Presented below is information related to equipment owned by Monty Company at December 31, 2017.
Cost (residual value $0) $8,943,400
Accumulated depreciation to date 991,000
Value-in-use 5,524,100
Fair value less cost of disposal 4,361,570
Assume that Monty intends to dispose of the equipment in the coming year. As of December 31, 2017, the equipment has a remaining useful life of 8 years. Monty uses straight-line depreciation.
Required :
1. Prepare the journal entry (if any) to record the impairment of the asset at December 31, 2017.
2. Prepare the journal entry to record depreciation expense for 2018.

To evaluate the performance of UEI's divisions, we calculate the EVA for both divisions. The Commercial division had a higher EVA of $12,658 compared to the Consumer division which had an EVA of $11,857, thus it is performing better financially.

The performance of Universal Electronics Inc. (UEI)'s divisions can be evaluated using Economic Value Added (EVA). The EVA of a division is calculated as the net operating profit after tax (NOPAT) minus the weighted average cost of capital (WACC) multiplied by the total capital employed. The capital employed is divisional investment minus current liabilities. The NOPAT can be calculated as the divisional income plus R&D costs.

For the Consumer Division:

NOPAT = $11,500 + $4,200 = $15,700

Capital Employed = $35,500 - $4,200 = $31,300

EVA = $15,700 - (0.11 * $31,300) = $11,857

For the Commercial Division:

NOPAT = $11,925 + $4,200 = $16,125

Capital Employed = $39,750 - $4,000 = $35,750

EVA = $16,125 - (0.11 * $35,750) = $12,658

The division with the higher EVA, in this case the Commercial division, is performing better financially.

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Answer:

$307,500 .

Explanation:

Please see attachment

Answer:

30.92%

Explanation:

Use CAPM (Capital Asset Pricing Model) to find the cost of equity;

cost of equity ;r = risk free rate + Beta (Market Risk Premium)

risk free rate = 4.90% or 0.049 as a decimal

Beta = 2.8

Market Risk Premium = 8.56% or 0.0856 as a decimal

Next, plug in the numbers to the above CAPM formula;

r = 0.049 + 2.8(0.0856)

r = 0.049 + 0.23968

r = 0.2887 or 28.87%

Therefore, cost of equity using CAPM is 28.87%

Next. find cost of equity using Dividend growth model ;

r = (D1/P0) +g

r = (3/13.65) + 0.11

r = 0.2198 + 0.11

r = 0.3298 or 32.98%

Cost of equity using  Dividend growth model is 32.98%

Find the average of the two to find the cost of equity of this stock;

= (28.87% + 32.98%) /2

= 61.85%/2

= 30.92%

Answer:

240,750 units

Explanation:

For computing the production level, first we have to determine the required inventory at the end of the year which is shown below:

Required inventory = Estimated sales ÷ total number of months in a year

                                = 237,000 units ÷ 12 months

                                = 19,750 units

Now the total units would be

= 237,000 units + 19,750 units

= 256,750 units

And the inventory at the beginning of the period is $16,000 units

So, the production level would be

= 256,750 units - 16,000 units

= 240,750 units

Answer:

The Journal entries are as follows:

(1) On December 31, 2016

Bonds payable A/c                     Dr. $154,040

Interest income A/c                    Dr. $14,070

Loss on retirement of debt A/c  Dr. $49,000

To investment in bonds                                        $198,870

To Interest expense                                              $18,240

(To record consolidation entry)

(2) On December 31, 2018

Bonds payable A/c                     Dr. $158,884

Interest income A/c                    Dr. $13,761

Investment in Zack A/c              Dr. $40,266

To investment in bonds                                        $194,152

To Interest expense                                              $18,759

(To record consolidation entry)

Workings:

Interest expense for December 31, 2016:

Book value = 20% of Bond liability (as per equity method)

                   = 0.2 × $760,000

                   = $152,000

Interest expense = 12% of Book value

                            = 0.12 × $152,000

                            = $18,240

Interest expense for December 31, 2016:

= 12% of Book value

= 0.12 × $156,325

= $18,759

The consolidation entry required for the bonds on December 31, 2016, would involve eliminating the intercompany bond transaction and the discount on the bonds. This would also be the case for the consolidation entry on December 31, 2018, if the bonds have not been retired or repurchased.

