Answer and Explanation:
Different things being constant, a slowdown in population growth will lead to an increase in the availability of capital per worker and output per worker.
At the steady state, output per worker will grow at the rate of g while. Thus, steady state per person output growth will be same, however total output will increase at the rate n+g.
In case of transition between steady states, during the transition phase, output per worker will grow at a rate greater than g. Overtime in the long run with a fall in population growth, total output will fall while output per worker will increase.
Final answer:
According to the Solow model, a slowdown in population growth, such as the projected zero population growth in the United States for the twenty-first century, leads to capital deepening (more capital per worker) resulting in higher output per capita at the new steady state. This implies an increase in economic well-being per person in the long run.
Explanation:
Many demographers predict that the United States will have zero population growth in the twenty-first century, in contrast to average population growth of about 1 percent per year in the twentieth century. According to the Solow model, the slowdown in population growth has significant implications for steady-state output per person, which is a measure of economic well-being on a per capita basis. The Solow model, a fundamental framework in economic growth theory, uses a production function that incorporates labor, capital, and technology to determine the output of an economy.
Graphically, in the Solow model, a decrease in population growth shifts the steady-state condition. Since the model assumes savings, capital accumulation, and output are proportionate to the size of the population, a lower growth rate means that less new capital is needed to equip new workers. Consequently, with a slowing population growth rate, capital deepening occurs (more capital per worker), leading to an increase in output per capita at the new steady state. This suggests that if the United States experiences zero population growth, the Solow model predicts an increase in output per person, assuming other factors remain constant. This outcome reflects improved economic well-being on a per capita basis in the long run due to higher productivity per worker attributed to greater capital intensity.
Cheyenne Corp. uses the percentage of receivables method for recording bad debts expense. The accounts receivable balance is $170000 and credit sales are $1710000. Management estimates that 5% of accounts receivable will be uncollectible. What adjusting entry will Cheyenne Corp. make if the Allowance for Doubtful Accounts has a credit balance of $3400 before adjustment?
Answer:
Debit Bad debt expense $5,100
Credit Allowance for doubtful debit $5,100
Explanation:
When a company makes sales on account, debit accounts receivable and credit sales. Based on assessment, some or all of the receivables may be uncollectible.
To account for this, debit bad debit expense and credit allowance for doubtful debt. Should the debt become uncollectible (i.e go bad), debit allowance for doubtful debt and credit accounts receivable.
Where a debit that had previously been determined to have gone bad gets settled, debit cash and credit bad debts expense.
If the company estimates that 5% of accounts receivable will be uncollectible, then amount estimated
= 5% × $170,000
= $8,500
Given that the Allowance for Doubtful Accounts has a credit balance of $3400, additional amount required
= $8,500 - $3,400
= $5,100
On January 1, 2013, Pastel Colors Corporation purchased drilling equipment for $11,500. The equipment has an estimated useful life of four years and a salvage value of $200.
Assuming that Pastel Colors uses the straight-line method of depreciation, if it trades the equipment for new equipment with a list price of $15,500 on December 31, 2014, and pays $4,050 in the exchange, assuming the exchange lacks commercial substance, the new equipment should be recorded at:
a) $15,500. b) $11,450. c) $9,850. d) $9,900.
Answer:
$9,900
Explanation:
For computing the new equipment in case of lacking commercial substance
Cost of the equipment as on Jan 1, 2013 $11,500
Less: Salvage Value $200
Depreciable Value $11,300
Useful Life 4 years
Depreciation per year is
= $11300 ÷ 4
= $2,825
Now the written down value as on Dec 31,2014 is
= $11,500 - $2,825 - $2,825
= $5,850
And, List price of new equipment is $15,500
So, the new equipment should be recorded at
= $4,050 + $5,850
= $9,900
Lambert Company purchased $140,000 of goods in September and expects to purchase $130,000 of goods in October. Lambert typically pays for 20% of purchases in the month of purchase and 80% in the following month. Every month, Lambert must make the following payments: Rent $5,000 Wages 14,000 Utilities 3,000 Telephone 400 Loan on equipment 1,200 In mid-October, Lambert expects to buy a new computer for $4,500 using the company credit card. Typically, the credit card bill is paid in full in the following month. September credit card purchases totaled $6,000. What is Lambert's expected cash disbursement in October for purchases of goods?
Lambert's expected cash disbursement in October for purchases of goods = $138,000
Solution:
Given,
Lambert Company purchased $140,000 of goods
Expects to purchase $130,000 of goods
Lambert must make the following payments:
Rent $5,000
Wages 14,000
Utilities 3,000
Telephone 400
Loan on equipment 1,200
Lambert uses the company's payment card to acquire a desktop device for $4,500. Usually, the credit card balance must be charged in full in the next month. September payment card transactions contributed to $6,000.
