Answer:
The correct answer is Option C.
Explanation:
In the indirect cash flows statement, there are 3 sections, namely: net cash flows from operating activities, net cash flows from investing activities and net cash flows from financing activities.
The items in the question only affect the first two. Under the net cash flows from operating activities, we need to subtract the gain realized from the disposal of the plant assets from net income, which is Sales proceed minus Net book value, i.e., $90,800 - ($904000- $843000) = $29,800.
The sales proceed is $90,800. This would be recognized as cash inflow under net cash flows from investing activities.
The following data have been recorded for recently completed Job 323 on its job cost sheet. Direct materials cost was $2,057. A total of 37 direct labor-hours and 194 machine-hours were worked on the job. The direct labor wage rate is $24 per labor-hour. The Corporation applies manufacturing overhead on the basis of machine-hours. The predetermined overhead rate is $33 per machine-hour. The total cost for the job on its job cost sheet would be:
Answer:
Total cost of Job = $9,347
Explanation:
The total cost of Job 323 would be the sum of the direct costs and the manufacturing overheads
Total cost = Direct material + direct labour + Overhead
The overhead absorption rate would be used to charge overhead to Job 323.
The absorbed overhead = OAR × actual machine hours used for Job 33
Total cost = 2,057 + (24× 37) + (194× 33) = $9,347
Total cost of Job = $9,347
Twifty Sports Inc. manufactures basketballs for the Women’s National Basketball Association (WNBA). For the first 6 months of 2017, the company reported the following operating results while operating at 80% of plant capacity and producing 118,800 units. Amount Sales $4,514,400 Cost of goods sold 3,633,000 Selling and administrative expenses 517,540 Net income $363,860 Fixed costs for the period were the cost of goods sold $960,000, and selling and administrative expenses $274,000. In July, normally a slack manufacturing month, Swifty Sports receives a special order for 10,000 basketballs at $29 each from the Greek Basketball Association (GBA). Acceptance of the order would increase variable selling and administrative expenses $0.77 per unit because of shipping costs but would not increase fixed costs and expenses.
Prepare an incremental analysis for the special order.
Answer:
Incremental Analysis for special order
units 10,000
offer price $290,000
Variable cost:
Cost of goods sold($22.5 *10,000) 225,000
Selling and Administrative expenses
($2.05*10,000) 20,500
shipping cost (0.77*10,000) 7,700 (253,200)
Additional contribution 36,800
Explanation:
variable cost goods sold per unit = ( 3,633,000 - 960,000)/118800 = $22.5
Variable selling and admin expense per unit = ( 517,540 - 274,000)/118800
= $ 2.05
Your division is considering two investment projects, each of which requires an up-front expenditure of $25 million. You estimate that the cost of capital is 10% and that the investments will produce the following after-tax cash flows (in millions ofdollars):Year Project A Project B1 5202 10 103 15 84 20 6a. What is the regular payback period for each of the projects?b. What is the discounted payback period for each of the projects?c. If the two projects are independent and the cost of capital is 10%, which project or projects should the firm undertake?d. If the two projects are mutually exclusive and the cost of capital is 5%, which project should the firm undertake?e. If the two projects are mutually exclusive and the cost of capital is 15%, which project should the firm undertake?f. What is the crossover rate?g. If the cost of capital is 10%, what is the modified IRR (MIRR) of each project?
The answer is attached in form of text file below giving solution to each of the question parts in detail.
Answer:
a. What is the regular payback period for each of the projects?
project A: 2.67 yearsproject B: 1.5 yearsb. What is the discounted payback period for each of the projects?
project A: 3.07 yearsproject B: 1.83 yearsc. If the two projects are independent and the cost of capital is 10%, which project or projects should the firm undertake?
project A: NPV = $12.74 million project B: NPV = $11.55 million both projects have positive NPVs so they should both be chosend. If the two projects are mutually exclusive and the cost of capital is 5%, which project should the firm undertake?
project A: NPV = $18.24 million (higher NPV, so this project should be selected)project B: NPV = $14.96 millione. If the two projects are mutually exclusive and the cost of capital is 15%, which project should the firm undertake?
project A: NPV = $8.21 million project B: NPV = $8.64 million (higher NPV, so this project should be selected)f. What is the crossover rate?
13.53%g. If the cost of capital is 10%, what is the modified IRR (MIRR) of each project?
MIRR project A = 21.93%MIRR project B = 20.96%Explanation:
Project A Project B
investment required -$25,000,000 -$25,000,000
cash flow 1 $5,000,000 $20,000,000
cash flow 2 $10,000,000 $10,000,000
cash flow 3 $15,000,000 $8,000,000
cash flow 4 $20,000,000 $6,000,000
a. What is the regular payback period for each of the projects?
project A: 2 years ($15 million) + 10/15 = 2.67 years
project B: 1 year ($20 million) + 5/10 = 1.5 years
b. What is the discounted payback period for each of the projects?
interest rate = 10%
discounted cash flows Project A Project B
5/1.1 = 4.55 20/1.1 = 18.18
10/1.1² = 8.26 10/1.1² = 8.26
15/1.1³ = 11.27 8/1.1³ = 6.01
20/1.1⁴ = 13.66 6/1.1⁴ = 4.1
project A: 3 years ($24.08 million) + 0.92/13.66 = 3.07 years
project B: 1 year ($18.18 million) + 6.82/8.26 = 1.83 years
c. If the two projects are independent and the cost of capital is 10%, which project or projects should the firm undertake? using excel spread sheet an NPV function:
project A: NPV = $12.74 million
project B: NPV = $11.55 million
both projects have positive NPVs so they should both be chosen
d. If the two projects are mutually exclusive and the cost of capital is 5%, which project should the firm undertake?
