Nutty Productions Inc. generated service revenue of $56,000 and income from operations of $23,000. The company estimates that, had it extended credit it would have instead generated $99,000 of service revenue, but it would have incurred $38,000 of additional expenses for wages and bad debts. 1-a. Using these estimates, calculate the amount by which Income from Operations would increase By___________

Answer:

The computations are shown below:

Explanation:

Return On Assets = Net income ÷ Average Total Assets × 100

where,

Average of Assets =  (Beginning Total Assets + Ending Total Assets) ÷ 2

= ($75,183 + $116,371) ÷ 2

= $191,554 ÷ 2

= $95,777

So, the return on investment is  

=$25,922 ÷ $95,777 × 100

= 27.06%

Profit Margin = Net income ÷ Sales × 100

= $25,922 ÷ $108,249 × 100

= 23.95%

Assets Turnover = Sales ÷ Average of  Total Assets

= $108,249 ÷$95,777

= 1.13

To calculate Sub Station's financial ratios, we found its return on assets to be 27.07%, profit margin to be 23.94%, and asset turnover ratio to be 1.13.

Here’s a step-by-step explanation:

1. Return on Assets (ROA)

Return on Assets measures how efficiently a company uses its assets to generate profit.

ROA = (Net Income / Average Total Assets) x 100

Average Total Assets = (Total assets, beginning + Total assets, ending) / 2

For Sub Station:

Average Total Assets = ($75,183 + $116,371) / 2 = $95,777

ROA = ($25,922 / $95,777) x 100 = 27.07%

2. Profit Margin

The Profit Margin indicates the percentage of revenue that has turned into profit.

Profit Margin = (Net Income / Net Sales) x 100

For Sub Station:

Profit Margin = ($25,922 / $108,249) x 100 = 23.94%

3. Asset Turnover Ratio

The Asset Turnover Ratio measures the efficiency of a company's use of its assets to generate sales.

Asset Turnover Ratio = Net Sales / Average Total Assets

For Sub Station:

Asset Turnover Ratio = $108,249 / $95,777 = 1.13

Answer: d. lowers the discount rate. The increase will be larger the smaller the reserve ratio is

Explanation: The money supply is given as the total amount of money (bills, coins, loans, credit, and other liquid instruments) in a particular economy (in circulation or in existence).

The Fed has a number of tools for managing the money supply which include: changing the discount rate, changing the reserve requirement, conducting open market operations and redeeming Federal Reserve notes.

Using the discount rate, which is the interest rate the Federal Reserve charges on loans from the Federal Reserve, to increase money supply, the Fed lowers the discount rate which basically increases excess reserves in commercial banks across the economy thus increasing the money supply. The increase in the money supply will be significantly larger the smaller the reserve ratio is.

Answer:

1. Total Annual Cash Inflows = 5000

2. Discount Factor = 3.72

3. New Machine's internal rate of return = 16%

Explanation:

Note: the question is incomplete and it lacks essential data to be used in part 4. Without the exhibits mentioned in the questions, it is not possible to solve this question completely. We will be solving it till part 3.

1) What would be the total annual cash inflows associated with the new machine for capital budgeting purposes?

Answer:

In this we have to calculate the total annual cash inflows and the formula to calculate it is mentioned below:

Total Annual Cash Inflows = Savings in Part Time help annually + Additional contribution Margin from Expected Sales.

Total Annual Cash Inflows = 3800  + ( 1000 x 1.20)

Total Annual Cash Inflows =  3800 + 1200

Total Annual Cash Inflows = 5000

2. What discount factor should be used to compute the new machine’s internal rate of return?

Answer:

Formula to calculate the Discount factor:

Discount Factor = Price of new machine/ annual cash inflow

Price of new machine = 18600 USD

Annual cash inflow = 5000

Discount Factor = 18600 /5000

Discount Factor = 3.72

3.  What is the new machine’s internal rate of return?

Answer:

As, it can be seen from the exhibits (which are missing from this question)  that the discount factor for 6 years is nearly closest to 16%, hence the new machine's internal rate of return = 16%

Note: the question is incomplete and it lacks essential data to be used in part 4. without the exhibits mentioned in the questions. It is impossible to solve further.