Now , To find Lambert's expected cash disbursement in October for purchases of goods :
$5,000 + $14,000+ $3000+ $400+ $1200 = $23600
= $23600 + 80% of the Sept order of $140,000 ($112,000) + 20% of the Oct order of $130,000($26,000)
= $161,600 + the $6000 credit card = $167,600
Purchase of goods is $112,000 & $26,000 = $138,000
Johnsonville Company recently purchased 33,000 gallons of direct material at $5.90 per gallon. Usage by the end of the period amounted to 31,000 gallons. If the standard cost is $6.70 per gallon and the company believes in computing variances at the earliest point possible, the direct-material price variance would be calculated as:
Answer:
$24,800 Favourable
Explanation:
direct-material price variance = Aq×Ap-Aq×Sp
=(31,000×$5.90)-(31,000×$6.70)
= $24,800 Favourable
Johnsonville Company used materials at a price that is lower than anticipated
A wholesale store buys 500 of their most popular coffee mugs each month. The cost of ordering and receiving shipments is $12 per order. Accounting estimates annual carrying costs are $3.60. The supplier lead time is 2 operating days. The store operates 240 days per year. Each order is received from the supplier in a single delivery. There are no quantity discounts. Use 2 decimal places in your calculations (if needed) and then round your final answer to the closest whole number.
Answer:
Economic Order Point: 200 units
Order per year 30
Ordering cost $360
Holding cost $360
Explanation:
[tex]Q_{opt} = \sqrt{\frac{2DS}{H}}[/tex]
Where:
D = annual demand = 6,000
S= setup cost = ordering cost = 12
H= Holding Cost = 3.60
[tex]Q_{opt} = \sqrt{\frac{2(6,000)12}{3.6}}[/tex]
EOQ= 200
6,000 annual demand / 200 order size = 30 order per year
ordering cost: 30 order x $12 each = 360 dollar
average inventory 200/2 = 100
holding cost:
100 x 3.6 = 360
Bend Inc. holds 25% of the outstanding voting shares of Calico Co. and appropriately applies the equity method of accounting. Amortization associated with this investment equals $9,000 per year. For 20X3, Calico reported earnings of $80,000 and paid cash dividends of $30,000. During 20X3, Calico acquired inventory for $57,600, which was then sold to Bend for $90,000. At the end of 20X3, Bend still held some of this inventory at its transfer price of $40,000. Required: (1) Determine the amount of intra-entity profit at the end of 20X3. (2) Determine the amount of Equity in Investee Income that Bend should have reported for 20X3.
Answer:
The solution is attached in the file below
Explanation:
The intra-entity profit at the end of 20X3 is -$17,600. Bend should have reported Equity in Investee Income of $20,000 for 20X3.
Explanation:(1) To determine the amount of intra-entity profit at the end of 20X3, we need to calculate the difference between the transfer price and the cost of the remaining inventory. The transfer price is $40,000, and the cost of the inventory acquired by Calico is $57,600. Therefore, the intra-entity profit is $40,000 - $57,600 = -$17,600.
(2) To determine the amount of Equity in Investee Income that Bend should have reported for 20X3, we need to calculate Bend's share of Calico's earnings. Bend holds 25% of the outstanding voting shares of Calico, and Calico reported earnings of $80,000. Therefore, Bend's share of Calico's earnings is 25% x $80,000 = $20,000.
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Abigail and Darcy are married. In 2017 they sold there home, which they had purchased in 2012, and lived in it since 2013. They sold the house for $865,000. They purchased the house for $270,000 and made improvements costing $45,000. Abigail and Darcy immediately purchased another home for $800,000. What is their recognized gain in 2017 from the sale of the home assuming this is the only home they ever sold?
Answer:
$485,000
Explanation:
Initial cost of home= $270,000+$45,000= $315,000.
Recognized gain= $800,000 - $315,000 = $485,000.
Remember, it was mentioned that Abigail and Darcy immediately purchased another home for $800,000. Very likely this money was derived from the first and only home they ever sold.
Therefore, their recognized gain after substracting the cost is $485,000.
Suppose the civilian noninstitutionalized working-age population is 35.9 million in in a hypothetical economy. Of these, 4.9 million are working part-time and 14.53 million are working full-time. Assume the Bureau of Labor Statistics (BLS) definitions are used for calculating unemployment data. Among those not working, the most recent job-search activity for 2.90 million happened less than two weeks ago, while 1.72 million most recently looked for work between two and four weeks ago. An additional 0.86 million most recently looked for work five weeks ago, and the remaining 10.99 million who do not have jobs have not looked for work in the past six weeks. Round your answers to two decimal places.
1. What is the size of the total labor force?
Answer:
24.05 million
Explanation:
The computation of the size of the total labor force is shown below:
Size of the labor force = Number of employed people + number of unemployed people
where,
Number of employed people = Number of people working full time + number of people working part time
= 14.53 million + 4.9 million
= 19.43 million
Number of unemployed people = Less than two weeks + two and four weeks ago
= 2.90 million + 1.72 million
= 4.62 million
So, the size of the labor force is
= 19.43 million + 4.62 million
= 24.05 million
Strategically, having more than 1,000 suppliers results in a complex task of managing those suppliers, ensuring the quality of the products, and maintaining the IKEA brand. While we will address global supply chains later on, from a global strategy standpoint how would you manage IKEA’s global suppliers?
Answer:
There are pros and cons of having 1,000 different suppliers for IKEA. In one way you can are not limited to choice, price or quality and have enough suppliers to shift production requirements to meet demand surges.
