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The Devon Motor Company produces automobiles. On April 1st the company had no beginning inventories and it purchased 6,950 batteries at a cost of $125 per battery. It withdrew 6,400 batteries from the storeroom during the month. Of these, 100 were used to replace batteries in cars being used by the company’s traveling sales staff. The remaining 6,300 batteries withdrawn from the storeroom were placed in cars being produced by the company. Of the cars in production during April, 90 percent were completed and transferred from work in process to finished goods. Of the cars completed during the month, 30 percent were unsold at April 30th. Required: 1. Determine the cost of batteries that would appear in each of the following accounts on April 30th.a) raw materials
b) work in process
c) finished goods
d) cost of goods sold
e) selling expanse
2. Specify whether each of the above accounts would appear onthe balance sheet or on the income statement at April 30

Answers

Answer 1

Answer:

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.

Answer 2

Final answer:

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.

Explanation:

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).

Raw Materials: This will be $68,750. Because 550 batteries (6,950 purchased - 6,400 withdrawn) are still available in the storeroom on April 30 and each one costs $125. Work in Process: This represents cars that are under production but not finished yet. Here it comes to $78,750 which computes by taking 10% of 6,300 batteries (which equals 630 batteries) that were placed in production and had the battery cost multiplied by $125. Finished Goods: This pertains to cars that are ready for sale, but unsold. It comes to $236,250, calculated by taking 30% of the 90% completed cars with installed batteries (which comes around to 1,890 batteries) and multiplying that by $125 per battery. Cost of Goods Sold: This denotes the cost of the sold cars' batteries, and it is $472,500, which is calculated by taking 70% of the 90% completed cars with installed batteries (about 3,780 batteries) at $125 per battery. Selling Expense: This would be $12,500, which is the cost of the 100 batteries used by the sales staff at $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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Related Questions

Madsen Motor's bonds have 23 years remaining to maturity. Interest is paid annually, they have $1,000 par value, the coupon interest is 9%, and the yield to maturity is 11%. What is the bond's current market price

Answers

Answer:

The bond's current market price is $834.67

Explanation:

Market Value of the bond is the present value of all cash flows of the bond. These cash flows include the coupon payment and the maturity payment of the bond. Price of the bond is calculated by following formula:

According to given data

Assuming the Face value of the bond is $1,000

Coupon payment = C = $1,000 x 9% = $90 annually

Number of periods = n = 23 years =

Current Yield = r = 11% / 2 = 5.5% semiannually

Market Value of the Bond = C x [ ( 1 - ( 1 + r )^-n ) / r ] + [ $1,000 / ( 1 + r )^n ]

Market Value of the Bond = $90 x [ ( 1 - ( 1 + 11% )^-23 ) / 11% ] + [ $1,000 / ( 1 + 11% )^23 ]

Market Value of the Bond = $743.98 + $90.69 = $834.67

Final answer:

The current market price of Madsen Motor's bond can be calculated by determining the present value of the bond's annual payments and the present value of its face value when it matures, which adds up to $1045.75.

Explanation:

In order to calculate the current market price of a bond, we need to calculate its present value using the coupon payment, the yield to maturity, and the face value. The bond's coupon payment can be calculated as it's face value multiplied by the coupon interest rate. Therefore, for the Madsen Motor's bond, the coupon payment is $1,000 X 0.09 = $90 annually. The present value of these annual payments for the remaining term of the bond can be calculated using the formula for the present value of an annuity: PVA = PMT X ((1 - (1 + r)^-n ) / r), where PMT is the annual payment, r is the yield to maturity divided by the number of periods, and n is the number of periods. In the case of this bond, this gives us the present value of annuity as $90 X ((1 - (1 + 0.11)^-23) / 0.11) = $807.57. The present value of the face value of the bond when it matures, also known as the present value of a lump sum, is computed as: PVLS = FV / (1+r)^n, where FV is the face value of the bond. For the Madsen Motor's bond, this is $1,000 / (1 + 0.11)^23 = $238.18. The current market price of the bond is the sum of these two present values, which comes to $807.57 + $238.18 = $1045.75.

