Answer:
B. Leary's total stockholders' equity decreased $115,000.
Explanation:
When a company purchases its previously issued stocks, this is called Treasury Stocks. These becomes stocks issued but not part of the outstanding stocks and are not included in the computation of Earnings Per Share. When Treasury Stock is presented in the Stockholder's Section of the Balance Sheet, this is deducted from the total Stockholder's Equity, notwithstanding the par value of the common stock.
Horton Co. was organized on January 2, 2014, with 500,000 authorized shares of $10 par value common stock. During 2014, Horton had the following capital transactions:
January 5-issued 375,000 shares at $14 per share.
July 27-purchased 25,000 shares at $11 per share.
November 25-sold 18,000 shares of treasury stock at $13 per share.
Horton used the cost method to record the purchase of the treasury shares. What would be the balance in the Paid-in Capital from Treasury Stock account at December 31, 2014?
Answer:
The balance in the Paid-in Capital from Treasury Stock account at December 31, 2014 is $36,000
Explanation:
The computation of the balance in the treasury stock account is shown below:
= Number of shares sold × (Selling price of share - purchase price of share)
= 18,000 shares × ($13 per share - $11 per share)
= 18,000 shares × $2 per share
= $36,000
The other items which are mentioned like issued shares, authorized shares are irrelevant because we have to compute for the treasury stock, not for the common stock. So, these parts would be ignored in the computation part.
The balance in the Paid-in Capital from Treasury Stock account at December 31, 2014 can be calculated by considering the capital transactions of Horton Co. during the year.
Explanation:The balance in the Paid-in Capital from Treasury Stock account at December 31, 2014 can be calculated by considering the capital transactions of Horton Co. during the year.
On January 5, 375,000 shares were issued at $14 per share, resulting in an increase in Paid-in Capital. On July 27, 25,000 shares were purchased at $11 per share. Since the cost method was used, this transaction does not impact Paid-in Capital from Treasury Stock. On November 25, 18,000 shares of treasury stock were sold at $13 per share, resulting in a decrease in Paid-in Capital from Treasury Stock.
To calculate the balance, we need to subtract the decrease in Paid-in Capital from Treasury Stock from the increase in Paid-in Capital. Therefore, the balance would be the increase from the January 5 transaction, which is (375,000 shares x $14 per share) minus the decrease from the November 25 transaction, which is (18,000 shares x $13 per share).
5. On December 5, CWM paid the $230 telephone bill accrued for November. 6. On December 11, CWM purchased two computers from Dell Inc. for $4,900 each. CWM paid $400 down with a check; the remaining balance is due in 30 days (n/30). Each computer has an estimated life of two years and a salvage value of $50 each. What are the correct journal entries for these transactions?
Answer:
utilities payable 230
cash 230
to record payment of November bill
Computer 9,800
Cash 400
Account payable 9,400
to record purchase of computers
Explanation:
we will credit cash for the amount paid to cancel the tlephone invoice.
We will write-off the payable recognize in Novemeber when the invoice was received.
We will debit the acquired assets (computer)
credit the amount of cash given
and then credit the remainder to recognize the obligation to pay these computers in the near future.
There are four steps in the manufacturing process of a stuffed toy: cutting, stuffing, sealing, and packaging. There are two employees each for cutting and stuffing but one each for sealing and packaging. The processing times of cutting, stuffing, sealing, and packaging are 8, 5, 3, and 2 seconds per toy. What is the capacity in toys per minute at the resource "stuffing"?
Answer:
The capacity of the resource "stuffing" is 24 toys/minute
Explanation:
We can define the capacity of any of thes process as
Capacity = (Number of workers)/(Processing time)
In the case of the resource “stuffing”, we have two workers and a processing time of 5 seconds.
The capacity is then :
Capacity = (Number of workers)/(Processing time)
Capacity = (2)/(5 s) = 0.4 toys/second = 24 toys/minute
Cash flows during the first year of operations for the Harman-Kardon Consulting Company were as follows: Cash collected from customers, $375,000; Cash paid for rent, $47,000; Cash paid to employees for services rendered during the year, $127,000; Cash paid for utilities, $57,000. In addition, you determine that customers owed the company $67,000 at the end of the year and no bad debts were anticipated. Also, the company owed the gas and electric company $2,700 at year-end, and the rent payment was for a two-year period. Calculate accrual net income for the year.
Answer:
Net Income for the year 234.500
Explanation:
Income Cash collected 375.000
Income Customer Owed 67.000
Total Income 442.000
Expenses Employees 127.000
Utilities 57.000
Rent 23.500 The effect on results of for 1 year was paid for 2 years in advance.