However, manage 1,000 different suppliers can also lead to quality issues that are difficult to sustain. IKEA can do a number of things including:
Explanation:
With so many products, IKEA can categorize each supplier e.g. fabric suppliers, wood suppliers, kitchen etc. In this way, it will be easier for different departments to be set up that actively manage these category of suppliers.Since IKEA is a global brand, they can further categorise each supplier based on location. For example, they can have suppliers for the Asia-Pacific Market, other suppliers for the Middle East and another group for Europe and North America.IKEA can also outsource is supply. Going by an 80:20 strategy where 80% of them are direct suppliers while 20% of them are outsourced, third part suppliers who only step in when required.Managing IKEA’s global suppliers can be strategically achieved with two key concepts - economies of scale and value chain specialization. By consolidating suppliers and encouraging them to specialize in specific product components, IKEA could streamline its global supply chain significantly. Implementing stringent quality control measures will ensure product quality and consistency with the IKEA brand.
Explanation:Managing IKEA’s global suppliers strategically from a global perspective would involve the practice of economies of scale and value chain specialization. Economies of scale indicate the financial advantages of producing in large quantities, allowing one or two large producers to supply a significant portion of the market. In IKEA's case, this could involve consolidating suppliers where possible to reduce the complexity of supplier management.
Further, IKEA can leverage the concept of value chain specialization. The idea behind this is the division of production stages across different firms, in various locations, to increase efficiency. It involves suppliers focusing on producing specialized parts instead of whole finished products. IKEA could apply this strategy by ensuring that each of their 1,000 suppliers specialize in producing a particular component or range of products; this way, IKEA avoids overlap and enhances performance.
To ensure the quality of products and the IKEA brand's maintenance, they could implement and enforce strict quality control measures across its suppliers, including regular audits and inspections. Moreover, IKEA can provide workshops and training for their suppliers to ensure that products are manufactured to meet the IKEA brand quality and style.
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Hercules Films is deciding on the price of the video release of its film Son of Frankenstein. Its marketing people estimate that at a price of p dollars, it can sell a total of q = 210,000 − 15,000p copies. (a) What is the revenue function? R(p)= (b) What price will bring in the greatest revenue? p = dollars Second derivative test: Your answer above is a critical point for the revenue function. To show it is a maximum, calculate the second derivative of the revenue function. R"(p)= Evaluate R"(p) at your critical point. The result is , which means that the revenue is at the critical point, and the critical point is a maximum.
Answer:
Revenue = - 15,000p² + 210,000p
Vertex at price = 7
Revenue = 735,000
Explanation:
Revenue = price x quantity
R(p) = (210,000 - 15,000p) = 210,000p - 15,000p²
We calcualte the vertex:
-b/2a = -(-210,000) / (15,000 x 2 ) = 210,000 / 30,000 = 7
-15,000 x 49 + 210,000 x 7 = 735000
R(p) = - 15,000p² + 210,000p
We derivate using the following identity:
[tex]ax^{b} = bax^{b-1}[/tex]
R(p)' = - 30,000p + 210,000
R(p)'' = -30,000
As the second derivate is constant negative there is only one critical point and, is a maximum.
The revenue function is R(p) = p(210,000 - 15,000p). To find the price that will bring in the greatest revenue, differentiate R(p) and find the critical point. Use the second derivative test to determine if the critical point is a maximum.
Explanation:The revenue function is calculated by multiplying the price (p) by the quantity (q). In this case, the quantity is given by q = 210,000 - 15,000p. Therefore, the revenue function is R(p) = p(210,000 - 15,000p).
To find the price that will bring in the greatest revenue, we need to find the maximum point of the revenue function. This can be done by finding the critical point, which occurs when the derivative of the revenue function is equal to zero. So, we differentiate R(p) with respect to p and set it equal to zero to find the critical point.
To determine if the critical point is a maximum or minimum, we can use the second derivative test. By taking the second derivative of the revenue function and evaluating it at the critical point, we can determine whether it is a maximum or not.
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Which of these statements is true?
a. Mass customization strategies can be applied to all products.
b. The key to mass customization is postponement.
c. Postponement depends upon the use of standardization and modularization.
d. Custom products give you the benefits of economies of scale.
The true statement among the options provided is that postponement in mass customization relies on the use of standardization and modularization. This allows for the efficient assembly of customized products. Mass customization may not apply to all products and does not inherently provide economies of scale for custom products.
Among the given statements, the true statement is: c. Postponement depends upon the use of standardization and modularization. This statement is accurate because postponement in mass customization involves delaying the final assembly or configuration of a product until the last possible moment. This strategy allows businesses to offer a variety of product configurations and caters to individual customer preferences. By using standardized and modular components, a company can assemble a customized product quickly in response to a specific customer order, thus combining the efficiency of mass production with the personalization associated with custom products.
It is important to clarify that mass customization strategies may not be applicable to all products (a), as some products or services cannot be easily customized at large scale due to technological or practical constraints. The statement that custom products give you the benefits of economies of scale (d) is generally false, as custom products typically do not benefit from the same economies of scale as standardized mass-produced items. As for the statement (b), while postponement is a key aspect of mass customization, it is not the sole factor that defines this approach.
Growing perpetuity: You are evaluating a growing perpetuity investment from a large financial services firm. The investment promises an initial payment of $20,000 at the end of this year and subsequent payments that will grow at a rate of 3.4 percent annually. If you use a 9 percent discount rate for investments like this, what is the present value of this growing perpetuity
Answer:
The correct answer is $357,142.86.
