Answer:
A) the bond's yield to maturity is equal to its coupon rate
Explanation:
If the bonds yield to maturity is equal to its coupon rate it means that the interest paid by the buyers on the face value of the bond is equal to the internal rate of return for the present value of future cash flow. Only in this scenario, a bond is traded at its face or par value.
Part U16 is used by Mcvean Corporation to make one of its products. A total of 14,000 units of this part are produced and used every year. The company's Accounting Department reports the following costs of producing the part at this level of activity: Per Unit Direct materials $ 3.10 Direct labor $ 7.70 Variable manufacturing overhead $ 8.20 Supervisor's salary $ 3.60 Depreciation of special equipment $ 2.00 Allocated general overhead $ 7.20 An outside supplier has offered to make the part and sell it to the company for $25.50 each. If this offer is accepted, the supervisor's salary and all of the variable costs, including the direct labor, can be avoided. The special equipment used to make the part was purchased many years ago and has no salvage value or other use. The allocated general overhead represents fixed costs of the entire company, none of which would be avoided if the part were purchased instead of produced internally. In addition, the space used to make part U16 could be used to make more of one of the company's other products, generating an additional segment margin of $26,000 per year for that product. The annual financial advantage (disadvantage) for the company as a result of buying part U16 from the outside supplier should be:
Final answer:
To determine the financial advantage or disadvantage of buying part U16 from the outside supplier, compare the costs of producing internally to the cost of purchasing it. Subtract the cost of purchasing from the cost of producing and multiply by the number of units. Add the additional segment margin generated by freeing up space.
Explanation:
To determine the annual financial advantage or disadvantage of buying part U16 from the outside supplier, we need to compare the costs of producing it internally to the cost of purchasing it. The costs of producing internally include direct materials, direct labor, variable manufacturing overhead, supervisor's salary, depreciation of special equipment, and allocated general overhead. These costs sum up to $3.10 + $7.70 + $8.20 + $3.60 + $2.00 + $7.20 = $31.80 per unit.
If the company chooses to buy the part from the outside supplier, it would cost them $25.50 per unit. By subtracting the cost of purchasing from the cost of producing, we can calculate the annual financial advantage or disadvantage. (31.80 - 25.50) multiplied by 14,000 units would give us the answer.
Moreover, by freeing up the space used to produce part U16 internally, the company can generate an additional segment margin of $26,000 per year. So, we need to add this amount to the financial advantage or disadvantage calculated earlier.
Carolina Biological Supply Company sells science instructional materials. It wants to grow beyond the current customer base and identify potential markets besides the public education systems. What is the order it should follow to take in the market targeting process? Multiple Choice Question
The market targeting process for expanding a company's customer base involves market segmentation, evaluation, choosing a targeting strategy, and developing a positioning strategy. Product differentiation, customer service enhancement, and leveraging B2B platforms are ways to increase demand. Globalization and technology advancements have expanded market definitions and competition.
Explanation:The market targeting process for a company like the Carolina Biological Supply Company, which wants to expand its customer base beyond public education systems, involves several steps. The process typically begins with market segmentation, where the company identifies distinct groups within a larger market that could potentially be customers. After segmentation, the company then moves on to market evaluation, assessing the attractiveness of each segment based on factors such as size, growth potential, and competitive landscape. Subsequently, the company would decide on a targeting strategy, choosing which segments are the most viable to pursue. Finally, it would develop a positioning strategy for its offerings that resonates with the selected target markets, using differentiation strategies such as product features, customer service, and marketing communications.
To increase demand for their products, monopolistically competitive firms like Carolina Biological Supply Company can focus on product differentiation, improving customer service, engaging in product innovation, and leveraging business-to-business (B2B) platforms to reach a wider audience both on national and international levels. Improving the quality and features of their products can make them stand out in the marketplace, thus attracting more demand.
Globalization and technology are two significant shifts that have redefined markets. With the advent of the internet and B2B websites, suppliers and buyers can connect globally, increasing competition. For a company like Carolina Biological Supply Company, utilizing these platforms can help identify new market opportunities and enable the company to compete on a larger scale.
Tulip Midwifery's cost formula for its wages and salaries is $2,640 per month plus $606 per birth. For the month of January, the company planned for activity of 181 births, but the actual level of activity was 192 births. The actual wages and salaries for the month was $119,625. The wages and salaries in the flexible budget for January would be closest to:
Answer:
$112,326
Explanation:
The computation of wages and salaries is shown below:-
For computing the total wages and salaries first we need to find out the variable cost which is here below:-
Variable cost = Activity Births × Per birth
= 181 × $606
= $109,686
Total wages and salaries = Fixed cost + Variable cost
= $2,640 + $109,686
= $112,326
So, for computing the total wages and salaries we simply applied the above formula.
Spartan Credit Bank is offering 7.6 percent compounded daily on its savings accounts. You deposit $6,000 today. How much will you have in the account in 5 years, 10 years, 20 years?
