Answer:
The company destroyed 2,000,000 capital
As the returns are less than the cost of create the assets.
It is destroys wealth to the stockholders
Explanation:
operating return on investment 12%
industry 11%
opportunity cost 14% overall cost of capital
Assets: 100 millions
Economic Value Added:
income - Assets x WACC
as there is no debt , the WACC will be the cost of capital
Return: 100,000,000 x 12% = 12,000,000
Assetx x cost of capital
100,000,000 x 14% = 14,000,000
EVA = 12,000,000 - 14,000,000 = -2,000,000
The company destroyed 2,000,000 capital
As the returns are less than the cost of create the assets.
The following information pertains to Alpha Computing at the end of 2015:
Assets $972,500
Liabilities $450,000
Net Income $237,500
Common Stock $370,000
Alpha Computing's Retained Earnings account had a zero balance at the beginning of 2015.
What amount of dividends did the company pay in 2015?
Answer:
Dividens paid in 2015: $85.000
Explanation:
TOTAL ASSETS 972.500
TOTAL LIABILITIES 450.000
Common Stock $ 370.000
Retained Earnings $ 152.500
TOTAL EQUITY $ 522.500
Retained Earnings Report
Opening retained earnings $ 0
Add: Net Income $ 237.500
Subtotal $ 237.500
Less: Dividens -$ 85.000
Total $ 152.500
Total stockholders' equity represents
a. a claim to specific assets contributed by the owners.
b. the maximum amount that can be borrowed by the enterprise.
c. a claim against a portion of the total assets of an enterprise.
d. only the amount of earnings that have been retained in the business.
Answer: Option C
Explanation: In simple words, the amount of assets that remain in the business after all liabilities have been met is called the stockholders equity. These are the funds available in the company on which the common stockholders have their right.
In other words, these are the assets which are financed by the owners of the company and no liability is incurred to purchase them.
Hence from the above we can conclude that the correct option is C.
Sam has decided to buy a burger and fries at a restaurant, but he is considering whether to buy a drink as well. Suppose the price of a burger is $3.00, fries are $1.50, drinks are $2.00, and a value meal with all three costs $4.99. For Sam, what is the marginal cost of the drink?
Answer:
$.49
Explanation:
In this question we have given
Cost of one burger=$3
Cost of fries=$1.5
Cost of drink=$2
Cost of value meal=$4.99
Therefore, marginal price of drink=cost of value meal-cost of fries and burger
=4.99-3-1.5
=$.49
Barry’s Steroids Company has $1,000 par value bonds outstanding at 13 percent interest. The bonds will mature in 40 years. If the percent yield to maturity is 11 percent, what percent of the total bond value does the repayment of principal represent?
Answer:
[tex]principle payement = 1.75[/tex]%
Explanation:
From Appendix D
Present Value of Interest Payments
PVA = A × PVIFA (n = 40, i = 13%)
A = 0.13 * 1000 = 130
[tex]PVIFA = \frac{1 - (1-\frac{r}{t}^(-m\times t)}{\frac{r}{t}}[/tex]
[tex]PVIFA = \frac{1 - (1-\frac{0.13}{40}^(-40)}{0.13}[/tex]
= 7.650
PVA = $130 × 7.650 = $994.5
From Appendix B
Present Value of Principal Payment
PV = FV × PVIF (n = 40, i = 13%)
PV = $1,000 × .0075 = $7.5
here PVIF value AT 40 YEAR FOR 13 % is 0.0075
Present Value of Interest Payments = $994.5
Present Value of Principal Payment = $ 17.5
Total Present Value the Bond = interest payment + principal payment = $ 856.96
[tex]principle \ payement = \frac{17.5}{994.5} \times 100[/tex]
[tex]principle payement = 1.75[/tex]%
You are setting up a part-time business with an initial investment of $27,000. The unit cost of the product is $11.30, and the selling price is $18.80. (a) Find equations for the total cost C (in dollars) and total revenue R (in dollars) for x units. C(x) = R(x) = (b) Find the break-even point by finding the point of intersection of the cost and revenue equations. units (c) How many units would yield a profit of $1000? units
Answer:
A. The function to express the cost is:
C(X) = $11.3*X + $27,000
The function to express the revenue is:
R(X) = $18.8*X
B. The break-even point is obtained for 3600 units
C. It is needed 3734 units to yield a profit of $1,000.
Explanation:
The expression for the cost of bussines is obtained by adding the initial investment to the cost of production of X units:
C(X) = $11.3*X + $27,000
Meanwhile the revenue for selling X is units is represented as:
R(X) = $18.8*X
Then the break-even point is found by equalling C(X) with R(X):
R(X) = C(X)
$18.8*X = $11.3*X + $27,000
$18.8*X - $11.3*X = $27,000
$ 7.5*X = $27,000
X = $27,000 / $7.5
X = 3,600 units
The profit of the bussines P(X) can be expressed sustracting the cost C(X) to the revenue R(X):
P(X) = R(X) - C(X)
P(X) = $18.8 * X - ($11.3*X + $27,000)
Equalling the profit to $1000 we will find the amount of units for selling:
$1,000 = $18.8*X - ($11.3*X + $27,000)
$1,000 = $18.8*X - $11.3*X - $27,000
$1,000 = $7.5*X - $27,000
$1,000 + $27,000 = $7.5*X
$28,000 = $7.5*X
$28,000 / $7.5 = X
X = 3734 units
Using the data below, calculate GDP. Show your work. Personal consumption expenditures $5,207 Interest 425 Corporate profits 735 Government spending 1,406 Depreciation 830 Rental income 146 Gross private domestic investment 1,116 Compensation of employees 4,426 Exports 870 Imports 965 Indirect business taxes 553 Proprietors' income 520 Personal taxes 886 Social Security taxes 432 Transfer payments 376
Answer:
GDP= 7634
Explanation:
Gross Domestic Product (GDP) is the total monetary or market value of all the finished goods and services produced within a country's borders in a specific time period. It is an indicator to measure the economic health of a country.
The formula to calculate GDP is of three types – Expenditure Approach, Income Approach, and Production Approach.
The Expenditure Approach is a method of measuring GDP by calculating all spending throughout the economy including consumer consumption, investing, government spending, and net exports. This method calculates what a country produces, assuming that the finished goods and services of a country equals the amount spent in the country for that period.
The formula is:
GDP=C+I+G+/-NX
GDP: Gross Domestic Product
(C) consumer spending – this is the amount that all consumers spend on goods and services for personal use.
(I) investment – this is the amount that businesses or owners spend to invest in new equipment or expansions.
(G) government spending – this includes spending on new infrastructure like bridges and roads.
(NX) net exports – this includes spending on a country’s exports minus its spending on imports.
Personal consumption expenditures $5,207
Government spending 1,406
Gross private domestic investment 1,116
Exports 870
Imports 965
GDP= 5207+1406+1116+(870-965)
GDP= 7634
Notice that we didn't include Wages, Corporate Profits, Depreciation, etc. The expenditure income approach doesn't include Wages. They are part of the formula to calculate GDP by the Income Approach.
A duopoly faces an inverse market demand of: p equals 390 minus 3 q 1 minus 3 q 2. You are told that firm 1 is the leader and firm 2 is the follower. Otherwise the firms are identical, each with a constant marginal cost of $90. What oligopoly model will you use to analyze this market?
Answer:
Stackelberg duopoly
Explanation:
The Stackelberg duopoly is characterized by having two firms that produce a homogeneous good, both face the same costs and the same demand. One of the two firms is the leader and the other is the follower. This happens because one of them is bigger or is more recognized. The leader firm can choose the quantity that it will produce (q1) and then the follower firm will produce according to the leader firm choice. In game theory, people use backward induction to find the Nash equilibrium.
Red Hawk Enterprises sells handmade clocks. Its variable cost per clock is $8, and each clock sells for $18. Calculate Red Hawk’s unit contribution margin and contribution margin ratio. Suppose Red Hawk sells 2,000 clocks this year. Calculate the total contribution margin.
Answer:
Instructions are listed below
Explanation:
Giving the following information:
Its variable cost per clock is $8.
Each clock sells for $18.
Suppose Red Hawk sells 2,000 clocks this year.
A) contribution margin= selling price - variable costs= 18-8= $10
B) Contribution margin rate= contribution margin/ selling price= 10/18= 0.5556
C= Total contribution margin= units* contribution margin= 2000*10= $20,000
Calculate unit contribution margin, contribution margin ratio, and total contribution margin for Red Hawk Enterprises selling 2,000 clocks.
Unit Contribution Margin: $18 - $8 = $10 per clock
Contribution Margin Ratio: ($10 / $18) x 100% = 55.56%
Total Contribution Margin: $10 x 2,000 = $20,000
_____ refers to efforts to create, develop, and defend markets that satisfy individual and business customers.
a. Marketing
b. Supply chain
c. Sales
d. Business managemen
Answer: Marketing
Explanation: The concept of marketing in business management focuses on developing healthy relationship with the existing customers and attracting the potential customers. It is considered a primary function of business management.
The customer service and satisfaction are main objectives of marketing.
