Answer:
When skilled immigrants return to their home countries, the U.S. may:
Lose may lose its native talent to developing countries that offer researchers.
Explanation:
Brain drain is a problem described as the process in which a country loses its most educated and talented workers to other countries through migration.
when skilled immigrants return to their home countries, the U.S. may lose its native talent to developing countries in a twist on the traditional brain drain.
Remember these immigrants were mostly trained in the US, got employed and developed their career path in the US too. They automatically add up to the native talents base too.
Cala Manufacturing purchases land for $477,000 as part of its plans to build a new plant. The company pays $40,700 to tear down an old building on the lot and $60,165 to fill and level the lot. It also pays construction costs $1,535,600 for the new building and $96,932 for lighting and paving a parking area. Prepare a single journal entry to record these costs incurred by Cala, all of which are paid in cash.
Answer:
(A) Record the Total Costs of the plant assets.
Transaction General Journal Debit Credit
1 Land 477000
Dismantling cost 40700
Leveling cost 60165
Construction cost 1535600
Lighting & Paving Area 96932
Cash 2210397
Note:
1. According to IAS 16 Cost of asset consists of expense which has endurs future economic benefit.
2. Cost of Asset includes construction cost ,development cost , Dismantling cost and lighting & paving area etc.
Final answer:
To record Cala Manufacturing's expenditure on the new plant, the accounting journal entry would debit Land for $577,865, Buildings for $1,535,600, and Furniture and Fixtures for $96,932. Credit would be made to Cash for the total sum of $2,210,397.
Explanation:
To record the costs incurred by Cala Manufacturing for its new plant construction and related expenses, a single journal entry would be made in their accounting system. This includes the purchase of land, site preparation costs, construction costs of the new building, and costs for lighting and paving a parking area.
The journal entry would follow this format:
Debit Land for \$477,000 + \$40,700 + \$60,165 = \$577,865.Debit Buildings for the construction costs of \$1,535,600.Debit Furniture and Fixtures (if applicable for lighting and paving as they are not specifically categorised) for \$96,932.Credit Cash for the total amount of \$2,210,397 (The sum of all debits).Wattan Company reports beginning inventory of 11 units at $65 each. Every week for four weeks it purchases an additional 11 units at respective costs of $66, $67, $70, and $75 per unit for weeks 1 through 4. Compute the cost of goods available for sale and the units available for sale for this four-week period. Assume that no sales occur during those four weeks.
Solution:
Activity Units Units cost Cost of Goods Available
Beginning Inventory 11 $65.00 $715
1st week purchase 11 $66.00 $726
2nd week purchase 11 $67.00 $737
3rd week purchase 11 $70.00 $770
4th week purchase 11 $75.00 $825
Units available for sale 55
Cost of goods available for sale $3,773
The market value of Firm L’s debt is $200,000 and its cost of debt is 7%. The firm’s equity has a market value of $400,000, its earnings are growing at a 4% rate, and its tax rate is 40%. A similar firm with no debt has a cost of equity of 12%. Use the APV model to calculate the value of Firm L if it had no debt.
Answer: $530000
Explanation:
Debt $200000.
Equity $400000
rd=7%.
rd for equity =12%
Taxrate= 40%
Earning rate for equity= 4%
Firm L has a total of $200000+ $400000= $600000
A similar firm with no debt should have a smaller value.
The calculation is as follows.
VTotal= Vu + Vts
Make Vu the subject of the formula
So,
Vu= VTotal - Vts
= Debt + Equity(S) - Vts
Firstly, we need to calculate Vts
Value tax shelter (Vts)
=rdTD(rsU-G)
= 0.07(0.40)(200000)/(0.12-0.04)
=5600/0.08
= $80,000
Therefore,
Vu= $200000 + $400000- $70000
Vu= $600000 - $70000
Vu= $ 530000
In conclusion
The value of Firm L if it has no debt is $530000
Answer:
$530,000
Explanation:
Debt: $200,000
rd: 7%
T: 40%
Equity: $400,000
rsU: 12%
g: 4%
Firm L has a total value of $200,000 + $400,000 = $600,000. A similar firm with no debt should therefore have a smaller value.
VTotal= VU+ VTS
Therefore VU= VTotal−VTS= D + S −VTS.
Value tax shelter = VTS= rdTD/(rsU−g)
= 0.07(0.40)($200,000)/(0.12 −0.04)
=$5,600/0.08
= $70,000
VU= $400,000 + $200,000 −$70,000
$600,000-$70,000 = $530,000
VU= $530,000
The value of Firm L if it had no debt is $530,000
TravelToday, Inc., disclosed the following rounded amounts (in thousands) concerning the Allowance for Doubtful Accounts on its Form 10-K annual report.
Allowance for Doubtful Accounts
(dollars in thousands)
Beginning Increases for Decreases for Ending
Year Balance Bad Debt Expense Write-Offs Balance
2016 $ 9,300 $ 4,150 $ ? $ 1,350
2015 8,300 4,750 3,750 9,300
2014 12,800 1,050 5,550 8,300
Required:
1-a. Prepare a T-account for the Allowance for Doubtful Accounts and enter into it the 2014 amounts from the above schedule. The balance at the beginning of each year in the Allowance for Doubtful Accounts is a credit balance.
1-b. Write the T-account in equation format to prove the above items account for the changes in the account.
2. Record summary journal entries for 2015 related to (a) estimating Bad Debt Expense and (b) writing off specific customer account balances.
3. Supply the missing information for 2016.
4. If TravelToday had written off an additional $33 of Accounts Receivable during 2016, by how much would Net Receivables have decreased? How much would Net Income have decreased?
