Answer and Explanation:
The journal entries are as follows
a. Cash A/c Dr $107,100 (5,100 shares × $21)
To Common Stock $10,200 (5,100 shares × $2)
To Additional Paid-in Capital in excess of par - Common Stock $96,900
(Being the issuance of stock is recorded and the remaining balance is credited to the additional paid-in capital account)
b. Cash A/c Dr $26,400 (1,100 shares × $24)
To Common Stock $2,200 (1,100 shares × $2)
To Additional Paid-in Capital in excess of par - Common Stock $24,200
(Being the issuance of stock is recorded and the remaining balance is credited to the additional paid-in capital account)
It increased the both cash and common stock stock and the additional paid in capital account as well
Q 7.27: A large furniture store has several sales clerks who ring up sales for customers and receive cash. At the end of the day, the clerks tally their cash register drawer and take the cash and checks to the cashier. The shift supervisor collects all of the cash register tapes at the end of each shift and sends it to the accounting department. Which cash receipt control is the company implementing?
Answer: Separation of duties.
Explanation:
This question might have options that were not posted along with it however, I shall give the most likely answer.
Separation of duties is an accounting method that aims to prevent unethical accounting practices such as fraud. It is simply done by assigning to different people, various roles in the accounting process.
In the above scenario, sales clerks ring up the sales and receive cash and take it to the cashier, while the shift supervisor takes the cash register tapes to the accounting department.
Upon completing an aging analysis of accounts receivable, the accountant for Rosco Works prepared an aging of accounts receivable and estimated that $6,700 of the $99,700 accounts receivable balance would be uncollectible. The allowance for doubtful accounts had a $570 debit balance at year-end prior to adjustment. What is the amount of bad debt expense?
Answer:
-$7,270
Explanation:
Accounts receivable is the amount that is owed to the business by various parties that is due within a particular period.
In this instance there was an aging analysis done that estimated that $6,700 will be uncollectible. This will result in a bad debt expense of -$6,700.
Before now there was a balance of -$570 in allowance for doubtful accounts. Meaning there was a debit balance attributed to uncollected debt.
The total debt balance will now be -6,700-570 = -$7,270
Answer:
$7,270
Explanation:
Allowance for doubtful accounts is a contra asset account. It has credit balance and need to be adjusted against the receivable account balance to show net receivable amount on the balance sheet.
As $6,700 of uncollectible accounts receivables are estimated, but allowance account has a debit balance of $570.
Bad Debt Expense for the year = Estimated uncollectible accounts receivables + Year end debit balance of Allowance for doubtful accounts
Bad Debt Expense for the year = $6,700 + $570
Bad Debt Expense for the year = $7,270
On January 1, Grouper Corp. had 61,600 shares of no-par common stock issued and outstanding. The stock has a stated value of $4 per share. During the year, the following transactions occurred. Apr. 1 Issued 12,150 additional shares of common stock for $13 per share. June 15 Declared a cash dividend of $1.65 per share to stockholders of record on June 30. July 10 Paid the $1.65 cash dividend. Dec. 1 Issued 5,400 additional shares of common stock for $13 per share. Dec. 15 Declared a cash dividend on outstanding shares of $1.75 per share to stockholders of record on December 31. (a) Prepare the entries, if any, on each of the three dates that involved dividends.
Answer:
June 15
Dr Cash dividend 121,690
Cr Dividend payable 121,690
July 10
Dr Dividend payable 121,690
Cr Cash 121,690
Dec.15
Dr Cash dividend 138,513
Cr Dividend payable 138,513
Explanation:
Grouper Corp Journal entries
Date Accounts titles and Explanation Debit ($) Credit ($)
June 15
Dr Cash dividend 121,690
Cr Dividend payable 121,690
[($61,600+$12,150)*$1.65]
July 10
Dr Dividend payable 121,690
Cr Cash 121,690
Dec.15
Dr Cash dividend 138,513
Cr Dividend payable 138,513
[(61,600+12,150+5,400)*1.75]
Tina and Bob formed the TB Partnership four years ago. Because they decided the company needed some expertise in multimedia presentations, they offered Kate a one-third interest in partnership capital if she would come to work for the partnership. On August 4 of the current year, the unrestricted partnership interest (fair market value of $25,000) was transferred to Kate. How should Kate treat the receipt of the partnership interest in the current year
Answer:
$25,000 will be an ordinary income(FMV)
Explanation:
Kate received an offer of unrestricted partnership capital interest for the expertise services. so, Kate recognizes it's an "ordinary income"which should be booked at the fair market value of the partnership interest so offered.
i.e $25,000 is ordinary income (FMV)
Why might a commercial real estate investor borrow to help finance an investment even if she could afford to pay 100 percent cash? (which is most correct) Group of answer choices Keep leverage low thus reduce risk. increase the rate of return investors earn on their invested equity. Mattress feels better with cash inside Want to keep my money for a rainy day
Answer:
The answer is B. Increase the rate of return investors earn on their invested equity
Explanation:
The correct answer is Option B. Increase the rate of return investors earn on their invested equity
Borrowing refers to the use of financial leverage. If the overall return on the commercial real estate exceeds the cost of debt, the use of borrowed fund can increase the rate of return investors earn.
