Answer: Purchasers and sellers
Explanation: Free market refers to a market structure in which the goods and services are priced on the basis of market forces of demand and supply. The intervention of Government in such markets for the purpose of price controlling is very minimal.
The demand force depends on the purchasers and the supply force depends on the sellers.
Thus, from the above we can conclude that the correct option is A.
Exercise 3-14 Presented below is information related to Pronghorn Corporation for the month of January 2017. Cost of goods sold $192,390 Salaries and wages expense $65,800 Delivery expense 7,620 Sales discounts 8,440 Insurance expense 11,850 Sales returns and allowances 12,030 Rent expense 18,830 Sales revenue 319,900 Prepare the necessary closing entries. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.)
Answer:
Explanation:
The closing entry for the following accounts are shown below:
1. Sales Revenue A/c Dr $319,900
To Income Summary $319,900
(Being revenue account closed)
2. Income summary A/c Dr $316,960
To Cost of goods sold $192,390
To Delivery Expense $7,620
To Salaries and Wages Expense $65,800
To Insurance Expense $11,850
To Sales returns and allowances $12,030
To Rent Expense $18,830
To Sales discounts $8,440
(Being expenses accounts are closed)
3. Income summary A/c Dr $2,940 ($319,900 - $316,960)
To Retained earning $2,940
(Being the difference is credited to retained earning)
Landen Corporation uses a job-order costing system. At the beginning of the year, the company made the following estimates: Direct labor-hours required to support estimated production 125,000 Machine-hours required to support estimated production 62,500 Fixed manufacturing overhead cost $ 350,000 Variable manufacturing overhead cost per direct labor-hour $ 3.80 Variable manufacturing overhead cost per machine-hour $ 7.60 During the year, Job 550 was started and completed. The following information is available with respect to this job: Direct materials $ 201 Direct labor cost $ 240 Direct labor-hours 15 Machine-hours 5 Required: 1. Assume that Landen has historically used a plantwide predetermined overhead rate with direct labor-hours as the allocation base. Under this approach: a. Compute the plantwide predetermined overhead rate. b. Compute the total manufacturing cost of Job 550. c. If Landen uses a markup percentage of 200% of its total manufacturing cost, what selling price would it establish for Job 550? 2. Assume that Landen’s controller believes that machine-hours is a better allocation base than direct labor-hours. Under this approach: a. Compute the plantwide predetermined overhead rate. b. Compute the total manufacturing cost of Job 550. c. If Landen uses a markup percentage of 200% of its total manufacturing cost, what selling price would it establish for Job 550?
The total manufacturing cost of Job 550 is the sum of direct materials cost, direct labor cost, and manufacturing overhead cost. The selling price for Job 550 is the total manufacturing cost multiplied by the markup percentage.
Explanation:To compute the plantwide predetermined overhead rate, you need to divide the total estimated manufacturing overhead costs by the total estimated allocation base. In this case, the allocated base is the direct labor-hours. So, the plantwide predetermined overhead rate can be calculated as $350,000 / 125,000 = $2.80 per direct labor-hour.
To compute the total manufacturing cost of Job 550, you need to add together the direct materials cost, direct labor cost, and manufacturing overhead cost. In this case, the direct materials cost is $201, the direct labor cost is $240, and the manufacturing overhead cost (calculated using the plantwide predetermined overhead rate) is $2.80 x 15 hours = $42. The total manufacturing cost of Job 550 is $201 + $240 + $42 = $483.
If Landen uses a markup percentage of 200% of its total manufacturing cost, the selling price for Job 550 would be calculated as $483 x 200% = $966.
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Final answer:
The plantwide predetermined overhead rates are calculated using direct labor-hours or machine-hours; Job 550's total manufacturing cost and selling price are determined based on these rates. Different production methods are analyzed for cost-effectiveness by comparing the total costs, which include labor and machine costs.
Explanation:
To compute the plantwide predetermined overhead rate using direct labor-hours, we sum the fixed manufacturing overhead cost ($350,000) with the variable cost per direct labor-hour ($3.80) multiplied by the total estimated direct labor-hours (125,000). The total manufacturing cost of Job 550 includes the direct materials, direct labor cost, and the applied overhead. When using a markup of 200% on the total manufacturing cost, the selling price for Job 550 is calculated accordingly. On the other hand, if machine-hours are used as the base for the plantwide predetermined overhead rate, the calculation involves the fixed manufacturing overhead cost and the variable cost per machine-hour ($7.60) multiplied by the total estimated machine-hours (62,500).
When evaluating different methods of production, the total costs including the cost of labor and machine are considered to determine the most cost-effective method. In the numerical examples provided, adjustments in the cost of machines affect the overall costs systematically, allowing comparison and selection of the optimal production method based on cost efficiency.
Compound interest is a very powerful way to save for your retirement. Saving a little and giving it time to grow is often more effective than saving a lot over a short period of time. To illustrate this, suppose your goal is to save $1 million by the age of 6060. What amount of money will be saved by socking away $11 comma 79311,793 per year starting at age 2929 with aa 66% annual interest rate. Will you achieve your goal using the long-term savings plan? What amount of money will be saved by socking away $27 comma 18627,186 per year starting at age 4040 at the same interest rate? Will you achieve your goal using the short-term savings plan?
Answer:
In both cases you will reach $1 million in savings
Explanation:
Giving the following information:
Suppose your goal is to save $1 million by the age of 60.
