Answer:
Income stament expenses overstated
Net income understated
Balance sheet no effect
Explanation:
Monday 74 December
Tuesday 74 December
Wednesday 74 December
Thursday 74 December
Friday 74 January
370
Income stament expenses overstated
Net income understated
Balance sheet no effect
Ray’s Satellite Emporium wishes to determine the optimal order size for its best-selling satellite dish (Model TS111). Ray has estimated the monthly demand for this model to be 230 units. This model costs Ray $396 to purchase from his supplier. His annual cost to carry inventory is 10% and he estimates that orders cost $38 to process. If Ray used an order quantity of 2000 instead of the optimal order quantity, how much money would he be wasting each year?
Answer:
It waster $74,941.2 per year
Explanation:
The procedure is as follow:
We calcualte the Economic order QuantityThen we calculatethe cost for EOQ and current order sizecompare to know the loss for inefficiency in inventory1.- EOQ
[tex]Q_{opt} = \sqrt{\frac{2DS}{H}}[/tex]
D = annual demand 230 units x 12 month = 2,760
S= setup cost = ordering cost = 38
H= Holding Cost= 10% of unit cost 39.60
[tex]Q_{opt} = \sqrt{\frac{2*2760*38}{39.6}}[/tex]
EOQ = 72.78028371 = 73
2.- Calculate Cost:
EOQ cost:
orders 2,760 / 73 = 37.80 = 38 order x $38 each = $1,444
holding cost: 73 x 39.6 = $2,890.8
Total: 1,444 + 2,890.8 = 4,334.8
Current Cost:
orders: 2,760 / 2,000 = 1.* = 2 order per year x $38 each = $76
holding cost: 2,000 x 39.6 = 79.200
Total 79,200 + 76 = 79,276
3.- Difference:
79,276 - 4,334.8 = 74,941.2
New York Bank provides Food Canning, Inc. a $250,000 line of credit with an interest rate of 1.75 percent per quarter. The credit line also requires that 1 percent of the unused portion of the credit line be deposited in a non-interest bearing account as a compensating balance. Food Canning, Inc.'s short-term investments are paying 1.2 percent per quarter. What is the effective annual interest rate on this arrangement if the line of credit goes unused all year
Answer:
effective interest rate: 2.37%
Explanation:
250,000 x 1% = 2,500
We will calcualtethe interest expense for the credit line and the interest revneue for the credit being in short-term investment through the whole year
so we got:
[tex]Principal \: (1+ r)^{time} = Amount[/tex]
Principal 250,000.00
time 4.00
rate 0.00175
[tex]250000 \: (1+ 0.00175)^{4} = Amount[/tex]
Amount 267,964.76
interst expense for the credit line 17.964.76
2,500 will be deposited
if we keep the credit line available through short term investment we will got:
[tex]Principal \: (1+ r)^{time} = Amount[/tex]
Principal 247,500.00
time 4.00
rate 0.01200
[tex]247500 \: (1+ 0.012)^{4} = Amount[/tex]
Amount 259,595.56
interest revenue 12.095,56
so we recieve 247,500
and paid 17.964.76 interest
and gain 12.095,56
interest net: 5.869,2
5,869.2/247,500 =0,02371393 = 2.37%
Yancey Productions is a film studio that uses a job-order costing system. The company’s direct materials consist of items such as costumes and props. Its direct labor includes each film’s actors, directors, and extras. The company’s overhead costs include items such as utilities, depreciation of equipment, senior management salaries, and wages of maintenance workers. Yancey applies its overhead cost to films based on direct labor-dollars.At the beginning of the year, Yancey made the following estimates:Direct labor-dollars to support all productions $ 8,370,000Fixed overhead cost $ 5,022,000Variable overhead cost per direct labor-dollar $ 0.07Required:1. Compute the predetermined overhead rate.2. During the year, Yancey produced a film titled You Can Say That Again that incurred the following costs:Direct materials $ 1,420,000Direct labor cost $ 2,511,000Compute the total job cost for this particular film.
Answer:
1. predetermined overhead rate= 1.3
2. Total cost= $7,195,300
Explanation:
Giving the following information:
Direct labor-dollars to support all productions $ 8,370,000.
Fixed overhead costs $ 5,022,000.
Variable overhead cost per direct labor-dollar $ 0.07.
Yancey applies its overhead cost to films based on direct labor-dollars.
1. Compute the predetermined overhead rate.
predetermined overhead rate= Estimated total overhead cost/Estimated total amount of the allocation base
predetermined overhead rate= (0.7*8370000+5022000)/ 8370000
predetermined overhead rate= 10881000/8370000= 1.3
2. Compute the total job cost for this particular film.
Direct materials $ 1,420,000
Direct labor cost $ 2,511,000
Overhead= 2511000*1.3= 3,264,300
Total cost= $7,195,300
Job order costing refers to the method when the manufacturing unit ascertain the cost of every unit of product. This is done only when the manufacturing unit has varied product lines and are different from each other.
