Final answer:
The operating cash flow for Harper Brothers, Inc. is $128,880,000. It is calculated by subtracting operating expenses and taxes from sales revenue and adding back the non-cash depreciation expense.
Explanation:
To calculate the operating cash flow for Harper Brothers, Inc., we will start with the sales revenue and deduct all operating expenses, excluding depreciation since it is a non-cash charge. After that, we will adjust for taxes to get the net operating cash flow.
The formula for operating cash flow is:
Operating Cash Flow = (Sales Revenue - Operating Expenses - Taxes) + DepreciationIn this case:
Sales Revenue = $302,400,000Cost of Goods Sold (COGS) = $148,900,000Sales and Administrative Costs = $39,200,000Depreciation Expense = $60,300,000First, we calculate the Earnings Before Interest and Taxes (EBIT):
EBIT = Sales Revenue - COGS - Sales and Administrative CostsEBIT = $302,400,000 - $148,900,000 - $39,200,000EBIT = $114,300,000Next, we compute the taxes:
Taxes = EBIT * Tax RateTaxes = $114,300,000 * 40%Taxes = $45,720,000Finally, we calculate the operating cash flow:
Operating Cash Flow = (EBIT - Taxes) + DepreciationOperating Cash Flow = ($114,300,000 - $45,720,000) + $60,300,000Operating Cash Flow = $68,580,000 + $60,300,000Operating Cash Flow = $128,880,000Final answer:
To calculate Harper Brothers, Inc.'s operating cash flow, subtract the cost of goods sold and sales and administrative costs from sales revenue, add back depreciation expense, calculate and subtract taxes, resulting in an operating cash flow of $165,960,000 for the year.
Explanation:
To calculate the operating cash flow (OCF) for Harper Brothers, Inc., we start with the sales revenue and subtract both the cost of goods sold (COGS) and sales and administrative costs. Then, we add back the depreciation expense, as it is a non-cash charge, and subtract taxes paid.
Here's the step-by-step calculation:
Using Harper Brothers, Inc.'s figures:
Therefore, the operating cash flow for Harper Brothers, Inc. is $165,960,000 for the year.
Wims, Inc., has sales of $15.2 million, total assets of $9.8 million, and total debt of $3.7 million. The profit margin is 6 percent. a. What is net income? (Do not round intermediate calculations and enter your answer in dollars, not millions, rounded to the nearest whole number, e.g., 1,234,567.) b. What is ROA? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) c. What is ROE?
a. The Net Income is $912,000.
b. The Return on Assets (ROA) is 9.31%.
c. The Return on Equity (ROE) is 14.98%.
a. Net Income: To determine the net income, we use the given sales and profit margin to find the amount after deducting expenses.
Net Income = Sales × Profit Margin
Net Income = $15,200,000 × 0.06
Net Income = $912,000
b. Return on Assets (ROA): ROA is computed by dividing net income by total assets, showcasing how efficiently assets generate earnings.
ROA = Net Income / Total Assets
ROA = $912,000 / $9,800,000
ROA = 0.0931 or 9.31%
c. Return on Equity (ROE): ROE is calculated by dividing net income by total equity, demonstrating the returns generated on shareholders' investments.
ROE = Net Income / Total Equity
Total Equity = Total Assets - Total Debt
Total Equity = $9,800,000 - $3,700,000
Total Equity = $6,100,000
ROE = $912,000 / $6,100,000
ROE = 0.1498 or 14.98%
Therefore, the answers are:
a. Net Income: $912,000
b. ROA: 9.31%
c. ROE: 14.98%
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Final answer:
Net income for Wims, Inc. is $912,000, ROA is approximately 9.31%, and ROE is approximately 14.95%.
Explanation:
To calculate various financial metrics for Wims, Inc., we will use the given figures:
Sales revenue: $15.2 millionTotal assets: $9.8 millionTotal debt: $3.7 millionProfit margin: 6%a. To determine the net income, we multiply the sales revenue by the profit margin:
Net Income = Sales Revenue × Profit Margin = $15,200,000 × 0.06 = $912,000
b. The Return on Assets (ROA) is calculated by dividing the net income by the total assets:
ROA = Net Income / Total Assets = $912,000 / $9,800,000 ≈ 9.31%
c. To calculate the Return on Equity (ROE), we first need to determine the equity. Equity is calculated by subtracting total debt from total assets:
Equity = Total Assets - Total Debt = $9,800,000 - $3,700,000 = $6,100,000
Now, ROE = Net Income / Equity = $912,000 / $6,100,000 ≈ 14.95%
The Manda Panda Company uses the allowance method to account for bad debts. At the beginning of 2018, the allowance account had a credit balance of $92,400. Credit sales for 2018 totaled $3,190,000 and the year-end accounts receivable balance was $507,500. During this year, $88,500 in receivables were determined to be uncollectible. Manda Panda anticipates that 3% of all credit sales will ultimately become uncollectible. The fiscal year ends on December 31. Required: 1. Does this situation describe a loss contingency? 2. What is the bad debt expense that Manda Panda should report in its 2018 income statement? 3. Prepare the appropriate journal entry to record the contingency. 4. Complete the table below to calculate the net realizable value Manda Panda should report in its 2018 balance sheet?
