The cash flow for the year is ($164,000). Cash spent represents outflows, whereas cash received represents inflows.
A financial statement that tracks a company's sources and uses of cash over time is the cash flow statement.
Given,
Common stock = $141,000
Additional paid in surplus = $2,660,000
Calculate Total Equity for 2015:
Total equity for 2015 = Common stock + Additional paid in surplus
Total equity for 2015 = 141,000+2,660,000
= $2,801,000
Given,
Common stock = $151,000
Additional paid in surplus = $2,960,000
Calculate Total Equity for 2016:
Total equity for 2016 = Common stock + Additional paid in surplus
Total equity for 2016 = 151,000 + 2,960,000
= $3,111,000
Calculate Net New Equity:
Net New Equity = Total equity for 2016 - Total equity for 2015
= $3,111,000 - 2,801,000
=$310,000
Given,
Dividends paid = $146,000
Net new equity = $310,000
Calculate Cash Flow to stockholders:
Cash flow to stockholders = Dividends paid - Net new equity
= 146,000 - 310,000
=($164,000)
Thus, cash flow to stockholders is ($164,000).
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The cash flow to stockholders for the year is $164,000.
Explanation:To determine the cash flow to stockholders for the year, we need to consider the changes in the common stock account and the additional paid-in surplus account from 2015 to 2016, as well as the cash dividends paid out during 2016.
The increase in common stock from $141,000 to $151,000 indicates that $10,000 was received from issuing new shares of stock.
The increase in additional paid-in surplus from $2,660,000 to $2,960,000 suggests that $300,000 was received from investors in exchange for company stock.
Therefore, the cash flow to stockholders for the year is the sum of the new stock issuances and additional paid-in surplus, minus the cash dividends paid out:
(New stock issuances + Additional paid-in surplus) - Cash dividends = Cash flow to stockholders
Using the above calculation:
($10,000 + $300,000) - $146,000 = $164,000
So, the cash flow to stockholders for the year is $164,000.
If potential output equals 3,000 and short-run equilibrium output equals 3,500, there is a(n) ______ gap and the Federal Reserve must _____ real interest rates in order to close the gap.
A. recessionary; raise B. recessionary; lower C. recessionary; not change D. expansionary; raise
Answer:
D. expansionary; raise
Explanation:
In order to maintain the equilibrium, in this case,
The Federal Reserve will opt for expansionary monetary policies, under which the real interest rates will be increased by the Federal Reserve.
As the output is less than the equilibrium output, by increasing the real interest rates, the equilibrium can be achieved.
5. On December 5, CWM paid the $230 telephone bill accrued for November. 6. On December 11, CWM purchased two computers from Dell Inc. for $4,900 each. CWM paid $400 down with a check; the remaining balance is due in 30 days (n/30). Each computer has an estimated life of two years and a salvage value of $50 each. What are the correct journal entries for these transactions?
Answer:
utilities payable 230
cash 230
to record payment of November bill
Computer 9,800
Cash 400
Account payable 9,400
to record purchase of computers
Explanation:
we will credit cash for the amount paid to cancel the tlephone invoice.
We will write-off the payable recognize in Novemeber when the invoice was received.
We will debit the acquired assets (computer)
credit the amount of cash given
and then credit the remainder to recognize the obligation to pay these computers in the near future.
Layla works during her meeting to pull together the ideas of her committee members into a coherent whole. Layla is performing a ___________ role.a.Maintenanceb.Relationship-orientedc.Taskd.Social
Answer: C
Explanation:
Layla works during her meeting to pull together the ideas of her committee members into a coherent whole. Layla is performing a task . task, duty, job, chore, stint, assignment mean a piece of work to be done. task implies work imposed by a person in authority or an employer or by circumstance. charged with a variety of tasks duty implies an obligation to perform or responsibility for performance.
The correct answer is C. Task
Explanation:
In a group discussion, meeting or similar scenario, participants can have different roles. In the case of task roles, this refers to roles such as monitoring participation, gathering information or pulling ideas together to get to conclusions or find a solution, and even motivating participants. The activities belong to a task role because they help the group to achieve the main purpose or goal.
Layla is performing a task role because her action of pulling ideas together is a common task or activity in this role, also, this action helps the group to accomplish the goal considering without Layla doing this, the group would not get a complete and coherent idea of the ideas provided by all participants.