The total annual cash inflow is $5,000. There isn't enough information provided to calculate the discount factor and the Internal Rate of Return (IRR). The salvage value will also change the calculation.

1. To calculate the total annual cash inflows, we add the cost savings from reducing part-time help and the additional contribution from the sale of new donuts. The cost saving is $3,800. The additional contribution is the number of dozens of new donuts (1,000) times the contribution margin per dozen ($1.20), which is $1,200. So, the total annual cash inflows are $3,800+$1,200=$5,000.

2. The question does not provide enough information to determine the discount factor. Normally, it would either be provided or calculated based on a given discount rate (interest rate).

3. The Internal Rate of Return (IRR) also cannot be determined without either the net present value at a specific discount rate or the cash inflows for each year given. The IRR is the discount rate that makes the Net Present Value (NPV) of a project zero.

4. With a salvage value, the calculation would change, as the salvage value is a one-time cash inflow at the end of the machine’s life. Again, without specific annual cash inflows, it is impossible to accurately calculate the IRR.

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After six years, the investment will be worth approximately $2925.

To calculate the value of the investment after six years, we can use the formula for compound interest:
[tex]A = P(1 + r/n)^{(nt)}[/tex]
Where:
A = future value
P = the initial principal amount ($1500 in this case)
r = the annual interest rate (12% or 0.12 in decimal form)
n = the number of times the interest is compounded per year (assuming it is compounded annually, n would be 1)
t = the number of years the money is invested for (6 years in this case)
we get:

[tex]A = 1500(1 + 0.12/1)^{(1*6)}\\A = 1500(1 + 0.12)^6\\A = 1500(1.12)^6[/tex]

Calculating the value inside the parentheses first:

[tex](1.12)^6[/tex] = 1.95 (rounded to two decimal places)

A = 1500 * 1.95
A ≈ 2925

Therefore, after six years, the investment will be worth approximately $2925.

To find the break-even point for continuing the Doombug toy line, Draper Corporation needs to equate the unavoidable fixed costs with the contribution margin per unit. They would need to sell 16,000 units after dropping the avoidable fixed costs to break even.

The question from the Draper Corporation case relates to the analysis of whether to continue or discontinue the Doombug toy line. This situation can be evaluated using break-even analysis in a managerial accounting context. The calculation must factor in the unavoidable fixed costs that Draper Corporation would continue to incur and the avoidable fixed costs saved if the production ceases.

To find the sales level at which the company should be indifferent between continuing or discontinuing the Doombug, we need the contribution margin per unit and the avoidable fixed costs. The contribution margin per unit is calculated by taking the total contribution margin ($30,000) and dividing it by the number of units sold (15,000 units), giving $2 per unit. To cover the remaining fixed costs ($32,000, which is $40,000 total fixed costs minus $8,000 avoidable costs), divide these costs by the contribution margin per unit:
Breakeven Units = [tex]\frac{Total Fixed Costs - Avoidable Fixed Costs}{Contribution Margin per Unit}[/tex] =[tex]\frac{\$32,000}{\$2}[/tex] = 16,000  units $$

Thus, the Draper Corporation would need to sell 16,000 units of the Doombug after dropping the avoidable fixed costs to break even and be indifferent to the decision to stop production.

Answer:

Qualified Business Income Deduction is $9,800

Tax liability = $4,564

Explanation:

Qualified business income is calculated by subtracting an individual's ordinary deduction from a qualified business or trade from the individual's ordinary income.

