Answer:
d. Treasury Stock for $240,000
Explanation:
The journal entry for re-acquisition of the stock under the cost method is shown below:
Treasury stock A/c Dr $240,000
To Cash A/c $240,000
(Being the stock are reacquired for cash)
The $240,000 amount should be come from
= Number of shares × common stock per share
= 16,000 shares × $15
= $240,000
Since the stock is reacquired so we used the treasury stock account instead of the common stock account
Tatoo Inc. reported a net capital loss of $13,500 in 2018. The company had a net capital gain of $4,800 in 2016 and $3,500 in 2015. In 2017, although the company suffered a net operating loss, it had net capital gains of $1,500. What is the amount of Tatoo's capital loss carryover remaining after it applies the carryback?
Answer:
The amount of Tatoo's capital loss carryover remaining after it applies the carryback is $ 5200.
Explanation:
The net capital loss will be set off as :
2016 : $ 4800
2017 : $ 3500
Net carryback = $ 13500 - $ 4800 - $ 3500
= $ 5200
Therefore, the amount of Tatoo's capital loss carryover remaining after it applies the carryback is $ 5200.
In the AD partnership, Allen's capital is $140,000 and Daniel's is $40,000 and they share income in a 3:1 ratio, respectively. They decide to admit David to the partnership. Each of the following questions is independent of the others.
Refer to the information provided above. David directly purchases a one-fifth interest by paying Allen $34,000 and Daniel $10,000. The land account is increased before David is admitted. By what amount is the land account increased?
A. $40,000
B. $10,000
C. $36,000
D. $20,000
Answer: Option (A) is correct.
Explanation:
Given that,
Allen's capital is $140,000
Daniel's is $40,000
Income sharing Ratio = 3:1
David paid for a 1/5th stake in the partnership
Allen = $34,000 and Daniel = $10,000
Total amount paid by David = $44,000
Land account is increased before David is admitted
Therefore,
The value of entire entity = 5 × $44,000
= $220,000
Upward valuation on account of land revaluation = $220,000 - $180,000
= $40,000
Initial sale price of common stock Hudson-Perry Recordings Inc has one issue of preferred stock and one issue of common stock outstanding. Given their stockholders' equity account that follows, determine the original price per share at which the firm sold its single issue of common stock. Stockholders' Equity ($000) Preferred stock $ 228 Common stock ($ 0.24 par, 1 comma 402 comma 000 shares outstanding) 336 Paid-in capital in excess of par on common stock 19 comma 466 Retained earnings 1 comma 803 Total stockholders' equity Modifying $ 21 comma 833 with double underline The original price per share is $ nothing. (Round to the nearest cent.)
Answer:
the original price from the issue of shares: 14.12 dollars
Explanation:
It will be the sum of the common stock and the paid-in capital in excess of par:
The values are expresses as thousand, so we multiply by 1,000
common stock 0.24 x 1,402,000 = 336,480
additional paid-in 19,466 x 1,000 = 19,466,000
Total 19,802,480
Price per share: 19,802,480 / 1,402,000 = 14,12410 = $14.12 This will be the original price of the price.
In the Solow growth model with population growth, but no technological progress, the steady-state amount of investment can be thought of as a break-even amount of investment because: the quantity of investment just equals the amount of:
A) output needed to achieve the maximum level of consumption per worker.
B) capital needed to replace depreciated capital and to equip new workers.
C) saving needed to achieve the maximum level of output per worker.
D) output needed to make the capital per worker ratio equal to the marginal product of capital.
Answer: the steady-state amount of investment can be thought of as a break-even amount of investment because: the quantity of investment just equals the amount of: "B) capital needed to replace depreciated capital and to equip new workers."
Explanation: According to the Solow growth model an economy is in a steady state when it makes the most efficient use of its resources. That is, the state in which the saving or investment is equal to the depreciation of capital.
Healthy Foods Inc. sells 60-pound bags of grapes to the military for $15 a bag. The fixed costs of this operation are $90,000, while the variable costs of grapes are $0.15 per pound. a. What is the break-even point in bags? (Round your answer to 2 decimal places.) b. Calculate the profit or loss (EBIT) on 14,000 bags and on 35,000 bags. c. What is the degree of operating leverage at 21,000 bags and at 35,000 bags? (Round your answers to 2 decimal places.) d. If Healthy Foods has an annual interest expense of $17,000, calculate the degree of financial leverage at both 21,000 and 35,000 bags. (Round your answers to 2 decimal places.) e. What is the degree of combined leverage at both 21,000 and 35,000 bags? (Round your answers to 2 decimal places.)