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The Ramirez Company's last dividend was $1.5. Its dividend growth rate is expected to be constant at 15% for 2 years, after which dividends are expected to grow at a rate of 5% forever. Its required return (rs) is 12%. What is the best estimate of the current stock price?

Answers

Answer:

current stock price, [tex]P_{0}[/tex] = $26.84

Explanation:

Given,

Most recent dividend, [tex]D_{0}[/tex] = $1.50

Growth rate, [tex]g_{1}[/tex] = 15% = 0.15 (Next 2 years)

[tex]g_{2}[/tex] = 5% = 0.05 (remain constant after 2 years)

required rate of return , [tex]r_{s}[/tex] = 12% = 0.12

We know,

Current stock price, [tex]P_{0}[/tex] = [[tex]D_{1}[/tex] ÷ (1 + [tex]r_{s}[/tex])] + [tex]\frac{D_{2} + P_{2}}{(1 + r_{s})^{2}}[/tex]

or, [tex]P_{0}[/tex] = [{[tex]D_{0}[/tex] × (1 + [tex]g_{1}[/tex])} ÷ (1 + [tex]r_{s}[/tex])] + [tex]\frac{D_{0} (1 + g_{1})^{2} + \frac{D_{3}}{r_{s} - g_{2}}}{(1 + r_{s})^{2}}[/tex]

or, [tex]P_{0}[/tex] = [{$1.50 × (1 + 0.15)} ÷ (1 + 0.12)] + [tex]\frac{1.50*(1+0.15)^{2} + \frac{D_{2} (1 + g_{2})}{(0.12 - 0.05)}}{(1+0.12)^{2}}[/tex]

or, [tex]P_{0}[/tex] = ($1.725 ÷ 1.12) + [tex]\frac{1.98375 + \frac{1.98375*(1 + 0.05)}{0.07}}{1.2544}[/tex]

or, [tex]P_{0}[/tex] = $1.5402 + [(1.98375 + 29.75625) ÷ 1.2544]

or, [tex]P_{0}[/tex] = $1.5402 + (31.74 ÷ 1.2544)

or, [tex]P_{0}[/tex] = $1.5402 + 25.3029

Therefore, current stock price, [tex]P_{0}[/tex] = $26.84

The Campbell Company is considering adding a robotic paint sprayer to its production line. The sprayer's base price is $970,000, and it would cost another $19,500 to install it. The machine falls into the MACRS 3-year class (the applicable MACRS depreciation rates are 33.33%, 44.45%, 14.81%, and 7.41%), and it would be sold after 3 years for $617,000. The machine would require an increase in net working capital (inventory) of $15,000. The sprayer would not change revenues, but it is expected to save the firm $473,000 per year in before-tax operating costs, mainly labor. Campbell's marginal tax rate is 35%. Cash outflows, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to the nearest dollar. What is the Year-0 net cash flow

Answers

Answer:

-1,004,500

Explanation:

Cash used by an transaction is known as the cash outflow and cash provided by the transaction is known as cash inflow. Expenses and payments uses the cash and Revenue or receipts provide the cash.

All of the following cash flows are incurred in year 0

Base price = $970,000

Installation cost = $19,500

Increase in Working capital = $15,000

Total Cash Flow = $970,000 + $19,500 + $15,000 = $1,004,500

Cash has been used by each above transaction so,There is a Cash out flow of $1,004,500.

Final answer:

The Year-0 net cash flow for the Campbell Company upon purchasing a robotic paint sprayer is the sum of its cost, installation, and increased inventory needs, amounting to -$1,004,500.

Explanation:

The Year-0 net cash flow for Campbell Company considering the purchase of a robotic paint sprayer is calculated by adding the initial cost of the sprayer, installation costs, and the change in net working capital. We do not include depreciation here as it not a cash flow, and it will be considered when calculating tax savings in the later years. Therefore, the initial cash outflow (net cash flow at Year-0) for the sprayer is:

Cost of the sprayer: $970,000

Installation costs: $19,500

Increase in net working capital: $15,000

Adding these together, the total Year-0 net cash flow is:

-$970,000 (cost of the sprayer) - $19,500 (installation costs) - $15,000 (net working capital) = -$1,004,500

