Income statements and balance sheets data for Virtual Gaming Systems are provided below.

VIRTUAL GAMING SYSTEMS
Income Statements
For the year ended December 31
2019 2018
Net sales $3,500,000 $3,026,000
Cost of goods sold 2,478,000 1,948,000
Gross profit 1,022,000 1,078,000
Expenses:
Operating expenses 953,000 856,000
Depreciation expense 28,000 26,000
Loss on sale of land 0 7,800
Interest expense 17,000 14,000
Income tax expense 7,800 47,000
Total expenses 1,005,800 950,800
Net income $ 16,200 $ 127,200


VIRTUAL GAMING SYSTEMS
Balance Sheets
December 31
2019 2018 2017
Assets
Current assets:
Cash $ 200,000 $184,000 $142,000
Accounts receivable 74,000 79,000 58,000
Inventory 124,000 103,000 133,000
Prepaid rent 13,800 11,800 5,760
Long-term assets:
Investment in bonds 103,000 103,000 0
Land 298,000 208,000 238,000
Equipment 298,000 268,000 208,000
Less: Accumulated depreciation (94,000) (66,000) (40,000)
Total assets $1,016,800 $890,800 $744,760
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 203,400 $ 64,000 $108,160
Interest payable 8,400 5,600 2,800
Income tax payable 11,800 14,000 13,800
Long-term liabilities:
Notes payable 380,000 283,000 223,000
Stockholders' equity:
Common stock 298,000 298,000 298,000
Retained earnings 115,200 226,200 99,000
Total liabilities and stockholders’ equity $1,016,800 $890,800 $744,760
Questions:

2018 2019
Receivables turnover ratio times times
Inventory turnover ratio times times
Current ratio to 1 to 1
Debt to equity ratio % %
2018 2019
Gross profit ratio % %
Return on assets % %
Profit margin % %
Asset turnover times times

Answer:

E. below $14.

Explanation:

The decision for a firm is to shut down when price lower than average variable cost.

Since firms maximizes profit when MC is equal to the market price (P), it implies that MC = P.

Since JL Groomers experiences normal cost curves, with the marginal cost (MC) curve crossing average variable cost (AVC) at $14, this implies that MC = P = AVC at this point.

By implication, JL Groomers will always shut down if the market price is below $14.

Answer and Explanation:

The Journal entry is shown below:-

Dec 2019 Cash Dr, $180,000

      To Mortgage Payable $180,000

(Being mortgage loan taken is recorded)

Dec 2020 Interest expenses Dr,$16,200

Mortgage Payable Dr, $13,800

       To Cash $30,000

(Being first installment payment is recorded)

Dec 2021 Interest expenses Dr,$14,742

Mortgage Payable Dr, $15,258

       To Cash $30,000

(Being second installment payment is recorded)

Working note:-

For 2020 Interest expenses = $180,000 × 9%

= $16,200

Mortgage payable = $30,000 - $16,200

= $13,800

For 2021 Interest expenses = ($180,000 - $16,200) × 9%

= $14,742

Mortgage payable = $30,000 - $14,742

= $15,258

Randy Inc.'s costs include variable costs like attachable keyboards and fixed costs like advertising and salaries. Total cost calculation requires adding both types of costs. Distinguishing between these is crucial for financial analysis.

Randy Inc. incurred a range of costs in May associated with the production and sale of tablets. These include both variable costs and fixed costs. Variable costs are those that change with the level of output, such as the cost of attachable keyboards and the miscellaneous soldering materials. Fixed costs, however, do not vary with the level of output and would include costs like advertising, insurance for delivery trucks, and salaries for the factory supervisor, marketing manager, and CEO.

To calculate the total cost, we would aggregate both fixed and variable costs. Here, considering the separation of costs is important to understand how they would impact the company's financials at different levels of production. For example, the assembly worker wages are a direct variable cost as they vary with the number of units produced, whereas the marketing manager's salary is a fixed cost as it does not change with the number of units produced.

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Answer:

Instructions are below.

Explanation:

Giving the following information:

Units produced 11,000

Variable costs per unit:

Direct materials $ 250

Direct labor $ 440

Variable manufacturing overhead $ 55

Fixed costs:

Fixed manufacturing overhead $ 900,000

The difference between absorption and variable costing is that the last one includes the fixed manufacturing overhead in its product costs.

