Vintage Audio Inc. manufactures audio speakers. Each speaker requires $115 per unit of direct materials. The speaker manufacturing assembly cell includes the following estimated costs for the period: Speaker assembly cell, estimated costs: Labor $48,710 Depreciation 6,530 Supplies 2,380 Power 1,780 Total cell costs for the period $59,400 The operating plan calls for 165 operating hours for the period. Each speaker requires 15 minutes of cell process time. The unit selling price for each speaker is $312. During the period, the following transactions occurred: Purchased materials to produce 750 speaker units. Applied conversion costs to production of 715 speaker units. Completed and transferred 685 speaker units to finished goods. Sold 655 speaker units. There were no inventories at the beginning of the period. a. Journalize the summary transactions (1)-(4) for the period. Round the per unit cost to the nearest cent and use in subsequent computations. If an amount box does not require an entry, leave it blank. 1. 2. 3. 4. Sale 4. Cost
Answers
Answer:
1. Purchase materials to manufacture 750 speakers
Debit Raw and In Process Inventory $86,250
Credit Accounts payable $86,250
2. Conversion costs to 715 units
Debit Raw and In Process inventory $64,350
Credit Conversion costs $64,350
3.Completed and transferred 665 units to Finished Goods
Debit Finished Goods Inventory $136,325
Credit Raw and In Process Inventory with $136,325
4. Sales of 655 units
Debit Account receivable $204,360
Credit Sales $204,360
5. Cost of Goods sold - 655 units
Debit Cost of Goods sold $134,275
Credit Finished Goods inventory $134,275
Closing balance of Raw & In process Materials = $14,275
Closing balance of Finished Goods inventory = $2,050
Explanation:
Vintage Audio Inc.
Cell process time = 15 minutes per speaker
Conversion cost for 165 operating hours = $59,400.
Units produced in 165 hours = (165hrs x 60mins) / 15
= 660 units
Conversion costs per Unit = $59,400 / 660 units = $90
Refer to the attached for very detailed presentation of answers
Related Questions
Worldwide Company obtained a charter from the state in January that authorized 200,000 shares of common stock, $10 par value. During the first year, the company earned $38,200, declared no dividends, and the following selected transactions occurred in the order given: Issued 60,000 shares of the common stock at $12 cash per share. Reacquired 2,000 shares at $15 cash per share from stockholders; the shares are now held in treasury. Reissued 1,000 of the shares in transaction (b) two months later at $18 cash per share. 3. Prepare the stockholders’ equity section of the balance sheet at December 31. TIP: Because this is the first year of operations, Retained Earnings has a zero balance at the beginning of the year. (Amounts to be deducted should be indicated by a minus sign.)
Answers
Answer and Explanation:
The preparation of stockholders’ equity section is shown below:-
Worldwide Company
Statement of stockholder equity
31 December
Paid-in-capital
Common stock - $10 par, 200,000 shares authorized
60,000 shares issued and outstanding $600,000
Paid in capital in excess of par - common $120,000
(60,000 × $12) - (60,000 × $10)
Paid in capital from treasury stock $3,000
(1,000 × $18) - (1,000 × $15)
Total paid in capital $717,000
Retained earning $38,200
Sub total $755,200
Less: Treasury stock at cost $15,000
(1,000 × $15)
Total stockholder equity $740,200
Therefore from above the stockholders’ equity is prepared.
The stockholders' equity section of the balance sheet at December 31 includes common stock, treasury stock, and retained earnings.
Explanation:To prepare the stockholders' equity section of the balance sheet, we need to consider the transactions that occurred during the year. First, the company issued 60,000 shares of common stock at $12 per share, which increases the common stock account by $720,000 (60,000 shares x $12 per share). Next, the company reacquired 2,000 shares at $15 per share, which decreases the common stock account by $30,000 (2,000 shares x $15 per share). The reacquired shares are now held in treasury. Then, the company reissued 1,000 of the treasury shares two months later at $18 per share, which increases the common stock account by $18,000 (1,000 shares x $18 per share). Since no dividends were declared, the retained earnings account remains at a zero balance.
Therefore, the stockholders' equity section of the balance sheet at December 31 would be as follows:
Common stock: $708,000 ($720,000 - $12,000)Treasury stock: ($30,000)Retained earnings: $0Learn more about stockholders' equity section here:https://brainly.com/question/33717039
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If businesses are confident about an increase in demand for their products, they will Select the correct answer below: expand production and reduce investment spending expand production and investment spending reduce production and investment spending reduce production and expand investment spending
Answers
Answer:
expand production and investment spending
Explanation:
If there is high likelihood of surge in demand, then supply should be such that it should be able to meet those demands. Hence, to increase supply production should be increased .
Second production cost is sum of fixed cost and variable cost. While fixed cost (cost which remains constant such as rent, labor charges and other cost which does not change with unit of production) remains same but variable cost will increase as variable cost is dependent on number of units of goods produced. So, when production increases variable cost will increase and hence investment will increase.
Thus, correct answer will increase production and investment spending.
Job A3B was ordered by a customer on September 25. During the month of September, Jaycee Corporation requisitioned $3,300 of direct materials and used $4,800 of direct labor. The job was not finished by the end of September, but needed an additional $3,800 of direct materials and additional direct labor of $7,300 to finish the job in October. The company applies overhead at the end of each month at a rate of 100% of the direct labor cost incurred. What is the total cost of the job when it is completed in October?
