Answer:B. The Auditor should attempt to understand the entity and it's environment, Including Internal controls as early as practical through the analysis of the accounting system, test of controls and substantive test of transaction.
Explanation:
The first major duty of the Auditor is to understand the entity and it's environment to determine it's inherent risks, to evaluate the existing Internal controls to determine it's workability which invariably determines the level of substantive test to be carried out.
The test of sales and cash receipt thus not hereald an audit work but are carry out to confirm the strength or weakness of the internal control already documented.
For an effective audit, understanding the client's internal controls early (Option B) and evaluating them to set the scope of substantive tests (Option C) is crucial. Performing these tests late might omit critical insights gained from early evaluations.
The statement to evaluate suggests performing tests of sales and cash receipts transactions near the end of the audit. While there is some practicality in understanding the client’s business and internal controls by this time, the timing and sequence of audit procedures play a crucial role. Here, selecting the right options is important:
B: The auditor should attempt to understand the entity and its environment, including internal controls, as early as practical through the analysis of the accounting system, tests of controls, and substantive tests of transactions. Performing this understanding early helps in planning and executing further audit procedures effectively.C: The primary purpose of testing sales and cash receipts transactions is to evaluate the internal controls so that the scope of the substantive tests of the account balances may be set. If the auditor performs tests of details balances before testing internal controls, the benefits of such tests may be underutilized.Option A is less relevant because, while analytical procedures are useful, they are not a replacement for early testing of internal controls.
Tara and Robert formed the TR Partnership four years ago. Because they decided the company needed some expertise in multimedia presentations, they offered Katie a 1/3 interest in partnership capital if she would come to work for the partnership. On July 1 of the current year, the unrestricted partnership interest (fair market value of $25,000) was transferred to Katie. How should Katie treat the receipt of the partnership interest in the current year?
Answer
The answer and procedures of the exercise are attached in the following image.
Explanation
Please consider the data provided by the exercise. If you have any question please write me back. All the exercises are solved in a single sheet with the formulas indications.
Your Way, Inc. Eric buys companies that are small or companies in financial trouble. He helps these companies turn around and develop a competitive advantage. The company that he recently purchased is called Your Way, Inc. The company sells men's clothing and accessories. Your Way keeps the sewing machines for clothes manufacturing at a separate production facility so that the store location space can be reserved for display and selling. After looking over the different products available, Eric realized that the company's previous owner was not aware of the product life cycle because the company kept items that were obviously too old and out of date. Also, because of the high turnover, employees did not have good knowledge of the different product lines and did not know the difference between a product line and a product mix. To move the company forward, Eric thought of the following two measures: first, developing a new product to incorporate into the product mix; and second, eliminating the out-of-date products. Refer to Your Way, Inc. If Eric wanted to develop a new product, he would begin with(A) concept testing.(B) screening.(C) product analysis.(D) idea generation.(E) marketing analysis.
Answer: Marketing analysis
Explanation:
Marketing analysis which is detemining market needs or demand is the first step in be able to get a good demand for a product. After the analysis a product can then be designed to meet the Market needs through idea generation, product analysis and testing the concept.
Benchmarking involves:
1. comparing how different companies perform various value chain activities and then making cross-company comparisons of the costs and effectiveness of these activities.
2. checking whether a company has achieved more of its financial and strategic objectives over the past five years relative to the other firms it is in direct competition with.
3. studying whether a company's resource strengths are more or less powerful than the resource strengths of rival companies.
4. studying how a company's competitive capabilities stack up against the competitive capabilities of selected companies known to have world-class competitive capabilities.
5. comparing the best practices in one industry against the best practices in another industry.
Answer:
1. comparing how different companies perform various value chain activities and then making cross-company comparisons of the costs and effectiveness of these activities.
Explanation:
Benchmarking -
It is the method of comparing the business performance and the process like the cost , time and quality .
Benchmarking is also known as process benchmarking , or , best practice benchmarking .
It is the comparison among various companies , that how the company performs various value chain activities .
Hence , from the question , the correct statement for the given term is ( 1. ) .
Benchmarking involves comparing companies' performance, costs, and effectiveness of value chain activities, as well as comparing competitive capabilities and best practices across industries.
Explanation:Benchmarking involves comparing how different companies perform various value chain activities and then making cross-company comparisons of the costs and effectiveness of these activities. It also includes studying how a company's competitive capabilities stack up against the competitive capabilities of selected companies known to have world-class competitive capabilities. Additionally, benchmarking involves comparing the best practices in one industry against the best practices in another industry.
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Westville, a small developed country, is experiencing a very high rate of inflation. Roma Anderson, a market research analyst, thinks that the high level of inflation is due to an acute shortage of goods available in the economy. According to her, the government should use expansionary fiscal policies to boost the economy. Meanwhile, Robert Simpson, a member of the finance ministry, is of the opinion that the high level of inflation is the result of excessive household spending. He suggests that the government should increase personal income tax rates to curb consumption demand. Which of the following, if true, will strengthen Robert's claim that high consumer spending is the cause of high inflation? OA· The number of discouraged workers in Westville has increased this year. OB. One of Westville's leading trading partners was recently hit by a severe recession. Oc、 The gender wage gap in westville has increased substantially in the last few years. OD. Leading firms producing consumer durables have reported a decline in profits in recent times. OE. There is consensus among leading economists and industry experts that the output gap in Westville is currently negatuve
Answer:
There is consensus among leading economists and industry experts that the output gap in Westville is currently negative.