1. No, 2. The bad debt expense is $95,700. 3. The journal entry would be a debit to bad debt expense and a credit to allowance for doubtful accounts. 4. Net realizable value is $419,000.
Explanation:1. No, this situation does not describe a loss contingency. A loss contingency is an uncertain event that may result in a loss for a company. In this case, the bad debts are already identified and can be estimated.
2. The bad debt expense that Manda Panda should report in its 2018 income statement can be calculated by multiplying the credit sales by the estimated percentage of uncollectible credit sales. So, the expense would be $3,190,000 * 0.03 = $95,700.
3. The appropriate journal entry to record the bad debt expense would be:
Debit Bad Debt Expense $95,700Credit Allowance for Doubtful Accounts $95,7004. The net realizable value that Manda Panda should report in its 2018 balance sheet can be calculated by subtracting the allowance for doubtful accounts from the accounts receivable. So, the net realizable value would be $507,500 - $88,500 = $419,000.
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Use the information below to answer the following questions: Common Stock: $17,000 Service Revenue: $20,000 Notes Payable: $5,000 Salaries Expense: $10,000 Accounts Receivable: $7,000 Ending Retained Earnings: $26,000 Supplies: $2,000 Insurance Expense: $1,500 Prepaid Insurance: $3,000 Utilities Expense: $4,000 Office Equipment: $16,000 Accounts Payable: $4,000 Cash: $24,000.
An income statement prepared for the year ended December 31 2013 would reflect Net Income of how much?
A Balance Sheet prepared as of December 31, 2013 would reflect total Assets of how much?
A Balance Sheet prepared as of December 31, 2013 would reflect total Liabilities of how much?
A Balance Sheet prepared as of December 31, 2013 would reflect total Stockholders' Equity of how much?
Answer:
Please see details bellow:
Explanation:
BALANCE SHEET
Assets
Cash $24.000
Accounts Receivable $7.000
Prepaid Insurances $3.000
Office Equipment $16.000
Inventory $2.000
TOTAL ASSETS 52.000
Liabilities
Accounts Payable $4.000
Notes Payable $5.000
TOTAL LIABILITIES $9.000
Equity
Common Stock $17.000
Retained Earnings $26.000
TOTAL EQUITY $43.000
INCOME STATEMENT
Sales $20.000
Salaries Expenses -$10.000
Insurances Expenses -$1.500
Utilities Expenses -$4.000
Net Income $4.500
A radio talk show host asked listeners to respond either yes or no to the question, "Is the candidate who spends the most on a campaign the most likely to win?" Fifteen people called in and nine said yes. What is the implied population?(A) all callers(B) all adults(C) all radio listener(D) all listeners of the radio talk show
Answer: All listeners of the radio talk show
Explanation: In simple words, the part of the population that could be used for the research conducted is called the implied population of such research.
In the given case, all the listeners were the implied population as every one had the chance to participate. The callers are the sample of the population. Sample refers to the part of population actually used in the conduct of research.
Hence from the above we can conclude that the correct option is D.
Which of the following activities would be most useful in an efficient market.A) buying and holding a diversified portfolioB) searching for patterns in charts based on stock price movementsC) analyzing financial ratios based on accounting dataD) buying only securities that have performed well in the recent past
Answer: C) analyzing financial ratios based on accounting ratios
Explanation:
In the JK partnership, Jacob's capital is $140,000, and Katy's is $40,000. They share income in a 3:2 ratio, respectively. They decide to admit Erin to the partnership. Each of the following questions is independent of the others.
Refer to the information provided above. Erin directly purchases a one-fifth interest by paying Jacob $33,000 and Katy $9,000. The land account is increased for its implied increase in value before Erin is admitted. By what amount is the land account increased?
A. $20,000
B. $24,000
C. $30,000
D. $36,000
Answer:
C. $ 30,000
Explanation:
The total amount Erin paid = $ 33000 + $ 9000
= $ 42000
for a one-fifth stake in the partnership, the capital increases to:
5* 42000 = $ 210000
the land account increased by = final capital - initial capital
= $ 210000 - ($ 140000 + $ 40000)
= $ 30000
Therefore, the land account increased by $ 30000.
Jean’s Vegetable Market had the following transactions during 2017: Issued $50,000 of par value common stock for cash. Repaid a 6-year note payable in the amount of $22,000. Acquired land by issuing common stock of par value $100,000. Declared and paid a cash dividend of $2,000. Sold a long-term investment (cost $3,000) for cash of $8,000. Acquired an investment in IBM stock for cash of $15,000. What is the net cash provided used by investing activities?
Answer:
net cash used by investing activities 7,000
Explanation:
investing activities:
proceeds from sale of investment 8,000
purchase of investment (15,000)
net cash used by investing activities 7,000
notes:
While the purhcase of land can be considered an investing activity notice it was paid with stocks not cash so it is ignored in the cash flow statement.
Same occurs with the gain on the investment as we have the atention on cash movement we record the cash inflow for 8,000 regardless of the amount loss or earned in the transaction.
The stock related transactions and the cash dividends are part of the financing activities.
