Answer:
1. Classifying each cost as Variable or Fixed
When total cost changes with change in output then it is variable in nature and when it remains constant then it is fixed cost.
Plastic for casing = (a) Variable cost (b) Product as will depend on number of casing. = $21,000 / 1000 units = $21 per casing if casing is per unit done individually.Wages of assembly workers = (a) Variable Costs (b) Period it will depend on number of hours worked, in piece rate system it will depend on number of units, but generally it is based on number of hours so it is period.Property taxes on factory = (a) Fixed Costs (b) Period as this does not depend on number of units produced it is fixed in nature, with time duration.Accounting staff salaries = (a) Fixed Costs (b) Period as this is not related to number of units produced and will be fixed for a month.Drum Stands = (a) Variable cost (b)Product as will be required for each drum individually manufactured.Rent cost of equipment for sales staff = (a) Fixed Cost (b) Period as rented is fixed for a specified period generally paid monthly and is not based on number of units produced.Upper management salaries = (a) Fixed Cost (b) Period as this is fixed annually and not based on number of units produced.Annual flat fee for factory maintenance service = (a) Fixed Cost (b) Period as this is fixed annually and has no relation with number of units produced.Sales commissions = (a) Variable Costs (b) Product as this is based on number of units sold and defined per unit.Machinery depreciation, straight-line = (a) Fixed Cost (b) Period as this is not based on number of units produced and is fixed annually.Adjusting entries are made to ensure that?-expenses are recognized in the period in which they are incurred.-revenues are recorded in the period in which the performance obligation is satisfied.-All of these choices are correct.-None of the choices are correct.-balance sheet and income statement accounts have correct balances at the end of anaccounting period.e
Answer:
The correct option is all of these choices are correct.
Explanation:
Adjusting Entries: The adjusting entries are those entries which are adjusted at the end of the year.
According to the statements given in the question:
1. Whenever expenses are incurred, it is recognized in the financial statements on that year itself. Moreover, the adjustment entries is also made.
Thus, the given statement is true
2. Under revenue recognition principle, the revenue is recorded when products are supplied and services are rendered to the customers or the performance obligation is completed. Rather than payment is received or not.
Thus, it is a part of adjustment entries
3. If all the correct entries are passed and the income statement and the balance sheet are matched. Or we can say
Assets = Owner's Equity + Liabilities
So, it would be a part of adjusting entries.
When all choices are correct. So, none of the choices are correct option is invalid.
Hence, The correct option is all of these choices are correct.
Adjusting entries ensure expenses and revenues are recorded in their appropriate periods and that financial statement accounts are accurate, which aligns with accrual accounting principles necessary for reliable financial reporting and budgeting.
Explanation:Adjusting entries are made to ensure that expenses are recognized in the period in which they are incurred, revenues are recorded in the period in which the performance obligation is satisfied, and balance sheet and income statement accounts have correct balances at the end of an accounting period.
All of these choices are correct because they are integral to the accrual basis of accounting, which matches income and expenses to the period they pertain to. This is essential for producing accurate financial statements and for effective budgeting, ensuring that a company or individual has adequate funds to cover their expenses.
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Kent Enterprises purchased a truck for $60,000 on January 1 of its first year. The company uses the units-of-activity method and it estimates that the truck’s useful life will be 100,000 miles. The truck will have an estimated salvage value of $10,000. The company drives the truck 25,000 miles in the first year and drives it 20,000 miles in the second year. How much accumulated depreciation will be reported on the company’s balance sheet as of the end of the second year?
Answer:
Accumulated depreciation on car at the end of year 2 will be 22,500
Explanation:
The unit-of use Method recognize depreciation base on the use of a cost driver. This cost driver could be miles, number of units produced, or others.
[tex]\frac{Adquisition \: Value- \: Salvage \: Value}{cost \: driver}= Depreciation \: rate[/tex]
(60,000-10.000)/100,000 = .5 rate per mile
acumulated depreciation at year 2
[tex](year 1 + year 2) \times \: rate = \: accumulated \: depreciation[/tex]
25,000 + 20,000= 45,000 total miles driven
45,000 * 0.5 = 22,500
Robinson Company purchased Franklin Company at a price of $3,830,000. The fair market value of the net assets purchased equals $2,790,000. 1. What is the amount of goodwill that Robinson records at the purchase date? 2. Does Robinson amortize goodwill at year-end? 3. Robinson believes that its employees provide superior customer service, and through their efforts, Robinson believes it has created $1,420,000 of goodwill. Should Robinson Company record this goodwill?