Charisma, Inc., has debt outstanding with a face value of $6.2 million. The value of the firm if it were entirely financed by equity would be $29.9 million. The company also has 425,000 shares of stock outstanding that sell at a price of $58 per share. The corporate tax rate is 22 percent. What is the decrease in the value of the company due to expected bankruptcy costs

Answers

Answer:

Decrease in value of company due to expected bankruptcy cost = $414,000

Explanation:

As per the data given in the question,

According to M & M proportional I with taxes,

Levered firm value is = Equity + Debt

= $29,900,000 + 0.22 × $6,200,000

= $31,264,000

Market value of the firm = market value of debt + market value of equity

= $6,200,000 + 425,000 × $58

= $30,850,000

Decrease in value of company due to expected bankruptcy cost = $31,264,000 - $30,850,000

= $414,000

An aging of a company's accounts receivable indicates that $4,000 are estimated to be uncollectible. If Allowance for Doubtful Accounts has a $900 debit balance, the adjustment to record bad debts for the period will require aa. debit to Bad Debit Expense for $5,200 b. debit to Bad Debits Expense for $4,000 c. debit to Bad Debits Expense for $2,800 d. credit to Allowance for Doubtful Accounts for $5,000

Answers

Answer:

The correct answer is Debit to Bad debt expense for $4,900, unfortunately none of the options provided in the question is correct.

Explanation:

Bad debt expense is an estimated amount of accounts receivable that is deemed to be uncollectible. There are different methods used in determining the bad debt expense - aging method, percentage-of-credit-sales method.

In the question, an amount of $4,000 was already estimated as uncollectible meanwhile the Allowance for Doubtful Accounts has a $900 debit balance. This means the bad debt expense that would be recorded would be $4,000 + $900 = $4,900. The addition is necessary in order to reinstate the Allowance for Doubtful Accounts to $4,000 and since the opening balance of the allowance account is in debit. Required journal entries are as follows:

Debit Bad debt expense $4,900

Credit Allowance for Doubtful Accounts $4,900

(To record bad debt expense)

Expert systems are used when: predictions for the future are required. patterns of consumer behavior need to be investigated. Big data needs to be analyzed. expertise is in short supply and needs to be captured. senior managers need reports on overall business performance.

Answers

Answer:

predictions for the future are required.

Explanation:

Expert system is defined as a computer system that mimics the decision making ability of a human being. It does this by using bodies of knowledge to solve complex problems.

Expert systems is made up of the knowledge base and the inference system. Facts are analysed and inferences about future outcomes are presented.

This is a useful tool for making accurate forecasts.

Wexell Framing's cost formula for its supplies cost is $1,230 per month plus $10 per frame. For the month of October, the company planned for activity of 592 frames, but the actual level of activity was 597 frames. The actual supplies cost for the month was $7,050. The activity variance for supplies cost in October would be closest to:

Answers

Answer:

The correct answer is $50 (unfavorable).

Explanation:

According to the scenario, computation of the given data are as follow:-

Planning supply activity cost = (592 × $10) +$1230

= $7,150

Actual supply activity cost = (597 × $10) + $1230

= $7,200

We can calculate the activity variance for supply cost by using following formula:-

Activity variance for supplies cost = Actual activity cost – Planning activity cost

= $7,200 - $7,150

= $50 ( positive shows unfavorable)

Grocery Corporation received $300,328 for 11 percent bonds issued on January 1, 2018, at a market interest rate of 8 percent. The bonds had a total face value of $250,000, stated that interest would be paid each December 31, and stated that they mature in 10 years. Required: Prepare the following table for each account by indicating (a) whether it is reported on the Balance Sheet (B/S) or Income Statement (I/S); (b) the dollar amount by which the account increases, decreases, or does not change when Grocery Corporation issues the bonds; and (c) the direction of change in the account [increase, decrease, or no change] when Grocery Corporation records the interest payment on December 31.

Answers

Answer:

For A. and B see attached files

Explanation:

Kellogg Company is the world's leading producer of ready-to-eat cereal and a leading producer of grain-based convenience foods such as frozen waffles and cereal bars. Suppose the following items were taken from its 2014 income statement and balance sheet. (All dollars are in millions.)