Borrowed $60,000 from First American Bank and Trust by issuing a two-year note payable (Doc. No. 14) with a stated annual interest rate of 5%. Check No. 545 (Doc. No. 8) for $60,000 was received from the bank and deposited. Reviewed the terms and conditions of the note and signed it (Ray Kramer) as the borrower.
Ray Kramer's borrowing $60,000 from the bank reflects how banks operate. These loans become assets for the banks, as they generate interest income. This process contributes to the rise in bank deposits and allows further lending thus expanding the money supply in the economy.
Explanation:Ram Kramer borrowed $60,000 from First American Bank and Trust by issuing a two-year note payable with a 5% annual interest rate. This is similar to the example of Singleton Bank lending $9 million to Hank's Auto Supply. In both cases, the loans become assets for the banks as they will generate interest income. Based on this model, First National Bank's deposits would rise by the amount of the loan and the bank would likely have to hold a portion of these deposits as required reserves. The rest of the money could be loaned out again, increasing the money supply in the economy. This process is a key part of how banks operate and contribute to the economy.
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Assume it is August of 2008. After much deliberation, TV (television) stations nationwide choose to stop broadcasting their programs in analog starting in June of 2009 and instead broadcast in pure digital television. Hence, there is less than one year left of analog broadcasting. This decision affects companies that produce TVs, but also affects people that own and wish to purchase TVs. Please shift the supply and demand curves appropriately as a result of this news in consideration of the long run (in this case, for example, the year 2010) for analog TV sets.
Answer:
Explanation:
The analog TV sets demand will be affected because consumers will no longer buy analog TV sets because of the new decision. If there are no consumers to buy this good the demand curve will shift to the left.
The analog TV sets producers will know that consumers are not longer interested in this good and they will reduce the quantities they produce because if they remain with the same production quantities it is possible that no one buys a portion of them.
Also, it is possible that the people that owns an analog TV set will sell them because they know that in the future TV stations will stop broadcasting their programs in analog. If we sum both effects, the total supply will be reduced but not in the same proportion, the shift magnitude will be less but still the supply will shift to the left.
Folsom Fashions sells a line of women's dresses. Folsom's performance report for November Year 1 follows.Actual : Dresses Sold: 5000, Sales 235,000, variable cost is 145,000 contribution margin is 90,000, fix cost is 84,000 and operating income is 6,000Budget: Dresses Sold: 6000, Sales 300,000, variable costs: 180000, contribution margin is 120,000, fixed costs is 80000, and operating income is 40,000The company uses a flexible budget to analyze its performance and to measure the effect on operating income of the various factors affecting the difference between budgeted and actual operating income.The variable cost flexible budget variance for November is:(A) $4,000 unfavorable.(B) $5,000 favorable.(C) $5,000 unfavorable.(D) $4,000 favorable.
Answer:
(B) $5,000 favorable.
Explanation:
Variable cost flexible budget variance:
budget for 6,000 units total variable cost: $180,000
We divide the total cost by the activity in that budget:
$180,000/ 6,000 = 30
Now we multiply by the actual volume:
5,000 x 30 = 150,000
Now we do flexible budget - actual cost = variance
150,000 - 145,000 = 5,000 favorable
It is favorable, as the cost where less than expected.
A company has the following balances on December 31, 2018, after year-end adjustments: Accounts Receivable = $62,500; Allowance for Uncollectible Accounts = $6,200.
Calculate the net realizable value of accounts receivable
Answer: The net realizable value is the maximum value that can be achieved with the sale of the asset, discounting the costs associated with it.
The net realizable value (NRV) of accounts receivable would be:
NRV = Accounts Receivable - Allowance for Uncollectible Accounts
NRV = $ 62,500 - $ 6,200
NRV = $ 56,300
Kaplan Manufacturing Corporation purchased 2,500 shares of its own previously issued $10 par common stock for $57,500. As a result of this event,a. Kaplan's Common Stock account decreased $25,000.b. Kaplan's total stockholders' equity decreased $57,500.c. Kaplan's Paid-in Capital in Excess of Par Value account decreased $32,500.d. All of these answer choices are correct.
Answer:
b. Kaplan's total stockholders' equity decreased $57,500
Explanation:
The purchase of treasury stock is as follows:
Treasury Stock debit 57,500 (-Equity)
cash credit 57,500 (-Assets)
The company's equity decreased as well as the Assets.
The common stock and paid-in Capital in Excess of Par Value will not be modified.
