Answer:
A. Total return equals earnings multiplied by the dividend payout rate.
Explanation:
The payout ratio is a financial metric that shows the proportions of the earnings a company pays the shareholders in the forms of dividends. They are expressed as a percentage of the total earnings and some occasion refers top the percentage of the cash flows. Thus is called the dividend payment ratio. And is calculated by the dividend payout ratio equal to the total dividend upon the net income asDPR = Total dividends ÷ Net income.
It shows the company's earnings paid out as dividends to shareholders. A low payout ratio means a signal that the company is reinvesting bulk earnings into the expanding operations.Crane Company uses the LCNRV method, on an individual-item basis, in pricing its inventory items. The inventory at December 31, 2020, consists of products D, E, F, G, H, and I. Relevant per unit data for these products appear below. Item D Item E Item F Item G Item H Item I Estimated selling price $122$112$97$92$112$92 Cost 778282825137 Cost to complete 313126363131 Selling costs 101810201020 Using the LCNRV rule, determine the proper unit value for balance sheet reporting purposes at December 31, 2020, for each of the inventory items above.
Answer:
D $77
E $63
F $61
G $36
H $51
I $37
Explanation:
LCNRV means use the lower-of-cost-or-net-realizable-value method to value the closing items of inventory which are products D,E,F,G,H and I
Cost implies the original invoice price of the items of inventory
NRV is the estimated selling price less costs to sell and costs to complete as computed in the attached excel file.
Finally I chose as a unit value for each product the lower of cost and NRV
The January 28, 2017 (fiscal year 2016) financial statements of Caleres, Inc. reported the following information (in thousands): 2016 2015 Cost of sales $1,517,397 $1,529,527 Inventories, net 585,764 546,745 LIFO reserve 4,345 4,094 The 2016 average days inventory outstanding is:
Answer:
136.20 days
Explanation:
Given that,
Opening inventory = 546,745
Closing inventory = 585,764
Cost of goods sold in 2016 = $1,517,397
Average inventory:
= (Opening inventory + Closing inventory) ÷ 2
= (546,745 + 585,764) ÷ 2
= 1,132,509 ÷ 2
= 566,254.5
Therefore, the average days inventory outstanding is calculated by the following formula:
= Average inventory ÷ (COGS/365 days)
= 566,254.5 ÷ ($1,517,397/365)
= 566,254.5 ÷ 4,157.3
= 136.20 days
A company identified the following estimated data in its two production departments. During the current month, Assembly used 200 direct labor hours and 300 machine hours and Finishing used 300 hours direct labor hours and 200 machine hours. If the company uses a departmental overhead rate based on machine hours, how much overhead cost is assigned to Finishing this month?
Answer:
$9,000
Explanation:
1.Finishing’s departmental rate based on MH
= Finishing’s costs/Finishing’s machine hours
= $90,000/2,000 = $45 per MH
2.Cost assigned to Finishing based on MH
= Finishing’s departmental rate based on MH * Finishing’s currently used machine hours
= $45 per MH * 200 MH = $9,000
Therefore If the company uses a departmental overhead rate based on machine hours, $9,000 overhead cost will be assigned to Finishing this month
"Alpha Corporation has one-hundred full-time non-union employees. What is the minimum number of employees that must be allowed to participate in the company’s defined benefit plan?
Answer:
The minimum number of employees that must be allowed to participate in Alpha Corporation’s defined benefit plan is 40. This is based on the 40% rule explained below.
Explanation:
A traditional form of a defined benefit plan is the final salary plan, under which the pension paid is equal to the number of years worked, multiplied by the member's salary at retirement, multiplied by a factor known as the accrual rate. The final accrued amount is available as a monthly pension or a lump sum.
It is usually offered to all employees who are at least 21 years of age and who worked at least 1,000 hours for the employer in a previous year. Two years of service may be required for participation as long as the employee will be 100 percent vested immediately when he or she enters the plan.
Minimum Participation in a Defined Benefit Plan is 40% of qualifying employees. Since Alpha Corporation has 100 full time non union employees, at least 40 of them must be allowed to participate in the company's defined benefit plan.
Suppose that instead of funding the $100 million investment in 12 percent British loans with CDs issued in the United Kingdom, the FI manager in problem 20 hedges the foreign exchange risk on the British loans by immediately selling its expected one-year pound loan proceeds in the forward FX market. The current forward one-year exchange rate between dollars and pounds is $1.53/£1. a. Calculate the return on the FI’s investment portfolio (including the hedge) and the net return for the FI over the year. b. Will the net return be affected by changes in the dollar for pound spot foreign exchange rate at the end of the year?
