Answer:
Bad Debt Expense = $10,000
Explanation:
Using the percentage of credit sales method, estimated Bad Debt Expense for the year is
Bad Debt Expense = Net credit sales × Percentage of credit sales uncollectible
Given,
Net credit sales = $200,000
Percentage of credit sales = 5%
Putting the values into the formula, we can get
Bad Debt Expense = Net credit sales × Percentage of credit sales uncollectible
Bad Debt Expense = $200,000 × 5%
Bad Debt Expense = $10,000
As the company is using the Percentage of credit sales method, they do not need to adjust Allowance for Doubtful Accounts.
40. Using simple math, the Water Utility Fund of Eugene, Oregon has the following subtotals on its December 31, 2019 Statement of Net Position: Total Current and Accrued Assets, $2,000; Total Restricted Assets, $1,050; Net Utility Plant, $10,500; Other Assets, $60; Total Current Liabilities, $800; Liabilities payable from restricted assets, $250; and Long-term Liabilities, $7,900. How much would be the net position—Unrestricted? A. $1,200. B. $1,260. C. $950. D. $2,000.
Answer:
B. $1,260
Explanation:
The computation of the net position unrestricted is shown below
Unrestricted Net Position is
= Total Current and accrued Assets + Other assets - current liabilities
= $2,000 + $60 - $800
= $1,260
We simply added the other assets and deduct the current liabilities to the total current and accrued assets so that the amount could come in a correct way
Therefore all other information that is not considered is irrelevant. Hence, ignored it
5. Immediately after a used truck is acquired, a new motor is installed and the tires are replaced at a total cost of $5,750. Is this a capital expenditure or a revenue expenditure
Answer: Capital Expenditure
Explanation:
Capital Expenditure occurs if the expense made was to enhance the capability of an asset to perform the role for which it was acquired over an extended period of time.
The new motor and tires will go a long way in making sure that the Truck benefits the company over a long period of time and so should be considered CAPITAL EXPENDITURE.
Do comment if you need any further clarification.
Answer:
CAPITAL EXPENDITURE
Explanation:
In accounting, an expense carried out is considered to be capital expenditure when the asset is an investment with a life of more than one year or a newly purchased capital asset or an expense which improves the useful life of an existing capital asset.
Capital Expenditure is the money an organization or firm uses to purchase, maintain, upgrade or improve its fixed assets such as vehicles, production equipment, buildings or land.
Capital expenditures on fixed assets may include everything ranging from repairing a roof to building, to purchasing a new vehicle or upgrading a newly purchased used vehicle.
Therefore, the total costs of $5,750 used in the installation of a new motor and replacement of the tires are the CAPITAL EXPENDITURE.
Other examples of CAPITAL EXPENDITURE are costs of:
- Buildings (with costs to extend useful life)
- Land (with the cost of upgrading land e.g irrigation system setup, land clearing, etc)
- Machinery (with costs of transporting equipment to factory)
etc.
Fran’s Crazy Salts has just been bought by Allspice. Employees are unsure of what that will mean for their jobs, as Allspice already has a competent workforce. As a result, many employees have started to call out sick and have begun to look for other jobs. Fran’s Crazy Salts should use a change agent to addressa. evaluating the intervention.b. collecting feedback.c. revitalizing the organization.d. adapting to mergers.e. managing conflict.
Answer:
Option d is correct.
Adapting to mergers
Explanation:
The change agent has the activity close by to ingrain trust in the workforce by coming up unmistakably on the organisation's approach for the current workforce ( of past organisation) so they can make certain about their future with the organisation and decide their future strategy. Adapting to mergers is the correct choice as the change specialist needs to prepare the workforce work and submitted as ahead of schedule as could reasonably be expected.
Explain why a contractor will typically do almost anything in his power to prevent having the owner notify the bonding company that the contractor has failed to fulfill some of the provisions guaranteed by a bond.
Answer:
Default by Contractor
Explanation:
A contractor will typically prevent having the owner notify the bonding company all because the bonding company, upon notification by the obligee, is then required to make remedy to the owner in accord with the provisions of the bond instrument, up to a maximum of the face amount of the bond.
Answer:
Explanation:
Note that The contractor is said to be in default when he fails to fulfil one or more provisions that was guaranteed in a bond. (He didn't keep his own part of the bargain in the bond)
He will do everything within his power to ensure that the owner doesn't know this because Once the owner knows the bonding company of a default, the bonding company will fulfil the obligations as set forth in the bond instrument. The company will vigorously seek the principal which the bonding paid in fulfilling the provisions of the bond, and the contractor must pay out of his own pocket.
