For the same level of risk, David requires a lower rate of return than Elias because David is less risk-averse. For the same return, David would tolerate a higher level of risk than Elias.
Explanation:The scenario provided involves a comparison between two investors based on their risk tolerance. Elias is described as being risk-averse, while David is less risk-averse than Elias. A risk-averse investor requires a higher rate of return to be compensated for the additional risk they are taking on. Therefore, for the same level of risk, David, being less risk-averse, would require a lower rate of return than Elias, since David is willing to accept more risk for the same potential return.
However, if we're looking at the tolerance for risk for the same return, then David, being less risk-averse, would tolerate a higher level of risk compared to Elias. This is because less risk-averse investors are generally willing to take on more risk in the pursuit of potentially higher returns. The tradeoff between return and risk is a foundational concept in investment strategies and reflects personal preferences, which must also consider different time frames for investment.
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Newlife Inc. announced today that it will begin paying annual dividends. The first dividend will be paid next year in the amount of $.63 a share. The following dividends will be $.68, $.83, and $1.13 a share annually for the following three years, respectively. After that, dividends are projected to increase by 4.1 percent per year. How much are you willing to pay today to buy one share of this stock if your desired rate of return is 15 percent?
Answer:
$7.63
Explanation:
Worth of the stock is the present value of all the cash flows associated with the stock. Dividend is the only cash flow that a stock holder receives against its investment in the stocks. We need to calculate the present values of all the dividend payments.
Formula for PV of dividend
PV of Dividend = Dividend x ( 1 + r )^-n
1st year
PV of Dividend = $0.63 x ( 1 + 15% )^-1 = $0.55
2nd year
PV of Dividend = $0.68 x ( 1 + 15% )^-2 = $0.51
3rd year
PV of Dividend = $0.83 x ( 1 + 15% )^-3 = $0.55
4th year
PV of Dividend = $1.13 x ( 1 + 15% )^-4 = $0.65
After four years the dividend will grow at a constant rate of 4.1%, so we will use the following formula to calculate the present value
PV of Dividend = [ $1.13 x ( 1 + 4.1% ) / ( 15% - 4.1% ) ] x [ ( 1 + 15% )^-5 ]
PV of Dividend = $5.37
Value of Stock = $0.55 + $0.51 + $0.55 + $0.65 + $5.37 = $7.63
Kim Lee is trying to decide whether she can afford a loan she needs in order to go to chiropractic school. Right now Kim is living at home and works in a shoe store, earning a gross income of $1,230 per month. Her employer deducts a total of $171 for taxes from her monthly pay. Kim also pays $110 on several credit card debts each month. The loan she needs for chiropractic school will cost an additional $133 per month. Help Kim make her decision by calculating her debt payments-to-income ratio with and without the college loan. (Remember the 20 percent rule.) (Round your answers to 2 decimal places.) Debt payments-to-income ratio with college loan % Debt payments-to-income ratio without college loan %3.Carl’s house payment is $1,640 per month and his car payment is $482 per month. If Carl's take-home pay is $3,250 per month, what percentage does Carl spend on his home and car? (Round your answer to 2 decimal places.) Loan payments-to-income ratio %2.Suppose that your monthly net income is $2,850. Your monthly debt payments include your student loan payment and a gas credit card. They total $1,140. What is your debt payments-to-income ratio?
Answer:
yes
Explanation:
ty the answer is 293840 use a calculator and 2% of 2837e928 m.
Final answer:
Kim Lee's debt payments-to-income ratio without the college loan would be 10.39%, and it would be 22.94% with the college loan. Carl spends 65.29% of his income on his home and car payments. If your net income is $2,850 and your monthly debt payments total $1,140, your debt payments-to-income ratio would be 40%.
Explanation:
To assist Kim Lee with her decision about the chiropractic school loan, we need to calculate her debt payments-to-income ratio with and without the college loan.
First, we'll calculate Kim's net income, which is her gross income minus the taxes deducted:
Gross Income: $1,230 per monthTaxes: $171 per monthNet Income: $1,230 - $171 = $1,059 per monthNow, her current monthly debt payments (credit card debts) are $110. To calculate the debt payments-to-income ratio without the college loan, we divide her monthly debt payments by her net income and multiply by 100 to get a percentage:
Debt payments-to-income ratio without college loan = ($110 / $1,059) × 100 = 10.39%
If she takes out the college loan, her monthly debt payments will increase by $133.
Total monthly debt payments with college loan = $110 + $133 = $243
Debt payments-to-income ratio with college loan = ($243 / $1,059) × 100 = 22.94%
For Carl's situation, his total monthly payment on debt (house and car) is $1,640 + $482 = $2,122. His take-home pay is $3,250.
Loan payments-to-income ratio for Carl = ($2,122 / $3,250) × 100 = 65.29%
Last, to find your own debt payments-to-income ratio:
Your Net Income: $2,850 per monthYour Total Monthly Debt Payments: $1,140Your Debt payments-to-income ratio = ($1,140 / $2,850) × 100 = 40%Grocery Corporation received $300,328 for 11 percent bonds issued on January 1, 2018, at a market interest rate of 8 percent. The bonds had a total face value of $250,000, stated that interest would be paid each December 31, and stated that they mature in 10 years. Required: Prepare the following table for each account by indicating (a) whether it is reported on the Balance Sheet (B/S) or Income Statement (I/S); (b) the dollar amount by which the account increases, decreases, or does not change when Grocery Corporation issues the bonds; and (c) the direction of change in the account [increase, decrease, or no change] when Grocery Corporation records the interest payment on December 31.