Explanation:
There are two different people who have two different views for the increasing inflation. Robert's claim that the reason behind high inflation is the high consumer spending will be strengthened if there is a consensus among leading economists and the industry experts that the output gap in Westville is negative. This means that the actual output is less than the potential output and so, the consumer spending will increase, leading to the inflation.
Robert's claim that high consumer spending is causing inflation in Westville could be strengthened by the evidence that leading consumer product firms are seeing declining profits, suggesting that demand is outstripping supply and hence driving up prices. However, a holistic approach is required to fully understand complex economic issues such as inflation.
Explanation:The debate revolving around the cause of high inflation in Westville can be strengthened by examining which claim aligns more closely with the symptoms observed in the economy. Inflation can be succinctly summarized as 'too many dollars chasing too few goods'. Bearing this definition in mind, Robert's argument that excessive household spending is at the root of the inflation problem would be reinforced if there is evident high demand meeting a lack of supply.
Going through the options provided, the one that would most strongly support Robert's claim would be if leading firms notably producing consumer durables have reported a decline in profits. A decline in corporate profits in consumer industries may indicate excessive spending. If people are buying more than these companies can produce, it would artificially inflate prices, contributing to a high inflation rate.
However, it's essential to note that economic indicators should not be evaluated in isolation and understanding economic trends generally requires a comprehensive view of various interrelated factors.
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As the firm borrows more and debt becomes riskier, both stockholders and bondholders demand higher rates of return. Thus, by reducing the debt ratio we can reduce both the cost of debt and the cost of equity, making everybody better off.a. True b. False
Answer:True
Explanation:
The debt holders been entitled to return before the equity places, the equity holders at the risk of not getting a return when the debt level is high and this will make them to clamour for more returns when profit is made thereby making it more costly to manage the equity capital.
The higher the debt capital the lower the possibility of the firm meeting his debts obligations as regards interest and capital and the likely of defaults with consequent penalties, which makes it more costly to service the debt capital.
Joe was trying to sell his home. He went out drinking with some buddies on Friday night and got really drunk. Saturday morning his realtor came by with a contract for the sale of his home. Joe looked over the contract, asked the realtor some questions about the date of the closing, asked the realtor what he thought about the contract, then signed the contract and went back to bed. When he woke up on Saturday afternoon he saw a copy of the contract and had a change of heart. The contract was for $10,000 less then what he originally wanted for the house.
1. Joe wants to disaffirm, claiming he was drunk when he signed. Can he?
Answer:
Yes. Joe can disaffirm the contract as he was drunk when he signed it.
Explanation:
According to law, a person who enters into a contract while intoxicated (either by alcohol or drugs) can make void, the terms of that contract if the person can prove he/she was sufficiently intoxicated and was therefore impaired, at the time the contract was signed.
Therefore Joe can disaffirm the contract by arguing that he got really drunk on Friday night and as such, his decision making was affected when he signed the contract on Saturday morning.
Answer:
Yes. Joe can disaffirm the contract as he was drunk when he signed it.
Explanation:
Apple hosts a large number of forums, which become customers' primary source of product information after warranties expire and are organized by product lines and type of user (consumer or professional). These forums are an example of ________.
Answer:
The answer is online communities.
Explanation:
Apple hosts a large number of forums, which become customers' primary source of product information after warranties expire and are organized by product lines and type of user (consumer or professional). These forums are an example of _online communities._______.
One criteria for deciding whether to have a server active all the time or have it start on demandusing a process server is how frequently the service provided is used. Can you think of any othercriteria for making this decision?
Answer:
The other criteria could be about the expected delay that is acceptable to customer in the processing time of the server.
Explanation:
If the customers are ready to accept a certain delay then it can help making the decision whether to keep the server permanently on, as it consumes high power.
Also if it is not used all the time then keeping it on all the time would be wastage of resources.
Thus, the scheduling of the expected time at which they use, and the acceptable delay would provide a proper criteria for this.
The standard cost of product 5252 includes 1.90 hours of direct labor at $14.30 per hour. The predetermined overhead rate is $22.00 per direct labor hour. During July, the company incurred 4,000 hours of direct labor at an average rate of $14.60 per hour and $80,100 of manufacturing overhead costs. It produced 2,000 units.
(a) Compute the total, price, and quantity variances for labor.
(b) Compute the total overhead variance.
Answer:
a) The total, price, and quantity variances for labor is $4,060 totally, $0.3 per direct labour, and 200 hours respectively
b) The total overhead variance is $36,100
Explanation:
The variance is the difference between actual figures and standard figures.