Answer:
BEP units: 15,000 60-pounds bags
(B)
14,000 generates 6,000 loss
35,000 generates 120,000 net
(C) operating leverage: 2
(D) financial leverage: 1.63
(E) combined leverage: 3,26
Explanation:
[tex]\frac{Contribution \: Margin}{Sales \: Revenue} = Contribution \: Margin \: Ratio[/tex]
[tex]Sales \: Revenue - Variable \: Cost = Contribution \: Margin[/tex]
60 pounds sales price = $ 15
60 pound cost: 60 x 0.15 = $ 9
Contribution Margin 6
[tex]\frac{Fixed\:Cost}{Contribution \:Margin} = Break\: Even\: Point_{units}[/tex]
Fixed Cost 90,000
BEP units: 15,000
(B) profit at given level:
sales x margin - fixed cost = net profit
14,000 x 6 - 90,000 = (6,000)
35,000 x 6 - 90,000 = 120,000
(C) operating leverage: change in EBIT / change in sales
income at 21,000 x 6 - 90,000 = 36,000
EBIT change:
120,000/36,000 = 3 + 1/3
Slaes change:
35,000/21,000 = 1 + 2/3
operating leverage:
(3 + 1/3) / (1 + 2/3) = 2
(d) financial leverage
change in net income:
(120,000 - 17,000) / (36,000 - 17,000)
103,000 / 19,000 = 103/19
change in EBIT 3 + 1/3 (already calculate
(103/19) / (3+1/3) = 1.626315789
(E) combined
2 x 1.626315789 = 3,252631578
Final answer:
The break-even point for Healthy Foods Inc. is 15,000 bags. EBIT is a loss of $4,000 at 14,000 bags and a profit of $120,000 at 35,000 bags. Degree of operating leverage and degree of financial leverage, as well as the degree of combined leverage, can be calculated at different quantities of bags sold, incorporating the fixed costs and interest expenses accordingly.
Explanation:
To calculate the break-even point in bags for Healthy Foods Inc., we first need to determine the contribution margin per bag. Since the variable cost is $0.15 per pound and each bag is 60 pounds, the variable cost per bag is 60 * $0.15 = $9. Therefore, the contribution margin per bag is the selling price per bag minus the variable cost per bag, which is $15 - $9 = $6 per bag. The break-even point in bags can then be calculated by dividing the total fixed costs by the contribution margin per bag, i.e., $90,000 / $6 = 15,000 bags.
For EBIT calculations, we can determine the profit or loss by multiplying the number of bags sold by the contribution margin per bag, and then subtracting the fixed costs. At 14,000 bags, EBIT is (14,000 * $6) - $90,000 = -$4,000, indicating a loss. At 35,000 bags, EBIT is (35,000 * $6) - $90,000 = $120,000, which is a profit.
The degree of operating leverage (DOL) can be calculated as Q * (P - V) / (Q * (P - V) - F), where Q is the quantity sold, P is the price per unit, V is the variable cost per unit, and F is the fixed costs. At 21,000 bags, DOL is 21,000 * ($15 - $9) / (21,000 * ($15 - $9) - $90,000). At 35,000 bags, the calculation would be similar with the respective quantities.
For the degree of financial leverage (DFL), we include the interest expense in the calculations. DFL is calculated as EBIT / (EBIT - interest expenses), so for 21,000 and 35,000 bags sold, we would calculate it using the previously found EBIT values and subtract the annual interest expense of $17,000.
Finally, the degree of combined leverage (DCL) is the product of DOL and DFL, which shows the combined effect of operating and financial leverage on earnings per share, calculated for both 21,000 and 35,000 bags, rounding to two decimal places.
Based on the semi-strong form of the efficient market theory, an investor reacting immediately to a news flash on the television generallyA) can make an abnormal profit.B) is guaranteed to make a reasonable profit.C) is too late to make an exceptional profit.D) will suffer a loss.
Answer:
Option C)
Explanation:
The theory of semi-strong form or structure of efficient market is a sort of holds that security costs alter rapidly to recently accessible data, in this way wiping out the utilization of key or specialized examination to accomplishing a better yield.
Since, under the semi-solid type of the efficient market, all open data is limited in current costs.
Thus its too late for an investor responding immediately to a news flashing on the television to make exceptional gain.
Assume that a small country produces only green peppers and red peppers. Last year, it produced 100 green peppers and 50 red peppers and sold them at prices of $2 per green pepper and $3 per red pepper. This year, it produced 150 green peppers and 60 red peppers and sold them at prices of $2 per green pepper and $4 per red pepper. What is real GDP this year if the base year is last year
Answer:
The correct answer is $480.
Explanation:
Real GDP is the value of economic output calculated in an economy in a year. It is an inflation-adjusted measure. IT calculates growth in GDP on the basis of base year price. So, the change in price is not included and only change in output is included.
The price of green pepper in the base year was $2. The price of red pepper was $3.
Real GDP
= 150 × $2 + 60 × $3
= $300 + $180
= $480
The real GDP in the current year is $480.
The real GDP for the current year, calculated using last year's prices as a base year, is $480, which comprises $300 from 150 green peppers and $180 from 60 red peppers.
To calculate the real GDP for the current year using the prices of the base year, we multiply the quantities of goods produced in the current year by their respective prices in the base year.
Last year (base year) prices: $2 for each green pepper, $3 for each red pepper.Current year production: 150 green peppers, 60 red peppers.Using the base year prices to value this year's production:
Green peppers: 150 (quantity) × $2 (price) = $300Red peppers: 60 (quantity) × $3 (price) = $180The sum of these values gives us the real GDP for the current year:
Real GDP = $300 (green peppers) + $180 (red peppers) = $480
The present value of an annuity is the sum of the discounted value of all future cash flows.