Answer:
Goodwill 1,040,000
2.- It will need to be amortized at year-end
3.- Goodwill can only be created through third parties operations, Robinson cannot increase his own goodwill. A third party must be willing to pay that amount
Explanation:
3,830,000 - 2,790,000 = difference 1,040,000
The efficiency-wage theory of worker turnover suggests that firms with higher turnover will have A. higher production costs and higher profits. B. lower production costs and higher profits. C. higher production costs and lower profits. D. lower production costs and lower profits.
Answer:
I believe the correct answer is C: higher production cost and lower profits
Explanation:
High turnover is directly connected with low efficiency, due to costly and time consuming worker on-boarding and training which translates into deterioration of margin (lower profits).
Answer:
The correct answer would be option A, Higher Production Costs and Higher Profits.
Explanation:
The Efficiency Wage theory of worker turnover states that if employee are paid more wages than the equilibrium level, the level of employee's efficiency increases which in turn will increase the productivity of the organization and thus contribute in the increase of profitability for the organization, and vice versa. It is commonly known that when wages increase, the production costs also increase. So this theory suggests that firms with higher turnover will have higher production costs and higher profits.
Bluff purchased equipment for business use for $35,000 and made $1,000 of improvements to the equipment. After deducting depreciation of $5,000, Bluff gave the equipment to Russett for business use. At the time the gift was made, the equipment had a fair market value of $32,000. Ignoring gift tax consequences, what is Russett's basis in the equipment
Answer:
After ignoring the gift tax basis, the Russett's basis in the equipment is equal to $31,000
Explanation:
For answering this question it is important that we have knowledge of the IRS publication 555, according to which we can take out the donee basis in the property ( in this case donee is Russett's ) in the situation when market value of the property is equal to or greater than the donors ( Bluff ) adjusted basis.
Then the donee basis will be equal to the donors adjusted basis of property.
In this case we will first take out donors ( bluff ) adjusted basis for equipment,
= $35,000(purchase value) + $1000(improvement) - $5000 (depreciation)
= $31,000
So here we can say that donors adjusted basis is less than market value , so in this case the russetts basis will be equal to bluff adjusted basis for property which is equal to $31,000.
Sue sells authentic Amish quilts on her website. Suppose Sue expects to sell 3 comma 000 quilts during the coming year. Her average sales price per quilt is $ 275, and her average cost per quilt is $ 150. Her fixed expenses total $ 225 comma 000. Compute her margin of safety a. in units (quilts). b. in sales dollars. c. as a percentage of expected sales.
Answer:
(A) 1,200 Margin of Safety_{units}
(B) 330,000 Margin of Safety_{usd}
(C) Margin of Safety 40% of Sales
Explanation:
(A)
[tex]Sales \: Revenue - Variable \: Cost = Contribution \: Margin[/tex]
275 - 150 = 125 CM per unit
[tex]\frac{Fixed\:Cost}{Contribution \:Margin} = Break\: Even\: Point_{units}[/tex]
[tex]\frac{225,000}{125} = 1,800 = Break\: Even\: Point_{units}[/tex]
[tex]{units \: sold- BEP_{units} = margin \: of \: safety_{units}[/tex]
3,000 - 1,800 = 1,200 Margin of Safety_{units}
HOW? we Calculate the contribution per unit. Then the BEP in units and with that the margin of safety in units.
(B)
[tex]\frac{Contribution Margin}{Sales Revenue} = $Contribution Margin Ratio[/tex]
125/275 = 0.45454545 = 5/11 CM ratio
[tex]\frac{Fixed\:Cost}{Contribution \:Margin \:Ratio} = Break\: Even\: Point_{dollars}[/tex]
225,000/(5/11) = 495,000 BEP USD
[tex]{current \:sales - BEP_{USD} = margin \: of \: safety[/tex]
825,000-495,000 = 330,000 Margin of Safety_{usd}
HOW? we Calculate the contribution ratio by dividing CM over sales. Then the BEP in dollars and with that the margin of safety in dollars.