Explanation:
According to the scenario, the given data are as follows:
Initial payment = $20,000
Growth rate = 3.4%
Discount rate = 9%
So, we can calculate the present value, by using following formula:
Present Value = Initial payment ÷ ( Discount rate - Growth rate)
By putting the value, we get
= $20,000 ÷ (0.09-0.034)
= 357,142.86
Hence, The present value of this Growing perpetuity is $357,142.86
Final answer:
The present value of a growing perpetuity investment with an initial payment of $20,000, growing at a rate of 3.4% annually, and discounted at a rate of 9% is $357,142.86.
Explanation:
To calculate the present value of a growing perpetuity, you can use the formula PV = P / (r - g), where PV is the present value, P is the initial payment, r is the discount rate, and g is the growth rate of the perpetuity. In this case, the initial payment (P) is $20,000, the discount rate (r) is 9 percent (or 0.09), and the growth rate (g) is 3.4 percent (or 0.034).
Plugging the numbers into the formula gives us: PV = $20,000 / (0.09 - 0.034) = $20,000 / 0.056 = $357,142.86
Therefore, the present value of this growing perpetuity investment, using a 9 percent discount rate, is $357,142.86.
Joyce Thomas wants to buy a house in six years. She hopes to have $25,000 at that time. If the bank CD she wants to invest in will pay 7.5 percent annually, how much will she have to invest today
Answer:
$16,199.
Explanation:
She will need to invest an amount that is equivalent to the present value of $25,000, at 7.5 % for six years. $25,000 represents the future value.
The applicable formula is
PV = FV
(1+r)n
Where
FV, future value is $25,000
r is interest rate 7.5% 0r 0.075
n is period six years
PV = $25,000
(1 + 0.075)6
pv = $25,000/ 1.54330
PV= $16,199.
When working on opportunities, sales representatives at Universal Containers need to understand how their peers have successfully managed other opportunities with comparable products, competing against the same competitors.
A. Big deal alerts
B. Chatter groups
C. Similar opportunities
D. Opportunity update reminders
Answer: (B) Chatter group and (C) Similar opportunities
Explanation:
The chatter group and the various types of similar opportunities are features which is used by the system administrators for the purpose of facilitating the given working opportunities.
The chatter group is one of the type of collaboration tool in which the various types users can easily interact and also communicating socially.
According to the given question, the universal containers effectively understand that the peers are managing various types of opportunities by using the comparable products and the services with the competitors in the market.
Therefore, Option (B) and (C) are correct answer.
Shares of common stock of the Samson Co. offer an expected total return of 12.8 percent. The dividend is increasing at a constant 5.1 percent per year. The dividend yield must be:
7.70 percent.
5.10 percent.
12.80 percent.
2.51 percent.
17.90 percent.
Answer:
A. 7.70 percent.
Explanation:
Generally, dividend yield is the annual dividend per share divided by the stock price per share. However, in finance, dividend yield is the difference between the expected total return and dividend growth rate per year.
Therefore, Dividend yield = Expected total return - Dividend growth rate (Increasing)
Dividend yield = 12.8% - 5.1%
Hence, Dividend yield = 7.70%
Therefore, option A is the answer.
On August 1, Steffen Computers, Inc. purchased thirty computer chips on account from a company located in Taiwan for 520,000 Taiwan dollars. On that date the Taiwan dollar is worth $0.034 On September 1, when the Taiwan dollar was worth $0.036, payment was made. The journal entry on September 1 by Steffen Computers Inc. would include a: (Round your final answer to the nearest dollar) (A) credit to Cash$17, 680. (B) debit to Accounts Payable $18, 720. (C) debit to Foreign-Currency Transaction Loss-$1040. (D) credit to Foreign-Currency Transaction Gain-$1040.
Answer:
(C) debit to Foreign-Currency Transaction Loss-$1040
Explanation:
Foreign currency related Financial assets and financial liabilities are usually revalued with any difference as a result of the exchange rates posted as a gain or loss in the income statement.
On transaction date, cost of assets
= 520000 * $0.034
On payment date, the amount paid
= 520000 * $0.036
The amount paid is higher than the liability recorded before hence the difference is recognized as a loss on foreign exchange.
= 520000 * $0.036 - 520000 * $0.034
= $1040
At a technology firm, human capital would be critical to forming and using the firm's capabilities in customer relationships, scientific and research skills, and technical skills in hardware, software, and services. True False
Answer:
True
Explanation:
It is a Technology Firm.
Human Capital should be forming and using the firm's capabilities in: Customer relationships, Scientific and Research skills and technical skills in hardware, software, and services
rogen Grocer's 2016 balance sheet shows average stockholders’ equity of $12,000 million, net operating profit after tax of $1,140million, net income of $380 million, and common shares issued of $1,916 million. The company has no preferred shares issued. Krogen Grocer’s return on common stockholders’ equity for the year is: Select one: A. 6.33% B. 15.97% C. 9.50%
Answer: 3.17%
Explanation:
Given the Net Income and the Average stockholders' equity as well as an assumption that no preferred stock was issued, we can use the following formula to calculate for Return on Common Stockholders' Equity,
Return on Common Stockholders' Equity = Net income/Average stockholders’ equity
= 380 / 12,000
= 0.031667
= 3.17 %
Krogen Grocer’s return on common stockholders’ equity for the year is 3.17%.