Total Expenses 207.500
Net Income 234.500
Molteni Motors Inc. recently reported $3.25 million of net income. Its EBIT was $6.25 million, and its tax rate was 35%. What was its interest expense? (Hint: Write out the headings for an income statement and then fill in the known values. Then divide $3.25 million net income by 1 − T = 0.65 to find the pre-tax income. The difference between EBIT and taxable income must be the interest expense.) Enter your answer in dollars. For example, an answer of $1.2 million should be entered as 1,200,000. Round your answer to the nearest dollar.
Answer:
Interest= $1250000
Explanation:
We know that:
EBIT
interest (-)
=earnings before taxes
tax (-)
=Net profit
EBIT= 6250000
Interest= ?
t= 0,35
Net profit= 3250000
interest= [netprofit/(1-t)]- EBIT
interest= (3250000/0,65)-6250000
interest= 1250000
Tax=(EBIT-interest)*0,35= 1750000
To calculate the interest expense, we can use the formula: Interest Expense = EBIT - Taxable Income. Using the given values, the interest expense is $1.25 million.
Explanation:To find the interest expense, we can use the formula:
Interest Expense = EBIT - Taxable Income
First, we need to calculate the taxable income by dividing the net income by (1 - tax rate):
Taxable Income = Net Income / (1 - Tax Rate)
Substituting the given values, we have:
Taxable Income = $3.25 million / (1 - 0.35) = $5 million
Next, we can calculate the interest expense by subtracting the taxable income from EBIT:
Interest Expense = EBIT - Taxable Income
Interest Expense = $6.25 million - $5 million = $1.25 million
Therefore, the interest expense is $1.25 million.
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On January 1, 2016, Jacob Inc. purchased a commercial truck for $48,000 and uses the straight-line depreciation method. The truck has a useful life of eight years and an estimated residual value of $8,000. On December 31, 2018, Jacob Inc. sold the truck for $30,000. What amount of gain or loss should Jacob Inc. record on December 31, 2018?
A.Loss, $3,000.
B.Loss, $18,000.
C.Gain, $22,000.
D.Gain, $5,000.
Answer:
D.Gain, $5,000.
Explanation:
Truck Value = $48,000
Annual depreciation = ( $48,000 - $8,000) / 8 = $40,000 / 8= $5,000
First year (2013) = $40,000 - $5,000 = $35,000
Second year (2014) = $35,000 - $5,000 = $30,000
Third year (2015)= $30,000 - $5,000 = $25,000
Gain = Sale Value - Truck Value (actual) = $30,000 - $25,000 = $5,000
In the AD partnership, Allen's capital is $140,000 and Daniel's is $40,000 and they share income in a 3:1 ratio, respectively. They decide to admit David to the partnership. Each of the following questions is independent of the others.
Refer to the information provided above. What amount will David have to invest to give him one-fifth percent interest in the capital of the partnership if no goodwill or bonus is recorded?
A. $60,000
B. $36,000
C. $50,000
D. $45,000
Answer:
The correct option is (D)
Explanation:
Given:
Allen's capital = $140,000
Daniel's capital = $40,000
Total capital before admitting David = $180,000
David's interest in partnership is 1/5 or 20%. So Allen and Daniel's capital will now be 80%.
Required capital after admitting David = [tex]\frac{180,000}{0.8}[/tex]
= $225,000
David's investment = 225,000 - 180,000
= $45,000
Therefore, David's investment in partnership is $45,000
You have been assigned to make a recommendation about whether to build a factory manufacturing facility in Arkansas or New Jersey. Average production is estimated at 60,000 units per year. Estimations for cost factors were observed by obtaining cost data over the past year. Fixed costs including the financing of building and equipment, property taxes and insurance as well as overhead staff. Variable costs include repair product development, direct labor, shipping in and out. Our analysis indicated the following costs: Arkansas New Jersey Fixed $3,753,000 $2,221,000 Variable $52.73 $74.99 The difference in cost for production between New Jersey and Arkansas when manufacturing 75000 units is
Answer:
The differential cost is $4,369,250 in favor of New Jersey
Explanation:
Giving the following information:
Arkansas:
Fixed costs=$3,753,000
Variable costs= $52.73
New Jersey:
Fixed costs= $2,221,000
Variable costs= $14.99
If the production is 75000 units
Arkansas= 3753000+ 52.73*75000= $7707750
New Jersey= 2221000+14.9*75000= $3338500
The differential cost is $4,369,250 in favor of New Jersey
In the LMN partnership, Lynn's capital is $60,000, Marty's is $80,000, and Nancy's is $70,000. They share income in a 4:3:3 ratio, respectively. Nancy is retiring from the partnership. Each of the following questions is independent of the others.
