Answer:
c. Four (4)
Explanation:
In comparing two online e-tailers, Walmart vs. DeepDiscounts, Walmart should be considered the better online business based on brand name reputation and the fact that Walmart has a brick and mortar store. Group of answer choices True False
Answer:
The correct answer is letter "A": True.
Explanation:
Walmart can be considered one of the pioneers when it comes to talking about online business. Its success does not only rely on the deals offered but also in the wide variety of products they sell. It does not imply DeepDiscounts.com is a bad online business but, compared to Walmart, the latter has several steps ahead.
Final answer:
It is not necessarily true that Walmart is the better online business compared to DeepDiscounts based solely on brand reputation and physical stores. Consumer preferences and the broader impacts of 'Wal-Martization' also play important roles in determining the success and preference of an online retailer.
Explanation:
Whether Walmart should be considered the better online business compared to DeepDiscounts solely based on brand name reputation and the presence of brick-and-mortar stores is not necessarily true. The statement oversimplifies the complex nature of online retail success. While factors such as brand reputation and the omni-channel approach that includes both online presence and physical stores may contribute to the strength of a business like Walmart, they do not automatically make it superior to an online e-tailer like DeepDiscounts.
Additionally, the effect of 'Wal-Martization' poses concerns about local economic impacts and employee compensation. This consideration might lead some consumers to prefer supporting businesses like L.L. Bean, which have a model heavily reliant on mail-order sales and focus on customer guarantees and quality reputation.
However, it is important to recognize that consumer behavior is influenced by a variety of factors, including product selection, prices, customer service, convenience, and personal values. These factors could lead some consumers to prefer smaller, niche e-tailers over larger chains.
What is meant by assessment?
a. Activities that occur between two or more businesses.
b. Provides services for connecting network resources across network domains.
c. Documenting rules, procedures, and guidelines to be tested against a system.
d. The encryption key that is held privately by the user.
Answer: Option C
Explanation: In simple words, assessment refers to checking something or someone in respect of its quality, quantity or other such characteristic as such. Usually assessment is done by comparing the actual results with some criteria that was set before.
By doing assessment one can not only find out if there is any problem he or she can also evaluate what were the reasons and whats steps should be taken further to resolve it.
Hence from the above we can conclude that the correct option is C .
Answer:
C. Documenting rules, procedures, and guidelines to be tested against a system.
Lake House. Harry has two houses, a house on the lake and a house in town. Rebecca wants to buy the house on the lake. Harry and Rebecca orally agree that Rebecca will buy the house on the lake for $300,000. Harry hurriedly writes out a contract providing that he would sell "his house" to Rebecca for $300,000. Harry signs the top of the document. Rebecca does not sign at all. No merger clause is included in the contract. Harry backs out of the contract, and Rebecca sues him. He tells the judge that the statute of frauds is not satisfied because he did not sign the document at the end and because Rebecca did not sign at all. He also tells the judge that, at any rate, the agreement referred to the house in town, not the house on the lake; and that under the parol evidence rule, he had the right to identify the correct house. Which of the following is true regarding Harry's assertion that the statute of frauds is not satisfied because Rebecca did not sign the document?
1)Is there an enforceable agreement? Which elements of an enforceable agreement exist?
2)Why or why not is there an enforceable agreement? Can Rebecca sue him?
3)Can Harry testify about the $20,000 gift? Why or why not?
Answer:
1. Yes
2. Yes
3. No
Explanation:
1 . Yes, there is an enforceable agreement between the seller (harry) and the buyer (Rebecca).
Elements of an enforceable agreement that exist between the contracting parties are:
Offer: Harry makes an offer to sell the house on the lake to Rebecca.
Acceptance: Rebecca accepts to buy the house on the lake from Harry for a consideration.
Consideration: Both the parties agree for a consideration i.e. $300,000.
Competency: Both the parties are competent and have capacity to enter into a contract.
Lawful purpose: Agreement between the parties was to transfer the ownership of the property from seller to the buyer. Hence, it is a lawful purpose.
2.Yes, it is an enforceable agreement because even though few essential terms were missing in the written agreement, the seller Rebecca would be allowed to prove her intention under due to the fact that the contract did not include merger clause. The court will look into the evidences or oral negotiations between the parties before entering into the contract.
The following essential elements were missing in the agreement at the time of entering into a contract:
The agreement should contain essential terms of the contract: name of the parties, subject matter, consideration.
Signature of both the parties.
Harry has only mentioned to sell “his house” and did not specify which house. This ‘issue’ can be resolved by parol evidence rule – because the agreement did not contain ‘no merger clause’ the court may allow to look outside the agreement in order to identify the intention of the parties. Therefore, Rebecca, under parol evidence rule, will be allowed by the court to identify the subject matter in case of the ambiguity.
Moreover, only the seller i.e. Harry signed the contract and not both the parties. This issue can be resolved by parol evidence rule. The court will look into the intention of the parties at the time of entering into the contract and hence, can make out that Rebecca wanted to buy the house on the lake.
