Answer:
B. Available for sale securities
Explanation:
Available for sale securities refer to debt or equity instrument. They are purchased with a pre defined aim of selling them before their maturity, for profit earning. Such profit is usually a 'quick capital gain'. Apart from profit, they also assist for liquidity, repaying needs of companies.
These equities are reported at 'fair value'. This implies that unrealised gains & losses are not included in earnings. They are rather recorded in a specific segregated item head 'accumulated other comprehensive income' of shareholder's equity.
The following transactions were completed by the company.
a. The company completed consulting work for a client and immediately collected $6,000 cash earned.
b. The company completed commission work for a client and sent a bill for $4,500 to be received within 30 days.
c. The company paid an assistant $1,650 cash as wages for the period.
d. The company collected $2,250 cash as a partial payment for the amount owed by the client in transaction b.
e. The company paid $800 cash for this period's cleaning services.
Prepare the impact of each transaction on individual items of accounting equation.
Answer:
a.
Assets : Increase by $6,000
Liabilities : No effect
Equity : Increase by $6,000
b.
Assets : Increase by $4,500
Liabilities : No effect
Equity: Increase by $4,500
c.
Assets : Decrease $1,650
Liabilities : No effect
Equity : Decrease $1,650
d.
Assets : Increase $2,250, Decrease $2,250
Liabilities ; No effect
Equity: No effect
e.
Assets : Decrease $800
Liabilities : No effect
Equity : Decrease $800
Explanation:
a.
Recognize Revenue and Assets of Cash
b.
Recognize Revenue and Assets in Trade Receivable
c.
Recognize an expense and de-recognize the Assets of Cash
d.
Recognize Assets in Cash and de-recognize Assets in Accounts Receivables.
e.
Recognize an Expense and de-recognise the Assets in Cash
On July 2, 2018, Lake Company sold to Sue Black merchandise having a sales price of $9,400 (cost $4,900) with terms of 2/10. n/30. f.o.b. shipping point. Lake estimates that merchandise with a sales value of $800 will be returned. An invoice totaling $140, terms n/30, was received by Black on July 6 from Pacific Delivery Service for the freight cost. Upon receipt of the goods, on July 3, Black notified Lake that $390 of merchandise contained flaws. The same day, Lake issued a credit memo covering the defective merchandise and asked that it be returned at Lake’s expense. Lake estimates the returned items to have a fair value of $130. The freight on the returned merchandise was $30 paid by Lake on July 7. On July 12, the company received a check for the balance due from Black. Collapse question part(a)Prepare journal entries for Lake Company to record all the events noted above assuming sales and receivables are entered at gross selling price.
To record the transactions, Lake Company should make journal entries for the sale, estimate of merchandise returns, invoice for freight, notification of flawed merchandise, credit memo for defective merchandise, return of merchandise, and payment from Black.
Explanation:To record the transactions in the given scenario, the following journal entries should be made:
1. Record the sale:
Accounts Receivable: $9,400
Sales Revenue: $9,400
Cost of Goods Sold: $4,900
Inventory: $4,900
2. Record the estimate of merchandise returns:
Sales Returns and Allowances: $800
Inventory: $800
3. Record the invoice for freight:
Freight-In: $140
Accounts Payable: $140
4. Record the notification of flawed merchandise:
Sales Returns and Allowances: $390
Accounts Receivable: $390
5. Record the credit memo for the defective merchandise:
Accounts Receivable: $130
Inventory: $130
6. Record the return of merchandise:
Inventory: $130
Accounts Payable: $130
7. Record the payment from Black for the balance due:
Accounts Receivable: $8,080
Sales Discounts: $320
Cash: $7,760
These journal entries properly record all the events in the given scenario.
Starcrest Publishing is one of many companies that will take demographic information about your child and publish a story written about that child. The story is already written, and a computer is used to insert the relevant information into the spaces left blank-such as the child's name, his address, his age, his grandparents' name, etc.
Starcrest Publishing uses:
A. just-in-time production.
B. mass customization.
C. individualized production.
D. niche manufacturing.
E. production-to-order.
Starcrest Publishing uses mass customization.
Explanation:
Mass customization is an advertising and marketing strategy that blends the versatility and functionality of personalized goods with low unit costs associated with mass production.
Many product customization titles like made-to-order or built-to-order.
Market customization helps the consumer to customize the aspects of the company while holding prices similar to those of market-produced goods.
For certain instances, the product elements are interchangeable. Such versatility helps the consumer to mix-and-match choices to produce a semi-custom finished product.
Starcrest Publishing uses mass customization by taking standard story templates and inserting personalized details to create unique books for each customer.
The correct option is 'B'.
Starcrest Publishing is employing a production strategy known as mass customization. This is a process where a company uses technology, like a computer system, to produce personalized products for customers on a large scale. The company takes predetermined, standardized story templates and customizes them with individual details such as a child's name, address, and age to create a unique product for each customer.
This approach differs from just-in-time production, which focuses on producing goods to meet demand exactly when needed to reduce inventory costs. It is not strictly individualized production, which would imply a completely unique product created for a single customer.
Nor is it niche manufacturing, which would focus on serving specific segments of the market with specialized products. Lastly, production-to-order is a broader term that mass customization falls under, but it lacks the specificity regarding the customization aspect.