Answer:
FV in 5 years $8,654
FV in 10 years $12,482
FV in 20 years $25,965
Explanation:
Future value is the amount that includes the principal amount invested and interest earned on this amount including the compounding effect.
Formula for Future value is as follow
FV = PV ( 1 + r )^n
Where
PV = Present value = $6,000
r = rate of interest = 7.6%
FV= Future Value
5 years
n = numbers of year = 5
FV = $6,000 (1 + 7.6%)^5 = $8,654
10 years
n = numbers of year = 10
FV = $6,000 (1 + 7.6%)^10 = $12,482
20 years
n = numbers of year = 20
FV = $6,000 (1 + 7.6%)^20 = $25,965
Answer:
5 years = $8777.36
10yeras = $12,828.64
20years = $27,429.01
Explanation:
Future Value(FV) =?
INTEREST RATE= 7.6% daily = (0.076/365)
Present value = $6,000
A) Future value in 5 years
FV = PV ×(1 + r)^n
FV = $6000 × (1 + (0.076/365))^(5×365)
FV = $6000 ×1.462226748225
=$ 8,773.36
B.) 10 years
FV = $6000 × (1 + (0.076/365))^(10×365)
FV = $6000 × 2.138107063225316
FV = $12,828.64
C. 20 years
FV = $6000 × (1 + (0.076/365))^(20×365)
FV = $6000 × 4.5715018138139866
FV = $27,429.01
Wanting to finalize a sale before year-end, on December 29, WR Outfitters sold to Bob a warehouse and the land for $125,000. The appraised fair market value of the warehouse was $75,000, and the appraised value of the land was $100,000. (Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.) a. What is Bob’s basis in the warehouse and in the land?
Answer:
$53,571 $ $71, 429
Explanation:
The basis for land and warehouse represents the value to be recorded in the books of Bob. When assets are acquired, they are recorded at their cost price, referred to as the basis.
Bob acquired the land and the warehouse by paying a total of $125,000. The combined basis for the two will be $125,000. To determine the basis for each, we will use their fair value to apportion the basis proportionately.
The total fair value for the land and warehouse is $175,000( 75,000 + 125,000)
The basis for the warehouse will be
=75,000/175,000 x 125,000
=0.428571 x 125,000
=$53,571
The basis for land
=100,000/175,000 x 125,000
=0.571428 x 125,000
=$71, 429
Bob's basis in the warehouse is approximately $53,750 and his basis in the land is approximately $71,250. This was calculated based on their respective proportions of the combined fair market values at the time of purchase.
Explanation:The basis of an asset is its original cost plus any additional costs related to its acquisition. In this case, Bob bought the warehouse and the land for a combined price of $125,000, which was less than their fair market values. Bob's basis in the warehouse and land will be allocated proportionately based on their fair market values at the time of purchase.
To calculate this, first, we add the appraised values of the warehouse and land ($75,000 + $100,000 = $175,000). Then, we calculate the proportionate value of each piece of property by dividing its appraised value by the combined appraised value. For the warehouse, it'd be $75,000/$175,000, which is approximately 0.43. For the land, it's $100,000/$175,000, which is approximately 0.57.
Applying these proportionate values to the purchase price and rounding off to the nearest dollar, we find that: Bob's basis in the warehouse is 0.43 x $125,000 = $53,750 and Bob's basis in the land is 0.57 x $125,000 = $71,250.
Learn more about Fair Market Values here:https://brainly.com/question/33129160
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The petty cash fund of $200 for Tomkins Company appeared as follows on December 31, 2014
Cash $50.60
Petty Cash Vouchers
Freight-in $58.40
Postage 40.00
Balloons for a special occasion 20.00
Meals 25.00
1. Prepare the general journal entry to replenish the fund.
2. On December 31, the office manager gives instructions to increase the petty cash fund by $50. Make the appropriate journal entry.
Answer:
Explanation:
1.
Petty Cash (200-50.6) Dr.$149.4
Cash Cr.$149.4
Freight In Dr. $58.4
Postage Dr.$40
Balloons Expense Dr.$20
Meals Expense Dr.$25
Cash Cr.$143.4
2. Petty Cash Dr.$50
Bank/Cash Cr.$50
The following condensed balance sheet is for the partnership of Miller, Tyson, and Watson, who share profits and losses in the ratio of 6:2:2, respectively: Cash $ 62,000 Liabilities $ 61,000 Other assets 162,000 Miller, capital 72,000 Tyson, capital 72,000 Watson, capital 19,000 Total assets $ 224,000 Total liabilities and capital $ 224,000 For how much money must the other assets be sold so that each partner receives some amount of cash in a liquidation?
Answer:
$67,000
Explanation:
Miller$72,000/60%=$ 120,000 loss to eliminate capital
Tyson$72,000/20%=$ 360,000 loss to eliminate capital
Watson$19,000/20%=$ 95,000 loss to eliminate capital
Watson is the partner most vulnerable to a loss of $95,000 which will inturn eliminate Watson's capital balance
Hence:
$162,000-$95,000
=$67,000
Therefore if the loss on disposal is less than $95,000, all partners will retain positive capital balances and receive some cash in liquidation reason been that other assets which is $162,000, must be sold for any amount over $67,000 for all partners to get cash.
