Testbank Multiple Choice Question 47 Deferred taxes should be presented on the balance sheet as a current amount. as reductions of the related asset or liability accounts. as a noncurrent amount. as either noncurrent or current.

Answer:

1.Quinlan distribution has realized a loss of

$214,480 of which $0 is recognized.

2. The shareholder received property with a basis of $321,720

Explanation:

1.

When property is been said to be distributed to shareholders the amount of dividend equal to the fair value of the said property which is $321,720 on the date of the distribution. Therefore the amount of taxable dividend is $321,720 which is before the dividends received deduction.

Therefore;

Net loss which shall not be allowed ($536,200-$321,720)

=$214,480

Quinlan distribution has realized a loss of

$214,480 which is not allowed to be recognized

2. Adjusted basis of the property distributed is $321,720

Answer:

hold only a fraction of deposits as reserves.

Explanation:

Money multiplier denotes the central bank's ability to create final deposits many times the initial deposits.

They do so because of their partial (fractional) reserve requirement, mandated by central bank, called as Legal Reserve Ratio = LRR

Money Multiplier = Final Deposits / Initial Deposits = 1 / Reserve Requirement

Eg :  Initial Deposits = 100 , LRR = 10%

On getting 100 initial deposits, banks retain 10% ie 10 as reserve, lend out remaining 90.  These 90 spent by borrower come back in the bank account of receiver. Out of 90, banks again retain 10% i.e 9 as reserves, lend 81 . Same process continues until :

Final Deposits = (1 / LRR) x Initial Deposits

Final deposits = (1 /0.1) i.e 10 times initial deposits

= 10,000

The forecast for the third quarter of this year (Jul, Aug, Sep) is 193.33 units using a three-quarter moving average.

To forecast the demand for the third quarter of this year using a three-quarter moving average, we'll calculate the average demand for the first and second quarters and use that average as the forecast for the third quarter.

First, calculate the moving averages for the last year's data and this year's data:

For last year (LY), the moving averages are:

- Q1 (Jan, Feb, Mar): (100 + 125 + 135) / 3 = 120

- Q2 (Apr, May, Jun): (175 + 185 + 200) / 3 = 186.67

- Q3 (Jul, Aug, Sep): (150 + 140 + 130) / 3 = 140

- Q4 (Oct, Nov, Dec): (200 + 225 + 250) / 3 = 225

For this year (TY), the moving averages for the available data are:

- Q1 (Jan, Feb, Mar): (125 + 135 + 135) / 3 = 131.67

- Q2 (Apr, May, Jun): (190 + 200 + 190) / 3 = 193.33

Now, we'll use the moving average of this year's Q2 (193.33) as the forecast for Q3 since it's the most recent data available.

So, the forecast for the third quarter (Jul, Aug, Sep) of this year is 193.33 units. This moving average method provides a simple forecast based on historical patterns, assuming that the recent trend in demand will continue into the next quarter.

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To forecast the demand for the third quarter, use the 3/4 moving average formula applied to the given history data

Given data:

The 3/4 moving average for the third quarter this year can be calculated using the following steps:

Answer: c. Canned sales presentations

Explanation:

Canned Sales presentations are the "ONE SIZE FITS ALL" of Sales presentations. They are organised and structured to ensure that they can give information to multiple types of people.

Canned Sales Presentations are not very flexible. They are generally used when information has to be repeated over and over to the same.or different types of people and usually already have all information that will be needed.

The Lords' University uses this type of presentations as they used an Automated Presentation that is mostly the same period in, period out but that is built to have all the information that is needed and can be repeated to multiple people (prospective students).

Final answer:

The Lords' University most likely uses canned sales presentations for their automated presentations at education fairs. These are pre-designed to be used repeatedly and fit well with the use of computer-based media like PowerPoint in business settings.

Explanation:

The Lords' University employs automated presentations during education fairs, which are likely to be canned sales presentations. These are pre-recorded or pre-designed presentations that can be used repeatedly without alteration for numerous audiences. Given that these presentations are automated and are not likely to change based on the audience's reactions or questions, they align with the definition of canned sales presentations rather than adaptive sales presentations, which are tailored to the audience's responses.

