Answer:
We can represent the entry of new firms into a monopolistically competitive market by shifting the existing firms' cost curves upward. - d)
The entry of new firms into a monopolistically competitive market by shifting the existing firms’ d) cost curves upward.
What is monopolistically competitive market?Monopolistic competition is a type of market structure where many companies are present in an industry, and they produce similar but differentiated products.
None of the companies enjoy a monopoly, and each company operates independently without regard to the actions of other companies.
What are the characteristics of a monopolistically competitive market?Four characteristics of a monopolistically competitive industry are:
Many sellers. There are many sellers in this industry.Easy entrance. Firms in monopolistic competition are small.Differentiated products. Firms in this industry sell differentiated products.Local Advertising.To learn more about monopolistically competitive market, refer
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From the ledger balances given below, prepare a trial balance for the Metlock, Inc. at June 30, 2019. All account balances are normal.
Accounts Payable $8,700, Cash $6,400, Common Stock $21,200, Dividends $2,500, Equipment $16,500, Service Revenue $7,700, Accounts Receivable $4,700, Salaries and Wages Expense $4,800, and Rent Expense $2,700.
Answer:
[tex]\left[\begin{array}{ccc}Account&DEBIT&CREDIT\\Cash&6,400&-\\Account\: Receivable&4,700&-\\Equipment&16,500&-\\Account \: Payble&-&8,700\\Common \: Stock&-&21,200\\Dividends&2,500&-\\Serice \: Revenue&-&7,700\\S/W \: expense&4,800&-\\Rent \: expense&2,700&-\\Total&37,600&3,7600\\\end{array}\right][/tex]
Explanation:
Cash assets --> debit balance
AR assets --> debit balance
equipment assets --> debit balance
Account payable liability --> credit balance
CS equity --> credit balance
dvidends --> debit balance
revenue --> credit balance
expenses --> debit balance
You are the manager of the packaging department in a cookie factory. (Obviously, the packaging employees cannot eat the cookies that are transferred in during the period.) After your employees insert cookies into colorful packages (step 1) for display on store shelves, the packages of cookies are then boxed using cardboard cartons (step 2) for shipment to stores. Each unit of product is represented by a carton of packaged cookies. The packaging department began the period with 1,000 units of cookies. During the period, 5,000 units of cookies were transferred in from the baking department and 5,500 units of cookies were transferred out to the finished goods department. The number of units of cookies in the ending inventory of the packaging department equals:
Explanation:
Cookies are transferred to the colorful packaging to be displayed on the shelves of the stores. These packaged cookies are transferred in the carton to be delivered at the stores.
Now the data given in this question is as follows:
Staring Units of cookies in the packaging department = 1000 units
New units of cookies transferred in from the baking department to the packaging department = 5000 units.
Now total units that packaging department have = 1000 + 5000 = 6000 units of cookies.
Total unit of cookies transferred out to the finished goods department = 5500 units of cookies.
So the number of units of cookies in the ending inventory of the packing department will be the total units in the packaging department less the total units transferred out to the finished goods department, i-e
6000 - 5500 = 500 units of cookies remaining in the packaging department.
A marketing specialist needed to find a new way of marketing the company's main product to its potential clients. While watching a movie one evening, the marketing specialist saw a scene that gave her inspiration for a new marketing plan. According to the creative process model, which of the following is the next stage in the creative process after such an inspiration?
a. preparation
b. incubation
c. verification
d. insight
e. morphological analysis
Answer:
The correct answer is c) verification
Explanation:
This creative process model is a situation where a person starts the process of transforming his or her ideas or thoughts in to an actual product.
There are many steps in the process of creative process model, first one being the preparation where a person first identifies the problem , set his or her targets or goals.
After preparation comes the step of incubation where a person starts researching on the ideas, person will do brainstorming , he or she will continuously try to find out the solution.
After incubation comes the step of illumination , where a person gets an epiphany ( just like in this question marketing specialist gets) about how to structure together his or her plan.
And finally after illumination step comes the step of verification , where a person(marketing specialist in this case) evaluates whether the plan he has made is worth continuing and investing time in, he would changes to his plan if necessary.
the answer is d. insight
Because through insight, someone will get an idea of what he knows beforehand. Therefore, a marketing specialist must have extensive insight in order to be able to provide interesting ideas for future business development.
Further Explanation
Growing a business is like traveling. So that the trip was not felt, we just enjoy the process of the trip to get to the destination.