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Calculate the value of a bond that matures in 12 years and has a $ 1 comma 000 par value. The annual coupon interest rate is 13 percent and the market's required yield to maturity on a comparable-risk bond is 11 percent.
Answer:
Price of bond=$ 1,129.847
Explanation:
The value of the bond is the present value(PV) of the future cash receipts expected from the bond. The value is equal to present values of interest payment plus the redemption value (RV).
Value of Bond = PV of interest + PV of RV
Step 1
PV of interest payments
annul interest payment
= 13% × 1000 = 130
PV = A × ( (1- (1+r)^(-n))/r
Annual yield - r= 11% per annum
Total period to maturity- n = 12 years
PV of interest
=130× (1- 1.11^(-12) )/0.11
= 844.00
Step 2
PV of Redemption Value
= 1,000 × (1.11)^(-12)
= 285.84
Step 3
Total PV = 844.00 + 285.84 = 1129.847123
Price of bond=$ 1,129.8471
Tharaldson Corporation makes a product with the following standard costs:
Standard Quantity or Hours Standard Price or Rate Standard Cost Per Unit
Direct materials 5.8 ounces $ 3.00 per ounce $ 17.40
Direct labor 0.9 hours $ 12.00 per hour $ 10.80
Variable overhead 0.9 hours $ 5.00 per hour $ 4.50
The company reported the following results concerning this product in June.
Originally budgeted output 3,800 units
Actual output 3,400 units
Raw materials used in production 20,800 ounces
Purchases of raw materials 21,900 ounces
Actual direct labor-hours 6,500 hours
Actual cost of raw materials purchases $ 42,500
Actual direct labor cost $ 13,800
Actual variable overhead cost $ 3,900
The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased.Required:a. The materials quantity variance for June is ____________.
Answer:
Material Quantity Variance= $ 3240 Unfavorable
Explanation:
Given
Standard Quantity Direct materials 5.8 ounces
Standard Price$ 3.00 per ounce * 5.8= $ 17.40
Actual output 3,400 units
Raw materials used in production 20,800 ounces
Purchases of raw materials 21,900
Working
Standard Material required for 3,400 units *5.8= 19720 ounces.
Standard Price for 19720 ounces* 3= $ 59160
Material Quantity Variance= (Standard Price * Actual Quantity)-(Standard Price * Standard Quantity)
Material Quantity Variance= 3*20,800 - (3* 19720)
Material Quantity Variance= $62400- $ 59160= $ 3240 Unfavorable
It is unfavorable because the actual quantity used is more than the standard usage.
The materials quantity variance for June is $ 3240 Unfavorable
Standard costsGiven to information following are:
The Standard Quantity Direct materials are 5.8 ounces
Then the Standard Price$ 3.00 per ounce * 5.8= $ 17.40
Actual output 3,400 units
Raw materials employed in production 20,800 ounces
Purchases of raw materials 21,900
Working note
Standard Material required for 3,400 units [tex]*5.8= 19720[/tex]ounces.
Standard Price for 19720 ounces* 3= $ 59160
Then the Material Quantity Variance is= (Standard Price * Actual Quantity)-(Standard Price * Standard Quantity)
After that Material Quantity Variance is= 3*20,800 - (3* 19720)
Now the Material Quantity Variance is = $62400- $ 59160= $ 3240 Unfavorable
Although It is unfavorable because the particular quantity used is quite the quality usage.
Thus, The materials quantity variance for June is $3240 Unfavorable
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On January 1, Year 2 Grande Company had a $15,000 balance in the Accounts Receivable account and a zero balance in the Allowance for Doubtful Accounts account. During Year 2, Grande provided $66,000 of service on account. The company collected $62,500 cash from accounts receivable. Uncollectible accounts are estimated to be 2% of sales on account. What is the amount of cash flow from operating activities that would appear on the Year 2 statement of cash flows? Multiple Choice $62,500 $61,250 $66,000 $51,300
Answer:
$62,500
Explanation:
As we know that cash flow statement records the cash inflow and cash outflow and ignored all other transactions which are not made in cash
Since in the question it is given that $62,500 is cash collected from account receivable and the same is to be shown in the operating activities in a positive sign that indicates an inflow of cash
Dakota Inc. and Jersey & Company are two large companies that manufacture and sell equipment used in the construction, mining, agricultural, and forestry industries. The companies reported the following data (in millions) for two recent years:
Dakota Jersey
Year 2 Year 1 Year 2 Year 1
Net income $2,182 $3,715 $1,925 $3,187
Average number of common shares outstanding 594 599 334 363
Required:
a. Determine the earnings per share in Year 2 and Year 1 for each company. Round your answers to two decimal places.