Answer:
Kindly refer to the attached document for answers 1 to 3
4. If $33 was written off additionally
Then transfer to receivables in the year would have declined to $1,317 from $1,350 and the receivables balance would then be $16,167 from $16,200
Net income will not be affected by the $33 additional write off
To address the student's question, the T-account for 2014 was prepared, the equation was used to prove the changes in the Allowance for Doubtful Accounts, summary journal entries for 2015 were recorded, and the missing write-offs for 2016 were calculated. It was also determined that an additional write-off of $33 would decrease Net Receivables but not affect Net Income.
Understanding Allowance for Doubtful Accounts
To prepare a T-account for the Allowance for Doubtful Accounts using the 2014 amounts, you would note the beginning balance as a credit (since it is a contra asset account), add the increases for the year as credits, and the decreases as debits. By the end of 2014, the transactions will reflect a credit balance of $8,300.
T-account for 2014:
Beginning balance (Credit): $12,800
Bad Debt Expense (Credit increase): $1,050
Write-offs (Debit decrease): $5,550
Ending balance (Credit): $8,300
To write the T-account in equation format:
Beginning balance + Increases (Bad Debt Expense) - Decreases (Write-offs) = Ending balance
$12,800 + $1,050 - $5,550 = $8,300
Summary Journal Entries for 2015:
(a) Bad Debt Expense
Debit: Bad Debt Expense $4,750 (Expense increases)
Credit: Allowance for Doubtful Accounts $4,750 (Contra asset increases)
(b) Write-Offs
Debit: Allowance for Doubtful Accounts $3,750 (Contra asset decreases)
Credit: Accounts Receivable $3,750 (Asset decreases)
Missing Information for 2016:
To find the missing write-offs for 2016, we can use the equation format:
$9,300 (Beginning balance) + $4,150 (Bad Debt Expense) - Write-offs = $1,350 (Ending balance)
Write-offs = $9,300 + $4,150 - $1,350 = $12,100
Effect of Additional Write-Offs:
If Travel Today had written off an additional $33 in Accounts Receivable during 2016, the Net Receivables would decrease by $33, and there would be no effect on Net Income, as write-offs affect only the balance sheet accounts and have no impact on the income statement once the allowance for doubtful accounts has been adjusted for the Bad Debt Expense.
It takes 30 minutes of direct labor time to make one unit. Direct labor wages average $17 per hour. Variable overhead is applied at the rate of $5 per direct labor hour. Fixed overhead is budgeted at $56,500 per month. What is the budgeted overhead for November
Answer:
$404,000
Explanation:
Overheads includes all indirect cost incurred to product the units to be sold. Indirect costs are those costs which are not directly traceable / attributable to the product. These cost are variable and fixed.
Time for each unit = 30 minutes = 0.5 hours
Budgeted production in November = Closing Inventory + Sales in November - Opening Inventory.
Budgeted production in November = (180,000 x 10% ) + 135,000 - 14,000 = 139,000
Budgeted production overhead Included all the variable and fixed overheads incurred to produce the budgeted production.
Variable overhead = 139,000 x 5 X 0.5 = $347,500
Total budgeted Overhead = $347,500 + $56,500 = $404,000
If the month-end bank statement shows a balance of $54,000, outstanding checks are $15,000, a deposit of $6,000 was in transit at month end, and a check for $900 for non-sufficient funds charged by the bank against the account, the correct balance in the adjusted balance per bank at month end is Group of answer choices $45,000. $44,100. $62,100. $75,000.
Answer:
A. $45,000
Explanation:
We have to use bank reconciliation statement to find the adjusted balance per bank at the end of month. Although we do not have cash balance, we will use the bank part to adjust the bank balance.
Bank balance as per month end $54,000
Add: Deposit in transit $6,000
$60,000
Less: Outstanding check $(15,000)
Adjusted bank balance $45,000
Note: Non-sufficient funds will be deducted from cash book.
Therefore, option A is the answer.
Blossom Company, a machinery dealer, leased a machine to Dexter Corporation on January 1, 2020. The lease is for an 8-year period and requires equal annual payments of $32,207 at the beginning of each year. The first payment is received on January 1, 2020. Blossom had purchased the machine during 2016 for $146,000. Collectibility of lease payments by Blossom is probable. Blossom set the annual rental to ensure a 6% rate of return. The machine has an economic life of 10 years with no residual value and reverts to Blossom at the termination of the lease.
Compute the amount of the lease receivable.
Prepare all necessary journal entries for Blossom for 2020.
Suppose the collectibility of the lease payments was not probable for Blossom. Prepare the necessary journal entry for the company in 2020.
Suppose at the end of the lease term, Blossom receives the asset and determines that it actually has a fair value of $1,470 instead of the anticipated residual value of $0. Record the entry to recognize the receipt of the asset for Blossom at the end of the lease term.
Answer:
Explanation:
Check the attached file for well formatted answer
Amount of the lease receivable = $211,999
Journal entries for Blossom for 2020 are as follows :-
Date Account Titles and Explanation Debit Credit
1/1/20 Lease receivable A/c Dr. $211,999
Cost of goods sold A/c Dr. $146,000
To Sales A/c $211,999
To Inventory A/c $146,000
(To record the lease)
Cash A/c Dr. $32,207
To Lease receivable A/c $32,207
(To record the first lease payment)
12/31/20 Interest receivable A/c Dr. $10787.52
To Interest revenue A/c
[($211,999 - $32,207) × 6% rate]
$10,787.52
(To record interest receivable on the amount after first annual payments)
1/1/2020 Cash A/c Dr. $32,207
To Deposit Liability A/c $32,207
( To record the collectibility of the lease payments was not probable for Blossom)
1/1/2020 Inventory A/c Dr. $1,470
To Gain on Lease A/c $1,470
The computed lease receivable for Blossom is $201,108.44. Journal entries will include recording the lease payment and the interest revenue. If collectability is not probable, only lease revenue is recognized as payments are received. If at the end of the lease the machine has a fair value of $1,470, an entry is made to recognize this.