1) Absorption costing:

Unitary fixed manufacturing overhead= 900,000/11,000= $81.82

Unit product cost= 250 + 440 + (55+81.82)= $826.82

2) Variable costing:

Unit product cost= 250 + 440 + 55= $745

Answer: Introvert with a high need for power

Explanation: An Introverted individual is one who is considered more thoughtful than social, with a personality more inwardly than outwardly directed and as one who often prefers to have time in non-social situations. Given this, an introvert with a high need for power, however, would be more likely to join the cross-country team, which is an individual sport, rather than the volleyball team (team sport) and want to be captain of the team rather than just be a member.

Answer:

The correct answer is letter "A": Introvert with a high need for power.

Explanation:

Cross-county is a sport that consists of groups of people running, riding, or skiing together in the open countryside instead of on a reglementary track. People practicing this sport are evaluated by their individual performance. It will be a sport suitable for introverts, who are people who prefer to work on their own.

If the introvert individual would volunteer to lead the cross-country team, that person will show his or her need for power. Introverts usually have poor interpersonal skills, thus, the need for leading a team by one of those people is nothing more than a signal for his or her need for power.

Answer:

A. The standard percentage cost of capital multiplied by the average capital employed.

Explanation:

In corporate finance and economics and as a part of fundamental analysis, The Economic Value Added (EVA) is defined as an estimate of a firm's economic profit, or the value created in excess of the required return of the company's shareholders. EVA is the net profit less the capital charge ($) for raising the firm's capital.

Therefore it is the the standard percentage cost of capital when multiplied by the average capital that was used.

Road Rage is a sports goods manufacturing company based and founded in Plutonia. The company operates a subsidiary in Bradford, marketing products that are customized to appeal to the people of Bradford. In this case, Road Rage is following the Domestic model

Explanation:

In Domestic Model the products and services of the company are customized as per the requirement of the domestic environment, Thus the customers may  prefer domestic companies over other foreign companies.

For example : The American theme parks.The company  customized the  rides, attractions, and food offerings based on the location (like in Florida ,Europe they all have different themes)of the theme park.Thus giving the  the park a local reception   from the public.

Hence we can say that Road Rage is a sports goods manufacturing company based and founded in Plutonia. The company operates a subsidiary in Bradford, marketing products that are customized to appeal to the people of Bradford. In this case, Road Rage is following the Domestic model

Answer:

The cost of equity for ABC is 12.17 percent, and for XYZ it is 15.33 percent.

Explanation:

Since we are to ignore tax for the two companies, ABC will pay no interest since it is all equity financed. Therefore, we have.

ABC Co. cost of equity = $58,400 ÷ $480,000 = 0.1217, or 12.17%

XYZ has $240,000 equity and $240,000 debt, it has to pay interest on debt. We can therefore calculate its cost of equity as follows:

XYZ interest on loan = $240,000 × 9% = $21,600

XYZ Profit after interest = $58,400 - $21,600 = $36,800

XYZ cost of equity = $36,000 ÷ 240,000 = 0.1533, or 15.33%

Final answer:

ABC Co., which is all equity-financed, has a cost of equity of 12.167%. XYZ Co., with a mix of debt and equity, has a higher cost of equity at 15.333%, due to the interest it pays on its debt.

Explanation:

The subject of this question is capital structure and its impact on the cost of equity in the fields of Business and Finance. To find the cost of equity for both ABC Co. and XYZ Co., we need to calculate their expected returns based on their structures. ABC Co. is financed entirely by equity and is expected to have an EBIT of $58,400. This amount is also the net income since there are no taxes or interest payments to account for. The cost of equity for ABC Co. would be the return on equity, which is calculated by dividing the EBIT by the total equity, so for ABC Co., it's $58,400 / $480,000, which equals 0.12167 or 12.167%.

XYZ Co., on the other hand, has both debt and equity. The firm pays interest on its debt, so the earnings available to shareholders (net income) are the EBIT minus the interest expenses. With 9% interest on the $240,000 debt, the annual interest payment would be $21,600. This leaves $58,400 - $21,600 = $36,800 as the earnings available to equity holders. The cost of equity for XYZ Co. is then $36,800 / $240,000, which equals 0.15333 or 15.333%. Thus, the cost of equity for ABC Co. is 12.167 percent, and for XYZ Co. it is 15.333 percent.

