Answer:
Instructions are listed below.
Explanation:
Giving the following information:
Sheridan Company’s standard labor cost per unit of output is $33.00 (3.00 hours x $11.00 per hour). During August, the company incurs 2,970 hours of direct labor at an hourly cost of $12.10 per hour in making 1,100 units of finished product.
Direct labor efficiency variance= (SQ - AQ)*standard rate
Direct labor efficiency variance= (3,300hs - 2,970hs)*11= $3,630 favorable
Direct labor rate variance= (Standard Rate - Actual Rate)*Actual Quantity
Direct labor rate variance= (11 - 12.1)*2,970= $3,267 unfavorable
Expected purchases for June and July are $ 78 comma 000 and $ 92 comma 000, respectively. Purchases for May were $ 59 comma 000. All purchases are paid 40% in the month of purchase and 60% the following month. At what amount are June payments for purchases budgeted?
Answer:
$66,200
Explanation:
Given,
Purchases in May = $59,000
Purchases in June = $78,000
Purchases in July = $92,000
All purchases are paid 40% in the month of purchase and 60% the following month.
Therefore,
Amount paid in June = 60% purchases in May + 40% Purchases in June
= 60% × $59000 + 40% × $78000
= $35000 + $31200
= $66,200
Walters manufactures a specialty food product that can currently be sold for $22.90 per unit and has 20,900 units on hand. Alternatively, it can be further processed at a cost of $12,900 and converted into 12,900 units of Deluxe and 6,900 units of Super. The selling price of Deluxe and Super are $30.90 and $20.90, respectively. The incremental net income of processing further would be:
Answer:
Increamental net income = $529,920-$478.610 = $51310
Explanation:
Total sales revenue before the further processing = $22.9 * 20,900 =
$478.610
Total net sales revenue after the further processing = ($30.9 *12900)+($20,9*6900)-$12,900 = $529,920
Increamental net income = $529,920-$478.610 = $51310
The Baldwin's workforce complement will grow by 10% (rounded to the nearest person) next year. Ignoring downsizing from automating, what would their total recruiting cost be? Assume Baldwin spends the same amount extra above the $1,000 recruiting base as they did last year. Relevant information: The workforce complement this year is 471, recruiting cost is 543k, recruiting spend is 5000k. Answer choices: 3.108 mil, 235k, 2.59 mil, or 282k
Answer:
3.108 mi
Explanation:
at present the workforce complement = 471 which has to grow by 10%
So, the complements after growth = 471 x 1.1 = 518 (rounded off)
Total recruiting cost = No. of complements x ($1000 + Recruiting spend)
= 518 x ($1000 + $5000)
= $3,108,000 i.e. 3.108 mi
The recruitment cost for Baldwin's workforce next year, given the same additional spend per person as the previous year and a 10% increase in the workforce, is expected to be $2.842866 Million. This isn't among the answer options given, which may suggest an error in the question or in the options.
Explanation:In this question, the Baldwin's workforce complement is expected to grow by 10% next year. The workforce complement this year is 471, meaning it would become 471×1.1=518 next year (rounded to the nearest person). We were given that the recruiting cost this year is 543k, and the additional amount spent above the $1,000 recruiting base last year is $5,000k - $543k = $4,457k.
Assuming the Baldwin spends the same additional amount as they did last year, their total recruiting cost next year can be estimated. Given: Base Recruiting cost = $1,000 , Additional Recruiting cost = $4,457/person. Hence , if they hire 518 people, The total cost of the recruiting would be (Base cost + Additional per person cost)× number of people hired = (1000+4457)× 518 = $2.842866 Million.
However the given options do not include this amount, so there might be an error in the question or in the specified options.
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The following items appear on the balance sheet of a company with a one-year operating cycle. Identify the proper classification of each item as follows: C if it is a current liability, L if it is a long-term liability, or N if it is not a liability. Notes payable (due in 13 to 24 months). Notes payable (due in 6 to 12 months). Notes payable (mature in five years). Current portion of ling-term debt. Notes payable (due in 120 days). FUTA taxes payable. Accounts receivable. Sales taxes payable. Salaries payable. Wages payable.
Answer
The answer and procedures of the exercise are attached in a microsoft excel document.
Explanation
Please consider the data provided by the exercise. If you have any question please write me back. All the exercises are solved in a single sheet with the formulas indications.