Refer to the above information. Nancy is paid $76,000, and all implied goodwill is recorded. What is the total amount of goodwill recorded?
A. $20,000
B. $14,000
C. $6,000
D. $0
Answer:
A. $20,000
Explanation:
Lynn 60,000
Marty 80,000
Nancy 70,000
Total 210,000
The buyout for nancy consist in:
capital balance + Nancy share of unrecorded goodwill
76,000 = 70,000 + 6,000 nancy goodwill
Nnacy share income ratio is 30% so total goodwill is:
6,000/30% = 6,000 / 0.3 = 20,000
The journal entry will be:
goodwill 20,000
Nancy Account 70,000
Cash 76,000
Lynn 8,000
Marty 6,000
Consider a market where: Consumer surplus is 250 Producer surplus is 125. If both consumer surplus and producer surplus are maximized, what is the amount of the deadweight loss? 0 0. (round your answer to the nearest penny) Next, suppose that consumer surplus falls to 180, but producer surplus rises to 155. What is the change in welfare? -35225 negative 25 (round your answer to the nearest penny and add the minus sign if necessary).
Answer:
A. Deadweight loss = 125 units.
B. Deadweight loss = 25 units.
Explanation:
In a free market and completely efficient economy, the consumer surplus equals the producer surplus. Both benefits of free trade. When consumers o producers have a minor surplus, necessarily implies a loss on eficiency, usually caused by government regulations like taxes or price ceilings.
The amount of welfare lost is measure by the difference between consumer and producer surplus.
In the first case:
|Consumer surplus - producer surplus| = 25 units
|250- 125| = 125 units
And in the second case:
|180- 155| = 25 units
When both consumer surplus and producer surplus are maximized, there is no deadweight loss. The change in welfare is calculated as the difference between the initial and the final total surplus.
Explanation:When both consumer surplus and producer surplus are maximized, there is no deadweight loss. Deadweight loss occurs when the economy produces at an inefficient quantity and results in a reduction in total surplus. In the given scenario, since both consumer surplus and producer surplus are maximized, there is no deadweight loss, so the amount of deadweight loss is 0.
When consumer surplus falls to 180 and producer surplus rises to 155, we can calculate the change in welfare. The change in welfare is the difference between the initial total surplus and the final total surplus. Initial total surplus = Consumer surplus + Producer surplus = 250 + 125 = 375. Final total surplus = Consumer surplus + Producer surplus = 180 + 155 = 335. The change in welfare is the difference between the initial and final total surplus: 375 - 335 = 40.
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If potential output equals 3,000 and short-run equilibrium output equals 3,500, there is a(n) ______ gap and the Federal Reserve must _____ real interest rates in order to close the gap.
A. recessionary; raise B. recessionary; lower C. recessionary; not change D. expansionary; raise
Answer:
D. expansionary; raise
Explanation:
In order to maintain the equilibrium, in this case,
The Federal Reserve will opt for expansionary monetary policies, under which the real interest rates will be increased by the Federal Reserve.
As the output is less than the equilibrium output, by increasing the real interest rates, the equilibrium can be achieved.
Assume that you are the manager of a firm. You are concerned about a potential increase in interestrates because it would reduce the demand for your products. Currently, economic growth is high, butannual inflation has increased from 3 percent to 5 percent within the last six months. The unemployment rate is very low and cannot go higher. The Federal Reserve (Fed) is meeting next week to assess economic conditions and set monetary policy.
(a) Given the current economic situation, should the Fed adjust or not adjust economic policy? If so, how? If not, why?
(b) Recently, the Fed has allowed the money supply to expand beyond its long-term target range. Does this affect your expectation of what the Fed will decide at its upcoming meeting?
(A) Concern about rising interest rates makes perfect sense, as the economy described is in a situation of overheating: high inflation, low unemployment and high economic growth. Rising inflation is a risk that requires the Fed to act to cool economic activity. This should be done through restrictive monetary policy instruments: raising interest rates and decreasing the monetary base, through the sale of government bonds and / or by increasing the banks' compulsory deposit with the Fed.