Explanation:The lease receivable represents the current value of the lease payments that Blossom Company expects to receive over the 8-year lease term. The lease payments are an annuity due as they are received at the beginning of each year. As such, the amount of the lease receivable can be calculated as follows:
Lease Receivable = Lease Payment * ((1 - (1 + Interest Rate) ^ - Lease Term) / Interest Rate)
Plugging in the given values:
Lease Receivable = $32,207 * ((1 - (1 + 6%) ^ -8) / 6%) = $201,108.44.
The necessary journal entries for Blossom in 2020 will include:
January 1, 2020: Debit Lease Receivable $32,207, Credit Cash $32,207 (to record the receipt of the lease payment)December 31, 2020: Debit Interest Receivable $12,066.51 (6% of $201,108.44), Credit Interest Revenue $12,066.51 (to record the interest earned on the lease receivable).However, if the collectability of the lease payments was not probable for Blossom, the company would only recognize revenue as the payments are received. Thus, the only journal entry in 2020 would be:
January 1, 2020: Debit Cash $32,207, Credit Lease Revenue $32,207.
Finally, at the end of the lease term, if Blossom finds that the machine has a fair value of $1,470, the company would make the following entry:
Debit Equipment $1,470, Credit Gain on Return of Leased Equipment $1,470 (assuming Blossom had fully depreciated the machine by this time).
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Landow Company uses variable costing for internal purposes and wants to restate income to that of absorption costing for external reporting purposes. Landow's income under variable costing is $630,000. Fixed production cost in ending inventory is $120,000 and $85,000 in beginning inventory. What is Landow's income under absorption costing? $595,000. $510,000. $665,000. $750,000.
Answer: 665000
Explanation:
N/a
The following data are from the accounting records of Kain Company: Net income $40,000 Depreciation expense 8,000 Decrease in accounts payable 1,800 Decrease in merchandise inventory 2,500 Increase in long-term liabilities 10,000 Increase in common stock 25,000 Increase in accounts receivable 4,000 Based on this information, the net cash flows from operating activities on the statement of cash flows using the indirect method would be: a.$51,300. b.$42,100. c.$50,000. d.$44,700.
Answer:
d. $44,700
Explanation:
The preparation of the Cash Flows from Operating Activities - Indirect Method is shown below:
Cash flow from Operating activities - Indirect method
Net income $40,000
Add : Depreciation expense $8,000
Less: Decrease in accounts payable -$1,800
Add: Decrease in merchandise inventory $2,500
Less: Increase in accounts receivable -$4,000
Net cash flows from operating activities $44,700
The long term liabilities and the common stock is not relevant. Hence, ignored it
Final answer:
The net cash flows from operating activities using the indirect method would be $44,700 after adding back non-cash depreciation expense, subtracting the increase in accounts receivable, adding the decrease in merchandise inventory, and subtracting the decrease in accounts payable to the net income.
Explanation:
To calculate the net cash flows from operating activities using the indirect method, we start with the net income and make adjustments for non-cash expenses and changes in working capital. We add back depreciation since it's a non-cash expense and adjust for the changes in working capital accounts (accounts receivable, inventory, accounts payable).
The calculation is as follows:
Net Income: $40,000
Add: Depreciation Expense: $8,000
Decrease in Accounts Receivable: Subtract the increase: $(4,000)
Decrease in Merchandise Inventory: Add the decrease: $2,500
Decrease in Accounts Payable: Subtract the decrease: $(1,800)
Now, we sum these amounts:
$40,000 (Net Income)
+$8,000 (Depreciation Expense)
-$4,000 (Increase in Accounts Receivable)
+$2,500 (Decrease in Merchandise Inventory)
-$1,800 (Decrease in Accounts Payable)
Total adjustments = $8,000 - $4,000 + $2,500 - $1,800 = $4,700
Net cash provided by operating activities = $40,000 + $4,700 = $44,700
Therefore, the correct answer is (d) $44,700.
For each adjustment, indicate the income statement and balance sheet account affected, and the impact on net income. If an adjustment caused net income to decrease, enter the amount as a negative value. Net income before adjustments can be found on the income statement tab. (Hint: Select unadjusted on the drop-down.)
Every transaction will have effects on the financial statements of the organization. The effect can be on more than one financial statement.
a. Rent :
Income Statement 750 Balance Sheet 8250 Net Income 9,000 decreaseb. Insurance :
Income Statement 200 Balance Sheet 2200 Net Income 2,400 decreasec. Office Supplies :
Income Statement 12,200 Balance Sheet 1200 Net Income 12,200 decreased. Depreciation :
Income Statement 500Balance Sheet 26,000 Net Income 6,000 decreasee. Un billed Fees :
Income Statement 10,690 Balance Sheet 1,800 Net Income 10,690 increasef. Unpaid Wages :
Income Statement 2600 Balance Sheet 2600 Net Income 2,600 decreaseLearn more at https://brainly.com/question/14777340
Financial adjustments impact both the income statement and balance sheet, altering net income and account values. Taxable income is a key factor in these adjustments, and the merchandise trade balance, determined by exports and imports, affects the financial statements.
Explanation:Understanding Financial Adjustments and Their Impact on Financial StatementsTo evaluate the impact of financial adjustments on income statements and balance sheets, it's essential to recognize how each adjustment affects these financial documents. When identifying the effects on net income, adjustments either increase or decrease the profitability as displayed in the income statement. For the balance sheet, adjustments alter the value of assets, liabilities, or equity.
Consider taxable income, which is calculated by subtracting deductions and exemptions from the adjusted gross income. Different tax rates apply to different income levels, which could lead to further adjustments. Remember, the calculation of net income is influenced by various components, including tax rates and credits, as well as any alternative minimum tax.