Predetermined overhead rate= 1.3
Total cost= $7,195,300
The following information is given:
Direct labor dollars to support all productions $ 8,370,000.
Fixed overhead costs $ 5,022,000.
Variable overhead cost per direct labor dollar $ 0.07.
Yancey applies its overhead cost to films based on direct labor dollars.
1. Compute the predetermined overhead rate.
[tex]\begin{aligned}\text{Predetermined overhead rate}&=\frac{\text{Estimated total overhead cost}}{\text{Estimated total amount of the allocation base}}\\\text{Predetermined overhead rate}&= \frac{0.7\times8,370,000+5,022,000}{8,370,000}\\\text{Predetermined overhead rate}&= \frac{10,881,000}{8,370,000}\\&= 1.3\end{aligned}[/tex]
2. Compute the total job cost for this particular film.
Direct materials =$ 1,420,000
Direct labor cost= $ 2,511,000
[tex]\text{Overhead}= 2511000\times1.3= 3,264,300[/tex]
Total cost= $7,195,300
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During the month of June, Blue Boutique had cash sales of $312,440 and credit sales of $183,612, both of which include the 7% sales tax that must be remitted to the state by July 15. Prepare the adjusting entry that should be recorded to fairly present the June 30 financial statements. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Answer:
sales revenue 32,452 debit
sales tax payable 32,452 credit
Explanation:
total sales:
cash sales: 312,440
credit sales 183,612
total 496,052
sales tax is 7%
So we have the following:
sales revenue x ( 1 + sales tax) = invoice nominal
so sales revenue: nominal / 1.07
496,052 / 1.07 = 463,600
now we can calculate sales tax by the difference or simply multiply by 7%
463,600 x 1.07 = 32,452
496,052 - 463,600 = 32,452
We will assume no sales tax entry was ever done along wiht the sales, so we will decrease revenue against sales tax payable.
n May 1, 2009 Giltus Advertising Company received $1,500 from Julie Bee for advertising services to be completed April 30, 2010. The Cash receipt was recorded as unearned fees and at December 31, 2009, $1,000 of the fees had been earned. The adjusting entry on December 31 Year 1 should include:Select one:a. A debit to Unearned Fees for $500.b. A credit to Unearned Fees for $500.c. A credit to Earned Fees for $1,000.d. A debit to Earned Fees for $1,000.e. A debit to Earned Fees for $500.
Answer:
c. A credit to Earned Fees for $1,000.
Explanation:
As for the information provided, we know
Unearned income is an income account, and therefore, will be credited at the time of recording.
Further, it is told that as on 31 December, 2009 out of the total unearned income of $1,500, $1,000 is earned.
Since it is earned it has to be accounted in current year, for this earned income will be credited and unearned income will be reversed for the amount of earned income that is for $1,000.
Gia, Inc., has sales of $679,000, costs of $341,000, depreciation expense of $85,000, interest expense of $52,500, and a tax rate of 22 percent. (Do not round intermediate calculations.) What is the net income for the firm? Suppose the company paid out $40,500 in cash dividends. What is the addition to retained earnings?
Answer:
Net Income $156,390
Addition to Retained Earnings $115,890
Explanation:
Income Statement
Sales $679,000
Cost of goods sold -$341,000
Depreciation Expenses -$85,000
Gross Profit $253,000
Interest Expenses -$52,500
Net Income BEFORE Taxes $200,500
Tax RATE 22% -$44,110
Net Income $156,390
Dividens -$40,500
Retained Earnings $ 115,890
Final answer:
The net income for Gia, Inc. is $156,390 after accounting for all expenses and taxes. The addition to retained earnings is $115,890 after paying out dividends.
Explanation:
Calculating Net Income and Addition to Retained Earnings
To calculate the net income for Gia, Inc., we need to consider all relevant income and expenses. We start with the sales and subtract costs, depreciation expense, and interest expense. Afterwards, we calculate the taxes owed and subtract that from the pre-tax income. Here's the breakdown:
Sales: $679,000Costs: -$341,000Depreciation Expense: -$85,000Interest Expense: -$52,500Pre-Tax Income: $200,500Tax (22%): -$44,110Net Income: $156,390For the addition to retained earnings, we start with the net income and subtract the dividends paid out to shareholders:
Net Income: $156,390Dividends Paid: -$40,500Addition to Retained Earnings: $115,890Frightproof Commuter Airlines is considering adding a new flight to its current schedule from Metro to Hicksville. This route has the following prices and costs. Selling price per passenger per flight $ 70 Variable cost per passenger per flight $ 20 Fixed cost per flight $ 4,400 Income tax rate 30 % Required: a. Compute Frightproof's break-even point in number of passengers per flight. b. How many passengers per flight must Frightproof have to earn $1,750 per flight after taxes?
