Answer:
He should order 681.66 gallons to minimize the cost, but he have a 500 gallon tank he can fill, so he will order 500 gallons every time, to minimize the cost.
Explanation:
According to the given data we have the following:
h = handling cost per unit = $ 9
S = Ordering cost per order = $20.5
He uses 8,500 gallons a month, therefore, the annual demand D= 8,500*12 = 102,000 gallons .
Therefore, the optimal ordering quantity would be= [ (2*D*S) / h ]1/2
=681.66 units
He should order 681.66 gallons to minimize the cost, but he have a 500 gallon tank he can fill, so he will order 500 gallons every time, to minimize the cost.
On December 31, 2017, Oakbrook Inc. rendered services to Beghun Corporation at an agreed price of $102,049, accepting $40,000 down and agreeing to accept the balance in four equal installments of $20,000 receivable each December 31. An assumed interest rate of 11% is imputed. Prepare an amortization schedule. Assume that the effective-interest method is used for amortization purposes.
Answer:
Loan Amortization Table is attached with this answer, please find it
Explanation:
First of all we calculate the Loan Payment per period
Loan Payment per year = r ( PV ) / 1 - ( 1 + r )^-n
Loan Payment per year = 0.11 ( (102,049 - 40,000 ) / 1 - ( 1 + 0.11 )^-4
Loan Payment per year = $6,825.39 / 0.341269 = 20,000 per year
Suppose that Tan Lines' common shares sell for $20 per share, are expected to set their next annual dividend at $1.00 per share, and that all future dividends are expected to grow by 5 percent per year, indefinitely. If Tan Lines faces a flotation cost of 10 percent on new equity issues, what will be the flotation-adjusted cost of equity
Answer:
Cost of equity = 10.6%
Explanation:
According to the dividend valuation, the value of a stock is the present value of expected future dividends discounted at the required rate of return.
The model can me modified to determined the cost of equity having flotation cost as follows:
Cost of equity = D(1+r )/P(1-f) + g
d- dividend, p- price of stock , f - flotation cost , - g- growth rate in dividend
D-1.00, p - 20, f- 10%, g- 5%
Applying this to the question;
cost of equity - 1.00/(20×(1-0.1) )+ 0.05
= 10.6%
Cost of equity = 10.6%
Final answer:
The flotation-adjusted cost of equity for Tan Lines can be approximated by adding the flotation cost percentage to the cost of equity calculated using the Dividend Discount Model. For Tan Lines, this results in an approximate cost of equity of 11% when considering the 10% flotation cost.
Explanation:
The student is asking about the flotation-adjusted cost of equity for a company's common shares. To calculate this, we need to use the Dividend Discount Model (DDM), which requires the next expected dividend, the growth rate of the dividends, and the required rate of return for equity investors. However, because the company faces a flotation cost, we must adjust the cost of equity to account for this.
The formula for the cost of equity without flotation costs is:
Cost of equity = (Next annual dividend / Current price per share) + Growth rate. In this case, it would be ($1.00 / $20) + 5%, resulting in a cost of equity of 10%.
To adjust for the 10% flotation cost, we must aim for a total return that compensates for both the required rate of return and the flotation cost. Since the flotation cost reduces the amount of funds received from issuing new shares, the company must earn a higher return to satisfy investors' required rate of return.
An approximate way to adjust for flotation costs is to increase the original cost of equity by the percentage of the flotation cost. In this case, that would be 10% of the cost of equity without flotation costs. Therefore, the flotation-adjusted cost of equity would be approximately 10% higher than the original 10%, making it about 11%.
Sam, Sue, and Shelley formed a partnership. Sam received a 50 percent interest in the partnership in exchange for land with an adjusted basis to him of $30,000 and a fair market value of $50,000. Sue received a 25 percent interest in the partnership in exchange for $25,000 of cash. Shelley received a 25 percent interest in the partnership in exchange for $25,000 of cash. Three years after the date of contribution, the land contributed by Sam was sold by the partnership to an unrelated third party for $90,000.
Required:
1. How much gain was required to be allocated to Sam as a result of the sale by the partnership?
a. $20,000.
b. $30,000.
c. $40,000.
d. $60,000.
Answer:
b. $30,000.
Explanation:
Total Gain $90,000
Less adjusted basis $30,000
Balance $60,000
Share in the partnership (50%×$60,000) $30,000
Therefore the gain that was required to be allocated to Sam as a result of the sale by the partnership will be $30,000
As a separate matter from the special order, assume the company’s inventory includes 1,000 units of this product that were produced last year and that are inferior to the current model. The units must be sold through regular channels at reduced prices. What unit cost is relevant for establishing a minimum selling price for these units?