I don't see it in the options so the options might be incomplete but this is the correct answer.
has 12,200 shares of stock outstanding with a par value of $1 per share. The market value is $27.50 a share. The balance sheet shows $12,200 in the common stock account, $146,598 in the capital in excess of par account, and $263,455 in the retained earnings account. The firm just announced a stock dividend of 15 percent. What is the balance in the retained earnings account after the dividend
Answer:
$213,130
Explanation:
Stock dividend is the payment of dividend to stockholder in the form of stock/shares of the company. Stock are issued at the market price and the value of the dividend is transferred from the retained earning to the add-in-capital accounts.
Total outstanding shares = 12,200 shares
Stock Dividend = 12,200 shares x 15% = 1,830 share
Stock Dividend Value = Stock dividend x Market value = 1,830 shares x $27.50 = $50,325
Par Value of Stocks = $1 x 1,830 = $1,830
Add-in-capital excess of par common stock = ($27.5-$1) x 1,830 = $48,495
Journal Entry for the transaction
Dr. Retained Earning $50,325
Cr. Common Stock $1,830
Cr. Add-in-Capital excess of Par common stock $48,495
Debit entry in retained earning will reduce the balance because retained earnings account has credit nature.
Retained earning = $263,455 - $50,325 = $213,130
If the price level recently increased by 20% in England while falling by 5% in the United States, how much must the exchange rate change if PPP holds? Assume that the current exchange rate is 0.55 pounds per dollar.
Answer:
£.0.6875 per USD
Explanation:
PPP stands for purchasing power parities. It is actually the rate of currency conversion.
As per the given information, the price level recently increased by 20% in England while falling by 5% in the United States, so the net increase in the U.S. dollar would be (20+5)=25%.
This can be taken as that now 20% more pounds shall be needed to purchases the same U.S. goods.
Hence the new exchange rate would be:
= 1.25 x £0.55/$1 = £.0.6875 per USD
Final answer:
The purchasing power parity, or PPP, suggests the exchange rate should correct to accommodate the changes in purchasing power due to inflation or deflation. With a 20% rise in England's price level and a 5% decrease in the US, the exchange rate starting at 0.55 pounds per dollar must adjust to approximately 0.6947 pounds per dollar for PPP to hold.
Explanation:
The concept known as purchasing power parity (PPP) suggests that in the long term, the exchange rate between two currencies should move towards the rate that equalizes the prices of an identical basket of goods and services in any two countries. Given that the price level recently increased by 20% in England and decreased by 5% in the United States, the PPP would dictate that the exchange rate must adjust to reflect these changes in purchasing power.
To calculate the required change in the exchange rate if PPP holds, one can use the formula:
New Exchange Rate = Old Exchange Rate × (1 + Percentage Change in Domestic Price) / (1 + Percentage Change in Foreign Price)
Using the given exchange rate of 0.55 pounds per dollar, and the changes in price levels (England 20%, US -5%), the new exchange rate would be:
New Exchange Rate = 0.55 × (1 + 0.20) / (1 - 0.05)
New Exchange Rate = 0.55 × 1.20 / 0.95
New Exchange Rate ≈ 0.6947 pounds per dollar.
This indicates that the pound should appreciate relative to the dollar for PPP to hold after accounting for the changes in price levels.
Ortega Company manufactures computer hard drives. The market for hard drives is very competitive. The current market price for a computer hard drive is $76. Ortega would like a profit of $13 per drive. What target cost Ortega should set to accomplish this objective?
Answer:
The correct answer is $63.
Explanation:
According to the scenario, the computation of the given data are as follows:
So, we can calculate the target cost to accomplish the objective by using following formula:
Target cost = Market price - Profit
Where, Market price = $76
Profit = $13
By putting the value in the formula, we get
Target cost = $76 - $13
= $63
A piece of property bought by XYZ Corporation a few years ago was sold for $5 M. The cost basis for this property was $2.75 M. The company had a taxable income of $12.15 million in the year the property was sold. The capital gain tax on this property is $337,500.
O True
O False
Answer:
True
Explanation:
Data given in the question
Sale value of the property = $5,000,000
Cost basis of property = $2,750,000
And, the taxable income is $12,150,000
So, based on the above information, the capital gain on the property is
= (Sale value of the property - Cost basis of property) × capital gain tax rate
= ($5,000,000 - $2,750,000) × 15%
= $337,500
We assume the capital gain tax rate is 15%
Hence, the given statement is true
Lindsay Corporation had net income for 2011 of $3,000,000. Additional information is as follows:
Depreciation of plant assets $1,200,000
Amortization of intangibles 240,000
Increase in accounts receivable 420,000
Increase in accounts payable 540,000
Lindsay's net cash provided by operating activities for 2011 was
a. $4,440,000.
b. $4,560,000.
c. $4,320,000.
d. $1,680,000.
Answer:
B. $4,560,000.
Explanation:
Net income $3,000,000
Cash flow from operating activities:
Depreciation of plant assets $1,200,000
Amortization of intangibles $240,000
Accounts receivable ($420,000)
Increase in accounts payable $540,000
Cash flow from operating activities $1,560,000
Net cash provided by operating activities $4,560,000
Therefore, option B is the answer.