The actual hour taken for 1 unit in July is 2.0 hour, so the quantity variance for labor in per unit is 0.1 hour = 2.0 – 1.9; then the total quantity variance for 2,000 units produced in July is 200 hours = 0.1 x 2,000
The price variance for labor is $0.3 = $14.60 - $14.30
The total standard cost for labor in July is $54,340 = $14.3 x 1.9 hours x 2,000 units
The total actual cost for labor in July is $58,400 = $14.6 x 2.0 hours x 2,000 units
So the variance in total labor cost of July is $4,060 = $58,400 - $54,340
The standard overhead cost for 2,000 units is $44,000, while the actual overhead cost in July is $80,100. So the total overhead variance is $36,100
A company has 525 shares of $61 par value preferred stock outstanding. It also has 21,000 shares of common stock outstanding, and the total value of its stockholders' equity is $716,625. The company's book value per common share equals:
Answer:
$32.6
Explanation:
Please see attachment
California Gardens, Inc., prewashes, shreds, and distributes a variety of salad mixes in 2-pound bags. Doug Voss, OperationsVP, is considering a new Hi-Speed shredder to replace the oldmachine, referred to in the shop as "Clunker." Hi-Speed will have a fixed cost of $85,000 per month and a variable cost of$1.25 per bag. Clunker has a fixed cost of only $44,000 permonth, but a variable cost of $1.75. Selling price is $2.50 per bag.
a) What is the crossover point in units (point ofindifference) for the processes?
The crossover point is XX units. (Round your response to the nearest whole number.)
b) What is the monthly profit or loss if the company changes to the Hi-Speed shredder and sells 60,000 bags per month?
The monthly profit or loss if the company changes to theHi-Speed shredder and sells 60,000 bags per month is $ XX. (Round your response to the nearest dollar and include a minus sign if necessary.)
c) What is the monthly profit or loss if the company stays with Clunker and sells 60,000 bags per month?
The monthly profit or loss if the company stays with Clunker and sells 60,000 bags per month is $ XX. (Round your response to the nearest dollar and include a minus sign ifnecessary.)
Answer:
The answer is. Q is 82,000 units ,the company will make a loss of $ -10000 if the company changes to Hi speed, if the company stays with clunker it will make a profit of $1,000
Explanation:
a) Clunker. Hi speed
Fixed cost. $44,000. $85,000
Variable cost. 1.75. 1.25
Q (output in indifference point / cross over point) = FC of Hi speed - FC of Clunker/VC of Clunker - VC of Hi speed
FC of Clunker + VC of Clunker = FC of Hi speed + VC of Hi speed
44,000 + 1.75Q = 85,000 + 1.25Q
Collect like terms
1.75Q - 1.25Q = 85,000 - 44,000
0.5Q = 41,000
Q = 41,000/0.5
Q = 82,000 units
(b)
Since the sellingprice is $2.50 per bag, Revenue will be 2.50 × 60,000 = 150,000
Income Statement
Dr. Cr
$ $
Revenue. 150,000
Variable cost (1.25 × 60,000) 75,000
Add:Fixed cost 85,000
-------------
(160,000)
Profit/Loss. -10,000
---------------- --------------------
150,000. 150,000
-------------------- -----------------------
If the company changes to Hi speed, it will make a loss of $10,000
(c)
Dr. Cr
$ $
Revenue. 150,000
Variable cost (1.75 × 60,000) 105,000
Add: Fixed cost. 44,000
---------------
(149,000)
Profit /Loss. 1,000
------------------ ---------------------
150,000. 150,000
---------------------- -----------------------
If the company stays with clunker, it will make a profit of $1,000
Final answer:
The crossover point for the new Hi-Speed shredder and Clunker is at 82,000 units. Using the Hi-Speed shredder and selling 60,000 bags results in a loss of $10,000 per month, while continuing with Clunker results in a profit of $1,000 per month.
Explanation:
To calculate the crossover point where the total costs of both the new Hi-Speed shredder and the old machine Clunker are the same, we set up the following equation:
Total cost of Hi-Speed = Total cost of Clunker
Fixed cost of Hi-Speed + (Variable cost of Hi-Speed * Number of units) = Fixed cost of Clunker + (Variable cost of Clunker * Number of units)
85000 + 1.25x = 44000 + 1.75x
Solving for x gives us the crossover point:
85000 - 44000 = 1.75x - 1.25x
41000 = 0.5x
x = 82000 bags
To calculate the monthly profit or loss for selling 60,000 bags per month with the Hi-Speed shredder, we use the formula:
Profit = (Selling price per bag * Number of bags sold) - (Fixed cost + Variable cost per bag * Number of bags sold)
Profit = (2.50 * 60000) - (85000 + 1.25 * 60000)
Profit = $150000 - $160000 = -$10000
For the Clunker:
Profit = (2.50 * 60000) - (44000 + 1.75 * 60000)
Profit = $150000 - $149000 = $1000
The monthly profit or loss with the Hi-Speed shredder for selling 60,000 bags per month is -$10,000, and staying with Clunker would result in a $1000 profit.
