equipment and supplies in April would be closest to:_________.
Answer:
$102 unfavorable
Explanation:
The computation of the spending variance is shown below:
= Actual supplies cost - expected supplies cost
where
Actual supplies cost is $3,160
And, the flexible supplies cost would be
= Actual level of activity × price per boat + supplies cost per month
= 12 boats ×$44 + $ 2,530
= $528 + $ 2,530
= $3,058
Now put these values to the above formula
So, the value would equal to
= $3,160 - $3,058
= $102 unfavorable
= $11,389
Now put these values to the above formula
So, the value would equal to
= $11,700 - $11,389
= $311 unfavorable
David and Darlene Jasper have one child, Sam, who is 6 years old (birthdate July 1, 2012). The Jaspers reside at 4639 Honeysuckle Lane, Los Angeles, CA 90248. David's Social Security number is 577-11-3311, Darlene's is 477-98-4731, and Sam's is 589-22-1142. David's birthdate is May 29, 1985 and Darlene's birthday is January 31, 1987. David and Darlene's earnings and withholdings for 2018 are:
The student needs assistance with a tax-related issue for the Jasper family, but further details are required to provide a specific and concise response.
Explanation:The student appears to be asking for help with tax-related information for the Jasper family. To answer the question accurately, we would need more information about what is specifically being asked. Are they looking for help in filing their taxes, understanding tax law, or calculating their tax refund or liability? The mention of earnings and withholdings for 2018 suggests this could be an accounting or tax preparation exercise. Clear instructions are necessary to provide a complete and factual response.
we are provided with information about the Jaspers' personal details and earnings. However, there is no specific question asked related to this information. It seems like this information is provided for reference purposes, possibly for a business or financial analysis.
Therefore, the grade of this question is High School.
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Constanza, who is single, sells her current personal residence (adjusted basis of $213,000) for $596,400. She has owned and lived in the house for 30 years. Her selling expenses are $29,820. What is Constanza’s realized and recognized gain? Constanza’s realized gain is $_________ and her recognized gain would be___________?
Answer:
Realized gain = $353,580.
Recognized gain = $103,580
Explanation:
Data provided in the question:
Sales = $596,400
Adjusted basis = $213,000
Selling expenses = $29,820
Now,
Amount realized = Sales - Selling expense
= $596,400 - $29,820
= $566,580
Realized gain = Amount realized - Adjusted basis
= $566,580 - $213,000
= $353,580
Recognized gain = Realized gain - Exclusions
also,
since Constanza is single her exclusion will be $250,000
Hence,
Recognized gain = $353,580 - $250,000
= $103,580
An indication that the customer has not taken control of the good or service is...(a)the selling company has right to payment for the good or service.(b)the customer has physical possession of the asset.(c)the customer has no significant risks or rewards of ownership.(d)the selling company has transferred legal title to the asset.
Answer:The answer is (a) The selling company has the right to payment for the good or service
Explanation:
The contract for the sale of goods can be defined as an agreement between the buyer and the seller in which the seller agree to sell the goods to the buyer in exchange for value known as money..in sale of goods contract, there are two terms that goes to the fundamental of the contract for the sale of goods which are sale and agreement to sale.
Sale can be defined as the situation whereby the seller has agree to sell the goods to the buyer in exchange for value known as money and the buyer has actually made payment for the goods. In this case the ownership of the goods has passed from the seller to the buyer. On the other hand, agreement to sale is when the seller has agreed to sell the goods to the buyer in exchange for money but the buyer has not actually made payment, in this case the ownership of the goods still reside with the seller of the goods.
The ownership of the goods however will be passed to the buyer at a future date or at a time in which the conditions that goes with the contract between the buyer and the seller has been fulfilled. The basis of the contract for the sale of goods is the ownership of the goods bought by the buyer from the seller. In the contract the seller has the legal right to sue the buyer for the price when the ownership of the goods passes to the buyer.
January 1, Edison Corporation had 1,000,000 shares of $10 par value common stock outstanding. On March 31, the company declared a 20% stock dividend. Market value of the stock was $18/share. As a result of this event,A. Edison's Paid-in Capital in Excess of Par account increased $1,600,000.B. Edison's total stockholders' equity was unaffected.C. Edison's Stock Dividends account increased $3,600,000.D. All of these answers are correct.