Answer and Explanation:
The computation of the earning per share is shown below:
As we know that
Earning per share = Net income ÷ Average number of common shares outstanding
For year 1
Dakota
= $3,715 ÷ 599 shares
= $5.30 per share
Jersey
= $3,187 ÷ 363 shares
= $8.78 per share
For year 2
Dakota
= $2,182 ÷ 594 shares
= $3.67 per share
Jersey
= $1,925 ÷ 334 shares
= $5.76 per share
A company produces two products, A and B. It has limited capacity but unlimited demand so it can sell as many of either product as it produces. Product A requires 2 machine hours per unit to produce, and Product B requires 1 machine hour to produce. Product A sells for $6 per unit and has variable costs of $2 per unit; Product B sells for $5 per unit and has variable costs of $2 per unit. What is the most profitable sales mix for the company?
Answer:
The company should use all of its limited machine hour to produce only product B. This will make it maximize profit
Explanation:
Whenever a company is faced with a limiting factor i.e a resource in short supply, the company should allocate the resource to the product with he highest contribution per unit of the scare resource
Product Cont/unit machine hr /unit cont/hr Ranking
A 6-2 = $4 per unit 2 hours $2 per hour 2nd
B 5-2 = $3 per unit 1 hour $3 per hour 1st
The company should use all of its limited machine hour to produce only product B. This will make it maximize profit
Sam buys fuel for his construction vehicles from the local distributer. He uses 8,500 gallons a month. The local distributor charges him $20.50 per order when he orders and it costs him $9.00 per gallon per year to store the gas at his farm. The distributer can arrive within an hour of his order and we have a 500 gallon tank he can fill. From a logical and reasonable standpoint, how much fuel should Sam order when he calls the distributer? (Remember how big the tank for his gas is)
Answer:
He should order 681.66 gallons to minimize the cost, but he have a 500 gallon tank he can fill, so he will order 500 gallons every time, to minimize the cost.
Explanation:
According to the given data we have the following:
h = handling cost per unit = $ 9
S = Ordering cost per order = $20.5
He uses 8,500 gallons a month, therefore, the annual demand D= 8,500*12 = 102,000 gallons .
Therefore, the optimal ordering quantity would be= [ (2*D*S) / h ]1/2
=681.66 units
He should order 681.66 gallons to minimize the cost, but he have a 500 gallon tank he can fill, so he will order 500 gallons every time, to minimize the cost.
For financial reporting purposes, an advance payment for services is NOT recorded as a revenue, but rather recorded as a(n) . It will be recognized as a revenue when it is earned. For tax reporting purposes, an advance payment is taxed immediately because the payment meets the - test. However, there is an exception which allows the prepaid income to be recognized in the following the receipt if certain conditions are met
Answer:
The correct words to fill the gaps are: liabilities,all events,year
Explanation:
The receipt of advance payment for services is not seen as revenue because the beneficiary of such receipt is yet to perform the required services that would enable to recognized such amount as revenue,since revenue is not earned the party receiving the payment has rendered the required services.
However,for tax reporting purposes the advance receipt of cash can be charged to tax without delay if the payment meets all events test.
That means all events which allow an accrual tax payer to report income or expenses have been met.
Final answer:
In financial reporting, advance payments for services are recorded as 'deferred revenue,' a liability, until the services are performed. For tax purposes, they are taxed immediately under the all-events test, with some exceptions.
Explanation:
For financial reporting purposes, an advance payment for services is not recorded as a revenue, but rather recorded as a liability.
This liability is often called deferred revenue or unearned revenue because it represents a claim on the entity's resources for services that have yet to be provided. It is recognized as revenue when the service is performed and the revenue is earned, adhering to the accrual concept and the matching principle of GAAP.
Deferred revenue is distinct from prepaid items like property taxes in government accounting, which are considered non-exchange transactions and recorded differently.
For tax reporting purposes, an advance payment is taxed immediately because the payment meets the all-events test. However, there is an exception which allows the prepaid income to be recognized in the year following the receipt if certain conditions are met.
This reflects differences in the timing of income recognition for accounting and tax purposes.