(B) This affects the credibility of the Fed, which is very bad. Economic agents base their expectations on Fed signals. If the money supply is higher than expected, real inflation will be higher than projected inflation. So expectations anchored in Fed forecasts will be dashed. This makes economic agents distrust future Fed projections.
Landen Corporation uses a job-order costing system. At the beginning of the year, the company made the following estimates: Direct labor-hours required to support estimated production 125,000 Machine-hours required to support estimated production 62,500 Fixed manufacturing overhead cost $ 350,000 Variable manufacturing overhead cost per direct labor-hour $ 3.80 Variable manufacturing overhead cost per machine-hour $ 7.60 During the year, Job 550 was started and completed. The following information is available with respect to this job: Direct materials $ 201 Direct labor cost $ 240 Direct labor-hours 15 Machine-hours 5 Required: 1. Assume that Landen has historically used a plantwide predetermined overhead rate with direct labor-hours as the allocation base. Under this approach: a. Compute the plantwide predetermined overhead rate. b. Compute the total manufacturing cost of Job 550. c. If Landen uses a markup percentage of 200% of its total manufacturing cost, what selling price would it establish for Job 550? 2. Assume that Landen’s controller believes that machine-hours is a better allocation base than direct labor-hours. Under this approach: a. Compute the plantwide predetermined overhead rate. b. Compute the total manufacturing cost of Job 550. c. If Landen uses a markup percentage of 200% of its total manufacturing cost, what selling price would it establish for Job 550?
The total manufacturing cost of Job 550 is the sum of direct materials cost, direct labor cost, and manufacturing overhead cost. The selling price for Job 550 is the total manufacturing cost multiplied by the markup percentage.
Explanation:To compute the plantwide predetermined overhead rate, you need to divide the total estimated manufacturing overhead costs by the total estimated allocation base. In this case, the allocated base is the direct labor-hours. So, the plantwide predetermined overhead rate can be calculated as $350,000 / 125,000 = $2.80 per direct labor-hour.
To compute the total manufacturing cost of Job 550, you need to add together the direct materials cost, direct labor cost, and manufacturing overhead cost. In this case, the direct materials cost is $201, the direct labor cost is $240, and the manufacturing overhead cost (calculated using the plantwide predetermined overhead rate) is $2.80 x 15 hours = $42. The total manufacturing cost of Job 550 is $201 + $240 + $42 = $483.
If Landen uses a markup percentage of 200% of its total manufacturing cost, the selling price for Job 550 would be calculated as $483 x 200% = $966.
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Final answer:
The plantwide predetermined overhead rates are calculated using direct labor-hours or machine-hours; Job 550's total manufacturing cost and selling price are determined based on these rates. Different production methods are analyzed for cost-effectiveness by comparing the total costs, which include labor and machine costs.
Explanation:
To compute the plantwide predetermined overhead rate using direct labor-hours, we sum the fixed manufacturing overhead cost ($350,000) with the variable cost per direct labor-hour ($3.80) multiplied by the total estimated direct labor-hours (125,000). The total manufacturing cost of Job 550 includes the direct materials, direct labor cost, and the applied overhead. When using a markup of 200% on the total manufacturing cost, the selling price for Job 550 is calculated accordingly. On the other hand, if machine-hours are used as the base for the plantwide predetermined overhead rate, the calculation involves the fixed manufacturing overhead cost and the variable cost per machine-hour ($7.60) multiplied by the total estimated machine-hours (62,500).
When evaluating different methods of production, the total costs including the cost of labor and machine are considered to determine the most cost-effective method. In the numerical examples provided, adjustments in the cost of machines affect the overall costs systematically, allowing comparison and selection of the optimal production method based on cost efficiency.
When thinking about a washing machine as a system, which of the following represents the inputs? Multiple Choice the dirty clothes, water, and detergent the clean clothes the wash and rinse cycle the light indicating that the washer is off balance and has stopped the buzzer indicating that the cycle is complete
Answer: The dirty clothes, water and detergent
Explanation: Inputs are the resources that are put into the system to attain a desired output, that may have a value to someone. The output is the final commodity that one get at the end of the system.
If we see washing machine as a system then the cleaned clothes are the output from that system. The resources that are used to get the clothes cleaned such as dirty clothes, water and detergent are the inputs.
Hence from the above we can conclude that the correct option is A.
In the AD partnership, Allen's capital is $140,000 and Daniel's is $40,000 and they share income in a 3:1 ratio, respectively. They decide to admit David to the partnership. Each of the following questions is independent of the others.