Net income = $61,000

Standard deduction = $12,000

Modified taxable income;

$61,000 - $12,000 = $49,000

QBI Deduction (Sec 199A) is the lesser of:

[0.2 × 49,000 < 0.2 × 61,000]

$9,800 < $12,200

Therefore Qualified Business Income Deduction is $9,800

Taxable income = $(49,000 - 9800) =$39,200

Answer:

henry grubs what he loves

Every transaction will have effects on the financial statements of the organization. The effect can be on more than one financial statement.

a. Rent :

b. Insurance :

c. Office Supplies :

d. Depreciation :

e. Un billed Fees :

f. Unpaid Wages :

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Financial adjustments impact both the income statement and balance sheet, altering net income and account values. Taxable income is a key factor in these adjustments, and the merchandise trade balance, determined by exports and imports, affects the financial statements.

To evaluate the impact of financial adjustments on income statements and balance sheets, it's essential to recognize how each adjustment affects these financial documents. When identifying the effects on net income, adjustments either increase or decrease the profitability as displayed in the income statement. For the balance sheet, adjustments alter the value of assets, liabilities, or equity.

Consider taxable income, which is calculated by subtracting deductions and exemptions from the adjusted gross income. Different tax rates apply to different income levels, which could lead to further adjustments. Remember, the calculation of net income is influenced by various components, including tax rates and credits, as well as any alternative minimum tax.

When focusing on the merchandise trade balance, a few steps are integral. Step 1 requires entering the export amount of goods and services; Step 2, recording imports; and Step 3 marks the entry of income payments under exports. The merchandise trade balance (Step 9), for example, is obtained by subtracting the value of imports from exports, with unilateral transfers also affecting the balance.

These transactions not only affect the overall trade balance but also have implications for the national income and subsequently the tax computations, which could adjust the net income. It is vital to carefully identify each adjustment to accurately reflect its impact on both the income statement and balance sheet accounts.

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Answer:

$404,000

Explanation:

Overheads includes all indirect cost incurred to product the units to be sold. Indirect costs are those costs which are not directly traceable / attributable to the product. These cost are variable and fixed.

Time for each unit = 30 minutes = 0.5 hours

Budgeted production in November = Closing Inventory + Sales in November - Opening Inventory.

Budgeted production in November = (180,000 x 10% ) + 135,000 - 14,000 = 139,000

Budgeted production overhead Included all the variable and fixed overheads incurred to produce the budgeted production.

Variable overhead = 139,000 x 5 X 0.5 = $347,500

Total budgeted Overhead = $347,500 + $56,500 = $404,000

Answer:

The answer is 0,5739.

Explanation:

If we subtract the cost of goods and other expenses from the net sales revenue, we get $181,500.

The balance of fixed assets at the end is $400,000 and the stockholders' equity is $875,000.

The difference in the balance of fixed assets is $28,000 and the difference in the stockholders' equity is $365,000.

So the return on equity ratio can be computed as follows;

(181,500+28,000) / 365,000 = 0,5739.

I hope this answer helps.

Answer:

X demand would rise by 8% ; Y demand would fall by 4%

Explanation:

Price Elasticity of Demand is the responsiveness in demand quantity, due to change in good's price

P.Ed = % change in demand / % change in own price

Cross Price Elasticity is the responsiveness in a good's demand quantity, due to change in other good's price

C.Ed = % change in demand (Y) / % change in other good's price (X)

Given {Good X Elasticities} : P.Ed =  (-) 4 ; C.Ed = 2

Price of X decrease = 2%

P.Ed = 4  = % change in demand / 2

% change in demand of X = 2 x 4 = 8%

P.Ed absolute value ignoring negative has been taken due to law of demand price - demand inverse relationship already depicting it. So, 2% fall in price of X increases it's quantity demanded by 8%

C.Ed = 2 =  % change in Y demand  / 2

% change in Y demand = 2 x 2 = 4%

Cross Price Elasticity of demand is positive in case of substitute goods. These goods can be interchange-ably used to satisfy a particular want. Substitutes price & demand are directly related;- as price fall of a good makes it relatively cheap, increases its demand, decreases other good's demand. So, 2% decrease in good X price decreases good Y demand by 4%