Answer:
variable selling and administrative costs
Explanation:
There are 10,000 units left which the company may choose to ignore directly or try to sell them at very discounted prices. In order to establish a minimum price, you must consider that any construction costs are sinking and that the selling price should include at least administrative and selling costs. Manufacturing costs are considered a loss for accounting purposes, so the company must decide whether to sell them directly or ignore them directly (or donate them, depending on the type).The relevant unit cost for establishing a minimum selling price for the inferior units is the average cost per unit, which is $26.
Explanation:
The relevant unit cost for establishing a minimum selling price for the inferior units is the average cost per unit.
In the given information, it states that the firm is making losses when producing five units at an average cost of $26 per unit and a price of $25 per unit. This means that for each unit produced, the firm is losing $1. Therefore, the average cost of $26 per unit is the relevant unit cost that should be taken into account when establishing a minimum selling price for these units.
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Vintage Audio Inc. manufactures audio speakers. Each speaker requires $115 per unit of direct materials. The speaker manufacturing assembly cell includes the following estimated costs for the period: Speaker assembly cell, estimated costs: Labor $48,710 Depreciation 6,530 Supplies 2,380 Power 1,780 Total cell costs for the period $59,400 The operating plan calls for 165 operating hours for the period. Each speaker requires 15 minutes of cell process time. The unit selling price for each speaker is $312. During the period, the following transactions occurred: Purchased materials to produce 750 speaker units. Applied conversion costs to production of 715 speaker units. Completed and transferred 685 speaker units to finished goods. Sold 655 speaker units. There were no inventories at the beginning of the period. a. Journalize the summary transactions (1)-(4) for the period. Round the per unit cost to the nearest cent and use in subsequent computations. If an amount box does not require an entry, leave it blank. 1. 2. 3. 4. Sale 4. Cost
Answer:
1. Purchase materials to manufacture 750 speakers
Debit Raw and In Process Inventory $86,250
Credit Accounts payable $86,250
2. Conversion costs to 715 units
Debit Raw and In Process inventory $64,350
Credit Conversion costs $64,350
3.Completed and transferred 665 units to Finished Goods
Debit Finished Goods Inventory $136,325
Credit Raw and In Process Inventory with $136,325
4. Sales of 655 units
Debit Account receivable $204,360
Credit Sales $204,360
5. Cost of Goods sold - 655 units
Debit Cost of Goods sold $134,275
Credit Finished Goods inventory $134,275
Closing balance of Raw & In process Materials = $14,275
Closing balance of Finished Goods inventory = $2,050
Explanation:
Vintage Audio Inc.
Cell process time = 15 minutes per speaker
Conversion cost for 165 operating hours = $59,400.
Units produced in 165 hours = (165hrs x 60mins) / 15
= 660 units
Conversion costs per Unit = $59,400 / 660 units = $90
Refer to the attached for very detailed presentation of answers
On June 13, the board of directors of Siewert Inc. declared a 2-for-1 stock split on its 60 million, $2.00 par, common shares, to be distributed on July 1. The market price of Siewert common stock was $20 on June 13.Prepare a journal entry that summarizes the declaration and distribution of the stock split if it is to be effected in the form of a 100% stock dividend. What is the par per share after the split
Answer:
No journal is needed
Par value is now $1
Explanation:
There is journal entry for stock split no new funds were received from stockholders and the fact that the equity stockholders capital remain the same after the stock split.
It is a mere book redenomination where the number of outstanding shares in issue is increased while the par value is reduced proportionally.
In essence a stock split of 2 for 1 means one share is added to existing one and the two shares are now priced at the value of one previously
The par value after stock split=1/2*$2=$1
Gipple Corporation makes a product that uses a material with the quantity standard of 8.2 grams per unit of output and the price standard of $6.90 per gram. In January the company produced 4,300 units using 25,770 grams of the direct material. During the month the company purchased 28,300 grams of the direct material at $7.00 per gram. The direct materials purchases variance is computed when the materials are purchased. The materials price variance for January is:
Answer:
Material price variance 2830 unfavorable
Explanation:
Material price variance
A material price variance occurs where materials are purchased at a price either lower or higher than the standard price. A favourable variance is recorded where the actual total cost of materials is lower that the standard cost. While an adverse variance implies the opposite
Standard material cost of 2 $
28,300 grams should have cost (28,300×$6.90) = 195270
but did cost (actual cost - 28,300×$7.00)= 198100
Material price variance 2830 unfavorable
Mary purchased a 10-year par value bond with semiannual coupons at a nominal annual rate of 4% convertible semiannually at a price of 1021.50. The bond can be called at par value 1100 on any coupon date starting at the end of year 5. What is the minimum yield that Mary could receive, expressed as a nominal annual rate of interest convertible semiannually?
