Paid $7,000 of accrued taxes at the time the plant site was acquired. choose an account title 2. Paid $200 insurance to cover a possible accident loss on new factory machinery while the machinery was in transit. choose an account title 3. Paid $850 sales taxes on a new delivery truck. choose an account title 4. Paid $21,000 for parking lots and driveways on the new plant site. choose an account title 5. Paid $250 to have the company name and slogan painted on the new delivery truck. choose an account title 6. Paid $8,000 for installation of new factory machinery. choose an account title 7. Paid $900 for a 2-year accident insurance policy on the new delivery truck. choose an account title 8. Paid $75 motor vehicle license fee on the new truck.

Answer:

Explanation:

First scenario: The answer is No, not many sellers. The drug of the pharmaceutical company has patent right and it is the only firm selling this product. This makes the company a monopolist (single seller)

Second scenario: No, not an identical product. Cable company and phone company produce different products. Cable companies majorly deal with television access.

Third Scenario: no, not many sellers. One firm is dominating the market and customers prefers this. Its product has been differentiated and it can charge its own price.

Fourth scenario: yes,meets all assumptions. The socks are identical and consumers do not care about the seller because the same utility will be derived from the socks.

To find the difference in interest cost, calculate the total amount of interest paid for each mortgage rate and subtract the interest paid at 6.00% from the interest paid at 8.00%. The difference in interest cost is $2,355.

To find the difference in interest cost, we need to calculate the total amount of interest paid for each mortgage rate.

For the original mortgage at 8.00%, the amount of interest paid over 30 years can be found by subtracting the down payment from the total cost of the home and then calculating the interest on the remaining balance.

This can be done using the formula:

Interest = (Total Cost - Down Payment) * (Interest Rate / 100)

For the new mortgage at 6.00%, we can use the same formula to calculate the interest paid over 30 years.

Once we have the total interest paid for each mortgage rate, we can find the difference by subtracting the interest paid at 6.00% from the interest paid at 8.00%.

Let's calculate the difference in interest cost:

Original Mortgage:

Total Cost = $147,000

Down Payment = 25% of $147,000 = $36,750

Interest Rate = 8.00%

Interest = ($147,000 - $36,750) * (8.00 / 100) = $9,420

New Mortgage:

Total Cost = $147,000

Down Payment = 25% of $147,000 = $36,750

Interest Rate = 6.00%

Interest = ($147,000 - $36,750) * (6.00 / 100) = $7,065

Now, let's find the difference in interest cost:

Difference = $9,420 - $7,065 = $2,355

Therefore, the difference in interest cost is $2,355.

Answer:

$0.40 ; $1 and $71.43%

Explanation:

The computation is shown below:

Excess cost is

=  Unit cost - Salvage Value

= $1 - $0.60

= $0.40

The shortage cost is

= Selling value - unit cost

= $2 - $1

= $1

And, the optimal service level is

= Shortage cost ÷ (Shortage cost + excess cost)

= $1 ÷ $1.60

= 71.43%

Basically we applied the above formulas

Answer:

$42.13

Explanation:

HPR = [ Income + Vn - V0 ] / V0

Where  

HPR = Holding Period Return = 10%

I = Income / Dividend = $1.35

Vn = Ending value of Investment = $45

V0 = Beginning Value of Investment = ?

Placing Value in the formula

10% = [ $1.34 + $45 - V0 ] / V0

0.1 V0 = $1.34 + $45 - V0

0.1V0 + V0 = $46.34

1.1V0 = $46.34

V0 = $46.34 / 1.1 = $42.13

The maximum price you would pay for a share today is $42.14 if you wanted to earn a 10% return.

Given that you want a 10% return, we need to calculate the present value of the expected future cash flows. You expect to receive $1.35 in dividends and a sale price of $45 at the end of the year.

Therefore, the maximum price you would be willing to pay for a share today, to achieve a 10% return, is $42.14.

Answer & Explanation :

Bank Reconciliation Statement is prepared to reconcile (match) the differences between bank balance as per cash book & bank balance as per pass book, at end of an accounting period.  