Computer-based media tools such as PowerPoint are commonly used to create such presentations, making them both accessible and easy to distribute across different settings, from small conference rooms to large amphitheaters. Effective presentation aids are integral to conveying information clearly and keeping the audience engaged, which is crucial in business settings where oral communication is the most common method yet susceptible to listeners' minds wandering.

Answer:

The correct answer is C. All of the above .

Explanation:

A protective covenant is there to ensure that the lenders interests are protected and that the recollect of the loan is possible.

Both of the answer a and b are expressing this in different ways.

Answer:

The correct answer is letter "C": All of the above.

Explanation:

A Protective Covenant is a term imposed on a loan or other form of debt arrangement that demands that the borrower maintain or even refrain from certain business activities. Covenants protect the borrowers from threats that they did not foresee when calculating the risk of the loan. Most loan agreements include a clause that the lender shall have the power to make the loan due and payable immediately if a covenant is violated.

Answer:

Record of transaction is given below

Explanation:

given data

Selling price of goods =  $900

Cost of goods sold = $590

solution

we get here Record of transaction in Rita Company that is

Inventory accounts   Dr   $900

Account payable    Cr      $900

and

Record of transaction in Linus Company is

Account receive able  Dr  $900

Sales revenue              Cr  $900

and

Cost of goods sold    Dr   $590

Inventory                    Cr    $590

To record the purchase and sale in Rita Company’s ledger using a perpetual inventory system, two transactions are made. First is the purchase of merchandise on account from Linus Company, second is the sale of the merchandise to Ellis for cash. This results in a gross profit of $310 for Rita Company.

The subject of the student's question involves recording business transactions using a perpetual inventory system for Rita Company. The example provided to help the student understand how to record transactions is:

Rita Company buys merchandise on account from Linus Company for $590. Then, Rita sells the goods to Ellis for $900 cash. The tabular summary to record these transactions would involve two components: the purchase transaction and the sales transaction.

Transaction 1 (purchase on account):

- Inventory $590

- Accounts Payable $590

Transaction 2 (sale for cash):

- Cash $900

- Sales Revenue $900

- Cost of Goods Sold $590

- Inventory $590

After these entries, Rita Company would see an increase in cash by $900, an increase in cost of goods sold by $590, and a decrease in inventory by $590, resulting in a gross profit of $310 from the sale ($900 - $590).

Answer:

Reserves = $70,000

Required reserves = $20,000

Excess Reserves = $50,000

Explanation:

The data given from the question:

Demand deposits = $200,000

Outstanding loans = $130,000

Reserve requirement = 10%

And we are solving for:

Reserves, Required Reserves and Excess Reserves

For these we will look at 3 balance sheet

Assets = Total liabilities + capital

Reserves + Outstanding Loan = Demand Deposits

Reserves + $130,000 = $200,000

Reserves = $70,000

Since reserve ratio =10%, Out of total $200,000 deposits, required reserves = $200,000 x 10% = $20,000

Excess Reserves = Total Reserves - Required Reserves = $(70,000 - 20,000) = $50,000.

Final answer:

Second Republic Bank has total Reserves of $70,000, Required Reserves of $20,000, and Excess Reserves of $50,000, with each calculated based on the given demand deposit of $200,000 and a 10% Federal Reserve requirement.

Explanation:

The question asks us to calculate the Reserves, Required Reserves, and Excess Reserves for Second Republic Bank given its demand deposits and outstanding loans, with the Federal Reserve setting the reserve requirement at 10%. To clarify these terms:

Reserves are the amount of funds a bank has on hand to cover any withdrawals made by clients.

Required Reserves is the amount that a bank must hold by regulation, which in this case is 10% of demand deposits.

Excess Reserves is any amount of money that a bank holds over the required minimum.

Assuming that Second Republic Bank must maintain 10% of demand deposits as reserves, we calculate the Required Reserves as 10% of $200,000, equaling $20,000.