When considering non-profit organizations, the accrual concept still applies; donations are seen as payments for service in that they enable the non-profit to pursue its mission. Thus, requirements such as donor restrictions and the fulfillment of conditions tied to government grants have to be met before recognition of revenue in financial reports.
Varmit-B-Gone is a pest control service that operates in a suburban neighborhood. The company attempts to make service calls at least once a month to all homes that subscribe to its service. It makes more frequent calls during the summer. The number of subscribers also varies with the season. The number of subscribers and the average number of calls to each subscriber for the months of interest follow: SubscribersService calls (per subscriber) March 600 0.6 April 700 0.9 May 1,400 1.5 June 1,600 2.5 July 1,600 3.0 August 1,500 2.4 The average price charged for a service call is $80. Of the service calls, 30 percent are paid in the month the service is rendered, 60 percent in the month after the service is rendered, and 8 percent in the second month after. The remaining 2 percent is uncollectible. Varmit-B-Gone estimates that the number of subscribers in September should fall 10 percent below August levels, and the number of service calls per subscriber should decrease by an estimated 20 percent. The following information is available for costs incurred in August. All costs except depreciation are paid in cash.
Service costs
Variable costs $ 24,000
Maintenance and repair 22,000
Depreciation (fixed) 42,000
Total $ 88,000
Marketing and administrative costs
Marketing (variable) $ 14,500
Administrative (fixed) 55,000
Total $ 69,500
Total costs $ 157,500
Variable service and marketing costs change with volume. Fixed depreciation will remain the same, but fixed administrative costs will increase by 5 percent beginning September 1. Maintenance and repair are provided by contract, which calls for a 1 percent increase in September.
Required:
Prepare a budgeted income statement for September.
Answer:
VARMIT B-GONE
BUDGETED INCOME STATEMENT
sales revenue ( 90%*1500*2.4*80%*$80) $207,360
Service cost :
variable cost $17280
Maintenance and repair 15,998
Depreciation 42,000 75,278
Gross profit 132,082
marketing and administrative cost :
Marketing (variable ) 10,440
administrative (fixed)(55,000*105%) 57,750
bad debt( 2%*207360) 4,147 72,337
net income 59,745
Explanation:
service cost :
variable cost = (24,000/3600)*2592 = $17,280
maintenance and repairs = (22,000/3600)*2592 *101% = $15,998
Marketing cost = ($14,500/3600)*2592 = $10,440
Both Bond Bill and Bond Ted have 9.4 percent coupons, make semiannual payments, and are priced at par value. Bond Bill has 5 years to maturity, whereas Bond Ted has 22 years to maturity. Both bonds have a par value of 1,000.
Answer:
Bond Bill : -10.94 %Bond Ted: -22.47%Explanation:
I think your question is missed of key information, allow me to add in and hope it will fit the original one.
Both Bond Bill and Bond Ted have 9.4 percent coupons, make semiannual payments, and are priced at par value. Bond Bill has 5 years to maturity, whereas Bond Ted has 22 years to maturity. Both bonds have a par value of 1,000. If interest rates suddenly rise by 3 percent, what is the percentage change in the price of these bonds?
My answer:
Bond BillNew yield will be = 9.4℅ + 3℅ = 12.4℅
Semi annual yield = 12.4/2 = 6.2℅
Nper: 5*2 =10
Coupon rate: 9.4%/2 = 4.7% semiannual
=> Coupon payment: 4.7%*1,000 = $47
Using present value formula in excel
pv=(rate,nper,pmt,fv)
pv= (6.2%, 10, 47, 1000)
pv= 890.64
=> Therefore, ℅ change =
(890.64 - 1000) / 1000 = -10.94%
Bond TedNew yield will be = 9.4℅ + 3℅ = 12.4℅
Semi annual yield = 12.4/2 = 6.2℅
Nper: 22*2 =44
Coupon rate: 9.4%/2 = 4.7% semiannual
=> Coupon payment: 4.7%*1,000 = $47
Using present value formula in excel
pv=(rate,nper,pmt,fv)
pv= (6.2%, 44, 47, 1000)
pv = $775.21
=> Therefore, ℅ change :
(775.21 - 1000) / 1000 = -22.47%
Many economists believe that the market for wheat in the United States is an almost perfectly competitive market. If one firm discovers a technology that makes its wheat taste better and have fewer calories than all other wheat offered in the market, the wheat market would become less competitive becausea. there would no longer be many buyers and many sellers of wheat.
b. it would no longer be easy to enter and exit the existing wheat market.
c. the products would no longer be similar in the wheat market.
d. the government would want to intervene.
e. individuals would not want to switch products.