Rebecca, therefore, can sue Harry.
3 . No, Harry cannot testify about the $25,000 gift because of the operation of the parol evidence rule. According to the parol evidence rule, any oral or written agreement (oral in this case) between the parties will not be taken into consideration that contradicts or varies the written contract.
Hence, Harry cannot testify about the $25,000 housewarming gift.
The following financial information was summarized from the accounting records of Buddy Corporation for the current year ended December 31: Beagle Division Dalmatian Division Corporate Total Cost of goods sold $47,200 $30,270 Direct operating expenses 27,000 20,400 Net sales 99,000 87,000 Interest expense $2,040 General overhead 18,160 Income tax 4,700
Required: Calculate:
(a) The gross profit for the Dalmatian Division. $
(b) The income from operations from the Dalmatian Division. $
(c) The gross profit for the Beagle Division. $
(d) The income from operations from the Beagle Division. $
(e) The net income for Buddy Corporation. $
Answer:
(a) $56,730
(b) $36,330
(c) $ 51,800
(d) $24,800
(e) $36,230
Explanation:
(a) Gross profit for the Dalmatian Division:
= Net sales - Total Cost of goods sold
= $87,000 - $30,270
= $56,730
(b) Income from operations from the Dalmatian Division:
= Gross Profit - Direct operating expenses
= $56,730 - $20,400
= $36,330
(c) Gross profit for the Beagle Division:
= Net sales - Total Cost of goods sold
= $99,000 - $47,200
= $ 51,800
(d) Income from operations from the Beagle Division:
= Gross Profit - Direct operating expenses
= $51,800 - $27,000
= $24,800
(e) Total income from operations;
= $36,330 + $24,800
= $61,130
Earnings before interest and taxes:
= Total income from operations - General overhead
= $61,130 - $18,160
= $42,970
Earnings before taxes:
= Earnings before interest and taxes - Interest expense
= $42,970 - $2,040
= $40,930
Net income = Earnings before taxes - Income taxes
= $40,930 - $4,700
= $36,230
In October, Pine Company reports 18,600 actual direct labor hours, and it incurs $126,540 of manufacturing overhead costs. Standard hours allowed for the work done is 22,200 hours. The predetermined overhead rate is $5.75 per direct labor hour. Compute the total overhead variance.
Answer:
The total overhead variance in hours taken is 3,600 hours
The total overhead cost variance is $1,110
Explanation:
The variance is about the different between budget/ standard and actual figures.
Standard hours allowed for the work done is 22,200 hours; and the predetermined overhead rate is $5.75 per direct labor hour. So total cost budgeted for work done is $127,650 = $5.57 x 22,200 hours
The total overhead variance in hours taken = standard hours of 22,200 - actual direct labor hours of 18,600 = 3,600 hours
The total overhead cost variance = standard cost - actual cost = $127,650 - $126,540 = $1,110
To compute the total overhead variance in this scenario, you subtract the standard overhead from the actual overhead ($126,540 - $127,650). The total overhead variance for Pine company in October amounts to -$1,110. A negative variance indicates less overhead cost than what was expected.
Explanation:In business, particularly in manufacturing, overhead variance is the difference between the actual overhead incurred and the standard overhead. Standard overhead is predetermined, typically computed based on direct labor hours.
To compute the total overhead variance in this scenario, we have to define actual overhead as indicated by the $126,540. Standard overhead is calculated as the product of the predetermined overhead rate of $5.75 and the standard hours allowed which amounts to $5.75× 22,200 = $127,650.
The total overhead variance is thus the difference between these two amounts: Actual overhead - Standard overhead = $126,540 - $127,650 = -$1,110. Therefore, the total overhead variance for Pine company in October is -$1,110 - a negative variance indicates less overhead cost than what was expected or budgeted for which can be seen as favorable.
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Total budgeted fixed overhead cost for the year $ 250,000 Actual fixed overhead cost for the year $ 254,000 Budgeted direct labor-hours (denominator level of activity) 25,000 Actual direct labor-hours 27,000 Standard direct labor-hours allowed for the actual output 26,000 Required: 1. Compute the fixed portion of the predetermined overhead rate for the year. (Round Fixed portion of the predetermined overhead rate to 2 decimal places.) 2. Compute the fixed overhead budget variance and volume variance. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.). Input all amounts as positive values.)
Answer:
1. $10
2. The fixed overhead budget variance and volume variance is $4,000 unfavorable and $10,000 favorable respectively
Explanation:
1. The computation of the predetermined overhead rate for the year is shown below:
Predetermined overhead rate = (Total estimated budgeting fixed manufacturing overhead) ÷ (estimated direct labor-hours)
= $250,000 ÷ 25,000 hours
= $10
2. The computation of the fixed overhead budget variance and volume variance is shown below:
Fixed overhead budget variance = Actual fixed overhead cost for the year - Total budgeted fixed overhead cost for the year
= $254,000 - $250,000
= $4,000 unfavorable
Volume variance = (Budgeted direct labor hours - standard direct labor hours) × predetermined overhead rate
= (25,000 hours - 26,000 hours) × $10
= $10,000 favorable
What does the IS curve show? A. It shows equilibrium points in the goods marketlong dashthe combinations of the real interest rate and equilibrium output. B. It shows equilibrium points in the goods marketlong dashthe combinations of planned investment spending and net exports. C. It shows equilibrium points in the goods marketlong dashthe combinations of the real interest rate and net exports. D. It shows equilibrium points in the goods marketlong dashthe combinations of planned expenditure and equilibrium output.