An industry has 1000 competitive firms, each producing 50 tons of output. At the current market price of $10, half of the firms have a short-run supply curve with a slope of 1; the other half each have a short-run supply curve with slope 2. The short-run elasticity of market supply is:A) 1/50
B) 3/10
C) 1/5
D) 2/5
E) none of the above
Final answer:
The short-run elasticity of market supply is calculated based on the given slopes of supply curves and the price increase from $10 to $11. It is found to be a 3% increase in quantity divided by a 10% increase in price, which equals an elasticity of 3/10.
Explanation:
The question involves calculating the short-run elasticity of market supply for a competitive industry. Elasticity measures responsiveness of quantity supplied to a change in price. In this case, we want to determine the elasticity given that half of the firms have a supply curve slope of 1, and the other half have a slope of 2, when the output changes from 50 tons at $10 to an unknown quantity at $11. We use the formula for elasticity, which is the percentage change in quantity supplied divided by the percentage change in price. Since we are given the slopes of supply curves instead of specific quantities, we'll consider hypothetical quantities to calculate the elasticity.
Let's assume an increase in price from $10 to $11, a 10% increase. For firms with a slope of 1, for every $1 increase in price, the quantity increases by 1 ton. For firms with a slope of 2, for every $1 increase, the quantity increases by 2 tons. Since the increase is $1 for both, we can add up the individual increases:
Firms with slope 1: 500 firms x 1 ton = 500 tons
Firms with slope 2: 500 firms x 2 tons = 1000 tons
Total increase in quantity = 1500 tons
The initial total quantity supplied is 50 tons x 1000 firms = 50,000 tons. A 1500 ton increase on 50,000 is a 3% increase. The elasticity of supply is then:
(3% increase in quantity) / (10% increase in price) = 0.3 or 3/10
Suppose the price of one share of a particular stock rose from $9.00 to $9.15 over the course of a year, and the stock paid a dividend of $0.60 per share during the same year. What was the total return on the share of stock
Answer:
8.3%
Explanation:
total return on the share stock=(Increase in share price + dividend paid)/share price at beginning of the year
Total return on the share of stock=((9.15-9)+.6)/9
Total return on the share of stock=8.3%
Shares are a part of company's capital which grows along with the performance of the company .
Here the company's stock gave returns of close to 7.7% over the year with a total return of $0.75 over last 1 year.
The total return can be calculated as 0.75$ (0.15 +0.60) and can be obtained by taking 9$ as base price
9/9.75x100-100=7.7%
Dividend yield of a share is determined by its price (face value) and dividend declared after investing such amount.And the price of a stock thus listed changes as a result of reaction to company's performance w.r.t. sales profits and revenues, etc and other such external factors
It is advisable for retail investors to do their own research before investing in any company and not just look at the past history of the company
The stock of the company gave returns of close to 7.7% after a rise in its price by 0.15 and a dividend of 0.60.
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Assume that a $1,000,000 par value, semiannual coupon US Treasury note with four years to maturity has a coupon rate of 3%. The yield to maturity (YTM) of the bond is 11.00%. Using this information and ignoring the other costs involved, calculate the value of the Treasury note: $634,624.76 $895,940.83 $746,617.36 $470,368.94 Based on your calculations and understanding of semiannual coupon bonds, complete the following statement: The T-note described in this problem is selling at a .
Answer:
$746,617.36
Explanation:
Using a financial calculator, input the following to calculate the price of the US Treasury note. I'm using Texas Instruments BA II Plus model;
Face value of the bond ; FV = 1,000,000
Semiannual coupon payment; PMT = Coupon rate * Face value ;
PMT= (3%/2) *1,000,000 = 15,000
Time to maturity of the note ; N = 4*2 = 8
Semiannual interest rate; I/Y = 11% /2 = 5.5%
then compute the Present value of bond or price; CPT PV = $746,617.36
The value of the $1,000,000 semiannual coupon US Treasury note with a coupon rate of 3% is (A) $634,624.76 given a YTM of 11%. This bond is selling at a discount compared to its par value of $1,000,000.
To calculate the value of the treasury note, we need to use the present value formula for each cash flow. This bond pays a semiannual coupon of 3% annual coupon rate, which means $30,000 every six months on a $1,000,000 par value bond. The yield to maturity (YTM) is 11%, which is 5.5% per six months.
Steps to Calculate:
Calculate the semiannual coupon payment:Using these calculations, the bond's value is approximately $634,624.76. Therefore, the T-note described in this problem is selling at a discount.
Langer Company produces plastic items, including plastic housings for humidifiers. Each housing requires about 15 ounces of plastic costing $0.08 per ounce. Langer molds the plastic into the proper shape. Langer has budgeted production of the housings for the next 4 months as follows: Units July 3,500 August 4,400 September 4,900 October 6,300 Inventory policy requires that sufficient plastic be in ending monthly inventory to satisfy 30% of the following month's production needs. The inventory of plastic at the beginning of July equals exactly the amount needed to satisfy the inventory policy. Required: Prepare a direct materials purchases budget for July, August, and September, showing purchases in units and in dollars for each month and in total. If required, round the total purchase cost to nearest whole value.
The detailed answer provides calculations for preparing a direct materials purchases budget for Langer Company for the months of July, August, and September. It also uses the principles of production planning and inventory management to show how to calculate the amount of raw materials to be purchased each month.