Important: When posible to avoid rounding errors express as fraction iof posible
(C)
[tex]\frac{current \:sales - BEP_{USD}}{current \:sales} \times 100 = margin \: of \: safety[/tex]
[tex]\frac{330,000}{825,000} \times 100 = margin \: of \: safety[/tex]
Margin of Safety 40%
275-150 = 125
The Break even point225000/125
= 1800
The margin of safety3000-1800
= 1200
The contribution margin125/175 = 0.4545
Break even point225000/0.4545
= $495,049
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A stock is expected to pay a dividend of $3.00 at the end of the year (i.e., D1 = $3.00), and it should continue to grow at a constant rate of 10% a year. If its required return is 14%, what is the stock's expected price 5 years from today? Do not round intermediate calculations. Round your answer to the nearest cent.
Answer:
$120.79
Explanation:
Using dividend growth model, we have
P0 = [tex]\frac{D1}{Ke - g}[/tex]
P0 = Current market price
D1 = Dividend at the end of year 1
Ke = Required rate of return
g = growth rate
Now in the given case, Ke is constant @ 14%
g is also constant @ 10%
For price at the end of 5 years = P5
We need to calculate D6
D6 = (((((D1 +g) + g) + g) + g) + g)
= (((((3 +10%) +10%) + 10%) +10%) +10%)
= 4.83153
Therefore Expected price at the end of 5 years = [tex]\frac{4.83153}{0.14-0.10}[/tex]
= $120.79
Top Company holds 90 percent of Bottom Company’s common stock. In the current year, Top reports sales of $1,010,000 and cost of goods sold of $757,500. For this same period, Bottom has sales of $510,000 and cost of goods sold of $310,000. During the current year, Top sold merchandise to Bottom for $310,000. The subsidiary still possesses 40 percent of this inventory at the current year-end. Top had established the transfer price based on its normal gross profit rate. What are the consolidated sales and cost of goods sold?
Answer:
Sales Consolidated $1,159,000
COGS consolidated $804,000
Explanation:
The company will need to remove their sales between affiliates, because the goal for the consolidate statment is to represent the group performance with external entities
Sales Top $1,010,000
-sales between afilliates -$310,000
90% Bottom $459,000
Sales Consolidated $1,159,000
COGS top $757,500
-COGS sales between afiliated -$232500 (cross multiply)
90% Bottom $279,000
COGS consolidated $804,000
cross multiply:
1,010,000 generates 757,500 of COGS
310,000 generates 310,000x757,500/1,010,000 = 232,500 COGS
Use the following information to calculate the change in the company's cash balance for the year. Credit Sales $800,000 Cash Sales $500,000 Operating Expenses on Credit $200,000 Cash Operating Expenses $700,000 Accounts Receivable (Beg. of Year) $50,000 Accounts Receivable (End of Year) $80,000 Accounts Payable (Beg. of Year) $50,000 Accounts Payable (End of Year) $100,000 Income Taxes Paid $160,000
Answer:
Cash generated from operating activities 460,000
Explanation:
Cash Sales 500,000
Credit sales collection
beginning AR 50,000
+ 800,000 credit sales
- ending AR 80,000 = 770,000
payment to providers
Accounts Payable beginning 50,000
+ Operating expenses credit 700,000
- Accounts Payable ending 100,000= (650,000)
taxes paid (160,000)
Cash generated from operating activities 460,000
Consider the following data from a company annual report: which of the following is inventory turnover? Sales: $1,200,000 Cost of Goods Sold: $60,000 Raw Materials Inventory: $80,000 Finished Goods Inventory: $20,000 Work-in-Process: $20,000
Answer:
The inventory turnover is 0.5
Explanation:
Inventory turnover ratio or stock turnover ratio is ratio which tells about how much of inventory company has sold and how much of it is left. This ratio helps management in making right decisions regarding pricing and marketing strategy, manufacturing etc.
FORMULA FOR CALCULATING INVENTORY TURNOVER RATIO =
[tex]\frac{COST OF GOODS SOLD}{AVERAGE INVENTORY}[/tex]
Here we will take cost of goods sold not sales because by taking cost of goods sold we will get better accuracy , as sales will include a mark up over cost.
Average inventory will include raw material inventory, finished goods and work in progress
[tex]\frac{\$60000}{\$80000+\$20000+\$20000}= .5[/tex]
Therefore the average turnover ratio is 0.5
Lisah, Inc., manufactures golf clubs in three models. For the year, the Big Bart line has a net loss of $10,000 from sales $200,000, variable costs $180,000, and fixed costs $30,000. If the Big Bart line is eliminated, $20,000 of fixed costs will remain. Prepare an analysis showing whether the Big Bart line should be eliminated.
