Answer:
10.23x
Explanation:
Market/Book Ratio = Stock Price / Net Book Value per Share
Stock Price = $25 per share
Net Book Value per Share = Net Book Value / shares of common stock outstanding
Shares of common stock outstanding = 900 million shares
where;
Total Assets = $11 billion
Total Liabilities = Current Liabilities + Long-Term Liabilities
Total Liabilities = $1.1 billion + $7.7 billion
Total Liabilities = $8.8 billion
Hence;
Net Book Value = Total Assets - Total Liabilities
Net Book Value = $11 billion - $8.8 billion
Net Book Value = $2.2 billion
Therefore;
Net Book Value per Share = Net Book Value / shares of common stock outstanding
Net Book Value per Share = $2.2 billion / 900 million shares
Net Book Value per Share = $2,200,000,000 / 900,000,000 shares
Net Book Value per Share = $2.44 per share
So;
Market/Book Ratio = Stock Price / Net Book Value per Share
Market/Book Ratio = $25 per share / $2.44 per share
Market/Book Ratio = 10.23x
It means that Stock is over valued and it has performed well because Market/Book Ratio is greater than 1. So the Stock price is set at higher price in relation to Edelman Engines' Net Book Value, so its Market/Book Ratio is 10.23x.
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.
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.
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%
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.
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.
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.
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
At Lone Star Construction, accident rates have been high over the last six months, so the owners are providing a training program to employees. The objective of the accident prevention program is to reduce the number and severity of accidents by 15 percent. The firm will compare accident rates before and after training in order to measure the success of the program. This is most likely an example of what level of T&D evaluation?
Answer:
According to Kirkpatrick's model of T&D Evaluation, the level which involves comparing before end after effect is Level 3
Explanation:
Training and development involves improving the effectiveness of organizations and the individuals and teams within them.
At Lone Star Construction, the type of training program proposed is an accident prevention program is to reduce the number and severity of accidents by 15 percent.
The level of T&D evaluation which involves comparing accident rates before and after training in order to measure success according to Kirk Patrick's model is Level 3.
Level 3 evaluation involves both pre- and post-event measurement and the degree to which participants' behaviors change as a result of the training and evaluates whether the knowledge and skills from the training are applied on the job.
The level of T&D evaluation depicted in Lone Star Construction's training program is the results-based criteria level, focusing on reducing accidents by 15 percent in measurable outcomes. Training effectiveness is gauged through practical comparisons of accident rates before and after the program, aligning with performance-oriented standards.
Explanation:The training program introduced at Lone Star Construction to reduce the number and severity of accidents by 15 percent can be evaluated at multiple levels. However, the most fitting level of Training and Development (T&D) evaluation for this scenario is results-based criteria. This particular level of evaluation focuses on the measurable outcomes such as reductions in accident rates, which is exactly what the firm intends to do in their comparison before and after the training. Studies, like those by Arthur, Bennett, Edens, and Bell (2003), have shown that training can be effective when evaluated on factors including behavioral changes and results-based criteria like productivity or safety improvements.
By setting a clear objective of reducing accidents by a quantifiable percentage, Lone Star Construction takes a performance-oriented approach. This approach allows the firm to measure the success of the training program in practical and definitive terms, which is in line with economic principles favoring standards that grant flexibility over strict command-and-control regulations. The fact that the firm will compare accident rates before and after the program is an indicative measure of the effectiveness of the training received by the employees.
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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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.
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.
You are the operations manager of a firm that uses the continuous-review inventory control system. Suppose the firm operates 52 weeks a year, 365 days, and has the following characteristics for its primary item:Demand = 450 units/per weekOrdering cost = $35/orderEOQ = 468 units What is the unit holding cost per year?A. Not greater than $3B. Greater than $3 but not greater than $6C. Greater than $6 but not greater than $9
Answer:
C. Greater than $6 but not greater than $9
Explanation:
The computation of the unit holding cost per year is shown below:
As we know that
[tex]Economic\ order\ quantity = \sqrt{\frac{2\times \text{Annual demand}\times \text{Ordering cost}}{\text{Carrying cost}}}[/tex]
where,
Annual demand is 450 × 52 weeks = 23,400 units
Ordering cost is $35 per order
Economic order quantity is 468 units
Now placing these values to the above formula
[tex]468\ units = \sqrt{\frac{2\times \text{23,400}\times \text{\$35}}{\text{Carrying\ cost}}}[/tex]
Now to find out the carrying cost, the calculation is given below:
= (2 × 450 units × $35) ÷ 468^2
= $7.48 per unit
The carrying cost is also known as holding cost
Snoke Inc's current price is $100 and the price is expected to rise to $110 in one year. The dividends are paid annually and the next dividend will be $6.00 per share. What is the expected stock return?
Answer:
Expected stock Return = 16%
Explanation:
The return of a stock is calculated by subtracting ending stock price to ending stock price and add adding and income distributions made during the period and divide by the stock price at beginning
Current stock price = $100
Expected stock price = $110
Dividends = $6
So in Snoke Inc's the only income distributions are dividends
Return = Ending stock price - Current stock price + dividends/Current stock price
=110-100+6/100
=0.16/16%
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.
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.
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.
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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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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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
Budgetary Performance for Cost Center Suwanee Company's costs were under budget by $59,700. The company is divided into North and South regions. The North Region’s costs were over budget by $4,200. Determine the amount that the South Region’s costs were over or under budget.