Final answer:
Items on a balance sheet are classified based on when they are due. Notes payable due within one year are current liabilities, while those maturing beyond one year are long-term liabilities. Accounts receivable is not a liability, but an asset.
Explanation:
Items on a company's balance sheet are classified as either current liabilities, long-term liabilities, or not liabilities based on their nature and the duration within which they are expected to be settled. The classifications for the given items are as follows:
Notes payable (due in 13 to 24 months) - L (long-term liability)
Notes payable (due in 6 to 12 months) - C (current liability)
Notes payable (mature in five years) - L (long-term liability)
Current portion of long-term debt - C (current liability)
Notes payable (due in 120 days) - C (current liability)
FUTA taxes payable - C (current liability)
Accounts receivable - N (not a liability)
Sales taxes payable - C (current liability)
Salaries payable - C (current liability)
Wages payable - C (current liability)
It is important to note that accounts receivable represent money that is owed to the company and is therefore an asset, not a liability. Items classified as current liabilities are those expected to be paid within the company's one-year operating cycle, while long-term liabilities are obligations that are due beyond one year.
alifornia Surf Clothing Company issues 1,000 shares of $1 par value common stock at $32 per share. Later in the year, the company decides to purchase 100 shares at a cost of $35 per share. Record the purchase of treasury stock.
Answer:
Record the purchase of treasury stock.Treasury Stock $3,500 - CREDIT
Cash $3,500 - DEBIT
Explanation:
If the company purchase the shares and keep it in the company the journal entry it's as detailled, in this case the company keep the shares in the accounting and the shares could be reissued in the future.
The total shares purchases are 100 * $35 = $3,500.
When a firm has international operations, choosing the most appropriate structure depends upon the extent of international expansion, the type of strategy, and the degree of market diversity. True False
Answer:
False.
Explanation:
In deciding which structure is most appropriate for a company with international operations to adopt, some factors must be considered, namely: The extent of international expansion, whether the strategy used by the company will be global, transnational or multi-domestic, and the degree of product diversity, which directly influences the decision of which structure will suit the effective management of the organization's existing product chain.
You observe that the inflation rate in the United States is 1.4 percent per year and that T-bills currently yield 1.9 percent annually. Use the approximate international Fisher effect to answer the following questions.
a. What do you estimate the inflation rate to be in Australia, if short-term Australian government securities yield 9 percent per year? (Enter your answer as a percent rounded to 1 decimal place, e.g., 32.1.)
Inflation rate_____________ %
b. What do you estimate the inflation rate to be in Canada, if short-term Canadian government securities yield 12 percent per year? (Enter your answer as a percent rounded to 1 decimal place, e.g., 32.1.)
Inflation rate___________ %
c. What do you estimate the inflation rate to be in Taiwan, if short-term Taiwanese government securities yield 10 percent per year? (Enter your answer as a percent rounded to 1 decimal place, e.g., 32.1.)
Inflation rate_________ %
Answer:
(a) 8.47%
(b) 11.45%
(c) 9.46%
Explanation:
International Fisher effect is as follows:
[tex]\frac{1+ih}{1+if}=\frac{1+ph}{1+pf}[/tex]
where,
ih = Nominal interest rate of home country
if = Nominal interest rate of foreign country
ph = Inflation rate of home country
pf = Inflation rate of foreign country
(a) Inflation rate to be in Australia, if the short-term Australian government securities yield 9% per year,
[tex]\frac{1+ih}{1+if}=\frac{1+ph}{1+pf}[/tex]
[tex]\frac{1.019}{1.09}=\frac{1.014}{1+pf}[/tex]
1 + pf = 1.0847
pf = 1.0847 - 1
= 0.0847 or 8.47%
Therefore, the inflation rate in Australia is 8.47%.
(b) Inflation rate to be in Canada, if short-term Canadian government securities yield 12 percent per year,
[tex]\frac{1+ih}{1+if}=\frac{1+ph}{1+pf}[/tex]
[tex]\frac{1.019}{1.12}=\frac{1.014}{1+pf}[/tex]
1 + pf = 1.1145
pf = 1.1145 - 1
= 0.1145 or 11.45%
Therefore, the inflation rate in Canada is 11.45%.