project A: NPV = $18.24 million (higher NPV, so this project should be selected)
project B: NPV = $14.96 million
e. If the two projects are mutually exclusive and the cost of capital is 15%, which project should the firm undertake?
project A: NPV = $8.21 million
project B: NPV = $8.64 million (higher NPV, so this project should be selected)
f. What is the crossover rate?
investment project A - investment project B = 0
cash flow 1 project A - cash flow 1 project B = 5 - 20 = -15
cash flow 2 project A - cash flow 2 project B = 10 - 10 = 0
cash flow 3 project A - cash flow 3 project B = 15 - 8 = 7
cash flow 4 project A - cash flow 4 project B = 20 - 6 = 14
now using excel spreadsheet we determine IRR: 13.53%
g. If the cost of capital is 10%, what is the modified IRR (MIRR) of each project?
MIRR = {ⁿ√ [FV(positive cash flows x cost of capital)] / [PV(initial outlays)]} - 1
future value of positive cash flows project A = (5 x 1.1³) + (10 x 1.1²) + (15 x 1.1) + 20 = 6.655 + 12.1 + 16.5 + 20 = 55.255
future value of positive cash flows project A = (20 x 1.1³) + (10 x 1.1²) + (8 x 1.1) + 6 = 26.62 + 12.1 + 8.8 + 6 = 53.52
PV initial outlays for both projects = -$25,000
n = 4
MIRR project A = {⁴√ [55.255 / -25]} - 1 = 1.2193 - 1 = 0.2193 or 21.93%
MIRR project B = {⁴√ [53.52 / -25]} - 1 = 1.2096 - 1 = 0.2096 or 20.96%
A regression analysis of 117 homes for sale produced the following regression equation, where price is in thousands of dollars and size is in square feet. regimage04 (a) What does the slope of the line say about housing prices and size? For every $1,000 increase in price of a house, the size is predicted to increase by 0.061 square foot. For every additional square foot of area of a house, the price is predicted to increase by $61. For every additional square foot of area of a house, the price is predicted to increase by $0.061. For every $1 increase in price of a house, the size is predicted to increase by 61 square feet. (b) A realtor shows a potential buyer a 1600 square-foot house, saying that the asking price is $4100 less than what one would expect to pay for a house of this size. What is the asking price of this house and what is the residual? The asking price is $145410 and the residual is a positive $4100 . The asking price is $145410 and the residual is a negative $4100 . The asking price is $141310 and the residual is a positive $4100 . The asking price is $141310 and the residual is a negative $4100 .
Answer:
(a). For every additional square foot of area of a house, the price is predicted to increase by $61
(b) The asking price is $145410 and the residual is a negative $4100
Explanation:
As per the data given in the question,
a) From regression equation Slope = 0.061
So slope = (0.061 × 1,000) ÷ 1 sq. ft.
= $61 per sq. ft.
For every additional square foot area price is increased by $61
b) If size of the house is = 1600 square foot then
Price = 47.81 + 1600*0.061
=$145,410
The asked price is $4,100 less than estimated price and residual is not positive
Hence,
Asking price = $145,410
Residual price = a negative $4,100
Incremental analysis is most useful 1. in evaluating the master budget. 2. as a replacement technique for variance analysis. 3. in developing relevant information for management decisions. 4. in choosing between capital budgeting methods.
Answer:
The correct answer is number (3): in developing relevant information for management decisions.
Explanation:
Incremental analysis is a study firm makes to allocate resources efficiently. It can be used at the moment of comparing the costs of different products to be manufactured to select the lowest that provides more benefits. Incremental analysis can also be implemented at the moment of identifying how a scarce resource should be used ensuring it brings the highest returns possible.
Incremental analysis, also known as differential or marginal analysis, helps managers to make more informed decisions, then.
Incremental analysis is most useful in developing relevant information for management decisions and in choosing between capital budgeting methods.
Explanation:Incremental analysis is most useful in developing relevant information for management decisions. It involves analyzing the costs and benefits of different alternatives and making decisions based on the incremental effects of those alternatives. For example, when deciding whether to introduce a new product, a company can use incremental analysis to compare the additional revenue and costs associated with the new product to determine if it is financially feasible.
Incremental analysis can also be useful in choosing between capital budgeting methods. When considering different investment opportunities, a company can use incremental analysis to assess the incremental cash flows and benefits of each option. By comparing the incremental benefits and costs, the company can make an informed decision on which capital budgeting method to pursue.
Overall, incremental analysis is an effective tool in helping businesses make informed decisions, whether it's evaluating management decisions or choosing between capital budgeting methods.
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Price supports (such as those placed on agricultural goods) Select one: a. are designed to benefit suppliers. b. hurt demanders because they face artificially higher prices. c. create surpluses that have to be purchased by government agencies. d. impose a higher tax burden on society in order to finance government purchases. e. generate all of the above consequences.
Answer:
The correct answer is letter "E": generate all of the above consequences.