Answers
Answer:
$35,300
Explanation:
At the end of September total cost =
Material=$3,300
Labour=4800
Overheads(100% ×4800)=4800
Total=12,900
At the end of October total cost=
Material=3800
Labour=9300
Overheads(100% of 9300)=9300
Total=$22400
Total cost of the job at the end of October when it is completed
=$22,400$+$12,900
=$35,300
Therefore the total cost of the job when it is completed in October is $35,300
Final answer:
The total cost of Job A3B is calculated by summing the direct materials, direct labor, and applied overhead for both September and October, resulting in a total cost of $31,300.
Explanation:
The total cost of Job A3B when it is completed in October is calculated by adding the cost of direct materials, direct labor, and applied overhead for both months.
Direct materials: $3,300 (September) + $3,800 (October) = $7,100
Direct labor: $4,800 (September) + $7,300 (October) = $12,100
Applied overhead: Since overhead is applied at a rate of 100% of direct labor cost, it will be equal to the total direct labor cost. Therefore, applied overhead = $12,100.
Now, add up all the costs to find the total production cost:
Total cost = Direct materials + Direct labor + Applied overhead
Total cost = $7,100 + $12,100 + $12,100 = $31,300
Therefore, the total cost of Job A3B is $31,300.
Ziegler Corporation reports net income of $380,000 and a weighted-average of 200,000 shares of common stock outstanding for the year. Compute the earnings per share of common stock
Answers
Answer:
$1.90 per share
Explanation:
The computation of the earning per share is shown below:
Earning per share = (Net income - preference dividend) ÷ (weighted-average of shares of common stock)
= ($380,000 - $0) ÷ (200,000 shares)
= $1.90 per share
By dividing the net income with the weighted average number of shares of common stock we can get the earning per share
Final answer:
To calculate the earnings per share for Ziegler Corporation, divide the net income of $380,000 by the 200,000 shares outstanding, giving an EPS of $1.90 per share. This figure aids investors in evaluating the company's per-share profitability and contributes to the P/E Ratio's determination.
Explanation:
To compute the earnings per share (EPS) for Ziegler Corporation, you divide the company's net income by the weighted-average number of common stock shares outstanding. According to the information provided, Ziegler Corporation reports a net income of $380,000 and there are 200,000 shares of common stock outstanding. Therefore, the EPS calculation is as follows:
Earnings Per Share = Net Income / Weighted-Average Shares Outstanding:
$380,000 / 200,000 shares$1.90 per shareThis EPS figure is a significant indicator used by investors to assess the company's profitability on a per-share basis and is often factored into the Price to Earnings (P/E) Ratio, which helps determine the value and investment potential of a stock.
What are corrective actions, how does the project manager know that corrective action is needed, how are the root causes of corrective actions determined, how is the effectiveness of a corrective action measured, and what happens if the necessary corrective action is not performed in a timely fashion
Answers
Answer:
1. Corrective actions are actions executed to prevent occurrences of an identified hazard or to prevent the recurrence of an issue. Corrective actions may also question and seek proper handling of a weakness identified in a safety management system.
2. Project managers employ corrective actions when a specific task or project may have lost focus or somehow deviated form the pre-specified direction it was intended to take.
3. The root causes of corrective actions are determined by confirming the identified root cause causes. Basically, a corrective action should correspond to the root cause identified earlier in order to eliminate the real root cause and prevent recurrence of the problem.
4. Verifying the effectiveness of corrective and preventive actions (CAPAs) closes the gap between identifying a problem and completing the actions to solve it. It is reasonable to assume that if a problem is worth solving, it's also worth verifying that the solution worked.
5. It could result to total loss in product or a ruin in the normal sequence of an existing system
A used car can be kept for two more years and then sold for an estimated $3000, or it could be sold now for $7500. The average annual maintenance cost over the past 7 years has been $500 per year. However, if the car is kept for two more years this cost is expected to be $1800 the first year and $2000 the second year. As an alternative a new car can be purchased for $22,000 and be used for 4 years, after which it can be sold for $8000. The new car will be under warranty for the first 4 years, and not extra maintenance cost will be incurred during those years. If the MARR is 15% per year what is the better option and why?
a. Keep car, do not buy new one because EUAC Defender is $5111 and EUAC of Challenger is $6104
b. Buy new car because EUAC of challenger is $4904 and EUAC and defender is $5111
c. Buy new car because EUAC of Challenger is -$9308 and EUAC of defender is $498
Answers
Final answer:
To determine whether to keep an old car or buy a new one, you calculate and compare the Equivalent Uniform Annual Cost (EUAC) for each, taking into account all costs and the time value of money as per the Minimum Attractive Rate of Return (MARR). The option with the lower EUAC is usually preferred, signaling better economic value over time. Due to discrepancies in the information provided, a precise recommendation cannot be made without accurate data.
Explanation:
Evaluating the Economic Merits of Keeping vs. Buying a Car
To decide between keeping a used car or buying a new one, we need to calculate and compare the Equivalent Uniform Annual Cost (EUAC) for each option. A challenge in this business decision lies in accounting for all associated costs including purchase, maintenance, and sale price, and the time value of money represented by the Minimum Attractive Rate of Return (MARR) over a given period.
For the used car (Defender), we have:
- Future sale price in two years: $3000
- Maintenance costs for the next two years: $1800 and $2000 respectively
- Selling now price: $7500
Calculating the EUAC for the used car incorporates these costs and the MARR of 15%.
The new car (Challenger) would require:
- Initial purchase price: $22,000
- Sale price after 4 years: $8000
- Maintenance costs: $0 (due to warranty)
Again, calculating the EUAC for the new car incorporates the purchase and future sale price and considers the MARR of 15%.