Answer:
Instructions are listed below
Explanation:
Giving the following information:
Selling price per passenger per flight $ 70
Variable cost per passenger per flight $ 20
Fixed cost per flight $ 4,400
Income tax rate of 30 %
1) Break-even point= fixed costs/ controbution margin
Break-even point= 4400/(70-20)= 88 passengers
2) Break-even points= {[Fixed costs + [net profit/(1-t)]}/contribution margin
Break-even points= [4400 + (1750/0.70)]/50= 138 passengers
Jack has worked for Widgets, Inc. for 35 years, and he is the only employee who can decipher the old coding on products in the warehouse before computerization took place. Due to the economic downturn, Jack was forced into early retirement. What type of knowledge will Widgets lose?
Answer: Human capital
Explanation:
Human capital is the stock of habits, knowledge, social and personality attributes (including creativity) embodied in the ability to perform labour so as to produce economic value. Human capital is unique and differs from any other capital. It is needed for companies to achieve goals, develop and remain innovative. Companies can invest in human capital for example through education and training enabling improved levels of quality and production . Human capital is an intangible asset or quality not listed on a company's balance sheet. It can be classified as the economic value of a worker's experience and skills. This includes assets like education, training, intelligence, skills, health, and other things employers value such as loyalty and punctuality.
The concept of human capital recognizes that not all labor is equal. But employers can improve the quality of that capital by investing in employees the education, experience, and abilities of employees all have economic value for employers and for the economy as a whole . In the case for Jack , 35 years of experience is very valuable human capital and also Jack’s skill are very scarce in general , so the company is losing .
Assume that at the current market price of $5 per unit of a good, you are willing and able to buy 20 units. Last year at a price of $4 per unit, you purchased 20 units. What has most likely happened over the last year? Supply has decreased. Quantity supplied has decreased. Demand has decreased. Supply has increased. Demand has increased.
Answer:
The correct answer is the demand has increased.
Explanation:
At the market price of $5/unit, the quantity demanded is 20 units.
Last year at the price level of $4, the quantity demanded was 20 units.
We see that even though the price has increased the quantity demanded is the same. This indicates that the demand has increased.
When there is an increase in the demand for a commodity, the demand curve moves to the right. This upward or rightward shift in the demand curve will cause the price of the commodity to increase. Though the quantity demanded will be the same.
In the LMN partnership, Lynn's capital is $60,000, Marty's is $80,000, and Nancy's is $70,000. They share income in a 4:3:3 ratio, respectively. Nancy is retiring from the partnership. Each of the following questions is independent of the others.
Refer to the above information. Nancy is paid $84,000, and no goodwill is recorded. What is Lynn's capital balance after Nancy withdraws from the partnership?
A. $68,000
B. $54,000
C. $53,000
D. $52,000
Answer:
D. $52,000
Explanation:
As for the provided information,
We have,
Total capital of Nancy = $70,000
Payment to Nancy on retirement = $84,000
Since no goodwill is recorded any extra payment to Nancy will be debited against existing partner's capital account.
Amount debited against Lynn's Capital Account = ($84,000 - $70,000) [tex]\times[/tex] 4/(4+3) = $8,000
Balance of capital after such payment of Lynn's capital account = $60,000 - $8,000 = $52,000.
Suppose the government spends $500 billion during the fiscal year 2014 on goods and services. In addition, the government collects tax revenues of $480 billion and makes transfer payments equal to $150 billion. Assume the economy is producing at the potential output level. The budget balance for this economy is equal to _____ and the government is running a _____. Please choose the correct answer from the following choices, and then select the submit answer button. Answer choices $170 billion; surplus -$170 billion; deficit $130 billion; surplus -$130 billion; deficit
Answer:
170 billion ; deficit
Explanation:
Given:
Amount spent by the government = $500 billion
Tax revenue collected = $480 billion
Transfer payments = $150 billion
Now,
The budget balance for government
= Tax revenue - Amount spent - Transfer payments
= $480 billion - $500 billion - $150 billion
= -170 billion
Here the negative sign depicts the deficit
Hence,
The answer is option 170 billion ; deficit
_____ refers to activities to plan, organize, lead, and control the flow of products, services, finances, and information that passes through a set of entities from a source to the customer.
a. Contingency planning
b. Demand chain management
c. Supply chain management
d. Enterprise resource planning
Answer:
C.
Explanation:
Supply chain management is the management of the flow of goods and services, finances and information and includes all processes that transform raw materials into final products.
Contingency planning is designed to help an organization respond effectively to a significant future event or situation that we don't know if it will happen.
Demand chain management is similar to supply chain management but more complex, where upstream and downstream relationships between customers and suppliers need to be managed to deliver the lowest cost to the customer across the entire supply chain.
Enterprise resource planning is the integrated management of main business processes,
Answer:
The correct answer is letter "C": Supply chain management.