Answer:
D All of these answers are correct.
Explanation:
Given that the corporation had 1,000,000 shares of $10 par value common stock outstanding. On March 31, the company declared a 20% stock dividend. Market value of the stock was $18/share. As a result of this event
Paid-in Capital in Excess of Par = 1000000*20%*(18-10) = 1600000
Stock dividend = 1000000*20%*18= 3600000
Edison's total stockholders' equity was unaffected because increase in Stock dividend leads to decrease in retained earnings by the same amount.
Answer is option D All of these answers are correct.
Jiu has $105,000 of losses from a real estate rental activity in which she actively participates. She has other rental income of $25,000 and other passive activity income of $32,000. Her AGI before considering these items of income and loss is $95,000.Does she have any suspended losses to carry over? Explain.
Jiu may have $23,000 in suspended losses to carry over to future years. She can offset $57,000 of her $105,000 real estate rental activity loss with her passive activity income and potentially deduct an additional $25,000 of the loss against her AGI of $95,000, due to IRS allowance for rental real estate losses.
Explanation:The question pertains to whether Jiu has any suspended losses to carry over after accounting for rental activity losses, additional rental income, other passive activity income, and her adjusted gross income (AGI). Suspended losses are losses from passive activities that exceed income from passive activities and cannot be deducted in the current year, but can be carried forward to future tax years.
Jiu's real estate rental activity loss is $105,000. She actively participates in this activity, which allows her to offset this loss against her passive activity income ($25,000 from other rental income and $32,000 from additional passive activity income), totaling $57,000.
After applying the passive activity income ($57,000) against the rental activity loss ($105,000), Jiu would be left with $48,000 ($105,000 - $57,000) in losses that cannot be currently deducted. Considering her AGI of $95,000, which is before considering these items of income and loss, the nondeductible portion depends on additional tax rules that apply to losses from passive activities and her income level.
However, the IRS allows up to $25,000 in rental losses to be deducted if the taxpayer's modified AGI is $100,000 or less, with the deduction phaseout starting at an AGI of $100,000 and completely phasing out at $150,000. Since Jiu's AGI is $95,000, she can deduct $25,000 of the loss, potentially reducing the suspended loss to $23,000 ($48,000 - $25,000). The remaining loss may be carried over to future years.
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Jiu has $23,000 suspended losses to carry over after offsetting $25,000 special allowance and $57,000 passive income.
To determine if Jiu has any suspended losses to carry over, we need to consider the passive activity loss (PAL) rules under the Internal Revenue Code. Passive activity losses can only offset passive activity income unless certain exceptions apply.
Jiu's scenario is as follows:
- Real estate rental activity loss: $105,000
- Other rental income: $25,000
- Other passive activity income: $32,000
- Adjusted Gross Income (AGI) before considering these items: $95,000
Step-by-Step Analysis:
1. Calculate Total Passive Activity Income:
- Other rental income: $25,000
- Other passive activity income: $32,000
- Total passive activity income: $25,000 + $32,000 = $57,000
2. Offset Losses Against Passive Income:
- Jiu can use her passive activity income to offset her passive activity losses.
- Loss from real estate rental activity: $105,000
- Passive activity income available to offset this loss: $57,000
Therefore, $105,000 (loss) - $57,000 (income) = $48,000 (remaining loss)
3. Special Allowance for Real Estate Activities:
- The IRS allows an exception for real estate professionals and those who actively participate in rental real estate activities, permitting them to offset up to $25,000 of real estate losses against non-passive income if their AGI is $100,000 or less. This allowance phases out between $100,000 and $150,000 AGI.
- Jiu's AGI before considering these items is $95,000, so she qualifies for the full $25,000 special allowance.
Therefore, from the remaining $48,000 loss:
- Special allowance: $25,000
Remaining loss after special allowance: $48,000 - $25,000 = $23,000
Conclusion:
Jiu has $23,000 of suspended passive activity losses to carry over to future years because she has utilized $25,000 against the special allowance and $57,000 against passive income.
Summary in 20 words:
Jiu has $23,000 suspended losses to carry over after offsetting $25,000 special allowance and $57,000 passive income against $105,000 loss.
On January 1, 2019, Ellen Greene Company makes the following acquisition.
Purchases land having a fair value of $200,000 by issuing a 5-year, zero-interest-bearing promissory note in the face amount of $337,012.
