Answer:
The following amounts to be reported on the January 1, 2018 is shown below:-
Explanation:
January 1, 2018 Case A Case B Case C
Financial Statements (issued at 100) (at 96) (at 104)
a. Bonds payable $420,000 $420,000 $420,000
b. Unamortized
Premium (discount) 0 $16,800 $16,800
c. Carrying value $420,000 $403,200 $403,200
Working Note
For Case B Unamortized Premium (discount)
= ($420,000 - ($420,000 ÷ 100 ×96)) = $16,800
For Case C Unamortized Premium (discount)
($420,000 - ($420,000 ÷ 100 ×104)) = $16,800
Under different issuance scenarios, the bonds payable entry remains constant at $420,000 but the amount of unamortized discount or premium, and the resulting carrying value, may differ based on whether the bonds were issued at 100%, 96%, or 104% of their face value.
Explanation:The amount to be recorded in the financial statements for each of the three cases would be calculated as follows:
Case A (issued at 100): The bonds were issued at their face value. Therefore, the bonds payable would be $420,000. There would be no unamortized premium or discount, which means the carrying value would also be $420,000.Case B (issued at 96): The bonds were issued at a discount, so you multiply the face value by 0.96 to get $403,200, which is the carrying value. The unamortized discount would be the face value minus the carrying value, or $16,800. The bonds payable remains $420,000.Case C (issued at 104): Here, the bonds were issued at a premium. Multiply the face value by 1.04 to get the carrying value of $436,800. The unamortized premium is the carrying value minus the face value, or $16,800. The bonds payable still remains $420,000.Learn more about Bonds Issued at Discount and Premium here:https://brainly.com/question/28391873
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The U.S. money supply (M1) at the beginning of 2015 was $2,683.3 billion broken down as follows: $1,165.7 billion in currency, $3.5 billion in traveler's checks, and $1,514.1 billion in checking deposits. Suppose the Fed decided to increase the money supply by decreasing the reserve requirement from 11 percent to 10 percent. Assume all banks were initially loaned up (had no excess reserves) and the quantity of currency and traveler's checks held outside of banks did not change. How large a change in the money supply would have resulted from the change in the reserve requirement? The money supply would change by $ nothing billion. (Round your response to two decimal places and include a minus sign if necessary.)
Answer:
The money supply would change by $168.21 billion.
Explanation:
Checking deposits = $1,514.1 billion
Reserve requirement = 10% or 0.10
Required reserves = $1,514.1 billion * 0.10 = $151.41 billion
Now, reserve requirement has decreased to 9%
New required reserves = $1,514.1 billion * 0.09 = $136.27 billion
Excess reserves created = Old required reserves - new required reserves
Excess reserves created = $151.41 billion - $136.27 billion = $15.14 billion
The excess reserves created is $15.14 billion
Calculate the new money multiplier -
New money multiplier = 1/New reserve requirement = 1/0.09 = 11.11
The new money multiplier is 11.11
Calculate the change in money supply -
Change in money supply = Excess reserves created * New money multiplier
Change in money supply = $15.14 billion * 11.11 = $168.21 billion
Thus,
The money supply would change by $168.21 billion.
Final answer:
The decrease in the reserve requirement from 11% to 10% would result in a potential increase in the money supply by approximately $151.41 billion, assuming all other factors remain constant and banks utilize the full potential of the increased money multiplier.
Explanation:
To calculate the change in the money supply resulting from a decrease in the reserve requirement, we employ the concept of the money multiplier. This is the inverse of the reserve ratio and tells us how much the money supply can potentially expand with each dollar of reserves. When the Fed decreases the reserve requirement ratio from 11% to 10%, the new money multiplier will be 1 divided by 0.10, which equals 10.
Given that all banks were initially loaned up (they didn't hold excess reserves), the full potential of the money multiplier can be utilized. The change in reserves is the amount of checking deposits times the change in the reserve requirement, which is $1,514.1 billion times (0.11 - 0.10) = $15.141 billion in new reserves.
With the new multiplier of 10, the change in money supply is the change in reserves times the multiplier, which is $15.141 billion × 10 = $151.41 billion.
Therefore, the total money supply would increase by approximately $151.41 billion.
Payments on a Jan. 1, 1995 40,000 loan are as follows: 1/1/96 5,000 1/1/97 5,000 1/1/98 5,000 On July 1, 1998 an additional 10,000 is paid on the loan and no more payments are made. If {{d}^{(4)}=0.1} how much is owed on the loan on Jan. 1, 2005?
The amount owed on the loan on Jan. 1, 2005, would be $24,750, which includes the remaining principal of $15,000 and the accrued simple interest of $9,750 over 6.5 years at a 10% annual interest rate.
To calculate how much is owed on the loan on Jan. 1, 2005, we need to account for the payments made and the compounding interest over time. Given that the loan has a decree rate {{d}^{(4)}}=0.1, we can interpret this as an effective annual interest rate of 10%. However, without clarification on how the interest compounds (annually, semi-annually, monthly, etc.), we'll assume simple interest for the sake of this example.