Explanation:To calculate the purchases budget for each of the months in question we first compute the total amount of plastic needed for production schedule and then add additional plastic for inventory as per the company's policy.
1. For July, the production requirement is 3500 units. Each unit requires 15 ounces of plastic. Therefore the total plastic needed is 3500*15 = 52500 ounces. The company will need additional 30% of August's production i.e. 30%*4400*15 = 19800 ounces. Therefore, total ounces to be purchased in July = 52500+19800 = 72300 ounces. In dollar Terms, 72300*0.08 = $5784
2. For August, production requirement is 4400*15 = 66000 ounces. Additional 30% for September's production = 30%*4900*15 = 22050 ounces. Therefore, total ounces to be purchased in August = 66000+22050 = 88050 ounces. In dollar terms, 88050*0.08 = $7044
3. For September, production requirement is 4900*15 = 73500 ounces. Additional 30% for October's production = 30%*6300*15 = 28350 ounces. Therefore, total ounces to be purchased in September = 73500+28350 = 101850 ounces. In dollar terms, 101850*0.08 = $8148
The total purchase cost over all three months is $5784 + $7044 + $8148 = $20976 (rounded to the nearest whole number).
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Eagle Fabrication has the following aggregate demand requirements and other data for the upcoming four quarters. Quarter Demand Previous quarter's output 1500 units 1 1300 Beginning inventory 200 units 2 1400 Stock-out cost $50 per unit 3 1500 Inventory holding cost $10 per unit at end of quarter 4 1300 Hiring workers $4 per unit Laying off workers $8 per unit Unit cost $30 per unit Overtime $10 extra per unit What is the cost of the following plans: a. Plan A—chase demand by hiring and layoffs. Cost = $ b. Plan B—produce at a constant rate of 1200 and obtain the remainder from overtime. Cost = c. What plan would you choose?
Plan A - chase demand by hiring and layoffs will be chosen.
Explanation:
Since this is a chase plan, there is no scope of the stockout and the overtime is also not planned. the following is used to choose the plan.
Qty Demand Production Hire Fire Ending inventory
1500 200
1 1400 1200 0 300 0
2 1200 1200 0 0 0
3 1500 1500 300 0 0
4 1300 1300 0 200 0
Total 5200 300 500 0
Marginal cost $30 $4 $8 $10
Cost $156,000 $1,200 $4,000 $0
$161,200
The question is about the plan that needs to be implemented.
Demand for quarter 1 is 1300 and 200 units is in beginning stock so a production of 1100 units will be required.
In the 2nd quarter a production of 1400 units, 1500 units will be produced in the 3rd quarter and 1300 units will need to be produced in the 4th quarter in order to meet the demand.
The cost will be incurred accordingly and then the plan with the lowest cost will be selected in order to increase profitability.
The lowest cost in incurred in Plan A and therefore Plan A will be chosen and implemented.
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Fast Auditors prepared audited financial statements for Mega Company's registration statement in compliance with the 1933 Securities Act. John bought stock in Mega Company. It was discovered that the financial statements prepared for the registration statement contained some important omissions. John sued Fast Auditors to recover his investment when Mega Company turned out to be a bad investment. What must John prove to recover from Fast Auditors
Answer:
As per the Securities Act of 1933, John must prove only that the registration statement contained some important omissions
Explanation:
The Securities Act of 1933 also known as the "Truth in Securities" law. This law requires that companies have to submit information to the investors about the securities being offered for public sale.
It was the first major federal securities law passed.
President Roosevelt stated that the law was aimed at correcting some of the wrongdoings included insider trading, the sale of fraudulent securities, and other wrongdoings that some financial institutions and professional stock traders engaged in.
In the given question,
John must prove only that the registration statement contained some important omissions as per the Securities Act of 1933
Fabulous Frames Frame Shop wants to know the effect of different inventory costing methods on its financial statements. Inventory and purchases data for June are:
Units Unit Cost Total Cost
Jun 1 Begining inventory 2,200 $ 13.00 $28, 600
4 Purchase 1,700 $ 13.40 22,780
9 Sale (1900)
Required:
1. If Fabulous Frames Frame Shop uses the FIFO method, the cost of the ending inventory will be _________.
A. $ 25,000.
B. $ 26, 680.
C. $ 22, 780.
D. $ 24, 700.
If Fabulous Frames Frame Shop uses the FIFO method, the cost of the ending inventory will be:
B. $26680
"FIFO (First-In-First-Out)"First In, First Out (FIFO) is an bookkeeping strategy in which resources acquired or obtained to begin with are arranged of to begin with.
FIFO accept that the remaining stock comprises of things acquired last.
Jun 1 : Beginning Inventory : 2200 units x $13 = $28600
Jun 4 : Purchases : 1700 units x $13.4 = $22780
Total units : 2200 + 1700 = 3900 units
Sales : 1900 units
Cost of Goods Sold =Sales*Total Units
Cost of Goods Sold=1900 x $13
Cost of Goods Sold= $24700
Ending inventory:
(2200 - 1900) x $13 = $3900
1700 x $13.4 = $22780
Ending inventory : $3900 + $22780
Ending inventory= $26,680
Thus, the correct answer is B.