Answer:
Option (A) is correct.
Explanation:
Investment spending curve refers to the curve shows various combination of real interest rate and the equilibrium output. There is a negative relationship between the real interest rate and output which means that an increase in the real interest rate will reduce the output of an economy and if there is a fall in the real interest rate then as a result there is an increase in the output.
Surf City's ad Manager, Dan, calls the billboard company to buy the billboard. He speaks with Jim, a salesperson. Jim asks how long Dan intends to run the campaign. Dan replies he expects to keep an outdoor message up along the interstate for 10 years or more. Jim responds that while a 30-sheet poster is a good choice, more permanence and impact can be achieved with a(n)A. junior poster.B. painted bulletin.C. spectacular.D. inflatable panel.E. inside bus.
Answer:
The answer is letter B. Painted Bulletin
Explanation:
Painted Bulletin, because you can move them to different choice locations every 3 months. This way you can advertise your product, service, and store all over the town.
. PPF Model – Assume the Real GDP in this economy is composed of a $3500 b Private Sector and a $1100 b Public Sector after "G" increases by $100 b. A small, initial movement in the PPF Model will be from Point ______ half-way toward Point _____
Answer: R to T
Explanation:
The economy is still in recession, but possible start of a recovery.
Knowledge Check 01 Addison Corporation is considering the purchase of equipment that would increase sales revenues by $250,000 per year and cash operating expenses by $100,000 per year. The equipment would cost $400,000 and have a 5-year life with no salvage value. The simple rate of return on the investment is closest to
A. 17.5%
B. 20.0%
C. 25.5%
D. 35.0%
Answer:
C. 25.5%
Explanation:
Net operating cashflow = (250,000 - 100,000) = 150,000; This is a recurring cashflow; the PMT
Cost of equipment; the PV = 400,000
Next, calculate the rate of return using Net operating cashflow per year and the equipment cost. You can do this with a financial calculator;
N =5
PMT = 150,000
FV = 0
PV = -400,000
then CPT I/Y = 25.41%
Therefore the return is closest to 25.5%
Leary Manufacturing Corporation purchased 5,000 shares of its own previously issued $10 par common stock for $125,000. As a result of this event, A. Leary’s Common Stock account decreased $50,000. B. Leary’s total stockholders’ equity decreased $125,000. C. Leary’s Paid-in Capital in Excess of Par Value account decreased $75,000. D. All of these answer choices are correct.
Answer:
D. All of these answer choices are correct.
Explanation:
When a company purchases its own shares then the equity capital is reduced, as it is not an investment, but rather reducing the ownership share.
Equity value reduces with the par value of the share.
The paid in capital in excess of par value shall also be reduced if the share is bought for a value more than the par value, but in case if it is bought for less than the par value then the par value shall reduce the equity balance and that the difference in par value and bought up value shall be added to retained earnings.
In the given instance the total equity shall be reduced by $125,000
In this the equity capital by $50,000 and paid in capital in excess of par value by $125,000 - $50,000 = $75,000
Thus, all the statements are correct.
Which of the following items are normally classified as current liabilities for a company that has a one-year operating cycle? (You may select more than one answer.
a. Note payable due in 18 months.
b. Bank debt due in 5 years.
c. Loan due in 18 months.
d. Portion of long-term note due in 1 month.
e. Portion of long-term note due in 10 months.
f. Wages payable due in 7 days.
Answer:
The correct answer are D, E and F
Explanation:
Current liabilities are the short-term obligations of the company or the business which are due within the period of one year or within a operating cycle. An operating cycle states the cash conversion cycle, which is the time taken by the company to purchase the inventory and then convert the inventory into cash through sales.
The items which can be classified as Current Liabilities are portion of the long term note which is due in 1 month, wages payable due in 7 days and portion of the long term note which is due in 10 months.
Exercise 7-15On April 1, 2020, Bridgeport Company assigns $505,300 of its accounts receivable to the Third National Bank as collateral for a $327,200 loan due July 1, 2020. The assignment agreement calls for Bridgeport to continue to collect the receivables. Third National Bank assesses a finance charge of 4% of the accounts receivable, and interest on the loan is 10% (a realistic rate of interest for a note of this type). Prepare the April 1, 2020, journal entry for Bridgeport Company.
Answer:
Please see attachment .
Explanation:
Please see attachment .