You have the opportunity to invest in several annuities. Which of the following 10-year annuities has the greatest present value (PV)? Assume that all annuities earn the same positive interest rate.
(A) An annuity that pays $1, 000 at the beginning of each year
(B) An annuity that pays $1, 000 at the end of each year
(C) An annuity that pays $500 at the end of every six months
(D) An annuity that pays $500 at the beginning of every six months
Answer:
Ans. The best choice is:
A) An annuity that pays $1, 000 at the beginning of each year (PV=$6,759.02 with a discount rate of 10% annual)
Explanation:
Hi, well, I think that the best way of explaing is by discussing each option. In order to be alot more clear in the emplanation, let´s consider a 10% annual discount rate for all cases:
(A) $1, 000 at the beginning of each year, for 10 years
This is pretty straight forward, but please consider this, one of the payments is made in the present, therefore, when calculating the present value of the annuity, do not use 10 periods, use 9 and add 1000 to this calculation, everything should look like this.
[tex]PV=1000+\frac{1000((1+0.1)^{9}-1) }{0.1(1+0.1)^{9} } =6759.02[/tex]
(B) $1, 000 at the end of each year, for 10 years
We do the same as we did in A), but this time, we count 10 annuities and we don´t add 1000 at the beginning. Everything should look like this.
[tex]PV=\frac{1000((1+0.1)^{10}-1) }{0.1(1+0.1)^{10} } =6144.57[/tex]
(C) $500 at the end of every six months, for 20 semesters
This option requires that we transform the rate (10% Effective annual) into semi-annual terms. That is as follows.
[tex]r(Semi-annual)=(1+r(Annual))^{\frac{1}{2} } -1[/tex]
Therefore
[tex]r(Semi-annual)=(1+0.1))^{\frac{1}{2} } -1=0.0488[/tex]
Now, this is our discount rate, the one we need to use if the payments are made every six months. Let´s see how the math to this should look like.
[tex]PV=\frac{500((1+0.0488)^{20}-1) }{0.0488(1+0.0488)^{20} } =6294.52[/tex]
(D) $500 at the beginning of every six months, for 20 semesters (10 years)
We need to use the discount rate of C) (4.88% semi-annual), but the process is just like in A)
[tex]PV=500+\frac{500((1+0.0488)^{19}-1) }{0.0488(1+0.0488)^{19} } =6601.75[/tex]
Best of Luck.
A company had inventory on November 1 of 5 units at a cost of $25 each. On November 2, they purchased 15 units at $27 each. On November 6 they purchased 11 units at $30 each. On November 8, 12 units were sold for $60 each. Using the LIFO perpetual inventory method, what was the value of the inventory on November 8 after the sale?
Answer:
Total value of sold goods= $357
Total value of inventory (after Nov 8)= $503
Explanation:
Giving the following information we need to calculate the value of inventory:
November: 5 units at a cost of $25 each.
On November 2:15 units at $27 each.
On November 6:11 units at $30 each.
On November 8: 12 units were sold for $60 each.
The compañy uses LIFO (last in first out) inventory
11 units at $30= $330
1 unit at $27= $27
Total value of sold goods= $357
Total value of inventory=5u*25+14*27= $503
Megan was employed by a large company. Her supervisor told her to falsify government reports. She refused and was fired. She sued for wrongful discharge. Her employer claimed that, since Megan was an at-will employee, she had no legal right to claim the company was liable for damages. Is the employer right?
Answer:
The employer is not right
Explanation:
An at-will employment under US law allows an employer to terminate any an at will -without having to state any reason for the same. The employee will have to leave his position in the company at once.
There is, however, an exception to this law. At-will employees can be fired under any circumstances but not for illegal reasons. If employer is terminating an employee based on illegal reasons such as discrimination based on color or race, or for reporting illegal activity carried out by the company, the employee can sue the employer.
In this case, Megan was terminated as she refused to falsify government reports. It is an illegal activity and she cannot be terminated stating that she was an at-will employee.
So, Megan can sue the employer for wrongful discharge and employer was not right on his part.
An employer cannot claim that an at-will employee has no legal right to sue for wrongful discharge if the employee was fired for refusing to engage in illegal activities. The employer's actions would violate the employee's rights under Title VII of the Civil Rights Act of 1964, which prohibits discrimination based on race, color, religion, sex, or national origin.
Explanation:An employer cannot claim that an at-will employee has no legal right to sue for wrongful discharge if the employee was fired for refusing to engage in illegal activities, such as falsifying government reports. The employer's actions would violate the employee's rights under Title VII of the Civil Rights Act of 1964, which prohibits discrimination based on race, color, religion, sex, or national origin. Firing an employee for refusing to participate in illegal activities is considered a violation of public policy, even for at-will employees.
In the case of Megan, if she was fired for refusing to falsify government reports, she may have grounds to sue for wrongful discharge. The employer's claim that Megan had no legal right to claim liability for damages is not valid in this situation. Megan can argue that her termination was a violation of public policy, and she should be able to seek legal action.