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If Fabulous Frames Frame Shop uses the FIFO method, the cost of the ending inventory will be $24,700. The correct option is D. $ 24, 700.
1. Calculate the remaining units and total cost after the sale on June 9 using the FIFO method:
- Beginning inventory units = 2,200
- Purchase units = 1,700
- Sale units = 1,900
- Remaining units = Beginning inventory units + Purchase units - Sale units = 2,200 + 1,700 - 1,900 = 2,000 units
- Calculate the remaining total cost:
- Beginning inventory cost = $28,600
- Purchase cost = $22,780
- Remaining cost = Beginning inventory cost + Purchase cost - Cost of units sold = $28,600 + $22,780 - (1,900 * $13.00) = $51,380 - $24,700 = $26,680
2. Therefore, if Fabulous Frames Frame Shop uses the FIFO method, the cost of the ending inventory will be $24,700.
Project team members can identify who should be notified of task completion status by checking the:Select one:a. Control accountb. Linear responsibility chartc. Statement of workd. Monthly joint review report
Answer:
The correct answer is letter "B": Linear responsibility chart.
Explanation:
A Linear Responsibility Chart (LRC) is, just like its name indicates, a chart where all the participants of a project are in a hierarchical order so subordinates will know who to report and what the command structure of the group is. LRCs display the function of the main representatives of the plan to be carried out so they are helpful to create correct lines of communication and coordination during the development of the project.
SGA Consulting had a FCFE of $3.2M according to the just released financial statement and has 3.2M shares outstanding. SGA's required return on equity is 13%, and WACC is 11.5%. If FCFE is expected to grow at 8.5% forever, the intrinsic value of SGA's shares is
Answer:
The value of Equity is $77.16 million and the value per share is $24.11
Explanation:
The FCFE or free cash flow to equity can be used to calculate the intrinsic value of a company using the discounted cash flow approach. As the growth rate in FCFE is constant, the terminal value of the future FCFEs can be calculated as follows,
Value of Equity = FCFE * (1+g) / r - g
Value of Equity = 3.2 * (1+0.085) / (0.13 - 0.085)
Value of Equity = $77.16 million
The intrinsic value per share = 77.16 / 3.2 = $24.11 per share
The intrinsic value of a share of SGA Consulting is calculated as $19.23 per share using the Gordon Growth Model, which uses the Free Cash Flow to Equity (FCFE), the growth rate, and the required return on equity.
Explanation:The intrinsic value of SGA's shares can be calculated using the Gordon Growth Model, which is used to determine the intrinsic value of a stock based on a future series of dividends that grow at a constant rate. Given that the Free Cash Flow to Equity (FCFE) is $3.2 million, the growth rate ('g') is 8.5%, and the required return on equity ('k') is 13%. The formula is as follows: Value = FCFE * (1 + g) / (k - g).
Substituting the given values in, we get: Value = 3.2M * (1 + 0.085) / (0.13 - 0.085) = $61.54M
To find the value per share, we simply divide this value by the number of shares outstanding - 3.2M. So, Value per share = 61.54M / 3.2M = $19.23 per share
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Use the following corporate bond quote information to answer the questions that follow. Since this is a corporate bond,
assume the company makes semi-annual coupon payments and also assume the bond matures on today’s date in its
maturity year.
Bond Cur. Yld. Vol. Close Net Chg.
Doh! 9 ½ 18 9.0 5 105 1/2 - 1/4
Doh! 8 ½ 21 9.4 10 90 1/4 -1/2
1. How much would each bond cost you to buy today if its face value is $1000?
2. How much would each bond cost you yesterday if its face value were $1000?
3. What is each bond’s yield to maturity?
4. What is each bond’s expected capital gains yield today?
5. Now imagine you purchased each bond today at the current price. A year later the yield to maturity for each
bond falls by one percentage point. What is your total rate of return for each bond?
6. Now imagine the same scenario in #5 (the last question) except the yield to maturity for each bond increases
one percentage point for each bond a year later. What is your total rate of return for each bond?
7. Which bond do you prefer in #5, and what type of risk are you more exposed to if you choose this particular
bond?
8. Which bond do you prefer in #6, and what type of risk are you more exposed to if you choose this particular
bond?
Answer:
Check the explanation
Explanation:
Bond Cur.Yld. Vol. Close Net Chg.
Doh! 9 ½ 18 9.0 5 105 1/2 - 1/4
Doh! 8 ½ 21 9.4 10 90 1/4 -1/2
1. As given in question:
Closing Price of the first bond: =105.5*10
=1055
Closing Price of the second bond: =90.25*10
=902.5
2. Yesterday's price for first bond: =(105.5+0.25)*10
=1057.5
Yesterday's price for second bond: =(90.25+0.5)*10
=907.5
3. kindly check the attached image below to see the solution to question 3
4. Capital Gain Yield for first bond =(P1-P0)/P0
=(1055-1057.5)/1057.5
=-0.236%
An advertisement for the Honda Civic Hybrid featured gas mileage in the subheading (49 city/51 highway). The copy also noted that owners of this automobile may be eligible for a clean-fuel tax deduction. At the time this ad appeared, gas was more than $3.00 per gallon, which made the information important to consumers. This is an example of which type of appeal
Answer:
Utilitarian appeal
Explanation:
Utilitarian appeal: The term "utilitarian appeal" is described as one of the rhetorical or psychological strategies that are responsible for emphasizing or signifying the benefits associated with some of the services or products related or connected to its "practical functionality". However, the utilitarian appeal is considered as a "rational appeal" instead of an "emotional appeal".