The Copper Mountain Group, a private equity firm headquartered in Boulder, Colorado borrows GBP 5,000,000 for one year at 7.375% interests a. What is the dollar cost of this debt if the pound depreciates from $2.0260/GBP to $ 1.9460/GBP? b. What is the dollar cost of this debt if the pound appreciates from $2.0260/GBP to $ 2.1640/GBP?
Answer:
Pound depreciates from $2.0260/GBP to $ 1.9460/GBP
Amount borrowed = 5,000,000*2.026 =$10,130,000
Payment after 1 year = 5,000,000*1.07375*1.946 = $10,447,587.5
Dollar cost = (10,447,587.5/10,130,000 - 1)*100 = 3.135%
Pound appreciates from $2.0260/GBP to $ 2.1640/GBP
Amount borrowed = 5,000,000*2.026 =$10,130,000
Payment after 1 year = 5,000,000*1.07375*2.164 = $11,617,975
Dollar cost = (11,617,975/10,130,000 - 1)*100 = 14.688%
(a) The dollar cost of the debt is $10,445,125 if the pound depreciates to $1.9460/GBP, and (b) $11,617,375 if the pound appreciates to $2.1640/GBP.
Calculating the Dollar Cost of Debt:
Let's calculate the dollar cost of a debt taken by The Copper Mountain Group considering the fluctuation in the exchange rates.
Scenario a: Pound Depreciates from $2.0260/GBP to $1.9460/GBP
Initial Borrowing:
Amount borrowed in GBP: £5,000,000Exchange rate at borrowing: $2.0260/GBPAmount in USD when borrowed: £5,000,000 * $2.0260/GBP = $10,130,000Interest Calculation:
Interest rate: 7.375%Interest amount in GBP: £5,000,000 * 0.07375 = £368,750Total amount to be repaid in GBP: £5,000,000 + £368,750 = £5,368,750Repayment:
Exchange rate at repayment: $1.9460/GBPAmount in USD to repay: £5,368,750 * $1.9460/GBP = $10,445,125Scenario b: Pound Appreciates from $2.0260/GBP to $2.1640/GBP
Initial Borrowing:
Amount borrowed in GBP: £5,000,000Exchange rate at borrowing: $2.0260/GBPAmount in USD when borrowed: £5,000,000 * $2.0260/GBP = $10,130,000Interest Calculation:
Interest rate: 7.375%Interest amount in GBP: £5,000,000 * 0.07375 = £368,750Total amount to be repaid in GBP: £5,000,000 + £368,750 = £5,368,750Repayment:
Exchange rate at repayment: $2.1640/GBPAmount in USD to repay: £5,368,750 * $2.1640/GBP = $11,617,375Summary of Results:
Depreciation of Pound:
Dollar cost of debt: $10,445,125Appreciation of Pound:
Dollar cost of debt: $11,617,375TB MC Qu. 4-44 Privott, Inc., manufactures ... Privott, Inc., manufactures and sells two products: Product Z9 and Product N0. The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Estimated Expected Activity Activity Cost Pools Activity Measures Overhead Cost Product Z9 Product N0 Total Labor-related DLHs $ 339,018 7,900 4,500 12,400 Product testing tests 53,247 1,150 1,250 2,400 Order size MHs 478,608 5,500 5,800 11,300 $ 870,873 The activity rate for the Labor-Related activity cost pool under activity-based costing is closest to:
Answer:
labour related activity cost per labour hour = $339,018/ 12,400 = $27.34
Product Z9 = $27.34 * 7900 = $215,987
Product N0 = $27.34*4500 = $123,031
Explanation:
Wine and Roses, Inc., offers a bond with a coupon of 10.0 percent with semiannual payments and a yield to maturity of 11.00 percent. The bonds mature in 9 years. What is the market price of a $1,000 face value bond?
Answer:
$943.77
Explanation:
We use the present value formula i.e to be shown in the attachment below:
Data provided in the question
Future value = $1,000
Rate of interest = 11% ÷ 2 = 5.5%
NPER = 9 years × 2 = 18 years
PMT = $1,000 × 10% ÷ 2 = $50
The formula is shown below:
= -PV(Rate;NPER;PMT;FV;type)
So, after solving this, the market price of the bond is $943.77
Pepsi and Mountain Dew products sponsored a contest giving away a Lamborghini sports car worth $215,000. The probability of winning from a single bottle purchase was 0.0000084. What is the expected payoff value given that the payoff is $0 from a loss
Answer:
1.806
Explanation:
The computation of expected payoff value is shown below:
= Worth of sports car × probability of winning from a single bottle purchase + payoff from a loss × (1 - probability of winning from a single bottle purchase)
= $215,000 × 0.0000084 + 0 × (1 - 0.0000084)
= 1.806 + 0
= 1.806
We simply applied the above formula to determine the expected payoff value
The expected payoff value of the contest with a winning probability of 0.0000084 for a prize of $215,000 is $1.80 per bottle purchased. Since purchasing a bottle likely costs more, this would result in a loss over time.