Given that the bank has $130,000 in loans and loans and reserves together should equal total deposits, the total Reserves would equal demand deposits minus outstanding loans, which is $200,000 - $130,000 = $70,000. Therefore, the Excess Reserves would be the total Reserves minus the Required Reserves, which is $70,000 - $20,000 = $50,000.

Answer:

Expected value one year from now=D2/(k-g)

=2.25/(16%-6%)

=22.5

Explanation:

Answer:

I) The difference between the option's price and the value it would have if it were expiring immediately

Explanation:

Time value in options trading simply refers to the part of an option's premium (cost or price) which is attributed to the amount of the time remaining until expiration.

An addition of the option's time value and intrinsic value equals the total premium of an option.

Therefore, we can mathematically state that:

Time Value = Option Premuim(Price) - Intrinsic Value.

The Option Premuim is an amount of money known as the price or cost.

In an exchange for the right granted by the option, an option buyer pays for the premium to an option seller.

Generally, it is seen that the more time that remains until the expiration, the greater the time value of the option. This happens as a result of investors willing to pay a higher premium for more time since the longer time taken to execute contract will be profitable due to a favorable move in the underlying asset.

Also, the lesser time remaining on an option will result in lesser willingness of investors to pay because the probability for profitability is slim.

Answer:

I) The difference between the option's price and the value it would have if it were expiring immediately

Explanation:

Time value simply means the option's premium portion that is accountable to the amount of time remaining until the option contract expires.

These is the difference between the option's price and the value it would have if it were expiring immediately.

Time value is the premium amount that the those investing is desire to pay more than the intrinsic value.

Time value can be calculated using below formula;

Time Value = Options Premium - Intrinsic Value.

Call options helps to purchase shares of stock at a stable price until the expiration date.

The intrinsic value and the time value are the two areas of call option. These intrinsic value and time value helps to know when to buy the underlying stock.

However time value of the option increases with with the time remains untill expiration

Answer:

The price per ticket should be $37.5

Explanation:

First we need to determine the change in demand (attendance) as a result of every $1 increase in the price of ticket.

The ticket price increased by $4 (from 50 to 54) and the demand fell by 400 (from 2500 to 2100). The change per dollar is,  400 / 4 = 100.

So, for every $1 increase in price, demand falls by 100.

The revenue is calculated by multiplying price by quantity demanded. Revenue equation will be,

Let x be the change in price from $50.

Revenue = (50 + x)  * (2500 - 100x)

Revenue = 125000 - 5000x + 2500x - 100x²

Revenue = 125000 - 2500x - 100x²

To calculate the price that maximizes the revenue, we need to take the derivative of this equation.

d/dx = 0 - 1 * 2500x° - 2 * 100x

0 = -2500  -  200x

2500 = -200x

2500 / -200 = x

-12.5 = x

Price should be 50 - 12.5 = 37.5

At price $37.5 the revenue of the Opera House is maximized.

Answer:

1)

Beginning inventory = 0

Plus: purchases = 6950

Less: withdraws= 6400

    = ending inventory = 550

550-100 batteries used by staff= 450 batteries used in production

                          = 450 × $125 = $56250

Since 90% is completed, it means 10% is in WIP, i.e.,

           WIP = 10% × 56250

                   = 5625

completed  = 90% ×56250 = 50625

Since 30% of completed were unsold, it means remaining 70% were sold, which is COGS, i.e.,

         COGS = 70% × 50625

                     = 35437

Note: selling expense cannot be deteremined from the given information.

2) WIP and Finished Goods accounts would appear on the balance sheet while COGS and selling expense would appear in income statement at April 30.

The expenses for Devon Motor Company's batteries in April are distributed across various accounts: Raw Materials $68,750, Work in Process $78,750, Finished Goods $236,250, Cost of Goods Sold $472,500, and Selling Expense $12,500. The first three appear on the balance sheet whereas the last two appear on the income statement.

The cost of each battery is $125. The total cost of batteries purchased by the Devon Motor Company is $868,750 (6,950 batteries * $125 per battery).

