Fish Fillet Incorporated obtains fish and then processes them into frozen fillets and then prepares the frozen fish fillets for distribution to its retail sales department. Direct materials are added at the initiation of the cycle. Conversion costs are incurred evenly throughout the production cycle. Before inspection, some fillets are spoiled due to nondetectible defects. Inspection occurs when units are 100% completed. Spoiled fillets generally constitute 3.5% of the good fillets.
Data for April 2013 are as follows:
WIP, beginning inventory 4/1/2013 40,000 fillets
Direct materials (100% complete)
Conversion costs (50% complete)
Started during April 75,000 fillets
Completed and transferred out 4/31/2013 100,000 fillets
WIP, ending inventory 431/2013 8,000 fillets
Direct materials (100% complete)
Conversion costs (20% complete)
Costs for April:
WIP, beginning Inventory:
Direct materials $55,000
Conversion costs 40,000
Direct materials added 145,100
Conversion costs added 188,065
Required:
a) What is the number of total spoiled units? Normal spoilage totals? Abnormal spoilage totals?
b) Compute the equivalent units for both direct materials and conversion costs using the weigh average method of process costing? What is the total cost per equivalent unit? Show computations.
c) How much costs are assigned to cost of goods manufactured and cost of ending inventory of work in process? Show computations.
Answers
Answer:
Total spoiled units = 7000
Normal spoilage total = 3500
Abnormal spoilage total = 3500
Total cost per equivalent unit = $3.80
Cost of goods manufactured = $224,000
Ending WIP = $201,165
Explanation:
Kindly check attached pictures
Final answer:
The solution involves calculating normal spoilage based on the percentage provided, computing equivalent units for direct materials and conversion costs using the weighted average method, and assigning costs to manufactured goods and ending inventory based on these computations.
Explanation:
To address the question regarding Fish Fillet Incorporated and its production process, let's break down the inquiry into parts for clarity. The problem involves calculating spoiled units, determining normal and abnormal spoilage, computing equivalent units using the weighted average method, and finally assigning costs to goods manufactured and ending inventory of work in process.
a) Spoiled Units Calculation
Given that spoiled fillets constitute 3.5% of the good fillets and 100,000 fillets were completed and transferred out, we can calculate the normal spoilage totals. Assuming all spoilage is considered normal, the calculation would be (100,000 / (1 - 0.035)) * 0.035 to find the spoiled units. However, without knowing the exact total produced before spoilage, a precise number for spoiled units cannot be readily provided without assumptions.
b) Equivalent Units for Direct Materials and Conversion Costs
To compute equivalent units for both direct materials and conversion costs using the weighted average method, one must account for the percentage completion of beginning work in process, units introduced and completed during the period, and the ending inventory's stage of completion. Direct materials are added at the beginning, making their equivalent units the total units started plus beginning inventory. Conversion costs, incurred evenly, would be calculated by weighting the percentage completion.
c) Cost Assignment to Goods Manufactured and Ending Inventory
The costs are assigned based on the equivalent units computed for direct materials and conversion costs, considering the costs added during the period and the beginning inventory costs. The total cost per equivalent unit would guide the allocation to the cost of goods manufactured and the ending inventory.
Related Questions
Indicate whether each of the following audit procedures is a test of controls, a substantive test, or dual-purpose test. Next, indicate the financial statement assertion most closely related to each audit procedure.a. Vouch recorded sales invoices to supporting shipping documents. b. Inspect recorded sales invoices for credit approval. c. Vouch recorded sales invoices prices to the approved price list. d. Send confirmations to all customers regarding accounts receivable. e. Recalculate the arithmetic accuracy of the recorded sales invoices. f. Compare the shipment date of record sales invoices with the invoice record date. g. Trace recorded sales invoices to posting in the general ledger control account and in the correct customer's account. h. Select a sample of shipping documents from the shipping shipping department file and trace shipments to recorded sales invoices. i. Scan recorded sales invoices and shipping documents for missing numbers in sequence. j. Vouch sales invoices and shipping documents. k. Evaluate the adequacy of the allowance for doubtful accounts.
Answers
Answer:
The audit procedures whether controls, a substantive test, or dual-purpose test and the Financial statement assertion of the following procedures are given in the explanation below:
Explanation:
1.Vouch recorded sales invoices to supporting shipping documents.----
-----Dual-purpose/occurence and existence
2)Inspect recorded sales invoices for credit approval-----Test of controls/valuation and occurence
3) Vouch recorded sales invoices prices to the approved price list.
--Test of Controls/accuracy
4. Send confirmations to all customers regarding accounts receivable.
----Substantive test/existence
5) Recalculate the arithmetic accuracy of the recorded sales invoices.-----dual-purpose/accuracy and valuation
6) Compare the shipment date of record sales invoices with the invoice record date.-----dual-purpose/cut-off and completeness
7.)Trace recorded sales invoices to posting in the general ledger control account and in the correct customer's account-----dual-purpose/completeness
8)Select a sample of shipping documents from the shipping shipping department file and trace shipments to recorded sales invoices-------------dual purpose/completeness
9)Scan recorded sales invoices and shipping documents for missing numbers in sequence-----test of controls/completeness
10)Vouch sales invoices and shipping documents.-----Dual-purpose/occurence and existence
11.) Evaluate the adequacy of the allowance for doubtful accounts.
----Substantive/Valuation
The procedures are tests that auditors perform to ensure that the financial statements of a company are presented fairly in all material respects. They fall into three categories: tests of controls, substantive tests, and dual-purpose tests, and relate to a specific financial statement assertion such as accuracy, existence, completeness, etc.