The initial loan is $40,000. Payments of $5,000 were made on Jan 1 of 1996, 1997, and 1998, reducing the principal by $15,000, leaving $25,000. On July 1, 1998, an additional payment of $10,000 was made, further reducing the principal to $15,000. Starting from July 1, 1998, till Jan. 1, 2005, which is 6.5 years, we need to calculate the interest accrued on the remaining $15,000.
The formula for simple interest is I = P * r * t, where I is the interest, P is the principal, r is the annual interest rate, and t is the time in years. Using this formula, we find that the interest accrued will be I = $15,000 * 0.10 * 6.5 which equals $9,750 in interest. Therefore, the amount owed on the loan on Jan. 1, 2005, is the remaining principal plus the accrued interest: $15,000 + $9,750 = $24,750.
In a macroeconomic context, choose the best definition for the term velocity. The rate at which the aggregate price level increases. The rate at which money circulates through an economy. The speed of capital accumulation. The rate at which GDP increases in a year. The rate at which the Federal Reserve increases or decreases the money supply.
Answer:
The rate at which money circulates through an economy.
Explanation:
In Macroeconomics, the term velocity refers to the speed at which money circulates in an economy, and it is a variable in a fundamental macroeconomic equation, the quantity theory of money equation:
M x V = P x T
Which states that the price of goods and services is equal to the amount of money in an economy, or its money supply (M) multiplied by the Velocity of circulation of money, which is in turn equal to price (P) multiplied by the number of transactions (T).
The operations of Knickers Corporation are divided into the Pacers division and the Bulls division. Projections for the next year are as follows: Pacers Bulls Division Division Total Sales revenue $420,000 $252,000 $672,000 Variable expenses 147,000 115,500 262,500 Contribution margin $273,000 $136,500 $409,500 Direct fixed expenses 126,000 105,000 231,000 Segment margin $147,000 $ 31,500 $178,500 Allocated common costs 63,000 47,250 110,250 Total relevant benefit (loss) $ 84,000 $(15,750) $ 68,250 Operating income for Knickers Corporation as a whole if the Bulls division were dropped would be: a.$84,000. b.$99,750. c.$36,750. d.$68,250.
Answer:
c.$36,750
Explanation:
If Bulls Division were dropped, then the total segment margin would be $147,000 and the total common cost would be $110,250, Then:
Operating income = Segment margin - Total cost
= $147,000 - $110,250
= $36,750
Therefore, The Operating income for Knickers Corporation as a whole if the Bulls division were dropped would be $36,750.
To find Knickers Corporation's operating income without the Bulls division, subtract the Bulls' segment margin from the current total operating income and add back any direct fixed expenses that would no longer be incurred. The calculated operating income without the Bulls division is $99,750.
Explanation:In determining the operating income for Knickers Corporation without the Bulls division, we must look at how the elimination of the division will impact the company's finances. Specifically, we should consider only the costs and revenues that will change if the Bulls division is discontinued. The allocated common costs would not be eliminated because these costs are typically corporate overhead and would still be incurred by the company even if the Bulls division was dropped.
The calculation is as follows: Operating income without the Bulls division would be the current total operating income minus the Bulls division's segment margin, but adding back the direct fixed expenses that would be avoided if the division were dropped. Therefore, the operating income without the Bulls division = $178,500 (current total operating income) - $31,500 (Bulls division's segment margin) + $105,000 (Bulls division's direct fixed expenses), resulting in an operating income of $252,000.
Thus, we can conclude that the correct answer would be:
Operating income for Knickers Corporation without the Bulls division = $252,000 - $152,250 (total current segment margin without Bulls' segment margin and adding back Bulls' direct fixed expenses) = $99,750.
The change in inventory value was created purely by accounting and exchange rate factors, because the subsidiary still has the same inventory and assets in place. However, this change would affect Streep’s consolidated financial statements and ratios. Assuming no other changes occurred, what effect would this have on Streep’s current ratio?
Answer:
It would decrease by $7,504.
Explanation:
The current ratio determines liquidity of a company. The current ratio is calculated by dividing total current assets from total current liabilities. The change in inventory will affect the current ratio of the company. In the consolidated financial statements the value of inventory is decreased due to exchange rate fluctuations. The change in value of inventory will affect the amount reported in the balance sheet of the parent and will ultimately result in reduction of current ratio.
Pratte Boat Wash's cost formula for its cleaning equipment and supplies is $2,500 per month plus $48 per boat. For the month of April, the company planned for activity of 55 boats, but the actual level of activity was 13 boats. The actual cleaning equipment and supplies for the month was $3,250. The activity variance for cleaning equipment and supplies in April would be closest to: Multiple Choice $2,016 F $1,890 U
Answer: $2,016
Explanation:
Spending variance is known as the difference between the actual and budgeted amount of a project or good.
When the actual amount exceeds the budgeted amount then the variance is known as UNFAVOURABLE. When it is below the budgeted amount it is FAVOURABLE.
Now, the Actual activity on cleaning equipment and supplies in April was 13 boats.