To make an informed decision, we would perform a detailed calculation for each option's EUAC, compare the results, and choose the option with the lower EUAC, indicating a more economical choice over time. However, the information provided appears to contain a discrepancy, and without correct data or further clarification, we cannot provide an exact answer. The concept of EUAC is essential for understanding how to evaluate such financial decisions effectively.
Monty Manufacturing has old equipment that cost $52,000. The equipment has accumulated depreciation of $28,300. Monty has decided to sell the equipment. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
a. What entry would Monty make to record the sale of the equipment for $38,000 cash.
b. What entry would Monty make to record the sale of the equipment for $16,500 cash.
Answers
Answer:
a.
Cash 38000 Dr
Accumulated Depreciation-Equipment 28300 Dr
Equipment Account 52000 Cr
Gain on Disposal 14300 Cr
b.
Cash 16500 Dr
Accumulated Depreciation-Equipment 28300 Dr
Loss on Disposal 7200 Dr
Equipment Account 52000 Cr
Explanation:
a.
The carrying value of the equipment is its net value in the books after deducting the accumulated depreciation from the cost.
The carrying value of the asset before sale is = 52000 - 28300 = $23700
The gain/loss on disposal = Cash received from sale - carrying value
Gain/loss on disposal = 38000 - 23700 = $14300 or a gain of $14300
b.
The gain/loss on disposal = 16500 - 23700 = -$7200 or a loss of $7200
Answer:
a.
Cash$38,000 (debit)
Accumulated Depreciation$28,300 (debit)
Equipment $52,000 (credit)
Profit on Sale of Equipment $14,300
b.
Cash$16,500 (debit)
Accumulated Depreciation$28,300 (debit)
Loss on Sale of Equipment $7,300
Equipment $52,000 (credit)
Explanation:
For any Disposal of an Asset the following should occur:
De-recognise cost of the AssetDe-recognise Accumulated DepreciationRecognise the Proceeds of the SaleRecognise Profit or Loss on SaleSkysong Company purchased an electric wax melter on April 30, 2020, by trading in its old gas model and paying the balance in cash. The following data relate to the purchase. List price of new melter $17,380 Cash paid 11,000 Cost of old melter (5-year life, $770 salvage value) 12,320 Accumulated Depreciation-old melter (straight-line) 6,930 Secondhand fair value of old melter 5,720 Prepare the journal entries necessary to record this exchange, assuming that the exchange (a) has commercial substance, and (b) lacks commercial substance. Skysong’s fiscal year ends on December 31, and depreciation has been recorded through December 31, 2019. (C
Answers
Answer:
(a) has commercial substance
J1
Electric wax melter 5,720 (debit)
Accumulated depreciation :old gas model 6,930 (debit)
Old gas model : cost 12,320 (credit)
Profit on exchange of old gas model 320 (credit)
J2
Electric wax melter 11,000 (debit)
Cash 11,000 (debit)
(b) lacks commercial substance
J1
Electric wax melter 5,390 (debit)
Accumulated depreciation :old gas model 6,930 (debit)
Old gas model : cost 12,320 (credit)
J2
Electric wax melter 11,000 (debit)
Cash 11,000 (debit)
Explanation:
In terms of IAS 16, if an exchange of non-monetary item has commercial substance the Asset Acquired is measured at the Fair Value of Asset Given up or Fair Value of Asset Acquired.
However if an exchange of non-monetary item lacks commercial substance the Asset Acquired is measured at Carrying Amount of Asset Given up and there would no be any gain or loss on the exhange of asset given up.
(a) has commercial substance
J1
Electric wax melter 5,720 (debit)
Accumulated depreciation :old gas model 6,930 (debit)
Old gas model : cost 12,320 (credit)
Profit on exchange of old gas model 320 (credit)
J2
Electric wax melter 11,000 (debit)
Cash 11,000 (debit)
(b) lacks commercial substance
J1
Electric wax melter 5,390 (debit)
Accumulated depreciation :old gas model 6,930 (debit)
Old gas model : cost 12,320 (credit)
J2
Electric wax melter 11,000 (debit)
Cash 11,000 (debit)
The accounting for asset exchanges depends on whether the exchange has commercial substance or not. With commercial substance, the entry involves recording the new asset at its full value, and recognizing gains or losses. Without commercial substance, the entry usually involves recording the new asset at the book value of the old asset plus any cash paid.
Explanation:The question involves journal entries associated with the exchange of assets in accounting, specifically related to Skysong Company's purchase of a new electric wax melter.
First, let's look at the situation when the exchange has commercial substance:Debit Equipment ($17,380: list price of new melter) Credit Accumulated Depreciation ($6,930: accumulated depreciation of old melter) Credit Equipment ($12,320: cost of old melter) Credit Cash ($11,000: cash paid) Now, for the situation where the exchange lacks commercial substance: The calculations might become complex and may require additional data. Usually, the entry would involve recording the new asset at the book value of the old asset (cost - accumulated depreciation), plus cash paid. The gain or loss would then be deferred or recognized depending on the specific circumstances.This type of transactions are guided by Accounting Standards Codification (ASC) 845, which relates to nonmonetary transactions.
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Linda is the director of HR at Colette Value Inc., a large tax-preparation firm. The firm faces a dearth of tax preparers every year when the tax season approaches. Every December, Linda outsources a bulk of the recruiting process to an employment agency to recruit temporary employees before the tax season begins. However, she wants to do so without excessively limiting her final hiring decisions. Which of the following processes of recruitment should Linda carry out first hand?
A) Advertising for recruitment over the Internet
B) Preliminary screening of résumés
C) Designing the employment advertisements
D) Face-to-face interviews with finalists
Answers
Answer:
The correct answer is letter "D": Face-to-face interviews with finalists.