1) What amount of money will be saved by socking away $11,793 per year starting at age 29 with a 6% annual interest rate?
We need to use the final value formula with an annual deposit:
FV= {A*[(1+i)^n-1]}/i
A= annual deposit
FV= {11793*[(1.06^31)-1]}/0.06= $1,000,066.18
2)What amount of money will be saved by socking away $27,186 per year starting at age 40 at the same interest rate?
FV= {27186*[(1.06^20)-1]}/0.06
FV= $1,000,053.1
In both the cases, an individual would reach his target of reaching $1 million in savings.
What is savings?Saving is that part of income which is not spent, or postponed consumption. Methods of saving include putting money aside in.
Example:
A deposit account, an investment fund, or as cash. Saving also regards cut back expenditures, such as recurring costs.
Computation of Savings:
(1). If starting at the age of 29 years, the total amount of saving would be:
Given that,
A= Annuity = $11,793,
n = time = 31 years,
r = Rate = 6%.
Now, we have to put here the formula of future value(FV):
[tex]\text{FV} =A \dfrac{(1+i)^n-1}{i}\\\\\\\text{FV} =\$11,793\times \dfrac{(1+6\%)^3^1-1}{6\%}\\\\\\\text{FV} = \$1,000,066.18[/tex]
(2). If starting at the age of 40 years, the total amount of saving would be:
Given that,
A= Annuity = $27,186,
n = time = 20 years,
r = Rate = 6%.
Here also, we have to put here the formula of future value(FV):
[tex]\text{FV} =A \dfrac{(1+i)^n-1}{i}\\\\\\\text{FV} =\$27,186\times \dfrac{(1+6\%)^2^0-1}{6\%}\\\\\\\text{FV} = \$1,000,053.1[/tex]
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Jeremy is an effective leader who is capable of helping his subordinates complete their tasks. However, he is considered intimidating by some of his team members and is often unable to boost the group's morale. Jeremy feels that since his strengths are task oriented, management should place him as the leader of team members who need task-related guidance. Jeremy is a strong believer of which leadership theory or approach?
Answer:
Transactional leadership style
Explanation:
Transactional leadership style is where the leader is focused on the overall goals of the company and getting things done instead of building a more long term social relationship. The leader is focused on a more professional relationship which benefits all the involved parties in such a way that is limited to the company only.
Which one of the following best describes the term "efficient market"?A) The commissions on large transactions are smaller than the commissions on small transactions.B) New information is quickly reflected in security prices.C) Little time and effort are spent on marketing securities to the public.D) The cost of receiving, processing, executing, and reporting securities orders is small.
Answer: Option B
Explanation: In simple words, the market in which the price of the securities reflect all the information that is relevant to the the investor is called an efficient market. No investor can beat such markets as no security is undervalued or overvalued.
This accuracy in pricing could only be maintained when all the participants are fully aware of new information which is possible only if the information is quickly spread in the market.
Hence the correct option is B.
You have been assigned to make a recommendation about whether to build a factory manufacturing facility in Arkansas or New Jersey. Average production is estimated at 60,000 units per year. Estimations for cost factors were observed by obtaining cost data over the past year. Fixed costs including the financing of building and equipment, property taxes and insurance as well as overhead staff. Variable costs include repair product development, direct labor, shipping in and out. Our analysis indicated the following costs: Arkansas New Jersey Fixed $3,753,000 $2,221,000 Variable $52.73 $74.99 The difference in cost for production between New Jersey and Arkansas when manufacturing 75000 units is
Answer:
The differential cost is $4,369,250 in favor of New Jersey
Explanation:
Giving the following information:
Arkansas:
Fixed costs=$3,753,000
Variable costs= $52.73
New Jersey:
Fixed costs= $2,221,000
Variable costs= $14.99
If the production is 75000 units
Arkansas= 3753000+ 52.73*75000= $7707750
New Jersey= 2221000+14.9*75000= $3338500
The differential cost is $4,369,250 in favor of New Jersey
Layla works during her meeting to pull together the ideas of her committee members into a coherent whole. Layla is performing a ___________ role.a.Maintenanceb.Relationship-orientedc.Taskd.Social
Answer: C
Explanation:
Layla works during her meeting to pull together the ideas of her committee members into a coherent whole. Layla is performing a task . task, duty, job, chore, stint, assignment mean a piece of work to be done. task implies work imposed by a person in authority or an employer or by circumstance. charged with a variety of tasks duty implies an obligation to perform or responsibility for performance.
The correct answer is C. Task
Explanation:
In a group discussion, meeting or similar scenario, participants can have different roles. In the case of task roles, this refers to roles such as monitoring participation, gathering information or pulling ideas together to get to conclusions or find a solution, and even motivating participants. The activities belong to a task role because they help the group to achieve the main purpose or goal.
Layla is performing a task role because her action of pulling ideas together is a common task or activity in this role, also, this action helps the group to accomplish the goal considering without Layla doing this, the group would not get a complete and coherent idea of the ideas provided by all participants.
A company has the following balances on December 31, 2018, after year-end adjustments: Accounts Receivable = $62,500; Allowance for Uncollectible Accounts = $6,200.
Calculate the net realizable value of accounts receivable
Answer: The net realizable value is the maximum value that can be achieved with the sale of the asset, discounting the costs associated with it.