Answer:
For A. and B see attached files
Explanation:
The Ramirez Company's last dividend was $1.5. Its dividend growth rate is expected to be constant at 15% for 2 years, after which dividends are expected to grow at a rate of 5% forever. Its required return (rs) is 12%. What is the best estimate of the current stock price?
Answer:
current stock price, [tex]P_{0}[/tex] = $26.84
Explanation:
Given,
Most recent dividend, [tex]D_{0}[/tex] = $1.50
Growth rate, [tex]g_{1}[/tex] = 15% = 0.15 (Next 2 years)
[tex]g_{2}[/tex] = 5% = 0.05 (remain constant after 2 years)
required rate of return , [tex]r_{s}[/tex] = 12% = 0.12
We know,
Current stock price, [tex]P_{0}[/tex] = [[tex]D_{1}[/tex] ÷ (1 + [tex]r_{s}[/tex])] + [tex]\frac{D_{2} + P_{2}}{(1 + r_{s})^{2}}[/tex]
or, [tex]P_{0}[/tex] = [{[tex]D_{0}[/tex] × (1 + [tex]g_{1}[/tex])} ÷ (1 + [tex]r_{s}[/tex])] + [tex]\frac{D_{0} (1 + g_{1})^{2} + \frac{D_{3}}{r_{s} - g_{2}}}{(1 + r_{s})^{2}}[/tex]
or, [tex]P_{0}[/tex] = [{$1.50 × (1 + 0.15)} ÷ (1 + 0.12)] + [tex]\frac{1.50*(1+0.15)^{2} + \frac{D_{2} (1 + g_{2})}{(0.12 - 0.05)}}{(1+0.12)^{2}}[/tex]
or, [tex]P_{0}[/tex] = ($1.725 ÷ 1.12) + [tex]\frac{1.98375 + \frac{1.98375*(1 + 0.05)}{0.07}}{1.2544}[/tex]
or, [tex]P_{0}[/tex] = $1.5402 + [(1.98375 + 29.75625) ÷ 1.2544]
or, [tex]P_{0}[/tex] = $1.5402 + (31.74 ÷ 1.2544)
or, [tex]P_{0}[/tex] = $1.5402 + 25.3029
Therefore, current stock price, [tex]P_{0}[/tex] = $26.84
Melody lane music company was started by john ross early in 2016. Initial capital was acquired by issuing shares of common stock to various investors and by obtaining a loan. The company operates a retail store that sells records, tapes, and compact discs. Business was so good during the first year of operations that john is considering opening a second store on the other side of town. The funds neccesarry for expansion will come from a new bank loan. In order to approve the loan the bank requires financial statements. John asks for your help in prepareing the balance sheet and presents you with the following information for the year ending December 31 2016:
Cash receipts consist of the following,
From costumers $360,000
From issue of common stock 100,00
From bank loan 100,000
Cash disbursements were as follows:
Purchase of inventory 300,000
Rent 15,000
Salaries 30,000
Utilities 5,000
Insurance 3,000
Purchase of equipment and furniture 40,000
The bank loan was made on march 31 2016 a note was signed requiring payment of interest and principle on march 31 2017. The interest rate is 12%
The equipment and furniture were purchased on January 3 2016 and have an estimated useful life of 10 years with no anticipated salvage value. Depreciation per year is 4,000
Inventories on hand at the end of the year cost 100,000
Amounts owed at December 31, 2016 were as follows
To supliers of inventory $20,000
To the utility company $1,000
Rent on the store building is 1,000 per month. On Dec 1, 2016 four months rent was paid in advance.
Net income for the year was $76,000. Assume that the company is not subject to federal state or local income tax.
One hundred thousand shares of no par common stock are authorized, of which 20,000 shares were issued and are outstanding
Required: prepare a balance sheet at December 31, 2016.
Answer/Explanation:
Note 2: Interest on Bank Loan
Interest = (Principal x Time x rate) / 100
Principal = $100,000;
Time = 9/12 = 0.75
Rate = 12%
Interest = (100,000 x 0.75 x 12) / 100 = 9,000
See Note 1 and 3 on the attachment for the cash at hand and rent advance respectively.Balance sheet (see attachment):
Total Assets = 36,000 + 100,000 + 167,000 + 3,000 = 306,000
Total Liability + Capital = 100,000 + 76,000 130,000 = 306,000
Conclusion:
The balance sheet as can be seen in the attachment that has been prepared, revealed that the company’s current assets is sufficient to meet its current liabilities. Therefore the bank runs no risk for giving the company the credit facilities.
This answer draws up a balance sheet for Melody Lane Music Company for the year ending December 31, 2016 by categorising and calculating their assets, liabilities, and shareholders' equity based on the provided financial data.
Explanation:To prepare a balance sheet for the Melody Lane Music Company for the year ending December 31, 2016, you need to list the company's assets, liabilities, and shareholders' equity at that date based on the provided information.