Portfolio diversification is also one of the benefits to be derived from this.
Monty Manufacturing has old equipment that cost $52,000. The equipment has accumulated depreciation of $28,300. Monty has decided to sell the equipment. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
a. What entry would Monty make to record the sale of the equipment for $38,000 cash.
b. What entry would Monty make to record the sale of the equipment for $16,500 cash.
Answer:
a.
Cash 38000 Dr
Accumulated Depreciation-Equipment 28300 Dr
Equipment Account 52000 Cr
Gain on Disposal 14300 Cr
b.
Cash 16500 Dr
Accumulated Depreciation-Equipment 28300 Dr
Loss on Disposal 7200 Dr
Equipment Account 52000 Cr
Explanation:
a.
The carrying value of the equipment is its net value in the books after deducting the accumulated depreciation from the cost.
The carrying value of the asset before sale is = 52000 - 28300 = $23700
The gain/loss on disposal = Cash received from sale - carrying value
Gain/loss on disposal = 38000 - 23700 = $14300 or a gain of $14300
b.
The gain/loss on disposal = 16500 - 23700 = -$7200 or a loss of $7200
Answer:
a.
Cash$38,000 (debit)
Accumulated Depreciation$28,300 (debit)
Equipment $52,000 (credit)
Profit on Sale of Equipment $14,300
b.
Cash$16,500 (debit)
Accumulated Depreciation$28,300 (debit)
Loss on Sale of Equipment $7,300
Equipment $52,000 (credit)
Explanation:
For any Disposal of an Asset the following should occur:
De-recognise cost of the AssetDe-recognise Accumulated DepreciationRecognise the Proceeds of the SaleRecognise Profit or Loss on SaleWorldwide Company obtained a charter from the state in January that authorized 200,000 shares of common stock, $10 par value. During the first year, the company earned $38,200, declared no dividends, and the following selected transactions occurred in the order given: Issued 60,000 shares of the common stock at $12 cash per share. Reacquired 2,000 shares at $15 cash per share from stockholders; the shares are now held in treasury. Reissued 1,000 of the shares in transaction (b) two months later at $18 cash per share. 3. Prepare the stockholders’ equity section of the balance sheet at December 31. TIP: Because this is the first year of operations, Retained Earnings has a zero balance at the beginning of the year. (Amounts to be deducted should be indicated by a minus sign.)
Answer and Explanation:
The preparation of stockholders’ equity section is shown below:-
Worldwide Company
Statement of stockholder equity
31 December
Paid-in-capital
Common stock - $10 par, 200,000 shares authorized
60,000 shares issued and outstanding $600,000
Paid in capital in excess of par - common $120,000
(60,000 × $12) - (60,000 × $10)
Paid in capital from treasury stock $3,000
(1,000 × $18) - (1,000 × $15)
Total paid in capital $717,000
Retained earning $38,200
Sub total $755,200
Less: Treasury stock at cost $15,000
(1,000 × $15)
Total stockholder equity $740,200
Therefore from above the stockholders’ equity is prepared.
The stockholders' equity section of the balance sheet at December 31 includes common stock, treasury stock, and retained earnings.
Explanation:To prepare the stockholders' equity section of the balance sheet, we need to consider the transactions that occurred during the year. First, the company issued 60,000 shares of common stock at $12 per share, which increases the common stock account by $720,000 (60,000 shares x $12 per share). Next, the company reacquired 2,000 shares at $15 per share, which decreases the common stock account by $30,000 (2,000 shares x $15 per share). The reacquired shares are now held in treasury. Then, the company reissued 1,000 of the treasury shares two months later at $18 per share, which increases the common stock account by $18,000 (1,000 shares x $18 per share). Since no dividends were declared, the retained earnings account remains at a zero balance.
Therefore, the stockholders' equity section of the balance sheet at December 31 would be as follows:
Common stock: $708,000 ($720,000 - $12,000)Treasury stock: ($30,000)Retained earnings: $0Learn more about stockholders' equity section here:https://brainly.com/question/33717039
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A brand of shoes costs $29.00 to manufacture in Omaha, Nebraska. The shoes are then shipped to shoe stores across the country. When you see them on the shelves, the price is $69.99. How do you think the price you pay for the sneakers is determined? Use percent to describe the markup. Explain your reasoning.