Frances had a wonderful product, but her salesforce frequently argued over sales tactics and territories. Conflicts arose over issues unrelated to the business, such as lifestyles and work start times. Which top reason for startup failures was represented in this scenario?a. not the right teamb. lost focusc. poor marketingd. no market need
Answer:
Letter a is correct. Not the right team.
Explanation:
The structuring of a team is a relevant step for a startup to succeed and survive in the market.
Research indicates that one of the main causes of startup failure is to develop teams whose individuals do not have sufficient competence to perform teamwork to establish consensus and experience to observe the current scenario to effectively align the management process with market needs.
You made an investment of $12,000 into an account that paid you an annual interest rate of 3.5 percent for the first 5 years and 7.9 percent for the next 15 years. What was your annual rate of return over the entire 20 years
Answer:
interest rate r = 6.78 %
Explanation:
given data
investment = $12,000
interest rate = 3.5 percent = 0.035
time = 5 year
interest rate = 7.9 percent = 0.079
time = next 15 year
to find out
What was your annual rate of return over the entire 20 years
solution
we get here interest rate as
interest rate r = [tex][(1+r)^{t1} * (1+r)^{t2}]^{\frac{1}{t1+t2}} - 1[/tex] ...................1
here t1 is time period for first 5 year and t2 is time i.e next 15 year and r1 and r2 is rate
now put here value we get
interest rate r = [tex][(1+)^{t1} * (1+r)^{t2}]^{\frac{1}{t1+t2}} - 1[/tex]
interest rate r = [tex][(1+0.035)^{5} * (1+0.079)^{15}]^{\frac{1}{5+15}} - 1[/tex]
interest rate r = 1.0678 - 1
interest rate r = 0.0678
interest rate r = 6.78 %
On January 1, 2018, the general ledger of Grand Finale Fireworks includes the following account balances:
Accounts Debit Credit
Cash $ 43,200
Accounts Receivable 45,500
Supplies 8,000
Equipment 69,000
Accumulated Depreciation $ 9,500
Accounts Payable 15,100
Common Stock, $1 par value 15,000
Additional Paid-in Capital 85,000
Retained Earnings 41,100
Totals $ 165,700 $ 165,700
During January 2018, the following transactions occur:
January 2 Issue an additional 2,000 shares of $1 par value common stock for $40,000.
January 9 Provide services to customers on account, $15,600.
January 10 Purchase additional supplies on account, $5,400.
January 12 Repurchase 1,200 shares of treasury stock for $17 per share.
January 15 Pay cash on accounts payable, $17,000.
January 21 Provide services to customers for cash, $49,600.
January 22 Receive cash on accounts receivable, $17,100.
January 29 Declare a cash dividend of $0.30 per share to all shares outstanding on January 29. The dividend is payable on February 15. (Hint: Grand Finale Fireworks had 15,000 shares outstanding on January 1, 2018 and dividends are not paid on treasury stock.)
January 30 Reissue 800 shares of treasury stock for $19 per share.
January 31 Pay cash for salaries during January, $42,500.
1. Record each of the transactions listed above.
a. Unpaid utilities for the month of January are $6,700.
b. Supplies at the end of January total $5,600.
c. Depreciation on the equipment for the month of January is calculated using the straight-line method. At the time the equipment was purchased, the company estimated a service life of three years and a residual value of $10,500.
d. Accrued income taxes at the end of January are $2,500.
2. Record the adjusting entries on January 31, 2018 for the above transactions.
3. Prepare an adjusted trial balance as of January 31, 2018.
4. Prepare a multiple-step income statement for the period ended January 31, 2018.
5. Prepare a classified balance sheet as of January 31, 2018.
On January 1, 2018, the general ledger of Grand Finale Fireworks includes the following account balances: Accounts Debit Credit Cash $ 43,200 Accounts Receivable 45,500 Supplies 8,000 Equipment 69,000 Accumulated Depreciation $ 9,500 Accounts Payable 15,100 Common Stock, $1 par value 15,000 Additional Paid-in Capital 85,000 Retained Earnings 41,100 Totals $ 165,700 $ 165,700
Answer
The answer and procedures of the exercise are attached in the following image.
Explanation
The journal record is attached.
Please consider the data provided by the exercise. If you have any question please write me back. All the exercises are solved in a single sheet.
The question requires an understanding of business accounting, transaction recording, creation of adjusting entries, and the preparation of financial statements. The application of double-entry system, accrual concepts, and financial statement structuring play a critical role in effectively answering this question.
Explanation:This question pertains to the analysis of business transactions related to accounts in a ledger, execution of transactions, adjusting entries, preparation of an adjusted trial balance, multiple-step income statement, and a classified balance sheet. Given the initial account balances and the series of transactions and adjustments that took place within the month of January, you are tasked with reflecting these in the company's accounts, preparing the trial balance, income statement, and balance sheet. This involves dealing with a variety of accounting concepts such as accumulated depreciation, accounts payable and receivable, treasury stock, dividends, etc.