A marketing manager has developed a regression model to predict quarterly sales of his company's down jackets based on price and amount spent on advertising. An intern suggests that he include an indicator (dummy) variable for the fall quarter. a) How would you code such a variable? (What values would it have for each quarter? b) Why does the intern's suggestion make sense? c) Do you think a regression with the indicator variable for fall would model down jacket sales better than one without that predictor?
Answer
The answer and procedures of the exercise are attached in a the following image.
Explanation
Please consider the data provided by the exercise. If you have any question please write me back. All the exercises are solved in a single sheet with the formulas indications.
Antiques R Us is a mature manufacturing firm. The company just paid a dividend of $9.15, but management expects to reduce the payout by 5 percent per year, indefinitely. If you require a return of 15 percent on this stock, what will you pay for a share today?
Final answer:
Using the Gordon Growth Model, you should be willing to pay $43.4625 for a share of Antiques R Us today, considering the expected 5% annual decrease in dividends and the required 15% rate of return.
Explanation:
To determine the price you would pay for a share of Antiques R Us, given that dividends are expected to decrease by 5 percent indefinitely, we can use the Gordon Growth Model (also known as the Dividend Discount Model). The model takes into account the next period's expected dividend, the required rate of return on the stock, and the expected dividend growth rate. The formula for the price of the stock when dividends are declining at a constant rate is:
P = D1 / (r - g)
where:
P is the price of the stock todayD1 is the dividend next yearr is the required rate of return (15% in this case)g is the growth rate of dividends (-5% in this case)Since the company just paid a dividend of $9.15, the next year's expected dividend, D1, is $9.15 * (1 - 0.05) = $8.6925. Plugging the values into the formula gives us:
P = $8.6925 / (0.15 - (-0.05)) = $8.6925 / 0.20 = $43.4625
Therefore, you should be willing to pay $43.4625 for a share of Antiques R Us today.
The effective combined tax rate in a firm is 40%. An outlay of $2 million for certain new assets is under consideration. Over the next 8 years, these assets will be responsible for annual receipts of $600,000 and annual disbursements (other than for income taxes) of $250,000. After this time, they will be used only for stand-by purposes with no future excess of receipts over disbursements a) What is the prospective rate of return before income taxes?
b) What is the prospective rate of return after taxes if straight-line depreciation can be used to write off these assets for tax purposes in 8 years?
c) What is the prospective rate of return after taxes if it is assumed that the assets must be written off for tax purposes over the next 20 years, using straight line depreciation?
Answer:
a) The prospective rate of return before income taxes is 40%
b) The prospective rate of return after taxes if straight-line depreciation can be used to write off these assets for tax purposes in 8 years is 24%
c) The prospective rate of return after taxes if it is assumed that the assets must be written off for tax purposes over the next 20 years, using straight line depreciation 150%
Explanation:
a) What is the prospective rate of return before income taxes?
The annual profit from business only is $350,000 = annual receipts of $600,000 - annual disbursements of $250,000
Then total profit in 8 years is $2.8 million = $350,000 x 8 years
So profit from investment after 8 years (regardless net present value) is $800,000 = $2.8 million - outlay of $2 million
The prospective rate of return before income taxes is 40% = profit $800,0000/ investment of $2 million x 100%
b) What is the prospective rate of return after taxes if straight-line depreciation can be used to write off these assets for tax purposes in 8 years?
The depreciation booked in expenses annually in every 8 years is $250,000
The annual profit after tax annually is $60,000 = (annual profit from business of $350,000 – depreciation of $250,000) x (1-40%)
So the profit after tax and straight-line depreciation in 8 years is $480,000 = annual profit of $60,000 x 8 years
The prospective rate of return after taxes if straight-line depreciation can be used to write off these assets for tax purposes in 8 years is 24% = $480,000/ $2 million x 100%
c) What is the prospective rate of return after taxes if it is assumed that the assets must be written off for tax purposes over the next 20 years, using straight line depreciation?
The depreciation booked in expenses annually in every 20 years is $100,000
The annual profit after tax annually is $150,000 = (annual profit from business of $350,000 – depreciation of $100,000) x (1-40%)
So the profit after tax and straight-line depreciation in 20 years is $3 million = annual profit of $150,000 x 20 years
The prospective rate of return after taxes if it is assumed that the assets must be written off for tax purposes over the next 20 years, using straight line depreciation 150% = $3 million/ $2 million x 100%
Burke Tires just paid a dividend of D0 = $1.32. Analysts expect the company's dividend to grow by 30% this year, by 10% in Year 2, and at a constant rate of 5% in Year 3 and thereafter. The required return on this low-risk stock is 9.00%. What is the best estimate of the stock's current market value?a. $41.59b. $42.65c. $43.75d. $44.87e. $45.99
Answer:
Please refer to the attachment
Explanation:
Please refer to the attachment
To find the current market value of Burke Tires' stock, we calculate the present value of expected dividends for three years, considering the different growth rates, and then determine the perpetuity value from the third year onwards using the constant growth rate.