Development Stage
At this stage, you just find ideas and initial business concepts. To be able to mature this stage, every businessman must at least conceptualize a business that can answer the following questions:
Does this idea/concept answer the problems and needs in the market? Will this idea/concept be accepted in the market? What is the business structure needed to support this idea/concept? Will this idea/concept benefit me?The point is to make sure that the ideas/concepts that you have thought of are really needed by the market, are able to be realized by you, and also have a clear monetization (ability to make a profit).
Start-up Stage
At this stage, business is in a critical period. All kinds of stress, anxiety, and uncertainty come together at this stage.
At this stage, you are usually still in the "groping" period and are still trying to validate your ideas/concepts. Not infrequently the cost will be far greater than the budget. Broadly speaking, challenges in this stage include:
Proving that our ideas/concepts can really bring us to profit Fund Raising or seeking funding Recruit staff and fill the role vacancy in the organization Manage sales expectations and manage cash reserves Build markets, brands, and customer bases
Growth Stage
Challenges that business people usually have at this stage include:
How to "welcome" revenue and customers who are always growing Manage company operations to be effective and efficient How to win market competition How to increase profit volume
Expansion Stage
Some challenges in this stage include:
Increased competition in the market Thinking about how to acquire competitors How to achieve vertical integration from the production side
Maturity Stage
At this stage, business is "mature" so that all kinds of forms of growth that were sensational at the growth stage and expansion stage no longer exist. At the maturity stage, business growth tends to be slow but full of stability.
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Grade: College
Subject: Business
Keywords: insight, growth, business
Difference between a will and a living trust
Answer:
A will gets into effect after a person dies. trust gets into effect as soon as it is created. The will covers all the property under the individual's name. Trust covers property which has been transferred in the name of the trust.
Explanation:
A will directs who will receive his property after an individual's death. It also appoints a representative to carry out the wishes of the deceased. A trust on the other hand can divide the property before, after or at death.
A will is a document through which a person expresses his wishes about how his property is to be distributed, it can also contain details regarding funeral.
A trust is an arrangement through which property of an individual is held by other individuals or institution.
Jim is beginning his research on franchise businesses in order to find one that meets his needs. A quick, easy way to get general information is to
A. ask a local franchise owner. B. check the Yellow Pages. C. look up Internet sites. D. call the corporate headquarters 17.
Answer:
Jim is beginning his research on franchise businesses in order to find one that meets his needs. A quick, easy way to get general information is to look up Internet sites - C.
Answer:
The correct answer is letter "C": look up Internet sites.
Explanation:
The internet offers diverse information about different topics at an incredibly fast speed. In recent years, many web pages allow random users to rate or give comments on certain topics, individuals or institutions so others can have a general idea of what they could deal with.
In that case, if Jim is looking for franchise businesses, it is not a bad idea to made research on the internet but he will need to dive into some of the information he finds to obtain a consistent idea of them.
You are considering a 10-year, $1,000 par value bond. Its coupon rate is 8%, and interest is paid semiannually. If you require an “effective” annual interest rate (not a nominal rate) of 7.1225%, how much should you be willing to pay for the bond?
To calculate how much you should pay for a bond, you should calculate the present value of the bond's cash flows, including semiannual coupon payments and the face value payment at the end of the bond's term, using your desired rate of return as your discounting factor.
Explanation:Firstly, we need to understand the components of a bond. A bond is essentially an IOU note that a capital provider buys, and then at the maturity date, that amount (also known as the face value of the bond) is repaid to the investor along with the final interest repayment. The bond has a coupon rate or interest rate which is generally paid semiannually.
In order to calculate the amount one should be willing to pay for the bond given an effective annual rate, we need to calculate the present value (PV) of the bond. PV is based on the principle that a dollar you have now is worth more than the promise or expectation that you will receive a dollar in the future. In simpler terms, money you have now could be invested in a way that will earn interest and grow over time, therefore the same amount of money promised or expected in the future is worth less to you today.
The bond pays semiannual coupons, which means you receive interest twice a year and it has a 10-year period, so it equals to 20 periods. The coupon payment per period will be $1,000 * 8% / 2 = $40. At the end of the 10th year, you will receive the last coupon payment (40) plus the face value of the bond (1000).
We discount these cash flows back to present with the desired annual rate of return. Since cash flows are semiannually, we would use half the rate. We then add together these PVs to get the PV of the bond, which is the amount you should be willing to pay for this bond.