Answer:
Many economists believe that the market for wheat in the United States is an almost perfectly competitive market. If one firm discovers a technology that makes its wheat taste better and have fewer calories than all other wheat offered in the market, the wheat market would become less competitive because the products would no longer be similar in the wheat market- Option c.
Explanation:
Option c is the correct answer- the products would no longer be similar in the wheat market, the reason being that people with different taste preferences would prefer either of the two kinds of wheat available in the market, therefore making them less concentrated.
The US wheat market would become less competitive if one firm's product becomes superior to others as it disrupts the uniformity of products demanded by a perfectly competitive market. This corresponds to the multiple-choice option 'c'.
Explanation:In general, economists consider the US wheat market to be highly competitive. Since the question posits a hypothetical situation where one firm devises a new technology that makes its wheat better tasting and lower in calories, the wheat market may become less competitive. This is because the products within the wheat market would no longer be similar. According to the principles of perfect competition, for a market to be perfectly competitive, all products offered must be similar or identical. This option aligns with choice c, as that firm's wheat becomes distinctively superior, disrupting the uniformity that characterizes a perfectly competitive market.
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Rent for the month $ 1,650
Monthly take-home salary $ 3,185
Spending for food $ 845
Cash in checking account $ 650
Savings account balance $ 2,090
Balance of educational loan $ 3,360
Current value of automobile $ 9,300
Telephone bill paid for month $ 165
Credit card balance $ 335
Loan payment $ 280
Auto insurance $ 430
Household possessions $ 5,400
Video equipment $ 2,850
for electricity $ 190
Lunches/parking at work $ 280
Donations $ 360
Calculate the total assets and total liabilities
Answer:
Personal assets are basically the valuable things that a person possesses. They include both physical assets (e.g. car) or financial assets (e.g. checking account).
TOTAL ASSETS
Checking account $650
Savings account $2,090
Automobile $9,300
Household possessions $5,400
Video equipment $2,850
Total $20,290
Personal liabilities are all the loans (e.g. student loans), debts, unpaid service, or unpaid taxes that a person might have.
TOTAL LIABILITIES
Educational loan $3,360
Credit card $335
Total $3,695
This person's net worth = assets - liabilities = $20,290 - $3,695 = $16,595
Suppose that JPMorgan Chase sells call options on $1.35 million worth of a stock portfolio with beta = 1.70. The option delta is 0.70. It wishes to hedge its resultant exposure to a market advance by buying a market-index portfolio. Suppose it use market index puts to hedge its exposure. The index at current prices represents $1,000 worth of stock. a. How many dollars’ worth of the market-index portfolio should it purchase to hedge its position?
Answer:
Particulars Amount Explanation
Call options 1350000
Beta of stock 1.7
Delta 0.7
Market change 1% Implied stock change is 1.7
Stock changes by 1.7 1.19 Implied exposure on call
options on stock ( ie 1.7*0.7)
Amount of exposure 1606500 Derived by multiplying
1.19*1,350,000
Hence market index portfolio worth $1,606,500 should be bought , however the market index portfolio trade in multiples of 1000 hence $1,607,000 worth should be obtained to hedge the exposure
Explanation:
Dexter Metals, paid its first annual dividend yesterday in the amount of $0.18 a share. The company plans to double each annual dividend payment for the next 3 years. After that time, it plans to pay $1.25 a share for 2 years than then pay a constant dividend of $1.60 per share indefinitely. What is one share of this stock worth today if the market rate of return on similar securities is 10.24 percent
Answer:
The price per share of this stock is $13.20
Explanation:
Using the dividend discount model, we can calculate the price per share today of this stock. The DDM values a stock based on the present value of the expected future dividends of the stock discounted using the required rate of return on the stock. The price o=per share today for this stock is,
P0 = 0.18 * (1+1) / (1+0.1024) + 0.18 * (1+1)^2 / (1+0.1024)^2 +
0.18 * (1+1)^3 / (1+0.1024)^3 + 1.25 / (1+0.1024)^4 + 1.25 / (1+0.1024)^5 +
(1.60 / 0.1024) / (1+0.1024)^5
P0 = $13.20
Bia garden store makes two types of gazebo. Making a wooden gazebo requires 4 hours of labor while making a metal gazebo requires 10 hours of labor. During the most recent accounting period the company made 2,000 wooden gazebos and 500 metal gazebos. Indirect manufacturing costs amounted to $52,000 and are allocated based on labor hours. Based on this information: OA. $4 of overhead cost should be allocated to each gazebo regardless of the type. OB. $20.80 of overhead cost should be allocated to each gazebo regardless of the type. O C.$16 of overhead cost should be assigned to each wooden gazebo and $40 of overhead cost should be assigned to each metal gazebo. None of the answers are correct.