On December 31, 2019, how much interest expense should be recognized on the zero-interest-bearing promissory note? (Hint: First solve for the implied interest rate) Round your final answer to the nearest dollar.
Answer:
The interest expense should be recognized on the zero-interest-bearing promissory note is 22.000
Explanation:
Interest expense = (Fair value of the land * Interest rate)
Supposing a interest rate of 11% we get:
Interest expense = 200.000 * 11% = 22.000
The interest expense that should be recognized on the zero-interest-bearing promissory note will be $22000.
From the complete question, the land that was purchased have a fair value of $200,000 and the company has to pay 11% interest for funds from its bank.
Therefore, the interest will be calculated thus:
= Interest rate × Fair value
= 11% × $200,000
= 0.11 × $200,000
= $22000.
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Crane Companyplanned to use 1 yard of plastic per unit budgeted at $91 a yard. However, the plastic actually cost $90 per yard. The company actually made 4100 units, although it had planned to make only 3300 units. Total yards used for production were 4160. How much is the total materials variance?
Answer:
$1300 U
Explanation:
Budgeted cost of plastic per yard = $91
Actual cost of the plastic per yard = $90
Actual units made = 4100
Budgeted units to be made = 3300
Actual plastic used = 4160 yards
Now,
Materials quantity variance
= ( Budgeted material - Actual material ) × Actual cost
= ( 1 × 4100 - 4160 ) × $90
= -$5,400 [Here negative sign means unfavorable ]
Materials price variance = ( Budgeted cost - Actual cost ) × Actual units
= ( $91 - $90 ) × 4100
= $4100
Therefore,
Total material variance = $4,100 - $5,400
= - $1,300
i.e $1300 U
State whether each of the following events will result in a movement along the market demand curve for labor in electronics factories in China or whether it will cause the market demand curve for labor to shift. If the demand curve shifts, indicate whether it will shift to the left or to the right and draw a graph to illustrate the shift.
The wage rate declines.
b. The price of televisions declines.
c. Several firms exit the TV market in China.
d. Chinese high schools introduce new vocational courses in assembling electronic products
Final answer:
The decline in wage rate results in movement along the demand curve for labor. The decrease in the price of televisions and the exit of several firms from the TV market in China cause the demand curve for labor to shift to the left. New vocational courses could potentially shift the demand curve for labor to the right.
Explanation:
When analyzing shifts in the market demand curve for labor in electronics factories in China, different factors will have distinct impacts. Below are the analyzed scenarios:
The wage rate declines: This will result in a movement along the existing demand curve for labor, as it reflects a change in the quantity of labor demanded at a lower wage rate, rather than a shift in the overall demand for labor.The price of televisions declines: This will likely cause the demand curve for labor to shift to the left, since lower prices for televisions could reduce producers' revenue and, consequently, the number of workers they can afford to hire.Several firms exit the TV market in China: This would also typically result in a shift to the left of the labor demand curve because there would be fewer firms demanding labor.Chinese high schools introduce new vocational courses in assembling electronic products: This could potentially shift the labor demand curve to the right as it might increase the productivity of the labor force, making workers more valuable to employers.Rivoli Inc. hired you as a consultant to help estimate its cost of capital. You have been provided with the following data: D0 = $0.80; P0 = $22.50; and g = 8.00% (constant). Based on the DCF approach, what is the cost of equity from retained earnings?
Answer:
Cost of equity from retained earning is 11.84 %
Explanation:
We have given dividend [tex]D_0=$0.80[/tex]
Price at the beginning [tex]P_0=$22.50[/tex]
Growth rate g = 8 %
We have to find the cost of equity from retained earning
Now dividend at the end of year [tex]D_1[/tex] = $0.80×1.08 = 0.864
We know that cost of equity is given by
[tex]Ke=\frac{D_1}{P_O}+g=\frac{0.864}{22.50}+0.08=0.1184=11.84%[/tex]
So cost of equity from retained earning is 11.84 %
Commercial paper is very popular with many firms because Multiple Choice it can usually be issued below the prime rate. there are no required lines of credit at the bank. it satisfies the firm's need for long-term funds. it is very simple to roll over (refinance) in times of economic turmoil.
Answer:There are no required line of credit at the bank.