Explanation:The student is asking about the expected value of participating in a contest where the probability of winning from a single bottle purchase is 0.0000084, and the prize is a Lamborghini sports car worth $215,000. To calculate the expected payoff value, we use the formula for expected value (EV):
EV = (Probability of Winning) × (Value of Prize) + (Probability of Losing) × (Value of Non-Winning)
Since the value of not winning is $0, the formula simplifies to:
EV = (Chance of Winning) × (Value of Prize)
Therefore:
EV = 0.0000084 × $215,000
EV = $1.80
This means that with the given probability, the expected payoff value is $1.80 per bottle purchased. However, since a bottle likely costs more than $1.80, over time, participants are expected to lose money on average, should they repeatedly enter the contest. This is an example of the house having an advantage.
Thomas Marley Fitness Gym has $ 700 comma 000 of 20-year bonds payable outstanding. These bonds had a discount of $ 77 comma 000 at issuance, which was 10 years ago. The company uses the straight-line amortization method. The current carrying amount of these bonds payable is
Answer:
$661,500
Explanation:
Given that
Bonds payable $700,000
Discount of issuance = $77,000
The computation of current carrying amount is shown below:-
Current carrying amount = Bonds payable - discount on bonds payable
Discount on bonds payable = Discount at issuance (Issuance ÷ Years bonds payable)
= $77,000 × (10 ÷ 20)
= $38,500
Now we put it into formula
= $700,000 - $38,500
= $661,500
The first phase of a comprehensive project risk assessment should be:
To develop reasonable estimates of the impacts on the project of both the identified risks and the proposed solutions.
To assess the specific sources of risk at the outset of the project, including the need to fashion appropriate responses.
To produce a project risk management plan that proactively offers risk mitigation strategies for the project as needed.
To make sure the project is well defined, including all deliverables, statement of work, and project scope.
The first phase of a comprehensive project risk assessment should be "to make sure the project is well defined, including all deliverables, statement of work, and project scope".
Option: D
Explanation:
A comprehensive risk management framework (RMF) has been established and adopted to better manage the task risks by utilizing a well-defined mechanism in modern changing environment. Many ventures have been studied to determine the reasons of their failure and the risk components.
The RMF composed of six stages; identification of programs, risk analysis, risk evaluation, reaction development, contingency planning, and implementation and control. That procedure must be adapted to the unique circumstances of the task and the agency which undertakes it.
Amex Corporation invests excess cash to purchase $25,000 in corporate bonds on March 30, 2018. In addition to the $25,000, Amex also paid a brokerage fee of $1,000. Amex intends to hold the bonds until maturity and has the ability to do so. When the bonds mature on March 30, 2020, Amex plans to use the cash for its business expansion. Which of the following is included in the journal entry on March 30, 2018?
Answer:
C) a debit to Held-to-Maturity Debt Investments for $26,000
Explanation:
The journal entry should be:
Dr Held-to-maturity debt investments 26,000
Cr Cash 26,000
Since Amex Corporation is planning to hold the bonds until maturity, it must record the total investment (bonds' price plus brokerage fees) as held to maturity securities.
Investment in securities are generally classified as either:
Held-to-maturity : the company will hold them until they mature, does not plan to sell them. Are reported as non-current assets. Held for trading Available for saleOn December 31, 2021, Coolwear Inc. had balances in Accounts Receivable and Allowance for Uncollectible Accounts of $42,000 and $1,150, respectively. During 2022, Coolwear wrote off $900 in accounts receivable and determined that there should be an allowance for uncollectible accounts of $5,400 at December 31, 2022. Bad debt expense for 2022 would be:
Answer:
$5,150
Explanation:
Allowance for doubtful debts-opening A $1,150
Allowance for doubtful debts-closing B $5,400
C=B-A $4,250
Bad Debts Written Off D $900
Bad Debt Expense for the year 2022 E=C+D $5,150
Answer:
$5,150
Explanation:
Bad debts expense are expenses which are uncollectible and this often occur in a case where a company or organisation delivered their goods or services on credit in which the customer fails to pay the amount owed due to the customer inability to fulfill his /her financial obligations which is why BAD DEBT EXPENSES is often recorded and accounted for whenever a company or organisation prepares their financial statements or book of account.
Coolwear Inc.
Balances in Accounts Receivable and
Coolwear wrote off in accounts receivable $900
Allowance for Uncollectible Accounts of $1,150
Allowance for uncollectible accounts of $5,400
$900-$1,150+$5,400 =$5,150
Therefore Bad debt expense for 2022 would be $5,150
Phoebe, a sales representative, is so excited during her sales presentation that she does not hear the customer's question correctly. She gives a brief, inappropriate answer, and continues with her presentation. Phoebe's behavior in this scenario reflects the operation of _____.
Answer:
Selective Perception
Explanation:
Selective perception refers to a psychological state wherein, an individual perceives and comprehends only that information he/she finds desirable, thereby ignoring the rest of the information during communication.