In the question above, the given statement represents "utilitarian appeal".
Edelman Engines has $11 billion in total assets. Its balance sheet shows $1.1 billion in current liabilities, $7.7 billion in long-term debt, and $2.2 billion in common equity. It has 900 million shares of common stock outstanding, and its stock price is $25 per share. What is Edelman's market/book ratio? Round your answer to two decimal places.
Answer:
10.23x
Explanation:
Market/Book Ratio = Stock Price / Net Book Value per Share
Stock Price = $25 per share
Net Book Value per Share = Net Book Value / shares of common stock outstanding
Shares of common stock outstanding = 900 million shares
where;
Total Assets = $11 billion
Total Liabilities = Current Liabilities + Long-Term Liabilities
Total Liabilities = $1.1 billion + $7.7 billion
Total Liabilities = $8.8 billion
Hence;
Net Book Value = Total Assets - Total Liabilities
Net Book Value = $11 billion - $8.8 billion
Net Book Value = $2.2 billion
Therefore;
Net Book Value per Share = Net Book Value / shares of common stock outstanding
Net Book Value per Share = $2.2 billion / 900 million shares
Net Book Value per Share = $2,200,000,000 / 900,000,000 shares
Net Book Value per Share = $2.44 per share
So;
Market/Book Ratio = Stock Price / Net Book Value per Share
Market/Book Ratio = $25 per share / $2.44 per share
Market/Book Ratio = 10.23x
It means that Stock is over valued and it has performed well because Market/Book Ratio is greater than 1. So the Stock price is set at higher price in relation to Edelman Engines' Net Book Value, so its Market/Book Ratio is 10.23x.
"Division A, which is operating at capacity, produces a component that currently sells in a competitive market for $25 per unit. At the current level of production, the fixed cost of producing this component is $8 per unit and the variable cost is $10 per unit. Division B would like to purchase this component from Division A. The price that Division A should charge Division B for this component is:"
Answer:
$25 per unit
Explanation:
Data provided in the question
Selling price per unit = $25
Fixed cost per unit = $8
Variable cost per unit = $10
Based on the above information, the price that division A should charged from Division B is equal to the selling price per unit i.e $25 because Division A currently sells and operates in a competitive market so it should be same for division B
If the monthly sales volume required to break even is $190,000 and monthly fixed costs are $55,900, the contribution margin ratio is closest to: Select one: a. 29% b. 71% c. 340% d. 23%
Answer:
a. 29%
Explanation:
Given that
Contribution margin = $55,900
Sales = $190,000
The computation of contribution margin ratio is shown below:-
Contribution margin ratio = Contribution margin ÷ Sales
= $55,900 ÷ $190,000
= 29%
Therefore for computing the contribution margin ratio we simply divide sales by contribution margin ratio.
Johnson Enterprises uses a computer to handle its sales invoices. Lately, business has been so good that it takes an extra 3 hours per night, plus every third Saturday, to keep up with the volume of sales invoices. Management is considering updating its computer with a faster model that would eliminate all of the overtime processing.
Current Machine New Machine
Original purchase cost $15,230 $25,080
Accumulated depreciation $ 6,800 _
Estimated annual operating costs $24,950 $19,560
Useful life 5 years 5 years
If sold now, the current machine would have a salvage value of $8,490. If operated for the remainder of its useful life, the current machine would have zero salvage value. The new machine is expected to have zero salvage value after 5 years.
Prepare an incremental analysis. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
Answer:
The incremental cost is ($10,360)
Explanation:
Analysis of total cost over the 5 year period
Retain Old Machine Buy New Machine
Variable / Incremental Operating
Costs
Old Machine 124,750
New Machine 97,800
Old Machine Book Value
Retain: Annual depreciation 8,430
Buy : Lump sum written off 8,430
Old Machine Disposal (8,490)
Purchase Cost of New Machine 25,080
Total Cost 133,180 122,820
The use of new machine will result in lower cost for the next 5 years.The incremental cost is ($10,360)
Which of the following is included in the U.S. financial account? transactions involving trade between nations. interest payments for overseas stock purchases. net transfer payments. foreign aid payments. foreign stock purchases by Americans.
Answer:
The correct answer is letter "D": foreign stock purchases by Americans.
Explanation:
The U.S. financial account is part of the Balance of Payments of the country that reflects the domestic assets owned by foreigners and the foreign assets owned by Americans. In case the U.S. financial account increases, it means there are more foreigners owning assets locally than Americans owning assets abroad. If the account decreases, there are more Americans owning assets abroad than foreigners owning assets in the U.S.
Therefore, foreign stock purchases by Americans will be included in the U.S. financial account.