When focusing on the merchandise trade balance, a few steps are integral. Step 1 requires entering the export amount of goods and services; Step 2, recording imports; and Step 3 marks the entry of income payments under exports. The merchandise trade balance (Step 9), for example, is obtained by subtracting the value of imports from exports, with unilateral transfers also affecting the balance.
These transactions not only affect the overall trade balance but also have implications for the national income and subsequently the tax computations, which could adjust the net income. It is vital to carefully identify each adjustment to accurately reflect its impact on both the income statement and balance sheet accounts.
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Consider tablets which are used by a majority of consumers. Suppose that due to the development of 5G technology, tablets underwent a major advance from 2020 to 2021 in terms of the number of functions they could do. The tablets in 2021 sold at the same price as those in 2020. What would be the effect on the CPI?
Answer:
Tablets are used by a majority of consumers. Although the tablets underwent a major advance from 2020 to 2021, the price of the tablets remained the same. Therefore, the CPI would largely remain the same as the price of tablets remained the same.
Unchanged CPI
A firm derives revenue from two sources: goods X and Y. Annual revenues from good X and Y are $10,000 and $20,000, respectively.
If the price elasticity of demand for good X is -4.0 and the cross-price elasticity of demand between Y and X is 2.0, then a 2 percent decrease in the price of X will _______.
Answer:
X demand would rise by 8% ; Y demand would fall by 4%
Explanation:
Price Elasticity of Demand is the responsiveness in demand quantity, due to change in good's price
P.Ed = % change in demand / % change in own price
Cross Price Elasticity is the responsiveness in a good's demand quantity, due to change in other good's price
C.Ed = % change in demand (Y) / % change in other good's price (X)
Given {Good X Elasticities} : P.Ed = (-) 4 ; C.Ed = 2
Price of X decrease = 2%
P.Ed = 4 = % change in demand / 2
% change in demand of X = 2 x 4 = 8%
P.Ed absolute value ignoring negative has been taken due to law of demand price - demand inverse relationship already depicting it. So, 2% fall in price of X increases it's quantity demanded by 8%
C.Ed = 2 = % change in Y demand / 2
% change in Y demand = 2 x 2 = 4%
Cross Price Elasticity of demand is positive in case of substitute goods. These goods can be interchange-ably used to satisfy a particular want. Substitutes price & demand are directly related;- as price fall of a good makes it relatively cheap, increases its demand, decreases other good's demand. So, 2% decrease in good X price decreases good Y demand by 4%
Macroeconomics is: the study of individual choice and how that choice is influenced by economic forces. the study of aggregate economic relationships. the study of the pricing policies of firms and the purchasing decisions of households. an analysis of economic reality that proceeds from the parts to the whole.
Answer:
The study of how human beings COORDINATE their WANTS and DESIRES, given the decision making mechanisms, social customs, and political realities of the society
Thom owes $7,200 on his credit card. The credit card carries an APR of 18.4 percent compounded monthly. If Thom makes monthly payments of $225 per month, how long will it take for him to pay off the credit card assuming that he makes no additional charges
Answer: 45 months
Explanation:
Credit owed $7200
Monthly payment $225
APR annaully 18.4%
Monthly APR = 18.4/12 = 1.533%
SOLUTION
1st Month interest payment
1.533% x $7200 / 100 = $110.40
Principal paid (monthly payment - interest paid) = $225 - $110.40 = $114.60
Balance ( principal - principal paid) = 7200 - 114.60 = $7085.40
2nd Month interest payment
1.533% x $7085.40 / 100 = $108.64
Principal paid (monthly payment - interest paid) = $225 - $108.64 = $116.36
Balance ( principal - principal paid) = $7085.40 - $116.36 = $6969.04
By following this step up to the 45th month you get $74.74 as the monthly payment this sums up to.
Month interest payment
1.533% x $74.74 / 100 = $1.15
Principal paid (monthly payment - interest paid) = $75.88 - $1.15 = $74.74
Balance ( principal - principal paid) = $74.74 - $74.74 = $0
The payment would be completed at exactly 45months
Whirly Corporation’s contribution format income statement for the most recent month is shown below: Total Per Unit Sales (7,400 units) $ 229,400 $ 31.00 Variable expenses 133,200 18.00 Contribution margin 96,200 $ 13.00 Fixed expenses 55,100 Net operating income $ 41,100 Required: (Consider each case independently): 1. What would be the revised net operating income per month if the sales volume increases by 40 units? 2. What would be the revised net operating income per month if the sales volume decreases by 40 units? 3. What would be the revised net operating income per month if the sales volume is 6,400 units?
Answer:
1. $41,100
2. $40,580
3. $28,100
Explanation:
1. Sales volume increase by 40 units
Total sales $229,400
7,440 × $31
Less: Variable Expense $133,200
7,440 × $18
Contribution margin $96,200
Less: Fixed expenses $55,100
Net operating income $41,100
2. Sales volume decreases by 40 units
Sales Volume $228,160
7,360 × $31
Less: Variable expense $132,480
7,360 × $18
Contribution margin $95,680
Less: Fixed expenses $55,100
Net operating income $40,580
3. Sales volume is 6,400 units
Total sales $198,400
6,400 × $31
Less: Variable expense $115,200
6,400 × $18
Contribution margin $83,200
Less: Fixed expenses $55,100
Net operating income $28,100
Mette Badminton Equipment Co. wants to raise $7 million to expand operations. To accomplish this, it plans to issue 20-year bonds with a face value of $1,000. The coupon rate is set at 9% and the couponds will be paid semi-annually. The bonds are priced at a yield-to-maturity of 10%. What is the minimum number of bonds the firm must sell to raise the $7 million
Answer:
7,657 bonds
Explanation:
In order to determine the minimum number of bonds first we have to find out the present value of the bond which is to be shown in the attached spreadsheet.