This detailed answer provides calculations for materials, labor, and variable overhead variances along with recommendations based on the results.

1. For direct materials:

2. For direct labor:

3. Variable overhead:

The total variable overhead rate variance is $800 F, and the total variable overhead efficiency variance is $300 U.

Answer: Property values have decreased

Explanation:

The Capitalization Rate (Cap Rate) is a measure in the Real Estate world that is used to indicate the rate of return that is to be generated on a real estate investment property.  

It is calculated by,

Capitalization Rate = Net Operating Income / Current Market Value.

If Cap Rates are increasing then it would mean that either the numerator is increasing or the denominator is decreasing. The last option says that Property Values have decreased so that must be the correct option because as the denominator, if Property values decrease, Cap Rates increase.

If you need any clarification do react or comment.

Answer:

$39, 292

Explanation:

The applicable formula to calculate the present value of a projected future value is

PV =  FV  

           (1+r)n

In this case

FV = $130,000

r =6.5 % 0r  0.065

n=19

PV = 130,000

      (1 +0.065)19

PV = 130,000/3.30858

PV = $39, 292

Final answer:

To accumulate $130,000 in 19 years with an interest rate of 6.5% compounded quarterly, one needs to invest approximately $38,281.87 now.

Explanation:

To calculate how much money should be invested now at a 6.5% interest rate, compounded quarterly, to reach $130,000 in 19 years, we use the future value formula for compound interest:

Future Value (FV) = Present Value (PV) * (1 + (r/n))ⁿ⁺

Where FV = future value, PV = present value (amount to invest now), r = annual interest rate (as a decimal), n = number of times the interest is compounded per year, and t = number of years.

We need to rearrange the formula to solve for the present value (PV):

PV = FV / (1 + (r/n))ⁿ⁺

Let's plug in the values:

Now, calculating the present value:

PV = $130,000 / (1 + (0.065/4))⁴ˣ¹⁹

PV = $130,000 / (1 + 0.01625)⁷⁶)

PV = $130,000 / (1.01625)⁷⁶

PV = $130,000 / (3.39414...)

PV = $38,281.87 (rounded to two decimal places)

Therefore, an investment of approximately $38,281.87 at a rate of 6.5% compounded quarterly is required to provide $130,000 in 19 years.

Answer:

The answer is given below;

Explanation:

Capital-Opening               $1,200

Revenues for the year    $65,200

Expenses                        ($49,800)

Withdrawals                     ($2,400)

Closing balance of capital $14,200

Based on the revenue, expenses, and withdrawals, we can calculate that the ending balance on this account is $14,200

The ending balance on J. Dawson's account as a capital contributor is found as:

= Opening balance + Revenue - Expenses - Withdrawals

Solving would give:

= 1,200 + 65,200 - 49,800 - 2,400

= $14,200

In conclusion, the ending balance would be $14,200

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Answer:

A. True

B. True

C. True

D. True

E. False

F. True

Explanation:

It is true that under regional trade agreements, several countries eliminate tariffs among themselves and lower tariffs against all other countries.

It is true that regional trade agreements are consistent with GATT's most favored nation principle. GATT is an acronym for General agreement on tarrifs and trade and most favoured nation (MFN) is a status or level of treatment accorded by one state to another in international trade. The term means the country which is the recipient of this treatment must nominally receive equal trade advantages as the "most favoured nation" by the country granting such treatment (trade advantages include low tariffs or high import quotas).

It is true that the countries in the European Union (EU) keep their own tariffs with the countries outside the EU. The EU trade agreement is basically to promote trade among EU countries, not necessarily to lower tariffs for non members.

US and China have a trade agreement which lowers tarrifs and US and Canada operate a Free Trade agreement (FTA) which seeks to eliminate all tarrifs on trade between the two countries. Therefore If China wants to sell a good to Canada, it can first export it to the United States, where the tariff is lower, and then ship it duty- free to Canada.

It is false that countries who enter into a free trade area agreement maintain a common schedule of tariffs with countries outside the agreement. The agreement does not cover trade among non members.

In customs union, rules of origin are not needed. Custom unions only considers where the good is shipped from and not the originating nation.