Learn more about Wrongful discharge here:https://brainly.com/question/32464438
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You buy a ten-year bond with an 8% coupon rate at a yield-to-maturity of 6%. (Both rates follow the BEY convention.) You hold the bond for two years, reinvesting coupons in a money market account earning an APR of 4%, compounded monthly. On the day you receive the fourth coupon, you sell the bond. Since market interest rates have increased, you sell it at a yield-to-maturity of 8%. What is your realized compound yield? Report the realized compound yield as an APR with semi-annual compounding.
Answer:
Ans. the realized yield is 0.7749% APR semi-annual compounding
Explanation:
Hello, first we need to find the exact amount paid for this bond, you can find this by finding the coupon that it pays every 6 months and transforming the effective annual rate of the YTM into semi-annual effective rate. All this as follows.
[tex]Coupon=FaceValue*\frac{AnnualCouponRate}{2}=1000*\frac{0.08}{2}=40[/tex]
[tex]YTM(SemiAnnual)=(1+YTM(annual))^{\frac{1}{2} } -1=(1+0.06)^{\frac{1}{2} } -1=0.0296[/tex]
Ok, so far, our semi annual coupon is $40 and our semi-annual YTM is 2.96%. Now. we are ready to find the price paid for the bond.
[tex]Price=\frac{Coupon((1+YTM)^{n-1}-1) }{YTM(1+YTM)^{n-1} } +\frac{(FaceValue+Coupon)}{(1+YTM)^{n} }[/tex]}
[tex]Price=\frac{40((1+0.0296)^{19}-1) }{40(1+0.0296)^{19} } +\frac{(1000+40)}{(1+0.0296)^{20} } =1155.91[/tex]
4 bonds were received and placed in a money market account earning a 4% compounded monthly rate, in order to make things more simple, let´s convert this into a semi-annual effective rate, since the bonds are paid every 6 months. Like this.
[tex]r(semi-annual)=(1+\frac{0.04}{12} )^{6} -1=0.020167[/tex]
Since you received 4 coupons, we have to find the future value of this 4 coupons, that is:
[tex]FV(Coupons)=40(1+0.020167)^{3}+ 40(1+0.020167)^{2}+40(1+0.020167)^{1}+40[/tex]}
[tex]FV(Coupons)=164.91[/tex]
The selling price of the bond, given the new YTM=8% is:
[tex]Price=\frac{40((1+0.03923)^{15}-1) }{40(1+0.03923)^{15} } +\frac{(1000+40)}{(1+0.03923)^{16} } =1009.02[/tex]
Adding both values (sell price of the bond and future values of the coupons) we get the money inflow, what we will call from here FV. The persent value is the money you first paid for the bond.
And then we find the rate of return of all this transactions by using this formula.
[tex]\sqrt[2]{\frac{FV}{PV} }-1=r[/tex][tex]\sqrt[2]{\frac{(1009.02+164.91}{1155.91} }-1=r =0.0077638[/tex]
The return of this invesment is 0.77638% effective annually, but we need it to have a semi-annual compounding, so first, we need to turn this effective annual rate into an effective semi annual rate and them, multiply by 2. this is the math of all this.
[tex]EffectiveSemi-annnual=(1+0.0077638)^{\frac{1}{2} } -1=0.0038744[/tex]
[tex]APR(SemiAnnualComp)=0.0038744*2=0.007749[/tex]
APR(SemiAnnualComp)= 0.7749%
Best of luck.
Fritz Evans is the owner and operator of Be-The-One, a motivational consulting business.
At the end of its accounting period, December 31, 2013, Be-The-One has assets of $395,000
and liabilities of $97,000. Using the accounting equation, determine the following amounts:
a. Owner's equity as of December 31, 2013.
b. Owner's equity as of December 31, 2014, assuming that assets decreased by $65,000
and liabilities increased by $36,000 during 2014.
PE
Answer:
2013 Equity: 298,000
2014 Equity: 327,000
Explanation:
(A)
Assets = Liabilities + Equity
395,000 = 97,000 + Equity
395,000 - 97,000 = Equity
298,000 = Equity
(B)
if asset increase by 65,000
and liabilities increase by 36,000
(395,000 + 65,000) = (97,000 + 36,000) + Equity
460,000 = 133,000 + Equity
Equity = 460,000 - 133,000 = 327,000
If we know that a firm has a net profit margin of 4.6 %, total asset turnover of 0.62, and a financial leverage multiplier of 1.54, what is its ROE? What is the advantage to using the DuPont system to calculate ROE over the direct calculation of earnings available for common stockholders divided by common stock equity?
Answer:
4.39%
Explanation:
Using DuPont equation in computing for ROE enables further analysis of the company's strengths and weaknesses. By using this equation, ROE is segregated into different drivers of ROE that focus on key metrics of financial performance. These metrics focus on operational efficiency (Net Profit margin), asset use efficiency (Total Asset Turnover) and financial leverage (Equity or Financial Multiplier). Further, this provides information that will be used by the company in its planning activities.
Find the amount to which $550 will grow under each of the following conditions. Do not round intermediate calculations. Round your answers to the nearest cent.