The Budgeted Activity was 55 boats will be calculated thus,
To calculate the variance therefore, we subtract the cost of making the budgeted activity from the actual one.
Activity Variance = (2,500 + ( 13 boats * 48)) - (2,500 + ( 55 boats * 48 ))
= 3,124 - 5,140
= $2,016
Because the budgeted activity was higher than the actual one, it is FAVOURABLE. Hence the Activity Budget for April was $2,016 Favourable.
A bond has a par value of $1,000, a time to maturity of 20 years, a coupon rate of 10% with interest paid annually, a current price of $850, and a yield to maturity of 12%. Intuitively and without using calculations, if interest payments are reinvested at 10%, the realized compound yield on this bond must be
Answer:
The answer is:
Lower than 12%
Explanation:
The realized compound yield on this bond must lower than the initial yield of 12%
This lead to what will call reinvestment risk. Reinvestment risk is more likely when interest rates are declining(going down).
When interest rate declines, an investor loses money because the real value of the money or fund will be reduced. And reinvesting the money that was initially at 12 percent interest rate will be lower.
Final answer:
The realized compound yield on a bond, with reinvestment of interest at the coupon rate, will be between the coupon rate and the yield to maturity. Without precise calculations, it's not possible to give an exact number, but the yield will be closer to the coupon rate if the reinvestment rate matches the coupon rate.
Explanation:
The question at hand deals with the concept of bond pricing, yield to maturity (YTM), and investment returns. In the given scenario, a bond with a par value of $1,000, a coupon rate of 10%, and a current price of $850 is considered. Intuitively, if the interest payments are reinvested at the same rate as the coupon rate (which is 10%), the realized compound yield should be closer to the coupon rate than the YTM, since the reinvestment rate is not as high as the YTM (which is 12%).
However, because the YTM is higher than the reinvestment rate, the actual realized compound yield would be somewhere between the coupon and the YTM, but we can't provide a precise value without additional calculations. When it comes to the bonds market value, if the market interest rate is higher than the coupon rate, the bond's price will be below par value as investors would demand a higher return, making the current bond less attractive unless it is sold at a discount.
If the government institutes an effective price ceiling on potato chips, then there will be a decrease in demand for and an increase in supply of potato chips. decrease in supply of potato chips. decrease in quantity supplied of potato chips. decrease in demand for potato chips. decrease in quantity demanded for potato chips.
Final answer:
An effective price ceiling on potato chips would lead to an increase in quantity demanded and a decrease in quantity supplied, resulting in a shortage. This is because the imposed price is below the market equilibrium, encouraging more consumers to buy and discouraging producers from selling.
Explanation:
When a government institutes an effective price ceiling on a product like potato chips, it sets a maximum price for the product that is below the market equilibrium. This results in an increase in quantity demanded for potato chips because consumers are more willing to purchase the product at the lower price. However, there is a decrease in quantity supplied, as producers are less inclined to sell their product at this lower price. These dynamics do not decrease the demand for potato chips, but rather they lead to a shortage as the quantity demanded at this lower price exceeds the quantity supplied.
The correct answer to the student's question is that there would be a decrease in quantity supplied of potato chips, not a decrease in demand. The supply curve moves upwards (or to the left) due to the price ceiling, indicating a decrease in quantity supplied at each and every price level below the equilibrium.
You are doing some analysis on the has a market value that is equal to its book value. Currently, the firm has excess cash of $1,000 million and other assets of $9,000 million. Equity is worth $10,000 million. The firm has 700 million shares of stock outstanding and net income of $1,575 million. What will the new earnings per share be if the firm uses 25 percent of its excess cash to complete a stock repurchase?
Answer:
the new earnings per share will be 231 cents
Explanation:
Earnings per share is Earnings attributable to each Common Share.
Earnings Per Share = Earnings attributable to Holders of Common Stock/ Weighted Average Number of Common Shares
= $1,575 million/ (700 million-250/10000×700 million)
= $1,575 million/(700 million-17,2 million)
= 231 cents
Answer:
Earnings per share is $2.31
Explanation:
value of one share=$10,000 million/700 million=$14.29
25% of excess cash =25%*$1000 million=$250 million
Number of shares repurchased=$250 million/$14.29=17.5 million
Outstanding shares after share repurchase=700 million-17.5 million
=682.5 million
Earnings per share =earnings attributable to common stock/number of common stock
earnings stands at $1,575 million
number of common stock 682.5 million
Earnings per share=1,575 million/682.5 million
Earnings per share=$2.31 or 231 cents
The new earnings per share is $2.31 or 231 cents as shown in the step by step analysis above.
Waterway Industries incurs the following costs to produce 11800 units of a subcomponent: Direct materials $9912 Direct labor 13334 Variable overhead 14868 Fixed overhead 16200 An outside supplier has offered to sell Waterway the subcomponent for $2.85 a unit. If Waterway accepts the offer, by how much will net income increase (decrease)?
Answer:
If the company buys the subcomponent, the company will save $4,484.
Explanation:
Giving the following information:
Production= 11,800 units
Direct materials= $9,912
Direct labor= $13,334
Variable overhead= $14,868
Total variable cost= $38,114
An outside supplier has offered to sell Waterway the subcomponent for $2.85 a unit.