Explanation:
As Linda does not want to limit her hiring decision, she should let the employment agency to be in charge of the recruiting process but intervene in the face-to-face interviews with the finalists. In such a way, she will make sure that the agency is screening the correct applicants, and Linda, eventually, will have the final decision in the selection process.
Wildcat Co. purchased, on open account, 4,000 pounds of direct materials at a total cost of $20,200. The standard cost of these materials, at $5.00 per pound, was $20,000. The company records any price variance for direct materials at point of purchase. During the current month 1,000 units of output were produced. Each unit of output, at standard, requires 2 pounds of direct materials, at $5.00 per pound. A total of 1,950 pounds of material was consumed in production during the month. The direct labor payroll for the period was $25,000 and has yet to be paid. The standard direct labor hours to produce each unit is 2 and the standard wage rate per hour is $11. The actual wage rate per hour was $10. The standard direct manufacturing cost for each unit is $32. During the month, 1,000 units were produced. During the month, 900 units were sold, at a price of $50 per unit. Record the journal entries for each of the events and transactions.
Answers
Answer:
Explanation:
The pictures attached shows the full explanation
A DI has two assets: 50 percent in one-month T-bills and 50 percent in real estate loans. If the DI must liquidate its T-bills today, it receives $98 per $100 of face value; if it can wait to liquidate them on maturity (in one month's time), it will receive $100 per $100 of face value. If the DI has to liquidate its real estate loans today, it receives $90 per $100 of face value. However, liquidation of real estate loans at the end of one month will produce $92 per $100 of face value. The one-month liquidity index value for this DI's asset portfolio is:
Answers
Answer:
Explanation:
The one-month liquidity index value for this DI's asset portfolio
= weight of T-bills * (value of T-bill today / value of T-bills after one month) + weight of real estate loan * (value of real estate loan today / value of real estate loan after one month)
= 50% * ($97 / $ 100) + 50% ($93/ $94)
= 0.5 * 0.97 + 0.5 *0.9894 = 0.9797
Therefore one-month liquidity index value for this DI's asset portfolio is 0.98.
Final answer:
The one-month liquidity index value of a depository institution's asset portfolio with 50% in T-bills and 50% in real estate loans is 0.97915.
Explanation:
The question asks about computing the one-month liquidity index value of a depository institution's (DI) asset portfolio, which comprises 50 percent in one-month T-bills and 50 percent in real estate loans. The liquidity index is a measure of how much less the DI would obtain if it had to liquidate assets today compared to their value at maturity in one month. To calculate this, we must compare the liquidation values (immediate cash received) for each asset type against their face value if held to maturity.
For the T-bills:
Immediate liquidation: $98 per $100 of face value
Value at maturity: $100 per $100 of face value
For the real estate loans:
Immediate liquidation: $90 per $100 of face value
Value at maturity: $92 per $100 of face value
The liquidity index for each asset type is calculated by dividing the immediate liquidation value by the value at maturity:
T-bills liquidity index = $98 / $100 = 0.98
Real estate loans liquidity index = $90 / $92 = 0.9783
As the portfolio is evenly split between the two assets, the overall liquidity index value of the asset portfolio is the average of the two individual indices:
Overall liquidity index = (0.98 + 0.9783) / 2 = 0.97915
Upon completing an aging analysis of accounts receivable, the accountant for Rosco Works prepared an aging of accounts receivable and estimated that $6,700 of the $99,700 accounts receivable balance would be uncollectible. The allowance for doubtful accounts had a $570 debit balance at year-end prior to adjustment. What is the amount of bad debt expense?
Answers
Answer:
-$7,270
Explanation:
Accounts receivable is the amount that is owed to the business by various parties that is due within a particular period.
In this instance there was an aging analysis done that estimated that $6,700 will be uncollectible. This will result in a bad debt expense of -$6,700.
Before now there was a balance of -$570 in allowance for doubtful accounts. Meaning there was a debit balance attributed to uncollected debt.
The total debt balance will now be -6,700-570 = -$7,270
Answer:
$7,270
Explanation:
Allowance for doubtful accounts is a contra asset account. It has credit balance and need to be adjusted against the receivable account balance to show net receivable amount on the balance sheet.
As $6,700 of uncollectible accounts receivables are estimated, but allowance account has a debit balance of $570.
Bad Debt Expense for the year = Estimated uncollectible accounts receivables + Year end debit balance of Allowance for doubtful accounts
Bad Debt Expense for the year = $6,700 + $570
Bad Debt Expense for the year = $7,270
Lyons Company deducts insurance expense of $210,000 for tax purposes in 2018, but the expense is not yet recognized for accounting purposes. In 2019, 2020, and 2021, no insurance expense will be deducted for tax purposes, but $70,000 of insurance expense will be reported for accounting purposes in each of these years. Lyons Company has a tax rate of 40% and income taxes payable of $180,000 at the end of 2018. There were no deferred taxes at the beginning of 2018. What is the amount of the deferred tax liability at the end of 2018?
Answers
Answer:
$84,000
Explanation:
Deferred tax liability at the end of 2018 = Amount of insurance expense × Tax rate = $210,000 × $40% = $84,000
Therefore, the amount of the deferred tax liability at the end of 2018 is $84,000.