It's very simple to roll over(refinance) in times of economic turmoil.
Explanation:
A commercial paper is issued by banks or large companies to finance short term requirements like working capital.
It does not require having a line of credit credit with the bank and can be easily rollover.
However it's rate are normally higher than prevailing prime rate since non financial institutions are involved and it's usually for a short period.
Assume the Residential Division of Kipper Faucets had the following results last year Net sales revenue Operating income Average total assets Management's target rate of return What is the division's ROI? $ 18,700,000 7,480,000 5,500,000 18% A. 13696 B. 40% С. 74% D. 340%
Answer:
What is the division's ROI? A. 136%Explanation:
The ROI (Return on Investment), it's a financial ratio that measure the benefit that an investor will receive in relation to their investment cost.
It's determined by the Operating Income / Average Total Assets =
$7,480,000 / $5,500,000 = 136%
Final answer:
The ROI for the Residential Division of Kipper Faucets is A. 136.36%.
Explanation:
The ROI (Return on Investment) for the Residential Division of Kipper Faucets can be calculated by dividing the Operating income by the Average total assets and multiplying by 100 to get the percentage. So, in this case, the calculation is:
ROI = (Operating income / Average total assets) x 100
= (7,480,000 / 5,500,000) x 100
= 136.36%
Therefore, the division's ROI is 136.36%. Option A, 136.96, is incorrect as it does not represent a percentage.
On October 1, 2019, Westfield Company sold machinery to a customer for $21,000. The customer could not pay at the time of sale, but agreed to pay 10 months later, and signed a 10-month note at 12% interest. How much interest revenue was earned during 2019? Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.
Answer:
$630
Explanation:
The computation of the interest revenue is shown below:
= Principal × rate of interest × number of months ÷ (total number of months in a year)
= $21,000 × 12% × (3 months ÷ 12 months)
= $630
The three month is computed from October 1 to December 31. We assume the books are closed on December 31
We simply apply the simple interest formula, So that the correct value of interest can be computed
Hence, all the things are considered for the computation part.
2. Introduction to the foreign-currency exchange market In an open economy, why is the supply curve for dollars in the foreign-currency exchange market vertical? Net capital outflow equals net exports. Net capital outflow is determined by real GDP, not the real exchange rate. Net capital outflow is determined by the real interest rate, not the real exchange rate. Net capital outflow is extremely sensitive to small changes in the real exchange rate.
Answer:
The answer is Net capital outflow is determined by the real interest rate, not the real exchange rate.
Explanation:
Because the difference between imports and exports must be the same difference between purhcases and sale of foreign capital. The supply curve is vertical because the amount of dollars supplied for net capital outflow is not related to the real exchange rate.
The level will be determined by the real interest rate in the market for loanable funds.
In an open economy, the supply curve for dollars in the foreign-currency exchange market is vertical because net capital outflow is extremely sensitive to small changes in the real exchange rate.
The subject of this question is Economics at the College level. In an open economy, the supply curve for dollars in the foreign-currency exchange market is vertical because net capital outflow is extremely sensitive to small changes in the real exchange rate.
Net capital outflow refers to the difference between capital outflows and capital inflows. It is determined by the real interest rate, which affects the demand for domestic and foreign assets. When the real exchange rate changes, it affects the relative prices of foreign and domestic goods, leading to changes in net capital outflow.
Therefore, small changes in the real exchange rate can have a significant impact on net capital outflow, causing the supply curve for dollars to be vertical in the foreign-currency exchange market.
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Wilson's has 10,000 shares of common stock outstanding at a market price of $35 a share. The firm also has a bond issue outstanding with a total face value of $250,000 which is selling for 102 percent of face value. The cost of equity is 11 percent while the preminus tax cost of debt is 8 percent. The firm has a beta of 1.1 and a tax rate of 34 percent. What is Wilson's weighted average cost of capital?
Answer:
8.62%
Explanation:
Weighted average cost of capital is WACC.
