Answer:
If Mary's idea is implemented the break-even point would increase from 16,000 units to 21,800 units
Explanation:
The break-even point is the level of activity where a business makes no profit or loss. At this level of activity, the total contribution equals the total fixed costs.
To calculate the break even point in units, we use the formula below:
Break-even point = Fixed cost for the period / selling price - variable cost
Current break-even point = 128,000/(20-12)
= 16,000 units
With Mary's idea, the break-even point will be
New break-even point = ( 128,000+ 24600)/(19-12)
= 21,800 units
If Mary's idea is implemented the break-even point would increase from 16,000 units to 21,800 units
Finance is: a plan of action or policy designed to achieve a major or overall aim of a firm. the study of accumulating and reporting on financial information about the performance, financial position, and cash flows of a business. the detailed coordination of a complex operation involving many people, facilities, or supplies. the science of money management methods of raising funds and managing money. the process of interesting potential customers and clients in your products/services.
Answer: The science of money management methods of raising funds and managing money.
Explanation:
Finance is the art and science of money. It refers to everything that has to do with the process of generating and managing money.
Finance involves various activities such as banking, credit, capital solicitation, investing etc.
Those Aforementioned activities help players in the field of finance to ensure the efficient working of money for example, banking helps in money management whilst investing leads to the generation of money.
The study of Finance is therefore immensely helpful in the Economy because it shows how money flows and how to use it to meet economic objectives.
Brandon Ramirez wants to set up a scholarship at his alma mater. He is willing to invest $320,000 in an account earning 11 percent. What will be the annual scholarship that can be given from this investment
Answer:
$35,200
Explanation:
Given that
Invested amount = $320,000
Rate of interest = 11%
So by considering the above information, the amount of annual scholarship that can be given from this investment is
= Invested amount × Rate of interest
= $110,000 × 11%
= $35,200
By multiplying the invested amount with the rate of interest we can find out the annual scholarship amount
the annual scholarship that can be given from this investment:
$35,200
Considering that $320,000 is the amount invested.
Interest rate: 11%
Thus, taking into account the data above, the yearly scholarship amount that can be awarded from this investment is
= Amount invested × Interest rate
$110,000 × 11%
$35,200
The annual scholarship amount can be calculated by multiplying the invested amount by the interest rate.
Central Perk orders their organic coffee filters from a South American supplier that mails them as inexpensively (hence, as slowly) as possible. Central Perk uses 80 filters a day with a standard deviation of 5 filters per day. It would be disastrous if they ran out of these filters, years ago customers caught them using paper towels from the men's room and business suffered. They have set their service level at 99% in hopes of avoiding a similar situation. It takes a fortnight to receive a shipment and the standard deviation of the shipping time is two days. What is safety stock they need to carry to meet the 99% service level?
The safety stock they need to carry to meet the 99% service level is 395.
Safety stockFirst step is to find dL
dL = √ ( Lσ d2 + d 2σ L2 )
dL= √( 350 + 25600)
dL=√25,950
dL= 161
z-score at 99% SL=2.33
Second step
Safety stock = 2.33× 161
Safety stoc= 375
Inconclusion the safety stock they need to carry to meet the 99% service level is 395.
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Central Perk should keep approximately 285 filters in safety stock to maintain their 99% service level. This computation considers the average demand, the standard deviation of demand, and the lead time of the shipments.
Explanation:The number of coffee filters Central Perk requires each day is subject to variation, so safety stock is needed to ensure a 99% service level. Safety stock can be calculated using the formula Safety Stock = Z * SQRT(Avg. Lead Time * StdDev^2(Demand) + Avg. Demand^2 * StdDev^2(Lead Time)), where Z is the number of standard deviations corresponding to the desired service level.
In this case, assuming 'fortnight' means 14 days and using Z=2.33 for 99% service level, we plug the figures into the formula: Safety Stock = 2.33 * SQRT(14 * (5^2) + (80^2 * 2^2)), which equates to approximately 285 filters. Therefore, Central Perk should keep approximately 285 filters in safety stock to maintain their 99% service level.
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Iron Works, Inc. purchased a metal casting machine on January 1, 2014. The cost of the machine was $32,000. Its estimated residual value was $7,000 at the end of an estimated 10-year life. The company expects to produce a total of 20,000 units. a. Calculate depreciation expense for 2014 and 2015 using the straight-line method. b. Calculate depreciation expense for 2014 and 2015 using the double-declining balance method. c. Calculate the depreciation expense for 2014 and 2015 using the units-of-production method. The company produced 1,200 units in 2014 and 1,650 units in 2015. (Round your final answer to nearest dollar value.)
Answer:
a. Depreciation expenses in 2014 and 2015 using straight-line method is the same for each year at $2,500
b. Depreciation expenses using double-declining balance method:
+ 2014: $6,400
+ 2015: $5,120
c. Depreciation expenses using units-of-production method:
+ 2014: $1,500
+ 2015: $2,062.5
Explanation:
a. Using straight-line method, the depreciation expenses will be the same for the 10 useful life of the asset which is calculated as: (Historical asset cost - estimated residual value) / useful life = (32,000 - 7,000) /10 = $2,500
b. Using declining balance method:
Depreciation in a year = 2 * Depreciation rate x Asset carrying value = 2 * (1/useful life) x Asset carrying value.