Thus, from the above we can conclude that the correct option is A.
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Knight Company reports the following costs and expenses in May.
Factory utilities $16,942 Direct labor $71,743
Depreciation on factory equipment 13,387 Sales salaries 47,310
Depreciation on delivery trucks 4,546 Property taxes on factory building 3,252
Indirect factory labor 49,656 Repairs to office equipment 2,179
Indirect materials 84,468 Factory repairs 2,465
Direct materials used 142,667 Advertising 15,712
Factory manager%u2019s salary 8,285 Office supplies used 3,523
From the information, determine the total amount of:
(a) Manufacturing overhead $Knight Company reports the following costs and exp
(b) Product costs $Knight Company reports the following costs and exp
(c) Period costs $Knight Company reports the following costs and exp
Answer:
A Overhead: 180,634
B Production Cost: 214,410
C Period Cost: 71,091
Explanation:
Manufacturing overhead
Factory utilities 16,942
Depreciation on factory equipment 13,387
Property taxes on factory building 3,252
Indirect factory labor 49,656
Repairs to office equipment 2,179
Indirect materials 84,468
Factory repairs 2,465
Factory manager's salary 8,285
Total: 180.634
Product Cost
Direct labor 71, 743
Direct materials used 142,667
Total: 214,410
Period Cost
Sales salaries 47, 310
Depreciation on delivery trucks 4,546
Advertising 15, 712
Office supplies used 3,523
Total: 71,091
Calculate each category by summing their respective costs: Manufacturing overhead comprises all indirect manufacturing costs. Product costs include direct materials, direct labor, and manufacturing overhead. Period costs are non-manufacturing expenses like advertising and office supplies.
Explanation:The student's question asks to calculate total manufacturing overhead, product costs, and period costs from given expenses for Knight Company. To answer this, we must categorize each cost listed.
Manufacturing overhead is the total of all the indirect costs associated with manufacturing the product. This includes:
Factory utilities: $16,942Depreciation on factory equipment: $13,387Property taxes on factory building: $3,252Indirect factory labor: $49,656Indirect materials: $84,468Factory repairs: $2,465Factory manager’s salary: $8,285Product costs are the total costs incurred to create a finished product ready for sale. This includes:
Direct materials used: $142,667Direct labor: $71,743Manufacturing overhead: (sum of the above overhead costs)Period costs are costs that are not directly tied to the production process and include:
Sales salaries: $47,310Depreciation on delivery trucks: $4,546Repairs to office equipment: $2,179Advertising: $15,712Office supplies used: $3,523To get the total for each category, one would simply sum up the respective costs.
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Sheffield Corp. is a private camping ground near the Mount Miguel Recreation Area. It has compiled the following financial information as of December 31, 2017. Service revenue (from camping fees) $174,240 Dividends $11,880 Sales revenue (from general store) 33,000 Notes payable 66,000 Accounts payable 14,520 Expenses during 2017 166,320 Cash 11,220 Supplies 7,260 Equipment 150,480 Common stock 52,800 Retained earnings (1/1/2017) 6,600 Determine Sheffield Corp.’s net income for 2017. Sheffield Corp.’s net income for 2017
Answer:
Net Income for 2017 - $40.920
Explanation:
Income Statement
Sales Service and Store $207.240
Cost of goods sold -$166.320
Gross Profit $40.920
Net Income $40.920
Last year, the price of hamburger was $5 per pound and the price of trout was $6 per pound. This year, the price of hamburger is $8 per pound and the price of trout is $9 per pound. All other things equal, and assuming that Phillip purchased both items before, what would you expect to happen to his purchases of hamburger (relative to trout) this year?
Answer: The relative Price of Hamburger has decreased, so Phillip would be expected to purchase more.
Explanation:
Given that,
Price of Hamburger(H):
Last year = $5 per pound
This year = $8 per pound
Price of trout(T):
Last year = $6 per pound
This year = $9 per pound
Last year's Relative price of Hamburger = [tex]\frac{H}{T}[/tex]
= [tex]\frac{5}{6}[/tex]
= 0.833
This year's Relative price of Hamburger = [tex]\frac{H}{T}[/tex]
= [tex]\frac{8}{9}[/tex]
= 0.888
The relative Price of Hamburger has decreased, so Phillip would be expected to purchase more.
Final answer:
As the price of hamburger has increased relatively more than trout, the substitution effect implies that Phillip is expected to decrease his purchases of hamburger relative to trout this year.
