Answer:
The audit procedures whether controls, a substantive test, or dual-purpose test and the Financial statement assertion of the following procedures are given in the explanation below:
Explanation:
1.Vouch recorded sales invoices to supporting shipping documents.----
-----Dual-purpose/occurence and existence
2)Inspect recorded sales invoices for credit approval-----Test of controls/valuation and occurence
3) Vouch recorded sales invoices prices to the approved price list.
--Test of Controls/accuracy
4. Send confirmations to all customers regarding accounts receivable.
----Substantive test/existence
5) Recalculate the arithmetic accuracy of the recorded sales invoices.-----dual-purpose/accuracy and valuation
6) Compare the shipment date of record sales invoices with the invoice record date.-----dual-purpose/cut-off and completeness
7.)Trace recorded sales invoices to posting in the general ledger control account and in the correct customer's account-----dual-purpose/completeness
8)Select a sample of shipping documents from the shipping shipping department file and trace shipments to recorded sales invoices-------------dual purpose/completeness
9)Scan recorded sales invoices and shipping documents for missing numbers in sequence-----test of controls/completeness
10)Vouch sales invoices and shipping documents.-----Dual-purpose/occurence and existence
11.) Evaluate the adequacy of the allowance for doubtful accounts.
----Substantive/Valuation
The procedures are tests that auditors perform to ensure that the financial statements of a company are presented fairly in all material respects. They fall into three categories: tests of controls, substantive tests, and dual-purpose tests, and relate to a specific financial statement assertion such as accuracy, existence, completeness, etc.
Explanation: a. Vouch recorded sales invoices to supporting shipping documents. This is a dual-purpose test, and it pertains to the financial statement assertions of accuracy and completeness.
b. Inspect recorded sales invoices for credit approval. This is a test of controls, relating to the financial statement assertion of rights and obligations.
c. Vouch recorded sales invoices prices to the approved price list. This is a substantive test, closely related to the financial statement assertion of accuracy.
d. Send confirmations to all customers regarding accounts receivable. This is a dual-purpose test, related primarily to the financial statement assertion of existence.
e. Recalculate the arithmetic accuracy of the recorded sales invoices. This is a substantive test, related mainly to the financial statement assertion of accuracy.
f. Compare the shipment date of record sales invoices with the invoice record date. This is a dual-purpose test related to the financial statement assertions of cutoff and completeness.
g. Trace recorded sales invoices to posting in the general ledger control account and in the correct customer's account. This is an example of a dual-purpose test relating to the financial assertion of completeness.
h. Select a sample of shipping documents from the shipping department file and trace shipments to recorded sales invoices. This is a dual-purpose test and pertains to the financial statement assertions of completeness and accuracy.
i. Scan recorded sales invoices and shipping documents for missing numbers in sequence. This is a dual-purpose test concerned with the financial statement assertion of completeness.
j. Vouch sales invoices and shipping documents. This is a dual-purpose test, related primarily to the financial statement assertion of existence and accuracy.
k. Evaluate the adequacy of the allowance for doubtful accounts. This is a substantive test related to the financial statement assertion of valuation.
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On September 1, 2021, Southwest Airlines borrows $40.6 million, of which $9.2 million is due next year. Show how Southwest Airlines would record the $40.6 million debt on its December 31, 2021, balance sheet
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
The following three defense stocks are to be combined into a stock index in January 2016 (perhaps a portfolio manager believes these stocks are an appropriate benchmark for his or her performance). Assume the index is scaled by a factor of 10 million; that is, if the total value of all firms in the market is $5 billion, the index would be quoted as 500. 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 a. Calculate the initial value of the index if a value-weighting scheme is used.
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
Jim and Lisa own a dog-grooming business in Champlain, New York, called JL Groomers. There are many buyers and many sellers in the dog-grooming service market. JL Groomers experiences normal cost curves, with the marginal cost (MC) curve crossing average variable cost (AVC) at $14 and average total cost (ATC) at $22.