Answer:

$600

Explanation:

Normal selling price for baskets of dried fruits = $20

No. of baskets ordered = 150

At this price, the total selling revenue will be =$20*150 =$3000

Variable cost = $11*150 =$1650

Manufacturing overhead cost = $6*150 =$900

Income at a selling price of $20 = $3000-$(1650+900)=$450

For the special order

Selling price= $20

Total selling revenue =$16*150=$2400

Income at a selling price of $16 = $2400-$2550 = -$150 loss

The opportunity cost of this decision will be leaving a profit of $450 and obtaining a loss of $150

Total opportunity cost that must be considered in the incremental analysis for this decision =$450 +$150 =$600

The total opportunity cost for Fruit First is the lost profit on the displaced orders, which is 150 baskets x $9 lost contribution margin per basket, amounting to $1350.

The total opportunity cost for Fruit First in accepting Carol Costellano's special order at a special price involves calculating the loss from the reduced price per unit and the cost of cancelling existing orders. To fill the special order at $16 per unit instead of the regular $20, the company already incurs a lost contribution margin of $4 per unit (the difference between the usual selling price and the special order price). Since the variable cost is $11 per unit, the contribution margin on the regular orders would have been $9 per unit ($20 - $11). However, because the company is operating at full capacity, the opportunity cost also includes the profit forgone from the orders that must be canceled to accommodate this special order. If the fixed manufacturing overhead is $6 per unit and is unrecoverable, this cost should not figure into the incremental analysis for the special order as it is a sunk cost, assuming the fixed overhead does not increase because of the special order.

For 150 baskets, the total opportunity cost would therefore involve the lost profit on the displaced regular orders: 150 baskets  imes $9 lost contribution margin per basket = $1350. The opportunity cost is the foregone profit from the orders that are cancelled to take on the special order.

Nonprofit organizations are businesses that aim to provide charitable, religious, or educational purposes rather than making a profit. They may provide public services such as healthcare, education, or social support. These organizations are considered public corporations because they serve the public good and rely on funding or donations to fulfill their mission.

A nonprofit organization is a business entity that has a primary mission of providing charitable, religious, or educational purposes, rather than making a profit.

Some examples of nonprofit corporations in your area might include a nonprofit health organization, a private hospital, or a governmental agency like Health and Social Services.

A nonprofit health organization, for example, provides public health services such as medical research, health education, or access to affordable healthcare for disadvantaged populations.

These organizations are considered public rather than private corporations because their main goal is to serve the public good rather than generating profit for shareholders or owners. They may receive government funding, rely on donations, or operate using volunteer labor to fulfill their mission.

Answer:

Opportunity costs are defined as the additional costs or benefits lost from choosing one activity or investment over another alternative. It is a relative concept because you cannot be 100% sure that the other investments or activities would have yielded a specific gain.

For example, when you calculate the economic cost of starting your own business, you consider your current salary as an opportunity cost. But what happens if you get fired (or the company closes), your opportunity cost would have been $0? Or how can you exactly measure your future salaries? Maybe in a couple of years you get promoted to manager, or maybe not?

The same applies to economies, since the opportunity cost of producing certain tradable goods is not always fixed, it might decrease or increase due to productivity or efficiency changes. But in order to calculate or determine we must include the most probable option.

In microeconomics, a strictly convex production possibilities frontier function must include a combination of both goods. In strict convexity, the second derivative f''(x) ˃ 0, so the PFF curve cannot be straight, it must have a slope.

When we calculate the opportunity costs of PPF, we usually try to determine which product has the lowest opportunity cost, but that is not an interior solution because both goods are not being produced (the curve is not strictly convex). On a strictly convex curve, as you approach the extremes the opportunity cost of producing one good is high, but on the center the opportunity cost is much lower.