Answer:
It should be continued.
Explanation:
[tex]\left[\begin{array}{ccc}-&continued&discontinued&Sales&200,000&0&Variable Costing&-180,000&0&Contribution&20,000&0&Fixed Cost&-30,000&-20,000&Net Loss&-10,000&-20,000\end{array}\right][/tex]
It is better to continue with the Big Bart Line, because the net loss would increase by 10,000 if eliminated
Answer:
Please see attachment
Explanation:
Please see attachment
A condensed income statement by product line for British Beverage Inc. indicated the following for King Cola for the past year: Sales $235,100 Cost of goods sold (110,000) Gross profit $125,100 Operating expenses (142,000) Operating loss $(16,900) It is estimated that 12% of the cost of goods sold represents fixed factory overhead costs and that 21% of the operating expenses are fixed. Since King Cola is only one of many products, the fixed costs will not be significantly affected if the product is discontinued. Prepare a differential analysis report for the proposed discontinuance of King Cola.
Answer:
Provided total expenses
Cost of goods sold = $110,000
Variable + Fixed
Provided 12% is fixed = $110,000 X 12% = $13,200
Variable = $110,000 - $13,200 = $96,800
Now in Operating Expenses
Total = $142,000
Fixed = $142,000 X 21% = $29,820
Variable = $142,000 - $29,820 = $112,180
Now if the product King Cola is discontinued then
All the variable cost can be avoided
In that case Net loss will be of Fixed cost
Total fixed cost = $13,200 +$29,820 = $43,020
Whereas current operating loss = $16,900
Now if the input and labor used for King Cola can be allocated to some other beneficial product which can further meet at least $43,020 - $16,900 = $26,120 profit from these additional inputs.
Else the company shall operate on king Cola as in case of operating with the same the loss is only of $16,900 whereas in case of non operation loss = $43,020
What is joint tenancy?
Answer:
Explanation:
Joint tenancy is a lawful course of action in which at least two individuals possess a property together, each with equivalent rights and commitments. When one of the proprietors in a joint tenure dies, that proprietor's interest in the property goes to the survivors without the property experiencing the courts.
4. A manufacturer of microwaves has discovered that male shoppers, on average, have lower values for microwave ovens than female shoppers. Additionally, male shoppers attribute almost no extra value to an auto-defrost feature, while female shoppers, on average, value the auto-defrost feature. There is little additional cost to incorporating an auto-defrost feature. The manufacturer is considering introducing two different models. The manufacturer has determined that men value a simple microwave at $70 and one with auto-defrost at $80, while women value a simple microwave at $80 and one with auto-defrost at $150. If there is an equal number of men and women, what pricing strategy will yield the greatest revenue? What if women comprise the bulk of microwave shoppers?
Final answer:
The price increase of refrigerators by only $50 despite $100 external costs is due to consumer surplus.
Explanation:
The increase in the market price of refrigerators by only $50, even though the external costs of pollution were $100, can be attributed to the concept of consumer surplus. Consumer surplus refers to the difference between what consumers are willing to pay for a product and the actual price they pay. In this case, even though the external costs pushed up the production cost, the market price increased by a lesser amount due to the willingness of consumers to pay higher prices for refrigerators.
C Co. reported a retained earnings balance of $320,000 at December 31, 2017. In September 2018, C determined that insurance premiums of $69,000 for the three-year period beginning January 1, 2017, had been paid and fully expensed in 2017. C has a 35% income tax rate. What amount should C report as adjusted beginning retained earnings in its 2018 statement of retained earnings?
Answer:
C should report $349,900 as the adjusted beginning retained earnings in its 2018 statement of retained earnings.
Explanation:
We are given the retained earnings for 2017 as $320,000, and in September of 2018 C realized that the insurance premium of $69,000 which had been paid on 1 January , 2017 was for 3 years , which means 2/3 of $69,000 was not for the year 2017 and it is now prepaid .
Amount prepaid = 2/3 x $69,000
= $46,000
But it is given that the income tax rate is 35% , so of $46,000 C will adjust or add only 65% of 46,000 in he earnings because 35% would be deducted,
= $46,000 - $46,000 x 35%
= $46,000 - $16,100
= $29,900
So we will add this amount with the $320,000,
therefore adjusted beginning retained earnings would be $349,900.