Refer to the information provided above. Allen and Daniel agree that some of the inventory is obsolete. The inventory account is decreased before David is admitted. David invests $40,000 for a one-fifth interest. What are the capital balances of Allen and Daniel after David is admitted into the partnership?
Allen Daniel
A) 140000 40000
B) 125000 35000
C) 120000 36000
D) 137000 39000
A. Option A
B. Option B
C. Option C
D. Option D
Answer: Option (B) is correct.
Explanation:
Capital contribution by David = $40,000
Interest of David in partnership = [tex]\frac{1}{5}[/tex]
Total capital of the partnership after the admission of new partner:
= [tex]\frac{40,000}{\frac{1}{5} }[/tex]
= $200,000
Total capital of partnership before decreasing of obsolete inventory:
= $140,000 + $40,000 + $40,000
= $220,000
Therefore, value of decrease in inventory:
= Total capital before decrease - Total capital after decrease
= $220,000 - $200,000
= $20,000
The reduction in value of inventory will be distributed in old partners in ratio of 3:1
Hence,
Capital balance of Allen after admission of David:
= [tex]140,000 - 20,000\times\frac{3}{4}[/tex]
= $125,000
Capital balance of Daniel after admission of David:
= [tex]40,000 - 20,000\times\frac{1}{4}[/tex]
= $35,000
Jeremy is an effective leader who is capable of helping his subordinates complete their tasks. However, he is considered intimidating by some of his team members and is often unable to boost the group's morale. Jeremy feels that since his strengths are task oriented, management should place him as the leader of team members who need task-related guidance. Jeremy is a strong believer of which leadership theory or approach?
Answer:
Transactional leadership style
Explanation:
Transactional leadership style is where the leader is focused on the overall goals of the company and getting things done instead of building a more long term social relationship. The leader is focused on a more professional relationship which benefits all the involved parties in such a way that is limited to the company only.
Jane is a middle-aged woman fond of EpidermaNow's skincare products. These products are produced and marketed globally. EpidermaNow recently released a sun-screen lotion. Despite the lotion's high price and unproven effectiveness, Jane bought the lotion on the day of its release in the market. Given this information, Jane belongs to the segment of _____.
a. global citizens
b. global dreamers
c. antiglobals
d. global agnostics
Answer: Global citizens
Explanation: In simple words, an individual who have better understanding of the world operations than others are called global citizens. These individuals favor global activities with the perception that these will result in more equality around the world either directly or indirectly.
In the given case, Jane purchased a product because of its global nature despite of high prices. Therefore, she clearly is favoring globalization.
Hence, from the above we can conclude that the right option is A.
Layla works during her meeting to pull together the ideas of her committee members into a coherent whole. Layla is performing a ___________ role.a.Maintenanceb.Relationship-orientedc.Taskd.Social
Answer: C
Explanation:
Layla works during her meeting to pull together the ideas of her committee members into a coherent whole. Layla is performing a task . task, duty, job, chore, stint, assignment mean a piece of work to be done. task implies work imposed by a person in authority or an employer or by circumstance. charged with a variety of tasks duty implies an obligation to perform or responsibility for performance.
The correct answer is C. Task
Explanation:
In a group discussion, meeting or similar scenario, participants can have different roles. In the case of task roles, this refers to roles such as monitoring participation, gathering information or pulling ideas together to get to conclusions or find a solution, and even motivating participants. The activities belong to a task role because they help the group to achieve the main purpose or goal.
Layla is performing a task role because her action of pulling ideas together is a common task or activity in this role, also, this action helps the group to accomplish the goal considering without Layla doing this, the group would not get a complete and coherent idea of the ideas provided by all participants.
Baker Industries’ net income is $24,000, its interest expense is $5,000, and its tax rate is 25%. Its notes payable equals $24,000, long-term debt equals $80,000, and common equity equals $260,000. The firm finances with only debt and common equity, so it has no preferred stock. What are the firm’s ROE and ROIC? Do not round intermediate calculations. Round your answers to two decimal places.
Answer:
ROE = 9.23%
ROIC = 7.62%
Explanation:
Data:
Net Income NI = $24,000
Interest Expense IE = $5,000
Tax Rate T = 25% = 0.25
Notes Payable NP = $24,000
Long-term debt LTD = $80,000
Common Equity CE = $260,000
Return On Equity ROE = ?
Retrun On Invested Capital ROIC = ?
Earnings Before Taxes EBT = ?
Invested Capital IC = ?
Earnings Before Taxes and Interest EBIT = ?