Answer:

a. The journal entry would be as follows:        

                                                                                       Debit           Credit

December 31, 2017   Lease Rent Expense        $650,000  

                                                                       Cash           $650,000

b. The Lease rent expense of $ 650,000 will be reported on the 2017 income statement as an operating expense for computation of net operating income.

c. The annual lease payment that results in a present value ofminimum lease payments equal to 90% of the fair market value of the airplane is $710,883

Regarding The cash outflow of $ 650,000 will be reported in the Operating Activities section of the Statement of Cash Flows for the year ended December 31, 2017.

Explanation:

In order to know what journal entries related to thelease arrangement should be recorded during 2017, first we need to calculate the Present Value Annuity as follows:

Present Value Annuity = [1-(1+r)^-n]/r

                                      =[1-(1+.045)^-10]/0.045 = $7.9127

Hence, Present value of the minimum lease payments = $ 650,000 x 7.9127 = $ 5,143,255

 a. The journal entry would be as follows:        

                                                                                       Debit           Credit

December 31, 2017   Lease Rent Expense        $650,000  

                                                                       Cash           $650,000

b. The Lease rent expense of $ 650,000 will be reported on the 2017 income statement as an operating expense for computation of net operating income.

Regarding The cash outflow of $ 650,000 will be reported in the Operating Activities section of the Statement of Cash Flows for the year ended December 31, 2017.

c. In order to calculate the annual lease payment that results in a present value ofminimum lease payments equal to 90% of the fair market value of the airplane we would have to use the following formula:

Annual lease payments that would result in present value of minimum lease payments of 90 % of the fair market value of the airplane = $ (6,250,000 x 90% ) / 7.9127 = $ 710,883

Answer:

Kindly refer to the attached document for answers 1 to 3

4. If $33 was written off additionally

Then transfer to receivables in the year would have declined to $1,317 from $1,350 and the receivables balance would then be $16,167 from $16,200

Net income will not be affected by the $33 additional write off

To address the student's question, the T-account for 2014 was prepared, the equation was used to prove the changes in the Allowance for Doubtful Accounts, summary journal entries for 2015 were recorded, and the missing write-offs for 2016 were calculated. It was also determined that an additional write-off of $33 would decrease Net Receivables but not affect Net Income.

Understanding Allowance for Doubtful Accounts

To prepare a T-account for the Allowance for Doubtful Accounts using the 2014 amounts, you would note the beginning balance as a credit (since it is a contra asset account), add the increases for the year as credits, and the decreases as debits. By the end of 2014, the transactions will reflect a credit balance of $8,300.

T-account for 2014:

Beginning balance (Credit): $12,800

Bad Debt Expense (Credit increase): $1,050

Write-offs (Debit decrease): $5,550

Ending balance (Credit): $8,300

To write the T-account in equation format:

Beginning balance + Increases (Bad Debt Expense) - Decreases (Write-offs) = Ending balance

$12,800 + $1,050 - $5,550 = $8,300

Summary Journal Entries for 2015:

(a) Bad Debt Expense
Debit: Bad Debt Expense $4,750 (Expense increases)
Credit: Allowance for Doubtful Accounts $4,750 (Contra asset increases)

(b) Write-Offs
Debit: Allowance for Doubtful Accounts $3,750 (Contra asset decreases)
Credit: Accounts Receivable $3,750 (Asset decreases)

Missing Information for 2016:

To find the missing write-offs for 2016, we can use the equation format:

$9,300 (Beginning balance) + $4,150 (Bad Debt Expense) - Write-offs = $1,350 (Ending balance)

Write-offs = $9,300 + $4,150 - $1,350 = $12,100

Effect of Additional Write-Offs:

If Travel Today had written off an additional $33 in Accounts Receivable during 2016, the Net Receivables would decrease by $33, and there would be no effect on Net Income, as write-offs affect only the balance sheet accounts and have no impact on the income statement once the allowance for doubtful accounts has been adjusted for the Bad Debt Expense.