Data provided in the question
Future value or Face value = $1,000
PMT = $1,000 × 9% ÷ 2 = $45
Rate of interest = 10% ÷ 2 = 5%
NPER = 20 years × 2 = 40 years
The formula is shown below:
= PV(Rate;NPER;PMT;FV;type)
So, after solving this, the present value of the bond is $914.20
Now the raise amount is $7 million
So, the number of minimum number of bonds is
= $7,000,000 ÷ $914.20
= 7,657 bonds
A machine purchased three years ago for $309,000 has a current book value using straight-line depreciation of $187,000; its operating expenses are $38,000 per year. A replacement machine would cost $235,000, have a useful life of nine years, and would require $8,000 per year in operating expenses. It has an expected salvage value of $64,000 after nine years. The current disposal value of the old machine is $72,000; if it is kept 9 more years, its residual value would be $18,000. Required Calculate the total costs in keeping the old machine and purchase a new machine. Should the old machine be replaced
Answer:
a)
Opportunity Cost (Purchase value less Salvage Value)
Old Machine = $72,000 - $18,000 = $54,000
New Machine =$235,000 - $64,000 = $171,000
Operating Costs
Old Machine = $38,000 * 9 = $342,000
New Machine = $8,000 * 9 = $72,000
Total Cost = Opportunity cost + Operating Cost
Old machine Total Cost = $54,000 + $342,000 = $396,000
New Machine Total Cost = $171,000 + $72,000 = $243,000
b)
Should the old machine be replaced? YES
The cost of keeping the old machine is more than the cost of buying and operating the new machine, therefore it is advisable to replace the old machine.
Answer:
the machine should be replaced
Explanation:
First, the cost of old machinery is sunk cost and no more relevant for our calculations as it would not affect our decision making at this point.
The following numbers hold value for the purpose of taking a decision as to whether the company should keep or replace the old machinery with a new one at this point and time.
Cost of a new machinery (if purchased)
Change in operating expenses (if machine is replaced)
Current disposal value of old machine
The company must see whether there is positive change to net income with the replacement. If there is a negative change it will not be replaced.
Step 2
1. Cost of new machinery= $ 235000
2. Changes in the operating expense/s=
Operating expense with old machine=$38000 per year for 9 years= 38000 x 9= 342000
Operating expense with new machine= $ 8000 per year for 9 years = 8000 x 9= 72000
Hence the savings in operating expenses is = $ 342000- $72000= $270000
3. Current Disposal value of old machine= $ 72000
Step 3
Putting together the numbers calculated in step 2-
Items----- --------------------------------Effect ----------------------------------Amount in $
Cost of new machine--- cash outflow -235000
Saving in operating expenses--- Cash inflow 270000
Current disposal value of old machine----- Cash inflow 72000 answer 107000
From the above calculation, it can be seen that there is a positive / net income flow of $ 107000 which is favourable to the company
In conclusion we can therefore, the machinery should be replaced with the new machinery.
Fixed expenses consist of $300,000 of common costs allocated to the three products based on relative sales, as well as direct fixed expenses unique to each model of $30,000 (Tingler), $79,500 (Shocker), and $34,300 (Stunner). The common costs will be incurred regardless of how many models are produced. The direct fixed expenses would be eliminated if that model is phased out.
Answer and explanation:
Attached is a comprehensive solution
in a well formatted excel table
Question: The question is not complete. Find below the complete quesion and the answer.
Cawley Company makes three models of tasers. Information on the three products is given below.
Tingler Shocker Stunner
Sales $300,000 $500,000 $200,000
Variable expenses 150,000 200,000 145,000
Contribution margin 150,000 300,000 55,000
Fixed expenses 120,000 230,000 95,000
Net income $ 30,000 $70,000 $(40,000)
Fixed expenses consist of $300,000 of common costs allocated to the three products based on relative sales, and additional fixed expenses of $30,000 (Tingler), $80,000 (Shocker), and $35,000 (Stunner). The common costs will be incurred regardless of how many models are produced. The other fixed expenses would be eliminated if a model is phased out. James Watt, an executive with the company, feels the Stunner line should be discontinued to increase the company.
1. Compute current net income for Crawley company
2. Compute net income after dropping the stunner line model
Answer:
1. Current net income = $60,000
2. net income = $40,000
Explanation:
See the attached file for the calculation
Anand purchased a 30 year mortgage at 6.00% convertible monthly. The amount of the loan is for $200,000. Anand plans to make the required monthly payments. The first month that his outstanding balance is $100,000 or less, he plans to purchase a larger home. How many monthly payments will Anand need to make?
Answer:
252
Explanation:
In this question we use the PMT and the NPER formula which is to be shown in the attachment below:
Given that,
Present value = $200,000
Future value or Face value = $0
RATE = 6% ÷ 12 = 0.5%
NPER = 30 years × 12 months = 360 months
The formula is shown below:
= PMT(RATE;NPER;-PV;FV;type)
The present value come in negative
So, after solving this, the pmt is $1,199.10
Now NPER is
Given that,
Present value = $200,000
Future value or Face value = $100,000
RATE = 6% ÷ 12 = 0.5%
PMT = $1,199.10
The formula is shown below:
= NPER(RATE;PMT;-PV;FV;type)
The present value come in negative
So, after solving this, the pmt is 251.82
Company requires a minimum cash balance of $ 3,100. When the company expects a cash deficiency, it borrows the exact amount required on the first of the month. Expected excess cash is used to repay any amounts owed. Interest owed from the previous month's principal balance is paid on the first of the month at 14% per year. The company has already completed the budgeting process for the first quarter for cash receipts and cash payments for all expenses except interest. Hoppy does not have any outstanding debt on January 1. Complete the cash budget for the first quarter for Hoppy Company. Round interest expense to the nearest whole dollar. Begin by preparing the cash budget for January, then prepare the cash budget for February and March. Finally, prepare the totals for the quarter. (Complete all answer boxes. Enter a "0" for any zero balances. Round all amounts entered into the cash budget to the nearest whole dollar.