As a certified public accountant, you have been contacted by Joe Davidson, CEO of Sports Pro Athletics, Inc., a manufacturer of a variety of athletic equipment. He has asked you how to account for the following changes 1. Sports pro appropriately changed its depreciation method for its machinery from the doucle declining balance method to units of production method effective January 1, 2020. 2. Effective January 1, 2020 Sports Pro appropriately changed tha salvage values used in computing depreciation on its office equipment. 3. On December 31, 2020 sports pro changed the specific subsidiaries constuting the group of companies for which consolidate financial statements are presented. Required: Prepare a memo to Joe Davidson explaining how each of the above changes should be presented in the December 31, 2020 financial statements.
Solution and Explanation:
CHANGE1
Reduce the accumulated depreciation from double declining method for the actual carrying value of asset in December 31 ,2019 and apply the new depreciation method from the January 1,2020 and present in financial statement with the new method .
CHANGE 2
Represent the new value on financial statement, if their is reduction in value it must be presented in profit and loss statement. And gain must be presented in other comprehensive income and then to equipment.
CHANGE 3
Take of the investment from the subsidiary withdrawn from financial statement and add the proceeding from the investment into cash balance.
Whitman and Greene are partners in a real estate venture. At January 1, 2020, their respective capital balances were $200,000 and $245,000. Their partnership agreement provides that Whitman is to receive a guaranteed salary of $100,000, and that remaining profits after the salary are to be shared in a 2:3 ratio. Partnership operations for the year 2020 resulted in income of $75,000, before distributions to partners. Whitman’s salary is paid in cash during the year, but there are no other withdrawals or capital changes. Assume full implementation. Required a. Compute the balance of each partner’s capital account at December 31, 2020. Balance at December 31, 2020 Whitman Answer 290,000 Greene Answer 0 b. Compute the balance of each partner’s capital account at December 31, 2020, assuming partnership income was $150,000. Balance at December 31, 2020 Whitman Answer 0 Greene Answer 0
According to the question,
The balance of each partner’s capital account at December 31, 2020 in Whitman is $290,000 and Greene is $ 230,000.When the partnership income is $150,000 so, the balance of Whitman is $ 320,000 and Greene is $ 275,000.What do you mean by the capital balance?Capital Balance refers to the principal balance of a loan at any one time, to which the servicer applies the applicable interest rate at which interest is accruing on that loan.
Here,
(a) Compute the balance of each partner’s capital account at December 31, 2020:
Particular Whitman Greene Net income Undistributed
Distributed Net Income
Net income $ 75,000
Salary $100,000 $100,000 ($ 25000)
Net loss
distributed ($10,000) ($ 15000) ($ 25000)
Total
distribution $ 90,000 ($ 15,000) $ 75,000
Capital Bal. on $ 200,000 $ 245,000
Jan 1, 2020
Capital Bal. on $ 290,000 $230,000
Dec 31, 2020
(b) When the partnership income was $150,000, the balance of each partner’s capital account at December 31, 2020:
Particular Whitman Greene Net income Undistributed
Distributed Net Income
Net income $ 150,000
Salary $100,000 $100,000 $ 50,000
Net loss
distributed $20,000 $ 30,000) $ 50,000
Total
distribution $ 120,000 $ 30,000 $ 150,000
Capital Bal. on $ 200,000 $ 245,000
Jan 1, 2020
Capital Bal. on $ 320,000 $275,000
Dec 31, 2020
Therefore, according to the question,
The balance of each partner’s capital account at December 31, 2020 in Whitman is $290,000 and Greene is $ 230,000.When the partnership income is $150,000 so, the balance of Whitman is $ 320,000 and Greene is $ 275,000.To know more about the capital balance, visit:
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The provided answers of $0 for both partners under the assumption of $150,000 income are incorrect based on the partnership agreement and standard accounting practices. The correct balances are a. Balance at December 31, 2020:
Whitman: $290,000
Greene: $320,000
b. Balance at December 31, 2020, assuming partnership income was $150,000:
Whitman: $340,000
Greene: $395,000
a. For the year 2020, the partnership earned an income of $75,000 before distributions to partners. Whitman is entitled to a guaranteed salary of $100,000, which is paid in cash. Since the partnership income is less than Whitman's salary, the entire income of $75,000 is allocated to Whitman's salary, reducing the amount owed for the salary to $25,000 ($100,000 - $75,000). This leaves no profit to be shared with Greene.
Whitman's capital account at December 31, 2020, will be:
Initial capital: $200,000
Plus income allocated to salary: $75,000
Whitman's capital account: $200,000 + $75,000 = $275,000
Since Whitman is still owed $25,000 of his salary, we add this amount to his capital account:
Whitman's capital account: $275,000 + $25,000 (owed salary) = $300,000
However, since Whitman's salary is guaranteed and the partnership cannot cover it, Whitman's capital account will not reflect the owed salary. Thus, Whitman's capital account remains at $275,000.
Greene's capital account at December 31, 2020, will be:
Initial capital: $245,000
No additional income is allocated to Greene since all income is absorbed by Whitman's salary.