Explanation:To estimate the current market value of Burke Tires' stock, we need to calculate the present value of all expected future dividend payments using the given growth rates and the required return rate. Let's calculate the dividends for the first three years:
Year 1 (D1): $1.32 * 1.30 = $1.716Year 2 (D2): $1.716 * 1.10 = $1.8876Year 3 (D3): $1.8876 * 1.05 = $1.98198 (this will be the growing perpetuity from this year forward)The price of share today is calculated as the sum of the present values of these expected dividends:
PV = D1 / (1 + r) + D2 / (1 + r)^2 + [D3 / (1 + r)^3] / (g - r)
Where PV is the present value, D1, D2, D3 are dividends for years 1, 2, and 3, respectively, r is the required return (9%), and g is the growth rate from year 3 onwards (5%). Plugging in the numbers:
PV = $1.716 / (1 + 0.09) + $1.8876 / (1 + 0.09)^2 + [$1.98198 / (1 + 0.09)^3] / (0.05 - 0.09)
After calculating the above, if the answer matches one of the provided choices, that will represent the best estimate of the stock's current market value. The actual calculation would result in a numeric value that could then be compared to the options given in the question.
Transfer Pricing Aulman Inc. has a number of divisions including a Furniture Division and a Motel Division. The Motel Division owns and operates a line of budget motels located along major highways. Each year, the Motel Division purchases furniture for the motel rooms. Currently, it purchases a basic dresser from an outside supplier for $60. The manager of the Furniture Division has approached the manager of the Motel Division about selling dressers to the Motel Division. The full product cost of a dresser is $29. While the Furniture Division has been operating at capacity (50,000 dressers per year) and selling them for $60 each, it expects to produce and sell only 40,000 dressers for $60 each next year. The Furniture Division incurs variable costs of $15 per dresser. The Motel Division needs 10,000 dressers per year; the Furniture Division can make up to 50,000 dressers per year. The company policy is that all transfer prices are negotiated by the divisions involved. Required: 1. What is the maximum transfer price? $ Which division sets it? 2. What is the minimum transfer price? $ Which division sets it? 3. Suppose that the two divisions agree on a transfer price of $31. What is the benefit for the Furniture Division? For the Motel Division? For Aulman Inc. as a whole? Benefit to Furniture Division $ Benefit to Motel Division $ Benefit to company $ Check My Work3 more Check My Work uses remaining. Previous
Answer:1. Maximum transfer price is $60 and it's to be set by the Motel division.
This is the maximum price they will need to get it in the market if they are not buying in-house and it needs to be set by them because it determines the maximum profit it can make from the transaction.
2. The minimum transfer price is $29 and it's to be set by the Furniture division.
This is the production cost and it's still profitable since it has meet his fixed cost at 40,000 unit and the variable cost is $15. The Furniture set the price because it determines the maximum profit it makes from the transaction.
3. Benefit to Motley division is additional profit of $16 per unit for 10,000 units ($31-$15)
Benefit to Furniture division is a reduction in cost of $29 per units on 10000 unit ($60-31)
Benefit to company is the combination of the benefits from both Motly and Furniture division.
D’Souza Company sold 7,000 units of its product at a price of $86.00 per unit. Total variable cost is $51.20 per unit, consisting of $40.60 in variable production cost and $10.60 in variable selling and administrative cost. Compute the manufacturing (production) margin for the company under variable costing.
The manufacturing margin for D’Souza Company, under variable costing, is calculated by subtracting the variable production cost from the sale price per unit and then multiplying by the total units sold, resulting in $317,800.
Explanation:The student's question involves calculating the manufacturing or production margin under variable costing. According to the information provided, D’Souza Company sold 7,000 units at a price of $86.00 per unit, with a total variable cost of $51.20 per unit. The variable production cost is $40.60, and the variable selling and administrative cost is $10.60 per unit. To calculate the manufacturing margin, we subtract the variable production cost from the sales price for each unit and then multiply by the total number of units sold. This can be shown as:
Manufacturing Margin = (Sale Price per Unit - Variable Production Cost per Unit) × Total Units Sold
Manufacturing Margin = ($86.00 - $40.60) × 7,000
Manufacturing Margin = $45.40 × 7,000
Manufacturing Margin = $317,800
Therefore, the manufacturing margin for D’Souza Company using variable costing for the sale of 7,000 units is $317,800.
Final answer:
The manufacturing margin for D'Souza Company is computed by subtracting the variable production cost per unit from the sales price per unit, resulting in a margin of $45.40 per unit. Multiplying by the total units sold (7,000 units), the total manufacturing margin is $317,800.
Explanation:
Manufacturing Margin Computation
To compute the manufacturing margin (also known as the production margin) under variable costing for D'Souza Company, we need to consider the selling price per unit and the variable production cost per unit. The manufacturing margin is the difference between the sales revenue per unit and the variable production costs per unit, representing the profit made on each unit before fixed costs and selling/administrative expenses are considered.