(A) 9% compounded annually for 5 years.
(B) 9% compounded semiannually for 5 years.
(C) 9% compounded quarterly for 5 years.
(D) 9% compounded monthly for 5 years.
Answer:
(A)Fv= $864.2
(B) Fv= $1302.05
(C) Fv= $2003.4
(D) Fv= $96817.21
Explanation:
Giving the following information:
Initial investment= $550
We will use the final value formula:
FV=Present value*(1+i)^n
(A) 9% compounded annually for 5 years.
Fv= 550*(1.09)^5=$864.2
(B) 9% compounded semiannually for 5 years.
Fv= 550*(1.09)^10= $1302.05
(C) 9% compounded quarterly for 5 years.
Fv= 550*(1.09)^15= $2003.4
(D) 9% compounded monthly for 5 years.
Fv= 550*(1.09)^60=$96817.21
The following is an account for a production department, showing its costs for one month: Work in Process Inventory Beginning Balance 5,600 Completed and transferred out 50,010 Direct materials 21,800 Direct labor 16,400 Overhead 11,000 Ending Balance 4,790 Assume that materials are added at the beginning of the production process and that direct labor and overhead are applied uniformly. If the started and completed units cost $42,050, what was the cost of completing the units in the beginning Work in Process inventory?
Answer: $7,960
Explanation:
Given that,
Beginning WIP Inventory balance = 5,600
Completed and transferred out = 50,010
Direct materials = 21,800
Direct labor = 16,400
Overhead = 11,000
Ending Balance = 4,790
Started and completed units cost = $42,050
Therefore,
Cost of completing the units in the beginning WIP inventory:
= Completed and transferred out - Cost of Started and completed units
= $50,010 - $42,050
= $7,960
Answer:
The cost of completing the units in the beginning Work in Process inventory is $7,960
Explanation:
The computation of the beginning Work in Process inventory is shown below:
= Cost of Completed and transferred out - started and completed units cost
= $50,010 - $42,050
= $7,960
All other information which is mentioned in the question is not relevant. Hence, it is not to be considered in the computation part.
Since we have to compute the completing units so we considered the above two things only.
People, in general, do not lend money to one another to buy a house or a car because: A. they do not know about the capacity of other people to repay their debts. B. of information problems. C. they do not know about the effort other people will provide to repay their debts. D. All of the above.
Answer: People, in general, do not lend money to one another to buy a house or a car because: D. All of the above.
Explanation: It all comes down to information problems, assuming that all participants fully know the financial capacity of others would lend money because there would be no uncertainty and risk.
That is why certain requirements are requested when requesting loans at a bank.
Kim's Retail had 800 units of inventory on hand at the end of the year. These were recorded at a cost of $ 13 each using the lastminusin, firstminusout (LIFO) method. The current replacement cost is $ 9 per unit. The selling price charged by Kim's Retail for each finished product is $ 15. In order to record the adjusting entry needed under the lowerminusofminuscostminusorminusmarket rule, the Merchandise Inventory will be ________.
Answer:
the Merchandise Inventory will be credited by $3200
Explanation:
given data
Retail inventory = 800 units
recorded cost = $13
replacement cost = $ 9 per unit
selling price charged = $15
to find out
the Merchandise Inventory will be
solution
we know here market is equal to current replacement cost that is $9
and here we can say
market is here less than cost
so inventory will be valued at Market
so we find
down in inventory is = 800 × ( 13 - 9 )
down in inventory is = 3200
so the Merchandise Inventory will be credited by $3200
This information relates to Sunland Company for the year 2017. Retained earnings, January 1, 2017 $83,080 Advertising expense 2,232 Dividends 7,440 Rent expense 12,896 Service revenue 71,920 Utilities expense 2,976 Salaries and wages expense 37,200 After analyzing the data, prepare an income statement for the year ending December 31, 2017.
Answer:
Net Income : $16.616
Retained Earnings: $92.256
Please see details below:
Explanation:
Income Statement 2017
Sales $71.920
Advertising Expenses -$2.232
Miscellaneous Expenses -$50.096
Utilities Expenses -$2.976
Net Income $16.616
Retained Earnings Report
Opening retained earnings $ 83.080
Add: Net Income $ 16.616
Subtotal $ 99.696
Less: Dividens -$ 7.440
Total $ 92.256
Sheldon has the following year-end account balances: Accounts Receivable, $5,000; Supplies, $12,000; Equipment, $18,000; Accounts Payable, $17,000; Stockholders’ Equity, $43,000. The Cash account balance was not available at year-end. Given the account balances listed, the balance in the Cash account should be A : $95,000. B : $43,000. C : $25,000. D : $61,000.
Final answer:
The missing Cash account balance is calculated using the accounting equation Assets = Liabilities + Shareholders' Equity. Given the account balances, Cash is found to be $25,000.
Explanation:
The student has provided account balances for various items and is seeking to find the correct balance of the Cash account of a fictitious entity. To find the missing Cash account balance, you need to apply the basic accounting equation which states that Assets = Liabilities + Shareholders' Equity.