Answer:
90.00
Explanation:
Suppose that the exchange rate between the dollar and the euro was euro0.879 per dollar in December 2018 and euro0.900 per dollar in December 2019. From December 2018 to December 2019, the euro:
A. appreciated against the dollar because more euros are needed to purchase one dollar.
B. appreciated against the dollar because fewer euros are needed to purchase one dollar.
C. depreciated against the dollar because more euros are needed to purchase one dollar.
D. depreciated against the dollar because fewer euros are needed to purchase one dollar.
Answer:
C
Explanation:
Suppose that the exchange rate between the dollar and the euro was euro0.879 per dollar in December 2018 and euro0.900 per dollar in December 2019. From December 2018 to December 2019, the euro: depreciated against the dollar because more euros are needed to purchase one dollar.
If you needed 0.879 euro in December 2018 in December 2019 you need 0.900 euro which means you need more euro to buy the dollar
Cash Payments Schedule Fein Company provided the following information relating to cash payments: Fein purchased direct materials on account in the following amounts: June $68,000 July 77,000 August 73,000 Fein pays 20% of accounts payable in the month of purchase and the remaining 80% in the following month. In July, direct labor cost was $32,300. August direct labor cost was $35,400. The company finds that typically 90% of direct labor cost is paid in cash during the month, with the remainder paid in the following month. August overhead amounted to $71,200, including $6,350 of depreciation. Fein had taken out a 4-month loan of $15,000 on May 1. Interest, due with payment of principal, accrued at the rate of 9% per year. The loan and all interest were repaid on August 31. (Note: Use whole months to compute interest payment.)
Answer: $191,590
Explanation:
August Payments on accounts payable:
From JULY PURCHASES - $77,000 x 80%
$77,000 × 0.8 = $61,600
From August purchases - $73,000 x 20% $73,000 × 0.2 = $14,600
Direct labor payments:
From JULY: $32,300 x 10%
$32,300 × 0.1 = 3,230
From AUGUST: $35,400 x 90%
$35,400 × 0.9 = $31,860
Overhead : $71200 - $6350 = 64,850
Loan repayment - $15,450
Cash payments - $191,590
Loan repayment :
[Loan + ( loan × rate × period)
[15000 + (15000 × (9/100) × 4/12)]
15000 + 450 = $15,450
Cash payment for August :
15450+64850+31860+3230+14600+61600 = $191,590
Answer:
In August the cash payment plan is $197,940
The detailed presentation can be found in the attached file.
Minmax Co.'s direct labor information for February is as follows: Direct labor hours worked (AQ) 35,600 Standard direct labor hours for units manufactured (SQ) 38,000 Unfavorable direct labor rate variance $ 17,800 Total payroll for direct labor $ 427,200 The direct labor efficiency variance in February (to the nearest dollar) was:
Answer:
$27,600 unfavorable
Explanation:
In order to calculated labor efficiency variance which is standard cost of actual hours less standard cost, first compute standard rate as shown below:
Unfavorable direct labor rate variance = $17,800
Unfavorable direct labor rate variance = Actual rate - standard rate × Actual hours
Actual rate = Total payroll for direct labor ÷ Direct labor hours (AQ)
= 427,200 ÷ 35,600
= $12 per unit
Substituting the values in the above formula:
17,800 = (12 - SR) × 35,600
SR = $11.5
Now calculate Standard cost of actual hours = Direct labor hours × SR
= 35,600 × 11.5
= $409,400
Standard cost = Standard direct hours × SR
= 38,000 × 11.5
= $437,000
Direct labor efficiency variance = Standard actual of actual hours - Standard cost
= 409,400 - 437,000
= - $27,600 or $27,600 unfavorable
Final answer:
The direct labor efficiency variance for Minmax Co. in February was a $27,600 unfavorable variance, calculated using the actual direct labor rate and standard rates derived from the provided information on total payroll and variance.
Explanation:
To calculate the direct labor efficiency variance, we need the standard cost per hour for direct labor. Given the Total payroll for direct labor ($427,200) and the actual labor hours (AQ) of 35,600, we can find the actual rate per hour by dividing the total payroll by the hours worked:
Actual Rate (AR) = Total Payroll / AQ = $427,200 / 35,600 hours = $12 per hour
Since we have the Unfavorable direct labor rate variance ($17,800) and know it is calculated as (AR - SR) * AQ, we can rearrange this to find the Standard Rate (SR):
SR = AR - (Unfavorable rate variance / AQ)
SR = $12 - ($17,800 / 35,600 hours) = $12 - $0.5 = $11.50 per hour
The standard direct labor hours (SQ) for the units manufactured are given as 38,000 hours. With the SR and SQ, we can calculate the direct labor efficiency variance:
Direct Labor Efficiency Variance = (AQ - SQ) * SR = (35,600 hours - 38,000 hours) * $11.50 per hour = -$27,600
This variance is unfavorable because the AQ is less than the SQ, indicating less efficiency. Therefore, the direct labor efficiency variance in February was a $27,600 unfavorable variance.