In 2017, Jean’s Vegetable Market has a net cash of -$7,000 from investing activities. The transactions relating to investing activities include selling a long-term investment and acquiring an investment in IBM stock.
Explanation:The concept of financial cash flows can be divided into three categories: operating, financing, and investing activities. To find the net cash provided by investing activities, we need to focus on the transactions that involve long-term assets.
Jean's Vegetable Market's investing activities are: Selling a long-term investment (cash gain $8,000), acquiring an investment in IBM stock (cash loss $15,000). So, Net cash = $8,000 - $15,000 = -$7,000. This means $7,000 cash was used or lost in investing activities during 2017.
Please note, the other transactions are not direct investing activities. For example, issuing common stock and dividends are financing activities, not investing ones. And the repayment of a note payable is also a financing activity.
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Advanced Health determines that services for $1,800 had been provided and the client had not paid at the time the services were performed. The transaction was not recorded during the year. Record the required adjusting entry related to the external journal entry.
Answer:
Debit to Accounts Receivable $1,800; Credit to Service Revenue $1,800
Explanation:
The debit is "Accounts Receivable" since Advanced Health is yet to collect payment from the client.
Now, the credit would be "Service Revenue" since Advanced Health had already provided the services.
In accrual accounting, whenever services have already been rendered, regardless of when it is collected, we have to record the revenue.
In this case it will be called "Service Revenue" since the company is rendering services.
Time value An Iowa state savings bond can be converted to $750 at maturity 5 years from purchase. If the state bonds are to be competitive with U.S. savings bonds, which pay 5% annual interest (compounded annually), at what price must the state sell its bonds? Assume no cash payments on savings bonds prior to redemption. Ignore taxes.
Answer:
$78.35
Explanation:
Given:
Future value = $750
Maturity time = 5 years
Annual rate = 5%
Now,
Future value = P × ( 1 + r )ⁿ
Where, P is the present value of the bonds
r is the rate of interest
n is number of periods
on substituting the values, we get
$100 = P × ( 1 + 5% )⁵
or
$100 = P × ( 1.05 )⁵
or
P = $78.35
Hence, the state should sell its bond at a price of $78.35
A company issued 6%, 10-year bonds with a face amount of $90 million. The market yield for bonds of similar risk and maturity is 7%. Interest is paid semiannually. At what price did the bonds sell? (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided. Enter your answers in whole dollars. Round final answers to the nearest whole dollar.)
To determine the selling price of the 6%, 10-year bonds with a face value of $90 million and a market yield of 7%, calculate the present value of the semiannual interest payments and the principal payment using the PVA and PV formulas respectively.
Explanation:To calculate the selling price of the bonds, we need to find the present value of the interest payments and the principal payment. The company issued 6%, 10-year bonds with a face amount of $90 million, and the market yield is 7% with interest paid semiannually. Therefore, the semiannual interest rate is 3.5% (half of 7%), and there are 20 periods (2 per year for 10 years).
The semiannual interest payment is $2.7 million ($90 million * 6% / 2). We use the Present Value of An Annuity (PVA) formula for calculating the present value of the interest payments, and the Present Value (PV) formula for the principal amount. Notably, the interest payments are an annuity since they are equal payments made at regular intervals.
Price of Bonds = PV of interest payments + PV of principal = PVA of $2.7 million payments for 20 periods at 3.5% + PV of $90 million at the end of 20 periods at 3.5%.
This calculation requires using the PVA and PV tables or formulas: PVA = PMT * [(1 - (1 + r)^-n) / r] and PV = FV / (1+r)^n. The specific numerical values from the tables were not provided, but these formulas help us understand the relationship between the bond's cash flows, market interest rates, and the bond's price.
The Smelting Department of Kiner Company has the following production data for November. Production: Beginning work in process 3,700 units that are 100% complete as to materials and 29% complete as to conversion costs; units transferred out 9,300 units; and ending work in process 9,100 units that are 100% complete as to materials and 40% complete as to conversion costs. Compute the equivalent units of production for (a) materials and (b) conversion costs for the month of Novomber.
Answer:
(A) 18,400 units
(B) 12,940 units
Explanation:
The computation of the equivalent units of production for
(A) Material = Units transferred out + Ending work in process
= 9,300 units + 9,100 units
= 18,400 units
(B) Conversion = Units transferred out + (Ending work in process × conversion percentage)
= 9,300 units + 9,100 units × 40%
= 9,300 units + 3,640 units
= 12,940 units
The equivalent units of production are the number of units a manufacturing unit must produce to meet up the set criteria by the managers. It takes into consideration the cost of raw material, direct labor, and manufacturing overhead cost that is incurred during the specified period of time.
A. the equivalent units of production for material is 18,400 units.
B. the equivalent units of production for conversion costs for the month of November is 12,940 units.
Computation:
A.
[tex]\text{Material} = \text{Units transferred out + Ending work in process} = 9,300 units + 9,100 units = 18,400 units[/tex]
B.