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Analysis reveals that a company had a net increase in cash of $21,650 for the current year. Net cash provided by operating activities was $19,500; net cash used in investing activities was $10,750 and net cash provided by financing activities was $12,900. If the year-end cash balance is $26,250, the beginning cash balance was _______.
Answer:
the beginning cash balance was $4,600
Explanation:
Beginning Cash Flow + net increase in cash of for the current year =
Equals year-end cash balance
We put the know values:
beginning + $21,650 = $26,250
and now solve for the beginning cash balance:
beginning = $26,250 - $21,650 = $4,600
Resuming:
Always keep in mind the idea that account or balance have the following reasoning:
there is a begining balance
there are transaction or event that modifies them
and creaste a new or ending balance
beginning + increase - decrease = ending
you start the day with 4 apples (begining balance)
you end up with 7 apples (ending balance)
the change would be 3
beginning 4 + X = ending 7
The beginning cash balance was $4,600, calculated by subtracting the net cash movements from the year-end cash balance.
Explanation:To calculate the beginning cash balance of the company, we need to consider the net change in cash throughout the year in conjunction with the year-end cash balance. The net increase in cash for the year was $21,650, which gives us a starting formula: Beginning Cash Balance + Net Cash Provided by Operating Activities - Net Cash Used in Investing Activities + Net Cash Provided by Financing Activities = Year-End Cash Balance.
We can plug the provided numbers into this formula:
Net Cash Provided by Operating Activities: $19,500Net Cash Used in Investing Activities: -$10,750 (note the negative because this is cash used, not provided)Net Cash Provided by Financing Activities: $12,900Year-End Cash Balance: $26,250Using these figures, the formula transforms to:
Beginning Cash Balance + $19,500 - $10,750 + $12,900 = $26,250
Therefore:
Beginning Cash Balance = $26,250 - ($19,500 - $10,750 + $12,900)
Beginning Cash Balance = $4,600
The beginning cash balance was $4,600.
Cabell Products is a division of a major corporation. Last year the division had total sales of $25,540,000, net operating income of $1,277,000, and average operating assets of $7,151,200. The company's minimum required rate of return is 16%. The division's return on investment (ROI) is closest to:
Answer:
The divisions return on investment would be close to 17.86%
Explanation:
Return on investment is a very useful financial ratio which is used to take out how much of the benefit or profit , an investor would get in relation to the investment made by them.
FORMULA FOR CALCULATING RETURN ON INVESTMENT =
\frac{NET \: OPERATING \: INCOME}{TOTAL \: OPERATING \: ASSETS}
given - operating income = $1277,000
total operating assets = $7151,200
= \frac{\$ 1,277,000}{\$ 7,151,200} \times 100
= 17.857%
= 17.86% ( APPROXIMATELY )
What is joint tenancy?
Answer:
Explanation:
Joint tenancy is a lawful course of action in which at least two individuals possess a property together, each with equivalent rights and commitments. When one of the proprietors in a joint tenure dies, that proprietor's interest in the property goes to the survivors without the property experiencing the courts.
Robinson Company purchased Franklin Company at a price of $3,830,000. The fair market value of the net assets purchased equals $2,790,000. 1. What is the amount of goodwill that Robinson records at the purchase date? 2. Does Robinson amortize goodwill at year-end? 3. Robinson believes that its employees provide superior customer service, and through their efforts, Robinson believes it has created $1,420,000 of goodwill. Should Robinson Company record this goodwill?
Answer:
Goodwill 1,040,000
2.- It will need to be amortized at year-end
3.- Goodwill can only be created through third parties operations, Robinson cannot increase his own goodwill. A third party must be willing to pay that amount
Explanation:
3,830,000 - 2,790,000 = difference 1,040,000
If the real wage falls the:a. marginal cost of labor falls.b. firm will hire additional labor.c. marginal benefit of the worker decreases.d. All of the above.e. A and B only.
Answer: The correct answer is "D. All of the above".
Explanation:
Marginal cost of labor: It is the additional cost of hiring an additional worker. Normally the workers' salary is the same, so the marginal cost of labor will always be the same.
The correct answer is "D" because if the real wage falls, the cost of hiring a worker for the company is lower, therefore companies will hire additional workers.
And if workers' wages decrease, their marginal benefit also decreases because they will have less income.