So, any of the viewpoints or ideas which appear conflicting to one's own are ignored and discarded under such a psychological state.
In the given case, Phoebe got excited during her presentation that she missed out upon hearing customer's questions. In such a state of excitement, her mind only perceived what she desired, thereby ignoring anything which appeared undesirable.
So post providing inappropriate answers, she went on with her presentation , i.e she got carried away in excitement. Such psychological state indicates the operation of selective perception.
Here is the income statement for Windsor, Inc.
WINDSOR, INC.
Income Statement
For the Year Ended December 31, 2017
Sales revenue $420,100
Cost of goods sold 235,100
Gross profit 185,000
Expenses (including $16,100 interest and $21,900 income taxes) 72,500
Net income $ 112,500
Additional information:
1. Common stock outstanding January 1, 2017, was 22,400 shares, and 36,600 shares were outstanding at December 31, 2017.
2. The market price of Windsor stock was $12 in 2017.
3. Cash dividends of $22,600 were paid, $4,600 of which were to preferred stockholders.
Required:
Compute the following measures for 2017. (Round all answers to 2 decimal places, eg. 1.83 or 2.51%)
(a) Earnings per share __________
(b) Price-earnings ratio times
(c) Payout ratio
(d) Times interest earned times
Your aunt is about to retire, and she wants to buy an annuity that will supplement her income by $65,000 per year for 25 years, beginning a year from today. The going rate on such annuities is 6.25%. How much would it cost her to buy such an annuity today
$811,540.16 would it cost her to buy such an annuity today
Solution:
Given
Annuity that would increase the profits by $65,000 a year over 25 years
The existing premium on these annuities is 6.25 a cent.
N 25
I/YR 6.25%
PMT $65,000
FV $0.00
PV $811,540.16
Suppose that you have returned from your fishing expedition with 20,000 fish. The market price is $3 per fish. Your average fixed cost was $1 and your total variable cost was $5,000. If the price jumps to $3.50 before you sell your first fish, how much extra profit, if any, do you earn
Answer:
The extra profit earned is $10,000
Explanation:
First, let us lay out the information given;
number of fish caught = 20,000
total variable cost = $5,000
average fixed cost = $1
total fixed cost = average fixed cost × number of fishes
= 20,000 × 1 = $20,000
Total cost = 20,000 + 5,000 = $25,000
Next let us calculate the total amount realized from sales before the price jump;
market price = $3
Total amount from sales = 3 × 20,000 = $60,000
profit made = selling price - cost price
= 60,000 - 25,000 = $35,000
Next let us calculate amount realized after the price jump;
new market price = $3.50
Total amount from new sales = 3.50 × 20,000 = $70,000
Profit = sales revenue - cost = 70,000 - 25,000 = 45,000
Finally to calculate the extra profit made, we will find the difference between new profit after price jump and the first profit made;
extra profit = new profit - old profit
= 45,000 - 35,000 = $10,000
Investing $2,000,000 in TQM's Channel Support Systems initiative will at a minimum increase demand for your products 3.0% in this and in all future rounds. (Refer to the TQM Initiative worksheet in the CompXM Decisions menu.) Looking at the Round 0 Inquirer for Andrews, last year's sales were $163,508,343. Assuming similar sales next year, the 3.0% increase in demand will provide $4,905,250 of additional revenue. With the overall contribution margin of 34.1%, after direct costs this revenue will add $1,672,690 to the bottom line. For simplicity, assume that the demand increase and margins will remain at last year's levels. How long will it take to achieve payback on the initial $2,000,000 TQM investment, rounded to the nearest month
Answer:
Payback is 14 months
Explanation:
The payback period is the length taken by an investment opportunity to repay itself.In other words,it refers to how long it takes for funds invested in a project to be recouped back.
The formula for payback period=cost of investment/annual profit increase from investment
The TQM investment would cost $2,000,000
The investment would improve bottomline(profit level) by $1,672,690 annually
payback period=$2,000,000/$1,672,690=1.20
It would more appropriate to express the payback in months since it is just a little beyond one year
Payback in months=1.20*12 months=14.4 months
Approximately 14 months
1 5.8 % 2 6.4 % 3 7.1 % 4 7.3 % 5 7.4 % What should the purchase price of a 2-year zero-coupon bond be if it is purchased at the beginning of year 2 and has face value of $1,000?
Answer:
$877.54 ( $1,000/[(1.064)(1.071))
Explanation:
An American-style call option with six months to maturity has a strike price of $35. The underlying stock now sells for $43. The call premium is $12.
a) What is the intrinsic value of the call?
b) What is the time value of the call?
c) If the company unexpectedly announces it will pay its first-ever dividend 3 months from today, you would expect that the value of the call would increase, decrease, or remain unchanged?
Answer:
a) $8
b) $4
c) Decrease
Explanation:
Background.
A call option as you probably know, is an agreement to buy an asset on or before a particular day at a price already determined in the agreement.
a) the Intrinsic value of the option is the market price minus the strike price.