1. On December 31, 2016, the consolidation entry required for these bonds would involve eliminating the intercompany bond transaction. Since Brant owns Zack, the $81,000 cash interest payment made by Zack to the public on the bonds would be eliminated from the consolidated financial statements. In addition, the discount on the bonds ($41,000) would also need to be eliminated.

2. On December 31, 2018, if the bonds have not been retired or repurchased, the consolidation entry would be the same as in 2016. The cash interest payment made by Zack and the discount on the bonds would still need to be eliminated from the consolidated financial statements.

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Answer:

Maximize

Explanation:

The objective in the linear equation is determined by the situation. When there is cost associated then the equation is made in order to minimize the cost objective.

And when profit or sales value is given then the objective is to maximize the sales value or the profit as the case may be.

In the given case also the profit for each model is given with the quantity of raw material used.

Thus, the objective function will maximize the profit.

Answer:

The correct answer is B.

Explanation:

Giving the following information:

Carson Company purchased a depreciable asset for $280,000. The estimated salvage value is $14,000, and the estimated useful life is 10,000 hours. Carson used the asset for 1,500 hours in the current year. The activity method will be used for depreciation.

Annual depreciation= [(original cost - salvage value)/useful life of production in units]*units produced

Annual depreciation= [(280,000 - 14,000)/10,000]*1,500= $39,900

Answer:

Instructions are listed below.

Explanation:

Giving the following information:

What is the present value of:

PV= FV/(1+i)^n

a. $8,200 in 12 years at 8 percent

PV= 8,200/(1.08)^12= 3,256.33

b. $18,500 in 7 years at 11 percent?

PV= 8,910.68

c. $28,000 in 16 years at 9 percent?

PV= 7,052.35

Final answer:

The present value of a future sum of money can be calculated using the formula PV = FV / (1 + r)^n, where FV is the future value, r is the interest rate, and n is the number of periods. Financial calculators can also be used to compute these present values by entering the relevant information.

Explanation:

The question deals with calculating the present value of future amounts of money given specific interest rates and time periods. The present value (PV) represents the current value of an amount that is to be received in the future, discounted back to the present using a particular interest rate. The formula used for calculating present value is PV = FV / (1 + r)^n, where PV is the present value, FV is the future value, r is the interest rate (expressed as a decimal), and n is the number of periods.

Here are the present value calculations for each described scenario:

For $8,200 in 12 years at 8 percent, the calculation would be PV = $8,200 / (1 + 0.08)^12.For $18,500 in 7 years at 11 percent, the calculation would be PV = $18,500 / (1 + 0.11)^7.For $28,000 in 16 years at 9 percent, the calculation would be PV = $28,000 / (1 + 0.09)^16.

These calculations can be made using a financial calculator by entering the future value, the interest rate, and the number of periods to compute the present value.

Answer:

18%

Explanation:

In this question, we use the DuPont Analysis which is shown below:

ROE = Profit margin × Total assets turnover × Equity multiplier

ROE = 6% × 2 × 1.5

        = 18%

The total assets turnover is shown below:

= Sales ÷ total assets

= $230 million ÷ $115 million

= 2

Simply we apply the ROE formula in which the profit margin is multiplied with the total assets turnover and the equity multiplier

Answer:

The correct option is (B)

Explanation:

The main objective of creating a portfolio is to minimise the overall risk of investments. Two investments with the same correlation signs are riskier because, if one investment gives a negative return, the other investment will do the same. The combined loss is more than the loss one investment will sustain. The portfolio is always constructed by adding investments with opposite correlation signs.

The firm should adopt a concentrated manufacturing strategy. This is because based on the fact that tariffs are low in terms of the sum above that was paid, this factory is said to be able to supply different markets at little higher cost.

A centralized manufacturing strategy is known to be a type of method used that consist of only one principal facility through which one's product is moved and distributed.

It is known to help makes  consistent quality easy as a person only need to validate only one process.  The Centralized manufacturing is known to  be the option that best suit the firm above as priority is focus on just on methods instead of multiple.

Learn more about  concentrated manufacturing from

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Given the significant startup investment and other factors, the firm should likely adopt a concentrated manufacturing strategy. Location decision should consider various factors, with a emphasis on the availability of a skilled workforce and other substantial elements rather than just low-cost environments.