Cash Budget Pasadena Candle Inc. pays 40% of its purchases on account in the month of the purchase and 60% in the month following the purchase. If purchases are budgeted to be $40,000 for August and $36,000 for September. Prepare a simple cash budget for Pasadena Candle Inc. Pasadena Candle Inc. Schedule of Cash Payments for Purchases For the Month Ending September $ Total payments for purchases on account $
Answers
Answer:
Total payments for purchases on account $38,400
Explanation:
September Payments for Purchases include
40% of September Sales60% of August SalesSchedule of Cash Payments for Purchases For the Month Ending September
September Sales ($36,000×40%) = $14,400
August Sales ($40,000×60%) = $24,000
Total = $38,400
Answer:
Th e cash payments in the month of September is $38,400
Explanation:
August September
Cash payment $16,000 $14,400
balance of August purchases $24,000
September total payments $38,400
In August 40% of $40,000 would be paid since $40,000 was the worth of the purchases in August i,e $40000*40%=$16,000
In September the remaining 60% of $40,000 is due for payment i.e $40,000*60%=$24,000
In September 40% of the month purchases is due for payment,that is $36,000*40%=$14,400
The balance of 60% of $36,000 would be paid in October.
Cash Payments Schedule Fein Company provided the following information relating to cash payments: Fein purchased direct materials on account in the following amounts: June $68,000 July 77,000 August 73,000 Fein pays 20% of accounts payable in the month of purchase and the remaining 80% in the following month. In July, direct labor cost was $32,300. August direct labor cost was $35,400. The company finds that typically 90% of direct labor cost is paid in cash during the month, with the remainder paid in the following month. August overhead amounted to $71,200, including $6,350 of depreciation. Fein had taken out a 4-month loan of $15,000 on May 1. Interest, due with payment of principal, accrued at the rate of 9% per year. The loan and all interest were repaid on August 31. (Note: Use whole months to compute interest payment.)
Answers
Answer: $191,590
Explanation:
August Payments on accounts payable:
From JULY PURCHASES - $77,000 x 80%
$77,000 × 0.8 = $61,600
From August purchases - $73,000 x 20% $73,000 × 0.2 = $14,600
Direct labor payments:
From JULY: $32,300 x 10%
$32,300 × 0.1 = 3,230
From AUGUST: $35,400 x 90%
$35,400 × 0.9 = $31,860
Overhead : $71200 - $6350 = 64,850
Loan repayment - $15,450
Cash payments - $191,590
Loan repayment :
[Loan + ( loan × rate × period)
[15000 + (15000 × (9/100) × 4/12)]
15000 + 450 = $15,450
Cash payment for August :
15450+64850+31860+3230+14600+61600 = $191,590
Answer:
In August the cash payment plan is $197,940
The detailed presentation can be found in the attached file.
Valuing Trading Securities at Fair Value On January 1, Valuation Allowance for Trading Investments had a zero balance. On December 31, the cost of the trading securities portfolio was $41,500, and the fair value was $46,300. Prepare the December 31 adjusting journal entry to record the unrealized gain or loss on trading investments.
Answers
Answer:
Dr. Trading securities $4,800
Cr. Unrealized gain on trading securities $4,800
Explanation:
Trading securities are recorded reported on the fair market value. The gain or loss arise from the increase or decrease in the value of trading securities. There is a gain if the price of trading security increases and loss when the price of the trading security decreases. Unrealized gains are reported in the separate section of stockholders equity.
Gain on Trading securities = Fair value of security portfolio - Cost of security portfolio = $46,300 - $41,500 = $4,800
Returns and Actions Kunal Nayyar from London, had $60,000 in investments in the USA at the beginning of the year that consisted of a diversified portfolio of stocks (40 percent), bonds (40 percent), and cash equivalents (20 percent). His returns over the past 12 months were 14 percent on stocks, 5 percent on bonds, and 1 percent on cash equivalents. What is Kunal's average return for the year? Round your answer to one decimal place. % If Kunal wanted to rebalance his portfolio to its original position, what specific actions should he take?
Answers
Answer:
Average rate of return is 7.8% , and total amount is $4,680
If Kunal wanted to rebalance his portfolio to its original position, he needs to transfer $672 (= $25,872 - $25,200) from stock account to bond account and $816 ( = $12,936 - $12,120) from stock account to cash.
Explanation:
Total return for year = 14% * (40% of $60,000) + 5% * (40% of $60,000+ 1% *(20% of $60,000) = $4,680
Average rate of return = $4,680/ $60,000 = 7.8%
At beginning, the amount in per diversified portfolio is as below:
Amount invested in stock = 40% * $60,000 = $24,000 Amount invested in bond = 40% * $60,000 = $24,000 Amount in cash = 20% *$60,000 = $12,000
After receiving return, the amount in per diversified portfolio is as below:
Amount invested in stock = $24,000 *(1+14%) = $27,360
Amount invested in bond = $24,000 *(1+5%) = $25,200 Amount in cash = $12,000 * (1 + 1%) = $12,120
And amount in Kunal’s investment fund = $27,360 + $25,200 + $12,120 = $64,680
If Kunal wanted to rebalance his portfolio to its original position, the amount in per diversified portfolio is as below:
Amount invested in stock = 40% * $64,680 = $25,872
Amount invested in bond = 40% * $64,680 = $25,872 Amount in cash = 20% * $64,680 = $12,936
⇒ Kunal needs to transfer $672 (= $25,872 - $25,200) from stock account to bond account and $816 ( = $12,936 - $12,120) from stock account to cash.
Which of these is an example of demographic data?
A- Personality
B- Appiteite
C- Style
D- Martial Status
Answers
Martial Status is an example of demographic data. Option (d) is correct for the question.
What do you mean by Personality?The term "personality" refers to the persistent traits, interests, motivations, values, self-concept, abilities, and emotional patterns that make up a person's particular way of adjusting to life.