We have no reason to believe that the fixed costs are avoidable. Therefore, they take no part in the decision making process.
Total cost of production= 38,114
Total cost of buying= 11,800*2.85= 33,630
If the company buys the subcomponent, the company will save $4,484.
Abbott Landscaping purchased a tractor at a cost of $35,000 and sold it three years later for $17,500. Abbott recorded depreciation using the straight-line method, a five-year service life, and a $2,000 residual value. Tractors are included in the Equipment account. 2. Assume the tractor was sold for $10,900 instead of $17,500. Record the sale
Answer:
Cash Dr $10,900
Accumulated depreciation $19,800
Loss on sale of equipment $4,300
To Equipment $35,000
(Being the sale is recorded)
Explanation:
The journal entry is shown below:
Cash Dr $10,900
Accumulated depreciation $19,800
Loss on sale of equipment $4,300
To Equipment $35,000
(Being the sale is recorded)
The computation is shown below:
= ($35,000 - $2,000) ÷ 5 years × 3 years
= $19,800
Since the sale is made so we debited the cash for $10,900 and along with it the accumulated depreciation is also debited plus the purchase value of equipment is credited and the balancing figure is transferred to the loss on sale of equipment
The long-run supply curve for a product is horizontal with ATC = 200. Market demand is defined as P = 1,000 − 4 Q. The market is competitive and is in long-run equilibrium with 50 firms in the industry. If demand increases to P = 1,240 − 4 Q, how many firms will be in the industry at the new long-run equilibrium?
Answer:
65 firms will be in the industry at the new long run equilibrium
Explanation:
in the long run the P=ATC
quantity before the change is
200 = 1000-4Q
4Q = 800
Q= 200
each firm output = Q/number of firms = 200 / 50
q = 4
new quantity is
200 = 1240-4Q
4Q = 1040
Q = 260
number of firms=new Q/q
=260/4 = 65
the number of firms is 65 in the long run.
Lauren's salary decreases from $44,000 to $30,000 . She decides to reduce the number of outfits she purchases each year from 20 to 19. Use the midpoint method to calculate the income elasticity of demand for new outfits.Round your answer to two decimal places.income elasticity:This good isa normal good.an inferior good.a luxury good.
To calculate the income elasticity of demand using the midpoint method, we need to know the initial and final quantities of the good and the initial and final incomes. In this case, Lauren's initial salary is $44,000, and it decreases to $30,000. The initial quantity of outfits purchased is 20, and it decreases to 19. The income elasticity of demand for new outfits is -0.0076, indicating that outfits are an inferior good.
Explanation:To calculate the income elasticity of demand using the midpoint method, we need to know the initial and final quantities of the good and the initial and final incomes. In this case, Lauren's initial salary is $44,000, and it decreases to $30,000. The initial quantity of outfits purchased is 20, and it decreases to 19.
Using the midpoint method formula:
Income Elasticity = (Q2 - Q1) / [(Q1 + Q2)/2] / (I2 - I1) / [(I1 + I2)/2]
Substituting the values, we get:
Income Elasticity = (19 - 20) / [(20 + 19)/2] / ($30,000 - $44,000) / [($44,000 + $30,000)/2]
Simplifying the expression, we have:
Income Elasticity = -0.053 / $7,000 = -0.0076
Since the income elasticity is negative, it means that outfits are an inferior good for Lauren. The absolute value of the income elasticity is less than 1, indicating that outfits are a basic necessity rather than a luxury.
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Firms experience economies of scaleLOADING... for several reasons. What is one such reason? A firm might experience economies of scale because A. large firms may be required to purchase inputs at higher costs than smaller competitorslarge firms may be required to purchase inputs at higher costs than smaller competitors. B. managers become more specialized comma enabling them to become more productive comma as output expandsmanagers become more specialized, enabling them to become more productive, as output expands. C. managers begin to have difficulty coordinating the operation of the firm. D. as a firm expands comma it may have to borrow money at a higher interest rateas a firm expands, it may have to borrow money at a higher interest rate. E. a firm's technology may make it impossible to increase production without a larger proportional increase input usage.
Answer:
managers become more specialized, enabling them to become more productive
Explanation:
Economies of scale is defined as the benefit a company gains by producing at a larger scale. This can result in increased profit because of lower cost per unit input used, use of technology to increase productivity, borrowing of money at lower interest rate.
When a company increases scale of production managers tend to be more specialised and this increases their effiency and productivity in that aspect. This improves overall productivity in the company
Artisan Inspiration, Inc. is a merchandiser of stone ornaments. The company sold 6 comma 500 units during the year. The company has provided the following information: Sales Revenue $ 571 comma 000 Purchases (excluding Freight In) 302 comma 000 Selling and Administrative Expenses 69 comma 000 Freight In 14 comma 000 Beginning Merchandise Inventory 44 comma 000 Ending Merchandise Inventory 43 comma 000 What is the operating income for the year?