Shannon Company segments its income statement into its North and South Divisions. The company’s overall sales, contribution margin ratio, and net operating income are $960,000, 34%, and $19,200, respectively. The North Divisions contribution margin and contribution margin ratio are $121,600 and 38%, respectively. The South Division’s segment margin is $140,800. The company has $211,200 of common fixed expenses that cannot be traced to either division.Required:
Prepare an income statement for Shannon Company that uses the contribution format and is segmented by divisions.
Final answer:
The segmented income statement for Shannon Company shows a total net operating income of $19,200. The North Division has a segment margin of $121,600, while the South Division's segment margin is $140,800, after accounting for sales, variable expenses, and traceable fixed expenses.
Explanation:
Shannon Company Segmented Income Statement
Overall Company:
Total Sales: $960,000
Less: Variable Expenses (66% of Sales): $633,600
Contribution Margin (34% of Sales): $326,400
Less: Common Fixed Expenses: $211,200
Net Operating Income: $19,200
North Division:
Sales (Calculated as Contribution Margin / Contribution Margin Ratio): $320,000
Less: Variable Expenses (62% of North Division Sales): $198,400
Contribution Margin (38% of North Division Sales): $121,600
Less: Traceable Fixed Expenses (Calculated as North Division Contribution Margin - Segment Margin): $0
Segment Margin: $121,600
South Division:
Sales (Calculated as Total Sales - North Division Sales): $640,000
Less: Variable Expenses (Calculated as Total Variable Expenses - North Division Variable Expenses): $435,200
Contribution Margin (Calculated as Total Contribution Margin - North Division Contribution Margin): $204,800
Less: Traceable Fixed Expenses (Calculated as South Division Contribution Margin - Segment Margin): $64,000
Segment Margin: $140,800
Valuing Trading Securities at Fair Value On January 1, Valuation Allowance for Trading Investments had a zero balance. On December 31, the cost of the trading securities portfolio was $41,500, and the fair value was $46,300. Prepare the December 31 adjusting journal entry to record the unrealized gain or loss on trading investments.
Answer:
Dr. Trading securities $4,800
Cr. Unrealized gain on trading securities $4,800
Explanation:
Trading securities are recorded reported on the fair market value. The gain or loss arise from the increase or decrease in the value of trading securities. There is a gain if the price of trading security increases and loss when the price of the trading security decreases. Unrealized gains are reported in the separate section of stockholders equity.
Gain on Trading securities = Fair value of security portfolio - Cost of security portfolio = $46,300 - $41,500 = $4,800
As the only store to design and sell curtains in the suburb of Oakland, the merchandise sold by Plush Parade is overpriced. Noticing this, Diana's Draperies sets up a showroom in the same suburb, reasoning that with lower prices, they would be able to attract more customers. Diana's Draperies is Plush Parade's _____.
A. partner
B. distributor
C. competitor
D. processor
E. franchiser
Answer: (C) Competitor
Explanation:
According to the given question, Diana's Draperies is basically plush parade's competitors as Diana's Draperies noticing the business of Plush Parade that they designing and then selling the curtains to the customers.
So, they started the same business of Curtains designing and by using the business strategy they start selling the same product at lower price for the purpose of attracting the customers or users in the market.
The competitors is the rival of each other in the business and they usually offering the same products in the market for attracting the consumers in low price for establishing their business.
Therefore, Option (C) is correct answer.
Ann M. Martin Company makes the following errors during the current year. (Evaluate each case independently and assume ending inventory in the following year is correctly stated.) 1. Ending inventory is overstated, but purchases and related accounts payable are recorded correctly. 2. Both ending inventory and purchases and related accounts payable are understated. (Assume this purchase was recorded and paid for in the following year.) 3. Ending inventory is correct, but a purchase on account was not recorded. (Assume this purchase was recorded and paid for in the following year.) Indicate the effect of each of these errors on working capital, current ratio (assume that the current ratio is greater than 1), retained earnings, and net income for the current year and the subsequent year.
Answer:
Please find the detailed answer in the explanation section.
Explanation:
CURRENT YEAR SUBSEQUENT YEAR
1. Working Capital Overstated No effect
Current Ratio Overstated No effect
Retained Earnings Overstated No effect
Net Income Overstated Understated
2. Working Capital No effect No effect
Current Ratio Overstated No effect
Retained Earnings No effect No effect
Net Income No effect No effect
3. Working Capital Overstated No effect
Current Ratio Overstated No effect
Retained Earnings Overstated No effect
Net Income Overstated Understated
It announces that it plans to pay dividends of $1 per share exactly three years from now and $2 per share exactly four years from now. From year 5 onwards, dividends are expected to grow at a constant rate of 10% per year. The company pays no dividends in years one and two. The risk-free rate is 5%, the company's beta is 1.5 and the expected return on the market is 11%. Calculate the price of this stock at time period 4, P4
The Question is incomplete.
