Answer:
There would be in the month an excess cash available of $29,000.
Explanation:
In order to calculate the excess (deficiency) of cash available over disbursements for the month, first we have to calculate the total cash.
Total cash= beginning cash balance+cash receipts
=$10,000+$85,000
=$95,000
There are budgeted cash disbursements of $66,000, so $95,000-$66,000=$29,000, hence there would be in the month an excess cash available of $29,000.
At year-end (December 31), Chan Company estimates its bad debts as 0.40% of its annual credit sales of $882,000. Chan records its Bad Debts Expense for that estimate. On the following February 1, Chan decides that the $441 account of P. Park is uncollectible and writes it off as a bad debt. On June 5, Park unexpectedly pays the amount previously written off.
Prepare the journal entries for these transactions.
1. Record the estimated bad debts expense.
2. Record the entry to write off P. Park's account as uncollectible.
3. Record the reinstatement of Park's previously written off account.
4. Record the cash received on account.
Answer:
1. Debit Bad debt expense $3528
Credit Allowance for doubtful debt $3528
Being entries to record bad debt estimates.
2. Debit Allowance for doubtful debt $441
Credit Accounts receivable $441
Being entries to record receivables gone bad.
3. Debit Accounts receivable $441
Credit Allowance for doubtful debt $441
Being entries to reinstate receivables written off.
4. Debit Cash account $441
Credit Bad debt expense $441
Being entries to record amount received on accounts
Explanation:
When a company makes sales on account, debit accounts receivable and credit sales. Based on assessment, some or all of the receivables may be uncollectible.
To account for this, debit bad debit expense and credit allowance for doubtful debt. Should the debt become uncollectible (i.e go bad), debit allowance for doubtful debt and credit accounts receivable.
Where a debit that had previously been determined to have gone bad gets settled, debit cash and credit bad debt expense.
Amount of bad debt estimates
= 0.4% * $882,000
= $3528
Firms such as IKEA and The Home Depot are known for their use of __________ because they set reasonably low prices but still offer high-quality products and adequate customer services.
Answer:
Value Based pricing.
Explanation:
Value based pricing is something which IKEA and The Home Depot are know for using because this is a way of pricing through which prices are set based on the customer's perception and what he/she thinks of it in his mind. This is also know as customer based/focused pricing because they sell items on prices which customer's believe how exactly it should be.
Thankyou.
Goodluck.
IKEA and The Home Depot employ business strategies that offer high-quality products and customer service at low prices, a principle similar to Walmart's 'everyday low prices.' IKEa uses flat organizational structures to encourage employee engagement, while Amazon's efficient production and cost models allow for competitive pricing.
Stores like IKEA and The Home Depot are known for their successful business strategies which encompass providing high-quality products and adequate customer services while maintaining reasonably low prices. The philosophy behind this approach is akin to the strategy used by Walmart, known as 'everyday low prices.' By targeting a market with elastic demand, these companies find that a slight decrease in prices leads to a significant increase in sales volume, often resulting in overall higher profitability.
IKEA, specifically, employs flat organizational structures within its stores to enhance employee involvement and instill a sense of ownership among its staff. This management strategy contributes to the company's ability to maintain cost-effective operations while fostering a workplace culture that is conducive to delivering value to its customers.
Moreover, companies like Amazon have executed similar principles through efficient production models and cost structures, enabling them to offer lower prices than competitors even when including shipping costs. These business practices highlight the importance of operational excellence in attracting and retaining customers who prioritize cost, convenience, and quality when making purchasing decisions.
The TimpRiders LP has operated a motorcycle dealership for a number of years. Lance is the limited partner, Francesca is the general partner, and they share capital and profits equally. Francesca works full-time managing the partnership. Both the partnership and the partners report on a calendar-year basis. At the start of the current year, Lance and Francesca had bases of $10,000 and $3,000, respectively, and the partnership did not carry any debt. During the current year, the partnership reported the following results from operations:
Net sales $ 650,000
Cost of goods sold $ 500,000
Operating expenses $ 160,000
Short-term capital loss $ 2,000
Tax-exempt interest $ 2,000
§1231 gain $ 6,000
On the last day of the year, the partnership distributed $3,000 each to Lance and Francesca.
Using the information provided, prepare TimpRiders’ page 1 and Schedule K to be included with its Form 1065 for the current year. Also, prepare a Schedule K-1 for Lance and Francesca.
Answer:
See the explanation for the answer.
Explanation:
Form 1065:Sales = $ 650,000
Less:
Operating expenses = $ 160,000
Ordinary income = $10,000
Francesca's Schedule 11231 gains = $3000
Tax exempt int = $1,000
Ordinary income = $5,000
Net income = $2,000
Lance's Schedule 11231 gains = $3000
Tax exempt int = $1,000
Short-term loss $ 1,000
Net income = $3,000
Schedule K-1 is a schedule of IRS Form 1065, which helps in providing information about partner's share, profits and losses, and credits to the IRS.
IRS Form 1065The question demands that the following information should be used to prepare Form 1065, and Schedule K-1 for Lance and Francesca. So here are the answers:
Form 1065
Total Revenue/Net Sales = $ 650,000
Less:
Operating expenses = $ 160,000
Ordinary income = $10,000
Schedule K-1 for Lance
1231 gains = 6000/2 = $3000
Tax exempt int = 2000/2 = $1,000
Short-term loss = 2000/2 = $ 1,000
Net Income = $3,000
Schedule K-1 for Francesca
1231 gains = $3000
Tax exempt interest = $1,000
Ordinary income = $5,000
Net Income = $2,000
Learn more about IRS Form 1065 here:
https://brainly.com/question/6822379
Vivian goes to an auction and sees a rare antique lamp that is an identical match to one she already has. At the proper time she bids on the lamp and is the highest bidder. Even though she is the highest bidder, the auctioneer refuses to accept her bid and withdraws the lamp from the auction. Can the auctioneer do that?