To find Mary's minimum yield on a 10-year par value bond with 4% semiannual coupons, we must evaluate both the yield to maturity and the yield to call. The minimum yield is the lower of the two, and it requires solving for the internal rate of return that equates cash flows to the purchase price, adjusting for whether the bond is called or held to maturity.
Explanation:Mary purchased a 10-year par value bond with semiannual coupons at a nominal annual rate of 4% convertible semiannually at a price of 1021.50. The bond may be called starting at the end of year 5 for a par value of 1100. To determine the minimum yield Mary could receive, expressed as a nominal annual rate of interest convertible semiannually, we would need to consider two scenarios: if the bond is held to maturity and if the bond is called at the earliest date possible.
For holding to maturity at 10 years, we calculate the yield based on the purchase price, semiannual interest payments, and face value redemption. But for an early call at 5 years, we calculate based on receiving par value at the call date plus interest payments up to that point. The minimum yield would be the lower of the two calculated yields since the company could decide to call the bond early if interest rates decline, meaning the yield to call could potentially become the realized yield.
Calculating the yield involves finding the internal rate of return (IRR) that equates the present value of expected cash flows from the bond (interest payments plus principal repaid) to the purchase price. This calculation requires a financial calculator or software capable of solving for IRR. The yield to maturity might differ from the yield to call, with the latter being relevant if the bond is repurchased by the issuer at the call date. The yield to call calculation must account for the bond being redeemed at 1100 instead of the face value, and thus yields a different return than holding until maturity.
It costs Lil Beasty Company $17 of variable costs and $3 of fixed costs to produce its product. The company currently has unused capacity. The product sells for $25. Loner Industries offers to purchase 5,000 units at $19 each. In the deal, Lil Beasty will incur special shipping costs of $1.50 per unit. If the special offer is accepted and produced with unused capacity, net income will:
Answer:
$2,500 Increase
Explanation:
Lil Beasty Company
Variable cost per unit ($17 + $1.50) $18.50
Income per unit ($19 – $18.50) $0.50
The total increase in net income ($.50 X 5,000 units) $2,500
Therefore we have increase $2,500 meaning If the offer is accepted with unused capacity, net income will increase by $2,500. The variable cost per unit will be $18.50 ($17 + $1.50); the income per unit is $.50 ($19 – $18.50); and the total increase in net income will be $2,500 ($.50 X 5,000 units)
Consider the market for a breakfast cereal. The cereal's price is initially $3.60 and 64 thousand boxes are demanded per week. The company that produces the cereal is considering raising the price to $4.10. At that price, consumers would demand 59 thousand boxes of cereal per week. What is the price elasticity of demandLOADING... between these prices using the midpoint formulaLOADING...? The price elasticity of demand using the midpoint formula is nothing. (Enter your response as a real number rounded to two decimal places.)
Answer:
The Price elasticity of demand is -0.63
Explanation:
From the question,
Q1=64
Q2=59
P1=3.60
P2=4.10
%Change in Quantity = Q2-Q1 X 100 / [(Q2+Q1) / 2]
=59-64 X 100 / [(59+64) / 2]
=-5 / [123/2] X 100
=-5/61.5 X 100
=-500/61.5
=-8.13%
%Change in Price= P2-P1 X 100 / [(P2+P1) / 2]
=4.10-3.60 X 100 / [(4.10+3.60) / 2]
=0.50/ [7.7/2] X 100
=0.50/3.85 X 100
=50/3.85
=12.987%
Therefore Price elasticity of demand = -8.13/ 12.99
=-0.625
=-0.63
Final answer:
The price elasticity of demand for the breakfast cereal, calculated using the midpoint formula, is approximately -0.63, which suggests that the demand is inelastic.
Explanation:
To calculate the price elasticity of demand for the breakfast cereal using the midpoint formula, we'll need to follow these steps:
In this case, the initial price is $3.60 with a demand of 64 thousand boxes, and the new price is $4.10 with a demand of 59 thousand boxes.