The net realizable value (NRV) of accounts receivable would be:
NRV = Accounts Receivable - Allowance for Uncollectible Accounts
NRV = $ 62,500 - $ 6,200
NRV = $ 56,300
Horton Co. was organized on January 2, 2014, with 500,000 authorized shares of $10 par value common stock. During 2014, Horton had the following capital transactions:
January 5-issued 375,000 shares at $14 per share.
July 27-purchased 25,000 shares at $11 per share.
November 25-sold 18,000 shares of treasury stock at $13 per share.
Horton used the cost method to record the purchase of the treasury shares. What would be the balance in the Paid-in Capital from Treasury Stock account at December 31, 2014?
Answer:
The balance in the Paid-in Capital from Treasury Stock account at December 31, 2014 is $36,000
Explanation:
The computation of the balance in the treasury stock account is shown below:
= Number of shares sold × (Selling price of share - purchase price of share)
= 18,000 shares × ($13 per share - $11 per share)
= 18,000 shares × $2 per share
= $36,000
The other items which are mentioned like issued shares, authorized shares are irrelevant because we have to compute for the treasury stock, not for the common stock. So, these parts would be ignored in the computation part.
The balance in the Paid-in Capital from Treasury Stock account at December 31, 2014 can be calculated by considering the capital transactions of Horton Co. during the year.
Explanation:The balance in the Paid-in Capital from Treasury Stock account at December 31, 2014 can be calculated by considering the capital transactions of Horton Co. during the year.
On January 5, 375,000 shares were issued at $14 per share, resulting in an increase in Paid-in Capital. On July 27, 25,000 shares were purchased at $11 per share. Since the cost method was used, this transaction does not impact Paid-in Capital from Treasury Stock. On November 25, 18,000 shares of treasury stock were sold at $13 per share, resulting in a decrease in Paid-in Capital from Treasury Stock.
To calculate the balance, we need to subtract the decrease in Paid-in Capital from Treasury Stock from the increase in Paid-in Capital. Therefore, the balance would be the increase from the January 5 transaction, which is (375,000 shares x $14 per share) minus the decrease from the November 25 transaction, which is (18,000 shares x $13 per share).
Income Statement The revenues and expenses of Paradise Travel Service for the year ended May 31, 20Y6, follow: Fees earned $954,210 Office expense 219,470 Miscellaneous expense 19,085 Wages expense 458,020 Prepare an income statement for the year ended May 31, 20Y6. Paradise Travel Service Income Statement For the Year Ended May 31, 20Y6
Answer:
Instructions are listed below
Explanation:
An income statement is one of the three important financial statements used for reporting a company's financial performance over a specific accounting period. The income statement focuses on the four key items - revenue, expenses, gains, and losses. It does not cover receipts (money received by the business) or the cash payments/disbursements (money paid by the business).
It follows the general structures:
Revenues (+)
Operating Revenue
Non-Operating Revenue
Total
Expenses (-)
Primary Activity Expenses
Secondary Activity Expenses
Total
Gains (+)
Losses (-)
Net income/loss
In this exercise:
Total revenues=$954210
Expenses:
Office expense 219470
Miscellaneous expense 19085
Wages expense 458020
Total Expenses=$696575
Net profit= $275635
Dahlia Colby, CFO of Charming Florist Ltd., has created the firm’s pro forma balance sheet for the next fiscal year. Sales are projected to grow by 20 percent to $480 million. Current assets, fixed assets, and short-term debt are 20 percent, 70 percent, and 10 percent of sales, respectively. Charming Florist pays out 20 percent of its net income in dividends. The company currently has $125 million of long-term debt and $53 million in common stock par value. The profit margin is 15 percent.
a. Prepare the current balance sheet for the firm using the projected sales figure.
b. Based on Ms. Colby’s sales growth forecast, how much does Charming Florist need in external funds for the upcoming fiscal year?
c-1. Prepare the firm’s pro forma balance sheet for the next fiscal year.
c-2. Calculate the external funds needed.
A balance sheet is a fiscal report that gives a preview of an organization's monetary situation by summing up its resources, liabilities, and investors' value at a particular moment.
a. Current Asset report (Projected Deals: $480 million):
Current Resources:
Cash: $96 million (20% of $480 million)
Records of sales: $96 million (20% of $480 million)
Stock: $96 million (20% of $480 million)
All out Current Resources: $288 million
Fixed Resources: $336 million (70% of $480 million)
All out Resources: $624 million
Current Liabilities:
Momentary Obligation: $48 million (10% of $480 million)
Long haul Obligation: $125 million
Normal Stock: $53 million
All out Liabilities and Value: $624 million
b. External Funds Needed = (Projected Complete Resources - Current All out Liabilities and Value) - (Introductory All out Resources - Starting Absolute Liabilities and Value)
Outside Assets Required = ($624 million - $624 million) - ($480 million - ($125 million + $53 million))
Outside Assets Required = $0 - $302 million
= - $302 million (No outer assets required)
c-1. ro Forma Balance Sheet (Projected Deals: $480 million):
(Utilizing the determined qualities from section a.)
c-2. External Funds Needed:
As determined to some extent b, no outside reserves are required (- $302 million). The organization's projected development can be supported utilizing inward assets.
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The current balance sheet is prepared based on given ratios and Dahlia Colby's sales projection. In the next fiscal year, the firm's pro forma balance sheet is presented with additional retained earnings. Based on the difference between total assets and current liabilities, the external funds required for the Charming Florist can be determined.