Explanation: a. Vouch recorded sales invoices to supporting shipping documents. This is a dual-purpose test, and it pertains to the financial statement assertions of accuracy and completeness.
b. Inspect recorded sales invoices for credit approval. This is a test of controls, relating to the financial statement assertion of rights and obligations.
c. Vouch recorded sales invoices prices to the approved price list. This is a substantive test, closely related to the financial statement assertion of accuracy.
d. Send confirmations to all customers regarding accounts receivable. This is a dual-purpose test, related primarily to the financial statement assertion of existence.
e. Recalculate the arithmetic accuracy of the recorded sales invoices. This is a substantive test, related mainly to the financial statement assertion of accuracy.
f. Compare the shipment date of record sales invoices with the invoice record date. This is a dual-purpose test related to the financial statement assertions of cutoff and completeness.
g. Trace recorded sales invoices to posting in the general ledger control account and in the correct customer's account. This is an example of a dual-purpose test relating to the financial assertion of completeness.
h. Select a sample of shipping documents from the shipping department file and trace shipments to recorded sales invoices. This is a dual-purpose test and pertains to the financial statement assertions of completeness and accuracy.
i. Scan recorded sales invoices and shipping documents for missing numbers in sequence. This is a dual-purpose test concerned with the financial statement assertion of completeness.
j. Vouch sales invoices and shipping documents. This is a dual-purpose test, related primarily to the financial statement assertion of existence and accuracy.
k. Evaluate the adequacy of the allowance for doubtful accounts. This is a substantive test related to the financial statement assertion of valuation.
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You place an order for 300 units of inventory at a unit price of $135. The supplier offers terms of 3/10, net 60. a-1. How long do you have to pay before the account is overdue? a-2. If you take the full period, how much should you remit?
Answers
Answer:
a1. 60 days
a2.Remittance = $40,500
b1- 1 % discount offered
b-2, 10days
b-3 =$40,095 ± 0.1
c-1 Implicit interest $405 ± 0.1%
c-2 Days' credit days=50 days
Explanation:
a1. 60 days
a2.0rder for 300 units of inventory at a unit price of $135
Remittance = 300($135)
Remittance = $40,500
b- 1 % discount offered
b-2, 10days
b-3 Remittance (1- 0.01) $40,500
(0.99)$40,500
Remittance =$40,095 ± 0.1%
c-1 Implicit interest $40,500- $40,095
Implicit interest $405 ± 0.1%
c-2
Days' credit days 60-10
Days' credit days=50 days
Goodwin Ross Mid Cap Growth is a fund that lets its investors buy ownership in a market basket that contains different securities. The fund's market basket has a composition that is similar to the composition of the Dow Jones Industrial Average stock index. In this scenario, Goodwin Ross MidCap Growth is a(n) _____.
Answers
Answer:
exchange-traded fund
Explanation:
Goodwin Ross Mid Cap Growth is an investment company that offer their clients different set of portfolios to invest their clients’ money. According to the information the Goodwin Ross Mid Cap Growth is an exchange-traded fund company that invests in different portfolios such as stocks, commodities and bonds in the financial market similar to the composition of the Dow Jones.
For an organization to be successful, its leaders must be fully aware of their environment. What are the primary internal and external organizational considerations for the development of a global strategic plan?In your opinion, which 3 considerations have the most impact and why?
Answers
Answer:
“Internal organisation considerations for the development of a strategic plan include workforce strengths and weaknesses, financial considerations and organisational culture”.
The structure and culture are significant in light of the fact that they furnish the organization with the capacity change and prevail through the changing states of the organization. Regardless of whether the arrangement fits into the organization's way of life and whether the authoritative structure can alter or adjust to the change may influence the chance of following a particular vital course spread out by the organization. To deal with workforce gives the organization must think about the qualities and shortcomings of the workforce when they are making the vital arrangement. A workforce with various abilities will respond distinctive to the adjustments in the key arrangement. Workers that are imaginative and enhanced will adjust and assume responsibility for the new vital arrangement while untalented representatives will react to the new arrangement in an altogether different way. During the upper hand phase of arranging, the organization must recognize key chances. This can appear as innovation, licenses, elite agreements, the area of the organization, and in any event, having the associations the organization similarly as with others. At last, is the money related circumstance of the organization, which should be considered before beginning the key getting ready for the organization. Right now, you should consider how much cash the organization needs to acquire the objectives of the key arrangement. At that point the objectives ought to be set that are viewed as reachable by the organization.
As I would like to think, the budgetary thought would be the most significant stage. After all there would be no compelling reason to get ready for an adjustment in the activity of the organization if there was no money related sponsorship to help such a change.
The essential outside hierarchical contemplation in building up a vital arrangement are the chances, dangers, and patterns. These segments are a piece of the SWOTT Analysis. Long haul arranging, observing and looking into industry patterns, defining objectives, executing strategy, methods, and checking and exploring impacts of activities are for the most part approaches to achieve a key arrangement. The most significant thought relies upon the SWOTT Analysis. The market, contenders, and assets are continually evolving. Given the aftereffects of these changes, the thought might be modified. On the off chance that I needed to make a theory with regards to what the most significant thought would be in the present climate, I would state the economy! It is the thing that enables a business to succeed or fall flat.
g On January 2, Yorkshire Company acquired 34% of the outstanding stock of Fain Company for $400,000. For the year ended December 31, Fain Company earned income of $104,000 and paid dividends of $32,000. Prepare the entries for Yorkshire Company for the purchase of the stock, the share of Fain income, and the dividends received from Fain Company.