Calculations:
[tex]ROE = \frac{NI}{CE}= \frac{24,000}{260,000}=0.0923 = 9.23[/tex]%
[tex]EBT = \frac{NI}{1-T} = \frac{24,000}{1-0.25} = \frac{24,000}{0.75} = 32,000[/tex]
[tex]EBIT = EBT+IE=32,000 + 5,000=37,000[/tex]
[tex]IC =NP+LTD+CE=24,000+80,000+260,000=364,000[/tex]
[tex]ROIC = \frac{EBIT*(1-T)}{IC} = \frac{37,000*(1-0.25)}{364,000}= \frac{37,000*(0.75)}{364,000}= \frac{27,750}{364,000}= 0.0762=7.62[/tex]%
Hope this helps!
Baker Industries has a Return on Equity (ROE) of 9.23% and a Return on Invested Capital (ROIC) of 7.69%, indicating its efficiency in generating profits from shareholder equity and overall capital.
Explanation:The question involves calculating Return on Equity (ROE) and Return on Invested Capital (ROIC) for Baker Industries. ROE measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested. ROIC measures how well a company is using its money to generate returns. Comparing these ratios helps understand Baker Industries' efficiency in generating profits from its equity and overall capital.
Calculation of ROE
ROE = (Net Income / Shareholder's Equity) * 100
Given Net Income = $24,000 and Shareholder's Equity = Common Equity = $260,000,
ROE = ($24,000 / $260,000) * 100 = 9.23%
Calculation of ROIC
ROIC = (Net Income + Interest Expense * (1 - Tax Rate)) / (Debt + Equity)
Given that Interest Expense = $5,000, Tax Rate = 25%, Total Debt = Notes Payable + Long-term Debt = $24,000 + $80,000, and Total Equity = $260,000,
ROIC = ($24,000 + $5,000 * (1 - 0.25)) / ($24,000 + $80,000 + $260,000) * 100 = 7.69%
Accounts Amounts Cash received from sale of products to customers $ 31,000 Cash received from the bank for long-term loan 36,000 Cash paid to purchase factory equipment (41,000 ) Cash paid to merchandise suppliers (10,200 ) Cash received from the sale of an unused warehouse 11,200 Cash paid to workers (22,200 ) Cash paid for advertisement (2,200 ) Cash received for sale of services to customers 21,000 Cash paid for dividends to stockholders (4,200 ) Assume the balance of cash at the beginning of the period is $3,200. Required: 1. Calculate the ending balance of cash.
Answer:
Ending cash balance : 22,600
Explanation:
operating activities:
collection from products 31,000
collection from services 21,000
merchandise suppliers (10,200)
wages paid (22,200)
advertisement paid (2,200)
generated from operating activities 17,400
financing activities:
loan from the bank 36,000
dividends paid (4,200)
cash generated from financing activities 31,800
investing activities:
sale of warehouse 11,200
purchase of equipment (41,000)
cash used in investing activities (29,800)
cash generated for the period 19,400
beginning cash balance 3,200
Ending cash balance 22,600
Here is financial information for Marin Inc. December 31, 2017 December 31, 2016 Current assets $110,400 $ 94,600 Plant assets (net) 404,600 354,400 Current liabilities 103,600 69,400 Long-term liabilities 126,400 94,600 Common stock, $1 par 134,400 119,400 Retained earnings 150,600 165,600 Prepare a schedule showing a horizontal analysis for 2017, using 2016 as the base year. (If amount and percentage are a decrease show the numbers as negative, e.g. -55,000, -20% or (55,000), (20%). Round percentages to 1 decimal place, e.g. 12.1%.)
Answer:
2,016 2,017 2017 as 2016 base
Current Assets 94,600 110,400 increase 17%
Plant Assets 354,400 404,600 increase 14%
Total Assets 449,000 515,000 increase 15%
Current Laibilities 69,400 103,600 increase 49%
Long-Term Liab 94,600 126,400 increase 34%
Common Stock 119,400 134,400 increase 13%
Retained Earnings 165,600 150,600 decrease -9%
Total L+SE 449,000 515,000 increase 15%
Explanation:
We will compare new year with the previous year, as percent.
(2017-2016)/2016
This will gives the variance per year
The following information is from the Income Statement of the Swifty Laundry Service:
Revenues
Service Revenues $4940
Expenses
Salaries and wages expense $ 1860
Advertising expense 380
Rent expense 230
Supplies expense 150
Insurance expense 80
Total expenses 2700
Net income $2240
The entry to close the Laundry Service Revenue account includes a:
Answer:
Explanation:
The journal entry for closing the laundry service revenue is shown below:
Laundry service revenue A/c Dr $4,940
To Income summary $4,940
(Being service revenue account closed)
We credit the income summary account because the service revenue is added while preparing the income statement. If there is a net income, so the revenue is excess than its expenses and if there is a net loss, so the expenses are excess than its income.