A population's traits or changes over time are measured by demographic statistics. Making informed judgments regarding national policy requires access to data from records of births, deaths, marriages, immigration, and emigration as well as a periodical census of the population.
The population pyramid provides a helpful summary of this data. It offers information in an understandable graphical manner regarding the population's sex and age distribution.
The life table is yet another summary. It tracks and projects the life experiences of a cohort of people born in the same year from conception to death. The percentage of a cohort that is anticipated to live through each year (or decade in an abbreviated life table) is displayed in tabular or graphical form.
Therefore, Option (d) is correct. An example of demographic data is martial Status.
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Beta Company expects to incur overhead costs of $20,000 per month and direct production costs of $125 per unit. The estimated production activity for the upcoming year is 1,000 units. If the company desires to earn a gross profit of $50 per unit, the sales price per unit would be which of the following amounts
A) $379
B) $187
C) $136
D) $195
Answers
Answer:
$415
Explanation:
For computing the sales per unit first we have to determine the total sales value which is shown below:
Direct Production costs (1,000 units × $125) $125,000
Fixed Overhead costs for the year = $20,000 × 12 months = $240,000
Total Costs for the year $365,000
Gross Profit desired (1,000 units × $50) $50,000
Total Sales Value desired = Costs + Profit $415,000
Now
Sales price per unit is
= $415,000 ÷ 1,000 units
= $415
This is the answer but the same is not provided
The sales price per unit needed for Beta Company to achieve a gross profit of $50 per unit is $195, calculated by adding the per-unit production and overhead costs to the desired profit margin.
Explanation:To calculate the sales price per unit that Beta Company needs in order to achieve a gross profit of $50 per unit, we need to consider the given costs and desired profit margin. The company expects overhead costs of $20,000 per month. With an estimated production activity of 1,000 units, these fixed costs become $20 per unit (overhead costs / estimated production). The direct production cost is $125 per unit. Adding these costs together we get the total cost per unit, which is $125 (direct costs) + $20 (overhead per unit) = $145 per unit. To achieve a gross profit of $50, we add this desired profit to the total cost per unit, resulting in a sales price per unit of $195 ($145 + $50).
Ann M. Martin Company makes the following errors during the current year. (Evaluate each case independently and assume ending inventory in the following year is correctly stated.) 1. Ending inventory is overstated, but purchases and related accounts payable are recorded correctly. 2. Both ending inventory and purchases and related accounts payable are understated. (Assume this purchase was recorded and paid for in the following year.) 3. Ending inventory is correct, but a purchase on account was not recorded. (Assume this purchase was recorded and paid for in the following year.) Indicate the effect of each of these errors on working capital, current ratio (assume that the current ratio is greater than 1), retained earnings, and net income for the current year and the subsequent year.
Answers
Answer:
Please find the detailed answer in the explanation section.
Explanation:
CURRENT YEAR SUBSEQUENT YEAR
1. Working Capital Overstated No effect
Current Ratio Overstated No effect
Retained Earnings Overstated No effect
Net Income Overstated Understated
2. Working Capital No effect No effect
Current Ratio Overstated No effect
Retained Earnings No effect No effect
Net Income No effect No effect
3. Working Capital Overstated No effect
Current Ratio Overstated No effect
Retained Earnings Overstated No effect
Net Income Overstated Understated
Blue Split sells ice cream cones in a variety of flavours. The following are data for a recent week: Revenue (1,000 cones at $1.85 each) $1,850 Cost of ingredients $660 Rent 540 Store attendant 640 1,840 Pretax income $10 The manager estimates that if she were to increase the price of cones from $1.85 to $2.02 each, weekly volume would be cut to 850 cones due to competition from other nearby ice cream shops. Estimate the profit-maximizing price per cone.
Answers
Answer:
$1.40
Explanation:
Per cent change in price = ($2.02– $1.85)/$1.85 = +9%
Per cent change in demand = (1000 – 850)/1000 = –15%
The elasticity is = ln(1 + per cent change in quantity sold)/ln(1 + per cent change in price)
= ln(1 – 0.15)/ln(1 + 0.09)
= –0.16252/0.08618
= –1.886
Variable cost = $660/1000
Profit-maximising price = [–1.886/(–1.886+1)]*$0.66 = $1.40
Taylor United is considering overhauling its equipment to meet increased demand for its product. The cost of equipment overhaul is $4.02 million, plus $214,086.00 in installation costs. The firm will straight-line depreciate the equipment to zero using a 5-year recovery period. Additional sales from the overhaul should amount to $239,013.00 per year, and additional operating expenses and other costs (excluding depreciation) will amount to 39.00% of the additional sales. The firm has an ordinary tax rate of 37.00%. What is the operating cash flow for year 1 of this project?
Answers
Answer:
$405,175.06
Explanation:
The computation of the operating cash flow for year 1 is shown below:
Sales $239,013
Less operating expenses & other cost ($239,013 × 39%) -$93,215.07
Less: Depreciation expenses
($4,020,000 + $214,086) ÷ 5 years -$846,817.20
Earning before interest and taxes -$701,019.27
Less: Taxes at 37% $259,377.13
Net income -$441,642.14
Add: depreciation expenses $846,817.20
Operating cash flow $405,175.06
We simply deduct the operating sales and depreciation expenses from sales so that the EBIT could arrive after that taxes are deducted so that the net income could come and then finally added depreciation expenses so that operating cash flow could come
An economy is operating with output $300 billion above its natural level, and fiscal policymakers want to close this expansionary gap. The central bank agrees to adjust the money supply to hold the interest rate constant, so there is no crowding out. The marginal propensity to consume is 3/5, and the price level is completely fixed in the short run.