Type of Account Account Name Dollar Amount
Stockholders' Equity Retained earnings $5,481
Expense Cost of goods sold 7,184
Expense Selling and administrative expenses 3,390
Asset Cash 334
Liability Notes payable 44
Expense Interest expense 295
Liability Bonds payable 4,835
Asset Inventory 910
Revenue Sales revenue 12,575
Liability Accounts payable 1,077
Stockholders' Equity Common stock 105
Expense Income tax expense 512
Prepare an income statement for Kellogg Company for the year ended December 31, 2014.

Answers

Answer:

Please see answer in the explanation column.

Explanation:

Given,

Type of Account----- Account Name --- Amount in dollars

Stockholders' Equity--- Retained earnings ----$5,481

Expense----- Cost of goods sold ----$7,184

Expense---- Selling and administrative expenses ----$3,390

Asset ---Cash -----$334

Liability -----Notes payable---- $44

Expense---- Interest expense----$ 295

Liability---- Bonds payable----$ 4,835

Asset---- Inventory---- $910

Revenue---- Sales revenue----$12,575

Liability ----Accounts payable---- $1,077

Stockholders' Equity--- Common stock---- $105

Expense---- Income tax expense -----$512

Journal for income statement for Kellogg Company for the year ended December 31, 2014.

Revenue----

Sales revenue----$12,575

Expenses

Cost of goods sold ----$7,184

Selling and administrative expenses $3,390

Interest expense---- $295

Income tax expense -----$512

Total Expense---$11,381

Net Income = Total Revenue – Total Expense= $1,194

The Net income of the Kellogg Company for the year ended Dec. 31, 2014, is $23, 956. The preparation of the Income statement is attached below in the form of an MSWord Document.

An income statement, often known as a profit and loss account, is one of a company's financial statements that shows the company's or firm's revenues and expenses for a specific time period. It explains how revenues are converted into net profit or net income.

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Kim Lee is trying to decide whether she can afford a loan she needs in order to go to chiropractic school. Right now Kim is living at home and works in a shoe store, earning a gross income of $1,230 per month. Her employer deducts a total of $171 for taxes from her monthly pay. Kim also pays $110 on several credit card debts each month. The loan she needs for chiropractic school will cost an additional $133 per month. Help Kim make her decision by calculating her debt payments-to-income ratio with and without the college loan. (Remember the 20 percent rule.) (Round your answers to 2 decimal places.) Debt payments-to-income ratio with college loan % Debt payments-to-income ratio without college loan %3.Carl’s house payment is $1,640 per month and his car payment is $482 per month. If Carl's take-home pay is $3,250 per month, what percentage does Carl spend on his home and car? (Round your answer to 2 decimal places.) Loan payments-to-income ratio %2.Suppose that your monthly net income is $2,850. Your monthly debt payments include your student loan payment and a gas credit card. They total $1,140. What is your debt payments-to-income ratio?

Answers

Answer:

yes

Explanation:

ty the answer is 293840 use a calculator and 2% of 2837e928 m.

Final answer:

Kim Lee's debt payments-to-income ratio without the college loan would be 10.39%, and it would be 22.94% with the college loan. Carl spends 65.29% of his income on his home and car payments. If your net income is $2,850 and your monthly debt payments total $1,140, your debt payments-to-income ratio would be 40%.

Explanation:

To assist Kim Lee with her decision about the chiropractic school loan, we need to calculate her debt payments-to-income ratio with and without the college loan.

First, we'll calculate Kim's net income, which is her gross income minus the taxes deducted:

Gross Income: $1,230 per monthTaxes: $171 per monthNet Income: $1,230 - $171 = $1,059 per month

Now, her current monthly debt payments (credit card debts) are $110. To calculate the debt payments-to-income ratio without the college loan, we divide her monthly debt payments by her net income and multiply by 100 to get a percentage:

Debt payments-to-income ratio without college loan = ($110 / $1,059) × 100 = 10.39%

If she takes out the college loan, her monthly debt payments will increase by $133.

Total monthly debt payments with college loan = $110 + $133 = $243

Debt payments-to-income ratio with college loan = ($243 / $1,059) × 100 = 22.94%

For Carl's situation, his total monthly payment on debt (house and car) is $1,640 + $482 = $2,122. His take-home pay is $3,250.