At the beginning of the accounting period, Nutrition Incorporated estimated that total fixed overhead cost would be $50,600 and that sales volume would be 10,000 units. At the end of the accounting period actual fixed overhead cost amounted to $56,100 and actual sales volume was 11,000 units. Nutrition uses a predetermined overhead rate and a cost plus pricing model to establish its sales price. Based on this information the predetermined overhead rate is
Answer:
$ 5.06 per unit
Explanation:
Given data:
Estimated fixed overhead cost = $ 50600
Estimated sales volume = 10000 units
Actual fixed overhead cost = $ 56100
Actual sales volume = 11000 units
Now,
the predetermined overhead rate is given as:
Predetermined overhead rate = (Estimated Fixed Overhead Cost) / (Number of estimated sales Volume)
on substituting the values in the above formula, we get
Predetermined overhead rate = $ 50600 / 10000
or
Predetermined overhead rate = $ 5.06 per unit
A firm has fixed costs (FC) of $10,000. Its variable costs (VC) to produce 5,000 widgets are $2,000 and to produce 10,000 widgets are $3,000. What is the firm's total cost (TC) to produce 5,000 widgets?
Answer:
The firm's total cost (TC) to produce 5,000 widgets is $12,000.
Explanation:
Total Cost : It is the sum of Fixed cost and Variable cost
where,
Variable cost is the cost which is change when production level changes. while, fixed cost is the cost which is fixed whether production level change or not.
The following information is given in the question:
1. Fixed cost = $10,000
2. Variable cost for 5,000 widgets = $2,000
3. Variable cost for 10,000 widgets = $3,000
The formula for calculating Total Cost to produce 5,000 widgets is shown below:
Total cost = Fixed cost + Variable cost
= $10,000 + $2,0000
= $12,000
Since, the question is asking for only $5,000 widgets and in the given question, the variable cost is given for $5,000 widgets is $2,000 . So, this variable cost is used and for the fixed cost the amount will be same.
Thus, The firm's total cost (TC) to produce 5,000 widgets is $12,000.
Consider the following data from a company annual report: which of the following is inventory turnover? Sales: $1,200,000 Cost of Goods Sold: $60,000 Raw Materials Inventory: $80,000 Finished Goods Inventory: $20,000 Work-in-Process: $20,000
Answer:
The inventory turnover is 0.5
Explanation:
Inventory turnover ratio or stock turnover ratio is ratio which tells about how much of inventory company has sold and how much of it is left. This ratio helps management in making right decisions regarding pricing and marketing strategy, manufacturing etc.
FORMULA FOR CALCULATING INVENTORY TURNOVER RATIO =
[tex]\frac{COST OF GOODS SOLD}{AVERAGE INVENTORY}[/tex]
Here we will take cost of goods sold not sales because by taking cost of goods sold we will get better accuracy , as sales will include a mark up over cost.
Average inventory will include raw material inventory, finished goods and work in progress
[tex]\frac{\$60000}{\$80000+\$20000+\$20000}= .5[/tex]
Therefore the average turnover ratio is 0.5
Use the following information to calculate the change in the company's cash balance for the year. Credit Sales $800,000 Cash Sales $500,000 Operating Expenses on Credit $200,000 Cash Operating Expenses $700,000 Accounts Receivable (Beg. of Year) $50,000 Accounts Receivable (End of Year) $80,000 Accounts Payable (Beg. of Year) $50,000 Accounts Payable (End of Year) $100,000 Income Taxes Paid $160,000
Answer:
Cash generated from operating activities 460,000
Explanation:
Cash Sales 500,000
Credit sales collection
beginning AR 50,000
+ 800,000 credit sales
- ending AR 80,000 = 770,000
payment to providers
Accounts Payable beginning 50,000
+ Operating expenses credit 700,000
- Accounts Payable ending 100,000= (650,000)
taxes paid (160,000)
Cash generated from operating activities 460,000
On January 1, 2018, Magnus Corporation had 60,000 shares of $1 par value common stock issued and outstanding. During the year, the following transactions occurred: Mar. 1 Issued 35,000 shares of common stock for $550,000. June 1 Declared a cash dividend of $2.00 per share to stockholders of record on June 15. July 30 Paid the $2.00 cash dividend. Dec. 1 Purchased 5,000 shares of common stock for the treasury for $22 per share. Dec. 15 Declared a cash dividend on outstanding shares of $2.20 per share to stockholders of record on December 31.
Prepare journal entries to record the above transactions.