Required:
1. To close the expansionary gap, the government would need ____________.
Answers
Answer:
$120 billion
Explanation:
Economy operating at $300 billion above its natural level of output.
Marginal propensity to consume, MPC = 3/5 = 0.6
For closing this expansionary gap, the government have to decrease its spending by the amount calculated as follows:
Spending multiplier:
= 1/ (1 - MPC)
= 1/ (1 - 0.6)
= 1/ 0.4
= 2.5
Hence, the government spending reduces by
= Expansionary gap ÷ Spending multiplier
= $300 ÷ 2.5
= $120 billion
Suppose a bank enters a repurchase agreement in which it agrees to buy Treasury securities from a correspondent bank at a price of $33,950,000, with the promise to buy them back at a price of $34,000,000. a. Calculate the yield on the repo if it has a 5-day maturity. b. Calculate the yield on the repo if it has a 15-day maturity.
Answers
Answer:
a. 10.60%
b. 3.53%
Explanation:
a. Calculate the yield on the repo if it has a 5-day maturity.
Profit = $34,000,000 − $33,950,000 = $50,000
Using 360 days a year, we have:
Yield on the repo = ($50,000/$33,950,000)*(360/5) = 0.1060, or 10.60%
b. Calculate the yield on the repo if it has a 15-day maturity.
Using 360 days a year also, we have:
Yield on the repo = ($50,000/$33,950,000)*(360/15) = 0.0353, or 3.53%
Capital budgeting is: the process of finding the cost to start a new project. the process of deciding which project to do to increase the firm’s value. the process of budgeting companies monthly revenue and cost. the process of estimating how long the life of a new project. None of the above.
Answers
Answer:
the process of deciding which project to do to increase the firm’s value.
Explanation:
Some of the Capital budgeting methods include:
1. internal rate of return- internal rate of return is the discount rate that equates the after tax cash flows from an investment to the amount invested.
2. Cash pay back period- it is the period it takes to recover the amount invested in a project from its cummulative cash flows.
3. Net present value: net present value is the present value of after tax cash flows from an investment less the amount invested.
I hope my answer helps you
Capital budgeting is the process by which firms decide which long-term investments will maximize their value, involving the analysis of potential earnings and the source of capital required for these investments.
Capital budgeting is the process of deciding which project to do to increase the firm’s value. It involves evaluating the long-term profitability and financial impact of potential investments and projects. Firms raise financial capital to fund these projects, which can come from early-stage investors, reinvesting profits, borrowing, or selling stock.
Capital budgets differ from operating budgets in that they are used for long-term investments in assets like buildings and machinery, and are part of a capital improvement plan identifying long-term spending needs.
Unlike operating budgeting, which includes recurring spending items for day-to-day operations such as salaries and utilities, capital budgeting focuses on investments that will benefit the firm in the future, like purchasing new equipment or building new facilities. These decisions are crucial because they can impact a firm's earnings for years to come. Therefore, capital budgeting often involves cost analysis, comparison with potential revenues, and consideration of the cost of various sources of capital.
Listed below are various transactions that a company incurred during the current year. Select the impact on total stockholders’ equity for each scenario. Specifically state whether stockholders’ equity would increase (I), decrease (D), or have no effect (NE) as a result of each transaction listed below. Consider each transaction independently.
1. No par common stock is issued.
2. Treasury stock is sold at cost for cash (assume the cost method).
3. Treasury shares of preferred stock are purchased (assume the cost method).
4. A payment date occurs for a cash dividend.
Answers
Answer: Please refer to Explanation
Explanation:
1. No par common stock is issued. NO EFFECT (NE)
There is no effect because this neither increases nor does it reduce Equity.
2. Treasury stock is sold at cost for cash (assume the cost method). INCREASE (I).
This transaction increases equity as Treasury stock is being put into the market. Treasury stock is equity in the company that the company had repurchased.
3. Treasury shares of preferred stock are purchased (assume the cost method). DECREASE (I)
Buying Treasury whether Preferred or Ordinary reduces equity in the company as the company is essentially taking back ownership from owners.
4. A payment date occurs for a cash dividend. DECREASE (D)
Paying out dividends to shareholders has the effect of reducing equity.
Answer:
1.No par issue of common stock -stockholders' equity increases(I)
2.Sale of treasury stock at cost-stockholders' equity increases(I)
3.Purchase of preferred shares-reduces stockholders' equity(D)
4.Payment of cash dividend-no impact on stockholders' equity(NE)
Explanation:
Considering the first transaction of no par common stock issuance,this would increase the value of common stock ,hence stockholders' equity would increase.
Treasury stock sale would increase the stockholders' equity since the company has to receive cash consideration from the affected investors and also reduce treasury stock and concurrently increase total paid-in capital.
Purchase of treasury stock implies reduction in cash and also increase in treasury stock of prefered stock which is negative adjustment to total paid-in capital and retained earnings.
A payment of cash dividend dividend does any affect shareholders' equity since the retained earnings would have been debited at declaration date and dividend payable credited.
A textbook publisher produces a textbook for $25 per book and sells a lot of 160 to the Campus Bookstore for $50 per unit. The bookstore sells the textbook new for $75 and used for $60. This edition of the book is used for 2 years (4 semesters). The bookstore sells all textbooks that it has at the beginning each semester, and it repurchases 50% of those at the end of each semester for $30. What is the net profit for the publisher (sales - costs) over the life of this 160-unit lot of textbooks
Answers
Answer:
$4,000
Explanation:
The net profit of the publisher over the useful life of the 160-unit lot of textbooks is the difference between his selling price to the bookstore and the cost incurred multiplied by the number of unit.