So, depreciation in 2014 = 2 x 1/10 x 32,000 = $6,400
depreciation in 2015 = 2 x 1/10 x ( 32,000-6,400) = $5,120
c. Using the units-of-production method:
Depreciation expenses for a year will be equal [ (Historical cost - estimated residual value)/ Expected production capacity] x Production level during a year
So, depreciation in 2014 = (32,000-7,000)/20,000 x 1,200 = $1,500
depreciation in 2015 = (32,000-7,000)/20,000 x 1,650 = $2,062.5
One component of the pension liability under both U.S. GAAP and IFRS is prior service cost (or past service cost under IFRS). ABC Company is trying to calculate the effect of PSC on their financial statements under both standards. Which of the following statements is true related to this analysis?
Answer:
Option A is correct which states that".There is no such thing, in IASB standards, as a "contingent asset"
If Wild Widgets, Inc., were an all-equity company, it would have a beta of 1.05. The company has a target debt-equity ratio of .55. The expected return on the market portfolio is 10 percent and Treasury bills currently yield 3.2 percent. The company has one bond issue outstanding that matures in 30 years, a par value of $1,000, and a coupon rate of 6.1 percent. The bond currently sells for $1,055. The corporate tax rate is 24 percent.
What is the company’s weighted average cost of capital? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Answer:
WACC is 10.18%
Explanation:
In order to compute the WACC for Wild Widgets,Inc,we need first of all ascertain the cost of debt kd and the cost of equity ke.
The cost of debt is the same the yield to maturity where yield to maturity can be computed using rate formula in excel:
=rate(nper,pmt,-pv,fv)
nper is the number of years before maturity which is 30
pmt is the coupon payable on the bond,6.1%*$1000=$61
pv is the current price of the bond at $1,055
fv is the face value of the bond at $1,000
=rate(30,61,-1055,1000)
rate=5.71%
pretax cost of debt is 5.71%
In order to calculate levered cost of equity,we need to re-lever the beta value of 1.05 using the below formula:
Levered β = Unlevered β ×(1 + [(D/E) × (1−t) )
Unlevered β=1.05
D/E=0.55
tax=tax =24%=0.24
Levered β=1.05*(1+(0.55)*(1-0.24)
=1.05*(1+(0.55)*(0.76)
=1.49
Levered cost of equity is then computed using the levered beta of 1.49
Ke=risk free rate+Levered beta*(market return-risk-free rate)
risk free rate is 3.2%
market return is 10%
ke=3.2%+1.49(10%-3.2%)
ke=13.33%
WACC=Ke*(E/V)+Kd*(D/V)*(1-t)
Ke is 13.33%
kd is 5.71%
D/E=0.55=0.55/1 which means that debt has 0.55 equity has 1
D/V=D/E+V=0.55/1+0.55=0.35
E/V=E/E+V=1/(1+0.55)=0.65
WACC=13.33%*0.65+5.71%*(0.35)*(1-0.24)
=13.33%*0.65+5.71%*(0.35)*(0.76)
=0.086645 +0.0151886
=10.18%
An 80-room motel forecasts its average room rate to be $68.00 for next year at 75% occupancy. The rooms department has a fixed wage cost of $186,000. Variable wage cost for housekeeping is $9.00 an hour; it takes one-half hour to clean a room. Fringe benefits are 18% of total wages. Linen, laundry, supplies, and other direct costs are $2.75 per occupied room per day. The motel also has a 50-seat, limited-menu snack bar. Breakfast revenue is derived solely from customers staying overnight in the motel. On average, 40% of occupied rooms are occupied by two persons and, on average, 80% of overnight guests will eat breakfast. Average breakfast check is $6.50. Lunch seat turnover is 1.5, with an average check of $8.95. The average dinner check is $10.95 and there are 2.0 seat turns for dinner. The snack bar is open 365 days a year for all three meals. Direct costs for the snack bar are 78% of total snack bar revenue. Indirect costs for the motel are estimated at $580,800 for next year. a. Calculate the budgeted contributory income statement for each department and a consolidated total motel departmental income statement to determine operating income. b. Assume that at the end of next year, actual revenue was on 21,700 rooms occupied at an average rate of $68.40; actual housekeeping wages (before employee fringe benefits) were $108,208. Analyze room revenue for price and sales volume variances and housekeeping wages for cost, quantity, and sales volume variances; assume it took 32 minutes to clean each room actually occupied (sold).
Answer and explanation:
Budgeted rooms to be sold next year: 80 × 75% × 365 = 21,900
a. Budgeted Departmental Contributory Income Statement
$ $
Rooms Department
Sales Revenue: [21,900 * $68.00] $1,489,200
Expenses
Fixed wages expense $186,000
Housekeeping expenses [21,900 * 0.5 *$9.00] 98,550
Subtotal $284,550
Fringe benefits: [18% *$284,550] 51,219
Other costs: [21,900 * $2.75] 60,225 (395,994)
Rooms Contributory income $1,093,206
Overnight guests: 80 rooms * 75% = 60 rooms occupied
40% * 60 = 24 rooms double occupied
84 overnight guests
Average breakfast guests: 80% *84 = 67.2 Guests
Snack bar sales revenue $
Breakfast: [67.2 * $6.50 *365] $159,432
Lunch: [50 * 1.5 * $8.95 * 365] 245,006
Dinner: [50 * 2.0 *$10.95 * 365] 399,675
Total Sales Revenue $804,113
Expenses [78% * $804,113] (627,208)
Snack Bar Contributory Income $176,905
Consolidated Motel Departmental Income Statement
Rooms Contributory Income $1,093,206
Snack Bar Contributory Income 176,905
Total Contributory Income $1,270,111
Less: Indirect, Undistributed Costs (580,800)
Budgeted Operating Income
check the attached file fro well formatted answers
James Corporation is planning to issue bonds with a face value of $500,000 and a coupon rate of 6 percent. The bonds mature in 10 years and pay interest semiannually every June 30 and December 31. All of the bonds will be sold on January 1 of this year. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided. Round your final answer to whole dollars.)