Answer:
the operating income for the year is $185,000
Explanation:
Artisan Inspiration, Inc. Income Statement
Sales 571,000
Less Cost of Goods Sold :
Opening Stock 44,000
Add Purchases 302,000
Add Freight In 14,000 316,000
Available 360,000
Less Closing Stock (43,000) (317,000)
Gross Profit 254,000
Less Expenses :
Selling and Administrative Expenses (69,000)
Net Income 185,000
Rufus owns 12 acres of land he purchased as an investment for $5,390. He spent an additional $34,570 subdividing the land into residential parcels and having utility lines run to the property. After the subdividing and utility lines had been completed, he gifted two acres of the land to his sister as a wedding present.
The cost of subdividing the land is added to the initial cost of the 12acres resulting in a basis of $42,000. The basis of the 2 acres gifted to his sister, $7,000 [($42,000 ÷ 12 = $3,500) x 2] reduces the adjustedbasis in the 10 remaining acres to $35,000.
Original cost $5,000
Additional costs for subdividing 37,000
subdividing37,000Basis before gift $42,000
Gift of two acres ($42,000 ÷ 12 = $3,500 x 2) (7,000)
Adjusted basis of ten acres $35,000
Answer:
Adjusted basis of the 2 plots is $7000
Explanation:
The correct question is as follows;
Determine the Adjusted basis
Rufus owns 12 acres of land he purchased as an investment for $5,000. He spent an additional $37,000 subdividing the land into residential parcels and having utility
lines run to the property. After the subdividing and utility lines had been completed, he gifted two acres of the land to his sister as a wedding present.
Solution
In this question, we are to determine the adjusted basis of land
Please check attachment for table
Kindly note that the basics of 1 acre of land before gifting is $3,500 ($42,000/12). This means the basis of gifted property of two acres is $7000($3,500 * 2)
Answer:
$33,300
Explanation:
The cost of subdividing the land is added to the initial cost of the 12 acres resulting in a basis of $39,960.
The basis of the 2 acres gifted to his sister is therefore:
$6,660 [($39,960÷ 12 = $3,330) x 2]
Thus : reduces the adjusted basis in the 10 remaining acres to $33,300.
Original cost $5,390
Additional costs for subdividing $34,570
Basis before gift $39,960
($34,570+$5,390)
Gift of two acre ($39,960 ÷ 12 = $3,330 x2) (6,660)
Adjusted basis of ten acres $33,300
Suppose there are two independent economic factors, M1 and M2. The risk-free rate is 5%, and all stocks have independent firm-specific components with a standard deviation of 40%. Portfolios A and B are both well diversified. Portfolio Beta on M1 Beta on M2 Expected Return (%) A 1.8 2.2 30 B 2.1 -0.5 8 What is the expected return–beta relationship in this economy?
Answer:
Explanation:
The picture attached shows the solution to the problem
Mr. and Mrs. Mitchell, the owners of a small secondhand store, attended an auction where they bought a used safe for $50. The safe, part of the Sumstad estate, had a locked compartment inside, a fact the auctioneer mentioned. After they bought the safe, the Mitchells had a locksmith open the interior compartment; it contained $32,000 in cash. The locksmith called the police, who impounded the safe, and a lawsuit ensued between the Mitchells and the Sumstad estate to determine the ownership of the cash. Who should get it, and why?
Answer:
Mr and Mrs Mitchell should get it
Explanation:
The reason is that during the Auctioning of the used safe, legal transfer of ownership have took place. The transfer of ownership which is legal and recognizable at law with some consideration with was the $50 has made the transactions successful. The court will call off the ensuing of Mr and Mrs Mitchell also due to be fact that they were not aware of such prior to their transaction of Aution.
However, the $32,000 can be return to the plaintiff if Mr and Mrs Mitchell wishes to do so.
It is not necessary and enforced by the law to return such money, it is at their own discretion.
Question 1 (8 points) Ocean City Kite Company manufactures & sells kites for $7.50 each. The variable cost per kite is $3.50 with the current annual sales volume of 55,000 kites. This volume is currently Ocean City Kite's breaking even point. Use this information to determine the dollar amount of Ocean City Kite Company's fixed costs. (Round dollar value to the nearest whole dollar & enter as whole dollars only.)
Answer:
The correct answer is $220,000.
Explanation:
According to the scenario, computation of the given data are as follows:
Selling price = $7.5
Variable cost = $3.5
Annual sales = 55,000 kites
We can calculate the fixed cost by using following formula:
Fixed cost = Annual sales × ( Selling price - Variable cost )
Fixed cost = 55,000 × ( $7.5 - $3.5 )
= 55,000 × $4
= $220,000
Wala Inc. bases its selling and administrative expense budget on the number of units sold. The variable selling and administrative expense is $4.00 per unit. The budgeted fixed selling and administrative expense is $30,140 per month, which includes depreciation of $3,410. The remainder of the fixed selling and administrative expense represents current cash flows. The sales budget shows 4,100 units are planned to be sold in July.Required:
Prepare the selling and administrative expense budget for July.
Answer:
$43,130
Explanation:
Wala Inc.