The differences may arise because of following reasons :

BRS involves starting with balance as per any book - cash book or passbook. Then, the adjustments for mismatch are done, to arrive at correct balance as per the other book.

Answer:

1) Journal entry

No. Account and explanation                 debit            credit

a Cash dividend                                  220000  

     Preferred Dividend payable                                   220000

(To record dividend declared)  

b Preferred dividend payable                220000  

       Cash                                                                   220000

(To record dividend paid)  

C Cash dividend (420000-208000)*1.8 381600  

       Common Dividend payable                                    381600

(To record dividend declared)  

d Common Dividend payable                  381600  

         Cash                                                                     381600

(To record dividend paid)  

Answer:

$5,627

Explanation:

Price of the bond is the present value of all cash flows of the bond. These cash flows include the coupon payment and the maturity payment of the bond. Both of these cash flows discounted and added to calculate the value of the bond.

According to given data

Face value of the bond is $4,000

Coupon payment = C = $4,000 x 4.6% = $184 annually = $92 semiannually

Number of periods = n = 20 years x 2 = 40 period

Market Rate = 2.1% annually = 1.05% semiannually

Price of the bond is calculated by following formula:

Price of the Bond = C x [ ( 1 - ( 1 + r )^-n ) / r ] + [ F / ( 1 + r )^n ]

Price of the Bond = 92 x [ ( 1 - ( 1 + 1.05% )^-40 ) / 1.05% ] + [ $4,000 / ( 1 + 1.05% )^40 ]

Price of the Bond = $2,992.30 + $2,634.95

Price of the Bond = $5,627.25

Answer:

Price of the bond =$5626.2518

Explanation:

The price of a bond is the present value (PV) of the future cash inflows expected from the bond discounted using the yield to maturity.

The price of the bond can be calculated as follows:

PV of interest payment + PV of redemption Value

Step 1

PV of interest payment

Interest payment =( 4.6%× $4000)/2

=$ 92

Semi annual yield = 2.1/2 = 1.05 %

PV of interest payment

= 92× (1-(1.0105)^(-20×2))/0.0105)

= 2992.30

Step 2

PV of redemption value

= 4,000 × (1+0.0105)^(-20×2)

= 2633.948

Step 3

Price of bond

= $12992.30+ $2633.94

=$5626.2518

Answer:

Closer to the competitive equilibrium, thereby reducing social efficiency.

Explanation:

The market is not failed itself, so there is no need of taxes to clear it but to arrange revenue for government taxes some of the luxurious products  the tax shifts supply curve to left and decrease equilibrium quantity which makes the dead weight loss in the market and the quantity get away from the efficient level.

In absence of market failures, when the government taxes market participants, the effect is to move the market :

The can now solve this linear programming problem using optimization software or the transportation simplex method to find the optimal allocation of acres to maximize revenue while satisfying the constraints. The initial solution can be found using the northwest corner method.

To formulate a balanced transportation model to maximize the government's revenue for the oil lease auction scenario, we need to set up a transportation problem with supply, demand, and cost coefficients.

Let's define the variables:

- Xij represents the number of acres awarded to bidder i at site j.

- i can be Cliff (C), Blake (B), or Alexis (A).

- j can be Site 1 (S1) or Site 2 (S2).

We have the following information:

1. Site 1 has 100,000 acres of land, and Site 2 has 100,000 acres of land.

2. No bidder can receive more than 40% of the land being auctioned at each site.

3. Cliff, Blake, and Alexis have their respective bids per acre for each site.

Now, let's set up the objective function to maximize revenue:

Maximize Z = 1000(CS1 + CS2) + 2000(CS2 + BS2) + 900(BS1 + AS1) + 2200(AS2) + 1100(AS1) + 1900(AS2)

Subject to the following constraints:

1. Supply constraints (total land available at each site):

  - CS1 + BS1 + AS1 = 100,000 acres at Site 1

  - CS2 + BS2 + AS2 = 100,000 acres at Site 2

2. Demand constraints (bidders can't receive more than 40% of each site):

  - CS1 + CS2 ≤ 0.4 * 100,000 acres at Site 1

  - BS1 + BS2 ≤ 0.4 * 100,000 acres at Site 1

  - AS1 + AS2 ≤ 0.4 * 100,000 acres at Site 1

  - CS1 + CS2 ≤ 0.4 * 100,000 acres at Site 2

  - BS1 + BS2 ≤ 0.4 * 100,000 acres at Site 2

  - AS1 + AS2 ≤ 0.4 * 100,000 acres at Site 2

3. Non-negativity constraints:

  - Xij ≥ 0 for all Xij

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Answer:

11.57% and 9.02%

Explanation:

For computing the before-tax and after- tax cost of debt we use the RATE formula i.e to be shown in the attachment below:

Given that,  

Present value = $1,050 - $20 = $1,030

Future value or Face value = $1,000  

PMT = 1,000 × 12% = $120

NPER = 15 years

The formula is shown below:  

= Rate(NPER;PMT;-PV;FV;type)  

The present value come in negative  

So, after solving this,  

1. The pretax cost of debt is 11.57%

2. And, the after tax cost of debt would be

= Pretax cost of debt × ( 1 - tax rate)

= 11.57% × ( 1 - 0.22)

= 9.02%

Final answer:

To create a Pareto chart, arrange the complaints in descending order, calculate the cumulative total, and construct the chart with a cumulative complaint line. Approximately 38.89% of the total complaints can be attributed to ads being demeaning to women.

Explanation:

Pareto Chart Creation and Analysis

The avant-garde clothing manufacturer has collected statistics on the number of protest calls from viewers offended by their billboard ads. Here's how we can depict this data using a Pareto chart and calculate the percentage of the most prevalent complaint:

Firstly, arrange the complaints in descending order of frequency:

To find the percent of total complaints attributed to the most prevalent complaint (demeaning to women), use the following formula:

Percent = (Number of most prevalent complaints / Total number of complaints) x 100

In this case:

Total number of complaints = W + R + I + M + O = 14 + 10 + 6 + 4 + 2 = 36

Percent = (14 / 36) x 100 ≈ 38.89%

Therefore, approximately 38.89% of the total complaints can be attributed to ads being demeaning to women.

Answer:

$213,250

Explanation:

The calculation of cash inflow is shown below:-

                    Expected cash collections

                       For the month of June

Months       Sales              Percentage     Expected collections

April           $282,500        5%                    $14,125

May            $213,750         30%                  $64,125

June           $225,000        60%                 $135,000

Total collection in the month of June        $213,250

Here we assume Sales for April$282,500, May $213,750 and June $225,000.

Please ignore the last value as it is not relevant to the question

Answer:Cash Flow mark to market proceeds = $754.45

Explanation:

given :

stock market index = $50

current stock index= 1800

risk free interest rate= 0.5%

dividend yield=0.2%

Contract=1 year=12 month

Solution

The Current Index value after 12 months ie for future price = Current Stock Index * (1 + Risk Free - Dividend Yield)^12

Current Index value after 12 months = 1800 * (1 + 0.50% - 0.20%)^12

Current Index value after 12 months = 1865.88

Also, Future Index value after 1 month = Future Stock Index * (1 + Risk Free - Dividend Yield)^12-1

Future Index value after 1 month= 1820 * (1 + 0.50% - 0.20%)^11

Future Index value after 1 month = 1880.97

Therefore, Cash Flow mark to market proceeds = (Future Index Future Value - Current Index Future value) * Multiplier  which when variables are imputed gives us

Cash Flow mark to market proceeds = (1880.97 - 1865.88) * 50

Cash Flow mark to market proceeds = $754.45

Answer:

$754.5

Explanation:

Given that

S0 = 1800

Interest rate = 5% = 0.05

Dividend yield = 2% = 0.02

Recall that

The initial futures price is:

F0 = S0 (1 + rf - d)

Thus,

= 1800 x (1 + .005 - .002)12

= 1865.88

Again,

In one month, the futures price will be:

F0 = 1820x (1 + .005 - .002)11 = 1880.97

The increase in the futures price is 15.09, that is 1880.97 - 1865.88, so the cash flow will be:

15.0 x $ 50

= $754.5

Answer: its. Really unethical

Explanation:

Its very unethical for researchers to take and make profit from Henrietta's cell without her permission.