Intrinsic Value = Market Price - Strike price
= $43 - $35
= $8 per share.
It is worthy of note that for an option, of the intrinsic value dips into negative figures it is just said to be 0.
b) To calculate the time value, we subtract the intrinsic value from the call premium
= Call Premium - Intrinsic value
= $12 - $8
= $4
c) The call option has 6 months to maturity and the dividends are to come in 3 months. Share prices usually drop after a dividend has been paid so because the call option matures in 6 months, the price of the call option will DECREASE owing to the Expected drop in stock price.
Norr and Caylor established a partnership on January 1, 2010. Norr invested cash of $100,000 and Caylor invested $30,000 in cash and equipment with a book value of $40,000 and fair value of $50,000. For both partners, the beginning capital balance was to equal the initial investment. Norr and Caylor agreed to the following procedure for sharing profits and losses:
- 12% interest on the yearly beginning capital balance;
- $10 per hour of work that can be billed to the partnership's clients; and
- the remainder divided in a 3:2 ratio.
The Articles of Partnership specified that each partner should withdraw no more than $1,000 per month.
For 2010, the partnership's income was $70,000. Norr had 1,000 billable hours, and Caylor worked 1,400 billable hours. In 2011, the partnership's income was $24,000, and Norr and Caylor worked 800 and 1,200 billable hours, respectively. Each partner withdrew $1,000 per month throughout 2010 and 2011.
Required:
(A) Determine the amount of net income allocated to each partner for 2010.
(B) Determine the balance in both capital accounts at the end of 2010
Norr's net income allocation for 2010 is $36,640, and Caylor's is $33,360. Their capital account balances at the end of 2010 are $124,640 and $101,360.
(A) Determination of net income allocated to each partner for 2010:
Calculate the interest on the beginning capital balance for each partner.
Norr's beginning capital balance = $100,000
Interest on Norr's beginning capital balance = 12% * $100,000 = $12,000
Caylor's beginning capital balance = $30,000 + $50,000 (fair value of equipment) = $80,000
Interest on Caylor's beginning capital balance = 12% * $80,000 = $9,600
Calculate the compensation for billable hours for each partner.
Norr's compensation = 1,000 billable hours * $10 per hour = $10,000
Caylor's compensation = 1,400 billable hours * $10 per hour = $14,000
Calculate the remaining profit to be divided in the 3:2 ratio.
Total profit for 2010 = $70,000
Total allocated amount = $12,000 (interest for Norr) + $9,600 (interest for Caylor) + $10,000 (compensation for Norr) + $14,000 (compensation for Caylor) = $45,600
Remaining profit = $70,000 (total profit) - $45,600 (total allocated amount) = $24,400
Ratio of profit allocation = 3:2
Norr's share = $24,400 * (3/5) = $14,640
Caylor's share = $24,400 * (2/5) = $9,760
Calculate the total allocation for each partner.
Norr's total allocation = $12,000 (interest) + $10,000 (compensation) + $14,640 (remaining profit) = $36,640
Caylor's total allocation = $9,600 (interest) + $14,000 (compensation) + $9,760 (remaining profit) = $33,360
Therefore, the net income allocated to Norr for 2010 is $36,640, and the net income allocated to Caylor for 2010 is $33,360.
(B) Determination of the balance in both capital accounts at the end of 2010:
Norr's capital account balance at the end of 2010:
Beginning balance = $100,000
Add: Net income allocated = $36,640
Subtract: Withdrawals = $12,000
Ending balance = $124,640
Caylor's capital account balance at the end of 2010:
Beginning balance = $80,000
Add: Net income allocated = $33,360
Subtract: Withdrawals = $12,000
Ending balance = $101,360
Therefore, the balance in Norr's capital account at the end of 2010 is $124,640, and the balance in Caylor's capital account at the end of 2010 is $101,360.
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During the ____ phase of team implementation, managers have withdrawn from the daily operations and are counseling teams. Group of answer choices a.tightly formed teams b.start-up c.leader-centered teams d.self-managing teams e.reality and unrest
During the self-managing teams phase of team implementation, managers have withdrawn from the daily operations and are counseling teams.
Option: D
Explanation:
When business is in the form of start-up than it need huge attention from leading members like manager, employer, team leader, etc. But after training workers, employee and staff regarding their work and duties, the procedure they need to follow, timing, etc, the main leader concentrate more on counsel them, related to obstacles they face while performing their duties.
This is because after training and leasing some time to gain experience in firm, it is understood by manger that the team must have reached to self management, thus concentrating on daily operations is totally a work of team leader. But still when they need guidelines related to new strategies, ongoing improvement, physical and mental issues due to work load, how to remain in pace, etc manger counsel them.
During the performing stage of team development, managers often take a step back to function in a counseling role, indicative of self-managing teams. This stage reflects high levels of team cohesion and autonomy.
Explanation:The phrase being sought in the question refers to a specific phase of team development in an organizational setting, where managers have stepped back from day-to-day operations to focus more on a counseling role with their teams. According to Tuckman's theory of group development, this describes the characteristics of self-managing teams, which are part of the performing stage. This is the fourth stage in group development, where the team has developed strong cohesion, is more autonomous, and managers typically take on more of an advisory role, having confidence in the team’s ability to direct itself and solve problems efficiently.