Answer:

The study of how human beings COORDINATE their WANTS and DESIRES, given the decision making mechanisms, social customs, and political realities of the society

Answer:

Payback is 6.5 years

simple rate of return is 6.50%

Explanation:

The payback period for the investment is the number of years it would take the initial capital outlay of $537,600 to recoup itself,which is given by the formula below:

payback period=initial investment/annual incremental savings

initial investment is $537,600

annual incremental savings is $82,708

payback period=$537,600/$82,708= 6.5 years

Simple rate of return =annual savings-depreciation/initial investment

depreciation=($537,600-$107,520)/9=$47,786.67  

simple rate of return=($82,708-$47,786.67)/$537,600=6.50%

Answer:

$23,859.25

Explanation:

As we know that

Future value = Present value × (1 + interest rate)^number of years

where,

Future value = $34,000

Interest rate and the number of years are different to each other

So, the present value is

$34,000 = Present value × (1.03)^6 × (1.036)^5

$34,000 = Present value × 1.4250238247

So, the present value is $23,859.25

We simply applied the above formula so that the approximate today deposited value or present value could come

To determine the present value required to meet the future goal of $34,000 in 11 years at two different interest rates, you must perform a two-step calculation involving the compound interest formula. First, calculate the amount $34,000 would be equivalent to after 5 years at 3.6% interest, and then determine its equivalent after another 6 years at 3% interest, thereby revealing the initial deposit needed today.

To calculate how much you would need to deposit today to have $34,000 in 11 years with different interest rates for different periods, you would use the compound interest formula and present value calculations. Let's first find the future value of the deposit after the first 6 years using the first interest rate of 3 percent. Then, we'll need to grow that amount for the next 5 years at the 3.6 percent rate.

The compound interest formula is A = P(1 + r/n)nt, where:
A = the future value of the investment/loan, including interest
P = the principal investment amount (the initial deposit or loan amount)
r = the annual interest rate (decimal)
n = the number of times that interest is compounded per year
t = the number of years the money is invested or borrowed for

For the first 6 years at 3 percent:
P = unknown
r = 0.03
n = 1 (compounded annually)
t = 6

Then, for the next 5 years at 3.6 percent:
r = 0.036
t = 5

First, calculate the amount after 6 years.
P(1 + 0.03)6 = X, where X is the amount we'll have after 6 years.

Next, we will grow X for another 5 years at 3.6%
X(1 + 0.036)5 = $34,000

Now, we must work backwards to find X and then P using the reverse of the compound interest formula (in this case considering it as the present value), which ultimately needs to be solved for P.

Ultimately, to find out how much to deposit today, we calculate the present value of $34,000 discounted back 5 years at 3.6%, and then the result further discounted back 6 years at 3%.

Hoffman, Inc. will distribute $2.65 per share as its subsequent dividend. It is expected that the dividend growth rate would always be 4.5 percent. The needed return per share is 10.64% if the company now trades for $43.15 per share.

R=(D1/P0)+g R=(2.65/43.15)+.045 R=.1064, or 10.64%

A dividend payment made by a company to its shareholders out of its profits. A corporation is allowed to pay shareholders a portion of its profit as a dividend when it has a profit or surplus dividend payment.

Any unused funds are retained and reinvested back into the company (called retained earnings). Both the profit from the current year and the retained earnings from prior years are available for distribution; a corporation is typically not allowed to pay a dividend out of its capital.