The completion of these tasks requires an understanding of the double-entry system, accrual accounting concepts, as well as the proper structuring of financial statements. To give an example, for a transaction like 'Purchase additional supplies on account, $5,400', you would need to debit 'Supplies' and credit 'Accounts Payable', thus increasing both accounts.
On the other hand, for adjusting entries such as 'Unpaid utilities for the month of January are $6,700', you would need to debit 'Utilities Expense' and credit 'Utilities Payable' therefore recognizing the incurred expense and the liability. This entails following the accrual accounting concept where expenses are recognized when they are incurred rather than when they are paid.
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On August 14, Park Avenue Bank lent $210,000 to City Coffee Shop on a 75 day, 4% note. What is the maturity value of the note? (Use a 365minusday year. Do not round intermediate calculations, and round your final answer to the nearest dollar.)
A. $218,400
B. $211,726
C. $211,750
D. $210,000
Final answer:
To calculate the maturity value of the note, we need to find the amount of interest accrued over the 75-day period. The formula for calculating the interest is: Interest = Principal x Rate x Time. Given the values, we can calculate the maturity value of the note to be approximately $211,095.89.
Explanation:
To calculate the maturity value of a note, we need to find the amount of interest accrued over the 75-day period. The formula for calculating the interest is:
Interest = Principal x Rate x Time
Given that the principal amount is $210,000, the interest rate is 4%, and the time period is 75 days, we can plug in these values into the formula:
Interest = $210,000 x 0.04 x (75/365)
After evaluating the formula, we find that the accrued interest is approximately $1,095.89.
To find the maturity value, we add the principal amount to the accrued interest:
Maturity Value = Principal + Accrued Interest
Maturity Value = $210,000 + $1,095.89
Therefore, the maturity value of the note is approximately $211,095.89. Rounded to the nearest dollar, the answer is C. $211,000.
The maturity value of the note is $211,726. The correct answer is option B. $211,726.
To calculate the maturity value of the note, we need to determine the interest accrued over the 75-day period and add it to the principal amount. The formula for calculating simple interest is:
[tex]\[ \text{Interest} = \text{Principal} \times \text{Rate} \times \text{Time} \][/tex]
Where:
- Principal = $210,000
- Rate = 4% (or 0.04)
- Time = [tex]\(\frac{75 \, \text{days}}{365 \, \text{days/year}}\)[/tex]
Calculation:
1. Calculate the Time Fraction:
[tex]\[ \text{Time} = \frac{75}{365} \approx 0.20548 \, \text{years} \][/tex]
2. Calculate the Interest:
[tex]\[ \text{Interest} = 210,000 \times 0.04 \times 0.20548 \approx 1,726.03 \][/tex]
3. Calculate the Maturity Value:
[tex]\[ \text{Maturity Value} = \text{Principal} + \text{Interest} \][/tex]
[tex]\[ \text{Maturity Value} = 210,000 + 1,726.03 \approx 211,726 \][/tex]
GEICO, the number-two auto insurer with $15 billion in revenue last year, spent $0.9 billion on advertising that year and plans to continue spending the same percentage of sales on advertising next year. The average advertising-to-sales ratio for the insurance industry is 0.1 percent of sales. If GEICO projects $20 billion in sales next year, using the percentage-of-sales method of advertising budgeting, how much will the company budget for advertising of basing it on projected sales?
Based on the given percentage-of-sales method, if GEICO continues to allocate 0.1% of its sales to advertising, it should budget $20 million for advertising next year.
Explanation:The question is asking for the projected advertising budget for GEICO if it continues to Base its advertising expenses on its sales, a method known as the percentage-of-sales method. Given that the insurance industry's average advertising-to-sales ratio is 0.1 percent of sales, this is the percentage we'll apply to GEICO's projected sales to estimate its advertising budget.
To find out how much GEICO will spend on advertising next year based on the given percentage, we need to multiply the projected sales by the average advertising-to-sales ratio. So, GEICO's advertising budget will be: $20,000,000,000 × 0.001 = $20,000,000. This means that if GEICO continues to allocate 0.1% of its sales to advertising, it should budget $20 million for advertising next year.
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A new storm drainage system must be constructed right away to reduce periodic flooding that occurs in a city that is in a valley. Five mutually exclusive designs have been proposed, and their present worth (in thousands of dollars) of costs and benefits are the following.System 1 2 3 4 5PW of cost $1000 $4000 $4000 $10,000 $14,000PW of benefits $8000 $8000 $14,000 $16,000 $24,000Which sytem has the greatest B-C ratio?
Answer:
Design 1
Explanation:
Benefit-Cost ratio is used to determine the net benefit pre dollar invested in a project.
Benefit-Cost ratio formula = PW of benefits / PW of cost
Design 1; 8000/1000 = 8
Design 2; 8000/4000 = 2
Design 3; 14000/4000 = 3.5
Design 4; 16000/10000= 1.6
Design 5; 24000/14000= 1.7
Therefore, from the above calculations, design 1 has the greatest Benefit-Cost ratio.