Answers
Answer:
See the explanation below:
Explanation:
Share of profit of Fain Company = $104,000 * 34% = $35,350
Dividend received = $32,000 * 34% = $10,880
Date Details Dr ($) Cr ($)
Jan. 2 Investment in Fain Company 400,000
Cash 400,000
To record payment for investment in Fain Company
Dec. 31 Investment in Fain Company 35,350
Share of profit of Fain Co. 35,000
To record share of profit in Fain Company
Dec. 31 Cash 10,880
Investment in Fain Company 10,880
To record received from investment in Fain Company
Olive Corp. currently makes 20,000 subcomponents a year in one of its factories. The unit costs to produce are: Per unit Direct materials $ 12 Direct labor 8 Variable manufacturing overhead 12 Fixed manufacturing overhead8 Total unit cost #40 An outside supplier has offered to provide Olive Corp. with the 20,000 subcomponents at a $36 $36 per unit price. Fixed overhead is not avoidable. What is the maximum price Olive Corp. should pay the outside supplier?
a. $32
b. $36
c. $40
d. $44
Answers
Answer:
a. $ 32
Explanation:
Computation of purchase price
The company can make the components with a variable cost which is as follows:
Direct Materials per unit $ 12
Direct Labour per unit $ 8
Variable Manufacturing overhead per unit $ 12
Total Variable Cost per unit $ 32
Since the fixed manufacturing overhead shall not be reduced, the maximum price that can be paid is the internal variable costs.
So the maximum purchase price is $ 32
Olive Corp. should only take into account variable costs—direct materials, direct labor, and variable overhead—which come to $32—while deciding whether to create or buy. Unavoidable fixed overhead expenses are not taken into account. Therefore, Olive Corp. should not pay the outside provider more than $32. The correct option is a.
Explanation:Olive Corp. must decide whether to make a make or purchase decision. The subcomponent can be produced internally for a total cost of $40 per unit. The supplier is offering a price of $36. Olive Corp. will pay fixed manufacturing overhead even if it chooses to buy from the supplier because it is an unavoidable expense.
As a result, it need to be disregarded when figuring out the highest amount Olive Corp. should have to pay. The unit cost without fixed overhead as a result. The correct option is a.
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For all parts of this question, assume the following: The CAPM holds. The riskless rate of return is 5%. The market portfolio has expected rate of return of 15% and standard deviation of 20%. 1. Burger Inc. stock has an expected rate of return of 4% per year and standard deviation of 30%. Linda Belcher says, "No rational person would hold a risky asset expected to return less than the riskless rate! It must be mispriced." Is Linda correct? Explain. 2. Consider the following data on two stocks whose returns have a correlation of 0.2 with each other: Expected Return Standard Deviation Walmart 5% 12% Tesla 20% 35% Bob Belcher owns $25,000 worth of Walmart stock, $10,000 worth of Tesla stock, and no other investments. a) Compute expected rate of return (% per year), and standard deviation of Bob’s portfolio. b) Mr. Belcher says he cannot tolerate any more standard deviation than her portfolio has now. Given this risk tolerance, is he maximizing her expected return? If he is, explain why? If he is not, explain how she should invest to maximize expected return (give a specific trading and investment strategy).
Answers
Answer 1:
The CAPM model shows that the points (return and stdv) which are below the capital market line are in infeasible reason. This means no investor, be it risk-taking or risk-neutral, won't invest in such portfolios.
If a risk free asset is giving a return of 5%, then no one would go for an asset with 30% stdv (risky asset) to get 4% return. Hence, Linda is right.
Answer 2:
Out of 35000 of available funds, 25000 (71.43%) are invested in Walmart and 28.57% are invested in tesla.
Expected return = W1*R1 +W2*R2 where W1 and W2 are the weights and R1 and R2 are the expected returns from each stocks.
hence, the expected return of the portfolio = 0.7143*5% + 0.2857*20%= 9.2858%
portfolio variance = (W1S1)^2 + (W2S2)^2 + 2*W1W2S1S2Cor, where S1 and S2 are stdv of portfolio and Cor is the correlation between these stocks
stdv of portfolio
=( (0.7128*0.12)^2 + (0.2857*0.35)^2 + 2*0.7128*0.2857*0.12*0.35*0.2)^0.5 = 14.4%
If he wants to retain the same stdv, we need to find corresponding expected return on Capital market line, which is 12% return.
12% >= W1'*5% + W2'*20%
W1'= 1- W2'
12% = 5% - 5%*W2' +W2'*20%
W2 =
0.466 = 16333
Hence, he should invest 16333 in Tesla and remaining in Walmart
Answer:
Explanation:
If a risk free asset is giving a return of 5%, then no one would go for an asset with 30% standard deviation (risky asset) to get 4% return. Hence, Linda is right.
2. Out of 35000 of available funds, 25000 (71.43%) are invested in Walmart and 28.57% are invested in tesla.
Expected return = W1*R1 +W2*R2 where W1 and W2 are the weights and R1 and R2 are the expected returns from each stocks.
hence, the expected return of the portfolio = 0.7143*5% + 0.2857*20%= 9.2858%
portfolio variance = (W1S1)^2 + (W2S2)^2 + 2*W1W2S1S2Cor, where S1 and S2 are standard deviation of portfolio and Cor is the correlation between these stocks
standard deviation of portfolio =( (0.7128*0.12)^2 + (0.2857*0.35)^2 + 2*0.7128*0.2857*0.12*0.35*0.2)^0.5 = 14.4%
12% >= W1'*5% + W2'*20%
W1'= 1- W2'
12% = 5% - 5%*W2' +W2'*20%
W2 = 0.466 = 16333
Hence, he should invest 16333 in Tesla and remaining in Walmart
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You are the CFO of a US firm whose wholly owned subsidiary in Mexico manufactures component parts for your U.S. assembly operations. The subsidiary has been financed by bank borrowings in the United States. One of your analysts told you that the Mexican peso is expected to depreciate by 30 percent against the dollar on the foreign exchange markets over the next year. What actions, if any, should you take
Answers
Answer:
Explanation:
When the Peso depreciates by 30%, the firm can save money on the costs of production as the inputs would be less costly but the market for the firm in Mexico would be affected negatively as the depreciation of the peso would mean that now, the consumer can buy more goods with the same amount of money which will increase the demand. The loans that the subsidiary has taken would also be affected as it has to pay more for the collateral.
If the company reduces the inventory and stock the foreign receivables before the depreciation occurs to minimize the loss. Before the depreciation happens, the firm can convert the pesos denomination to the dollar so that its value doesn't fall.