Explanation:a. To prepare the current balance sheet using the projected sales figures, we will perform the following calculations:
Current assets: 0.20 × $480 million = $96 millionFixed assets: 0.70 × $480 million = $336 million Short-term debt: 0.10 × $480 million = $48 millionb. The net income of Charming Florist is determined by the profit margin which is 15% of the sales, making it $72 million (0.15 × $480 million). Dividends payout is 20% of the net income, therefore, $14.4 million (0.20 × $72 million) is paid out in dividends. This leaves $57.6 million (72 - 14.4) as an addition to retained earnings. To calculate the external funds needed, subtract this figure and the short-term debt from the total of current and fixed assets.
c-1. A pro forma balance sheet for the next fiscal year would look something like this:
c-2. Depending upon the exact current retained earnings, the required external financing can alter. But theoretically, if everything is the same, it can be calculated as Total Assets (i.e. Current and Fixed Assets) - (Short-term debts + Long-term debts + Common Stock + Retained Earnings).
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Molteni Motors Inc. recently reported $3.25 million of net income. Its EBIT was $6.25 million, and its tax rate was 35%. What was its interest expense? (Hint: Write out the headings for an income statement and then fill in the known values. Then divide $3.25 million net income by 1 − T = 0.65 to find the pre-tax income. The difference between EBIT and taxable income must be the interest expense.) Enter your answer in dollars. For example, an answer of $1.2 million should be entered as 1,200,000. Round your answer to the nearest dollar.
Answer:
Interest= $1250000
Explanation:
We know that:
EBIT
interest (-)
=earnings before taxes
tax (-)
=Net profit
EBIT= 6250000
Interest= ?
t= 0,35
Net profit= 3250000
interest= [netprofit/(1-t)]- EBIT
interest= (3250000/0,65)-6250000
interest= 1250000
Tax=(EBIT-interest)*0,35= 1750000
To calculate the interest expense, we can use the formula: Interest Expense = EBIT - Taxable Income. Using the given values, the interest expense is $1.25 million.
Explanation:To find the interest expense, we can use the formula:
Interest Expense = EBIT - Taxable Income
First, we need to calculate the taxable income by dividing the net income by (1 - tax rate):
Taxable Income = Net Income / (1 - Tax Rate)
Substituting the given values, we have:
Taxable Income = $3.25 million / (1 - 0.35) = $5 million
Next, we can calculate the interest expense by subtracting the taxable income from EBIT:
Interest Expense = EBIT - Taxable Income
Interest Expense = $6.25 million - $5 million = $1.25 million
Therefore, the interest expense is $1.25 million.
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A product may be made using machine I or machine II. The manufacturer estimates that the monthly fixed costs of using machine I are $18,000, whereas the monthly fixed costs of using machine II are $15,000. The variable costs of manufacturing 1 unit of the product using machine I and machine II are $10 and $20, respectively. The products sell for $50 each. What is the maximum profit if the projected sales are 650 units
Answer:
maximum profit is $8000 if sales from machine 1
Explanation:
given data
monthly fixed costs machine 1 = $18000
monthly fixed costs machine 2 = $15000
variable costs by machine 1 = $10
variable costs by machine 2 = $20
products sell = $50 each
to find out
What is the maximum profit if the projected sales are 650 units
solution
we consider here no of machine sold = x
and we know total Cost = Fixed Cost + Variable Cost
so for machine 1 cost = 18000 + 10x
for machine 2 cost = 15000 + 20x
here x we have given 650 machine sold so
for machine 1 cost = 18000 + 10(650) = $24500
for machine 2 cost = 15000 + 20(650) = $28000
we know products sell for $50 each
so earn for 650 = $32500
so profit from machine 1 = $32500 - $24500 = $8000
so profit from machine 2 = $32500 - $28000 = $4500
so maximum profit is $8000 if sales from machine 1
Final answer:
By calculating the profits using Machine I and Machine II, the maximum profit is achieved with Machine I, totaling $8,000.
Explanation:
To determine the maximum profit with projected sales of 650 units, we need to calculate the total cost and total revenue for producing 650 units with both Machine I and Machine II, then find the profit (Revenue - Cost) for each scenario to identify the higher profit.
Machine I
Fixed Costs: $18,000Variable Cost per unit: $10Total Variable Cost: $10 * 650 = $6,500Total Cost: Fixed Costs + Total Variable Cost = $18,000 + $6,500 = $24,500Total Revenue: $50 * 650 = $32,500Profit: Total Revenue - Total Cost = $32,500 - $24,500 = $8,000Machine II
Fixed Costs: $15,000Variable Cost per unit: $20Total Variable Cost: $20 * 650 = $13,000Total Cost: Fixed Costs + Total Variable Cost = $15,000 + $13,000 = $28,000Total Revenue: $50 * 650 = $32,500Profit: Total Revenue - Total Cost = $32,500 - $28,000 = $4,500The maximum profit of $8,000 is achieved with Machine I.
Nicola borrows 50000 dollars from a bank that charges interest at an annual rate of 8 percent, compounded monthly. Calculate the monthly payment that Nicola would have to make in order for the loan to be paid off after exactly 25 years. (Give your answer, in dollars, to the nearest cent. You should not include the dollar sign or any commas in your answer.)