Explanation:
Price supports, mostly known as price floors, are set by the government to protect producers of certain goods and services. By doing so, the product prices will have a minimum that cannot be trespassed. This is to make sure producers can continue with their operations at least earning a minimum profit margin.
The counterpart, the demanders, are affected because their purchasing power is decreased by setting the price at a certain level without the option of going down from there. Besides, the higher the price, the more taxes consumers will be paying. The disadvantage of price floors is surplusses in production that are the result of demanders not being able to pay the price set by the government. Eventually, government agencies purchase the surplus quantity in an attempt to keep the equilibrium in the market.
Price supports on agricultural goods provide benefits to suppliers but lead to higher prices for consumers, surpluses that the government must purchase, and a higher tax burden for society. Therefore, the correct answer is e. generate all of the above consequences.
Explanation:Price supports, such as those placed on agricultural goods, have multiple consequences. These government enforcements are designed to maintain a minimum price by directly purchasing the goods or providing subsidies, which can lead to various effects.
The answer to the student's question would be e. generate all of the above consequences. Price supports benefit suppliers by ensuring they receive a certain minimum price for their goods, thus increasing producer surplus. However, they hurt demanders since they face artificially higher prices than what the market might have offered without such controls.
Also, they create surpluses because when the price is held above the equilibrium, quantity supplied exceeds quantity demanded, and these surpluses are usually purchased by the government. This action, in turn, imposes a higher tax burden on society to finance the government purchases of the surplus, and can lead to a deadweight loss (DWL), reflecting the loss of economic efficiency.
While such interventions aim to stabilize markets and ensure sufficient income for producers, they can lead to distortions in market functioning and carry a cost for society as a whole. Thus, they are a subject of debate since the goal is to balance the benefits of subsidies with the need to minimize negative externalities.
An employee earns $6,350 per month working for an employer. The FICA tax rate for Social Security is 6.2% of the first $118,500 of earnings each calendar year and the FICA tax rate for Medicare is 1.45% of all earnings. The current FUTA tax rate is 0.6%, and the SUTA tax rate is 5.4%. Both unemployment taxes are applied to the first $7,000 of an employee's pay. The employee has $216 in federal income taxes withheld. The employee has voluntary deductions for health insurance of $184 and contributes $92 to a retirement plan each month. What is the amount the employer should record as payroll taxes expense for the employee for the month of January
The employer should record a payroll taxes expense of $866.78 for the month of January, derived from calculating and summing up Social Security tax, Medicare tax, FUTA and SUTA taxes for the employee's earnings.
Explanation:To determine the amount the employer should record as payroll taxes expense for the month of January, one must consider Social Security tax, Medicare tax, federal (FUTA) and state (SUTA) unemployment taxes. The employee's gross earnings for the month of January are $6,350.
The Social Security tax is 6.2% of gross earnings ($6,350 * 0.062 = $393.70) and Medicare tax is 1.45% of all earnings ($6,350 * 0.01450 = $92.08).
The FUTA and SUTA rates are applied to the first $7,000 of employee's pay. Therefore, if this is January and the employee has not yet hit that threshold, calculate FUTA tax (0.6%) as $6,350 * 0.006 = $38.10, and SUTA at 5.4% as $6,350 * 0.054=$342.90.
Now, add all of these totals together to get: $393.70 + $92.08 + $38.10 + $342.90 = $866.78.
So the amount the employer should record as payroll taxes expense for the month is $866.78.
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The types of decision making a consumer uses for a product does not necessarily remain constant. Why ?
Answer:
The answer is:
1. When the consumer's preferred product is sold out or not in the market again.
2. When a consumer is deriving a disutility from a product and the producer of the product fails to address the situation
Explanation:
Consumers are believed to be rational when it comes to taking consumption decisions. Consumers' consumption is not always constant or the same sometimes there are deviations from the norms and the following reason could be some of the reasons.
1. When the consumer's preferred product is sold out or not in the market again. Consumers in this category will need to go for alternative or substitute goods after evaluating his choices.
2. When a consumer is deriving a disutility from a product and the producer of the product fails to address the situation. The rational consumer will have to abadon this product and go for the alternative.
These two reasons can make consumers to change their preference.
On August 5, 2021, Famous Furniture shipped 40 dining sets on consignment to Furniture Outlet, Inc. The cost of each dining set was $350 each. The cost of shipping the dining sets amounted to $1,800 and was paid for by Famous Furniture. On December 30, 2021, the consignee reported the sale of 30 dining sets at $850 each. The consignee remitted payment for the amount due after deducting a 6% commission, advertising expense of $600, and installation and setup costs of $780. The total profit on units sold for the consignor is
Answer:
$10,290
Explanation:
Famous Furniture
Sales of Dining set $850 each
Less cost of each dining set $350 each
Balance $500
Sales 30×500
=$15,000
Hence:
$15,000– (30 ×$850)(.06) – $1,800 – $600 – $780
=$15,000-$1,530-$1,800-$600-$780
=$10,290
Therefore the total profit on units sold for the consignor is $10,290
Answer:
The total profit on units sold for the consignor is $ 6790
Explanation:
Famous Furniture
Sales (850*30) $ 25500
Goods Sent on Consignment 40 *350= $ 14000
Shipping Cost $ 1800
To Furniture Outlet,
Advertising Expenses 600
Installation Setup $ 780
Commission (6% of 25,500) 1530 18170
Profit on Consignment $ 6790
The Profit for the consignor will be $ 6790 after bearing all the expenses incurred both by the consignor and the consignee.