Answer
The South's budget was under budgeted by $63,900
Explanation
The sum of the north and south division equals that of the entire Company.
Company's budget = North + South budget
Let us represent the value of the south budget by y
(59,700) = 4,200 + y
y = -59,700 - 4200
y = 63,900
The South's budget was under budgeted by $63,900
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.
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.
Ruiz Co. provides the following sales forecast for the next four months. April May June July Sales (units) 500 580 540 620 The company wants to end each month with ending finished goods inventory equal to 25% of next month’s forecasted sales. Finished goods inventory on April 1 is 190 units. Prepare a production budget for the months of April, May, and June.
Answer:
Instructions are below.
Explanation:
Giving the following information:
Sales:
April= 500
May= 580
June= 540
July= 620
Finished goods inventory on April 1 is 190 units
Desired ending inventory= 25% next month sales.
To calculate the production for each month, we need to use the following formula:
Production= sales + desired ending inventory - beginning inventory
April:
Sales= 500
Desire ending inventory= (580*0.25)= 145
Beginning inventory= (190)
Total production= 455 units
May:
Sales= 580
Desire ending inventory= (540*0.25)= 135
Beginning inventory= (145)
Total production= 570 units
June:
Sales= 540
Desire ending inventory= (620*0.25)= 155
Beginning inventory= (135)
Total production= 560 units
The production budget for Ruiz Co. for April, May, and June involves calculating the required monthly production to meet sales forecasts while also maintaining ending inventories at 25% of the next month’s forecasted sales. The calculations lead to required production of 455 units in April, 570 units in May, and 560 units in June.
The question requires calculating a production budget for Ruiz Co. for the months of April, May, and June, considering its sales forecast and the desire to maintain ending finished goods inventory at 25% of the next month’s forecasted sales.
April Production: We start with April's forecast of 500 units and aim for an ending inventory of 25% of May's forecast (580 units), which is 145 units. Considering the starting inventory of 190 units, the production needed is 500 - 190 + 145 = 455 units.May Production: May forecasts 580 units and desires an ending inventory of 25% of June's forecast (540 units), equating to 135 units. The required production is 580 - 145 + 135 = 570 units, accounting for April's ending inventory as the starting point for May.June Production: June expects 540 units with an ending inventory of 25% of July's forecast (620 units), which is 155 units. Thus, the production needed is 540 - 135 + 155 = 560 units.By ensuring inventories match 25% of the subsequent month's sales forecasts, Ruiz Co. effectively plans its production to meet both current sales and future inventory requirements.
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
Midland Company buys tiles and prints different designs on them for souvenir and gift stores It buys the tiles from a small company in Europe, so at all times it keeps on hand a stock equal to the tries needed for three months' sales The tiles cost $3 each and must be paid for in cash. The company has 28,000 tiles in stock. Sales estimates, based on contracts received, are as follows for the next six months: Estimate purchases (in units) and cash required to make purchases in January.
Answer:
The question is not complete,find below complete question:
Midland Company buys tiles and prints different designs on them for souvenir and gift stores. It buys the tiles from a small company in Europe, so at all times it keeps on hand a stock equal to the tiles needed for three months’ sales. The tiles cost $3 each and must be paid for in cash. The company has 28,000 tiles in stock. Sales estimates, based on contracts received, are as follows for the next six months:
January 11,900
February 18,700
March 13,600
April 14,700
May 10,300
June 7,100
Required: a. & b. Estimate purchases (in units) and cash required to make purchases in January, February, and March.
Purchases in units is 30,900 units
Purchases amount is $92,700
Explanation:
The purchases in January is the sales estimate plus the desired ending inventory minus the opening stock of inventory.
The desired closing inventory in the sense implies three months future sales units i.e February,March and April sales units.
Sales in January 11,900
desired closing inventory(18,700+13,600+14,700)47,000
Total required units 58,900
Opening stock of inventory 28,000
Total purchases 30,900
Total purchases in dollar terms=purchases units*sales price per unit
sales price per unit is $3
total purchases in dollar terms=$3*30,900=$92,700
Copying an article from a computer science journal that sells subscriptions and then distributing it to 25 employees at your company: a. would be fair use. b. would be copyright infringement. c. would not be copyright infringement unless you charged the employees for the copies. d. none of the above
Answer:
The correct answer is b. would be copyright infringement.
Explanation:
Any copy of information for publication without the author's consent means an infringement of copyright, since the information is presented as if it were the company's own when it is not. In order for this situation not to occur, the company is required to notify the author of the intention to communicate the information and receive authorization to carry it out.
Answer: b. would be copyright infringement.
Explanation:
Copyright infringement is the use of works protected by copyright law without permission for a usage where such permission is required, thereby infringing certain exclusive rights granted to the copyright holder, such as the right to reproduce, distribute, display or perform the protected work, or to make derivative works.
Copyright infringement is using someone else's work without getting that person's permission. The owner of a copyright gets to decide who can legally make copies of that work. It is illegal to copy large sections of someone else's copyrighted work without permission, even if you give the original author credit.
Other examples of copyright infringement include:
1. Downloading movies and music without proper payment for use.
2. Recording movies in a theater.
3.Using others' photographs for a blog without permission.
4. Copying software code without giving proper credit.
5. Creating videos with unlicensed music clips.
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.
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).
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.