Hence the net profit of the publisher
= 160( $50 - $25)
= 160 * $25
= $4,000
Final answer:
The net profit for the publisher is $4,000.
Explanation:
To calculate the net profit for the publisher over the life of a 160-unit lot of textbooks, we first determine the revenue generated from selling these books to the Campus Bookstore and then subtract the costs incurred in producing them. The publisher sells each textbook for $50 and incurs a production cost of $25 per textbook.
The total revenue from selling 160 textbooks to the Campus Bookstore is 160 books × $50/book = $8,000.
The total cost of producing these textbooks is 160 books × $25/book = $4,000.
Therefore, the net profit for the publisher over the life of this 160-unit lot of textbooks is $8,000 - $4,000 = $4,000.
A granary allocates the cost of unprocessed wheat to the production of feed, flour, and starch. For the current period, unprocessed wheat was purchased for $310,000, and the following quantities of product and sales revenues were produced. Product Pounds Price per Pound Feed 150,000 $ 1.40 Flour 55,000 2.70 Starch 25,000 6.00 How much of the $310,000 cost should be allocated to feed if the value basis is used
Answers
Answer:
$98,973.77
Explanation:
The computation of the amount allocated to feed while using the value basis is shown below:
But before that first we have to find out the total cost which is
Feed (100,000 × $1.40) = $140,000
Flour (55,000 × $2.70) = 148,500
Starch (25,000 × 6) = 150,000
Total 438,500
Now the allocated value is
= 140,000 ÷ 438,500 × $310,000
= $98,973.77
We simply do the above calculations
Final answer:
Approximately $127,842.63 of the $310,000 cost of unprocessed wheat should be allocated to feed based on the value basis using the proportion of feed's revenue in relation to total revenue.
Explanation:
The question asks how much of the $310,000 cost of unprocessed wheat should be allocated to the production of feed on a value basis. To answer this, we must calculate the total revenue for each product and then find the proportion of total revenue that comes from feed. Multiplying this proportion by the total cost of the wheat gives us the allocation for feed.
The total revenue for feed is 150,000 pounds × $1.40 per pound, which equals $210,000. For flour, it is 55,000 pounds × $2.70 per pound, equaling $148,500, and for starch, it is 25,000 pounds × $6.00 per pound, totaling $150,000. The combined revenue for all products is $210,000 + $148,500 + $150,000 = $508,500. The feed's proportion of the total revenue is $210,000 / $508,500. To get the allocation for feed, multiply this proportion by the total cost of the wheat ($310,000), which gives us approximately $127,842.63.
Therefore, $127,842.63 of the $310,000 cost should be allocated to the production of feed.
Ollie Company experienced the following events during its first-year operations: 1. Acquired $72,000 cash from the issue of common stock. 2. Borrowed $26,000 from the First City Bank. 3. Earned $59,000 of cash revenue. 4. Incurred $43,000 of cash expenses. 5. Paid a $7,000 cash dividend. 6. Paid $43,000 to purchase land. Required: Prepare a statement of changes in stockholders' equity.
Answers
Answer and Explanation:
The preparation of the statement of changes in stockholders' equity is presented below:
Ollie Company
Statement of changes in stockholders' equity
Beginning common stock $0
Add: Common stock issuance $72,000
Ending common stock $72,000
Beginning retained earning $0
Add: Net income $16,000 ($59,000 - $43,000)
Less: cash Dividend paid -$7,000
Ending retained earning $9,000
Total stockholder equity $81,000 ($72,000 + $9,000)
The ending total stockholders' equity for Ollie Company in its first-year operations would be $81,000. This is after considering the money gained from issuing common stock, net income, and cash dividend paid.
Explanation:The statement of changes in stockholders' equity for Ollie Company for its first-year operations would include the following:
The company acquired $72,000 cash from the issue of common stock. The common stock amount should increase by $72,000.The company did not issue any additional stock nor did it repurchase any stock, hence other factors affecting the common stock remain the same.The company borrowed $26,000. This transaction affects liabilities, not the stockholder's equity. Thus, this event won't be reflected on the statement of changes in stockholders' equity.The company earned $59,000 of cash revenue and incurred $43,000 of cash expenses. The difference becomes net income of $16,000. This amount is added to beginning retained earnings.The company paid a $7,000 cash dividend, which reduces retained earnings by $7,000.So the ending total stockholders' equity for Ollie Company would be the sum total of $72,000 (from issuing common stock), $16,000 (net income), and -$7,000 (cash dividend), which sums to a total of $81,000.
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Question 3: Sam’s Retails has the following data available as of 30 June 2019. Required: From the data, establish an income statement and a balance sheet
Sam’s Retails Data as of 30 June 2019
Sales
Administration expense Shop Lease
Cash at Bank
Costs of Good Sold Wages and salaries Accounts payables Miscellaneous Expense Land and buildings
542,000 1,500 24,000 175,000 274,000 38,500 15,050 2,500 127,000
Supplies expenses
Prepaid by a client for the company service Prepaid Insurance
Vehicles
Mortgage
Supplies
Account receivables
600 15,000 3,000 34,000 320,000 45,000 102,000
Note: Company income tax 30%, during the accounting period. The company has paid 2.5% of interest on the mortgage. Profit is retained for further investment
Answers
Answer:
Please refer explanation and attachment
Explanation:
The income statement has been provided in attachment 1 and balance sheet in attachment 2. Unfortunately, due to lack of information such as depreciation, lease details and mortgage payments, the balance could not be tallied. However, all information provided has been used to derive the results shown.