Answer:
Most auctions are without reserve and therefore the auctioneer cannot withdraw the lamp.
Explanation:
Every auction seems to be either "of-reserve" versus "without-reserve." So the reaction to whether an auction house manages higher bids depends on that form of bidding being carried out. In an offering with reserves, the auction house may reject a higher offer (retain the privilege to reject ...) in which any better bid should be approved in an offering without deposit.
Put differently, the auction house is not obliged to deliver to the top purchaser in a with reserved sale. Essentially, the next bigger raise reflects the minimum price.
financial calculator Bruno's Lunch Counter is expanding and expects operating cash flows of $23,900 a year for 5 years as a result. This expansion requires $66,000 in new fixed assets. These assets will be worthless at the end of the project. In addition, the project requires $5,600 of net working capital throughout the life of the project. What is the net present value of this expansion project at a required rate of return of 12 percent?
Final answer:
The net present value of Bruno's Lunch Counter's expansion project is calculated by finding the present value of expected operating cash flows, and then subtracting the required fixed asset investment and the net working capital. The discount rate used for the present value calculation is 12 percent, and the cash flows are expected to occur annually over a period of 5 years.
Explanation:
The question asks for the net present value (NPV) of an expansion project for Bruno's Lunch Counter, which requires calculating the present value of future operating cash flows and adjusting for the initial investment costs and the working capital required throughout the project. We will follow these steps:
Calculate the present value of the annual operating cash flows.Subtract the initial fixed asset investment and the net working capital requirement.Sum these values to find the NPV at the required rate of return of 12 percent.The NPV formula we will apply is NPV = Σ (Ct / (1 + r)^t) - I - W, where Ct represents the cash flows in each period t, r is the discount rate (12%), I is the initial fixed asset investment, and W is the net working capital requirement.
Assuming that the operating cash flows occur at the end of each year for 5 years, and that the initial investment and working capital are required at the start, we use the present value formula for an annuity to compute the present value of the operating cash flows and then subtract the costs of investment and working capital to reach our final NPV.
Fixed manufacturing costs are $44 per unit, and variable manufacturing costs are $100 per unit. Production was 67,200 units, while sales were 50,400 units. Determine (a) whether variable costing operating income is less than or greater than absorption costing operating income, and (b) the difference in variable costing and absorption costing operating income.
Answer:
a. Less
b. $739,200
Explanation:
a. As we know that
Under the variable costing, all the variable cost i.e direct material, direct labor, variable manufacturing overhead are considered
And, under the absorption costing, all the fixed cost and the variable cost are considered i.e direct material, direct labor, variable manufacturing overhead, fixed variable manufacturing overhead, fixed and variable selling and admin expenses are considered
So based on this, the variable costing operating income is less than the absorption costing due to the fixed cost
b. And, the difference amount is
= [67,200 Units – 50,400 Units] × $44 per unit
= 16,800 Units × $44 per unit
= $739,200
Final answer:
Variable costing operating income is typically less than absorption costing operating income when inventory increases, as fixed costs are expensed when incurred in variable costing. The difference in operating income for this scenario would be $739,200, calculated by the fixed cost per unit times unsold units.
Explanation:
Fixed manufacturing costs per unit are $44, and variable manufacturing costs per unit are $100. With a production of 67,200 units and sales of 50,400 units, we need to determine the relationship between variable costing and absorption costing operating income. Under absorption costing, fixed manufacturing costs are allocated to each unit produced, so these costs are expensed as the units are sold. Since not all units produced were sold, some fixed manufacturing costs are included in ending inventory on the balance sheet rather than being expensed on the income statement, which increases operating income compared to variable costing. Under variable costing, only variable manufacturing costs are assigned to the product, and all fixed manufacturing costs are expensed in the period incurred. Therefore, the variable costing operating income is generally less than the absorption costing operating income when inventory levels increase (production is greater than sales), as is the case here. To calculate the difference in operating income between the two costing methods, we multiply the fixed manufacturing cost per unit by the number of units produced but not sold. The difference is $44 times 16,800 units (67,200 units produced - 50,400 units sold), which equals $739,200.
Mazie Supply Co. uses the percent of accounts receivable method. On December 31, it has outstanding accounts receivable of $63,500, and it estimates that 6% will be uncollectible. Prepare the year-end adjusting entry to record bad debts expense under the assumption that the Allowance for Doubtful Accounts has: (a) a $1,080 credit balance before the adjustment. (b) a $318 debit balance before the adjustment.
Answer:
The journal entries are as follows:
(a) A $1,080 credit balance before the adjustment.
Bad Debt Expense A/c Dr. $2,730
To Allowance for Doubtful Accounts $2,730
(To record the bad debt expense)
Workings:
The credit balance of allowance for doubtful accounts will be deducted from the uncollectible accounts.
Bad Debt Expense:
= Uncollectible - Credit balance
= (6% × $63,500) - $1,080
= $3,810 - $1,080
= $2,730
(b) A $318 debit balance before the adjustment.
Bad Debt Expense A/c Dr. $4,128
To Allowance for Doubtful Accounts $4,128
(To record the bad debt expense)
Workings:
The debit balance of allowance for doubtful accounts will be added to the uncollectible accounts.
Bad Debt Expense:
= Uncollectible + Debit balance
= (6% × $63,500) + $318
= $3,810 + $318
= $4,128
Calculate the values for each of the questions. Assume that in each country there are no taxes, international trade, or inflation and that interest rates are fixed. The Italian government decides to stimulate the economy by sending checks worth $70 billion to Italian consumers. If the government spending multiplier is 1.5 , calculate the MPC to determine the final change in Italy's real GDP due to the transfer. Please give your answer as a whole number in billions of dollars. $ billion The Greek government decides to introduce new austerity measures, which reduce government direct spending by $16 billion. Greece has a marginal propensity to consume of 0.6 . What will be the final change in real GDP as a result of this decreased spending
Answer:
The answer is:
For italy: $35 billion
For Greece: -$40 billion
Explanation:
Injection into the economy = $70 billion.