Plaintiffs purchased state lottery tickets and were winners along with 76 others. The state had advertised that $1,750,000 would be the prize, but it distributed only $744,471. Plaintiff sued the lottery director, alleging fraud in the conduct of the lottery. The state lottery law provides for administrative hearings upon complaints charging violations of the lottery law or of regulations thereunder. It also allows any party adversely affected by a final order of the administrative agency to seek judicial review. Must the plaintiffs exhaust their administrative remedies? Why or why not?
Answer:
yesBecause the state lottery provides for administrative hearingsExplanation:
The plaintiffs must exhaust their administrative remedies before a court of law would grant them the opportunity to pursue a legal action against the lottery board because it might a breach in communication or administration from the lottery board or the lottery director and the plaintiffs should seek to resolve the issues without having to seek a legal action but through administrative remedies and procedures which more swift in resolving such issues
Yes, the plaintiffs must first exhaust their administrative remedies before going to court. This involves filing a complaint with the administrative agency, allowing them to investigate and potentially correct the issue. Only after this step can they seek judicial review.
Explanation:Based on the provided information, it can be inferred that the plaintiffs would need to exhaust their administrative remedies before proceeding to legal litigation. This is because the state lottery law provides for administrative hearings for complaints alleging violations of the lottery law. Essentially, the plaintiffs must first file a complaint with the administrative agency responsible for the lottery and allow them to investigate and possibly remedy the situation. Only if the plaintiffs are unsatisfied with the final order of the administrative agency may they seek judicial review. This process is known as 'exhausting administrative remedies' and is generally a prerequisite before court proceedings. It helps to ensure that administrative agencies have the opportunity to correct their own errors and applies their expertise where appropriate.
The requirement to exhaust administrative remedies is also part of the rule of law that respects the separation of powers. In this context, the disputes would first have to be directed at the administrative level, which is the branch of government responsible for implementing and managing state programs such as lotteries. Turning to the administrative system allows for potential errors to be corrected without the immediate need for judicial intervention.
However, it's important to notate that exhaust administrative remedies rules vary by jurisdiction, and exceptions may exist depending on the specifics of the case.
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Suppose that a firm's only variable input is labor, and the constant hourly wage rate is $20 per hour. The last unit (hour) of labor hired enabled the firm to increase its hourly production from 250 units to 251 units. What was the marginal cost of the 251st unit of output?
Answer:
20
Explanation:
The marginal cost refers to the cost a company has when an additional unit is manufactured and it is calculated using the formula:
Marginal Cost= change in costs / change in quantity
Change in cost in this case is 20 as the last unit of labor hired costs an additional 20 per hour.
Change is quantity is 1 as the hourly production increases from 250 to 251 units.
Marginal Cost=20/1
Marginal Cost= 20
The marginal cost of the 251st unit of output was 20.
Pottery Ranch Inc. has been manufacturing its own finials for its curtain rods. The company is currently operating at 100% of capacity, and variable manufacturing overhead is charged to production at the rate of 63% of direct labor cost. The direct materials and direct labor cost per unit to make a pair of finials are $3.51 and $4.73, respectively. Normal production is 28,300 curtain rods per year.
A supplier offers to make a pair of finials at a price of $13.20 per unit. If Pottery Ranch accepts the supplier’s offer, all variable manufacturing costs will be eliminated, but the $48,200 of fixed manufacturing overhead currently being charged to the finials will have to be absorbed by other products.
(a)
Prepare an incremental analysis to decide if Pottery Ranch should buy the finials. (Round answers to 0 decimal places, e.g. 1250. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
Make Buy Net Income
Increase (Decrease)
Direct materials $Pottery Ranch Inc. has been manufacturing its own $Pottery Ranch Inc. has been manufacturing its own $Pottery Ranch Inc. has been manufacturing its own
Direct labor Pottery Ranch Inc. has been manufacturing its own Pottery Ranch Inc. has been manufacturing its own Pottery Ranch Inc. has been manufacturing its own
Variable overhead costs Pottery Ranch Inc. has been manufacturing its own Pottery Ranch Inc. has been manufacturing its own Pottery Ranch Inc. has been manufacturing its own
Fixed manufacturing costs Pottery Ranch Inc. has been manufacturing its own Pottery Ranch Inc. has been manufacturing its own Pottery Ranch Inc. has been manufacturing its own
Purchase price Pottery Ranch Inc. has been manufacturing its own Pottery Ranch Inc. has been manufacturing its own Pottery Ranch Inc. has been manufacturing its own
Total annual cost $Pottery Ranch Inc. has been manufacturing its own $Pottery Ranch Inc. has been manufacturing its own $Pottery Ranch Inc. has been manufacturing its own
(b)
Should Pottery Ranch buy the finials?
Pottery Ranch Inc. has been manufacturing its own NoYes, Pottery Ranch should Pottery Ranch Inc. has been manufacturing its own not buybuy the finials.
(c)
Would your answer be different in (b) if the productive capacity released by not making the finials could be used to produce income of $61,137?