Answer:
C.$16 of overhead cost should be assigned to each wooden gazebo and
$40 of overhead cost should be assigned to each metal gazebo
Explanation:
2,000 wooden x 4 hours = 8,000 labor hours
500 metal x 10 = 5,000 labor hours
total hours 13,000
single manufacturing overhead: 52,000 / 13,000 = $4 per labor hours
wooden gazebos: 4hours x $4 = $ 16
metal gazebos: 10 hours x $4 = $40
Keck Co. had 300 units of product A on hand at January 1, 2017, costing $21 each. Purchases of product A during January were as follows:Date Units Unit CostJan. 10 400 $2218 500 2328 200 24A physical count on January 31, 2017 shows 400 units of product A on hand. The cost of the inventory at January 31, 2017 under the LIFO method isa. $9,400.b. $8,900.c. $8,500.d. $8,200.
Answer:
c. $8,500
Explanation:
The computation of the ending inventory using the LIFO method is shown below:
Since it is given that 400 units of product A are on hand which reflects the ending inventory units
So
= 300 units × $21 + 100 units × $22
= $6,300 + $2,200
= $8,500
The 100 units depicts the remaining units i.e
= 400 units - 300 units
= 100 units
First we take the Jan 1 units than the remaining units would take from Jan 10
Dulce Corporation had 220,000 shares of common stock outstanding during the current year. There were also fully vested options for 10,500 shares of common stock were granted with an exercise price of $20. The market price of the common stock averaged $25 for the year. Net income was $4.5 million. What is diluted EPS? (Round your answer to 2 decimal places.)
Answer:
$20.26
Explanation:
The computation of diluted Earning per share is shown below:-
Shares for vested options = (Vested options × Exercise price) ÷ Common stock average
= (10,500 × $20) ÷ $25
= 8,400
Now,
Diluted Earning per share = Net income ÷ (Common stock shares + (Vested options - Shares for vested options))
= $4,500,000 ÷ (220,000 + (10,500 - 8,400)
= $4,500,000 ÷ (220,000 + 2,100)
= $4,500,000 ÷ 222,100
= $20.26
So, for computing the diluted Earning per share we simply applied the above formula.
If returns of S&P 500 stocks are normally distributed, what range of returns would you expect to see 95% of the time? Base your answer on the information below. Small Stocks S&P 500 Corporate Bonds T-Bills Average Return 18.83% 11.44% 6.81% 3.84% Standard Deviation of returns 38.81% 20.07% 6.69% 3.25%
Answer: Between -28.7% and 51.58%
Explanation:
95% of the time would mean a 95% interval which would mean that it is between -2 and +2 standard deviation as it is Normally distributed.
We can therefore use the following formula to find the confidence interval,
= Average return + (2 * standard deviation) and,
= Average - return (2 * standard deviation)
= 11.44% + (2*20.07%)
= 0.5158
= 51.58%
and
= 11.44% - (2*20.07%)
= -0.287
= -28.7%
Between -28.7% and 51.58% is the range of returns expected to be seen 95% of the time.
If you need any clarification please feel free to react or comment.
Assume that it is now November 30th, your client has an Accounts Receivable balance of $4,500 and an Allowance for Uncollectible Accounts balance of $75 (assume the normal balance for both accounts). November Sales totaled $15,000. The estimate for the uncollectible amount is based on November Sales, and the estimate is $450. What would be the allowance transaction AMOUNT?
Answer:
$375
Explanation:
When a company makes sales on account, debit accounts receivable and credit sales. Based on assessment, some or all of the receivables may be uncollectible.
To account for this, debit bad debit expense and credit allowance for doubtful debt. Should the debt become uncollectible (i.e go bad), debit allowance for doubtful debt and credit accounts receivable.
Allowance transaction amount
= $450 - $75
= $375
"Peerless Corporation (a U.S. company) made a sale to a foreign customer on September 15, for 106,000 crowns. It received payment on October 15. The following exchange rates for 1 crown apply: Prepare all journal entries for Peerless in connection with this sale, assuming that the company closes its books on September 30 to prepare interim financial statements. (If no entry is required for a transaction/event, select "" No journal entry required"" in the first account field.) 4 journal entries"
Question. The exchange rate was not added to your question. Below is the exchange rate used to answer this question.