Required:
Compute the issue (sale) price on January 1 of this year for each of the following independent cases:
a. Case A: Market interest rate (annual): 4 percent.
b. Case B: Market interest rate (annual): 6 percent.
c. Case C: Market interest rate (annual): 8.5 percent.
Answer:
Bonds are the financial instruments used for the purpose of investing funds for safer returns in the future, along with the fixed rate of return earned each year.
Explanation:
The issue or sale price of the bonds as of January 1 for each of the independent cases is computed with the help of the following formula:
[tex]\begin{aligned}\text{Present Value}&=\text{Future Value}\times\frac{1}{(1+r)^n}\end{aligned}[/tex]
The issue price is computed below as given in the tables.
It can be calculated either by using the calculator or the excel sheet formula.
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The issue price of bonds is calculated based on the market interest rate. If the market interest rate is lower than the coupon rate, the bonds will be sold at a premium, if it matches with the coupon rate, the bonds will be at face value and if it's higher, the bonds will be sold at a discount.
Explanation:The question is about calculating the issue price of bonds for James Corporation under various market interest rates. The main formula to compute the bond price is the present value (PV) of its future cash flows which consists of semi-annual coupon payments and the face value (principal) repayable at the end of bond term (maturity).
(1) Case A: Market interest rate (annual): 4 percent
: The market interest rate is lower than the coupon rate so the bond will be sold at a premium. The issue price will be calculated as the present value of $15,000 semi-annual interest payments for 10 years plus the present value of the $500,000 face value repaid at the end of 10 years.
(2) Case B: Market interest rate (annual): 6 percent
: The market interest rate matches the coupon rate so the bonds will be sold at par, i.e., face value, which is $500,000. (3) Case C: Market interest rate (annual): 8.5 percent
: The market interest rate is higher than the coupon rate, so the bonds will be sold at a discount. The issue price is the present value of $15,000 interest payment for 10 years plus the present value of the $500,000 face value repaid at the end of 10 years.
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Sand Corporation has the following shares outstanding: 10,000 shares of $40 par value, ten percent preferred stock and 50,000 shares of $2 par value common stock. The company has $428,000 of retained earnings. At year-end, the company declares its regular $4 per share cash dividend on the preferred stock and a $3.20 per share cash dividend on the common stock. Two weeks later, the company pays the dividends. a. Prepare the journal entry for the declaration of the cash dividends. b. Prepare the journal entry for the payment of the cash dividends.
Answer and Explanation:
The Journal entry is shown below:-
1. Cash Dividend Dr, $200,000
To Dividends payable-Preferred Stock $40,000
(10,000 × $4)
To Dividends Payable-Common Stock $160,000
(50,000 × $3.20)
(Being declaration of cash dividends is recorded)
2. Dividends payable - Preferred stock Dr, $40,000
Dividends payable-Common Stock $160,000
To Cash $200,000
(Being payment of cash dividends is recorded)
Based on the information given the appropriate journal entries to record the transactions are:
Sand Corporation journal entries
1. Debit Cash Dividend $200,000
($40,000+$160,000)
Credit Dividend payable-preferred stock $40,000
(10,000 × $4)
Credit Dividend payable-common stock $160,000
(50,000 × $3.20)
(To record declaration of cash dividends )
2. Dividend payable-preferred stock $40,000
(10,000 × $4)
Debit Dividend payable-common stock $160,000
(50,000 × $3.20)
Credit Cash $200,000
($160,000+$40,000)
(To record payment of cash dividends)
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An income statement for Sam's Bookstore for the first quarter of the year is presented below: Sam's Bookstore Income Statement For Quarter Ended March 31 Sales $ 880,000 Cost of goods sold 550,000 Gross margin 330,000 Selling and administrative expenses Selling $ 117,000 Administration 138,000 255,000 Net operating income $ 75,000 On average, a book sells for $55. Variable selling expenses are $5 per book with the remaining selling expenses being fixed. The variable administrative expenses are 4% of sales with the remainder being fixed. The contribution margin for Sam's Bookstore for the first quarter is: Multiple Choice $665,200 $214,800 $250,000 $764,800
Answer:
Contribution= $214,800
Explanation:
Contribution margin ratio is the proportion of sales revenue that is earned as contribution.
Unit sold = revenue / selling price = 880,000/55 = 16,000 units
Contribution = Sales revenue - variable cost
Variable admin = 4% × 880,000= 35200
Variable selling = 5× 16,000 = 80,000
Contribution = Sales revenue - cost of goods sold - admin - selling
= 880,000 - 550,000- 35200 - 80,000=214,800
Contribution= $214,800
The contribution margin for Sam's Bookstore for the first quarter is $0.