Here's the step-by-step calculation using the given account balances:
Sum of given Assets (excluding Cash) = Accounts Receivable ($5,000) + Supplies ($12,000) + Equipment ($18,000) = $35,000.
Total Liabilities = Accounts Payable ($17,000).
Shareholders' Equity = $43,000.
Subtracting the sum of Liabilities and Shareholders' Equity from the sum of Assets, we get the balance of the Cash account:
Cash = Total Assets - (Total Liabilities + Shareholders' Equity).
Inserting the given figures:
Cash = (Accounts Receivable + Supplies + Equipment + Cash) - (Accounts Payable + Shareholders' Equity)
Cash = ($35,000 + Cash) - ($17,000 + $43,000)
Cash = $35,000 + Cash - $60,000
Cash = Cash - $25,000
To isolate the value of Cash, we move all terms containing 'Cash' to one side:
Cash - Cash = -$25,000
Therefore, the balance in the Cash account should be $25,000.
Costs Classification a. Annual picnic for plant employees and their families Period costs-administrative expense b. Cost of fabric used by clothing manufacturer Product costs-direct materials cost c. Cost of plastic for a toy manufacturer Product costs-direct materials cost d. Cost of sewing machine needles used by a shirt manufacturer Product costs-factory overhead cost e. Cost of television commercials
Answer:
Instructions are listed below
Explanation:
- Direct materials are those materials and supplies that are consumed during the manufacture of a product, and which are directly identified with that product.
- Direct labor is production or services labor that is assigned to a specific product, cost center, or work order.
- Manufacturing overhead refers to indirect factory-related costs that are incurred when a product is manufactured.
- Period costs are not directly tied to the production process. Overhead or sales, general, and administrative (SG&A) costs are considered period costs. SG&A includes costs of the corporate office, selling, marketing, and the overall administration of company business.
- Product costs are the direct costs involved in producing a product. A manufacturer, for example, would have production costs that include: Direct labor, Raw materials, Manufacturing supplies, Overhead that's directly tied to the production facility such as electricity.
In this exercise:
a. Annual picnic for plant employees and their families: Period costs-administrative expense.
b. Cost of fabric used by clothing manufacturer: Product costs- DM
c. Cost of plastic for a toy manufacturer: Product costs-DM
d. Cost of sewing machine needles used by a shirt manufacturer: Product costs- MOH
e. Cost of television commercials: Period cost - Selling
Sandra is running an online bookstore. Her market research shows her that many people visit the site, look at several books, add one or more books to the shopping cart but never actually purchase anything. Based on what she learned about the consumer buying process, Sandra decided to offer free delivery. She felt that this would make it easier for the customer in the ___________ stage of the consumer buying process.
Answer: Purchase stage
Explanation: This is the second last stage in the buying process. Until this stage the customer must have decided to make the purchase. However it is not guaranteed that the customer will do it as any small issue could lead to change in mind.
In the given case, Sandra is giving additional services as the customers on her sight decides to purchase the book but cancels the order after.
Thus, from the above we can conclude that the given case relates to the purchase stage.
Funtime Park competes with Splash World by providing a variety of rides. Funtime sells tickets at $ 90 per person as a one-day entrance fee. Variable costs are $ 18 per person, and fixed costs are $ 464 comma 400 per month. Under these conditions, the breakeven point in tickets is 6 comma 450 and the breakeven point in sales dollars is $580 comma 500. Read the requirements LOADING.... Requirement 1. Suppose Funtime Park cuts its ticket price from $ 90 to $ 72 to increase the number of tickets sold. Compute the new breakeven point in tickets and in sales dollars. Begin by selecting the formula labels and then entering the amounts to compute the number of tickets Funtime must sell to break even under this scenario. (Abbreviation used: CM
Answer:
The new breakeven point in tickets is 8,600 and in sales dollars $619,200
Explanation:
BP=FC/CM
BP= breakeven point
FC=fixed cost
CM=contribution margin
8,600=464,400/(72-18)
8,600*72= $619,200
Answer:
BEPd 619,200
BEPu 8,600
Explanation:
1) sales price at 72:
[tex]Sales \: Revenue - Variable \: Cost = Contribution \: Margin[/tex]
contribution per unit
72 - 18 = 54
[tex]\frac{Contribution \: Margin}{Sales \: Revenue} = Contribution \: Margin \: Ratio[/tex]
54 / 72 = 75%
[tex]\frac{Fixed\:Cost}{Contribution \:Margin \:Ratio} = Break\: Even\: Point_{dollars}[/tex]
464,400 / 0.75 = 619,200
in units: sales to break even 619,200 / 72 unit sales price = 8.600
Pix Company has the following production data for March: no beginning work in process, units started and completed 31,000, and ending work in process 4,100 units that are 100% complete for materials and 40% complete for conversion costs. Pix uses the FIFO method to compute equivalent units. If unit materials cost is $4 and unit conversion cost is $13. The total costs to be assigned are $564,720, prepare the cost section of the production cost report for Pix Company using the FIFO approach.