September 15 $ 0.60
September 30 $0.66
October 15 $0.62
Answer: See the explanation for the prepared journal entry.
Explanation:
Date Account title/Explanation Debit Credit
Sept 15 Account receivable (106,000*0.6) 63600
Sales 63600
(To record the sales)
Sept 30 Account receivable(106,000*(0.66-0.6) 6360
Foreign exchange gain 6360
[ To record the adjustment of forex gain/loss]
Oct. 15 Foreign exchange gain/loss
(106000*(0.66-0.62) 4240
Account receivable 4240
[ To record the entry for changes
in the exchange rate]
Oct 15 Cash (106,000*0.62) 65720
account receivable 65720
[ To record the entry for receipt of payment]
Note; No journal entry require for 3rd entry.
Suppose the marginal propensity to consume is 0.75 and the government spending multiplier is 4. If the government decreases its purchases by $100 million, the aggregate demand curve will shift to the by $ million. If the government increases income taxes by $100 million, the aggregate demand curve will shift to the by $ million.
Final answer:
The aggregate demand curve will shift to the left by $400 million if government purchases decrease by $100 million, and it will shift to the right by $300 million if income taxes increase by $100 million.
Explanation:
The government spending multiplier is a number that indicates how much change in aggregate demand would result from a given change in government spending. If the government decreases its purchases by $100 million, the aggregate demand curve will shift to the left by $400 million. This is because the initial decrease in government spending will lead to a decrease in income, which in turn decreases consumption. The opposite is true for an increase in income taxes by $100 million. The aggregate demand curve will shift to the left by $300 million.
You own a farm, you hire labor and capital to produce apples. The marginal product of the last unit of labor input is 15 and the marginal product of the last unit of capital input is 45. The market wage for labor is $8. If you are using the optimal combination of inputs, then the price of capital is _______.
a. $45
b. $3
c. $24
d. $360
Answer:
c. $24
Explanation:
At the optimal combination, the ratio between the marginal product for the last units of capital and labor must equal the ratio between the price of capital and the price of labor.
If Labor costs $8 and has a marginal product of 15, since capital has a marginal product of 45, the price of capital is:
[tex]\frac{45}{15}=\frac{C}{\$8}\\ C=\$24[/tex]
Price of capital is $24.
Answer:
C-$24
Explanation:
At optimal combination of inputs that is at the equilibrium level the ratio of marginal productivity of labor to the marginal productivity of capital is equal to the ratio of price of labor(wage) to the price of capital(rent). That is ,
MPL/MPK = W/R
WHERE , MPL = MARGINAL PRODUCTIVITY OF LABOR
MPK = MARGINAL PRODUCTIVITY OF CAPITAL
W = WAGE
R = RENT
SO , AS GIVEN , 15/45 = 8/R
SO , R = 8*3 = $24.
SO ANSWER IS OPTION C.$24
When valuing raw materials inventory at lower-of-cost-or-market, what is the meaning of the term "market"? Discounted present value. Net realizable value. Net realizable value less a normal profit margin. Replacement cost, Net realizable value, or Net realizable value less a normal profit margin.
Answer:
Replacement Cost
Explanation:
Replacement cost can be described as to the amount of money a business must currently spend to replace an essential asset like a real estate property, an investment security, a lien, or another item, with one of the same or higher value.
In other words, replacement cost definition is the current market price a company would have to pay to replace an existing asset.
M. Cotteleer Electronics supplies microcomputer circuitry to a company that incorporates microprocessors into refrigerators and other home appliances. One of the components has an annual demand of 265 units, and this is constant throughout the year. Carrying cost is estimated to be $1.25 per unit per year, and the ordering cost is $19 per order.
a) To minimize cost, how many units should be ordered each time an order is placed?
b) How many orders per year are needed with the optimal policy?
c) What is the average inventory if costs are minimized?
d) Suppose that the ordering cost is not $19, and Cotteleer has been ordering 125 units each time an order is placed. For this order policy (of Q = 125) to be optimal, determine what the ordering cost would have to be.