(c) Inflation rate to be in Taiwan, if short-term Taiwanese government securities yield 10 percent per year,
[tex]\frac{1+ih}{1+if}=\frac{1+ph}{1+pf}[/tex]
[tex]\frac{1.019}{1.1}=\frac{1.014}{1+pf}[/tex]
1 + pf = 1.0946
pf = 1.0946 - 1
= 0.0946 or 9.46%
Therefore, the inflation rate in Taiwan is 9.46%.
Acme Manufacturing makes their preliminary economic studies using a before-tax MARR of 17%.More detailed studies are performed on an after-tax basis. If their effective tax rate is 22%, what is the after-tax MARR?
Answer:
The after-tax MARR is 13.26%
Explanation:
After - tax MARR = Before tax MARR*(1 - tax rate)
= 17%*(1 - 22%)
= 13.26%
Therefore, The after-tax MARR is 13.26%
the origin of life broadly conforms to the Oparin-Haldane model, then early in life's origin there was not a distinction between genotype and phenotype. Describe at least two features that distinguish genotype from phenotype (2). At what stage in the evolution of life would it have been possible to make this distinction (1)? Explain your answer. (2)
Answer:
Phenotypes are the visible characteristics of an organism. In the case of humans, phenotypes are determined by things like eye color, hair color, hair texture, or skin color.
Genotype is the total genes, or genome, of an organism, whether they are expressed or not, visibile or not.
For example, a brown-eyed person can have both a dominant gene encoding for brown eye color, and a recessive gene encoding for blue eye color. Phenotypically, this person has brown eyes, but his genotype includes both brown eyes genes and blue eyes genes.
Phenotype could have been distinguished from genotype when the firs multicellular organisms emerged.
The director of the Environmental Protection Agency has been in the news recently for overspending on luxuries for his office, such as a $250,000 bathroom renovation. A Congressional committee investigation is instigated. This is an example of ______.
Answer:
Fire alarm oversight
Explanation:
Fire alarm oversight is an oversight which becomes active or in action only when there is evidence or proof of bureaucratic wrongdoing.
In this case, the EPA (Environmental Protection Agency) is in the news for overspending on the luxuries for the office like they spent $250,000 for the renovation of the bathroom. A committee investigates the scenario. Therefore, it is an example of the fire alarm oversight.
Hsu Company issued $100,000 of 8% bonds on January 1, 20Y8, at face value. The bonds pay interest semiannually on June 30 and December 31, 20Y8. The total interest expense related to these bonds for the year ended December 31, 20Y8, is
Answer:
$8,000
Explanation:
The computation of the total interest expense is shown below:
On June 30
= Face value × rate of interest × number of months ÷ (total number of months in a year)
= $100,000 × 8% × (6 months ÷ 12 months)
= $4,000
The 6 months is calculated from January 1 to June 30
On December 31
= Face value × rate of interest × number of months ÷ (total number of months in a year)
= $100,000 × 8% × (6 months ÷ 12 months)
= $4,000
The 6 months is calculated from June 30 to December 31
So, the total interest expense would be
= $4,000 + $4,000
= $8,000
Final answer:
The total interest expense related to Hsu Company's $100,000 of 8% bonds for the year ended December 31, 20Y8, is $8,000, as they pay semiannual interest payments of $4,000 each.
Explanation:
The question asks for the calculation of the total interest expense related to the bonds issued by Hsu Company for the year ended December 31, 20Y8. Since these are 8% bonds issued at face value, the interest expense is straightforward to calculate. The annual interest rate is 8%, but since these bonds pay interest semiannually, each payment will be 4% of the face value. Therefore, the interest payments for each period (June 30 and December 31) will be $100,000 imes 4% = $4,000. Since there are two payments per year, the total interest expense for the year is $4,000 imes 2 = $8,000.
"Alan Meer inherits a hotel from his grandmother, Mary, on February 11 of the current year. Mary bought the hotel for $730,000 three years ago. Mary deducted $27,000 of cost recovery on the hotel before her death. The fair market value of the hotel in February is $725,000. (Assume that the alternative valuation date is not used.)"
Answer
The answer and procedures of the exercise are attached in the following image.
Explanation
Please consider the data provided by the exercise. If you have any question please write me back. All the exercises are solved in a single sheet with the formulas indications.
Which of the following is NOT a benefit of budgeting. (Select all the answers that apply) Group of answer choices The budget provided the foundation for preparing financial statements included in the 10K report to the SEC. Requires all levels of management to plan ahead Facilitates coordination of activities within the business It motivates personnel throughout organization to meet planned objectives Provides definite objectives for evaluating performance
Answer:
The budget provided the foundation for preparing financial statements included in the 10K report to the SEC.