Because this is unwilling of her....and since the researchers has taken her cell sample already, and are already making profit from it

She and her family needs to be compensated, it might as well be said as the infringement of human right. This compensation can be determined by dividing the profits made by the researchers into half and given Henrietta and her family the other half..

Most like the research company or firm will pay the compensation and also the government.

Final answer:

The case of Henrietta Lacks raises ethical concerns about informed consent and financial compensation for the use of her HeLa cells in medical research. The cells, taken without permission, led to significant medical advancements, but her family has not profited financially. Compensation, if arranged, requires complex considerations and might involve multiple responsible entities.

Explanation:

The ethical dilemma posed by the case of Henrietta Lacks centers around the informed consent in medical research and the use of her cells without permission. Henrietta's unique cells, known as HeLa cells, taken during her treatment for cervical cancer, became vital to medical research, contributing to major discoveries, including the polio vaccine and advancements in cancer, AIDS, and COVID-19 research. Despite their wide commercial use, the Lacks family was not informed or compensated, raising issues of ethical responsibility, patient rights, and potential exploitation.

By today's standards, the lack of informed consent in Lacks's case is both unethical and illegal, raising the question of whether continued usage of her cells for research is ethical, particularly when obtained under now-defunct standards. The Lacks family was awarded control over the genetic sequence's publication in 2013, but questions remain, including whether Henrietta should be acknowledged as a contributor to research and if the Lacks family should receive financial compensation for the significant revenues generated from HeLa cells.

Determining the amount of financial compensation would be complex, involving factors such as the impact of HeLa cells on various medical advancements and the revenues earned specifically from their use. The responsibility for payment might involve a combination of institutions, pharmaceutical companies, and perhaps a dedicated fund to address historical ethical breaches in medical research.

Answer: Internal databases

Explanation:

Internal databases are electronic collections of the consumers and market information which are obtained from data sources that are within the company's network.

Marketing managers access and work with the information in the database in order to identify marketing opportunities and challenges, evaluate performance and plan programs.

Answer:

Option C - The firm, in the long run, is the longest for Boeing because aircraft production requires large, specialized machines and shortest for Wacky Jack's, is the correct answer choice.

Explanation:

Given that Boeing (a producer of jet aircraft), General Mills (a producer of breakfast cereals), and Wacky Jack's (which claims to be the largest U.S. provider of singing telegrams).

The firm, in the long run, is the longest for Boeing because aircraft production requires large, specialized machines and shortest for Wacky Jack's. The reason is that the provision of singing telegrams requires primarily labor.

Therefore, option C is the correct answer choice.

Answer:

$0

Explanation:

Amount paid by the customer for 100 preferred stock = 100 * $100 = $10,000

Number of preferred stock when converted to common stock = 100 * 2 = 200 shares

Revenue from selling the 200 shares = 200 * $50 = $10,000

Profit or loss to customer = Revenue from selling the 200 shares - Amount paid by the customer for 100 preferred stock = $10,000 - $10,000 = $0

Therefore, the customer made no profit nor loss.

Final answer:

There is no profit or loss when a customer buys 100 preferred shares at $100 each, converts them into 200 common shares, and sells the common stock at the market price of $50 per share, as the total amount received from selling the common stock equals the initial investment.

Explanation:

To determine the profit or loss when a customer buys 100 preferred shares, converts them, and then sells the common stock in the market, we need to follow these steps:

Firstly, the customer buys 100 preferred shares at $100 each. Since they are convertible into 2 shares of common stock per preferred share, after conversion, the customer would have 200 shares of common stock.

Next, the common stock is currently trading at $50 per share. If the customer sells all 200 shares of common stock at this market price, they would receive $10,000 (200 shares x $50/share).

The initial investment for the preferred shares was $10,000 (100 shares x $100/share). As the selling price of the common stock is also $10,000, once converted and sold, there is no profit or loss from this transaction (ignoring commissions and other possible fees).