Answer:
January February March Total
Beginning Cash Balance 3,100 3,100 3,100 9,300
Cash Receipts 22,500 28,000 42,500 93,000
Cash Available 25,600 31,100 45,600 102,300
Cash Payments:
All Expenses except interest 32,000 33,000 38,000 103,000
Interest 0 87 134 221
Total Cash Payments 32,000 33,087 38,134 103,221
Ending Cash Balance before (6,400) (1,987) 7,466 (921)
Financing
Minimum Cash Balance Desired (3,100) (3,100) (3,100) (9,300)
Projected Cash Excess (Deficiency) (9,500) (5,087) 4,366 (10,221)
Financing:
Borrowing 9,500 5,087 - 14,587
Principal Payments 0 0 (4,366) (4,366)
Total effects of Financing 9,500 5,087 (4,366) 10,221
Ending Cash Available 3,100 3,100 3,100 9,300
It is mentioned that the company will raise the exact amount of deficiency at the beginning of next month so any deficiency in January will be raised on 1st of February and any excess cash will be used to repay the principal amount.
Interest = Amount raised * Rate * Month
Interest due in Feb. = 9,500(Raised) * 14% * 1/12 months
Interest due in Feb. = 9,500(Raised) * 0.14 * 1/12 months = $110.83
Interest Due in March = (9,500+5,087) * 14% * 1/12 months
Interest Due in March = 14,587 * 0.14 * 0.083 months = $169.5
Enrique has a 60-month fixed installment loan, with a monthly payment of $77.86. The amount he borrowed was $3500. Instead of making his 36th payment, Enrique is paying the remaining balance on the loan. How much interest will Enrique save (use the actuarial method)
Answer:
Total interest saved = $ 774.9
Explanation:
Formula for total interest saved:
Total interest save = total interest in one month + Total interest at 36th month
Calculating total interest in one month:
As Enrique has a 60-month fixed installment loan, with a monthly payment of $77.86 so
1st payment in one month = 60 × 77.86
1st payment in one month = $4,671.6
As the amount he borrowed was $3500.
Therefore
Total interest = 4,671.6 - 3,500
Total interest = $1,171.6
Calculating total interest at 36th month:
Total interest at 36th month = ( 60 - 35 )× 77.86
Total interest at 36th month = 1,946.5
Therefore by putting the values in the above formula, we get
Total interest saved = $1,946.5- $1,1716
Total interest saved = $ 774.9
Final answer:
Enrique will save approximately $102.42 in interest.
Explanation:
To calculate the interest saved using the actuarial method, we first find the total interest paid over the course of the loan by subtracting the principal amount borrowed from the total amount paid (monthly payment multiplied by the number of payments). Then, we calculate the remaining balance on the loan after 35 payments using the present value of an annuity formula. Finally, we subtract this remaining balance from the total amount paid to find the interest saved. By performing these calculations, we determine that Enrique will save approximately $102.42 in interest by paying off the remaining balance on the loan instead of making the 36th payment. This represents the interest that would have been paid on the remaining balance over the remaining loan term.
Blue Landscaping began construction of a new plant on December 1, 2017. On this date, the company purchased a parcel of land for $150,000 in cash. In addition, it paid $2,400 in surveying costs and $3,840 for a title insurance policy. An old dwelling on the premises was demolished at a cost of $3,360, with $1,200 being received from the sale of materials.
Architectural plans were also formalized on December 1, 2017, when the architect was paid $36,000. The necessary building permits costing $3,360 were obtained from the city and paid for on December 1 as well. The excavation work began during the first week in December with payments made to the contractor in 2018 as follows.
Date of Payment Amount of Payment
March 1 $ 262,800
May 1 333,600
July 1 63,600
The building was completed on July 1, 2018.
To finance construction of this plant, Blue borrowed $603,600 from the bank on December 1, 2017. Blue had no other borrowings. The $603,600 was a 10-year loan bearing interest at 10%.
Compute the balance in each of the following accounts at December 31, 2017, and December 31, 2018. (Round answers to 0 decimal places, e.g. 5,275.)
December 31, 2017 December 31, 2018
(a) Balance in Land Account
(b) Balance in Building
(c) Balance in Interest Expense
Final answer:
At December 31, 2017, Blue Landscaping's Land Account is $154,080, the Building Account is $39,360, and the Interest Expense is $5,030. By December 31, 2018, the Land Account remains at $154,080, the Building Account increases to $699,360, and the Interest Expense for the year is $60,360.
Explanation:
To compute the balance in each account for Blue Landscaping at December 31, 2017, and December 31, 2018, the costs incurred and payments made towards the construction must be taken into account, as well as the interest expense incurred from the loan.
December 31, 2017 Balances
Land Account: includes the purchase of land, surveying costs, title insurance, and net demolition costs (demolition costs minus the sale of materials): $150,000 + $2,400 + $3,840 - ($3,360 - $1,200) = $154,080.Building Account: includes the architectural plans fee and permits since no construction payments were made in 2017: $36,000 + $3,360 = $39,360.Interest Expense: the interest for one month (December) on the loan at 10%: $603,600 * 10% * (1/12) = $5,030 (rounded to $5,030).December 31, 2018 Balances
The Land Account will remain unchanged at $154,080 as no further costs are added to land.Building Account: add payments made to the contractor to the initial balance: $39,360 + $262,800 + $333,600 + $63,600 = $699,360.Interest Expense: the interest for the full year (2018) on the loan at 10%: $603,600 * 10% = $60,360.In economics, the cost of something is a. always measured in units of time given up to get it. b. the dollar amount of obtaining it. c. what you give up to get it. d. often impossible to quantify, even in principle. 1
Answer:
The correct answer is C
Explanation:
Economies is the study of how the society uses the resources which are limited and it deals with the consumption, production as well as distribution of the goods and services.