The entry to close the Laundry Service Revenue account for Swifty Laundry Service involves debiting the Service Revenues account and crediting the Income Summary account with $4940 to zero out the revenue for the period.
The entry to close the Laundry Service Revenue account includes a debit to the Service Revenues account and a credit to the Income Summary account. This is done to zero out the revenue account and transfer its balance to the Income Summary for the period.
At the end of the accounting period, Swifty Laundry Service would make the following journal entry:
Debit Service Revenues: $4940Credit Income Summary: $4940This entry reflects the closure of the revenue account, which moves the year's earnings into the Income Summary, preparing the company's books for the new accounting period.
Assume the demand for watermelons is downward sloping. A decrease in price from $3 per pound to $2 per pound
(A) could have been caused by an increase in supply.
(B) will cause an increase in supply.
(C) will cause a smaller quantity of watermelons to be demanded.
(D) will cause demand to decrease.
(E) will cause demand to increase.
Answer:
(E) will cause demand to increase.
Explanation:
The demand has a downward sloping, so it decrease as more price.
Therefore if the price is lower, the demand will increase, not decrease.
More persons will demand watermelons as the price decrease. That's because at lower price more people can afford watermelons.
A company has the following balances on December 31, 2018, after year-end adjustments: Accounts Receivable = $62,500; Allowance for Uncollectible Accounts = $6,200.
Calculate the net realizable value of accounts receivable
Answer: The net realizable value is the maximum value that can be achieved with the sale of the asset, discounting the costs associated with it.
The net realizable value (NRV) of accounts receivable would be:
NRV = Accounts Receivable - Allowance for Uncollectible Accounts
NRV = $ 62,500 - $ 6,200
NRV = $ 56,300
Borrowed $60,000 from First American Bank and Trust by issuing a two-year note payable (Doc. No. 14) with a stated annual interest rate of 5%. Check No. 545 (Doc. No. 8) for $60,000 was received from the bank and deposited. Reviewed the terms and conditions of the note and signed it (Ray Kramer) as the borrower.
Ray Kramer's borrowing $60,000 from the bank reflects how banks operate. These loans become assets for the banks, as they generate interest income. This process contributes to the rise in bank deposits and allows further lending thus expanding the money supply in the economy.
Explanation:Ram Kramer borrowed $60,000 from First American Bank and Trust by issuing a two-year note payable with a 5% annual interest rate. This is similar to the example of Singleton Bank lending $9 million to Hank's Auto Supply. In both cases, the loans become assets for the banks as they will generate interest income. Based on this model, First National Bank's deposits would rise by the amount of the loan and the bank would likely have to hold a portion of these deposits as required reserves. The rest of the money could be loaned out again, increasing the money supply in the economy. This process is a key part of how banks operate and contribute to the economy.
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The manager of an ice-cream parlor decides to introduce a new ice-cream flavor in his Dallas, TX based restaurants to compare the sales of these restaurants to the ones with no new flavors. She decides to run a difference in difference approach. Which of the following is true?
(A) The first difference would be the difference in the sales of the Dallas stores before and after the introduction
(B) The second difference would be the difference in the sales in other stores before and after the Dallas stores introduced the new flavor
(C) The second difference would be the difference between the post introduction sales in the Dallas stores and the control group
(D) Only A&B
Answer:
(D) Only A&B
Explanation:
As with the introduction of new flavors, there will be an impact on sales, it might increase or it might decrease.
The impact would not only affect the store itself but would also impact on nearby stores.
Therefore, there will be difference in the sales count in value as well as units in current and previous months.
There will also be difference in between, the sales of stores nearby in previous month and current month after the launch of new flavor.
Final answer:
The correct answer to the question is that the first difference is the change in sales in the Dallas stores before and after the new ice-cream flavor introduction, and the second difference is between the post-introduction sales of the Dallas stores and a control group that did not introduce the flavor.
Explanation:
When the manager of an ice-cream parlor in Dallas, TX decides to use a difference in difference approach to compare sales, there are two key differences they will analyze:
The first difference would be the change in the sales of the Dallas stores before and after the introduction of the new flavor. This is captured by option (A).