Explanation:
Supply chain management is the cumulative network of people, entities, activities, information, and resources involved in moving raw materials, components and finished products from original suppliers to end-users. Supply chain management is crucial for most companies and can involve hundreds of o links at large corporations.
Over the last century, U.S. real GDP per person grew at a rate of about...
a. 2 percent per year, so that it is now 2 times as high as it was a century ago.
b. 4 percent per year, so that it is now 8 times as high as it was a century ago.
c. 2 percent per year, so that it is now 8 times as high as it was a century ago.
d. 4 percent per year, so that it is now 2 times as high as it was a century ago.
In a perfectly competitive market with 100 identical firms producing at market price p1 A. the supply curve is more elastic than if there were only 50 identical firms. B. the supply curve is flatter than if there were only 50 identical firms. C. the firms have identical marginal costs. D. All of the above.
Answer:
D
Explanation:
A. The supply curve is more elastic with 100 firms than with 50 because if there are more firms then each one have less market power and for instance they are more sensible to price changes.
B. Because the supply curve is more elastic it looks more flatter. This means that a small change in price will traduce in a greater responde in the quantity supplied.
C. In a perfectly competitive market firms sell an homogeneous product then all of them face identical marginal costs.
In a perfectly competitive market with 100 identical firms, the supply curve is more elastic and flatter compared to if there were only 50 identical firms; however, it's not necessarily true that firms have identical marginal costs. Hence, the correct options are A and B.
In a perfectly competitive market, the question is how the supply curve would differ with 100 identical firms producing at market price p1 compared to if there were only 50 identical firms. To address this:
A. The supply curve is indeed more elastic with 100 firms. Because elasticity is linked with the availability of substitutes, the presence of more firms implies a greater ability to increase output in response to a price increase.
B. The supply curve is flatter with 100 firms. A flatter supply curve signifies a higher level of elasticity. The cumulative effect of many firms being able to supply more means the industry as a whole can respond more noticeably to price changes, which is depicted as a flatter market supply curve.
C. It is not necessarily true that the firms have identical marginal costs. Although firms in perfect competition face the same market conditions and prices, their cost structures can still differ based on factors such as technology and efficiency.
Therefore, Option D 'All of the above' is not correct, because while A and B are true, C is not necessarily the case. The correct answer to the original question would be both A and B, but not C.
Suppose that a politician wants to build more production facilities for solar power and wind power. At the same time, the politician is unwilling to cut any other programs. If the resources that would be used to produce the solar and wind power facilities are already being efficiently used in other programs, where is the point the politician is trying to reach located on the production possibilities frontier?
Answer:
The politician is trying to reach a point above the production possibility frontier.
Explanation:
Suppose that a politician wants to build more wind power and solar power production facilities. The resources that are to be spent on wind and power facilities are already being efficiently used in other programs. But the politician is not willing to decrease expanse on any other program.
We know that to increase expense on one alternative we need to decrease expense on others. If resources are being efficiently used, to spend on wind and solar power facilities the economy will need more resources.
This means that the politician is trying to reach a point higher than the production possibility frontier.
Final answer:
The politician aims to stay on the production possibilities frontier while increasing solar and wind power facilities, indicating a point of allocative efficiency but also facing the law of increasing opportunity cost as resources would have to be reallocated.
Explanation:
The point the politician is trying to reach on the production possibilities frontier (PPF) is one that is already on the frontier curve, assuming current resources are being efficiently used in other programs. Since the PPF represents all possible efficient combinations of two goods (in this case, production of solar and wind power vs. all other programs), the intention to build more production facilities for solar and wind power without cutting other programs means that the politician is trying to maintain an allocatively efficient point on the PPF. However, if the resources are truly being used efficiently elsewhere, then increasing production of solar and wind power would mean having to reallocate resources, potentially increasing the opportunity cost and causing a movement along the PPF. This change must come at the expense of some other production due to the law of increasing opportunity cost, as resources are transferred from the most efficient use to less efficient uses for the production of additional solar and wind power.
The APB partnership agreement specifies that partnership net income be allocated as follows:
Partner A Partner P Partner B
Salary allowance 30000 10000 40000
Interest on average
capital balance 10% 10% 10%
Remainder 40% 40% 20%
Average capital balances for the current year were $50,000 for A, $30,000 for P, and $20,000 for B.
19. Refer to the information given. Assuming a current year net income of $50,000, what amount should be allocated to each partner?