First, find the market values of equity and debt
Market value of equity = 10,000*35 = 350,000
Market values of Debt = 250,000
WACC formula is ;
WACC= wE*rE + wD*rD(1-tax)
whereby,
wE = weight of equity = 350,000/(350,000+250,000) = 0.5833
rE = Cost of equity = 11% or 0.11 as a decimal
wD = weight of debt = 250,000/(350,000+250,000) = 0.4167
rD = pretax cost of debt = 8% or 0.08 as a decimal
tax = 34%
So, WACC = (0.5833*0.11) + [ 0.4167 *0.08(1-0.34) ]
WACC = 0.0642 + 0.02200
= 0.0862
Therefore, weighted average cost of capital (WACC)= 8.62%
In long-run equilibrium, all firms in the industry earn zero economic profit. Why is this true? All firms in perfectly competitive industries earn zero economic profit in the long run because A. firms are price takers, maximizing profit by producing where total revenue equals total cost. B. if profit were positive, then firms would produce more, increasing price, and if profit were negative, then firms would produce less, decreasing price. C. firms are price takers, maximizing profit by producing where price equals marginal cost. D. if profit were positive, then firms would enter, decreasing price, and if profit were negative, then firms would exit, increasing price. E. barriers to entry and exit prevent firms from earning positive or negative economic profit.
Answer:
D. if profit were positive, then firms would enter, decreasing price, and if profit were negative, then firms would exit, increasing price.
Explanation:
Perfectly competitive firms are price takers, hence they cannot influence the price of their products.
Perfectly competitive industries have no barriers to entry or exist of firms ,so if in the short run, firms are earning economic profit, then firms would enter into the industry , decreasing price, and if profit were negative, then firms would exit, increasing price. This makes perfect competitive firms to earn zero economic profit in the long run.
Which of the following probably occurred as the U.S. economy experienced increasing real GDP in 1954? Check all that apply.
Car sales declined.
Total real income increased.
The unemployment rate declined.
Corporate profits increased.
All optionsTotal real income increased.probably occurred as the U.S. economy experienced increasing real GDP in 1954
When the economy grows and real GDP rises, overall income tends to increase as more goods and services are produced, leading to higher wages and earnings.
Economic growth typically leads to job creation, as businesses expand production and hire more workers, reducing unemployment.
Corporate profits increased: With a growing economy, businesses often experience higher demand for their products and services, which generally leads to increased profits.
Prepare the issuer's journal entry for each of the following separate transactions.
On March 1, Atlantic Co. issues 49,500 shares of $4 par value common stock for $318,500 cash.
On April 1, OP Co. issues no-par value common stock for $84,000 cash.
On April 6, MPG issues 3,400 shares of $20 par value common stock for $53,000 of inventory, $150,000 of machinery, and acceptance of a $103,000 note payable.
Answer:
See the explanation section
Explanation:
1. March 1
Debit Cash $318,500
Credit Common Stock (49,500 x $4 par value) = $198,000
Credit Additional paid-in capital $120,500
Since, the company issues 49,500 shares with an excess of par value, an additional paid-in capital account will be a credit. It can be calculated = $(318,500 - 198,000) or, [$(318,500/49,500) - $4]*49,500.
In both the cases, the additional capital is $120,500.
2. April 1
Debit Cash $84,000
Credit Common Stock $84,000
There will be no additional capital as the firm issues the same number of stock with no-par value.
3. April 6
Debit Inventory $53,000
Debit Machinery $150,000
Credit Note payable $103,000
Credit Common Stock (3,400 x $20) $68,000
Credit Additional paid-in capital $32,000
Since the company issues common stock for inventory and machinery, those should be debited. The company also accepts a notes payable to issue the common stock so that the note payable is credit. And the balancing amount will be additional paid-in capital.
When a company issues shares, it records a debit to the assets received and credits the stock account for the par value of the shares, and the excess amount is credited to Paid-In Capital in Excess of Par value, Common Stock. The above entries demonstrate the process for Atlantic Co., OP Co., and MPG based on the respective scenarios.