Considering the given information, it appears the electronics firm would likely benefit from a concentrated manufacturing strategy. Justifying a $500 million investment requires significant production volume, which is more feasible with a centralized approach. Factors including the total value of the world market and low tariffs further support this strategy.

When deciding on plant location, firms must evaluate a variety of factors, including labor and capital costs, proximity to suppliers and customers, infrastructure quality, tax levels, and local government competence. Given the need for a highly skilled work force in this case, the firm may favor locations with a strong technical education system and existing high-tech industries.

Though environmental regulations can be a concern, they typically make up only 1 to 2% of a large industrial plant's costs. Therefore, this should not be a determining factor in location decision. The company should favor a location that aligns with these considerations while also providing the necessary facilities and a suitable environment for large scale production.

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Answer:

The answers are letters D and E

Explanation:

The effort and the human capital can explain this wage disparity.

Answer:

(D) Effort

(E) Human capital

Explanation:

-Discrimination is when there is an unfair treatment based on race, age, sex or being part of a group.

-Natural ability refers to a talent that we are born with.

-The superstar phenomenon refers to the fact that the differences in talent people have generate disproportionate levels of success.

-Effort means a serious attempt to do something.

-Human capital refers to the attributes and knowledge someone has to do a job and create value.

According to this, the answer is that the options that can explain this wage disparity is effort and human capital as she performs the same type of work as her colleagues but her productivity is about 25% higher which is an effort to perform well and indicates that she has abilities that allow her to do a better job.

Answer:

Total  effect on income= $190,000

Explanation:

Giving the following information:

Sales (500,000 units) $90,000,000

Cost of goods sold 54,000,000

Gross profit 36,000,000

Operating expenses 24,000,000

Net income $12,000,000

An analysis of costs and expenses reveals that the variable cost of goods sold is $95 per unit and variable operating expenses are $35 per unit. In September, Carney Company receives a special order for 40,000 machines at $135 each from a major coffee shop franchise. Acceptance of the order would result in $10,000 of shipping costs but no increase in fixed expenses

Because it is a special offer and there is unused capacity, we will not have into account the fixed costs.

Total unitary cost= 95 + 35 + (10,000/40,000)= 130.25

Contribution margin= 135 - 130.25= 4.75

Total  effect on income= 4.75*40,000= $190,000

Final answer:

The incremental analysis for Carney Company's special order reveals that accepting the order would lead to an additional net income of $190,000, by generating $5,400,000 in revenue against $5,210,000 in total variable and shipping costs.

Explanation:

To conduct an incremental analysis for the special order that Carney Company received, we need to calculate the additional revenue and the additional costs that accepting this order would entail. The special order consists of 40,000 cappuccino makers at a price of $135 each. Variable costs are given as $95 per unit for cost of goods sold and $35 per unit for variable operating expenses, totaling $130 per unit.

To calculate the incremental net income, we subtract the additional variable costs and shipping costs from the additional revenue.

Incremental Net Income = Additional Revenue - Additional Variable Costs - Shipping Costs = $5,400,000 - $5,200,000 - $10,000 = $190,000

Accepting the special order would result in an incremental net income of $190,000 for Carney Company, assuming no increase in fixed expenses.

Answer:

The answer is letter B

Explanation:

The reason why he joined the group was strength in numbers. Salmon joined the group because he felt confident being in the group. Having ties to others gives people confidence they may lack when they act alone. Their sense of confidence is well founded. In an organization, a group of people tends to be more influential than one person acting alone.

Salman joined the group at work for the solidary benefit of experiencing belonging and social interaction, which aligns with options related to closeness or common goals.

The reason why Salman joined the group at his new workplace is likely because of a solidary benefit, which is the satisfaction derived from the experience of working with other people who share similar interests and social needs. As the new employee felt lonely and subsequently found a group that shares jokes and interacts informally to alleviate work-related stress, the group provides a sense of belonging and social interaction which is vital to most people's well-being and can significantly improve job satisfaction. This aligns with options involving closeness or common goals from the given choices.