The independent cases are listed below that includes all items relevant to operating activities: Case A Case B Case C Sales revenue $ 71,000 $ 61,000 $ 102,000 Cost of goods sold 38,000 29,000 68,200 Depreciation expense 10,600 2,600 26,600 Salaries and wages expense 5,600 13,600 8,600 Net income 16,800 15,800 (1,400 ) Accounts receivable increase (decrease) (1,000 ) 4,600 3,600 Inventory increase (decrease) 2,600 0 (3,600 ) Accounts payable increase (decrease) 0 3,100 (1,000 ) Salaries and wages payable increase (decrease) 1,800 (2,600 ) 1,000 Compute cash flows from operating activities using the direct method. (Amounts to be deducted should be indicated with a minus sign.)
Final answer:
To calculate cash flows from operating activities using the direct method, adjust sales revenue for changes in accounts receivable, subtract adjusted costs of goods sold and salaries, and make additional adjustments for changes in inventory and accounts payable.
Explanation:
Calculating Cash Flows from Operating Activities
To compute the cash flows from operating activities using the direct method, we follow these steps for each case:
Begin with sales revenue and adjust for the change in accounts receivable to find cash collected from customers.Subtract the cost of goods sold and adjust for the inventory and accounts payable changes to find cash paid to suppliers.Subtract the salaries and wages expense and adjust for the change in salaries and wages payable to find cash paid to employees.Subtract any other operating expenses, adjusting for any associated changes in liabilities or assets that affect cash.However, in these particular cases, the only expenses we are given are for cost of goods sold, depreciation, and salaries and wages. Since depreciation expense doesn't affect cash, only cases with changes in receivables, inventory, and accounts payable will have adjustments.
Note that in a real-world scenario, there might be other adjustments necessary for items such as other operating expenses, interest paid, and income taxes paid.
Here's how the calculation would look for Case A (as an example):
Cash collected from customers = Sales revenue - Increase in accounts receivable = $71,000 - ($-1,000) = $72,000
Cash paid to suppliers = Cost of goods sold - Increase in inventory + Increase in accounts payable = $38,000 - $2,600 + $0 = $35,400
Cash paid to employees = Salaries and wages expense - Increase in salaries and wages payable = $5,600 - $1,800 = $3,800
These computations would repeat for each case, and the subtotal of these amounts would give the cash flows from operating activities for that case.
Shady Acres neighborhood has had 103 homes sold last year out of 560 homes in the area. Sunny Hills neighborhood has had 87 homes sold with 400 total homes. Windy Woods neighborhood has had 150 homes sold with 800 total homes. Still Waters neighborhood has had 145 homes sold with 625 total homes. All are in the same general price range in well-kept areas of the city. Which neighborhood would be the best farm area based on likely reward-to-effort ratios?
Answer:
Still Waters
Explanation:
Shady Acres neighborhood has had 103 homes sold last year out of 560 homes in the area. Sunny Hills neighborhood has had 87 homes sold with 400 total homes. Windy Woods neighborhood has had 150 homes sold with 800 total homes. Still Waters neighborhood has had 145 homes sold with 625 total homes. All are in the same general price range in well-kept areas of the city.
Which neighborhood would be the best farm area based on likely reward-to-effort ratios?
For each of the neighborhoods, the sales associate should determine the turnover index. This is by dividing the number of sales per year by the total number of homes in the neighborhood.
This neighborhoods will have a turnover ratio of 23.2
(145 sales ÷ 625 total homes)
This is the highest of the four neighborhoods (Shady Acres,Sunny Hills,Windy Woods,Still Waters neighborhoods) analyzed.
Maria spends all of her money on paperback novels and beignets. In 2011 she earned $27.00 per hour, the price of a paperback novel was $9.00, and the price of a beignet was $3.00.
1. Which of the following give the nominal value of a variable?
Check all that apply.
O The price of a beignet is $3.00 in 2011.
O Maria's wage is $27.00 per hour in 2011.
O The price of a beignet is 0.33 paperback novels in 2011.
2. Which of the following give the real value of a variable?
Check all that apply.
O The price of a paperback novel is 3 beignets in 2011.
O Maria's wage is 9 beignets per hour in 2011.
O The price of a paperback novel is $9.00 in 2011.
3. Suppose that the Fed sharply increases the money supply between 2011 and 2016. In 2016, Maria's wage has risen to $54.00 per hour. The price of a paperback novel is $18.00 and the price of a beignet is $6.00. In 2016, the relative price of a paperback novel is ______(6$, 18$, 3 Beignets, .33 Beignets)________.
4. Between 2011 and 2016, the nominal value of Maria's wage ______ (increases/decreases/remains the same)____ and the real value of her wage______ (increases/decreases/reamins the same)_______.
Answer:
1. The price of a beignet is $3.00 in 2011 and Maria's wage is $27.00 per hour in 2011.
2. The price of a paperback novel is 3 beignets in 2011 and Maria's wage is 9 beignets per hour in 2011.
3. 3 Beignets
4. increases and remains the same
Explanation:
1. Nominal value is the value of a product based on the money of the day that we see. The price of a beignet is $3.00 in 2011 and Maria's wage is $27.00 per hour in 2011 are the values of the product and wage quoting the money of the day.
2. The real value of a varaible is the value in terms of the value of some other goods. In this case Paperback and Maria's wage are valued in terms of beignets.
3. The relative price of paperback is valued in terms of beignets. So if a beignet costs $6 and a paperback novel is $18. The relative price of a paperback novel will be three times the cost of beignet, since a beignet costs $6.