This account will be decreased if the stocks are retired not at purchase
Here is financial information for Marin Inc. December 31, 2017 December 31, 2016 Current assets $110,400 $ 94,600 Plant assets (net) 404,600 354,400 Current liabilities 103,600 69,400 Long-term liabilities 126,400 94,600 Common stock, $1 par 134,400 119,400 Retained earnings 150,600 165,600 Prepare a schedule showing a horizontal analysis for 2017, using 2016 as the base year. (If amount and percentage are a decrease show the numbers as negative, e.g. -55,000, -20% or (55,000), (20%). Round percentages to 1 decimal place, e.g. 12.1%.)
Answer:
2,016 2,017 2017 as 2016 base
Current Assets 94,600 110,400 increase 17%
Plant Assets 354,400 404,600 increase 14%
Total Assets 449,000 515,000 increase 15%
Current Laibilities 69,400 103,600 increase 49%
Long-Term Liab 94,600 126,400 increase 34%
Common Stock 119,400 134,400 increase 13%
Retained Earnings 165,600 150,600 decrease -9%
Total L+SE 449,000 515,000 increase 15%
Explanation:
We will compare new year with the previous year, as percent.
(2017-2016)/2016
This will gives the variance per year
Horton Co. was organized on January 2, 2014, with 500,000 authorized shares of $10 par value common stock. During 2014, Horton had the following capital transactions:
January 5-issued 375,000 shares at $14 per share.
July 27-purchased 25,000 shares at $11 per share.
November 25-sold 18,000 shares of treasury stock at $13 per share.
Horton used the cost method to record the purchase of the treasury shares. What would be the balance in the Paid-in Capital from Treasury Stock account at December 31, 2014?
Answer:
The balance in the Paid-in Capital from Treasury Stock account at December 31, 2014 is $36,000
Explanation:
The computation of the balance in the treasury stock account is shown below:
= Number of shares sold × (Selling price of share - purchase price of share)
= 18,000 shares × ($13 per share - $11 per share)
= 18,000 shares × $2 per share
= $36,000
The other items which are mentioned like issued shares, authorized shares are irrelevant because we have to compute for the treasury stock, not for the common stock. So, these parts would be ignored in the computation part.
The balance in the Paid-in Capital from Treasury Stock account at December 31, 2014 can be calculated by considering the capital transactions of Horton Co. during the year.
Explanation:The balance in the Paid-in Capital from Treasury Stock account at December 31, 2014 can be calculated by considering the capital transactions of Horton Co. during the year.
On January 5, 375,000 shares were issued at $14 per share, resulting in an increase in Paid-in Capital. On July 27, 25,000 shares were purchased at $11 per share. Since the cost method was used, this transaction does not impact Paid-in Capital from Treasury Stock. On November 25, 18,000 shares of treasury stock were sold at $13 per share, resulting in a decrease in Paid-in Capital from Treasury Stock.
To calculate the balance, we need to subtract the decrease in Paid-in Capital from Treasury Stock from the increase in Paid-in Capital. Therefore, the balance would be the increase from the January 5 transaction, which is (375,000 shares x $14 per share) minus the decrease from the November 25 transaction, which is (18,000 shares x $13 per share).
The manager of an ice-cream parlor decides to introduce a new ice-cream flavor in his Dallas, TX based restaurants to compare the sales of these restaurants to the ones with no new flavors. She decides to run a difference in difference approach. Which of the following is true?
(A) The first difference would be the difference in the sales of the Dallas stores before and after the introduction
(B) The second difference would be the difference in the sales in other stores before and after the Dallas stores introduced the new flavor
(C) The second difference would be the difference between the post introduction sales in the Dallas stores and the control group
(D) Only A&B
Answer:
(D) Only A&B
Explanation:
As with the introduction of new flavors, there will be an impact on sales, it might increase or it might decrease.
The impact would not only affect the store itself but would also impact on nearby stores.
Therefore, there will be difference in the sales count in value as well as units in current and previous months.
There will also be difference in between, the sales of stores nearby in previous month and current month after the launch of new flavor.
Final answer:
The correct answer to the question is that the first difference is the change in sales in the Dallas stores before and after the new ice-cream flavor introduction, and the second difference is between the post-introduction sales of the Dallas stores and a control group that did not introduce the flavor.
Explanation:
When the manager of an ice-cream parlor in Dallas, TX decides to use a difference in difference approach to compare sales, there are two key differences they will analyze:
The first difference would be the change in the sales of the Dallas stores before and after the introduction of the new flavor. This is captured by option (A).