Answer: $387.23
Explanation:
Given that,
Borrowed from bank, P = $50,000
Annual interest rate, r = 8% = 0.08
Monthly rate of interest = [tex]\frac{0.08}{12}[/tex]
= 0.0067
Tenure(period), n = 25 years = 25 × 12
= 300 months
[tex]Monthly\ Installments=\frac{P\times r\times (1+r)^{n}}{[(1+r)^{n}-1]}[/tex]
[tex]Monthly\ Installments=\frac{50,000\times 0.0067\times (1+0.0067)^{300}}{[(1+0.0067)^{300}-1]}[/tex]
[tex]=\frac{50,000\times0.0067\times7.413453}{7.413453-1}[/tex]
[tex]= \frac{2,483.50676}{6.413453}[/tex]
= 387.23
Therefore, the required monthly payment is $387.23
Final answer:
Nicola needs to make a monthly payment of approximately $416.12 for 25 years to pay off a $50,000 loan with an 8% annual interest rate compounded monthly.
Explanation:
To calculate the monthly payment that Nicola would have to make to pay off the $50,000 loan after exactly 25 years at an annual interest rate of 8% compounded monthly, we will use the present value of an annuity formula. The monthly interest rate is 0.08 (annual rate) divided by 12 (months), which equals 0.00666667. The number of payments over 25 years is 25 years times 12 months, equalling 300 payments.
The formula for the present value of an annuity, which tells us the payment amount per time period, is:
PV = PMT ×
When rearranged to solve for PMT (the payment amount), it becomes:
PMT = PV ×
Substitute the values we have:
PMT = $50,000 ×
After performing the calculations, the monthly payment comes to approximately $416.12. Thus, Nicola would have to pay around $416.12 per month for 25 years to pay off the compounded interest loan.
Suppose there are two states that do not trade: Iowa and Nebraska. Each state produces the same two goods: corn and wheat. For Iowa the opportunity cost of producing 1 bushel of wheat is 3 bushels of corn. For Nebraska the opportunity cost of producing 1 bushel of corn is 3 bushels of wheat. At present, Iowa produces 20 million bushels of wheat and 120 million bushels of corn, while Nebraska produces 20 million bushels of corn and 120 million bushels of wheat.
...
Explain how, with trade, Nebraska can end up with 40 million bushels of wheat and 120 million bushels of corn while Iowa can end up with 40 million bushels of corn and 120 million bushels of wheat.
Explanation:
Iowa's opportunity cost of producing 1 bushel of wheat is
= 3 bushels of corn
Nebraska's opportunity cost of producing 1 bushel of wheat is
= [tex]\frac{1}{3}[/tex]
= 0.33 bushels of corn
Iowa's opportunity cost of producing 1 bushel of corn is
= [tex]\frac{1}{3}[/tex]
= 0.33 bushels of wheat
Nebraska the opportunity cost of producing 1 bushel of corn is
= 3 bushels of wheat
Nebraska has a comparative advantage in producing wheat and Iowa has a comparative advantage in producing corn.
If both countries start to produce the commodity they have a comparative advantage in producing, both will gain from trade.
Iowa can give up producing 20 million bushels of wheat and instead produce additional
= 20 × 3 = 60 million bushels of corn
Similarly, Nebraska can give up producing 20 million bushels of corn and instead produce additional
= 20 × 3 = 60 million bushels of wheat
So now Iowa can produce 180 million bushels of corn no wheat and Nebraska can produce 180 million bushels of wheat and no corn.
If they trade, Nebraska can trade 120 million bushels of wheat for 60 bushels of corn. With this trade, Nebraska will end up with 120 million bushels of corn and 60 million bushels of wheat and Iowa will end up with 60 million bushels of corn and 120 million bushels of wheat.
With trade, Nebraska can end up with 40 million bushels of wheat and 120 million bushels of corn while Iowa can end up with 40 million bushels of corn and 120 million bushels of wheat by specializing in the goods that have lower opportunity costs for each state and then trading with each other.
Explanation:Opportunity cost is the value of the next best alternative that is forgone when making a decision. In the scenario given, Iowa and Nebraska have different opportunity costs for producing corn and wheat. The opportunity cost of producing 1 bushel of wheat for Iowa is 3 bushels of corn, while for Nebraska, the opportunity cost of producing 1 bushel of corn is 3 bushels of wheat.
Given this information, with trade, both states can specialize in producing the good that has a lower opportunity cost for them and then trade with each other. Iowa should specialize in producing corn because its opportunity cost of corn is lower than that of Nebraska, and Nebraska should specialize in producing wheat because its opportunity cost of wheat is lower than that of Iowa.
Through trade, Iowa can swap some of its corn for Nebraska's wheat, and Nebraska can swap some of its wheat for Iowa's corn. This way, both states can end up with a larger quantity of the good they specialize in. So, Nebraska can end up with 40 million bushels of wheat and 120 million bushels of corn, and Iowa can end up with 40 million bushels of corn and 120 million bushels of wheat.
The trial balance for Swifty Corporation appears as follows:
Swifty Corporation
Trial Balance
December 31, 2017
Cash $250
Accounts Receivable 428
Prepaid Insurance 67
Supplies 148
Equipment 3280
Accumulated Depreciation, Equipment $490
Accounts Payable 315
Common Stock 980
Retained Earnings 1150
Service Revenue 2468
Salaries and Wages Expense 820
Rent Expense 410 0
$5403 $5403
If, on December 31, 2017, supplies on hand were $33, the adjusting entry would contain a:
Answer:
Explanation:
The adjusting entry for supplies is shown below:
Supplies expense A/c Dr $115
To supplies A/c $115
(Being adjusted entry recorded)
The trial balance show a supplies balance of $148 and the supplies on hand were $33, so the adjusted supply balance would be equal to
= Supplies balance - supplies on hand
= $148 - $33
= $115
On January 1, 2016, Jacob Inc. purchased a commercial truck for $48,000 and uses the straight-line depreciation method. The truck has a useful life of eight years and an estimated residual value of $8,000. On December 31, 2018, Jacob Inc. sold the truck for $30,000. What amount of gain or loss should Jacob Inc. record on December 31, 2018?