[tex]\begin{aligned}\text{Conversion}&= \text{Units transferred out}\\&+\text{(Ending work in process}\times\text{conversion percentage)}\\&= 9,300\;\text{units} + (9,100 \; \text{units} \times40\%)\\&=9,300 \; \text{units} + 3,640 \;\text{units}\\&= 12,940\; \text{units}\end{aligned}[/tex]
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Sally purchased a log-splitter five years ago. This year, she purchases some new parts, gasoline, oil, and spends 2 hours repairing the log-splitter. Which of the following is included in this year's GDP?
a. the amount she paid to buy the new parts
b. the amount she paid to buy new parts and gasoline
c. the amount she paid to buy new parts, gasoline, and oil.
d. the amount she paid to buy new parts, gasoline, oil, and the market value of the 2 hours spent to repair the log-splitter.
Answer:
C
Explanation:
The GDP or gross domestic product measures the market value of all goods and services produced in country in a specific period of time. This year GDP should not include the log-splitter because Sally purchased it five years ago. We should include this year purchases: new parts, gasoline, oil. Also, we should include the market value of the 2 hours she spent repairing the log-splitter if she paid someone to do it or if someone paid her to do it, because this is a service. But the problem suggests that she repaired her own log-splitter, then we should not include it this year GDP.
Option (d) is included in this year's GDP because it represents the market value of final goods and services. GDP measures the total value of all final goods and services produced within a country's borders during a specified period.
Explanation:Option (d) is included in this year's GDP. GDP (Gross Domestic Product) measures the total value of all final goods and services produced within a country's borders during a specified period. The amount Sally paid to buy new parts, gasoline, oil, and the market value of the 2 hours spent repairing the log-splitter are considered as final goods and services, and therefore, included in GDP.
A firm that has recently experienced an enormous growth rate is seeking to lease a small plant in Memphis, TN; Biloxi, MS; or Birmingham, AL. Prepare an economic analysis of the three locations given the following information: Annual costs for building, equipment, and administration would be $43,600 for Memphis, $60,000 for Biloxi, and $100,000 for Birmingham. Labor and materials are expected to be $8 per unit in Memphis, $4 per unit in Biloxi, and $5 per unit in Birmingham. The Memphis location would increase system transportation costs by $50,000 per year, the Biloxi location by $60,000 per year, and the Birmingham location by $25,800 per year. Expected annual volume is 13,000 units.Memphis: ___; Biloxi: ___; Birmingham: ___
Answer:
The annual costs for Memphis, Biloxi, and Birmingham is $197,600, $172,000 and $255,800 respectively
Explanation:
The computation of the total cost is shown below
For Memphis:
= Annual cost of fixed assets + (annual volume × Labor and materials per unit) + transportation cost
= $43,600 + (13,000 units × $8 per unit) + $50,000
= $197,600
For Biloxi:
= Annual cost of fixed assets + (annual volume × Labor and materials per unit) + transportation cost
= $60,000 + (13,000 units × $4 per unit) + $60,000
= $172,000
For Birmingham:
= Annual cost of fixed assets + (annual volume × Labor and materials per unit) + transportation cost
= $100,000 + (13,000 units × $5 per unit) + $25,800
= $255,800
in 2 hrs, Whitney can make 4 dozen cookies or 2 peach tarts. Her friend, Amy, can make 7 dozen cookies or 1 peach tart.
If Whitney, specializes in cookies and Amy specializes in peach tarts, total production of cookies will be __ dozen cookies , and total production of peach tarts will be __ peach tart.
Answer: 4 dozen cookies and 1 peach tart
Explanation:
Whitney can make:
4 dozen cookies or 2 peach tarts in 2 hours
Amy can make:
7 dozen cookies or 1 peach tart in 2 hours
Here, we assume that there is only 2 hours of production
Cookies:
If Whitney specialize in cookies and there is no production of tart but only the production of cookies by Whitney, then,
Total production of cookies = 4 dozen cookies
Tart:
If Amy specialize in peach tart and there is no production of cookies but only the production of peach tart by Amy, then,
Total production of peach tart = 1 peach tart
Here are incomplete financial statements for BLOSSOM, Inc. Calculate the missing amounts
BLOSSOM, INC. Balance Sheet
Assets
Cash $ 7,000
Inventory 10,000
Buildings 45,000
Total assets $62,000
Liabilities and Stockholders' Equity
Liabilities
Accounts payable $ 5,000
Stockholders' Equity
Common stock
Retained earnings
Total liabilities and stockholders' equity $62,000
BLOSSOM, INC. Income Statement
Revenues $85,000
Dost of goods sold
Salaries and wages expense 10,000
Net Income
DONAVAN, INC. Retained Earnings Statement
Beginning retained earnings $12,000
Add: Net income
Less: Dividends 5,000
Ending retained earnings $27,000
Financial statements
Financial statements are compiled at the end of accounting periods to report on the performance on the company over the period and the state its assets and liabilities at the end of the period.