The second difference, contrary to option (B), would actually be the difference in sales between the Dallas stores post-introduction of the new flavor and a comparison group/control group that did not introduce the new flavor, as stated in option (C).
Therefore, the correct answer would include options (A) and (C), as they describe the two steps in the difference in differences approach.
In the AD partnership, Allen's capital is $140,000 and Daniel's is $40,000 and they share income in a 3:1 ratio, respectively. They decide to admit David to the partnership. Each of the following questions is independent of the others.
Refer to the information provided above. What amount will David have to invest to give him one-fifth percent interest in the capital of the partnership if no goodwill or bonus is recorded?
A. $60,000
B. $36,000
C. $50,000
D. $45,000
Answer:
The correct option is (D)
Explanation:
Given:
Allen's capital = $140,000
Daniel's capital = $40,000
Total capital before admitting David = $180,000
David's interest in partnership is 1/5 or 20%. So Allen and Daniel's capital will now be 80%.
Required capital after admitting David = [tex]\frac{180,000}{0.8}[/tex]
= $225,000
David's investment = 225,000 - 180,000
= $45,000
Therefore, David's investment in partnership is $45,000
Regarding the direct and indirect methods of preparing the statement of cash flows, which of the following statements is true? A. The indirect method and the direct method will produce a different amount of net cash provided by investing activities. B. The indirect method starts with net income and adjusts it to net cash provided by (used for) operating activities. C. The direct and indirect methods include different types of cash flows in the investing activities section. D. The indirect method includes all non-cash activities, whereas the direct method includes only the cash activities
Answer:
B. The indirect method starts with net income and adjusts it to net cash provided by (used for) operating activities.
Explanation:
The cash flow statement shows the entire cash flow for the period in consideration, generally a financial year.
This statement is divided in three parts: Operating, Investing and Financing.
There are two methods to prepare the cash flow statement: Direct Method and Indirect Method.
There is no difference in reporting investing and financing activity, whereas the operating activities are reported in different manners.
Under indirect method, the net income is adjusted to calculate the operating cash flow, all the transactions which are non cash or do not relate to operating activities.
Thus, statement B is correct.
You have a biased coin that lands heads 10% of the time. You win $1000 every time the coin lands head and lose 50 every time the coin lands tails. You start with $0 it is possible to have ne ative balance 1 you throw the coin 100 times, what is: The maximum balance you could finish with? 2. The minimum balance you could finish with? 3. Your expected end balance? 100,000
Answer:
1. Maximum balance = $100,000
2. Minimum balance = $(-5,000)
3. Expected balance = $55
Explanation:
Data:
PW = Probability Win = 10% = 0.10
PL = Probability Lose = 100% - 10% = 90% = 0.90
WA = Winning Amount = $1,000
LA = Losing Amount = ($50)
L = Launchs = 100
Calculations:
1. Maximum balance = L x WA = 100 x $1,000 = $100,000
2. Minimum balance = L x LA = 100 x $(-50) = $(-5,000)
3. Expected balance = (PW x WA) + (PLxLA) = (0.10 x $1,000) + (0.90 x $(-50)) = $100 - $45 = $55
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On January 1, 2016, Jacob Inc. purchased a commercial truck for $48,000 and uses the straight-line depreciation method. The truck has a useful life of eight years and an estimated residual value of $8,000. On December 31, 2018, Jacob Inc. sold the truck for $30,000. What amount of gain or loss should Jacob Inc. record on December 31, 2018?
A.Loss, $3,000.
B.Loss, $18,000.
C.Gain, $22,000.
D.Gain, $5,000.
Answer:
D.Gain, $5,000.
Explanation:
Truck Value = $48,000
Annual depreciation = ( $48,000 - $8,000) / 8 = $40,000 / 8= $5,000
First year (2013) = $40,000 - $5,000 = $35,000
Second year (2014) = $35,000 - $5,000 = $30,000
Third year (2015)= $30,000 - $5,000 = $25,000
Gain = Sale Value - Truck Value (actual) = $30,000 - $25,000 = $5,000
In the AD partnership, Allen's capital is $140,000 and Daniel's is $40,000 and they share income in a 3:1 ratio, respectively. They decide to admit David to the partnership. Each of the following questions is independent of the others.
Refer to the information provided above. Allen and Daniel agree that some of the inventory is obsolete. The inventory account is decreased before David is admitted. David invests $40,000 for a one-fifth interest. What are the capital balances of Allen and Daniel after David is admitted into the partnership?