Loan payments-to-income ratio for Carl = ($2,122 / $3,250) × 100 = 65.29%

Last, to find your own debt payments-to-income ratio:

Your Net Income: $2,850 per monthYour Total Monthly Debt Payments: $1,140Your Debt payments-to-income ratio = ($1,140 / $2,850) × 100 = 40%

Your company rents computers to local businesses and schools. You have 3,000 computers with a book value of $177,500. As a result of changing technology, your computers are more difficult to rent so you must drastically reduce your rental price, which causes a decrease in estimated future cash flows. The fair value of the computers is estimated to be $116,500 because of their outdated technology. Your company should report an asset impairment loss of:

Answers

Answer:

The answer is $61,000

Explanation:

An impairment loss is recognized when the carrying amount of an asset is less than its fair value(prevailing market price).

The difference between the carrying value and fair value is written off. Carrying amount is the cost of acquiring an asset minus any subsequent depreciation and impairment charges.

Impairment Loss = Book Value – Market Value

Impairment Loss = $177,500 - $116,500

Impairment loss is $61,000

Product Pricing: Single Product Assume that you plan to open a soft ice cream franchise in a resort community during the summer months. Fixed operating costs for the three- month period are projected to be $5,650. Variable costs per serving include the cost of the ice cream and cone, $0.50, and a franchise fee payable to Austrian Ice, AG, $0.15. A market analysis prepared by the Austrian Ice indicates that the summer sales in the resort community should total 24,000.

Required: Determine the price should charge for each ice cream cone to achieve a $20,000 profit for the three-month period.

Answers

Answer:

$1.71

Explanation:

The computation of sales per unit is shown below:-

Variable cost = Total units × (Cost of ice cream and cone + Franchise fee payable)

= 24,000 × ($0.50 + $0.15)

= 24,000 × $0.65

= $15,600

Total cost = Fixed cost + Variable cost

= $5,650 + $15,600

= $21,250

Sales = Total cost + Profit

= $21,250 + $20,000

= $41,250

Sales price per unit = Sales ÷ Community total

= $41,250 ÷ 24,000

= $1.71

The provisions of some laws and regulations have a direct effect on the financial statements in determining the reported amounts and disclosures in the financial statements. Which of the following is least likely to have a direct effect on the financial statements of the entity identified?

A. A corporation’s compliance with the tax code.

B. A bank’s compliance with legal capital requirements.

C. A service firm’s compliance with pension laws.

D. A manufacturer’s compliance with the occupational and safety code.

Answers

Answer:

Option D is correct.

Explanation:

A manufacturer’s compliance with the occupational and safety code is least likely to have a direct effect on the financial statements of the entity identified.

SEU Co. has preferred stock outstanding that is expected to pay an annual dividend of $4.88 every year in perpetuity. If the required return is 4.69 percent, what is the current stock price

Answers

Answer:

Current stock price = $1.040

Explanation:

We know,

Current preferred stock price = Preferred dividend ÷ Expected rate of return

Given,

Expected rate of return = 4.69%

Preferred dividend = $4.88

Current preferred stock price = ?

Putting the values into the formula, we can get

Current preferred stock price = $4.88 ÷ 4.69%

Or,Current preferred stock price = $1.040.

Therefore, the current preferred stock price is $1.040.

Melody lane music company was started by john ross early in 2016. Initial capital was acquired by issuing shares of common stock to various investors and by obtaining a loan. The company operates a retail store that sells records, tapes, and compact discs. Business was so good during the first year of operations that john is considering opening a second store on the other side of town. The funds neccesarry for expansion will come from a new bank loan. In order to approve the loan the bank requires financial statements. John asks for your help in prepareing the balance sheet and presents you with the following information for the year ending December 31 2016:

Cash receipts consist of the following,

From costumers $360,000

From issue of common stock 100,00

From bank loan 100,000

Cash disbursements were as follows:

Purchase of inventory 300,000

Rent 15,000

Salaries 30,000

Utilities 5,000

Insurance 3,000

Purchase of equipment and furniture 40,000

The bank loan was made on march 31 2016 a note was signed requiring payment of interest and principle on march 31 2017. The interest rate is 12%

The equipment and furniture were purchased on January 3 2016 and have an estimated useful life of 10 years with no anticipated salvage value. Depreciation per year is 4,000

Inventories on hand at the end of the year cost 100,000

Amounts owed at December 31, 2016 were as follows

To supliers of inventory $20,000

To the utility company $1,000

Rent on the store building is 1,000 per month. On Dec 1, 2016 four months rent was paid in advance.