In this case, the company sold 7,000 units at a price of $86.00 per unit. The variable production cost per unit is $40.60. To calculate the manufacturing margin, we subtract the variable production cost per unit from the sales price per unit:
Manufacturing Margin = Sales Price per Unit - Variable Production Cost per Unit
Manufacturing Margin = $86.00 - $40.60
Manufacturing Margin = $45.40 per unit
Now, to find the total manufacturing margin, we multiply the margin per unit by the total units sold:
Total Manufacturing Margin = Manufacturing Margin per Unit × Total Units Sold
Total Manufacturing Margin = $45.40 × 7,000
Total Manufacturing Margin = $317,800
Wilson Co. purchased land as a factory site for $1,350,000. Wilson paid $120,000 to tear down two buildings on the land. Salvage was sold for $8,100. Legal fees of $5,220 were paid for title investigation and making the purchase. Architect's fees were $46,800. Title insurance cost $3,600, and liability insurance during construction cost $3,900. Excavation cost $15,660. The contractor was paid $4,200,000. An assessment made by the city for pavement was $9,600. Interest costs during construction were $255,000.
The cost of the land that should be recorded by Wilson Co. is?
Answer:
The cost of land should be recorded by Wilson Co. : $1,480,320
Explanation:
The cost of land, under GAAP, is all the costs incurred minus any revenue earned which are necessary to put the land to its ready-to-be-used stage, that is factory site.
Thus, all the cost regarding to construction should not be recorded as cost of land, instead, it should be assessed whether it is recorded as the cost of factory.
In details, the cost of land in the question is equal to:
Purchasing price + Tear down two buildings cost - Salvage from two building + Legal fees for investigation and making the purchase + Title insurance cost + Pavement cost = 1,350,000 + 120,000 - 8,100 + 5,220 +3,600 + 9,600 = $1,480,320.
The cost of the land that should be recorded by Wilson Co. includes all direct costs associated with acquiring and preparing the land for its intended use, excluding costs related to the building or construction. Therefore, the recorded cost of the land would be $1,476,720.
Explanation:The cost of the land to be recorded by Wilson Co. includes the purchase price of the land, the costs to prepare the land for its intended use, and other direct costs associated with obtaining the land. These would include costs to demolish any existing structures (with any salvage value offsetting this), legal fees associated with the purchase, and any assessments for local improvements such as pavement. It would not include architect's fees, liability insurance during construction, excavation costs, construction costs, or interest costs during construction as these are considered part of the cost of the building, not the land.
Therefore, the cost of the land that should be recorded by Wilson Co. is calculated as follows: $1,350,000 (purchase price) + $120,000 (demolition costs) - $8,100 (salvage) + $5,220 (legal fees) + $9,600 (pavement assessment) = $1,476,720.
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Liability comparisons Merideth Harper has invested $25,000 in Southwest Development Company. The firm has recently declared bankruptcy and has $60,000 in unpaid debts. Explain the nature of payments, if any, by Merideth in each of the following situations. a. Southwest Development Company is a sole proprietorship owned by Ms. Harper. b. Southwest Development Company is a 50-50 partnership of Merideth Harper and Christopher Black. c. Southwest Development Company is a corporation.
Answer:
Please see attachment
Explanation:
Please see attachment
Final answer:
Explanation of liability payments in a sole proprietorship, partnership, and corporation scenarios regarding unpaid debts.
Explanation:
Liability comparisons:
a. If Southwest Development Company is a sole proprietorship owned by Merideth Harper, she is personally liable for all the unpaid debts, which means she would need to pay the $60,000 debts from her personal assets.
b. If it is a 50-50 partnership, both Merideth Harper and Christopher Black are jointly responsible for the debts. They would need to split the payment of $60,000 between them.
c. In the case of a corporation, the liability is limited to the company's assets. Merideth Harper's payment responsibility is limited to the amount she invested, in this case, $25,000.
The Alford Group had 280,000 shares of common stock outstanding at January 1, 2016. The following activities affected common shares during the year. There are no potential common shares outstanding. 2016 Feb. 28 Purchased 12,000 shares of treasury stock. Oct. 31 Sold the treasury shares purchased on February 28. Nov. 30 Issued 48,000 new shares. Dec. 31 Net income for 2016 is $1,242,000. 2017 Jan. 15 Declared and issued a 2-for-1 stock split. Dec. 31 Net income for 2017 is $1,242,000. Required: 1. Determine the 2016 EPS 2. Determine the 2017 EPS 3. At what amount will the 2016 EPS be presented in the 2017 comparative financial statements?
Answer:
Please see attachment
Explanation:
Please see attachment
Mark Welsch deposits $8,000 in an account that earns interest at an annual rate of 8%, compounded quarterly. The $8,000 plus earned interest must remain in the account 4 years before it can be withdrawn. How much money will be in the account at the end of 4 years?
Final answer:
Mark Welsch will have approximately $11,790.85 in his account at the end of 4 years, after depositing $8,000 with an interest rate of 8% compounded quarterly.