Analyzing the situation where the Mexican peso is expected to depreciate against the dollar, several actions can be taken such as converting the US dollar loans into peso loans, hedging currency risk through forward contracts, and potential business expansion owing to cheaper foreign investments in Mexico.
Explanation:As the CFO of a firm with a subsidiary in Mexico that is anticipated to face a depreciation of the Mexican peso by 30 percent against the dollar, you might need to consider some strategic moves. Generally, expected depreciation in a currency can lead investors to divest themselves of that currency, leading to an increase in currency supply and a decrease in demand, thus reducing the currency's value.
In this specific case, the expected depreciation of the peso might increase your operational costs since your company would need more pesos to repay its US dollar-based loans. One potentially beneficial action can be, if possible, converting US dollar loans into peso loans before the depreciation occurs. This way, even if the peso depreciates, the subsidiary firm can pay back its loans in weaker pesos.
Another strategy could be to hedge your currency risk. For instance, using forward contracts to lock in today's exchange rate for future transactions, can be particularly helpful if the currency is indeed going to depreciate.
Moreover, as the peso depreciates, foreign investments in Mexico and exports from Mexico would become cheaper for foreign entities, presenting an opportunity to potentially expand your business further in Mexico.
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Tyrell Co. entered into the following transactions involving short-term liabilities. Year 1 Apr. 20 Purchased $38,000 of merchandise on credit from Locust, terms n/30. May 19 Replaced the April 20 account payable to Locust with a 90-day, 8%, $35,000 note payable along with paying $3,000 in cash. July 8 Borrowed $60,000 cash from NBR Bank by signing a 120-day, 11%, $60,000 note payable. __
Answers
Solution:
1) Maturity date
locust NBR fargo
date of the note 19-May 8-Jul 28-Nov
term of note 90 120 60
maturity date 17-Aug 5-Nov 27-Jan
2) interest due at maturity
principal * Rate * time = interest
locust 35,000 * 8% * 90/360 = 700
NBR 63,000 * 11% * 120/360 = 2310
Fargo 33,000 * 7% * 60/360 = 385
3) Amount in adjusting entry
33,000*7%*33/360
= 211.75
principal * Rate * time = interest
interest to be acccrued 33,000 * 7% * 33/360 = 211.75
4) interest expense to be recorded in 2017
198
principal * Rate * time = interest
interest to recorded in 2018 33,000 * 7% * 27/360 = 173.25
Journal entries
Date Accounting titles & Explanations Debit Credit
2016
20-Apr inventory 38,000
Accounts payable 38,000
19-May Accounts payable 38,000
cash 3,000
notes payable 35,000
8-Jul Cash 63,000
notes payable 63,000
17-Aug notes payable 35,000
interest expense 700
cash 35,700
5-Nov notes payable 63,000
interest expense 2,310
cash 65,310
28-Nov Cash 33,000
notes payable 33,000
31-Dec interest expense 211.75
interest payable 211.75
2017
27-Jan notes payable 33,000
interest payable 211.75
interest expense 173.25
cash 33,385
Tyrell Co. makes purchasing and borrowing transactions that create short-term liabilities. These liabilities, like the loan from Singleton Bank to Hank's Auto Supply, need to be paid back with interest.
Explanation:The question pertains to the accounting process of Tyrell Co.'s short-term liabilities. In the first instance, Tyrell Co. buys $38,000 worth of merchandise from another company, Locust, creating a short-term liability, as it's on credit terms n/30, meaning the amount is due within 30 days.
Later, the company replaced the account payable with a 90-day, 8%, $35000 note payable and paid $3000 in cash. This means the liability has been transformed from an account payable to a note payable
In the subsequent transaction, the company borrows $60,000 cash from NBR Bank by signing a 120-day, 11%, $60,000 note payable. This is another short-term liability as the loan has a maturity of less than one year. The interest rate represents the cost of borrowing.
In this situation, these transactions are similar to the one where Singleton Bank lends $9 million to Hank's Auto Supply. The loans in both the scenarios need to be paid back with interest, thereby, creating short-term liabilities on the balance sheets of Tyrell Co. and Hank's Auto Supply.
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A rain barrel is a container that captures and stores rainwater for landscape and garden use during dry periods. As a result, rain barrels benefit the community through water conservation. If homeowners do not consider this external benefit of rain barrels, then a. the socially optimal quantity of rain barrels will be larger than the equilibrium quantity of rain barrels. b. the socially optimal quantity of rain barrels will be smaller than the equilibrium quantity of rain barrels. c. the socially optimal price of rain barrels will be lower than the equilibrium price of rain barrels. d. the market for rain barrels would benefit from a tax on rain barrels.
Answers
Answer:
A. The socially optimal quantity of rain barrels will be larger than the equilibrium quantity of rain barrels.
Explanation:
Rain barrels capture water from a roof and hold it for later use such as on lawns, gardens or indoor plants. Collecting roof runoff in rain barrels reduces the amount of water that flows from your property. It's a great way to conserve water and it's free water for use in your landscape. The rain has it's own benefits which can be seen as follows;
1. Save Money. Reduce your water bill with a rain barrel's water catch. ...
2. Reduce Runoff Pollution & Erosion. Runoff from rains pick up soil, oil, pesticides, fertilizers and push them to other areas. ...
3. Promote Plant & Soil Health. ...
4. Conserve Water. ...
5.Wash Cars & Windows.
The socially optimal quantity of rain barrels is larger than the equilibrium quantity because homeowners often do not consider the external benefits like water conservation and reduced stormwater runoff. This leads to underinvestment in rain barrels. Therefore, the correct answer is option a.
A rain barrel is a system that captures and stores rainwater, offering benefits such as water conservation and reduced stormwater runoff. If homeowners do not account for these external benefits, the market fails to achieve the socially optimal quantity of rain barrels.