This phase contrasts with earlier stages such as the forming, storming, and norming stages, where teams are still developing their relationships, roles, standards, and methods for interaction and task completion. This understanding of team dynamics is valuable in today's workplace, where organizations form teams to respond to rapid changes due to technology, globalization, and other factors. Self-managing teams display the ability to adapt and perform well even under the complexities of modern organizational structures.
Blossom Company deducts insurance expense of $171000 for tax purposes in 2021, but the expense is not yet recognized for accounting purposes. In 2022, 2023, and 2024, no insurance expense will be deducted for tax purposes, but $57000 of insurance expense will be reported for accounting purposes in each of these years. Blossom Company has a tax rate of 20% and income taxes payable of $154000 at the end of 2021. There were no deferred taxes at the beginning of 2021. What is the amount of the deferred tax liability at the end of 2021?
Answer:
The deferred tax liability = $65,000 - $30,800 = $34,200
Explanation:
Blossom company
Accounting principles of Accruals demands that expenses and income should be recognized in the year they occur.
If Blossom company expect these expenses to occur between 2022 and 2024, it means at 2021 it's not to be recognized. Thus, it's wrong to have deducted it from the income of that year.
In 2021 the company would have posted an income tac liability of 20% x $154,000 = $30,800
However from a tax stand point the $171,000 isn't acceptable. This it will be disallowed
The adjusted income will therefore become $154,000 + $171,000 = $325,000
And the correct tax liability = 20% x $325,000 = $65,000.
The deferred tax liability = $65,000 - $30,800 = $34,200
Assume each month has 30 days and AmDent has a 60-day accounts receivable period. During the second calendar quarter of the year (April, May, and June), AmDent will collect payment for the sales it made during which of the months listed below? A. October, November, and December B. November, December, and January C. December, January, and February D. January, February, and March E. February, March, and April
Answer:
The correct answer is E
E. February, March and April
Explanation:
Payment for February will be received in April
Payment for March will be received in May
Payment for April will be received in June
the second quarter is April. May and June
At the beginning of 2016, Copland Drugstore purchased a new computer system for $52,000. It is expected to have a five-year life and a $7,000 salvage value. 2.a. Compute the depreciation for each of the five years, assuming that the company uses (1) Straight-line depreciation. (2) Double-declining-balance depreciation.
Answer:
1) Straight Line Depreciation
($52,000 - $7,000) / 5 ==> $45,000 / 5 = $9,000 (Year 1 to Year 5)
2) Double-declining-balance depreciation.
Rate = 1/5 = 20% x 2 = 40%
Year 1 = $52,000 x 40% => $20,800
Year 2 = (52,000 - 20,800) x 40% => $12,480
Year 3 = (52,000 - 20,800 - 12,480) x 40% => $7,488
Year 4 = (52,000 - 20,800 - 12,480 - 7,488) x 40% => $4,492.8
Year 5 = (52,000 - 20,800 - 12,480 - 7,488 - 4,492.8) x 40% => $2695.68
Depreciation for the computer system using straight-line method is \$9,000 annually. With double-declining-balance, it starts at \$20,800 for the first year and decreases each year as it's applied to the net book value, ensuring the final value doesn't drop below \$7,000 salvage value.
Explanation:To calculate the depreciation of Copland Drugstore's new computer system using straight-line depreciation, we subtract the salvage value from the purchase price and then divide by the useful life. Thus, the yearly depreciation is (\$52,000 - \$7,000) / 5 = \$9,000. Over the 5-year period, the annual depreciation expense will stay constant at \$9,000.
For the double-declining-balance depreciation, we double the straight-line depreciation rate. The straight-line depreciation rate is 1 / 5 (20%), so the double-declining rate is 40%. For the first year, the depreciation is 40% of \$52,000, which equals \$20,800. From the second year onwards, the rate is applied to the net book value of the computer system at the start of each year (purchase cost - accumulated depreciation) until the salvage value is reached.
Year 1:Depreciation: \$20,800
Year 2:Depreciation: 40% of (\$52,000 - \$20,800) = \$12,480
Year 3:Depreciation: 40% of (\$52,000 - \$20,800 - \$12,480) = \$7,488
And so on, adjusting the calculation each year to prevent the book value from falling below the salvage value.
On January 3, 20X9, Pleat Company acquired 80 percent of Stitch Corporation's common stock for $344,000 in cash. At the acquisition date, the book values and fair values of Stitch's assets and liabilities were equal, and the fair value of the noncontrolling interest was equal to 20 percent of the total book value of Stitch. The stockholders' equity accounts of the two companies at the acquisition date are:Pleat StitchCommon Stock ($5 par value) $ 500,000 $ 200,000 Additional Paid-In Capital 300,000 80,000 Retained Earnings 350,000 150,000 Total Stockholdersâ Equity $ 1,150,000 $ 430,000 Noncontrolling interest was assigned income of $11,000 in Pleat's consolidated income statement for 20X9.Required:
1. Based on the preceding information, what will be the amount of net income reported by Stitch Corporation in 20X9?Multiple Choice:O $36,000O $66,000O $44,000O $55,000
Answer:
The correct answer is option (d) $55,000
Explanation:
Given Data;
For better understanding, the given data is tabulated below.