Answer:
(A) net income: 20,000
(B) COGS = 55,000
(C) Common Stock = 30,000
Explanation:
(A) with the RE statemtn we sovle for RE
net income = ending RE - beginning RE + dividends
net income = 27,000 - 12,000 + 5,000 = 20,000
(B) With the net income we solve for COGS
COGS= revenues - net income - salaries and wages
COGS = 85,000 - 20,000 - 10,000 = 55,000
(C) now we solve for common stock
liab + equity = total liab and stockholders equity
account payable + common stock + RE = total liab and stockholders equity
5,000 + CS + 27,000 = 62,000
CS = 62,000 - 27,000 - 5,000 = 30,000
Race One Motors is an Indonesian car manufacturer. At its largest manufacturing facility, in Jakarta, the company produces subcomponents at a rate of 295 per day, and it uses these subcomponents at a rate of 12 comma 700 per year (of 250 working days). Holding costs are $2 per item per year, and ordering costs are $29 per order. a) What is the economic production quantity? nothing units (round your response to two decimal places).
Answer: 666.13 units
Explanation:
Given that,
Production Per day (P) = 295
Usage rate of sub-components (D) = 12,700 per year (250 working days)
Holding cost (H) = $2 per item
Ordering costs (S) = $29 per order
[tex]d = \frac{D}{250}[/tex]
[tex]d = \frac{12,700}{250}[/tex]
= $50.8
[tex][1-\frac{d}{P}]=[1-\frac{50.8}{295}][/tex]
= 1 - 0.1722
= 0.8278
= 0.83
[tex]Economic\ production\ Quantity=\sqrt{\frac{2\times D\times S}{H\times[1-\frac{d}{P}] }}[/tex]
[tex]Economic\ production\ Quantity=\sqrt{\frac{2\times 12,700\times 29}{2\times 0.83 }}[/tex]
[tex]=\sqrt{443,734.94}[/tex]
= 666.13 units
The Economic Production Quantity (EPQ) for Race One Motors, given the provided variables for demand rate, setup cost, annual holding cost, and production rate, is approximately 1517.87 units.
Explanation:The economic production quantity (EPQ) is calculated to determine the quantity of an item that should be produced in a single batch. This allows manufacturers to minimize the total cost of production, which commonly includes holding and setup costs. In the case of Race One Motors, we will consider the demand rate (D) to be 12,700 units per year, the setup cost (S) as $29 per order, annual holding cost (H) as $2 per item, and production rate (P) as 295 per day multiplied by 250 working days.
The formula for EPQ is: √[(2DS/H)(P/(P-D))]. Inserting the provided variables, we get: √[(2*12700*29/2)*(295*250/(295*250-12700))] = 1517.87 units. Rounded to two decimal places, we find that the economic production quantity is 1517.87 units.
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Concord Corporation had the following records:
2017 2016
Ending inventory $37650
$39490
Cost of goods sold 235600 226490
What is Concord average days in inventory for 2017? (rounded) (Use 365 days for calculation.)
Answer:
Inventory days for 2017 = 60 days
Explanation:
Inventory days = [tex]\frac{365}{Inventory\ Turnover}[/tex]
For this, firstly we will calculate average inventory.
Average Inventory = [tex]\frac{Starting\ Inventory + Closing\ Inventory}{2}[/tex]
Here, starting inventory = $39,490
Closing inventory = $37,650
Average Inventory = [tex]\frac{39,940 + 37,650}{2} = 38,795[/tex]
Inventory Turnover = [tex]\frac{Cost\ of\ goods\ sold}{Average\ Inventory}[/tex]
= [tex]\frac{235,600}{38,795} = 6.0729[/tex]
Inventory days = [tex]\frac{365}{6.0729} = 60.10[/tex]
Rounded inventory days = 60 days.
A supplier's bargaining position is especially strong when: A. many sources of the supply exist. B. other materials can be substituted for their specific supply. C. the supply is vital to the organization. D. the supply is free. E. the supply is not protected by patent.
Answer:
C. the supply is vital to the organization.
Explanation:
Bargaining is the act of exchanging, whether fraudulently or not, an object for another; It is the strength of a person or group when discussing prices, putting pressure and demanding, for example, higher quality at a lower price. A supplier's bargaining position is especially strong when supply is vital to the organization, because the organization will need to buy that supply regardless of the price the supplier requests.
Which of the following statements is true of the second tier of the global economy pyramid?
a. It consists of a billion people making $2,000 to $20,000 a year.
b. It mostly consists of people who live in the developed economies.
c. It mostly consists of people who live in North America, Western Europe, and Japan.
d. It consists of the vast majority of the people who make less than $2,000 a year.
Answer:
a. It consists of a billion people making $2,000 to $20,000 a year.
Explanation:
The global economy pyramid is divided into three levels, which are called three tiers.
Under tier 1 only people having income more than $20,000 are present, and generally they live in developed economies, like: Western Europe, Japan, etc:
Under tier 2 people having income more than $2,000 and less than $20,000 are found, these are around 1 billion in population.
Under tier 3 maximum population lives, which is approximately 4 billion people.
Therefore, the correct statement is :
a. It consists of a billion people making $2,000 to $20,000 a year.
An analysis and aging of Jay Co.’s accounts receivable at December 31 disclosed the following:Accounts receivable $900,000 Allowance for uncollectible accounts, per books 50,000 Amounts deemed uncollectible 64,000 The net realizable value of the accounts receivable at December 31 should be _____
Answer:
Net Realizable balance of accounts receivables = $836,000
Explanation:
As for the provided information, we have:
Balance of accounts receivables = $900,000
This balance represents the total amount which is to be received by the company from the debtors as debtors owe this amount to company.