And under the economics the cost of something like or product is defined as what the person give up in order to get something.
For example, a person wants to purchase to product, he needs to give up the money against it in order to have the product or item with him.
Problem 13-140 Brewer Company is considering purchasing a machine... Brewer Company is considering purchasing a machine that would cost $537,600 and have a useful life of 9 years. The machine would reduce cash operating costs by $82,708 per year. The machine would have a salvage value of $107,520 at the end of the project. (Ignore income taxes.) Required: a. Compute the payback period for the machine. (Round your answer to 2 decimal places.) Payback period years b. Compute the simple rate of return for the machine. (Round your answer to 2 decimal places. Omit the "%" sign in your response.) Simple rate of return %
Answer:
Payback is 6.5 years
simple rate of return is 6.50%
Explanation:
The payback period for the investment is the number of years it would take the initial capital outlay of $537,600 to recoup itself,which is given by the formula below:
payback period=initial investment/annual incremental savings
initial investment is $537,600
annual incremental savings is $82,708
payback period=$537,600/$82,708= 6.5 years
Simple rate of return =annual savings-depreciation/initial investment
depreciation=($537,600-$107,520)/9=$47,786.67
simple rate of return=($82,708-$47,786.67)/$537,600=6.50%
Suppose Jacques and Kyoko are playing a game in which both must simultaneously choose the action Left or Right. The payoff matrix that follows shows the payoff each person will earn as a function of both of their choices. For example, the lower-right cell shows that if Jacques chooses Right and Kyoko chooses Right, Jacques will receive a payoff of 5 and Kyoko will receive a payoff of 3Kyoko Left Right 3,72,6 4,5 Left Jacques Right 3,8 The only dominant strategy in this game is for to choose The outcome reflecting the unique Nash equilibrium in this game is as follows: Jacques chooses_and Kyoko chooses
Answer: 1. Jacques picks Right
2. Jacques picks Right and Kyoko picks Right.
Explanation:
Hello.
I wasn't quite clear on your question so I added an attachment with the full question.
1. The only dominant strategy in this game is for ____Jacques____ to choose ___Right____.
The Dominant strategy for a player is that strategy that will result in the highest payoff independent of the actions of the other player.
If Jacques plays Right, they will have more or equal payouts but never less than Left regardless of what Kyoko does. Therefore choosing Right is Jacques's Dominant strategy.
2. The outcome reflecting the unique Nash equilibrium in this game is as follows: Jacques chooses___Right_______and Kyoko chooses ____Right_____.
Jacques will go with their dominant strategy of picking Right. This will make Kyoto pick the alternative of Right that results in the higher payoff. They make a payoff of 8 if they pick Right as well so that is what they will do.
If you need any clarification do comment. Cheers.
The owner of a bicycle repair shop forecasts revenues of $188,000 a year. Variable costs will be $57,000, and rental costs for the shop are $37,000 a year. Depreciation on the repair tools will be $17,000.a. Prepare an income statement for the shop based on these estimates. The tax rate is 20%.INCOME STATEMENTRevenueVariable costsRental costsDepreciationPretax profitTaxesNet incomeb. Calculate the operating cash flow for the repair shop using the three methods given below:Now calculate the operating cash flow.Dollars in minus dollars out.Adjusted accounting profits.Add back depreciation tax shield.Methods of Calculation Operating Cash Flowi. Dollars in Minus Dollars Out ii. Adjusted Accounting profits iii. After tax Operating Cash flow
Answer:
A) Net income = $61,600
B)
I. Dollars in Minus Dollars Out = $94,000
II. Adjusted Accounting profit = $77,000
III. After tax Operating Cash flow = $78,600
Explanation:
a) Below is the income statement for the bicycle repair shop
Revenue:
Revenues = $188,000
Total Revenue = $188,000
Expenses:
Variable costs = $57,000
Rent (of shop) = $37,000
Total Expenses = $94,000
Gains:
Gain = $0
Losses:
Depreciation (of repair tools) = $17,000
Income Before Tax = $77,000
Income Tax (at 20%) = $15,400
Net Income = $61,600
b) We calculate Operating Cash Flow using 3 methods:
I. Dollars in Minus Dollars Out = Revenue - Expenses = $(188,000 - 94,000)
Dollars in Minus Dollars Out = $94,000
II. Adjusted accounting profits = Total monetary revenue - Total costs
Total costs = Total Expenses + Depreciation = $(94,000 + 17,000)
Total costs = $111,000
Accounting profit = $(188,000 - 111,000)
Accounting profit = $77,000
III. Add back depreciation tax shield = Net Income + Depreciation
Add back depreciation tax shield = $(61,600 + 17,000)
Add back depreciation tax shield = $78,600
Final answer:
An income statement for the bicycle repair shop shows a net income of $61,600 after accounting for variable costs, rental costs, depreciation, and taxes. Operating cash flow can be calculated using three methods: 'Dollars in minus Dollars out' yields $94,000, 'Adjusted Accounting profits' is $78,600, and 'After tax Operating Cash flow' is $64,400.
Explanation:
To create an income statement for the bicycle repair shop, we'll begin by subtracting the variable costs, rental costs, and depreciation from the revenues to determine the pretax profit. We then calculate the taxes by taking 20% of the pretax profit and subtracting it to find the net income. Next, we'll calculate the operating cash flows using the provided methods.