Regional trade agreements involve the elimination of tariffs among participating countries, but they do not adhere to the most favored nation principle of the World Trade Organization (WTO). The European Union has a common external tariff, not individual tariffs for countries outside the EU. China can use tariff hopping to sell goods to Canada.

The statements can be categorised as -

a. True - Under regional trade agreements, several countries eliminate tariffs among themselves and lower tariffs against all other countries. For example, the North American Free Trade Agreement (NAFTA) eliminated tariffs between Canada, the United States, and Mexico.

b. False - Regional trade agreements are not consistent with GATT's most favored nation principle, which requires countries to treat all trading partners equally. These agreements create preferential trade relationships among participating countries.

c. False - The countries in the European Union (EU) do not keep their own tariffs with countries outside the EU. Instead, they have a common external tariff that applies to all goods entering the EU.

d. True - If China wants to sell a good to Canada, it can first export it to the United States, where the tariff is lower, and then ship it duty-free to Canada. This is known as tariff hopping.

e. False - Countries that enter into a free trade area agreement do not maintain a common schedule of tariffs with countries outside the agreement. Each country determines its own tariffs with non-member countries.

f. False - Rules of origin are needed in a customs union to determine the country of origin of goods and enforce the common external tariff. These rules help prevent trade deflection.

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Answer:

Ford's weighted average cost of capital is 8.22 %

Explanation:

Weighted Average Cost of Capital (WACC) is the minimum return that the company expect from a project. It shows the risk of the company.

Calculation of WACC

WACC = Cost of equity + Cost of preferred​ stock + Cost of debt

Capital Source       Market Values     Weight      Cost      Total Cost

equity                         $ 7 ​billion          29.17%      13.6%       3.97 %

preferred​ stock         $ 2 ​billion            8.33%      12%          1.00 %

debt                           $ 15 ​billion         62.50%     5.2 %       3.25%

Total                          $ 24 billion                                          8.22 %

Cost of equity = Risk free rate + Beta × Risk Premium

                       =  4% + 1.2 × 8%

                       =  13.6%

Cost of preferred​ stock = Dividend/Market Price

                                       = $ 3/ $ 25 × 100

                                       = 12%

Cost of debt = interest × (1- tax rate)

                    = 8% × (1-0.35)

                    = 5.2 %

The joint profit-maximizing level of output is where marginal cost equals marginal revenue. In the Cournot model, equilibrium output and profit are determined by the intersection of the firms' reaction functions. If the firms have not yet entered the industry, there would be no output or profit.

The joint profit-maximizing level of output for the two firms occurs when they collectively produce at a level where marginal cost equals marginal revenue. To find this, we need to first find the marginal revenue (MR) curve from the demand curve, and then set each firm's marginal cost (MC) equal to MR to solve for the profit-maximizing quantities Q1 and Q2.

For the Cournot model, each firm's equilibrium output and profit are found by setting their respective reaction function equal to the other firm's output level and then solving iteratively until an equilibrium is reached.

To depict this graphically, the firms' reaction functions are plotted on a two-dimensional plane, with each firm's output level on one axis. The equilibrium point is where the two reaction curves intersect.

If the firms have not yet entered the industry, there would be no output and hence no profit. Their decision to enter the industry would depend on the expected profits after entry, taking into consideration the costs of entry and exit.

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In joint profit-maximizing behavior, each firm produces 5 units, leading to a total output of 10. In the Cournot model where firms behave non-cooperatively, the firms' total output is 7.8 units with individual productions of 4 and 3.8 units respectively.

To address the question, we analyze both cooperative and non-cooperative behaviors of the two firms in the given market.

a. Joint Profit-Maximizing Level of Output

The market demand curve is given by P = 50 - 5Q. The total quantity produced by both firms is Q = Q1 + Q2. Firms share profits and costs, so their total cost is the sum of individual costs: C(Q) = C1(Q1) + C2(Q2) = (20 + 10Q1) + (10 + 12Q2).