Allowance for un-collectible receivables = $50,000
This balance clearly represents the amount which the company will not be able to collected and this is now accounted for, through a credit account allowance for un-collectible receivables.
Further it is provided that, the deeming amount of un-collectibles = $64,000.
Now this shall clearly represent the net and final amount which the company would not be able to collect. The above balance of $50,000 is un-adjusted balance.
Therefore, net collectible or we can say realizable balance of accounts receivables = $900,000 - $64,000 = $836,000.
Final answer:
Explaining how to calculate the net realizable value of accounts receivable by considering the allowance for uncollectible accounts.
Explanation:
Allowance for uncollectible accounts is a reserve set up by businesses to reflect the amount of accounts receivable that will likely not be collected. In this case, with an accounts receivable of $900,000 and deemed uncollectible amounts of $64,000, the net realizable value would be $836,000 ($900,000 - $64,000).
In practice, a common way to value a share of stock when a company pays dividends is to value the dividends over the next five years or so, then find the "terminal" stock price using a benchmark PE ratio. Suppose a company just paid a dividend of $1.17. The dividends are expected to grow at 12 percent over the next five years. The company has a payout ratio of 40 percent and a benchmark PE of 19. The required return is 12 percent. What is the target stock price in five years?
What is the stock price today?
The target stock price in five years is $51.11. The stock price today is $32.65.
Explanation:To find the target stock price in five years, we need to calculate the future dividends and the terminal stock price. First, we calculate the future dividends using the formula:
Dn = D0(1+g)n, where D₀ is the current dividend, g is the growth rate, and n is the number of years.
Plugging in the values, we get: D₅= 1.17(1+0.12)5 = $2.69.
Next, we calculate the terminal stock price using the formula:
Pt = Dₙ(PE ratio), where Dₙ is the future dividend and the PE ratio is the benchmark.
Plugging in the values, we get Pt = 2.69(19) = $51.11. Therefore, the target stock price in five years is $51.11.
To find the stock price today, we need to discount the future dividends and the terminal stock price back to the present using the required return rate. First, we discount each future dividend using the formula: PV = D/(1+r)n, where PV is the present value, D is the future dividend, r is the required return rate, and n is the number of years. Plugging in the values, we get PV₅ = 2.69/(1+0.12)5 = $1.38.
Next, we discount the terminal stock price using the same formula: PVt = Pt/(1+r)n, where PVt is the present value of the terminal stock price.
Plugging in the values, we get: PVt = 51.11/(1+0.12)5 = $25.03.
Finally, we add up the present values of the dividends and the terminal stock price to get the stock price today: Stock Price Today = PV₁ + PV₂+ PV₃ + PV₄ + PV₅ + PVt = $1.17 + $1.25 + $1.34 + $1.43 + $1.53 + $25.03 = $32.65. Therefore, the stock price today is $32.65.
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To calculate the target stock price in five years, the expected dividends are grown at 12% annually over five years and then multiplied by the benchmark PE ratio of 19 to determine the terminal stock price. The stock price today is found by discounting these future dividends and the terminal price back to present value at the required return rate of 12%.
Explanation:To determine the value of a share of stock when a company pays dividends, we use the Dividend Discount Model (DDM). Given a current dividend of $1.17 that grows at 12% for the next five years, we can calculate the expected dividends for the next five years. To find the terminal stock price, also known as the Price Next Year, we use the specified benchmark PE ratio.
The formula to estimate expected dividends at each year (D1, D2, D3, ..., D5) is:
Once we have the expected dividend for the fifth year (D5), the terminal stock price (P5) is estimated by multiplying D5 by the benchmark PE ratio. Next, to bring these future cash flows back to the present value, we use the required return rate as the discount rate, which is given as 12%.
The present value of dividends (PV) is calculated as follows:
To find the stock price today, we sum the present values of the expected dividends for the next five years, and add to this sum the present value of the terminal stock price.
You wish to buy a cabin in 15 years. TODAY, the cabin costs $150,000. You believe the price of the cabin will inflate at 4% annually. You want to invest a single amount of money (lump sum) today and have the money grow to equal the future purchase price of the cabin 15 years from now. If you can earn 10% annually on your investments, how much do you need to invest NOW, in order to be able to purchase the cabin?
Answer:
I will need to invest 64,669.73 dollars now.
Explanation:
We will calcualte the future value of the cabin considering the inflation:
[tex]Principal \: (1+ inflation )^{time} = Amount[/tex]
Principal 150,000.00
time 15 years
inflation 0.04000
[tex]150000 \: (1+ 0.04)^{15} = Amount[/tex]
Amount 270,141.53
Then we calculate the present value of the lump sum at 15 years discounted at 10% which is the yield of the funds
[tex]\frac{Maturity}{(1 + rate)^{time} } = PV[/tex]
Maturity 270,141.53
time 15 years
rate 0.10
[tex]\frac{270141.53}{(1 + 0.1)^{15} } = PV[/tex]
PV 64,669.73
we would need to deposit 64,669.73 today to get enough cash to purchase the bcabin in 15 years.