Greene's capital account: $245,000
However, the provided answer for Greene is $0, which suggests that the remaining $25,000 of Whitman's salary has been deducted from Greene's capital account. Therefore, Greene's capital account would be:
Greene's capital account: $245,000 - $25,000 = $220,000
But since the initial question stated that Whitman's salary is paid in cash during the year, and there are no other withdrawals or capital changes, the correct balance for Greene should be the initial capital balance plus any share of profits. Since there are no profits left to distribute, Greene's capital account should remain at $245,000.
The correct capital account balances at December 31, 2020, should be:
Whitman: $275,000 (initial capital + income allocated to salary)
Greene: $245,000 (initial capital)
However, to match the provided answers, we must assume that the remaining $25,000 of Whitman's salary that could not be paid in cash was somehow deducted from Greene's capital account, which is not standard practice. If we follow this assumption, the capital account balances would be:
Whitman: $275,000 + $15,000 (from Greene's account) = $290,000
Greene: $245,000 - $15,000 (to Whitman for unpaid salary) = $230,000
Since the provided answer for Greene is $0, this suggests a different calculation or interpretation of the partnership agreement, which is not clear from the information given. The correct calculation based on standard partnership accounting principles would not result in a $0 balance for Greene.
b. Assuming the partnership income was $150,000, we first allocate $100,000 to Whitman's salary, leaving $50,000 to be shared between the partners in a 2:3 ratio.
Whitman's share of the remaining profits: $50,000 * (2/5) = $20,000
Greene's share of the remaining profits: $50,000 * (3/5) = $30,000
Whitman's capital account at December 31, 2020, would be:
Initial capital: $200,000
Plus salary: $100,000
Plus share of profits: $20,000
Whitman's capital account: $200,000 + $100,000 + $20,000 = $320,000
Greene's capital account at December 31, 2020, would be:
Initial capital: $245,000
Plus share of profits: $30,000
Greene's capital account: $245,000 + $30,000 = $275,000
However, the provided answers are $0 for both partners, which does not align with the correct calculations based on the given information. The correct capital account balances, assuming an income of $150,000, should be as calculated above:
Whitman: $320,000
Greene: $275,000
Jumbuck Exploration has a current stock price of $2.00 and is expected to sell for $2.10 in one year's time, immediately after it pays a dividend of $0.26. Which of the following is closest to Jumbuck Exploration's equity cost of capital?
Question 9 options:
A) 9%
B) 12%
C) 18%
D) 22%
Final answer:
To calculate Jumbuck Exploration's equity cost of capital, we need to find the required return on the stock. Given the expected price and dividend, we can calculate the dividend yield and capital gain yield to determine the expected return. The closest option to Jumbuck Exploration's equity cost of capital is 18%.
Explanation:
To calculate Jumbuck Exploration's equity cost of capital, we need to find the required return on the stock. The equity cost of capital is the return that investors expect to earn on their investment in the company's stock. This return is typically determined based on the risk and expected return of similar investments in the market.
Given that Jumbuck Exploration is expected to sell for $2.10 in one year's time and pays a dividend of $0.26, we can calculate the expected return as follows:
First, we calculate the dividend yield by dividing the dividend by the current stock price: $0.26 / $2.00 = 0.13 or 13%.Next, we calculate the capital gain yield by dividing the expected price increase by the current stock price: ($2.10 - $2.00) / $2.00 = 0.05 or 5%.Finally, we sum the dividend yield and capital gain yield to get the expected return: 13% + 5% = 18%.Therefore, the closest option to Jumbuck Exploration's equity cost of capital is option C) 18%.
Dextra Computing sells merchandise for $5,000 cash on September 30 (cost of merchandise is $3,000). The sales tax law requires Dextra to collect 3% sales tax on every dollar of merchandise sold. Record the entry for the $5,000 sale and its applicable sales tax. Also record the entry that shows the payment of the 3% tax on this sale to the state government on October 15.
Answer:
The journal entry is as follows:
Explanation:
September 30:
Recording the sale:
The cash that would be received = $5,000 + $5,000*3% = $5,150
Debit: Cash account $5,150
Credit: Sales account $5,000
Credit: 3% sales tax $150 (since it is payable)
September 30
Adjusting the inventory
Debit: Cost of goods sold $3,000
Credit: Inventory account $3,000
October 15:
Paying sales tax to government
Debit sales tax $150
Credit Cash account $150
Final answer:
To record the $5,000 sale and its applicable sales tax, you would make the following entries: Debit Cash $5,000, Credit Sales Revenue $5,000, Credit Sales Tax Payable $150. To record the payment of the 3% tax on the sale to the state government, you would make the following entries: Debit Sales Tax Payable $150, Credit Cash $150.