A.Loss, $3,000.
B.Loss, $18,000.
C.Gain, $22,000.
D.Gain, $5,000.
Answer:
D.Gain, $5,000.
Explanation:
Truck Value = $48,000
Annual depreciation = ( $48,000 - $8,000) / 8 = $40,000 / 8= $5,000
First year (2013) = $40,000 - $5,000 = $35,000
Second year (2014) = $35,000 - $5,000 = $30,000
Third year (2015)= $30,000 - $5,000 = $25,000
Gain = Sale Value - Truck Value (actual) = $30,000 - $25,000 = $5,000
Brick Co. has 170,000 shares of common stock outstanding at January 1, 2015. On May 1, 2015, it issued 30,000 additional shares of common stock. Outstanding all year were 12,000 shares of convertible cumulative preferred stock. Each share of the convertible preferred stock, which was dilutive in 2015, is convertible into one share of Brick’s common stock. What is the number of shares that Brick should use to calculate 2015 diluted earnings per share
Answer:
The number of shares that Brick should use to calculate 2015 diluted earnings per share are 202,000 shares
Explanation:
The computation of the number of shares are shown below:
= January 1 shares + may 1 shares + convertible cumulative preferred stock
= 170,000 shares × 4 months ÷ 12 months + 200,000 shares × 8 months ÷ 12 months + 12,000 shares
= $56666.67 + $133,333.33 + $12,000
= $202,000 shares
The 4 months are calculated from January 1 to May 1, 2015
And, the 8 months are calculated from May 1 to December 31
When thinking about a washing machine as a system, which of the following represents the inputs? Multiple Choice the dirty clothes, water, and detergent the clean clothes the wash and rinse cycle the light indicating that the washer is off balance and has stopped the buzzer indicating that the cycle is complete
Answer: The dirty clothes, water and detergent
Explanation: Inputs are the resources that are put into the system to attain a desired output, that may have a value to someone. The output is the final commodity that one get at the end of the system.
If we see washing machine as a system then the cleaned clothes are the output from that system. The resources that are used to get the clothes cleaned such as dirty clothes, water and detergent are the inputs.
Hence from the above we can conclude that the correct option is A.
Short-term financing transactions commonly occur in the:
A. primary markets.
B. secondary markets.
C. capital markets.
D. money markets
Answer:
The correct option is (D)
Explanation:
Short-term debt instruments are traded in money market that have maturity ranging from one day to one year. Some examples of money market instruments are certificate of deposits and treasury bills that have low risk and low returns.
Primary markets are where securities are traded for the first time. Buying and selling or already traded stock is done in secondary market. Capital markets deal with long-term securities. So, these options are incorrect.
Short-term financing is carried out in in money markets.
is the sole proprietor of Prestigious Pups, a business specializing in the sale of high-end pet gifts and accessories. Prestigious Pups' sales totaled $ 986 comma 000 during the most recent year. During the year, the company spent $ 58 comma 500 on expenses relating to website maintenance, $ 30 comma 500 on marketing, and $ 29 comma 100 on wrapping, boxing, and shipping the goods to customers. Prestigious Pups also spent $ 643 comma 000 on inventory purchases and an additional $ 19 comma 700 on freight-in charges. The company started the year with $ 16 comma 250 of inventory on hand and ended the year with $ 16 comma 800 of inventory. Prepare Prestigious Pups' income statement for the most recent year.
Answer:
Instructions are listed below
Explanation:
An income statement is one of the three important financial statements used for reporting a company's financial performance over a specific accounting period. The income statement focuses on the four key items - revenue, expenses, gains, and losses. It does not cover receipts (money received by the business) or the cash payments/disbursements (money paid by the business).
It follows the general structures:
Revenues (+)
Operating Revenue
Non-Operating Revenue
Total
Expenses (-)
Primary Activity Expenses
Secondary Activity Expenses
Total
Gains (+)
Losses (-)
Net income/loss
In this exercise:
sales totaled $ 986000
$58500 on expenses relating to website maintenance
$30500 on marketing
$29100 on wrapping, boxing, and shipping the goods to customers.
$643000 on inventory purchases
$19700 on freight-in charges.
started the year with $16250 inventory
ended the year with $ 16800 of inventory.
Revenues= 986000
Expenses (-)
Primary Activity Expenses:
Cost of goods sold= Initial inventory + purchase - ending inventory= $642450
wrapping, boxing, and shipping= $29100
Secondary Activity Expenses:
website maintenance=58500
marketing= $30500
freight-in charges= $19700
Total Expenses= $780250
Net income= $205750
Cash flows during the first year of operations for the Harman-Kardon Consulting Company were as follows: Cash collected from customers, $335,000; Cash paid for rent, $39,000; Cash paid to employees for services rendered during the year, $119,000; Cash paid for utilities, $49,000. In addition, you determine that customers owed the company $59,000 at the end of the year and no bad debts were anticipated. Also, the company owed the gas and electric company $1,900 at year-end, and the rent payment was for a two-year period. Calculate accrual net income for the year.