Explanation:The contribution margin for Sam's Bookstore for the first quarter can be calculated by subtracting the total variable expenses from the sales revenue. The variable selling expenses are given as $5 per book, so for the 880,000 books sold in the quarter, the variable selling expenses would be 880,000 x $5 = $4,400,000. The variable administrative expenses are given as 4% of sales, so for the $880,000 sales revenue, the variable administrative expenses would be $880,000 x 0.04 = $35,200. Therefore, the total variable expenses for the quarter would be $4,400,000 + $35,200 = $4,435,200. Finally, the contribution margin can be calculated as the sales revenue minus the total variable expenses: $880,000 - $4,435,200 = -$3,555,200. However, since a contribution margin cannot be negative, the answer is $0.
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Sustainable competitive advantage is influenced by a: (Check all that apply) Group of answer choices Product or service with better features or functions Committment to converting competitors' customers Higher price for the customer based on the value created for them Rareness factor, meaning that competitors cannot offer the same set of values to this customer
Answer: a. Product or service with better features or functions.
d. Rareness factor, meaning that competitors cannot offer the same set of values to this customer
Explanation:
Sustainable Competitive Advantage refers to the quality that a company has of being able to stay ahead of it's competitors in the long term.
The main way to do this is Value creation. The company has to give to the consumer, something that the consumer will value and keep coming back for.
One of those ways is to give consumers a better product with better features and functions. This will enable consumers to associate high quality products with a company leading to them having a better market share.
Another way is the RARENESS FACTOR. Offering a product or something in that product that consumers consider rare will create value for the company because rare things are often sought after.
If a Company's products are considered rare, consumers will value them more.
Final answer:
Sustainable competitive advantage largely depends on differentiated products, rareness factors, and constant innovation to maintain a unique market position and attract customers.
Explanation:
Sustainable competitive advantage is influenced by several factors, key among these being the ability to offer differentiated products or services. When a firm's offerings are distinct in terms of physical aspects, location, intangible attributes, or customer perceptions, they achieve differentiation. This distinctiveness can manifest through better features, functions, or the high value created for customers that justifies a higher price. Moreover, exclusivity or a rareness factor is critical since it ensures competitors cannot readily duplicate the value offered, thus solidifying the firm's market position. A commitment to innovation and converting competitors' customers also plays a significant role in sustaining competitive advantage as it demonstrates a proactive approach to market dominance.
a. If Canace Company, with a break-even point at $259,000 of sales, has actual sales of $350,000, what is the margin of safety expressed (1) in dollars and (2) as a percentage of sales?Round the percentage to the nearest whole number.
1. $
2. %
Answer:
Margin of safety in dollars is $91,000
Margin of safety as percentage of sales is 26%
Explanation:
Margin of safety can be defined as the amount of output or sales that a business can make before it reaches its breakeven point.
To calculate margin of safety in dollars
Margin of safety= Sales - Breakeven sales
Margin of safety= 350,000- 259,000
Margin of safety= $91,000
To calculate margin of safety as a percentage of sales, we use the following formula.
Margin of safety = (Sales- Breakeven point) ÷ Sales
Margin of safety = (350,000- 259,000)÷ 350,000
Margin of safety= 0.26= 26%
Answer:
1. Margin of Safety(MOS) expressed in dollars =91,000
2. Margin of Safety(MOS) expressed as percentage = 26% (to the nearest whole number)
Explanation:
The MARGIN OF SAFETY is applied as a measure of the difference between the actual sales and break-even sales.
In other words, to find Margin of Safety, you subtract break-even sales from the actual sales.
MOS is used to determine at which level sales can drop before a business incurs losses. It is a tool by which actual or budgeted sales may be decreased without resulting in any loss.
1. Formula for Margin of Safety(in dollars):
Margin of Safety(in dollars) = Actual/Budgeted Sales ➖ Break-even Sales
Where:
Actual Sales = $350,000
Break-even Sales = $259,000
➡ Margin of Safety(in dollars) = $350,000 ➖ $259,000 = 91,000(ans)
2. Formula for Margin of Safety (expressed as a percentage) = [(Actual/Budgeted Sales ➖ Break-even Sales) ➗ Actual/Budgeted Sales] ✖ 100%
Where:
Actual Sales = $350,000
Break-even Sales = $259,000
➡ Margin of Safety (in percentage) = [($350,000 ➖ $259,000) ➗ $350,000] ✖ 100%
= ($91,000 ➗ $350,000) ✖ 100%
= 0.26 ✖ 100% = 26%(ans).
Harding Corporation acquired real estate that contained land, building and equipment. The property cost Harding $1,520,000. Harding paid $385,000 and issued a note payable for the remainder of the cost. An appraisal of the property reported the following values: Land, $407,000; Building, $1,210,000 and Equipment, $803,000. (Round your intermediate percentages to the nearest whole number: i.e 0.054231 = 5%. Do not round any other intermediate calculations.) Assume that Harding uses the units-of-production method when depreciating its equipment. Harding estimates that the purchased equipment will produce 1,060,000 units over its 5-year useful life and has salvage value of $18,000. Harding produced 271,000 units with the equipment by the end of the first year of purchase. Which amount below is closest to the amount Harding will record for depreciation expense for the equipment in the first year?