Explanation:
Last year, the price of hamburger was $5 per pound, and the price of trout was $6 per pound. This year, the price of hamburger has increased to $8 per pound, and the price of trout has risen to $9 per pound. Based on the provided price changes and assuming all other factors remain constant, we would expect Phillip's purchases of hamburger, relative to trout, to decrease this year. This expectation is based on the economic principle of substitution effect, which suggests that as the price of hamburger rises relatively more than the price of trout, consumers like Phillip would likely buy less hamburger and possibly more trout, or switch to other substitutes if available.
Mapoob Sapling Learning macmilan learning Label each scenario by deciding whether opportunity cost has increased or decreased. Emily is deciding between her two favorite restaurants. One makes Indian food and the other makes Chinese food. The Indian restaurant has just raised its prices. The opportunity cost of Chinese food has Jacob has a bagel or a muffin for breakfast. Muffins are on sale so they cost $1 less than usual. The opportunity cost of eating a bagel has: Taylor has to take time off work to study. Since her wage has increased from $10 per hour to $15 per hour, the opportunity cosť of studying has: Justin decides to take the bus to school instead of driving to school. The rice of gasoline has just decreased. The opportunity cost of taking the bus Increased Decreased
Answer:
(a) The opportunity cost of Chinese food has decreased because Indian restaurant raises its price, so Chinese food is more affordable and indian food become expensive.
(b) The opportunity cost of eating a bagel has increased because the price of muffins falls.
(c) The opportunity cost of studying has increased because his wages increases from $10 to $15, so now he have to foregone more money income than before.
(d) The opportunity cost of taking the bus has increased because bus travel becomes more affordable or cheaper due to lower gasoline prices.
Donata Company purchased equipment for $30,000 in December 20x1. The equipment is expected to generate $10,000 per year of additional revenue and incur $2,000 per year of additional cash expenses, beginning in 20x2. Under MACRS, depreciation in 20x2 will be $3,000. If the firm's income tax rate is 40%, the after-tax cash flow in 20x2 would be:
Answer:
Total after-tax cash flow= $6000
Explanation:
Giving the following information:
Equipment value= $30,000 in December 20x1.
Income= $10,000 p
Cost= $2,000 per year.
Depreciation= $3,000.
t=0,40
Cash flow has the following structure:
Income (+)
Cost (-)
Depreciation (-)
=EBIT
TAX (-)
Depreciation (+)
Total
Income= 10000
Costs= -2000
Depreciation= -3000
EBIT= 5000
Tax= -2000
Depreciation= 3000
Total= 6000
Lara allocates wealth between two periods: youth (time 1) and old age (time 2).Currently (in her youth) she has $8,000 in cash. She can borrow and lend at the bankat a rate of 15% between time 1 and time 2 (that is, lending $1 in youth will give her$1.15 in old age). Her only investment opportunity other than the bank is a projectthat costs $5,000 now in her youth and has a payoff of $6,000 in her old age. What isthe most Lara can consume in her old age? Assume Lara cannot consume a negativeamount in her youth.
Answer:
The second alternative is the one that will allow her to consume more in her old age.
Explanation:
Giving the following information:
Lara allocates wealth between two periods: youth (time 1) and old age (time 2).
In her youth, she has $8,000 in cash. She can borrow and lend at the bank at a rate of 15% between time 1 and time 2.
Her only investment opportunity other than the bank is a project that costs $5,000 now in her youth and has a payoff of $6,000 in her old age.
Alternative A:
We will use the final value formula.
FV= Present Value*(1+i)^n
FV= 8000*(1.15)^1= $9200
Alternative B:
Receive $6000
Invest 3000= 3000*(1.15)^1= 3450
Total= $9450
The second alternative is the one that will allow her to consume more in her old age.
Which of the following is NOT true of a demand curve?
A. It has negative slope.
B. It shows the amount consumers are willing and able to purchase at various prices, holding other factors constant.
C. It relates the price of an item to the quantity demanded of that item.
D. It shows how an increase in price leads to an increase in quantity demanded of a good.
D. it shows how an increase in price leads to an increase in quantity demanded of a good.
The statement which is not true about the demand curve is it shows that an increase in price leads to an increase in the quantity demanded of a good. Thus, the correct answer is D.
What is the Demand curve?The demand curve depicts the relationship between the price of a commodity or service offered and the quantity demanded over time. This shows that demand for goods falls when a rise in the price has been observed.
The factors which affect the demand curve are the price of any product, income earned by the customer, amount of substitute goods, and availability of supply based on expectations of the future.
Therefore, option D increase in price leads to an increase in quantity is the correct answer which is not true about the demand curve.