Therefore, the price elasticity of demand is approximately -0.63.
On January 1, Year 1, Abbott Company granted 92,000 stock options to certain executives. The options are exercisable no sooner than December 31, Year 3, and expire on January 1, Year 7. Each option can be exercised to acquire one share of $1 par common stock for $14. An option-pricing model estimates the fair value of the options to be $5 on the date of grant. What is the amount of compensation expense for Year 1? (Round your answer to the nearest dollar amount.)
Answer:
$153,333
Explanation:
The computation of the compensation expense for the year 1 is shown below:
= (Number of Stock options granted × fair value of the options) ÷ (number of years)
= (92,000 stock options × $5) ÷ 3 years
= $460,000 ÷ 3 years
= $153,333
By applying the above formula we can get the compensation expense for the year 1
The year-end 2018 balance sheet of Brandex Inc. listed common stock and other paid-in capital at $1,400,000 and retained earnings at $3,700,000. The next year, retained earnings were listed at $4,000,000. The firm’s net income in 2019 was $930,000. There were no stock repurchases during the year. What were the dividends paid by the firm in 2019?
Answer:
The firm paid $630000 dividends in 2019
Explanation:
Retained earnings is the amount of net income that is not distributed to stockholders and is ploughed back into the business. It is a capital reserve account and appears in the equity section of the Balance Sheet. To determine the amount of Dividends, we will trace the change in Retained earnings and deduct the increase in retained earnings amount from the Net Income to arrive at dividends for the year.
Increase in Retained earnings = 4000000 - 3700000 = $300000
Thus, out of the Net Income of $930000 earned in 2019, $300000 was transferred to retained earnings. The remaining was paid as dividends.
The dividends in 2019 are = 930000 - 300000 = $630000
Which of the following activities are prohibited by the Clayton Act when they lead to less competition? Each of these answers is correct. A firm acquires a major percentage of the stocks of a competing firm. A director from one business sits on the board of a competing firm. A buyer is forced to buy multiple products from a producer in order to get a desired product.
Answer: All of the Above
Explanation:
The Clayton Act of 1914 was passed to curb unfair business practices as well as to protect the rights of labour.
Some practices that were prohibited when they led to less competition include,
- A firm acquiring a major percentage of the stocks of a competing firm because this could signify an amalgamation of efforts on the part of both firms and they could therefore have some control over Pricing.
-A director from one business sitting on the board of a competing firm because this could lead to cooperating or Corperate espionage.
- A buyer is forced to buy multiple products from a producer in order to get a desired product is expressly forbidden.
Condensed financial data of Culver Company for 2020 and 2019 are presented below.
CULVER COMPANY
COMPARATIVE BALANCE SHEET
AS OF DECEMBER 31, 2020 AND 2019
2020 2019
Cash $1,830 $1,160
Receivables 1,750 1,270
Inventory 1,580 1,860
Plant assets 1,900 1,690
Accumulated depreciation (1,190 ) (1,150 )
Long-term investments (held-to-maturity) 1,280 1,400
$7,150 $6,230
Accounts payable $1,220 $920
Accrued liabilities 210 250
Bonds payable 1,410 1,520
Common stock 1,910 1,730
Retained earnings 2,400 1,810
$7,150 $6,230
CULVER COMPANY
INCOME STATEMENT
THE YEAR ENDED DECEMBER 31, 2020
Sales revenue $6,930
Cost of goods sold 4,670
Gross margin 2,260
Selling and administrative expenses 940
Income from operations 1,320
Other revenues and gains Gain on sale of investments 80
Income before tax 1,400
Income tax expense 550
Net income 850
dividends 260
Income retained in business $590
Additional information: During the year, $70 of common stock was issued in exchange for plant assets. No plant assets were sold in 2020.
Prepare a statement of cash flows using the direct method.
Answer:
The answer is attached
Explanation:
As the income tax expense is given but payable of income tax is not identified therefore differential impact taken in cash paid to suppliers.
This detailed answer explains how to prepare a statement of cash flows using the direct method based on Culver Company's financial data for the year 2020.