Net income for the year was $76,000. Assume that the company is not subject to federal state or local income tax.

One hundred thousand shares of no par common stock are authorized, of which 20,000 shares were issued and are outstanding

Required: prepare a balance sheet at December 31, 2016.

Answers

Answer/Explanation:

Note 2: Interest on Bank Loan

Interest = (Principal x Time x rate) / 100

Principal = $100,000;

Time = 9/12 = 0.75

Rate = 12%

Interest = (100,000 x 0.75 x 12) / 100 = 9,000

See Note 1 and 3 on the attachment for the cash at hand and rent advance respectively.

Balance sheet (see attachment):

Total Assets = 36,000 + 100,000 + 167,000 + 3,000 = 306,000

Total Liability + Capital = 100,000 + 76,000 130,000 = 306,000

Conclusion:

The balance sheet as can be seen in the attachment that has been prepared, revealed that the company’s current assets is sufficient to meet its current liabilities. Therefore the bank runs no risk for giving the company the credit facilities.

Final answer:

This answer draws up a balance sheet for Melody Lane Music Company for the year ending December 31, 2016 by categorising and calculating their assets, liabilities, and shareholders' equity based on the provided financial data.

Explanation:

To prepare a balance sheet for the Melody Lane Music Company for the year ending December 31, 2016, you need to list the company's assets, liabilities, and shareholders' equity at that date based on the provided information.

Assets:Cash: The total cash is the sum of cash receipts minus the cash disbursements. ($360,000 + $100,000 + $100,000) - ($300,000 + $15,000 + $30,000 + $5,000 + $3,000 + $40,000) = $167,000Inventory: The inventory on hand at the end of the year is $100,000Prepaid Rent: Four months rent were paid in advance so $4,000 ($1,000 x 4 months) is counted as an assetEquipment and Furniture: Purchased for $40,000 and being depreciated at $4,000/year, so net value is $36,000 ($40,000 - $4,000)Liabilities:Accounts Payable: Amounts owed to suppliers of inventory and the utility company totaling $21,000 ($20,000 + $1,000)Bank loan: $100,000Interest Payable: Interest payable on the bank loan totaling $12,000 ($100,000 x 12%)Shareholder's Equity:Common Stock: $100,000 from issue of common stockRetained Earnings: Net income for the year, which is $76,000

In summary, total Assets ($167,000 Cash + $100,000 Inventory + $4,000 Prepaid Rent + $36,000 Equipment) should equal to total Liabilities and Shareholder's Equity ($21,000 Accounts Payable + $100,000 Bank Loan + $12,000 Interest Payable + $100,000 Common Stock + $76,000 Retained Earnings).

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Newlife Inc. announced today that it will begin paying annual dividends. The first dividend will be paid next year in the amount of $.63 a share. The following dividends will be $.68, $.83, and $1.13 a share annually for the following three years, respectively. After that, dividends are projected to increase by 4.1 percent per year. How much are you willing to pay today to buy one share of this stock if your desired rate of return is 15 percent?

Answers

Answer:

$7.63

Explanation:

Worth of the stock is the present value of all the cash flows associated with the stock. Dividend is the only cash flow that a stock holder receives against its investment in the stocks. We need to calculate the present values of all the dividend payments.