Assets:Cash: The total cash is the sum of cash receipts minus the cash disbursements. ($360,000 + $100,000 + $100,000) - ($300,000 + $15,000 + $30,000 + $5,000 + $3,000 + $40,000) = $167,000Inventory: The inventory on hand at the end of the year is $100,000Prepaid Rent: Four months rent were paid in advance so $4,000 ($1,000 x 4 months) is counted as an assetEquipment and Furniture: Purchased for $40,000 and being depreciated at $4,000/year, so net value is $36,000 ($40,000 - $4,000)Liabilities:Accounts Payable: Amounts owed to suppliers of inventory and the utility company totaling $21,000 ($20,000 + $1,000)Bank loan: $100,000Interest Payable: Interest payable on the bank loan totaling $12,000 ($100,000 x 12%)Shareholder's Equity:Common Stock: $100,000 from issue of common stockRetained Earnings: Net income for the year, which is $76,000
In summary, total Assets ($167,000 Cash + $100,000 Inventory + $4,000 Prepaid Rent + $36,000 Equipment) should equal to total Liabilities and Shareholder's Equity ($21,000 Accounts Payable + $100,000 Bank Loan + $12,000 Interest Payable + $100,000 Common Stock + $76,000 Retained Earnings).
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The provisions of some laws and regulations have a direct effect on the financial statements in determining the reported amounts and disclosures in the financial statements. Which of the following is least likely to have a direct effect on the financial statements of the entity identified?
A. A corporation’s compliance with the tax code.
B. A bank’s compliance with legal capital requirements.
C. A service firm’s compliance with pension laws.
D. A manufacturer’s compliance with the occupational and safety code.
Answer:
Option D is correct.
Explanation:
A manufacturer’s compliance with the occupational and safety code is least likely to have a direct effect on the financial statements of the entity identified.
Elizabeth Airlines (EA) flies only one route: Chicagolong dash—Honolulu. The demand for each flight is: Upper Q equals 500 minus Upper PQ=500−P. EA's cost of running each flight is $30,000 plus $100 per passenger. What is the profit-maximizing price that EA will charge? How many people will be on each flight? What is EA's profit for each flight? (round all answers to a whole number)
Answer:
Profit-maximizing price = $300
People on flight = 200 people per flight
Profit for each flight = $10,000
Explanation:
As per the data given in the question,
Demand curve in inverse form:
P = 500 - Q
We know that marginal revenue curve for a linear demand curve will twice the slope,
So Marginal Revenue= 500 - 2Q
Marginal cost of carrying per passenger = $100
To determine profit maximizing quantity, Equating Marginal Revenue to Marginal Cost
Let the people on each flight be Q, then
500 - 2Q = 100
Q = 200 people per flight
Substituting the value Q in demand equation to find profit maximizing price for each ticket
Profit Maximizing price (P) = $500 - $200
= $300
Profit for each flight = Total Revenue - Total Cost
= (300) (200) - (30,000 + (200) (100) )
= $10,000 per flight
________ are more effective at generating recall and familiarity with a product, whereas ________ generate cognitive activity that encourage consumers to evaluate the advantages and disadvantages of a product. A) Distributed communications; massed communicationsB) Interference effects; involvement effects C) Pictorial cues; verbal cues D) Narrow categorizers; broad categorizers E) Copy tests; recognition tests
Answer:
The correct answer is letter "C": Pictorial cues; verbal cues.
Explanation:
Marketing uses different approaches to attract consumers' attention. When it comes to portraying images, advertising can implement pictorial cues to create a depth sensation on two-dimensional surfaces like flyers. Though, a verbal cue is necessary as well to provide the information the promotion is intended to transmit. That data can let the audience know what the advantages and disadvantages of the product promoted are.
Indicate the effect of each of the following transactions on (1) the current ratio, (2) working capital, (3) stockholders’ equity, (4) book value per share of common stock, and (5) retained earnings. Assume that the current ratio is greater than 1:1. (Indicate the effect of each transactions by selecting "+" for increase, "–" for decrease, and "NC" for no change.)
Transactions:
A. Collected account receivable.
B. Wrote off account receivable.
C. Converted a short-term note payable to a long-term note payable.
D. Purchased inventory on account.
E. Declared cash dividend.
F. Sold merchandise on account at a profit.
G. Issued stock dividend.
H. Paid account payable.
I. Sold building at a loss.
Effect:
Current Ratio Working Capital Stockholders Equity Book Value Retained EarningsA.B.C.D.E.F.G.H.I
Answer:
A. Collected account receivable.
(1) the current ratio NC
(2) working capital NC
(3) stockholders’ equity NC
(4) book value per share of common stock NC
(5) retained earnings. NC
B. Wrote off account receivable.
(1) the current ratio -
(2) working capital -
(3) stockholders’ equity -
(4) book value per share of common stock NC
(5) retained earnings. -
C. Converted a short-term note payable to a long-term note payable.
(1) the current ratio +
(2) working capital +
(3) stockholders’ equity NC
(4) book value per share of common stock NC
(5) retained earnings. NC
D. Purchased inventory on account.
(1) the current ratio -
(2) working capital NC
(3) stockholders’ equity NC
(4) book value per share of common stock NC
(5) retained earnings. NC
E. Declared cash dividend.
(1) the current ratio -
(2) working capital -
(3) stockholders’ equity -
(4) book value per share of common stock NC
(5) retained earnings. NC (at declaration it will change after year end adjustment)
F. Sold merchandise on account at a profit.
(1) the current ratio +
(2) working capital +
(3) stockholders’ equity +
(4) book value per share of common stock NC
(5) retained earnings. +
G. Issued stock dividend.
(1) the current ratio NC
(2) working capital NC
(3) stockholders’ equity NC
(4) book value per share of common stock NC
(5) retained earnings. -
H. Paid account payable.
(1) the current ratio +
(2) working capital NC
(3) stockholders’ equity NC
(4) book value per share of common stock NC
(5) retained earnings. NC
I. Sold building at a loss.
(1) the current ratio NC
(2) working capital +
(3) stockholders’ equity -
(4) book value per share of common stock NC
(5) retained earnings. -
Explanation:
A.