4. Between 2011 and 2016, the nominal value of Maria's wage increases and the real value of her wage remains the same.
Presented below is information for Blossom Company for the month of January 2022. Cost of goods sold $270,000 Rent expense $35,000 Freight-out 6,800 Sales discounts 7,800 Insurance expense 13,000 Sales returns and allowances 12,000 Salaries and wages expense 45,000 Sales revenue 431,000. Prepare an incomestatemnt using the multi-step format.
Answer and Explanation:
The preparation of the multi-step income statement is shown below:
Blossom Company
Income Statement
For the Month January 2022
Revenues
Sales revenue $431,000
Less:
Sales discount -$7,800
Sales return -$12,000
-$19,800
Net Sales $411,200
Less: Cost of goods sold -$270,000
Gross Profit $141,200
Less: Operating expenses:
Freight out -$6,800
Insurance expense -$13,000
Salaries and wages expense -$45,000
Rent expense -$35,000
Total Operating expenses -$99,800
Operating Income $41,400
We simply deduct the expenses from the gross profit so that the operating income could arrive
Why do people often want to insure fully against uncertain situations even when the premium paid exceeds the expected value of the loss being insured against? A. Assuming risk-averse individuals, the decrease in utility from a loss is greater than the increase in utility from a gain because of diminishing marginal utility. B. Assuming the consumer's objective is to maximize expected utility, one must conclude that people are not always rational. C. Assuming risk-averse individuals, the decrease in utility from a loss is greater than the increase in utility from a gain because of increasing marginal utility. D. Assuming the consumer's objective is to maximize expected utility, only if they are extremely risk averse is it rational for them to pay a higher premium to avoid a loss.
Answer:
A. Assuming risk-averse individuals, the decrease in utility from a loss is greater than the increase in utility from again because of diminishing marginal utility.
Explanation:
Risk-averse people have declining marginal utility, and this means that the pain of a loss increases at an increasing rate as the size of the loss increases.
Carroll Corporation has two products, Q and P. During June, the company's net operating income was $25,000, and the common fixed expenses were $54,000. The contribution margin ratio for Product Q was 40%, its sales were $139,000, and its segment margin was $46,000. If the contribution margin for Product P was $44,000, the segment margin for Product P was: Multiple Choice $33,000 $46,000 $8,000 $79,000
Answer:
The Segment Margin of P is $79,000
Explanation:
Given
Product Q Contribution Margin Ratio = 40%
Sales of Product Q = $139,000
Segment margin of Product Q = $46,000
Net operating income = $25,000
Common fixed expenses = $54,000
Product P Contribution Margin = $44,000
Using the following formula, we'll calculate the segment margin for product P
Net Operating Income = Segment Margin of P - Common Fixed Expense
Substituting each values
$25,000 = Segment Margin of P - $54,000
Collect like terms
Segment Margin of P = $25,000 + $54,000
Segment Margin of P = $79,000
Choose the correct statement(s) below regarding the direct write-off method for calculating bad debt expense.1.It is not normally consistent with GAAP and accrual accounting. 2.Its use tends to result in an overstatement of accounts receivable on the balance sheet.3.Under this method, bad debt expense is recognized when a specific account is determined to be uncollectibleMultiple Choice
a. III only.
b. I and III only.
c. II only.
d. I, II and III.
Answer:
d. I, II and III.
Explanation:
Under the direct written off method, there is no allowance to be made so the journal entry is as follows
Bad debt expense XXXXX
To Account receivable XXXXX
(Being the bad debt expense is recorded)
When it seems that the account is determined to be uncollectible that it would be recorded as a bad debt expense plus it results into overstated of account receivable i.e to be shown on the balance sheet. And, neither it is to be consistent with GAAP and the accrual accounting
The direct write-off method is not consistent with GAAP and accrual accounting, and bad debt expense is recognized when an account is uncollectible, making option b (I and III only) the correct choice.
Explanation:The correct statements regarding the direct write-off method for calculating bad debt expense are that it is not normally consistent with Generally Accepted Accounting Principles (GAAP) and accrual accounting and that bad debt expense is recognized when a specific account is determined to be uncollectible. Therefore, the correct answer is b. I and III only. The direct write-off method can potentially result in a mismatch of revenue and expenses, as the expense is only recognized when a specific account is deemed uncollectible, which can occur in a different period from when the related revenue was recognized. This method does not usually lead to an overstatement of accounts receivable on the balance sheet because accounts are not written off until they are deemed uncollectible.
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Gibbs Corporation produces industrial robots for high-precision manufacturing. The following information is given for Gibbs Corporation. Per Unit Total Direct materials $440 Direct labor $310 Variable manufacturing overhead $ 77 Fixed manufacturing overhead $1,983,600 Variable selling and administrative expenses $ 59 Fixed selling and administrative expenses $ 605,340 The company has a desired ROI of 19%. It has invested assets of $66,330,000. It anticipates production of 3,420 units per year. Collapse question part (a) Compute the cost per unit of the fixed manufacturing overhead and the fixed selling and administrative expenses. Fixed manufacturing overhead $ per unit Fixed selling and administrative expenses $ per unit
Answer:
Fixed manufacturing overhead per unit = $580 per unit.
Fixed selling and administrative expenses per unit = $177 per unit.