Universal Electronics, Inc. (UEI), which started operations one year ago, has two divisions: Consumer and Commercial. Both divisions invest heavily in R&D, which is assumed to benefit five years. R&D spending is made uniformly throughout the year. UEI has a cost of capital of 11 percent. Selected financial information for the two divisions (in thousands of dollars) for the year just completed follows. Consumer Commercial Sales revenue $ 22,000 $ 37,000 Divisional income 3,850 3,885 Divisional investment 27,500 27,750 Current liabilities 1,000 800 R&D 1,000 1,000 Required: Evaluate the performance of the two divisions assuming UEI uses return on investment (ROI).
Answer:
Investments in both divisions are performing equally well at the ROI of 14% each.
Explanation:
The financial data in the question are merged together and they are first sorted before the question is answered as follows:
Consumer ($) Commercial ($)
Sales revenue 22,000 37,000
Divisional income 3,850 3,885
Divisional investment 27,500 27,750
Current liabilities 1,000 800
R&D 1,000 1,000
The answers are now as follows:
Divisional ROI = Divisional income / Divisional investment
Consumer division ROI = $3,850 / $27,500 = 0.1400, or 14%
Commercial division ROI = $3,885 / $27,750 = 0.1400, or 14%
This shows that investments in both divisions are performing equally well at the ROI of 14% each.
Imagine that you are a management coach and one of your clients, a new manager, says, "I’ve heard that about two thirds of managers fail within 18 months. I don’t want to be part of that statistic! I’ve heard that asking questions and really listening to people’s responses is key to success. But as a manager, shouldn’t I have the answers? Why should I be asking questions?"
a. How do you respond? Check all that apply.
O asking employees how to solve problems empowers them to arrive at solutions to which they're committed.
O asking employees questions enhances their sense that the manager is the only person they should be in dialogue with, so they start talking less to each other.
O asking employees questions develop their critical thinking skills.
O asking employees questions boosts their morale by them feel like experts, even though they're not.
Answer:
I think 1 and 3
Explanation:
Management is the activity or the tasks that take place within the group of people holding some of the roles, responsibilities, and accountability to perform the tasks efficiently and effectively.
The correct answer is
Asking employees how to solve problems empowers them to arrive at solutions to which they're committed.Asking employees questions develop their critical thinking skills.These options are correct because these can be the question that the manager asks to evaluate the performance of the employees and by this, he can also get to the answer to the question about which he is in question.
Options:
Asking employees questions enhances their sense that the manager is the only person they should be in dialogue with, so they start talking less to each other.Asking employees questions boost their morale by them feel like experts, even though they're not.These are the wrong options because they do not specify the correct answer to the context and also do not provide the answer to the questions of the manager in the management process.
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Shelton Co. purchased a parcel of land six years ago for $858,500. At that time, the firm invested $130,000 in grading the site so that it would be usable. Since the firm wasn't ready to use the site itself at that time, it decided to lease the land for $46,500 a year. The company is now considering building a warehouse on the site as the rental lease is expiring. The current value of the land is $910,000. What value should be included in the initial cost of the warehouse project for the use of this land
Answer:
The current value of land = $910,000.
This should be included in the cost of warehouse project.
Explanation:
Before, answering this question, we need to understand few concepts:
Opportunity cost:
Opportunity costs represent the benefits an individual, investor or business misses out on when choosing one alternative over another. An opportunity cost is relevant to decision-making.
Sunk cost
A sunk cost refers to money that has already been spent and which cannot be recovered. Sunk costs are excluded from future business decisions because the cost will remain the same regardless of the outcome of a decision.
Relevant cost
Relevant costs and revenues are those costs and revenues that change as a direct result of a decision taken.
Relevant cost of non-current assets
The relevant costs associated with non-current assets, such as plant and machinery, are determined in a similar way to the relevant costs of materials.
Case 1:
If plant and machinery is to be replaced at the end of its useful life, then the relevant cost is the current replacement cost.
Case 2
If plant and machinery is not to be replaced, then the relevant cost is the higher of the sale proceeds (if sold) and the net cash inflows arising from the use of the asset (if not sold).
Solution:
We are under Case 1
The current value of land = $910,000.
This is the opportunity cost of the land in the warehouse project. If the project is not undertaken the land can be sold. This should be included in the cost of warehouse project.
Cost of land = $858,500 which is sunk cost.
The cost of upgradation = $130,000
It is also a cost incurred in past, so it is a sunk cost.
The lease rental = $46,500. The lease amount is irrelevant since the lease is expiring.
The value that should be included in the initial cost of the warehouse project for the use of the land is $279,000, which is the total rental income forgone over the six-year period.