Shimada Products Corporation of Japan is anxious to enter the electronic calculator market. Management believes that in order to be competitive in world markets, the price of the electronic calculator that the company is developing cannot exceed $67. Shimada’s required rate of return is 28% on all investments. An investment of $3,100,000 would be required to purchase the equipment needed to produce the 42,000 calculators that management believes can be sold each year at the $67 price. Required: Compute the target cost of one calculator
To compute the target cost of the electronic calculator for Shimada Products Corporation, the total investment must be adjusted for the desired rate of return and then divided by the number of units expected to sell. The initial calculation shows that the target cost per calculator ($94.48) exceeds the desired selling price of $67, indicating that adjustments are necessary for Shimada to be competitive.
Explanation:The student is asking to compute the target cost of a calculator that Shimada Products Corporation is planning to develop. To determine this, we need to consider the total investment, the required rate of return, and the number of units Shimada expects to sell annually. We initiall subtract the total expected return on the investment from the total investment to find out the total allowable cost for all calculators. Then we divide this allowable cost by the number of units to get the target cost per calculator which cannot exceed the set selling price to stay competitive.
Determine the total return on investment by multiplying the initial investment by the required rate of return ($3,100,000 x 0.28 = $868,000).Add this annual return to the initial investment to determine the total amount that needs to be recovered each year ($3,100,000 + $868,000 = $3,968,000).Calculate the target cost per calculator by dividing this amount by the number of calculators expected to be sold each year ($3,968,000 ÷ 42,000 ≈ $94.48).Since the target cost exceeds the desired selling price of $67, Shimada will need to reduce costs or reconsider its price or investment to meet the target cost within the competitive range.A firm that is first to the market with a new product frequently discovers that there are design flaws or problems with the product that were not anticipated. For example, the ballpoint pens made by the Reynolds International Pen Company often leaked. What effect do these problems have on the innovating firm, and how do these unexpected problems open up possibilities for other firms to enter the market?
Answer: The sales and image of the innovating firm might decline in the market.
Explanation: As only the innovating firm will have the option to sell the product in the market, customers will judge the whole firm on the basis of that product, the overall research done by the innovating firm will result in loss of money and time. On the other hand other firms can use the research done by the innovating firm and can analyze the problem that sustains in the model and just by correcting the flaws detected they will be able to capture a substantial amount of market share in a very small span of time.
James and Amanda are brother and sister who still live at home with their parents. Amanda is almost completely finished with her classes and is scheduled to graduate in a few months while James has only completed three courses. Amanda allows James to use her work from all of her past classes and to turn them in as his own. This is, a. not plagiarism because James and Amanda are related. b. a type of plagiarism called sharing work (collusion). c. a type of plagiarism called fabrication. d. not plagiarism because the tuition for both James and Amanda is paid by their parents so they can use the answers.
Answer:
The correct option is b) a type of plagiarism called sharing work ( collusion)
Explanation:
Plagiarism is a very unethical and unprofessional thing a person can do. It actually means when take some other persons thought, idea ,or any work and show it as your own, sometimes people do it intentionally and unintentionally.
In the question given above, it is the above it is a case of share working which is also know as collusion, this type of situation arises when a person passes on his or her work to other person willingly, as you can see the same thing has happened in this question as Amanda has allowed James to use her work as her own.
Cabell Products is a division of a major corporation. Last year the division had total sales of $25,540,000, net operating income of $1,277,000, and average operating assets of $7,151,200. The company's minimum required rate of return is 16%. The division's return on investment (ROI) is closest to:
Answer:
The divisions return on investment would be close to 17.86%
Explanation:
Return on investment is a very useful financial ratio which is used to take out how much of the benefit or profit , an investor would get in relation to the investment made by them.
FORMULA FOR CALCULATING RETURN ON INVESTMENT =
\frac{NET \: OPERATING \: INCOME}{TOTAL \: OPERATING \: ASSETS}
given - operating income = $1277,000
total operating assets = $7151,200
= \frac{\$ 1,277,000}{\$ 7,151,200} \times 100
= 17.857%
= 17.86% ( APPROXIMATELY )
The following selected information is from Princeton Company’s comparative balance sheets. At December 31 2017 2016 Common stock, $10 par value $ 120,000 $ 110,000 Paid-in capital in excess of par 577,000 347,000 Retained earnings 323,500 297,500 The company’s net income for the year ended December 31, 2017, was $53,000. 1. Complete the T-accounts to calculate the cash received from the sale of its common stock during 2017.