For the second part of your question, raw materials, work in process and finished goods are all part of the balance sheet while cost of goods sold and selling expense are part of the income statement.

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Seneca Hill Winery must decide on grape varieties to plant based on probability assessments of future demand. A decision tree and expected value calculations can aid in making a profit-maximizing decision. Changes in probabilities and profit projections affect the decision, as seen with adjustments to the likelihood of demand scenarios and revenue from Chardonnay.

Decision Making, Chance Events, and Consequences

The decision to be made by Seneca Hill Winery involves choosing which variety or combination of grape varieties to plant: Chardonnay only, Riesling only, or both. The chance event is the future market demand for each type of wine, which could be strong or weak. The consequences are the financial outcomes or annual profits that result from the combination of these decisions and chance events.

Decision Tree Development

A decision tree is a visual representation that starts with the decision node (the choice of grape variety), followed by chance nodes (representing the strong or weak demand for each wine), and the ends with terminal nodes indicating the profits.

Expected Value Analysis

To maximize expected annual profit, we calculate the expected value for each strategy:

Both grapes offer the highest expected annual profit, so Seneca should plant both Chardonnay and Riesling grapes.

Revised Probabilities and Profit Projections

Changing the probability assessments affects the expected value calculations. With a higher likelihood of strong demand for both varieties when Chardonnay demand is strong, the expected profit changes, potentially altering the optimal decision. If Chardonnay profits decrease to $50,000 under strong demand, this also affects the expected values and might influence Seneca to reconsider the decision to plant Chardonnay only.

Answer:

Tobias may deduct $90,000 of his Solomon loss because he has passive activity income.$20,000 of his basis is suspended under Section 704(d).$25,000 of his loss is suspended under Section 465.

Explanation:

Answer:

The contribution margin is 531 972

Explanation:

Computation of contribution margin

The contribution margin is revenues - Variable costs

Sales  Revenue   ( 2 111 * 628)                                                    1 325 708

Variable manufacturing costs ( 2 111 * 352)                                  743 072

Variable Selling and Administrative costs ( 2 111 * 24)                   50 664

Contribution Margin                                                                       531 972

All costs of a fixed nature in manufacturing or selling and administrative expenses are not considered in determining the contribution margin

Answer:

Instructions are below.

Explanation:

Giving the following information:

Marigold Company estimates that annual manufacturing overhead costs will be $865,920. Estimated annual operating activity bases are direct labor cost $492,000, direct labor hours 49,200, and machine hours 98,400.

To calculate the estimated manufacturing overhead rate we need to use the following formula:

Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Direct labor cost:

Estimated manufacturing overhead rate= 865,920/492,000= $1.76 per direct labor dollar

Direct labor hour:

Estimated manufacturing overhead rate= 865,920/49,200= $17.6 per direct labor hour

Machine-hours:

Estimated manufacturing overhead rate= 865,920/98,400=$8.8 per machine hour

Answer:

$27,420

Explanation:

The computation of the annual financial advantage or disadvantage for the company is shown below:

Incremental revenue (2,600 units × $31) $80,600

Incremental cost  

Direct material (2,600 units × $6.20) $16,120

Direct labor  (2,600 units × $3) $7,800

Variable manufacturing overhead  (2,600 units × $3.30) $8,580

Additional variable cost  (2,600 units × $1.80) $4,680

Special molds  $16,000

Total incremental cost $53,180

Incremental profit (loss)     $27,420

We simply deduct the all incremental cost from the incremental revenue so that the incremental profit or loss could come

Answer:

Dwight Eisenhower sending federal troops to escort African American students to their new schools

Explanation:

Based on an 1879 law, the board of Education in Topeka, Kansas operated separate elementary schools for white and African-American students in Communities with more than 15,000 residents.

The Equal Protection Clause of the Fourteenth Amendment to the United states  constitution prohibits states from segregation public school students on the basis of race.

This marked a reversal of the "separate but equal" doctrine from Plessy v, Fergusson that had permitted separate schools for white and coloured children provided that the facilities were equal.