Collection of account receivable will increase the cash and decrease the account receivable both of these are current asset.
B.
Writer off account receivable will reduce the account receivable balance which is a current asset and increase the expenses which ultimately reduce the retained earnings.
C.
It will decrease the current liabilities and increase long term liability
D.
It will increase the inventory as current asset and account payable as current liabilities.
E.
It will decrease the total stockholders equity as a contra equity account of dividend and increase the current liabilities as Dividend payable.
F.
It will increase the cash / account receivable more than the decrease in inventory value.
G.
Stock dividend will have no net impact on stockholders equity. Because it will increase the common stock and add-in-capital excess of par accounts and decrease the retained earning accounts all of these are equity accounts.
H.
It will decrease account payable as current liabilities and cash as current assets.
I.
Cash will increase the current assets and Sale of asset decrease the net fixed asset value. Loss will decrease the retained earning in the form of net income value.
Final answer:
The effect of each financial transaction on various metrics such as current ratio, working capital, stockholders' equity, book value, and retained earnings can be understood by analyzing how they affect the balance sheet. Increases or decreases in these metrics result from changes in assets and liabilities due to financial activities, with different impacts based on the nature of the transaction.
Explanation:
The effect of the transactions on various financial metrics can be determined by understanding how each transaction impacts the organization's balance sheet and income statement. Here's a breakdown of each transaction's impact:
A. Collected account receivable: Current Ratio (NC), Working Capital (NC), Stockholders Equity (NC), Book Value (NC), Retained Earnings (NC)B. Wrote off account receivable: Current Ratio (NC), Working Capital (NC), Stockholders Equity (–), Book Value (–), Retained Earnings (–)C. Converted a short-term note payable to a long-term note payable: Current Ratio (+), Working Capital (+), Stockholders Equity (NC), Book Value (NC), Retained Earnings (NC)D. Purchased inventory on account: Current Ratio (–), Working Capital (–), Stockholders Equity (NC), Book Value (NC), Retained Earnings (NC)E. Declared cash dividend: Current Ratio (NC), Working Capital (–), Stockholders Equity (–), Book Value (–), Retained Earnings (–)F. Sold merchandise on account at a profit: Current Ratio (+), Working Capital (+), Stockholders Equity (+), Book Value (+), Retained Earnings (+)G. Issued stock dividend: Current Ratio (NC), Working Capital (NC), Stockholders Equity (NC), Book Value (–), Retained Earnings (–)H. Paid account payable: Current Ratio (–), Working Capital (–), Stockholders Equity (NC), Book Value (NC), Retained Earnings (NC)I. Sold building at a loss: Current Ratio (varies), Working Capital (varies), Stockholders Equity (–), Book Value (–), Retained Earnings (–)The increase or decrease in financial ratios and monetary figures due to transactions depends on how they affect assets, liabilities, and stockholders' equity. For example, an increase in liabilities is often associated with an increase in cash, and the disposal of assets affects cash flow, impacting the reconciliation of net assets.
Zena Technology sells arc computer printers for $54 per unit. Unit product costs are:
Direct materials $15
Direct labor 19
Manufacturing overhead 6
Total $40
A special order to purchase 11,000 arc printers has recently been received from another company and Zena has the idle capacity to fill the order. Zena will incur an additional $3 per printer for additional labor costs due to a slight modification the buyer wants to be made to the original product. One-third of the manufacturing overhead costs are fixed and will be incurred no matter how many units are produced. When negotiating the price, what is the minimum selling price that Zena should accept for this special order?
The minimum selling price that Zena should accept for the special order is $22 per unit.
The minimum selling price for the special order is calculated as follows:
Given Information:
Selling price for regular sales = $54 per unitUnit product costs for regular sales:Direct materials = $15 per unitDirect labor = $19 per unitManufacturing overhead = $6 per unit (of which $2 is fixed and $4 is variable)Total unit product cost for regular sales = $15 + $19 + $6= $40 per unit
Special order details:
Special order quantity = 11,000 units
Additional direct labor cost for the special order = $3 per unit
Variable portion of manufacturing overhead per unit = $4 per unit
There is a need to calculate the minimum selling price that Zena should accept for the special order.
Calculating the relevant cost for the special order:
Relevant cost per unit = Direct materials + Additional direct labor + Variable portion of manufacturing overhead
Relevant cost per unit = $15 + $3 + $4
= $22 per unit
Calculating the contribution margin per unit:
Contribution margin per unit = Selling price per unit - Relevant cost per unit
Contribution margin per unit = $54 - $22
= $32 per unit
To ensure that the special order provides a positive contribution to cover fixed costs and contribute to profit, the minimum selling price should be at least the relevant cost per unit:
Minimum selling price = Relevant cost per unit
Minimum selling price = $22 per unit
Therefore, the minimum selling price that Zena should accept for the special order is $22 per unit. Any selling price above this amount will contribute to covering fixed costs and generating a profit.