Statement of Cash Flows for Culver Company:
Using the direct method, we start with:
Cash collected from customers ($6,930 - $4,670 = $2,260)
Cash paid for operating expenses ($940)
Cash paid for income taxes ($550)
Cash paid for dividends ($260)
Net cash provided by operating activities ($2,260 - $940 - $550 - $260 = $510)
Cash paid for long-term investments (held-to-maturity) ($1,400 - $1,280 = $120)
Net cash used in investing activities ($120)
Net increase in cash = Net cash provided by operating activities - Net cash used in investing activities = $510 - $120 = $390
Red Rock Bakery purchases land, building, and equipment for a single purchase price of $580,000. However, the estimated fair values of the land, building, and equipment are $204,000, $408,000, and $68,000, respectively, for a total estimated fair value of $680,000. Required: Determine the amounts Red Rock should record in the separate accounts for the land, the building, and the equipment.
Answer:
Land ($174,000), building ($348,000) and equipment ($58,000)
Explanation:
This is a case of a basket purchase. Basket purchase is usually a purchase of a group of asset. This purchase usually comes with a reduced price when compared to the individual asset's market value. Therefore, the cost of each asset would be allocated based on the individual's asset proportionate market value
Asset Estimated Fair Value Percentage Allocated Cost
(a) (b) (c) = (b)/(d)*100 (e) = (c) * $580,000
Land $204,000 30% $174,000
Building $408,000 60% $348,000
Equipment $68,000 10% $58,000
Total (d) $680,000 $580,000
On the basis of this information, which of the following statements is CORRECT? a. Prestopino's cash on the balance sheet at the end of the current year must be lower than the cash it had on the balance sheet at the previous year. b. Prestopino had negative net income in the current year. c. Prestopino had positive net income in the current year, but its income was less than its previous year's income. d. Prestopino's cash flow provided by operations in the current year must be higher than in the previous year. e. Prestopino's depreciation expense in the current year was less than $150,000.
Answer:
b. Prestopino had negative net income in the current year
Explanation:
Retained earnings at the end of previous year were $700,000, but retained earnings at the end of current year had declined to $320,000.
• The company does not pay dividends.
• The company's depreciation expense is its only non-cash expense; it has no amortization charges.
• The company has no non-cash revenues.
• The company's net cash flow (NCF) for current year was $150,000.
On the basis of this information, which of the following statements is CORRECT? Prestopino had negative net income in the current year
Prestopino DECPRECIATION expense in the current year was less than $150,000 and Prestopino had postive net income in the currnet year however, this income was less than it was in the previous year income.
Prestopino NCF in the current year must be higher than its NCF in the previous year and it cash on the balance at the end of the year must be lower than the cash it had on the balance sheet at the end of previous year
The original sources of variation coming from . can cause gene frequencies to change in a if the immigrants have gene frequencies compared to the host . Then by genetic that enhance reproduction become and remain more common in successive of a . Under certain conditions, that at one time could may lose that capability, thus their adaptations into particular niches. If continues, it may result in the appearance of new species.
Answer:
The ultimate source of reproduction is mutation.
(Mutation is the only source to bring variation in genotypic frequencies in a population)
What causes gene frequencies to change in a population if the immigrants have different gene frequencies as against to the host population is called Migration.
Explanation:
Kindly find an attached image diagrams that explains more of it.
Hoffman Corporation issued $55 million of 8%, 10-year bonds at 102. Each of the 55,000 bonds was convertible into one share of $1 par common stock. Prepare the journal entry to record the issuance of the bonds. (Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5). If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Answer:
Dr Cash 56.1
Cr Premium on bonds payable 1.1
Cr Convertible bonds payable 55.0
Explanation:
Hoffman Corporation
Journal entry
Dr Cash 56.1
Cr Premium on bonds payable 1.1
Cr Convertible bonds payable 55.0
GAAP requires that the entire issue price of convertible bonds be recorded as debt, precisely the same way, as for nonconvertible bonds.
Therefore:
Cash (102% × $55 million) = $56.1 million
Final answer:
Hoffman Corporation records the issuance of $55 million of bonds at a 102% premium by debiting Cash for $56.1 million, and crediting Bonds Payable for $55 million and Premium on Bonds Payable for $1.1 million. This records the inflow of cash and the bond liability including the premium.
Explanation:
When Hoffman Corporation issues $55 million worth of 8%, 10-year bonds at 102, the company is borrowing money from bondholders and, in exchange, agreeing to pay interest as well as the principal amount after a set duration. Since the bonds are issued at a premium (102% of the face value), this means that for every $1,000 face value bond, the company receives $1,020. Therefore, the total cash received from the bond issuance is $56.1 million (which is $55 million x 102%).
The journal entry to record the issuance of the bonds would be:
Debit Cash $56.1 millionCredit Bonds Payable $55 millionCredit Premium on Bonds Payable $1.1 millionThis entry reflects the inflow of cash, the liability created by the bonds payable, and the additional premium accounts due to selling the bonds above their face value. The premium is essentially an additional amount that the company will amortize over the life of the bonds.