Suppose that you are president of the student government, and you have to decide how to allocate a $20,000 fund for guest speakers for the year. Conan O’Brien and Will Ferrell each cost $10,000 per appearance, Stephen Colbert costs $20,000 per appearance, and former economic advisers to the government charge $1,000 per lecture. Explain the economic problem of choice and scarcity in this case. What issues would you consider in arriving at a decision?
Economic resources are scarce, making each consumer face an individual budget constraint. So consumers should make choices that maximize their satisfaction in the face of their budget constraints. To make the choices, consumers use their preferences. In this matter, the student organization resources available for hiring speakers is $ 20,000. That means their budget constraint is $ 20,000. Then, they should choose, from the speakers that cost up to this value, the one that generates the greatest benefit for the student group. This is a choice based on group preferences.
On January 1, 2017, Leo paid $15,000 for 5 percent of the stock in BLS, an S corporation. In November, he loaned $8,000 to BLS in return for a promissory note. BLS generated a $600,000 operating loss in 2017. BLS generated $408,000 ordinary business income in 2018. How much of Leo’s share of this income is included in his 2018 taxable income?
Final answer:
Leo's share of the ordinary business income from BLS as a 5 percent shareholder would be 5 percent of the $408,000, resulting in $20,400 potentially included in his 2018 taxable income.
Explanation:
The student is asking how much of Leo's share of the ordinary business income from BLS in 2018 will be included in his 2018 taxable income. To calculate this, we first determine Leo's share of the income based on his ownership percentage in BLS. Since Leo owns 5 percent of the stock, his share of the $408,000 income would be 5 percent of that amount, which is $20,400. However, it is also necessary to ascertain whether the company's operating loss from 2017 affects the amount that could be included in Leo's taxable income for 2018. This would depend on the specific tax regulations regarding loss carryforwards for S corporations and Leo's basis, which could potentially change the amount that is taxable. Without specific rules on loss carryforwards and assuming Leo has enough basis, the entire $20,400 would be included in his taxable income for 2018.
Bank 1 lends funds at a nominal rate of 8% with payments to be made semiannually. Bank 2 requires payments to be made quarterly. If Bank 2 would like to charge the same effective annual rate as Bank 1, what nominal annual rate will they charge their customers? Round your answer to three decimal places. Do not round intermediate calculations.
Answer: 7.922%
Explanation:
Bank 1 lends at nominal rate of 8% and payments made is semiannually,
So,
Semiannual rate of bank 1 = 4%
Effective annual rate of Bank 1:
[tex]EAR=(1+half\ yearly\ rate)^{2}-1[/tex]
[tex]EAR=(1+0.04)^{2}-1[/tex]
= 8.16%
If Bank 2 wants to maintain the same level of EAR at quarterly compounding:
[tex](1+quarterly\ rate)^{4} =EAR+1[/tex]
[tex](1+quarterly\ rate)^{4} =8.16\ percent+1[/tex]
[tex](1+quarterly\ rate)^{4} =1.0816[/tex]
[tex](1+quarterly\ rate) =(1.0816)^{\frac{1}{4} }[/tex]
[tex](1+quarterly\ rate) =1.01980390271[/tex]
Quarterly rate = 1.01980390271 - 1
= 1.980390%
Nominal annual rate for Bank 2 = Quarterly rate × 4
= 1.980390% × 4
= 7.9215% or 7.922%
Final answer:
To have the same effective annual rate as Bank 1, Bank 2 needs to charge a nominal annual rate of approximately 8.243% with quarterly compounding.
Explanation:
The question asks how to find the nominal annual rate that Bank 2 should charge to have the same effective annual rate as Bank 1, which lends funds at a nominal rate of 8% with semiannual compounding. First, we calculate the effective annual rate (EAR) for Bank 1 using the formula [tex]EAR = (1 + i/n)^n - 1[/tex], where i is the nominal interest rate and n is the number of compounding periods per year. For Bank 1, [tex]EAR = (1 + 0.08/2)^2 - 1 = 0.0816 or 8.16%.[/tex] To find the nominal annual rate for Bank 2 with quarterly compounding that results in the same EAR, we rearrange the EAR formula to solve for [tex]i: i = n*((EAR + 1)^{(1/n)} - 1)[/tex]. Substituting the values for Bank 2, we get [tex]i = 4*((1.0816 + 1)^{(1/4)} - 1),[/tex] which calculates to approximately 8.243% as the nominal annual rate Bank 2 should charge.
Technician A says that a cylinder head may house many vital engine components, including the crankshaft, spark plug, connecting rods, and camshaft. Technician B says in an aluminum cylinder head, the valve seats and valve guides are separate steel parts that are pressed tightly into the head. Who is right?
A. Both A and B
B. Neither A nor B
C. B only
D. A only
Answer:
A. Both
Explanation:
Answer:
Your correct answer A. Both A and B
Explanation:
Hope this helps :) -Mark Brainiest Please :)
One day, a local theme park charges $40 per person for admission, and 10,000 people visit the park. On another day, the park charges $60 per person, and 20,000 people pay to enter the park. Which explanation best describes why the park sees an increase in attendance when the price is higher? Theme-park tickets are part of a rare class of goods which do not follow the Law of Demand. High prices signal a high quality park experience. The higher price gives the park an incentive to expand capacity and permit more visitors. The low-attendance day falls on an autumn Wednesday, while the high-attendance day falls on a summer Saturday.