Allen Daniel
A) 140000 40000
B) 125000 35000
C) 120000 36000
D) 137000 39000
A. Option A
B. Option B
C. Option C
D. Option D
Answer: Option (B) is correct.
Explanation:
Capital contribution by David = $40,000
Interest of David in partnership = [tex]\frac{1}{5}[/tex]
Total capital of the partnership after the admission of new partner:
= [tex]\frac{40,000}{\frac{1}{5} }[/tex]
= $200,000
Total capital of partnership before decreasing of obsolete inventory:
= $140,000 + $40,000 + $40,000
= $220,000
Therefore, value of decrease in inventory:
= Total capital before decrease - Total capital after decrease
= $220,000 - $200,000
= $20,000
The reduction in value of inventory will be distributed in old partners in ratio of 3:1
Hence,
Capital balance of Allen after admission of David:
= [tex]140,000 - 20,000\times\frac{3}{4}[/tex]
= $125,000
Capital balance of Daniel after admission of David:
= [tex]40,000 - 20,000\times\frac{1}{4}[/tex]
= $35,000
In the LMN partnership, Lynn's capital is $60,000, Marty's is $80,000, and Nancy's is $70,000. They share income in a 4:3:3 ratio, respectively. Nancy is retiring from the partnership. Each of the following questions is independent of the others.
Refer to the above information. Nancy is paid $76,000, and all implied goodwill is recorded. What is the total amount of goodwill recorded?
A. $20,000
B. $14,000
C. $6,000
D. $0
Answer:
A. $20,000
Explanation:
Lynn 60,000
Marty 80,000
Nancy 70,000
Total 210,000
The buyout for nancy consist in:
capital balance + Nancy share of unrecorded goodwill
76,000 = 70,000 + 6,000 nancy goodwill
Nnacy share income ratio is 30% so total goodwill is:
6,000/30% = 6,000 / 0.3 = 20,000
The journal entry will be:
goodwill 20,000
Nancy Account 70,000
Cash 76,000
Lynn 8,000
Marty 6,000
Jane is a middle-aged woman fond of EpidermaNow's skincare products. These products are produced and marketed globally. EpidermaNow recently released a sun-screen lotion. Despite the lotion's high price and unproven effectiveness, Jane bought the lotion on the day of its release in the market. Given this information, Jane belongs to the segment of _____.
a. global citizens
b. global dreamers
c. antiglobals
d. global agnostics
Answer: Global citizens
Explanation: In simple words, an individual who have better understanding of the world operations than others are called global citizens. These individuals favor global activities with the perception that these will result in more equality around the world either directly or indirectly.
In the given case, Jane purchased a product because of its global nature despite of high prices. Therefore, she clearly is favoring globalization.
Hence, from the above we can conclude that the right option is A.
Gasoline prices typically rise during the summer, a time of heavy tourist traffic. A "street talk" feature on a radio station sought tourist reaction to higher gasoline prices. Here was one response: "I don’t like ‘em [the higher prices] much. I think the gas companies just use any excuse to jack up prices, and they’re doing it again now." How does this tourist’s perspective differ from that of economists who use the model of demand and supply?
The tourist views higher gasoline prices as unfair manipulation by gas companies. However, economists see it as a natural outcome of increased demand during the tourist season based on the principle of supply and demand.
Explanation:The tourist's perspective is more intuitive and emotional, based on their personal experience and judgement. They believe that gas companies are taking advantage of a situation to increase prices unfairly. However, economists using the model of supply and demand would look at this situation differently. They would argue that during the summer, the demand for gasoline increases due to increased travel. As demand increases and supply remains somewhat steady, prices naturally rise to balance the two. This reflects the basic principle of supply and demand, and is not inherently about companies intentionally raising prices.
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Assume the demand for watermelons is downward sloping. A decrease in price from $3 per pound to $2 per pound
(A) could have been caused by an increase in supply.
(B) will cause an increase in supply.
(C) will cause a smaller quantity of watermelons to be demanded.
(D) will cause demand to decrease.
(E) will cause demand to increase.
Answer:
(E) will cause demand to increase.
Explanation:
The demand has a downward sloping, so it decrease as more price.
Therefore if the price is lower, the demand will increase, not decrease.
More persons will demand watermelons as the price decrease. That's because at lower price more people can afford watermelons.