Sales $1,406,537 Operating Income $102,299 Total Assets (investment) $541,233 Target Rate of Return (Cost of Capital) 10% What is return on investment? Input your answer to 1 decimal place. For example if you calculate .1892 enter 18.9.
Answer:
18.90%
Explanation:
The formula to compute the return on investment is shown below:
= Operating income ÷ Total Assets (investment)
= $102,299 ÷ $541,233
= 18.90%
It shows a relationship between the operating income and the total assets i.e investment so that the accurate return on investment can be computed
All other information which is given is not relevant. Hence, ignored it
Answer:
18.9
Explanation:
ROI = Net Profit / Total Investment *100
ROI = ($102,299/$541,233)*100
ROI = 18.9
An economist discussing trade policy in the New Republic wrote: "One of the benefits of the United States removing its trade restrictions [is] the gain to U.S. industries that produce goods for export. Export industries would find it easier to sell their goods abroad—even if other countries didn’t follow our example and reduce their trade barriers."Which of the following statements is true about the effect of a reduction in restrictions of imports? Check all that apply.A. Exports will increase.B. The real exchange rate will remain unchanged.C. Imports will increase.D. Net exports at any given real exchange rate will increase.E. The demand curve for dollars will shift to the left.F. The equilibrium level of net exports will remain unchanged
Answer: The correct answers are "A. Exports will increase." , "C. Imports will increase.", "E. The demand curve for dollars will shift to the left." and "F. The equilibrium level of net exports will remain unchanged".
Explanation:
"A. Exports will increase." , "C. Imports will increase.", "E. The demand curve for dollars will shift to the left." and "F. The equilibrium level of net exports will remain unchanged". are TRUE.
B. The real exchange rate will remain unchanged. Is FALSE because the change in the demand curve for dollars leads to a decrease in the real exchange rate.
D. Net exports at any given real exchange rate will increase. is FALSE because net exports at any given real exchange rate will decrease.
Answer: the demand curve for dollars will shift to the left added to the above.
Explanation:
Moonrise Bakery applies factory overhead based on direct labor costs. The company incurred the following costs during 2017: direct materials costs, $710,000; direct labor costs, $3,600,000; and factory overhead costs applied, $2,520,000.
1. Determine the company’s predetermined overhead rate for 2017.
2. Assuming that the company’s $77,000 ending Work in Process Inventory account for 2017 had $26,000 of direct labor costs, determine the inventory’s direct materials costs.
3. Assuming that the company’s $550,000 ending Finished Goods Inventory account for 2017 had $329,000 of direct materials costs, determine the inventory’s direct labor costs and its overhead costs.
Answer:
Please see attachment
Explanation:
Please see attachment
Michael Corporation manufactures railroad cars, which is its only product. The standards for the railroad cars are as follows: Standard tons of direct material (steel) per car 22 Standard cost per ton of steel $ 16.00$16.00 During the month of March, the company produced 1 comma 5001,500 cars. Related production data for the month follows: Actual materials purchased and used (tons) 7 comma 0007,000 Actual direct materials total cost $ 118 comma 000$118,000 What is the direct materials quantity variance for the month?
Answer:
Instructions are listed below.
Explanation:
Giving the following information:
The standards for the railroad cars are as follows: Standard tons of direct material (steel) per car 22 Standard cost per ton of steel $16.00 During March, the company produced 1,500 cars. Related production data for the month follows: Actual materials purchased and used (tons) 7,000 Actual direct materials total cost $118,000
Direct material quantity variance= (standard quantity - actual quantity)*standard price
Direct material quantity variance= (33,000 - 7,000)*16= $416,000 unfavorable
Old Economy Traders opened an account to short-sell 1,000 shares of Internet Dreams at $105 per share. The initial margin requirement was 50%. (The margin account pays no interest.) A year later, the price of Internet Dreams has risen from $105 to $110.00, and the stock has paid a dividend of $17.00 per share.
a. What is the remaining margin in the account?
Remaining margin $
b-1. What is the margin on the short position? (Round your answer to 2 decimal places.)
Short margin %
b-2. If the maintenance margin requirement is 30%, will Old Economy receive a margin call?
Yes
No
c.
What is the rate of return on the investment? (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.)
Rate of return %
Answer:
a. $30,500
b1. 27.73%
b2. Yes because the 30% margin requirement is higher than 27.73% actual
c. -41.90%
Explanation:
a. Margin requirement at the beginning = 1,000 x 105 x 50% = $52,500
Payoff gained/(lose) from the short-sell position = ( Delivery price in the position - Market price - Dividend per stock ) x 1,000 = ( 105 - 110 - 17) x 1,000 = (22,000)
=> Remaining margin = Initial margin + Payoff from the short-sell position = 52,500 - 22,000 = $30,500
b1. Margin on the short position = Remaining margin / Values of underlying stocks in the position = 30,500 / 110,000 = 27.73%
b2. As the traders is in short position and the actual price is higher than the exercised price in the option, the margin on the short position lower than requirement ( 27.73% < 30%) will trigger a margin call.