Government spending multiplier is 1.5.
MPC = $70billion x 1.5
=$105 billion.
Change in Italy's real GDP due to the transfer = $105 billion - $70 billion
= $35 billion.
Greek Government.
Multiplier effect = 1 ÷ (1-MPC)
1 ÷ (1-0.6)
1÷ 0.4
-2.5.
It is negative because it is a reduction in government spending.
Therefore, the final change in real GDP as a result of this decreased spending is
-2.5 x $16 billion
= -$40 billion
An agent is employed by First Patriot Bank and Trust Company of Connecticut as a banking representative. The agent is registered in the State with a general securities license through First Patriot Securities, a separate operating subsidiary of First Patriot Holdings - the parent company of the bank. A retired couple that is making their monthly visit to the bank to deposit their social security checks asks the agent about the appropriateness of investing in either mutual funds or certificates of deposit. Which statement is TRUE regarding the actions that the agent may take when giving a response to these customers?The agent may give advice to the couple about the suitability of investing in either mutual funds or certificates of deposit
Answer:
Explanation:
Which statement is TRUE regarding the actions that the agent may take when giving a response to these customers?
The agent may give advice to the couple about the suitability of investing in either mutual funds or certificates of deposit
has outstanding 600,000 shares of $2 par common stock and 120,000 shares of no-par 6% preferred stock with a stated value of $5. Dividends have been paid in every year except the past two years and the current year. Assuming that $270,000 is distributed, and the preferred stock is cumulative and participating, how much will the common stockholders receive
Answer:
Common stockholders will receive $132,000
Explanation:
Common stock = 600,000 shares * $2 par = $1,200,000
Preferred stock = 120,000 shares * $5 stated = $600,000
Common stcok dividends = 600,000 shares * $2 par * 6% = $72,000
Preferred stock dividends = 120,000 shares * $5 stated * 6% = $36,000
As the cumulative and participating, the preferred stock holders are to be paid the dividends which were not paid in the earlier years and the preferred stock holders will participate in the excess profits.
Amount to be paid to preferred stock holders = $36,000 * 3 = $108,000
Amount to be paid to common stock holders = $72,000
Excess amount after payment of dividends = $270,000 - $108,000 - $72,000 = $90,000
$90,000 has to be prorationed between preferred stock and common stock holders.
Common stock holders will receive $90,000 * $1,200,000 / $1,800,000 = $60,000
Common stockholders will receive $72,000 + $60,000 = $132,000
Answer:
$162,000
Explanation:
Dividend distributed to preferred share is based on the predetermined rate associated with these share. When the dividend is declared preferred share dividend is paid first. The remainder is distributed between the common stockholders.
Value of Preferred share = 120,000 shares x $5 par value = $600,000
Preferred Dividend = $600,000 x 6% = $36,000
Accrued dividend for 2 years = 2 x $36,000 = $72,000
Dividend Declared = $270,000
Total preferred Dividend = $72,000 + $36,000 = $108,000
Dividend Available for Common stockholders = $270,000 - $108,000 = $162,000
Sheffield Corp. sells merchandise on account for $2700 to with credit terms of 2/10, n/30. Splish Brothers Inc. returns $600 of merchandise that was damaged, along with a check to settle the account within the discount period. What entry does Sheffield Corp. make upon receipt of the check
Answer:
Debit Bank for $2,058, Purchase Return for $600, and Discount allowed for $42; while Credit Accounts receivable for $2,700.
Explanation:
Sales after return before discount = $2,700 - $600 = $2,100
Discount allowed = $2,100 * 2% = $42
Check amount = $2,100 - $42 = $2,058
This implies that $2,058 is received in cash and the journal entries upon receipt of check will be as follows:
Details Dr ($) Cr ($)
Bank 2,058
Discount allowed 42
Purchases return 600
Accounts receivable 2,700
To record check received from and discount allowed to Splish Brothers Inc.
Pisa Pizza, a seller of frozen pizza, is considering introducing a healthier version of its pizza that will be low in cholesterol and contain no trans fats. The firm expects that sales of the new pizza will be $ 21 million per year. While many of these sales will be to new customers, Pisa Pizza estimates that 40 % will come from customers who switch to the new, healthier pizza instead of buying the original version. a. Assume customers will spend the same amount on either version. What level of incremental sales is associated with introducing the new pizza? b. Suppose that 42 % of the customers who will switch from Pisa Pizza's original pizza to its healthier pizza will switch to another brand if Pisa Pizza does not introduce a healthier pizza. What level of incremental sales is associated with introducing the new pizza in this case?
a. The incremental sales associated with introducing the new pizza under the assumption of equal spending are $8.4 million.
b. In the scenario where 42% of switchers would choose another brand, the incremental sales are $12.04 million.
Explanation:a. Incremental sales with equal spending:
Original pizza sales: Unknown, but let's call it X.
New pizza sales from new customers: 60% of $21 million = $12.6 million.
New pizza sales from switchers: 40% of X.
Total new pizza sales: $12.6 million + 0.4X.
Incremental sales: Difference between total new pizza sales and original pizza sales: ($12.6 million + 0.4X) - X = $8.4 million.
b. Incremental sales with brand switching:
Switchers from original pizza: 40% of X.
Switchers to healthier pizza: 58% of switchers = 0.58 * 40% of X = 0.232X.
Switchers to another brand: 42% of switchers = 0.42 * 40% of X = 0.172X.
New pizza sales from switchers: 0.232X.
Sales lost to another brand: 0.172X.
Total new pizza sales: $12.6 million + 0.232X.
Net incremental sales: Difference between total new pizza sales and sales lost to another brand: ($12.6 million + 0.232X) - 0.172X = $12.04 million.
Therefore, introducing the new pizza leads to higher incremental sales even when accounting for customers switching to another brand, highlighting the potential market opportunity for healthier options.