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The price of imported oil rises. If the government wanted to stabilize output, which of the following could it do?
a. increase government expenditures or increase the money supply
b. increase government expenditures or decrease the money supply
c. decrease government expenditures or increase the money supply
d. decrease government expenditures or decrease the money supply
Answer:
The correct answer is letter "A": increase government expenditures or increase the money supply.
Explanation:
Fiscal policy refers to the joint governmental decisions concerning taxation and spending of a nation. The term was coined by the British economist John Maynard Keynes (1883-1946) who claimed that governments could control rates of macroeconomic growth by raising the rate of employment, battling inflation and flattening business cycles.
Whether increasing government expenses or money supply, the overall economy will be balanced as long as the prices are going up as well.
Suppose that an increase in capital per hour worked from $15,000 to $20,000 increases real GDP per hour worked by $500. If capital per hour worked increases further to $25,000, by how much would you expect real GDP per hour worked to increase if there are diminishing returns?
a. by exactly $500
b. by less than $500
c. by more than $500 but less than $5,000
d. by more than $5,000 but less than $20,000
Answer:
B
Explanation:
If GDP increased $500 when the capital per hour increased $5,000, then if the capital per hour increases another $5,000, GDP should increase in $500 more. But the capital productivity has diminishing returns, which means that the increase in marginal productivity decreases as the capital per hour grows.
For example, if the capital per hour is $1,000 and there is an increase in one unit of it ($1,001), the GDP first will increase 0,3 units, if there is another increase in one unit ($1,002), GDP will increase in 0,29 units, if there is an increase in another unit ($1,003) GDP will increase in 0,28 units, and so on. Notice that GDP still increases but in a lower rate.
In this case, the first increase of the capital per hour of $5,000 produced an increase in $500 in the GDP, but because each extra unit will increase less the GDP, we can expect that another increase in capital per hour of $5,000 will traduce in an increase by less than $500 in the GDP.
Factors of production are
(A) the mathematical calculations firms make in determining their optimal production levels.
(B) social and political conditions that affect production.
(C) the physical relationships between economic inputs and outputs.
(D) inputs into the production process.
Answer: Factors of production are "(D) inputs into the production process."
Explanation:The factors of production or inputs are the goods or services that are used to produce other goods or services. There are four types of production factors: land, labor, capital and technology.
With these companies produce other goods or services.
A reduction in transaction costs will tend to
(A) reduce the number of mutually beneficial exchanges that occur.
(B) make specialization according to the law of comparative advantage more difficult.
(C) decrease the value created by exchanges in an economy.
(D) increase the number of mutually beneficial exchanges that occur.
Answer:
increase the number of mutually beneficial exchanges that occur.
Explanation:
When you reduce the transactions cost, the number of transactions increase, it means that every agent it’s benefit, because the buyer could afford more transactions and the seller could reduce the price of their products or services that are included in the purchase. Even the agent it's in charge of the transaction its benefit too, because the number of transactions increase due to the increase of the demand.
One of the trade-offs Tesla faces is between safety and the maximum range someone can drive an all-electric car before having to recharge it. For example, adding steel to a car makes it safer but also heavier, which results in fewer mileage between recharges. Assume that this trade-off is consistent with increasing costs of added safety. Draw a hypothetical production possibilities frontier that Tesla engineers face that show this trade-off.
Answer:
A creation conceivable outcomes outskirts demonstrates the most extreme sum that an economy can deliver.
Explanation:
The creation plausibility outskirts is a marginalist model that mirrors the most extreme amounts of merchandise and ventures that a nation or endeavour is fit for delivering in a given period and dependent on certain generation factors and innovative learning. Hence there are three circumstances in the profitable structure of a nation or endeavour:
Inefficient beneficial structure: When it is underneath the PPF, that is, either all assets are not utilized (inactive assets), or the innovation isn't satisfactory. Efficient beneficial structure: It is situated before the fringe or near it. There are no inactive assets and the best innovation is being utilized. Unattainable beneficial structure: It is over the generation potential outcomes. It is hypothetical since no nation or endeavour can deliver past its ability.Stone Beauty, Inc. is a merchandiser of stone ornaments. The company sold 7 comma 500 units during the year. The company has provided the following information: Sales Revenue $ 554 comma 000 Purchases (excluding freight in) 304 comma 000 Selling and Administrative Expenses 66 comma 000 Freight In 13 comma 000 Beginning Merchandise Inventory 44 comma 000 Ending Merchandise Inventory 43 comma 000 What is the cost of goods available for sale for the year?
Answer:
Cost of goods available for sale 344,000
Cost of goods sold 301,000
Explanation:
cost of goods available for sale :
Is the sum of all tehcost that the firm could have sold during the period.