Partner A Partner P Partner B
A) 20000 20000 10000
B) 16000 16000 8000
C) 19000 (3000) 34000
D) 17000 0 33000
A. Option A
B. Option B
C. Option C
D. Option D
Answer:
C) 19000 (3000) 34000
Explanation:
income: 50,000
salaries (80,000) (sum of partner salaries)
interest (10,000) (total capital 100,000 x 10% interest )
net loss (40,000)
Partner A
50,000 + 30,000 salary + 5,000 interest - 16,000 loss share(40%) = 69,000
It woulld be allocate: 69,000 - 50,000 = 19,000
Partner B
30,000 + 10,000 salary + 3,000 interest - 16,000 loss share(40%) = 27,000
27,000 - 30,000 = -3,000
Partner C
20,000 + 40,000 salary + 2,000 interest - 8,000 loss share(20%) = 54,000
54,000 - 20,000 = 34,000
The allocation of net income among the partners would be $42,000 for Partner A, $20,000 for Partner P and $45,500 for Partner B. None of the provided options matches the correct allocation.
Explanation:The question revolves around how to allocate partnership income based on the provided percentage allocations and capital balances. The three elements of the partnership agreement that impact the allocation of net income are salary allowance, interest on average capital balance, and the remainder percentage.
For Partner A, the allocation would be: Salary ($30,000) + 10% interest on the capital balance ($50,000 * 10% = $5,000) + 40% of the remainder of net income [($50,000 net income - $70,000 total salary allowance - $10,000 total capital balance interest) * 40% = $7,000], which sums up to $42,000.
Similarly, for Partner P, the allocation would be: Salary ($10,000) + 10% interest on capital balance ($30,000 * 10%= $3,000) + 40% of the remainder of net income [($50,000 net income - $70,000 total salary allowance - $10,000 total capital balance interest) * 40% = $7,000], which sums up to $20,000.
Lastly, for Partner B, the allocation would be: Salary ($40,000) + 10% interest on capital balance ($20,000 * 10% = $2,000) + 20% of the remaining net income [($50,000 net income - $70,000 total salary allowance - $10,000 total capital balance interest) * 20% = $3,500], which sums up to $45,500.
So, none of the options match the accurate allocation of net income.
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Consider the following production possibilities frontier model for an economy that produces only two goods: barley and tablets. Which of the following is true regarding this economic model? The fact that there are only two goods produced in this theoretical economy, when, in reality, economies produce many more types of goods, means this model is generally useless. This PPF is not an economic model. In order to construct such a model, an economist would need real life data regarding countries that only produce two goods. The fact that there are only two goods produced in this theoretical economy is a simplifying assumption that still allows economists to demonstrate key economic concepts.
Answer:
The fact that there are only two goods produced in this theoretical economy is a simplifying assumption that still allows economists to demonstrate key economic concepts.
Explanation:
The purpose of economic models is not exactly to portray complex reality, but to produce insights into how it works. Creating a model with two countries that produce thousands of products would be methodologically unfeasible. Economists therefore adopt simplifications to explain concepts and create insights into how the real economy works.
The Production Possibilities Frontier (PPF) is a simplified economic model that demonstrates key economic principles, such as choice, opportunity cost, and efficiency. Despite considering only two goods, it is useful in depicting scenarios in real-world economies and understanding economic growth.
Explanation:The statement that an economic model such as the
Production Possibilities Frontier
(PPF) is generally useless because it only considers two goods is incorrect. The PPF is an economic model, and it indeed uses a simplifying assumption by considering only two goods. This is intended to help illustrate key economic concepts cleanly, not to fully represent complex, real-world economies. The PPF model maps out various combinations of two goods that a society could potentially produce, assuming it uses its resources to maximum efficiency. This tool helps to depict scenarios of scarcity, choice, and opportunity cost in economic planning. Additionally, society's choice along the PPF reflects its preference mix of the goods, which is an indication of
allocative efficiency
. The economic growth such as increase in resources and improvement in technology shifts the PPF outwards, allowing more production. Thus, even with its simplifications, the PPF model holds important value in economic studies.
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Sheridan Repair Shop had the following transactions during the first month of business as a proprietorship. Journalize the transactions. (If no entry is required, select "No entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Aug. 2 Invested $11,290 cash and $2,740 of equipment in the business. 7 Purchased supplies on account for $450. (Debit asset account.) 12 Performed services for clients, for which $1,303 was collected in cash and $689 was billed to the clients. 15 Paid August rent $634. 19 Counted supplies and determined that only $263 of the supplies purchased on August 7 are still on hand.
Final answer:
Singleton Bank alters its balance sheet by lending $9 million to Hank's Auto Supply, with the loan noted as an asset. The deposit and reserve levels of First National also rise by the same amount, and they are able to lend out funds beyond the required 10% reserve.
Explanation:
Understanding Singleton Bank's Balance Sheet with a Loan to Hank's Auto Supply
Singleton Bank has made significant changes to its balance sheet by issuing a loan to Hank's Auto Supply. The lent amount of $9 million is recorded as an asset, contributing to interest income for Singleton Bank. However, Hank cannot take this sum in cash; instead, a cashier's check is provided, which Hank deposits into First National's bank account.
Consequently, First National experiences an increase in deposits and reserves by $9 million. According to regulatory requirements, First National must maintain a 10% reserve, but it can loan out the remaining funds. This scenario exemplifies the way banks contribute to the money supply through fractional reserve banking.