The complete question is as follows:
It announces that it plans to pay dividends of $1 per share exactly three years from now and $2 per share exactly four years from now. From year 5 onwards, dividends are expected to grow at a constant rate of 10% per year. The company pays no dividends in years one and two. The risk-free rate is 5%, the company's beta is 1.5 and the expected return on the market is 11%. Calculate the price of this stock today
Answer:
Price of stock = $34.42
Explanation:
The Dividend Valuation Model is a technique used to value the worth of an asset. According to this model, the worth of an asset is the sum of the present values of its future cash flows discounted at the required rate of return.
Required rate of return
Using the CAPM , the rate of return on equity can be determined as follows:
E(r)= Rf +β(Rm-Rf)
E(r) =? , Rf- 5%, Rm- 11%, β- 1.5
Ke = 5% + 1.5× (11-5)%
= 14%
Present value of Dividends(PV)
Year PV
3 $1.00, × (1.14^(-3) = 0.6749
4 $2.00× 1.14^(-4) = 1.18416
5 and beyond
This will be done in two (2) steps as follows:
PV in year 4 = (2 × 1.10) /(0.14-0.1) = 55
PV in year 0 = 55× 1.14^(-4) = 32.56
Price of stock
= 0.6749 + 1.18416 + 32.56
= $34.423
Linda is the director of HR at Colette Value Inc., a large tax-preparation firm. The firm faces a dearth of tax preparers every year when the tax season approaches. Every December, Linda outsources a bulk of the recruiting process to an employment agency to recruit temporary employees before the tax season begins. However, she wants to do so without excessively limiting her final hiring decisions. Which of the following processes of recruitment should Linda carry out first hand?
A) Advertising for recruitment over the Internet
B) Preliminary screening of résumés
C) Designing the employment advertisements
D) Face-to-face interviews with finalists
Answer:
The correct answer is letter "D": Face-to-face interviews with finalists.
Explanation:
As Linda does not want to limit her hiring decision, she should let the employment agency to be in charge of the recruiting process but intervene in the face-to-face interviews with the finalists. In such a way, she will make sure that the agency is screening the correct applicants, and Linda, eventually, will have the final decision in the selection process.
Unis Technologies has introduced a new installation program that is the first of its kind and requires a great deal of complex technological understanding. Although it is being marketed as a user-friendly system, consumers are apprehensive about buying it. Unis Technologies' promotion mix will likely: focus heavily on personal selling. contain short-run incentives. rely on sales promotion. rely on advertising.
Answer:
Focus heavily on personal selling.
Explanation:
Personal selling is a selling technique in which the salesperson meets the customer face to face, introduces the product, explains its use and characteristics extensively, and tries to close the sell by building rapport.
Because the product that Unis Technologies is promoting is complicated to use, and few people have the required knowledge, the company will have to focus on personal selling, otherwise, the potential customers will likely feel intimitaded and not buy the product.
Taylor United is considering overhauling its equipment to meet increased demand for its product. The cost of equipment overhaul is $4.02 million, plus $214,086.00 in installation costs. The firm will straight-line depreciate the equipment to zero using a 5-year recovery period. Additional sales from the overhaul should amount to $239,013.00 per year, and additional operating expenses and other costs (excluding depreciation) will amount to 39.00% of the additional sales. The firm has an ordinary tax rate of 37.00%. What is the operating cash flow for year 1 of this project?
Answer:
$405,175.06
Explanation:
The computation of the operating cash flow for year 1 is shown below:
Sales $239,013
Less operating expenses & other cost ($239,013 × 39%) -$93,215.07
Less: Depreciation expenses
($4,020,000 + $214,086) ÷ 5 years -$846,817.20
Earning before interest and taxes -$701,019.27
Less: Taxes at 37% $259,377.13
Net income -$441,642.14
Add: depreciation expenses $846,817.20
Operating cash flow $405,175.06
We simply deduct the operating sales and depreciation expenses from sales so that the EBIT could arrive after that taxes are deducted so that the net income could come and then finally added depreciation expenses so that operating cash flow could come
Wormwood, Ltd., produces a variety of furniture products. The planning committee wants to prepare an aggregate plan for the next six months using the following information: MONTH 1 2 3 4 5 6 Demand 160 150 160 180 170 140 Capacity Regular 150 150 150 150 160 160 Overtime 10 10 0 10 10 10 Cost Per Unit Regular time $ 50 Overtime 75 Subcontract 80 Inventory, per period 4 Subcontracting can handle a maximum of 10 units per month. Beginning inventory is zero. Develop a plan that minimizes total cost. No back orders are allowed. Regular production and overtime production can be less than capacity in any month.
Answer:
Wormwood limited
Production plan that will yield the least cost of $49,630 is shown in the attached document.