Answer:

Total assets turnover ratio (TATO): 2.38

Explanation:

Total assets turnover ratio (TATO) helps investors understand how effectively companies are using their assets to generate sales. Total assets turnover ratio is calculated by using following formula:

Total assets turnover =  Total Sales or Revenue/ Average Total Assets

where:

Total Sales= Annual net sales

Average Total Assets = (Assets at the beginning of year  +Assets at the end of year )/2

In Ryngard Corp:

Total Sales: $38,000

Total assets: $16,000

Total assets turnover  = $38,000/$16,000 = 2.38

Answer:

The correct answer is letter "A": economists include opportunity cost in zero economic profit, while accountants do not include opportunity cost in zero profit.

Explanation:

Normal profit is an economic term that means zero economic profits. To an economist, this is normal since total revenue equals total cost which includes both explicit and implicit costs. It differs from the accounting profit or zero profits since the latter does not take into consideration implicit cost.

Zero profit refers to the accounting concept where total revenue equals explicit costs, while zero economic profit includes both explicit and implicit costs, the latter encompassing opportunity costs that accountants do not consider.

The difference between zero profit and zero economic profit lies in the inclusion of opportunity costs in the calculation. A zero profit, often referred to in the context of accounting, means that the total revenue equals explicit costs, which encompass only the actual cash transactions involved in running a business. On the other hand, zero economic profit, a concept used by economists, factors in both explicit and implicit costs, the latter including opportunity costs, which represent the potential gains from alternative uses of the resources.

Accordingly, the correct answer to the question is:

a. economists include opportunity cost in zero economic profit, while accountants do not include opportunity cost in zero profit.

The difference between zero profit and zero economic profit is that economists include opportunity cost in zero economic profit, while accountants do not include opportunity cost in zero profit.

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Final answer:

The monthly loan payment for a $20,000 car loan with a 12% interest rate over 5 years is approximately $424.55. The loan's EFF% is approximately 12.68%.

Explanation:

To find the monthly loan payment, we can use the formula for the amortization of a loan:

Monthly Payment = (Loan Amount * Monthly Interest Rate) / (1 - (1 + Monthly Interest Rate)^-Total Months)

For this loan, the loan amount is $20,000, the monthly interest rate is 12% divided by 12 months (0.12 / 12 = 0.01), and the total months are 60. Plugging in these values, we get:

Monthly Payment = (20000 * 0.01) / (1 - (1 + 0.01)^-60)

Simplifying the equation and calculating, the monthly loan payment is approximately $424.55.

To find the loan's EFF%, we can use the formula:

EFF% = (1 + Monthly Interest Rate)^12 - 1

For this loan, the monthly interest rate is 0.12 divided by 12 (0.12 / 12 = 0.01). Plugging in this value, we get:

EFF% = (1 + 0.01)^12 - 1

Calculating, the loan's EFF% is approximately 12.68%.

Answer:

Please see attachment

Explanation:

Please see attachment

Dexter's capital gain is $235,040, and he has no ordinary income from the sales of the lots. The gain is calculated by subtracting the total basis value and the total selling expenses from the total revenue.

To find out Dexter's gain from these transactions, we first need to determine his total revenue, total basis, and total selling expenses. Total revenue is the sale amount he gets, which will be 8 sales at $113,000 each, equal to $904,000. The total basis is the original value of each lot, which is 8 lots times $79,100, equal to $632,800. Total selling expenses are 8 times $4,520, equal to $36,160. The total gain or loss is calculated by subtracting from total revenue, the sum of total basis and total selling expenses. That makes his combined gain $904,000 - $632,800 - $36,160 = $235,040.

This entire amount will be considered a capital gain by § 1237 because Dexter has met all requirements. This means that there is no ordinary income from these transactions.

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Answer:

c. the combined profit of the firms is not maximized but total surplus is maximized.

Explanation:

Where there is a duopoly market, it basically means that for the concerned product there are only two producers in the market for the product, and accordingly they rule the market.

When one company produces high quantity and the other low then they might be able to reach at the combined level profit which is maximized, but there will not be any kind of surplus.

This is because when there are only two companies producing each shall produce quantities in bulk, which shall generate huge amount of surplus in the market, although in that case when there is huge supply the profits might be low.