Talbot Enterprises recently reported an EBITDA of $7.5 million and net income of $1.875 million. It had $1.95 million of interest expense, and its corporate tax rate was 40%. What was its charge for depreciation and amortization? Enter your answer in dollars. For example, an answer of $1.2 million should be entered as 1,200,000. Round your answer to the nearest dollar.
Answer:
The charge for depreciation and amortization= $2425000
Explanation:
Giving the following information we need to calculate the charge for depreciation and amortization:
EBITDA= 7500000
Net Income= 1875000
Interest= 1950000
t=0,40
We know that:
EBITDA
depreciation and amortization (-)
=EBITD
Interest (-)
Other Expenses (-)
=EBT (Pre-Tax Income)
Income Taxes (-)
=Net Income
We have to calculate the amount of Taxes:
Tax= [Net income/(1-t)]-Net profit= (1875000/0,60)-1875000=1250000
EBIT=Net income+Tax+Interest= 1875000+1250000+1950000=5075000
D&A=EBITDA-EBIT=7500000-5075000= $2425000
Marigold Corp. has the following inventory data:
Nov. 1 Inventory 23 units @ $4.70 each
8 Purchase 94 units @ $5.05 each
17 Purchase 47 units @ $4.90 each
25 Purchase 70 units @ $5.10 each
A physical count of merchandise inventory on November 30 reveals that there are 78 units on hand. Ending inventory (rounded) under LIFO is
Answer:
Ending inventory (rounded) under LIFO is 386
Explanation:
Month Units Unit Cost Cost Inven. Inven. Cost
nov-01 23 4,7 108,1 23 108
nov-08 94 5,05 474,7 55 278
nov-17 47 4,9 230,3 0 0
nov-25 70 5,1 357 0 0
78 386
Friendly’s Quick Loans, Inc., offers you "three for four or I knock on your door." This means you get $3 today and repay $4 when you get your paycheck in one week (or else). a. If you were brave enough to ask, what APR would Friendly’s say you were paying? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What’s the effective annual return Friendly’s earns on this lending business? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
a. The APR would be approximately 1837.96%.
b. Effective Annual Return≈ 2.5284 * [tex]10^{97}[/tex] - 1
a. To calculate the APR (Annual Percentage Rate), we can use the formula:
APR = [(Total Interest / Loan Amount) / Number of Days in Loan Period] * 365 * 100
Given:
Loan Amount (L) = $3
Total Repayment (P) = $4
Number of Days in Loan Period (n) = 7 days
Total Interest = Total Repayment - Loan Amount = $4 - $3
= $1
APR = [($1 / $3) / 7] * 365 * 100
≈ 1837.96%
So, the APR would be approximately 1837.96%.
b. The effective annual return can be calculated using the formula:
Effective Annual Return = [tex](1 + APR / 100)^{365} - 1[/tex]
Given the APR calculated in part (a), which is approximately 1837.96%:
Effective Annual Return = [tex](1 + 1837.96 / 100)^{365} - 1[/tex]
≈ [tex]2.5284 * 10^{97} - 1[/tex]
The effective annual return is an extremely high value, but it's important to note that these types of lending terms are highly exploitative and should be avoided due to their exorbitant interest rates.
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Final answer:
The APR Friendly’s Quick Loans would claim you're paying on a one-week loan where you borrow $3 and repay $4 is a whopping 1733.33%. The effective annual return they earn on this business, taking into account compounding, is even significantly higher, showcasing the costliness of such loans.
Explanation:
The question involves calculating the annual percentage rate (APR) and the effective annual return that Friendly’s Quick Loans, Inc., would earn on a loan where you borrow $3 and repay $4 in a week. To calculate the APR, we first recognize that the interest for one week is $1 ($4 repayment - $3 loan = $1 interest). To find the weekly rate, we divide the interest by the principal amount, which is $1/$3 = 0.3333 or 33.33%. However, since APR is expressed on an annual basis, and there are 52 weeks in a year, we multiply the weekly rate by 52, resulting in an APR of 1733.33%.
To calculate the effective annual return, we use the formula for the effective annual rate (EAR), which accounts for compounding. The EAR formula is (1 + i)ⁿ - 1, where i is the periodic interest rate, and n is the number of periods in a year. Substituting the weekly rate into the formula gives us (1 + 0.3333)⁵² - 1, which yields a significantly high return rate, indicating how lucrative and expensive this type of lending can be for the borrower and profitable for the lender.
Which of the following is true of financial accounting? It is primarily concerned with producing information for internal users. It does not follow any externally imposed rules. It strongly emphasizes providing information about future events. It focuses on overall firm performance, providing a more aggregated viewpoint.
Answer: It focuses on overall firm performance, providing a more aggregated viewpoint.