Answer:

Explanation:

Solution is attached below

Answer:

$6,666.67 and $10,000

Explanation:

The computation of the depreciation expense for the year 2017 and 2018 is shown below:

= (Original cost - residual value) ÷ (useful life)  

= ($88,000 - $8,000) ÷ (8 years)  

= ($80,000) ÷ (8 years)  

= $10,000

Since the machinery is purchased on April 30 and we assume the books are closed on December 31 so the number of months calculated is 8 months

Therefore for the year 2017 the depreciation expense is

= $10,000 × 8 months ÷ 12 months

= $6,666.67

And, for the year 2018 the depreciation expense is same i.e $10,000

The Depreciation expense recognized on this machinery in 2017 and 2018 will be: $6,667 ;$10,000.

Tilton Products Depreciation expense

2017 Depreciation expense=[($88,000 − $8,000)/8 ]×8/12

2017 Depreciation expense=($80,000/8)×8/12

2017 Depreciation expense= $10,000×8/12

2017 Depreciation expense= $6,667

2018 Depreciation expense=[($88,000 − $8,000)/8 ]

2018 Depreciation expense=($80,000/8)

2018 Depreciation expense= $10,000

Inconclusion the depreciation expense recognized on this machinery in 2017 and 2018 will be:$6,667 ; $10,000.

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Answer:

a. Residual income             $2,700,000        $4,000,000      $720,000

b. Commercial division

Explanation:

The computation is shown below:

As we know that

Residual income = Income from operations - Minimum income from operations

And, the same is applied below

a. Particulars                         Retail          Commercial     Internet

Income from operations    $5,400,000 $6,250,000    $1,800,000

Minimum amount of income from operations

                                     $2,700,000 $2,250,000    $1,080,000

                                ($30,000,000 × 9%)   ($25,000,000 × 9%) ($12,000,000 × 9%)

Residual income             $2,700,000        $4,000,000      $720,000

b. As we can see that the commercial has highest residual income than retail and internet division

Answer:

$20.52

Explanation:

Given that

Estimated dividends for next period = $3.90

Required rate of return = 25%

Growth rate = 6%

The computation of Price of stock is given below:-

Price of stock = Estimated dividends for next period ÷ (Required rate of return - Growth rate)

= $3.90 ÷ (0.25 - 0.06)

= $3.90 ÷ 0.19

= $20.52

Therefore for computing the price of stock we simply applied the above formula.

Answer:

A. The price of cell phones decreased by 18 percent last year

Explanation:

Macro Economics is the study of economy at aggregate level, as a whole. It gives an overview top view of economy. So, Macro Economic statements are about the entire (whole) economy, at an aggregate level.

B] Stating about - aggregate worker productivity ; C] Stating about - Gross domestic product, being a national income estimate (depicting level of economic activity in the  economy) ; D] Stating about - US inflation rate (depicting about general price level in the economy). These are all Macro Economic Statements.

However, A] The price of cell phones decreased by 18 percent last year : is just a statement of particular cell phones market. It is not about entire economy as a whole. So, it is not a macro economic statement

Answer:

PE ratio is 1

Explanation:

Price earning ratio determines the ratio of price of a share by the earning per share . It measures the times value which a investor pays for each $1 earning of the shares.

To calculate the price earning ratio at the end of the year, we will use the price of the share at the end of the year.

Price Earning Ratio = Market Price / Earning Per share

Price Earning Ratio = $5 / $5

Price Earning Ratio = 1 times

Answer:

P/E = 1

Explanation:

The price earnings (P/E ) can be used to determine the value of a stock , The ratio relates the price of a stock to its earning. A stock with a higher P/R indicates a high potent for growth.

The price earning ratio is computed as follows:

P/E = price per share/EPS

P/E = 5/5 = 1

Answer:

Goldnest company

A. Journal entries

1.Raw Materials Purchased.