Answer:
$123,630.2
Explanation:
Harding Corporation
33%× $1,520,000=$501,600
$501,600-$18,000=$483,600
$483,600/$1,060,000 units
=$0.4562
=45.62 per unit
$0.4562x 271,000 units = $123,630.2
Or
($501,600 cost of equipment (33% of $1,520,000 purchase price) minus $18,000 salvage value) / $1,060,000 units = $0.4562 per unit.
$0.4562x 271,000 units = $123,630.2
Therefore the amount below which is closest to the amount Harding will record for depreciation expense for the equipment in the first year is $123,630
A technology company that makes computers for professional use is trying to segment its customers. The company asked some professional computer users to evaluate the importance of various computer attributes that influence their purchase decisions and then used this data to segment the consumers based on similar response patterns. This is an example of segmentation by:
Answer:
Benefit sought
Explanation:
Customer segmentation can be defined as the process of placing customers into different groups, this grouping is based on the age, interest, gender. It can also be referred to as the classification of potential customers based on the similar characteristics that they share.
Customer segmentation makes it easy for marketers create an awareness of their product to a particular group of people.
Benefit sought can be described as the segmentation of a market based on the various benefits that potential customers receive from purchasing a product.
Say a pill existed that made people selfless. After taking it they were only interested in others, not themselves. Under the coordination definition of economics: Multiple Choice there would be a social problem but not an economic problem. no economic problem would exist. there still would be an economic problem. there would be a political problem but not an economic problem.
Answer:
The correct answer is letter "C": there still would be an economic problem.
Explanation:
Coordination, in Economics, refers to the set of actions different individuals take to satisfy their needs mutually. Problems arise in case there is not enough coordination of the individuals in an economy bringing lower benefits for them. For coordination to take place there must be a leader driving people's activities the most efficient way possible.
In the case of the example, after taking a pill that made people selfless, those individuals would still lack coordination because it would be difficult to determine which sector of individuals will be the priority for the satisfaction of needs. Therefore, even after the introduction of the pill, that society would give an economic problem.
The coordination definition of economics states that there would be no economic problem if a pill existed that made people selfless and interested in others. This is because people would coordinate their actions to prioritize the well-being of others, leading to positive social results.
Explanation:According to the coordination definition of economics, if a pill existed that made people selfless and only interested in others, there would be no economic problem. The coordination definition of economics focuses on how individuals and firms coordinate their economic activities to achieve their goals. In this scenario, if people were selfless and interested in others, they would likely coordinate their actions to prioritize the well-being of others, leading to positive social results. This aligns with the idea that self-interested behavior can lead to positive social outcomes in economics.
If a pill existed that made people selfless and only interested in the wellbeing of others, classical economic theory implies there still would be an economic problem. The coordination definition of economics largely assumes that individuals act in their own self-interest, which in turn benefits society through the invisible hand as described by Adam Smith. However, selflessness does not equate to the absence of economic problems; rather, it may create new challenges in terms of resource allocation and incentives, as the market relies on individual self-interest to signal needs and allocate resources efficiently.
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Presented below is information related to Sunland CompanyPresented below is information related to Sunland Company. Cost Retail Beginning inventory $131,980 $286,000 Purchases 1,361,000 2,123,000 Markups 95,000 Markup cancellations 15,700 Markdowns 38,400 Markdown cancellations 4,700 Sales revenue 2,216,000 Compute the inventory by the conventional retail inventory method. (Round ratios for computational purposes to 0 decimal places, e.g. 78% and final answer to 0 decimal places, e.g. 28,987.) Ending inventory using conventional retail inventory method
Answer:
$238,600
Explanation:
Cost Retail
Beginning inventory $131,980 $286,000
Purchases $1,361,000 $2,123,000
Goods available for sale
$1,492,980 $2,409,000
Add Markups 95,000
Less Markup cancellations (15,700)
($2,409,000+$95,000-$15,700)
Total $1,492,980 $2,488,300
Less Markdowns ($38,400 )
($2,488,300-$38,400) $2,449,900
Add Markdown cancellations $4,700
($2,449,900+$4700) $2,454,600
$1,492,980 $2,454,600
Less Sales revenue ($2,216,000)
($2,454,600-$2,216,000)
Ending Inventory at Retail $238,600
William and Irene each contributed $20,000 cash to the WI Partnership on January 1 of last year. William and Irene share profits and losses equally. Last year, the partnership reported taxminus−exempt interest income of $4,000. This year, each partner receives $1,000 of the taxminus−exempt interest income in a cash distribution. There are no partnership liabilities and no other income, loss, contributions, or distributions during both years. William's basis in the partnership interest following these transactions is
Answer:
$21,000
Explanation:
Capital Account:
Particular Williams Irene Particular Williams Irene
$ $ $ $
Balance c/d 21,000 21,000 Cash 20,000 20,000
Cash distributn. 1,000 1,000
21,000 21,000 21,000 21,000
William's basis in the partnership business, is equal basis, because, the profit sharing ratio is on equal basis. The answer is $21,000.
reative Sound Systems sold investments, land, and its own common stock for $36.0 million, $14.4 million, and $38.8 million, respectively. Creative Sound Systems also purchased treasury stock, equipment, and a patent for $20.4 million, $24.4 million, and $11.4 million, respectively. What amount should Creative Sound Systems report as net cash flows from financing activities
Answer:
$18.4 million
Explanation:
The computation of the net cash flows from financing activities is shown below:
Cash flows from financing activities
Issuance of the common stock $38.8 million
Less: Purchase of treasury stock -$20.4 million
Net cash flows provided from financing activities $18.4 million
The positive sign represents the inflow of cash and the negative sign shows the outflow of cash and the same is shown above
Suppose that in year 2025, the US economy enters once of its worst recessionary gaps in history. Address these two related questions below: Compare and contrasts how fiscal policy and monetary policy could be used to help address this economic downturn. Explain. The US government is currently trillions of dollars in debt. If economists view reducing this debt to be critically important, do you think fiscal or monetary policy is a better response to the economic downturn? Explain.