Explanation:The value that should be included in the initial cost of the warehouse project for the use of the land is the opportunity cost of leasing the land for six years. The opportunity cost is the value of the best alternative forgone. In this case, the best alternative forgone is the rental income that Shelton Co. could have earned from leasing the land over the past six years.
To calculate the opportunity cost, we need to determine the total rental income forgone over the six-year period. The annual rental income is $46,500, so the total rental income forgone is $46,500 x 6 = $279,000.
Therefore, the value that should be included in the initial cost of the warehouse project for the use of the land is $279,000.
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If a manager considers one employee at a time and circles a number/word to signify the degree to which that employee demonstrates a particular trait, he/she is using a: Group of answer choices
Answer:
graphic rating scale
Explanation:
A graphic rating scale is described as one of the different types of methods involved in "performance appraisal". In the given method, an individual's behaviors or traits that are considered as significant for "effective performance" are being "listed-out" and then every employee is being rated against the given traits. These ratings would help different employers to 'quantify' or 'measure' the behavior displayed or represented by its employees.
The correct answer for the question above is the graphic rating scale.
Wilson Center is a private not-for-profit voluntary health and welfare entity. During 2017, it received unrestricted pledges of $600,000, 60 percent of which were payable in 2017, with the remainder payable in 2018 (for use in 2018). Officials estimate that 15 percent of all pledges will be uncollectible. How much should Wilson Center report as contribution revenue for 2017? In addition, a local social worker, earning $20 per hour working for the state government, contributed 600 hours of time to Wilson Center at no charge. Without these donated services, the organization would have hired an additional staff person. How should Wilson Center record the contributed service?
Answer:
Pledges $600,000
Uncollectible Pledges at 15% -$90,000
Net Pledge Balance $510,000
Pledges - 2017 at 60% $306,000
Unrestricted Net Asset - Contribution $306,000
Account Titles Debit Credit
a)Contribution Receivable $360,000
Allowance for Uncollectible Pledges $54,000
Unrestricted Net Asset - Contribution $306,000
b)Salary Expense (20 * 600) $12,000
Unrestricted Net Asset - Contribution $12,000
Final answer:
Wilson Center should report $270,000 as contribution revenue for 2017, which is the amount of receivable pledges for 2017 minus estimated uncollectibles. The value of the donated services by the social worker, at fair market value, should also be recorded as both an increase in service expense and an increase in contribution revenue.
Explanation:
To determine how much Wilson Center should report as contribution revenue for 2017, the following steps should be taken:
Calculate the expected receivable pledges for 2017: $600,000 pledges × 60% = $360,000.
Estimate the uncollectible pledges: $600,000 total pledges × 15% = $90,000.
Subtract the uncollectible pledges from the receivable pledges for 2017: $360,000 - ($600,000 × 15%) = $360,000 - $90,000 = $270,000.
Therefore, Wilson Center should report $270,000 as contribution revenue for 2017.
Regarding the contributed service, since the services provided by the local social worker enhanced the nonprofit's capabilities and would have required the organization to hire additional staff, Wilson Center should record this donated service as both an increase in service expense and an increase in contribution revenue at the fair value of the service provided.
Here is the journal entry to record the service:
Debit Service Expense: 600 hours × $20/hour = $12,000.
Credit Contribution Revenue: $12,000.
Presented below is information for Oakley Company for the month of March 2020.
Cost of goods sold $254,000
Rent expense $36,000
Freight-out 7,500
Sales discounts 8,800
Insurance expense 5,000
Sales returns and allowances 11,000
Salaries and wages expense 75,000
Sales revenue 425,000
Prepare a multiple -step income statement.
Answer:
Oakley Company multiple -step income statement for the month of March 2020.
Sales revenue 425,000
Less Sales returns and allowances (11,000)
Net Revenue 414,000
Less Cost of goods sold (254,000 )
Gross Profit 160,000
Less Operating Expenses
Selling And Distribution Expenses :
Sales discounts 8,800
Freight-out 7,500
Administrative Expenses :
Rent expense 36,000
Insurance expense 5,000
Salaries and wages expense 75,000 (132,300)
Operating Income 27,700
Explanation:
A multiple -step income statement shows income derived from Primary Activities of the Company (Operating Activities) separately from the Income that is derived from Secondary Activities of the Company (Non-Operating).
Answer:
Operating Income = $27,700
Explanation:
Kindly check the attached picture for the Full and detailed Oakley Company Income statement for March, 2020.
As a financial analyst, you are tasked with evaluating a capital budgeting project. You were instructed to use the IRR method and you need to determine an appropriate hurdle rate. The risk-free rate is 4% and the expected market rate of return is 11%. Your company has a beta of 1.4 and the project that you are evaluating is considered to have risk equal to the average project that the company has accepted in the past. According to CAPM, the appropriate hurdle rate would be _________________________ ?