JL Groomers will always shut down if the market price is:
A. above $14
B. $22
C. between $14 and $22
D. $14
E. below $14.
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.
ssignment Attempts: Score: / 3 3. Problems and Applications Q1 In 2012, the Bureau of Labor Statistics (BLS) announced that of all adult Americans, 142,496,000 were employed, 12,506,000 were unemployed, and 88,310,000 were not in the labor force. What is the adult population? 243,312,000 155,002,000 142,496,000 12,506,000 The size of the labor force is , and the labor force participation rate is . What is the unemployment rate? 8.8% 57.0% 8.1% 5.1%
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
Sparrow Corporation (a calendar year, accrual basis taxpayer) had the following transactions in 2019, its second year of operation: Taxable income $330,000 Federal income tax liability paid 69,300 Tax-exempt interest income 5,000 Business meals expense (total) 3,000 Premiums paid on key employee life insurance 3,500 Increase in cash surrender value attributable to life insurance premiums 700 Proceeds from key employee life insurance policy 130,000 Cash surrender value of life insurance policy at distribution 20,000 Excess of capital losses over capital gains 13,000 MACRS deduction 26,000 Straight-line depreciation using ADS lives 16,000 Section 179 Expense elected in 2018 25,000 Dividends received from domestic corporations (less than 20% owned) 35,000 Sparrow uses the LIFO inventory method, and its LIFO recapture amount increased by $10,000 during 2019. In addition, Sparrow sold property on installment during 2018. The property was sold for $40,000 and had an adjusted basis at sale of $32,000. During 2019, Sparrow received a $15,000 payment on the installment sale. Finally, assume that no additional first-year depreciation was claimed.a. Indicate whether each item (or part of the item) is "Added" to, "Deducted" from taxable income, or "No effect" when computing current E& P.
b. Sparrow Corporation's current E & P is $ .........
Sparrow Corporation's current E&P is calculated by adjusting its taxable income with specific items, including tax-exempt interest, business meals, life insurance, capital losses, MACRS, Section 179 expense, dividends, LIFO recapture, and installment sales. These adjustments are necessary because tax rules and E&P calculations differ.
Explanation:The calculation of Sparrow Corporation's current Earnings and Profits (E&P) requires adjusting its taxable income for specific items that are treated differently for tax and E&P purposes. Below are the adjustments:
Tax-exempt interest income: No effect on E&P because it is already excluded from taxable income.Business meals expense: Deducted for tax purposes but only 50% deductible for E&P calculations.Premiums paid on key employee life insurance: Added back to E&P because they are not deductible for tax purposes.Proceeds from key employee life insurance policy: No effect on E&P as life insurance proceeds are generally excluded from both taxable income and E&P.Excess of capital losses over capital gains: Added back to E&P to the extent that losses exceed gains, since only realized gains and losses are considered for E&P.MACRS deduction: Deducted for tax purposes but for E&P, depreciation is computed using the straight-line method.Section 179 Expense elected in 2018: No effect on current year E&P.Dividends received from domestic corporations: Deducted for tax purposes with a dividends-received deduction; for E&P purposes, the dividend amount is generally included in E&P but with a related deduction.LIFO recapture: Added to E&P because this adjustment ensures that E&P reflects income computed under the FIFO inventory method.Installment Sale: The profit portion of the installment payment received is included in E&P for the year received.To calculate current E&P for Sparrow Corporation, each of these items must be considered in combination with the corporation's taxable income.
Lacy's Linen Mart uses the average cost retail method to estimate inventories. Data for the first six months of 2021 include: beginning inventory at cost and retail were $88,500 and $139,000, net purchases at cost and retail were $331,000 and $499,000, and sales during the first six months totaled $509,000. The estimated inventory at June 30, 2021, would be:
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
Road Rage is a sports goods manuifactruing 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 ____________ model.
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
Randy Inc. produces and sells tablets. The company incurred the following costs for the May: Advertising cost for monthly television ads $ 5,400 Attachable keyboard 19,400 Insurance for delivery truck 540 Factory supervisor's salary 3,450 Marketing manager's salary 3,150 Assembly worker wages 22,000 Miscellaneous soldering material used to seal case 950 Hourly wages for factory security guard 2,100 CEO's salary 7,200 Speakers 5,100 Required: Determine each of the following:
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.
Explanation: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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How does the level of risk affect an asset's desirability? A. They are directly related - the higher the level of risk, all else equal, the more attractive the asset. B. They are inversely related - the higher the level of risk, all else equal, the less attractive the asset. C. They are unrelated - an asset's level of risk is unrelated to its desirability.