Explanation:
Financial accounting can be referred to as a specialized arm of accounting which keeps record of an organization's financial transactions. It tends to use standardized guidelines under which transactions are recorded, stated, summarized, and thus presented in a financial report or statement i.e. an income statement, balance sheet etc.
Frye, Inc., has Sales of $625,000, Costs of Goods Sold of $260,000, Depreciation Expense of $79,000, Interest Expense of $43,000, and an average tax rate of 35 percent. If the firm's beginning balance in Retained Earnings for the year was $200,000 and paid out $60,000 in cash dividends, how much is the firm's ending balance in Retained Earnings for the year?
Answer:
Ending RE : 297,950
Explanation:
Sales 625,000
COGS (260,000)
Dep Expense (79,000)
Interest Exp (43,000)
EBT 243,000
Tax Expense (85,050)
Net Income 157,950
beginning retained earning 200,000
+ net income 157,950
- dividends (60,000)
ending RE 297,950
In the JK partnership, Jacob's capital is $140,000, and Katy's is $40,000. They share income in a 3:2 ratio, respectively. They decide to admit Erin to the partnership. Each of the following questions is independent of the others.
Refer to the information provided above. Erin invests $52,000 for a one-fifth interest. What amount of goodwill will be recorded?
A. $7,000
B. $28,000
C. $50,000
D. $80,000
Answer:
The correct option is (B)
Explanation:
Given:
Existing partner's total capital is $180,000 (140,000 + 40,000)
New partner, Erin's contribution is $52,000
So new paid in capital is $232,000 (180,000 + 52,000)
Required capital = [tex]\frac{Investment\ by\ Erin}{interest}[/tex]
Interest in % is 20% [tex]\left (\left ( \frac{1}{5} \right )\times 100 \right )[/tex]
Required capital = [tex]\frac{52,000}{0.2}[/tex]
= $260,000
Goodwill = Required capital - paid in capital
= 260,000 - 232,000
=$28,000
So, amount of goodwill is $28,000.
Big Sky Sports sells hunting and fishing equipment and provides guided hunting and fishing trips. Big Sky Sports is owned and operated by Joe Flannery, a well-known sports enthusiast and hunter. Joe’s wife, Pam, owns and operates Glacier Boutique, a women’s clothing store. Joe and Pam have established a trust fund to finance their children’s college education. The trust fund is maintained by Kalispell State Bank in the name of the children, Trey and Brooke.
a. For each of the following transactions, identify which of the entities listed should record the transaction in its records:
Glacier Boutique
Kalispell State Bank
Big Sky Sports
None of the above
1. Pam deposited a $2,000 personal check in the trust fund at Kalispell State Bank.
2. Pam purchased two dozen spring dresses from a Spokane designer for a special spring sale.
3. Joe paid a breeder’s fee for an English Springer Spaniel to be used as a hunting guide dog.
4. Pam authorized the trust fund to purchase mutual fund shares.
5. Joe paid a local doctor for his annual physical, which was required by the workmen’s compensation insurance policy carried by Big Sky Sports.
6. Received a cash advance from customers for a guided hunting trip.
7. Pam paid her dues to the YWCA.
8. Pam donated several dresses from inventory for a local charity auction for the benefit of a women’s abuse shelter.
9. Joe paid for dinner and a movie to celebrate their thirtieth wedding anniversary.
10. Joe paid for an advertisement in a hunters’ magazine.
b. What is a business transaction?
Answer:
(a)
1. Kalispell State Bank
2. Glacier Boutique
3. Big Sky Sports
4. Kalispell State Bank
5. Big Sky Sports
6. Big Sky Sports
7. None of the above
8. Glacier Boutique
9. None of the above
10. Big Sky Sports
(b) Business transactions refers to the transactions that are related to only business, such as purchase of land, machinery, goods for business purposes. Any type of personal transaction is not included in business transaction.
The entities involved in each transaction.
Explanation:a. Glacier Boutique: 1. Pam deposited a $2,000 personal check in the trust fund at Kalispell State Bank. 2. Pam purchased two dozen spring dresses from a Spokane designer for a special spring sale. 3. Pam authorized the trust fund to purchase mutual fund shares. 7. Pam paid her dues to the YWCA. 8. Pam donated several dresses from inventory for a local charity auction for the benefit of a women’s abuse shelter. 10. Joe paid for an advertisement in a hunters’ magazine.
Kalispell State Bank: 1. Pam deposited a $2,000 personal check in the trust fund at Kalispell State Bank.
Big Sky Sports: 3. Joe paid a breeder’s fee for an English Springer Spaniel to be used as a hunting guide dog. 5. Joe paid a local doctor for his annual physical, which was required by the workmen’s compensation insurance policy carried by Big Sky Sports. 6. Received a cash advance from customers for a guided hunting trip. 10. Joe paid for an advertisement in a hunters’ magazine.