Answer:

Target variable cost per unit of Paddle Paradise, Inc. is $245 per canoe

Explanation:

From the question, we have the following information:

                Projected Units sold = Projected Units produced = 2,000 canoes;

                Targeted total costs of production = $810,000;

                Total fixed cost = $320,000;

To compute the targeted total variable costs of 2,000 canoes:

                 Targeted total variable cost = Targeted total production cost - Total fixed cost = $810,000 - $320,000 = $490,000;

To compute the targeted variable cost per canoe as followed:

Targeted variable cost per canoe = total variable cost/ number of canoe produced = $490,000 / 2,000 = $245 per canoe.

Thus, Paddle Paradise, Inc.'s targeted variable cost per canoe is $245.

Answer:

$5

Explanation:

Consumer surplus is defined as the difference between the highest amount a consumer is willing to pay for a product and the amount the consumer actually pays for the product.

Consumer surplus = willingness to pay - market price

The willingness to pay is the highest amount a consumer would be willing to pay for the purchase of a good or service. It is the value a consumer places on a product.

Before the tax, Ken's consumer surplus = $20 - $15 = $5

Before the tax, Mark's consumer surplus = $17 - $15 = $2

Total consumer surplus- $2 +$5 = $7

After the tax, ken's consumer surplus =$20-$16=$4

After the tax, Mark's consumer surplus = $17 - $16 = $1

Total consumer surplus- $4 + $1 = $5

After the tax on cigars, the total consumer surplus for Ken and Mark combined is $5, which is the sum of the difference between their valuation of the cigar and the new price after the tax.

The student is asking about consumer surplus after the imposition of a tax on cigars. Consumer surplus is the difference between what consumers are willing to pay for a good and what they actually pay. In the scenario described, Ken values the cigar at $20 and Mark values it at $17, while the equilibrium price is $15. After the government imposes a $1 tax, the new price becomes $16. The total consumer surplus for Ken and Mark after the tax would be the sum of their individual surpluses: ($20 - $16) for Ken and ($17 - $16) for Mark, which equals $4 + $1 = $5.

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Answer: Option B and C

Explanation: In simple words, oligopoly refers to the market structure in which there are few firms operating at a huge level and selling products that are close but not absolute substitutes of each other.

     The high level of investment and too much of legal formalities makes it difficult to entry in such industries. Firms in such industries produce identical goods thus they do not compete in the amaretto with respect to price.

the firms operate their market on the basis of non price factors such as advertisements but still are mutually interdependent on each other as a minor decrease in price of other can deregulate the demand in the whole industry. Automobile sector is one the primary examples of oligopoly.

Answer:

Please see attachment

Explanation:

Please see attachment

To decide whether Xinhong Company should replace its manufacturing machine, one must compare the total costs over five years. Although the current machine has a lower book value, the variable costs are higher compared to both alternatives. Therefore, Xinhong should replace the machine with Alternative B, which has the lowest combined purchase price and operating costs.

When Xinhong Company is considering replacing its manufacturing machine, the decision should be based on comparing the total costs associated with keeping the current machine versus the total costs of purchasing and operating the alternative machines. If we consider only the variable manufacturing costs provided in the question, the current machine costs $36,000 per year. Over the remaining five years, this adds up to $180,000. On the other hand, Alternative A, costing $115,000, will have annual variable costs of $19,000, totaling up to $95,000 over five years, and Alternative B, at $125,000, will have yearly costs of $15,000, amounting to $75,000 over the same period.

If we sum the purchase cost and five-year variable costs, Alternative A would have a total cost of $210,000, and Alternative B would have a total cost of $200,000. Thus, even without considering other factors like the current market value of the existing machine, opportunity costs, and the time value of money, it is evident that Xinhong Company should replace the existing machine with Alternative B, as it has the lowest total cost over five years.

Answer:

Total taxable income  = $245,000

Total Tax = $84430

Explanation:

given data

11% of first =  $40,000 profits

22% of next = $26,000

39% of next = $29,000

42% of  over = $95,000

gross revenues = $380,000

total costs = $120,000

allowable tax deductions = $15,000

to find out

taxable income for the first year and how much should the company expect to pay in taxes

solution

we get here first Total taxable income that is

Total taxable income = Total revenue - (Total cost + Tax deductions ) .......................1

put here value we get

Total taxable income = $380,000 - ($120,000 + $15,000 )

Total taxable income  = $380000 - $135000 = $245,000

so total tax will be

Total Tax =  [0.11 × 40000 + 0.22 × 26000 + 0.39 × 29000 + 0.42  × (245000 95000)  ]

Total Tax = 4400 + 5720 +11310 +63000

Total Tax = $84430

Answer:

$11000 (Not part of the options)

Explanation:

Given the following information  

Reba salary is $64,000 P/A  

Ross salary is $1,800 P/A  

Adjusted gross income is $81,500

To calculate their allowable deduction for the year's contributions:  

If their spouse is an active participant in the employer sponsored retirement plan .It means that the deduction is limited MAGI. In this case, their MAGI is less than the threshold limit .Therefore 5500*2 = $11000 can be deductible  .