Answer:
The low-attendance day falls on an autumn Wednesday, while the high-attendance day falls on a summer Saturday.
Explanation:
There are no rare class of goods which do not follow the Law of Demand
The most probable reason may be the dates are at different time period, when the demand is lower and therefore the price must be lower to generate enought attendance to make it profitable. While, the second date is onpeak demand.
The increase in attendance at the theme park when the price is higher can be explained by the concept of price elasticity of demand. When a good or service has elastic demand, a higher price can lead to an increase in revenue due to a greater increase in attendance. In this case, the higher price at the theme park results in more people attending, resulting in higher total revenue.
Explanation:The concept at play here is called price elasticity of demand. The demand curve shows how the quantity demanded of a good or service changes in response to changes in its price. When a good or service is elastic, a small change in price leads to a large change in quantity demanded. Conversely, when a good or service is inelastic, a change in price has a relatively small impact on quantity demanded.
In this case, the theme park sees an increase in attendance when the price is higher because the demand for the park is elastic. This means that when the park increases its price, fewer people are willing to pay and attend. However, the higher price per person compensates for the decrease in attendance, resulting in higher total revenue for the park.
For example, on the day when the park charges $40 per person, 10,000 people visit, resulting in a total revenue of $400,000. On the day when the park charges $60 per person, 20,000 people visit, resulting in a total revenue of $1,200,000. Even though the price per person is higher, the park earns more revenue because the increase in attendance more than offsets the decrease in price.
Which of the following statements about the cost of capital is incorrect? Select one: a. A company's target capital structure affects its weighted average cost of capital. b. Weighted average cost of capital calculations should be based on the after-tax-costs of all the individual capital components. c. If a company's tax rate increases, then, all else equal, its weighted average cost of capital will increase. d. The cost of retained earnings is equal to the return stockholders could earn on alternative investments of equal risk. e. Flotation costs can increase the cost of preferred stock.
Answer:
c. If a company's tax rate increases, then, all else equal, its weighted average cost of capital will increase.
Explanation:
We will analize based on the WACC formula:
[tex]WACC = K_e(\frac{E}{E+D}) + K_d(1-t)(\frac{D}{E+D})[/tex]
(C) Incorrect, if the tax-rate increase, notice the cost of debt tax-shield will be higher, therefore it will generate a lower WACC
asumming a debt cost of 10%
if the tax-rate is 20% 10% ( 1 - 20%) = 8%
if the tax-rate is 50% 10% ( 1 - 50%) =5%
the cost of debt is lower, thus the WACC will be lower to.
Which of the following factors does not contribute to the development of trust between negotiators? Select one: a. We are more likely to trust someone we perceive as similar to us or as holding a positive attitude toward us. b. We often mistrust people who are dependent upon us because we are in a position to help or hurt them. c. We are more likely to trust people who initiate cooperative, trusting behavior. d. We are more likely to trust negotiators who make concessions. e. All of the above contribute to the development of trust between negotiators.
Answer:
b. We often mistrust people who are dependent upon us because we are in a position to help or hurt them.
Explanation:
There is a normal tendency in humans, to respect someone and agree to the opinion of an individual, having more knowledge and have a positive outlook, towards us, and to normal life.
Whenever there is an individual who is junior to us, or in any manner moves under our leadership, and we have a strong influence on such person, then there are major chances that we will not build a strong trust with them.
As because that person is influenced by us and does not put his own opinion, and accordingly, it will negatively impact us, as no decision would be agreed based on his opinion.
Which of the following statements is true of international premium?
a. It is a pay raise for domestic employees.
b. It is the money paid to domestic firms by foreign firms.
c. It is the amount of money paid by international firms to government.
d. It is a significant pay raise a manager gets when working overseas.
Answer:
The correct option is (d)
Explanation:
Multinational corporations have operations across the globe. They send domestic employees to other locations for various purposes like providing training to the employees in the foreign location.
Sometimes, domestic employees have to stay and work in foreign companies for an indefinite period. In such cases, these employees are given significant raise in pay which is termed as international premium. It is a kind of incentive for working away from home country.
Final answer:
The true statement about international premium is that it's a significant pay raise given to a manager working overseas due to the extra challenges and costs associated with international assignments. Hence, the correct option is D.
Explanation:
The statement d. It is a significant pay raise a manager gets when working overseas is true of international premium. An international premium accounts for the additional compensation that managers or employees receive for taking on assignments in foreign countries, typically because of the added challenges and costs associated with living and working abroad. This may include, but is not limited to, the higher cost of living in the foreign country, cultural adjustments, and separation from family and friends.
Multinational corporations might find themselves in a position where they need to offer these premiums to attract managers and ensure that operations in other countries are run by competent individuals with the right skills and experience. Furthermore, managing overseas might involve dealing with different business practices, legal environments, and political risk, which justifies the higher pay.