Is the sum of beginning inventory (goods from prior periods) and the purchase done in the period
beginning inventory + purchase
beginnning inventory 44,000
purchase = 304,000
Cost of goods available for sale 344,000
Then, cost of goods available for sale - ending inventory = COGS
344,000 - 43,000 = 301,000 COGS
Answer:
The cost of goods available for sale for the year is $317,000
Explanation:
The computation of the cost of goods available for sale for the year is shown below by applying the formula:
= Beginning Merchandise Inventory + Purchases (excluding freight in) + Freight In - Ending Merchandise Inventory
= $44,000 + $304,000 + $13,000 - $43,000
= $317,000
The remaining items which are given in the question are not be considered in the computation part because the items are used for computing the net income, not for cost of goods available for sale for the year
Consider the widget exchange. Suppose that each widget contract has a market value of $0 and a notional value of $100. There are three traders, A, B, and C. Over one day, the following trades occur: A long, B short, 5 contracts. A long, C short, 15 contracts. B long, C short, 10 contracts. C long, A short, 20 contracts. What is trader B's net position in the contract at the end of the day?
Answer:
The trader B's net position in the contract at the end of the day is 5 long position contract
Explanation:
The computation of net position for the trader B is shown below:
Net position = Long position - short position
= 10 long position contracts - 5 short position contracts
= 5 long position contract
The other traders are irrelevant because we have to find out the net income for traders B only. Hence, all other information is ignored
Final answer:
Trader B's net position at the end of the day is 5 contracts long, calculated by subtracting the shorted 5 contracts from the 10 contracts bought long.
Explanation:
The student's question relates to finding trader B's net position in a contract market at the end of the day after a series of trades have been made between three traders. To compute this, we need to tally the long and short positions that B has engaged in during the trading day.
Firstly, when B trades short, this is a promise to deliver a commodity at a later date, and when B trades long, this is a commitment to receive the commodity. To tally B's position, we calculate the difference between B's long and short positions:
B short 5 contracts to A.
B long 10 contracts from C.
Trader B's net position is the difference between the long and short contracts:
Net Position = Long positions - Short positions
Net Position = 10 contracts - 5 contracts
Net Position = 5 contracts long
Therefore, at the end of the trading day, trader B has a net position of being 5 contracts long.
At the beginning of the year (January 1), Buffalo Drilling has $10,000 of common stock outstanding and retained earnings of $7,500. During the year, Buffalo reports net income of $7,800 and pays dividends of $2,500. In addition, Buffalo issues additional common stock for $7,300. Required: Prepare the statement of stockholders' equity at the end of the year (December 31).
Answer:
Explanation:
For preparing the statement, first we have to compute the ending balance of the common stock and the retained earning
Ending balance of the common stock = Beginning balance + Additional common stock issued
= $10,000 + $7,300
= $17,300
Ending balance of the retained earnings = Beginning balance + Net income - dividend paid
= $7,500 + $7,800 - $2,500
= $12,800
So, the total stockholder equity = Ending balance of the common stock + Ending balance of the retained earnings
= $17,300 + $12,800
= $30,100
The statement of stockholder equity is shown in the spreadsheet. Kindly find the attachment below.
The statement of stockholders' equity for Buffalo Drilling at year-end will show common stock of $17,300 and retained earnings of $12,800, totaling $30,100 in stockholders' equity.
Explanation:Statement of Stockholders' EquityTo prepare the statement of stockholders' equity for Buffalo Drilling at the end of the year, one must perform a few calculations to determine the changes in the equity accounts throughout the year. The opening balances of common stock and retained earnings and the transactions during the year will be included.
At the beginning of the year:
Common stock: $10,000Retained earnings: $7,500Changes during the year:
Net income: +$7,800Dividends paid: -$2,500Issue of additional common stock: +$7,300Ending balances on December 31 will be:
Common stock: $10,000 + $7,300 = $17,300Retained earnings: $7,500 + $7,800 (net income) - $2,500 (dividends) = $12,800So the statement of stockholders' equity will show:
Common stock: $17,300Retained earnings: $12,800The total stockholders' equity at the end of the year will be the sum of common stock and retained earnings, which amounts to $30,100.