Answer:
cash 240,000 debit
common stock 10,000 credit
additional paid-in 230,000 credit
Explanation:
Common stock 2017 - Common stock 2016 = Δ2017
additional paid-in 2017 - additional paid-in 2016 = Δ2017
120,000 - 110,000 = 10,000
577,000 - 347,000 = 230,000
Total increase 240,000
The cash received from the sale of common stock during 2017 is calculated by the increase in common stock ($10,000) and the increase in paid-in capital in excess of par ($230,000), totaling $240,000.
To calculate the cash received from the sale of common stock during 2017, we need to analyze the changes in the common stock account. The comparison of the common stock values between 2016 and 2017 shows an increase from $110,000 to $120,000, which means the company issued more stock. However, the paid-in capital in excess of par also increased from $347,000 to $577,000. We can calculate the total cash received by summing the increase in common stock and the increase in paid-in capital in excess of par.
The increase in common stock is $120,000 - $110,000 = $10,000.
The increase in paid-in capital in excess of par is $577,000 - $347,000 = $230,000.
Therefore, the cash received from the sale of common stock is $10,000 + $230,000 = $240,000 in 2017.
You are the manager of the packaging department in a cookie factory. (Obviously, the packaging employees cannot eat the cookies that are transferred in during the period.) After your employees insert cookies into colorful packages (step 1) for display on store shelves, the packages of cookies are then boxed using cardboard cartons (step 2) for shipment to stores. Each unit of product is represented by a carton of packaged cookies. The packaging department began the period with 1,000 units of cookies. During the period, 5,000 units of cookies were transferred in from the baking department and 5,500 units of cookies were transferred out to the finished goods department. The number of units of cookies in the ending inventory of the packaging department equals:
Explanation:
Cookies are transferred to the colorful packaging to be displayed on the shelves of the stores. These packaged cookies are transferred in the carton to be delivered at the stores.
Now the data given in this question is as follows:
Staring Units of cookies in the packaging department = 1000 units
New units of cookies transferred in from the baking department to the packaging department = 5000 units.
Now total units that packaging department have = 1000 + 5000 = 6000 units of cookies.
Total unit of cookies transferred out to the finished goods department = 5500 units of cookies.
So the number of units of cookies in the ending inventory of the packing department will be the total units in the packaging department less the total units transferred out to the finished goods department, i-e
6000 - 5500 = 500 units of cookies remaining in the packaging department.
Enviro Company issues 8%, 10-year bonds with a par value of $250,000 and semiannual interest payments. On the issue date, the annual market rate for these bonds is 5%, which implies a selling price of 123 ⅜. The straight-line method is used to allocate interest expense. 1.Using the implied selling price of 123 ⅜, what are the issuer's cash proceeds from issuance of these bonds. 2.What total amount of bond interest expense will be recognized over the life of these bonds? 3.What is the amount of bond interest expense recorded on the first interest payment date?
The issuer's cash proceeds from issuing the bonds would be $308,437.50. The total bond interest expense recognized over the life of the bonds would be $141,562.50, and the bond interest expense recorded on the first interest payment date would be $7,078.12.
Explanation:1. To find the issuer's cash proceeds from issuance of these bonds, we multiply the par value by the selling price. A selling price of 123 ⅜ means 123.375 in decimal format, which is equivalent to a selling price of 123.375% of the par value. So, $250,000 x 1.23375 = $308,437.50, which would be the cash proceeds from the bond issuance.
2. The total bond interest expense over its life will consist of the bond interest payments plus the bond discount or less the bond premium. In this case, bond interest payments are made semiannually with an 8% interest rate, so each payment is $250,000 x 0.08/2 = $10,000. Across the 10-year life of the bond, that’s 20 payments, so $10,000 x 20 = $200,000. A bond premium is the extra cash proceeds from selling the bond over its par value, which in this case is $308,437.50 - $250,000 = $58,437.50. So, the total bond interest expense will be $200,000 - $58,437.50 = $141,562.50.