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Bardell, Inc. prepared its statement of cash flows for the year. The following information is taken from that statement: Net cash provided by operating activities $ 29,000 Net cash provided by investing activities 8,400 Cash balance, beginning of year 11,600 Cash balance, end of year 18,200 What is the amount of net cash provided by (used in) financing activities
Answer:
The Net Cash used in Financing activities is $30,800
Explanation:
Step 1 Determine the Movement in Cash during the period.
Movement = Ending Cash Balance - Beginning Cash Balance \
= 18,200 - 11,600
= 6,600 (inflow)
Step 2 Determine the Cash flow in Financing Activities
Cash flow statement for the year
Cash flow from Operating Activities $29,000
Net Cash flow from Investing Activities $ 8,400
Net Cash flow from Financing Activities (Balancing figure) ($30,800)
Movement in Cash during the year $6,600
Therefore, The Net Cash used in Financing activities is $30,800
An aging of a company's accounts receivable indicates that $4,000 are estimated to be uncollectible. If Allowance for Doubtful Accounts has a $900 debit balance, the adjustment to record bad debts for the period will require aa. debit to Bad Debit Expense for $5,200 b. debit to Bad Debits Expense for $4,000 c. debit to Bad Debits Expense for $2,800 d. credit to Allowance for Doubtful Accounts for $5,000
Answer:
The correct answer is Debit to Bad debt expense for $4,900, unfortunately none of the options provided in the question is correct.
Explanation:
Bad debt expense is an estimated amount of accounts receivable that is deemed to be uncollectible. There are different methods used in determining the bad debt expense - aging method, percentage-of-credit-sales method.
In the question, an amount of $4,000 was already estimated as uncollectible meanwhile the Allowance for Doubtful Accounts has a $900 debit balance. This means the bad debt expense that would be recorded would be $4,000 + $900 = $4,900. The addition is necessary in order to reinstate the Allowance for Doubtful Accounts to $4,000 and since the opening balance of the allowance account is in debit. Required journal entries are as follows:
Debit Bad debt expense $4,900
Credit Allowance for Doubtful Accounts $4,900
(To record bad debt expense)
On January 1, 2018, Alamar Corporation acquired a 38 percent interest in Burks, Inc., for $199,000. On that date, Burks's balance sheet disclosed net assets with both a fair and book value of $325,000. During 2018, Burks reported net income of $75,000 and declared and paid cash dividends of $22,000. Alamar sold inventory costing $25,000 to Burks during 2018 for $38,000. Burks used all of this merchandise in its operations during 2018. Prepare all of Alamar's 2018 journal entries to apply the equity method to this investment.
Answer and Explanation:
The journal entries are shown below:
1. Investment in Burks inc $199,000
To Cash $199,000
(being the investment purchased for cash is recorded)
2. Investment in Burks inc ($75,000 × 38%) $28,500
To equity in investment income $28,500
(Being the investment income is recorded)
3. Dividend receivable Dr ($22,000 × 38%) $8,360
To Investment in Burks inc $8,360
(Being the dividend receivable is recorded)
4. Cash Dr $8,360
To Dividend receivable $8,360
(Being the collection of cash is recorded)
Only these four entries are passed
Alamar Corporation uses the equity method to account for its 38 percent investment in Burks, Inc. This involves adjusting the investment account for Alamar's share of Burks's net income and dividends, and accounting for the unrealized profit on intercompany inventory sales.
When Alamar Corporation acquired a 38 percent interest in Burks, Inc., they would account for this investment under the equity method because they have significant influence over Burks, Inc. The equity method records the initial investment at cost, and then adjusts the value of the investment over time to reflect Alamar's share of Burks's net income and dividends paid out.
The initial journal entry to record the investment on January 1, 2018, is:
Cash 199,000
Investment in Burks 28,500
When Burks declared and paid cash dividends of $22,000, Alamar's share (38%) reduces the carrying amount of the investment:
Regarding the inventory sale, since Burks used all the merchandise, we must eliminate the unrealized profit on inventory sold by Alamar. Alamar sold the goods at $38,000, costing them $25,000. The unrealized profit is the difference (sales cost) that's not realized until Burks actually sells the item to an unrelated party. So, the profit that needs to be eliminated from Alamar's income is 38% (Alamar’s share) of the $13,000 (gross profit), which is $4,940.
Equity in Earnings of Burks 4,940
Investment in Burks 4,940
The terpsichorean was familiar with the risks associated with various moves, the accountant knew financial risks forwards and backwards, while the civil engineer could quantify the risks associated with distributed loads on the temporary stage. Their input was used as part of:
Complete Question:
The terpsichorean was familiar with the risks associated with various moves, the accountant knew financial risks forwards and backwards, while the civil engineer could quantify the risks associated with distributed loads on the temporary stage. Their input was used as part of:
A) a brainstorming meeting approach to risk factor identification.
B) the Delphi method approach to risk factor identification.
C) a past history approach to risk factor identification.
D) a multiple assessments approach to risk factor identification.