Your client, Brooke, decides to start saving for her son's college tuition. Her son was born today and will go to college at age 18 for four years. Brooke wants to save until her son's first year of college. Given the following information, what is the present value of the total amount that Brooke needs to have saved at the beginning of her son's first year of college?
Current tuition: $15,000
Tuition inflation: 6.5%
Brooke's investment return: 10%
a. $29,202
b. $39,010
c. $34,090
d. $31,959
Answer:
The present value of the total amount that Brooke needs to have saved at the beginning of her son's first year of college is 31.959,13
Explanation:
Tuition Fees after inflation at
Year 18 = 15000* ( 1+6.5%)18 = 46599.8157
Year 19 = 15000* ( 1+6.5%)19 = 49628.8037
Year 20 = 15000* ( 1+6.5%)20 = 52854.6759
Year 21 = 15000* ( 1+6.5%)21 = 56290.2299
Since discount rate = 10%
So discount factor = 1+r = 1+10% = 1.1
Since fees are paid at beginning of period hence
Present Value of Fees = Fees (year 18)/1.1^18 +Fees at Year 19/1.1^19 +Fees at Year 20/1.1^20 + Fees at year 21/1.1^21 = 46599.8157/1.1^18 + 49628.8037/1.1^19 + 52854.6759/1,1^20 + 56290.2299^21 = 31959
All of the statements are correct except: Multiple Choice flexible budget performance reports provide more useful information to managers than a simple comparison of budgeted to actual results. to generate a favorable variance for net operating income in a business, managers must take actions to increase client-visits. a flexible budget performance report separates the effects of how well prices were controlled and operations were managed. to generate a favorable overall revenue and spending variance, managers must take actions to increase the prices of inputs.
Answer:
To generate a favorable overall revenue and spending variance, managers must take actions to increase the prices of inputs. Incorrect
Explanation:
For the statement to be termed as correct, it has to be; To generate a favorable overall revenue and spending variance, managers must take actions to protect selling prices, increase operating efficiency, and reduce the prices of inputs.
This year Amy purchased $3,500 of equipment for use in her business. However, the machine was damaged in a traffic accident while Amy was transporting the equipment to her business. Note that because Amy did not place the equipment into service during the year, she does not claim any depreciation or cost recovery expense for the equipment.
A. After the accident, Amy had the choice of repairing the equipment for $2,140 or selling the equipment to a junk shop for $395. Amy sold the equipment. What amount can Amy deduct for the loss of the equipment?
B. After the accident, Amy repaired the equipment for $4,010. What amount can Amy deduct for the loss of the equipment?
C. After the accident, Amy could not replace the equipment so she had the equipment repaired for $3,200. What amount can Amy deduct for the loss of the equipment?
Answer:
A. $3105
B. $3,500
C. $3,200
Explanation:
A casualty loss is damage, destruction, or loss of property due to an event that is sudden, unexpected, or unusual such as fires, floods, accidents etc.
A. Amy can claim a casualty deduction since the machine was damaged in a traffic accident. Therefore : $3500 - $395 = $3105. Amy can deduct $3105 for the loss of the equipment.
B. Amy can claim a casualty loss deduction for the lesser of the economic loss (the cost of repair) or the tax basis of the machine. Therefore, Amy can deduct $3,500.
C. Amy can claim a casualty loss deduction for the lesser of the economic loss (the cost of repair) or the tax basis of the machine. Therefore, Amy can deduct $3,200.
A. Amy can deduct $3,105 for the loss of the equipment. B. Amy cannot deduct any amount for the loss of the equipment since she repaired it. C. Amy can deduct $295 for the loss of the equipment.
A. When Amy decides to sell the damaged equipment to a junk shop, she realizes a loss on the equipment. The amount of the loss is calculated by subtracting the amount received from the sale of the damaged equipment from the cost of the equipment. Amy purchased the equipment for $3,500 and sold it for $395 after it was damaged. Therefore, the loss Amy can deduct is calculated as follows:
Loss = Cost of Equipment - Proceeds from Sale
Loss = $3,500 - $395
Loss = $3,105
So, Amy can deduct $3,105 for the loss of the equipment.