Answer:
unit beggining WIP 0
Units started and completed 31,000
Ending inventory 4,100
Total physical units 35,100
Equivalent units (materials)
Units started and completed 31,000
WIP materials (4,100 x 100%) 4,100
Total units accounted for 35,100
Equivalent units (conversion)
Units started and completed 31,000
WIP materials (4,100 x 40%) 1,640
Total units accounted for 32.640
Cost Incurred during March:
35, 100 x 4 = 140,400
32,640 x 13 = 1,044,480
Total cost 1, 184,880
Cost assigned to units transferred out
31,000 x (4 + 13) = 527,000
Cost of WIP
4,100 x 4 = 16.400
1,640 x 13 = 21,320
Total 37,720
Explanation:
We need to do the count of physical units
we need to calcualte the equivalent units:
transferred + ending x completion percentage
then the cost incurred
and allocate cost to finished goods and the ending WIP based on the equivalent units of materials and conversion
Final answer:
To prepare the production cost report for Pix Company, we calculate equivalent units for materials and conversion costs, then assign total costs using these calculations, which matches the provided total costs of $564,720.
Explanation:
The question involves preparing the cost section of a production cost report for Pix Company using the FIFO method for the month of March. The data includes units started and completed, the ending work in process units and their completion percentages, and the costs for materials and conversion. Using the provided unit costs for materials ($4) and conversion ($13), we calculate the equivalent units for both materials and conversion under the FIFO method. Since all ending work in process units are 100% complete for materials, equivalent units for materials are the same as the physical units. For conversion, the equivalent units are based on the completion percentage. The total costs are then assigned based on these calculations.
To calculate the cost for materials: 31,000 units completed + 4,100 units in ending WIP at 100% = 35,100 equivalent units. Materials cost: 35,100 units x $4/unit = $140,400.
For conversion costs: 31,000 units (from units completed) + (4,100 units in ending WIP x 40% completion for conversion) = 32,640 equivalent units. Conversion cost: 32,640 units x $13/unit = $424,320.
Total costs to be assigned = Materials cost + Conversion cost = $140,400 + $424,320 = $564,720, matching the total costs provided in the question.
Which describes the role of automatic stabilizers in the economy? Automatic stabilizers have a similar impact as discretionary fiscal policy but occur automatically, without action by the government. Automatic stabilizers increase aggregate demand during recessions and reduce aggregate demand during expansions. Automatic stabilizer
Answer: Automatic stabilizers have a similar impact as discretionary fiscal policy but occur automatically, without action by the government.
Explanation: Automatic stabilizers refers to those factors which comes into act automatically when the economy faces any kinds of problems. Usually these includes the tax and transfer systems in the economy that affects the demand and supply of the commodities.
These factors comes into force without the direct intervention of the government.
Hence from the above we can conclude that the correct option is first statement.
Automatic stabilizers are mechanisms in the economy that automatically adjust government spending and taxes based on economic conditions. During recessions, they boost aggregate demand, and during expansions, they reduce aggregate demand. They act as shock absorbers, reducing the impact of economic bumps.
Explanation:Role of Automatic Stabilizers in the EconomyAutomatic stabilizers are a part of fiscal policy in the economy. They are built-in mechanisms that automatically adjust government spending and taxes based on the state of the economy, without requiring any specific action from the government. These stabilizers work to stabilize the economy during economic fluctuations. For example, during a recession, automatic stabilizers increase government spending and reduce taxes, thereby boosting aggregate demand. Conversely, during an economic expansion, they decrease government spending and increase taxes, which helps to reduce aggregate demand. Automatic stabilizers act like shock absorbers in a car, reducing the impact of economic bumps, although they don't eliminate them completely.
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A firm has estimated the following demand function for its product:
Q = 100 - 5 P + 5 I + 15 A
Where Q is quantity demanded per month in thousands, P is product price, I is an index of consumer income, and A is advertising expenditures per month in thousands. Assume that P = $200, I = 150, and A = 30. For simplicity in calculating the results, use the point elasticity formulas to complete the calculations indicated below.
(i) Calculate quantity demanded.
(ii) Calculate the price elasticity for demand. Is demand elastic, inelastic, or unit elastic?
(iii) Calculate the income elasticity of demand. Is the good normal or inferior?
(iv) Calculate the advertising elasticity of demand.
Answer:
(i) Q=300
(ii) Elasticity of Demand=-3.33 (elastic)
(iii) Income Elasticity= 2.5 (normal good)
(iv) Advertising Elasticity: 1.5
Explanation:
The Demand function is given by
[tex]Q=100-5P+5I+15A[/tex]
(1) To solve (i) we need to replace P = 200, I = 150, and A = 30 in the demand equation:
[tex]Q=100-5(200)+5(150)+15(30)=300[/tex]
(2) To find the price elasticity (how much quantity demanded changes with price) we use the point price elasticity formula
[tex]\eta_{Price}=\frac{\Delta Q}{\Delta P}\frac{P}{Q}[/tex]
From the above equation we get: [tex]\frac{\Delta Q}{\Delta P}=-5[/tex]
Replacing in the elasticity formula
[tex]\eta_{Price}=-5\frac{200}{300}=|-3.33|>1[/tex]
in absolute terms the elasticity is bigger than one so it is an elastic demand.