The incremental sales when introducing the new pizza are $12.6 million without considering potential loss to competitors and $16.128 million considering the potential customer switch to other brands.
To determine the incremental sales from the introduction of Pisa Pizza's new healthier pizza, we need to account for the sales cannibalization from their original pizza and potential losses to competitors.
Part A:
Assume customers will spend the same amount on either version. The firm expects $21 million in sales per year for the new pizza. Since 40% of these will come from customers switching from the original pizza, the actual incremental sales will be:
Total new sales: $21 millionCannibalization rate: 40%Sales cannibalized: $21 million × 0.40 = $8.4 millionIncremental sales: $21 million - $8.4 million = $12.6 millionPart B:
Now, if 42% of the customers who would switch to the healthier pizza instead switch to another brand if Pisa Pizza does not introduce a healthier pizza, the incremental sales calculation changes:
Total new sales: $21 millionSales lost to another brand if not introduced: $21 million × 0.42 × 0.40 = $3.528 millionRemaining cannibalized sales: $8.4 million - $3.528 million = $4.872 millionIncremental sales: $21 million - $4.872 million = $16.128 millionIn this scenario, Pisa Pizza's net incremental sales would increase due to retaining customers who would otherwise switch to competitors.
Quick-as-Lightning, a delivery service, purchased a new delivery truck for $40,000 on January 1, 2019. The truck is expected to have a useful life of ten years or 150,000 miles and an expected residual value of $3,000. The truck was driven 15,000 miles in 2019 and 13,400 miles in 2020.
1. Calculate the depreciation expense for 2019 and for 2020 under the straight-line method.
2. Calculate the depreciation expense for 2019 and for 2020 under the double-declining balance method.
3. Calculate the depreciation expense for 2021 under the double-declining balance method.
Answer:
1. $3,700
2. $8,000 and $6,400
3. $5,120
Explanation:
The computation of the depreciation expense for the years are shown below:
1) Straight-line method:
= (Original cost - residual value) ÷ (useful life)
= ($40,000 - $3,000) ÷ (10 years)
= ($37,000) ÷ (10 years)
= $3,700
In this method, the depreciation is same for all the remaining useful life
So for year 2019 and 2020 the same depreciation expense i.e $3,700 is charged separately for each year
(2) Double-declining balance method:
First we have to find the depreciation rate which is given below:
= One ÷ useful life
= 1 ÷ 10
= 10%
Now the rate is double So, 20%
In year 2019, the original cost is 40,000, so the depreciation is $8,000 after applying the 20% depreciation rate
And, in year 2020, the depreciation is
= ($40,000 - $8,000) × 20%
= $6,400
3) For 2021, it would be
= ($40,000 - $8,000 - $6,400) × 20%
= $5,120
Basically we applied the above formulas
A company's common stock shares are expected to bring a 13 % return to their investors in case of "recession" state of the economy, 6 % return in case of "normal" state of the economy, and result in a 4 % loss in case of "boom" state of the economy. The probability of "boom" is 5 % and the probability of "recession" is 45 %. Calculate the expected rate of return on this company's common stock.
Answer:
The expected rate of return is 8.65%
Explanation:
The expected return on a stock can be calculated by multiplying the return in each scenario by the probability of that scenario. This will provide the expected value of the return based on all these scenarios. Thus, the rate of return is,
Rate of return = rA * pA + rB * pB + rC * pC
Where,
r represents the return in each scenariop represents the probability of each scenarioThe probability of normal state is = 1 - 0.45 - 0.05 = 0.5
Rate of return = 0.13 * 0.45 + 0.06 * 0.5 + (-0.04) * 0.05
Rate of return = 0.0865 or 8.65%
Foyert Corp. requires a minimum $6,900 cash balance. If necessary, loans are taken to meet this requirement at a cost of 2% interest per month (paid monthly). Any excess cash is used to repay loans at month-end. The cash balance on October 1 is $6,900 and the company has an outstanding loan of $2,900. Forecasted cash receipts (other than for loans received) and forecasted cash payments (other than for loan or interest payments) follow.October November DecemberCash receipts $ 22,900 $ 16,900 $ 20,900 Cash disbursements 25,350 15,900 15,100 Required:1. Prepare a cash budget for October, November, and December.
Answer:
answer is attached
Explanation:
The correct cash budget for October, November, and December is completed.
For October:
- Beginning cash balance: $6,900
- Cash receipts: $22,900
- Cash disbursements: $25,350
- Minimum cash balance required: $6,900
The company has a cash shortfall of $25,350 - $22,900 = $2,450. To maintain the minimum cash balance, the company will need to take a loan for $2,450. The interest on this loan for October will be $2,450 * 2% = $49.00.
Ending cash balance before loan repayment: $6,900 + $22,900 - $25,350 = $4,450
Loan repayment (if any excess cash): $0 (since there is a shortfall)
Interest payment on loan: $49.00
Ending cash balance after loan repayment and interest: $4,450 - $0 + $2,450 (loan taken) - $49.00 (interest) = $6,851
For November:
Beginning cash balance: $6,851
Cash receipts: $16,900
Cash disbursements: $15,900
Minimum cash balance required: $6,900
The company has sufficient cash to meet the minimum balance without taking an additional loan. The excess cash will be used to repay the outstanding loan.
Ending cash balance before loan repayment: $6,851 + $16,900 - $15,900 = $7,851
Loan repayment: $7,851 - $6,900 = $951 (entire outstanding loan of $2,900 + interest of $49.00 from October is repaid)
Interest payment on loan: $0 (since the loan is repaid)
Ending cash balance after loan repayment and interest: $7,851 - $2,900 - $49.00 = $4,902
For December:
Beginning cash balance: $4,902
Cash receipts: $20,900
Cash disbursements: $15,100
Minimum cash balance required: $6,900
The company has sufficient cash to meet the minimum balance without taking an additional loan. The excess cash will be used to repay the outstanding loan if any.