Answer:

The answer is option B. Dwight Eisenhower sending federal troops to escort African American students to their new schools was the action that lead to the eventual implementation of Brown vs. Board of Education in the South.

Explanation:

The U.S. Supreme Court ruled unanimously that racial segregation in public schools violated the Fourteenth Amendment to the Constitution, which prohibits the states from denying equal protection of the laws to any person within their jurisdictions on may 17, 1954.

But this decision was not implemented. Over three years later on on September 4, 1957,  the Arkansas National Guard was directed by Governor Orval Faubus to block the black students' entry into the high school.

Then, Eisenhower sent in federal troops to escort the Little Rock Nine into the school ans it drew national attention to the civil rights movement which eventually led to the implementation of  Brown vs. Board of Education in the South?

Answer:

Have little loyalty to their vendors.

Explanation:

Middlemen are intermediaries that buy goods from the producers and sell directly to the consumers. They assist the producers to get different feedbacks about the products from the consumer. Middlemen include wholesalers, retailers, brokers.

In some situations, middlemen increase the prices of various products thereby making it difficult for consumers to purchase, they also have little loyalty to the producers of a particular product they tend to purchase the product when there is high productivity but reject it when productivity reduces.

Answer:

Liquid Sleeve should select the  Type FE because it has a lower Present Value cost of $257,455.62

Explanation:

The preferred metal-based would be the one with owner a present value  cost.

So we will compute the present value of the the cost the two options.

Type FE =

Initiall cost = -150,000

PV of operating cost = -92,000× (1- (1.3)^(-2))/0.3

                                =  92,000 × 1.360946746

                                  = $(125,207.10)

PV of salvage value = 30,000 × (1.3)^(-3)=  17,751.48

Total PV =  (125,207.10) + (150,000) - 17,751.48 = $(257,455.62 )

Type A1

initial cost = -$280,000

PV of operating cost = 74,000 × (1- (1.3)^(-4))/0.3 =  160,301.81

PV of salvage value = 70,000 × (1.3)^(-4)=    24,508.95

Total Cost = (280,000) + -(160,301.81) + 24,508.95 = $(415,792.86)

Answer:

80%

Explanation:

For computing the return on investment first we have to need the following calculations

New contribution margin = Old contribution margin + increase  in contribution margin

= $260,000 + $30,000

= $290,000

And,

Net Income = Contribution margin - Total direct fixed costs

= $290,000 - $90,000

= $200,000

ROI = Net income ÷  average operating assets

= $200,000 ÷ $250,000

= 80%

Answer:

Excess of investment center income over the minimum return set by the management.

Explanation:

Residual income can be defined as the continuous flow of cash after a particular work/task has been completed. This means an individual continuous to get payment after a work is done. This includes the amount of money that is acquired from business investments, royalties gotten from a published article or book, renting of an apartment, creating an application, working with different affiliates.

Residual income enables an individual to work on other business opportunities while still earning money from the previous efforts.

Answer:

Cost of goods manufactured $ 2567,400

Explanation:

Ethtridge Manufacturing Company

Statement of Cost of Goods Manufactured

For the Month Ended July 31

Direct materials $1,150,000

Direct labor 966,000

Total factory overhead 490,500

Total manufacturing costs $  2606500

Add July 1 Work in process inventory, 316,400

Cost of Goods Available for manufacture $ 2922,900

Less July 31 Work in process inventory,  355,500

Cost of goods manufactured $ 2567,400

When we add the direct materials. direct labor and FOH we get the total manufacturing costs .

When the total manufacturing costs are added to the opening work in process inventory we get the cost of goods available for manufacture and we get the cost of goods manufactured by subtracting the ending work in process inventory from the cost of goods available for manufacture.

Answer:

The income will decrease by $50,800

Explanation:

Giving the following information:

Product X:

Sales= 14,800*30= 444,000

Variable costs= 14,800*24= (355,200)

Contribution margin= 88,800

Fixed costs= (112,000)

Net income= (23,200)

The study shows that $74,000 of the $112,000 in monthly fixed expenses charged to Product X would not be avoidable even if the product was discontinued.