Explanation:
The foundation for preparing financial statements is not budgeting but accounting. Financial statements such as a balance sheet or an income statement are reports that must be according to generally accepted accounting principles Accounting helps to prepare a budget or management plan providing financial data.
Only the statement 'The budget provides the foundation for preparing financial statements included in the 10K report to the SEC' seems not directly related to the benefits of budgeting, as preparation for the 10K SEC report requires additional data not always included in a budget. Budgeting focuses on planning, coordination, motivated personnel, and performance evaluation. The budget constraint framework also considers future decisions and consumption, not past 'sunk costs'.
Explanation:The benefit that seems not to fit with the concept of budgeting is: 'The budget provides the foundation for preparing financial statements included in the 10K report to the SEC.'
While the budget can provide details about expected income and expenditures and can feed into the financial statements, it is not directly responsible for preparing the 10K SEC report - this involves additional information not necessarily in a budget like corporate governance. All the other benefits listed here are characteristic for budgeting in the sense that they involve planning, coordination, motivation of personnel, and evaluation of performance.
The budget constraint framework involves decisions about what will happen next and does not consider past 'sunk costs'. It is focused on income, what you will consume, and the relationship between these two variables. Therefore, budgeting cannot undo past financial actions, but it can help for proper planning of future activities and resources, aligning them with business strategy, and forecasting possible situations.
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Which of the following statements are consistent with how inflation affects the three functions of money? Check all that apply.
a. As a medium of exchange, money will be less in demand as prices rise because more money will be required to function from day to day.
b. As a unit of account, money might become less useful as rising prices make comparisons of data from one point in time to another more difficult
c. Money is more useful as a store of value when inflation makes each dollar worth less.
d. As a medium of exchange, money will be more in demand as prices rise because more money will be required to function from day to day
e. Money is less useful as a store of value when inflation makes each dollar worth less.
f. As a unit of account, money will remain equally useful, regardless of inflation
Answer:
B,C, D, E
Explanation:
B. Rising prices (inflation) makes comparism of financial data less reliable. This is one of the major drawbacks of historic financial information because such information does not take into account the impact of inflation.
C. Money loses its attributes as a store of value in inflationary period. This is because the nominal value of money increase through an increase in Consumer Price Index (CPI) while the real value of money drops as the unit amount of purchasing power decrease from increase in prices.
D. The demand for money increases in inflationary period as more money chases few goods. This reduces purchasing power of individuals and leads to rise in prices.
E. This has the potential of reducing purchasing power as money loses its value in periods of inflation.
Inflation can increase the demand for money as a medium of exchange, make it less useful as a store of value, and complicate its usage as a unit of account.
Explanation:The effects of inflation on the three functions of money - a medium of exchange, a unit of account, and a store of value - can be understood as follows:
a and d: Money, as a medium of exchange, will be more in demand as prices rise, because more money will be required to function day to day.
b: As a unit of account, money might become less useful during inflation, as rising prices make comparisons of data from different points in time more difficult.
e: Money becomes less useful as a store of value when inflation makes each dollar worth less – not more (c).
f: Although inflation can affect how we view money as a medium of exchange or a store of value, it does not necessarily make money less useful as a unit of account. However, it can make it challenging to compare the value of goods and services over time.
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Good credit: The Fair Isaac Corporation (FICO) credit score is used by banks and other lenders to determine whether someone is a good credit risk. Scores range from 300 to 850, with a score of 720 or more indicating that a person is a very good credit risk. An economist wants to determine whether the mean FICO score is more than the cutoff of 720. She finds that a random sample of 100 people had a mean FICO score of 737 with a standard deviation of 92. Can the economist conclude that the mean FICO score is greater than 720? Use the =α0.01 level of significance and the critical value method.
The one-sample t-test can be used to test if the mean FICO score is more than 720. We calculate a t statistic and compare it to a critical value at a 0.01 significance level. We reject H0 if our statistic is greater than the critical value, concluding that the mean score is greater than 720.
Explanation:In this case, the economist can use a one-sample t-test to determine if the mean FICO score of the population is greater than 720. The null hypothesis (H0) is that the population mean is 720, and the alternative hypothesis (Ha) is that the population mean is greater than 720.