Answer:
13.8%
Explanation:
The appropriate hurdle rate would be the required return from CAPM or
Rate = 4% + 1.4(11% - 4%)
=4%+1.4(7%)
=4%+9.8
= 13.8%.
Focusing a supply chain on ________________ is a modern way of ensuring high-quality inputs and extending an organization’s continuous improvement efforts. Multiple Choice ISO 14000 customers lowest cost per unit sourced suppliers that emphasize continuous-flow production close, collaborative ties with suppliers partners pursuing similar strategies
Answer:
The correct answer is letter "D": close, collaborative ties with suppliers.
Explanation:
A Supply Chain is a network of organizations that work in the production and distribution of a good. The network is managed by the manufacturer from gathering the raw materials until a final good is provided to end-consumers. The relationships between suppliers, producers, distributors, retailers, and customers are vital for the sustainability of the firm.
To ensure the high-quality of the production, most companies aim to establish strong bonds with their suppliers by promoting mutual efforts in an attempt to maximize each others' profits.
How walmart motivate thier employees?
A company that uses the perpetual inventory system sold goods to a customer on account for $ 2,100. The cost of the goods sold was $ 1,050. Which of the following journal entries correctly records this transaction? A) Cost of Goods Sold $2,100 Sales Revenue $2,100B) Merchandise Inventory $2,100 Sales Revenue $2,100C) Accounts Receivable $2,100 Cash $2,100D) Cash $2,100 Sales Revenue $2,100 Cost of Goods Sold $1,050 Merchandise Inventory $1,050
Answer:
Journal Entry
Explanation:
The Journal entry is shown below:-
1. Accounts receivable Dr, $2,100
To Sales $2,100
(Being sales made on account is recorded)
2. Cost of Goods Sold Dr, $ 1,050
To Merchandise Inventory $1,050
(Being cost of goods sold is recorded)
Therefore option is not available.
Ayayai Corp. had the following inventory transactions occur during 2022: Units Cost/unit Feb. 1, 2022 Purchase 102 $42 Mar. 14, 2022 Purchase 175 $44 May 1, 2022 Purchase 124 $46 The company sold 288 units at $59 each and has a tax rate of 30%. Assuming that a periodic inventory system is used, and operating expenses of $1692, what is the company’s after-tax income using LIFO?
Answer:
Income after tax = $1666
Explanation:
LIFO (Last-In-First-Out) is a method of inventory valuation where the goods that are received last are used first. In other words, the latest stock is used first. This is common for bulky inventory, stacked one on top of another.
In order to obtain the after-tax income, both the gross profit and income before tax are required. To obtain gross profit, we require the cost of goods sold information. The inventory information is as follows:
Feb 1 : Purchases : 102 units x $42 = $4284
Mar 14 : Purchases : 175 units x $44 = $7700
May 1 : Purchases : 124 units x $46 = $5704
288 units were sold
The COGS would be:
124 x $46 = $5704
164 x $44 = $7216
Thus COGS : $5704 + $7216 = $12920
Gross profit : Sales - COGS
Sales : $59 x 288 = $16992
Gross Profit = $16992 - $12920 = $4072
Income before tax : Gross Profit - Expenses
Operating expenses : $1692
Income before tax = $4072 - $1692 = $2380
Income after tax : Income before tax - (tax rate x income before tax)
Tax rate : 30%
Income after tax = $2380 - ($2380 x 30%) = $1666
Timothy and John both work 8 hours a day. Both Timothy and John can produce shoes or clothes, though at different rates. For Timothy, he can produce 2 pairs of shoes per hour or 4 units of clothes per hour. For John, he produces 1 pair of shoes per hour, or 5 units of clothes per hour. _____________ has the absolute advantage in producing shoes and _____________ has the absolute advantage in producing clothes.
Answer:
Timothy; John
Explanation:
A country has a absolute advantage in producing a commodity if it produces that commodity with less inputs than the other country.
For Timothy, he can produce:
2 pairs of shoes per hour or 4 units of clothes per hour
For John, he produces:
1 pair of shoes per hour, or 5 units of clothes per hour.
Therefore, the Timothy has a absolute advantage in producing shoes because he can produce more number of shoes in an hour than John.
And, the John has a absolute advantage in producing clothes because he can produce more units of clothes in an hour than Timothy.
The only capital investment required for a small project is investment in inventory. The operating cash flow this year was $10,000, and inventory increased from $4,000 to $5,000. What was the cash flow from the project?