Answer:
(A) March 1st
cash debit 550,000
common stock credit 35,000
additional paid-in credit 515,000
(B) June 1
dividends debit 180,000
dividends payable credit 180,000
(C) June 15
dividends payable debit 180,000
cash credit 180,000
(D) Dec 1
Treasury Stock debit 110,000
Cash credit 110,000
(E) Dec 15
dividends debit 187,000
dividends payable credit 187,000
Explanation:
(A)
[tex]issued - par\: value = additional\: paid-in[/tex]
[tex]issued - (common\: stock\: issued * face\: value\: per\: share) = additional\: paid-in[/tex]
[tex]550,000 - (35,000 \times 1) = 515,000[/tex]
(B)
[tex]60,000 \: beginning + 30,000 \: issued = 90,000 \: shares \: outstanding[/tex]
[tex]shares \: outstanding \times dividends \: per \: share = dividends \: payable[/tex]
[tex]90,000 \times 2 = 180,000[/tex]
(C)
payment of (B)
(D)
[tex]shares \: purchased \times share \: price = treasury \: stock \\ 5,000 \times 22 = 110,000[/tex]
(E)
[tex]60,000\: beginning + 30,000\: issued - 5,000\: treasury\: stock = 85,000\: shares\: outstanding[/tex]
[tex]85,000 \times 2.20 = 187,000[/tex]
The answer provides the journal entries for the accounting transactions of Magnus Corporation during 2018. These transactions involve stock issuance, dividends declaration and payment, and treasury stock purchases.
Explanation:To answer your question, let's record each transaction as journal entries:
For the Mar. 1 transaction: Cash (Dr.) $550,000, Common Stock (Cr.) $35,000, and Paid-in Capital in Excess of Par (Cr.) $515,000. For the June 1 transaction: Dividends Declared (Dr.) $190,000 and Dividends Payable (Cr.) $190,000. For the July 30 transaction: Dividends Payable (Dr.) $190,000 and Cash (Cr.) $190,000. For the Dec. 1 transaction: Treasury Stock (Dr.) $110,000 and Cash (Cr.) $110,000. For the Dec. 15 transaction: Dividends Declared (Dr.) $191,000, and Dividends Payable (Cr.) $191,000.
The journal entries for the transactions of Magnus Corporation demonstrate the recording of stock issuance, dividends declaration and payment, and treasury stock purchase in accounting.
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Transactions for Buyer and Seller Shore Co. sold merchandise to Blue Star Co. on account, $110,500, terms FOB shipping point, 2/10, n/30. The cost of the goods sold is $66,300. Shore paid freight of $1,900. Journalize Shore Co.'s entry for the sale, purchase, and payment of amount due.
Answer:
account receivable debit 110,500
sales revenue credit 110,500
freight-out debit 1,900
cash credit 1,900
COGS debit 66,300
inventory credit 66,300
Explanation:
the sales will be recorded as nominal, because there is no information about the customer taking the discount or paying within this period.
Because term are FOB shipping point, the freight corespond to shore Co
Shimada Products Corporation of Japan is anxious to enter the electronic calculator market. Management believes that in order to be competitive in world markets, the price of the electronic calculator that the company is developing cannot exceed $67. Shimada’s required rate of return is 28% on all investments. An investment of $3,100,000 would be required to purchase the equipment needed to produce the 42,000 calculators that management believes can be sold each year at the $67 price. Required: Compute the target cost of one calculator
To compute the target cost of the electronic calculator for Shimada Products Corporation, the total investment must be adjusted for the desired rate of return and then divided by the number of units expected to sell. The initial calculation shows that the target cost per calculator ($94.48) exceeds the desired selling price of $67, indicating that adjustments are necessary for Shimada to be competitive.
Explanation:The student is asking to compute the target cost of a calculator that Shimada Products Corporation is planning to develop. To determine this, we need to consider the total investment, the required rate of return, and the number of units Shimada expects to sell annually. We initiall subtract the total expected return on the investment from the total investment to find out the total allowable cost for all calculators. Then we divide this allowable cost by the number of units to get the target cost per calculator which cannot exceed the set selling price to stay competitive.