Answer:
Answer 1
Recession is a stage in a business pattern of transitory financial decay during which trade,industrial and monetary movement are diminished, for the most part recognized by a fall in GDP in two progressive quarters. Downturn brings about expansion and joblessness. In such a situation an expansionary monetary arrangement would help a lot in improving the condition of the economy. Monetary strategy is the utilization of government spending and expense approach to address the economy. In an expansionary financial strategy, the administration takes estimates, for example, diminishing assessments, expanding government uses or both, so as to battle recessionary weights.
A decline in charges implies that families have more removal pay to spend. Higher removal pay builds utilization which expands the (GDP). Further, a lessening in charges imparts to the organizations that the legislature is keen on resuscitating the economy. It expands their certainty which thus builds the private speculation part of GDP. Since government uses is a segment of GDP, an expansion in government consumptions brings about an increment in GDP . Further, such an expansion additionally brings about aberrant increment in utilization and different parts of GDP. Along these lines the total interest and the total inventory are both expected to increment. In any case, they don't move together or in extent because of the negative slant in the general public. Family unit will be a little reluctant about spending and the first might be a little suspicious about venture. Deficiency of merchandise can cause swelling and less interest for them can make the organizations stop creation and in this manner bring about joblessness.
Answer 2
Tending to the issue of debt is blustery significant on the grounds that in any case the nation will end up in an debt trap. US may confront expanding inflationary weights, low fare acquiring, less beneficial utilization of assets. It is natural to imagine that contractionary financial arrangement that diminishes the spending is valuable for the decrease for obligation. Yet, on the off chance that the economy in a recessionary express the assessment salary will be exceptionally less and chopping down spending will be of nothing worth mentioning. In such a case inspiring the economy through an expansionary money related arrangement and keeping the swelling in charge is the best choice US can take. In the event that the GDP increments, and the economy come back to its balance, individuals will have the option to make good on charges. Government can then easing back lessen the spending and spotlight on clearing the obligation. In this manner, in the given situation, financial strategy is a superior reaction to a monetary downturn.
Fiscal policy and monetary policy are two primary tools that can be used to address an economic downturn such as a recessionary gap.
Fiscal policy involves changes in government spending and taxation to influence the economy. In the face of a recession, the government can increase spending on infrastructure, social programs, or defense to inject money into the economy, which can create jobs and stimulate demand. Alternatively, the government can cut taxes to increase consumers' disposable income, encouraging spending and investment. The increased government debt that results from higher spending or lower tax revenues can be justified if it leads to a more rapid economic recovery and a return to higher levels of employment and output.
Monetary policy, on the other hand, is controlled by the central bank (the Federal Reserve in the US) and involves managing the money supply and interest rates. During a recession, the central bank can lower interest rates to reduce the cost of borrowing, thereby encouraging businesses to invest and consumers to spend. Additionally, the central bank can engage in quantitative easing, buying government securities and other financial assets to inject liquidity into the economy. This can lower long-term interest rates and increase the money supply, which can help to stimulate economic activity.
Considering the current situation where the US government is deeply in debt, monetary policy might be seen as a more immediate and less politically contentious response to an economic downturn. Monetary policy can be implemented quickly and does not directly increase government debt. However, its effectiveness can be limited if interest rates are already low or if there is a lack of confidence in the economy.
In contrast, fiscal policy can be more direct and targeted in its stimulus but would increase the national debt, which could be problematic given the already high levels of debt. Nevertheless, if the recession is severe enough, the increase in debt might be considered a necessary investment to revive the economy. Moreover, if the government invests in productive capacities, it can lay the groundwork for future economic growth, which can help pay down the debt over time.
In conclusion, both fiscal and monetary policy have roles to play in addressing a severe economic downturn. The choice between them depends on the specific circumstances of the downturn, the current level of interest rates, the effectiveness of monetary policy transmission mechanisms, and the political will to either increase government debt in the short term or risk a deeper and more prolonged recession. If reducing debt is a priority, monetary policy might be preferred initially, but if the downturn is severe, fiscal policy may become necessary despite the increase in debt.
The logic behind this answer is that each policy tool has its strengths and limitations, and the best response to an economic downturn may involve a combination of both fiscal and monetary measures, tailored to the specific needs of the economy at the time. The decision also depends on the effectiveness of past policies, the current economic environment, and the long-term goals of economic stability and growth.
On January 1, 2021, White Water issues $450,000 of 6% bonds, due in 20 years, with interest payable annually on December 31 each year. Required: Assuming the market interest rate on the issue date is 6%, the bonds will issue at $450,000. Record the bond issue on January 1, 2021, and the first two interest payments on December 31, 2021, and December 31, 2022. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)
If the market interest rate rises to 9% from the bond's coupon rate of 6%, the bond would be worth less than its face value. The present value of the final interest payment and principal at the new rate would total $9,724.77. Therefore, one would expect to pay less than $10,000 for this bond.