Answer:
$9,000
Explanation:
Cash flow can be defined as the amount of cash that is being transferred or that flows into and out of a business which may either leads to increase or decrease in the amount of money a business or individual has.
Cash flow = profit − increase in inventory =
$4,000 - $5,000 = $1000
Therefore
$10,000 − $1,000 = $9,000
Therefore the Cash flow from the project is $9,000
The cash flow from the project will be $9000.
Cash flow from the project simply means the cash flow that's generated. It can be gotten by using the formula:
Cash flow = Profit - Increased working capital.
Therefore, cash flow will be:
Cash flow = Profit - Increased working capital.
Cash flow = $10000 - ($5000 - $4000)
Cash flow = $10000 - $1000
Cash flow = $9000
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Firms may invest in fewer projects as a result of A. an increase in interest rates that increase economic growth. B. an increase in interest rates that decrease economic growth. C. a decrease in interest rates that increase economic growth. D. a decrease in interest rates that decrease economic growth. E. an increase in dividends that limit economic growth.
Answer: B. an increase in interest rates that decrease economic growth.
Explanation:
If interest rates were to rise in an Economy, that would mean that the cost of borrowing just rose. The rise in the Cost of Borrowing reduces consumer spending as well as business investment. This will therefore lead to a lower Aggregate demand. A lower AD in the Economy usually leads to a decrease in economic growth.
Now, if such things were to happen, a firm may definitely invest in fewer projects because first off it will be more expensive for them to borrow and invest because of the high rates. They will also be discouraged because of the Decrease in economic growth as the chances of their projects doing well will be drop in a depreciating economy.
A company has two classes of stock authorized: 9%, $10 par preferred, and $1 par value common. The following transactions affect stockholders’ equity during Year 1, its first year of operations: January 2 Issues 100,000 shares of common stock for $26 per share. February 6 Issues 2,100 shares of 9% preferred stock for $11 per share. September 10 Purchases 11,000 shares of its own common stock for $31 per share. December 15 Resells 5,500 shares of treasury stock at $36 per share. Required: Record each of these transactions. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)
Answer and Explanation:
The journal entries are shown below:
On Jan 2
Cash (100,000 shares × $26) $2,600,000
To Common Stock (100,000 shares × $1) $100,000
To Paid in capital in excess of par value - Common Stock $2,500,000
On Feb 6
Cash (2,100 shares × $11) $23,100
To Preferred stock (2,100 shares × $10) $21,000
To Paid in capital in excess of par value-preferred stock $2,100
On Sep 10
Treasury Stock (11,000 × $31) $341,000
To Cash $341,000
(Being the purchase of own common stock is recorded)
On Dec 15
Cash (5,500 shares × $36) $198,000
To Treasury Stock (5,500 shares × $31) $170,500
To Paid in capital from sale of treasury stock $27,500
(Being the resells of treasury stock is recorded)
For the current year ($ in millions), Centipede Corp. had $80 in pretax accounting income. This included warranty expense of $6 and $20 in depreciation expense. Two million of warranty costs were incurred, and depreciation deductions in the tax return amounted to $35. In the absence of other temporary or permanent differences, what was Centipede's taxable income currently, assuming a tax rate of 40%?
a. 19.6 million.
b. 27.6 million.
c. 29.2 million.
d. 25.2 million
Answer:
The correct option is B,$27.6 million
Explanation:
In order to compute Centipede Corp's taxable income for the current year,we need to adjust the pre-tax accounting income by adding back estimates of warranty and depreciation expenses,whereas the actual warranty and depreciation deductions allowed by the tax authority are deducted.
Million($)
Pre-tax accounting income 80
add:
estimated warranty expense 6
estimated depreciation expense 20
Total 106
less:
actual warranty cost (2)
actual depreciation deductions (35)
Taxable income 69
Since $69 million is not one of the options,hence the income tax payable is computed thus:
40%*$69 million=$27.6
Colter Company prepares monthly cash budgets. Relevant data fromoperating budgets for 2017 are as follows:
January February
Sales 360,000 $400,000
Direct materials purchases 120,000 125,000
Direct labor 90,000 100,000
Manufacturing overhead 70,000 75,000
Selling and administrative expenses 79,000 85,000
All sales are on account. Collections are expected to be 50% inthe month of sale, 30% in the first month following the sale, and20% in the second month following the sale. Sixty percent (60%) ofdirect materials purchases are paid in cash in the month ofpurchase, and the balance due is paid in the month following thepurchase. All other items above are paid in the month incurredexcept for selling and administrative expenses that include $1,000of depreciation per month.
Other data:
1. Credit sales: November 2016, $250,000; December 2016,$320,000.
2. Purchases of direct materials: December 2016, $100,000.
3. Other receipts: January Collection of December 31, 2016,notes receivable $15,000; FebruaryâProceeds from sale of securities $6,000.