Pottery Ranch Inc. has been manufacturing its own NoYes, income would Pottery Ranch Inc. has been manufacturing its own increasedecrease by $Pottery Ranch Inc. has been manufacturing its own
Answer:
See attached file
Explanation:
National Drilling Company ships its only pump to American Hydraulics Corporation, the manufacturer, for repair. National pays Overland Transport, Inc., $400 to haul the pump to American Hydraulics and to return it to National five days later when the repair is complete. National is forced to suspend operations without a pump, but National does NOT tell Overland. To avoid losing profits of $1,000 per day while the pump is out for repairs, National rents a replacement pump at a cost of $100 per day. The repairs are completed on time, but Overland does not return the pump on the day specified in the contract, and delays five more days before returning the pump. National files a suit against Overland, asking for compensatory, consequential, and punitive damages. National will most likely be awarded
Answer:
National will prevail with regards in recovering the damages, but not for all the damages that it looks for. Overland's inability to perform quickly is a break of agreement for which National can recover damages. Although, the late delivery of pump by the Overland's, National is qualified for recover the cost of renting the pump for the five days that Overland delayed. Costs that are caused legitimately by a breach of agreement.
Identify how planned investment will change in each scenario. Airwings, a commercial airline manufacturer, becomes optimistic about economic conditions after seeing reports of strong growth in consumer spending. Due to Airwings, planned investment The Federal Reserve announces an end to accommodative monetary policy, and is now implementing policy tools that will increase the real interest rate. Due to the Fed, planned investment In an effort to reduce constant budget deficits, Congress announces plans to increase the corporate income tax rate. Due to the Congress, planned investment A major recession has reduced consumption spending, which has hurt profit levels for Aston-Benz, a high-end car manufacturer. Due to the recession, planned investment
Answer:
See explaination for the details of the answer.
Explanation:
1) Increase
As business is optimistic about its future, such business will start capacity expansion to cater for consumer demand.
2) Decrease
Higher real interest rate simply means borrowing cost is higher for the firms and so that they will reduce the investment in respose to that.
3) Decrease
A lower tax means higher profits and firms can pass these benefits to consumers with lower prices, to employees with higher wages and to the government with tax on profit. However, if the rate of tax itself has been increased then in that case corporates will see higher tax as a dampener in sentiments and they might curtail investment plans.
4) Decrease
A recession means there will be lesser economic activity overall and demand will be lower so as the consumption. In such case, planned investment will be reduced.
BHS Inc. determines that sales will rise from $300,000 to $500,000 next year. Assets are 70% of sales and liabilities are 30% of sales. BHS has a 10% profit margin and a 40% dividend payout ratio. What is the level of required new funds?
Final answer:
The level of required new funds for BHS Inc. is calculated by finding the differences between the increases in assets, increases in liabilities, and the dividends paid out from profits. For BHS Inc., this results in required new funds of $60,000.
Explanation:
The student is seeking to understand the level of required new funds for BHS Inc., given its projected increase in sales, asset and liability structure, profit margin, and dividend payout ratio. To calculate this, we must follow several steps.
Calculate the projected increase in assets and liabilities based on the new sales figure.
Determine the profits based on the new sales and profit margin.
Calculate the dividends to be paid out based on the profit and dividend payout ratio.
Finally, deduce the required new funds by subtracting both the increase in liabilities and dividends from the increase in assets. The remaining balance reflects the new funds required.
Let's break this down:
Projected increase in assets: $500,000 x 0.70 = $350,000 (new asset level) - $300,000 x 0.70 = $210,000 (current asset level) = $140,000 increase.
Projected increase in liabilities: $500,000 x 0.30 = $150,000 (new liability level) - $300,000 x 0.30 = $90,000 (current liability level) = $60,000 increase.
Projected profits: $500,000 x 0.10 = $50,000.
Dividends paid: $50,000 x 0.40 = $20,000.
Required new funds: $140,000 (increase in assets) - $60,000 (increase in liabilities) - $20,000 (dividends paid) = $60,000.
Packard Corporation transferred its 100 percent interest to State Company as part of a complete liquidation of the company. In the exchange, Packard received land with a fair market value of $427,500. Packard's basis in the State stock was $625,000. The land had a basis to State Company of $535,000. What amount of loss does State recognize in the exchange and what is Packard's basis in the land it receives
Answer:
$107,500
Explanation:
There is No loss recognized by State and a basis in the land of $535,000 to Packard.
The State does not recognize the loss of $107,500 because the liquidation is tax-deferred to Packard. Packard's basis in the land is equal to State's basis in the land.
Answer:
No loss or gain is recognized by State Company and Packard's basis in the land will be $535,000
Explanation:
State Company does not have to recognize any loss or gain regarding the distribution of the land. Packard's basis for the land will be equal to State's basis = $535,000.
Since the liquidation involves 100% of the company's stocks, section 332 applies. This means that no gain or loss must be recognized by State Company.
Under profit regulation or average-cost pricing, the government will raise the price of output whenever a firm's costs increase, and lower the price whenever a firm's costs decrease. Over time, under the average-cost pricing policy, what will the local telephone company most likely do?
Answer:
Allow its cost to increase
Explanation:
Under Profit regulation or average-cost pricing, the government will require that the firm charge the price at which long-run average cost intersects the demand curve. If the firm lowers its costs, it will notrealize any economic profit because the government will require the firm to lower its price accordingly. If the firm's costs increase, the firm will not suffer economic losses because the government will allow the price to rise accordingly. As a result, the firm faces no incentive to lower costs and no penalty for allowing costs to rise. The firm's costs will likely creep upward over time
Answer:
Over time, the local Telephone company will most likely permit an increase in their company's cost.