Debit Direct Raw materials Account with $ 169,000

Credit Accounts Payable Account with $ 169,000

2.Labour Costs incurred

Debit Direct labor with $ 156,000

Debit Indirect labor with $ 182,000

Debit Sales commissions with $ 25,000

Debit Administrative salaries with $ 45,000

Credit Cash with $ 408,000

3.Rentals Costs for the year

Debit Factory Rent for the year with $13,900

Debit Office Rent for the year with $5,900

Credit Cash Account with $18,900

4. Utility costs incurred in the factory

Debit Factory Utility Account with $20,000

Credit Cash Account with $20,000

5.Advertising Expense Incurred

Debit Advertising Expense Account with $15,000

Credit Cash Account with $15,000

6. Depreciation recorded on equipment

Debit Depreciation on Factory equipment with $15,000

Debit Depreciation on Office equipment with $6,000

Credit Accumulated depreciation with $21,000

7.Sales in the Year

Debit Cash Account with $509,000

Credit Sales with $509,000

B. T Accounts are included in the attached for your understanding

C. Manufacturing overhead has been over applied by $34,300. Workings of this has been attached for your understanding

D.income statement closes with a net profit of $195,000. Refer to attached for detailed breakdown

Explanation:

Answer:

1. Assembly line wages - Direct labor, manufacturing cost

2. Raw material used directly in product - Direct material, manufacturing cost

3. Depreciation on office equipment - In direct, Administrative cost

4. Property tax on factory building - Indirect, Manufacturing cost

6. Sales commission - Selling cost

7. Depreciation on factory equipment - Direct, Manufacturing cost

8. Factory utilities - Administrative cost

9. Wages for factory maintenance workers - Direct, Manufacturing cost

10. Advertising - Selling cost

11. Indirect material used in production - Indirect, Manufacturing cost

12. Factory manager's salary - Administrative cost

Explanation:

The cost which is affected by the production of units is known as variable cost. The cost which does not vary with the units produced is fixed cost.

The costs which are related to selling and storage of the finished goods is selling cost. The cost which is not affected by units produced and is related to office premises and controlling an organization is administrative cost. The cost which varies with the production of units and is incurred to convert raw material into finished goods is manufacturing cost.

Answer:

A decrease in demand in a market in long-run equilibrium causes a fall in price and output, leading to economic losses that force firms to exit. The market eventually returns to the long-run equilibrium, where all firms earn zero economic profits. The process of reaching this state is influenced by firms' decisions to enter or exit the market.

When the demand in a market decreases, the immediate result is a reduction in market price and output. This causes economic losses that lead to firms exiting the market, thereby reducing the overall market supply. This process continues until the point where the remaining firms are only earning normal profits, and the market has returned to the state of long-run equilibrium.

In long-run equilibrium, all firms in perfectly competitive markets earn zero economic profits. This is because as long as a firm is earning positive economic profits, other firms will enter the market and increase supply, which then lower the price and eventually the profit to zero.

Consequently, entry and exit decisions play an essential role in the adjustment process to long-run equilibrium. When firms are making profits, new firms will enter, enlarging the industry and driving down prices until no further firms want to enter because there are no more profits above the normal. Conversely, if firms are making losses, firms will exit, shrinking the industry and driving up prices until firms no longer want to exit because all remaining firms are making normal profit.

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Answer:

EOQ = 149.07 units

Re-order Point  (ROP) =  160 units

Explanation:

The Economic Order Quantity (EOQ) is the order size that minimizes the balance of ordering cost and holding cost. At the EOQ, the carrying cost is equal to the holding cost.

It is computed using he formulae below

EOQ = √ (2× Co× D)/Ch

EOQ = √ (2× 25× 4000)/(10%× 90)

EOQ = 149.07 units

Re-order Point  (ROP)

The level of stock at which  are replenishment order will be placed

Maximum consumption × maximum lead time

= 80× 2 =  160 units

Answer:

A stock market crash will cause aggregate demand to decrease, which the Fed could offset by purchasing bonds.

Explanation:

A stock market crash happens when the prices of stocks fall generally and suddenly that investors are taken unawares.  It triggers some reactions which further threatens the market overall and depresses aggregate demand.  It also weakens investors' confidence, reduces productivity, consumption, and the ability of firms to fund their activities, and leads the economy to recession.