The correct answer to this question is: a. the socially optimal quantity of rain barrels will be larger than the equilibrium quantity of rain barrels. This is because the external benefits are not included in the decision-making of individual homeowners, leading to underinvestment in rain barrels from a societal perspective.Examples of these benefits are reduced reliance on municipal water systems and improved watershed habitats due to less stormwater runoff. Thus, without considering these benefits, fewer rain barrels are installed than what is socially optimal.Blur Corp. has an expected net operating profit after taxes, EBIT(1 – T), of $7,600 million in the coming year. In addition, the firm is expected to have net capital expenditures of $1,140 million, and net operating working capital (NOWC) is expected to increase by $10 million. How much free cash flow (FCF) is Blur Corp. expected to generate over the next year?
Answers
Answer:
Free cash flow (FCF) for next year = $ 6,450 million
Explanation:
Free cash flow represents the amount that is left to all the providers of capital after the payment of all all operating expenses, working capital and investment in fixed asset expenditures.
It is computed as cash flow made from operation less capital expenditures
For Blur Communications
The Free cash flow
= EBIT (1-T) - increase in capital expenditure - increase in working capital
= 7600 - $1,140 - 10
= $ 6,450 million
Free cash flow (FCF) for next year = $ 6,450 million
Answer:
$6,450,000
Explanation:
Free cash flow (FCF) can be defined as the money or cash that remained after the company might have pay for its operating expenses as well as capital expenditures which is why companies, organisation, business owner or individual make use of FREE CASH FLOW to understand the profitability of their business.
Blur Corp
FCF = NOPAT – Net investment in operating capital
= $7,600M – (1,140+10)
= $7,600M - $1,150
=$6,450,000
Therefore Blur Corp is expected to generate free cash flow (FCF) of $6,450,000 over the next year.
On June 30, 2018, Adams Company’s total current assets were $504,500 and its total current liabilities were $278,000. On July 1, 2018, Adams issued a short-term note to a bank for $40,200 cash. Required Compute Adams’s working capital before and after issuing the note. Compute Adams’s current ratio before and after issuing the note. (Round your answers to 2 decimal places.)
Answers
Answer:
Old Current Ratio = 1.815
New Current Ratio = 1.712
Explanation:
Working Capital = Current Assets - Current Liabilities
Given : Current Assets = 504500 , Current Liabilities = 278000
Current Ratio = Current Assets / Current Liabilities
= 504500 / 278000 = 1.815
Issue of short term note (current liability) to bank for 40200 cash (current asset) leads to following change in working capital :-Current Assets = 504500 + 40200 = 544700
Current Liabilities = 278000 + 40200 = 318200
Current Ratio = Current Assets / Current Liabilities
= 544700 / 318200 = 1.712
Bee Company issued 5-year, 7% bonds with a par value of $95,000. The company received $92,947 for the bonds. Using the straight-line method to amortize the discount, the amount of interest expense for the first semiannual interest period is: $6,650.00. $7,060.60. $3,530.30. $3,119.70. $3,325.00.
On January 1, a company issues bonds dated January 1 with a par value of $200,000. The bonds mature in 5 years. The contract rate is 7%, and interest is paid semiannually on June 30 and December 31. The market rate is 6% and the bonds are sold for $208,531. The journal entry to record the issuance of the bond is:
Debit Cash $208,531; credit Discount on Bonds Payable $8,531; credit Bonds Payable $200,000.
Debit Bonds Payable $200,000; debit Bond Interest Expense $8,531; credit Cash $208,531.
Debit Cash $208,531; credit Bonds Payable $208,531.
Debit Cash $200,000; debit Premium on Bonds Payable $8,531; credit Bonds Payable $208,531.
Debit Cash $208,531; credit Premium on Bonds Payable $8,531; credit Bonds Payable $200,000.
On January 1, a company issues bonds dated January 1 with a par value of $270,000. The bonds mature in 5 years. The contract rate is 11%, and interest is paid semiannually on June 30 and December 31. The market rate is 10% and the bonds are sold for $280,420. The journal entry to record the first interest payment using straight-line amortization is:
Debit Bond Interest Expense $15,892.00; credit Premium on Bonds Payable $1,042.00; credit Cash $14,850.00.
Debit Interest Payable $14,850.00; credit Cash $14,850.00.
Debit Bond Interest Expense $15,892.00; credit Discount on Bonds Payable $1,042.00; credit Cash $14,850.00.
Debit Bond Interest Expense $13,808.00; debit Premium on Bonds Payable $1,042.00; credit Cash $14,850.00.
Debit Bond Interest Expense $13,808.00; debit Discount on Bonds Payable $1,042.00; credit Cash $14,850.00.
Answers
Answer:
A) $3,530.3
B)
Debit Cash $200,000; debit Premium on Bonds Payable $8,531; credit Bonds Payable $208,531.
C)
Debit Bond Interest Expense $13,808.00; debit Premium on Bonds Payable $1,042.00; credit Cash $14,850.00.
Explanation:
discount:
95,000 - 92,947 = 2,053
This amount is distribute equally among all interest paymeny:
2,053 / 10 payment = 205.3
cash outlay + amortization on discount = interest expense
95,000 x 7% x 1/2 + 205.3 = $3,530.3
B)
debit the cash received
we credit the bond payable for their face value
we adjust using premium when lower and premium when higher
C)
we calcualte the premium and divide oer total payment to get the amortization:
280,420 - 270,000 = 10,420 / 10 = 1,042
cash outlay - amortization on premium = interest expense
270,000 x 11% x 1/2 - 1,042 = 13,808
A firm is offered trade credit terms of 2/8, net 45 days. The firm does not take the discount. It pays after 58 days. What is the effective annual cost (EFF%) of not taking this discount
Answers
Answer: 15.89%
Explanation:
Since no discounts were taken, this company made your job a whole lot easier because if we are for instance assuming a 365 day year then you simply take the base period of payments which is 58 days in this scenario and divide by 365.
So it would come out like,
= 58/365
= 15.89%
If you need any clarification just drop a comment. Cheers.