................................. Company 1 Company 2
Common Stock $5 par value $ 500,000 $200,000
Additional Paid-In Capital $300,000 $80,000
Retained Earnings $350,000 $150,000
Total Stockholder's Equity $ 1,150,000 $430,000
Noncontrolling interest was assigned income of $11,000
Amount of net income reported by Stitch Corporation in 20X9 =?
Noncontrolling interest was = 20%
Controlled interest rate = 80%
The amount of net income reported=
Noncontrolling interest income / Noncontrolling interest rate
= 11000/20%
= 11000/0.2
=$55,000
Stitch Corporation's total net income reported for the year 20X9, based on the provided information, is $55,000.
Explanation:The noncontrolling interest in Stitch Corporation, which represents 20 percent of Stitch's total stockholders' equity, is assigned an income of $11,000 on Pleat's consolidated income statement.
Since this represents 20% of the total income, it implies that the remaining 80% of the income - which is attributable to Pleat - would be four times that amount, or $44,000.
Therefore, Stitch Corporation's total net income reported for 20X9 will be the sum of the noncontrolling interest's income and Pleat's portion of the income, which is: $11,000 + $44,000 = $55,000.
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The price for cigarettes sold by Big Tobacco Co Ltd was 6.00 per packet in March 2018. During the month of March, the consumption of cigarettes was 1000 packets. However, the Board of Directors of Big Tobacco Co Ltd decided to increase the price by 25% during the month of April. As a manager you noted that price elasticity of demand was 0.8. As a manager Big Tobacco Co Ltd:
A. As a manager Big Tobacco Co Ltd store advise your management of the strategy that could be adopted by your firm to maintain sales.
B. Also, advise your government on recommended interventions in the cigarette market.
Answer:
Part A. Total sales under the 25% price increase strategy is higher so it must be opted.
Part B. Must intervene by imposing higher taxes on the cigarettes to control its consumption and our future generations.
Explanation:
By using the price elasticity of demand formula, we can calculate the quantity consumption by increasing price by 25%.
The formula is as under:
E = [(Q2 – Q1) / (Q1 + Q2) / 2] / [(P2 – P1) / (P1 + P2) / 2]
Here
Q1 = Consumption before price alteration = 1,000 Packets
Q2 = This is the amount we want to calculate = ?
P1 = It is the initial price which is $6 per packet
P2 = It is 125% of the initial price. So
P2 = P1 * 125% = $7.5 per unit
E = It is price elasticity of Demand which is given in the question and is 0.8. Remember that it is negative.
By putting the values in the Formula, we have:
-0.8 = [(Q2 – 1,000) / (1,000 + Q2) /2] / [(7.5 – 6) / {(6 + 7.5) / 2]
-0.8 = [(Q2 – 1,000) / (500 + 0.5Q2)] / [1.5 / 6.75]
-0.8 * (1.5 / 6.75) = (Q2 - 1,000) / (500 + 0.5Q2)
-0.1777 * (500 + 0.5Q2) = Q2 – 1,000
-88.85 - 0.1777Q2 = Q2 – 1,000
-0.08885Q2 – Q2 = - 1,000 + 88.85
-1.08885Q2 = - 911.15
Q2 = 911.15 / 1.08885 = 837 Packets
Part A.
We will assess which strategy generates higher sales. The strategy that generates higher sales will be adopted.
Sales under $6 per packet pricing:
Total revenue at $6 / packet = 1,000 Packets * $6 per packet = $6,000
Total revenue (TR) at 7.5 price = 837 Packets × $7.5 per packet = $6,277.5
As the total sales under the 25% price increase strategy is higher so it must be opted.
Part B.
The government must intervene by increasing the taxes on "injurious to health" products and intervene this way to decrease the consumption of cigarettes as it is not good for health. Higher prices of the cigarettes will act as an obstacle for smokers and as a result they will smoke less cigarettes. This is an ethically correct recommendation.
Which of the following statements is true?
a) The market demand for labor is the horizontal "addition" of the firms' demand curves for labor.
b) The elasticity of demand for labor is the percentage change in quantity demanded of labor divided by the percentage change in the wage rate.
c) The factor demand curve will shift to the right if the price rises for the good the factor goes to produce.
d) The factor supply curve in an industry will shift to the left as wage rates in that industry rise.
Answer:
The correct answer is d) The factor supply curve in an industry will shift to the left as wage rates in that industry rise.
Explanation:
The demand for factors is based in the demand for the goods and services that are produced using these factors and if the demand for the source good decreases, the demand for the production factor will also decrease.
In this case, when the market wages increase, the ability of suppliers to use labor goes down and as a result the demand curve will shift left.