Determine the total return on investment by multiplying the initial investment by the required rate of return ($3,100,000 x 0.28 = $868,000).Add this annual return to the initial investment to determine the total amount that needs to be recovered each year ($3,100,000 + $868,000 = $3,968,000).Calculate the target cost per calculator by dividing this amount by the number of calculators expected to be sold each year ($3,968,000 ÷ 42,000 ≈ $94.48).Since the target cost exceeds the desired selling price of $67, Shimada will need to reduce costs or reconsider its price or investment to meet the target cost within the competitive range.4. A manufacturer of microwaves has discovered that male shoppers, on average, have lower values for microwave ovens than female shoppers. Additionally, male shoppers attribute almost no extra value to an auto-defrost feature, while female shoppers, on average, value the auto-defrost feature. There is little additional cost to incorporating an auto-defrost feature. The manufacturer is considering introducing two different models. The manufacturer has determined that men value a simple microwave at $70 and one with auto-defrost at $80, while women value a simple microwave at $80 and one with auto-defrost at $150. If there is an equal number of men and women, what pricing strategy will yield the greatest revenue? What if women comprise the bulk of microwave shoppers?
Final answer:
The price increase of refrigerators by only $50 despite $100 external costs is due to consumer surplus.
Explanation:
The increase in the market price of refrigerators by only $50, even though the external costs of pollution were $100, can be attributed to the concept of consumer surplus. Consumer surplus refers to the difference between what consumers are willing to pay for a product and the actual price they pay. In this case, even though the external costs pushed up the production cost, the market price increased by a lesser amount due to the willingness of consumers to pay higher prices for refrigerators.
Stazia Inc is a software company that intends to collaborate with Softron Inc, another multinational company. Steve, the chief executive officer of Stazia, decides to discuss the company's objectives with Jared, the chief executive officer of Softron. Steve seeks to obtain information about the services Softron offers and the quality process it follows. Steve intends to gather maximum information from this discussion including nonverbal cues. In this scenario, which of the following channels of communication should Steve use? A) An email message B) A telephone conversation C) A face-to-face meeting D) A voice mail
Answer: option C
Explanation: A face to face interaction between the concerned parties will be the best alternative in this case as Steve wants to have maximum information and also non verbal clues. In Email message and voice mail there might be a lack of information as the transmission and transfer of messages will be slow and also there will be no nonverbal clues. In case of telephone conversation the information transmission will be fast but the problem regarding non verbal clues will still be there, hence, face to face conversation is the best alternative.
The correct answer is C. A face-to-face meeting
Explanation:
A face-to-face meeting is one of the most common communication forms used in business, this implies participants meet in the same space and at the same time and therefore interaction occurs directly. This type of interaction is more beneficial than email messages, telephone conversation or voice mails in terms of understanding both the verbal and non-verbal information.
Indeed, only in a face-to-face meeting, you can see the gestures, movements, and position of the other person which often reveals more than his/her words. Due to this, Steve should use a face-to-face meeting because this channel would allow him to gather more information than other channels as it is the only one that would allow him to understand nonverbal cues.
C Co. reported a retained earnings balance of $320,000 at December 31, 2017. In September 2018, C determined that insurance premiums of $69,000 for the three-year period beginning January 1, 2017, had been paid and fully expensed in 2017. C has a 35% income tax rate. What amount should C report as adjusted beginning retained earnings in its 2018 statement of retained earnings?
Answer:
C should report $349,900 as the adjusted beginning retained earnings in its 2018 statement of retained earnings.
Explanation:
We are given the retained earnings for 2017 as $320,000, and in September of 2018 C realized that the insurance premium of $69,000 which had been paid on 1 January , 2017 was for 3 years , which means 2/3 of $69,000 was not for the year 2017 and it is now prepaid .
Amount prepaid = 2/3 x $69,000
= $46,000
But it is given that the income tax rate is 35% , so of $46,000 C will adjust or add only 65% of 46,000 in he earnings because 35% would be deducted,
= $46,000 - $46,000 x 35%
= $46,000 - $16,100
= $29,900
So we will add this amount with the $320,000,
therefore adjusted beginning retained earnings would be $349,900.
Bunny Bread Company manufactures different types of bread and accounts for its production using an ABC costing system. It has a 5,000-square-foot factory space that it rents for $2,500 a month for all its manufacturing activities. Bunny Bread has identified its activities as follows: preparation and setup, kneading, baking, packaging, and quality control. Two thousand five hundred (2,500) square feet of the factory are used for kneading, while 750 square feet (each) are used for preparation and setup and quality control. Baking and packaging use 500 square feet each. When assigning indirect costs to each activity, how much factory rent should be assigned to the preparation and setup cost pool?
