Answer: Option (D) is correct.
Explanation:
Given that,
Ron's capital = $80,000
Stella's = $75,000
Tiffany's = $50,000
Income sharing ratio = 3:2:1
Tiffany is retiring from the partnership
Amount paid to Tiffany = $56,000
Bonus = Amount paid to Tiffany - Tiffany's capital
= $56,000 - $50,000
= $6,000
Above bonus is 1/6th of goodwill.
Therefore, the total amount of goodwill recorded would be:
Goodwill = [tex]\frac{6,000}{\frac{1}{6} }[/tex]
= $36,000
In using the net present value method, only projects with a zero or positive net present value are acceptable because:
a. the return from these projects equals or exceeds the cost of capital
b. a positive net present value on a particular project guarantees company profitability
c. the company will be able to pay the necessary payments on any loans secured to finance the project
d. Both a and b are correc
Answer:
Option A
Explanation:
When you use a net present value method you are discounting the estimated cash flows of your project applying an interest rate that is related to your cost of capital. So, if your projects discounted cash flows are greater than zero it means that your project profitability is greater than your alterative project.
Projects with a zero or positive net present value are acceptable because the return from these projects equals or exceeds the cost of capital
Net present value is the present value of after-tax cash flows from an investment less the amount invested.
Net present value is a capital budgeting method.
Capital budgeting methods are used to determine the profitability of a project that is about to be undertaken
Only projects with a positive Net Present Value should be accepted. A project with a negative Net Present Value should not be chosen because it isn't profitable. When choosing between positive Net Present Value projects, choose the project with the highest Net Present Value first because it is the most profitable.
Projects with zero Net Present Value, earn just what it costs to undertake the project
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A manager checked production records and found that a worker produced 185 units while working 50 hours. In the previous week, the same worker produced 116 units while working 40 hours. Compute Current period productivity and Previous period productivity. (Round your answers to 2 decimal places.)
Answer:
Current Period Productivity= 3.7units/hour
Previous Period Productivity= 2.9units/hour
Explanation:
Giving the following information:
Worker produced 185 units while working 50 hours.
In the previous week, the same worker produced 116 units while working 40 hours.
We will compute productivity based on units per hour.
Worker productivity= Total units/total hours
Current Period Productivity= 185/50= 3.7units/hour
Previous Period Productivity= 116/40= 2.9units/hour
Veronica had been getting red patches on her face after using a protein-based lotion manufactured by Nature Life Research Lab. On consulting a dermatologist, she learned that the lotion's steroid levels were beyond the standard levels permitted by the government and the damage caused by the lotion was irreversible. Which of the following will address Veronica's grievances? A. Laws related to property rights B . Product liability laws C. Intellectual property laws D. Foreign Corrupt Practices Act E. Sarbanes-Oxley Act
Answer: Product liability laws
Explanation: It is the branch of law that deals with the suppliers or distributors of products that causes injuries to the customers that consumed them. As per these laws the responsibility in case of defect lies with the sellers in the distribution channel.
In the given case, Veronica, has been getting red patches on her faces after using a defective product.
Hence, from the above we can conclude that the correct option is B.
The following account balances were drawn from the financial records of Kent Company (KC) as of January 1, 2018: Assets, $35,000; Liabilities, $6,000; Common Stock, $12,000; and Retained Earnings, $17,000. KC has agreed to pay the creditors $400 of interest per year. Further, KC agrees that for the 2018 fiscal year any annual earnings remaining after the interest charges will be paid out as dividends to the owners. Required Assuming KC earns a before interest expense recognition profit of $1,600 during 2018, determine the amount of interest and dividends paid. Assuming KC earns a before interest expense recognition profit of $900 during 2018, determine the amount of interest and dividends paid. Assuming KC earns a before interest expense recognition profit of $300 during 2018, determine the amount of interest and dividends paid.
Answer:
Earnings = $1,600, Interest = $400, Dividend = $1,200
Earnings = $900, Interest = $400, Dividend = $500
Earnings = $300, Interest = $400, Dividend = $0
Explanation:
As not provided, taxes are ignored.
Provided interest to be paid to creditors = $400
Case 1
Earnings before interest and taxes = $1,600
Less: Interest = $400
Earnings after interest = $1,200
Dividend to shareholders = $1,200
Case 2
Earnings before interest and taxes = $900
Less: Interest = $400
Earnings after interest and taxes = $500
Dividend to shareholders = $500
Case 3
Earnings before interest and taxes = $300
Less: Interest = $300
Earnings after interest = - $100
Since the earnings are negative, as company is facing losses, no dividend will be distributed.
Kent Company (KC) pays a fixed annual interest of $400. For 2018, KC would pay $1,200, $500, and $0 in dividends for profits of $1,600, $900, and $300, respectively, after paying the interest.
Explanation:To determine the amount of interest and dividends paid by Kent Company (KC) in the three given scenarios, we first acknowledge that the interest paid is a fixed amount of $400 per year. After paying interest, the remaining profit (if any) is distributed as dividends.
If KC earns a profit of $1,600 before interest in 2018, the interest paid is $400, leaving $1,200 for dividends.For a profit of $900, after paying $400 as interest, KC has $500 available to pay as dividends.With a profit of $300, the entire profit after paying interest is insufficient to cover the interest payment, leaving no earnings to be distributed as dividends.Therefore, the amount of dividends varies based on the profit earned, whereas the interest payment remains constant.
The Allowance for Bad Debts account has a debit balance of $ 9 comma 000$9,000 before the adjusting entry for bad debts expense. After analyzing the accounts in the accounts receivable subsidiary ledger, the company's management estimates that uncollectible accounts will be $ 12 comma 000$12,000. What will be the amount of the adjustment in the Allowance for Bad Debts account?
Answer:
the amount of the adjustment in the Allowance for
Bad Debts account $3.000
Explanation:
Initial Balance
Allowance for Uncollectible Accounts $ 9.000
END Balance
Allowance for Uncollectible Accounts $ 12.000
The adjustment entry in the accountig will be
Bad debt expense $ 3.000
Allowance for Uncollectible Accounts $ 3.000
Eaton Tool Company has fixed costs of $210,600, sells its units for $58, and has variable costs of $32 per unit. a. Compute the break-even point. b. Ms. Eaton comes up with a new plan to cut fixed costs to $160,000. However, more labor will now be required, which will increase variable costs per unit to $35. The sales price will remain at $58. What is the new break-even point?
Answer:
A)Break-even point= 8100 units
B) Break-even point= 6957 units
Explanation:
Giving the following information:
Fixed costs of $210,600
Price per unit= $58
Variable costs of $32 per unit.
A)Break-even point= fixed costs/contribution margin= 210600/(58-32)= 8100 units
B) Fixed cost= 160000
Unitary variable cost= $35
Break-even point= 160000/(58-35)= 6957 units
At the beginning of Year 1, a company reported a balance in common stock of $154,000 and a balance in retained earnings of $54,000. During the year, the company issued additional shares of stock for $44,000, earned net income of $34,000, and paid dividends of $10,400. In addition, the company reported balances for the following assets and liabilities on December 31. Assets Liabilities Cash $ 53,000 Accounts payable $ 8,600 Supplies 11,300 Utilities payable 3,200 Prepaid rent 26,000 Salaries payable 3,900 Land 220,000 Notes payable 19,000 Required: Prepare a statement of stockholders’ equity. Prepare a balance sheet.
Answer:
statement of stockholders' equity
for the year 1
Common Stock Retained Earings Total
Balance Jan 1 154,000 54,000 208,000
Net Earnings 34,000 34,000
Dividends -10,400 -10,400
Stock issued 44,000 44,000
Balance, Dec 31 198,000 77,600 275,600
Assets Liability
Cash 53,000 Account Payable 8,600
Supplies 11,300 Utilities Payable 3,200
Prepaid Rent 26,000 Salaries Payable 3,900
Land 220,000 Note payable 19,000
Common Stock 198,000
Retained Earnings 77,600
Total Assets 310,300 Total Liab + SE 310,300
Explanation:
For the stockholder statment, we simply post the values of the first part.
Then for the balance sheet: We will work with the numbers given in the the second part.
The payable are the liabilities, the rest are assets.
Finally, we transfer the stock value from the Stockholders statemnet
and check the total for each column
For Eckstein Company, the predetermined overhead rate is 136% of direct labor cost. During the month, Eckstein incurred $102,000 of factory labor costs, of which $85,300 is direct labor and $16,700 is indirect labor. Actual overhead incurred was $121,008. Collapse question part (a1) Compute the amount of manufacturing overhead applied during the month. Manufacturing overhead applied $
Answer:
Allocated overhead applied= $116008
Explanation:
Giving the following information:
The predetermined overhead rate is 136% of direct labor cost.
During the month, Eckstein incurred $102,000 of factory labor costs.
$85,300 is direct labor and $16,700 is indirect labor.
The actual overhead incurred was $121,008.
We need to determine the allocated overhead applied:
allocated overhead applied= overhead rate*direct labor
allocated overhead applied= 1.36*85300= $116008
Answer:
Allocated overhead applied= $116008
Explanation:
Giving the following information:
The predetermined overhead rate is 136% of direct labor cost.
During the month, Eckstein incurred $102,000 of factory labor costs.
$85,300 is direct labor and $16,700 is indirect labor.
The actual overhead incurred was $121,008.
We need to determine the allocated overhead applied:
allocated overhead applied= overhead rate*direct labor
allocated overhead applied= 1.36*85300= $116008
My existing business generate $135000 in EBIT. The corporate tax rate applicable to my business is 35%. Deprecaition reported in the financial statement is $25714. I don't need to spend any more for new equipment; however, I need $20250 additiona cash. I need to purchase $10800 in additional supplies such tableclothes and napkins on credit. It is also estimated that my accrual including taxes and wage payable will increase by $6750. Based on the information provided what will be my Free Cash Flow (FCF)?
Answer: $99,964
Explanation:
Given that,
EBIT = $135,000
Corporate tax rate = 35% of $135,000 = $47,250
Depreciation = $25,714
Need additional cash = $20,250
Additional supplies = $10,800
Accrual including taxes and wage payable will increase by $6,750
Operating cash flow = EBIT - Taxes + Depreciation
= $135,000 - $47,250 + $25,714
= $113,464
Investment in operating capital = Additional capital expenditure + Increase in NWC( net working capital)
= $0 + [($20,250 + $10,800) - ($10,800 + $6750)
= $13,500
Free Cash Flow (FCF) = Operating cash flow - Investment in operating capital
= $113,464 - $13,500
= $99,964
You won a lottery and you have two options for receiving the money. You can receive a lump sum of $50,000 today or receive future payments of $8,000 every year for ten years (first payment will start in one year). The discount rate is 7%. Which option should you take and why?
Answer:
If there is no pressure for taking the money today the second option is a better deal: 56,188.65 to 50,000
Explanation:
We will check if the present value of the 10 years annuity of 8,000 discounted at 7% is better than 50,000 today:
[tex]C \times \frac{1-(1+r)^{-time} }{rate} = PV\\[/tex]
C 8,000 dollars
time 10 years
rate 7% = 7/100 = 0.07
[tex]8000 \times \frac{1-(1+0.07)^{-10} }{0.07} = PV\\[/tex]
PV $56,188.6523
Baker Fine Foods has beginning inventory for the year of $15,000. During the year, Baker purchases inventory for $130,000 and ends the year with $27,000 of inventory. Baker will report cost of goods sold equal to:
$118,000.
$130,000.
$157,000.
$142,000.
Answer:
COGS = 118,000
Explanation:
From the inventory identity we will solve for COGS
[tex]$$Beginning Inventory + Purchase = Ending Inventory + COGS[/tex]
the right side is the origin of the goods, are either purchased or come from prior period
the left side, is the destination, the use of the goods, it could either be sold or is still in stocks.
Now, to sovle, we plug our values and clear for COGS
15,000 + 130,000 = 27,000 + COGS
COGS = 15,000 + 130,000 - 27,000
COGS = 118,000
Which of the following is true of resources? A. Their availability is unlimited. B. They are inputs used to produce goods and services. C. When resource availability is increased, scarcity is eliminated. D. Both b and c.
Answer: D. Both b and c
Explanation: Resources are a set of elements available to solve a need, they are usually used as raw material to supply companies, however their availability may be limited, so there may be a shortage that is the lack of something in the market, given this situation should be increased the amount available for production to be continued.
Mattel Inc.'s2016 financial statements show operating profit before interest and tax of $519,233 thousand, net income of $318,022 thousand, provision for income taxes of $91,720 thousand and net nonoperating expense before tax of $109,491 thousand. Assume Mattel’s statutory tax rate for 2016 is 37%. Mattel's 2016 effective tax rate is: Select one: A. 22.4% B. 37.0% C. 19.4% D. 17.7% E. None of the above
Answer:
A. 22.4%
Explanation:
Income TAXES
Operating profit before interest and tax $ 519.233
Net nonoperating expense before tax -$ 109.491
Subtotal $ 409.742
Provision for income taxes -$ 91.720 -22,4%
Net Income $ 318.022
A corn futures contract closed yesterday at a price of $2.40 a bushel. The maximum daily price range is $0.40 and the daily price limit is $0.20. Therefore, the: Question 1 options: a) highest closing price for today is $2.80 a bushel. b) most the price can fluctuate today is $0.20 a bushel. c) minimum change in the price today is $0.20 a bushel. d) lowest closing price for today is $2.20 a bushel.
Answer:
D -lowest closing price for today is $2.20 a bushel.
Explanation:
Range refers to the difference between the highest and lowest value of any variable for a given time period. The daily price limit refers to the maximum increase in price or the price decline that is allowed for a futures contract in one given trading session relative to the previous day's settlement price.
With this in mind, the right option is
D -lowest closing price for today is $2.20 a bushel.
This is worked out as $2.40 - $0.20 = $2.20
Donna Bader spent her final year at college studying the effect of various economic factors on the economy of developing nations. Based on the results of her study, she concluded that globalization does these countries more harm than good. Which of the following statements, if true, strengthens Donna's argument? People in low-wage nations have a high mortality rate and no access to healthcare facilities. Because of the increase in employment opportunities, workers from developing countries flock to developed countries. Low-wage nations tend to have poorly developed transport and communication systems. Many companies take advantage of lenient labor laws by setting up facilities in low-income countries.
Answer:
Many companies take advantage of lenient labor laws by setting up facilities in low-income countries.
Explanation:
Globalization is an economic and political phenomenon that has transformed the relations of production and labor. The companies started to produce in countries where the labor is cheaper, becoming consequently more competitive.For the development of firms and the evolution of capitalism globalization is a very positive phenomenon. However, globalization has some deleterious effects. Some multinational companies take advantage of flaws in the labor laws of underdeveloped countries to exploit the labor of the people of those countries. With low wages and poor social security, people in these countries consume less, get sicker and have less access to goods and services. This hinders human development and hence the productivity and economy of these countries.
Taser Industries must decide whether to make or buy some of its components. The costs of producing 175,000 battery packs for its product are as follows: Direct Materials $15,000 Direct Labor $5,000 Variable overhead $6,000 Fixed overhead $9,000 The company has an opportunity to purchase the battery packs for $0.18 per unit, which would eliminate all variable costs, and $2,000 of fixed costs. Based on your analysis, what is the net income increase or decrease if the company purchases the battery packs
Answer:
It is cheaper to produce in-house. Cost savings= $3500
Explanation:
We need to find whether it is better to produce in-house or to purchase to a supplier.
Q= 175000
Produce in house:
Direct Materials $15,000
Direct Labor $5,000
Variable overhead $6,000
Fixed overhead $9,000
Total cost= $35000
Outsource:
Purchase Cost= 175000q*$0.18= $31500
Fixed Cost= (9000-2000)= $7000
Total cost=$38500
It is cheaper to produce in-house. Cost savings= $3500
If goods are not rationed according to price, if follows that they won't get rationed at all. some non-price rationing device will be used to ration the goods. first-come-first-served will necessarily be the rationing device used in the market. there will be surpluses in the market. g
Answer:
Some non-price rationing device will be used to ration the goods.
Explanation:
Rationing refers to the controlled distribution of a good or service, particularly one that is scarce. When the supply of a particular good or service is below the quantity demanded, this usually means that the price of the product rises, and price acts as a rationing device. However, if goods are not rationed according to price, then it follows that some non-price rationing device will be used instead to ration the goods.
S&L Financial buys and sells securities that it typically classifies as available-for-sale. On December 27, 2018, S&L purchased Coca-Cola bonds at par for $715,000 and sold the bonds on January 3, 2019, for $717,500. At December 31, the bonds had a fair value of $713,500. When it purchased the Coca-Cola bonds, S&L Financial decided to elect the fair value option for this investment. What pretax amounts did S&L include in its 2018 and 2019 net income as a result of this investment (ignoring interest)?
Answer:
2018 loss for 1,500
2019 gain for 4,000
Explanation:
purchase at 715,000
December 31th 713,500
adjusting entry december 31th
loss on investment 1,500 debit
marketable securities 1,500 credit
january 3rd, 2019
cash 717,500 debit
gain on investemnt 4,000 credit
martetable securities 713,500 credit
to record gain on investment
Answer the following questions using the information below: Berman's Camera Shop has prepared the following flexible budget for September and is in the process of interpreting the variances. F denotes a favorable variance and U denotes an unfavorable variance. Flexible Variances Budget Price Efficiency Material A $40,000 $1,000F $3,000U Material B 60,000 500U 1,500F Direct labor 80,000 500U 2,500F The most likely explanation of the above variances for Material A is that:
Answer:
The variances for Materials A can indicate that the business purchases a lower quality materials, therefore cheaper.
Explanation:
The variances for Materials A can indicate that the business purchases a lower quality materials, therefore cheaper.
Which produce a favorable price variance because, this lower quality had a lower price per unit of material.
This lower quality makes the manufacturing process use more materials, generating an unfavorable quantity variance as, the the standard materials would use less quantity.
Final answer:
The favorable price variance indicates a lower purchasing cost for Material A, while the unfavorable efficiency variance suggests inefficient use of the material in production.
Explanation:
The most likely explanation for the variances for Material A at Berman's Camera Shop, where there is a $1,000 favorable price variance but a $3,000 unfavorable efficiency variance, is that the purchasing department secured a lower price than expected for Material A, which resulted in a favorable price variance. However, more of Material A was used than planned in the production process, leading to an unfavorable efficiency variance. This suggests that the materials may have been used inefficiently or that there was waste during the production process.
The following standards have been established for a raw material used to make product O84: Standard quantity of the material per unit of output 8.9 meters Standard price of the material $ 19.00 per meter The following data pertain to a recent month's operations: Actual material purchased 5,300 meters Actual cost of material purchased $ 104,520 Actual material used in production 5,100 meters Actual output 680 units of product O84 The direct materials purchases variance is computed when the materials are purchased. What is the materials price variance for the month
Answer:
Purchase price variance=(19,72-19)*596=$429,12
Explanation:
The direct material variance is the difference between the standard cost of materials resulting from production activities and the actual costs incurred. The direct material variance is comprised of two other variances, which are:
- Purchase price variance
- Material yield variance
Purchase price variance: This is the difference between the standard and actual cost per unit of the direct materials purchased, multiplied by the standard number of units expected to be used in the production process. This variance is the responsibility of the purchasing department.
Purchase price variance=(actual price - standard price)*standard units
In this exercise:
Standard price= $19 meter
Standard units=5300/8,9=596 units
Actual price=104520/5300= $19,72
Purchase price variance=(19,72-19)*596=$429,12
Kangaroo Autos is offering free credit on a new $10,000 car. You pay $1,000 down and then $300 a month for the next 30 months. Turtle Motors next door does not offer free credit but will give you $1,000 off the list price. a. If the rate of interest is 0.83% a month, calculate the present value of the payments to Kangaroo Autos.
Answer:
8,938.0168
Explanation:
Kangaroo Autos is offering free credit on a new $10,000 car. You pay $1,000 down and then $300 a month for the next 30 months. Turtle Motors next door does not offer free credit but will give you $1,000 off the list price. If the rate of interest is 0.83% a month, the present value of the payments to Kangaroo Autos is 8,938.0168.
The present value of the payments to Kangaroo Autos is approximately $8,333.63.
To calculate the present value of the payments to Kangaroo Autos, we can use the formula for the present value of an annuity:
[tex]PV=\frac{PMT×(1−(1+r) −n )}{r}[/tex]
Where:
PMT = Payment per period ($300)
r = Interest rate per period (0.83% or 0.0083)
n = Number of periods (30 months)
Plugging in these values:
[tex]PV= \frac{300×(1−(1+0.0083) −30 ) }{0.0083} ≈$8,333.63[/tex]
The present value of the payments to Kangaroo Autos is approximately $8,333.63. This is the equivalent lump sum that would need to be invested now to cover the series of future payments at an interest rate of 0.83% per month.
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Brushy Mountain Mining Company's coal reserves are being depleted, so its sales are falling. Also, environmental costs increase each year, so its costs are rising. As a result, the company's earnings and dividends are declining at the constant rate of 10% per year. If D0 = $2 and rs = 13%, what is the estimated value of Brushy Mountain's stock? Do not round intermediate calculations. Round your answer to the nearest cent.
Answer:
The estimated value of Brushy Mountain's stock is $41.40
Explanation:
For computing the estimated value of stock, we need to apply the formula which is shown below:
= (D0 × (1 +g) ) ÷ (rs - g)
where,
The D0 would be a 0 year dividend
g = earning and dividend rate
rs = required rate of return
Now put these values to the above formula
So, the answer would be equal to
= $2 × (1 - 0.10) ÷ {13% - (- 10%)}
= $2 × 0.90 ÷ 23%
= $2 × 20.7
= $41.40
Since in the question, the growth rate is declining so we add the minus sign before writing the earning and the dividend rate.
Which of the following is an example of lose-lose negotiation? a) Buying a car from a second-hand car dealership at the asking price b) Taking time off from a project to help another team c) Disagreeing with a project idea while not providing an alternative d) Agreeing to share resources for the benefit of all involved in a project e) Discussing a problem with all parties concerned and finding a middle ground
Answer:
c) Disagreeing with a project idea while not providing an alternative
Explanation:
Lose - lose negotiation is a term used to describe a negotiation in which both parties cannot agree to a common negotiation, and then it further leads to failure of a contract on both ends, as both do not agree.
In case both parties agree to a negotiation it is termed as win - win negotiation, in which the contract survives, with a positive outlook.
Now, if any party disagree to any component of a project with no alternative, there will be a lose - lose negotiation.
A lose-lose negotiation is one where all parties come out worse off or fail to achieve their objectives. In this case, the lose-lose example is disagreeing with a project idea without providing any alternative solution, which hinders progress and leaves all involved parties without a satisfactory outcome.
Explanation:An example of a lose-lose negotiation would be c) Disagreeing with a project idea while not providing an alternative. In this scenario, neither party stands to benefit or achieve a satisfactory outcome. If a group member opposes an idea and fails to propose a constructive alternative, no progress is made, and the project may suffer as a result. It stands in contrast to win-win negotiations, where all parties involved can benefit, or to scenarios involving compromise or logrolling, where concessions are made but all parties can still get some of what they want.
In the given context of group problem solving, effective decision-making and negotiation strategies are critical to moving a project forward and ensuring that group goals are met. When individuals are unwilling to budge on their positions or interests, especially without offering viable alternatives, it can lead to a stalemate, where the status quo prevails, potentially leaving all parties dissatisfied, which is reflective of a lose-lose outcome.
Garden Variety Flower Shop uses 670 clay pots a month. The pots are purchased at $2.40 each. Annual carrying costs per pot are estimated to be 10 percent of cost, and ordering costs are $10 per order. The manager has been using an order size of 2,000 flower pots. a.What additional annual cost is the shop incurring by staying with this order size?
Answer:
The additional cost that Garden Variety Flower Shop is incurring in is Inventory.
Explanation:
Giving the following information:
Garden Variety Flower Shop uses 670 clay pots a month.
The pots are purchased at $2.40 each.
Annual carrying costs per pot = 10 percent of the cost.
Ordering costs are $10 per order.
The manager has been using an order size of 2,000 flower pots.
The additional cost that Garden Variety Flower Shop is incurring in is Inventory. Inventory cost includes the costs to hold inventory, as well as to administer the related paperwork. This cost is examined by management as part of its evaluation of how much inventory to keep on hand. This can result in changes in the order fulfillment rate for customers, as well as variations in the production process flow.
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With the advent of inexpensive accounting programs (like QuickBooks) how have our jobs, which respect to manually inputting information, in accounting been made easier in terms of: (1) journalizing (2) posting (3) Unadjusted and Adjusted Trial Balance (4) Financial Statement (income, balance sheet, state of cash flows, etc.)?
Answer:
1. Journal entries are quicker and more comfortable in the manual accounting
2. Posting is easier in computer software-based accounting
3. Trial balance adjustment in manual accounting is tricky. However, a lengthy process may pose a challenge for computerized accounting.
4. Financial statements are more straightforward in software-based accounting than manual accounting
Explanation:
The introduction of accounting software such as QuickBooks has transformed the working for accounting professionals. The conventional accounting system replacement has made the job more comfortable. However, there are new challenges added, such as learning the software, making error-free inputs, and pace of computer-related entries. However, considering that once these skills are learned, the overall job is easier than before.
1. Journal entries in manual are made quicker, and errors can be rectified. However, entries are linked automatically to their respective ledgers that solve the challenges with compound entries
2. Posting is simpler in software as the general ledger is created on a single click. Manual posting requires time and efforts
3. Adjusted entries need to manual input in conventional method to create the adjusted trial balance whereas, in software, its added through adjusting journal entries.
4. Financial statements are much more straightforward in software as they are available on one click, whereas in manual accounting, they are required to be calculated.
Taco Casa is considering installing touch screen terminals for patrons to place their food orders. They discovered that installation costs at stores with four screens were $60,000 but were $80,000 at stores with six terminals. What are the marginal costs of installing another terminal at a location?
Answer:
The marginal cost of each screen is $10,000.
Explanation:
Giving the following information:
They discovered that installation costs at stores with four screens were $60,000 but were $80,000 at stores with six terminals.
The marginal cost of each screen is $10,000. And the fixed costs are $20,000.
Six screens= 20000 + 10000*6= $80,000
Bike Atlanta currently produces 1,000 axles per month. The following per unit data apply for sales to regular customers: Direct materials $30 Direct manufacturing labor 5 Variable manufacturing overhead 10 Fixed manufacturing overhead 40 Total manufacturing costs $85 The plant has capacity for 3,000 axles and is considering expanding production to 3,000 axles. What is the total cost of producing 3,000 axles?
Answer:
The total cost of producing 3,000 axles is $255,000
Explanation:
The computation of the total cost is shown below:
= Total per unit manufacturing costs × total number of axles produced
= $85 × 3,000 axles
= $255,000
The total manufacturing includes all costs such as Direct materials, direct manufacturing labor, Variable manufacturing overhead and, Fixed manufacturing overhead.
Serena Corporation uses estimated manufacturing overhead costs of $880,600 and estimated direct labor hours of 200,000 in establishing manufacturing overhead rates. Allocated manufacturing overhead was $1,012,100 and actual manufacturing overhead was $970,500. What were the number of actual direct hours worked? (Round intermediary calculations to the nearest cent and the final answer to the nearest dollar.)
Answer:
the actual hours were 229,866
Explanation:
[tex]\frac{Cost\: Of \:Manufacturing \:Overhead}{Cost \:Driver}= Overhead \:Rate[/tex]
the predetermined overhead rate will be the quotient between the expected overhead and the expected value of the cost driver.
880,600 / 200,000 = 4.403
If we allocated 1,012,100
then actual hours x 4.403 = 1,012,100
actual hours = 1,012,100 / 4.403 = 229.866,000
the actual hours were 229,866
Answer:
The number of actual direct hours worked is $229,866 hours
Explanation:
In this question, first, we have to compute the predetermined overhead rate which is shown below:
Predetermined overhead rate = (Estimated manufacturing overhead costs) ÷ (Estimated direct labor hours)
= $880,600 ÷ $200,000
= $4.403
Now the number of actual direct hours worked equals to
= (Allocated manufacturing overhead) ÷ (Predetermined overhead rate)
= ($1,012,100) ÷ ($4.403)
= $229,866 hours
Kilt Company had the following information for the year:
Direct materials used $ 110,000
Direct labor incurred (5,000 hours) $ 150,000
Actual manufacturing overhead incurred $ 166,000
Kilt Company used a predetermined overhead rate of $42.00 per direct labor hour for the year and estimated that direct labor hours would total 5,500 hours. Assume the only inventory balance is an ending Work in Process balance of $17,000. How much overhead was applied during the year?
Answer:
The applied overhead is $231,000
Explanation:
The computation of the applied overhead is shown below:
= Predetermined overhead rate × direct labor hour
= $42 × 5,500 hours
= $231,000
Since the predetermined overhead rate is given in the question, so there is no need to re calculate it.
And, the other items which are mentioned in the question are not considered in the computation part. Hence, these items would be ignored
The following events occurred for Favata Company: Received $12,000 cash from owners and issued stock to them. Borrowed $9,000 cash from a bank and signed a note due later this year. Bought and received $1,000 of equipment on account. Purchased land for $16,000; paid $1,400 in cash and signed a long-term note for $14,600. Purchased $5,000 of equipment; paid $1,400 in cash and charged the rest on account. Required: For each of the events in above, prepare journal entries. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
Answer:
The journal entries is as follows:
(1) Received $12,000 cash from owners and issued stock to them
Cash A/C Dr. $12,000
To Stock capital a/c $12,000
(2) Borrowed $9,000 cash from a bank and signed a note due later this year.
Cash a/c Dr. $9,000
To Notes Payable(short term) $9,000
(3) Bought and received $1,000 of equipment on account.
Equipment a/c Dr. $1,000
To Vendor's a/c $1,000
(4) Purchased land for $16,000; paid $1,400 in cash and signed a long-term note for $14,600.
Land a/c Dr. $16,000
To cash a/c $1,400
To Note payable(long term) $14,600
(5) Purchased $5,000 of equipment; paid $1,400 in cash and charged the rest on account.
Equipment a/c Dr. $5,000
To cash a/c $1,400
To Vendor's a/c $3,600