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Before the year began, Butler Manufacturing estimated that manufacturing overhead for the year would be $176,400 and that 13,800 direct labor hours would be worked. Actual results for the year included the following: Actual manufacturing overhead cost $185,000 Actual direct labor hours 14,600 The predetermined manufacturing overhead rate per direct labor hour is closest to
Answer:
manufacturing overhead rate =$12.78
Explanation:
Giving the following information:
Butler Manufacturing estimated that:
Manufacturing overhead $176,400
Direct labor hour 13,800.
Actual results for the year:
The actual manufacturing overhead costs $185,000.
Actual direct labor hours 14,600.
We need to calculate the predetermined manufacturing overhead rate per direct hour
manufacturing overhead rate = 176400/13800hours= $12.78
Jack has $1,000 to invest. He has a choice between municipal bonds with an interest rate of 4% or corporate bonds with an interest rate of 6%. Jack has a marginal tax rate of 25%. Given this information, Jack should invest in the bonds. The after-tax rate of return on the municipal bonds is % and the after tax rate of return on the corporate bonds is %. The difference in the rates of return is known as taxes.
Answer:
Ans. The after-tax rate of return on the municipal bonds is 3% and the after tax rate of return on the corporate bonds is 4.5%
Explanation:
Hi, the formula to find the after-tax rate of return of any taxable income is as follows.
[tex]r(AfterTax)=r(BeforeTax)*(1-Taxes)[/tex]
Therefore, in the case of the municipal bond.
[tex]r(AfterTax)=0.04*(1-0.25)=0.03[/tex]
So, the after-tax rate of return of the municipal bond is 3%.
And for the corporate bond is.
[tex]r(AfterTax)=0.06*(1-0.25)=0.045[/tex]
And the after-tax rate of return of the corporate bond is 4.5%.
It means that taxes on municipal bonds are:
[tex]Taxes= Return(BeforeTax)-Return(AfterTax)[/tex]
In the case of municipal taxes:
[tex]Taxes=0.04-0.03=0.01[/tex]
1% taxes for municipal bonds
In the case of corporate taxes:
[tex]Taxes=0.06-0.045=0.015[/tex]
1.5% taxes for corporate bonds
Best of luck.
According to the law of comparative advantage, what should be the distinguishing characteristics of the goods a nation imports?
(A) They have the lowest capital costs.
(B) They can be domestically produced cheaply.
(C) They cannot be domestically produced cheaply.
(D) They have the greatest domestic demand.
Answer:
The correct answer is option C.
Explanation:
The law of comparative advantage states that a country will produce and export the commodity it has a comparative advantage in producing.
In other words, if the country can produce good cheaply or at a lower opportunity cost.
The good that cannot be produced cheaply or has a higher opportunity cost will be imported from the country that produces it cheaply.
According to the law of comparative advantage, the distinguishing characteristics of the goods a nation imports should be that they cannot be domestically produced cheaply. Therefore, options (c) is accurate.
This principle suggests that nations should specialize in producing goods where they have a comparative advantage (lower opportunity cost) and trade for goods they produce less efficiently.
By focusing on producing what they do best, even if it's not the absolute best, countries can achieve greater efficiency and benefit from global trade. This leads to mutual gains as each nation concentrates on its strengths and imports goods that would be more costly to produce domestically.
Therefore, option (c) is accurate.
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Which of the following is an example of financial intermediation? A. A saver makes a deposit in a credit union, and the credit union makes a loan to a member for a new car. B. U.S. Treasury sells bonds to fund government spending. C. IBM issues a bond that is sold to a retired person. D. IBM issues common stock that is sold to a college student.
Answer:
A. A saver makes a deposit in a credit union, and the credit union makes a loan to a member for a new car.
Explanation:
A financial intermediation is when an institution acts as the joint-point between two parties in a financial transaction. This means, lender and borrowers, and buyer and seller.
The saver deposit in the credit union. (lender)
And the financial intermediate give a loan to a member (borrower)
This spread the risk and makes transaction more easy, as both parties deal with the credit union, not with themselves.
The credit union faces and assumes obligation with both:
for the saver to give the deposit
and with the borrower that if it meets the requirement will receive the cash for the car and will return in a pre-arrenged method with a given interest and time defined.
Brown Office Supplies recently reported $20,000 of sales, $8,250 of operating costs other than depreciation, and $1,750 of depreciation. It had $10,000 of long-term debt outstanding that carries a 7.0% interest rate, and its federal-plus-state income tax rate was 40%. How much was the firm's earnings before taxes?
Answer:
Net earnings before taxes = $9,300
Explanation:
Provided information, we have
Sales for the period = $20,000
Less: Operating Cost = $8,250
Less: Depreciation = $1,750
Operating income = $10,000
Less: Interest = $10,000 [tex]\times[/tex] 7% = $700
Thus, net earnings before taxes = $9,300
Note: All the expenses including depreciation, and interest are charged before taxes.
Therefore, depreciation and interest has been deducted before charging taxes.