Answer and Explanation:
The computation is shown below:
a. The computation of the economic order quantity is shown below:
[tex]= \sqrt{\frac{2\times \text{Annual demand}\times \text{Ordering cost}}{\text{Carrying cost}}}[/tex]
[tex]= \sqrt{\frac{2\times \text{265}\times \text{\$19}}{\text{\$1.25}}}[/tex]
= 90 units
b. The number of orders would be equal to
= Annual demand ÷ economic order quantity
= 265 ÷ 90 units
= 3 orders per year
c. The average inventory is
= Economic order quantity ÷ 2
= 90 units ÷ 2
= 45 units
d. Now in this we have to find out the ordering cost which is shown below by applying the economic order quantity formula
[tex]Economic\ order\ quantity = \sqrt{\frac{2\times \text{Annual demand}\times \text{Ordering cost}}{\text{Carrying cost}}}[/tex][tex]125\ units = \sqrt{\frac{2\times \text{265}\times \text{ordering\ cost}}{\text{\$1.25}}}[/tex]
After squaring both the sides, the ordering cost is $36.85
Earned $16,200 of cash revenue. Borrowed $12,000 cash from the bank. Adjusted the accounting records to recognize accrued interest expense on the bank note. The note, issued on September 1, 2018, had a one-year term and an 8 percent annual interest rate.
Required
A.What is the amount of interest expense to record for 2018?
B.What amount of cash was paid for interest in 2018?
C.Use a horizontal statements model to show how each event affects the balance sheet, income statement, and statement of cash flows. Indicate whether the event increases (I), decreases (D), or does not affect (NA) each element of the financial statements. In the Cash Flows column, designate the cash flows as operating activities (OA), investing activities (IA), or financing activities (FA). The first transaction has been recorded as an example.
Answer:
A. The amount of interest expense to record for 2018 is $320, calculated as follows: $12,000 x 8% x 4/12 = $320.
B. No amount of cash was paid for interest in 2018; i.e. = $0.00
C. Effect of each transaction on balance sheet, income statement, and statement of cash flows:
1. Cash Revenue of $16,200
Balance Sheet - Cash and Retained Earnings are increased by $16,200.
Income Statement - Revenue is increased by $16,200.
Statement of Cash Flows: Cash inflows are increased by $16,200. It is an operating activity (OA)
2. Bank Note Payable of $12,000 with accrued interest of $320 for 2018:
Balance Sheet - Cash and Notes Payable are increased with $12,000; Interest on Notes Payable is increased by $320 and Retained Earnings decreased by $320.
Income Statement: Net Income is decreased by $320.
Statement of Cash Flows: Cash inflows are increased by $12,000. It is a financing activity (FA).
Explanation:
1. Cash revenue increases net income and Cash Account balance, and reflects positively on the cash flows for operating activities.
2. Notes Payable increases Cash Account balance (an asset) and Notes Payable (a liability). It also increases the cash inflow for financing activities.
3. Accrued Interest on Notes Payable increases liability and decreases the net income, which reflects negatively on the Retained Earnings (Equity). It does not affect the statement of cash flows as no disposal had been made yet.
Finch Painting Company is considering whether to purchase a new spray paint machine that costs $2,000. The machine is expected to save labor, increasing net income by $300 per year. The effective life of the machine is 15 years according to the manufacturer’s estimate. Required Determine the unadjusted rate of return based on the average cost of the investment
Answer:
13.9%
Explanation:
Given that:
Cost of the machine: $2,000
Net income increasing: $300
Number of years: 15 => depreciation per year: $2,000 /15 =$133
=> Average Return: $300 - $133 = $167
As we know:
Average investment (Assuming no salvage value:)
= (beginning investment + ending investing)/2
(2000 + 0 )/ 2 = 1,200
So, the unadjusted rate of return based on the average cost of the investment:
= [tex]\frac{average \: return}{average \: investment}[/tex]
= $167 / $1,200
= 0.139
= 13.9%
To calculate the unadjusted rate of return based on the average cost of the investment for the spray paint machine, divide the annual increase in net income by the average cost of the investment. The average cost is obtained assuming straight-line depreciation over the effective life of 15 years. In this case, the unadjusted rate of return is 30%.
The student is asking about how to determine the unadjusted rate of return on a new potential investment in a spray paint machine, based on the average cost of the investment. The unadjusted rate of return is calculated by taking the expected annual increase in net income and dividing it by the average cost of the investment. If the spray paint machine costs $2,000 and increases net income by $300 per year with an effective life of 15 years, the unadjusted rate of return calculation would be as follows:
Annual Increase in Net Income: $300
Initial Cost of the Machine: $2,000
Effective Life of the Machine: 15 years
Average Cost of Investment: ($2,000 / 2) = $1,000 (assuming straight-line depreciation)
Unadjusted Rate of Return = ($300 / $1,000) * 100 = 30%
Therefore, the unadjusted rate of return on the spray paint machine is 30%.