3. Bond interest expense under the straight-line method is found by taking the bond premium of $58,437.50 and spreading it evenly over the 20 interest payment periods. This would mean $58,437.50 / 20 = $2,921.88 in bond premium expense per period. Subtract this from the cash interest payments of $10,000 per period to find the interest expense recognized every half year, $10,000 - $2,921.88 = $7,078.12 for the first interest payment date.
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Bunny Bread Company manufactures different types of bread and accounts for its production using an ABC costing system. It has a 5,000-square-foot factory space that it rents for $2,500 a month for all its manufacturing activities. Bunny Bread has identified its activities as follows: preparation and setup, kneading, baking, packaging, and quality control. Two thousand five hundred (2,500) square feet of the factory are used for kneading, while 750 square feet (each) are used for preparation and setup and quality control. Baking and packaging use 500 square feet each. When assigning indirect costs to each activity, how much factory rent should be assigned to the preparation and setup cost pool?
Answer:
Area occupied by Preparation and setup cost = $375
Explanation:
Under activity based costing, cost is allocated based on each level of activity.
Provided monthly rent = $2,500 for 5,000 square feet.
Rate per square feet = $2,500/5,000 = $0.5 per square feet
Area occupied by Preparation and setup cost = $0.5 X area taken 750 square feet = $375
As this was provided in the information, given in question.
Area occupied by Preparation and setup cost = $375
After Jeff Bezos read about how the Internet was growing by 2,000 percent a month, he set out to use the Internet as a new distribution channel and founded Amazon, which is now the world's largest online retailer. This is clearly an example of a(n)A. firm that uses closed innovation. B. entrepreneur who commercialized invention into an innovation. C. business that entered the industry during its maturity stage. D. exception to the long tail business model
Answer:
B. entrepreneur who commercialized invention into an innovation
Explanation:
A- there wasn't any firm before
C- the business was growing not at maturity state
D.- his business is a distribution channel it is not relater to find niche markets
B.- He use an invention The Internet to innovate in the ways product are distribute and comercialized. It made an innovation(it didn't exist before) out of the invention
From the ledger balances given below, prepare a trial balance for the Metlock, Inc. at June 30, 2019. All account balances are normal.
Accounts Payable $8,700, Cash $6,400, Common Stock $21,200, Dividends $2,500, Equipment $16,500, Service Revenue $7,700, Accounts Receivable $4,700, Salaries and Wages Expense $4,800, and Rent Expense $2,700.
Answer:
[tex]\left[\begin{array}{ccc}Account&DEBIT&CREDIT\\Cash&6,400&-\\Account\: Receivable&4,700&-\\Equipment&16,500&-\\Account \: Payble&-&8,700\\Common \: Stock&-&21,200\\Dividends&2,500&-\\Serice \: Revenue&-&7,700\\S/W \: expense&4,800&-\\Rent \: expense&2,700&-\\Total&37,600&3,7600\\\end{array}\right][/tex]
Explanation:
Cash assets --> debit balance
AR assets --> debit balance
equipment assets --> debit balance
Account payable liability --> credit balance
CS equity --> credit balance
dvidends --> debit balance
revenue --> credit balance
expenses --> debit balance
T/F: The theory of purchasing-power parity states that a unit of a country's currency should be able to buy the same quantity of goods in foreign countries as it does domestically.
Answer: The statement is TRUE.
Explanation: The theory of purchasing-power parity is an economic theory that tries to calculate the exchange rate between the currencies of two countries necessary so that the same basket of goods and services can be purchased in the currency of each one, that is, so that the purchasing power (or purchasing power) ) of both currencies is equivalent.
Difference between a will and a living trust
Answer:
A will gets into effect after a person dies. trust gets into effect as soon as it is created. The will covers all the property under the individual's name. Trust covers property which has been transferred in the name of the trust.
Explanation:
A will directs who will receive his property after an individual's death. It also appoints a representative to carry out the wishes of the deceased. A trust on the other hand can divide the property before, after or at death.
A will is a document through which a person expresses his wishes about how his property is to be distributed, it can also contain details regarding funeral.
A trust is an arrangement through which property of an individual is held by other individuals or institution.
A project is expected to create operating cash flows of $22,500 a year for three years. The initial cost of the fixed assets is $50,000. These assets will be worthless at the end of the project. An additional $3,000 of net working capital will be required throughout the life of the project. What is the project’s net present value if the required rate of return is 10%?