Ending cash balance before loan repayment: $4,902 + $20,900 - $15,100 = $9,702
Loan repayment: $0 (no loan to repay)
interest payment on loan: $0 (no loan outstanding)
Ending cash balance after loan repayment and interest: $9,702
The cash budget shows that the company will have a sufficient cash balance at the end of each month to meet the minimum cash balance requirement after taking into account loans, interest payments, and excess cash used for loan repayment.
Assuming that overhead in the machining department is allocated on the basis of machine hours, and overhead in the assembly department is allocated on the basis of direct labor cost, the departmental overhead rates per unit of the related allocation bases in the Machining and Assembly Departments respectively will be:110% and $15.00.$5.00 and 50%.$5.00 and 200%.$8.00 and 50%
Question
The complete question is as follows:
Machining Assembly
Direct Labour 16,000 12,000
Direct labour cost 20,000 15,000
Machine hours 5,000 1,000
Overhead($) 25,000 30,000
Answer
Machining Assembly
Overhead absorption rate = $5 per hour 200% of labour cost
Explanation:
Overhead absorption rate is used to charged overheads to output achieved. It is calculated as follows:
OAR = Budgeted overhead / Budgeted activity
Machining Assembly
Overhead absorption rate 25,000/5000 hrs 30,000/15000 × 100
= $5 per hour 200% of labour cost
Final answer:
The overhead rate for the Machining Department is 110% based on machine hours, and the overhead rate for the Assembly Department is $15.00 per unit based on direct labor cost.
Explanation:
To determine the departmental overhead rates per unit of related allocation bases in the Machining and Assembly Departments when overhead is allocated based on machine hours for Machining and direct labor cost for Assembly, we must calculate the rates using the given data:
For Machining: Overhead is at a 110% rate, and the cost per hour is given as $24/hour.For Assembly: Overhead is $15.00 per unit when based on labor cost.The provided cost examples of labor plus machine costs ($720+$600, $960+$400, $1200+$200) do not directly relate to the overhead rates but demonstrate different allocation possibilities within a manufacturing context. Looking at the structure of the expense distribution, it is evident that allocation bases such as machine hours and labor costs are used to determine the overhead applied to each product or service.
Therefore, the departmental overhead rates per unit for the Machining Department is 110% and for the Assembly Department is $15.00 respectively.
Darrell is the owner of a furniture store. Last year, his total revenue was $525,000 and his total labor costs were $200,000. His overhead expenses, including insurance and legal fees, were $175,000. The rent on his building was $45,000. Darrell could earn $105,000 per year working at a nearby furniture distributor. If his total revenue increases to $600,000 this year and all of his other expenses are held constant, we know that his economic profit is now: Group of answer choices
Answer:
$600,000
Explanation:
Economic profit is accounting profit less implicit cost or opportunity cost.
Opportunity cost is the cost of the next best option forgone when one alternative is chosen over other alternatives.
Economic profit = Accounting profit - Opportunity cost
Accounting profit is total revenue less total cost.
Accounting profit = total revenue - total cost
Total revenue = $525,000 + $600,000 = $1,125,000.
Total cost = $175,000 + $45,000 + $200,000 = $420,000
Opportunity cost = $105,000
Accounting profit = $1,125,000 - $420,000 = $705,000
Economic profit = $705,000 - $105,000 = $600,000
I hope my answer helps you
During the year, the following selected transactions affecting stockholders' equity occurred for Navajo Corporation: a. Feb. 1 Repurchased 200 shares of the company's own common stock at $23 cash per share. b. Jul. 15 Sold 130 of the shares purchased on February 1 for $24 cash per share. c. Sept. 1 Sold 100 of the shares purchased on February 1 for $22 cash per share. Required: 1. Prepare the journal entry required for each of the above transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Answer:
Feb. 1
Common Stock $4,600 (debit)
Cash $4,600 (credit)
Jul. 15
Cash $3,120 (debit)
Common Stock $3,120 (credit)
Sept. 1
Cash $2,860 (debit)
Common Stock $2,860 (credit)
Explanation:
Feb. 1
Common Stock $4,600 (debit)
Cash $4,600 (credit)
200 shares × $23 = $4,600
Jul. 15
Cash $3,120 (debit)
Common Stock $3,120 (credit)
130 shares × $24 = $3,120
Sept. 1
Cash $2,860 (debit)
Common Stock $2,860 (credit)
130 shares × $22 = $2,860
The payroll register of Heritage Co. indicates $4,200 of social security withheld and $1,050 of Medicare tax withheld on total salaries of $70,000 for the period. Earnings of $12,000 are subject to state and federal unemployment compensation taxes at the federal rate of 0.8% and the state rate of 5.4%.
Provide the journal entry to record the payroll tax expense for the period. If an amount box does not require an entry, leave it blank.
a. Payroll Tax Expense
b. Social Security Tax Payable
c. Medicare Tax Payable
d. State Unemployment Tax Payable e. Federal Unemployment Tax Payable
Answer:
General Journal Debit Credit
Payroll Tax expense $ 5,994
Social Security tax Payable $ 4,200
Medicare Tax Payable $ 1,050
State Unemployment Tax Payable $ 648
Federal Unemployment Tax Payable $ 96
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The payroll tax expense is calculated by adding Social Security tax, Medicare tax, state unemployment tax, and federal unemployment tax. The total tax payable comes to $5,994 which is allocated among the four categories.
Explanation:In order to record the payroll tax expense for the period, we would debit the payroll tax expense for the total amount of taxes withheld. This includes Social Security, Medicare, state unemployment tax, and federal unemployment tax.