Cotton White, Inc., makes specialty clothing for chefs. The company reported the following costs for 2015:
Factory rent $ 37,700
Company advertising 25,500
Wages paid to seamstresses 76,800
Depreciation on salespersons' vehicles 30,600
Thread 1,030
Utilities for factory 24,700
Cutting room supervisor's salary 30,300
President’s salary 76,500
Premium quality cotton material 40,200
Buttons 835
Factory insurance 18,500
Depreciation on sewing machines 7,400
Wages paid to cutters 50,000
Required:
1. Compute the cost of direct materials for Cotton White.
2. Compute the cost of direct labor for Cotton White.
3. Compute the cost of manufacturing overhead for Cotton White.
4. Compute the total manufacturing cost for Cotton White.
5. Compute the prime cost for Cotton White.
6. Compute the conversion cost for Cotton White.
7. Compute the total period cost for Cotton White.
The cost computations for Cotton White, Inc., include direct materials of $42,065, direct labor of $126,800, manufacturing overhead of $118,600, total manufacturing cost of $287,465, prime cost of $168,865, conversion cost of $245,400, and total period cost of $132,600.
Explanation:The student is asking to compute various costs incurred by Cotton White, Inc., including direct materials, direct labor, manufacturing overhead, total manufacturing cost, prime cost, conversion cost, and total period cost.
Direct materials cost: This includes all the raw materials used in the production that can be directly traced to the goods being produced. In this case, it is the sum of the cost of premium quality cotton material ($40,200), thread ($1,030), and buttons ($835), which equals $42,065.Direct labor cost: This represents the cost of wages paid to employees who directly work on the products. For Cotton White, this includes wages paid to seamstresses ($76,800) and cutters ($50,000), totaling $126,800.Manufacturing overhead cost: This includes all production costs except direct materials and direct labor. Here, it is the sum of factory rent ($37,700), utilities for the factory ($24,700), cutting room supervisor's salary ($30,300), factory insurance ($18,500), and depreciation on sewing machines ($7,400), totaling $118,600.Total manufacturing cost: It is the sum of direct materials, direct labor, and manufacturing overhead, coming to $287,465.Prime cost: This is the sum of direct materials and direct labor, which is $168,865.Conversion cost: This is the sum of direct labor and manufacturing overhead, totaling $245,400.Sam makes a deposit at the bank which is comprised of $5, $10, and $20 bills. If the number of $5 bills is three more than the number of $10 bills, the number of $20 bills is half the number of $5 bills, and his total deposit is $270, how many bills of each type did he deposit?
Answer:
Number of $5 bills= 12
Number of $10 bills= 9
Number of $20= 6
Explanation:
Giving the following information:
Total deposit= $270
$5 bills are three more than the number of $10 bills.
The number of $20 bills is half the number of $5 bills.
x1= number of $5 bills
x2= number of $10 bills
x3= number of $20 bills
x1=3+x2
x3=x1/2
The function to calculate the number of bills is:
Total number of bills= (3+x2)*$5 + x2*$10+ (x1/2)*$20
n $x1 n $x2 n $x3
4 20 1 10 2 40 70
5 25 2 20 2,5 50 95
6 30 3 30 3 60 120
7 35 4 40 3,5 70 145
8 40 5 50 4 80 170
9 45 6 60 4,5 90 195
10 50 7 70 5 100 220
11 55 8 80 5,5 110 245
12 60 9 90 6 120 270
x1= 12
x2= 9
x3=6
To solve the problem, we set up an equation using the variable x to represent the number of $10 bills. After following a series of algebraic steps, we find that Sam deposited 12 $5 bills, 9 $10 bills, and 6 $20 bills.
Let's represent the number of $10 bills that Sam has as x. According to the problem, the number of $5 bills is three more than the number of $10 bills, and the number of $20 bills is half the number of $5 bills. Therefore, we have:
Number of $5 bills: x + 3Number of $10 bills: xNumber of $20 bills: (x + 3) / 2These bills add up to a total of $270, which we can express in the following equation:
5(x + 3) + 10x + 20((x + 3) / 2) = 270
Solving this equation:
5x + 15 + 10x + 10(x + 3) = 2705x + 15 + 10x + 10x + 30 = 27025x + 45 = 27025x = 225x = 9From x, we can find:
Number of $10 bills: 9Number of $5 bills: 9 + 3 = 12Number of $20 bills: (12) / 2 = 6Sam deposited 12 $5 bills, 9 $10 bills, and 6 $20 bills.
How much cash does the firm actually have? You are Olivia, a financial analyst who works for an investment bank in downtown Denver, Colorado. You are analyzing the current cash condition of Sukam Inc. You have the following information from the company's financial reports: The company reported net sales of $5,000 million. Assume that there were no noncash sales. Operating costs (excluding depredation and amortization) were 65% of its total revenues. Depreciation and amortization charges were 5% of total sales. Interest charges were 15% of EBIT with a tax rate of 40%. is the money that the business is left with after paying operating expenses, interest expense, and taxes. However, because some revenues and expense are not cash transactions, net cash flow indicates the true cash flow situation of the company. The company's current cash flow is: $1,275 million $765 million $1,015 million $506 million
Answer:
Net profit= $765000 million
Explanation:
Giving the following information:
The company reported net sales of $5,000 million.
Operating costs (excluding depredation and amortization) were 65% of its total revenues.
Depreciation and amortization charges were 5% of total sales. Interest charges were 15% of EBIT with a tax rate of 40%.
Revenues= 5000000
Operating costs= (5000000*0.65)= (3250000)
EBITDA= 1750000
Depreciation and amortization= (50000000*0.05)= (250000)
EBIT= 15000000
Interest= (1500000*0.15)= (225000)
Tax= (15000000-225000)*0.40= (510000)
Net profit= $765000 million
Debt ratios measure the proportion of total assets financed by a firm’s creditors. Sunny Co. has a debt-to-equity ratio of 4.00, compared to the industry average of 3.20. Its competitor Carter Co., however, has a debt-to-equity ratio of 6.00. Based on what debt-to-equity ratios imply, which of the following statements is true? Carter Co. has greater financial risk as compared to Sunny Co. and to the average financial risk in the industry. Sunny Co.’s shareholders expect magnified returns but higher risk as compared to Carter Co. Carter Co.’s creditors face lesser risk than the average financial risk in the industry. Carter Co. has higher creditworthiness as compared to Sunny Co.
Answer:
Carter Co. has greater financial risk as compared to Sunny Co. and to the average financial risk in the industry.
Explanation:
Since the industry average is 3.20
Provided Debt to Equity is
Sunny Co. 4.00
Carter Co. 6.00
Since debt to equity represents the financial risk associated with the product.
It is clear that both the companies are on a higher financial risk than that of the industry.
Further the company is still in a better position than that of the competitor, as the later has higher debt to equity ratio.
Therefore, the first statement concluding that the financial risk of Carter Co. is highest of all including the competitor and the industry average is True.
Lemony Company made sales of $ 32 comma 200 million during 2018. Cost of goods sold for the year totaled $ 12 comma 880 million. At the end of 2017, Lemony's inventory stood at $ 1 comma 200 million, and Lemony ended 2018 with inventory of $ 1 comma 600 million. Compute Lemony's gross profit percentage and rate of inventory turnover for 2018. Begin by computing Lemony's gross profit percentage for 2018. (Round your answer to the nearest tenth of a percent, X.X%.) Lemony's gross profit percentage for 2018 is %.
To find Lemony Company's gross profit percentage for 2018, we subtract the cost of goods sold from the total sales to get the gross profit and then divide it by the total sales. The calculation shows that the gross profit percentage for 2018 is 59.9%.
Explanation:To calculate the gross profit percentage, we first need to determine the gross profit in dollars. Gross profit is calculated by subtracting the cost of goods sold (COGS) from total sales. In this scenario, the total sales are $32,200 million and the cost of goods sold is $12,880 million. Therefore, the gross profit is calculated as follows:
Gross Profit = Total Sales - Cost of Goods Sold
Gross Profit = $32,200 million - $12,880 million
Gross Profit = $19,320 million
Next, to find the gross profit percentage, we divide the gross profit by the total sales and multiply by 100 to convert it to a percentage:
Gross Profit Percentage = (Gross Profit / Total Sales) × 100
Gross Profit Percentage = ($19,320 million / $32,200 million) × 100
Gross Profit Percentage = 59.9%
Therefore, Lemony's gross profit percentage for 2018 is 59.9%.
The capital investment cost for a switchgrass-fueled ethanol plant with a capacity of 250,000 gallons per year is $2,000,000. The costcapacity factor for this particular plant technology is 0.67 for capacities ranging from 200,000 gallons per year to 500,000 gallons per year. What is the estimated capital investment for a similar ethanol plant with a capacity of 400,000 gallons per year? Please only fill in the number of your calculated result in the blank, e.g., if the result is $100, fill in "100"; also round to the nearest integer.
Answer:
$2,740,251.24
Explanation:
Applying power sizing technique or an exponential model to determine the cost of new boiler.
This model identify the cost variation along with change in capacity or power of the equipment.
[tex]\frac{C_{A} }{C_{B} } =(\frac{S_{A}}{S_{B}})^{x}[/tex]
Where,
Cb = Cost of new plant
Sa = capacity of new plant
Sb = capacity of old plant
x = cost capacity factor
Therefore,
[tex]\frac{C_{A}}{2,000,000} =(\frac{400,000}{250,000})^{0.67}[/tex]
[tex]C_{A}=2,000,000\times\frac{400,000}{250,000}[/tex]
= 2,000,000 × 1.3701
= $2,740,251.24