4. Other disbursements: February Payment of $6,000 cashdividend.
The companys cash balance on January 1, 2017, is expected to be $60,000. The company wants to maintain a minimum cash balance of $50,000.
Prepare schedules for (1) expected collections from customersand (2) expected payments for direct materials purchases forJanuary and February.
Prepare a cash budget for January and February in columnarform.
Answer:
1. Expected Collections from Customers for January is $326,000 and February $372,000
2. Expected Payments for Direct Materials for January is $112,000 and February $123,000
3. Ending Amount required (to make ending balance =$50,000) for January is 0 and February is $9.000. Cash Budget prepared in explanation below.
Explanation:
Schedule for Expected Collections & Payments and Cash Budget prepared below. Moreover, please note that all totaling amounts have been marked in Bold Letters.
1. Schedule of expected customer collections for January and February.
Particulars January February
50% of current month sales 180,000 200,000
30% in of previous month' s sales (i.e., 30% of December's sales, 30% of January's sales) 96,000 108,000
20% of before previous month's sale (20%
of November's sale, 20%of December's sales) 50,000 64,000
Total cash collections from customers 326,000 372,000
2. Expected payments for direct material purchases:
Particulars January February
60 % of current month's purchases 72,000 75,000
40% of previous months purchases (i.e 40%
of December's purchase, 40% of January's purchase) 40,000 48,000
Total payments for purchases 112,000 123,000
3.Cash budget for the months January and February:
Particulars January February
Cash Receipts:
Collections from customers (from 1 above) 326,000 372,000
Collection of notes receivable 15,000 0
Sale of securities 0 6000
Total cash receipts 341,000 378,000
Add: opening balance $60,000 51,000
Total cash receipts and opening balance $401,000 429,000
Cash payments:
Expected payments for purchases (from 2 above) 112,000 123,000
DIrect labour 90,000 100,000
manufacturing overhead 70,000 75,000
Selling and administration expenses (less $1,000) 78,000 84,000
Cash dividends 0 6,000
Total cash payments 350,000 388,000
Ending cash balance (receipts +
opening balance -payments) $51,000 $41,000
Amount to be borrowed (to make
ending balance =$50,000) 0 $9,000
Final ending balance of cash $51,000 $50,000
A company has two departments, Y and Z that incur delivery expenses. An analysis of the total delivery expense of $14,000 indicates that Dept. Y had a direct expense of $1,500 for deliveries and Dept. Z had no direct expense. The indirect expenses are $12,500. The analysis also indicates that 50% of regular delivery requests originate in Dept. Y and 50% originate in Dept. Z. Departmental delivery expenses for Dept. Y and Dept. Z, respectively, are:
Answer:
Dept Y = $7750
Dept Z = $6250
Explanation:
To allocate the cost the cost , the first step is to deduct the indirect expenses related to Y
The allocate the balance in the ratio of 50:50 to Y and Z
Total delivery expenses - $14,000
Dept Y = 1500 +( 12500*50%)
1500+6250 =7750
Dept Z = 6250
In 2017, Ozzie purchased a 2014 Ford Escort from his neighbor for his son, purchased a 2013 "one owner" Camry from Larchmont Toyota for his wife, bought a 2017 new Ford for himself, and sold his 2006 Dodge Caravan to his teenage nephew. Which, if any, of these transactions will be included in GDP in 2017?
Answer:
Ozzie's purchase of the 2017 new Ford would be included in GDP
Explanation:
Gross domestic product is the sum of all final goods and services produced in an economy within a given period which is usually a year.
Only goods produced in a given year would be included in the calculation of GDP.
Its only the 2017 new Ford that produced in 2017 that would be counted as part of 2017's GDP
I hope my answer helps you
The purchase of new goods, such as a 2017 new Ford, will be included in the GDP of 2017, but used goods transactions, like a 2014 Ford Escort and a 2013 Camry, will not be included.
Explanation:Transactions involving the purchase of new goods, such as the 2017 new Ford, will be included in the GDP of 2017. However, transactions involving the purchase of used goods, like the 2014 Ford Escort and the 2013 Camry, will not be included in the GDP as they are not considered new production.
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Business LawSelf-described "sports nut" Gary Baker signed up for a threeyear club-seat "package" that entitled him and a companion to tickets for 41 Boston Bruin hockey games and 41 Boston Celtic basketball games at the New Boston Garden Corporation’s Fleet Center for approximately $18,000 per year. After one year, Baker stopped paying for the tickets thinking that he would simply lose his $5,000 security deposit. New Boston sued Baker for breach of contract, seeking the balance due on the tickets of $34,866. At trial, Baker argued to the jury that although he had breached his contract, New Boston had an obligation to mitigate damages, for example, by treating his empty seats and those of others in the same situation as "rush seats" shortly before game time and selling them at a discount. New Boston argued that just as a used luxury car cannot be returned for a refund, a season ticket cannot be canceled without consequences. Decide.