Molteni Motors Inc. recently reported $3.25 million of net income. Its EBIT was $6.25 million, and its tax rate was 35%. What was its interest expense? (Hint: Write out the headings for an income statement and then fill in the known values. Then divide $3.25 million net income by 1 − T = 0.65 to find the pre-tax income. The difference between EBIT and taxable income must be the interest expense.) Enter your answer in dollars. For example, an answer of $1.2 million should be entered as 1,200,000. Round your answer to the nearest dollar.
Answer:
Interest= $1250000
Explanation:
We know that:
EBIT
interest (-)
=earnings before taxes
tax (-)
=Net profit
EBIT= 6250000
Interest= ?
t= 0,35
Net profit= 3250000
interest= [netprofit/(1-t)]- EBIT
interest= (3250000/0,65)-6250000
interest= 1250000
Tax=(EBIT-interest)*0,35= 1750000
To calculate the interest expense, we can use the formula: Interest Expense = EBIT - Taxable Income. Using the given values, the interest expense is $1.25 million.
Explanation:To find the interest expense, we can use the formula:
Interest Expense = EBIT - Taxable Income
First, we need to calculate the taxable income by dividing the net income by (1 - tax rate):
Taxable Income = Net Income / (1 - Tax Rate)
Substituting the given values, we have:
Taxable Income = $3.25 million / (1 - 0.35) = $5 million
Next, we can calculate the interest expense by subtracting the taxable income from EBIT:
Interest Expense = EBIT - Taxable Income
Interest Expense = $6.25 million - $5 million = $1.25 million
Therefore, the interest expense is $1.25 million.
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Which of the following is true about the relationship between price and quantity supplied? There is always a direct relationship between price and quantity supplied. There is always an inverse relationship between price and quantity supplied. There is usually a direct relationship between price and quantity supplied. There is usually an inverse relationship between price and quantity supplied.
Answer:
There is always a direct relationship between price and quantity supplied.
Explanation:
If the product cost is given:
The higher the price, the higher the profit thus, more people willing to enter the business and more willingness to increase current production. Thus, there is an incentive to increase the quantity supplied. There is a direct relationship as both increases. There is no reason why this cannot be true under the circumstance proposed so, it always applpies
is the sole proprietor of Prestigious Pups, a business specializing in the sale of high-end pet gifts and accessories. Prestigious Pups' sales totaled $ 986 comma 000 during the most recent year. During the year, the company spent $ 58 comma 500 on expenses relating to website maintenance, $ 30 comma 500 on marketing, and $ 29 comma 100 on wrapping, boxing, and shipping the goods to customers. Prestigious Pups also spent $ 643 comma 000 on inventory purchases and an additional $ 19 comma 700 on freight-in charges. The company started the year with $ 16 comma 250 of inventory on hand and ended the year with $ 16 comma 800 of inventory. Prepare Prestigious Pups' income statement for the most recent year.
Answer:
Instructions are listed below
Explanation:
An income statement is one of the three important financial statements used for reporting a company's financial performance over a specific accounting period. The income statement focuses on the four key items - revenue, expenses, gains, and losses. It does not cover receipts (money received by the business) or the cash payments/disbursements (money paid by the business).
It follows the general structures:
Revenues (+)
Operating Revenue
Non-Operating Revenue
Total
Expenses (-)
Primary Activity Expenses
Secondary Activity Expenses
Total
Gains (+)
Losses (-)
Net income/loss
In this exercise:
sales totaled $ 986000
$58500 on expenses relating to website maintenance
$30500 on marketing
$29100 on wrapping, boxing, and shipping the goods to customers.
$643000 on inventory purchases
$19700 on freight-in charges.
started the year with $16250 inventory
ended the year with $ 16800 of inventory.
Revenues= 986000
Expenses (-)
Primary Activity Expenses:
Cost of goods sold= Initial inventory + purchase - ending inventory= $642450
wrapping, boxing, and shipping= $29100
Secondary Activity Expenses:
website maintenance=58500
marketing= $30500
freight-in charges= $19700
Total Expenses= $780250
Net income= $205750
Baker Industries’ net income is $24,000, its interest expense is $5,000, and its tax rate is 25%. Its notes payable equals $24,000, long-term debt equals $80,000, and common equity equals $260,000. The firm finances with only debt and common equity, so it has no preferred stock. What are the firm’s ROE and ROIC? Do not round intermediate calculations. Round your answers to two decimal places.