c. Return on the investment equals to Pay-off from the position / initial margin requirement = -22,000 / 52,500 = 41.90%
Exercise 9-5 Sandhill Co. purchased a new machine on October 1, 2017, at a cost of $80,010. The company estimated that the machine has a salvage value of $7,280. The machine is expected to be used for 72,400 working hours during its 7-year life. Compute the depreciation expense under the straight-line method for 2017 and 2018, assuming a December 31 year-end. (
Answer:
2017 = $2,598 and 2018 = $10,390
Explanation:
The computation of the depreciation expense for the second year is shown below:
= (Original cost - residual value) ÷ (useful life)
= ($80,010 - $7,280) ÷ (7 years)
= ($72,730) ÷ (7 years)
= $10,390
In this method, the depreciation is same for all the remaining useful life
For 2017, the depreciation expense would be
= $10,390 × 3 months ÷ 12 months
= $2,598
The three months is calculated from the October 1, 2017, to December 31, 2017
And, in 2018 it would be $10,390
Brisco Bricks purchases raw material from its foreign supplier, Bolivian Clay, on May 8. Payment of 2,000,000 foreign currency units (FC) is due in 30 days. May 31 is Brisco's fiscal year-end. The pertinent exchange rates were as follows:
May 8 Spot rate: $ 1.25
May 31 Spot rate: $ 1.26
Jun. 7 Spot rate: $ 1.20
For what amount should Brisco's Accounts Payable be credited on May 8?
Answer:
$2,500,000
Explanation:
The computation of the amount which would be credited is shown below:
= Payment of foreign currency units (FC) is due in 30 days × exchange rate i.e spot rate on May 31
= 2,000,000 × $1.25
= $2,500,000
We simply multiply the payment with the spot rate so that the accurate value can come.
All other information which is given is not relevant. Hence, ignored it
Sunny Day Manufacturing Company has a current stock price of $22.35 per share, and is expected to pay a per-share dividend of $2.03 at the end of next year. The company's earnings' and dividends' growth rate are expected to grow at the constant rate of 8.70% into the foreseeable future. If Sunny Day expects to incur flotation costs of 5.00% of the value of its newly-raised equity funds, then the flotation-adjusted (net) cost of its new common stock (rounded to two decimal places) should be Alpha Moose Transporters Co.'s addition to earnings for this year is expected to be $745,000. Its target capital structure consists of 50% debt, 5% preferred, and 45% equity. Determine Alpha Moose Transporters's retained earnings breakpoint
A. $1,903,889
B. $1,655,556
C. $1,738,334
D. $1,986,667
Answer:
Alpha Moose Transporters's retained earnings breakpoint is B. $1,655,556
Explanation:
Addition to retained earnings = $745,000
Weight of equity = 45%
Retained earnings breakeven = $745,000 / 45%
= $1,655,556.
Retained earnings breakeven is $1,655,556.
Answer:
Based on the data provided as 50% is the debt,but 5% is preferred and 45% is the equity,and the foreseeable future rate is 8.7% so the retained earnings will be $1,738,334,option C is correct.
On January 1, 2015, Stronger Industries issued $480,000 of 9%, five-year bonds that pay interest semiannually on June 30 and December 31. They are issued at $499,483 and their market rate is 8% at the issue date. After recording the entry for the issuance of the bonds, Bonds Payable had a balance of $480,000 and Premium on Bonds Payable had a balance of $19,483. Stroger uses the effective interest bond amortization method. The first semiannual interest payment was made on June 30, 2015. Complete the necessary journal entry for the interest payment date of June 30, 2015 by selecting the account names an dollar amounts from the drop-down menus.
Final answer:
The journal entry for the interest payment date of June 30, 2015, involves the accounts: Interest Expense, Premium on Bonds Payable, and Cash. A portion of the interest payment is allocated to the reduction of the premium on Bonds Payable.
Explanation:
The journal entry for the interest payment date of June 30, 2015, will involve the following accounts: Interest Expense, Premium on Bonds Payable, and Cash. Since the bonds were issued at a premium, a portion of the interest payment will be allocated to the reduction of the premium. The specific amounts for each account can be calculated as follows:
Interest Expense: $480,000 (Bonds Payable) * 9% (interest rate) * 6/12 (6 months) = $21,600
Premium on Bonds Payable: $19,483 (balance) - $21,600 (interest expense) = -$2,117
Cash: $21,600 (interest payment)
Which of the following statements is CORRECT?
a. If an asset is sold for less than its book value at the end of a project's life, it will generate a loss for the firm, hence its terminal cash flow will be negative.
b. Only incremental cash flows are relevant in project analysis, the proper incremental cash flows are the reported accounting profits, and thus reported accounting income should be used as the basis for investor and managerial decisions.
c. Changes in net operating working capital refer to changes in current assets and current liabilities, not to changes in long-term assets and liabilities, hence they should not be considered in a capital budgeting analysis.
d. It is unrealistic to believe that any increases in net operating working capital required at the start of an expansion project can be recovered at the project's completion. Operating working capital like inventory is almost always used up in operations. Thus, cash flows associated with operating working capital should be included only at the start of a project's life.
e. If equipment is expected to be sold for more than its book value at the end of a project's life, this will result in a profit. In this case, despite taxes on the profit, the end-of-project cash flow will be greater than if the asset had been sold at book value, other things held constant.
Answer:
e. If equipment is expected to be sold for more than its book value at the end of a project's life, this will result in a profit. In this case, despite taxes on the profit, the end-of-project cash flow will be greater than if the asset had been sold at book value, other things held constant.
Explanation:
Answer to Question is Point E i.e. If equipment is expected to be sold for more than its book value at the end of a project's life, this will result in a profit. In this case, despite taxes on the profit, the end-of-project cash flow will be greater than if the asset had been sold at book value, other things held constant.
Because Book value is the Vaue of an assets recorded in the Balance sheet at the end of the Financial year. Book value is calculated by adjusting Original Cost for depreciation, amortization made for the asset. If the equipment is sold for a value more than its book value , it will result in profit. Despite the taxes on profit, the end of the cash flow will be greater.
As the Book value at the time of sale is calculated after giving effect of depreciation, amortisation.
York’s outstanding stock consists of 80,000 shares of cumulative 7.5% preferred stock with a $5 par value and also 200,000 shares of common stock with a $1 par value. During its first four years of operation, the corporation declared and paid the following total cash dividends:
2015 $ 20,000
2016 28,000
2017 200,000
2018 350,000
Determine the amount of dividends paid each year to each of the two classes of stockholders assuming that the preferred stock is cumulative. Also determine the total dividends paid to each class for the four years combined. (Round your "Dividend per Preferred Share" answers to 3 decimal places.)
Dividends paid to each class of stockholders can be calculated by multiplying the dividend rate and number of shares. Preferred stockholders receive a fixed dividend rate, while common stockholders receive the remaining dividends. The total dividends paid to the preferred stockholders over four years is $897,000, and the total dividends paid to the common stockholders is $309,000.
Explanation:The amount of dividends paid each year to each class of stockholders can be calculated by multiplying the dividend rate by the number of shares. For the preferred stock, the dividend rate is 7.5% of the par value of $5, yielding $0.375 per share. The total dividends paid to the preferred stockholders for each year are as follows: 2015 - $30,000, 2016 - $42,000, 2017 - $300,000, and 2018 - $525,000. The total dividends paid to the preferred stockholders for the four years combined is $897,000.
The common stockholders do not receive a fixed dividend rate like the preferred stockholders. Instead, they receive the remaining amount of dividends after the preferred stockholders are paid. To determine the dividends paid to the common stockholders, subtract the amount paid to the preferred stockholders from the total dividends declared each year. The total dividends paid to the common stockholders for each year are as follows: 2015 - $20,000, 2016 - $14,000, 2017 - $100,000, and 2018 - $175,000. The total dividends paid to the common stockholders for the four years combined is $309,000.
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__________ is a feature of job control unionism that threatens ___________________.A. Standardized wages tied to jobs; functional flexibilityB. Detailed systems of narrow job classifications; employment flexibilityC. Detailed, lengthy, legalistic union contracts; procedural flexibilityD. Restrictive work rules; wage flexibility
Answer:
The answer is letter C
Explanation:
Detailed, lengthy, legalistic union contracts; procedural flexibility.
Job control unionism is a form of labor unionism that uses detailed, lengthy, legalistic union contracts. These contracts provide procedural flexibility for union members but can be seen as a threat to employers who value flexibility in managing their workforce.
Explanation:C. Detailed, lengthy, legalistic union contracts; procedural flexibility
Job control unionism is a form of labor unionism that focuses on maintaining control over job assignments and work rules. One of its features is the use of detailed, lengthy, legalistic union contracts. These contracts outline specific job classifications, work processes, and procedures. While these contracts provide procedural flexibility for union members, they can be seen as a threat to employers who value flexibility in managing their workforce.
In the Assembly Department of Hannon Company, budgeted and actual manufacturing overhead costs for the month of April 2017 were as follows. Budget ActualIndirect materials $14,200 $13,700Indirect labor 19,100 19,900Utilities 11,400 12,100Supervision 4,600 4,600
All costs are controllable by the department manager.
Prepare a responsibility report for April for the cost center
Final answer:
A responsibility report compares budgeted costs to actual costs, highlighting variances and assisting a manager in decision-making. For the Assembly Department of Hannon Company, the report shows favorable and unfavorable variances in indirect materials, labor, and utilities, with no variance in supervision.
Explanation:
To draft this report, one must compare the budgeted costs against the actual costs incurred. A simple table can be created that lists each cost category, the budgeted amount, the actual amount, and the variance between the two.
Responsibility Report for April 2017
Cost Category Budgeted Actual Variance
Indirect Materials $14,200 $13,700 $500 Favorable
Indirect Labor $19,100 $19,900 $800 Unfavorable
Utilities $11,400 $12,100 $700 Unfavorable
Supervision $4,600 $4,600 $0
The manager of the department can then use this responsibility report to understand where costs were higher or lower than expected and make decisions accordingly.