First, we need to calculate the t statistic using the formula: t = (Xbar - μ) / (s/√n), where Xbar is the sample mean (737), μ is the population mean under the null hypothesis (720), s is the sample standard deviation (92), and n is the sample size (100).
After calculating, we would compare this t statistic with the t critical value at α = 0.01 level of significance. If the calculated t is greater than the critical value, then we would reject H0 and conclude that the mean FICO score is greater than 720. If it's less than or equal to the critical value, we would fail to reject H0, meaning we would have insufficient evidence to conclude that the mean score is more than 720.
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Final answer:
To determine if the mean FICO score is greater than 720, a hypothesis test is conducted using the critical value method. The test statistic is calculated and compared to the critical value at the α = 0.01 level of significance. Based on the calculations, the economist cannot conclude that the mean FICO score is greater than 720.
Explanation:
To determine whether the mean FICO score is greater than 720, we can perform a hypothesis test using the critical value method. The null hypothesis (H0) is that the mean FICO score is equal to or less than 720, while the alternative hypothesis (Ha) is that the mean FICO score is greater than 720. Using the given information, we calculate the test statistic as follows:
test statistic = (sample mean - hypothesized mean) / (standard deviation/sqrt (sample size))
Plugging in the values, we get: test statistic = (737 - 720) / (92 / sqrt(100)) = 1.847
Next, we find the critical value at the α = 0.01 level of significance. Since this is a one-tailed test and the sample size is large (n ≥ 30), we can use the normal distribution. The critical value for α = 0.01 is Z = 2.33.
Since the test statistic (1.847) is less than the critical value (2.33), we fail to reject the null hypothesis. Therefore, the economist cannot conclude that the mean FICO score is greater than 720 at the α = 0.01 level of significance.
Schedule M–1 of Form 1120 is used to reconcile financial accounting net income with taxable income reported on the corporation’s income tax return as follows: Net income per books + Additions - Subtractions = Taxable income. Classify the following items as additions or subtractions in the Schedule M–1 reconciliation.
A. Life insurance proceeds received upon death of covered executive.
B. Tax depreciation in excess of book depreciation.
C. Federal income tax per books.
D. Capital loss in excess of capital gain.
E. Charitable contributions in excess of taxable income limitation.
F. Premiums paid on life insurance policies covering executives (corporation is beneficiary).
G. Domestic production activities deduction.
Answer:
Explanation:
The following items were deducted and added in the Schedule M–1 reconciliation
Additions:
C. Federal income tax per books.
D. Capital loss in excess of capital gain.
F. Premiums paid on life insurance policies covering executives (corporation is beneficiary).
Subtractions:
A. Life insurance proceeds received upon death of covered executive.
B. Tax depreciation in excess of book depreciation.
E. Charitable contributions in excess of taxable income limitation.
G. Domestic production activities deduction.
Final answer:
Schedule M-1 of Form 1120 is used to reconcile financial accounting net income with taxable income reported on the corporation's income tax return.
Explanation:
Schedule M-1 of Form 1120 is a tax form used by corporations in the United States to reconcile the differences between financial accounting income and taxable income. It provides a detailed breakdown of adjustments made to align these two income figures. The given items can be classified as follows:
Addition: Life insurance proceeds received upon death of covered executive.Subtraction: Tax depreciation in excess of book depreciation.Addition: Federal income tax per books.Addition: Charitable contributions in excess of taxable income limitation.Subtraction: Capital loss in excess of capital gain.Addition: Premiums paid on life insurance policies covering executives (corporation is beneficiary).Addition: Domestic production activities deduction.The 2008 credit crunch occurred when banks reduced lending in response toa the loss of asset value for mortgage-backed securities and mortgage loans.b having too little capital to satisfy capital requirements.c an excess of bank capital.d an increase in the required reserve ratio.
Answer:
The correct answer is option a.
Explanation:
In 2007-2009 financial crisis occurred globally which originated in the US. It was triggered in the US because of the collapse of the housing bubble which caused the price of houses to decline.
The housing bubble was backed by mortgages securities. The percentage of lower quality or subprime mortgages increase around 2004-06.
This reduction in the asset value for mortgage securities caused the banks to reduce their lending as the debts on consumers and businesses were increasing.
This caused the credit crunch in the year 2008.