The sum that is distributed to shareholders may be paid in cash (often a deposit into a bank account) or, if the company has a dividend reinvestment plan

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Answer:

1. $41,100

2. $40,580

3. $28,100

Explanation:

1. Sales volume increase by 40 units

Total sales                           $229,400

7,440 × $31

Less: Variable Expense        $133,200

7,440 × $18                                                      

Contribution margin              $96,200

Less: Fixed expenses            $55,100

Net operating income           $41,100

2. Sales volume decreases by 40 units

Sales Volume                         $228,160

7,360 × $31

Less: Variable expense          $132,480

7,360 × $18

Contribution margin                $95,680

Less: Fixed expenses            $55,100

Net operating income            $40,580

3. Sales volume is 6,400 units

Total sales                             $198,400

6,400 × $31

Less: Variable expense        $115,200

6,400 × $18

Contribution margin                $83,200

Less: Fixed expenses            $55,100

Net operating income            $28,100

Answer: 665000

Explanation:

N/a

Answer:

The correct answer is letter "B": availability.

Explanation:

Availability bias or availability heuristic refers to individuals tending to relate the easiest judgment they can recall about a certain matter as its most suitable metric and even a metric that could predict future behavior on that topic. This happens because those people make assumptions based on what they can remember of that matter which might not be necessarily the most accurate input about it.

Therefore, if a manager is measuring performance only placing focus on employees' recent and not past behavior, the manager is implementing availability bias.

Answer:

Tablets are used by a majority of consumers. Although the tablets underwent a major advance from 2020 to 2021, the price of the tablets remained the same. Therefore, the CPI would largely remain the same as the price of tablets remained the same.

Unchanged CPI

Answer:

The correct answer is C

Explanation:

Economies is the study of how the society uses the resources which are limited and it deals with the consumption, production as well as distribution of the goods and services.

And under the economics the cost of something like or product is defined as what the person give up in order to get something.

For example, a person wants to purchase to product, he needs to give up the money against it in order to have the product or item with him.

Answer:

Explanation:

Check the attached file for well formatted answer

Amount of the lease receivable = $211,999

Journal entries for Blossom for 2020 are as follows :-

Date Account Titles and Explanation Debit Credit

1/1/20 Lease receivable A/c Dr. $211,999  

Cost of goods sold A/c Dr. $146,000  

To Sales A/c  $211,999

To Inventory A/c  $146,000

(To record the lease)  

Cash A/c Dr. $32,207  

To Lease receivable A/c  $32,207

(To record the first lease payment)  

12/31/20 Interest receivable A/c Dr. $10787.52  

To Interest revenue A/c

[($211,999 - $32,207) × 6% rate]

$10,787.52

(To record interest receivable on the amount after first annual payments)  

1/1/2020 Cash A/c Dr. $32,207  

To Deposit Liability A/c  $32,207

( To record the collectibility of the lease payments was not probable for Blossom)

1/1/2020 Inventory A/c Dr. $1,470  

To Gain on Lease A/c  $1,470

The computed lease receivable for Blossom is $201,108.44. Journal entries will include recording the lease payment and the interest revenue. If collectability is not probable, only lease revenue is recognized as payments are received. If at the end of the lease the machine has a fair value of $1,470, an entry is made to recognize this.

The lease receivable represents the current value of the lease payments that Blossom Company expects to receive over the 8-year lease term. The lease payments are an annuity due as they are received at the beginning of each year. As such, the amount of the lease receivable can be calculated as follows:

Lease Receivable = Lease Payment * ((1 - (1 + Interest Rate) ^ - Lease Term) / Interest Rate)

Plugging in the given values:

Lease Receivable = $32,207 * ((1 - (1 + 6%) ^ -8) / 6%) = $201,108.44.

The necessary journal entries for Blossom in 2020 will include:

However, if the collectability of the lease payments was not probable for Blossom, the company would only recognize revenue as the payments are received. Thus, the only journal entry in 2020 would be:

January 1, 2020: Debit Cash $32,207, Credit Lease Revenue $32,207.

Finally, at the end of the lease term, if Blossom finds that the machine has a fair value of $1,470, the company would make the following entry:

Debit Equipment $1,470, Credit Gain on Return of Leased Equipment $1,470 (assuming Blossom had fully depreciated the machine by this time).