Explanation:
Units of production anticipated = 3,420
Fixed manufacturing overhead per unit = Fixed manufacturing overhead ÷ Units of production anticipated = $1,983,600 ÷ 3,420 = $580 per unit.
Fixed selling and administrative expenses per unit = Fixed selling and administrative expenses ÷ Units of production anticipated = $605,340 ÷ 3,420 = $177 per unit.
aint John Industries uses the percentage of credit sales method to estimate Bad Debt Expense. The company reported net credit sales of $500,000 during the year. Saint John has experienced bad debt losses of 3% of credit sales in prior periods. At the beginning of the year, Saint John has a credit balance in its Allowance for Doubtful Accounts of $4,000. No write-offs or recoveries were recorded during the year. What amount of Bad Debt Expense should Saint John recognize for the year
Answer:
$15,000
Explanation:
Bad Debt Expense for the year=$500,000*3%=$15,000
As per %of Sales Method, the Relevant % of sales is recorded bad debt expense. Therefore the opening balance of allowance for doubtful accounts given in the question is irrelevant.
The journal entry will be;
Bad Debt expense Dr.$15,000
Allowance for Doubtful Accounts Cr.$15,000
Answer:
$15,000
Explanation:
When we are estimating bad debts as a percentage of credit sales then bad debt expense to be recognised each year is calculated by the formula
Total Credit Sales x Percentage of bad debts
As per data given in the question the Total Credit Sales = $500,000 and Percentage of bad debts is 3%.
Therefore Bad debt expenses to be recognised for the year by Saint John Industries would be
$500,000 x 3%
$15,000.
The Journal Entry to record the above transaction is
Bad Debt Expense $15,000
Allowance for Doubtful Accounts $15,000
A customer requires during the next 4 months, respectively, 50, 65, 100, and 70 units of a commodity, and no backlogging is allowed (that is, the customer’s requirements must be met on time). Production costs are $5, $8, $4, and $7 per unit during these months. The storage cost from one month to the next is $2 per unit (assessed on ending inventory). It is estimated that each unit on hand at the end of month 4 could be sold for $6 (so that is a negative cost). Determine how much to produce each month to minimize the net cost incurred in meeting the demands for the next 4 months.
Answer:
Check the explanation
Explanation:
Assumptions:
No inventory at beginning of month
Unlimited capacity
Other costs in production were ignored
Formulate the required Linear Problem:
[tex]X_{t}[/tex] is the number of commodities produced each month during month [tex]t[/tex]
[tex]i_{t}[/tex] is it is the number of commodities on hand at the end of month [tex]t[/tex]
Where, [tex]t[/tex] = 1,2,3,4 for each month in the problem
Thus, the total cost can be obtained in the attached images below
To minimize costs over four months, you should produce exactly as demanded in the first two months, and produce surplus in the third month, taking advantage of the lower unit cost. The surplus units will cater for the fourth month minimizing the production cost, even after taking into account the storage cost.
Explanation:Calculating Optimal Production LevelIn order to minimize the net cost incurred in meeting the next four months' demand, the ideal production level must balance production costs with storage costs, maximizing efficiency. The first month, it's best to produce 50 units (as required). In the second month, it's cost-effective to produce another 65 units to meet that month's demand. For the third month, producing 100 units would cater to the demand, but due to lower per unit production costs, it's advisable to produce additional units for next month, so the production would be 170 units. In this case, you'll have 70 units in storage which will be charged $2 per unit, but it is cheaper than producing them in the fourth month. At the end of month 4, the remaining units could be sold for $6 each, further depleting the net cost.
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The following is a list of characteristics that describe a firm operating under monopolistic competition. Indicate whether these characteristics occur in the short run, the long run, or both.1. The firm produces a differentiated product. 2. The firm maximizes profits. 3. The firm earns zero economic profit. 4. All factors of production (inputs) are variable. 5. At least one factor of production (an input) is fixed. 6. The LRATC curve is tangent to the demand curve. 7. The price charged to consumers is higher than marginal cost.
Answer: 1. Both Short Run and Long Run
2. Both Short Run and Long Run
3. Long Run
4. Long Run
5. Short Run
6. Long Run
7. Both Short Run and Long Run
Explanation:
In Economics, the Short run refers to a period where wages and prices of other inputs are considered inflexible or rather hard to change whereas in the LONG RUN, these same inputs can be adjusted because they have had time to adjust.
In the both the Short and the Long Run, a company is capable of producing a differentiated product as well as maximising profit through MR=MC.
A firm can only however earn zero Economic profit in the long run as other firms come into the market and competition reaches its peak level.
It is also only in the Long Run that all factors of production are variable because they have time to adjust and adapt.
It is only in the Short run that at least one input is fixed. In the long run, all factors are variable.
In both the long and short run, the price charged to consumers can be higher than the Marginal Cost.
If you need further clarification do react or comment.
Answer:
A firm operating under monopolistic display certain characteristics short run which changes in the long run.
Explanation:
1. The firm produces a differentiated product in the short run.
2. The firm maximizes profits in the short run.
3. The firm earns zero economic profit in the Long run.
4. All factors of production (inputs) are variable in the short run.
5. At least one factor of production (an input) is fixed in the long run.
6. The LRATC curve is tangent to the demand curve in the long run.
7. The price charged to consumers is higher than marginal cost in the long run.