Explanation:The subject of this question is business, specifically accounting. When a company issues stock, it records a journal entry. Here are the entries:
Atlantic Co. on March 1: Debit Cash $318,500, Credit Common Stock $198,000 (49,500 shares x $4 par value), Credit Paid-In Capital in Excess of Par Value, Common Stock $120,500 ($318,500 - $198,000),For OP Co. on April 1: Debit Cash $84,000, credit Common Stock $84,000 (since there's no par value specified),For MPG on April 6: Debit Inventory $53,000, Debit Machinery $150,000, Debit Notes Payable $103,000, Credit Common Stock $68,000 (3,400 shares x $20 par value), Credit Paid-In Capital in Excess of Par Value, Common Stock $238,000 ($306,000 - $68,000), These entries demonstrate how to recognize the issuance of common stock. The exact names for the accounts might vary depending on the company's choice, but the concepts remain the same.Learn more about Issuing Shares here:https://brainly.com/question/31391322
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Kando Company incurs a $11.00 per unit cost for Product A, which it currently manufactures and sells for $13.50 per unit. Instead of manufacturing and selling this product, the company can purchase it for $6.00 per unit and sell it for $11.30 per unit. If it does so, unit sales would remain unchanged and $6.00 of the $11.00 per unit costs of Product A would be eliminated.
1. Prepare Incremental cost analysis. Should the company continue to manufacture Product A or purchase it for resale? (Round your answers to 2 decimal places.)
In the format below:
Manufacture A Purchase Product B
sales
costs
aviodable cost
unavoidable costs
cost to purchase
totals costs
sales
The company should...
Manufacture A:
- Sales: $13.50 per unit
- Costs: $11.00 per unit
- Avoidable costs: $6.00 per unit
- Unavoidable costs: $5.00 per unit ([$11.00 - $6.00] per unit)
- Total costs: $11.00 per unit
Purchase Product B for Resale:
- Sales: $11.30 per unit
- Cost to purchase: $6.00 per unit
- Total costs: $6.00 per unit
The company should purchase Product B for resale rather than manufacturing Product A, as the total cost per unit for Product B is lower compared to the total cost per unit for manufacturing Product A.
Explanation:The incremental cost analysis compares the costs and revenues associated with manufacturing Product A against purchasing and reselling Product B. For manufacturing Product A, the sales price is $13.50 per unit, with a cost of $11.00 per unit. However, $6.00 per unit of these costs can be avoided, leaving $5.00 per unit as unavoidable costs. Thus, the total cost of manufacturing Product A remains at $11.00 per unit.
On the other hand, purchasing Product B for resale incurs a cost of $6.00 per unit but allows sales at $11.30 per unit. In this scenario, the total cost per unit for Product B is $6.00, which is lower than the $11.00 total cost per unit for manufacturing Product A. As a result, opting to purchase Product B for resale would be more beneficial for Kando Company, offering a lower total cost per unit and potentially increasing overall profitability compared to manufacturing Product A.
Universal Exports Inc. has a very attractive credit policy, and none of its customers pays in cash when the firm makes a sale. Universal Exports Inc. sells to its customers on credit terms of 3/10, net 30. If a customer bought $100,000 worth of goods and paid the firm cash eight days after the sale, how much cash would Universal Exports Inc. get from the customer? $92,500 $90,000 $97,000 $85,000 If the customer paid off the account after 15 days, Universal Exports Inc. would receive . Approximately 35% of Universal Exports Inc.’s customers take advantage of the discount and pay on the 10th day. The remaining 65% take an average of 35 days to pay off their accounts. What is Universal Exports Inc.’s days sales outstanding (DSO), or the average collection period? 23.63 days 26.25 days 24.94 days 31.50 days
Answer:
$97,000 ; 26.25 days
Explanation:
The computations are shown below:
1. The cash collected would be
= Sale value of goods × (1 - discount rate)
= $100,000 × (1 - 3%)
= $100,000 × 0.97
= $97,000
2. The days sales outstanding would be
= Number of days for advantage × advantage percentage + remaining percentage × average days to pay off their accounts
= 10 days × 35% + (1 - 0.35) × 35 days
= 3.5 days + 22.75 days
= 26.25 days
A senator renounces his past support for protectionism: "The U.S. trade deficit must be reduced, but import quotas only annoy our trading partners. If we subsidize U.S. exports instead, we can reduce the deficit by increasing our competitiveness."
Show the effect of an export subsidy on the market for foreign exchange.
The value of dollars in the market for foreign-currency exchange.....falls or rise.... as a result of this export subsidy.
True or False: The export subsidy reduces the trade deficit.
Answer
The answer and procedures of the exercise are attached in a the following image.
Explanation
Please consider the data provided by the exercise. If you have any question please write me back. All the exercises are solved in a single sheet with the formulas indications.