Suppose when the price of a cookie is $2.50, the quantity demanded is 50, and when the price is $1, the quantity demanded is 200. Using the midpoint method, the price elasticity of demand is:
Answers
Answer:
The price elasticity of demand is -1.40
Explanation:
E = [Q2-Q1/(Q2+Q1/2)]/[P2-P1/(P2+P1/2)]
= [200-50/(200+50/2)] / [1-2.5/(1+2.5/2)]
= [150/125]/[1.5/1.75]
= 1.2/0.8571
= -1.4 0
the price elasticity of demand is -1.40
Neakanie Industries sells specialized mountain bikes. Each specialized bike purchased includes free maintenance service for 12 months. The price of the specialized bike is $1,400. When sold separately, a maintenance contract is $600 and a comparable but non-specialized bike is $1,000. What amount of revenue will Neakanie recognize at the date of sale for each bike?
Answers
$875 is the amount of revenue that will be recognized.
Explanation:
Entire price for specialized bike will be appropriated in the ratio of individual prices of the non- specialized bikes and the maintenance contract.
The following calculation is made to calculate the revenue from the sale of a bike:
= 1400 multiply with (1000 divide by 1600)
After solving the above equation we get,
= $875 will be recognized by Neakanie at the date of sale.
Hence, the correct option will be with an amount of $875
Note: a maintenance contract is $600 and a comparable but non-specialized bike is $1,000 when added sums to $1600 amount.
rapper Corporation is comparing two different capital structures, an all-equity plan (Plan I) and a levered plan (Plan II). Under Plan I, the company would have 200,000 shares of stock outstanding. Under Plan II, there would be 150,000 shares of stock outstanding and $3 million in debt outstanding. The interest rate on the debt is 8 percent, and there are no taxes. a. If EBIT is $675,000, what is the EPS for each plan
Answers
Answer:
EPS formula = (net income - preferred stock dividends) / weighted average outstanding stocks
Earnings per share (EPS) for Plan I:
EPS = $675,000 / 200,000 = $3.375 or $3.38 per share
Earnings per share (EPS) for Plan II:
net income = EBIT - interests = $675,000 - $240,000 = $435,000
EPS = $435,000 / 150,000 = $2.90 per share
On March 15, American Eagle declares a quarterly cash dividend of $0.060 per share payable on April 13 to all stockholders of record on March 30. Required: Record American Eagle's declaration and payment of cash dividends for its 223 million shares. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answer in dollars, not in millions (i.e. 5.5 should be entered as 5,500,000).)
Answers
Answer:
American Eagle Journal entries
March 15 (Declaration date)
Dr Dividends $13,380,000
Cr Dividends Payable $13,380,000
March 30 (Date of Record)No Entry
April 13 (Payment Date)
Dr Dividends Payable $13,380,000
Cr Cash $13,380,000
Explanation:
March 15 (Declaration date)
Dr Dividends (223 million shares x $0.060)
$13,380,000
Cr Dividends Payable $13,380,000
March 30 (Date of Record)No Entry
April 13 (Payment Date)
Dr Dividends Payable (223 million shares x $0.060) $13,380,000
Cr Cash $13,380,000
8-8 Outsourcing (LO 3) The Outland Company manufactures 1,000 units of a part that could be purchased from an outside supplier for $12 each. Outland's costs to manufacture each part are as follows:
Direct materials $ 2
Direct labor 3
Variable manufacturing overhead 4
Fixed manufacturing overhead 8
Total $17
All fixed overhead is unavoidable and is allocated based on direct labor. The facilities that are used to manufacture the part have no alternative uses.
Calculate relevant cost to make Relevent cost to make.
Answers
Answer:
relevant cost to make are $9.00
Explanation:
Consider the avoidable costs only because they are relevant for this decision.
Direct materials $2 .00
Direct labor $3 .00
Variable manufacturing overhead $4 .00
Total $9.00
The relevant cost to make the part is $9 per unit, which includes direct materials, direct labor, and variable manufacturing overhead.
The question asks to calculate the relevant cost to make a part in the context of Outsourcing decisions. When considering outsourcing, only variable costs and avoidable fixed costs are relevant. Since the fixed manufacturing overhead is unavoidable and there are no alternative uses for the facilities, the fixed cost is not relevant to this decision.
To calculate the relevant cost to make the part, we add the direct materials, direct labor, and variable manufacturing overhead: $2 (direct materials) + $3 (direct labor) + $4 (variable manufacturing overhead) = $9. Therefore, $9 per unit is the relevant cost to make the part.
The marginal product of labor can be defined as the change in a. profit divided by the change in labor. b. output divided by the change in labor. c. labor divided by the change in output. d. labor divided by the change in total cost.
Answers
Answer:
The correct answer is b. output divided by the change in labor.
Explanation:
The marginal product means the additional units of production that are added to the total production when the labor is increased by 1 unit and is a measure of production efficiency.
In the company's accounting system all fixed expenses of the company are fully allocated to products. Further investigation has revealed that $247,000 of the fixed manufacturing expenses and $208,000 of the fixed selling and administrative expenses are avoidable if product L07E is discontinued. The financial advantage (disadvantage) for the company of eliminating this product for the upcoming year would be:
Answers
Answer:
($140,000)
Explanation:
The computation of financial advantage (disadvantage) for the company is shown below:-
If product LO7E is discontinued then $247,000 and $208,000 would contribute to savings and loss of contribution equals $595,000 ($990,000-$ 395,000)
Financial advantage/Disadvantage = Fixed manufacturing expenses + Fixed selling and administrative expenses - Contribution
= $247,000 + $208,000 - $595,000
= ($140,000)
Therefore for computing the financial advantage (disadvantage) for the company we simply applied the above formula.
A survey of 200 public universities indicated that the 25th percentile of the yearly tuition cost of the universities was $4600 and the 75th percentile was $7300. The minimum value was $2000, the median was $6000, and the maximum was $10,000. Use this information to construct a boxplot for the yearly tuition costs.