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.
Using Economic Value Added (EVA) to calculate residual income, the cost of capital employed is a.the standard percentage cost of capital multiplied by the average capital employed. b.the standard percentage cost of capital multiplied by the total capital employed. c.the actual percentage cost of capital multiplied by the average capital employed. d.the actual percentage cost of capital multiplied by the total capital employed.
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.
On January 1, 2021, the Coldstone Corporation adopted the dollar-value LIFO retail inventory method. Beginning inventory at cost and at retail were $200,000 and $282,450, respectively. Net purchases during the year at cost and at retail were $693,600 and $856,000, respectively. Markups during the year were $11,000. There were no markdowns. Net sales for 2021 were $846,000. The retail price index at the end of 2021 was 1.05. What is the inventory balance that Coldstone would report in its 12/31/2021 balance sheet
Coldstone Corporation's inventory balance for the 12/31/2021 balance sheet, using the dollar-value LIFO retail inventory method, and adjusting for the retail price index, is $204,757.50.
Explanation:To calculate the inventory balance for Coldstone Corporation, we apply the dollar-value LIFO retail inventory method. We need to convert the Ending Inventory at retail to cost by using the retail price index. The steps involved are as follows:
Calculate the cost-to-equal ratio at the beginning of the year by dividing Beginning Inventory at Cost ($200,000) by Beginning Inventory at Retail ($282,450). This gives us a ratio of 0.7085.Next, we add Net Purchases at Cost to Beginning Inventory at Cost to get the Cost of Goods Available for Sale. This is $200,000 + $693,600 = $893,600.Net Purchases at Retail are added to Beginning Inventory at Retail and Markups to get Goods Available for Sale at Retail. This is $282,450 + $856,000 + $11,000 = $1,149,450.Deduct Net Sales from Goods Available at Retail to find the Ending Inventory at Retail. So, $1,149,450 - $846,000 = $303,450.Finally, we adjust the Ending Inventory at Retail to reflect year-end prices by applying the retail price index (1.05). So, $303,450 / 1.05 = $289,000.Lastly, multiply the adjusted Ending Inventory at Retail by the Cost-to-Retail Ratio to get the Ending Inventory at Cost, which is $289,000 × 0.7085 = $204,757.50.Therefore, the inventory balance that Coldstone would report in its 12/31/2021 balance sheet is $204,757.50.
The inventory balance that Coldstone would report in its 12/31/2021 balance sheet, after rounding to the nearest dollar, is: $235,710
To calculate the inventory balance that Coldstone would report on its 12/31/2021 balance sheet using the dollar-value LIFO retail inventory method, we need to follow these steps:
1. Calculate the cost of the ending inventory at retail by multiplying the beginning inventory at retail by the retail price index:
Ending Inventory at Retail = Beginning Inventory at Retail × Retail Price Index
Ending Inventory at Retail = $282,450 × 1.05
Ending Inventory at Retail = $296,522.50
2. Calculate the cost of the ending inventory at cost by using the cost-to-retail ratio applied to the ending inventory at retail:
Cost-to-Retail Ratio = (Beginning Inventory at Cost + Net Purchases at Cost) / (Beginning Inventory at Retail + Net Purchases at Retail)
Cost-to-Retail Ratio = ($200,000 + $693,600) / ($282,450 + $856,000)
Cost-to-Retail Ratio = $893,600 / $1,138,450
Cost-to-Retail Ratio = 0.7847 (approximately)
Ending Inventory at Cost = Ending Inventory at Retail × Cost-to-Retail Ratio
Ending Inventory at Cost = $296,522.50 × 0.7847
Ending Inventory at Cost = $232,845.98 (approximately)
3. Adjust the ending inventory at cost for the markup on ending inventory:
Markup on Ending Inventory = Markups × (Ending Inventory at Cost / (Beginning Inventory at Cost + Net Purchases at Cost))
Markup on Ending Inventory = $11,000 × ($232,845.98 / $893,600)
Markup on Ending Inventory = $11,000 × 0.2604 (approximately)
Markup on Ending Inventory = $2,864.40 (approximately)
Adjusted Ending Inventory at Cost = Ending Inventory at Cost + Markup on Ending Inventory
Adjusted Ending Inventory at Cost = $232,845.98 + $2,864.40
Adjusted Ending Inventory at Cost = $235,710.38 (approximately)
The cap rate is an important metric that investors use to analyze the state of commercial real estate markets. When interpreting cap rate movements, an increase in cap rates over time would indicate that:
The discount rate used in TVM (time value of money) calculations has increased
The discount rate used in TVM (time value of money) calculations has decreased
Property values have increased
Property values have decreased
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.