Explanation:
The average cost pricing rule is a pricing strategy that government impose on certain businesses to limit what they are able to charge consumers for its products or services to a price equal to the costs necessary to create the product or service.
This implies that businesses will set the unit price of a product relatively close to the average cost needed to produce it.
Under profit regulation or average-cost pricing, the telephone company's wish to maximize profit can only be effective under the government's regulation if they allow their cost to increase.
Compuvac Company just completed its initial forecasts of next year's financial statements using the projected balance sheet method. The firm determined that it needs $4 million in new debt, which can be issued at par with a 10 percent annual coupon. Additionally, the firm can sell 500,000 shares of new common equity, which will net $18.10 per share. Next year's expected dividend is $0.48 per share. After accounting for the financing feedbacks associated with raising the required funds, Compuvac expects its taxes to be $160,000 lower than were reported in the initial forecasts. Given this information, what should Compuvac find the change to be in the addition to retained earnings that is reported in the income statement that was initially forecasted after the financing feedbacks are included
Answer:
$4 million in new debt at 10% annual coupon
500,000 shares x $18.10
new year's expected dividend = $0.48
taxes will decrease by $160,000
Compuvac will need to pay $4,000,000 x 10% = $400,000 in interests for the bonds that it plans to issue new year. That is why their taxes will decrease by $160,000 = total debt payments x tax rate = $400,000 x 40%
It will also need to pay $0.48 x 500,000 shares = $240,000 in additional dividends.
The increase in additional funds needed (AFN) = total interest paid for the bonds - less taxes + additional dividends = $400,000 - $160,000 + $240,000 = $480,000
The Cash account in the ledger of Hensley, Inc. showed a balance of $3,100 at June 30. The bank statement, however, showed a balance of $3,900 at the same date. The only reconciling items consisted of a $700 deposit in transit, a bank service charge of $7, and a large number of outstanding checks. What is the "adjusted cash balance" at June 30?
Answer:
$3,093
Explanation:
Hensley, Inc.
Bank Reconciliation Statement
Month Ended June 30
Balance as Hensley, Inc. record $3,100
Less: Service Charges $7
Adjusted Cash Balance $3,093
Cash Balance as per Bank Statement $3,900
Add: Deposit in Transit $700
Less: Outstanding checks* $1,507
Adjusted Cash Balance $3,093
*Outstanding Checks = Balance as per Bank Statement + Deposit in Transit - Adjusted Cash Balance
Outstanding Checks = $3,900 + $700 - $3,093
Outstanding Checks = $1,507
The adjusted cash balance at June 30 can be calculated by adding the deposit in transit, deducting the bank service charge, and deducting the outstanding checks.
Explanation:The adjusted cash balance at June 30 can be calculated by adjusting the Cash account balance in the ledger to reconcile it with the bank statement balance.
A $700 deposit in transit should be added to the Cash account balance, as it represents a deposit made by Hensley, Inc. that has not been recorded by the bank yet.The $7 bank service charge should be deducted from the Cash account balance, as it represents a fee charged by the bank.Outstanding checks should also be deducted from the Cash account balance, as they represent checks issued by Hensley, Inc. that have not yet been cleared by the bank.By applying these adjustments, we can calculate the adjusted cash balance at June 30.
The net loss reported on the income statement for the current year was $10,000. Depreciation was $40,000. Accounts receivable and inventories decreased by $12,000 and $35,000, respectively. Treasury stock was purchased for $50,000, and prepaid expenses and accounts payable increased by $1,000 and $8,000, respectively. Based on this information, how much cash was provided by operating activities
Answer:
$104,000
Explanation:
The cash flow statement categories the company's transactions in a financial period into 3 groups; these are operating, investing and financing.
The net profit/loss, depreciation, changes in current assets (other than cash) and liabilities are considered as operating activities including income taxes.
The sale of assets, interest received, purchase of investments are examples of investing activities while the issuance of stocks, debt principal deduction (loan settlement), issuance of debt securities etc are examples of financing activities.
An increase in assets other than cash is an outflow while an increase in liabilities is an inflow. Depreciation and other non-cash expenses deducted in the income statements are added back while the non-cash income such gain on asset are deducted from net income.
As such,
Cash provided by operating activities
= $10,000 + $40,000 + $12,000 + $35,000 - $1,000 + $8,000
= $104,000
Answer:
Cash was provided by operating activities is $84,000.
Explanation:
To arrive at the cash was provided by operating activities, we need to prepare an extract of statement of cash flows (operating activities) as follows:
Statement of cash flows (extract)
Net loss ($10,000)
Add: Depreciation $40,000
Decrease in accounts receivable $12,000
Decrease in inventories $35,000
Increase in accounts payable $8,000
Less: Increase in prepaid expenses $1,000
Net cash flows from operating activities $84,000
Note that the purchase of treasury stock of $50,000 belongs to cash flows from financing activities.
Jack is a crook with an honest face. People easily trust him. Jack works a scam in which he convinces the elderly to invest their life savings in a false company based on false annual reports of highly lucrative returns. He insists that the investment must be in cash to facilitate timely return on investment. Jack is guilty of a crime involving what
Answer:
False Pretenses
Explanation:
From the question given, jack is involved in the crime called false pretenses. He receives money by which he mentions things that are not true.