Stock market crashes are triggered by unexpected economic event, catastrophe, or crisis.  For example, the collapse of Lehman brothers as a result of bankruptcy.  They are further exacerbated by panic reactions, underlying economic underperformance, and investors' fear.

The Fed as the US central bank in charge of the monetary policy can try to stem the downward spiral caused by a stock market crash by purchasing bonds.  This makes more money available in the economy for consumption.

Before the crash, the Fed can decide to bail out the institution, e.g. an airline or a financial institution, that could trigger a crash.  But, most stock market crashes are not foreseen.

Final answer:

After calculating the costs, hiring an inspector results in a slightly higher per unit cost ($0.208) compared to allowing defects and correcting them later ($0.20 per unit). Nevertheless, the benefits of ensuring quality might outweigh these costs.

Explanation:

The questions deal with analyzing the cost-effectiveness of hiring an inspector in a production process with a 2% defect rate. To answer these, we consider the given defect rate, costs associated with hiring an inspector and correcting defects, and the production rate.

a. Inspection Cost Per Unit

The inspector costs $11 per hour and inspects 53 units per hour. Therefore, the inspection cost per unit is calculated as $11 divided by 53 units, resulting in approximately $0.208 per unit (rounded to three decimal places).

b. Defective Cost Per Unit

With a 2% defect rate and a $10 cost to correct each defect later, for every 100 units produced, we expect 2 defects. So, the cost per unit due to defects is (2 units * $10) / 100 units, which equals $0.20 per unit (rounded to three decimal places).

c. Should an Inspector be Hired Based on Costs Alone?

Comparing the two costs, the inspection cost per unit ($0.208) is slightly higher than the defective cost per unit ($0.20). However, the difference is minimal, and hiring an inspector might be beneficial considering potential savings in rework time and preservation of product quality and brand reputation, which are not captured in the immediate cost comparison.

Answer:

On disposal, the carrying amount of the asset is derecognized by  

Debit Other income/disposal account (p/l)   $20,000

Credit Asset account     $20,000

Being entries to derecognize the cost of the delivery van

Debit Accumulated depreciation account  $18,000

Credit Other income/disposal account (p/l)   $18,000

Being entries to derecognize the accumulated depreciation of the asset at the date of disposal,

Furthermore,

Debit Cash account    $2,000

Credit Other income/disposal account (p/l)   $2,000

Being entries to record cash collected on  disposal of the asset

Explanation:

When the amount received from the disposal of an asset is higher than the carrying value of the asset, the company makes a gain on disposal. The proceed from the disposal of an asset may be recorded in the disposal or other income account.

On disposal, the carrying amount of the asset is derecognized by  

Debit Other income/disposal account (p/l)

Credit Asset account  

with the cost of the asset, then,

Debit Accumulated depreciation account

Credit Other income/disposal account (p/l)

With the accumulated depreciation of the asset at the date of disposal,

Furthermore,

Debit Cash account

Credit Other income/disposal account (p/l)

with the amount received from the disposal or sale of the asset

Final answer:

To record the sale of Patel Products, Inc.'s delivery van, a journal entry with a debit to 'Accumulated Depreciation' for $18,000 and a debit to 'Cash' for $2,000, along with a credit to 'Delivery Van' for $20,000, is required. There is no gain or loss as the sale proceeds match the book value of the van.

Explanation:

On December 29, 2019, Patel Products, Inc., completed the sale of a delivery van. The journal entry for this transaction involves several accounts. The van had an original cost of $20,000 and after updating for accumulated depreciation, it had a remaining book value of $2,000 ($20,000 cost - $18,000 accumulated depreciation). Patel Products received $2,000 in cash, which equals the remaining book value, indicating that there is no gain or loss on the sale.

The journal entry to record the sale is as follows:

Debit 'Accumulated Depreciation' for $18,000 to remove the accumulated depreciation against the asset.

Debit 'Cash' for $2,000 to record the receipt of cash from the sale.

Credit 'Delivery Van' (vehicle asset account) for $20,000 to remove the van from the company's asset records.

Since the cash received equals the remaining book value of the van, there is no additional debit for loss or credit for gain in this transaction.