Answers
Answer:
Explanation:
The boxplot for the yearly tuition costs has been attached as a file.
To construct a boxplot for the yearly tuition costs, use the five-number summary provided. Draw a number line with the values marked and create a boxplot where the box represents the interquartile range and the line inside the box is the median. Values outside the whiskers are outliers.
Explanation:To construct a boxplot for the yearly tuition costs based on the given information, we can use the five-number summary. The five-number summary consists of the minimum value, the 25th percentile, the median, the 75th percentile, and the maximum value. In this case, the minimum value is $2000, the 25th percentile is $4600, the median is $6000, the 75th percentile is $7300, and the maximum value is $10000.
The boxplot can be drawn on a number line, with the minimum value on the left, the maximum value on the right, and the other values marked in between. The box represents the interquartile range (the distance between the 25th and 75th percentiles), while the line inside the box represents the median. Any values outside the whiskers (lines extending from the box) are considered outliers.
Using the given values, the boxplot for the yearly tuition costs would be as follows:
Minimum: $200025th percentile: $4600Median: $600075th percentile: $7300Maximum: $10000Learn more about Boxplot here:https://brainly.com/question/38534950
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U.S. Products operates two divisions with the following sales and expense information for the month of May: North Division: Sales $240,000; Operating income $72,000, Operating assets $600,000. South Division: Sales $160,000; Operating income $80,000, Operating assets $800,000. U.S. Products expects a minimum return of 10% should be earned from all investments. North Division’s return on investment for May is:
Answers
Answer:
12%
Explanation:
The income earned over on the investment made in the business is known as the return on Investment. it is calculated by dividing net income for the period with the total investment made in the business.
In this question we have operating income and operating asset to calculate the return on investment.
North division
Return on Investment = (Operating Income / Operating Assets) x 100
Return on Investment = ( $72,000 / $600,000 ) x 100 = 12%
The North Division's return on investment (ROI) for the month of May is 12%, calculated by dividing the operating income by the operating assets and then multiplying by 100.
The student has asked for the calculation of the return on investment (ROI) for the North Division of U.S. Products for the month of May. To calculate this, we use the formula: ROI = (Operating Income / Operating Assets) × 100. For the North Division, this calculation would be: ROI = ($72,000 / $600,000) × 100, which simplifies to ROI = 0.12 × 100 = 12%. Therefore, the North Division's return on investment for May is 12%.
Ford Motor Company has been attacked by its own sustainability committee for failing to do enough to cut vehicular greenhouse gas emissions. According to the committee's 2005 report, "Ford has failed to define a goal for reducing global emissions from the company's products." The report called for the company to set clear targets to improve fuel economy and to cut factory emissions. This committee wants Ford to establish emission control ____.
Answers
Answer:
Standard
Explanation:
The committee wants Ford to establish emission control standard.
Emission standard is a legal requirement that governs all forms of air pollutants which are released by a company's product into the atmosphere. Quantitative limits are set on specific air pollutants that have permission to be released at specific time periods.
Sustainability means addressing the current demands without compromising the generations' ability to meet their own.
We require social and economic resources due to organic resources. Environmentalism isn't the only aspect of sustainability.
The correct word for the blank is Standard
An environmental regulation is a governmental requirement that covers all types of air pollutants discharged into the environment by a specific product. Quantitative limitations are established for specific air pollutants that are allowed to be discharged for specific timeframes.
It is necessary to control the air pollutants and adapt the environment-friendly methods for the production and manufacturing of the goods and services for the fullfillment of the customer in the market at the prevailing demand of the goods and services.
To know more about the emission standard, refer to the link below:
https://brainly.com/question/9912932
A company has employed two workers A and B whose productivities are 20units and 15units respectively. The wage for A is k12 whilst B's is k8. Are these two employees optimally employed?
Answers
Answer:
no
Explanation:
In order to achieve optimal employment level, the ratio of productivity between employees must be equal to the ratio between their wages, e.g. an employee who is 25% more productive, should earn 25% more.
In this case, the productive ratio is 15:20 or 3:4, while the wage ratio is 8:12 or 2:3. Since the wage ratio is lower than the productivity ratio (2:3 < 3:4), the two employees are not optimally employed.
DL and MOH budget: The Production Department of Top of The World Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year: 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Units to be produced 10,700 9,700 11,700 12,700 Each unit requires 0.25 direct labor-hours and direct laborers are paid $14.00 per hour. In addition, the variable manufacturing overhead rate is $2.00 per direct labor-hour. The fixed manufacturing overhead is $67,000 per quarter. The only noncash element of manufacturing overhead is depreciation, which is $16,000 per quarter. a. Calculate the company’s total estimated direct labor cost for each quarter of the upcoming fiscal year and for the year as a whole. Assume that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the estimated number of units produced. b. Calculate the company’s total estimated manufacturing overhead cost and the cash disbursements for manufacturing overhead for each quarter of the upcoming fiscal year and for the year as a whole.
Answers
Answer and Explanation:
a. The computation of the total estimated direct labor cost is shown below:
Particulars 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year
Units to be produced 10,700 9,700 11,700 12,700 44,800
Multiply Direct labor hour per unit 0.25 0.25 0.25 0.25 0.25
Total Direct labor hour required 2675 2425 2925 3175 11200
Multiply Direct labor rate per hour $14 $14 $14 $14 $14
Estimated Direct labor cost $37,450 $33,950 $40,950 $44,450 $156,800
b. The total estimated manufacturing cost and the cash disbursement is shown below:
Particulars 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year
Units to be produced 10,700 9,700 11,700 12,700 44,800
Direct labor hour per unit 0.25 0.25 0.25 0.25 0.25
Multiply Total Direct labor hour required 2675 2425 2925 3175 11200
Variable manufacturing overhead rate $2 $2 $2 $2 $2
Estimated Variable manufacturing overhead cost $5,350 $4,850 $5,850 $6,350 $22,400
Add: Fixed manufacturing overhead $67,000 $67,000 $67,000 $67,000 $268,000
Total estimated manufacturing overhead $72,350 $71,850 $72,850 $73,350 $290,400
Less: depreciation $16,000 $16,000 $16,000 $16,000 $64,000
Cash disbursement for manufacturing overhead $56,350 $55,850 $56,850 $57,350 $226,400
We simply applied the above format to find out the manufacturing overhead, cash disbursement, and the direct labor cost
Gavin invested $40,000 in the Jason and Kelly Partnership for ownership equity of $40,000. Prior to the investment, land was revalued to a market value of $363,000 from a book value of $174,000. Jason and Kelly share net income in a 1:2 ratio. a. Provide the journal entry for the revaluation of land. If an amount box does not require an entry, leave it blank.