Explanation:When considering the purchase of a bond, the market interest rate at the time of purchase relative to the bond's coupon rate will determine whether the bond is bought at a premium, discount, or at par value. For a $10,000 ten-year bond with a 6% interest rate, if interest rates increase to 9% one year before the bond matures, the bond's price will fall because newer issues in the market offer a higher return.
Assuming that the bond has been paying $600 annually (6% of $10,000), and there is one more payment to be received before the bond matures, the present value of the final interest payment and the principal at a discount rate of 9% can be calculated as:
Final Interest Payment PV = $600 / (1 + 0.09) = $550.46 Principal PV = $10,000 / (1 + 0.09) = $9,174.31 Adding these two amounts together gives us the present value of the bond's future cash flows one year before maturity at the higher discount rate of 9%. Therefore, the total value is: $550.46 (interest) + $9,174.31 (principal) = $9,724.77 Thus, an investor would be willing to pay $9,724.77 for the bond under these circumstances, which is less than its face value of $10,000 due to the increase in market interest rates.Learn more about Bond Valuation here:https://brainly.com/question/34548471
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01) A firm faces the following relationship between the real wage it pays and the effort exerted by its workers. The marginal product of labor for this firm is given by MPN = E (100 - N)/9. How many workers will the firm employ? A) 96 B) 92 C) 88 D) 80
Answer:
A. 96
Explanation:
I just had that question i got it right
The optimal number of workers a firm will employ is determined when the value of the marginal product of labor equals the market wage. Without the market price of the product, we cannot calculate the value of the marginal product to determine the profit-maximizing level of employment with the given marginal product of labor formula.
Explanation:The subject matter in question involves determining the optimal number of workers a firm should employ based on the relationship between the real wage, worker effort, and the marginal product of labor. A firm will continue to hire workers until the value of the marginal product of labor (VMPL), which is the product of the marginal product of labor and the market price of the output, equals the going market wage.
To find the profit-maximizing level of employment when the market wage is $12, we set the VMPL equal to $12 and solve for the number of workers (N). However, the student's question mentions neither the market price of the product nor any specifics that would allow us to calculate the VMPL. Therefore, based on the given information alone, we cannot determine how many workers the firm will employ.
Assuming the VMPL is available, you would calculate the marginal product of labor for various levels of employment (N), then determine the VMPL (MPN × P) for each level. The firm's profit-maximizing level of employment is reached when the VMPL equals the market wage, which in the supplied reference is $12.
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When the ABC Corporation first opened their doors for business, they had no idea how much to allocate to promotional expenditures. They decided that if they wanted to be as successful as their leading competitors, they needed to invest in the brand to the same level. After tracking the marketing tactics of the competition, they were able to estimate the costs and develop a realistic budget that the marketing director was able to spend throughout the year to achieve their communications goals. This is an example of a(n) _____________, fill in the blank, approach to budgeting.
Answer:
Competitive parity
Explanation:
Iggies Ice Cream Company has taken a position in its tax return to claim a tax credit of $80 million (direct reduction in taxes payable) and has determined that its sustainability is "more likely than not," based on its technical merits. The tax credit would be a direct reduction in current taxes payable. Iggies believes the likelihood that a $80 million, $48 million, or $16 million tax benefit will be sustained is 25%, 35%, and 40%, respectively. Iggies' taxable income is $550 million for the year. Its effective tax rate is 40%. What is Iggies' income tax expense for the year
Answer:
Total income tax expense = $172
Explanation:
solution
we get here first tax Currently Payable that is
tax Currently Payable = $550 million × 40%
tax Currently Payable = $220 million
and Tax credit available = $80 million
so here Net Tax currently payable will be
Net Tax currently payable = $220 - $80
Net Tax currently payable = $140 million
and
Additional projected liability is = $80 - $48
Additional projected liability is = $32 million
so here Total income tax expense will be
Total income tax expense = $140 million + $32
Total income tax expense = $172
Niles Company granted 111 million of its no par common shares to executives, subject to forfeiture if employment is terminated within three years. The common shares have a market price of $22 per share on January 1, 2015, the grant date of the restricted stock award.When calculating diluted EPS at December 31, 2016, what will be the net increase in the denominator of the EPS fraction if the market price of the common shares averaged $22 per share during 2016? (Enter your answer in millions of shares (i.e., 10,000,000 should be entered as 10)
Answer:
The net Increase in the denominator will be $74 millions
Explanation:
According to the given data we have the following:
Total ESOP Granted=$111 million
Total Period (years)=3 years
Period from Jan 1 2015 to Dec 2016=2 years
In order to calculate the Increase in the denominator we would have to make the following calculation:
Increase in the denominator (Shares)=$111 million*(2/3)
Increase in the denominator (Shares)=$74 millions
The net Increase in the denominator will be $74 millions
One recent cost analysis report indicates that electricity from hydroelectric power can be produced for about $0.05 per kWh, while electricity from conventional coal-fired power plants can be produced for an average of about $0.11 per kWh . Calculate the percent change in the cost of electricity for a typical house resulting from a switch between conventional coal-fired power plants to hydroelectric power
Answer:
54.55 %
Explanation:
Cost of electricity used for typical house resulting from coal-fired power plant is
=10900*$0.11 = $1199
Cost of electricity used for typical house resulting from hydroelectric power plant is
=10900*$0.05 = $ 545
Therefore Percent change in cost of electricity for a typical house is
= [(1199 -545)/1199]*100
=54.55 %
A cost analysis report is a report that determines the different cost proposals as well as the cost of the products and services in order to propose the profit of the firm. The analysis report is also used to evaluate the lack of competitiveness and the comparable offers in the marketplace.