Income Statement
Revenue: $188,000Variable costs: -$57,000Rental costs: -$37,000Depreciation: -$17,000Pretax profit: $77,000Taxes (20%): -$15,400Net income: $61,600Operating Cash Flow Calculations
Dollars in minus Dollars out: We calculate this by taking the Revenue and subtracting the Variable and Rental costs (not taking depreciation into account since it's a non-cash expense).Adjusted Accounting profits: We start with the Net income and then add back the Depreciation because it's a non-cash charge.After tax Operating Cash flow: Calculate the taxes saved from the Depreciation tax shield by multiplying the Depreciation with the tax rate, then add this amount to the Net income.The specific calculations for the operating cash flow are as follows:
Method i (Dollars in minus Dollars out): $188,000 - $57,000 - $37,000 = $94,000Method ii (Adjusted Accounting profits): $61,600 + $17,000 = $78,600Method iii (After tax Operating Cash flow): $61,600 + ($17,000 * 20%) = $64,400Explain precisely why ‘Opportunity Cost’ is always a RELATIVE concept and is never to be construed in ABSOLUTE terms. In addition, why is the PPF function never strictly convex -what is the economic implication of strict convexity? You are free to provide appropriate examples of your choice.
Answer:
Opportunity costs are defined as the additional costs or benefits lost from choosing one activity or investment over another alternative. It is a relative concept because you cannot be 100% sure that the other investments or activities would have yielded a specific gain.
For example, when you calculate the economic cost of starting your own business, you consider your current salary as an opportunity cost. But what happens if you get fired (or the company closes), your opportunity cost would have been $0? Or how can you exactly measure your future salaries? Maybe in a couple of years you get promoted to manager, or maybe not?
The same applies to economies, since the opportunity cost of producing certain tradable goods is not always fixed, it might decrease or increase due to productivity or efficiency changes. But in order to calculate or determine we must include the most probable option.
In microeconomics, a strictly convex production possibilities frontier function must include a combination of both goods. In strict convexity, the second derivative f''(x) ˃ 0, so the PFF curve cannot be straight, it must have a slope.
When we calculate the opportunity costs of PPF, we usually try to determine which product has the lowest opportunity cost, but that is not an interior solution because both goods are not being produced (the curve is not strictly convex). On a strictly convex curve, as you approach the extremes the opportunity cost of producing one good is high, but on the center the opportunity cost is much lower.
Sales budget LO P1 Scora, Inc., is preparing its master budget for the quarter ending March 31. It sells a single product for $50 per unit. Budgeted sales for the next three months follow. January February March Sales in units 1,000 3,000 1,700 Prepare a sales budget for the months of January, February, and March.
Answer:
Total Budgeted unit sales$5,700
Total budgeted unit price $50
Budgeted total sales $285,000
Explanation:
Sales budget for the months of January, February, and March.
Budgeted unit sales × Budgeted unit price =Budgeted total sales
January $1,000 ×50=$50,000
February $3,000×50=$150,000
March $1,700×50=$85,000
Total Budgeted unit sales=$1,000+$3,000+$1,700=$5,700
Total Budgeted unit price $50
Budgeted total sales=$50,000+$150,000+$85,000
=$285,000
When Sony launched its new PS4 gaming system, the product was sold as a package that included the game console, game controllers, wireless headset, and one video game. This is an example of
Answer:
Bundling
Explanation:
Bundling a strategy in which two or more products are packaged together and sold as a single combined unit, often for a lower price than they would charge customers to buy each item separately.
This strategy has a distinct feature which entails that The products and services are usually related, but they can also consist of dissimilar items which appeal to one group of customers.
In the bundling marketing strategy, the strategy of companies offering discounts can stimulate demand, lifting revenues often at the expense of profit margins.
It enables companies roll out different productsat the same time and selling at a discounted price while still making huge profit.
Answer:
Explanation:
When Sony launched its new PS4 gaming system, the product was sold as a package that included the game console, game controllers, wireless headset, and one video game. This is an example of price bundling
Price bundling is putting together as a unit several products or services into a single comprehensive package for a total packaged reduced price. Thins type of price bundling has the capability to increase profits because it promotes the purchase of more than one item which, had it been sold seperately might not be as affordable as that. For Sony to sell a total package of the new PS4 gaming system, game console, game controllers, wireless headset, and one video game at a reduced price is favorable to the customers and a good price bundle.
Cassy Budd Company has a defined benefit pension plan. At the end of the reporting year, the following data were available: beginning PBO, $80,000; service cost, $18,500; interest cost, $5,500; benefits paid for the year, $9,500; ending PBO, $94,500; the expected return on plan assets, $10,500; and cash deposited with pension trustee, $18,000. There were no other pension-related costs. The journal entry to record the annual pension costs will include a credit to the PBO for:
Answer:
Credit to the PBO for $13,500
Explanation:
Defined benefit pension plan is a pension structure adopted by a company in which an employee is guaranteed payments in the future for example after retirement. Since the payments are given far into the future, complex calculations are required to compute how to account for annual expenses and changes in pension obligation.
Now, under the above plan, the amount of the future benefits that will be paid for by the company depends on a multitude of factors such length of time served, an employee lifespan. The annual expense needs to match the recognition of the related expense in the period in which the particular employee renders the service for which they will be paid in the future.
So, the formula for Periodic (Annual) Pension Expense is Interest Costs (Interest incurred on the beginning Projected Benefit Obligation) + Service Costs (Present Value of the projected retirement benefits earned in the current period) - Actual Return on Plan Assets (the returns provided by the assets held under the Company's pension plan) + Amortization of Prior Service Costs (changes to pension expense as a retroactive amendments to the pension plan) +/- Amortization of Actuarial Gains or Losses (the change in the PBO as a result of changes in assumptions used to calculate the PBO).
The question provides us with the interest costs, the services costs, and the expected return on plan assets with other costs being nil.
Therefore, annual pension expense is Service Costs + Interest Costs - Expected Return on Plan Assets = 18,500 + 5,500 - 10,500 = 13,500.
The journal entry is a credit to the PBO of the amount of the expense and a debit to the Pension Expense. Note that the difference between ending PBO and beginning PBO is NOT equivalent to annual expense since other items such as company's contribution and changes in fair value of the liability also impact the PBO.
Answer:
$24,000
Explanation:
It is shown in the file attached