According to the National Association of Realtors, the mean sale price for existing homes in the United States in 2011 was $214,300. Assume that sale prices are normally distributed with a standard deviation of $41,000. Find the percentage of existing homes in 2011 that sold for less than $255,300?
Answer:
49.9%
Explanation:
Please see attachment .
The market value of Yeates Corporation’s common stock had become excessively high. The stock was currently selling for $270 per share. To reduce the market price of the common stock, Yeates declared a 3-for-1 stock split for the 310,000 outstanding shares of its $12 par value common stock. Required: a. What entry will be made on the books of Yeats Corporation for the stock split? b. Determine the number of common shares outstanding and the par value after the split. c. Explain how the market value of stock will be affected by the stock split ?
Answer:
b. the number of common shares outstanding is 930,000 and the stock split is $4.
Explanation:
Please see attachment
The entry on the books of Yeates Corporation for the stock split, the number of common shares outstanding and the par value after the split, and the potential impact on the market value of the stock.
Explanation:a. The entry that will be made on the books of Yeates Corporation for the stock split is as follows:
Debit: Paid-in Capital in Excess of Par - Common Stock
Credit: Common Stock
Credit: Additional Paid-in Capital
b. After the stock split, the number of common shares outstanding will be 930,000 (310,000 shares * 3) and the par value will be $4 (original par value of $12 divided by 3).
c. The market value of the stock will not be directly affected by the stock split. However, the stock split may increase the liquidity of the stock and make it more affordable for individual investors to purchase. As a result, the increased demand may lead to an increase in the market price of the stock.
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Company has 130 units in Finished Goods Inventory at the beginning of the accounting period. During the accounting period, Hacken produced 190 units and sold 320 units for $ 250 each. All units incurred $ 55 in variable manufacturing costs and $ 30 in fixed manufacturing costs. Hacken also incurred $ 7 comma 700 in Selling and Administrative Costs, all fixed. Calculate the operating income for the year using absorption costing and variable costing.
Answer:
The operating income for the year using absorption costing and variable costing is $45,100 and $49,000 respectively
Explanation:
The computation of the operating income for the year using absorption costing and variable costing is shown below:
Absorption costing:
Sales (320 units × $250) $80,000
Less: Total manufacturing cost (320 units × $85) ($27,200)
Contribution margin $52,800
Less: Selling and Administrative Costs ($7,700)
Net income $45,100
Variable costing:
Sales (320 units × $250) $80,000
Less: Variable cost (320 units × $55) ($17,600)
Contribution margin $62,400
Less: Fixed manufacturing costs (190 units × $30) $5,700
Less: Selling and Administrative Costs ($7,700)
Net income $49,000
Final answer:
Operating Income for the year using: Absorption Costing is $45,100, Variable Costing is $49,000.
Explanation:
To calculate the operating income using absorption costing and variable costing, we'll follow a step-by-step process for each. Let's start with absorption costing.
Absorption Costing
Step 1: Determine the cost per unit under absorption costing.
Under absorption costing, both variable and fixed manufacturing costs are included in the cost per unit.
Variable Manufacturing Costs: $55 per unit
Fixed Manufacturing Costs: $30 per unit
Total Cost per Unit: $55 (variable) + $30 (fixed) = $85 per unit
Step 2: Calculate Cost of Goods Sold (COGS).
To find COGS under absorption costing, we need to account for the units sold from both the beginning inventory and those produced.
Units from Beginning Inventory: 130 units (at $85 each)
Units produced and sold: 320 units sold - 130 units from inventory = 190 units (at $85 each)
COGS = (130 units * $85) + (190 units * $85)
Step 3: Calculate the sales revenue.
Sales Revenue = Units Sold * Sale Price per Unit
Sales Revenue = 320 units * $250
Step 4: Calculate the operating income under absorption costing.
Operating Income (Absorption) = Sales Revenue - COGS - Selling and Administrative Costs
Operating Income (Absorption) = (Sales Revenue) - [(130 units * $85) + (190 units * $85)] - $7,700
Variable Costing
Step 1: Determine the variable cost per unit under variable costing.
Under variable costing, only variable manufacturing costs are considered in the cost per unit.
Variable Manufacturing Costs: $55 per unit
Step 2: Calculate the variable COGS.
Units from Beginning Inventory: 130 units (at $55 each)
Units produced and sold: 320 units sold - 130 units from inventory = 190 units (at $55 each)
Variable COGS = (130 units * $55) + (190 units * $55)
Step 3: Calculate the contribution margin.