Answer:
The accrual net income for the year is $204,600
Explanation:
The computation of the accrual net income for the year is shown below:
Net income = Revenue - expenditure
where,
Revenue = Cash collected from customers + customers owed at the end of the year
And, the expenditure = Cash paid for rent + Cash paid to employees for services rendered during the year + Cash paid for utilities + gas and electric expenses
Now put these values to the above formula
So, the answer would be equal to
= Cash collected from customers + customers owed at the end of the year - Cash paid for rent - Cash paid to employees for services rendered during the year - Cash paid for utilities - gas and electric expenses
= $335,000 + $59,000 - $19,500 - $119,000 - $49,000 - $1,900
= $204,600
The rent payment is given for two years but we have to compute for the one year only
So, rent payment = $39,000 ÷ 2 = $19,500
Accounts Amounts Cash received from sale of products to customers $ 31,000 Cash received from the bank for long-term loan 36,000 Cash paid to purchase factory equipment (41,000 ) Cash paid to merchandise suppliers (10,200 ) Cash received from the sale of an unused warehouse 11,200 Cash paid to workers (22,200 ) Cash paid for advertisement (2,200 ) Cash received for sale of services to customers 21,000 Cash paid for dividends to stockholders (4,200 ) Assume the balance of cash at the beginning of the period is $3,200. Required: 1. Calculate the ending balance of cash.
Answer:
Ending cash balance : 22,600
Explanation:
operating activities:
collection from products 31,000
collection from services 21,000
merchandise suppliers (10,200)
wages paid (22,200)
advertisement paid (2,200)
generated from operating activities 17,400
financing activities:
loan from the bank 36,000
dividends paid (4,200)
cash generated from financing activities 31,800
investing activities:
sale of warehouse 11,200
purchase of equipment (41,000)
cash used in investing activities (29,800)
cash generated for the period 19,400
beginning cash balance 3,200
Ending cash balance 22,600
Taco Hut purchased equipment on May 1, 2018, for $15,000. Residual value at the end of an estimated 8-year service life is expected to be $4,000.
Calculate depreciation expense using the straight-line method for 2018 and 2019, assuming a December 31 year-end. (Do not round your intermediate calculations. Round your final answers to the nearest whole dollar.)
Answer:
2018: 8 months
Depreciation= $916,67
2019: full year
Depreciation= $1375
Explanation:
Giving the following information:
Taco Hut purchased equipment on May 1, 2018.
Price: $15,000.
Residual value: $4,000
Useful life: 8 year
We need to calculate the depreciation for 2018 and 2019 using straight-line method:
Depreciation= (purchase price- residual value)/useful life
Depreciation= (15000-4000)/8= $1375
2018: 8 months
Depreciation=(1375/12)*8= 916,67
2019: full year
Depreciation= $1375
Each of the following statements describes how the political and legal environment encourages productivity EXCEPT: A. Well-defined property rights encourage production and saving.
B. Political stability promotes economic growth.
C. Price changes in markets provide suppliers incentives to supply goods to markets.
D. Pay rates determined by a governmental planning agency provide workers with the incentive to work hard.
The statement 'D. Pay rates determined by a governmental planning agency provide workers with the incentive to work hard' does not necessarily relate to how the political and legal environment enhances productivity, as it implies government control over pay rates, unlike the others which encourage productive activities.
Explanation:Each statement here refers to how the political and legal environment can enhance productivity, with one exception: D. Pay rates determined by a governmental planning agency provide workers with the incentive to work hard. This is the exception because it implies government control over pay rates, which may not necessarily promote productivity. In contrast, factors like well-defined property rights, political stability, and price changes in markets typically encourage productivity by establishing a conducive environment for economic activities. For instance, well-defined property rights give individuals the confidence to invest in their property, knowing it is safe from arbitrary seizure. Political stability gives businesses a stable environment to operate, whilst varying prices respond to supply and demand, thereby encouraging suppliers.
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The exception to how a political and legal environment fosters productivity is when pay rates are determined by a governmental planning agency.This pivotal role doesn’t always offer the necessary incentives to drive the employees working in an economy to increase productivity.
Explanation:The statement that does not describe how the political and legal environment encourages productivity is (D) Pay rates determined by a governmental planning agency provide workers with the incentive to work hard. This is because centrally planned economies, where pay rates are set by a governmental planning agency, often provide less incentive for workers to increase productivity. Workers know they will receive the same pay regardless of how much effort they put into their work, potentially discouraging them from working hard. While the government can provide motivation for work through other means, the statement as is does not encourage an increase in productivity, unlike A, B, and C which all promote economic efficiency and growth.
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Cash flows during the first year of operations for the Harman-Kardon Consulting Company were as follows: Cash collected from customers, $375,000; Cash paid for rent, $47,000; Cash paid to employees for services rendered during the year, $127,000; Cash paid for utilities, $57,000. In addition, you determine that customers owed the company $67,000 at the end of the year and no bad debts were anticipated. Also, the company owed the gas and electric company $2,700 at year-end, and the rent payment was for a two-year period. Calculate accrual net income for the year.
Answer:
Net Income for the year 234.500
Explanation:
Income Cash collected 375.000
Income Customer Owed 67.000
Total Income 442.000
Expenses Employees 127.000
Utilities 57.000
Rent 23.500 The effect on results of for 1 year was paid for 2 years in advance.