Answer:
The results has not been evaluated here and the odds of those seats getting vacant is additionally not zero. Notwithstanding that $5000 has additionally been paid as security store. In this way, all these sum should be summarized to choose what is the rest of the sum that should be taken from Gary. In any case, this is reliant on if the 'Terms and Conditions' particularly referenced that in the event of non-installment they'd recuperate the rest of the sum from Gary.
However, for the most part in situations where a security sum is taken, this sum should deal with any misfortune that happens due to the client. Thus if the 'Terms and conditions' doesn't expressly make reference to that the sum must be guaranteed from the client, they can't sue Gary.
Baker potentially breached his three-year contract with New Boston Garden Corporation by not paying after a year. The case focuses on contractual obligations and mitigation of damage. But without specific contract stipulations or state laws information, it appears that Baker may remain liable for the balance.
Explanation:In the given scenario, Gary Baker signed a contract with New Boston Garden Corporation's Fleet Center for a three-year club-seat package. By stopping to pay after one year, Baker breached the contract, a binding legal agreement. The question pertains to contractual obligations and the mitigation of damages in case of breach.
In most jurisdictions, the injured party – in this case, New Boston – has a duty to mitigate (limited) damage. However, the methods of mitigation should be reasonable. Arguably, rushing to sell tickets shortly before game time may not be reasonable or practical as it's dependent on market conditions.
Furthermore, New Boston's argument that season tickets, like a used luxury car, cannot be returned without consequences, may hold some validity under certain legal systems that place the obligation on the customer to honor the contract or face penalties. Thus, based on these aspects, and without taking into consideration specific state laws or contractual stipulations, at face value, Baker may indeed remain liable for the balance.
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Sandusky Company borrowed $28,000 from the Lakeside Bank by issuing a 10% three-year installment note. Sandusky agreed to repay the principal and interest by making annual payments in the amount of $11,259.21. Based on this information, the amount of the interest expense associated with the second payment would be: (round your answer to the nearest dollar)
Answer:
the amount of the interest expense associated with the second payment would be $1,954
Explanation:
According to the given data we have the following:
Amount borrowed= $28,000.00
10% interest=$28,000×0.10=$2,800
Therefore, Total outstanding at end of year 1=$28,000+$2,800
Total outstanding at end of year 1=$30,800
Sandusky agreed to repay the principal and interest by making annual payments in the amount of $11,259.21, therefore
Net balance at end of year 1= $30,800-$11,259.21
Net balance at end of year 1=$19,540.79
Hence, To calculate the amount of the interest expense associated with the second payment we would have to make the following calculation:
amount of the interest expense associated with the second payment= $19,540.79×10%=$1,954
Briefly describe the conditions that should be met for market-based transfer pricing to lead to optimal decision making among subunits of a large organization. Notice that, when supply outstrips demand, market prices may drop well below their historical averages. What are distress prices and which transfer prices should be used for judging performance if distress prices prevail?
Answer:
Market based transfer pricing should be made only when it leads to the highest total profit for all sub units collated as a consolidated results of the entire organization.
Explanation:
Distress prices signal a markdown in the price of a good to sustain its production in the face of prevailing fall in prices.
When supply outstrips demand and sales slows down, continuing the production of the item is preferable as it covers some of the fixed costs of the product.
The distress price is the variable cost of the product plus a minimum mark-up.
The dual transfer prices should be used for judging performance if distress prices prevail
The builder of a new arena is sued after a section of the roof collapses during a football game, injuring hundreds of people and causing extensive damage to the arena. This is an example of what kind of exposure
Answer:
The correct answer is letter "D": completed operations liability exposure.
Explanation:
Completed Operations Liability exposure refers to the risk contractors are subject to by which a third party can sue them alleging bodily and property injuries as a result of finished work. Under these circumstances, all the parties responsible in the operations of the work (contractors and subcontractors) are cited until it is determined who could be liable for the harm.
Contractors are obligated to keep a completed operations liability insurance to face such scenarios, Failure to count on insurance for these cases could be considered a breach of the contract with the general contractor of the work.
The Holmes Company's currently outstanding bonds have a 10% coupon and a 14% yield to maturity. Holmes believes it could issue new bonds at par that would provide a similar yield to maturity. If its marginal tax rate is 40%, what is Holmes' after-tax cost of debt
Answer:
The correct answer is 6.84%.