Formula for PV of dividend

PV of Dividend = Dividend x ( 1 + r )^-n

1st year

PV of Dividend = $0.63 x ( 1 + 15% )^-1 = $0.55

2nd year

PV of Dividend = $0.68 x ( 1 + 15% )^-2 = $0.51

3rd year

PV of Dividend = $0.83 x ( 1 + 15% )^-3 = $0.55

4th year

PV of Dividend = $1.13 x ( 1 + 15% )^-4 = $0.65

After four years the dividend will grow at a constant rate of 4.1%, so we will use the following formula to calculate the present value

PV of Dividend = [ $1.13 x ( 1 + 4.1% ) / ( 15% - 4.1% ) ] x [ ( 1 + 15% )^-5 ]

PV of Dividend = $5.37

Value of Stock = $0.55 + $0.51 + $0.55 + $0.65 + $5.37 = $7.63

Standard costs rather than actual costs should be used in transfer-pricing methods because:

A. financial accounting rules (GAAP) require the use of standard costs.

B. tax rules require the use of standard costs.

C. standard costs are more readily available than actual costs.

D. standard costs facilitate a professionally negotiated, amicable settlement between the buying and selling divisions.

E.inefficient producing divisions could pass on their inefficiencies to buying divisions in the transfer price.

Answers

Answer:

E.inefficient producing divisions could pass on their inefficiencies to buying divisions in the transfer price.

Explanation:

The transfer price refers to that price in which the one firm is charging the prices from the other firm with respect to the service rendered. It is based on price charged in the market

To find out the transfer price we considered the standard cost instead of the actual cost as the divisions may be have more actual cost as compare to the standard cost which resulted into the inefficiency that impact the buying based on the transfer price

Erosion costs. Fat Tire Bicycle Company currently sells 39 comma 000 bicycles per year. The current bike is a standard balloon-tire bike selling for $120, with a production and shipping cost of $35. The company is thinking of introducing an off-road bike with a projected selling price of $375 and a production and shipping cost of $250. The projected annual sales for the off-road bike are 17 comma 000. The company will lose sales in fat-tire bikes of 9 comma 000 units per year if it introduces the new bike, however. What is the erosion cost from the new bike? Should Fat Tire start producing the off-road bike? What is the erosion cost from the new bike?

Answers

Answer:

Erosion cost from the new bike is equal to the profit lost from existing bike

= 9,000 x (120 - 35)

= $765,000

Benefit from new bike = 17,000 x (375 - 250)

= $2,125,000

Net Benefit = $2,125,000 - $765,000

= $1,360,000

Since there is net benefit from new bike, Fat Tire should start producing the off-road bike

"Individuals who participate in coaching programs that provide information on interviews and tips on successful interviewing tend to have higher interview scores than those who do not"

The effects of coaching on interviews evaluations

Answers

Explanation:

This is a true statement, but it does contain some caveats, because for an interview to be successful, it must consider a number of factors, such as the candidate's compatibility with the vacancy, the psychological profile must be compatible, but it will complement academic training and experiences required for the vacancy available.

However, it is a fact that

individuals who participate in training programs that provide information about interviews and tips on successful interviews, may perform better than those who did not, as they will learn the best self-confidence and public speaking techniques that they can achieve with higher scores.

Answer:

The statement is: True.

Explanation:

Interview coaching programs are useful for people who want to learn techniques to pass job interviews with optimal performances. How to prepare a resume, keep control in front of stress interviews or direct interviews, and techniques on how to pass multiple-skill tests are some of the topics reviewed in such training.

Under those circumstances, individuals increase their chances of being accepted for those jobs compared to applicants who do not prepare at the same level.

Stocks and bonds Use letters in alphabetical order to select options A are examples of stores of value, but not units of account nor medium of exchange. B are examples of stores of value and units of account, but do not function as medium of exchange. C are forms of money, according to economists. D have all the same functions as money, but are not considered money by economists.

Answers

Answer:

B are examples of stores of value, but not units of account nor medium of exchange.

Explanation:

(Stocks and bonds are store of value as they store the wealth of an individual but they are not units of account or medium of exchange and goods are not valued in terms of stock or bond and thus stock or bond can be used to purchase something.)

________ are more effective at generating recall and familiarity with a product, whereas ________ generate cognitive activity that encourage consumers to evaluate the advantages and disadvantages of a product. A) Distributed communications; massed communicationsB) Interference effects; involvement effects C) Pictorial cues; verbal cues D) Narrow categorizers; broad categorizers E) Copy tests; recognition tests

Answers

Answer:

The correct answer is letter "C": Pictorial cues; verbal cues.