It entails maxing out the regular capacity from period 1 to 5, and using regular to produce only 140 units in period 6
It further entails using overtime to produce 10 units from period 1 to 5. And subcontracting only in period 4 to cover the demand/production gap.
This will keep inventory of 10 units in period 2, which is carried into period 3 and consumed in period 4.
To prepare an aggregate plan for Wormwood, Ltd., we need to consider demand and capacity for each month. By comparing the regular production and demand, we can determine if overtime or subcontracting is needed. Calculating the cost for each option will help us choose the plan with the lowest cost.
Explanation:To develop an aggregate plan that minimizes total cost for Wormwood, Ltd., we need to consider the demand and capacity for each month. If the regular production is less than or equal to the demand for a particular month, then no overtime or subcontracting is needed. However, if the regular production is less than the demand, we can use overtime or subcontracting to meet the demand.
Let's calculate the total cost for each option and choose the option with the lowest cost. For example, in Month 1, the demand is 160 and the regular capacity is also 160, so no additional production is needed. In Month 2, the demand is 150 and the regular capacity is 150, so again no additional production is needed.
If you go through this calculation for each month, you will find the aggregate plan that minimizes total cost.
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The management of Blue Spruce Corp. asks your help in determining the comparative effects of the FIFO and LIFO inventory cost flow methods. For 2022, the accounting records show these data. Inventory, January 1 (10,000 units) $ 30,000 Cost of 123,000 units purchased 419,000 Selling price of 100,000 units sold 765,000 Operating expenses 121,000 Units purchased consisted of 38,000 units at $3.20 on May 10; 57,000 units at $3.40 on August 15; and 28,000 units at $3.70 on November 20. Income taxes are 28%. (a) Prepare comparative condensed income statements for 2022 under FIFO and LIFO.
Answer:
Comparative condensed income statements for 2022
LIFO FIFO
Sales 765,000 765,000
Less Cost of Sales (345,400) (327,400)
Gross Profit 419,600 437,600
Less Expenses:
Operating expenses 121,000 121,000
Operating Income before tax 298,600 316,600
Less Income tax (28,608) (88,648)
Operating Income after tax 269,992 227,952
Explanation:
Calculation of Cost of Sales - LIFO
Cost of Sales : 28,000 units×$3.70 = 103,600
57,000 units×$3.40 = 193,800
15,000 units×$3.20 = 48,000
Total =345,400
Calculation of Cost of Sales - FIFO
Cost of Sales : 10,000 units×$3.00 = 30,000
38,000 units×$3.20 = 121,600
52,000 units×$3.40 = 175,800
Total = 327,400
When a firm initiates or increases a cash discount, the net effect on the accounts receivable investment is difficult to determine because the nondiscount takers paying earlier will reduce the accounts receivable investment, while the new customer accounts will increase this investment.
A. True
B. False
Answer:
Yes is True that when a firm initiates or increases a cash discount, the net effect on the accounts receivable investment is difficult to determine because the nondiscount takers paying earlier will reduce the accounts receivable investment, while the new customer accounts will increase this investment.
Explanation:
Accounts Receivable is any amount of money owed by customers for purchases made on credit. It is an asset account on the balance sheet since it is money due in the short run.
As a current asset, Accounts Receivable is an important aspect of a businesses' fundamental analysis used to measures a company's liquidity or ability to cover short-term obligations without additional cash flows.
Accounts receivable Investment will be reduced if the firm initiates or increases a cash discount.
A. True. Offering or increasing cash discounts affects accounts receivable in opposing ways, making it hard to predict the net effect.
The statement is True. When a firm offers or increases a cash discount, it affects the timing and amount of cash inflows. Customers who take advantage of the discount will pay sooner, thus reducing the accounts receivable balance.
However, the firm might also attract new customers who may not take the discount, potentially increasing accounts receivable. These opposing effects make it challenging to predict the net impact on the accounts receivable investment.
A granary allocates the cost of unprocessed wheat to the production of feed, flour, and starch. For the current period, unprocessed wheat was purchased for $310,000, and the following quantities of product and sales revenues were produced. Product Pounds Price per Pound Feed 150,000 $ 1.40 Flour 55,000 2.70 Starch 25,000 6.00 How much of the $310,000 cost should be allocated to feed if the value basis is used
Answer:
$98,973.77
Explanation:
The computation of the amount allocated to feed while using the value basis is shown below:
But before that first we have to find out the total cost which is
Feed (100,000 × $1.40) = $140,000
Flour (55,000 × $2.70) = 148,500
Starch (25,000 × 6) = 150,000
Total 438,500
Now the allocated value is
= 140,000 ÷ 438,500 × $310,000
= $98,973.77
We simply do the above calculations
Final answer:
Approximately $127,842.63 of the $310,000 cost of unprocessed wheat should be allocated to feed based on the value basis using the proportion of feed's revenue in relation to total revenue.