Answer:
ROE = 9.23%
ROIC = 7.62%
Explanation:
Data:
Net Income NI = $24,000
Interest Expense IE = $5,000
Tax Rate T = 25% = 0.25
Notes Payable NP = $24,000
Long-term debt LTD = $80,000
Common Equity CE = $260,000
Return On Equity ROE = ?
Retrun On Invested Capital ROIC = ?
Earnings Before Taxes EBT = ?
Invested Capital IC = ?
Earnings Before Taxes and Interest EBIT = ?
Calculations:
[tex]ROE = \frac{NI}{CE}= \frac{24,000}{260,000}=0.0923 = 9.23[/tex]%
[tex]EBT = \frac{NI}{1-T} = \frac{24,000}{1-0.25} = \frac{24,000}{0.75} = 32,000[/tex]
[tex]EBIT = EBT+IE=32,000 + 5,000=37,000[/tex]
[tex]IC =NP+LTD+CE=24,000+80,000+260,000=364,000[/tex]
[tex]ROIC = \frac{EBIT*(1-T)}{IC} = \frac{37,000*(1-0.25)}{364,000}= \frac{37,000*(0.75)}{364,000}= \frac{27,750}{364,000}= 0.0762=7.62[/tex]%
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Baker Industries has a Return on Equity (ROE) of 9.23% and a Return on Invested Capital (ROIC) of 7.69%, indicating its efficiency in generating profits from shareholder equity and overall capital.
Explanation:The question involves calculating Return on Equity (ROE) and Return on Invested Capital (ROIC) for Baker Industries. ROE measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested. ROIC measures how well a company is using its money to generate returns. Comparing these ratios helps understand Baker Industries' efficiency in generating profits from its equity and overall capital.
Calculation of ROE
ROE = (Net Income / Shareholder's Equity) * 100
Given Net Income = $24,000 and Shareholder's Equity = Common Equity = $260,000,
ROE = ($24,000 / $260,000) * 100 = 9.23%
Calculation of ROIC
ROIC = (Net Income + Interest Expense * (1 - Tax Rate)) / (Debt + Equity)
Given that Interest Expense = $5,000, Tax Rate = 25%, Total Debt = Notes Payable + Long-term Debt = $24,000 + $80,000, and Total Equity = $260,000,
ROIC = ($24,000 + $5,000 * (1 - 0.25)) / ($24,000 + $80,000 + $260,000) * 100 = 7.69%
When a corporation issues its capital stock in payment for services, the least appropriate basis for recording the transaction is the
a. market value of the services received.
b. par value of the shares issued.
c. market value of the shares issued.
d. Any of these provides an appropriate basis for recording the transaction.
Answer:
B.) Par value of the share issued
Explanation:
This transaction just have to follow the rules of issuing stocks for non-cash assets. The rule is to record on the basis of MARKET VALUE of the services received or the MARKET VALUE of the shares issued whichever can be objectively determined.
The least appropriate basis would be the Par Value of the shares issued since the par value are usually significantly lower than its market value.
Par value are determined from the creation of the company and the company grows and increases its value.
You have been assigned to make a recommendation about whether to build a factory manufacturing facility in Arkansas or New Jersey. Average production is estimated at 60,000 units per year. Estimations for cost factors were observed by obtaining cost data over the past year. Fixed costs including the financing of building and equipment, property taxes and insurance as well as overhead staff. Variable costs include repair product development, direct labor, shipping in and out. Our analysis indicated the following costs: Arkansas New Jersey Fixed $3,753,000 $2,221,000 Variable $52.73 $74.99 The difference in cost for production between New Jersey and Arkansas when manufacturing 75000 units is
Answer:
The differential cost is $4,369,250 in favor of New Jersey
Explanation:
Giving the following information:
Arkansas:
Fixed costs=$3,753,000
Variable costs= $52.73
New Jersey:
Fixed costs= $2,221,000
Variable costs= $14.99
If the production is 75000 units
Arkansas= 3753000+ 52.73*75000= $7707750
New Jersey= 2221000+14.9*75000= $3338500
The differential cost is $4,369,250 in favor of New Jersey
The following information is from the Income Statement of the Swifty Laundry Service:
Revenues
Service Revenues $4940
Expenses
Salaries and wages expense $ 1860
Advertising expense 380
Rent expense 230
Supplies expense 150
Insurance expense 80
Total expenses 2700
Net income $2240
The entry to close the Laundry Service Revenue account includes a:
Answer:
Explanation:
The journal entry for closing the laundry service revenue is shown below:
Laundry service revenue A/c Dr $4,940
To Income summary $4,940
(Being service revenue account closed)
We credit the income summary account because the service revenue is added while preparing the income statement. If there is a net income, so the revenue is excess than its expenses and if there is a net loss, so the expenses are excess than its income.