Answer:
Area occupied by Preparation and setup cost = $375
Explanation:
Under activity based costing, cost is allocated based on each level of activity.
Provided monthly rent = $2,500 for 5,000 square feet.
Rate per square feet = $2,500/5,000 = $0.5 per square feet
Area occupied by Preparation and setup cost = $0.5 X area taken 750 square feet = $375
As this was provided in the information, given in question.
Area occupied by Preparation and setup cost = $375
T/F: The theory of purchasing-power parity states that a unit of a country's currency should be able to buy the same quantity of goods in foreign countries as it does domestically.
Answer: The statement is TRUE.
Explanation: The theory of purchasing-power parity is an economic theory that tries to calculate the exchange rate between the currencies of two countries necessary so that the same basket of goods and services can be purchased in the currency of each one, that is, so that the purchasing power (or purchasing power) ) of both currencies is equivalent.
A stock is expected to pay a dividend of $3.00 at the end of the year (i.e., D1 = $3.00), and it should continue to grow at a constant rate of 10% a year. If its required return is 14%, what is the stock's expected price 5 years from today? Do not round intermediate calculations. Round your answer to the nearest cent.
Answer:
$120.79
Explanation:
Using dividend growth model, we have
P0 = [tex]\frac{D1}{Ke - g}[/tex]
P0 = Current market price
D1 = Dividend at the end of year 1
Ke = Required rate of return
g = growth rate
Now in the given case, Ke is constant @ 14%
g is also constant @ 10%
For price at the end of 5 years = P5
We need to calculate D6
D6 = (((((D1 +g) + g) + g) + g) + g)
= (((((3 +10%) +10%) + 10%) +10%) +10%)
= 4.83153
Therefore Expected price at the end of 5 years = [tex]\frac{4.83153}{0.14-0.10}[/tex]
= $120.79
Georgette was making $4,000 per month, but her work cut her hours, so she is now making $2,500 per month. What do you expect to happen to Georgette’s demand curve for powdered cheese (an inferior good) as a result of this income change?
Answer:
The demand curve of an inferior good increase when the income decrease.
Explanation:
Georgette will decrease their demand for normal goods and move towards inferior goods. So the powdered cheese among other inferior goods demand will increase for her.
Inferior goods have a negative income elasticity, which means their demand drop when income rises and increases when income drops.
If she takes another job or receives her hours back, Georgette will be more willing to spend on more costly substitutes. Decreasing their demand for inferior goods.
A firm that is first to the market with a new product frequently discovers that there are design flaws or problems with the product that were not anticipated. For example, the ballpoint pens made by the Reynolds International Pen Company often leaked. What effect do these problems have on the innovating firm, and how do these unexpected problems open up possibilities for other firms to enter the market?
Answer: The sales and image of the innovating firm might decline in the market.
Explanation: As only the innovating firm will have the option to sell the product in the market, customers will judge the whole firm on the basis of that product, the overall research done by the innovating firm will result in loss of money and time. On the other hand other firms can use the research done by the innovating firm and can analyze the problem that sustains in the model and just by correcting the flaws detected they will be able to capture a substantial amount of market share in a very small span of time.
The fire chief of a medium-sized city has estimated that the initial cost of a new fire station will be $4 million. Annual upkeep costs are estimated at $300,000. Benefits to citizens of $550,000 per year and disbenefits of $90,000 per year have also been identified. Use a discount rate of 4% per year to determine if the station is economically justified by the conventional B/C ratio.
Answer: So B/C ratio = PW(B)/PW(C) = [tex]\frac{11500000}{11500000}[/tex]= 1
So economically there is no befit and no loss of new fire station.
Explanation:
Net annual benefit B = Benefit-Disbenefit = 550000-90000 = 460000
I = 4000000
O&M(Annual keep up cost) = 300000
i = 0.04
As n is not given so assuming this project to be perceptual.
P.V of perpetuity = [tex]\frac{A}{i}[/tex]
Now;
PW(B)=tex]\frac{460000}{0.04}[/tex] = $11500000
PW (C) = I +PW[tex]\times[/tex](O&M) = [tex]4000000+\frac{300000}{0.04}[/tex] = $11500000
So B/C ratio =[tex]\frac{PW(B)}{PW(C)}[/tex]=[tex]\frac{11500000}{11500000}[/tex] = 1
So economically there is no befit and no loss of new fire station.