Explanation:
The question asks how much of the $310,000 cost of unprocessed wheat should be allocated to the production of feed on a value basis. To answer this, we must calculate the total revenue for each product and then find the proportion of total revenue that comes from feed. Multiplying this proportion by the total cost of the wheat gives us the allocation for feed.
The total revenue for feed is 150,000 pounds × $1.40 per pound, which equals $210,000. For flour, it is 55,000 pounds × $2.70 per pound, equaling $148,500, and for starch, it is 25,000 pounds × $6.00 per pound, totaling $150,000. The combined revenue for all products is $210,000 + $148,500 + $150,000 = $508,500. The feed's proportion of the total revenue is $210,000 / $508,500. To get the allocation for feed, multiply this proportion by the total cost of the wheat ($310,000), which gives us approximately $127,842.63.
Therefore, $127,842.63 of the $310,000 cost should be allocated to the production of feed.
Wildcat Co. purchased, on open account, 4,000 pounds of direct materials at a total cost of $20,200. The standard cost of these materials, at $5.00 per pound, was $20,000. The company records any price variance for direct materials at point of purchase. During the current month 1,000 units of output were produced. Each unit of output, at standard, requires 2 pounds of direct materials, at $5.00 per pound. A total of 1,950 pounds of material was consumed in production during the month. The direct labor payroll for the period was $25,000 and has yet to be paid. The standard direct labor hours to produce each unit is 2 and the standard wage rate per hour is $11. The actual wage rate per hour was $10. The standard direct manufacturing cost for each unit is $32. During the month, 1,000 units were produced. During the month, 900 units were sold, at a price of $50 per unit. Record the journal entries for each of the events and transactions.
Answer:
Explanation:
The pictures attached shows the full explanation
You own 260 shares of Abco, Inc. stock. The company has stated that it plans on issuing a dividend of $.50 a share at the end of this year and then You own 260 shares of Abco, Inc. stock. The company has stated that it plans on issuing a dividend of $.50 a share at the end of this year and then issuing a final liquidating dividend of $2.10 a share at the end of next year. Your required rate of return on this security is 11 percent. Ignoring taxes, what is the value of one share of this stock today?issuing a final liquidating dividend of $2.10 a share at the end of next year. Your required rate of return on this security is 11 percent. Ignoring taxes, what is the value of one share of this stock today?
Answer:
The answer is $2.15.
Explanation:
The value of one share of this stock today is the sum of present value of future cash flows earned from holding the stock; discounting at required rate of return 11%.
By holding the stock, there are two cash flows earned by shareholders which are:
+ Dividend of $.50 a share at the end of this year whose present value is: 0.5/1.11 = $0.45;
+ Liquidating dividend of $2.10 a share at the end of next year whose present value is: 2.1/1.11^2 = $1.70
=> Value of the stock = 0.45 + 1.70 = $2.15.
So, the answer is $2.15.
Ziegler Corporation reports net income of $380,000 and a weighted-average of 200,000 shares of common stock outstanding for the year. Compute the earnings per share of common stock
Answer:
$1.90 per share
Explanation:
The computation of the earning per share is shown below:
Earning per share = (Net income - preference dividend) ÷ (weighted-average of shares of common stock)
= ($380,000 - $0) ÷ (200,000 shares)
= $1.90 per share
By dividing the net income with the weighted average number of shares of common stock we can get the earning per share
Final answer:
To calculate the earnings per share for Ziegler Corporation, divide the net income of $380,000 by the 200,000 shares outstanding, giving an EPS of $1.90 per share. This figure aids investors in evaluating the company's per-share profitability and contributes to the P/E Ratio's determination.
Explanation:
To compute the earnings per share (EPS) for Ziegler Corporation, you divide the company's net income by the weighted-average number of common stock shares outstanding. According to the information provided, Ziegler Corporation reports a net income of $380,000 and there are 200,000 shares of common stock outstanding. Therefore, the EPS calculation is as follows:
Earnings Per Share = Net Income / Weighted-Average Shares Outstanding:
$380,000 / 200,000 shares$1.90 per shareThis EPS figure is a significant indicator used by investors to assess the company's profitability on a per-share basis and is often factored into the Price to Earnings (P/E) Ratio, which helps determine the value and investment potential of a stock.
5. Elmofud, Inc. is considering splitting its stock. The stock is currently priced at $90 per share. You own 100 shares of the stock. If the firm proceeds with a 3 for 1 split what will your position in the stock be after the split – how many shares will you own, what will the price per share be, and what will your total value be in the stock of Elmofud, Inc.?
Answer:
total value be in the stock $9,000
Explanation:
given data
currently priced = $90 per share
Number of Stocks = 100 share
solution
we get here first Value of Position that is express as
Value of Position = $90 × 100
Value of Position = $9,000
and
After stock split
Number of Stocks will be
Number of Stock = 100 × 3 = 300
and
Price per Share will be
Price per Share = [tex]\frac{90}{3}[/tex]
Price per Share = $30
so
Value of Position = 30 × 300
Value of Position = $9,000
Which of these is an example of demographic data?