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Answer:

d. $44,700

Explanation:

The preparation of the Cash Flows from Operating Activities - Indirect Method is shown below:

Cash flow from Operating activities - Indirect method

Net income $40,000

Add : Depreciation expense $8,000

Less: Decrease in accounts payable -$1,800

Add: Decrease in merchandise inventory $2,500

Less:  Increase in accounts receivable -$4,000

Net cash flows from operating activities    $44,700

The long term liabilities and the common stock is not relevant. Hence, ignored it

Final answer:

The net cash flows from operating activities using the indirect method would be $44,700 after adding back non-cash depreciation expense, subtracting the increase in accounts receivable, adding the decrease in merchandise inventory, and subtracting the decrease in accounts payable to the net income.

Explanation:

To calculate the net cash flows from operating activities using the indirect method, we start with the net income and make adjustments for non-cash expenses and changes in working capital. We add back depreciation since it's a non-cash expense and adjust for the changes in working capital accounts (accounts receivable, inventory, accounts payable).

The calculation is as follows:

Net Income: $40,000

Add: Depreciation Expense: $8,000

Decrease in Accounts Receivable: Subtract the increase: $(4,000)

Decrease in Merchandise Inventory: Add the decrease: $2,500

Decrease in Accounts Payable: Subtract the decrease: $(1,800)

Now, we sum these amounts:

$40,000 (Net Income)

+$8,000 (Depreciation Expense)

-$4,000 (Increase in Accounts Receivable)

+$2,500 (Decrease in Merchandise Inventory)

-$1,800 (Decrease in Accounts Payable)

Total adjustments = $8,000 - $4,000 + $2,500 - $1,800 = $4,700

Net cash provided by operating activities = $40,000 + $4,700 = $44,700

Therefore, the correct answer is (d) $44,700.

To prepare the statement of cash flows using the indirect method, start with the net income and then adjust it for non-cash expenses and changes in operating assets and liabilities. Santana Rey's equity contribution and dividends were also taken into account to determine the overall increase in cash.

To prepare a statement of cash flows for Business Solutions using the indirect method, we begin with the net income and adjust it for non-cash charges (depreciation) and changes in operating assets and liabilities. Here is the breakdown:

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Final answer:

At December 31, 2017, Blue Landscaping's Land Account is $154,080, the Building Account is $39,360, and the Interest Expense is $5,030. By December 31, 2018, the Land Account remains at $154,080, the Building Account increases to $699,360, and the Interest Expense for the year is $60,360.

Explanation:

To compute the balance in each account for Blue Landscaping at December 31, 2017, and December 31, 2018, the costs incurred and payments made towards the construction must be taken into account, as well as the interest expense incurred from the loan.

December 31, 2017 Balances

December 31, 2018 Balances

Answer:

$476190.47

Explanation:

Given,

Annual Saving = $50,000.

Growth = -2.5%

Interest rate = 8%

Present value of savings = Annual Saving / (Interest rate- Growth)

= $50,000 / (0.08-(-0.025)

= $50,000 / (0.08+0.025)

= $50,000 / 0.105

= $476190.47.

Therefore, the present vaue of the savings is $14,285.71.

Answer:

cost of goods manufactured= $217,000

Explanation:

Giving the following information:

Inventories:

Beginning Ending

Raw materials $ 31,000 $ 32,000

Work in process $ 18,000 $ 21,000

Additional information:

Raw materials purchases $68,000

Direct labor cost $ 93,000

Manufacturing overhead cost applied to Work in Process $ 60,000

To calculate the cost of goods manufactured, we need to use the following formula:

cost of goods manufactured= beginning WIP + direct materials + direct labor + allocated manufacturing overhead - Ending WIP

First, we need to calculate the direct material used in production.

Direct material used= beginning inventory + purchases - ending inventory

Direct material used= 31,000 + 68,000 - 32,000= 67,000

Now, we can calculate the cost of goods manufactured:

cost of goods manufactured= 18,000 + 67,000 + 93,000 + 60,000 - 21,000

cost of goods manufactured= $217,000