Now, we need to calculate the effect on income if Product X is discontinued.

Effect on income= net income - unavoidable fixed costs

Effect on income= 23,200 - 74,000= -50,800

The income will decrease by $50,800

The market basket for the consumer price index has two​ products, bread and​ milk, with the following values in 2013 and 2018 for price and​ quantity: Base Year​ (2013) 2018 Product Quantity Price Price Milk 50 ​$1.20 ​$1.50 Bread 100 1.00 1.10 The Consumer Price Index for 2018 equals (A) 116

Explanation:

The market basket for the consumer price index has two​ products, bread and​ milk, with the following values in 2013 and 2018 for price and​ quantity: Base Year​ (2013) 2018 Product Quantity Price Price Milk 50 ​$1.20 ​$1.50 Bread 100 1.00 1.10 The Consumer Price Index for 2018 equals (A) 116

The CPI is a statistical technique that  estimate or make use of the prices of a sample of representative items and these prices are collected periodically.

The Consumer Price Index (CPI) is index which is used to  examine the weighted average price of  consumer goods and services  basket , which includes transportation, food, and medical care and  is calculated by taking price changes for each item in the predetermined basket of goods and averaging them out

Answer:

First one

Explanation:

1) $1100

2) 0.5(1000) + 0.5(1200)

= $1100

3) 0.5(200) + 0.5(2000)

= $1100

Since all expected values are equal.

He should go for the first one, to avoid risks

Answer:

The cost of goods sold is $4,800

Explanation:

Given,

Beginning Inventory = $1,000

Ending Inventory = $1,200

Cost of goods manufactured = $5,000

Cost of goods sold = Beginning Inventory + Cost of goods manufactured - Ending Inventory.

Cost of goods sold = $1,000 + $5,000 - $1,200

Cost of goods sold = $4,800

Final answer:

The Cost of Goods Sold for the manufacturing company is calculated by adding the beginning inventory to the cost of goods manufactured and then subtracting the ending inventory. The COGS is $4,800.

Explanation:

To calculate the Cost of Goods Sold (COGS), we need to take into account the cost of goods that were ready for sale at the beginning of the period (beginning inventory), add the cost of goods manufactured during the period, and then subtract the cost of goods that are unsold at the end of the period (ending inventory).

Cost of Goods Sold Calculation

COGS = Beginning Inventory + Cost of Goods Manufactured - Ending Inventory

Using the figures provided:

So, COGS = $1,000 + $5,000 - $1,200

COGS = $4,800

Therefore, the Cost of Goods Sold for the manufacturing company is $4,800.

Answer:

Dr   income expense($33450 +$2500)  $35950

Cr  income tax payable                                              $33450

Cr deferred income tax                                               $2500

Explanation:

The adjusted taxable income adjusted for disallowed insurance expense of $4,400 as well as the excess depreciation(timing difference) of $10,000

Pretax  financial income       $139,400

add:

disallowed expense             $4,400

less:

additional depreciation       ($10,000)

Adjusted taxable income    $133,800

income tax expense is $133800 *25%=$33450

deferred tax liability =$10,000*25%=$2500

total tax expense for the year is 35950 ($33450+$2500)

Answer:

s3

Explanation:

Adopting s1 will result in delivery time of 8 weeks when Creative Robotics is busy as per maximin criteria and maximax criteria.

Adopting s3 will result in delivery time of 6 weeks when Creative Robotics is busy as per minimax criteria.

In this scenario, minimax criteria must be used to make decision as worst loss is to be estimated.

Answer:

A.$5,250

Explanation:

=(80,000-10,000)/10=7,000*9/12=$5,250

The depreciation have been worked out on pro rata basis for 9 months starting from April 1st to 31 December 2013.

Answer:

A.$5,250

Explanation:

=(80,000-10,000)/10=7,000*9/12=$5,250

The depreciation for 9 months starting from April 1st to 31 December 2013.recoded as depreciation expense $5,250