Answers
Answer:
A.
Dr Land $189,000
Cr Jason, Capital $63,000
Cr Kelly, Capital $126,000
B.
Dr Cash $40,000
Cr Gavin, Capital $40,000
Explanation:
A.
Dr Land ($363,000-$174,000) $189,000
Jason, Capital (1/3×189,000) $63,000
Kelly, Capital(1/2×189,000) $126,000
B.
Dr Cash $40,000
Cr Gavin, Capital $40,000
To record the revaluation of land, debit the Land account by $189,000 and credit the Land Revaluation Surplus account by the same amount, which reflects the increase in the land's market value.
The journal entry to record the revaluation of land in the Jason and Kelly Partnership due to its increase in market value from $174,000 to $363,000 is:
Debit Land account: $189,000 (which is $363,000 - $174,000)Credit Land Revaluation Surplus account: $189,000This reflects an increase in the asset's value on the balance sheet and recognizes the unrealized gain in equity.
Your company, which transports medical equipment to emerging nations, is conducting a political risk analysis before signing a contract to transport equipment within a South American country.
1. Which of the following findings in the political risk analysis would indicate that the company should NOT sign the contract?
a. Potential nationalization of invested assets
b. Devaluation of the country's currency
c. Uncertain prices for critical commodities
d. High government debt
Answers
The transports medical equipment to emerging nations, is conducting a political risk analysis before signing a contract to transport equipment within a South American country for the following reason which is,
b. Devaluation of the country's currency
Explanation:
In devaluation of the country's currency, the monetary authority formally gets a lower exchange rate out of the national currency in contrast to the foreign currency's reference.Company which transports medical equipment to emerging nations, which conducts a political risk analysis before signing a contract to transport equipment within a South American country, findings in the political risk analysis would indicate that the company should NOT sign the contract because of the Devaluation of the country's currency.A country devalues its currency can impact on its deficit because of the high demand of cheaper exports.Countries uses it devaluation of currencies as to achieve economic policy. The weaker currency compare to the rest of the world can really increase exports, reduce trade deficits and also reduce the cost of interest payments.In a political risk analysis for a company transporting medical equipment, potential nationalization of invested assets, devaluation of the country's currency, uncertain prices for critical commodities, and high government debt would all suggest high risks that may warrant not signing a contract.
Explanation:Conducting a political risk analysis is crucial for businesses looking to operate in foreign countries, especially when the business involves the transport of critical commodities like medical equipment. The findings of such an analysis that would indicate a high risk, suggesting that a company should potentially NOT sign the contract, would include potential nationalization of invested assets. Such a scenario implies that the government could take control of a company's assets without fair compensation, which would cause substantial losses. Devaluation of the country's currency implies a risk of loss in revenue and profitability for the business. It can make repatriation of profits difficult and introduces currency risk into the company's operations. Furthermore, uncertain prices for critical commodities can lead to supply chain disruptions and cost fluctuations, which negatively impact business planning and budgeting. Lastly, high government debt might signal a risk of economic instability or fiscal policy changes that could unfavorably impact business operations.
After the amount due on a sale of $22,600, terms 1/10, n/eom, is received from a customer within the discount period, the seller consents to the return of the entire shipment for a cash refund. The cost of the merchandise returned is $13,560. a. What is the amount of the refund owed to the customer?
Answers
Answer: $22,374
Explanation:
With terms of of 1/10 n (unclear), it means that the customer paid their dues within 10 days and were liable for a sales discount of 1%.
The amount of refund that the customer should get is therefore what they paid which is 1% less than the full amount.
Calculating for that then will be,
= Amount due *(1-discount rate)
= 22,600 * (1 - 0.01)
= $22,374
$22,374 is the amount due for refund.
The stockholders’ equity of TVX Company at the beginning of the day on February 5 follows. Common stock—$20 par value, 150,000 shares authorized, 64,000 shares issued and outstanding $ 1,280,000 Paid-in capital in excess of par value, common stock 424,000 Retained earnings 548,000 Total stockholders’ equity $ 2,252,000 On February 5, the directors declare a 2% stock dividend distributable on February 28 to the February 15 stockholders of record. The stock’s market value is $36 per share on February 5 before the stock dividend. 1. Prepare entries to record both the dividend declaration and its distribution.
Answers
Answer:
Feb 05
Dr Retained earnings $46,080
Cr Common stock dividend distributable $25,600
Cr Paid-in capital in excess of par value, Common stock $20,480
Journal entries Feb 28
Dr Common stock dividend
distributable$25,600
Cr Common stock, $20 par value $25,600
Explanation:
TVX Company
Journal entries
Feb 05
Dr Retained earnings $46,080
Cr Common stock dividend distributable $25,600
Cr Paid-in capital in excess of par value, Common stock $20,480
Journal entries Feb 28
Dr Common stock dividend
distributable$25,600
Cr Common stock, $20 par value $25,600
Feb. 5
Shares to be issued: 64,000 shares × 2% = 1,280 shares
Retained earnings: (1,280 shares × $36) = $46,080
Common stock dividend distributable: 1,280 shares × $20 per share = $25,600