Contribution Margin = Sales Revenue - Variable COGS
Step 4: Calculate the operating income under variable costing.
Operating Income (Variable) = Contribution Margin - Selling and Administrative Costs - Fixed Manufacturing Costs (for the entire production)
Fixed Manufacturing Costs.for production = 190 units produced * $30 fixed cost per unit
Operating Income (Variable) = (Contribution Margin) - $7,700 - (190 units * $30)
Calculating the Results
Now, let's perform the calculations:
Absorption Costing:
COGS = (130 units * $85) + (190 units * $85) = ($11,050 + $16,150) = $27,200
Sales Revenue = 320 units * $250 = $80,000
Operating Income (Absorption) = $80,000 - $27,200 - $7,700 = $45,100
Variable Costing:
Variable COGS = (130 units * $55) + (190 units * $55) = ($7,150 + $10,450) = $17,600
Contribution Margin = $80,000 - $17,600 = $62,400
Fixed Manufacturing Costs for production = 190 units * $30 = $5,700
Operating Income (Variable) = $62,400 - $7,700 - $5,700 = $49,000
Conclusion
Operating Income for the year using:
- Absorption Costing: $45,100
- Variable Costing: $49,000
A company has outstanding 20-year noncallable bonds with a face value of $1000, and 11% annual coupon, and a market price of $1,294.54. if the company was to issue new debt, what would be a reasonable estimate of the interest rate on the debt? If the company’s tax rate is 40%, what Is its after-ax cost of debt?
Answer:
8% and 4.8%
Explanation:
In this question, we use the Rate formula which is shown in the spreadsheet.
The NPER represents the time period.
Given that,
Present value = $1,294.54
Future value or Face value = $1,000
PMT = 1,000 × 11% = $110
NPER = 20 years
The formula is shown below:
= Rate(NPER;PMT;-PV;FV;type)
The present value come in negative
So, after solving this,
1. The pretax cost of debt is 8%
2. And, the after tax cost of debt would be
= Pretax cost of debt × ( 1 - tax rate)
= 8% × ( 1 - 0.40)
= 4.8%
A reasonable estimate of the interest rate on new debt can be determined by looking at the market price of existing bonds. The after-tax cost of debt can be calculated by multiplying the interest rate by (1 - tax rate).
Explanation:If a company was to issue new debt, a reasonable estimate of the interest rate on the debt can be determined by looking at the market price of the existing 20-year noncallable bonds. In this case, the market price of the bonds is $1,294.54, which is higher than the face value of $1,000. This indicates that there is high demand for the bonds and investors are willing to pay a premium for them. Therefore, the interest rate on the new debt would likely be lower than 11% to make it attractive to investors.
The after-tax cost of debt can be calculated by multiplying the interest rate by (1 - tax rate). In this case, the interest rate is 11% and the tax rate is 40%, so the after-tax cost of debt would be 11% * (1 - 0.40) = 6.6%.
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In 2019, Britt drove her automobile 16,200 miles for business. She incurred $900 in gas expenses and $235 in tolls associated with the business mileage. Assuming Britt uses the standard mileage method, her deduction is
Answer:
$9,631
Explanation:
In 2019, the Standard mileage rate deduction for the business purposes is 58 cents per mile.
Therefore,
Her deduction is as follows:
= (No. of miles drove × 58 cents per mile) + Tolls associated with the business mileage
= (16,200 × 58 cents per mile) + $235
= 9,396 + 235
= $9,631
Therefore, by using the standard mileage method, her deduction is $9,631.
A proxy is: Multiple Choice A document that delegates a stockholder's voting rights to an agent. A contractual commitment by an investor to purchase unissued shares of stock. An amount of assets defined by state law that stockholders must invest and leave invested in a corporation. The right of common stockholders to protect their proportionate interests in a corporation by having the first opportunity to purchase additional shares of common stock issued by the corporation. An arbitrary amount assigned to no-par stock by the corporation's board of directors.
Answer:
Option (A) is correct.
Explanation:
A proxy refers to a document which represents the authority to take some decision or do some activity on behalf of other person. For example, in case of voting, proxy could be used for voting here to represent some other person. A proxy is also referred as the authority or power given to a person to act for another person.