B. If Amy chooses to repair the equipment, the cost of repairs does not result in a loss that can be deducted. Instead, the cost of repairs would generally be added to the basis of the equipment and depreciated over its useful life. Since Amy did not place the equipment into service during the year, she cannot claim any depreciation or cost recovery expense for the equipment, and thus, she cannot deduct any amount for the loss of the equipment.
C. When Amy has the equipment repaired for an amount less than the original cost, she can deduct the difference between the cost of the equipment and the cost of repairs as a loss. Amy purchased the equipment for $3,500 and repaired it for $3,200. The loss Amy can deduct is calculated as follows:
Loss = Cost of Equipment - Cost of Repairs
Loss = $3,500 - $3,200
Loss = $300
However, Amy also received $395 from selling the damaged equipment before repairing it. This amount needs to be subtracted from the loss to determine the deductible loss:
Deductible Loss = Loss - Proceeds from Sale
Deductible Loss = $300 - $395
Deductible Loss = -$295 (which is a negative number, indicating a deductible loss)
Therefore, Amy can deduct $295 for the loss of the equipment. Note that the negative sign indicates a deductible loss, not a negative loss, so the amount to be deducted is $295.
The Holmes Company's currently outstanding bonds have a 9% coupon and a 12% yield to maturity. Holmes believes it could issue new bonds at par that would provide a similar yield to maturity. If its marginal tax rate is 40%, what is Holmes's after-tax cost of debt? Round your answer to two decimal places.
Answer:
7.20%
Explanation:
Given that
Coupon rate = 9%
Yield to maturity = 12%
And marginal tax rate is 40%
So by considering the above information, the after tax cost of debts is
= Yield to maturity × (1 - tax rate)
= 12% × (1 - 0.40)
= 7.20%
After considering the tax rate and then multiplying with the yield to maturity we can get the after tax cost of debt
We ignored the coupon rate
Reggie owns and operates a cheese shop in the village of Somerset. Although Reggie has a degree in mechanical engineering and could easily go to work for his brother's company earning $ 76000 a year, his true passion is for cheese. Consider the list of Reggie's revenue and expenses from last year. Please use the information provided to answer the questions. Revenue from 2010 $ 90000 Rent $ 18000 Equipment $ 6000 Supplies $ 3000
Reggie's profit from operating the cheese shop was $63000. However, considering opportunity cost, he forgoes a potential $76000 salary he could have earned, hence losing out on that income.
Explanation:First, let's calculate Reggie's total cost for running his business. His expenses include rent ($18000), equipment ($6000), and supplies ($3000). This gives us a total of $27000.
Revenue from his business totaled $90000. To find his 'profit', we then subtract the total cost from the revenue. This gives us $90000 - $27000 = $63000. This means his profit from operating the cheese shop was $63000 last year.
However, when we consider opportunity cost, Reggie has forgone a salary of $76000 he could have earned if he had chosen to work for his brother's company. So, in essence, he is losing out on potential income by operating the cheese shop.
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As 2017, Buttle Corp. has $10 par, 2% preferred stock, 6,500 shares outstanding, and $1 par common stock with 32,000 shares outstanding. The preferred stock is cumulative and preferred stockholders last received a dividend in 2014. If the company wants to distribute $4 per share to the common stockholders in 2017, what is the total amount of dividends that the company must pay at the end of the current year? A. $129,300 B. $128,000 C. $ 3,900 D. $131,900 E. None of the above
Answer:
D. $131,900
Explanation:
For computing the total amount of dividend first we have to calculate the yearly dividend which is shown below:
Per year dividend for preferred stock is
= $10 × 6,500 × 2%
= $1,300
For 3 years, the total dividend is
= $1300 × 3 years
= $3,900
And,
Total common dividend is
= $4 × 32,000
= $128,000
So, the total dividend paid is
= $128,000 + $3,900
= $131,900
The total amount of dividends that Buttle Corp. must pay at the end of 2017 is $133,200, which accounts for accumulated and current year's dividends for preferred stockholders and dividends for common stockholders.
Explanation:Firstly we need to calculate the accumulated dividends for the preferred stock. The preferred stock has not received dividends since 2014, so by 2017 this accumulates as 3 years of missed dividends. Because the stock is a $10 par, 2% preferred stock, this results in a $0.20 dividend per share per year, thus $0.20 * 3 years * 6,500 shares = $3,900 in accumulated dividends. In the current year 2017, the dividends for the preferred stock would be $0.20 * 6,500 = $1,300.