The detailed calculation of the taxes are as follows:
Social Security Tax Payable: Already provided as $4,200
Medicare Tax Payable: Already provided as $1,050
State Unemployment Tax Payable: Calculated as $12,000 * 5.4% = $648
Federal Unemployment Tax Payable: Calculated as $12,000 * 0.8% = $96
So the journal entry to record the payroll tax expense is:
Payroll Tax Expense $5,994
Social Security Tax Payable $4,200
Medicare Tax Payable $1,050
State Unemployment Tax Payable $648
Federal Unemployment Tax Payable $96
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Pretzelmania, Inc., issues 5%, 20-year bonds with a face amount of $50,000 for $44,221 on January 1, 2021. The market interest rate for bonds of similar risk and maturity is 6%. Interest is paid semiannually on June 30 and December 31. Required: 1. & 2. Record the bond issue and first interest payment on June 30, 2021. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field. Round your intermediate computations and final answers to the nearest whole dollar amount.)
Answer: Please see Explanation for answer.
Explanation:
January 01, 2021:
Cash Debit 44,221
Bonds Payable Credit 44,221
Since the bonds were sold at a discount, the entry to record the first interest payment (using straight line amortization of the premium) would be:
Interest expense ($44,221× 6% × 6months/12months ) = $1,326.63 =$1,327
Cash is given as ($50,000 × 5% ×6months /12months) = $1,250
June 30, 2021:
Interest Expense Debit---$1,326.63 Bonds Payable Credit $77
Cash Credit $1,250
The bond issued by Pretzelmania, Inc. is recorded by debiting Cash for $44,221, and crediting Bonds Payable for $50,000 and Discount on Bonds Payable for $5,779. The first interest payment on June 30, 2021, is recorded by debiting Interest Expense for $1,394.48 and then crediting Cash for $1,250 and Discount on Bonds Payable for $144.48.
Explanation:The subject of this question refers to accounting for bonds issued at a discount, a topic in Business studies. Pretzelmania, Inc. issued a 5%, 20-year bond with a face value of $50,000 but they sold it for $44,221, meaning it was sold at a discount because the market interest rate was higher (6%) than the bond's coupon rate (5%).
1. Record the bond issue:
When the bond was issued on January 1, 2021, Pretzelmania, Inc. received cash of $44,221. The journal entry would be:
Debit: Cash $44,221
Credit: Bonds Payable $50,000
Credit: Discount on Bonds Payable $5,779 ($50,000 - $44,221 = $5,779 discount)
2. Record the first interest payment:
The company will need to pay interest semiannually. The payment on June 30, 2021, will be calculated as 5% of face value divided by 2 ($50,000 * 5% / 2 = $1,250). Also, they have to amortize part of the discount. The interest expense for the period will be the semiannual payments plus the discount divided by the number of payments ($5,779 / 40 payments = $144.48). The journal entry will be:
Debit: Interest Expense $1,394.48 ($1,250 + $144.48)
Credit: Cash $1,250
Credit: Discount on Bonds Payable $144.48.
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Which of the following is a disadvantage of providing flexibility in benefit choice? Group of answer choices There is a risk that these plans would increase the attrition rate. The flexible benefits plans are typically discriminatory in nature. There is a risk that employees may choose an inappropriate benefits package. The flexible benefits plans do not cover higher-risk employees.
The main disadvantage of providing flexibility in benefit choice is that -There is a risk that employees may choose an inappropriate benefits package.
Explanation:
Let us consider the various options given:-
There is a risk that these plans would increase the attrition rate:The flexibility benefit package does not lead to an increase in attrition rate rather it is a measure to hold back the employees The flexible benefits plans are typically discriminatory in nature:The plans are not discriminatory because it is up to the disposal of the employees to select a flexible benefit plan of their choice.e nature of the flexible benefit plan cannot be discriminatory The flexible benefits plans do not cover higher-risk employees-No such option is mentioned in the flexible benefit planThus we can say that -The main disadvantage of providing flexibility in benefit choice is that -There is a risk that employees may choose an inappropriate benefits package.
The disadvantage of providing flexibility in benefit choice is the risk of employees choosing an inappropriate benefits package.
Explanation:A disadvantage of providing flexibility in benefit choice is that there is a risk that employees may choose an inappropriate benefits package. When employees have the freedom to select their own benefits, they may not have the knowledge or understanding to make informed decisions about which options are most suitable for their needs. This can result in employees choosing benefits that do not meet their requirements or are not cost-effective.
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This year William provided $4,200 of services to a large client on credit. Unfortunately, this client has recently encountered financial difficulties and has been unable to pay William for the services. Moreover, William does not expect to collect for his services. William has "written off" the account and would like to claim a deduction for tax purposes.a. What amount of deduction for bad debt expense can William claim this year if he uses the accrual method?b. What amount of deduction for bad debt expense can William claim this year if he uses the cash method?
Answer:
a. $,4,200
b. $0
Explanation:
a. What amount of deduction for bad debt expense can William claim this year if he uses the accrual method?
Account receivable that is partially or totally uncollectible can be claimed under accrual method since income and losses are recognized when earned or uncured.
Since there is no expectation that William will collect for his services which he has written its account receivable off, the full amount of $4,200 which he has included in the income is allowed to deducted by him under accrual method.
b. What amount of deduction for bad debt expense can William claim this year if he uses the cash method?
No amount of bad debt can be claimed under cash method since William has not recognized the income for his services in the income.
Therefore, $0 will be claimed.
Swifty Industries had sales in 2016 of $7,520,000 and gross profit of $1,261,000. Management is considering two alternative budget plans to increase its gross profit in 2017. Plan A would increase the selling price per unit from $8.00 to $8.40. Sales volume would decrease by 10% from its 2016 level. Plan B would decrease the selling price per unit by $0.50. The marketing department expects that the sales volume would increase by 115,000 units. At the end of 2016, Swifty has 45,000 units of inventory on hand. If Plan A is accepted, the 2017 ending inventory should be equal to 5% of the 2017 sales. If Plan B is accepted, the ending inventory should be equal to 66,000 units. Each unit produced will cost $1.80 in direct labor, $1.40 in direct materials, and $1.20 in variable overhead. The fixed overhead for 2017 should be $1,553,000.