Sales Tax Cobb Baseball Bats sold 45 bats for $50 each, plus an additional state sales tax of 6%. The customer paid cash.Required: Prepare the journal entry to record the sale. If an amount box does not require an entry, leave it blank.a. blank.
b. Cash
c. Sales
d. Revenue Sales
e. Tax Payable
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.
Ida Sidha Karya Company is a family-owned company located in the village of Gianyar on the island of Bali in Indonesia. The company produces a handcrafted Balinese musical instrument called a gamelan that is similar to a xylophone. The gamelans are sold for $937. Selected data for the company’s operations last year follow:
Units in beginning inventory 0
Units produced 11,000
Units sold 8,000
Units in ending inventory 3,000
Variable costs per unit:
Direct materials $ 250
Direct labor $ 440
Variable manufacturing overhead $ 55
Variable selling and administrative $ 15
Fixed costs:
Fixed manufacturing overhead $ 900,000
Fixed selling and administrative $ 690,000
Required:
1.
Assume that the company uses absorption costing. Compute the unit product cost for one gamelan.
2.
Assume that the company uses variable costing. Compute the unit product cost for one gamelan.
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
Contingency money is:
a. Valued at a higher rate than non-contingency money when determining project costs.
b. The money, that must be received before any project work can begin.
c. Not usually a part of the activity-based costing process.
d. Money that is spent first to lock-in all contract guarantees.
Effie Company uses a periodic inventory system. Details for the inventory account for the month of January, 2021 are as follows: Units Per unit price Total Beg. Balance, 1/1/21 200 $5.00 $1,000 Purchase, 1/15/21 100 5.30 530 Purchase, 1/28/21 100 5.50 550 An end of the month (1/31/21) inventory showed that 160 units were on hand. If the company uses FIFO, what is the value of the ending inventory? Group of answer choices $868 $848 $800 $832
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
The December 31, Year 1, balance sheet for Deen Company showed total stockholders’ equity of $73,000. Total stockholders’ equity increased by $42,500 between December 31, Year 1, and December 31, Year 2. During Year 2, Deen Company acquired $10,700 cash from the issue of common stock. Deen Company paid a $9,500 cash dividend to the stockholders during Year 2.
Required Determine the amount of net income or loss Deen reported on its Year 2 income statement.
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
Cullumber Company Ltd. publishes a monthly sports magazine, Fishing Preview. Subscriptions to the magazine cost $20 per year. During November 2017, Cullumber sells 8,400 subscriptions for cash, beginning with the December issue. Cullumber prepares financial statements quarterly and recognizes subscription revenue at the end of the quarter. The company uses the accounts Unearned Subscription Revenue and Subscription Revenue. The company has a December 31 year-end Prepare the entry in November for the receipt of the subscriptions.
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
M7-7 to M7-9 Calculating Cost of Goods Available for Sale, Ending Inventory, Sales, Cost of Goods Sold, and Gross Profit under Periodic FIFO, LIFO, and Weighted Average Cost [LO 7-3] [The following information applies to the questions displayed below.] The following are the transactions for the month of July. Units Unit Cost Unit Selling Price July 1 Beginning Inventory 50 $ 10 July 13 Purchase 250 13 July 25 Sold (100 ) $ 15 July 31 Ending Inventory 200 M7-9 Calculating Cost of Goods Available for Sale, Ending Inventory, Sales, Cost of Goods Sold, and Gross Profit under Periodic Weighted Average Cost [LO 7-3] Calculate cost of goods available for sale and ending inventory, then sales, cost of goods sold, and gross profit, under weighted average cost. Assume a periodic inventory system is used. (Round "Cost per Unit" to 2 decimal places and your final answers to nearest whole dollar amount.)
Answer:
Date Units Unit Cost Unit Selling Price
July 1 Beginning Inventory 50 $ 10
July 13 Purchase 250 13
July 25 Sold (100 ) $ 15
July 31 Ending Inventory 200
Cost of Goods Available for sale= 250 units at $ 13+ 50 units at $ 10
= 3250 + 500= $3750
FIFO Ending Inventory $ 2600
200 units at $ 13= $ 2600
Sales 100At $ 15= $1500
FIFO Cost Of Goods Sold $ 1150
50 units at $ 10= $ 500
50 units at $ 13= $ 650
LIFO Ending Inventory $ 2450
50 units at $ 10= $ 500
150 units at $ 13= $ 1950
Sales 100 at $ 15= $1500
LIFO Cost Of Goods Sold $ 1150= Cost of Goods Available for Sale Less LIFO Ending Inventory = 3750- 2450= $ 1300
100 units at $ 13= $ 1300
Weighted Average Ending Inventory 12.5 * 200= $ 2500
Total Cost/ total units= 3750/300= 12.5
Weighted Average Cost Of Goods Sold $ 1150= Cost of Goods Available for Sale Less Weighted Average Ending Inventory = 3750- 2500= $ 1250
Weighted Gross Profit= Sales Less Weighted Cost Of Goods Sold= $ 1500- $ 1250= $ 250
Calculation for cost of goods available for sale and ending inventory, sales, cost of goods sold, and gross profit, under weighted average cost.
•Cost of goods available for sale $3,750
•Ending inventory $2,500
•Sales $1,500
•Cost of goods sold $1,250
•Gross profit $250
Cost of goods available for sales:
Beginning Inventory 50×$10=$500
July 13 Purchases 250×$13=$3,250
Goods Available for Sale 300 $3,750
Gross sales $1,500
(100×$15)
Cost of goods sold $1,250
($3,750/300×100)
Gross profit $250
($1,500-$1,250)
Ending inventory=($3,750/300×200)
Ending inventory=$2,500
Inconclusion:
•Cost of goods available for sale $3,750
•Ending inventory $2,500
•Sales $1,500
•Cost of goods sold $1,250
•Gross profit $250
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The average cost of a 4-year college education is projected to be $130,000 in 19 years. How much money should be invested now at 6.5%, compounded quarterly, to provide $130,000 in 19 years
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:
FV = $130,000r = 6.5% or 0.065n = 4 (because interest is compounded quarterly)t = 19 yearsNow, 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.
Meat Packers, Incorporated (MPI) preserves and packages various kinds of meats for transportation to grocery stores. To prepare and transport each meat package to a grocery store, the firm must purchase $40 in raw meat and pay $90 in wages for labor and $80 in fuel costs. In addition, the firm rents a factory for $14 comma 000 per month and makes $3 comma 000 in monthly payments on meat packaging equipment. Suppose the firm prepares and transports 2 comma 000 packages of meat per month. What are the firm's fixed and variable costs of production in a given month? The firm's fixed cost of production is $ nothing, and its variable cost of production is $ nothing. (Enter numeric responses using integers.)
Answer:
Total variable cost= $420,000
Total fixed costs= $17,000
Explanation:
Giving the following information:
Variable cost per unit:
Direct material= $40
Direct labor= $90
Unitary variable overhead= $80
Fixed costs:
Rent= $14,000 per month
Equipment= $3,000
Production= 2,000 packages
Total variable cost= unitary cost* production in units
Total variable cost= 210*2,000= $420,000
Total fixed costs= $17,000
Match the phrase (or word) on the left with the numbered description on the right. Phrase Description A. SARA 1. This process describes the organization and the prediction of the order in which risks will occur. 2. This acronym represents the standard ways in which people and organizations can attempt to deal with risks. 3. This phrase emphasizes the fact that managing risk is the most important part of any project. 4. This phrase includes the processes of identifying, prioritizing, planning for, recognizing and mitigating risks. 5. This phrase represents the continuation of an organization, including continuing operations after a detrimental event, such as a hurricane or the loss of a key employee. 6. This phrase is a result of systematic ordering of risks based on their likelihood of occurrence and the impact of their occurrence. 7. This phrase represents the process of identifying and compiling all the risks associated with a project, process or organization. B. Business Continuity C. Risk Management D. Risk Inventory E. Risk Priority
Answer:
The phrase questions on the left such as SARA, Business continuity, Risk Management, Risk inventory, Risk priority are all matched with the phrase description on the right, and explained below in the explanation section.
Explanation:
Solution
SARA: this refers to the standard ways in which people and organisation can attempt to deal with risk
Business continuity: The phrase represent the continuation of an organisation including continuing operations after detrimental event such as hurricane or the loss of a key employee.
Risk management: this phrase refers to the process of compiling and identifying all the risk involved with a project process or organisation.
Risk inventory: this phrase is a result of systematic ordering of risk based on the likelihood of occurrence and the impact of their occurrence.
Risk priority: the phrase includes the processes of identifying, prioritising planning for organising and mitigating risk.
Given the following: 2013 2012 2011
Sales: $400,000 $450,000 $470,000
Gross Profit: $100,000 $130,000 $140,000
Net Income: $300,000 $220,000 $330,000
Conduct a trend analysis of sales in 2013 to the nearest percent. The base year is 2011.
Answer: 85%
Explanation:
During the current tax year, Paul came down with a serious illness. Paul's uncle paid many of Paul's expenses during the period of rehabilitation. For tax purposes, how are Paul's mortgage interest and real estate property taxes handled?
Answer:
Neither Paul nor his uncle can deduct the expenses.
Explanation:
Who would be more likely to join the cross-country team (individual sport) instead of the volleyball team (team sport) and want to be captain of the team rather than just be a member?
Introvert with a high need for power
Introvert with a slow need for power
Introvert with a medium need for power
None of the Above
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.
Regional trade agreements In the following table, indicate whether each statement about regional trade agreements is true or false. a. Under regional trade agreements, several countries eliminate tariffs among themselves and lower tariffs against all other countries b. Regional trade agreements are consistent with GATT's most favored nation principle. c. The countries in the European Union (EU) keep their own tariffs with the countries outside the EU.d. 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. e. Countries that enter into a free trade area agreement maintain a common schedule of tariffs with countries outside the agreement.f. Rules of origin are not needed in a customs union.
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.
Explanation: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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For each of the following items, calculate the amount of revenue or expense that should be recognized on the income statement for Pelkey Co. for the year ended December 31, 2019:Required:a. Cash collected from customers during the year amounted to $874,000, and accounts receivable increased by $47,700. How much were sales on account for the year ended December 31, 2019?
Answer:
$921,700
Explanation:
Sales on account for the year ended December 31, 2019 is the cash collected from customers during the year and the increase in the accounts receivable. This can be calculated as follows:
Sales on account = $874,000 + $47,700 = $921,700
Therefore, sales on account for the year ended December 31, 2019 were $921,700.
The market value of Fords' equity, preferred stock, and debt are $ 7 billion, $ 2 billion, and $ 15 billion, respectively. Ford has a beta of 1.2, the market risk premium is 8%, and the risk-free rate of interest is 4%. Ford's preferred stock pays a dividend of $ 3 each year and trades at a price of $ 25 per share. Ford's debt trades with a yield to maturity of 8%. What is Ford's weighted average cost of capital if its tax rate is 35%?
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 %
"In the economy of Wrexington in 2008, consumption was $5000, exports were $100, government purchases were $900, imports were $200, and investment was $1000. What was Wrexington’s GDP in 2008?"
Answer:
The GDP in 2008 was $6800
Explanation:
The GDP or Gross Dividend Product of the country is the total value of the economic activity or the value of goods and services produced in an economy within a country in a certain year.
The formula to calculate the GDP = C + I + G + ( X - M )
Where,
C is the consumptionI is the InvestmentG is the government spendingX is the value of exportsM is the calue of importsThus, GDP = 5000 + 1000 + 900 + ( 100 - 200)
GDP = $6800
ABC Co. and XYZ Co. are identical firms in all respects except for their capital structure. ABC is all equity financed with $480,000 in stock. XYZ uses both stock and perpetual debt; its stock is worth $240,000 and the interest rate on its debt is 9 percent. Both firms expect EBIT to be $58,400. Ignore taxes. The cost of equity for ABC is _____ percent, and for XYZ it is ______ percent.
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.