Electric, Inc. was incorporated on January 1, 2016. Electric issued 4,000 shares of common stock and 1,200 shares of preferred stock on that date. The preferred stock is cumulative, $100 par, with an 12% dividend rate. Electric has not paid any dividends yet. In 2019, Electric had its first profitable year, and on November 1, 2019, Electric declared a total dividend of $63,000. What is the total amount that will be paid to preferred shareholders?
Answer:
$57,600
Explanation:
The computation of the total amount paid to preferred shareholders are shown below:
= Number of shares for preferred stock × par value × dividend rate × number of years
= 1,200 shares × $100 × 12% × 4 years
= $57,600
In case of cumulative, the number of years would be four years for dividend paid
All other information which is given is not relevant. Hence, ignored it
Golden Enterprises started the year with the following: Assets $111,000; Liabilities $39,000;Common Stock $69,000; Retained Earnings $3,000.During the year, the company earned revenue of $5,900, all of which was received in cash, and incurred expenses of $3,450, all of which were unpaid as of the end of the year. In addition, the company paid dividends of $1,900 to owners. Assume no other activities occurred during the year.What was the amount of net income for the year?A. $2,450B. $5,900C. $3,450D. $1,900
Answer:
Option A.
Explanation:
Given information:
Assets = $111,000
Liabilities = $39,000
Common Stock = $69,000
Retained Earnings = $3,000
Revenue = $5,900
Incurred expenses = $3,450
Dividends = $1,900
We need to find the amount of net income for the year.
Formula for net income is
Net income = Total revenue - Total expenses
= $5,900 - $3,450
= $2,450
The amount of Golden's net income for the year is $2,450.
Therefore, the correct option is A.
Answer: The answer is C $3,450
Explanation:
Journal entry
Dr Cr
$ $
Asset. 111,000
Common Stock. 69,000
Revenue 5,000
Less: Expenses (3,450)
----------------
1,550
Retained earning 3,000
Liabilities 39,000
Dividend 1,900
Balance c/d 3,450
------------------ ---------------------
114,450 114,450
--------------------- -------------------------
Monsanto just came out with a new genetically modified seed that it believes will increase crop yields. The seed has been modified to withstand drought, and it kills insects that frequently feed on it. This is important especially because insects have begun developing a tolerance for many of Monsanto's genetically modified seeds already out on the market.
Because these seeds are new to the market, Monsanto wants to engage in a major integrated marketing communications campaign. It knows that it will have to convince farmers about the advantages of its new seeds and invites some of its major customers to its laboratory to see how the seeds are created. The scientists inform the farmers during the visit about how the seeds will increase their crop yields. This is most likely an example of__________.
If Monsanto just came out with a new genetically modified seed that it believes will increase crop yields. Is most likely an example of a sales promotion activity.
What is sales promotion activity?
The goal of sales promotion campaigns is to persuade consumers to buy a good or service. In this instance, Monsanto is trying to convince farmers of the advantages of its new genetically modified seeds by utilizing the laboratory visit as a marketing tool.
The farmers and Monsanto's experts can directly communicate during the lab visit, which allows them to talk about the benefits of the seeds and answer any queries or worries. Using a customized strategy can be a good method to gain credibility, inspire trust, and sway farmers' purchasing decisions.
Therefore this is an example of a sales promotion activity.
Payback period computation; even cash flows LO P1 Compute the payback period for each of these two separate investments:
a. A new operating system for an existing machine is expected to cost $260,000 and have a useful life of six years. The system yields an incremental after-tax income of $75,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $10,000.
b. A machine costs $210,000, has a $14,000 salvage value, is expected to last eleven years, and will generate an after-tax income of $41,000 per year after straight-line depreciation.
Answer:
Please see attachment
Explanation:
Please see attachment
Conversion privileges, offered by many mutual fund families, refer to the ability to:_________________.
A. automatically convert dividends and capital gains into more shares in the fund.
B. switch from one fund to another within the same family, often without paying a commission.
C. redeem mutual fund shares for cash.
D. switch from one fund to another in the same family without incurring any tax liability.
Answer:
The correct answer is letter "B": switch from one fund to another within the same family, often without paying a commission.