Cash disbursements = (Variable selling and administrative cost x Number of direct-labor hours) + (Fixed manufacturing overhead less depreciation)
= (4,100 x $4.00) + ($30,140 - $3,410)
=$16,400+$26,730
=$43,130
Karim Corp. requires a minimum $8,800 cash balance. If necessary, loans are taken to meet this requirement at a cost of 1% interest per month (paid monthly). Any excess cash is used to repay loans at month-end. The cash balance on July 1 is $9,200 and the company has no outstanding loans. Forecasted cash receipts (other than for loans received) and forecasted cash payments (other than for loan or interest payments) follow. July August September Cash receipts $ 24,800 $ 32,800 $ 40,800 Cash payments 29,200 30,800 32,800 Prepare a cash budget for July, August, and September. (Negative balances and Loan repayment amounts (if any) should be indicated with minus sign. Round your final answers to the nearest whole dollar.)
Answer and Explanation:
The preparation of cash budget is given below:-
Cash Budget
Particulars July August September
Beginning cash balance $9,200 $8,800 $8,800
Cash receipt from customer $24,800 $32,800 $40,800
Total cash available $34,000 $41,600 $49,600
Cash payment (29,200) (30,800) ($32,800)
Interest on loan 1% (40) (20)
Preliminary cash balance $4,800 $10,760 $16,780
Loan repay $4,000 (1,960) (2,040)
Ending cash balance $8,800 $8,800 $14,740
Loan balance
At the beginning 0 $4,000 $2,040
Additional loan $4,000 (1,960) (2,040)
Loan balance at the end $4000 $2040 0
A cash budget for Karim Corp. for July, August, and September identifies the need for loans in July and August to maintain the company's minimum cash balance, followed by repayment of all loans in September due to an excess in cash.
Explanation:To create a cash budget for Karim Corp. for July, August, and September, we need to consider the company's cash balance, cash receipts, and cash payments, including any loans taken or repaid.
For July, the company begins with $9,200. After adding the cash receipts of $24,800 and subtracting the cash payments of $29,200, we end up with a balance of $4,800. However, this falls below the minimum cash balance required of $8,800, so a loan of $4,000 is taken out, costing an additional $40 in interest. So, the ending cash balance for July is $4,840.
Now, August. We start with the ending balance from July, $4,840. After adding cash receipts of $32,800 and subtracting cash payments of $30,800, the balance is $6,840. The company is still below the minimum balance, so it borrows $1,960. Including interest, the ending balance for August is $8,816.
For September, the beginning balance is that of August's ending balance, $8,816. Adding cash receipts of $40,800 and subtracting cash payments of $32,800, we get a cash balance of $16,816. The company is above the minimum balance, so it pays back all the loan, with the final balance for September at $16,816.
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Thomas Longbow is the only employee of Presido, Inc. During the first week of January, Longbow earned $1,200.00 and had federal and state income tax withholdings of $60.00 and $22.50, respectively. FICA taxes are 7.65% on earnings up to $117,000. State and federal unemployment taxes for the period are $75.00 and $12.00, respectively. What is Presido's payroll tax expense for the week?
Answer: $178.80
Explanation:
In calculating Presido's payroll tax expense for the week, the following needs to be stated.
As the employer, Presido is not liable to pay the federal and state income tax withholdings of $60.00 and $22.50, respectively.
However they have to pay the FICA taxes of 7.65% on earnings up to $117,000 as well as the state and federal unemployment taxes for the period of $75.00 and $12.00, respectively.
So calculating we have,
= 75 + 12 + (1,200 * 7.65%)
= $178.8
Presido's payroll tax expense for the week is $178.80
Security Technology Inc. (STI) is a manufacturer of an electronic control system used in the manufacture of certain special-duty auto transmissions used primarily for police and military applications. The part sells for $42 per unit and had sales of 24,650 units in the current year, 2018. STI has no inventory on hand at the beginning of 2018 and is projecting sales of 27,950 units in 2019. STI is planning the same production level for 2019 as in 2018, 26,300 units. The variable manufacturing costs for STI are $13, and the variable selling costs are only $0.40 per unit. The fixed manufacturing costs are $184,100 per year, and the fixed selling costs are $630 per year.1. Prepare an income statement for 2012 and 2013 using full costing.2. Prepare an income statement for 2012 and 2013 using variable costing.3. Prepare a reconciliation and explanation of the difference each year in the operating income resulting from the full- and variable-costing methods.
Answer:
Prepare an income statement for 2012 and 2013 using full costing.
2012 2013
Sales 1,035,300 1,173,900
Less Cost of Sales (493,000) (559,600)
Opening Stock 0 33,600
Add Manufacturing Cost ($20×26,300) 526,000 526,000
Less Closing Stock ( 33,000) 0
Gross Profit 542,300 614,300
Less Expenses :
Fixed selling costs (630) (630)
Variable selling costs (9,860) ( 11,180)
Net Income 531,810 602,490
Prepare an income statement for 2012 and 2013 using variable costing.