Total Expenses 207.500
Net Income 234.500
The Work in Process Inventory account of a manufacturing company that uses an overhead rate based on direct labor cost has a $12,960 debit balance after all posting is completed. The cost sheet of the one job still in process shows direct material cost of $4,000 and direct labor cost of $2,800. Therefore, the company's overhead application rate is:
Final answer:
The overhead application rate for the manufacturing company can be calculated as approximately $3.20 per dollar of direct labor cost.
Explanation:
The overhead application rate is calculated by dividing the total estimated overhead costs by the total estimated direct labor cost. In this case, the Work in Process Inventory account has a debit balance of $12,960. The cost sheet for the job still in progress shows direct material cost of $4,000 and direct labor cost of $2,800.
To calculate the overhead application rate:
Overhead Application Rate = Total Estimated Overhead Costs / Total Estimated Direct Labor Cost
Since the Work in Process Inventory account has a debit balance, we can assume it includes both direct material and direct labor costs. Therefore, we can calculate the total estimated direct labor cost for the job still in process:
Total Estimated Direct Labor Cost = Debit Balance of Work in Process Inventory Account - Direct Material Cost
Substituting the values into the formula, we have:
Overhead Application Rate = $12,960 - $4,000 / $2,800
Simplifying, we get:
Overhead Application Rate = $8,960 / $2,800
Therefore, the company's overhead application rate is approximately $3.20 per dollar of direct labor cost.
Folsom Fashions sells a line of women's dresses. Folsom's performance report for November Year 1 follows.Actual : Dresses Sold: 5000, Sales 235,000, variable cost is 145,000 contribution margin is 90,000, fix cost is 84,000 and operating income is 6,000Budget: Dresses Sold: 6000, Sales 300,000, variable costs: 180000, contribution margin is 120,000, fixed costs is 80000, and operating income is 40,000The company uses a flexible budget to analyze its performance and to measure the effect on operating income of the various factors affecting the difference between budgeted and actual operating income.The variable cost flexible budget variance for November is:(A) $4,000 unfavorable.(B) $5,000 favorable.(C) $5,000 unfavorable.(D) $4,000 favorable.
Answer:
(B) $5,000 favorable.
Explanation:
Variable cost flexible budget variance:
budget for 6,000 units total variable cost: $180,000
We divide the total cost by the activity in that budget:
$180,000/ 6,000 = 30
Now we multiply by the actual volume:
5,000 x 30 = 150,000
Now we do flexible budget - actual cost = variance
150,000 - 145,000 = 5,000 favorable
It is favorable, as the cost where less than expected.
Here is financial information for Marin Inc. December 31, 2017 December 31, 2016 Current assets $110,400 $ 94,600 Plant assets (net) 404,600 354,400 Current liabilities 103,600 69,400 Long-term liabilities 126,400 94,600 Common stock, $1 par 134,400 119,400 Retained earnings 150,600 165,600 Prepare a schedule showing a horizontal analysis for 2017, using 2016 as the base year. (If amount and percentage are a decrease show the numbers as negative, e.g. -55,000, -20% or (55,000), (20%). Round percentages to 1 decimal place, e.g. 12.1%.)
Answer:
2,016 2,017 2017 as 2016 base
Current Assets 94,600 110,400 increase 17%
Plant Assets 354,400 404,600 increase 14%
Total Assets 449,000 515,000 increase 15%
Current Laibilities 69,400 103,600 increase 49%
Long-Term Liab 94,600 126,400 increase 34%
Common Stock 119,400 134,400 increase 13%
Retained Earnings 165,600 150,600 decrease -9%
Total L+SE 449,000 515,000 increase 15%
Explanation:
We will compare new year with the previous year, as percent.
(2017-2016)/2016
This will gives the variance per year
Consider a market where: Consumer surplus is 250 Producer surplus is 125. If both consumer surplus and producer surplus are maximized, what is the amount of the deadweight loss? 0 0. (round your answer to the nearest penny) Next, suppose that consumer surplus falls to 180, but producer surplus rises to 155. What is the change in welfare? -35225 negative 25 (round your answer to the nearest penny and add the minus sign if necessary).
Answer:
A. Deadweight loss = 125 units.
B. Deadweight loss = 25 units.
Explanation:
In a free market and completely efficient economy, the consumer surplus equals the producer surplus. Both benefits of free trade. When consumers o producers have a minor surplus, necessarily implies a loss on eficiency, usually caused by government regulations like taxes or price ceilings.
The amount of welfare lost is measure by the difference between consumer and producer surplus.
In the first case:
|Consumer surplus - producer surplus| = 25 units
|250- 125| = 125 units
And in the second case:
|180- 155| = 25 units
When both consumer surplus and producer surplus are maximized, there is no deadweight loss. The change in welfare is calculated as the difference between the initial and the final total surplus.
Explanation:When both consumer surplus and producer surplus are maximized, there is no deadweight loss. Deadweight loss occurs when the economy produces at an inefficient quantity and results in a reduction in total surplus. In the given scenario, since both consumer surplus and producer surplus are maximized, there is no deadweight loss, so the amount of deadweight loss is 0.
When consumer surplus falls to 180 and producer surplus rises to 155, we can calculate the change in welfare. The change in welfare is the difference between the initial total surplus and the final total surplus. Initial total surplus = Consumer surplus + Producer surplus = 250 + 125 = 375. Final total surplus = Consumer surplus + Producer surplus = 180 + 155 = 335. The change in welfare is the difference between the initial and final total surplus: 375 - 335 = 40.
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