The second difference, contrary to option (B), would actually be the difference in sales between the Dallas stores post-introduction of the new flavor and a comparison group/control group that did not introduce the new flavor, as stated in option (C).
Therefore, the correct answer would include options (A) and (C), as they describe the two steps in the difference in differences approach.
When a corporation issues its capital stock in payment for services, the least appropriate basis for recording the transaction is the
a. market value of the services received.
b. par value of the shares issued.
c. market value of the shares issued.
d. Any of these provides an appropriate basis for recording the transaction.
Answer:
B.) Par value of the share issued
Explanation:
This transaction just have to follow the rules of issuing stocks for non-cash assets. The rule is to record on the basis of MARKET VALUE of the services received or the MARKET VALUE of the shares issued whichever can be objectively determined.
The least appropriate basis would be the Par Value of the shares issued since the par value are usually significantly lower than its market value.
Par value are determined from the creation of the company and the company grows and increases its value.
Folsom Fashions sells a line of women's dresses. Folsom's performance report for November Year 1 follows.Actual : Dresses Sold: 5000, Sales 235,000, variable cost is 145,000 contribution margin is 90,000, fix cost is 84,000 and operating income is 6,000Budget: Dresses Sold: 6000, Sales 300,000, variable costs: 180000, contribution margin is 120,000, fixed costs is 80000, and operating income is 40,000The company uses a flexible budget to analyze its performance and to measure the effect on operating income of the various factors affecting the difference between budgeted and actual operating income.The variable cost flexible budget variance for November is:(A) $4,000 unfavorable.(B) $5,000 favorable.(C) $5,000 unfavorable.(D) $4,000 favorable.
Answer:
(B) $5,000 favorable.
Explanation:
Variable cost flexible budget variance:
budget for 6,000 units total variable cost: $180,000
We divide the total cost by the activity in that budget:
$180,000/ 6,000 = 30
Now we multiply by the actual volume:
5,000 x 30 = 150,000
Now we do flexible budget - actual cost = variance
150,000 - 145,000 = 5,000 favorable
It is favorable, as the cost where less than expected.
is the sole proprietor of Prestigious Pups, a business specializing in the sale of high-end pet gifts and accessories. Prestigious Pups' sales totaled $ 986 comma 000 during the most recent year. During the year, the company spent $ 58 comma 500 on expenses relating to website maintenance, $ 30 comma 500 on marketing, and $ 29 comma 100 on wrapping, boxing, and shipping the goods to customers. Prestigious Pups also spent $ 643 comma 000 on inventory purchases and an additional $ 19 comma 700 on freight-in charges. The company started the year with $ 16 comma 250 of inventory on hand and ended the year with $ 16 comma 800 of inventory. Prepare Prestigious Pups' income statement for the most recent year.
Answer:
Instructions are listed below
Explanation:
An income statement is one of the three important financial statements used for reporting a company's financial performance over a specific accounting period. The income statement focuses on the four key items - revenue, expenses, gains, and losses. It does not cover receipts (money received by the business) or the cash payments/disbursements (money paid by the business).
It follows the general structures:
Revenues (+)
Operating Revenue
Non-Operating Revenue
Total
Expenses (-)
Primary Activity Expenses
Secondary Activity Expenses
Total
Gains (+)
Losses (-)
Net income/loss
In this exercise:
sales totaled $ 986000
$58500 on expenses relating to website maintenance
$30500 on marketing
$29100 on wrapping, boxing, and shipping the goods to customers.
$643000 on inventory purchases
$19700 on freight-in charges.
started the year with $16250 inventory
ended the year with $ 16800 of inventory.
Revenues= 986000
Expenses (-)
Primary Activity Expenses:
Cost of goods sold= Initial inventory + purchase - ending inventory= $642450
wrapping, boxing, and shipping= $29100
Secondary Activity Expenses:
website maintenance=58500
marketing= $30500
freight-in charges= $19700
Total Expenses= $780250
Net income= $205750
Which of the following is true about the relationship between price and quantity supplied? There is always a direct relationship between price and quantity supplied. There is always an inverse relationship between price and quantity supplied. There is usually a direct relationship between price and quantity supplied. There is usually an inverse relationship between price and quantity supplied.
Answer:
There is always a direct relationship between price and quantity supplied.
Explanation:
If the product cost is given:
The higher the price, the higher the profit thus, more people willing to enter the business and more willingness to increase current production. Thus, there is an incentive to increase the quantity supplied. There is a direct relationship as both increases. There is no reason why this cannot be true under the circumstance proposed so, it always applpies