2012 2013
Sales 1,035,300 1,173,900
Less Cost of Sales (320,450) (363,350)
Opening Stock 0 21,450
Add Manufacturing Cost ($13×26,300) 341,900 341,900
Less Closing Stock ( 21,450) 0
Contribution 714,850 810,550
Less Expenses :
Fixed manufacturing costs (184,100) (184,100)
Fixed selling costs (630) (630)
Variable selling costs (9,860) ( 11,180)
Net Income 520,260 614,640
Reconciliation of Full Costing Profit to Variable Costing Profit
2012 2013
Full Costing Profit 531,810 602,490
Add Opening Stock 0 33,000
Less Closing Stock (33,000) 0
Variable Costing Profit 498,810 635,490
Explanation:
Full Costing Product Cost = Direct Material + Direct Labor + Variable Overheads + Fixed Overheads
= $13+($184,100/26,300 units)
= $20
Prepare an income statement for 2012 and 2013 using full costing.
2012 2013
Sales 1,035,300 1,173,900
Less Cost of Sales (493,000) (559,600)
Opening Stock 0 33,600
Add Manufacturing Cost ($20×26,300) 526,000 526,000
Less Closing Stock ( 33,000) 0
Gross Profit 542,300 614,300
Less Expenses :
Fixed selling costs (630) (630)
Variable selling costs (9,860) ( 11,180)
Net Income 531,810 602,490
Variable Costing Product Cost = Direct Material + Direct Labor + Variable Overheads
= $13
Prepare an income statement for 2012 and 2013 using variable costing.
2012 2013
Sales 1,035,300 1,173,900
Less Cost of Sales (320,450) (363,350)
Opening Stock 0 21,450
Add Manufacturing Cost ($13×26,300) 341,900 341,900
Less Closing Stock ( 21,450) 0
Contribution 714,850 810,550
Less Expenses :
Fixed manufacturing costs (184,100) (184,100)
Fixed selling costs (630) (630)
Variable selling costs (9,860) ( 11,180)
Net Income 520,260 614,640
Reconciliation of Full Costing Profit to Variable Costing Profit
2012 2013
Full Costing Profit 531,810 602,490
Add Opening Stock 0 33,000
Less Closing Stock (33,000) 0
Variable Costing Profit 498,810 635,490
What is one course of action available in every decision making process?
a. Respond in a way which will have only positive consequences
b. Respond in a way which will have no negative consequences
Choose to do nothing about the issue
d. None of the above
Please select the best answer from the choices provided
А
Answer:
Answer C
Explanation:
Final answer:
One course of action in every decision-making process is the option to do nothing about the issue. This is known as the default option. Decision-making also involves the analysis of pros and cons and contemplating the likely consequences, including the potential negatives of inaction.
Explanation:
When confronted by a situation and facing a decision-making process, one course of action available is to choose to do nothing about the issue. This is sometimes referred to as the default option or maintaining the status quo. Making a decision often involves analyzing the pros and cons, anticipating the likely consequences of each action, and considering ethical frameworks such as Utilitarianism, which focuses on the outcomes that would maximize overall happiness or minimize suffering.
However, it's important to note that choosing to do nothing can also have consequences, and this option should not be confused with having no negative consequences. According to the European Commission, ignoring uncertainty, which includes the potential consequences of inaction, may lead to suboptimal decision-making.
Dvorak Company produces a product that requires 5 standard pounds per unit. The standard price is $2.50 per pound. If 1,000 units required 4,500 pounds, which were purchased at $3.00 per pound, what is the direct materials (a) price variance, (b) quantity variance, and (c) 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. a. Direct materials price variance $ b. Direct materials quantity variance $ c. Total direct materials cost variance $
Answer:
a. Direct materials price variance $2,250
b. Direct materials quantity variance - $11,250
c. Total direct materials cost variance - $9,000
Explanation:
a. Direct materials price variance
materials price variance =(AP-SP)×AQ
=($3.00-$2.50)× 4,500 pounds
= $2,250
b. Direct materials quantity variance
materials quantity variance = (AQ-SQ)× SP
= (4,500 pounds - 5,000 pounds)×$2.50
= - $11,250
c. Total direct materials cost variance
Total direct materials cost variance=Direct materials price variance+Direct materials quantity variance
= $2,250-$11,250
= - $9,000
Animer Inc. provides the following information.
Corporate advertising costs = $825,000
Division A-
$4,900,000
Division B-
$7,800,000
Assume that customers with higher revenues benefited more from corporate advertising costs than customers with lower revenues. What is the allocated corporate costs for Division B?
A.
$518,269
B.
$53,593
C.
$318,307
D.
$ 506,693
Answer:
D . $506, 693.
Explanation:
The proper cost apportioning method to be used is ratio. ratio is an expression of two or more items in mathematical term expressing the proportional relationship between them
Corporate advertising cost - $825,000
Division A sales revenue -$4,900,000
Division B sales revenue - $ 7,800,000
Total revenue $12,700,000
Division Being the higher revenue earner = 7,800,000/12,700,000*825,000
= $506,693
Holly took a prospective client to dinner, and after agreeing to a business deal, they went to the theater. Holly paid $350 for the meal and separately paid $226 for the theater tickets, amounts that were reasonable under the circumstances. What amount of these expenditures can Holly deduct as a business expense?