Explanation:

Marketing uses different approaches to attract consumers' attention. When it comes to portraying images, advertising can implement pictorial cues to create a depth sensation on two-dimensional surfaces like flyers. Though, a verbal cue is necessary as well to provide the information the promotion is intended to transmit. That data can let the audience know what the advantages and disadvantages of the product promoted are.

Bardell, Inc. prepared its statement of cash flows for the year. The following information is taken from that statement: Net cash provided by operating activities $ 29,000 Net cash provided by investing activities 8,400 Cash balance, beginning of year 11,600 Cash balance, end of year 18,200 What is the amount of net cash provided by (used in) financing activities

Answers

Answer:

The Net Cash used in Financing activities is $30,800

Explanation:

Step 1 Determine the Movement in Cash during the period.

Movement = Ending Cash Balance - Beginning Cash Balance \

= 18,200 - 11,600

= 6,600 (inflow)

Step 2 Determine the Cash flow in Financing Activities

Cash flow statement for the year

Cash flow from Operating Activities $29,000

Net Cash flow from Investing Activities $ 8,400

Net Cash flow from Financing Activities (Balancing figure) ($30,800)

Movement in Cash during the year $6,600

Therefore, The Net Cash used in Financing activities is $30,800

When a purchase order is released, a commitment is made by a governmental unit to buy a computer to be manufactured to specifications for use in property tax administration. This commitment should be recorded in the general fund as a(n) General capital asset. Appropriation. Expenditure Encumbrance

Answers

Answer: Encumbrance

Explanation: The commitment made by a governmental unit to buy some product for use in administration is recorded in the general fund as an encumbrance which is defined as an interest, right, burden or liability that must be carried. As such, an encumbrance ensures that there will be enough funds available for the payment of certain governmental obligations and commonly refers to restricted funds in the general fund account.

Answer:

Encumbrance

Explanation:

An encumbrance is a portion of a budget set aside for spending required by law or contract. Like the budget itself, an encumbrance is a projection and not yet a reality. If business conditions continue as they are when you set the budget, then the encumbrance will become an expense.

The most common types of encumbrance apply to real estate; these include mortgages, easements, and property tax liens. Not all forms of encumbrance are financial, easements being an example of non-financial encumbrances. An encumbrance can also apply to personal – as opposed to real – property.

Coolmist produces high quality juices and competes head-on with the large national brands. Because of this stiff competition, they find it very difficult to raise the price of their juice. Oranges are a key raw material. As a rule the risk managers of Coolmist are NOT interested in designing an expensive risk management insurance strategy aimed at protecting their profit margins against small changes in the price of oranges. However, they are very interested in designing a cheaper risk management strategy that will protect margins against large changes in he price of oranges. Given this scenario, what financial engineering strategy would be most beneficial to Coolmist

Answers

Answer:

Explanation:

Being a juice producer, for which the raw material is oranges, Coolmist has to keep an eye on the prices of oranges. To protect herself from an increase in the cost of oranges, the financial engineering strategy that would be most beneficial to her is that she should buy in-the-money calls on oranges so that she will have an option to buy the oranges at the pre-decided strike price of the call option.

By doing the above, she would be protected against the price hike.

Indicate the effect of each of the following transactions on (1) the current ratio, (2) working capital, (3) stockholders’ equity, (4) book value per share of common stock, and (5) retained earnings. Assume that the current ratio is greater than 1:1. (Indicate the effect of each transactions by selecting "+" for increase, "–" for decrease, and "NC" for no change.)
Transactions:
A. Collected account receivable.
B. Wrote off account receivable.
C. Converted a short-term note payable to a long-term note payable.
D. Purchased inventory on account.
E. Declared cash dividend.
F. Sold merchandise on account at a profit.
G. Issued stock dividend.
H. Paid account payable.
I. Sold building at a loss.
Effect:
Current Ratio Working Capital Stockholders Equity Book Value Retained EarningsA.B.C.D.E.F.G.H.I

Answers

Answer:

A. Collected account receivable.

(1) the current ratio NC

(2) working capital NC

(3) stockholders’ equity NC