Correct Option:
Their input was used as part of "a multiple assessments approach to risk factor identification".
Option: D
Explanation:
The multiple assessments approach is collective procedure, which need unity from all the sectors to report their respective field experience in any firm or organization or department to identify the type of risk, its vulnerability, measures, etc.
The use of several indicators facilitates a more comprehensive and precise assessment. Like here terpsichorean was aware about risks, which was showcased by accountant and civil engineer in order to shape a strategy for preventing such risks or finding measures accordingly by full observation and analysis of situations.
Brenda graduated with her B.A. in business administration and was surprised when she was told she was unqualified to run the human resources department in several companies without work experience. Now she must decide what to do as a stepping stone to reach her goal. Which option best fits Brenda's goals
Answer: Brenda must take a lower level job in the human resources department for experience
Explanation:
Brenda must take a lower level job in the human resources department for experience, as this experience she gains in the department would go a long way in boosting her resume and helping her reach her goals as of running the human resources department one day.
Your firm has a total revenue of $1,000, a total cost of $1,500 and a variable cost of $500. What does this tell us about your profits and whether or not you should operate or shut down
Answer:
Firm should operate.
Explanation:
Here, we are assuming that this is a situation of short run.
A firm will operate or shut down is totally dependent upon whether the firm will be able to cover its variable cost of not. If a firm will be able to cover all of its variable cost then this firm will not shut down and operates in the short run until it covers all of its variable costs.
In this case, given that,
Total revenue = $1,000
Total cost = $1,500
Variable cost = $500
Profits = Total revenue - Total cost
= $1,000 - $1,500
= -$500
Therefore, this clearly shows that this firm will be able to cover its variable cost of $500 with the total revenue of $1,000. That's why the firm remains in the market even there is a loss of $500.
Hence, this firm should operate.
Al agrees to sell goods to Betty for a contract price of $3,000 due on delivery. Betty wrongfully rejects the goods and refuses to pay anything. Al resells the goods in strict compliance with the Code for $2,000. He incurs incidental damages for sales commissions of $200 but saves $150 in expenses because of the resale. Al is entitled to recover $1,050 from Betty.True/False
Answer:
True
Explanation:
Contract price $3,000
Revenue recovered on resale ($2,000)
Sales Commission expense $200
Expenses saved on resale ($150)
Amount recoverable from Betty as per contract $1,050
Therefore it is true that $1,050 will be recovered from Betty
Wexell Framing's cost formula for its supplies cost is $1,230 per month plus $10 per frame. For the month of October, the company planned for activity of 592 frames, but the actual level of activity was 597 frames. The actual supplies cost for the month was $7,050. The activity variance for supplies cost in October would be closest to:
Answer:
The correct answer is $50 (unfavorable).
Explanation:
According to the scenario, computation of the given data are as follow:-
Planning supply activity cost = (592 × $10) +$1230
= $7,150
Actual supply activity cost = (597 × $10) + $1230
= $7,200
We can calculate the activity variance for supply cost by using following formula:-
Activity variance for supplies cost = Actual activity cost – Planning activity cost
= $7,200 - $7,150
= $50 ( positive shows unfavorable)
Prithi acquired and placed in service $190,000 of equipment on August 1, 2015, for use in her sole proprietorship. The equipment is 5-year recovery property. No other acquisitions are made during the year. Prithi elects to expense the maximum amount under Sec. 179. Prithi's total deductions for the year (including Sec. 179 and depreciation) area.) $25,000b.) $63,000c.) $58,000d.) $38,000
Answer:
d.) $38,000
Explanation:
Given that
Acquired value of the plant = $190,000
Recovery period = 5 years
So according to section 179, the total deduction is limit to the 1 by 5 i.e useful life or recovery period of acquired price or purchase price
So, the amount is
= Acquired value of the plant ÷ recovery period
= $190,000 ÷ 5 years
= $38,000
By dividing the acquired value with the recovery period we can get the maximum deduction
Masterson Company's budgeted production calls for 66,000 units in April and 62,000 units in May of a key raw material that costs $1.60 per unit. Each month's ending raw materials inventory should equal 30% of the following month's budgeted materials. The April 1 inventory for this material is 19,800 unit. What is the budgeted materials needed in units for April?
Answer:
The budgeted materials needed in units for April is 64,800 units
Explanation:
In order to calculate the budgeted materials needed in units for April we would have to use the following formula:
Budgeted Materials =Materials needed +ending inventory −beginning inventory available
To calculate the ending inventory we would have to use the following formula:
Ending inventory=0.3×Following month budgeted materials
Ending inventory=0.3×62,000
Ending inventory=18,600
Therefore, Budgeted Materials =66,000+18,600−19,800
Budgeted Materials= 64,800 units
The budgeted materials needed in units for April is 64,800 units
The budgeted materials needed in units for April are 64,800 units.