1. Prepare a sales budget for 2017 under each plan.
2. Prepare a production budget for 2017 under each plan.
3. Compute the production cost per unit under each plan.
4. Compute the gross profit under each plan.
5. Which plan should be accepted?
Answer:Kindly check explanation
Explanation:
2016 volume = 7520000 ÷ 8 = 940,000
Plan A volume = 940,000 - (0.1×940000) = 846000
Plan A selling price = $8.40
Plan B selling price = $(8 - 0.5) = $7.5
Plan B volume = $940,000 + 115,000 = 1,055,000
SALES BUDGET ;
—-------------------------- Plan A. PlanB
Expected unit sale-846,000; 1055000
Unit selling price - $8.40. ; $7.50
Total sales - $7,106,400; $7,912,500
PRODUCTION BUDGET ;
------------------------------- PlanA. PlanB
Expected unit sales- 846000. 1055000
Add:
ending inventory - 42,300. 66,000
Total required unit - 888300. 1,121,000
Less:
Beg. finished goods - 45000. 45000
Tot. required goods - 843,300. 1,076,000
C.
Variable cost = $(1.80+1.40+1.20) = $4.40
Variable cost(PlanA) = $4.40 × 843300 = $3,710,520
Variable cost(PlanB) = $4.40 × 1076000 = $4,734,400
--------------------------------- PlanA. PlanB
Variable cost 3,710,520. 4,734,400
Fixed cost 1553000. 1553000
Total cost(c) 5,263,520. 6,287,400
Total unit(u). 843,300. 1,076,000
Unit cost (c/u) $6.24. $5.84
D.) GROSS PROFIT
Cost of goods sold(PlanA) = $6.24 × 846000 = $5,279,040
Cost of goods sold(PlanB) = $5.84 × 1055000 = $6,161,200
--------------------------------- PlanA. PlanB
SALES. $7,106,400 $7,912,500
Cost of goods sold. $5,279,040. $6,161,200
Gross profit. $1,827,360 $1,751,300
E.) Plan A should be accepted due to it's higher gross profit margin
Recall on February 1, Derrick Company established a $200 petty cash fund. On February 15, when the fund balance reached $7, the petty cash custodian prepared a petty cash report that summarized receipts for postage ($140) and printing ($54).
Prepare the necessary journal entry.
Answer:
Dr Printing Expense $140
Dr Postage Expense $54
Cr Cash Over and Short $1
Cr Cash $193
Explanation:
Derrick Company
Journal entry
Dr Printing Expense $140
Dr Postage Expense $54
Cr Cash Over and Short $1
Cr Cash $193
Cash over and short
Receipts for postage ($140) printing ($54)
Fund balance $7
$140+$54+$7=$201- 200 petty cash fund
=$1
The question pertains to creating a journal entry for a business's petty cash fund. Derrick Company spent $194 out of its $200 petty cash fund, which needs to be replenished. The journal entry will debit Postage Expense for $140, debit Printing Expense for $54, and credit Cash for $194.
Explanation:The subject of this question relates to the creation of a journal entry regarding a petty cash fund for a business entity, the Derrick Company. The Derrick Company established a $200 petty cash fund on February 1. On February 15, the fund balance had dwindled to $7 and the petty cash custodian prepared a report indicating expenditures for postage ($140) and printing ($54).
Using this information, we can create the necessary journal entry. The total spent from the petty cash fund is $194 ($140 for postage and $54 for printing). This amount needs to be replenished. The appropriate journal entry will be: debit Postage Expense for $140, debit Printing Expense for $54, and credit Cash for $194.
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Calculate the unemployment rate and the labor force participation rate in the following case: Unemployed, 10 million; adult population, 200 million; employed, 90 million. The unemployment rate is 5%, and the labor force participation rate is 55%. The unemployment rate is 5%, and the labor force participation rate is 10%. The unemployment rate is 10%, and the labor force participation rate is 50%. The unemployment rate is 50%, and the labor force participation rate is 10%.
The unemployment rate is calculated as the ratio of unemployed individuals to the total labor force, which in this case is 10%. The labor force participation rate is calculated as the ratio of the total labor force to the total adult population, which is 50% in this case.
To calculate the unemployment rate and the labor force participation rate, we need to understand these terms. The unemployment rate is the percentage of the labor force that is jobless and actively seeking employment. The labor force participation rate is the percent of the adult population that is either employed or actively looking for work.
In this case, the labor force is the sum of the unemployed (10 million) and the employed (90 million), which totals to 100 million. Hence, the unemployment rate is the unemployed (10 million) divided by the labor force (100 million). So, the unemployment rate is 10%.
Similarly, the labor force participation rate is calculated by dividing the labor force (100 million) by the adult population (200 million), resulting in a labor force participation rate of 50%.
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Final answer:
The unemployment rate is calculated as 10% and the labor force participation rate is 50% in the given scenario.
Explanation:
To calculate the unemployment rate and the labor force participation rate, we will use the following definitions and formulas:
The labor force is the sum of employed and unemployed individuals.The adult population includes everyone who is of working age, employed or otherwise.The unemployment rate is the number of unemployed individuals divided by the labor force, multiplied by 100 to get the percentage.The labor force participation rate is the labor force divided by the adult population, multiplied by 100 to convert to a percentage.
In this scenario, we have:
Unemployed: 10 millionAdult population: 200 millionEmployed: 90 millionFirst, let's calculate the labor force:
Labor force = employed + unemployed = 90 million + 10 million = 100 millionNext, we calculate the unemployment rate:
Unemployment rate = (unemployed / labor force) × 100 = (10 million / 100 million) × 100 = 10%Finally, we determine the labor force participation rate:
Labor force participation rate = (labor force / adult population) × 100 = (100 million / 200 million) × 100 = 50%The correct answers are: the unemployment rate is 10%, and the labor force participation rate is 50%.