Answer:
Net Present Value = $58,188 - $53,000 = $5,188
Explanation:
Net Present Value = Net Cash Inflow - Net Cash Outflow
Computing Net Cash Inflow Discounted @10% PV factor for each year = [tex]\frac{1}{(1 + r){^n}}[/tex] Where, r = interest rate = 10%, and n = period that is for year 1 = 1 for year 2 = 2 and for year 3 = 3
Year Cash Inflow PV Factor PV
1 $22,500 0.909 $20,452.5
2 $22,500 0.826 $18,585
3 $22,500 0.751 $16,897.5
3 $3,000 0.751 $2,253 (Working capital will be realized at end of project)
Net Cash inflow = $58,188
Net Cash outflow = Cost of fixed asset + Cost of working capital initially incurred
= $50,000 + $3,000 = $53,000
Net Present Value = $58,188 - $53,000 = $5,188
Transactions for Buyer and Seller Shore Co. sold merchandise to Blue Star Co. on account, $110,500, terms FOB shipping point, 2/10, n/30. The cost of the goods sold is $66,300. Shore paid freight of $1,900. Journalize Shore Co.'s entry for the sale, purchase, and payment of amount due.
Answer:
account receivable debit 110,500
sales revenue credit 110,500
freight-out debit 1,900
cash credit 1,900
COGS debit 66,300
inventory credit 66,300
Explanation:
the sales will be recorded as nominal, because there is no information about the customer taking the discount or paying within this period.
Because term are FOB shipping point, the freight corespond to shore Co
A marketing specialist needed to find a new way of marketing the company's main product to its potential clients. While watching a movie one evening, the marketing specialist saw a scene that gave her inspiration for a new marketing plan. According to the creative process model, which of the following is the next stage in the creative process after such an inspiration?
a. preparation
b. incubation
c. verification
d. insight
e. morphological analysis
Answer:
The correct answer is c) verification
Explanation:
This creative process model is a situation where a person starts the process of transforming his or her ideas or thoughts in to an actual product.
There are many steps in the process of creative process model, first one being the preparation where a person first identifies the problem , set his or her targets or goals.
After preparation comes the step of incubation where a person starts researching on the ideas, person will do brainstorming , he or she will continuously try to find out the solution.
After incubation comes the step of illumination , where a person gets an epiphany ( just like in this question marketing specialist gets) about how to structure together his or her plan.
And finally after illumination step comes the step of verification , where a person(marketing specialist in this case) evaluates whether the plan he has made is worth continuing and investing time in, he would changes to his plan if necessary.
the answer is d. insight
Because through insight, someone will get an idea of what he knows beforehand. Therefore, a marketing specialist must have extensive insight in order to be able to provide interesting ideas for future business development.
Further Explanation
Growing a business is like traveling. So that the trip was not felt, we just enjoy the process of the trip to get to the destination.
Development Stage
At this stage, you just find ideas and initial business concepts. To be able to mature this stage, every businessman must at least conceptualize a business that can answer the following questions:
Does this idea/concept answer the problems and needs in the market? Will this idea/concept be accepted in the market? What is the business structure needed to support this idea/concept? Will this idea/concept benefit me?The point is to make sure that the ideas/concepts that you have thought of are really needed by the market, are able to be realized by you, and also have a clear monetization (ability to make a profit).
Start-up Stage
At this stage, business is in a critical period. All kinds of stress, anxiety, and uncertainty come together at this stage.
At this stage, you are usually still in the "groping" period and are still trying to validate your ideas/concepts. Not infrequently the cost will be far greater than the budget. Broadly speaking, challenges in this stage include:
Proving that our ideas/concepts can really bring us to profit Fund Raising or seeking funding Recruit staff and fill the role vacancy in the organization Manage sales expectations and manage cash reserves Build markets, brands, and customer bases
Growth Stage
Challenges that business people usually have at this stage include:
How to "welcome" revenue and customers who are always growing Manage company operations to be effective and efficient How to win market competition How to increase profit volume
Expansion Stage
Some challenges in this stage include:
Increased competition in the market Thinking about how to acquire competitors How to achieve vertical integration from the production side
Maturity Stage
At this stage, business is "mature" so that all kinds of forms of growth that were sensational at the growth stage and expansion stage no longer exist. At the maturity stage, business growth tends to be slow but full of stability.
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Business Step https://brainly.com/question/12958170
Business insight https://brainly.com/question/12958170
Details
Grade: College
Subject: Business
Keywords: insight, growth, business