Next, it is given that the company wants to distribute $4 per share to the common stockholders, this results in $4 * 32,000 shares = $128,000 in common stock dividends. So, the total amount of dividends that the company must pay at the end of the current year would be the sum of the accumulated dividends, the current year's preferred dividends, and the common stock dividends: $3,900 + $1,300 + $128,000 = $133,200
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Consider these transactions: (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Crane Company accepted a Visa card in payment of a $200 lunch bill. The bank charges a 3% fee. What entry should Crane make?
Answer:
Dr Visa card 194
Dr Bank charges 6
Cr Sales revenue 200
Explanation:
Crane Company Journal entry
Dr Visa card 194
Dr Bank charges (200*3%) 6
Cr Sales revenue 200
Brief Exercise 19-09 Bridgeport Inc. had pretax financial income of $144,200 in 2020. Included in the computation of that amount is insurance expense of $3,800 which is not deductible for tax purposes. In addition, depreciation for tax purposes exceeds accounting depreciation by $9,300. Prepare Bridgeport’s journal entry to record 2020 taxes, assuming a tax rate of 25%. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit Click if you would like to Show Work for this question:
Answer:
Dr Income Tax Expense 37,000
Cr Deferred Tax Liability 2325
Cr Income Tax Payable 34,675
Explanation:
Bridgeport Inc Journal entry
Dr Income Tax Expense 37,000
Cr Deferred Tax Liability 2325
Cr Income Tax Payable 34,675
Income Taxes Payable = ($138,700 x 25%)
= $34,675
Deferred Tax Liability
= ($9,300 x 25%)
= $2,325
$144,200 + $3,800 – $9,300
= $138,700
Justin's Electronics, Inc., in Nashville, produces short runs of custom airwave scanners for the defense industry. You have been asked by the owner, Janet, to reduce inventory by introducing a kanban system. After several hours of analysis, you develop the following data for scanner connectors used in one work cell. How many kanbans do you need for this connector? Daily demand 1,977 units Lead time 6 days Safety stock (in days of demand) 1.5 days Kanban size 328 units
Answer:
45
Explanation:
Number of Kanbans = demand during lead time + safety stock÷ size of container
Number of Kanbans = [(1977 * 6) + 1.5 * 1977] / 328
=(11,862)+(2,965.5)/328
Number of Kanbans
=14,827.5/328
= 45
Therefore we would need 45 kanbans for this connector.
The managerial accountant at Sunny Manufacturing needs to determine how many costs are fixed costs and how many costs are variable costs in the organization. The managerial accountant reported the following information:Month Machine Hours Total costsJanuary 1,800 $21,500February 2,900 $23,200March 1,000 $19,750April 2,400 $21,000May 3,400 $23,900Use the high-low method to determine the cost equation and use machine hours as the base for a cost driver in the analysis. What is the total cost equation for Sunny Manufacturing?
Answer:
Month. Machine Hours. Total costs
January. 1,800 $21,500
February. 2,900 $23,200
March. 1,000. $19,750
April. 2,400. $21,000
May. 3,400. $23,900
High-Low method = 23, 900 + 21,000
= 44,900
Ralph Goldsmith works for Zenith Inc., a leading cosmetic company based in Illinois. At Zenith, Ralph's primary responsibility revolves around digging deeply into customer data to gain valuable insights about customer needs, motives, and attitudes. This data is, in turn, used by Zenith to personalize its customers' shopping experiences. Ralph's position at Zenith requires him to focus primarily on ________.
a. customer sales
b. human resource management
c. risk assessment
d. marketing mix analysis
e. customer relationship management
Answer:
e. Customer Relationship Management
Explanation:
Customer Relationship Management -
It refers to the method which helps to get the required information from the potential and current customers, about the products of the company , is referred to as the customer relationship management .
They require the use of some previous data like the feedback forms, various communication channels like email , chats , website and social media.
It helps to get the correct and unbiased opinion of the customers, which helps in the betterment of the goods and services of the company , and the liking and disliking of the customers is considered while designing the product, which will help to increase the sale of the company.
Hence, from the given question,
The correct answer is Customer Relationship Management .
Leah is interested in running a business and decides to open a branch of a successful fashion store taht her sister owns in another town. In this case, Leah could be best described as a(n) _______.
Answer:
The correct answer is letter "D": franchisee.
Explanation:
Franchisees are individuals who have access to the proprietary knowledge and trademarks of a large company to operate a certain business under the corporations' guidelines and brand name in exchange for a fee. Franchising allows businesses to enter a market without the challenges brand-new entities have to face. The franchise leverages the corporation position in the market and sells its products just as if the company would do it directly.