The entry to close the Laundry Service Revenue account for Swifty Laundry Service involves debiting the Service Revenues account and crediting the Income Summary account with $4940 to zero out the revenue for the period.
The entry to close the Laundry Service Revenue account includes a debit to the Service Revenues account and a credit to the Income Summary account. This is done to zero out the revenue account and transfer its balance to the Income Summary for the period.
At the end of the accounting period, Swifty Laundry Service would make the following journal entry:
Debit Service Revenues: $4940Credit Income Summary: $4940This entry reflects the closure of the revenue account, which moves the year's earnings into the Income Summary, preparing the company's books for the new accounting period.
An organization estimated that in a particular year the population of a country spent $10.4 trillion in personal consumption. The major categories of these expenditures are durable goods ($1.7 trillion; for example, cars, furniture, recreational equipment), nondurable goods ($2.4 trillion; for example, food, clothing, fuel), and services ($6.2 trillion; for example, health care, education, transportation). What is the approximate annual per capita spending for personal consumption? Assume a population of 310 million.
The approximate annual per capita spending for personal consumption is approximately $33,548.39. Spending per capita at constant prices accounts for both population growth and inflation.
Given,
Total personal consumption spending = $10.4 trillion
Population = 310 million
Required to calculate the approximate annual per capita spending for personal consumption =?
Per Capita Spending = Total Spending / Population
Per Capita Spending = $10.4 trillion / 310 million
Per Capita Spending = $10.4 trillion / 310 million
Per Capita Spending = $33,548.39
Therefore, the per capita spending is $33,548.39.
Learn more about per capita consumption here:
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Final answer:
The approximate annual per capita spending for personal consumption is $33,548.39, calculated by dividing the total personal consumption expenditures of $10.4 trillion by the population of 310 million people.
Explanation:
To determine the approximate annual per capita spending for personal consumption, we divide the total personal consumption expenditures by the population. The total expenditure is $10.4 trillion, which includes spending on durable goods ($1.7 trillion), nondurable goods ($2.4 trillion), and services ($6.2 trillion). With a population of 310 million people:
Per capita spending = Total spending / Population = $10.4 trillion / 310 million = $33,548.39 per person, approximately.
This figure indicates how much each person, on average, would have spent on goods and services in that year.
There are four steps in the manufacturing process of a stuffed toy: cutting, stuffing, sealing, and packaging. There are two employees each for cutting and stuffing but one each for sealing and packaging. The processing times of cutting, stuffing, sealing, and packaging are 8, 5, 3, and 2 seconds per toy. What is the capacity in toys per minute at the resource "stuffing"?
Answer:
The capacity of the resource "stuffing" is 24 toys/minute
Explanation:
We can define the capacity of any of thes process as
Capacity = (Number of workers)/(Processing time)
In the case of the resource “stuffing”, we have two workers and a processing time of 5 seconds.
The capacity is then :
Capacity = (Number of workers)/(Processing time)
Capacity = (2)/(5 s) = 0.4 toys/second = 24 toys/minute
Assume that you are the manager of a firm. You are concerned about a potential increase in interestrates because it would reduce the demand for your products. Currently, economic growth is high, butannual inflation has increased from 3 percent to 5 percent within the last six months. The unemployment rate is very low and cannot go higher. The Federal Reserve (Fed) is meeting next week to assess economic conditions and set monetary policy.
(a) Given the current economic situation, should the Fed adjust or not adjust economic policy? If so, how? If not, why?
(b) Recently, the Fed has allowed the money supply to expand beyond its long-term target range. Does this affect your expectation of what the Fed will decide at its upcoming meeting?
(A) Concern about rising interest rates makes perfect sense, as the economy described is in a situation of overheating: high inflation, low unemployment and high economic growth. Rising inflation is a risk that requires the Fed to act to cool economic activity. This should be done through restrictive monetary policy instruments: raising interest rates and decreasing the monetary base, through the sale of government bonds and / or by increasing the banks' compulsory deposit with the Fed.
(B) This affects the credibility of the Fed, which is very bad. Economic agents base their expectations on Fed signals. If the money supply is higher than expected, real inflation will be higher than projected inflation. So expectations anchored in Fed forecasts will be dashed. This makes economic agents distrust future Fed projections.