Explanation:
Conversion privileges or exchange privileges are opportunities for mutual fund investors to change from one fund to another fund in the same family. Most fund companies will charge investors a reasonably low fee or in some cases, there are no charges at all.
a. Paid $40,000 cash to replace a compressor on a refrigeration system that extends its useful life by four years.b. Paid $200 cash per truck for the cost of their annual tune-ups.c. Paid $175 for the monthly cost of replacement filters on an air-conditioning system.d. Completed an addition to an office building for $225,000 cash.1. Classify the above transactions as either a revenue expenditure or a capital expenditure. 2. Prepare the journal entries to record transactions a and d.
Transactions (a) and (d) are capital expenditures while (b) and (c) are revenue expenditures. The journal entries for transactions (a) and (d) deduct the cash while crediting the respective equipment and building accounts.
Explanation:The transactions mentioned are classified as either capital expenditure or revenue expenditure.
Transaction (a) relates to the replacement of a major component of a refrigeration system which extends its useful life by four years; thus it is a capital expenditure.
Transaction (b) is a regular maintenance cost, therefore it is a revenue expenditure.
Transaction (c), involving the replacement filters of an air-conditioning system, is also a revenue expenditure as it pertains to a regular operational expense.
Transaction (d) is a capital expenditure because it results in an improvement to an office building.
The journal entries to record transactions (a) and (d) will be:
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Evaluate the following statement: "Tests of sales and cash receipts transactions are such an essential part of every audit that I like to perform them as near the end of the audit as possible. By that time I have a fairly good understanding of the client's business and its internal controls because confirmations, cutoff tests, and other procedures have already been completed." (Select all answers that apply.) A. As long as the auditor has performed sufficient analytical procedures to evaluate the financial information through analysis of plausible relationships among financial and nonfinancial data, it is acceptable to perform tests of sales and cash receipts transactions as near the end of the audit as possible. B. The auditor should attempt to understand the entity and its environment, including internal controls, as early as practical through the analysis of the accounting system, tests of controls, and substantive tests of transactions. C. The primary purpose of testing sales and cash receipts transactions is to evaluate the internal controls so that the scope of the substantive tests of the account balances may be set. If the auditor performs the tests of details of balances prior to testing internal controls, no benefit will be derived from the tests of controls. D. None of the above.
Answer:B. The Auditor should attempt to understand the entity and it's environment, Including Internal controls as early as practical through the analysis of the accounting system, test of controls and substantive test of transaction.
Explanation:
The first major duty of the Auditor is to understand the entity and it's environment to determine it's inherent risks, to evaluate the existing Internal controls to determine it's workability which invariably determines the level of substantive test to be carried out.
The test of sales and cash receipt thus not hereald an audit work but are carry out to confirm the strength or weakness of the internal control already documented.
For an effective audit, understanding the client's internal controls early (Option B) and evaluating them to set the scope of substantive tests (Option C) is crucial. Performing these tests late might omit critical insights gained from early evaluations.
The statement to evaluate suggests performing tests of sales and cash receipts transactions near the end of the audit. While there is some practicality in understanding the client’s business and internal controls by this time, the timing and sequence of audit procedures play a crucial role. Here, selecting the right options is important:
B: The auditor should attempt to understand the entity and its environment, including internal controls, as early as practical through the analysis of the accounting system, tests of controls, and substantive tests of transactions. Performing this understanding early helps in planning and executing further audit procedures effectively.C: The primary purpose of testing sales and cash receipts transactions is to evaluate the internal controls so that the scope of the substantive tests of the account balances may be set. If the auditor performs tests of details balances before testing internal controls, the benefits of such tests may be underutilized.Option A is less relevant because, while analytical procedures are useful, they are not a replacement for early testing of internal controls.
A number of years ago, Lee acquired a 20% interest in the BlueSky Partnership for $60,000. The partnership was profitable through 2018, and Lee's amount at risk in the partnership interest was $120,000 at the beginning of 2019. BlueSky incurred a loss of $400,000 in 2019 and reported income of $200,000 in 2020. Assuming that Lee is not a material participant, how much of his loss from BlueSky Partnership is deductible in 2019 and 2020? Consider the at-risk and passive activity loss rules, and assume that Lee owns no other passive investments.
Answer:
Please see attachment
Explanation:
Please see attachment
Billy's is currently an all equity firm that has 115000 shares of stock outstanding at a market price of $36.22 a share. The firm has decided to leverage its operations by issuing $100000 of debt at an interest rate of 9.6 percent. This new debt will be used to repurchase shares of the outstanding stock. The restructuring is expected to increase the earnings per share. What is the minimum level of earnings before interest and taxes that the firm is expecting? Ignore taxes.