Explanation:
To calculate the future value of Mark Welsch's deposit, we need to apply the formula for compound interest. The general formula is A = P[tex](1 + r/n)^{nt}[/tex], where:
P is the principal amount (the initial amount of money)r is the annual interest rate (in decimal form)n is the number of times the interest is compounded per yeart is the time the money is invested for, in yearsIn this scenario:
P = $8,000r = 8% or 0.08 in decimaln = 4 (since the interest is compounded quarterly)t = 4 yearsSubstituting these values into the compound interest formula:
A = 8000[tex](1 + 0.08/4)^{ 4*4}[/tex]
Let's do the math:
Divide the annual interest rate by the number of compounding periods: 0.08/4 = 0.02.Add 1 to the result of step 1: 1 + 0.02 = 1.02.Raise the result of step 2 to the power of the total number of compounding periods: 1.0216 (since 4 years times 4 quarters per year equals 16 quarters).Multiply the principal amount by the result of step 3: $8000 * 1.0216.The final calculation gives us the future value of the investment.Upon performing the calculations, we find that A is approximately $11,790.85.
This is the amount of money Mark will have in his account at the end of 4 years, including the principal and the compound interest earned over time.
You expect a share of stock to pay dividends of $1.00, $1.25, and $1.50 in each of the three years. You believe the stock will sell for $20 at the end of the third year.
What is the stock price if the discount rate for the stock is 10%?
Answer:
$18.095417
Explanation:
To obtain the current stock price, bring all paid dividends and the stock selling price to present value at a 10% rate per year:
[tex]P=\frac{(1.00)}{(1+0.10)}+\frac{(1.25)}{(1+0.10)^2}+\frac{(20+1.50)}{(1+0.10)^3}\\P= \$18.095417[/tex]
*Note that for the dividends paid after the first year, only one period was considered, and for the dividends paid after the second year, only two periods were considered.
The stock price is $18.095417
4. College logo T-shirts priced at $15 sell at a rate of 25 per week, but when the bookstore marks them down to $10, it finds that it can sell 50 T-shirts per week. a. What is the price elasticity of demand for the logo t-shirts? b. Indicate if the price elasticity of demand for the logo T-shirt is perfectly elastic, relatively elastic, relatively inelastic, or perfectly inelastic
Answer: PED = -1.665
The price demand elasticity is relatively elastic because PED is greater than 1..(ignore the minus sign)
Explanation:
Using the formula PED = % change in quantity/ % change in price
PED = ((Q1 - Q0)/(Q1 + Q0))/((P1 -P0)/(P1+P0))...EQU 1 where Q1 = 50 is quantity of product at Price P1 =10 and Q0 = 25 is quantity of product at Price P0 = 15 and PED is price of elasticity
Substituting figures into equ1
PED = ((50 - 25)/(50+25)) /((10 -15)/(10+15))
PED = -1.665
The price elasticity of demand for the logo T-shirts is 3.0, indicating that the demand is relatively elastic.
To find the price elasticity of demand for the college logo T-shirts, we follow these steps:
Identify initial and new prices:Initial Price (P1) = $15 New Price (P2) = $10
Identify initial and new quantities sold:Initial Quantity (Q1) = 25 T-shirts New Quantity (Q2) = 50 T-shirts
Calculate the percentage change in price and quantity sold:Percentage Change in Price = (P2−P1) / P1 ×100
(10−15)/ 15 ×100
−5/ 15×100= −33.33%
Percentage Change in Quantity = (Q2−Q1)/ Q1 ×100(50−25)/ 25 ×100
25/ 25×100 =100%
Calculate the price elasticity of demand (Ed):Price Elasticity of Demand = Ed =Percentage Change in PricePercentage Change in Quantity
−33.33%/ 100%
This simplifies to Ed=−3.0
Since we are interested in the absolute value, we consider ∣Ed∣=3.0.
Interpret the elasticity:An elasticity of 3.0 indicates that the demand for the college logo T-shirts is quite elastic. This means that a 1% decrease in price results in approximately a 3% increase in the quantity demanded. Based on the value of the elasticity, we categorize it as:Elastic (> 1): The demand is relatively sensitive to price changes.
On January 1, Innovative Solutions, Inc. issued $220,000 in bonds at face value. The bonds have a stated interest rate of 5 percent. The bonds mature in 10 years and pay interest once per year on December 31.Required:1, 2 & 3. Complete the required journal entries to record the bond issuance, interest payment on December 31, early retirement of the bonds. Assume the bonds were retired immediately after the first interest payment at a quoted price of 103. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
Answer:
Explanation:
The journal entries are shown below/:
On January 1
Cash A/c Dr $220,000
To Bonds payable A/c $220,000
(Being the issuance of bond is recorded)
On December 31
Interest expense A/c Dr $11,000
To Cash A/c $11,000
(Being the interest expense is recorded)
The computation is shown below:
= Face value of bond × interest rate
= $220,000 × ×5%
= $11,000
Bonds payable A/c Dr $220,000
Loss on redemption A/c Dr $6,600
To Bonds payable A/c $226,600 ($220,000 × 1.03)
(Being the retirement of the bond is recorded)
Journal entries for bond transactions include recording the initial bond issuance at face value, the annual interest payment based on the stated interest rate, and the early retirement entry recording the loss due to retirement at a premium.
To record the bond issuance, interest payment, and early retirement of the bonds for Innovative Solutions, Inc., we need to make three separate journal entries. The bond was issued at face value, thus no premium or discount is involved.
1. Journal Entry for Bond Issuance:
Dr Cash 220,000
Cr Bonds Payable 220,000
This entry reflects the receipt of cash and the obligation to pay back the bonds' face value at maturity.
2. Journal Entry for Interest Payment:
Dr Interest Expense 11,000
Cr Cash 11,000
This entry accounts for the annual interest payment, which is 5% of 220,000.
3. Journal Entry for Early Retirement:
Assuming the bonds were retired immediately after the first interest payment at a quoted price of 103, which means the company will pay 103% of the face value to retire the bonds:
Dr Bonds Payable 220,000
Dr Loss on Bond Retirement 6,600 (3% of 220,000)
Cr Cash 226,600 (103% of 220,000)
This entry removes the bond liability and recognizes the loss on retirement due to paying more than the face value.
Bonita's Braidworks hires workers to braid hair. The store sells the service for $25 per customer. The marginal revenue product of this store's fifth worker is $50. The marginal product of the fifth worker isA) 0.5 braided customers.B) 2 braided customers.C) 25 braided customers.D) indeterminate from this information.
Answer:
2 Braided Customers
Explanation:
Given:
Services Rate per customer = 25 $
Marginal Revenue Product = 50 $
Marginal Product = (Marginal Revenue Product / Service rate per customer)
Marginal Product = 50 / 25
Marginal Product = 2 Braided Customers
The marginal product of the fifth worker at Bonita's Braidworks is 2 braided customers, calculated by dividing the marginal revenue product of the fifth worker by the price per service.
Explanation:The subject of this question is marginal revenue product and marginal product in economics. The Marginal Revenue Product (MRP) is the increase in revenue that results from employing one additional unit of a factor of production, in this case, a worker. On the other hand, the Marginal Product (MP) is the increase in output that arises from an additional unit of input, again in this case, a worker.
Bonita's Braidworks sells its service for $25 and the marginal revenue product of its fifth worker is $50. This means that when the fifth worker is hired, the revenue of the firm increases by $50.
This suggests that the marginal product of the fifth worker would be the marginal revenue product (MRP $50) divided by the service price of $25, which equals to two. Hence, the correct answer is B) 2 braided customers.
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Which of the following factors does not affect the initial market price of a stock?
(A) The company's anticipated future earnings.
(B) The current state of the economy.
(C) The par value of the stock.
(D) The expected dividend rate per share.
Initial Market Price or Initial Public Offering is the price equal to the value of the expected dividend in the future and the fluctuation of supply and demand.
Which factor does affect the initial market price of stock?The fundamental factors like level of earning, cash flow per share, dividends per share, and the expected growth in the earning affect the initial price of the stock. A growing economy leads to greater confidence in investors and helps in the rise of the stock market. The country's economy affects the price of stocks. The par value of the stock is defined as the initial face value of the company's shares that are announced or decided by the directors as per the guidelines and the total value of the fund to be issued.Thus, the par value does not affect the initial price of the stock.
The correct answer is C.
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Assume the Fed is trying to decide whether to lower the required reserve ratio to 7%. Currently, the required reserve ratio is 10%. If banks keep no excess reserves, how much more would the money supply increase if the Fed lowers the reserve ratio when someone deposits $300 into a checking account?
Answer
The answer and procedures of the exercise are attached in the image below.
Explanation
Please consider the data provided by the exercise. If you have any question please write me back. All the exercises are solved in a single sheet with the formulas indications.
(Break-even point and selling price) Specialty Steel, Inc. will manufacture and sell 190 comma 000190,000 units next year. Fixed costs will total $340 comma 000340,000, and variable costs will be 6060 percent of sales. a. The firm wants to achieve a level of earnings before interest and taxes of $270 comma 000270,000. What selling price per unit is necessary to achieve this result? b. Set up a pro forma income statement to verify your solution to part a.
Answer:
a. Selling price per unit: $8.15
b. Pro forma income statement given selling price per unit is $8.15:
Sales revenue ( 8.15 x 190,000) $ 1,548,500
Variable cost (60.6% x 1,548,500) $ (938,391)
Fixed cost $ (340,000)
EBIT $270,109
=> Thus, at the selling price per unit at $8.15, the firm will achieved targeted EBIT
Explanation:
Calculation for selling price per unit as below:
Targeted Sales Revenue = (Targeted EBIT + Fixed cost) / Contribution margin ration = ( 270,000 + 340,000 ) / ( 1 - 60.60%) = $1,548,223.35.
Tarted selling price per unit = Targeted Sales Revenue / Unit sold = 1,548,223.35 / 190,000 = $8.15 per unit.