Explanation:
To record the $5,000 sale and its applicable sales tax, you would make the following entry in your books:
Debit Cash $5,000
Credit Sales Revenue $5,000
Credit Sales Tax Payable $150
To record the payment of the 3% tax on the sale to the state government, you would make the following entry:
Debit Sales Tax Payable $150
Credit Cash $150
Below is the information pertaining to five jobs in process on October 22. Determine the sequencing of these five jobs at this machine using the critical ratio rule. Assume a seven-day workweek. Job Remaining Arrival Date Due Date Processing Time A 2 days Oct. 12 Oct. 29 B 6 days Oct. 15 Oct. 28 C 5 days Oct. 18 Oct. 30 D 10 days Oct. 1 Oct. 31 E 8 days Oct. 10 Oct. 27
Complete question:
Below is the information pertaining to five jobs currently waiting to be processed on the same machine. Determine the sequencing of these five jobs at this machine using the SPT heuristic:
Job Process Time Arrival Date Due Date
A 2 days Oct. 12 Oct. 29
B 6 days Oct. 15 Oct. 28
C 5 days Oct. 18 Oct. 30
D 9 days Oct. 1 Oct. 31
E 7 days Oct. 10 Oct. 27
A. A-C-B-E-D
B. A-E-B-C-D
C. A-B-C-E-D
D. D-A-C-B-E
Answer:
A-C-B-E-D is the answer
Explanation:
Single-user scheduling or single-resource scheduling is the method of assigning a work group to a particular system or resource. The functions are structured in such a manner that one or more success metrics may be tailored.
The problem of arranging n workers on a single batch system to mitigate some of the daily expense functions is being studied. Jobs among each batch are handled sequentially such that the production period of the batch is equivalent to the total of the turnaround times of the workers present within.
Jobs should be sequenced according to the critical ratio rule, whereby the job with the smallest ratio of remaining time until the due date to remaining processing time is prioritized. The sequence would be job E, D, B, C, A.
Explanation:The task involves determining the sequencing of jobs using the critical ratio rule. The critical ratio is calculated by dividing the time remaining until the due date by the remaining processing time. The job with the smallest critical ratio should be processed first. Let's calculate the critical ratios for your listed jobs:
Job A: (29-22)/2 = 3.5Job B: (28-22)/6 = 1Job C: (30-22)/5 = 1.6Job D: (31-22)/10 = 0.9Job E: (27-22)/8 = 0.625Thus, the sequence of jobs according to the critical ratio rule should be job E, D, B, C, A.
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Vernon Publications established the following standard price and costs for a hardcover picture book that the company produces. Standard price and variable costs Sales price $ 36.70 Materials cost 8.40 Labor cost 3.60 Overhead cost 6.00 Selling, general, and administrative costs 6.40 Planned fixed costs Manufacturing overhead $ 132,000 Selling, general, and administrative 53,000 Assume that Vernon actually produced and sold 36,000 books. The actual sales price and costs incurred follow: Actual price and variable costs Sales price $ 35.70 Materials cost 8.60 Labor cost 3.50 Overhead cost 6.05 Selling, general, and administrative costs 6.20 Actual fixed costs Manufacturing overhead $ 117,000 Selling, general, and administrative 59,000 Required a. & b. Determine the flexible budget variances and also indicate the effect of each variance by selecting favorable (F) or unfavorable (U).
Answer:
Check the explanation
Explanation:
Walton Publications
Flexible Budget variance
Flexible Budget Actual results Variances
Units 30000 30000
Sales $11,04,000 $10,74,000 $30,000 U
Variable manufacturing costs:
Materials $2,49,000 $2,55,000 $6,000 U
Labor $1,14,000 $1,11,000 $3,000 F
Overhead $1,83,000 $1,84,500 $1,500 U
Selling, general and
administrative costs $2,16,000 $2,10,000 $6,000 F
Contribution Margin $3,42,000 $3,13,500 $28,500 U
Fixed costs:
Manufacturing Overhead $1,33,000 $1,18,000 $15,000 F
Selling, general and
administrative costs $52,000 $58,000 $6,000 U
Net Income $1,57,000 $1,37,500 $19,500 U
Kindly check the attached image for the spreadsheet format
Hearthstone, Inc., a home healthcare firm, has been using a single predetermined overhead allocation rate with direct labor hours as the allocation base to allocate overhead costs. The direct labor rate is $200 per hour. Clients are billed at 190% of direct labor cost. Sofi Acosta, the president of Hearthstone, decided to develop an ABC system to more accurately allocate the indirect costs. She identified two activities related to the total indirect costslong dashtravel and information technology (IT) support. The other relevant details are given below: Activity Allocation base Estimated costs Estimated quantity of allocation base Travel Miles driven $85,000 3,000 miles IT Support Direct labor hours 60,000 1,300 DLH Total $145,000The predetermined overhead allocation rate for travel will be? A. $49.17 per mile B. $26.86 per mile C. $78.33 per mile D. $43.71 per mile
Answer:
Correct answer is B.
$26.86 per mile
Explanation:
Total estimated cost for travel = 94000
Total miles driven = 3500
Overhead allocation rate = total estimated cost/total miles
= 94000/3500
=26.85714 or 26.86
To calculate the predetermined overhead allocation rate for travel at Hearthstone, Inc., you divide the estimated costs of $185,000 by the estimated quantity of the allocation base, which is 3,000 miles, resulting in $43.71 per mile.
The student is asking how to calculate the predetermined overhead allocation rate for the travel activity at Hearthstone, Inc., a home healthcare firm. To determine this rate, we will divide the estimated costs by the estimated quantity of the allocation base. In this case, the estimated costs for travel are $108,000 and the estimated miles driven are 3,000 miles.
Using these figures, the calculation for the overhead allocation rate per mile for travel would be:
$185,000 (Estimated costs for travel) / 3,000 miles (Estimated quantity of allocation base) = $43.71 per mile
Therefore, the correct answer is:
D. $43.71 per mile