He brings out a false annual reports of profitable returns for a a non existing company or organisation. This representation is false with actual facts.
On June 1, 2020, Smith sold equipment to Landing Inc. in exchange for a zero-interest bearing note with a face value of $110,000, with payment due in 12 months. The fair value of the equipment on the date of sale was $100,000.
(a) The amount of revenue to be recognized on this transaction in 2020 is ___________.
Answer:
$100,000 sales revenue and $5,833 interest revenue
Explanation:
The computation is shown below:
For interest revenue
= (Face value - fair value of the equipment) × number of months ÷ total number of months in a year
= ($110,000 - $100,000) × 7 months ÷ 12 months
= $5,833
The seven months is calculated from June 1 to December 31
And, the fair value of the equipment on the sale date i.e $100,000 is also recognized
Equivalent Units of Materials Cost The Rolling Department of Kraus Steel Company had 3,400 tons in beginning work in process inventory (80% complete) on October 1. During October, 55,900 tons were completed. The ending work in process inventory on October 31 was 2,800 tons (50% complete). What are the total equivalent units for direct materials for October if materials are added at the beginning of the process?
Answer:
Explanation:
The process adopted by Kraus steel is process cost. A process cost is used to assign cost when there is a mass production of identical goods with continuous and various stages of production
Input Conversion% Output
Opening inventory 3,400 80 2720
October process 55,900 100 55900
59,300 58620
Closing Inventory 2800 50 1400
Total units 62100 60020
The total equivalent units for direct materials for October in the Rolling Department of Kraus Steel Company are 58,700 equivalent units. Since materials are added at the beginning of the process, both completed units and ending work in process inventory are considered 100% for materials cost.
To calculate the total equivalent units for direct materials for October in the Rolling Department of Kraus Steel Company, we consider that materials are added at the beginning of the process, and therefore any tons of steel in process or completed will have 100% of the materials costs applied to them. To find the total equivalent units, we add the following: the tons completed and the ending work in process inventory (considering the completion percentage is irrelevant as the materials are added at the beginning).
The calculation is as follows:
Beginning work in process inventory: not applicable since materials are added at the beginning, so all the materials would have already been accounted for in the previous month's calculation.Units completed: 55,900 tons (since they are completed, they have 100% of the materials).Ending work in process inventory: 2,800 tons (again, since materials are added at the beginning, these are also considered 100% for materials cost).Therefore, the total equivalent units of materials cost for October are:
55,900 (completed) + 2,800 (ending WIP) = 58,700 equivalent units
Marco traveled across three states to shop at Tiffany's to buy his girlfriend, Jana, a present. This is the only Tiffany's store in the entire region. The degree of channel coverage for Tiffany's is: Group of answer choices Intensive Exclusive Transactional Logistical Speed
Answer:
Exclusive
Hope this helps :)
Answer:
The correct answer is letter "B": Exclusive.
Explanation:
The Level of Distribution Coverage refers to the scope a company sets for the reach of its product. The degree of coverage will depend on the type of goods offered and the location of the target market. Those distribution levels could be of mass coverage, selective coverage, and exclusive coverage.
Exclusive coverage distribution is selected when offering high-end products. As these goods tend to be expensive, the likelihood of being regularly purchased decreases what allows the company to have a few distribution centers providing the good to a limited number of stores usually located in areas where people with high buying power live.
In some industries, the labor productivity of union workers exceeds the labor productivity of nonunion workers. Which of the following might help explain the higher productivity of union workers? Check all that apply Higher union wage rates allow companies to attract more low-skilled workers. Labor union enable workers to voice concerns about working conditions and safety issues, making them more confident and less intimidated by their employers and thus more productive. Unions are always more efficient than firms at discerning which workers are highly skilled and which are not. Labor unions foster a more stable work force, decreasing turnover.
Answer:
Labor union enable workers to voice concerns about working conditions and safety issues, making them more confident and less intimidated by their employers and thus more productive.
Labor unions foster a more stable work force, decreasing turnover.
Unions are always more efficient than firms at discerning which workers are highly skilled and which are not.
Explanation:
Labor unions improve productivity by improving employee satisfaction, decreasing turnover and attracting trianed skilled labor
Final answer:
Higher union wage rates, improved work conditions, workforce stability, job training, and apprenticeship programs all contribute to the higher productivity of union workers compared to nonunion workers.
Explanation:
Union workers might exhibit higher productivity than their nonunion counterparts due to several factors that unions bring into the workplace dynamic. First and foremost, higher union wage rates may incentivize workers to perform better because they feel that their efforts are being more fairly compensated, leading to an increase in productivity. Moreover, unions advocate for better work conditions and safety, which can enhance worker confidence and productivity.
In addition to providing a greater sense of security to workers, labor unions contribute to workforce stability by reducing turnover, which means that employers spend less on training and hiring. A stable workforce also accumulates years of experience, which can directly translate to better productivity. Furthermore, many unions offer valuable job training and apprenticeship programs that help workers develop their skills, allowing them to work more efficiently and effectively.
Firms may also adjust their production methods based on union demands for higher wages by investing in more physical capital and less labor, thereby inadvertently increasing labor productivity. This adaptation may not necessarily reflect the individual productivity of union workers but rather an improvement in the overall process.