To determine the budgeted materials needed in units for April for Masterson Company, we need to calculate the raw materials required for production and the desired ending inventory for April. Here's a step-by-step breakdown:
1. Calculate the desired ending inventory for April:
- May's budgeted production: 62,000 units
- Desired ending inventory for April (30% of May's production):
[tex]\[ \text{Ending inventory for April} = 0.30 \times 62,000 = 18,600 \text{ units} \][/tex]
2. Calculate the total raw materials required for April:
- April's budgeted production: 66,000 units
- Beginning inventory for April: 19,800 units
3. Formula to calculate the budgeted raw materials needed:
[tex]\[ \text{Materials needed for production} + \text{Desired ending inventory} - \text{Beginning inventory} = \text{Budgeted materials needed} \][/tex]
- Materials needed for production in April: 66,000 units
- Desired ending inventory for April: 18,600 units
- Beginning inventory for April: 19,800 units
4. Plug the values into the formula:
[tex]\[ \text{Budgeted materials needed} = 66,000 + 18,600 - 19,800 \][/tex]
5. Calculate the result:
[tex]\[ \text{Budgeted materials needed} = 66,000 + 18,600 - 19,800 = 64,800 \text{ units} \][/tex]
Coolmist produces high quality juices and competes head-on with the large national brands. Because of this stiff competition, they find it very difficult to raise the price of their juice. Oranges are a key raw material. As a rule the risk managers of Coolmist are NOT interested in designing an expensive risk management insurance strategy aimed at protecting their profit margins against small changes in the price of oranges. However, they are very interested in designing a cheaper risk management strategy that will protect margins against large changes in he price of oranges. Given this scenario, what financial engineering strategy would be most beneficial to Coolmist
Answer:
Explanation:
Being a juice producer, for which the raw material is oranges, Coolmist has to keep an eye on the prices of oranges. To protect herself from an increase in the cost of oranges, the financial engineering strategy that would be most beneficial to her is that she should buy in-the-money calls on oranges so that she will have an option to buy the oranges at the pre-decided strike price of the call option.
By doing the above, she would be protected against the price hike.
SEU Co. has preferred stock outstanding that is expected to pay an annual dividend of $4.88 every year in perpetuity. If the required return is 4.69 percent, what is the current stock price
Answer:
Current stock price = $1.040
Explanation:
We know,
Current preferred stock price = Preferred dividend ÷ Expected rate of return
Given,
Expected rate of return = 4.69%
Preferred dividend = $4.88
Current preferred stock price = ?
Putting the values into the formula, we can get
Current preferred stock price = $4.88 ÷ 4.69%
Or,Current preferred stock price = $1.040.
Therefore, the current preferred stock price is $1.040.
Product Pricing: Single Product Assume that you plan to open a soft ice cream franchise in a resort community during the summer months. Fixed operating costs for the three- month period are projected to be $5,650. Variable costs per serving include the cost of the ice cream and cone, $0.50, and a franchise fee payable to Austrian Ice, AG, $0.15. A market analysis prepared by the Austrian Ice indicates that the summer sales in the resort community should total 24,000.
Required: Determine the price should charge for each ice cream cone to achieve a $20,000 profit for the three-month period.
Answer:
$1.71
Explanation:
The computation of sales per unit is shown below:-
Variable cost = Total units × (Cost of ice cream and cone + Franchise fee payable)
= 24,000 × ($0.50 + $0.15)
= 24,000 × $0.65
= $15,600
Total cost = Fixed cost + Variable cost
= $5,650 + $15,600
= $21,250
Sales = Total cost + Profit
= $21,250 + $20,000
= $41,250
Sales price per unit = Sales ÷ Community total
= $41,250 ÷ 24,000
= $1.71
Standard costs rather than actual costs should be used in transfer-pricing methods because:
A. financial accounting rules (GAAP) require the use of standard costs.
B. tax rules require the use of standard costs.
C. standard costs are more readily available than actual costs.
D. standard costs facilitate a professionally negotiated, amicable settlement between the buying and selling divisions.
E.inefficient producing divisions could pass on their inefficiencies to buying divisions in the transfer price.
Answer:
E.inefficient producing divisions could pass on their inefficiencies to buying divisions in the transfer price.
Explanation:
The transfer price refers to that price in which the one firm is charging the prices from the other firm with respect to the service rendered. It is based on price charged in the market
To find out the transfer price we considered the standard cost instead of the actual cost as the divisions may be have more actual cost as compare to the standard cost which resulted into the inefficiency that impact the buying based on the transfer price
A note disclosed that the allowance for uncollectible accounts had a balance of $42.4 million and $39.7 million at the end of 2015 and 2014, respectively. Bad debt expense for 2015 was $30.0 million. Required:Determine the amount of cash collected from customers during 2015. (All sales are on credit. Enter your answer in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).)
Answer:
Allowance for uncollectible accounts: ($ in millions)
Balance, beginning of year $39.7
Add: Bad debt expense $30.0
Less: End of year balance ($42.4)
Write offs during the year $27.3
Accounts receivable analysis:
Balance, beginning of year ($2,076.6 + $39.7) $2,116.3
Add: Credit sales $19,281.6
Less: Writeoffs ($27.3)
Less: Balance end of year ($2,949.4 + $42.4) ($2,991.8)
Cash collections $18,378.8
Final answer:
The amount of cash collected from customers during 2015 is calculated to be $57.3 million after considering the bad debt expense and adjustments to the allowance for uncollectible accounts.
Explanation:
To determine the amount of cash collected from customers during 2015 when all sales are on credit, we should analyze the changes in the allowance for uncollectible accounts and the bad debt expense reported for the year. The beginning balance of the allowance for uncollectible accounts was $39.7 million in 2014 and increased to $42.4 million by the end of 2015. Given that the bad debt expense for 2015 was $30.0 million, we can calculate the cash collections.