Explanation:
According to the scenario, the given data are as follows:
Coupon = 10%
yield to maturity = 14%
Marginal Tax rate = 40%
Here, Issue new bond at par show that YTM = Coupon rate
So, we can calculate the after tax cost of debt by using following formula:
After tax cost of debt = YTM × ( 1 - marginal tax rate )
By putting the value, we get
After tax cost of debt = 0.14 × ( 1 - 0.40)
= 0.14 × 0.60
= 0.684
= 6.84%
Finishing Touches has two classes of stock authorized: 8%, $10 par preferred, and $1 par value common. The following transactions affect stockholders' equity during 2015, its first year of operations:
January 2 Issues 100,000 shares of common stock for $35 per share.
February 6 Issues 3,000 shares of 8% preferred stock for $11 per share.
September 10 Repurchases 11,000 shares of its own common stock for $40 per share.
December 15 Reissues 5,500 shares of treasury stock at $45 per share.
In its first year of operations, Finishing Touches has net income of $160,000 and pays dividends at the end of the year of $94,500 ($1 per share) on all common shares outstanding and $2,400 on all preferred shares outstanding.
Required:
Prepare the stockholders' equity section of the balance sheet for Finishing Touches as of December 31, 2015. (Amounts to be deducted should be indicated by a minus sign.)
FINISHING TOUCHES
Balance Sheet
(Stockholders’ Equity Section)
December 31, 2015
Stockholders’ equity:
Common stock
Preferred stock
Treasury stock
Additional paid-in capital
Total paid-in capital
Retained earnings
Treasury stock
Total stockholders’ equity
The stockholders' equity section of the balance sheet for Finishing Touches as of December 31, 2015, includes common stock, preferred stock, treasury stock, additional paid-in capital, total paid-in capital, retained earnings, and total stockholders' equity.
Explanation:FINISHING TOUCHES
Balance Sheet
(Stockholders’ Equity Section)
December 31, 2015
Stockholders’ equity:
Common stock: Issued 100,000 shares at $35 per share
Preferred stock: Issued 3,000 shares at $11 per share
Treasury stock: Repurchased 11,000 shares at $40 per share and reissued 5,500 shares at $45 per share
Additional paid-in capital: No information provided
Total paid-in capital: Calculated by adding common stock and preferred stock
Retained earnings: Net income of $160,000 minus dividends of $94,500
Total stockholders’ equity: Calculated by adding total paid-in capital and retained earnings
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Final answer:
The stockholders' equity section of Finishing Touches includes Common and Preferred Stock, Additional Paid-In Capital for both, and Retained Earnings—after accounting for dividends paid and Treasury Stock transactions. Total Paid-In Capital equals $3,533,000, Total Treasury Stock equals $(192,500), and after calculations, Total Stockholders' Equity is $3,403,600.
Explanation:
Finishing Touches Stockholders' Equity Section:
Here's how to prepare the stockholders' equity section of the balance sheet for Finishing Touches as of December 31, 2015:
Common Stock: 100,000 shares x $1 par value = $100,000Preferred Stock: 3,000 shares x $10 par value = $30,000Treasury Stock: 11,000 shares repurchased at $40 = $(440,000) Additional paid-in capital: This represents the amount that investors paid for shares of stock above the par value. In this case, we only have common stock with a par value of $1, so there is no additional paid-in capital.5. Total paid-in capital: To calculate the total paid-in capital, sum up the common stock, preferred stock, and additional paid-in capital: $100,000 (common stock) + $30,000 (preferred stock) + $0 (additional paid-in capital) = $130,000.6. Retained earnings: Retained earnings represent the accumulated profits of the company that have not been distributed as dividends. In this case, the net income for the year is $160,000, and the company paid dividends of $94,500. Therefore, the retained earnings can be calculated as net income minus dividends: $160,000 (net income) - $94,500 (dividends) = $65,500.7. Total stockholders' equity: To calculate the total stockholders' equity, sum up the total paid-in capital and retained earnings: $130,000 (total paid-in capital) + $65,500 (retained earnings) = $195,500.Now we can fill in the stockholders' equity section of the balance sheet for Finishing Touches as of December 31, 2015:FINISHING TOUCHESBalance Sheet(Stockholders' Equity Section)December 31, 2015Stockholders' equity:Common stock: $100,000Preferred stock: $30,000Treasury stock: -$440,000Additional paid-in capital: $0Total paid-in capital: $130,000Retained earnings: $65,500Total stockholders' equity: $195,500Think about the statement, “Business people are moral people”. Briefly write your
reaction to the statement...what does this mean?