The following selected information is from Princeton Company’s comparative balance sheets. At December 31 2017 2016 Common stock, $10 par value $ 120,000 $ 110,000 Paid-in capital in excess of par 577,000 347,000 Retained earnings 323,500 297,500 The company’s net income for the year ended December 31, 2017, was $53,000. 1. Complete the T-accounts to calculate the cash received from the sale of its common stock during 2017.
Answer:
cash 240,000 debit
common stock 10,000 credit
additional paid-in 230,000 credit
Explanation:
Common stock 2017 - Common stock 2016 = Δ2017
additional paid-in 2017 - additional paid-in 2016 = Δ2017
120,000 - 110,000 = 10,000
577,000 - 347,000 = 230,000
Total increase 240,000
The cash received from the sale of common stock during 2017 is calculated by the increase in common stock ($10,000) and the increase in paid-in capital in excess of par ($230,000), totaling $240,000.
To calculate the cash received from the sale of common stock during 2017, we need to analyze the changes in the common stock account. The comparison of the common stock values between 2016 and 2017 shows an increase from $110,000 to $120,000, which means the company issued more stock. However, the paid-in capital in excess of par also increased from $347,000 to $577,000. We can calculate the total cash received by summing the increase in common stock and the increase in paid-in capital in excess of par.
The increase in common stock is $120,000 - $110,000 = $10,000.
The increase in paid-in capital in excess of par is $577,000 - $347,000 = $230,000.
Therefore, the cash received from the sale of common stock is $10,000 + $230,000 = $240,000 in 2017.
Adjusting entries are made to ensure that?-expenses are recognized in the period in which they are incurred.-revenues are recorded in the period in which the performance obligation is satisfied.-All of these choices are correct.-None of the choices are correct.-balance sheet and income statement accounts have correct balances at the end of anaccounting period.e
Answer:
The correct option is all of these choices are correct.
Explanation:
Adjusting Entries: The adjusting entries are those entries which are adjusted at the end of the year.
According to the statements given in the question:
1. Whenever expenses are incurred, it is recognized in the financial statements on that year itself. Moreover, the adjustment entries is also made.
Thus, the given statement is true
2. Under revenue recognition principle, the revenue is recorded when products are supplied and services are rendered to the customers or the performance obligation is completed. Rather than payment is received or not.
Thus, it is a part of adjustment entries
3. If all the correct entries are passed and the income statement and the balance sheet are matched. Or we can say
Assets = Owner's Equity + Liabilities
So, it would be a part of adjusting entries.
When all choices are correct. So, none of the choices are correct option is invalid.
Hence, The correct option is all of these choices are correct.
Adjusting entries ensure expenses and revenues are recorded in their appropriate periods and that financial statement accounts are accurate, which aligns with accrual accounting principles necessary for reliable financial reporting and budgeting.
Explanation:Adjusting entries are made to ensure that expenses are recognized in the period in which they are incurred, revenues are recorded in the period in which the performance obligation is satisfied, and balance sheet and income statement accounts have correct balances at the end of an accounting period.
All of these choices are correct because they are integral to the accrual basis of accounting, which matches income and expenses to the period they pertain to. This is essential for producing accurate financial statements and for effective budgeting, ensuring that a company or individual has adequate funds to cover their expenses.
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Clothing Emporium was organized on January 1, 2018. The firm was authorized to issue 100,000 shares of $5 par value common stock. During 2018, Clothing Emporium had the following transactions relating to shareholders' equity: Issued 30,000 shares of common stock at $7 per share. Issued 20,000 shares of common stock at $8 per share. Reported a net income of $100,000. Paid dividends of $50,000. What is total paid-in capital at the end of 2018? a. $370,000. b. $420,000. c. $320,000. d. $470,000.
Answer:
a. $370,000.
Explanation:
The first would be to define additional paid-in that would be the amount paid over face value if the face value is 100 and the share at issued at 105 then there is a 5$ additional paid-in per share.
With that in noticed we are going to check the transaction during 2018:
30,000 at $7 ($5 face value $2 additional paid in)20,000 at $8 ($5 face value $3 additional paid in)Common stock
we got 50,000 issued with their face of $5 = 250,000
additional paid-in capital would be
30,000 shares at $2 = $60,000
and 20,000 shares at $3 = $60,000
additional paid-in $120,000
The total paid-in would be
250,000 common stock
+ 120,000 additional paid-in
Equal to 370,000