On January 1, 2021, the Shagri Company began construction on a new manufacturing facility for its own use. The building was completed in 2022. The only interest-bearing debt the company had outstanding during 2021 was long-term bonds with a book value of $11,100,000 and an interest rate of 9%. Construction expenditures incurred during 2021 were as follows:
January 1 $500,000
March 1 600,000
July 31 480,000
September 30 600,000
December 31 300,000
Required:
Calculate the amount of interest capitalized for 2016.
Answer:
$1,120,500
Explanation:
January 1 $500,000*12/12*9%=$45,000
March 1 $600,000*10/12*9%=$45,000
July 31 $480,000*5/12*9%=$18,000
September 30 $600,000*3/12*9%=$13,500
December 31 $300,000*0/12=0
Interest on Bonds Outstanding $11,100,000*9%=$999,000
Total Interest to be capitalized=$1,120,500
When Padgett Properties LLC was formed, Nova contributed land (value of $340,500 and basis of $85,125) and $170,250 cash, and Oscar contributed cash of $510,750. Both partners received a 50% interest in partnership profits and capital. a. How is the land recorded for § 704(b) book capital account purposes? For § 704(b) book capital account purposes, Padgett records the land at $ . b. What is Padgett's tax basis in the land? $ c. If Padgett sells the land several years later for $510,750, how much tax gain will Nova and Oscar report? Nova reports a $ gain and Oscar's gain is $ .
Answer:
See the explanation below:
Explanation:
a. How is the land recorded for § 704(b) book capital account purposes? For § 704
Debit cash with $170,250
Debit land with $340,500
Credit Nova's Capital account with $510,750
b. What is Padgett's tax basis in the land?
Padgett's tax basis in the land is $85,125 that is carried over.
c. If Padgett sells the land several years later for $510,750, how much tax gain will Nova and Oscar report?
Built in gain = $340,500 - $85,125 = $255,375
Gain from sale = $510,750 - $340,500 = $170,250
Share of gain from sale = $170,250 * 50% = $85,125
Gain to report by Nova = Built in gain + Share of gain from sale = $255,375 + $85,125 = $340,500
Gain to report by Oscar = Share of gain from sale = $170,250 * 50% = $85,125
Rusthe Inc. uses a periodic inventory system. Its records show the following for the month of May, in which 74 units were sold. Date Explanation Units Unit Cost Total Cost May 1 Inventory 30 $9 $270 15 Purchase 25 10 250 24 Purchase 38 11 418 Total 93 $938 Collapse question part (a) Calculate the weighted-average unit cost. (Round answer to 3 decimal places, e.g. 5.125.) Weighted-average unit cost
Answer:
$10.086 Per units
Explanation:
Weighted-average unit cost
=Inventory on May 1 + Purchase on May 15 + Purchase on May 24 ÷ Total number of units
$270+$250+$418÷30+25+38
=$938÷ 93
=$10.086 per units
Therefore the WEIGHTED AVERAGE UNIT COST is $10.086 per units
(a) For calculating weighted-average cost, the cost of goods sold is divided by units available for sale. The weighted-average unit cost for Rusthe. Inc is $10.086 per units.
The COGS and inventory amounts are determined using a weighted average in the Weighted Average Cost (WAC) technique of inventory valuation in accounting. The weighted average cost method divides the price of the items up for grabs by the quantity of them. Under IFRS accounting as well as GAAP, the WAC approach is acceptable.
The weighted-average unit cost is calculated as follows:
Inventory on May 1 + Purchase on May 15 + Purchase on May 24 ÷ Total number of units
= ($270+$250+$418) ÷30+25+38
=$938÷ 93
=$10.086 per units
Therefore $10.086 is the weighted-average cost per unit.
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7. Problems and Applications Q7 Your cousin Vinnie owns a painting company with fixed costs of $200 and the following schedule for variable costs: Quantity Variable Cost Average Fixed Cost Average Variable Cost Average Total Cost (Houses Painted per Month) (Dollars) (Dollars) (Dollars) (Dollars) 1 10 2 20 3 40 4 80 5 160 6 320 7 640 The efficient scale is houses.
Answer:
4 houses per month.
Explanation:
Note: See the attached file for the calculation.
Efficient scale of production is can be described as the number of units of production where average total cost (ATC) of production is lowest.
From the attached file, the ATC of $70 is the lowest at 4 houses per month and 4 houses per month is therefore the efficient scale.
The mars climate orbiter crashed on the surface of mars becausea. one program output thrust in terms of foot-pounds, and another program expected thrust to be expressed in terms of newtons.b. the probe lost contact with the jet propulsion laboratory when it entered the martian atmosphere.c. before programmers went on strike at subcontractor lockheed martin, one of them sabotaged the flight control software.d. a bug in the computer program caused the vehicle to consume too much fuel on the way to mars, leaving an inadequate supply for landing.e. the extreme cold of deep space caused the computer to crash.
Answer:
The correct answer is A. The Mars Climate Orbiter crashed on the surface of Mars because one program output thrust in terms of foot-pounds, and another program expected thrust to be expressed in terms of newtons.
Explanation:
The Mars Climate Orbiter was NASA’s unsuccessful mission to study the Martian climate, part of the Mars Surveyor 98 program. The MCO was created as a satellite-translator for the Mars Polar Lander lander, and after the latter ceased to function, it was supposed to study the Martian climate.
The Mars Climate Orbiter was destroyed when a navigation error caused the probe to be improperly elevated as it entered orbit. The vehicle was destroyed by the friction and stresses in Mars' atmosphere. An investigation showed that some data for the rocket system were calculated in English units (pound-force-second) while the navigation team expected SI units (Newton-second).
The reason the Mars Climate Orbiter crashed was that a. one program output thrust in terms of foot-pounds, and another program expected thrust to be expressed in terms of newtons.
The Mars Climate Orbiter:
Was expected to study the climate of Mars to gain more insight on the planet Crashed when there was a problem with the thrustersThe reason the problem develop was because there was a mismatch in the mass expectation when one program measured mass in foot-pounds and the other in newtons.
In conclusion, option A is correct.
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