The percent change in the cost of electricity is 54.55 %
The cost of electricity used for a typical house resulting from the coal-fired power plant is
[tex]=10900\times\$0.11 = \$1199[/tex]
The cost of electricity used for a typical house resulting from the hydroelectric power plant is
[tex]=10900\times\$0.05 = \$ 545[/tex]
Therefore Percent change in the cost of electricity for a typical house is
[tex]=\frac{1199 -545}{1199} \times100\\&=54.55 \%[/tex]
Therefore, The percent change in the cost of electricity is 54.55 %
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An insurance company wants to sell you an annuity which will pay you $750 per quarter for 30 years. You want to earn a minimum rate of return of 6.0 percent. What is the most you are willing to pay as a lump sum today to buy this annuity
Answer:
$41,623.84
Explanation:
[tex]\text{Present Lump\: Sum}, \:A_0=\dfrac{P[1-(1+i)^{-kt}]}{\frac{r}{k} }[/tex]
C=Payment Per Period
Yearly Interest Rate, =6%=0.06
Therefore, Periodic(Quaterly) Interest Rate, i= 0.06/4=0.015
Total number of Periods, n =4 X 30 =120 Quarters
Therefore, the maximum lump sum that the client will be willing to pay is:
[tex]=\dfrac{750[1-(1+0.015)^{-4X30}]}{0.015}=\$41,623.84[/tex]
The following data relate to the direct materials cost for the production of 10,000 automobile tires: Actual: 145,000 lbs. at $2.80 per lb. Standard: 150,000 lbs. at $2.75 per lb. a. Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
Answer and Explanation :
The computation is shown below:
Direct materials price variance is
= (actual price - standard price) × actual quantity
= ($2.80 - $2.75) × 145,000
= $7,250 unfavorable
Because actual price is higher than standard price so this is unfavorable
Direct materials quantity variance is
= (actual quantity - standard quantity) × standard price
= (145,000 - 150,000) × $2.75
= -$13,750 favorable
Sum of direct material cost variance = $7,250 - $13,750
= -$6,500 favorable
We simply applied the above formulas
Crystal's Performance Pizza is a small restaurant in Detroit that sells gluten-free pizzas. Crystal's very tiny kitchen has barely enough room for the four ovens in which her workers bake the pizzas. Crystal signed a lease obligating her to pay the rent for the four ovens for the next year. Because of this, and because Crystal's kitchen cannot fit more than four ovens, Crystal cannot change the number of ovens she uses in her production of pizzas in the short run.However, Crystal's decision regarding how many workers to use can vary from week to week because her workers tend to be students. Each Monday, Crystal lets them know how many workers she needs for each day of the week.In the short run, these workers are _______ inputs, and the ovens are _______ inputs.
Crystal lets them know how many workers she needs for each day of the week.In the short run, these workers are Variable inputs, and the ovens are Fixed inputs.
Explanation:
Production function of a product defines the relationship between the quantity of inputs required to produce a good and the quantity of output produced by the given inputs.
The Commonly used inputs in production are land, labor, and capital.
Fixed Input: Fixed input are those inputs whose quantity does not change with the quantity of the output produced
Variable Input: Variable input are those type of input whose quantity varies with the quantity of the output produced.
In the above question we can see that
Crystal's decision regarding how many workers to use can vary from week to week because her workers tend to be students.The workers are the variable inputs.
Crystal's kitchen cannot fit more than four ovens, Crystal cannot change the number of ovens -The ovens are the fixed Input
A hotel has an average daily rate (ADR) of $50, fixed costs for each of the 2,200 rooms sold during the month of $15, and a variable cost percentage of 20%. Its contribution margin is:
Answer:
$10
Explanation:
he contribution margin is calculated by subtracting variable costs from selling price.
i.e., selling price- variable cost = contribution margin per unit
in this case
selling price is $50
variable cost
= 20/100 x 50
=0.2 x 50
=$10
contribution margin = $50- $10
=$40
Build interest in your sales message by developing your central selling points with rational, emotional, or dual appeals. Rational appeals are appropriate when a product is, for example, important to BLANK . Emotional appeals are appropriate when a product is, for example, BLANK . Whether using rational or emotional appeals, remember to translate cold facts into BLANK .THIS IS THE OPTIONS DO THEM PLEASE :)option 1-health-appearance-egooption 2-short-lived-expensive-essentialoption 3-scare tactics related to current events-warm feelings and reader benefits -logical arguments
Answer:
1. Health
2. Essential
3. Warm feelings and reader benefits
Explanation:
Note that, in marketing Rational appeals are appropriate when a product is, for example, important to herlth. While Emotional appeals are appropriate when a product is, for example, essenal products.
Whether using rational or emotional appeals, remember to translate cold facts into warm feelings and reader benefits.