Answer:
So, Break-even EBIT is $265,643.45
Explanation:
Let Break-even EBIT be $x
Number of shares outstanding = 150,000
Current Price of share = $39.36
EPS = EBIT / Number of shares outstanding
EPS = $x / 150,000
Levered Plan:
Value of Debt = $100,000
Interest Rate = 9.6%
Interest Expense = 9.6% *$100,000 = $9600
Number of shares repurchased = $100,000 / $39.36
Number of shares repurchased = $2,541
Number of shares outstanding = 150,000 - 2,541
Number of shares outstanding = 147,459
EPS = (EBIT - Interest Expense) / Number of shares outstanding
EPS = ($x - $9600) / 147,459
EPS under All equity plan = EPS under levered plan
$x / 150,000 = ($x - $9600) / 147,459
147,459 * $x = 150,000 * $x - $675,000,000
$675,000,000 = 2,541 * $x
$x = $265,643.45
So, Break-even EBIT is $265,643.45
An investment project provides cash inflows of $1,175 per year for eight years. a. What is the project payback period if the initial cost is $3,900? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) b. What is the project payback period if the initial cost is $4,950? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) c. What is the project payback period if the initial cost is $10,400?
Answer:
A. 3.32 years
B. 4.21 years
C. No payback period
Explanation:
The payback period calculates the amount of time it takes the cumulative cash flows to equal the amount invested .
The attached tables, calculates how the pay back periods are calculated.
For the project with an investment of $3900, the payback period = 3 years + 375 / 1175 Years = 3.32 years
For the project with an investment of $4950, the payback period = 4 years +250 / 1175 Years = 4.21 years
For the project with an investment of $10,400, there is no payback.
Roxy operates a dress shop in Arlington, Virginia. Lisa, a Maryland resident, comes in for a measurement and purchases a $2,700 dress. Lisa returns to Virginia a few weeks later to pick up the dress and drive it back to her Maryland residence where she will use the property. Assuming that Virginia's sales tax rate is 5 percent and that Maryland's sales tax rate is 6 percent, what is Roxy's sales tax liability?
A. $0.
B. $135 to Virginia.
C. $135 sales tax to Virginia and $27 use tax to Maryland.
D. $162 to Maryland.
E. $135 sales tax to Virginia and $27 use tax to Maryland is Incorrect
Answer:
B. $135 to Virginia
Explanation:
The computation of the Roxy tax liability is shown below:
Roxy tax liability = Purchase value of tax rate × Virginia's sales tax rate
= $2,700 × 5%
= $135
The tax is paid by the individual and not the company. So, so company owes only sales tax
All other information which is given is not relevant. Hence, ignored it
3. Project Manager John Boy has a policy of only using experienced, dependable, and proven sellers instead of selecting sellers through open competition as a means to manage procurement risk. What risk management technique is John Boy using? A. Risk Acceptance. B. Risk Mitigation. C. Risk Transfer D. Risk Avoidance.
Answer: Risk mitigation
Explanation: In simple words, risk mitigation refers to the strategy in which the management of an organisation tries to reduce the threat that may occur to the business in future by taking suitable risk in present.
Usually the threats it reduces related to the problems affecting the continuity of the business.
In the given case, The manager of the company is employing highly qualified personnel instead of less qualified to manage procurement risk. Hence he is taking actions to reduce risk that may arise in future. Thus, the correct option is B.
Thomas Kratzer is the purchasing manager for the headquarters of a large insurance company chain with a central inventory operation. Thomas’s fastest moving inventory item has a demand of 6000 units per year. The cost of each unit is $100.00, and the inventory carrying cost is $10.00 per unit per year. The average ordering cost is $30.00 per order. It takes about 5 days for an order to arrive, and demand for 1 week is 120 units (this is a corporate operation, there are 250 working days per year). a. What is the EOQ? b. What is the average inventory if the EOQ is used? c. What is the optimal number of orders per year? d. What is the optimal number of days in between any two orders? e. What is the annual cost of ordering and holding and holding inventory? f. What is the total annual inventory cost, including cost of the 6,000 units?
Answer:
a. 190 Units
b.95 Units
c. 31.6
d.7.9 Units
e.$1.898
f.$601.898
Explanation:
Please see attachment