Total Revenue (TR) = P * Q = (50 - 5Q) * Q = 50Q - 5Q^2

Total Cost (TC) = 20 + 10Q1 + 10 + 12Q2 = 30 + 10Q1 + 12Q2

To find the profit-maximizing output, we calculate Total Profit (π)

π = TR - TC = 50Q - 5Q^2 - 30 - 10Q1 - 12Q2

Differentiate π with respect to Q1 and Q2 and set to zero:

dπ/dQ1 = 50 - 10Q - 10 = 0

dπ/dQ2 = 50 - 10Q - 12 = 0

Solving these, we get equilibrium outputs: Q1 = Q2 = 5

Total output: Q = Q1+Q2 = 10

b. Non-Cooperative Behavior: Cournot Model

Assuming firms behave non-cooperatively, we use the Cournot model to find each firm’s reaction functions.

The reaction functions are derived from each firm's maximization problem:

Firm 1’s problem: Max π1 = (50 - 5(Q1 + Q2))Q1 - 20 - 10Q1

Firm 2’s problem: Max π2 = (50 - 5(Q1 + Q2))Q2 - 10 - 12Q2

Differentiating and equating to zero:

Firm 1: dπ1/dQ1 = 50 - 10Q1 - 5Q2 - 10 = 0 → Q1 = (40 - 5Q2) / 10

Firm 2: dπ2/dQ2 = 50 - 5Q1 - 5Q2 - 12 = 0 → Q2 = (38 - 5Q1) / 10

Solving these reaction functions simultaneously gives equilibrium outputs: Q1 = 4, Q2 = 3.8

Total output: Q = Q1 + Q2 = 7.8

Conclusion

In a joint profit-maximizing scenario, each firm produces 5 units, leading to a total output of 10 units. In non-cooperative Cournot equilibrium, the firms' total output is 7.8 units with individual productions of 4 and 3.8 units respectively.

Answer:

Neither Paul nor his uncle can deduct the expenses.

Explanation:

Answer:

B. $ 15 comma 120 comma 000 $15,120,000

Explanation:

The computation of the factory overhead is shown below:

= Number of production units in the next year  × required number of hours to produced × factory overhead rate per hours

= 120,000 units × 14 hours × $9 per hour

= $15,120,000

By multiplying the number of units produced with the required number of hours and factory overhead rate per hour we can get the factory overhead amount

Answer:

see below

Explanation:

Liabilities are recorded on the left-hand side of the balance sheet. They are classified as current and long term liabilities. Current liabilities are due within one year, and long term liabilities are payable in future financial periods

Liabilities

Current liabilities

Accounts payable

Short term loans    $31.4

Total current liabilities  $31.4

Long liabilities

Long term debts   $9.2

Total long liabilities   $9.2

Total liabilities     $40.6

Answer:

40%

Explanation:

For computing the manufacturing cycle efficiency, first we have to compute the throughput time which is shown below:

Throughput time = Process time + Inspection time + Move time + Queue time

= 6 + 0.6 + 0.4 + 8

= 15

Now

Manufacturing cycle efficiency (MCE) is

= Value added time (process time) ÷ Throughput time

= 6 ÷ 15

= 40%

We simply applied the above formulas so that the manufacturing cycle efficiency (MCE) could come

Options:

a) Market to market impacts only short positions

b) Marking to market results in the posting of gains or losses to each account daily

c) The process of marking a contract to market may result in a margin call

d) Market to market impacts only long positions

Answer:

Options B and C are correct.

Explanation:

Marking to market results in the posting of gains or losses to each account daily  and The process of marking a contract to market may result in a margin call

Answer:

$41,300

Explanation:

The computation of the amount of the net income or loss reported is shown below:

Equity increased during the year $42,500

Less: Issue of shares acquired $(10,700)

Add: cash Dividends paid $9,500

Net income for the year $41,300

by adding the dividend and deducting the issued of shares acquired to the equity increased we can get the net income and the same is shown above

Answer:

Index Value = $8256.00 ± 1

Explanation:

Given

Price

Shares (millions) ----- 1/1/16 ----- 1/1/17 ----- 1/1/18

Douglas McDonnell 190 $ 105 $ 111 $ 124

Dynamics General 450 68 64 78

International Rockwell 330 97 86 102

Scale factor = 10 million

The index value using the weighing scheme is the value at 1/1/16

This is calculated by taking into consideration, only Colin 1/1/16.

This is given as;

Price

Shares (millions) ----- 1/1/16

Douglas McDonnell 190 $ 105

Dynamics General 450 68

International Rockwell 330 97

We're left with 2 columns; the shares and the 1/1/16 column

The index value is calculated by multiplying the shares column by the date column divided by the scale factor

So, index value = ((190 * $105) + (450 * $68) + (330 * $97))/10

Index Value = $8256.00 ± 1

Answer:

8,256

Explanation:

shown in the picture attached

Answer:

Debit Cash account $16,800

Credit Unearned Subscription Revenue  $16,800

Explanation:

When a fee is received in advance for a service yet to be rendered, the revenue for such fee is said to be unearned. The entries required are

Debit Cash account and Credit Unearned fees or deferred revenue.

As the service is performed and the revenue is earned, debit Unearned fees and credit revenue.

Total amount received

= $20 * 8400

= $16800

Calculate the total separation costs by first determining the number of employees to be let go, then determining the cost per employee (which includes separation and exit interview costs), and finally multiplying the two.

To calculate the total amount of separation costs Chester Corp. should be expecting to pay we first need to establish the number of employees that are due to leave. To do that we multiply the number of current employees by the planned workforce reduction rate of 0.2 (which equals to 20%).

Once we found the number of employees leaving, we can calculate the costs per employee, which are the sum of the normal separation costs of $5000 and the exit interview costs of $100.

Lastly, we multiply the number of employees leaving by the calculated costs per employee. The result is the expected total separation costs with the implemented exit interviews.

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Answer:

Ending inventory : $868

Explanation:

FIFO (First-In-First-Out) is a method of inventory valuation where the inventory that is received first is sold first. In other words, the earliest inventory is used first. This is common for perishable inventory such as fruits and vegetables which if not used fast, will be wasted.

01/01/21 : Beginning Inventory : 200 units x $5 = $1000

01/15/21 : Purchases : 100 units x $5.3 = $530

01/28/21 : Purchases : 100 units x $5.5 = $550

Total units = 200 + 100 + 100 = 400 units

Units sold = Total inventory available for sale - ending inventory

= 400 - 160 = 240 units.

COGS:

Beginning Inventory : 200 units x $5 = $1000

Purchases : 40 units x $5.3 = $212

Cost of goods sold : $1000 + $212 = $1212

Ending inventory:

Purchases : (100 - 40) units x $5.3 = $318

Purchases : 100 units x $5.5 = $550

Ending inventory : $318 + $550 = $868

Answer:

Cobb Baseball

Journal Entry

Sr No               Particulars                 Debit           Credit

                     Cash                            2385Dr

                    Sales                                                   2250Cr

                     Tax Payable                                        135Cr

Explanation:

45 bats for $ 50= 45*50= 2250

Tax = 6 %of 2250 = $135

total cash received = $2250 + 135 = $2385

The tax payable is the liability of the company to pay tax. The sales are made of $ 2250 and the cash received is $ 2385 including the tax of 6 %.

Usually the sales tax is included in the sales price of an item. But some companies collect it separately and treat it in a separate account.

Answer and Explanation:

The computation is shown below:

1. Total adult population is

= Employed + Unemployed +  Not in labor force

= 142,496,000 + 12,506,000 + 88,310,000

= 243,312,000

2. The size of the labor force is

= Employed + Unemployed

= 142,496,000+ 12,506,000

= 155,002,000

3. Labor force participation rate is

= Labor force ÷ adult population × 100  

= 155,002,000 ÷ 243,312,000 × 100

= 63.705 %

4. Unemployment rate is

= Unemployed ÷ labor force × 100

= 12,506,000 ÷ 155,002,000 × 100

= 8.06 % or 8.1% (approx)

We simply applied the above formulas

Answer:

$83,850

Explanation:

Lacy's Linen Mart

Cost Retail

Beginning inventory$88,500 $139,000

Add: net purchases$331,000 $499,000

Goods available for sale$419,500 $638,000

Cost-to-retail percentage

= $419,500÷ $638,000 = 65%

Less: Net sales($509,000)

Estimated ending inventory at retail

($638,000 -$509,000) $ 129,000

Estimated ending inventory at cost(65% x $129,000)$83,850

Therefore the estimated inventory at June 30, 2021, would be $83,850

Answer:

The correct t answer is A. They are directly related​ - the higher the level of​ risk, all else​ equal, the more attractive the asset.

Explanation:

When the risk associated aged with an asset is high, usually the reward derived from.such an asset tends to be higher as well. This make the asset more attractive and desirable.