A- Personality
B- Appiteite
C- Style
D- Martial Status
Martial Status is an example of demographic data. Option (d) is correct for the question.
What do you mean by Personality?The term "personality" refers to the persistent traits, interests, motivations, values, self-concept, abilities, and emotional patterns that make up a person's particular way of adjusting to life.
A population's traits or changes over time are measured by demographic statistics. Making informed judgments regarding national policy requires access to data from records of births, deaths, marriages, immigration, and emigration as well as a periodical census of the population.
The population pyramid provides a helpful summary of this data. It offers information in an understandable graphical manner regarding the population's sex and age distribution.
The life table is yet another summary. It tracks and projects the life experiences of a cohort of people born in the same year from conception to death. The percentage of a cohort that is anticipated to live through each year (or decade in an abbreviated life table) is displayed in tabular or graphical form.
Therefore, Option (d) is correct. An example of demographic data is martial Status.
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Swift Delivery is a small company that transports business packages between New York and Chicago. It operates a fleet of small vans that moves packages to and from a central depot within each city and uses a common carrier to deliver the packages between the depots in the two cities. Swift Delivery recently acquired approximately $4 million of cash capital from its owners, and its president, George Hay, is trying to identify the most profitable way to invest these funds. Todd Payne, the company’s operations manager, believes that the money should be used to expand the fleet of city vans at a cost of $900,000. He argues that more vans would enable the company to expand its services into new markets, thereby increasing the revenue base. More specifically, he expects cash inflows to increase by $325,000 per year. The additional vans are expected to have an average useful life of four years and a combined salvage value of $100,000. Operating the vans will require additional working capital of $50,000, which will be recovered at the end of the fourth year. In contrast, Oscar Vance, the company’s chief accountant, believes that the funds should be used to purchase large trucks to deliver the packages between the depots in the two cities. The conversion process would produce continuing improvement in operating savings and reduce cash outflows as follows: Year 1 Year 2 Year 3 Year 4 $ 175,000 $ 375,000 $ 450,000 $ 500,000 The large trucks are expected to cost $1,000,000 and to have a four-year useful life and a $81,250 salvage value. In addition to the purchase price of the trucks, up-front training costs are expected to amount to $20,000. Swift Delivery’s management has established a 10 percent desired rate of return. (PV of $1 and PVA of $1) (Use appropriate factor(s) from the tables provided.)
Required a.&b. Determine the net present value and present value index for each investment alternative. (Enter answers in whole dollar, not in million. Round your intermediate calculations and final answers to 2 decimal places.)
Answer:
Check the explanation
Explanation:
Net Present Value (NPV): It the distinction among the initial cash outflow and the present value of cash inflows. It assists in making project investment conclusion. A positive NPV means that the project should be accepted and if it is on negative swing then it should be rejected. Projects with upper NPV should be accepted in case of two mutually exclusive projects having positive net present value.
Use spreadsheet for the required computations. Enter values and formulas in the spreadsheet as shown in the image below.
Swift Delivery must calculate the net present value and present value index for both the option of investing in more vans and the option of purchasing trucks for inter-city deliveries. These calculations will enable them to determine which option is the more profitable one.
Explanation:To determine which investment would be more profitable for Swift Delivery, we need to calculate the Net Present Value (NPV) for both options. NPV is the present value of future cash inflows minus the present value of cash outflows, all calculated at a desired rate of return.
Investment in Vans
To calculate the NPV for Todd Payne's proposal, we take the present value of new cash inflows, the present value of the salvage value of the vans, and subtract the cost of the vans and the working capital needed.
Investment in Trucks
For Oscar Vance's plan, we calculate the present value of the operational savings, add the present value of the salvage value of the trucks, then subtract the cost of the trucks and the upfront training costs.
The investment with the higher NPV is the more profitable one. The Present Value Index (PVI) is calculated by dividing the present value of future net cash inflows by the initial investment. The investment with the higher PVI is the one that gives more return per unit of currency invested.
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Lyons Company deducts insurance expense of $210,000 for tax purposes in 2018, but the expense is not yet recognized for accounting purposes. In 2019, 2020, and 2021, no insurance expense will be deducted for tax purposes, but $70,000 of insurance expense will be reported for accounting purposes in each of these years. Lyons Company has a tax rate of 40% and income taxes payable of $180,000 at the end of 2018. There were no deferred taxes at the beginning of 2018. What is the amount of the deferred tax liability at the end of 2018?
Answer:
$84,000
Explanation:
Deferred tax liability at the end of 2018 = Amount of insurance expense × Tax rate = $210,000 × $40% = $84,000
Therefore, the amount of the deferred tax liability at the end of 2018 is $84,000.