Answer: $175
Explanation:
Here we can see that the business discussion happened only at dinner.
After Dinner they went for entertainment at the Cinema so that amount is not deductible as a business Expense.
The only amount deductible is the $350 for the meal.
Meals with clients are considered to be 50% deductible so solving for that we have,
= 350 * 0.5
= $175
$175 is amount of the expenditures that Holly can deduct as a business expense.
Ikerd Company applies manufacturing overhead to jobs on the basis of machine hours used. Overhead costs are estimated to total $327,080 for the year, and machine usage is estimated at 125,800 hours. For the year, $349,600 of overhead costs are incurred and 130,500 hours are used.
1. Compute the manufacturing overhead rate for the year.
2. What is the amount of under- or overapplied overhead at December 31?
3. Prepare the adjusting entry to assign the under- or overapplied overhead for the year to cost of goods sold.
Answer and Explanation:
The computation is shown below:
a. For the manufacturing overhead rate for the year
As we know that
Manufacturing overhead rate = Estimated overhead cost ÷ machine usage
= $327,080 ÷ 125,800 hours
= $2.60 per hour
b. Now the amount of under- or over applied overhead is
= Applied overhead - actual overhead
where,
Applied overhead is
= 130,500 hours × $2.60
= $339,300
And, the actual overhead is $349,600
So, the under overhead applied is $10,300
3. And, the journal entry is
Cost of goods sold $10,300
To Manufacturing overhead $10,300
(Being the under applied overhead is recorded)
Soar Incorporated is considering eliminating its mountain bike division, which reported an operating loss for the recent year of $5,000. The division sales for the year were $1,052,000 and the variable costs were $862,000. The fixed costs of the division were $195,000. If the mountain bike division is dropped, 30% of the fixed costs allocated to that division could be eliminated. The impact on operating income for eliminating this business segment would be:
Eliminating the mountain bike division will result in a loss of sales revenue, but also savings on variable and some fixed costs. The net impact is a further decrease in operating income by $131,500, making it less advantageous to eliminate the division.
Explanation:To determine the impact on operating income for Soar Incorporated when considering the elimination of its mountain bike division, we need to evaluate the cost savings against the revenue that the division currently generates. The operating loss of the mountain bike division is $5,000, with sales of $1,052,000 and variable costs of $862,000. The fixed costs are $195,000, of which 30% can be eliminated if the division is dropped. Therefore, the savings in fixed costs are 0.30 x $195,000 = $58,500. If the mountain bike division is eliminated, the company would no longer incur its variable costs nor its segment of fixed costs, but it would also lose the division's sales revenue.
The calculation of the operating income impact would be as follows:
Lost revenue from division elimination: $1,052,000Saved variable costs: $862,000Saved fixed costs (30% of $195,000): $58,500The net impact on operating income is thus: $862,000 (saved variable costs) + $58,500 (saved fixed costs) - $1,052,000 (lost revenue) = - $131,500. This implies that eliminating the mountain bike division would decrease operating income by $131,500 compared to the current loss of $5,000, therefore eliminating the division will not be advantageous based on these financials alone.
The law firm of Barnes & Cohen purchased a new $17,600 copier. Copying costs will be shared by the purchasing, accounting, and information technology departments since those are the only departments that will have access to the machine. The company has decided to allocate the copying cost based on the number of copies made by each department. The sales person who sold the copier to the attorneys expects it will generate 1,000,000 copies. The manager of each department has estimated the number of copies that his or her department will make over the life of the copier:
Department CopiesPurchasing 150,000Accounting 450,000Information Technology 200,000How much overhead will be allocated each time a copy is made by the accounting department?A) 2.2 centsB) 3.9 centsC) 1.76 centsD) None of the above
Answer:
A. 2.2 cents
Explanation:
The computation of cost per copy for accounting department is shown below:-
Total copies = Purchase + Accounting + Information technology
= $150,000 + $450,000 + $200,000
= $800,000
Cost for accounting department = Accounting ÷ Total copies × New copier
= $450,000 ÷ $800,000 × $17,600
= $9,900
Now, Cost per copy = Cost for accounting department ÷ Accounting
= $9,900 ÷ $450,000
= 2.2 cents
Final answer:
The overhead allocated each time a copy is made by the accounting department of Barnes & Cohen's new copier is 1.76 cents, calculated based on the total cost of the copier and the total expected number of copies it will produce.
Explanation:
To calculate the overhead allocation for each copy made by the accounting department, we need to first understand the total cost of the copier and the total expected number of copies. The copier costs $17,600 and is expected to generate 1,000,000 copies over its lifespan. The overhead cost per copy can be calculated as the total cost divided by the total expected copies, which is $17,600 / 1,000,000 = $0.0176 or 1.76 cents per copy. Since the accounting department's copies are part of the total copies, the overhead allocated each time a copy is made by the accounting department is also 1.76 cents, matching option C).