The changes in the allowance for uncollectible accounts can be represented by the following equation:
Beginning Allowance Balance + Bad Debt Expense – Write-offs = Ending Allowance Balance.
Plugging in the known values, we get:
$39.7 million + $30.0 million – Write-offs = $42.4 million.
To find the value of the write-offs, we rearrange the equation:
Write-offs = $39.7 million + $30.0 million - $42.4 million.
Write-offs = $27.3 million.
Now, since all sales are on credit, the cash collected from customers is equal to the sales minus the increase in the accounts receivable (which includes both the bad debt expense and write-offs). Assuming no incremental increase in sales on credit, the cash collected is represented by:
Cash Collected = Bad Debt Expense + Write-offs
Cash Collected = $30.0 million + $27.3 million
Cash Collected = $57.3 million
When a purchase order is released, a commitment is made by a governmental unit to buy a computer to be manufactured to specifications for use in property tax administration. This commitment should be recorded in the general fund as a(n) General capital asset. Appropriation. Expenditure Encumbrance
Answer: Encumbrance
Explanation: The commitment made by a governmental unit to buy some product for use in administration is recorded in the general fund as an encumbrance which is defined as an interest, right, burden or liability that must be carried. As such, an encumbrance ensures that there will be enough funds available for the payment of certain governmental obligations and commonly refers to restricted funds in the general fund account.
Answer:
Encumbrance
Explanation:
An encumbrance is a portion of a budget set aside for spending required by law or contract. Like the budget itself, an encumbrance is a projection and not yet a reality. If business conditions continue as they are when you set the budget, then the encumbrance will become an expense.
The most common types of encumbrance apply to real estate; these include mortgages, easements, and property tax liens. Not all forms of encumbrance are financial, easements being an example of non-financial encumbrances. An encumbrance can also apply to personal – as opposed to real – property.
A chemical plant stores spare parts for maintenance in a large warehouse. Throughout the working day, maintenance personnel go to the warehouse to pick up supplies needed for their jobs. The warehouse receives a request for supplies, on average, every three minutes. The average request requires 2.75 minutes to fill a request. Maintenance employees are paid $21.50 per hour and warehouse employees are paid $16 per hour. The warehouse operates 8 hours per day. a) Based on the number of maintenance employees in the system, an 8 hour work day, and the given arrival and service rates. What is the system cost per day (to the nearest $) if there is only 1 warehouse employees working?
Answer:
$304 per day
Explanation:
See attached file
Precision Castparts, a manufacturer of processed engine parts in the automotive and airline industries, borrows $39.2 million cash on October 1,2015, to provide working capital for anticipated expansion. Precision signs a one-year, 8% promissory note to Midwest Bank under a prearranged short-term line of credit. Interest on the note is payable at maturity. Each firm has a December 31 year-end.1.Prepare the journal entries on October 1, 2015, to record the issuance of the note.
2.Record the adjustment on December 31, 2015.
3.Prepare the journal entry on September 30, 2016, to record payment of the notes payable at maturity
Answer:
1) October 1 2015, Cash $39.2million Dr
Notes Payable $39.2million Cr
2) December 31, 2015 Interest expense $0.784million Dr
Interest Payable $0.784million Cr
3) September 30, 2016 Notes Payable $39.2million Dr
Interest Payable $0.784million Dr
Interest Expense $2.352million Dr
Cash $42.336million Cr
Explanation:
1.
When note is issued, liability is credit by the notes value and cash is credited.
2.
The adjusting entry is prepared 3 months after the note is issued so the 3 month's interest on note relates to 2015 and it should be recorded as expense and as it is payable at maturity so interest payable is credited.
3 month interest = 39.2 * 0.08 * 3/12 = 0.784million
3.
The note and interest will be payable that was accrued along with the remaining 9 months interest. Total interest is 39.2 * 0.08 = 3.136million
In a twist on the traditional brain drain, when skilled immigrants return to their home countries, the U.S. may lose its native talent to developing countries that offer researchersa. excitment and freedom of self directionb. support and facilities in areas such as steam cell research, which the U.S. as limitedc. enticing expert contractsd. resons to retun home
Answer:
When skilled immigrants return to their home countries, the U.S. may:
Lose may lose its native talent to developing countries that offer researchers.
Explanation:
Brain drain is a problem described as the process in which a country loses its most educated and talented workers to other countries through migration.
when skilled immigrants return to their home countries, the U.S. may lose its native talent to developing countries in a twist on the traditional brain drain.
Remember these immigrants were mostly trained in the US, got employed and developed their career path in the US too. They automatically add up to the native talents base too.
Gomez Corporation is considering two alternative investment proposals with the following data: Proposal X Proposal Y Investment $ 850,000 $ 468,000 Useful life 8 years 8 years Estimated annual net cash inflows for 8 years $ 125,000 $ 78,000 Residual value $ 40,000 $ - Depreciation method Straight-line Straight-line Required rate of return 14% 10% How long is the payback period for Proposal Y
Answer:
6 years
Explanation:
The payback period calculates how long it takes for the amount invested in a project to be recovered from the cumulative cash flow.
Payback period = amount invested/ cash flow
$468,000 / $78,000 = 6 years
I hope my answer helps you