Answer:

Explanation:

In the classified balance sheet, we summarize the asset and liabilities into various types

Like assets are divided into fixed assets, current assets, and intangible assets.

Likewise, liabilities are also divided into current liabilities, long term liabilities

In every balance sheet, the accounting equation is used that means

Total assets = Total liabilities + Shareholder equity

The preparation of the classified balance sheet for Evan McGruder, Inc. on June 30, Year 3 is presented in the spreadsheet. Kindly find the attachment below:

A T-account balance sheet for a bank lists assets on one side and liabilities and equity on the other. With reserves of $50, government bonds worth $70, and loans of $500, the total assets of the bank are $620. Deducting the deposits of $400 from total assets gives a net worth or equity of $220.

To prepare a T-account balance sheet for a bank, we need to list assets on the left side and liabilities (plus equity) on the right side of the T-account. From the provided information, we can organize the bank's financials as follows:

Assets

Reserves: $50

Government Bonds: $70

Loans: $500

Liabilities

Deposits: $400

The equity of the bank is the difference between total assets and total liabilities. To calculate this, first, add up all the assets:

Reserves + Government Bonds + Loans = $50 + $70 + $500 = $620 in total assets.

Then, subtract the total liabilities from the total assets to get the equity:

Total Assets - Deposits = $620 - $400 = $220 in equity (net worth).

The T-account balance sheet would visually represent these numbers, listing the assets on one side and the liabilities and equity on the other side, ensuring they balance out.

Answer:

$100,000 loss on disposal

Explanation:

The current value (V) of the plant asset is the original $375,000 subtracted by the accumulated depreciation until the end of the current year,  $150,000:

[tex]V=\$375,000 -\$150,000 =\$225,000[/tex]

The gain or loss from this transaction is measured by the amount received in cash subtracted by the current value of the plant asset:

[tex]\$125,000-\$225,000 = -\$100,000[/tex]

Therefore, the company should recognize a $100,000 loss on disposal.

Answer: Customer group

Explanation:

The main role and responsibility of the customer group is that it aggregate the customers and this type of group basically interact with the customers about the requirement of the specific customer and tell them about the best deal that is available.

 They usually help the customer and solve their all the doubt regarding the issue. The customer group is basically refers to the coupon group of members. It is also sometimes known as the customer group.

According to the question, the customer group basically allow the spring filed for serving the borrowers the best loan deal available in the market according the customer requirement.

Answer: Option B

Explanation: In simple words, direct marketing refers to a marketing strategy in which a company directly interact with its customers in regard for making its marketing efforts.

On the other hand, using digital means for the process of marketing is called digital marketing strategy. It is done as it is fast and has a wider reach than other mediums.

In both the cases, the sources of marketing are same such as email and social media etc as these are digital and only through these an organisation can easily connect with their customers without any marketing intermediary.

Answer:

The number of firms in the long run is 9.

Explanation:

Demand function: QD = 176 - 7P

Average total cost functions: ATC = 32/q + 4 + 2q

The long-run price of a perfectly competitive market is equal to the minimum average total cost.

The output at minimum average total cost is found by differentiating ATC and equating to zero.

[tex]\frac{dATC}{dq}=\frac{-32}{q^{2} }+2=0[/tex]

[tex]q^{2}=\frac{32}{2}[/tex]

[tex]q^{2}=16[/tex]

[tex]q=\sqrt{16}[/tex]

q = 4

Price = ATC = (32/4) + 4 + (2 × 4)

                    = 8 + 4 + 8

                    = 20

The market quantity is

QD = 176 - 7P

Q =  176 - (7 × 20)

Q = 176 - 140

Q = 36

Number of firms = Q ÷ q

                           = 36 ÷ 4

                           = 9

Therefore, the number of firms in the long run is 9.