(3) For income elasticity (how much quantity demanded changes with income), we proceed similarly as above. But the derivative is respect to income
[tex]\eta_{Income}=\frac{\Delta Q}{\Delta I}\frac{I}{Q}=5\frac{150}{300}=2.5>1[/tex][/tex]
Which is bigger than one, denoting this is a normal good because it's bigger than one.
(4) Advertising elasticity (how much quantity demanded changes with expenditures in advertising), we proceed as before
[tex]\eta_{advertising}=\frac{\Delta Q}{\Delta A}\frac{A}{Q}=15\frac{30}{300}=1.5[/tex]
Choose from any list or enter any number in the input fields and then click Check Answer. 6 parts remaining More Info a. The business has interest expense of $ 3 comma 600 that it must pay early in January 2021. b. Interest revenue of $4 comma 800 has been earned but not yet received. c. On July 1, 2020, when the business collected $12 comma 600 rent in advance, it debited Cash and credited Unearned Rent Revenue. The tenant was paying for two years' rent. d. Salary expense is $6 comma 400 per daylong dashMonday through Fridaylong dashand the business pays employees each Friday. This year, December 31 falls on a Thursday. e. The unadjusted balance of the Supplies account is $3 comma 500. The total cost of supplies on hand is $ 1 comma 600. f. Equipment was purchased on January 1 of this year at a cost of $160 comma 000. The equipment's useful life is five years. There is no residual value. Record depreciation for this year and then determine the equipment's book value.
Final answer:
The question discusses various accounting entries, including depreciation of equipment, which is calculated using the straight-line method for a $160,000 equipment with a 5-year life and no residual value, giving a yearly depreciation of $32,000 and a book value of $128,000 at year-end.
Explanation:
The question involves various aspects of business accounting, including interest expense and revenue, advance payments, salary expenses, supply costs, and depreciation of equipment. Each part requires a specific accounting treatment to reflect the true financial position of the business at year-end. We will specifically discuss the depreciation of equipment as part of our example.
Depreciation of Equipment
For the equipment purchased at the beginning of the year with a cost of $160,000 and a useful life of five years with no residual value, the annual depreciation expense would be calculated using the straight-line method. This method evenly spreads the cost of the asset over its useful life. Thus, the annual depreciation expense is $32,000 ($160,000 / 5 years). The book value of the equipment at the end of the year would be $128,000 ($160,000 - $32,000).
Key Takeaways
It is crucial to record depreciation to reflect the usage and the reduced value of assets over time.
Accurate record-keeping ensures that financial statements present a true view of the company's financial health.
Understanding such basic principles is foundational for anyone studying business or accounting.
The average capital investments for 2006 were:
Jones......................................................................... $100,000
King........................................................................................ 200,000
Lane................................................................................. 300,000
How much of the $90,000 partnership profit for 2006 should be allocated to Jones?
A)$15,000
B)$27,000
C)$30,000
D)$33,000
Answer:
A)$15,000
Explanation:
jones 100,000
king 200,000
lane 300,000
Total 600,000
Assuming profit are distributed based on capital investment, jones will receive:
100,000/600,000 = 1/6 of the profit
proft x jones ratio = allocate income to Jones
90,000 x 1/6 = 15,000
This will be the amount of profit attributable to Jones.
The Walden Manufacturing Corp. has office support salaries of $5,200, factory supplies of $2,300, indirect labor of $7,300, direct materials of $17,300, advertising expense of $3,800, office expense of $14,600, and direct labor of $21,600. What is the total period cost?
Answer:
Total period cost= $23600
Explanation:
Period costs are not directly tied to the production process. Overhead or sales, general, and administrative (SG&A) costs are considered period costs. SG&A includes costs of the corporate office, selling, marketing, and the overall administration of company business. Period costs are not attached to one particular product or the cost of inventory like product costs.
In this exercise:
Period costs:
Office support salaries of $5,200
Advertising expense of $3,800
Office expense of $14,600
Total period cost= $23600
Thumb Ink Inc. is a publishing company based in the United States. Its marketing and supply chain activities will add value when:
a. it dispatches new quality regulations to its vendors.
b. it switches to online media because they are widely used.
c. it copies the standards of other publishing companies.
d. it enters into joint ventures.
Answer:
b. it switches to online media because they are widely used.
Swifty's Market used the perpetual method to record the following events involving a recent purchase of inventory:
Received goods for $75400, terms 2/12, n/30.
Returned $1300 of the shipment for credit.
Paid $700 freight on the shipment.
Paid the invoice within the discount period.
As a result of these events, the company's inventory
Answer:
Inventory balance will be of 73,318
Explanation:
Inventory 75,400
Account payable 75,400
to record goods received
Account payable 1,300
Inventory 1,300
to record return of goods
Inventory 700
Cash 700
to record payment of freight
Account Payable 74,100
Inventory 1,482
Cash 72,618
to record payment of invoice within discount period
75,400 - 1,300 = 74,100
74,100 x 2% = 1,482
Inventory balance:
DEBIT CREDIT
75,400
1,300
700
1,482
balance:
73,318