The average individual in a country earns an annual salary of $60,000, of which $24,000 is spent on housing, $10,800 on food, $10,800 on transportation, and $14,400 on other goods and services. Suppose the government in this country mandates that all salaries and the prices of all goods and services be reduced by 40 percent. a. How much does the average individual now earn
Answer:
The answer is $36,000.
Explanation:
If the average individual earns an annual salary of $60,000 and the government reduces all salaries and prices by 40%, then the salary of the average individual annualy decreases by $24,000 and comes down to $36,000 per year. But since the costs of services and prices of goods recude by 40% as well, it doesn't change the real salary.
I hope this answer helps.
The average individual now earn is $36,000.
The calculation is as follows:= Annual salary × (1 - reduced percentage)
= $60,000 × (1 - 0.40)
= $60,000 × 0.60
= $36,000
Therefore we can conclude that The average individual now earn is $36,000.
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Dec. 13 Accepted a $15,000, 45-day, 7% note in granting Miranda Lee a time extension on her past-due account receivable. 31 Prepared an adjusting entry to record the accrued interest on the Lee note. Jan. 27 Received Lee's payment for principal and interest on the note dated December 13. Mar. 3 Accepted a $9,000, 10%, 90-day note in granting a time extension on the past-due account receivable of Tomas Company. 17 Accepted a $7,000, 30-day, 8% note in granting H. Cheng a time extension on his past-due account receivable. Apr. 16 H. Cheng dishonored his note. May 1 Wrote off the H. Cheng account against the Allowance for Doubtful Accounts. June 1 Received the Tomas payment for principal and interest on the note dated March 3.
This business finance question involves understanding the concepts of notes receivables, interest calculations, and time value of money. It specifically references transactions with notes receivable, including time extensions on past due accounts, calculating accrued interest, and handling dishonored notes or written-off accounts. The interest on notes can be calculated using the formula: Interest = Principal x Rate x Time.
Explanation:The subject of this question revolves around notes receivable and interest calculations in business finance. A few key transactions involving notes receivable are provided. First, Miranda Lee is given a time extension on her past due account, which means she defaults on a loan with a $15,000 principal amount and a 45-day term at a 7% interest rate. The accrued interest is then calculated and added to the principal when she makes her payment. The second and third scenarios involve similar transactions with the Tomas Company and H. Cheng. The primary difference with H. Cheng's note is that it is dishonored, which means he defaults on his payment and the debt is written off. Interest on these loans can be calculated using the formula: Interest = Principal x Rate x Time, where Time is the portion of the year the note is outstanding, Rate is the note's interest rate, and Principal is the note's face value. Some concepts involved are future value, present value, interest rates and time value of money.
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Final answer:
Accounts Receivable, accrued interest, dishonored notes.
Explanation:
Accounts Receivable represent amounts owed to a company for goods or services provided on credit terms. When a note is accepted, it signifies a formal promise to pay a specific amount at a future date with interest.
Accrued interest is the interest that has accumulated on a note but has not been paid or recorded yet. Adjusting entries are made to recognize this interest as it is earned over time.
When a note is dishonored, it means that the maker of the note fails to make the required payment, leading to potential financial implications for the payee.
RecRoom Equipment Company received an $8,000, six-month, 6 percent note to settle an $8,000 unpaid balance owed by a customer. a. The note is accepted by RecRoom on November 1, causing the company to increase its Notes Receivable and decrease its Accounts Receivable. b.RecRoom adjusts its records for interest its earned to its December 31 year-end. c.RecRoom receives the interest on the note's maturity date. d.RecRoom receives the principal on the note's maturity date.
Answer:
(a) The required journals are:
Debit Note receivable $8,000
Credit Accounts receivable $8,000
(To record note receivable)
(b) Adjustment for interest its earned to its December 31 year-end:
Debit Interest receivable $80
Credit Interest revenue $80
(To record interest receivable on notes as at 31 Dec)
(c) Receipt of interest on the note at maturity
Debit Cash $240
Credit Interest receivable $240
(Being receipt of interest on note at maturity)
(d) Receipt of principal on the note at maturity
Debit Cash $8,000
Credit Note receivable $8,000
(Being receipt of note principal at maturity)
Explanation:
Note is a promissory note with a written promise made by the borrower to the lender (payee) to pay a certain, definite sum at a specified date.
Interest revenue on the note is calculated as: Principal x Interest Rate x Time
The total interest revenue is $8,000 x 6%/12 x 6 months = $240.
Monthly interest revenue is therefore $240 / 6 months = $40.
Total interest as at December 31 (Nov 1 - Dec 31): $40 x 2 months = $80.
The moving activity of Alpha Inc. has an expected cost of $200,000. Expected direct labor hours are 50,000, and the expected number of moves is 90,000. What is the best activity rate for moving? (Note: Round answer to two decimal places.)
Answer:
$2.22 per moves
Explanation:
Activity rate for moving =expected cost/Expected no of moves =$200000/90000 =$2.22 per mover
The table shows the terms of a fixed-rate mortgage.
Which formula should be used to correctly calculate the
monthly mortgage payment?
Component
Cost
[R(1 - R)"
(1 + R)?
(P) Principal
$200,000
[R(1 + R)"]
(R) Monthly interest rate
.4%
1 + R)
(n) Total number of
monthly payments (30-
year term)
360
[(1 + R"
M=pl
p[R(1 + R)"
(N + R)
(M) Monthly payment
$1059.85
Answer: attached picture.
Answer:
Its B :)
Explanation: